Illinois In Deep Financial Trouble


Illinois Comptroller Susana Mendoza was ordered to make a “substantial” dent in a $2 billion backlog of bills owed to Medicaid providers. The courts ruled that according to the State Constitution, it cannot reduce the pension payments to state employees. What is happening in Illinois is indicative of how governments are imploding and why I am warning get out of all State and Muni-debt before it is too late. Since State and local governments cannot “print” (create) money, they are forced to borrow and raise taxes. Consequently, they have hit the ceiling in tax resistance. What is happening is people are gradually migrating because there is absolutely no hope for states like Illinois. The only way out will have to be bankruptcy and a default on all the pension promises.

A federal judge has now intervened ordering the Comptroller to now prioritize who it pays. This is turning into the clash of titans – the epic battle between medical expenses that constantly rise regardless of the business cycle and state employees demanding pensions. Caught in the middle are the average middle class American who is being exploited from both sides. The judge now ordered the state to pay up towards Medicaid to keep doctors and hospitals from cutting off care for the low-income families that rely on the program.

I have often pointed out the fate of the city of Mainz. They had their technological boom with the invention of the printing press there. The politicians couldn’t wait to spend tax money assuming the business cycle would never end. So they spend the money before the taxes were due and borrowed against future tax revenues. The debt quickly became a Ponzi scheme issuing new debt to pay off the old as we are doing today. The interest kept rising so they just raised taxes. The rich began to leave and the city was quickly left with the people who didn’t really pay taxes. The bubble burst when they could not sell the next new issue of debt to pay off the last one. The city defaulted. The Pope excommunicated the politicians. And eventually the city was simply sacked and burned to the ground.

Politicians are the scourge of human society. They are the great destroyers of civilization and the instruments of war. People champion gold standards as if this would solve anything. The common fault is not what we call money, it is always, and without exception, those who we put in charge of it.

Meanwhile, Moody’s and S&P have both downgraded the general obligation debt of the state of Illinois as of June 1, on a combination of a state government budget impasse and a seemingly unstoppable unfunded pension obligation that has now ballooned into at least a $130 billion shortfall. You better get out of the State before it is too late. Property values will decline further because of the tax burden.

Comey Proves He is Part of Gang of Four Against Trump


The most telling thing about Comey is he said he did not trust Trump and “thought” he might need notes to protect himself and the FBI when speaking to him. Yet, in the interview that was supposed to clear up Hillary Clinton’s involvement with countless scandals, including her private email server where Comey admitted she was careless with national security, according to James Comey, none of it was recorded. So why did Comey protect Hillary refusing to record anything she said thereby preventing any charges for lying to the FBI as they prosecuted Martha Stuart, and then he recorded conversations with Trump because he didn’t trust him?

Comey was part of the Gang of Four. The degree of pomp and circumstance and him calling Trump a liar is rather astonishing when absolutely EVERY proffer session with the FBI is routinely recorded so they can bring charges against you if you lie. I am shocked at the level of dishonestly that Comey has displayed and of course mainstream media refuses to expose anything negative about Comey or the Democrats. This only further proves the conspiracy brewing. The Deep State is fighting back very hard.

Comey protects Hillary and trashes Trump. Very interesting to say the least!

CNN Fires Host Reza Aslan After Vulgarities Directed Toward President Trump…


After initially stating that Reza Aslan was not an employee of CNN, the network has reversed course and decided not to continue a relationship with the toxic and vulgar host.

CNN – […] The network said Friday that it has “decided to not move forward with production” on Aslan’s “Believer” series.

Season one of “Believer” premiered in March. Season two was announced at an event for advertisers in mid-May. Aslan’s production company had already started working on the new episodes.

But the network decided to break off the production relationship after Aslan called President Trump a piece of excrement, using an expletive, last Saturday. (link)

Secretary Rex Tillerson Delivers Update on Qatar – 1:30pm Livestream….


UPDATE:  Absolutely brilliant strategic approach taken by President Trump and Secretary of State Tillerson; essentially supporting the GCC against Qatar via a mediation role that resembles Bad Cop/Good Cop.   Those closely following the deep-weeds diplomacy will note the predictability of exactly this approach.

This is not the first time this issue has surfaced.  Qatar is a financier of terrorism and extremist Islamic sentiment via their support for the Muslim Brotherhood.  In 2014 the Arab nations of the Gulf Cooperation Council (GCC), confronted Qatar and pulled their diplomats to force Qatar to expell the leadership of the Muslim Brotherhood….

Against President Trump renewed call to “drive out” the extremists and confront terrorism, the GCC is once again calling out Qatar.  President Trump is the big stick  enforcer expressing understanding for the GCC approach; Secretary Tillerson is the diplomat trying to change the behavior of Qatar with carrots.

Secretary of State Rex Tillerson will be discussing the regional partnership issues with Qatar and their Arab coalition members.  State Department LINK

RSBN Livestream LinkPBS Livestream LinkAlternate Livestream Link

Top Five Facts and Examples Showcasing Comey’s Political Motives…


After watching James Comey and crew (Brennan, Yates, Clapper, etc.) testify for more than 11 months (July ’16 through June ’17), hopefully we don’t have to see any of their faces broadcasting false narratives on TV again.  That said, here’s the top five facts that showcase how badly James Comey politicized the FBI:

Number FIVE – James Comey stated under oath, and included in his written statement, that it was his decision to speak alone, one-on-one to President-Elect Trump on January 6th in Trump Tower as Comey asked everyone else to leave the briefing.  Comey held no issues with a private  conversation with the incoming President.

However, a month later on February 14th, in the oval office, when President Trump asked everyone to leave the room for a one-on-one, James Comey testifies it was “inappropriate” for a private conversation.

Number FOUR – James Comey stated to congress on March 20th, he intentionally did not brief congressional intelligence oversight/leadership of the counterintelligence investigation, that began in July 2016, until March 2017.  He intentionally kept congress in the dark.

There was no reason to keep congress in the dark, unless Comey held a political motivation to do so such that he could operate his agenda without any oversight.

Number THREE – James Comey told President Trump he was not under investigation three different times from January 6th through May 2017.  Comey also notified the congressional oversight Gang-of-Eight in March and April that President Trump was not under investigation.  However, Comey intentionally refused to tell the public the same thing he was telling President Trump and congress.

However, worse yet, James Comey was telling President Trump there was no factual or substantive foundation behind the ‘Russian Pee Dossier’; yet simultaneously Comey was using the ‘Russian Pee Dossier‘ as evidence to gain FISA warrants against Trump Administration officials.

Number TWO – James Comey admitted to congress than he personally leaked information to a friend with instructions to deliver to the media (New York Times), despite his own prior assertions to congress and to the American electorate, that leaks to the media by officials was toxic and damaging to the integrity of the FBI.

There were several avenues available to Comey to deliver the content of his memos to congress including directly delivering them to oversight; or holding a press conference.  There was no reason to manufacture media leaks, to accomplish a political goal, unless James Comey held a political motivation to do so.

Number ONE – James Comey justified in his statements that on February 14th he did not inform his recently confirmed boss Attorney General Jeff Sessions, of the content of the oval office meeting with President Trump – or his suddenly overwhelming feelings of impropriety, because he anticipated Jeff Sessions would be forced to recuse himself from anything to do with the Russian investigation..

There was nothing known on February 14th which would establish a need for Sessions recusal. There’s no reasonable basis for such an assumption on February 14th, unless it was Comey’s intention to leak FISA-granted surveillance of Russian Ambassador Kislyak, having an innocuous meeting with Senator Jeff Sessions, to the Washington Post.  A disingenuous, albeit politically framed, leak did factually surface on March 1st.

Advertisements

ECB In Serious Trouble


The European Central Bank (ECB) left its stimulus programs and record low interest rates unchanged. Pundit was seeing some cyclical signs of what they hoped was a spreading recovery in the 19 countries that use the euro currency rather than just a bounce in anticipation of tourist season. The ECB dropped any wording that it could lower interest rates further, which is a claimed sign of greater confidence in the economy, but in reality, is more of a reflection of it being trapped in desperate nightmarish measures.

The proposal to do a Euro Bond in the form of an Asset Backed Security (ABS) as they did with the mortgages that blew up in 2007, is a reflection of trying (1) to bailout the ECB, (2) provide funding for governments when the ECB stops buying since it owns 40% of Eurozone sovereign debt, and (3) a compromise with Germany who is against surrendering the power to issue debt to Brussels. The policies of Merkel have been to maintain the single currency at all costs, but there will be no single debt.  This is very much a policy of being just a little-bit pregnant.

The central bank’s announcement kept important wording that its bond-buying stimulus program could be stepped up if the economic outlook worsens. This is not very likely, it is simply a statement of denial that the ECB is trapped and in trouble. The entire policy has utterly FAILED to stimulate the economy and has only kept governments on life-support. When the plug is pulled, will their heart stop? That all depends upon finding buyers of government debt to (1) take up the slack that the ECB was buying 40% of all debt and a greater proportion of new debt. Remove the biggest bidder, and you end up with a NO BID crisis

British Election Backfires on May – Exit Polls Show Hung Parliament


It’s looking like a Hung Parliament and the polls got it wrong again in Britain. The Conservatives appear to be 12 seats short of the 326 to rule with a majority vote. Theresa May is facing a serious backlash over her shocking election campaign gamble after an exit poll suggested that her snap election roll of the dice has completely failed to pay off. Where before the BREXIT vote was purely conservative, Corbyn had to brace that but then he turned to the youth and gold massive turnout in some areas 75%. London itself is filled with a lot of students. Corbyn appealed to them promising healthcare and tuition promises and thus was tapping into a reservoir of people who would not normally vote.

This election illustrated the entire problem we have been warning about. We are facing a generational battled. Ironically, the youth do not quite realize that voting labour was a vote for the very neo-Marxist policies that have created the crisis we have in pensions going forward. It has been this type of promising manna from heaven with promises to make the rich pay for it is exactly the same policies of Hollande in France, which proved so disastrous. Yet the old saying; Ah to be young again, but know what I know now comes to mind. What the youth have done looks very well like fulfilling what our computer has been projecting – the fall of the British pound long-term.

The problem with this Corbyn Hung Parliament is the fact that his own party pretty much wrote Corbyn off and wanted him to resign after the last election. Since this time he made it really a personal battle, he is unlikely to back-down and will be pushing a Marxist agenda. Ah, how the wheel of fortune revolves. This Corbyn Hung Parliament now casts a huge doubt over the negotiations for BREXIT. We ran our model fearing that this could be the outcome or if Corbyn would actually win pulling off a surprise victory for Labour. It came back and said SELL Sterling! It is very curious how markets never lie and they show you the trend if you listen to them rather that try to fit their movement to a predetermined outcome. While our computer did show the Conservatives would win, something was wrong since the outlook for the pound was bearish – not bullish.

Socrates Pro Version wrote in the pound concerning the Long-Term:

“Diagnostically, my wide-ranging projection recognizes that the major low in British Pound Spot took place back in 1985 completing a 52 year decline, but we have seen lower highs with each thrust upward leaving the major high intact as of 1959. We have not elected any Yearly Bullish Reversal from the major low of 1985 warning that we remain in a bearish long-term trend. Only an annual closing above 24280 would signal a change in long-term trend. There has been a post low rally after 1985 moving upward into a key high during 2007. Nonetheless, the market has undergone a reaction back to the downside for the past 9 years. This has warned that the overall trend of this market remains bearish since it has been unable to make higher highs. There remains a long-term risk of a decline extending into 2017 or as far out as 2020 in real terms adjusted for inflation. Unquestionably, there remains a risk that we could see a complete monetary reform as early as 2018 going into 2020 or the latest 2032 insofar as a change in the currency base system. This is likely to follow a Sovereign Debt Crisis which should begin to erupt by 2018.”

Our model has been showing that the major resistance stood in the 134 zone both on the Monthly and Weekly levels of our model. Just to achieve a positive signal, we required a monthly closing ABOVE 12954. Socrates has been writing: “Critical resistance still stands in this market at 12954 and a break above that level on a monthly closing basis would warn of a continued advance becomes possible.”April closed precisely one tick beneath at 12953. This was perhaps the first hint that there would be trouble ahead. May exceeded the April high intraday, but it also fell back to close at 12889. How Sterling has dropped sharply to the 127 level on the news of a Hung Parliament. How it now closes today will be the market speaking loudly so listen.

Since the computer has been warning that Sterling can fall back to the 1985 low at $1.03, it was hard to reconcile this with the polls calling for a major landslide for the Conservatives. This is Corbyn’s chance for the big time and you can expect he is going to really muddy the waters because he really believes in Marx. The distinction between Brexiteer and Remainer stands a real chance now of fading away. Battles would still rage on, however, yet the terms and methods of restoring British independence will be completely thrown into the air. Eurocrats  in Brussels now face the prospect of an entirely different negotiating team in the event of a cobbled together coalition, which would also need time to thrash out its own Brexit strategy.

Our own interaction with British institutions and corporates has been interesting. Many who were against BREXIT and saw that as the end of the world, flipped their position and said hey – they is pretty good. After accepting BREXIT, now the terms are up in the air thanks to May misreading the discontent rising among the youth. We have also warned that revolutions come from the youth, not from the old establishment who have too much to lose rocking the boat.

Corbyn is a full blown neo-Marxist who would love to convert Britain to a modern version of Communism. Instead of guaranteed minimum wages, he wants maximum wage limits. He has been preaching the same old solution – just rob the rich, which Hillary was preaching while stuffing her own pockets. The problem is the big numbers he hears that CEOs make is stock options typically more so than salary. Nevertheless, in his mind if everyone is reduced to the same wage, somehow that will solve everything. Nobody should earn more than he thinks is appropriate. His policies would be the final straw that ends Britain as any type of financial capital whatsoever. The talent will be on the first plane to New York or Hong Kong. With Corbyn in Britain and the EU insanity on the Continent who wants to outlaw short-selling, the pound will not survive even to be a hedge against the Euro.

The real question is somehow the market is always correct and forecasts the future with extreme precision. The pound could never elect a single Weekly Bullish Reversal which all stand above 13400. Yet the first Weekly Bearish Reversal is 12772 on the cash. If that is elected tomorrow, then the markets are warning that this is going to be a very hard road for Britain. The absolute critical technical support for this week’s closing lies at 12748.

We can see from both the arrays on the pound against the dollar and euro, that the computer projected a turning point for this week. It also generally warns of higher volatility next week. So pay attention to the Weekly Bearish Reversal at 12772.

 

Bank Stocks Have a Completely New Risk


Spain’s Banco Santander is paying €1 to take over troubled rival Banco Popular, in a deal that illustrates Europe’s new system to rescue failing banks without burdening taxpayers or stressing markets. This is being cheered around the world because the shareholders lost absolutely everything. The bank which was valued in the collapse at €1.6 billion was bought for €1. Forbes wrote:

“This is an excellent example of how the resolution of troubled banks should be done. The shareholders who employed the management which caused the problem lose all their money. The depositors, who were and are not responsible for the bank’s troubles, are protected. And we don’t end up with some great smouldering hole in the financial landscape where Popular used to be, we get new capital raised instead. Further, no taxpayer has been harmed in this operation.”

 

Santander said Wednesday it will take over all the shares in Banco Popular, which had lost more than half their value since last week as concerns grew about the lender’s financial health. It will raise around €7 billion in a share issue to strengthen Banco Popular’s balance sheet. This “takeover” was conducted in an auction sanctioned by European authorities after the main banking regulator in the Eurozone, the European Central Bank, said Tuesday that it believed Popular was “failing or likely to fail.”

This was the first time the ECB had pulled the plug on a bank since it was given new powers aimed at preventing the rescue of banks from overwhelming government finances. European leaders had all agreed to move banking supervision to the EU level. Hence, the ECB took over supervisory responsibility on in November 2014. The collapse was caused by €7.9 billion in non-performing assets, including €7.2 billion in real estate. Banco Popular shares fell about 38% last week and then another 20% this week, to 0.32 euros per share before regulators halted trading in its shares. The bank had 305,152 shareholders as of the end of March.

The sale is “in the public interest as it protects all depositors of Banco Popular and ensures financial stability,” said the European agency that manages failing banks in the 19-country Eurozone, of which Spain is a member. The Spanish government had previously ruled out bailing the bank with taxpayers’ money. The Spanish Economy minister Luis de Guindos said the sale was “a good outcome” given the shortfall of the lender over the past weeks. He added that this takeover “ensures the maximum protection for depositors and the continuity of the bank’s activity.”

So now comes the €64 trillion question. If government will not bailout banks, then eradicating all value to shareholders attaches a completely new kind of risk to shareholders. If they were investors in a manufacturing company that went bust, the assets would go into bankruptcy and there would be a realistic sale of assets.  What has just taken place is that if the net asset value of the bank, its own building, property etc., were say even 20% of the share value, then the shareholder face a 100% loss in bank stocks compared to any other share investment. That leaves one poignant question? Why buy bank stocks at all?

A new risk has just been created. Instead of a bailout loan to bridge liquidity problems as was the case with the original elastic money development of the Clearing House certificates during the 19th century, we now have no government support for which elastic money was invested and bank shareholder are subject to total usurpation of their assets and denied the normal property rights attributed to a free society. The “elastic money” is now central banks trying to “stimulate” the economy solely by means of purchasing government debt.

Something is seriously wrong in the development. Shareholders rarely have full transparency in bank management to be able to make prudent and informed investment decisions. Welcome to the new crisis created by yet another solution.

Marco Rubio Questions James Comey – The Curiously Unidirectional Leaks…


Senator Marco Rubio questions fired FBI Director James Comey and discovers President Trump doesn’t know the politically correct order of operations when approaching a request to get beyond hyper-partisan politicized investigative nonsense; which led to Comey instructing Trump orbit how the chain of political command works in DC; which led to President Trump agreeing the investigation should be carried out thoroughly and entirely because he wants to get this ridiculous investigative cloud off his back so he can get back to doing the work he was elected to do; and President Trump wants anyone connected to Russia improperly to be discovered so he can get rid of them and move on.

Shocker.  O-M-G bigly scandal.  ie. ‘nothingburger’.

.

As Expected – Comey Tries Hard to Take Down Trump Admits He is Leaker


James Comey that he orchestrated the leak of his conversations with President Donald Trump claiming he thought it might lead to the appointment of a special prosecutor to head the Russia investigation. Comey said he had asked a friend at Columbia University to leak the content of one of his memos. Comey testified: “My judgment was that I needed to get that out into the public square.”

Arkansas Republican Senator Tom Cotton asked Comey whether he believed that Trump had colluded with the Russians. Comey then responded: “It is a question I don’t think I should answer in an open setting.” He said that the question would be answered by special counsel Robert Mueller’s investigation.

Comey also testified claiming that the Trump administration “chose to defame me,” and that they told “lies, plain and simple” and that he was “confused” by Trump saying he was fired due to the Russia probe. “The administration chose to defame me and, more importantly, the FBI by saying the organization was in disarray … those were lies.”

Yet, to stop short of obstruction of justice, Comey then also said that he did not believe that either Trump nor his staff had asked him to stop the Russia investigation. Comey testified that the “shifting explanations” from the White House for why Trump fired him last month “confused” and increasingly concerned him.

Comey further revealed new details about his meeting with Trump during the transition when he briefed the President-elect on details of a salacious dossier drawn up by a former British spy. Comey said he didn’t want to create a “J. Edgar Hoover type situation” in which Trump concluded the bureau was trying to hold something over him. Hoover was famous for investigating people and creating a FBI dossier to blackmail politicians and presidents included.

Since the 1970s, FBI directors have tried to maintain a discrete distance from the president because of J. Edgar Hoover’s abused of the FBI. This unwritten rule grew out of reforms that followed the often questionable behavior of J. Edgar Hoover, who served from 1935 to 1972. Hoover’s relationships with six different presidents often became dangerously close to trying to rule the country covertly. Yet Comey has opening asked for a Special Prosecutor doing much the same thing for this is how to at least prevent Trump for pushing forward any reform agenda.

FBI today has authority only for investigating violations of federal law, pursuing counter-terrorism cases and disrupting the work of foreign intelligence operatives. Anything beyond these raises serious constitutional jurisdictional questions. When John F. Kennedy became president in 1961 and his brother Robert Kennedy was made attorney general, Hoover could not ignore the attorney general as he had been doing. Hoover stopped passing on intelligence reports to JFK. He disagreed with the Kennedys and their policies, so Hoover began investigating not crimes, but people and their personal lives for blackmail. Hoover was collecting information on JFK’s extramarital affairs. Then in 1964, Hoover’s FBI investigated Jack Valenti, a special assistant and confidant of President Lyndon Johnson. Despite Valenti’s two-year marriage to Johnson’s personal secretary, the investigation focused on rumors that he was having a gay relationship with a commercial photographer friend.

This is what Comey meant about the dossier drawn up by a former British spy. He said he briefed Trump because he didn’t want to create a “J. Edgar Hoover type situation” since it was the same thing – diving into personal affairs. He said he was intent upon leaving the impression with Trump that the FBI was not investigating him despite the fact that the Democrats hire this British Spy to do what Hoover had done.

Comey  said Trump’s comments that the FBI was in disarray and that it was poorly led and had lost confidence in his leadership, were “lies, plain and simple, and I am so sorry that the FBI workforce had to hear them, and I am so sorry that the American people were told them.” But if people lost confidence in the FBI after the Hillary email investigation within the FBI, they would not have told him. What Comey failed to consider is that a lot of people did lose confidence in his investigation. His words calling them lies are just opinion solely from his perspective. There were many on Capitol Hill on both sides of the political spectrum who expressed that opinion that Comey was out of control.

Comey then did his best to disparage Trump saying from the moment he met the President-elect during the transition, he decided to create a written record of their meetings. He said: “I was honestly concerned that he might lie about the nature of our meeting.” He then said that he knew that one day he might need a written record of their conversations to defend himself and the FBI. This was a very clairvoyant moment that seems disingenuous to say the least. To defend the FBI? Reading between the lines it seems to be confirming the position of the Gang of Four, in the intelligence community of which Comey was a member, all had an anti-Trump agenda. Reuters reported on November 19th, 2016 that Carter and Clapper demanded  Obama fire Michael Rogers. Rogers didn’t want to participate in the Obama spying scheme led by Clapper. All the information warned that there was indeed a soft-coup against Trump that was organized by Obama and that Clapper was deeply involved. Comey was part of the Gang of Four. I go into this is detail in the Impeachment Report on Donald Trump.

Leaking information is a crime. Nonetheless, Comey said that he believed it was his right to publicize the details of what he viewed were unclassified recollections of his conversation with Trump in his role as a private citizen. He makes the distinction saying his leaks were AFTER he was fired. He then said he asked his friend to take the action rather than doing it himself because the press was camped outside his house and it would have been like feeding “seagulls at the beach.” He said he gave all of his memos to Mueller.

Comey said that he took the President’s expression of “hope” that he could ease off of Flynn as a directive. Previously, he testified that the DOJ will often express its “opinion” but that is not a directive. He seems to be trying to lay a vague enough foundation for a Trump Impeachment. Comey clearly wanted to help paralyze the nation and stop the Trump agenda of any reform be keeping this saga of Russian election hacking and alleged collusion by Trump aides in play to cast a very dark cloud over the new administration. He knows very well what he is doing and it’s all about stopping any reform process.

Democrats will highlight the stunning revelation of Comey’s testimony, that his statement that Trump asked him to halt the FBI probe into Flynn’s conversations during the transition with Russia’s ambassador to Washington. Trump’s words are by no means a directive: “‘I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go.”
“I replied only that ‘he is a good guy.’” Comey wrote, then added: “I did not say I would ‘let this go.’”

So now we will have attempts to impeach that are not likely to actually force Trump to leave office. The agenda here seems to be to prevent any of his promises of reform taking place. This appears to be the McCain agenda as well.