FOMC Minutes Confirm Rate Hike Imminent “To Preserve Credibility”

A lot has changed since the November 2nd FOMC statement – most notably the world has suddently become awesome again. The relatively benign statement (and election result) has left rate-hike odds at 100% for December but comment from Fischer and Yellen since have hinted concerns at the need for Trump fiscal spendfest. The main risk going in to the minutes was a dovish tilt for the future, tamping the current 'nothing can stop us now' attitude (and we note the dollar leaked lower into the release). But sure enough, The Fed confirmed a rate-hike was approrpoate "relatively soon" and was "important to Fed credibility."

  • *MOST FED OFFICIALS SAW RATE HIKE APPROPRIATE `RELATIVELY SOON'
  • *MANY FED OFFICIALS SAW STABILITY RISKS IF JOB MKT OVERHEATED
  • *SUBSTANTIAL MAJORITY FED OFFICIALS SAW RISKS ROUGHLY BALANCED
  • *SOME OFFICIALS SAW DEC. HIKE IMPORTANT TO FED CREDIBILITY
  • *FED OFFICIALS SEE RESERVE BALANCES STAYING LARGE FOR `A WHILE'

*  *  *

Since the Nov FOMC statement, gold and bonds have been crushed as oil and stocks soared…

 

Heading into the minutes, the market has zero expectations of a surprise in December…

 

And looking further out at Fed funds, a 28% chance of a March hike is priced in and that rises to 61% by June and an 88% chance of at least one hike in 2017.

 

Key Excerpts:

Rate Hike Imminent:

Some participants noted that recent Committee communications were consistent with an increase in the target range for the federal funds rate in the near term or argued that to preserve credibility, such an increase should occur at the next meeting. A few participants advocated an increase at this meeting; they viewed recent economic developments as indicating that labor market conditions were at or close to those consistent with maximum employment and expected that recent progress toward the Committee’s inflation objective would continue, even with further gradual steps to remove monetary policy accommodation.

Credibility Concerns:

Some participants noted that recent Committee communications were consistent with an increase in the target range for the federal funds rate in the near term or argued that to preserve credibility, such an increase should occur at the next meeting.  

*  *  *

Full Statement:

can add when you are out

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Illinois Stiffing Vendors To Fund Budget Deficits – It’s A “Financial Time Bomb”

Anyone who has ever invested in distressed securities is intimately familiar with the many games that companies play to avoid a bankruptcy filing.  The easiest game, and the most obvious red flag for investors to spot, involves stretching out payables and managing down receivable days to build cash so you can live to fight another day.  While this may provide a temporary cash boost, it’s typically the beginning of the end as vendors simply move payment terms to COD and the game quickly comes to an end.

Well, this is exactly the game that the state of Illinois seems to be playing right now to cover its budget shortfalls. As we just pointed out a couple of days ago (see “Illinois Pension Funding Ratio Sinks To 37.6% As Unfunded Liabilities Surge To $130 Billion“), with a $130BN pension underfunding and minimum annual contributions of $10BN, it’s no surprise that Illinois needs every dollar they can squeeze out of vendors.

So, in response to their budget crisis, Illinois has done what every responsible, insolvent debtor does, namely raise more debt.  Under the program, Illinois vendors are able to sell their receivables to a consortium of lenders who have decided to provide seemingly perpetual loans to the state at a cost 1% per month.  As Reuters points out, the balance of the program is currently around $13.5BN right now but is expected to surge to $47BN by 2022, or nearly double the amount of GO bonds the state has outstanding. 

Political feuding between Republican Governor Bruce Rauner and Democrats who control the legislature has kept Illinois without a full operating budget since July 2015, contributing to a doubling of the unpaid bills backlog. The amount of overdue bills could reach $13.5 billion, or 40 percent of available operating revenue, when the current fiscal year ends June 30, the Rauner administration has projected.

 

Come fiscal 2022, the backlog is projected to balloon to $47 billion. No other U.S. state defers payments to the extent Illinois does to manage cash flow, credit-rating analysts said.

 

The one-of-its-kind, bill-payment program seeks to avert the nightmare scenario for a state in the worst financial shape in the country: a shutdown of essential services such as employee health insurance, a disruption of prison food supplies or mothballing of state trooper cars in need of fuel and maintenance.

 

“I don’t think there is any other alternative for us,” Illinois Central Management Services Director Michael Hoffman told a legislative panel in May.

 

The state’s negative credit outlook means its $26 billion of outstanding GO bonds could lurch closer to the junk level if the growing unpaid bill pile impairs its ability to provide essential services, affects debt payments and inflates its already huge $130 billion unfunded pension liability.

And, of course, interest payments on the ballooning debt balance is skyrocketing.

IL

 

And, like any good Illinois public project, this one comes with a healthy dose of corruption and favors to political insiders.

The firms include financial institutions such as Citibank N.A. (C.N) and Bank of America Corp (BAC.N), a distressed debt investor tied to a Rauner campaign donor, and political insiders, including Hillary Clinton’s 2008 campaign manager and a former two-term Republican Illinois governor.

 

Lindsay Trittipoe, majority investor of the second-largest consortium, Illinois Financing Partners LLP, told Reuters his group was performing a vital function rather than exploiting the state’s financial miseries.

 

“Our money is flowing into the market, helping the wheels of commerce to keep working,” he said.

We’re rusty on our 7 step plan, how long does the “denial” phase typically last?

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Navy’s New $4 Billion Stealth Warship Breaks Down (Again)

For the second time in two months, The Navy's new $4 billion stealth warship has broken down. As Military.com reports, the ripped-from-the-pages-of-a-sci-fi mag-looking USS Zumwalt is now in Panama for repairs after suffering a breakdown while passing through the Panama Canal on Monday evening.

Military.com's Hope Hodge Seck reports that a spokesman for U.S. 3rd Fleet, Cmdr. Ryan Perry, told Military.com that the commander of 3rd Fleet, Vice Adm. Nora Tyson, had instructed the USS Zumwalt, the first in a new class of stealthy destroyers, to remain at ex-Naval Station Rodman in Panama to address the engineering casualty.

"The timeline for repairs is being determined now, in direct coordination with Naval Sea Systems and Naval Surface Forces," he said in a statement.

 

"The schedule for the ship will remain flexible to enable testing and evaluation in order to ensure the ship's safe transit to her new homeport in San Diego."

An official confirmed to Military.com that the ship had been transiting south through the canal en route to its new San Diego homeport when the incident occurred. The ship had to be towed to pier by the Panama Canal Authority, the official said.

While details about what caused the breakdown were fewNavy Times — which first reported the incident — cited reports about problems with heat exchangers in the ship's integrated power plant that had contributed to the mishap.

It's not the first casualty for the Zumwalt, which was commissioned just last month, on Oct. 15. In September, ahead of its commissioning, the Zumwalt was sidelined due to a problem in its engineering plant, USNI News reported.

Navy officials said the problem was discovered after crew found a seawater leak in the propulsion motor drive lube oil auxiliary system of one of the ship's shafts. That repair was completed at Naval Station Norfolk.

The ship also made headlines earlier this month when multiple outlets reported that the missiles fired from its 155mm Advanced Gun System, at $800,000 apiece, were too expensive for the Navy to buy in large quantities, raising questions about the effectiveness of the ship's weapons.

The Zumwalt, and the two ships planned to follow it, will be assigned to the Pacific as part of the regional rebalance, Defense Secretary Ash Carter said in April.

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Fear The Federal Reserve Meeting Minutes

Authored by Danielle DiMartino Booth,

Ever heard of an Alpha quote? That’s how best to classify, “Show me the money!!!”

It didn’t take you but a nanosecond to picture Jerry Maguire screaming that line into his phone. The shame, for lack of a better word, is that another quote from the same movie, that’s almost as good, will only live on to minor fame.

Getting to the not quite as famous quote requires that you navigate not one, but two scenes in the 1996 Tom Cruise blockbuster. Sports agent Maguire has landed an Odessa, Texas high school superstar quarterback. In perfect stereotypical form, the boy’s father is chief negotiator. Out Maguire drives to dusty West Texas to seal the deal, on paper, to which the father replies: “You know I don’t do contracts, but what you do have is my word. And it’s stronger than oak.” One firm handshake later, we see an elated Maguire driving off singing and pounding his steering wheel to the beat of Tom Petty’s “Free Falling.”

Of course, a betrayal follows as sure as night follows day and the father signs, yes signs, with a rival agent offering a sweeter as in “Sugar” deal. But what about the strength of that oak? A pumped-up Maguire arrives for the young star’s big moment and learns that in all likelihood Cushman Senior does sign contracts. To that Maguire bitterly retorts, “I’m still sort of moved by your, ‘My word is stronger than oak’ thing.” The moral we saw coming: Always get it in writing.

But what happens when those written words still aren’t good enough? The occasion of the release of most Federal Open Market Committee (FOMC) Meeting Minutes would seem to be a great opportunity to get a behind-the-scenes take on all those round the table machinations. Minutes of lame duck meetings – no press conference, no action – hold even greater appeal, especially if multiple dissents accompany the decision. Hence the media jockeying for instant live reaction at 2 pm EST three weeks to the minute from the moment the statement is released. Hey, it beats waiting around five years for the meeting transcripts.

Did someone mention transcripts? In 2008, Janet Yellen herself suggested – in plain English, mind you – that the FOMC deploy the Minutes as they would any other tool in their quickly dwindling toolbox of conventionality. In the event the data or the markets have not reacted to the meticulously crafted statement in the manner Fed officials intended, whip out the Minutes to reshape the public’s thinking. Rather than become a monkey on her back, Yellen’s suggestion to outright manipulate the Minutes has been embraced by her peers and the public alike; parsing the message in the Minutes has become a favorite Wall Street parlor game.

That is, until today. A massage is one thing, a machete that leaves a blood trail quite another; hence the impossible task of weaving an entirely unexpected election result (especially for those on the FOMC) into the Minutes of a meeting that took place a week beforehand. Today, in other words, we will see relatively clean minutes, the prospect of which holds a whole different kind of appeal. (It may also explain the downright deluge of Fedspeak since the election. Do you get the sense there’s an unwritten Fed policy that dictates more is more when the Minutes have been disengaged?)

Given the violent reaction in the bond market to the election, it’s bound to be killing Yellen to not nod as to how the Fed is apt to react come December 14th. But the truth is the market has already placed its bet, pegging the probability of a quarter-percentage-point hike at a neat 100 percent. That gets us to the “What’s next?” portion of the program, which is when things begin to look a little hazardous.

The brilliant (word not used with even a scintilla of hyperbole) William White was recently honored with the Adam Smith prize, the highest on offer from the National Association of Business Economics. White’s career has been long and esteemed. In 2008, he retired from the Bank for International Settlements (BIS) and is now chairman of the Economic Development Review Committee of the OECD in Paris. On a personal level, yours truly has been honored to get to know White as fellow participants at The Ditchley Foundation’s annual gatherings.

But back to that, “What’s next?” for Yellen et al. Let’s just say White has uncovered the answer. To mark the occasion of his receiving the Adam Smith award, White penned, “Ultra-Easy Money: Digging a Deeper Hole?” Gotta love the subtlety in that title.

Do yourself a favor and Google the paper and read it in its entirety. It is blessedly readable and free of econometrics, as in approachable by those outside the insular field of economics.

White has never been one to kowtow to his peers. Rather than blindly acquiesce to the notion that monetary policy can solve all the world’s problems, White rightly recognizes the elephant in the room, namely that, “by encouraging still more credit and debt expansion, monetary policy has ‘dug a deeper hole.’” White’s basic premise is that central bankers’ hubris (my word) has deluded them into believing the economy can be modelled, “as an understandable and controllable machine rather than as a complex, adaptive system.”

Prior to the financial crisis, monetary policy was “unnaturally easy” and after the crisis broke, “ultra-easy.” Put differently, the failure of lower for longer was not recognized as a failure and taken as an opportunity from which to learn and grow into a new paradigm. Rather, monetary policymakers dug the hole deeper, insisting that failure be not acknowledged, but instead institutionalized. And so policy has been lower for even longer, exit delayed time and again.

Into this breach, Yellen steps again, one year after her first stab at a rate hike. The rest of the world can be thankful she wears sensible shoes, as opposed to strappy, red stilettos, given the potentially dangerous landing for this second rate hike since 2006. Maybe the Minutes will reveal how heated the discussion was about the impending December hike and its aftermath. We can only hope.

Most of the market’s focus since the election has been on major currencies’ moves against the dollar in reaction to the near one percentage point rise in the benchmark 10-year Treasury off its post-Brexit lows. No doubt, the move in the euro has been nothing short of magnificent. The powers that be at the Bundesbank have to be sweating out the ramifications of the next potential move given the double whammy of an interest rate increase here and a losing vote for Italian Prime Minister Matteo Renzi’s referendum on December 4th.

You’d never know it given the euphoria in the stock market, but a strong dollar can be harmful to the global economy’s health. While in no way inconsequential, the euro’s weakness pales compared to that of the shellacking underway in emerging market (EM) currencies. According to the BIS, since the financial crisis, outstanding dollar-denominated credit extended to non-bank borrowers outside the United States has increased from $6 trillion to $9.8 trillion.

The game changer in the current episode is the catalyst that drove the growth in EM dollar-denominated debt, namely unconventional Fed policy. The yield drought created by seven years of zero interest rate policy and quantitative easing pushed investors to show EM debt issuers the money. In prior periods, cross border bank loans were the source of the growth. Let’s see. Is it investors or bankers who are more likely and able to panic and run?

“This raises the specter of currency mismatch problems of the sort seen in the South Eastern Asia crisis of 1997,” worries White. “The fact that many of the corporate borrowers have rather low credit ratings also raises serious concerns, as does the maturity profile. About $340 billion of such debt matures between 2016 and 2018.”

Talk about a black box of uncertainty that’s sure to dominate the discussion at the upcoming FOMC meeting. The differences between last December and now, however, cannot be captured in any model. That should prove vexing to current members of the FOMC who’d prefer to not wander blindly onto a field littered with landmines.

As White forewarns, “Future economic setbacks tied to ultra-easy money could threaten social and political stability, particularly given the many signs of strains already evident worldwide. In short, the policy stakes are now very high.”

Oh how the Fed must long for the days of yore, when it was feasible to make policy in a domestic vacuum. Though the new reality set in over a matter of years, last August’s rude reminder on the part of People’s Bank of China abruptly ended that bygone era once and for all. The Fed can jawbone all it likes, in tiptoe style in the Minutes, or in gaudy fashion in an endless parade of FedSpeak.

But the reality of it is, if the rest of the world’s economic vulnerabilities and systemic fault lines are laid bare by this December’s hike, Fed officials’ words won’t amount to much more than trash talk, kind of like their vociferous vows to raise rates four times this year. In the end, their word proved to be as strong as, well, West Texas Oak.

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King County, Washington, Caught Digging Through Residents’ Trash

Oscar the Grouch A natural consequence of most Thanksgiving feasts is an incredible amount of leftover food, some of which—from congealed gravy to godawful ambrosia—is promptly tossed in the trash.

Usually, this throwing away of leftover holiday vittles warrants little attention from anyone. Not so in King County, Washington, however, where government officials have been found rummaging through residents’ garbage in search of food waste.

On Monday, Q13—the local Fox affiliate—reported that a King County woman named Sandi England had come across men in an unmarked rental Penske truck digging through her garbage cans at 5:30 a.m. Suspecting identity thieves, she confronted the men only to be told they were working for the county on a study of residents’ composting habits.

A local radio program called the Dori Monson Show reported that another woman had caught men with flashlights cataloging her household’s refuse in the middle of the night as well.

This state-sanctioned dumpster diving is apparently all part of an 18-month-long Residential Cart Tagging Project. Started in November of last year, the study aims to get a more accurate picture of how much food waste is going into people’s trash cans.

The idea is to encourage more of that waste to go into “yard waste” carts instead, says Jeff Gaisford, a recycling and environmental services manager with King County Solid Waste. According to Gaisford, his department has been leaving informational tags on the trash cans of its involuntary study participants reminding them of proper food waste disposal practices. The follow-up “surveys” are intended to measure whether these tags are working to encourage people to put said waste in the right bins.

People weren’t informed about the unsolicited site visits, he added, because King County does not want them to change their behavior in response to being part of the study.

As weird, creepy, and likely pointless as all this is, it’s actually not the first time the area has experienced curb-side privacy violations.

The city of Seattle—which sits in King County—was rebuked earlier this year when a judge found that a similar program to measure how much recyclable material was being thrown in the trash was unconstitutional. That ruling rested on the fact that Seattle was looking to level fines on those who failed to properly sort their recyclable high-density polyethylene from their non-recyclable polypropylene. As the county is not looking to hand out fines to callous food wasters, its program probably won’t suffer a similar fate.

Fines or no, though, the Residential Cart Tagging Project has rankled more than a few people. Drew Barth of the Dori Monson Show voiced some rather libertarian sentiments, for example, when he called the whole thing “idiotic” and a waste of taxpayer money. “I should have the freedom to throw away whatever I want,” he said.

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US Crude Production Rises As Rig Count Reaches 10-Month Highs

For the 24th week of the last 26, oil rigs rose (by 2) to 474, the highest since January 2016. US crude production rose again last week tracking the lagged trend of rising rig counts in the US.

 

 

Notably US crude production looks set to rise given the rig count moves (and if OPEC agrees a deal and spooks prices higher, that production may well arrive sooner).

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The Fate of the Pardoned Turkeys

As Barack Obama prepares to pardon the presidential turkey—CNN is counting down the hours as I type—it’s a good day to read Magnus Fiskejö’s account of what happens to the bird after it receives its freedom:

The birds are then, in proverbial fashion, said to live happily ever after. In reality, however, they are usually killed within a year and stand-in turkeys are supplied. This goes on year after year. The chosen birds are killed because they have been engineered and packed with hormones to the point that they are unfit for any other purpose than their own slaughter and consumption.

Thanksgiving rituals: not just a link to the American past, but a glimpse of the dystopian America to come! Enjoy the long weekend, everyone.

Bonus link: What happens to the turkeys after they die? They’re buried at Mount Vernon. Say…didja ever get the feeling that this isn’t the real reality, and that we actually live in a heavy-handed metaphor?

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Evan McMullin’s Troop-less War Against Donald Trump’s GOP

Hillary Clinton, for understandable reasons, is keeping a low profile. Gary Johnson may well have disappeared off the map. (Two weeks before the election, the mentally wearied Libertarian told me “I may not even listen to the news again for the rest of my life. So I’ll be in ignorant bliss.”)

But the only other non-Bernie Sanders presidential candidate to finish as high as third place in any state, the independent conservative Evan McMullin, has spent the last two weeks tweeting out a storm of invective aimed at Donald Trump and his alt-rightiest supporters. A selection:

That last tweet in particular echoed the single biggest theme in the McMullin/Mindy Finn stump speech: that Donald Trump was violating the Declaration of Independence’s notion that all men (“and women,” they would always add) are created equal. The Gary Johnson/Bill Weld ticket may have gotten earfuls of grief (some of it deserved) for going comparatively apoplectic at the prospect of a Trump presidency—an emphasis that, perhaps ironically, drove many third-party leaners I know into the arms of McMullin. But in his campaign and post-election behavior, the former CIA operative and Goldman Sachs investment banker has sounded at various times as outraged by Trump’s rhetoric and associations as the median Comedy Central employee.

“The Republican Party can no longer be considered the home for conservatives,” McMullin said in his concession speech on election night. “Conservatism is about protecting the fundamental rights: That we are all equal, regardless of the color of our skin, the faith that we practice or our gender. But tonight there are millions of Americans, I’m sad to say, who are now in fear that perhaps their liberties will be challenged and threatened under a Trump administration that has made a campaign of targeting people based on their race, religion and gender.”

But in his bid to be the vanguard of a “new conservative movement,” McMullin has a difficult question to answer. Him and what army?

Not only did Donald Trump rout the Republican primary field and then shock the consensus favorite in the general election, the GOP maintained its control of Congress and its dominance at the state level. Conservative officeholders will likely be too busy enjoying the exercise of power to heed McMullin’s call for a new splinter movement.

Meanwhile, the #NeverTrumper finished a distant fourth place in the national vote, with 0.42 percent so far. (Many write-ins have yet to be tabulated, so that figure will go up, but the total number of write-ins stands at 0.63 percent, meaning he will certainly fall far behind Jill Stein’s current 1.03 percent.) It is true, McMullin had by far the best finish among third-party candidates in any single state, with his 21.6 percent in Utah (more than doubling Johnson’s 9.3 percent in New Mexico), but aside from his 6.7%-4.1% victory over the Libertarian in Idaho (which is the second-biggest Mormon state of the union), the independent never cracked 2 percent in any of the other nine states he made it onto the ballot. There is no evidence that he exists as a significant political phenomenon outside the Mormon belt.

Here are the current numbers for McMullin’s nine laggard states, ranked in order of his performance, and displayed along with results from the other minor candidates:

1.80% Minnesota (Gary Johnson 3.84%, Jill Stein 1.26%, Dan Vacek 0.38%, Darrell Castle 0.32%)

1.35% Virginia (GJ 2.97%, JS 0.69%)

1.18% Kentucky (GJ 2.79%, JS 0.72%)

1.17% Arkansas (GJ 2.64%, JS 0.84%, James Hedges 0.42%, DC 0.41%, Lynn Kahn 0.30%)

1.04% Colorado (GJ 5.18%, JS 1.18%, DC 0.42%)

1.00% South Carolina (GJ 2.34%, JS 0.62%, DC 0.27%, Peter Skewes 0.15%)

0.79% Iowa (GJ 3.78%, JS 0.73%, DC 0.34%)

0.73% New Mexico (GJ 9.34%, JS 1.24%)

0.42% Louisiana (GJ 1.87%, JS 0.69%)

So after the many thousands of news stories this year about the #NeverTrump movement, here are your final results: Two bronze medals, six fourth-place finishes, and three times lagging behind Jill Stein. And the only state in which McMullin even has an argument about influencing the outcome is, paradoxically, the one where he wasn’t even on the ballot: Florida.

There, in that swingiest of swing states, the administration of Gov. Rick Scott, who runs a Trump-supporting SuperPAC, reversed precedent and outraged ballot-access activists by gratuitously chucking McMullin off the ballot. Donald Trump ended up winning the Sunshine State and its delicious 29 electoral votes by 1.19 percentage points as of current tabulations. While it’s true that McMullin only cleared that number in two of his nine non-Mormon states, had he somehow duplicated his Minnesota total of 1.8 percent, that may have been enough to turn Florida blue, given how pre-election polls in Virginia showed him pulling almost exclusively from Republicans and conservatives.

If Florida had repeated its 2000 role as the pivotal state in a tight presidential election, just imagine the national conversation we’d be having now. “The Scott administration put up a shield wall to protect Donald Trump at every turn,” McMullin advisor and Florida native Rick Wilson told me three days before the election. “This thing stank on ice.”

As it stands, McMullin’s Florida exclusion is a footnote of a footnote. Only time will tell whether his campaign to build a new, more equality-based conservative movement will suffer the same fate.

Read my election eve interview with Evan McMullin and Mindy Finn here.

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Evan McMullin’s Troop-less War Against Donald Trump’s GOP

Hillary Clinton, for understandable reasons, is keeping a low profile. Gary Johnson may well have disappeared off the map. (Two weeks before the election, the mentally wearied Libertarian told me “I may not even listen to the news again for the rest of my life. So I’ll be in ignorant bliss.”)

But the only other non-Bernie Sanders presidential candidate to finish as high as third place in any state, the independent conservative Evan McMullin, has spent the last two weeks tweeting out a storm of invective aimed at Donald Trump and his alt-rightiest supporters. A selection:

That last tweet in particular echoed the single biggest theme in the McMullin/Mindy Finn stump speech: that Donald Trump was violating the Declaration of Independence’s notion that all men (“and women,” they would always add) are created equal. The Gary Johnson/Bill Weld ticket may have gotten earfuls of grief (some of it deserved) for going comparatively apoplectic at the prospect of a Trump presidency—an emphasis that, perhaps ironically, drove many third-party leaners I know into the arms of McMullin. But in his campaign and post-election behavior, the former CIA operative and Goldman Sachs investment banker has sounded at various times as outraged by Trump’s rhetoric and associations as the median Comedy Central employee.

“The Republican Party can no longer be considered the home for conservatives,” McMullin said in his concession speech on election night. “Conservatism is about protecting the fundamental rights: That we are all equal, regardless of the color of our skin, the faith that we practice or our gender. But tonight there are millions of Americans, I’m sad to say, who are now in fear that perhaps their liberties will be challenged and threatened under a Trump administration that has made a campaign of targeting people based on their race, religion and gender.”

But in his bid to be the vanguard of a “new conservative movement,” McMullin has a difficult question to answer. Him and what army?

Not only did Donald Trump rout the Republican primary field and then shock the consensus favorite in the general election, the GOP maintained its control of Congress and its dominance at the state level. Conservative officeholders will likely be too busy enjoying the exercise of power to heed McMullin’s call for a new splinter movement.

Meanwhile, the #NeverTrumper finished a distant fourth place in the national vote, with 0.42 percent so far. (Many write-ins have yet to be tabulated, so that figure will go up, but the total number of write-ins stands at 0.63 percent, meaning he will certainly fall far behind Jill Stein’s current 1.03 percent.) It is true, McMullin had by far the best finish among third-party candidates in any single state, with his 21.6 percent in Utah (more than doubling Johnson’s 9.3 percent in New Mexico), but aside from his 6.7%-4.1% victory over the Libertarian in Idaho (which is the second-biggest Mormon state of the union), the independent never cracked 2 percent in any of the other nine states he made it onto the ballot. There is no evidence that he exists as a significant political phenomenon outside the Mormon belt.

Here are the current numbers for McMullin’s nine laggard states, ranked in order of his performance, and displayed along with results from the other minor candidates:

1.80% Minnesota (Gary Johnson 3.84%, Jill Stein 1.26%, Dan Vacek 0.38%, Darrell Castle 0.32%)

1.35% Virginia (GJ 2.97%, JS 0.69%)

1.18% Kentucky (GJ 2.79%, JS 0.72%)

1.17% Arkansas (GJ 2.64%, JS 0.84%, James Hedges 0.42%, DC 0.41%, Lynn Kahn 0.30%)

1.04% Colorado (GJ 5.18%, JS 1.18%, DC 0.42%)

1.00% South Carolina (GJ 2.34%, JS 0.62%, DC 0.27%, Peter Skewes 0.15%)

0.79% Iowa (GJ 3.78%, JS 0.73%, DC 0.34%)

0.73% New Mexico (GJ 9.34%, JS 1.24%)

0.42% Louisiana (GJ 1.87%, JS 0.69%)

So after the many thousands of news stories this year about the #NeverTrump movement, here are your final results: Two bronze medals, six fourth-place finishes, and three times lagging behind Jill Stein. And the only state in which McMullin even has an argument about influencing the outcome is, paradoxically, the one where he wasn’t even on the ballot: Florida.

There, in that swingiest of swing states, the administration of Gov. Rick Scott, who runs a Trump-supporting SuperPAC, reversed precedent and outraged ballot-access activists by gratuitously chucking McMullin off the ballot. Donald Trump ended up winning the Sunshine State and its delicious 29 electoral votes by 1.19 percentage points as of current tabulations. While it’s true that McMullin only cleared that number in two of his nine non-Mormon states, had he somehow duplicated his Minnesota total of 1.8 percent, that may have been enough to turn Florida blue, given how pre-election polls in Virginia showed him pulling almost exclusively from Republicans and conservatives.

If Florida had repeated its 2000 role as the pivotal state in a tight presidential election, just imagine the national conversation we’d be having now. “The Scott administration put up a shield wall to protect Donald Trump at every turn,” McMullin advisor and Florida native Rick Wilson told me three days before the election. “This thing stank on ice.”

As it stands, McMullin’s Florida exclusion is a footnote of a footnote. Only time will tell whether his campaign to build a new, more equality-based conservative movement will suffer the same fate.

Read my election eve interview with Evan McMullin and Mindy Finn here.

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Anniversary of Alternative Reporter’s Death

Via The Daily Bell

We got the very sad news today, Nov. 22, 2015, that Dave McGowan passed away from cancer at 12:47 p.m.  – Truth and Shadows

We missed the anniversary of McGowan’s death, which was yesterday, but he was one helluva a writer, exposing in brief books the“directed history” of the modern era. So, we’ll remember him today. We’ve written about him before, here.

He died of an extremely aggressive form of lung cancer, which made some of his fans speculate that he’d actually been assassinated. Unfortunately, much of Dave’s work is no long freely available on the ‘Net, though some is available here.

The following is Dave’s last post here from his Blog Center for an Informed America (June 14, 2015).

Just nine weeks ago, on April 14, I presented a lengthy video deconstruction of the 2013 Boston Marathon incident through the Caravan to Midnight radio show/podcast. About a week later (on April 20, of all days), the nearly four-hour video presentation was uploaded to YouTube.

Not long after that, someone using the username Phoenix Archangel posted an interesting comment: “John [Wells, the host of the show] always signs off with some of the best advice ever. Speaking of advice: this David McGowan fella really ought to quit smoking. With all the elitist feathers he’s ruffling, he’s likely to come down with a spontaneous case of hitherto undiagnosed stage 4 inoperable Pancreatic cancer.”

… Mr./Ms Archangel … wasn’t too far off, though I’ve been told that it’s actually incurable small-cell lung cancer that has already spread to my liver and bones. And no, that’s unfortunately not a joke. It’s my new reality as of just a few short weeks ago, when my entire world was turned upside-down and I suddenly found myself being admitted to the oncology ward at Glendale Adventist Medical Center. Four days later, I was beginning my first round of chemotherapy infusions. The second round begins tomorrow, on Monday, June 15.

More from Truth and Shadows:

The first thing I read from McGowan was his series on the Apollo Moon missions called “Wagging the Moondoggie.” This amazing 14-part series is what finally convinced me that the Moon landings never took place. What struck me was not only his insight but his wit. Very dry, which is the best kind.

In addition to what became a whole series on 9/11, I was also blown away by series on the Boston Marathon “bombing” and dark side of the music scene in Laurel Canyon in the 1960s (which became a book). Other books he has written include Programmed to Kill, Understanding the F-Word: American Fascism and the Politics of Illusion, and Derailing Democracy: The America the Media Don’t Want You to See.

We ran into McGowan’s work very early in the 2000s when we were researching an article on the Peak Oil hoax. At the time, libertarian analysis was mostly theoretical, but we were trying to focus on a synthesis between free-market theory and “directed” history.

We could hardly believe McGowan’s comments on Peak Oil. Without, apparently, a deep background in Austrian free-market economics, he nonetheless fully grasped the idiocy of asserting that the modern world was running out of oil, and that since alternatives were not going to be developed in a timely manner, the only solution was drastic, government action. He even mentioned abiotic oil, see here, as we recall.

When we read his short books, we were further impressed. McGowan moved far beyond simplistic assertions of “conspiracy” to show you clearly how modern history seemed to work.

For us, the book on the mid-1960s Laurel Canyon music scene here was perhaps the most brilliant. Who knew that Jimi Hendrix was in the military, here, prior to becoming a rock star? Who knew that many of the musical stars of the early- to the mid-1960s were somehow gathered together in Laurel Canyon prior to their fame, here – and that many or most had military ties or came from military families.

McGowan didn’t state everything. Some things he left up to you. But it was hard to come away from his books without understanding his main point, that society was directed purposefully from above and that before the Internet (and people like McGowan), you would live your entire life unknowingly according to someone else’s plan.

His short book about Laurel Canyon not only shows how directed history operates, it makes the point, resonantly, that society and even culture can be shifted according to elite strategies. In other words, in not very many pages it SHOWS (not tells) how Western social manipulation actually works. Likely it has worked this way for thousands of years.

Before McGowan, it was easy to believe that social manipulation must inevitably be a clumsy affair, imposed brutally as it was in the USSR. McGowan presents ways cultural reconfiguration can take place secretly and powerfully, without anyone but a handful knowing it is happening.

For instance, the standard story of the 1960s is that young people got upset over the war and in the process of protesting, quickly created an entire counterculture that opposed much of what “corporate America” stood for. The trouble with the 1960s counterculture was that it never adequately defined the real problem, nor did it fully explain the solution.

The hippie ethos blamed much of what was wrong with America on corporate greed and the like. This led to the conclusion that government itself could rectify what was wrong. But both modern corporations and today’s massive governments are the result of monopoly force wielded behind the scenes.

In reality, as McGowan showed, the 1960s movement was likely painstakingly created to generate certain results, mostly by reinforcing social chaos. Thus, blaming problems on corporations and looking to government for solutions was only to be expected, though it was wrongheaded on numerous levels.

As we know today from Internet information, government is seemingly supported by a handful of unfathomably rich individuals – those who likely control central banking – to provide “solutions” that inevitably generate more problems not less.

We know from Austrian economics that almost every law and regulation is surely a price fix that must drain prosperity from society. We know, via “marginal utility” here that valid prices can only be generated via market competition itself.

The 1960s hippie revolution explored little of this because – as McGowan suggested – it was created and sustained by the CIA. So many 1960s figures were apparently working with the CIA.

These may have included singer Jim Morrison, whose father helped initiate the fake military incidents that Lyndon Johnson used to generate the full-on Vietnam war here – and many other musicians, promoters and business opportunists. And also those individuals who initially dispersed CIA-created LSD, here.

In fact, one can speculate that the Vietnam War itself was created as part of a Hegelian dialectic that included the creation of a manipulated 1960s alternative “hippie” culture. Each Hegelian thesis demands an antithesis that leads to a synthesis. The war was the thesis, and the counterculture was the antithesis leading to the synthesis we have today.

The goal is always globalism, apparently. And social chaos must be regularly induced in order to reinforce additional government actions. If one has the patience and the desire, it is relatively easy to discern the evolution of these modern manipulations and even to predict their future.

It’s one reason, we continue to distrust narratives present in the mainstream media and even those being offered, sometimes, in the alternative media. We’re not sure that this presidential election, for instance, is what it seems. And we have written numerous articles suggesting that a good deal of purposeful propaganda surrounds nuclear weapons, to name one additional promotion, here.

Conclusion: McGowan helped show the way, however, and we simply need to follow his lead to better our own comprehension. It’s not pleasant to pursue such information, nor come to additional conclusions, but the alternative is living in ignorance of the true influences on our life and times. Some people are content to live without embarking on such explorations. Others are not.

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