Former FBI Asst. Director Accuses Clintons Of Being A “Crime Family”

During a radio interview with John Catsimatidis, former assistant FBI director James Kallstrom heaped praise on Republican presidential nominee Donald Trump before slamming the Clintons. Kallstrom, known for leading the investigation into the explosion of TWA flight 800 in the late ’90s, said on Sunday that Bill and Hillary Clinton are part of a “crime family” and argued top officials hindered the investigation into Hillary Clinton’s private email server while she was secretary of State. He also accused Hillary Clinton of being a “pathological liar.”

The Clintons, that’s a crime family. It’s like organized crime, basically. The Clinton Foundation is a cesspool.” Kallstrom added that “It’s just outrageous how Hillary Clinton sold her office for money. And she’s a pathological liar, and she’s always been a liar. And God forbid if we put someone like that in the White House.”

Going off on a tear, Kallstrom also blasted Attorney General Loretta Lynch, claiming that she impeded the investigation into Clinton’s private server.

“The problem here is this investigation was never a real investigation,” he said. “That’s the problem. They never had a grand jury empanelled, and the reason they never had a grand jury empanelled, I’m sure, is Loretta Lynch would not go along with that.”

The ex-FBI official, who praised Donald Trump as a “good human being” and “patriot,” also went after his former employer. “This investigation was never a real investigation,” he said.

“They never had grand jury empaneled. And the reason … was that Loretta Lynch would not go along with that. So this investigation was without the ability to serve subpoenas, serve search warrants, and obtain the evidence that they ended up begging for. It was just ludicrous what went on,” he added.

Kallstrom said that the FBI “left so much stuff on the table,” but he defended the agents on the case. “This is not the FBI agents who’s to blame for this fiasco going on. This is the leadership. This is Jim Comey … The agents are furious with what’s going on. I know that for a fact,” he said.

* * *

Kallstrom’s bashing of the Clinton’s followed another interview he gave last night with Judge Jeanine PIrro to discuss the latest announced FBI investigation of Hillary Clinton, in which he said “I think there’s something happening. People are asking me what is this about. I think something big is going to happen. I don’t know what it is. It’s just my gut feeling. I think so.

Judge Jeanine: So he wouldn’t have come out unless he knew it was coming out?

James Kallstrom: Well, I think he couldn’t hold onto it any longer. OK. Because who knows? Maybe the locals would have stepped in on this.

Judge Jeanine: …I think he had to do it.

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“It’s As If The Whole City Fell Down” – Buildings Collapse After Strongest Quake In 35 Years Hits Italy

On Wednesday, when we reported on the latest set of powerful, shallow quakes to strike central Italy, which themselves were aftershocks of the deadly August 24 earthquake which killed 300 people and injured many more, we quoted Salvatore Mazza, the National Institute of Geophysics and Volcanology who said that “The earthquake today has further disrupted the tectonic plates, and in the coming hours we may see aftershocks of today’s earthquake on top of those from August 24”, and concluded that it is likely that more quakes are coming.

We didn’t have long to wait, and overnight central Italy was hit by another powerful earthquake Sunday, toppling buildings that had recently withstood other major quakes and sending panicked residents back into the streets, but luckily causing no immediate loss of life. That there were no reports of deaths was largely due to the fact that thousands of residents left their homes after two strong jolts last week shook the same mountainous area.

As AP reports, the quake with a preliminary magnitude of 6.6 was the strongest to strike the country in nearly 36 years. 

Some 20 people were injured, many lightly, authorities said.

The Apennine Mountain region of central Italy, located along a major fault line, has been the site of dozens of significant earthquakes, including an Aug. 24 quake with a 6.1 magnitude that killed nearly 300 people.  Back-to-back jolts on Wednesday left thousands more people homeless, but the only death reported resulted from a heart attack.

Closest to the epicenter was the ancient city of Norcia, the birthplace of St. Benedict, the father of monasticism and famed for its Benedictine monastery. Witnesses said the 14th Century St. Benedict cathedral collapsed in the quake, with only the facade still standing.

It’s as if the whole city fell down,” Norcia city assessor Giuseppina Perla told the ANSA news agency. The city’s ancient walls suffered damage, as did another famous Norcia church, St. Mary Argentea, known for its 15th century frescoes.

“It is since 1980 that we have had to deal with an earthquake of this magnitude,” Fabrizio Curcio, the head of Italy’s Civil Protection agency, said. Curcio was referring to a 6.9 magnitude quake in a different region that includes Naples that killed some 3,000 people and caused extensive damage in November 1980.

Residents already rattled by a constant trembling of the earth rushed into piazzas and streets after being roused from bed by Sunday’s 7:40 a.m. quake. It was felt as far north as Salzburg, Austria and all the way down the Italian peninsula to the Puglia region, the heel of the boot.

Curcio said authorities were responding with helicopters to help the injured and monitor collapses, as many roads were blocked by landslides. Some 3,600 people had already been relocated, many to the coast, following last week’s quake, and Curcio said more would follow.

Television images showed nuns rushing into the main piazza of Norcia as the bell tower appeared on the verge of collapse. Later, nuns and priests knelt in prayer in the main piazza, and a firefighter appealed to a priest to help keep residents calm in an effort to prevent them from looking for loved ones.

Cited by AP, the town’s deputy mayor, Pierluigi Altavilla, said his house remained standing, but everything inside had been toppled. “It seemed like a bomb exploded inside the house,” he told Sky TG24.The quake comes during a long holiday weekend in Italy going into Tuesday’s All Saint’s Day, when Catholics honor the dead. The head of the church in Umbria, Cardinal Gualtiero Bassetti, urged priests not to hold Masses during the period inside churches, for fear of further collapses, but in open spaces, ANSA reported.

Adding drama to the event, mayors in some towns, including Castelsantangelo sul Nera, said coffins had been pushed out of their resting place inside the walls of cemeteries, which in Italy are typically walled structures into which coffins are laid.

“The scene is indescribable,” Mayor Mauro Falcucci told ANSA.

The quake struck a cluster of mountain towns, many of historic significance, already reeling from last week’s pair of aftershocks to last August’s deadly quake, including Norcia, Visso, Castelsantangelo sul Nero and Preci.

Some towns and smaller settlements were left isolated by landslides that blocked the roads, and the civil protection authority was responding with helicopters to help the injured, while also monitoring damage. A civil protection official in the Marche region, Cesare Spuri, said they were trying to determine if people were trapped under downed debris. New collapses also were reported throughout the region, including in Tolentino, where the news agency ANSA said three people were extracted from the rubble.

The hilltop town of Camerino, some 60 kilometers from Ancona, suffered new building collapses but no reports of injuries. City spokesman Emmanuele Pironi said the main fire hall had been rendered uninhabitable and that they had transferred to a warehouse. “An hour and a half after the quake, we can be reassured,” Pironi told The Associated Press.

* * *

The mayor of quake-hit Ussita said a huge cloud of smoke erupted from the crumbled buildings. “It’s a disaster, a disaster!” Mayor Marco Rinaldi told ANSA. “I was sleeping in the car and I saw hell.”

The dramatic statements continued: in Arquata del Tronto, which had been devastated by the Aug. 24 earthquake that killed nearly 300 people, Arquata Mayor Aleandro Petrucci said, “There are no towns left.”

“Everything came down,” he said.

The quake sent boulders raining onto state highways and smaller roads, forcing closures throughout the quake zone that was impeding access to hard-hit cities such as Norcia. Traffic was being diverted to other roads. The Salaria highway, one of the main highways in the region, was closed at certain points as it was after Wednesday’s quakes.

In addition, Italy’s rail line said some local lines in Umbria and Le Marche were closed as a precaution. The quake forced the temporary closure of some of Rome’s most important tourist sites, including the presidential palace, so authorities could check for damage.

The St. Paul Outside the Walls basilica was closed for several hours after some plaster fell, but was later reopened. Vatican firefighters conducted checks at St. Peter’s Basilica and the Vatican’s other basilicas but found no damage.

The crowds in St. Peter’s Square interrupted Pope Francis with applause when he mentioned the quake during his weekly Sunday blessing.

“I’m praying for the injured and the families who have suffered the most damage, as well as for rescue and first aid workers,” he said.

The European-Mediterranean Seismological Center put the magnitude of Sunday’s earthquake at 6.6 or 6.5 with an epicenter 132 kilometers northeast of Rome and 67 kilometers east of Perugia, near the epicenter of last week’s temblors. The U.S. Geological Survey put the magnitude at 6.6. To date, Italy’s deadliest quake in recent history remains the 1908 Messina quake that destroyed the Sicilian city and killed tens of thousands of people.

The worst news for central Italian residents is that the worst is likely not over yet: aftershocks with magnitudes of up to 4.5 still reportedly rock the region.

Italy’s National Commission for the Forecast and Prevention of Major Risks (CGR) cautioned Friday that more powerful earthquakes could hit the region in the nearest future, identifying at least three areas at risk for further seismic activity.

“There is no current evidence that the (seismic) sequence underway is coming to an end,” the commission warned.

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Podesta Part 23: Wikileaks Releases Another 700 Emails; Total Is Now 36,891

In the aftermath of one of the most memorable (c)october shocks in presidential campaign history, and down the final stretch in the presidential race which has just over one week left, Wikileaks continues its ongoing broadside attack against the Clinton campaign with the relentless Podesta dump, by unveiling another 701 emails in the latest, Part 23 of its Podesta release, bringing the total emails released so far to exactly 36,891.

In the latest, Saturday set of emails, Neera Tanden comments revealed that according to her, “Sometimes HRC/WJC have the worst judgement” in involving the Bonner Group which has been accused of money laundering; another email hinted that Turkey president Erdogan was donating to Democratic candidates “including Hillary” to buy political favors, while Chelease Clinton continued to express her reservations about Teneo.

As usual we are parsing through the latest release and will bring readers the more notable emails.

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More QE? Rate Hikes? Opposites Attract?

money-tree

The entire financial world is holding its breath to see what the Federal Reserve decides to do at its next meeting in December. After having postponed a rate hike several times, it’s now increasingly likely a decision to increase the benchmark interest rates has been reached. At least, that’s what the market is currently taking into consideration based on the data of the Fed Funds Futures:

fed-funds-rate-qe

Source: CME Group

As you can see, the odds are clearly in favor of a rate hike, as there’s a chance of less than 26% the Fed won’t do anything, whilst a minority expects a two-step hike (which doesn’t seem very likely to us).

But the world is much bigger than just the United States and even though the financial press is all over the rate hike (as they have been in the past 12 months or so), other countries are taking other measures. The Bank of England has started a new Quantitative Easing program, whilst the ECB is expected to continue its asset purchases beyond its self-proclaimed March 2017 target. These things aren’t a surprise, but it’s really interesting to see that the only place where inflation seemed to have been picked up is the United Kingdom.

uk-inflation

Source: Danske Bank

The slightly higher inflation numbers caused a small sell-off on the bond markets as traders are repositioning itself for a (slightly and temporary?) higher interest rate which will reduce the fair value of bonds based on the mark-up to the benchmark rates. That’s an interesting fact but definitely not alarming yet considering several short-term yields are still negative and even companies with a riskier business profile are still able to borrow cash at dirt-cheap levels. Even countries with a huge balance deficit like Saudi Arabia have been able to raise billions, and despite the fact the entire economy is oil-driven, the yield on a 30 year Saudi Arabia bond was just 4.5%, just 1.25% higher than a 10-year bond…

The world is still flooded with cash, but outside of the main financial markets, Sweden thinks it needs to do more to keep its economy going. The Riksbank, the Swedish version of the Federal Reserve, has cut its inflation forecast whilst keeping its employment expectations and growth forecast stable. To ensure a stable financial system, the Riksbank has now decided to reduce the repo rate path by quite a substantial difference.

repo-rate-riksbank

Source: Danske Bank

So all western countries are expanding their monetary asset base, but surprisingly, Russia hasn’t cut its interest further from the 10% where it’s currently at. That’s surprising because one would think the Russian economy is improving on the back of the increasing oil price which strengthens the Ruble and allows more dollars to flow into Russia as the country exports several million barrels of crude oil per day.

The Russian Central Bank has set a target to keep the inflation rate below 4%, and is still aiming to reach that specific interest rate by the end of next year after seeing the core price inflation peak at almost 20% in the middle of the oil crisis.

russia-inflation-rate

Source: tradingeconomics.com

Long story short, there are so many mixed signals in the world, and the financial system as we know it is shaking to its foundations.

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“We Risk Being Collateral Damage In The Neocon Lust For War”

Submitted by Chris Martenson via PeakProsperity.com,

The winds of change are now swirling so rapidly that it's hard to make sense of what’s happening. And adding to the confusion is an all-out effort by the establishment to convince the masses that, despite the multiplying signs of instability, "everything is fine".

The deceptions surrounding us are now constant and impossible to avoid. How much longer will it take until a critical mass of the populace starts to see through the delusion?

The stock and bond markets are rigged by central banks and their allies to go ever higher, enriching an elite few at the expense of everyone else. The mainstream media over-reports the inconsequential, and under-reports the most important things.  It’s truly astonishing what is not being reported on, presumably in an effort to minimize attention on some really important matters (Yemen, Russia’s increasing concerns over western actions, Wikileaks on HRC, etc).

If it all weren’t so serious, it would be humorous because the chicanery is now so over-the-top obvious. 

The elites often commit crimes without any consequences.  It's so bad, we've seen the architects of wars based on lies get promoted to positions of greater power, now telling new lies on an even grander scale. (In DC, the polite term du jour is “fabrications”. But we’re all friends here, so let's use proper language: lies are lies.)

Meanwhile, whistleblowers end up facing the full weight of the law. And the little people face harsh, draconian consequences for even the most minor of infractions.

As James Howard Kunstler succinctly puts it: Racketeering is ruining us.

If you can make a lot of money doing it, in the US that’s A-OK with the powers that be. Who cares about the collateral damage, as long as Uncle Sam and his cronies get their cut?

The Winds Of Change

But this all is going to come crashing down, because it has to. Not because of a sudden case of enlightenment by the elites, but because of math.

Simple math, too. 

While there are lots of sub-equations we could parse through, the parent of them all is this one: Endless exponential growth on a finite planet is impossible.

It’s really that simple. And what’s transpiring now is nothing more complicated than what happens when a culture’s main growth narrative no longer matches the limits of its reality.

Unfortunately, it’s possible to fool people for just long enough into thinking it’s a workable plan. Give something a couple of decades in the sun (cheap, plentiful petroleum, for example) and entire institutions, political and monetary systems and dogmas will be fashioned around it. 

This kind of self-delusion is not new for humans. It's no different than if an ancient tribe was luckily blessed with 40 years of dependable rains which they attributed to a specific set of rituals.  It’s not too long before correlation becomes confused with causation. And when the expected rains start ceasing to arrive, the rituals get more convoluted and increasingly desperate measures are called for to appease the angry gods.

Eventually, finally, people slowly wake up to the fact that their rituals and the weather never had anything to do with each other. But by then, society has usually torn itself apart, unable to align the contradictions. 

This is what’s happening now. The narrative we live by is breaking down, and increasingly, our desperate ruling elites simply don’t know what to do.  People are confused and so they want to either return to the past “Make America Great Again!”) or they want to cling to the present (“Stronger Together"…as in don’t rock the boat, preserve the status quo!).

Neither will work of course because the rains have ceased for reasons that have nothing to do with America's elaborate but quirky rituals (the current presidential race being a prime example of such).

And this is why, despite the fact that our true challenges are rooted in the mathematics of resource depletion, our undoing will come when the social fabric tears apart.

Which is why the current unrest escalating all over the globe is so important to track. As we watch less-resourced societies begin to fail in advance, we better understand the nature of the reckoning heading our way.

Among the many conflicts that are boiling over, the one that concerns me the most — by far — is the West's very intentional efforts to demonize Putin specifically, and Russia generally.

The tactics being used are no different from those used to disparage Saddam and his regime right before the invasion of Iraq.  We’ve been down this path before; the playbook is literally exactly the same.

Blatantly obvious propaganda is being used, most heavily by the very same (and unrepentant) main stream media outlets that were used the last time around — when we ended up commencing a 'pre-emptive' war based on ginned-up intelligence that turned out to be wholly false. We owe it to ourselves not be so easily led this time around.

The Winds Of War

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

H. L. Mencken

Now, I'm sensitive to the idea put forth by some that this whole Putin demonization is merely the latest use of a hobgoblin intended to help get HRC elected president.

Obviously if this is true, it goes well beyond HRC herself. In the military industrial complex, there's a vast host of self-interested parties who feast on war and whose paychecks and future prospects depend heavily on it. There even are a few demented souls in the halls of power who believe in war as the best way to project one’s influence. Stew them together and you have a pretty good handle on what DC is all about these days.

So I'm sympathetic to the temptation to think: “Hey, it’s always a safe bet during an election year to try and appear tougher than your opponent…this is all just election year politicking and it will pass and fade after November 8th.”

Here’s why I don’t think that’s accurate. In fact, I think something deeper and more sinister has been set in motion. 

The blackballing of Putin and Russia started years ago, in 2013, when Putin managed to convince then-president of Ukraine Yanukovych to back out of the agreement intended to bring Ukraine into the EU fold as the final NATO brick in the wall.

That set-back enraged the neocons in Washington DC mightily and they’ve been rapidly anti-Putin ever since.  This neocon grudge has found help and support ever since from the UK, US, and EU press which were also willing partners in selling the fraudulent “evidence” that led to the Iraq war — and Libya, too, and now Yemen and Syria.

As examples, these cartoonish magazine covers (both from 2014) look like they were designed by Intro to Psychology 101 students asked to create a propaganda hit piece:

Heck, there's even potential evidence as far back as 2008: as exemplified by this TIME magazine cover where the "TIME" banner was placed behind Putin’s head in such a way that the peaks of the M gave him "horns".  (For fun, see how many example of other leaders you can find where TIME did this — there are precious few. The logo is almost always in front):

So the demonization began a long time ago, well before it’s reasonable to suspect HRCs advance team could start scheming about how to use an anti-Putin stance against Trump, or any other opponent. 

But the media has continued to beat the Putin=bad drums, and with increasingly volume. Here are a few more recent examples:

The message: Putin is manipulating us, and anybody who falls for it is a sucker. And if you dare to question the integrity of the US elections, which there is ample evidence that it is vulnerable to fraud & manipulation (listen to our podcast with election integrity analyst Brad Friedman), you are Putin’s patsy.

And here’s my favorite propaganda piece to date because it’s so blatantly over-the-top that it takes on a very special quality of being so bad it’s good. This is The Rocky Horror Picture Show of magazine cover art:

Okay, with all that said, we’ve established that “someone” has had it out for Putin for quite a long time.  We might surmise who or what agencies that might be, but such speculation is best reserved for those with greater insights than I happen to have.

I just know propaganda when I see it. And I see it in the examples above, and in the media pervasively today. So where does this lead us?

Well, given the fact that Russia has just undertaken the largest nuclear readiness drill in its history involving its citizens, maybe we should think that Putin and Russia are no longer amused by all this antagonism and are taking it as something more sinister than simple politicking.

Or we should pay attention that Russia recently announced the arrival of its latest nuclear ICBM (nicknamed Satan-2) capable of delivering 15 warheads each. 

And let’s not forget the even more recent announcement that a hypersonic glider warhead had been successfully tested, against which our military currently has no defense.

None of those Russian moves are being made in a vacuum of course. They've come only after many repeated provocations by the West, including assembling the largest gathering of military brigade forces on Russia’s borders since WW II. These are the kind of threats, mind you,  that would have caused the US to go into an absolute snit long ago were the situation reversed.

The real question is: Why?  What’s the plan here, if any exists?  Who’s behind all this and why? If we can answer any of these, then perhaps we can assess the risks regular people like us and our loved ones may be facing as potential "collateral damage" of this warmongering.

The So-Called Elites

The “who” has emerged in this election, at least partially. We now have a few names to put to the program, and they're familiar ones.

This is, generally speaking, the same cast of characters that has been agitating for a more belligerent global stance prior to 9/11.  Many of these names surfaced on my radar when the Project for a New American Century statement of principles was published in 1997. That document is pretty much all you need to read to understand the last 20 years of US foreign policy.

I mean, if you only had just one document to read on the topic, this one would pretty well sum it all up. 

Well, here they all come again. This time right on the front page of the Washington Post, making renewed calls for an even more aggressive and bellicose US military posture. For anybody concerned about conflict with Russia, this is more terrifying than any haunted house you could possibly visit this Halloween:

Washington’s foreign policy elite breaks with Obama over Syrian bloodshed

Oct 20, 2016

 

There is one corner of Washington where Donald Trump’s scorched-earth presidential campaign is treated as a mere distraction and where bipartisanship reigns. In the rarefied world of the Washington foreign policy establishment, President Obama’s departure from the White House — and the possible return of a more conventional and hawkish Hillary Clinton — is being met with quiet relief.

 

The Republicans and Democrats who make up the foreign policy elite are laying the groundwork for a more assertive American foreign policy, via a flurry of reports shaped by officials who are likely to play senior roles in a potential Clinton White House.

It is not unusual for Washington’s establishment to launch major studies in the final months of an administration to correct the perceived mistakes of a president or influence his successor. But the bipartisan nature of the recent recommendations, coming at a time when the country has never been more polarized, reflects a remarkable consensus among the foreign policy elite.

 

This consensus is driven by a broad-based backlash against a president who has repeatedly stressed the dangers of overreach and the need for restraint, especially in the Middle East. “There’s a widespread perception that not being active enough or recognizing the limits of American power has costs,” said Philip Gordon, a senior foreign policy adviser to Obama until 2015. “So the normal swing is to be more interventionist.”

 

“The American-led international order that has been prevalent since World War II is now under threat,” said Martin Indyk, who oversees a team of top former officials from the administrations of Obama, George W. Bush and Bill Clinton assembled by the Brookings Institution. “The question is how to restore and renovate it.” The Brookings report — a year in the making — is due out in December.

 

Taken together, the studies and reports call for more-aggressive American action to constrain Iran, rein in the chaos in the Middle East and check Russia in Europe.

 

The studies, which reflect Clinton’s stated views, break most forcefully with Obama on Syria. Virtually all these efforts, including a report released Wednesday by the liberal Center for American Progress, call for stepped-up military action to deter President Bashar al-Assad’s regime and Russian forces in ­Syria.

 

“You can’t pretend you can go to war against Assad and not go to war against the Russians,” said a senior administration official who is involved in Middle East policy and was granted anonymity to discuss internal White House deliberations.

(Source)

There’s a lot to unpack in there. Let’s get started.

The article begins with the disquieting assertion that the presumptive return of a more hawkish Hillary Clinton to the white house is “being met with quiet relief.” You mean the longest stretch of active war in US history hasn't been enough for some of these folks? 

I talk with a lot of people in the military who are sick and tired of America's endless wars and their endless rotations with no end in sight and no clear mission.  Nobody can articulate what the US is doing in Afghanistan any more (and noting the enormous increase in heroin production is considered impolite).

Next, the article is loaded with “normalizing” words, such as ‘consensus,’ ‘broad-based’ and ‘bipartisan’ to make it seem that a more hawkish stance is really getting back to something we can all agree on. It’s centrist, bipartisan and broad-based after all.

It’s also insane when you combine it with the later part about how these folks want to undo the restraint of Obama and go after Syrian and Russian forces directly.

I’ve said it before and I’ll say it again: Getting into a shooting war with Russia would be a terrible idea. Insane really.

Not least of which is because, even if things don’t go nuclear (which they very well could given where we are in the shredding of the past narratives), then the US will discover that projecting its power all over the world is a heck of a lot harder when your navy is being sunk by the latest next-generation anti-ship missile technology.

Trust me, the petrodollar will get a lot weaker in a skinny minute as soon as American military power is revealed as stoppable.

I have a lot of faith in the training and equipment of the US military. But I also have faith in the power of a swarm of anti-ship hypersonic missiles to do a lot of damage.

The US Presidential Election

I'm on record as saying that I very much distrust the close relationship HRC has with the neocons and her hawkish foreign policy stance. Also, I do trust her readiness and willingness to get the US into more wars.

In the second presidential debate, she came right and said that she supports a no-fly zone over Syria. Quoting a US military general, I've since explained that doing so would meet the definition of an open act of war against Russia.

While there are a lot of issues on the table this election, I'm very much a single-issue voter when it comes to getting into a war with Russia. I want no part of it. I can't imagine any sane American would. 

At best, it would be a wildly destructive waste of time, life and money. At worst it ends with an EMP (if we're lucky) or nuclear disaster (if we're not).  Instead, we in the West should be confronting our massive overhang of debt, our looming energy predicament, and a host of ecological train wrecks right now — not stuck in the fantasy that global warfare is somehow glorious or 'winnable'.

After the next war, there won’t be any bountiful period of economically-simulative rebuilding that some have wistfully longed for. That takes energy. And in case anybody missed it, the 'high net energy' conventional oil slipped into the rearview mirror almost ten years ago now. There won’t be any super-duper rebuilding after the next big war. Just a massive struggle to get us back to even.

So hey, let’s not do that. OK?

Back to the main point here. The HRC campaign has several very close ties with the neocons who were instrumental in selling the Iraq war. None quite as prominent as Michael Morell:

Clinton Adviser Proposes Attacking Iran to Aid the Saudis in Yemen

Oct 26, 2016

 

Michael Morell is a former acting director of the CIA and a national security adviser to Hillary Clinton — one who is widely expected to occupy a senior post in her administration.

 

He is also an opponent of the Iran nuclear agreement, a defender of waterboarding, and an advocate for making Russia “pay a price” in Syria by covertly killing Putin’s soldiers.

 

On Tuesday, Morell added another title to that résumé: proponent of going to war with Iran, for the sake of securing Saudi Arabia’s influence in Yemen.

 

“Ships leave Iran on a regular basis carrying arms to the Houthis in Yemen,” Morell said, in remarks to the Center for American Progress, the liberal think tank founded by Clinton campaign chairman John Podesta. “I would have no problem from a policy perspective of having the U.S. Navy boarding their ships, and if there are weapons on them, to turn those ships around.”

 

Morell did note, per Bloomberg’s Eli Lake, that this policy “raised questions of international maritime law.”

 

Which is a bit like saying, “Breaking into someone’s home, putting a gun in their face, and demanding they hand over all their weapons raises questions about armed-robbery law.”

(Source)

To me this is not an individual interested in a little Putin-bashing for the sake of votes. This is a guy who's deadly serious about using US power to get into a conflict not just with Russia, but with Iran as well.

Either of these adversaries could lead us into an armed confrontation that could escalate in ways we’d very seriously regret.

Even ‘just’ the shutting of the Strait of Hormuz would be a huge and mortal blow to a world economy saddled with low growth and enormous piles of debt.  Iran could accomplish this easily using the mobile, land based missile launchers they currently have in stock.

Sink a couple of Very Large Crude Carriers (VLCCs) and it’s a whole new ball game for world trade. 

In case you don’t take Mr. Morell all that seriously, I should remind you that he was the person who personally vetted and scrubbed the presentation that Colin Powell gave to the UN on Iraq’s weapons of mass destruction that led to the final war resolution.

Clearly telling a few, uh, "fabrications" is well within his talent center if/when needed to get the job done.  He’s deadly serious about entering a conflict with Russia and Iran and he has Hillary’s ear.  Hopefully other more moderate people do as well, but my concern still lies with the fact that some people will hear equal arguments but then make the decision based on how they lean.

Hillary leans hawkish. That’s just a matter of record at this point. As even liberal-leaning Chris Matthews of Hardball said recently, “People don’t change because we swear them into the White House.”

Nope. The best rule of relationships I have is: You'll be disappointed if you are expecting (requiring, or hoping for) them to be different  tomorrow than they are today.

Conclusion

While I've focused on the election in this article, it may not even be relevant at all.  That is, there may well be a machine running in the background that is larger than any potential candidate or President. It may well be that the careful preparation of propaganda groundwork against Putin that began in 2008 is part of a large plan the public is being intentionally kept in the dark about. Who knows?

But learning how Obama has frustrated the aspirations of the neocons vis-a-vis Syria and Russia tells me that the office of the president does matter, at least to a point. 

I was personally horrified by what the US has brought to bear on Iraq, Libya, Syria and Afghanistan.  All in the service of Deep State objectives that are anything but obvious. 

My growing concern here is that the juggernaut that leads to war has already been untethered and is building up steam. I see it in the propaganda pieces against Russia on an almost daily basis. And I see Russia doing everything it can to both try and get the West to calm down and be reasonable, while getting its own citizens ready in case those efforts fail.

NATO is ramping up the pressure. Western media is faithfully (again) running necon talking points as if they were pearls of wisdom. We are heading back to the future.

Recently, for the very first time in my entire life, I have begun undertaking actual personal preparations for nuclear war. 

I absolutely deplore that I feel this is necessary. But a core tenet we live by here at PeakProsperity.com is that when anxiety builds, you need to align your actions with your beliefs. Right now, my beliefs are loudly telling me that the risk of a serious conflict with Russia breaking out are no longer dismissable.

Similarly, I've committed to readers that when something concerns me enough to take action in my own personal life, I'll share it.

In Part 2: My Personal Preparations For Nuclear War, I share the steps I've taken this week as well as additional precautions folks concerned about this topic should consider.

Look, it's crazy were even talking about this. But as this article has shown, there's ample evidence that the pressure between the West and Russia is building. Given the outsized risks involved, making an investment in safety is only prudent. After all: nuclear way is one of those potential scenarios where its far better to be early or overenthusiastic in your precautions, than a day late.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

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Social Media Blackout? FBI Emails Are Not ‘Trending’ On Twitter, Facebook, Buzzfeed, Or Snapchat

They are not known as 'weapons of mass distraction' for nothing…

 

In the 24 hours since FBI Director Comey dropped perhaps the biggest bombshell of the entire Presidential campaign, sending Democrats (and media) scrambling headless-chicken-like for answers (and blame-scaping), does anyone else find it odd that 'FBI Emails' does not appear to be a hot topic, trending, big deal on any social media?

Snapchat…"Hot"

h/t @CharlieKrik11

 

Facebook… "Trending"

h/t @MichaelDuncan

 

Twitter…"Top Moments"

h/t @kierobar

 

Buzzfeed… "Trending Now"

*  *  *

As Liberty Blitzkrieg's Mike Krieger recently asked (and answered), why are these things happening in the first place?

Apple claims not to endorse candidates, but their actions suggest otherwise, and some of their executives – including CEO Tim Cook – actively support Clinton’s campaign. Buzzfeed recently obtained an invitation to a private $50,000-per-plate fundraiser Cook is hosting for Clinton with his Apple colleague, Lisa Jackson, at the end of this month.

 

Apple isn’t the only corporation doing Clinton’s bidding. Wikileaks founder Julian Assange said Clinton made a deal with Google and that the tech giant is “directly engaged” in her campaign. It’s been widely reported Clinton hired Eric Schmidt—chairman of Alphabet, the parent company of Google—to set up a tech company called The Groundwork. Assange claims this was to ensure Clinton had the “engineering talent to win the election.” He also pointed out that many members of Clinton’s staff have worked for Google, and some of her former employees now work at Google.

Of course, I covered Groundwork earlier this year. See: Meet “Groundwork” – Google Chairman Eric Schmidt’s Stealth Startup Working to Make Hillary Clinton President

Twitter is another culprit. The company has gotten a lot of slack for banning conservatives and Trump supporters such as Breitbart’s Milo Yiannopoulos and, most recently, rapper Azealia Banks after she came out in support of Trump. Twitter has provided vague answers as to why conservative voices have been banned while they’ve allowed other users to call for the killing of cops.

 

Just yesterday, Buzzfeed revealed that the social media giant’s top executive personally protected the President from seeing critical messages last year. “In 2015, then-Twitter CEO Dick Costolo secretly ordered employees to filter out abusive and hateful replies to President Barack Obama.”

 

The founders of some of the most popular pro-Trump Twitter handles – including @USAforTrump2016 and @WeNeedTrump—insist Twitter is censoring their content. They’ve pointed out that Twitter changes trending hashtags associated with negative tweets about Clinton (which has been reported before). On August 4, shortly after the hashtag “HillaryAccomplishment” began trending, it was taken over by anti-Clinton users, who used it to mention Benghazi or Emailgate. Eric Spracklen, @USAforTrump2016 founder, noticed the hashtag was quickly changed—pluralized to #HillarysAccomplishments.

Many people have pointed out the exact shenanigans described above for other Clinton-related hashtags. In fact, it’s been my self-described progressive friends who have been most up in arms about it.

“They take away the hashtag that has negative tweets for Clinton and replace it with something that doesn’t so the average person doesn’t see what was really trending,” Spracklen said. “This happens every day.”

 

This new strand, where one cannot even search for alternative viewpoints amid technology companies who stand to benefit from the free-trade policies and eased immigration regulations of a Clinton presidence, represents a dangerous sea change. There’s absolutely no question the digital forums we use every day are censoring conservatives and favoring Clinton. You can’t simply scroll through photos on Instagram, look for a video game in the App Store or do a quick Google search without being fed anti-Trump and pro-Clinton propaganda.

Personally, I’ve definitely noticed a big-time pro-Clinton bias in my Twitter stream on a daily basis, and I don’t follow people/organizations that would define themselves as overtly pro-Clinton. That’s my honest perception, and I don’t have a dog in this fight.

* * *

"Squirrel!"

 

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HBO Officially Killed The Cable Bundle And ESPN Looks To Be The Biggest Victim

Last April, HBO effectively marked the death of the cable TV bundle when they decided to launch “HBO Now” and sell their content directly to consumers for $15 per month.  While other “over-the-top” providers have existed for years, this decision was pivotal because it was the first time that any major content provider decided to break with the traditional cable delivery model and go direct to consumer.  Within a year, HBO Now had amassed 1 million subscribers.  Meanwhile, Pay TV households collapsed around the same time as “cord cutting” accelerated.

Per the following data from Barclays’ Media and Telecom analyst, Kannan Venkateshwar, the decline of Pay TV households really accelerated in 2Q 15 around the same time that HBO Now was launched. 

Cable TV

 

Meanwhile, the number of broadband-only households also surged.

Cable TV

 

Now, the biggest beneficiary of the cable TV bundle, ESPN, which exploited it’s “must have” content for decades to negotiate ever higher rates with cable TV providers while forcing those rates down the throats of consumers by insisting its content be included in all of the channel “bundles”, finds itself in the unfamiliar territory of losing millions of subs per year amid surging contents costs.  In fact, according to Outkick The Coverage, ESPN lost over 600,000 subscribers in October alone which is worth over $50mm in annual revenue.

Yesterday Nielsen announced its subscriber numbers for November 2016 and those numbers were the worst in the history of ESPN’s existence as a cable company — the worldwide leader in sports lost 621,000 cable subscribers. That’s the most subscribers ESPN has ever lost in a month according to Nielsen estimates and it represents a terrifying and troubling trend for the company, an acceleration of subscriber loss that represents a doubling of the average losses over the past couple of years, when ESPN has been losing in the neighborhood of 300,000 subscribers a month.

 

These 621,000 lost subscribers in the past month alone lead to a drop in revenue of over $52 million and continue the alarming subscriber decline at ESPN. Couple these subscriber declines with a 24% drop in Monday Night Football ratings this fall, the crown jewel of ESPN programming, and it’s fair to call October of 2016 the worst month in ESPN’s history. But this isn’t just a story about ESPN, the rapid decline in cable subscribers is hitting every channel, sports and otherwise. It just impacts ESPN the most because ESPN costs every cable and satellite subscriber roughly $7 a month, over triple the next most expensive cable channel.

The historical cable TV game goes a little something like this…in any given market there is typically 3-4 subscription TV providers (2 satellite companies, 1 (or more) cable providers and a Telco).  Those providers sign multi-year deals to buy content from media companies (e.g. ESPN, Discovery, Time Warner, Viacom, etc. etc) and then bundle them all together and pass the costs of those contracts along to consumers. Every 3-5 years those content contracts come up for renewal and the cable providers (i.e. consumers, since the costs just get passed along) are effectively forced to pay whatever increase ESPN (and others) asks for or risk losing millions of subscribers. 

Now, there are roughly 100mm pay TV households in the U.S. and, because of the channel “bundling” scam, approximately 90% of them are forced to “buy” ESPN whether they consume sports content or not.  Moreover, because ESPN is considered “must have” content they’re able to extract the most value from the cable providers getting roughly $7 per sub per month, or more than double the next highest content provider…tack on a little extra margin for the cable provider and the average consumer is paying $120 per year for ESPN even if they never watch a single minute of sports programming…seems fair, right? 

Fortunately for consumers, and not so much for ESPN, the power in the system, courtesy of “over-the-top” content providers like HBO and Netflix, is just starting to shift from the media companies to consumers…which will be disastrous for the historical beneficiaries of the cable bundle.  Outkick The Coverage laid out the math on what pay TV sub losses means for ESPN:

A loss of 3 million subscribers would leave ESPN with 86 million subscribers in 2017. That would be down roughly 15 million subscribers in the past five years alone. Given that ESPN makes right at $7 a month from every cable and satellite subscriber a year, that means ESPN’s subscriber revenue would be $7.22 billion in 2017. Toss in an additional $1.8 billion or so in advertising revenue and ESPN’s total revenue would be $9 billion. We don’t know what the costs of running ESPN are — employees, facilities, equipment, and the like have to cost a billion or more — but it’s fair to say that ESPN is probably still making money in 2017. Just nowhere near what they used to make.

 

But those sports rights costs are going up and those subscriber revenue numbers are going down.

 

So if we’re very conservative and project that ESPN continues to lose 3 million subscribers a year — well below the rate that they are currently losing subscribers — then the household numbers would look like this over the next five years:

 

2017: 86 million subscribers

 

2018: 83 million subscribers

 

2019: 80 million subscribers

 

2020: 77 million subscribers

 

2021: 74 million subscribers

 

At 74 million subscribers — Outkick’s projection for 2021 based on the past five years of subscriber losses — ESPN would be bringing in just over $6.2 billion a year in yearly subscriber fees at $7 a month. At $8 a month, assuming the subscriber costs per month keeps climbing, that’s $7.1 billion in subscriber revenue. Both of those numbers are less than the yearly rights fees cost.

 

Uh oh.   

But that’s just the short-term incremental impacts.  The real question is how many consumers would actually purchase ESPN if the bundle truly disappeared and consumers were given the option to buy all content a la carte (which we suspect is the inevitable end game)?  If we assume that 45mm households would be willing to purchase ESPN directly, at their current cost of $7 per month, then that would equate to roughly $3.8BN in revenue per year or about half of their $7.5BN in annual content costs…which we suspect is a slight problem for Disney.

But, like it not, a la carte content purchases are the way of the future.  While cable providers used to be incentivized to protect the “channel bundle” the advent of the internet and over-the-top content providers means that their true value offering to consumers is now in their broadband and not the content.  Therefore, it’s not terribly surprising that, as Bloomberg points out, new a la carte, streaming TV services are becoming very popular.

AT&T Inc. set a price of $35 a month for a new online-streaming TV service with 100 channels or more, and the company may experiment with “a la carte” programming, giving customers choice on what channels they pay to watch.

 

DirecTV Now will be priced to compete with two leading online TV providers — Sony’s PlayStation Vue and Dish Network Corp.’s Sling TV. PlayStation Vue starts at $39.99 for 60 channels and runs as high as $54.99 for more than 100 channels. Sling TV begins at $20 for 28 channels and goes as high as $40 for a 48-channel multi-screen package.

 

The competition for cable-like online services is suddenly fierce. YouTube has been working for months on the paid live-TV streaming service, called Unplugged. Hulu LLC, which is co-owned by Fox, Disney, Comcast Corp. and Time Warner, will introduce its own service in the coming months, and Amazon.com Inc. and Apple Inc. have explored the idea.

Of course, ESPN isn’t the only content company that has benefitted from the forced charity of the American consumer.  We suspect the many other cable content providers are also about to face a very turblent transition as well.

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Attorney General Lynch ‘Pleads Fifth’ On Secret Iran ‘Ransom’ Payments

Authored by Adam Kredo, originally published via The Washington Free Beacon,

Attorney General Loretta Lynch is declining to comply with an investigation by leading members of Congress about the Obama administration’s secret efforts to send Iran $1.7 billion in cash earlier this year, prompting accusations that Lynch has “pleaded the Fifth” Amendment to avoid incriminating herself over these payments, according to lawmakers and communications exclusively obtained by the Washington Free Beacon.

Sen. Marco Rubio (R., Fla.) and Rep. Mike Pompeo (R., Kan.) initially presented Lynch in October with a series of questions about how the cash payment to Iran was approved and delivered.

In an Oct. 24 response, Assistant Attorney General Peter Kadzik responded on Lynch’s behalf, refusing to answer the questions and informing the lawmakers that they are barred from publicly disclosing any details about the cash payment, which was bound up in a ransom deal aimed at freeing several American hostages from Iran.

The response from the attorney general’s office is “unacceptable” and provides evidence that Lynch has chosen to “essentially plead the fifth and refuse to respond to inquiries regarding [her] role in providing cash to the world’s foremost state sponsor of terrorism,” Rubio and Pompeo wrote on Friday in a follow-up letter to Lynch, according to a copy obtained by the Free Beacon.

The inquiry launched by the lawmakers is just one of several concurrent ongoing congressional probes aimed at unearthing a full accounting of the administration’s secret negotiations with Iran.

“It is frankly unacceptable that your department refuses to answer straightforward questions from the people’s elected representatives in Congress about an important national security issue,” the lawmakers wrote. “Your staff failed to address any of our questions, and instead provided a copy of public testimony and a lecture about the sensitivity of information associated with this issue.”

 

“As the United States’ chief law enforcement officer, it is outrageous that you would essentially plead the fifth and refuse to respond to inquiries,” they stated. “The actions of your department come at time when Iran continues to hold Americans hostage and unjustly sentence them to prison.”

The lawmakers included a copy of their previous 13 questions and are requesting that Lynch provide answers by Nov. 4.

When asked about Lynch’s efforts to avoid answering questions about the cash payment, Pompeo told the Free Beacon that the Obama administration has blocked Congress at every turn as lawmakers attempt to investigate the payments to Iran.

“Who knew that simple questions regarding Attorney General Lynch’s approval of billions of dollars in payments to Iran could be so controversial that she would refuse to answer them?” Pompeo said. “This has become the Obama administration’s coping mechanism for anything related to the Islamic Republic of Iran – hide information, obfuscate details, and deny answers to Congress and the American people.”

 

“They know this isn’t a sustainable strategy, however, and I trust they will start to take their professional, and moral, obligations seriously,” the lawmaker added.

In the Oct. 24 letter to Rubio and Pompeo, Assistant Attorney General Kadzik warned the lawmakers against disclosing to the public any information about the cash payment.

Details about the deal are unclassified, but are being kept under lock and key in a secure facility on Capitol Hill, the Free Beacon first disclosed. Lawmakers and staffers who have clearance to view the documents are forced to relinquish their cellular devices and are barred from taking any notes about what they see.

“Please note that these documents contain sensitive information that is not appropriate for public release,” Kadzik wrote to the lawmakers. “Disclosure of this information beyond members of the House and Senate and staff who are able to view them could adversely affect the diplomatic relations of the United States, including with key allies, as well as the State Department’s ability to defend [legal] claims against the United States [by Iran] that are still being litigated at the Hague Tribunal.”

 

“The public release of any portion of these documents, or the information contained therein, is not authorized by the transmittal of these documents or by this communication,” Kadzik wrote.

Congressional sources have told the Free Beacon that this is another part of the effort to hide details about these secret negotiations with Iran from the American public.

One senior congressional source familiar with both the secret documents and the inquiry into them told the Free Beacon that the details of the negotiations are so damning that the administration’s best strategy is to ignore lawmakers’ requests for more information.

“Every Obama administration official and department involved in the Iran Deal appear to be running for cover,” the source said. “Like we feared, the [Iran deal] is turning out to be a disaster and Iran is emboldened in its aggression. Evidently Attorney General Lynch and the Department of Justice have decided ‘refusal to cooperate’ is their best strategy. But this is dangerous and ultimately won’t protect them from anything.”

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China’s Blowing Out TED-Spread Has Traders Bracing For A Cash Shortage

This past July, we lamented that as a result of the now implemented money market reform which sent Libor soaring, Wall Street had lost one of its most dependable, forward-looking crisis indicators: the TED-Spread (the difference between LIBOR and 3 month TSYs), something which Bloomberg also figured out last week.

Specifically, we said that “now the regulatory intervention is set to pressure what have traditionally been reliable metrics indicative of funding stress and systemic risk, among them swap spreads, the TED-Spread and the FRA-OIS spread, the market is about to lose the last metric indicative of underlying tensions. After all, with central bank intervention having broken all conventional signalling pathways, including equities, corporate bonds, Treasuries, and VIX, there will no longer be any reliable sources hinting at fundamental risk in the market, certainly for the short-term and perhaps over an indefinite amount of time.”

However, one place where the TED spread – ironically – is still a valid indicator of liquidity concerns, is oddly enough China. And it is in China where traders in the local interest-rate swap market are bracing for a cash shortage as a result of the blowout in the premium for the 1-year swap rate over the 1-year sovereign bond yield to 52 basis points, the widest since July 2015.

As Bloomberg reminds us, this is China’s version of the familiar TED spread, which in the US is (or rather was) a gauge of stress that compares funding costs for banks and the government.

“This is a signal in the market that swap traders are readying for tighter liquidity as the government tries to prevent a property bubble,” said Iris Pang, senior economist for Greater China at Natixis Asia Ltd. in Hong Kong. “Further tightness may be very limited because the PBOC doesn’t want to put financial stress on the market.

The good news: it is still well below the 140 basis points reached during the trust finance crackdown of early 2014. The bad news is that as reported last week, China has just launched a new crackdown, this time on on the infamous Wealth-Managemnt Products, shadow banking conduits which amount to just under $1.9 trillion in products, the immediate result of which has been the recent 10% surge in bitcoin. Which means that should absent another liquidity injections elsewhere, the drought is set to get far worse.

The recent, sharp move in the swap spread is the result of market concerns that the government is seeking to crackdown on the local housing bubble:

The fixed cost to receive the seven-day repurchase rate for a year climbed to an 18-month high on concern the People’s Bank of China will tighten its purse strings after property prices surged 40 percent in Shanghai last month from a year earlier.  The one-year swap rate reached 2.73 percent on Friday in Shanghai, matching the highest level since April 2015, while the seven-day repo rate reached a one-month high on Thursday. The one-year sovereign yield was at 2.19 percent, heading for a third annual decline. 

Making matters worse, China Securities Journal reported on its front page that finance companies need to prepare for “tight days” as monetary policy shifts to focus on deleveraging.

The “good” news from this upcoming liquidity shortage, is that China’s government bond yields, already near all time lows, are set to drop even further, as bond investors – who assume the market’s reaction to a Chinese growth slowdown is similar to that in the US – are preparing to benefit from the slower economic growth that may result. “Any decline in real estate activity is likely to dent growth in the world’s second-largest economy, providing a tailwind for government bonds”, according to ING and DBS.

And while it is all connected, the liquidity shortage, the drop in yields, and the rising swap spreads, the cash squeeze also reflects the flight from a weakening yuan. While China’s SAFE reported that 44.7 billion in yuan payments left the nation last month, up from August’s outflow of $27.7 billion, Goldman’s calculation was nearly double that, or some $78 billion in September outflows. As a result of the return of China’s banking sector bogeyman, which as we reported last week just hit a staggering 200 trillion yuan

… the Chinese currency continued to slide this past week, bringing its drop against the dollar to 4.2% YTD, the most among 11 Asian currencies tracked by Bloomberg.

How should one trade this reacceleration in Chinese capital outflows, Yuan devaluation and overall economic deterioration? One way, as Kyle Bass has done, is to short the Yuan outright, and in size. Another, as we did last September, and as Corriente’s MarK Hart discussed in February, is simply to go long bitcoin – a trade that has returned over 200% in just over a year.

Of course, one doesn’t have to trade it at all: sitting back and watching events unfold may be just as satisfactory.

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The US Navy – Screwing The Taxpayers, And Defense Innovators

Submitted by Duane via Free Market Shooter blog,

ghost-boat

Self-made millionaire Gregory Sancoff has spent a decade and $19 million building a highly unusual stealth boat. Called Ghost, it’s designed to be faster, more stable, and more fuel-efficient than anything currently in the U.S. Navy’s fleet, he says. “It’s such a smooth ride, you can sit there and drink your coffee going through six-foot swells,” he proudly told Bloomberg Businessweek in 2014.

 

But there’s a problem: The Pentagon doesn’t want Sancoff’s boat—and also won’t let him sell it abroad.

Source:  The Feds Won’t Buy this $19 Million Stealth Boat – Or Let It Be Sold Abroad  |  Bloomberg

A little background is necessary here – Gregory Sancoff is a self-made millionaire who spent some of his own fortune building a stealth boat for the U.S. Navy.  The Navy has chosen not to purchase Sancoff’s “Ghost” boat.  That is fine… except, the Navy has deemed the technology too classified to allow him to sell it anywhere else.  How does this make any sense, if he developed the boat all on his own, without any government funding or assistance?

Apparently, this all happened because he patented his invention, and tried to sell it to the Navy.  The Navy was initially interested, but also served him with secrecy orders, and later placed his firm under watch of International Traffic in Arms Regulations (ITAR).  Though you would think he would have some legal recourse here, such action is made extremely difficult, as he is not a large-scale defense firm such as Lockheed, and does not have the same legal resources at his disposal.

The outlook for Juliet isn’t great. Last year, the U.S. patent office issued 95 secrecy orders—one for every 6,628 applications, as Joshua Brustein wrote in June. Most of those inventions were developed by large companies, specifically for the military or other government agencies. But as Brustein points out, the orders “are a different sort of ordeal for private inventors, about a dozen of whom file patent applications that are made secret by government mandate each year.” Inventors who break gag orders can lose their patent rights, or face fines or incarceration. And while some secrecy orders are reversed each year, others date back as far as the 1940s.

If Sancoff’s boat contains such sensitive technology that it cannot be sold abroad, why doesn’t the US Navy just buy his prototype from him?  They won’t need to contract his firm to build a fleet, but they can purchase the technology for use in other DARPA projects. $19 million is but a drop in the bucket of the Navy’s ~$380 billion dollar budget, after all.

Apparently, $19 million is too much to spare for a stealth boat, when you’ve already wasted $23 billion building three stealth destroyers, that have been watered down from their own original plans, and don’t even have close-in air defenses.

160421-N-YE579-005 ATLANTIC OCEAN (April 21, 2016) The future guided-missile destroyer USS Zumwalt (DDG 1000) transits the Atlantic Ocean during acceptance trials April 21, 2016 with the Navy's Board of Inspection and Survey (INSURV). The U.S. Navy accepted delivery of DDG 1000, the future guided-missile destroyer USS Zumwalt (DDG 1000) May 20, 2016. Following a crew certification period and October commissioning ceremony in Baltimore, Zumwalt will transit to its homeport in San Diego for a Post Delivery Availability and Mission Systems Activation. DDG 1000 is the lead ship of the Zumwalt-class destroyers, next-generation, multi-mission surface combatants, tailored for land attack and littoral dominance. (U.S. Navy/Released)

The Zumwalt class stealth destroyer was originally contracted in the 1990’s to eventually replace the Navy’s aging Arleigh Burke class destroyers.  Similar to so many monstrous defense projects, the Zumwalt was plagued with delays, cost overruns, and subsequent cost cutting measures that led to a far less capable destroyer than was originally planned, and the buy was correspondingly cut from 32 copies to just three.  With questionable self-defense capabilities, this destroyer cannot be deployed to any hotspot without external support, as a ship with similar defenses was recently destroyed by very unsophisticated weapons.  Originally expect to run at ~$300 million a copy, the smaller buy and higher costs pushed the cost of the remaining three to about $8 billion apiece.

So, just to clarify – the US Navy can afford to waste $23 billion on a stealth destroyer of questionable efficacy, but can’t afford to spend less than 0.001% of that cost on a stealth boat prototype, even if solely for the sake of using the technology in future designs.  Is it any wonder why even our unpopular Congressional leaders are telling the military to stop buying equipment it doesn’t need?  Perhaps the DoD should be more supportive of innovators who spend their own dime to develop new technologies, instead of screwing them over every step of the way, and instead choosing to continue wasting taxpayer dollars on flawed designs?

The defense procurement process is beyond flawed; it is in need of a complete overhaul.  The Pentagon needs to focus on building out more prototypes, and testing them in the field before committing to buying large numbers of untested designs.  Smaller defense projects with room for expansion will leave the DoD more nimble, and more able to quickly adapt to new challenges posed by differing adversaries with increasingly differing tactics.  And, one of the best ways to do that is to encourage innovators like Sancoff, who are willing to invest their own resources to build prototypes, not discourage them. 

But look on the bright side – the DoD won’t spend $19 million on a stealth boat prototype, instead choosing to waste $23 billion on three neutered stealth destroyers… but at least its not a $1.5 TRILLION dollar project that is “too big to fail”, so it must proceed in its screwing of the taxpayer.

F35-problems

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