Category Archives: Corporate Welfare

How Vancouver Is Being Sold To The Chinese: The Illegal Dark Side Behind The Real Estate Bubble

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Zero Hedge : March 10, 2016

One month ago, when describing the latest in an endless series of Vancouver real estate horror stories, in this case an abandoned, rotting home (which is currently listed for a modest $7.2 million), we explained the simple money-laundering dynamic involving Chinese “investors” as follows.

Chinese investors smuggle out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.
They make “all cash” purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in person, in cities like Vancouver, New York, London or San Francisco.
The house becomes a new “Swiss bank account”, providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.

We also explained that hundreds if not thousands of Vancouver houses, have become a part of the new normal Swiss bank account: “a store of wealth to Chinese investors eager to park “hot money” outside of their native country, and bidding up any Canadian real estate they could get their hands on.”

This realization has now fully filtered down to the local population, and as the National Post writes in its latest troubling look at the “dark side” of Vancouver’s real estate market, it cites wholesaler Amanda who says that “Vancouver seems to be evolving from a residential city into almost like a lockbox for money… but I have to live among the empty houses. I’m a resident, not just an investor.”

The Post article, however, is not about the use of Vancouver (or NYC, or SF, or London) real estate as the end target of China’s hot money outflows – by now most are aware what’s going on. It focuses, instead, on those who make the wholesale selling of Vancouver real estate to Chinese tycoons who are bidding up real estate in this western Canadian city to a point where virtually no domestic buyer can afford it, and specifically the job that unlicensed “wholesalers” do in spurring and accelerating what is currently the world’s biggest housing bubble.

A bubble which, the wholesalers themselves admit, will inevitably crash in spectacular fashion.

This is the of about Amanda, who was profiled yesterday in a National Post article showing how a “Former ‘wholesaler’ reveals hidden dark side of Vancouver’s red-hot real estate market.” Amanda quit her job allegely for moral reasons; we are confident 10 people promptly filled her shoes.

* * *

Vancouver’s real estate market has been very good to Amanda. She’s not a licensed realtor, but buying and selling property is her full-time job.

She started about eight years ago as an unlicensed “wholesaler” in Vancouver.

She would approach homeowners and make unsolicited offers for private cash deals. Amanda made a 10-per-cent fee on each purchase by immediately assigning the contract to a background investor. It is seen as the lowest job in property investment, but it is low risk and very profitable. Amanda has done so well that she now owns two homes in Vancouver and develops property in the U.S.

Unlicensed wholesaling is an illicit and predatory business that is quickly growing in Metro Vancouver because enforcement is virtually non-existent.

It’s similar to a tactic currently being examined by B.C. real estate authorities known as “assignment flipping,” which involves legally but secretly trading homes on paper to enrich realtors and circles of investors.

However, unlicensed wholesaling is completely unregulated. Amanda estimates hundreds of wholesalers are scouring Metro Vancouver’s never-hotter speculative market — not including the realtors who are secretly wholesaling for themselves.

Amanda decided to step away from the easy money for moral reasons.

She’s most concerned that wholesalers are targeting B.C.’s vulnerable seniors who don’t understand the value of their old homes. She is also worried about offshore money being laundered, and the resulting vacant homes.

Because wholesalers are unlicensed, they have no obligation to identify their background investors or reveal the source of funds to Canadian authorities who fight money laundering.

“Vancouver seems to be evolving from a residential city into almost like a lockbox for money,” Amanda said. “But I have to live among the empty houses. I’m a resident, not just an investor.”

Amanda said she believes that unethical and ignorant investors are driving B.C.’s housing market at full speed towards a crash. For these reasons, and with the condition that we not use her real name, she came forward to reveal how wholesalers operate.
[…] “A lot of money is leaving China, so now every second day people are asking if I can go out and find places for them. They have tons of money,” Amanda said. “They are basically brokering business deals specifically for Chinese investors.”

She said the mechanics of wholesaling schemes work like this:

The investor behind the unlicensed broker targets a block, often with older homes, and gives the wholesaler cash in a legal trust.

The wholesaler persuades a homeowner to sell, offering immediate cash, no subjects, no home inspections, and savings on realtor fees.

While the wholesaler claims to represent one buyer, or in some cases to be the buyer, Amanda said three or four contract flippers are often already lined up, with an end-buyer from China who will eventually take title in most cases. These unlicensed broker deals appear to be illegal.

A veteran Vancouver realtor confirmed these types of deals. The realtors we spoke to have been asked by their brokerages not to comment to reporters, so we agreed to withhold their names.

“I work with some non-licensed flippers,” one said. “They walk on to the lawn of an older house, see the owner and yell, ‘We’re not realtors!’ The owner invites them in, thinks they’re saving a commission — which they are — and loses big-time on the actual sale. I’ve seen it first-hand.”

According to flyers obtained from across Metro Vancouver and interviews with homeowners who were solicited, wholesalers often say they have Chinese buyers willing to pay a premium for quick sales.

Homeowners in Richmond, Vancouver’s east and west sides, Surrey, Langley, Coquitlam, Burnaby, White Rock, Delta and North Vancouver confirmed such offers in interviews.

One resident of Vancouver’s west side Dunbar area said she was annoyed by wholesalers constantly soliciting her, and a man in Surrey said his elderly mother was bothered by wholesalers.

“A guy walked up and he offered $700,000 cash within a day, and he said I would save on the realtor fees,” said Zack Flegel, who lives near 119th Street and Scott Road in Delta.

“He also says he will give me $100,000 cash and move me into a $600,000 house. He said he has a bunch of properties. He was talking about my house like it was a trading card. We don’t have abandoned homes yet like Vancouver, but this is how it happens, right?”

After the offer is accepted, the wholesaler assigns the purchase contract to the investor for a 10-per-cent markup, Amanda said. But some wholesalers aren’t content with making $100,000 or more per sale.

“People were going in and offering, for example, an 80-year-old widow, she bought the house for $70,000 and it is now worth $800,000 and they were offering her $200,000,” Amanda said. “So they are making $300,000 or $400,000 (after assigning the contract).

“And you are socializing with other wholesalers, and it is hard to hear them say, ‘Oh this whole street is filled with seniors whose partners are dropping off like flies.’ Or, ‘They just want to get rid of it, they have no clue what their house is worth, and it’s the whole street.’”

Amanda said her father died recently. She pictured her mother being targeted by wholesalers and resolved never to play that role again.

“There are elements of this that are elder abuse, absolutely.”

In a recent story that deals with implications of rising property taxes rather than predatory real estate practices, the Financial Post reported that, especially in Vancouver and Toronto’s scorching markets, “it’s not uncommon for some Canadian seniors to be unaware of the value of their location.”

B.C.’s Superintendent of Real Estate, Carolyn Rogers, conceded the potential for elder abuse as reported by Amanda.

“We would welcome an opportunity to speak to (Amanda) and assuming she gives us the same information, we would open a file,” Rogers said. “The conditions in the Vancouver market right now present risks … and seniors could be an example of that.”

It is illegal for wholesalers to privately buy and sell property for investors without a licence, Rogers said. She said her officers have approached some wholesalers recently and asked them to become licensed or cease their activities.

A review of the superintendent’s website shows no enforcement orders, fines or consumer alerts filed in connection to unlicensed wholesalers making cash deals and flipping contracts.

Amanda said that over the past year she learned of new levels of “layering and complexity that I didn’t see five years ago” in wholesaling and assignment-clause flipping.

“Five years ago I didn’t see realtors wholesaling, and I didn’t see people calling me so that I would get them a property and not assign the property to them, but work as a ‘partner’ and I would attach a 10-per-cent fee.

“And then they would assign it to their boss and attach 10 per cent, and then that person’s boss would attach 10 per cent. I’ve been watching over the last month, and it has got astounding.”

Amanda said some wholesale deals involve only unlicensed brokers and pools of offshore cash organized informally, and some appear to involve realtors and brokerages hiding behind unlicensed wholesalers.

“I’ve seen it from the back end. We have friends in the British Properties and the realtor said he will buy their property for $2 million. And then six months later it was sold for $3.5 million. When I’m looking at that, it is a pretty clear wholesale deal.”

Darren Gibb, spokesman for Canada’s anti-money-laundering agency, FINTRAC, confirmed that unlicensed property buyers have no obligation to report the identity or sources of funds of the buyers they represent.

However, Gibb said, if realtors are involved in “assignment flipping” it is mandatory that they and unlicensed assistants make efforts to identify every assignment-clause buyer and their sources of funds.

Vancouver realtors confirmed that money laundering is a big concern in assignment-flipping deals, whether organized by an unlicensed wholesaler or a realtor.

“When you are a non-realtor broker you no longer have to play by any rules,” one Vancouver realtor said.

“There is a role for assignments, but nobody is asking where the money came from. We are creating vehicles for money laundering.”

“No person in their right mind wants to buy your house once, and sell it three more times in a small window of opportunity, unless they have a whole pool of people lined up trying to get their money out of the country. The higher the prices go, these vehicles to get money out of the country get bigger and bigger.”

NDP MLA David Eby and Green MLA Andrew Weaver commented that allegations of unlicensed brokers targeting seniors and participating in potential money-laundering schemes call for direct action from Victoria and independent investigation, because these concerns fall outside the jurisdiction of the B.C. Real Estate Council and its current ongoing review of real estate practices.

“It is very troubling to me,” Eby said, “that not only do we have a layer of real estate agents that are acting improperly and violating the rules, but there might be this additional layer who are not bound by any rule and have explicitly avoided becoming agents for that reason.

“This unscrupulous behaviour is targeting seniors who need money for retirement. What kind of society is that?” Weaver said.

Read the full article at: Zero Hedge/National Post

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Obama seeks corporate welfare funds for Zika vaccine

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Roberta Rampton and Ben Hirschler
Reuters : February 8, 2016

White House seeks $1.8-billion in emergency funds for Zika virus

Barack Obama will ask the U.S. Congress for more than $1.8 billion in emergency funds to fight Zika at home and abroad and pursue a vaccine, the White House said on Monday, but the president also said there is no reason to panic over the mosquito-borne virus.

Zika, spreading rapidly in South and Central America and the Caribbean, has been linked to severe birth defects in Brazil and public health officials’ concern is focused on pregnant women and woman who may become pregnant.

Obama’s request to Congress includes $200 million for research, development and commercialization of new vaccines and diagnostic tests for the virus.

In addition, the London-based European Medicines Agency (EMA), Europe’s drugs regulator, said it has formed an expert task force on Zika to advise companies working on vaccines and medicines against the virus.

There are no vaccines or treatment for Zika and none even undergoing clinical studies, as the disease had previously been viewed as relatively benign. Most infected people develop either no symptoms or mild ones like a fever and skin rashes.

(read the full article at The Globe & Mail

RELATED:
Zika Outbreak Epicenter in Same Area Where GM Mosquitoes Were Released in 2015

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Vancouver’s Housing Market Money Laundering Fraud

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AlternativeFreePress.com

what is happening is quite simple:

Chinese investors smuggled out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.
They make “all cash” purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in person, in cities like Vancouver, New York, London or San Francisco.
The house becomes a new “Swiss bank account”, providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.
Then the owners disappear, never to be heard from or seen again.

As more Chinese scramble to engage and repeat if only the first three steps, the price of local housing, which is merely a store of value to price indiscriminate foreign buyers, soars while it makes home purchases for the domestic population prohibitively expensive and virtually impossible.

These Vancouver Homes Sold For Millions In 2011 And Have Been Vacant And Rotting Since: Here’s Why

Interviews conducted by B.C. Securities Commission investigators and read into evidence in a Securities Commission fraud hearing against Ayaz Dhanani reveal a complex real estate transaction with connections to alleged fraud and organized crime players. …

NDP MLA David Eby, B.C.’s opposition housing critic, said facts gathered by The Province provide perhaps unprecedented detail and corroboration of similar allegations reported to his office concerning offshore buyers and local realtors.

“I was really troubled by the facts in your case,” Eby said in an interview. “And I’m concerned this is not a one-off situation, and this could be a systemic, regular practice. There is enough information to raise red flags for investigations.”

Follow the money: Evidence submitted at fraud probe points to concerns about Vancouver real estate market

“It has come to light that institutions have been, I would say inadvertently, making mortgages to people whose income has been falsified,” said Jeremy Rudin, superintendent of financial institutions.

Mortgage fraud a key threat to Canada’s financial system


Vancouver Real Estate Goes Full-Retard; Average Home Price Now $1.8 Million

Properties are traded one or more times before a deal closes – legal but controversial flipping that creates opportunities for agents to make multiple commissions and investors to profit tax-free from houses that are not yet technically in their possession.

Because assignment sales are rarely listed publicly, they have created a thriving grey market that is accessible largely to investors, speculators and real estate agents who have insider information.

What’s more, the assignment market appears to reward neither the original seller nor the ultimate buyer, despite pushing prices higher and higher: Sellers receive less for their properties than what buyers are finally willing to pay at the end of the chain. And buyers – many of them foreign or backed by foreign investors – pay more than they would have to if the middlemen weren’t involved.

The resulting distortions threaten to strain the public’s trust in the real estate brokerage business, according to some in the profession, while others openly question the sustainability of a market they are heavily invested in – and helped create.

“It worries me a lot that this could all come crashing down. I worry about it all the time,” said one Re/Max agent, Khalid Hasan, who said he owns or co-owns 15 to 20 properties, all destined for resale.

“A lot of people are just assigning and flipping in this market – because they can make more money,” said Mr. Hasan, who said he’s bought several properties through assignments. “We witness assigning all the time – crazy assignments.”

The real estate technique fuelling Vancouver’s housing market

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Clinton Emails Confirm NATO Destroyed Libya to Prevent African Gold-Backed Currency

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CoNN
ANONHQ : January 29, 2016

Hillary’s emails truly are the gifts that keep on giving. While France led the proponents of the UN Security Council Resolution that would create a no-fly zone in Libya, it claimed that its primary concern was the protection of Libyan civilians (considering the current state of affairs alone, one must rethink the authenticity of this concern). As many “conspiracy theorists” will claim, one of the real reasons to go to Libya was Gaddafi’s planned gold dinar.

One of the 3,000 Hillary Clinton emails released by the State Department on New Year’s Eve (where real news is sent to die quietly) has revealed evidence that NATO’s plot to overthrow Gaddafi was fueled by first their desire to quash the gold-backed African currency, and second the Libyan oil reserves.

The email in question was sent to Secretary of State Hillary Clinton by her unofficial adviser Sydney Blumenthal titled “France’s client and Qaddafi’s gold.”

From Foreign Policy Journal:

“The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered ‘Francophone Africa.’

“Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency.”

And here is the section of the email proving that NATO had ulterior motives for destroying Libya:

“This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).

“(Source Comment: According to knowledgeable individuals this quantity of gold and silver is valued at more than $7 billion. French intelligence officers discovered this plan shortly after the current rebellion began, and this was one of the factors that influenced President Nicolas Sarkozy’s decision to commit France to the attack on Libya. According to these individuals Sarkozy’s plans are driven by the following issues:

a. A desire to gain a greater share of Libya oil production,

b. Increase French influence in North Africa,

c. Improve his internal political situation in France,

d. Provide the French military with an opportunity to reassert its position in the world,

e. Address the concern of his advisors over Qaddafi’s long term plans to supplant France as the dominant power in Francophone Africa)”

Ergo as soon as French intel discovered Gaddafi’s dinar plans, they decided to spearhead the campaign against him- having accumulated enough good reasons to take over.

Sadly, Gaddafi had earlier warned Europe (in a “prophetic” phone conversations with Blair) that his fall would prompt the rise of Islamic extremism in the West. A warning that would go unheeded; what’s a few lives in France and Libya, if the larger goal lines the pockets of politicians and the elite so much better after all?

SOURCE: ANONHQ(cc)

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Central bankers don’t have things under control

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Doug Noland
Credit Bubble Bulletin : January 23, 2016

Global markets were too close to dislocating this week. Wednesday saw the S&P500 trade decisively below August lows. Japan’s Nikkei 225 Index sank to test November 2014 lows. Emerging stocks fell to six-year lows, with European equities at 13-month lows. Wednesday also saw WTI crude trade below $27 (sinking almost 7%), boosting y-t-d losses to 25%. Credit spreads were blowing out, and currency markets were increasingly disorderly. Early Thursday trading saw the Russian ruble down 5.3% (at a record low vs. dollar), with Brazil’s real also under intense pressure. The Hong Kong dollar peg was looking vulnerable. The VIX traded to the highest level since the August “flash crash,” while the Japanese yen traded to one-year highs (vs. $). De-risking/de-leveraging dynamics were quickly overwhelming global markets.

Something had to be done…

Bloomberg adjusted its original Friday morning headline, “Global Stocks Charmed by Draghi Effect as Oil Rallies With Ruble,” to “Global Stocks Charmed by Central Banks as Oil Jumps, Bonds Fall.” Draghi did have some help. The People’s Bank of China (PBOC) injected $61 billion of liquidity into the system, the “most in three years.” China’s Vice President assured the markets that Beijing will “look after” Chinese stock investors. There was also talk of added stimulus from the Bank of Japan (BOJ) and a much more dovish Fed. The markets interpreted a feistily dovish Draghi as evidence that global central bankers had assumed crisis-management mode.

The markets will now have six-weeks to ponder whether Draghi can deliver. Even assuming that he successful drags ECB hawks along, it’s not easy to envisage how an additional $10 billion or so of QE will have much impact on (bursting) global Bubble Dynamics. An emphatic Draghi was, however, certainly capable of reversing global risk markets that were increasingly positioned/hedged for bearish outcomes. Over the years we’ve witnessed powerful short squeezes take on lives of their own, repeatedly giving the global Bubble an extended lease on life. And while bear market rallies tend to be the most spectacular, at this point I expect nothing beyond fleeting effects on the unfolding global Bubble unwind. Draghi is a seasoned pro at punishing speculators betting against Europe.

The media fixates on “corrections,” “bottoms” and “bear markets.” Of late, there’s been some comparison of the current backdrop to previous periods, most notably 2008/09 and 2000. I have no desire to try to leapfrog other bearish commentary. My objective is always to present an analytical framework that assists in understanding the extraordinary world in which we live and operate.

Going back to 2009, I’ve referred to the “global government finance Bubble” as the “Granddaddy of All Bubbles.” I am these days more fearful than ever that this period has indeed been the terminal phase of decades of serial Bubbles. Bubble excess made it to the heart of contemporary “money” and Credit – central bank Credit and government debt. This period also saw a historic Bubble engulf the emerging markets, including China. It encompassed stocks, bonds, derivatives and financial assets generally – virtually everywhere. Central bankers “printed” Trillions out of thin air.

Today’s predicament is becoming increasingly apparent: as the current global Bubble deflates and risk aversion takes hold, there is both a lack of sources of reflationary Credit and insufficient economic growth potential necessary to inflate an even bigger reflationary global Bubble. With confidence in central banking waning and the monstrous Chinese Bubble faltering, there is confirmation in the thesis that a most prolonged period of inflationary financial Bubbles is drawing to a close.

The collapse of the Soviet Union coupled with the Greenspan Fed’s push into activist central banking ushered in what was almost universally accepted as an epic victory for free-market capitalism. Too much of this was a quite powerful illusion. U.S. finance was becoming increasingly state-directed. The Fed manipulated interest-rates and the shape of the yield curve. The Washington-based GSEs moved to completely dominate mortgage Credit. The massive U.S. “too big to fail” financial conglomerates came to dictate securities and derivatives-based finance – and market-based finance monopolized the real economy. And each faltering Bubble ensured more aggressive central bank “activism” – lower rates, greater market intervention and increasingly outlandish talk of “helicopter money” and the government printing press.

With the bursting of the mortgage finance Bubble, the Fed and global central banks resorted to desperate measures – reckless “money” printing, manipulation and market liquidity backstops. Along the way, virtually the entire world adopted U.S.-style market-based finance and policymaking. The process culminated with communist China adopting U.S.-style finance. So long as inflating financial markets were supportive of central planner objectives, everyone could pretend it was a move toward free markets.

What began with Greenspan’s early-nineties covert bank recapitalization evolved into Bernanke’s foolish policy to openly inflate risk markets with new central bank Credit. Amazingly, U.S. inflationism took the world by storm.

The issue today goes much beyond a stock market correction, a bear market or even global financial crisis. Contemporary central banking has failed. Theories have failed. Doctrine has failed. The inability to spur self-sustaining economic recovery has been a major issue. Yet, from my perspective, the critical failure has been the incapacity to generate general price inflation. The delusion has been that central bankers would always enjoy the capacity to inflate away excessive debt levels. Bubbles needn’t be feared, not with central banks “mopping” up with reflationary monetary stimulus. And for quite a while it seemed that “enlightened” contemporary inflationist doctrine had it all figured out.

Central bankers and market-based finance are a dangerous mix. Over the years, I have referred to market-based finance as the most powerful monetary policy transmission mechanism in the history of central banking. Greenspan could inflate the markets – and the entire system – with inklings of a 25 bps rate cut. Later it took Dr. Bernanke Trillions – the dawn of “whatever it takes,” and markets rejoiced.

Central banks around the world abused their newfound power and the power of financial markets. And for seven years egregious monetary inflation has been used specifically to inflate global securities markets. And “shock and awe,” “whatever it takes,” and “push back against a tightening of financial conditions” all worked to ensure the markets that central bankers would no longer tolerate crises, recessions or even a bear market.

For seven long years, risk misperceptions and market price distortions turned progressively more severe. Inflating securities markets around the globe became, as they do, self-reinforcing. “Money” flooded into the markets – especially through ETFs and derivatives. Trillions flowed into perceived safe equities index and corporate debt instruments. With central bankers providing a competitive advantage for leveraging and professional speculation, the hedge fund industry swelled to $3.0 TN (matching the $3 TN ETF complex). Wealth effects and the loosest financial conditions imaginable boosted spending, corporate profits, incomes, investment, tax receipts and GDP – not to mention M&A, stock repurchases and financial engineering.

But this historic wealth illusion has been built on a foundation of false premises – that central bank monetization can inflate price levels and spur system inflation necessary to grow out of debt problems; that securities markets should trade at higher multiples based upon contemporary central banker capacities to spur self-reinforcing economic recovery and liquid securities markets; that 2008 was “the hundred year flood.” In reality, central bankers inflated history’s greatest divergence between global securities prices and economic prospects.

Global markets have commenced what will be an extremely arduous adjustment process. Markets must now confront the harsh reality that central bankers don’t have things under control. Risk premiums must rise significantly – which means the destabilizing self-reinforcing dynamic of lower securities prices, faltering economic growth, uncertainty, fear and even higher risk premiums. This means major issues for global derivatives markets that have inflated to hundreds of Trillion on misperceptions and specious assumptions. I’ll assume Draghi, Kuroda, Yellen, the PBOC and others resort to more QE – and perhaps they prolong the adjustment period while holding severe global crisis at bay. But the global Bubble has burst. And if QE has been largely ineffective in the past, we’ll see how well it works as confidence in central banking withers. Perhaps this helps explain why global financial stocks now trade like death.

Excerpted from credit bubble bulletin

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15 News Stories from 2015 You Should Have Heard About But Probably Didn’t

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Carey Wedler
theAntiMedia.org : December 30, 2015

In 2015, the iron fist of power clamped down on humanity, from warfare to terrorism (I repeat myself) to surveillance, police brutality, and corporate hegemony. The environment was repeatedly decimated, the health of citizens was constantly put at risk, and the justice system and media alike were perverted to serve the interests of the powers that be.

However, while 2015 was discouraging for more reasons than most of us can count, many of the year’s most underreported stories evidence not only a widespread pattern that explicitly reveals the nature of power, but pushback from human beings worldwide on a path toward a better world.

 1. CISA Pushed Through the Senate, Effectively Clamping Down on Internet Freedom: For years, Congress has attempted to legalize corporate and state control of the internet. In 2011, they attempted to pass PIPA and SOPA, companion bills slammed by internet and tech companies and ultimately defeated after overwhelming public outcry. Then they passed  CISPA — which the president threatened to veto, having caught wind of the public’s opposition to heavy regulation of the internet (earlier this year, Obama reversed his position). However, corporate interests, like Hollywood’s studio monopoly, kept lawmakers’ tenacity afloat.

In October, Congress passed CISA, the Cybersecurity Information Sharing Act, but as the Electronic Freedom Foundation explained: “CISA is fundamentally flawed. The bill’s broad immunity clauses, vague definitions, and aggressive spying powers combine to make the bill a surveillance bill in disguise. Further, the bill does not address problems from the recent highly publicized computer data breaches that were caused by unencrypted files, poor computer architecture, un-updated servers, and employees (or contractors) clicking malware links.” Just before Christmas, Congress went even further, adding an amendment to the annual omnibus budget bill that strips CISA’s minimal privacy provisions even more. That budget bill was approved, though Representative Justin Amash of Michigan has vowed to introduce legislation to repeal the CISA provisions when Congress reconvenes.

But CISA wasn’t the only attack on citizens’ privacy this year. Though lawmakers touted the USA Freedom Act as a repeal of the mass surveillance state, in reality, it simply added a bureaucratic step to the process by which government agencies obtain private information. Further, a hack on Italian security firm, aptly called Hacker Tools, revealed that various agencies — including the DEA, NSA, Army, and FBI — possess software that enables them to, as Anti-Media reported, “view suspects’ photos, emails, listen to and record their conversations, and activate the cameras on their computers…” At the same time, the United Kingdom and France moved to tighten their already comprehensive surveillance apparatuses in the wake of multiple terrorist attacks. Though governments claim systematic surveillance is necessary to protect citizens — and Snowden’s leaks endangered that safety — the United States government has been unable to produce sufficient evidence the programs work. Instead, the documents the Department of Defense released this year as proof of the alleged endangerment were entirely redacted.

2. CIA Whistleblower Sent to Prison for Revealing Damning Information to a Journalist: While the government has no problem invading the privacy of its citizens, it offers swift backlash for those who attempt to violate its own clandestine operations. Jeffrey Sterling, a former CIA agent, had his first altercation with the CIA when he sued for racial discrimination in 2001. He was subsequently fired. Years later, the CIA filed espionage charges against him for speaking with New York Times journalist, James Risen. Sterling had revealed a botched CIA scheme, Operation Merlin, to infiltrate Iranian intelligence that ultimately worsened the situation, gave Iran a nuclear blueprint, and was deemed by some to be espionage, itself. Rather than acknowledge the woeful misstep, the CIA arrested him, charged him, and ultimately sentenced him to 42 months in prison. The trial was reportedly biased, but nevertheless, was severely underreported by the media. Sterling’s conviction reflects the ongoing war on whistleblowers, which Obama has successfully expanded during his presidency. Sterling joins the ranks of Edward Snowden, Chelsea (formerly Bradley) Manning, and others, including a whistleblower who worked for OSHA’s Whistleblower Protection Program and was fired for exposing dysfunction and incompetence within the ranks.

3. Press Freedom Continued to Deteriorate: An annual report from the World Press Freedom Index saw the United States slip 29 spots from last year, landing 49th out of 180 total. In January, journalist Barrett Brown was sentenced to five years in prison for exposing the findings of hacker Jeremy Hammond. Brown was charged with obstructing justice, aiding and abetting, and separate charges of allegedly threatening the FBI in a rant. Hammond, who exposed severe violations of privacy on the part of Stratfor, a CIA contractor, was sentenced to ten years in prison. Brown’s experience was not an isolated incident. Journalists around the world, like several journalists who were killed while investigating ISIS in Turkey, faced increased danger. One small-town journalist in India was burned alive after exposing a corrupt politician.

4. Multiple Activists Arrested, Charged with Felonies for Educating Jurors About Their Rights: In an ongoing trend, otherwise peaceful, non-violent individuals were harassed by police and courts — not for exposing secret information, but for providing information to potential jurors about their rights in the courtroom. One Denver jury nullification activist, followed by another, was charged with multiple felonies for handing out pamphlets that explain a juror’s right to vote “not guilty” in a verdict, even if the defendant is clearly guilty. This right was established to allow jurors to vote with their conscience and question the morality of laws, from the 19th century’s Fugitive Slave Act to Prohibition, both of alcohol in the 1920s and of marijuana today. The Denver activists are awaiting trial, while more recently, a former pastor was charged with a felony for the same reason.

In other unjust convictions and failings of the “justice” system, an African-American man was sentenced to seven years in prison for barking at a police dog, a Kansas mother faces decades in prison for using marijuana to treat her debilitating Crohn’s disease, and a mentally ill man died in jail after being held for stealing five dollars worth of snacks from a convenience store. He had inexplicably been waiting months to be transferred to a medical facility. Ross Ulbricht, founder of the dark web marketplace, the Silk Road, was sentenced to life in prison in spite of the fact that he committed no violent crimes — though the FBI attempted to paint a false picture that he did, albeit without filing formal charges. The prosecution was rife with corruption and scandal; two FBI agents involved in the case were charged with stealing Bitcoin during the investigation. In July, one admitted to stealing $700,000 worth of the digital currency.

5. Six-Year-Old Autistic Boy Killed by Police: 2015 established not only that the justice system remains broken, but the the enforcement class — police officers — continues to terrorize citizens. In one underreported case, a six-year-old boy was fatally caught in the crossfire of a police shootout against his father, who was unarmed. In another case, an African-American motorist was shot and killed by University of Cincinnati police over a missing front license plate. While high-profile cases of misconduct, including Freddie Gray and Sandra Bland, rightly dominated the news cycle, many more cases of police brutality received little attention. In fact, in 2015, it was revealed not only that the media-propagated “War on Cops” in America was a myth, but that American police kill exponentially more people in weeks than other countries’ police kill in years. On the bright side, many police officers did face charges — and even prosecution — in 2015, including one repeat rapist who recently cried upon being convicted of his crimes. The officers involved in the shooting of the six-year-old boy were also charged with murder.

6. Earth Enters Sixth Mass Extinction: 2015, like many years before, was disastrous for the environment. Researchers from Stanford University, University of California, Berkeley, and Princeton determined Earth is entering its sixth mass extinction, reporting that species are disappearing at a rate 100 times faster than the normal rate between mass extinctions. Further, thanks, in part, to the widespread use of Monsanto’s glyphosate-based Roundup herbicide, populations of bees and Monarch butterflies dwindled — though, happily, the Monarchs appear to have bounced back. Polar bears also met continued endangerment.

The much-anticipated Paris Climate Conference yielded what many environmental activists deemed weak, if not fraudulent, solutions. Meanwhile, man-made environmental catastrophes endangered humans. In Flint, Michigan, lead levels in the water led to increased rates of contamination in children’s blood, prompting the mayor to declare a state of emergency. A massive methane gas leak in the San Fernando Valley, located just north of Los Angeles, has sickened residents and forced countless families to relocate. Authorities have been unable to stop the leak.

Thankfully, some measures to help the environment were taken in 2015, including creative solutions to stop animal poaching, the first flight of a solar-powered plane, the launch of a solar-powered airport in India, and Costa Rica’s successful effort to draw 99% of its energy from renewable sources.

7. Civilian Casualties in Western Wars Continue: Though ISIS and other terrorist groups were rightly condemned for killing civilians in 2015, the West pointed fingers while committing the same crimes. In fact, one U.N. report released in September found U.S. drone strikes have killed more civilians in Yemen than al-Qaeda. Another analysis released this year concluded Obama’s ongoing drone wars have killed more people than were murdered during the Spanish Inquisition. Though the U.S. military’s bombing of a Doctors Without Borders (MSF) hospital received global attention and outrage, many other incidents went underreported. In May, one U.S. airstrike on Syria killed 52 civilians in one fell swoop. Additionally, U.S.-backed coalitions have bombed civilian populations, like in Yemen, where Saudi Arabia killed at least 500 children, not to mention two thousand more adult civilians. In other egregious misdeeds, it was revealed that the U.S. military sanctions pedophilia in Afghanistan.

8. Insurrection at the Pentagon’s Defense Intelligence Agency Over Misleading Reports on ISIS: Over the summer, dissent grew within the ranks of the DIA, the Pentagon’s internal intelligence agency. In September, news broke that 50 intelligence analysts filed a report with the Department of Defense’s Inspector General to expose their superiors’ alleged manipulation of intelligence. The intention of the coverup was reportedly to downplay the threat of ISIS and the U.S.’s losing effort to fight it, all to maintain the Obama administration’s narrative the bombing campaigns have been successful.

Similar mishandlings of foreign affairs plagued 2015. It was revealed that the Pentagon had no idea what it did with $8.5 trillion, lost track of $500 million worth of weapons and equipment, and spent $43 million on a single gas station in Afghanistan. A DIA report released in June intimated the military was aware of the rising threat of ISIS, and not only allowed it, but welcomed it. The program to train moderate rebels in the fight cost half a billion dollars but yielded only four or five fighters. Further, multiple generals spoke out this year about the U.S. military’s role in creating ISIS. Additionally, news broke in 2015 that one ISIS recruiter had previously been trained by infamous Iraq War profiteer, Blackwater.

9. Activists Inch a Small Step Closer to Exposing the Actors Behind 9/11: Though few Americans heard about it, in August, a New York judge allowed a trial to move forward that could expose a potential government cover-up in the notorious terrorist attack. The ruling was tepid, allowing a 60 to 90 day window for the case to be dismissed or proceed. A later ruling hindered the effort, citing a lack of evidence; but activists have not stopped fighting for the release of 28 redacted pages from the 9/11 commission report that allegedly implicate Saudi Arabia (a majority of the hijackers on 9/11 were of Saudi origin).

Whatever the truth may be, 2015 witnessed growing doubts about the Saudi government, which beheaded more people than ISIS this year. It also sentenced a poet to beheading for writing poetry about his experience as a refugee from Palestine, sentenced a young man, Ali al-Nimr, to crucifixion for participating in anti-government protests, attempted to issue 350 lashings to a British man in possession of wine (though the U.K. intervened on his behalf, and that of al-Nimr; neither will be punished), and initiated a punishment of 1,000 lashings for a pro-democracy blogger, Raif Badawi.

10. The FDA Approved OxyContin for Use in Children: Though the approval of the powerful, addictive painkiller for use in 11-year-olds and younger children was unsurprising to those who follow the agency’s track record, the FDA’s justification was shocking. After lawmakers wrote a letter expressing concern to the FDA, the agency’s spokesperson, Eric Pahon, said the news was, in fact, not that serious because it was already standard practice. It’s important to stress that this approval was not intended to expand or otherwise change the pattern of use of extended-release opioids in pediatric patients,” Pahon said. “Doctors were already prescribing it to children, without the safety and efficacy data in hand with regard to the pediatric population.

However disturbing, the FDA’s decision comported with other related events this year: President Obama appointed a pharmaceutical lobbyist Deputy Commissioner of medical and tobacco products, a study found swaths of heroin users graduate from prescription painkillers, and similarly, 75% of high school students who used heroin had previously abused pharmaceuticals.

In other stories regarding the misconduct of agencies tasked with keeping people safe, the FDA continued to allow meat companies to use a pharmaceutical additive banned in 150 countries, while whistleblowers at the USDA revealed several plants were producing pork products filled with fingernails, hair, bile, and feces.

11. The Federal Government Admitted Cannabis May Help Fight Brain Cancer: Though the government has long known about the medical benefits of cannabis — it holds patents on several medicinal qualities — the National Institute on Drug Abuse made waves this year when it published a document acknowledging the healing properties of cannabidiol, a non-psychoactive endocannabinoid. In particular, it noted “[e]vidence from one animal study suggests that extracts from whole-plant marijuana can shrink one of the most serious types of brain tumors.” Though more research is needed, the government’s admission was unexpected, albeit welcomed by many cannabis enthusiasts. Other studies this year suggested cannabis may help heal broken bones and is associated with lower rates of obesity.

Though many Americans still faced criminal prosecution for treating themselves and their children with cannabis, 2015 demonstrated the long-term trend of decriminalization and legalization will not be reversed. Nations around the world, from Ireland to Costa Rica to Canada laid groundwork to legalize marijuana to various degrees, while a majority of Americans now support legalization.

12. Nestle Paid $524 to Plunder the Public’s Water Resources: This year, Anti-Media reported on the insidious relationship between Nestle and the Forest Service in California. The investigation found not only that Nestle was using an expired permit to turn exponential profit on 27 million gallons of water, but that a former Forest Service official went on to consult for the company.

While corporate exploitation ran rampant in 2015, many countries around the world fought back. India sued Nestle after finding one of its products contained lead, while nations around the world banned Monsanto and GE products. Scotland, Denmark, and Bulgaria, among others, all moved to ban GE crops, while multiple lawsuits, highlighted the serious potential health consequences of the widespread use of pesticides (though the EPA disputed that glyphosate, the key ingredient in Monsanto’s Roundup, was an endocrine disrupter in June, in November, news broke that the majority of studies the EPA used to make its decision were funded by industry). Though corporate power remains all but monolithic, 2015 saw humans across the world rise up to resist it. Most recently (and comically), a proposed initiative in California is about to enter the next phase — signature gathering — to place it on the 2016 ballot. If placed on the ballot and passed, it will force California legislators to wear the logos of their top ten donors while they participate in legislative activities. The effort has drawn widespread praise and enthusiasm.

13. Establishment Caught Manipulating News to Fit Narratives: Following the death of Freddie Gray in Baltimore, contentious protests broke out, eventually resulting in limited rioting and looting. However, while the media attempted to paint protesters as aggressive, it failed to report officers’ prolonged prohibition of their physical movement, to say nothing of the riot gear police showed up wearing. After being unable to move, a brick was thrown, but the media failed to report the instigation and discrimination law enforcement imposed that ultimately led the students and protesters to grow unruly.

In other manipulations, it was revealed that one Fox News contributor lied about his experience as a CIA agent; he had never been employed at the agency, and only obtained later national security jobs by lying about his CIA experience. Further, CBS edited out comments from Muslims, who discussed U.S. foreign policy as a driver of Islamic extremism during a televised focus group.

A study by fact checker, Politifact, revealed that all the major outlets surveyed — Fox News, CNN, and MSNBC— consistently report half-truths and lies. It is little wonder, then, that another survey found only 7% of Americans still harbor “a great deal of trust” in the mainstream media.

Still, it wasn’t just the media that lied. On multiple occasions, government employees were caught attempting to distort facts. In March, news emerged that an IP address linked to the NYPD had attempted to edit the Wikipedia page on Eric Garner. Computers inside Britain’s parliament were linked to attempted edits on pages detailing sex scandals, among other transgressions. In a related story, the FBI reported it had foiled yet another terrorist plot, and once again, it was revealed the culprits were provided support from an informant working for the bureau. Further, in August, Wikileaks released cables that showed an American lobbyist for Saudi Arabia organized a $6 million ad campaign against the president’s nuclear deal with Iran, all through a well-funded group called the “American Security Initiative.” The lobbyist, Norm Coleman, is a former Republican senator.

14. TPP: In one of the most widely-contested pieces of legislation in recent memory, the Trans-Pacific Partnership moved forward, often in secret. The TPP has been condemned as a corporate power grab that ensures profit for pharmaceutical companies, among many other loathed industries. From clamping down on internet freedom to effectively sanctioning sex trafficking, TPP signals an ominous fate for the future of freedom.

15. Sharp Uptick in Islamophobia: Amid the carnage of the Paris terror attacks, the recent shooting in San Bernardino, and the surge in Syrian refugees seeking asylum in Western nations, attacks against Muslims skyrocketed in 2015. In the United States, Muslims have been attacked for praying in public, wearing traditional head scarves, and for simply being out in public. Sikhs have been caught in the crossfire for the crime of being brown and wearing cloth on their heads — and thus being confused with Muslims — while at least one Christian has been terrorized as a result of the unmitigated hate currently permeating modern society. Many European nations and U.S. states have rejected the influx of refugees from war-torn Syria.

Amid the increased hate against Muslims, however, has come an outpouring of love and tolerance. Muslim groups across the world have condemned terror attacks, raised money to help the families of victims, and promoted programs to discourage extremism. At the same time, citizens across Europe, Canada, and even parts of the United States have welcomed Syrian refugees with open arms.

2015 was a year of chaos, violence, hate, and an ongoing struggle of freedom versus oppression. In many ways, it was like the years, decades, and even centuries and millenia that came before. But amid the conflict and often discouraging headlines, humanity has continued to persevere, offering resistance to seemingly all-powerful forces and paving the way for, if nothing else, potential peace, freedom, and respect for human life.

The Anti Media (cc)

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Trudeau nearly triples Harper’s climate corporate welfare commitment

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AlternativeFreePress.com

A couple weeks ago Prime Minister Justin Trudeau made an additional five-year $2.65-billion contribution to help multinational corporations develop countries under the guise of fighting climate change. The $2.65-billion is in addition to the $1.5 billion of corporate welfare contributed by the previous Conservative government.

While Trudeau campaigned on a slogan of “real change”, so far it’s billions in handouts to corporations, as usual.

The climate change fund is a scam, positioned as channeling money “to poor countries to help them adapt to climate change”, it may sound nice, but typically this money is loaned to poor countries with significant strings…

In Confessions of an Economic Hit Man, John Perkins describes how he would convince the government leaders of underdeveloped countries to accept huge loans they could never pay off. He explains how those countries were then pressured politically so much that they were effectively neutralized and their economies crippled. Perkins describes the role of an Economic Hit Man as “a highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign “aid” organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.”

These international agreements seek to destroy nations sovereignty, they attempt to override laws of local, regional and national governments.

While we do need to take our impact on the planet seriously, we can’t allow ourselves to be manipulated… In 1990 The Club of Rome published The First Global Revolution, where they outlined how they would create or exaggerate environmental threats with the intention of manipulating the public into giving up their sovereignty to one world government:

The common enemy of humanity is man.
In searching for a new enemy to unite us, we came up
with the idea that pollution, the threat of global warming,
water shortages, famine and the like would fit the bill. All these
dangers are caused by human intervention, and it is only through changed attitudes and behavior that they can be overcome. The real enemy then, is humanity itself.

This climate agreement is being presented under the guise of rich countries helping countries in need, but really it is countries already in debt, getting into more debt, in order to get other countries into debt.

The “rich” countries are not really rich when you consider their debt, every dollar of aid given is borrowed with interest owing and compounding. Increasing debt and devaluing the dollar.

The “developing” countries can certainly use help, but the strings attached to this type of help will leave them with more debt than they can handle. This will leave them vulnerable to exploitation and allow corporations to pillage resources.

This article borrowed heavily from our previous article:
Harper commits Canada to contribute corporate welfare

Written by Alternative Free Press
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Trudeau nearly triples Harper’s climate corporate welfare commitment by AlternativeFreePress.com is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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Alberta’s Carbon Tax Is Just More Corporate Welfare

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AlternativeFreePress.com

Yesterday oil executives, First Nations, academics, and environmentalists stood with the provincial government to announce a carbon tax for Alberta… but where will the money go?

Trevor Tombe, an economist with the University of Calgary, is estimating a $2.8-billion subsidy to the largest emitters. That is almost half of the estimated $6 billion revenue.

According to the CBC and Michal Moore, an economist with the University of Calgary’s school of public policy, the plan for industry is a hybrid of a straightforward carbon tax and a cap-and-trade system that allows the buying and selling of carbon credits enabling large corporations to make money trading permits.

In other words…. Alberta’s carbon tax is just more corporate welfare.

Written by Alternative Free Press
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Alberta’s Carbon Tax Is Just More Corporate Welfare by AlternativeFreePress.com is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Sources: Alberta’s climate-change plan: Breaking down the numbers

RELATED:
Harper commits Canada to contribute corporate welfare

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Canada’s Corporate Cannabis Takeover Continues As Pharmacies Look Poised To Distribute

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AlternativeFreePress.com

The future of legalized Cannabis in Canada is bleak if the Liberals continue the Harper regime’s push to corporatize Cannabis. Based on the vague rhetoric promised by Justin Trudeau and the Liberal party platform, that is exactly what we should expect.

The Canadian Pharmacists Association (CPhA) is preparing for further corporatization by “reviewing its existing policies to ensure its policy position regarding pharmacist dispensing of medical marijuana reflects patient safety in this evolving area”.

The CPhA has no business distributing Cannabis. If Cannabis is removed from the Controlled Drugs & Substances Act (CDSA), there is no legal justification to restricting distribution to pharmacies. Cannabis is a benign plant with many uses, which gardeners and farmers should be allowed to grow and sell at farmer’s markets freely. Of course, it seems unlikely that Cannabis will be removed from the CDSA, the Liberal version of legalization sounds a lot like prohibition with increased penalties for unlicensed distribution.

Cannabis is medicine, it can be very expensive medicine, so calls for insurance coverage are understandable… but Cannabis is only expensive because of prohibition. Cannabis can be grown for less than $1/gram, but invested MMPR interests want to keep the cost high to cash in on the corporate welfare windfall of health insurance covering medical marijuana.

If Trudeau and the Liberals are serious about “real change” and evidence-based policy then they need to regulate Cannabis based on the potential harm caused by the plant. Cannabis is safer than coffee and energy drinks. Teens have died consuming energy drinks, but they are sold in convenience stores without age restrictions. Nobody has ever died from consuming Cannabis.

Dana Larsen details 7 key things needed before we can consider Cannabis prohibition to be truly over. (here is a brief summary:)

#7. Don’t increase penalties

In some of their campaign literature, the Liberals were promising to create “new, stronger laws, to punish more severely” people who sell cannabis to minors, or to anyone operating outside of their undefined new system.

Considering we already have Harper’s strict mandatory minimums for cannabis offences, we do not need to be punishing anyone “more severely” for anything related to cannabis.

#6. Allow personal growing

Any model of legalization must include the right to grow some cannabis for personal use. People with a doctor’s recommendation for cannabis should be allowed to grow whatever quantity they need for medical purposes. The Conservatives tried to shut down the current home-garden program for patients, but were stopped by a court injunction. That injunction needs to remain, and be expanded to make it easier for patients to grow their own when needed.

If home cultivation is not allowed, then cannabis is not truly legalized in Canada. Canadians must have at least as much right to grow their own cannabis as they do to brew their own beer and wine.

#5. Allow dispensaries

The Liberals need to recognize the important role that community-based dispensaries are playing, and to incorporate them into any legal access system.

Any system of legalization that tries to shut down the existing network of cannabis dispensaries will face strong opposition from Canada’s cannabis community.

#4. License more producers

Whatever the details of the system, it is important that there is equal access to the cannabis market, and that anyone who meets the quality standards can legally grow and sell cannabis.

Ultimately, the federal government should get out of licensing large-scale production and leave that to the provinces. But whoever the regulating and licensing authority is, the system needs to be fair and equal. Any attempt to limit production to a few major companies or create some kind of monopoly or cartel will be met with resistance, and will ultimately fail.

#3. Ditch the medical program

Cannabis is a wonderful medicine with a wide range of therapeutic benefits, but we don’t need a specialized medical cannabis system in Canada. Cannabis extracts should be available as non-prescription drugs for all Canadians to access.

When cannabis or a cannabis extracts is prescribed by a doctor then it should be exempt from GST, like other prescription drugs. But we don’t need the current complex system of restricted access for medical patients once all Canadians have access to legal cannabis.

Doctors should become more knowledgable about cannabis medicines, and legalization should mean that all sorts of new cannabis extracts are readily available for research and medicine. But since cannabis is generally safer than products like aspirin, most cannabis medicines should be sold over the counter, without a need for a prescription.

#2. Amnesty for past convictions

Legalization of cannabis must also include an amnesty for past cannabis convictions, so that those criminal records are erased from the system.

#1. Don’t overtax it

Legal cannabis needs to be cheaper and better than what is currently available, or else no-one is going to buy it. The only way to extinguish the black market is to substantially reduce the price of cannabis.

Any plan for legalization must not include extremely high or punitive taxes, as the result will be a thriving black market and no real change to the status quo.

If Trudeau’s Liberals stick to these 7 principles then legalization will be a success.

But if they try to legalize cannabis in the form of a highly taxed product grown only by big corporations, while banning home gardens and increasing penalties for underground dealers, then legalization will not succeed, and we will still have to keep fighting for a better system.

Jonathan Page is the co-founder of Anandia Labs and an Adjunct Professor at the University of British Columbia. He co-led the Canadian team that reported the first sequence of the cannabis genome and his work has helped elucidate the biochemical pathway leading to the major cannabinoids. Mr Page wrote an article at Lift, here is a very brief summary of a few of his points:

Like Liberal governments before him, Justin Trudeau practiced Big Tent politics to obtain a majority. Similarly, legalization has to offer a Big Tent so that the disparate parts of the existing industry – Licensed Producers (LPs), dispensaries and MMAR growers – are included. Health Canada and the 25+ LPs can be justifiably proud they have created a system to grow and distribute pharmaceutical-grade cannabis. But the Marihuana for Medical Purposes Regulations (MMPR) are viewed as a failure by many for their inability to create a system that both serves patients and creates a viable industry. The Allard injunction, the proliferation of Vancouver dispensaries, the logjam of LP applicants and the slow patient growth for LPs are indicators of systemic problems.
It is possible to safely grow cannabis at many scales from small outdoor gardens to massive indoor factories.The 2013 Liberal Party draft marijuana policy paper (PDF) suggested that production encompass “very small farms to medium size and large-scale operations”. Jamie Shaw of the Canadian Association of Medical Cannabis Dispensaries (CAMCD) wrote a blog post proposing that the cannabis production could resemble Canada’s brewing industry where industrial behemoths like Molson Coors co-exist with craft breweries.

It is difficult to contemplate a system that allows purchase of cannabis but not personal growing. I favour six plants (in flowering stage) with a cap on total plants in a household. The judge’s decision on the Allard case, which revolves around the right of patients to grow their own medical cannabis, now has added importance as legalization is contemplated.

In my opinion cannabis sits somewhere between a controlled substance and an NHP in the regulatory landscape but I don’t think it is productive to treat cannabis as either. Nor is it useful for it to be lumped with alcohol or tobacco. It is simply and uniquely cannabis. Amending laws created for prohibition is not likely to work as they were created to demonize cannabis. Let’s give cannabis its own laws and regulations that allow it to exist simultaneously as a medicine and a social (recreational) drug. Is the solution a pragmatic federal Cannabis Act or even a Psychoactive Substances Act for a new, post-prohibition era?

Written by Alternative Free Press
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Canada’s Corporate Cannabis Takeover Continues As Pharmacies Look Poised To Distribute by AlternativeFreePress.com is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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Jim Balsillie warns that Canada has “been outfoxed” & the TPP will cost Canada billions

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Jim Balsillie fears TPP could cost Canada billions and become worst-ever policy move

By Andy Blatchford
The Canadian Press : November 8, 2015

Jim Balsillie warns that provisions tucked into the Trans-Pacific Partnership could cost Canada hundreds of billions of dollars — and eventually make signing it the worst public policy decision in the country’s history.

After poring over the treaty’s final text, the businessman who helped build Research In Motion into a $20-billion global player said the deal contains “troubling” rules on intellectual property that threaten to make Canada a “permanent underclass” in the economy of selling ideas.

Last month, in the middle of the election campaign, the Conservative government put Canada’s signature on the controversial 12-country pact. The Pacific Rim agreement, which includes the massive American and Japanese economies, has been described as the world’s largest-ever trade zone.

But Balsillie said parts of the deal will harm Canadian innovators by forcing them to play by rules set by the treaty’s most-dominant partner: the United States.

The fallout could prove costly for Canada because technologies created by these entrepreneurs have the potential to create huge amounts of wealth for the economy, he says.

“I’m not a partisan actor, but I actually think this is the worst thing that the Harper government has done for Canada,” the former co-chief executive of RIM said in an interview after studying large sections of the 6,000-page document, released to the public last week.

“I think in 10 years from now, we’ll call that the signature worst thing in policy that Canada’s ever done…

“It’s a treaty that structures everything forever — and we can’t get out of it.”

Balsillie’s concerns about the deal include how it would impose intellectual property standards set by the U.S., the biggest partner in the treaty.

He fears it would give American firms an edge and cost Canadian companies more money because they would have to pay for someone else’s ideas instead their own.

On top of that, Balsillie believes the structure could prevent Canadian firms from growing as it would also limit how much money they can make from their own products and services.

Balsillie, who spent much of his time building RIM by negotiating agreements around the world, called the comprehensive final text a “brilliant piece of literature.”

“It’s such brilliantly systemic encirclement. I’m just in awe at its powerful purity by the Americans…

“We’ve been outfoxed.”

Negotiators ‘failed Canadians,’ says Balsillie

And unlike legislation passed in Parliament, he noted treaties like this one set rules that must be followed forever. This deal, he added, also features “iron-clad” dispute mechanisms.

“I’m worried and I don’t know how we can get out of this,” said Balsillie, who’s also helping guide the creation of a lobby group that would press for the needs of Canada’s innovation sector.

“I think our trade negotiators have profoundly failed Canadians and our future innovators. I really lament it.”

(read the full article at CBC)

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Whistleblower Says USDA Protecting Pesticide Makers

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Proof the USDA Would Rather Protect Pesticide Makers than Save the Bees

Derrick Broze
AntiMedia : October 29, 2015

On Wednesday, a researcher with the United States Department of Agriculture filed a whistleblower complaint alleging his supervisors suspended him in retaliation for his research on pesticides. The complaint follows calls for investigation of both the USDA and the Environmental Protection Agency.

According to the Washington Post, Jonathan Lundgren, an entomologist and 11-year veteran of the USDA’s Agricultural Research Service, filed the complaint with the federal Merit Systems Protection Board after his supervisors allegedly began to “impede or deter his research and resultant publications.” Lundgren is well-known in the scientific community for previously alleging the USDA attempted to prevent him from speaking about his research for political reasons.

The Post reported:

“The trouble began after he published research and gave interviews about the impact that certain common pesticides were having on pollinators, according to a statement by Public Employees for Environmental Responsibility (PEER), which filed the complaint on his behalf. The whistleblower complaint says Lundgren’s work showed the adverse effects of certain widely used pesticides, findings which have drawn national attention as well as the ire of the agricultural industry.’”

The USDA says Lundgren was suspended for submitting research to a scientific journal without proper approval and that he violated official travel policies related to lectures he gave in Philadelphia and Washington. Lundgren’s complaints say the article submission was not inappropriate and called the travel violations a paperwork error.

Lundgren previously published a study that found soybean seeds pre-treated with neonicotinoid pesticides “offer little benefit to soybean producers.” He also served as a peer reviewer in a report published by the Center for Food Safety. That study found further evidence that neonicotinoids adversely affect bees.

Laura Dumais, Staff Counsel for PEER, condemned the USDA’s decision to suspend Lundgren: “Having research published in prestigious journals and being invited to present before the National Academy of Sciences should be sources of official pride, not punishment. Politics inside USDA have made entomology into a most dangerous discipline,” she said

Scott W. Fausti, one of Lundgren peers, acknowledged the retaliation in the footnote of a paper recently published in Environmental Science & Policy:

“I would like to acknowledge Dr. Jonathan G. Lundgren’s contribution to this manuscript. Dr. Lundgren is an entomologist employed by the USDA Agricultural Research Service (ARS). However, the ARS has required Dr. Lundgren to remove his name as joint first author from this article. I believe this action raises a serious question concerning policy neutrality toward scientific inquiry.”

This is the not the first time the USDA has been called out for putting politics before science. In early May of this year, TruthInMedia reported that 25 organizations representing farm workers, food safety organizations, and the environment sent a letter to officials with the USDA and Environmental Protection Agency. They called for an investigation into claims that scientists are facing pressure and retaliation for research that presents the controversial neonicotinoid insecticide in a negative light.

The groups said they were concerned about a report from Reuters that detailed threats to scientists who speak out about the dangers of the pesticide. These threats included suspension without pay and threats of damage to careers. The scientists filed a petition in March asking for more protection.

PEER executive director Jeff Ruch told Common Dreams the petition was “based on the experiences of 10 USDA scientists.” The scientists allegedly faced backlash for research on neonicotinoid insecticides and glyphosate — an ingredient in Monsanto’s Roundup Herbicide — as well as their investigation of other topics, including genetically modified crops.

The “neonics” are a class of pesticide that has previously been linked to declines in bee populations. Neonics were developed in 1991 and commercial use began in the mid-1990s. Around 2006, commercial beekeepers began reporting what is now known as colony collapse disorder — where entire colonies of bees die off with no obvious cause. The disorder has been reported in commercial colonies all over the world. Several studies have implicated neonics, which are used to kill insects harmful to crops.

In early September, Anti-Media reported that a federal appeals court issued a ruling that blocks the use of the neonicotinoid, Sulfoxaflor. In spite of this small victory, PEER’s letter to the EPA and USDA expressed deep concerns about the effects of the pesticide on animals and the environment:

“Bees, butterflies, birds and other critical pollinators are in great peril and populations are dwindling worldwide. A growing body of scientific evidence has implicated neonicotinoids as a leading driver of bee declines and glyphosate as a leading driver of the destruction of milkweed, the sole food source for monarch butterflies. Recently, the World Health Organization’s research arm, the International Agency for Cancer Research (IARC), updated its cancer determination for glyphosate, categorizing it as ‘probably carcinogenic to humans’ (Group 2A) after reviewing scientific research from 17 of the world’s top oncology experts from 11 countries.”

A 2014 study published in the journal Nature found a strong correlation between pesticides measured in surface freshwater and lower population growth rates of 14 species of birds in the Netherlands. The study suggested the bird population might be drinking infected water or feeding infected insects to their offspring.

More recently, Swedish scientists conducted a study of neonics in the wild — the first of its kind. They examined 16 patches of land with canola seeds, half of which were sprayed with the pesticide. The other half was not sprayed. The researchers found that wild bees displayed negative health side effects while honeybee populations, which pollinate crops with assistance from humans, did not display the illness. A second study found that in laboratory tests, bees are not deterred by the pesticide and may actually prefer crops sprayed with the chemicals. This could indicate an addiction to the nicotine in the pesticides. Both studies were published in Nature.

Will the USDA be held accountable for allowing politics to dictate science? What role, if any, do corporations like Monsanto play in suppressing and discouraging science on pesticides? Let’s hope Jonathan Lundgren will continue speaking out about his findings. Unfortunately, it seems the USDA is yet another agency of the U.S. government in bed with corporations. While this news is disheartening, it is also a reminder that there has never been a better time to begin removing your support — both moral and financial — for the U.S. government and its corporate partners.

(The Anti Media cc)

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The world has simply shifted private debt to the public balance sheet

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October 21, 2015: Excerpted from Artemis Capital Management letter to investors

The arms race of devaluation is not free and has come at the cost of massive global debt expansion. There is no precedent in financial history for a robust economic recovery absent either debt reduction or rampant inflation. We never deleveraged, in fact we just doubled down. According to a recent McKinsey study the world has reached $200 trillion of debt in 2014 (286% of global GDP), which is a staggering 40% increase from 2007 levels (+$57 trillion). In China, debt has grown four times faster than GDP since 2007, and half of that debt is linked to their property market. The world has simply shifted private debt to the public balance sheet.

20151021_debt1_0

The private risk transfer to the public balance sheet can also be seen in the evolution of credit default swap pricing since 2007. Notice the sharp divergence between global sovereign CDS (red) and financial corporate CDS (blue) starting in 2013. The next major global crash will likely be driven by unhealthy sovereign credit rather than corporate credit. The next Lehman moment will be the financial collapse of a major developed country instead of a bank.

ddebt2_0

There are those who point to aggressive central banking of the late-1930s as the model for de-leveraging post-depression but this argument is highly flawed.

We didn’t financially engineer our way out of the Great Depression – we won a World War.

It’s extremely helpful in the de-leveraging process if you are the only capitalist industrial power left in the world untouched by utter and complete destruction. De-leveraging from the Great Depression had as much to do with the blood, sweat, and tears of American soldiers, the development of nuclear weapons, and the fact we were an ocean removed from the battlefield on both sides, as anything related to fiscal and monetary policy from the era.

I don’t think some investors are being radically honest when they omit this brutal truth in their analysis of late-1930s as model to argue for more quantitative easing. More quantitative easing is a great thing if you run a large risk parity fund but it will not help the American middle class.

Artemis Capital Management / Zero Hedge

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Ten ways the TPP gives too much power to foreign investors

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Gus Van Harten
rabble.ca: September 28, 2015

One of the most controversial parts of trade and investment agreements like the Trans-Pacific Partnership (TPP) is the special status they give to foreign investors.

Foreign investor lawsuits under these agreements have exploded, growing from a few cases in the late 1990s to more than 600 worldwide today.

This explosion has happened partly because the lawsuits are extremely powerful and lucrative for companies and their lawyers, compared to other kinds of lawsuits against countries. They are so powerful, I would call them super-sized.

Thus, under the TPP, U.S., Japanese, Malaysian, and other foreign companies would get a new power to sidestep Canada’s legal system by bringing a TPP lawsuit against Canada.

Or, they could go to the courts in Canada to attempt to strike down a decision, while using the TPP to seek public compensation not otherwise available in Canadian law.

By the same token, the lawyers sitting as arbitrators under the TPP would have immense power to condemn Canada by ordering compensation for foreign investors.

The arbitrators’ awards of compensation do not have a monetary ceiling. They are available not only for the amounts actually invested in an economy but also for lost future profits. They are enforceable against a losing sovereign’s commercial assets around the world, making the awards more enforceable than any court judgment against a sovereign.

The arbitrators’ power — and by extension foreign companies — can get hidden or drowned in legal details, especially by lawyers who promote investment treaties.

I highlight 10 points below that give a sense of how far this power would go, using the TPP as an example.

1. After a TPP lawsuit is filed by a foreign investor, the arbitrators can review almost anything Canada has done on behalf of its people. There would be complex exceptions in the TPP that safeguard aspects of Canada’s sovereignty, but generally the arbitrators’ power is very broad.

2. Foreign investors would be able to challenge — and TPP arbitrators could then review — a decision by a government, a legislature, or a court. The usual principles of Canadian law requiring such disputes to be decided in a Canadian court do not apply.

3. Foreign investor lawsuits are not limited to the federal government alone. The decisions of a province or a territory or by a municipal or First Nation council can also be challenged. In international law, all bodies that exercise public powers are part of Canada as a unified entity.

4. TPP arbitrators would operate at a different level from Canadian courts. A decision by a court is a sovereign act of Canada. Thus, all court decisions would be subject to final review by TPP arbitrators, if challenged by a foreign investor.

5. TPP arbitrators would not be limited by Canada’s constitution or other parts of Canadian law. They would be subject to the TPP and relevant rules of international law.

6. To a far greater degree than other treaties — on human rights, anti-corruption, or the environment, for example — trade deals like the TPP lay out elaborate rights for private parties (here, foreign investors only) in clear, binding language and they make those rights highly enforceable.

7. Treaties like the TPP describe foreign investors’ rights in vague language, which arbitrators have often interpreted broadly as a basis for compensating a foreign investor.

8. TPP arbitrators would largely be a power unto themselves. Their awards are subject to little or no review in any court. In some cases, they can be reviewed on limited grounds by a panel of other arbitrators chosen by the president of the World Bank in Washington, D.C. In other cases, they can be reviewed on limited grounds in a court, albeit typically in a place chosen by the arbitrators themselves.

9. If Canada did not pay a TPP award, a foreign investor could take the award to other countries that have agreed to enforce arbitration awards in other treaties. The most important of these other treaties — the New York Convention of 1958 and the Washington Convention of 1965 — were originally created to back up arbitrations under contracts, not trade deals.

10. TPP arbitrators would have the power to order countries to pay backward-looking compensation to foreign investors. That is, the compensation against a country is calculated from the time of the country’s original decision that is later found to have violated the treaty. It is not calculated from the time of the arbitrators’ decision itself. So, countries can rack up massive liability without knowing if the original decision actually violated the treaty. This can give powerful leverage to large corporations with deep enough pockets to fund a TPP lawsuit.

Since the early 1990s, foreign investor lawsuits have led to billions of dollars in awards against countries.

On the other hand, a foreign company could not itself be sued and ordered to pay Canada under the TPP. The trade and investment treaties are structured one way. They give exceptionally powerful rights to foreign investors without any actionable responsibilities.

(read the full article at rabble.ca)

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Selling Canada out, one deal at a time

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Gus Van Harten
Toronto Star : September 30, 2015

Since winning his majority, Stephen Harper’s government has signed or finalized 23 new trade or investment deals.

The right trade agreements can create opportunities for Canada. But the Harper government has seemed more interested in getting lots of deals than in making sure each is good for Canada’s economy.

Of all the deals facing Canada, three are by far the most important. They are the Foreign Investment Promotion and Protection Agreement (FIPA) with China, the Comprehensive Economic and Trade Agreement (CETA) with Europe, and the U.S.-led trans-Pacific Partnership (TPP).

Considering the financial transfers they tend to create, a more precise name for these deals might be: A Locked-In Agreement to Transfer Public Money to Large Companies, Lawyers and Arbitrators.

The deal we know the most about is the FIPA with China. Of the big three, it is the only one that has been finalized.

Some details of the FIPA will illustrate my point that the government has been behaving like a salesperson who gets lots of orders by selling at a loss. For example:

1. The Harper government gave Chinese investors “market access” to Canada — meaning a right to buy what they want in our economy — without getting the same for Canadian investors in China.

That is the most lopsided concession I had ever seen by Canada or, for that matter, any other country across hundreds of similar agreements.

2. When he announced the FIPA, Harper said that a FIPA “ensures non-discriminatory treatment” for foreign investors. But the actual terms of the FIPA (Article 8(2)(a), to be exact) let China keep all its existing laws, policies, or practices that discriminate against Canadian investors.

No one could fact-check Harper’s misleading claim at the time because the text was kept secret for about eight months after he made it.

3. In the FIPA, the Harper government exposed Canada to potentially massive financial liabilities due to the generous protections it gives to foreign companies, including a right to seek uncapped amounts of compensation from governments directly before international tribunals.

The Mulroney government gave similar rights to U.S. companies in Canada under NAFTA. But NAFTA was concluded before anyone could predict the hundreds of costly claims brought by foreign companies against countries in the last 15 years.

Having looked closely at the FIPA, I also see cause for concern in the CETA and the TPP.

Harper was clearly desperate to finalize the CETA before the election. Several times he has announced it with fanfare. Yet, despite various concessions, he could not get it done in time. This is mostly because the Europeans looked closely at the deal’s generous protections for foreign investors and asked about the consequences for domestic courts, democracy, and public budgets.

There has been a similar debate in the United States over the TPP.

Worse, Harper is poised to compromise Canada’s dairy and auto industries in a bid to finish the TPP negotiations before the election. The Americans seem to have sensed his political vulnerability and played him to Canada’s expense.

(read the full article at Toronto Star)

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When “Virtuous Debt” Turns Ferociously Vicious: The Mother Of All Corporate Margin Calls On Deck

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Zero Hedge/Bawerk

Corporate foie gras

One of the arguments put forth in the bull vs. bear debate is that the solidity of US non-financial corporations have never been stronger. The amount of cash held by non-financial corporations has risen 150 per cent since the depth of the crisis in 2009. With such a massive cushion to stave off whatever the market may throw at them, they will be able to cope, or so it is held.

In addition, we know that financial corporations are flush with cash, or excess reserves held at the Federal Reserve. Throughout the various quantitative easing (QE) programs conducted by the Federal Reserve, commercial banks have been force fed cash as ducks on a foie gras farm. This has swelled their excess reserves to the unprecedented, and what would be thought unimaginable only few years’ back, level of US$2.6 trillion.

With all this cash the system should be, again according to the perma-bulls, more than ready to withstand the shock from the ongoing global deleveraging, a stronger dollar, emerging market blow-ups and the forthcoming US recession.

We beg to differ. When it comes to excess reserves they are most likely already “spoken” as a form of collateral in shadow banking chains. While the initial effect from QE on the shadow banking system was massive deflationary shock as all the high quality securities used in re-hypothecated collateral chains were soaked up by the Federal Reserve, it is a safe bet that excess reserves has to some extent filled that void.

In the non-financial sector on the other hand cash is, well, plain old cash. With more than US$1 trillion of the stuff on their balance sheet complacency is destined to be prevalent. And it is.

Credit market instruments, i.e., debt, have also risen at a tremendous rate. Net debt, that is credit market liabilities less cash, has actually never been higher. As the chart below shows, sitting at more than US$6.6 trillion, non-financial net debt outstrips even the high from 2008.

Now, if we express the gargantuan debt load as share of market value of non-financial equities outstanding things looks not only sustainable, but outright sound. At only 30 per cent the debt to equity ratio is at multiyear lows. We need to go all the way back to the peak of the dot-com folly to find today’s equal.

And it is exactly the folly of the dot-com (and went) that best epitomizes todays manic corporate debt issuance. According to Bloomberg more than US$2.7 trillion in stock buybacks has been effectuated over the last six years. We would be amiss if we didn’t mention that this spending spree, not on capital goods or R&D that will help propel future growth mind you, but on liability massaging, coincided with ZIRP.

Investors desperate for yield have more than happy to lend US Inc. trillions of dollars, even though it is used mainly to buy back own stock. Not surprisingly this also help goose the market value of equites outstanding; also known as the denominator in the ratio presented in our chart.

So more debt begets higher market value of equites which in turn improves the debt/equity ratio which gives the incentive to issue more debt ad infinitum. Or in a slightly simpler version, debt begets more debt.

We have seen the story before. In the shaded grey areas we highlight episodes when the virtuous relationship turns ferociously vicious. Remember, markets take the escalator up, but the elevator down. And the longer the escalator the further down the elevator goes.


Source: Federal Reserve Flow of Funds (Z.1), Bawerk.net

When the US recession hits (see here for more) the massive gap between the green and red line in our chart above will close in short order and the calamity will be even worse than last time, which incidentally was far worse than the time before that.

And this Ladies and Gentlemen is aggregate demand management in practice where, for some unexplained reason, the abundance of savings does not clear the market for investable funds not even at the zero lower bound.

The fact that central bank perverts capital markets and is to a large extent responsible for the very same secular stagnation central bankers believe they must fight, seems lost on today’s intelligentsia.

* * *

Back to ZH here, in addition to Bawerk’s explanation of what may be the biggest “non-financial sector” margin call ever on deck, we just wanted to underscore one of the main points made in the piece above, namely the stability – or rather lack thereof – of US Commercial banks, whose cash assets according to the most recent H.8 statement amounts to $2.8 trillion. The problem is that of this, over $2.5 trillion comes from the Fed’s excess reserves which at some point will be unwound, meaning the true cash level of US banks – when one excludes excess reserves – has not budged at all since the financial crisis, and has in fact declined to a pro forma level of just over $200 billion.


North Dakota Legalizes Police Using Weaponized Drones

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First State Legalizes Taser Drones for Cops, Thanks to a Lobbyist

Justin Glawe
The Daily Beast : August 26, 2015

North Dakota police will be free to fire ‘less than lethal’ weapons from the air thanks to the influence of Big Drone.

It is now legal for law enforcement in North Dakota to fly drones armed with everything from Tasers to tear gas thanks to a last-minute push by a pro-police lobbyist.

With all the concern over the militarization of police in the past year, no one noticed that the state became the first in the union to allow police to equip drones with “less than lethal” weapons. House Bill 1328 wasn’t drafted that way, but then a lobbyist representing law enforcement—tight with a booming drone industry—got his hands on it.

The bill’s stated intent was to require police to obtain a search warrant from a judge in order to use a drone to search for criminal evidence. In fact, the original draft of Representative Rick Becker’s bill would have banned all weapons on police drones.

Then Bruce Burkett of the North Dakota Peace Officer’s Association was allowed by the state house committee to amend HB 1328 and limit the prohibition only to lethal weapons. “Less than lethal” weapons like rubber bullets, pepper spray, tear gas, sound cannons, and Tasers are therefore permitted on police drones.

Becker, the bill’s Republican sponsor, said he had to live with it.

“This is one I’m not in full agreement with. I wish it was any weapon,” he said at a hearing in March. “In my opinion there should be a nice, red line: Drones should not be weaponized. Period.”

Even “less than lethal” weapons can kill though. At least 39 people have been killed by police Tasers in 2015 so far, according to The Guardian. Bean bags, rubber bullets, and flying tear gas canisters have also maimed, if not killed, in the U.S. and abroad.

Becker said he worried about police firing on criminal suspects remotely, not unlike U.S. Air Force pilots who bomb the so-called Islamic State, widely known as ISIS, from more than 5,000 miles away.

“When you’re not on the ground, and you’re making decisions, you’re sort of separate,” Becker said in March. “Depersonalized.”

Drones have been in use for decades by the military, but their high prices have prevented police departments from obtaining them until recently. Money’s no problem for the the Grand Forks County Sheriff’s Department, though: A California manufacturer loaned them two drones.

Grand Forks County Sheriff Bob Rost said his department’s drones are only equipped with cameras and he doesn’t think he should need a warrant to go snooping.

(read the full article at The Daily Beast

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Only The Date Is Unknown

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economicnoise.com : August 11, 2015

The US and world economies are frauds that are coming unraveled. The Greek bailout is the most recent example of “kick the can down the road” solutions. The US housing bubble was an attempt to cover up/recover from the dot-com bust. Now the US is in a financial bubble engineered to recover from the housing bubble debacle. Soon this bubble will burst. Only the date is unknown.

Two predictions can be made with reasonable confidence:

  • The stock market is likely to be halved and that might be optimistic. Only the date is unknown.
  • The economy will eventually resemble the Great Depression. Only the date is unknown.

Nothing is ever certain. An experienced CFO told me at the beginning of my career that “even the impossible has a 20% probability.” In deference to him and years of empirical evidence, I put the the above two events as virtually certain, i.e., an 80% probability.

The Current Problem

Phoenix Capital provided reasons to expect horrible outcomes:dow death cross

  • The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.
  • The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.
  • Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.
  • Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.
  • The Central Banks are now all leveraged at levels greater than or equal to where Lehman Brothers was when it imploded. The Fed is leveraged at 78 to 1. The ECB is leveraged at over 26 to 1. Lehman Brothers was leveraged at 30 to 1.
  • The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion.

The cumulative effects of decades of interventions to mask economic weakness are harmful to the economy. Statistical manipulation and outright lies in government reporting of economic conditions suggest that times are becoming ever more desperate for the political class. There is not enough bailing wire in the world to hold this train wreck in check. Nor is there any way to solve the massive problems created over decades.

Mac Slavo believes we are already in a world-wide depression stating:

With stock markets in China having self destructed, Greece and Europe in another crisis, and corporate earnings for some of the world’s biggest corporations showing lackluster performance, it should be clear that the situation is rapidly deteriorating.

But for the last several years America has appeared to remain fairly insulated from overt crisis. We were told that a recovery had taken hold, jobs were returning and consumer confidence had reached new highs, propaganda which drove millions of investors back into stock markets and real estate. No one in the mainstream world, it seems, believes there’s anything to be concerned about.


Except there is.

Nassim Taleb described the problem:

Uncertainty should not bother you. We may not be able to forecast when a bridge will break, but we can identify which ones are faulty and poorly built. We can assess vulnerability. And today the financial bridges across the world are very vulnerable. Politicians prescribe ever larger doses of pain killer in the form of financial bailouts, which consists in curing debt with debt, like curing an addiction with an addiction, that is to say it is not a cure. This cycle will end, like it always does, spectacularly.

Each intervention has been bigger than the previous one. And they are needed more frequently. Bad times are here and have been despite what government says. Worse times lie ahead. Only the date is unknown.

(read the full article at economicnoise.com)

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The Crisis Is Spreading: China, Australia, Brazil, Canada, Sweden…

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Keith Dicker
IceCap : August 2015

Governments all around the world have borrowed too much money and the weight of these debts are choking economic growth.

And to make matters worse – these very same governments and their central banks have implemented various plans that have only made matters worse.

The global debt crisis has escalated to a point where the government bond bubble has inflated itself to become the mother of all bubbles. It’s going to burst, and when it does it wont be pretty.

Further evidence to support our view is as follows:

Canada – the collapse in oil and commodity markets has pushed the country into recession and the Canadian Dollar to decline to levels lower than that reached during the 2008 crisis.

Oil dependent provinces Alberta and Newfoundland remain in deep denial. Since everyone in these provinces have only ever experienced a booming oil market, many naively believe things will bounce back – and quickly.

Meanwhile, both Toronto and Vancouver housing markets also remain in denial as they continue to go gangbusters. Buyers today are likely buying at all-time highs.

And as we predicted last year, the Bank of Canada has cut (not raised) interest rates twice in the last 6 months.

We fully expect the Bank of Canada to eventually cut interest rates to 0% and start a money printing program as well. And for the stunner – NEGATIVE interest rates will not be that far behind.

Australia – Over the last 20 years, China has been viewed as the growth engine of the world, and justifiably so. With annual growth rates between 8% to 15%, China’s economy was literally eating every rock, stalk and barrel of practically every commodity in the world.

And naturally, any country or company that produced these commodities made a tonne of money – including Australia.

Today, China’s growth rate has slowed to about 3% which is a dramatic slow down compared to what it achieved in the past. This slowdown and China’s effort to even maintain these rates, will have significant repercussions around the world.

And the first up to bear the brunt of this slowdown is its closest supplier of raw materials – Australia.

With dark clouds on the economic horizon, the Australian government and central bank is doing everything possible to prevent the unpreventable recession.

Interest rates have been reduced to all-time historical lows, meanwhile the Australian Dollar has plummeted -25% over the last year. Yet – the negative outlook has not improved.

Brazil – Like Australia, Brazil has benefitted immensely from China’s growth. And now, also like Australia, it too is feeling the affects of the dramatic Chinese slowdown.

The economy has now declined for 12 consecutive months making it both the longest and deepest recession in 25 years.

But wait – it gets worse. Despite declining growth, inflation continues to soar higher causing interest rates to rise as well.

And if that wasn’t bad, also know that the Brazilian currency has fell off the cliff at -53%.

Sweden – Unlike Australia and Brazil, Sweden relies very little on China as a buyer of last resort. Yet, the Swedish economy is also not very hot these days.

In fact, instead of spectacular and dramatic declines in anything, it is doing the exact opposite – it just isn’t moving.

While Sweden isn’t in the Eurozone, it is smack dab next to it and that in itself is reason enough for the lack of growth. We’ve written before how the debt crisis in the Eurozone is acting like a giant, slow moving tornado that is sucking the life out of the economy and everything near by. And unfortunately for Sweden, it is very near by.

While economic growth in the Nordic state hasn’t declined, it hasn’t accelerated either – and this is what has many worried.

So worried, that the central bank shocked everyone not once but twice, by first announcing that they would begin to print money, and then when they announced that interest rates would be NEGATIVE.

These actions are so severe, that we need to repeat them:

1) MONEY PRINTING
2) NEGATIVE INTEREST RATES

It is hoped that these actions will cause people and companies to loosen their wallets and start spending again. Yet, what the government and the central bank doesn’t understand is that these actions will actually make the problem worse.

As the global economy continues to move as we expect, there is nothing Sweden can do to change what is coming – a global recession and a significantly weaker Krona.

China, Australia, Brazil, Canada, Sweden – it is beyond us how anyone can declare the crisis isn’t spreading.

* * *

IceCap’s full letter below

Greek “Hell” Remains After Athens Uses Creditor Money To Repay Creditors

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Zero Hedge: July 20, 2015

Earlier today, Greece used up virtually its entire €7.1 billion bridge loan from the EU to repay its creditors: between the money due to the ECB, the arrears to the IMF and the cash borrowed from the Greek central bank, Athens had about €300 million left over from the entire inbound wire to use as it sees fit just hours after the money was received, and then promptly sent right back.

Or, as some put it, Greece collected a 4% transaction fee for facilitating a €6.8 billion payment from its creditors to its creditors.

So does this mean things are “fixed” in Greece, if only temporarily? Not exactly, as the following table shows, there is exactly one month until the next €3.2 billion payment is due to the ECB. So unless Europe finalizes the terms of the third €86 billion EFSF bailout in the next 4 weeks, Greece will need another bridge loan just to repay the ECB.

Ok, but if Greece somehow survives until the end of 2015 despite a new government and with blistering VAT hikes, even as bank lines to withdraw money refuse to go away, then will it finally be ok?

Well, no.

As we showed before when we showed the various Greek circle of debt hell, unless Greece finds a way to access the market once again following its “triumphal return” in mid-2014 when it issued bonds that cost investors (with other people’s money) their 2015 bonus, it is only then that the Greek debt repayment hell begins.

(read the full article at zero hedge)

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How Goldman Sachs Profited From the Greek Debt Crisis

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Robert B. Reich
The Nation : July 16, 2015

The investment bank made millions by helping to hide the true extent of the debt, and in the process almost doubled it.

The Greek debt crisis offers another illustration of Wall Street’s powers of persuasion and predation, although the Street is missing from most accounts.

The crisis was exacerbated years ago by a deal with Goldman Sachs, engineered by Goldman’s current CEO, Lloyd Blankfein. Blankfein and his Goldman team helped Greece hide the true extent of its debt, and in the process almost doubled it. And just as with the American subprime crisis, and the current plight of many American cities, Wall Street’s predatory lending played an important although little-recognized role.

In 2001, Greece was looking for ways to disguise its mounting financial troubles. The Maastricht Treaty required all eurozone member states to show improvement in their public finances, but Greece was heading in the wrong direction. Then Goldman Sachs came to the rescue, arranging a secret loan of 2.8 billion euros for Greece, disguised as an off-the-books “cross-currency swap”—a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate.

As a result, about 2 percent of Greece’s debt magically disappeared from its national accounts. Christoforos Sardelis, then head of Greece’s Public Debt Management Agency, later described the deal to Bloomberg Business as “a very sexy story between two sinners.” For its services, Goldman received a whopping 600 million euros ($793 million), according to Spyros Papanicolaou, who took over from Sardelis in 2005. That came to about 12 percent of Goldman’s revenue from its giant trading and principal-investments unit in 2001—which posted record sales that year. The unit was run by Blankfein.

Then the deal turned sour. After the 9/11 attacks, bond yields plunged, resulting in a big loss for Greece because of the formula Goldman had used to compute the country’s debt repayments under the swap. By 2005, Greece owed almost double what it had put into the deal, pushing its off-the-books debt from 2.8 billion euros to 5.1 billion. In 2005, the deal was restructured and that 5.1 billion euros in debt locked in. Perhaps not incidentally, Mario Draghi, now head of the European Central Bank and a major player in the current Greek drama, was then managing director of Goldman’s international division.

Greece wasn’t the only sinner. Until 2008, European Union accounting rules allowed member nations to manage their debt with so-called off-market rates in swaps, pushed by Goldman and other Wall Street banks. In the late 1990s, JPMorgan enabled Italy to hide its debt by swapping currency at a favorable exchange rate, thereby committing Italy to future payments that didn’t appear on its national accounts as future liabilities.

But Greece was in the worst shape, and Goldman was the biggest enabler. Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman wasn’t an innocent bystander: It padded its profits by leveraging Greece to the hilt—along with much of the rest of the global economy. Other Wall Street banks did the same. When the bubble burst, all that leveraging pulled the world economy to its knees.

[…]

Meanwhile, cities and states across America have been forced to cut essential services because they’re trapped in similar deals sold to them by Wall Street banks. Many of these deals have involved swaps analogous to the ones Goldman sold the Greek government. And much like the assurances it made to the Greek government, Goldman and other banks assured the municipalities that the swaps would let them borrow more cheaply than if they relied on traditional fixed-rate bonds—while downplaying the risks they faced. Then, as interest rates plunged and the swaps turned out to cost far more, Goldman and the other banks refused to let the municipalities refinance without paying hefty fees to terminate the deals.

Three years ago, the Detroit Water Department had to pay Goldman and other banks penalties totaling $547 million to terminate costly interest-rate swaps. Forty percent of Detroit’s water bills still go to paying off the penalty. Residents of Detroit whose water has been shut off because they can’t pay have no idea that Goldman and other big banks are responsible. Likewise, the Chicago school system—whose budget is already cut to the bone—must pay over $200 million in termination penalties on a Wall Street deal that had Chicago schools paying $36 million a year in interest-rate swaps.

A deal involving interest-rate swaps that Goldman struck with Oakland, California, more than a decade ago has ended up costing the city about $4 million a year, but Goldman has refused to allow Oakland out of the contract unless it ponies up a $16 million termination fee—prompting the city council to pass a resolution to boycott Goldman. When confronted at a shareholder meeting about it, Blankfein explained that it was against shareholder interests to tear up a valid contract.

Goldman Sachs and the other giant Wall Street banks are masterful at selling complex deals by exaggerating their benefits and minimizing their costs and risks. That’s how they earn giant fees. When a client gets into trouble—whether that client is an American homeowner, a US city, or Greece—Goldman ducks and hides behind legal formalities and shareholder interests.

Borrowers that get into trouble are rarely blameless, of course: They spent too much, and were gullible or stupid enough to buy Goldman’s pitches. Greece brought on its own problems, as did many American homeowners and municipalities.

But in all of these cases, Goldman knew very well what it was doing. It knew more about the real risks and costs of the deals it proposed than those who accepted them. “It is an issue of morality,” said the shareholder at the Goldman meeting where Oakland came up. Exactly.

(Full article at The Nation)

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