by Zero Hedge - December 2nd, 2016 6:30 pm
On November 30, one week after the Washington Post launched its witch hunt against “Russian propaganda fake news“, with 390 votes for, the House quietly passed “H.R. 6393, Intelligence Authorization Act for Fiscal Year 2017“, sponsored by California Republican Devin Nunes (whose third largest donor in 2016 is Google parent Alphabet, Inc), a bill which deals with a number of intelligence-related issues, including Russian propaganda, or what the government calls propaganda, and hints at a potential crackdown on “offenders.”
A quick skim of the bill reveals “Title V—Matters relating to foreign countries”, whose Section 501 calls for the government to “counter active measures by Russia to exert covert influence … carried out in coordination with, or at the behest of, political leaders or the security services of the Russian Federation and the role of the Russian Federation has been hidden or not acknowledged publicly.”
The section lists the following definitions of media manipulation:
- Establishment or funding of a front group.
- Covert broadcasting.
- Media manipulation.
- Disinformation and forgeries.
- Funding agents of influence.
- Incitement and offensive counterintelligence.
- Terrorist acts.
As ActivistPost correctly notes, it is easy to see how this law, if passed by the Senate and signed by the president, could be used to target, threaten, or eliminate so-called “fake news” websites, a list which has been used to arbitrarily define any website, or blog, that does not share the mainstream media’s proclivity to serve as the Public Relations arm of a given administration.
Curiously, the bill which was passed on November 30, was introduced on November 22, two days before the Washington Post published its Nov. 24 article citing “experts” who claim Russian propaganda helped Donald Trump get elected.
As we reported last week, in an article that has been widely blasted, the WaPo wrote that “two teams of independent researchers found that the Russians exploited American-made technology platforms to attack U.S. democracy at a particularly vulnerable moment, as an insurgent candidate harnessed a wide range of grievances to claim the White House. The sophistication of the Russian tactics may complicate efforts by Facebook and Google to crack down on “fake news,” as they have vowed to do after widespread complaints about the problem.”
The newspaper cited PropOrNot, an anonymous website that posted a
by Zero Hedge - December 2nd, 2016 6:00 pm
Two days after Donald Trump’s election victory, I expressed the following sentiment in a post titled, Draining the Swamp? Wall Street is Already Loving Donald Trump:
To conclude, this article is primarily written for all my readers who are either Trump supporters, or who reluctantly voted for him. My message to you is that we need to hold this man’s feet to the fire. The election is over, and you got your desired outcome. Now is not the time to be a cheerleader. Now is not the time to behave exactly like Obama zombies did after he became an obvious betrayal. What allowed Obama to do all the bad things he did, was the fact that his supporters made endless excuses for him. Don’t make excuses for Trump. If you do, your life will get a lot worse and this country will decay far more into an authoritarian oligarchy than it already has. It is up to you to make sure he doesn’t become the Wall Street puppet I always feared he would be.
This message has become increasingly important with each passing day, and with every new cabinet disappointment. Mnuchin is not the only one. Trump picked the sister of Blackwater’s Erik Prince for Education Secretary (for more on Prince, see: America’s Top Rogue Mercenary – Blackwater’s Erik Prince is Under Federal Investigation) and Mitch McConnell’s wife for Transportation Secretary (see: Trump Fills the Swamp with Elaine Chao, Mitch McConnell’s Wife, for Transportation Secretary). The swamp is being filled rapidly, and the sooner we admit it, the better.
Those who recognize Trump’s betrayal most quickly will be average Americans who have been preyed upon by some of his cabinet picks. One of these people is Teena Colebrook.
The AP reports:
WASHINGTON (AP) — When Donald Trump named his Treasury secretary, Teena Colebrook felt her heart sink.
She had voted for the president-elect on the belief that he would knock the moneyed elites from their perch in Washington, D.C. And she knew Trump’s pick for Treasury Steven Mnuchin all too well.
OneWest, a bank formerly owned by a group of investors headed by Mnuchin, had foreclosed on her Los Angeles-area home in the aftermath of the Great Recession, stripping her of the two
by Zero Hedge - December 2nd, 2016 5:38 pm
Ever since the US adopted a “One China” policy after the 1972 Nixon-Mao meetings, followed by President Carter formally recognizing Beijing as the sole government of China in 1978 leading to the closure of the US embassy in Taipei one year later and cutting off relations with Taiwan, when it comes to US-China diplomacy Washington has maintained a steady posture when it comes to Taiwan: non-recognition.
That changed today, when as the Trump team reported, following nearly four decades of diplomatic non-contact, the president-elect held a phone conversation with the president of Taiwan, Tsai Ing-wen, who offered Trump her congratulations, and during which “they noted the close economic, political and security ties” that exist between Taiwan and the United States.
Perhaps Trump was confused, and thought he was chatting with the president of the People’s Republic of China, also known as China, instead of the Republic of China, better known as Taiwan, but whatever the reason, Trump now risks a major diplomatic scandal with China – before he has even been inaugurated – as a result of his phone call with the president of Taiwan, which China regards as a renegade province. As the FT accurately notes, “although it is not clear if the Trump transition team intended the conversation to signal a broader change in US policy towards Taiwan, the call is likely to infuriate Beijing.“
Quoted by the FT, Evan Medeiros, former Asia director at the White House national security council said that “the Chinese leadership will see this as a highly provocative action, of historic proportions.”
“Regardless if it was deliberate or accidental, this phone call will fundamentally change China’s perceptions of Trump’s strategic intentions for the negative. With this kind of move, Trump is setting a foundation of enduring mistrust and strategic competition for US-China relations.”
The phone call prompted a quick reaction, for now domestically (China is sleeping at this moment), with Sen. Chris Murphy taking to Twitter to say that “It’s probably time we get a Secretary of State nominee on board. Preferably w experience. Like, really really soon.”
(1) Foreign policy consistency is a means, not an end. It’s not sacred. Thus, it’s Trump’s right to shift policy, alliances, strategy.
— Chris Murphy (@ChrisMurphyCT) December
by Zero Hedge - December 2nd, 2016 5:00 pm
While paper gold traders can’t seem to dump the precious metal fast enough, physical gold demand is soaring around the world. India retail premiums are spiking (amid demonetization), local China premiums soar to a 3-year-high (as capital controls loom), and coin sales from the US Mint have risen for the 4th straight month, accelerating post-election to the highest since July 2015 since Trump’s victory at the election.
Following the initial panic-buying across India after Modi’s demonetization effort shook the nation’s faith in fiat currency (sending local gold premiums soaring), news of reported gold import curbs in China (and looming capital controls) has sent gold premiums in China near three-year highs amid limited supply of the precious metal (as Reuters reports)…
The import curbs may be part of China’s efforts to limit outflows of the yuan after the currency’s slide to its weakest in more than eight years, traders say. China allows only 15 banks to import gold, including three foreign lenders.
“There is severe restriction on the banks’ quota to import gold into China. Each one of them have to justify their need,” a Hong Kong-based banker said.
Gold was sold in China at about $24 an ounce above the international spot benchmark this week. Premiums went as high as $30 last week, the most since January 2014, according to Thomson Reuters data.
“Supply has been limited and so the premiums have held firm,” said Cameron Alexander, analyst with Thomson Reuters-owned metals consultancy GFMS.
And as Jesse’s Cafe Americain notes, yesterday saw over 28 tonnes of physical gold taken off the Shanghai Gold Exchange (in one day), easily the biggest day this year for physical gold withdrawals in Shanghai...
But it’t not just Asia.
In the US, physical gold demand has soared post-election in The United States as the paper prices was pummeled…
This is the 4th month in a row of rising physical gold demand, to the highest level since July 2015 (as China turmoil began to ripple through the world)…
So unlike with stocks where higher prices create higher demand, some level of economic rationality remains in precious metals as physical bullion demand reacts to take advantage of low prices to buy more.
by Zero Hedge - December 2nd, 2016 4:39 pm
The Fed has a very serious problem on its hands.
That problem concerns the fact that for seven years the Fed has spread the myth of a “recovery.”
I say “myth” because the reality is that when you remove accounting gimmicks, the US has been a “hair’s breadth” away from a recession since 2010.
The most obvious gimmick being employed is the phony “deflator” used to understate inflation and overstate growth.
Everyone knows that the official CPI measure for inflation is bogus. But the Fed routinely uses a deflator that is even lower that CPI when calculating GDP.
This sounds rather technical, so let’s run through this one step at a time.
Consider this simple example. Let’s say that the US GDP grew by 10% last year. Now let’s say that inflation also grew by 10%. In this scenario, real inflation adjusted GDP growth was ZERO.
However, announcing ZERO GDP growth is a major problem politically. So what do the Feds do? They claim that inflation was just 8%, and BOOM you’ve got 2% GDP growth announced for a year in which real GDP growth was actually zero.
This is one of the biggest games being played by the Fed post-2008. By using a deflator metric that is way below even the bogus CPI measure, the Fed is dramatically understating inflation and overstating GDP growth.
By using nominal GDP measures, you remove the Feds’ phony deflator metric. With that in mind, consider the year over year change in nominal GDP that has occurred in the US since 2011.
As you can see, since 2011, the nominal GDP has at levels that have signaled RECESSIONS at any other point in the last 30 years.
Now… what happens when even this feeble recovery actually rolls into a REAL-recession? What happens when the cycle turns… as it always does… and the Fed has already spent over $3.5 TRILLION pushing the markets into believing that economically the US is sound?
The market knows… but virtually no one is listening…
Another Crisis is brewing… the time to prepare is now.
If you’ve yet to take action to prepare for this, we offer a FREE investment report called the Prepare and Profit From the Next Financial Crisis that outlines simple, easy to follow strategies you can use to not only protect
by Zero Hedge - December 2nd, 2016 4:30 pm
What a change a couple of weeks can make. As my colleague, Michael Lebowitz, wrote this past week:
“Following Donald Trump’s surprise victory and the violent market reactions, many investors are left scratching their heads. As shown above, the consensus narrative warned that a Trump victory would spell doom for the markets. Days later, the narrative flipped and Trump’s economic policies, all of which were known prior to the election, are deemed beneficial for share prices.”
The question which remains, however, is whether tax reform and infrastructure spending will have the impact the markets are currently betting on?
As I penned in yesterday’s missive:
“The problem for Trump is that we no longer reside in the 80’s where a large group of ‘baby boomers’ were entering the workforce and driving a massive wave of innovation and productivity changes. Today, we are on the wrong side of the demographic trends combined with falling productivity and labor force growth.”
“In any event, the horses may already be out of the barn. Only 8.5% of payroll employment is now attributable to manufacturing, down from 10.3% 10 years ago, 14.3% 20 years ago, and 17.5% 30 years ago. Bringing factory jobs back to the US may bring them back to automated factories loaded with robots. Even Chinese factories are using more robots.”
And from Harvard Business Review:
“Slow productivity growth is the main cause of slow economic growth, and slow economic growth makes it all but impossible for everyone’s boat to rise. No wonder angry citizens want dramatic change. But while voters may see the problem in a political establishment that is out of touch, the populist politicians who are challenging that establishment are unlikely to fare better.
In the short term, they may be able to medicate the economy with a big tax cut or a dose of deficit spending. When the effects of that treatment wear off, though, the effects of slow productivity growth will linger.”
But beyond the productivity problem is simply debt.
While Trumponomics has fostered a furious rally in asset prices,
by Zero Hedge - December 2nd, 2016 4:26 pm
Over this weekend, Italy will vote on a referendum that, if passed, will give the government sweeping powers to enact radical change. According to the latest polls, the referendum is expected to fail — which might then pave the way for the nationalist Five Star Movement party to form a government — who literally hate the EU. Similar to what we experienced here with Trump v Clinton, Italian liberals are out in force — demonizing the right wingers who will vote against the referendum, calling them ‘Trumpistis” — accusing them of spreading pro-Russian fake news. Sound familiar? source: NY Times/Fortune
“A protracted period of political uncertainty after a ‘No’ vote could exacerbate the Italian banking issues, unsettle the Italian bond market, and weigh on business and consumer confidence,” says Holger Schmieding, chief economist with Behrenberg Bank in Berlin.
The populist and unpredictable ‘5 Stars Movement,’ as well as the anti-euro Lega Norde of Matteo Salvini, are waiting to exploit any failure of Renzi. As such, says Schmieding, “a political crisis could open up a bigger can of worms in Italy than it would elsewhere.” And that is never good for economic growth.
Some argue this vote could be even bigger than the BREXIT vote, because of the fact that Italy has so much debt and is wholly dependent upon Germany and the ECB to keep them afloat. If the referendum fails and Italy moves to exit the EU, it’s widely expected that the entirety of the Italian banking system, with some of the worst performing stocks in the world in 2016, will collapse amidst a gigantic plume of clown dust — tossing the Germans off the side of the boat to figure out all of their losses in solitude — entirely bedraggled with ruinous losses strewn out across their overleveraged banking system.
by Zero Hedge - December 2nd, 2016 4:02 pm
Everyone’s doing it, just follow them…
An interesting week:
- Nasdaq’s worst week since Feb 2016
- Small Caps worst week since Feb 2016
- Bank stocks up 4 weeks in a row to highest since Jan 2008
- FANG Stocks down 4 of the last 6 weeks
- Treasuries down 4 weeks in a row, TLT lowest close in a year
- USD Index down first time in 4 weeks
- Oil’s best week since Feb 2011 (at highest since July 2015)
- Gold down 4 weeks in a row to 10 month lows
Stocks on the week stunned investors, with Small Caps and Nasdaq suffering their worst weeks since Feb 2016 (and Dow and Trannies clung to unch)
NOTE: The Dow gained 10 points on the week – just 3 stocks – GS, UNH, and JPM added over 150 points alone.
Since the election, Nasdaq is now red…
But futures show the real action…
Financials (and Energy) remain the biggest post-Election winners (with Utilities and Staples worst) but both banks and energy stocks faded today… (banks worst day in over 2 months)
Just two charts to consider…
Notably VIX flash-crashed on payrolls… but look at Dow Futures swings – desperate to keep green for the week…
Post-payrolls, oil was best but bonds and bullion beat stocks
FANG (Diamondback) outperformed FANG Stocks on the week…
The yield curve steepened on the week (after 2 weeks of flattening), leaving 2Y yields lower on the week and the long-end underperforming…
So bonds and stocks down on the week – as Risk-Parity funds suffer the 7th week of losses in the last 9 weeks…
FX markets were volatile this week withthe USD index ending lower for the first time in 4 weeks led by cable strength…
Crude soared on the week – best week since Feb 2011 (to July 2015 highs) and silver gained as gold and copper slipped lower
Finally we leave you with this – here is your market America…
by Zero Hedge - December 2nd, 2016 3:55 pm
Coming off the the “Thank Your Tour” that got started yesterday with stops in Indiana and Ohio, Vice President-Elect Mike Pence sat down with the Wall Street Journal to discuss the new administration’s aggressive plans for the first 100 days in office. Pence said the new team plans for a “burst of activity” right out of the gate and said “the only thing that will surprise them is that Washington, D.C., is going to get an awful lot done in a short period of time.”
Vice President-elect Mike Pence said Thursday that the incoming Trump administration is planning a burst of activity that would take aim at the gridlock in Washington, pressing forward with its goals to overhaul the tax code, health care and immigration laws.
In an interview with The Wall Street Journal, Mr. Pence said President-elect Donald Trump is preparing ambitious 100-day and 200-day plans aimed at fulfilling core campaign promises and jump-starting economic growth.
Asked what might surprise voters about the Trump White House, Mr. Pence said: “I think the only thing that will surprise them is that Washington, D.C., is going to get an awful lot done in a short period of time.”
The priorities of the first 100 days laid out by Pence are not terribly surprising and include reforming immigration, repealing and replacing Obamacare, filling the vacant Supreme Court seat and overhauling the tax code. While several reforms can be accomplished by simply undoing Obama’s many executive orders, others, like tax reform, will require Congressional approval and will stretch into the spring.
The new administration’s first priorities would include curbing illegal immigration, abolishing and then replacing Mr. Obama’s signature health-care system, nominating a justice to fill a vacancy on the Supreme Court, and strengthening the military, said Mr. Pence, whose wife, Karen Pence, sat nearby during the interview.
By springtime, the Trump administration would work with congressional leaders “to move fundamental tax reform” meant to “free up the pent-up energy in the American economy,” he said.
Pillars of the tax overhaul would include lowering marginal tax rates, reducing the corporate tax rate “from some of the highest in the industrialized world” to 15%, and repatriating corporate cash held overseas, he said.
Such measures would “benefit American
by Zero Hedge - December 2nd, 2016 3:43 pm
A man from the French region of Normandy recently inherited a house from a deceased relative, only to discover his newly acquired home was actually a secret gold depository. Throughout the house, the man found a total of 220 lbs (3208.33 Troy oz.) of gold coins and bars totaling $3.7 million.
The man’s identity has yet to be released, but reports indicate he was in the process of preparing furniture for sale when he stumbled upon part of the horde.
Local auctioneer, Nicolas Fierfort, who had visited the home in order to appraise the furniture confirmed “5,000 gold pieces, two bars of 12 kilos and 37 ingots of 1 kilo” were found in total.
Fierfort also said the golden contents were “extremely well hidden” and scattered throughout the rest of the residence.
The first stash was a tin box of coins, which had been screwed to the underside of a piece of furniture. Like breadcrumbs leading the way home, the man continued finding gold coins in places like boxes to hold whiskey bottles, “under piles of linen, in the bathroom … everywhere,” according to Fierfort. Eventually, the two modern day Conquistadors stumbled upon the mother lode: 2 – 12 kilo gold bars. That’s 386 Troy ounces each.
A little detective work dated the gold’s purchase to sometime in the 1950s and 1960s. After the gold dust settled, the newly minted millionaire was able to locate the certificates of authenticity within the dead relative’s estate papers and eventually sell it to various buyers.
However, this story of good fortune doesn’t end as happily as we would like. Along with death comes taxes. It seems the French government will be hitting the man for a 45% inheritance tax along with charging him 3 years of back taxes because his deceased relative failed to declare the gold.