May the source be with you, but remember the KISS principle ;-)
Financial Sector Induced Systemic Instability of Economy
While I believe in usefulness of capital markets, it is clear that they are double edge sword and
that banks "in a long run" tend to behave like
Mr. Capone may have something to say about danger of banks :-).That means that growth of
financial sector represents a direct threat to the stability of the society. Positive feedback loops
creates one financial crisis after another with the increasing magnitude leading up to a collapse of
financial system like happened in 1927 and 2008.
"Minsky's financial instability hypothesis depends critically on what amounts to a sociological
insight. People change their minds about taking risks. They don't make a one-time rational
judgment about debt use and stock market exposure and stick to it. Instead, they change their
minds over time. And history is quite clear about how they change their minds. The
longer the good times endure, the more people begin to see wisdom in risky strategies."
The Cost of Capitalism: Understanding Market Mayhem and Stabilizing our
Economic Future, by Robert Barbera
The flaw with Capitalism is that it creates its own positive feedback loop, snowballing to
the point where the accumulation of wealth and power hurts people — eventually even those at the
top of the food chain. ”
Banks are a clear case of market failure and their employees at the senior level have
basically become the biggest bank robbers of all time. As for basing pay on current revenues
and not profits over extended periods of time, then that is a clear case of market failure --
The banksters have been able to sell the “talent” myth to justify their outsized pay
because they are the only ones able to deliver the type of GDP growth the U.S. economy needs in
the short term, even if that kills the U.S. economy in the long term. You’ll be gone, I’ll be
Unfortunately, many countries go broke pursuing war, if not financially, then morally (are
the two different? – this post suggests otherwise).
I occurs to me that the U.S. is also in
that flock; interventions justified by grand cause built on fallacy, the alpha and omega of failure.
Is the financial apparatchik (or Nomenklatura, a term I like which, as many from the Soviet era,
succinctly describes aspects of our situation today) fated also to the trash heap, despite the
best efforts of the Man of the hour, Ben Bernanke?
Financialization is a Damocles sword hanging over the neoliberal society
While I believe in usefulness of capital markets, it is clear that they are double edge sword and
that banks "in a long run" tend to behave like
Mr. Capone may have something to say about danger of banks :-).That means that growth of financial
sector represents a direct threat to the stability of the society (Keynesianism
and the Great Recession )
Without adult supervision, as it were, a financial sector that was already inherently unstable
went wild. When the subprime assets were found to be toxic since they were based on mortgages on
which borrowers had defaulted, highly indebted or leveraged banks that had bought these now
valueless securities had little equity to repay their creditors or depositors who now came after
them. This quickly led to their bankruptcy, as in the case of Lehman Brothers, or to their being
bailed out by government, as was the case with most of the biggest banks. The finance sector
froze up, resulting in a recession—a big one—in the real economy.
Neoliberal revolution, or, as Simon Johnson called it after "quite coup" (Atlantic),
brought political power to the financial oligarchy deposed after the New Deal. Deregulation
naturally followed, with especially big role played by corrupt Clinton administration. Positive feedback loops creates one financial crisis after another with the
increasing magnitude. "Saving and loans" crisis followed by dot-com crisis of 2000, which in
turn followed by the collapse of financial system in 2008, which looks somewhat similar to what
happened in 1927. No prominent financial honcho, who was instrumental in creating "subprime
crisis" was jailed. Most remained filthy rich.
Unless the society puts severe limits on their actions like was done during New Deal,
financial firms successfully
subvert the regulation mechanisms and take the society hostage. But periodic purges with relocation
of the most active promoters of "freedom for banks" (aka free market fundamentalism) under the smoke
screen of "free market" promotion does not solve the problem of positive feedback loops that banks create
by mere existence. That's difficult to do while neoliberal ideology and related neoclassical economy
dominates the society thinking (via brainwashing), with universities playing especially negative
role -- most of economics departments are captured by neoliberals who censor any heretics. So year
after year brainwashing students enter the society without understanding real dangers that
neoliberalism brought for them. Including lack of meaningful employment opportunities.
Of course, most of high level officers of leading finance institutions which caused the crisis of
2008-2009 as a psychological type are as close to gangsters as one can get. But there is
something in their actions that does not depend on individual traits (although many of them
definitely can be classified as psychopaths), and is more related to their social position.
This situation is somewhat similar to Bolsheviks coup d'état of 1917 which resulted in capturing
Russia by this ideological sect. And in this sense quite coupe of 1980 is also irreversible in
the same sense as Bolsheviks revolution was irreversible: the "occupation" of the country by a
fanatical sect lasts until the population rejects the ideology with its (now apparent) utopian
Bolshevism which lasted
75 years, spend in such zombie state the last two decades (if we assume 1991 as the year of death of
Bolshevism, its ideology was dead much earlier -- the grave flaws in it were visible from late 60th,
if not after the WWII). But only when their ideology was destroyed both by inability to raise the standard of living
of the population and by the growing neoliberal ideology as an alternative (and a new, more powerful then Marxism high-demand
cult) Bolsheviks started to lose the grip on their power in the country. As a result Bolsheviks lost the power
only in 1991, or more correctly switched camps and privatized the country. If not inaptness of their
last General Secretary, they probably could last more. In any case after the ideology collapsed, the
USSR disintegrated (or more correctly turn by national elites, each of which wanted their peace of
The sad truth is that the mere growth of financial sector creates additional positive feedback loops
and increases structural instability within both the financial sector itself and the society at large.
Dynamic systems with strong positive feedback loops not compensated by negative feedback loops are unstable.
As a result banks and other financial institution periodically generate a deep, devastating crisis.
This is the meaning of famous Hyman Minsky phrase "stability is destabilizing".
In other words, financial apparatchiks (or Financial Nomenklatura, a term from the Soviet era, which
succinctly describes aspects of our situation today) drive the country off the cliff because they do
not have any countervailing forces, by the strength of their political influence and unsaturable
greed. Although the following
analogy in weaker then analogy with dynamic systems with positive feedback loops, outsized financial
sector can be viewed in biological terms as cancer.
known medically as a malignantneoplasm, is a broad group of
diseases involving unregulated
cell growth. In cancer,
cells divide and grow
uncontrollably, forming malignant tumors, and invading nearby parts of the body. The cancer may also
spread to more distant parts
of the body through the lymphatic system
or bloodstream. Not all tumors
are cancerous; benign tumors
do not invade neighboring tissues and do not spread throughout the body. There are over 200 different
known cancers that affect humans.
Like certain types of cancer they depend of weakening "tumor suppressor genes" (via "Quiet
coup" mechanism of acquiring dominant political power) which allow then to engage in uncontrolled growth, destroying
healthy cells (and first of all local manufacturing).
The other suspicion is the unchecked financialization always goes too far and the last N
percent of financial activity absorbs much more resources (especially intellectual resources) and
creates more potential instability than its additional efficiency-benefits (often zero or negative) can justify. It is hard
to imagine that a Hedge Fund Operator of the Year does anything that is even remotely socially useful to justify his
enormous (and lightly taxed) compensation. It is pure wealth redistribution up based on political domination
of financial oligarchy. Significant vulnerabilities within the shadow banking system and
derivatives are plain vanilla socially destructive. Yet they persist due to inevitable political power
grab by financial oligarchy (Quiet coup).
Again, I would like to stress that this problem of the oversized financial sector which produces
one devastating crisis after another
is closely related to the problem of a positive feedback loops. And the society in which banks are given
free hand inevitably degrades into "socialism for banks" or "casino
capitalism" -- a type of
neoliberalism with huge
inequality and huge criminality of top banking officers.
Whether we can do without private banks is unclear, but there is sound evidence that unlike growth
of manufacturing, private financial sector growth is dangerous for the society health and perverts society
goals. Like cult groups the financial world does a terrific job of "shunning" the principled individuals
and suppressing dissent (by capturing and cultivating neoliberal stooges in all major university
departments and press),
so self-destructing tendencies after they arise can't be stopped within the framework of
neoliberalism. In a way financial
firm is like sociopath inevitable produces its trail of victims (and sociopaths might be useful in battles exactly due
to the qualities such as ability to remain cool in dangerous situation, that make them dangerous in the normal course of events).
This tendency of society with unregulated or lightly regulated financial sector toward self-destruction
was first formulated as "Minsky instability hypothesis" --
and outstanding intellectual achievement of American economic Hyman Minsky (September 23, 1919 –
October 24, 1996). Who BTW was pretty much underappreciated (if not suppressed) during his lifetime because his views
were different from orthodox (and false) neoclassic economic theory which dominates US universities,
Like flat Earth theory was enforce by Catholic church before, it is fiercely enforced by an army of well paid neoliberal economics, those
Jesuits of modern era. Who prosecute heretics who question flat Earth theory even more efficiently then
their medieval counterparts; the only difference is that they do not burn the literally, only
Former Washington University in St. Louis economics professor Hyman P. Minsky had predicted the
Great Recession decades before it happened. Hyman Minsky was a real student of the Great
Depression, while Bernanke who widely is viewed as a scholar who studied the Great Depression, in
reality was a charlatan, who just tried to explain the Great Depression from the positions of
neo-classical economy. That's a big difference.
Minsky instability hypothesis ("stability is destabilizing" under capitalism) that emerged from
his analysis of the Great Depression was based on intellectual heritage of three great thinkers in
economics (my presentation is partially based on an outstanding lecture by Steve Keen Lecture 6 on Minsky, Financial
Instability, the Great Depression & the Global Financial Crisis). We can talk about
three source of influence, there authors writing of which touched the same subject from similar
positions and were the base of Hyman Minsky great advance in understanding of mechanics of
development of financial crisis under capitalism and the critical role of financial system in it
(neoclassical economics ignores the existence of financial system in its analysis):
Minsky didn't follow the conventional version of Marxism . And it was dangerous for him to
do so due to McCarthysm. Even mentioning of Marx might lead to strakism fromthe academy those years.
McCarthy and his followers in academy did not understand the difference between Marx great analysis
of capitalism and his utopian vision of the future. Impliedly this witch hunt helped to establish
hegemony of neoclassical economy in economic departments in the USA.
While Minsky did not cited Marx in his writings and did use Marx's Labor Theory of Value his
thinking was definitely influenced by Marx’s critique of finance. We now know that he read and
admired the Capital. And that not accidental due to the fact that his parents were Mensheviks -- a
suppressed after Bolshevik revolution more moderate wing of Russian Social Democratic Party that
rejected the idea of launching the socialist revolution in Russia -- in their opinion Russia
needed first to became a capitalist country and get rid of remnants of feudalism. They escaped from
Soviet Russia when Mensheviks started to be prosecuted by Bolsheviks.
And probably the main influence on Minsky was not Marx's discussion of finance in Volume I of Capital
with a "commodity" model of money, but critical remarks scattered in Volumes II & III
(which were not edited by Marx by compiled posthumously by Engels), where he was really critical of
big banks as well as Marx's earlier works (Grundrisse,
Theories of Surplus Value) where Marx was scathing about finance:
"A high rate of interest can also indicate, as it did in 1857, that the country is undermined
by the roving cavaliers of credit who can afford to pay a high interest because they pay it out
of other people's pocket* (whereby, however, they help to determine the rate of interest
for all) and meanwhile they live in grand style on anticipated profits.
The second source on which Minsky based his insights was Irving Fisher. Irving Fisher’s
reputation destroyed by wrong predictions on stock market prices. In aftermath, developed theory to
explain the crash and published it in his book "The Debt Deflation Theory of Great
Depressions". His main points are:
Neoclassical theory assumed equilibrium but any real world equilibrium will be short-lived
"New disturbances are, humanly speaking, sure to occur, so that, in actual fact, any
variable is almost always above or below the ideal equilibrium."
Theoretically... there must be—over-or under-production, over- or under-consumption,..., and
over or under everything else.
It is as absurd to assume that, for any long period of time, the variables in the economic
organization, or any part of them, will "stay put," in perfect equilibrium, as to assume that the
Atlantic Ocean can ever be without a wave." (1933:339)
According to Fisher two key disequilibrium forces that push economic into the next economic
crisis are debt and subsequent deflation
The "two dominant factors" which cause depressions are "over-indebtedness to start with and
deflation following soon after"
"Thus over-investment and over-speculation are often important; but they would have far less
serious results were they not conducted with borrowed money.
That is, over-indebtedness may lend importance to over-investment or to over-speculation. The
same is true as to over-confidence.
I fancy that over-confidence seldom does any great harm except when, as, and if, it beguiles
its victims into debt." (Fisher 1933: 341; emphasis added!)
A chain reaction when overconfidence leads to over-indebtedness: Debt liquidation leads to
Joseph Schumpeter was Joseph Schumpeter has more positive view of capitalism than the other two. He authored the theory
of creative destruction as a path by which capitalism achieves higher and higher productivity.
He capitalism as necessarily unstable, but for him this was a positive feature --
instability of capitalism the source of its creativity. His view of capitalism was highly dynamic
and somewhat resembles the view of Marx (who also thought that capitalism destroys all previous
order and create a new one):
Entrepreneurs profit by disrupting "equilibrium" of system
Finance plays essential role here by enabling entrepreneurs
To Schumpeter, entrepreneurs are people with good ideas but no money
To turn ideas into disruptive products or processes they resort to borrowing from banks
Boom caused by investment phase of entrepreneurs. New entrepreneurs undermine old or rival
products. Successful entrepreneurs repay debt, reducing money supply
In this sense the success (boom) carry the seeds of the subsequet bust because with the
success of "pioneers" draw other into thi same market and banks are more willing to finance them
seeing the success of pioneers. But when too many similar products are financed and hit the
market they create the glut and entrepreneurs who ere late to the party are unable to pay the
debts and go bankrupt desire the fact that might have superiors products (but not superior
enough). Slump caused when excessive products hit the market and there are not enough buyers.
Debt deflation follows.
Unlike Marx, who thought that the periodic crisis of overproduction is the source of
instability (as well as gradual absolute impoverishment of workers), Minsky assumed that the
key source of that instability of capitalist system is connected with the cycles of business
borrowing and fractional bank lending, when "good times" lead to excessive borrowing leading to high
leverage and overproduction and thus to eventual debt crisis (The
Alternative To Neoliberalism ):
Minsky on capitalism:
He followed Marx stating that "capitalism is inherently flawed, being prone to booms, crises
This instability is due to characteristics the financial system must possess and will
inevitably acquire, if it is to be consistent with full-blown capitalism.
Such a financial system will be capable of both generating signals that induce an accelerating
desire to invest and of financing that accelerating investment." (Minsky 1969b: 224)
“The natural starting place for analyzing the relation between debt and income is to take
an economy with a cyclical past that is now doing well.
The inherited debt reflects the history of the economy, which includes a period in the not
too distant past in which the economy did not do well.
Acceptable liability structures are based upon some margin of safety so that expected cash
flows, even in periods when the economy is not doing well, will cover contractual debt payments.
As the period over which the economy does well lengthens, two things become evident in board
rooms. Existing debts are easily validated and units that were heavily in debt prospered; it paid
to lever." (65)
It becomes apparent that the margins of safety built into debt structures were too great.
ans should be reduced...
As a result, over a period in which the economy does well, views about acceptable debt
structure change. In the dealmaking that goes on between banks, investment bankers, and businessmen,
the acceptable amount of debt to use in financing various types of activity and positions increases.
This increase in the weight of debt financing raises the market pnce of capital assets and
increases investment. As this continues the economy is transformed into a boom economy... ” (65)
This transforms a period of tranquil growth into a period of speculative excess
“Stable growth is inconsistent with the manner in which investment is determined in an economy
in which debt-financed ownership of capital assets exists, and the extent to which such debt financing
can be carried is market determined.
It follows that the fundamental instability of a capitalist economy is upward.
The tendency to transform doing well into a speculative investment boom is the basic instability
in a capitalist economy." (65)
The idea of Minsky moment is related to the fact that the fractional reserve banking periodically
causes credit collapse when the leveraged credit expansion goes into reverse. And mainstream economists
do not want to talk about the fact that increasing confidence breeds increased leverage. So financial
stability breeds instability and subsequent financial crisis. All actions to guarantee a market rise,
ultimately guarantee it's destruction because greed will always take advantage of a "sure thing" and
push it beyond reasonable boundaries. In other words, marker players are no rational and assume
that it would be foolish not to maximize leverage in a market which is going up. So the fractional
reserve banking mechanisms ultimately and ironically lead to over lending and guarantee the subsequent
crisis and the market's destruction. Stability breed instability.
That means that fractional reserve banking based economic system with private players (aka capitalism)
is inherently unstable. And first of all because fractional reserve banking is debt based. In
order to have growth it must create debt. Eventually the pyramid of debt crushes and crisis hit. When
the credit expansion fuels asset price bubbles, the dangers for the financial sector and the real economy
are substantial because this way the credit boom bubble is inflated which eventually burst. The damage
done to the economy by the bursting of credit boom bubbles is significant and long lasting.
«When credit growth fuels asset price bubbles, the dangers for the financial sector and
the real economy are much more substantial.»
So M Minsky 50 years ago and M Pettis 15 years ago (in his "The volatility machine") had it
right? Who could have imagined! :-)
«In the past decades, central banks typically have taken a hands-off approach to asset
price bubbles and credit booms.»
If only! They have been feeding credit-based asset price bubbles by at the same time weakening
regulations to push up allowed capital-leverage ratios, and boosting the quantity of credit as
high as possible, but specifically most for leveraged speculation on assets, by allowing vast-overvaluations
on those assets.
Central banks have worked hard in most Anglo-American countries to redistribute income and
wealth from "inflationary" worker incomes to "non-inflationary" rentier incomes via hyper-subsidizing
with endless cheap credit the excesses of financial speculation in driving up asset prices.
John Kay in his January 5 2010 FT column very aptly explained the systemic instability of financial
The credit crunch of 2007-08 was the third phase of a larger and longer financial crisis. The
first phase was the emerging market defaults of the 1990s. The second was the new economy boom and
bust at the turn of the century. The third was the collapse of markets for structured debt products,
which had grown so rapidly in the five years up to 2007.
The manifestation of the problem in each phase was different – first emerging markets, then
stock markets, then debt. But the mechanics were essentially the same. Financial institutions
identified a genuine economic change – the assimilation of some poor countries into the global economy,
the opportunities offered to business by new information technology, and the development of opportunities
to manage risk and maturity mismatch more effectively through markets. Competition to sell
products led to wild exaggeration of the pace and scope of these trends. The resulting herd enthusiasm
led to mispricing – particularly in asset markets, which yielded large, and largely illusory, profits,
of which a substantial fraction was paid to employees.
Eventually, at the end of each phase, reality impinged. The activities that once seemed so profitable
– funding the financial systems of emerging economies, promoting start-up internet businesses, trading
in structured debt products – turned out, in fact, to have been a source of losses. Lenders had to
make write-offs, most of the new economy stocks proved valueless and many structured products became
unmarketable. Governments, and particularly the US government, reacted on each occasion by
pumping money into the financial system in the hope of staving off wider collapse, with some degree
of success. At the end of each phase, regulators and financial institutions declared that
lessons had been learnt. While measures were implemented which, if they had been introduced five
years earlier, might have prevented the most recent crisis from taking the particular form it did,
these responses addressed the particular problem that had just occurred, rather than the underlying
generic problems of skewed incentives and dysfunctional institutional structures.
The public support of markets provided on each occasion the fuel needed to stoke the next crisis.
Each boom and bust is larger than the last. Since the alleviating action is also larger, the pattern
is one of cycles of increasing amplitude.
I do not know what the epicenter of the next crisis will be, except that it is unlikely to involve
structured debt products. I do know that unless human nature changes or there is fundamental change
in the structure of the financial services industry – equally improbable – there will be another
manifestation once again based on naive extrapolation and collective magical thinking. The recent
crisis taxed to the full – the word tax is used deliberately – the resources of world governments
and their citizens. Even if there is will to respond to the next crisis, the capacity to do so may
not be there.
The citizens of that most placid of countries, Iceland, now backed by their president, have found
a characteristically polite and restrained way of disputing an obligation to stump up large sums
of cash to pay for the arrogance and greed of other people. They are right. We should listen to them
before the same message is conveyed in much more violent form, in another place and at another time.
But it seems unlikely that we will.
We made a mistake in the closing decades of the 20th century. We removed restrictions that
had imposed functional separation on financial institutions. This led to businesses riddled
with conflicts of interest and culture, controlled by warring groups of their own senior employees.
The scale of resources such businesses commanded enabled them to wield influence to create a – for
them – virtuous circle of growing economic and political power. That mistake will not be easily remedied,
and that is why I view the new decade with great apprehension. In the name of free markets, we created
a monster that threatens to destroy the very free markets we extol.
While Hyman Minsky was the first clearly formulate the financial instability hypothesis, Keynes
also understood this dynamic pretty well. He postulated that a world with a large financial
sector and an excessive emphasis on the production of investment products creates instability both in
terms of output and prices. In other words it automatically tends to generate credit and asset bubbles.
The key driver is the fact that financial professionals generally risk other people’s money and due
to this fact have asymmetrical incentives:
They get big rewards when bets go right
They don’t have to pay when bets go wrong.
This asymmetry is not a new observation of this systemic problem. Andrew Jackson noted it in much
more polemic way long ago:
“Gentlemen, I have had men watching you for a long time and I am convinced that you have used
the funds of the bank to speculate in the breadstuffs of the country.When you won,
you divided the profits amongst you, and when you lost, you charged it to the bank. You tell
me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families.
That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand
families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out,
and by the grace of the Eternal God, will rout you out.”
This asymmetrical incentives ensure that the financial system is structurally biased toward
taking on more risk than what should be taken. In other words it naturally tend to slide to
the casino model, the with omnipresent reckless gambling as the primary and the most profitable mode
of operation while an opportunities last. The only way to counter this is to throw sand into the
wheels of financial mechanism: enforce strict regulations, limit money supplies and periodically
jail too enthusiastic bankers. The latter is as important or even more important as the other two because
bankers tend to abuse "limited liability" status like no other sector.
Asset inflation over the past 10 years and the subsequent catastrophe incurred is a way classic behavior
of dynamic system with strong positive feedback loop. Such behavior does not depends of personalities
of bankers or policymakers, but is an immanent property of this class of dynamic systems. And the main
driving force here was deregulation. So its important that new regulation has safety feature which make
removal of it more complicated and requiring bigger majority like is the case with constitutional issues.
Another fact was the fact that due to perverted incentives, accounting in the banks
was fraudulent from the very beginning and it was fraudulent on purpose. Essentially accounting
in banks automatically become as bad as law enforcement permits. This is a classic case of control fraud
and from prevention standpoint is make sense to establish huge penalties for auditors, which might hurt
healthy institutions but help to ensure that the most fraudulent institution lose these bank charter
before affecting the whole system. With the anti-regulatory zeal of Bush II administration the
level of auditing became too superficial, almost non-existent. I remember perverted dances with
Sarbanes–Oxley when it
was clear from the very beginning that the real goal is not to strengthen accounting but to earn fees
and to create as much profitable red tape as possible, in perfect Soviet bureaucracy style.
Deregulation also increases systemic risk by influencing the real goals of financial
organizations. At some point of deregulation process the goal of higher remuneration for the top brass
becomes self-sustainable trend and replaces all other goals of the financial organization. This
is the essence of Martin Taylor’s, the former chief executive of Barclays, article
- Innumerate bankers were ripe for a reckoning in the Financial Times (Dec 15, 2009), which is worth
reading in its entirety:
City people have always been paid well relative to others, but megabonuses are quite new.
From my own experience, in the mid-1990s no more than four or five employees of Barclays’ then
investment bank were paid more than £1m, and no one got near £2m. Around the turn of the
millennium across the market things began to take off, and accelerated rapidly – after a pause in
2001-03 – so that exceptionally high remuneration, not just individually, but in total, was paid
out between 2004 and 2007.
Observers of financial services saw unbelievable prosperity and apparently immense value
added. Yet two years later the whole industry was bankrupt. A simple reason underlies this:
any industry that pays out in cash colossal accounting profits that are largely imaginary will go
bust quickly. Not only has the industry – and by extension societies that depend on it – been
spending money that is no longer there, it has been giving away money that it only imagined it had
in the first place. Worse, it seems to want to do it all again.
What were the sources of this imaginary wealth?
First, spreads on credit that took no account of default probabilities (bankers have been
doing this for centuries, but not on this scale).
Second, unrealised mark-to-market profits on the trading book, especially in illiquid instruments.
Third, profits conjured up by taking the net present value of streams of income stretching
into the future, on derivative issuance for example.
In the last two of these the bank was not receiving any income, merely “booking revenues”.
How could they pay this non-existent wealth out in cash to their employees? Because they had
no measure of cash flow to tell them they were idiots, and because everyone else was doing it.
Paying out 50 per cent of revenues to staff had become the rule, even when the “revenues”
did not actually consist of money.
In the next phase instability is amplified by the way governments and central banks respond to crises
caused by credit bubble: the state has powerful means to end a recession, but the policies it uses give
rise to the next phase of instability, the next bubble…. When money is virtually free – or, at least,
at 0.5 per cent – traders feel stupid if they don’t leverage up to the hilt. Thus previous bubble and
crash become a dress rehearsal for the next.
Resulting self-sustaining "boom-bust" cycle is very close how electronic systems with positive feedback
loop behave and cannot be explained by neo-classical macroeconomic models. Like with electronic
devices the financial institution in this mode are unable to provide the services that are needed.
Modern finance, he argued, was far from the stabilizing force that mainstream economics portrayed:
rather, it was a system that created the illusion of stability while simultaneously creating the
conditions for an inevitable and dramatic collapse.
...our whole financial system contains
the seeds of its own destruction. “Instability,” he wrote, “is an inherent and inescapable flaw of
Minsky’s vision might have been dark, but he was not a fatalist; he believed it was possible to
craft policies that could blunt the collateral damage caused by financial crises. But with a growing
number of economists eager to declare the recession over, and the crisis itself apparently behind
us, these policies may prove as discomforting as the theories that prompted them in the first place.
Indeed, as economists re-embrace Minsky’s prophetic insights, it is far from clear that they’re ready
to reckon with the full implications of what he saw.
And he understood the roots of the current credit bubble much better that neoclassical economists like
As people forget that failure is a possibility, a “euphoric economy” eventually develops, fueled
by the rise of far riskier borrowers - what [Minsky] called speculative borrowers,
those whose income would cover interest payments but not the principal; and those he called
“Ponzi borrowers,” those whose income could cover neither, and could only pay their bills
by borrowing still further.
As these latter categories grew, the overall economy would shift from a conservative but profitable
environment to a much more freewheeling system dominated by players whose survival depended not on
sound business plans, but on borrowed money and freely available credit.
Minsky’s financial instability hypothesis suggests that when optimism is high and ample
funds are available for investment, investors tend to migrate from the safe hedge end of the Minsky
spectrum to the risky speculative and Ponzi end. Indeed, in the current crisis, investors tried to raise
returns by increasing leverage and switching to financing via short-term—sometimes overnight— borrowing
late to learn?):
In the church of Friedman, inflation was the ol' devil tempting the good folk; the 1980s seemed
to prove that, let loose, it would cause untold havoc on the populace. But, as Barbera notes:
The last five major global cyclical events were the early 1990s recession - largely occasioned
by the US Savings & Loan crisis, the collapse of Japan Inc after the stock market crash of 1990,
the Asian crisis of the mid-1990s, the fabulous technology boom/bust cycle at the turn of the
millennium, and the unprecedented rise and then collapse for US residential real estate in 2007-2008.
All five episodes delivered recessions, either global or regional. In no case was there a significant
prior acceleration of wages and general prices. In each case, an investment boom and an associated
asset market ran to improbable heights and then collapsed. From 1945 to 1985, there was no recession
caused by the instability of investment prompted by financial speculation - and since 1985 there
has been no recession that has not been caused by these factors.
Thus, meet the devil in Minsky's paradise - "an investment boom and an associated asset market [that]
ran to improbable heights and then collapsed".
According the Barbera, "Minsky's financial instability hypothesis depends critically on what amounts
to a sociological insight. People change their minds about taking risks. They don't make a one-time
rational judgment about debt use and stock market exposure and stick to it. Instead, they change
their minds over time. And history is quite clear about how they change their minds. The longer the
good times endure, the more people begin to see wisdom in risky strategies."
Current economy state can be called following Paul McCulley a "stable disequilibrium" very similar
to a state a sand pile. All this pile of stocks, debt instruments, derivatives, credit
default swaps and God know corresponds to a pile of sand that is on the verse of losing stability.
Each financial player works hard to maximize their own personal outcome but the "invisible hand" effect
in adding sand to the pile that is increasing systemic instability. According to Minsky, the longer
such situation continues the more likely and violent an "avalanche".
The late Hunt Taylor wrote, in 2006:
"Let us start with what we know. First, these markets look nothing like anything I've ever encountered
before. Their stunning complexity, the staggering number of tradable instruments and their interconnectedness,
the light-speed at which information moves, the degree to which the movement of one instrument triggers
nonlinear reactions along chains of related derivatives, and the requisite level of mathematics necessary
to price them speak to the reality that we are now sailing in uncharted waters.
"... I've had 30-plus years of learning experiences in markets, all of which tell me that
technology and telecommunications will not do away with human greed and ignorance. I think
we will drive the car faster and faster until something bad happens. And I think it will come, like
a comet, from that part of the night sky where we least expect it."
Banking was once a dangerous profession. In Britain, for instance, bankers faced
“unlimited liability”--that is, if you ran a bank, and the bank couldn’t repay depositors or other
creditors, those people had the right to confiscate all your personal assets and income until you
repaid. It wasn’t until the second half of the nineteenth century that Britain established
limited liability for bank owners. From that point on, British bankers no longer assumed
much financial risk themselves.
In the United States, there was great experimentation with banking during the 1800s, but those
involved in the enterprise typically made a substantial commitment of their own capital. For
example, there was a well-established tradition of “double liability,” in which stockholders were
responsible for twice the original value of their shares in a bank. This encouraged stockholders
to carefully monitor bank executives and employees. And, in turn, it placed a lot of pressure on
those who managed banks. If they fared poorly, they typically faced personal and professional ruin.
The idea that a bank executive would retain wealth and social status in the event of a self-induced
calamity would have struck everyone--including bank executives themselves--as ludicrous.
Enter, in the early part of the twentieth century, the Federal Reserve. The Fed was founded in
1913, but discussion about whether to create a central bank had swirled for years. “No one can carefully
study the experience of the other great commercial nations,” argued Republican Senator Nelson Aldrich
in an influential 1909 speech, “without being convinced that disastrous results of recurring financial
crises have been successfully prevented by a proper organization of capital and by the adoption of
wise methods of banking and of currency”--in other words, a central bank. In November 1910, Aldrich
and a small group of top financiers met on an isolated island off the coast of Georgia. There, they
hammered out a draft plan to create a strong central bank that would be owned by banks themselves.
What these bankers essentially wanted was a bailout mechanism for the aftermath of speculative
crashes -- something more durable than J.P. Morgan, who saved the day in the Panic of 1907
but couldn’t be counted on to live forever. While they sought informal government backing and substantial
government financial support for their new venture, the bankers also wanted it to remain free of
government interference, oversight, or control.
Another destabilizing fact is so called myth of invisible hand which is closely related to the myth
about market self-regulation. The misunderstood argument of Adam Smith , the founder of modern
economics, that free markets led to efficient outcomes, “as if by an invisible hand” has played a central
role in these debates: it suggested that we could, by and large, rely on markets without government
intervention. About "invisible hand" deification, see
The Invisible Hand, Trumped by Darwin - NYTimes.com.
The moment in the financial system when the quantity of debt turns into quality and produces yet
another financial crisis is called Minsky moment. In other words the “Minsky moment” is the time
when an unsustainable financial boom turns into uncontrollable collapse of financial markets (aka
financial crash). The existence of Minsky moments is one of the most important counterargument against
financial market self-regulation. It also expose free market fundamentalists such as "former
Maestro" Greenspan as charlatans. Greenspan actually implicitly admitted that he is and that it was
he, who was the "machinist" who helped to bring the USA economic train off the rails in 2008
via deregulation and dismantling the New Deal installed safeguards.
Here how it is explained by Stephen Mihm in
Boston Globe in 2009
in the after math of 2008 financial crisis:
“Minsky” was shorthand for Hyman Minsky, an American macroeconomist who died over a decade
ago. He predicted almost exactly the kind of meltdown that recently hammered the global
economy. He believed in capitalism, but also believed it had almost a genetic weakness.
Modern finance, he argued, was far from the stabilizing force that mainstream economics
portrayed: rather, it was a system that created the illusion of stability while simultaneously
creating the conditions for an inevitable and dramatic collapse.
In other words, the one person who foresaw the crisis also believed that our whole financial system
contains the seeds of its own destruction. “Instability,” he wrote, “is an inherent and inescapable
flaw of capitalism.”
Minsky believed it was possible to craft policies that could blunt the collateral damage caused
by financial crises. As economists re-embrace Minsky’s prophetic insights, it is far from clear that
they’re ready to reckon with the full implications of what he saw.
Minsky theory was not well received due to powerful orthodoxy, born in the years after World War
II, known as the neoclassical synthesis. The older belief in a self-regulating, self-stabilizing
free market had selectively absorbed a few insights from John Maynard Keynes, the great economist
of the 1930s who wrote extensively of the ways that capitalism might fail to maintain full employment.
Most economists still believed that free-market capitalism was a fundamentally stable basis for an
economy, though thanks to Keynes, some now acknowledged that government might under certain circumstances
play a role in keeping the economy - and employment - on an even keel.
Economists like Paul Samuelson became the public face of the new establishment; he and others
at a handful of top universities became deeply influential in Washington. In theory, Minsky could
have been an academic star in this new establishment: Like Samuelson, he earned his doctorate in
economics at Harvard University, where he studied with legendary Austrian economist Joseph Schumpeter,
as well as future Nobel laureate Wassily Leontief.
But Minsky was cut from different cloth than many of the other big names. The descendent of immigrants
from Minsk, in modern-day Belarus, Minsky was a red-diaper baby, the son of Menshevik socialists.
While most economists spent the 1950s and 1960s toiling over mathematical models, Minsky pursued
research on poverty, hardly the hottest subfield of economics. With long, wild, white hair, Minsky
was closer to the counterculture than to mainstream economics. He was, recalls the economist L. Randall
Wray, a former student, a “character.”
So while his colleagues from graduate school went on to win Nobel prizes and rise to the top of
academia, Minsky languished. He drifted from Brown to Berkeley and eventually to Washington University.
Indeed, many economists weren’t even aware of his work. One assessment of Minsky published in 1997
simply noted that his “work has not had a major influence in the macroeconomic discussions of the
last thirty years.”
Yet he was busy. In addition to poverty, Minsky began to delve into the field of finance, which
despite its seeming importance had no place in the theories formulated by Samuelson and others. He
also began to ask a simple, if disturbing question: “Can ‘it’ happen again?” - where “it” was, like
Harry Potter’s nemesis Voldemort, the thing that could not be named: the Great Depression.
In his writings, Minsky looked to his intellectual hero, Keynes, arguably the greatest economist
of the 20th century. But where most economists drew a single, simplistic lesson from Keynes - that
government could step in and micromanage the economy, smooth out the business cycle, and keep things
on an even keel - Minsky had no interest in what he and a handful of other dissident economists came
to call “bastard Keynesianism.”
Instead, Minsky drew his own, far darker, lessons from Keynes’s landmark writings, which dealt
not only with the problem of unemployment, but with money and banking. Although Keynes had never
stated this explicitly, Minsky argued that Keynes’s collective work amounted to a powerful argument
that capitalism was by its very nature unstable and prone to collapse. Far from trending toward some
magical state of equilibrium, capitalism would inevitably do the opposite. It would lurch over a
This insight bore the stamp of his advisor Joseph Schumpeter, the noted Austrian economist now
famous for documenting capitalism’s ceaseless process of “creative destruction.” But Minsky spent
more time thinking about destruction than creation. In doing so, he formulated an intriguing theory:
not only was capitalism prone to collapse, he argued, it was precisely its periods of economic stability
that would set the stage for monumental crises.
Minsky called his idea the “Financial Instability Hypothesis.” In the wake of a depression, he
noted, financial institutions are extraordinarily conservative, as are businesses. With the borrowers
and the lenders who fuel the economy all steering clear of high-risk deals, things go smoothly: loans
are almost always paid on time, businesses generally succeed, and everyone does well. That success,
however, inevitably encourages borrowers and lenders to take on more risk in the reasonable hope
of making more money. As Minsky observed, “Success breeds a disregard of the possibility of failure.”
As people forget that failure is a possibility, a “euphoric economy” eventually develops, fueled
by the rise of far riskier borrowers - what he called speculative borrowers, those whose income would
cover interest payments but not the principal; and those he called “Ponzi borrowers,” those whose
income could cover neither, and could only pay their bills by borrowing still further. As these latter
categories grew, the overall economy would shift from a conservative but profitable environment to
a much more freewheeling system dominated by players whose survival depended not on sound business
plans, but on borrowed money and freely available credit.
Once that kind of economy had developed, any panic could wreck the market. The failure of a single
firm, for example, or the revelation of a staggering fraud could trigger fear and a sudden, economy-wide
attempt to shed debt. This watershed moment - what was later dubbed the “Minsky moment” - would create
an environment deeply inhospitable to all borrowers. The speculators and Ponzi borrowers would collapse
first, as they lost access to the credit they needed to survive. Even the more stable players might
find themselves unable to pay their debt without selling off assets; their forced sales would send
asset prices spiraling downward, and inevitably, the entire rickety financial edifice would start
to collapse. Businesses would falter, and the crisis would spill over to the “real” economy that
depended on the now-collapsing financial system.
From the 1960s onward, Minsky elaborated on this hypothesis. At the time he believed that this
shift was already underway: postwar stability, financial innovation, and the receding memory of the
Great Depression were gradually setting the stage for a crisis of epic proportions. Most of what
he had to say fell on deaf ears. The 1960s were an era of solid growth, and although the economic
stagnation of the 1970s was a blow to mainstream neo-Keynesian economics, it did not send policymakers
scurrying to Minsky. Instead, a new free market fundamentalism took root: government was the problem,
not the solution.
Moreover, the new dogma coincided with a remarkable era of stability. The period from the late
1980s onward has been dubbed the “Great Moderation,” a time of shallow recessions and great resilience
among most major industrial economies. Things had never been more stable. The likelihood that “it”
could happen again now seemed laughable.
Yet throughout this period, the financial system - not the economy, but finance as an industry
- was growing by leaps and bounds. Minsky spent the last years of his life, in the early 1990s, warning
of the dangers of securitization and other forms of financial innovation, but few economists listened.
Nor did they pay attention to consumers’ and companies’ growing dependence on debt, and the growing
use of leverage within the financial system.
By the end of the 20th century, the financial system that Minsky had warned about had materialized,
complete with speculative borrowers, Ponzi borrowers, and precious few of the conservative borrowers
who were the bedrock of a truly stable economy. Over decades, we really had forgotten the meaning
of risk. When storied financial firms started to fall, sending shockwaves through the “real” economy,
his predictions started to look a lot like a road map.
“This wasn’t a Minsky moment,” explains Randall Wray. “It was a Minsky half-century.”
Minsky is now all the rage. A year ago, an influential Financial Times columnist confided to readers
that rereading Minsky’s 1986 “masterpiece” - “Stabilizing an Unstable Economy” - “helped clear my
mind on this crisis.” Others joined the chorus. Earlier this year, two economic heavyweights - Paul
Krugman and Brad DeLong - both tipped their hats to him in public forums. Indeed, the Nobel Prize-winning
Krugman titled one of the Robbins lectures at the London School of Economics “The Night They Re-read
Today most economists, it’s safe to say, are probably reading Minsky for the first time, trying
to fit his unconventional insights into the theoretical scaffolding of their profession. If Minsky
were alive today, he would no doubt applaud this belated acknowledgment, even if it has come at a
terrible cost. As he once wryly observed, “There is nothing wrong with macroeconomics that another
depression [won’t] cure.”
But does Minsky’s work offer us any practical help? If capitalism is inherently self-destructive
and unstable - never mind that it produces inequality and unemployment, as Keynes had observed -
After spending his life warning of the perils of the complacency that comes with stability - and
having it fall on deaf ears - Minsky was understandably pessimistic about the ability to short-circuit
the tragic cycle of boom and bust. But he did believe that much could be done to ameliorate the damage.
To prevent the Minsky moment from becoming a national calamity, part of his solution (which was
shared with other economists) was to have the Federal Reserve - what he liked to call the “Big Bank”
- step into the breach and act as a lender of last resort to firms under siege. By throwing lines
of liquidity to foundering firms, the Federal Reserve could break the cycle and stabilize the financial
system. It failed to do so during the Great Depression, when it stood by and let a banking crisis
spiral out of control. This time, under the leadership of Ben Bernanke - like Minsky, a scholar of
the Depression - it took a very different approach, becoming a lender of last resort to everything
from hedge funds to investment banks to money market funds.
Minsky’s other solution, however, was considerably more radical and less palatable politically.
The preferred mainstream tactic for pulling the economy out of a crisis was - and is - based on the
Keynesian notion of “priming the pump” by sending money that will employ lots of high-skilled, unionized
labor - by building a new high-speed train line, for example.
Minsky, however, argued for a “bubble-up” approach, sending money to the poor and unskilled
first. The government - or what he liked to call “Big Government” - should become the “employer of
last resort,” he said, offering a job to anyone who wanted one at a set minimum wage. It
would be paid to workers who would supply child care, clean streets, and provide services that would
give taxpayers a visible return on their dollars. In being available to everyone, it would be even
more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone
who was able to work. Such a program would not only help the poor and unskilled, he believed, but
would put a floor beneath everyone else’s wages too, preventing salaries of more skilled workers
from falling too precipitously, and sending benefits up the socioeconomic ladder.
While economists may be acknowledging some of Minsky’s points on financial instability, it’s safe
to say that even liberal policymakers are still a long way from thinking about such an expanded role
for the American government. If nothing else, an expensive full-employment program would veer far
too close to socialism for the comfort of politicians. For his part, Wray thinks that the critics
are apt to misunderstand Minsky. “He saw these ideas as perfectly consistent with capitalism,” says
Wray. “They would make capitalism better.”
But not perfect. Indeed, if there’s anything to be drawn from Minsky’s collected work, it’s that
perfection, like stability and equilibrium, are mirages. Minsky did not share his profession’s quaint
belief that everything could be reduced to a tidy model, or a pat theory. His was a kind of existential
economics: capitalism, like life itself, is difficult, even tragic. “There is no simple answer to
the problems of our capitalism,” wrote Minsky. “There is no solution that can be transformed into
a catchy phrase and carried on banners.”
It’s a sentiment that may limit the extent to which Minsky becomes part of any new orthodoxy.
But that’s probably how he would have preferred it, believes liberal economist James Galbraith. “I
think he would resist being domesticated,” says Galbraith. “He spent his career in professional isolation.”
The positive feedback loop in inherent the environment dominated by large transnationals
which funnel their excess cash into the financial system to speculate on asset appreciation.
As analysis in "The
Endless Crisis" suggests ( updating the classic 1960s analysis of the U.S. economy given by Paul
Sweezy and Paul Baran in "Monopoly Capital.") that the global economy is controlled by large
oligopolistic firms. Which boost their profits by lowering their costs and suppressing wages(on global
scale), using computerization, automation and relocating production to cheap-labor countries such
as China. Wage suppression in turn created permanent weak global demand. Which in turn dry
ups investment opportunities in expansion of existing manufacturing facilities. That forces transnationals
to funnel their excess cash into the financial system to speculate on asset appreciation. As
a result we have "permanent recession" punctuated by boom and bust cycles in financial markets.
Nature of leverage is such that it always represent a positive feedback loop. And leverage
is the essence of
banking operations. In the absence of negative control loops in a form of regulation,
purges, exiles, etc, financial system eventually loses stability which demonstrate itself in financial
crisis. Deep financial crisis often are followed by stagnation and can turn into social crisis.
The economy finds itself in a "stagnation-financialization trap" in which the only way to stimulate
growth is through the financialization process which leads to the next bubble and the next financial
crisis. Policy makers in Western countries are ready and willing to lead the world off this
cliff: "Restoring the conditions for finance-led expansion has now become the immediate object of
economic policy in the face of a persistently stagnation-prone real economy."(Foster and McChesney,
p 47). The authors add, "Not only have financial crises become endemic, they have also been growing
in scale and global impact." (Foster and McChesney, 43)
It is very difficult to gain a greater understanding of the broad social forces at play that
are shaping the financial sector, but self-destructing tendencies of the latter can be established
beyond reasonable doubt. And the problem here is not with people, although, again, I would
like to stress that a lot of financial actors are as close to psychopaths/sociopaths as one
can get. But people are better then institutions as Prince Kropotkin once remarked. The problem
is with reshaping of institutions via weakening of regulations (up to the total absence of thereof).
Regulations represent genome that guides growth and proliferation of organizational entities much
like cells in human organism. Bad genome creates cancer cells that kills the host. This
analogy with financial sector converting into cancer under a weak regulatory regime is less superficial
that one might think from the first sight. Some see the cycle in which financial sector undermines
economy the following way:
Boost Phase of Credit Expansion. Banks became dominant political force and start to
dictate the government policy.
Deregulation. Banks create for the themselves the "most favorable entity" regime including
access to government funds and taxation. Here revolving door greatly helps (see
Corruption of Regulators)
Overextended Credit Expansion and Over Capacity (dot-com bubble)
Growing Malinvestment ( there are no alternatives and one burst bubble is simply replaced
by the next. For example, dot-com bubble with the housing bubble in the case of the USA)
Impaired Debt and Policy Decisions, such as bailout of TBTF at taxpayer expense and
great cost for the economy. Please note that at this point banks have total political control,
so they essentially bail themselves out at the expense of the society.
Stalled Consumption due to shrinking of middle class and high structural unemployment.
The growing bills are passed on plebs. Cheap Money are Offered as the only Panacea Available.
Shrinking Loans and another round of Bank Speculation, this time in natural resources.
Search for Yield from Shrinking Pool of Productive Assets. Increasingly speculative
investments with high risk
Stagnation - Over-indebted economy, massive overcapacity with limited growth.
The growth of nationalism and protectionism (ref. 1920's -> 1930's). Military Keynesianism.
Oligarchy don't hesitate to sacrifice millions of plebeians in the subsequent wars that always
In financial markets, socially-responsible, rational behavior isn’t optimal. That makes
reckless, self and society endangering behavior not a deviation, but a norm. That makes finance a
close relative to organized crime. In this respect Jefferson famous quote "I believe that banking
institutions are more dangerous to our liberties than standing armies" is really prophetic.
Instability is an immanent feature of dynamic systems with positive feedback loops. Financial
sector introduces a dangerous positive feedback loop into economy precipitating bubbles and subsequent
crisis. Despite artful packaging, the banking industry game is very simple, namely, they
take outsized, leveraged risks and when they work out, pay themselves handsome rewards, and when
they don’t, dump them on the taxpayer. That's why asJohn Kenneth Galbraith aptly noted "Finance
is the Achilles' heel of capitalism." While there are multiple levels and multiple meaning
on each level of this statement, instability of dynamic systems with positive feedback
loops is a fundamental property of such systems and it cannot be changed by any superficial
measures not related to the strength of feedback loop.The "inherently procyclical"
nature of the financial systemimplies thatthat perceptions of value and risk develop in parallel. Bankers always suffer from a blindness
to future dangers that are intrinsic to the system because that stand in a way of getting outsized
profits. The better the economy is doing, the higher the ratings issued by the rating agencies,
the laxer the guidelines for approving credit, the easier it becomes to borrow money and the greater
the willingness to assume risk.
Wall Street execs have been whining for two years that to reduce pay incentives and bonuses
would cost the firms their best talent. The government’s response should be YES! That’s precisely
the idea. Finance was once a means to an end: the growth of the real economy. Banking once served
industry and services. Now finance has become the end, and the real economy is subservient
to financial services (it’s no surprise that after the crisis, over-the-counter derivatives
trading quickly climbed back up to more than $600 trillion). “At some point in our recent past,
finance lost contact with its raison d’être,” European Central Bank chief Jean Claude Trichet
said earlier this year. “Finance developed a life of its own…Finance became self-referential.”
Computers brought innovations into financial markets, but at the same time greatly strengthened
and enhanced positive feedback loops inherent in financial sector. In other words
they make financial players much more dangerous for society then before. Our present system
could not exist without Web-based brokers, indexes, CDO’s, tranches, MERS, high speed trading. Computers
also have allowed dramatic increase of complexity, which often is used to hide the most dangerous
and the most reckless behavior of financial players. Computers are become an integral part of the
feedback and add gain (amplification) to the loop. The gain from computers is not bad by itself but
the trend to remove all controls or attenuations while adding this gain is bound to cause instability.
HFT seems to me one of the more obvious and stupid examples.
Complexity and luck of transparency are central to financial services firm rent seeking.
Those opportunities dramatically increases with computerization of finance and invention of complex
financial instruments. It is interesting that other industries can be allowed to teeter and
fall - steel, railroads, automobiles - but banks are considered sacrosanct. If they are, then
they should be public utilities, but good luck with this idea in captured Congress.
Megabanks automatically become an instrument for acquiring and keeping political influence
for its management ("silent coup"). Financial sector became viewed by the elite as a
solution to stagnation of industrial production and the way to fend of international competitors
playing of the US role of suppliers of global currency. As a result financial sector became a formidable
political force. Like senator Durbin put it:
And the banks -- hard to believe in a time when we're facing a banking crisis that many of
the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the
That compensates their inefficiency in internal market. Investment banks understand pretty well
that the best investment with highest return is an investment in political capital.
Saving oversized banks, however, may ruin a country’s public finances (Gros
and Micossi 2008). Take the example of Ireland; this country provided extensive financial
support to its large banks and subsequently had to seek financial assistance from the EU and the
IMF in 2010. The public finance risks posed by systemically large banks suggest that such banks
should be reduced in size.
Further evidence against big banks can be found from studies on banking technologies. Berger
and Mester (1997) estimate the returns to scale in US banking using data from the 1990s, to find
that a bank’s optimal size, consistent with lowest average costs, would be for a bank with around
$25 billion in assets. Amel et al. (2004) similarly report that commercial banks in North
America with assets in excess of $50 billion have higher operating costs than smaller banks. These
findings together suggest that today’s large banks, with assets in some instances exceeding $
1 trillion, are well beyond the technologically optimal scale.
Flawed incentives. The relationship between the rating agencies and big banks is a perfect
case study of flawed incentives and positive feedback loop within financial sector. Agencies
were unduly influenced (aka "were puppets of") by the institutions whose products they were grading.
Financial markets never play a purely passive role; they seek a political role and always
try to actively affect so-called fundamentals they are supposed to reflect. Their lobbying
efforts and regulatory capture are part of positive feedback loop that increases risks and
instability of the financial system. They tend to convert economy into what is using analogy
with military industrial complex can be called the crony capitalist financial-regulatory complex.That means that the necessary contraction of hypertrophied financial sector requires difficult
political changes which captured political establishment is unable to pursue on their own, so changes
often come packaged with violence. As Soros stated:
"These two functions that financial markets perform work in opposite directions. In
the passive or cognitive function, the fundamentals are supposed to determine market prices. In
the active or manipulative function market, prices find ways of influencing the fundamentals.
When both functions operate at the same time, they interfere with each other. The supposedly independent
variable of one function is the dependent variable of the other, so that neither function has
a truly independent variable. As a result, neither market prices nor the underlying reality is
fully determined. Both suffer from an element of uncertainty that cannot be quantified.
I call the interaction between the two functions reflexivity. Frank Knight recognized
and explicated this element of unquantifiable uncertainty in a book published in 1921,
but the Efficient Market Hypothesis and Rational Expectation Theory have deliberately ignored
it. That is what made them so misleading."
The Fiat-based currencies has additional built-in instability risks in comparison with gold
based currencies. This is not to say that gold based currencies are better. But the
ability of the US to run record current-account deficits over the past several decades is one such
effect, the effect impossible in gold standard currency environment and the US political elite (Republican
and Democrats alike) became increasingly comfortable with overconsumption. (The
World’s Financial System Has Become Unstable):
Leading Bush administration officials used to talk of the US current-account deficit being
a “gift” to the outside world. But, honestly, the US has been overconsuming – living far beyond
its means – for the past decade. The idea that tax cuts would lead to productivity gains and would
pay for themselves (and fix the budget) has proved entirely illusory. ...
[T]he net flow of capital is from emerging markets to the US – this is what it means to have
current-account surpluses in emerging markets and a deficit in the US. But the gross flow of capital
is from emerging market to emerging market, through big banks now implicitly backed by the state
in both the US and Europe. From the perspective of international investors, banks that are “too
big to fail” are the perfect places to park their reserves – as long as the sovereign in question
remains solvent. But what will these banks do with the funds?
When a similar issued emerged in the 1970’s – the so-called “recycling of oil surpluses” –
banks in Western financial centers extended loans to Latin America, communist Poland, and communist
Romania. That was not a good idea, as it led to a massive (for the time) debt crisis in 1982.
We are now heading for something similar, but on a larger scale. The banks and other financial
players have every incentive to load up on risk as we head into the cycle; they get the upside
(Wall Street compensation this year is set to break records again) and the downside goes to taxpayers.
Financial deregulation logically leads to over-trading and under-investment creating bubbles
and converting the economy into casino capitalism. The recent the ‘flash crash’ as a clear example
of the bubble and subsequent fragility such over-trading can create. Excessive trading in securities
increases instability of the economic system and creates perverted incentives for many economic actors.
The effect is similar to how drugs and alcohol chemically alter the personality, increasing the value
of instant gratification. As Hyman Minsky noted:
“In a world of businessmen and financial intermediaries who aggressively seek profit, innovators
will always outpace regulators; the authorities cannot prevent changes in the structure of portfolios
from occurring. What they can do is keep the asset-equity ratio of banks within bounds by setting
equity-absorption ratios for various types of assets. If the authorities constrain banks and are
aware of the activities of fringe banks and other financial institutions, they are in a better
position to attenuate the disruptive expansionary tendencies of our economy.”
-- Hyman Minsky, 1986
Growth of inequality connected with emergence of hypertrophied financial sector is another
positive feedback loop. Outsized pay in financial sector attracts talent and this talent
is used for destructive (or at least non-constructive) purposes. This is the situation similar to
the poor countries problem with mafia. What is so destabilizing isn’t just the high guaranteed pay
if you can break in (even though that is a huge part of it) but the allure of obscene sums of money
if you can make it to the top.
The share of US national income going to the top 1 per cent of the income distribution has risen
from 15 to 25 per cent over the past decade, mostly because of the growth in size and profitability
of the financial sector. This payments to the top percentile is a tax paid by the population (similar
to what population paid to royalty and church in middle ages) as a whole for the questionable
benefits of living in the casino capitalism economy. While the key to growth of inequality was financial
sector it also complemented by several additional trends:
Dramatic increase of renumeration of top management in all types of companies : by
increasing number of sociopath in higher echelons of financial institutions and second by destroying
morale of the firm which makes reckless moves more probable.
Due to regulatory capture. Concentrated wealth makes it easier to buy deregulation
to free itself up even more. At the same time concentrated wealth of financial sector finds fewer
productive investment outlets and naturally migrates into destructive speculation, including creating
huge speculative global capital flows. A positive feedback loop in which increase of income inequality
increase "financization" of the economy looks like:
Increase of income inequality ->
Inadequate effective demand in non-financial economy ->
Inadequate investment opportunities in non-financial economy ->
Investments flowing into parasitic financial “creativity”...
Regulatory capture, especially complete capture of the Fed (with NY Fed widely considered
to be a branch of Goldman Sachs) and SEC nullifies enforcement and creates another positive
feedback loop. "Revolving doors" provide an excellent opportunity to buy influence without overt
corruption. One recent example is Peter Orzag accepting position in Citi (Why
Citigroup) And that means that while on the job ambitious people might try to avoid to aggravate
banks. But without strong regulatory oversight banks very quickly convert themselves into wonder
machines that provides astronomic returns to brass and selected employees, high returns to
creditors, while at the end of each cycle causing huge losses to taxpayers. Banks must keep up
with their competitors, and if one does some wonder trick with somebody else money, they all must
do it to stay in business. That is why regulation is so vital in this highly competitive sector.
One cannot be virtuous as a commercial entity with obligations to shareholders and customers under
brothel rules. That why Greenspan
as an apostle of deregulation was so destructive for the US economy. This is another positive feedback
loop that feeds on itself. In search of profits which became more scares as financization takes life
out of real economy, financial firms are prone to subvert safeguards and endanger the very society
in which they operate ("financial terrorism effect". Wealth permits financial sector
to remove "sand in the wheels": vital for stability negative feedback loops in form of regulation
and, what is actually more important, strict law enforcement of existing regulations. Here
is a quote from Yves Smith post
Should the Fed Be Independent-
But there has been another thread mixed in with this: resentment at the Fed salvaging the banking
industry, with contingent and real costs, in the form of higher inflation, per
Alford’s and Leijonhufvud’s analysis. Now that many of those actions may indeed have been
the best among a set of bad choices (although I suspect economic historians will conclude the
Fed cut rates too far too fast). However, the big issue is that they involved consequences of
such magnitude that they should not have been left to the Fed. I was amazed, and was not alone,
when Congress did not dress down the Fed in its hearings on the Bear rescue for the central bank’s
unauthorized encroachment into fiscal action (ie., if any of the $29 billion in liabilities assumed
by the Fed in that rescue comes a cropper, the cost comes from the public purse). So the frustration
isn’t merely about outcomes, it’s about process, about the sense of disenfranchisement. And that
will only get worse as this crisis grinds along.
The proliferation of speculative side bets in the form of naked credit default swaps and other
derivatives can have significant negative effects on economic fundamentals such as the terms of financing,
the patterns of project selection, and the incidence of corporate and sovereign default. The
existence of zero-sum side bets on default has major economic repercussions. It has strangulating
effect starving real economy of funds as investors who are optimistic about particular company or
state instead of funding it sell protection. This diverts their capital away from potential borrowers
and channels it into collateral to support speculative positions. Naked CDSs are insurance policies
bought against some other persons property. Such as, I buy a policy against your house. Insurance
companies do not write such policies because I might decide to burn your house down. But even if
we assume that there will be no intentional damage to other’s property, we still are encouraging
diverting of funds. See
Guest Post Economic consequences of speculative side bets – The case of naked CDS « naked capitalism.
They also can create artificial demand. Conservative analyses indicates that in the peak years of
2006 and early 2007, Magnetar’s program drove the demand
for roughly 35% of subprime bonds. That fact refutes the claim that all derivatives, futures,
options and swaps are zero sum game: one person loss is another person gain.
By its nature investment banking is constantly tempted to move into grey zone and then slide
into criminal behavior. There is a profound similarity between investment bankers
and hedge funds "Masters of the Universe" and hackers. Investment bankers play a similar role in
financial system as hackers play in computer networks: they are engaged in systemic effort to undermine
existing laws and security controls. But there one important difference: investment bankers are often
obscenely rich and can buy themselves freedom after being caught. That's why criminal law should
consider financial sector crimes similar to the organized crime. "Algorithmic Terrorism”
( HFT) is one example (Nanex
- Market Crop Circle Of The Day). Nobody went to jail (yet). When you see the kind of losses
we have seen on AAA rated securities for example it is almost certainly there was there was some
kind of fraud involved. In fact growth of investment banking tend to be accompanied by large scale
fraud so this would not be unusual.
Tremendous political power that finance sector acquired due to outsized profits is channeled
toward lobbing that is socially and economically disruptive. Externalities produced by
unregulated banking sector are dangerous for society, but at the same time political power of the
financial sector created a lock in which prevents any meaningful correction. Classic Greek Tragedy
necessary follows. Regulators – and their superiors in the legislative and executive branches
– were captured both intellectually and via implicit form of corruption known as revolving doors.
"To a surprising degree, economic misfortune has correlated with low top marginal tax rates. The
top marginal tax rate at the time of the 1929 crash was 24%. After his election, Roosevelt promptly
raised it to 63% and then to 94%, and one could easily make the case that it was this rise, rather
than financial regulation, that played the primary — though certainly not the only — role in curbing
abuses by attacking greed at its source, without, by the way, damaging the economy. Roosevelt essentially
taxed away big money."
Disincentivizing greed - Page 3 - Los Angeles Times
For financial sector stability is destabilizing. Minsky financial instability hypothesis
can be simplified to the general statement that in any economy with large financial sectorstability is destabilizing as financial firms try to exploit the stable regime to extract
additional profit by increasing leverage and making excessively risky bets which serves as a tax
on real economy, strangulating it and creating the necessity for even more risky bets and higher
leverage. In the latter case large firms also implicitly transfer their risks to larger society (via
The cost of financial intermediation is ultimately a tax on commerce.Outsized,
predatory financial services sector poses real danger to viable businesses, to business expansion,
and to general economic productivity. Large part of activity of financial sector, especially
connected with securitized products, futures, options and derivatives is parasitic: "Banks tend to
make profits – or more accurately, extract rents – out of all proportion to any contribution they
make to the wider economy." Excessive rents weaken the real economy similar to cases
when parasite weakens the host (The
Banking Oligarchy Must Be Restrained For a Recovery to Be Sustained ). In addition to the
overhang of unindicted and undeclared fraud which is widespread due to regulatory capture, distorting
the clearing of the markets, an oversized financial sector essentially make the sum of government
tax and Wall street tax a real drag on the economy. The percentage of financial sector profits to
corporate profits recently peaked at 41%. This suggests that the scope of parasitic financial activity
is a real killer for the economy.
Weakly regulated banks tend to become classic cases of market failure and their employees
at the senior level have basically become the biggest bank robbers of all time. This tremendous
transfer of wealth is inherent in growth of financial sector. The best way to rob bank is to own
Academia serves as the Fifth column of the financial sector. The financial system can
brainwash society via control of corrupt academia in classic Lysenkoism scenario. Here is relevant
quote from The Quiet
Wall Street’s seductive power extended even (or especially) to finance and economics
professors, historically confined to the cramped offices of universities and the pursuit of Nobel
Prizes. As mathematical finance became more and more essential to practical finance, professors
increasingly took positions as consultants or partners at financial institutions. Myron Scholes
and Robert Merton, Nobel laureates both, were perhaps the most famous; they took board seats at
the hedge fund Long-Term Capital Management in 1994, before the fund famously flamed out at the
end of the decade. But many others beat similar paths. This migration gave the stamp of academic
legitimacy (and the intimidating aura of intellectual rigor) to the burgeoning world of high finance.
Reaganomics (and later Rubonomics) confused ends with means... As Stiglitz noted,
. ... a financial sector is a means to a more productive economy, not an end in itself. (Financial
a better measure of well-being). Attempt to convert the USA into new Switzerland on the
strength of dollar as a reserve currency was doomed from the beginning due to the country size constrains.
Highly leveraged economies are prone to deep and prolong crisis. "The lesson of history,
then, is that even as institutions and policy makers improve there will always be a temptation to
stretch the limits. ... If there is one common theme to the vast range of crises ... it is that excessive
debt accumulation, whether it be by the government, banks, corporations, or consumers, often poses
greater systemic risks than it seems during a boom. ... Highly indebted governments, banks, or corporations
can seem to be merrily rolling along for an extended period, when bang -- confidence collapses, lenders
disappear and a crisis hits. ... Highly leveraged economies ... seldom survive forever ... history
does point to warnings signs that policy makers can look to access risk -- if only they do not become
too drunk with their credit bubble-fueled success and say, as their predecessors have for centuries,
'This time is different' Carmen Reinhart and Kenneth Rogoff (cited from
The first thing to understand is that attempt to weaken positive feedback looks via regulation, approach
that can be called “regulation as a Swiss knife” does not work without law enforcement and criminal
liability for bankers, as there is an obvious problem of corruption of regulators. In this sense the
mechanism of purges might be the only one that realistically can work.
In other words it’s unclear who and how can prevents the capture of regulators as financial sector
by definition has means to undermine any such efforts. One way this influence work is via lobbing for
appointment of pro-financial sector people in key positions. If such "finance-sector-selected" Fed chairman
does not like part of Fed mandate related to regulation it can simply ignore it as long as he is sure
that he will be reappointed. That happened with Greenspan. After such process started it became
irreversible and only after a significant, dramatic shock to the system any meaningful changes can be
instituted and as soon as the lessons are forgotten work on undermining them resumes.
In essence, the Fed is a political organization and Fed Chairman is as close to a real vice-president
of the USA as one can get. As such Fed Chairman serves the elite which rules that country, whether
you call them financial oligarchy or some other name. Actually Fed Chairman is the most powerful unelected
official in the USA. If you compare this position to the role of the Chairman of the Politburo
in the USSR you’ll might find some interesting similarities.
In other words it is impossible to prevent appointment of another Greenspan by another Reagan without
changes in political power balance. And the transition to banana republic that follows such appointment
is irreversible even if the next administration water boards former Fed Chairman to help him to write
his memoirs. That means that you need to far-reaching reform of political system to be able to
regulate financial industry and you need to understand that the measures adopted need vigilant protection
as soon as the current crisis is a distant history.
Several other source of financial instability were pointed out by others:
The logic of markets gets extended to “fictitious commodities” – land, labor, and money.Polanyi (1944) famously zeroed in on the way that the logic of markets gets extended to
“fictitious commodities” – land, labor, and money – and the way that society reacts defensively
to that illegitimate extension. Today, arguably, it is the logic of finance that has been so extended,
turning everything it touches into an asset with a speculative price.
Excessive accumulations of financial wealth – “other people’s money” – tend to undermine democratic
political forms.Brandeis (1914) thought that excessive accumulations of financial
wealth – “other people’s money” – tend to undermine democratic political forms (among other
problems). Today, arguably TBTF financial institution threaten democracy.
There are some outstanding lectures and presentation on YouTube on this topic. Among them:
" As far as we all know now are quite hard times to Russia and to the world as a whole.
Why do we have these hard times ?
Could it be globalisation, western greed, and western aggression ?
Well, probably it can be more clear for those who are attacking and humiliating Russia in
all directions? The West-ZUS-UK
But I think it's just an agony of Empire seeing the world order is about to change. And
yes it's "western greed" which have a "western aggression" as a consequence.
The "globalisation" actually IS that world order which the West trying to
establish. Russia in all times in all its internal structure was a subject of annexation and
submission. But we never agreed and never will do it, until alive. The West is too stupid to
get that simple thing to know and leave us to live as we are about to.
The rapid rise of oligarchy and wealth and income inequality is the great moral, economic, and political issue of our time. Yet,
it gets almost no coverage from the corporate media.
How often do network newscasts report on the 40 million Americans living in poverty, or that we have the highest rate of childhood
poverty of almost any major nation on earth? How often does the media discuss the reality that our society today is more unequal
than at any time since the 1920s with the top 0.1% now owning almost as much wealth as the bottom 90%? How often have you heard the
media report the stories of millions of people who today are working longer hours for lower wages than was the case some 40 years
How often has ABC, CBS or NBC discussed the role that the
Koch brothers and other billionaires play in creating
a political system which allows the rich and the powerful to significantly control elections and the legislative process in Congress?
We need to ask the hard questions that the corporate media fails to ask
Sadly, the answer to these questions is: almost never. The corporate media has failed to let the American people fully understand
the economic forces shaping their lives and causing many of them to work two or three jobs, while CEOs make hundreds of times more
than they do. Instead, day after day, 24/7, we're inundated with the relentless dramas of the Trump White House, Stormy Daniels,
and the latest piece of political gossip.
We urgently need to discuss the reality of today's economy and political system, and fight to create an economy that works for
everyone and not just the one percent.
We need to ask the hard questions that the corporate media fails to ask: who owns America, and who has the political power? Why,
in the richest country in the history of the world are so many Americans living in poverty? What are the forces that have caused
the American middle class, once the envy of the world, to decline precipitously? What can we learn from countries that have succeeded
in reducing income and wealth inequality, creating a strong and vibrant middle class, and providing basic human services to everyone?
We need to hear from struggling Americans whose stories are rarely told in newspapers or television. Unless we understand the
reality of life in America for working families, we're never going to change that reality.
Until we understand that the rightwing Koch brothers are more politically powerful than the Republican National Committee, and
that big banks, pharmaceutical companies, and multinational corporations are spending unlimited sums of money to rig the political
process, we won't be able to overturn the disastrous US supreme court decision on Citizens United, move to the public funding of
elections and end corporate greed.
Until we understand that the US federal minimum wage of $7.25 an hour is a starvation wage and that people cannot make it on $9
or $10 an hour, we're not going to be able to pass a living wage of at least $15 an hour.
Until we understand that multinational corporations have been writing our trade and tax policies for the past 40 years to allow
them to throw American workers out on the street and move to low-wage countries, we're not going to be able to enact fair laws ending
the race to the bottom and making the wealthy and the powerful pay their fair share.
Until we understand that we live in a highly competitive global economy and that it is counterproductive that millions of our
people cannot afford a higher education or leave school deeply in debt, we will not be able to make public colleges and universities
Until we understand that we are the only major country on earth not to guarantee healthcare to all and that we spend far more
per capita on healthcare than does any other country, we're not going to be able to pass a Medicare for all, single-payer program.
Until we understand that the US pays, by far, the highest prices in the world for prescription drugs because pharmaceutical companies
can charge whatever price they want for life-saving medicine, we're not going to be able to lower the outrageous price of these drugs.
Until we understand that climate change is real, caused by humans, and causing devastating problems around the world, especially
for poor people, we're not going to be able to transform our energy system away from fossil fuel and into sustainable forms of energy.
We need to raise political consciousness in America and help us move forward with a progressive agenda that meets the needs of
our working families. It's up to us all to join the conversation -- it's just the beginning.
"... Since Russia has asked Lebanon for a military cooperation agreement, which I believe was intended as a warning to Israel not to attack Lebanon again - because of the threat that Syria would become involved - I suspect that Russia is well aware of Israel's intentions. ..."
"... The addition of a US base in Israel and a commitment of US forces to support Israel in their wars means that there will be an increased likelihood of US conflict with Russia if Russia intervenes in a Israeli/US attack in Lebanon which extends into Syria. ..."
Apparently Israel held a command-level war game under cover of the Cobra exercise where
they continued to plan an attack on Lebanon and Syria, as well as what to do if "the Russian
"We can achieve decisive victory over Hezbollah, and we don't need help from a single
American soldier, but we cannot fight Iran alone," he stated last year. "I consider future
cooperation with the U.S. much more important than anything we've had in the past."
Reading that in reverse supports my contention that Israel both continues to intend to
degrade Hizballah and Syria's ability to be effective actors in a US/Israel war with Iran,
and also that they intend to recruit the US in their next attack on Lebanon, with the goal of
extending that war into Syria.
And that is regardless of the Russian presence in Syria.
Since Russia has asked Lebanon for a military cooperation agreement, which I believe
was intended as a warning to Israel not to attack Lebanon again - because of the threat that
Syria would become involved - I suspect that Russia is well aware of Israel's
The addition of a US base in Israel and a commitment of US forces to support Israel in
their wars means that there will be an increased likelihood of US conflict with Russia if
Russia intervenes in a Israeli/US attack in Lebanon which extends into Syria.
I don't think Russia would come to Lebanon's aid directly in support of Hizballah, but
it's quite likely Russia would intervene if that war extended into Syria. Russia doesn't have
the forces in country in Syria to directly intervene militarily but it could add additional
forces or use its regional capabilities to intervene enough to complicate Israeli/US actions
in Syria. But not without increasing the probability of escalation to a dangerous degree.
If Israel is not persuaded to stand down on its intentions to attack Hizballah and Syria,
things could get much more ugly than the present Syrian crisis.
former Playboy model who says she had an affair with President Trump is suing the National
Enquirer's parent company, American Media, so that she can be released from a legal agreement
barring her from discussing the relationship.
Karen McDougal filed the suit in Los Angeles Superior Court, according to the New
York Times , after she claims the Enquirer paid her $150,000 for the story of her
nine-month-long affair between 2006 and 2007, but did not publish it when she gave the account
in August 2016, several months before the 2016 U.S. election.
McDougal says that Trump's personal attorney, Michael D. Cohen, was secretly involved in her
negotiations with A.M.I., and that both the media company and her lawyer at the time misled her
about the arrangement. After speaking with The New Yorker last month after it obtained notes
she kept on her alleged affair, McDougal said she was warned by A.M.I. that " any further
disclosures would breach Karen's contract," and "cause considerable monetary damages ."
paid another Trump accuser, adult film actress Stephanie Clifford (aka Stormy Daniels),
$130,000 in exchange for signing an NDA barring her from discussing her experiences with
Trump joined a legal effort last week suing Clifford for $20 million over what they claim is
a breach of her NDA. Meanwhile, both women's claims against Trump are being construed by
federal watchdog group Common Cause as illegal campaign contributions - arguing that they could
constitute in-kind contributions to the Trump campaign.
Ms. Clifford and Ms. McDougal tell strikingly similar stories about their experiences with
Mr. Trump, which included alleged trysts at the same Lake Tahoe golf tournament in 2006,
dates at the same Beverly Hills hotel and promises of apartments as gifts. Their stories
first surfaced in the The Wall Street Journal four days before the election, but got little
traction in the swirl of news that followed Mr. Trump's victory. The women even shared the
same Los Angeles lawyer, Keith Davidson, who has long worked for clients who sell their
stories to the tabloids. - NYT
"The lawsuit filed today aims to restore her right to her own voice," McDougal's attorney,
Peter K Stris told the Times . "We intend to invalidate the so-called contract that American
Media Inc. imposed on Karen so she can move forward with the private life she deserves ."
As the Wall Street Journal reported in November, 2016;
The tabloid-newspaper publisher reached an agreement in early August with Karen McDougal,
the 1998 Playmate of the Year. American Media Inc., which owns the Enquirer, hasn't published
anything about what she has told friends was a consensual romantic relationship she had with
Mr. Trump in 2006. At the time, Mr. Trump was married to his current wife, Melania.
Quashing stories that way is known in the tabloid world as "catch and kill." - WSJ
In a written statement, American Media Inc. claims it wasn't buying McDougal's story for
$150,000 - rather, they were buying two years' worth of her fitness columns, magazine covers
and exclusive life rights to any relationship she has had with a then-married man. "AMI has not
paid people to kill damaging stories about Mr. Trump," reads the statement.
American Media Inc. CEO David J. Pecker is a long-standing friend of President Trump.
Britain has yet to identify the assassin who tried to murder the double agent Sergei Skripal
and his daughter, Yulia, in Salisbury, England.
But Foreign Secretary Boris Johnson knows who ordered the hit.
"We think it overwhelmingly likely that it was (Russian President Vladimir Putin's)
decision to direct the use of a nerve agent on the streets of the U.K."
"Unforgivable," says Putin spokesman Dmitry Peskov of the charge, which also defies "common
sense." On Sunday, Putin echoed Peskov: "It is just sheer nonsense, complete rubbish, to think
that anyone in Russia could do anything like that in the run-up to the presidential election
and the World Cup. It's simply unthinkable."
Putin repeated Russia's offer to assist in the investigation.
But Johnson is not backing down; he is doubling down.
"We gave the Russians every opportunity to come up with an alternative hypothesis and they
haven't," said Johnson. "We actually have evidence that Russia has not only been
investigating the delivery of nerve agents for the purposes of assassination but has also
been creating and stockpiling Novichok," the poison used in Salisbury.
Why Russia is the prime suspect is understandable. Novichok was created by Russia's military
decades ago, and Skripal, a former Russian intel officer, betrayed Russian spies to MI6.
But what is missing here is the Kremlin's motive for the crime.
Skripal was convicted of betraying Russian spies in 2006. He spent four years in prison and
was exchanged in 2010 for Russian spies in the U.S. If Putin wanted Skripal dead as an example
to all potential traitors, why didn't he execute him while he was in Kremlin custody?
Why wait until eight years after Skripal had been sent to England? And how would this murder
on British soil advance any Russian interest?
Putin is no fool. A veteran intelligence agent, he knows that no rival intel agency such as
the CIA or MI6 would trade spies with Russia if the Kremlin were to go about killing them after
they have been traded.
"Cui bono?" runs the always relevant Ciceronian question. "Who benefits" from this criminal
Certainly, in this case, not Russia, not the Kremlin, not Putin.
All have taken a ceaseless beating in world opinion and Western media since the Skripals
were found comatose, near death, on that bench outside a mall in Salisbury.
Predictably, Britain's reaction has been rage, revulsion and retaliation. Twenty-three
Russian diplomats, intelligence agents in their London embassy, have been expelled. The Brits
have been treating Putin as a pariah and depicting Russia as outside the circle of civilized
Russia is "ripping up the international rulebook," roared Defense Secretary Gavin
Williamson. Asked how Moscow might respond to the expulsions, Williamson retorted: Russia
should "go away and shut up."
Putin sympathizers, including Labour Party leader Jeremy Corbyn, have been silenced or
savaged as appeasers for resisting the rush to judgment.
The Americans naturally came down on the side of their oldest ally, with President Donald
Trump imposing new sanctions.
We are daily admonished that Putin tried to tip the 2016 election to Trump. But if so, why
would Putin order a public assassination that would almost compel Trump to postpone his efforts
at a rapprochement?
Who, then, are the beneficiaries of this atrocity?
Is it not the coalition -- principally in our own capital city -- that bears an endemic
hostility to Russia and envisions America's future role as a continuance of its Cold War role
of containing and corralling Russia until we can achieve regime change in Moscow?
What should Trump's posture be? Stand by our British ally but insist privately on a full
investigation and convincing proof before taking any irreversible action.
Was this act really ordered by Putin and the Kremlin, who have not only denied it but
Or was it the work of rogue agents who desired the consequences that they knew the murder of
Skripal would produce -- a deeper and more permanent split between Russia and the West?
Only a moron could not have known what the political ramifications of such an atrocity as
this would be on U.S.-British-Russian relations.
And before we act on Boris Johnson's verdict -- that Putin ordered it -- let us recall:
The Spanish, we learned, did not actually blow up the battleship Maine in Havana Harbor in
1898, which ignited the Spanish-American War.
The story of North Vietnamese gunboats attacking U.S. destroyers, which led to the Gulf of
Tonkin Resolution and 58,000 dead Americans in Vietnam, proved not to be entirely
We went to war in Iraq in 2003 to disarm it of weapons of mass destruction we later
discovered Saddam Hussein did not really have.
Some 4,500 U.S. dead and tens of thousands of wounded paid for that rush to judgment. And
some of those clamoring for war then are visible in the vanguard of those clamoring for
Before we set off on Cold War II with Russia -- leading perhaps to the shooting war we
avoided in Cold War I -- let's try to get this one right.
As it turns out, Ulbricht's lawyers were on to something.
In a blockbuster report published Tuesday in
the Intercept, reporter Sam Biddle cited several documents included in the massive cache of
stolen NSA documents that showed that the agency has been tracking bitcoin users since 2013,
and has potentially been funneling some of this information to other federal agencies. Or, as
Biddle puts it, maybe the conspiracy theorists were right.
It turns out the conspiracy theorists were onto something. Classified documents provided
by whistleblower Edward Snowden show that the National Security Agency indeed worked urgently
to target Bitcoin users around the world - and wielded at least one mysterious source of
information to "help track down senders and receivers of Bitcoins," according to a top-secret
passage in an internal NSA report dating to March 2013. The data source appears to have
leveraged the NSA's ability to harvest and analyze raw, global internet traffic while also
exploiting an unnamed software program that purported to offer anonymity to users, according
to other documents.
Using its ability to siphon data directly from the fiber-optic cables, the NSA managed to
develop a system for tracing transactions that went well beyond simple blockchain analysis. The
agency relied on a program called MONKEYROCKET , a sham Internet-anonymizing service that,
according to the documents, was primarily deployed in Asia, Africa and South America with the
intention of thwarting terrorists.
The documents indicate that "tracking down" Bitcoin users went well beyond closely
examining Bitcoin's public transaction ledger, known as the Blockchain, where users are
typically referred to through anonymous identifiers; the tracking may also have involved
gathering intimate details of these users' computers.
The NSA collected some Bitcoin users' password information, internet activity, and a type
of unique device identification number known as a MAC address, a March 29, 2013 NSA memo
suggested. In the same document, analysts also discussed tracking internet users' internet
addresses, network ports, and timestamps to identify "BITCOIN Targets."
The NSA's budding Bitcoin spy operation looks to have been enabled by its unparalleled
ability to siphon traffic from the physical cable connections that form the internet and
ferry its traffic around the planet. As of 2013, the NSA's Bitcoin tracking was achieved
through program code-named OAKSTAR, a collection of covert corporate partnerships enabling
the agency to monitor communications, including by harvesting internet data as it traveled
along fiber optic cables that undergird the internet.
Specifically, the NSA targeted Bitcoin through MONKEYROCKET, a sub-program of OAKSTAR,
which tapped network equipment to gather data from the Middle East, Europe, South America,
and Asia, according to classified descriptions. As of spring 2013, MONKEYROCKET was "the sole
source of SIGDEV for the BITCOIN Targets," the March 29, 2013 NSA report stated, using the
term for signals intelligence development, "SIGDEV," to indicate the agency had no other way
to surveil Bitcoin users. The data obtained through MONKEYROCKET is described in the
documents as "full take" surveillance, meaning the entirety of data passing through a network
was examined and at least some entire data sessions were stored for later analysis.
Naturally, once the NSA got involved, the notion of anonymity - whether with bitcoin, or
even some of the privacy-oriented coins like Zcash - was completely crushed.
Emin Gun Sirer, associate professor and co-director of the Initiative for Cryptocurrencies
and Contracts at Cornell University, told The Intercept that financial privacy "is something
that matters incredibly" to the Bitcoin community, and expects that "people who are privacy
conscious will switch to privacy-oriented coins" after learning of the NSA's work here.
Despite Bitcoin's reputation for privacy, Sirer added, "when the adversary model involves the
NSA, the pseudonymity disappears. You should really lower your expectations of privacy on
Green, who co-founded and currently advises a privacy-focused Bitcoin competitor named
Zcash, echoed those sentiments, saying that the NSA's techniques make privacy features in any
digital currencies like Ethereum or Ripple "totally worthless" for those targeted.
While bitcoin appeared to be the NSA's top target, it wasn't the agency's only priority. The
NSA also used its unparalleled surveillance powers to take down Liberty Reserve - a kind of
proto-ICO that was involved in money laundering. Though the company was based in Costa Rica,
the Department of Justice partnered with the IRS and Department of Homeland Security to arrest
its founder and hand him a 20-year prison sentence.
The March 15, 2013 NSA report detailed progress on MONKEYROCKET's Bitcoin surveillance and
noted that American spies were also working to crack Liberty Reserve, a far seedier
predecessor. Unlike Bitcoin, for which facilitating drug deals and money laundering was
incidental to bigger goals, Liberty Reserve was more or less designed with criminality in
mind. Despite being headquartered in Costa Rica, the site was charged with running a $6
billion "laundering scheme" and triple-teamed by the U.S. Department of Justice, Homeland
Security, and the IRS, resulting in a 20-year conviction for its Ukrainian founder. As of
March 2013 -- just two months before the Liberty Reserve takedown and indictment -- the NSA
considered the currency exchange its No. 2 target, second only to Bitcoin. The indictment and
prosecution of Liberty Reserve and its staff made no mention of help from the NSA.
Of course, several of the agency's defenders argued that the notion that the NSA would use
these programs to spy on innocuous bitcoin users is "pernicious", according to one expert
The hypothesis that the NSA would "launch an entire operation overseas under false
pretenses" just to track targets is "pernicious," said Matthew Green, assistant professor at
the Johns Hopkins University Information Security Institute. Such a practice could spread
distrust of privacy software in general, particularly in areas like Iran where such tools are
desperately needed by dissidents. This "feeds a narrative that the U.S. is untrustworthy,"
said Green. "That worries me."
But forget bitcoin: the notion that the NSA has been illegally feeding intelligence to other
federal intelligence and law enforcement agencies has been a watershed issue for civil
libertarians, with implications far beyond cryptocurrency money laundering . The process, known
as "parallel construction", would, if definitive proof could ever be obtained by a defense
attorney, render an entire case as inadmissible.
Civil libertarians and security researchers have long been concerned that otherwise
inadmissible intelligence from the agency is used to build cases against Americans though a
process known as "parallel construction": building a criminal case using admissible evidence
obtained by first consulting other evidence, which is kept secret, out of courtrooms and the
public eye. An earlier investigation by The Intercept, drawing on court records and documents
from Snowden, found evidence the NSA's most controversial forms of surveillance, which
involve warrantless bulk monitoring of emails and fiber optic cables, may have been used in
court via parallel construction.
The timing of the Intercept's report is also interesting.
We reported last year that a Russian national named Alexander Vinnick, the alleged
mastermind of a $4 billion bitcoin-based money laundering operation, had been arrested
following an indictment that levied 21 counts of money laundering and other crimes that could
land him in a US prison for up to 55 years.
And given the justice system's treatment of other cryptocurrency-related criminals, the
notion that Vinnick might spend multiple decades in prison is not beyond the realm of
possibility. Of course, if the case against him is built on illegally obtained evidence, one
would think his defense team would want to know.
Heavily redacted versions of the Snowden documents
are available on the Intercept's website.
I don't believe the NSA knows the content of crypto transactions due to packet data
encryption. They do likely know the identities of frequent Bitcoin users via traffic
tracking. Infrequent users very unlikely. That's what the IT programmer in me says. But we're
talking Ed Snowden who knows a lot about networks and encryption. This suggests that NSA has
a man-in-the-middle attack.
Nobody cracked TOR and the code is open source. Identities were determined via the host
site communications not in TOR transit. The govt does have https keys - isp told me. But
software encrypted data in packets - no they don't. TOR and OpenPGP are very good to have
with govts and social media getting more abusive collecting/selling any data that will bring
For an extra funny, at one time, the United States was happy to supply fuel cycle capable
breeder reactors to Iran, before the 1979 Revolution intervened.
No less a personage than Dick Cheney, who was President Ford's Chief of Staff at the time,
commented at the time that he could figure out what those reactors would be used for. The
same Dick Cheney who insisted that non-fuel cycle capable reactors were somehow proof of
Iran's bad intentions.
Source: "The Silk Roads" by Professor Peter Frankopan.
"... The Iranians know how that cartoon ends, so they'd refuse, unlike Mr Saddam. And then the US would call on the client states in the EU to join them in tightening sanctions. Eventually provocation could be arranged and the US would "have no choice but to respond." - some patrol boats being shot at by Iranians as has happened. We all will recall how Obama was cast as a creampuf appeaseer when 'our boys' were caught zooming around Iranian waters. ..."
"... Too many powerful actors on the American political stage have determined hat Iran must be collapsed (It was on the famous hit-list after all) for them to let this go. ..."
What had been happening and what I expect to see is that, as during the George II
Administration, the US would loudly accuse Iran of breaking faith with agreements and demand
unlimited access for 'inspectors'.
The Iranians know how that cartoon ends, so they'd refuse, unlike Mr Saddam. And then
the US would call on the client states in the EU to join them in tightening sanctions.
Eventually provocation could be arranged and the US would "have no choice but to respond." -
some patrol boats being shot at by Iranians as has happened. We all will recall how Obama was
cast as a creampuf appeaseer when 'our boys' were caught zooming around Iranian
Too many powerful actors on the American political stage have determined hat Iran must
be collapsed (It was on the famous hit-list after all) for them to let this go.
Barely a day after President Trump outraged his political opponents by calling out Special
Counsel Robert Mueller by name in a series of angry tweets,
the Washington Post is reporting that the president's legal team has provided written
descriptions of certain key moments to the Mueller probe as they push to limit the scope of a
presidential interview, should they agree to one.
According to the
report, Trump has reportedly told aides that he's "champing at the bit" to sit for an
interview. But his lawyers, who are carefully negotiating terms, have sought to restrain the
president, worried he might inadvertently perjure himself or - worse - accidentally walk into a
Given the time-sensitive nature of the investigation (Trump and his allies would like it to
end as swiftly as possible) Trump on Monday
added storied Washington lawyer Joseph diGenova, the husband of former Reagan Justice
Department official and former Senate Intelligence Committee chief counsel Victoria Toensing,
to his legal team.
Various readers, fans, blog commenters, Facebook trolls, and
auditors twanged on me all last week about my continuing interest in the RussiaRussiaRussia hysteria,
though there is no particular consensus of complaint among them -- except for a general "shut up,
already" motif. For the record, I'm far more interested in the hysteria itself than the
Russia-meddled-in the-election case, which I consider to be hardly any case at all beyond 13 Russian
The hysteria, on the other hand, ought to be a matter of grave concern,
appears more and more to have been engineered by America's own intel community, its handmaidens in the
Dept of Justice, and the twilight's last gleamings of the Obama White House, and now it has shoved
this country in the direction of war at a time when civilian authority over the US military looks
sketchy at best.
This country faces manifold other problems that are certain to reduce the
national standard of living and disrupt the operations of an excessively complex and dishonest
and the last thing America needs is a national war-dance over trumped-up grievances
The RussiaRussiaRussia narrative has unspooled since Christmas and is blowing back badly
through the FBI,
now with the firing (for cause) of Deputy Director Andrew McCabe hours short
of his official retirement (and inches from the golden ring of his pension). He was axed on the
recommendation of his own colleagues in the FBI's Office of Professional Responsibility, and they may
have been influenced by the as-yet-unreleased report of the FBI Inspector General, Michael Horowitz,
due out shortly.
The record of misbehavior and "collusion" between the highest ranks of the FBI, the
the Clinton campaign, several top political law firms, and a shady cast of
international blackmail-peddlars is
a six-lane Beltway-scale evidence trail compared to the
muddy mule track of Trump "collusion" with Russia.
It will be amazing if a big wad of criminal cases are not dealt out of it, even as
New York Times
sticks its fingers in its ears and goes, "La-la-la-la-la ."
It now appears that Mr. McCabe's statements post-firing tend to
incriminate his former
boss, FBI Director James Comey
-- who is about to embark, embarrassingly perhaps, on a tour
for his self-exculpating book,
A Higher Loyalty: Truth, Lies, and Leadership
A great aura of sanctimony surrounds the FBI these days.
Even the news pundits
seem to have forgotten the long, twisted reign of J. Edgar Hoover (1924 – 1972), a dangerous rogue who
excelled at political blackmail. And why, these days, would any sane American take pronouncements from
the CIA and NSA at face value?
What seems to have gone on in the RussiaRussiaRussia matter
is that various parts of the executive branch in the last months under Mr. Obama gave each other tacit
permission, wink-wink, to do anything necessary to stuff HRC into the White House and, failing that,
to derail her opponent, the Golden Golem of Greatness.
The obvious lesson in all this huggermugger is that the ends don't justify the means.
there are basically two routes through this mess
One is that
the misdeeds of FBI officers, Department of Justice lawyers, and Intel
agency executives get adjudicated by normal means,
namely, grand juries and courts. That
would have the salutary effect of cleansing government agencies and shoring up what's left of their
credibility at a time when faith in institutions hangs in the balance.
The second route would be for the authorities to ignore any formal response to an evermore
self-evident trail of crimes, and to
allow all that political energy to be funneled into
manufactured hysteria and eventually a phony provocation of war with Russia
Having rejected a plan for imposing $30 billion in tariffs on Chinese imports last week,
saying they weren't big enough
; President Trump is
unveil by Friday, a package of $60 billion in annual tariffs
Trump is following through on a long-time threat that he says will punish China for
intellectual property infringement and create more American jobs,
The Washington Post reports
, the timing of the tariff package, which Trump plans to unveil by
Friday, was confirmed by four senior administration officials.
The package could be applied to more than 100 products,
which Trump argues were
developed by using trade secrets the Chinese stole from U.S. companies or forced them to hand over in
exchange for market access.
WaPo also notes
many of the financial ministers at the G-20 meeting have also alleged
that China should make changes to its trade policies
, but so far most have tried to cajole
Beijing multilaterally, a strategy that Trump has said doesn't work.
Trump this month announced 25 percent tariffs on imported steel and 10 percent for aluminum
and they will also take effect Friday.
As Bloomberg reminds us, Canada and Mexico are already excluded from the levies, and the Trump
administration has left the door open for Australia and possibly other allies to win a similar
concession if they can show they are trading fairly and are national-security partners. Planned
retaliation from the European Union to China has triggered concerns over a global trade war.
And as we warned previously
the recently announced global steel and aluminum tariffs
(with various exemptions) by the Trump administration were just a (Section 232) preview of the main
Trump's imminent trade war with China
, which as Credit Suisse
previews, will be unveiled any moment in the form of tariffs and restrictions on trade with China,
reportedly in retaliation for Chinese IP violations.
First, a reminder on the all-important Section 301:
What is Section 301?
Section 301 of the 1974 Trade Act allows the President
to, among other things, "
impose duties or other import restrictions on the products of [a]
foreign country," if the President determines that that country is violating a trade agreement or
"engages in discriminatory or other acts or policies which are unjustifiable or unreasonable and
which burden or restrict United States commerce
." The U.S. relied heavily on the provision
during the Reagan era (an administration in which the current USTR Robert Lighthizer served as
Deputy USTR) into the early 1990s, but it has been used infrequently since the World Trade
Organization was formed in 1995 and provided a forum for dispute resolution.
How will Section 301 figure in the upcoming US-Chinese trade war, and what are the key points:
Last August, President Trump instructed his U.S. Trade Representative Robert
to initiate a Section 301 investigation into China's forced technology transfer policies.
While the results of the 301 investigation are not due until August 2018,
appears poised to act on the issue in the coming weeks.
The President is reported to be seriously considering a package of tariffs on Chinese
(targeting between $30BN and $60BN worth).
Reports have stated that Administration officials have used China's manufacturing roadmap,
"Made in China 2025," in deciding what goods to impose tariffs on.
This will likely further
concern Chinese leaders
In addition, the Administration has discussed rescinding licenses for Chinese businesses and
employing other such methods to restrict Chinese investment in the United States
President's recent decision to block a Singaporean company's bid to takeover a U.S. company
underscores his aversion to Chinese direct investment
(the company had Chinese
As part of the 301 action, the Administration has also reportedly discussed visa
restrictions and a mandate that U.S. stock exchanges limit who can list in a U.S. market.
It remains unclear whether the restrictions will go this far, but the President has, to date, been
hawkish in his trade policy and there seem to be fewer and fewer moderating voices in the White
The 301 investigation and potential actions resulting from it seem to complement
congressional efforts to restrict Chinese investment
through legislation broadening the
jurisdiction of the Committee on Foreign Investment in the United States (CFIUS). We believe this
legislation is on track to be signed into law in Q3 2018.
What to expect? here are some high-level thoughts from Credit Suisse:
The Chinese will likely respond in kind, beginning a succession of tit-for-tat trade
policies between the two countries.
The United States has the option to take a multilateral approach and work with allied nations
to initiate their own WTO dispute regarding Chinese technology transfer policies.
at this point, the U.S. appears more likely to instead take unilateral retaliatory action without
WTO authorization, which may run afoul of the U.S.'s WTO obligations.
If the U.S. acts unilaterally (as it appears it will),
China will likely bring a
challenge before the World Trade Organization (WTO).
The President appears committed to maintaining his "tough on China" stance. Even after losing
top advisor Gary Cohn after the imposition of steel and aluminum tariffs
, the President
appears steadfast in his campaign against China's trade practices and Chinese investment in the U.S,
and we expect continued restrictive trade policies with respect to China.
The President's actions may not receive the congressional backlash that his steel and aluminum
tariffs did. Many U.S. corporations are frustrated with China's policy requiring foreign companies
to turn over source code and other proprietary technology in exchange for access to the Chinese
However, if the President takes this as far as he currently seems to be planning
to, punitive measures by China coupled with the chilling of foreign investment could be a major
concern for U.S. corporations.
In terms of specifics, the US trade deficit last year hit an all time high of $375BN.
The Trump administration is planning imposing tariffs on up to $60bn of Chinese goods, or roughly
13% of goods import from China ($505BN), and 2.75% of total US goods import according to Danske Bank;
the tariffs will target tech products, telecoms & clothing.
A snapshot of the key aspect of the US-China trade relationship:
the US exports soybeans, pharmaceuticals, vehicles and aircraft.
the US imports textiles,clothing, manufactures of metals,electronics and toys.
How to trade it?
, when discussing which industries and companies would be impacted, we said that there
are some obvious sectors such as industrials (cars, planes), agriculture, and technology. Below,
courtesy of Strategas,
is a list of US companies which derive the largest percentage of their
total revenue from China.
As trade war looms, it would be prudent for investors to start
thinking about potential risks to the companies they own if they have sufficient business in China.
We're witnessing classic psychopathic warfare. Psychopaths play mind games. They make
outrageous accusations and force you to spend thousands of hours spinning your wheels in an
attempt to Prove A Negative.
I know because I worked for a psychopath who did it frequently, maintaining a culture of
fear even among the executive board members. One nice fellow was so affected by the stress
that he developed cancer and died. (The manipulative SOB didn't have the balls to attend the
funeral. Too bad.)
Again, this is classic psychopathy. I was singled out at one point for something special,
being accused in front of the Board of something "Too Horrible To Describe" (those exact
words), but if I apologized for "it" then there would be an opportunity to make amends.
Obviously, I had no idea, and got so rattled (I was a stupid kid) that I nearly burst into
tears. A few minutes after I left, I heard them all laughing about it. People are not human
beings to a psychopath, they're instruments to be manipulated.
I agree with you about the psychopaths. I have worked for and with several. They are
emotionless pathological liars devoid of empathy and live each day trying to focus attention
on themselves in any way possible to feed their ego. They are born with flawed genes but
usually breed the most which is why there are so many out there, you can't avoid getting near
Psychopaths enjoy the thrill of lying and sowing discord amongst anyone they can bully,
i.e. Staff in lower positions, (yes the chief burger flipper can be a psychopath to the
junior burger flippers - it's not all about CEO's). They also bully anyone smaller, weaker or
less fortunate than themselves. A lot of them do get locked up, but too many roam free.
The end of the petrodollar effectively cancels the MIC's fiat credit card. They will be
rummaging their sofas for spare change. Expect them to use whatever they can scrape together
for their own last gasp battle of the bulge.
the bulk of the article withstanding, i can't understand how someone who would put
together this article would use a sequitur such as:
Novichok (the inventor of which, by the way, lives in the US),
what fucking difference does it make where he lives? he is russian. and when he invented
the stuff he was working for the soviet union intelligence services. spots leopards. and said
inventer makes the highlighted claim from the link below. so why bring the inventer of this
stuff into the discussion. bad choice of research.
You think that someone that can reproduce this nerve agent who is now under full control
of the CIA no doubt is someone that shouldn't be mentioned? You jest!!! Oh and he knows Putin
ordered it!!! ROFLOL!!! You are full of shit up to your eyeballs!
NSA whistleblower and former CIA employee Edward Snowden slammed Facebook in a Saturday
tweet following the suspension of Strategic Communication Laboratories (SCL) and its political
data analytics firm, Cambridge Analytica, over what Facebook says was imporoper use of
In a nutshell, in 2015 Cambridge Analytica bought data from a University of Cambridge
psychology professor, Dr. Aleksandr Kogan, who had developed an app called
"thisisyourdigitallife" that vacuumed up loads of information on users and their contacts.
After making Kogan and Cambridge Analytica promise to delete the data the app had gathered,
Facebook received reports (from sources they would not identify) which claimed that not all the
data had been deleted - which led the social media giant to delete Cambridge Analytica and
parent company SCL's accounts.
"By passing information on to a third party, including SCL/Cambridge Analytica and
Christopher Wylie of Eunoia Technologies, he violated our platform policies. When we learned
of this violation in 2015, we removed his app from Facebook and demanded certifications from
Kogan and all parties he had given data to that the information had been destroyed. Cambridge
Analytica, Kogan and Wylie all certified to us that they destroyed the data." - Facebook
Of note, Cambridge Analytica worked for Ted Cruz and Ben Carson during the 2016 election
before contracting with the Trump campaign. Cruz stopped using CA after their data modeling
failed to identify likely supporters.
In response to the ban, Edward Snowden fired off two tweets on Saturday criticizing
Facebook, and claimed social media companies were simply "surveillance companies" who engaged
in a "successful deception" by rebranding themselves.
Snowden isn't the first big name to call out Silicon Valley companies over their data
collection and monitoring practices, or their notorious intersection with the U.S.
Around the same time, Google was becoming involved in a program known as the "Enduring
Security Framework" (ESF), which entailed the sharing of information between Silicon Valley
tech companies and Pentagon-affiliated agencies "at network speed." Emails obtained in 2014
under Freedom of Information requests show Schmidt and his fellow Googler Sergey Brin
corresponding on first-name terms with NSA chief General Keith Alexander about ESF Reportage
on the emails focused on the familiarity in the correspondence: "General Keith . . . so great
to see you . . . !" Schmidt wrote. But most reports overlooked a crucial detail. " Your
insights as a key member of the Defense Industrial Base," Alexander wrote to Brin, "are
valuable to ensure ESF's efforts have measurable impact." -
Kim Dotcom has also opined on social media's close ties to the government, tweeting in
February "Unfortunately all big US Internet companies are in bed with the deep state. Google,
Facebook, YouTube, Twitter, etc. are all providing backdoors to your data."
In 2013, the
revealed that the NSA has backdoor access to all major Silicon Valley social
media firms, including Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube, and
Apple - all through the notorious PRISM program which began in 2007 under the Protect America
Act. PRISM's existence was leaked by Edward Snowden before he entered into ongoing asylum in
Moscow. Microsoft was the first company to join the PRISM program.
The NSA has the ability to pull any sort of data it likes from these companies, but it
claims that it does not try to collect it all. The PRISM program goes above and beyond the
existing laws that state companies must comply with government requests for data, as it gives
the NSA direct access to each company's servers -- essentially letting the NSA do as it
After PRISM's existence was leaked by Snowden, the Director of National Intelligence issued
a statment which stated that the only people targed by the programs are "outside the United
States," and that the program "does not allow" the targeting of citizens within US borders.
evidence from a retired AT&T communications technician, Mark Klein, that revealed a secret
room used to "split" internet data at a San Francisco office as part of the NSA's bulk data
collection techniques used on millions of Americans.
During the course of that work, he learned from a co-worker that similar cabins were being
installed in other cities, including Seattle, San Jose, Los Angeles and San Diego, he
The split circuits included traffic from peering links connecting to other internet
backbone providers, meaning that AT&T was also diverting traffic routed from its network
to or from other domestic and international providers , Klein said. -
"They are collecting everything on everybody," Klein said.
Well look on the bright side, only idiots are placing their most vital thoughts,
and innovations on Facebook or any social media for that matter. So basically
big brother has acres of databases full of idiotic things. Believe me, if it can
take humans a step into the future, its not on the web. So basically big brother
is mining through vast amounts of useless data. Here's your sign!
If you actually worked for the Navy for
any period of time, you should know that this government cannot tie its
own shoes. No way are any of your whacked-out conspiracy theories even
Yes, Zuckerberg and the Winkelvoss twins came up with Facebook for
social reasons. The government spy agencies, who know a good opportunity
to use someone else's invention to serve their own ends when they see one,
co-opted it. It really doesn't have to be any more complicated than that.
The fact of WHO did this is irrelevant. What matters is that we should
have understood what this meant from the begining. Many did, many more
did not. We complain of being treated like sheep, bleeting all the way
to our pens.
What we must accept is that there are many who could
care less about liberty, happy to live in a cell, as long as th
econveniences continue to poor in.
I wonder how livestock feel about living in a pen while receiving
free food and healthcare? I wonder if given the choice of freedom or
feed lot, which way they would go. I think we see the answer in the
inner cities of our nation (and others).
It's all well and good to be disgusted by surveillance, but it's
ever-encroaching, and soon you won't be able to function without complying.
Privacy will be impossible, except for the elite for whom privacy will be
another luxury that they get which you don't. Sort of like a gun.
I initially thought Snowden was a traitor. But over careful examination, he
exposed lying by Brennan and Clapper, unwarranted surveillance of Americans
and lot of complete lies told by the government to We The People.
Well look on the bright side, only idiots are placing their most vital
thoughts, and innovations on Facebook or any social media for that matter. So
basically big brother has acres of databases full of idiotic things. Believe
me, if it can take humans a step into the future, its not on the web. So
basically big brother is mining through vast amounts of useless data. Here's
Tape over the user facing camera, don't use finger print to unlock, and dont
do voice search, it will buy you a bit more time before they can profile u
completely. Of course, stay away from FB. Install no script addon to your
That's where I'm counting on. Years of showing middle finger for every
potential partner related to potential use of this surveillance media. I
wanna piss everyone off big time, make myself active target, and to see what
Picture this: a civilization muzzled for decades upon decades by political
correctness, the pressures building inside people not being able to spout off
at the mouth. Then along comes the internet and socials where people can
imagine they're anonymously blabbing away at the keyboard. My point is that
most people mean very little of what they put on the web, it's just that the
dam broke with the onset of the web. That's another reason data collection is
Things more or less moved from the Points and in the Direction and Pivots I expected and
commented under the Colonels 'time-to-clean-up-the-homs-desert-pocket' Update in February,
the biggest Hurdles to advances in Ghouta remains two Fold - the prospect of brutal Urban
Warfare and the search for a more diplomatic Solution.
Whilst Idlib will no doubt fall under a similar Fate to a degree (Diplomacy will be
necessary whilst low hanging Turkish Fruit remain). I do however propose a different
conclusion which is possible that then simply acceptance of a divided Syria, at least in its
Turkish Observation Posts largely at current prevent or more, Influence R+6 Activities in
Eastern Idlib and Aleppo Province, the Door is still open in the South and West - Hama and
Through the 'Desert Hawks' previously the Syrian Government has demonstrated capability to
advance through the Mountainous Warfare that Latakia demands, Ghouta far from simply securing
the Syrian Heartland may be an action designed to free up large numbers of maneuver Units
which should enable them not only to squeeze the North West but more seriously threaten Jisr
Al Shugur... Likewise an advance in the South could force Opposition out of Hama Province
ensuring Hama Cities security.
The ultimate goal depending on Force Ratios and scale of advance could be to render many
of the Turkish Positions in East Idlib and Aleppo redundant, inducing a withdrawal from
current Positions, or a negotiated Settlement....
The fact that Towns such as Kafarya and Foua remain isolated forces the R+6 to mount some
Operation to ensure or negotiate their Position and indeed the Mountains of Latakia would
position R+6 suitably to overlook much of Idlib to support where further advances can be
Colonel, I would respectfully suggest that War is a Combination of Factors - Economic
being one along with Ideological Factors, this all weighs heavily on the Calculations for
War, In Syria Case I suspect that those arguing for it not only included the Zionists, but
also got consensus from those whom could argue its benefits in Economics and wider
Geopolitics (EU relieved of Russian Energy for example)
By now I suspect the latter Advocates have ideally given up, but the Zionists are
incapable of doing so, because unlike Economics they have literally made a Situation worse
for the cause they serve.
"... CUI BONO ? Who Benefits? MIC, NeoCons, Zionists, Rothschilds banking cartel. ..."
"... Why the HELL would Russia, or anyone else, bother to use such a messy, traceable and complicated method to kill this guy? Especially when there are SO MANY WAYS it could have been done that wouldn't have garnered all the attention, and that would have left no traces? They could have sent someone to shove him in front of a train or something, or staged a 'botched robbery'. ..."
You're not "just sayin'", you're just babbling. Just as Assad would never be stupid enough
to use chemical weapons when he's already winning bigly, Russia would never be stupid enough
to use chemical weapons on a has-been spy, when there's a hundred other ways to kill him.
Anybody who insists on the chemical weapons narrative in either of these cases is pushing a
narrative, not having a discussion. Why are you pushing this narrative, I wonder, my little 5
month old "Warrior for freedom."?
Seriously...I think these 'conspiracy theorists' have been watching too many Hollywood
This is what I want to SCREAM every time I hear this shit...Why the HELL would Russia, or
anyone else, bother to use such a messy, traceable and complicated method to kill this guy?
Especially when there are SO MANY WAYS it could have been done that wouldn't have garnered
all the attention, and that would have left no traces? They could have sent someone to shove
him in front of a train or something, or staged a 'botched robbery'.
Reminds me of the stupid assassination methods the CIA wanted to use on Castro...poisoning
his beard? Really? Well, aside from the fact that it is just too 'Wile E. Coyote' to be taken
seriously, did anyone ask, if such an assassin could get close enough to poison his beard,
why he wouldn't go with a more dependable method?
Well we know that. But the real point I want to make is that Russia always reacts to such
nonsensical and outright false accusations; Russia always responds, rejects of course the
accusations but usually with lengthy explanations, and with suggestions on how to come to the
truth – as if the UK and the west would give a shit about the truth – why are they
doing that? Why are you Russia, even responding?
That is foolish sign of weakness . As if Russia was still believing in the goodness of the
west, as if it just needed to be awakened. What Russia is doing, every time, not just in this
Skripal case, but in every senseless and ruthless attack, accusations about cyber hacking,
invading Ukraine, annexing Crimea, and not to speak about the never-ending saga of Russia-Gate,
Russian meddling and hacking into the 2016 US Presidential elections, favoring Trump over
Hillary. Everybody with a half brain knows it's a load of crap. Even the FBI and CIA said that
there was no evidence. So, why even respond? Why even trying to undo the lies, convince the
liars that they, Russia, are not culpable?
Every time the west notices Russia's wanting to be a "good neighbor" – about which the
west really couldn't care less, Russia makes herself more vulnerable, more prone to be accused
and attacked and more slandered.
Why does Russia not just break away from the west? Instead of trying to 'belong' to the
west? Accept that you are not wanted in the west, that the west only wants to plunder your
resources, your vast landmass, they want to provoke you into a war where there are no winners,
a war that may destroy entire Mother Earth, but they, the ZionAnglo handlers of Washington,
dream that their elite will survive to eventually take over beautiful grand Russia. That's what
they want. The Bashing is a means towards the end. The more people are with them, the easier it
is to launch an atrocious war.
The Skripal case is typical. The intensity with which this UK lie-propaganda has been
launched is exemplary. It has brought all of halfwit Europe – and there is a lot of them
– under the spell of Russia hating. Nobody can believe that May Merkel, Macron are such
blatant liars that is beyond what they have been brought up with. A lifelong of lies pushed
down their throats, squeezed into their brains. Even if something tells them – this is
not quite correct, the force of comfort, not leaving their comfort zone- not questioning their
own lives – is so strong that they rather cry for War, War against Russia, War against
the eternal enemy of mankind. – I sadly remember in my youth in neutral Switzerland, the
enemy always, but always came from the East. He was hiding behind the "Iron Curtain".
The West is fabricating a new Iron Curtain. But while doing that, they don't realize they
are putting a noose around their own neck. Russia doesn't need the west, but the west will soon
be unable to survive without the East, the future is in the east – and Russia is an
integral part of the East, of the Shanghai Cooperation Organization (SCO), that encompasses
half the world's population and controls a third of the world's economic output.
Mr. Putin, you don't need to respond to insults from the west, because that's what they are,
abusive insults. The abject slander that Johnson boy threw at you is nothing but a miserable
insult; you don't need to respond to this behavior. You draw your consequences.
Dear President Putin, Dear Mr. Lavrov, Let them! Let them holler. Let them rot in their
insanity . – Respond to the UK no longer with words but with deeds, with drastic deeds.
Close their embassy. Give all embassy staff a week to vacate your country, then you abolish and
eviscerate the embassy the same way the US abolished your consulates in Washington and San
Francisco – a bit more than a year ago. Surely you have not forgotten. Then you give all
Brits generously a month to pack up and leave your beautiful country (it can be done –
that's about what Washington is forcing its vassals around the globe to do with North Korean
foreign laborers); block all trade with the UK (or with the entire West for that matter), block
all western assets in Russia, because that's the first thing the western plunderers will do,
blocking Russian assets abroad. Stealing is in their blood.
Mr. Putin, You don't need to respond to their lowly abusive attacks, slanders, lies. You and
Russia are way above the level of this lowly western pack. Shut your relation to the west. You
have China, the SCO, the Eurasian Economic Union (EEU), Russia is part of the OBI –
President Xi's One Belt Initiative – the multi-trillion development thrive, emanating
from China, connecting continents – Asia, Africa, Europe, South America – with
infrastructure, trade, creating hundreds of millions of decent jobs, developing and promoting
science and culture and providing hundreds of millions of people with a decent life.
What would the west do, if suddenly they had no enemy, because the enemy has decided to
ignore them and take a nap? China will join you.
Everything else, responding, justifying, explaining, denying the most flagrant lies, trying
to make them believe in the truth is not only a frustrating waste of time, it's committing
political suicide. You will never win. The west doesn't give a hoot about the truth –
they have proven that for the last two thousand years or more. And in all that time, not an
iota of conscience has entered the west's collective mind. The west cannot be trusted.
Putin is all too happy to see West tirelessly attack and insult Russia as this kind of
antagonism solidifiers Russian people unity and support for the Czar Vladimir. He does not
need to lift a finger, just report the news from abroad. All economic and social problems are
now secondary in Russia with this vicious anti-Russia campaign in the West and its weekly
If you would listen to Putin who does give long interviews regularly you see that he
understands that all of the money and energy being directed toward war is retarding the
growth he and his people want to see in Russia.
That country has paid dues we can't get our minds around between the soviet overthrow of
the government and WW2, never mind Stalin's years of the gulag. There is a free Russian movie
with English titles on Youtube and it's called The Chekist. Strongly think it's worth your
time to watch it.
The governments of these "big player" countries put on kabuki theater, because behind
closed doors and through back channels, they are working together to enslave the peoples.
That's why Russia keeps responding.
We're witnessing classic psychopathic warfare. Psychopaths play mind games. They make
outrageous accusations and force you to spend thousands of hours spinning your wheels in an
attempt to Prove A Negative.
I know because I worked for a psychopath who did it frequently, maintaining a culture of
fear even among the executive board members. One nice fellow was so affected by the stress
that he developed cancer and died. (The manipulative SOB didn't have the balls to attend the
funeral. Too bad.)
Again, this is classic psychopathy. I was singled out at one point for something special,
being accused in front of the Board of something "Too Horrible To Describe" (those exact
words), but if I apologized for "it" then there would be an opportunity to make amends.
Obviously, I had no idea, and got so rattled (I was a stupid kid) that I nearly burst into
tears. A few minutes after I left, I heard them all laughing about it. People are not human
beings to a psychopath, they're instruments to be manipulated.
The average American zombie may still be clueless to this, but Russian officials
understand, surely. America and its vassals are a Pathocracy. The directives and messaging
coming out of Washington and other corners are going to get a lot more zany, because
psycohpaths are nothing if not imaginative when it comes to rationalization and avoidance of
I'm convinced of 2 things: 1) Russia's strategy is to document everything like crazy for
the purpose of providing a chronicle when SHTF (letting the psychopaths dig their own hole,
in other words), and 2) When SHTF, it will not involve Russia directly at all. Things are
going to get so loony that rational Americans will rise up. In other words, Revolution is
inevitable as long as pscyhopaths are allowed to continued to grind everything that's good
about the West into the dirt.
Psychopaths: Expect no sympathy when it all comes down. For all the terror and death that
you have rained upon the rest of the world since WW2, you deserve everything coming to
Psychopaths enjoy the thrill of lying and sowing discord amongst anyone they can bully,
i.e. Staff in lower positions, (yes the chief burger flipper can be a psychopath to the
junior burger flippers - it's not all about CEO's). They also bully anyone smaller, weaker or
less fortunate than themselves. A lot of them do get locked up, but too many roam free.
Agreed. I think the author is missing the point. In my opinion, the Russians are speaking
to western people, not the corrupt leaders, when they expose the truth, and they're gaining
credibility in the process. With the constant barrage of lies the West receives from the
media and the imperialistic misdeeds constantly committed by the U.S. govt, Russia's best
propaganda campaign is simply stating the truth.
"... Let me be clear about my position. If Gina was in fact the Chief of Base and oversaw the application of the waterboarding and other inhuman treatment then she lacks the moral authority to head the CIA. Unfortunately, the United States has a long history of overlooking human rights violations and war crimes. Students of WW II will recall that US military intelligence recruited and protect Klaus Barbie, the Butcher of Lyon, as an asset after the war. He murdered Jews and sent others to Auschwitz. He should have been hung. Instead, we turned a blind eye and gave him a paycheck. ..."
Before Gina became the Chief of Staff for Rodriguez, what role did she play in the
waterboarding of two AQ operatives in Thailand? It appears that she was at least witting of
what was going on. Did she have the authority to decide what measures to apply to the two? Did
she make such decisions?
Those are facts still to be determined. I am inclined to give her the benefit of the doubt.
But there are others who I respect that are adamant in opposing her nomination. The only thing
I know for sure is that her nomination will be a bloody and divisive political battle. If it
comes down to embracing waterboarding as an appropriate method to use on suspected terrorists,
then a majority of Americans are supportive of that practice and will cheer the appointment of
Haspel. That fact is a very sad and disturbing commentary on what America is or has become.
Tolerating torture and excusing such an activity in the name of national security is the same
justification that Stalin and Castro employed to punish dissidents. It is true that one man's
terrorist is another woman's freedom fighter.
Let me be clear about my position. If Gina was in fact the Chief of Base and oversaw the
application of the waterboarding and other inhuman treatment then she lacks the moral authority
to head the CIA. Unfortunately, the United States has a long history of overlooking human
rights violations and war crimes. Students of WW II will recall that US military intelligence
recruited and protect Klaus Barbie, the Butcher of Lyon, as an asset after the war. He murdered
Jews and sent others to Auschwitz. He should have been hung. Instead, we turned a blind eye and
gave him a paycheck.
IIRC, Haspel was the chief of staff to whom Rodriguez refers. That does not sound like a bit
player. Would you say that Kelly is a bit player in the Trump admin? As you say, we should
know the facts, but so far it looks like she both participated in torture and in its
With all the crap going on at the FBI, the last thing we need now is a divisive candidate for
any top level government position (torture advocacy is divisive for many of us). A woman, a
lesbian, who cares as long as they are a capable and decent law-abiding individual.
Yes, waterboarding is torture. We considered it so egregious that we prosecuted Japanese
military officers after WWII for using it on POWs. And where do you get "admitted" terrorists
from? In America, even with suspected terrorists, there is the principle of innocent until
proven guilty. At least we once believed in that standard.
And I very much respect you for your position on this (it is this American's view as well).
What amazes me (and yet doesn't) is the example of Rodriguez's supposed introspection "How
bad could this be?" Really?!? That just strikes me as not having any feel for the media, US
citizenry, or even common sense, and just reinforces the feeling that those at the upper
echelons are completely out of touch or alternatively are just lying/posturing to present
themselves in a better light.
PT -- Thank you. Much to consider in these times. I come down on the "no torture and
waterboarding is torture" side of the debate but am also just eager for some competence and
professional experience in key positions. That these positions may be mutually exclusive says
a great deal about our current situation. Again, thank you, for your opinions and
A torturer is a torturer, no matter how one try to glaze it, or sugar coat it. If one is
against torture, or the fancy name for it EIT, one should come out and say it like it is.
This lady is accused of torturing captives ( enemy combatant) that can't and will not go away
unless she come clean. At the end of the day that don't matter, since as a policy, and base
on your own statement, this country's government will prosecut and punish for liking of
torture but not torture and tortures. And, furthermore, is not even willing to do away with
it, per it's elected president. Trying to show a clean, moral, democracy on the hilltop
image, is a BS and a joke.
"... As long as there is no help from the outside Putin can keep these forces at bay. But had Syria been turned into some sort of Caliphate there would have been real trouble in Russia´s southern regions. That is why I believe Putin felt he had no choice but to intervene. ..."
"... To my mind Russia's intervention is wholly defensive in nature. Should the US decide to nevertheless effect regime change in Syria all bets are off. ..."
Visiting Russia at least two times a year since 1992 and speaking the language. Talking to
anybody I meet, knowing journalists, historians ordinary people I think that Russia has found
some sort of equilibrium. It is a deeply conservative place afraid of any sudden changes.
Living standards might be slowly eroding for many people but that is not the matter. People
want stability above anything else. And are quite willing to tolerate a certain amount of
corruption and misbehavior by the authorities. In fact both these amounts have not been
going up but rather decreasing.
The crazies (the Russian equivalent of their Nazi brethren on the Ukrainian side) might
howl about how Putin is a weakling and an appeaser but in vast Russia the majority
doesn´t give a damn about Ukraine.
The main problem of Russia internally is the Caucasus. Putin has in effect allowed
Chechnya to be independent (even FSB agents have been hindered to do their job by Kadyrow) as
long as she toes the overall line and doesn´t conduct her own foreign policy. But
Chechnya is only a small part of Muslim Russia. You have a much higher birth rate there then
in "real" Russia and a strong religious resurgence.
As long as there is no help from the outside Putin can keep these forces at bay. But had
Syria been turned into some sort of Caliphate there would have been real trouble in
Russia´s southern regions. That is why I believe Putin felt he had no choice but to
To my mind Russia's intervention is wholly defensive in nature. Should the US decide
to nevertheless effect regime change in Syria all bets are off. I don't think it will
come to that.
Sometime in the future Europe will just have to accept that chaos in the name of democracy
is no solution. The pressure is building in Germany day by day. There are about 15 million in
the age bracket of 20-25. BY the end of this year there will be 2 million refugees in this
age bracket of which the majority are young men. Young men who´ve seen war and have not
been effeminated by a PC education system. But who are completely useless in a high tech
country like Germany.
The temperature on the streets is constantly rising and there is no police force able to
deal with such numbers of potentially violent young men. The media is sweeping daily
occurrences of violence under the carpet. But the discontent among ordinary Germans is
steadily rising. Many people get the connection between the havoc the West is creating in the
middle east and the rising chaos in Europe. Apart from the fact that Germany is already
paying as much for defense as for housing refugees.
It would be much cheaper to send the people back, buy into Russia´s peace plan in
Syria and fund reconstruction. In the end the pain will be to great and there will be a
rupture one way or another. Sooner than people think.
"... Hakluyt is described by the Bureau of Investigative Journalism's Henry Williams as " one of the more secretive firms within the corporate investigations world " and as "a retirement home for ex-MI6 [British foreign intelligence] officers, but it now also recruits from the worlds of management consultancy and banking " ..."
"... When the drunken junior Trump foreign policy adviser George Papodopoulous boasted in a London bar in May 2016 about Russian intelligence operatives peddling hacked emails that were damaging to Clinton, his most interested listener, according to The New York Times , was Alexander Downer, Australian high commissioner to the U.K. ..."
"... The News Corp. Australian Network quoted an unnamed British diplomatic source explaining that Hakluyt "operates in the shadows, it's not exactly open and transparent and so any serving, and that's the difference, serving diplomat with access to sensitive information and insight associating with the group raises a worry in Whitehall." Whitehall is the British government's equivalent to the White House. ..."
"... Downer's continued involvement with Hakluyt locates the shadowy operation in the world of the Clintons. As previously reported by LifeZette, it was Downer in 2006 who as Australian foreign minister signed a memorandum of understanding with Bill Clinton and the Clinton Foundation. ..."
"... Downer is also connected to another firm of great importance in the international intelligence world. That would be China's telecommunications giant Huawei, on whose Australian board he served for several years, beginning in 2011. U.S. intelligence experts have long described Huawei as a tool of Chinese espionage in America. ..."
"... The link between Clinton and Hakluyt is ironic considering the former secretary of state's strong commitment to liberal Democratic environmental causes. Hakluyt's record includes being caught planting spies in Greenpeace and other environmental groups on behalf of energy giants British Petroleum (BP) and Shell. ..."
Fusion GPS has gotten all the headlines. But there was a second, even more powerful and
mysterious opposition research and intelligence firm lurking about with significant political
and financial links to former Secretary of State Hillary Clinton and her 2016 campaign for
president against Donald Trump.
Meet London-based Hakluyt & Co. ,
founded by three former British intelligence operatives in 1995 to provide the kind of
otherwise inaccessible research for which select governments and Fortune 500 corporations pay
Whereas Fusion GPS was created by
three former Wall Street Journal reporters with links to the U.S. intelligence community,
Hakluyt -- with offices in London, New York, Singapore, Tokyo and Sydney -- was founded by an
enterprising trio of former British intelligence operatives with deep connections throughout
the world's official and corporate corridors of power and influence.
Hakluyt is described by the Bureau of Investigative Journalism's
Henry Williams as " one of the more secretive firms within the corporate investigations
world " and as "a retirement home for ex-MI6 [British foreign intelligence] officers, but it
now also recruits from the worlds of management consultancy and banking "
The firm's "style appears to be much more in the mold of the Christopher Steele dossier.
Clients pay for pages of well-sourced prose from Hakluyt's contacts across the globe," Williams
Hakluyt isn't familiar to the American public. But what has become well-known in recent days
is the role played by one of the London firm's most visible figures in drawing the FBI into the
world of Trump-Russia collusion allegations, a world largely created by Steele in the infamous
dossier bearing his name.
When the drunken junior Trump foreign policy adviser George Papodopoulous boasted in a
London bar in May 2016 about Russian intelligence operatives peddling hacked emails that were
damaging to Clinton, his most interested listener, according to
The New York Times , was Alexander Downer, Australian high commissioner to the U.K.
It was Downer who told the FBI of Papodopoulos' comments, which became one of the "driving
factors that led the FBI to open an investigation in July 2016 into Russia's attempts to
disrupt the election and whether any of President Trump's associates conspired," The Times
Downer, a long-time Aussie chum of Bill and Hillary Clinton, had been on Hakluyt's advisory
board since 2008. Officially, he had to resign his Hakluyt role in 2014, but his informal
connections continued uninterrupted, the News Corp. Australian Network
reported in a January 2016 exclusive:
But it can be revealed Mr. Downer has still been attending client conferences and gatherings
of the group, including a client cocktail soirée at the Orangery at Kensington Palace a
few months ago.
His attendance at that event is understood to have come days after he also attended a
two-day country retreat at the invitation of the group, which has been involved in a number of
corporate spy scandals in recent times.
The News Corp. Australian Network quoted an unnamed British diplomatic source explaining
that Hakluyt "operates in the shadows, it's not exactly open and transparent and so any
serving, and that's the difference, serving diplomat with access to sensitive information and
insight associating with the group raises a worry in Whitehall." Whitehall is the British
government's equivalent to the White House.
Downer's continued involvement with Hakluyt locates the shadowy operation in the world of
the Clintons. As previously reported by LifeZette, it was Downer in 2006 who as Australian
foreign minister signed a memorandum of understanding with Bill Clinton and the Clinton
The memorandum committed $25 million from the Australian government to the foundation for
HIV/AIDs programs in China, Papua New Guinea, and Vietnam. A subsequent audit was unable to
account for how those funds were spent.
Earlier this year, the FBI asked retired Australian police detective Michael Smith to
provide information he uncovered concerning the 2006 deal -- suggesting the bureau's
investigation of the Clinton Foundation is focused on the controversial charity's domestic and
Downer is also connected to another firm of great importance in the international
intelligence world. That would be China's telecommunications giant Huawei, on whose Australian
board he served for several years, beginning in 2011. U.S. intelligence experts have long
described Huawei as a tool of Chinese espionage in America.
But Downer is not the only Clinton fan in Hakluyt. Federal contribution records show several of the firm's U.S.
representatives made large contributions to two of Hillary Clinton's 2016 campaign
Jonathan Selib of Brooklyn, New York, listed himself as a "consultant" and his employer as
Hakluyt when he made four contributions totaling $3,200 to Hillary for America and one
contribution worth $2,350 to the Hillary Victory Fund during the Democratic presidential
primary. Selib also contributed to the congressional campaigns of Rep. Seth Moulton (D-Mass.)
and John Lewis of Montana. Selib was formerly chief of staff for Sen. Max Baucus (D-Mont.).
Another Hakluyt executive, Holly Evans, contributed $500 to Hillary for America the day
after Selib's June 27, 2016, donations to the same Clinton campaign entity. Evans listed Rye,
New York, as home and described herself as a Hakluyt "executive." Her résumé
includes stints advising Vice President Dick Cheney and working on the National Security
Council during the second Bush administration.
The link between Clinton and Hakluyt is ironic considering the former secretary of state's
strong commitment to liberal Democratic environmental causes.
A third Hakluyt executive, Andrew Exum of Washington, D.C., made multiple contributions to
several Democratic congressional candidates, including Elisa Slotkin in Michigan and Daniel
Helmer of Virginia. Exum served as a U.S. Army infantry officer and as former deputy assistant
secretary of defense under then-President Barack Obama. He has also been a contributing editor
of Atlantic magazine.
The link between Clinton and Hakluyt is ironic considering the former secretary of state's
strong commitment to liberal Democratic environmental causes. Hakluyt's record includes being
caught planting spies in Greenpeace and other environmental groups on behalf of energy giants
British Petroleum (BP) and Shell.
Robert Bartley, the late editorial page editor of The Wall Street Journal, was a free trade
zealot who for decades championed a five-word amendment to the Constitution: "There shall be
Bartley accepted what the erasure of America's borders and an endless influx or foreign
peoples and goods would mean for his country.
Said Bartley, "I think the nation-state is finished."
His vision and ideology had a long pedigree.
This free trade, open borders cult first flowered in 18th-century Britain. The St. Paul of
this post-Christian faith was Richard Cobden, who mesmerized elites with the grandeur of his
vision and the power of his rhetoric.
In Free Trade Hall in Manchester, Jan. 15, 1846, the crowd was so immense the seats had to
be removed. There, Cobden thundered:
"I look farther; I see in the Free Trade principle that which shall act on the moral world
as the principle of gravitation in the universe -- drawing men together, thrusting aside the
antagonisms of race, and creed, and language, and uniting us in the bonds of eternal
Britain converted to this utopian faith and threw open her markets to the world. Across the
Atlantic, however, another system, that would be known as the "American System," had been
The second bill signed by President Washington was the Tariff Act of 1789. Said the Founding
Father of his country in his first address to Congress: "A free people should promote such
manufactures as tend to make them independent on others for essential, particularly military
In his 1791 "Report on Manufactures," Alexander Hamilton wrote, "Every nation ought to
endeavor to possess within itself all the essentials of national supply. These comprise the
means of subsistence, habitat, clothing and defence."
This was wisdom born of experience.
At Yorktown, Americans had to rely on French muskets and ships to win their independence.
They were determined to erect a system that would end our reliance on Europe for the
necessities of our national life, and establish new bonds of mutual dependency -- among
Britain's folly became manifest in World War I, as a self-reliant America stayed out, while
selling to an import-dependent England the food, supplies and arms she needed to survive but
could not produce.
America's own first major steps toward free trade, open borders and globalism came with
JFK's Trade Expansion Act and LBJ's Immigration Act of 1965.
By the end of the Cold War, however, a reaction had set in, and a great awakening begun.
U.S. trade deficits in goods were surging into the hundreds of billions, and more than a
million legal and illegal immigrants were flooding in yearly, visibly altering the character of
Americans were coming to realize that free trade was gutting the nation's manufacturing base
and open borders meant losing the country in which they grew up. And on this earth there is no
The new resistance of Western man to the globalist agenda is now everywhere manifest.
We see it in Trump's hostility to NAFTA, his tariffs, his border wall.
We see it in England's declaration of independence from the EU in Brexit. We see it in the
political triumphs of Polish, Hungarian and Czech nationalists, in anti-EU parties rising
across Europe, in the secessionist movements in Scotland and Catalonia and Ukraine, and in the
admiration for Russian nationalist Vladimir Putin.
Europeans have begun to see themselves as indigenous peoples whose Old Continent is mortally
imperiled by the hundreds of millions of invaders wading across the Med and desperate come and
occupy their homelands.
Who owns the future? Who will decide the fate of the West?
The problem of the internationalists is that the vision they have on offer -- a world of
free trade, open borders and global government -- are constructs of the mind that do not engage
Men will fight for family, faith and country. But how many will lay down their lives for
pluralism and diversity?
Who will fight and die for the Eurozone and EU?
On Aug. 4, 1914, the anti-militarist German Social Democrats, the oldest and greatest
socialist party in Europe, voted the credits needed for the Kaiser to wage war on France and
Russia. With the German army on the march, the German socialists were Germans first.
Patriotism trumps ideology.
In "Present at the Creation," Dean Acheson wrote of the postwar world and institutions born
in the years he served FDR and Truman in the Department of State: The U.N., IMF, World Bank,
Marshall Plan, and with the split between East and West, NATO.
We are present now at the end of all that.
And our transnational elites have a seemingly insoluble problem.
To rising millions in the West, the open borders and free trade globalism they cherish and
champion is not a glorious future, but an existential threat to the sovereignty, independence
and identity of the countries they love. And they will not go gentle into that good night.
Having warned it would retaliate proportionately, this morning Russia did just that when it
expelled 23 British diplomats - the same number as the UK kicked out a few days earlier as
punishment for Moscow's alleged poisoning of a former double agent. It also ordered the closure
of the UK consulate in St Petersburg and the Moscow British Council, a cultural and educational
Russia's Ministry of Foreign Affairs summoned the British ambassador to Moscow and told him
that the measures are "in response to the provocative actions of the British side and the
unsubstantiated accusations" against Russia, the ministry said. Russia gave the British
diplomats one week to leave. "If further actions of an unfriendly nature are taken against
Russia, the Russian side reserves the right to take other retaliatory measures," the ministry
You like my comments on the Team of Sycophants? You have not seen what I will write about
the Democrats. Pelosi? She is a self centered wretch enriched by her silicon valley admirers
through no merit of her own who despises the people her father fought for. HC? I hope she is
a drunk. I could like her better if she is. Her contempt for ordinary Americans who do not
share her adolescent utopian revolutionary ideals is laughable. Perhaps Wellesley did that to
her. My uncle endowed a chair there but I never liked him. pl
Hear! Hear! Even NPR agrees with.... Donald J. Trump:
"The claim Black and Hispanic unemployment are at or near record lows. The short answer
Trump's numbers are right," ...... "Trump is right that African-American unemployment hit a
record low in December. The unemployment rate for black Americans is currently 6.8 percent,
the lowest level recorded since the government started keeping track in January 1972..... And
he's also right that the Hispanic unemployment rate is down a point over the last year"
Larry Wilkerson writes:
"Avigdor Lieberman, Israel's defense minister, is scheduled to give the keynote address at
the Jerusalem Post's conference in New York in April. The title of his address is published
as "The Coming War With Iran." Any American citizen who believes this White House team will
not involve the U.S. in Israel's war needs to check into a mental ward." http://lobelog.com/the-most-important-hearings-of-the-young-century/
Colonel Lang I think our president wants and demands admirers and not advisers. With what I
have experienced back here in Lotus Aters town, that self centred mentality fits with Beverly
Hills star types, and Goldman Sachs fund managers
which the combination of this two personality brings to mind a CAA agent.
McCabe has been fired today....48 hrs before he was due to retire and be able to collect his
20 year pension....seems a little too vengeful to me.
Was there ever any real investigation into his alleged favoring of Hillary in the FBI
investigation? I don't remember the details.
Former U.S. Army General Barry McCaffrey says, "Reluctantly I have concluded that President
Trump is a serious threat to US national security. He is refusing to protect vital US
interests from active Russian attacks. It is apparent that he is for some unknown reason
under the sway of Mr Putin." https://twitter.com/mccaffreyr3/status/974748724176941056
And now, apparently on this Friday night, the Deputy Director of the FBI, Andrew McCabe, who
is at this time perhaps not the official deputy director any more but who was on the payroll
with accumulated vacation or sick leave or a similar such thing, was officially fired from
This is two days before he could retire with full benefits, as he turns 50 years of age on
Sunday. Since he is most likely a civil service employee, even at his job as the number two
person at the FBI, he would be covered by federal civil service law. I am not familiar with
the federal process, but a civil service employee can usually contest the termination of
employment, although it is in an "administrative proceeding", which has different rules than
a lawsuit. The result of an administrative hearing can be appealed into a regular trial court
in Texas, but with restrictions and limits on the rules of evidence and procedure that govern
civil lawsuits. The federal rules regarding the appeal of an administrative ruling may be
The battle lines with the "special counsel" Mueller are being more clearly drawn, as
McCabe is quoted in the article as saying--
"This attack on my credibility is one part of a larger effort not just to slander me
personally, but to taint the FBI, law enforcement, and intelligence professionals more
generally. It is part of this Administration's ongoing war on the FBI and the efforts of the
Special Counsel investigation, which continue to this day. Their persistence in this campaign
only highlights the importance of the Special Counsel's work."
The situation creates the classic case of McCabe as a "disgruntled former employee".
Everybody knows what that means....
I remember well Powell's performance at the UN with CIA director literally backing him up. I
knew he was lying, it was clear to anyone who bothered to read Knight Ridder.
Wilkerson's role was never clear to me, but I accept your evaluation.
If the Boss surrounds himself with sycophants, were are told what to expect:
Therefore a wise prince ought to hold a third course by choosing the wise men in his state,
and giving to them only the liberty of speaking the truth to him, and then only of those
things of which he inquires, and of none others; but he ought to question them upon
everything, and listen to their opinions, and afterwards form his own conclusions. With
these councillors, separately and collectively, he ought to carry himself in such a way
that each of them should know that, the more freely he shall speak, the more he shall be
preferred; outside of these, he should listen to no one, pursue the thing resolved on, and
be steadfast in his resolutions. He who does otherwise is either overthrown by flatterers,
or is so often changed by varying opinions that he falls into contempt.
Come on, all you people. This has been the most entertaining soap opera in Washington since
Bill Clintons zipper trouble. There has not been any real damage to the country (and maybe a
few benefits) and may not be in the future.
Pat, us Democrats are not bad people, we just have shitty leaders and no vision, but in
that regard, the Republicans are catching up.
McCabe is brutally fired a day short of his 20 years, Sessions is humiliated on a daily
basis, Tillerson was shafted everytime he went overseas trying to fix Trump's mistakes. Now,
how many in the Trump administration and in government are going to 'work for the president'
as opposed to 'working for themselves'.
Fear is not the tool of the effective manager.
There may be plenty of irony, but that does not make it implausible. We have witnessed a
progression of lamer and lamer ducks in this administration. Why not just use a video
substitute and let Fox News take over White House operations?
The firing of McCabe shows how petty Trump is and his lack of a moral code. It is true
that not all Republicans are bad. My wife, until recently, was one all her adult life.
I went to my monthly science lecture last evening, conducted by a neighbor, and he will
rejoin the federal government this fall as a Senior Science Advisor.( He spent 30 years
before retirement in that capacity) I would wish that more people as capable as he is would
help run the country, regardless of the dumb people that get elected.
The good news about the dismal current condition is that standards may be raised in the
future in an effort to make this just an educational interlude.
Wilkerson told me (through a mutual friend) well be fore the UN debacle that he and Powell
had the situation under control and that I should shut up. It was also Wilkerson who
persuaded Powell not to take any intel analysts to CIA when they went to be briefed by Tenet
and company. why did he do that? Hey! Why would such semi-divine beings as he and Powell need
expert help? pl
So Wilkerson had/has no conscience. WH Favors? How shallow can a person be? WH Favors? Blink,
blink? Why Powell didn't slap the dog shit out of Wilkerson I'll never understand.
Back to Mattis, what was he waiting for (saying he needed more 'intel' for extraction of
the wounded/dying?), a note sent through Fedex or UPS? To leave men to die in the field the
way Mattis did. Arghhh.
I also have not seen anywhere where Mattis experienced combat except from a 'comfortable'
position. That explains a lot why Mattis seems to be so gung ho on getting U.S. into another
Former/Retired CIA Director John O. Brennan says, "When the full extent of your venality,
moral turpitude, and political corruption becomes known, you will take your rightful place as
a disgraced demagogue in the dustbin of history. You may scapegoat Andy McCabe, but you will
not destroy America...America will triumph over you." https://twitter.com/JohnBrennan/status/974978856997224448
Spare me the adjectives......he'fired. And if, significant if, he is guilty of what the
published reports say is, if that is confirmed by an independent inspector general's report,
and the text of that report matters here, then to hell with him he deserves to be fired.
If Sessions had not (wrongly, it turns out) recused himself and cleaned out the DOJ (as
expected) Trump would not have been riding him.
If Tillerson had followed Trump's direction on Iran, he probably would still be in his
As for McCabe, that's life in the fast lane.
He was too clever by half and got in over his head.
If anything, this whole McCabe/Strozk/Page and whoever else attempt at "plotting" shows the
incompetence of these pinheads.
If Strozk was the FBI's top CI guy (texting like a teenage girl), no wonder the Chinese and
Russians are running wild.
But to truly drain the swamp Trump has to get rid of hundreds, maybe thousands, more of the
self-enriching parasite class.
For years Wilkerson spent great effort providing Colin Powell 'cover' on the allegations
that he was in the loop on all the 'enhanced interrogation tactics' (torture), while Powell
himself was quiet on the issue. And when CP was pushed he was vague e.g. stating that he
didn't have "sufficient memory recall" about the meetings referenced; that he had
participated in " many meetings on how to deal with detainees "; and that he was not "aware
of anything that we discussed in any of those meetings that was not considered legal "
Of course it later came out that he was at the meetings, knew exactly what was going on,
but said nothing. The bottom line? Wilkerson lied and lied...
Well, if all the reports of her liquor bills for supplying the plane on tax-paid trips back
and forth to California when she was speaker of the House are true, she IS a drunk. And on
top of that I worry that all the Botox is now really affecting her brain.
She and Hillary really give being a woman something to cringe about. I, as a woman, would
like her better if she joined the transgender movement so as to prove they aren't just voting
as their husbands tell them to.
Brennan, Comey, Clapper; McCabe, Strzok, Page and others unknown politicized the Intelligence
community through incompetence and malfeasance and left it a smoking wreck. They are
delusional if they think that their contemptible bit of work has not been recognized for what
it is by both active and retired members of that community.
It has almost nothing to do with Trump. John Brennan is an ass. In fact Trump's flailing
around and leadership by tweet has only delayed the day of reckoning for the FBI with the CIA
hiding in the tall grass and still unscathed. Lay that on Trump and Pompeo. Wray, a Trump
appointment...wait, who is Wray and where is he?
I would call Trump's swamp draining efforts thus far a piss poor job and his FP efforts have
been plagued by piss poor appointments and piss poor performance. He himself is more in the
swamp than out of it and a Bolton appointment would put him in it over his ears.
Trump right now has one thing going for him: he's not Clinton; and that advantage is rapidly
disappearing. He either stops behaving like a NY real estate lout with a pinky ring or he's
going to blow himself and who knows what else to kingdom come.
I despise the leftists that are attempting to take control of the country and, to the extent
that the Democrat party has aligned with them (a large extent), I despise them too. Tucker
Carlson is doing a fantastic job countering the left and I guess Hannity plays an important
role in keeping anti-lefty outrage at the boiling point. We need people like him to keep
morale high for the foot soldiers in the culture war. He isn't supposed to be a source of
input for the generals.
That said, at a personal level, Hannity is, to me, an ignorant blow hard and he gives me a
headache every time I listen to him for more than a minute or two. That is what politics in
the USA has come down to; escalating rhetoric and counter rhetoric. If one side became more
circumspect then the other side would drown them out with wild rants. So they all rant on
with increasing fury. That is Hannity's role in all of this.
People here defending McCabe need to have their heads and moral compasses examined. I see
how it goes. No one in DC can ever be punished for breaking the law because one of the
parties will declare it to be politically motivated and 50% of the country (+/-) will buy
into that narrative. I have seen several comments by former FBI stating that McCabe got what
There are other ways to interpret the departure of McMaster (if it's real). The Boss and
the section chief have some differences of opinion or style, but they aren't hostile to each
other at a fundamental level. The section chief agrees to depart amicably and goes to work in
a different area to which he carries and propagates the vision of the Boss. Post departure,
the Boss and Chief maintain communications. I've seen this happen in private sector
companies. I think this approach is unsettling to those with traditional views of how a
bureaucratic career works.
Thank you Colonel. Your most recent short hand about POTUS being a boss, and being so
absolutely, mixes well with the previous and pithy, 'that the deal is everything, and there
are no fouls in service to achieving that everything.'
It would be interesting to learn how that classic boss=god top down approach mixes with
the military approach of the various 21st century generals who have come into the
administration. There are a number of different and basic top down approaches in the private
Isn't retired Army General 'Jerry' Boykins available?
"When the full extent of your venality, moral turpitude, and political corruption becomes
known, you will take your rightful place as a disgraced demagogue in the dustbin of history.
You may scapegoat Andy McCabe, but you will not destroy America...America will triumph over
My. my so Totsky of him.
If Evil Tzar Vladimir IV is selected again on Sunday, the Cruelly Clueless Crew better
hope and pray he doesn't drop the Doomsday Dime or when "America" sees what they were a part
of on July 17th 2014, well, "...America will triumph over you" will become a prophetic
Why are you quoting the words of a Traitor named John Brennan? He committed 'Sedition'
against a duly elected/sworn in POTUS called Trump. Sedition is under the 'Treason' Statute
which upon conviction is punishable by death, and there is no statute of time limitations.
What Brennan did, he can be incarcerated for up until his dying day! Brennan hung himself
with his own rope, and he's too narcissistic arrogant to realize it.
On another note it appears that the Trump dossier was created, financed, and orchestrated
by MI6, which is (if I'm not mistaken) a U.K. 'Governmental Agency', which by defination the
British Government actively conspired to overthrown a sitting U.S. President.
So.....do we now get to squash MI6 for the arrogant gnat they really are?
May owes Trump an formal official apology for MI6's actions of war.
There are rumors that the double agent GRU Colonel Skripal was offering the Russian
Government to turn states evidence against MI6 and provide the Russian Government with all
the 'stuff' about the MI6 created Trump Dossier in return for his being able to return to
Russia to see his daughter married.
All signs point to Skripal's poisoning was orchestrated and performed by the British
Government (spelled MI6/MI5) to hide the fact that the Trump Dossier was created by the
British Government (spelled MI6) to overthrow a sitting U.S. President.
The Russian Government had already convicted/incarcerated/realeased Skripal of Treason,
they would have had nothing to gain by poisoning British MI6 Asset double agent GRU Colonel
My bad, not only does British PM May owe U.S. President Trump a formal apology for the
British Government's (spelled MI6) attempted overthrow of a sitting U.S. President with their
Trump Dossier, but also the Queen of England Queen Elizabeth herself and British King
Apparent Prince William himself, as May acts as their formal agent. The sitting Queen/King of
England rules England, not the PM as the PM are nothing more than their face persona
The fellow at Conservative Treehouse described the Mattis/Trump row (several days before it
blew over) as a "Black Hat Hunting" exercise. Trump and Mattis put out the row story in a
compartmentalized fashion in order to barium meal the leaker in the NSC. Sounds plausible.
I really thought that Andrew McCabe would be allowed to retire and disappear into
obscurity. Instead Jeff Session just took a shot at the FBI, Five Eyes intelligence community
and the Media Mogul coup plotters. All Clinton, Bush and Obama appointees and supporters must
go to the ground. The federal government will seize up. Anyone who thinks their future is at
risk has a reason to assist invoking the 25th Amendment. The Trump Family will fight back.
This is the start of an oligarch mob war fought by Deplorables against the ruling
Meanwhile, even the NewsHour reports on the threat of a new Hezbollah-Israel conflict
which will inevitably escalate into a shooting war with Iran and then draw in nuclear armed
Ah if only the USA were Florence in the 1400's.
While many have read and excoriated the Prince, few have studied the sources from whence that
little handbook was drawn.
In my own little library is one of his lesser works:'
Given the evidence of his career, it is obvious that Pres. Trump is well versed in the art of
manipulating sycophants. Rich men attract parasites like magnets attract iron filings. Since
Pres. Trump was still rich when he won the presidency after 40+ years being a sycophant
magnet, I think he is able to fluster them now as he has for decades. It is also obvious over
his career that he picks good people for the job he wants done and when it is done he moves
on to the next job and the next batch of appropriate people.
Granted this is not the norm for politicians, but it is for builders. You don't use the
foundation or utilities contractor for the stucco work nor the stucco contractor for the
interior decoration work. These things should be obvious but the talking heads insist on
trying to put Pres. Trump into a politician pigeonhole. He doesn't because he isn't.
It is enjoyable that the talking heads still insist on taking his every word literally while
simultaneously refusing to allow that he is a serious man with an excellent control of
language and nuance when it serves him.
"Provocation will be used as pretext by #US & allies to launch strikes on military and
govt infrastructures in #Syria, we are registering the signs of the preparations. Strike
groups of the cruise missile carriers been formed in Mediterranean, Persian Gulf, Red Sea" -
You mean Black and Hispanic unemployment were great under Barack? Why oh why did those
voters abandon the democratic candidate. I'm sure the Russians make African American's stay
home on election day. Hilary 2020!
''These things should be obvious but the talking heads insist on trying to put Pres. Trump
into a politician pigeonhole''
Well he's sort of like a political pigeon playing chess...he struts onto the board, knocks
over all the pieces, sh-ts on the board and declares himself the winner.
But the game continues.
Trump says Mueller better not cross his red line and get into his business.
So Mueller crosses Trump's red line:
2 days ago - WASHINGTON -- The special counsel, Robert S. Mueller III, has subpoenaed the
Trump Organization business records in recent weeks to turn over documents, including some
related to Russia, according to two people briefed on the matter. The order is the first
known instance of the special counsel demanding records ....
So yesterday Trump's attorney says :
''"I pray that Acting Attorney General Rosenstein will follow the brilliant and courageous
example of the FBI Office of Professional Responsibility and Attorney General Jeff Sessions
and bring an end to alleged Russia collusion investigation manufactured by McCabe's boss
James Comey based upon a fraudulent and corrupt dossier,"
I think we are all past the "there is no difference between the parties" rhetoric. There IS a
difference...and the consistent damage across the board being done by the GOP. I have no
doubt...and, as a historian, NO doubt...that the Democrats can screw up just as badly. They
do, however, come from a very different place---and it has the virtue of being much more
protective of the people and land of the USA.
I know we come from different life experiences, Pat, but our country is seriously at risk
and it will be the differences between the parties that will count from here on out until
that day when we can all start pulling in the same direction.
There is a certain amount of demographic inevitability going on here. All to the good for
some of the marginalized Americans. I don't think Trump (or anyone) can really claim
credit....although I do find Trump being factually correct about something, quite refreshing.
Remember---"coincidence is not causation."
By Craig Murray, former British intelligence officer, former UK ambassador to Uzbekistan,
and Rector (i.e. Chancellor) of the University of Dundee. Originally published at CraigMurray.org.uk .
As recently as 2016 Dr Robin Black, Head of the Detection Laboratory at the UK's only
chemical weapons facility at Porton Down, a former colleague of Dr David Kelly, published in an
extremely prestigious scientific journal that the evidence for the existence of Novichoks was
scant and their composition unknown.
In recent years, there has been much speculation that a fourth generation of nerve agents,
'Novichoks' (newcomer), was developed in Russia, beginning in the 1970s as part of the
'Foliant' programme, with the aim of finding agents that would compromise defensive
countermeasures. Information on these compounds has been sparse in the public domain, mostly
originating from a dissident Russian military chemist, Vil Mirzayanov. No independent
confirmation of the structures or the properties of such compounds has been published.
Robin Black. (2016) Development, Historical Use and Properties of Chemical Warfare Agents.
Royal Society of Chemistry
Yet now, the British Government is claiming to be able instantly to identify a substance
which its only biological weapons research centre has never seen before and was unsure of its
existence. Worse, it claims to be able not only to identify it, but to pinpoint its origin.
Given Dr Black's publication, it is plain that claim cannot be true.
The world's international chemical weapons experts share Dr Black's opinion. The
Organisation for the Prohibition of Chemical Weapons (OPCW) is a UN body based in the Hague. In
2013 this was the report of its Scientific Advisory Board, which included US, French, German
and Russian government representatives and on which Dr Black was the UK representative:
[The SAB] emphasised that the definition of toxic chemicals in the Convention would cover
all potential candidate chemicals that might be utilised as chemical weapons. Regarding new
toxic chemicals not listed in the Annex on Chemicals but which may nevertheless pose a risk
to the Convention, the SAB makes reference to "Novichoks". The name "Novichok" is used in a
publication of a former Soviet scientist who reported investigating a new class of nerve
agents suitable for use as binary chemical weapons. The SAB states that it has insufficient
information to comment on the existence or properties of "Novichoks". (OPCW, 2013)
OPCW: Report of the Scientific Advisory Board on developments in science and technology for
the Third Review Conference 27 March 2013
Indeed the OPCW was so sceptical of the viability of "novichoks" that it decided –
with US and UK agreement – not to add them nor their alleged precursors to its banned
list. In short, the scientific community broadly accepts Mirzayanov was working on "novichoks"
but doubts he succeeded.
Given that the OPCW has taken the view the evidence for the existence of "Novichoks" is
dubious, if the UK actually has a sample of one it is extremely important the UK presents that
sample to the OPCW. Indeed the UK has a binding treaty obligation to present that sample to
OPCW. Russa has – unreported by the corporate media – entered a demand at the OPCW
that Britain submit a sample of the Salisbury material for international analysis.
Yet Britain refuses to submit it to the OPCW.
A second part of May's accusation is that "Novichoks" could only be made in certain military
installations. But that is also demonstrably untrue. If they exist at all, Novichoks were
allegedly designed to be able to be made at bench level in any commercial chemical facility
– that was a major point of them. The only real evidence for the existence of Novichoks
was the testimony of the ex-Soviet scientist Mizayanov. And this is what Mirzayanov actually
One should be mindful that the chemical components or precursors of A-232 or its binary
version novichok-5 are ordinary organophosphates that can be made at commercial chemical
companies that manufacture such products as fertilizers and pesticides.
we reported that the world got that much closer to a second Cold War after Russia said it
would expel UK diplomats in retaliation to Theresa May's decision to kick out 23 Russians,
while expanding its "blacklist" of US citizens in response to yesterday's Treasury sanctions.
That's when things turned south fast because roughly at that time, the U.K.'s top diploma,
Boris Johnson, directly accused Vladimir Putin, saying it was " overwhelmingly likely " that he
personally ordered the nerve-agent attack on British soil.
In a dramatic escalation of a diplomatic crisis between the two countries, the Foreign
Secretary said the U.K.'s problem was not with the Russian people but with the Russian
"Our quarrel is with Putin's Kremlin and with his decision - and we think it
overwhelmingly likely that it was his decision - to direct the use of a nerve agent on the
streets of the U.K., on the streets of Europe, for the first time since World War II,"
Johnson said in London.
Predictably, the Kremlin was furious, said that blaming Putin personally for Skripal's
poisoning is "shocking and unforgivable."
Speaking to Interfax, Putin's press secretary Dmitry Peskov said that "We have said on
different levels and occasions that Russia has nothing to do with this story" and added that
"any references to our president is nothing but shocking and unforgivable diplomatic
Johnson's statement was a "diplomatic blunder" on the part of the UK foreign secretary,
Peskov said, adding that the Kremlin remains "puzzled" by the conduct of the British
authorities during the Skripal crisis.
The diplomatic tension increased further Friday afternoon when London's Metropolitan Police
said it is treating as murder the death of Nikolai Glushkov, a close associate of Putin
opponent Boris Berezovsky -- a one-time billionaire who was himself found hanging dead in 2013
in his house outside London.
The Kremlin's press secretary also expressed belief that "sooner or later the British side
would have to present some kind of comprehensive evidence of Russia's involvement, at least, to
their partners France, the US, Germany, who declared solidarity with London in this situation."
Moscow earlier asked the UK to provide materials in the Skripal case, but received a negative
Johnson's claims of Putin's personal involvement weren't the only example of over-the-top
rhetoric by UK officials during the Skripal crisis. UK Defence Secretary Gavin Williamson said
on Thursday that Russia "should go away and shut up" when asked about Moscow's possible
response to British sanctions.
In response, Russia's Defence Ministry said Williamson was an "intellectual impotent" and
Lavrov said he probably lacked education. "Well he's a nice man, I'm told, maybe he wants to
claim a place in history by making some bold statements," Lavrov said. "Theresa May's main
argument about Russia's guilt is 'Highly probable', while for him it's 'Russia should go and
shut up'. Maybe he lacks education, I don't know."
The False Flag nerve agent attack on Skripal and his daughter merely presents the
opportunity to distract the British people from the Brexit imperative.
The British government/Parliament has no desire to separate from the EU, and they have
nothing but contempt for the commoners, so they must call upon British intelligence services
to fabricate a False Flag terrorist attack against two Russian ex-pats who represent
absolutely no value to international espionage and attempt to kill them with poorly
engineered chemical weapons.
Then the international community conveniently blames Russia.
If you tell a lie big enough and keep repeating it, people will eventually come to believe
it. The lie can be maintained only for such time as the State can shield the people from the
political, economic and/or military consequences of the lie. It thus becomes vitally
important for the State to use all of its powers to repress dissent, for the truth is the
mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the
Seems the Deep State is getting desperate. Obama interferes in the Brexit vote..Johnson is
interfering in the Russian vote. Bumper stickers back in the 60's.."What if they gave a war
and nobody came?" Unfortunately, nukes negate that question. We are all invited and going to
participate. Idiots are running the asylum. Duck and cover..ha!
During the latest debate between Russian presidential candidates, Zhirinovsky literally
erupted about Theresa May's absurd nerve gas psychodrama. Seriously, I've never seen so much
fire packed into a two-minute clip.
A couple of choice excerpts (but you really should watch):
"If they give us an ultimatum our Commander-in-Chief should deploy the Baltic Fleet to
the shores of Britain. They might respond, but Khrushchev once told the UK: 'A couple of my
missiles can eliminate your isles.' It shut them up for twenty years."
"Someone poisoned a filthy turncoat spy, and they blame entire Russia. They threaten to
bomb our whole country of 150 million. A cyber-attack, a war - they're nuts. British Prime
Minister Mey, May, or whatever, has gone mad. The lady who's never been to war. Like
Thatcher, who'd never been to war, but started one over the Falkland Isles in Argentina.
And, this one is starting a war in Europe."
The Brits are genuinely good people. My wife much enjoyed herself there on a trip three
years ago - except with being threatened with arrest for possessing some Walmart pepper
spray. They are much dependent on a warfare economy. Caught between the EU and DC with
economic pressure from China, they hooked their wagon to Washington and must play the phony
"it was a Russian assassination" game. It's a matter of survival. They are experts at war and
torment having run the world or been top dog for well over two centuries. America could help
Britain by eliminating all neocons from our government. All this fuss over Hillary's crimes
and Comey etc - small potatoes. We have to go after Bush Jr. and make him answer for 9/11.
That's the core issue festering in our national soul. Few will talk about it. We need to pull
Bush from his hidey-hole and get him on trial. Everything else will then resolve.
When an event occurs that that fundamentally changes the dynamics of global geopolitics,
there is one question above all others whose answer will most assuredly point to its
perpetrators. That question is "Cui bono?" If those so indicted are in addition found to have
had both motive and means then, as they say in the US, it's pretty much a "slam-dunk" .
Discounting the Official Narrative as the absurdity it
so clearly is, there are just two organisations on the entire planet with the expertise,
assets, access and political protection necessary to have both executed 9/11 and effected its
cover-up to date (ie the means). Both are Intelligence Agencies - the CIA and the Israeli Mossad whose motives were arguably the most
compelling. Those motives dovetailed perfectly with the NeoconPNAC agenda, with it's explicitly stated need for
"...a catastrophic and catalyzing event - like a new Pearl Harbor"  in order to
mobilise US public opinion for already planned wars, the effects of which would be to destroy
That's a fantasy: "It is important to lock this agreement in, quickly, before my account is sold to a third-party collection
agency, which is nowhere near as likely to accept such a deep discount" Many hospitals sells you to collection immediately.
Mostly this is a cheap self-promotion of a yet another snake oil salesmen... Some more tidbit still might be useful You
If you try to fight medical-industrial complex alone most of the time you will be crushed. As a minimum you need a legal help.
Often you need insurance too: at the end it is cheaper to have insurance then to fight astronomic bills. But those bottom feeders
still can get to you via balance billing. and in most case, when you stay in hospital they do get back to you with the
additional biils. That's why you will need a lawyers to fight this.
The usual trick of this scammers is to get "out of the network" ambulance and bill you $5K or more. Even the transfer from
one hospital to another via ambulance can cost you tons of money.
Unnecessary procedures is another important danger. Stents is one such danger, in case of suspicion for the heart attack.
You can get several several of them even if do not need them as a courtesy of those greedy jerks ;-)
And they will never agree for Medicare rates. Forget about it.
"... As we have already learned, all healthcare services have been assigned a code by the AMA, a five digit CPT code. So, if you trip and fall off your patio, you might get a doctor's bill like the following table located in your handouts: ..."
"... You may receive other bills from several doctors such as anesthesiologists and radiologists, as well as laboratory services, therapists, and the ambulance company. The bills all look similar, and the strategy and tactics I am presenting, today, should work for each of them as well. ..."
"... The purpose of this overpricing by the medical providers is to force the insurance companies to the negotiating table. The insurance company is bringing a large volume of patients to the medical providers, the members in their network, so they are able to negotiate a lower discounted allowable fee from the medical providers. However, if the insurance carrier is not able to negotiate a contractual allowable fee schedule, then they will end up paying the higher billed charges of the out-of-network provider for the members that still end up being treated by that medical provider in emergencies when precertification is not required. ..."
"... Now, on to where you can find these prices. Well, if you have insurance, then after you receive medical care and the healthcare providers send their claims to the insurance carrier, you should receive from the payer an Explanation of Benefits (EOB), or you probably can go online and view an Electronic Remittance Advice (ERA). For every CPT code that the providers billed , you will see both a billed charge and allowable. ..."
"... Fortunately, as you will now learn, there is a much more simple and better way to be 100% certain of your diagnosis, diagnosis code, procedure, procedure code, and even the medications the physician will offer you, at least for elective conditions. Here it is. If it isn't an emergency, then make a doctor's appointment! ..."
"... Does this sound unlikely? Too good to be true? Then consider this: Medical providers are highly incentivized to give the patients they treated huge discounts. Why? Because they know that collecting money from patients foments malpractice litigation. They would rather have you pay them pennies, than have you sue them for millions. ..."
"... I recently had breakfast with a pharmacist friend of mine that has worked as a manager for Walgreens for more than a decade. mrs_horseman is probably smiling when she hears that I have a pharmacist friend, because she knows how I feel about most of the people in that industry. Nonetheless, I told him about this presentation I am making, and asked if he had any advice for negotiating directly with the pharmacies for medications. It turns out, he does, and I would have never guessed the tactic he described. ..."
Approximately 63% of Americans have no emergency savings for things such as a $1,000
emergency room visit or a $500 car repair, according to a survey released Wednesday of 1,000
adults by personal finance website Bankrate.com, up slightly from 62% last year. Faced with an
emergency, they say they would raise the money by reducing spending elsewhere (23%), borrowing
from family and/or friends (15%) or using credit cards to bridge the gap (15%).
You are going to need five things, which I am going to give to you, today, free of
Some absolutely critical industry vocabulary
A clear understanding of how healthcare is priced in the USA
Insight into to actual pricing
A proven negotiation strategy, including:
a. The point of contact
b. Foreknowledge of what prices medical providers will usually agree to
c. A sample offer and agreement
The confidence to successfully negotiate
Unfortunately, I couldn't come up with a better way to impart to you an understanding of the
industry lingo, other than these simple handouts. However, this information is so important for
you to be able to understand any negotiation strategy that I simply must slog through each term
with you now. Please, I ask that you hold your questions and comments until I get through the
vocabulary. Many of the terms are cross-referenced, and will become more clear after we here
Premium: The monthly amount enrollees pay the insurance company to be covered.
Deductible: The amount paid by the member before insurance will begin to reimburse services.
It is reset annually, and based on the level of benefits or amount of premium paid. For
example, with a $1,000 deductible the patient must pay medical providers for the first $1,000
of allowable expenses incurred by the patient each year, after which costs may be split
according to a coinsurance arrangement, and/or may be limited to the patient's out of pocket
Coinsurance: A cost-sharing requirement of some insurance plans where the patient assumes a
percentage of the costs for covered services after the amount of the deductible has been met.
Coinsurance is described as a ratio, for example 30/70, meaning the patient is responsible for
paying 30% and the insurance will pay 70% of the allowable.
Copayment (co-pay): The amount to be paid to a physician by or on behalf of the patient in
connection with the services rendered by the physician. It is due at the time of service, is a
fixed dollar amount determined by the insurance company based on the level of benefit, and is
usually found printed on the patient's insurance card.
Out of Pocket Expense: The total of covered health care expenses that are paid for by the
member or patient, not including any premium. This is typically the total of the deductible and
any coinsurance paid during a year. It may be a maximum amount where after 100% of allowable
expenses are paid by the insurance company.
Explanation of Benefits (EOB or ERA: Electronic Remittance Advice): The insurance company's
explanation of the benefits they have, or have not, paid to a medical provider, along with any
remaining amounts for which the patient is responsible, if any.
CPT code: Current Procedural Terminology codes maintained by the American Medical
Association. These five digit codes describe most medical, surgical, and diagnostic services
and are used for administrative, financial, and analytical purposes such as on fee schedules
and bills. These CPT codes are also known as Level 1 HCPCS codes, with Level 2 HCPCS codes
being for non-provider medical services like ambulances and prosthetic devices. The CPT code is
equivalent to a part number, SKU Stock Keeping Unit, or UPC Universal Product Code.
Inpatient Prospective Payment System (IPPS): A system of payment for the operating costs of
acute care hospital inpatient stays under Medicare Part A (Hospital Insurance). Under IPPS,
each case is categorized into a diagnosis-related group (DRG). Each DRG has a payment weight
assigned to it, based on the average resources used to treat Medicare patients in that DRG.
Diagnosis-Related Group (DRG): a system to classify hospital visits into similar groups. Its
intent is to identify the products that a hospital provides, such as an appendectomy. DRGs are
assigned by group based on diagnosis (ICD code). DRGs may be further grouped into Major
Diagnostic Categories (MDCs). DRGs are used to determine how much Medicare and some insurance
plans pay hospitals and other services like home health.
ICD code: The International Statistical Classification of Diseases and Related Health
Problems provides codes to classify diseases and a wide variety of signs, symptoms, abnormal
findings, complaints, social circumstances and external causes of injury or disease.
Supposedly, every health condition can be assigned to a unique category and given a code.
Billed charges (usual and customary fees): The undiscounted fees a healthcare provider lists
on the bill (list price, or retail). These fees are usually set well above the highest
allowable of all the provider's contracts, sometime as much as 800% or even 1,000%. The purpose
of this overpricing is to force the insurance companies to the negotiating table.
Allowable: The discounted fee for service a healthcare provider has contractually agreed to
accept from an insurance company. It is listed by CPT code on the EOB or in a fee schedule
available from your insurance company, Medicare, or Medicaid. UNDERSTANDING THIS TERM IS THE
KEY TO UNDERSTANDING HEALTH INSURANCE AND TO NEGOTIATING DIRECTLY WITH MEDICAL PROVIDERS.
Global Period: The number of days after a medical procedure when the fee for office visits