New Rumblings In The Horn Of Africa Over Ethiopia"s Grand Renaissance Dam

Authored by Andrew Korybko via Oriental Review,

Tensions are rising between Egypt and Ethiopia over the latter’s Grand Renaissance Dam.

Cairo recently reiterated its longstanding position that it’s against Addis Ababa’s construction of this megaproject on the Blue Nile river through which it receives most of its water, believing that the dam would allow Ethiopia to control downstream Egypt’s access to this resource and thus place it in a strategically vulnerable position. The Horn of African state hit back at the latest criticism by stating that it won’t be thwarted in carrying out this nationally important development project, and it also refuted the rumors which claimed that Qatar was partially funding the dam. Egypt’s latest infowar campaign against Ethiopia’s initiative is thought to be fueled in part by Sudan’s strategic realignment towards Addis Ababa in this dispute and more broadly in a larger Silk Road context, which has totally changed the dynamics and correspondingly placed Cairo on the defensive.

This simmering situation is much bigger than its trilateral format would suggest because it’s taken on contours of the Gulf Cold War over the past couple of months. Qatar worked quickly to patch up its previously rough relationship with Ethiopia ever since the Saudi-led but Emirati-orchestrated effort to “isolate” Doha on purported anti-terrorist pretexts, while at the same time its pro-Egyptian UAE former partner doubled down on its military presence in Ethiopia’s neighboring rival of Eritrea and the self-declared statelet of “Somaliland” on the pretense of using their territories to aid in the disastrous War on Yemen. Altogether, a dangerous trend is emerging whereby the Gulf Cold War is expanding to the Horn of Africa in seeing an Emirati-aligned Egypt encouraged by its GCC partners to behave more bellicosely towards a Qatari-backed Ethiopia, with the Grand Renaissance Dam becoming a transregional symbol of proxy discord.

Egypt knows that it will forever remain dependent on Ethiopia in the event that the project is completed, which would in turn place the world’s most populous Arab state and the GCC’s top non-Gulf ally under the influence of Qatar’s allies in Addis Ababa, something which is unacceptable for both President Sisi and his monarchic sponsors so long as Doha is perceived as supporting the Muslim Brotherhood that threatens them all. Short of any formal state-to-state conflict, Egypt and the UAE could use Eritrea as a launching pad for organizing anti-government destabilization efforts against Ethiopia, something that Cairo is already suspected of doing when it comes to Addis Ababa’s concerns that they’ve been manipulating the country’s centrally positioned and most populous plurality of the Oromo to that end.

Should proxy warfare operations heat up in the Horn of Africa, then the implications could be geopolitically profound because they could endanger China’s Silk Road railway through Djibouti to the Ethiopian capital, which could in turn offset the spread of multipolarity to this strategic region. Amidst all of this, Sudan’s crucial position between the two most directly competing parties will become all the more important as a “balancing” force, but it will more than likely take China’s discrete Great Power diplomatic involvement to alleviate interstate tensions just like it decisively did between Bangladesh and Myanmar last week.

Carpetbagger Paradise - by James McShirley

The term carpetbagger originally referred to post-Civil War Northerners who

moved to the South during reconstruction for either economic gain, political

gain, or both. They frequently arrived with hastily sewn suitcases made of

carpet remnants, hence the moniker “carpetbaggers.” Carpetbagging has

subsequently also become a popular description for non-native politicians who

for expediency and opportunity establish political roots in some newfound

territory. (Think: The Bush family in Texas or Hillary Clinton in New York.)

Carpetbagging has now evolved to describe virtually any unscrupulous, or

opportunistic outsider seeking financial gain. In the context of this last

definition there has never been a time when carpetbagging has experienced such a

renaissance as it has in modern finance. It’s the golden era of carpetbagging.

You could say, in fact,

we are living in a veritable carpetbagger’s paradise.

They Should have called it “Carpetbanking”

Of course, by definition

all

bankers are in the business of carpetbagging. The very nature of owning the

pieces of paper we exchange for real goods and services means there’s a constant

source of outside profiteering, at the expense of local people in useful

society. You can’t buy, sell, lease, or conduct a single transaction without a

carpetbanker somewhere getting his cut. Maybe though in the case of bankers we

need to update the term carpetbagger to “Guccibagger.” Unscrupulous outsiders

plying their trade elsewhere has been a Fed tradition since 1913.

We’re no longer in Bedford Falls, Mr. Bailey. Mr. Potter’s heirs are alive, and

prospering all over the planet.

National Pastime

Carpetbagging has indeed become so fashionable as to be a National pastime.

Fully aided and abetted by the (not) Federal (and not) Reserve, with full

cooperation from the Federal government it has morphed to new dimensions. Things

like ZIRP, stock market bubbles, housing bubbles, and everything bubblelicious

in between are all fully sanctioned events. By “sanctioned” I mean, heavily

subsidized; ultimately by YOU, dear taxpayer. Carpetbaggers thrive on OPM and

implicit guarantees of success. Why reinvent the con when you can merely pack up

your magic carpetbag and climb on the carpetbagging hypersonic loop? All aboard!

The (Dis)information Super Highway

The carpetbagging highway is in fact a 10-lane super interstate stretching all

the way from Silicon Valley to Washington DC. Buy Tesla? Of course, that Musk

chap is working on a hyper-speed of light gismo which will transport you to Mars

in the morning and still have you back by 8 PM to watch

American Idol.

With that in mind how can TSLA stock not hit $5,000? Amazon? It’s a foregone

conclusion that the Bezos machine will eventually sell

everything

to

everybody.

He’s not only going to sell everything to everybody, he’s going to be able to

read your mind and deliver it while you are still thinking of it! Gone are the

days of even having to bother with those pesky keystrokes. Yessirree, in the

land of Amazon there will be no exertion, no jobs, and no profits, yet somehow,

it’s all going to work out. Who cares about social chaos and starvation when you

can load the boat on AMZN

now

and get rich! Living in a carpetbagger’s paradise is like watching perpetual

Brady Bunch reruns. Everything works out, and it always ends with a happy song.

Vegas Hotel, or a Tree in Southern Greece?

Gold and silver owners know full well the carpetbagging nature of derivatives,

and how they are used to suppress and manipulate the underlying product. You in

fact don’t need to know a damn thing about mining, precious metals, or even

what

gold and silver are, to profit handsomely from them. Does gold come from the

ground, or does it grow on trees in southern Greece and Italy? Isn’t a golden

nugget some hotel in Vegas where Elvis hung out? Who cares, why bother, just

know that you will make money playing the cartel game. Short gold on 1% rallies,

NFP Fridays, option expirations, and other key no-no times and you will come out

like a Northern carpetbagger in 1868 Biloxi. The name of the game is take what

they give you, and it’s obvious TPTB are fully quiescent in facilitating paper

profits derived from suppressing precious metals, and in doing so ruin an entire

industry.

Hard Times (At least for Now)

These are no doubt hard times for precious metal investors. The discouragement

is understandable, the unfairness of it all hard to swallow. The Bitcoin, Tesla,

and FAANG carpetbaggers have been partying like it’s 1999, a most recent

investing mania era, in addition to the Prince song. Carpetbaggers rarely see

the violent upper cuts that hit them out of nowhere. Like a few Northerners who

got tossed out on their ear into a muddy street in the South it wouldn’t take

much to turn this carpetbagger’s paradise into a 1-way muddy street to hell.

Tesla, Amazon, and other Uber-bubbly delights can become the latest incarnation

of 1990’s dot.com stocks, which never made money and fell back their intrinsic

values: zero, or near-zero. Pack your (non-carpet) bags, we’re traveling back to

the world of real

money;

which is always gold and silver. It’s been a long journey from 2011. The return

trip should be far more pleasant, even if it isn’t on a Mars hyper-light-speed

gismo.

James McShirley
November 30, 2017

How A Quant Hedge Fund Surpassed Renaissance And DE Shaw To Become A $50 Billion Behemoth

In a time when traditional long/short, macro and other fundamental-analysis based hedge funds are losing the war to ETFs and passive investing...

... one group of funds is thriving, and none more so than quant powerhouse Two Sigma which according to the FT, has quietly grown assets under management mark over $50 billion "putting it on a par with Renaissance Technologies as the biggest global quantitative hedge fund, as investors continue to pile into computer-powered investment strategies."

Putting Two Sigma"s staggering growth rate in context, the New York-based hedge fund, which was launched in 2001 by computer scientist David Siegel and mathematician John Overdeck, had $6bn in 2011 but soared past the $50bn mark earlier this month, according to FT sources:

"That puts it roughly level with Renaissance Technologies, which manages just over $50bn, and more than DE Shaw’s $45bn. Both are older than Two Sigma."

The reason for the unprecedented growth rate is that while the rest of the hedge fund industry has struggled with poor performance and outflows, investor demand for lower-cost, quant and algorithmic investing has exploded in recent years.  Morgan Stanley recently estimated that various quant strategies, ranging from cheap next-generation exchange traded funds to pricey sophisticated hedge fund vehicles, have grown at 15 per cent annually over the past six years, and now control about $1.5tn.

As MS reported in early October:

"$1.5 trillion of AuM currently managed under quantitative guidelines could continue its double-digit growth over the next five years. Part of this growth is a  ‘pull’ from investors broadening their search for risk premium and uncorrelated returns at lower fees than traditional alternatives. Part of this is a ‘push’, as asset managers see systematic strategies that lend themselves well to automation and scale, offering value over pure ‘beta’ in a traditional active management framework. Relatively small further reallocation by asset owners towards these strategies could still drive significant growth."

To be sure, this invasion of Math Ph.D will harldy come as a surprise to regular readers: back in 2009 we predicted that with central banks obviating fundamentals, it was only a matter of time before the mathematicians and physicists took over. Well, they have:

Quants tend to have a different background to typical hedge funds. More than half of Two Sigma’s 1,200 staff come from outside the finance industry, with most educated in mathematics and computer science. They include the winner of a Japanese backgammon tournament and the “world’s first open-source software artist”, according to a graphic novel handed to new recruits.

As programmers and data scientists have taken advantage of ever-cheaper computing power and ravenous investor appetite, a flurry of new start-ups have emerged in the quant investing field in recent years, But the biggest growth is happening at the largest, most-respected players, according to Emma Bewley, head of fund investment at Connection Capital.

“The big firms are getting bigger,” she said. “There’s a real sense that while a lot of hedge funds are building out their quantitative side, they don’t have the know-how of the established quant firms.”

There are pros and cons to this substantial reallocation to quant funds away from conventional, fundamental "active" managers: on one hand, "the rapid growth of quantitative investing has sparked a ferocious war for talent, with banks, traditional asset managers and hedge funds desperate to attract more coders." But, as the FT"s Robin Wigglesworth observes, such clustering creates a risk of all "traders" being on the same side at the same time:

The greater worry for investors and the industry is that the inflows of money into the space is ramping up risks to markets.  While strategies can vary greatly, there is concern that with more money gushing in some trades can become “crowded”, and unravel quickly if the market environment shifts.

To avert such concerns, many quant funds are careful to monitor for signs of crowding, and limit how much money a strategy or fund manages at any time.

For example, Two Sigma’s equity and macro hedge funds, which manage about $35bn, have long been closed to outside investors.

And while quants claim their strats are now less aggressive, and use less leverage and deploy more varied strategies, there is no way to know until the next downturn, a downturn which refuses to occur precisely because of quants, whose primary directive it appears is to Buy The Dip, Any Dip before the other Math PhD does, and not only ask questions later, but ideally never ask anything as more greater fools emerge to bid up risk even higher, which luckily these days also includes central banks.

"You'll Love My Dick" - Amazon Suspends Video Chief After Sexual Harrassment Allegations

Amazon has reportedly suspended Roy Price, its point man in Hollywood and the head of its ambitious video program, according to ReCode.

According to HollywoodReporter, in the wake of revelations about Harvey Weinstein’s alleged years-long sexual harassment and assault, a producer of one of Amazon Studios’ highest-profile TV shows is ready to talk about her “shocking and surreal” experience with Amazon’s programming chief.

"You will love my dick," Price allegedly said to Isa Hackett, a producer on "The Man in the High Castle," who details a July 2015 incident at Comic-Con in San Diego.

On the evening of July 10, 2015, after a long day of promoting Man in the High Castle at Comic-Con in San Diego, Hackett attended a dinner with the show"s cast and Amazon staff at the U.S. Grant Hotel. There she says she met Price for the first time. He asked her to attend an Amazon staff party later that night at the W Hotel (now the Renaissance) and she ended up in a taxi with Price and Michael Paull, then another top Amazon executive and now CEO of the digital media company BAMTech.

Once in the cab, Hackett says Price repeatedly and insistently propositioned her. “You will love my dick,” he said, according to Hackett, who relayed her account to multiple individuals in the hours after the alleged episode. (The Hollywood Reporter has confirmed Hackett told at least two people about the alleged incident in the immediate aftermath.) Hackett says she made clear to Price she was not interested and told him that she is a lesbian with a wife and children.

Hackett says Price did not relent in the cab or once they arrived at the Amazon party. As she talked with other executives, she says that Price stepped close to her and loudly said, “Anal sex!” in her ear.

Hackett says she reported the incident to Amazon executives immediately. An outside investigator, Christine Farrell of Public Interest Investigations Inc., was brought in and spoke to Hackett and executives at Amazon. Hackett says she was never told the outcome of that inquiry, but notes that she hasn’t seen Price at any events involving her shows.

"We take seriously any questions about the conduct of our employees,” an Amazon spokesperson tells THR in a statement.

“We expect people to set high standards for themselves; we encourage people to raise any concerns and we make it a priority to investigate and address them. Accordingly, we looked closely at this specific concern and addressed it directly with those involved."

But, now, as ReCode reports, Price is gone with his suspension effective immediately, according to an internal Amazon memo.

“Roy Price is on leave of absence effective immediately,” an Amazon spokesperson told Variety Thursday.

“We are reviewing our options for our projects we have with the Weinstein Company.”

Albert Cheng, a former ABC executive who joined Amazon’s video group two years ago, will be the interim head of the unit.

Ironically, last week the Wall Street Journal published a critical account of Price’s track record in Hollywood, noting that the company had spent billions on programming but with a handful of exceptions, hadn’t won plaudits or large audiences.

Massive Data Breach At Equifax: As Many As 143 Million Social Security Numbers Hacked

Credit-reporting company Equifax shocked investors, and more than a third of America, when it announced on Thursday afternoon that hackers had breached its data systems, compromising the personal information of approximately 143 million U.S. consumers. The information accessed "primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers." In other words, pretty much everything that should have been hidden behind an n-number of firewalls, is now available to the dark net"s highest bidder. 

The company, which in delightful irony offers credit-monitoring and identity-theft protection products to "guard consumers’ personal information", said that it had learned of the incident on July 29, 2017, at which point it reported the intrusion to law enforcement and contracted a cybersecurity firm to conduct a forensic review: based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017. Oddly enough, it took shareholders and over a third of America, more than a month longer to learn that all their personal data may have been compromised.

As if 143 million leaked social security numbers wasn"t enough, Equifax said that criminals also accessed credit card numbers for approximately 209,000 U.S. consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers. But wait, there"s more: the company also identified unauthorized access to limited personal information for certain UK and Canadian residents.

The good news, is that according to Equifax, "this issue has been contained." The bad news is that, well, as many as 143 million social security numbers have been hacked. So no, it"s not contained.

“This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do,” Equifax Chief Executive Richard Smith said in prepared remarks. “I apologize to consumers and our business customers for the concern and frustration this causes.”

In a Q&A posted on the company"s website, the management team revealed what"s really important with the following question and answer:

Does this cybersecurity incident impact your capital allocation priorities going forward?

Our capital allocation priorities are unchanged at this time. As we have previously indicated, our investment
priorities in order of importance are: (1) internal investment; (2) dividends; (3) acquisition; and (4) share
repurchase. We do, however, expect to increase our capital spending in an effort to further accelerate IT
infrastructure, systems and data security and resiliency improvement actions.

Oh, good, because a hack involving 143 million SSNs is one of those cases where capex probably should have taken precedence over stock buybacks.  Don"t worry though, because as it explains in the same quesionnaire, "Equifax remains committed to delivering on the long term financial model of 7-10% revenue growth and 11%- 14% growth in Adjusted EPS on average over a business cycle. Equifax’s long term financial model reflects our continuing fundamental ability to utilize our unique and differentiated data assets and leading analytical capability to deliver high value products and services to our customers."

Uhm, after this... what customers?

After falling as much as 12% in the after hours, EFX stock stabilized... then fell as much as 19%.

And now the best news: with Putin clearly behind this hack - as "all 17 intelligence agencies", WaPo and NYT will shortly "confirm" - the US economy is about to undergo a renaissance as hundreds of millions of (unsolicited) purchases prompt a golden age for US retailers while sending Amazon market cap into the $1 trillions...  even if the shipping address for said purchases happen to be small, frigid villages deep in the Russian taiga.

Full statement from Equifax here.

Update:

In appears there was a reason why EFX decided to hold on to the hacking news a little longer than seems reasonable. As Bloomberg reports, "three Equifax Inc. senior executives sold shares worth almost $1.8 million in the days after the company discovered a security breach that may have compromised information on about 143 million U.S. consumers."

The credit-reporting service said late Thursday in a statement that it discovered the intrusion on July 29. Regulatory filings show that three days later, Chief Financial Officer John Gamble sold shares worth $946,374 and Joseph Loughran, president of U.S. information solutions, exercised options to dispose of stock worth $584,099. Rodolfo Ploder, president of workforce solutions, sold $250,458 of stock on Aug. 2. None of the filings lists the transactions as being part of 10b5-1 pre-scheduled trading plans.

Surely, it was all purely a coincidence, even though had they waited until today, their proceeds would be well over 10% lower...

'Supervolcano' Alert - Not Just In Yellowstone

Authored by Robert Gore via Straight Line Logic blog,

Thar she blows!

Once every 600,000 years or so Yellowstone’s supervolcano erupts, making Mt. St. Helens, Pinatubo, and Krakatoa look like firecrackers. It blankets thousands of miles around it in lava and ash, casting a pall over the earth that lowers temperatures and hinders plant life for decades. Compared to Mother Nature we anthropogenic climate changers (if we are that) are pikers. Interestingly enough, that supervolcano is due for another eruption.

Interestingly enough, so too is another supervolcano, one constructed entirely by humans. As to which erupts first, bet on the latter.

Newton’s Third Law: For every action, there is an equal and opposite reaction. Coercion and violence generate a reaction, a countervailing pressure. They are historical constants, so like Yellowstone’s volcano, the pressure has been building for centuries, although not 6,000 of them. Like Yellowstone’s geysers, pressure-reducing steam has occasionally been released; coercion has abated and freedom briefly flowered. We know those periods as the times when progress mostly happened: the Renaissance, the Enlightenment, the Industrial Revolution. However, the twentieth century marked a resurgence of pressure.

Their intellectual degradation complete, the coercive class meets any manifestation of countervailing pressure with still more coercion. The most pathetic case is the US government. Left at a zenith of power at the end of World War II, it has squandered its moral, military, and financial capital trying to squelch the forces that will inevitably topple its empire. After each disaster, it has sought new disasters. President Trump’s tripling down on Bush’s and Obama’s Afghanistan bets is yet another instance of the belief that force which fails can be “fixed” with more force.

The reactive opposites are decentralization and individual autonomy. Individuals now have unprecedented capacities to wage violence, communicate, and compute. Since World War II governments are batting virtually zero trying to suppress insurgencies waged by guerrillas fighting on their home turf.

Try as they might to suppress the Internet, they can’t go too far without severing their economies from the backbone of the information economy. Individuals perform computing feats on their smart phones that were beyond the capabilities of room-size computers fifty years ago. These are the forces pushing back against governmental centralization and coercion.

Lately, not a day has gone by where an article hasn’t appeared arguing that the US government or the media or the globalists or some other nefarious entity is pulling the strings of some nefarious “divide and conquer” strategy. “Divide” needs no help from anyone. Unless humans develop the ability to split themselves, division has proceeded as far as it can go. A solitary soul can work, shop, eat, drink, find amusement and information, and do everything else necessary to sustain life without ever leaving his dwelling or coming into contact with another human being. Undoubtedly some do.

Dividing is a done deal. Conquering is more problematic and in fact won’t happen. A government that’s sixteen years on in Afghanistan and hasn’t won a significant military engagement since World War II is going to have a bit of a problem either maintaining its faltering empire or subjugating its own well-armed population, half of which doesn’t like it very much, the other half expecting a perpetual payday. What if its creditors pull the charge card from the Empire of Debt?

The same problems—imperial inefficiency and debt far in excess of the underlying economy’s ability to support it—will unexpectedly walk in on the globalists’ masturbatory fantasies. Governments at all levels have collectively plighted their troth to a spurious order maintained by force and fraud, resting on a supervolcano. The seismic portents have registered for decades. The Thousand Year Reich lasted twelve years, the Soviet Union sixty-nine. The Chinese government extended its life by rearranging its battery of forces, but the potential—so far successfully suppressed—counter-reaction leaves the rulers in a perpetual state of repressive anxiety.

The western welfare states are beset by bankruptcy, unsustainable expectations, faltering economies, Brexit, Trump, separatist and secessionist movements, and pitched battles over campus speakers, statues, and whatever else triggers the triggered. These are akin to Yellowstone’s recent seismic swarms, and they’ll only get more numerous and intense.

The list of irritations and grievances that can morph into confrontation and chaos is endless. It dawns on the debt-slave young that they are supporting their elders in a style to which they will never become accustomed. The productive tire of funding the unproductive and their government-sponsored rackets. Natives wonder why they should open their arms to migrants, especially those who hate them. Americans rebel against their government’s costly military interventions (okay, that one’s remote). Europe finds the Islamic chokehold increasingly choking and European manhood rediscovers its testicles (even more remote). It would be fitting if the first big morph came at some place like Davos or Jackson Hole.

The think-tank terms for today’s tremors are “devolution” and “decentralization,” always characterized as threats. Supervolcanos take no prisoners. When this one erupts, it will obliterate the rickety superstructures of global governance, finance, and economic. The proper phraseology will be, “blown to smithereens”: the just and unjust, prepared and unprepared, wise and foolish buried under lava flows and choked by ashes, reality beyond a hand in front of one’s face impossible to make out amidst the smoke and haze. The beloved order of the ruling class giving way to entropic atomization.

Atoms are life’s building blocks. Most everything worthwhile—family, community, trade, inquiry, innovation, production, progress—starts with individuals and builds. Most everything deleterious—repression, state-sponsored rapacity, tyranny, war—is imposed from the top by sociopaths masquerading as leaders. Bad as the supervolcano will be, it will blow this “top” to bits, giving the green shoots of decentralized freedom a chance to poke here and there through the ash. It’s about time.

Ending the Golden Age of Nothingness

Sir Isaac Newton once famously said, "If I have seen further, it is by standing on the shoulders of giants."

Well, Ike knew a thing or two; for it is indubitable that he would never have had the necessary foundation of knowledge to whip up the law of universal gravitation without the works of Euclid or Copernicus before him. If not for Bach - and his father"s strict hand - perhaps Beethoven would have been a bricklayer. Without Langton and Magna Carta, the Founding Fathers never write the Constitution.

Those giants of Western Civilization were once of a sort that served mankind with wisdom, guiding their antecedents to look towards a future of beauty, freedom, and existential meaning. One Golden Age developed after another as great men were inspired to outdo the other or even to reach for the heavens in art, architecture, music, and literature.

Lately, though, it seems we"ve decided to perch instead on postmodern beings who, while great in technological stature, are cultural ogres. 

When we peer through the looking glass today, all we see, both immediately surrounding and far afield, is a desolation of ugliness and mediocrity:

• Soulless architecture that betokens our standing as utilitarian drones.


• Popular music sung (or mumbled, rather) in the gutter-mouthed patois of degenerate gang members.


• Pointless films - often written by committee and informed by focus groups - that wallow for two banal hours in quick-cut action scenes without dramatic tension; one-dimensional characters as performed by two-dimensional celebrities in third-rate productions.


• An educational system that replaces the canon of Dante, Donne, and Mallory with The Red Wheelbarrow.

Modern art affirms nothing except for mindless consumerism and appealing to our basest instincts. For all our advanced tools and broad access to them, mankind should be practically minting new artistic genius. Yet nothing today can top the achievements of those of ages gone by.

So why then does Nature no longer, to paraphrase Forster, "throw out a god" to stand out as divine amongst the "thin-hammed mediocrities", than when there were billions fewer in the world?

Because when it comes to art, profit motive suborns beauty and invites the average.

This wasteland came about when the best and most talented minds - those who could have been the next Shakespeare or Michelangelo - departed the land of the arts in favor of a life serving as cogs in a corrupted, increasingly statist machine that separates individuality and spits out utility.

When potentially great creators go where the money is, the fields of cultural endeavor are left to be tended by fools.

Soon after the best and brightest left for semi-lucrative STEM careers, the lands became fallow and our current Cultural Dark Age is the result; this abandonment has left the arts securely in the hands of green-haired Gender Studies majors and Nietzsche"s Last Man in skinny jeans.

Each passing generation then subsists off this degraded fare which nourishes neither the intellect nor the soul. Eventually, there will be no one left who can remember tasting anything better and thus the negative feedback loop is in full motion.

It will only worsen until conservatives realize that those who pump the imagery of art into the minds of the young wield infinitely more power than any engineer or writer of computer code could ever dream. That is why the left won the propaganda wars of the past few generations so completely. The cycle only breaks when the political right starts grooming their children to Make Culture Great Again.

One is constantly reading well-meaning advice in the columns and comments sections of alternative media stressing that parents should continue to nudge their children towards the hard sciences, because that"s the sector where they can procure the best livelihoods.

This is sound on the surface, especially for young adults whose gifts are geared for such work. But if you do push them towards those disciplines, make sure they are on the path to self-employment or starting their own companies. Because even in the STEM fields, conservatives hold little power.

Those kids will eventually be forced to toil for the leftists of Silicon Valley who grew up immersed in, and proudly adhere to, subversive culture.  Or the budding scientist must supplicate to those in Washington who dispense the science grants. Kiss advancement goodbye if you hold the wrong opinions.

They"ll be employed by a corsortium of elitists whose ultimate goals are not only antithetical to tradition and morality, but will hasten its extinction.

These are the oligarchs whose philosophical ends are to bring about the Singularity, to silence dissent, or level humanity under one-world governance where cultural greatness, or even humble simplicity, will be made impossible. Better that your kid become a blue-collar laborer or even a NEET with a free mind than to be servants to a wicked system.

But for those of you with children of a creative bent, consider home-schooling them (or enrolling them in carefully-selected private schools) so you can bypass an educational system that is actively airbrushing Western Man"s achievements out of the history books; a system that has perverted the traditional liberal arts beyond recognition and almost out of remembrance.

Once a sufficient number are again steeped in what is the best of mankind, they will be back on the shoulders of proper giants.

They will then write the great novels, paint the sublime portraits, and direct the spiritually fortifying films that can make the fields of culture fertile once more. In so doing, the mediocrities will be banished to their romper rooms where they can frame each other"s finger paintings in deserved obscurity.

By reclaiming education and the arts from the left, we can end our current Golden Age of Nothingness and maybe even repair capitalism in the process.

A new Renaissance - moored to beauty, truth, and ethics - will ennoble the Man of the West, restoring him back to a balanced, fuller humanity. It will be as a torch to burn off the fraud and moral hazard that has attached itself like a leech to our increasingly globalist going concerns. Where virtue exists in abundance, such shady and mercenary practices are reviled.

Economic patriotism and handshake deals will be back in vogue. Instead of capitalism making utility of man, man will make utility of capitalism as originally conceived.

Lord Feverstone of Dystopia USA

Doug Casey On The End Of The Nation-State

Authored by Doug Casey via InternationalMan.com,

There have been a fair number of references to the subject of “phyles” in Casey Research publications over the years. This essay will discuss the topic in detail. Especially how phyles are likely to replace the nation-state, one of mankind’s worst inventions.

Now might be a good time to discuss the subject. We’ll have an almost unremitting stream of bad news, on multiple fronts, for years to come. So it might be good to keep a hopeful prospect in mind.

Let’s start by looking at where we’ve been. I trust you’ll excuse my skating over all of human political history in a few paragraphs, but my object is to provide a framework for where we’re going, rather than an anthropological monograph.

Mankind has, so far, gone through three main stages of political organization since Day One, say 200,000 years ago, when anatomically modern men started appearing. We can call them Tribes, Kingdoms, and Nation-States.

Karl Marx had a lot of things wrong, especially his moral philosophy. But one of the acute observations he made was that the means of production are perhaps the most important determinant of how a society is structured. Based on that, so far in history, only two really important things have happened: the Agricultural Revolution and the Industrial Revolution. Everything else is just a footnote.

Let’s see how these things relate.

The Agricultural Revolution and the End of Tribes

In prehistoric times, the largest political/economic group was the tribe. In that man is a social creature, it was natural enough to be loyal to the tribe. It made sense. Almost everyone in the tribe was genetically related, and the group was essential for mutual survival in the wilderness. That made them the totality of people that counted in a person’s life—except for “others” from alien tribes, who were in competition for scarce resources and might want to kill you for good measure.

Tribes tend to be natural meritocracies, with the smartest and the strongest assuming leadership. But they’re also natural democracies, small enough that everyone can have a say on important issues. Tribes are small enough that everybody knows everyone else, and knows what their weak and strong points are. Everyone falls into a niche of marginal advantage, doing what they do best, simply because that’s necessary to survive. Bad actors are ostracized or fail to wake up, in a pool of their own blood, some morning. Tribes are socially constraining but, considering the many faults of human nature, a natural and useful form of organization in a society with primitive technology.

As people built their pool of capital and technology over many generations, however, populations grew. At the end of the last Ice Age, around 12,000 years ago, all over the world, there was a population explosion. People started living in towns and relying on agriculture as opposed to hunting and gathering. Large groups of people living together formed hierarchies, with a king of some description on top of the heap.

Those who adapted to the new agricultural technology and the new political structure accumulated the excess resources necessary for waging extended warfare against tribes still living at a subsistence level. The more evolved societies had the numbers and the weapons to completely triumph over the laggards. If you wanted to stay tribal, you’d better live in the middle of nowhere, someplace devoid of the resources others might want. Otherwise it was a sure thing that a nearby kingdom would enslave you and steal your property.

The Industrial Revolution and the End of Kingdoms

From around 12,000 B.C. to roughly the mid-1600s, the world’s cultures were organized under strong men, ranging from petty lords to kings, pharaohs, or emperors.

It’s odd, to me at least, how much the human animal seems to like the idea of monarchy. It’s mythologized, especially in a medieval context, as a system with noble kings, fair princesses, and brave knights riding out of castles on a hill to right injustices. As my friend Rick Maybury likes to point out, quite accurately, the reality differs quite a bit from the myth. The king is rarely more than a successful thug, a Tony Soprano at best, or perhaps a little Stalin. The princess was an unbathed hag in a chastity belt, the knight a hired killer, and the shining castle on the hill the headquarters of a concentration camp, with plenty of dungeons for the politically incorrect.

With kingdoms, loyalties weren’t so much to the “country”—a nebulous and arbitrary concept—but to the ruler. You were the subject of a king, first and foremost. Your linguistic, ethnic, religious, and other affiliations were secondary. It’s strange how, when people think of the kingdom period of history, they think only in terms of what the ruling classes did and had. Even though, if you were born then, the chances were 98% you’d be a simple peasant who owned nothing, knew nothing beyond what his betters told him, and sent most of his surplus production to his rulers. But, again, the gradual accumulation of capital and knowledge made the next step possible: the Industrial Revolution.

The Industrial Revolution and the End of the Nation-State

As the means of production changed, with the substitution of machines for muscle, the amount of wealth took a huge leap forward. The average man still might not have had much, but the possibility to do something other than beat the earth with a stick for his whole life opened up, largely as a result of the Renaissance.

Then the game changed totally with the American and French Revolutions. People no longer felt they were owned by some ruler; instead they now gave their loyalty to a new institution, the nation-state. Some innate atavism, probably dating back to before humans branched from the chimpanzees about 3 million years ago, seems to dictate the Naked Ape to give his loyalty to something bigger than himself. Which has delivered us to today’s prevailing norm, the nation-state, a group of people who tend to share language, religion, and ethnicity. The idea of the nation-state is especially effective when it’s organized as a “democracy,” where the average person is given the illusion he has some measure of control over where the leviathan is headed.

On the plus side, by the end of the 18th century, the Industrial Revolution had provided the common man with the personal freedom, as well as the capital and technology, to improve things at a rapidly accelerating pace.

What caused the sea change?

I’ll speculate it was largely due to an intellectual factor, the invention of the printing press; and a physical factor, the widespread use of gunpowder. The printing press destroyed the monopoly the elites had on knowledge; the average man could now see that they were no smarter or “better” than he was. If he was going to fight them (conflict is, after all, what politics is all about), it didn’t have to be just because he was told to, but because he was motivated by an idea. And now, with gunpowder, he was on an equal footing with the ruler’s knights and professional soldiers.

Right now I believe we’re at the cusp of another change, at least as important as the ones that took place around 12,000 years ago and several hundred years ago. Even though things are starting to look truly grim for the individual, with collapsing economic structures and increasingly virulent governments, I suspect help is on the way from historical evolution. Just as the agricultural revolution put an end to tribalism and the industrial revolution killed the kingdom, I think we’re heading for another multipronged revolution that’s going to make the nation-state an anachronism. It won’t happen next month, or next year. But I’ll bet the pattern will start becoming clear within the lifetime of many now reading this.

What pattern am I talking about? Once again, a reference to the evil genius Karl Marx, with his concept of the “withering away of the State.” By the end of this century, I suspect the US and most other nation-states will have, for all practical purposes, ceased to exist.

The Problem with the State—And Your Nation-State

Of course, while I suspect that many of you are sympathetic to that sentiment, you also think the concept is too far out, and that I’m guilty of wishful thinking. People believe the state is necessary and—generally—good. They never even question whether the institution is permanent.

My view is that the institution of the state itself is a bad thing. It’s not a question of getting the right people into the government; the institution itself is hopelessly flawed and necessarily corrupts the people that compose it, as well as the people it rules. This statement invariably shocks people, who believe that government is both a necessary and permanent part of the cosmic firmament.

The problem is that government is based on coercion, and it is, at a minimum, suboptimal to base a social structure on institutionalized coercion. Let me urge you to read the Tannehills’ superb The Market for Liberty, which is available for free, download here.

One of the huge changes brought by the printing press and advanced exponentially by the Internet is that people are able to readily pursue different interests and points of view. As a result, they have less and less in common: living within the same political borders is no longer enough to make them countrymen. That’s a big change from pre-agricultural times when members of the same tribe had quite a bit—almost everything—in common. But this has been increasingly diluted in the times of the kingdom and the nation-state. If you’re honest, you may find you have very little in common with most of your countrymen besides superficialities and trivialities.

Ponder that point for a minute. What do you have in common with your fellow countrymen? A mode of living, (perhaps) a common language, possibly some shared experiences and myths, and a common ruler. But very little of any real meaning or importance. To start with, they’re more likely to be an active danger to you than the citizens of a presumed “enemy” country, say, like Iran. If you earn a good living, certainly if you own a business and have assets, your fellow Americans are the ones who actually present the clear and present danger. The average American (about 50% of them now) pays no income tax. Even if he’s not actually a direct or indirect employee of the government, he’s a net recipient of its largesse, which is to say your wealth, through Social Security and other welfare programs.

Over the years, I’ve found I have much more in common with people of my own social or economic station or occupation in France, Argentina, or Hong Kong, than with an American union worker in Detroit or a resident of the LA barrios. I suspect many of you would agree with that observation. What’s actually important in relationships is shared values, principles, interests, and philosophy. Geographical proximity, and a common nationality, is meaningless—no more than an accident of birth. I have much more loyalty to a friend in the Congo—although we’re different colors, have different cultures, different native languages, and different life experiences—than I do to the Americans who live down the highway in the trailer park. I see the world the same way my Congolese friend does; he’s an asset to my life. I’m necessarily at odds with many of “my fellow Americans”; they’re an active and growing liability.

Some might read this and find a disturbing lack of loyalty to the state. It sounds seditious. Professional jingoists like Rush Limbaugh, Sean Hannity, Bill O’Reilly, or almost anyone around the Washington Beltway go white with rage when they hear talk like this. The fact is that loyalty to a state, just because you happen to have been born in its bailiwick, is simply stupid.

As far as I can tell, there are only two federal crimes specified in the US Constitution: counterfeiting and treason. That’s a far cry from today’s world, where almost every real and imagined crime has been federalized, underscoring that the whole document is a meaningless dead letter, little more than a historical artifact. Even so, that also confirms that the Constitution was quite imperfect, even in its original form. Counterfeiting is simple fraud. Why should it be singled out especially as a crime? (Okay, that opens up a whole new can of worms… but not one I’ll go into here.) Treason is usually defined as an attempt to overthrow a government or withdraw loyalty from a sovereign. A rather odd proviso to have when the framers of the Constitution had done just that only a few years before, one would think.

The way I see it, Thomas Paine had it right when he said: “My country is wherever liberty lives.”

But where does liberty live today? Actually, it no longer has a home. It’s become a true refugee since America, which was an excellent idea that grew roots in a country of that name, degenerated into the United States. Which is just another unfortunate nation-state. And it’s on the slippery slope.

Household Spending Growth Expectations Crash To Cycle Lows

Despite record high stock prices, soaring consumer sentiment measures, and the constant Fed-spun narrative that incomes will rise amid "full-employment", the latest survey of Americans by The New York Fed signals hope is collapsing for a spending renaissance...

Median household spending growth expectations tumbled from 3.29% in March to 2.58% in April, lowest level in data going back to June 2013..

Still, as long as NFLX, AAPL, AMZN, and GOOG are rallying, this is nothing to worry about, right?

Robert Mercer, Co-CEO Of Renaissance, Sued By Former Employee Alleging Retaliation Over Trump

Back in February we reported of a striking development taking place at Renaissance, arguably the world"s most successful (and according to many, politically connected and powerful) hedge fund, where one of its key employees, David Magerman, "mutinied" against co-CEO Robert Mercer, the man who together with his daughter Rebekah have been instrumental in getting Trump elected, accusing him of engaging in actions that would harm the future of America.

Following Trump"s election Magerman - a research scientist who worked at the hedge fund for two decades and a registered Democrat who calls himself a centrist, and who had complained to colleagues about Mercer’s role as a prominent booster of Donald Trump’s presidential campaign - started to become more vocal at the office about his disdain for Mercer’s activities, which resulted in this awkward phone call with his boss, as reported by The Wall Street Journal

Magerman says he was in his home office in suburban Philadelphia earlier this month when the phone rang. His boss, hedge-fund billionaire Robert Mercer, was on the line.“I hear you’re going around saying I’m a white supremacist,” Mr. Mercer said. “That’s ridiculous.”

“Those weren’t my exact words,” Mr. Magerman said he told Mr. Mercer, stammering and then explaining his concerns about Mr. Trump’s policy positions, rhetoric and cabinet choices.

“If what you’re doing is harming the country then you have to stop.”

Following this rather "uncomfortable" phone call with his billionaire boss, as well as the real possibility of getting fired, one would think the democrat would have prudently decided to keep his mouth shut. But Magerman did no such thing. In fact, he ramped up his efforts to show Mercer that he’s not going to stand by and let the politics of Breitbart News ruin the country. There were more phone calls:

Magerman says he first spoke with Mr. Mercer in January, when Mr. Magerman, who donates to local schools, called Mr. Mercer to ask for the opportunity to reach out to Rebekah Mercer to offer the administration help on education policy. During the call, they talked politics, disagreeing about some of the administration’s early steps. After airing his concerns with others at the company, Mr. Magerman received the second call from Mr. Mercer two weeks ago.

The conversation grew strained. After telling Mr. Mercer to stop harming the country, he said Mr. Mercer responded that his goal had been to defeat Mrs. Clinton and that he wouldn’t remain very involved in politics.

“How can you say you’re not involved?” Mr. Magerman said, citing an outside group Rebekah Mercer was involved in that was aimed at boosting Mr. Trump’s agenda.

From that point on, relations between the two Renaissance workers devolved further, and eventually Magerman was suspended without pay in mid-February and could "no longer have contact with the company." That"s when the first WSJ story about the conflict inside Renaissance emerged once Magerman decided to go public. As a reminder, Mercer had emerged as one of the most influential Republican donors in the 2016 election, giving at least $2 million to Make America Number 1, a political action committee that began backing Trump in July. His daughter, Rebekah Mercer, was named to Trump’s transition team in November.

Fast forward to today, when as Bloomberg reports Robert Mercer was sued by Magerman, claiming he was fired for calling Mercer a racist and criticizing his support of Trump. The suit by David Magerman, a research scientist who worked at the hedge fund for two decades, alleges he was wrongfully fired April 29 after his relationship with Mercer and his family became toxic. For example, Magerman alleges that Mercer’s daughter called him “pond scum” at a celebrity poker tournament.

Mercer, a major investor in Breitbart News, advised Trump to hire two of his family’s associates, Stephen Bannon and Kellyanne Conway, according to the complaint filed May 5 in federal court in Pennsylvania. Mercer’s support "tainted" the hedge fund, while internal policies that prohibit "politely" speaking out in public are "unfair and untenable," Magerman said.

Bloomberg then recounts the public details about the deteriorating relationship between Magerman and Mercer, most of which had been previously noted on this site:

The dispute started on Jan. 16 when Magerman called Mercer and asked to have a conversation about his support of Trump, according to the complaint. During the chat, Mercer said the U.S. had started going in the wrong direction “after the passage of the Civil Rights Act in the 1960s,” according to the complaint. Mercer also said that black Americans “were doing fine” in the late 1950s and are the “only racist people remaining in the U.S.,” according to the complaint.

“Magerman was stunned by these comments and pushed back,” according to the complaint. Reminded of the racial segregation that existed at the time, Mercer allegedly responded by saying those issues weren’t important.

After the phone call, Magerman complained about Mercer’s comments to Co-Chief Executive Officer Peter Brown, who "expressed disbelief" and urged the two men to speak again, according to the complaint. Magerman agreed and called Mercer back on Feb. 5. "I hear you’re going around saying I’m a white supremacist," Mercer said, according to the complaint. During the call, Mercer "scoffed" at the idea that segregation was degrading and destructive, Magerman said.

Then there was the famous celebrity poker tournament, previously reported by the WSJ where things only got worse:

On April 20, Magerman attended a celebrity poker tournament in New York City, where many Renaissance staffers were present, according to the suit. Magerman told the Wall Street Journal that he attended the event to repair his frayed relationship with the firm, according to an April 28 article. Rebekah Mercer allegedly confronted Magerman, calling him "pond scum" and saying karma "is a bitch," according to the complaint. Magerman was fired April 29, according to the suit. Magerman seeks "substantial damages," his lawyer said.

Bloomberg notes that while the employee handbook bars workers from disparaging the hedge fund or any of its workers, such policies are "illegal and unenforceable," according to the complaint. It is unclear why one would make that assumption. In any case, one day after the Wall Street Journal article was published, Magerman was suspended without pay, according to the suit.

In light of the implied allegations in the suit, namely that a core employee was terminated due to his opposition for Mercer"s support of Donald Trump, and perhaps more importantly, because it will shed a bright light on what has traditionally been one of the most secretive hedge funds in the world, expect this case to be very closely watched by both market participatants and political commentators. It is also why Renaissance may seek to settle quickly, even if in the process it open itself up to lawsuits by other potentially disgruntled democratic employees.

Full lawsuit below.

An Entrepreneur Talks Iran

By Chris at www.CapitalistExploits.at

I chatted with Mahdi Kazemzadeh who was recently introduced to me by a mutual friend.

Mahdi is the founder and managing director of Afraz Advisers, a firm providing analytical tools and data services on the Iranian oil and gas industry. Their clients are international companies navigating the Iranian oil and gas industry as well as institutional and private investment funds.

I wanted to talk with Mahdi for a number of reasons, chief among them getting a better understanding of things from the perspective of a Western educated entrepreneur working on the ground in Iran.

Why Iran?

Unless it turns into ground zero for the next mushroom cloud, you"re staring at a country with a massive middle class, great demographics, very high level of education and a very high savings rate. It"s literally the flip side of the West!

I recorded the conversation and after editing out, ahem, private for-your-eyes-only sections I"ve got the finished "product" for you to listen in on.

Highlights Mahdi and I discuss:

• Why Iran could be "yuuuge" for investors (and why the emphasis on "could be")


• A boots-on-the-ground perspective on the effect of the Trump election on Iran.


• Is Iran only an energy play or much more?


• Who"s actually aligning with Iran on the ground (and how does that reflect in various financing projects)?


• Why is Mahdi moving his business to Asia?


• And much more.

(click on the image to listen to the podcast)

Enjoy!

- Chris

"Global investors are never going to see a country of this size and sophistication open up again." — Charles Robertson, Chief Economist, Renaissance Capital

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BELIEVE

Markets are forward looking indicators. Over the past 8 years, the market kept pricing in central bank rigging, rightly so. From the BOJ to the ECB to our Fed, central banks showed a keen willingness to boost asset prices since the financial crisis in 2008 -- helping reflate equities and keep Humpty Dumpty together. What Trump is talking about is totally different -- a return to American greatness, something that resonates with just about all Americans -- because everyone loves a fairytale.

Whether he can pull it off or not is immaterial as of today. All people care about now is the future and how bright it looks. Gone are the dreary days of being beholden to Fed speeches, listening to ugly people in bad clothes discuss our future. These new plans that Trump has outlined paints a colorful picture of an American renaissance -- high paying jobs for all, affordable healthcare, strong military, strong borders -- peace.

At some point in life, you start figuring out mostly everything you knew was bullshit, smoke and mirrors, parlour tricks, a delightful game of three card monte until the end. People want to believe. Trump is a superb salesman, probably the best you"ve ever seen -- because you don"t see him coming. At times he sounds off the cuff, petulant, and unrehearsed -- drawing jeers from professional losers. That"s likely done with purpose. You don"t see him coming, a yet here he is worth $10b and President of the United States.

The market is the sum total of hope, the expectations of the masses, an endless parry betwixt by fear and greed.
Content originally generated at iBankCoin.com