Everything You’re Not Being Told About the US War Against ISIS in Syria, by Darius Shahtahmasebi

This is a good effort to make the terribly confused situation in Syria somewhat understandable. For a satirical look at the situation in Syria, see Prime Deceit. From Darius Shahtahmasebi at theantimedia.org:

(ANTIMEDIA) It’s time to have a sane discussion regarding what is going on in Syria. Things have escalated exponentially over the past month or so, and they continue to escalate. The U.S. just shot down yet another Iranian-made drone within Syrian territory on Tuesday, even as authorities insist they “do not seek conflict with any party in Syria other than ISIS.”

Col. Ryan Dillon, chief U.S. military spokesman in Baghdad, seemed to indicate that the coalition would avoid escalating the conflict following Russia’s warning that it will now treat American aircraft as potential targets. He stated:

“As a result of recent encounters involving pro-Syrian regime and Russian forces, we have taken prudent measures to reposition aircraft over Syria so as to continue targeting ISIS forces while ensuring the safety of our aircrews given known threats in the battlespace.”

So what is really going on in Syria? Is the U.S. actually seeking an all-out confrontation with Syria, Iran, and Russia?

The first thing to note is that a policy switch under the Trump administration has seen the U.S. rely heavily on Kurdish fighters on the ground as opposed to the radical Gulf-state backed Islamist rebels, which the U.S. and its allies had been using in their proxy war for over half a decade. Even the Obama administration designated the Kurds the most effective fighting force against ISIS and partnered with them from time to time, but Turkey’s decision to directly strike these fighters complicates the matter to this day.

Further muddling the situation is the fact that the U.S. wants the Kurds to claim key Syrian cities after ISIS is defeated, including Raqqa. However, the reason this complicates matters is that, as Joshua Landis, head of the Middle Eastern Studies Center at the University of Oklahoma explains, the Kurds have “no money” nor do they have an air force.

To continue reading: Everything You’re Not Being Told About the US War Against ISIS in Syria

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Why The (Collapsing) Global Credit Impulse Is All That Matters: Citi Explains, by Tyler Durden

One reason to suspect that the debt party is just about over is that credit growth has gone negative. From Tyler Durden at zerohedge.com:

One week ago, we reported that UBS has some “very bad news for the global economy”, when we showed that according to the Swiss bank’s calculations, the global credit impulse showed a historic collapse, one which matched the magnitude of the impulse plunge in the immediate aftermath of the financial crisis.

But why is the credit impulse so critical?

To answer this question Citi’s Matt King has published a slideshow titled, appropriately enough, “Why buying on impulse is soon regretted”, in which he explains why this largely ignored second derivative of global credit growth is really all that matters for the global economy (as well as markets, as we will explain in a follow up post).

King first focuses on the one thing that is “wrong” with this recovery: the pervasive lack of global inflation, so desired by DM central banks.

As he notes in the first slide below, “the inflation shortfall isn’t new” and yet the current “level of credit growth would traditionally have seen inflation >5%”

To be sure central banks always respond to this lack of inflation by injecting massive ammounts of liquidity, i.e., credit, in the system: according to Citi, the credit addiction started in 1982 in the UK, while in 2009 it was in China. However, there was a difference: while in the 1982 episode, it took 3 credit units to grow GDP by 1 unit, by 2009 this rate had grown to 6 to 1. Meanwhile, central bankers “simply stopped worrying about credit.” That also explains the chronic collapse in interest rates starting in 1980 with the “Great Moderation” and their recent record lows: the world simply can not tolerate higher rates.

And while the central bank experiment had limited success in stimulating inflation, there was one obvious consequence: credit fuelled asset bubbles around the world.

This is where the credit impulse comes into play: it allows market participants to track the instantaneous change in central banks’ credit creation, and more importantly,  The change in the flow of credit drives GDP growth.

To continue reading: Why The (Collapsing) Global Credit Impulse Is All That Matters: Citi Explains

The U.S. Economy is a Perverted, Neo-Feudal, Rent-Seeking Abomination, by Michael Krieger

From GE funding share buybacks (which supports the price of executive stock options) instead of its underfunded pension, to trucking companies that indenture their drivers, it’s a nasty world out there, and it’s getting nastier. From Michael Krieger at libertyblitzkrieg.com:

The banker bailouts of the 2008/09 period changed my life forever. I was working on Wall Street at the time, and the way in which the government rallied around the financial institutions that torched the world and left its victims in the dust threw my entire delusional worldview into disarray. Prior to that, I had bought into the absurd assumption that I was financially successful at a young age primarily because I was hard-working and talented. The ensuing bailouts and the government’s emphasis on obsessively rescuing some of the most degenerate people in our society made me realize once and for all how completely rigged and sleazy the U.S. economy really is. As you might expect, it only got worse under Obama’s oligarch-coddling policies and will surely continue to deteriorate under Trump (Goldman Sachs is not your friend).

Ever since I left my cushy financial services job to do the challenging and often draining work of chronicling our ongoing crime scene, I’ve spent the vast majority of my free time trying to further educate myself on exactly how this system works. What I’ve discovered over and over again is that it is far more abusive than even I imagined.

Today’s post highlights two important articles that came to my attention over the past couple of days. Both are extremely disturbing, and both should be seen as completely unacceptable in a remotely ethical civilization (which we are not).

First, here’s a short excerpt from a recent Bloomberg article highlighting GE’s pension shortfall, and how it’s gotten worse as executives focused on share-buybacks as opposed to funding the pension.

It’s a problem that Jeffrey Immelt largely ignored as he tried to appease General Electric Co.’s most vocal shareholders.

But it might end up being one of the costliest for John Flannery, GE’s newly anointed CEO, to fix.

At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz.

To continue reading: The U.S. Economy is a Perverted, Neo-Feudal, Rent-Seeking Abomination

Moody’s: Modest Downside Could Spark $3 Trillion Surge In Pension Liabilities, by Tyler Durden

Trader’s intuition says the long festering debt and pension crisis will erupt soon, indeed, in Detroit, Puerto Rico, and Illinois, it already has.. From Tyler Durden at zerohedge.com:

Some very simplistic math from Moody’s helps to shed some light on just how inevitable a public pension crisis is in the United States.  Analyzing a basket of 56 public plans with net liabilities of $778 billion, Moody’s found that just a modest downside return scenario over the next three years (2017: +7.2%, 2018: -5.0%, 2019: 0%) would result in a 59% surge in new unfunded liabilities.  Moreover, given that total unfunded public pension liabilities are roughly $5 trillion in aggregate, this implies that a simple 5% drop in assets in 2018 could trigger a devastating ~$3 trillion increase in net liabilities.

Meanwhile, Moody’s found that even if the funds return 19% over the next three years then net liabilities would still increase by 15%.  Per Pensions & Investments:

In its report, Moody’s ran a sample of 56 plans with $778 billion in aggregate reported net pension liabilities through three different investment return scenarios. Due to reporting lags, most 2019 pension results appear in governments’ 2020 financial reporting, Moody’s noted. The plans had $1.977 trillion in trillion assets.

Under the first scenario with a cumulative investment return of 25% for 2017-’19, aggregate net pension liabilities for the 56 plans fell by just 1%. Under the second scenario with a cumulative investment return of 19% for 2017-2019, net pension liabilities rose by 15%. Under the third scenario with a 7.2% return in 2017, -5% return in 2018 and zero return in 2019, net pension liabilities rose by 59%.

In 2016, the 56 plans returned roughly 1% on average and would have needed collective returns of 10.7% to prevent reported net pension liabilities from growing.

Of course, as we pointed out before, the problem is that the pending doom surrounding these massive public pension obligations often get clouded over by complicated actuarial math with a plan’s funded status heavily influenced by discount rates applied to future liability streams.  Translation, they can “kick the can down the road” for a very long time before having to actually admit there’s a problem.

Take Chicago’s largest pension fund, the Municipal Employees Annuity and Benefit Fund of Chicago (MEABF), as an example.  Most people focus on a funds ‘net funded status’, which for the MEABF is a paltry 20.3%.  But the problem with focusing on ‘funded status’ is that it can be easily manipulated by pension administrators who get to simply pick the rate at which they discount future liabilities out of thin air.

To continue reading: Moody’s: Modest Downside Could Spark $3 Trillion Surge In Pension Liabilities

He Said That? 6/22/17

 From George Orwell (1903–1950), English novelist, essayist, journalist, and critic, 1984:
Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.

Certain U.S. Airlines Are Testing Mandatory Facial Recognition Scans on Americans Flying Abroad, by Michael Krieger

Bit by Orwellian bit, the state introduces new surveillance technologies…for our own good, of course. From Michael Krieger at libertyblitzkrieg.com:

Just when you thought air travel couldn’t get any more invasive, authoritarian and downright miserable, the Department of Homeland Security and two U.S. carriers are determined to prove you wrong.

Yesterday, Harrison Rudolph, a law fellow at the Center on Privacy & Technology at Georgetown Law, wrote a very troubling article at Slatetitled, DHS Is Starting to Scan Americans’ Faces Before They Get on International Flights. Here’s some of what we learned:

Decades ago, Congress mandated that federal authorities keep track of foreign nationals as they enter and leave the United States. If the government could record when every visitor stepped on and off of U.S. soil, so the thinking went, it could easily see whether a foreign national had overstayed a visa.

But in June of last year, without congressional authorization, and without consulting the public, the Department of Homeland Security started scanning the faces of Americans leaving the country, too.

You may have heard about new JetBlue or Delta programs that let passengers board their flights by submitting to a face recognition scan. Few realize, however, that these systems are actually the first phase of DHS’s “Biometric Exit” program.

For certain international flights from Atlanta and New York, DHS has partnered with Delta to bring mandatory face recognition scans to the boarding gate. The Delta system checks a passenger is supposed to be on the plane by comparing her face, captured by a kiosk at the boarding gate, to passenger manifest photos from State Department databases. It also checks passengers’ citizenship or immigration status. Meanwhile, in Boston, DHS has partnered with JetBlue to roll out a voluntary face recognition system for travelers flying to Aruba. In JetBlue’s case, you can actually get your face scanned instead of using a physical ticket.

While these systems differ in details, they have two things in common. First, they are laying the groundwork for a much broader, mandatory deployment of Biometric Exit across the country. Second, they scan the faces of everyone—including American citizens.

Treating U.S. citizens like foreign nationals contradicts years of congressional mandates. DHS has never consulted the American public about whether Americans should be subject to face recognition. That’s because Congress has never given Homeland Security permission to do it in the first place. Congress has passed Biometric Exit bills at least nine times. In each, it has been clear: This is a program meant for foreign nationals. In fact, when President Trump issued an executive order in January on Biometric Exit, it was actually reissued to clarify that it didn’t apply to American citizens.

To continue reading: Certain U.S. Airlines Are Testing Mandatory Facial Recognition Scans on Americans Flying Abroad

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Bring Your Child To Work Day, from The Burning Platform