We said that this dynamic means one of two things:
Either a central bank intervenes, or a massive forced buy-in event occurs, and unleashes the mother of all short squeezes, sending the S&P500 to new all time highs, or
Just as the record short interest in July 2008 correctly predicted the biggest financial crisis in history and all those shorts covered at a huge profit, so another historic market collapse is just around the corner.
So far not a single central bank or major policy-making institution has intervened with a major (or for that matter, any) stimulus, but the expectation that one will – be it the G-20 last weekend, China this weekend, the ECB next week or the BOJ the week after – has led to precisely one of the two postulated outcomes: as we reported yesterday, the “mother of all short squeezes” was indeed unleashed, and last week the “most shorted” stocks were up a near record 8.7%, the highest since the furious November 2008 bear market rally.
So does this mean the short squeeze – whether ordinary course of business or engineered by banks to push the price of both the S&P and oil higher so that energy companies can sell equity and repay secured bank loans (as we speculated last week) – is over? According to JPM, not just yet, even though by now the weakest hands have clearly tapped out. In fact, since there has been virtually no rotation into ETFs, the most brutal part of the squeeze may be just ahead. Here’s why:
The covering of short equity positions continued over the past week. The short interest in US equity futures declined over the past week as seen in Figure 1.
But its level remains very negative suggesting there is room for further short covering. The short interest on SPY, the biggest equity ETF, at 4.75% stands below its recent peak of 5.43% but it remains elevated vs. its level of 3.54% at the start of the year. Equity ETFs have not yet seen any significant inflows, suggesting that ETF investors have done little in actively reversing the almost $30bn of equity ETFs sold over the previous two months. CTAs, which have been partly responsible for this year’s selloff, are still short equities and they have only covered a third of the short position they opened in January. In contrast, Discretionary Macro hedge funds, Equity L/S, risk parity funds and balanced mutual funds, appear to be modestly long equities, so they are currently benefitting from the equity rally.
Is it possible that the short squeeze can take the S&P another 100 points higher, reaching Goldman’s 2016 year-end target even as GAAP EPS have crashed to just over 90, and which would mean that the market when valued on a GAAP basis would be at 22x earnings and the most expensive it has ever been? Of course it is, even if that will make the S&P500 the most overbought, and overvalued in history, and just ripe for the next wave of short selling.
So for all those eager to short the S&P but unsure when to do it, keep an eye on the SPY short interest and CTA net exposure. Breakout failures would mean this week’s roundhouse punch to the face of market shorts may be as bad as it gets. On the other hand, if the covering momentum is only just starting, and now it is the ETFers and CTA’s turn to pick up the baton, the next move higher in this bear market squeeze could easily take the S&P500 to new all time highs.
When lawmakers and privacy advocates talk about drone use by police, the conversation usually centers around what kind of policy will protect the privacy of citizens but also allow law enforcement officers to protect people. But security researcher Nils Rodday may have discovered a problem with police drones that hasn’t gotten much play: They’re easily hackable.
As Rodday explained recently to Wired, “you can send a command to the camera, to turn it to the wrong side so they don’t receive the desired information…or you can steal the drone, all the equipment attached to it, and its information.”
It’s as easy as exploiting the drone’s wifi connection or radio protocol, says Rodday. He presented his findings at the RSA Security Conference in San Francisco this week. (Here are his presentation slides.)
Hudson Institute senior fellow Jeffrey Anderson is the latest conservative theorist to offer up a tax plan meant to boost economic spirits. While his focus on growth is encouraging, his belief that middle-class tax relief is the source of broad economic bliss leaves a little to be desired.
Writing in the Wall Street Journal this week, Anderson decried the tax plans offered up by Republican presidential hopefuls given his view that their “biggest beneficiaries would be the top 1%, and they would substantially increase the $19 trillion national debt.” Anderson’s assumptions don’t pair well with economic history.
As Reason Senior Fellow John Tamny explains, because the rich are flush with funds, they can take risks on the dynamic companies of tomorrow that are tautologically necessary for the prosperity that Anderson would like. Adam Smith was very clear that investment migrates away from economies that are stationary, and if the tax-cut focus is on the middle class, a more stationary economy will be ours. Such an economy will do little for the typical American whom Anderson would like to aid.
Back in October, the latest credit impulse in China just rolled over and died.
Ahead of the actual news, MNI said “one source familiar with the data said new loans by the Big Four state-owned commercial banks in October plunged to a level that hasn’t been seen for many years.”
Sure enough, when the numbers hit, it wasn’t a pretty picture. RMB new loans came in at just CNY514bn in October – consensus was far higher at CNY800bn. That was down 6.3% Y/Y. Total social financing fell 29% Y/Y to CNY447 billion, down sharply from September’s CNY1.3 trillion print.
So what, did China do you ask? Well, they unleashed massive fiscal stimulus:
The deluge of fiscal spending was at least the most since May 2014, and seemed to prove that between an acute over-capacity problem and jitters from the reverse-wealth-effect created by last summer’s stock market collapse, businesses and consumers had no desire to borrow, while rising NPLs meant banks were reluctant to lend. As we said at the time, it looked like Beijing was finally prepared to acquiesce to incomparable, pet-rock hating PhD economists like Citi’s Willem Buiter who said the following summer:
Fiscal policy can undoubtedly come to the rescue and prevent a recession in China. The first-best would be for the central government to issue bonds to fund this fiscal stimulus and for the PBOC to buy them and either hold them forever or cancel them, with the PBOC monetizing these Treasury bond purchases. Such a ‘helicopter money drop’ is fiscally, financially and macro-economically prudent in current circumstances, with inflation well below target and likely to fall further.
As we never tire of mentioning, that idea is absurd on its face: you’re simply printing one paper liability and buying it with a another paper liability that you also print.
In any event, fast forward to January, and credit impulse was back with a vengeance, as the Chinese created a mammoth $520 billion in credit ahead on the Chinese New Year. Or, visually:
So China created half a QE3 in the space of just a month, or, as we quipped, “Minsky wants his chart back”.
The reason for the surge was largely the result of frontloading loans mostly at smaller banks, as well as lending to government projects in the first year of 13th Five Year Plan, which helped to boost loan growth. Many economists had expected loans to slow sharply in February as lending to government projects wound down.
However, it turns out this was just the start of China’s latest policy, which is really just a return to its old policy of flooding the economy with debt: as Market News reports expectations that “January’s surprisingly strong new loan growth would prove temporary may have been premature as bank officials in a number of Chinese cities say February new loans look to be just as strong, even with a week-long holiday in the middle of the month.”
According to MNI, new loans so far in February were similar to the levels during the same days of January. The total so far in February is seen at around CNY2 trillion already (and that was weeks ago).
One month and one RRR cut (the fifth since early 2015) later, and perhaps, based on its own experience with expansionary monetary policies that have thus far failed to produce growth or perhaps by watching DM central banks plunge headlong into NIRPdom without making even so much a small dent in the disinflationary impulse, China has come to terms with that fact that perhaps a bit of fiscal stimulus may be the answer.
Well, “a bit,” turned out to be the right characterization, because on Saturday, Beijing said it will aim for an economic growth rate between 6.5-7 percent, (we already knew that) with a consumer inflation target of around 3 percent and money supply expansion of around 13 percent, according to a series of draft reports ahead of the opening of the 12-day parliament.
“Many investors had been hoping China would post an aggressive target for fiscal spending to prop growth,” Reuters notes. “But the draft goal of running a fiscal deficit equivalent to 3 percent of GDP, while up from the previous year’s target of 2.3 percent, still disappointed some who had hoped for a number closer to 4.”
As so, sorry Willem Buiter:
“That’s still the most red ink on the fiscsl account since 1979 and up markedly from last year’s 2.3%, but it’s not enough and should be increased,” a central bank advisor Yu Yongding told Reuters on the sidelines of the meeting.
And here’s an important point from Zhou Hao, economist at Commerzbank in Singapore, also quoted by Reuters: the low figure may reflect concerns that a higher number would signal tolerance for another spree of debt-fueled growth such as that Beijing embarked on in 2009.
In other words, getting too agressive here might have sent the wrong message that, having failed to make a swift transition from the smokestack, investment-led economy to a consumption and services led model, China is simply prepared to go right to back to what (used) to “work.” But that would simply plunge the coutnry back into an ultimately untenable position by exacerbating the acute overcapacity problem and thus driving up NPLs and down demand for credit (well, unless it’s credit companies are taking on to pay off old debts).
Primier Li also reiterated Beijing’s intention to address zombie companies through a combination of mergers, bankruptcies and debt deals.
As for that all important indicator of just where Chinese society is heading: 5.6 million state workers will be laid off in the next two to three years. Long torches and pitchforks.
So if China did not deliver the much desired (and needed by the market) stimulus (which was originally scheduled for last weekend’s disappointing G-20 meeting where nothing concrete emerged either due to Schauble vocal opposition to any more global monetary or fiscal stimulus) what did the first day of China’s National People’s Congress deliver? A lot of promises as the following list from Reuters shows. A whole lot of promises, none of which China will achieve.
To target 2016 GDP growth of between 6.5 percent and 7 pct.
To target 2016 CPI around 3 pct.
To target 2016 M2 growth target around 13 pct.
Sees 2016 budget deficit at 3 pct of GDP.
To use various monetary policy tools to maintain reasonable liquidity.
To continue to implement prudent monetary policy.
To continue to implement proactive fiscal policy.
Will keep renminbi exchange rate basically stable in 2016.
Will continue to improve yuan exchange rate regime in 2016.
To deepen reform of financial sector.
To further liberalise interest rates.
To deepen reform of state owned commercial banks.
To reform stock and bond markets.
To promote sound development of multi-level capital market.
To crack down on unlawful activities in the securities and future markets.
To ensure no systemic or regional financial risks arise.
To strengthen unified macroprudential management of foreign debt.
To launch Shenzhen-Hong Kong stock connect pilot at appropriate time.
To establish catastrophe insurance system.
To develop internet finance.
To develop inclusive and green finance.
To insure proportion of direct financing is increased.
To develop private banks.
Sees growth in outstanding social financing of around 13 pct in 2016.
To launch trial allowing commercial banks to participate in debt equity investment for small businesses.
To establish standard financing mechanisms for local governments to issue debt.
Says China to issue 400 billion yuan of special local government debt in 2016.
To keep urban registered jobless rate below 4.5 pct in 2016.
Will create 10 million new jobs in 2016.
Will quicken supply-side structural reform.
Will appropriately deal with zombie firms in 2016.
To address issue of zombie firms using mergers, reorganizations, bankruptcies and debt restructurings.
Will push ahead with reform of state-owned firms.
Says will resolve overcapacity in industry, focus on steel and coal.
Says 100 billion yuan in subsidies will be used primarily to resettle laid off employees.
Says convinced Hong Kong, Macao will maintain long-term prosperity and stability.
Says will oppose Taiwan independence separatist activities.
Says will safeguard peace and stability in Taiwan Strait.
Quotes from Li’s speech:
“Innovation is the primary driving force for development and must occupy a central place in China’s development strategy.
“We must make consistent efforts to encourage the public to start businesses and make innovations.”
“We should strive to achieve major breakthroughs in basic research, applied research, and research in strategic and frontier fields by 2020.”
“We should also expand major infrastructure projects, with the aim of increasing the length of high-speed railways in service to 30,000 kilometres and linking more than 80 percent of big cities in China with high-speed railways, building or upgrading around 30,000 kilometres of expressways, and achieving full coverage of access to broadband networks in both urban and rural areas.”
“Over the next five years, we should aim to ensure that water consumption, energy consumption, and carbon dioxide emissions per unit of GDP are cut by 23 percent, 15 percent, and 18 percent, respectively, and that forest coverage reaches 23.04 percent.”
“We will promote greater user of Chinese equipment, technology, standards, and services in the international market, and help Chinese manufacturing brands gain international recognition.”
“We wish to actively negotiate and sign the Regional Comprehensive Economic Partnership agreement. We will help speed up negotiations on the establishment of the China-Japan-ROK free trade zone. We will work to make progress in negotiations on investment agreements between China and the United States and between China and the European Union.”
REPORT FROM NATIONAL DEVELOPMENT AND REFORM COMMISSION
Says 2016 retail sales of consumer goods expected to grow 11 pct.
Says 2016 fixed asset investment expected to rise around 10.5 pct.
Says 2016 non-financial outward direct investment to reach $130 billion, up 10 pct.
Says 2016 non-financial foreign direct investment in China to reach $128 billion.
Says 2016 carbon intensity to be cut 3.9 pct.
Says will keep total energy consumption under control in 2016.
Says will work to lift price controls in power, oil and natural gas.
Says will improve the pricing mechanism for refined oil products.
Says will increase support to help turn around steel and coal sectors.
Says to control expansion of coal production and coal power generation capacity.
REPORT FROM FINANCE MINISTRY
China budgets 2016 national fiscal deficit at 2.18 trillion yuan.
China budgets 2016 national fiscal revenue up 3 pct.
China budgets 2016 national fiscal spending up 6.7 pct.
European Central Bank (ECB) head Mario Draghi is running out of options.
Back in 2012, the EU banking system was on the verge of collapse. At that time, various European banks were lurching towards insolvency as the senior most-asset on their balance sheets (EU member nation sovereign bonds) plunged in value.
As a whole, the EU banking system is leveraged at 26 to 1. At these levels, even a 4% drop in your asset values wipes out ALL equity.
In mid-2012, Greek 10 year bonds were yielding 10%, Spanish 10 year bonds were yielding over 7%, Italy’s were yielding over 6%, etc.
These yields were the result of EU sovereign bonds plunging in value (bond yields rise when bond prices fall). And between their exposure to EU sovereign nations’ bonds as well as the hundreds of trillions of Euros worth of derivatives trades attached to said bonds, EU banks were insolvent.
Desperate to hold the EU system together, in late July 2012, ECB head Mario Draghi walked out on stage at an investment conference in London, and promised to do “whatever it takes” to save the Euro and the EU banking system.
The whole thing was a giant bluff. We know from insiders who were present at the time that Draghi’s comments were “off the cuff” and that in fact he had “no real plan” at the time he said it.
Still, the investment herd bought the hype, piling back into EU Sovereign nation bonds and stocks. Despite the fact nothing fundamental had changed for the EU banking system, within six months EU Financial Ministers were proclaiming, “the worst was over.”
Sadly they were incorrect. And none of them have implemented structural reform to insure that the next round of the Crisis will be contained.
The EU’s inflation rate has not increased the desired amount. Now, I am not a fan of inflation any more than you are. But for Central Banks intent on halting debt deflation by any means possible, inflating the EU’s massive sovereign debt loads away is much preferred to default and the accompanying derivative-fueled systemic implosion.
Since Draghi’s “whatever it takes” comment in July 2012, the EU has launched Negative Interest Rate Policy, or NIRP, (June 2014), cut rates deeper into NIRP (September 2014), launched QE (January 2015), cut rates even deeper into NIRP (December 2015) and extended its QE program through March 2017 (December 2015).
Throughout this period, the EU’s inflation rate has been on a steady decline. Indeed, despite the ECB launching both NIRP and QE, the EU moved into deflation in early 2015. It’s since barely flat-lined at 0%, abetted by even deeper NIRP cuts and extending QE through March 2017.
And just last week it collapsed back into negative again.
In short, Draghi’s actions have failed to produce the desired results. The man is growing desperate.
And so, after having discovered that deeper NIRP cuts and an extension of QE failed to get the desired market reaction, Draghi is gaming the markets for something big next week. Once again he’s promising that he can get the EU to a 2% inflation rate.
Wake up world, the EU hasn’t experienced 2% inflation since BEFORE the Crisis erupted in earnest in 2012. Three NIRP cuts and over €1 trillion in QE later, the EU is on the verge of deflation again.
The EU Crisis will began anew within the next six weeks. When it does, Draghi won’t be able to rein it in. His policies have already failed pathetically for over THREE years straight. And at this point he’s virtually out of ammo to combat another downturn.
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Overnight both freedom of press and democracy officially died in Turkey, with time of death just before midnight, when Turkish authorities stormed the Zaman daily, a newspaper staunchly opposed to president Recep Tayyip Erdogan, and after using tear gas and water cannon they seized its headquarters in a dramatic raid that raised fresh alarm over declining media freedoms.
The police used water cannon late on Friday at a hundreds-strong crowd that had formed outside the headquarters of the Zaman daily in Istanbul following a court order issued earlier in the day.
The details: shortly before midnight, a team of police arrived with two Turkish-made TOMA water cannon trucks. They advanced military style towards the waiting supporters, firing the freezing water directly at them. Using bolt-cutters to unlock the iron gate in front of the building, dozens of police then marched into the premises to seize the headquarters and formally place it under administration, pushing aside anyone who stood in their way, Cihan images showed.
Once the building was cleared, the court-appointed administrators – lawyers Tahsin Kaplan and Metin Ilhan and writer Sezai Sengonul – were bussed inside the complex to begin their work, Anatolia said.
The clash in front of the Zaman headquarters is captured in the clip below:
The swoop caused immediate concern in Washington and Brussels amid the intensifying worries over the climate for freedom of expression in Turkey. EU enlargement commissioner Johannes Hahn said he was “extremely worried”. However, the concern is clearly not big enough to threaten Turkey with expulsion from NATO and certainly not big enough to demand those $3 billion back which was given to Turkey to “fight” the refugee crisis and instead was promptly embezzled by the ruling regime.
As AFP adds, Zaman, closely linked to Erdogan’s arch-foe, the US-based preacher Fethullah Gulen, was ordered into administration by the court on the request of Istanbul prosecutors, the state-run Anatolia news agency said. Hundreds of supporters then gathered outside its headquarters awaiting the arrival of bailiffs and security forces after the court order.
“Democracy will continue and free media will not be silent,” Zaman’s editor-in-chief Abdulhamit Bilici was quoted as saying by the Cihan news agency just before the police raid.
“I believe that free media will continue even if we have to write on the walls. I don’t think it is possible to silence media in the digital age,” he told Cihan, part of the Zaman media group.
Don’t be so sure: the Cihan news agency and the Today’s Zaman English language daily – which are also part of the Feza Publications group that owns Zaman – and are also affected by the court order.
Ironically, the raid on Zaman comes as Prime Minister Ahmet Davutoglu heads to Brussels Monday for a crucial summit meeting with EU leaders. The news of the court decision broke as Erdogan was holding talks in Istanbul with EU President Donald Tusk. We doubt that any of Europe’s “leaders” will fail to appear at the summit despite the presence of the now official Turkish despot: after all Turkey is instrumental to stemming the tsunami of refugees, something Erdogan knows very well and is milking for billions of dollars in bribers, pardon, “state aid.”
Erdogan’s crackdown against the Zaman is merely the latest act in his ongoing crusade against his nemesis who lives in the US, preacher Fethullah Gulen, and whom Erdogan has accused ot essentially creating a parallel republic. There is, of course, no such thing but Erdogan gladly uses the strawman to blame anything that goes wrong in Turkey on Gulen’s “parallel state.”
Ankara now accuses Gulen of running what it calls the Fethullahaci Terror Organisation/Parallel State Structure (FeTO/PDY) and seeking to overthrow the legitimate Turkish authorities. Anatolia said the court order was issued on the grounds that Zaman supported the activities of this “terror organisation”.
There have been numerous legal crackdowns on structures linked to the group and on Friday Turkish police arrested four executives of one of the country’s largest conglomerates, accusing them of financing Gulen. Gulen supporters decry the accusations as ridiculous, saying all he leads is a more informal group known as Hizmet (Service).
* * *
The effective seizure of the newspaper by the state added to concerns over freedom of expression in Turkey under Erdogan’s rule. The daily Cumhuriyet newspaper’s editor-in-chief Can Dundar and Ankara bureau chief Erdem Gul were released on an order from Turkey’s top court last week after three months in jail on charges of publishing state secrets. But they still face trial on March 25.
Erdogan’s crackdown on the freedom of speech is so vast, that as of this moment almost 2,000 journalists, bloggers and ordinary citizens, including high school students, have found themselves prosecuted on accusations of insulting Erdogan.
This latest overnight raid on free spech was so brazen, even the U.S. felt compelled to say something about its erstwile mid-east ally and the country which funds and supports ISIS.
US State Department spokesman John Kirby said the court order was “the latest in a series of troubling judicial and law enforcement actions taken by the Turkish government targeting media outlets and others critical of it.” He added that “we urge Turkish authorities to ensure their actions uphold the universal democratic values enshrined in their own constitution, including freedom of speech and especially freedom of the press.”
Europe also chimed in when EU enlargement commissioner Johannes Hahn said he was “extremely worried” about the move “which jeopardises progress” made by Turkey in other areas. He warned on Twitter that Turkey, which is a long-standing candidate to join the European Union, needs to “respect the freedom of the media” and rights were “not negotiable”.
Well it appears they are, especially if Turkey has the most important bargaining chip of all: the future of the European Union, because should the US or the EU antagonize Erdogan too much, he will merely unleash the spigot of Muslim refugees entering Europe leading to the inevitable implosion of the European “Union” just a few months later.
* * *
Finally, here are some additional thoughts from investigative historian Eric Zuesse who writes that…
Democracy Ends in Turkey
On Saturday March 5th, Deutsche Wirtschafts Nachrichten (German Economic News) headlined “Turkish Police Storm Newspaper Office Zaman” and reported that, “Turkish police entered the editorial offices of critical newspaper Zaman on Friday night.” Accompanying videos there showed a police-state in which ‘security’ forces stormed through a crowd of protesters (readers of the newspaper) outside, into Turkey’s leading opposition newspaper, which is also Turkey’s leading English-language newspaper, Zaman, and arrested staffers there, taking them away, to who-knows-what fates.
There’s nothing like Zaman in just about any country: for examples, the New York Times, Washington Post, London Times, and Guardian, aren’t “opposition newspapers,” though they used to cover the opposition in a moderately fair way, prior to the George W. Bush Administration, 9/11, and “regime change in Iraq.” By contrast, Zaman has constantly been very bold in exposing truths that the regime doesn’t want the public to know. But that’s all past history now — it’s at least as radical a change for Turkey as occurred in America with the Bush regime, which controlled the media as effectively as its successor-regime, Obama’s, has done, and which never needed to employ such blatantly police-state methods as Turkey now is clearly doing.
On Thursday March 4th, Tayyip Erdo?an, the Islamist President of U.S. ally and NATO member-nation Turkey, took over Zaman or Today’s Zaman, where the headline on Friday was: “Court appoints trustees to take over management of Zaman, Today’s Zaman.” Until after that report was filed, this was only a court matter, not a blatantly police-state one — using physical forms of force, including armed ‘security’ forces inside, and water-cannons against demonstrators outside.
Here was that Zaman news-report’s opening:
An ?stanbul court has appointed trustees to take over the management of the Feza Media Group, which includes Turkey’s biggest-selling newspaper, the Zaman daily, as well as the Today’s Zaman daily and the Cihan news agency, dealing a fresh blow to the already battered media freedom in Turkey.
The decision was issued by the ?stanbul 6th Criminal Court of Peace at the request of the ?stanbul Chief Public Prosecutor’s Office, which claimed that the media group acted upon orders from what it called the “Fethullahist Terrorist Organization/Parallel State Structure (FETÖ/PDY),” praising the group and helping it achieve its goals in its publications.
The prosecutor also claimed that the alleged terrorist group is cooperating with the Kurdistan Workers’ Party (PKK) terrorist organization to topple the Turkish government and that high-level officials of the two groups have had meetings abroad.
The court decision means that the entire management and the editorial board of Feza Media Group companies will be replaced by the three-member board named by the court.
Turkey’s existing conservative regime is typical of conservative governments in using ‘national security’ rationalizations as excuses for clamping down against the public, supposedly in order to ‘protect’ the public. However, the ‘democratic’ gloss over the transition of a democratic government into a dictatorial one can do nothing to maintain as being true the supposition that the nation is a democracy instead of (now) a dictatorship.
The specific ‘national security’ context behind today’s clamp-down and end of democracy in Turkey, is that the Zaman operations were owned by Erdo?an’s enemy, Fethullah Gülen, who had self-exiled to an estate in Pennsylvania after objecting to the Islamicization of Turkey’s government under Erdo?an. Gülen is no ‘secularist,’ but he came to insist upon a separation between church-and-state, so that there will be no favoritism by the government toward any clergy, and thus no favoritism by the clergy toward any government or political party. In other words: Gülen preaches a relatively progressive version of Islam.
By contrast: Erdo?an has, consistently since he first entered politics, moved Turkey more and more toward a standard Sunni dictatorship, aligned with the Saud family, who own Saudi Arabia, and who hold authority over Islam’s two holiest sites: Mecca and Medina. Their Islamic sect is called Wahhabism inside Saudi Arabia, and Salafism outside Saudi Arabia. The founder was Mohammed Ibn Wahhab in 1744, when he swore a mutual oath with the gang-lord Muhammad Ibn Saud, for Saud’s descendants to control the government, and for Wahhab’s preachers to instruct the faithful that the Sauds have God’s blessing to rule. Under this agreement, Wahhab’s preachers determine the laws, based upon the strictest-possible interpretation of the Quran, which therefore functions as Saudi Arabia’s Constitution, while the Wahhabist preachers constitute the legislative and judicial branches of the Saud-led government, who are the executive branch — the Saud-clan’s leaders.
Outside Saudi Arabia, the sect is called “Salafist,” meaning that they derive their authority from their ancestors. This feature authorizes royal rule, because royal dictators achieve their ‘right’ to rule on the basis of whom their ancestors were (i.e., their parents, going ultimately back to some founder who was a conquerer). For this reason, all of the Arabic royal families are Salafists. Inside Saudi Arabia, the Saud family are Wahhabists (the Saudi version of the Salafist sect).
The continued membership by Turkey in NATO would mean that there is a NATO that no longer has any vestige of justification for continued existence after the end, in 1991, of communism, of the USSR, and of the Warsaw Pact. Democracy no longer survives as even a vestigial excuse for its continuation.
NATO, from now on, is just a gang of nations whose aristocracies crave to conquer the world’s most resource-rich nation: Russia. (It’s done by picking off, one-by-one, Russia’s former allied nations and bringing them into the NATO gang.) The U.S. and Saud family, and Erdo?an family, as well as the other Arabic royal families, and the controlling investors in U.S. and allied weapons-manufacturers, etc., constitute the chief beneficiaries of continuing NATO, but the conquest of Russia is not at all the primary goal of the residents in NATO-member nations. In fact, it’s not a goal that’s even talked about in their ‘elections.’ If those nations were democracies, they’d abandon NATO, as being representative of dictatorship over them all, not of democracy, in any nation.
Last fall, New York City’s health department adopted the nation’s first and only salt warning scheme. The rules, which apply only to chain restaurants, require warnings on most menu items that contain more than 2,300 mg sodium.
At the time of their adoption, Melissa Fleischut, president of the New York State Restaurant Association, called the rules “just the latest in a long litany of superfluous hoops that restaurants here in New York must jump through.”
But this week, an appellate court issued a stay that will prevent the city from implementing the rules, for the time being at least. Baylen Linnekin argues that they should be gone for good.
Peter Ford, who was the UK’s Ambassador in Syria during 2003-2006, was asked by the BBC in their “The Big Questions” interview on February 14th, whether the current Syrian President Bashar al-Assad would have to be a part of the solution in that country after the war is over, and Ambassador Ford said:
“I think sadly, but inevitably, he is. Realistically, Assad is not going to be overthrown. This becomes more clear with every day that passes. Western analysts have been indulging in wishful thinking for 5 years; it’s time to get real, we owe it to the Syrian people to be much more realistic and hard headed about this. The West has to stop propping up the so-called ‘moderate opposition’, which is not moderate at all.”
"The frustrated interviewer asked Mr. Ford about 'what we should have done,' and he responded that 'we should have backed off, we should have not tried to overthrow the regime.' Mr. Ford eloquently added that this policy has been 'like a dog returning to vomit.’”
The video of the interview below showed him making that statement in this context:
The interviewer was clearly anti-Assad, and Ford responded with evident anger by noting (starting at 2:55 on the video) the shocking fact that:
“In Aghanistan, Iraq, Libya, like a dog returning to vomit, we go back to [and the audience already was started to clap here], we never saw a secular Arab regime that we didn’t want to overthrow.”
He was saying there that we support only non-secular regimes, sectarian regimes, in Arabia, this meaning fundamentalist Sunni governments — especially Saudi Arabia, Qatar, Kuwait, UAE, the very same regimes that even the U.S. Secretary of State acknowledged in a 2009 cable that was wikileaked, are the chief regimes that are funding Al Qaeda, ISIS and other jihadist groups. Ford was noting that the United States and UK strive to keep in power those governments, the ones that are led by royal families that supply the bulk of funding for jihadist groups — jihadists who perpetrate terrorism in the United States and Europe. “We never saw a secular Arab regime that we didn’t want to overthrow”: Ambassdor Ford was so bold as to imply that our governments are supporting, under the table, the very same ruling families that they know to be funding (as that cable only vaguely referred to them) “Sunni terrorist groups worldwide” (which includes in Western countries, too).
The BBC’s interviewer ignored that statement; he wasn’t struck by it, such as to ask: “Why are we supporting the chief funders of Islamic jihad? Why are we overthrowing (or in Syria are trying to overthrow) a secular regime, against which we join foreign jihadist groups in order to overthrow that non-sectarian regime; why are these dogs, as you call the U.S. and UK, returning time and again to that vomit?”
This was a live interview program, and so the BBC censors weren’t able to eliminate Ambassador Ford’s responses from the interview; but, instead, the interviewer did his best to interrupt and to talk over Ford’s shocking — and shockingly truthful — assertions about the government (ours) that supposedly represent our interests (and not the interests of Western oil companies etc.). Ford will probably not be invited again to be on live television in the West to air his views about Syria.
Ford’s evident anger at what’s going on, and at the media’s resistance to letting the public know about the reality, appeared to reach near to the edge of his blurting out that ulterior motives have to be behind this addiction to “vomit” — but he was a professional diplomat, and so he was able to restrain himself there.
The U.S. Secretary of State who had specifically requested the fundamentalist-Islamic Arab ‘allies’ to stop funding terrorism was Hillary Clinton, the leading candidate now contending for the Democratic Party’s Presidential nomination. Here she was, expressing her current view regarding Syria, in a recent debate against her Democratic Party opponent, Senator Bernie Sanders:
QUESTIONER: In respect to when you take out Syrian President Bashar al-Assad. Right now or do you wait? Do you tackle ISIS first? You have said, Secretary Clinton, that you come to the conclusion that we have to proceed on both fronts at once. We heard from the senator just this week that we must put aside the issue of how quickly we get rid of Assad and come together with countries, including Russia and Iran, to destroy ISIS first. Is he wrong?
CLINTON: I think we're missing the point here. We are doing both at the same time.
QUESTIONER: But that's what he's saying, we should put that aside for now and go after ISIS.
CLINTON: Well, I don't agree with that.
She's still (now after five years, and even though she knows that we’re supporting jihadist-backing Arabic royal families and their Shariah-law regimes) comes back to that “vomit”: that "we never saw a secular Arab regime that we didn’t want to overthrow.” She’s an example of this addiction, to that “vomit.”
What’s exhibited here is a double-scandal: first, that a person such as that would even be a Democratic Party candidate for the U.S. Presidency (and Jeb Bush shares Hillary Clinton’s foreign policy prescriptions, though he’s virtually certain not to win the Republican Presidential nomination); and, second, that the Western press try to avoid, as much as possible, to expose the fact that this is, indeed, “vomit,” and avoid to explain to their audience the very corrupt governmental and news-media system that enables people such as Ms. Clinton to become and remain a leading Presidential candidate in the United States. Clearly, a person like that isn’t qualified to be in government at all; she’s corrupt, or else incredibly stupid. And no one thinks she’s that stupid. But lots of people accuse her of being corrupt.
The conventional wisdom holds a decline in voter turnout is a sign of apathy. But it may also be a sign of a renaissance in personal responsibility. It could be people saying, "I won't be fooled again, and I won't lend power to them."
Politics has always been a way of redistributing wealth from those who produce to those who are politically favored. As H.L. Mencken observed, every election amounts to no more than an advance auction on stolen goods, a process few would support if they saw its true nature.
Protesters in the 1960s had their flaws, but they were quite correct when they said, "If you're not part of the solution, you're part of the problem." If politics is the problem, what is the solution? I have an answer that may appeal to you.
The first step in solving the problem is to stop actively encouraging it.
Many Americans have intuitively recognized that government is the problem and have stopped voting. There are at least five reasons many people do not vote:
1. Voting in a political election is unethical. The political process is one of institutionalized coercion and force. If you disapprove of those things, then you shouldn't participate in them, even indirectly.
2. Voting compromises your privacy. It gets your name in another government computer database.
3. Voting, as well as registering, entails hanging around government offices and dealing with petty bureaucrats. Most people can find something more enjoyable or productive to do with their time.
4. Voting encourages politicians. A vote against one candidate—a major, and quite understandable, reason why many people vote—is always interpreted as a vote for his opponent. And even though you may be voting for the lesser of two evils, the lesser of two evils is still evil. It amounts to giving the candidate a tacit mandate to impose his will on society.
5. Your vote doesn't count. Politicians like to say it counts because it is to their advantage to get everyone into a busybody mode. But, statistically, one vote in scores of millions makes no more difference than a single grain of sand on a beach. That's entirely apart from the fact that officials manifestly do what they want, not what you want, once they are in office.
Some of these thoughts may impress you as vaguely "unpatriotic"; that is certainly not my intention. But, unfortunately, America isn't the place it once was, either. The United States has evolved from the land of the free and the home of the brave to something more closely resembling the land of entitlements and the home of whining lawsuit filers.
The founding ideas of the country, which were highly libertarian, have been thoroughly distorted. What passes for tradition today is something against which the Founding Fathers would have led a second revolution.
This sorry, scary state of affairs is one reason some people emphasize the importance of joining the process, "working within the system" and "making your voice heard," to ensure that "the bad guys" don't get in. They seem to think that increasing the number of voters will improve the quality of their choices.
This argument compels many sincere people, who otherwise wouldn't dream of coercing their neighbors, to take part in the political process. But it only feeds power to people in politics and government, validating their existence and making them more powerful in the process.
Of course, everybody involved gets something out of it, psychologically if not monetarily. Politics gives people a sense of belonging to something bigger than themselves and so has special appeal for those who cannot find satisfaction within themselves.
We cluck in amazement at the enthusiasm shown at Hitler's giant rallies but figure what goes on here, today, is different. Well, it's never quite the same. But the mindless sloganeering, the cult of the personality, and a certainty of the masses that "their" candidate will kiss their personal lives and make them better are identical.
And even if the favored candidate doesn't help them, then at least he'll keep others from getting too much. Politics is the institutionalization of envy, a vice which proclaims "You've got something I want, and if I can't get one, I'll take yours. And if I can't have yours, I'll destroy it so you can't have it either." Participating in politics is an act of ethical bankruptcy.
The key to getting "rubes" (i.e., voters) to vote and "marks" (i.e., contributors) to give is to talk in generalities while sounding specific and looking sincere and thoughtful, yet decisive. Vapid, venal party hacks can be shaped, like Silly Putty, into salable candidates. People like to kid themselves that they are voting for either "the man" or "the ideas." But few "ideas" are more than slogans artfully packaged to push the right buttons. Voting for "the man" doesn't help much either since these guys are more diligently programmed, posed, and rehearsed than any actor.
This is probably more true today than it's ever been since elections are now won on television, and television is not a forum for expressing complex ideas and philosophies. It lends itself to slogans and glib people who look and talk like game show hosts. People with really "new ideas" wouldn't dream of introducing them to politics because they know ideas can't be explained in 60 seconds.
I'm not intimating, incidentally, that people disinvolve themselves from their communities, social groups, or other voluntary organizations; just the opposite since those relationships are the lifeblood of society. But the political process, or government, is not synonymous with society or even complementary to it. Government is a dead hand on society.
Many people of mature years are amazed at how many young people have voted for Senator Bernie Sanders, and are enthusiastic about the socialism he preaches.
Many of those older people have lived long enough to have seen socialism fail, time and again, in countries around the world. Venezuela, with all its rich oil resources, is currently on the verge of economic collapse, after its heady fling with socialism.
But, most of the young have missed all that, and their dumbed-down education is far more likely to present the inspiring rhetoric of socialism than to present its dismal track record.
Socialism is in fact a wonderful vision — a world of the imagination far better than any place anywhere in the real world, at any time over the thousands of years of recorded history. Even many conservatives would probably prefer to live in such a world, if they thought it was possible.
Who would not want to live in a world where college was free, along with many other things, and where government protected us from the shocks of life and guaranteed our happiness? It would be Disneyland for adults!
Free college of course has an appeal to the young, especially those who have never studied economics. But college cannot possibly be free. It would not be free even if there was no such thing as money.
Consider the costs of just one professor teaching just one course. He or she has probably spent more than 20 years being educated, from kindergarten to the Ph.D., before ending up standing in front of a class and trying to convey some of the knowledge picked up in all those years. That means being fed, clothed and housed all those years, along with other expenses.
All the people who grew the food, manufactured the clothing and built the housing used by this one professor, for at least two decades, had to be compensated for their efforts, or those efforts would not continue. And of course someone has to produce food, clothing and shelter for all the students in this one course, as well as books, computers and other requirements or amenities.
Add up all these costs — and multiply by a hundred or so — and you have a rough idea of what going to college costs. Whether these costs are paid by using money in a capitalist economy or by some other mechanism in a feudal economy, a socialist economy, or whatever, there are heavy costs to pay.
Moreover, under any economic system, those costs are either going to be paid or there are not going to be any colleges. Money is just an artificial device for getting real things done.
Those young people who understand this, whether clearly or vaguely, are not likely to be deterred from wanting socialism. Because what they really want is for somebody else to pay for their decision to go to college.
A market economy is one in which whoever makes a decision is the one who pays for that decision. It forces people to be sure that what they want to do is really worth what it is going to cost.
Even the existing subsidies of college have led many people to go to college who have very little interest in, or benefit from, going to college, except for enjoying the social scene while postponing adult responsibilities for a few years.
Whether judging by test results, by number of hours per week devoted to studying or by on-campus interviews, it is clear that today's college students learn a lot less than college students once did. If college becomes "free," even more people can attend college without bothering to become educated and without acquiring re any economically meaningful skills.
More fundamentally, making all sorts of other things "free" means more of those things being wasted as well. Even worse, it means putting more and more of the decisions that shape our lives into the hands of politicians and bureaucrats who control the purse strings.
Obamacare has given us a foretaste of what that means in reality, despite how wonderful it may sound in political rhetoric.
Worst of all, government giveaways polarize society into segments, each trying to get what it wants at somebody else's expense, creating mutual bitterness that can tear a society apart. Some seem to blithely assume that "the rich" can be taxed to pay for what they want — as if "the rich" don't see what is coming and take their wealth elsewhere.