SYDNEY (Reuters) – A pilot and four American passengers were killed on Tuesday when a small plane crashed in to the roof of a shopping mall after taking off from an airfield outside Melbourne, Australia’s second-largest city, police said.
Sweeping political change in developed economies will put onus on active EM management
This week, the prices of the metals mostly moved sideways. There was a rise on Thursday but it corrected back to basically unchanged on Friday.
This will again be a brief Report, as yesterday was a holiday in the US.
Below, we will show the only true picture of the gold and silver supply and demand fundamentals. But first, the price and ratio charts.
The Prices of Gold and Silver
Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved sideways this week.
The Ratio of the Gold Price to the Silver Price
For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.
Here is the gold graph.
The Gold Basis and Cobasis and the Dollar Price
The price was unchanged, but the basis is up slightly and cobasis is down (i.e. gold became slightly more abundant). This is not the news dollar shorters (i.e. those betting on the gold price) want to see.
Our calculated fundamental price is all but unchanged around $1,360.
Now let’s look at silver.
The Silver Basis and Cobasis and the Dollar Price
In silver, the basis is basically unchanged but the cobasis went up a bit. The silver market got just a bit tighter, and our calculated fundamental price is up more than 30 cents to about a quarter above the market price. Not exactly “bet the farm with leverage territory”, but definitely not “short this dog” either.
Watch this space. We have some exciting data science to reveal soon.
© 2016 Monetary Metals
General Flynn's tenure in the White House was only slightly longer than that of President-elect William Henry Harrison in 1841. Actually, with just 24 days in the White House, General Flynn's tenure fell a tad short of old "Tippecanoe and Tyler Too". General Harrison actually lasted 31 days before getting felled by pneumonia.
And the circumstances were considerably more benign. It seems that General Harrison had a fondness for the same "firewater" that agitated the native Americans he slaughtered at the famous battle memorialized in his campaign slogan. In fact, during the campaign a leading Democrat newspaper skewered the old general, who at 68 was the oldest US President prior to Ronald Reagan, saying:
Give him a barrel of hard [alcoholic] cider, and… a pension of two thousand [dollars] a year… and… he will sit the remainder of his days in his log cabin.
That might have been a good idea back then (or even now), but to prove he wasn't infirm, Harrison gave the longest inaugural address in US history (2 hours) in the midst of seriously inclement weather wearing neither hat nor coat.
That's how he got pneumonia! Call it foolhardy, but that was nothing compared to that exhibited by Donald Trump's former national security advisor.
General Flynn got the equivalent of political pneumonia by talking for hours during the transition to international leaders, including Russia's ambassador to the US, on phone lines which were bugged by the CIA. Or more accurately, making calls which were "intercepted" by the very same NSA/FBI spy machinery that monitors every single phone call made in America.
Ironically, we learned what Flynn should have known about the Deep State's plenary surveillance from Edward Snowden. Alas, Flynn and Trump wanted the latter to be hung in the public square as a "traitor", but if that's the solution to intelligence community leaks, the Donald is now going to need his own rope factory to deal with the flood of traitorous disclosures directed against him.
In any event, it was "intercepts" leaked from deep in the bowels of the CIA to the Washington Post and then amplified in a 24/7 campaign by the War Channel (CNN) that brought General Flynn down.
But here's the thing. They were aiming at Donald J. Trump. And for all of his puffed up bluster about being the savviest negotiator on the planet, the Donald walked right into their trap, as we shall amplify momentarily.
But let's first make the essence of the matter absolutely clear. The whole Flynn imbroglio is not about a violation of the Logan Act owing to the fact that the general engaged in diplomacy as a private citizen.
It's about re-litigating the 2016 election based on the hideous lie that Trump stole it with the help of Vladimir Putin. In fact, Nancy Pelosi was quick to say just that:
'The American people deserve to know the full extent of Russia's financial, personal and political grip on President Trump and what that means for our national security,' House Minority Leader Nancy Pelosi said in a press release.
Yet, we should rephrase. The re-litigation aspect reaches back to the Republican primaries, too. The Senate GOP clowns who want a war with practically everybody, John McCain and Lindsey Graham, are already launching their own investigation from the Senate Armed Services committee.
And Senator Graham, the member of the boobsey twins who ran for President in 2016 while getting a GOP primary vote from virtually nobody, made clear that General Flynn's real sin was a potential peace overture to the Russians:
Sen. Lindsey Graham also said he wants an investigation into Flynn's conversations with a Russian ambassador about sanctions: "I think Congress needs to be informed of what actually Gen. Flynn said to the Russian ambassador about lifting sanctions," the South Carolina Republican told CNN's Kate Bolduan on "At This Hour. And I want to know, did Gen. Flynn do this by himself or was he directed by somebody to do it?"
We say good riddance to Flynn, of course, because he was a shrill anti-Iranian warmonger. But let's also not be fooled by the clinical term at the heart of the story. That is, "intercepts" mean that the Deep State taps the phone calls of the President's own closest advisors as a matter of course.
This is the real scandal as Trump himself has rightly asserted. The very idea that the already announced #1 national security advisor to a President-elect should be subject to old-fashion "bugging," albeit with modern day technology, overwhelmingly trumps the utterly specious Logan Act charge at the center of the case.
As one writer for LawNewz noted regarding acting Attorney General Sally Yates' voyeuristic pre-occupation with Flynn's intercepted conversations, Nixon should be rolling in his grave with envy:
Now, information leaks that Sally Yates knew about surveillance being conducted against potential members of the Trump administration, and disclosed that information to others. Even Richard Nixon didn’t use the government agencies themselves to do his black bag surveillance operations. Sally Yates involvement with this surveillance on American political opponents, and possibly the leaking related thereto, smacks of a return to Hoover-style tactics. As writers at Bloomberg and The Week both noted, it wreaks of 'police-state' style tactics. But knowing dear Sally as I do, it comes as no surprise.
Yes, that's the same career apparatchik of the permanent government that Obama left behind to continue the 2016 election by other means. And it's working. The Donald is being rapidly emasculated by the powers that be in the Imperial City due to what can only be described as an audacious and self-evident attack on Trump's Presidency by the Deep State.
Indeed, it seems that the layers of intrigue have gotten so deep and convoluted that the nominal leadership of the permanent government machinery has lost track of who is spying on whom. Thus, we have the following curious utterance by none other than the Chairman of the House Intelligence Committee, Rep. Devin Nunes:
'I expect for the FBI to tell me what is going on, and they better have a good answer,' he told The Washington Post. 'The big problem I see here is that you have an American citizen who had his phone calls recorded.'
Well, yes. That makes 324 million of us, Congressman.
But for crying out loud, surely the oh so self-important chairman of the House intelligence committee knows that everybody is bugged. But when it reaches the point that the spy state is essentially using its unconstitutional tools to engage in what amounts to "opposition research" with the aim of election nullification, then the Imperial City has become a clear and present danger to American democracy and the liberties of the American people.
As Robert Barnes of LawNewz further explained, Sally Yates, former CIA director John Brennan and a large slice of the Never Trumper intelligence community were systematically engaged in "opposition research" during the campaign and the transition:
According to published reports, someone was eavesdropping, and recording, the conversations of Michael Flynn, while Sally Yates was at the Department of Justice. Sally Yates knew about this eavesdropping, listened in herself (Pellicano-style for those who remember the infamous LA cases), and reported what she heard to others. For Yates to have such access means she herself must have been involved in authorizing its disclosure to political appointees, since she herself is such a political appointee. What justification was there for an Obama appointee to be spying on the conversations of a future Trump appointee?
Consider this little tidbit in The Washington Post. The paper, which once broke Watergate, is now propagating the benefits of Watergate-style surveillance in ways that do make Watergate look like a third-rate effort. (With the) FBI 'routinely' monitoring conversations of Americans…… Yates listened to 'the intercepted call,' even though Yates knew there was 'little chance' of any credible case being made for prosecution under a law 'that has never been used in a prosecution.'
And well it hasn't been. After all, the Logan Act was signed by President John Adams in 1799 in order to punish one of Thomas Jefferson's supporters for having peace discussions with the French government in Paris. That is, it amounted to pre-litigating the Presidential campaign of 1800 based on sheer political motivation.
According to the Washington Post itself, that is exactly what Yates and the Obama holdovers did day and night during the interregnum:
Indeed, the paper details an apparent effort by Yates to misuse her office to launch a full-scale secret investigation of her political opponents, including 'intercepting calls' of her political adversaries.
So all of the feigned outrage emanating from Democrats and the Washington establishment about Team Trump's trafficking with the Russians is a cover story. Surely anyone even vaguely familiar with recent history would have known there was absolutely nothing illegal or even untoward about Flynn's post-Christmas conversations with the Russian Ambassador.
Indeed, we recall from personal experience the thrilling moment on inauguration day in January 1981 when word came of the release of the American hostages in Tehran. Let us assure you, that did not happen by immaculate diplomatic conception — nor was it a parting gift to the Gipper by the outgoing Carter Administration.
To the contrary, it was the fruit of secret negotiations with the Iranian government during the transition by private American citizens. As the history books would have it because it's true, the leader of that negotiation, in fact, was Ronald Reagan's national security council director-designate, Dick Allen.
As the real Washington Post later reported, under the by-line of a real reporter, Bob Woodward:
Reagan campaign aides met in a Washington DC hotel in early October, 1980, with a self-described 'Iranian exile' who offered, on behalf of the Iranian government, to release the hostages to Reagan, not Carter, in order to ensure Carter's defeat in the November 4, 1980 election.
The American participants were Richard Allen, subsequently Reagan's first national security adviser, Allen aide Laurence Silberman, and Robert McFarlane, another future national security adviser who in 1980 was on the staff of Senator John Tower (R-TX).
To this day we have not had occasion to visit our old friend Dick Allen in the US penitentiary because he's not there; the Logan Act was never invoked in what is surely the most blatant case ever of citizen diplomacy.
So let's get to the heart of the matter and be done with it. The Obama White House conducted a sour grapes campaign to delegitimize the election beginning November 9th and it was led by then CIA Director John Brennan.
That treacherous assault on the core constitutional matter of the election process culminated in the ridiculous Russian meddling report of the Obama White House in December. The latter, of course, was issued by serial liar James Clapper, as national intelligence director, and the clueless Democrat lawyer and bag-man, Jeh Johnson, who had been appointed head of the Homeland Security Department.
Yet on the basis of the report's absolutely zero evidence and endless surmise, innuendo and "assessments", the Obama White House imposed another round of its silly school-boy sanctions on a handful of Putin's cronies.
Of course, Flynn should have been telling the Russian Ambassador that this nonsense would be soon reversed!
But here is the ultimate folly. The mainstream media talking heads are harrumphing loudly about the fact that the very day following Flynn's call — Vladimir Putin announced that he would not retaliate against the new Obama sanctions as expected; and shortly thereafter, the Donald tweeted that Putin had shown admirable wisdom.
That's right. Two reasonably adult statesman undertook what might be called the Christmas Truce of 2016. But like its namesake of 1914 on the bloody no man's land of the western front, the War Party has determined that the truce-makers shall not survive.
The Donald has been warned.
In the four weeks since Donald Trump’s inauguration there have been a record number of human trafficking arrests – including the largest bust in US history which received virtually no MSM attention. In total, over 1500 suspects have been taken down, including high profile serial child molester Jerry Sandusky’s adopted son, Jeffrey Sandusky, who was arrested a week ago on charges of sexually assaulting two minors and sending Anthony Weiner-esque texts.
And it’s way more than just domestic busts in the United States; two days before the Clinton Foundation pulled out of Haiti, a sting rescued at least 31 victims of human trafficking right next to where Bill and Hillary spent their honeymoon. There have also been international busts in Quebec, a huge takedown in Japan, and another in Ghana. A little over two weeks ago, a fifth of the “dark web” was taken down – around half of which was related to human trafficking and pedophilia.
Even before Trump’s inauguration but after the US election, Norway (around the same time they eliminated almost all contributions to the Clinton Foundation) conducted a gigantic takedown of a child-porn ring, which the New York Times initially reported on but then deleted from their website. Not surprising, considering the NYT’s history of defending pedophilia – which I’m sure has nothing to do with CEO Mark Thompson’s career spent covering up or otherwise “normalizing” the heinous proclivity.
The latest revelation comes from Wiltshire, UK police chief Mike Veale, who sources say is certain that long-suspected former British Prime Minister – Sir Edward Heath, was in fact a huge pedophile; allegations Veale believes are “120 percent” genuine:
More than 30 people have come forward with claims of sexual abuse by the former Conservative Prime Minister, according to well-placed sources. And they are said to have given ‘strikingly similar’ accounts of incidents to Wiltshire Police – even though the individuals are not known to each other.
Astonishingly, Mr Veale is also understood to support claims that Sir Edward’s alleged crimes were reported to police years ago but covered up by the Establishment.
The investigation into Sir Edward, called Operation Conifer, was set up in 2015 in the wake of the Jimmy Savile scandal.
Veale, in response to the leaked “120 percent” headline, called the speculation “unhelpful,” though he did not deny he said it:
“In relation to the recent unhelpful speculation regarding the veracity of the allegations made, let me once again be clear, it is not the role of the police to judge the guilt or innocence of people in our criminal justice system. –The Guardian
Let’s take a quick look at the Savile case that NYT boss Mark Thompson swept under the rug, and which launched Veale’s investigation:
Indeed, it looks like it’s open season on human traffickers and child predators around the world. If all of these recent busts are Trump’s way of setting the stage for those high profile arrests we keep hearing whispers about – it’s a brilliant strategy, even if the MSM has been deafeningly quiet on the topic.
This official ad from Trump’s Department of Homeland Security and ICE is telling:
— ZeroPointNow (@ZeroPointNow) February 5, 2017
At this rate I think it’s safe to say we can all look forward to more episodes of To Catch a Pedator…
Obesity is a ‘big’ (pardon the pun) problem in the Pacific Islands. In fact, a recent World Bank study found that over half the adult population in 16 of the 17 Pacific Island countries and territories were obese while over 75% of the population was obese in 11 of those counties.
So what do you do when you just can’t count on citizens to make sound judgements about their own personal health decisions? Well, you call in the Nanny State to ban sodas and sugary snacks, of course…which, according to the New York Times, is exactly what the tiny Pacific island nation of Vanuatu is doing.
While many governments struggle to ban soda to curb obesity, the tiny Torba Tourism Council in the remote Pacific island nation of Vanuatu is planning to outlaw all imported food at government functions and tourist establishments across the province’s 13 inhabited islands.
Provincial leaders hope to turn them instead into havens of local organic food. The ban, scheduled to take effect in March, comes as many Pacific island nations struggle with an obesity crisis brought on in part by the overconsumption of imported junk food.
“We want to ban all other junk food from this province,” Luke Dini, the council’s chairman and a retired Anglican priest, said in a telephone interview from Torba. He said the province had about 9,000 residents and got fewer than 1,000 tourists a year, mostly Europeans.
Not surprisingly, so-called “public health experts” have praised Vanuatu’s ban on imported food while blasting international consumer goods companies for “exploiting these nations by providing a food supply that is not, in the long term, better for health” while “decimating” local populations.
Public health experts who study the island nations of the Pacific welcomed the ban, saying that bold measures were necessary for an impoverished and isolated region of 10 million people — one where the cost of sending legions of patients abroad for dialysis treatment or kidney transplants is untenable.
“Imagine if 75 million Americans had diabetes — that’s the scale of the epidemic we’re talking about in Vanuatu,” Roger Magnusson, a professor of health law and governance at Sydney Law School in Australia, said in an email.
“Can anyone seriously say that Vanuatu doesn’t have the right to exercise its health sovereignty in every way possible to protect its population from an epidemic of that scale?” he added.
“It is so wrong what is being done to exploit these nations by providing a food supply that is not, in the long term, better for health,” said Elaine Rush, a professor of nutrition at the Auckland University of Technology in New Zealand who has studied health problems in the Pacific islands. She described the effect that the health crisis was having on families there as “decimating.”
Of course, there are just a couple of small problems with the “evil corporation” theory as presented by “public health experts” and the New York Times. Unfortunately, while the “health experts” would like for you to believe that obesity is a new problem plaguing the people of the Pacific islands, as Wendy Snowden of the World Health Organization points out, in reality obesity rates on these islands were simply “higher to start with.” Moreover, as Snowden also notes, one other small problem is that no level of “taxes and prohibitions” on sugary food products has “been able to demonstrate reductions in obesity prevalence.”
Still, Dr. Snowdon said, the taxes and prohibitions on drinks in the Pacific islands — along with education, food labeling and school-nutrition programs — have not reduced the region’s overall incidence of obesity or its associated health problems.
“No country in the world has been able to demonstrate reductions in its obesity prevalence, so we’re not that different,” she said. “It’s just that our levels are higher to start with.”
But rest assured, dear citizens of the world, that your Nanny State’s aggressive, invasive policies stripping you of your basic personal liberties are intended for your own good and are in no way a meaningless attempt to cram their liberal agendas down your throat at all costs, irrespective of scientific data proving their complete lack of effectiveness in achieving their stated goals.
I think the U.S. citizenry is being afflicted by a sort of mass insanity at the moment. There are no good outcomes if this continues. As a result, I feel compelled to provide a voice for those of us lost in the political wilderness. We must persevere and not be manipulated into the obvious and nefarious divide and conquer tactics being aggressively unleashed across the societal spectrum. If we lose our grounding and our fortitude, who will be left to speak for those of us who simply don’t fit into any of the currently ascendant political ideologies?
From the post: Lost in the Political Wilderness
Rather than focus its journalistic energy on chronicling the economic insecurity plaguing so many of our fellow Americans, the billionaire-owned corporate media appears entirely obsessed with chattering endlessly about Russia conspiracy theories and domestic coup plots. Instead of looking in the mirror and admitting how its countless errors and propaganda pushing led to multiple humanitarian disasters over the last couple of decades, the oligarch-owned mainstream media insist upon a narrative that Trump the individual is at the root of our problems, as opposed to an entrenched executive branch with excessive power. This is because the mainstream media isn’t actually concerned about our cancerous, systemic metastasizing statism, it merely doesn’t want Trump in charge of it. I, on the other hand, want to dismantle that unconstitutional state entirely and transfer power to the American people where it belongs — self-government. Does anyone actually think for a second the media would be this adversarial if Hillary won?
This weekend’s article by Nicholas Kristof in The New York Times represents a sort of coming out party for the billionaire-owned, corporate media. More than anything else I’ve seen, it perfectly demonstrates how completely disconnected and worthless billionaire-owned media truly is. It’s the height of absurdity that these media organizations, owned by billionaires or giant corporate conglomerates, are playing the victim in all this when they’ve been the world’s primary abuser for the entire 21st century.
You can be a staunch defender of the free press and the 1st Amendment, and at the same time point out that the billionaire-owned media has failed us. This is my position, and Trump’s election hasn’t changed that. The handful of corporations and billionaires who control the mainstream press does not = “the press.” They (and the deep state) are currently trying to convince the public that they’re the only ones standing between you and fascism. This is complete stupidity, and if we fall for it, we will get what we deserve.
The billionaire-owned media is far more complicit in creating the imperial Presidency than Donald Trump, he merely figured out a way to get control of it. Now these same charlatans are pretending to put out a fire they themselves started, and want to be celebrated for being so courageous. This is eerily similar to the scam pulled off by the Federal Reserve during and after the financial crisis.
With that introduction out of the way, let’s take a look at a few excerpts from the mind-bogglingly explicit piece in this past weekend’s New York Times, titled brazenly enough, How Can We Get Rid of Trump?
Maybe things will settle down. But what is striking about Trump is not just the dysfunction of his administration but also the — vigorously denied — allegations that Trump’s team may have cooperated with Vladimir Putin to steal the election. What’s also different is the broad concern that Trump is both: A) unfit for office, and B) dangerously unstable. One pro-American leader in a foreign country called me up the other day and skipped the preliminaries, starting with: “What the [expletive] is wrong with your country?”
So let’s investigate: Is there any way out?
Trump still has significant political support, so the obstacles are gargantuan. But the cleanest and quickest way to remove a president involves Section 4 of the 25th Amendment and has never been attempted. It provides that the cabinet can, by a simple majority vote, strip the president of his powers and immediately hand power to the vice president. The catch is that the ousted president can object, and in that case Congress must approve the ouster by a two-thirds vote in each chamber, or the president regains office.
It’s never been attempted in the history of the country, but let’s promote it anyway!
The 25th Amendment route is to be used when a president is “unable” to carry out his duties. I asked Laurence Tribe, the Harvard professor of constitutional law, whether that could mean not just physical incapacity, but also mental instability. Or, say, the taint of having secretly colluded with Russia to steal an election?
Tribe said that he believed Section 4 could be used in such a situation.
“In the unlikely event that Pence and a majority of Trump’s bizarre cabinet were to grow the spine needed to do the right thing with the process set up by that provision, we would surely be in a situation where a very large majority of the public, including a very substantial percentage of Trump’s supporters, would back if not insist upon such a move,” Tribe said. “In that circumstance, I can’t imagine Trump and his lawyers succeeding in getting the federal courts to interfere.”
As a reminder, here’s an example of the intellectual and ethical wasteland known as Laurene Tribe’s mind as of late:
Now back to Kristof.
The better known route is impeachment. But for now it’s hard to imagine a majority of the House voting to impeach, and even less conceivable that two-thirds of the Senate would vote to convict so that Trump would be removed. Moreover, impeachment and trial in the Senate would drag on for months, paralyzing America and leaving Trump in office with his finger on the nuclear trigger.
In Kristof’s mind, a major downside to pursuing impeachment is that it won’t get rid of Trump fast enough. Is this really a paper the public can remotely trust to report on the country’s problems in a fair manner?
Now here’s where it starts to get simply comical. Kristoff writes:
Some people believe that the 2018 midterm elections will be so catastrophic for the G.O.P. that everyone will be ready to get rid of him. I’m skeptical. In the Senate, the map is disastrous for Democrats in 2018: The Republicans will be defending only eight Senate seats, while Democrats will in effect be defending 25.
So while Democrats can gnash their teeth, it’ll be up to Republicans to decide whether to force Trump out. And that won’t happen unless they see him as ruining their party as well as the nation.
Perhaps instead of “gnashing their teeth,” Democrats could come up with a coherent platform that doesn’t revolve around worshiping Wall Street.
Finally, here’s how Kristoff ends his pathetic plea for overthrowing Trump.
And what does it say about a presidency that, just one month into it, we’re already discussing whether it can be ended early?
No Nicholas, “we” aren’t already discussing it. You are. You and your media peers. Which brings me to the most infuriating aspect of what is happening in American discourse today. What is someone like me, who dislikes Trump, but dislikes the corporate media even more, supposed to do?
This is the uncomfortable position I find myself in today, and if I’m there, millions of others are there as well. Trump understands this, which is why he continues his unrelenting attacks on elements of the corporate press. Personally, my dislike of Trump would be far more acute if not for my total disdain for the billionaire-owned media. Journalists are supposed to be adversarial toward power generally, not pick and choose which powerful figures to challenge based on political ideology. The corporate media has clearly failed the country, thus Trump is being politically savvy by picking a fight with it. As I noted last week on Twitter:
I've said this forever.
If Trump targets elitist institutions, he will win.
If he targets average people, he will lose.
— Michael Krieger (@LibertyBlitz) February 17, 2017
Once again, the corporate media is proving its worthlessness by making everything about a man, as opposed to the systemic disaster that is the oligarch-controlled society we live in. The current President isn’t charismatic enough, and doesn’t espouse the right platitudes when he bombs Muslim women and children. That’s the media’s red line apparently. If it sounds like I’m against everything, there’s a reason. Our culture is deranged and corporate media deserves a lot of the blame.
Finally, here’s an article published by Forbes last year to get you up to speed on what we’re up against: These 15 Billionaires Own America’s News Media Companies.
Billionaires don’t buy media outlets to make money, they already have that. They buy them to manipulate public opinion.
Considering that in the past 3 months the only daily topic of relevance for the media has been “Donald Trump” both in the US and abroad, one would assume that when it comes to global policy uncertainty the primary source would be, record S&P 500 paradoxically notwithstanding, the United States. One would also be wrong, because while Trump seemingly remains the only topic worthy of discussion blanketing the airwaves, as the following chart from Goldman demonstrates, it has been China where policy uncertainty has stealthily exploded in the past three months according to policyuncertainty.com, while making virtually no new headlines.
But how is it possible that China, which is seemingly far more “concerning” at this moment than it was a year ago when fears about Chinese financial conditions and devaluation led to global market selloff and pushed the S&P into correction, has had virtually no impact on risk assets so far in 2017: clearly either the chart above, or the market, is wrong.
Conveneintly it is the same Goldman which has published an exhaustive report laying out the key risks to China’s growth, many of which have been discounted by the market which erroneously assumes that just because the world went though a China “scare” period one year ago, that the world’s second biggest economy remains contained. Far from it.
For those pressed for time, below is the summary of Goldman’s “Risks To China’s growth In The Year of the rooster” report, from the team of MK Tan:
* * *
Those interested in the details behind the report are encouraged to read on for the key select excerpts:
A year ago, markets were abuzz over the possibility of a financial calamity in China and/or a “big deval” in the currency. Market pricing implied the likelihood of substantial equity price moves and CNY depreciation (Exhibit 1). Fears of a China crisis reverberated through global markets, tightening financial conditions around the world and pushing the US Federal Reserve to postpone its plans for further rate hikes.
Exhbit 1: China’s equity and currency markets were both under stress a year ago
Chinese policymakers wrestled with challenges throughout 2016, but large and sustained policy stimulus eventually fostered recovery. Fiscal and regulatory easing, alongside continued rapid credit growth, underpinned strong growth in infrastructure spending and a rebound in cyclical sectors like property and motor vehicles. Real GDP growth came in on target (6.7% versus a 6.5%-7.0% target range), and alternative measures of activity also improved (Exhibit 2). Our China Current Activity Indicator bottomed out at 4.3% (see dark line in Exhibit 2; this is measured on a three-month, three-month annualized basis) in early 2015, recovered to the mid-5% range last year, and is now running at 6.9%. Heavy industry, as proxied by our physical output measure (gray line in Exhibit 2), has seen an even more pronounced reacceleration.
Exhibit 2: After a tough 2015, our measures of Chinese growth accelerated in 2016
Now, while forecasters still expect a little slowing in growth and some further depreciation in the renminbi, the focus is much more on policy in the US and Europe. In the US, President Trump’s tweets have spawned a cottage industry of interpreters vying to understand where policy may head in the coming year. Across the Atlantic, the road map for “Brexit” as well as continued uncertainty about politics in the rest of the Eurozone occupies many market participants. While we subscribe to the view that Chinese policymakers will manage through the year with reasonably high growth, it is still prudent to review the risks ahead.
After the roller coaster of the past year, most observers expect Chinese policymakers to make significant efforts to keep growth stable this year and try to reduce volatility in financial markets. Indeed, commentary following December’s Central Economic Work Conference suggested that “controlling financial risks” may even take precedence over the growth target—a sensible ordering of priorities, in our view. Still, even if the Communist Party of China (CPC)’s long-term commitment to double income in this decade—as promulgated by the previous administration and reiterated last year by many senior officials—is pushed out by a year or two, it continues to carry some weight. We therefore expect the growth target to be near 6.5% for 2017, and policymakers to accept only limited flexibility around this target (sub-6% GDP growth is unlikely to be acceptable). A special motivation for minimizing market and economic “noise” in 2017 is the upcoming 19th Party Congress and associated leadership reshuffling, which will involve the majority of members in the Politburo and Standing Committee of the CPC.
Global financial markets seem to have bought into the notion that China-related risks will be managed, shrugging off China’s significant bond and FX market volatility in recent months. Substantial capital outflows and CNY depreciation against the USD continued in late 2016 but have not (yet) resulted in substantial tightening in global financial conditions, unlike last year (Exhibit 3).
Exhibit 3: Less spillover from China to US financial conditions recently
The aforementioned improvement in growth, alongside clearer messages from policymakers (publicly rejecting a large devaluation and holding the trade-weighted renminbi stable since mid-2016) and friendlier global conditions (a more dovish Fed in particular) have all helped.
What could bring China fears to the fore again, and cause the markets to change their assessment?
We explore some possible paths to a “hard landing” in China. (For the purposes of this discussion we define a “hard landing” as a drop of at least 4pp in our China Current Activity Indicator within one year—on this basis we’ve had a few near misses in the last few years, most recently in early 2015, but no hard landing. From the current growth pace, this would imply a drop in CAI to the mid-2% range or below.) We divide our review into external shocks and then domestic vulnerabilities, although clearly the two interact with each other. We emphasize these risks are not part of our baseline scenario for China in 2017, though they are more than mere “tail risks”.
Domestic vulnerabilities—credit and policy miscalibration
We see two principal risks domestically. The first is an abrupt end to China’s credit boom.
A widespread perception of a “policy put”, implicit guarantees to state enterprises and governments at all levels, and generally strong growth have underpinned the stability of the financial system. They have also encouraged rapid growth in leverage, including a reacceleration in 2015-16 (Exhibit 4). China’s post-GFC credit boom has taken debt levels well beyond those of EM peers (Exhibit 5).
Exhibit 4: Credit growth has reaccelerated since 2015 and is well in excess of nominal GDP growth
Exhibit 5: China’s debt level well above EM peers
Sustained debt booms typically lead to slower growth, greater financial volatility, and heightened risk of a financial crisis. Looking at more than a century of historical data, we found that a “large domestic debt boom” lasting at least 7 years where the debt-to-GDP ratio increases by over 52pp—China’s easily qualifies—is typically followed by a 2pp slowdown in growth and a heightened risk of financial crisis (Exhibits 6 and 7).
Exhibit 6: Real GDP growth decelerates after debt booms: Real GDP growth relative to average during debt boom period
Exhibit 7: Financial crises common but not inevitable in large-country domestic debt booms
Another way to look at the potential growth consequences is to estimate the negative “credit impulse” if credit growth were to slow to half its current pace. Using our past analysis of the relationship between credit and growth, and assuming a deceleration over one year, this would slow growth by 2-3pp or more (a more gradual deceleration would spread this growth hit over a longer period).
We have seen credit booms end because of intentional tightening (Japan, where policymakers raised interest rates and imposed credit controls), external shocks (capital outflows in the Asia Financial Crisis), or to some extent collapsing under their own weight (the United States, where rising defaults led to a vicious cycle of tighter credit, falling asset prices, and weaker growth). Similarly, a structural break in China’s credit expansion—a sharp tightening in credit availability—could occur because of a deliberate policy shift or because imbalances have simply grown too large to be sustained (more on both below). Regardless of the trigger, a supply-driven tightening in credit would have highly negative consequences for growth.
Chinese policymakers are trying to avoid this sort of sharp pullback. Perhaps with the US experience in mind, they have been particularly attentive to “shadow banking” risks, recently taking steps to regulate off-balance sheet activities such as wealth management products, and to increase the cost of repo financing that is often used to fund shadow banking activity, even at the cost of prompting a significant bond market selloff in late 2016. In this context, our forecast remains for a “bumpy deceleration” in growth rather than a hard landing, though the longer the credit boom continues, the more difficult it will be to guide the economy to a soft landing.
The second domestic risk is a major policy tightening. This could be intentional or unintentional, although we view the latter as much more plausible.
Chinese policymakers’ growth goals appear increasingly likely to conflict with supply-side constraints. Historically, the growth target was a “policy put” that was out of the money—a reassurance that growth would not be allowed to drop too far. However, in recent years the target appears to have become a binding constraint on policy. Actual growth is near the target instead of well above it (Exhibit 8), and our estimates suggest potential growth is slightly lower (near or below 6%).
To meet the GDP growth targets, credit growth has boomed, as noted in the previous section, and a key driver of demand for that credit has been a large increase in the broadly-defined fiscal deficit (Exhibit 9). Indeed, a portion of the fiscal expansion has been underwritten by the central bank itself in the form of rising credit to the banking sector (e.g., “pledged supplementary lending” to policy banks such as CDB; see Exhibit 10).
Attempting to boost growth above its potential rate for a sustained period is likely to lead to rising inflation and/or unsustainable asset price appreciation. We have already seen a large run-up in housing prices, substantial capital outflow pressures, and a sharp turnaround in producer prices (although we would attribute the latter primarily to CNY depreciation and upstream supply-side constraints rather than demand stimulus). As yet, CPI inflation is modest (Exhibit 11), but inflation could eventually force more difficult tradeoffs—and possibly a harsh policy tightening–if growth targets are not tempered further.
With growth in the target range for now, policymakers have begun tightening on a number of fronts to address these risks:
The steps thus far look like “targeted tightening” designed to limit risks without too much damage to economic growth. For policymakers to cut their growth aspirations significantly and tighten very aggressively, other economic challenges such as inflation or capital outflows would have to get much worse, in our view.
Exhibit 8: Policymakers have kept real GDP growth on target…
Exhibit 9: …but fiscal support has reached unprecedented levels
Exhibit 10: PBOC and banking sector have helped finance stimulus
Exhibit 11: PPI rebounded sharply, but CPI inflation still modest
Even if policymakers do not intend to slow growth sharply, there is always a risk that they do so accidentally. The past few years have featured numerous occasions where policy tightening generated bigger effects (either in financial conditions or the real economy) than expected. Examples include the mid-2013 spike in repo rates (Exhibit 12), volatility in the equity markets around policy interventions (such as the introduction of the “circuit breaker” in early 2016), and of course the ructions in global currency and equity markets around the small renminbi devaluations in August 2015 and early 2016. Late last year, modest tightening by PBOC contributed to a significant backup in the bond market (Exhibit 13). In the real economy, efforts to reform local government finances slowed investment and heavy industry activity in late 2014 and early 2015, prompting a reversal in the spring of 2015 and substantial easing thereafter.
Exhibit 12: Sharp repo spikes in earlier years; moderate increase in volatility recently
Exhibit 13: Recent bond market backup ended a three-year rally
The biggest vulnerabilities to unintended tightening are probably in the less formal areas of off-balance sheet spending (on the fiscal side) and non-bank credit extension (on the monetary side). On-budget fiscal policy is relatively transparent and controllable, but how local governments will respond to changing incentives—including anticorruption efforts, shifts in performance criteria, and changing availability of credit—is harder to predict. Likewise, policymakers have considerable influence on direct lending by large state banks, but less so on other bond market participants or “shadow banking” entities. This is especially true when multiple regulators/policymakers may be acting in a manner that is not completely coordinated. A particularly big challenge is how to unwind the perception of implicit guarantees on the debt of many SOEs and local governments’ financing vehicles without precipitating a credit crunch.
In summary, we see a policy tightening “accident” as a key domestic risk. Credit expansions can buckle under their own weight as leveraged asset prices rise to unsustainable levels and rising defaults prompt a reversal in credit availability. But with policymakers attempting to manage both housing prices and defaults directly, we think the central issue in the year ahead is policy calibration. Policymakers clearly do not want the economy to slow sharply, particularly ahead of the leadership transition later this year. At the same time, they need to address some of the imbalances in the economy to limit future volatility. Getting the balance right is particularly challenging given the leverage already in the system. Warning signs of overtightening could come from a large pullback in fiscal activity (Exhibit 9), a sharper spike in short-term interest rates (Exhibit 12), a widening in credit spreads (Exhibit 13; this might occur for example because of a reassessment of the value of implicit guarantees), or any sign that polices were causing an abrupt seizure in broad credit availability (Exhibit 4).
* * *
Potential shocks from abroad—export slump or hawkish Fed
We see two main potential shocks from abroad that could conceivably cause a “hard landing” in China:
First is a sharp decline in export demand… Despite the rapid growth of domestic demand and services, exports remain an important pillar of China’s economy. In recent years, 15-20% of Chinese value-added was dependent on demand outside the country. Although this proportion has been declining, China remains sensitive both to global growth shocks and to any lurch towards protectionism in developed markets, particularly the US.
…either because of global growth… The single most important driver of Chinese exports is the pace of domestic demand growth in its trading partners. Our analysis suggests that Chinese real export growth moves slightly more than one-for-one with foreign demand growth,after accounting for exchange rate moves and commodity prices. With an export-to-GDP ratio of slightly over 20%, it would clearly take a very large shock to directly cause a “hard landing” in China. It took the global financial crisis for an external shock to slow growth by 4pp on its own (Exhibit 14). Of course, weaker external demand could have indirect effects on domestic challenges also (e.g., by increasing non-performing loans and credit stresses, or by leading to greater FX outflows). However, weaker external demand isn’t our base-case scenario; on the contrary, global activity has been accelerating and we expect at least a modest improvement in domestic demand growth in developed markets in 2017.
…or increased trade barriers. In the wake of the US election, the more likely risk to export demand comes from protectionist measures on the part of China’s trading partners. China benefited enormously from the reduction in trade barriers following its entry to the World Trade Organization in 2001 (Exhibit 15), and clearly would be adversely impacted from any backsliding in this area.
Exhibit 14: Export shock would need to be GFC-sized to cause hard landing on its own
Exhibit 15: Chinese export shares have leveled off since the GFC
More substantial US actions would include across-the-board tariffs on Chinese imports (Trump advisor Peter Navarro has proposed 45%) or a “border-adjusted tax,” which would effectively be a tariff on imports from all countries. These could potentially have meaningful growth impacts, particularly when second-round effects of retaliatory tariffs are taken into consideration. Still, while our analysis suggests that tariffs in the single or low double-digits will certainly slow growth, our models do not suggest a magnitude approaching our 4pp “hard landing” threshold in most scenarios that we find plausible. This is particularly true in 2017, since we think the new US administration would be unlikely to apply large tariffs to China or implement a border-adjusted tax before lengthy negotiation and debate.
2. Fed tightening. The pace of Fed hikes in 2017 will be an important determinant of external pressures. More rapid Fed hikes would raise interest differentials and likely result in a stronger USD. Chinese policymakers would then face the choice of seeing their own currency appreciate on a trade-weighted basis (and thereby losing competitiveness), or depreciating against the USD (potentially exacerbating capital outflow pressures). A stronger dollar would also be unhelpful for regional growth. We think Fed and dollar pressures are an important risk in 2017 and beyond, though the gap between market pricing of rate hikes (close to two hikes for the year) and our US team’s view of three rate hikes for the year has closed as markets have priced in better growth and inflation outlook post-election.
However, it is important to note there is an automatic stabilizer of sorts. To the extent outflows or the CNY move are viewed by markets as disorderly, or having the potential to become so, we could revisit the experience of August 2015 and January 2016 where US financial conditions tightened (USD strength/equity weakness), causing the Fed to back off and reducing the pressure that created the concern in the first place. US policymakers certainly have no interest in seeing a “hard landing” in China’s economy, and have been responsive to financial conditions. Clearly, however, this process would be damaging to risk assets initially, as it was in August 2015 and early 2016.
Taken together, while external conditions could prove more difficult in some respects in 2017, we do not think that they will be the fundamental triggers of a “hard landing” in China in 2017. Global growth appears healthy at the moment, with our Global Leading Indicator recently marking an 6-year high. And while we expect the Fed to tighten and trade policy to become less friendly to imports from China, we do not think the magnitude of these changes will do much damage to 2017 growth as a whole.
A more challenging external shock would be a combination of a big protectionist move by the United States and a hawkish shift by the Fed (perhaps reacting to the growth and inflationary consequences of tighter US trade policy). This could result in a substantial blow to Chinese growth, perhaps magnified by interactions with China’s domestic imbalances. Still, as the new administration is still making key personnel appointments in trade-related areas, and we expect the Fed to wait until June for its next hike, this is probably a bigger risk for 2018 (or perhaps late 2017) than for most of this year.
* * *
Policy buffers large but eroding
It’s important to point out that Chinese policymakers still have large—though shrinking—policy buffers relevant to both domestic and external shocks.
External policy buffers include:
On the domestic side, key resources available to policy makers are:
As policymakers spend down this “ammunition”, the market and economic reactions to shocks could become more volatile.
* * *
Conclusion: Key risks and their transmission
In conclusion, we see the biggest risks in China centering on the country’s rising credit imbalances, with mis-calibration of policy or a sharp external shock as possible triggers of a sharp tightening in credit conditions and “hard landing” in growth. To reiterate, this is not our base case for 2017 (and not yet for 2018 either, for that matter). But it deserves close monitoring, and we will be watching the fiscal stance, credit market conditions, and other metrics—as well as comments by policymakers—to update our assessments of these risks.
Should China’s economy slow significantly, it would clearly have effects throughout the region, transmitted via three key channels:
Our past work has suggested that the biggest effects of weaker Chinese growth would come in Korea, Taiwan, and Southeast Asia, where most economies would feel the impact through two or all three of these channels.
Since President Donald Trump won the presidential election in November, there’s been an explosion of “fake-news” checker sites, some cloaked behind a veil of anonymity.
In some cases, Americans really have fallen for “fake news.” Just days ago, 20th Century Fox apologized for creating “fake news” sites – such as as the Houston Leader, the Salt Lake City Guardian, Sacramento Dispatch, the New York Morning Post and Indianapolis Gazette – as part of a promotional campaign for its psychological thriller, “A Cure for Wellness.”
But on the heels of media hysteria over the trend, now it seems everyone claims to be a foremost expert on the topic of spotting “fake news.”
“Trust us,” they say.
“We’ll help you navigate Facebook and filter out the fake news stories,” they promise.
But just who are these self-appointed gatekeepers who claim to be the ultimate arbiters of what is or is not “fake news”?
WND found “fact-checker” sites run by:
But most of the self-appointed “fact-checker” sites had one thing in common: President Trump – and the news sites that dare to give him a fair shake – are overwhelmingly their favorite targets.
The websites often show an obvious bias against conservative-leaning outlets. And many fail to include clear explanations of the criteria they use for determining whether a news site is legitimate. Other “experts” offer little or no biographical information establishing their qualifications for making judgments about journalism quality.
WND has compiled the following list of the Top 9 “fakest ‘fake-news’ checkers.”
On Jan. 25, Healy tweeted his chart of news organizations and the message, “Stop #FakeNews, check out this news guide @ThePigscast #Pigscast #alternative facts.”
He ranked the news organizations as “Garbage Left (not worth it),” “Hyper-Partisan Left (To Confirm Your Beliefs),” “Leans Left (Not Horrible),” “Neutral (What Journalism Should Be),” “Leans Right (Not Horrible),” “Hyper-Partisan Right (To Confirm Your Beliefs)” and “Garbage Right (Not Worth It).”
Healy labeled WND, the Drudge Report, the Blaze, Accuracy in Media, the Family Research Council, Breitbart and other organizations as “Garbage Right (Not Worth It).”
However, Healy considers the following to be “Neutral (What Journalism Should Be)”: Reuters, USA Today, the Texas Tribune, Financial Times, Associated Press, C-SPAN and the Economist. Even NPR is located partially in the “neutral” category on his chart.
One Twitter user named Nigel Fenwick asked Healy: “Hi Will – is this your own graphic? What’s the basis of this analysis? What data was used? Is it objective or subjective?”
Healy simply replied: “[M]ost of this was from mediabiasfactcheck.com but note this is just the first draft. I plan on a final version later.”
WND’s request for comment from Healy concerning his news ranking methodology and expertise in evaluating news organizations hadn’t been returned at the time of this report.
He appears to have some anti-Trump views. On Election Day, Healy tweeted: “Anyone who voted third party should hold their head high. They didn’t vote for a horrible candidate. That they voted their conscience.”
In May 2016, he tweeeted his support for former New Mexico Gov. Gary Johnson, who was the Libertarian Party nominee in the race for the White House: “I side 82% with @GovGaryJohnson. Just reaffirms my choice this November.”
And on Jan. 22, he tweeted: “Aren’t #alternativefacts just bulls–t? #Trump administration already off to a poor start.”
Healy also praised the Womens March on Washington, D.C., tweeting Jan. 21: “The fact that around this country we can have massive peaceful protests after a peaceful transition of power is awesome #WomansMarch.”
MediaBIasFactCheck.com describes itself as “the most comprehensive media bias resource in the Internet.” The site is owned by Dave Van Zandt from North Carolina, who offers no biographical information about himself aside from the following: “Dave has been freelancing for 25+ years for a variety of print and web mediums (sic), with a focus on media bias and the role of media in politics. Dave is a registered Non-Affiliated voter who values evidence based reporting” and, “Dave Van Zandt obtained a Communications Degree before pursuing a higher degree in the sciences. Dave currently works full time in the health care industry. Dave has spent more than 20 years as an arm chair researcher on media bias and its role in political influence.”
WND was unable to locate a single article with Van Zandt’s byline. Ironically, the “fact checker” fails to establish his own credibility by disclosing his qualifications and training in evaluating news sources.
Asked for information concerning his expertise in the field of journalism and evaluating news sources, Van Zandt told WND: “I am not a journalist and just a person who is interested in how media bias impacts politics. You will find zero claims of expertise on the website.”
Concerning his purported “25+ years” of experience writing for print and web media, he said: “I am not sure why the 25+ years is still on the website. That was removed a year ago when I first started the website. All of the writing I did was small print news zines from the ’90s. I felt that what I wrote in the ’90s is not related to what I am doing today so I removed it. Again, I am not a journalist. I simply have a background in communications and more importantly science where I learned to value evidence over all else. Through this I also became interested in research of all kinds, especially media bias, which is difficult to measure and is subjective to a degree.”
WND asked: Were your evaluations reviewed by any experts in the industry?
“I can’t say they have,” Van Zandt replied. “Though the right-of-center Atlantic Council is using our data for a project they are working on.”
Van Zandt says he uses “three volunteers” to “research and assist in fact checking.” However, he adds that he doesn’t pay them for their services.
Van Zandt lists WND on his “Right Bias” page, alongside news organizations such as Fox News, the Drudge Report, the Washington Free Beacon, the Daily Wire, the Blaze, Breitbart, Red State, Project Veritas, PJ Media, National Review, Daily Caller and others.
“These media sources are highly biased toward conservative causes,” Van Zandt writes. “They utilize strong loaded words (wording that attempts to influence an audience by using appeal to emotion or stereotypes), publish misleading reports and omit reporting of information that may damage conservative causes. Sources in this category may be untrustworthy.”
His special notes concerning WND link to Snopes.com and PolitiFact.com, websites that have their own questionable reputations and formulas as so-called “fact checkers.” (See the “Snopes” and “PolitiFact” entries below.)
Asked if his own political leanings influence his evaluations, Van Zandt said: “Sure it is possible. However, our methodology is designed to eliminate most of that. We also have a team of 4 researchers with different political leanings so that we can further reduce researcher bias.”
Bill Palmer of the website Daily News Bin accused Van Zandt of retaliating when the Daily News Bin contacted him about his rating. Palmer wrote:
“[I]t turns out Van Zandt has a vindictive streak. After one hapless social media user tried to use his phony ‘Media Bias Fact Check’ site to dispute a thoroughly sourced article from this site, Daily News Bin, we made the mistake of contacting Van Zandt and asking him to take down his ridiculous ‘rating’ – which consisted of nothing more than hearsay such as ‘has been accused of being satire.’ Really? When? By whom? None of those facts seem to matter to the guy running this ‘Media Bias Fact Check’ scam.
“But instead of acknowledging that he’d been caught in the act, Van Zandt retaliated against Daily News Bin by changing his rating to something more sinister. He also added a link to a similar phony security company called World of Trust, which generates its ratings by allowing random anonymous individuals to post whatever bizarre conspiracy theories they want, and then letting these loons vote on whether that news site is ‘real’ or not. These scam sites are now trying to use each other for cover, in order to back up the false and unsubstantiated ‘ratings’ they semi-randomly assign respected news outlets. …
“‘Media Bias Fact Check’ is truly just one guy making misleading claims about news outlets while failing to back them up with anything, while maliciously changing the ratings to punish any news outlets that try to expose the invalidity of what he’s doing.”
But Van Zandt accused Palmer of threatening him, and he said MediaBiasFactCheck welcomes criticism. If evidence is provided, he said, the site will correct its errors.
“Bottom line is, we are not trying to be something we are not,” he said. “We have disclaimers on every page of the website indicating that our method is not scientifically proven and that there is [sic] subjective judgments being used as it is unavoidable with determining bias.”
FakeNewsChecker.com is another self-appointed “fact checker” run by anonymous individuals. The website offers no contact information.
As WND reported, the site is publishing “fake news,” specifically “fake news” about WND. It claims that WND’s founder and CEO, Joseph Farah, “received donations from the Donald Trump superPAC “Great America “PAC” (sic) calling into further question the motives behind the ‘fake’ and conspiratorial nature of the content.”
But there’s one major problem with the site’s purported “fact.”
WND didn’t get any donations from any superPACs, “not this one or any other,” company officials confirmed.
FakeNewsChecker.com effectively categorizes as “fake” virtually all news resources except those in the “mainstream media,” which surveys reveal are enjoying less and less consumer trust these days.
The website states:
Fake news has become a catchall term for news sources that lack journalistic integrity. These sites use sensational headlines, make false claims, exaggerate the editorial spin to reflect a bias, are misleading, are conspiratorial, are anti-science, promote propaganda, are written in satire or just plain hoaxes. Many of the sites are untrustworthy because they begin with a premise that is close to a truth and build a false story around it. Please check your sources and your emotions as you read the articles on these sites.
The mainstream media went wild circulating a viral list of so-called “fake news” websites in November 2016 – and the list included established news sites like WND, Breitbart, Red State, the Daily Wire and Project Veritas – but WND found a leftist, Trump-bashing assistant professor in Massachusetts who specialized in “fat studies” was behind the effort to target and discredit legitimate news organizations.
Meet Merrimack College Assistant Professor Melissa Zimdars, a 30-something self-identified feminist and activist who has expressed great dislike for President Donald Trump and Vice President Mike Pence.
She had only actually held her teaching position at the private college in North Andover, Massachusetts, for 15 months when she published her “fake news” list.
Zimdars published and circulated a list of “fake, false, or regularly misleading websites that are shared on Facebook and social media.” She said she began writing the list because she didn’t approve of the sources her students were citing.
In addition to some satirical and bogus sites, her list attacks the credibility of well-established news organizations such as Breitbart, BizPac Review, Red State, the Blaze, the Independent Journal Review, Twitchy, the Daily Wire, WND and James O’Keefe’s Project Veritas. In many cases (such as with her WND listing), she offers no explanation for why the news organizations were included on the list.
Mainstream media outlets such as the Los Angeles Times circulated Zimdars’ growing list. The Times headlined its story, “Want to keep fake news out of your newsfeed? College professor creates list of sites to avoid.” The Times offered no details concerning Zimdars’ qualifications or background. News organizations such as CNN, the Washington Post, Boston Globe, New York Magazine, USA Today, Business Insider, the Austin American-Statesman, the Dallas Morning News and others spread the list like gospel and cited it in their reports.
But nearly none of them considered Zimdars’ political leanings or questioned her criteria or qualifications for determining which news sources should be included on her list.
Zimdars teaches courses in radio, production, mass communication, feminist media studies, television criticism and new media and digital communication. She received her doctorate in communication and media studies just in 2015.
In response to the list, PJ Media’s Stephen Kruiser wrote, “It’s no surprise that a college professor compiled this list; what’s galling is that the Los Angeles Times ‘reported’ on it without mentioning that it’s complete garbage.”
Sean Hannity’s website warned that Zimdars’ list includes “mainstream conservative sources” and “is giving us insight into just what kind of websites the left plans on targeting for censorship.”
In addition to her new job as an assistant professor, Zimdars is also a columnist and contributor for Little Village Magazine – a left-leaning magazine that says it’s focused on issues such as “racial justice,” “gender equity,” “critical culture,” “economic and labor justice” and “environmental sustainability.” Her Twitter profile describes her as a “feminist” and “activist.”
In December, Facebook announced it would use the International Fact-Checking Network, or IFCN, to check on the legitimacy of news articles posted to the social media site.
IFCN is hosted by the Poynter Institute for Media Studies and funded, in part, by Google and foundations of leftist billionaires George Soros and Bill Gates. Soros donated $25 million to Hillary Clinton’s presidential campaign. The Daily Mail reported that Clinton super-donor and eBay founder Pierre Omidyar is also backing the project.
In response to Facebook’s announcement, FrontPage said conservatives should consider ditching Facebook.
“In essence, Facebook is giving the partisan left free space on conservative news links. It’s also allowing them to undermine a conservative link while promoting their own agenda,” FrontPage said.
“It’s not quite censorship, but the partnership with left-wing partisan ‘checkers’ helps move it to the next step of barring sites outright. For the moment, Facebook has decided that you shouldn’t just be able to share links to what you’re interested in without the left getting a say.
“This is yet another reason for conservatives to rethink being on Facebook.”
The website reveals: “Poynter’s IFCN has received funding from the Arthur M. Blank Family Foundation, the Duke Reporters’ Lab, the Bill & Melinda Gates Foundation, Google, the National Endowment for Democracy, the Omidyar Network, the Open Society Foundations and the Park Foundation.”
However, a Feb. 16 Poynter “news” headline blasted “President Trump’s anti-media meltdown.”
From the very beginning, the story trashed the president for unveiling “an alternate universe … in which virtually every problem of his is a creation of the press.”
“In a rambling, angry and contradictory media meltdown, Trump bashed ‘the failing New York Times,’ The Wall Street Journal, CNN and the BBC, among others, following a fleeting announcement of a new nominee for Labor Secretary,” wrote Poynter’s James Warren. “It constituted what at minimum is a quadrupling down – or might it be quintupling down? – on a transparent strategy to portray the press as an opposition party.”
In the same post, Warren continued: “Never has Trump’s personal obsession with coverage of himself been so vivid. It was only sidetracked, it seemed, by an odd array of declarations and claims. Those included his taking selective and self-serving use of polling to new depths, while also proffering a new species of political self-congratulation during his strikingly defensive performance: prospectively heralding the ‘massive’ crowd to attend a Saturday rally in Melbourne, Florida.”
The Washington Post’s Fact Checker has come under fire repeatedly, as critics charge it has a left-leaning bias.
As WND reported, Amazon.com CEO Jeff Bezos, who is also a Democratic Party donor and controls a personal investment firm that owns the Washington Post, had an army of 20 newspaper staffers to scour Donald Trump’s life for any dirt they could find on the presumptive GOP nominee. Bezos, a Seattle billionaire and the world’s 19th wealthiest man, purchased the Washington Post in 2013 for $250 million.
The Washington Post’s Fact Checker uses Pinocchio ratings to rate the truthfulness of statements. Zero Pinocchios means a statement is true. Two makes the statement half true. Three means mostly false, and four indicates it is false.
Red State reported that Washington Post “Fact Check” columnist Glenn Kessler fell for fake campaign ads claiming Donald Trump’s father, Fred Trump, campaigned to be mayor of New York City in the 1970s.
In 2015, the Washington Free Beacon’s David Rutz published a list of “5 Times the Washington Post failed at fact-checking.”
And in August 2016, the Washington Post’s Fact Checker came under fire from the New York Post after it “fact checked” Trump’s statements concerning Hillary Clinton lacking stamina to be president. The Fact Checker gave Trump its worst rating.
“Trump has claimed twice, without proof, that Clinton lacks the physical and mental stamina to be president,” it said. “In the absence of any evidence, he earns Four Pinocchios.”
But New York Post writer Eddie Scarry observed: “Curious that the Post, in earnest, would fact-check Trump’s opinion on his opponent’s energy level. The paper didn’t bother to investigate the veracity of Clinton’s claim in late May that Trump ‘lacks the temperament to lead our nation and the free world."
Snopes.com, a website that’s been around since 1995, is sometimes cited by other “fact-checking” sites to support their claims. Facebook has indicated it plans to use Snopes as one of its arbiters of “fake news.” But WND revealed the site has been criticized by conservatives for a left-leaning bias and admits it has no standard procedure for fact-checking.
One of Snopes’ leading fact-checkers is a former sex-and-fetish blogger who described her routine as smoking pot and posting to Snopes.com, and the company now is embroiled in a legal dispute between its former married founders that includes accusations the CEO used company money for prostitutes.
“This is Facebook’s high journalistic standard,” commented Pamela Geller, an author and blogger who focuses on the politically incorrect subject of Islam and terrorism.
“What a joke,” she wrote on her blog. “Facebook’s fact checkers will be used to censor and ban conservative perspectives, not to distinguish truth from falsehood. Everyone knows that.”
The Daily Mail of London reported one of Snopes.com’s main fact checkers, Kim LaCapria, is disclosed to be a former sex-blogger who called herself “Vice Vixen.”
Investigative reporter Sharyl Attkisson told WND in December that she thinks the uproar over “fake news” is a “narrative-driven propaganda campaign.”
“I think there’s an agenda to censor the news as opposed to actually trying to eliminate fake news,” she said.
A DailyMail.com investigation found that Snopes.com’s founders, former husband and wife David and Barbara Mikkelson, are embroiled in a lengthy and bitter legal dispute in the wake of their divorce.
He has since remarried to a former escort and porn actress who is one of the site’s staff members.
Barbara Mikkelson accuses her ex-husband of embezzlement while David claims she took millions from their joint accounts and bought property in Las Vegas.
One of Snopes.com’s lead fact-checkers is Kim LaCapria, the Daily Mail reported, who has also been a sex-and-fetish blogger who went by the pseudonym “Vice Vixen.” Her blog had “a specific focus on naughtiness, sin, carnal pursuits, and general hedonism and bonne vivante-ery.”
Her day-off activities she said on another blog were: “played scrabble, smoked pot, and posted to Snopes.'”
“That’s what I did on my day “on,” too,” she added.
David Mikkelson told the the Daily Mail that Snopes does not have a “standardized procedure” for fact-checking “since the nature of this material can vary widely.”
He said the process of fact-checking “‘involves multiple stages of editorial oversight, so no output is the result of a single person’s discretion.”
Snopes has no formal requirements for fact-checkers, he told the London paper, because the variety of the work “would be difficult to encompass in any single blanket set of standards.”
Mikkelson has denied that Snopes takes any political position, but the Daily Mail noted his new wife ran for U.S. congress in Hawaii as a Libertarian in 2004.
During the campaign she handed out “Re-Defeat Bush” cards and condoms stamped with the slogan “Don’t get screwed again.”
“Let’s face it, I am an unlikely candidate. I fully admit that I am a courtesan,” she wrote on her campaign website.
In December, PolitiFact.com was identified by Facebook as one of the sites the social media platform would use to label “fake news” stories. But Breitbart reported, “Facebook’s decision to tout PolitiFact as a credible and independent fact checker is awfully disturbing, given the organization’s repeated smear campaign against Donald Trump throughout the 2016 election.”
“OH HELL NO,” was the response from the Weekly Standard’s Mark Hemingway to Facebook’s announcement that it would use PolitiFact.com to check news stories.
“Facebook is bringing in Poynter/PolitiFact to police ‘fake news’? They’re INCREDIBLY biased,” he said.
Breitbart noted that PolitiFact pushed “fact checks” to discredit Republicans while promoting stories that favored Democratic Party nominee Hillary Clinton.
In fact, one of PolitiFact’s largest contributors is Clinton donor Alberto Ibarguen, president and CEO of the Knight Foundation. Ibarguen contributed $200,000 to the 8th annual Clinton Global Initiative University meeting in February 2015, Breitbart reported. The Knight Foundation also donated between $10,000 and $25,000 to the Clinton Foundation, Politico reported.
PolitiFact’s editor is Angie Drobnic Holan, who helped launch the site in 2007.
Breitbart’s Jerome Hudson published an analysis that included the following list of reasons PolitiFact is “unqualified to be an objective judge of what’s real and ‘fake’ news”:
1. Last March, PolitiFact delivered a “mostly false” rating for a joke made by Republican Senator Ted Cruz.
2. Last April, PolitiFact made phone calls and sent a reporter to investigate whether Governor Scott Walker actually “paid one dollar for” a sweater he bought at Kohl’s. PolitiFact later ruled Walker’s claim “true.”
3. When Trump said Clinton wants “open borders,” PolitiFact deemed his statement “mostly false” — despite the fact that Clinton admitted as much in a private, paid speech to a Brazilian bank on May 16, 2013. “My dream is a hemispheric common market, with open trade and open borders,” she said at the time.
4. PolitiFact cast doubts on comments Pat Smith made during her emotional speech at the Republican National Convention, where she said Hillary Clinton said “a video was responsible” for her son’s death during the terror attacks in Benghazi.
Smith was referring to when she “saw Hillary Clinton at Sean’s coffin ceremony,” and then-Secretary of State Clinton “looked me squarely in the eye and told me a video was responsible.”
But PolitiFact, taking an oddly defensive stance, said Smith’s memory could’ve been “fuzzy” and referred its readers, instead, to a “brief meeting behind closed doors” where Clinton addressed the families of the victims of the attack.
5. Despite video evidence to the contrary, PolitiFact claimed Hillary Clinton didn’t laugh about Kathy Shelton’s rape as a child. Trump invited Shelton to the second presidential debate and called out Clinton’s embarrassing behavior.
Again, moving to dismiss and downplay Clinton’s actions, PolitiFact wrote: “Trump is referring to an audio tape in which she does respond with amusement at her recollections of the oddities of the case, which involve the prosecution and the judge. At no point does she laugh at the victim.”
6. In an attempt to explain Hillary Clinton’s role in the sale of 25 percent of the United States’ uranium stockpile, Politifact ignored numerous key facts, downplayed other key facts, and ultimately made 13 errors in its analysis.
7. A few months later, PolitiFact was, again, attempting to whitewash Clinton’s role in the Russian uranium deal. Like PolitiFact’s first foray into the subject, the second report commits many factual errors and is full of glaring inaccuracies and omissions.
8. During a televised campaign event, Clinton said Australia’s compulsory gun buyback program “would be worth considering” in the U.S.
When the National Rifle Association included Clinton’s comments on one of its flyers, PolitiFact ruled the organization’s claim “mostly false.”
9. While PolitiFact admitted that Trump’s claim that Russia’s arsenal of nuclear warheads has expanded and the U.S.’ has not, the left-wing outfit deemed Trump’s statement “half true.”
In a June 2016 piece published at Investor’s Business Daily, Media Research Center President Brent Bozell wrote:
“This is a pattern with PolitiFact. Overall, they’ve rated Trump “False”/”Mostly False”/”Pants on Fire” 77% of the time. But they’ve rated Clinton “False” and “Mostly False” only 26% of the time.
“The PolitiFact political agenda jumps off the page. On the Republican side, Sen. Ted Cruz lands on the “False” side 65% of the time, former House Speaker Newt Gingrich 57% of the time and former Sen. Rick Santorum 55% of the time. For Democrats, President Obama is ruled false 25% of the time, and Sen. Bernie Sanders is false only 30% of the time. This is the guy who routinely says, ‘the business model of Wall Street is fraud.'”
Also, in 2013, WND reported PolitiFact misled the public on Obamacare.
A 2013 study from the George Mason University Center for Media and Public Affairs found that PolitiFact determines Republicans are dishonest nearly three times as often as it reaches the same conclusion for Democrats.
“PolitiFact.com has rated Republican claims as false three times as often as Democratic claims during President Obama’s second term,” the center said, “despite controversies over Obama administration statements on Benghazi, the IRS and the AP.”
FactCheck.org was launched by the Annenberg Public Policy Center at the University of Pennsylvania, which was founded by the late philanthropists Walter and Lenore Annenberg, friends of former Presidents Richard Nixon and Ronald Reagan. FactCheck’s current editor is Angie Drobnic Holan.
The website is perhaps the least overtly partisan “fact checker” in this list. However, the organization came under fire after it published a July 21, 2015, piece called “Unspinning the Planned Parenthood Video,” an entry that defended the abortion provider during the baby-parts scandal. Several leftist groups linked to the article, tweeted it and shared it on Facebook.
Breitbart’s John Sexton noted that FactCheck.org only addressed one video in a series of at least seven videos exposing the baby-parts trade. The site wrote about an interview with Deborah Nucatola of Planned Parenthood, who commented on crushing babies. Nucatola also suggested Planned Parenthood is satisfied with turning a profit in the body-parts trade, so long as doing so doesn’t make the nonprofit look bad.
Sexton writes: Here is how FactCheck frames Nucatola’s admission: ‘Nucatola does make one statement in the unedited video that suggests to critics that some clinics would be comfortable with a payment that was slightly more than their expenses for providing the tissue.’ Is this really only suggestive to critics? Why isn’t it just a fact that she admitted it despite her obvious concern about getting caught? And is it possible Planned Parenthood has supporters as well? Might the supporters be eager to downplay this admission? FactCheck doesn’t have anything to say about that. It’s another instance of the real story being sidestepped by introducing a partisan narrative, i.e. ‘Republicans pounced.'”
In yet another article concerning FactCheck.org, Breitbart reported the site was forced to “make an embarrassing correction” after it appeared to have made up a quote that never appeared in Peter Schweizer’s book, “Clinton Cash.” The site falsely claimed Schweizer wrote in his book that Hillary Clinton had “veto power” and “could have stopped” the sale of 20 percent of U.S. uranium to the Russian government.
In 2016, FactCheck.org claimed TV host Bill Nye is “more of a scientist than [Sarah] Palin,” and the site listed his “six honorary doctorate degrees, including Ph.D.s in science from Goucher College and Rensselaer Polytechnic Institute” as evidence for its assertion.
“In the 12 years of FactCheck.org’s existence, we’ve never seen his match,” the site wrote. “He stands out not only for the sheer number of his factually false claims, but also for his brazen refusals to admit error when proven wrong.”
In a post titled, “Trump’s bogus voter fraud claims,” FactCheck.org stated, “Donald Trump is citing unsubstantiated urban myths and a contested academic study to paint a false narrative about rampant voter fraud in the U.S. and the likelihood of a ‘rigged’ election.”
While Trump said the U.S. has a problem with ballots that are cast by illegal immigrants and on behalf of dead people – a 2014 study in the Electoral Studies Journal shows illegals may have cast as many as 2.8 million votes in 2008 and 2010 and investigations have found that ballots have been cast for dead people in multiple elections – FactCheck.org found, “his evidence is lacking,” and “researchers say voter fraud involving ballots cast on behalf of deceased voters is rare.”
Any examination of a “fact-checking” website would not be complete without a look at the organization’s primary source of funding. FactCheck.org receives the largest amount of its funding from the Annenberg Foundation, which funds a number of nonprofits. The foundation funded the Chicago Annenberg Challenge to the tune of $49.2 million. In 1995, Barack Obama was a founding member of the Chicago Annenberg Challenge. He remained on the board until 2001, when the challenge was phased out.
According to CNN, the Chicago Annenberg Challenge was the brainchild of Weather Underground terrorist group co-founder Bill Ayers. “A review of board minutes and records by CNN show Obama crossed paths repeatedly with Ayers at board meetings of the Annenberg Challenge Project,” CNN reported. The Wall Street Journal reported, “The group poured more than $100 million into the hands of community organizers and radical education activists.”