In Africa, Ending a Despot Doesn’t End Despotism

In the tradition of dimming debate, the chattering class has reduced systemic corruption in South Africa and the near collapse in Zimbabwe, respectively, to the shenanigans of two men: Jacob Zuma and Robert Mugabe.
Zuma, the President of South Africa, currently faces possible impeachment for corruption, while Robert Mugabe has now been forcibly ‘retired’ after 30 years as President.
Surely by now, though, it should be common knowledge that in Africa, if you replace a despot, but not despotism, you only oust a tyrant, and not tyranny.
How Kleptocracy Works Emblematic of this is a thematically confused article in The Economist, offering a description of the dynamics set in motion by the Zuma dynasty’s capture of the state.
At first, the magazine explains the concept of ‘state capture’ as “private actors [having] subverted the state to steal public money.”
Later, the concept is more candidly refined: ‘The nub of the state capture argument is that Mr. Zuma and his friends are putting state-owned enterprises and other governmental institutions in the hands of people who are allowing them to loot public funds.”
Indeed. Corruption invariably flows from state to society.

This post was published at Ludwig von Mises Institute on Dec 31, 2017.

Thomas Frank Interviews 7 and 8 with Paul Jay on the Real News Network

Here is the two part continuation of the interviews on the Real News Network between Paul Jay and Thomas Frank.
Frank has the Clintons nailed, and continues to reiterate the high points of how they led the Democratic Party into an historic betrayal of their base, the working people. For money and power.
However, he is far, far too kind, almost to the point of what can be called a willful bias, to Barack Obama.
I am sorry, but can it be more obvious that Obama was a bait-and-switch brand for the oligarch class?
He seems to come back to a more realistic assessment in the second segment. But he just cannot bring himself to draw the conclusion that Obama was not some hapless dupe, a victim of circumstance, but knew exactly what he was doing, and early on had made his choice of what or whom to serve.


This post was published at Jesses Crossroads Cafe on 29 DECEMBER 2017.

Up Next——Deflation In The Canyons Of Wall Street

Record high stock and bond prices are flashing danger signs to former Reagan White House Budget Director David Stockman. Stockman contends, ‘I don’t think we are going to have a liquidity crisis. I think it’s going to be a value reset. I think there is going to be a jarring downward price adjustment both in the stock market and in the bond market. This phantom or phony wealth that has been created since the last crisis is going to basically evaporate.’
So, what asset is safe? Stockman says gold and goes onto explain, ‘I think the time to buy (gold and silver) is ideal. Gold is the ultimate and only real money. Gold is the only safe asset when push comes to shove. They tell you to buy the government bond, that’s a safe asset. It’s not a safe asset at its current price. I am not saying the federal government is going to default in the next two or three years. I am saying the yield on a 10-year bond of 2.4% is way below of where it’s going to end up. So, the only safe asset left is gold. This crazy Bitcoin mania has drained off what would otherwise be a demand for gold. . . . When Bitcoin collapses, spectacularly, which it will because it’s sheer mania in the markets right now. When it collapses, I think a lot of that demand will come back into gold, as well as people fleeing the standard stock and bond markets for the first time in 9 or 10 years.’

This post was published at David Stockmans Contra Corner on December 27th, 2017.

Hysteresis In The C-Suite—-Why The GOP Tax Bill Won’t Stimulate “Growth” (Part 3)

Yesterday (Part 2) we documented the vast difference between the Reagan Tax Cut of 1981 and the GOP Tax Bill of 2017—-both as to scale and potential to stimulate supply-side growth of output, investment, jobs and earnings.
In a word, the Reagan tax cut averaged 4.0% of GDP over a decade and was predominately focused on supply-side incentives via a 25% marginal rate cut for individuals and a giant business cut. The latter would amount to $300 billion per year at today’s economic scale, and, crucially, was also tightly linked to CapEx via the 10-5-3 depreciation incentive for new plant, equipment and technology purchases.
By contrast, the current GOP Tax Cut is just one-tenth the size (o.4% of GDP) of the Reagan cut over the next decade and has virtually no supply-side incentives at all. The individual income tax cuts are temporary and reflect a Keynesian purpose to put “money in the pockets” of workers via, for instance, doubling the standard deduction and child credit.
At the same time, the heart of the GOP tax cut is a wholly misguided $1.4 trillion 10-year reduction of the corporate tax rate to 21%. But under the deformed monetary and financial conditions of the present, that will actually just put money in the brokerage accounts of the wealthy and Wall Street speculators.

This post was published at David Stockmans Contra Corner on Friday, December 22nd, 2017.

Saudi General Reportedly Tortured To Death After Refusing To Fork Over His Fortune

Rumors that Saudi Crown Prince Mohammad bin Salman has hired mercenaries to torture recalcitrant royals and officials sleeping in the ballroom of the Ritz Carlton in Riyadh have been circulating since shortly after last month’s ‘corruption crackdown’ naked cash grab.
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Now, Middle East Eye reports that one of MbS’s guests has reportedly died under torture rather than fork over his money and assets to his domineering relative. He was reportedly beaten and tortured so bad his family members had difficulty recognizing his body.
Major general Ali Alqahtani, who was detained in early November as part of an alleged anti-corruption drive, had been working in the royal guard forces.
He was the manager of the private office of Prince Turki Bin Abdullah, the son of former king Abdullah Bin Abdulaziz, according to the newspaper.
Alqahtani died on 12 December after being tortured with electric shocks, and his family struggled to recognise him after receiving his body, according to sources, the newspaper reported.

This post was published at Zero Hedge on Dec 23, 2017.

Good Riddance!

CNBC’s Fed fanboy, Steve Liesman, accidentally knocked one out of the park yeserday when he lured Janet Yellen into a quip that will surely go down as the signature insanity of her baleful tenure. Liesman thus queried:
“Every day it seems the stock market goes up triple digits… is it now, or will it soon become a worry for the central bank that valuations are this high?”
After a bit of double talk interspersed with gobbledygook, Yellen uttered the money quote:
”There is nothing flashing red there or possibly even orange,” on asset valuations…
Holy cow!
Surely our soon to be pensioned-off Keynesian School Marm was not thinking about the fact that the S&P 500 stood at 2662 as she spoke, which amounts to 24.9X the $107 per share of earnings posted by America’s leading companies for the LTM period ending in September 2017.

This post was published at David Stockmans Contra Corner on Thursday, December 14th, 2017.

“Gnomes Of Zurich” In Panic As Saudi Corruption Crackdown Sparks Flood Of Money Laundering Inquiries

There are two divergent views on the crackdown on corruption by Saudi Arabia’s crown prince, Mohammed bin Salman (MBS), which led to the arrest and detention of 200 princes, ministers and former ministers.
On one hand, it was a masterstroke which will earn political capital with the Saudi people and catalyse an Arab Spring in which MBS is a modernizing reformer who will liberalise Islam.
On the other, it was nothing other than a cynical and desperate attempt to tighten his grip on power and weaken competing clans within the ruling family (especially sons of former King Abdullah) as the nation risks splitting apart due to political and economic fissures. Last week, we noted that former head of the National Guard and senior member of the Abdullah clan, Prince Miteb bin Abdullah, purchased his freedom for a cool $1 billion.
If you put yourself in the position of being a Saudi prince or wealthy Saudi official, whatever your opinion of MBS’s motivation, you would be forgiven for taking additional measures to make it harder for his henchmen to seize your wealth if you found yourself in the crosshairs.

This post was published at Zero Hedge on Dec 5, 2017.

Detained Saudi Prince Buys His Freedom For $1 Billion

One day you were the billionaire head of the National Guard in one of the world’s most brutal dictatorships. Although that carries some risk, you were probably reassured by your position as a senior prince in the ruling family, never mind your strong ties to the US military… oh and of course the many zeros in your bank account. The next day, in a turn of events akin to Shakespearian drama, you were imprisoned (kind of) with ten of your fellow princes and a bunch of ministers and former ministers in a 5 star hotel on charges of money laundering, bribery and general corruption.
Despite being a cousin of the Kingdom’s uber-autocratic crown prince, Mohammed bin Salman (MBS), Prince Miteb bin Abdullah was a son of former King Abdullah and got caught up in a clan war in the ruling family. Former Riyadh governor and another of King Abdullah’s sons, Turki bin Abdullah, was also arrested in the crackdown.
Miteb was accused of conducting normal business practices in Saudi Arabia, such as embezzlement, hiring ‘ghost’ employees and awarding his own companies a $10 billion contract for walkie-talkies and bullet proof protection. However, after what must have been the worst three and a half weeks of his life in the Ritz Carlton ‘prison’, Miteb has purchased his freedom for a cool $1 billion.

This post was published at Zero Hedge on Nov 29, 2017.

Jeff Bezos and All He Owns Must Be Destroyed

There is a basic premise behind reporting .vs. editorializing — one is allegedly unbiased, although we all have our personal prejudices while the other is labeled opinion (it’s found on the opinion page and is disclosed as such.)
Jeff Bezos bought the Washington Post, it is now clear, in order to effect a public lobbying strategy much larger than that which Hastings “organized” and led to a five times increase in his firm’s stock price revolving around net neutrality.
That latter event occurred after ISPs, properly recognizing that he was effectively driving semi trucks over the roads built for cars and refusing to pay higher fuel taxes and license plate fees for same, or, if you prefer, opening up a 2″ water connection to a 6″ main and demanding not to be charged by the gallon, resulting in you having no water pressure, started pushing back and demanding that Netflix cover the outsized costs being imposed on said ISPs to prevent service-quality collapses to everyone, including those who didn’t want his service.
In response Hastings got a bunch of left-aligned media to whip the public into a froth and Obama’s FCC obliged by handing him tens of billions of dollars of money literally forced out of non-subscriber’s wallets.
Amazon engages in cross-subsidization of its product sales (on which he makes no profit, particularly when fulfillment along with G&A are included) with other sales, particularly in AWS, where he does. This now includes government sales of AWS which means you’re being forced to subsidize Jeff Bezos’ destruction of retailers all across the United States at literal gunpoint, along with all the jobs that go when those retailers are forced out of business.

This post was published at Market-Ticker on 2017-11-24.

Saudi Purge Claims Its Latest Corporate Victim As Kingdom Holdings Sees $1.3 Billion Bank Deal Collapse

For the past couple of weeks we’ve written frequently about the sudden political turmoil in Saudi Arabia that resulted in two Saudi princes being killed in a span of just 24 hours and dozens others being detained on charges of corruption while having their bank accounts frozen. Here are couple of our most recent background posts on the topic:
The Saudi Purge: The Middle-East Is On The Verge Of A New War If The Saudi Arabia Situation Doesn’t Worry You, You’re Not Paying Attention Now, per an exclusive report from Reuters, it appears as though the latest casualty of the Saudi shakeup is a financing deal sought by the $8 billion dollar Kingdom Holdings which is owned and run by Prince Alwaleed bin Talal…at least until he was recently arrested that is.
Kingdom Holding’s plan to borrow money to fund new investments has stalled because owner Prince Alwaleed bin Talal has been detained in Saudi Arabia’s anti-corruption crackdown, according to four banking sources familiar with the matter. Kingdom 4280. SE had approached banks to obtain the loan, but the financing plan has been held up because the lenders are worried about potential repercussions if they lend to the prince’s company, the sources said.
One of the sources, who was approached for the loan, said it would have been worth roughly 5 billion riyals ($1.3 billion).

This post was published at Zero Hedge on Nov 20, 2017.

FBI Informant Has Video Of Russian Agents With Briefcases Of Bribe Money In Clinton-Uranium Scandal

An undercover FBI informant in the Russian nuclear industry who was made to sign an ‘illegal NDA’ by former AG Loretta Lynch, claims to have video evidence showing Russian agents with briefcases full of bribe money related to the controversial Uranium One deal – according to The Hill investigative journalist John Solomon and Circa’s Sara Carter.
The informant, whose identity was revealed by Reuters as William D. Campbell, will testify before congress next week after the NDA which carried the threat of prison time was lifted. Campbell, originally misidentifed by Reuters as a lobbyist is actually a nuclear industry consultant who is currently battling cancer.
As previously reported, Campbell was deeply embedded in the Russian nuclear industry where he gathered extensive evidence of a racketeering scheme involving bribes and kickbacks.
‘The Russians were compromising American contractors in the nuclear industry with kickbacks and extortion threats, all of which raised legitimate national security concerns. And none of that evidence got aired before the Obama administration made those decisions,’ a person who worked on the case told The Hill, speaking on condition of anonymity for fear of retribution by U. S. or Russian officials. -The Hill


This post was published at Zero Hedge on Nov 18, 2017.

Next-Generation Crazy: The Fed Plans For The Coming Recession

Insanity, like criminality, usually starts small and expands with time. In the Fed’s case, the process began in the 1990s with a series of (in retrospect) relatively minor problems running from Mexico’s currency crisis thorough Russia’s bond default, the Asian Contagion financial crisis, the Long Term Capital Management collapse and finally the Y2K computer bug.
With the exception of Y2K – which turned out to be a total non-event – these mini-crises were threats primarily to the big banks that had unwisely lent money to entities that then flushed it away. But instead of recognizing that this kind of non-fatal failure is crucial to the proper functioning of a market economy, providing as it does a set of object lessons for everyone else on what not to do, the Fed chose to protect the big banks from the consequences of their mistakes. It cut interest rates dramatically and/or acquiesced in federal bailouts that converted well-deserved big-bank losses into major profits.
The banks concluded from this that any level of risk is okay because they’ll keep the proceeds without having to worry about the associated risks.
At this point – let’s say late 1999 – the Fed is corrupt rather than crazy. But the world created by its corruption was about to push it into full-on delusion.
The amount of credit flowing into the system in the late 1990s converted the tech stock bull market of 1996 into the dot-com bubble of 1999, which burst spectacularly in 2000, causing a deep, chaotic recession.

This post was published at DollarCollapse on NOVEMBER 17, 2017.

The Big Money Grab Is ‘On’ As Middle America Collapses

The stock market rejoices the House passage of the tax ‘reform’ Bill as the Dow shot up 187 points and the S&P 500 spiked up 21. The Nasdaq soared 1.3%, retracing its 3-day decline in one day. The tax bill is nothing more than a massive redirect of money flow from the Treasury Department to Corporate America and billionaires. The middle class will not receive any tax relief from the Bill but it will shoulder the burden of the several trillion dollars extra in Treasury debt that will be required to finance the tax cuts for the wealthy. The tax ‘reform’ will have, at best, no effect on GDP. It will likely be detrimental to real economic output.
The Big Money Grab is ‘on’ at the highest levels of of Wall St., DC, Corporate America, the Judiciary and State/local Govt. These people are grabbing from a dying carcass as fast and greedily as possible. The elitists are operating free from any fear of the Rule of Law. That particular nuisance does not apply to ‘them’ – only to ‘us.’ They don’t even try to hide their grand scale theft anymore because the protocol in place to prevent them from doing this is now on their side. This is the section in Atlas Shrugged leading up to the big implosion.
‘When you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.’ – Atlas Shrugged

This post was published at Investment Research Dynamics on November 16, 2017.

At Last – Clinton Foundation Gets Investigated

What goes around, comes around. The Washington Post has reported that the Department of Justice has instructed the US Attorney’s Office to investigate the controversial sale of a uranium group to Russia during the presidency of Barack Obama and the role of the Clinton Foundation. The Obama administration approved the deal in 2010 giving Moscow control of a much of the American uranium sources. It turns out that the FBI had gathered significant evidence that Russian nuclear industry officials were engaged in bribery, kickbacks, extortion and money laundering to get the deal in the USA. According to a letter released on Monday, Justice Secretary Jeff Sessions instructed the prosecutors to consider, inter alia, the appointment of a special investigator and an extension of the investigation.

This post was published at Armstrong Economics on Nov 15, 2017.

The Saudi-Iran Brewing War

The turmoil in the Middle East has been instigated in part by fiscal mismanagement. When the money was rolling in with high oil prices, it was assumed, as always, that whatever trend is in motion will remain in motion. Consequently, the government expanded their spending assuming money would continue to flow in. When oil broke, the fiscal mismanagement has been exposed for all to see if they care to look.
Falling oil prices have decimated revenues and trade in the region. Security worries about terrorism, particularly in the US, have led to cuts in airline routes. Then there has also been a long-running diplomatic and trade impasse between Saudi Arabia and its allies on the one hand, and Qatar on the other. Now the good-old-days of easy money and rapid growth has led to concerns about over-capacity, waste, and corruption that nobody cared about when money flowed like oil.
We are witnessing the beginning of a Middle East War between the Suni and Shite where the latter opposes kings and the state should be ruled by religious leaders. Iran and its Lebanese ally, the militant Shia group Hezbollah, claim the Saudis detained Mr. Saad El-Din Rafik Al-Hariri is a Lebanese-Saudi politician who has been the Prime Minister of Lebanon since December 2016. They allege that Saudi Arabia forced his resignation. Rex Tillerson said he had received assurances that Mr. Hariri was free to leave anytime.

This post was published at Armstrong Economics on Nov 12, 2017.

Mueller Probes Flynn’s Role In $15 Million Plot To Kidnap Erdogan’s Arch-Nemesis

Last week, we reported that Special Counsel Robert Mueller is close to asking a grand jury to approve indictments for former National Security Adviser Mike Flynn and his son, Mike Flynn Jr., as investigators believe they have enough evidence to bring charges after speaking to multiple witnesses about Flynn’s lobbying work, including whether he laundered money or lied to federal agents about his overseas contacts. Now, we have a somewhat clearer picture of what Mueller has been digging around for in his investigation of Flynn who was fired after just 24 days on the job.
According to the Wall Street Journal, Mueller is probing a plot involving Flynn and his son to forcibly, and lucratively, remove Fethullah Gulen, who as most regular readers know is Turkish president Erdogan’s arch-nemesis, and the man who – according to Erdogan – controls Turkey’s “deep state”, and was responsible for the failed (and faked) July 2016 coup attempt against Erdogan. In more practical terms, Gulen is a 76-year-old Muslim cleric currently residing in rural Pennsylvania. And, as is also well-known, Erdogan has for years been attempting, lobbying and threatening the US in hopes of getting him extradited back to Turkey. This is where Flynn allegedly comes in: reportedly he, and his son, were part of a plan to grab Gulen and deliver him to Turkey in return for $15 millions. To wit:

This post was published at Zero Hedge on Nov 10, 2017.

Power Brokers: Saudi Crown Prince Clears a Path to the Throne

Just two weeks ago, the Future Investment Initiative summit in Riyadh took place to international acclaim. Now, investor interest has turned to intense uncertainty, as Crown Prince Mohammed bin Salman spearheads an anti-corruption crackdown, and power shifts unfold in the Gulf. But despite the short-term risks, Alex Damianou argues that the long-term impact should be positive.
The 4th of November was an historic day in Saudi Arabia. King Salman and his son, Crown Prince Mohammed bin Salman (MbS), demonstrated their continued, almost Machiavellian determination to execute social and economic reforms under Vision 2030. Their goals – to usher in a new area of transformation, consolidate power, and re-assert themselves on the regional battleground towards Iran.
A Strategic Move
The day began with the seemingly Saudi-influenced resignation of Lebanese Prime Minister Saad Hariri in Riyadh, citing Iranian influence and fears of an attempt on his own life. This was followed by a royal decree issued by King Salman, establishing the National Anti-Corruption Committee. Chaired by Crown Prince Salman, the committee has a mandate to identify offenses, persons, crimes, and entities involved in public corruption. The extensive powers of the committee include the ability to issue arrest warrants, restrict travel and freeze accounts. As the King put it in a televised address, ‘Laws will be applied firmly on everyone who touched public money and didn’t protect it or embezzled it, or abuse their power and influence’.
In another example of the autocratic liberalization we have come to see over the past year from the King and Crown Prince, the crackdown strategically targeted power players in business and government. This included 11 princes, dozens of businessmen and senior officials, and former and sitting ministers. Notable among them are:

This post was published at FinancialSense on 11/09/2017.

Another Mueller Leak Suggests Charges Loom For Michael Flynn & Son

It appears Special Counsel Robert Mueller has a serial leaker. Following last weekend’s well-timed leak of Manafort’s looming arrest – which dominated the weekend media’s speculation – NBC News reports sources familiar confirming federal investigators have gathered enough evidence to bring charges in their investigation of President Donald Trump’s former national security adviser and his son.
As a reminder, Flynn was fired in February following public revelations that he had lied to Vice President Pence about his dealings with the Russian ambassador to the U. S., Sergey Kislyak.
Michael Flynn, who was fired after just 24 days on the job, was one of the first Trump associates to come under scrutiny in the federal probe into possible collusion between Moscow and the Trump campaign.
A week after the Manafort, Gates, Papadopoulos ‘smoking guns’ hit the headlines, “multiple sources familiar with the investigation” that Mueller is set to apply pre pressure to Mike Flynn (and his son). As NBC News reports, the investigators are speaking to multiple witnesses in coming days to gain more information surrounding Flynn’s lobbying work, including whether he laundered money or lied to federal agents about his overseas contacts, according to three sources familiar with the investigation.

This post was published at Zero Hedge on Nov 5, 2017.

In Shocking Purge, Saudi King Arrests Billionaire Prince Bin Talal, Dozens Of Others In Cabinet Crackdown

In a shocking development, Saudi press Al Mayadeen reported late on Saturday that prominent billionaire, member of the royal Saudi family, and one of the biggest shareholders of Citi, News Corp. and Twitter – not to mention frequent CNBC guest – Al-Waleed bin Talal, along with ten senior princes, and some 38 ministers, has been arrested for corruption and money laundering charges on orders from the new anti-corruption committee headed by Crown Prince Mohammed bin Salman, while Royal princes’ private planes have been grounded.
Among those fired and/or arrested are the head of National Royal Guards, Miteb Bin Abdullah, the Minister of Economy and Planning, Adel Fakeih, and Admiral Abdullah bin Sultan bin Mohammed Al-Sultan, the Commander of the Saudi Naval Forces.
#BREAKING Several Princes & Saudi businessmen are arrested for #MoneyLaundering and #corruption charges in #KSA pic.twitter.com/qZ4WSkKXyT
— (@HSajwanization) November 4, 2017

This post was published at Zero Hedge on Nov 4, 2017.

Team Bernie Chimes In: “DNC Corruption Is Bigger Than One Primary”

Former interim DNC Chairwoman Donna Brazile confirmed what many widely suspected in an essay published in Politico today where she called out former DNC Chairwoman Debbie Wasserman Schultz and former Secretary of State Hillary Clinton for unfairly rigging the 2016 primary against Bernie Sanders.
In her expose, Brazile described how the Clinton campaign siphoned money from state party chapters, and asserted her control over the DNC by making it financially reliant on her fundraising abilities, even describing the campaign’s actions as ‘essentially money laundering.’
The agreement – signed by Amy Dacey, the former CEO of the DNC, and Robby Mook with a copy to Marc Elias – specified that in exchange for raising money and investing in the DNC, Hillary would control the party’s finances, strategy, and all the money raised. Her campaign had the right of refusal of who would be the party communications director, and it would make final decisions on all the other staff. The DNC also was required to consult with the campaign about all other staffing, budgeting, data, analytics, and mailings.
Brazile’s revelations have revived conversations about whether the party has an obligation to ensure a fair primary (one judge who dismissed a lawsuit against the DNC suggested the organization is actually under no obligation to do so, even confirming that it showed a ‘palpable bias’ toward Clinton).

This post was published at Zero Hedge on Nov 2, 2017.