How The Billionaires Control American Elections

Authored by Eric Zuesse via The Strategic Culture Foundation,

The great investigative journalist Glenn Greenwald gave an hour-long lecture on how America’s billionaires control the U.S. Government, and here is an edited summary of its opening twenty minutes, with key quotations and assertions from its opening — and then its broader context will be discussed briefly:

“How Congress Maintains Endless War – System Update with Glenn Greenwald” - The Intercept, 9 July 2020

2:45: There is “this huge cleavage between how members of Congress present themselves, their imagery and rhetoric and branding, what they present to the voters, on the one hand, and the reality of what they do in the bowels of Congress and the underbelly of Congressional proceedings, on the other. Most of the constituents back in their home districts have no idea what it is that the people they’ve voted for have been doing, and this gap between belief and reality is enormous.”

Four crucial military-budget amendments were debated in the House just now, as follows:

1. to block Trump from withdrawing troops from Afghanistan.
2. to block Trump from withdrawing 10,000 troops from Germany
3. to limit U.S. assistance to the Sauds’ bombing of Yemen
4. to require Trump to explain why he wants to withdraw from the Intermediate Nuclear Forces Treaty

On all four issues, the pro-imperialist position prevailed in nearly unanimous votes - overwhelming in both Parties. Dick Cheney’s daughter, Republican Liz Cheney, dominated the debates, though the House of Representatives is now led by Democrats, not Republicans.

Greenwald (citing other investigators) documents that the U.S. news-media are in the business of deceiving the voters to believe that there are fundamental differences between the Parties. “The extent to which they clash is wildly exaggerated” by the press (in order to pump up the percentages of Americans who vote, so as to maintain, both domestically and internationally, the lie that America is a democracy — actually represents the interests of the voters).

16:00: The Chairman of the House Armed Services Committee — which writes the nearly $750B annual Pentagon budget — is the veteran (23 years) House Democrat Adam Smith of Boeing’s Washington State.

“The majority of his district are people of color.” He’s “clearly a pro-war hawk” a consistent neoconservative, voted to invade Iraq and all the rest.

“This is whom Nancy Pelosi and House Democrats have chosen to head the House Armed Services Committee — someone with this record.”

He is “the single most influential member of Congress when it comes to shaping military spending.”

He was primaried by a progressive Democrat, and the “defense industry opened up their coffers” and enabled Adam Smith to defeat the challenger.

*  *  *

That’s the opening.

Greenwald went on, after that, to discuss other key appointees by Nancy Pelosi who are almost as important as Adam Smith is, in shaping the Government’s military budget. They’re all corrupt. And then he went, at further length, to describe the methods of deceiving the voters, such as how these very same Democrats who are actually agents of the billionaires who own the ‘defense’ contractors and the ‘news’ media etc., campaign for Democrats’ votes by emphasizing how evil the Republican Party is on the issues that Democratic Party voters care far more about than they do about America’s destructions of Iraq and Syria and Libya and Honduras and Ukraine, and imposing crushing economic blockades (sanctions) against the residents in Iran, Venezuela and many other lands. Democratic Party voters care lots about the injustices and the sufferings of American Blacks and other minorities, and of poor American women, etc., but are satisfied to vote for Senators and Representatives who actually represent ‘defense’ contractors and other profoundly corrupt corporations, instead of represent their own voters. This is how the most corrupt people in politics become re-elected, time and again — by deceived voters. And — as those nearly unanimous committee votes display — almost every member of the U.S. Congress is profoundly corrupt.

Furthermore: Adam Smith’s opponent in the 2018 Democratic Party primary was Sarah Smith (no relation) and she tried to argue against Adam Smith’s neoconservative voting-record, but the press-coverage she received in her congressional district ignored that, in order to keep those voters in the dark about the key reality. Whereas Sarah Smith received some coverage from Greenwald and other reporters at The Intercept who mentioned that “Sarah Smith mounted her challenge largely in opposition to what she cast as his hawkish foreign policy approach,” and that she “routinely brought up his hawkish foreign policy views and campaign donations from defense contractors as central issues in the campaign,” only very few of the voters in that district followed such national news-media, far less knew that Adam Smith was in the pocket of ‘defense’ billionaires. And, so, the Pentagon’s big weapons-making firms defeated a progressive who would, if elected, have helped to re-orient federal spending away from selling bombs to be used by the Sauds to destroy Yemen, and instead toward providing better education and employment-prospects to Black, brown and other people, and to the poor, and everybody, in that congressional district, and all others. Moreover, since Adam Smith had a fairly good voting-record on the types of issues that Blacks and other minorities consider more important and more relevant than such things as his having voted for Bush to invade Iraq, Sarah Smith really had no other practical option than to criticize him regarding his hawkish voting-record, which that district’s voters barely even cared about. The billionaires actually had Sarah Smith trapped (just like, on a national level, they had Bernie Sanders trapped).

Of course, Greenwald’s audience is clearly Democratic Party voters, in order to inform them of how deceitful their Party is. However, the Republican Party operates in exactly the same way, though using different deceptions, because Republican Party voters have very different priorities than Democratic Party voters do, and so they ignore other types of deceptions and atrocities.

Numerous polls (for examples, this and this) show that American voters, except for the minority of them that are Republican, want “bipartisan” government; but the reality in America is that this country actually already does have that: the U.S. Government is actually bipartisanly corrupt, and bipartisanly evil. In fact, it’s almost unanimous, it is so bipartisan, in reality. That’s the way America’s Government actually functions, especially in the congressional votes that the ‘news’-media don’t publicize. However, since it lies so much, and its media (controlled also by its billionaires) do likewise, and since they cover-up instead of expose the deepest rot, the public don’t even know this. They don’t know the reality. They don’t know how corrupt and evil their Government actually is. They just vote and pay taxes. That’s the extent to which they actually ‘participate’ in ‘their’ Government. They tragically don’t know the reality. It’s hidden from them. It is censored-out, by the editors, producers, and other management, of the billionaires’ ‘news’-media. These are the truths that can’t pass through those executives’ filters. These are the truths that get filtered-out, instead of reported. No democracy can function this way — and, of course, none does.

Traders Will Soon Be Able To Buy CLOs & Other Risky Debt Products On Robinhood

From Zero Hedge:

Esoteric credit products like CDOs and CLOs gained mainstream notoriety ten years ago as politicians, pundits and a deeply humbled Wall Street accused them of helping to nearly destroy the global economy. But a few years ago, banks started looking for new ways to package and sell "safe" high-rated CLOs and other products based on the newly ascendant leveraged loans.

Now, it seems, lenders are facing a perfect storm: With the Fed making a foray into the corporate credit market, part of the central bank's quest to make investing losses a thing of the past (at least for now - or for as long as it can) and Robinhood-enabled retail traders buy up tech stocks, bitcoin, gold (or at least the precious metals ETFs that offer 'easy exposure' to gold and silver), ETF sponsors are quickly dreaming up new products to hawk to this newly invigorated generation of retail bagholders traders who understand only one thing about market dynamics: Prices simply don't go down.

And with brokerages now relying on bundling retail trades and selling 'order flow' to the big HFT firms - all of Robinhood's established competitors have now adopted this business model as commissions have gone out of fashion - there's a new perverse incentive to create products that will encourage mom-and-pop traders to play in markets previously reserved for institutional traders. And the latest example of this comes via Janus Henderson, the $337 billion asset manager that just filed to launch a new ETF that will allow Robinhood traders to buy into the highest-quality AAA-rated CLOs.

At this rate, retail traders will pile in to this new and exciting market just as the wheels are coming off.

At a time of mounting corporate defaults and deepening economic gloom, a new fund may be about to bring collateralized loan obligations to the masses.

Janus Henderson is planning a U.S. exchange-traded fund that will seek floating-rate exposure to the highest-quality CLOs, according to a filing with the Securities and Exchange Commission this week. While many loan ETFs exist, there are currently none dedicated to CLOs.

CLOs, which package and sell leveraged loans into chunks of varying risk and return, have drawn scrutiny in recent months as the coronavirus pandemic spurs a wave of corporate distress. They typically don’t attract retail investors, though an ETF would in theory make them far more accessible.

Wary day traders can rest assured: because the loans comprising these CLOs are among the safest and most highly rated on the market.

The riskiest corners of the $700 billion CLO market may be signaling trouble, but the highest-rated tier tends to be a safe space, he said.

"In the case of AAA CLOs, it’s a safe and low-risk asset class,” said the chief investment officer. "Yields are fairly low on AAA CLOs in the first place, but if investors can earn 150 to 175 basis points of spread on a short duration asset, it can be attractive." 

And with the Fed bent on keeping rates low until things get "back to normal", this might be only the beginning.

The central bank’s intent to keep them low for the foreseeable future could mean the more-than $4 trillion U.S. ETF market sees a spate of launches like the fund planned by Janus Henderson, according to Ken Monahan at Greenwich Associates.

"Given that yield suppression is here to stay it would seem, you’ll probably see a lot more of this," said the senior analyst covering market structure and technology. "RMBS and CMBS are probably not far off."

CLOs are a cousin of collateralized debt obligations, which became notorious for their starring role in the 2008 financial crisis.

There are several major differences, however, not least that CDOs bundle loans to consumers rather than businesses.

But once the Fed backstop is removed - if that ever happens - the only real beneficiaries of this product will be the fund sponsors who collect the management fees, and the HFT firms who front-run the order flow in the underlying CLOs.

CIA Fabricated Russiagate "Evidence", Says Former NSA Tech Chief

Authored by Eric Zuesse via The Duran,

An important public statement was made on July 27th by Bill Binney, the U.S. Government’s top expert on the internet, and on computer hacking. He had been the Technical Director of the NSA when he quit and became a whistleblower against that Agency while George W. Bush was the U.S. President and invaded Iraq on the basis of faked evidence.

Binney has now laid out, in this speech, the evidence that he wants to present in court against Barack Obama’s CIA, that it defrauded Americans to believe in “Russiagate” (the allegation that Russia ‘hacked’ the computers of Hillary Clinton and Democratic Party officials and fed that information to Wikileaks and other organizations). Binney cites evidence, which, if true, conclusively proves that Russiagate was actually created fraudulently by the CIA’s extensive evidence-tampering, which subsequently became covered-up by the Special Counsel Robert Mueller, in his investigations for the Democratic Party’s first (and failed) try at impeaching and removing from office U.S. President Donald J. Trump.

Here is the transcript of his 10-minute speech (and I add links to explanations of the meaning of technical phrases, and also boldface for emphasis of his key findings, and I place into [brackets] explanatory amplifications of my own), summarizing why he is convinced that the CIA (under President Barack Obama) did this frame-up against Russia, ‘Russiagate’ — it’s a case that he is seeking to present to Congress, and in court, and to debate in public, instead of to continue to be hidden from the public; he wants to show, and publicly to debate, this evidence, so that the public will be able to see it, and evaluate it, for themselves:

Basically the problem is that I can’t seem to get the forensic evidence into a court or up into the mainstream of evidence for defeating-refuting Russiagate. The point is that in the Veterans Intelligence Professionals for Sanity we have a bunch of technical people including Kirk Wiebe and I and some others and some affiliates that were in the UK who also joined the analysis process, and we were looking at the files posted by Wikileaks, because the allegation from the beginning is that Russia hacked the DNC and gave the emails to Wikileaks to publish. So, we looked at those emails, to see if there was something there that might give us some idea of how Wikileaks got that data. Well, in all the 35,813 emails that they posted in three batches, one [batch was] downloaded according to last modified times on the 23rd of May, and another on the 25th of May, and one [other] on the 26th of August, of 2016. Now, all those files, all 35,813, had a last modified time that was rounded off [rounded up] to an even [the next-higher] second, so they all ended up in even [meaning complete or full, not fractional] seconds. Now, if you know anything about data processing and data storage and things of that nature, there is a program that was quite common in the past [including 2016] using what’s called fat file formatting file allocation, table formatting, which is a process that when doing a batch process of data and transferring it to a storage device like a thumb drive or a CD-ROM, it rounds off the last modified time to the nearest even [next-higher] second, so that’s exactly the property we found in all that data posted by Wikileaks. Now, that said very simply this data was downloaded to a storage device a CD-ROM or a thumb drive and physically transported before Wikileaks could post it, so that meant it was not a hack [since there’s no rounding off to the next-higher second, as it would be if it’s a file that’s been carried over the internet], no matter how you look at it. We’re looking at the forensic evidence that says the DNC emails were not hacked, they were downloaded and physically transported to Wikileaks.

And, then, we had the other issue, [which was] with Guccifer 2. Now, Guccifer 2 came out shortly after, you know, Julian Assange announced that he had emails on Hillary Clinton, and so on, and the DNC. Well, we looked at all the material that Guccifer 2 posted and [he] was saying here are the hacks that I did on the DNC. He claimed he did one on the fifth of July, and one on the first of September, of 2016. Well, when you start looking at that — and we looked at the files — he posted a series of files, with file names, the numbers of characters in the file, and a timestamp at the end of the file. Then, the next file number of characters and timestamp, and so on, for I don’t know how many thousands of files. So, we looked at all those files, and we ran a program to calculate the transfer rate of all that data, because all you have to do is look at between the two time stamps, the file name and the number of characters in the file, and take the difference between the times [start-time versus end-time], and that’s the transfer rate for that number of characters, so we found that the variations ran from something like 19 to 49.1 megabytes per second. Now, that means for 19 to 49 million characters per second, and [yet] the world wide web would not support that rate of transfer, not for anybody who’s just, you know, a hacker coming in across the net, trying to do it. They won’t support that kind [speed] of transfer, and some people thought we could be wrong [and] that it could be done, and so we said okay, we’re going to try it. So, we organized some hackers in Europe, to try to transfer a data set from the U.S. over to Europe, to see how fast we could get it there, and we tried it from Albania, and Serbia, a couple of places in the Netherlands, and London. Well, we got various rates, but the highest rate we got was between the data center in New Jersey and one in London, and that was [the one which had gone at] 49.1 megabytes per second, and it went at 12 megabytes per second, which is one-fourth the rate, little less than one-fourth the rate necessary to do the transfer at the highest rate that we saw in the Guccifer 2 data, which meant it didn’t go across the net, so, in fact, the file rate transfers couldn’t. We were nowhere near the maximum rate that [would have been necessary if this had been a hack]. And so we said, okay, if anybody has a way of getting it there, let us know, and we’ll help you try to get to do that, and so far no one has ever come forward to dispute either the facts on the DNC data last file, modified file times, nor the transfer rates, for the Guccifer 2.

Plus, there’s another factor with Guccifer 2, there’s actually two more with Guccifer 2 data, the first of the five July data, and the one September data, if you ignored a date and hour they could merge like you’re shuffling a deck of cards the holes in the five July data timing were filled by data from the first September, that said to us that Guccifer 2 was playing with the data, separating in the two files, saying he made two different acts and and doing a range change on the date and the hour on the one file, so this to us was also an indication of fabrication on the part of Guccifer 2. Then, there’s another factor: when Guccifer 2 put out some from files on 15 june of 2016, with the signatures of Russian saying it’s a Russian hack, our fellows in the UK looking at the data found five of those files at a minimum, I don’t know they’re through yet looking, but they found five files that Guccifer 2 posted on the 15th of June with Russian signatures saying the Russians did this because of a signature they found the same five files posted by Wikileaks from a Podesta emails and they did not have the Russian signatures, so that meant Guccifer 2 was inserting Russian signatures to make it look like the Russians did the [alleged] hack. Well, if you go back to the Vault 7 release from Wikileaks again, from CIA, and you look, they have this Marble framework program that will modify files to look like someone else did the hack, and who were the countries that they had the ability to do that, in the in the Marble framework program? Well, one was Russia, the other was China, North Korea, Iran, and Arab countries. Well, to us, then, that means that the fabrication of the insert of the Russian signatures means that somebody modified the file and made it look like it fits the Marble framework definition of doing that kind of activity, which thus says all of this boosts with two materials pointing back now to CIA, as the origin of it, that’s the basic evidence we have, and none of it points to Russia.

In fact, we can’t even find anything that points to Russia, when in fact the Mueller indictment, or the Mueller report, and that Rosenstein indictment, named some that they called trolls for the Russian government, the IRA, the Internet Research Agency, out of St. Petersburg, and Russia, they named it in a court document, and, well, the IRA over there said we are no way near, we are not in any way associated with, the Russian government, so they sent lawyers in to challenge that in the court of law here in the U.S., and the court charged the government to prove it, and they couldn’t, they couldn’t prove anything, and so the judge basically reprimanded them and said you were never to mention the IRA as in any way affiliated with the Russian government again, so their whole case was falling apart. Everything looked like the rooks were two potato, was a fabrication, the alleged hack and so on, all applications, fabrication, and even if you look at some of the testimony that came out from the Crowdstrike CEO [hired by the Democratic National Committee], I think his name was Sean Henry, he said we we had no indications of exfiltrating the data, but we had evidence that it was exfiltrated. Now, if he’s talking about the last modified times as an indication of exfiltration, which it was but it wasn’t from a hack it was from a download, so that download then is an indication it was done locally as were the Guccifer 2 data that couldn’t go across the net. It was a download locally. All that stuff happened locally. In fact, some of the data and the Guccifer 2 material had all the time stamps indicating it was done on the East Coast of the United States, we had one in Central time, and one on the West Coast, but most of them fell on the East Coast, so it implied that all this stuff  [both Wikileaks and Guccifer 2] was happening on the East Coast, and that really pointed right back at CIA, as the origin of all this fabrication.

Binney wants to present this case at trial, against the CIA’s top officials under President Barack Obama.

A Record Amount Of Physical Gold Was Just Delivered On COMEX, Here's Why

From Zero Hedge:

Traders on the main gold futures exchange in New York just issued the largest daily physical delivery notice on record.

In the latest sign of how the market's norms have been upended by the price disconnect that struck in March, Bloomberg reports that traders on Thursday declared their intent to deliver 3.27 million ounces (over 100 tonnes) of gold against the August Comex contract, the largest daily notice in bourse data going back to 1994...

Source: Bloomberg

While millions of ounces of gold trade on the futures market every day, typically only a tiny fraction of that goes to delivery. But in recent months, huge amounts of bullion have flowed into New York and the COMEX has seen record deliveries.

Source: Bloomberg

As Jan Nieuwenhuijs of Voima Gold explains, three elements cause physical delivery on the COMEX to have reached record highs this year:

1. strong demand for futures in New York,
2. a persisting spread between the price of futures in New York versus spot gold in London,
3. and arbitrage.

Physical delivery on the largest gold futures exchange in the world, the COMEX in New York, has reached all time highs this year. Usually, delivery is “negligible.” What has changed?

An important change in the global gold market occurred on March 23, 2020. On that day the price of gold futures in New York started drifting higher than the price for spot gold in London. Ever since, the spread has persisted, though it continuously widens and narrows. The reason for this disturbance in the market can be read in my previous article “What Caused the New York vs. London Gold Price Spread and Why it Persists.”

To understand the shift in deliveries, first let's have a look at how the global gold market operated before March 23, when things still ran smoothly.

The Global Gold Market Before March 23, 2020

The world’s most dominant gold spot market is the London Bullion Market, where mostly “loco London” gold is traded. Meaning the metal is physically settled within the environs of the M25 London Orbital Motorway. The most dominant gold futures market is located in New York, where metal can be physically delivered within a 150-mile radius of the City of New York.

Before March 23, the price in London (spot) and the price in New York (near month futures contract) always traded in tight lockstep because of arbitrage. If, for example, the futures price would trade above spot, arbitragers would “buy spot and sell futures” until the spread was closed. Arbitragers would hold their positions—long spot, short futures—until maturity of the futures contract, because at expiry the price of the futures contract was guaranteed to converge with the spot price. In this example we can see that strong demand in New York would be translated into spot buying in London.

Worth noting is that when a futures trader rolled its position into the next month, and his initial futures buying was translated into spot buying in London by an arbitrager, on a systemic level the arbitrager would roll its position as well.

Of course, the opposite happened as well. When futures traded below spot, arbitragers would “buy futures and sell spot” until the spread was closed.

So far, a simplified version of the market before March 23.

The Global Gold Market After March 23, 2020

Since March 23 of this year, futures have persistently been trading above spot, though the spread isn’t constant. As a result, arbitragers aren’t assured the futures price in New York will converge with the spot price in London. An arbitrage trade as described above, through a position in both markets, incurs risk.

What arbitragers currently do to profit from the spread is buy spot, sell futures, fly the metal to New York, and physically deliver the gold. This is how the profit is locked in. If the spread between spot and futures is $40 per ounce, the arbitrager’s profit is $40 minus costs for transport, insurance, storage, etc.

Now you can see why the persistent spread between New York and London has increased physical delivery on the COMEX through arbitrage.

Conclusion

Physical delivery on the COMEX is elevated because of the current unusual situation in the global gold market. The gold delivered in New York has been imported from spot markets such as Singapore, Switzerland and Australia. U.S. imports directly from the U.K. are rare, because in London 400-ounce bars are traded and the main futures contract in New York requires smaller bars for delivery.

You might wonder who takes delivery from arbitragers that make delivery on the COMEX. Possibly, these are arbitragers, too. In the chart below you can see the spread between the “near month futures contract” and the “next near month futures contract.” This spread has also blown out on March 23. Arbitragers can buy the near month, and sell the next near month for a higher price. Subsequently, they take delivery of the near dated contract and make delivery of the further dated contract.

At the time of writing the near month (August) is trading at $1,973, while the most active month (December) trades at $1,994 dollars.

Arbitragers can buy long August and sell short December to collect $21 dollars per ounce.

One reason I can think of why the spreads persist, is because bullion banks are currently less active on the COMEX. Previously, bullion banks—having access to cheap funding—often performed the arbitrage trades.