Kremlin To Release US-Russia Communications On Election Meddling If Trump Agrees

Russia will declassify all correspondence with the United States regarding election meddling in the 2016 US election if the US agrees to it, according to state owned RT, citing a senior official of the Cyber Threats Response Center.

We are ready to make public all correspondence if the US side gives its consent to it,” said deputy director of the FSB-run CTRC, Nikolai Murashov, in a Tuesday statement to reporters. He added that the files are currently classified. 

Washington’s cooperation in probing the Democratic National Committee (DNC) hacking attacks was limited, the official said. Moscow had only received a number of messages “containing technical information about the hack,” Murashov explained.

Russian cyber security experts examined it even before Donald Trump’s inauguration. An exhaustive response was then sent to the American side.”

The US, for its part, is reluctant to collaborate with Russia on ensuring the security of cyberspace, he said, adding Washington “unilaterally blocked” bilateral efforts. –RT

A Russian hacking group affiliated with the Kremlin, Fancy Bear, was identified by cybersecurity firm Crowdstrike as the culprit behind a hack of the Democratic National Committee. Founded by Russian expat and Atlantic Council member Dmitri Alperovitch and funded with $100 million raised by Google, Crowdstrike was forced by the Ukrainian government to retract a report that their artillery had been hacked by Russia. 

CrowdStrike has retracted statements it used to buttress claims of Russian hacking

— Michael Tracey (@mtracey) March 28, 2017

And still, the US intelligence community has uncritically relied on Crowdstrike’s conclusion as the foundation of the Russian hacking narrative – despite credible evidence that the “hacked” DNC emails were copied locally at speeds highly unlikely over the internet – much less from halfway around the world. 

Snyder: The Rise And Fall Of Netflix

Authored by Michael Snyder via The Economic Collapse blog,

Netflix originally had a truly disruptive business model and they fundamentally changed the way that Americans consume media, but now they are heading for the same fate as Blockbuster. 

For years, Netflix was really the only game in town, but now content costs are spiraling out of control and new competitors with even deeper pockets threaten to become the dominant players in the industry.  Of course Netflix is not going to die overnight, but the writing is on the wall.  In fact, Netflix stock has already been crashing over the last several months as investors have begun to realize that the future is not bright for the company.  Back in the middle of the summer, the stock price peaked at $423.21, and as I write this article it is currently at $269.70.  That is an astounding collapse, and here are 5 reasons why Netflix is headed for so much trouble…

#1 The Loss Of Key Content

At one time Netflix boasted the most impressive lineup of television shows and movies in the entire world by a wide margin, but those days are long gone.  The steady loss of content threatens to become an avalanche over the next two years as Disney, Fox and WarnerMedia all pull key content from the service…

Disney is launching its own Netflix-style subscription VOD service next year — dubbed Disney+ — so Netflix will be losing Disney-owned content starting next year. Disney is acquiring 20th Century Fox, so expect more of Fox’s content to leave Netflix, as well. AT&T’s WarnerMedia had pegged Q4 2019 for its own broad-focused SVOD entry, so it’s also going to be pulling back its own stuff from Netflix.

#2 Disney+ Looks Like A Netflix Killer

If you are going to sign up for a streaming service for your family, would you want the one with Disney movies, the Marvel universe, Star Wars, Pixar and ESPN or would you want the one without all of those things?

Disney already has the best content, and they have much deeper pockets than Netflix does.  As Stephen McBride has noted, it is going to be very difficult for Netflix to compete with that…

Disney will launch its own streaming service called “Disney+” next year. It’s going to pull all its shows and movies off Netflix and put them on Disney+ instead.

This is a huge problem for Netflix because Disney has the world’s best content by a long shot. It owns household brands like Marvel… Pixar Animations… Star Wars… ESPN… ABC… X-Men… not to mention all the traditional characters like Mickey Mouse and Donald Duck.

#3 Amazon Prime Is Ramping Up Their Spending On Original Shows

Amazon is willing to spend billions on original content, and they have already been gobbling up market share.  Though still behind Netflix, Amazon has shown a willingness to do whatever it takes to become a major player.

For example, at one time you could watch Downton Abbey on Netflix, but now that entire series is exclusively found on Amazon Prime.

And when Amazon announced that it was going to spend 5 billion dollars on original content next year, that freaked out Netflix so much that they increased their planned spending on original content to 12 billion dollars

In February, Amazon (AMZN) announced it would spend $5 billion developing original shows and movies this year. In response, Netflix upped its spending by 50%.

Netflix had planned to spend $8 billion on shows and series this year… now it’ll spend roughly $12 billion. It now invests more in content than any other American TV network.

#4 Netflix Cannot Win A Content Arms Race Because They Are Already Drowning In Debt

Netflix subscribers may appreciate all of the new content that the company has been churning out, but it has come at a very great cost.

Netflix was already drowning in debt prior to 2018, and that debt has shot up by 71 percent to $8.3 billion so far this year.

Meanwhile, two competitors with much deeper pockets will be able to outspend the company very easily in future years

According to content spending numbers reported by research firm Ampere Analysis, Disney and Fox are projected to spend $22 billion per year on both original and acquired content. Similarly, Comcast and Sky are expected to spend $21 billion in 2018.

#5 The Cost Of Licensed Content Is Getting Out Of Control

Netflix has been heavily promoting their own original content, but 63 percent of the content that their subscribers consume is still from other sources…

Original content accounted for 37% of Netflix’s U.S. streams in October 2018, up from 24% a year earlier (and just 14% in January 2017), per video-measurement firm 7Park Data. But that means the majority (63%) of Netflix’s viewing is still from licensed content.

And that licensed content is becoming prohibitively expensive.  For example, Netflix just made a deal to renew streaming of “Friends” for another year for 100 million dollars

Warner Bros.-owned “Friends” stood at No. 3 — with its ongoing popularity helping to explain why Netflix was motivated to ink a one-year renewal for the ’90s-era sitcom, in a deal reportedlyworth $100 million.

It absolutely amazes me that millions of Americans are still willing to tune in to old reruns of that show, but apparently it is happening.

But there is no way that deal makes any economic sense whatsoever.

At this point, Netflix is bleeding cash at a rate that is staggering.  It has been projected that Netflix’s free cash flow will be negative 2.79 billion dollars in 2018, which will be the worst year that it has ever experienced.

Looking forward, Netflix will be steadily losing key content and subscribers to competitors, and it is inevitable that their borrowing costs will go up quite a bit.

Without sufficient revenue to service their exploding debt, it is only a matter of time before Netflix flames out and is forced to surrender.

Netflix shares are still worth $269.70 at the moment, but that won’t last for long.  Eventually the company is going to zero, and no amount of irrational optimism will stop that from happening.

USAF Confirms: Chinese Stealth Jet In Georgia Is A Mock-Up For War Preparations 

Last Thursday, the Aviationist tweeted a photo of a mysterious combat aircraft which resembled a fifth-generation Chinese fighter jet, claiming the photo was taken at the Savannah/Hilton Head International Airport, a commercial and military-use airport in Savannah, Georgia, on Wednesday, December 05.

What Appears To Be A Fake Chinese J-20 Mighty Dragon Allegedly Spotted At U.S. Base

— The Aviationist (@TheAviationist) December 6, 2018

For several days, wild theories circulated social media channels, of why a Chinese stealth jet was parked on the tarmac of a Georgian military base.

It turns out the aircraft is real, but only a mock-up for use by the US Marine Corps (USMC), 

“It is a full-scale replica and remained at the Air Dominance Center for a short period during the week of 4-6 Dec. The USMC is funding and directing the training objectives of this device […] Col. Emmanuel Haldopoulos, Commander of the Savannah Air Dominance Center, wrote the Aviationist in an email.

Haldopoulos did not specify the role of the mock-up stealth jet, but there is a reason to believe that the US military is preparing its pilots for an aerial battle over the South China Sea.

The photo caused huge speculation when the Aviationist published the story last Thursday. A civilian spotter who asked to remain anonymous shot the photo from public property.

Social media pundits viewed the photo and offered wide-ranging theories on what the aircraft was doing on an American military base. Many incorrectly questioned if the picture was authentic, some suggested the photo may have been altered or Photoshopped.

Before the Air Force confirmed the USMC-owned J-20 mock-up, Chinese Defense subject matter expert, Andreas Rupprecht, said the plane’s exhaust nozzles looked inaccurate and the landing gear was different from a real J-20 stealth fighter jet. These observations confirmed the aircraft was a mock-up and not a real J-20.

The J-20 mock-up hints that the US is preparing its pilots of F-22 Raptors and F-35 Lightning II Joint Strike Fighters for possible future dogfights with China.

The Chinese stealth fighter showed off its missile bays last month at an airshow in southern China.

The J-20’s chief designer recently said the world has yet to see the best that the aircraft has to offer. The J-20 mock-up shows the American military is taking the Chinese threat seriously, as the Pentagon prepares for war. 

Trump Slams “Foolish” Fed, Ready To Intervene In Huawei Case

Update: President Trump went on tell Reuters that he needs flexibility amid the trade battle with China:

“You have to understand, we’re fighting some trade battles and we’re winning. But I need accommodation too,” he said.

And stated that it would be a mistake if the Fed boosts rates next week: “I think that would be foolish, but what can I say?”

As an aside, the current market-implied odds of a rate hike next week are 74%…

*  *  *

Another night after another down market and another harangue of headlines jawboning progress on US-China trade talks.

Stocks and Yuan initially kneejerked higher on news that Huawei’s CFO has been granted bail, and then accelerated higher as Trump spoke to Reuters, once again reassuring the world that progress was being made with Xi.

Jeff Mason, Reuters White House correspondent, reports that Trump would consider intervening in case of Huawei CFO if it would serve national security and help with a China trade deal…

“If I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary,” Trump said.

Trump also said the White House has spoken with the Justice Department about the case, as well as Chinese officials.

“They have not called me yet. They are talking to my people. But they have not called me yet,” he said when asked if he has spoken to Chinese President Xi Jinping about the case.

And then said that China is buying tremendous amounts of soybeans and that he will meet again with President Xi on trade if necessary.

That sent Yuan spiking and US futures higher…

It seems the algos sensitivity to trade headlines has been turned all the eay up to ’11’.


The Middle Class Retirement Nightmare

Authored by Brian Maher via The Daily Reckoning,

Once again we bear grim news…

Millions of Americans may have to delay retirement for years – if not permanently.

Like a squirrel that hasn’t saved against approaching winter… 80% of American workers have under one year’s salary salted away for retirement.

This we learn from a recent report issuing from the National Institute on Retirement Security.

We are further informed that over 100 million working-age Americans own no retirement accounts whatsoever — including 401(k)s, individual accounts or pensions.

Meantime, 77% of Americans fall woefully behind “even the most conservative retirement savings targets for their age.”

Summarizing the dismal business is Diane Oakley, the report’s author and Cassandra:

The facts and data are clear. Retirement is in peril for most working-class Americans. When all working individuals are considered — not just the minority with retirement accounts — the typical working American has zero, zilch, nothing saved for retirement.

Thus for millions a “middle-class nightmare” is fast displacing the American dream:

The American dream of a modest retirement after a lifetime of work now is a middle-class nightmare. Even among workers who have accumulated savings in retirement accounts, the typical worker had a low account balance of $40,000. This is far off track from the savings levels Americans need if they hope to sustain their standard of living in retirement.

How has American retirement come to such a sad state?

Today we grope for clues, hoping to stub our toe upon some accidental truth.

We stumble at once upon a lead…

In the mid-1970s, Richard Nixon scissored the dollar’s final tether to gold.

The gold standard, neutered though it was in its dying days, nonetheless kept the balance of trade in a range.

A nation running a persistent trade deficit risked depleting its gold stocks.

The ersatz dollar removed all checks.

America no longer had to produce in exchange for goods… or worry about losing its gold.

“By the sweat of your brow you will eat,” Genesis instructs us.

But under the new dollar standard America could eat by the sweat of others’ brows… without perspiring a bead of its own.

Scraps of paper, rolling off an overworked printing press, were its primary production.

Ream upon ream went abroad in exchange for goods — real goods.

The international division of labor was opened to hundreds of millions, particularly peasants from the labor-rich fields of China.

They entered the factories in their millions, each toiling for one dollar per day. Perhaps two.

The competition depressed average American wages… which have never recovered.

Overall U.S. productivity has increased 77% since 1973, the Bureau of Labor Statistics informs us.

But average real hourly pay (adjusted for inflation, that is) has only increased 12.4% over 45 years.

45 years!

Thus we find the average American worker a hamster upon a wheel… running mostly in place:

Here our co-founder Bill Bonner reduces to concrete the abstract plight of the American worker:

In 1971, you could buy a new Ford F-150 for $2,500. At $4 an hour, it took 625 hours to buy the truck.

Today’s model costs $30,000, and the average hourly wage is $26. So the wage earner has to work for 1,154 hours to get a standard F-150. Put another way, he has to sell almost twice as much of his time to get a set of wheels.

But it is not only the F-150 owner who has lost the value of his dearest commodity — time:

You can do the same calculation for housing. An average man paid about $24,000 for the average house in 1971. Today, he pays $371,000. Priced in time, the house cost 6,000 hours in 1971 and 14,269 hours today… It takes more than seven years of work for the average guy to buy the average house today – four years more than it took in 1971.

Meantime, the past decade has only deepened existing trends…

The trickle-down theory of economic progress argues you must first feed the horses in order to feed the sparrows.

It certainly has its points – poor men do not open businesses. They do not provide employment.

But because of the massive distortions in today’s economy… the sparrows have largely gone without.

The Federal Reserve’s false fireworks have pushed the stock market to record heights — even with the latest blood and thunder drama. 

The artificially inflated market has put the asset-owning classes in easy waters.

As our own Charles Hugh Smith reports, those earning $1 million or more have captured 63% of all capital gains.

But the Main Street economy has pegged along at a lilting 2.1% annual pace.

Does that not explain how Donald Trump came to occupy his current address?

He pledged to bring jobs home… to make the Rust Belt glitter… and America Great Again.

The president will likely fall short of the glory — as would any mortal man.

Even a George Washington would throw up his arms in surrender.

The permanent bureaucracy — the Deep State — would have him under lock and key.

But what about growth in 2019… and beyond?

It goes on time borrowed as is.

Growth will come to a crawl as the nearly decade-long recovery breathes its last.

Meantime, the nation plunges deeper into debt… as the great middle class slips further down the greasy pole.

If the middle class keeps slipping, as we fear it will…

The retirement dreams of millions of Americans may slip away forever and ever…

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