Month: March 2018

Salisbury Incident Report: Hard Evidence For Soft Minds

Via Oriental Review,

The UK government’s presentation on the Salisbury incident, which was repeatedly cited in recent days as an “ultimate proof” of Russia’s involvement into Skripal’s assassination attempt, was made public earlier today.

This 6-paged PDF is a powerful evidence of another intellectual low of British propaganda machine. Open it and you can tell that substantially it makes only two assertions on the Skripal case, and both are false:

First. Novichok is a group of agents developed only by Russia and not declared under the CWC” – a false statement. Novichok was originally developed in the USSR (Nukus Lab, today in Uzbekistan, site completely decommissioned according to the US-Uzbekistan agreement by 2002). One of its key developers,  Vil Mirzayanov, defected to the United States in 1990s, its chemical formula and technology were openly published in a number of chemical journals outside Russia. Former top-ranking British foreign service officer Craig Murray specifically noted this point on March 17:

Craig Murray

I have now been sent the vital information that in late 2016, Iranian scientists set out to study whether novichoks really could be produced from commercially available ingredients. Iran succeeded in synthesising a number of novichoks. Iran did this in full cooperation with the OPCW and immediately reported the results to the OPCW so they could be added to the chemical weapons database.

This makes complete nonsense of the Theresa May’s “of a type developed by Russia” line, used to parliament and the UN Security Council. This explains why Porton Down has refused to cave in to governmental pressure to say the nerve agent was Russian. If Iran can make a novichok, so can a significant number of states.

Second. “We are without doubt that Russia is responsible. No country bar Russia has combined capability, intent and motive. There is no plausible alternative explanation” – an outstading example of self-hypnosis. None of the previous items could even remotedly lead to this conclusion. The prominent British academician from the University of Kent Prof. Richard Sakwa has elaborated on this on March 23 the following way:

Rather than just the two possibilities outlined by Theresa May, in fact there are at least six, possibly seven. The first is that this was a state-sponsored, and possibly Putin-ordered, killing…  This version simply does not make sense, and until concrete evidence emerges, it should be discounted…

The second version is rather more plausible, that the authorities had lost control of its stocks of chemical weapons. In the early 1990s Russian facilities were notoriously lax, but since the 2000s strict control over stocks were re-imposed, until their final destruction in 2017. It is quite possible that some person or persons unknown secreted material, and then conducted some sort of vigilante operation…

Prof. Richard Sakwa

The third version is the exact opposite: some sort of anti-Putin action by those trying to force his policy choices…

The fourth version is similar, but this time the anti-Putinists are not home-grown but outsiders. Here the list of people who would allegedly benefit by discrediting Russia is a long one. If Novichok or its formula has proliferated, then it would not be that hard to organise some sort of false flag operation. The list of countries mentioned in social media in this respect is a long one. Obviously, Ukraine comes top of the list, not only because of motivation, but also because of possible access to the material, as a post-Soviet state with historical links to the Russian chemical weapons programme. Israel has a large chemical weapon inventory and is not a party to the OPCW; but it has no motivation for such an attack (unless some inadvertent leak occurred here). Another version is that the UK itself provoked the incident, as a way of elevating its status as a country ‘punching above its weight’. The British chemical weapons establishment, Porton Down, is only 12 kilometres from Salisbury. While superficially plausible, there is absolutely no evidence that this is a credible version, and should be discounted.

The fifth version is a rather more elaborate development of the previous point. There is circumstantial evidence, a version outlined by the Daily Telegraph, that Skripal may have had a hand in devising Christopher Steele’s ‘Trump Dossier’. The British agent who originally recruited Skripal, Pablo Miller, lives in Salisbury, and also has connections with Orbis International, Steele’s agency in London. In this version, Skripal is still working in one way or another with MI6, and fed stories to Steele, who then intervenes massively in US politics, effectively preventing the much-desired rapprochement between Trump and Putin. Deep anger at the malevolent results of the Steele and British intervention in international politics and US domestic affairs prompts a revenge killing, with the demonstration effect achieved by using such a bizarre assassination weapon.

The sixth version is the involvement of certain criminal elements, who for reasons best known to themselves were smuggling the material, and released it by accident. In this version, the Skripals are the accidental and not intended victims. There are various elaborations of this version, including the activities of anti-Putin mobsters. One may add a seventh version here, in which Islamic State or some other Islamist group seeks to provoke turmoil in Europe.

Do you wish to know our refutations of any other substantial “hard evidence” against Russia in the UK paper? Sorry, but that is all. The primitive information warriors in what used to be the heart of a brilliant empire, today are incapable of designing an even slightly plausible (they love this word, right?) document on a super-politicized case.

What follows is even more depressing. Slide 3 is dedicated to some sort of anatomy lesson:

Slide 4 seemingly represents a real “honey trap”. Just look at it:

The authors of this “report” mixed up a very strange cocktail of multitype allegations, none of which have ever been proven or recognized by any responsible entity (like legal court or dedicated official international organization). Of course we are not committed to argue on every cell, but taking e.g. “August 2008 Invasion of Georgia” we actually can’t understand why the EU-acknowledgedSaakashvili’s aggression against South Ossetia is exposed here as an example of “Russian malign activity”…

Have you totally lost your minds, ladies & gentlemen from the Downing Street?

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This American Metalworking Company Is Already Paying Up to 30 Percent More for Steel Thanks to Trump’s Tariffs

Less than a month after President Donald Trump announced new tariffs on imported steel and aluminum, the CEO of an Ohio-based manufacturing company says his business is already paying significantly higher prices for rolls of steel—and that he will have little choice but to pass those costs on to his customers.

Mike Schmitt, CEO of The Metalworking Group, tells Reason that prices for cold-rolled steel have jumped by 18 percent since January, while hot-rolled steel (a less-well-finished and less expensive product) has increased in price by 30 percent.

“The reality is that those are traumatic increases. They are shocks to our system,” Schmitt says. “This isn’t a level of price increase where you can say ‘oh, I’ll negotiate a little bit of it.’ You have to pass it on.”

The Metalworking Group operates in the middle of the supply chain, buying raw steel from suppliers and cutting, stamping, or machining it into components for a wide range of industrial uses. Schmitt says he has several different contracts with steel suppliers, with prices usually updated every three months to avoid the difficulty of adjusting every time the price of steel fluctuates. Major contracts signed in January are expiring at the end of the month, and his business will have to start paying the higher prices in April.

Steel prices fluctuate as supply and demand rise and fall, but Schmitt says the increases he’s facing this spring are well outside of the ordinary. In contracts his businesses signs, they usually agree to ignore increases or decreases of less than 5 percent, as a way of smoothing typical volatility in the commodities market.

Trump has pitched his tariffs as being in the best interest of national security. “If you don’t have steel, you don’t have a country,” he famously tweeted shortly before announcing the 25 percent import tax. He has downplayed the potential threat of starting a trade war (those are “good, and easy to win,” he announced on Twitter) with America’s top trading partners, and others in his administration, like Commerce Secretary Wilbur Ross, have downplayed the potential consequences tariffs have on American businesses that use steel.

But from Schmitt’s perspective, the tariffs are “punitive.” And while higher prices might help prop up American steelmakers, there are far more businesses like The Metalworking Group that consume steel, rather than make it. According to 2015 Census data, steel mills employed about 140,000 Americans and added about $36 billion to the economy that year, but steel-consuming industries employed more than 6.5 million Americans and added $1 trillion to the economy. In other words, for every steel-producing employee in the country who might benefit from Trump’s proposed tariffs, there are 46 employees whose companies may suffer serious economic distress.

Schmitt, 55, says The Metalworking Group has no immediate plans to lay off any of his 180 workers in response to the higher production costs, but the tariffs will create plenty of other headaches. Contracts have to be rewritten to account for higher prices, which might cause some of his company’s customers to look elsewhere for the parts they need. Already thin margins will get narrower. Investment and expansion will be put off.

The consequences will be felt across almost every sector of the economy, from agriculture to manufacturing, and could raise the price of everything from electricity to beer. According to a policy brief released by the Trade Partnership, a Washington-based pro-trade think tank, tariffs are projected to cause 146,000 net job losses—five jobs lost for every job gained. Even protectionist think tanks like the Coalition for a Prosperous America project a net decline in American jobs as a result of tariffs. The only point of disagreement seems to be how bad things will get.

“The uncertainty is whats troubling,” says Schmitt, who has served as CEO of the company since 2000. “In a typical year, I’d be looking at maybe buying more equipment or investing in the business. And now I don’t know what things are going to look like six months from now. It puts a chilling effect on the investment level.”

Investors on Wall Street seem similarly shook. Global stock market have responded negatively to each new tariff announcement—most recently, the Trump administration’s outlining of plans to put $60 billion of additional tariffs on Chinese-made electronics, furniture, and other goods. Those tariffs are a serious policy blunder motivated by Trump’s protectionist politics, says Stephen Roach, an economist and professor at Yale. “There’s not really a great appreciation of economic policy analysis in the Trump administration,” Roach said during an appearance on Bloomberg this week.

If he could talk to the president or the White House’s top economic advisors, Schmitt says he would tell them that tariffs have the potential to undo the gains created by tax reform. While changes to the corporate tax system have encouraged investment and hiring, the steel and aluminum tariffs “flies in the face” of those positive developments.

He’d also ask the president why he’s determined to repeat history. After all, the consequences of tariffs are not unknown. When George W. Bush imposed tariffs ranging from eight percent to 30 percent on imported steel, the higher costs dealt a $4 billion hit to the economy and led to 200,000 job losses, according to an analysis by the U.S. International Trade Commission. Bush’s former chief of staff has warned the Trump administration against pursuing the same course.

Schmitt says his business, like plenty of others, is still factoring in the price increases. It will take months for all the consequences to be seen.

“No matter what happens, it’s going to be a downward pressure on the amount of product that you sell,” Schmitt says. “When you raise prices, people buy less. You can’t get around that.”

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Trump Says Syria Withdrawal Coming ‘Soon’, Weed ‘Beer’ Promises Buzz With No Alcohol, California May Slap Cancer Warning on Coffee: Reason Roundup

“We’ll be coming out of Syria very soon.” President Trump delivered a speech yesterday that was supposedly about infrastructure. But it was also rife with interludes about things ranging from trade policy to Roseanne to—”in what seemed like an impromptu aside,” notes Vox’s Jen Kirby—a seemingly major announcement about U.S. foreign policy.

“We’ll be coming out of Syria very soon,” said Trump to a crowd gathered outside Cleveland, Ohio.

Let the other people take care of it now. Very soon. Very soon, we’re coming out. We are going to have 100 percent of the caliphate as they call it, sometimes referred to as land—we are taking it all back quickly [and] … we’re going to get back to our country.

In February, the Pentagon said we could have some troops present in Syria “indefinitely” as this was a necessity to hold off ISIS.

During his Ohio speech yesterday, Trump also…

  • stuck up for his steel and aluminum tariffs (“We are not letting other countries take advantage of us”).
  • suggested he would stall a trade agreement with South Korea until after meeting with Kim Jong Un (because this would be “a very strong card, and I want to make sure everyone is treated fairly, and we are moving along nicely with North Korea”).
  • suggested Democrats might like drug smugglers (they want “people to come in from the border. They want, I guess, want—I can’t imagine they want—but certainly drugs are flowing across borders”)
  • took some credit for the Roseanne reboot’s massive ratings (“they were unbelievable, over 18 million people, and it was about us”).
  • said he didn’t understand the term community college: ”Call it vocational and technical. People know what that means. They don’t know what a community college means.”

Eventually, the president did get to the stated topic of his speech, infrastructure. “We will transform our roads and bridges from a source of endless frustration into a source of incredible pride,” Trump told the crowd. He said he plans to propose $200 billion in federal funds to go to a a $1.5 trillion infrastructure plan co-funded by states.

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California could compel dubious warning from coffee companies. There’s a large body of recent research suggesting coffee consumption has health benefits, including protection against many cancers. California, naturally, could start requiring coffee sellers to warn that their products may cause cancer—thereby compelling at best misleading or unproven speech and possibly requiring these businesses to actively misinform customers.

This comes via a new ruling in a case filed against Starbucks, Peets, and other coffee chains operating in California. The suit claimed—and Superior Court Judge Elihu Berle preliminarily agreed—that these companies are breaking California’s law requiring places with at least 10 employees to disclose carcinogens, since coffee contains acrylamide as a result of the roasting process.

“Berle’s ruling is tentative, but is unlikely to be reversed,” reports The Washington Post. “The third phase of the trial will determine the civil penalties that coffee companies are liable for.” In another recent article, the Post pointed out that acrylamide can “also can be found in french fries, potato chips, bread and other grain products, but:

The scientific evidence linking acrylamide to cancer in humans is scant. According to the American Cancer Society, studies have found that acrylamide increases the risk of cancer in rats and mice when the chemical is placed in the animals’ drinking water at doses “1,000 to 10,000 times higher than the levels people might be exposed to in foods.”

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Marijuana “beer” coming soon to Colorado. The person behind Blue Moon is launching a line of marijuana-infused nonalcoholic drinks designed to mimic the effect of beer. “The drinks, served chilled and initially only available in Colorado this fall… will ‘hit’ the user at the same pace as if they were drinking a beer,” reports USA Today.

“This is really about brewing great beers that beer drinkers love,” said Keith Villa, who developed Blue Moon Belgian Wheat and worked for MillerCoors for 32 years. “You’d just swap out an alcoholic beer for one of our beers.”

Several other companies offer cannabis beer, but they all lack the psychoactive compound, THC. Instead, they’re infused with hemp extract to give them a marijuana taste—and helps them grab headlines.

Since these products contain alcohol, they’re prohibited under federal law from being brewed with marijuana. But Villa’s “beer” gets around this since it’s nonalcoholic.

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Israeli Troops Kill Seven Gazans, Wound 500 Amid Massive Border Protests

Deadly clashes broke out on Friday afternoon along the Israeli-Gaza border after Israeli security forces killed at least seven Palestinians and injured up to 500, where as previewed yesterday, a series of massive protests took place along the security fence surrounding the Hamas-controlled Gaza strip.

Thousands had gathered along the border for a six week-long “Great Return” protest when the violence broke out. IDF troops fired live rounds, rubber-coated steel pellets and tear gas at the protesters during the ongoing violence.

A photo taken near the kibbutz of Nahal Oz across the border from the Gaza strip shows tear gas grenades falling during the Palestinian protest, with Israeli soldiers seen below in the foreground.

The first protest kicked off on Friday, when Palestinians worldwide mark Land Day, which commemorates the Israeli government’s expropriation of Arab-owned land in the Galilee on March 30, 1976, and ensuing demonstrations in which six Arab Israelis were killed.

Palestinians protest along the Israel border with Gaza on Friday

The Israel Defense Forces estimated that 17,000 Palestinians were taking part in the demonstrations, and focused at five main protest sites where rioters reportedly threw petrol bombs and stones at troops, and burned tires.

The Israeli military said that its troops had used “riot dispersal means and firing towards main instigators” and that some of the demonstrators were “rolling burning tires and hurling stones” and Molotov cocktails and rocks at IDF troops on the other side of the border. The military maintained that it would not allow Palestinian protesters to “violate Israel’s sovereignty” by crossing the security fence.

One of the dead was aged 16 and most of the casualties were struck by gunfire, according to Palestinian medics who estimated the number of wounded at around 500 by mid-afternoon.

“We have deployed more than 100 sharpshooters, who were called up from all of the military’s units, primarily from the special forces,” Chief of Staff Gadi Eisenkot said, Ynet news reports. “If lives are in jeopardy, there is permission to open fire.”

In a statement reported by Israeli Kan TV, the army said organizers of the protests were deliberately trying to place civilians in harm’s way, and cited an incident in which it said a seven-year-old girl was sent to the security fence in an apparent cynical attempt to draw Israeli fire, but was spotted by troops who realized what was happening and ensured she was not hurt.

Meanwhile, a Hamas official warned that there will be a reaction to any Israeli provocations.

“We don’t want to see a bloodbath. Just a quiet protest,” he said to Israel Hayom, warning that “if there are Israeli provocations and if Israel deliberately harms protesters or our people we will mount a harsh response.” Hamas had said that as many as 100,000 Palestinians will take part in Friday’s massive demonstration.

The protest also coincides with the week-long Jewish holiday of Passover, which regularly leads to increased tensions in the already-volatile region.

Photo source: Ibraheem Abu Mustafa

The six week-long demonstrations are calling for the right of return for Palestinian refugees to what is now Israel. The protests are set to culminate in May as Israel celebrates the 70th anniversary of its independence, which Palestinians call Nakba (castastrophe) day.

The IDF declared the area around the Israeli side of the Gaza border a “closed military zone,” forbidding Israeli civilians from getting close without army permission. According to the Times of Israel, IDF Chief of Staff Gadi Eisenkot was leading the army’s riot control operation, with assistance from the head of the Southern Command Maj. Gen. Eyal Zamir, the head of IDF Operations Maj. Gen. Nitzan Alon, and Israel’s military liaison to the Palestinians, Maj. Gen. Yoav Mordechai.

The army said it held the Hamas terror group responsible for any violence along the Gaza security fence during the protests and for the “consequences” of it.

Israel’s Defense Minister Avigdor Liberman warned on Friday that any Palestinians from Gaza approaching the security fence with Israel were putting their lives at risk. “Those who approach the fence today are putting themselves in danger,” Liberman said in his post. “I would advise [Gazans] to go on with your lives and not engage in provocations.”

* * *

Friday’s demonstrations mark the beginning of the Palestinians’ return to all of Palestine, Hamas leader Ismail Haniyeh declared in a speech at the scene of the mass protests in the Gaza Strip.

“We are here to declare today that our people will not agree to keep the right of return only as a slogan,” he said and added that the March of Return was also aimed at sending a message to US President Donald Trump to the effect that the Palestinians will not give up their right to Jerusalem and “Palestine.”

Previously Palestinians have also demanded, along with sovereignty in the West Bank, Gaza, East Jerusalem and the Old City, a “right of return” to Israel for Palestinian refugees who left or were forced out of Israel when it was established. The Palestinians demand this right not only for those of the hundreds of thousands of refugees who are still alive — a figure estimated in the low tens of thousands — but also for their descendants, who number in the millions.

Khaled al-Batsh, the leader of the Iran-backed Islamic Jihad group, which is also among the planners of the protest, said tents would be located 500 meters from the border, just outside the buffer zone between Gaza and Israel. The protest comes amid rising tensions as the United States prepares to move its embassy in Israel to Jerusalem.

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Into The Abyss: Worst Case Scenario Entry Points

Authored by Nicholas Colas via DataTrekResearch.com,

We don’t look at technicals much in these notes, but we do admire what good technicians offer: a clear sense of where to buy and sell. Their assessments are generally quite precise: buy a stock when it gets to $50.33, but sell if it breaks $47.10. There is simply no direct analog in the squishy world of fundamental analysis.

Today we will, however, take a page from the chartists’ pinpoint process to answer one question: where do you back up the truck on US large cap stocks? There’s no sense in denying the obvious – US equity markets feel shaky. Some of this may just be quarter-end positioning, but we’re also about to walk into the most anticipated/hyped earnings season since the Financial Crisis. So it makes sense to plan, if only to understand the downside through the lens of preparation rather than the rear view mirror of regret.

Here are three scenarios to consider:

Scenario #1: a short (1-5 day) serious drop in US stock prices akin to 1987’s Black Monday. That may sound scary, but it shouldn’t:

  • The S&P 500 posted a total return of 5.8% in 1987 and ended the year 9.8% above the close on October 19th.

  • If you swore off US stocks for the following 5 years, you missed the next double (yes, double) in the S&P 500.

So what was the valuation on the S&P 500 on the close of Black Monday, and what would an equivalent number look like today? Here’s the math:

  • At the close on October 19th 1987 the S&P 500 traded for 9.3x the following year’s earnings (224 index close, $24.12 in 1988 earnings).

  • Keep in mind that 10-year Treasuries yielded 8.9% in October 1987, so PEs plus Treasuries equaled 18.2. That’s close enough to the old trader’s “Rule of 20” for this math to make sense, in other words.

  • Using the same calculation on today’s S&P 500 yields a target “disaster” PE of 15.4x forward earnings (18.2 minus the current 10 Year yield of 2.8%).

  • The current consensus earnings estimate for the S&P 500 is $158/share. We will be conservative and haircut that by 10%, down to $142/share.

The conclusion: Put the numbers together and you get a “1987-style low” of 2187 on the S&P 500, or 16.0% below current levels and roughly 25% below the all time highs from earlier this year. Not great, but hardly awful either.

Scenario #2: we can do a similar exercise with long-term valuation measures like the Shiller Cyclically Adjusted Price Earnings ratio, or CAPE.This approach has gotten a lot of press lately thanks to a recent Research Affiliates paper. The basics are simple enough: the S&P should trade for some multiple of average earnings over the prior 10 years, essentially a measure of corporate earnings power through a cycle.

The most likely scenario where the CAPE multiple becomes relevant is a slow motion train wreck for US stocks – something akin to a “Sloth market” (i.e. a slow moving furry intruder rather than a speedy bear) that takes 12-18 months to play out. We don’t even need higher interest rates to see that happen – just a creeping move out of equities from a mindset change among investors. Not likely, but we’re deep in the 100 acre “what if” woods anyway….

Here’s the CAPE math and S&P downside target:

  • The mean Shiller PE going back to the 1880s is 16.8x earnings.

  • The current multiple is 31.4x, which includes the Financial Crisis when S&P earnings went to zero in Q4 2008 and therefore troughed at $40/share on an annualized basis.

  • Average S&P 500 annual earnings from 2009 to 2017 are $98/share on an operating basis. That includes almost all the aftermath of the Financial Crisis and the Great Recession that followed. It is, therefore, a reasonable estimate of long-term earnings power.

The upshot here (and its not pretty): an S&P 500 at 1646 ($98/share times 16.8x). This amounts to a decline of 36.8% from today’s close. If it is any solace, the last time the index was at these levels was September 2013. We’d be giving up several years of gains, but at least the S&P 500 would still be above the old 1500 double top of 2000 and 2007.

Scenario #3: in between the 1987 case study (a bolt out of the blue) and the CAPE revaluation (death by 1000 cuts), we have a catalyst-driven price reset: the need to discount a near term recession, caused by reason or reasons as yet unknown. This one feels the most logical right now, if only because the US Treasury yield curve continues to flatten. This may spook investors into thinking an economic slowdown is at hand, even if one never appears. The old saw that “stock markets have predicted 9 of the last 5 recessions” is valid – and those 4 other times are serious buying opportunities.

The math for discounting a recession in the next 12-18 months into the S&P 500:

  • Garden-variety recessions hit corporate earnings by an average of 20-30% from prior peak to trough. We’re leaving out the 2008 experience from that math.

  • Current estimates call for S&P 500 earnings of $158/share. Worth noting: without tax reform, those would be more like $146/share.

  • If recession fears mount, markets will start to discount earnings of $111 – $126/share, or 20-30% current recession-free expectations based on earnings performance in prior cycles.

Assuming the equity market’s current 16.0x forward multiple remain the same (rather than expand due to lower interest rates), this implies an S&P 500 fair value of 1776 to 2106 with a mid point of 1,941. That is 25% below today’s close. If you want to give some credit for higher recessionary earnings multiples, perhaps 17x is fair. In that case, the S&P 500 would trade for 2023 (23% below today’s close).

We should emphasize that none of these scenarios are anything close to our base case. The purpose of this exercise is to consider what levels on the S&P 500 correspond to historically valid and profitable entry points. To sum up our levels:

  • Market crash scenario: buy the S&P at 2187, down 16% from today.

  • Protracted bear/revaluation market: buy the S&P at 1646, down 37% from today.

  • Recession scare: buy the S&P anywhere from 1776 to 2023, down 22-32% from today.

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Crypto Carnage Continues – Bitcoin Back Below $7,000, Ether Under $400

Despite a brief bounce overnight, cryptos are sliding once again with Bitcoin below $7,000; Ethereum below $400; and Ripple back below 50c.

“It’s a sea of red,” said one seasoned crypto-trader, adding after a stoic pause, “again!”

Amid the worst month for tech stocks in years, cryptos are in freefall…

 

Bitcoin is back below $7,000…

 

Heading towards its early Feb lows…

 

As CoinTelegraph notes, the overall market slump could be attribued to both Twitter’s recent announcment that would ban crypto-related ads, following on the heels of similar announcements from Google and Facebook, or Mailchimp’s apparent closure of crypto-related accounts.

In response to the social media ad bans, crypto and Blockchain associations in Russia, South Korea, and China have created a joint assocation in order to sue the social media giants, including Yandex, referring to the bans as “market manipulation” by “monolopies.”

Regulatory crackdowns on crypto could also be compounding the market’s downward trend, as two Japanese exhanges this week have decided to close instead of working with regulators for compliance.

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Kurt Loder Reviews Ready Player One: New at Reason

Congratulations on having once watched Akira and Iron Giant and Back to the Future. High fives to everybody who remembers those Tears for Fears and Twisted Sister tracks. And big thumbs up to everyone who recognizes the name Zemeckis, and can spot a Beetlejuice suit, and who knows where Faber College is located (in Animal House). Have we got a movie for you.

I don’t mean to be snotty. Fandom is fun, and probably all of us have staked out little swaths of pop-culture history for the enjoyment of ourselves and our fellow cultists. But it’s hard not to be a little annoyed by a picture that seeks to salute its audience for something as passive as pop-culture consumption—as if the accrual of vintage minutia were some sort of achievement, writes Kurt Loder.

View this article.

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Turkey Breaks With NATO, Refuses To Expel Russians

Authored by Jim Carey via GeopoliticsAlert.com,

Following the alleged March 4th alleged Russian poisoning of Sergei Skripal, an ex-double agent in the UK, several European countries and the US have begun ejecting Russian diplomats from their countries. With both the UK and US each ejecting dozens of diplomats, it stands to reason that every other NATO country would follow suit.

Infographic: Spy Poisoning: Where Russian Diplomats Were Expelled | Statista

You will find more infographics at Statista

However, several European Union members have yet to follow London’s lead. One important NATO country isn’t bowing to western Russophobia: Turkey.

Despite calls from the UK for all of their allies to stand with them in “punishing Russia” they have failed to convince many of their fellow EU members, Israel, and Turkey to follow their suggestions. While there isn’t much London can do to their fellow European states, and obviously, they can’t criticize Israel; tension between Turkey and the EU has reached a point where it’s fashionable to demonize Ankara.

Both the US and UK often pander to Turkey due to the country’s strategic location and their control of the second largest military in NATO. This, however, has become much more difficult in recent months due to the increasingly authoritarian governance of the country leading to arrests of western employees, global kidnappings, and blatant defiance of international law.

This tense relationship between Turkey and the EU was on full display yesterday as Turkish President Recep Erdogan met with EU leaders about his nation’s prospects of joining the bloc. Predictably, no new results were achieved between Brussels and Ankara. This allows Erdogan to go back to turkey and play the victim, likely in anticipation of this announcement on Russia, which he will probably frame as ‘retaliation.’

Tensions between NATO and Turkey have also increased following the recent decision by Ankara to purchase Russian-made S-400 anti-air missile systems rather than the US Patriot missiles. According to Turkey the decision for this purchase was due to the vast amount of red tape around the purchase of the Patriot systems (although, they may have dodged a bullet as the Patriots have recently shown to be ineffective).

The Turks have also found themselves quarreling with the US over their support for the Kurds in northern Syria. According to Ankara (and some high level US officials) the Syrian Kurdish group’s armed by the US have very public connections to the terrorist group, the Kurdistan Workers Party (PKK).

Combine all these factors and it shouldn’t be surprising to hear the Turkish Deputy Prime Minister, Bekir Bozdag announce that “Turkey isn’t considering taking any decisions against Russia.” According to Bozdag, the current crises in US-Turkish relations is a large factor in their decision not to alienate Moscow at a time when “there is a positive and good relationship between Turkey and Russia.”

While nobody can be sure what to believe coming from the Turks, Erdogan also confirmed the decision to not retaliate against Russia although he “condemns what happened in the UK and regards the use of chemical weapons as a crime against humanity.”

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Theresa May Reportedly Considering Ban On Russian Sovereign Debt Sales

Echoing the Treasury Department’s decision to prohibit trading in Venezuelan “hunger bonds” in US markets, UK Prime Minister Theresa May is mulling whether to throw her support behind a measure that would ban the sale of Russian sovereign debt in City of London financial markets.

And just like with Venezuela, such a short-sighted prohibition wouldn’t make it any more difficult for Russia to sell its sovereign debt. Rather, Russia would be forced to turn to China to compensate for the shortfall, according to the Guardian.

May’s decision to look into the ban comes at the behest of Foreign Affairs Select Committee Chairman Tom Tugendhat, who has repeatedly urged May to do more to punish Russia for allegedly masterminding the poisoning of former Russian spy Sergei Skripal and his daughter Yulia with novichok – a Soviet-era nerve agent. Most recently, the tensions between the UK and Russia have precipitated a round of diplomatic expulsions, with more than two dozen countries expelling at least some Russia diplomats.

City

EU and US sanctions against Russia didn’t prohibit the bond sales because of a loophole that effectively set up Russian bank VTB as the main liaison between the Russian state and western financial markets. Now, Tugendhat and several of his allies in Parliament are calling for the loophole to be closed – on both sides of the Atlantic. Tugendhat has spoken about the loophole at least three times in the past week.

The denunciations come as Tugendhat’s committee is beginning an investigation into how the UK enables allies of Russian President Vladimir Putin to store and spend their money in the UK.

Tugendhat has proposed that Russian bond sales are no longer made available to key western clearing houses such as Euroclear and Clearstream, making them effectively untradeable on the secondary market and so deterring the majority of EU and US investors from buying them.

Last month’s sale was specifically skewed to make it attractive for Russian citizens living overseas to repatriate their money to Russia, a long-term goal of Putin.

According to Tugendhat and several of his advisors, cutting off Russia’s access to Western markets would be the best way to undermine Putin’s regime, per the Guardian.

Tugendhat has been briefed by a British research fellow at the Harvard Society of Fellows, Emile Simpson, who has argued Russia’s greatest weakness is its dependence on western investors. He contends a policy blindness leads the west to sanction individuals, and sometimes sectors, but not to look at sanctioning the Russian state as a whole.

He said: “At present, Russia can borrow in EU and US capital markets despite western sanctions and then can support the sanctioned Kremlin-linked banks and energy companies that can no longer do so”.

Tugendhat alleges that the bond sales are one way wealthy Russians can move their money back to Russia.

Urging the foreign secretary to look at the issue, Tugendhat said: “One of the ways that people are getting their money out of this country is by allowing Russian sovereign debt to be sold in the UK, and that debt to be used to reimburse Russians, in a way, to bring back their money onshore, in Moscow terms. As that gold is moving towards Moscow, we are, quite extraordinarily, enabling those bond auctions, those debt auctions.”

Of course, thanks to Russia’s relatively low public debt levels ($122 billion in domestic debt and nearly $40 billion in Eurobonds) and its growing economy, there will likely be no shortage of buyers for Russian debt.

Three

 

Recently, Russia has bragged about the strong demand for its recent auctions (as is evident by the rise in bid-to-cover sen above), saying it might take advantage of low interest rates and offer more Eurobonds thanks to interest from German investors.

Certainly, any economic stress that US sanctions are supposed to putting in Russia are not showing in its sovereign credit risk…

Two

And while sanctions could have an immediate impact, it wouldn’t take Russia long to source new investors in mainland China.

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Location, Location, And Nerve Agents

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

I am gullible. Very. I betcha I am more gullible than you. And that tells you something, because you know how gullible you are. Or so you think.

Still, as bad as I got it, something physically snapped in the back of my head this morning, I could hear it snap, when I saw this Guardian headline:

Skripals Poisoned From Front Door Of Salisbury Home, Police Say

Detectives investigating the attempted murders of Russian double agent Sergei Skripal and his daughter Yulia Skripal have said they believe the pair were poisoned with a nerve agent at the front door of his Salisbury home. Specialists investigating the poisoning of the the Skripals have found the highest concentration of the nerve agent on the front door at the address, police said. Counter-terrorism detectives will continue to focus their inquiries on the home address for the coming weeks, and possibly months…

See, because of my gullibility, I’ve decided that if I’m to have any idea of what really goes on around me, I’m condemned to reading a lot.

Obviously, like you, I’ve found that the vast majority of what passes for news is as fake as it gets. More so by the day. So we have to read between the lines all the time. It’s what it is. But this…

If these two people have actually been poisoned, that’s a really terrible thing. But maybe lying about such things is much worse. And I doubt that anything at all we’ve been told about the Skripal case is true. Not because I don’t want to believe it, but because the storytellers plant so many trees they’re getting lost in their own forest.

Today the British press reports that the Skripal father and daughter pair were poisoned “from their front door”. They do that with the same level of certainty that just a few days ago they used in telling us they were poisoned through the air vents of the dad’s BMW. Exact same story, just a different location. And that’s after a by now long sequence of headlines that claimed it had happened inside the home, or in a bar, a pizzeria, or on the parkbench they were ostensibly ‘found’ on.

What that headline above, and all others on the topic that came before it, tells me is that evidently the hundreds of ‘experts’ involved in the case have not yet been able to locate the ‘nerve agent’. They’re still just guessing, even 25 days after the incident is supposed to have happened. How would that be done? I have no idea, but I’m surely thinking that after almost 4 weeks it’s essentially a pure guessing game, and nothing more than that.

Does the alleged nerve agent leave traces after all that time? I don’t have a clue, but I do know from what I’ve read that it’s apparently so toxic (as in lethal) that even very faint traces of the stuff are, well, lethal. So when I first read the BMW air vent theory last week I was thinking: did the guy who towed that car to the police station wear a full hazmat suit? He would have had to if he’s still alive.

And where is that car anyway? Come to think of it, where are the Skripals? And how is it possible that they survived the ‘attack’? Were they given a full blood transfusion? Are they being treated 24/7 by dedicated personnel in hazmat suits? There are too many questions for me to answer. And that goes for you too. And for Boris Johnson. And Donald Trump. And the governments of the 30-or-so nations that nevertheless expelled well over a hundred Russian diplomats.

Now, I’m not a chemist, let alone an organic chemist. So perhaps I should consult with my friend Dave Collum, who is. But I was going to write this from memory, not go back and find all those headlines, or ask around. This is not about me being 100% correct, it’s about the ‘news reports’ being so far off the truth.

Here’s what I have picked up about the nerve agent. The press calls it “Novichok“ (Russian for newbies), but Novichok is not a nerve agent, it’s a group of them. In the Skripal case, the journalists -who I can only hope are not as gullible as I am- behind all the ‘news’ have been told by ‘authorities’ that we’re dealing with A-234, which is a novichok nerve agent.

Developed by Russia a long time ago, but no longer produced in Russia after 1993, as the 2013 Nobel Peace Prize winning Organisation for the Prohibition of Chemical Weapons (OPCW) has confirmed. Its chemical formula has been made public, which means that at least in theory anyone could produce it.

Russia would seem to be the last country to try that, because it would point straight to them. And they haven’t stood still for 25 years, they can make Novichok 2.0 if they want. Not that they appear to have much if any reason to poison the Skripals, there are quite a few parties that have at least as much incentive to do that.

Wait, before I forget, there was a policeman who allegedly ‘treated’ the Skripals first, and was himself ‘poisoned’ in the act and hospitalized, but was released a few days ago. What exactly happened to him? How did the A-234 not kill him? Did he receive such a faint trace that he was ‘cleaned’ within days? Where is he now? Why has he not released any statement? Doesn’t he strike you, too, as being a little bit pregnant?

But, again, I’m not a chemist. Collum, who I can’t really claim as a friend anymore, because he’s everybody’s friend these days, tweets a hint:

Hey organic chemists: the Novichuk nerve agents are like those below. [..] You could just use the racemate with plenty of effect. Unlike drugs, the goal here is to kill the recipient.

From what I understand, A-234, like all novichoks, is just a pesticide with a fancy dress on. Not terribly unique or special, and not terribly Russian after 25 years either. Just terribly lethal. Which by the way is saying something about how we produce our food, too. Can we blame Putin for losing our insects as well, please? It’s so much easier that way.

But I digress. As I started out saying, it’s the ‘news’ that yet another ‘location’ for the ‘nerve agent’ had been discovered after 25 days and hundreds of specialists, at the bleeping front door of the ‘victims’ home, as if nobody ever thought of looking there, that snapped that thingy in my head. Location, location, location.

Still, when I venture beyond what can be or has been proven, which is about as near to zero Kelvin as I even want to think about, there was this other thing this morning. Julian Assange has been cut off from the internet by his gracious Ecuadorian hosts in their London embassy. And I betcha that’s because he dared question Britain in the Skripal case, on Twitter.

Here’s my theory, borne off my gullibility in all its glory: Theresa May and her government have been stumbling from disaster to catastrophe over the Brexit calamity for months now, and they needed some relief. But they themselves are not smart enough to provide it. So someone got it for them.

They’re keeping Labour boss Jeremy Corbyn occupied for all he’s worth with a cocked-up narrative of him being an antisemite. Stupid as can be story, but it works for as long as they need it to. The other day the BBC photoshopped a Russian hat on Corbyn’s face; that stuck less than the Jew-hater tale, so they went with that one. Some UK parliamentary fake news committee wants to talk to Zuckerberg, but they should look closer to home. If fake news is what they’re really after.

So anyway, they all went with the Novichok concocted thing, and boy did that ever catch on. Even every western politicians’ pet hamsters have now sent their Russian caregivers packing. And you know what it is, even if May and Boris had any proof of Russian involvement, all those countries certainly do not. Even if they had the evidence, they’re not going to send it around to dozens of countries. Just not.

Boris Johnson couldn’t resist comparing Putin to Hitler. You can’t fall any lower than that. Or can you? The diplomats were all expelled on a day that Russia was lamenting the death of 64(?) victims (mostly children) in a shopping mall fire, in what they declared a day of national mourning. You think Boris sent his condolences?

I can write about this all day long, and weekends too. You know, Crimea, Ukraine, MH17, the new cold war narrative has been well prepared. And now John Bolton, who may well be the deadliest cartoon character we’ve ever seen -let alone imagined-, is all set to score the easy tip-in. But that is possible only because all of you are as gullible as I am. Don’t forget that. They’re blinding you with silence, with stupidity, with your own lack of neuron activity.

Even if this is a story with too many holes in it to qualify as Swiss cheese. The story doesn’t make any sense? Who cares, really, all the front pages shout it out in bold print. And if you get tired of it: where’s the remote, Mildred?

British politician and former candidate for mayor of London, George Galloway, on Twitter, says it so much better than I ever could, and shorter too, which is why I quote him at the end of this article:

Why do I not believe you? Let me count the ways. You’re not looking for anyone in connection with the attack on the Skripals. There is no manhunt, no all points alert, no description, no identikit drawing, no CCTV. No suspects. That means you already know what happened. #Russia

We know Facebook is trying to screw with your brains. Well, they’re not the only ones. Your government -and ‘intelligence’ services- want the monopoly on that, too.

I can not make this a definitive, or final, or complete story. Because nobody can. But I can tell you this: if you think that Russia or God forbid Putin, ‘poisoned’ the Skripals, you’re so wrong you’re beyond salvation.

Not because it may or may not be true, but because you have seen no evidence. And you still go with it. Where’s the remote, Mildred?

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