May 072019
 


Peter Paul Rubens Daniel in the lions’ den c1615

 

Zero Hedge ran an article about omissions from the Mueller report and/or investigation. It’s instructive, but there is more. First, some bits from that article:

Major Mueller Report Omissions Suggest Incompetence Or A Coverup

Robert Mueller’s 448-page “Investigation into Russian Interference in the 2016 Presidential Election” contains at least two major omissions which suggest that the special counsel and his entire team of world-class Democrat attorneys are either utterly incompetent, or purposefully concealing major crimes committed against the Trump campaign and the American people.

First, according to The Federalist’s Margot Cleveland (a former law clerk of nearly 25 years and instructor at the college of business at the University of Notre Dame) – the Mueller report fails to consider whether the dossier authored by former MI6 spy Christopher Steele was Russian disinformation, and Steele was not charged with lying to the FBI.

“The Steele dossier, which consisted of a series of memorandum authored by the former MI6 spy, detailed intel purportedly provided by a variety of Vladimir Putin-connected sources. For instance, Steele identified Source A as “a senior Russian Foreign Ministry figure” who “confided that the Kremlin had been feeding Trump and his team valuable intelligence on his opponents, including Democratic presidential candidate Hillary Clinton.”


Other supposed sources identified in the dossier included: Source B, identified as “a former top-level Russian intelligence officer still active inside the Kremlin”; Source C, a “Senior Russian Financial Officer”; and Source G, “a Senior Kremlin Official.” -The Federalist

As Cleveland posits: “Given Mueller’s conclusion that no one connected to the Trump campaign colluded with Russia to interfere with the election, one of those two scenarios must be true—either Russia fed Steele disinformation or Steele lied to the FBI about his Russian sources.”

Mueller identified only two principal ways Russia interfered in the 2016 presidential election: “First, a Russian entity carried out a social media campaign that favored presidential candidate Donald J. Trump and disparaged presidential candidate Hillary Clinton. Second, a Russian intelligence service conducted computer-intrusion operations against entities, employees, and volunteers working on the Clinton Campaign and then released stolen documents.”


Surely, a plot by Kremlin-connected individuals to feed a known FBI source—Steele had helped the FBI uncover an international soccer bribery scandal—false claims that the Trump campaign was colluding with Russia would qualify as a “principal way” in which Russia interfered in the 2016 presidential election.

[..] the only lawmaker to even mention this possibility has been Sen. Chuck Grassley (R-IA), who raised the issue with Attorney General William Barr last week: “My question,” said Grassley, “Mueller spent over two years and 30 million dollars investigating Russia interference in the election. In order for a full accounting of Russia interference attempts, shouldn’t the special counsel have considered whether the Steele dossier was part of a Russian disinformation and interfere campaign?” [..] Barr said that he has assembled a DOJ team to examine Mueller’s investigation, findings, and whether the spying conducted by the FBI against the Trump campaign in 2016 was improper.

 

Mueller’s second major oversight – which we have touched on repeatedly – is the special counsel’s portrayal of Maltese professor Joseph Mifsud as a Russian agent – when available evidence suggests he may have been a Western agent.

Weeks after returning from Moscow, Mifsud – a self-described Clinton Foundation member – ‘seeded’ the rumor that Russia had ‘dirt’ on Hillary Clinton with Trump campaign adviser George Papadopoulos on April 26, 2016, according to the Mueller report.

As Rep. Devin Nunes (R-CA) noted on Fox News on Sunday, “how is it that we spend 30-plus-million dollars on this, as taxpayers and they can’t even tell us who Joseph Mifsud is?” “…this is important, because, in the Mueller dossier, they use a fake news story to describe Mifsud. In one of those stories, they cherry- pick it,” Nunes added.

[..] As conservative commentator and former US Secret Service agent Dan Bongino notes of Mifsud, “either we have a Russian asset who’s infiltrated the highest echelons of friendly Intelligence Services, or we have a friendly who was setting up George Papadopoulos.”

 

This poses questions about Mueller, Mifsud and Steele and many other people and organizations involved, but the central question remains unaddressed: did Russia truly meddle and interfere in the 2016 election?

We don’t know, we have only Mueller’s word for that, and he’s ostensibly based it on reports from US intelligence, which has very obvious reasons to smear Russia. That Mifsud is presented as a Russian agent, with all the doubts about that which we have seen presented, doesn’t help this point.

That Steele hadn’t visited Russia since 1993 when he complied his dossier is not helpful either. His information could have originated with “the Russians”, or with US intelligence, and he would never have been the wiser. That is, even IF he was a straight shooter. What are the odss of that?

And of course the strongest doubts about Russian meddling and interference, along with offers of evidence to underline and reinforce these doubts, have been offered by Julian Assange and the Veteran Intelligence Professionals for Sanity (VIPS) group.

But as I’ve repeatedly said before, after Mueller had to let go of the “Russia collusion with the Trump campaign” accusation, he was free to let the “Russian meddling aided and abetted by Julian Assange” narrative stand, beacuse he didn’t have to provide proof for that, as long as he didn’t communicate with either the Russians (easy), the VIPS (whom he stonewalled) or Assange (who’s been completely silenced).

 

So we have -at least- 4 major omissions in the Mueller investigation and report:

1) the Mueller report failed to consider whether the dossier authored by former MI6 spy Christopher Steele was Russian disinformation (and Steele was not charged with lying to the FBI).

2) Mueller’s portrayal of Maltese professor Joseph Mifsud as a Russian agent – when available evidence suggests he may have been a Western agent.

3) Mueller declined to talk to the VIPS, who offered evidence that the DNC servers were not hacked but content was copied onto a disk at the server’s location

4) Mueller refused to hear Julian Assange, who offered evidence that it was not the Russians that had provided WikiLeaks with the emails.

 

Mueller was supposedly trying to find the truth about Trump’s ties to Russia/Putin, and he refused to see and hear evidence from two organizations, WikiLeaks and the VIPS, which he absolutely certainly knew could potentially have provided things he did not know. Why did he do that? There’s only one possible answer: he didn’t want to know.

Why not? Because he feared he would have had to abandon the “Russian meddling and interference” narrative as well. If, as both WikiLeaks and the VIPS insisted, the emails didn’t come from “the Russians”, all that would have been left is an opaque story about “Russians” buying $100,000 in Facebook ads. And that, too, is awfully shaky.

That’s an amount Jared Kushner acknowledged he spent every few hours on such ads during the – multi-billion-dollar – campaign. Moreover, many of these ads were allegedly posted AFTER the elections. And we don’t even know it was Russians who purchased the ads, that’s just another story coming from US intelligence.

It is not so hard, guys. “Omissions” or “oversight” is one way to put it, but there are others. Assange could have cleared himself of any claims of involvement in meddling and perhaps proven Guccifer 2.0 was not “Russian”. His discussions with the DOJ, preparations for which were in an advanced stage of development, were killed in 2017 by then-FBI head James Comey and Rep. Mark Warner.

Mueller never wanted the truth, he wanted to preserve a narrative. The VIPS, too, threatened that narrative by offering physical evidence that nobody hacked the emails. Mueller never reached out. Mueller, the former FBI chief, who must know who these men and women are. Here’s a list, in case you were wondering:

 

Steering Group, Veteran Intelligence Professionals for Sanity
• William Binney, former Technical Director, World Geopolitical & Military Analysis, NSA; co-founder, SIGINT Automation Research Center (ret.)
• Bogdan Dzakovic, former Team Leader of Federal Air Marshals and Red Team, FAA Security (ret.) (associate VIPS)
• Philip Giraldi, CIA, Operations Officer (ret.)
• Mike Gravel, former Adjutant, top secret control officer, Communications Intelligence Service; special agent of the Counter Intelligence Corps and former United States Senator
• James George Jatras, former U.S. diplomat and former foreign policy adviser to Senate leadership (Associate VIPS)
• Larry Johnson, former CIA Intelligence Officer & former State Department Counter-Terrorism Official, (ret.)
• Michael S. Kearns, Captain, USAF (ret.); ex-Master SERE Instructor for Strategic Reconnaissance Operations (NSA/DIA) and Special Mission Units (JSOC)
• John Kiriakou, former CIA Counterterrorism Officer and former Senior Investigator, Senate Foreign Relations Committee
• Karen Kwiatkowski, former Lt. Col., US Air Force (ret.), at Office of Secretary of Defense watching the manufacture of lies on Iraq, 2001-2003
• Clement J. Laniewski, LTC, U.S. Army (ret.)
• Linda Lewis, WMD preparedness policy analyst, USDA (ret.)
• Edward Loomis, NSA Cryptologic Computer Scientist (ret.)
• David MacMichael, former Senior Estimates Officer, National Intelligence Council (ret.)
• Ray McGovern, former US Army infantry/intelligence officer & CIA presidential briefer (ret.)
• Elizabeth Murray, former Deputy National Intelligence Officer for the Near East & CIA political analyst (ret.)
• Todd E. Pierce, MAJ, US Army Judge Advocate (ret.)
• Peter Van Buren,U.S. Department of State, Foreign Service Officer (ret.) (associate VIPS)
• Robert Wing, U.S. Department of State, Foreign Service Officer (former) (associate VIPS)
• Ann Wright, U.S. Army Reserve Colonel (ret) and former U.S. Diplomat who resigned in 2003 in opposition to the Iraq War

 

And then you lead a Special Counsel investigation, you spend 2 years and $30 million, you get offered evidence in what you’re investigating, and you just ignore these people?

And there are still people who want to believe that Robert Swan Mueller III is a straight shooter? They must not want to know the truth, either, then.

Here’s wondering if Bill Barr does, who’s going to investigate the Mueller investigation. Does he want the truth, or is he just the next in line to push the narrative?

Is there anyone in power left in America who has any courage at all to expose this B-rated theater?

Tulsi Gabbard has been reviled for talking to Assad. Why not talk to Assange as well, Tulsi? How about Rand Paul? We know he wanted to talk to Assange last year. Anyone?

 

 

 

 

Aug 012018
 


Salvador Dali Swans reflecting elephants 1937

 

I am often confused by events that happen and by things that people say. But then I think them over and they mostly become less confusing, even if often slivers of confusion remain. This was again the case yesterday morning. Donald Trump went after the Koch brothers, the one biggest symbol of everything that’s wrong with American politics, and I expected the anti-Trump echo-chamber to finally agree on something with him.

But no, what was I thinking? The echo-chamber has deafened and blinded its inhabitants for far too long and far too loudly for one single word of agreement to come out of it. Trump could sing the praises of Hillary Clinton tomorrow morning and it would be used against him. This is not new, it’s been going on for his entire presidency, and before, but it’s still good for people to acknowledge that it’s getting worse be the day – or better perhaps in their eyes?!

Still, if you want to call yourself a journalist, and want to be taken seriously as such, objectivity is the number one requirement. But who in the US or international press can claim to be objective when it comes to Trump? Trump sells, on all sides of the aisle. Be very much for him, or equally much against him, and your paper or TV channel can expect revenues to rise. Being neutral on him: not so much.

Anyway, so Trump went after the Koch brothers. That must have shaken up a lot of the Republican party, because countless senators and congressmen and lower level politicians owe their seats more or less exclusively to the hundreds of millions the brothers throw at election campaigns. Trump does not. Here’s how Tyler Durden covered the action:

Two days after Charles Koch voiced his growing displeasure with Trump’s domestic, foreign and economic policy, warning that Trump tariffs could trigger a US recession, President Trump responded on Tuesday by slamming the powerful Koch-led donor network as “globalist” and “a total joke,” rejecting the conservative group amid reports that the network was shifting away from him over trade and immigration issues. Trump alleged that his policies have “made them richer” and that they “want to protect their companies outside the U.S. from being taxed,” while he supports the American worker. In another tweet Trump called them: “Two nice guys with bad ideas.”

“The globalist Koch Brothers, who have become a total joke in real Republican circles, are against strong borders and powerful trade. I never sought their support because I don’t need their money or bad ideas,” Trump said in a post on Twitter. “They love my Tax & Regulation Cuts, Judicial picks & more. I made them richer” Trump continued his angry tirade: “Their network is highly overrated, I have beaten them at every turn. They want to protect their companies outside the U.S. from being taxed, I’m for America First & the American Worker – a puppet for no one. Two nice guys with bad ideas. Make America Great Again!”

That seems obvious enough. The 82- and 78-year-old brothers have bought much of the GOP with their billions, but not Trump. Whether that is because they didn’t want to, or couldn’t, is largely irrelevant. One would think even the anti-Trumpers could feel some sense of gratification in the demise of the brothers’ pernicious influence over America as a country, but no, their hate of Trump trumps their dislike of the Koches.

 

And you know what they found to rationalize this? The word ‘globalist’. Yesterday morning I was watching in amazement as my Twitter feed supplied one tweet after the other on the theme. It lasted just a few hours and then it was gone; this morning the whole thing has died out. But the message, or should I say the damage, had been conveyed.

The allegation in these circles is that Globalist Equals Jew. And so you can’t call anyone a globalist, or at least Trump can’t, or you -and he- only can when someone ‘s not Jewish. Now, globalism is a real thing, it’s a philosophy concerning how economies can and should be organized. And it’s sort of the opposite of Trump’s America First and Make America Great Again.

People who ‘believe’ in globalism are opposed to Trump’s trade tariffs. Not so much his proposal to the EU to drop all tariffs though, because that is what they also want. For Trump, globalism means the jobs America lost to people like the Koch brothers moving manufacturing to China et al. His view is that America needs those jobs back. These are simply different views of how economies and societies should be organized. Nothing more, nothing less.

But by making the word Globalist the same as Jew, the discussion about the different views becomes impossible. You cannot call a Jewish person a globalist, even if that person ‘believes’ in the concept of globalism. On the other hand, it’s fine to call non-Jewish people globalists. And this is because certain rightwing forces have at some point allegedly used the term as an anti-semitic slur, or dog-whistle.

However, who decided to let the rightwing decide what a word means? See, I’m sure those who bring this up didn’t invent it out of thin air, but globalism is still a real thing, and since no-one wishes to equate globalism with Judaism one-on-one, I’d say caution is required. Like this: If you cannot positively prove that someone is an antisemite, don’t go there girlfriend. It’s toxic.

 

In Britain, Labour leader Jeremy Corbyn, 180 light years away from Trump politically, is the subject of an anti-semitism smear campaign at the same time. Though all he’s ever done is be critical of Israeli policies vs the Palestinians. And if we can’t criticize that kind of thing anymore, I don’t know what we live in, but a democracy it’s certainly not. By the way, The Guardian ran a headline yesterday saying “Corbyn Ally Says ‘Jewish Trump Fanatics Making Up’ Antisemitism Claims”. Wait, Jewish Trump fanatics? Oh, never mind…

And yes, we all know that Trump’s son-in-law Jared Kushner is Jewish, and his favorite daughter Ivanka has converted to orthodox Judaism when she married Kushner, and Trump’s grandchildren by the couple are Jewish too. Still when economic adviser Gary Cohn left earlier this year, and Trump said “he’s a globalist, but I still like him”, that is now being used against him. Trump’s an antisemite. But Cohn would still be a globalist even if he weren’t Jewish.

Which fits in nicely and seamlessly with Trump being a racist and misogynist and rapist and Putin-puppet and yada yada. But you know, the anti-Trump chamber has become so deafening it’s become fully dysfunctional. There is no information emanating from it anymore, even if many journalists reside in that chamber.

There’s just a bunch of people trying to trump each other in their hate of the man. For them that seems to do the trick, but for anyone outside of the chamber, it’s just a whole lot of noise. It has taken Robert Mueller a year and a half to come up with absolutely nothing in the way of collusion, and he just keeps going. For what? He wants to make it the full 4-year Trump term?

I’m sure there are people out there who use Globalist as a slur for Jewish, but I have no way of being sure Trump uses it in that sense, and neither do his detractors. They have reached a stage where any allegation or rumor or innuendo seems for them to prove their unproven suspicions even and ever more, but they have long lost sight of what is actually true, and what is mere conjecture.

Labeling someone an antisemite is one of the worst things one can accuse another person of, and it should therefore never be done lightly, let alone without any proof. It’s just dirty smear if you have no evidence; and mere allegations don’t cut it. Sure there are people who voted for Trump who fit the picture, but that doesn’t make the man an antisemite. Nor does calling someone who believes in open borders everywhere, a globalist. Whether that person is Jewish or not. Don’t just throw shit around hoping it will stick.

 

Oh, and if you feel tempted to call me an antisemite now, here’s something I wrote in January 2010 when Anne Frank’s friend Miep Gies died aged 100, about where I grew up: Miep Gies Died Today. Good luck with that.

 

 

Nov 252017
 
 November 25, 2017  Posted by at 1:48 pm Finance Tagged with: , , , , , , , , ,  4 Responses »


Zao Wu-Ki The red sun 1950

 

Once again, to my delight, we’re back with former British diplomat and MI6 ‘ranking figure’ Alastair Crooke and his Conflicts Forum organization. We posted a few of his articles this year and last. This time, Alastair writes a reaction to one of his own articles posted at Consortium News, which I included in the November 18 Debt Rattle at the Automatic Earth. My short comment then: “Former (and current?!) TAE contributor Alastair Crooke draws his conclusions.” This morning, the Conflicts Forum reached out again:

Dear Raul, We took the hint on a recent posting your site that referred to one of Alastair’s articles! …. and below is a comment piece he has done. It is an attempt to be strategic at where we’re going.

Anytime, guys! My first reaction to that piece was that Alastair makes Donald Trump and Jared Kushner’s role in the Saudi crackdown seem very large, which makes the role played by deep state America look small in comparison. And I’m not so sure about that. The riddle of ‘who’s playing who?’ is not a straightforward one. But that’s by no means a criticism (I ain’t criticizing no MI6!). It’s a question.

First, here are two paragraphs of that article to ‘get in the mood’:

 

Trump’s Saudi Scheme Unravels

Aaron Miller and Richard Sokolsky, writing in Foreign Policy, suggest “that Mohammed bin Salman’s most notable success abroad may well be the wooing and capture of President Donald Trump, and his son-in-law, Jared Kushner.” Indeed, it is possible that this “success” may prove to be MbS’ only success. “It didn’t take much convincing”, Miller and Sokolski wrote: “Above all, the new bromance reflected a timely coincidence of strategic imperatives.” Trump, as ever, was eager to distance himself from President Obama and all his works; the Saudis, meanwhile, were determined to exploit Trump’s visceral antipathy for Iran – in order to reverse the string of recent defeats suffered by the kingdom.

So compelling seemed the prize (that MbS seemed to promise) of killing three birds with one stone (striking at Iran; “normalizing” Israel in the Arab world, and a Palestinian accord), that the U.S. President restricted the details to family channels alone. He thus was delivering a deliberate slight to the U.S. foreign policy and defense establishments by leaving official channels in the dark, and guessing. Trump bet heavily on MbS, and on Jared Kushner as his intermediary. But MbS’ grand plan fell apart at its first hurdle: the attempt to instigate a provocation against Hezbollah in Lebanon, to which the latter would overreact and give Israel and the “Sunni Alliance” the expected pretext to act forcefully against Hezbollah and Iran.

Since the crackdown seems to have had limited success so far on an international level, this is certainly an interesting issue to delve deeper into. MbS has reportedly, assisted by US mercenaries, hung members of his own family upside down from ceilings in posh hotels and palaces to break them into submission and steal their fortunes, but if the international part of his plan falls short, this becomes a very unpredictable story.

But this new article has a much broader scope. I’ve often said that the falling apart of the American, European and global political systems is caused one-on-one by deteriorating economies (even if 90% of media and politicians stick the recovery narrative). Alastair agrees, and even quotes me again.

 

 

Alastair Crooke: Robert Kagan first called attention to the fact that America would need to awake from its ‘dream’ a decade ago in End of Dreams: The Return of History, and would have to manage the rise of ‘other’ powers, (some greater than others), with adroitness, if it were to avoid a bad road-crash as emerging competitors clashed with the waning dominant power.  

This meant that the US no longer would be able to assert its will everywhere, and on everything – and would have to give ground – especially to China and Russia.  “There’s going to have to be some very painful horse trading”, historian Sir Max Hastings suggests, adding that its pain will be none the less traumatic, since – like Germany after WW1 – America, does not feel itself defeated: Quite the converse, it sees itself having emerged from the Cold War wholly vindicated: in terms of its societal, governmental and capitalist models.

The American-shaped globalist order, in which three American generations have been steeped, had seemed so naturally to flow out from the Cold War, that the onset of world ‘order’ dissolution seems – shockingly, for many – to have struck out of the blue – as it were – with Brexit, and the election of Mr Trump. 

Commentators speak of America needing to be wary of the Thucydides’ Trap (when the then aspiring power, Athens, threatened the primacy of the established hegemon, Sparta, leading to war). But ‘the trap’ today is not simply just about who’s rising ‘up’, and who’s heading ‘down’, in the great-power stakes – for, as Josh Feinman, chief economist for Deutsche Bank, last year  warned, the problem is not just great power competition. But rather: “We’ve seen this movie before. The first great globalization wave, in the half-century or so before World War I, sparked a populist backlash too, and ultimately came crashing down in the cataclysms of 1914 to 1945.”  In short, the two world wars were not just about Germany challenging British hegemony, but were also about globalization ‘backlash’ too – something that is often overlooked. 

In other words, in the wake of WW2, America has been backing itself into the corner of an ‘American-shaped’ (imposed), second wave ‘globalisation’, and that is the major risk posed today (as much as rising China), with ‘populism’ again markedly on the up. And ‘second wave globalisation’ is again yielding predictable political volatility (i.e. in ‘unexpected’ election results).  However, as Max Hastings  suggests, (quoting former UK politician Michael Howard), “we must recognize that the élites, of which he [Howard] himself freely admits to having been a part, have failed to sustain the consent of electorates for this [Euro-centralisation and for globalisation]. This ignoring the need to sustain the consent of the electorate, bears a considerable responsibility for getting us into this mess”.

Further, as Andrew Bracevich underlines globalism has its distinct social ‘flipside’: “[A] war [has been waged] on (genuine) culture: Under whatever guise, liberal-market globalism is hostile to tradition, community, established norms, and the very idea of a common culture – all of which impinge [adversely] upon the operation of the market, or claims of radical individual autonomy”.

 

 
The Thucydides’ Trap for America, rather, as Professor Lears of Rutgers writes, then, is not just the rising of Russia and China, but that of Americans being backed into the corner of not recognizing “that ‘they’ [the liberal globalists] are no longer defending either liberalism or democracy; [these] forms of élite rule – that provoke [such] popular anger – are merely the husk of liberal democracy: The once-vital discourse of liberal democracy has been hollowed out, and transformed into a language of managerial technique … Within this discourse, freedom has been reduced to market behaviour; citizenship to voting; and, efficiency for the public good to efficiency for profit. The rich civic culture that gave rise to popular American politics in the past—unions, churches, local party organizations—has been largely replaced, in both parties, by élites who have benefited from the ‘technocratic turn’”.

“As long as prosperity continued to increase as it has since 1945, western electorates were willing to give élites a very considerable measure of discretion about what they did, [whether in creating the EU], or whatever it might be. They were willing to acquiesce. Now, prosperity is being squeezed, wages are stagnant, and for many people unlikely to rise much in real terms.   It is going to be much more difficult to sustain the consent of Western electorates for purposes which the élites might consider as [somehow] ‘enlightened and unselfish’”. (Hastings again – with emphasis added).

And here lies the real ‘trap’: it is not that “prosperity is being squeezed” as per Hastings, but that the economy has rather, been divaricated into the ‘squeezed 60%’ and the asset-holding, and enriched 40% (as Ray Dalio describes it). Last month Dalio, the billionaire founder of top hedge fund, Bridgewater Associates, posted a new article, “The Two Economies: The Top 40% and the Bottom 60%”.  He believes it is a serious mistake to think you can analyze or understand “the” economy because we now have two of them. The wealth and income levels are so skewed between top and bottom that “average” indicators no longer reflect the average person’s experience or living conditions. Dalio explains with this chart:

 

 

The red line is the share of US wealth owned by the bottom 90% of the population, and the green line is the share held by the top 0.1%. Right now they are about the same, but notice the trend. The wealthiest 0.1% has been increasing its share of wealth since the 1980s, while the bottom 90% has been losing ground. But it would be a mistake to understand this phenomenon – ‘populism’ as it is labelled in Dalio’s chart – or, the push to recover national culture and sovereignty – as simply a gripe about inequity. It has become since 2009 much more than that: it has become a matter of survival for a major segment of the American and European population (especially, as it coincides with a pensions crisis, which will leave many impoverished in their old age): 

“Prior to 2009, debt was able to support a rising standard of living…”, Raúl Ilargi Meijer says, “but less than a decade later, [personal debt], can’t even maintain the status quo. That’s what you call a breaking point.” (Alastair: Or, even, a precursor to civil violence?)

“To put that in numbers, there’s a current shortfall of $18,176 between the standard of living and real disposable incomes. In other words, no matter how much people are borrowing, their standard of living is in decline. 

“Something else we can glean from the graphs is that after the Great Financial Crisis of 2008-9, the economy never recovered. The S&P may have, and the banks are back to profitable ways and big bonuses, but that has nothing to do with real Americans in their own real economy. 2009 was a turning point, and the crisis never looked back”.

 

 

And Max Hastings’ point is that with austerity gone, early popular acquiescence has turned to anger against the élites – for having so taken them for granted in their utopian globalist projects.

Now the wider point: what we have here is the intersection of geo-politics with geo-finance. Both are now wholly contingent on the ‘saving of appearances’.  One co-constitutes the other.  One is the saving of appearance that America is not losing ‘respect’, or being disdained in the international arena, as it attenuates its global commitments (that is the Thucydides ‘syndrome’), and two, saving the appearance that ‘recovery’ and ‘prosperity for all’, are continuing to unfold nicely in the economy (the world converging globally to western values ‘syndrome’). 

Both these aspects to the dissolution of today’s western ‘modernity’ are intertwined, and co-constituting, and therefore likely to march in tandem – at least for now:  western ‘prosperity’ underwrites the global order, and the global order underwrites American ‘prosperity’.  The American and European élites therefore find themselves painted into a globalised ‘rules-based order’ corner, geo-politically, just as the Central Bankers have been backed into their QE, low or negative interest rate corner – from which there is no easy escape, either. 

The term ‘globalisation’ has been used to paint a landscape that is both inevitable, and beneficent: “free trade floats all boats; everywhere” is the meme. Devotees of globalisation however, never examine rigorously whether David Ricardo’s comparative advantage theory still holds good in the contemporary world (Nobel prize winner Joseph Stiglitz, however, being a notable exception). There just has been no point in asking the fundamentally political (as opposed to technical) question: Has the resulting off-shoring of supply lines, truly been in our interest – politically, as well as financially?  And has the concomitant – globalist disembedding of humans from national culture, community and sovereignty, and the rise of the apolitical, neo-liberal, chameleon-identity ‘Self’, been in the general political and societal interest, too?

It may be objected that Trump is not a globalist.  Whilst it is true that he does not favour America shouldering the claims of a world order; he – himself – protests loudly that he is a globalist – but it is just that he is a hard-nosed, New York businessman, type of globalist: that’s all.  Globalisation (in the neo-liberal mode), remains as a western totem, rightly, or not, according to political taste.

 

Where now? In the domestic field, the Central Banks’ easy ‘group think’ on QE, low or negative interest-rates, and ballooning public and private debt, has been pursued now for so long and so extensively, that it has both given us Dalio’s Two Economies, and no way back.   It has become a vicious circle: as high debt, to GDP ratios, low-interest zombification of entities and shrinking personal disposable income in the 60%, have depressed growth. Yet, paradoxically, never has the need for more of the same – QE, low or negative interest rates, or even ‘helicopter’ income – been so widely extolled — and, at the very moment when their drawbacks have become so widely identified, even by central bankers, themselves.

So here we are: there is a messy, and bitter, divorce taking place in our societies between the 60% and the 40% ‘tribes’. Asset valuations indeed have never been higher. Yet growth by contrast, has, on average, been ratcheting down, decade by decade – and for some, the situation has become truly existential (those for whom even additional debt cannot sustain their non-discretionary outgoings).

Where do we go from here?  A continuation of the existing financial paradigm is what everyone believes; what everyone expects (wants) – and is what we likely will get.  It might even be deepened a little, in the wake of a market hiccough (S&P down by more than 2%).  And in the case of a financial black swan, we may witness the system literally ‘hosed down’ with newly created ‘money’.  But essentially, the business and trade cycle will continue to be heavily repressed – volatility slammed down – and the S&P be the metric of national well-being.

Not only do the markets ‘believe it’, President Trump needs it: geo-politically he likes to do his style of negotiating from a position of strength (and not from one of economic crisis); and internally, he is at ‘war’ with the Establishment.  With the S&P touching records daily, he is immune from taunts of incompetence (regardless of whether not the highs have anything to do with the President).  His base likes it too: their meagre retirement portfolios at least are rising in value. And in any event, it is not surprising if Trump is a low interest, plentiful liquidity, expanding balance sheet, man globally:  It is how he made his billions, personally.

 

Of course, the flip side to continuing the ‘easing’ paradigm is the ongoing hidden transfer of wealth from general taxpayers (the 60%) to the 40%: more populism; more unexpected election outcomes in Europe; more fake-ness; quicker dissolution of the glue holding society together; more political process, less outcome; less ability to address the needs of collective purpose, etcetera — rising rancour and push-back, in a word. This is the implication.

In parallel, the saving of appearance in geo-politics seems to require its slamming down of volatility too (and in the EU, not least – i.e. Catalonia).  People want to believe it (in American power); important sectors of the economy want it, (need it): the appearance of America’s global standing must be preserved.  Repressing North Korea, ‘slamming down’ Iran can save appearances (America is strong), but the flip-side is the increased danger of war – whether inadvertently triggered, or by the US cornering itself into it.  Actually, ebbing power is something that you smell: false bravura only heightens the odour of weakness.

So, continuance of the paradigms (financial and geopolitical), and the continuance of ‘populist push-back’ (i.e. volatility) seem set. Is Josh Feinman of Deutsche Bank then right when he says: “We’ve seen this movie before. The first great globalization wave, in the half-century or so before World War I, [it] sparked a populist backlash too, and ultimately came crashing down in the cataclysms of 1914 to 1945.” Is a financial crisis inevitable – ultimately?  Is war – a confrontation with either Russia, China or N. Korea – unavoidable?

Who can say, for sure?  But the repeating of history is not inevitable.  Financial re-set at some point, has become inevitable, it would appear. It has taken time for the old meme to fade, and weaken its hold sufficiently. Hemingway famously said about bankruptcy (his), that it starts only very slowly, but ends lightningly fast.  The political impulse for a change in the social and cultural paradigm however does seem to be unfolding at an accelerating pace. ‘Populism’ and ‘unexpected’ election results are acting as its accelerant. And the intellectual context for a seismic economic policy shift, is in place too:  monetary policy is seen to be bust, and the economic ‘models’ have been seen to be plain wrong. TINA (there is no alternative) is wobbling on her pedestal, and seems poised to topple over.

Of course there are alternatives.  But will they arrive in time?  Perhaps the existing paradigms are destined to endure a while yet … ’til Hemingway’s observation about bankruptcy sliding unstoppably fast towards the end is further proven as a truism?  In the meantime: we wait; shackled by inertia, and backed into a corner.
 

 

 

Nov 082017
 
 November 8, 2017  Posted by at 1:47 pm Finance Tagged with: , , , , , , , , , , ,  12 Responses »


Salvador Dalí The oecumenial council 1960

 

Trying to figure out what on earth is happening in the Middle East appears to have gotten a lot harder. Perhaps (because) it’s become more dangerous too. There are so many players, and connections between players, involved now that even making one of those schematic representations would never get it right. Too many unknown unknowns.

A short and incomplete list of the actors: Sunni, Shiite, Saudi Arabia, US, Russia, Turkey, ISIS, Syria, Iran, Iraq, Libya, Kurds, Lebanon, Hezbollah, Hamas, Qatar, Israel, United Arab Emirates (UAE), Houthis, perhaps even Chechnya, Afghanistan, Pakistan. I know I know, add your favorites. So what have we got, or what do we know we’ve got? We seem to have the US lining up with Israel, the UAE and Saudi Arabia against Russia, Iran, Syria, Hezbollah. Broadly. But that’s just a -pun intended- crude start.

Putin has been getting closer to the Saudis because of the OPEC production cuts, trying to jack up the price of oil. Which ironically has now been achieved on the heels of the arrests of 11 princes and scores of other wealthy and powerful in the kingdom. But Putin also recently signed a $30 billion oil -infrastructure- deal with Iran. And he’s been cuddling up to Israel as well.

In fact, Putin may well be the most powerful force in the Middle East today. Well played?! He prevented the demise of Assad in Syria, which however you look at it at least saved the country from becoming another Iraq and Libya style failed state. If there’s one thing you can say about the Middle East/North Africa it’s that the US succeeded in creating chaos there to such an extent that it has zero control left over any of it. Well played?!

 

One thing seems obvious: the House of Saud needs money. The cash flowing out to the princes is simply not available anymore. The oil price is a major factor in that. Miraculously, the weekend crackdown on dozens of princes et al, managed to do what all the OPEC meetings could not for the price of oil: push it up. But the shrinkage of foreign reserves shows a long term problem, not some momentary blip:

 

 

Another sign that money has become a real problem in Riyadh is the ever-postponed IPO of Saudi Aramco, the flagship oil company supposedly worth $2 trillion. Trump this week called on the Saudi’s to list it in New York, but despite the upsurge in oil prices you still have to wonder which part of that $2 trillion is real, and which is just fantasy.

But yeah, I know, there’s a million different stocks you can ask the same question about. Then again, seeing the wealth of some of the kingdom’s richest parties confiscated overnight can’t be a buy buy buy signal, can it? Looks like the IPO delay tells us something.

And then you have the 15,000 princes and princesses who all live off of the Kingdom’s supposed riches (‘only 2,000’ profit directly). All of them live in -relative- wealth. Some more than others, but there’s no hunger in the royal family. Thing is, overall population growth outdoes even that in the royal family. Which means, since the country produces nothing except for oil, that there are 1000s upon 1000s of young people with nothing to do but spend money that’s no longer there. Cue mayhem.

 

 

And things are not getting better, Saudi Arabia loses money on every barrel it produces. There are stories about them lowering their break-even price, but let’s take that with a few spoonfuls of salt. A 25% drop in break-even prices in just one year sounds a bit too good. Moreover, main competitors like Iran would still have a much lower break-even price. So even if prices would rise further, the Saudi’s might only break even while Iran gets much richer. Running vs standing still.

 

Saudi Arabia Leads Gulf Nations in Cutting Break-Even Oil Price

Saudi Arabia, OPEC’s biggest oil producer, is also a leader when it comes to slashing the crude price the country needs to balance its budget. The kingdom will need oil to trade at $70 a barrel next year to break even, the IMF said Tuesday in its Regional Economic Outlook for the Middle East and Central Asia. That’s down from a break-even of $96.60 a barrel in 2016, the biggest drop of eight crude producers in the Persian Gulf. The break-even is a measure of the crude price needed to meet spending plans and balance the budget.

 

 

Gulf oil producers are cutting spending and eliminating subsidies after crude plunged from more than $100 a barrel in 2014 to average just over half that this year. The need to curb spending is more urgent with the Organization of Petroleum Exporting Countries cutting output to reduce a global glut. Oil will trade at $50 to $60 a barrel for the “medium term,” the IMF said.

 

 

So a thorough cleansing job of the royal family is perhaps inevitable, albeit very risky. King Salman and crown prince Mohammed bin Salman are up against a very large group of rich people. But there’s no way back now.

 

Saudi Banks Freeze More Than 1,200 Bank Accounts in Anti-Corruption Purge

Saudi Arabian banks have frozen more than 1,200 accounts belonging to individuals and companies in the kingdom as part of the government’s anti-corruption purge, bankers and lawyers said on Tuesday. They added that the number is continuing to rise. Dozens of royal family members, officials and business executives have been detained in the crackdown and are facing allegations of money laundering, bribery, extorting officials and taking advantage of public office for personal gain. Since Sunday, the central bank has been expanding the list of accounts it is requiring lenders to freeze on an almost hourly basis…

Much more will have to follow that. Doing a half way job is far too risky once the job has started. Not even $800 billion sounds like all that much. Separate families and factions within the royal family have had decades to accumulate wealth.

 

Saudi Crackdown Targets Up to $800 Billion in Assets

The Saudi government is aiming to confiscate cash and other assets worth as much as $800 billion in its broadening crackdown on alleged corruption among the kingdom’s elite, according to people familiar with the matter. Several prominent businessmen are among those who have been arrested in the days since Saudi authorities launched the crackdown on Saturday, by detaining more than 60 princes, officials and other prominent Saudis, according to those people and others. The country’s central bank, the Saudi Arabian Monetary Authority, said late Tuesday that it has frozen the bank accounts of “persons of interest” and said the move is “in response to the Attorney General’s request pending the legal cases against them.”

The most visible – and perhaps richest- of all those arrested -in western eyes- is Al-Waleed. The Bloomberg estimate of his wealth that came out this week is $19 billion. But their own article seems to indicate a much higher number. He owns 5% of Apple -says Bloomberg-, and that share alone would be worth $45 billion.

 

Alwaleed, Caught in Saudi Purge, Has Assets Across the World

Apple – Alwaleed bought 6.23 million shares, or 5 percent, of the computer and mobile-device maker for $115.4 million in 1997. He made these purchases between mid-March and April of that year while the company was still struggling to turn itself around. He has since continued to hold the stake while Apple’s valuation has soared to as high as $900 billion.

 

Going through all these numbers, you can imagine why the ruling family, or rather the rulers within that family, are getting nervous. And that’s where we get to an interesting piece by Ryan Grim at the Intercept, who says it’s not even 32-year-old crown prince Mohammed bin Salman, known as MBS, or King Salman, 81, who control the kingdom these days, it’s the United Arab Emirates (UAE) -and maybe Washington-.

The coup has already been perpetrated.

 

Saudi Arabia’s Government Purge – And How Washington Corruption Enabled It

The move marks a moment of reckoning for Washington’s foreign policy establishment, which struck a bargain of sorts with Mohammed bin Salman, known as MBS, and Yousef Al Otaiba, the United Arab Emirates ambassador to the U.S. who has been MBS’s leading advocate in Washington. The unspoken arrangement was clear: The UAE and Saudi Arabia would pump millions into Washington’s political ecosystem while mouthing a belief in “reform,” and Washington would pretend to believe that they meant it.

MBS has won praise for some policies, like an openness to reconsidering Saudi Arabia’s ban on women drivers. Meanwhile, however, the 32-year-old MBS has been pursuing a dangerously impulsive and aggressive regional policy, which has included a heightening of tensions with Iran, a catastrophic war on Yemen, and a blockade of ostensible ally Qatar. Those regional policies have been disasters for the millions who have suffered the consequences, including the starving people of Yemen, as well as for Saudi Arabia, but MBS has dug in harder and harder. And his supporters in Washington have not blinked.

The platitudes about reform were also challenged by recent mass arrests of religious figures and repression of anything that has remotely approached less than full support of MBS. The latest purge comes just days after White House adviser Jared Kushner, a close ally of Otaiba, visited Riyadh, and just hours after a bizarre-even-for-Trump tweet. Whatever legitimate debate there was about MBS ended Saturday — his drive to consolidate power is now too obvious to ignore. And that puts denizens of Washington’s think tank world in a difficult spot, as they have come to rely heavily on the Saudi and UAE end of the bargain.

As The Intercept reported earlier, one think tank alone, the Middle East Institute, got a massive $20 million commitment from the UAE. And make no mistake, MBS is a project of the UAE — an odd turn of events given the relative sizes of the two countries. “Our relationship with them is based on strategic depth, shared interests, and most importantly the hope that we could influence them. Not the other way around,” Otaiba has said privately.

The kingdom’s broke. Not today, or tomorrow morning, but crown prince MBS is able to look at the numbers and go: Oh Shit! And if he doesn’t see it, he has Kushner (re: Israel) and Al-Otaiba to fill him in. All three relative youngsters -MBS is 32, Kushner is 36, Otaiba is 43- are exceedingly nervous by now.

And then you get war, or the threat of war. War in Yemen, a blockade of Qatar, and now ‘mingling’ in Lebanon with the somewhat mysterious removal of billionaire PM Hariri -allegedly on an Iran/Hezbollah assassination plot-, and outright threats against Iran and Hezbollah:

 

Lebanon’s Hariri Visits UAE As Home Crisis Escalates

Lebanon’s outgoing prime minister, Saad al-Hariri, made a brief visit to the United Arab Emirates from Saudi Arabia on Tuesday despite a deepening crisis back home and a rise in regional tensions triggered by his surprise resignation. Hariri announced his resignation on Saturday during a visit to his ally Saudi Arabia and has not yet returned to Lebanon. He said he believed there was an assassination plot against him and accused Iran, Saudi Arabia’s arch-rival, and its Lebanese ally Hezbollah of sowing strife in the Arab world.

His resignation has thrust Lebanon back into the frontline of the regional rivalry that pits a mostly Sunni bloc led by Saudi Arabia and allied Gulf monarchies against Shi‘ite Iran and its allies. Hariri’s office said he had flown to Abu Dhabi on Tuesday and then returned to Riyadh, but it gave no reason for the trip. It also did not say when he would return home. Hariri’s Future TV channel said he would also visit Bahrain but gave no reason.

In short: billionaire PM Hariri is a puppet. Just perhaps not of Saudi Arabia, but of Abu Dhabi. Whether he’s under house arrest in Riyadh, as has been suggested, is still unclear. But it’s a safe bet that he didn’t fly to Abu Dhabi -and back- alone, or of his own accord. He went to receive instructions.

 

Saudi Arabia Accuses Iran Of ‘Direct Military Aggression’ Over Yemen Missile

Saudi Arabia’s crown prince has accused Iran of “direct military aggression” by supplying missiles to Houthi rebels in Yemen, raising the stakes in an already tense standoff between the two regional rivals. Mohammed bin Salman linked Tehran to the launch of a ballistic missile fired from Yemen towards the international airport in the Saudi capital of Riyadh on Saturday. The missile was intercepted and destroyed.

“The involvement of the Iranian regime in supplying its Houthi militias with missiles is considered a direct military aggression by the Iranian regime,” the prince said on Tuesday during a phone conversation with the UK foreign secretary, Boris Johnson, according to the state-run Saudi Press Agency. He added that the move “may be considered an act of war against the kingdom”. Iran has called Riyadh’s accusations as baseless and provocative.

We have way of knowing what is true or not about this. We do know that Saudi Arabia have been executing a barbaric war in Yemen. With weapons from the US, UK, et al. So someone firing back wouldn’t be that far-fetched.

 

Regardless, Pepe Escobar, a journalist who knows much more than his peers, or at least doesn’t hold back as much as them, doesn’t see this end well for MBS, UAE, Israel, US, and whoever else is in their corner. Another losing war for the US in the Middle East? We’re losing count.

 

The Inside Story Of The Saudi Night Of Long Knives

A top Middle East business/investment source who has been doing deals for decades with the opaque House of Saud offers much-needed perspective: “This is more serious than it appears. The arrest of the two sons of previous King Abdullah, Princes Miteb and Turki, was a fatal mistake. This now endangers the King himself. It was only the regard for the King that protected MBS. There are many left in the army against MBS and they are enraged at the arrest of their commanders.” To say the Saudi Arabian Army is in uproar is an understatement. “He’d have to arrest the whole army before he could feel secure.”

[..] The story starts with secret deliberations in 2014 about a possible “removal” of then King Abdullah. But “the dissolution of the royal family would lead to the breaking apart of tribal loyalties and the country splitting into three parts. It would be more difficult to secure the oil, and the broken institutions whatever they were should be maintained to avoid chaos.” Instead, a decision was reached to get rid of Prince Bandar bin Sultan – then actively coddling Salafi-jihadis in Syria – and replace the control of the security apparatus with Mohammed bin Nayef. The succession of Abdullah proceeded smoothly.

Power was shared between three main clans: King Salman (and his beloved son Prince Mohammed); the son of Prince Nayef (the other Prince Mohammed), and finally the son of the dead king (Prince Miteb, commander of the National Guard). In practice, Salman let MBS run the show. And, in practice, blunders also followed. The House of Saud lost its lethal regime-change drive in Syria and is bogged down in an unwinnable war on Yemen, which on top of it prevents MBS from exploiting the Empty Quarter – the desert straddling both nations. The Saudi Treasury was forced to borrow on the international markets. Austerity ruled …

[..] aversion to MBS never ceased to grow; “There are three major royal family groups aligning against the present rulers: the family of former King Abdullah, the family of former King Fahd, and the family of former Crown Prince Nayef.” Nayef – who replaced Bandar – is close to Washington and extremely popular in Langley due to his counter-terrorism activities. His arrest earlier this year angered the CIA and quite a few factions of the House of Saud – as it was interpreted as MBS forcing his hand in the power struggle. According to the source, “he might have gotten away with the arrest of CIA favorite Mohammed bin Nayef if he smoothed it over but MBS has now crossed the Rubicon though he is no Caesar. The CIA regards him as totally worthless.”

[..] The source, though, is adamant; “There will be regime change in the near future, and the only reason that it has not happened already is because the old King is liked among his family. It is possible that there may be a struggle emanating from the military as during the days of King Farouk, and we may have a ruler arise that is not friendly to the United States.”

In the end, it all comes down to a familiar theme: follow the money. And we need to seriously question the economic reality of Saudi Arabia. That graph above of their foreign reserves looks downright grim.

With money comes power. Who loses money loses power. Saudi Arabia is bleeding money. The population surge is uncanny, and there are no jobs for all these young people. Perhaps the best they can do is be a US/Israel puppet in an attempt to ‘redo’ the map of the Middle East, but that has not been a very successful project off late -like the past 100 years-.

Then again, when you’re desperate you do desperate things. And when you’re a 32-year-old crown prince with more enemies than you can keep track of, you use what money is left to 1) keep up appearances, 2) steal what others have gathered, 3) buy weapons up the wazoo, and 4) go to war.

It all paints a very dark picture for the world. Russia won’t stand for attacks on Iran. And Iran won’t let attacks on Lebanon/Hezbollah go unanswered. All that is set to push up oil prices further, and all parties involved are just fine with that. Because they can buy more weapons with the additional profits.

I’ll leave you with Nassim Taleb’s comments on the situation. After all, Nassim’s from Lebanon, and knows that part of the world like the back of his hand: