en An Insider's View Of The Bitcoinization Of Venezuela <p>With Venezuela &#39;almost&#39; defaulting on their government debt this week, Daniel Osorio, of Andean Capital Advisors, has had a front-row seat in the collapse of the socialist utopia, spending at least a week every month in the almost-failed state.</p> <p>In a brief but fascinating interview on CNBC, Osorio discussed the fact that as Washington unleashes ever tougher sanctions on Maduro, <strong>China and Russia are all that&#39;s left for the country with the largest proven oil reserves in the world.</strong></p> <p><a href=""><img height="269" src="" width="560" /></a></p> <p>Then exposed the realities of living under Maduro&#39;s crazed policies:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;Venezuela was one of the richest per-capita nations in the world... but now, <strong>hyperinflation is a very difficult thing to understand until you have to buy lunch...</strong>&quot;</p> <p>&nbsp;</p> <p>&quot;<strong>The country has not yet dollarized...&nbsp; </strong>but there&#39;s not enough dollars in Venezuela for that to have happened...&quot;</p> <p>&nbsp;</p> <p><strong>&quot;Venezuela is becoming a cashless society... we are starting to see in Venezuela, the first bitcoinization of a sovereign state.&quot;</strong></p> </blockquote> <p>Watch the full interview below...</p> <p><iframe allowfullscreen="true" bgcolor="#131313" height="315" src=";byGuid=3000656913&amp;size=530_298" type="application/x-shockwave-flash" width="560"></iframe></p> <p><a href="">As we detailed previously</a>, as oil prices continued their descent and Maduro&rsquo;s mismanagement of the country&rsquo;s economy intensified, <strong><em>Venezuelans chose a new way to protect themselves financially.</em></strong></p> <h3><u><strong>Venezuela Turns to Cryptocurrencies</strong></u></h3> <p><strong>Between 2014 and 2016, the number of users on just one Venezuelan Bitcoin exchange skyrocketed from just several hundred to over <a href="">85,000 users</a>.</strong> Cheap, subsidized electricity and a failing currency pushed a number of young entrepreneurs to build their own mining operations. One trader, <a href="">John Villar</a>, Caracas-based software developer, most eloquently stated<em><strong> &quot;Bitcoin is a way of rebelling against the system.&quot; </strong></em>While the currency remained a niche form of payment in the country, many users purchased food and goods <a href="">online</a> through online marketplaces such as, albeit indirectly through gift cards purchased with the cryptocurrency.</p> <p><a href="">Noel Alvarez</a>, former president of the Venezuelan Federation of Chambers of Commerce, stated that &ldquo;A maximum of one per cent of the population has access to it, but it is very useful in our situation.&rdquo;</p> <p><strong>Bitcoin&rsquo;s popularity in Venezuela continued to grow. It became the country&rsquo;s leading parallel currency. </strong>Some vendors even begun accepting Bitcoin exclusively. A popular online travel agency, <a href="">Destinia</a>, cited that, due to the bolivar&rsquo;s instability and the trouble many Venezuelans experience when attempting to leave the country, &ldquo;Giving priority to Bitcoin as a payment method could be of help.&quot;</p> <p>While Destina admitted that Venezuela is not a primary focal point for their company, they chose to prioritize Bitcoin payments in the Venezuelan market to facilitate the travel needs of the people in light of the persisting economic downturn.</p> <p><strong>With infrastructure in place, trading and mining becoming more popular, and the crisis escalating, Maduro&rsquo;s government began to take notice.</strong></p> <h3><u><strong>Maduro</strong><strong>&rsquo;s War on Bitcoin</strong></u></h3> <p><strong>The Venezuelan government began to crack down on the Bitcoin community, with police extorting citizens for &ldquo;misusing electricity&rdquo; or undermining the country&rsquo;s economy. </strong>These grievances intensified over time, however, and the attack on miners became more apparent. In the largest raid, two miners were caught with <a href="">11,000 mining computers</a> and were charged with cybercrime, electricity theft, exchange fraud, and even funding terrorism.</p> <p><strong>In Feb. 2017, following the incident, Surbitcoin, Venezuela&rsquo;s most popular exchange went offline. </strong>The company encouraged users to withdraw their money immediately as Banesco, the company&rsquo;s banking partner, was set to revoke the account associated with the exchange. <a href="">Rodrigo Souza</a>, the founder and CEO of Surbitcoin, noted that &quot;When it was found that there were 11,000 mining computers consuming the energy to power a whole town at a time when there are severe electricity shortages, it triggered a reaction.&rdquo; Souza went on to say that the company was not contacted by the government, but Banesco revoked their account as it did not want to be associated with such an operation. Surbitcoin resumed operations two weeks following.</p> <p><strong>The economic crisis continued to escalate as oil prices remained stagnant and Venezuela&rsquo;s oil <a href="">production shuttered</a>.&nbsp;</strong></p> <h3><u><strong>What</strong><strong>&rsquo;s Next? </strong></u></h3> <p>On July 31<sup>st</sup>, in a highly controversial election, <a href="">Venezuela voted</a> for a new constituent assembly giving President Nicolás Maduro even greater control in the country on the brink of civil war. <strong>The new pro-Maduro constituency will now have the power to re-write the country&rsquo;s constitution.</strong></p> <p>Critics of the election have suggested that the vote was manipulated. National Assembly President Julio Borges <a href="">tweeted</a> the vote was <strong>&ldquo;the biggest electoral fraud in our history.&quot;</strong></p> <p>Following the election, Maduro set his sights on opposition parties. At midnight on August 1<sup>st</sup>, two <a href="">opposition leaders</a>, Leopoldo Lopez and Antonio Ledezma, were pulled from their homes by teams of heavily armed guards.</p> <p>U.S. President <a href="">Donald Trump</a> announced in a statement <strong><em>&quot;The United States holds Maduro - who publicly announced just hours earlier that he would move against his political opposition - personally responsible for the health and safety of Mr López, Mr Ledezma and any others seized.&quot;</em></strong></p> <p>&quot;We are evaluating all of our policy options as to what can we do to create a change of conditions, where either Maduro decides he doesn&#39;t have a future and wants to leave of his own accord, or we can return the government processes back to their constitution,&rdquo; Trump added.</p> <p>The United States has since <a href="">frozen the assets</a> of Maduro and is considering deeper sanctions, possibly even targeting PDVSA, Venezuela&rsquo;s state-held oil company. An action which could send the country over the edge. &nbsp;<strong>As tensions rise, the country is entering a state of chaos.</strong></p> <p><u><em><strong>With the collapse of the economy, Venezuelans are running out of options. Bitcoin could come as a saving grace to many people. It has kept food on the tables of families, helped Venezuelans escape the distraught nation, and acted as a voice of rebellion against the oppressive government. But how Maduro&rsquo;s regime will proceed remains to be seen.</strong></em></u></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="518" height="249" alt="" src="" /> </div> </div> </div> Alternative currencies Americas Bitcoin Bitcoin China CNBC Cryptocurrencies Donald Trump Hyperinflation Leopoldo López Maduro’s government Moors National Assembly Nicolás Maduro PDVSA Politics Politics of Venezuela Shortages in Venezuela Television in the United States Venezuela Venezuelan Federation of Chambers of Commerce Venezuelan government Venezuelan protests War World Sun, 24 Sep 2017 19:00:00 +0000 Tyler Durden 604069 at Serendipia Nest: From Boarding House to Border-less Nation <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><a href="">Via The Daily Bell</a></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Does a nation have to be location based? What if one house in San Francisco, one city block in South America, and a villa in Asia were all part of a decentralized nation?</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">What would make it a nation? A unique culture. A set of values. Mutual aid. Even its own currency.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">That is the ultimate goal of co-founder of&nbsp;<a href="" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;">Serendipia Nest</a>, Jean-Loïck Michaux, or as his friends call him, J-LO.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">He co-founded the living space in San Francisco in 2016, which has already been the host to dozens of entrepreneurs from around the world. I sat down and talked to him about Serendipia Nest. [<a href="" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;">You can see the interview on Youtube</a>. Because the audio is sub-par, I have only included select quotes for this article.]</p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; font-size: 17.5px; border-left: 5px solid #eeeeee; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">We decided to start our first community co-living home for entrepeneurs, change makers, artists, risk takers, and the crazy ones as we like to call them.</p> </blockquote> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Right now, it might not seem like much more than a typical boarding house. But when you start to talk to the people who live there, the differences emerge.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Joe McKinney, co-founder of the&nbsp;<a href="" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;">Startup Societies Foundation</a>&nbsp;was one of the first to live in the Nest. I met a medical student living there, and a 17-year-old in his sophomore year at Berkley. Some of the home’s first “solutionners” include founders of tech startups, authors, and people involved in the Singularity Network business incubator.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">One young woman I spoke with from Switzerland had lived in co-living spaces before. Yet she told me this one was different. She was questioning everything and seemed to be at a crossroads in her life. Why? It was because of the people she had met through the Serendipia network. The creative energy that this space fosters had lit a fire in her to give her nomadic life more direction and purpose. And that is really what Serendipia Nest is all about. Meeting and networking with people who inspire you to reach your full potential.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><img src="" width="4032" height="3024" style="box-sizing: border-box; vertical-align: middle; max-width: 100%; display: block; margin: 5px auto; height: auto !important;" class="aligncenter size-full wp-image-24062" /></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Jean-Loick and another co-founder Louis have fostered an environment where people can feed off each other’s creative energy. It is about forming connections that add to your life and help you grow as a person and entrepreneur. At Sendipia Nest people aren’t just thrown into a random pool of roommates. They join a network of changemakers and high achievers.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">And that is the way it naturally evolved. It was started “out of necessity,” J-LO told me. He wasn’t making enough money with another startup, but he wanted to stay in San Francisco. So he and Louis got a house and started to find like-minded people to fill it with.</p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; font-size: 17.5px; border-left: 5px solid #eeeeee; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">We saw that there was really a need for like-minded people like all of us here to get together, live together, and work together… One of the strengths is really the community, filtering and aggregating amazing people from around the world… Here you keep the feeling of being at home, and at the same time, we put processes in place to make the experience seamless.</p> </blockquote> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Some of these processes involve a community manager or “nest mom,” in addition to a twice weekly cleaning service that comes in. Still, everyone is responsible for their own dishes and keeping the common areas free of their junk.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">As people come into the house, they are assigned the avatar of a famous change maker. J-LO thinks this is fun, but also inspiring. It gives them something to live up to. It is all part of the immersive experience of living in a place meant to energize and inspire you to create, build, and be all you can be.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">The project is still only in its infancy, but already it has become quite a successful business. J-Lo and Louis have clearly tapped into a demand for more than just a place to sleep. They have found that people want a community that matches their values. Serendipia delivers a curated community–not one where members are grouped by chance, location alone, or government borders.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">And now they are ready to take this experiment to the next level. They want to start Nests all over the world using a franchise model. The goal is to allow Serendipia members to travel throughout the world and always have a familiar place to live and work. They want to foster a global community of the same types of people they have attracted to their space in San Francisco.</p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; font-size: 17.5px; border-left: 5px solid #eeeeee; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">The idea is to create a decentralized digital startup society, where we will have physical spaces that serve as innovation hubs… It is a borderless digital society, where the only physical expression of it will be the houses.</p> </blockquote> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">The point is a network specifically with entrepreneurs and innovators in mind. They can form relationships, friendships, and business partnerships. And plans are in the works to form a crypto-currency that will help fund these entrepreneurial ventures as well.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">J-Lo wants the crypto-currency of his decentralized nation to be like a bank for entrepreneurs. Just as the community fosters creation and innovation on a social level, the currency would foster the same on a business level. In a sense, it is looking at crypto-currency as company stock.</p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; font-size: 17.5px; border-left: 5px solid #eeeeee; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">We are entering a new era in economics, the tokenized economy… The concept of currency in itself is about to change totally. There won’t be just one or two or three. Depending on communities interacting, each community will have their own currency… [As well as] global currencies which allow people on a global scale to agree on certain values. Why we’ll do our token is because we have a big community, already 2-3 thousand people that follow us regularly.</p> </blockquote> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Overall Serendipia seems like it has some great potential as a mutual aid society. The aspirations seem similar to those of&nbsp;<a href="" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;">Gabriel Scheare, co-founder of Fort Galt, who we heard from a couple weeks ago</a>. His project in Chile is also creating a co-living space for location independent entrepreneurs. Scheare also hopes to foster a global community where people will always have a network to plug into no matter where they find themselves.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">And J-LO sees this as a budding movement in a changing world.</p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; font-size: 17.5px; border-left: 5px solid #eeeeee; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">I think we are living in a turning point in humanity, we are entering probably the next 20 years that are going to be the most creative it has ever been. And we need to change systems, not because we want to but because we need to. Otherwise we are all just going to fall. We need to change the systems, of how we are interacting all together, and how we live together.</p> </blockquote> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Like J-LO said, we are entering a period of rapid change. This is one option for nations of the future. They can function like businesses, with voluntary members. Yet they can solve global problems using entrepreneurial solutions.</p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; font-size: 17.5px; border-left: 5px solid #eeeeee; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">What I am most excited about is that this whole cryptocurrency stuff is going to allow us to achieve our goal which is really to create a new way for people to collaborate on a global scale on issues that really matter and allocate finances… to give opportunities for people to achieve their goals… and change the model of the way we work on issues.</p> </blockquote> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">The more experimentation with projects like these, the better. Who knows what will emerge as the next major model to upset industries which currently deliver subpar living, working, and governing conditions.</p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="1238" height="630" alt="" src="" /> </div> </div> </div> California Decentralization Geography of California Nest San Francisco Select Switzerland YouTube Sun, 24 Sep 2017 18:48:15 +0000 TDB 604083 at Whatever The Fed Does... It's Bullish <p><a href=""><em>Authored by Lance Roberts via,</em></a></p> <h2><u>It&rsquo;s Bullish&hellip;</u></h2> <p>On Wednesday, the Federal Reserve announced the latest decision by the Federal Open Market Committee with respect to monetary policy. That decision contained two primary components:</p> <ol> <li><span style="color: #993300;"><em>No rate hike currently, although, as expected, announcements of further rate hikes in the future, and;</em></span></li> <li><span style="color: #993300;"><em>The beginning of the process to cease reinvestment of the Fed&rsquo;s balance sheet.&nbsp;</em></span></li> </ol> <p>The announcement was notable for two reasons:</p> <ol> <li><span style="color: #993300;"><em>The Fed <strong>did NOT hike rates</strong> because the underlying economic data, and, in particular, the inflation data, suggests the economy is too weak to absorb a further increase currently, and;</em></span></li> <li><span style="color: #993300;"><em>The unwinding of the balance sheet is generally believed <strong>to be bullish</strong> for stocks.&nbsp;</em></span></li> </ol> <p>It is specifically the second point I want to address today, although, as shown below, commodities, PCE inflation, and interest rates currently suggests there is downside risk to current economic projections.</p> <p><a href=""><img class="alignnone size-full wp-image-23787" src="" style="width: 600px; height: 351px;" /></a></p> <p><a href=""><img class="alignnone size-full wp-image-23788" src="" style="width: 599px; height: 350px;" /></a></p> <p>As I discussed <a href="" rel="noopener" target="_blank">on Friday</a>, while the Fed talks a good game about a strengthening economy, improving jobs and rising asset prices, it is interesting to see the <em>&ldquo;coincident timing&rdquo;</em> of the Fed&rsquo;s reinvestment of their balance sheet.</p> <p><a href=""><img class="alignnone size-full wp-image-23789" src="" style="width: 600px; height: 350px;" /></a></p> <p>With that in mind here is the observation to consider.</p> <p>As shown in the table below, since&nbsp;2009, there has been clear evidence that unbridled Central Bank interventions directly supported the market&rsquo;s advance. All them considered <em>&ldquo;bullish&rdquo; </em>for asset prices.</p> <p><a href=""><img class="alignnone size-full wp-image-23790" src="" style="width: 600px; height: 396px;" /></a></p> <p>Of course, after $33 Trillion in liquidity injections, bailouts, and supports, it should not be surprising that asset prices have been elevated well beyond the underlying growth of the economy or corporate revenue.</p> <p><a href=""><img class="alignnone size-full wp-image-23453" src="" style="width: 600px; height: 352px;" /></a></p> <p>Furthermore, the ROI on those investments have been poor at best with each $1 of injections yielding just a $0.063 return economically speaking.</p> <p><a href=""><img class="alignnone size-full wp-image-23791" src="" style="width: 600px; height: 327px;" /></a></p> <p>Now, ironically, despite the clear evidence of the support for the markets provided by near zero-interest rate policy and trillions in monetary injection,<strong> it is believed that&nbsp;<em>&ldquo;unwinding&rdquo;</em>&nbsp;those supports will have&nbsp;<em>&ldquo;no effect&rdquo;</em>&nbsp;on the market.</strong></p> <p><span style="color: #993300;"><strong>Apparently, it doesn&rsquo;t matter what the Fed does, it&rsquo;s <em>&ldquo;bullish.&rdquo;</em></strong></span></p> <p>But let&rsquo;s be very clear about one thing.</p> <p><strong>The Fed does NOT honestly believe in the strength of the recovery, that inflationary pressures are present OR that employment is as strong as stated.&nbsp;</strong></p> <p>It&rsquo;s actually quite the opposite.</p> <p>IF they believed in the strength of the economic data, as they suggest following their regular meetings, they would have been increasing rates and reducing the balance sheet in 2010 as growth exploded from the recessionary lows. But they didn&rsquo;t.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>(The chart below shows 10-2 year rate spread and Fed Funds. Note, historically, when the Fed has started hiking rates, it was NOT the beginning of an economic expansion, but rather the end.)</em></p> </blockquote> <p><a href=""><img class="alignnone size-full wp-image-23793" src="" style="width: 599px; height: 406px;" /></a></p> <p>Nor did they hike rates in conjunction with repeated liquidity injections from their ongoing balance sheet expansions. Such action s should have been the case as the liquidity flows would have offset the drag from higher borrowing costs.</p> <p>But they didn&rsquo;t.</p> <p>The reason they are contracting the balance sheet now, and hiking rates, is due to the realization we are likely closer to the next recessionary period than not. <strong>The 10-2 year spread at just 0.87 as of the end of August<em> (using monthly data)</em> suggests the same.&nbsp;</strong></p> <p><a href="" rel="noopener" target="_blank">As I stated previously:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Unfortunately, what the Federal Reserve is quickly realizing is they have become&nbsp;trapped by their own &lsquo;data-dependent&rsquo;&nbsp;analysis.&nbsp;<strong>Despite ongoing commentary of improving labor markets and economic growth, their own indicators have continued to suggest something very different.</strong></em></p> <p>&nbsp;</p> <p><em><strong>Now they are simply considering abandoning those tools.</strong></em></p> <p>&nbsp;</p> <p><em>Is this a sign they have lost control of monetary policy?</em></p> <p>&nbsp;</p> <p><em>Probably.</em></p> <p>&nbsp;</p> <p><em>Will this ultimately lead to a policy misstep the disrupts the financial, and most importantly, the credit markets?</em></p> <p>&nbsp;</p> <p><em>Definitely.</em></p> <p>&nbsp;</p> <p><em>Why do I say that?&nbsp;<strong>Because</strong>&nbsp;<strong>there have been absolutely ZERO times in history that the Federal Reserve has begun an interest-rate hiking campaign that has not eventually led to a negative outcome.</strong></em></p> <p>&nbsp;</p> <p><em>While the Federal Reserve clearly should not raise rates further in the current environment, it is clear they will remain on their current path. This is because, I believe, the&nbsp;Fed understands that economic cycles do not last forever, and we are closer to the next recession than not.&nbsp;<strong>While raising rates will accelerate a potential recession and a significant market correction, from the Fed&rsquo;s perspective it might be the &lsquo;lesser of two evils.&rsquo;</strong>&nbsp;Being caught near the &lsquo;zero bound&rsquo;&nbsp;at the onset of a recession leaves few options for the Federal Reserve to stabilize an economic decline.&rdquo;</em></p> </blockquote> <hr /> <h2><u><strong>Reality Bites</strong></u></h2> <p>The problem for the Fed, despite their jawboning, is their ability to actually accomplish the <em>&ldquo;Great Balance Sheet Unwinding Of 2018.&rdquo; </em></p> <p>The guys at <a href="" rel="noopener" target="_blank">Knowledge Leaders</a> summed the problem up well:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;If the Fed starts shedding assets at $10 billion/month, ramping to $50 billion/month by 2019,&nbsp;<strong>can the private sector absorb these securities at the same the government budget deficit is set to widen by perhaps $100-$150 billion in the next couple years?</strong></em></p> <p>&nbsp;</p> <p><em><strong>Not to state the obvious, but all else equal, if the fed started shedding assets at $30 billion a month (or $360 billion a year), they would exhaust the entire stock of private savings.</strong>&nbsp;This doesn&rsquo;t allow for larger government deficits.&nbsp;<strong>Given the current savings level, it is mathematically impossible for the Fed to shed assets at $50 billion/month.</strong>&nbsp;By 2019, as we are farther out from peak net savings rates set in 2015, it is likely the stock of private savings is smaller still, and hence the ability for the Fed to shed assets at a rate of $50 billion/month is utterly impossible. Net savings have fallen in the last 2 years from a peak of just over $700 billion to the current $355 billion.&nbsp;<strong>Will savings halve again in the next two years? If so, there is no mathematical way in the world the Fed can shed assets at the rate it outlined yesterday.&rdquo;</strong></em></p> </blockquote> <p>That bit of analysis supports the comments made by BofA on Friday:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&ldquo;</strong>This point can be summarized simply as follows: there is $1 trillion in excess TSY supply coming down the line, and either yields will have to jump for the net issuance to be absorbed, <strong>or equities will have to plunge 30% for the incremental demand to appear.&rdquo;</strong></em></p> </blockquote> <p><a href=""><img class="alignnone size-full wp-image-23761" src="" style="width: 600px; height: 398px;" /></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&ldquo;An unwind of the Fed&rsquo;s balance sheet also increases UST supply to the public</strong>. Ultimately, the Treasury needs to borrow from the public to pay back principal to the Fed resulting in an increase in marketable issuance<strong>. We estimate the Treasury&rsquo;s borrowing needs will increase roughly by $1tn over the next five years due to the Fed roll offs.&nbsp;</strong>However, not all increases in UST supply are made equal. This will be the first time UST supply is projected to increase when EM reserve growth likely remains benign.</em></p> <p>&nbsp;</p> <p><em>Our analysis suggests<span style="color: #993300;">&nbsp;<strong>this would necessitate a significant rise in yields or a notable correction in equity markets to trigger the two largest remaining sources (pensions or mutual funds) to step up to meet the demand shortfall</strong>.</span> Again, this is a slower moving trigger that tightens financial conditions either by necessitating higher yields or lower equities.&rdquo;</em></p> </blockquote> <p><strong>Given that household savings as a percent of GDP, and interest rates, have a long history of correlation, the analysis above suggests that <span style="color: #993300;">both interest rates and equities will be lower in the months ahead.</span></strong></p> <p><a href=""><img class="alignnone size-full wp-image-23798" src="" style="width: 599px; height: 314px;" /></a></p> <p>Potentially, substantially so.</p> <p>This is particularly the case given that&nbsp;<strong>D.C. may be the <em>&ldquo;reality that bites&rdquo;</em> this market right in the @$$.</strong></p> <p>With John McCain confirming on Friday that he will NOT support the latest attempt to <em>&ldquo;repeal and replace&rdquo;</em> the Affordable Care Act (ACA), this leaves little chance for the bill to pass the Senate.</p> <p>As I have repeatedly stated previously, the problem with the lack of repeal of the ACA is the <span style="color: #993300;"><strong>$900 billion</strong> </span>in taxes embedded in the legislation. <strong>This makes the passage of tax reform, on which the market is clinging to support earnings growth and valuations, nearly impossible to pass under the <em>&ldquo;reconciliation&rdquo;</em> process. &nbsp;</strong></p> <p>Furthermore, the inability to come to an agreement to repeal and replace the ACA just goes to show how problematic passing legislation, even in a majority controlled Administration, has become. <strong>Since tax reform legislation is even more complicated and contentious than health care, it is not surprising why it has been 30-years since the last reform was completed.</strong></p> <p>Given that Democrats will oppose any legislative agenda of the current President, and given there are a sufficient number of moderate Republicans who will vote against a more <em>&ldquo;nationalistic agenda,&rdquo;</em> <strong>the probability of aggressive tax cut/reform legislation getting passed in Washington this year has fallen to virtually zero.</strong></p> <p>What will likely wind up being passed are temporary tax cuts, no real substantive reforms, and a grab bag bull of temporary <em>&ldquo;gimmes&rdquo;</em> which will likely disappoint the market&rsquo;s future <em>&ldquo;earnings growth hopes.&rdquo;</em></p> <p>Pay attention to the D.C. intrigue next week as we are likely to see the first release of the proposed tax reform legislation.</p> <p><strong>It could very well be a <em>&ldquo;buy the rumor, sell the news&rdquo;</em> scenario.</strong></p> <hr /> <h2><u><strong>Market Clings To 2500</strong></u></h2> <p>However, that is for another article down the road.</p> <p>The short-term analysis of the market remains broadly positive with both the ongoing bullish trend and recent break above 2500 remaining intact through the close on Friday. As I noted<a href="" rel="noopener" target="_blank"> last weekend:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #993300;"><em>&ldquo;Since the election, there has been a concerted effort to push stocks higher on the hopes of tax reform, ACA repeal, and infrastructure building which would lead to strongly improving earnings for U.S. companies. Now, eleven months later, stocks have been breaching the&nbsp;<strong>psychologically important levels of 2200 in December, 2300 in February and finally 2400 in May. 2500 is the next target. </strong></em></span></p> <p>&nbsp;</p> <p><em>As shown below, the market is pushing a short-term &ldquo;buy&rdquo; signal. However, now at 2-standard deviations above the 75-dma, as seen previously, the market likely has limited upside from here.&rdquo;</em></p> </blockquote> <p><a href=""><img class="alignnone size-full wp-image-23795" src="" style="width: 600px; height: 451px;" /></a></p> <p><strong>While the market does remain bullish in the short-term, keeping our portfolios tilted toward equities, we remain exceedingly cautious due to the chart below.</strong> <em>(I know this is a little busy, but bear with me.)</em></p> <p><a href=""><img class="alignnone size-full wp-image-23796" src="" style="width: 600px; height: 449px;" /></a></p> <p>The chart above looks a market complacency as it relates to market risk. When <em>&ldquo;complacency</em>&rdquo; has reached previous extremes, above the <span style="color: #ff0000;">red bar</span>, markets have often been close to a corrective process or have struggled to make further gains. <strong>With the volatility index back to historic lows, we are reticent to increase equity exposure at these levels further at this juncture.</strong></p> <p>More importantly, the <span style="color: #0000ff;">blue dashed</span> trend line has been solid SUPPORT for the bull market advance since the beginning of 2016.<strong> The recent violation of that trendline, has now turned that previous support into overhead resistance. That resistance is currently weighing on attempts for the market to advance solidly above 2500.&nbsp;</strong></p> <p>With complacency elevated, markets very overbought and sentiment excessively bullish, <a href="" rel="noopener" target="_blank">as discussed last week</a>, we are already cautious. <strong>A failure next week to hold 2500 will turn us even more cautious.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="718" height="363" alt="" src="" /> </div> </div> </div> Borrowing Costs Budget Deficit Business Central bank Economy Equity Markets Excess reserves Federal Open Market Committee Federal Reserve Federal Reserve Federal Reserve System Finance Interest rate John McCain Monetary Policy Monetary policy Money Quantitative easing Reality Recession Recession recovery Senate Volatility Sun, 24 Sep 2017 18:30:00 +0000 Tyler Durden 604072 at "Go Out & Vote!" - Catalan Separatists Defy Spain, Distribute 1 Million Ballots Ahead Of Referendum <p>Following the <a href="">confiscation of millions of ballots in recent days,</a> and the Spanish governments&#39; pressure on local mayors to deter the October 1st independence referendum, <a href="">AP reports</a> that the grassroots groups driving <strong>Catalonia&rsquo;s separatist movement defied Spanish authorities on Sunday by distributing one million ballots for the vote that&nbsp; Madrid has called illegal and vowed to halt.</strong></p> <p><a href=""><img height="328" src="" width="600" /></a></p> <p>Jordi Cuixart, president of the separatist group Omnium Cultural, announced the ballots were being distributed during a rally in Barcelona.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Here are the packs of ballots that we ask you to hand out across Catalonia,&rdquo; </strong>Cuixart said.</p> </blockquote> <p>Catalonia&rsquo;s separatists have <strong>pledged to hold the vote regardless of the central government&rsquo;s wishes </strong>and rallied Sunday in public squares in Barcelona and other towns in the region.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 474px;" /></a></p> <p><strong>Many carried pro-independence flags </strong>and signs calling for the independence vote and urging the &ldquo;Yes&rdquo; side to victory.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 422px;" /></a></p> <p><strong>The crowds were asked by secessionist politicians and grassroots groups to also print and distribute posters supporting the vote</strong>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&ldquo;I ask you to go out and vote! Vote for the future of Catalonia!&rdquo;</strong></em> Carme Forcadell, the speaker of Catalonia&rsquo;s regional parliament, told a Barcelona crowd.</p> </blockquote> <p><a href=""><img alt="" src="" style="width: 599px; height: 399px;" /></a></p> <p>Polls show the 7.5 million residents of Catalonia are roughly split on breaking with the rest of Spain, but <a href="">as;s Don Quijones points out</a> <strong>Madrid&rsquo;s crackdown on Catalonia is already having one major consequence</strong>, presumably unintended: <em><strong>many Catalans who were until recently staunchly opposed to the idea of national independence are now reconsidering their options</strong></em>.</p> <p><strong>If it spirals out of control, the conflict between Barcelona and Madrid could have ugly repercussions far beyond Spanish borders,</strong> as we warned <a href="" rel="noopener" target="_blank">in a 2015 article</a>. Yet the European Union steadfastly refuses to mediate in the crisis, <a href="" rel="noopener" target="_blank">arguing</a> that it must respect Spain&rsquo;s constitution.</p> <p>Given Brussels&rsquo; long-standing habit of meddling in others&rsquo; affairs, including toppling the elected leaders of Greece and Italy at the height of Europe&rsquo;s sovereign debt crisis, it&rsquo;s a poor excuse.&nbsp;And most of Europe&rsquo;s governments (with the possible exception of the UK, which is already engaged in a gargantuan struggle with Brussels) refuse to support Catalonia&rsquo;s separatist movement out of the fear &mdash; largely justifiable &mdash; that it could fuel separatist tensions closer to home.</p> <p><span style="text-decoration: underline;"><em><strong>But the crisis in Catalonia is not going to go away just by ignoring it.</strong></em></span></p> <p>In the last few weeks alone three major international newspapers &mdash; Le Monde, The New York Times and The Times &mdash; have <a href=";utm_medium=social">called</a> for Madrid to allow a referendum. And with Rajoy and his government seemingly determined to pummel Catalonia into submission, at just about any cost, the chances are that their ranks will grow.</p> <p><strong>And this is where Madrid is making arguably its biggest mistake.</strong> For a new country to be born, it must first be recognized. Thanks to years of sustained, non-violent protest and the often overblown reaction of the Rajoy government, <strong>Catalonia has already massively increased the positioning of its brand internationally.</strong> Ten years ago, most people in the world didn&rsquo;t even know what or where Catalonia was. Now, it&rsquo;s hogging the headlines of the front pages of the biggest newspapers.</p> <p><em><strong>&ldquo;Do not underestimate the power of Spanish democracy.&rdquo; </strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="626" height="361" alt="" src="" /> </div> </div> </div> Carme Forcadell Catalan independence movement Catalonia European Union European Union Government of Spain Greece headlines Independence referendums Italy Mariano Rajoy New York Times Nomenclature of Territorial Units for Statistics Politics Politics of Catalonia Rajoy government Sovereign Debt Sun, 24 Sep 2017 18:00:23 +0000 Tyler Durden 604070 at 1 Dead, 7 Injured In Tennessee Church Shooting; "Clown Mask" Wearing Suspect In Custody <p><strong>Update (3 pm ET): </strong>Nashville Mayor Megan Barry has isued a statement about the deadly shooting at a baptist church in nearby Antioch Tennessee today. Antioch is a separate municipality that is governed by the city of Nashville&#39;s government.</p> <p>This is a terrible tragedy for our city,&quot; she said. &quot;My heart aches for the family and friends of the deceased.&quot;</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p dir="ltr" lang="en">JUST IN: Nashville Mayor Megan Barry Issues Statement on Deadly Shooting at Burnette Chapel Church of Christ <a href=""></a></p> <p>&mdash; Breaking911 (@Breaking911) <a href="">September 24, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>According to a report from ABC, the gunman &ldquo;began indiscriminately shooting&rdquo; after entering the church. He was confronted by a church usher and eventually shot himself during the struggle.</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p dir="ltr" lang="en">WATCH: Witness Describes Graphic Scene of Mass Shooting at Tennessee Church</p> <p><a href=""></a></p> <p>&mdash; Breaking911 (@Breaking911) <a href="">September 24, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>&nbsp;</p> <p>* * *</p> <p><strong>Update (2:45 pm ET):</strong> In a disturbing update reportedly gleaned from police scanner chatter, the as-yet-to-be-identified assailant in a church shooting in Antioch, Tennessee <strong>was reportedly wearing a clown mask at the time of the attack, which left one woman dead and seven other people inured, not including the shooter, who police say shot himself.</strong> In an ominous sign, the involvement of the clown mask harkens back to the rash of evil clown sightings across the US last fall, a phenomenon that inspired a mini-hysteria. Perhaps this incident suggests that, just in time for the Halloween season, the phenomenon is set to reoccurr, possibly in an even more malevolent form.</p> <p>Notably, a remake of the horror movie &quot;IT&quot;, which features an evil clown named Pennywise, was released two weeks ago.</p> <p>The shooter is expected to survive, and will hopefully cooperate with police to provide clues as to his motivation.</p> <p>* * *</p> <p><strong>Update (2 pm ET):</strong> One victim has died and seven are being treated for their wounds according to the latest news out of Antioch, Tennessee. The Metro Nashville Police Department said one woman was shot dead in the parking lot, and six other &ldquo;innocents&rdquo; were shot, while a seventh was &quot;pistol whipped&quot;. The shooter, who reportedly shot himself, is being treated for his wounds at a local hospital. Police described the shooter&#39;s wounds as non-life threatening. It&rsquo;s understood the shooting occurred shortly after 11 a.m, according to <a href="">local reports and Russia Today.</a></p> <p>* * *</p> <p><u><strong>Update:</strong></u> <strong><em>&ldquo;Medical personnel are treating 8 wounded churchgoers shot at Burnett&rsquo;s Chapel Church of Christ,&rdquo; </em></strong>Nashville Fire Department said in a tweet Sunday. &ldquo;<strong><em>Shooter among wounded</em></strong>.&rdquo;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Medical personnel are treating 8 wounded church goers shot at Burnett&rsquo;s Chapel Church of Christ. Shooter among wounded.</p> <p>&mdash; Nashville Fire Dept (@NashvilleFD) <a href="">September 24, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">This is a mass casualty situation. All of the wounded have been transported to area hospitals. The majority are older adults.</p> <p>&mdash; Nashville Fire Dept (@NashvilleFD) <a href="">September 24, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>&nbsp;</p> <p>* * *</p> <p><strong>As we detailed earlier, At least six people were shot</strong> at Burnette Chapel Church of Christ in Antioch, Tennessee, according to Metro Nashville Police.</p> <p>A woman living next door to the church told WKRN two people came up to her door and said, <strong>&ldquo;Someone is shooting at us at the church.&rdquo;</strong></p> <p>Her husband went to the church and saw a victim that had been shot in the back.<strong> He saw someone lying in the doorway, and &ldquo;some other people that were shot.&rdquo;</strong></p> <p><a href=""><img height="321" src="" width="600" /></a></p> <p><strong>The extent of the injuries are not known. </strong></p> <p><a href=""><strong><img alt="" src="" style="width: 600px; height: 370px;" /></strong></a></p> <p><a href="">The Tennessean reports</a> that Joseph Pleasant, a spokesman for the Nashville fire department, <strong>confirmed at least six to eight people have been injured and were being transported to Vanderbilt Medical Center.</strong></p> <p><a href=""><img alt="" src="" style="width: 599px; height: 348px;" /></a></p> <p>Pleasant, who was en route to the scene around noon, did not know the severity of the injuries.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">MORE: Here&#39;s a picture from the scene of this shooting at Burnette Chapel Church Of Christ. At least 6 people shot. <a href="">@WKRN</a> <a href=""></a></p> <p>&mdash; Josh Breslow (@JoshBreslowWKRN) <a href="">September 24, 2017</a></p></blockquote> <p><script async src="//" charset="utf-8"></script></p> <p>Metro Nashville <strong>Police said the scene remained active </strong>as of 12:10 p.m. local time and advised people to stay away from the area, though it is not clear if the shooter, or shooters, remain at-large or if someone is in custody.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">JUST IN from <a href="">@MNPDNashville</a>: Church shooting is still an ACTIVE scene. Avoid area near Pin Hook Road.</p> <p>&mdash; Natalie Allison (@natalie_allison) <a href="">September 24, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="911" height="396" alt="" src="" /> </div> </div> </div> Antioch, Tennessee Baptist Church Burnette Chapel Church of Christ Burnette Chapel Church of Christ Burnett’s Chapel Church of Christ Chapel Church of Christ Clown sightings Clowns Confederate States of America Culture Geography of the United States Josh Breslow Local government in the United States Megan Barry Metro Nashville Police Metro Nashville Police Department Nashville Fire Department Nashville's government Nashville, Tennessee Popular culture Postmodernism Television in the United States Tennessee Tennessee Church Twitter Twitter United States Vanderbilt Medical Center WKRN-TV Sun, 24 Sep 2017 17:35:31 +0000 Tyler Durden 604082 at Former Congressman Warns That Foreign Countries Could Bribe The Feds To "Regulate Drudge" <p><a href=""><em>Authored by Alex Thomas via The Daily Sheeple,</em></a></p> <p>A former Republican Congressman from Colorado has <strong>warned that a foreign country could bribe or &ldquo;incentivize&rdquo; the FCC to regulate and&nbsp;&ldquo;rein in&rdquo; popular conservative news outlets, including The Drudge Report.</strong></p> <p><strong><a href=""><img height="263" src="" width="538" /></a></strong></p> <p>Former Rep.&nbsp;Tom Tancredo, in an <a href="" target="_blank">opinion piece for The Hill</a>,&nbsp;started out his shocking warning by&nbsp;<strong>downplaying the so-called Russian actors who may have spent a measly&nbsp;$100,000 with&nbsp;social media giant Facebook </strong>in exchange for ads that hurt Hillary Clinton.</p> <p>Tancredo not only correctly noted that <strong>such a small amount of money could not have actually altered the election</strong>, he also destroyed the notion that the American establishment is &ldquo;surprised&rdquo; by the idea of a foreign government trying to influence an election.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Facebook CEO Mark Zuckerberg said this month that his company sold over $100,000 in social media advertising to a Russian government-controlled front group during the 2016 election cycle. While that amount is a relative pittance and critics are saying the ads were poorly produced &mdash; where is Bill Maher when you really need him? &mdash; the discovery has raised alarms.</p> <p>&nbsp;</p> <p><strong>It&rsquo;s ironic, of course, that America&rsquo;s media elites are suddenly alarmed, considering that the CIA and intelligence agencies abroad have engaged in similar activity for decades.</strong> But putting that aside, what if the bigger danger comes not from amateurish foreign advertisers, but from foreign governments seeking to influence the American regulatory agencies meant to act as the citizens&rsquo; watchdogs?</p> </blockquote> <p>The former congressman then gets to the crux of his warning, asking a very pointed question to the reader that unfortunately sounds all too plausible in this day and age.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>Could a foreign government &mdash; such as Russia, Ukraine, or Mexico, for example &mdash; bribe or &ldquo;incentivize&rdquo; a federal agency such as the Federal Election Commission to regulate (or &ldquo;rein in&rdquo;) conservative news websites?</strong></em></p> <p>&nbsp;</p> <p>The truth could be stranger than fiction if you examine the habits of the federal commissioners who run our regulatory agencies.</p> </blockquote> <p>Tancredo then reveals a fact that news outlets like <a href="" target="_blank">The Daily Sheeple</a> have long reported &ndash; <strong>there are absolutely elements within the federal government who have expressed support for censoring The Drudge Report in the past while at the same time taking dozens of trips overseas, sometimes even bashing the American way of life while doing so.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>For years, Democrats on the&nbsp;FEC have been vocal in their desire to regulate speech on websites such as&nbsp;<a href="" rel="noopener noreferrer" target="_blank">Facebook</a>&nbsp;and&nbsp;<a href="" rel="noopener noreferrer" target="_blank">Twitter</a>, to say nothing of&nbsp;<a href="">Drudge</a>&nbsp;and&nbsp;<a href="">Fox News</a>. Will they use the news of foreign government purchasing social media advertising as an excuse to enter that regulatory minefield more boldly?</strong></p> <p>&nbsp;</p> <p>But what&rsquo;s even more worrisome is that third-party groups, some connected to foreign governments, have spent tens of thousands of dollars helping regulators travel around the world. Who&rsquo;s to say that quid pro quo, spoken or unspoken, isn&rsquo;t part of the equation?</p> <p>&nbsp;</p> <p>It&rsquo;s far more likely than the idea that foreign governments might be using a website like Drudge to spread propaganda. Buying one regulator would be more cost-effective than spending millions trying to sway millions through advertising. After all, &ldquo;I can get it for you wholesale&rdquo; is still the American way.</p> </blockquote> <p><strong>Consider this. As the establishment media continues to push their 24/7 anti-Trump echo&nbsp;chamber, real dangers posed by other countries are going unchecked, with many in the media most likely on board with the idea that top conservative news outlets need to be censored.</strong></p> <p>At this point one can&rsquo;t help but wonder (and worry) that <strong>some form of political censorship of the internet is on the horizon</strong> which will&nbsp;most likely be attempted by connecting the amazing success of someone like Matt Drudge to supposed Russian propaganda operations &ndash; all in the name of censoring non leftist voices.</p> <p><em>&nbsp;</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="538" height="263" alt="" src="" /> </div> </div> </div> Advertising Alternative media Censorship Central Intelligence Agency Communication Conservatism in the United States Digital media Drudge Report Facebook Federal Communications Commission Federal Election Commission federal government Fox News Mass media Matt Drudge Mexico Politics Propaganda techniques Russian government Tom Tancredo Twitter Twitter Ukraine Sun, 24 Sep 2017 17:21:49 +0000 Tyler Durden 604067 at Obamacare Repeal Officially Dead After Cruz Says No <p>In a sudden change of heart that kills senate Republicans&rsquo; effort to pass a bill to repeal and replace Obamacare before a rule allowing Republicans to circumvent a Democratic filibuster expires at the end of the month, Texas Sen. Ted Cruz is now saying he won&rsquo;t support the Graham-Cassidy Obamacare repeal bill.</p> <p>Cruz, who revealed his position during a panel discussion at a Texas Tribune conference in Austin, suggested that the proposal also lacks the vote of Sen. Mike Lee, according to <a href="">Politico</a>. The Texas Republican said he and Lee offered amendments to the Graham-Cassidy proposal last week that would go further in bringing down Obamacare premiums but that the changes weren&rsquo;t included in the latest draft of the bill.</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 304px;" /></a></p> <p>The latest blow to the seven-year-long Obamacare repeal effort comes as President Donald Trump escalates feuds with Both North Korea and US professional sports leagues. Cruz&rsquo;s opposition means that, with both he and McCain saying know and at least two other moderates leaning toward a no, that even if Trump manages to flip Sen. Rand Paul, he wouldn&rsquo;t be able to muster the 50 votes needed for Vice President Mike Pence to break a tie.</p> <p>&ldquo;Right now, they don&rsquo;t have my vote and I don&#39;t think they have Mike Lee&rsquo;s vote either,&rdquo; Cruz said during a panel discussion at the Texas Tribune festival in Austin that also included Sen. John Cornyn.</p> <p>Both Cruz and Cornyn &ndash; a member of senate Republican leadership - had said they back the way the bill would convert Obamacare funding into a system of block grants to states. But while Cornyn said he would vote for the bill as it stands, Cruz said that he wants to see more changes, but declined to elaborate.</p> <p>Ironically, Texas and other states that didn&#39;t expand coverage under Obamacare would fare well under the Graham-Cassidy plan, according to <a href="">Politico</a>, which cited an independent analyses of the bill showing it would save the state some $35 billion between 2020 and 2026.</p> <p>Rand Paul reiterated his opposition to the bill during an appearance on &ldquo;Meet the Press&rdquo; Sunday morning, saying he would only support the bill if the block-grant provision that Cruz purportedly supports (or at least, once supported) is dropped.</p> <p>&quot;What it sets up is a perpetual food fight over the formula,&quot; he said. &quot;What happens when Democrats win? They&#39;re going to claw back that money from Republican states to give to Democrat states.&quot;</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>Trump had said during a rally on Friday that Paul might &ldquo;come around&rdquo; then tweeted Saturday that he might&rsquo;ve found a way to gain the Kentucky Republican&rsquo;s support. News of Cruz&rsquo;s opposition must&rsquo;ve pleased the dozens of protesters who gathered outside the University of Texas auditorium where Cruz was speaking to protest repealing the bill.<br />&nbsp;</p> <p>* * *</p> <p>Here&#39;s a roundup of where key senators stand on Graham-Cassidy. As it suggests, the bill now has a very low chance of passing.</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p dir="ltr" lang="en">Where GOP stands on Graham-Cassidy</p> <p>Murkowski: ????<br />Portman: ????<br />Collins: ????<br />Capito: ????</p> <p>McCain: ?<br />Cruz: ?<br />Paul: ?</p> <p>3 GOPers saying ? stops bill.</p> <p>&mdash; Dan Diamond (@ddiamond) <a href="">September 24, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="520" height="316" alt="" src="" /> </div> </div> </div> 115th United States Congress American Presbyterians Donald Trump Donald Trump Internal Revenue Code John Cornyn John Cornyn Meet The Press Mike Lee Military brats North Korea Obamacare Patient Protection and Affordable Care Act Patient Protection and Affordable Care Act replacement proposals Politics Politics Politics of the United States Rand Paul Republican Party Ted Cruz Tribune United States University of Texas Sun, 24 Sep 2017 16:52:44 +0000 Tyler Durden 604081 at German Establishment Routed: AfD Second In Former East Germany; Result "Less Market Friendly Than Expected" <p>The first sellside comments on today's German elections - which as a reminder <a href="">was a disaster for the </a><strong><a href="">German establishment, </a>following the worst showing for the CDU/CSU since 1949 and the worst result for the SPD since 1945 with support for both parties tumbling since the 2013 elections</strong>...</p> <p><a href=""><img src="" width="500" height="196" /></a></p> <p>... have started to trickle, in and according to SEB, the result is ‘less market-friendly’ than expected.</p> <p>Quoted by Bloomberg, SEB cross-asset strategist Thomas Thygesen said that the result is a victory for Angela Merkel as expected, <strong>but her mandate going into negotiations about deeper euro integration does not look quite as strong</strong>. </p> <p><strong>"It looks like marginally less market-friendly than expected,” </strong>Thygesen said adding that <strong>“I’d say this is in line with our expectation that the euro would pause around $1.20 vs dollar and then maybe retrace a couple of percent over the autumn.”</strong></p> <p><strong>“The AFD above 10% suggests that even here the stakes are high: if the European project doesn’t fly this time in a way that voters like, Germany could look less politically stable in a few years</strong>.”</p> <p>A note from Pantheon's Claus Vistesen is similarly concerned about the election outcome and the viability of the upcoming coalition:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>At a first glance, it seems that building a coalition government will be a little trickier than markets had expected. </strong>If the exit polls prove accurate, the major parties—CDU and SPD—have suffered a drastic setback compared to the elections in 2013. CDU is projected to come out top with 32.5, of the votes, but this is far-, from the 42% in 2013. Similarly, the social democratic SPD have been pegged back to 20%, compared to just under 309, in 2013. The voter-flight from the two main parties appears to have gone in two opposite directions. The populist—and nominally EU sceptic—AFD is set to become the third-biggest party in the Bundestag with 13.5% of the votes, significantly better than the polls were predicting heading into today's vote. But the liberal FDP also is expected to have had a good day, securing 10.5% of the votes. </p> <p>&nbsp;</p> <p>Assuming the exit polls are accurate, Angela Merkel—who almost surely will remain as chancellor—has two options, assuming that a government with AFD is out of the question. <strong>She can form a two-party grand coalition with SPD or she can go for a coalition with the greens—set to gain 9.4%—and FDP. </strong>Our bet is on the latter—we doubt the SPD will go into a grand coalition given its after all scathing defeat—but this will be a slender coalition. Mrs. Merkel is a battle-hardened builder of coalitions, but she will need to draw on all her experience to form one, which can actually get things done. </p> <p>&nbsp;</p> <p><strong>On balance then, we see the exit polls are slightly negative from the point of view of risk assets in the Eurozone and the euro exchange rate. </strong></p> <p>&nbsp;</p> <p><strong>The result also increases the risk of re-elections, but we would put the probability of this at under 15%.</strong></p> </blockquote> <p>* * * </p> <p>Finally, in yet another shock for Germany's establishment, according to Europe Elects, the nationalist AfD was the second strongest party in former East Germany, the more economically backward segment of Germany.</p> <p><a href=""><img src="" width="500" height="283" /></a></p> <p>We now await other analyst observations which we expect will be equally dour on today's election result, and as a result the EURUSD is set to tumble once it opens for early trading.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="690" height="388" alt="" src="" /> </div> </div> </div> Alliance 90/The Greens Angela Merkel Christian Democratic Union of Germany Coalition government European Parliament European Union Eurozone Free Democratic Party German federal election Germany Grand coalition Politics Social Democratic Party of Germany Sun, 24 Sep 2017 16:42:10 +0000 Tyler Durden 604080 at In Major Disappointment, Merkel Wins German Election Despite Worst Result Since 1949; AfD Surges To Enter Parliament <p>Update: FX markets just opened and as expected there is some Euro-selling pressure in the early going...</p> <p><a href=""><img src="" width="500" height="260" /></a></p> <p>&nbsp;</p> <p>Update: here is the latest breakdown according to ARD:</p> <ul> <li>Merkel’s CDU/CSU projected to win 32.9% of votes</li> <li>SPD projected to win 20.8% </li> <li>AfD projected to win 13.1% </li> <li>FDP projected to win 10.5% </li> <li>Greens projected to win 8.9% </li> <li>Left projected to win 8.9% </li> </ul> <p>The following Bloomberg projection of the Bundestag's projected seat breakdown shows just how strong the AfD surge has been in context, and how splintered Germany's establishment is as a result. </p> <p><a href=""><img src="" width="500" height="249" /></a></p> <p>* * * </p> <p>The German polls have officially closed, and the first exit polls numbers come in, confirming the expected fourth victory for Angela Merkel's CDU/CSU, however getting a unexpectedly low 32.5% of the vote, which according to Europe Elects <strong>was the worst result for Merkel's CDU/CSU (EPP) since 1949. </strong>Merkel's main challenger, the SPD, got 20%, <strong>also its worst result since Nazi era 1945; </strong>furthermore, the SPD has said it plans to enter the opposition, collapsing the current CDU/CSU-SPD "grand coalition."&nbsp; </p> <p>In other words, just like in the recent Franch elections, <strong>the German establishment was just trounced:</strong></p> <ul> <li><strong>Worst result for Merkel's CDU/CSU since 1949</strong><strong> <br /></strong></li> <li><strong>Worst result for SPD Since 1945</strong></li> </ul> <p>Meanwhile, there was an unexpected surge for the newcomers: the dramatic (late) surge for the nationalist AfD party, which got a higher than expected 13.5% of the vote, has made it not only the third most popular German party but also the first far-right German party to enter the Bundestag in 60 years. </p> <p>The first exit poll breakdown from ARD is as follows. </p> <ul> <li><strong>CDU/CSU - 32.5% </strong></li> <li><strong>SPD - 20% </strong></li> <li><strong>AfD - 13.5% </strong></li> <li><strong>FDP - 10.5% </strong></li> <li><strong>Greens - 9.5% </strong></li> <li><strong>Left party - 9%</strong></li> </ul> <p><img src="" width="500" height="500" /></p> <p><a href=""><img src="" width="500" height="231" /></a></p> <p>An exit poll from ZDF has a similar breakdown:</p> <ul> <li>CDU/CSU-EPP: 33.5%</li> <li>SPD-S&amp;D: 21%</li> <li>AfD-ENF: 13%</li> <li>FDP-ALDE: 10%</li> <li>LINKE-LEFT: 9%</li> <li>GRÜNE-G/EFA: 9%</li> </ul> <p>Even more troubling for the German establishment <strong>is that the far-right AfD was the second strongest party in former Eastern Germany:</strong></p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Germany, ARD exit poll: Far-right <a href="">#AfD</a> (ENF) second strongest party in former Eastern Germany. <a href="">#btw17</a> <a href="">#Wahl17</a> <a href=""></a></p> <p>— Europe Elects (@EuropeElects) <a href="">September 24, 2017</a></p></blockquote> <script src="//"></script><p>According to the Exit Poll, the likely coalition options include CDU/CSU-SPD or CDU/CSU-FDP-GREENS. The various possibilites are shown below.</p> <p><img src="" width="500" height="372" /></p> <p>However, according to SPD's Schwesig, <strong>the leadership is united on entering opposition</strong>, <strong>meaning a grand coalition is unlikely and the CDU may have to settle for a government with the FDP and the Greens, a so-called "Jamaica Coalition."&nbsp; </strong></p> <p><strong><a href=""><img src="" width="500" height="309" /></a><br /></strong></p> <p>* * * </p> <p>Contrary to earlier reports of muted participation, Europe Elects predicted today's turnout could be as high as 80 per cent, potentially the highest turnout of the past two decades. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Germany, turnout:</p> <p>2005: 77.7%<br />2009: 70.8%<br />2013: 71.5%<br />2017: ~80% (prognosis)<a href="">#btw17</a> <a href="">#gehtwaehlen</a></p> <p>— Europe Elects (@EuropeElects) <a href="">September 24, 2017</a></p></blockquote> <script src="//"></script><p>Furthermore, as Europe Elects adds, today could mark the highest turnout in a key German state since 1988.&nbsp; In Sachsen-Anhalt, as of&nbsp; 4pm, turnout today is around 56 per cent - quite a bit higher than in 2013, 2009, 2005 and 2002. Turnout is not quite as high as 1988 yet, when turnout was around 62 per cent at the same time.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Germany (Sachsen-Anhalt), turnout at different times of the day. Highest turnout since 1998 so far. <a href="">#btw17</a> <a href="">#gehtwaehlen</a> <a href=""></a></p> <p>— Europe Elects (@EuropeElects) <a href="">September 24, 2017</a></p></blockquote> <script src="//"></script><p>Turnout is particularly significant in this election, as fewer CDU and SDP voters heading out to their booths means a larger vote share for the AfD. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1080" height="588" alt="" src="" /> </div> </div> </div> AfD party Alliance 90/The Greens Angela Merkel Christian Democratic Union of Germany Eastern Germany Environment European Green Party European Parliament European Union Free Democratic Party German federal election German party Germany Grand coalition Helmut Kohl Jamaica Coalition Left Party Politics Politics of Europe Politics of Germany Twitter Twitter Sun, 24 Sep 2017 16:06:36 +0000 Tyler Durden 604078 at Iran Closes Airspace To Iraqi Kurdistan Ahead Of Historic Independence Vote <p>The diplomatic and economic noose is tightening around Iraqi Kurdistan one day ahead of its historic independence referendum. On Sunday, the Iranian government announced<strong> closure of its airspace to northern Iraq&#39;s Sulaimani and Erbil Airports, at the request of Iraqi authorities. </strong>The Baghdad government has repeatedly threatened military intervention in Iraq&#39;s autonomous Kurdish region should the vote proceed on Monday, which Baghdad warns could provoke invasion by neighboring states. The United States too has warned that the non-binding referendum will be <strong>&ldquo;particularly provocative and destabilizing&rdquo;</strong> - this as Turkey musters tanks along its border with Iraqi Kurdistan.&nbsp;</p> <p>On Sunday the Iranian Supreme Security Council announced through state media that, &ldquo;At the request of the Iraqi central government, Iranian airspace has been closed on all flights that originate from Kurdistan Region.&rdquo; The move comes after a month&#39;s worth of warnings that Iran could close its borders to Iraqi Kurdistan should the independence vote proceed. Iranian government officials had previously warned that, &ldquo;The republic of Iran has opened its legitimate border gates on the premise of the consent of the federal government of the Iraqi state. If such an event [referendum] happens, these border gates from the perspective of the Islamic Republic of Iran would lose its legitimacy.&quot;</p> <p><em><a href=""><img alt="" src="" style="width: 500px; height: 281px;" /></a><br />Kurdistan referendum ballot book held by an employee from the Independent High Electoral Referendum Commission. Image source: AFP</em></p> <p>Iran worries that an independent Kurdistan at its border would be a destabilizing force concerning Iran&#39;s own sizable Kurdish minority. Iran also reportedly <strong>launched Revolutionary Guard led military drills in its northwest region bordering Iraqi Kurdistan on Sunday.</strong></p> <p>Likewise Turkey has for the past week amassed tanks and troops along its border with Iraq, while reportedly conducting &quot;anti-terror operations&quot; in Kurdish areas of the country. In a geographic sense Turkey would play a key economic lifeline for the completely landlocked Iraqi Kurdistan region.&nbsp;But Turkey&#39;s Parliament voted Saturday to renew for one year a mandate <strong>authorizing military intervention across Iraq&#39;s border should Turkey&#39;s national security come under threat.</strong></p> <p>Over the weekend the Kurdish regional capital of Erbil saw tens of thousands of Kurds flood the streets demonstrating in support of an independent Kurdistan. However, protests against the planned referendum broke out in other areas of Iraq. Violence also began to hit the region as<strong> an <a href="" target="_blank">IED killed four Iraqi Kurdish soldiers</a> and injured over a dozen more in the province of Kirkuk, an area where the referendum is set to be held.&nbsp;</strong></p> <p>Arab parts of the country have voiced frustration that such a divisive move would come at a key moment in the fight against ISIS. The fact that Israel is the only outside country voicing official support for Kurdish independence is also deeply controversial.&nbsp;</p> <p><em><a href=""><img alt="" src="" style="width: 500px; height: 500px;" /></a><br />Map source: International Iran Times</em></p> <p>On Sept. 13 Israeli Prime Minister Benjamin Netanyahu stunned the region when he&nbsp;<a href="" target="_blank">commented specifically of the referendum</a>&nbsp;saying,&nbsp;&quot;Israel supports the legitimate efforts of the Kurdish people to achieve their own state&quot;&nbsp;(though he&#39;s made similar statements starting in 2014). Netanyahu noted further that Israel still considers the Turkey-based Kurdistan Workers Party (PKK) a terrorist group.</p> <p>Other current and former Israeli officials have made bolder and more detailed statements, however.&nbsp;The former Deputy Chief of the General Staff of the Israeli Defense Forces (IDF), Major General Yair Golan <a href="" target="_blank">told a national security policy conference</a> in Washington D.C. in early September that he believes&nbsp;establishing a Greater Kurdistan (a state that will include the Kurdish-populated territories of Syria, Iraq, Iran and Turkey) in the Middle East could be a positive stabilizing force in the region.&nbsp;He also said that he personally does not be believe the PKK to be a terrorist organization.&nbsp;</p> <p>Israel&#39;s public stance provoked a quiet diplomatic war with Turkey, which Israel accuses of supporting Hamas. Turkey has for years accused Israel of forging a secretive vengeful alliance with the PKK due to Turkey&#39;s pro-Palestine statehood position. But Israel has consistently pointed to what it&nbsp;<a href="" target="_blank">perceives as Turkish hypocrisy</a>&nbsp;in failing to designated Hamas a terror organization. Furthermore, Iranian state media has frequently equated an independent Kurdistan with Israeli plans to Balkanize the region as part of a &quot;divide and rule&quot; policy in the region.&nbsp;</p> <p>But despite signs of looming destabilization ahead of Monday&#39;s vote, <strong>it appears Kurdish authorities in Erbil are determined to see the referendum through, no matter the consequences.</strong></p> <p>Quoted by Bloomberg, Kurdistan Regional Government President Massoud Barzani said in televised news conference that Iraq&rsquo;s Kurds &quot;reached conclusion that only through independence can we secure our future&quot; and said he is ready to engage in &quot;very long&quot; talks with Iraq govt on borders, oil, gas, water after the vote. He also added that the Iraq, Kurdistan partnership failed after Baghdad violated the constitution.</p> <p>Like in Germany, Barzani urged voters to head to polls and maintain a &quot;peaceful process&quot; while saying that Peshmerga forces will continue cooperation with Iraqi troops and the U.S.-led coalition in the &quot;fight against terror.&quot;</p> <p>Barzani also said that referendum is not a threat to Turkey&rsquo;s national security, and added that he &quot;doesn&rsquo;t expect military confrontation with Iraq after referendum<strong>&quot;, a rather clear hint that military confrontation with Iraq after the expected vote to break away may be inevitable</strong>. To be sure, Iraq Prime Minister Haider Al-Abadi said in televised speech that Kurdistan&rsquo;s problems are &quot;a result of corruption, mismanagement of public money&quot; <strong>adding that a referendum would only exacerbate such issues.</strong></p> <p>Finally, addressing Iran&#39;s closure of airspace, he said that it was Tehran&rsquo;s decision.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1000" height="561" alt="" src="" /> </div> </div> </div> Baghdad government Corruption federal government Geography of Asia Geography of Iraq Geography of Kurdistan Germany Hamas High Electoral Referendum Commission IDF Iran Iranian government Iraq Iraqi Airways Iraqi Kurdistan Iraqi Kurdistan independence referendum Israel Kurdistan Kurdistan independence movement Kurdistan Regional Government Kurdistan Regional Government Middle East Middle East national security northern Iraq Politics Politics of Iraq Security Council Sulaymaniyah Turkey Turkey's Parliament War Washington D.C. Workers Party Sun, 24 Sep 2017 15:42:30 +0000 Tyler Durden 604075 at