Month: January 2017

Two weeks after a Tunisian man, Anis Amri, whose German asylum request had been rejected, rammed a truck into a Berlin Christmas market and was later shot dead by Italian police, the German state prosuector’s office said on Monday that a Syrian migrant who arrived in Germany two years ago was arrested on suspicion of seeking money from the Islamic State, to drive truck bombs into crowds.

Saarbruecken prosecutor Christoph Rebmann said the 38-year-old Syrian was detained on Saturday in his apartment in Germany’s Saarland State, and an arrest warrant was issued on Sunday on suspicion that he was trying to raise 180,000 euros ($189,000) to fund an attack. Rebmann said the man, whom he did not name, was suspected of seeking the money from Islamic State in Syria to buy trucks and load 400-500 kg (880-1,100 pounds) of explosives into each of them. “He is suspected of … requesting 180,000 euros from a contact person in Syria on his cell phone from Saarbruecken in December, 2016 so that he could acquire vehicles to pack with explosives and drive them into a crowd,” Rebmann said.  It was not clear if the Islamic State in Syria, which has been facing a severe liquidity shortage since its oil operation was virtually eliminated by Putin, had that kind of spare change.

The truck which ploughed into a crowded Christmas market in Berlin, on
December 19, 2016.

According to a separate statement by Saarland police, the Syrian suspect asked for the ISIS money to finance an “unspecified terrorist attack” in “Germany, France, Belgium and the Netherlands.” 

Saarland Deputy Police Commissioner Hugo Muller said that the Syrian man planned to repaint the vehicles as police cars. “In his respective communications with contacts linked to IS, he [the suspect] offered or suggested to repaint cars to make them look similar to police cars, load them with explosives, position them in a crowd of people and then detonate them,” Muller said.

The Prosecutor’s office announced that the suspicion of plotting a terrorist attack are based on a chat in the online messenger Telegram, which was found in the telephone of the suspect during a search of his house. “So far the investigation has found no evidence that the suspect had already prepared [booby trapped] cars to carry out the attacks,” authorities noted though. The man admitted to making contact with the Islamic State, but has denied he had any plans to stage an attack.

“He said he wanted the money from ISIS to support his family back in Syria,” Rebmann told Reuters, adding that the Syrian had said he wanted to fool the jihadist group into sending him the money.

The Syrian came to Germany on Dec. 5, 2014, just before a wave of more than 1.1 million asylum-seekers arrived from the Middle East, Africa and Asia in 2015. He was given permission to stay in Germany on Jan. 12, 2015, and originates from the Syrian is from the city of Raqqa, the Islamic State’s de factor capital. According to Reuters, the prosecutor’s office in Saarbruecken, near the French border, had been alerted to his activities by the BKA federal crime office.

Suggesting a shift in Germany’s “Open Door”approach to refugees, Interior Minister Thomas de Maiziere said that failed asylum seekers who are regarded as a danger should be detained until they can be deported. He made the suggestion in a guest column in Tuesday’s edition of the Frankfurter Allgemeine newspaper.

Both he and Merkel have plenty of reasons for concern: political analysts, conservative allies and diplomats have said a major terrorist attack in the coming months could damage Merkel’s hopes of winning a fourth term in September’s election. The far-right Alternative for Germany (AfD) party has blamed her policies for the Dec. 19 Berlin attack as well as previous terrorist attacks on German soil.

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Submitted by Jim Quinn via The Burning Platform blog,

In Part One of this article I discussed the failure of our brains to think rationally due to our biases and the relentless propaganda flogged by our Deep State ruling class. Viewing the future through the looking glass of the Fourth Turning keeps you focused on the three catalysts which will drive all events in 2017 and beyond. I’ve addressed my 2017 Debt forecast in Part One. Now I will make some guesses about what might happen in 2017 related to Civic Decay and Global Disorder.

Civic Decay Forecast

“Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.” – Daniel Kahneman, Thinking, Fast and Slow

The presidential election and its aftermath tell you everything you need to know about the level of civic decay overtaking this country. The country is as divided as it was after the election of Abraham Lincoln in 1860. There is virtually no common ground between liberals and conservatives. The pure hatred and contempt between the winners and losers in the recent election does not bode well for the country over the next four to eight years.

The social fabric of the country has been torn asunder. The Clinton supporters believe anyone not on their side is deplorable, racist, misogynist, and fans of Hitler. Trump supporters believe anyone not on their side is low IQ, Muslim loving, deceitful, math challenged, and fans of a criminal. The gulf between the two sides is unbridgeable.

Barack Obama, the well-dressed, polished, articulate, empty suit, who has occupied the White House for the last eight years serving as the front man for the Deep State, has done more to destroy race relations and sense of community than any president in history. His divisive rhetoric and actions over the last eight years created the atmosphere for the acrimonious election and the violent protests that followed.

His failure to quell the Soros funded Black Lives Matter terrorist organization has resulted in the slaughter of police across the country. Meanwhile, his hometown of Chicago has seen 800 homicides and over 4,400 shootings in 2016 – with over 90% blacks killing blacks. His legacy is one of complete and utter failure, but his hubris knows no bounds, and he actually believes his eight year reign of error was a resounding success. Facts be damned.

“A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.” – Daniel Kahneman, Thinking, Fast and Slow

Obama fears his legacy will go up in flames. When you govern through executive orders, bypassing Congress, and flaunting the Constitution, your actions can be overturned with the stroke of a pen. When your crowning achievement – Obamacare – is derided by virtually everyone in the country as an epic failure and will be repealed and replaced in short order, you realize your entire presidency was a sham and a national disgrace.

Obama is flailing about in his final weeks desperately trying to keep the attention focused upon him. He is gambling with the lives of his countrymen by doing everything in his power to provoke World War III with Russia and to inflame the Middle East with his UN engineered snub of Israel. Obama doesn’t like to lose and he is acting like a churlish spoiled brat as his time runs out. He has become a laughingstock around the world. He will fan the flames of discontent in this country until he is ushered out of the White House.

Here are a few suppositions about what will happen next:

• Obama trying to sow discord between the U.S. and Russia will fail, as Trump and Putin will meet and find common ground in the Middle East, the Ukraine, and Turkey. Republican neo-cons like McCain and Graham will be outraged. Liberal warmongers who once protested Bush’s wars will also be outraged. The mainstream media will continue to try and fan the flames of war.
• Before leaving office Obama will poke a final stick in the eye of Trump and his supporters by pardoning Hillary Clinton for all possible wrongdoing. This will infuriate the right. Trump will do everything in his power to investigate the Clinton foundation and any issues which could incriminate Bill, Holder, Lynch or Obama. The peaceful transition of power has not been observed by the left, so all bets are off once Trump takes office.
• Well-funded (by Soros) domestic agitators, including BLM and various femi-nazi groups, will attempt to disrupt the inauguration ceremonies. There will be violence, conflicts with Trump supporters, and police confrontations. This will further widen the divide in this country. The left have proven to be those who promote violence and will continue to do so. If they venture outside of their urban safe zones, they will be met with a white heavily armed populace.
• The left wing mainstream media will not be deterred in their efforts to bring down the Trump presidency. They will fire away on a daily basis as their ratings drop lower and lower. Their railing against “fake news” has backfired, driving more people to alternative media sites where they will not be inundated with Deep State approved propaganda. The press will do their utmost to agitate the masses, creating and promoting conflict. Trump will continue to bypass and scorn the media outlets by taking his message directly to the people.
• Building the wall, shutting off the immigration pipeline of Muslim refugees, defunding sanctuary cities, and fully supporting local police across the country will trigger snowflakes, BLM terrorists, illegal immigrants, and various Soros funded radical groups to stage violent protests in the liberal urban enclaves. They are waiting for their next high profile police shooting to pounce. The civil chaos and violent protests will increase as the year progresses.
• Whoever Trump nominates as his Supreme Court justice will face enormous scrutiny. The left wing media will stop at nothing to destroy the nominee. The hearings in Congress will be nasty, rude, and vitriolic. The animosity between the opposing sides will reach epic proportions. Both sides know the Supreme Court is of vital importance to the future course of the country.
• With Obama failing to fade into the sunset and his enormous ego and arrogance spurring him to agitate the left wingers, there will be no de-intensifying of the rhetoric between the right and the left. As we’ve seen, the left are the proponents of violence as their chief weapon. An attempt on the life of Trump is a distinct possibility in his first year in office. A successful or unsuccessful attempt would have far reaching consequences that could lead to civil chaos.

Global Disorder Forecast

“We focus on our goal, anchor on our plan, and neglect relevant base rates, exposing ourselves to the planning fallacy. We focus on what we want to do and can do, neglecting the plans and skills of others. Both in explaining the past and in predicting the future, we focus on the causal role of skill and neglect the role of luck. We are therefore prone to an illusion of control. We focus on what we know and neglect what we do not know, which makes us overly confident in our beliefs.” – Daniel Kahneman, Thinking, Fast and Slow

The level of global disorder hasn’t been this high since the 1930s. There are dozens of potential flash points capable of producing a cascading crisis which could blow up the world. The highly touted establishment mantra of globalization has produced an interconnected web of trillions in global debt, with one quadrillion dollars of indecipherable derivatives layered on top, all dependent upon the sustenance of insolvent mega-banks and bankrupt nation states. The only thing keeping this global Ponzi scheme alive is the unfounded belief in the brilliance of central bankers and corrupt politicians.

The detonator for these interwoven financial weapons of mass destruction is rising global interest rates. The global financial system will be blown sky high by a sustained high volume sovereign bond selloff. The bond market is always the canary in the coal mine. Bonds will sell-off before stocks and real estate. Bond markets have begun to sell-off in a relatively orderly manner over the last three months, with long term Treasuries falling 13%. Bill Gross recently described the growing risk:

“Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day.”

Will that day happen in 2017? No one knows for sure, but the probability is much higher than biased “experts” believe. The substantial concentration of cognitive biases clouding the judgement of the supposed wise men ruling the world has blinded them to the tragic consequences of what happens when the mother of all bubbles explodes like a supernova.

The complacency of those in charge and the trusting masses will eventually be dealt a death blow when the high frequency trading computers run amuck and wipe out trillions of faux paper wealth in a matter of minutes. The powers that be will declare no one could have seen it coming, when in actuality anyone with a basic understanding of math could have seen it coming from a mile away. Most have chosen to remain blind to reality, because dealing with it is too painful to consider.

“We can be blind to the obvious, and we are also blind to our blindness.” – Daniel Kahneman, Thinking, Fast and Slow

Let’s get to a few prognostications regarding global events in 2017:

• Obama, in a despicable act of trying to fence Trump in, has introduced further sanctions against Russia and Putin based upon no solid evidence other than the opinions of the same people who were sure there were WMD in Iraq. The MSM and the neo-con faction of his party are all on Obama’s side. I expect Trump to override Obama’s childish display of antagonism, while showing the neo-cons there is a new sheriff in town, by developing a working relationship with Putin and lowering the tensions between the two countries.
• Trump and Putin will come to an agreement regarding keeping Assad in power in Syria while turning both nations’ attention to obliterating ISIS and the so called “moderate” Al Qaeda terrorists in the Middle East. General Mattis and Trump’s team of rational thinkers will develop a feasible plan to destroy ISIS once and for all. Safe zones will jointly be created in Syria and Iraq by the U.S. and Russia to stem the tide of refugees pouring into the EU and U.S.
• The U.S. dependency on Saudi oil will continue to decrease, further reducing their influence on U.S. policy in the Middle East. Saudi failure in Syria, Yemen and keeping Iran contained will lead to further discontent in the kingdom. Financial woes, declining oil output and religious tensions will fray the fabric of their insular society and lead to a religious uprising and civil war.
• Turkey has been pushed into the Russian sphere of influence by U.S. meddling. The country is falling apart. A civil war on par with the Syrian conflict is likely to breakout. Russia would likely support the dictator Erdogan against rebel forces supported by NATO. Religious and sectarian violence will tear the country apart and create further tensions between Russia and the U.S.
• Israel will pre-emptively take action either covertly or overtly to damage the Iranian nuclear program without informing the U.S. of its actions in advance. This will be supported by the neo-con factions in the U.S. government, but will strain relations between Netanyahu and Trump.
• The crackpot efforts at demonetization by Modi in India will destroy the Indian economy and cause societal upheaval among his 1.25 billion mostly poor citizens. With the eighth largest economy on the planet imploding, the economic reverberations across Southeast Asia will be enormous, possibly being the trigger for the next step down in this ongoing global recession. India’s weakness could spur their enemy Pakistan to take aggressive border actions which could lead to military conflict.
• With the fourth largest economy in the world in near permanent recession for the last twenty years, Japan’s debt to GDP ratio of 230% portends financial collapse. In the midst of a demographic implosion, with negative interest rates, and a central bank buying all the newly issued debt and billions in stocks, Japan is a bug seeking a windshield. When this Ponzi economy crashes, the worldwide impact will be significant. If Japan doesn’t trigger the global eruption, it will be a major contributor as the detonation spreads around the world.
• China continues to steadily devalue the yuan against the USD and has eliminated all the gains since 2010. At the same time they have reduced their foreign reserves by over 20% since mid-2014. China’s third largest economy in the world is slowing rapidly as more bad debt builds up in their system. They have a real estate bubble that makes the U.S. bubble seem like a pimple on the ass of a fly. A trade war initiated by Donald Trump would be the pin bursting the Chinese debt bubble. The situation could intensify into a bond selloff and panic. If derivative positions of over-leveraged or poorly-hedged globally systemic banks begin to unravel, cascading losses could lead to a vicious cycle and a tragic outcome.
• Potential military conflict between China and Japan/U.S. over the islands in the South China Sea ramps up by the day. No one wants a war, but all it would take is a careless stupid act by a low level military officer to create a crisis. China is already bent out of shape by Trump acknowledging the existence of Taiwan. China is still essentially a dictatorship. The country is racked by corruption. An economic collapse could be met with distracting the public through a military adventure against Taiwan. These scenarios are unlikely in 2017, but not out of the question.
• The most likely and potentially most dire event which could affect the world in 2017 is the disintegration of the EU. Greece is still a basket case. Italy is on the brink. The EU area economy barely registers positive after years of negative interest rates and debt issuance. Unemployment rates, excluding Germany, range between 10% and 25%. Brexit and Trump’s victory portend a further shift to the right in the EU. The right wing party will win the French presidency. Merkel will be defeated in the upcoming elections. France and Italy are likely to have a referendum on leaving the EU. The departure of either will end the failed experiment. The insolvent Italian, French and German banks, specifically Deutsche Bank, will collapse in an EU disintegration scenario.
• The influx of Muslims into Europe is destroying their culture and leading to violence, terrorism, bloodshed, and now retribution. The left wingers have made a dreadful mistake in allowing hordes of Muslims to invade their countries. Their already fraying social welfare states are now completely bankrupt and citizens are afraid to go into the streets for fear of being attacked by members of the religion of peace. With the right gaining power in France, Germany and Italy, the blowback against Muslims will be violent and bloody. European cities will be rocked with violence throughout 2017.

“Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.”  – Daniel Kahneman, Thinking, Fast and Slow

I think it is pretty obvious my pessimism bias may have skewed my predictions for 2017. I’ve been pessimistic for the last eight years and the stock market is up 200%. I try to assess the world from a logical fact based frame of mind, but for the last eight years the world has been kept afloat by a combination of debt, delusions and denial.

The Deep State propaganda machine has convinced the masses we are living in normal times, despite the fact the Fed printed $3.5 trillion out of thin air and handed it to the criminal Wall Street banks, interest rates have been kept at or near zero for eight years, revelations from Snowden that we truly live in a surveillance state far exceeding Orwell’s dystopian vision, the national debt doubling to $20 trillion, proof that all financial markets are rigged, undeclared wars being waged across the globe, and a reality TV star defeating a criminal to be president of the United States. Sounds pretty normal to me.

My confidence level in my predictions is quite low. But, if one or two of the low probability events comes to fruition, the financial and/or human devastation will make 2008 look like a walk in the park. I don’t have an agenda in putting forth these predictions. I’m not selling anything or hawking stocks, bonds, or gold. I don’t tout myself as an expert like the over-confident, arrogant pricks on CNBC, CNN, MSNBC, or FOX. I’m just trying to understand what is happening in this crazy universe. We live in an uncertain world. I believe an unbiased appreciation of uncertainty is the cornerstone of rationality and reason. Not acknowledging the role of luck or chance in the course of human events is setting you up for a fall.

Our countries, central banks, financial complex, military industrial complex, sick care complex, global mega-corporations, and government bureaucracies are ruled by men whose hubris, arrogance, greed and hunger for power has warped our world, producing unfathomable ill-gotten profits for the financial class who can abuse justice with impunity while the average man is bullied, pillaged and abused with disregard.

These well dressed, highly educated, sophisticated, soulless barbarians hide their evil deeds behind the trappings of culture, but they are revealed by their grotesque schemes, murderous policies, and war profits soaked in blood. When they lose control of this global Ponzi scheme, I hope they pay the ultimate price for their traitorous deeds. Will it happen in 2017? I don’t know. But it will happen before this Fourth Turning climaxes.

“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning

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The following dramatic time-lapse video, shows a wall of toxic smog rolling into Beijing over a 20-minute period collapsed into a 10 second video; it gives a glimpse of the pollution problem in China’s capital city. Chas Pope, a British engineering consultant working in Beijing, shot the video.

An air-quality index released by China’s municipal environmental protection bureau, which measures potentially hazardous particles in the air, hit 482 on Sunday, almost touching the 500 mark where the scale tops out, and far beyond the point deemed hazardous to health, according to the South China Morning Post.

“Everyone should avoid all physical activity outdoors,” a warning accompanying the reading warns. “People with heart or lung disease, older adults, and children should remain indoors and keep activity levels low.”

As a result of the heavy smog to hit much of northern China on Sunday, hundreds of flights were canceled and highways shut, disrupting the first day of the New Year holiday. The latest smog incident to hit Beijing, and which forced local authorities to extend an “orange alert” – the second highest level for air pollution until Jan. 4 – followed a similar hazardous smog alert in mid-December, leading authorities to order hundreds of factories to close and to restrict motorists to cut emissions.

The latest bout of air pollution began on Friday and is expected to persist until Thursday, although it will ease slightly on Monday, the last day of the New Year holiday according to ABC.

In Beijing, 126 flights were canceled at the city’s main airport and all buses from there to neighboring cities suspended, state news agency Xinhua said.

Average concentrations of small breathable particles known as PM2.5 were higher than 500 micrograms per cubic meter in Beijing – 50 times higher than World Health Organization recommendations.

In Tianjin, Beijing’s next door metropolis, the smog was not as serious but visibility much worse, with more than 300 flights canceled at Tianjin airport and conditions not expected to improve in the near term, the city government said. Xinhua said highways into and out of the city were also closed.

In Shijiazhuang, the capital of Hebei province that surrounds most of Beijing, about two dozen flights were canceled and eight flights diverted to other airports because of the smog, the People’s Daily said on its website.

A total of 24 Chinese cities have issued red alerts for the current round of pollution, which mandate measures like limiting car usage and closing factories, while 21 have issued orange alerts, including Beijing and Tianjin.

As Reuters notes, Pollution alerts are common in northern China, especially during winter when energy demand, much of it met by coal, soars. The country’s northern provinces mostly rely on the burning of hundreds of millions of tonnes of coal each year for heating during northern China’s bitterly cold winters.

China began a “war on pollution” in 2014 amid concerns its heavy industrial past was tarnishing its global reputation and holding back its future development, but it has struggled to effectively tackle the problem.

Unfortunately for China’s residents, the “war” is lost every time Chinese production goes into overdrive, forcing the government to order manufacturing to halt output, leading to an economic slowdown, and forcing a sharp restart several weeks to months later, usually as a result of more trillions in credit injections, which then send the credit impulse propagating around the globe.

In other words, the global economy is now held hostage by the level of toxic particullate matter in northern China: any time this goes off the chart, manufacturing in China is halted, leading to significant downstream effects around the entire world.

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As we have detailed numerous times recently, the recent move in Bitcoin has been strongly suggesting increasing fears of capital controls and/or expectations of a looming (and quite notable) devaluation of the Yuan against the US Dollar. Tonight saw China's largest nationalist tabloid suggesting that China should consider one-off yuan devaluation to keep the currency stable at equilibrium level. Offshore Yuan is tumbling – to new record lows.

As we noted earlier, a quick look at the uncanny correlation between the decline in the Yuan and the rise in the bitcoin, confirms that the digital currency has indeed been largely used to evade capital controls. 

Based on this chart alone, the recent surge in Bitcoin would imply that a substantial devaluation of the yuan is looming. That, or even more aggressive capital controls.

And tonight, researchers with State Information Center led by Zhu Baoliang wrote in an article published on Shanghai Securities News, that China should consider one-off yuan devaluation to keep the currency stable at equilibrium level and suggest capital controls and as well as what seems like a reference to "virtual currency"…

…the effect of monetary policy continues to weaken. After repeatedly cut interest rates, lowering after registration, our short futures money market interest rates have dropped to about 2.2%, in the history of a relatively low level. Money supply growth rate far exceeds the rate of economic growth, social capital is abundant. But because of the lack of investment opportunities, more funds through the state-owned enterprises and financing platform to invest in less efficient infrastructure, or real estate, or idle in the virtual economy. Capital continues to off real to the virtual, will breed all kinds of asset bubbles, a huge impact on financial stability. At the same time, state-owned enterprises, financing platforms, real estate and other sectors and industries a large number of financing, but also pushed up the financing costs of financial markets, private enterprises and small and medium-sized enterprises to reduce the financing cost is not large, thus out of private investment.

 

…

 

It is suggested that the total social financing and broad money growth should be about 12%, and maintain a reasonable and reasonable liquidity scale. The second is to further improve the RMB exchange rate market-oriented level, and enhance the flexibility of the RMB exchange rate, or even a one-time devaluation of the renminbi, so as to maintain the stability of the RMB in the equilibrium level.

 

At the same time, the proper control of foreign exchange outflow, the state-owned enterprises in overseas real estate, antiques, teams and other non-substantive, non-technical M & A activities to be strictly limited. Third, closely tracking study American influence elected president's economic policies on China, the foreign exchange market volatility and prevent cross-border capital outflows triggered massive financial risk domestic bond market, the real estate market.

And for now the reaction is offshore Yuan selling to record lows…

 

And Bitcoin (in China) surging very close to record highs…

 

7,588 Yuan per Bitcoin in the record high and volume in this most recent surge is dramatically higher. But as we noted earlier, for those buying into bitcoin here on the momentum, most of which originates in China, we urge readers to be cautious as by now the PBOC has certainly noticed that the digital currency remains one of the final, and most successful, means of bypassing capital controls in China. Should Beijing mandate that bitcoin no longer be a means to illegally transfer capital offshore, there is risk of a dramatic, and sharp, drop in its price.

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Submitted by Mike Shedlock via MishTalk.com,

Edward Jay Epstein has an op-ed in the Wall Street journal promoting his new book “How America Lost Its Secrets: Edward Snowden, the Man and the Theft”.

Epstein discusses the Fable of Edward Snowden

At the forefront of Epstein’s claims is the fact that Snowden lied. “As he seeks a pardon, the NSA thief has told multiple lies about what he stole and his dealings with Russian intelligence,” says Epstein.

Of all the lies that Edward Snowden has told since his massive theft of secrets from the National Security Agency and his journey to Russia via Hong Kong in 2013, none is more provocative than the claim that he never intended to engage in espionage, and was only a “whistleblower” seeking to expose the overreach of NSA’s information gathering. With the clock ticking on Mr. Snowden’s chance of a pardon, now is a good time to review what we have learned about his real mission.

 

Mr. Snowden’s theft of America’s most closely guarded communication secrets occurred in May 2013, according to the criminal complaint filed against him by federal prosecutors the following month. At the time Mr. Snowden was a 29-year-old technologist working as an analyst-in-training for the consulting firm of Booz Allen Hamilton at the regional base of the National Security Agency (NSA) in Oahu, Hawaii. On May 20, only some six weeks after his job there began, he failed to show up for work, emailing his supervisor that he was at the hospital being tested for epilepsy.

 

This excuse was untrue. Mr. Snowden was not even in Hawaii. He was in Hong Kong. He had flown there with a cache of secret data that he had stolen from the NSA.

Well la-de-friggin da. The idiocy of those opening paragraphs is obvious to the world.

What was Snowden supposed to say? “Hey guys I am not coming into work because I stole documents and I am meeting up with Greenwald?”

So of course Snowden lied… he had to lie.

It was not the quantity of Mr. Snowden’s theft but the quality that was most telling. Mr. Snowden’s theft put documents at risk that could reveal the NSA’s Level 3 tool kit—a reference to documents containing the NSA’s most-important sources and methods. Since the agency was created in 1952, Russia and other adversary nations had been trying to penetrate its Level-3 secrets without great success.

 

Yet it was precisely these secrets that Mr. Snowden changed jobs to steal. In an interview in Hong Kong’s South China Morning Post on June 15, 2013, he said he sought to work on a Booz Allen contract at the CIA, even at a cut in pay, because it gave him access to secret lists of computers that the NSA was tapping into around the world.

Snowden figured out the NSA was involved in illegal activity and he wanted to investigate the depth of it. He succeeded. Congratulations to Snowden for a job well done.

In October 2014, he told the editor of the Nation, “I’m in exile. My government revoked my passport intentionally to leave me exiled” and “chose to keep me in Russia.” According to Mr. Snowden, the U.S. government accomplished this entrapment by suspending his passport while he was in midair after he departed Hong Kong on June 23, thus forcing him into the hands of President Vladimir Putin’s regime.

 

None of this is true. The State Department invalidated Mr. Snowden’s passport while he was still in Hong Kong, not after he left for Moscow on June 23. The “Consul General-Hong Kong confirmed that Hong Kong authorities were notified that Mr. Snowden’s passport was revoked June 22,” according to the State Department’s senior watch officer, as reported by ABC news on June 23, 2013.

Mercy! His passport was invalidated on June 22, not June 23. Call out the national guard. It’s treason I say.

To provide a smokescreen for Mr. Snowden’s escape from Hong Kong, WikiLeaks (an organization that the Obama administration asserted to be a tool of Russian intelligence after the hacking of Democratic Party leaders’ email in 2016) booked a dozen or more diversionary flight reservations to other destinations for Mr. Snowden.

Oh yes, let’s drag Obama’s stupidity into the discussion. The only thing Epstein failed to deliver was nonsense from the Washington Post. Perhaps it’s in the book.

Nowhere did Epstein make the case Snowden was anything more than a whistle-blower.

His op-ed is so ridiculous, one can dismiss the book as the work of a misguided fool who fails to understand what the US constitution is all about.

@ggreenwald @snowden Edward Snowden is a genuine US hero. It's fake-patriot, book-writing fools like Epstein the US really has to fear.

— Mike Mish Shedlock (@MishGEA) January 2, 2017

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Following Q3's 2% contraction, and with analysts' highest expectation at +5.1% (StanChart), Singapore GDP grew at a shocking 9.1% in Q4 QoQ…

 

This was four standard deviations above average estimates.

These are preliminary numbers based on the fuirst two minths of the quarter butthe rebound was broad based…

• Manufacturing +14.6% q/q;
• Construction -4.7% q/q;
• Services +9.4% q/q

Year-over-year, Singapore’s 4Q GDP grew 1.8% according to Ministry of Trade and Industry, smashing expectations of +0.3%. As The FT reports, Manufacturing experienced a big jump, growing 6.5 per cent in the fourth quarter from a 1.7 per cent year-on-year rate in the three months to September 30.

“Growth was primarily driven by the electronics and biomedical manufacturing clusters, even as the transport engineering and general manufacturing clusters continued to contract”, MTI said.

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As part of his just released 2017 outlook, JPM’s Michael Cembalest, chairman of markets and investment strategy, notes that while “political upheavals and unorthodox central bank actions persist” he prdictes “more of the same in 2017: single digit returns on diversified investment portfolios as the global economic expansion bumps along for another year.” Of course, the alternative is a recession call, which considering the current expansion will be the third longest in US history by the time Trump is inaugurated in less than three weeks, is probably not too farfetched.

Something else, however, caught our eye: the same observation that was considering “fake financial news” less than a decade ago, and is now part of the mainstream jargon – the following statement by the JPM strategist:

“True Believer” central banks have created unprecedented distortions in government bond markets. Bond purchases and negative policy rates by the ECB and Bank of Japan led to negative government bond yields. Whatever their benefits may be, they also resulted in profit weakness and stock price underperformance of European and Japanese banks. The poor performance of European and Japanese financials was a driver of lower relative equity returns in both regions in 2015/2016.

We agree, and now that these “True believes” are being phased out – at least in mental models, and if only for the time being – replaced by hopes that Trump’s still undetermined fiscal policies and a global push for reflation will somehow bootstrap the global economy groaning under trillions in excess debt, and swamped by a demographic picture that is massively deflationary, we are far less sanguine about the “single-digit gains” forecast by JPM.

In any case, here is the Executive Summary from JPMs “Eye on the Market” outlook for 2017, a preamble to a far longer piece noted below.

* * *

Political upheavals and unorthodox central bank actions persist, but it looks like more of the same in 2017: single digit returns on diversified investment portfolios as the global economic expansion bumps along for another year.

How we got here. By the end of 2014, central bank stimulus lost its levitating impact on markets, GDP and corporate profits, all of which have been growing below trend. Proxies for diversified investment portfolios generated returns of just 1%-3% in 2015 and 6%-7% in 2016

The biggest experiment in central bank history ($11 trillion and counting as of November 2016) helped employment recover in the US and UK, and more recently in Europe and Japan. Across all regions, however, too many of the benefits from this experiment accrued to holders of financial assets rather than to the average citizen. As a result, the political center of a slow-growth world has begun to erode, culminating with the election of a non-establishment US President with no prior political experience, and the UK electorate’s decision to leave the European Union. The market response to Trump’s election has been positive as investors factor in the benefits of tax cuts, deregulation and fiscal stimulus and ignore for now potential consequences for the dollar, deficits, interest rates, trade and inflation (see US section on the “American Enterprise Institute Presidency”).

“True Believer” central banks have created unprecedented distortions in government bond markets. Bond purchases and negative policy rates by the ECB and Bank of Japan led to negative government bond yields. Whatever their benefits may be, they also resulted in profit weakness and stock price underperformance of European and Japanese banks. The poor performance of European and Japanese financials was a driver of lower relative equity returns in both regions in 2015/2016.

For the last few years, I have written about a preference for an equity portfolio that’s overweight the US and Emerging Markets, and underweight Europe and Japan. This has been one of the most consistently beneficial investment strategies I’ve seen since joining J.P. Morgan in 1987 (see chart below, right). It worked again in 2016, and despite the negative consequences of rising interest rates and a rising dollar for US and EM assets, I think it makes sense to maintain this regional barbell for another year as Europe and Japan once again snatch defeat from the jaws of victory.

We had a single digit portfolio return view for 2015 and 2016 (which is how things turned out), and we’re extending that view to 2017 as well. There are some positive leading indicators which I will get to in a minute, but first, the headwinds:

• While global consumer spending has held up, global business fixed investment remains weak, in part a consequence of the end of the commodity super-cycle and slower Chinese growth
• We expect the emerging market recovery to be gradual, particularly if Trump policies lead to substantially higher interest rates and a higher US dollar
• We expect a near-term US growth boost (amount to be determined based on the composition of tax cuts, infrastructure spending and deregulation), but trend growth still looks to be just 1.0% in Japan and 2.0% in Europe
• The global productivity conundrum continues, leaving many unanswered questions in its wake
• Even though private sector debt service levels are low, high absolute amounts of debt may constrain the strength of any business or consumer-led recovery

• And finally, even before Trump takes office, we’re already seeing a rise in protectionism as global trade stagnates. The degree to which Trump follows through on campaign proposals on trade is a major question mark for 2017

So, with all of that, why do we see 2017 as another year of modest portfolio gains despite the length of the current global expansion, one of the longest in history? As 2016 came to a close, global business surveys improved to levels consistent with 3% global GDP growth, suggesting that corporate profits will start growing at around 10% again after a weak 2016. More positive news: a rise in industrial metals prices, which is helpful in spotting turns in the business cycle (see Special Topic #8).

Furthermore (and I understand that there’s plenty of disagreement on the benefits of this), many developed countries are transitioning from “monetary stimulus only” to expansionary fiscal policy as well. Political establishments are aware of mortal threats to their existence, and are looking to fiscal stimulus (or at least, less austerity) as a means of getting people back to work. The problem: given low productivity growth and low growth in labor supply, many countries are closer to full capacity than you might think. If so, too much fiscal stimulus could result in wage inflation and higher interest rates faster than you might think as well. That is certainly one of the bigger risks for the US.

So, to sum up, here’s what we think 2017 looks like:

• A modest growth bounce in the US from some personal and corporate tax cuts, deregulation and infrastructure spending, with tighter labor markets, rising interest rates and a stronger dollar eventually taking some wind out of the US economy’s sails. If I’m underestimating something, it might be the potential increase in confidence, spending and business activity resulting from a slowdown in the pace of government regulation
• A little better in Europe and Japan in 2017, but no major breakout from recent growth trends
• China grows close to stated goals, supported by multiple government bazookas firing at once
• Emerging markets ex-China continue recovering after balance of payments adjustments; while countries with high exposure to dollar financing will struggle, overall risks around a rising dollar have fallen markedly since 2011
• The world grows a little faster in 2017 than in 2016, but as shown above, a lot of that is already in the price of developed market equities. So, another single digit portfolio year ahead

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Much more in the full forecast below (link)

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Authored by BelowGotham.com's Bill Blunden,

The New York Times has published an interactive piece which encapsulates, in all of 200 words, the alleged campaign by Russian hackers to influence the outcome of the 2016 election. Yet the media’s framing of events eschews basic facts – the actual content of the leaks – in favor of screaming “thief” at the top of its lungs.

And so the following 200-word summary is presented as an antidote to the establishment’s clumsy post-election messaging…

Someone delivers exact copies of emails written by Democratic Party mandarins into the public record. These messages are subsequently posted online. Thank you WikiLeaks!

Several email threads demonstrate that the Democratic National Committee (DNC) secretly ganged up on Bernie Sanders to undermine his campaign.

Hillary Clinton, who made over a hundred million in speaking fees with her husband, furtively reassures American oligarchs that her “private position” on economic issues won’t threaten their bottom line. In one related email which highlights big money in politics, a wealthy donor jokes “I guess it takes a study to point out the obvious.”

Voters learn that the DNC leveraged its extensive contacts with the media to manipulate coverage in an effort to elevate Trump. The DNC’s strategy document includes a list of Republican “Pied Pipers” which the media was told to “take seriously.”

The Democratic elites become desperate. Rather than accept their party’s role in Trump’s victory and their betrayal of the working class, they decide to blame Russian Hackers.

The Washington Post hyperventilates about Russian Hackers “penetrating” a utility in Vermont. The headline is exposed as a shameless distortion.

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A few days ago we noted that 2016 marked Chicago’s most violent year in 2 decades as homicides soared nearly 60% YoY and shootings spiked 46% (see “Chicago Violence Worst In 20 Years: ‘Not Seen This Level Of Disrespect For Police Ever’“).  And while many would like to hope that the 2016 violence was a temporary phenomenon, 2017 looks to be getting off to a similar start.

As the Chicago Tribune points out, three people were killed and another 16 were shot and wounded just in the opening hours of the new year.

Three people were killed and 16 others were wounded during the first six hours of the year as the city ended a year that brought levels of violence that had not been seen in the city since the 1990s.

 

In total, four people were killed and 24 other people were wounded in separate shootings from New Year’s Eve to early Sunday.

 

Around 2:30 a.m. an unnamed man was shot by a Chicago police officer, authorities said at a news conference Sunday, about 12 hours after the shooting. They reported that a man led cops on a car chase and physically resisted once he was finally stopped. The man, who is in critical condition, was shot after a scuffle, police said.

 

About two hours later, two men were killed in the year’s first fatal shooting, which took place at 4:25 a.m. Sunday in the 4600 block of North Broadway in the city’s Uptown neighborhood on the North Side.

Meanwhile, Trump acknowledged Chicago’s bloody 2016 in a tweet posted earlier this morning criticizing Mayor Rahm Emanuel for his failure to curb the violence.  Of course, the reference to federal help is likely a retort to Emanuel’s vow to have Chicago remain a sanctuary city for illegal immigrants even if it means losing federal funding under a Trump administration (see “Chicago And Boston Join Cali In Refusing Assistance To Trump’s Deportation Efforts“).

Chicago murder rate is record setting – 4,331 shooting victims with 762 murders in 2016. If Mayor can’t do it he must ask for Federal help!

— Donald J. Trump (@realDonaldTrump) January 2, 2017

 

Data from HeyJackAss! reveals that New Year’s Day was the most violent day of the past month as a total of 30 people were shot, 3 of which died from their injuries.

 

And now that all the data from 2016 has been officially tallied, we find that a total 795 homicides and 4,378 shootings occurred during the year which equates to roughly 12 shootings and just over 2 homicides per day.

 

The 795 homicides recorded in 2016 marked a staggering 56% YoY increase.

 

Finally, as we reported throughout the year, the overwhelming majority of Chicago’s violence occurred in the city’s south and west side neighborhoods.

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In an oddly self-reflective moment of realization, The New York Times' investigative reporter James Risen, writes an oddly un-liberal op-ed pointing out the hypocrisy of Obama administration proclamations with regard 'free press' and transparency and the awkwardly dismal facts on the ground.

If Donald J. Trump decides as president to throw a whistle-blower in jail for trying to talk to a reporter, or gets the F.B.I. to spy on a journalist, he will have one man to thank for bequeathing him such expansive power: Barack Obama.

Mr. Trump made his animus toward the news media clear during the presidential campaign, often expressing his disgust with coverage through Twitter or in diatribes at rallies. So if his campaign is any guide, Mr. Trump seems likely to enthusiastically embrace the aggressive crackdown on journalists and whistle-blowers that is an important yet little understood component of Mr. Obama’s presidential legacy.

Criticism of Mr. Obama’s stance on press freedom, government transparency and secrecy is hotly disputed by the White House, but many journalism groups say the record is clear. Over the past eight years, the administration has prosecuted nine cases involving whistle-blowers and leakers, compared with only three by all previous administrations combined. It has repeatedly used the Espionage Act, a relic of World War I-era red-baiting, not to prosecute spies but to go after government officials who talked to journalists.

Under Mr. Obama, the Justice Department and the F.B.I. have spied on reporters by monitoring their phone records, labeled one journalist an unindicted co-conspirator in a criminal case for simply doing reporting and issued subpoenas to other reporters to try to force them to reveal their sources and testify in criminal cases.

I experienced this pressure firsthand when the administration tried to compel me to testify to reveal my confidential sources in a criminal leak investigation. The Justice Department finally relented — even though it had already won a seven-year court battle that went all the way to the Supreme Court to force me to testify — most likely because they feared the negative publicity that would come from sending a New York Times reporter to jail.

In an interview last May, President Obama pushed back on the criticism that his administration had been engaged in a war on the press. He argued that the number of leak prosecutions his administration had brought had been small and that some of those cases were inherited from the George W. Bush administration.

“I am a strong believer in the First Amendment and the need for journalists to pursue every lead and every angle,” Mr. Obama said in an interview with the Rutgers University student newspaper. “I think that when you hear stories about us cracking down on whistle-blowers or whatnot, we’re talking about a really small sample.

 

“Some of them are serious,” he continued, “where you had purposeful leaks of information that could harm or threaten operations or individuals who were in the field involved with really sensitive national security issues.”

But critics say the crackdown has had a much greater chilling effect on press freedom than Mr. Obama acknowledges. In a scathing 2013 report for the Committee to Protect Journalists, Leonard Downie, a former executive editor of The Washington Post who now teaches at Arizona State University, said the war on leaks and other efforts to control information was “the most aggressive I’ve seen since the Nixon administration, when I was one of the editors involved in The Washington Post’s investigation of Watergate.”

When Mr. Obama was elected in 2008, press freedom groups had high expectations for the former constitutional law professor, particularly after the press had suffered through eight years of bitter confrontation with the Bush administration. But today, many of those same groups say Mr. Obama’s record of going after both journalists and their sources has set a dangerous precedent that Mr. Trump can easily exploit. “Obama has laid all the groundwork Trump needs for an unprecedented crackdown on the press,” said Trevor Timm, executive director of the nonprofit Freedom of the Press Foundation.

Dana Priest, a Pulitzer Prize-winning reporter for The Washington Post, added: “Obama’s attorney general repeatedly allowed the F.B.I. to use intrusive measures against reporters more often than any time in recent memory. The moral obstacles have been cleared for Trump’s attorney general to go even further, to forget that it’s a free press that has distinguished us from other countries, and to try to silence dissent by silencing an institution whose job is to give voice to dissent.”

The administration’s heavy-handed approach represents a sharp break with tradition. For decades, official Washington did next to nothing to stop leaks. Occasionally the C.I.A. or some other agency, nettled by an article or broadcast, would loudly proclaim that it was going to investigate a leak, but then would merely go through the motions and abandon the case.

Of course, reporters and sources still had to be careful to avoid detection by the government. But leak investigations were a low priority for the Justice Department and the F.B.I. In fact, before the George W. Bush administration, only one person was ever convicted under the Espionage Act for leaking — Samuel Morison, a Navy analyst arrested in 1984 for giving spy satellite photos of a Soviet aircraft carrier to Jane’s Defense Weekly. He was later pardoned by President Bill Clinton.

Things began to change in the Bush era, particularly after the Valerie Plame case. The 2003 outing of Ms. Plame as a covert C.I.A. operative led to a criminal leak investigation, which in turn led to a series of high-profile Washington journalists being subpoenaed to testify before a grand jury and name the officials who had told them about her identity. Judith Miller, then a New York Times reporter, went to jail for nearly three months before finally testifying in the case.

The Plame case began to break down the informal understanding between the government and the news media that leaks would not be taken seriously.

The Obama administration quickly ratcheted up the pressure, and made combating leaks a top priority for federal law enforcement. Large-scale leaks, by Chelsea Manning and later by Edward J. Snowden, prompted the administration to adopt a zealous, prosecutorial approach toward all leaking. Lucy Dalglish, the dean of the University of Maryland’s journalism school, recalls that, during a private 2011 meeting intended to air differences between media representatives and administration officials, “You got the impression from the tone of the government officials that they wanted to take a zero-tolerance approach to leaks.”

The Justice Department, facing mounting criticism from media organizations, has issued new guidelines setting restrictions on when the government could subpoena reporters to try to force them to reveal their sources. But those guidelines include a loophole allowing the Justice Department to continue to aggressively pursue investigations into news reports on national security, which covers most leak investigations. In addition, the guidelines aren’t codified in law and can be changed by the next attorney general.

More significantly, the Obama administration won a ruling from the Fourth Circuit Court of Appeals in my case that determined that there was no such thing as a “reporter’s privilege” — the right of journalists not to testify about their confidential sources in criminal cases. The Fourth Circuit covers Virginia and Maryland, home to the C.I.A., the Pentagon and the National Security Agency, and thus has jurisdiction over most leak cases involving classified information. That court ruling could result, for example, in a reporter’s being quickly jailed for refusing to comply with a subpoena from the Trump administration’s Justice Department to reveal the C.I.A. sources used for articles on the agency’s investigation into Russian hacking during the 2016 presidential election.

Press freedom advocates already fear that under Senator Jeff Sessions, Mr. Trump’s choice to be attorney general, the Justice Department will pursue journalists and their sources at least as aggressively as Mr. Obama did. If Mr. Sessions does that, Ms. Dalglish said, “Obama handed him a road map.”

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