Tag: news

The Template for Bail-Ins & Cash Bans Was First Implemented in Europe in 2013.

More and more analysts and commentators have caught to the fact that the Powers That Be are actively preparing for the next financial crisis with even more extreme measures.

 

These measures include:

 

1)   Bank bail-ins

2)   Cash Bans

3)   NIRP

 

As we’ve been noting since 2013, the template for this process was first laid out in Europe, specifically in Cyprus. With that in mind, it’s worth remembering just how it played out there.

 

The quick timeline for what happened in Cyprus is as follows:

 

·      June 25, 2012: Cyprus formally requests a bailout from the EU.

 

·      November 24, 2012: Cyprus announces it has reached an agreement with the EU the bailout process once the troubled Cyprus banks are examined by EU officials (ballpark estimate of capital needed is €17.5 billion).

 

·      February 25, 2013: Democratic Rally candidate Nicos Anastasiades wins Cypriot election defeating his opponent, an anti-austerity Communist.

 

It is at this point that things went into hyper-drive.

 

·      March 16 2013: Cyprus announces the terms of its bail-in: a 6.75% confiscation of accounts under €100,000 and 9.9% for accounts larger than €100,000… a bank holiday is announced.

 

·      March 17 2013: emergency session of Parliament to vote on bailout/bail-in is postponed.

 

·      March 18 2013: Bank holiday extended until March 21 2013.

 

·      March 19 2013: Cyprus parliament rejects bail-in bill.

 

·      March 20 2013: Bank holiday extended until March 26 2013.

 

·      March 24 2013: Cash limits of €100 in withdrawals begin for largest banks in Cyprus.

 

·      March 25 2013: Bail-in deal agreed upon. Those depositors with over €100,000 either lose 40% of their money (Bank of Cyprus) or lose 60% (Laiki).

 

The most important thing I want you to focus on is the speed of these events.

 

Cypriot banks formally requested a bailout back in June 2012. The bailout talks took months to perform. And then the entire system came unhinged in one weekend.

 

One weekend. The process was not gradual. It was sudden and it was total: once it began in earnest, the banks were closed and you couldn’t get your money out (more on this in a moment).

 

There were no warnings that this was coming because everyone at the top of the financial food chain were highly incentivized to keep quiet about this. The Central Banks, the bank CEOs, the politicians… all of these people were focused primarily on maintaining CONFIDENCE in the Cyprus banking system, NOT on fixing the system’s problems.

 

Indeed, the financial elite cannot even openly discuss the system’s problems because it would quickly reveal that they are a primary cause of them.

 

For that reason, you will never and I repeat NEVER see a Central banker, bank CEO, or politician admit openly what is happening in the financial system. Even middle managers and lower level employees won’t talk about it because A) they don’t know the truth concerning their institutions or B) they could be fired for warning others.

 

Moreover, even award winning institutions are at risk. Consider that the Bank of Cyprus, the bank that imploded in 2013 and STOLE clients’ funds was voted Best Bank for Private Banking in Cyprus by EUROMONEY magazine in 2012.

 

No joke…

 

Bank of Cyprus has been named as the Best Bank for Private Banking in Cyprus, by the internationally acclaimed magazine EUROMONEY

 

Bank of Cyprus Private Banking ranked first among Cypriot, Greek and other international financial institutions operating in Cyprus in the Private Banking sector…

 

This recognition by EUROMONEY is ever more important in today’s macroeconomic environment as it reaffirms the Bank’s ability to safely and successfully respond to its clients’ financial needs and emphasizes its clients’ loyalty and trust.

 

Source: Euromoney.

So do not expect to EVER hear a Central Banker, politician, banker, regulator or anyone else in a position of power warn you of the real risks to your wealth. Indeed, as Cyprus has now SHOWN us, the only people who WILL be warned are the elite’s cronies:

 

One hundred and thirty-two companies reportedly had inside knowledge of Cyprus’ impending levy tax as they withdrew deposits worth US$916 million in the run-up to the bailout deal.

 

The companies withdrew their savings in the two-week period (between March 1 to March 15) leading up to the rescue deal that enforced heavy losses on wealthy depositors in Cypriot banks, according to Greek newspaper Proto Thema.

 

Shortly after this the EU ministers and the IMF hammered out a 10-billion-euro (US$13 billion) bailout agreement with Cyprus, which included a one-time tax on deposits held in Cypriot banks.

 

In the meantime all banks in Cyprus temporarily froze the amounts required to pay the tax on their clients’ deposits and stopped all transactions while the government negotiated the details of the agreement.

 

The companies on the list withdrew their deposits in euro, USD, GBP and Russian rubles and later transferred to banks outside of Cyprus. The total amount withdrawn comes to US$916 million.

 

Source: RT

 

How about that? The insiders were able to get nearly $1 billion out of the banks while ordinary savers’ deposits were frozen.

 

Please take a few minutes to digest what I’m telling you here. You will not be warned of the risks to your wealth by anyone in a position of power in the political financial hierarchy.

 

With that in mind, now is a good time to prepare for systemic risk. I cannot forecast precisely when things will get as ugly as they did in Cyprus for the financial system as a whole (no one can).

 

This is just the start of a much larger strategy of declaring War on Cash.  The goal is to stop people from being able to move their money into physical cash and to keep their wealth in the financial system at all costs.

 

Indeed, we've uncovered a secret document outlining how the Fed plans to incinerate savings to force investors away from cash and into riskier assets.

 

We detail this paper and outline three investment strategies you can implement

right now to protect your capital from the Fed's sinister plan in our Special Report

Survive the Fed's War on Cash.

 

We are making 1,000 copies available for FREE the general public.

 

To pick up yours, swing by….

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Best Regards

Phoenix Capital Research

 

 

 


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UK’s European Future In Jeopardy: London Mayor Boris Johnson Will Campaign For Brexit

Yesterday, when we summarized the statements by UK politicians regarding the June 23 EU referendum, we said the one most important opinion has yet to come: that of London mayor Boris Johnson’s whose “opinion may sway the vote one way or another in four months. As the Telegraph reproted that “David Cameron is mounting a last-ditch effort to woo Boris Johnson to back his campaign to stay in the European Union, by drawing up plans for a new constitutional settlement that puts the sovereignty of British institutions beyond doubt.”

As the Telegraph added, “sources close to Johnson said he remained “genuinely torn” and that he would “chew over” what the prime minister has to say when Cameron appears on the BBC’s Andrew Marr Show on Sunday, before issuing some form of statement this evening. He will then spell out the reasons for his decision in his column for the Daily Telegraph on Monday.”

It appears that Cameron’s effort to “woo” Johnson has failed because moments ago BBC reported that “Boris Johnson is to campaign to leave the EU in the UK’s referendum, BBC understands.”

The Guardian has more:

Boris Johnson is to transform the terms of the EU referendum by announcing that he is to throw his weight behind the campaign to take Britain out of the EU, according to the BBC.

 

In the biggest boost to the Leave campaign so far, the London mayor is to announce that after much soul-searching he now believes the time has come for Britain to sever its EU membership.

 

The news was broken by the BBC’s political editor Laura Kuenssberg who tweeted: “Boris WILL campaign to leave the EU -Huge boost for Out, big blow for number ten altho expected – more soon. Official announcement tonight.”

 

The report was being seen at Westminster as authoritative because Johnson recorded a broadcast interview in which he was due to explain his thinking.

Last night we said that “if Johnson refuses to back Cameron, the Friday afternoon spike in the GBP may be very promptly undone.” NOw that this appears to be the case, keep a close eye on cable once it opens in a few hours in Sunday’s illiquid trade – it could get volatile.


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“Reversal Risk”: Goldman Documents The History Of Central Bank Backpedaling

In December, Janet Yellen hiked right into what might as well be a recession in what Marc Faber suggests will go down as one the most ill-timed policy maneuvers in the history of central banking.

Things didn’t fall apart immediately, but the situation started to deteriorate markedly at the beginning of last month when collapsing crude prices and a bungled attempt to implement a circuit breaker in China triggered harrowing bouts of volatility across markets and set investors up for one of the most inauspicious starts to a year in history.

Now, with policy divergence between the Fed and its DM counterparts set to support the dollar at the expense of both EM stability and US corporate profits and with the continual weakness in crude set to trigger a default cycle, the FOMC faces a rather vexing question: “is it better to admit to a policy mistake and reverse course at the risk of destroying credibility or is it preferable to cling to the narrative so as not to completely destroy the notion that all is well and the US recovery is on track?”

“Fed officials continue to signal rate increases for later this year, but financial markets are increasingly focused on the risk of a policy reversal,” Goldman writes, in a new note. “At one point last week, markets saw a higher probability of a cut than a hike at the June FOMC meeting.”

With the market thus skeptical about the Fed’s willingness and/or ability to cling to the tightening cycle, Goldman has taken a look at the history of policy reversals, which the Vampire Squid reminds you are not “inherently” bad. 

*  *  * 

From Goldman

There is nothing inherently wrong with policy reversals. If the growth or inflation outlook were to deteriorate meaningfully, optimal policy might call for a lower funds rate, even shortly after an increase. In Exhibit 2, for example, we show the implied cumulative probability of a cut using the Fed’s large-scale macroeconomic model, FRB/US. In this exercise, we use the median forecast from the FOMC’s Summary of Economic Projections (SEP) as the baseline for the simulations, and then allow FRB/US to draw shocks that are calibrated to the economy’s realized uncertainty over the last twenty years. We then calculate the path of the funds rate in each simulation using Chair Yellen’s preferred version of the Taylor rule, the economic outcomes from the simulations, and an assumption that the neutral rate either remains flat at zero or normalizes gradually at the rate implied by the FOMC’s “dot plot”.

Under the assumption that the neutral rate remains flat, the cumulative probability that the policy rule calls for a cut is about 14% by 2016Q4 and 27% by 2017Q4. If we instead assume that the neutral rate gradually normalizes, then the probability of returning to zero is 11% by 2016Q4 and 18% by 2017Q4. Thus, it is certainly not out of the question that the FOMC could reverse course—even over the near-term—given a large enough shock to the economy.

However, history suggests this type of analysis might miss something important about central bank behavior. In particular, policy reversals—lowering rates shortly after an increase, or raising rates shortly after a cut—are surprisingly uncommon in the data. According to one estimate, they would occur about four times more often than we observe if policy were responding optimally to all new shocks.

To demonstrate this point, we collected quarterly data on policy interest rates (or near equivalents) for G10 economies from roughly 1990 to the present. We then divided all the observations into rate hiking cycles and rate easing cycles, where the cycles include any quarters with no changes in interest rates between hikes/cuts or immediately after. We then defined a “reversal” as a cycle lasting only one or two quarters. Under this construction, if the Federal Reserve reduced rates in the first half of this year it would count as a reversal; if the Fed cut rates in the second half or beyond it would not count as a reversal. This methodology will of course miss any reversals that occur within a single quarter—which have happened on a few occasions (including around the 1987 stock market crash and the September 2001 terrorist attacks). An example of this identification scheme for the Euro area is shown in Exhibit 3.

Exhibits 4 and 5 provide some summary statistics. Of the 85 cycles in our dataset, the average lasted about nine quarters (including the periods after rate changes where policy was on hold). The distribution of rate hiking cycles is more concentrated; that for easing cycles has a long right tail, with five examples lasting more than five years.

As is well known, monetary policy changes tend to be highly persistent. In our dataset, the policy action in any one quarter (hike, cut, or hold) matches the action in the previous quarter 64% of the time, and the simple autocorrelation coefficient of quarterly policy rate changes is 0.37. Policy reversals, as defined above, are rare: we count only one “cut reversal” (Sweden, 2001) and four “hike reversals” in the entire sample—for a total of 6% of the observations.

The US had no hike reversals as we have defined them here. The Eurozone and Japan both had one each: the BOJ’s hike in August 2000, followed by a cut in February 2001; and the ECB’s hike in July 2011, followed by a cut in November 2011. In both cases the reversals occurred alongside sharp downgrades to consensus growth expectations.

Additionally, since mid-2009, six G10 central banks have raised policy rates only to change direction later (one of them, New Zealand, did it twice). Under our definition of policy reversals, only one of these examples (the mid-2011 hike from the ECB), would qualify. The causes behind the other rate cuts were varied. In most cases, consensus forecasts for growth and inflation did not actually deteriorate much around the time of the first rate cut; policy statements indicate that overvalued exchange rates likely played a role in some cases.

*  *  *

In other words, the record shows that central bankers are either very stubborn or very concerned that admitting to their own mistakes would be diastrous for markets. 

It’s also interesting to note that in the post-crisis years, officials seem to be increasingly concerned with the relative strength of their currencies even when inflation and growth forecasts are stable, a reflection of the extent to which the global currency wars have everyone on edge.

But the most distrubing thing of all is that according to Goldman, policy makers are inclined to deliberately underdeliver when it comes to reversals for “communication- and credibility-related reasons.” 

“The second reason for the lack of policy reversals may be central banks’ preference for ‘gradualism’—the tendency to adjust policy only partially toward warranted levels at each meeting (this can also be referred to as “interest rate smoothing”),” Goldman says. “For example, if a change in the inflation outlook calls for the funds rate to be 75 basis points (bp) lower, the FOMC might move in three 25bp steps, rather than all at once.”

So central bankers are more than happy to go overboard when working in proactive mode but when it comes to being reactive, they’re likely to stop short of doing what the data calls for in order to save face. Perfect. What could go wrong?


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DOJ Report: ‘Males, Whites, Republicans’ and Porn Watchers Hold ‘Incorrect Beliefs’ About Sex Trafficking

Americans think that addressing human trafficking should be a “high” or “top” priority for the government, according to public opinion research commissioned by the U.S. Justice Department. In a survey of some 2,000 American adults, 80 percent said they have “some” or “a lot” of concern about human trafficking in America and 51 percent think that thwarting it should be a government priority. 

Only 45 percent of those surveyed said they have “some” or “a lot” of concern about U.S. prostitution. 

The research was conducted in the spring of 2014 and released as part of a large report on “legislative, legal, and public opinion strategies that work” to combat sex and labor trafficking. The first two sections of the report examined state strategies, arrests, and prosecutions for human-trafficking offenses from 2003 through 2012. The third section was aimed at identifying “what the public knows, thinks, and feels about human trafficking,” as well as “factors that may cause people to change the way they think about and engage with the issue.”

This section is especially interesting because—based on both the questions asked and the way researchers discuss responses—you can see how the federal government prefers to frame the issue of human trafficking and what rhetorical ploys they’re hoping will catch on. For instance, most survey respondents had “a solid understanding that human trafficking is a form of slavery,” the researchers state, brandishing this idea—human trafficking is modern slavery—as simple fact rather than an emotionally charged frame. 

Overall, the public still holds many “incorrect beliefs about human trafficking,” researchers say.

Many of these “incorrect beliefs,” however, describe what were previously (and in many places still are) common and legally accepted notions about human trafficking: that it is “another word for smuggling immigrants,” that it “always requires threats of or actual physical violence,” and that it “requires movement across state or national borders.” Others are only “incorrect” if you use an incredibly expansive definition of human trafficking (i.e., one that includes all prostitution as sex trafficking).

For instance, researchers note with seeming dismay that while most people (73 percent) say human trafficking is widespread or occasional in the United States, few believe it is widespread in their own states or communities. But there is no evidence to suggest that human trafficking is “widespread” anywhere in America, let alone in every community. The majority of these people are probably correct.  

The report also cautions that “the public has not made the connection between how their own attitudes and behaviors can either help or hinder the movement against human trafficking.” Yet it offer no further information about what this alleged “connection” is. 

Republicans, men, and whites were the least likely to be concerned about human trafficking in America or to say it should be a government priority. Democrats, older adults, racial minorities, and women were the most likely to be concerned and to want the government to take action. Meanwhile, “sex related behaviors” such as having visited a strip club or watched porn within the last year corresponded to greater knowledge about human trafficking but less concern and less belief that it should be a government priority.

The researchers recommended “public awareness campaigns directed toward reticent groups, which includes males, whites, Republicans, those that consume pornography, and those that visit strip clubs.”

Other messages the government would like people to take away include that that people “who knowingly enter prostitution can still be trafficked” (73 percent of respondents agreed to this) and that helping a minor engage in prostitution is always sex trafficking (78 percent concurred). 

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The Drivers Of Inflation: Rent, Obamacare And Minimum Wage Hikes

By Southbay Research

“Recent sizable declines in oil prices will likely hold down overall inflation in the near term. But as the effects of these oil price declines and other transitory factors dissipate and as resource utilization continues to rise, the Committee expects inflation to move gradually back toward its objective.”

      – Janet Yellen, December 2014

“once oil and import prices stop falling, the downward pressure on domestic inflation from those sources should wane, and as the labor market strengthens further, inflation is expected to rise gradually to 2 percent over the medium term.”

– Janet Yellen, February 2016

The Fed’s Dilemma: The Wrong Kind of Inflation

  • Inflation pressure does not come from economic demand (aka Resource Utilization)
    Inflation comes from:
    • Fed loose money policies (shelter aka real estate)
    • Fiscal policies: Obamacare & minimum wage hikes
  • Rate hikes can stem only part of the inflationary factors
  • Fortunately, inflationary pressures continue to remain low

The Fed is Partially Right

  1. Oil price deflation is holding down inflation
  2. The effect is transitory

Oil inflation has been a major factor holding down inflation.

The Fed’s timing is off a bit.  Oil deflation is still working its way through the economy, courtesy of trucking.  In the US, nearly 70% of all goods are shipped via truck, and shipping prices continue to fall.  Because gas price surcharges are sticky downwards and lagging. Which means the effects will be around for most of this year. 

But overall, the big impact has been felt.

 

The Fed is Mostly Wrong

  • Economic demand is not about to drive up consumption-related inflation
  • Inflation comes from areas largely immune to interest rate changes
  • Inflation will remain mild

Problem #1: Resource Utilization is falling and set to keep falling

Per Yellen, the Fed expects resource utilization to rise.  In fact, as measured by Manufacturing Capacity Utilization, resource consumption continues to drop: down for 15 months.

 

Go back to the trucking data.  Prices dropped partly from oil price pass-thrus are partly due to a drop in demand. The load-to-truck ratio is at its lowest in 4 years (the ratio measures volume needing to be shipped relative to available trucks).  

Contrary to Fed expectations, Resource utilization is not even close to rising.

 

Problem #2: Inflation from Fed’s Real Estate-Propping Policies

The biggest source of inflation is shelter aka Real Estate.  Real Estate inflation has been surging for years thanks to the Fed’s specific policies aimed at boosted real estate property prices.

It’s likely that recent tightening will slow this inflation.

The Fed created this part of the problem and is now, belatedly, addressing it.

But it also means that this source of inflation is poised to slow.

 

Problem #3: Obamacare Triggered Inflation

When I had my first baby, the doctor presented certain pre-natal tests.  A few years later and with my 2nd baby on the way, the wonderful world of medicine had concocted a few more tests.  All covered by insurance, naturally.

The reality in medical care is that, up and down the food chain, there is an incentive to spend more money.  From the doctor’s perspective, more tests means more money.  And there’s a cost avoidance element because of the very real threat of malpractice lawsuits if a ‘standard’ test was not performed.

And thanks to insurance coverage, firms are clearly motivated to develop new treatments.

Obamacare turbo-charged this behavior because it effectively wrote a blank check and created a new customer base.  Nearly everyone and everything is covered.  And cost containment has never been a part of Obamacare.

Which has meant inflation in healthcare.

 

And that’s exactly what we see: medical care inflation was dropping until Obamacare started.

Guys like Martin Shrkeli can and do jack up prices easily in a system with maximal coverage and minimal cost containment.

This inflation is not sensitive to interest rates.  And that’s potentially where the Fed may miscalculate by misreading the inflationary signals and wanting to clamp down hard on an area that doesn’t respond to interest rate hikes.

 

Problem #4: Slight Labor Inflation from Minimum Wage Hikes

Beginning in 2014, many cities and states began to hike minimum wages.  Prior to that mandated hiking, many companies began to raise hourly wages anyway.

Laborers have no price power here: 7+ years into a recovery and unemployment in the leisure & hospitality sector is stuck at 7.7%.

But the stark reality of inflation reduced the disposable income of hourly wage earners.  (The perverse irony being that we have fiscal policy in the form of minimum wage hikes trying to counter the inflation created by monetary policy in the form of rising rental costs thanks to surging real estate prices.)

Key point: wage pressure is emerging but for non-economic reasons.

* * *

Add it up

An overview of the components suggests the following for the next year

While we lose the deflationary impact of energy, we gain some deflation in food and the likely 2H disinflation in Shelter and services.

Within Core CPI, we should see falling inflationary pressure in the 2H if labor moderates and shelter inflation flattens.


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The Media Narrative Around Drug Use Is Shifting, But the Harsh Policies for Drug Crimes Are Not

Has the media narrative shifted when it comes to certain types of drug users? While it’s increasingly common to find news reports describing heroin and opioid use as an “epidemic,” a “plague,” and even “an apocalypse,” media are also paying attention to what a new type of “user” looks like, and have adjusted their moral panic accordingly. 

Overall, coverage of U.S. heroin use inflates the scope of the problem by failing to provide relevant context. Americans use drugs like cocaine and hallucinogens at higher rates than heroin, there are still less than a million current heroin users in the U.S., and more Americans died from alcohol-induced causes than heroin and opioids combined in 2014, to provide some perspective. 

But a “new face of heroin” is shifting the discourse on drug addicts in the media. Since introduced by ABC 20/20 in 2010, the “young, middle-class, white” American heroin addict has captured much media attention, and it’s become accepted as truth that middle-class, suburban youth are now heroin’s biggest customer. The drug addicts du jour are no longer so “other”—neither the poor, urban blacks that fueled crack cocaine panic nor the poor, rural whites of methamphetamine lore. They’re “our sons, daughters, brothers, and sisters,” they’re community members. As one father told The New York Times in 2015, “[heroin users are] working right next to you and you don’t even know it. They’re in my daughter’s bedroom—they are my daughter.”

This new (white) face of drug use has led to white families and politicians seeking a “gentler approach to the war on drugs,” The New York Times recently noted. And indeed, there’s some truth to the idea that shifting media coverage of who is using heroin has led to more empathetic responses from law-enforcement leaders and politicians, at least in terms of how they talk about this issue. Increasingly, town halls are being held to discuss how to compassionately combat the “heroin epidemic.”

But has the new, empathetic tone of the coverage and conversation around opioid users actually translated into more humane public policy? Not quite.  

Over the past few years, many states have passed legislation that either requires law enforcement to carry overdose-reversing drugs, such as Narcan, or increases access to these types of drugs with the hope that the number of overdoses will decrease. Yet there are no examples of states decreasing penalties for possession of heroin. And while it appears that law enforcement, prosecutors, and judges are at least talking about being able to use more discretion when handling heroin cases, few statistics are available to see if this talk has translated into action. 

Plus—as with every victim-centered narrative—someone or something has to be blamed. In the case of heroin, the perpetrators have become both the dealer and the drug itself. 

It seems natural that this has begun to happen. When people hear that epidemics, tsunamis, and apocalypses are sweeping through their communities and preying upon community members, it makes sense that they want to blame someone and to “get tough.” Indeed, that’s been the typical response to past perceived drug epidemics, from crack to club drugs. Now we’re beginning to see the same sort of reactionary, tough-on-crime response when it comes to the sale of heroin, although perhaps even more severe than in decades past.

Specifically, we’re starting to see states enact tougher penalties for heroin dealers and “traffickers.” For example, in 2014, Louisiana enacted a law that requires a 10-year mandatory minimum prison sentence for individuals convicted of selling any amount of heroin. Recently, the inflammatory Republican governor of Maine, Paul LePage, called for the state to bring back the guillotine for drug traffickers.

In many more states, prosecutors are routinely charging individuals who sell heroin to someone who later overdoses and dies with murder, manslaughter, and homicide, though these statutes were rarely used in this way before this heroin “epidemic” started. And other states, such as New Hampshire, Delaware, and New York, are considering legislation that allows murder or homicide charges for these crimes.

Already we’re seeing repercussions from these changes. News stories are popping up at least weekly about individuals who have been convicted of murder, manslaughter, and other violent offenses for selling heroin to individuals who overdosed and died. Here are some examples from the past two weeks alone: 

  • In Louisiana, the boyfriend of a woman who died from a heroin overdose was convicted of second-degree murder and sentenced to life in prison. 
  • In Wisconsin, a man was convicted of first-degree reckless homicide for selling heroin to a woman who gave some to a man who overdosed and died in 2014. 
  • In Ohio, a 20-year-old man plead guilty to involuntary manslaughter and was sentenced to three years in prison for selling heroin to a woman who overdosed and died. 
  • In Tennessee, a 26-year-old man plead guilty to attempted second-degree murder for the heroin overdose death of his girlfriend.

Even more startling, a California doctor was just convicted of murder and sentenced to 30 years in prison in connection with the prescription pill overdose deaths of three of her patients. This is the first example in the United States of a doctor being convicted of murder for prescribing medication that patients subsequently fatally overdosed on, and it sets a dangerous precedent.

As these examples show, the narrative surrounding victims may lead to leniency from law enforcement and judges for users, but tough-on-crime policies are still in full swing when it comes to other heroin offenses. And while we wait for media and politicians to sober up, the results of these policies will prove just as unjust as those from previous moral panic related to the war on drugs.

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The U.S. Will Finally Lift the Ban on Direct Flights to Cuba

The U.S. and Cuba have finally reached an agreement to lift the ban on direct commercial flights.

Since 2014, when the two countries first began the process of normalizing their relationship, the only way to travel has been on a chartered flight. By next fall, Americans will be able to purchase direct commercial flights to the island, which is just 90 miles from Key West.

So what’s life been like in Cuba for the past half century? In 2009, Michael Moynihan sat down with Gorki Águila, leader to the Cuban-punk-band Porno Para Ricardo, to talk about free speech under communism.

View this article.

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Footage Shows Chaotic Scene After Massive Suicide Attack Kills 46 In Homs, Syria

“We have reached a provisional agreement in principle on the terms of a cessation of hostilities that could begin in the coming days,” John Kerry said on Sunday, at a news conference in Amman with Jordanian Foreign Minister Nasser Judeh.

Kerry was in contact with Sergei Lavrov today and the two diplomats reportedly agreed on “the modalities” for a ceasefire – whatever that means.

Although this is being reported by both the Western and Russian media as though it marks some kind of turning point, Russia again reiterated that any deal won’t include “the terrorists” and Moscow’s list of “terrorists” in Syria is a bit longer than Washington’s list. While Lavrov indicated that The Kremlin would refer to the UN Security Council’s list of terrorist groups, the situation on the ground is so fluid in Syria that it’s fairly easy to target whomever you please and claim there were terrorists in the area because frankly, there are terrorists, militants, and Sunni extremists virtually everywhere.

Even Kerry himself admitted the ceasefire would likely have no effect. “I do not believe that in the next few days, during which time we try to bring this into effect, there is somehow going to be a tipping point with respect to what is happening on the ground…. The opposition has made clear their determination to fight back,” he said.

Indeed, efforts to curtail the fighting are off to a rather inauspicious start. 46 people were killed in Homs on Sunday after two car bombs hit the city center’s Zahra district. Charred bodies lay smoldering in the wreckage and more than 100 injured bystanders stumbled through the streets, shell shocked. “The explosions at a traffic light at al-Siteen Street in the al-Zahra neighborhood happened within minutes of each other,” RT reports. “At least one of the two blasts was triggered by a suicide bomber driving a car.”

Although no one immediately claimed responsibility, ISIS is the likely culprit. The group killed 26 people in Homs less than a month ago in a similar attack. Here are visuals from the scene:

“Sunday’s attacks also came a day after government advances against Islamic State,” Reuters notes, an apparent reference to the SAA’s push towards Raqqa, Bakr al-Baghdadi’s self-styled capital.

Meanwhile, Bashar al-Assad said Saturday that he’s prepared to halt military operations on the condition that “the terorrists” don’t use a lull in the fighting to their advantage. “The issue relates to more important factors … such as preventing terrorists from using it to improve their positions,” he told El Pais. He also said a ceasefire was impossible unless the Turks and the Saudis stop sending fighters, money, and guns to Sunni militants. “Other countries, especially Turkey, are prevented from sending more terrorists and weapons, or any kind of logistical support.”

Yes, no more “logisitcal support.” Like shelling Azaz to keep the YPG from routing the rebels and consolidating gains in the north. Asked by El Pais about the possibility that Ankara, Riyadh, Doha may send ground troops, Assad said only this: “We’re going to deal with them like we deal with the terrorists.”

*  *  *

In light of the latest attack in Homs, we thought it an opportune time to repost the following images which depict just how desolate the city has become.


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Trump’s Iraq War Flip-Flopping: New at Reason

Donald Trump has backed off from his charge that the Bush administration lied the country into war against Iraq, telling a CNN town-hall broadcast Thursday night that he doesn’t know why Bush invaded. “I’m not talking about lying. I’m not talking about not lying,” he said. “No one knows why we went into Iraq.”

Still, whether George W. Bush lied or not, “it was a horrible decision,” Trump said—perhaps “the worst decision any president has made in the history of this country.” 

Trump’s shameful wimping out under firm questioning from a voter may reflect troubles in the polls, writes Sheldon Richman. Trump was campaigning in South Carolina, where George W. Bush and anything military are popular. But it’s a blow to the badly needed public discussion of the disastrous war. As for Trump, who seems willing to take whatever position serves his purpose at the moment, we now know that he told radio host Howard Stern on September, 11, 2002, six months before Bush started the war, that he favored the mission. Asked by Stern if he approved of the coming invasion, Trump said, “Yeah, I guess so,” adding, “I wish the first time it was done correctly.”

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