http://www.zerohedge.com/fullrss2.xml/component/option%2Ccom_docman/Itemid%2C200023/gid%2C397/BoomBustBlog/BoomBustBlog/BoomBustBlog/BoomBustBlog/2009/2009/07/2009/2009/2009/07/2009/07/2009/2009/2009/2009/2009/07/2009/2009/2009/07/2009/07/2009/07/2009/07/news/suffered%20from%20dehydration%20near%20the%20end%20of%20her%20speech%20at%20the%20University%20of%20Massachusetts%20at%20Amherst%20on%20Thursday%20evening%2C%20but%20is%20said%20to%20be%20well%20according%20to%20a%20Federal%20Reserve%20spokeswoman en Senators Slam Loretta Lynch: End The Climate Change Witch Hunt http://www.zerohedge.com/news/2016-05-29/senators-slam-loretta-lynch-end-climate-change-witch-hunt <p>Exxon Mobile filed court papers in Texas last month seeking to block a subpoena issued in March by the attorney general of the U.S. Virgin Islands which <a href="http://www.denverpost.com/2016/03/29/u-s-virgin-islands-massachusetts-to-investigate-exxon/">alleges </a>that <strong>Exxon is deceiving the public and shareholders about the effects of climate change</strong>. Exxon has said that the subpoena is an unwarranted fishing expedition into Exxon's internal records and violates its constitutional rights; "The chilling effect of this inquiry, <strong>which discriminates based on viewpoint to target one side of an ongoing policy debate</strong>, strikes at the protected speech at the core of the First Amendment" the court filing said according to the <a href="http://www.wsj.com/articles/exxon-fires-back-at-climate-change-probe-1460574535">WSJ</a>. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/29/20160529_exxon.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/29/20160529_exxon_0.JPG" width="600" height="444" /></a></p> <p>&nbsp;</p> <p>As we <a href="http://www.zerohedge.com/news/2015-11-05/it-begins-new-york-attorney-general-cracks-down-exxon-over-climate-crimes-global-war">reported last year</a>, Exxon found itself on the shocking receiving end of an administration with a clear agenda for payback. </p> <p>Exxon signed an agreement which deepened ties with Russia's state-owned oil company Rosneft just as the Obama administration was trying to isolate Russia and its economy. That payback, which had the added bonuses of cementing Obama's liberal <span style="text-decoration: line-through;">global warming</span> climate change crackdown (which incidentally benefits none other than carbon credit powerhouse Goldman Sachs the most) came when the New York Attorney General launching a <strong>sweeping investigation of Exxon mobile to determine whether the company lied to the public about the risks of climate change, or to investors about how that risk might hurt the oil business</strong>.</p> <p>Given that the U.S. Virgin Islands AG has now joined in, one thing that has become clear is that Exxon is now being targeted by the government for its alleged views on climate change, which implicitly run <a href="https://www.whitehouse.gov/climate-change">contrary to Obama's</a>. Of course, the government applying pressure to those with opposing views is nothing new, with the government finally admitting to its <a href="http://www.zerohedge.com/news/2013-05-10/irs-admits-apologizes-targeting-conservatives-during-2012-election">targeting of conservatives through the IRS</a> as a recent example.&nbsp; </p> <p>In light of the continued push by state AGs to go after Exxon on climate change, five senators have sent a letter to U.S. Attorney General Loretta Lynch demanding that in two weeks, the Department of Justice "<strong>immediately cease its ongoing use of law enforcement resources to stifle private debate on one of the most controversial public issues of our time - climate change.</strong>" Or, said otherwise, to end the government witch hunt against political opponents of president Obama's energy agenda.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/29/20160529_lynch.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/29/20160529_lynch_0.JPG" width="600" height="303" /></a></p> <p>&nbsp;</p> <p>As <a href="http://www.breitbart.com/texas/2016/05/27/senators-warn-lynch-witch-hunt-of-obama-energy-opponents-is-abuse-of-power/">Breitbart adds,</a> the five republican Senators warned the DOJ her that any improper assertion of federal investigatory or prosecutorial power is an abuse of power.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Senators Ted Cruz (R-TX), Mike Lee (R-UT), Jeff Sessions (R-AL), David Vitter (R-LA), and David Perdue (R-GA), signed the letter warning Lynch that “<strong>As you well know, initiating criminal prosecution for a private entity’s opinions on climate change is a blatant violation of the First Amendment and an abuse of power that rises to the level of prosecutorial misconduct</strong>.”</em></p> <p><em><br /></em></p> <p><em>They add, “<strong>These actions provide disturbing confirmation that government officials at all levels are threatening to wield the sword of law enforcement to silence debate on climate change.</strong>”</em></p> <p><em><br /></em></p> <p><em>The U.S. senators note in their letter that “in 2015, the [DOJ] was asked by a ‘coalition of environmentalists and lawmakers’ to investigate whether the past decisions of a private sector company to adopt and publicly disclose certain views on climate issues, and to refrain from adopting and publicly disclosing others, may have violated the Racketeer Influenced and Corrupt Organizations Act and related laws.”</em></p> <p>&nbsp;</p> <p><em>Statements from a March 29, 2016, press conference held by Democrat attorneys general from five states, and staff from Democrat AG offices in eleven other states, clearly exposed that similar investigations are ongoing, they write.</em></p> </blockquote> <p>The 'coalition of environmentalists and lawmakers' consists of about a dozen people formed to "establish in public's mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm". Members include including environmental campaign veteran Kenny Bruno and Bill McKibben, founder of 350.org, two activists who helped lead the successful fight to block the Keystone XL pipeline according to the <a href="http://www.wsj.com/articles/exxon-fires-back-at-climate-change-probe-1460574535">WSJ</a>. Interestingly, the Rockefeller Family Fund hosted a closed door event in January that brought this group together. The Rockefeller family is run by heirs of John D. Rockefeller, founder of Standard Oil, which eventually became ExxonMobil.</p> <p>The senators had strong comments on the subject, all of them sharing the same sentiment, which is that there is government intrusion on private lives in order to silence opposing views.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>“<span style="text-decoration: underline;">Freedom of thought and inquiry is at the very heart of liberty</span>,” Sen. Cruz said. “<strong>Sadly, the Obama administration and its allies in state attorney general offices across the country are threatening to use the power of government to intimidate and ultimately silence companies and researchers who do not agree with the government’s opinions about the allegedly harmful effects of climate change and what should be done about it</strong>. This is an abuse of power and a direct assault on the First Amendment. The Obama Justice Department should immediately cease any further consideration of such action and should instead do everything in its power to protect the freedom of thought of all Americans.”</em></p> <p>&nbsp;</p> <p><em>“<strong>Threatening prosecution of those who dare to challenge the most outlandish scaremongering by climate activists strikes at the very heart of the Free Speech protections on which this nation was founded</strong>,” Sen. Lee said. “<strong>Issuing subpoenas to harass researchers and academics with whom they have communicated, as some state attorneys general offices have done, shows a basic disregard for Americans’ Freedom of Association. The public expects us to prevent such abuses, not perpetrate them</strong>. It is our responsibility to contain the inevitable chilling effects by calling for an end to any consideration by the Department of Justice of such harassment at once.”</em></p> <p>&nbsp;</p> <p><em>“Unnecessary government intrusion of private citizens’ lives is an unfortunate characteristic of the reign of the Obama Administration,” Sen. Vitter said. “It is contemptible for the Justice Department to target and threaten individual American citizens and private or non-profit organizations in pursuit of its far-left environmental agenda.”</em></p> </blockquote> <p>Texas Attorney General Ken Paxton and Alabama Attorney General Luther Strange have filed a motion to intervene in the case involving Exxon's subpoena from U.S. Virgin Islands AG Claude Walker, who is seeking decades worth of internal records concerning the company's public statements over the potential impacts of climate change. Walker is seeking to determine if the company committed securities fraud, or violated the Criminally Influenced and Corrupt Organizations Act.</p> <p>"<strong>This case is about abusing the power of the subpoena to force Exxon to turn over many decades' worth of records, so an attorney general with an agenda can pore over them in hopes of finding something incriminating.</strong>" Paxton said, adding that it could "set a precedent that anyone can be criminally investigated" for views that differ from the federal government.</p> <p>* * *</p> <p>Whether or not this is enough to stop the inquiry into Exxon, the message is clear: disagree with the government, especially on deeply liberal issues, at your own risk - few have pockets deep enough to fight these types of battles in court, even fewer can ride out the witch hunt that will lead many businesses to going under, something the government understands very well.</p> <p><em>Full letter here:</em></p> <p><iframe src="https://www.scribd.com/embeds/314027390/content?start_page=1&amp;view_mode=scroll&amp;access_key=key-R99u7C97w9n3qAVGjm21&amp;show_recommendations=false" width="100%" height="600" frameborder="0" scrolling="no"></iframe></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="737" height="372" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/20160529_lynch.JPG?1464528329" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-29/senators-slam-loretta-lynch-end-climate-change-witch-hunt#comments Department of Justice Exxon Exxon Mobile First Amendment Global Warming goldman sachs Goldman Sachs None Obama Administration Securities Fraud Sun, 29 May 2016 13:26:19 +0000 Tyler Durden 562227 at http://www.zerohedge.com Former Morgan Stanley Chief Asia Economist: "Don't Listen To The Ruling Elite, The World Economy Is In Real Trouble" http://www.zerohedge.com/news/2016-05-28/dont-listen-ruling-elite-world-economy-real-trouble <p><a href="http://www.scmp.com/comment/insight-opinion/article/1919092/dont-listen-ruling-elite-world-economy-real-trouble"><em>Authored by Andy Xie, the former Morgan Stanley chief Asia-Pacific economist, originally posted Op-Ed at The South China Morning Post,</em></a></p> <p>Andy Xie says the world&#39;s elite that are attending the G7, G20, Davos and other wasteful meetings are wrong to try to pin the blame for the turmoil on people&rsquo;s psychology; <em><strong>all signs point to a prolonged period of global stagnation and instability.</strong></em></p> <p>Before the current G7 meetings waste of time, The G20 working group meeting in Shanghai didn&rsquo;t come up with any constructive proposals for reviving the global economy and, instead, complained that the recent market turmoil didn&rsquo;t reflect the &ldquo;underlying fundamentals of the global economy&rdquo;. The oil price has declined by 70 per cent since June 2014, while the Brazilian real has halved, and the Russian rouble is down by 60 per cent. <strong>The global economy is on the cusp of another recession, and these important people blamed it all on some sort of psychological problem of the people.</strong></p> <p>Over the past two decades, the global economy has been blessed with the entry and participation of 800 million hard-working Chinese, plus the information revolution. The pie should have increased enough in size to make most people happier. Yet, the opposite has happened.<strong> The world has gone from one crisis to another. People are complaining everywhere. This is due to mismanagement by the very people who attend the G20 meetings, the Davos boondoggle, and so many other global meetings that waste taxpayers&rsquo; money and put inept leaders in the limelight.</strong></p> <p>One major complaint that people have is that the system is rigged &ndash; that is, the rising income concentration is not due to free market competition, but <strong>a rigged system that favours the politically powerful. </strong>This is largely true. The new billionaires over the past two decades have come mostly from finance and property. Few made it the way Steve Jobs or Bill Gates did, creating something that makes people more productive.</p> <p class="v2-processed"><strong>The most important factor in the rigged system is monetary policy being used to pump up financial markets in the name of stimulating growth for people&rsquo;s benefit. </strong>This is essentially the trickle-down wealth effect, that is, making some people in the financial food chain rich while the spillover gives people a few crumbs. Yet, instead of crumbs, the wealth effect has pumped up property prices in Manhattan, London and Hong Kong, as well as the price of modern art. Essentially, the wealth effect has stayed within the small circle of the wealthy. <strong>And these people show up at Davos to congratulate policymakers on their &ldquo;successes&rdquo;.</strong></p> <p class="v2-processed"><strong>Wasting resources is an equally important factor in making the global economy weak and prone to crisis. </strong>After the 2008 financial crisis, the US government and Federal Reserve spent trillions of dollars to bail out the people who created the crisis. Instead of facing bankruptcy and jail, these people have become richer than ever. Predictably, they have used their resources to rig the system further.</p> <p class="v2-processed">After 2008, when Beijing launched a massive investment push, the global ruling elite all praised China for saving the global economy. <strong>China has increased credit by over US$20 trillion to finance the construction of factories and homes. However, investment does not guarantee final demand. </strong>The process of building up a factory creates demand. But, when it is completed, it needs to sell its goods to someone. What China did was build even more factories to keep this factory occupied. This Ponzi scheme couldn&rsquo;t last long.<u><strong> We are just seeing the beginning of its devastating consequences.</strong></u></p> <p class="v2-processed"><strong>China&rsquo;s overinvestment has pumped up commodity prices, which has led to another Ponzi scheme.</strong> As major central banks cut interest rates to zero, credit demand didn&rsquo;t respond in general, as businesses didn&rsquo;t see growing demand from people who were suffering income erosion. The commodity boom justified credit demand for the time being. Trillions of dollars were poured into the energy sector, and trillions more into other commodity industries. Businesses in emerging economies that were pumped up by rising commodity prices borrowed US$9 trillion. <strong>This mountain of debt is floating on a commodity Ponzi scheme that is floating on China&rsquo;s investment Ponzi scheme. Its bursting is just the beginning. Its impact on the global financial system could be bigger than the 2008 financial crisis.</strong></p> <p class="v2-processed">In addition to the bursting of the global commodity bubble, <u><strong>China&rsquo;s overcapacity bubble will kill global capital expenditure for many years to come.</strong></u> Even though Chinese investment isn&rsquo;t growing like before, investment at half of gross domestic product is still adding overcapacity by over US$1 trillion per year &ndash; the problem is getting bigger.</p> <p class="v2-processed"><em><strong>All indications are that China wants to export the overcapacity. And why not? China overinvested to bail out the global economy. It shouldn&rsquo;t pay the whole price for the mistake.</strong></em></p> <p class="v2-processed"><strong>China&rsquo;s strategy would lead to de-industrialisation in most of the world, in particular middle-income emerging economies.</strong> Weak capital expenditure would lead to weak employment and labour income. The resulting bankruptcies may further weaken the global credit system.</p> <p class="v2-processed"><u><strong>The global economy is facing years of stagnation, deflation and financial crises. </strong></u>The current economic managers will resort to the same tricks of pumping up the financial markets with liquidity, to no avail. In the meantime, political instability will spread around the world. It will take a long time for the right leaders to emerge.</p> <p class="v2-processed"><u><strong>Initially, populists will win.</strong></u> Their policies, unfortunately, will focus on protectionism and rolling back the World Trade Organisation system. <strong><em>That will lead to further economic turmoil in the global economy. Protectionism may suddenly jump-start inflation that will quickly become hyperinflation, which would certainly lead to violent revolutions.</em></strong></p> <p class="v2-processed"><u><strong>The world is on the cusp of a prolonged period of stagnation and instability. Our ruling elite is blaming it on people seeing things. Their strategy is to change people&rsquo;s psychology. Unfortunately for them, the world is catching fire and that fire will eventually reach their Davos chalets.</strong></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="239" height="135" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160528_fire.jpg?1464452219" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/dont-listen-ruling-elite-world-economy-real-trouble#comments Bill Gates Central Banks China Davos Federal Reserve Global Economy Gross Domestic Product Hong Kong Hyperinflation Monetary Policy Morgan Stanley Recession Steve Jobs World Trade Sun, 29 May 2016 11:20:00 +0000 Tyler Durden 562174 at http://www.zerohedge.com How Russia Is Preparing For WWIII http://www.zerohedge.com/news/2016-05-28/how-russia-preparing-wwiii <p><a href="http://thesaker.is/how-russia-is-preparing-for-wwiii/"><em>Authored by The Saker,</em></a></p> <p>I have recently posted a piece in which <a href="http://thesaker.is/debunking-popular-cliches-about-modern-warfare/" target="_blank">I <strong>tried to debunk a few popular myths about modern warfare</strong></a><strong>. </strong>Judging by many comments which I received in response to this post, I have to say that the myths in question are still alive and well and that I clearly failed to convince many readers. What I propose to do today, is to<strong> look at what Russia is really doing in response to the growing threat from the West. </strong>But first, I have to set the context or, more accurately, re-set the context in which Russia is operating. Let&rsquo;s begin by looking at the AngloZionist policies towards Russia.</p> <h2><u><strong>The West&rsquo;s actions</strong>:</u></h2> <p><strong>First on this list is, obviously, the conquest by NATO of all of Eastern Europe.</strong> I speak of conquest because that is exactly what it is, but a conquest achieved according to the rules of 21<sup>st</sup> century warfare which I define as &ldquo;80% informational, 15% economic and 5% military&rdquo;. Yes, I know, the good folks of Eastern Europe were just dreaming of being subjugated by the US/NATO/EU/etc &ndash; but so what? Anyone who has read Sun Tzu will immediately recognize that this deep desire to be &lsquo;incorporated&rsquo; into the AngloZionist &ldquo;Borg&rdquo; is nothing else but the result of a crushed self-identity, a deep-seated inferiority complex and, thus, a surrender which did not even have to be induced by military means. At the end of the day, it makes no difference what the locals thought they were achieving &ndash; they are now subjects of the Empire and their countries more or less irrelevant colonies in the fringe of the AngloZionist Empire. As always, the local <em>comprador</em> elite is now bubbling with pride at being, or so they think, accepted as equals by their new masters (think Poroshenko, Tusk or Grybauskaite) which gives them the courage to bark at Moscow from behind the NATO fence. Good for them.</p> <p><strong>Second is the now total colonization of Western Europe into the Empire.</strong> While NATO moved to the East, the US also took much deeper control of Western Europe which is now administered for the Empire by what the former Mayor of London once called the &ldquo;<a href="https://www.youtube.com/watch?v=LI5oRTL-6rA" target="_blank">great supine protoplasmic invertebrate jellies</a>&rdquo; &ndash; faceless bureaucrats <em>à la</em> François Hollande or Angela Merkel.</p> <p><strong>Third, the Empire has given its total support to semi-demonic creatures ranging from al-Khattab to Nadezhda Savchenko. </strong>The West&rsquo;s policy is crystal clear and simple to the extreme: if it is anti-Russian we back it. This policy is best exemplified with a Putin and Russia demonization campaign which is, in my opinion, far worse and much more hysterical than anything during the Cold War.</p> <p><strong>Fourth, the West has made a number of highly disturbing military moves including the deployment of the first elements of an anti-missile system in Eastern Europe,</strong> the dispatching of various forms of rapid reaction forces, the deployment of a few armored units, etc. NATO now has forward deployed command posts which can be used to support the engagement of a rapid reaction force.</p> <p><u><em><strong>What does all this add up to?</strong></em></u></p> <p>Right now, nothing much, really. Yes, the NATO move right up to the Russian borders is highly provocative, but primarily in political terms. In purely military terms, not only is this a very bad idea (see cliché #6 <a href="http://thesaker.is/debunking-popular-cliches-about-modern-warfare/" target="_blank">here</a>), but the size of the actual forces deployed is, in reality, tiny: the ABM system currently deployed can, at best, hope to intercept a few missiles (10-20 depending on your assumptions) as for the conventional forces they are of the battalion size (more or less 600 soldiers plus support). So right now there is categorically no real military threat to Russia.</p> <p><u><em><strong>So why are the Russians so clearly upset?</strong></em></u></p> <p>Because the current US/NATO moves might well be just the first steps of a much larger effort which, given enough time, might begin presenting a very real danger for Russia.</p> <p>Furthermore, the kind of rhetoric coming out of the West now is not only militaristic and russophobic, it is often outright messianic. The last time around the West had a flare up of its 1000 year old chronic &ldquo;messianic syndrome&rdquo; condition Russia lost 20 (to 30) million people. So the Russians can be forgiven if they are paying a great deal of attention to what the AngloZionist propaganda actually says about them.</p> <p>The Russians are most dismayed at the re-colonization of western Europe. Long gone are the days when people like Charles de Gaulle, Helmut Schmidt or François Mitterrand, were in charge of Europe&rsquo;s future. For all their very real faults, these men were at least real patriots and not just US colonial administrators. The &lsquo;loss&rsquo; of Western Europe is far more concerning for the Russians than the fact that ex-Soviet colonies in Eastern Europe are now under US colonial administration. Why?</p> <p><strong>Look at this from the Russian point of view.</strong></p> <p>The Russians all see that the US power is on the decline and that the dollar will, sooner or later, gradually or suddenly, lose its role as the main reserve and exchange currency on the planet (this process has already begun). Simply put &ndash; unless the US finds a way to dramatically change the current international dynamic the AngloZionist Empire will collapse. The Russians believe that what the Americans are doing is, at best, to use tensions with Russia to revive a dormant Cold War v2 and, at worst, to actually start a real shooting war in Europe.</p> <p>So a declining Empire with a vital need for a major crisis, a spineless Western Europe unable to stand up for its own interest, a subservient Eastern Europe just begging to turn into a massive battlefield between East and West, and a messianic, rabidly russophobic rhetoric as the background for an increase in military deployments on the Russian border. Is anybody really surprised that the Russians are taking all this very, very serious even if right now the military threat is basically non-existent?</p> <h2><u><strong>The Russian reaction</strong></u></h2> <p>So let us now examine the Russian reaction to Empire&rsquo;s stance.</p> <p><strong>First, the Russians want to make darn sure that the Americans do not give in to the illusion that a full-scale war in Europe would be like WWII which saw the US homeland only suffer a few, tiny, almost symbolic, attacks by the enemy. </strong>Since a full scale war in Europe would threaten the very existence of the Russian state and nation, the Russians are now taking measures to make darn sure that, should that happen, the US would pay an immense price for such an attack.</p> <p><strong>Second, the Russians are now evidently assuming that a conventional threat from the West might materialize in the foreseeable future. </strong>They are therefore taking the measures needed to counter that conventional threat.</p> <p><strong>Third, since the USA appears to be dead set into deploying an anti-ballistic missile system not only in Europe, but also in the Far East, the Russians are taking the measures to both defeat and bypass this system.</strong></p> <p>The Russian effort is a vast and a complex one, and it covers almost every aspect of Russian force planing, but there are four examples which, I think, best illustrate the Russian determination not to allow a 22 June 1941 to happen again:</p> <ul> <li>The re-creation of the First Guards Tank Army (in progress)</li> <li>The deployment of the Iskander-M operational-tactical missile system (done)</li> <li>The deployment of the Sarmat ICBM (in progress)</li> <li>The deployment of the Status-6 strategic torpedo (in progress)</li> </ul> <h2><em><u><strong>The re-creation of the First Guards Tank Army</strong></u></em></h2> <p><strong>It is hard to believe, but the fact is that between 1991 and 2016 Russia did not have a single large formation (division size and bigger) in its Western Military District.</strong> A few brigades, regiments and battalions which nominally were called an &ldquo;Army&rdquo;. To put it simply &ndash; Russia clearly did not believe that there was a conventional military threat from the West and therefore she did not even bother deploying any kind of meaningful military force to defend from such a non-existing threat. By the way, that fact should also tell you everything you need to know about Russian plans to invade the Ukraine, Poland or the Baltics: this is utter nonsense. This has now dramatically changed.</p> <p>Russia has officially announced that the First Guards Tank Army (a formation with a <a href="https://en.wikipedia.org/wiki/1st_Guards_Tank_Army_%28Soviet_Union%29" target="_blank">prestigious and very symbolic history</a>). This Guards Tank Army will now include the 4th &ldquo;<em>Kantemirov</em>&rdquo; Guards Tank Division, the 2nd &ldquo;<em>Taman</em>&rdquo; Guards Motorized Rifle Division, the 6th Tank Brigade, the 27th Guards Motor Rifle Brigade Sevastopol and many support units. This Army&rsquo;s HQ will be located in the Odinstovo suburb of Moscow. Currently the Army is equipped with T-72B3 and T-80 main battle tanks, but they will be replaced by the brand new and revolutionary <a href="http://taskandpurpose.com/why-russias-new-tanks-are-a-wake-up-call-for-the-us/" target="_blank">T-14 Armata tank</a> while the current infantry fighting vehicles and armored personnel carriers will be replaced by the new <a href="https://en.wikipedia.org/wiki/Bumerang" target="_blank">APC</a> and <a href="https://en.wikipedia.org/wiki/Kurganets-25" target="_blank">IFV</a>. In the air, these armored units will be protected and supported by Mi-28 and Ka-52 attack helicopters. Make no mistake, this will be a very large force, exactly the kind of force needed so smash through an attacking enemy forces (by the way, the 1TGA was present at the Kursk battle). I am pretty sure that by the time the 1TGA is fully organized it will become the most powerful armored formation anywhere between the Atlantic and the Urals (especially in qualitative terms). If the current tensions continue or even worsen, the Russians could even augment the 1TGA to a type of 21<sup>st</sup> century &ldquo;Shock Army&rdquo; with increased mobility and specializing in breaking deep into the enemy&rsquo;s defenses.</p> <h2><em><u><strong>The deployment of the Iskander-M operational-tactical missile system</strong></u></em></h2> <p>The new Iskander-M operational tactical missile system is a formidable weapon by any standard. While technically it is a short-range tactical missile (under 1000km range, the Iskander-M has an official range of 500km), it can also fire the R-500 missile has the capability of striking at an intermediate/operational range (over 1000km, the R-500 has a range of 2000km). It is extremely accurate, it has advanced anti-ABM capabilities, it flies at hypersonic speeds and is practically undetectable on the ground (see <a href="https://en.wikipedia.org/wiki/9K720_Iskander" target="_blank">here</a> for more details). This will be the missile tasked with destroying all the units and equipment the US and NATO have forward-deployed in Eastern Europe and, if needed, clear the way for the 1TGA.</p> <h2><em><u><strong>The deployment of the Sarmat ICBM</strong></u></em></h2> <p>Neither the 1TGA nor the Iskander-M missile will threaten the US homeland in any way. Russia thus needed some kind of weapon which would truly strike fear into the Pentagon and White House in the way the famous RS-36 Voevoda (aka SS-18 &ldquo;Satan&rdquo; in US classification) did during the Cold War. The SS-18, the most powerful ICBM ever developed, was scary enough. The RS-28 &ldquo;Sarmat&rdquo; (<a href="https://en.wikipedia.org/wiki/RS-28_Sarmat" target="_blank">SS-X-30</a> by NATO classification) brings the terror to a totally new level.</p> <p>The Sarmat is nothing short of amazing. It will be capable of carrying 10-15 <a href="https://en.wikipedia.org/wiki/Multiple_independently_targetable_reentry_vehicle" target="_blank">MIRVed</a> warheads which will be delivered in a so-called &ldquo;depressed&rdquo; (suborbital) trajectory and which will remain maneuverable at hypersonic speeds. The missile will not have to use the typical trajectory over the North Pole but will be capable of reaching any target anywhere on the planet from any trajectory. All these elements combined will make the Sarmat itself and its warheads completely impossible to intercept.</p> <p>The Sarmat will also be capable of delivering conventional Iu-71 hypersonic warheads capable of a &ldquo;kinetic strike&rdquo; which could be used to strike a fortified enemy target in a non-nuclear conflict. This will be made possible by the amazing accuracy of the Sarmat&rsquo;s warheads which, courtesy of a recent Russian leak, we now know have a CEP of 10 meters (see screen capture)</p> <p><a class="rempad" href="http://thesaker.is/wp-content/uploads/2016/05/Sarmat-MIRV-CEP.jpg" target="_blank"><img alt="Sarmat MIRV CEP" class="alignright wp-image-22696 size-medium" src="http://thesaker.is/wp-content/uploads/2016/05/Sarmat-MIRV-CEP-300x99.jpg" style="width: 500px; height: 165px;" /></a></p> <p>The Sarmat&rsquo;s silos will be protected by a unique &ldquo;active protection measures&rdquo; which will include 100 guns capable of firing a &ldquo;metallic cloud&rdquo; of forty thousand 30mm &ldquo;bullets&rdquo; to an altitude of up to 6km. The Russians are also planning to protect the Sarmat with their new S-500 air defense systems. Finally, the Sarmat&rsquo;s preparation to start time will be under 60 seconds thanks a a highly automated launch system. What this all means is that the Sarmat missile will be invulnerable in its silo, during it&rsquo;s flight and on re-entry in the lower parts of the atmosphere.</p> <p>It is interesting to note that while the USA has made a great deal of noise around its planned <a href="https://en.wikipedia.org/wiki/Prompt_Global_Strike" target="_blank">Prompt Global Strike</a> system, the Russians have already begun deploying their own version of this concept.</p> <h2><em><u><strong>The deployment of the Status-6 strategic torpedo</strong></u></em></h2> <p>Do you remember the carefully staged &ldquo;leak&rdquo; in November of last year when <a href="http://thesaker.is/did-russia-just-gently-threaten-the-usa/" target="_blank">the Russians &lsquo;inadvertently&rsquo; showed a super dooper secret strategic torpedo on prime time news</a>? Here is this (in)famous slide:</p> <p><a class="rempad" href="http://thesaker.is/wp-content/uploads/2016/05/Status6-2015.jpg" target="_blank"><img alt="Status6-2015" class="aligncenter wp-image-22697" src="http://thesaker.is/wp-content/uploads/2016/05/Status6-2015.jpg" style="width: 500px; height: 353px;" /></a></p> <p>What is shown here is an &ldquo;autonomous underwater vehicle&rdquo; which has advanced navigational capabilities but which can also be remote controlled and steered from a specialized command module. This vehicle can dive as deep as 1000m, at a speed up to 185km/h and it has a range of up to 10&rsquo;000km. It is delivered by specially configured submarines.</p> <p>The Status-6 system can be used to target aircraft carrier battle groups, US navy bases (especially SSBN bases) and, in its most frighting configuration, it can be used to deliver <a href="https://en.wikipedia.org/wiki/Cobalt_bomb" target="_blank">high-radioactivity cobalt bombs</a> capable of laying waste to huge expanses of land. The Status-6 delivery system would be a new version of the T-15 torpedo which would be 24m long, 1,5m wide weigh 40 tons and capable of delivering a <strong>100 megaton warhead</strong> which would make it twice as powerful as the most powerful nuclear device ever detonated, the Soviet <a href="https://en.wikipedia.org/wiki/Tsar_Bomba" target="_blank">Czar-bomb</a> (57 megatons). Hiroshima was only 15 kilotons.</p> <p><strong>Keep in mind that most of the USA&rsquo;s cities and industrial centers are all along the coastline which makes them extremely vulnerable to torpedo based attacks</strong> (be it Sakharov&rsquo;s proposed &ldquo;<a href="https://www.facebook.com/john.bengtson.9/posts/10202519228606552" target="_blank">Tsunami bomb</a>&rdquo; or the Status-6 system). And, just as in the case of the Iskander-M or the Sarmat ICBM, the depth and speed of the Status-6 torpedo would make it basically invulnerable to incerception.</p> <p>*&nbsp; *&nbsp; *</p> <h2><u><strong>Evaluation:</strong></u></h2> <p>There is really nothing new in all of the above, and US military commanders have always known that. <strong>All the US anti-ballistic missile systems have always been primarily a financial scam, from Reagan&rsquo;s &ldquo;Star Wars&rdquo; to Obama&rsquo;s &ldquo;anti-Iranian ABM&rdquo;</strong>. For one thing, any ABM system is susceptible to &lsquo;local saturation&#39;: if you have X number ABM missile protecting a Y long space against an X number of missiles, all that you need to do is to saturate only one sector of the Y space with *a lot* of real and fake missiles by firing them all together through one small sector of the Y space the ABM missile system is protecting. And there are plenty of other measures the Russians could take. They could put just one single SLBM capable submarine in Lake Baikal making it basically invulnerable. There is already some discussion of that idea in Russia. Another very good option would be to re-activate the Soviet <a href="https://en.wikipedia.org/wiki/RT-23_Molodets" target="_blank">BzhRK rail-mobile ICBM</a>. Good luck finding them in the immense Russian train network. In fact, the Russians have plenty of cheap and effective measure. Want me to list one more?</p> <p>Sure!</p> <p>Take the <a href="https://en.wikipedia.org/wiki/3M-54_Klub" target="_blank">Kalibr cruise-missile</a> recently seen in the war in Syria. <strong>Did you know that it can be shot from a typical commerical container, like the ones you will find on trucks, trains or ships? </strong>Check out this excellent video which explains this:</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/mbUU_9bOcnM" width="560"></iframe></p> <p><strong>Just remember that the Kalibr has a range of anywhere between 50km to 4000km and that it can carry a nuclear warhead.</strong> How hard would it be for Russia to deploy these cruise missiles right off the US coast in regular container ships? Or just keep a few containers in Cuba or Venezuela? This is a system which is so undetectable that the Russians could deploy it off the coast of Australia to hit the NSA station in Alice Springs if they wanted, an nobody would even see it coming.</p> <p><u><strong>The reality is that the notion that the US could trigger a war against Russia (or China for that matter) and not suffer the consequences on the US mainland is absolutely ridiculous. </strong></u>And yet, when I hear all the crazy talk by western politicians and generals I get the impression that they are forgetting about this undeniable fact. Frankly, even the current threats against Russia have a &lsquo;half-backed&rsquo; feel to them: a battalion here, another one there, a few missiles here, a few more there. It is like the rulers of the Empire don&rsquo;t realize that it is a very, very bad idea to constantly poke a bear when all you are carrying with you is a pocket-knife. Sometimes the reaction of western politicians remind me of the thugs who try to rob a gas station with a plastic or empty gun and who are absolutely stunned with they get gunned down by the owner or the cops. This kind of thuggery is nothing more than a form of &ldquo;suicide by cop&rdquo; which never ends well for the one trying to get away with it.</p> <p>So sometimes things have to be said directly and unambiguously: western politicians better not believe in their own imperial hubris. So far, all their threats have achieved is that the Russians have responded with a many but futile verbal protests and a <strong>full-scale program to prepare Russia for WWIII</strong>.</p> <p>As I have written many times, <strong>Russians are very afraid of war and they will go out of their way to avoid it. </strong>But they are also ready for war. This is a uniquely Russian cultural feature which the West has misread an innumerable number of time over the past 1000 years or so. Over and over again have the Europeans attacked Russia only to find themselves into a fight they would never have imagined, even in their worst nightmares. This is why the Russians like to say that &ldquo;Russia never starts wars, she only ends them&rdquo;.</p> <p><u><em><strong>There is a profound cultural chasm between how the West views warfare and how the Russians do.</strong></em></u> In the West, warfare is, really, &ldquo;the continuation of politics by other means&rdquo;. For Russians, it is a ruthless struggle for survival. Just look at generals in the West: they are polished and well mannered managers much more similar to corporate executives than with, say, Mafia bosses. Take a look at Russian generals (for example, watch the Victory Day parade in Moscow). In comparison to their western colleagues they look almost brutish, because first and foremost they are ruthless and calculating killers. I don&rsquo;t mean that in a negative way &ndash; they often are individually very honorable and even kind men, and like every good commander, they care for their men and love their country. But the business they are in in not the continuation of politics by other means, the business they are in is survival. At all cost.</p> <p><strong>You cannot judge a military or, for that matter, a nation, by how it behaves when it triumphs, when it is on the offensive pursing a defeated enemy. All armies look good when they are winning. You can really judge of the nature of a military, or a nation, at its darkest hour, when things are horrible and the situation worse than catastrophic. </strong>That was the case in 1995 when the Eltsin regime ordered a totally unprepared, demoralized, poorly trained, poorly fed, poorly equipped and completely disorganized Russian military (well, a few hastily assembled units) to take Grozny from the Chechens. It was hell on earth. Here is some footage of General Lev Rokhlin in a hastily organized command post in a basement inside Grozy. He is as exhausted, dirty and exposed as any of his soldiers. Just look at his face and look at the faces of the men around him. This is what the Russian army looks like when it is in the depth of hell, betrayed by the traitors sitting in the Kremlin and abandoned by most if the Russian people (who, I am sorry to remind here, mostly were only were dreaming of McDonalds and Michael Jackson in 1995).</p> <p><iframe allowfullscreen="" frameborder="0" height="360" src="https://www.youtube.com/embed/4KpUlDu5tYk" width="480"></iframe></p> <p>Can you imagine, say, General Wesley Clark or David Petraeus fighting like these men did?</p> <p>Check out this video of General Shamanov reading the riot act to a local Chechen politician (no translation need):</p> <p><iframe allowfullscreen="" frameborder="0" height="360" src="https://www.youtube.com/embed/rZ8Xd9ZPoGI" width="480"></iframe></p> <p>Shamanov nowadays is the Commander in Chief of the Airborne Forces (see photo) whose size Putin quietly <strong>doubled</strong> <a href="http://www.examiner.com/article/russia-to-double-size-of-airborne-forces-over-the-next-7-years" target="_blank">to 72&rsquo;000</a>, something I mentioned in the past as highly relevant, especially in comparison with the rather tepid force level increases announced by NATO (see &ldquo;<a href="http://thesaker.is/the-eus-suicide-by-reality-denial/" target="_blank">EU suidice by reality denial</a>&rdquo;). To get a feel for what modern Russian airborne forces are like, check out <a href="http://thesaker.is/a-look-into-the-modern-russian-airborne-forces/" target="_blank">this</a> article.</p> <p><a class="rempad" href="http://thesaker.is/wp-content/uploads/2016/05/Vladimir_Shamanov._Cabinet_photo.jpg" target="_blank"><img alt="Vladimir_Shamanov._Cabinet_photo" class="alignright wp-image-22698 size-medium" height="300" src="http://thesaker.is/wp-content/uploads/2016/05/Vladimir_Shamanov._Cabinet_photo-200x300.jpg" width="200" /></a></p> <p><u><strong>It is not my intention here to glorify nuclear war or the Russian Armed Forces.</strong></u> The reason for this, and many other, articles is to try to raise the alarm about what I see is happening nowadays. Western leaders are drunk on their own imperial hubris, nations which in the past were considered as minor stains on a map now feel emboldened to constantly provoke a nuclear superpower, Americans are being lied to and promised that some magical high tech will protect them from war while the Russians are seriously gearing up for WWIII because they have come to the conclusion that the only way to prevent that war is to make absolutely and unequivocally clear to the AngloZionists that they will <a href="http://www.businessinsider.com/a-spherical-bunker-in-russia-was-the-most-secure-place-in-the-entire-cold-war-2015-3" target="_blank">never survive a war with Russia, even if every single Russian is killed</a>.</p> <p><em><strong>I remember the Cold War well. I was part of it. And I remember that the vast majority of us, on both sides, realized that a war between Russia and the West must be avoided at all costs. Now I am horrified when I read articles by senior officials seriously discussing such a possibility.</strong></em></p> <p>Just read this article, please: <a href="https://www.quora.com/What-would-a-war-between-the-EU-and-Russia-look-like/answer/Sorin-Adam-Matei-1" target="_blank">What would a war between the EU and Russia look like</a>? Here is what this guy writes:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>To the poetically inclined, the Russian military looks more like a gigantic pirate crew, than a regular army. The ones who rule are the ones with the sharpest cutlass and biggest mouth, typically some scurvy infested mateis who rely on the support of their mates to make any unpopular &ldquo;officer&rdquo; walk the plank&hellip; Or, more apt, they resemble the members of the cossack horde, run by the brashier warriors&hellip; While these troops can be very brave, at times, they are not effective in the field against a well regulated and trained modern military machine. Given this, it is improbably, ney, impossible for ordinary Russian troops to conduct operations of major consequence at more than platoon level against any disciplined armies, especially the US, British, German, or French.</em></p> </blockquote> <div class="wp-caption aligncenter" id="attachment_22700" style="width: 557px;"><a class="rempad" href="http://thesaker.is/wp-content/uploads/2016/05/The-dream-of-the-West.jpg" target="_blank"><img alt="The dream of the West" class="wp-image-22700 size-full" height="334" src="http://thesaker.is/wp-content/uploads/2016/05/The-dream-of-the-West.jpg" width="547" /></a><br /> <p class="wp-caption-text">&ldquo;For our zoo&rdquo; (old Western dream)</p> </div> <p><strong>This kind of writing really scares me. </strong>Not because of the imbecilic and racist stupidity of it, but because it largely goes unchallenged in the mainstream media. Not only that, there are plenty such articles written elsewhere (see <a href="http://nationalinterest.org/blog/the-buzz/not-so-scary-why-russias-military-paper-tiger-14136" target="_blank">here</a>, <a href="http://www.thefiscaltimes.com/Articles/2014/04/30/Russia-s-Military-Bear-Paper-Tiger" target="_blank">here</a> or <a href="http://imrussia.org/en/analysis/world/2389-russias-military-is-a-paper-tiger-in-the-baltic" target="_blank">here</a>). Of course, the <strong>authors of that kind of &ldquo;analyses&rdquo; make their money precisely the kind of manic cheer-leading for the western forces, but that is exactly the mindset which got Napoleon and Hitler in trouble and which ended with Russian forces stationed in Paris and Berlin</strong>. Compare that kind of jingoistic and, frankly, irresponsible nonsense with what a real military commander, Montgomery, had to say on this topic:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>The next war on land will be very different from the last one, in that we shall have to fight it in a different way. In reaching a decision on that matter, we must first be clear about certain rules of war. Rule 1, on page I of the book of war, is: &ldquo;Do not march on Moscow&rdquo;. Various people have tried it, Napoleon and Hitler, and it is no good. That is the first rule.</em></p> </blockquote> <p><u><strong>So who do you trust? </strong></u>Professional cheerleaders or professional soldiers? Do you really believe that Obama (or Hillary), Merkel and Hollande will do better than Napoleon or Hitler?</p> <p><strong>If the AngloZionist &lsquo;deep state&rsquo; is really delusional enough to trigger a war with Russia, in Europe or elsewhere, the narcissistic and hedonistic West, drunk on its own propaganda and hubris, will discover a level of violence and warfare it cannot even imagine and if that only affected those responsible for these reckless and suicidal policies it would be great.</strong> But the problem is, of course, that many millions of us, simple, regular people, will suffer and die as a consequence of our collective failure to prevent that outcome. I hope and pray that my repeated warnings will at least contribute to what I hope is a growing realization that this folly has to be immediately stopped and that sanity must return to politics.</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="261" height="132" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160528_ww3.jpg?1464464700" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/how-russia-preparing-wwiii#comments Australia China Eastern Europe ETC McDonalds Michael Jackson Napoleon Poland Reality Ukraine White House Sun, 29 May 2016 02:00:00 +0000 Tyler Durden 562193 at http://www.zerohedge.com How The Senate Just Took "A Hatchet To American Liberty" http://www.zerohedge.com/news/2016-05-28/how-senate-just-took-hatchet-american-liberty <p>Last Tuesday the Senate Intelligence Committee approved the annual Intelligence Authorization Act for 2017, which is now set to be considered by the full Senate.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/28/20160528_fbi.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/28/20160528_fbi_0.JPG" width="600" height="337" /></a></p> <p>The bill is <a href="http://intelligence.house.gov/fy16-iaa">used to</a> authorize funding for the intelligence community, sets policy and authorizes resources for intelligence purposes. We bring this up because the only committee member to vote against the bill was Senator Ron Wyden (D-Ore), who later released a statement on why he did not vote for the bill - notably, <strong>that the FBI would be allowed to obtain Americans' email using only a national security letter, meaning it will now be able to access email without a court order</strong>. </p> <p>While the intrusion of civil liberties is something that everyone lets the government get away with in today's society (as long as there are ample episodes of Keeping Up With the Kardashians on to keep people's mind occupied), it's nice to see that at least somebody is paying attention, let alone cares enough to warn the public about what is taking place.</p> <p>Here is the <a href="https://www.wyden.senate.gov/news/press-releases/wyden-opposes-2017-intelligence-authorization-act-that-expands-government-surveillance-and-undermines-independent-oversight-board">full statement</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Tuesday, May 24, 2016</em></p> <p>&nbsp;</p> <p><em>Washington, D.C. –Sen. Ron Wyden, D-Ore., today voted against the 2017 Intelligence Authorization Act in the Senate Select Committee on Intelligence. The bill includes provisions to expand warrantless government surveillance and takes aim at a valuable independent oversight board.</em></p> <p>&nbsp;</p> <p><em>“<strong>This bill takes a hatchet to important protections for Americans’ liberty,</strong>” Wyden said following the vote. “<strong>This bill would mean more government surveillance of Americans, less due process and less independent oversight of U.S. intelligence agencies</strong>. Worse, neither the intelligence agencies, nor the bill’s sponsors have shown any evidence that these changes would do anything to make Americans more secure. I plan to work with colleagues in both chambers to reverse these dangerous provisions.”</em></p> <p>&nbsp;</p> <p><em>Wyden opposes multiple provisions to the bill, including;</em></p> <p>&nbsp;</p> <p><em>-<strong>Allowing the FBI to obtain Americans’ email records with only a National Security Letter</strong>. Currently, the FBI can obtain email records in national security investigations with an order from the FISA Court. <span style="text-decoration: underline;">The bill would allow any FBI field office to demand email records without a court order</span>, a major expansion of federal surveillance powers. The FBI can currently obtain phone records with a National Security Letter, but not email records.</em></p> <p>&nbsp;</p> <p><em>-Narrowing the jurisdiction of the Privacy and Civil Liberties Oversight Board (PCLOB), for the second consecutive year. The bill would limit the PCLOB to examining only programs that impact the privacy rights of U.S. citizens.&nbsp; Wyden has supported the PCLOB’s focus on the rights of US persons.&nbsp; Wyden opposed this provision, however, since global telecommunications networks can make it difficult to determine who is an American citizen, and this provision could discourage oversight of programs when the impact on Americans’ rights is unclear. Furthermore, continually restricting a small, independent oversight board sends the message that the board shouldn’t do its job too well.</em></p> <p>&nbsp;</p> <p><em>The bill does include one proposal from Wyden, which would allow the PCLOB to hire staff even when the board’s Chair is vacant. Currently the PCLOB is prohibited from hiring staff unless a Senate-confirmed Chair is in place.&nbsp; This proposal is also included in separate bipartisan legislation introduced by Wyden and Representative Tulsi Gabbard, D-Hawaii.&nbsp; PCLOB Chairman David Medine is scheduled to step down on July 1.</em></p> </blockquote> <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="921" height="517" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/20160528_fbi.JPG?1464474691" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/how-senate-just-took-hatchet-american-liberty#comments FBI national security Washington D.C. Sun, 29 May 2016 01:17:36 +0000 Tyler Durden 562201 at http://www.zerohedge.com Everyone Is Missing The Most Troubling Part About Hillary's Email Audit! http://www.zerohedge.com/news/2016-05-28/everyone-missing-most-troubling-part-about-hillarys-email-audit <p><a href="http://lawnewz.com/high-profile/everyone-is-missing-the-most-troubling-part-of-hillary-clinton-email-audit/"><em>Submitted by Rachel Stockman via LawNewz.com,</em></a></p> <p>Here is the bottom line about the <a href="http://lawnewz.com/high-profile/breaking-state-dept-audit-blames-clinton-for-email-management/">U.S. Department of State&rsquo;s Office of Inspector General&rsquo;s Report</a> regarding the use of email by the Secretary of State&rsquo;s Office: <u><em><strong>It does not look good for Hillary. Not just in the political sense, but in the legal sense as well. </strong></em></u>&nbsp;The pundits&nbsp;seem concerned that Clinton&nbsp;refused to be interviewed by OIG investigators. Sure it&rsquo;s troubling, but she&rsquo;s&nbsp;involved in a FBI investigation, and her attorneys likely advised her not to talk. That&rsquo;s not the issue.</p> <p>In addition, conservatives have said&nbsp;over and over again&nbsp;that&nbsp;the difference between Clinton&rsquo;s email usage&nbsp;and that of former Secretary of State Colin Powell is that she had a <em>private</em> server. But again, the pundits&nbsp;are missing the point. The fact that she kept a server made it worse, but both Clinton and Powell clearly violated federal record keeping rules&nbsp;by not turning over&nbsp;copies of their emails when they left office.</p> <p><em>&ldquo;Secretary Clinton should have surrendered all emails dealing with Department business before leaving government service, and because she did not do so, she did not comply with the Department&rsquo;s policies that were implemented in accordance with the Federal Records Act,</em>&rdquo; the audit&nbsp;report said. <u><strong>Bottom line: Mrs. Clinton violated the Federal Records Act.</strong></u></p> <p class="qualified qualified-1">However, what&nbsp;is probably the most troubling about&nbsp;all of this&nbsp;is that, <u><strong>despite these&nbsp;blatant violations, <em>there will be absolutely no legal repercussions for Mrs. Clinton for this offense</em>.</strong></u> She&rsquo;s off the hook! <strong><em>Why aren&rsquo;t all the pundits&nbsp;screaming about that?</em></strong></p> <p>As&nbsp;<em>LawNewz.com</em>&lsquo;s&nbsp;contributor, <strong>Dan Metcalfe</strong>,&nbsp;<a href="http://lawnewz.com/politics/hillary-clinton-absolutely-violated-the-federal-records-act-heres-why-she-cant-be-punished/">wrote about several weeks ago</a>,<strong>&nbsp;anyone who violates this law (and leaves office) will&nbsp;face zero&nbsp;consequences. That&rsquo;s because it is a civil law, not a criminal law, and penalties only apply to&nbsp;current federal employees. Employees, like Clinton and Powell, who leave&nbsp;office, can skirt punishment. </strong>&nbsp;The Federal Records Act is in place not only to provide the American public with some level&nbsp;of transparency but also <a href="http://www.archives.gov/about/laws/fed-agencies.html">&ldquo;to protect the legal and financial rights of the Government and of persons directly affected by the agency&rsquo;s activities.</a>&rdquo;</p> <p><strong>&ldquo;There&nbsp;are absolutely no penalties provided by law for this misconduct,&rdquo;</strong> Metcalfe&nbsp;said. He&nbsp;would know, Metcalfe&nbsp;was the founding director of the Justice Department&rsquo;s Office of Information and Privacy. He was essentially&nbsp;<em>&nbsp;&ldquo;the federal&nbsp;government&rsquo;s chief information-disclosure &lsquo;guru.&rsquo;&rdquo;&nbsp;</em></p> <p>&ldquo;This report unsurprisingly finds gross violations of the Federal Record Act&rsquo;s requirements by then-Secretary Clinton and her personal staff, not to mention inexplicably poor oversight by State&rsquo;s top records-management officials as they simply let her do as she pleased,&rdquo; Metcalfe told&nbsp;<em>LawNewz.com</em>, &nbsp;<em><strong>&ldquo;Even taking a charitable view, it serves as an indictment of Ms. Clinton&rsquo;s conduct on the civil side of her ledger, documenting misconduct that would surely lead to dismissal were she still employed there.&rdquo;</strong></em></p> <p class="qualified qualified-2">As Metcalfe pointed out, <u><strong>The Federal Records Act, if violated in this way, does allow action to be taken against a government employee&ndash; but only administrative action.</strong></u> Both Clinton and Powell are not in office, so they&nbsp;can&rsquo;t be punished. As for the Freedom of Information Act, there are sanctions provided under (a)(4)(F)(1), but again,&nbsp;those penalties&nbsp;only apply to someone who is still working for the federal government. While there are&nbsp;consequences&nbsp;if you are<a href="http://www.archives.gov/about/laws/fed-agencies.html"> found to have intentionally destroyed federal records</a>, the audit did not make a finding that this happened.</p> <p>In response to the audit, House Speaker <strong>Paul Ryan</strong>, R-Wis., <a href="http://www.foxnews.com/politics/2016/05/25/republicans-seize-on-state-department-audit-to-challenge-clintons-repeated-claims-on-emails.html">said in a statement</a>:&nbsp;<em><strong>&ldquo;Think about this, the highest ranking diplomat in the United States &ndash; the Secretary of State &ndash; deliberately broke agency policy to serve her own interests.&rdquo;</strong></em></p> <p><strong>Clinton&rsquo;s spokesperson, of course, downplayed the report</strong> saying, &ldquo;the Inspector General documents just how consistent her email practices were with those of other Secretaries and senior officials at the State Department who also used personal email.&rdquo;</p> <p>So maybe that&rsquo;s true, yes, even Colin Powell violated the rules, but<strong> the real problem that neither Ryan nor Clinton will address is that there is nothing to prevent this&nbsp;from happening again!</strong></p> <p>This law was&nbsp;put in place to ensure we have a proper record of how our politicians are handling the most important matters that concern every citizen, and, maybe more importantly, to promote&nbsp;transparency. &nbsp;<u><em><strong>Ryan is quick to condemn what she did as &ldquo;deliberately&rdquo; breaking the rules. But, if it&rsquo;s so bad, why aren&rsquo;t politicians like Ryan pushing for sanctions&nbsp;that would hold her (and other politicians) accountable even after they leave office?</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="235" height="131" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160528_hillary.jpg?1464463760" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/everyone-missing-most-troubling-part-about-hillarys-email-audit#comments FBI Freedom of Information Act Transparency Sun, 29 May 2016 00:40:00 +0000 Tyler Durden 562192 at http://www.zerohedge.com Edward Snowden Demonstrates How To "Go Black" http://www.zerohedge.com/news/2016-05-28/edward-snowden-demonstrates-how-go-black <p>When NSA whistleblower Edward Snowden first exposed the world to<strong> just how easily the government could compromise their technology and spy on them</strong>, many immediately sought ways to secure their data and protect their gadgets. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/28/20160528_snowden.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/28/20160528_snowden.jpg" width="490" height="268" /></a></p> <p>But, <a href="http://www.wired.com/2016/05/snowden-vice-cell-phone-hack/?mbid=social_twitter">as Wired.com reports,</a> <strong>Snowden is here to help. "'Going Black' is a pretty big ask,"</strong> he tells VICE's Shane Smith, but not impossible, as Snowden shows <strong>how to "make sure your phone works for you... instead of working for someone else."</strong></p> <p><iframe src="https://www.youtube.com/embed/S4LOyi3EMWU" width="560" height="315" frameborder="0"></iframe></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="490" height="268" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160528_snowden.jpg?1464462909" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/edward-snowden-demonstrates-how-go-black#comments SPY Sun, 29 May 2016 00:00:00 +0000 Tyler Durden 562189 at http://www.zerohedge.com Four Lost Decades: The Bumbling Incompetence Of The Power Elite http://www.zerohedge.com/news/2016-05-28/four-lost-decades-bumbling-incompetence-power-elite <p><em><a href="http://bonnerandpartners.com/who-is-to-blame-for-trump-and-sanders/">Authored by Bill Bonner of Bonner &amp; Partners</a> (<a href="http://www.acting-man.com/?p=45072">annotated by Acting-Man&#39;s Pater Tenebrarum</a>),</em></p> <h3><span style="text-decoration: underline;"><strong>Geniuses in Charge</strong></span></h3> <p>Is there any smarter group of <em>homo sapiens</em> on the planet? Or in all of history? We&rsquo;re talking about Fed economists, of course.</p> <p style="text-align: center;"><em><img alt="danger_-_genius_at_work_0-png" class="aligncenter size-full wp-image-45074" src="http://www.acting-man.com/blog/media/2016/05/danger_-_genius_at_work_0-png.jpg" style="width: 601px; height: 387px;" /></em></p> <p style="text-align: center;">Not only did they avoid another Great Depression by bold absurdity&hellip;giving the economy more of the one thing of which it clearly had too much &ndash; debt. They also carefully monitored the economy&rsquo;s progress so as to avoid any backsliding into normalcy.</p> <p><span id="more-45072">&nbsp;</span></p> <p>And where do we get this penetrating appraisal? From the Fed economists themselves, of course. Bloomberg:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;The U.S. Federal Reserve&rsquo;s decisions to delay interest-rate hikes helped cushion the economic shocks caused by rapidly rising borrowing costs for U.S. companies from late last year through early 2016, according to economists at the New York Fed.</em></p> <p>&nbsp;</p> <p><em>&ldquo;By maintaining the federal funds rate lower, the FOMC managed to substantially offset the effect of tightening financial conditions on the economy,&rdquo;&nbsp;the authors, referring to the rate-setting Federal Open Market Committee, wrote in a blog post on the bank&rsquo;s website on Wednesday.&rdquo;</em></p> </blockquote> <p>They&rsquo;re geniuses. No doubt about it. That&rsquo;s why they&rsquo;re in charge and we&rsquo;re not. They&rsquo;re the elite. They run the Deep State. They may not pay the piper, but they call the tune anyway. And good on them! Who knows what prices we might discover if we were left on our own?</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Debt, debt, GDP and FF rate" class="aligncenter wp-image-45075" src="http://www.acting-man.com/blog/media/2016/05/Debt-debt-GDP-and-FF-rate-1024x673.png" style="width: 599px; height: 394px;" /></p> <p style="text-align: center;">The gap between economic output and the debt accumulated to achieve it continues to widen&hellip;while savers are expropriated and capitalists are given an incentive to consume their capital (the &ldquo;euthanasia of the rentier&rdquo; propagated by Keynes has finally been achieved) &ndash; click to enlarge.</p> <p>&nbsp;</p> <h3><u><strong>Four Lost Decades</strong></u></h3> <p>One of the endearing features of the ruling classes is their abiding faith in their own judgment. Despite inexhaustible evidence that they are bumbling incompetents, the power elite stick to their guns &ndash; literally &ndash; and to their cushy sinecures.</p> <p>We are now seven years into the &ldquo;recovery&rdquo; supposedly engineered by the PhDs at the Fed. At a cost variously estimated between $4 trillion and $10 trillion, we have now achieved a growth rate that is about half what it was 40 years ago &ndash; before the internet and debt-based money allegedly freed the economy from earthly tethers.</p> <p>And thanks to these custodians of the public weal, 99% of the families in the USA now have less wealth than they did before the crisis of &rsquo;08 began. But wait &ndash; it gets worse. It is now 45 years since the PhDs took control of America&rsquo;s money. Over those four and a half decades, how much financial progress do you think the average family has made? Approximately zero.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="planning-2" class="aligncenter wp-image-45076" src="http://www.acting-man.com/blog/media/2016/05/planning-2.jpg" style="width: 599px; height: 428px;" /></p> <p style="text-align: center;">Actually, if they do much more work, &ldquo;failure to make any progress&rdquo; may quickly become the least of our worries&hellip;</p> <p>&nbsp;</p> <p>Yes, the Levy Institute has completed a study. It tells us what we suspected already. Nine out of 10 people in the U.S. have roughly the same real earnings today as they did in the early &rsquo;70s.</p> <p>That makes FOUR LOST DECADES, thanks to the feds, with no advance in the material well-being of the American people (aside from technological marvels) since the new money system came on the scene.</p> <p>&nbsp;</p> <h3><u><strong>Offenses Against Man and God</strong></u></h3> <p>Meanwhile, the security elite, too, has proven it cannot be trusted to protect a convenience store, let alone the nation. Trillions have been spent&hellip; thousands of people have been killed&hellip; offenses against man and God have been committed aplenty (in one case, the Pentagon water-boarded the wrong man 89 times in one month).</p> <p>Perhaps Sanders and Trump are right; maybe it&rsquo;s time to take a fresh look at the power elite and how they are running the country. That is the hope that is stirring the voters. But it&rsquo;s rousing the Deep State to action, too.</p> <p>&ldquo;How to defeat rightwing populism&rdquo; is a headline in the Deep State newspaper of record, the&nbsp;<em>Financial Times</em>, written by Elitist-in-Chief, Martin Wolf. &ldquo;How to protect the <em>status quo</em>&rdquo; is his real challenge.</p> <p>He readily acknowledges the charges against him and other insiders: &ldquo;[T]he greed, incompetence, and irresponsibility of elites.&rdquo; This has &ldquo;brought great populist rage,&rdquo; he admits.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Martin Wolf" class="aligncenter wp-image-45077" height="384" src="http://www.acting-man.com/blog/media/2016/05/wolf.jpg" width="640" /></p> <p style="text-align: center;">Establishment mouthpiece and apologist Martin Wolf, the FT&rsquo;s chief economic quack. A vociferous central planning advocate who presumably would have felt right at home in the command economies of the Soviet Bloc (except for the lack of comforts&hellip;so we guess Western crony socialism is actually the shtick he personally prefers). The man&rsquo;s economic ignorance is only exceeded by his unbecoming and completely unwarranted arrogance.</p> <p>&nbsp;</p> <p>But his prayers are not with the millions of people the power elite has harmed. Instead, his dark hours are tormented by a thought so chilling, so revolting, so unthinkably awful, he cannot sleep. What if, he worries, because of the Deep State&rsquo;s errors&hellip; <em>what if the elite should lose control?</em></p> <p>Horrors! &ldquo;In any country,&rdquo; he writes, &ldquo;embrace of the delusions of populism is disturbing.&rdquo; Yes, especially to the people who caused it!</p> <p>&nbsp;</p> <h3><u><strong>A Symptom of a Disease</strong></u></h3> <p><strong>The elite controlled the money, the wars, the policies, and the programs of the last 40 years. It is they who are responsible for $200 trillion of debt worldwide&hellip;&nbsp; ISIS&hellip; The Bern&hellip; and The Donald.</strong></p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="bernald" class="aligncenter wp-image-45073" height="372" src="http://www.acting-man.com/blog/media/2016/05/bernald.png" width="640" /></p> <p style="text-align: center;">The initial reaction to a failing statist system&hellip;</p> <p>&nbsp;</p> <p><strong>Blame them for ZIRP and NIRP, for $8 trillion worth of income stolen from savers,&nbsp; for the vulgar rich flush with cash, for China&rsquo;s breathtaking growth and its wobbly tower of &nbsp;debt, for Four Lost Decades, and for America&rsquo;s longest (and most unwinnable) war.</strong></p> <p>Mr. Wolf is not concerned about correcting any of these abominations. Instead, he just hopes to manage the problem so the elite stay in control. Trumpism, he claims, &ldquo;<em>is a symptom of a disease. We must now find more effective ways to cure it.</em>&rdquo;</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="668" height="380" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160528_idiots.jpg?1464462248" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/four-lost-decades-bumbling-incompetence-power-elite#comments Borrowing Costs China Federal Reserve Great Depression New York Fed Newspaper recovery Sat, 28 May 2016 23:30:00 +0000 Tyler Durden 562188 at http://www.zerohedge.com Obama Steps In To Defend Hillary: DOJ Fights To Block Clinton Deposition http://www.zerohedge.com/news/2016-05-28/obama-rushes-defend-hillary-email-lawsuit-doj-fights-block-clinton-deposition <p>If there was any doubt, or suspense on which side of the Hillary email scandal the "impartial" Department of Justice stands, the suspense was lifted and all was revealed yesterday when as <a href="http://thehill.com/policy/national-security/281565-feds-fight-to-prevent-clinton-deposition-in-email-case">The Hill reported</a>, the Obama administration stepped into the ongoing Judicial Watch lawsuit and is fighting to prevent former SecState Hillary Clinton from being deposed. </p> <p>Late Thursday evening the Justice Department, under US attorney general Loretta Lynch, first appointed in 1999 by none other than Bill Clinton,&nbsp; <strong>filed a court motion opposing the Clinton deposition request from conservative legal watchdog Judicial Watch, claiming that the organization was trying to dramatically expand the scope of the lawsuit</strong>. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/lynch%20hillary.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/lynch%20hillary_0.jpg" width="600" height="251" /></a></p> <p>&nbsp;</p> <p>As a reminder, as revealed last night, in the first deposition from the ongoing Judicial Watch lawsuit - which has obtained or seeks depositions from all SecState staffers close to Hillary - we learned thanks to State Department veteran Lewis Lukens, <a href="http://www.zerohedge.com/news/2016-05-27/first-shocking-deposition-clinton-email-case-reveals-she-did-not-use-password">that not only did Hillary not know how to use a computer </a><strong>but that her email actually had no password protection. </strong></p> <p>It is these kinds of revelations that the Department of Justice, in its quest for "justice", is seeking to prevent from seeing the light of day, only in the official filing the DOJ was a little more circumspect. Judicial Watch is "<strong>seeking instead to transform these proceedings into a wide-ranging inquiry into matters beyond the scope of the court’s order and unrelated to the FOIA request at issue in this case," </strong>government lawyers wrote in their filing, referring to the Freedom of Information Act. The lawyers wrote that the request to interview Clinton “is wholly inappropriate” before depositions are finished in a separate case also concerning the email server. </p> <p>In light of the recent report by the State Department Inspector General, <strong>with which Hillary also refused to cooperate</strong>, one could say it is entirely approprirate for her to be deposed. </p> <p>As a reminder, the Judicial Watch FOIA case began as a way to seek documents about talking points related to the 2012 terror attack on U.S. facilities in Benghazi, Libya, but has since grown to encompass wider questions about Clinton’s use of a personal server while working as secretary of State.&nbsp; </p> <p><strong>Last week, Judicial Watch asked the court to interview Clinton and five other current and former State Department officials about the server, after it received a judge's permission to move ahead with the process. </strong>The case is the second in which Judicial Watch has been granted approval to depose witnesses to gather evidence about Clinton’s email setup. In the other case, interviews of current and former Clinton aides have already begun. </p> <p>For now, Hillary is not scheduled to answer questions as part of that case, through a federal judge has warned that she could be called upon in the future. It is this potentially destructive deposition, that the DOJ is seeking to hide. </p> <p>In the government’s filing late Thursday, the Justice Department said that Judicial Watch’s request is “overbroad and duplicative." It claimed the group should complete the depositions in the other case first before demanding an interview of Clinton and the other officials. </p> <p>In other words, the DOJ is stalling for time to prevent a Hillary deposition until some time in July by which point Clinton should at least wrapped up have the democratic nomination.</p> <p>However, the department did say that it would not oppose a request to subpoena Jake Sullivan, a former senior State Department official and current top aide in Clinton’s presidential campaign, as long as questions were “on the limited topic” of officials using personal email accounts at the department. </p> <p>Finally, the DOJ said it would be willing to provide an unnamed witness to provide answers on behalf of the State Department in response to narrow questions about the FOIA request at the heart of the case. In other words an untainted surrogate who would provide answers in lieu of Hillary.</p> <p>That solution, government lawyers claimed, would "avoid the burden and expense" of going through a deposition process “that replicates activities already underway in another, overlapping case between the parties.” </p> <p>Finally, tecall <a href="http://abcnews.go.com/Politics/attorney-general-loretta-lynch-faces-potential-minefield-hillary/story?id=32691620">that in July 2015</a>, the inspector general for the State Department announced that as a result of the classified emails found in Clinton's personal server, <strong>that the inspectors general had sent a non-criminal "referral" to the Justice Department over the matter</strong>. As a result, US Attorney General Loretta Lynch and her department, would have to determine whether to open a criminal investigation into Clinton's affairs.</p> <p>As a further reminder, recall that before becoming attorney general, Lynch served as U.S. Attorney for the Eastern District of New York. It was her second time in the position, <strong>having been first appointed by President Bill Clinton in 1999</strong>.&nbsp; </p> <p>At the time, Lynch declined to say whether her connection to the Clintons creates a conflict of interest for her. We finally have the official answer.</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="1600" height="669" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/lynch%20hillary.jpg?1464453983" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/obama-rushes-defend-hillary-email-lawsuit-doj-fights-block-clinton-deposition#comments Department of Justice FOIA Freedom of Information Act Judicial Watch Nomination None Obama Administration Sat, 28 May 2016 23:17:38 +0000 Tyler Durden 562171 at http://www.zerohedge.com Iceland Has Offered Foreign Bondholders A "Choice": Sell Now, Or Have Cash Impounded Indefinitely http://www.zerohedge.com/news/2016-05-28/iceland-has-offered-foreign-bondholders-choice-sell-now-or-have-cash-impounded-indef <p><strong>Iceland has had a difficult past few months politically</strong>, as its Prime Minister Sigmundur David Gunlaugsson <a href="http://www.zerohedge.com/news/2016-04-05/iceland-pm-resigns-over-panama-papers-leaks">became the first casualty of the Panama Papers</a>.</p> <p><strong>Economically however, the story is more upbeat, as the country has rebounded since the financial crisis.</strong> The Icelandic Krona has stabilized against the Euro, the rate of change in inflation has slowed, and the country has recorded year-over-year growth in GDP each year since 2011.&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/28/20160528_iceland1.JPG"><img height="386" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/05/28/20160528_iceland1_0.JPG" width="600" /></a></p> <p>&nbsp;</p> <p>However, in a shocking turn of events, a law passed on May 22 by Iceland&#39;s parliament is offering the foreign holders of about $2.3 billion worth of krona-denominated bonds a <strong>choice of either selling out in June at a below-market exchange rate, or have the money they receive upon maturity be impounded indefinitely in low interest bank accounts</strong>. In other words, Iceland is trying to kick out foreign investors.</p> <p>For now, investors aren&#39;t interested in the deal and wish to stay invested in Iceland, even as officials are clearly trying to push foreign investors out.</p> <p>From the <a href="http://www.wsj.com/articles/iceland-puts-freeze-on-foreign-investors-1464366399">WSJ</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Investors, including Boston-based mutual-fund companies Eaton Vance Corp. and Loomis Sayles &amp; Co., a unit of Natixis SA, don&rsquo;t want to go. They say they will reject the government&rsquo;s offer.</em></p> <p>&nbsp;</p> <p><em>&ldquo;<span style="text-decoration: underline;">We would like to stay invested,</span>&rdquo; said Patrick Campbell, a global bond analyst at Eaton Vance.</em></p> <p>&nbsp;</p> <p><em>The dispute is the result of a wholesale turnaround in Iceland&rsquo;s relationship with foreign investors.</em></p> <p>&nbsp;</p> <p><em>The country became synonymous with financial alchemy after its banks ballooned by borrowing in bond markets and attracting foreign depositors with high interest rates. That system imploded in 2008 when depositors made a run on the banks just as their bonds fell due, causing the krona to sharply devalue against the euro.</em></p> <p>&nbsp;</p> <p><em>Yet a growing number of fund managers are now buying Icelandic government bonds, including those that were marooned on the island when it applied capital controls. The country is now one of the few offering a combination of high interest rates and strong economic growth prospects.</em></p> <p>&nbsp;</p> <p><em>Eaton Vance and another holder of the legacy debt, also called &ldquo;offshore&rdquo; debt, hedge fund Autonomy Capital LP, have been courting the government for months to allow them to keep their cash on the island, even offering to swap their holdings into long-term bonds that they would pledge to hold on to.</em></p> <p>&nbsp;</p> <p><em>But the country isn&rsquo;t interested. Instead, <span style="text-decoration: underline;">officials behind the law say they aim to keep the $16.7 billion economy of the island with a population of 327,386 from being swamped anew by the ebb and flow of offshore funds</span>.</em></p> <p>&nbsp;</p> <p><em>&ldquo;<strong>We don&rsquo;t need the money,</strong>&rdquo; said Mar Gudmundsson, governor of Iceland&rsquo;s central bank. &ldquo;These are remnants from the last boom and bust, and we are not going to repeat that mistake.&rdquo;</em></p> </blockquote> <p><strong>Iceland has had formal capital controls since it barred conversions of krona to foreign currencies during the 2008 crisis, boxing in foreign bondholders at that time as well.</strong> While the controls are still in place, the country has made the first step in easing some of the controls, as it <a href="http://www.bloomberg.com/news/articles/2015-12-18/iceland-bank-collapse-nears-end-as-creditors-reach-last-accord">recently negotiated</a> a deal with creditors that paved the way for payments to be made to those holding distressed bank debt left over from the crisis.</p> <p>Investors deciding to stay invested with Iceland are playing a dangerous game of chicken with the government on whether or not capital controls will be lifted in any reasonable amount of time. <strong>It has taken nearly seven years for creditors to get money out of the country after the financial crisis</strong>, and although the krona has stabilized since its plunge and the economy is back on firmer footing, nobody can know for certain just how long investor cash will be tied up in Iceland&#39;s low yielding bank accounts before controls are finally lifted.</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="958" height="507" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160528_isk.jpg?1464462060" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/iceland-has-offered-foreign-bondholders-choice-sell-now-or-have-cash-impounded-indef#comments Bond Creditors Iceland Rate of Change Sat, 28 May 2016 23:00:00 +0000 Tyler Durden 562186 at http://www.zerohedge.com US Default Risk Hits 8-Month Highs http://www.zerohedge.com/news/2016-05-28/us-default-risk-hits-8-month-highs <p>While still relatively low, <strong>USA sovereign CDS spreads have risen to 8-month highs</strong>, surging off early March lows. The reasons are likely numerous though we suggest the 4 surges in the last 3 months appear to line up with notable 'events'...</p> <p>While correlation does not imply causation, it does waggle its eyebrows suggestively and gesture furtively while mouthing "look over here."</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/28/20160527_USACDS.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/28/20160527_USACDS_0.jpg" width="600" height="313" /></a></p> <p><em>Note: Sovereign CDS represent a combination both default and devaluation risks.</em></p> <p>&nbsp;</p> <p>Could it be that Trump's honest comments on the creditworthiness of the USA are beginning to resonate with market participants as the probability of his winning in November rises?</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="961" height="501" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160527_USACDS.jpg?1464461583" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-28/us-default-risk-hits-8-month-highs#comments CDS default Sovereign CDS Sat, 28 May 2016 22:30:00 +0000 Tyler Durden 562185 at http://www.zerohedge.com