Daily Archive: January 14, 2018


Who Do Russians Consider Their Greatest Enemies?

According to a new poll from The Levada Center, 23 percent of Russians believe their country is surrounded by enemies.

While, the list of who Americans consider their enemies has been covered by Statista before, Niall McCarthy wonders what do Russians think?

Infographic: Who Russians Consider Their Greatest Enemies  | Statista

You will find more statistics at Statista

The research shows that 68 percent of people in Russia consider the United States a threat.

Considering the annexation of the Crimea and the war in Eastern Ukraine, 29 percent of respondents also said that Ukraine is an enemy.

Even though the Russian military is heavily committed to the war in Syria, only 5 and 4 percent of people respectively say Islamic extremists are a threat. That’s less than Germany, the UK and NATO which are all labelled enemies by 6 percent of Russians.

Internally, only two percent of respondents consider oligarchs and bankers enemies and one percent think Vladimir Putin is a threat.


Japanese Purchases Of US Treasurys Tumble


“I Paid To See A Movie About Singing. I Got Ninety Minutes Of Pentagon Propaganda.”

Authored by Caitlin Johnstone via Medium.com,

To cap off a long, strange day, my husband and I took the kids out last night to see Pitch Perfect 3. The first Pitch Perfect is a firm favorite in our household, the kind of movie we end up watching when we can’t agree on what to watch. We’d been waiting til we all had a night to see the latest one together, so we made a night of it and went out for some dinner, too. I even had a Coke. The sugary kind. This was a big night, people! So we were all in high spirits and I entered the theater excited to see some good music and have a good time.

I wasn’t expecting a masterpiece, but I also wasn’t expecting to be blasted in the face with ninety minutes of blatant war propaganda from the United States Department of Defense.

Documents Expose How Hollywood Promotes War On Behalf Of The Pentagon, CIA, & NSA “The documents reveal for the first time the vast scale of US government control in Hollywood, including the ability to…”


Before I go on I should mention that a group called Insurge Intelligence published a report a few months back on thousands of military and intelligence documents obtained under the Freedom of Information Act which showed unbelievably extensive involvement of US defense and intelligence agencies in the production of popular Hollywood movies and TV shows. Just from the information this group was able to gain access to, the scripts and development of over 800 films and 1,000 television titles were found to have been influenced by the Pentagon, the CIA, and the NSA to advance the interests of the US war machine. We’re talking about big, high profile titles you’ve definitely heard of, from Transformers to Meet the Parents.

So it’s an established fact that these depraved agencies of destruction and domination are balls-deep in Hollywood production. You can understand my discomfort, then, as it became evident that the movie I’d sat down to watch with my family was set on US military bases for no reason whatsoever. There was nothing about the plot of Pitch Perfect 3 that required this; any music tour of any kind would have worked just as well. The antagonist had nothing to do with the military, the protagonists were a civilian a capella singing group, and the general conflicts and resolutions of the film were entirely uninvolved with anything related to the armed forces of any nation.

Indeed, the film looks like it was initially written to have taken place in a civilian setting, then after many rewrites and the involvement of God knows what agencies managed to force itself onto US military bases. As Insurge Intelligence noted in its report, once that happens the war machine is granted what amounts to total creative control of the film’s production, up to and including the ability to cancel production altogether by withdrawing support.

Sure enough, retired Army lieutenant colonel Thomas Lesnieski, who was involved with the production of the film, says that in order to “make sure that the way the military is portrayed is done right,” changes were made to the script of Pitch Perfect 3 after the film enlisted “DoD support”.

As far as the film in question is concerned, “the way the military is portrayed” could not have been more propagandistic. The heroines were constantly drooling over the handsome, sexy servicemen, there was nonstop saluting, flag-waving and patriotic “thank you for your service” lines, the lead cast did an entire number dressed in camouflage, a lesbian character said she wanted to enlist “now that they let gay people join,” servicemen were portrayed as charming heroes and protectors of women, and life on a military base was portrayed as a fun party where you get to go to awesome concerts and have a great time. You could not possibly pack more glorification of the US war machine into a movie if you tried.

Air Force Captain Meredith Kirchoff, a public affairs officer at Dobbins Air Reserve Base where the film was shot, gushes over the movie for the way it “humanizes” (read: normalizes) the human resources used to power the American war machine while US civilians are deprived of the basic social safety nets accorded to everyone else in every other major country on earth.

The US Department of Defense was given a “special thanks to” line at the tail of the end credits.

Again: there was no discernible reason for this film to be set on military bases. At all. Anyone who gets involved in filmmaking for love of that artistic medium loathes the involvement of any outside influencer putting pressure on them to change their script and produce their movie in a certain way to advance their own agendas, but this film deliberately sought that influence out. From top to bottom, a sequel to a popular movie about an all-female singing group was built to normalize the globe-spanning war machine that is closely approaching a trillion dollar budget and recruit teenage girls into its ranks to be used for slaughter and destruction.

I love Pitch Perfect. It’s honestly one of my favorite movies ever. It’s an effortless romp of a film about the joy of delightfully unique individuals not overcoming those differences but enthusing about them in each other, enjoying them, embracing them and collaborating together to create something beautiful, inspired, healthy and new. It speaks to my heart about what we have to do as a species to create utopia and avoid self-destruction. To take that and twist it into another advertisement for the blood-thirsty, child-killing, empire building war machine was all kinds of heartbreaking to me.

When we came home and the kids were out of earshot my husband and I started angrily fuming about what manipulative, disgusting, art-killing parasites these people are, then remembered we have a podcast now so we hit record before we ran out of rage:

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Citi Reveals The Reason Behind The Market’s Meltup

It is hardly a secret, that one of the biggest threats facing risk assets in 2018 and onward, is the great central bank QE/balance sheet unwind, something we have discussed extensively in the past year, and as a recent example, in “This Is Most Worrying”: In One Year, Central Bank Liquidity Will Collapse From $2 Trillion To Zero,” in which Deutsche Bank said that “the most likely causes of a shift to ‘flight mode’ and a rise in volatility” is that by the end of [2018], the combined expansion of all the major Central Bank balance sheets will have collapsed from a 12 month growth rate of $2 trillion per annum to zero.”

This is shown in the following chart depicting the total shrinkage in central bank asset growth:

And yet, despite the Fed’s methodical, if slow balance sheet shrinkage and the ECB’s recent QE tapering from €60 to €30BN per month, followed by the BOJ’s latest “stealth tapering” last week, stocks have started off the new year with a panicked melt-up euphoria the likes of which haven’t been seen in decades as the flurry of recent “serious” headlines suggests.

The term of the week is ‘melt-up’ pic.twitter.com/6phpDc47uW

— Mark Constantine (@vexmark) January 12, 2018

How does one reconcile this historic stock surge at a time of shrinking central bank balance sheets?

The answer comes from Citigroup’s credit research team, which points out something most central bank unwind projections have missed, namely that while risk assets on central bank balance sheets may indeed be shrinking, other reserve managers are going in the other direction.

According to Citi’s analysts, the answer is that although both the Fed and ECB are scaling back their balance sheets, the increase in EM FX reserves recently, with Chinese FX reserves doing the majority of the heavy lifting, has largely offset all of this. This is highlighted in the left-hand chart below. In fact, as the right-hand chart shows, on a rolling 3 month basis FX reserve purchases by EMs have largely offset all of the implied downward risk impulse from the past year.


As a reminder, last week China reported that its foreign-exchange reserves posted an 11th straight monthly increase, capping a year of recovery amid tighter capital controls, a stronger yuan and resilient economic growth (even if as Goldman calculated much of the reserve increase has been due to valuation effects). At the end of 2017, Chinese reserves climbed by $20.7 billion in December to $3.14 trillion, bringing the full-year increase to $129 billion.


Somewhat coincidentally, the theory that China may be goosing the markets was proposed last week by a different group of Citi analysts, who proposed that “it looks like the PBoC has been adding quite a lot of liquidity in the shorter end of the curve in recent days -with a variety of interbank rates softer, and the 1y CGB yield notably lower by 21bps YTD whereas 5s and 10s yields have stayed broadly flat.”

As we said last week, “assuming that Citi is correct, it would explain many things, not least of all the stunning surge higher in Chinese, global and even US stocks.” Here is Citi’s own “conspiratorial” take:

Against that background, it is no surprise that equity markets have been so well supported and the SHPROP has exploded upward.”

In other words, just like China’s aggressive policy change after the Shanghai Accord of February 2016 unleashed a record 21 of 22 positive months for the S&P…

S&P is up 21 of the past 22 months, starting with the Shanghai Accord in Feb 2016 pic.twitter.com/LOngt5A4ba

— zerohedge (@zerohedge) December 29, 2017

… so it again appears to be China’s stealthy asset purchases across global capital markets that has resulted in the market melt-up observed in the end of 2017 and start of 2018.

Of course, in light of recent vocal warnings from China that its Treasury purchases may be discontinued soon, extrapolating China’s generous intervention in risk assets for the foreseeable future would be dangerous. Meanwhile, even as Beijing may flip and halt accumulating reserves, one thing is certain – at least for now – that central banks will keep on unwinding their balance sheets. Here’s Citi once more:

given that this aggregate central bank liquidity measure has had a significant degree of correlation with risk asset performance over the past few years, we are if anything reaffirmed in our cautious stance on 2018 as a whole. Even if EM FX reserves were to continue accumulating at close to their current rate, that would be outweighed by the almost $1 trillion reduction in DM central bank balance purchases due to occur this year.

Citi’s concludes by appropriately wrapping up the balance sheet unwind narrative in the story about the frog – stuck in boiling water – that did not realize how hot the water was until it was too late:

As the old parable goes, a frog that has the misfortune to find itself in a pot of boiling water will generally have the sense to jump straight back out. But if the water is initially tepid and subsequently brought to boil slowly, the frog won’t realise what’s happening until it’s too late.

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The announced trajectories of the major central bank balance sheets indicate that the level of aggregate net asset purchases will reach its 2018 lows in the latter part of the year. But while we may only reach boiling point then, we’re already heating up: the delta in tapering is currently very large, with the Fed increasing its pace of net selling and the ECB having halved its net purchase volumes already.

Citi’s punchline: “the frog may end up getting cooked well before boiling point.” For now, however, the market’s daily record highs make a mockery of any warning, and any references to frogs stuck in boiling water are promptly deflected with tantalizing images of massaging bubbles and “nice warm Jacuzzis.”


Abbas Calls Oslo Accords Dead and Blasts U.S.: ‘Damn Your Money!’

The Palestinian Authority leader assailed the Trump administration over its handling of the Israeli-Palestinian conflict, vowing to reject American leadership of any peace talks.

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