U.S. 2nd Fleet Is Back Due To Project 20870

By: Denise Simon | Political Vanguard

No one pays much attention to Russian activities in the Arctic except the Pentagon. There is a new battlefront happening there and so far the Russians are winning. With little media coverage, Congress has put $717 billion in play and it is assigned to China, Russia and Turkey operations.

As it relates to Russia and the Arctic, there is this big barge moving at about 4 knots and we just can’t trust it. Why?

Named the Lomonosov, it will be able to quickly replace the Soviet-era Bilibino Nuclear Power Plant and the Chaunskaya coal-fired power plant. Of the other six planned Project 20870 floating power stations, five are already set to help Russia’s state-run oil and gas company Gazprom expand its off-shore activities in and around the Arctic region. The last one could go to Dudinka on the Taymyr Peninsula or Vilyuchinsk on the Kamchatka Peninsula, both also in the country’s far north. If the concept proves sound, though, it seems likely that the Kremlin could look to expand the number of floating nuclear power plants, either of Project 20870 type or separate designs, to support additional efforts in the Arctic region, including supporting new or rehabbed military facilities. Starting in 2014, Russian President Vladimir Putin announced plans to refurbish various abandoned sites in the area, as well as build entirely new air, ground, and naval bases. This decision was part of a generally more assertive Russian force policy that had already become apparent with the illegal annexation of Ukraine’s Crimea region earlier that year.

In April 2017, Russian officials unveiled one of the first of its all-new Arctic sites, called the Arctkicheski Trilistnik, which translates variously as Arctic Trefoil or Arctic Shamrock, which sits on Alexandra Land, an island in the Franz Josef archipelago, and is north of the Arctic Circle. It is unclear whether this base’s own power plant, which helps it remain self-sufficient during the winter months when it is largely cut off from the mainland, is conventional or nuclear.

So, here comes the 2nd Fleet. Secretary of Defense Mattis and the Pentagon have been drafting operations and counter-measures on Russian activities. Left unresolved by the Obama administration after the annexing of Crimea and the Russian aggressions against Ukraine, very little attention has been focused on Russia operations in the Arctic, until now.

ABOARD THE USS GEORGE H. W. BUSH, NORFOLK, Va. — A sharp increase in Russian naval activity in the Arctic and north Atlantic in the years since its invasion of eastern Ukraine has prompted the U.S. Navy to resurrect a command it disestablished seven years ago.

At a ceremony marking Adm. Phil Davidson’s change of command with Adm. Chris Grady as the head of U.S. Fleet Forces Command, Chief of Naval Operations Adm. John Richardson announced the Navy was set to reestablish the 2nd Fleet.

The command was merged into Fleet Forces Command in 2011, but the Navy has been talking about bringing it backsince it appeared as a recommendation in the Strategic Readiness Review into last year’s 7th Fleet collisions. Richardson told reporters onboard the carrier George H. W. Bush May 4. “So as we’ve seen this great power competition emerge, the Atlantic Ocean is as dynamic a theater as any and particular the North Atlantic, so as we consider high-end naval warfare, fighting in the Atlantic, that will be the 2nd Fleet’s responsibility.”

To put this nuclear barge into context and history, the Lomonsov was named after Akademik Lomonosov, a scientist and writer that died in 1765. He was born in 1711 in the village of Denisovka, which was renamed Lomonosov after him.

So, one must remember that Russia took over Crimea without a whimper from the rest of the world. Military hostilities continue due to Russian aggressions in the Ukraine. Could it be that the U.S. Navy under orders from the Pentagon are finally going to attempt to manage Russian aggressions in the Arctic? Is there a real strategy here? If there is, that strategy is hardly clear since Operation 20870 has been in process since 2016.


China is Buying America with and without CFIUS

By: Denise Simon | Founders Code

Statistics found here.

When China is not buying America, they are busy in other parts of the globe buying places like Europe. That is how China is expanding, including stealing intelligence, espionage and hacking. The parts of Britain not owned by Russia are being gobbled up by China. Russia has a long plan and China has a long plan, not too sure about the United States, Britain or other allies.

There have been many discussions in Congress to reform CFIUS, Committee on Foreign Investment in the United States. The most widely noticed scandal with CFIUS was the Uranium One deal.

Anyway, John Carlin recently spoke with the National Law Journal about bipartisan legislation introduced in November in the U.S. Senate and House of Representatives by U.S. Sen. John Cornyn, R-Texas, and U.S. Rep. Robert Pittenger, R-North Carolina, respectively, to overhaul the CFIUS review process. CFIUS reviews, which are voluntary, are meant to protect the nation from business transactions that pose a national security or strategic risk to the United States. The panel has the authority to require the transaction’s parties to undertake risk mitigation, such as carving out a specific location or element of the deal.

The panel can also recommend that the president block a deal entirely. President Donald Trump, for example, in September blocked the sale of Oregon-based Lattice Semiconductor Corp. to a Chinese company. A deal by Anthony Scaramucci, briefly a White House communications director, to sell his stake in SkyBridge Capital to Chinese company HNA Group Co., which is partly government-owned, appears to be in jeopardy after not yet clearing its nearly yearlong CFIUS review, according to reports in financial media including Bloomberg News in mid-December.Treasury Secretary Steven Mnuchin, who chairs the panel, has urged toughening CFIUS reviews.

While leading the DOJ’s National Security Division, Carlin oversaw the indictment in 2014 of five Chinese military members for economic espionage for hacks against several big U.S. companies, among them United States Steel, Westinghouse, Alcoa Inc. and SolarWorld from 2006 through 2014. The division also investigated the cyberattack on Sony Pictures Entertainment in late 2014 that the U.S. government determined originated in North Korea; and brought charges with the FBI against seven Iranians working for computer companies under contract to the Iranian government and military that conducted cyberattacks between 2011 and 2013 against 46 financial institutions including Wells Fargo and JPMorgan Chase & Co. More here.

The CFIUS review process also appears to be affecting efforts by China Oceanwide Holdings Group Co. Ltd. to acquire Genworth Financial Inc.

BusinessInsider: In 2016, General Electric sold its appliances business to Qingdao-based Haier. China’s Zoomlion made an unsolicited bid for heavy-lifting-equipment maker Terex Corporation, and property and investment firm Dalian Wanda announced a deal to buy a majority stake in Hollywood’s Legendary Entertainment.

On Friday, a Chinese-led investor group announced it would buy the Chicago Stock Exchange. And then there’s ChemChina’s record-breaking deal for the Swiss seeds and pesticides group Syngenta, valued at $48 billion according to Dealogic.

There have already been 82 Chinese outbound mergers-and-acquisitions deals announced this year, amounting to $73 billion in value, according to Dealogic. That’s up from 55 deals worth $6.2 billion in the same period last year.

Last year was a record-breaker for Chinese outbound deals, with 607 deals valued at $112.5 billion in total. Just over one month into 2016, and China is more than halfway to breaking that record.

So what’s going on?

One interpretation is that Chinese companies are simply hungry for growth as that country’s economy slows, and they’re feeding themselves by buying other companies.

“With the slowdown of the economy, Chinese corporates are increasingly looking to inorganic avenues to supplement their growth,” Vikas Seth, head of emerging markets in the investment-banking and capital-markets department at Credit Suisse, told Business Insider.

Last year, investment bankers earned $558 million in revenue from Chinese outbound M&A deals, according to Dealogic. This year, that number is at $121 million to date.

But there are, of course, a number of challenge these deals will face — especially in the US.

M&A deals in the US are subject to scrutiny by the Committee on Foreign Investment in the United States, or CFIUS. It recently prevented the $3.3 billion sale of Philips’ lighting business to a group of buyers in Asia.

The 82 Chinese outbound deals announced so far in 2016 are worth more than half of 2015’s total Chinese outbound-deal value.

“I would be very surprised if CFIUS did not have an interest in taking a look at this deal,” said Anne Salladin of law firm Stroock & Stroock, referring to the Chicago Stock Exchange deal.


Putin Denies Military Operations Against Ukraine, Proof Emerges

By: Denise Simon | Founders Code

The Ambassador predicted liberation of Mariupol in 2014, the plan was in place, was anyone listening? Liberation? That is how Moscow packaged it? And the Active Measures/propaganda continues.

Related reading: Ukraine Fortifies Its Airwaves Against Russian TV Broadcasts

Breaking: Russian Officers and Militants Identified as Perpetrators of the January 2015 Mariupol Artillery Strike

The investigation can be viewed here

На русском языке

The Bellingcat Investigation Team has determined conclusively that the artillery attack on targets in the Ukrainian town of Mariupol on 24 January 2015, which resulted at least 30 civilian deaths and over 100 injuries, came from Russia-controlled territory. Bellingcat has also determined that the shelling operation was instructed, directed and supervised by Russian military commanders in active service with the Russian Ministry of Defense. Bellingcat has identified nine Russian officers, including one general, two colonels, and three lieutenant colonels, involved directly with the military operation.

Furthermore, Bellingcat has determined that two artillery batteries of Multiple Launch Rocket Systems (MLRS) were transported from Russia into Ukraine the day before the Mariupol operation. In the early morning of 24 January 2015, these batteries were deployed near the village of Bezimenne exclusively for the shelling of targets in and around Mariupol, after which they were repatriated back into Russia.

In the course of analyzing the events in the eve of and on 24 January 2015, Bellingcat has also identified two Russian generals involved with the selection and assignment of Russian artillery specialists to commanding roles in eastern Ukraine.

This investigation was made possible due to access to raw video and audio data that is being submitted by the Ukrainian government to the International Court of Justice as part of an ongoing legal case. This data was made available to a small group of international investigative media for the purposes of independent assessment. Bellingcat and its media partners analyzed a large volume of intercepted calls from and to participants in the armed conflict located in the area of Bezimenne at the time of shelling. Bellingcat conducted detailed cross-referencing of events, names and locations, as well as metadata from the calls, to open source data, including satellite photography data, social media posts, and voice samples from public statements of some of the identified persons. A detailed analysis permitted the identification of persons and military units, and the reconstruction of events leading up to the shelling of residential areas in Mariupol.

While previous reports, including the OSCE Special Monitoring Mission (SMM) to Ukraine report from 24 January 2015, have identified that shelling of Mariupol’s residential areas came from separatist-controlled territory, Bellingcat’s investigation is the first to fully detail and identify the role of active Russian military units, as well as the direct commanding role of active Russian army officers in this military operation.

Our full report identifying the nine Russian officers involved with the military operation that led to the deaths of 30 Ukrainian civilians in Mariupol will be published later this week. Today, we are revealing the names of these individuals, along with a sampling of the telephone conversations that led to their identification.

The Russian officers who were in charge on high and lower levels of the MLRS batteries on the day of the shelling at Mariupol, or provided target instructions from another location in Eastern Ukraine, have been identified by Bellingcat as:

  • Major General Stepan Stepanovich Yaroshchuk
  • Alexander Iozhefovich Tsapliuk, call sign ‘Gorets’
  • Alexander Anatolevich Muratov
  • Maksim Vladimirovich Vlasov, call sign ‘Yugra’
  • Sergey Sergeyevich Yurchenko, call sign ‘Voronezh’
  • Alexander Valeryevich Grunchev, call sign ‘Terek’

The Russian officers who were in charge of selecting and sending artillery commanders and artillery equipment to Eastern Ukraine have been identified by Bellingcat as:

  • Colonel Oleg Leargievich Kuvshinov
  • Major General Dmitry Nikolaevich Klimenko
  • Colonel Sergey Ivanovich Lisai

The two Russian and Ukrainian militants in direct charge of the artillery units that shelled Mariupol have been identified by Bellingcat as:

  • Alexander Mikhailovich Evtody, call sign ‘Pepel’
  • Grayr Manukovich Egiazaryan, call sign ‘Shram’

Our full investigation, with biographical details on each of these men, our research process, and our analysis of the shelling attack itself, will be published later this week.

The investigation can be viewed here. 


Did the Trump Operation Hire Black Cube for Dirty Ops?

By: Denise Simon | Founders Code

The allegations are that certain former Obama officials were part of a discredit operation by Donald Trump. Hmm, perhaps… but who has been fully discredited that anyone seems to know or care about?

‘Dirty Ops’?

The Observer did not name any Trump officials or the private Israeli intelligence firm said to be involved in the plot, which was allegedly hatched when “Trump’s team contacted investigators days after Trump visited Tel Aviv a year ago,” according to the report. The plan was to “get dirt” on Rhodes and Kahl “as part of an elaborate attempt to discredit the deal,” The Observer said. Trump has suggested he will not recertify that Iran is complying with the pact when it comes up for renewal May 12. (The U.K., Russia, France and Germany also signed the deal.)

Veteran Washington foreign affairs journalist Laura Rozen told Newsweek that Kahl showed her the first email his wife got from the person, who identified herself as “Adriana Gavrilov from Reuben Capital Partners.” Rozen said she recognized Reuben Capital from a New Yorker story by Ronan Farrow that described it as a cover for Black Cube, a private Israeli spy firm reportedly hired by Hollywood mogul Harvey Weinstein to dig up dirt on the women who accused him of sexual misconduct, harassment, assault or rape.

Farrow reported Sunday on another attempt linked to Black Cube: In 2017, Rhodes’s wife, a former State Department official, received a proposal from a London-based film company called Shell Productions for a movie that would follow the personal lives of “government officials in the positions that determine war and peace” during times of geopolitical crisis, including “nuclear negotiations with a hostile nation.” She said she found the pitch “bizarre” and never responded. Farrow said two sources told him the proposal originated with Black Cube.

A former deputy assistant to president Barack Obama and national security adviser to vice president Joe Biden responded on Twitter Sunday night to reports he was targeted by the private Israeli security firm Black Cube in an attempt to discredit the 2015 Iran nuclear deal.

CONFIRMED: The Israeli intel firm Black Cube used to go after Harvey Weinstein’s accusers also targeted me & @brhodes (& our families).

Lots of new details in this new @RonanFarrow piece. https://t.co/T2ERbnYSMu

Aides to US President Donald Trump hired Black Cube to conduct an undercover campaign in order to smear Colin Kahl and Obama’s deputy national security adviser Ben Rhodes, according to a report published in the British newspaper The Observer on Saturday.

The New Yorker reported that during the summer of 2017, Black Cube agents used aliases and shell companies in an attempt to solicit information from Rhodes’s and Kahl’s wives, as well as from reporters and Iran experts who had been in contact with Obama-era officials.

Trita Parsi, a well-known expert on Iranian politics and foreign policy, said he was contacted by a Black Cube agent who claimed to be a reporter. The agent pressed Parsi for information on whether Obama officials had benefited financially from the nuclear agreement. Black Cube secretly recorded the conversation, a transcript of which was obtained by The New Yorker.

Black Cube is made up of agents “trained in Israel’s elite military and governmental intelligence units,” according to the company’s website. The same firm was hired by Hollywood producer Harvey Weinstein to discredit the women who accused him of sexual harassment and reporters who were covering the story.

The company denied that it targeted Rhodes, Kahl and others. “Black Cube has no relation whatsoever to the Trump administration, to Trump aides, to anyone close to the administration or to the Iran Nuclear deal,” it said in a statement. “Anyone who claims otherwise is misleading their readers and viewers.”

A Black Cube source told The Jerusalem Post its employees did not know Kahl.


Is Economics 101 Wrong?

By: Kent Engelke | Capitol Securities

Economics 101 dictates low employment causes higher wages. Conversely, high unemployment dictates lower wages. Perhaps Economics 101 is wrong and today is the other bookend that commenced in the late 1970s.

To remind all, wages were surging in the late 1970s as cost of living adjustments (COLAs) became embedded in wages because of higher inflation. Most economists were stymied by rising wages as unemployment was close to double digits. Treasury yields were also close to double digits and real or inflation adjusted yields were around record levels.

Fast forward to today. The unemployment rate is at 3.9% and at the lowest level since 2000. Wage inflation is benign. Similar to the above, this is inverse of what most expect. Treasury yields are nominally higher than their historical lows and real yields are around record lows.

What gives? Yes, there are signs of wage pressures in the more inclusive employment cost index that is released on a quarterly basis, but most focus on the BLS monthly print. Perhaps it is the result of a labor participation rate (LPR) that is still hovering near historical lows. Yes, job creation remains well ahead of the natural growth rate of the labor force, but the pool of available workers, workers that are not included in the data are gargantuan, the result of government policies.

As this pool shrinks, I believe wages would then begin to rise.

The volatility at the end of last week was incredible. At one time Thursday, the Dow was down almost 400 points declining to its 200 day moving average only to rebound sharply by the close to end essentially unchanged. Friday, the Dow was off over 130 points, reversed and advanced over 400 points, to end higher by 325 points.

Wow! SkyNet is in control.

Commenting about oil, WTI closed Friday around $69.75/barrel, up almost 2%, the highest level since November 2014. Crude is now up about 50% in a year and 170% since its early February 2016 lows. For the first time in many years, a nominal geopolitical premium is now becoming embedded in prices.

The estimates vary greatly as to the impact to supplies if Iranian sanctions are again levied. Some are projecting a 2 million barrel decline, while others predict 500,000 barrels. Regardless, if sanctions are reinstated, oil supplies will further tighten.

Moreover, the vast majority of non-state and state oil producing firms are commenting about the possibility of a supply shortage given the lack of infrastructure spending in large upstream facilities.

Is the oil market about to face a perfect storm, a storm that is reminiscent of the one ten and twenty years ago? I place the odds at 75%. A major difference between today and yesterday are valuations. According to Goldman Sachs, oil equity is priced at the sharpest discount to crude in history and the lowest valuation in over 50 years in both a comparative and absolute manner.

What will happen this week?

This week the economic calendar is comprised of several inflation indices, sentiment indicators and inventory data. How will the data be interpreted?

Last night the foreign markets were up. London was closed over a holiday, Paris was up 0.07% and Frankfurt was up 0.46%. China was up 1.48%, Japan was down 0.03% and Hang Sang was up 0.23%.

The Dow should open nominally higher. West Texas crude is above $70 for the first time since November 2014, as possible re-imposition of some US sanctions on Iran are now imminent. The 10-year is off 2/32 to yield 2.97%.