Forget Stocks, Look At EU Bonds – They Are The Real Problem

Authored by Tom Luongo,

I’ve been banging on for months along with Martin Armstrong that the real problem overhanging these markets is not an over-priced U.S. equity market.  That’s a sympton of a much bigger problem.

The real problem is an over-valued European sovereign bond market.

Looking at today’s bond market we see technical breakouts on yields to the upside across the continent.  And we’re not talking the usual suspects here, like Italy, Portugal or Greece.

No, we’re talking about Germany.

bunds

Note the cluster of resistance at 0.5%.  The market rejected taking yields on German 10 year debt above that level no less than six times in the past fifteen months.

Today, yields are at 0.685% and tomorrow is the end of the month.  Looks like we’re going to get a major bearish signal in German debt tomorrow.

While all the headlines are agog with stories about the Dow Jones dropping a couple hundreds points off an all-time high, German bunds are getting killed right before our eyes.

The Dow is simply a market overdue for a meaningful correction in a primary bull market.  And it’s a primary bull market brought on by a slow-moving sovereign debt crisis that will engulf Europe.

It’s not the end of the story.  Hell, the Dow isn’t even a major character in the story.

In fact, similar stories are being written in French 10 year debt, Dutch 10 year debt, and Swiss 10 year debt. These are the safe-havens in the European sovereign debt markets.

Meanwhile, Italian 10 year debt?  Still range-bound.  Portuguese 10 year debt?  Near all-time high prices.  The same this is there with Spain’s debtAll volatility stamped out.

Why?

Simple.  The ECB.

For Euro Eyes Only

The ECB’s quantitative easing program and negative interest rate policy (NIRP) drove bond yields across the board profoundly negative for more than a year.

And despite ECB President Mario Draghi’s jaw-boning and assurances, he can no more exit this program than Bitcoin billionaires can exit the crypto-market and get back into dollars without the kind of pain that would stagger, if not break, the industry.

But, the ECB is trapped and cannot allow rates to rise in the vulnerable sovereign debt markets — Italy, Portugal, Spain — lest they face bank failures and a real crisis.

The problem with that is, the market is scared and so they are selling the stuff the ECB isn’t buying – German, French, Dutch, Swiss debt.  In simple terms, we are seeing the flight into the euro intensify here as investors are raising cash.

The euro and gold are up.  The USDX continues to be weak even though capital is pouring into the U.S. thanks to fundamental changes to tax and regulatory policy under President Trump.

In the short term Dow Jones and S&P500 prices are overbought.  Fine.  Whatever.  But, the real problem is not that.  The real problem is the growing realization in the market that governments and central banks do not have an answer to the debt problem.

Trump is being fought every step of the way to keep the dream alive of a U.S. economy brought to the same low state of the EU’s democratic-socialist ‘shitholes.’  He’s winning, by the way, because, for the most part, he is on the side of rational, incentive-based economic theory.

He’s hopeless on some issues, but the core of his tax-cut plan supersedes those failings.

The Real Savings Story

However, the real story is the end of the current monetary system and the repudiation of neoliberal/neoclassical economics. Despite Armstrong’s wailings against the Austrian School of Economics and the Quantity Theory of Money, this is Mises’ revenge.

He actually makes the Austrian case in a recent blog, but refuses to admit that what he’s describing are the effects of money printing rather rooting out the underlying cause of the deflation he’s rightly seeing.

It’s too bad, actually.  Because a mixture of his cycles work and a deeper understanding of Austrian Business Cycle Theory, which is NOT synonymous with the Quantity Theory of Money, would be a a synthetically more powerful combination than either of them on their own.

Printing money undermines the confidence in the value of it.  There is no way around that.  In fact it is the entire point of printing money.  At most points in the inflationary boom/bust cycle increasing the money supply will create price inflation.

Again, that’s the point.

This price inflation comes from the confidence that people have in the issuers of the money that they have things under control, that they are printing the right amount of money to offset price deflation and spark a boom.

And as long as that confidence holds, then expansionary monetary policy will create a new economic boom that can be measured in increasing nominal output.

However, in doing so the money issuers, in this case the central banks, distort the structure of production by mis-pricing the cost of money, the interest rate.  They artificially drive interest rates below the real rate of the market’s risk tolerance.

This signals to producers to engage in projects that there isn’t enough capital in the pool of real savings to cover.  I covered this in a post at length last year.

But, there will always come a point where the creation of more money units will not inspire enough confidence in the system to maintain asset prices being artificially propped up by more money.

And when that happens it will be the boom to end all booms, where printing of more money will not create more confidence but less.  And even a core economy like the U.S. will be bound by this fact.  If Trump is allowed to do his job he will postpone that day for a while, but the structural problems of the U.S.’s economy are too deep to avoid some damage.

Trapped, Trapped I Say!

That’s where the ECB is now.  There is no political will in Europe to change its taxing and regulatory environment.  In fact, Germany wants more punitive Austerity not less.  It demands the worst possible combination of conditions on its confederates, lower government spending (good), higher taxes to pay for the debt servicing (awful).

It’s nothing but a capital destructive scheme meant to punish and destroy the prospect of future growth.

The ECB is flirting with losing the confidence of bond traders and institutional investors who rightly see all European sovereign debt as over-valued, especially as rates in the U.S. begin to rise.

We have been in a deflationary cycle since 2008.  The Fed printed money to save the banks. The money never circulated because it paid the banks to park the money on reserve with the Fed, interest on excess reserves.

However, that interest did, along with government deficit spending,  keeping prices for those things with inelastic demand curves — food, electricity, health care, housing — continually rising while real wages contracted.

The U.S. economy is about to be unleashed by Trump’s tax cut law.  It will be able to absorb higher interest rates for a while.  Yield-starved pension funds, as Armstrong rightly points out, will be bailed out slightly forestalling their day of reckoning.

And in doing so, higher rates in the U.S. are driving core-rates higher in Europe.  An overly-strong euro is crushing any hope of further economic recovery in the periphery, like Italy.  The debt load on Italy et.al. has increased relative to their national output by around 20% since the end of 2016.

This will put the ECB at risk of a massive loss of confidence when Italian banks start failing, Italy’s budget deficit starts expanding again and hard-line euroskeptics win the election in March.

As capital is drained out of Europe into U.S. equities, the dollar, gold and cryptocurrencies, things should begin to spiral upwards rapidly.

This is the story the bond markets are telling us today.

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Instagram Posts Accidentally Reveal Turkish Soldiers’ Locations In Syrian Invasion

In mid-January 2018, Turley launched a military operation against the Kurdish People’s Protection Units (YPG) in Afrin, situated in northern Syria. Code-named “Operation Olive Branch”, the troops participating in the latest Turkish invasion of Syria have been in a fierce battle against the YPG in Syria, but along the way, soldiers have been openly geotagging their positions on Instagram, leaving their locations exposed for the world to see, according to a new report from RT.

RT Digital describes how they uncovered the stupidity of inexperienced Turkish soldiers in the northern Syrian region, who are posting geotagged content on Instagram and other social media platforms as their military units progress through the Turkish border into Syria.  RT was then able to compile the geotagged content and trace out the Turkish invasion into Syria,  along with critical positions of Turkish troops.

More from RT:

In our coverage of Syria’s latest mini-conflict, RT Digital discovered and verified many posts of soldiers dressed in fatigues, recording tanks on the move or the launch of missiles and artillery. Turkish troops were openly geotagging their locations, ranging from Afrin or Azaz in Syria to border areas, such as Reyhanli and Kilis.

Discovering a pattern, we closely monitored the accounts of some individual Turkish troops with a high sharing frequency on Instagram. Based on their geotagging, we could trace their movements and get a rough map of their positions on the ground. Afrin, a remote area in northern Syria, was a very popular geotag for Instagram posts shared by Turkish troops.

Operation Olive Branch was launched earlier this month; as Turkish forces invaded Syria, notice the surge in Instagram posts geotagged to Afrin during the invasion. In modern warfare, the young Turkish soldier posts their fondest memories of war with a selfie on the battlefield.

As RT adds, Afrin was a very popular geotag for Instagram posts shared by Turkish troops. Instagram posts geotagged to Afrin spiked on January 21, according to RT Digital’s analysis.

A local journalist based in Afrin told RT Digital that Turkish forces were continuously bombing the outskirts of the city, targeting civilians. “None of the targets bombed are actually military,” he said.

Turkish President Recep Tayyip Erdogan hinted on Sunday that the campaign against Kurdish militia could be widened beyond Afrin to “wherever there are terrorists.” According to Erdogan, Turkish-led forces have killed almost 400 Kurdish militiamen since the start of Operation Olive Branch on January 20.

The result is a digital bread of crumbs left by the Turkish soldiers themselves:

The lesson for today’s young soldiers – at least until they are all replaced by robots – is if you are going to the battlefield, maybe leave your selfie ambitions at home, or at least remember to deactivate the geotagging feature.

 

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How The European Union Became Divided On Russia

Authored by Xander Snyder via MauldinEconomics.com,

Last week, the prime ministers of Hungary and Bulgaria criticized EU policy toward Russia for being too harsh. The European Union imposed sanctions against Russia in response to Moscow’s intervention in Ukraine, but Hungary and Bulgaria are concerned that the EU’s continued anti-Russia stance could pose a security threat and does not benefit either country.

This difference of opinion on Russia is just a symptom of a broader reality: Europe itself is becoming increasingly divided. As a result, there is no longer a European approach to Russia like there was during the Cold War, when a weak Europe, dependent on the US for its security, acted as one to maintain the US-led containment line. Today, each European country has its own interests determined by its own geographical realities.

Caught in Between

In the case of Hungary, it understands that it has to be part of the Western bloc. Hungary was under Soviet occupation and experienced the suffering that followed its short-lived revolution in 1956 against Soviet rule. Though it understands and appreciates the support that the US provided after the end of the Cold War, it knows that this support is ultimately insufficient to protect it against nearby threats. The US is too far away and, as we saw in Georgia in 2008, the US is primarily concerned with its own interests and might not come to Hungary’s defense if it were truly threatened.

Source: Geopolitical Futures (Click to enlarge)

To Hungary’s east lies Ukraine, a buffer state between the West and Russia. Hungary has generally opposed Ukraine’s developing closer ties with the West. Indeed, when diplomats speak of such integration with the West, Hungary is faced with a critical question: What does “integration” even mean? If it simply means having more diplomatic meetings, why risk rocking the boat with Russia when there is little benefit to Hungary? If integration means greater Western military presence in Ukraine, that would be even worse for Hungary. Russia would see it as a direct threat and would be more inclined to intervene militarily to recuperate its lost buffer space, potentially bringing a Russian military force closer to Hungary’s borders.

Bulgaria, unlike Hungary, has two countries separating it from Russia: Romania and Ukraine. But Bulgaria’s location in the Balkans places it on the historical battle ground between East and West. The country was under Ottoman rule for hundreds of years, though a war between Russia and the Ottoman Empire from 1877 to 1878 made Bulgaria—whose population, like that of Russia, is predominantly Orthodox Christian and Slavic—an autonomous principality.

Bulgaria remained under Ottoman rule but was not directly administered by the Ottomans. Alexander von Battenberg, who was also the nephew of Tsar Alexander II, became the new prince of Bulgaria. The country was subsequently involved in the Balkan Wars in 1912–13, which were fought both between Balkan states and the Ottoman Empire, and between individual Balkan states. During World War II, despite close ties to Russia, Bulgaria sided with the Nazis, not because of any particular cultural affinities but because Bulgaria was weak and unable to resist German power. After the war, Bulgaria became a Soviet satellite and only joined the European Union in 2007.

Bulgaria’s history tells of a place whose sovereignty cannot be taken for granted, and cannot be expected to remain unchanged in perpetuity. Despite its membership in the EU, therefore, it fears both a resurgent Turkey and a Russia that finds itself threatened enough to expand its buffer zone. Though strong ties with the West have their benefits, Bulgaria can’t assume that Europe would be willing or able to defend it from either Turkish or Russian expansion. Like Hungary, Bulgaria gains nothing from taking an adversarial stance toward Russia.

The German Factor

Lying farther west, Germany has fewer security concerns when it comes to Russia than Bulgaria and Hungary have. It does, however, have critical economic concerns. Germany receives a significant amount of oil and natural gas from Russia. In addition, German, Austrian, and French energy companies are engaged in a number of joint venture projects with Russian energy companies. At this point, Russia is too dependent on energy export revenue to be able to pull that lever too hard, but links between German and Russian energy companies mean that sanctions imposed at the United States’ insistence have financial consequences not just for Russia but for Germany as well. This was the reason for the EU’s reticence regarding the most recent round of US sanctions on Moscow, which penalized not only Russian energy companies but energy companies of any nationality doing business with Russian companies.

On the other side of the debate, another group of countries, namely Poland and the Baltic states (Estonia, Latvia, and Lithuania), stands firmly in favor of extending sanctions against Russia. Unlike Hungary and Bulgaria, Poland and the Baltic countries all share borders with Russia. (Lithuania and Poland both border Russia’s Kaliningrad outpost, which is separated from the Russian mainland but contains a significant military presence.) During World War II, Poland suffered at the hands of both the Germans and the Russians. In protecting themselves from the Germans, the Russians devastated Poland. After the war, the Soviet Union created the strategic depth it needed to guard against a western invasion by occupying Poland and the Baltic states. For Poland, Estonia, Latvia, and Lithuania, the risk of a Russian invasion is not theoretical—it is living memory.

Fundamental to the Baltics’ fear is the doubt that the rest of Europe and NATO would step in if Russia threatened them. Poland’s fear stems from its location, situated as it is between Germany and Russia, a geography that has had dire consequences for the country in the past. Poland knows that for now, at least, Germany is not capable of military action.

Germany is constrained by the institutions of the EU and is better served by not having a substantial military force. But Poland must consider the possibility, however unlikely, that Germany could turn on its EU partners at some point. As we’ve seen in the past, the world can change drastically in 20 years.

The idea of Europe as a single entity is imaginary. The distinct geographies of all these countries and their various business ties guarantee that their own interests will govern their relations with Russia. This will continue to challenge whatever unity remains within the EU, and Russia will take advantage of these divisions at every opportunity it gets.

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“Oh Yeah, 100 Percent” – Trump Tells Republican He’ll Release The Memo

After what even the mainstream-est of mainstream media admitted under duress was a solid SOTU address, which was followed by the exact opposite from The Democratic Party’s official response, it appears President Trump has managed to set another narrative as he left the House Chamber.

 

As Trump shook hands up the aisle after his SOTU address, Rep. Jeff Duncan called out to Trump, asking him “Let’s release the memo,” referring to the House Intelligence Committee’s FISA memo.

As the following clip shows, Trump responded instantly: “Oh yeah, don’t worry, 100%.

So that seems pretty clear.

As The Hill notes, Republican members of the committee said on Tuesday that they are working on a transcript of the closed-door vote and will release it when its finished. 

CBS News reported on Tuesday that representatives from the FBI, DOJ, National Security Agency and Office of the Director of National Intelligence are reviewing it.

Rep. Trey Gowdy said this week on Fox that the memo is “embarrassing” to Democrats. Gowdy said:

My Democratic colleagues didn’t want us to find this information. They did everything they could to keep us from finding this information. I think it will be embarrassing to Adam Schiff once people realize the extent to which he went to keep them from learning any of this. That would be the embarrassment…. if it were up to Adam Schiff, you wouldn’t know about Hillary Clinton’s email. You wouldn’t know about the server. You wouldn’t know about the dossier. I do find it ironic that he has his own memo right now because if it were up to him, we wouldn’t know any of it.

Is it any wonder this was Nancy Pelosi’s response…

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Economic Collapse: Will Cryptocurrency Save The Financial System?

Authored by Federico Pieraccini via The Strategic Culture Foundation,

In the second article of my three part series, I addressed how we got to the current state of this financial chaos. In this last article, I explain where we are heading and how cryptocurrency could be the last chance to create a sustainable economic system.

Where to go from here?

If trust and sustainability were the two conditions that allowed for the transition from physical gold to paper currency, it is from this basis that we must start to analyze where we are going and what effects the next economic crisis could have.

In 2008, confidence in central banks saved the global economy. But as Mario Draghi said, the bazooka of quantitative easing was fired and a second hit during a crisis would have proved ineffective. The reason is complex and must be clearly explained. Most people are paid in a currency deposited in the bank, because that is where one keeps one’s currency, able to withdraw it at any time. But in the event of an economic crisis, priority is given to the banks, whatever remaining liquidity being for the customers. The reason why there was no bank run in 2008, which would have led to the collapse of the global banking system, lies in the trust that ordinary people continued to place in the financial system, courtesy of what the corporate-controlled media told them.

The problem concerns the next financial crisis and how the world population will react. The path already seems to be traced, especially in geopolitical terms. Countries like China and Russia have created their own alternative banking and financial system to escape dollar sanctions; but they have also begun to de-dollarize by accumulating gold and using different payment methods to the US currency. In the same way, the desire to escape from a centrally controlled financial system, and the attendant need to remain anonymous, has produced a technological evolution known as cryptocurrency, much as the need to quickly communicate and globally exchange data in real time produced the Internet. Both evolutions find common roots in the American security services. The Internet stems from a DARPA project, and blockchain was outlined in NSA documents back in 1996.

It is easy to imagine that governments and central banks have been caught flat footed by the birth of the cryptocurrencies, but it would be better not to underestimate nations that have been ruling the world for decades and have their finger on the pulse. Although Washington’s aggressive foreign policy has accelerated de-dollarization, one must consider the reason why cryptocurrencies have not been declared illegal.

Let us go back for a moment to the devastating effects of the loss of the gold standard. Looking at a chart, it is easy to see how the start of world debt coincided with the end of the dollar being linked to gold. This has led to an increase in inflation, calmed only by false economic data and a powerful financial manipulation by central banks in collusion with each other. Purchasing power has plummeted and the average person has as a result become impoverished.

When the ordinary person is overwhelmed by debts and sees his purchasing power steadily declining over the years, while continuously being told by the media that the exact opposite is happening, dissatisfaction and frustration increases to a point of passing a tipping point.

In the US in 2008, the burden of the bailout fell on the shoulders of ordinary citizens. Once bitten, twice shy.

People are placing less and less trust in the media and the banks.

From Gold to Money to Crypto.

In this sense, we can perhaps understand why bitcoin and blockchain technology have been able to prosper in complete freedom. It is conceivable that the project reflects an evolving world in which paper money disappears in favor of the digital one. How this transition could take place, and why some nations devoted to de-dollarization will find themselves in a privileged position compared to economies entirely tied to the dollar is a matter open to debate. The possible economic-shift must be considered real and probable for the sustainability of many nations, accompanied by the inevitable technological change and the need to anchor the global economy back to real values. The natural passage is a return to physical gold or to virtual gold, precisely the block chain and the value we bring with it.

We should not underestimate the power of central banks and their plans to invent their own cryptocurrency as a mean to perpetuate their Ponzi scheme.

What will make the main difference in the future is what backs up these virtual currencies.

For example, Russia and China have accumulated many tons of gold and diversified their assets, dumping USD in exchange for tangible goods. A Crypto-Yuan or Ruble will eventually be valued more than an empty crypto-dollar without any counter-value. In a not to long distant future, Yuan and Ruble will be backed with gold or other financial assets like bitcoin while new virtual currencies will continue to perpetuate their empty value as with fiat currency. No surprise that with the next financial crisis, fiat money will pour into gold and crypto market looking for a safe haven from the devaluing dollar.

In the next couple of years we can expect central banks such as those of the US, Europe and Japan develop their own crypto-currency and start pushing conversion from fiat money into their crypto, advancing their project of keeping the system centralized. We should not exclude drastic measures, such as banning non-state-actor cryptos, from governments when central banks start realizing having lost their competitive edge on currency manipulation.

The last straw will be related to US military power trying to enforce the use of USD. In a scenario of steady economic and military decline of power, the US will find itself unable to force certain countries to use their currency, therefore losing its main weapon to create chaos in the world to advance its geopolitical goals. Without the dollar as the main world reserve currency, Washington will be forced to reconcile with the rest of the world, understanding that the unipolar moment is over and the neoliberal hegemonic planes to rule the world are forever gone.

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Trump’s Prescription Drug Price Controls Would Save Us Money. They Would Also Make Us Sicker.

DrugPricesJmmcclung81Dreamstime“One of my greatest priorities is to reduce the price of prescription drugs,” declared President Donald Trump during his State of the Union address tonight. He added, “In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”

The president is reprising his claims in his first post-election press conference last year. Last January, President Trump declared that pharmaceutical companies are “getting away with murder” by pricing their drugs too high. “Pharma has a lot of lobbies, a lot of lobbyists, and a lot of power. And there’s very little bidding on drugs,” Trump said in January. “We’re the largest buyer of drugs in the world, and yet we don’t bid properly.”

The president is right that drugs often cost far less in other countries than they do here. Why? Two words: Price controls. Basically, the government health care systems in other countries simply tell pharmaceutical companies what they will pay for their drugs. Drug companies put up with price controls in other countries because they can still make money because the controlled prices still cover the costs of making the marginal pill. Consequently, paying for the global costs of research and development for new drugs is made up by charging Americans higher unregulated prices.

Drug price controls would indeed save the government and consumers money, but at the cost of shorter and sicker lives. As I reported earlier:

A 2013 study by Dean Baker, co-director of the Center for Economic and Policy Research, …calculated that drug price controls could save Medicare between $24.8 and $58.3 billion annually. On the other hand, less revenue to pharmaceutical companies means less money devoted to research and development. A separate study, published in Managerial and Decision Economics in 2007, estimated that cutting prices by 40 to 50 percent in the U.S. will lead to between 30 and 60 percent fewer R&D projects being undertaken. Reduced investments in pharmaceutical R&D consequently results in reduced numbers of new drugs becoming available to patients. A 2009 study in Health Affairs calculated that as a result of fewer innovative pharmaceuticals being developed, average American life expectancy in 2060 would be around 2 years lower than it would otherwise have been.

Over at STAT, Robert J. Easton, co-chairman of the medical business consultancy Bionest Partners, cogently explains:

If U.S. drug prices come under bureaucratic control, as they have in most of Europe and Japan, it will be a different story. Little pharmaceutical innovation occurs in price-control jurisdictions. The United States has always, by a large margin, led the world as a source of new drugs, and that lead has widened as Japan and Germany have imposed price controls over the past few decades. All major international pharmaceutical companies, without exception, have instituted R&D and commercial operations in the U.S. to take advantage of its pricing environment.

If price controls pressure the U.S. industry into a more conventional process industry model, like that of the chemical industry, pharmaceutical R&D budgets would be slashed.

We can hope that the president is actually signaling that his administration intends to rev up pharmaceutical price competition. The good news is that Scott Gottlieb, the new head of the Food and Drug Administration intends to increase competition that by hastening the approval of hundreds of generic drugs that have been stuck the agency’s approval pipeline. An FDA study has found that as the number of competing manufacturers for a drug goes up, the price falls dramatically. When two companies compete, the price falls an average of just 6 percent; when there are nine competitors, the price drops by an average of 80 percent.

If President Trump and Congress seek to “fix the injustice of high drug prices” by imposing price controls, Americans will save some money now, but at the long-run cost of living sicker and shorter lives. That would be a real injustice.

For more background, see my article, “President Trump: Pharmaceutical Price Controls Are A Bad Idea.”

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The Jeff Bezos Empire In One Giant Chart

With a fortune largely tied to his 78.9 million shares of Amazon, the net worth of Jeff Bezos continues to be on the rise.

In November, Bezos became only the 2nd man in history to amass a 12-figure net worth and has surpasses Bill Gates as the world’s richest man…

Visual Capitalist’s Jeff Desjardins previously showed how Bezos built Amazon from scratch, but, after making more headlines today along with Jamie Dimon and Warren Buffett, today’s infographic focuses on the extent and reach of Jeff Bezos and his Amazon Empire…

Courtesy of: Visual Capitalist

ALL STREAMS LEAD TO AMAZON

Jeff Bezos makes investments and acquisitions through multiple vehicles:

Amazon makes acquisitions and investments that relate to the company’s core business and future ambitions. This includes acquisitions of Whole Foods ($13.7 billion in 2017), Zappos.com ($1.2 billion in 2009), Twitch.tv ($970 million in 2014), and Kiva Systems ($780 million in 2012). It also includes investments in everything form failed dot-com company Kozmo.com (2000) to Twilio, which successfully IPO’d in 2016.

Bezos Expeditions manages Jeff Bezos’ venture capital investments. Over the years, this venture arm has put money into Twitter, Domo, Juno Therapeutics, Workday, General Fusion, Rethink Robotics, Business Insider, MakerBot, and Stack Overflow. More recent investments include GRAIL, a startup that recently raised over $900 million to cure cancer before it happens, as well as EverFi, an edtech startup.

Jeff Bezos also invests money on a personal level. He was an angel investor in Google in 1998, and has also put money in Uber and Airbnb. (Note: these last two companies are listed on the Bezos Expeditions website, but on Crunchbase they are listed as personal investments.)

Nash Holdings LLC is the private company owned by Bezos that bought The Washington Post for $250 million.

Bezos Family Foundation is run by Jeff Bezos’ parents, and is funded through Amazon stock. It focuses on early education, and has also made an investment in LightSail Education’s $11 million Series B round.

It’s also worth noting that Jeff Bezos is the founder of Blue Origin, an aerospace company that is competing with SpaceX in mankind’s final frontier.

EARLY GROCERY AMBITIONS

While the Whole Foods acquisition is the latest talking point for Amazon, it is certainly not the company’s first foray into the groceries business.

Interestingly enough, the company actually invested heavily in HomeGrocer.com in 1999, a company that delivered groceries from large warehouses to homes. Sales peaked at $1.5 million per day, but unfortunately HomeGrocer couldn’t make it through the Dot-com bust.

This postponed Amazon’s grocery ambitions, but it wouldn’t stop them.

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The “Dirty Game” To Fuel Ethnic Proxy War Across The Greater Middle East

Authored by James M. Dorsey via AlMasdar News,

Turkish allegations of Saudi, Emirati and Egyptian support for the outlawed Kurdish Workers Party (PKK) threatens to turn Turkey’s military offensive against Syrian Kurds aligned with the PKK into a regional imbroglio. The threat is magnified by Iranian assertions that low-intensity warfare is heating up in areas of the Islamic republic populated by ethnic minorities, including the Kurds in the northwest and the Baloch on the border with Pakistan.

Taken together, the two developments raise the specter of a potentially debilitating escalation of the rivalry between Saudi Arabia and Iran as well as an aggravation of the eight-month-old Gulf crisis that has pitted Saudi Arabia and its allies against Qatar, the latter which has forged close ties to Turkey.


Image via al-Masdar News.

The United Arab Emirates and Egypt rather than Saudi Arabia have taken the lead in criticizing Turkey’s incursion into Syria designed to remove US-backed Kurds from the border region and create a 30-kilometer deep buffer zone. UAE Minister of State for Foreign Affairs Anwar Gargash said the incursion by a non-Arab state signaled that Arab states would be marginalized if they failed to develop a national security strategy.

Notably Egypt, for its part, condemned the incursion as a “fresh violation of Syrian sovereignty” that was intended to “undermine the existing efforts for political solutions and counter-terrorism efforts in Syria.”

Despite Saudi silence, Yeni Safak, a newspaper closely aligned with President Recep Tayyip Erdogan’s ruling Justice and Development Party (AKP), charged that a $1 billion Saudi contribution to the reconstruction of Raqqa, the now Syrian Kurdish-controlled former capital of the Islamic State, was evidence of the kingdom’s involvement in what it termed a “dirty game.” Analysts suggest that Saudi Arabia may have opted to refrain from comment in the hope that it could exploit the fact that Iran, a main backer of Syrian president Bashar al-Assad, has refused to support the incursion.

Nevertheless, Saudi, UAE and Egyptian support for the Syrian Kurds would jive with suggestions that the Gulf states are looking at ways of undermining regimes in Tehran and Damascus by stirring unrest among their ethnic minorities.

Iran’s Intelligence Ministry, according to recent reports in state media, said it had recently seized two large caches of weapons and explosives in separate operations in Kurdish areas in the west of the country and a Baloch region on the eastern border with Pakistan. It said the Kurdish cache seized in the town of Marivan included bomb-making material, electronic detonators, and rocket propelled grenades while the one in the east contained two dozen remote-controlled bombs.

The ministry further accused Saudi Arabia of providing the weapons but offered no evidence to back up its claim. The ministry has blamed the kingdom for a number of weapons seizures in the past year. And Iran’s elite Revolutionary Guard  said earlier this month that it had captured explosives and suicide vests in the south-eastern province of Sistan and Baluchistan that had been smuggled in by a jihadist group that operates out of the neighboring Pakistan region of Balochistan. Separately, a Guard commander said that three Guards and three Islamic State militants had been killed in a clash in western Iran.

Saudi Arabia’s powerful crown prince, Mohammed bin Salman vowed last year that the battle between his kingdom and the Islamic republic would be fought “inside Iran, not in Saudi Arabia.” Former Saudi intelligence chief and ambassador to Britain and the United States, Prince Turki al-Faisal, told a rally of the Mujahedeen-e-Khalq (MEK), a controversial Iranian opposition group that “I, too, want the fall of the regime.”

At the same time a Saudi think tank, the Arabian Gulf Center for Iranian Studies (AGCIS), believed to be backed by Prince Mohammed, called in a study published last year for Saudi support for a low-level Baloch insurgency in Iran. In the study, published by the Riyadh-based the Arabian Gulf Centre for Iranian Studies, Mohammed Hassan Husseinbor, a Washington-based Baloch lawyer, researcher and activist, argued that the “Saudis could persuade Pakistan to soften its opposition to any potential Saudi support for the Iranian Baluch… The Arab-Baluch alliance is deeply rooted in the history of the Gulf region and their opposition to Persian domination.”

Pointing to the vast expanses of Iran’s Sistan and Baluchestan Province, Mr. Husseinbor went on to say that “it would be a formidable challenge, if not impossible, for the Iranian government to protect such long distances…in the face of widespread Baluch opposition, particularly if this opposition is supported by Iran’s regional adversaries and world powers.”


Iran’s minority politics. Source: John M. Olin Institute for Strategic Studies, Harvard University

Futhermore, Washington’s conservative Hudson Institute, which prides itself on the Trump administration having adopted many of its policy recommendations, last year organized a seminar which featured speakers that included Baloch, Iranian Arab, Iranian Kurdish and Iranian Azerbaijani nationalists.

And to top it all off Pakistani militants have claimed that Saudi Arabia had in the last year stepped up funding of militant madrassas or religious seminaries in Balochistan that allegedly serve as havens for anti-Iranian fighters.

The specter of ethnic proxy wars in Iran, Pakistan, and Syria threatens to further destabilize the greater Middle East and complicate Chinese plans to develop the Pakistani deep-sea port of Gwadar, a crown jewel of China’s Belt and Road initiative.

Fuelling ethnic tensions further risks Iran responding in kind. Saudi Arabia has long accused Iran of instigating low-level violence and protests in its predominantly Shiite oil-rich Eastern Province as well as in Bahrain.  It also risks aggravating war in Yemen, regionalizing the Turkish-Kurdish confrontation in Syria, and pushing the Middle East ever closer to the brink.

via RSS http://ift.tt/2ErKiaW Tyler Durden

One Million People Are Waiting To Trade Crypto With Robinhood

Robinhood Financial, the”fastest-growing online brokerage in history”, announced last week that it was getting into cryptocurrency trading. And since then, Bloomberg reports, more than one million people have put their names on the company’s waiting list in four days…

Digital currency trading will mark the first paid product for Robinhood, which became wildly popular among millennials by letting anyone buy and sell small amounts of stock without fees. The company said it’ll only charge for cryptocurrency transactions to recoup the costs associated with trading the assets and won’t take a commission.

Still, the total transaction costs will be lower compared with Coinbase’s 1.5% to 4% fees in the US. Robinhood is already allowing users track the price, news, and set up alerts on those and 14 other top crypto coins, including Litecoin and Ripple.

 

 

Robinhood Financial LLC said last week it plans to let its users buy and sell digital coins without fees starting in February. It’ll roll out the option gradually, with the intention of having it available to customers in most states by midyear.

 

dontsleep

That won’t be easy, as even the biggest exchanges are suffering from slow trading, rising transaction fees and other issues as demand for crypto has skyrocketed. Complaints about Coinbase Inc., one of the largest crypto exchanges instance, have surged recently as transaction times has soared and the company has frequently been forced to cut off trading and withdrawals when cryptocurrency prices are plunging. Stripe Inc., an online credit-card processor, recently said it would stop accepting bitcoin payments because of the rising fees.

According to Bloomberg, the extremely long waiting list for Robinhood crypto trading proves that consumer interest in the crypto craze isn’t slowing even after Bitcoin tumbled more than 50 percent from its mid-December record as regulators step up scrutiny. Not even one of the biggest thefts in crypto history could spoil the excitement.

That could bode well for the crypto market, which has suffered from lackluster performance since the start of the year following its best year on record.

via RSS http://ift.tt/2Gy8rNm Tyler Durden

President Trump’s State of the Union: No Poetry, but Full Text and Commentary

Tonight, President Donald Trump struggled to speak in poetry, a foreign language for a Queens-born-and-raised reality-TV star whose native tongue consists of one-liners and lapidary put-downs. Still, in the closing moments of this first State of the Union Address, he almost got there:

[Americans are a] people whose heroes live not only in the past, but all around us — defending hope, pride, and the American way.

They work in every trade. They sacrifice to raise a family. They care for our children at home. They defend our flag abroad. They are strong moms and brave kids. They are firefighters, police officers, border agents, medics, and Marines….

Americans fill the world with art and music. They push the bounds of science and discovery. And they forever remind us of what we should never forget: The people dreamed this country. The people built this country. And it is the people who are making America great again.

As long as we are proud of who we are, and what we are fighting for, there is nothing we cannot achieve.

What a sad and beggared vision of “who we are”: firemen, cops, border agents, soldiers. How many of us think of those categories first when we think of who we are, especially when invoking how American pop culture travels the world in a split-second? We’re rock-and-rollers, movie-makers, dreamers, entrepreneurs, and just regular people with a dream that rarely elevated law enforcement and the armed forces to defining attributes of who we are. That’s not to denigrate those professions, but for god’s sake, who among our grandparents escaped old Europe or the post-war developing world with the dream of coming to America and becoming a cop, a firemen, or a soldier? Such a conception marks Trump, whose only brush with such a life came when he was remanded to military school as an adolescent, as an authoritarian. In his personal life, he’s a libertine, thrice-married and never slow to brag on his fleshly conquests. Why does he the rest of us don’t yearn for the same types of things?

His State of the Union Address (full text below jump) exquisitely fulfilled the laundry-list expectations that have come to define this annual exercise. This is not meant as a criticism, but the best you can say about the speech is that it ticked off all the boxes he wanted to tick: The economy is pretty good, immigration needs to be ratcheted back, America needs to come first.

Trump has had a first year in office that has manifestly failed to destroy the country as his foes feared and he has pulled up short of transforming the nation as he promised. In short, Trump drives home what we all know in our heart of hearts but are afraid to admit aloud: We are still in a space that is betwixt and between the past and the future. He is not a new Caesar nor a mad Caligula. He is better than most of us expected and no worse than most of us feared. The critics who called his election an existential threat to democracy and representative government have been revealed as fools and his uncritical boosters have been unmasked as delusional.

As a country, we’re still waiting on what comes next, especially in terms of a government that mirrors the personalization, responsiveness, and innovation that we see in our commercial, work, and personal lives.

[Transcript of Trump’s State of the Union after jump.]

Full text of President Donald Trump’s 2018 State of the Union Address

TO THE CONGRESS OF THE UNITED STATES:

Mr. Speaker, Mr. Vice President, Members of Congress, the First Lady of the United States, and my fellow Americans:

Less than 1 year has passed since I first stood at this podium, in this majestic chamber, to speak on behalf of the American People — and to address their concerns, their hopes, and their dreams. That night, our new Administration had already taken swift action. A new tide of optimism was already sweeping across our land.

Each day since, we have gone forward with a clear vision and a righteous mission —— to make America great again for all Americans.

Over the last year, we have made incredible progress and achieved extraordinary success. We have faced challenges we expected, and others we could never have imagined. We have shared in the heights of victory and the pains of hardship. We endured floods and fires and storms. But through it all, we have seen the beauty of America’s soul, and the steel in America’s spine.

Each test has forged new American heroes to remind us who we are, and show us what we can be.

We saw the volunteers of the “Cajun Navy,” racing to the rescue with their fishing boats to save people in the aftermath of a devastating hurricane.

We saw strangers shielding strangers from a hail of gunfire on the Las Vegas strip.

We heard tales of Americans like Coast Guard Petty Officer Ashlee Leppert, who is here tonight in the gallery with Melania. Ashlee was aboard one of the first helicopters on the scene in Houston during Hurricane Harvey. Through 18 hours of wind and rain, Ashlee braved live power lines and deep water, to help save more than 40 lives. Thank you, Ashlee.

We heard about Americans like firefighter David Dahlberg. He is here with us too. David faced down walls of flame to rescue almost 60 children trapped at a California summer camp threatened by wildfires.

To everyone still recovering in Texas, Florida, Louisiana, Puerto Rico, the Virgin Islands, California, and everywhere else — we are with you, we love you, and we will pull through together.

Some trials over the past year touched this chamber very personally. With us tonight is one of the toughest people ever to serve in this House — a guy who took a bullet, almost died, and was back to work three and a half months later: the legend from Louisiana, Congressman Steve Scalise.

We are incredibly grateful for the heroic efforts of the Capitol Police Officers, the Alexandria Police, and the doctors, nurses, and paramedics who saved his life, and the lives of many others in this room.

In the aftermath of that terrible shooting, we came together, not as Republicans or Democrats, but as representatives of the people. But it is not enough to come together only in times of tragedy. Tonight, I call upon all of us to set aside our differences, to seek out common ground, and to summon the unity we need to deliver for the people we were elected to serve.

Over the last year, the world has seen what we always knew: that no people on Earth are so fearless, or daring, or determined as Americans. If there is a mountain, we climb it. If there is a frontier, we cross it. If there is a challenge, we tame it. If there is an opportunity, we seize it.

So let us begin tonight by recognizing that the state of our Union is strong because our people are strong.

And together, we are building a safe, strong, and proud America.

Since the election, we have created 2.4 million new jobs, including 200,000 new jobs in manufacturing alone. After years of wage stagnation, we are finally seeing rising wages.

Unemployment claims have hit a 45-year low. African-American unemployment stands at the lowest rate ever recorded, and Hispanic American unemployment has also reached the lowest levels in history.

Small business confidence is at an all-time high. The stock market has smashed one record after another, gaining $8 trillion in value. That is great news for Americans’ 401k, retirement, pension, and college savings accounts.

And just as I promised the American people from this podium 11 months ago, we enacted the biggest tax cuts and reforms in American history.

Our massive tax cuts provide tremendous relief for the middle class and small businesses.

To lower tax rates for hardworking Americans, we nearly doubled the standard deduction for everyone. Now, the first $24,000 earned by a married couple is completely tax-free. We also doubled the child tax credit.

A typical family of four making $75,000 will see their tax bill reduced by $2,000 — slashing their tax bill in half.

This April will be the last time you ever file under the old broken system — and millions of Americans will have more take-home pay starting next month.

We eliminated an especially cruel tax that fell mostly on Americans making less than $50,000 a year — forcing them to pay tremendous penalties simply because they could not afford government-ordered health plans. We repealed the core of disastrous Obamacare — the individual mandate is now gone.

We slashed the business tax rate from 35 percent all the way down to 21 percent, so American companies can compete and win against anyone in the world. These changes alone are estimated to increase average family income by more than $4,000.

Small businesses have also received a massive tax cut, and can now deduct 20 percent of their business income.

Here tonight are Steve Staub and Sandy Keplinger of Staub Manufacturing — a small business in Ohio. They have just finished the best year in their 20-year history. Because of tax reform, they are handing out raises, hiring an additional 14 people, and expanding into the building next door.

One of Staub’s employees, Corey Adams, is also with us tonight. Corey is an all-American worker. He supported himself through high school, lost his job during the 2008 recession, and was later hired by Staub, where he trained to become a welder. Like many hardworking Americans, Corey plans to invest his tax-cut raise into his new home and his two daughters’ education. Please join me in congratulating Corey.

Since we passed tax cuts, roughly 3 million workers have already gotten tax cut bonuses — many of them thousands of dollars per worker. Apple has just announced it plans to invest a total of $350 billion in America, and hire another 20,000 workers.

This is our new American moment. There has never been a better time to start living the American Dream.

So to every citizen watching at home tonight — no matter where you have been, or where you come from, this is your time. If you work hard, if you believe in yourself, if you believe in America, then you can dream anything, you can be anything, and together, we can achieve anything.

Tonight, I want to talk about what kind of future we are going to have, and what kind of Nation we are going to be. All of us, together, as one team, one people, and one American family.

We all share the same home, the same heart, the same destiny, and the same great American flag.

Together, we are rediscovering the American way.

In America, we know that faith and family, not government and bureaucracy, are the center of the American life. Our motto is “in God we trust.”

And we celebrate our police, our military, and our amazing veterans as heroes who deserve our total and unwavering support.

Here tonight is Preston Sharp, a 12-year-old boy from Redding, California, who noticed that veterans’ graves were not marked with flags on Veterans Day. He decided to change that, and started a movement that has now placed 40,000 flags at the graves of our great heroes. Preston: a job well done.

Young patriots like Preston teach all of us about our civic duty as Americans. Preston’s reverence for those who have served our Nation reminds us why we salute our flag, why we put our hands on our hearts for the pledge of allegiance, and why we proudly stand for the national anthem.

Americans love their country. And they deserve a Government that shows them the same love and loyalty in return.

For the last year we have sought to restore the bonds of trust between our citizens and their Government.

Working with the Senate, we are appointing judges who will interpret the Constitution as written, including a great new Supreme Court Justice, and more circuit court judges than any new administration in the history of our country.

We are defending our Second Amendment, and have taken historic actions to protect religious liberty.

And we are serving our brave veterans, including giving our veterans choice in their healthcare decisions. Last year, the Congress passed, and I signed, the landmark VA Accountability Act. Since its passage, my Administration has already removed more than 1,500 VA employees who failed to give our veterans the care they deserve — and we are hiring talented people who love our vets as much as we do.

I will not stop until our veterans are properly taken care of, which has been my promise to them from the very beginning of this great journey.

All Americans deserve accountability and respect — and that is what we are giving them. So tonight, I call on the Congress to empower every Cabinet Secretary with the authority to reward good workers — and to remove Federal employees who undermine the public trust or fail the American people.

In our drive to make Washington accountable, we have eliminated more regulations in our first year than any administration in history.

We have ended the war on American Energy — and we have ended the war on clean coal. We are now an exporter of energy to the world.

In Detroit, I halted Government mandates that crippled America’s autoworkers — so we can get the Motor City revving its engines once again.

Many car companies are now building and expanding plants in the United States — something we have not seen for decades. Chrysler is moving a major plant from Mexico to Michigan; Toyota and Mazda are opening up a plant in Alabama. Soon, plants will be opening up all over the country. This is all news Americans are unaccustomed to hearing — for many years, companies and jobs were only leaving us. But now they are coming back.

Exciting progress is happening every day.

To speed access to breakthrough cures and affordable generic drugs, last year the FDA approved more new and generic drugs and medical devices than ever before in our history.

We also believe that patients with terminal conditions should have access to experimental treatments that could potentially save their lives.

People who are terminally ill should not have to go from country to country to seek a cure — I want to give them a chance right here at home. It is time for the Congress to give these wonderful Americans the “right to try.”

One of my greatest priorities is to reduce the price of prescription drugs. In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.

America has also finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs, and our Nation’s wealth.

The era of economic surrender is over.

From now on, we expect trading relationships to be fair and to be reciprocal.

We will work to fix bad trade deals and negotiate new ones.

And we will protect American workers and American intellectual property, through strong enforcement of our trade rules.

As we rebuild our industries, it is also time to rebuild our crumbling infrastructure.

America is a nation of builders. We built the Empire State Building in just 1 year — is it not a disgrace that it can now take 10 years just to get a permit approved for a simple road?

I am asking both parties to come together to give us the safe, fast, reliable, and modern infrastructure our economy needs and our people deserve.

Tonight, I am calling on the Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need.

Every Federal dollar should be leveraged by partnering with State and local governments and, where appropriate, tapping into private sector investment — to permanently fix the infrastructure deficit.

Any bill must also streamline the permitting and approval process — getting it down to no more than two years, and perhaps even one.

Together, we can reclaim our building heritage. We will build gleaming new roads, bridges, highways, railways, and waterways across our land. And we will do it with American heart, American hands, and American grit.

We want every American to know the dignity of a hard day’s work. We want every child to be safe in their home at night. And we want every citizen to be proud of this land that we love.

We can lift our citizens from welfare to work, from dependence to independence, and from poverty to prosperity.

As tax cuts create new jobs, let us invest in workforce development and job training. Let us open great vocational schools so our future workers can learn a craft and realize their full potential. And let us support working families by supporting paid family leave.

As America regains its strength, this opportunity must be extended to all citizens. That is why this year we will embark on reforming our prisons to help former inmates who have served their time get a second chance.

Struggling communities, especially immigrant communities, will also be helped by immigration policies that focus on the best interests of American workers and American families.

For decades, open borders have allowed drugs and gangs to pour into our most vulnerable communities. They have allowed millions of low-wage workers to compete for jobs and wages against the poorest Americans. Most tragically, they have caused the loss of many innocent lives.

Here tonight are two fathers and two mothers: Evelyn Rodriguez, Freddy Cuevas, Elizabeth Alvarado, and Robert Mickens. Their two teenage daughters — Kayla Cuevas and Nisa Mickens — were close friends on Long Island. But in September 2016, on the eve of Nisa’s 16th Birthday, neither of them came home. These two precious girls were brutally murdered while walking together in their hometown. Six members of the savage gang MS-13 have been charged with Kayla and Nisa’s murders. Many of these gang members took advantage of glaring loopholes in our laws to enter the country as unaccompanied alien minors — and wound up in Kayla and Nisa’s high school.

Evelyn, Elizabeth, Freddy, and Robert: Tonight, everyone in this chamber is praying for you. Everyone in America is grieving for you. And 320 million hearts are breaking for you. We cannot imagine the depth of your sorrow, but we can make sure that other families never have to endure this pain.

Tonight, I am calling on the Congress to finally close the deadly loopholes that have allowed MS-13, and other criminals, to break into our country. We have proposed new legislation that will fix our immigration laws, and support our ICE and Border Patrol Agents, so that this cannot ever happen again.

The United States is a compassionate nation. We are proud that we do more than any other country to help the needy, the struggling, and the underprivileged all over the world. But as President of the United States, my highest loyalty, my greatest compassion, and my constant concern is for America’s children, America’s struggling workers, and America’s forgotten communities. I want our youth to grow up to achieve great things. I want our poor to have their chance to rise.

So tonight, I am extending an open hand to work with members of both parties — Democrats and Republicans — to protect our citizens of every background, color, religion, and creed. My duty, and the sacred duty of every elected official in this chamber, is to defend Americans — to protect their safety, their families, their communities, and their right to the American Dream. Because Americans are dreamers too.

Here tonight is one leader in the effort to defend our country: Homeland Security Investigations Special Agent Celestino Martinez — he goes by CJ. CJ served 15 years in the Air Force before becoming an ICE agent and spending the last 15 years fighting gang violence and getting dangerous criminals off our streets. At one point, MS-13 leaders ordered CJ’s murder. But he did not cave to threats or fear. Last May, he commanded an operation to track down gang members on Long Island. His team has arrested nearly 400, including more than 220 from MS-13.

CJ: Great work. Now let us get the Congress to send you some reinforcements.

Over the next few weeks, the House and Senate will be voting on an immigration reform package.

In recent months, my Administration has met extensively with both Democrats and Republicans to craft a bipartisan approach to immigration reform. Based on these discussions, we presented the Congress with a detailed proposal that should be supported by both parties as a fair compromise — one where nobody gets everything they want, but where our country gets the critical reforms it needs.

Here are the four pillars of our plan:

The first pillar of our framework generously offers a path to citizenship for 1.8 million illegal immigrants who were brought here by their parents at a young age — that covers almost three times more people than the previous administration. Under our plan, those who meet education and work requirements, and show good moral character, will be able to become full citizens of the United States.

The second pillar fully secures the border. That means building a wall on the Southern border, and it means hiring more heroes like CJ to keep our communities safe. Crucially, our plan closes the terrible loopholes exploited by criminals and terrorists to enter our country — and it finally ends the dangerous practice of “catch and release.”

The third pillar ends the visa lottery — a program that randomly hands out green cards without any regard for skill, merit, or the safety of our people. It is time to begin moving towards a merit-based immigration system — one that admits people who are skilled, who want to work, who will contribute to our society, and who will love and respect our country.

The fourth and final pillar protects the nuclear family by ending chain migration. Under the current broken system, a single immigrant can bring in virtually unlimited numbers of distant relatives. Under our plan, we focus on the immediate family by limiting sponsorships to spouses and minor children. This vital reform is necessary, not just for our economy, but for our security, and our future.

In recent weeks, two terrorist attacks in New York were made possible by the visa lottery and chain migration. In the age of terrorism, these programs present risks we can no longer afford.

It is time to reform these outdated immigration rules, and finally bring our immigration system into the 21st century.

These four pillars represent a down-the-middle compromise, and one that will create a safe, modern, and lawful immigration system.

For over 30 years, Washington has tried and failed to solve this problem. This Congress can be the one that finally makes it happen.

Most importantly, these four pillars will produce legislation that fulfills my ironclad pledge to only sign a bill that puts America first. So let us come together, set politics aside, and finally get the job done.

These reforms will also support our response to the terrible crisis of opioid and drug addiction.

In 2016, we lost 64,000 Americans to drug overdoses: 174 deaths per day. Seven per hour. We must get much tougher on drug dealers and pushers if we are going to succeed in stopping this scourge.

My Administration is committed to fighting the drug epidemic and helping get treatment for those in need. The struggle will be long and difficult — but, as Americans always do, we will prevail.

As we have seen tonight, the most difficult challenges bring out the best in America.

We see a vivid expression of this truth in the story of the Holets family of New Mexico. Ryan Holets is 27 years old, and an officer with the Albuquerque Police Department. He is here tonight with his wife Rebecca. Last year, Ryan was on duty when he saw a pregnant, homeless woman preparing to inject heroin. When Ryan told her she was going to harm her unborn child, she began to weep. She told him she did not know where to turn, but badly wanted a safe home for her baby.

In that moment, Ryan said he felt God speak to him: “You will do it — because you can.” He took out a picture of his wife and their four kids. Then, he went home to tell his wife Rebecca. In an instant, she agreed to adopt. The Holets named their new daughter Hope.

Ryan and Rebecca: You embody the goodness of our Nation. Thank you, and congratulations.

As we rebuild America’s strength and confidence at home, we are also restoring our strength and standing abroad.

Around the world, we face rogue regimes, terrorist groups, and rivals like China and Russia that challenge our interests, our economy, and our values. In confronting these dangers, we know that weakness is the surest path to conflict, and unmatched power is the surest means of our defense.

For this reason, I am asking the Congress to end the dangerous defense sequester and fully fund our great military.

As part of our defense, we must modernize and rebuild our nuclear arsenal, hopefully never having to use it, but making it so strong and powerful that it will deter any acts of aggression. Perhaps someday in the future there will be a magical moment when the countries of the world will get together to eliminate their nuclear weapons. Unfortunately, we are not there yet.

Last year, I also pledged that we would work with our allies to extinguish ISIS from the face of the Earth. One year later, I am proud to report that the coalition to defeat ISIS has liberated almost 100 percent of the territory once held by these killers in Iraq and Syria. But there is much more work to be done. We will continue our fight until ISIS is defeated.

Army Staff Sergeant Justin Peck is here tonight. Near Raqqa last November, Justin and his comrade, Chief Petty Officer Kenton Stacy, were on a mission to clear buildings that ISIS had rigged with explosives so that civilians could return to the city.

Clearing the second floor of a vital hospital, Kenton Stacy was severely wounded by an explosion. Immediately, Justin bounded into the booby-trapped building and found Kenton in bad shape. He applied pressure to the wound and inserted a tube to reopen an airway. He then performed CPR for 20 straight minutes during the ground transport and maintained artificial respiration through 2 hours of emergency surgery.

Kenton Stacy would have died if not for Justin’s selfless love for a fellow warrior. Tonight, Kenton is recovering in Texas. Raqqa is liberated. And Justin is wearing his new Bronze Star, with a “V” for “Valor.” Staff Sergeant Peck: All of America salutes you.

Terrorists who do things like place bombs in civilian hospitals are evil. When possible, we annihilate them. When necessary, we must be able to detain and question them. But we must be clear: Terrorists are not merely criminals. They are unlawful enemy combatants. And when captured overseas, they should be treated like the terrorists they are.

In the past, we have foolishly released hundreds of dangerous terrorists, only to meet them again on the battlefield — including the ISIS leader, al-Baghdadi.

So today, I am keeping another promise. I just signed an order directing Secretary Mattis to reexamine our military detention policy and to keep open the detention facilities at Guantánamo Bay.

I am also asking the Congress to ensure that, in the fight against ISIS and al-Qa’ida, we continue to have all necessary power to detain terrorists — wherever we chase them down.

Our warriors in Afghanistan also have new rules of engagement. Along with their heroic Afghan partners, our military is no longer undermined by artificial timelines, and we no longer tell our enemies our plans.

Last month, I also took an action endorsed unanimously by the Senate just months before: I recognized Jerusalem as the capital of Israel.

Shortly afterwards, dozens of countries voted in the United Nations General Assembly against America’s sovereign right to make this recognition. American taxpayers generously send those same countries billions of dollars in aid every year.

That is why, tonight, I am asking the Congress to pass legislation to help ensure American foreign-assistance dollars always serve American interests, and only go to America’s friends.

As we strengthen friendships around the world, we are also restoring clarity about our adversaries.

When the people of Iran rose up against the crimes of their corrupt dictatorship, I did not stay silent. America stands with the people of Iran in their courageous struggle for freedom.

I am asking the Congress to address the fundamental flaws in the terrible Iran nuclear deal.

My Administration has also imposed tough sanctions on the communist and socialist dictatorships in Cuba and Venezuela.

But no regime has oppressed its own citizens more totally or brutally than the cruel dictatorship in North Korea.

North Korea’s reckless pursuit of nuclear missiles could very soon threaten our homeland.

We are waging a campaign of maximum pressure to prevent that from happening.

Past experience has taught us that complacency and concessions only invite aggression and provocation. I will not repeat the mistakes of past administrations that got us into this dangerous position.

We need only look at the depraved character of the North Korean regime to understand the nature of the nuclear threat it could pose to America and our allies.

Otto Warmbier was a hardworking student at the University of Virginia. On his way to study abroad in Asia, Otto joined a tour to North Korea. At its conclusion, this wonderful young man was arrested and charged with crimes against the state. After a shameful trial, the dictatorship sentenced Otto to 15 years of hard labor, before returning him to America last June — horribly injured and on the verge of death. He passed away just days after his return.

Otto’s Parents, Fred and Cindy Warmbier, are with us tonight — along with Otto’s brother and sister, Austin and Greta. You are powerful witnesses to a menace that threatens our world, and your strength inspires us all. Tonight, we pledge to honor Otto’s memory with American resolve.

Finally, we are joined by one more witness to the ominous nature of this regime. His name is Mr. Ji Seong-ho.

In 1996, Seong-ho was a starving boy in North Korea. One day, he tried to steal coal from a railroad car to barter for a few scraps of food. In the process, he passed out on the train tracks, exhausted from hunger. He woke up as a train ran over his limbs. He then endured multiple amputations without anything to dull the pain. His brother and sister gave what little food they had to help him recover and ate dirt themselves — permanently stunting their own growth. Later, he was tortured by North Korean authorities after returning from a brief visit to China. His tormentors wanted to know if he had met any Christians. He had — and he resolved to be free.

Seong-ho traveled thousands of miles on crutches across China and Southeast Asia to freedom. Most of his family followed. His father was caught trying to escape, and was tortured to death.

Today he lives in Seoul, where he rescues other defectors, and broadcasts into North Korea what the regime fears the most — the truth.

Today he has a new leg, but Seong-ho, I understand you still keep those crutches as a reminder of how far you have come. Your great sacrifice is an inspiration to us all.

Seong-ho’s story is a testament to the yearning of every human soul to live in freedom.

It was that same yearning for freedom that nearly 250 years ago gave birth to a special place called America. It was a small cluster of colonies caught between a great ocean and a vast wilderness. But it was home to an incredible people with a revolutionary idea: that they could rule themselves. That they could chart their own destiny. And that, together, they could light up the world.

That is what our country has always been about. That is what Americans have always stood for, always strived for, and always done.

Atop the dome of this Capitol stands the Statue of Freedom. She stands tall and dignified among the monuments to our ancestors who fought and lived and died to protect her.

Monuments to Washington and Jefferson — to Lincoln and King.

Memorials to the heroes of Yorktown and Saratoga — to young Americans who shed their blood on the shores of Normandy, and the fields beyond. And others, who went down in the waters of the Pacific and the skies over Asia.

And freedom stands tall over one more monument: this one. This Capitol. This living monument to the American people.

A people whose heroes live not only in the past, but all around us — defending hope, pride, and the American way.

They work in every trade. They sacrifice to raise a family. They care for our children at home. They defend our flag abroad. They are strong moms and brave kids. They are firefighters, police officers, border agents, medics, and Marines.

But above all else, they are Americans. And this Capitol, this city, and this Nation, belong to them.

Our task is to respect them, to listen to them, to serve them, to protect them, and to always be worthy of them.

Americans fill the world with art and music. They push the bounds of science and discovery. And they forever remind us of what we should never forget: The people dreamed this country. The people built this country. And it is the people who are making America great again.

As long as we are proud of who we are, and what we are fighting for, there is nothing we cannot achieve.

As long as we have confidence in our values, faith in our citizens, and trust in our God, we will not fail.

Our families will thrive.

Our people will prosper.

And our Nation will forever be safe and strong and proud and mighty and free.

Thank you, and God bless America.

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