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Debt Rattle March 11 2026

Mar 112026
 
 March 11, 2026  Posted by at 9:41 am Finance Tagged with: , , , , , , , , , ,  90 Responses »


Vincent van Gogh Memory of the Garden at Etten (Ladies of Arles) 1888


• Gulf Oil Production Could Stop In Weeks – Putin (RT)
• Iran Reportedly Starts Mining The Strait Of Hormuz (ZH)
• Introducing Schrödinger’s Ayatollah (Stephen Green)
• Oil Prices Fall, Democrats Most Hurt (Matt Margolis)
• Admin Mulls Special Forces Into Iran to Retrieve Enriched Uranium (Moran)
• Anthropic Sues Pentagon Over Supply-Chain Risk Designation (ET)
• Trump Talks ‘Takeover’ Again as Cuban Protests Hit Day 4 (Sarah Anderson)
• Polls: Trump More Popular Than Kamala, Newsom, AOC, Stephen Colbert (Cantrell)
• Trump Targeted By Four FBI Code-Named Counterintel Probes (JTN)
• UK Govt Plots ANOTHER X Shutdown Over Grok’s ‘Offensive’ Roasts (MN)
• Happy Anniversary, Adam Smith (Jonathan Turley)
• Republicans Prefer War To The US Constitution And Truth (Paul Craig Roberts)
• New York Mayor Won’t Tell The Truth About Islamic Terror Attacks (Pinsker)

 


 

https://twitter.com/MarioNawfal/status/2031121599101853805?s=20 https://twitter.com/realJohnJohnJr/status/2031105905450709299?s=20 https://twitter.com/lovetocook12345/status/2031077465070702973?s=20 https://twitter.com/robertdunlap947/status/2031327454116086130?s=20 https://twitter.com/MyLordBebo/status/2031317974481527170?s=20

 


 

 


 


Squeeze Europe.

• Gulf Oil Production Could Stop In Weeks – Putin (RT)

Oil production dependent on the Strait of Hormuz could come to a complete halt within a month, Russian President Vladimir Putin has said. He warned about the serious risks that the US and Israel’s conflict with Iran could pose to the global energy market. Last year, around a third of the global sea-borne oil exports went through the straight, Putin said at a government meeting on the global energy markets on Monday. “That is around 14 million barrel per day and 80% of that went to the Asian and Pacific nations,” he stated, adding that “now, this route is de-facto closed.”


Traffic through the straight has reportedly dropped by 80% over the past week after the US and Israel launched their bombing campaign against Iran, prompting retaliatory strikes from Tehran. Several tankers were hit in the exchanges. The developments pushed crude above $100 and prompted expectations of emergency energy measures from the EU and other major economies. “Oil production dependent on the strait risks fully stopping in the coming month. It is already dropping,” the president said. Restoring production could take weeks or even months, he added.

The global oil prices are already rising, Putin stated, adding that the increase amounted to over 30% in the past week alone. Disruptions in energy supplies also boost inflation and lead to industrial output decline, according to the president. The world is about to find itself in a “new… price reality,” Putin warned, calling it “inevitable.” Russia remains a “reliable energy supplier,” the president said, adding that it will continue to provide oil and gas for the nations that it also considers reliable partners. According to Putin, the list includes Asian nations and EU members Slovakia and Hungary.

On Monday, Hungarian Prime Minister Viktor Orban and Foreign Minister Peter Szijjarto urged Brussels to lift its ban on Russian oil and gas amid the escalating conflict in the Middle East. Earlier, US Treasury Secretary Scott Bessent announced the easing of sanctions on some Russian oil to stabilize the markets.

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I’m itchy.

• Iran Reportedly Starts Mining The Strait Of Hormuz (ZH)

Update(1555ET): A fresh Tuesday CNN report says that Iran has already begun laying mines in the vital oil transit Strait of Hormuz waterway: Iran has begun laying mines in the Strait of Hormuz, the world’s most i mportant energy chokepoint that carries about one-fifth of all crude oil, according to two people familiar with US intelligence reporting on the issue.The mining is not extensive yet, with a few dozen having been laid in recent days, the sources said. But Iran still retains upward of 80% to 90% of its small boats and mine layers, one of the sources said, so its forces could feasibly lay hundreds of mines in the waterway.


The report further says that after IRGC threats have already de facto closed the strait to nearly all international traffic (apparently unless they signal they are Chinese vessels) amid the ongoing drone and missile threat, it maintains the capability to deploy a “gauntlet” of dispersed mine-laying craft, continues CNN, including explosive-laden boats and shore-based missile batteries. TRUMP RESPONDS to the reports, warns the Military consequences to Iran will be at a level never seen before.


Trump revised his tweet quickly, adding the following: “Additionally, we are using the same Technology and Missile capabilities deployed against Drug Traffickers to permanently eliminate any boat or ship attempting to mine the Hormuz Strait. They will be dealt with quickly and violently. BEWARE!” He also followed with saying that the US already destroyed ten inactive mine laying boats.CENTCOM meanwhile quickly counter-signals that it stands ready to fight back:

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“Mojtaba has yet to be seen in public since his promotion. Strange way to reassure the public about the succession, yes?”

• Introducing Schrödinger’s Ayatollah (Stephen Green)

The point of Erwin Schrödinger’s Gedankenexperiment (thought experiment) was to highlight the absurdity of quantum superposition, where subatomic particles can exist in multiple states at once until measured by conscious human beings. The radioactive element might (or might not) decay at any given moment, activating the Geiger counter that’s rigged to a hammer that smashes the vial filled with cyanide gas. Schrödinger’s contraption, according to hip theories, should remain in superposition — that is, with the cat both alive and dead — until observed by opening the box. Anyway, in Iran this week we have what might be a real-world case of Schrödinger’s Cat, or to put a finer point on it, Schrödinger’s ayatollah.


As near as anyone can tell, nepo baby Mojtaba Khamenei exists in an actual state of superposition. Two, really. Khamenei the Younger exists in not one but two states of superposition: both (or neither?) alive and dead, and simultaneously the Supreme Leader… and not. Don’t bother taking notes on this one — even I’m too confused to put together a quiz for the end of this column.But fancy theories aside, let’s look at what we know/don’t know about the man who would be/won’t be king. As I’m sure you know by now, Mojtaba’s dad, the Ayatollah Ali Khamenei, was killed by Israeli warplanes one lovely Saturday morning during the opening minutes of Israel’s half of the current operation, which they call Roaring Lion.

More than a week went by before Iran’s 88-member Assembly of Experts managed to name Mojtaba as Ali’s successor as “the third Leader of the sacred system of the Islamic Republic of Iran.” But even that might not be all it seems. While the Assembly of Experts announced the formal decision, in reality, it was likely militants in the Iranian Revolutionary Guard Corps making the call. Mojtaba is considered a hardliner rather than an “austere religious scholar,” and on Monday, the Times of Israel reported that his appointment “locks hardliners firmly in control in Tehran — a gamble that could reshape Iran’s war with the US and Israel and reverberate far beyond the Middle East.”

The paper also concluded that Mojtaba means “expanded authority for the Islamic Revolutionary Guard Corps (IRGC), harsher domestic controls and sweeping repression to crush dissent.” But he also owes his position to the IRGC, unofficially making the ayatollah subordinate to the military for the first time in the Islamic state’s 47-year history. And yet… Mojtaba’s figurehead status might be even less than it appears because there’s also the question of whether Mojtaba remains upright and breathing. Also on Monday, Iran state television confirmed that Mojtaba was wounded, presumably during an airstrike. AP reported: “The anchors read reports describing him as ‘janbaz’ or wounded by the enemy,” even as they parade him around — virtually only! — as the new boss.

Mojtaba has yet to be seen in public since his promotion. Strange way to reassure the public about the succession, yes? In addition to Ali Khamenei, also believed dead in the compound airstrike is the elder Khamenei’s wife, a daughter, a grandchild, a son-in-law, and Mojtaba’s wife. Maybe it’s a bit of a stretch to believe that coalition airpower took out so much of the Khamenei family, except for the one guy the IRGC needed as a well-known figurehead to consolidate its power during a chaotic time when one military and theocratic leader after another gets chalked up as KIA. But the point is, we don’t know. He’s Schrödinger’s ayatollah.

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“They want economic pain, they’re hoping for a terrorist attack, and they pretty much want things to fall apart so the voters will blame Trump.”

• Oil Prices Fall, Democrats Most Hurt (Matt Margolis)

Democrats thought they had found another golden ticket. When Trump ordered military strikes on Iran last month, oil prices spiked more than 10% overnight. The liberal media pounced with reports of historic price hikes, acting like things were terrible, conveniently forgetting that while prices did go up, they were still significantly lower than the peak of the Biden years. Still, Democrats clearly saw a political opportunity.“Democrats are seizing on President Donald Trump’s decision to attack Iran as a new front in their energy affordability campaign,” Politico reported after the bombings began. “Oil prices jumped more than 10 percent Sunday night following military action in Iran, a major producer that also sits at the Strait of Hormuz, a key chokepoint for fossil fuel shipments.”


Fresh off a House retreat to nail down midterm messaging, Democrats saw the Iran strike as “a fresh line of attack.” The narrative wrote itself — or so they thought.It didn’t last long. Crude oil briefly surged to nearly $120 per barrel on Monday as markets panicked over the Strait of Hormuz. But then, prices started to plunge. Apparently, Trump told reporters at a Florida news conference, “We took a little excursion because we felt we had to do that to get rid of some evil. Then, I think you’ll see it’s going to be a short-term excursion.” He added that he thought “the war is very complete, pretty much.”Markets responded immediately.

Trump then fired off a warning to Iran on Truth Social, making clear what happens if Tehran tries to weaponize the strait: “If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far.”

This matters politically because the Democrats are banking on economic pain. They need voters to feel squeezed at the pump and to blame the Trump White House. They barely had a case when prices were up, because they were still lower than under Biden. But they completely lost their talking point because of Trump’s confident tone; his explicit threat to hit Iran “twenty times harder” and his framing of the conflict as a short, necessary operation shifted the calculus entirely. The panic premium has largely disappeared, stocks are rebounding globally, and the doomsday energy crisis narrative Democrats were banking on hasn’t materialized.

Democrats spent their retreat crafting a message around affordability, betting that Trump’s foreign policy moves would hand them the economic ammunition they desperately need heading into 2026. Instead, they got a brief spike, followed by a sharp reversal. Despite the Democrats’ hopes, what we have here is a president who looks more in command of the situation than they will admit or want voters to see. Without a doubt, Democrats are rooting against America right now. They want economic pain, they’re hoping for a terrorist attack, and they pretty much want things to fall apart so the voters will blame Trump.

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“If we ever did that, [the Iranians] would be so decimated that they wouldn’t be able to fight on the ground level,” Trump said.”

• Admin Mulls Special Forces Into Iran to Retrieve Enriched Uranium (Moran)

Iran has about 450 kilograms of uranium enriched to 60% that is buried under tons of rock near the Isfahan and Natanz nuclear facilities. Iran is capable of digging that stockpile out and enriching it to 90%, a process that would take a matter of days if the country had any advanced centrifuges to spin the uranium up.mThe Iranian nuclear program was all but destroyed in the attacks last June. While it would take years to reconstitute the entire program, building a few hundred advanced centrifuges would take a matter of months.


Getting at that stockpile of highly enriched uranium (HEU) may be a little easier than first thought. U.S. intelligence recently identified a “very narrow access point” at the bombed Isfahan site, suggesting Iran might still be able to retrieve and move this material. At a House hearing on Tuesday, Secretary of State Marco Rubio was asked whether Iran’s enriched uranium would be secured. “People are going to have to go and get it,” he said, without specifying who.The Israelis say Trump is seriously considering not only sending a small contingent of special operators to either retrieve the HEU or “dilute it” by bringing scientists along to render it less potent. Plans to capture Kharg Island, the major chokepoint for Iran’s oil export industry, have also been discussed.

Axios: NBC News reported on Friday that Trump has discussed the idea of deploying a small contingent of U.S. troops in Iran for specific strategic purposes. Semafor reported Trump’s Iran options include Special Operations raids on nuclear sites. The U.S. official laid out the operational challenge of securing Iran’s uranium: “The first question is, where is it? The second question is, how do we get to it and how do we get physical control?” “And then, it would be a decision of the president and the Department of War, CIA, as to whether we wanted to physically transport it or dilute it on premises.” Trump told reporters aboard Air Force One on Saturday that ground troops were possible — but only “for a very good reason.” “If we ever did that, [the Iranians] would be so decimated that they wouldn’t be able to fight on the ground level,” Trump said.

This sounds very much like a trial balloon the administration is floating to see how much opposition to a few ground troops it will generate. CNN did its best to throw cold water on any operation to retrieve the HEU. The news site claims that retrieving the HEU “would require a significant number of US ground troops beyond a small special operations footprint, seven current and former officials familiar with the military planning told CNN.” Lucky number 7. “Highly enriched uranium is a dual-use material, and Iran has said it produces it only for peaceful energy purposes,” offers CNN. That helpful news is total baloney.

There is no known commercial or scientific use for enriching 450 kilograms of HEU to 60%. Commercial reactors only need uranium enriched to about 3%. Some experimental reactors use uranium enriched to 20%. The only reason to enrich uranium to 60% is to create a way station on the trip to 90% enrichment to create a nuclear bomb. Regardless, CNN tries to make the point that it’s darn near impossible to accomplish a mission like that. Sounds tailor-made for our special operators. Capturing Kharg Island is a different matter. Shutting the facility down for even a short while would be a catastrophic blow to Iran’s economy. The facility handles nearly all of Iran’s 1.6 million barrels per day in exports, most of which go to China. Losing this terminal would effectively “paralyze” the Iranian economy by cutting off its primary source of hard currency.

Because Iran has limited storage capacity, a shutdown at the export terminal would quickly back up the entire supply chain. Within days of a terminal closure, Iranian oil fields would be forced to halve their production or shut down entirely because there would be nowhere to put the oil. Shutting down active oil wells can cause long-term geological damage, making it difficult and expensive to bring them back to full capacity later. Unfortunately, shutting down Kharg Island for any length of time would also be detrimental to the West. The resulting oil shock could result in a recession for most Western countries, including the United States. The war shows no signs of winding down, so Trump’s options on how to proceed are still wide open.

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You want to force the Pentagon to adopt your morals and worldview?

• Anthropic Sues Pentagon Over Supply-Chain Risk Designation (ET)

Artificial intelligence (AI) developer Anthropic sued the Department of War on March 9, following the federal government’s designation of the company as a supply chain risk. That designation hinders government agencies and their contractors from working with Anthropic. The suit comes after the company refused to change the user policy for its AI tool Claude to allow the government to use it for what Anthropic described as “mass surveillance” and “fully autonomous weapons.” The Pentagon has denied that it planned to use Claude for such purposes.


The refusal caused President Donald Trump and War Secretary Pete Hegseth to direct federal agencies to sever ties with Anthropic and state that “effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.” On social media, both Trump and Hegseth accused Anthropic of trying to “strong-arm” the federal government by dictating its military policy.“WE will decide the fate of our Country—NOT some out-of-control, Radical Left AI company run by people who have no idea what the real World is all about,” Trump said in a Feb. 27 Truth Social post.

“Their true objective is unmistakable: to seize veto power over the operational decisions of the United States military,” Hegseth said on X the same day. “That is unacceptable.” Anthropic alleges that the federal government is punishing the company for its First Amendment-protected speech and viewpoint. The company also alleges that the Department of War reached out to some of its business partners following the rift and that those companies “delayed or paused several national security contracts or business engagements already in active development with Anthropic.” That puts “millions, possibly billions, of dollars at risk,” Anthropic stated. “These actions are unprecedented and unlawful,” Anthropic’s lawsuit reads.

“The Constitution does not allow the government to wield its enormous power to punish a company for its protected speech. No federal statute authorizes the actions taken here. “Anthropic turns to the judiciary as a last resort to vindicate its rights and halt the executive’s unlawful campaign of retaliation.” In its filing, Anthropic said it isn’t confident that Claude “would function safely or reliably” if used for those purposes. Anthropic’s suit asks the court to set aside Trump and Hegseth’s designation as unconstitutional. The Pentagon declined to comment on the suit. The Pentagon previously said the company must accept “any lawful use” of its tools and technology to support the U.S. military.

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“They have no energy, they have no money,” Trump said. “They’re in deep trouble on a humanitarian basis. And we don’t want to see that.”

• Trump Talks ‘Takeover’ Again as Cuban Protests Hit Day 4 (Sarah Anderson)

On Monday, a USA Today reporter asked Donald Trump about the fact that he recently said Cuba wants to make a deal. She said, “What would the United States get in return for that, and why should Americans trust Marco Rubio to negotiate it?” (Why should we trust Marco Rubio? Girl, please. Where have you been the last year… Oops, sorry, my inner monologue escaped and got the best of me. Back to the president.) Trump laid it out like this: Well, Marco Rubio is doing a great job. I think he’s going to go down as the greatest secretary of State in history. Look at what we’ve done as a presidency. Look at what we’ve done as an administration. They trust Marco, and so do the American people… He’s been successful no matter where he’s been. He also speaks the language, which is always nice and always helpful.


Trump went on to say that Marco is dealing with Cuba and what may end up being a friendly takeover, but he says it may also end up being a not-so-friendly takeover. Either way, it wouldn’t matter because the country is in crisis and down to “fumes.” “They have no energy, they have no money,” Trump said. “They’re in deep trouble on a humanitarian basis. And we don’t want to see that.” The president went on to talk about how important the Cuban people are to him, and how the regime was largely living off Venezuela. Without its lifeline there, it has nothing.

But they were very, very bad to a lot of people, as you know, and a lot of people living are — the Cuban American vote, which I got at record levels, very important. Those people are very important to me. I know what they went through. They went through hell. Some of them have gone on to be some of the most successful people in the country. Cuban American business people, some of them are like the most successful in the country. And a lot of them are friends of mine because I’ve been fighting this battle with them for a long time. The Castro regime was brutal, but they lived off Venezuela. Now, they don’t live off Venezuela — sends them no energy, no fuel, no oil, no money, no nothing. They lived without Venezuela. They couldn’t have made it. And we cut them off from everything else.”

https://twitter.com/TheBritLad/status/2030814910469333046

Ultimately, he said, “So yeah, they’re going to make either a deal, or we’ll do it just as easy anyway.” It’s still not clear what the end of the Cuban regime will look like. Trump and Rubio have been purposely vague, and it’s possible that even they don’t know for sure yet. Rubio has said that they didn’t know if or how the Nicolás Maduro operation would go down until sort of the last minute, though it’s highly unlikely Cuba will look like that.

There are rumors circulating that the U.S. will make a “major economic deal” with the Cuban “government” that includes easing sanctions and cooperation on various sectors within Cuba, as well as providing an exit strategy for “President” Miguel Díaz-Canel and allowing the Castro family to remain on the island under some protection. Personally, I don’t necessarily buy this, nor do Cuban opposition leaders. Allowing the Castros to hang around indefinitely would be a slap in the face of every person in that country. It comes from anonymous sources, and it seems like it would defeat the purpose of the whole plan, but we’ll see.

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“Pope Leo XIV ranks as the most popular, with a rating of 42%. He barely beat out Trump for the top spot.”

• Polls: Trump More Popular Than Kamala, Newsom, AOC, Stephen Colbert (Cantrell)

A brand new poll NBC conducted between February 27 and March 3 that surveyed 1,000 registered voters will likely have Democrats blowing steam out of their ears, as it concluded that President Donald Trump is more popular than many of his most virulent critics. The list includes late-night talk show host Stephen Colbert, California Gov. Gavin Newsom, former Vice President Kamala Harris, and Rep. Alexandria Ocasio-Cortez. Given that Trump has done a stellar job sticking to his America First agenda and has kept most of his campaign promises, this probably will not shock average voters. Only those whom major media outlets have brainwashed—outlets that dropped any pretense of actual, objective journalism and instead produce propaganda—could possibly find this information shocking.


The thing is, most media outlets avoid talking to regular people. Instead, they opt to take the word of so-called political and cultural “elites,” who, by the way, are the same folks waist-deep in the Epstein files. And this situation does not result from accidental oversight or incompetence. They do it on purpose. If nightly news programs presented the truth, the president—along with MAGA politicians and supporters—would be even more popular than he is now. According to the poll’s data, respondents gave Trump a total positive rating of 41%, compared to Colbert, who pulled in only 35% support. That, to me, is still astronomically high. Colbert is an outspoken liberal who does his absolute best to prevent those on the right from having an opportunity to present their side on his program. Add to that the fact that Colbert is not talented or funny, and it is amazing people like him even that much.

Democratic California Gov. Gavin Newsom, who has spent many months attempting to warm the pool for his entrance into presidential politics, has only a 27% positive rating. Again, that is still far too high. We are talking about a man who signed almost 500 bills into law and then goes on late-night television to complain that California is overregulated. Who are these people saying they like Newsom? They are likely consumers of news products from outlets like CNN and MSNBC. Harris, who failed miserably against President Trump in the 2024 presidential race and is likely preparing for yet another bid for the White House, had a 34% positive rating. The only vibe I get from that figure is that a lot of intellectually challenged individuals vote in our elections. And that is scary.

Moving on to AOC, her positive rating stands at 31%. Out of the 14 figures listed in the data, Pope Leo XIV ranks as the most popular, with a rating of 42%. He barely beat out Trump for the top spot. Vice President JD Vance holds the second-highest rating at 38%. He was tied with Immigration and Customs Enforcement. Vance will most definitely throw his hat in the ring for president, and to be perfectly honest, he is likely the most qualified individual for the job. He has stood by Trump’s side throughout his second term without hesitation. He has earned the respect of the MAGA movement, which is essential for any Republican candidate to win an election. If he gets into office, you can almost guarantee that the America First agenda will continue to move forward.

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“… a dozen members of Congress and their staffers, his future chief of staff Susie Wiles, journalists, campaign advisers, defense lawyers, and even Patel himself had their privacy pierced by warrants, wiretaps, FISA surveillance, phone record analysis, FBI assessments, or grand juries..”

• Trump Targeted By Four FBI Code-Named Counterintel Probes (JTN)

President Donald Trump and his supporters were targeted by four consecutive FBI code-named counterintelligence investigations over the last decade that secretly subjected hundreds of innocent Americans to privacy-invading tactics and essentially treated the man twice elected president as a national security threat for most of the first nine years of his political career, according to interviews and documents reviewed by Just the News. FBI Director Kash Patel has personally led the effort to review the operations code-named Crossfire Hurricane, Round River, Plasmic Echo and Arctic Frost that stretched from summer 2016 to January 2025, uncovering evidence of a far-reaching dragnet that in some cases may have been predicated on false, misleading or uncorroborated justifications, officials said.


Many of the investigative files were hidden from view, even from most FBI agents, because they were marked “prohibited access” and controlled carefully by FBI leadership. Patel’s search has been aided by whistleblowers inside his agency, a handful of senior bureau executives close to the director and some members of Congress, particularly Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa. Those who have seen the records told Just the News they chronicle how how the FBI’s expanded counterterrorism and counterintelligence missions after the Sept, 11, 2001, terrorist attacks eventually became hijacked by politics and led agents to deploy tools meant for terrorists and spies against everyday Americans in a bid to find a way to bring criminal cases against Trump.

One whistleblower this month told the FBI that surveillance and monitoring of Trump figures continued right up to the president’s January 2025 inauguration, according to multiple interviews. Few inside Trump’s orbit were spared from targeting by their stature: a dozen members of Congress and their staffers, his future chief of staff Susie Wiles, journalists, campaign advisers, defense lawyers, and even Patel himself had their privacy pierced by warrants, wiretaps, FISA surveillance, phone record analysis, FBI assessments, or grand juries.

Many targets and subjects fell under the bureau’s definition of special circumstances targets because they have recognized constitutionally protected privileges – like lawyers, members of Congress, journalists, and political figures. Even a political consultant turned documentary filmmaker who investigated Hunter Biden’s foreign business dealings before joining Trump’s 2024 campaign was recently notified he was targeted in a criminal investigation that only recently was shut down, according to letters between Congress and the FBI reviewed by Just the News.

Michael Caputo had his emails and communications seized in 2023 by a “classified subpoena” issued about two weeks after he joined the Trump campaign and the email account the bureau penetrated “contained correspondence on The Trump Campaign’s private strategies and deliberations,” the correspondence stated. Patel’s FBI has informed Congress that probe has been shut down. But the question of how so many Americans were targeted remains open. At least 1,200 people that fall into the categories of special circumstances targets or subject were investigated under assessments by the FBI between 2018 and 2024 during Wray’s tenure, an explosive recent audit report to Congress revealed.

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Someone posted AI Starmer in a bra, and he’s gonna close down X for that?!

• UK Govt Plots ANOTHER X Shutdown Over Grok’s ‘Offensive’ Roasts (MN)

The UK government under Keir Starmer is once again eyeing a total ban on X, this time claiming Grok’s ability to spit out “insults” and “offensive language” poses a dire threat. But as users on the platform point out, this is just another excuse to silence dissent against the regime. Fresh reports reveal Starmer’s administration is probing ways to penalize X for “spreading offence online,” including a potential shutdown. Sky News reported on Grok being prompted to generate vulgar responses targeting Hinduism, Islam, and even historic football disasters.

https://twitter.com/BasilTheGreat/status/2030680998078206029


The correspondent notes that Grok has been used to generate “highly offensive content” directed toward groups of football fans, such as blaming Liverpool supporters for the 1989 Hillsborough disaster, where 97 fans died in a crush, and for which authorities were found to be culpably responsible. Similar insults targeted Rangers fans, referencing the 1971 Ibrox disaster that claimed 66 lives.The government says it is investigating the issue. This comes after Ofcom, as the regulator, stated at the start of the year that it was considering potential actions. Under the Online Safety Act, penalties could include fines up to 10% of a company’s worldwide revenue or £18 million if non-compliance is determined.

Sky News states that X is “urgently investigating” the chatbot responses. This isn’t Starmer’s first rodeo in targeting X. As we detailed in our earlier coverage, the UK government threatened a total ban on X over the so-called “Grok bikini flap,” where the AI was prompted to create ‘sexualized’ images. As we further noted, the push for a total ban likely has nothing to do with protecting children, but everything to do with stifling free speech and criticism of the Labour government’s policies. X users aren’t buying the latest pretext. One post blasts “Starmer Bin Lying gets fact checked by Grok every time he speaks He can’t even post on this app without being exposed as a liar.”


A reply warns of tyranny, quoting Robert A. Heinlein: “When any government, or any church for that matter, undertakes to say to its subjects, This you may not read, this you must not see, this you are forbidden to know, the end result is tyranny and oppression no matter how holy the motives.” This pattern reeks of authoritarian overreach. Starmer’s regime, facing backlash over open borders and surveillance creep, can’t stand a platform where truths about their failures go viral. X remains a bastion for uncensored discourse, exposing leftist hypocrisy and globalist agendas. Shuttering it just because a minority of people made Grok make up some insults would constitute a total victory for tyrants.

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1776 was a productive and decisive year.

March 9: The Wealth of Nations

July 4: Declaration of Independennce.

• Happy Anniversary, Adam Smith (Jonathan Turley)

Today is the 250th anniversary of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. In my book “Rage and the Republic: The Unfinished Story of the American Revolution,” I explore the importance of The Wealth of Nations to the founders and why it will be even more important in this century. The Wealth of Nations was released around the same time as the Declaration of Independence, but was not a particular success in Great Britain. Many panned his free-market theories. In addition to its foundational support for capitalism, it challenged the mercantilist policies of the British Empire and supported the claims of the colonies in seeking greater economic freedoms.


Smith, however, was immediately embraced by the founders, who saw his work as the perfect economic theory to advance their political theory. Ours was the first Enlightenment Revolution based on a belief in natural rights that came from God, not governments. Yet, the founders knew that true individual liberty could not be achieved without economic freedom. Smith’s idea of the “invisible hand” offered an idea of individual economic freedom where the individual tastes and choices of citizens drove whole economies. As I write in Rage and the Republic:

“While he never visited the United States, his theories seemed quintessentially American to many of his generation. For a revolution that was triggered by tariffs and fueled by events like the Boston Tea Party, Smith’s general principles read like an economic version of Common Sense. It was a type of declaration of independence not just from the British policy of mercantilism (emphasizing British exports over imports) but from economic controls over individual productivity and self-determination….

In summary, Smith was first and foremost viewed as a political theorist, and his economic theories were closely tied to his views on the natural liberties of humanity. He saw capitalism as a liberating system for individuals to allow them the wealth and resources to pursue their own chosen paths. Conversely, he saw government controls and subsidies as forms of control and potentially forms of suppression of the human will. If people are to be truly free, they must have the resources to pursue that freedom. The government dole can become a type of servitude or at least a subterfuge for citizens. If they are dependent on the government, they are never truly free.”

I believe that the key to our surviving and thriving in the 21st Century will be the preservation of what I call a “liberty-enhancing economy.” I will be discussing both anniversaries tomorrow at the Reagan Presidential Library.

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The President has to ask Congress for permission to initiate a war.

That meant something different in, say, 1776, than it does today. 250 years ago, you could have an assembly and then a vote, and the enemy would only know you officially declared it, an hour later. Or the next morning. Today, it takes seconds. The President CAN no longer ask Congreess for permission.

• Republicans Prefer War To The US Constitution And Truth (Paul Craig Roberts)

The Republican-controlled House and Senate rejected a war powers vote that would have granted Congress the ability to decide whether Trump could continue serving Israel’s conflict with Iran. Apparently 77% of Republicans have fallen for the propaganda that Iran is a terrorist state developing nuclear weapons. The same Republicans fell for 9/11, Saddam Hussein’s “weapons of mass destruction,” Assad’s “use chemical weapons,” Russian invasion of Ukraine, the Gulf of Tonkin, the endless lies about Gaddafi. And now the Republicans are falling for Trump’s unsupported claim that the “War is very complete, far ahead of schedule.” If the war is nearly over ahead of schedule, how come on March 8 the US State Department ordered non-emergency US government employees and family to leave Saudi Arabia due to safety risks?

How is a war that has expanded to Saudi Arabia nearly over? This was an upgrade of the previous order. It seems that the State Department’s concern about its personnel is inconsistent with Trump’s optimism. Has Trump now joined the whore media lie machine? Is Trump creating a non-existent reality for his remaining supporters? Democracy does not function when the only information citizens have comes from a lie machine that serves the official narrative of the day and from a president who confuses his hopes with reality. Alexander Dugin, apparently Russia’s smartest person, says it is not Iranian war capability that is collapsing, but American credibility. “The fact that Iran is not surrendering, not agreeing to a truce or a ceasefire, is already changing the balance of power.”

It is worth listening to Dugin, because if he is correct, Trump has allowed Netanyahu to lead America into difficult times. “Missile and drone strikes have been carried out against all U.S. bases surrounding Iran. According to neutral estimates, more than 1,000 American service members have been killed (Iran reports much higher numbers, while Trump speaks of only a handful, which seems laughable given the scale of the Iranian strikes). “Iran has chosen a very effective tactic: striking not only military targets in Israel, which is gradually turning into something resembling Gaza, but above all the hubs and energy centers of the Arab Gulf states on which the global economy depends. Combined with the blocking of the Strait of Hormuz, this has already led to enormous losses for the global market. Moreover, the situation will worsen with each day of Iranian resistance.

“It is significant that the Gulf countries—whose plans to transform themselves into neutral and safe centers of the world economy have now come to an end—blame not so much Iran as Israel and the United States. They have always disliked Israel, but in their eyes Trump has become a direct traitor. If American military bases do not protect them but instead create danger, what are they needed for? Arab leaders ask this question quite logically. “Meanwhile, the plankton of global capitalism and the armies of escort girls are hastily leaving Dubai. On the roof of an abandoned hotel, only the somewhat unhinged influencer Andrew Tate dances alone, stubbornly insisting that all of this is merely a computer simulation and that we are living in a matrix where new scenery has simply been loaded in.

“The next step will be the withdrawal of Arab bonds from the United States. Incidentally, BlackRock has halted the process of withdrawals from its funds, lowering the ceiling by more than half. It looks like the beginning of a collapse. Oil prices are soaring, and the indices are falling rapidly. It is entirely possible that the global economy may collapse altogether in the foreseeable future.” If Dugin is right, at what level of intelligence does the US government operate when an expected 3-day war ends not in the expected victory but in economic and military catastrophe? Are not the American people somehow derelict in their responsibility to be informed and to do their duty to make certain that the US government actually serves Americans’ interest, not the interest of Israel?

Is the conservative Republican chant: “you cannot be an American if you don’t love Israel” a method of creating blind American subservience to Israel’s agenda of Greater Israel regardless of the huge cost to Americans? Obviously, the answer is yes. To see and to understand how far off course America is in the ability of its population and elected representatives to preserve accountable government by protecting the separation of powers, reread the first sentence of this article.

Why did the elected US representatives in the House and Senate need a vote to determine whether Congress could vote on whether Trump could start and continue a war for Israel? The US Constitution, not Israel or Trump, is the governing power of the United States. The US Constitution makes no concessions to Israel or any other country to determine US policies. The US Constitution says that it is the power of Congress alone to take America to war.

How long has it been since Congress exercised its Constitutional power? 1941. All wars costing American blood and money have been fought since by executive authority alone. On occasion the president obtains after the hostilities begin Congress’ “authorization.” But the authorization to continue a war already started is not the same as authorization to initiate a war. The war power of Congress delegated by the people has been for decades the prerogative of the Executive Branch, a power explicitly denied to the Executive Branch by the US Constitution. So for decades the so-called “American Democracy” is a country ruled not by the people and their elected repesenaives but by the executive branch. When it comes to war, the American executive branch is a dictatorship.

The destruction of the balance of powers and the Constitution’s limits on the executive branch has been accepted by an insouciant population step by step. Today America no longer resembles the country created by the Founding Fathers. Indeed, I cannot recognize today the country I was born into in 1939. My generation understood that freedom depended on truth, and that truth depended on the media and the universities. We knew that if people were inculcated with lies, the nation would be lost.What has happened to America is that it is under attack by both of its political parties. The Republicans tell Americans about Israel’s enemies. The Democrats tell Americans lies about Americans–that they are racists, homophobic, misogynist, anti-semitic. Trump tells us that we are good, but leads us to evil ends to serve Israel. The Democrats want to replace us with immigrant-invaders.

In the world in which we live powerful weapons exist, weapons that can destroy life on planet Earth. Russian hypersonic missiles cannot be intercepted. Their destructive payload is enormous and is delivered in multiple warheads. A year or so ago a Russian official said that only one Russian missile with its multiple warheads was sufficient to wipe Great Britain off of the face of the earth, Another official said it only takes three to do the same to the United States. The American missiles are less efficient but none the less dangerous if they get through.

Both Russia and the US have thousands of these missiles. How many would Russia have to launch before 3 got through? Why is the world playing at war when Armageddon is hanging over our heads? Israel needs to immediately renounce its doctrine of Greater Israel and the United States needs to immediately renounce its doctrine of American Hegemony. The idiots in charge of governments today are capable of destroying a planet. We must not believe one word of what they say.

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Britain, Italy, New York.

• New York Mayor Won’t Tell The Truth About Islamic Terror Attacks (Pinsker)

March 8, 2026, isn’t a “date which will live in infamy.” It was more like the Ides of March in Shakespeare’s Julius Caesar — the date when a violent conspiracy finally came to light, unmasking the conspirators and revealing their true agenda. March 8, 2026, is the date that New Yorkers learned the truth about their young mayor, Zohran Mamdani: He’s dishonest about Islamic terror attacks. Which means, the next time New York City is targeted by Islamic extremists — and, sadly, the Big Apple’s bloody history strongly suggests there will be a next time — Mayor Mamdani won’t tell New Yorkers what the hell just happened. The way he sees it, that’s not his job. He’ll minimize, obscure, misdirect, and post lies of omission.


That’s because Mayor Mamdani cares more about shielding the Muslim community from “inconvenient PR” than honesty, integrity, or telling the truth about Islamic terror attacks. That’s not his north star. His north star is the crescent moon. Even when the facts are overwhelming. As the AP reported: Two men who brought explosives to a far-right protest outside New York City’s mayoral mansion said they were inspired by the Islamic State extremist group, according to a court complaint. Emir Balat, 18, and Ibrahim Kayumi, 19, were being held without bail after a court appearance Monday on charges that include attempting to provide material support to a foreign terrorist organization and using a weapon of mass destruction. Their lawyers didn’t argue for bail but could do so later.

The homemade devices, which did not explode, were hurled Saturday during raucous counterprotests against an anti-Islam demonstration led by Jake Lang, a far-right activist and critic of New York Mayor Zohran Mamdani, a Democrat and the first Muslim to hold the office. The more we learn about the two ISIS-inspired perpetrators, Balat and Kayumi, the harder it is to deny the awful truth: Two Islamic extremists intended to murder American citizens with homemade bombs — directly outside New York’s mayoral mansion. The defendants said nothing in court, but Kayumi smirked and looked over at Balat as the judge read part of the complaint alleging they acted in support of the Islamic State group. Balat stared ahead at the defense table.

According to the complaint, Kayumi blurted out, as he was being arrested Saturday, that “ISIS” was the reason for his conduct. Balat later told authorities that he had pledged allegiance to the extremists, and Kayumi asserted that he was affiliated with the group, the complaint said. Officers asked Balat whether he was aiming to accomplish something akin to the 2013 Boston Marathon bombing that killed three people and wounded hundreds more. “No, even bigger,” Balat replied, according to the complaint. Yet, according to Mamdani’s X post, you’d get the impression that the victim of the terror attack — Jake Lang — was the one responsible for the violence. Note how Mamdani artfully connected the dots:

Yesterday, white supremacist Jake Lang organized a protest outside Gracie Mansion rooted in bigotry and racism. Such hate has no place in New York City. It is an affront to our city’s values and the unity that defines who we are. What followed was even more disturbing. Violence at a protest is never acceptable. The attempt to use an explosive device and hurt others is not only criminal, it is reprehensible and the antithesis of who we are. Of course, the mainstream media did its best to cover up Mamdani’s dishonesty. As the New York Times put it, “Mamdani Chooses His Words Carefully After Alleged Terror Attack.” So did Politico: “A Bomb Thrown Outside Gracie Mansion Unearths Grim Reality for NYC Mayor.”

Politico, quite naturally, focused extensively on — what else? — the terrible, horrible scourge of Islamophobia. Just five paragraphs down: “The Muslim community in New York has seen a significant increase in Islamaphobic rhetoric and actions since Mayor Mamdami won his primary,” said Murad Awawdeh, a close adviser to Mamdani and the head of the New York Immigration Coalition. “As elected officials and right-wing media pile on by peddling hate speech and false narratives, Islamophobic attacks have become more persistent and aggressive.”

There were seven anti-Muslim hate crimes in the city in January, an increase compared to January 2025, when none were reported, NYPD statistics show. Awawdeh said NYPD statistics alone don’t capture the full picture, noting that Islamophobic rhetoric and actions do not always amount to crimes. Reread that last paragraph and marvel at Politico’s logic: If “Islamophobic rhetoric and actions” don’t amount to crimes, then by definition, they CANNOT be “hate crimes.”

Instead, it sounds a helluva lot more like free speech! So the mainstream media conflated lawful free speech with unlawful hate crimes. Then it used these fake crimes to excuse real, actual, ISIS-inspired terror attacks in the heart of New York City. Politico noted the seven(!) anti-Muslim hate crimes in January 2026. (Which is awful: Every American has the Constitutional right to worship as he or she sees fit.) But how come Politico didn’t mention the 31 antisemitic New York City hate crimes during the exact same time period? Wouldn’t that have been useful contextual info for readers? There were 58 hate crimes in January, and over half targeted Jews! Just 12% targeted Muslims.

Most probable answer: The fact that New York’s Jews are MORE THAN FIVE TIMES LIKELY to be victims of hate crimes in Mayor Mamdani’s city wasn’t helpful in blaming everything, including ISIS-inspired violence, on “Islamophobia.”It beckons the obvious question: How can New Yorkers expect Mamdani to tell them the truth when the Islamic terrorists strike again? Most probable answer: They can’t. Remember the mainstream media’s uproar when New York City radio host Sid Rosenberg suggested Mamdani would cheer another 9/11-style attack? Turns out Rosenberg was wrong: Instead of cheering, Mamdani would pretend it never even happened — and then blame all the chaos on “Islamophobia” instead. (And Mamdani’s wife would like the X posts that insist it’s a “hoax.”)

In hindsight, perhaps we should hire Lang to stage protests in every major city in America. Might be the only way to keep us safe. Hunters call it rough shooting: It’s when you flush the prey from its hiding places, forcing it out into the open.Lang just exposed two murderous, psychotic Islamic terrorists who were lurking among us, patiently awaiting the most opportune time to strike. At least now, Emir Balat and Ibrahim Kayumi won’t have a chance to hurt anyone else. Say whatever you want about Lang, but our citizens are safer with Balat and Kayumi off the streets. So don’t just “Beware the Ides of March.” Beware Mayor Zohran Mamdani. He’s not being honest with you.

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Sagan

 

 

 

 

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Debt Rattle February 11 2026

Feb 112026
 
 February 11, 2026  Posted by at 10:54 am Finance Tagged with: , , , , ,  61 Responses »


Henri Matisse The Blue Window 1913


• Trump Called Police About Epstein in 2006 (Weiss)
• Epstein Files: Victims Buried at Zorro Ranch? (Catherine Salgado)
• Musk Shifts Gears: Moon Megacity Beats Mars Colony (Stephen Green)
• US to Fund Free Speech Initiatives in Europe, Trump Official Reveals (ET)
• French Defense Chief Says Europe Has Until 2030 For War (RMX)
• Lavrov: US No Longer Wants To Pursue Its Own Ukraine Peace Proposal (Antiwar)
• Ukraine Launching Arms Exports At Centers Across Europe (ZH)
• Judge Blocks California’s Law Mandating Federal Agents Remove Masks (ET)
• Trump Threatens Blockade of Almost Completed Michigan-Ontario Bridge (CTH)
• Fetterman Breaks Ranks With Democrats, Supports Federal Voter ID Measure (AmG)
• Hollywood Is Sick — but It’s L.A. That’s Dying (Stephen Green)
• New York Post Publishes Long Excerpt From “Rage and the Republic” (Turley)
• Adam Smith and The Importance of Capitalism (Turley)

 


 

https://twitter.com/EricLDaugh/status/2021039707984101393?s=20 https://twitter.com/Ellieinspace/status/1902069908608782472?s=20

 


 

 


 


Everybody has the story. But what will they do with it? They just love linking Trump to Epstein.

• Trump Called Police About Epstein in 2006 (Weiss)

Newly unsealed Department of Justice documents reveal that in July 2006, then businessman Donald Trump was one of the first to call police to warn them about sex predator Jeffrey Epstein. The documents include a previously unreported 2019 FBI interview summary with former Palm Beach police chief Michael Reiter. Trump had contacted the department shortly after reports of Epstein’s criminal sex investigation became public. The future president contacted Reiter to express relief that authorities were finally acting, suggesting his associates in New York had described Epstein’s behaviors as “disgusting,” and advised investigators to focus on Ghislaine Maxwell, whom he described as “evil.” The Miami Herald first reported on the development.


The first mention of Trump in the FBI interview summary notes that he told investigators that he “threw Epstein out” of Mar-a-Lago, something he has maintained consistently over the years. “Thank goodness you’re stopping him, everyone has known he’s been doing this,” Trump reportedly told the Palm Beach Police Department. “TRUMP told him people in New York knew EPSTEIN was disgusting. TRUMP said MAXWELL was EPSTEIN’s operative, ‘she is evil and to focus on her,’ the report continues. The president also noted that he had witnessed Epstein in the presence of teenagers and was apparently dismayed by what he saw and “got the hell out of there.”

This bombshell document release is narrative-busting stuff. Democrats, desperate to land a punch on President Trump with the Epstein files, have repeatedly attempted to tie the two together as close associates. Epstein, the late financier, was convicted of procuring for prostitution a girl below the age of 18 in 2008 and was facing sex trafficking charges until he died, according to authorities, by suicide in a Manhattan jail cell in 2019. Maxwell is currently serving 20 years in prison for her involvement in the late billionaire pedophile’s crimes.

The media, of course, is framing the latest revelation not as ‘Trump tried to warn authorities’ but rather, as ‘this contradicts the president’s previous claims.’ From the Miami Herald: “That stands in sharp contrast to what Trump told reporters in July 2019 when he was asked if he had any knowledge that Epstein had molested girls. “No, I had no idea. I had no idea,” Trump said at the time It’s a misleading and dishonest spin, something one comes to expect from the media. Trump’s comment came in direct response to reporters asking if he had any knowledge that Epstein had molested girls. He was denying awareness of Epstein’s crimes or the allegations of molestation/sex trafficking that surfaced prominently around Epstein’s 2019 arrest.

Nowhere in this FBI interview does it indicate he had specific knowledge of the criminal molestation, sexual abuse, or trafficking details that later emerged in the full Epstein investigation or his 2008 plea deal. It’s Trump saying he had heard from others about “disgusting” behavior and how he was so creeped out that he had to remove Epstein from his club. Countless people in Palm Beach social circles noticed Epstein had a pattern of questionable behavior with young women, without having direct evidence or knowledge of the felony-level crimes. Good try, media. Maxwell repeatedly invoked her Fifth Amendment right not to testify before the House Oversight Committee during a closed-door virtual deposition on Monday. Her lawyer declared that she would “speak fully and honestly if granted clemency by President Trump.”

“Both President Trump and President Clinton are innocent of any wrongdoing,” the lawyer said. “Ms. Maxwell alone can explain why, and the public is entitled to hear that explanation.”

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I don’t think so. But that’s just me.

• Epstein Files: Victims Buried at Zorro Ranch? (Catherine Salgado)

One message in the Justice Department-released Epstein files claims that two girls, victims of the abusive trafficker, are buried at Zorro Ranch after they died as a result of sexual abuse there. Convicted pedophile Jeffrey Epstein, who died under suspicious circumstances while in jail in 2019, owned one property that reportedly has yet to be raided by federal authorities: Zorro Ranch outside Santa Fe, N.M. Multiple victims have testified to Epstein’s criminal and horrifying sexual abuse there, and multiple powerful men, including a former governor, reportedly visited the place. And an eerie message in the Epstein files seems to indicate that the powerful pedophile was trying to cover up the reason for the deaths of two young women.


Award-winning journalist Catherine Herridge discussed the email and the possibility of investigating the allegations concerning the dead girls with a former FBI special agent and investigator, Jonathan Gilliam. A former staffer at the ranch wrote in the email, “Did you know somewhere in the hills outside the Zorro, two foreign girls were buried on orders of Jeffrey and Madame G? Both died by strangulation during rough, fetish s*x.” Madame G is likely Epstein’s partner-in-crime, Ghislaine Maxwell. Herridge mentioned the possibility of video evidence in the case of the dead girls and asked Gilliam, of the allegation, “Could that be investigated at this stage?”

He affirmed, “That could absolutely be investigated. There is no statute of limitations on that, and then also, if they have testimony or some type of witness saying that that is where they were killed, they can then go out and do a search and potentially find a body.” Gilliam did caution, “It’s going to be difficult years later to prove something like sexual assault, but if you can find the evidence that somebody was killed, that’s totally different. And again, there’s no statute of limitations. But, see, this is also, Catherine, why you don’t just say, ‘Oh, that crime that that person committed is dropped off, we’re not gonna investigate that any further.’ [Because] you never know who these loop back around to.”

He went on to say that if, as some victims’ testimony indicates, “this was a society of people abusing women, then, and some of them died, you really don’t know who was connected to them… and who has knowledge of that. So that’s why you would continue to look into all these different subjects.” This “ongoing conspiracy” involves people still prominent in the media, Hollywood, business, and politics. Powerful pedophiles and sex abusers should NOT get away with their crimes just because they are wealthy and influential. What is the point of being a Republic if our oligarchy always evades accountability? We might as well have an official aristocracy. That’s what the Justice Department ought to understand.

Herridge asked if the released email about the dead girls was blackmail. Gilliam warily answered, “It looks like it could be any of several things. It could be blackmail. It could also be that somebody had some type of information, and they wanted to make it known somewhere along the way that they had nothing to do with that. We’ve seen that in other cases.” He concluded, “I don’t think there’s enough evidence at this point for me to say blackmail or not, but is there a possibility? Of course.” Sounds as if federal authorities need to pay a visit to Zorro Ranch.

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“I’d like to die on Mars, just not on impact…”

• Musk Shifts Gears: Moon Megacity Beats Mars Colony (Stephen Green)

“I’d like to die on Mars, just not on impact,” SpaceX founder Elon Musk half-joked to a capacity SXSW crowd in 2013, reiterating the launch company’s core mission of establishing a self-sustaining human colony on the Red Planet within his lifetime — and his lifelong dream of being one of those colonists. It seems almost impossible that just 13 years ago, SpaceX had yet to land a Falcon 9 booster rocket, much less reuse one. Yet since then, the Falcon is now so inexpensive and reliable that it launched more than 150 times in 2025 alone, accounting for more than 80% of all the mass lifted into orbit last year. While no other company has yet to master it, reusable boosters are the norm for SpaceX, and its Starship rocket — still in development — promises to reduce launch costs by at least one order of magnitude.


Times change. So do dreams. “For those unaware,” Musk posted to X (another Musk company) on Sunday, “SpaceX has already shifted focus to building a self-growing city on the Moon, as we can potentially achieve that in less than 10 years, whereas Mars would take 20+ years.” “It is only possible to travel to Mars when the planets align every 26 months (six month trip time), whereas we can launch to the Moon every 10 days (2 day trip time). This means we can iterate much faster to complete a Moon city than a Mars city.” That’s always been true — orbital mechanics are unforgiving in the extreme — but Starship development stalled badly enough in 2025 that a change in focus was perhaps inevitable.

Musk had hoped to launch multiple Starships late this year on an unmanned exploratory/proof-of-concept mission during the next Mars launch window (the optimal Earth-Mars transfer opportunity using a fuel-efficient Hohmann transfer orbit). But too many technologies and processes remain unproven, including the orbital refueling that makes it possible for Starship to reach Mars. Or even Luna, for that matter. Starship’s unprecedented cargo capacity for deep-space missions is only possible through orbital refueling performed by other Starships acting as LEO gas stations. Direct-transfer windows to Luna — with flight times of just three to five days — open roughly twice per month. The Hohmann window to Mars opens about every 26 months, with a flight time of up to nine months. Another technology SpaceX has yet to fully iterate is crew protection from radiation during such a long flight.

Iteration is the key, and at 54 years old, Musk probably can’t afford the time it will take to iterate Starship for manned Mars missions — certainly not on the scale needed to make life even semi-tolerable for, say, an aging launch company founder “It’s not any easier landing on the moon,” space photographer Andrew McCarthy added, “but once getting mass to the moon is a solved problem Mars becomes so much easier.” Indeed. Musk also said that SpaceX’s core mission remains unchanged, to “extend consciousness and life as we know it to the stars.” “Aim for the moon,” they say, because “If you miss, you may hit a star.” I’d still love to see human footprints on Mars in my lifetime, but if the alternative is a large and growing American population on Luna, I’ll take it.

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”.. the policy “has got nothing to do with racism” and is “a classic example of how the EU proceeds to amass for itself more powers to regulate orderly life and get involved in politics.”

• US to Fund Free Speech Initiatives in Europe, Trump Official Reveals (ET)

The Trump administration announced plans to direct funding toward promoting free speech in Western allied democracies, a senior State Department official said on Monday. The initiative bolsters efforts to counter European online regulations categorized by Washington as censorship. Under Secretary of State for Public Diplomacy Sarah Rogers discussed the initiative during a trip to Europe. It includes grants to support free expression, a result of concerns about rules such as the European Union’s Digital Services Act and Britain’s Online Safety Act. These laws, which E.U. officials say aim to deter hate speech and misinformation, have been scrutinized by U.S. officials as restricting the free speech of American tech firms and suppressing immigration policy critiques.


“One way my office is going to operate differently is we’re going to be very forthright and transparent about everything we do,” Rogers said during a panel discussion in Budapest on Monday. She added that her role allows directing U.S. funding through grants, stating, “I want to promote free speech in Western allied democracies, and … that’s what my grantmaking is going to be doing.”Rogers, appearing alongside a top aide to Hungarian Prime Minister Viktor Orbán, underscored the importance of free speech for democracy. “The United States government, via me, but not only me, has been engaging aggressively on the issue of free speech, because you don’t have self-governance without freedom of speech, you can’t have a democratic deliberation if viewpoints are proscribed from the public square,” she said.

Rogers is scheduled to stop in Dublin, Budapest, Warsaw, and Munich to discuss digital freedoms with officials and others. The administration’s December National Security Strategy said that European leaders were censoring speech and suppressing opposition to immigration policies, warning of the continent’s “civilizational erasure.” Rogers said European polls showing European views on migration are similar to those in the United States.The United States imposed last month visa bans on a former European Union commissioner and four anti-disinformation activists. The administration labeled them agents of censorship for working to regulate U.S. social media platforms. European leaders lambasted the bans. They defended the commissioner and activists’ rights to push for regulations on foreign companies operating locally.

U.S. Secretary of State Marco Rubio revealed the designations on Dec. 23, 2025. He called the individuals “agents of the global censorship-industrial complex” and blocked their entry to the United States.The European Commission unveiled a new “anti-racism” strategy on Jan. 20, aiming toward a “Europe free from racism” with increased anti-discrimination enforcement and training. The Commission said the training will help civil servants “recognise and tackle racial bias, while fostering greater cultural awareness and sensitivity.” It also requires European educators to “address teacher training and professional development on diversity and inclusion, as well as promoting diversity in the teaching profession itself.”

Eric Kaufmann, a professor at the University of Buckingham, said the strategy “betrays an illiberal moralizing worldview” that could lead to “suppressing free speech and asphyxiating the historical pride and culture of Europe’s ethnic majorities.” Jacob Reynolds of think tank MCC Brussels called it a “slide to cultural socialist ideas.” Reynolds previously told The Epoch Times that he believes that the policy “has got nothing to do with racism” and is “a classic example of how the EU proceeds to amass for itself more powers to regulate orderly life and get involved in politics.”

“This is not [anti-racism], as ordinary people understand it,” he said. “This is the kind of woke [diversity, equity, and inclusion] agenda that has come to dominate the way that lots of civil servants, lots of academics, lots of civil society organizations think.”

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They really want war. Trump really doesn’t.

• French Defense Chief Says Europe Has Until 2030 For War (RMX)

France and Europe have four years to prepare for war, said Fabien Mandon, chief of the defense staff of the French Armed Forces, who cited Russia as Europe’s biggest threat. His speech at a major naval conference outlined that France, as well as its allies, must take into account that this war will break out in the near future and that the French military must be ready by 2030. “Today, we are preparing for war,” he said, according to BreakingDefense. During his speech at the naval conference, Mandon stated that France is not prepared for war and the country had “an insufficient number of ships and armaments.” He stated the nation needs “more missiles with greater range and lethality.”


Mandon recently made headlines for stating that Europeans and the French must be ready to lose children in a war, stating: “You have to accept that you will lose your children,” which is necessary to defeat Russia during a November speech at the National Congress of French Mayors. His words caused national shock, while the representatives of the parliamentary parties protested sharply in connection with his comment. As in November, he named Russia as the main source of the threat of war.

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“Lavrov claimed that the US and Russia came to an agreement on Ukraine during President Trump and Russian President Vladimir Putin’s summit in Anchorage, Alaska, back in August 2025.”

• Lavrov: US No Longer Wants To Pursue Its Own Ukraine Peace Proposal (Antiwar)

Russian Foreign Minister Lavrov said in an interview published on Monday that the US no longer wants to implement a Ukraine peace deal that it previously proposed, the latest sign that there’s little chance the grinding war will come to an end anytime soon. Lavrov claimed that the US and Russia came to an agreement on Ukraine during President Trump and Russian President Vladimir Putin’s summit in Anchorage, Alaska, back in August 2025. He didn’t elaborate on the details of the potential deal, but it’s believed to involve Ukraine ceding territory it still controls in the Donbas, a condition included in a 28-point peace plan that was later drafted by the Trump administration.


“In other words, we were told that the Ukrainian issue must be resolved. In Anchorage, we accepted the United States’ proposal. To put it straightforwardly, they proposed, and we agreed – the problem should be solved,” Lavrov told TV BRICS. “The position of the United States was important for us. Having accepted their proposals, we essentially fulfilled the task of resolving the Ukrainian issue and moving toward comprehensive, broad, mutually beneficial cooperation.”

The Russian diplomat said that despite the “positive” summit, the US began imposing sanctions on Russia a few weeks later and has continued the economic pressure. “New sanctions are imposed, attacks on tankers are staged in international waters in violation of the UN Convention on the Law of the Sea, and India and other partners are discouraged from purchasing affordable Russian energy, while Europe has long prohibited such purchases, forcing them to buy American liquefied natural gas at significantly higher prices,” he said.

Lavrov added that he didn’t see a “promising future in economic terms” when it comes to US-Russia relations. “Thus, in the economic sphere, the United States has effectively declared a goal of economic domination,” he said. Elsewhere in the interview, which focused on Russia’s relationship with other BRICS nations, Lavrov said the Biden administration has turned the US dollar into a “weapon,” prompting Russia and other countries to reduce their reliance on the US currency. “Under the Biden administration, the United States has taken every step to weaponize the dollar against those it considers inconvenient,” he said, adding that the policies have continued under the Trump administration.

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“Moscow’s allegations specify that modern, Western-supplied stockpiles are being used far outside the actual Ukrainian battlefield, and that the illicit trade has enriched powerful Ukrainian officials, while increasing crime and terrorism.”

• Ukraine Launching Arms Exports At Centers Across Europe (ZH)

Ukraine has another money-making idea – instead of begging for urgently needed funds from Western partners, it plans to start exporting weapons, instead of only buying them. But there is a big and unexpected catch to the whole scheme. Flush with external funding connected to the war with Russia, President Volodymyr Zelensky has announced ambitious plans to open ten arms export hubs across the European continent by the end of 2026. Given Ukraine is still an active warzone, and given the likelihood that Russian forces will continue targeting defense manufacturing sites, Ukraine is seeking to have European allies play host to Ukrainian arms production plants.


For example, Ukrainian-made drones are expected to be in production on German soil later this month. Zelensky laid out new details of Ukraine’s move into foreign arms markets, describing it as a long-term economic necessity, in a speech before the Kyiv Aviation Institute on Sunday night. Ukraine’s defense sector rapidly grown as a result of the war, accounting for roughly 7% of GDP, according to July 2025 estimates from the Kyiv School of Economics Institute. “Today we are opening up exports. In Europe in 2026 there will be 10 export centers. These are the Baltic countries and the countries of Northern Europe. In 2026, 10 representative offices will operate,” Zelensky said, as quoted in Reuters.

“This is a [production] line that is already working. The production lines are already operating in the UK. These are Ukrainian technologies,” Zelensky added – though without providing much more in the way of specifics. In essence, Ukraine is seeking to sustain its war effort while locking in a long-term economic leverage by expanding its defense production sector, but in a protected and safe way far from the front lines. Simultaneously, Moscow has complained that Ukraine is already deep in the black market export of arms siphoned off from Western deliveries, which Russian media alleging as follows:

Russian officials have long accused Kiev of fueling global arms proliferation through the black market and have specifically alleged that Ukraine has supplied weapons, including those it received from the West, to militant groups in Africa. Last week, Russian envoy to the UN Vassily Nebenzia reiterated the accusations and told the Security Council that “the Kiev regime is actively involved in… supplying terrorists with weapons, including drones, and training fighters,” citing the Sahel region as an example. Mali’s Prime Minister Abdoulaye Maiga has accused Kiev of supplying kamikaze drones to terrorists. Some serious question remain, however…

Of course, Russian weapons also often make their way to African battlefields. But Moscow’s allegations specify that modern, Western-supplied stockpiles are being used far outside the actual Ukrainian battlefield, and that the illicit trade has enriched powerful Ukrainian officials, while increasing crime and terrorism.

Read more …

Keep cops safe, why don’t you.

• Judge Blocks California’s Law Mandating Federal Agents Remove Masks (ET)

A federal district court judge partially blocked a California law barring law enforcement officers from wearing masks in a Feb. 9 ruling, finding the law discriminated against federal officers. District Court Judge Christina Snyder ruled in favor of the Trump administration, prohibiting the state from enforcing its No Secret Police Act—which was scheduled to go into effect earlier this year—against federal law enforcement officers. The federal government sued California, challenging the law as well as with another law—the No Vigilantes Act, that requires federal officers to wear identification. Snyder ruled that the second law was not discriminatory. California had agreed to pause enforcement of the laws, which went into effect on Jan. 1, while the Trump administration challenged them in court.


Attorney General Pam Bondi praised the court’s decision on Feb. 9. “These federal agents are harassed, doxed, obstructed, and attacked on a regular basis just for doing their jobs,” Bondi posted on X. “We have no tolerance for it. We will continue fighting and winning in court for President Trump’s law-and-order agenda—and we will always have the backs of our great federal law enforcement officers.” California Gov. Gavin Newsom signed both bills into law last year in response to federal immigration enforcement operations in the state. The No Secret Police Act prohibited any law enforcement officer from wearing a facial covering while performing official duties unless the agency employing the officer has a policy regarding the covering. Some exceptions were made for SWAT teams and in other cases.

The No Vigilantes Act requires any law enforcement officer operating in the state to visibly display identification indicating his or her agency and name or badge number when working. The U.S. Department of Justice (DOJ) argued the two state laws violated the Supremacy Clause of the U.S. Constitution, which mandates that if state laws conflict with federal laws, the federal law takes precedence. The department also argued that the laws violated the intergovernmental immunity doctrine, which prevents federal and state governments from interfering with each other’s operations.The DOJ argued that prohibiting facial coverings and requiring identification put officers’ safety at risk as violent crime against federal immigration officers has skyrocketed in recent months.

Snyder found the No Secret Police Act did not apply equally to all law enforcement officers in the state, and therefore it “unlawfully discriminates against federal officers,” according to her ruling.“Because such discrimination violates the Supremacy Clause, the court is constrained to enjoin the facial covering prohibition. California may not enforce the facial covering prohibition of the No Secret Police Act, SB 627 … against federal law enforcement officers,” she ruled. The judge denied the federal government’s other challenges. The state’s law was already receiving pushback by the largest metropolitan police agency in the state. Los Angeles Police Department Chief Jim McDonnell said his officers would not enforce it.

“The reality of one armed agency approaching another armed agency to create conflict over something that would be a misdemeanor at best—or an infraction—it doesn’t make any sense. It’s not a good public policy decision and it wasn’t well thought out, in my opinion,” McDonnell said during a news conference on Jan. 29.

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He uses Canadians as toys. It’s what you get for electing Justin.

• Trump Threatens Blockade of Almost Completed Michigan-Ontario Bridge (CTH)

Writing on a Truth Social post earlier this evening, President Trump is threatening to block the U.S. side of a new bridge that links Detroit, Michigan to Ontario, Canada: (Truth Social) – “As everyone knows, the Country of Canada has treated the United States very unfairly for decades. Now, things are turning around for the U.S.A., and FAST! But imagine, Canada is building a massive bridge between Ontario and Michigan. They own both the Canada and the United States side and, of course, built it with virtually no U.S. content. President Barack Hussein Obama stupidly gave them a waiver so they could get around the BUY AMERICAN Act, and not use any American products, including our Steel.


Now, the Canadian Government expects me, as President of the United States, to PERMIT them to just “take advantage of America!” What does the United States of America get — Absolutely NOTHING! Ontario won’t even put U.S. spirits, beverages, and other alcoholic products, on their shelves, they are absolutely prohibited from doing so and now, on top of everything else, Prime Minister Carney wants to make a deal with China — which will eat Canada alive. We’ll just get the leftovers! I don’t think so.

The first thing China will do is terminate ALL Ice Hockey being played in Canada and permanently eliminate The Stanley Cup. The Tariffs Canada charges us for our Dairy products have, for many years, been unacceptable, putting our Farmers at great financial risk. I will not allow this bridge to open until the United States is fully compensated for everything we have given them, and also, importantly, Canada treats the United States with the Fairness and Respect that we deserve. We will start negotiations, IMMEDIATELY. With all that we have given them, we should own, perhaps, at least one half of this asset. The revenues generated because of the U.S. Market will be astronomical. Thank you for your attention to this matter!” ~PRESIDENT DONALD J. TRUMP

The USMCA renegotiation plan likely plays a big part in this announcement. Don’t react, just watch.

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Who doesn’t love him?

• Fetterman Breaks Ranks With Democrats, Supports Federal Voter ID Measure (AmG)

Senator John Fetterman (D-PA) has broken ranks with Democratic leadership and has come out in favor of requiring photo ID for voting in elections across the nation. Fetterman appeared on the Fox News program “Sunday Morning Futures” yesterday and told host Maria Bartiromo that voter ID wasn’t an “unreasonable” requirement, saying, “It’s not a radical idea for regular Americans to show your ID to vote.”


Fetterman pointed to states like Wisconsin that have similar protections requiring proof of citizenship for federal voter registration and photo ID at the polls. He noted that 60% of voters in Wisconsin support such safeguards, despite having elected liberal justice Susan Crawford in 2025 to the Wisconsin Supreme Court. House Republicans plan to vote this week on the Safeguarding American Voter Eligibility (SAVE) America Act with national polls showing 83% of Americans support the measure, including 71% of Democrats. House Minority Leader Hakeem Jeffries continued to decry the SAVE America Act as “voter suppression” and accused President Trump and GOP leadership of trying to steal the upcoming midterm elections by nationalizing them.

Fetterman rejected comparisons of the SAVE America Act to resurrecting Jim Crow laws as Democratic leaders have claimed. The Pennsylvania Senator also broke with his party leadership on the issue of funding for the Department of Homeland Security (DHS) which is expected to run out on Friday unless lawmakers can break a deadlock.

https://twitter.com/i/status/2020564856663884171

Fetterman came down on the side of border enforcement and said he does not support shutting down the government, saying, “I don’t ever want to vote to shut our government down again.” Fetterman told Bartiromo that he expects Democrats and Republicans to remain divided beyond Friday’s funding deadline.

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“They have what we call the Noah’s Ark problem,” Willems continued, “which is, if they effectuate this deal, they’re going to have two of everything.”

• Hollywood Is Sick — but It’s L.A. That’s Dying (Stephen Green)

Hollywood as we know it is sick — not the kind of sick you might usually think of with the woke agenda pushing, child-actor grooming, and all the rest — but the “sick and dying” kind of sick. Netflix’s Chief Global Affairs Officer warned Monday that Hollywood will suffer billions of dollars worth of job losses if rival Paramount Skydance succeeds in buying Warner Bros. Discovery out from under the streaming giant’s buyout bid. During an interview on Fox Business Network, Clete Willems said, “Paramount has identified $6 billion in synergies in the offer that they made, which is code for $6 billion in job cuts.” “They have what we call the Noah’s Ark problem,” Willems continued, “which is, if they effectuate this deal, they’re going to have two of everything.”


There’s also the matter of debt. The Paramount offer is generous, but requires billions in financing — including personal security guarantees from Oracle multibillionaire Larry Ellison, whose son David runs Paramount. So when Willems says Paramount will “have to cut, cut, cut,” if the studios merge, he’s probably right. But similar downsizing wouldn’t happen when and if Netflix buys Warner, instead? Color me skeptical that Netflix’s bid magically spares the axe — especially when it already churns out content like it’s going out of style (which, quality-wise, it often is). Netflix wants Warner more for its old intellectual properties for streaming than it does for its production facilities or crews.

Netflix already spews out plenty of content on its own, seemingly without much care about actual quality in most cases. The last thing Netflix needs is probably more output; it just needs that sweet, sweet Warner IP to fill the streaming hours. “Cut, cut, cut,” indeed.mRegardless, either buyout likely means the end of Warner Bros. as Hollywood has known it for just over a century — and that, gentle reader, is the absolute least of Hollywood’s troubles. Or maybe I need to rephrase that bit. Maybe Hollywood is the sickness, and Los Angeles is the patient at risk of dying. The Hollywood Reporter featured a telling report in recent weeks, headlined with a dire warning for the City of Angels: “Los Angeles’ Hold on Hollywood Is Slipping.”

When 2025 wrapped, Hollywood tallied up its Los Angeles-based production figures, and the numbers were stark at best. “Superhero movies have fled to London,” HR’s Erik Hayden wrote, and “three major studios (Netflix, Paramount and Lionsgate) have inked expansive deals to build or lease in new production bases in New Jersey; states like Georgia, Louisiana and New Mexico are fighting for their share of projects with generous tax incentives while Illinois is becoming a player in its own right.” The result is that in 2025, there were almost as few productions in L.A. as there were during the panic-fueled COVID lockdowns. Read that again — and it’s close, too. Hollywood’s Los Angeles shoots dropped almost in half during COVID, from over 36,000 in 2019 to just under 19,000 in 2020. Things bounced back almost immediately when the lockdowns ended, right back up to 37k.

But something happened in 2023, and that number dropped precipitously to 24,000. Last year? Just 19,694 shoots in L.A.— barely above the 2020 lockdown abyss, yet it’s boom times anywhere that isn’t business-hostile California. Streaming killed Hollywood’s movie theater cash cow without even pretending to look for a golden goose first. Instead of enjoying a night out at the movies, anonymous Hollywood screenwriting veteran George MF Washington warned in 2022, “streaming subscribers expect a constant firehose of content fired directly into their faces 24/7/365.” Now the largest streamer is about to buy one of Hollywood’s oldest and most storied studios, just as Los Angeles plumbs COVID-era depths of disaster with no relief in sight.

Hollywood is sick, but it might be Los Angeles that’s dying.

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Loooong excerpt.

• New York Post Publishes Long Excerpt From “Rage and the Republic” (Turley)

I am delighted that the New York Post decided this week to run a long excerpt from my new book, “Rage and the Republic: The Unfinished Story of the American Revolution.” I wanted to share the full excerpt and a clip from the audiobook below. Here is the description and excerpt that appeared in the New York Post:


America’s Revolutionaries: We’re Our Own Greatest Creations, As Tom Paine Proved.
In his new book, “Rage and the Republic: The Unfinished Story of the American Revolution,” Professor Turley explores the meaning and future of democracy on the American Revolution’s 250th anniversary. The first half looks back at the unique confluence of people and events that led to the establishment of the American republic.The second half looks forward, exploring whether the American republic can survive in the 21st century in light of changes ranging from artificial intelligence to robotics to global governance systems. Turley believes the American republic is uniquely suited to address those challenges, but it will require a return, not a rejection, of the core values that defined the American Revolution.

Excerpt: “Like Saturn, the Revolution devours its children.” Those words from journalist Jacques Mallet du Pan during the French Revolution referred to the Roman God Saturn, or Kronos in Greek. Kronos attempted to defy his mother’s prophesy that he would be overthrown by one of his children by them upon their births. When his son Zeus was born, Kronos’s consort Rhea decided to trick him by wrapping a stone in a swaddling blanket and handing it to him to devour. She then hid Zeus on Crete. Once he reached adulthood, Zeus returned and, fulfilling the prophesy, defeated his father. The story of Kronos held obvious meaning for Mallet du Pan, who watched with alarm as the French Revolution devoured first its aristocratic foes and then its own supporters.

It is a story played out over and over again in history as ambition becomes activism, activism becomes extremism, and extremism becomes authoritarianism. Call it the Saturn gene. We are all Saturn’s children with an inherent impulse that rests within each of us: the capacity of all mortals to become monsters. The lesson of Saturn would also be raised in the American Revolution by none other than Thomas Paine. Long before Jefferson put pen to parchment on the Declaration of Independence, it was Paine who would speak of the natural and inalienable rights as the basis for the American Revolution. It was Paine, in his pamphlet Common Sense, who made the case for “independency.” It was also Paine who saw, firsthand, the ability of a revolution to consume itself.

Paine would play a significant role in two revolutions that took strikingly different paths in America and France. Among the best-known figures of the American Revolution, only the Marquis de Lafayette could make a similar claim. Paine learned the dangers of unrestrained popular government in the hardest possible way. It came close to killing him in France. He would learn that what was lost in Paris was precisely what he had left in Philadelphia—a system that could channel tremendous political and economic pressures into a stable Republic.

We are again living in revolutionary times. It is not just classic revolutions where governments are overthrown, but rather revolutions that can change countries from within. We refer to the Industrial Revolution and the Information Revolution to signify the transformative changes that they brought to society. Often those new realities produce countervailing political changes in government. The twenty-first century has seen the acceleration of new technology like artificial intelligence (AI) that is reframing every aspect of human existence. These changes will redefine not just the workplace but also the place of citizens in society at large. The question is whether American democracy can survive in the twenty-first century or collapse under the same forces of democratic despotism that brought down its contemporaries. It is the unfinished story of the American Revolution.

Thomas Paine saw this up close in Paris at the height of the French Revolution. He had been among those voices early on among the French Jacobins who cheered the stripping away constitutional protections to unleash the “general will.” The insatiable appetite of Saturn took hold of the liberators.bFor Paine, the ultimate collapse of his ideals came in December 1793. He had just been stripped of his seat in the French National Convention in a vote of no confidence. In watching the executions in Paris, Paine lamented to a friend, “Ah France, thou hast ruined the character of a revolution virtuously begun, and destroyed those who produced it.”

The long-awaited knock at his bedroom door came on December 28, 1793. There stood five policemen and two representatives of the feared Committee on General Safety. When asked for the charge, they just shrugged. Such details were now largely meaningless in France. It would not be democratic ideals but poor ventilation that would save Paine from joining his decapitated colleagues in Paris. After opening the door to allow more air into the cell, guards missed the chalk mark designating him and his cellmates for death. Paine would soon walk out of the Palais du Luxembourg as the Terror came to an end with the death of Robespierre..[..]

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“The Importance of Capitalism…in the Founding and the Future of the American Republic..”

• Adam Smith and The Importance of Capitalism (Turley)

Capitalism is under attack from classrooms to town halls to voting booths. According to polls, a rising segment of the population is calling for socialism or even communism as young people embrace a radical chic in the country. And this week, another socialist looks ready to join a growing “squad” in Congress. On our 250th anniversary, the fight over capitalism and economic freedom could prove critical to the future of this republic. However, there is an unexpected change that could help reverse this trend. Treasury Secretary Scott Bessent recently announced that one million families have already signed up for the new tax-privileged Trump Accounts, which will be seeded with $1,000 in taxpayer funds for children born between Jan. 1, 2025, and Dec. 31, 2028.


With an anticipated 25 million participants, the initiative is one of the most ambitious and potentially impactful in U.S. history. But its true impact may be far greater than the wealth that it could generate for families. It may just be the determinative factor in preserving this Republic in this century. This month, Simon and Schuster released my new book on the founding and the future of the American republic — “Rage and the Republic: The Unfinished Story of the American Revolution.” The book asks whether this unique republic can survive in the 21st century amid growing economic, political, and social challenges.

What many celebrating our 250th anniversary do not appreciate is that this is also the 250th anniversary of Adam Smith’s Wealth of Nations, released around the same time as the Declaration of Independence. The book was not a great success in Great Britain. In addition to its foundational support for capitalism, it challenged the mercantilist policies of the British Empire and supported the claims of the colonies in seeking greater economic freedoms. Smith, however, was immediately embraced by the founders, who saw his work as the perfect economic theory to advance their political theory. Ours was the first Enlightenment Revolution based on a belief in natural rights that came from God, not governments.

Yet, the founders knew that true individual liberty could not be achieved without economic freedom. Smith’s idea of the “invisible hand” offered an idea of individual economic freedom where whole economies were driven by the individual tastes and choices of citizens. The combination would prove transformative, as the U.S. became not only the world’s oldest large-scale democracy but also history’s greatest economy. We will need that combination in the years to come to maintain what I call a “liberty-enhancing economy.” The book looks at the expected impact of new technology, from robotics to AI, in the possible creation of a large population of unemployed, unproductive citizens.

The question is how the likely state support for a large segment of our population will change their relationship to the government, changing the dynamic of what it is to be a citizen. The danger of a “kept citizenry” is that we will lose the essential independence that our founders wanted to instill in new Americans from their government. As we face these challenges, we are seeing a rise in support for socialism and communism in the West. It is the rage among young people who have no experience or memory of the socialist governments that collapsed in the prior century. Their understanding of socialism comes from armchair revolutionaries in colleges and the sloganeering of figures like Zohran Mamdani about introducing them to “the warmth of collectivism.”

That brings us back to the Trump accounts. The insidious aspect of past socialist systems is that their consistent failure often resulted in demands to “double down,” to increase state subsidies, nationalizations, and central planning. For their part, citizens can become accustomed to government support. When socialist François Mitterrand came to power in France in 1981, promising a “rupture with capitalism,” he quickly destroyed the country’s economy. However, he continued to dazzle French citizens with promises of free money, even appointing Andre Henry as the Minister of Free Time to assist citizens in their new socialist leisure.

The same seductive appeal is evident today in the U.S. and other Western countries. Sixty-five percent of Democratic voters have a favorable view of socialism. An even greater percentage of young Britons want to live under socialism, and 72 percent favor nationalization of industries.Capitalism was key to the success of the American Republic, and it will be even more important in the coming years. As jobs are wiped out through robotics and AI, we will have to shift to homocentric jobs and productivity to preserve not just economic but also political liberty. We cannot preserve that liberty as some arts-and-crafts citizenry, entertained with state-subsidized leisure and distractions.

The $6.25 billion gift of Michael and Susan Dell (now augmented by dozens of corporations) could offer the single best hope for the survival of our system. Millions of young people will be able to experience the benefits of investments, savings and, most importantly, economic independence. It has the benefit of being a tangible lesson about capitalism — not simply an abstraction pulled from the pages of the Wealth of Nations. As socialist experiments replicate the failures of past eras, these accounts will offer a stark contrast for a rising generation. It is an investment that must be extended beyond 2028 to inculcate values of economic and political independence in the 21st century.

For young Americans, there has been a continual barrage of anti-capitalist sentiments. However, there is still muscle memory in this country of the gifts that free markets brought to a free people.

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Debt Rattle November 5 2014

Nov 052014
 
 November 5, 2014  Posted by at 2:34 pm Finance Tagged with: , , , , , , , , , , ,  5 Responses »


Mathew Brady Units of XX Army Corps, Army of Georgia on Pennsylvania Avenue, Washington DC May 24 1865

• Ayn Rand vs Adam Smith: The Only Midterm Election That Counts (Paul B. Farrell)
• Singer’s Elliott: U.S. Growth Optimism Unwarranted as Data ‘Cooked’ (Bloomberg)
• This Stock Market Rally Is For Suckers (MarketWatch)
• BOJ’s Kuroda Vows To Hit Price Goal, Stands Ready To Do More (Reuters)
• US Will Benefit Most From Japan’s Pension Fund Reform (CNBC)
• Draghi To Face Challenge On ECB Leadership Style (Reuters)
• EU Cuts Growth Outlook as Inflation Seen Below ECB Forecast (Bloomberg)
• Euro Area Limping Toward Deflation Fuels QE Calls as ECB Meets (Bloomberg)
• ECB Needs Japanese Lessons (Bloomberg)
• Look Out Below! Oil Is Not Done Falling (CNBC)
• Oil Continues To Slide, With Brent At Lowest In Over Four Years (MarketWatch)
• T. Boone Pickens: The Real Problem With Oil (CNBC)
• Russia-Ukraine Crisis Shields EU Gas From Oil Price Rout (Bloomberg)
• New Junk-Bond Derivatives Are Hot as Traders Get Creative (Bloomberg)
• IMF Gave Richer Countries Wrong Austerity Advice: Internal Auditor (Reuters)
• China Home Buyers Rushing Online to Finance Downpayments (Bloomberg)
• 25 Years Since The Wall Fell, Germany’s Best Days Are Behind It (MarketWatch)
• A Crazy Idea About Italy (Jim O’Neill)
• Signs, Wonders and QE Heroics (James Howard Kunstler)

To the extent there’s any actual choices to be made in these kinds of elections. Why waste your time?

• Ayn Rand vs Adam Smith: The Only Midterm Election That Counts (Paul B. Farrell)

Forget who controls the Senate. There is one and only one election that matters, an election that will decide the global balance of power this century. Specific candidates on any other ballot are irrelevant. The one race will be decided by the only two real candidates that count. All other candidates, regardless of political party, are merely pawns, surrogates, proxies for the two real candidates in this grand battle. And the winner not only wins for their party,but also gets to promote their brand of capitalism. They win the future. Get it? The winner between these two key candidates gets more than domination of the American political system. These two candidates are in a battle to dominate the world, gain control of the world’s natural resources in a totally unrestricted free market—to drill with Russia in the Arctic Ocean, drill for oil on America’s public lands and national forests, to export domestic oil, to build pipelines, haul oil in rail tankers across state lines, to frack for oil under public rivers, risk fresh water supplies, and so much more.

Yes, the only two candidates in the only election that counts today and in every other election this century are: Adam Smith, a moral philosopher and father of American capitalism thanks to the publication of his classics on economics, “The Wealth of Nations,” and its companion “The Theory of Moral Sentiments.” Adam Smith’s opponent on the ballot is his archrival, Ayn Rand, author of several 20th century works on capitalism, including “Atlas Shrugged” and “The Fountainhead.” But remember: all other candidates, on every ballot, are just proxy votes for these two candidates who will decide the balance of power in the world and the survival of the planet. Yes, it’s that simple. These two icons face off in a brutal battle for the soul of capitalism and control of the collective conscience of America.

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Not a fan of the man, but he’s dead on here.

• Singer’s Elliott: U.S. Growth Optimism Unwarranted as Data ‘Cooked’ (Bloomberg)

Paul Singer’s Elliott Management Corp. said optimism on U.S. growth is misguided as economic data understate inflation and overstate growth, and central bank policies of the past six years aren’t sustainable. The market turmoil in the first half of October may be a “coming attractions” for the next real crash that could turn into a “deep financial crisis” if investors lose confidence in the effectiveness of monetary stimulus, Elliott wrote in a third-quarter letter to investors, a copy of which was obtained by Bloomberg News. “Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,” New York-based Elliott wrote. “When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.” Six years of near-zero interest rates and three rounds of asset purchases by the Federal Reserve have fueled economic growth and helped U.S. stocks more than triple from their 2009 low when including dividends.

The stock market has rebounded 8.3% through yesterday from a six-month low on Oct. 15, fueled by better-than-forecast economic data and improving earnings reports. The 70-year-old Singer, one of the biggest backers of Republican politicians, reiterated criticism that monetary policies won’t create lasting growth. While the U.S. is doing better than the rest of the world, the acceleration in the second quarter only reversed a “terrible” first quarter and has yet to be sustained in the remainder of the year, Elliott wrote. “We do not think this optimism is warranted, and we think a lot of the data is cooked or misleading,” Elliott, which manages $25.4 billion and was founded by Singer in 1977, wrote. “A good deal of the economic and jobs growth since the crisis has been fake growth, with very little chance of being self-reinforcing and sustainable.” Elliott said that the reported growth numbers are too high because the official inflation number is understating actual inflation by as much as 1% a year.

That’s because economists focus on measures such as core inflation or make “hedonic adjustments” for improvements in the quality of consumer goods. Inflation is also distorted “by the increasing gap between the spending basket of the well-off and that of the middle class,” the firm said. “The inflation that has infected asset prices is not to be ignored just because the middle-class spending bucket is not rising in price at the same rates as high-end real estate, stocks, bonds, art and other things that benefit from” quantitative easing, Elliott wrote. The unemployment rate, at 5.9% in September, doesn’t reflect that the workforce participation rate is at a 35-year low, according to Elliott, and that full-time jobs have been replaced by part-time jobs, and high-paying jobs by relatively low-paying jobs. Real wages, the firm said, have been stagnant since the financial crisis.

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And it’s a very well executed set-up too.

• This Stock Market Rally Is For Suckers (MarketWatch)

After last week’s remarkable U.S. stock market rally, a lot of investors are cheering. After all, the Dow made an all-time high, won back the lost 1,000 points, and ignored the 8% pullback. I hate to be a party-pooper, but this is not a time to celebrate, but rather to be cautious. What could go wrong? Let’s begin by analyzing last week’s hollow Halloween rally:

1. On Friday, Oct. 31, five stocks were primarily responsible for Dow’s advance. The previous day, Visa had accounted for around 123 points of the 221-point rally. Take away Visa and the rally was a lot less impressive.

2. Friday’s surge was prompted by the Bank of Japan, which promised more stimuli (I’m guessing they are on QE 35, but who’s counting?) Since March 2000, the Nikkei 225 has tumbled from 20,000 to 16,000, so maybe more stimuli from the BOJ is needed (just kidding).

3. On Friday, there were no plus-1000 ticks on the NYSE Tick, which tells you that the rally was another head-fake without institutional involvement. Typically, you will see at least four or five plus-1000 ticks on bullish days.

4. In addition, volume was low, especially for the last day of the month.

5. Moreover, the S&P 500 that day did not rise above its overnight high, which is generally a sign of domestic weakness. During the day, it did not take out the previous all-time high. If this were a true bull market, breadth, volume, and institutional presence would have been a lot stronger.

6. Only five out of 20 stocks led the transports. If this were a broad-based rally, more of the transports would have participated.

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You would expect falling oil prices to provide the Japanese, like Americans, with some very welcome, even necessary, financial breathing room. But PM Abe and BoJ’s Kuroda will have none of it. And no matter how you look at it, there’s something at best curious about a central bank that decides to throw ‘free money’ at an economy BECAUSE it sees falling resource prices, which would supposedly make money available already.

• BOJ’s Kuroda Vows To Hit Price Goal, Stands Ready To Do More (Reuters)

Bank of Japan Governor Haruhiko Kuroda, who last week stunned global financial markets by expanding a massive monetary stimulus program, said the central bank is ready to do more to hit its 2% price goal and recharge a tottering economy. Kuroda stressed the BOJ is determined to do whatever it takes to hit the inflation target in two years and vanquish nearly two decades of grinding deflation. “There’s no change to our policy of trying to achieve 2% inflation at the earliest date possible, with a roughly two-year time horizon in mind,” the central bank chief said in a speech at a seminar on Wednesday. “There are no limits to our policy tools, including purchases of Japanese government bonds,” he said in response to a question from a private analyst after the speech. The BOJ shocked global financial markets last week by expanding its massive stimulus spending in a stark admission that economic growth and inflation have not picked up as much as expected after a sales tax hike in April.

Kuroda said while inflation expectations have been rising as a trend, the BOJ decided to ease to pre-empt risks that slumping oil prices will slow consumer inflation and delay progress in shaking off the public’s deflationary mind-set. “In order to completely overcome the chronic disease of deflation, you need to take all your medicine. Half-baked medical treatment will only worsen the symptoms,” he said. Kuroda repeated the BOJ’s projection that Japan will likely hit the bank’s price target sometime in the next fiscal year beginning in April 2015, supported by the expanded quantitative and qualitative easing (QQE) program. While he stressed that Japan’s economy continued to recover moderately, Kuroda said falling commodity prices could be risks to the outlook if they reflected weakness in global growth.

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See The Revenge Of A Government On Its People

• US Will Benefit Most From Japan’s Pension Fund Reform (CNBC)

U.S. assets will be the biggest benefactor of the Japanese Government Investment Pension Fund’s (GPIF) decision to more than double its target allocation of foreign stocks to 25%, analysts say. The changes to the $1.1 trillion pension fund coincided with the Bank of Japan’s shocking decision to ramp up stimulus on Friday, which sent global equity markets soaring. “The shift for international equities going to 25% of pension fund holdings is fairly big news,” said Tobias Levkovich, chief equities strategist at Citigroup in a note published on Friday. “It establishes a new incremental buyer of shares and the U.S. should be a significant beneficiary,” he said. The overall contribution to non-Japanese stocks could approach $60 billion of new purchases, half of which could go to the U.S. by the end of 2015, said Citigroup’s Levkovich, noting that stocks on Wall Street should start to feel the benefit this year.

“Foreign investors typically buy large cap stocks which have greater index impact,” he said. “Thus, one cannot ignore the possibility that stock prices jump above our year-end 2014 S&P 500 target on this news.” Other analysts agree. “It’s pretty realistic [that the U.S. will receive most of the benefit] if you look at where the Japanese feel comfortable investing their money,” Uwe Parpart, managing director and head of research at Reorient Financial Markets told CNBC. “This is a pension fund making the investment they are not going to punt into small caps or anything of that sort they need large, liquid stocks that over decades have had a reliable return,” he said. But Parpart is not convinced the inflows would make a huge difference to stock market performance. “$30 billion sounds like a lot of money, but stretched over a period of time it’s not going to move markets,” he said. “But obviously it’s a nice shot in the arm.”

Furthermore, an increase in the pension fund’s international bond allocation to 15% from 11% should boost demand for Treasurys, driving further inflows into the U.S., analysts at HSBC said in a note published Tuesday. Meanwhile, the GPIF will reduce is domestic bond allocation to 35% from 60%. “The BoJ’s increase in asset purchases should be more than enough to cover the aggressive reduction in Japanese Government Bond (JGB) holdings planned by the GPIF, allowing JGB yields to stay pinned down,” said Andre de Silva, head of global emerging market rates research at HSBC. “Ultra-low JGB yields imply that the relative valuations for other core rates ie. U.S. Treasuries and other bond substitutes have been further enhanced,” he said. “Demand for yield-grabbing would intensify amongst Japanese investors, boosting overseas investments.”

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“… the Italian ECB chief has acted increasingly on his own or with just a handful of trusted aides, sidelining even key heads of department.” Hey, you wanted a Goldman guy, now sit on it!

• Draghi To Face Challenge On ECB Leadership Style (Reuters)

National central bankers in the euro area plan to challenge European Central Bank chief Mario Draghi on Wednesday over what they see as his secretive management style and erratic communication and will urge him to act more collegially, ECB sources said. The bankers are particularly angered that Draghi effectively set a target for increasing the ECB’s balance sheet immediately after the policy-making governing council explicitly agreed not to make any figure public, the sources said. “This created exactly the expectations we wanted to avoid,” an ECB insider said. “Now everything we do is measured against the aim of increasing the balance sheet by a trillion (euros)… He created a rod for our own backs.” Irritation among national governors who hold a majority on the 24-member council could limit Draghi’s space for bolder policy action in the coming months as the bank faces crucial choices about whether to buy sovereign bonds to combat falling inflation and economic stagnation.

Some members intend to raise their concerns with Draghi at the governors’ traditional informal working dinner on Wednesday before their formal monthly rate-setting meeting on Thursday, the sources interviewed by Reuters said. Many people at the central bank, which manages a single currency for 18 European Union member states, welcomed Draghi’s greater informality when he took over from Jean-Claude Trichet of France in 2011. His efforts to keep meetings short, delegate and brainstorm more, were received as a breath of fresh air. However, as decisions to loosen monetary policy and resort to further unconventional measures have become more contentious, insiders say the Italian ECB chief has acted increasingly on his own or with just a handful of trusted aides, sidelining even key heads of department. “Mario is more secretive… and less collegial. The national governors sometimes feel kept in the dark, out of the loop,” said one veteran ECB insider. “Jean-Claude used to consult and communicate more,” another ECB source said. “He worked a lot to build consensus.”

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So what? Every forecast everywhere gets revised downwards all the time. It’s simply the way things work.

• EU Cuts Growth Outlook as Inflation Seen Below ECB Forecast (Bloomberg)

The European Commission cut its growth forecasts for the euro area as the bloc’s largest economies struggle to put the ravages of the debt crisis behind them after two recessions in six years. Gross domestic product in the 18-nation region will rise by 0.8% this year and 1.1% in 2015, down from projections for 1.2 and 1.7% in May, the Brussels-based commission said today. It lowered its projections for Germany, Europe’s largest economy, and said inflation in the euro area will be even weaker than the European Central Bank predicts. “The legacy of the global financial and economic crisis lingers on,” said Marco Buti, the head of the commission’s economics department. “Slack in the EU economy remains large and is weighing on inflation, which is also being dragged down by tumbling energy and food prices.”

The bleaker outlook highlights the fledgling nature of the euro area’s recovery and the deflation threat that has compelled the ECB to take unprecedented stimulus measures. While unemployment is beginning to decline from a record high, core economies such as Germany and France are facing some of the growth challenges that afflicted the periphery at the start of the debt crisis. Today’s report forecasts inflation at 0.8% in 2015, less than half the ECB goal of just under 2%. That’s more pessimistic than the central bank’s own projection of 1.1%. The commission sees inflation quickening to 1.5% in 2016, compared with the ECB outlook for 1.4%.

European stocks declined for a second day and German, French and Italian bonds rose. The yield on the German 10-year bund fell 4 basis points to 0.81% at 11:17 a.m. London time. The Italian yield dropped 5 basis points to 2.37%. The Stoxx Europe 600 Index slipped 0.1%. The grim assessment for the euro region comes just days before the ECB Governing Council led by President Mario Draghi gathers in Frankfurt for its monthly policy meeting. The ECB has cut its benchmark rate to a record-low 0.05% and began buying covered bonds to boost inflation and rekindle growth. “Country-specific factors are contributing to the weaknesses of economic activity in the EU and the euro area in particular,” Jyrki Katainen, commission vice president for competitiveness, told reporters in Brussels. These include “deep-seated structural problems” and “public and private debt overhang,” he said.

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The never ending Bloomberg promo.

• Euro Area Limping Toward Deflation Fuels QE Calls as ECB Meets (Bloomberg)

The euro area is edging closer to the moment that deflation risks become reality. Companies cut selling prices by the most since 2010 as they attempted to boost sales in the face of a flagging economy and slowing new orders, Markit Economics said today. This in turn is squeezing profit margins and reducing resources for hiring and investing, damping chances of an economic rebound, the London-based company said. The European Central Bank is pumping money into the banking system to fuel inflation that hasn’t met policy makers’ goal since early last year.

With a gauge of manufacturing and services activity pointing to sluggish growth at best, it is under pressure to add to long-term loans and already announced asset-purchase plans to prevent a spiral of price declines in the 18-nation currency bloc. “This month’s data make for grim reading, painting a picture of an economy that is limping along and more likely to take a turn for the worse than spring back into life,” said Chris Williamson, Markit’s chief economist. “The combined threat of economic stagnation and growing deflationary risks will add to pressure on the ECB to do more to stimulate demand in the euro area, strengthening calls for full-scale quantitative easing.”[..] While Markit said the data are in line with gross domestic product expanding 0.2% in the fourth quarter, new orders slowed to the weakest level in 15 months and employment declined for the first time in almost a year. That “suggests that the pace of growth may deteriorate in coming months,” said Williamson.

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Sometimes I wonder what the job requirements are for Bloomberg staff. Like now. Europe should do what Japan does? That highly successful role model?

• ECB Needs Japanese Lessons (Bloomberg)

Economists like to warn about Japanification, the risk that a country will follow the desultory experience of Japan, which slumped into deflation in 1999 and for all intents never climbed out. As Europe slides closer to deflation, the European Central Bank should heed the historical experience and the current efforts by the Bank of Japan to resuscitate growth. The euro area is perilously close to deflation. The ECB target – consumer price inflation of just under 2% – grows more distant. The European Commission said yesterday it sees euro-area inflation running at just 0.8% in 2015, as it cut its prediction for the region’s growth this year to 0.8% from the 1.2% it anticipated in May. And yet, the ECB’s balance sheet has been shrinking as the BoJ’s has swollen.

The Bank of Japan announced last week that it’s boosting purchases of Japanese government bonds to a record annual amount of 80 trillion yen, or more than $700 billion. My colleague William Pesek points out that the Japanese central bank has now effectively cornered the domestic market in government debt, creating a bubble in the bond market. He’d prefer more economic reforms than increased quantitative easing. Europe would also benefit from more labor-market changes and fiscal stimulus. But neither the ECB nor the Bank of Japan has a mandate to overhaul fiscal policy or employment practices. In the absence of government action, central banks can only fill the void. The shock-and-awe that BoJ Governor Haruhiko Kuroda sprang on investors isn’t likely to be repeated at tomorrow’s ECB meeting, even though there is scant prospect that the central bank’s inflation target will be met anytime soon.

Two weeks into the covered-bond purchase program designed to flood cash into the economy, the ECB has purchased just 4.8 billion euros ($6 billion) so far. Draghi said earlier this week that the scope for buying asset-backed securities is “rather large,” yet I can’t find a single market participant who expects the plan to succeed in swelling the ECB balance sheet by enough to do the job – unless it repeats the government bond purchases it made between 2010 and 2012, and on a much grander scale:

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Huh? “What the Saudis are doing is business as usual. They change the price formula each month. The problem is there’s an implication that it’s business as usual in terms of production. The problem is if they continue to produce what they’ve been producing in the last two months, the market is headed for trouble”

• Look Out Below! Oil Is Not Done Falling (CNBC)

Oil prices could have a hard time finding a floor after Saudi Arabia trimmed prices in the face of growing North American oil production. The market took the price cut this week as another sign the kingdom is willing to use pricing as a lever to preserve its market share, rather than cut production in what is now an oversupplied market. Even if it was not the intention, some traders took the Saudi move as a sign the kingdom would like falling prices to slow U.S. shale production. U.S. West Texas Intermediate fell sharply on Tuesday, dipping close to the psychologically key $75-a-barrel level, before closing at a three-year low of $77.19, off $1.59 per barrel. Brent fell along with it to $82.82 a barrel, the lowest settle since October 2010, after Saudi Arabia set a new price in the U.S. 45 cents lower than November’s level. “The managed money longs still outnumber shorts 3.5-to-1. If this isn’t a heavy exodus of the money manager longs, we could still have a significant drop, especially if all these factors that are driving us lower continue to weigh on the markets,” he said.

“The dollar strength and also fears of slowing economic conditions in Europe and China are still continuing to play a role.” There was initially a muted reaction to the Saudi announcement Tuesday as the market focused on dollar strength and other factors. “I don’t think the probability is we’re looking at a meltdown or collapse. If there was a global price war, it could go between $30 and $50 a barrel but more realistically, we’re within 10% of the bottom,” said Tom Kloza, senior oil analyst at Gasbuddy.com. “What the Saudis are doing is business as usual. They change the price formula each month. The problem is there’s an implication that it’s business as usual in terms of production. The problem is if they continue to produce what they’ve been producing in the last two months, the market is headed for trouble, and downward pressure will be more significant than upward pressure,” said Kloza.

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Nobody loves you when you’re down and out.

• Oil Continues To Slide, With Brent At Lowest In Over Four Years (MarketWatch)

Crude-oil futures extended losses in Asian trade Wednesday, with the U.S. oil benchmark at its lowest in more than three years and Brent at its lowest in over four years. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $76.81 a barrel, down $0.38 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.60 to $82.22 a barrel. Crude oil finished at a 3-year low on Tuesday. A steady stream of weak economic data from Europe is weighing on Brent crude oil prices, pushing it lower along with the drop in U.S. oil prices, analyst Tim Evans at Citi Futures said.

“The downward revision in the eurozone macroeconomic outlook and the further decline in prices were both more of a confirmation that a bearish trend remains than any stunning new development,” he said. Mr. Evans said a psychological limit of $80 a barrel may help limit the drop in Brent crude prices. Financial markets are looking to Thursday’s European Central Bank meeting for a boost. Meanwhile, oil markets are still pressured by a strong U.S. dollar, weak demand projections and oversupply concerns. “Yesterday’s support levels were shattered likely due to markets anticipating further cuts from other OPEC countries,” analyst Daniel Ang at Phillip Futures said. He pegged support for Brent crude at $82 a barrel and that for WTI at $75.84 a barrel.

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“Domestic oil companies need to stop drilling for oil … ” Why not tell the Saudis that? How about we discuss: The Real Problem With T. Boone Pickens instead?

• T. Boone Pickens: The Real Problem With Oil (CNBC)

Many energy investors think there’s a powerful force working against them in the market. Investor T. Boone Pickens thinks they’re right, but the problem isn’t what they think. Pickens says that the big issue in the energy market isn’t OPEC or the strong dollar; he says it’s supply and he also says domestic drillers are to blame. “Domestic oil companies need to stop drilling for oil,” Pickens insisted on CNBC’s “Street Signs.” “We’ve overdrilled oil (in the U.S). Now we’ve gotten ourselves in a spot. We need to slow down.” In other words, the abundance of oil that’s now accessible in North America because of improved technology has generated a supply imbalance. However, Pickens does not expect that dynamic to last; ultimately he expects markets to balance out, with drillers reducing supply.

“Of course nobody wants to be the first to blink,” Pickens added. “But, when the domestic drillers start feeling real pain (from low prices), they will blink.” In fact, Pickens thinks the dynamics are shifting, already. Not only does he anticipate a reduction in domestic supply but he said markets are moving into a bullish time of year. “November and December are good months,” he said. Therefore, Pickens believes supply will decrease, at a time when demand increases. Given the potential catalysts, Pickens isn’t looking for oil to sit at historic lows for long. “I can see this lasting through year end. But in the first quarter of next year I think we hit the low and then I expect prices to recover.”

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‘Shields’? Curious choice of words.

• Russia-Ukraine Crisis Shields EU Gas From Oil Price Rout (Bloomberg)

The risk of disruptions to Russian natural gas flows through Ukraine this winter is protecting European prices from the rout that sent oil to a four-year low. U.K. gas for next quarter fell 13% since mid-June, less than half the 29% plunge in Brent crude over that time. While Brent is typically the benchmark used to set the price on almost half the gas supply in Europe, the Russia-Ukraine conflict and demand fundamentals in the market are having a bigger impact on prices than the decline in oil. First-quarter supply interruptions are still possible as Ukraine may struggle to pay Russia the full $3.1 billion by year-end under an agreement brokered by the European Union last week for gas already consumed, according to Societe Generale SA.

Gazprom said it received the first tranche of payments today. The EU, which gets 15% of its fuel from Russia via Ukraine, sought to avoid repeats of 2006 and 2009, when supplies to the bloc were disrupted amid freezing weather. “Right now, gas prices in Europe are really linked to the Russian-Ukrainian crisis, so I don’t think the impact from oil is as big as it could be,” Edouard Neviaski, chief executive officer of GDF Suez Trading, a unit of France’s biggest utility, said in an interview in London. “Gas prices have gone down a little bit, but nothing of the same magnitude.”

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Whenever the financial world gets ‘creative’, things blow up and we pay.

• New Junk-Bond Derivatives Are Hot as Traders Get Creative (Bloomberg)

When it gets tough to maneuver in the junk-bond market, traders can either give up or get creative. Many of them are opting for creativity these days. There’s been a surge in demand for a relatively new index of derivatives that aims to replicate the risk and return of high-yield bonds. As volatility soars to the most in more than a year, trading in a total-return swaps index reached a record $4 billion in September from almost nothing in May, according to data compiled by Morgan Stanley. The demand is in part coming from fund managers who are looking for ways to be agile as individual investors become more fickle, pulling money out and then putting it back in, said Sivan Mahadevan, a credit strategist at Morgan Stanley. For example, investors have yanked $24 billion from high-yield bond mutual funds this year, with sentiment turning particularly sour in the three months ended Sept. 30, data compiled by Wells Fargo show. Yet they poured $2.5 billion into the funds in the week ended Oct. 29.

Investors also face a harder environment to maneuver in. The volume of dollar-denominated junk bonds outstanding has swelled 81% since 2008, but the market’s structure hasn’t evolved much. It still consists of thousands of individual bonds governed by unique documents, traded much the way they were a decade ago. “Market fragmentation and liquidity constraints in a large part of the bond market make managing fund-flow volatility particularly challenging,” Mahadevan wrote in a report. The concern is that after six years of near-zero interest rates from the Federal Reserve and a largely one-way trade into bonds, a reversal of that demand will cause debt values to plunge as there won’t be many willing and available buyers on the other side. So it’s no wonder investors are turning to derivatives to quickly adjust their holdings in a market that policy makers have said looks like a bubble.

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Sure, Lagarde, why not simply make your own auditing office look like a bunch of inept fools?

• IMF Gave Richer Countries Wrong Austerity Advice: Internal Auditor (Reuters)

The International Monetary Fund ignored its own research and pushed too early for richer countries to trim budgets after the global financial crisis, the IMF’s internal auditor said on Tuesday. The Washington-based multilateral lender, concerned about high debt levels and large fiscal deficits, urged countries like Germany, the United States and Japan to pursue austerity in 2010-11 before their economies had fully recovered from the crisis. At the same time, the IMF advocated loose monetary policies to sustain growth and boost demand in advanced economies, initially ignoring the possible spillover risks of such policies for emerging market countries, the Independent Evaluation Office, or IEO, said in a report that analyzed the IMF’s crisis response. “This policy mix was less than fully effective in promoting recovery and exacerbated adverse spillovers,” the IEO wrote. The IMF advises its 188 member countries on economic policy, and provides emergency financial assistance to its members on the condition they get their economies back on track.

The internal auditor said the IMF should have known that the combination of tight fiscal policy and expansionary monetary policy would be less effective in boosting growth after a crisis. Evidence showed that the private sector’s focus on reducing debt made it less susceptible to monetary stimulus. In 2012, the IMF finally admitted that it had underestimated how much budget cuts could hurt growth and recommended a slower pace for austerity policies. But its auditor said the IMF’s own research showed this relationship even before the crisis. IMF Managing Director Christine Lagarde said the IMF’s advice was reasonable, given the information and economic growth forecasts it had in 2010. “I strongly believe that advising economies with rapidly rising debt burdens to move toward measured consolidation was the right call to make,” Lagarde said in a statement.

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So much for the Chinese having no housing debt.

• China Home Buyers Rushing Online to Finance Downpayments (Bloomberg)

Qian Kaishen and his wife almost gave up in August on buying a bigger home. As apartments at Shanghai Villa, a project they liked near the city’s Hongqiao Airport, started selling, the money they had saved for the deposit was tied up in a 5%-return investment. Then property agency E-House China Holdings Ltd. offered the couple a 280,000 yuan ($45,546) one-year bridge loan at zero interest. The loan came from online investors through E-House’s Internet finance website. It covered about half the down payment and was just enough to make up the shortfall. “Now we’re good both on our investment and home purchase plan,” Qian, 31, who works for a local logistics company, said by phone from Shanghai.

“We would’ve given up if it weren’t for the loan. I don’t like borrowing from my parents or relatives, especially because we have the money.” E-House is joining peer-to-peer lenders to finance down payments for buyers struggling to scrape together a deposit after home prices had tripled since 2000. Mortgage lending remains tight, even after the central bank eased its policy in September, as banks anticipate an extended property market decline because of a high supply of housing, according to Standard Chartered.Home prices in China are now equivalent to 40 years’ average income for a 100-square-meter (1,076-square-foot) apartment. That compares with 26 years’ median income in New York for an apartment of the same size. The average price of a typical 900-square-foot home in Singapore is 11 times the median household income, while that for a 50-square-meter flat in Hong Kong is 14 times, according to local official data.

In China, homebuyers need to pay a minimum down payment of 30% of the purchase price for a first home, and at least 60% for a second before they can take out a mortgage. The limits are the result of a four-year campaign to stem property speculation. Those restrictions have helped drive demand for the down payment loans. “The phenomenon emerged in the past year or two largely because of mortgage restrictions and high down-payment requirements,” said Zhang Haiqing, a Shanghai-based research director at Centaline Group, China’s biggest property agency. The central bank on Sept. 30 eased some mortgage rules to make it easier to purchase second properties in a bid to revive the market. “We can’t exclude the possibility that as the market recovers, more people will want to buy and some of them will still have to use this channel because they don’t have the money,” Zhang said.

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Every nation’s best days are behind it. That is, if you focus on economic growth. As they all do.

• 25 Years Since The Wall Fell, Germany’s Best Days Are Behind It (MarketWatch)

On Sunday, Nov. 9, it will be a quarter of a century since the Berlin Wall came down. The reunification that followed was a triumph for the German nation. The scars of World War Two were finally healed, and Germany became one of the richest and most successful countries in the world. Certainly compared to much of its history, there was never a better time to be a German. And yet, as that anniversary is rightly celebrated, it is possible that the next quarter century will not be nearly as good. In fact, Germany faces a series of daunting problems. Its population is about to shrink sharply, threatening its prosperity. Its export-driven economic model look increasingly dated, based on huge trade surpluses, and driving down real wages. Education is poor, there is little investment, and no signs that it can compete in new technologies the way it did in industries such as automobile and chemicals.

Worse, it is threatened by a belligerent Russia on one side, and a resentful, impoverished, resentful eurozone periphery on the other, which is likely to increasingly blame Germany for its economic troubles. The European Union, the linchpin of its security and foreign policy, is under huge pressure as a result of the eurozone crisis, which the German elite has terribly mismanaged. The chances are that the next quarter of a century will not be nearly as good for Germany as the last 25 years were. When David Hasselhoff — of Knight Rider fame, and for some mysterious reason a huge star in Germany — performed at the Berlin Wall on New Year’s Eve in 1989, he was presiding over a moment when two halves of a divided nation came together. There were plenty of doubts at the time, both about whether West Germany could cope with a bankrupt East, and about whether the rest of Europe could cope with a reunited Germany.

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Interesting views from ‘former’ Goldmanite O’Neill. Have Italy impose punitive taxes on the Germans.

• A Crazy Idea About Italy (Jim O’Neill)

I’ve spent a good deal of my 35 years as an economic and financial analyst puzzling over Italy. Studying its economy was my first assignment in this business – as a matter of fact, Italy was the first foreign country I ever flew to. I’m just back from a vacation in Puglia and Basilicata. Over the decades, the question has never really changed: How can such a wonderful country find it such a perpetual struggle to succeed? All the while, Italy has pitted weak government against a remarkably adaptable private sector and a particular prowess in small-scale manufacturing. An optimist by nature, I’ve generally believed these strengths would prevail and Italy would prosper regardless. In the days before Europe’s economic and monetary union, though, it had one kind of flexibility it now lacks: a currency, which it could occasionally devalue. These periodic injections of stronger competitiveness were a great help to Fiat and other big exporters, and to smaller companies too. The rest of Europe had mixed feelings about this readiness to restore competitiveness through devaluation – meaning at their expense.

When discussions began about locking Europe’s exchange rates and moving to a single currency, opinions divided among the other partners, notably Germany and France, on what would be in their own best interests. Many German conservatives, including some at the Bundesbank, doubted Italy’s commitment to low inflation, which they wanted to enshrine as Europe’s chief monetary goal. On the other hand, leaving Italy outside the euro would leave their own competitiveness vulnerable to occasional lira devaluations. In the end, of course, the decision was made to bring Italy in. The fiscal rules that were adopted at the same time – including the promise to keep the budget deficit below 3 percent of gross domestic product — can be seen as an effort to force Italy to behave itself. Now and then I wondered if some saw them as a way to make it impossible for Italy to join at all. In any event, Italy found itself doubly hemmed in, with no currency to adjust and severely limited fiscal room for maneuver.

The results haven’t been good. It’s ironic that between 2007 and 2014 Italy has done better than most in keeping its cyclically adjusted deficit under control – yet its debt-to-GDP ratio has risen sharply. The reason is persistent lack of growth in nominal GDP, itself partly due to an overvalued currency and tight budgetary restraint. Italy is the euro area’s third-largest economy and its third-most populous country. Given this, the scale of its debts and everything we’ve learned about Europe’s priorities during the creation of the euro and since, I’ve always presumed that, in the end, Germany would do whatever was necessary to protect Italy from the kind of financial blow-up that hit Greece in 2010. Now I am starting to wonder.

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” .. the Potemkin stock market, a fragile, one-dimensional edifice concealing the post-industrial slum that the on-the-ground economy has become behind it.”

• Signs, Wonders and QE Heroics (James Howard Kunstler)

“Holy smokes,” Janet Yellen must have barked last week when Japan stepped up to plug the liquidity hole left by the US Federal Reserve’s final taper trot to the zero finish line of Quantitative Easing 3. The gallant samurai Haruhiko Kuroda of Japan’s central bank announced that his grateful nation had accepted the gift of inflation from the generous American people, which will allow the island nation to fall on its wakizashi and exit the dream-world of industrial modernity it has struggled through for a scant 200 years.

Money-printing turns out to be the grift that keeps on giving. The US stock markets retraced all their October jitter lines, and bonds plumped up nicely in anticipation of hot so-called “money” wending its digital way from other lands to American banks. Euroland, too, accepted some gift inflation as its currency weakened. The world seems to have forgotten for a long moment that all this was rather the opposite of what America’s central bank has been purported to seek lo these several years of QE heroics — namely, a little domestic inflation of its own to simulate if not stimulate the holy grail of economic growth. Of course all that has gotten is the Potemkin stock market, a fragile, one-dimensional edifice concealing the post-industrial slum that the on-the-ground economy has become behind it.

Then, as if cued by some Satanic invocation, who marched onstage but the old Maestro himself, Alan Greenspan, Fed chief from 1987 to 2007, who had seen many a sign and wonder himself during that hectic tenure, and he just flat-out called QE a flop. He stuck a cherry on top by adding that the current Fed couldn’t possibly end its ZIRP policy, either. All of which rather left America’s central bank in a black box wrapped in an enigma, shrouded by a conundrum, off-gassing hydrogen sulfide like a roadkill ‘possum. Incidentally, Greenspan told everybody to go out and buy gold — which naturally sent the price of gold spiraling down through its previous bottom into the uncharted territory of worthlessness. Gold is now the most unloved substance in the history of trade, made even uglier by the overtures of Mr. Greenspan.

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