Sympathy for the Devil? Trouble in Paradise for the Bankers

Editor's Note: The following is a guest post from PeakProsperity.com.

In our recent report, Banks Are Evil, we pulled no punches in making the accusation that the financial system is the root cause of injustice in today's society.

It's a good blood-boiler. You should read it if you haven't already.

Its main premise is this:

In my opinion, it's long past time we be brutally honest about the banks. Their influence and reach has metastasized to the point where we now live under a captive system. From our retirement accounts, to our homes, to the laws we live under --- the banks control it all. And they run the system for their benefit, not ours.

While the banks spent much of the past century consolidating their power, the repeal of the Glass-Steagall Act in 1999 emboldened them to accelerate their efforts. Since then, the key trends in the financial industry have been to dismantle regulation and defang those responsible for enforcing it, to manipulate market prices (an ambition tremendously helped by the rise of high-frequency trading algorithms), and to push downside risk onto "muppets" and taxpayers.

Oh, and of course, this hasn't hurt either: having the ability to print up trillions in thin-air money and then get first-at-the-trough access to it. Don't forget, the Federal Reserve is made up of and run by --- drum roll, please --- the banks.

With their first-in-line access to this money tsunami, as well as their stranglehold on the financial system that it all runs through, the banks are like a parasite feasting from a gusher on the mother-lode artery.

It should come as little surprise that, with all this advantage they've amassed, the banks have enriched themselves and their cronies spectacularly. They have made themselves too big to fail, and too big to jail. Remember that their reckless greed caused the 2008 financial crisis, and yet, in 2009, not only did bankers avoid criminal prosecutions, not only did the banks receive hundreds of billions in government bailouts, but they paid themselves record bonuses?

And the bonanza continues unabated today. By being able to borrow capital for essentially free today from the Fed, the banks simply lever that money up and buy Treasurys. Voila! Risk-free profits. That giveaway has been going on for years.

Couple that with the banks' ability to push market prices around using their wide arsenal of unfair tactics -- frontrunning, HFT spoofing and quote stuffing, stop-running, insider knowledge, collusion, etc -- the list is long. James Howard Kunstler is dead on: we don't have a free market anymore. Instead, we have rackets, run by racketeers. The rest of us are simply suckers to be fleeced.

But all is not roses if you're a banker these days. Even within the evil machine, there is great disparity in how the plunder is being divided.

Bad Times For Bankers?

A guy I've known since childhood works on the 'sell side' (investment/commercial banking, stock brokers, market makers) and has been telling me how cutthroat things have become over the past few years. The pay structure and job security have deteriorated notably. And he says the same is true for many of his colleagues on the 'buy side' (hedge funds, asset managers, institutional investors), too.

Really?

Even with enjoying the "unabated bonanza" described above, even with the markets back partying at all time highs, things are getting worse for many bankers?

Yes.

And while I personally can't conjure any sense of empathy for these poor devils, it looks like things are going to get even harder for them.

So what's going on here?

Well, it's mostly a story of the banking system's plundering ways coming back to bite it.

Capital Is Fleeing From Active To Passive Funds

First off, by flooding world markets with over $12 Trillion since the Great Recession, the central banks have pretty much destroyed "alpha".

Alpha is the "excess return" that fund managers' fees are based on -- i.e., "you're paying more for a smart guy like me to 'beat the market'". But when a tsunami of liquidity rises all boats at once, it's that money flood (i.e. the central bank money printing) that drives valuations. And its influence is so much larger than any other factor that it's really the only factor that matters. Great and crappy companies alike rise in price -- the "fundamentals" that fund managers use in their analysis become useless.

Which is why 66% of large-cap active managers failed to top the S&P 500 in 2016, and why 90% missed their benchmarks over the past 15-year period.

So it's no wonder that investment capital is fleeing from actively-managed funds to passively-managed ones. If the passive funds have much lower fees AND they perform better than the actively managed ones, why the heck shouldn't money flow into them?

Per CNBC:

A buoyant start to the stock market in 2017 couldn't stop investors from ditching actively managed funds.

The trickle away from stock pickers and toward indexes has turned into a flood, with more than half a trillion dollars heading into passive funds over the past 12 months, according to Morningstar.

Active management in total saw $13.6 billion in outflows for January, mitigated only by net inflows to bond funds, Morningstar said. U.S. equity saw $20.8 billion in outflows, bringing passive management closer to parity when it comes to domestic stock funds.

By contrast, passive management saw just shy of $77 billion in inflows. U.S. equity funds, which track broad indexes like the S&P 500 and its sectors and subsectors, pulled in $30.6 billion for the month.

Overall, actively managed U.S. equity funds now hold $3.6 trillion in assets while their passive counterparts hold nearly $3.1 trillion. All classes of passive funds have seen inflows of $563 billion over the past year, while active funds have suffered $325.6 billion in outflows.

"The massive exodus from actively managed U.S.-equity funds continued in January," Alina Lamy, Morningstar's senior analyst for quantitative research, said in a statement. "The tidal wave is showing no signs of stopping, threatening all but a select few and making active investing a dangerous ocean to swim in."

The result of this is tremendous mounting pressure for active managers to reduce their fees. Lower fees being charged on shrunken fund pools obviously affords fewer asset managers, who in many cases are now working for less compensation.

Keep in mind, between just the ECB and the DOJ, nearly $200 Billion of additional liquidity has been -- and continues to be -- injected into world markets each month(!). So, as the above article says, don't expect the tidal wave of capital fleeing actively-managed funds to stop while the central banks' liquidity spigots are still flowing.

The White-Collar Cost Of Automation

Finance was one of the first industries to embrace the automation boom, given the obscene profits that could be made. In his book Flash Boys, Michael Lewis described how the arms race of high frequency algorithms literally changed the game in terms of how financial instruments are traded -- and made $billions upon $billions of unfair profits for the big banks that invested in the technology.

Well, many of the bankers who cheered the boost the machines gave to their annual bonuses aren't cheering so much now. You know what algo-driven markets don't need? Human traders.

Below is photo of the UBS trading floor from 8 years ago, contrasted with one from this year (source: Zero Hedge):

8 Years Ago

Now

Per the Wall Street Journal:

Technology is replacing people on trading floors and in the middle and back offices where trades are checked, confirmed and settled. Some of this is to give investors an edge in markets with computer-driven tools such as algorithmic and high-frequency trading.

But technology also means more work can be moved offshore or to cheaper locations. More reliable internet links with India, for example, mean people can work together on the same documents or files in real time.

The total number of people employed by all kinds of banking in the U.K. has fallen 22% from its precrisis peak in 2008, or by about 120,000 jobs, according to data from Britain’s statistics office.

Here's another stark example:

Goldman Had 600 Cash Equity Traders In 2000; It Now Has 2

For the dramatic impact of technology, and specifically trade automation from algo, quant and robotic trading on today's capital markets, look no further than Goldman's cash equities trading floor at the firm's headquarters which, according to the MIT Tech Review, employed 600 traders its height back in 2000, buying and selling stocks for Goldman's institutional client clients. Today there are just two equity traders left.

As warned of in our earlier article Automating Ourselves To Unemployment, jobs lost to automation don't come back. More than that, the technology itself lowers the cost structure, ultimately lowering industry profits as other competitors invest in similar tech and the margins are competed down:

Structural changes to the equities business over the last several years, such as the rise of electronic trading, have knocked off around $15 billion from the equities fee pool, according to a report from Morgan Stanley and management consulting firm Oliver Wyman.

Electronic trading has dramatically increased trading volumes, while making the cost of trading much cheaper.

Oliver Wyman partner Christian Edelmann, who co-authored the report, does not see those revenues coming back. "Once the equities model has become technology driven, that's not going to change," he said.

A Cultural Shift To Cost-Cutting

And the jobs cuts aren't just related to technology. As profit margins are squeezed, players in the financial industry are looking for any and all reasons to cut costs.

A current victim of this trend is equity research. For decades, sell side firms like the investment banks offered their clients "expert analysis" from their research departments. Historically, that was bundled into the bank's overall fee it charged its clients.

But now, increasingly cost-conscious clients are demanding to know how much that research is costing them. Especially since almost all of that research doesn't even get read. A recent Reuters article showed that of the 40,000 research reports produced every week by the world's top 15 global investment banks, less than 1 percent are actually read by investors.

It's long been a poorly-kept secret that the research departments were a dependable vehicle for investment banks to bilk their clients for unnecessary profit. Now it looks like that ruse is over. And billions in revenue per year along with it:

Banks have already been trimming their research budgets. Spending on research at the top investment banks fell by just over half to $4 billion in 2016 from $8.2 billion in 2008, according to Frost Consulting.

An industry long known for its "Wolf of Wall Street" culture of excess is now counting its pennies. That's a very significant perception shift.

A Sign Of The End

What's important about all this is not sympathy for the poor bankers who have to accept lower wages or a pink slip. Consciously or unwittingly, they've been foot soldiers for a cabal that's done the greatest evil towards global human rights and prosperity over the past century. Personally, I'll happily take a front row seat, open up a bag of popcorn, and delight in the schadenfreude of watching that industry collapse on itself.

What is important is what all this tells us about where we are in this story. We are now getting close to the end.

For decades and decades, more and more sharks found their way into the financial industry. And for decades and decades, there was plenty of prey for them all to feast and fatten on.

But now we're at the point where there's much less to prey on. So the biggest sharks are now turning on the smaller ones. Those at the top of the industry are trying to preserve their share of the pie -- and if they have to do so by cannibalizing those below them on the org chart, so be it.

It has now become a shark vs shark world.

That's important.

This is happening, mind you, at a time when the banks are in their 8th straight year of enjoying practically-free money from the world's central banks, which is essentially a great wealth transfer from the public's coffers. And at a time when financial assets have been re-inflated to all-time highs.

If things have reached this cutthroat a state when Wall Street is booming, imagine how much more gruesome this "eating their young" dynamic can/will become during a market downturn.

We're at the point where those at the apex of power are becoming increasingly desperate to maintain their unfair advantage. And as the economic pie refuses to grow due to the twin overload of too much debt and declining net energy, these apex predators will turn on each other -- first to maintain their spoils, and then simply to survive.

Things will get nasty in a hurry during that stage, as we warned about in our recent report: Positioning Yourself For The Crash.

While you still can, you want to make sure the bulk of your investment capital is positioned for safety, and you want to make your lifestyle as resilient as possible so that, no matter what jarring developments the future may bring, you and the ones you love are least impacted by them.

RYAN: Kanye West and the Great Society

Graphic by Alexander Somoskey.

Donald Trump has been name-dropped by nearly every major rapper of the last 30 years, starting with a reference by Beastie Boys on their iconic album Paul's Boutique, the Sgt. Pepper of hip-hop.

He's been mentioned by Jay Z. Ludacris. Young Thug. Nelly. Kendrick Lamar. Juicy J. Rick Ross. Eminem. Big Sean. A Tribe Called Quest. Scarface. Lil Wayne. The Coup. Master P. Ice Cube. Mos Def. Raekwon, Ol' Dirty Bastard, and various other Wu-Tang Clan affiliates. R. Kelly. Pete Rock. Nas. E-40.

And don't forget this surreal moment in our nation's history.

Then-candidate Trump on SNL ... dancing to a Drake parody.(Screenshot from YouTube)

When Bun B referred to Trump on the Chopped-n-Screwed anthem "Pocket Full of Stones," he was keeping with a tradition of rappers admiring Trump. This only changed a few years ago.

But then there's Kanye West, who proudly donned the red MAGA hat after discovering Candace Owens and being called "a jackass" by our nation's first black President. Then Kanye was hugging President Trump in the Oval Office? While wearing a Make America Great Again hat, supposed symbol of white supremacy, Nazism, hate, evil?

(Screenshot from YouTube)

People flipped. Everyone did. Longtime critics suddenly — and bizarrely — embraced Kanye as an ally, while longtime defenders disowned him, abandoned him like nail clippings, often mocking his struggles with mental illness and labeling him, if you can believe it, a white supremacist.

Then, in a moment that changed music history, Kanye released the single "Ye vs. the People."

Ye vs. the People (starring TI as the People) www.youtube.com

In it, he challenges what he sees as the unspoken rule that black Americans have to vote Democrat. He had hinted at the idea on his track "Black Skinhead," from the hauntingly gorgeous album Yeezus, but now he was addressing it head-on, with the passion of a man going to Confession for the first time in a decade.

Why should black folks have to abide by any set of cultural or political or artistic guidelines to begin with? And, he argues, the pressure to adhere to this longheld framework is itself undergirded by a subtle and cleverly masked racism, imposed by a group of people who portray themselves as the champions of race and enemies of white supremacy and destroyers of dumb yokel rednecks with their Rebel flags and monster trucks and fully-automatic AR-15 assault weapons. All of which, it turns out, is some next-level projection.

Kanye also confronts the presence of these expectations and stereotypes in hip-hop. The idea that rappers must invoke a negative persona in order to succeed. And the moment they deviate from that image they are rebuked or ignored, even though the persona is damaging to the black community as a whole. Which is especially ironic given that the people who voice the most outrage tend to be highly privileged, supposedly progressive white folks who love to rant about white privilege and black oppression.

Is it better if I rap about crack? 'Cause it's cultural?
Or how about I'ma shoot you? or f**k your b***h?
Or how about all this Gucci, 'cause I'm f****n' rich?

Best of all, Kanye has answers. And they differ from the erudite solutions offered by, say, A Tribe Called Quest, who, like Kanye, have modeled a healthy, positive image of blackness for the black community.

A central theme within "Ye vs. The People" is empathy as power, rebellion, freedom.

Make America Great Again had a negative perception
I took it, wore it, rocked it, gave it a new direction
Added empathy, care and love and affection
And y'all simply questionin' my methods.

This concept is an extension of the powerful devotion to positive energy that Kanye adopted around that time, a purview he has cultivated into a wild new form of electronic gospel.

But his personal transformation was tough.

That [MAGA] hat stayed in my closet like 'bout a year and a half
Then one day I was like, "F**k it, I'ma do me"
I was in the sunken place and then I found the new me.

This is a struggle that many Americans undergo. Researchers call it the spiral of silence. The idea that the news media and social media present biased opinions as though they are fact, and when the message conflicts with a person's opinions or values, they feel isolated, alone.

Kanye and T.I. during the making of "Ye vs. the People"(Screenshot from YouTube)

As Kanye raps in "Ye vs. the People"

A lot of people agree with me but they're too scared to speak up.

Because we have an incredible ability to sense public opinion. So when we suspect that we hold a belief that rails against acceptable thought, we tend to keep quiet about it. That silence makes the opinion seem even more taboo, resulting in a more widespread silence.

In reality, many of these supposedly taboo opinions are not only popular, they are normal and practical and logical. Healthy, even. And the real danger is in demonizing them. But too many people are afraid they'll be ostracized for expressing their beliefs.

Like how — despite what we've been led to believe — most Americans cannot stand political correctness.

But the small minority of people who champion it are powerful and loud. They're like that cardboard city in North Korea, just visible enough from the border to make it seem like a thriving community. They're the Wicked Witch of the West, or Iago from Othello, or Plankton from Spongebob Squarepants.

So far, they have been successful. Although "success" by their metric is anarchic and primal, all destruction and loudness and people nervous to speak their mind. And the cost of rebellion can be devastating.

By the time Kanye West wrote "Yay versus the People," he had gotten sick of this power dynamic. So he broke the spiral of silence."

*

In the words of German philosopher Hans-Georg Gadamer, "Whoever has language has the world."

Humans alone have it.

But in order for us to know freedom in our world, our language has to be public, shared, active. Because each of us thrives constantly with language, a stream of it always in our mind. Aristotle defined "thought" as the infinite dialogue between the soul and itself. Conversation is the exchange of thought between people. When we converse, we simultaneously release our infinite dialogue and accept the other person's. By speaking, we shape the world and free ourselves.

*

Another way to say it is that Donald Trump might have inspired the song that could very well signify the end of Hip-Hop, which is not only the most popular genre of our zeitgeist, it's the most popular, and successful, form of music in American history, which is the most important era of musical history.

If the Beatles were bigger than Jesus, and Drake literally outpaces the Beatles, then, well, you get the point God forgive me. And Kanye is bigger than Drake. So who better to have the final word on the capacities of Hip-Hop than Kanye West?

Nobody.

Every genre must come to a close. There's a reason why people aren't eagerly awaiting the next great disco album, or flocking to arenas to hear the newest bluegrass superstar, or asking to get their hair done like the latest syringe-armed guitarist of Guns N Roses.

(Screenshot from Instagram)

The great era of Rock 'N' Roll ended roughly about the time Radiohead traded their guitars and drums for synthesizers and sequencers, not long after Kurt Cobain took an insane amount of heroin and cradled a shotgun in his guesthouse, only to be discovered several days later by an electrician. Even worse, Nickelback soiled Cobain's legacy with godawful anthems, and who have their own weird and contradictory and hilarious connection to President Trump.

These days, Rock N' Roll lives mostly via nostalgia, as evinced by the explosion of cover bands. Notice how you don't see any hip-hop cover bands. You will, someday. But, for now, Hip-Hop reigns supreme. And Kanye is the King.

The brilliant Nina Simone once told a reporter that "An artist's duty, as far as I'm concerned, is to reflect the times."

Because music accords itself to the gravity and creative truth of the era. And currently we entrust hip-hop with this complicated maneuver.

But the past year, Kanye has been crafting a new sound through his Sunday services, weekly jam sessions with acoustic musicians and a choir and everyone dressed in white, praying through song, herding us into a better place, looking above for guidance. If it's anything like his track "Ultralight Beam," it will bring calm to our divided culture.

Mark my words: The resultant album will usher in an entirely new era, a magical flash in human history.

So far, hip-hop has been the defiant child of R&B and Electronica, the grandchild of Spoken Word and Steve Reich Minimalism, with tinges of Punk. Not for much longer. Kanye will see to that. And, weirdly, President Trump has helped inspire this transformation.

Meaning, Donald Trump will have had a hand in reinventing music as a whole, in spreading a movement of positive reformation. Love him or hate him, it does not matter. What other politician can make that claim?

There's an optimism to this that Dave Chappelle captured in his now-infamous Saturday Night Live monologue, just days after Trump was elected, asking Americans to at least give the man a chance. And again in his special "Equanimity," when he said

I swear no matter how bad it gets, you're my countrymen, and I know for a fact that I'm determined to work shit out with y'all.

In a moment of now-tired irony, the usual suspects heaped a barrage of hate at Chappelle for these remarks. But their outrage does not matter, in the grand scheme of things. Because it is an incredible time to be alive. It's beautiful. We should never forget that, no matter how petty or outrageous daily life gets.

At the moment, we are a country that is — everywhere, secretly — hurting. But we are Americans. Together. This is America. And, every day, God delights in our greatness and our empathy and our endless gift for love. So open your heart and listen. Say what you need to say.

New installments of this series come out every Monday and Thursday. Check out my Twitter.

RYAN: Michael Bennet, Little League

Photo by Sean Ryan

Every day, life getting shorter. Every day, life going faster. Every day, like a roller coaster. These were the kinds of things that Michael Bennet was saying.

Michael Bennet, God bless him, he seemed like a decent lad. All week he had his family there. He said his campaign was their family vacation. He had had prostate cancer but would you believe he survived?

"Life is getting shorter," he said. "Every day."

Photo by Sean Ryan

He was well spoken. Dry. Talked with an air of consultation. Like you were in his office, and he had things to tell you.

Like a Little League coach who could actually be a coach someday.

*

I would encounter Bennet again the next day, at the Iowa State Fair.

Having just seen Sen. Kamala Harris (D-Calif.) at a small Baptist church, we ventured to the fair to see Bernie Sanders' riot of a Sunday speech. Bennet was on before him, so I got there early, and I paced off to get a restroom break. The media center is in the basement of the administration building, right by the Political Soapbox stage.

For whatever reason, the first-floor men's restroom has giant windows along the wall, and you can see right out onto the walkway that wraps around the building. I did not realize that this was the path that the candidates take to get to the stage.

Photo by Sean Ryan

And, this far into the 2020 presidential election, they never went many places alone. They had a press swarm and their wives and maybe an old friend who relocated here when the hurricane sank his house.

I was rushing. Panicking, really. Because I heard all the commotion. But nature abides by its own pace. And as I shuffled to the sink to wash my hands, my pants fell all the way down. I was exposed. Out in the open and in such desperation, you clobber yourself outside of time. It was all slo-mo with the Chopped-n-screwed voices as I scrambled to lift my trousers and audibly gasped the words, "Well just no." At that exact moment, that "accidental Renaissance" painting occurred as I locked eyes with Michael Bennet, slowly maneuvering the walkway.

These sorts of things happened, didn't they? There you were in a restroom, at an NFL game or a concert or maybe a bar, and you see someone you work with, or someone from church or school, and you lock eyes for a moment in confusion then revert to cave talk and shrug and get on with what you were doing. But it's weird when only one of you is actively part of the etiquette and allowances of a restroom and one of you is held to a higher standard, for the sake of common decency. Now let's say that you, the restroom occupant, happen to be credentialed press, and the outsider, Michael Bennet, happens to be a candidate for president of America.

Once the herd passed by behind him, I laughed a bit, quietly, because life could be very funny.

*

Onstage, Bennet, a senator from Colorado, gave the performance of a cake falling into a pool. Like he had been ghost-busted. Like he had spent the last two months learning the Fortnite dance moves and now that he had mastered them, suddenly Fortnite was for losers, and Fortnite dances, well, they were even worse.

The Political Soapbox is great because every candidate has 20 minutes. Those 20 minutes were theirs. Most of the time, they got romantic like a Backstreet Boy singing up toward an open window. Occasionally, they lost it. Bennet did neither. He belly-flopped into hay bales.

Photo by Sean Ryan

Remember that the growing crowd had the dangerous feel of a natural disaster. And it was gaspingly warm that day. So neither the crowd nor the environment were ready to give Bennet a freebie.

He gave a ravishing speech, full of neat invective. Then looked up and realized he still had 14 minutes on the clock. Oof. That was most of it, and he'd already done the Floss and the Robot and the Electro Shuffle, and honestly his shoulder was a little stiff from all that dance practice. So he opened the floor for questions.

Now, that was not the greatest idea. For one, this was not the type of place for such a thing. They called it a soapbox because you were meant to live out the phrase "on a soapbox" by ranting and fist-pounding and all other theatrics.

The Bernie Sanders supporters hadn't arrived en masse yet, so most of the people around the stage were clad in Trump gear. And they all had their hands up ready to ask him questions. Well, firebombs, really, masked as interrogative statements. Bennet shouted without breathing, then said, "I want to find a non-male person who has a question."

This did not sit well with the males who did not like the trend of personalizing all things, cautious gendering, and the sudden change of direction so that now they had to just listen.

Most people did not care.

"I do not support Bernie's plan," Bennet shouted. But would you believe the Bernie supporters had literally just arrived, you could smell their hair dye.

They jeered, then acted exactly — and I mean exactly — like the Trump supporters.

"I would rather support free pre-school than free college," he shouted. "Many people talk about... " but the jeering was too powerful. And the Bernie supporters had likely just had quinoa açaí bowls at their pre-Bernie brunch, so they were unstoppable. Well God bless the man for scratching "Give Presidency a Try" off his bucket list. Because at least he had a bucket list.

What did they have? Student debt and a restraining order? They being the growing factions of Bernie and Trump supporters in the audience. You could not see any pavement. It was just people and faces like the Mediterranean in the evening, all the way to the towering walls of the Grandstand.

Looking out at all that chaos, all that latent disaster, Bennet must have felt a deep stirring.

The night before, Slipknot headlined at the Grand Stand, a sold-out show. Rollicking and bursting and howling. How many drumbeats could drummer Jay Weinberg get per minute? At one point, vocalist Corey Taylor unleashed a demonic bellow, then adjusted his mask and looked out to all those people, those devoted fans, because many of them had Slipknot tattoos, and maybe he, like Bennet, indulged a moment for himself, a personalization of the grand setting, then shrieked, then persuaded the audience to lift their hands into the air, maybe toward a constellation of their choosing, and extend their middle finger like it was an egg landing on a pillow, which symbolizes the human condition.




New installments to this series come out every Monday and Thursday morning. For live updates, check out my Twitter.

President Trump couldn't personally make it to Houston for the 3rd Democratic Debate, so he paid $7,500 for a single-engine Cessna to fly in circles over Texas Southern University campus while pulling a banner that said, "Socialism will kill Houston's economy! Vote Trump 2020!"

For four hours, it chugged around up there. You could hear it everywhere. It was the soundtrack of the night.

You can just imagine Trump's face as he had the banner-plane idea. You can hear him putting in the order. You can see his list of demands. And at the very top, "I WANT THE LOUDEST PLANE YOU CAN FIND!!!"

*

Was that Bret Baier in the aisle, adjusting his reading glasses and thumbing at the strap of his comically small backpack as he crossed the blue-carpeted gymnasium? He looked like the human version of Wisconsin. He was saying something but all you could hear was the plane overhead.

Photo by Kevin Ryan

Bret Baier, the stoic host of "Special Report with Bret Baier" on Fox News and the network's chief political anchor. He's underrated, if you ask me. Legacy. Old-school. He just delivers the news, which is what most people want. He talks the way anchors used to talk, with the American accent unique to news anchors even though he was born in New Jersey and raised in Georgia.

I had spent the last year-and-a-half on a series of in-depth profiles on some of the major countercultural figures of our time. People like Jordan Peterson, Dave Rubin, and Carol Swain. So my first impulse was to rush over to Baier and profile the guy. Nobody else would, after all. The New Yorker, The Atlantic, Harper's. But they ought to. The man has a hell of a story.
He joined Fox News a year-and-a-half after it was founded, as the southeast correspondent in Atlanta. A few years later, on a Tuesday in September, nineteen terrorists hijacked four passenger airliners and crashed into America.

When the first plane hit, Fox producers told Baier to just get in his car and drive to New York City. They needed back-up reporters for the next day. When the second plane crashed into the south tower of the World Trade Center at 9:03 a.m., they said, "Step on it, Baier."

He and his producer were an hour outside Atlanta when American Airlines Flight 77 slammed into the Pentagon. Still a good 8 hours away, but closer to D.C. than to New York City. So they re-routed to Arlington, Virginia, as fast as they could. Past a blur of fields full of indifferent cows. Past houses full of people who could hardly talk, people who couldn't describe what they were seeing and hearing, all the smoke and the blood and the office-supply confetti. Past towns that barely moved, gas stations with nobody in them, people sunken into a far-away stare.

Yet there was the sun, with only a few bangles of cloud every so often. America had been paralyzed but the earth kept trucking along, quiet and unbothered. It must have felt strange for Baier, to speed down empty highways — toward literal death and chaos — under a perfect sky, below cascading light and color.

Nature doesn't care if we make it out alive.

*

That day, Baier reported live from a Citgo station across the street from the Pentagon, rubble in heaps of flame behind him. It was like he'd fallen onto a different planet and was reporting back to home.

The next day arrived and it was so quiet everywhere. Nobody knew a damn thing. We could not believe our eyes. We all turned to reporters and anchors for answers. Most often, they blurted out whatever they could.

Something about Bret Baier gave audiences a much-needed boost. Reliable, sturdy. Like he said what had to be said and not a word extra.

Fox kept him in D.C., indefinitely. A friend helped him find an apartment. He never went back to Atlanta. Two weeks later, Fox News appointed him Pentagon correspondent, a position that saw him travel the world, including 13 trips to Afghanistan and 12 to Iraq.

Halfway through George W. Bush's second term, Baier became Fox News' White House correspondent.

Then, a year before he would earn his current position as anchor, Baier became a father. His son was born with holes in his heart — five congenital heart defects. Twelve days later, the boy underwent open-heart surgery. Baier and his wife waited in tiled rooms drenched with flowers and ESPN and drab ultraviolet light, surrounded by machines full of beeps and whirring and beeps and whirring.

Baier's son has since undergone two additional open-heart surgeries, nine angioplasties, and one stomach operation. In an interview with Parents Magazine, Baier said that his son's health problems have "given me perspective about my job, going through policy and politics in Washington, D.C., to see the bigger picture."

*Part of the reason I couldn't tell whether or not it was Baier is he's usually up on the main stage. For the 2012 election, he moderated five Republican debates, and co-anchored FNC's America's Election HQ alongside Megyn Kelly.

The 2016 election would propel him into a much larger role. He anchored three Republican debates, but this time he had to handle Donald Trump.

Baier knew Trump personally, from before the election. They'd played golf together. He described Trump as "a nice guy outside of his TV persona" and never thought Trump would actually make a run for the Presidency. Onstage, Trump was much different. And Baier had been tasked with maintaining control.

A devout Roman Catholic, he appreciates a nice glass of wine and a fine cut of steak. He likes a good joke, too. In January, 2019, Baier signed a multi-year deal with Fox News to continue "Special Report." A few weeks later, he and his family went to Montana for a ski trip. The weekend was wonderful. But they had to get back to New York because Baier was scheduled to appear on "The Late Show with Stephen Colbert" that Tuesday.

Imagine him, again in a car hurtling toward a fateful destination. How he squinted through the frost-pocked windshield and gripped the steering wheel. As he guided the white SUV along the two-lane road to the airport. The land looked haunted, barren, lifeless. Everywhere, the world was frozen white. Snow and ice blanketing the fields, gauze over the sky.

At some anonymous intersection, Baier pumped the brakes, but the tires hit an ice patch, and the SUV spun loose. An oncoming car slammed into the driver's side, launching the vehicle into an embankment, wedged on its side. A man named Zach stopped his pickup truck and helped the family crawl free, and the Montana Highway Patrol rushed them to the hospital.

"Don't take anything for granted," Baier tweeted later. "Every day is a blessing and family is everything. It's always good to remind yourself of that before something does it for you."

Before every debate that he moderates, Baier spends 10 minutes alone, praying.

*

A Freedom of Information Act request in 2011 revealed that Fox News was actually right. That the Obama Administration really did hate them. And had intentionally excluded them from a press pool two years earlier. Then laughed about it.

The documents unearthed snarky emails between various high-ranking aides in the Obama Administration. In one, the Deputy White House communications director bemoaned Baier's reporting on the bias. "I'm putting some dead fish in the [Fox News] cubby — just cause Bret Baier is a lunatic." That same day, deputy press secretary Josh Earnest bragged in an email that "we've demonstrated our willingness and ability to exclude Fox News from significant interviews."

The Trump administration pulled a similar stunt in July, 2018 by banning a CNN reporter from the press pool. Trump and Fox News had developed a beneficial relationship by then. And CNN was a lifelong competitor, a public enemy.
That night, Baier delivered an official statement, "This decision to bar a member of the press is retaliatory in nature and not indicative of an open and free press. We demand better. As a member of the White House press pool, Fox stands firmly with CNN on this issue of access."

Fox News rebuked Trump in solidarity with CNN. It was a heartening gesture between two seeming enemies. Fox News were standing up for truth, defending journalism, rejecting tyranny even though the ban would have benefitted them as a company.

Who knows how many books and dissertations and articles have been written about Fox News, usually in relation to bias, usually with a scathing tone. The conclusions differ wildly, yet each one claims certitude.

Generally, academics and journalists have taken a doomsday tone when talking about Fox News. Accusations of evil, fear-mongering, bigotry, hatred, misinformation, propaganda, racism, homophobia, and so on.

Despite these outcries, Fox News has consistently held its spot as the most-watched network in the country. Imagine how that makes its critics feel.

In an August 3, 2018 appearance on Jimmy Kimmel Live, Baier said, "the biggest problem is that the people who are most critical of Fox are usually people who have not watched Fox News."

Fox News is composed of two distinct departments. Punditry and straight news. Or "opinion news" and "descriptive news." Consistently, surveys of the public rate Fox News as both the least- and most-biased news network.
Last year, a survey found Fox News to be the second most-trusted television news brand in the country, after the BBC.

In a separate study, Democrats rated its bias score at (negative) -87, while Republicans placed it at (positive) +3. Which is like if, at a football game, one referee said "Touchdown," while the other referee said "Turnover, leading to Touchdown for the Defense." It can't be both, can it?

Public opinion may not be the best metric for understanding Fox News, especially in 2019.

Quantitative studies have offered clearer conclusions. In 2016, a content analysis used crowdsourcing and machine learning to examine over 800,000 news stories published over a year by 15 major outlets, from the New York Times to Fox News. They wanted to chart media bias.

What they discovered is that news outlets are far more similar than we believe. Much of the perceived bias is a matter of separating "opinion news" from "descriptive news." For conservatives, it's punditry. For those on the left, it's op-eds and long form investigative pieces, although the left tends to insist that they're not biased, that they are instead just more apt to tell the truth, even though research has disproven this belief.

The researchers found a much larger bias-divide in opinion news, whereas descriptive news was practically neutral. One of the researchers described Fox News' descriptive news as "guided by similar news values as more traditional, legacy media."

University of California Berkeley sociologist Arlie Russell Hochschild wrote that "Fox News stands next to industry, state government, church, and the regular media as an extra pillar of political culture all its own."

Say what you want about Fox News, they play a crucial role in the so-called mainstream media. And, despite what Fox News will lead you to believe, they are definitely part of the mainstream. And they are by no means the innocent victim. And certainly not powerless. And they have all kinds of problems that I will not defend. But we'll talk about that in a later installment, the one about Kamala Harris at a gun control rally, advocating for propaganda.

*

After two months of political events, I suspected that different news networks have their own signifiers, like the distinct stripes and markings on various spiders.

Wall Street Journal reporters tended to carry old-timey notepads and interview any bystander they could find. Breitbart usually only sent one person, and he wandered around with his iPhone, recording every single thing. Politico, prim-suited men who could just as easily work on the stock market.

Most of the reporters dressed like that, in stagey business attire. Prim for a high school job fair. Meanwhile, the photographers, mostly men, looked like professional paintball players. The camera crews and technical staff were the only ones decked in tattoos and wearing sandals and generally not caring about the chaos all around them. On-camera talent were covered in makeup and shrink-wrapped into dresses or suits with chip-clips along the spine.

The Washington Post sent the classiest and most bored-looking people I have ever encountered. They never looked at their laptops as their fingers chopped at the keys, and you assumed they were pretending until you read their stories online. You could spot ABC because their camera crew wore faded red ABC hats. Associated Press looked like they had just come back from a battlefield assignment in Syria, and never donned the same press credentials as everyone else, preferring a tattered AP lanyard. And you always knew when someone was with the New York Times because they announced it to the entire room.

And Fox News? At democratic events, they usually hid. But not that day, in Houston, as Bret Baier walked up the aisle to a table a couple rows in front of me.

Most people arrived in the Media Filing Center several hours before the debate. Fox News got there just slightly after that, as everyone was wiggling in their seats and connecting their laptops to a shared outlet.

There were seven or so in the pack of Fox News, all grinning. They all had white to-go sacks from Chick-fil-A. And the room got quieter, so Trump's plane got louder. It was a double trolling event.

As host of the debate, ABC would be providing dinner. This information was included in the credentials email that all of us had received. So nobody else had brought food with them. No need.

Even better, I was familiar enough with that part of Houston to know that there was not a Chick-fil-A anywhere close to us. Who knew where they'd gotten that Chick-fil-A, but odds are it wasn't warm. Who knew if there was even any food in the bags.

They had brought Chick-fil-A into a building full of national media during the third Democratic Presidential debate. The 2020 election was already full of outrage about plenty of things, and one of them was Chick-fil-A. To some folks, the red chicken logo might as well have been a swastika. That very week LGBT activists had vehemently — cartoonishly — protested the opening of several Chick-fil-A's throughout North America. Chicken sandwiches had become yet another flag on the tug-of-war rope in the Culture War of our country.

To be clear, the political left was anti-Chicken and the political right was pro-Chicken. The media tended to lean anti-Chicken, and frequently wrote about anti-Chicken causes, often scolding pro-Chicken voices, or ignoring the struggles of the pro-Chicken community only to deny any opinion on Chicken at all. That was the cowardly part, of you ask me, the pretending like they weren't activists.

The Democratic candidates definitely leaned anti-Chicken. Sometimes they took it so far that it upset moderate anti-Chicken advocates. Because was it really so bad to eat Chicken? Couldn't you be anti-Chicken but also enjoy Chicken occasionally? Why did everything have to be either "all Chicken all the time unless you hate freedom" or "no chicken ever unless you support hate"?

The fight had spread everywhere. Airports, stadiums, malls, campuses. All had served as battlegrounds for the anti-Chicken versus the pro-Chicken.

The previous President was anti-Chicken. In fact, he may well have enflamed the entire movement. During his tenure, there were nationwide protests that saw pro-Chicken advocates angrily and proudly eating Chicken while anti-Chicken advocates protested outside and occasionally engaged in homosexual affection, which was being threatened by Chicken, according to them.

Every time the pro-Chicken folks bit into a Chicken sandwich, it was like they were gnawing away at the anti-Chicken people themselves. Degrading their identity. Because, for them, it was about the identity.

But the current President, unabashedly proud of his pro-Chicken stance, once served Chicken at the White House to some winning sports team, and the anti-Chicken activists saw it as proof that Chicken and hate go together. And maybe Chicken would even lead to the impeachment of the President they hate, which would mean the Vice President would become the President, but he's one of the most pro-Chicken people in America, so they'd have to impeach him, too. And the Supreme Court, it was overrun with pro-Chicken types.

This election, the Democratic front-runners competed for the bolder plan. They would end Chicken in America once and for all. They would obliterate our evil President and his Chicken Supremacy. Their stump speeches relied on harsh criticisms of pro-Chicken voters, who pretended to find the whole anti-Chicken movement amusing but were secretly enraged by it. In fact, they were certain that the anti-Chicken movement had been systematically silencing them for years, and that they had to fight for their Chicken in order to keep everything that they valued, even all the not-Chicken.

The media and the democrats and Hollywood and academia — all hated the Chicken, because they hated the pro-Chicken people. If they had their way, no more Chicken, ever again. And no more pro-Chicken deplorables. And tonight the anti-Chicken politico-culture complex would prove it, with long rants which get confirmed by glowing articles, calculated takedowns about the merits of anti-Chicken and the evils of pro-Chicken.

Yet here was Fox News, with actual Chicken. And they were smiling. Maybe in part because the police who were guarding us all tended to be pro-Chicken. And this was Texas, after all, an incredibly pro-Chicken state. But there were 49 other states and 14 territories, and all of them were fighting for or against Chicken.

Some experts even said we were on the cusp of a Civil War.


New installments to this series come out every Monday and Thursday morning. For live updates, check out my Twitter.

We've heard the catchphrase "follow the money" so often that it's nearly a joke. It gained added attention in the 1976 movie All the President's Men, which follows the story of the two journalists who uncovered Watergate. "Follow the money," their source told them, "and you'll find corruption."

Problem is, corrupters hide their bad behavior remarkably well. They are masters of disguise. But if you look closely enough, you can spot the seams splitting in their choreographed routine.

One technique that magicians use for psychological misdirection is called the false solution. The goal is to distract the audience, to make them believe that they know what's really happening. All the while, the machinations of the actual trick are happening right in front of them, because "implanting an unlikely and unfamiliar idea in the mind can prevent participants from finding a more obvious one."

Billions of dollars. Lost. Gone.

I want to tell you a story of tremendous corruption, masked cleverly, using many of the same techniques that magicians have used for centuries. Only it's not a rabbit disappearing into a hat or a coin vanishing behind an ear. It's billions of dollars. Lost. Gone.

And the people responsible are the same people who have been so monstrously worked up about Trump's impeachment. The same people screaming about Trump's malfeasance with Ukraine are actually the ones misbehaving in Ukraine.

It's essentially an elevated, highly organized form of projection. Only instead of one person lashing out at the world, it's an entire political party, right up to the top. The very top. Barack Obama. It's right there on video.

Or how about the audio recording we uncovered, with Artem Sytnyk, Director of the National Anti-corruption Bureau of Ukraine, openly admitting a connection between the DNC and Ukraine?

So far, the story told by the Democrats and the media has been about Trump and Ukraine. Every so often, you hear mention of Joe Biden's dubious history with the war-torn country.

We were the first to talk about Joe Biden's connections to Ukraine back in April, with our candidate profile on Biden.

It turns out, the whole debacle was much worse than we thought. It stretched further than Uncle Joe. What we found out is that the DNC was working with the Ukrainian government.

This isn't a conspiracy theory. And we have the documents to prove it.

Read on to discover everything you need for a 30-second elevator pitch that you can give to your friend and say, "Look, here's what you need to know. Here's what's really going on."

If anyone is guilty, they should go to jail.

Last night, in Ukraine: The Democrats' Russia I revealed the elaborate misdirection taking place.

I said it last night and I'll say it again: If Trump is guilty, he should go to jail. If anyone is guilty, they should go to jail. Because this is too important to the Republic.

Watch the hands, follow the money.

Here are the documents, video, and audio that we found in our reporting. This is the hard evidence that will help you explain this unbelievable situation to other people.



  • June 2016 State Department memos detailing contacts between George Soros' office and Assistant Secretary of State Victoria Nuland.




As you can see, we did a lot of research on this, and we've done our best to condense it for you. It still requires you to do your own homework, but there's a tremendous freedom to that.

You are seeking the truth.

You are bucking the mainstream media. You are rejecting them. And you are seeking truth. Because they abandoned truth a long time ago and they certainly aren't interested in recovering it now.