Tag: finance

On Wedensday the FOMC will hike rates by another 25 bps – an event which the Fed Funds market prices in with near virtual certainty, while Goldman calls the rate increase “extremely likely” – and only a “tail” event like an extremely weak CPI report on Wednesday morning, hours ahead of the Fed announcement, has any chance of preventing  this outcome. So with the next rate hike virtually inevitable, questions are focused on not only the Fed’s exit strategy for balance sheet normalization and what the “dots” or funds rate path will look like, but how the Fed squares rising rates with the recent string of inflation misses.

As Goldman’s Jan Hatzius writes, data since the March meeting has sharpened the dilemma that both sides of the mandate are sending increasingly different signals about the urgency of further tightening. “The unemployment rate has fallen 0.4pp since the March meeting and our current activity indicator and real GDP estimates signal that above-trend output growth will produce further labor market improvement. But the year-over-year core PCE inflation is now 0.2pp lower than at the March meeting.”

While conceding that a hike is guaranteed, Goldman notes that two issues should make this meeting particularly interesting.

• First, will Fed officials alter their policy views in response to the increasingly different signals that both sides of the mandate are sending about the urgency of further tightening?
• Second, will the press conference provide some clarity on what the next tightening step following the June hike will be?

As a result of the weaker than expected inflationary prints, Goldman believes the recent data do not call for a major change in the Fed’s policy outlook. While Hatzius expects the FOMC to lower its estimate of the structural unemployment rate by a tenth next week, even with that assumption, the new data have broadly offsetting implications for the policy outlook in standard Taylor rules. Highlighting recent Fed communications, Goldman believes the Fed will follow “a balanced approach in dealing with the dilemma.”

It also means that the statement will likely characterize economic activity as “picking up but recognize that inflation slowed since earlier this year.” On the other side, Goldman sees a signal of heightened inflation concern as the main dovish risk and an upgrade of the balance of risks as the main hawkish risk.

Previewing the Fed’s Summary of Economic Projections (SEP), expect a modest downgrade to GDP growth for this year, coupled with declines in the unemployment rate to 4.3% this year and 4.2% next year. At the same time, projections for core PCE inflation are likely to fall to 1.8% this year and probably 1.9% in 2018. Reflecting the offsetting data news, expect the “dot plot” to show relatively stable funds rate projections.

On to Yellen’s press conference, which should provide some clarity on whether the next tightening step after June will be balance sheet normalization or a third funds rate hike. Goldman, as well as much of the street, expects balance sheet adjustment to start in September and the Fed hiking cycle to resume in December. With respect to the balance sheet, the Fed will initially cap the amounts of securities that can run off in any given month of $10bn for UST and $5 billion for MBS, that rise over four quarters to caps of $40 billion and $20 billion, respectively.

* * *

Some more details. Here is Goldman on the current economic situation, and how it will be (mis)read by the Fed.

Another rate increase from the FOMC next week is now extremely likely. Only an extremely weak CPI report on Wednesday morning or another tail event would prevent the committee from hiking. The committee probably also still expects a total of three hikes and the start of balance sheet adjustment in 2017.  

But two issues should make this meeting particularly interesting.

• First, will Fed officials alter their policy views in response to the increasingly different signals that both sides of the mandate are sending about the urgency of further tightening? We expect both lower unemployment and inflation paths in the Summary of Economic Projections (SEP) but relatively stable funds rate projections as the labor market and inflation data surprises, in the words of San Francisco Fed President John Williams, roughly “wash out”.
• Second, will the press conference provide some clarity on what the next tightening step following the June hike will be? We expect a detailed balance sheet announcement in September and a third rate hike in December but the reverse order is also plausible.

 

We believe both labor market and growth data in hand make a strong case for a rate increase next week and to remain upbeat about the outlook. Both our current activity indicator —down from 4.0% in February to 3.0% in May— and real GDP estimates—up from 1.2% in Q1 to our 2.3% Q2 tracking estimate—signal above-trend output growth (Exhibit 1, left panel). The medium-term growth outlook is also decent despite the lower odds of significant fiscal easing. The more important reason why growth should stay firm is the easing in financial conditions. Our FCI is at the easiest level since early 2015 and has  eased by 50bp since the March FOMC meeting. As the right panel of Exhibit 1 shows, the expected effect on GDP growth from changes in financial conditions for 2018H1 is now more than 0.3pp higher than at the March meeting.

 

 

Spare capacity continues to diminish, and the unemployment rate has fallen 0.4pp since the March meeting to a 16-year low of 4.3% (Exhibit 2, left panel). While nonfarm payroll growth has recently softened a bit, the average monthly gain of 162k year-to-date is still double our 85k estimate of the “breakeven” rate needed to keep the unemployment rate unchanged. While slack measures have declined more than expected, weak inflation data in April and especially March pushed the year-over-year pace of core PCE inflation 0.2pp lower than at the March Meeting (Exhibit 2, right panel). Both a Taylor rule framework and recent Fed communications suggest that the new data have broadly offsetting implications for the policy outlook.

 

 

Exhibit 3 translates the labor market and inflation surprises into changes in the appropriate funds rate via a standard Taylor rule framework. The original Taylor rule implies that a 0.2pp decline in inflation lowers the appropriate funds rate by 30bp while a 0.4pp reduction in the unemployment rate raises the appropriate funds rate by 40bp. In a modified “Taylor 1999” rule, the impact of employment is doubled  relative to the original version. This means that the impact of a 0.4pp reduction in unemployment rises from 40bp to 80bp. The left panel of Exhibit 3 thus suggests a 10-50bps higher appropriate funds rate.

 

 

But the decline in the unemployment rate may overstate the surprise if some decline was expected. Similarly, the decline in inflation can understate the surprise if some firming was expected. The middle panel of Exhibit 3 therefore compares actual unemployment and inflation moves to our expectations as of the March meeting and has less hawkish implications than the left panel. Finally, a lower estimate of the structural unemployment rate also reduces the decline in the unemployment rate gap. On net, we estimate the new data—combined with a 0.1pp downgrade of the structural rate—would have an exactly neutral effect in the Taylor 1999 rule that Chair Yellen has discussed repeatedly.

What has the Fed communicated in recent week.

Recent Fed communication suggests that the committee will also consider surprises on both sides of the mandate as roughly offsetting. As Exhibit 4 shows, several Fed officials have emphasized that there is now little labor market slack left. The inflation language in the May minutes was quite balanced as ”most participants viewed the recent softer inflation data as primarily reflecting transitory factors, but a few expressed concern that progress toward the Committee’s objective may have slowed.”

 

 

Since the May meeting, inflation for April has been weak for core CPI (0.9% annualized) but roughly in line for core PCE (1.8% annualized). The April inflation reports and recent comments by some Fed officials including Chicago Fed President Evans suggest that additional signs of heightened inflation vigilance are a dovish risk relative to our expectations. Governor Powell said that “there are good reasons to expect that inflation will resume its gradual rise but it is important to demonstrate a strong commitment to achieving our symmetric 2 percent objective” while Philadelphia Fed president Harker said that “we’re still on track for inflation” and that he is “looking at the trend.”

 

In light of these developments we expect to the committee to make three key changes to its post-meeting statement next week. First, we expect the committee to replace “consumer prices declined in March” by “inflation slowed since earlier this year” reflecting the core CPI miss in April. Second, we expect the statement to upgrade the growth assessment with verbiage along the lines of economic activity “appears  to have picked up” and to note that household spending “appears to be accelerating”. Third, we expect the committee to tacitly signal balance sheet run-off later this year by adding the qualifier “for the time being” to the description of its existing reinvestment policy.

 

A signal of heightened inflation concerns is the key dovish risk. The committee may, for instance, drop the “somewhat” from “inflation continued to run somewhat below 2 percent”. In terms of hawkish risks, an upgrade of the balance of risks is possible through the removal of “roughly”, reflecting improved domestic and international growth. We also expect Minneapolis Fed President Neel Kaskhkari to dissent as he recently described the move of inflation in “the wrong direction” as “concerning”.

What about the revised Summary of Economic Projections

The June FOMC meeting will include the quarterly update to the SEP. We expect significant changes to the unemployment and inflation projections but relatively stable funds rate forecasts, reflecting offsetting job market and inflation news.

 

1. Slightly lower GDP growth: Assuming our Q2 GDP tracking 1. estimate of 2.3%, GDP growth will average 1.7% annualized over the first half of 2017, so it would take a 2.4% growth rate in H2 to meet the policymakers March SEP estimate of 2.1%. We expect the 2017 median to fall to 2.0%, with risk tilted to the upside. We forecast that the median estimates for GDP growth in 2018-2019 and in the longer-run will remain unchanged.

 

2. Lower unemployment rate. The unemployment rate fell 0.4pp since the March meeting when the median unemployment rate projection was 4.5% for the forecasting horizon. We expect the median to fall to 4.3% in 2017, 4.2% in 2018 (with risks of 4.3%) and 4.3% in 2019. The estimate of the structural unemployment rate is quite likely to fall further from 4.7% to 4.6% in response to large declines in the actual rate and recent news on prices and wages. The decline in NAIRU would limit somewhat the projected employment overshoot but is a close call.

 

3. Lower core PCE inflation. We expect the 2017 median core PCE projection to fall to 1.8% and perhaps 1.7%. To reach 1.8% by year-end, monthly core PCE inflation would need to accelerate to an annualized rate of at least 1.9%. We believe the 2018 forecast also drops a tenth to 1.9% as some members now likely feel a bit less confident about the inflation outlook.

 

 

 

4. Relatively stable median dots. We expect most participants, especially those in the center of the committee, to stick to their March dots reflecting offsetting inflation and unemployment moves. We also believe that the committee probably still expects a total of three hikes in 2017. The retirement of Tarullo lowers the numbers of participants to 16 from 17 in March and is likely to move up the median 2018 dot from to 3 to 3-1/2 hikes next year. As the FOMC is extremely likely to hike for the second time this year next week, we expect that the 2017 one-hikers will shift to projecting 2 hikes in total for this year. We also assume that the new Atlanta Fed President Bostic votes like his predecessor Lockhart and that the new Richmond Fed President Mullinix lowers the Richmond Fed dots a bit.

Finally, how will the Fed “renornalize” its Balance Sheet.

We expect to get some more clarity next week on balance sheet runoff at the press conference and possibly also with an augmented Policy Normalization Principles and Plan. We continue to look for normalization to be announced in September. Here we update our projections for balance sheet runoff:

 

1. Start Date: We expect a detailed announcement in September  but would not be surprised if it came in December as guidance has been mixed. The May minutes suggest a start in September as an announcement at the December meeting would leave little time to “begin reducing the Federal Reserve’s Securities this year”. But guidance on the start of runoff by Governor Brainard after the funds rate gets midway to its long-run value of 3.0% and by New York Fed President Dudley “sometime later this year or next year” supports December. We think that announcing the start of balance sheet adjustment in September and keeping open the option of foregoing the third 2017 hike is the more prudent course of action given the mixed recent data and the potential for fiscal turmoil in Washington in Q3 related to the need for a debt ceiling hike and an extension of spending authority. We think the detailed announcement in September will be followed by the actual start of runoff of assets in October.

 

2. Process for phasing out reinvestment: The May minutes signaled that the committee will preannounce a schedule of gradually increasing caps to limit the amounts of securities that can run off in any given month. Our assumption is that that the initial caps are $10 billion a month for UST and $5 billion a month for MBS. The caps would rise each quarter by $10 billion and $5 billion to $40 billion and $20 billion respectively. Exhibit 7 shows that caps allow for a gradual runoff and deal with the variability associated with MBS prepayment and the irregular monthly schedule of maturing assets. The caps will remain in place after the phase-in but then only bind in roughly a third of the months for Treasuries until mid-2020 when the balance sheet reaches its projected terminal size.

 

3. Terminal size: We expect the Fed to maintain a balance sheet that 3. is relatively large by historical standards given several advantages of a large balance sheet related to monetary policy implementation and regulatory needs. Our calculations suggest that a monetary policy implementation through a floor system implies a terminal size of roughly 15.5% of GDP. While support from the New York Fed for the large balance scenario makes this outcome quite likely, there is no urgency yet in deciding on the size and on the composition of the terminal balance sheet.

 

Goldman’s conclusion:

A third consecutive quarterly rate increase next week is now extremely likely, in our view. Only an extremely weak CPI report on Wednesday morning or another tail event would prevent the committee from hiking. The data news since March has sharpened the dual mandate dilemma policymakers are facing. Our own view is that the inflation and unemployment surprises have been roughly offsetting but that the range of outcomes has widened somewhat. While the inflation outlook is uncertain, the dilemma will most likely resolve itself as inflation gradually accelerates. We therefore expect policymakers to remain focused on tightening mostly with the funds rate but also soon with the balance sheet tool.

And while we agree with Goldman in theory, one thing the bank has omitted in principle is that according to the Fed’s own commercial loan data, the US economy may be just 4-6 weeks away from posting its first negative C&I loan print since the financial crisis: a virtually failsafe indication of an imminent (or concurrent) recession.

Which means that, as we explained yesterday, the Fed is about to hike in not only a disinflationary phase of the economic cycle (which is largely a function of the slowdown in the Chinese commoity bubble, and the collapse in the Chinese credit impulse), but also into what may be an outright recession in the US. If so, look for the yield curve to do what it has always done in the past after the Fed hikes rates: flatten, then flatten some more, than go horizontal, and eventually invert.

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Authored by Steve St.Angelo via SRSroccoReport.com,

The Central banks bought a staggering $1.5 trillion in assets in the first five months of the year to keep the economy from imploding while at the same time, capping the gold price.  Yes, it’s true…. $300 billion a month of Central bank asset purchases pushes up STOCK, BOND and REAL ESTATE values while it depresses or caps the gold (or silver) price.

The amount of Central bank asset purchases are now reaching insane levels.  And they have to.  It is the same thing as being a drug addict.  Once, someone starts down the road of drug addiction, it takes more and more of the drug to reach the same effect.  Thus, when Central banks started purchasing assets to prop up the market, they have to continue, and they have to continue buying even more.

In a previous article, I published this chart showing Central bank asset purchases up until the first four months of 2017:

This chart came from a Zerohedge article that showed the Central banks purchased $1 trillion in assets in just the first four months of 2017, and the total of their balance sheets reached $14.6 trillion.  In just five years, Central banks purchased $7 trillion in assets.  However, in the first four months of 2017, they ramped it up to $1 trillion.  Which means, the Central Bank asset purchases could reach $3.6 trillion annualized in 2017, surpassing half of all official purchases in the past five years.

That’s a lot of PROPPING UP folks…. and it also has totally depressed and capped the gold price.   But, not for long.

However, before I get into some really interesting charts on just how crazy things are getting in Central bank land, I would like to share some of my sentiments about what is taking place in the Good ‘ole U.S. of A.

BRAIN DAMAGE & INSANITY Have Taken Root In America

Unfortunately, many Americans are now suffering from increased levels of insanity and brain damage… and it’s only getting worse.  That being said, I really can’t blame them.  Everyday most Americans, from sunup to sundown, receive a constant flow of Mainstream media advertising and propaganda.  And it’s even more damaging for the little tots and kids.

From infancy to adolescence, kids receive a tremendous amount of brainwashing via the TV, I-phone and internet.   When a tiny tot is sitting in front of a TV all day watching someone named Sparky the clown telling the child to eat sugar loaded with a smattering of cereal, this is the first step in turning that infant into an attention-deficit hyper-active kid that will not only drive his-her mother and father completely insane, but also all the teachers and public that has to deal with this wonderful child in the future.

As the child grows up, it now needs a lot of sugar or the screaming starts.  I know of this first hand when I travel on the road and stop at one of the newer Mega-Travel-Stops on the interstate.  Maybe some of you have been into one of these new Mega-Travel-Stops that have RV & Big Truck fuel pumps along with 100 gas pumps for regular cars and trucks.

On a busy travel weekend, I would recommend anyone who hasn’t visited one of these fine establishments, to take a bit of time out of your day… to do so.  When you get in there, it can be complete CHAOS.  Of course, there are many fully wired adults and lots of screaming kids looking for their junk food fix.  I have seen some kids grab bags of chips, take them to their parents standing in line at the checkout counter… and when the parent said no, the kid took the bag and threw it back on the wrong place on the shelf.  Many times the bag fell on the floor, and the parent did the RIGHT THING… and ignored it… LOL.

I gather if you apart of the mass exodus of families out of the suburbs on the weekend get-a-way, this may seem normal… the CHAOS, ya know.  Basically, these Mega-Travel-Stops are frogs boiling in the water and no one seems to notice, and no one seems to care.

Anyhow… after Americans spend top dollar just to live in a McMansion or some other shoddy built suburban home, with all the bells and whistles, they have to spend even more money to GET AWAY FROM IT ALL during the weekend.  Of course, this makes perfect sense when we have gone completely insane.

Think about this for a minute.  Many Americans spend 40-60 hours during the week to afford the dream home with white picket fence in the suburbs, located six feet from their neighbor, but as soon as Friday rolls around, they grab the kids, the RV and get out of there AS FAST AS POSSIBLE.

So, this is our new economy.  Americans working jobs they hate, to buy a house they can’t wait to leave just as soon as the weekend arrives.  And all of this is being propped up by massive amount of debt and Central bank asset purchases.

That’s the insanity.  Now, let’s discuss the brain damage.

Brain damage impacts Americans in different ways.  However, the majority who have the illness, don’t realize they are inflected.  So, they continue on their marry life, not realizing the brain damage is getting even worse.

So, what do I mean by brain damage?  It’s quite simple.  A person who suffers from brain damage, actually believes a new Credit Card in the mail is a like winning a small lottery.  Thus, they are able to go out and buy more garbage and crap to fill up an already stuffed house or rental storage facility.  Brain damaged Americans no longer understand THRIFT, FRUGALITY or PRUDENCE.

Rather, Americans are racing 70 mph down the interstate, spending money they don’t have on lots of screaming kids, just to get away from it all.  And it gets even worse.  No, I am not kidding.

In the past, I have tried to share some of what I know about the economic and financial insanity to family and friends, but the response was normally the same, THAT I WAS LOSING MY MIND, and… “Don’t worry… Everything is Fine.”  You see, when someone has severe brain damage, they believe BAD is GOOD, WRONG is RIGHT, DEBTS are ASSETS and so on and so forth.

Lastly, when someone responds by saying, “Gold is just a Barbarous Relic”, well then… you know the BRAIN DAMAGE is now irreversible.  The poor slob is past the point of no return… and is not curable.  All we can do is keep our mouths shut during holiday get-to-togethers, eat the junk food and hope and pray there aren’t too many screaming kids.

Okay… enough of my rant.  Let’s get back to the good stuff.

Central Bank Asset Purchases & Their Impact On Gold

As I mentioned in the beginning of the article, Central Banks purchased $1 trillion of assets in just the first four months of the year.  However, they did one better as they added another half trillion in May… LOL:

So, the total for the first five months of the year, is a staggering $1.5 trillion.  Also, we can see that the Central bank balance sheet is now $15.1 trillion, up from $3.5 trillion before the 2008 U.S. Housing Market and Banking collapse.

If we compare the Central bank balance sheet as a percentage of GDP, we have the following wonderful chart:

If we are not suffering from brain damage, we can clearly see here that Central banks balance sheets now account for nearly 40% of GDP.  The reason the total Central bank balance sheet in the chart above is higher than the previous chart, is that this one includes China’s official bank balances (PBOC).  If the Central banks balance sheets now account for 40% of GDP, well then, we are in serious trouble when the punch bowl is taken away.

Also, according to a recent zerohedge article, “Nothing Else Matters”: Central Banks Have Bought A Record $1.5 trillion In Assets In 2017, they republished the chart below and stating the following:

 

The latest data means that contrary to previous calculations, central banks are now injecting a record $300 billion in liquidity per month, above the $200 billion which Deutsche Bank recently warned is a “red-line” indicator for risk assets.

If Deutsche Bank warned of a “RED-LINE” for risk assets at the $200 billion a month for Central bank asset purchases, than what in the hell is going on when they are now buying $300 billion a month??  And how much is $300 billion a month??  It’s quite a lot when we look at the following chart below:

As the Central banks purchased an average of $300 billion a month in assets to prop up the markets, it totally overshadows the $10.7 billion a month of global gold mine supply (based on spot price of $1,250).  Thus, Central bank monthly asset purchases are 28 times more than the value of the global gold mine supply.  This is totally insane when we realize gold is still a monetary asset on Central banks balance sheets.

However, it is even more incredible when we compare Central bank asset purchases for the first five months of 2017 versus gold:

According to the data I published in my article, How High Will Silver’s Value Increase Compared To Gold During The Next Crisis?, total global gold investment is approximately $3 trillion.  That’s everything which includes Central Bank gold inventories, and all large and small public-private gold holdings.

So, we can plainly see in the chart above, that $1.5 trillion in Central banks asset purchases in just the first five months of the year, would have bought HALF of all Global Gold Investment.  I repeat… HALF OF ALL GLOBAL GOLD INVESTMENT.

Which brings me to the subject of “Frustrated Precious Metals Investors.”  I continue to see precious metals investors who are extremely frustrated by the so-called “WRONG CALLS” by the analysts on the gold and silver price movements.  Yes, it is true that many of us didn’t realize the degree in which the Central banks would go to prop up the markets… but this is getting completely insane now.

If the Central banks were to stop purchasing assets… then the markets would collapse.  Heck, they are trying to collapse even with the massive Central bank intervention.  The signs are everywhere.

Folks, without the over $12 trillion in Central bank asset purchases since the 2008 U.S. Housing Market and Banking collapse, the gold price would have been stunningly higher… so would the silver price.

This brings me to an excellent comment that gold analyst Jim Rickards made in a recent interview.  He said that the 1998 Long Term Capital Management Hedge Fund collapse, that nearly took down the entire system, was bailed out by the Financial Banks (16 financial institutions bailed out LTCM).  When the financial banks were in BIG TROUBLE in 2008, the Central banks bailed them out.

However… who is going to bail out the Central banks when they get into trouble???  And they are getting into serious trouble.  Unfortunately, there is no one left to bail out the system when the Central banks finally lose control.

If the Central banks try to pull back on asset purchases, then the market will start to do a NOSE-DIVE.  This would likely motivate them to come back in with ALL GUNS BLASTING.  So, pay attention to the increase in Central bank asset purchases as a clue to know when they are becoming desperate.

This massive increase in Central bank asset purchases is a last ditch effort to prop up the market and cap the gold price.  While they may have more propping up to do, they will likely have to increase their level of buying even more.  As it goes exponential… then we know the END IS NEAR.

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Violence in Venezuela, South America’s crumbling socialists paradise, is intensifying as street clashes between anti-government protesters and government forces enter their third month. At least 67 people have died since the demonstrations began, including 18-year-old Armando Canizales, who the New York Times described as a “success story of Venezuela’s state-run music program for the poor.”

As the country’s economic and humanitarian crises worsen, President Nicolas Maduro is taking steps to consolidate power within the presidency. Maduro is now calling for the formation of a new “constituent assembly” that the country’s pro-government electoral council will vote on in July that will allow him to rewrite the country’s constitution before he faces an election in the fall. These decisions effectively guarantee that the violence will continue, as the opposition cries for his ouster.

The economic troubles – exacerbated by (but not initiated by) the drop in oil prices that began during the summer of 2014 – have caused inflation to soar above 10,000% as Venezuela’s currency, the bolivar, trades at a black-market rate of nearly 8,000 to the dollar, according to dolartoday.com. Meanwhile, the central bank’s foreign currency reserves have dwindled to $10.6 billion.

Venezuela, a member of OPEC, has the largest oil reserves of any nation on Earth. But OPEC’s fragile production cuts have failed to push the price of crude above $50 a barrel. On Tuesday, it announced that an unexpected surge in production by Iraq raised the bloc’s total production in May, validating the market’s doubts about an agreement between the bloc and a handful of other oil-exporting countries to extend a production cut that began in December. With global oil supplies near record highs, the hoped-for recovery in oil prices – key to alleviating Venezuela’s acute financial stress – is a long way off.

Photos from the daily clashes depict a level of violence that has long since become normal.

An opposition demonstrator wears a gas mask in a clash with police in Caracas.

Riot police officers confront opposition activists during a demonstration in Caracas.

Employees of the administration headquarters of the Supreme Court of Justice try to put out the fire of a burning vehicle.

Deputy of the opposition Carlos Paparoni is hit by jets of water during riots at a march to the state Ombudsman's office.

Venezuelan opposition activists launch a firework with a tube during clashes with riot police.

 

A demonstrator throws a Molotov cocktail during a rally.

 

A demonstrator shows an injury caused by a rubber bullet.

 

Demonstrators look on as motorcycles belonging to riot security forces are set on fire.

See more images here (courtesy of The Atlantic).

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Authored by Mike Krieger via Liberty Blitzkrieg blog,

Comedian Lee Camp has hosted a show on RT called Redacted Tonight since 2014. While I certainly don’t always agree with his conclusions, he’s clearly a passionate, genuine and highly intelligent American who cares deeply about the country and the people living in it. He believes (rightly), that our fellow citizens are are suffering unnecessarily due to our demonstrably parasitic, corrupt, imperial, oligarchic, corporate-state. Because he possesses such attributes, The New York Times found it necessary to dispatch one of its minions to write an embarrassing, unprofessional and downright shady piece of propaganda about him.

His response is lengthy, but it’s also extremely important for everyone to read in full. It provides further evidence that those who peddle in fake news and shoddy, deep state propagandist drivel should not throw stones. The New York Times needs to get its own house in order before whining about how everyone else is so deficient.

Below are some of the more outrageous excerpts from his excellent rebuttal. You can read it in full at Naked Capitalism:

This past Thursday the New York Times vomited up a hit piece on little ol’ me – a guy who has been doing stand-up comedy for nearly 20 years and thought maybe that comedy could be used to inform and inspire audiences, rather than just make fun of the differences between men and women.

 

At first when you’re the center of a smear job, you’re annoyed and frustrated. But as I read further through the piece, I realized it was a master class in how to write propaganda for one of the most “respected” news outlets in our country. I’m actually grateful it was written about me because now I can see with my own eyes exactly how the glorious chicanery is done. I count no less than 15 lies, manipulations, and false implications in this short article, a score that even our fearless prevaricator-in-chief Donald Trump would envy.

 

So here now is a “How To” for writing propaganda for the New York Times – using the smear piece against me as an example.

 

Guilt by Association

 

That Mr. Camp does this on RT — which describes itself as the ‘Russian view on global news’ and which paid Michael T. Flynn, the former national security adviser, to speak at the gala where he sat next to Vladimir V. Putin — raises questions about the comedian’s independence, particularly when he delves into the conspiracy about Mr. Rich. Just last month, Andrew Feinberg, a former White House reporter for Sputnik, another Russian-financed media outlet, said that his bosses ‘wanted the Seth Rich story pushed.’

 

So now he’s somehow looping in me and my comedy news show with Michael Flynn, Putin, Sputnik (the radio channel), Seth Rich conspiracies, and I’m pretty sure he mentioned something about me hanging out with Bill Cosby.

 

Here’s the problem with that paragraph – I have nothing to do with Sputnik. I have nothing to do with Michael Flynn, Andrew Feinberg, nor Vladimir Putin. I have never spoken to or met any of them. (Nor do I speak Russian, so a conversation with Putin would consist of me grunting and trying to act out references to The Hunt For Red October.) I have never been told by anyone at RT America to say anything about Seth Rich, nor have I seen anyone being told to talk about Seth Rich, nor did my segment even support the theory that he was killed by the DNC.

 

So basically nothing in that paragraph has anything to do with me, but Zinoman wants to lead you to believe it does. This technique is called “guilt by association,” although Zinoman couldn’t actually find the “association” part so he just included a paragraph about these people to imply guilt by association. Subconsciously the reader is left to think, “If Lee Camp didn’t have anything to do with any of those things, then our fearless author would never have brought any of it up.”

 

Furthermore, Zinoman is correct that RT has said in the past that they are “the Russian view on global news” in the same way BBC has said in the past that they are “the British view of global news.” However, BBC also creates many shows that are outside the realm of straight news – such as Dr. Who. I’ve rarely heard anyone accuse Dr. Who of being the British view of global news. (Why do those crazy Brits always insist on taking flying police boxes to go everywhere?)

 

My show, written by me and my correspondents, is certainly not the Russian view of global news and neither is – for example – Larry King’s show on RT America. (I get that Dr. Who is further afield of news than my show is, but the analogy is simply meant to say these networks create shows that are not strictly straight news.) And anyone who thinks CNN, for instance, isn’t the American view of global news is kidding themselves. But I have to agree that CNN’s Anthony Bourdain: Parts Unknown did a terrible job of covering the terror attacks in London.

 

I speak only for my show – I don’t speak for any other show on RT America. I write the words I say on Redacted Tonight and have never been told I have to say anything. Compare that to… (Oh, so many examples to choose from! How can I only pick one?!)… let’s say Melissa Harris Perry on MSNBC. After being forced out she said she was censored often. As an example she said – close to showtime – that she was told not to cover Beyonce’s Black Panther inspired Super Bowl halftime show. In no uncertain terms MSNBC heads stopped her from talking about it. Perry was literally forbidden from discussing the two most popular things to ever exist on our planet earth – Beyonce and the Super Bowl (and I’m including food and sex).

 

Now that we’ve established a good foundation of guilt by association (without the association) and some priming and some baseless implications, it’s time to move on to:

 

Write Off Good Attributes That Don’t Fit the Storyline

 

Mr. Camp’s hard-edge critique of corporate greed and American policy is genuine; he was taking this line in his stand-up act before working for RT. But context matters.

 

Writing about the fact that I have spent nearly two decades involved in comedy, much of it political, much of it trying to make America better, trying to stand up for people over profit… well, that just wouldn’t fit with the author’s theme. So he had to find a way to get this stumbling block out of the way of his race to propaganda victory! He did that by casually mentioning the good attributes before writing them off as meaningless. My work and what I stand for is beside the point because “context matters.”

 

It’s What the Person Doesn’t Say That Really Matters

 

Because Zinoman wasn’t able to find any statements from me pledging allegiance to Russia, or supporting war by Russia (or anyone for that matter), or even voicing support for Donald Trump in any way, shape, or form (because none of those statements exist), he had to resort to going after what I don’t say. …And oddly, I agree with him that what people don’t say can be important, but we’ll get to that in a moment.

 

As hacking and Russia’s relationship to the Trump campaign increasingly dominate headlines, Mr. Camp’s refusal to dig into the story is conspicuous. He avoids the subject on air, and while he does criticize President Trump, his considerable comic bile rarely focuses on him.

 

Despite all his extensive research (sarcasm), Jason Zinoman failed to read the title of my show. …Redacted Tonight. I’m hoping he knows what the word “tonight” means but maybe the “redacted” part eluded him. “Redacted” means “censored,” and my show tries very hard to focus on the news that (ironically in this conversation) is NOT being covered on the mainstream media, the stuff that is being censored. As he just admitted, bullshit about Trump and hacking claims FILL the mainstream airwaves. Some of it true, some of it not, but all of it covered intensively. I have no interest in being a mainstream media or government mouthpiece for anyone – which is why I created REDACTED Tonight. It’s also why the things I say (particularly the anti-corporate things) are not allowed on any standard American TV channel. Zinoman, on the other hand, is quite content working at a propaganda outlet like the New York Times – also more on that later – and after all, context matters.

 

Zinoman tepidly says “while he does criticize Trump his considerable comic bile rarely focuses on him.” Well, first of all, for anyone who watches my show regularly, you know that hardly an episode goes by in which I don’t call Trump a megalomaniacal fascist man-boy with the decision-making capacity of a gopher recently run over by a Hummer (or something similar). You can watch some examples HERE, HERE, HERE, HERE, HERE, & HERE. In fact I went harsher on Trump than pretty much all of the mainstream media during the campaign season. Please point to the moments when Anderson Cooper or Brian Williams called Trump a fascist, or a psychopath, or photoshopped his head onto Hitler’s body. (I did all those things.)

 

And the reason I don’t spend EVEN MORE lengthy segments on him is that A) We’re the “redacted” stories, remember? The title of my show is not “Stories Everyone Has Heard 8 Billion Times On Cable News… Tonight.” And B) I don’t believe Trump is the cause of our country’s main problems. I believe he is a symptom of an incredibly corrupt corporate-ruled system. He is a horrible and rather – not bright – man, but he is not the cause of the millions of hungry and homeless and imprisoned in our country. He is not the cause of the flaws in our democracy and our media. He is just the pimple that has risen up. So either Zinoman is intentionally misunderstanding the viewpoint of my show or he’s just so desperate to push his talking points that he’s looking past it.

 

And I believe the New York Times is one of those directly responsible for making Trump president by – along with other mainstream outlets – giving him $5 BILLION of free coverage during the campaign season. In fact, Bernie Sanders supporters got so angry with the Times for their lack of coverage that the Times eventually issued a response. Even in that response in which they say they’ve covered Sanders plenty, they admit that in one sample month Sanders had 14 articles about him while Trump had 63 articles. If that distribution of coverage had been ANYWHERE NEAR even, we would have either Bernie Sanders or Hillary Clinton as president. So, Mr. Zinoman, let me know when you’d like to apologize for your outlet giving us the Trump presidency.

 

Fuck It, Insult the Guy’s Looks

 

Mr. Camp — who looks like a Broadway musical costume designer’s idea of a counterculture comedian, with ‘Jesus Christ Superstar’ hair and T-shirts bearing images of Bill Hicks or ‘Catch-22’…

The NY Times has so deeply fallen into their own propaganda hole, they’ve resorted to just insulting the looks of people they feel threatened by. I don’t know what Jason Zinoman looks like, but I’m sure it’s awesome.

Now here’s where it gets downright dastardly, and simply inexcusable.

Lie

 

Enough beating around the bush, it’s time to flat-out lie.

 

According to several people in the comedy scene, his stand-up diatribes succeeded with like-minded fans but had more trouble with crowds that didn’t share his point of view. ‘We wouldn’t book him for a weekend, let’s put it that way,’ said Cris Italia, one of the owners of the New York comedy club the Stand.

 

First of all, I’d love to know who these mysterious “comedy scene” people were. Waitresses? Busboys? Phanton of The Opera types lurking underneath the stage silently judging my satire? Unfortunately, we’ll never know because “the comedy scene” only speak on deep cover. (First rule of comedy scene – Don’t talk about comedy scene!)

 

Secondly, Zinoman claims that Cris Italia told him that the comedy club the Stand in NYC would not book me on the weekends. Cris had actually contacted me two days before the Times article came out to tell me that a reporter had reached out to him about me and that he could tell from the questions the reporter was trying to portray me in a negative light. (Read: Trying to push an agenda rather than being, you know, a journalist.) Italia said:

 

I told him you were liked by everyone. I also said what Dennis Miller, Janeane Garofalo, & Marc Maron were for their generation, you were for this generation.

 

But Zinoman did the smart thing for a propaganda machine – leave out the stuff that does not fit the false story you’re pushing. (I picture Zinoman cringing on the other end of the line as nice things are said about the unscrupulous Russian agent – Lee Camp. After jotting down the quote about Dennis Miller, he furiously rips the page out of his notebook, chews it up, and swallows it.)

 

Cris Italia says he was next asked whether the Stand would book me on a Saturday, and he replied that they don’t book headliners on weekends. (Most NYC clubs do what’s called a “showcase” show in which many comics get onstage over the course of the evening.) Zinoman – upon not getting the quote he wanted – must have figured he could slant this into something saying the Stand would not book me. He either didn’t understand Italia or chose to misquote him. So Zinoman is sloppy at best and a fraud at worst.

 

Final Step: Leave the Reader With the Same (False) Prime You Started With

 

The article wraps up by describing my live stand-up performance at the Cutting Room in NYC a few weeks ago. Zinoman attended the show and in the article wrongly states that I performed with two correspondents from Redacted Tonight. Only one of the openers – John F. O’Donnell – is from Redacted. But getting that fact correct would have required ANOTHER Google search. (The work never ends!) Zinoman of course fails to mention in his description that A) The 250-capacity room was nearly sold out with excited fans B) The show went great and I think everyone left having had a wonderful time C) My stand-up performances (unless done for a TV special) have no connection to RT America at all. They are my own events. But the author leaves all of that out even though… context matters.

 

Anyway, the article ends like this:

 

Once Mr. Camp finished and the crowd had filed out, I lingered for a minute on the sidewalk. And while there wasn’t any rally, I couldn’t help noticing two beefy guys speaking in Russian and laughing uproariously.

 

What Zinoman really REALLY doesn’t want you to know is that those “beefy Russians” were almost certainly not there for my stand-up comedy show. The Cutting Room had a show starting after mine that had nothing to do with my show. And guess what – that show was a rapper named Noize, who is described as “The most outspoken, daring and exciting Russian rapper.” That’s right, the reason there were people in line speaking Russian outside my comedy show is because they were there to see a Russian rapper that had nothing to do with me.

And don’t forget – context matters.

 

Either Zinoman knew about the rapper and decided not to reveal it (so he’s basically a liar), or he didn’t bother to look at the massive sign listing the performances, nor ask the Russians (who probably spoke English) why they were there (in which case he’s possibly the worst “journalist” to walk the earth). It’s tough to say which one of those two things is worse.

 

But describing those laughing Russians serves a purpose greater than an interesting tidbit. Zinoman sat through an entire 90-minute stand-up comedy show in which I covered everything from how our leaders force us into endless war, to how we can feed every human on the planet, to how we are sold an infinite parade of lies, to how my comedy doesn’t go over well at children’s birthday parties. He saw me cover all those important issues. He saw an audience of over 200 people loving it and coming up to meet me afterwards. He saw a guy who has fought hard for 20 years to just do stand-up comedy that matters – that enlightens and informs and entertains. He saw it all. But none of THAT fit with the propaganda he needed to push. In fact, it went against the storyline he was trying to create.

 

So instead he leaves the reader with the idea that either A) My show is meant for burly Russians (according to online analytics roughly 80% or 90% of my viewers are Americans) or B) My show is being watched over by burly Russians to make sure I don’t say anything “out of line.” Both of those are fake news. The reality is that burly Russians like a rapper named Noize.

 

I want to conclude with a little bit of context about the New York Times, and how they’ve become such a propaganda outlet that they would even hire journalists who pump out loads of fake news like this article on me.

 

Chris Hedges worked for 15 years as a foreign correspondent at the Times and won a Pulitzer for his work. He now hosts the show “On Contact” at RT America. He once said of his former employer,

 

…many at the paper have no real moral compass. They know the rules imposed by the paper’s stylebook. They know what constitutes a ‘balanced’ story. They know what the institution demands. They work hard. They have ingested the byzantine quirks and traditions of the paper. But they cannot finally make independent moral choices. The entire paper — I speak as someone who was there at the time — enthusiastically served as a propaganda machine for the impending invasion of Iraq.

 

Hedges went on to say,

 

[The senior editors] do not question the utopian faith in globalization. They support preemptive war, at least before it goes horribly wrong. And they accept unfettered capitalism, despite what it has done to the nation, as a kind of natural law.

 

The Times was a strong cheerleader for the War in Iraq. (Don’t worry though – they still have reporters out there looking for the weapons of mass destruction. …Any day now.) When Hedges came out against the Iraq War, the paper reprimanded him for “public remarks that could undermine public trust in the paper’s impartiality.” …So basically they said, “Either stand behind this flawed, illegal invasion of Iraq or else you’re not welcome at the Times.” Hedges left the paper soon after.

 

Want some more evidence of exactly how the New York Times operates? Here’s world renowned political philosopher Noam Chomsky going through a single issue of the Times in 2015 explaining how it is pure propaganda.

Zinoman should voluntarily lock himself in a dark closet for a year, or better yet, find a new profession. Preferably both.

For more on the topic, see last year’s piece: Veteran Reporter Exposes The New York Times’ Arrogant, Disconnected, Agenda Driven Perspective

via http://ift.tt/2s8qhQn Tyler Durden

Reminding us of what McKinsey reported over a year ago, namely that the world never deleveraged after the financial crisis, Citi’s Hans Lorenzen released a fascinating presentation today discussing the “invincible” stock rally, and pointing out its Achilles heel, which happens to be the thing that made it possible in the first place: central banks.

As the first charts below show, the permissive factor that allowed the world to “emerge” from the financial crisis and the global recession, was a surge in debt, which on a consolidated basis is above 360% of GDP in all five select developed regions. The chart on the right shows that while private sector releveraging has been slow, it has been drowned out by a historic surge in public sector debt.

What made this coordinated global releveraging possible? Central banks of course, who have bought over $10 trillion in public (and recently private) sector debt in the past decade, and between the world’s six largest central banks they now collectively own securities amounting to 40% of the world’s GDP.

However, it is this same unprecedented central bank balance sheet expansion that is now the biggest threat to not only the global recovery and ongoing attempts to stimulate the much needed reflation (if only to inflate away the world’s debt load), but also to capital markets around the globe.

Which bring us to what may be the scariest chart for central bankers: Citi’s forecast of what happens to the global central bank “impulse”, or annual change, over the next two years and – as Lorenzen shows – its correlation to inflation expectations via real 5Y5Y forwards. The chart cleary shows the recent contraction in global central bank assets (including Chinese FX reserves) which took place as deflation fears swept the globe and as global stocks tumbled in late 2015 and early 2016. More importantly, the chart projects when the next such contraction is expected to take place…

The chart also shows that when it comes to the S&P, the Fed’s
balance sheet is all that mattered for years until recently both the BOJ and ECB
picked up the torch and spread the “liquidity load” making the recent all time highs in the market possible, even as
the Fed’s balance sheet has been flat and the Fed has been cautiously tightening.

As Citi puts its best: “the principal transmission channel to the real economy has been… lifting asset prices.” That however has required continuous CB balance sheet growth, and with the Fed, ECB and BOJ all poised to “renormalize” over the next year, the global monetary impulse is set to turn negative in the coming year.

Meanwhile, as financial markets scramble to maximize every last ounce of what central bank impulse remains, we get such bubbles as London real estate, bitcoin and vintage cars, or as Citi puts it: “the wealth effect is stretching farther and farther afield.”

One final chart: how does it all end, and what is the “key risk” to financial stability? Here, unlike the ECB, Citi’s opinion is just a little different, and echose what we have said since the beginning:

“Monetary policy has left the allocation into risky assets stretched at very high prices in a modest recovery with major structural issues still unresolved. The efficacy of existing policy tools in the future seems greatly diminished.”

Citi’s conclusion: the “Achilles heel is the potential unravelling of distortions built up by monetary policy itself.” It hardly needs an explanation.

via http://ift.tt/2rfgwhV Tyler Durden

Authored by Patrick Buchanan via Buchanan.org,

President Trump may be chief of state, head of government and commander in chief, but his administration is shot through with disloyalists plotting to bring him down.

We are approaching something of a civil war where the capital city seeks the overthrow of the sovereign and its own restoration.

Thus far, it is a nonviolent struggle, though street clashes between pro- and anti-Trump forces are increasingly marked by fistfights and brawls. Police are having difficulty keeping people apart. A few have been arrested carrying concealed weapons.

That the objective of this city is to bring Trump down via a deep state-media coup is no secret. Few deny it.

Last week, fired Director of the FBI James Comey, a successor to J. Edgar Hoover, admitted under oath that he used a cutout to leak to The New York Times an Oval Office conversation with the president.

Goal: have the Times story trigger the appointment of a special prosecutor to bring down the president.

Comey wanted a special prosecutor to target Trump, despite his knowledge, from his own FBI investigation, that Trump was innocent of the pervasive charge that he colluded with the Kremlin in the hacking of the DNC.

Comey’s deceit was designed to enlist the police powers of the state to bring down his president. And it worked. For the special counsel named, with broad powers to pursue Trump, is Comey’s friend and predecessor at the FBI, Robert Mueller.

As Newt Gingrich said Sunday: “Look at who Mueller’s starting to hire. … (T)hese are people that … look to me like they’re … setting up to go after Trump … including people, by the way, who have been reprimanded for hiding from the defense information into major cases. …

“This is going to be a witch hunt.”

Another example. According to Daily Kos, Trump planned a swift lifting of sanctions on Russia after inauguration and a summit meeting with Vladimir Putin to prevent a second Cold War.

The State Department was tasked with working out the details.

Instead, says Daniel Fried, the coordinator for sanctions policy, he received “panicky” calls of “Please, my God, can you stop this?”

Operatives at State, disloyal to the president and hostile to the Russia policy on which he had been elected, collaborated with elements in Congress to sabotage any detente. They succeeded.

“It would have been a win-win for Moscow,” said Tom Malinowski of State, who boasted last week of his role in blocking a rapprochement with Russia. State employees sabotaged one of the principal policies for which Americans had voted, and they substituted their own.

Not in memory have there been so many leaks to injure a president from within his own government, and not just political leaks, but leaks of confidential, classified and secret documents. The leaks are coming out of the supposedly secure investigative and intelligence agencies of the U.S. government.

The media, the beneficiaries of these leaks, are giving cover to those breaking the law. The real criminal “collusion” in Washington is between Big Media and the deep state, colluding to destroy a president they detest and to sink the policies they oppose.

Yet another example is the unfolding “unmasking” scandal.

While all the evidence is not yet in, it appears an abnormal number of conversations between Trump associates and Russians were intercepted by U.S. intelligence agencies.

On orders higher up, the conversations were transcribed, and, contrary to law, the names of Trump associates unmasked.

Then those transcripts, with names revealed, were spread to all 16 agencies of the intel community at the direction of Susan Rice, and with the possible knowledge of Barack Obama, assuring some would be leaked after Trump became president.

The leak of Gen. Michael Flynn’s conversation with the Russian Ambassador Sergey Kislyak, after Obama imposed sanctions on Russia for the hacking of the DNC, may have been a product of the unmasking operation. The media hit on Flynn cost him the National Security Council post.

Trump has had many accomplishments since his election. Yet his enemies in the media and their deep state allies have often made a purgatory of his presidency.

What he and his White House need to understand is that this is not going to end, that this is a fight to the finish, that his enemies will not relent until they see him impeached or resigning in disgrace.

To prevail, Trump will have to campaign across this country and wage guerrilla war in this capital, using the legal and political weapons at his disposal to ferret out the enemies within his own government.

Not only is this battle essential, if Trump hopes to realize his agenda, it is winnable. For the people sense that the Beltway elites are cynically engaged in preserving their own privileges, positions and power.

If the president cannot rewrite Obamacare or achieve tax reform, he should not go around the country in 2018 wailing about Nancy Pelosi or Chuck Schumer. They are not the real adversaries. They are but interchangeable parts.

He should campaign against the real enemies of America First by promising to purge the deep state and flog its media collaborators.

Time to burn down the Bastille.

via http://ift.tt/2rfmXBU Tyler Durden

 

Content originally published at iBankCoin.com

Today’s hearings were illuminating, in that it shed some light on the mental ailments affecting the democratic party leadership, with regards to pursuing fictitious Russian conspiracy theories, attempting to justify how Hillary Clinton lost to a political upstart — Donald Trump — and his handy-dandy twitter account.

Here are three videos that gracefully encapsulate today’s hearings, all amounting to public shame and humiliation for Democratic leaders. To think, with all of the actual criminals running about the country, such as John Podesta and Hillary Clinton, they felt it was important to drag the acting AG to the Senate to question him in a public setting to prove ABSOLUTELY NOTHING.

AG Sessions opening statement.

Sen. Heinrich accuses AG Sessions of hiding behind DOJ rules.

AG Sessions and Sen. Wyden have a heated exchange.

And here is the grande finale, Sen. Cotton mocks and ridicules the ongoing Russian hysteria, comparing it to a ‘fantastical’ spy novel. This invoked a stern response from Sessions, saying ‘it’s like through the looking glass. I mean what is this?’, referring to Alice in Wonderland, meaning ‘strange’ or ‘Twilight Zone.’

via http://ift.tt/2sq29eT The_Real_Fly

Elon Musk bills Tesla as the pinnacle of “lean” manufacturing.  Just search for pictures of Tesla’s manufacturing plant and you’ll undoubtedly be served up futuristic looking images, like the one below, depicting 100’s of red robots building vehicles without a single employee.

 

But, if Tesla is truly the lean manufacturing powerhouse that it purports itself to be then we do wonder why it continues to burn through ~$600 million of cash every single quarter, or roughly $30,000 for every car that it sales?

 

Perhaps this ‘anomaly’ has something to do with the fact that, as Automotive News points out, Tesla’s real ‘capacity problem’ has nothing to do with the size of their manufacturing facility but rather the staggering number of people they’re using to build their cars.

The 5.3 million square feet of manufacturing space that Tesla now occupies started off as a joint operation between General Motors and Toyota which began in 1984 and was intended to help the Japanese automaker learn about doing business in America and teach GM the principles of lean manufacturing.  20 years ago the plant pumped out over 350,000 new cars each year or roughly 74 vehicles per worker.  Meanwhile, Tesla, the ‘pinnacle’ of lean manufacturing with 20 years worth of technology advantages, somehow only manages to build somewhere between 8-14 cars per employee.  

It’s because in this temple of lean manufacturing, Tesla uses far more workers than NUMMI employed to build far fewer cars. In 1985, its first full year of production, NUMMI had 2,470 employees and produced 64,764 vehicles — about 26 vehicles per worker per year. By 1997, it had 4,844 ? workers and produced 357,809 vehicles — about 74 vehicles per worker per year.

 

Tesla, on the other hand, had between 6,000 and 10,000 workers in 2016 and manufactured 83,922 vehicles. That puts its vehicle-per-worker number between 8 and 14, about one-seventh the efficiency of NUMMI at its peak.

 

“The number of people Musk’s got in there has a great deal to do with why he doesn’t make money building vehicles,” said automotive manufacturing consultant Michael Tracy of Agile Group in Howell, Mich. “Toyota’s numbers reflect the number of people you expect to have if you were going to efficiently build vehicles for a profit.”

Of course, given that Musk intends to go from manufacturing 100,000 cars a year to 500,000 with the launch of the Model 3, one has to wonder whether or not that is actually possible.

The Fremont factory assembles the Model S sedan, Model X crossover and the soon-to-launch Model 3. Musk said the upcoming Model Y will be built in a separate factory.

 

In Tesla’s fourth-quarter earnings call in February, Musk said that once the Model 3 launches, he plans to begin producing 5,000 vehicles per week in the fourth quarter, and ramp up to 10,000 vehicles per week by 2018.

 

“Going from 100,000 to 500,000 units is a huge leap for any company,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. “For them to build a half a million units next year, it would be an amazing ramp-up for what is still a startup company. There’s all kinds of red flags.”

But, as we pointed out earlier this month when Tesla’s market cap surpassed that of BMW, Ford and GM, the market doesn’t seem to care much about Tesla’s manufacturing inefficiencies and will undoubtedly underwrite however many billions of additional dollars needed to build more manufacturing capacity.

 

And, given that the investors seem to think Tesla is worth about $800,000 per vehicle it sales, we see no reason why the company shouldn’t be worth $400 billion within a year or so when they start pumping out 500,000 cars per year.

 

Finally, for all the Tesla investors looking to retire off their stock gains, we have some beautiful ocean front property in Oklahoma that we think might be just perfect for you.

via http://ift.tt/2syt73C Tyler Durden

A bipartisan bid to block President Trump’s recently negotiated $110 billion arms deal with Saudi Arabia failed in the Senate. The effort to stop the weapons sales, authored by Senators Rand Paul and Chris Murphy, fell short on a 47-53 vote, with four Republicans joining most Democrats in voting against it and five Democrats voting to preserve deals that will arm the Saudi Kingdom with some of the most sophisticated equipment available.

The five democrats who made the passage of the weapons deal possible were Sens. Bill Nelson, Claire McCaskill, Joe Manchin, Joe Donnelly and Mark Warner.

Despite the failure, Politico notes that Paul and Murphy fared better on Tuesday than they did last year in a similar effort to block a Saudi arms sale under former President Barack Obama, thanks entirely to new Democratic supporters: it’s curious how ideology changes ones outlook on lethal weaponry.

“Regardless of whether the number is 48 or 51 or 45” in favor of blocking the deals, Murphy told reporters before the vote, “this is an important message to the Saudis that we are all watching. And if they continue to target civilians and they continue to stop humanitarian aid from getting into Yemen, this vote will continue to go in the wrong direction for them.”

Paul said after the vote that he and Murphy would discuss possible future attempts to block Trump’s arms deals to Riyadh, warning that senators are growing more concerned about the civilian toll in a Yemen conflict that is pitting Saudi-backed government forces against rebel factions reportedly supported by Iran.

Before that happens, Paul told reporters, “there needs to be a period of time to see if there’s a change in Saudi warfare tactics.”

Like, for example, if Saudi Arabia plans on launching an assault on Qatar any time soon perhaps.

While Paul and Muprhy lost, the winners were the Trump administration, Saudi Arabia, and some Republicans such as Mitch McConnell, who claims this deal “will help Saudi Arabia fight ISIS and serve as a check on Iran.” Bob Corker was also a big supporter of the deal: “There is no classified intelligence that shows they have ever intentionally bombed civilians — as a matter of fact, intelligence down there shows that they didn’t,” Bob Corker told reporters before the vote, describing the attempted blockade of the sales as “cutting your nose off to spite your face.”

While previously there was little information on the specifics of the multi-billion dollar deal, over the weekend Defense News reported that it “includes seven THAAD missile defense batteries, over 100,000 air-to-ground munitions and billions of dollars’ worth of new aircraft.”

via http://ift.tt/2slWK7S Tyler Durden

Authored by Duane Norman via Free Market Shooter blog,

Last week, 25-year-old Reality Winner (yes, somehow that is her real name) was arrested for allegedly leaking classified information on “Russian Hacking” to The Intercept:

Winner is a contractor with Pluribus International Corporation assigned to a U.S. government agency facility in Georgia. She has been employed at the facility since on or about February 13, and has held a Top Secret clearance during that time. On or about May 9, Winner printed and improperly removed classified intelligence reporting, which contained classified national defense information from an intelligence community agency, and unlawfully retained it. Approximately a few days later, Winner unlawfully transmitted by mail the intelligence reporting to an online news outlet.

In spite of her overt and obvious political leanings (against President Trump and the right, and towards Bernie Sanders and the left), characterizing the mainstream media’s reporting on the leaker’s partisan beliefs would actually be putting it nicely:

By characterizing Winner as a staunch Sanders fan, legacy media encouraged alienation between groups that had begun to collaborate against vested interests in the media and establishment. Winner’s primary political affiliation according to the social media she left for the public appears to represent primarily a visceral hatred for President Donald Trump.

 

Mainstream media’s accuracy also been called into question regarding their coverage of Winner’s arrest and the NSA document which prompted it. Numerous media reports had stated that the document provided “proof” of Russian hacking of the U.S. Presidential election last year. However, Wikileaks stated via twitter that such headlines were false, as the NSA report had not showed voter machine hacking. Wikileaks added that claims were only in terms of attempts to “phish voter registration outfits.” Glenn Greenwald of The Intercept also stated via twitter that the document should be read skeptically.

Some had suggested when the leak hit (both publicly and privately) that the left would attempt to put a human face on Winner, trying to paint her as the “good guy” standing up to an evil President Trump.  However, when the networks didn’t even make a concerted move to defend Winner’s leaks, you should have known right then and there that she would never be the left’s Edward Snowden:

During his report on NBC Nightly News, Justice Correspondent Pete Williams passed along her family’s claim that “she wasn’t highly political,” and Anchor Lester Holt claimed her “motive is a mystery.” But in reality, Winner was anything but silent about her political views.

 

In a tweet she wrote earlier this year, she smeared Trump saying: “the most dangerous entry to this country was the orange fascist we let into the white house [sic].” She had tweeted profanities targeting Trump, such as #FuckingWall, #TrumpIsACunt, and she tweeted the anti-Trump rallying cry of #notmypresident. Winner was also a supporter of the Black Lives Matter movement and had said on Twitter that “being white is terrorism.”

 

And in a response to Iranian Foreign Minister Javad Zarif, who said “We will never use our weapons against anyone, except in self-defense,” Winner proclaimed her support for Iran, writing: “There are many Americans protesting US govt aggression towards Iran. If our Tangerine in Chief declares war, we stand with you!”

It should have been obvious once Winner’s social media accounts were leaked; Winner was overtly partisan, and the “leaked material” in question didn’t even amount to anything of material value, solely consisting of one classified document that lined up oh-so-neatly with her political agenda.  

This is in direct contradiction to Edward Snowden, who not only leaked a far larger number of documents, his leaks were in relation to the NSA’s overreach and abuse of American rights by conducting “blanket” surveillance against its citizens, often without the requisite warrants to do so:

While we don’t know if Winner took more than the one document, Snowden took thousands, at least seven thousand of which have been published, according to Business Insider.

 

Snowden was also careful to leave his job as a contractor at Booz Allen Hamilton in Hawaii and flee to China before releasing the documents, putting him out of reach of authorities. Both are charged with violating the espionage act.

Winner, meanwhile, leaked one document, that was extremely partisan in nature.  Compared to Snowden’s leaks, the one document offered almost nothing in regards to “actionable intelligence” or truly dangerous leaks.

But, what was most concerning, was how the NSA seemed to abandon all protocols when allowing Winner to access the material:

Winner was a civilian contractor and she had no ‘need to know’ to see this report. Contrary to what a lot of civilians think, ‘need to know,’ not security clearance level is the fail-safe of the entire classified information system. Just because you have the requisite security level you can’t just browse classified material without a work related reason for doing so. Everything is supposed to be on a “clearance plus need to know” basis.

 

Winner was able to print a copy of the report and was able to walk that report out of her workspace. As difficult as it is to believe, apparently there were no safeguards in place to control who printed what as she was not authorized access to the document and still managed to print it. There was no accountability established for the printed document.

 

Winner was in contact with The Intercept from her work computer. This tells you 100% of what you need to know about the counterintelligence program at her employer. It was so lackadaisical that it wasn’t even feared.

No matter what you think of Snowden, he was able to demonstrate (in a nonpartisan manner) that the US Government classifies far too much information, and is conducting blanket surveillance that is not legal by even the least stringent legal definitions.  Snowden’s motivations weren’t politics; he was motivated instead to expose bureaucratic overreach and lack of accountability.

And, while it could be argued that Snowden brought into question the procedures that the government uses to vet those who receive top secret clearance, it should be glaringly obvious that they didn’t learn their lessons, instead choosing to hand a security clearance out to someone you would expect to see at an Antifa rally:

Start with her name: “Reality Winner.” Then let’s tick off the other boxes: lesbian bodybuilder, ardent Bernie Sanders supporter, a “Black Lives Matter” enthusiast who (though white herself) argues that “Being white is terrorism.” A woman whose social media posts include referring to the President of the United States as a “piece of shit” and the “Tangerine in chief,” who additionally declares that in a war between the US and Iran, she’ll side with Iran.

 

And still…STILL…she was given a top secret security clearance and access to classified materials. Which raises two very troubling questions: just what in blazing Hell does someone have to do to not get a security clearance, and how many other angry, ignorant, communist-leaning, anti-American social justice warriors are currently embedded in (and sabotaging) our intelligence agencies?!

 

We’re guessing the number to be terrifyingly high, but can’t know for sure because trying to find out would require functional intelligence agencies. And that ship, like Satire, has sailed.

So while it is a disturbing enough problem that the US government classifies far too much information, it is an even bigger problem that someone like Reality Winner is even able to make it past the first stage of a security clearance screening.

And while it is easy enough to chalk the whole Reality Winner episode up to typical government incompetence, perhaps we should be asking a different question; was something far more sinister at play here, with the deep state working behind the scenes towards undermining the current administration?

via http://ift.tt/2syykIY Tyler Durden