The True Meaning Of “Collusion” Exposed

Authord by Raul Ilargi Meijer via The Automatic Earth blog,

The indictment by Special Counsel Robert Mueller, whose task it is to investigate possible collusion between the Trump campaign and ‘Russians’, that was released yesterday by Deputy AG Rod Rosenstein, raises so many questions one has to be picky.

Many people have already stated that the report contains no proof of anything it claims, and that Mueller doesn’t have to prove a thing, because the 12 Russians he accuses will never show up in a US court. Many of course also have at least questioned the timing of the release, 3 days before the Putin-Trump summit in Helsinki, of information Mueller and Rosenstein have allegedly been sitting on for months.

The idea that the event was not coordinated to inflict maximum damage to the summit seems indeed far-fetched.

But something else struck me in the report: the role of WikiLeaks (labeled “Organization 1”). Mueller very much focuses on both Julian Assange -though he doesn’t get named and is not indicted- and his presumed links to the indicted Russians, who -allegedly- posed as Guccifer 2.0:

Use of Organization 1

47. In order to expand their interference in the 2016 U.S. presidential election, the Conspirators transferred many of the documents they stole from the DNC and the chairman of the Clinton Campaign to Organization 1. The Conspirators, posing as Guccifer 2.0, discussed the release of the stolen documents and the timing of those releases with Organization 1 to heighten their impact on the 2016 U.S. presidential election.

a. On or about June 22, 2016, Organization 1 sent a private message to Guccifer 2.0 to “[s]end any new material [stolen from the DNC] here for us to review and it will have a much higher impact than what you are doing.” On or about July 6, 2016, Organization 1 added, “if you have anything hillary related we want it in the next tweo [sic] days prefable [sic] because the DNC [Democratic National Convention] is approaching and she will solidify bernie supporters behind her after.” The Conspirators responded, “ok . . . i see.” Organization 1 explained, “we think trump has only a 25% chance of winning against hillary . . . so conflict between bernie and hillary is interesting.”

b. After failed attempts to transfer the stolen documents starting in late June 2016, on or about July 14, 2016, the Conspirators, posing as Guccifer 2.0, sent Organization 1 an email with an attachment titled “wk dnc link1.txt.gpg.” The Conspirators explained to Organization 1 that the encrypted file contained instructions on how to access an online archive of stolen DNC documents. On or about July 18, 2016, Organization 1 confirmed it had “the 1Gb or so archive” and would make a release of the stolen documents “this week.”

48. On or about July 22, 2016, Organization 1 released over 20,000 emails and other documents stolen from the DNC network by the Conspirators. This release occurred approximately three days before the start of the Democratic National Convention. Organization 1 did not disclose Guccifer 2.0’s role in providing them. The latest-in-time email released through Organization 1 was dated on or about May 25, 2016, approximately the same day the Conspirators hacked the DNC Microsoft Exchange Server.

49. On or about October 7, 2016, Organization 1 released the first set of emails from the chairman of the Clinton Campaign that had been stolen by LUKASHEV and his co-conspirators. Between on or about October 7, 2016 and November 7, 2016, Organization 1 released approximately thirty-three tranches of documents that had been stolen from the chairman of the Clinton Campaign. In total, over 50,000 stolen documents were released.

This means Mueller et al claim that WikiLeaks received the DNC files from Russian parties which had hacked into DNC(-related) servers. Something Julian Assange has always denied. Now, remember that the Veteran Intelligence Professionals for Sanity (VIPS), a group of former US intelligence professionals, as well as others, have said that the speed with which the files were downloaded from the server(s) indicates that they were not hacked, but put onto a hard drive.

The person who is supposed to have done that is Seth Rich. Who was murdered on July 10 2016. Kim Dotcom has long claimed to have evidence that Seth Rich was indeed the person who provided the files to Assange. Today he said on Twitter that his lawyers warned him about exposing that evidence, citing his safety and that of his family.

Half a year after Rich’s -never solved- murder, in the first months of 2017, the US Department of Defense was involved in negotiations with Assange in which the latter was offered -temporary- ‘safe passage’ from the Ecuador Embassy in London where he is holed up, in exchange for Assange ‘redacting’ a batch of files on the CIA known as Vault 7.

These negotiations were suddenly halted in April 2017 through the interference of James Comey -then FBI chief- and Mark Warner, a US Senator (D-VA). In the talks, Assange had offered to prove that no Russians were involved in the process that led to WikiLeaks receiving the files.

Today, of course, Assange is completely incommunicado in the Ecuador embassy, so he cannot defend himself against the Mueller accusations. Mueller really doesn’t have to prove anything: he can say what he wants. Comey and Warner prevented Assange from providing evidence exonerating ‘the Russians’, and Assange has been shut down.

Let me repeat once again: Assange is fully aware that the smallest bit of non-truth or half-lie would mean the end of WikiLeaks. It is based on ultimate trust. Nobody would ever offer a single file again if they wouldn’t have full confidence that Wikileaks would treat it -and them- with the utmost respect. So the American approach is to smear Assange in any way possible, rape allegations, collusion with Russian agents, anything goes.

And ‘the Russians’ can be ‘freely’ accused in a 29-page indictment released on the eve of the first summit President Trump is supposed to have with his Russian counterpart a year and a half into his presidency, where his predecessors all had such meetings much earlier into their presidencies. With many lawmakers calling on him to cancel it.

Do we all still remember the true meaning of ‘collusion’?

“Credible” Lisa Page Wows House GOP; Supports Theory FBI Had “Desired Outcome” In Russia Probe

GOP lawmakers were pleased with former FBI attorney Lisa Page’s Friday closed-door interview with select House committee members – in sharp contrast to her former FBI co-worker and lover Peter Strzok’s Thursday testimony which was mostly a ten-hourtrain wreck.

After just five hours, a “cooperative” and “credible” Page answered many questions Strzok didn’t, according to Rep. John Ratcliffe (R-TX) as reported by Politico‘s Kyle Cheneyin large part because FBI attorneys present at the session backed off and let her answer more questions. 

Rep. Mark Meadows (R-NC) – one of Page’s harshest critics leading up to her appearance, said that her cooperation “speaks well of her” according to The Hill

“We certainly learned additional things today, but I can tell you that the last thing anyone wants to be is falsely accused and her willingness to cooperate today speaks well of her” -Rep. Mark Meadows

Rep. Matt Gaetz (R-FL) said that Page’s testimony heightened his concern over whether the FBI was driving towards a “desired outcome” in its Russ’a probe.

Gaetz also questioned the presence of FBI attorneys during the private testimony.

“Lisa Page is not an FBI employee, but the FBI was here providing counsel and giving her direction as to which questions to answer or not answer and there is a question as to the propriety of that before the House,” Gaetz said, according to the Hill.

But he said he also found Page to be “more credible” than Strzok, the New York Post reported.  

“I didn’t agree with her characterization of every text message and every piece of evidence,” Gaetz said as he left the House hearing. “But we did not see the smug attitude from Lisa Page that we saw from Peter Strzok.” –Fox News

The three GOP lawmakers wouldn’t say whether what Page shared during her closed door appearance was consistent with Strzok’s Thursday session, they did get new information. 

And while special agent Peter Strzok freaked people out with his Devil’s Advocate performance on Thursday, Lisa Page now appears poised to redeem herself through honesty and transparency. Who knows, maybe watching her former side-piece do this freaked her out too: 

Note Page’s depiction in the media has gone from this:

To this:

Furthermore, we learn from Freedom Caucus Chairman Mark Meadows (R-NC) that the DOJ had not notified Page of Congress’ outstanding requests to interview her for over seven months, confirming that the pushback against any probe into what really happened as the “deep state” started probing the Trump circle in 2016 goes to the very top of the Department of Justice. 

Could Lisa Page be the key to it all? Does she already have a book deal? 

Rod Rosenstein Impeachment Plans Drawn Up: Report

House GOP members led by Freedom Caucus Chairman Mark Meadows (NC) have drawn up articles of impeachment against Deputy Attorney General Rod Rosenstein, according to Politico.

Conservative sources say they could file the impeachment document as soon as Monday, as Meadows and Freedom Caucus founder Jim Jordan (R-Ohio) look to build Republican support in the House. One source cautioned, however, that the timing was still fluid. –Politico

GOP legislators could also try to hold Rosenstein in contempt of Congress prior to actual impeachment. 

The knives have been out for Rosenstein for weeks, as Congressional investigators have repeatedly accused the DOJ of “slow walking” documents related to their investigations. Frustrated lawmakers have been given the runaround – while Rosenstein and the rest of the DOJ are hiding behind the argument that the materials requested by various Congressional oversight committees would potentially compromise ongoing investigations. 

In late June, Rosenstein along with FBI Director Christopher Wray clashed with House Republicans during a fiery hearing over an internal DOJ report criticizing the FBI’s handling of the Hillary Clinton email investigation by special agents who harbored extreme animus towards Donald Trump while expressing support for Clinton. Republicans on the panel grilled a defiant Rosenstein on the Trump-Russia investigation which has yet to prove any collusion between the Trump campaign and the Kremlin. 

“This country is being hurt by it. We are being divided,” Rep. Trey Gowdy (R-SC) said of Mueller’s investigation.  “Whatever you got,” Gowdy added, “Finish it the hell up because this country is being torn apart.”

Rosenstein pushed back – dodging responsibility for decisions made by subordinates while claiming that Mueller was moving “as expeditiously as possible,” and insisting that he was “not trying to hide anything.” 

“We are not in contempt of this Congress, and we are not going to be in contempt of this Congress,” Rosenstein told lawmakers.

Republicans, meanwhile, approved a resolution on the House floor demanding that the DOJ turn over thousands of requested documents by July 6. And while the DOJ did provide Congressional investigators with access to a trove of documents, House GOP said the document delivery was incomplete, according to Fox News

That didn’t impress Congressional GOP. 

For over eight months, they have had the opportunity to choose transparency. But they’ve instead chosen to withhold information and impede any effort of Congress to conduct oversight,” said Representative Mark Meadows of North Carolina, a sponsor of Thursday’s House resolution who raised the possibility of impeachment this week. “If Rod Rosenstein and the Department of Justice have nothing to hide, they certainly haven’t acted like it.” –New York Times (6/28/18)

Rep. Meadows, meanwhile, fully admits that the document requests are related to efforts to quash the Mueller investigation. 

“Yes, when we get these documents, we believe that it will do away with this whole fiasco of what they call the Russian Trump collusion because there wasn’t any,” Meadows said on the House floor.

Meanwhile, following a long day of grilling FBI counterintelligence agent Peter Strzok, House Judiciary Committee Chairman Bob Goodlatte blamed Rosenstein for hindering Strzok’s ability to reveal the details of his work. 

“Rosenstein, who has oversight over the FBI and of the Mueller investigation is where the buck stops,” he said. “Congress has been blocked today from conducting its constitutional oversight duty.”

While Rosenstein’s appears to be close to the chopping block, whether or not he will actually be impeached is an entirely different matter.  

“World’s Most Bearish Hedge Fund” Has An Alternative View On Yuan Weakness, With “Profound Implications”

Like David Einhorn, Horseman Global had a very ugly month, in fact its 6.9% drop in June which dragged YTD performance back into the red (-2.83% YTD), was the worst month for Horseman going back to the end of 2016.

However, unlike Einhorn, who lost 8% in June bringing his YTD performance to -19% and whose woes can be mostly attributed to the relentless rise of the tech names that make up his “short basket”, Horseman was hit due to something else entirely: its aggressive short dollar bet. Like so many other funds who turned bearish on the greenback at the start of the year only to suffer a violent short squeeze, Horseman was caught in the trade tug of war, in which China – for one reason or another – saw the Yuan depreciate last month by the most on record, surpassing the August 2015 devaluation. Subsequent dovish language from both the ECB and BOJ did not help, as Horseman CIO Russel Clark explains:

[I]t seems the larger consensus position in the market is to be short US dollar. More dovish than expected messages from the European Central Bank (ECB) and Bank of Japan (BOJ) led to a surge in the value of the dollar against all currencies. As the fund strategy has been built around flows into the US reversing and creating a weak dollar, our long book suffered without commensurate gain from a short book.

Due to the violent whiplash in the dollar, technicals also promptly reversed, making the long dollar trade the biggest pain trade for the hedge fund community:

Short dollar and long commodity trades had attracted a great deal of trend following money, and Commodity Futures Trading Comission (CFTC) data and broker estimates now show that CTA and trend following funds have reversed their short dollar position, and are now long dollars, while long positioning in commodities have been largely cleared out.

The concurrent collapse in emerging markets, one of Horseman’s preferred trades for the past year, did not help performance.

Which, however, brings us to Horseman’s key point in his latest letter to investors, as well as a major question: what is prompting the yuan devaluation? Is it merely China’s stealthy, if petulant, response to the Trump’s escalating trade salvos, is it a reaction to China’s weakening economy, or is something else going on. To Clark, the answer is “something else.”

The big question which remains unanswered is why have the Chinese become willing to let their currency fall after a period of keeping it strong? Where is there self interest in letting their currency weaken when there was little need for it, and it potentially destabilises the economy?

And the response:

The most reasonable answer to my mind is that they have tired of the endless currency devaluation policies of the BOJ, and possibly the ECB.

The reason for this is due to a structural change in the Chinese economy, which “now runs trade deficits with both Japan and Europe, so why should they allow the Euro and Yen to continue to devalue against the CNY?”

Why indeed, but if that interpretation is accurate, and if China’s latest Yuan deval is the product of trade concerns and not a simplistic response to Trump, Clark believes that this has two profound implications, one for traders the other for the economies of Europe and Japan:

  • Firstly, that CNY weakness is a not sign of economic weakness at all, which is shown by the underlying data. Hence investors positioning for further Chinese and emerging market weakness could be very disappointed. Especially as dollar weakness still looks a structurally sound trade in my mind.
  • Secondly, if CNY is managed now to prevent either the Euro or the Yen to weakening against it, while the dollar is likely to fall against all three currencies, this has negative connotations for European and Japanese exporters, who look to be hemmed in by a trade war with the US and a new Chinese currency policy. Combined with Chinese policy of keeping commodity prices high, the environment for Japanese corporate cashflow is turning negative. As Japan cashflow weakens, less of this money is likely to find its way to the US corporate bond market, likely causing corporate bond spreads to widen. We are seeing that Japanese have become the dominant buyers of US corporate debt and leveraged loans.

And yet, in his synthesis of these trends, instead of seeing the return of some virtuous leveraging cycle, Clark comes up with a conclusion which is especially bearish for the market, as he sees the recent shift in Chinese currency policy, and the current yuan weakness, as the potential catalyst that precipitates the collapse of several “unsustainable” trends, to wit:

For a long time, I have considered the BOJ quantitive easing policy, the US corporate bond market and volatility selling markets as unsustainable, but with little idea of what the catalyst would be for these markets to unwind. This change in Chinese currency policy could be a catalyst for change.

Well, as we have said for the past 3 years, it is the world’s most bearish fund for a reason, and not just before of its gross and net short exposure of -135.5 and -44.3%, respectively.

Clark’s latest full letter is below:

Your fund lost 6.87% last month. Losses came from the long book and currency book.

I had thought the big consensus trade in the market was short bonds, and I had moved the fund to be largely neutral with respect to bond yields. To offset our short REIT and Pharma positions which do well with lower yields, I had taken a long bond position and short financial position (financials tend to do badly when bond yields fall). However, it seems the larger consensus position in the market is to be short US dollar. More dovish than expected messages from the European Central Bank (ECB) and Bank of Japan (BOJ) led to a surge in the value of the dollar against all currencies. As the fund strategy has been built around flows into the US reversing and creating a weak dollar, our long book suffered without commensurate gain from a short book.

With the dollar rally, markets have taken to punishing emerging market assets. Emerging markets certainly were weak during the 2013 taper tantrum, and the Chinese devaluation of 2015, so selling these assets during a dollar rally is perfectly logical. However, the differences between 2013, 2015 and today are profound, particularly for the mining sector. June saw new cycle highs for thermal coal and dry bulk shipping prices. We have also seen Chinese steel output rise to new all-time highs, at the same time Chinese domestic iron ore output has been reduced, which has led to rising imports. Major miners continue to cut capex and repay debt. Indian commodity demand continues to rise. Indian billionaire, Anil Agarwal, has looked to buy minorities out of his listed mining company, and try a buy the assets of Anglo American, as market valuations are very cheap despite an improving outlook.

Short dollar and long commodity trades had attracted a great deal of trend following money, and Commodity Futures Trading Comission (CFTC) data and broker estimates now show that CTA and trend following funds have reversed their short dollar position, and are now long dollars, while long positioning in commodities have been largely cleared out.

The big question which remains unanswered is why have the Chinese become willing to let their currency fall after a period of keeping it strong? Where is there self interest in letting their currency weaken when there was little need for it, and it potentially destabilises the economy? The most reasonable answer to my mind is that they have tired of the endless currency devaluation policies of the BOJ, and possibly the ECB. China now runs trade deficits with both Japan and Europe, so why should they allow the Euro and Yen to continue to devalue against the CNY? This seems perfectly reasonable to me and has two profound implications.

Firstly, that CNY weakness is a not sign of economic weakness at all, which is shown by the underlying data. Hence investors positioning for further Chinese and emerging market weakness could be very disappointed. Especially as dollar weakness still looks a structurally sound trade in my mind.

Secondly, if CNY is managed now to prevent either the Euro or the Yen to weakening against it, while the dollar is likely to fall against all three currencies, this has negative connotations for European and Japanese exporters, who look to be hemmed in by a trade war with the US and a new Chinese currency policy. Combined with Chinese policy of keeping commodity prices high, the environment for Japanese corporate cashflow is turning negative. As Japan cashflow weakens, less of this money is likely to find its way to the US corporate bond market, likely causing corporate bond spreads to widen. We are seeing that Japanese have become the dominant buyers of US corporate debt and leveraged loans.

For a long time, I have considered the BOJ quantitive easing policy, the US corporate bond market and volatility selling markets as unsustainable, but with little idea of what the catalyst would be for these markets to unwind. This change in Chinese currency policy could be a catalyst for change. Your fund is long commodities, short developed markets.

And The Best-Run City In The US Is…

Any mayor will tell you that running a modern US city isn’t an easy task. Even wealthy enclaves in the middle of a gentrification boom sometimes have trouble providing basic services (have you ridden the New York City subway lately?). While dysfunction abounds in municipalities across the US, researchers at WalletHub recently challenged themselves to come up with a formula for evaluating the best and worst-run cities in the country.

After deciding that cities should be judged by the quality and efficacy of services delivered to taxpayers, WalletHub put together a “Quality of Services” score made up of 35 metrics grouped into six categories. They then compared that with the city’s per-capita budget.

The results may surprise some readers. The largest US city in the top ten was Oklahoma City, which ranked as the 10th-best run city in the US. Instead, the top of the list was mostly dominated by smaller cities like Nampa, Idaho and Provo, Utah.

Top 10 Best-Run Cities in the US:

  • Nampa, Idaho
  • Provo, Utah
  • Boise, Idaho
  • Lexington-Fayette, Kentucky
  • Missoula, Montana
  • Sioux Falls, South Dakota
  • Durham, North Carolina
  • Lewiston, Maine
  • Nashua, New Hampshire
  • Oklahoma City, Oklahoma

The respective ranks of each of the 150 largest US cities can be found below:

Source: WalletHub

 

WalletHub also broke down its ranking by different metrics like lowest debt and highest high-school graduation rate:

Cities

Cities

Cities

Cities

Five

Seven

Eight

Nine

China’s Military Interests Along The Silk Road Stretch From Sea To Shining Sea

Authored by Andrew Korybko via Oriental Review,

Leaked Chinese military documents purport that the People’s Liberation Army will seek to expand its presence across the world in order to defend its Silk Road interests.

The Japan Times was the first outlet to report on the plans that putatively circulated in Chinese circles back in February and which implored the state to concentrate on expanding its force projection capabilities beyond coastal defense and into the maritime and land realms. Although not directly stated, this is in clear reference to the need that China has to protect its Silk Road infrastructure investments and Sea Lines Of Communication (SLOC), mirroring the path that all other globally relevant Great Powers before it followed in having their overseas military activity driven by economic interests.

It was only a matter of time before China naturally did so as well, despite publicly eschewing this approach and being extremely sensitive to how it’s portrayed, though with good reason because of the likelihood that this will be exploited through weaponized infowar means as supposed “proof” that the country is really just “another imperial power”, albeit one that cleverly disguises its military moves with win-win Silk Road slogans. That’s not entirely correct, though it feeds into India’s paranoia about China’s creeping military encirclement through the so-called “String of Pearls” infrastructure projects around its South Asian periphery.

About those, it would make the most sense for China to reach agreements with the host states there and beyond similar to the 2016 Logistics Exchange Memorandum Of Agreement (LEMOA) between the US and India in allowing both parties to use each other’s military facilities on a case-by-case “logistical” basis, essentially giving some category of Silk Road projects such as seaports and airports a dual function even though this is exactly what American think tanks warned would eventually happen. Even so, it’s the most logical and cost-effective security solution available.

The catch, though, is that China must avoid being drawn into “mission creep” all across the world in defending its Silk Road interests, to which end it’s likely to avoid having any significant military presence overseas, let alone in actual conflict zones apart from the Hybrid War experiences that its peacekeepers are presently learning from. Thus, China will probably step up its training, advisory, and assistance missions to its many partners as part of its own multipolar version of the US’ “Lead From Behind” strategy, which could for example see future aircraft carrier deployments off the African coast in order to help its in-country allies respond to anti-Silk Road militants.

The People’s Liberation Army is therefore predicted to become a hemispheric force active all across Afro-Eurasia, though concentrating mostly on the supercontinental Heartland of Central Asia and the East African coast of the Indian Ocean Region in managing its dual mainland-maritime military competencies in protecting the Silk Road.

This is natural given China’s expanding security interests by virtue of the need to defend the trade routes and infrastructure that form the backbone of its export-oriented economy and consequently its national stability, though it will undoubtedly be misportrayed by the country’s enemies as an “aggressive move” driven by “neo-imperial” calculations.