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With Bitcoin at 3 year highs, China’s renewed efforts to curb declines in its currency are doing little to stop yuan bears who have sent forward devaluation expectations to record highs and options positioning to six-month lows. And judging by Goldman Sachs' outlook – a potential resurgence in Chinese growth fears early next year, but more broadly, a continued bumpy deceleration – things are not getting better anytime soon.

As Bloomberg notes, traders have turned increasingly negative amid tighter liquidity, sending bets for further losses soaring. The gap between forward contracts wagering on the offshore yuan a year from now versus its current level is heading for a record monthly jump…

Just as the extra cost for options to sell the currency against the dollar hit a six-month high relative to prices for contracts to buy.

The currency is facing a triple whammy of accelerating capital outflows, faster U.S. interest-rate increases and concerns over domestic financial markets as liquidity tightens. Strategists say its weakening, set to be the biggest this year in more than two decades, may accelerate as the government restores the annual quota for citizens to convert yuan holdings into foreign exchange. And Goldman Sachs warns, China remains a key risk to watch…

Where we stand now:

Broader concerns about China risk derailing global growth and markets proved somewhat short-lived. After the S&P 500 hit its low for the year on February 11, two days after we published, better economic data and a sense that the Fed would react to global concerns—confirmed by the dovish March FOMC meeting—helped improve market sentiment. Political events in the western hemisphere have since broadly taken center stage in global markets, leaving China concerns in the background. But the reality is that growth—on some level—did take a hit; for example, US GDP growth came in at an anemic 1.1% annualized in 1H2016, owing in part to weakness in the industrial sector and energy-related activity but largely due to tighter financial conditions primarily in the wake of China concerns. China growth itself also remained relatively weak in 1H as measured by the GS China Current Activity Indicator, which declined towards 4% in 1Q and began to climb slowly thereafter.

 

Stabilizing growth in China has helped push China to the background of investor concerns. In order to stabilize growth and meet official GDP targets, China’s policymakers continued to pursue an ambitious stimulus plan begun in early 2015 that entailed pausing fiscal reforms, sharply cutting interest rates, loosening housing policies, and increasing credit growth. The result: GDP growth looks set to meet the target of 6.5%-7% for 2016, and producer prices are rising after years of deflation.

 

But policies that re-ignited growth in the short-term just increase concern about the future, especially in terms of credit. We estimate that total credit growth adjusted for muni bond issuance accelerated from 13% yoy in 1Q15 to 17% yoy as of 2Q16, and to 20% yoy when including shadow lending not captured in official statistics. In short, the potential credit problems in China have not receded, and indeed have likely grown given the very fast pace of credit expansion.

 

Policymakers have taken note of these potentially destabilizing dynamics and have refocused on risk management; indeed, China’s recent Central Economic Work Conference to plan for next year’s economic policy included strong statements on controlling financial risks. Risk management measures employed in recent months include increasing short-term repo rates, reining in off-balance sheet exposures such as wealth management products, and rolling out measures to try to curb home price appreciation. Fiscal policy also seems likely to tighten at least slightly in coming months. But any tightening will likely prove short-lived given that meeting growth targets will remain critical in 2017—a year of leadership transition.

 

Our RMB view has also become more negative, presenting risk to the US dollar and S&P 500. When we published at the height of market anxiety around China, we were relatively constructive on the RMB, arguing that a large, one-off devaluation was unlikely and envisioning only a “mild” trade-weighted depreciation (against the CFETS basket, the CNY has depreciated 4.5% since then). But capital outflow pressures have remained, particularly in the context of US dollar strength. Despite the government’s official focus on a trade-weighted currency basket, higher $/CNY fixings are still a powerful signal that can easily re-ignite capital flight, as households and firms anticipate a faster pace of depreciation.

 

 

Indeed, the PBOC’s FX reserves fell US$69bn to US$3,052bn in November, the largest decline since January. The US election has reinforced these dynamics given the strengthening dollar and potential for trade frictions, motivating tighter restrictions on capital flows. Global markets have so far taken these developments in stride, but the risk of a repeat of related equity market volatility remains, which could impact the pace of Fed tightening and dollar strength.

What to look for in 2017 (and beyond):

A potential resurgence in Chinese growth fears early next year, but more broadly, a continued bumpy deceleration. We expect sequential GDP growth to decelerate into 1Q17 to c.5.5% annualized on recent tightening measures. But we expect a rapid pivot back to stimulus should the growth target look at risk, especially given next year’s leadership transition.

 

Continued concerns about China credit growth. Although policymakers have introduced tightening measures to reduce the risk of asset price bubbles, China’s reliance on credit growth, which undermines financial stability, remains a key risk.

 

RMB downside, posing potential risk to the stronger US dollar and global stock markets. We forecast a $/CNY fix of 7.00, 7.15 and 7.30 in 3, 6 and 12 months, respectively, and long $/CNY is one of our 2016 Top Trades. The pace of capital outflows and the evolution of the fix warrant monitoring; in our view, as long as the fix simply offsets dollar strength and capital outflows are contained, global risk appetite should hold up.

China remains a key risk to watch.

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Submitted by Lance Schuttler via TheMindUnleashed.com,

Billy Williams just finished his first college semester and did so with the all-impressive 4.0 GPA. Instead of celebrating his accomplishments with friends and family, he decided to drop out of college entirely.

Billy made a facebook post that is now going viral in which he explains his reasoning for dropping out:

“Now that I’ve finished my first semester I think it’s safe to say… FUCK COLLEGE. Now before all you of you go batshit crazy… I have a few points to make.

 

1. Yes I have dropped out after finishing my first semester (with a 4.0 GPA). And it’s one of the best choices I’ve ever made. Not because I am averse to learning, but actually the exact opposite.

 

2. YOU ARE BEING SCAMMED. You may not see it today or tomorrow, but you will see it some day. Heck you may have already seen it if you’ve been through college. You are being put thousands into debt to learn things you will never even use. Wasting 4 years of your life to be stuck at a paycheck that grows slower than the rate of inflation. Paying $200 for a $6 textbook. Being taught by teacher’s who have never done what they’re teaching. Average income has increased 5x over the last 40 years while cost of college has increased 18x. You’re spending thousands of dollars to learn information you won’t ever even use just to get a piece of paper. I once even had an engineer tell me “I learned more in my first 30 days working than in my 5 years of college.” What does that tell you about this system? There are about a million more ways you’re being scammed into this.. just watch the video i’m gonna comment if you want to see more.

 

3. Colleges are REQUIRING people to spend money taking gen. ed. courses to learn about the quadratic formula (and other shit they will never use) when they could be giving classes on MARRIAGE and HOW TO DO YOUR TAXES.

 

4. Gosh there are so many more reasons I could add, but just comment if you disagree or have reasons to add. I’d love to add to the discussion. TAG a friend in college, Tag your parents, share this if you agree, disagree. Let’s just talk about it. Heck post a picture of yourself flipping off something you think is unjust in our society.”

Billy is right too that the price of college continues to soar.

Ray Franke, a professor of Education at the University of Massachusetts, Boston said:

“If you look at the long-term trend of college tuition, it has been rising almost six percent above the rate of inflation. That’s brought immense pressure from the media and general public, asking whether college is still worth it.”

In 2015, Harvard’s annual tuition and fees (not including room and board) would cost a person $45,278, which is more than 17 times the 1971-72 cost. If annual increases of tuition had simply tracked the inflation rate since 1971, 2016’s tuition would be just $15,189.

According to CNBC, college enrollment peaked in 2011, and has been decreasing ever since. This is no doubt in part to a family’s ability to pay the tuition, room and board and other related expenses. For example, in order to pay for a year of college at Harvard today would take the median household income nearly one year of paychecks. Back in 1971, it would have taken about 13 weeks of paychecks per the household median income.

Today the student debt is over $1.26 trillion dollars with over 44 million Americans in debt from student loans. 2016’s graduates on average are over $36,000 dollars in debt, which is up 6% from just one year ago.  

What can be done to alleviate this situation? Why do banks get bailed out (2008 Lehman crisis) for cheating the world, while students must continue to pay a debt? Why is a private institution (The Federal Reserve) in charge of this nation’s money and finances? How will students continue to be able to go to college when the price continues to skyrocket as the federal minimum wage stays stuck at $7.25 an hour? At some point soon, the masses won’t take it anymore from the banking cartel. The education system is in for some major changes very soon.

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One week ago, New Yorkers were captivated, and unnerved, by a 40-minute long military exercise in which one USAF C-130 and several HH-60 Pave Hawk helicopters could be seen circling at very low altitudes above Manhattan. While the US military kept silent about the overflight, U.S. Air Force Col. Nicholas Broccoli, the vice commander of the Air National Guard’s 106th Rescue Wing, said the aircraft were conducting “standard military training.”  However, one look at the flight pattern of the plane shows there was seemingly little that was “standard” about a C-130 making dozens of circles over midtown Manhattan.

Seeing multiple reports of a USAF C-130 and several Black Hawk helicopters circling low (3,000 feet) over Manhattan.

No, that is not normal http://pic.twitter.com/DaFByrAX3O

— Jason Rabinowitz (@AirlineFlyer) December 13, 2016

A video of the plane that's been circling Manhattan http://pic.twitter.com/Bsj5ANEeW1

— Alp Ozcelik (@alplicable) December 13, 2016

Today we learn that the overflights were far more than simply “standard military training.” According to DNAinfo, the military airplane and two helicopters doing loops over Midtown last week were conducting an “emergency relocation” planning mission in case they needed to extract President-elect Donald Trump during an emergency or attack.

Citing sources, DNAInfo said that the flyovers were part of an “emergency relocation drill” designed to identify locations, primarily in Central Park, where a chopper could touch down near Trump’s home inside Trump Tower on Fifth Avenue and 56th Street, and safely evacuate Trump and others from the city.

“It was the military doing their homework,” one source said. “They were making plans how to remove him, mapping plans and strategizing,” added a second source.

In the event of an emergency, the president would be whisked by the Secret Service north to the park, and then flown in a helicopter to the nation’s capital or a secret government site in Virginia or West Virginia, sources said. The aircraft models spotted during the exercise can fly long distances without refueling and can also refuel in mid-air if necessary, sources said.

Surprisingly, the NYPD was given only short notice about the flyovers, and were never informed that the military would be using a plane as large a C-130 with its 130-foot wing span. “They should have told people they were doing recon, and going to fly at low altitudes, instead of keeping it a secret,” a law enforcement source said. “People were scared, and rightly so.”

“Trump is the president and people would understand that they are doing a recon mission for an emergency,” the source continued.

One day after the flyover, NYPD Commissioner James O’Neill told reporters that the city was working on improving notification procedures. “Usually when there is a flyover, we get something through our Operations unit. It’s sent out to everybody,” O’Neill said last Wednesday at an unrelated press conference. “That notification is supposed to go out through OEM [the Office of Emergency Management], so I know OEM is working with the military to make sure the proper notifications are made. [OEM Commissioner] Joe Esposito is going to have to make sure he stays in contact with the military for future notifications.”

“The public should know about that. What’s transpired in New York City over the last 15 years, we need to know that,” O’Neill added.

DNAinfo further adds that according to a federal agent who witnessed the circling aircraft, and who spent most of his career protecting presidents, “the park is the closest place to land, even if they keep a Marine 1 helicopter up here in the city, or in base in New Jersey.” The ex-agent said last week’s aircraft basically conducted a dozen loops from 42 Street west to Riverside Park, then headed to the East River and south back to 42nd Street.

“I have never seen a military training maneuver in the city,” the agent observed. “That type of rescue work is usually done by the NYPD, the FDNY, or the Coast Guard, not the military.”

The C-130 which was the airplane confuicting the drills, travels up to 300 mph, is fundamentally a cargo transport plane that can be filled with everything from armed personnel to armored vehicles, including presidential limousines. The plane can also land on short runways.

Meanwhile, the military continued to deny the purpose of the exercise: a spokesman for the New York State Division of Military and Naval Affairs said last week only that the maneuver was part of a “routine training mission” that originated from the 106th Rescue Wing at the Francis S. Gabreski Airport in Westhampton Beach on Long Island. He reiterated the same today. A spokesman for the US Secret Service in Washington did not immediately respond to a call seeking comment.  As a matter of policy, however, the agency routinely says it does not discuss specifics of Presidential security.

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A few weeks ago we asked whether CalPERS would rely on sound financial judgement and math to set their rate of return expectations going forward or whether they would cave to political pressure to maintain artificially high return hurdles that they'll never meet but help to maintain their ponzi scheme a little longer (see "CalPERS Weighs Pros/Cons Of Setting Reasonable Return Targets Vs. Maintaining Ponzi Scheme").  The decision faced by CALPERS was whether their long-term assumed rate of return on assets should be lowered from the current 7.5% down to a more reasonable 6%.  Well, we now have our answer and it seems the board erred on the side of maintaining the ponzi with a decision to reduce the fund's discount rate by only 50 bps, to 7%, to be phased in over 3 years.

Of course, this decision should come as little surprise to our readers as we concluded our previous post with the following prediction:

We've seen this battle between math/logic and politicians played out numerous times in states all across the country.  Somehow we suspect that "math/logic" will continue to lose…better to bury your head in the sand for a couple of more years and pretend there is no problem.

Per The Sacramento Bee, the CalPERS board approved the discount rate adjustment with a vote of 6-1 and the reduction will be phased in over 3 years starting next July. 

CalPERS moved to slash its official investment forecast Tuesday, a dramatic step that will translate into billions of dollars in higher annual pension contributions from the state, local governments and school districts.

 

Employees hired after January 2013, when a statewide pension reform law took effect, will also have to kick in more money. Older employees could see higher contributions, too, although that would be subject to contract bargaining.

 

CalPERS’ Finance and Administration Committee voted 6-1 to lower the forecast from 7.5 percent to 7 percent in phases over three years, starting next July. Although the committee’s vote must be ratified by the entire board Wednesday, most other board members indicated they support the move as well.

 

It would be the first adjustment to the forecast in four years.

 

The move is a recognition that investment returns are falling and that the California Public Employees’ Retirement System, which is just 68 percent funded, needs higher contributions from government agencies to solve its long-term problems.

 

“We’re in a low-growth (investment) environment, and it’s expected to remain that way the next five to 10 years,” board member Henry Jones said.

While a 50bps decrease to a 7% discount rate will still trigger roughly $1 billion in incremental annual contributions from various California government entities according to Eric Stern of the California Department of Finance, it is still a long way from the fund's estimated returns of just 6.2% over the next decade which happens to match exactly their returns from the past decade.

Of course, mathematical realities have to be weighed against the risk of disrupting the ponzi scheme and forcing several California cities to the brink of bankruptcy.

But a CalPERS return reduction would just move the burden to other government units. Groups representing municipal governments in California warn that some cities could be forced to make layoffs and major cuts in city services as well as face the risk of bankruptcy if they have to absorb the decline through higher contributions to CalPERS.

 

“This is big for us,” Dane Hutchings, a lobbyist with the League of California Cities, said in an interview. “We've got cities out there with half their general fund obligated to pension liabilities. How do you run a city with half a budget?”

 

CalPERS documents show that some governmental units could see their contributions more than double if the rate of return was lowered to 6%. Mr. Hutchings said bankruptcies might occur if cities had a major hike without it being phased in over a period of years. CalPERS' annual report in September on funding levels and risks also warned of potential bankruptcies by governmental units if the rate of return was decreased.

Meanwhile, Richard Costigan, chairman of the CalPERS finance committee, who vowed that "this is just a start," more or less admits that the decision was politically motivated to allow "municipalities and other government agencies some breathing room before they absorb the impact."

Board members, however, defended the action as a compromise; it will help stabilize the fund while giving municipalities and other government agencies some breathing room before they absorb the impact. Richard Costigan, chairman of the finance committee, said CalPERS officials will continue to look at the fund’s investment strategies over the next year.

 

“This is just a start,” Costigan said.

Now all eyes will turn to the 37.6% funded Illinois pension fund, as well as many others, to see if they follow suit. 

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Submitted by Michael Lucci via IllinoisPolicy.org,

Illinois has record loss of 114,000 residents to other states in 2016 as population shrinks by 37,500.

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Just days after raising its economic outlook, Japan’s ministry of finance announced on Thursday that for the first time since 1998 it would slash government bond issuance in fiscal 2017 which starts on April 1.  The MOF plans to issue Y154.0 trillion in JGBs in coming fiscal year, down 5% from an initial Y162.2 trillion for the current fiscal year, as a result of sliding demand for debt amid continued very low to negative interest rates.

The JGB plans also feature a rare year-on-year cut in the issuance of 10-year JGBs: such a reduction is the first since fiscal 1998.

According to MarketNews, the government is also trying to reduce its dependence on debt issuance for financing a budget deficit for the third consecutive year. In fiscal 2017, it plans to meet rising social security and other costs by using funds set aside for currency market operations in the face of slow tax revenue growth.

Looking to capitalize on still record low , and in many cases negative, rates around the curve, the MOF will reduce the issuance of 20-, 10-, 5-, 2-, and 1-year debt while raising the share of 40-year bonds to take advantage of continued low bond yields caused by the Bank of Japan’s aggressive monetary easing, which has pushed some yields into negative territory. The amount of the JGBs to be sold to institutional investors through auctions in a calendar year will decrease for the fourth consecutive year in fiscal 2017 by Y5.8 trillion to Y141.2 trillion.

A partial breakdown of the shorter-end in proposed 2017 issuance:

• Y27.6 trillion of 10-year bonds, down from Y28.8 trillion in the current fiscal year;
• Y26.4 trillion in five-year notes, down from Y28.8 trillion in the current year;
• Y26.4 trillion in 2-year notes, down from Y27.6 trillion;
• Y23.8 trillion in 1-year bills; down from Y25.0 trillion.
• The ministry will also sell inflation-indexed 10-year bonds worth Y1.6 trillion, down from Y2.0 trillion in this fiscal year.

Additionally, the government will continue issuing more 40-year debt totaling Y3.0 trillion on a calendar year basis, up from Y2.4 trillion in the current year. The issuance of 30-year debt will be unchanged at Y9.6 trillion. Meanwhile, the MOF will decrease the sale of 20-year bonds to Y12.0 trillion in fiscal 2017 from Y13.2 trillion in fiscal 2016 in response to declining investor demand.

The ministry plans to auction liquidity-providing bonds worth Y10.8 trillion next fiscal year, up from Y9.6 trillion. These auctions are aimed at providing the market with additional bonds to cope with specific shortages.

While the ECB has been fighting with a lack of eligible collateral in recent months, which have sent the 2Y Bund to record low yields in a year-end scramble by banks to window dress their books, a similar problem has emerged for Japan, where massive asset purchases by the BOJ are “drying up the bond market” according to MNI. At the end of September, the BOJ held about 38% of Japan’s debt outstanding that has topped Y1 quadrillion (Y1,000 trillion), double of its GDP.

The MOF assumes an interest rate for fiscal 2017 of a record low 1.1%, down from 1.6% in the current year. It is based on the BOJ’s new policy framework under which it is trying to  keep the 10-year Japanese government bond yield around zero percent. Indicatively, a 0.5% point drop in the assumed interest rate is estimated to trim borrowing costs by Y500 billion.

Some additional details of the proposed budget:

• The MOF will sell Y34.37 trillion in new bonds to finance the fiscal 2017 budget, down from this year’s initial plan to sell Y34.43 trillion. The issuance of JGBs to refinance maturing bonds will fall to Y106.1 trillion from Y109.1 trillion.
• Bonds issued to help rebuild Japan’s northeastern region hit by the 2011 earthquake will also decrease to Y1.5 trillion from Y2.2 trillion while bonds to finance the Fiscal Investment and Loans Program will fall to Y12.0 trillion from Y16.5 trillion.

What does this mean from a market standpoint?

Well, if nothing changes on the BOJ QE side, the 5% reduction in gross issuance means that, “all else equal” Japan’s QE just got a 5% boost as the BOJ will have Y8 trillion less primary issued bonds to monetize, leading to even greater purchases from private holders to offset the difference. Implicitly, it means an expansion of QE, not a taper as some have speculated.

Perhaps in confirmation of this, the USDJPY spiked on the report…

… while 10Y JGB yields have continued to decline:

The question is whether all else will be equal, or if Kuroda will take the hint from the MOF and at the next BOJ conference cut the amount of BOJ QE by a similar, if not greater, amount, especially if indeed the central bank is expecting faster growth and a pick up in global inflation.

Finally, with the ECB recently tapering as well, many have wondered if and when the BOJ will join the global tightening party. Today’s MOF announcement may be just the catalyst to get the ball rolling.

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From “big man on campus” to J.V…

Source: Townhall.com

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Italy’s Monte Paschi isn’t the only institutions that is about to soak retail investors who thought that two bailouts for Italy’s third biggest bank in two years wouldn’t be followed by a third nationalization in year #3. According to the South China Morning Post, a Chinese multi-billionaire businessman has defaulted on bonds worth a paltry 100 million yuan ($14.4 million) that he raised from retail investors, citing “tight cash flow”, according to reports.

Wu Ruilin, chairman of the Guangdong based telecom company Cosun Group, has a personal fortune of 98.2 billion yuan, or just over $14 billion, China Business News (CBN) reported citing an audit by a third party. That makes Wu wealthier than Baidu’s founder Robin Li, who has 98 billion yuan and is ranked 8th on the Hurun Rich List 2016.

And yet, despite the founder’s personal fortune, according to a notice put up by the Guangdong Equity Exchange on Tuesday, two subsidiaries of Cosun Group are each defaulting on seven batches of privately raised bonds they issued in 2014. According to the notice, “the issuer had sent over a notice on December 15, claiming not to be able to make the payments on the bonds on time, due to short-term capital crunch.”

The good news, is that Wu is allegedly making unlimited guarantees for the principal and interest on the bonds with, what SCMP calls, “all of his legitimate wealth.” Meanwhile, Zheshang Property and Casualty Insurance Company is responsible for the bonding insurance that guarantees scheduled payments of interest and principal on the bond, the notice said.

The bad news is that neither Wu nor the insurer had put the payments into the relevant account by 5 pm on Tuesday, according to the exchange notice. Although the bourse did not specify the value of the bonds, CBN said they were together worth around 100 million yuan.

SCMP adds that calls to Cosun went unanswered on Wednesday.

Philip Sun, an analyst with central China based JZ Securities, said it made no sense for Wu to “purposely defaults on the bonds” as it would “severely affect his credit and make institutional investors panic”, which would create bigger problems for him.

“Either he was building his business on high leverage, or he is determined to count on the insurer, but it is for sure he really has a severe cash crunch,” said Sun. CBN reported, somewhat redundantly, that some investors said they would sue Cosun and Wu Ruilin himself.

Still, one wonders if the (formerly) prosperous company of a Chinese billionaire is on the verge of bankruptcy due to a “severe cash crunch”, just how bad is the cash crunch behind the scenes in China, and how much longer can the PBOC keep keep the charade that all is well going?

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At first, James Comey was nothing more than an incompetent stooge, working within a hyper-partisan Department of Justice, who botched the Hillary email investigation by missing simple, publicly available signs of intent like Paul Combetta’s now infamous Reddit thread.  Then, after reopening the email investigation just days before the election based on new evidence discovered on Anthony Weiner’s computer, Comey immediately became a “Republican Operative” and most likely a “Russian Puppet” as well.

As we predicted yesterday (see “FBI Warrant For Clinton Emails Released As Democrats Slam Decision: ‘I Am Appalled’“), angry democrats, after first pursuing a failed recount effort and then a failed effort to flip the Electoral College, are now setting their sites on James Comey in a renewed effort to, at best, delegitimize a Trump presidency and, at worst, nullify an election. 

Yesterday, we noted commentary from lawyer Randol Schoenberg who sued for the Hillary warrant to be released and has since expressed that he is “appalled” by its contents which failed to present “probable cause.”  Now long-time Clinton lawyer, David Kendall, is weighing on the warrant which he says showed “extraordinary impropriety.”  Of course, most of you will recognize Kendall as the lawyer that has defended the Clintons on everything from Whitewater and Monica Lewinsky in the early days until now.  Per Reuters:

The FBI acted inappropriately when it announced the revival of its investigation into Hillary Clinton’s private email setup days before the Nov. 8 presidential election, Clinton’s lawyer said, citing search warrant documents made public on Tuesday.

 

The pointed criticism from Clinton attorney David Kendall followed the release in federal court in Manhattan of documents related to an October search warrant targeting emails involving the Democratic presidential nominee.

 

Kendall said the documents showed the “extraordinary impropriety” of Comey’s letter, which “produced devastating but predictable damage politically and which was both legally unauthorized and factually unnecessary.”

Of course Harry Reid has used his Senate position to constantly bash Comey in recent days referring to him as “Republican Operative” while Bill Clinton recently told the press definitively that “James Comey cost her the election.” Per The Hill, there is no shortage of leftists eager to throw the blame on anyone other than their failed candidate. 

Democrats, appalled by the fallout from his letter to Congress, have argued that Comey’s unprecedented disclosure in the final days leading up to the election was a massive break from bureau policy that blunted Clinton’s path to the White House. They say that although the FBI announced two days before the election that the new emails would not change its conclusions in Clinton’s case, the damage was done.

 

Critics hammered Comey’s vague letter for igniting a firestorm of speculation that the new emails contained a “smoking gun” — without providing any substantive information for voters to judge.

 

“Today’s disclosure might be worst abuse yet. DOJ goes out of its way to avoid publicly discussing investigations close to election,” former Justice Department spokesman Matthew Miller said in a Twitter storm at the time. “This might be totally benign & not even involve Clinton. But no way for press or voters to know that. Easy for opponent to make hay over.”

Of course, Comey himself highlighted the risk of being “misunderstood” but went forward based on the thought that it “would be misleading to the American people were we not to supplement the record.”

Comey himself was aware of the risks associated with the late October missive. In an internal memo to FBI employees, he acknowledged that “there is significant risk of being misunderstood.”

 

“We don’t ordinarily tell Congress about ongoing investigations, but here I feel an obligation to do so given that I testified repeatedly in recent months that our investigation was completed,” Comey wrote. “I also think it would be misleading to the American people were we not to supplement the record.”

 

But throughout, Comey has been strident in his defense of probe.

 

“You can call us wrong, but don’t call us weasels. We are not weasels,” Comey declared during a House Judiciary Committee hearing during which Republicans suggested he had caved to political pressure from above.

 

“We are honest people and … whether or not you agree with the result, this was done the way you want it to be done.”

We wonder where all these angry democrats were when this happened?

We think it’s time to let this one go Hillary…perhaps a dose of your own advice would help: “Look, some people are sore losers you know.  And we just gotta keep goin…”

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Submitted by Codi Robertson via The Clarion Project,

A newly-leaked German intelligence report states Saudi Arabia, Kuwait and Qatar are funding extremist Islamic groups in Germany.

German Foreign Minister Frank-Walter Steinmeier (R) and his Saudi counterpart Adel al-Jubeir give a joint press conferenceat the Foreign Ministry in Berlin.

The German newspaper Süddeutsche Zeitung and Northern German public radio broadcaster  Norddeutscher Rundfunk saw the brief and raised concern regarding a reported increase in Salafism, an ultra-conservative movement within Sunni Islam, within Germany.  

The report, compiled by German domestic intelligence agency Bft and Federal Intelligence Agency (BND) allegedly accuses Saudi Arabia and the two Gulf nations of funding various Islamic institutions including mosques and religious schools, as well as individual strict preachers and conversion, or “dawah” groups.

The three countries supported missionary groups as a “long-running strategy to exert influence,” according to the report.  More specifically, the report called out  the Saudi Muslim World League, Sheikh Eid Bin Mohammad al-Thani Charitable Association and the Kuwaiti Revival of Islamic Heritage Society (which is banned in both the U.S. and Russia for allegedly supporting al-Qaeda).  

The report found that these organizations have strong ties to the governments of their home countries.  

Neither of the German intelligence agencies have confirmed the accuracy of the leaked report.  There are some who say that say the leak was made intentionally so that Germany would cease controversial arm sales to Saudi Arabia.  

While Germans await official word from the intelligence agencies, Saudi Arabia’s German ambassador, Awwas Alawwad, completely rejected the report, stating that his country has “no connection with German Salafism.”  

Weeks before the leak, German authorities  banned the Islamic missionary group Germany Die Wahre Religion (DWR), or “The True Religion,” after officials found was “bringing jihadi Islamists together across the country under the pretext of preaching Islam.”

Germany, of course, is not new to the threat of Islamic terrorism.  An attack Monday on a Christmas market in Berlin left 12 dead and close to 50 injured. Two two attacks carried out by Islamic State supporters this past July. 

Also, suspicion that Saudi Arabia is funding terrorist organizations is not new.  Especially since the recent disclosures by the Saudis that they had, in fact, funded extremism in the past.

If it is discovered that the Saudis are still funding extremist Islamic groups, it could prove devastating for the West, as Saudi Arabia has been considered one of the few Middle Eastern countries that the West can call an ally.

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