An American In ISIS: Meet Doug McCain, One Dead Jihadist

Perhaps the only question emerging from this profile of the first document US citizen casualty fighting for the Islamic State, whose name earlier was revealed as Douglas McAuthur McCain, is whether he and John are related.

From NBC:

The battle in itself seemed tragically normal. Two Syrian opposition groups fought and there were heavy casualties on both sides. Then victorious rebels rifled through the pockets of the dead. One contained about $800 in cash — and an American passport.

 

Douglas McAuthur McCain, of San Diego, California, was killed over the weekend fighting for the Islamic State of Iraq and al-Sham (ISIS), according to the Free Syrian Army. Photos of McCain’s passport and of his body — which feature a distinctive neck tattoo — have been seen by NBC News. According to an activist linked to the Free Syrian Army who also saw the body and travel document, McCain was among three foreign jihadis fighting with ISIS who died during the battle.

 

Senior administration officials told NBC News they were aware that McCain was killed in Syria, adding that they believe dozens of Americans have gone there to fight with extremist groups – including, but not limited to, ISIS.

Actually, on second thought it appears there is no relation.

The spin cycle has already been engaged: McCain may be dead, but the treat that countless others like him have returned to the US to perpetrate, gasp, acts of terrorism on US soil is very much alive:

“The threat we are most concerned about to the homeland is that of fighters like this returning to the U.S. and committing acts of terrorism,” a senior administration official told NBC News.

 

NBC News has contacted several members of McCain’s family and dozens of friends – including his mother, sister, aunts and cousins. A woman who said she was McCain’s aunt confirmed that he had “passed” and referred calls to McCain’s mother.

 

McCain, 33, called himself “Duale ThaslaveofAllah” on Facebook and his Twitter bio reads: “It’s Islam over everything.”

After he graduated, McCain stuck around the Twin Cities for at least a while. Public records searches show several run-ins with the law. One mugshot of a Douglas McAuthur McCain details an arrest in 2000 at the age of 19 in New Hope on charges of disorderly conduct. Another arrest record – also from New Hope – shows the same man was arrested again in 2006 and booked on charges of obstruction. The mugshot from that arrest also clearly appears to be McCain – and has the same neck tattoo that is seen in Facebook photos of McCain on his “Duale ThaslaveofAllah” account – and the body found on the Syrian battlefield. NBC News confirmed on Tuesday that he was convicted of both charges.

Gradually the profile shifts to religion: “Around 2004, McCain “reverted” to Islam, according to his Twitter feed. “

McCain’s online life also painted the picture of a devout Muslim who deeply loved his family – along with Pizza Hut and hip-hop. His likes on Facebook ranged from “Quaran and Hadith” to “The Khilafah in Universe,” “A Way to Paradise” to “Craziest Street Fights,” “The American Comedy Co.” to “The Black Flag.”

 

“Allah keeps me going day and night. Without Allah, I am no one,” read one photo post. Others took a darker turn – posts featured the black flag of ISIS and other militant propaganda photos. In September 2010, he posted an ominous image: “They are coming back soldiers of Allah.”

 

A MySpace profile linked to Duale – and with the same images as elsewhere on social media – contains similar messages, with pictures of the sometime rapper striking poses. In one photo, he clutches a Quran. “The quran is all I need in this life of sin,” reads another caption.

We also learn about his exciting crusade to reach the promised Islamic land:

On April 3, McCain retweeted the full English translation of the speech of Abu Muhammad al-Adnani – the spokesman for ISIS.

 

Soon after, it appears that McCain’s travels took him to Turkey, a common jihadi route into Syria. Three people told NBC News that they met McCain – who they referred to as Duale – three months ago in in the Istanbul neighborhood of Sultanahmet. Two said they met him at the Burger King, where they ate and talked about the NBA.

 

U.S. officials have said “a small handful” of Americans are believed to be fighting with ISIS. Earlier this month, a new ISIS propaganda video claimed to feature an American citizen. And in July, chilling video emerged purporting to show the first American to carry out a suicide attack in Syria burning his U.S. passport and issuing threats against the West. The video of Moner Mohammad Abusalha, who grew up in Florida, underscored concerns about the flow of foreign fighters to Syria.

Finally NBC goes through McCain’s social networking habits which readers can uncover on their own here.

So the good news: unlike in the UK, so far there are no proposals to automatically assume that anyone traveling to Syria, or Iraq, or Turkey for that matter is a terrorist.

As for the bad news: prepare to be inundated with many more such profiles, because one never knows when the “converted US Muslims” who have returned from the Islamic State, and mingle among the broader population, decide to strike. Which is why it is best to let Uncle Sam handle all of your personal security, and while at it, let’s all just put that NSA “spying on everyone” nonsense in the past: after all without the constant threat that the US-created ISIS “scourge” will come to the US and blow building up and/or hijack airplanes, it may be problematic for the NSA to continue defending its ongoing existence made so public in the aftermath of the Snowden whistleblowing revelations.




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Why Isn’t Monetary Pumping Helping the Economy?

Submitted by Frank Shostak via the Ludwig von Mises Institute,

Despite all the massive monetary pumping over the past six years and the lowering of interest rates to almost zero most commentators have expressed disappointment with the pace of economic growth. For instance, the yearly rate of growth of the European Monetary Union (EMU) real GDP fell to 0.7 percent in Q2 from 0.9 percent in the previous quarter. In Q1 2007 the yearly rate of growth stood at 3.7 percent. In Japan the yearly rate of growth of real GDP fell to 0 percent in Q2 from 2.7 percent in Q1 and 5.8 percent in Q3 2010.

In the US the yearly rate of growth of real GDP stood at 2.4 percent in Q2 against 1.9 percent in the prior quarter. Note that since Q1 2010 the rate of growth followed a sideways path of around 2.2 percent. The exception is the UK where the growth momentum of GDP shows strengthening with the yearly rate of growth closing at 3.1 percent in Q2 from 3 percent in Q1. Observe however, that the yearly rate of growth in Q3 2007 stood at 4.3 percent.

In addition to still-subdued economic activity most central bankers are concerned with the weakness of workers earnings.

Some of them are puzzled that despite injecting trillions of dollars into the financial system so little of it is showing up in workers earnings.

After all, it is held, the higher the earnings, the more consumers can spend and consequently, the stronger the economic growth is going to be.

The yearly rate of growth of US average hourly earnings stood at 2 percent in July against 3.9 percent in June 2007. In the EMU the yearly rate of growth of weekly earnings plunged to 1.3 percent in Q1 from 5.4 percent in Q2 2009. In the UK the yearly rate of growth of average weekly earnings fell to 0.7 percent in June this year from 5 percent in August 2007.

According to Vice Chairman of the US Federal Reserve Stanley Fischer, the US and global recoveries have been “disappointing” so far and may point to a permanent downshift in economic potential. Fisher has suggested that a slowing productivity could be an important factor behind all this.

That a fall in the productivity of workers could be an important factor is a good beginning in trying to establish what is really happening. It is however, just the identification of a symptom – it is not the cause of the problem.

Now, higher wages are possible if workers’ contribution to the generation of real wealth is expanding. The more a particular worker generates, as far as real wealth is concerned, the more he/she can demand in terms of wages.

An important factor that permits a worker to lift productivity is the magnitude and the quality of the infrastructure that is available to him. With better tools and machinery more output per hour can be generated and hence higher wages can be paid.

It is by allocating a larger slice out of a given pool of real wealth toward the build-up and the enhancement of the infrastructure that more capital goods per worker emerges (more tools and machinery per worker) and this sets the platform for higher worker productivity and hence to an expansion in real wealth and thus lifts prospects for higher wages. (With better infrastructure workers can now produce more goods and services.)

The key factors that undermine the expansion in the capital goods per worker are an ever expanding government and loose monetary policies of the central bank. According to the popular view, what drives the economy is the demand for goods and services.

If, for whatever reasons, insufficient demand emerges it is the role of the government and the central bank to strengthen the demand to keep the economy going, so it is held. There is, however, no independent category such as demand that drives an economy. Every demand must be funded by a previous production of wealth. By producing something useful to other individuals, an individual can exercise a demand for other useful goods.

Any policy, which artificially boosts demand, leads to consumption that is not backed up by a previous production of wealth. For instance, monetary pumping that is supposedly aimed at lifting the economy in fact generates activities that cannot support themselves. This means that their existence is only possible by diverting real wealth from wealth generators.

Printing presses set in motion an exchange of nothing for something. Note that a monetary pumping sets a platform for various non-productive or bubble activities — instead of wealth being used to fund the expansion of a wealth generating infrastructure, the monetary pumping channels wealth toward wealth squandering activities.

This means that monetary pumping leads to the squandering of real wealth. Similarly a policy of artificially lowering interest rates in order to boost demand in fact provides support for various non-productive activities that in a free market environment would never emerge.

We suggest that the longer central banks worldwide persist with their loose monetary policies the greater the risk of severely damaging the wealth-generating process is. This in turn raises the likelihood of a prolonged stagnation.

All this however, can be reversed by shrinking the size of the government and by the closure of all the loopholes of the monetary expansion. Obviously a tighter fiscal and monetary stance is going to hurt various non-productive activities.




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How Putin Just Saved Europe, and Other Geopolitical Tales

By: Chris Tell at: http://ift.tt/146186R

Picture this scenario. A brother and sister squabbling with one another. Something’s gone wrong, they’re blaming each other, fighting, and generally at each other’s throats. Along comes the boy from next door who pokes fun at one of them and starts pestering them. Brother and sister rapidly put aside their differences, join forces and deal with the boy from next door.

The saying, “The enemy of my enemy is my friend” has played itself out many times throughout  history and, while geo-political relationships may not be as close as siblings, the forming of alliances and the repercussions from having joint enemies can be profound.

During the second World War Stalin realized that he needed the Allies to defeat a Nazi invasion, and in turn the Allies realized that the Soviets were necessary for the war effort. In any other scenario the Allies would have been arch enemies of Stalin and vice versa.

During the Cold War a similar setup occurred with the Soviets and Chinese aiding North Korea during the Korean War, and then aiding the Viet Cong during the Vietnam War.

On a country specific basis many a dictator has been propped up and supported by Governments pretending to their citizens that they in fact abhor the acts of such people. A controlled media and messaging ensure that the vast majority of citizens don’t think too much or dig too much. Government, after all, is largely in the business of marketing. Mobuto Sese Seko, Augusto Pinochet, Saddam Hussein, Pol Pot, and currently the Saudi Royal family. All strategic at some point in time.

I’m not picking on any of these for any particular reason other than that they’re choices which everybody knows about, and the relationships are well documented. Government in all instances does this. Nothing unusual. As they say in Thailand, “Same same but different.”

Well, this time it’s same same but different, too. We’re seeing similar alliances forming now. This time Europe and the US forming an alliance against Russia, and China together with Russia moving towards forming and solidifying existing economic alliances.

Consider that in just the last few months I’ve had the following snippets cross my news-feeds:

In Europe, Putin, the boy from next door, has distracted the Europeans from their political and economic woes, and the infighting which has been building between the Europeans has taken a backseat to more immediate problems. Taking a look at the news since Ukraine started making headlines shows me that distraction appears to be working. I’m not suggesting this was by design. I don’t think that’s the case. It is, however, convenient for EU policy makers who’ve completely screwed up the European marketplace and are looking for someone to blame. Putin is a Godsend.

Life for Europeans will get worse… much worse. Sanctions with Russia are already destroying European agriculture, but at least Eurocrats can blame the economic decline on external factors. Watch for it. You can bet on it. In the meantime, let’s look at who hurts the most from the Russian ban on US and EU food imports.

Russian Sanctions Effect

Keep an eye on PKO, Bank Polski, Poland’s largest lender. Earlier this year they raised $2.7 B in a bond issuance. Little did they know how lucky their timing was. No way would they be able to sell bonds at levels achieved in January of this year, now. The question is, will they survive as their loan book collapses?

While all this is taking place I have to wonder where and what other opportunities arise from this very large and accelerating power shift. An active move away from the dollar is underway and has been for some time. What is important now is that this is being accelerated by the public sector and not the private sector. Moves such as the BRICS setting up the financial infrastructure to transact away from the dollar is bold indeed.

Actions of this nature, or just the mere consideration of such actions, would have been previously met with threats of tariffs, curtailment of aid or even outright sanctions from the United States. That they are taking place now on a near daily basis shows just how fast the geopolitical landscape is changing. The economic decline evident in the Western, socialist world and the US in particular is evident to anyone not reading CNN. This coupled with Obama’s refusal to curtail the NSA has accelerated both the desire and the fortitude of many countries around the world to proceed to change the status quo.

Talking with my private banker in Singapore I asked what bankers thought of all of the FATCA rules. Her response was, “It won’t be too long.” These absurd rules exist and have to be complied with while the dollar is the reserve currency, but when, not if, alternatives exist then simply choosing not to play in that particular sandpit any longer will be more favourable than the revenues currently being earned by complying. Right now banks make too much money to walk away from the existing financial setup, which is dictated by US banks, US clearing houses and US money.

This is changing. The amount of capital flooding into Singapore and Hong Kong is putting pressure on the banks here and pushing up already crazy real estate prices. There are other sectors we’re interested in and taking advantage of. One of them is private equity, which is our particular niche. Capital flows are very important and we believe that the next big M&A activity will be in Southeast Asia and we are moving aggressively to take advantage of this.

In the meantime, I’m curious what opportunities readers think are opening up. Drop a comment below and let me know.

– Chris

 

“The dollar monopoly in energy trade is damaging Russia’s economy.” – Vladimir Putin




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S&P Closes Above 2000 For First Time On Lowest Volume Day Of Year

For the last 2 weeks, the US Dollar has surged – hitting new 13-month highs today amid JPY and EUR weakness – and for the last 2 weeks, US stock and bond markets have rallied (leaving 30Y yields implying the S&P is 130 points rich or yields are 25bps too low). S&P tops 2,000, Nasdaq closed up for 10th day in a row, Russell outperformed on major short-squeeze, Trannies slid red for the week. Today saw modest Treasury weakness (30Y +2bps, 2Y -1bps) but still lower on the week; gold ($1285), silver ($19.50), and oil ($94) gained on the day – despite USD strength – as copper dropped 1%. Credit markets remain unimpressed by record-er highs in stocks. VIX decoupled from equity strength today as NASDAQ options feeds broke. Volume was an utter disaster… that is all.

 

Nothing to see here, move along…

 

S&P 500 (cash) topped yesterday's highs early on (thank you resting stops)… 2000.02 close!!

 

as The Close was all critical to keep the dream alive…

 

"Most Shorted" stocks once again bore the brunt of the squeeze higher…

 

Which led Russell 2000 to dramatically outperform as Trannies tumbled – leaving Transports red on the week…and closing at the lows…

 

Some context for this move…

 

VIX decoupled as BATS and NASDAQ broke and options feeds went full retard…

 

The USD Index broke to new 13-month highs today…

 

But the last 2 weeks have seen USD demand flood both stocks and bonds in the US…

 

Credit continues to ignore the exuberance…

 

HY-IG spread is back at 250bps – practically unchanged on the year (thoug IG is notably tighter in recent weeks as investors shift to up-in-quality trades)

 

Early strength in PMs was battered back into submission around the normal 8amET witching hour… Oil rose on the day…

 

Quite a day in Gold futures…

 

Charts: Bloomberg




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Investor Net Worth Drops To New All Time Low, NYSE Reveals

One can debate whether or not margin debt as reported by the NYSE has any relevance in a world in which the retail investor is long gone, and where the marginal buyer are hedge funds (and primary dealers who use excess reserves as collateral for marginable derivatives and futures) who fund themselves using far more arcane “shadow” repo conduits as we have explained previously, it is indisputable that the leverage statistics disclosed monthly by New York Stock Exchange provide a useful glimpse into how the broader market is obtaining “dry powder” to keep BTFATH.

And while in July margin debt did dip modestly from near all time highs hit back in June when total margin debt was virtually tied with the previous record, at $464 billion, it was that other metric tracked by the NYSE, namely Investor Net Worth, calculated by subtracting margin debt from the notional represented in free credit cash accounts and credit balances in margin accounts, that was the notable highlight in the July report: at a negative $182.1 billion, a decline of $6.3 billion from the prior month, investor Net Worth has never been lower.

This happens to be a deficit which is more than twice as large as the net worth shortfall reached during the last market bubble, which hit ($79) billion, peaking during the quant freakout in the summer of 2007 and subsequently surging to a record high of $184.6 billion in August 2008, as repo desks closed all margin positions with virtually any and every counterparty, leaving everyone in a position of record high “net worth.”

Does this, or anything else, matter in a market that is exclusively centrally-planned by the central banks and various HFT algos? We urge you to direct your questions, rhetorical as they may be, on this topic to either the NY Fed or its oftentime execution trading arm, Citadel.

Source: NYSE




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Monks and Martyrs: A Controversial Perspective on Dissent in 21st Century America

Two months ago, I highlighted a powerful video from Warren Pollock in the post: Video of the Day – The Religion of Consumerism. Today, I am highlighting another one of his videos.

While this one is no less interesting, it’s likely to be quite a bit more controversial. He poses questions that philosophers have no doubt pondered from the very first moment human beings came together to organize into centralized political structures.

Namely, what is the responsibility of a citizen in a society in which the majority is ruled by a small minority? By living passively within this system has a citizen de facto given his or her consent to the minority? If so, is that citizen therefore ultimately responsible for the fate of the society as a whole?


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When Fighting The Fed Pays – Biotechs Hit Record Highs

Presented with little comment aside to note Biotechs are up 33% from the April lows and have reached all-time record highs and have now totally ignored 2 warnings from Yellen – who just last week was heralded as omnipotent.

This is the best 3-week run in 13 months…




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China Has Lost 55% Of Its Most Valuable Resource

Submitted by Simon Black of Sovereign Man blog,

A few days ago I had a conversation with the Chief Operating Officer for our agricultural fund in Chile.

We were discussing water, and he told me that roughly 60% of California right now is suffering “extreme drought” conditions. 30% of the state is in “severe drought”. And 10% of the state is only under “drought”.

In other words, roughly the entire state – the 8th largest economy in the world – is facing a severe shortage of water.

But if you think that’s bad, China is about to take over the spotlight yet again.

A study by China’s Ministry of Water Resources found that approximately 55% of China’s 50,000 rivers that existed in the 1990s have disappeared.

Moreover, China is over-exploiting its groundwater by 22 billion cubic meters per year; yet its per-capita water consumption is less than one third of the global average.

This is astounding data.

More than 400 major cities in China are short of water, with some 110 facing “serious scarcity”.

Beijing and other northern cities get most of their water from underground aquifers. Over the last five decades, China has had to drill increasingly deeper to gain access to water.

Another challenge China faces is logistics. More than 60% of China’s water is in the southern part of the country, but most of the usage is in the north and along the coastlines.

When you consider that this is a country that has almost one fifth of the world’s population and is soon to become the world’s biggest economy, this is rapidly becoming a global problem.

The Chinese are of course well aware of this and are trying to mitigate the consequences by diversifying internationally, or as I call, planting multiple flags.

In China’s case, it’s a ‘water flag’.

Since the most efficient way to save water is not to use it, a sensible strategy is to import water-intensive goods and commodities. Corn and wheat are great examples.

China has been acquiring land across Africa and South America; last week when I was in Ethiopia, the place was crawling with Chinese delegates in the ag business.

The goal is to increase China’s food supply, reduce its dependence on the US for grain imports, and reduce its domestic water demand.

China has the economic capacity to do this. Most nations don’t.

Globally, some two billion people face a water deficit, and dozens of countries have to import water.

Throughout history, water has been the most important resource in the world and a major cause for conflict.

As far back as the ancient Sumerians, wars would break out over control of water supplies in Mesopotamia.

Today, 47% of the world’s non-polar land mass is supplied by rivers shared by two or more states simultaneously. This is an always present but latent source of potential conflict.

We can see that in South East Asia where the Mekong countries bicker over who has the right to build dams and otherwise exploit the river.

All of those countries, plus Bangladesh, India and Myanmar are furious with China’s plans to commandeer more of upstream river sources for itself.

In Ethiopia, where I was just a few days ago, the Grand Ethiopian Renaissance Dam project on the Blue Nile is causing a major diplomatic row with Egypt.

The Egyptians see themselves as the historical “rightful owners” of the Nile River, and they’re in desperate need of the water.

Water availability has enormous political, military, economic, and social implications. And it’s foolish to simply sweep this reality under the rug.

My guess is that tens of thousands of our readers may live in a city experiencing severe water shortages. It’s easy to ignore the problem and trust politicians to fix it. But this is a dangerous course of action.

First of all, stock up. Water keeps, so you won’t be worse off for having a little extra in case there’s a small disruption.

Bigger picture, it may make sense to consider a small bolt hole in a country with abundant per-capita water resources (Georgia, Uruguay, parts of Chile, etc.)

And for investors, owning productive agricultural property in these locations will likely prove to be an excellent investment as farmland in many parts of the world dries up.

More on that another time.




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For $1 Million You Have A Choice: 15 Square Meters In Monaco Or A Trailer In The Hamptons

A few days ago, when we looked at what is one of the last tax havens in the world, the principality of Monaco, we uncovered not only the world’s most expensive Penthouse costing a whopping $400 million, but got some perspective on how far one’s dollar really goes, or doesn’t. Because when it comes to asset inflation there is a world for the “rest of us”, where according to Janet Yellen “inflation is noisy” and any spikes should be ignored, and one for the 1%, where inflation is essentially off the charts. In fact, a world where as the following anecdote fiat prices hardly matter.

Case in point: if a billionaire has a measly $1 million burning a hole in their pocket, they have a choice: they can spend it in Monaco where, “for $1 million, you could buy about 15 square meters (160 square feet) of space” or they can spend it in Wall Street’s favorite summer retreat, the Hamptons, where the seven figure number would buy them… a trailer.

As the NYT reports, via Gothamist, a family just sold their trailer in Montauk for a million dollars. 

The transformation of the whole of the east end of Long Island into a 1% paradise is something remarkable. The Times traces how just a few years ago Montauk was still something of a well-off worker’s paradise, replete with drunken firemen and cheap crash pads. But now even Jimmy Buffett has been unsuccessful in purchasing a trailer in Montauk Shores, which sits at the very edge of Long Island.

“It was the Wild West back then,” Cherie Doughan, one of the former trailer owners, told the Times. “Or I guess you’d call it the Wild East. People sure knew how to party.”

Doughan recalls her father sitting in a bathtub in their front yard, beer in hand, inviting passersby to join him for a dip.

“I hate to sell it. I don’t want to sell it, I just don’t, but there it is,” Doughan said, explaining that they need the money to help pay for her mother’s assisted living home.

Of course it is not the motor home itself that is being acquired, it is the land beneath it:

With dark wood paneling, two stuffy bedrooms and an intact 1970s kitchen, the Doughans’ mobile home will almost certainly be replaced. The new owners will be basically buying the land, paying more than 100 times what Mr. Doughan did, for one of the primest parcels in Montauk Shores.

 

It may not be one of the plots directly on the bluff over Ditch Plains, but it is on a larger, 2,000-square-foot lot, with room for a double-wide mobile home and a new deck, a luxury the narrower waterfront parcels, each 1,200 square feet, do not enjoy. The added space can mean a lot to someone willing to pay seven figures for a beach retreat. And the Doughans’ plot still has unobstructed ocean views, out over a plaza in the center of the park.

So $1.1 million for a 2,000 square foot lot? “Insanity”, most people will interject here: this is such a clear signal there is an epic bubble that the only question is when does it burst.  Well, sure. But others are trying to spin even this:

While residents insist the general vibe of the mobile home park hasn’t changed, the idea of someone who could afford a $1.1 million dollar parcel of land on which to build a new trailer seems to negate the vibe of a blue collar paradise. Not so, according to the Corcoran real estate agent quoted in the piece: “If you think about it, it’s still one of the best deals on the East End,”

And now, for all those who wish to be able to afford such “best deals” in the future, back to BTFATH.




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