Daily Archive: February 9, 2018

Feb
09

Trump Blocks Democratic Counter-Memo Over “National Security Concerns”

President Trump declined to release the Democrat rebuttal to a GOP-authored “FISA memo,” following the advice of the Department of Justice and the Director of National Intelligence, the White House announced.

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President Trump is “inclined to declassify” the Democratic memo, however there are several sections which would create “especially significant concerns” for “national security and law enforcement interests,” wrote White House counsel Don McGahn in a letter to House Intelligence Committee chairman Devin Nunes (D-CA).

While the White House ignored FBI requests to redact the names in the GOP-authored memo, the Democratic response is said to reveal sources and methods which must be concealed. 

In a separate letter to FBI Director Christopher Wray and Deputy Attorney General Rod Rosenstein, McGahn highlighted the problematic information. The White House says it will work with the House Intelligence Committee if it wants to revise the Democratic memo and resubmit it for White House review. 

“The president encourages the Committee to undertake these efforts,” the letter states. “The Executive Branch stands ready to review any subsequent draft of the Feb. 5th memorandum for declassification at the earliest opportunity.”

Democrats on the House Intel Committee can now make the requested changes, or submit their memo to the full house to seek a vote to override the President’s decision. 

The House Intelligence Committee voted earlier this week to release the 10-page Democratic memo authored by ranking minority Committee member Rep. Adam Schiff (D-CA) following the declassification and public release of a four-page “FISA memo” authored by staffers for Chairman Devin Nunes.

In response to Trump blocking the Democratic rebuttal, Nunes said on Friday that he was not surprised that the DOJ and FBI advised against its release.

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Rep. Devin Nunes (R-CA)

“Ranking Member Schiff pledged to seek the input of the Department of Justice and FBI regarding the memo’s public release, and it’s no surprise that these agencies recommended against publishing the memo without redactions,” said Nunes. 

Nunes suggested that the Democrats make the “appropriate technical changes and redactions” as recommended by the justice department “so that no sources and methods are disclosed and their memo can be declassified as soon as possible.”

Democrats Cry Foul

After the GOP-authored memo was released, Democrats cried foul – calling it “inaccurate” and claiming its sole purpose was to derail and obstruct the ongoing investigations into Russian interference in the 2016 election. 

Democrats were outraged at the President’s decision. In a Friday night statement, Schiff said that Democrats had provided their memo to the F.B.I. and the Justice Department for review before it was approved for release by the committee, and that the Democrat rebuttal was drawn from the same underlying documents as the Republican one.

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Rep. Adam Schiff (D-CA)

“We will be reviewing the recommended redactions from D.O.J. and F.B.I., which these agencies shared with the White House,” Mr. Schiff said, “and look forward to conferring with the agencies to determine how we can properly inform the American people about the misleading attack on law enforcement by the G.O.P. and address any concerns over sources and methods.”

After ignoring urging of FBI & DOJ not to release misleading Nunes memo because it omits material facts, @POTUS now expresses concerns over sharing precisely those facts with public and seeks to send it back to the same Majority that produced the flawed Nunes memo to begin with: pic.twitter.com/qNVyS99eXs

— Adam Schiff (@RepAdamSchiff) February 10, 2018

Rep Terri Sewell – a Democratic member of the committee, tweeted: “Republicans and Democrats on the Intelligence Committee voted UNANIMOUSLY to release this memo. @realDonaldTrump is not interested in transparency, he is interested in protecting himself and derailing the Russia investigation.”

Republicans and Democrats on the Intelligence Committee voted UNANIMOUSLY to release this memo. @realDonaldTrump is not interested in transparency, he is interested in protecting himself and derailing the Russia investigation. https://t.co/dz7uSP7Igw

— Rep. Terri A. Sewell (@RepTerriSewell) February 10, 2018

Despite Democrats’ anger, McGhan said – in addition to the fact that Trump was “inclined to declassify” the document – that “The executive branch stands ready to review any subsequent draft of the Feb. 5 memorandum for declassification at the earliest opportunity.” 

Feb
09

Dalio’s $13 Billion Short: Bridgewater Unveils Its Biggest Ever Short Position

Last October, Italy’s government was angry when the world’s largest hedge fund, Ray Dalio’s Bridgewater unveiled it had amassed a sizable  $713 million short against Italian financial stocks, its biggest disclosed bearish bet in Europe.

Then last week, and just one month before Italy’s March 4 elections – which the broader market stubbornly refuses to acknowledge are a risk factor – Bridgewater tripled down on its bearish bets against Italian banks and insurers, making the position the largest thematic short carried by the world’s biggest hedge fund.

As we reported last Thursday, Bridgewater boosted its bearish bets against Italian companies to $3 billion and 18 firms, up four-fold from just over $713 million in early October, further infuriating Italian authorities. As Bloomberg added, Bridgewater’s bearish bets against European companies as a whole totaled $3.3 billion, spread among 20 names.  In addition to his previous negative exposure, Dalio disclosed a short position in transport-infrastructure provider Atlantia and added to its largest short bet, against lender Intesa Sanpaolo SpA.

The growing short comes just days after Dalio told a Davos audience that “holding cash is now stupid”… and literally days before the biggest market crash since Lehman.

Fast forward to today, when Dalio’s bearish fascination is starting to get a little concerning, because according to the latest Bloomberg summary, Bridgewater now has at least $13.1 billion in European Union shorts, quadrupling the $3.2 billion short from last week, and over 18 times more than the fund’s original position last October.

In the past week, Bridgewater put more than $1 billion to work betting against oil giant Total SA – making it the firm’s largest disclosed short holding in Europe. 

As Bloomberg notes, Europe’s energy titan has been riding out the biggest industry downturn in a generation by selling assets and cutting spending. The hedge fund also started a bearish Airbus SE position, investing about $381 million against the aircraft maker. Among other short positions, it disclosed wagers against BNP Paribas SA, ING Groep NV and Banco Santander SA.

Amusingly, since the Feb. 8 regulatory filings were made public, Total fell 1% as markets slumped, while Dalio’s other shorts, Airbus, BNP Paribas, ING Groep and Banco Santander sank roughly 2%.

A list of Bridgewater’s top 10 shorts is shown below:

At the risk of repeating ourselves – which we think under these circumstances is worth it – we will remind readers that on January 24, Dalio told a naive, fawning Davos audience that:

“We are in this Goldilocks period right now. Inflation isn’t a problem. Growth is good, everything is pretty good with a big jolt of stimulation coming from changes in tax laws. If you’re holding cash, you’re going to feel pretty stupid.”

And as Dalio was dissembling, he was quietly assembling Bridgewater’s biggest ever thematic short in his fund’s history.

So yes, perhaps if you’re holding cash, you will feel pretty stupid eventually, but not after last week’s global market plunge; however, you will certainly feel much dumber if you actually believed Dalio.

Feb
09

WSJ Asks: Why Is The Media Ignoring The Real Bombshell FISA Memo?

Authored by Guy Benson via Townhall.com,

We’ll bring you Wall Street Journal columnist Kimberly Strassel’s tweetstorm in a moment, but I’ll take a stab at answering her question about the media right out of the gate.  

Three possibilities:

(1) The GOP hyped the Nunes memo, which quickly became the center of this whole firestorm — replete with counter-memos, FBI objections, etc.  The press followed the spotlight.

(2) As we’ve been saying, there are so many complex pieces of this larger puzzle, following the plot is difficult.  It’s not just news consumers wondering, “which memo is this now?” — it’s many of the people trying to cover this drama, too.  The document in question here is a second, less redacted, version of a Senate memo that few people have even heard of. 

(3) The Senate memo, produced by non-bomb-throwers Chuck Grassley and Lindsey Graham, is substantially more disruptive to the Democrats’ narrative than the Nunes document.  And the press generally prefers Democratic narratives to Republican ones because most journalists are liberals. 

My guess is that some blend of all three factors helps explain why the Grassley/Graham memo has barely registered on the national radar, even after we’ve endured multiple high-octane news cycles starring Nunes and Schiff.  But on the substance, does Strassel have a point, or is this just the latest shiny object the right-wing is waving around to distract from “the real story,” now that the Nunes memo was arguably a bit of a dud?  Here’s her case:

1) Why isn’t the (mostly) unredacted Grassley memo front page news? Here’s why: Because it confirms the Nunes memo and blows up the Schiff talking points (which the media ran with).

— Kimberley Strassel (@KimStrassel) February 7, 2018

2)It is confirmation that the FBI’s FISA application relied on the dossier and a news article, and worse, on the credibility of a source in the employ of the Clinton campaign.

— Kimberley Strassel (@KimStrassel) February 7, 2018

3) It is proof that the FBI did not tell the Court the extraordinarily partisan provenance of the dossier.

— Kimberley Strassel (@KimStrassel) February 7, 2018

4) It provides evidence that the FBI presented the FISA Court with materially false evidence, in the claim that Steele had not talked to the press. And then shows that even after Steele admitted under oath that he had, the FBI did not tell the FISA Court in its renewal.

— Kimberley Strassel (@KimStrassel) February 7, 2018

5) It provides evidence that Steele was getting information from the Clinton team itself! Via the State Department! So now, not only do we have a dossier based on unnamed shady Russians, but on Sidney Blumenthal. How much of this was engineered by the Clinton campaign from start?

— Kimberley Strassel (@KimStrassel) February 7, 2018

Does that all of check out?  Allahpundit digs into the document (a much more redacted version had been released previously) and seems to agree that Grassley/Graham is a significantly bigger deal than Nunes.  In our analysis of the latter document last week, we wrote that a major question was how much the DOJ relied on the Steele dossier itself to gain a FISA warrant against former Trump adviser Carter Page.  According to Grassley/Graham, the answer is a lot.  I posited that if investigators had used the unverified dossier as a starting point from which to chase down leads and produce more solid evidence to present to a FISA judge, that’d be one thing.  But if they leaned heavily on Steele’s file itself as the “evidence,” that would be sketchier.  According to the two GOP Senators, the FBI did the latter.  From AP’s excellent summary (the relevant bits of the memo itself are here and here):

…“The bulk of the application” against Page was dossier material…

“The application appears to contain no additional information corroborating the dossier allegations against Mr. Page.”

In other words, they seem to have treated the dossier as evidence, not as a lead. That’s big news.

But that’s not all. Grassley/Graham allege, based on intelligence, that the man behind the anti-Trump dossier was known to be unreliable by the FBI (they eventually severed ties with him) because he was caught lying either to US law enforcement or to British courts, telling each entity different stories about a key fact. Either way, FISA judges who approved and renewed the Page warrants weren’t told about the proven unreliability of the foreign agent whose work product was (apparently) the central basis for said warrants. The FBI might counter that Steele seemed credible at first, then they dumped him when he burned them, but that doesn’t mean their hands are clean, Allahpundit writes:

(a) that doesn’t solve the problem that the original FISA application against Page evidently relied “heavily” on information passed from a not-very-credible foreign agent and

(b) that doesn’t explain why the Bureau allegedly failed to tell the FISA Court in later applications to renew their surveillance of Page that Steele’s info maybe hadn’t been so credible…Grassley and Graham make another good point about Steele’s chattering to the press while his investigation was still ongoing: Once bad actors were aware that he was digging for dirt on Trump, they could have sought him out and fed him any amount of BS in hopes of it trickling through to the FBI and deepening the official suspicion surrounding Team Trump. That’s how Clinton cronies — maybe even Sid Blumenthal — got involved in this clusterfark. Because Steele was supposedly willing to accept even unsolicited tips about Trump, the Clinton team may have fed him rumors to help fill a dossier for which their boss was paying.

Two big points there:

Even after the FBI recognized Steele was an established liar, his dishonesty was not disclosed to judges deciding whether to keep the warrants active during renewal applications, which were largely predicated on Steele’s credibility.

And the topic about which he apparently lied was whether he blabbed to folks in the media about his work, which could have opened up the floodgates for disinformation from shady characters eager to make the anti-Trump case as juicy and brimming with salaciousness as possible.

That’s where Blumenthal and company, whom I wrote about here, may have come in. What a mess. Also, speaking of not revealing pertinent information to the courts, it looks like Nunes was technically incorrect that the judges weren’t made aware that the Steele dossier was paid political oppo research. But he was more broadly correct that the judges didn’t have even close to the full picture of who was behind the unverified partisan document upon which they were primarily basing the surveillance of a US citizen — who happened to be a former aide to a major presidential campaign from the out-of-power party.

“As Nunes himself later admitted, the Bureau apparently did disclose in a footnote that the material was paid political research. It just didn’t mention who, precisely, had paid for it,” AP writes.  The memo reads, “in footnote 8, the FBI stated that the dossier information was compiled pursuant to the direction of a law firm that had hired an “identified US person” — now known as Glenn Simpson of Fusion GPS…the application failed to disclose that the identities of Mr. Simpson’s ultimate clients were the Clinton campaign and the DNC.”  

So the disclosure came in a footnote and didn’t mention that the parties who paid for the unverified dossier were the Trump campaign’s explicit opposition.  Maybe there was no misconduct in any of this, but even as someone who believes neither that suspicion of Carter Page was unreasonable, nor that this is all part of a grand anti-Trump conspiracy (remember, the Trump angle of the Russia probe started earlier, for an unrelated reason), there’s enough in the Grassley/Graham memo to make me uncomfortable with the standards by which Page was surveilled by the US government.

Feb
09

American Hysteria Over Russia Will Lead To Nuclear War, Report

Authored by Seraphim Hanisch via TheDuran.com,

Russian media reacts strongly to the American Nuclear Posture Review, which tries to convince its readers that Russia is trying to take over the world…

Russian television broadcast a dire sounding piece on February 5th that probably was rather disquieting to most Russians, and also a source of significant dismay to their hopes for a rapprochement in relations following the election of Donald Trump to the Presidency of the United States.

The news agency “Vesti” explained that the US is preparing itself for nuclear war with Russia.

The US Department of Defense published its 2018 Nuclear Posture Review.  This consists of at least two documents that are public domain that detail the assessment the DoD made about nuclear threats from around the world.  The language about Russia is curious, for like Russia, the US repeatedly maintains that there is no desire for anything but good relations.

However, this is unfortunately either a blind claim or a willfully blind claim for the sake of propaganda. 

Based on the insanity of the US government’s reaction or posture about Russia overall, with the military fears, the sanctions and the most recent incidents of the release of the “Kremlin list” of government heads and successful businessmen and women, and the close flyby of a Russian fighter jet to an American surveillance aircraft, the ever-present “RussiaGate” investigations; and the lack of visible insanity on the Russians’ side, it seems likely that the American version of what is causing the ‘need’ to resolidify ‘defenses’ is lacking in factual evidence and cannot be taken as conclusive or trustworthy.

Not that there is any precedent for this outrageous statement… and if you believe that…

The problem begins with a false premise:

Russia is not the Soviet Union and the Cold War is long over. However, despite our best efforts to sustain a positive relationship, Russia now perceives the United States and NATO as its principal opponent and impediment to realizing its destabilizing geopolitical goals in Eurasia. (Emphasis mine)

This is an extremely bold assertion, though for some of the people who influence the stance of US foreign and military policy, this is how they see it.  However, it is also rather skillful sophistry that is achieved by a combination of American desire for hegemony and also, unfortunately, by a certain level of vagueness on both sides.

The Russian component of this vagueness largely seems to rest on the matter of Ukraine.  Ukraine itself is rightly understood as the motherland of all the Rus’ (“all the Russias”) from history that runs back over a thousand years.  It was Kiev that was the great capital of the early Russian governorate, which slowly expanded to become the Russian Empire.

However, there is also a complicated and deeply tragic history regarding the Ukraine, notably during the Soviet era, when millions of Ukrainians perished in what some in that country now regard as an intentional genocide, perpetrated deliberately against them by the Soviets in Moscow, hence, “Russia.”

This issue itself is complex and warrants, even begs, further exposition, but it is beyond the scope of this article. Some understanding may be gained by reading this piece, which gives an interesting survey of the history of Ukraine.  (Be aware though that it still comes from a publication with Western perspective.)

The main point is that Ukraine’s own nationalistic wish is spawned from factors including a national memory that points at Moscow as the source of their problems.  The fact that the Russian Federation is not Communist does not deter this point of view, because although the Russian nation is no longer a dictatorship, it still does not always conduct its foreign and national affairs transparently, and the desire for a real sense of self-determination is magnified by the allure of the glittering, wealthy West. The Western powers, most notably the USA, know this and have been teasing the Ukrainians with it.

Some of them, in Kiev and the western areas of the country (not all of which were Soviet territories at one point) have long had ties more to Europe than to Russia, and the inclusion of their territories in the Soviet Union was a source of further bitterness.  For many people in Ukraine, their history is of living in a battlefield of foreign powers.

They are understandably almost instinctively upset about any power’s designs on their territory, but it is also easy to manipulate this characteristic, and the United States has led the current struggle for Ukraine yet again.  The allure of Western European life seems to be what drew so many to the Euromaidan struggle in 2014, but the present day economy under the pro-Western government also appears to be in a shambles.

At any rate, the historical memory of extremely authoritarian and cruel Soviet rule in the region, plus the present day “vagueness” that seems to exist with regards to Russian foreign affairs, helps the West to cast Russia as an authoritarian nation, led by a “secret Communist”, Vladimir Putin, “who used to be a KGB agent.”

When one gives this information to many Americans, the conclusion they draw is clear.

The Pentagon, the central hub of US military operations.

Now to be sure, Vladimir Putin has been extremely open and candid about his nation and his own assertions of a strong Russian nation are absolutely proper for Russia, as they are for any nation. Nationalism is held extremely strongly in the United States, and again, history plays a part.  The recent history of what amounts to world dominance, militarily, scientifically, academically, and culturally, gives a sense to Americans that it is their country which is the guardian of all that is good.

But what are they guarding?  That greatness has shown many signs of slipping into decadence, such as happened in the waning days of the Roman Empire, where people lost their vision of becoming great, and have been self-indulgent in their perceived independence, not only of other nations and cultures, but of any power, including the Highest Power.  We have seen it become legal to call homosexual unions “marriage” and depravity, drug use, and tremendous unproductive navel-gazing have become more and more prevalent in a nation that, a mere 45 years ago, really stood as a defender of Christian freedom.

It is not possible that a nation living in delusion about itself can have a clear view of those nations outside itself.  And Russia has moved in the opposite direction as has the West.  The struggle exists, for Russia under Communism suffered great damage to the institutions of family, marriage and Church, but the move of the Federation now is to rebuild these core values.  All this while for a time, America seemed to be engaged in self-destruction by attacking these same core values.

Now, America’s military is in an extremely dangerous place.  The amount of sheer power the military has is greater than any in the world.  Although Russia and China also have incredibly capable military forces, the Chinese are untested in battle thus far, and the Russians are just beginning to show their own incredible capabilities.  But the United States has been at war almost continuously since at least as early as 2001, and this projection of power does create experience.

This Nuclear Posture Review shows us the face of a country who is deluded, hysterical, as the Russian media calls it, and they are right.  Despite the issues with Russia and Ukraine or Syria, Russia’s political will does not remotely resemble the notion that Russia is in an expansionist stage and that it wants to take over the former Soviet republics and then expand into the West.  Russia does want to chart her own course, and as a great power, and one with a long history and long memory of suffering, she wants to try to protect her own people from more suffering.

The American posture points the finger at Russia for being a threat, and then implies that Russia is a threat in very well-crafted language.  And this makes the assessment even more dangerous:

Russia has significantly increased the capabilities of its non-nuclear forces to project power into regions adjacent to Russia and, as previously discussed, has violated multiple treaty obligations and other important commitments. Most concerning are Russia’s national security policies, strategy, and doctrine that include an emphasis on the threat of limited nuclear escalation, and its continuing development and fielding of increasingly diverse and expanding nuclear capabilities. Moscow threatens and exercises limited nuclear first use, suggesting a mistaken expectation that coercive nuclear threats or limited first use could paralyze the United States and NATO and thereby end a conflict on terms favorable to Russia. Some in the United States refer to this as Russia’s “escalate to de-escalate” doctrine. “De-escalation” in this sense follows from Moscow’s mistaken assumption of Western capitulation on terms favorable to Moscow.

Effective U.S. deterrence of Russian nuclear attack and non-nuclear strategic attack now requires ensuring that the Russian leadership does not miscalculate regarding the consequences of limited nuclear first use, either regionally or against the United States itself. Russia must instead understand that nuclear first-use, however limited, will fail to achieve its objectives, fundamentally alter the nature of a conflict, and trigger incalculable and intolerable costs for Moscow. Our strategy will ensure Russia understands that any use of nuclear weapons, however limited, is unacceptable.

The U.S. deterrent tailored to Russia, therefore, will be capable of holding at risk, under all conditions, what Russia’s leadership most values. It will pose insurmountable difficulties to any Russian strategy of aggression against the United States, its allies, or partners and ensure the credible prospect of unacceptably dire costs to the Russian leadership if it were to choose aggression.

This is an amazing construction and assertion, and it is extremely dangerous for a nation with simultaneously massive power and a deluded worldview to hold.  It is also very difficult to get people who have such a suspicious point of view to back away from that suspicion. There is a great deal of bondage such belief and fear exerts on those who hold it.

That being said, this situation helps explain what many in the alternative media do – to counter media and political bias and to report on events in a light that is hopefully objective and true.  The Vesti newspiece was in its own way as alarmist as the American document it reported is.  The real way through this is obviously through increased understanding of the truth in all matters – historical, ideological, and in our case here, geopolitical.

The American side has taken several nasty jabs at the Russians recently, in this document and last week’s “Kremlin list”, but there is also hope that the disintegrating “Russiagate” investigation will come to the true conclusions about this matter, and so free the hands of those in America who understand that Russia is anything but an enemy or adversary.

Feb
09

Visualizing The Worst Crashes In Bitcoin History

Compared to some of the panics during the early days of bitcoin, the pioneering cryptocurrency’s 60%+ slide since the beginning of the year hardly register at all.

In the nine-year history of the cryptocurrency, which introduced the “revolutionary” blockchain technology to the world, osses have been as minimal as 30% and as severe as 87% during these Bitcoin panics. And compared with some of its previous dips – like the Mt. Gox-induced selloff in February 2014 that effectively ended the firs speculative bubble in the cryptocurrency after it officially went mainstream.

The latest correction took place between Dec.17 and Feb. 6, or 48 days, in which 70% of Bitcoin value was lost. However, if you look at the period between April 10, 2013 and April 12, 2013, Bitcoin lost an astounding 83% of its value over a three-day period. Talk about a panic! The point is that crashes have become relatively common throughout the cryptocurrency market, which is known for its swift volatility. It is important to turn to data and the facts in times of turmoil, rather than relying on one’s emotions.

Using the BitStamp Bitcoin-to-U.S.-Dollar (BTC/USD) pair, HowMuch measured the specific highs and lows of the past crashes dating back to January 2012. In the chart below, the arrow delineates the magnitude of the crash – while the number of days is listed below:

btc

As US stocks sold off again Friday, capping off the worst two-week selloff since 2009, bitcoin has climbed, as worries about a resurgence of inflation have rattled investors, making the inherently deflationary bitcoin that much more attractive.

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