02/23/17

THERE IS NO GROUP THINK AT THE FED

By: Kent Engelke | Capitol Securities

In my view, the Minutes from the February 1 FOMC meeting were largely a nonevent. The Committee “expressed confidence” that they can raise interest rates gradually while a hike “fairly soon” might be appropriate to avoid the risk of an overheated economy.

The Minutes revealed a tension between participants who are worried about foot dragging at a time when economic reports report solid versus those who want more clarity and still have some concerns about downside risks.

Perhaps the only certainty is today is different than yesterday, the result of the election, an uncertainty that is weighing upon monetary policy. If rising confidence and reduced regulations/tax reform increases monetary velocity, I reiterate the odds of greater than expected growth increases exponentially.

The corollary is if Trump’s proposals do not become policy, further economic atrophy may occur.

Markets were little changed on the release.

What will happen today?

Last night the foreign markets were down. London was down 0.03%, Paris up 0.19% and Frankfurt down 0.19%. China was down 0.30%, Japan down 0.04% and Hang Sang down 0.36%.

The Dow should open flat. The 10-year is up 5/32 to yield 2.40%.

02/22/17

WHAT WILL THE FEBRUARY 1 FOMC MINUTES SUGGEST?

By: Kent Engelke | Capitol Securities

The Minutes from the February 1 FOMC meeting are released today. Will the monetary timetable be changed yet again? Currently the market is suggesting a 38% chance of an interest rate increase in March. Are these odds understated?

Historically, the Fed’s target for short term interest rates is nominally lower than the trend growth in nominal GDP (real GDP plus inflation). Real GDP is about 3.5%, thus suggesting the overnight rate is considerably lower than historical norms.

Recently, the “animal spirits” are stirring because of the potential of less burdensome financial regulations, tax reform and infrastructure spending.

The yield curve between the overnight rate and the 10-year Treasury is around 180 basis points versus the historical average of 106 bps since the 1950s.

The yield curve between the 10 and 30 year Treasury has been holding consistent, believing the Fed will keep long term inflation and inflationary expectations “well contained.”

Is the market correct, defined as benign inflationary pressures even as rates are very accommodative based upon historical norms? What happens to assumptions if monetary velocity accelerates, which it appears that such an acceleration is now occurring as evidenced by nascent increase in M2?

I cannot underestimate the potential risk at hand if the Fed remains too accommodative too long. Excess bank reserves are around $2 trillion versus the historical norm of $1 billion thus suggesting considerable liquidity for inflationary growth.

The national debt is about $20 trillion, yet the debt service requirements — the amount of money needed to service principle and interest — are around 1996 levels when the national debt was 25% of today’s size. If interest rates rose to “historical norms/relationships,” debt service would increase to around $1 trillion versus today’s level of $325 billion or about 30% of the budget.

Wow! How will this impact government spending and interest rates?

The only constants in life are change and reversion to the mean. Confidences levels — same as animal spirits — have increased by amounts not experienced since 1980.

One of the stated goals of the FOMC, via very accommodative monetary policy and QE, is to force all further out on the risk curve, a policy that may have created tomorrow’s crisis.

Will tomorrow’s headlines be of greater than expected growth that has “unanchored” inflationary expectations because of the loss of confidence in the Fed’s ability to provide price stability?

How will this impact stock valuations and bond prices?

It is against this backdrop I would prefer the Fed to err on the side of caution, defined as increasing rates now in an attempt to prevent tomorrow’s future crisis.

As indicated, the odds are only 38%, perhaps the result of seven years of missed Fed policy and horrific fiscal policy and regulations that killed the “animal spirits,” animal spirits that are now awakening.

Commenting upon yesterday’s market action, equities ended higher on global economic optimism and further gains in oil. Treasuries were essentially unchanged.

Last night, the foreign markets were up. London was up 0.12%, Paris up 0.11% and Frankfurt up 0.18%. China was up 0.24%, Japan down 0.01% and Hang Sang up 0.99%.

The Dow should open nominally lower as all are questioning the sustainability of the advance, an advance that was partially the result of the collapse of the cross correlated trades, perhaps the result of the Trump election which may have completely changed the rules. The 10-year is up 3/32 to yield 2.42%.

02/21/17

A POSSIBLE ALTERNATIVE EXPLANATION OF THE CURRENT ADVANCE

By: Kent Engelke | Capitol Securities

Bloomberg writes the Dow has had its largest advance under a new president since LBJ. Many are suggesting the market is priced to perfection and if Trump stumbles, so will the markets. I ask however, based upon many press accounts, Trump is already stumbling badly with the worst approval ratings of any early presidency.

Perhaps there is a different reason, one alluded to Friday and one that is perhaps difficult to quantify or give attribution. Last week the WSJ reported the cross correlated trade that has worked for the last 8-10 years has collapsed. There is attribution for this view, thus this statement should not be viewed as rhetoric or conjecture.

The question that cannot be definitively answered is why it has collapsed. Consensus declaratively stated a Trump victory would be horrific to the markets. I vividly recall futures plunging over 10% late in the evening of November 8th when it was all but assured Clinton lost.

Many times I have commented about the impact of algorithmic and cross correlated trading which represents about 90% of the volume according to the SEC. I also referenced an SEC study that stated 96% of all orders entered were never executed. I further stated there are about 10-12 electronic firms that have replaced the hundreds of “specialist firms,” electronic firms that use the same rules of the hundreds of former specialist firms to maintain market order.

Specialist firms are permitted to take naked short positions to maintain market integrity. Twenty years ago it would be close to impossible for one firm to dominate the market. Today there are 10-12 trading firms, replacing the hundreds of specialist firms, that can take naked short positions, thus suggesting the market “can be prone to market manipulation and imbalances,” quoting a late 2015 SEC study.

Can I suggest the reason for such a strong advance in the face of “accepted turmoil” of the Trump administration is that these naked shorts are now being covered because of economic necessity? Is this the reason why cross correlated trading strategy that has worked almost flawlessly for the past 8-10 years has completely collapsed?

Perhaps. About 14 months ago, I referenced a Federal Reserve report that contained a question that is now asked by regulators about the loan portfolios of the largest money center banks. Does your institution lend money to algorithmic or electronic trading firms?

It was against this backdrop last January that Barclays Bank wrote perhaps one of the greatest risks to the markets is a potential “melt up” because of unreported naked shorts that creates a liquidity crisis for a mega-sized financial firm.

I will readily acknowledge this is very Michael Moorish, perhaps stretching for a reason to explain why “the fail-safe” cross correlated trade has collapsed and to explain the strongest equity advance since LBJ as the Establishment has declared the Administration is operating in total chaos. Uncertainty and chaos normally creates negative market volatility.

Returning back to information that is quantifiable to explain the advance, data that I have already discussed at length, both business and consumer confidence is surging, optimism on earnings calls is high, growth proxies are humming, all of which has already caused a jump in retail sales and rising inflationary expectations.

In my view there is no question the political environment comes up in every discussion and to ignore such is equivalent to ignoring the impact of interest rates to valuation formulas.

What will happen this week?

Last night the foreign markets were mixed. London was down 0.18%, Paris up 0.36% and Frankfurt up 0.62%. China was up 0.41%, Japan up 0.68% and Hang Sang down 0.76%.

The Dow should open nominally higher on economic optimism as the economic activity in the euro area unexpectedly rose to an almost six-year high. The 10-year is down 10/32 to yield 2.46%.

02/15/17

WAS FRB CHAIR YELLEN’S TESTIMONY A NONEVENT?

By: Kent Engelke | Capitol Securities

If one uses fed fund futures, which are a gauge of market sentiment, FRB Chair Yellen’s testimony was almost a nonevent. Before she began testifying, the market was suggesting a 30% probability of a change in monetary policy in March. Now it is 34%.

Yellen said the Fed panel’s outlook for a “moderate pace” of growth is based on continued stimulative monetary policy and a pickup in global activity. She did not mention Trump administration proposals as a key element in the central bank’s forecast.

The Chair stated that consumer spending has continued to rise at a “healthy pace,” supported by gains in household income and wealth, favorable sentiment and low rates. The Fed chief said changes in fiscal and economic policies could affect the outlook, though she declined to speculate how, adding it is “too early to know” what policy changes will be put in place.

The longer dated Treasury market however had a different view of Yellen’s remarks. The 10-year increased in yield to around 2.50%. Last week, it was yielding about 2.32%. Will yields climb to December’s peak of 2.60%? The 30-year Treasury rose to 3.09% versus last week’s level of 2.92%. In December, the 30-year hit a 3.18% yield.

Did yields advance because of Yellen’s remarks suggesting a gradual increase in the overnight rate, which then may suggest the central bank could fall behind the proverbial inflationary curve?

Speaking of which, wholesale prices jumped in January by the most since September 2012, led by higher gasoline costs, thus suggesting inflation is beginning to stir. The 0.6% gain in the PPI followed a 0.2% advance in the prior month. Consensus called for a 0.3% rise.

Equites led by the financials, staged an advance on economic optimism.

Last night the foreign markets were up. London was up 0.49%, Paris up 0.50% and Frankfurt up 0.10%. China was down 0.15%, Japan up 1.03% and Hang Sang up 1.23%.

The Dow should open quietly lower assessing Yellen’s comments. The 10-year is off 3/32 to yield 2.49%.

02/14/17

FINANCIAL STOCKS DOMINATED YESTERDAY

By: Kent Engelke | Capitol Securities

Financial stocks led the markets higher as the reflation trade continues to dominate activity. The averages are now at the highest valuation since 2004 according to Bloomberg, partially the result of economic optimism via the Trump victory. I think it is noteworthy that to date there are no policies implemented much less proposed, only statements of decreased regulation and taxes.

Is the “Mother” of “buy on rumor and sell on fact” trade on hand? What happens if the Trump proposals become stalled, lacking any significant legation, the result of the hyper partisanship in Washington?

Bloomberg writes volume is anemic, thus suggesting this is a convictionless advance, thus suggesting it can be prone to a sharp pull back.

All must remember nothing is ever linear and there will be ebbing and flowing.

Today, FRB Chair Yellen testifies on Capitol Hill. Will her remarks alter the monetary time table? As noted above, the recent advance has been led by the financials predicated upon a strengthening economy and higher interest rates.

How will her remarks be interpreted?

Last night the foreign markets were mixed. London was up 0.07%, Paris up 0.09% and Frankfurt up 0.01%. China was up 0.03%, Japan down 1.13% and Hang Sang down 0.03%.

The Dow should open flat ahead of Yellen’s testimony; a testimony which is expected to be oblique, defined as no one knows the possible implications and ramifications of a Trump presidency which is challenging the established world order of globalism. The 10-year is off 2/32 to yield 2.45%.

12/5/16

Beware of the Patent Bubble

By: Scott Cooper, CEO and Creative Director, World Patent Marketing, [email protected]

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Does anybody even want to think about this?

I’m certainly not going to win any popularity contests for writing this article.  The last thing anybody wants to talk about after a presidential election is a patent bubble.  After all, most of us took a nice stock market beat down during the recent housing bubble and mortgage crisis.

For the past 40 years, intellectual property,  technology development, and invention ideas have been the driving force behind the United States and much of the world’s developed economy. Companies like Apple, Amazon and Amgen have been the leaders in wealth creation. Biotech, software, and communications systems have made fortunes for many and changed the world we live in.

It has resulted in a mad rush to capitalize on the “next big thing.” And that is creating a global patent bubble.  The chase of Intellectual Property (IP) has created the next “irrational exuberance.”  If the term rings a bell, it’s because it was the phrase that Federal Reserve Chairman Alan Greenspan used when warning about stocks being overvalued during the DotCom Bubble of the 1990s.

Since Microsoft burst onto the scene, IP has been seen as the next gold rush. Companies, venture capitalists, private equity shops, and universities worldwide are searching for new patents and copyrights that will create killer returns.

Patent Bubble Numbers Don’t Lie

The prices being paid for patents are all over the place. In 1975, more than 80% of an S&P 500 company’s net worth was based on tangible assets (real estate, machinery, receivables, etc.). By 2010, that number has completely flipped to 80% of the net worth being based on intangible assets (patents, goodwill ,etc.).

The numbers are clear. Intellectual property  now accounts for over 38% of the U.S. economy, but interestingly only 12% of exports. If that’s not the start of a patent bubble forming, I don’t know what is.

It seems that the race to patent a product has overshadowed the product itself. I am not discounting the importance of patents, however, when almost 40% of the economy is about protecting the right to make a product (rather than the product itself), there is something wrong.

95% of Patents Don’t Make a Dime

The common perception is that patents are a path to riches. If an inventor or entrepreneur files a patent, he can then build a successful technology company under the protection of that patent and eventually sell out to companies like Apple and Facebook.

Nothing can be further from the truth. A patent does not create a shield or grant you freedom to operate without competition. It gives you a tool to attack a competitor that you believe is infringing on your patent. Enforcing your patent is typically a nightmare, even for well funded corporations.  It can take up to 5 years and cost up to $5 million to actually win a patent litigation.  And that’s if there isn’t an appeal. And you better pray that the company infringing on your patent isn’t too comfortable in a courtroom.  They can make your life a living hell and make you wish you never filed for a patent in the first place.

Ever Heard Of The Tulip Bubble?

The Tulip Bubble is regarded as the first record of a widespread financial bubble in history. In the early 1600s, Tulips were newly introduced in the Dutch Republic and investors scrambled to get on board. At the peak of the bubble a single tulip bulb could sell for ten times the annual income of a skilled craftsman. Tulips were the fourth largest Dutch export! This was at a time when food and clothing absorbed almost the entire bulk of national income. In this environment where most people had barely enough to eat, it was simply bizarre that a useless luxury item absorbed such a huge chunk of Dutch wealth. Then in 1637 the bubble burst and the price of tulips fell to 1% of their former value. The Dutch economy crashed and the consequences were felt throughout Europe.

The bursting of the Tulip Bubble didn’t just affect those who owned and traded tulips. It caused a deep recession and a liquidity crisis in the Dutch Republics. The tulip bulbs were leveraged by finance, just as we leverage homes and commodities in the United States today. When a widespread bubble bursts, it up-ends the balance sheets of the entire nation.

The price of tulips never recovered, as you can see for yourself at any WalMart in Spring. You can buy them by the dozen for under five bucks.

The Crash of 1929 and the Mortgage Crisis Were Bubbles

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The great Stock Market Crash of 1929 was brought on by similar forces. Investors were making huge returns all through the 1920s. The stock market was the place to be if you wanted to get rich quick. People borrowed heavily to purchase shares. And then it all came crashing down.

The Mortgage Bubble, which burst in 2008 showed us the same pattern again. Following 1999, when the Tech Bubble burst, the safe place to put your money was into homes. Prices were bid to unsustainable levels. All of it was commodified for investment purposes. When it crashed, almost every major bank in the U.S. and Europe found themselves in negative territory. On paper they were bankrupt. They owned a bunch of mortgages tied to homes with inflated values. The government had to step in with cash to keep the banks afloat.

The bursting of the Mortgage Bubble led to the deepest economic downturn since 1929 and its aftermath is still felt throughout the U.S. economy.

The Patent Bubble Will Hurt the Entire Economy

It is my opinion that when the Patent Bubble bursts, it could be far worse than the housing bubble.

Today, a company’s most valuable asset is  its intellectual property. Their wealth is in their patents. These patents are held on their balance sheets as intangible and undisclosed assets. They attract investment, issue bonds, and obtain credit based upon those numbers.

These patent bubble assets are not liquid and they do not trade easily. It isn’t like selling a publicly traded security. Patent assets do not trade frequently and don’t have any valuation consistency.  If a company fails, it is forced to liquidate these patent assets at fractions of their assumed value.  When Kodak filed for bankruptcy, experts were predicting patent portfolio sales of $1.8 billion to $4.5 billion.  They sold between $94 million to $525 million.  Quite a difference. There was nothing unique about the way Kodak was valuing its patents. They were just following accepted accounting principles. Imagine Kodak happening over and over again. It would create an international liquidity and balance sheet crisis.

Don’t Confuse Inflated Prices with Economic Growth

Too much money chasing the same sector results in price inflation. Those inflated prices are always unsustainable. When this patent bubble bursts, it will hurt the entire economy.

This is the opposite of productive investment, which has given us tremendous growth and a high standard of living. Investment in goods and services for reasonable returns is vital to economic growth. Investment in paper monopolies, patents and copyright, can be good for the economy. But when it gets out of balance, as it is now, it can lead to very bad economic outcomes for the global economy.

Why isn’t anybody sounding the patent bubble alarm?

When bubbles are on the rise, a tremendous amount of wealth is created. Even a pure Ponzi scheme created plenty of profit for the early investors. During the Housing Bubble, many on Wall Street and in government knew that housing prices were unsustainable.  Even Federal Reserve made comments suggesting that the economy was now “different” and there would be a soft landing.

Well the economy wasn’t different. Ponzi Schemes and bubbles always end the same way. Traders like Nassim Taleb, who wrote the influential book “The Black Swan”, and made a killing by investing against the home mortgage industry, were laughed out of the room. They were called alarmists or even branded as negative and destructive. But of course, Ponzi Schemes always fail. Everybody wants to believe it is different this time. But, it never is.

There is one thing for sure. We are in a Patent Bubble right now and history always repeats itself.

Learn more about World Patent Marketing.

02/22/16

Conservative Journalist Predicts Republican Defeat

By: Cliff Kincaid | Accuracy in Media

Veteran conservative journalist Fred Barnes has written a disturbing Wall Street Journal article about how the campaign of Donald Trump, sparked by talk radio, is dividing and weakening the Republican Party—thus guaranteeing a Democratic Party win in November. Barnes points out in the article, entitled, “Republicans Are Campaigning to Lose,” that a significant number of Republicans will not vote for Trump if he becomes the GOP presidential nominee.

“The Republican rift will not be healed and disunity will reign,” Barnes predicts. “It’s highly likely that a sizable chunk of the Republican establishment will decline to back Mr. Trump in a repeat of 1964 when liberal and moderate Republicans refused to support Barry Goldwater.”

What’s fascinating about his piece is that Barnes discusses the forces in talk radio that opened the door for Trump to take control of the GOP presidential race. He writes, “The split between party leaders and a substantial number of party voters emerged after Republicans won the House in the 2010 midterm election, and swelled when they added the Senate in 2014. Their legislative gains were minimal. The Republican base, egged on by conservative talk radio, accused congressional leaders of knuckling under to President Obama.”

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02/16/16

Another Stock Market Crash Inevitable

By Wim Grommen

Every production phase or society or other human invention goes through a so-called transformation process. Transitions are social transformation processes that cover at least one generation. In this article I will use one such transition to demonstrate the position of our present civilization and and that a new stock market crash is inevitable.

When we consider the characteristics of the phases of a social transformation we may find ourselves at the end of what might be called the third industrial revolution. Transitions are social transformation processes that cover at least one generation (= 25 years). A transition has the following characteristics:

–        it involves a structural change of civilization or a complex subsystem of our civilization

–        it shows technological, economical, ecological, socio cultural and institutional changes at different levels that influence and enhance each other

–        it is the result of slow changes (changes in supplies) and fast dynamics (flows)

A transition process is not fixed from the start because during the transition processes will adapt to the new situation. A transition is not dogmatic.

Continue reading

09/1/15

China and Russia are Waging War on America

By: Cliff Kincaid
Accuracy in Media

In a typically cynical article, “GOP presidential candidates have a new country to bash: the People’s Republic of China,” Politico complains about “China-bashing” by various Republican candidates. The story by Nahal Toosi carries the headline, “The Republicans’ Red Scare,” but only mentions one time that China is a “communist-led state.”

Politico uses the term “red scare” to suggest that the problem is being greatly exaggerated.

If there is any doubt about the “red” in Red China, consider the Chinese Constitution, which declares, “The People’s Republic of China is a socialist state under the people’s democratic dictatorship led by the working class and based on the alliance of workers and peasants. The socialist system is the basic system of the People’s Republic of China. Sabotage of the socialist system by any organization or individual is prohibited.”

Mao Zedong, considered by many the greatest mass murderer in history, ispictured on the Chinese currency.

After Politico went to press with its defense of Beijing, the Los Angeles Timesreported that “Foreign spy services, especially in China and Russia, are aggressively aggregating and cross-indexing hacked U.S. computer databases—including security clearance applications, airline records and medical insurance forms—to identify U.S. intelligence officers and agents, U.S. officials said.” The Times added, “At least one clandestine network of American engineers and scientists who provide technical assistance to U.S. undercover operatives and agents overseas has been compromised as a result, according to two U.S. officials.”

Politico reported that criticism of China “might lead Chinese leaders to cozy up to another world power instead, like Russia (another favorite GOP boogeyman), the former ambassador said.”

This former ambassador is Jon Huntsman, the “moderate” Republican who served as Obama’s Ambassador to China. He ran for president in 2012, dropped out, and threw his “support” behind Mitt Romney, who lost a race he should have won.

Later in the article, Politico refers to China’s “alleged” cyberattacks.

“U.S. officials have not publicly blamed Beijing for the theft of the OPM and the Anthem files, but privately say both hacks were traced to the Chinese government,” reported the Los Angeles Times. “The officials say China’s state security officials tapped criminal hackers to steal the files, and then gave them to private Chinese software companies to help analyze and link the information together. That kept the government’s direct fingerprints off the heist and the data aggregation that followed. In a similar fashion, officials say, Russia’s powerful Federal Security Service, or FSB, has close connections to programmers and criminal hacking rings in Russia and has used them in a relentless series of cyberattacks.”

Why is there such a determination by a well-read publication like Politico to play down threats from China and Russia? This article is a case study in Republican-bashing. Politico is trying to warn Republicans running for president not to follow Donald Trump’s lead in focusing on how foreign countries are taking advantage of the United States.

The article by Nahal Toosi says that “…while scapegoating Beijing and its questionable economic policies may seem like an appealing campaign tactic, China specialists—including many in the GOP—warn that Republicans run the risk of looking ignorant about U.S.-Chinese ties.”

The ignorance comes from those in politics and the media who play down the nature of the communist regime.

The author goes on to warn against “bullying” or “isolating” the world’s “most populous country.”

“To be fair,” she writes, “China gives White House hopefuls lots of material for a tough-guy routine. Beijing’s aggressive moves in the South China Sea, its suspected role in cyberattacks on the U.S. and its dismal human rights record are just a few areas already seized upon by Republicans (and some Democrats) for criticism. China’s currency policies have long frustrated the United States in particular, and its increased military spending has led to wariness around the world.”

Notice how “alleged” cyberattacks have become “suspected.”

But in order to “be fair” to Republicans, she grudgingly admits some “questionable” Chinese policies that give the GOP candidates enough material to appear “tough.”

This is a despicable whitewash of a communist regime that is clearly waging war on the U.S.

“Potential enemies of the United States have claimed that they have the ability to crash our markets and our former head of NSA acknowledged that they do have that capability,” notes Kevin Freeman, author of Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It can Happen Again.He notes that the Dow Jones Industrial Average crashed by more than 1,000 points at the open on August 24 “after China accused us of crashing their market.” He says that China has published a book, Unrestricted Warfare, calling a stock market crash a “new-era weapon.”

Instead of holding the Obama Administration accountable for safeguarding our national security information, Politico attacks Republicans for being too critical of China.

Later in the article, Politico quotes some comments about why we have to take the time to understand that the rulers in Beijing will realize this is just campaign rhetoric. “Top U.S.-watchers in Beijing are pretty savvy,” says Melanie Hart, identified as “director for China policy at the left-leaning Center for American Progress.” It turns out she “worked on Qualcomm’s China business development team, where she provided technology market and regulatory analysis to guide Qualcomm operations in Greater China. She has worked as a China advisor for The Scowcroft Group, Albright Stonebridge Group, and the University of California Institute on Global Conflict and Cooperation.”

In other words, part of her career has been devoted to facilitating U.S. investment in China. She went to China in June to work on U.S.-China cooperation on “climate change” matters. She has a vested interest in making the communists look non-threatening.

Meanwhile, last January, a Russian spy ring was uncovered in New York City whose purpose in part was to “collect economic intelligence” and recruit New York City residents as intelligence sources. One of the targets of the economic intelligence gathering, a Justice Department press release said, was the New York Stock Exchange. The actual complaint filed against the Russians went into more detail, as they are shown discussing how to obtain information about the “destabilization” of U.S. financial markets.

So despite the wisdom conveyed by Jon Huntsman about forcing China into the arms of Russia, it looks like Russia and China are already working very well together.

Nevertheless, the first state visit by President Xi Jinping of China to the United States will take place in September.

Look for another Politico article about GOP “obstructionists” getting in the way of our blossoming relationship with the butchers of Beijing.

08/28/15

Paying the Media for Pro-U.N. Coverage

By: Cliff Kincaid
Accuracy in Media

A CNN story blared, “The American stock market has surrendered a stunning $2.1 trillion of value in just the last six days of market chaos.” The ups and downs of the stock market have been seized upon by those leading a global campaign to steal trillions of dollars from the American people in the name of “sustainable development.”

One aspect of the campaign is a so-called “financial transaction tax,” endorsed by socialist and presidential candidate Bernie Sanders (I-VT), which would even affect the stock trades of small investors. The proposal has a global component.

However, the odds are that you will only be treated to positive coverage of this unfolding scheme to “redistribute the wealth” on a global basis. George Russell of Fox News broke the story of how a branch of media giant Thomson Reuters and the United Nations Foundation are training journalists and paying for stories to “popularize” the U.N.-sponsored Sustainable Development Goals and make them attractive to news consumers.

The Sustainable Development Goals (SDGs) are outlined in the U.N. report, “Transforming our world: the 2030 Agenda for Sustainable Development,” a manifesto to be adopted by the nations meeting at the United Nations Headquarters in New York from September 25 to 27, as the global organization celebrates its 70th anniversary.

The SDGs, such as “End poverty in all its forms everywhere,” sound positive. However, in reality, the concept of “sustainable development” is a Marxist scheme that researcher Michael Hichborn of the Lepanto Institute calls “a United Nations plan for the creation of a global socialist utopia thinly disguised as a poverty reduction program.”

Thomson-Reuters says, “The intensive training program aims to provide professionals from 33 countries with information, tools and strategies to understand the complex issues surrounding the next set of UN global development goals. The program will enable reporters, editors and spokespeople to better understand, report and communicate around some of the issues related to two crucial upcoming UN conferences: the UN Summit in New York in September that will see the adoption of the new Global Goals, and the UN Climate Change Conference in December in Paris, which is aimed at reaching a universal climate agreement.”

Marta Machado, who’s in charge of the Thomson-Reuters initiative, has worked for the Muslim Brotherhood channel, Al Jazeera, and CNN.

The United Nations Foundation, started by CNN founder Ted Turner, claims the effort is designed to “increase, enhance and influence global communications and media reporting” on the campaign.

However, in a press release that carried the subheadline, “Why communications matter in 2015,” the United Nations Foundation said the campaign will include media training, financial grants and “a sustained surge in targeted digital media,” designed to “help increase the volume and animate a global public conversation about the new goals, creating the environment to help us achieve success by 2030” (emphasis added).

Hence, the coverage will be slanted in favor of the United Nations.

Another “partner” in the global media campaign on behalf of the U.N. is the Jynwel Foundation, described as the philanthropic initiative of Jynwel Capital, an international investment and advisory firm based in Hong Kong.

As this campaign unfolds, it is a virtual certainty that the real purpose of the SDGs—to punish Americans and other “rich” people—will be carefully concealed.

As amazing as it seems, a report on foreign aid from the World Bank and the International Monetary Fund (IMF) is actually titled, “From Billions to Trillions: Transforming Development Finance.” A United Nations General Assembly report, dated August 14, 2015, calls for “several trillion dollars per year” to be spent to implement “sustainable development” on a global level.

But don’t call it theft; call it “sharing.” Indeed, a report titled, “Financing the Global Sharing Economy,” proposes global taxes on financial transactions, energy and other measures to bring in over $2.8 trillion. The founder of Share the World’s Resources (STWR), Mohammed Mesbahi, has outlined a “strategy for world transformation” that condemns “the materialistic and self-seeking idea of the American Dream.”

In order to acquire these resources, new taxes on the national and global level are being pushed in the name of stabilizing the stock market.

After the Dow Jones Industrial Average plummeted more than 1,000 points at the open on Monday, the “progressives” in favor of financial transaction taxes went into action. James Henry, senior fellow at the Columbia University Center for Sustainable International Investment, was quoted as saying the stock turbulence is “a great example of why we need a Financial Transaction Tax,” a proposal that he says would raise hundreds of billions of dollars.

Almost on cue, socialist Senator Bernie Sanders (I-VT) endorsed the idea. Sanders, who backs a 90 percent top marginal tax rate, says his proposed financial transaction tax will reduce “risky and unproductive high-speed trading and other forms of Wall Street speculation…” In order to make it attractive, he says the proceeds “would be used to provide debt-free public college education.”

Jared Bernstein, the economic adviser to Vice President Joseph R. Biden Jr. from 2009 to 2011, says in a New York Times column that Sanders is right. “A financial transaction tax is a smart, fair way to raise urgently needed revenues while reducing unnecessary trading that makes our markets more volatile,” he wrote.

The council of the Socialist International convened on July 6 and 7 at the United Nations Headquarters in New York, and endorsed the Millennium Development Goals and the “post-2015 development agenda.”

Sanders is reported to be a member of the Democratic Socialists of America, the U.S. affiliate of the SI.

Such a tax could be applied on a global basis as well. Steven Solomon, a former staff reporter at Forbes, says in his book, The Confidence Game, that a global financial transactions tax “might net some $13 trillion a year…”

Calls for global taxes and more foreign aid are not new. The difference this time around is that the Vatican has endorsed the SDGs. Archbishop Bernardito Auza, Apostolic Nuncio and Permanent Observer of the Holy See to the United Nations, gave a formal statement to the world body endorsing the “sustainable development” agenda.

Pope Francis will formally address the United Nations General Assembly in New York City on Thursday, September 25.