May 11

Today’s News 11th May 2022

  • NATO Country Among 1st To Adopt Law Declaring Russia's Invasion "Genocide" & "Terrorism"
    NATO Country Among 1st To Adopt Law Declaring Russia’s Invasion “Genocide” & “Terrorism”

    The Baltic country of Lithuania has become among the first NATO member countries to formally call Russia’s military action in Ukraine a “genocide” while legally declaring the invasion state-sponsored “terrorism”.

    Its parliament voted unanimously on Tuesday to adopt the motion into law, also calling for future Nuremberg style war crimes trials for top Russian officials – something which most pundits and legal experts agree is likely impossible to practically carry out.

    Lithuanian parliament in Vilnius: The Associated Press

    Reuters details that “The motion, co-sponsored by Prime Minister Ingrida Simonyte, said Russian forces’ war crimes in Ukraine included the deliberate killing of civilians, mass rape, forcible relocation of Ukrainian citizens to Russia and the destruction of economic infrastructure and cultural sites.”

    “The Russian Federation, whose military forces deliberately and systematically select civilian targets for bombing, is a state that supports and perpetrates terrorism,” the Lithuanian parliamentary motion reads. It follows a prior similar designation by Canada’s parliament.

    In mid-April, President Joe Biden raised eyebrows in calling Russia’s invasion a “genocide” for the first time. It was met with some controversy among analysts in the United States given that the United Nations’ definition for formal application of the term has strict requirements and typically isn’t thrown around loosely.

    A Russian parliament official was the first to respond to the Lithuanian action, explaining that the Baltic state is merely obediently following Washington’s lead: 

    Leonid Slutsky, head of the International Affairs Committee of Russia’s lower house of parliament, said the resolution was not legally binding and that it merely repeated what he called the United States’ Russophobic views.

    He said the resolution was part of an “anti-Russia project” and biased actions against Russia that “have nothing to do with reality,” the TASS news agency cited him as saying.

    A month ago Ukraine’s President Zelensky spoke virtually to Lithuanian parliament, which is in the capital of Vilnius, and declared that the country had been the “first” in Europe to come to Ukraine’s aid.

    “Dear Lithuanians, I am grateful to address you on behalf of the Ukrainian people today. You have been among the first to come to Ukraine’s aid. You remain among those who care most about peace and security in Europe,” he told the lawmakers. His message to various bodies of friendly countries’ lawmakers worldwide has focused heavily on allegations of Russian war crimes, claiming also that Russian forces actively target Ukrainian civilians – a charge the Kremlin has consistently denied.

    Tyler Durden
    Wed, 05/11/2022 – 02:45

  • US Sanctions ISIS Financial Facilitators Accused Of Child Trafficking
    US Sanctions ISIS Financial Facilitators Accused Of Child Trafficking

    Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

    The United States on Monday sanctioned a network of five ISIS financial facilitators accused of assisting the terrorist group in the smuggling of children out of displaced person camps for recruitment as fighters.

    An internal security patrol member stands in front of a convoy of trucks transporting Syrian women and children suspected of being related to the ISIS terrorist group, at the Kurdish-run al-Hol camp, in the al-Hasakeh governorate in northeastern Syria, on Dec. 21, 2020. (Delil Souleiman/AFP via Getty Images)

    In a statement, the U.S. Treasury Department said the five individuals—Dwi Dahlia Susanti, Rudi Heryadi, Ari Kardian, Muhammad Dandi Adhiguna, and Dini Ramadhani—worked across Indonesia, Syria, and Turkey.

    All of their property and assets in the United States will be blocked as a result of the sanctions.

    They were accused of “facilitating the travel of extremists to Syria and other areas where ISIS operates” and conducting financial transfers to support the group’s efforts in Syria-based displaced person camps.

    It stated that the network collected funds in Indonesia and Turkey for the group, “some of which were used to pay for smuggling children out of the camps and delivering them to ISIS foreign fighters as potential recruits.”

    “By designating them, we aim to expose and disrupt an international ISIS facilitation network that has financed ISIS recruitment, including [the recruitment] of vulnerable children in Syria,” Secretary of State Antony Blinken said in a statement.

    According to the Treasury Department, residents of displaced person camps in Syria include those who have been displaced by ISIS, as well as ISIS members, supporters, and their families.

    “ISIS sympathizers in over 40 countries have sent money to ISIS-linked individuals in these camps in support of ISIS’s future resurgence,” it said.

    The Al-Hawl camp has been recognized as “the largest displaced person camp in northeast Syria,” housing up to 70,000 people, most of whom are women and children.

    “In Al-Hawl alone, ISIS supporters have received up to $20,000 per month via hawala, an informal transfer mechanism; the majority of those funds transfers have originated outside Syria or passed through neighboring countries such as Turkey,” it added.

    The sanctions followed the 16th meeting of the Counter ISIS Finance Group of the Global Coalition to Defeat ISIS, on May 9. The CIFG is co-led by the United States, Italy, and Saudi Arabia and comprises nearly 70 countries and international organizations.

    “The United States, as part of the Global Coalition to Defeat ISIS, is committed to denying ISIS the ability to raise and move funds across multiple jurisdictions,” said Brian E. Nelson, the Treasury’s undersecretary for terrorism and financial intelligence.

    Tyler Durden
    Wed, 05/11/2022 – 02:00

  • Leftists Hate Free Speech Because They Fear Dissent, Not "Disinformation"
    Leftists Hate Free Speech Because They Fear Dissent, Not “Disinformation”

    Authored by Brandon Smith via Alt-Market.us,

    I think one of the most bizarre social developments of the past 10 years in the US has been the slow but steady shift of the political left as supposed defenders of free speech to enemies of free speech. The level of mental gymnastics on display by leftists to justify their attacks on freedom and the 1st Amendment is bewildering. So much so that I begin to question if liberals and leftists ever actually had any respect for 1st Amendment rights to begin with? Or, maybe the only freedom they cared about all along was the freedom to watch pornography…

    One can see the steady progression of this war on speech and ideas, and the end game is predictable: Is anyone really that surprised that the Biden Administration is implementing a Ministry of Truth in the form of the DHS Disinformation Governance Board? Can we just accept the reality at this point that leftists are evil and their efforts feed into an agenda of authoritarianism? Is there any evidence to the contrary?

    Before I get into this issue, I think it’s important to point out that it’s becoming tiresome to hear arguments these days suggesting that meeting leftists “somewhere in the middle” is the best and most desirable option. I see this attitude all over the place and I think it comes from a certain naivety about the situation we are facing as a country. Moderates and “normies” along with people like Bill Maher and Russell Brand are FINALLY starting to realize how bag-lady-crazy leftists are and the pendulum is swinging back slightly. But, it was conservatives that were calling out the social justice cult and their highway to hell for years.

    While everyone else was blissfully ignorant, we were fighting the battles that stalled the leftist advance. This is not to say I’m not happy to have moderates and reformed liberals on board, it’s a great thing. However, the time for diplomacy and meeting leftists halfway is long dead.

    There is no such thing as a “center” in our society anymore, either you lean conservative and you support freedom, or you lean left and support authoritarianism. There is no magical and Utopian in-between that we need to achieve to make things right. We are not required to tolerate leftist authoritarianism because of “democracy.” Sometimes certain ideologies and certain groups are mutually exclusive to freedom; meaning, they cannot coexist within a society that values liberty.

    We need to be clear about where the lines are drawn, because sitting on the fence is not an option. Walk in middle of road? Get squished like grape.

    To understand how leftists got to the point of enthusiastic hatred of free speech rights there are some psychological and philosophical factors that need to be addressed. These include specific ideals that leftists value that are disjointed or simply irrational:

    Hate Speech Is Real And Must Be Censored?

    First, as I have argued for many years, there is no such thing as “hate speech.” There is speech that some people don’t like and speech they are offended by. That is all.

    Constitutionally, there is no hate speech. People are allowed to say any offensive thing they wish and believe however they wish as long as they are not slandering a person’s reputation with lies or threatening them with direct bodily harm. If you are offended by criticism, that is your problem.

    Leftists believe the opposite. Instead of growing a thicker skin they think that “hate speech” should be illegal and that they should be the people that determine what hate speech is. This is a kind of magical door to power, because if you can declare yourself the arbiter of hate speech you give yourself the authority to control ALL speech. That is to say, as the thought police all you have to do is label everything you don’t like as hate speech, no matter how factual, and you now dictate the course of society.

    No one is capable of this kind of objectivity or benevolence. No person alive has the ability to determine what speech is acceptable without bias. Like the One Ring in the Lord of The Rings, there is no individual or group capable of wielding such power without being corrupted by it. Either there is no hate speech, or everything becomes hate speech.

    Free Speech Is Negated By Property Rights?

    This is in direct reference to social media websites and it’s an oversimplification of the issue of free speech and large social media platforms. Here is the conundrum or “false paradigm” if you will:

    Leftists argue for private property rights, but only when it comes to vast corporate big tech platforms like Twitter, Facebook, YouTube, etc. They like private property rights for companies that they think are on their side politically; they hate private property rights for everyone else. Just look at their response to Elon Musk’s recent Twitter buyout; the leftists are demanding that Musk be stopped at all costs, and they demand that the SEC and FCC step in to disrupt the sale because they claim Musk’s purchase is a “threat to democracy.”

    The media itself is clamoring to disrupt Musk’s takeover of Twitter. Whether or not you trust him, Musk’s acquisition of the platform has at least exposed the totalitarian attitudes of mainstream journalists for everyone to see. They are now even admitting on air that THEY control public discussion; that it is “their job,” and they see Musk as a threat to that monopoly.

    Why are Elon Musk’s private property rights less important or protected than the original shareholders of Twitter (Vangaurd, BlackRock, Morgan Stanley and a Saudi Prince)? Because Musk does not claim to represent leftist designs and interests? Leftists have no principles, they only care about manufacturing consent. Their method of winning requires that they never restrict themselves within the boundaries of values or morals. Again, this is the epitome of pure evil.

    Beyond that irony, though, is the deeper issue of government intervention vs business rights. Many people seem to think that government power is supposed to balance out corporate power when the truth is that governments and corporations work hand in hand; they are often one in the same entity.

    Twitter and other Big Tech platforms receive billions upon billions of dollars in government stimulus and tax incentives every year. Corporations as a concept are essentially a socialist creation. They enjoy limited liability and corporate personhood along with other special protections under government charter. With all these protections, incentives, bailouts and stimulus measures it is almost impossible for small and new businesses to compete with them. They represent a monopoly through cartel; they control the marketplace by colluding with each other and colluding with the government.

    A perfect example of this would be the coordination between multiple Big Tech companies to bring down Parler, a conservative leaning competitor to Twitter. This required some of the biggest companies in the world working in unison along with the blessing of government officials to disrupt the ability of a new company to offer an alternative, and all because Parler was getting too big.

    In the case of a private person’s home or their small business or small website, it’s true that there are no free speech rights. They can kick you out and they don’t have to give a reason. But when it comes to massive conglomerates that receive billions in OUR tax dollars in order to stay alive, no, they do not deserve private property rights. They have now made themselves into a public utility, and that means they are subject to constitutional limitations just as public schools and universities are.

    This is a concept that leftists just don’t grasp. They view corporate power as sacrosanct…as long as it serves their interests.

    Consider global corporations like Disney and their open intention to undermine the passage of Florida’s anti-grooming bill; this represents Disney’s vocal support for the sexualization and indoctrination of children in Florida schools. Leftists cheered the announcement and claimed that without Disney, Florida’s economy would be wrecked. Instead, the state turned the tables and took away incentives they had been giving to Disney for decades. Leftists responded by accusing Governor DeSantis of being a “fascist” and attacking free speech.

    But let’s break this down: Leftists happily supported Disney, a massive conglomerate, and their efforts to undermine the will of the voters in Florida. The state government stops them from undermining the voters by taking away the money and special incentives that belong to the voters. In turn, leftists claim this is a violation of Disney’s rights?

    The disparity between leftist arguments on Elon Musk’s takeover of Twitter vs. Disney’s attempted sabotage of Florida law could not be more confused. When it comes to Twitter they love the idea of censorship and react with panic when the mere prospect of free speech (within the confines of US law) is presented. When it comes to Disney, they say they love the idea of free speech, and anyone that wants to limit the corporation’s influence within Florida, no matter how criminal, is accused of fascism.

    The difference is obvious – Musk appears to be an uncontrolled element, while Disney is an “ally.” Free speech and property rights are only allowed for one side of the cultural divide. Leftists attacking freedom is free speech; defending ourselves against those attacks is a threat to democracy. It’s absurd.

    Disinformation Is A Threat And Censorship Is The Solution?

    The holy grail of censorship is not website filters and algorithms, because as we have seen with Twitter, those platforms could be built or purchased by someone that does not share in the leftist agenda. Instead, government intervention and the ability to define what is proper and improper discourse is the ultimate goal. The end game of authoritarians is always to write mass censorship into law, as if it is justified once it is codified.

    Corporate elites and political puppets like Biden pontificating about the threat of “disinformation” is hilarious for a number of reasons, but mainly because it is the power brokers and the media that have been the main purveyors of disinformation for a long time. Suddenly today they care about the spread of lies?

    I think it is obvious that such people are far more worried about the spread of facts, evidence and truth. They cannot debate on fair ground because they will lose, so, the only other option is to silence us. The institution of the Disinformation Governance Board is a clear indication that the establishment and the useful idiots on the political left are becoming DESPERATE.

    Their grip on the public mind is slipping, and we saw this during their recent attempts to enforce medical tyranny across the country in the name of covid. Luckily, conservatives in at least 20 red states fought against the implementation of covid lockdowns, mandates and vaccine passports which would have annihilated our constitutional rights forever.

    For years I heard the argument that when the jackboots arrived conservatives would do nothing, and now we know this is nonsense. Some of the few free places in the world during two years of pandemic fear mongering were red states in America, which coincidentally also have the highest concentration of conservatives.

    If you want to know what our country would look like had conservatives not stopped the tide of tyranny, just take a gander at China today. They have some of the strictest covid mandates on the planet and yet they are once again locking down millions of citizens due to “high infection rates.” Not only that, but they are starving their own people in the process.

    It’s madness, and it’s exactly what leftists were arguing in favor of just a few months ago. The US is mostly open today, just as red states like mine have been free for almost the entirety of the pandemic, and what has changed? Half the country is still unvaccinated – Is there mass death in the streets? Nope. Nothing has changed in terms of covid. The mandates made no difference whatsoever, other than to disrupt the economy and reduce people’s freedoms.

    Not long ago, pointing out this fact was considered “disinformation” that needed to be silenced in order to “save lives.” The Hunter Biden laptop story was called disinformation. The Wuhan Lab story was called disinformation. Fauci’s gain of function research on covid at the Wuhan lab was called disinformation. The fact that vaccinated people still contract and die from covid was called disinformation. In other words, what the government and corporate oligarchs call “disinformation” today is eventually called reality tomorrow.

    I would be happy to enter into a fair debate with White House Press Secretary Jen Psaki on any of the above issues and her views of what constitutes “disinformation,” but she would never do such a thing because she knows she would be crushed like a bug. It is not the government’s job to protect the public from information, whether real or fake. It is not their job to filter or censor data or ideas. They are not qualified to do this. No one is.

    Leftists operate from a collectivist mentality and this makes them believe that society is a singular entity that needs to be managed and manipulated to achieve a desired outcome. They have no concept of individual responsibility and discernment, but that is a side note to the real problem. They support information control because facts and ideas outside of their narrative could possibly damage that narrative. And, if the narrative is damaged they lose their feeling of power, which is all they really care about.

    If your narrative is so fragile that it does not hold up to scrutiny or alternative viewpoints then it must not be worth much of a damn. If you have to force people or manipulate people into believing the way you do, then your ideology must be fundamentally flawed. The truth speaks volumes for itself and eventually wins without force. Only lies need to be forced into the collective consciousness. Only lies require tyranny.

    Eventually reality wins over propaganda, unless total censorship and totalitarianism can be achieved. Nothing has changed in the 200+ years since the creation of the Bill of Rights. Free speech is still integral to a functioning society. Without it, society crumbles. They will claim that today things are different and that society needs to be “protected from itself.” This is what tyrants always say when trying to steal power.

    Most people reading this know by now that this is a war. It’s not a political debate that requires give-and-take, but a full-bore winner-take-all conflict. A DHS faction which is mandated to monitor our speech and propagandize the public is unacceptable and must be eliminated. Leftist and globalist monopoly of social media communications platforms is unacceptable and must be eliminated. The imposition of leftist and globalist ideology into the media narrative while censoring any contrary information is unacceptable and must be eliminated. This is about saving the remaining embers of American culture. If we do not take an aggressive stand now, the next generation may never know liberty. Everything we hold dear is at stake.

    *  *  *

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    Tyler Durden
    Wed, 05/11/2022 – 00:05

  • 'War Is A Racket': Visualizing US And Russia's Biggest Arms-Trading Partners
    ‘War Is A Racket’: Visualizing US And Russia’s Biggest Arms-Trading Partners

    The increase in conflicts worldwide, including in Ukraine and the Middle East, has shifted global focus back onto arms transfers between countries.

    For decades, countries proficient in arms manufacturing have supplied weapons to other countries in demand of them; and at the helm of these trades are the U.S. and Russia, which, as Visual Capitalist’s Anshool Deshmukh details below, have accounted for 57% of all international arms trades in the last 10 years.

    So who are the largest importers of arms from these two countries, and what is the military value of these trades?

    With the help of data from the Stockholm International Peace Research Institute (SIPRI) arms transfer database, the above infographic by Ruben Berge Mathisen visualizes the top 50 biggest arms recipients by value for both the U.S. and Russia in the last decade.

    The Military Valuation of Arms Transfers

    The military valuation of arms is measured in terms of trend-indicator values (TIV). This valuation reflects the military capability of a particular item rather than its financial value.

    Every weapon that falls under the conventional definition of major arms is allotted a TIV. The following are the most common weapons and components to be assigned a TIV.

    • Aircraft and armored vehicles

    • Artillery (>100mm in caliber)

    • Sensors and guided missiles, large air defense guns, torpedoes, and bombs

    • 100mm caliber artillery-armed ships (>100-tonne displacement)

    • Reconnaissance satellites and air refueling systems

    Instead of focusing on budget, examining TIV makes it easier to measure trends in the flow of arms between particular countries and regions over time, essentially creating a military capability price index.

    Biggest Recipients of U.S. Armaments

    The United States is the largest exporter of arms globally, responsible for 35% of global exports over the last 10 years to about 130 nations.

    Most recently, the biggest market for U.S. arms sales has been in the Middle East, with Saudi Arabia being the most prominent recipient of weapons. Over the last decade, the country has purchased 24% of total U.S. arms exports, with components worth over 18 billion TIVs.

    Here is a look at the top 10 recipients of arms from the United States:

    The U.S. remains the biggest global exporter of weapons globally, however, sales of military equipment to foreign countries dipped by 21% over the previous fiscal year, dropping from $175 billion in 2020 to $138 billion in 2021.

    Biggest Recipients of Russian Armaments

    Russia, the world’s second-largest arms dealer, was responsible for 22% of global arms exports between 2011 and 2021.

    In terms of TIVs, India remains the biggest importer of Russian weapons by a wide margin. India’s dependency on Russian-made arms is driven by its fight to quell the military assertiveness of China on one side and its constant skirmishes along the Pakistani border on the other.

    But despite the continued support of Russia and its President by the Indian Prime Minister, even in the wake of Russia’s war on Ukraine, some reports have shown that India has been looking elsewhere for arms in the last few years.

    Let’s take a look at some of the other biggest importers of Russian arms around the world:

    One relationship of significance is Russia’s provided weapons to Pro-Russia Ukrainian Rebels. Since 2014, Russia has offered arms and training to these rebels in their fight. These have included weapons of all sorts, from pistols and mines to tanks and missile launchers.

    Effect of the War on Ukraine on Arms Trades

    According to the latest data from SIPRI, the international arms trade fell by 4.6% in the last five-year period. Despite this, Europe has become a new hotspot for arms imports, seeing a 19% increase in arms transfers over the same time period.

    Countries like the U.K., Netherlands, and Norway were the largest importers, and other countries might follow suit.

    Experts claim that this upsurge is attributed to the crumbling relationship between Russia and Europe. Alarmed by Russia’s invasion of Ukraine, European countries have been reevaluating their defense budgets—as exemplified by Germany’s recent €100 billion commitment to boost its military strength.

    In the coming years, the U.S. and Russia’s biggest arms transfer partners are likely to shift. But which way will arms transfers trend?

    Tyler Durden
    Tue, 05/10/2022 – 23:45

  • China Accelerates Nuclear Buildup, Military Modernization; Biden Speeding US To Defeat
    China Accelerates Nuclear Buildup, Military Modernization; Biden Speeding US To Defeat

    By Judith Bergman of The Gatestone Institute

    • “The PRC likely intends to have at least 1,000 warheads by 2030, exceeding the pace and size the DoD projected in 2020.” — Military and Security Developments Involving the People’s Republic of China 2021, US Dept. of Defense.

    • “In space, China is putting up satellites at twice the rate of the United States and “fielding operational systems at an incredible rate.” — General David Thompson, the Space Force’s first vice chief of space operations, quoted in The Washington Post, November 30, 2021.

    • “Look at what they [CCP) have today…. We’re witnessing one of the largest shifts in global geostrategic power that the world has witnessed.” — General Mark Milley, Chairman of the US Joint Chiefs of Staff, breakingdefense.com, November 4, 2021.

    • “[T]he Chinese are building up their military capabilities in space, cyberspace, and in the conventional force. It’s all happening at the same time.” — Timothy Heath, senior international and defense researcher at Rand Corporation, Business Insider, January 4, 2022.

    • “To fully assess the China threat, it is also necessary to consider the capability of the associated delivery system, command and control, readiness, posture, doctrine and training. By these measures, China is already capable of executing any plausible nuclear employment strategy within their region and will soon be able to do so at intercontinental ranges as well.” ­­ — Admiral Charles Richard, Commander of U.S. Strategic Command, Senate Committee on Armed Services, April 20, 2021.

    • There is now as well the added probability of China and Russia engaging in military coordination…. a strategic partnership of “no limits” and with “no forbidden areas” in an agreement that they said was aimed at countering the influence of the United States.

    • This cooperation has already seen China undermining Western sanctions on Russia and supplying Russian President Vladimir Putin with the lifeline he needs to continue his war in Ukraine.

    • “The friendship between the two peoples is iron clad.” — Chinese Foreign Minister Wang Yi, Associated Press, March 7, 2022.

    • “For the first time in our history, the nation is on a trajectory to face two nuclear-capable, strategic peer adversaries at the same time, who must be deterred differently.” ­­ — Admiral Charles Richard, Senate Committee on Armed Services, April 20, 2021.

    • [T]his is NOT the time for the US to cancel the sea-launched nuclear cruise missile (SLCM-N), as President Joe Biden plans to do.

    • Meanwhile, Biden’s proposed defense budget risks speeding the US to defeat by insufficiently taking into account the current skyrocketing inflation, as acknowledged in early April by Chairman of the Joint Chiefs of Staff Gen. Mark Milley, Defense Secretary Lloyd Austin and Pentagon comptroller Mike McCord. “This budget assumes an inflation rate of 2.2%, which is obviously incorrect because it’s almost 8%,” said Milley. “Because the budget was produced quite a while ago, those calculations were made prior to the current inflation rate.”

    • “Nearly every dollar of increase in this budget will be eaten by inflation. Very little, if anything, will be left over to modernize and grow capability.” — Representative Mike Rogers, (R-Ala.) House Armed Services Committee, Defense News, April 5, 2022.

    The accelerating pace of China’s nuclear buildup is concerning in itself, but even more so given that the military buildup constitutes just one, but significant, part of China’s general military buildup and modernization. Pictured: DF-17 hypersonic missiles at a military parade in Beijing, China, on October 1, 2019. (Photo by Kevin Frayer/Getty Images)

    When the Pentagon assessed China’s nuclear arsenal in its annual report to Congress on China’s military power in November 2020, it projected that China’s nuclear warhead stockpile, which the Pentagon then estimated to be in the low 200s, would “at least double in size” over the next decade. The Pentagon also estimated that China was “pursuing” a “nuclear triad”, meaning a combination of land-, sea- and air-based nuclear capabilities.

    Just one year later, in November 2021, the Pentagon found itself acknowledging that China’s nuclear buildup was taking place at an astonishing speed, with the nuclear warhead stockpile now possibly quadrupling from the estimated low 200s in 2020 over the next decade:

    “The accelerating pace of the PRC’s nuclear expansion may enable the PRC to have up to 700 deliverable nuclear warheads by 2027. The PRC likely intends to have at least 1,000 warheads by 2030, exceeding the pace and size the DoD projected in 2020.”

    In addition, China is no longer merely “pursuing” a nuclear triad but appears to have already achieved the basics of it:

    “The PRC has possibly already established a nascent ‘nuclear triad’ with the development of a nuclear-capable air-launched ballistic missile (ALBM) and improvement of its ground and sea-based nuclear capabilities.”

    China, according to the report, is also “constructing the infrastructure necessary to support this force expansion, including increasing its capacity to produce and separate plutonium by constructing fast breeder reactors and reprocessing facilities,” while “building hundreds of new ICBM silos, and is on the cusp of a large silo-based ICBM force expansion comparable to those undertaken by other major powers.”

    The accelerating pace of China’s nuclear buildup is concerning in itself, but even more so given that the military buildup constitutes just one, but significant, part of China’s general military buildup and modernization. Last summer, for instance, China tested its first hypersonic weapon. In space, China is putting up satellites at twice the rate of the United States and “fielding operational systems at an incredible rate,” according to General David Thompson, the Space Force’s first vice chief of space operations. China and Russia’s combined in-orbit space assets grew approximately 70% in just two years, following a more than 200% increase between 2015 and 2018 according to Kevin Ryder, Defense Intelligence Agency senior analyst for space and counterspace in the U.S.

    According to General Mark Milley, chairman of the U.S. Joint Chiefs of Staff:

    “If you look at, again, 40 years ago, they had zero satellites…They had no ICBMs…They had no nuclear weapons… They had no fourth or fifth-generation fighters or even more advanced fighters, back then… They had no navy…They had no sub-force. Look at what they have today… So if you look at the totality, this test [of a hypersonic weapon] that occurred a couple weeks ago, is only one of a much, much broader picture of a military capability with respect to the Chinese. That is very, very significant. We’re witnessing one of the largest shifts in global geostrategic power that the world has witnessed.”

    According to Timothy Heath, a senior international and defense researcher at the Rand Corporation think tank:

    “It’s important to see the modernizing nuclear arsenal as part of the bigger picture, in which the Chinese are building up their military capabilities in space, cyberspace, and in the conventional force. It’s all happening at the same time.”

    On April 20, 2021, U.S. Strategic Command’s chief Admiral Charles Richard made it clear in testimony to the Senate Armed Services Committee that China is no longer a lesser nuclear threat than Russia:

    “While China’s nuclear stockpile is currently smaller (but undergoing an unprecedented expansion) than those fielded by Russia and the United States, the size of a nation’s weapons stockpile is a crude measure of its overall strategic capability. To fully assess the China threat, it is also necessary to consider the capability of the associated delivery system, command and control, readiness, posture, doctrine and training. By these measures, China is already capable of executing any plausible nuclear employment strategy within their region and will soon be able to do so at intercontinental ranges as well. They are no longer a ‘lesser included case of the pacing nuclear threat, Russia.” (Emphasis in original).

    China’s nuclear acceleration is not all, however. There is now as well the added probability of China and Russia engaging in military coordination: In February, the two powers declared that they were entering into a strategic partnership of “no limits” and with “no forbidden areas” in an agreement that they said was aimed at countering the influence of the United States.

    This cooperation has already seen China undermining Western sanctions on Russia and supplying Russian President Vladimir Putin with the lifeline he needs to continue his war in Ukraine. China has not only supplied material support through a variety of deals with Russia, it has also refrained from condemning Russia’s invasion and has criticized the sanctions.

    In March, Chinese Foreign Minister Wang Yi called Russia the “most important strategic partner” for China.

    “No matter how perilous the international landscape, we will maintain our strategic focus and promote the development of a comprehensive China-Russia partnership in the new era… The friendship between the two peoples is iron clad.”

    On April 19, China reassured Russia that it will continue to increase “strategic coordination.”

    China-Russia cooperation is going to affect US strategic deterrence. Admiral Richard told the Senate Armed Services Committee in early March that the US needs to have plans for scenarios in which the two powers cooperate militarily, adding:

    “I’m very concerned about what opportunistic aggression looks like. I’m worried about what cooperative aggression looks like… We do not know the endpoints of where either of those other two are going either in capability or capacity. We’re just now starting to work out what three-party stability looks like, what three-party deterrence dynamic works out.”

    In his April 20, 2021 testimony to the Senate Armed Services Committee, Richard said:

    “For the first time in our history, the nation is on a trajectory to face two nuclear-capable, strategic peer adversaries at the same time, who must be deterred differently. We can no longer assume the risk of strategic deterrence failure in conflict will always remain low.”

    In the light of China’s accelerating nuclear buildup — and the nuclear threat that Russia poses with its thousands of tactical nuclear weapons — this is NOT the time for the US to cancel the sea-launched nuclear cruise missile (SLCM-N), as President Joe Biden plans to do.

    The missile, according to the Wall Street Journal, “is considered a ‘tactical’ nuclear weapon that has a lower yield than ‘strategic’ options and might be used on battlefield targets. The missile could be launched from submarines or destroyers” and “is needed to deter Russia and others” and, according to the article, would also be useful “in dissuading China from using a nuke on Taiwan, without the longer and fraught debate of, say, putting American nuclear weapons on Japanese soil… [and] reduce proliferation at a volatile moment.”

    The acceleration of China’s nuclear and military modernization, and the new situation of tri-polar deterrence that the U.S. finds itself in for the first time, necessitate increases in US military research and development, acquisition and procurement. Meanwhile, Biden’s proposed defense budget risks speeding the US to defeat by insufficiently taking into account the current skyrocketing inflation, as acknowledged in early April by Gen. Milley, Defense Secretary Lloyd Austin and Pentagon comptroller Mike McCord. “This budget assumes an inflation rate of 2.2%, which is obviously incorrect because it’s almost 8%,” Milley noted. “Because the budget was produced quite a while ago, those calculations were made prior to the current inflation rate.”

    “Nearly every dollar of increase in this budget will be eaten by inflation,” Representative Mike Rogers (R-Ala), a member of the House Armed Services Committee, said. “Very little, if anything, will be left over to modernize and grow capability.”

    Tyler Durden
    Tue, 05/10/2022 – 23:25

  • US Consumer Debt Accelerates Towards $16 Trillion
    US Consumer Debt Accelerates Towards $16 Trillion

    According to the Federal Reserve (Fed), U.S. consumer debt is approaching a record-breaking $16 trillion. Critically, as Visual Capitalist’s Marcus Lu details below, the rate of increase in consumer debt for the fourth quarter of 2021 was also the highest seen since 2007.

    This graphic provides context into the consumer debt situation using data from the end of 2021.

    Housing Vs. Non-Housing Debt

    The following table includes the data used in the above graphic. Housing debt covers mortgages, while non-housing debt covers auto loans, student loans, and credit card balances.

    Trends in Housing Debt

    Home prices have experienced upward pressure since the beginning of the COVID-19 pandemic. This is evidenced by the Case-Shiller U.S. National Home Price Index, which has increased by 34% since the start of the pandemic.

    Driving this growth are various pandemic-related impacts. For example, the cost of materials such as lumber have seen enormous spikes. We’ve covered this story in a previous graphic, which showed how many homes could be built with $50,000 worth of lumber. In most cases, these higher costs are passed on to the consumer.

    Another key factor here is mortgage rates, which fell to all-time lows in 2020. When rates are low, consumers are able to borrow in larger quantities. This increases the demand for homes, which in turn inflates prices.

    Ultimately, higher home prices translate to more mortgage debt being incurred by families.

    No Need to Worry, Though

    Economists believe that today’s housing debt isn’t a cause for concern. This is because the quality of borrowers is much stronger than it was between 2003 and 2007, in the years leading up to the financial crisis and subsequent housing crash.

    In the chart below, subprime borrowers (those with a credit score of 620 and below) are represented by the red-shaded bars:

    We can see that subprime borrowers represent very little (2%) of today’s total originations compared to the period between 2003 to 2007 (12%). This suggests that American homeowners are, on average, less likely to default on their mortgage.

    Economists have also noted a decline in the household debt service ratio, which measures the percentage of disposable income that goes towards a mortgage. This is shown in the table below, along with the average 30-year fixed mortgage rate.

    While it’s true that Americans are less burdened by their mortgages, we must acknowledge the decrease in mortgage rates that took place over the same period.

    With the Fed now increasing rates to calm inflation, Americans could see their mortgages begin to eat up a larger chunk of their paycheck. In fact, mortgage rates have already risen for seven consecutive weeks.

    Trends in Non-Housing Consumer Debt

    The key stories in non-housing consumer debt are student loans and auto loans.

    The former category of debt has grown substantially over the past two decades, with growth tapering off during the pandemic. This can be attributed to COVID relief measures which have temporarily lowered the interest rate on direct federal student loans to 0%.

    Additionally, these loans were placed into forbearance, meaning 37 million borrowers have not been required to make payments. As of April 2022, the value of these waived payments has reached $195 billion.

    Over the course of the pandemic, very few direct federal borrowers have made voluntary payments to reduce their loan principal. When payments eventually resume, and the 0% interest rate is reverted, economists believe that delinquencies could rise significantly.

    Auto loans, on the other hand, are following a similar trajectory as mortgages. Both new and used car prices have risen due to the global chip shortage, which is hampering production across the entire industry.

    To put this in numbers, the average price of a new car has climbed from $35,600 in 2019, to over $47,000 today. Over a similar timeframe, the average price of a used car has grown from $19,800, to over $28,000.

    Tyler Durden
    Tue, 05/10/2022 – 23:05

  • More Direct Links Confirmed Between Saudi Arabia & 9/11 Hijackers In Latest FBI Document Dump
    More Direct Links Confirmed Between Saudi Arabia & 9/11 Hijackers In Latest FBI Document Dump

    Authored by Brian McGlinchey via Stark Realities,

    Over the past several months, the FBI released thousands of pages of material relating to its investigation of Saudi government links to the 9/11 attacks. This wave of declassifications was pursuant to Executive Order 14040, which President Biden issued on Sept. 3 under pressure from more than 1,800 survivors, family members and first responders who threatened to protest his presence at memorial events if he didn’t make good on a 2020 campaign promise to boost 9/11 transparency.

    The published documents are riddled with redactions, but a Stark Realities review of the trove has uncovered two instances in which the FBI neglected to redact names of interest to FBI investigators—and to attorneys representing 9/11 victims and insurers in their civil suit against the Kingdom of Saudi Arabia.

    The first inadvertently-published name is “Mana.” A sworn declaration from a former FBI agent suggests the full name is of this individual is Ismail “Smail” Mana, who worked at the Saudi consulate in Los Angeles at the time the first two 9/11 hijackers arrived in the city.

    The FBI concluded that, on February 1, 2000, Mana met at the consulate with a Saudi man, Omar al-Bayoumi, who would—later that same day—meet Khalid al-Mihdhar and Nawaf al-Hazmi, the first two hijackers to arrive in the United States, take them under his wing and facilitate their transition into American residency in San Diego.

    The second mistakenly-published name is “Johar,” who’s described as having been “tasked” by Saudi consulate official Fahad al-Thumairy to pick up the same two hijackers at the airport and “take care of them during their time in Los Angeles.” The same former FBI agent’s declaration suggests the full name of this person is Mohammed Johar.

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    Each name is concealed on the first reference in a paragraph about them, but then left unredacted on a single subsequent reference.

    According to the redaction key that accompanies the released documents, both names were to be withheld as “information restricted from public release under the Privacy Act of 1974.” The names were, however, to be produced in the 9/11 civil suit, with attorneys bound to maintain their secrecy. The Department of Justice has yet to respond to a request for comment; this story will be updated if it does.

    Note: FBI documents are not evidence; assertions in FBI documents may prove false; behavior that appears suspicious may have a benign explanation; and association with the hijackers doesn’t equate to foreknowledge of their intentions.

    Saudi Consulate Employee Smail Mana Said to Have “Extremist Views” 

    Mana’s name appears in a March 20, 2014 document summarizing the status of Operation Encore, a once-secret investigation into Saudi government links to the 9/11 attacks launched in 2007.

    Mana is described as “an individual who was known to have extremist views” and who “has never provided adequate explanation…of his role aiding Bayoumi in facilitating the hijacker’s arrival and settlement in California.” The paragraph where his name is revealed appears elsewhere in the trove of documents—but the same reference is redacted.

    “Mana” is thoroughly redacted in this document

    Former FBI Special Agent Catherine Hunt referenced this paragraph—which had already been released with Mana’s name redacted—in a 2018 sworn declaration on behalf of the 9/11 plaintiffs.

    “I believe Smail Mana is the individual referenced in the paragraph and that the FBI has evidence that he met with al-Bayoumi at Saudi Arabia’s Los Angeles Consulate on February 1, 2000, just prior to the meeting of al-Bayoumi with the hijackers at the Mediterranean restaurant,” she wrote.

    Hunt interviewed Johar as part of her post-FBI work as a consultant for Kreindler & Kreindler LLP, one of the law firms representing 9/11 victims against Saudi Arabia. “Mr. Johar told me that he had been subpoenaed by a New York Grand Jury….the Grand Jury subpoena involved the 9/11-related investigation of an employee of Saudi Arabia working at its Los Angeles Consulate named Smail Mana aka Ismail Mana,” she wrote.

    In the trove of more than 900 documents spanning over 4,000 pages released under Executive Order 14040, there are undoubtedly other passages about Mana, but with his name properly redacted. A passage in a 2021 document describes an individual in a way that’s similar to the paragraph where Mana’s name is revealed. The redacted individual is said to be a local hire to the consulate “who may have met with al Bayoumi before his supposed chance encounter with al-Hazmi and al-Mihdhar.”

    The memorandum quotes a source who seems to describe that same individual as enthusiastically reacting to the 9/11 attacks by saying, “Isn’t it great that our brothers are fighting?” The same passage says “a phone associated with [redacted] later had contact with the support network of the hijackers in Virginia.”

    According to another document with a similarly-described, redacted investigation subject (a consulate employee questioned about meeting Bayoumi on or about February 1, 2000), a witness said the redacted individual was “very vocal against Christians, Jews and the enemies of Islam.”

    Another source referenced in that same 2016 document “stated the Saudi Consul General in LA wanted to fire [redacted] for storage and distribution of extremist Muslim literature at the consulate but Thumairy and [Mohammed] Muhanna used their influence with the Saudi government to keep [redacted] in place.” Thumairy “was part of a Saudi-based network operating out of the Embassy and Consulates that distributed funds and support to extremists, and, it appears in some case[s], terrorist organizations,” a 2009 document says.

    Muhanna, who was a diplomat at the Los Angeles consulate, is described in various other records as an “Islamic extremist associated with a radical form of Salafi ideology” who is “heavily connected/linked to Saudi Sunni extremists operating inside the U.S.”

    Thumairy and Muhanna were later removed “at the behest of the Saudi Ministry of the Interior,” according to another memorandum.

    Beyond Mana’s single named appearance in the recently-released FBI files, there are very few references to him anywhere else on the internet. One is found in a 9/11 Commission memorandum summarizing a 2003 interview of Bayoumi in Saudi Arabia. It says only that Bayoumi denied recognizing the name “Ismael Mana.” The memorandum does not explain who Mana is or why the question was asked.

    Another reference is found in a 2020 discovery ruling in the 9/11 suit against Saudi Arabia. Judge Sarah Netburn said the kingdom’s searches for documents relating to Mana’s duties and responsibilities at the consulate “were likely insufficient.”

    Bayoumi: A Linchpin in the Saudi-9/11 Investigation

    The alleged meeting between Bayoumi and Mana is of intense interest because it came within a few hours of a central event in the 9/11 plaintiffs’ case against Saudi Arabia: Bayoumi’s Feb. 1, 2000 encounter with hijackers Mihdhar and Hazmi at the Mediterranean Gourmet restaurant near the King Fahad Mosque in Los Angeles, about two weeks after their Jan. 15, 2000 arrival in the United States.

    On that day, Bayoumi traveled to Los Angeles from his home in San Diego, ostensibly to renew his visa at the Saudi consulate. FBI files say he met privately with a consulate employee—Mana, apparently—before visiting the King Fahad mosque and then the Mediterranean restaurant where he met the two men who would serve as “muscle” hijackers on American Airlines Flight 77, which struck the Pentagon.

    Soon after meeting Bayoumi, the hijackers moved to the same San Diego apartment complex where Bayoumi lived. Bayoumi co-signed the lease and secured a cashier’s check for their security deposit, for which they immediately reimbursed him in cash. Two individuals, Mohdar Abdullah and another whose name is redacted, say Bayoumi instructed them to assist Hazmi and Mihdhar during their time in San Diego. One of them told the FBI that Bayoumi said he—Bayoumi—was “responsible” for Hazmi and Mihdhar.

    Bayoumi maintains that his initial encounter with the hijackers was coincidental, and that he struck up conversation because he heard them speaking in Gulf region accents. However, key details in his version of events conflict with witness accounts; his own statements have also been inconsistent.

    At the time, Bayoumi was a “ghost employee” of a Saudi aviation company—salaried without reporting to work. A 2017 document decisively confirms a long-running suspicion about Bayoumi: “Recent source information confirmed that al Bayoumi was, at the time of the 9/11 attacks, employed as a paid cooptee of Saudi Arabian intelligence services.”

    Some, including 9/11 Commission executive director Phillip Zelikow, speculate that Bayoumi wasn’t in league with the hijackers so much as he was monitoring them on behalf of Saudi intelligence. “The information that Bayoumi might have been a paid informant…if it is true, actually tends to cut the other way,” Zelikow told Business Insider in an article published last week.

    Informed speculation about Bayoumi’s potential motivations requires an examination of his ideology. Regarding his propensity to promote extremism, the 9/11 Commission Report stated, “We have seen no credible evidence that [Bayoumi] believed in violent extremism or knowingly aided extremist groups.”

    However, a recently-released 2006 document contains a jolting characterization that’s first being reported here: The document calls Bayoumi a “9/11 financier” who provided “substantial financial support” to Sheikh Abdel Rahman Barzanjee, “the new leader of Ansar Al-Islam in Europe,” as well as to Ansar al-Islam itself.

    Ansar al-Islam was a Kurdish, Salafist group formed in northern Iraq by former al Qaeda and Taliban members who’d fought in Afghanistan. The group was designated as a terrorist organization by the U.S. government in 2004, and merged into ISIS in 2014.

    During his time in southern California, Bayoumi was in frequent contact with Osama Bassnan, a Saudi who was reported to have hosted a party for Sheikh Omar Abdul Rahman—aka “The Blind Sheikh”—prior to the 1993 World Trade Center bombing which led to conviction on various conspiracy charges.

    Another FBI report says Bassnan asked someone pointed questions about how anthrax and small pox are transmitted. In 2001, Bassnan asked someone if it was “true that, just prior to dying, a small pox victim suffers extreme abdominal pain.” Also in 2001, Bassnan’s wife had a book titled, “Chemical and Biological Weapons: Anthrax and Sarin.” She had tabbed a section “that showed skin coming off the body.”

    While living in southern California, Bassnan and his wife received checks totaling some $74,000 from Princess Haifa, the wife of Prince Bandar, a close confidant of President George W. Bush who was at the time the Saudi ambassador to the United States. Bayoumi’s wife was reported to have received money from Bandar’s wife too.

    Bassnan also received more than $10,000 from a member of the Saudi royal family who was in Houston along with a Saudi delegation for a summit meeting with Bush. Some speculate that Bassnan was in line to succeed Bayoumi in a Saudi intelligence role in California.

    In late September 2001, Bayoumi was arrested in London by New Scotland Yard and held for a few days of questioning about his assistance to Hazmi and Mihdhar. He was released without charge. A search of Bayoumi’s papers, however, yielded a page of handwritten mathematical calculations and a diagram of an airplane in flight. According to last week’s reporting by Mattathias Schwartz at Business Insider, “its existence wasn’t noted until 2007—three years after the 9/11 commission issued its final report.”

    A 2012 FBI analysis of the diagram—by two special agents with engineering degrees who tapped the expertise of an experienced commercial airline pilot—comes to an ominous conclusion.

    “Given a distance from a target, the altitude at that location, and the current airspeed, one could calculate the rate of descent and plug it into the computer on a plane to initiate a descent to that target,” the report says. The pilot couldn’t conceive another use for the equation.

    Entertaining a possible benign explanation, the 9/11 Commission’s Zelikow told Schwartz, “It is possible that someone working in civil aviation might have worked on such equations, for various reasons.”

    However, according to FBI files, Bayoumi’s roles in the aviation industry—outside of his no-show job in southern California—were financial in nature, with job titles like aviation fees checker, budget clerk, accounts checker and accountant. His educational background was likewise focused on finance.

    [I’m compelled to note that, outside of major media, Zelikow has been the subject of sharp criticism of his leadership of the 9/11 Commission, including from me. Zelikow’s detractors cite conflicts of interest from his close association with the exceedingly Saudi-friendly Bush administration, and a host of indications that he steered the commission away from an earnest investigation of Saudi government links to the attacks.]

    FBI Source: Johar “Tasked” with Helping Two Hijackers

    According to the FBI document in which it’s revealed, Johar “never admitted to directly being tasked by al-Thumairy” with helping the hijackers “but he did admit to spending time with and assisting al-Mihdhar and al-Hazmi with various things during their time in Los Angeles.”

    In her sworn declaration, former FBI Special Agent Hunt shared some of what she learned in her interview with Johar.

    “Johar assisted the hijackers with regard to their lodging during the first two weeks they were in Los Angeles,” she wrote. “Johar admitted that he took the hijackers to the Mediterranean restaurant…where the hijackers had their ‘chance meeting’ with al-Bayoumi.”

    Separately, an FBI document describes a person who “was tasked by Thumairy to assist Hazmi and Mihdhar while they were in Los Angeles.” The same paragraph quotes a redacted person as having called the hijackers “two very significant people.” It’s not clear whether the speaker was the person tasked to assist them or someone else. Continuing in that document, that same person tasked to help the hijackers— presumably Johar—reportedly told someone he was going to be taking Hazmi and Mihdhar to the Mediterranean restaurant.

    When someone asked why he’d take them there—given the poor food and service—the person “stated he just needed to take them there.” Another source noted that “people would go to that restaurant to have private meetings.”

    These two unintended public disclosures aren’t the first in the case. In May 2020, Yahoo’s Michael Isikoff was first to report the FBI accidentally revealed the name of Mussaed al-Jarrah, a mid-level official at the Saudi embassy in Washington suspected of directing support to the same two hijackers.

    Mana’s and Johar’s ultimate significance remains to be seen as the mammoth 9/11 civil suit grinds along its glacial path toward trial. However, the FBI’s inadvertent publishing of their names brings one more measure of clarity to a case shielded from public scrutiny by the U.S. government since the attacks that killed 2,977 people and changed much of the world for the worse.

    Stark Realities undermines official narratives, demolishes conventional wisdom and exposes fundamental myths across the political spectrum. Read more and subscribe at starkrealities.substack.com

    Tyler Durden
    Tue, 05/10/2022 – 22:45

  • CCP Smart Satellite "Live Streamed" US Nimitz-Class Aircraft Carrier Off New York 
    CCP Smart Satellite “Live Streamed” US Nimitz-Class Aircraft Carrier Off New York 

    The Chinese Communist Party (CCP) is using an advanced intelligence-gathering satellite for hunting US aircraft carriers and other military assets worldwide, according to South China Morning Post.

    Space researcher Yang Fang and her team at DFH Satellite Co., Ltd in Hong Kong published a report in the domestic peer-reviewed journal Spacecraft Engineering that reveals China’s People’s Liberation Army (PLA) used an AI-powered satellite to detect and “live stream” the USS Harry S. Truman. 

    A remote sensing satellite, powered by artificial intelligence technology, lurked in low Earth orbit above North America on June 17 of last year and automatically detected the Nimitz-class aircraft carrier off the coast of Long Island, New York. It captured footage of the vessel conducting naval maneuvers, such as adjusting formation and making emergency maneuvers. 

    Fang said the satellite is incredibly powerful and can analyze hundreds of frames of high-definition images per second for strategic targets — something that would take ground-based computers much longer. And humans would struggle at this very intel-gathering task. 

    Yang’s team determined Beijing has made a breakthrough in “weight reduction” and image recognition with the algorithm that only needs about 3% of the calculation power used by traditional algorithms when conducting similar tasks. 

    The satellite is equipped with a family of AI chipsets that can perform multiple tasks, and if one chip fails, another would come online as backup and immediately take over tasks. 

    Researchers didn’t name the satellite but said it also detected and obtained positions of military assets in northeastern Australia. 

    This new type of intelligence gathering via AI-powered satellites could one day have a more significant role in decision-making for PLA commanders. Beijing believes that future warfare is through high-tech weapons aided by supercomputers. 

    The revolution in AI is crucial for PLA to enhance its weapons race with the West as a global power struggle is well underway with Washington. CCP wants to retake Taiwan, dominate the South China Sea and the East China Sea, and even become more prevalent in the Pacific. 

    Tyler Durden
    Tue, 05/10/2022 – 22:25

  • "Inflation Has Peaked": Here's What To Expect In Tomorrow's CPI Report
    “Inflation Has Peaked”: Here’s What To Expect In Tomorrow’s CPI Report

    With the massively illiquid market poised on the edge of the negative gamma abyss, tomorrow’s CPI print could easily crash stocks if the number is above the consensus estimate of 8.1% (for headline, 6.0% for core), or alternatively could spark a huge bear market short squeeze. The extremely binary outcome is why there has been so little conviction and liquidity in stocks in recent days, as few traders were willing to put on material risk ahead of the print.

    So what to expect? Here, opinions differ with most forecasting that inflation will have peaked in March largely due to base effects, however, the rate of its decline from here on out is unclear.

    Starting first with the skeptics, surprisingly we find JPM economist Michael Feroli with one of the highest estimates – at 0.4% M/M and 8.3%Y/Y, he is above Street consensus (if below last month’s prints of 1.2% and 8.5%). In Feroli’s view that we may have one or more elevated prints before we start to see a significant decline in official measures of inflation.

    According to JPM economists, energy prices look to have come off somewhat in April following their March surge, and he believes that the energy CPI declined 0.2% in April. But this decline could be offset by another strong increase in food prices (forecast: 0.8%) and another solid gain for the ex.-food and energy core index (forecast: 0.39%).

    While JPM’s headline forecast is above consensus, its core view is below: in April, JPM expects core CPI to drop from 6.5% to a still-strong 5.9%. Here, Feroli says that while “price increases for the rent measures have been solid lately, helping push headline and core inflation higher” he thinks April increases were similar to the rent trends, with tenants’ rent up 0.47% and owners’ equivalent rent rising 0.43%. While that may be true, it is now clearly the case that asking rents have peaked and are declining on a Y/Y basis as the following chart of data from Apartment List shows. However, since the BLS owner’s equivalent rent series lags about 5-6 months, we may still see some residual increases in April and/or May. In any case, those seeking real-time trends, we have clearly hit an inflection point and the coming sharp slowdown in US consumption and/or recession, assures that within a few months, rents will stop growing on a Y/Y basis.

    Besides rents, vehicle prices have also cooled after an earlier surge, with price increases for new vehicles moderating in recent months and used vehicle prices turning lower.

    In the April CPI, JPM expects more of the same with new vehicle prices edging up 0.1% and used vehicle prices declining 2.0%. (BLS is changing its methodology starting with the April data to estimate new vehicle prices directly from transaction data from J.D. Power.)

    Compared to JPM, Bank of America is somewhat more cheerful, and looks for core CPI to rise 0.3% mom in April, which would reflect a similar increase as in March and would come in below consensus expectations of 0.4%.  Due to significantly unfavorable base effects, this would result in a sizeable cooling off in yoy inflation to 5.9% from 6.4% in March.

    Headline inflation should come in softer than core, edging up only 0.1% (0.07% unrounded) according to BofA. That’s because after boosting headline in March, energy prices are set to be a sizeable drag reflecting a decline in retail gasoline prices coupled with unfavorable seasonal factors. Meanwhile, food prices should remain hot. If BofA’s forecast proves correct, Y/Y headline inflation would drop to 7.9% from 8.5%, confirming March as the peak for Y/Y inflation.

    Next, BofA notes that the composition of core inflation is likely to look close to March, with autos inflation a drag and underlying inflation stronger. Within autos, used cars should see another sizable contraction given the signal from wholesale metrics, while new car prices may accelerate. Both JDPower forecasts and Truecar data on average transaction prices showed a strong rebound in April after price cuts for three consecutive months. Note that new car prices will receive a methodology source update that will rely on JDpower transactions data. Meanwhile, BofA expects broad price gains across goods categories amid congested supply chains and rising commodity prices.

    Like JPM, BofA expects continued strength in owners’ equivalent rent (OER) and rent of primary residence amid tight rental markets, with both gauges increasing 0.45% mom. Lodging prices are likely to post a modest increase after the past two months of strength. Airline fares are also expected to cool, as are broader transportation services. The latter will be underpinned by further price hikes in motor vehicle insurance. Medical care services may slow to a 0.3% clip as sequestration-related Medicare cuts are being phased in —1% in April, another 1% in July. Other major services categories should see steady gains amid tightening labor markets and rising wages.

    Next, we hear from Goldman (whose CPI forecasts were absolutely catastrophic in 2021 so take anything here with a ton of salt). The vampire squid writes that core PCE inflation has run at a 3½% annualized pace over the last two months, a substantial deceleration from the 6% pace over the prior four months. The bank expects the annualized pace to reaccelerate to 4¼% on average in Q2 before falling back to 3½% in Q3 and 3¼% in Q4.

    Here Goldman takes a quick detour to discuss the “three pillars” of its 2022 inflation forecast.

    • First, it expects inflation in supply-constrained durable goods categories to fall sharply to roughly zero on net. This accounts for the entirety of the decline in the bank’s 2022 forecast, even though it is not assuming payback for recent price spikes in these categories on net until after this year.
    • Second, Goldman thinks shelter inflation has peaked on a sequential basis but will rise above 5% on a year-on-year basis.
    • Third, Goldman expects inflation in the rest of the service sector to remain steady at just over 4% because labor market overheating is likely to keep wage pressures firm for a while (this form the same bank that in January and February said no risk of a wage price spiral).

    Some more details (from the bank which has a proven track record of being terrible at forecasting inflation):

    Our base case is that inflation will reaccelerate from the 3½% annualized pace of the past two months to 4¼% on average in Q2, before falling back to 3½% in Q3 and 3¼% in Q4. The left panel of Exhibit 4 shows the contributions to month-on-month (not annualized) core PCE inflation by category under our forecasts. As described earlier, declining used car prices weighed on the February and March prints, but the slowdown also reflected softer financial, health care, and food services inflation—all three of which are included in the red bars for “Other Services” in Exhibit 4. We expect financial services inflation—which saw outright declines in February and March—to increase steadily over the rest of this year as intermediation spreads rise with higher interest rates. Health care and food services inflation are also likely to reaccelerate over the next few months in response to continued wage pressures and higher agricultural commodity prices, before moderating in the back half of the year as wage growth slows modestly.

    The right panel of Exhibit 4 shows the contributions to year-on-year core PCE inflation. The lapping of last year’s large durable goods price increases means that the contribution to inflation from supply-constrained categories will shrink rapidly even in the absence of goods price deflation on a sequential basis and contribute to substantially lower core PCE inflation at year-end (we estimate 3.9% on a year-on-year basis).

    And visually

    Most other banks fall somewhere inbetween these observations.

    Turning to markets, it is worth noting – as the Leuthold Group has done – that after freaking out in March following the Russian invasion of Ukraine, markets have calmed down and the bond market’s one-year forward inflation expectation have fallen fall below 5% and the two-year expectation drop slightly below 4%. “Those declines are some of the strongest evidence that overall inflation has peaked”, Leuthold writes.

    One reason for Leuthold’s optimism is that industrial commodity prices have tumbled in the past 4 weeks (largely on the back of the latest Chinese lockdowns), and investors haven’t discounted the meanting of this shift.

    Of course, all of the above data does not exist in a vacuum and readers should recall that we will surely see headwinds from a monetary policy path that is intent not only on reining in inflation from here, but sparking a gentle recession in the US.

    Sure enough, there was a distinct flip in the market today, because while bond proxies (such as financials, utilities and real estate) got hammered, bond yields tumbled. Meanwhile, industrials and Consumer Discretionary stocks are also lagging behind, which according to Goldman suggests that “the market narrative may be slowly shifting towards concerns of just a recession, not the stagflation (a recession plus inflation) concerns that have dominated market direction lately.”

    That last sentence is key, because if indeed the Fed succeeds in sparking a recession in the near future, then all of the above is irrelevant and inflation will soon transform into deflation, unleashing the next easing cycle and QE.

    Tyler Durden
    Tue, 05/10/2022 – 22:05

  • Watch: "Terrifying" Chinese Super Drones That Can "Hunt Humans In Packs" Are Here
    Watch: “Terrifying” Chinese Super Drones That Can “Hunt Humans In Packs” Are Here

    Video of what are being called “Chinese super drones” has emerged over the past week, and the footage is being described as “terrifying”.

    Footage of 10 lightweight drones made its way into the ether this past week thanks to a team at Zhejiang University, who released the video. It shows the drones bobbing and weaving through heavily wooded areas, moving swiftly amidst foliage. 

    The drones take direction from an algorithm that helps them chart their surroundings in real time, The Sun wrote in an article about the video. Their internal software updates “every few milliseconds”, which helps them avoid colliding with other objects.

    The article also notes that since they don’t run on GPS, they can be deployed in areas with poor satellite coverage. 

    That’s all good and well – but the “terrifying” response to the video came when the same team at Zhejiang University released video of the drones chasing a man through a forest of trees. After being instructed to keep focus on the man, they are able to follow him – even after he hides behind objects. 

    “The swarms’ capability of navigation and coordination in these films has attracted and inspired numerous researchers. Here, we take a step forward to such a future,” researchers in the journal Science Robotics commented. Dr Jonathan Aitken from Sheffield University praised the progress as an “excellent achievement”. 

    He added: “To achieve a quality map, built from a distributed collection of robots, of the detail demonstrated is an excellent piece of engineering. To couple this with the additional successful navigation and avoidance of obstacles, and critically other members of the swarm, is an excellent achievement.”

    Paul Scharre, former senior Pentagon official and expert on drone warfare, concluded by noting how well China’s drone programs were coming along. 

    “We can’t see from the Chinese video whether the drones are communicating and co-ordinating with each other,” he said. “It could just be a launch of drones like the launch of missiles from a multiple-launch rocket system. However, the test shows that China is developing swarm drone systems and they could be operational in a few years.”

    You can watch video of the drones, via The Telegraph, here:

    Tyler Durden
    Tue, 05/10/2022 – 21:45

  • House Conservatives Ready Law-And-Order Agenda Ahead Of Midterms
    House Conservatives Ready Law-And-Order Agenda Ahead Of Midterms

    Authored by Philip Wegmann via RealClear Politics,

    Crime is on the rise around the country, the midterm elections are fast approaching, and the largest bloc of House conservatives is preparing a comprehensive package of law-and-order legislation.

    The Republican Study Committee, led by Indiana Rep. Jim Banks, has catalogued every GOP argument about crime in the last two years and distilled it into a single memo to lay at the feet of President Biden. The murder rate is up. So are violence against law enforcement, drug seizures, aggravated assault, grand theft auto, and domestic violence.

    All of it, as the RSC sees it, is the result of “the left’s crime wave.” The solution then, according to a memo obtained exclusively by RealClearPolitics, is to make federal funding conditional on states’ adoption of “certain pro-law enforcement measures,” or what Banks calls the “Concerned Citizens Bill of Rights.”

    The document comes just six months before the midterms, and crime was always going to play a significant role in those contests. Voters fed up with lawlessness made Eric Adams mayor of New York City, and crime continues to upstage more progressive priorities in traditionally liberal contests, like the Los Angeles mayoral race. Even outside of major metropolises, Americans believe crime is getting worse. According to Gallup, a majority (53%) say they personally worry a “great deal” about crime. It now ranks third in their top concerns, behind only inflation and the economy.

    Banks and House Republicans argue that the uptick stems from a spate of progressive prosecutors who’ve been bankrolled by liberal money and the Defund the Police movement, which call it “one of the greatest dangers to public safety in our nation’s history.” Despite Biden’s condemnation of the “defund” rhetoric from his left flank, they still say the president and his party own the carnage that comes from adhering to that philosophy.

    “From the White House to liberal state and local governments, there has been a systemic failure to contain crime in America. It stems from the dangerous belief that enforcing the law is somehow morally wrong or even racist. It has paralyzed law enforcement agencies at all levels and created prosecutors who would rather let a dangerous criminal walk out of jail than enforce the law,” the memo reads.

    None of this is new. Republicans are always eager to lean into their traditional branding as the party of law and order. For instance, the memo states that “once, again, Democrats have broken a part of our civil society.” But unlike Senate Minority Leader Mitch McConnell, the RSC led by Banks has rejected the idea of just playing the opposition until November. “Crime is at an unacceptable level and Americans are desperate for solutions,” the memo states. “They need to know that Conservatives have a plan to make them safe.”

    This time, those plans go beyond anti-liberal rhetoric. Republicans are laying a legislative agenda. And the plan in the RSC memo is the most comprehensive picture voters have to date for how Republicans will seek to tackle crime if they retake the majority. First and foremost, the “Concerned Citizens Bill of Rights” is fiduciary in nature. Conservatives would use congressional purse strings to close the net on states and local authorities they believe “promote the left’s pro-criminal agenda.”

    Among other things, this means withholding money from states “when their district attorneys’ offices systematically decline to prosecute types of cases or charge certain crimes,” and also cutting off federal dollars “to states that have ‘no-cash bail’ laws on the books.” The RSC would also tie strings to federal funding, perhaps largest among them the condition that state and local police departments open their books and report all crimes to the FBI’s Uniform Crime Reporting Program.

    The memo also details 10 other proposed reforms, each of them almost certain to trigger a showdown with the White House.

    A Republican majority would pressure the DOJ to reinstate the Trump administration policy of federal prosecutors charging offenders with the highest offense rather than lesser ones, reversing a tactic they say the current administration is using to “skirt mandatory minimums.” At the same time, lawmakers would press Attorney General Merrick Garland to reverse course and limit the use of consent decrees.

    Another top priority if the GOP retakes control and if the RSC gets its way: codifying qualified immunity for police officers. The memo also calls for new legislation that would create new criminal offenses for killing or assaulting law enforcement officers.

    Other priorities include traditional calls for “enhancing penalties against violent, repeat offenders,” specifically when it comes to drug traffickers. They call for Fentanyl to be permanently listed as a Schedule I drug and for consideration of “stronger penalties for this particularly deadly drug, even life in prison.”

    There are also new reforms tailored to current conservative passions such as “holding Big Tech accountable when it facilitates or is complicit in criminal activity,” and seeking to stem the flow of tax dollars to any public schools that advance “anti-police education.”

    While House conservatives pay lip service to the idea that Congress “should be constrained by the principles of federalism” when pursuing their anti-crime agenda, they are eager to flex federal muscles. At least, that is, when it comes to governing Washington, D.C.

    Citing the city’s 226 homicides and sharp uptick in overall crime, they believe Congress should take an increased role in how D.C. polices its streets. They hold out as a tantalizing possibility using the federal city as an example for the nation of “how abandoning pro-criminal policies can increase public safety.”

    Again, all of this is aspirational. None of it stands any chance of becoming law unless Republicans retake both chambers of Congress. Even then, it almost certainly means a showdown with the White House. But the conflict of visions is precisely the point. The RSC wants voters to see what the GOP plans to do if they return to power, and here conservatives are leading.

    The Republican Study Committee under Banks has returned to its role serving as the in-house think tank for the GOP. The conservative group has also thrown its weight around. The RSC, which counts more than 150 lawmakers as members, has spent its time in the minority pushing Republican brass to the right. Banks lobbied Minority Leader Kevin McCarthy to make the GOP more of a “working class party.” Now the group has put pen to paper outlining how they’d tackle crime.

    Tyler Durden
    Tue, 05/10/2022 – 21:25

  • Landlords And Corporations Are Renovating Their Office Spaces For "Hybrid" Work
    Landlords And Corporations Are Renovating Their Office Spaces For “Hybrid” Work

    After years of employees working from home thanks to the pandemic, some companies and commercial landlords are finding it difficult – and even unnecessary – to bring workers and new tenants “back to the office” the way they were prior to Covid.

    This has resulted in landlords modifying workspaces and some corporations renovating their already existing office space to become “hybrid” workspace, according to a new article by Bisnow. The publication reported this week that supply chain issues and rising rates are likely also helping fuel the move. 

    Even architects are paying attention to the new changes. American Institute of Architects Chief Economist Kermit Baker said this week that firms are making more income from renovating existing workspaces than from building new ones. “Architecture firms are drowning in work,” he said. 

    CBRE Global Head of Occupier Thought Leadership Julie Whelan noted that there is an “onslaught” of renovations taking place, as landlords look to change their properties to appeal to future tenants and existing tenants modify their workspaces.

    767 Third Avenue, for example, is about to be in the midst of a “wholesale demo”, led by Sage Realty, and costing $53 million. This renovation will allow for “a new lobby space and a reworked amenities program for tenants, including a library, terrace garden, cafés and communal spaces,” according to the report. The hope is to attract boutique companies and maximize space for amenities for tenants. 

    CEO Jonathan Iger commented: “The mindset right now is that you have to be reinvesting in your property. It’s about how you define quality.”

    Another major renovation is being led by Brookfield and WatermanClark, who are investing $100 million into renovating the midcentury Lever House in Manhattan. Chicago’s Merchandise Mart and Boston’s One Post Office Square are also getting multi-million dollar renovations. 

    Baker continued, stating of the demand for work: “They’re so busy they’re having trouble finding staff, and there are project backlogs. The pipeline for new architects isn’t as quick and easy to expand as other professions.”

    Whelan concluded: “Office construction is falling off a cliff. All that work going into a new build is going into renovating space now. Very few will take a risk with the way the debt market is now.”

    “Real estate has never moved quickly. That’s the nature of the beast. Frankly, it never had to, with long-term leases. And the pandemic turned that on its head. It’s an inflection point, and you need to do it or buildings will just become obsolete.” 

    Tyler Durden
    Tue, 05/10/2022 – 21:05

  • These 20 States Threaten Legal Action Over Biden's 'Ministry Of Truth'
    These 20 States Threaten Legal Action Over Biden’s ‘Ministry Of Truth’

    Via Organic Prepper’s Daisy Luther – author of Prepper’s Pantry and The Blackout Book,

    The attorneys general of 20 states have threatened legal action against the US government unless they disband the newly formed Disinformation Governance Board.

    We shared with you recently an article about the people behind the DGB, who have a history of trying to curb dissenting speech by calling it “disinformation.” We here at the OP have been the targets of censorship before and would not be surprised to see more of the same. (Here’s how we’re meeting the possibility of further oppression head-on.)

    It turns out that we’re not the only ones concerned about this.

    What’s being done?

    In a letter addressed to DHS Secretary Alejandro Mayorkas, the Attorney General of Virginia, Jason Miyares, spoke for the AGs of 19 other states and shared his concerns about the overreach.

    The letter was acquired by ReclaimtheNet.org.

    As the chief legal officers of our respective States, we, the undersigned Attorneys General, are tasked not just with enforcing the laws but with protecting the constitutional rights of all our citizens. Today we write you to insist that you immediately cease taking action that appears designed exclusively for the purpose of suppressing the exercise of constitutional rights.

    Every American knows that the Constitution forbids the government to “abridg[e] the freedom of speech.” US Const. Amend. I. As Justice Robert Jackson wrote nearly eighty years ago, “[i]f there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion.” West Virginia State Bd. of Educ. v. Barnette, 319 US 624, 642 (1943).

    Your recent testimony before the US House Appropriations Subcommittee on Homeland Security, however, indicated that the Department of Homeland Security, under your leadership, is doing exactly that: prescribing orthodoxy by slapping a federal-government label of “disinformation” or “misinformation” on speech that government bureaucrats, operating behind closed doors, decree to be improper. This is an unacceptable and downright alarming encroachment on every citizen’s right to express his or her opinions, engage in political debate, and disagree with the government. The Biden Administration’s latest effort to decide what speech is “acceptable” and “orthodox” combines McCarthyite speech policing with the secrecy of the English Star Chamber.

    In short, you seem to have misunderstood George Orwell: the “Ministry of Truth” described in 1984 was intended as a warning against the dangers of socialism, not as a model government agency. “MiniTru” and its thuggish apparatchiks are the villains in that story, not the heroes. For the sake of our democracy, you must immediately disband the “Disinformation Governance Board” and cease all efforts to police Americans’ protected speech. The existence of the Disinformation Governance Board will inevitably have a chilling effect on free speech. Americans will hesitate before they voice their constitutionally protected opinions, knowing that the government’s censors may be watching, and some will decide it is safer to keep their opinions to themselves.

    The resulting damage to our political system and our culture will be incalculable: as a democracy, our political debates and decisions are supposed to take place in the public square, where every citizen can participate, rather than in government office buildings where hand-picked and unaccountable partisan committees are insulated from public supervision and criticism.

    (Read the rest of the letter here.)

    The letter goes on to question the timing of the new Ministry of Truth (just as Elon Musk completes the purchase of Twitter with the stated goal of restoring free speech on the platform). It also calls into question the dubious qualifications of head honcho, Nina Jancowiz, who AG Miyares describes as “often in error but never in doubt.”

    How will the AGs enforce this?

    In a firmly worded promise, Miyares concludes:

    Unless you turn back now and disband this Orwellian Disinformation Governance Board immediately, the undersigned will have no choice but to consider judicial remedies to protect the rights of their citizens.

    We sincerely hope this puts a halt to the censorship efforts of the Biden administration.

    Who signed the letter?

    The letter was signed by the attorneys general of 20 states. We hope that other states follow in their footsteps to protect this vital constitutional right. (Contact your state’s AG and let them know you support them or want them to get on board, too!)

    The following AGs signed the letter.

    1. Jason S. Miyares, Virginia (the author of the letter)

    2. Steve Marshall, Alabama

    3. Mark Brnovich, Arizona

    4. Leslie Rutledge, Arkansas

    5. Ashley Moody, Florida

    6. Christopher M. Carr, Georgia

    7. Todd Rokita, Indiana

    8. Derek Schmidt, Kansas

    9. Daniel Cameron, Kentucky

    10. Jeff Landry, Louisiana

    11. Lynn Fitch, Mississippi

    12. Eric Schmitt, Missouri

    13. Austin Knudson, Montana

    14. Douglas J. Peterson, Nebraska

    15. David Yost, Ohio

    16. John M. O’Connor, Oklahoma

    17. Alan Wilson, South Carolina

    18. Ken Paxton, Texas

    19. Sean D. Reyes, Utah

    20. Patrick Morrisey, West Virginia

    Will this effort gain any traction with the DHS and the current administration? We are not holding our breath.

    *  *  *

    Want uninterrupted access to The Organic Prepper? Check out our paid subscription newsletter.

    Tyler Durden
    Tue, 05/10/2022 – 20:45

  • IRS Paying Billions In Interest On Millions Of Delayed Tax Returns
    IRS Paying Billions In Interest On Millions Of Delayed Tax Returns

    The IRS is paying interest on overdue refunds to the tune of 4%, up 1% from the prior quarter, according to the Wall Street Journal, which notes that’s more than half of what a money-market or a savings account is currently paying.

    The backlogged agency has 45 days to process a tax return and issue a refund, after which interest begins accumulating. In 2021, they paid $3.3 billion in interest, which was 3x the amount paid in 2015, according to the Government Accountability Office.

    “It’s not a small amount of money,” said Jessica Lucas-Judy, director of tax issues at GAO. “If there’s some way to avoid some of these payments, that’s probably a good thing.”

    The IRS has been moving slower than usual to process tax returns. Administration officials say that is the result of years of Republican-backed budget cuts. Republicans say the agency hasn’t given priority to taxpayer service. Some recent years have been particularly difficult. In fiscal 2019, the aftermath of a government shutdown caused a backlog. The IRS slowed again when the coronavirus pandemic began in 2020 and is still months behind schedule in processing paper returns.

    As of April 29, the IRS has 9.6 million unprocessed individual tax returns, some from tax year 2020 and some from 2021. The agency says it is taking more than 20 weeks to handle amended tax returns and hopes to catch up on all of its processing backlogs by the end of 2022. -WSJ

    The $3.3 billion in 2001 interest payments works out to around 1/4 of the cost to run the IRS, however the interest payments don’t come out of the tax agency’s budget.

    According to the GAO, the IRS isn’t being proactive enough about excessive interest payments.

    “IRS does not fully understand the causes for refund interest payments—both within and outside of its control—and therefore cannot communicate this information to Treasury and Congress,” the GAO wrote.

    The IRS’s answer? ‘it’s complicated.’

    The agency notes that interest rates vary over time, and that payments can’t be analyzed in a vacuum. In other cases, costs aren’t the agency’s fault, but are instead required by law.

    “Our role is to administer the Tax Code as it is enacted,” said Douglas O’Donnell, deputy commissioner for services and enforcement. “We do not believe the amount of interest paid is a reliable or meaningful business measure.”

    According to Nina Olson, the government needs a technology upgrade that would allow for more automated processing of returns prepared with tax software, but are printed out on paper for a physical submission.

    “I don’t think the IRS shrugs it off,” said Olson, adding “It’s just that we have had two and now three filing seasons that have been abnormal.”

    Tyler Durden
    Tue, 05/10/2022 – 20:25

  • How Federal Student-Loans Create College-Rankings Scandals
    How Federal Student-Loans Create College-Rankings Scandals

    Authored by Preston Cooper via RealClear Education (emphasis ours),

    A whistleblower lawsuit filed last month alleges that Rutgers University’s business school artificially boosted its rankings by using a temp agency to hire MBA graduates and place them into “sham positions at the university itself,” according to NJ.com, which first reported the news. Though shocking, the scandal is the natural result of the incentives the federal government has set up for schools through uncapped student loan subsidies for graduate programs.

    Photo: Ekrulila

    Rutgers has denied the charges. But the allegations are credible when considering the source: the lawsuit was filed by Deidre White, the human resources manager at Rutgers’ business school. Days later, a separate class-action lawsuit was filed by one of Rutgers’ MBA students.

    Last year Rutgers was ranked first among public business schools in the northeast by Bloomberg Businessweek. One wonders how many students, hoping for a degree that would boost their employability, may have been deceived by that rosy statistic.

    The scandal follows similar incidents at other universities. The University of Southern California withdrew from the U.S. News & World Report graduate education school rankings due to “inaccuracies” in its reported data stretching back for years. And earlier this year, the dean of Temple University’s business school was sentenced to more than a year in prison for submitting false data to U.S. News.

    Why would university officials risk prison time to manipulate their rankings? The answer is that graduate degrees—especially master’s degrees—are increasingly becoming a cash cow for universities. Though federal loans to dependent undergraduate students are capped at $31,000, loans to graduate students are effectively unlimited.

    Many schools have vastly expanded their graduate school offerings to soak up this stream of cash. The number of master’s degrees conferred annually has risen 41% since 2006, when unlimited loans for graduate students were introduced. Over the past decade, universities have added more than 9,000 new master’s degree programs.

    The master’s-degree bonanza shows no sign of tapering off. While the number of students pursuing higher education has dropped 6% overall since the beginning of the pandemic, enrollment in master’s degree programs has moved in the opposite direction, surging by nearly 6%.

    Predictably, this has led to a surge in graduate student debt. In 2019-20, 43% of all federal student loans issued were for graduate education, up from 33% at the beginning of the decade. Rutgers itself gets over half of its federal student loan funding from graduate programs. For many prominent universities, undergraduate education is old news—graduate programs are where the real money is.

    Unfortunately, much of this federal largesse finances programs of questionable financial value. According to my estimates of return on investment, 40% of master’s degrees do not provide their students with an increase in earnings large enough to justify their costs. Among MBAs and other business-related master’s degrees, the share of nonperforming programs rises to 62%. Perhaps that reality is a reason that so many graduate schools feel the need to fudge rankings data.

    Many graduate borrowers will strain under the weight of debt that the federal government so freely gave out. But taxpayers will pick up a large share of the burden as well. Most graduate borrowers are eligible for income-based repayment programs which limit their monthly payments and grant loan cancelations after a set period of time. The Congressional Budget Office estimates that more than half of graduate loans issued in 2022 and repaid on income-based plans will eventually be discharged.

    The student loan payment pause has also transferred many of the costs of graduate school from borrowers to taxpayers. The Committee for a Responsible Federal Budget estimates that the average master’s degree holder has already received over $13,000 of effective loan forgiveness through canceled interest payments and excess inflation during the pause. These factors, plus the possibility of additional loan forgiveness in the future, allow universities to hint that students might not have to pay the full cost of their education—and makes it easier to sell them on expensive master’s degrees.

    The Education Department has the tools to put a stop to this racket. A regulation known as borrower defense to repayment allows students defrauded by their institutions to have their federal student loans canceled; the institution must make taxpayers whole in the event of a successful loan discharge. Initially developed by the Obama administration, the rule was aimed at for-profit colleges, but there’s no reason it couldn’t be used against a public flagship university like Rutgers. If the Education Department forced a school with provably falsified rankings data to pay off the loans of defrauded students, it would send a firm signal that this sort of behavior will not be tolerated.

    But borrower defense to repayment isn’t enough. There are plenty of federally funded master’s degree programs where institutions are not guilty of fraud, but outcomes are abysmal nonetheless. Therefore, it is also necessary for Congress to remove the incentive for universities to market bad master’s degrees in the first place: their unlimited federal funding.

    The prevalence of master’s degrees that offer little to no return on investment can be chalked up to uncapped federal student loans, which are handed out in an undiscriminating fashion, and the repayment regime that forces taxpayers to pick up the tab for unpaid loans. Universities push low-quality master’s degrees to capture the federal dollars, while students are willing to borrow thanks to the federal government’s implicit stamp of approval. End federal loans for graduate school, and most low-quality master’s degrees will vanish.

    Private lenders would be able to meet demand for the financing of quality graduate degrees, such as medicine. Reliable financial returns for these degrees mean that private lenders will jump at the chance to lend to medical students attending reputable institutions, but will be far more hesitant to pony up $180,000 for a master’s degree in film. A thriving private market for graduate student loans existed before Congress uncapped federal loans in 2006. There is no need for a federal graduate loan program when the private sector can adequately fill the role.

    The brewing scandal at Rutgers is a sign that many universities will do anything for a piece of the federal government’s unlimited graduate loan offerings. By ending federal loan subsidies for graduate programs, Congress can fix the bad incentives that led to this mess, protect students from low-quality master’s degrees, and save taxpayers a heap of money along the way.

    Preston Cooper is a research fellow in higher education at the Foundation for Research on Equal Opportunity.

    Tyler Durden
    Tue, 05/10/2022 – 20:05

  • Russian Forces Unlikely To Stop After Capturing Donbas – Expect Prolonged War: Top US Intel Chief
    Russian Forces Unlikely To Stop After Capturing Donbas – Expect Prolonged War: Top US Intel Chief

    At a moment that top US intelligence officials are holding intense discussions over what “victory” might look like for Russian President Vladimir Putin – or whether or not he’s contemplating an exit from the conflict in Ukraine and under what conditions – senior Pentagon officials assess there’s been little significant progress by Russian forces in the Donbas. 

    During a Monday briefing one senior official told reporters this is due partly to low morale and “refusing to obey orders” – which is even impacting the officer corps. The officials described, “We still see anecdotal reports of poor morale of troops, indeed officers, refusing to obey orders and move and not really sound command and control from a leadership perspective.”

    Further the officials said that “midgrade officers at various levels, even up to the battalion level” are either refusing to follow orders or are not obeying them with the same measure of alacrity that you would expect an officer to obey,” according to The Hill.

    Given Putin’s more restrained than expected ‘Victory Day’ speech in Moscow on Monday, some Western observers have speculated that lack of any verbal assessment of how his forces are doing on the ground could be a sign of frustration. Prior to this, some thought the Russian leader aimed to declare full victory over the Donbas by the time of the May 9 commemoration events on Red Square.

    Putin had given as one of the justifications for the Feb.24 invasion during the speech that the West was “preparing for the invasion of our land, including Crimea.” This following last month his commanders appearing to narrow the operation’s objectives to liberating Ukraine’s east in particular, also as heavy fighting is now taking place in the south, increasingly focused on the port city of Odesa, where Ukraine’s navy is headquartered.

    Avril Haines, Director of National Intelligence

    On Tuesday Director of National Intelligence Avril Haines in testimony before lawmakers in the Senate said that a Russian military victory over the Donbas might not actually end the war.

    “We assess President Putin is preparing for prolonged conflict in Ukraine during which he still intends to achieve goals beyond the Donbas,” she said. “Both Russia and Ukraine believe they can continue to make progress militarily,” Haines said, adding, “we do not see a viable negotiating path forward, at least in the short term.” Additionally she testified the US intel community’s assessment that…

    • U.S. DOES NOT SEE RUSSIA USING TACTICAL NUCLEAR WEAPONS AT THIS TIME -INTELLIGENCE CHIEFS
    • RUSSIA MAY STEP UP EFFORTS TO BLOCK WESTERN WEAPONS: HAINES
    • PUTIN WOULD USE NUCLEAR ARMS ONLY IN EXISTENTIAL THREAT: HAINES
    • RUSSIA’S PUTIN LIKELY COUNTING ON U.S., EU RESOLVE IN UKRAINE TO WEAKEN -HAINES

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    But one might argue that the Biden administration has from the beginning of the invasion shown little to no strategy of engaging diplomatically on any serious level to end the war. In fact, an opposite picture has emerged: while pumping billions in weapons and military aid into Ukraine, Defense Secretary Lloyd Austin said it’s America’s desire to see a “weakened” Russia due to its Ukraine offensive.

    Tyler Durden
    Tue, 05/10/2022 – 19:45

  • Destroying Democracy To Save It: Democrats Lose Another Effort To Disqualify A GOP Member
    Destroying Democracy To Save It: Democrats Lose Another Effort To Disqualify A GOP Member

    Authored by Jonathan Turley,

    For two years, Democrats have been trying to disqualify dozens of Republicans from appearing on ballots for supporting the challenge to the certification of the 2020 election or declaring the election to be stolen.

    It is premised on a deeply flawed historical and legal view of a provision under the Fourteenth Amendment. In the name of democracy, these Democrats have demanded that courts prevent voters from being able to vote for incumbent members. Yet, scholars like Harvard Professor Laurence Tribe have endorsed this sweeping interpretation. It has been rejected repeatedly in the courts.

    The latest such ruling comes from the Arizona Supreme Court which ruled that Democrats could not prevent Rep. Paul Gosar (R-AZ) from appearing on the ballot in 2022.

    In the age of rage, nothing says democracy like preventing people from running for office.

    Last year, Democratic members called for the disqualification of dozens of Republicans. One, Rep. Bill Pascrell (D-N.J.) demanded the disqualification of the 120 House Republicans — including House Minority Leader Kevin McCarthy(R-Calif.) — for simply signing a “Friend of the Court brief” (or amicus brief) in support of an election challenge from Texas.

    These members and activists have latched upon the long-dormant provision in Section 3 of the 14th Amendment — the “disqualification clause” — which was written after the 39th Congress convened in December 1865 and many members were shocked to see Alexander Stephens, the Confederate vice president, waiting to take a seat with an array of other former Confederate senators and military officers.

    Justice Edwin Reade of the North Carolina Supreme Court later explained, “[t]he idea [was] that one who had taken an oath to support the Constitution and violated it, ought to be excluded from taking it again.” So, members drafted a provision that declared that “No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any state, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof.”

    By declaring the Jan. 6th riot an “insurrection,” some Democratic members of Congress and liberal activists hope to bar incumbent Republicans from running. Even support for court filings is now being declared an act of rebellion. House Speaker Nancy Pelosi (D-Calif.) helped fuel this movement — before Jan. 6 even occurred — by declaring that the Republicans supporting election challenges were “subverting the Constitution by their reckless and fruitless assault on our democracy which threatens to seriously erode public trust in our most sacred democratic institutions, and to set back our progress on the urgent challenges ahead.”

    This effort failed on legal grounds in seeking o bar Rep. Madison Cawthorn (R-N.C.) from running for office due to his actions related to the Jan. 6, 2021. It failed on factual grounds in seeking to bar Rep. Marjorie Taylor Greene (R., Ga.), even after a federal district court wrongly allowed a hearing to be held.

    Now the Arizona Supreme Court has ruled that not only did the challengers lack the standing to bring the case but Arizona Supreme Court Chief Justice Robert Brutinel reaffirmed that this is a power left to Congress:

    “Qualifications of its own Members,” appears to vest Congress with exclusive authority to determine whether to enforce the Disqualification Clause against its prospective members. However, we need not decide these issues because we hold that A.R.S. § 16-351(B), which authorizes an elector to challenge a candidate “for any reason relating to qualifications for the office sought as prescribed by law, including age, residency, professional requirements or failure to fully pay fines . . . ,” is not the proper proceeding to initiate a Disqualification Clause challenge. By its terms, the statute’s scope is limited to challenges based upon “qualifications . . . as prescribed by law,” and does not include the Disqualification Clause, a legal proscription from holding office. 

    The court case is Thomas Hansen v. Mark Finchem, No. cv-22-0099.

    Tyler Durden
    Tue, 05/10/2022 – 19:25

  • Taco Bell Goes Woke: Launches 'Drag Brunch' Events At US Locations 
    Taco Bell Goes Woke: Launches ‘Drag Brunch’ Events At US Locations 

    Taco Bell is the latest company to embrace woke activism by rolling out “Taco Bell Drag Brunch” at select Taco Bell Cantinas across the US. 

    “Each show will be hosted by the fabulous drag performer and taco extraordinaire, Kay Sedia, and feature performances from local queens and kings that will transform any morning from Mild to Fire!” according to a recent press release from the largest fast-food Tex-Mex restaurant chain. 

    “As a brand that brings people together, the Taco Bell Drag Brunch experience is rooted in celebrating the LGBTQIA+ community and creating safe and welcoming spaces for all,” the press release continued. 

    The first drag event was held at a Taco Bell Cantinas in Las Vegas on May 1. Here are the upcoming events:

    • Chicago, Wrigleyville Cantina: Sunday, May 22

    • Nashville Cantina: Sunday, May 29

    • New York, Times Square Cantina: Sunday, June 12

    • Fort Lauderdale Cantina: Sunday, June 26

    Here’s a short clip of the drag bunch in Vegas. 

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    “We understand the importance of creating safe spaces for the LGBTQIA+ community and are thrilled to provide a unique experience that spotlights and celebrates the wonderful artform of drag and its influence in culture with their chosen families,” Taco Bell global chief brand officer Sean Tresvant said in a statement. 

    “Taco Bell Drag Brunch was concepted by Live Más Pride, Taco Bell’s LGBTQIA+ Employee Resource Group, which has played a major role in driving awareness of and meaningfully supporting LGBTQIA+ communities both within Taco Bell and the communities we serve and operate in,” Tresvant added. 

    Taco Bell’s drive to create “spaces for the LGBTQIA+ community” is another example of woke corporations meddling in divisive political issues and risk sparking a backlash. 

    If CEOs learned anything so far in 2022, it’s that woke corporate America is finally getting push-back. The latest example was Gov. Ron DeSantis (R-Fla.) signed a bill that strips Disney of its special tax status in Florida after defaming the governor’s “Don’t Say Gay” bill. 

    Corporations diving into woke activism can result in severe consequences — if that’s losing special tax status or even a customer base. Some Taco Bell customers lost their appetite over the announcement of taco drag brunches. 

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    Another corporate “get woke, go broke” example? 

    Tyler Durden
    Tue, 05/10/2022 – 19:05

  • The Six Most Common Financial Myths People Believe
    The Six Most Common Financial Myths People Believe

    Authored by Bruce Wilds via Advancing Time blog,

    It is time to revisit six of the most common financial myths we have come to believe. Accepting any of these as a reflection of reality could lead us down the path to ruin. Unfortunately, belief in them is so widespread most people no longer even question them and are putting their economic future in peril. A myth is often defined as any invented story, idea, concept, or false collective belief that is used to justify a social institution. With this in mind, it is understandable those in the government and financial systems would crank out such yarns to keep us docile.

    The six favorite financial myths are easier to believe when financial fears are low and times are good. 

    Over the last few years, a slug of freshly printed liquidity being pumped into the global financial system and stock markets has caused many asset bubbles to expand sending the wealth effect into overdrive. An increase in liquidity results in people feeling comfortable to take on more risk and this tends to cause people to “leverage up.” During such a time true price discovery has a way of being greatly diminished.

    Changes made to the rules and financial engineering have made many comparisons to the past obsolete. Sometimes, it is a question of people just being too lazy to question what they see, at other times, it is because they simply can’t face the truth. It should be noted that the entertainment industry has flourished as society seeks any diversion to pull our attention away from the sharp edges of reality and into the soft comfort of escape. In some ways, it could be said that our culture has become obsessed with avoiding what is real. Regardless of the reason why people fail to view the myths below as lies the point is they will result in the financial ruin of those counting on them in time of need.

    Over the years, extraordinary efforts have been made to keep the economy afloat. The most noticeable is the massive amount of new money and credit released into the financial system by central banks. This has been interpreted by many people as confirmation the current trend of never-ending growth will continue. Rather than considering it is time for a reality check it is both easier and more comforting to adopt an “all is well” attitude and ignore the signs of danger lurking around the corner.

    The crux of this article is about some of society’s favorite myths. These feed directly into the economy and our feelings about our financial security. While it could be argued the myths below have more to do with how we feel about life than about money, it cannot be denied that most people make many of their financial decisions based on the assumption the below statements are true. As a society, we rapidly choose to embrace and often choose not to question them because of the discomfort it would undoubtedly create. The six below permeate society and should be enough to remind you and even shed a bit of light upon the fact we as  individuals are vulnerable at any time if reality raises its’ ugly head.

    Believing Myths Is A Head In Sand Approach

    #1 Government is for the people and by the people – Seriously? After the dog and pony show, we experienced during the last presidential primary all illusions of that should have been erased. After often being forced to choose between the least of two evils it is difficult to praise our political system. After all the talk about “we the people,” the fact is the average “person” is far removed from the power to decide important issues.

    #2 Financial planning means you only have to start saving a little money each year to guarantee an easy retirement.  – The fact is life is a casino where our future is tenuous at best. Much of our circumstances and lives revolve around money and the number of options it gives us when we possess it. I intentionally used the term “casino” to conjure up the image of financial fortune. Which you can lose in a blink of an eye if things go against you. This myth extends deeply into the promises made by the government and others such as pension plans and financial institutions. Many of these promises will not be honored.

    #3 You have rights and that we are not slaves – I defer to a few lines from a blog by Gerry Spence who has spent his lifetime representing and protecting victims of the legal system from what he calls The New Slave Master: big corporations and big government. In his blog, Spence wrote; The Moneyed Master has closed its doors against the people and sits on its money like an old hen on rotten eggs. The people will not prevail. With its endless propaganda, the Moneyed Master has caused its slaves to believe they are free.

    #4 Your life will progress and move along pretty much as you have planned – When you think back over the years of your life if you are like most people things have not unfolded as you had planned. You may not be in the occupation you trained for or with your true love. Throughout our life watershed events occur that we have little control over, this holds true when it comes to your finances as well. Having an investment or pension plan go south can completely alter your life.

    #5 Those in charge or above you care about you and will make an effort to protect you – Sadly, more than one person has been sliced and diced by the people and institutions he or she trusted most. History shows when push comes to shove it is not uncommon for a person to look out for the person they treasure the most and that is often him or herself. Politicians and those in power have a long history of throwing the populace under the bus rather than taking responsibility for the problems they create.

    #6 It could be argued the biggest myth of all is the idea that inflation is reflected in the Consumer Price Index. Those making financial decisions have masked their failings. This is done by heavily skewing the CPI to give the impression there is little inflation. This dovetails with a theory I continue to expound on, that inflation would be much higher if people were not willing to invest in intangible assets such as stocks and Bitcoin. This removes a lot of demand for tangible items people use in their everyday life. 

    The fact is inflation is soaring and acts as a wealth transfer mechanism that hurts far more people than it helps. My apologies if this post has been a downer or seems overly negative, however, it is what it is and it was written for a reason. Best stated by a comment I read on another site; These myths add up to where “This is not a can of worms but a warehouse stacked with pallets of cans of worms.” 

    Believing the above myths will impact your life, that is why it is important to recognize them for what they are, lies. This is not to say that by making good and reasonable choices we cannot eliminate some of the risks we encounter when we get out of bed each morning. Developing the habit of being skeptical while pressing on to reach solid and reasonable goals is the best medicine to combat a deck that is often stacked against us. Be careful out there!

    *  *  *

    Mentioned above is the fact economists and analysts seem oblivious to the point that so many people willing to invest in intangible assets have helped to minimize inflation. This is a very important part of the inflation puzzle. This is a very important part of the inflation puzzle. The link below is to an article that delves deeper into why this is true.

    Tyler Durden
    Tue, 05/10/2022 – 18:45

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May 10

Today’s News 10th May 2022

  • United Ireland On The Horizon? Sinn Féin Takes Control For First Time
    United Ireland On The Horizon? Sinn Féin Takes Control For First Time

    For the first time since the first election of the Northern Ireland Assembly in 1998, the Irish nationalist party Sinn Féin has won more seats than any other party after the vote held on May 5.

    Sinn Féin aims to reunify Northern Ireland with the Republic of Ireland and is now close to installing party vice-president Michelle O’Neill as first minister.

    As Statista’s Martin Armstrong shows in the infographic below, Sinn Féin were just the fourth most-popular party in 1998, taking 18 seats compared to the winning Ulster Unionist Party’s 28. Having established itself as the second largest party in the years since, 2022 represents the first time it has gained control of the most seats, and the first time a nationalist party has won since Northern Ireland was founded in 1921.

    Infographic: United Ireland on the Horizon? Sinn Féin Takes Control For First Time | Statista

    You will find more infographics at Statista

    So does this mean we are now a significant step closer to a united Ireland?

    O’Neill avoided focusing on this issue during campaigning, instead choosing to prioritize the cost of living crisis. Before we see what her focus is while in office though, the parties have to form an Executive – something which the opposition unionist party the DUP has indicated it may not do with a nationalist first minister such as O’Neill. If no government is formed within six months, new elections will have to take place.

    What this election does signify however, is a shift towards nationalist politics in Northern Ireland.

    Tyler Durden
    Tue, 05/10/2022 – 02:45

  • Is An EU Army On The Horizon?
    Is An EU Army On The Horizon?

    Authored by Kit Knightly via Off-Guardian.org,

    The building blocks of supra-national military already exist…they’re just waiting for a reason.

    The special “Future of the EU” Conference came to a conclusion a few days ago.

    There may have been a familiar veneer of “public consultation”, but the aim of the conference was simple: Tell the EU to do what they’ve already been planning to do for years.

    If that wasn’t clear from the outset, it became unavoidably obvious a couple of days ago when the conference’s list of 49 “recommendations” was published on April 27th.

    You can read the whole list here, if you are so inclined.

    We have picked out some of the more troubling ones to discuss.

    There’s number 21, for example, which suggests:

    that the EU improve its capacity to take speedy and effective decisions, notably in Common Foreign and Security Policy (CFSP), speaking with one voice and acting as a truly global player, projecting a positive role in the world and making a difference in response to any crisis

    This sentiment is repeated in Number 39, where the conference claims there is a need to…

    Improve the EU’s decision-making process in order to ensure the EU’s capability to act, while taking into account the interests of all Member States and guaranteeing a transparent and understandable process for the citizens

    And they intend to do that by changing the voting system…

    All issues decided by way of unanimity should be decided by way of a qualified majority

    Taken together these measures would pretty much eradicate the national veto, and see member states potentially subject to legislation imposed against their will. A huge knock to national sovereignty.

    They also want to:

    strengthen the role of the High Representative to ensure that the EU speaks with one voice

    Which is a roundabout way of saying “centralising power”.

    Most concerning, though, is recommendation 23:

    We propose that the EU continue to act to promote dialogue and guarantee peace and a rules-based international order,36 strengthening multilateralism and building on long-standing EU peace initiatives which contributed to its award of the Nobel Prize in 2012, while strengthening its common security

    Which sounds harmless enough (apart from the shameless self-congratulatory reference to the Nobel Peace Prize), except they intend to achieve these ends using a new EU Army…

    [The EU’s] joint armed forces that shall be used for self-defence purposes and preclude aggressive military action of any kind, with a capacity to provide support in times of crises including natural catastrophes. Outside European borders it could be deployed in exceptional circumstances preferably under a legal mandate from the UN Security Council and thus in compliance with international law38, and without competing with or duplicating NATO and respecting different national relationships with NATO and undertaking an assessment of EU relations with NATO in the context of the debate on the EU’s strategic autonomy.

    A potential EU Army has been a talking point for years, but most often simply dismissed as Euro-sceptics scaremongering. In fact, further down in point 21, the conference adds:

    [The EU should] reflect on how to counter disinformation and propaganda in an objective and factual way

    Somewhat ironic, because as recently 2 or 3 years ago, the “EU Army” itself was described as “misinformation”. A “lie” spread by “Brexiteers” according to the Guardian, or “as true as saying Elvis lives” according to Emily Thornberry.

    Following the Brexit vote, everyone from Politico to the Atlantic Council was attempting to dispel the “myth” of the EU Army.

    The EU itself published an article on their official site debunking the “EU Army myth” in June of 2019.

    …Then, just last month, the EU voted to create a “rapid reaction military force” of 5000 troops.

    Funny how things change.

    Now, all the outlets which had previously “fact-checked” the idea of an EU Army, or dismissed it as a “conspiracy theory” are discussing its existence as more or less inevitable.

    Foreign Policy asks “Is an EU Army coming?”, while This Week is weighing the pros and cons, and the New European suggests “Maybe we need an EU Army after all”.

    This might seem like a sudden volte-face, but to anyone paying attention it is anything but surprising.

    Despite the waves of propaganda calling the plan a myth, the fact of the matter is that prominent political voices from Macron to Merkel to Juncker have been calling for an EU Army for years.

    The years-old agenda was given new life by the US’s withdrawal from Afghanistan. The carefully-engineered shambles was said to “highlight the need for an autonomous European military”.

    The story was that the US had withdrawn in chaos and abandoned their native allies, and an EU military – filled with happy-clappy European empathy, not heartless American pragmatism – would have stayed longer and air-lifted more people to safety.

    These rumblings grew louder after Russia launched its “special operation” in Ukraine, with Foreign Policy claiming the “war in Ukraine has turned the EU into a serious military player”, and Investigate Europe pointing out that “Putin is doing more to bolster European military unity than decades of EU initiatives”.

    Outside of the propaganda narratives, though, the pure and simple truth is that the EU Army is already a semi-reality.

    As this article in the Defense Post points out, “the framework of a unified European military is already in place”.

    EuroCorps has existed since 1992, and is described as “a force for the EU and NATO”. Essentially it’s a link between the NATO command structure and the EU. It’s a token force, and barely used, but sits there waiting to be adapted and expanded.

    The Berlin Plus Agreement, signed between NATO and the EU in 2002, permits the EU to draw on NATO resources (Vehicles, weapons etc) to participate in conflicts in which NATO chose not to participate.

    In 2018 the EU launched the European Intervention Initiative,

    Only last March, the EU launched their new “Strategic Compass” initiative, alongside creating the “European Peace Facility”, a 5 BILLION Euro “off-budget” project designed to “enhance the EU’s ability to act as a global security provider”.

    You can see how these documents allow for a smooth segue from “NATO-backed US Imperialism” to “EU Peacekeeping” in the geopolitical narrative.

    The EU Army will be sold to the US as “European partners stepping up to the plate” and taking some of the burden of “policing the world”, while in the EU/UK it will be billed as the EU “asserting its independence from US foreign policy”. Neither will be true.

    It might signal a genuine change in the paradigm, a relocation of the seat of power further East as the crumbling US is abandoned and the heart of global hegemony shifts towards the EU. Maybe.

    Either way, the end result will be the same people spending our money on the same weapons, pursuing the same policies, telling the same lies…just with a new name over the door.

    That was always the plan.

    The pieces of the EU Army already exist, they just needed a reason to be assembled.

    And thanks the US’s “chaotic” withdrawal from Afghanistan, and Russia’s “Special Operation” in Ukraine, it looks like they’ve got one.

    Tyler Durden
    Tue, 05/10/2022 – 02:00

  • China's Xi Urges Europe To Promote Russia-Ukraine Peace Talks, Resisting US Pressure
    China’s Xi Urges Europe To Promote Russia-Ukraine Peace Talks, Resisting US Pressure

    During a Monday virtual meeting between Chinese President Xi Jinping and German Chancellor Olaf Scholz, Xi stressed that Europe must play an active role in promoting peace talks, and in “building a balanced, effective and sustainable European security framework,” according to China’s state media.

    Xi said “all efforts must be made to avoid the intensification and expansion of the Ukraine conflict, and China welcomes all efforts that are conducive to promoting peace talks,” according to a translation. “China welcomes all efforts of the international community that facilitate the ceasefire and negotiations, the relevant parties should support Russia and Ukraine in reaching peace through negotiations,” the Chinese leader said further.

    Image: DPA

    Since nearly the start of the conflict, Washington has charged that Beijing is providing behind-the-scenes support for Russia’s invasion of Ukraine, something which Chinese officials have consistently denied. China has also come under fire for appearing to provide political cover in its criticisms of NATO which echo the Russian position.

    Cui Heng, an assistant research fellow from the Center for Russian Studies of East China Normal University, was featured in China’s state-run English daily Global Times as describing Beijing’s perspective that time is running out on Washington’s muscular efforts at arming and propping up Ukrainian forces amid the Russian onslaught. This is why new pressure has been put on America’s European allies to step up and do more, even as China argues they must get serious about negotiations and compromise.

    “Cui said the growing pressure and sanctions by the US and its allies showed that the West was anxious to defeat Russia, especially as the Biden administration is facing huge pressure over a weakening domestic economy and hefty financial aid for Ukraine, knowing that getting deeper into the mire of the Russia-Ukraine conflict would harm its domestic midterm election prospects,” GT states.

    “On the other hand, Wang said with its support for Ukraine stretched to the limit, the US was in urgent need of its allies to demonstrate their commitment to the cause, and help its military sector continue making money from sending weapons to Ukraine,” the report adds.

    Meanwhile China’s ambassador to Russia Zhang Hanhui in fresh remarks Monday announced China will boost ties with Moscow in the areas of military technology, energy, as well as in space. The South China Morning Post quotes him in the following:

    In an interview with Russian state news agency Tass, Zhang Hanhui said energy had been the “most important, fruitful and extensive area of pragmatic cooperation between Russia and China”. He said such cooperation would be strengthened but – as Europe tries to reduce its dependence on Russian fuel – Zhang stopped short of promising to buy more oil and gas from Russia.

    Zhang said there were difficulties in bilateral trade with Russia but the two sides would enhance settlements in their national currencies to ensure stable trade that they hoped would reach US$200 billion by 2024.

    As for the prospect of a Russia-Ukraine ceasefire, by all appearances Washington doesn’t seem interested in pushing for robust talks or diplomatic engagement with Moscow. Instead it is openly on record as saying it wants to see a “weakened” Russia, according to the recent words of Defense Secretary Lloyd Austin.

    Below: Beijing has consistently sided with Kremlin condemnations of NATO expansion, saying this is a key part of Russia’s legitimate security concerns…

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    Official communications are even to the point of Russia’s ambassador to D.C. Anatoly Antonov saying he’s had zero contact with Biden administration officials, describing it as a situation of being “blockaded”.

    “Frankly, we are in a blockade,” Antonov said late last month. “When I came to Washington, my idea was to use the word ‘improvement’ to describe his goals for the relationship. Now I prefer to use the word ‘stabilization.’”

    Tyler Durden
    Mon, 05/09/2022 – 23:50

  • Nonprofit Watchdog Uncovers $350 Million In Secret Payments To Fauci, Collins, Others At NIH
    Nonprofit Watchdog Uncovers $350 Million In Secret Payments To Fauci, Collins, Others At NIH

    Authored by Mark Tapscott via The Epoch Times,

    An estimated $350 million in undisclosed royalties were paid to the National Institutes of Health (NIH) and hundreds of its scientists, including the agency’s recently departed director, Dr. Francis Collins, and Dr. Anthony Fauci, according to a nonprofit government watchdog.

    “We estimate that up to $350 million in royalties from third parties were paid to NIH scientists during the fiscal years between 2010 and 2020,” Open the Books CEO Adam Andrzejewski told reporters in a telephone news conference on May 9.

    “We draw that conclusion because, in the first five years, there has been $134 million that we have been able to quantify of top-line numbers that flowed from third-party payers, meaning pharmaceutical companies or other payers, to NIH scientists.”

    The first five years, from 2010 to 2014, constitute 40 percent of the total, he said.

    “We now know that there are 1,675 scientists that received payments during that period, at least one payment. In fiscal year 2014, for instance, $36 million was paid out and that is on average $21,100 per scientist,” Andrzejewski said.

    “We also find that during this period, leadership at NIH was involved in receiving third-party payments. For instance, Francis Collins, the immediate past director of NIH, received 14 payments. Dr. Anthony Fauci received 23 payments and his deputy, Clifford Lane, received eight payments.”

    Collins resigned as NIH director in December 2021 after 12 years of leading the world’s largest public health agency. Fauci is the longtime head of NIH’s National Institute for Allergies and Infectious Diseases (NIAID), as well as chief medical adviser to President Joe Biden. Lane is the deputy director of NIAID, under Fauci.

    NIH Director Dr. Francis Collins holds up a model of the coronavirus as he testifies before a Senate Appropriations Subcommittee looking into the budget estimates for the National Institute of Health (NIH) and the state of medical research, on Capitol Hill on May 26, 2021. (Sarah Silbiger/Pool via AP)

    The top five NIH employees measured in terms of the number of royalty payments that they received while on the government payroll, according to a fact sheet published by Open the Books, include Robert Gallo, National Cancer Institute, 271 payments; Ira Pastan, National Cancer Institute, 250 payments; Mikulas Popovic, National Cancer Institute, 191 payments; Flossie Wong-Staal, National Cancer Institute, 190 payments; and Mangalasseril Sarngadharan, National Cancer Institute, 188 payments.

    Only Pastan continues to be employed by NIH, according to Open the Books.

    “When an NIH employee makes a discovery in their official capacity, the NIH owns the rights to any resulting patent. These patents are then licensed for commercial use to companies that could use them to bring products to market,” the fact sheet reads.

    “Employees are listed as inventors on the patents and receive a share of the royalties obtained through any licensing, or ‘technology transfer,’ of their inventions. Essentially, taxpayer money funding NIH research benefits researchers employed by NIH because they are listed as patent inventors and therefore receive royalty payments from licensees.”

    An NIH spokesman didn’t respond by press time to a request for comment.

    Andrzejewski told reporters that the Associated Press reported extensively on the NIH royalty payments in 2005, including specific details about who got how much from which payers for what work, that the agency is denying to Open the Books in 2022.

    “At that time, we knew there were 918 scientists, and each year, they were receiving approximately $9 million, on average with each scientist receiving $9,700. But today, the numbers are a lot larger with the United States still in a declared national health emergency. It’s quite obvious the stakes in health care are a lot larger,” Andrzejewski said.

    He said the files Open the Books is receiving—300 pages of line-by-line data—are “heavily redacted.”

    “These are not the files the AP received in 2005 where everything was disclosed—the scientist’s name, the name of the third-party payer, the amount of the royalty paid by the payer to the scientist,” Andrzejewski said. “Today, NIH is producing a heavily redacted database; we don’t know the payment amount to the scientist, and we don’t know the name of the third-party payer, all of that is being redacted.”

    Federal officials are allowed to redact information from responses to FOIA requests if the release of the data would harm a firm’s commercial privilege.

    The undisclosed royalty payments are inherent conflicts of interest, Andrzejewski said.

    “We believe there is an unholy conflict of interest inherent at NIH,” he said. “Consider the fact that each year, NIH doles out $32 billion in grants to approximately 56,000 grantees. Now we know that over an 11-year period, there is going to be approximately $350 million flowing the other way from third-party payers, many of which receive NIH grants, and those payments are flowing back to NIH scientists and leadership.”

    Fauci and Lane told AP that they agreed there was an appearance of a conflict of interest in getting the royalties, with Fauci saying that he contributed his royalties to charity. Lane didn’t do that, according to Andrzejewski.

    The governing ethics financial disclosure form in the past defined the royalty payments as income recipients received from NIH, which meant the recipients weren’t required to list their payments on the form.

    But Andrzejewski said NIH has refused to respond to his request for clarification on the disclosure issue.

    “If they are not, none of these payments are receiving any scrutiny whatsoever and to the extent that a company making payments to either leadership or scientists, while also receiving grants … then that just on its face is a conflict of interest,” he said.

    Open the Books is a Chicago-based nonprofit government watchdog that uses the federal and state freedom of information laws to obtain and then post on the internet trillions of dollars in spending at all levels of government.

    The nonprofit filed a federal Freedom of Information Act (FOIA) suit seeking documentation of all payments by outside firms to NIH and/or current and former NIH employees.

    NIH declined to respond to the FOIA, so Open the Books is taking the agency to court, suing it for noncompliance with the FOIA. Open the Books is represented in federal court in the case by another nonprofit government watchdog, Judicial Watch.

    Tyler Durden
    Mon, 05/09/2022 – 23:30

  • Tesla Reportedly Halts Shanghai Production Again, This Time Due To "Issues With Supplies"
    Tesla Reportedly Halts Shanghai Production Again, This Time Due To “Issues With Supplies”

    No sooner did it seem Tesla got back up and running in Shanghai than its plant is apparently halting production yet again, according to an exclusive from Reuters late Monday night. The halt is due to “issues with supplies,” according to the report.

    It comes just three weeks after the plant resumed production after shutting down due to Covid lockdowns. The plant was closed for a total of 22 days, Reuters noted. 

    Shanghai is in its sixth week of lockdowns, the report notes, and as of now it is “unclear when the supply issues can be resolved and when Tesla can resume production”.

    Wire harness maker Aptiv is one supplier who is currently facing issues due to “infections found among its employees”. 

    Tesla had just started to eye resuming double shifts at its plant, we noted last Friday. The plant was making plans to “resume double shifts” at its Shanghai factory as soon as mid-May after starting back up in mid April. 

    Upon the April restart, workers were living on site to reduce Covid risk. Workers returned to work under this system were working 12 hour shifts, six days a week, we wrote. 

    Management had been “canvassing the willingness of staff to leave their residential compounds” and “looking at daily door-to-door shuttle buses that would allow some workers to return home after their shift rather than sleep at the factory”. 

    We’re guessing that plans for the double shifts have likely been shelved for the time being…

    We also wrote on Friday that the plant had “remained challenged” by parts shortages, pushing back waits for new Model 3 Teslas to 20 to 24 weeks, instead of their normal wait time of 4 to 6 weeks. 

    Recall, back on April 19, we wrote that Shanghai had re-opened. Additionally, we noted days ago that Elon Musk was eerily quiet about China’s lockdowns, after in 2020, Musk slammed stay-at-home orders in the U.S., labeling them “fascist”. Musk called shelter-in-place orders “forcibly imprisoning people in their homes against all their constitutional rights,” CNBC reported at the time.

    Tyler Durden
    Mon, 05/09/2022 – 23:10

  • Did The Biggest Recent Buyer Of Bitcoin Just Become A Forced-Seller?
    Did The Biggest Recent Buyer Of Bitcoin Just Become A Forced-Seller?

    Authored by Sam Rule via BitcoinMagazine.com,

    As the Terra stablecoin becomes depegged from the U.S. dollar, the biggest buyer of bitcoin in recent months could become its biggest forced seller.

    UST DOLLAR PEG COLLAPSES

    What’s been developing over the weekend and has been amplified today is the depegging of the Terra stablecoin (UST) to the U.S. dollar now with Terra currently trading at $0.85. Many of these market dynamics have been playing out in near real time today as the situation worsens and will likely change again over the next 24 hours.

    It started with billions of dollars in UST leaving the high-yielding Anchor Protocol over the weekend and turned into a full-on digital bank run.

    https://platform.twitter.com/widgets.js

    UST relies on the LUNA token to maintain its price through algorithmic minting and burning mechanics. Through this method, an arbitrage opportunity is created when UST is off its $1 peg. Traders can burn LUNA and create new UST when UST is priced over $1 and profit. When UST is below $1, UST gets burned and LUNA is minted to help stabilize the peg. Yet, as UST has suffered a blow to demand and liquidity, LUNA has fallen nearly 26% in just one day while BTC is down nearly 8%.

    As UST has suffered a blow to demand and liquidity, LUNA has fallen nearly 26% in just one day while BTC is down nearly 8%.

    Why this matters for bitcoin is because the centralized Luna Foundation Guard (LFG) has accumulated 42,530 bitcoin ($1.275 billion at a $30,000 price) as reserves to be used in these exact situations, to defend the UST peg when it sustains below the $1. And currently, that is exactly what they are attempting to do.

    Luna Foundation Guard is attempting to leverage its BTC reserves to defend its UST peg.

    As a response, the LFG voted earlier today to loan out $750 million of bitcoin and $750 million of UST to OTC trading firms in efforts to help sustain the UST peg. Later in the day, the LFG announced a withdrawal of nearly 37,000 BTC to loan out to market makers highlighting that it is currently being used to buy UST. 

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    Now the main risk to the market is that the biggest buyer of bitcoin over the last couple months will now become the market’s biggest forced seller.

    The market expectations and potential selling have certainly played a role in bitcoin’s historic selloff today, but it comes at the same time that broader equity markets have been selling off in tandem.

    Bitcoin’s correlation to broader equity indexes and tech stocks is at historic highs and is following the same market dynamics since November 2021.

    *  *  *

    This is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

    Ty
    Mon, 05/09/2022 – 23:00

  • Dems Ditch COVID Funds To Rush $40 Billion To Ukraine
    Dems Ditch COVID Funds To Rush $40 Billion To Ukraine

    Congressional Democrats are rushing forward to whip up $39.8 billion in additional Ukraine aid, after agreeing to drop a a proposal for additional COVID-19 related funding they planned to combine.

    The package, which tops President Joe Biden’s $33 billion request in April, could receive a House vote as soon as Tuesday, with Senate Democrats indicating that they are prepared to move swiftly according to Reuters.

    Biden on April 28 asked Congress for $33 billion to support Ukraine, including more than $20 billion in military assistance. That proposal was a dramatic escalation of U.S. funding for the war with Russia. read more

    The new proposal includes an additional $3.4 billion for military aid and $3.4 billion in humanitarian aid, the sources said. -Reuters

    While emergency aid for Ukraine has had bipartisan support for weeks, disputes over domestic funds for pandemic relief, or whether stiffer immigration controls should be included, have delayed the process.

    “We cannot allow our shipments of assistance to stop while we await further congressional action,” read a statement from President Biden, who called on lawmakers to expedite the funding so he could sign it within the next few days.

    The urgency comes after Secretary of State Antony Blinken and Defense Secretary Lloyd Austin sent a letter to House Speaker Nancy Pelosi and top House Republican Kevin McCarthy begging for the funds, which they said would run out in two weeks.

    “We need your help” wrote Austin and Blinken, who said there was ‘only’ $100 million left from a presidential authorization of weapons (which required no congressional approval).

    “We expect to exhaust that authority no later than May 19, 2022,” the letter continues.

    Senate Republican Leader Mitch McConnell told reporters he was pleased the Ukraine assistance was decoupled from COVID-19 aid. He had advocated for a “clean” Ukraine bill repeatedly in speeches in the Senate. -Reuters

    Some Democrats, such as #2 Senator Dick Durban, weren’t happy with the decision.

    “It would have been so much better for us to protect the United States as well as worked to protect Ukraine,” said Durban, adding that separating Ukraine aid from COVID-19 aid “doesn’t help. Putting those two together would have been a positive.”

    Biden owned stripping the COVID relief from the bill, saying on Monday that he was advised it would slow down action “on the urgently needed Ukrainian aid.”

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    Tyler Durden
    Mon, 05/09/2022 – 22:30

  • 25% Of San Francisco's EV Charging Stations Don't Work 
    25% Of San Francisco’s EV Charging Stations Don’t Work 

    California’s bold move toward an EV revolution and eliminating the sale of gasoline- and diesel-powered vehicles by 2035 have hit a snag in the liberal utopian city of San Francisco. 

    A recent report by David Rempel of the University of California at Berkeley found a quarter of all EV charging stations in the Bay Area were out of order, suggesting current infrastructure isn’t ready for the giant leap toward an electrified world. 

    Here’s a section of the study describing the poor infrastructure for EVs across the Bay Area: 

    In order to achieve a rapid transition to electric vehicle driving, a highly reliable and easy to use charging infrastructure is critical to building confidence as consumers shift from using familiar gas vehicles to unfamiliar electric vehicles … This study evaluated the functionality of the charging system for 657 EVSE (electric vehicle service equipment) CCS connectors (combined charging system) on all 181 open, public DCFC (direct current fast chargers) charging stations in the Greater Bay Area. An EVSE was evaluated as functional if it charged an EV for 2 minutes or was charging an EV at the time the station was evaluated. Overall, 72.5% of the 657 EVSEs were functional. The cable was too short to reach the EV inlet for 4.9% of the EVSEs. Causes of 22.7% of EVSEs that were non-functioning were unresponsive or unavailable screens, payment system failures, charge initiation failures, network failures, or broken connectors.

    The study notes that the nine-county San Francisco Bay Area region (Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma) were included. It excluded private EV charging stations in paid parking lots, private workplaces, or business sites with restricted access hours. Also, all Tesla Superchargers were excluded since those stations weren’t accessible to all EVs. 

    California is the largest auto market in the US and the 10th largest globally. Its aggressive transition to EVs, all in the name of climate change, is hitting road bumps as infrastructure support cracks in at leader one major metro area, and the state’s power grid is unreliable as fossil fuel power plants have been retired too quickly in the transition to unsustainable solar and wind power generations. This has caused a jump in electricity rates for customers who use Pacific Gas & Electric Co., Southern California Edison Co., and San Diego Gas & Electric. Rates are so expensive that charging some EVs in certain parts of the state is almost as much as filling up a vehicle at the gas station. 

    The incentives for owning an EV in California are diminishing, from faulty infrastructure in San Francisco to extremely high electricity rates in some parts of the state. Not exactly what is needed to instill confidence in increasing EV ownership.

    Tyler Durden
    Mon, 05/09/2022 – 22:10

  • Sen. Graham Pushes To Designate Russia A 'State Sponsor Of Terror'
    Sen. Graham Pushes To Designate Russia A ‘State Sponsor Of Terror’

    Authored by Kyle Anzalone via AntiWar.com,

    Senator Lindsey Graham said the US must pursue an even more aggressive strategy against Russia. While appearing on Fox News Sunday with Brett Baier, the hawkish Senator advocated for a barrage of actions targeting Moscow.

    Graham promoted a new piece of legislation he co-authored with Senator Richard Blumenthal that calls on the White House to designate Russia as a state sponsor of terrorism. Senator Graham published an op-ed Friday, arguing the designation will allow the US to conduct more legal and economic warfare against Russia.

    Via Sky News

    However, Graham does not link Russia to a terrorist group. Rather, he compares the invasion of Ukraine to the Nazi military campaign during World War Two and claims Vladimir Putin is a “megalomaniac wanting to rewrite the map of Europe and recreate the former Russian Empire.”

    The Senator also urges the passing of the $33 billion aid bill for Ukraine, prosecuting Putin for war crimes through the International Criminal Court, and putting “more weapons in theater that can target the Russian military offensively.”

    On Saturday, the Speaker of the Russian State Duma claimed the Western intervention in Ukraine amounted to direct attacks on Russia. “Washington essentially coordinates and develops military operations, thereby directly participating in the hostilities against our country,” Vyacheslav Volodin said.

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    Baier posed two questions to Graham, asking if he was concerned that increasing military involvement in Ukraine could lead to direct confrontation with Russia.

    The Senator was dismissive of the potential conflict between nuclear powers saying, “we can’t let him [Putin] win in Ukraine.”

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    Graham boldly called on the US to “take out Putin” and said the Russian leader no longer had an “off-ramp.” He predicted that the lack of an off-ramp would provoke Putin to use chemical or nuclear weapons, causing the US to enter the conflict directly.

    Tyler Durden
    Mon, 05/09/2022 – 21:50

  • Pro-Life Organization Fire-Bombed With Molotov Cocktail
    Pro-Life Organization Fire-Bombed With Molotov Cocktail

    Following a Supreme Court draft leak that could overturn Roe v. Wade, the nation has become even more divided and riled up by the actions (or potential actions) of ‘the other’.

    There were incidents of pro-abortion activists gathering outside the homes of at least two conservative U.S. Supreme Court Justices on Saturday night. Then on Sunday morning, pro-life organization Wisconsin Family Action’s headquarters in Madison, Wisconsin, was firebombed, according to local news Madison.com.

    Police have called the fire an “arson.” The building is located near the Dane County Regional Airport, or about 6 miles northeast of downtown Madison, the capital of Wisconsin. 

    Julaine Appling, the president of the anti-abortion lobbying group, was notified by a staffer around 0600 local time Sunday of the arson attack. 

    When firefighters arrived, flames were shooting out of a window. It wasn’t immediately clear who or possibly which pro-abortion group was responsible for the fire. Investigators said there were signs a Molotov cocktail was used. 

    The arsonist left behind a frightening message, spray-painted in black on the side of the building that read: “If abortions aren’t safe then you aren’t either.”

    Madison Police Chief Shon Barnes said the attack was “targeted.” 

    Appling said this is a “direct threat against” our organization: 

    “We will repair our offices, remain on the job, and build an even stronger grassroots effort … We will not back down. We will not stop doing what we are doing. Too much is at stake.”

    On Sunday afternoon, Democratic Gov. Tony Evers condemned the arson attack in a tweet: 

    “We condemn violence and hatred in all forms, including the actions at Wisconsin Family Action in Madison last night. 

    “We reject violence against any person for disagreeing with another’s view … We will work against overturning Roe and attacks on reproductive rights by leading with empathy and compassion. We will defend what we believe in with our words and our voices — in the streets, in halls of government, and at the ballot box. In Wisconsin, we must lead by example.”

    Republican Sen. Ron Johnson said the attack shouldn’t be tolerated. 

    “This attack is abhorrent and should be condemned by all,” Johnson said.

    There are fears that social instability might erupt in metro areas upon the Supreme Court announcement if Roe v. Wade is overturned. The Biden administration has yet to denounce the disgraceful leak and targeted protests of justices. One justice had to go in hiding on Monday… 

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    As Jonathan Turley concluded earlier, all three branches, having to be protected from enraged citizens on the left or the right. Schumer’s 2020 pledge that justices would “pay the price” has been realized as they and their families are now bunkered in their homes. Despite the shocking image of a court system under attack, President Biden has not mustered the courage to dissuade these protesters. He appears to be following the lead of French revolutionary Abbe Sieyes, who watched as his 1789-99 revolution spun out of control; asked what he had done during “the Terror,” he replied: “I survived.” President Biden is now in survival mode, too. It seems he does not lack decency, just the courage to defend it.

    Tyler Durden
    Mon, 05/09/2022 – 21:30

  • Michigan Police Seize Voting Machine During Investigation Into Possible Election Breaches
    Michigan Police Seize Voting Machine During Investigation Into Possible Election Breaches

    Authored by Zachary Stieber via The Epoch Times (emphasis ours),

    Police officers in Michigan took custody of a voting machine as the state expands its investigation into what it’s described as possible unauthorized access to election equipment.

    A person places his ballot in a tabulating machine in East Lansing, Mich., in a file photograph. (Jeff Kowalsky/Reuters)

    Michigan State Police and officials with Michigan Attorney General Dana Nessel’s office seized an Irving Township voting tabulator on April 29, township supervisor Jamie Knight told The Epoch Times in an email.

    The seizure was done pursuant to a search warrant, she said.

    “The Township intends to fully cooperate with law enforcement, and the Township attorneys have been in contact with the Michigan State Police regarding this matter. The Township has no further comment at this time,” Knight added.

    An investigation was launched earlier this year at the request of Michigan Secretary of State Jocelyn Benson, who said her office received reports that an unnamed third party “was allowed to access vote tabulator components and technology in Roscommon County.”

    “Michigan law is clear about the security threats that emerge when anyone gains unauthorized access to our election machines or technology, and I will have no tolerance for those who seek to illegally tamper with our voting equipment,” Benson, a Democrat, said at the time.

    Michigan State Police Lieutenant Derrick Carroll confirmed that the probe has expanded beyond Roscommon County, which declined to comment.

    “As we found out more information we’ve expanded our area to see if any other places were compromised,” Carroll told Reuters. “We have gone to other regions.”

    Carroll told The Epoch Times in an email that the probe has expanded but declined to share any details.

    Nessel’s office declined to comment.

    Carroll previously told news outlets that the probe will continue “until we have exhausted all leads,” adding that the possible unauthorized access “did not, in any way, affect the 2020 election.”

    Tyler Durden
    Mon, 05/09/2022 – 21:10

  • COVID Cases Explode After White House Media Dinner Becomes Superspreader Event
    COVID Cases Explode After White House Media Dinner Becomes Superspreader Event

    Cases of Covid-19 among attendees to the White House correspondents’ dinner two weekends ago continue to mount, as the fully vaccinated and boosted ‘elites’ who condescended to non-compliant Americans participated in a superspreader event.

    As The Hill notes, “High-profile cases following the dinner include ABC reporter Jonathan Karl, Secretary of State Antony Blinken, and reporters from The Washington Post, Voice of America and other outlets.”

    There is no exact count, and it is not clear which dinner attendees contracted the virus at the dinner itself or at one of the many parties last weekend surrounding it.  

    But the string of reported cases does emphasize the point that even as the country seeks to move on from the virus, large indoor gatherings do carry some risk.  

    The cases have also played into an ongoing debate, with some arguing that the current era of COVID-19 allows vaccinated and boosted people to decide to attend large gatherings even if it means a small risk, while others are more cautious, pointing to the downstream effects on other people of increased transmission. –The Hill

    No – it’s not a debate over whether large gatherings are a good idea since the dominant strain of Covid is only slightly more deadly than the common cold and the vast majority of people will make it through Covid-19 without issue. The point is that those who refused to play the lockdown game were chastised by the very people at this superspreader event.

    “I’m yet another [White House Correspondents’ Association] weekend casualty,” tweeted Puck News correspondent Julia Ioffe. “I knew I was taking a risk and, well, here we are!”

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    WaPo journalist Jada Yuan tweeted that she had tested positive, then felt obligated to condescend over how people should conduct themselves to avoid her mistake.

    “Hindsight and all that, but wear a mask or leave or tell your employer you can’t go if you’re in a situation where you feel uncomfortable,” she tweeted, adding “Those consequences are usually better than the ones you’ll face if you get sick.”

    According to White House Correspondents’ Association President Steven Portnoy, “We worked hard to publicize our protocols and encouraged those eligible to get booster shots in the weeks leading up to the dinner,” adding “Our event implemented protocols that went beyond any guidance or regulation issued by the CDC or the DC health department. We wish anyone who may not be feeling well a speedy recovery.”

    Tyler Durden
    Mon, 05/09/2022 – 20:50

  • With World Gripped By Fertilizer Crisis, Biden Admin Clings To "Climate-Inspired Utopian Food-Production Fantasies"
    With World Gripped By Fertilizer Crisis, Biden Admin Clings To “Climate-Inspired Utopian Food-Production Fantasies”

    Authored by Nathan Worcester via The Epoch Times,

    Samantha Power: ‘Never let a crisis go to waste.’ Do the World Economic Forum and China agree?

    “Fertilizer shortages are real now.”

    Uttered by USAID’s Samantha Power in a May 1 ABC interview with former Democratic advisor George Stephanopoulos, the words briefly drowned out the din of the news cycle.

    They were not unexpected to some.

    Power, who served as U.N. ambassador under Obama, mentioned fertilizer shortages after weeks of hints from the Biden administration.

    White House Press Secretary Jen Psaki repeatedly alluded to challenges obtaining fertilizer in recent press briefings. So did President Joe Biden himself in a joint statement with EU President Ursula von der Leyen.

    “We are deeply concerned by how Putin’s war in Ukraine has caused major disruptions to international food and agriculture supply chains, and the threat it poses to global food security. We recognize that many countries around the world have relied on imported food staples and fertilizer inputs from Ukraine and Russia, with Putin’s aggression disrupting that trade,” the leaders stated.

    In an April report titled, “The Ukraine Conflict and Other Factors Contributing to High Commodity Prices and Food Insecurity,” the USDA’s Foreign Agriculture Service acknowledged that “for agricultural producers around the world, high fertilizer and fuel prices are a major concern.”

    While political rhetoric has often focused on Russia, the rise in fertilizer prices did not begin with its invasion of Ukraine.

    An analysis from the Peterson Institute of International Economics shows that fertilizer prices have rapidly climbed since mid-2021, spiking first in late 2021 and again around the time of the invasion.

    Industry observers have pointed out that commodity prices are not solely affected by Vladimir Putin.

    Max Gagliardi, an Oklahoma City oil and gas industry commentator who cofounded the energy marketing firm Ancova Energy, told The Epoch Times that the war and sanctions have helped drive the upward climb of natural gas prices in Europe.

    A worker walks at the Yara ammonia plant in Porsgrunn, Norway, on Aug. 9, 2017. (Lefteris Karagiannopoulos/Reuters)

    Natural gas is used in the Haber-Bosch process, which generates the ammonia in nitrogen fertilizers. Those fertilizers feed half the planet.

    Gagliardi thinks the picture is more complicated at home, where environmental, social, and corporate governance (ESG) has become a controversial tool of stakeholder capitalism, often used to force divestment from fossil fuels or other industries disfavored by the left.

    “It’s a combination of record demand domestically and from LNG [liquid natural gas] exports combined with less than expected supply, in part due to the starving of capital for the O&G industry due to the ESG/green movement pressures on capital providers, plus pressure from Wall Street to spend less capital and return value to shareholders,” he said.

    Language from Power Echoes Green Activists, EU, WEF

    In the case of increasing costs for oil, natural gas, and coal, some politicians and green activists have argued that those fast-rising prices mark an opportunity to accelerate a move from hydrocarbons to wind, solar, and electrification.

    “Big Oil is price gouging American drivers. These liars do nothing to make the United States energy independent or stabilize gas prices. It’s time we break up with Big Oil and ignite a clean energy revolution,” Sen. Ed Markey (D-Mass.) said on Twitter in March.

    “I say we take this opportunity to double down on our renewable energy investments and wean ourselves off of planet-destroying fossil fuels[.] Never let a crisis go to waste,” said former Joe Biden delegate and political commentator Lindy Li in a Twitter post about ExxonMobil’s exit from Russia’s Far East.

    Meanwhile, Mandy Gunasekara, an environmental lawyer who served as the Environmental Protection Agency’s chief of staff under President Trump, said in an interview with The Epoch Times, “It’s always been part of their plan to make the price of traditional energy sources go up, so then wind and solar could actually compete with them.”

    Describing how fertilizer shortages could actually help advance a particular agenda, Power sounded much like Li.

    She even used an identical phrase: “Never let a crisis go to waste.”

    Intentionally or not, this echoed a line from another high-profile Obama alum, Rahm Emanuel: “Never let a serious crisis go to waste.” Emanuel was talking about the 2008-2009 financial meltdown.

    “Less fertilizer is coming out of Russia. As a result, we’re working with countries to think about natural solutions, like manure and compost. And this may hasten transitions that would have been in the interest of farmers to make anyway. So, never let a crisis go to waste,” Power told Stephanopoulos.

    Power’s language of setting crisis as opportunity parallels similar statements from environmental groups.

    Writing to EU President von der Leyen and other EU bureaucrats, a group of European and international environmental organizations urged the union to stay the course on environmental policy.

    “The crisis in Ukraine is yet another reminder of how essential it is to implement the Green Deal and its Farm to Fork and Biodiversity Strategies,” the letter states.

    The Farm to Fork Strategy confidently asserts that its actions to curb the overuse of chemical fertilizers “will reduce the use of [fertilizers] by at least 20 percent by 2030.”

    “Ploughing more farmland, as is currently being put forward, to grow crops for biofuels and intensive animal farming by using even more synthetic pesticides and [fertilizers] would be absurd and dangerously increase ecosystem collapses, the most severe threat to social-ecological stability and food security,” the activists’ letter argues.

    “The European Union must tackle the current challenges by accelerating the implementation of its strategies to reduce the use of synthetic pesticides and [fertilizers], to preserve its natural environment and the health of its citizens.”

    Numerous publications from the World Economic Forum (WEF), known for its role in orchestrating the global response to COVID-19, have made similar arguments.

    A 2020 white paper from WEF and the consulting firm McKinsey and Company warns of greenhouse gas emissions and potential runoff from fertilizers, advocating for an end to fertilizer subsidies in developing countries and praising China for its efforts to reduce fertilizer use.

    A 2018 WEF white paper, co-authored with the consulting firm Accenture, claims that “a 21st century approach to organic farming” should strive to close the gap in yields between organic and conventional farming.

    WEF’s vision of 21st century agriculture comes into greater focus in another 2018 report titled, “Bio-Innovation in the Food System.”

    It advocates for the bioengineering of new microbes to fix nitrogen more efficiently in plants.

    “This offers the prospect of lowering and more optimally applying nitrogen fertilizer,” WEF’s report states.

    WEF has also pushed the use of “biosolids”—in other words sewage sludge—as fertilizer.

    Urine, it notes, “makes an excellent agricultural fertilizer.”

    Gunasekara, formerly of the EPA, said that fertilizer overuse and runoff presents serious risks, giving rise to toxic algal blooms in the Great Lakes and the Gulf of Mexico.

    However, “generally speaking, the farmers are very, very efficient with their fertilizer use. They have a built-in incentive not to waste something that is a high input cost,” she told The Epoch Times, adding that in her experience, industry and communities could work out positive solutions with regulators.

    Heavy-handed restrictions, she argued, are not the solution.

    The UK Absolute Zero report, produced by academics at top British universities, goes even further than some other reports in its opposition to nitrogen-based fertilizers and conventional agriculture more generally.

    This photo shows sheep feeding on lush grass on the property of Australian farmer Kevin Tongue near the rural city of Tamworth in New South Wales, Australia, on May 4, 2020. (Peter Parks/AFP via Getty Images)

    It anticipates a phaseout of beef and lamb production, with “fertilizer use greatly reduced,” in order to meet net-zero emissions targets by 2050.

    “There are substantial opportunities to reduce energy use by reducing demand for [fertilizers],” the report states.

    It also envisions cuts to energy in the food sector of 60 percent before 2050.

    That imagined energy austerity, with its many unforeseeable consequences for human life, apparently will not last forever.

    The report claims that after 2050, energy for fertilizer and other aspects of food production will “[increase] with zero-emissions electricity.”

    “A food crisis/famine advances the long-term goal of more centralized control of energy, food, transportation, etc., as advanced by the Davos crowd of the WEF. Governments must expand their powers to ‘handle’ crises, and that is what progressives love more than anything,” Marc Morano, proprietor of the website Climate Depot, told The Epoch Times.

    Sri Lanka’s Organic Experiment a Stark Warning

    Though Power’s remarks were consistent with talking points from Democrats, WEF, the EU, and similar factions, they came at a particularly inconvenient moment for advocates of organic fertilizer—Sri Lanka’s recent experiment with abandoning chemical fertilizer has plunged the island nation into chaos that shows no signs of letting up.

    According to a 2021 report from the USDA Foreign Agriculture service,  Sri Lankan agricultural economists warned that a rapid shift from chemical to organic fertilizers “will result in significant drops in crop yields.”

    The country has since had to compensate one million of its farmers to the tune of $200 million, as reported by Al Jazeera.

    With food shortages now a reality, anti-government protests prompted Sri Lankan President Gotabaya Rajapaksa to declare a state of emergency on May 6—the second in two months.

    “[Sri Lanka is] now literally on the verge of famine, because they’ve had massive crop failures,” Gunasekara said.

    A farmer prepares a paddy field for sowing in Biyagama on the outskirts of Colombo on October 21, 2020. (Ishara S. Kodikara/AFP via Getty Images)

    “This administration wants to use this as an opportunity to push their Green New Deal-style farming tactics, which we’ve seen implemented elsewhere, that cause significant problems beyond what we’re currently facing from our farmers’ perspective and what consumers are going to be facing,” she added.

    “Manure cannot compete with modern chemical agriculture for high yield farming that the world depends on,” Morano of Climate Depot said.

    Rufus Chaney, a retired USDA scientist known for his research on sewage sludge-based fertilizers, echoed Morano’s skepticism about making up for missing chemical fertilizers with organic alternatives.

    “There are not enough useful (and not already being used) organic fertilizers to change the balance of any chemical fertilizer shortages,” Rufus told The Epoch Times via email.

    “Nearly all organic fertilizers are built on livestock manure and can only be shipped short distances before it becomes cost-prohibitive,” he added.

    These realities underscore another apparent contradiction in green policy—even as climate activists push for cuts to chemical fertilizer use and greater reliance on organic alternatives, they are working assiduously to cull the livestock populations that provide manure for those fertilizers.

    In Northern Ireland, for example, a newly passed climate Act will require the region to lose a million sheep and cattle.

    The EU’s Farm to Fork Strategy even states that work on fertilizers will be focused “in hotspot areas of intensive livestock farming and of recycling of organic waste into renewable fertilizers.”

    “For years we were warned that ‘climate change’ would cause food shortages, but now it appears that climate policy will be one of the biggest factors in causing food shortages,” Morano told The Epoch Times.

    Bails of hay sit in a paddock containing a failed wheat crop on farmer Trevor Knapman’s property in Gunnedah, NSW, Australia, on Oct. 4, 2019. (David Gray/Getty Images)

    He cited research suggesting that a move to organic farming in the United Kingdom could actually raise carbon dioxide emissions, as the decrease in domestic yields can be expected to boost carbon-intensive imports.

    “What the Biden admin is doing is seizing on ‘crises’ to advance their agenda. Greta [Thunberg] famously said, ‘I want you to panic.’ Because when you panic, you don’t think rationally and calmly, and you make poor choices. The only way they can sell these climate-inspired utopian energy and food production fantasies is during times of COVID crisis or wartime crisis,” he added.

    China’s Role Scrutinized

    Still, others see the focus on Russia as a distraction from China’s maneuvering on the world stage.

    In 2021, China limited exports of both phosphate and urea fertilizers. The country has also stepped up its fertilizer imports.

    China’s export restrictions came after it rapidly emerged as “the most important and most influential country in the fertilizer business,” according to an outlook document from the Gulf Chemicals & Petrochemicals Association.

    The Peterson Institute’s analysis shows that as global fertilizer prices shot upward in 2021 and 2022, China’s fertilizer prices mostly leveled off.

    Although the USDA’s April report did note the impact of China’s fertilizer export restrictions and heavy fertilizer imports, its executive summary drew greater attention to the Russia-Ukraine conflict.

    That summary did not mention China by name among the “countries imposing export bans and restrictions.”

    Stanford University’s Gordon Chang, a China expert, warned on Twitter on May 6 that China has been “buying chemical companies whose products are needed for fertilizer and, more generally, food production,” citing comments from onshoring advocate Jonathan Bass.

    The Epoch Times has reached out to Chang and Bass for additional details.

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    China has also been buying up American farmland as well as ports around the world, including ports in the now-food insecure Sri Lanka.

    Physicist Michael Sekora, a former project director in the Defense Intelligence Agency (DIA), told The Epoch Times that worldwide fertilizer shortages could reflect China’s long-range technology strategy.

    A key element of that strategy, he argued, is undercutting the United States whenever and wherever possible.

    “Our ability to produce food is very much under attack right now. Some people say, ‘Oh, it’s just a coincidence.’ It’s China,” Sekora said.

    “China has been very strategic in making sure they shore up what they have and restricting access throughout the rest of the world,” Gunasekara said.

    “When you have people come in that are very anti-development and anti-growth, China can put its finger on the global market, making it that much harder, and then try to use that as an example to exert more authority and have access to greater power.”

    Pain Felt Around the World

    “It’s been hectic,” said South African tobacco farmer Herman J. Roos.

    Roos told The Epoch Times that fertilizer prices near him have jumped since the invasion of Ukraine, on the heels of steep increases over the previous year.

    He was able to buy all the fertilizer he needs for this year before the latest price shock. Yet, he expects shortages of urea, monoammonium phosphate (MAP), and other fertilizers to strain a population of farmers already under significant stress.

    Copper theft, lack of government support, and the ever-present threat of physical violence are all pushing Roos and producers like him to the brink.

    Yet, for all the challenges in South Africa, Roos anticipates the fallout will be worse elsewhere in the continent.

    “The economy will be hit harder in countries like Mozambique, Zambia, and Zimbabwe—countries where your agricultural system is more focused on subsistence farming,” Roos added.

    They and other sub-Saharan African countries are heavily dependent on South Africa for their food supply.

    Roos prays food riots won’t come to South Africa. The country is still recovering from a wave of riots in summer 2021, prompted by the arrest of former South African President Jacob Zuma.

    He does predict that some farmers in the country will go bankrupt.

    Let the master gardeners foot the bill and do all the work, then show up to get in on the harvest. (StockMediaSeller/Shutterstock)

    Back in the United States, Connecticut landscaper Adam Geriak does not yet face such stark choices.

    He told The Epoch Times that fertilizer prices near him are up, in line with estimates a Connecticut garden store provided to The Epoch Times.

    “I do primary garden work and use organic fertilizers, which primarily come from poultry manure,” Geriak said, adding that the price of poultry manure fertilizer may have risen too.

    He does not think fertilizer price increases will have much of an effect on him. Yet, other facets of the current economic picture are worrisome to him as tries to manage his small business most effectively.

    “I’m having a hard time planning for the future because of the uncertainty, and I think other owners are feeling this too. In the previous two years, clients seemed to have open coffers. They wanted more projects done and there seemed to be a lot of money going around. Clients seem to be a bit tighter now, asking how they can save money on certain projects and such,” Geriak said.

    “Being on the verge of a recession, and retirement accounts down may be leading to these issues,” he added.

    The USDA report on Sri Lanka’s organic experiment states that the country’s government made impossible promises to different parties.

    It informed farmers it would handle the cost of moving away from chemical fertilizers while telling consumers that rice on their shelves would not become pricier, all while attempting to realize environmental and public health benefits through a breakneck transition to organic fertilizers.

    “If you put too much emphasis on environmental issues, and you ignore the very real impact that can have to people’s daily lives, it can have dire consequences,” Gunasekara told The Epoch Times.

    “Unfortunately, we’re seeing it in the most dire of circumstances, which is a suppressed food supply. I think that situation is only going to get worse because of the rise in prices for fertilizers and diesel and everything else that’s going to make it harder for farmers in the U.S. to produce, then also globally.”

    Josh, a farmer in Texas who raises small livestock, also believes things will get worse before they get better. He did not want to share his last name.

    “I personally think that we haven’t even begun to feel the effects of inflation in our grocery store bills, because last year, the costs to produce were 1/3 to 1/2 the cost farmers and ranchers are having to pay this year. That cost has to be absorbed by the buyer to make it feasible for them to even continue,” he said in a message to The Epoch Times.

    “My family is preparing now and stocking up our freezers and pantry because we are really concerned how bad it can get this next year.”

    He estimates that fertilizer prices near him have increased 200 or even 300 percent, “dependent on what program you are running.”

    The rise in diesel prices has hurt him the most. “Farm equipment runs on diesel,” he pointed out.

    According to AAA’s gas price website, diesel in Texas is running at an average of $5.231, up from $2.820 a year ago.

    “I can’t imagine how anyone would profit or sustain raising crops or cattle with all these price increases that effect your overhead,” Josh said, saying he has heard about other ranchers and farmers culling their herds to avoid losses.

    “Food shortages are a great way to collapse the current system and install a Great Reset,” Morano, of Climate Depot, told The Epoch Times.

    Tyler Durden
    Mon, 05/09/2022 – 20:30

  • Goldman, Citi, & BofA Are All Quietly Backing Out Of The SPAC Business
    Goldman, Citi, & BofA Are All Quietly Backing Out Of The SPAC Business

    Better late than never…

    It looks like the SEC’s recent crackdown on SPAC rules is finally hitting its intended mark. And there’s no better sign that increased regulation has spoiled the party than Goldman Sachs backing out of most SPACs it has already taken public.

    The bank is apparently “spooked by new liability guidelines from regulators and throwing into doubt the fate of billions raised for those blank-check vehicles,” Bloomberg reported on Monday morning. Prior to pulling out, Goldman had been the second largest underwriter of SPACs last year. 

    Now, it “has been telling sponsors of the vehicles it will be ending its involvement”. Additionally, it is also halting all new SPAC issuances, the report says. It also says the bank may “elect to continue the advisory work with a small number of SPAC clients in rare cases”.

    Maeve DuVally, a spokeswoman for New York-based Goldman Sachs, commented: “We are reducing our involvement in the SPAC business in response to the changed regulatory environment.”

    Recall, we just wrote days ago that the SEC was seeking to enact new SPAC rules. 

    As we noted, the agency is threatening SPAC sponsors who “embellish projections about the companies they plan to take public”, according to another Bloomberg report late last month. The regulator’s targeted enforcement that would appear to hit at the heart of the SPAC business model: namely, coming up with bullshit overly-optimistic projections for pre-profit (and sometimes pre-revenue) companies, and hoping that analysts and the investing public buy into their validity because they’re formatted nicely on a PowerPoint slide. 

    Now the SEC is going to propose “curbing the legal protections that some blank-check companies have relied on to make bullish forward-looking statements about the firms they plan to merge with”, the report said. 

    The rules will also allow investors to sue over inaccurate forecasts and the notion of removing SPACs’ safe harbor from legal liability would raise listing via SPAC to the same legal standards as traditional IPOs, effectively taking out one of the major points of appeal to going public via SPAC. 

    Sidley Austin LLP recently told clients: “Investment banks involved with de-SPAC transactions do not typically conduct the same level of due diligence as they would for a traditional IPO.”

    Later in the day, Bloomberg reported that both BofA and Citi had also ‘scaled back’ their work with some SPACs.

    At Bank of America, the situation is reportedly fluid and policies could change – with the potential for further pullback – depending on the outcome of the regulatory proposals, according to people familiar with the matter.

    Citigroup paused initial public offerings of new U.S. SPACs last month, until it gets more clarity on the potential legal risks posed by the guidelines.

    Together, Bank of America, Citigroup and Goldman accounted for more than 27% of U.S. SPAC deals since the start of last year, overseeing about $47 billion of the transactions, according to data compiled by Bloomberg.

    This pullback by the three majors comes just as gay-dating app Grindr announced plans to go public through a merger with a SPAC, in a deal that it said would give the business an implied valuation of $2.1bn.

    Tyler Durden
    Mon, 05/09/2022 – 20:10

  • Biden Orders Officials To Stop Intel Leaks On Ukraine
    Biden Orders Officials To Stop Intel Leaks On Ukraine

    Authored by Dave DeCamp via AntiWar.com,

    According to a report from NBC News, President Biden spoke with top administration officials on Friday and said reports in the media about US intelligence sharing with Ukraine have been counterproductive.

    The report cited two anonymous administration officials who said Biden spoke with Secretary of Defense Lloyd Austin, CIA Director William Burns, and Director of National Intelligence Avril Haines. One source said Biden told them the reports “distract from our objective,” while the other source said he conveyed that the leaks must stop.

    Russia’s Moskva missile cruiser sinking in mid-April after apparent Ukrainian missile attack, via CNN.

    This week, US officials claimed to media outlets that US intelligence helped Ukraine kill Russian generals and aided Ukraine in the sinking of the Russian warship Moskva, the flagship of Russia’s Black Sea Fleet. While the claims aren’t confirmed and might not be true, the fact that US officials are making such statements to the media is a major provocation toward Moscow.

    Both the Pentagon and the White House wouldn’t outright deny the details of the reports but did downplay them by saying that the US isn’t sharing intelligence with Ukraine on specific targets.

    Asked about the Moskva, Pentagon spokesman John Kirby said the US was providing “relevant and timely” intelligence and that if “they do decide to do something with that intelligence, then they make the decisions about acting on it.” For their part, Russia denies that the Moskva was sunk by Ukraine and insists that a fire caused by an ammunition explosion took down the ship.

    The Biden administration has expanded intelligence sharing with Ukraine since Russia invaded, but US officials had previously been hesitant to disclose details over fears of provoking Moscow.

    In a newly published FT interview, CIA Director William Burns slammed the leaks as “irresponsible and risky”…

    https://platform.twitter.com/widgets.js

    On top of the increased intelligence sharing, the Biden administration continues to escalate military aid to Ukraine. Biden is seeking from Congress $33 billion in new assistance for Kyiv, which includes $20.4 billion in military aid.

    The US objectives in the war go beyond just helping Ukraine defend itself, and the administration is digging in for a long-term campaign. Austin recently said that one of the US goals is to see a “weakened” Russia.

    Tyler Durden
    Mon, 05/09/2022 – 19:50

  • For the 19th Consecutive Week, Marko Kolanovic Says To Buy The Dip
    For the 19th Consecutive Week, Marko Kolanovic Says To Buy The Dip

    What do you do when you have dug yourself so deep in a hole with your “BTFD” recos you have about as much chance of crawling out as Melvin Capital has of hittin gits high water mark? Why, you keep digging of course.

    We are talking about JPMorgan’s chief quant and permabullish market preacher, whose relentless recos to buy no matter what we discussed back in March in “After Urging To Buy The Dip Every Week In 2022, Kolanovic Tells Clients To Buy The Dip… And He Means It This Time“, and again last month in “Is It Time To Turn Bullish On Stocks?”, when we said that “before bulls give themselves the all clear, a big red flag is that just one week after JPM’s resident permabullish cheerleader, Marko Kolanovic said to buy everything… which should be the clearest signal that one should take chips off the table and go short.”  (As a reference, the S&P was trading at 4,450 that day)

    In retrospect, our perpetually cynical view was once again correct, because since then the S&P has plunged more than 10%, and closed below 4,000 today even as Marko kept repeating to just buy the dip, buy the dip….

    Alas, being wrong every week since the start of the year has not been sufficient to get Marko to change his tune, and today the JPMorgan quant, who once upon a time (long ago) was known as Gandalf for magically moving markets with a mere whisper but has since become a bigger fade than Gartman, once again dug in his heels and for the 19th week of 2022 (here we exclude just the week of April 11 when Marko said to take “some” profits, although it wasn’t exactly clear which of his calls in 2022 has been profitable since stocks have never risen above the early Jan highs), urged JPM clients (at least those who still listen to him) to bet what little money they have left that this time stocks will finally bounce.

    “The past week’s selloff appears overdone, and driven to a large extent by technical flows, fear, and poor market liquidity, rather than fundamental developments,” Kolanovic wrote in his weekly Global Asset Allocation note. “While we expect growth to soften, we continue to push back on a base case assumption that the global economy is headed for recession, an outcome that is increasingly being priced by markets.”

    “We see supports for our pro-risk stance from COVID reopening, policy easing in China, strong labor markets, light positioning, distraught investor sentiment, and healthy consumer and corporate balance sheets” he added. Too bad nobody believes him any more. In fact, it’s so bad that even Bloomberg’s traditionally fawning writers took a swipe at the media-friendly strategist:

    Marko Kolanovic’s repeated dip-buying calls are failing to play out so far this year, but he’s sticking to his bullish stance on risk and urging investors to increase holdings in beaten-up corporate bonds.

    Kolanovic, voted the No. 1 equity-linked strategist in last year’s Institutional Investor survey, has been a steadfast bull in risky assets despite this year’s turmoil. Over the last two weeks, when the equity rout worsened, he forecast the stock market was poised for a rebound, partly because pessimism had gone too far. That prediction has yet to materialize, with the S&P 500 falling more than 3% Monday after five straight weeks of declines.

    And yes, we would share more from his latest note but we won’t since it all the same old stuff: too much bearishness, everything is great, no recession, tightening fears overblown, etc, etc.

    Of course at one point Marko will be right – that point will be when even the Fed realizes it has pushed stocks too low, too fast, and panics, sparking a historic short squeeze rally. Until then, however, those who follow the advice of Marko, or is that mARKKo, better have the same infinite balance sheet as his employer or else they’ll end up with that Cathie Wood.

    Finally, for those curious for a quick walk down memory lane, here is an annotated history of the 2022 bear market overlaid with Marko’s weekly recommendations to buy each and every dip.

    Tyler Durden
    Mon, 05/09/2022 – 19:30

  • Japan Reports More Suspected Cases Of Unexplained Acute Hepatitis In Children
    Japan Reports More Suspected Cases Of Unexplained Acute Hepatitis In Children

    Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

    At least seven possible cases of acute hepatitis—inflammation of the liver—in children have been identified in Japan, the Health Ministry said Friday, but the cause of the cases is yet unknown.

    A file image of a woman with a pushchair walking with children at a park in Tokyo. (Yoshikazu Tsuno/AFP via Getty Images)

    The first case was reported on April 25, followed by the second on April 28. Four more possible cases were reported on May 6, the ministry said in a statement (pdf). The patients are all under the age of 16.

    One of them tested positive for COVID-19, and another Adenovirus Type 1, the ministry said according to The Japan Times, without mentioning whether these were two separate people or one person who caught both viruses.

    It stated that the seven recorded cases comprised children admitted to hospitals between October, 1. 2021 and May, 6. 2022, with some having already been discharged. None of the patients received a liver transplant.

    The World Health Organization (WHO) told news outlets on May 3 that there were at least 228 probable cases of hepatitis worldwide in at least 20 countries, including Denmark, the United States, the United Kingdom, Italy, and France.

    WHO stated on April 23 that the cases involved children aged one month to 16 years old, many of whom developed gastrointestinal symptoms, including abdominal pain, diarrhea, and vomiting preceding presentation with severe hepatitis and jaundice (yellowing skin and eyes).

    “The common viruses that cause acute viral hepatitis (hepatitis viruses A, B, C, D, and E) have not been detected in any of these cases. International travel or links to other countries based on the currently available information have not been identified as factors,” it said.

    In Indonesia, a mysterious form of hepatitis has been linked to the deaths of three children ages two, eight, and 11, The Jakarta Post reported on May 3. The Health Ministry said the children developed diarrhea and jaundice, adding that the case was still under investigation.

    The U.S. Centers for Disease Control and Prevention (CDC) said Friday that it was investigating more than 10 cases of a mysterious form of hepatitis in children, saying that five have died so far.

    Dr. Jay Butler, the CDC’s deputy director of infectious diseases, said during a briefing said the agency is investigating 109 cases of acute hepatitis in 24 U.S. states and Puerto Rico. The cause of the outbreak is not yet clear, he stressed, adding that about half of the children had adenovirus infections.

    The UK Health Security Agency reported that (pdf) the country’s case count had risen to 163, dating back to early January, adding that 11 children have received liver transplants so far. UK officials ruled out the COVID-19 vaccine as a potential cause.

    “There are fewer than five older case-patients recorded as having had a COVID-19 vaccination prior to hepatitis onset,” the report said, adding that most of the impacted children are too young to receive the shot. “There is no evidence of a link between COVID-19 vaccination and the acute hepatic syndrome.”

    Jack Phillips contributed to this report.

    Tyler Durden
    Mon, 05/09/2022 – 19:10

  • Pentagon To Give Ukraine High-Precision Laser-Guided Rockets
    Pentagon To Give Ukraine High-Precision Laser-Guided Rockets

    On Monday The Washington Post is reporting that for the first time the Pentagon will provide Ukrainian forces “high-precision laser-guided weapons” as part of the recently approved mammoth arms package amid Russia’s invasion.

    As expected, defense contractors will continue seeing a windfall of profits: “The Pentagon is expanding delivery of commercially available weapons and military equipment to Ukraine, detailing on Friday its $136 million in purchases of aerial drones, laser-guided rockets, binoculars and other items set for shipment soon.”

    File image: Defence & Security Monitor

    The WaPo details further that “The weapons and equipment, to be purchased from U.S. companies, represent a separate category of military assistance than the vast quantities of armaments that the United States already has provided Ukraine from existing Pentagon stocks.”

    Pentagon undersecretary for acquisition and sustainment Bill LaPlante has vowed to utilize “all available tools to support Ukraine’s armed forces in the face of Russian aggression.”

    This is but the latest in the ramped-up continuing saga of it’s not a proxy war simply because we insist it’s not a proxy war… Many Western military analysts have pointed to the game-changing nature of US weapons and intelligence-sharing on the Ukraine battlefield, saying it’s greatly slowed and even stalled the Russian advance, also in the east, where Russian forces have focused their current objective on taking the Donbas.

    According to further details of a system called the “advanced precision kill weapon system”:

    This round includes $22.6 million worth of 70mm rockets — known as the advanced precision kill weapon system — that can be fired from helicopters

    …the advanced precision kill system, for instance, works by converting low-cost ammunition into guided weapons. U.S. forces have used it to supplement the firepower inherent to a variety of aircraft, including helicopters and fighter jets.

    Below: what was reported as of last week, part of the massive US weapons pipeline to Kiev. Infograph: Breaking Defense

    Last month Defense Secretary Lloyd Austin bluntly admitted of US policy aims in Ukraine: “we want to see Russia weakened to the degree it cannot do the kinds of things that it has done in invading Ukraine.” He also sought to stress before the American public during an interview that the US is not fighting a “proxy war”. However, there’s clearly a contradiction in these two statements, especially given Biden administration actions in the form of unprecedented military assistance

    Tyler Durden
    Mon, 05/09/2022 – 18:50

  • Biden's 'Ministry Of Truth' Tsar: Parents Concerned About Critical Race Theory Are "Disinformers"
    Biden’s ‘Ministry Of Truth’ Tsar: Parents Concerned About Critical Race Theory Are “Disinformers”

    Authored by Bill Pan via The Epoch Times (emphasis ours),

    The Biden administration’s new disinformation chief says that parents who are upset about critical race theory (CRT) making its way into public school classrooms are “disinformers” who “weaponize” the issue “for profit.”

    [ZH: let’s not forget the US Attorney General’s son makes millions selling CRT materials]

    Nina Jankowicz, who was appointed to lead the newly established Disinformation Governance Board at the Department of Homeland Security, dismissed the pushback against CRT indoctrination at an event in Ohio last October, when the debate over parents’ right to direct their children’s education had taken center stage in high-profile elections, including Virginia’s gubernatorial race.

    “Critical race theory has become one of those hot-button issues that the Republicans and other disinformers, who are engaged in disinformation for profit, frankly, … have seized on,” she said in a video that has recently regained attention.

    Jankowicz added that she lived in Virginia, where parents in Loudoun County fiercely resisted attempts to inject leftist political activism into local school curricula and policies. She called Loudoun “one of the areas where people have really homed in on this topic.”

    “But it’s no different than any of the other hot-button issues that have allowed disinformation to flourish,” she said. “It’s weaponizing people’s emotion.”

    Jankowicz then told her audience to be alert when they read news articles that make them feel emotional, adding that she supports government-funded, left-leaning institutions such as NPR and PBS, because these media outlets “get into the nuance of the issues” and “provide a balanced, nonpartisan source of information.”

    Jankowicz’s speech at the City Club of Cleveland took place on Oct. 29, 2021, weeks after U.S. Attorney General Merrick Garland released a memo bringing together a coalition of federal and local law enforcement to address alleged “threats of violence” against teachers and school board members from unruly parents.

    Garland has conceded that his memo was based in part on a September 2021 letter to President Joe Biden by the National School Boards Association. The now-notorious letter characterized disruptions at school board meetings as “a form of domestic terrorism and hate crime,” and urged the Departments of Justice and Homeland Security and the FBI to invoke counterterrorism laws to quell “angry mobs” of parents, who sought to hold school officials accountable for promoting CRT and for imposing COVID-19 restrictions such as mask mandates on their children.

    Jankowicz’s comments resurfaced as her new post, tasked with addressing “disinformation that imperils the safety and security of our homeland,” has generated much scrutiny. Many have since compared the disinformation board to George Orwell’s fictional “Ministry of Truth,” the main purpose of which was to rewrite history to manipulate and control the population.

    “The Biden administration wants a government agency dedicated to cracking down on what its subjects can say, an idea popular with Orwellian governments everywhere,” Sen. Tom Cotton (R-Ark.) said in a May 3 statement. “This board is unconstitutional and un-American.”

    Cotton has introduced a proposal that would bar any federal funds from going to the board. He was joined by 18 Republican senators as co-sponsors.

    Tyler Durden
    Mon, 05/09/2022 – 18:30

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May 09

Today’s News 9th May 2022

  • Sweden Pandemic Deaths Among Lowest In Europe — All While Avoiding Strict Lockdowns
    Sweden Pandemic Deaths Among Lowest In Europe — All While Avoiding Strict Lockdowns

    Sweden logged one of the lowest Covid-19 death rates in Europe, all while avoiding strict economy-killing lockdowns that led to economic chaos across the world, the Telegraph reports, citing new figures from the World Health Organization.

    Sweden, which was criticised in the early stages of the pandemic for resisting a mandatory lockdown, had fewer deaths per capita than much of Europe.

    In 2020 and 2021, the country had an average excess death rate of 56 per 100,000 – compared to 109 in the UK, 111 in Spain, 116 in Germany and 133 in Italy. -Telegraph

    As the Telegraph delicately notes – “Experts said the difference demonstrated stringent lockdowns alone did not determine success when battling Covid-19.”

    So what’s Sweden’s secret?

    The Telegraph suggests that things such as lower obesity and better general health played a factor – which is certainly true.

    “The lesson from Sweden is to invest in your population’s health and have less inequality,” said Prof Devi Sridhar, the chairman of global public health at the University of Edinburgh.

    Meanwhile in the strictly locked-down UK, “there have been too many preventable deaths,” according to Dr Michael Head, a senior research fellow in global health at the University of Southampton. “By the end of the pandemic, it’s likely that the UK will probably end up mid-table on various metrics that measure pandemic performance, such as excess mortality,” he added.

    In fact, some 68% of deaths during the pandemic came from just 10 countries, including the United States, Russia and India.

    But Colin Angus, a modeller at the University of Sheffield who was not involved in the study, said the WHO’s methodology “looks entirely sensible”, adding that excess death estimates are critical to hold governments to account.

    The figures were compiled by a panel made up of international experts who have been working on the data for months, using a combination of national and local information, as well as statistical models, to estimate totals where the data are incomplete. -Telegraph

    Of course, we’ve known for a while that enough evidence exists to question the effectiveness of lockdowns.

    Peer-Reviewed Study “Did Not Find Evidence” Lockdowns Were Effective In Stopping COVID Spread

    Statistician: Lockdowns Don’t Work Because They Force People To Congregate In Fewer Places

    Another Study Shows—Yet Again—That Lockdowns Don’t Work

    Anti-Lockdown States Performed Better Than New York & California, Think Tank Finds

    It Was The Lockdowns, Not The Pandemic That Created The Havoc

    Now imagine policymakers ever admitting they were wrong as we suffer through an inflationary hangover.

    Tyler Durden
    Mon, 05/09/2022 – 02:45

  • Vilches: Europe's Mad Ban On Russian Oil
    Vilches: Europe’s Mad Ban On Russian Oil

    Authored by Jorge Vilches,

    Cognitive scientists would concur in that the current performance of European leadership could be diagnosed as either myopic ignorance or – most probably – full intellectual blindness.

    Ursula von der Leyen

    In the case of so far happy-go-lucky Ursula von der Leyen there is no doubt it´d be the latter… but only if we first dismiss her warm on-the-record support for Bundeswehr colonial policies and military involvement… plus her praise of Third Reich famous general Field Marshall Erwin Rommel, Commander of the Führer Headquarters. But leaving that possible Nazi whiff aside, full ´intellectual blockage´ is the only kind way to dare explain a most strategic project as foolish and doomed to fail as banning Russian oil sales worldwide. Why so you may ask ?

    Ref #1 https://www.wsws.org/en/articles/2017/06/20/vond-j20.html

    asymmetrical retaliation

    The short answer is massive — ´Russian´ massive – unmitigated “asymmetrical non-military retaliation” through surgical and divisive optional sales of natural gas – and other key commodities – just leaving EU sanctioned Russian oil for sale to and re-sale by third parties. And, oh yes, weaponization is not limited to any particular means as various European war schools should have internalized already. War means war and pretty much anything is fair game. But apparently, it´d be as if through the centuries, uppity European leaders – most especially German, French, Swedish, British and Poles — have not learned a single thing despite the über-high costs already paid for by their nations large-caliber warfare experiences most especially with Russia. By the way, the UK also has the additional ( unsolvable? ) burden of its current Brexit ballast…

    Ref # 2 https://www.zerohedge.com/energy/eu-proposes-ban-russian-oil-imports

    Ursula´s softball

    May I call you Ursula ? Thank you. “We will make sure that we phase out Russian oil in an orderly fashion [… a phenomenal bad joke of sorts… ] in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets” you said. Question: will the Russians just idly watch you trying to execute such enormity at the EU´s preferred speed and political and geopolitical sequencing? And the Russians would never dare to strike back with natural gas or other restrictions no? For starters, what about nickel, uranium, and lithium? Not having them would be like trying to prepare tasty food without salt, pepper or mustard. Without uranium no nuclear power is possible, did you know? [ more on that later ]. Ursula, your pink unicorn wishful thinking is unfathomable gal.

    EU kelpers

    This mad-ban requires EU approval with conditional support from Hungary, Greece, and others. So some special EU members will be exempted while regular EU ´kelpers´ will not. Now could that lead to serious friction ? How many years will it take all of Europe to reconvert its industry and supply chains? “This is why we will phase out Russian supply of crude oil within 6 months and refined products by the end of the year.” Okay, so Aunty Ursie you believe the Russians are dumb enough to let you phase this idea out nice and easy at your own pace and whenever you decide to act per your own special EU schedule. No market dynamics involved as Europe plays everybody else´s pieces too as grandpas would do with 3-year-old grandkids.

    Ref # 3 https://www.rt.com/business/555065-russia-oil-ban-exemption-eu/

    Russian DNA

    No way Ursula, the Russians play world-class professional chess while you play elementary school checkers, not even being good at that either. The instant Russia perceives the initial execution of your game plan regarding banning of Russian oil, they´ll make their moves, not yours. And those Russian moves will not be nice and pretty. For one, Europe will not have anywhere nearly ready its own diesel refining capacity by the end of 2022 while the middle distillate market is ever much tighter everywhere as demand recovers from the Covid pandemic. So the EU “plan” is

    to frantically search for hard-to-find or simply non-existent substitutes while investing tons of time, money, effort and risk. Well, the Russians know that already even before you start. Diesel is already in critically short supply in the EU.

    Furthermore, Europe will continue buying Russian oil and distillates via third countries once it introduces any embargo only that at much higher prices than today. Such old, quick and dirty business is known as “triangulation” Ursula.

    Russian hardball

    The existential threat imposed on Russia by the EU with its macabre “Ukraine Plan” and sanctions has not left Russia any way out other than playing hardball for keeps. Furthermore, the Russian non-military retaliation domain is actually unlimited due to the full-scale and open-ended addiction that Europe has developed for Russian imports of different sorts including commodities of any and every imaginable type. Without such, Europe will cease to exist as we know it in a matter of a very few months, if not weeks. As Francis Fukuyama should posit, Europe´s dependency on Russian commodities is the end of its own history. The unipolar world is dying, admit it Frank. Hint: write a new book guy.

    Ref # 4 https://www.zerohedge.com/energy/trump-was-right-putins-gas-strategy-gives-germany-only-bad-worse-choices

    Ref # 5 https://www.rt.com/business/554968-moscow-toughens-response-western-sanction

    not your dog

    It seems that Ursula von der Leyden has convinced the EU that feeding a refinery or a chemical plant is pretty much like feeding your dog. But nothing can be further from the truth. Chemical plants and refineries are very closely matched and subtly calibrated to very specific supply feeds very difficult to substitute. Changes can and have been made, but it requires lots of time, effort, money, dedicated facilities, experimentation, specific expertise, risk, and most important fixed, unchanging feeds always complying with specs. This means that Russia today supplies Europe with exclusive unreplaceable oil & gas grades of very specific chemical content (even coal grades) that would be impossible to get from third parties fast enough and cheap enough. So it´s a very delicate and tight matching already achieved between European facilities and Russian fuels and other inputs that cannot be altered or replaced that easily, let alone all at the same time !! Are EU countries aware of all this ?

    Ref #6 https://www.ifo.de/en/node/69417

    expensive divorce

    So maybe after investing years, money, expertise, trials & errors, risk and lots of hard work Europe may possibly and eventually be able to partially switch from current to dirtier or far more inefficient options. But that would be (a) against the EU´s Green Deal compliance and (b) a very short-term non-sustainable “solution” (c) against the whole world.

    So how can Europe transition to a 0% Russian supplies end-point as swiftly and safely as Chinese plate spinners? 

    Ref # 7 https://www.rt.com/business/555087-energy-warning-russia-sanctions/

    No minimally informed no-nonsense mindset has thought out the foolish idea of coordinating the whole European continent in this self-destructive mission. Taking matters to an extreme, let´s assume that Europe completely weans itself – or is cut off — from Russian oil & gas imports tomorrow morning and everything else sourced in Russia. In that hypothetical case, Moscow may feel the financial problem possibly within 6 months… or maybe never. But if such event were to happen, the timing would be quite different as the EU would necessarily start imploding in 6 days and would achieve full implosion in 6 weeks. With the oil mad-ban Europe would badly need to find substitutes for Russian imports. The problem is such need cannot ever be satisfied fast enough and right enough no matter how it is diced or sliced. Triangulation means Europe will buy quality Russian imports via third countries only that at much higher prices

    plug & play (not)

    No, it is not anywhere near “plug & play” either. No. Several EU landlocked countries can only import nat-gas thru existing Russian pipeline unless a nightmarish and highly risky sea-land supply lines are established by different means going across complicated mountain ranges sometimes, a project which no one wants to entertain. Replacing Russian feeds & supply lines is an incommensurable task that Russia will not help out with either. Once Russia withstands the “ban Russian oil” idea, Europe will find itself in the worse of both worlds not being able to rewind back.

    tit-for-tat ?

    Also, the impact of the Russian reaction may most probably result to be disproportionate to the damage inflicted by an EU worldwide ban on Russian oil. Hence, ´asymmetrical´, simply because an exact ´tit-for-tat´ result is impossible to calculate for and let alone effectively achieve. If ever implemented, the unintended consequences of a haphazard decision such as proposed will necessarily mean for the EU either to (1) instantly back-pedal to square one or (2) finally suicidal Europe would follow through and achieve its goal. I kid you not. Other commodities could be included.

    human food

    And food for thought, as Europe would face famine in-its-face if grains from Ukraine, Belarus, Russia and elsewhere are tied up or absent by Russian retaliation or impossibility to deliver. And the lack of cheap diesel and natural gas from Russia means that farmers everywhere face sharply increased costs, whereby fertilizer is either not available at all, or too expensive to use, and thus crop yields will fall worldwide increasing the price of food products. Greenhouse producers in many parts of Europe have already shut down over high energy costs as prices stand today, not even thinking of the possibility of having Russian oil banned worldwide. Banning Russian oil from Europe can only back-fire.

    Ref # 8 https://www.zerohedge.com/commodities/worlds-largest-fertilizer-company-warns-crop-nutrient-disruptions-through-2023

    Russian leverage

    It´s impossible to approach all aspects involved at once, so let´s briefly touch upon part of Russia´s bargaining power.

    1. Russia does not want, let alone need, to defeat all of Europe. Just turning Germany — or Poland for that matter — into a messy mess would be more than enough for the whole EU to focus and reason out basic stuff.

    2. No uranium from Russia means the 3 remaining German nuclear power stations cannot be re-commissioned. Not having already scheduled substitute delivery of finely-tuned Russian uranium means an adaptive retro-fit with newly-sourced feed, which technically is risky and mission almost impossible which would take years.

    3. China + India + Brazil have ´free-patent-IP´ investments plans in Russia kicking off an entirely new ball game

    4. 60% of German gas consumption is Russian. Today German industry would not survive without Russian gas.

    5. A partial or total reduction of Russian nat-gas and coal supply in retaliation for banning Russian oil would negatively and instantly impact Europe in many ways and the rest of the world with irregular market dynamics.

    6. If not delivered to the EU, the Russian nat-gas can be vented or flared at well-heads as there is plenty more.

    7. Russian oil can be sold elsewhere and/or stockpiled relatively rapidly and easily, or production can be slowed down without damaging reservoirs or wells. Russia will actually increase its “drill baby drill” policy.

    8. Paraphrasing former US Secretary of Treasury John Connally “Sorry, Russian commodities, your problem”

    9. Russia´s market is 85% of the world population largely under growth and just as fed up with the US-dollar reserve currency system. The EU trade embargo on Russia does not work per parallel imports from 3rd parties

    10. The defiant Russian economy is doing just fine, the Ruble is as strong as ever. US President Biden vowed “to make sure the pain of our sanctions hits the Russian economy, not ours” as if he were getting the picture…

    11. China and others definitely back Russia while the rest of the world de-dollarizes and does not sanction Russia

    12. There are $ 500 billion worth of physical Western assets in Russia that can be confiscated at any time.

    Ref # 9 https://www.rt.com/business/555076-moscow-allows-foreign-goods/

    Ref # 10 https://www.rt.com/business/553038-russia-lifts-ban-parallel-imports/

    Ref # 11 https://www.newyorker.com/news/daily-comment/russia-and-china-unveil-a-pact-against-america-and-the-west

    Ref # 12 https://www.lexology.com/library/detail.aspx?g=39ef25c3-1bf0-4029-bac2-de0ac11965da

    Ref # 13 https://www.rt.com/business/555097-russia-sanctions-recession-economist/

    Ref # 14 https://www.rt.com/business/555119-russia-india-oil-sales-increase/

    eyes wide shut

    Agreed, it´s a multi-variable environment in a context of constant change with plenty of moving parts interacting on each other. But, for starters, no ( or less) Russian nat-gas and no Russian oil means many unsolvable things for the EU today. We´d also need to add the impact of having no oil, coal, or gas substitutes fast enough in large enough quantities. All of that put together means no (or less) refined products, no intermediate distillates, no heavy-duty machinery (think mining) no nickel nor aluminum, cobalt or lead or magnesium, no neon, no grains or edibles at large, wheat, corn, barley, rye, soybeans, timber, paper, titanium, rocket engines, nitrogen fertilizer, crop nutrients, potash, less petrochemicals, iron ore, minerals and rare-earths, uranium for nuclear power plants, lithium for batteries, no inputs for production of metals, plastics, fabrics, pharmaceuticals, fertilizer, chemicals, etc., no manganese, chromium, platinum, essential palladium for catalytic converters, copper, tin, mica, wolfram, bismuth, kaolin, talcum, tungsten, diamonds, phosphates, sulphur… and even no gold. By the way, as we should all know, none of these can be printed.

    Russian vacations

    By the way, fewer distillates such as diesel and fuel oil means that private and public transportation and freight would slow down lots, also affecting heavy-duty vehicles, industrial machinery, and airplane travel. Also far lower tourism. So might as well shut down the EU and go away on vacation to beautiful Russia right? You won´t find that much food or heating or A/C either, just new massive unheard of migrations all around you. With less Russian imports, very huge German industrial giants run the certainly serious risk of shutting down otherwise continuous year-round processes which cannot be re-started and would mean irreparable harm & negative impact on the German economy and the rest of the world. And it’s not only Russian produce that would be missing. Also from Belarus and Ukraine itself + the Stans

    mission impossible

    Only mediocre light-brained European leadership can propose such suicidal move 100% guaranteed to blowback in-their-face much harder and faster than their original strike. It´d be like poking a bear ( sound familiar ? ) with a sharply pointed pole and pretending the beast to continue munching fish unbothered by the aggression itself and the presence of the aggressor, both. Not even young unexperienced teen-aged urban Canadians would think of doing such a thing. Of course, they would know that the bear will necessarily focus attention first ( already done that… ) then would rise on his hind legs and swing his sharp deadly paw wide and fast sooner than the EU can react to what just happened.

    It isn´t European David vs. Russian Goliath either. It´s a well-fed and rested Russian Goliath with hypersonic weapons under his arm vs. a worn-out underweight European David with a worn-down sling and lots of very small stones…

    to “Schwedt” or not to “Schwedt”

    Schwedt is a key refinery for which the German government better find fast good & reliable sources of substitute Russian oil. If Schwedt does not deliver as usual, problems will be felt throughout Germany, Poland, and elsewhere.

    But one problem is that Schwedt is majority-owned by Rosneft, the Russian state oil company which has control.

    Now supposedly Schwedt has already dramatically reduced its dependence on Russian oil. But there´s a rub.

    data laundromat

    The rub is that EU member countries are very good at data laundering practices since inception of EU membership acceptance proceedings. Don´t trust me, ask Goldman Sachs they should know. So, for example, if imported Russian oil stays stationary in an EU depot for a couple of months it is “nationalized” and it is no longer considered to be ´Russian´.  Also, the official oil inflow figures cheat, as for partial mixtures of Russian oil 45%+ 55% ´oil from somewhere else´ it is considered to be non-Russian, see? So Russian oil import substitution is a topic not yet anywhere close to being solved. And if Russian oil is banned right here, well Russians might deny delivery of either Russian oil or Russian gas – or whatever — over there. They defend their interests, not the EU´s.

    Ref # 15 https://www.rt.com/business/555059-europe-needs-russian-gas/ 

    Ref # 16 https://www.rt.com/business/555022-germany-petrol-shortages-russia-oil/

    two to tango

    Which brings us to the fact that the EU cannot dream of moving its pieces in a vacuum as if the Russian enemy were not there also playing in the same theater scenarios and moving its pieces alternatively. The instant the EU makes any headway whatsoever regarding the possible banning of Russian oil, then Russia will respond in kind or possibly before so as to carry out a pre-emptive deterrence sort of like a taste of things to come such as in Poland and Bulgaria

    “We have every right to take a matching decision and impose an embargo on gas pumping through the [existing] Nord Stream 1 gas pipeline. So firstly, Russia may reduce or cut off its gas exports if the West goes ahead with a ban on Russian oil”. Understand? The EU attacks Russian oil and Russia counter-attacks reducing or cutting off Russian natural gas, etc. In other words, asymmetric non-military retaliation.

    Ref # 17 https://www.bbc.com/news/58888451

    Prices

    If the Russian oil ban attempt goes ahead, agreed that the first thing that Russia may do is reduce or cut off nat-gas supplies – or other key commodities — with the stroke of a keyboard.. And it would be impossible to find replacements for Russian oils fast enough also. It would take years of adaptation and readjustments and it will still be much more expensive for European consumers. Russian Deputy Prime Minister Alexander Novak left on record that a “rejection of Russian oil would lead to catastrophic consequences for the global market causing oil prices to more than double to $300 a barrel”…possibly up to $ 500 pundits say assertively in specialized blogs. Be it $300 or $500 does the EU actually want that ? And Russia would end up earning much more by exporting far less. Trust US Treasury Secretary Janet Yellen, she said it, not me. And the higher the price, the higher the inflationary pressure and the higher the prices at the supermarkets already at approx. 35% p.a.. I can´t believe having to explain all this, really…

    Ref # 18 https://www.bbc.com/news/business-60656673

    Despite sanctions, Russia has almost doubled its monthly earnings from selling fossil fuels to the EU, according to the Centre for Research on Energy and Clean Air. The EU has imported about $23 billion dollars of fossil fuels per month from Russia since March 2022 as oil and gas prices have soared, compared with an average of about $ 12 billion in 2021. Meanwhile, transfers of oil between tankers have surged as buyers take advantage of discounted Russian crude. Different crude blends shipped from Russia may also contain oil from elsewhere which would also be affected.

    logistics & freight

    Banning Russian oil also means a logistics major reversal from-East-to-West to from-South-to-North. Such cardinal change is costly and risky. New shipping freighters are unprepared for unknown delivery schedules and product specs. Ports and oceans are different, shipping lanes are different, climate is different, seasonal availability of product and ship size and type are also different. That also involves lots of negotiating time, coordination, money, expertise, risk, permanent costs, and new dependencies with yet unknown trade and business partners, new modus operandi, brokers, insurance companies, etc. That is why every EU government has failed to build a realistic energy strategy that does not depend on Russia. Continuity, LNG & LPG terminal bottlenecks, and processing, availability, cost, no weather restrictions when needed. Pipe delivery is safe, dependable, and cheap, sea freight is risky and cost-prohibitive

    nuclear blues

    Germany had 15 nuclear plants in operation. The last 3 operating nuclear plants in Germany were scheduled to be decommissioned permanently in 2022. Part of the “Green Agenda” in the EU is to eliminate nuclear plants. France does not approve this, but is having technical trouble with its nuclear plants. France has said it will shut down 50% of its nuclear plants for critical maintenance this year at the worst possible timing imaginable.

    Ref # 19 https://www.bbc.com/news/business-61298791

    military impact

    No readily available fuels of the right type (careful) mean no deployment no planes or other aircraft which means pretty much being stuck. Bad logistics, less food, no (or less) supplies, no heating to speak of. The European conventional military dependence on Russian fuels is beyond overwhelming, close to checkmate. Fuel imports are not anywhere near a military solution, just a way for civilians to survive if and when available and at a terribly high price.

    “So the EU better be prepared to continue paying (many) billions of euros each week to Russia, supporting the Ruble and subsidizing its military in the process. It’s not just a short-term problem, either. If Germany manages over time (many years ?) to find adequate replacements for Russian natural gas, oil and coal, it will be at (tremendously) much higher prices. The era of cheap-Russian natural gas fueling the German economy is over. German energy-intensive companies, like its chemical giants, could not compete in the global market. Germany will face painful choices about the future of its industrial economy”. So without very specific and unreplaceable exclusive Russian grades of natural gas and oil and coal the European military are pretty much game-over.

    Ref # 20 https://www.zerohedge.com/energy/trump-was-right-putins-gas-strategy-gives-germany-only-bad-worse-choices

    unmanageable world finances

    The camel is 990% overloaded and this one foolish decision may break its back. The world already rides on a wild $ 600+ trillion of a derivatives tiger that can only survive provided the corresponding counterparties do not fail.

    “ Clearly, central banks in conjunction with their governments will have no option but to rescue their entire financial systems, which involves yet more central bank credit being provided on even greater scales than seen over Covid, supply chain chaos, and the provision of credit to pay for higher food and energy prices. It must be unlimited.”

    Ref # 21 https://www.goldmoney.com/research/goldmoney-insights/financial-war-takes-a-nasty-turn?gmrefcode=gata

    So unless something dramatically favorable happens very soon, economic-financial considerations will have highly negative socio-political impact driving the crisis to a high-pitch climax with the pitchforks roaming about European streets. Per Rabobank: “ When the ´food system´ breaks down, everything will break down with it”.

    Per The Guardian, “…Come October, it’s going to get horrific, truly horrific … a scale beyond what we can deal with”.

    Europe´s mad ban on Russian oil is just another perfect example of sheer Anglo-Saxon European puppeteering.

    Ref # 22 https://www.theguardian.com/business/2022/apr/19/energy-chiefs-fear-40-of-britons-could-fall-into-fuel-poverty-in-truly-horrific-winter

    Ref # 23 https://www.zerohedge.com/markets/rabobank-when-food-system-breaks-down-everything-will-break-down-it

    Tyler Durden
    Mon, 05/09/2022 – 02:00

  • The Psychology Of Manipulation: 6 Lessons From The Master Of Propaganda
    The Psychology Of Manipulation: 6 Lessons From The Master Of Propaganda

    Authored by Ryan Matters via Off-Guardian.org,

    Edward L. Bernays was an American business consultant who is widely recognized as the father of public relations. Bernays was one of the men responsible for “selling” World War 1 to the American public by branding it as a war that was necessary to “make the world safe for democracy”.

    During the 1920s, Bernays consulted for a number of major corporations, helping to boost their business through expertly crafted marketing campaigns aimed at influencing public opinion.

    In 1928, Edward Bernays published his famous book, Propaganda, in which he outlined the theories behind his successful “public relations” endeavours. The book provides insights into the phenomenon of crowd psychology and outlines effective methods for manipulating people’s habits and opinions.

    For a book that’s almost 100 years old, Propaganda could not be more relevant today. In fact, its relevance is a testament to the unchanging nature of human psychology.

    One of the key takeaways of the book is that mind control is an important aspect of any democratic society. Indeed, Bernays maintains that without the “conscious and intelligent manipulation of the organized habits and opinions of the masses”, democracy simply would not “work”.

    We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.

    According to Bernays, those doing the “governing” constitute an invisible ruling class that “understand the mental processes and social patterns of the masses”.

    In Propaganda, Bernays draws on the work of Gustave Le Bon, Wilfred Trotter, Walter Lippmann, and Sigmund Freud (his uncle!), outlining the power of mass psychology and how it may be used to manipulate the “group mind”.

    If we understand the mechanism and motives of the group mind, is it not possible to control and regiment the masses according to our will without their knowing about it?

    I recently explored this topic in an essay about how occult rituals and predictive programming are used to manipulate the collective consciousness, influencing the thoughts, beliefs and actions of large groups of people, resulting in the creation of what occultists call “egregores”.

    Here I have extracted some key insights from Bernays in an attempt to show how his book Propaganda is, in many ways, the playbook used by the globalist cryptocracy to process the group mind of the masses.

    1. IF YOU MANIPULATE THE LEADER OF A GROUP, THE PEOPLE WILL FOLLOW

    Bernays tells us that one of the easiest ways to influence the thoughts and actions of large numbers of people is to first influence their leader.

    If you can influence the leaders, either with or without their conscious cooperation, you automatically influence the group which they sway.

    In fact, one of the most firmly established principles of mass psychology is that the “group mind” does not “think”, rather, it acts according to impulses, habits and emotions. And when deciding on a certain course of action, its first impulse is to follow the example of a trusted leader.

    Humans are, by nature a group species. Even when we are alone, we have a deep sense of group belonging. Whether they consciously know it or not, much of what people do is an effort to conform to the ideals of their chosen group so as to feel a sense of acceptance and belonging.

    This exact method of influencing the leader and watching the people follow has been used extensively throughout the last few years. One notable instance that comes to mind is the horrendously inaccurate epidemiological models created by Neil Ferguson, which formed the basis for Prime Minister Boris Johnson’s lockdown policies.

    Once Johnson was convinced of the need to lockdown and mask up, the people gladly followed.

    2. WORDS ARE POWERFUL: THE KEY TO INFLUENCING A GROUP IS THE CLEVER USE OF LANGUAGE

    Certain words and phrases are associated with certain emotions, symbols and reactions. Bernays tell us that through the clever and careful use of language, one can manipulate the emotions of a group and thereby influence their perceptions and actions.

    By playing upon an old cliché, or manipulating a new one, the propagandist can sometimes swing a whole mass of group emotions.

    The clever use of language has been employed throughout the Covid-19 pandemic to great effect. An obvious example of this was when the definition of “vaccine” was changed to include injections utilising experimental mRNA technology.

    You see, the word “vaccine” is associated in the public mind with a certain picture – that of a safe, proven medical intervention that is not only life-saving but absolutely necessary.

    If governments had told people to go get their “gene therapies”, the vast majority of the public would likely question the motives behind such a campaign; they would feel extremely sceptical because the phrase “gene therapy” is not associated with the same images, emotions and feelings as “vaccine”.

    The same goes for the word “pandemic”, the definition of which was also changed. The word “pandemic” is generally associated in the collective consciousness with fear, death, chaos and emergency (largely thanks to Hollywood and the myriad virus films it has released over the years).

    3. ANY MEDIUM OF COMMUNICATION IS ALSO A MEDIUM FOR PROPAGANDA

    Any system of communication, whether phone, radio, print, or social media, is nothing more than a means of transmitting information. Bernays reminds us that any such means of communication is also a channel for propaganda.

    There is no means of human communication which may not also be a means of deliberate propaganda.

    Bernays goes on to stress that a good propagandist must always keep abreast of new forms of communication, so that they may co-opt them as means of deliberate propaganda.

    Indeed, systems that most people would associate with freedom of speech and democracy are none other than means of circulating propaganda. Facebook fact-checkers, Big Tech censorship and YouTube’s Covid banners certainly fall into this category.

    Other examples of this include the recent algorithm updates made by various search engines (including Google and DuckDuckGo) to penalize Russian websites. Although this should come as no surprise (Google has been engaging in this type of “shadow propaganda” for many years).

    4. REITERATING THE SAME IDEA OVER AND OVER CREATES HABITS AND CONVICTIONS

    Although Bernays terms this a technique used by the “old propagandists”, he, nonetheless, recognizes its usefulness.

    It was one of the doctrines of the reaction psychology that a certain stimulus often repeated would create a habit, or that the mere reiteration of an idea would create a conviction.

    Repeating the same idea or the same “mantra” again and again is a form of neuro-linguistic programming aimed at instilling certain concepts or emotions into the subconscious mind. Indeed, people who are feeling sad or depressed are often advised to repeat to themselves an uplifting saying or affirmation.

    There are many examples of this simple, yet effective, technique being used to great effect over the last few years. Think Q’s “trust the plan”, the globalist favourite, “build back better” or the incessant repetition of that twisted phrase, “trust the science”. Included in this category are the 24/7-in-your-face death statistics and case numbers, aimed at promoting the illusion of a pandemic.

    There are more obvious examples of this as well, such as news anchors in different areas all reading from the exact same script.

    5. THINGS ARE NOT DESIRED FOR THEIR INTRINSIC WORTH, BUT RATHER FOR THE SYMBOLS THAT THEY REPRESENT

    After studying why people make certain purchasing decisions, Bernays observed that people often don’t desire something for its usefulness or value, but rather because it represents something else which they unconsciously crave.

    A thing may be desired not for its intrinsic worth or usefulness, but because he has unconsciously come to see in it a symbol of something else, the desire for which he is ashamed to admit to himself.

    Bernays gives the example of a man buying a car. From the outside, it may appear as if the man is buying the car because he needs a means of transport, but in actuality, he is buying it because he craves the elevated social status that comes with owning a motor vehicle.

    This idea, too, applies to the events over the last few years.

    For example, masks are a symbol of compliance. Everyone knows they don’t work but they wear them because of their desire to “fit in”, and to be seen as an upstanding citizen who follows the rules. Covid-19 injections are also a symbol and many people choose to get them because they have a desire to avoid being called an “anti-vaxxer” or a “conspiracy theorist”.

    6. ONE CAN MANIPULATE INDIVIDUAL ACTIONS BY CREATING CIRCUMSTANCES THAT MODIFY GROUP CUSTOMS

    Lastly, Bernays tells us that if one wishes to manipulate the actions of an individual, the most effective way to do so is to create circumstances that engender the desired behaviour.

    What are the true reasons why the purchaser is planning to spend his money on a new car instead of on a new piano? […] He buys a car, because it is at the moment the group custom to buy cars. The modern propagandist therefore sets to work to create circumstances which will modify that custom.

    For example, why all of a sudden does everyone “stand with Ukraine”? According to Bernays, it’s not because there is a war going on and innocent people need our love and support, but rather because it is the new “group custom” to do so.

    The process of altering group customs begins from the top down. In every nation or social clique, there are leaders, public figures and influencers. Manipulating those with the most sway eventually filters down into the public mind. That is why when a celebrity decides to wear something extravagant on the red carpet, a whole new trend can arise overnight.

    Similarly, at the beginning of the Covid saga and then the Russia-Ukraine war, the media were quick to circulate stories of celebs “catching Covid” and urging people to stay home, or public figures condemning Russian actions and calling for stricter sanctions (which just so happened to hurt the West more than they hurt Russia).

    THE PROPAGANDA PLAYBOOK

    The world is a volatile place right now. Things seem to change quickly and no one knows what might happen next. However, amid all this chaos there is one thing that has not changed and is unlikely to change any time soon, and that is human psychology.

    Because of this, the tactics used to manipulate people’s thoughts, beliefs and actions have not changed either. In fact, most of them were outlined in detail 100 years ago by Edward Bernays in his 1928 book, Propaganda.

    That’s right, the Puppet Master’s playbook isn’t a secret. It’s right there, freely available to anyone who cares to understand how the powers that be seek to influence them on a daily basis.

    *  *  *

    Propaganda by Edward Bernays has now been added to our Forbidden Library. Read it now, along with other forbidden books.

    Tyler Durden
    Sun, 05/08/2022 – 23:20

  • Hedge Funds Are Flooding Into Energy Stocks At The Fastest Pace In Years
    Hedge Funds Are Flooding Into Energy Stocks At The Fastest Pace In Years

    It didn’t take long for hedge funds to completely reverse their aversion towards energy.

    Recall back in the middle of March, when not long after oil briefly soared to the highest level in 14 years, hedge funds just couldn’t sell oil fast enough – contrary to traders of physical oil who were buying up every last drop, be it real or synthetic – they could find. It’s also one of the primary reasons why despite dismal fundamentals which scream oil in the mid to upper-$100 range, the black gold would get slammed down every time it tried to make a break for it.

    So fast forward to today, when oil is now well back over the price hit when Biden announced his SPR release, and energy stocks – in the words of Goldman’s head of hedge fund sales Tony Pasquariello – remain the only place to hide from the market’s vicious selloff. A big reason for that is that hedge funds have finally capitulated on dumping and shorting energy, and have turned full-bore oil bulls.

    According to the latest weekly report by Goldman’s Prime Brokerage group (full note available to professional subscribers), amid rising crude oil prices, Energy was the only US sector that saw positive price returns this week, outperforming the S&P 500 index by +7.7% (largest spread in 8 weeks). More importantly, it was also among the most $ net bought US sectors on the GS Prime book.

    Remarkably, hedge funds bought US Energy stocks at the fastest pace since Mar ’20 amid continued sector outperformance.

    According to GS Prime, “this week’s net buying in US Energy was the largest since Mar 2020 (1-Yr Z score +1.8), driven by long buys outpacing short sales nearly 4 to 1; Integrated Oil & Gas, E&P, and Oil & Gas Equip & Services were among the most net bought subindustries, while Storage & Transportation and Oil & Gas Drilling were among the most net sold.”

    Some more details on the recent buying flurry: hedge funds were net buyers of US Energy stocks in 4 of the past 5 weeks, driven by long buys outpacing short sales 3 to 1. More notably, the uptick in $ gross trading flow in US Energy over the past month was the largest over any 4-week period since Mar ’20.

    Still, before we get calls of “hedge funds are rotating in so dump it all”, here is some context: energy now makes up a paltry 4.4% of overall US Net exposure (vs. an even paltrier 2.1% at the start of 2022), and while this is the highest level since Aug ’19, it is just in the 37th %ile vs. the past five/ten years.

    How much more can the rotation into energy be in the coming weeks and months? Well, if we are about to experience a reversion to the mean, it could be a lot because while the Bloomberg commodity spot index is clearly trading at all time highs…

    … when put in the context of equities, well… see for yourselves:

    Tyler Durden
    Sun, 05/08/2022 – 22:45

  • Victor Davis Hanson: California Can't Go On Like This
    Victor Davis Hanson: California Can’t Go On Like This

    The following is an abridged version of a talk delivered on Wednesday, April 20, 2022, during the question and answer portion of an OpenTheBooks.com virtual event. Videos, media, and other speeches are available at YouTube/OpenTheBooks.

    Photo by Sterling Davis on Unsplash

    Victor Davis Hanson, earned his B.A. at the University of California, Santa Cruz, and his Ph.D. in classics from Stanford University. He is the author of several books, including A War Like No Other: How the Athenians and Spartans Fought the Peloponnesian War and The Second World Wars: How the First Global Conflict Was Fought and Won. Dr. Hanson is also a senior fellow at the Hoover Institution and a professor of classics emeritus at California State University, Fresno.

    QUESTON:

    Dr. Hanson, You and I are both native Californians. So looking at California, do you think we’ve lost the state? Or do you have any strategy advice to reverse this current downward trend set up that we have, and bring some success to us? Just in the state of California.

    ANSWER — VICTOR DAVIS HANSON:

    California is sort of like a prodigal son. We’ve all had members of our family that we love, and we grew up with and we thought they were stable, and then they take drugs or they get wayward, they get in trouble, but we don’t disown them. Well, we don’t move away from them. We try to work with them and hope they can find redemption.

    I think that’s what we’re doing in California.

    So, there isn’t one Republican statewide officeholder. Republicans only have 11 of 53 Congressional seats. The rest are Democrats. Both houses of the state legislature have super majorities (Democrats). The ninth federal appellate court is the most liberal in the nation. So, they got what they wanted; the left did.

    The Left got what they wanted.

    Because about four or five to 6 million voters— we don’t know the exact number of the old Ronald Reagan, Pete Wilson, Arnold Schwarzenegger voters (32 years of Republican governors)  — they moved. And they moved because:

    • paying the highest electricity, gas, sales, income tax in the nation.
    • 47/50 rated schools
    • terrible infrastructure, 48th on roads and bridges.
    • And California had high crime.

    That was a bad deal compared to Texas, or Florida or Wyoming or Nevada.

    And, then, we had $6 trillion dollars of market capitalized wealth that came in to Silicon Valley in 30 years, and that created a whole class of coastal millionaires, who were never subjected to the consequences or the ramifications (of bad public policy).

    So, walls on the border were terrible, but I need a wall around my estate in Palo Alto. Teachers unions are great, but my kid goes to the Menlo school or Sacred Heart. Twenty-seven cents peak electricity is essential. But it’s 70 degrees in Atherton all year round (Atherton is the richest city in America).

    That kind of hypocrisy really hurt us.

    Then, let’s face it, we had 10 million people come here illegally from Mexico. And it wasn’t like the first diaspora of the 80s, 70s, or 60s of northern Mexico. These were people were indigenous people and very poor, without a high school diploma, and subject to a great deal of racism in Mexico.

    They came with far fewer skills, and they came in mass over the last 30 years. And they were promised open borders for their families and government support for their families. And they repaid that fee by being doctrinaire and leftist Democrats.

    So, that’s where we are now: the combination of a lot of tech money, and you know, and then our universities which were the best in the country — Stanford, Berkeley, Caltech, UCLA — they became engines of this paradigm and the middle class left.

    …

    So California was lost.

    And CA has the highest taxes costs cost per square footage, highest gasoline, highest electricity, highest number in poverty. Twenty-one percent of the population lives in poverty. One out of three people in public assistance (across America) live in California. Half the homeless live in California.

    However, you know, nothing’s static. So this Latino population has actually moved much slower than one would have liked. But it’s very similar to the Italian diaspora from Southern Italy and Sicily in the 1920s or late 19th century.

    And today’s Hispanics are becoming middle and upper middle class.

    And guess what? They don’t want people coming in from Mexico with 13 tattoos into their schools. They want advanced placement for their children, not bilingual education. And so they’re starting to – for the first time – vote conservatively.

    And under this Biden administration, there’s a phenomenon where they’re paying $7 for diesel fuel a gallon. Six dollars and thirty cents today for gasoline. Building materials are unaffordable.

    So, upper middle class and working and middle class Hispanics (that are 40% of the CA population) are undergoing — I’m not even sure they’re fully aware of it in the abstract — the most radical political shift in my lifetime.

    And I think that it’s going to be across California and even nationwide.

    Should they exercise that political clout, then, I think you’d see the beginning of real change back to what California could be.

    Because we’ve done — just to finish very quickly: We’ve reached the maximum extent of the left-wing progressive experiment without total chaos.

    Anything more than we do letting criminals out in Los Angeles and San Francisco under these crazy Soros-funded DA’s, letting homeless people fornicate or have excrement on the sidewalk, being easy on hit and run drivers and those with three DUIs – that is what we have now.

    And everybody understands that it doesn’t work.

    I was in San Francisco not too long ago, and people are parking with their windows down. Or they have signs on their window shield, “nothing in the car.” Or they unlock their cars. And these are not clunkers. These are Lexus’ and Volvos and they are basically saying to the criminal element… come in scrounge around, there’s nothing there.

    But please don’t break my $1,600 electrified windshield because if you do, I know they won’t prosecute you. And I’m out $1,600.

    …

    That’s something that’s pre-civilizational. And there are groups of people who are changing their political allegiance. So, I think I’m cautiously optimistic that what can’t go on won’t go on.

    Tyler Durden
    Sun, 05/08/2022 – 22:10

  • Bill Maher Refuses To Follow Democrats Into The Woke Abyss
    Bill Maher Refuses To Follow Democrats Into The Woke Abyss

    HBO Host Bill Maher is now openly mocking ‘woke’ Democrats for dying on the hill of gender politics while more important issues such as Roe V. Wade threaten core Democratic principles.

    “Louisiana wants to pass a law that says flat out if you get an abortion, you get charged with murder. Wow,” said Maher. “Suddenly getting the right pronoun doesn’t seem so big, does it?“

    Kudos to Maher for pointing out his own party’s descent into idiocracy.

    “Oklahoma already has one on the books. Six weeks, can’t get an [abortion] after six weeks,” said the comeidan, adding “Most women don’t even know they’re pregnant at six weeks.

    “They don’t even know if they like the guy. Six weeks. That’s a quick look.”

    Maher even knocked pro-abortion protesters – saying that the claim that ending Roe v. Wade would send abortion rights back 50 years is “factually inaccurate,” adding that the ruling is not “settled law,” and wouldn’t have the impact that pro-choice protesters think it would.

    ‘Most abortions now, even when you go to a clinic, are done with the pill,’ Maher said. The pill. And pills are easy to get in America.’ 

    ‘So, you know, for the people who say we’re going back to 1973, we’re not. That’s just factually inaccurate.’ -Daily Mail

    Maher even pointed out that abortion rights in many European countries are far more restrictive than in the US.

    “The modern countries of Europe are way more restrictive than we are or what they’re even proposing,” said Maher. “If you are pro-choice, you would like it a lot less in Germany, and Italy, and France, and Spain, and Switzerland.”

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    Germany, France and Spain all set an abortion limits at 14 weeks into the pregancy, with Italy and Switzerland setting the cap at 12 weeks. 

    Even the more liberal Norway and Denmark set the limit at 12 weeks, with Sweden limiting abortions at 18 weeks. 

    In the U.S., only 22 states set abortion limits at 20 weeks or less, according to the Guttmacher Institute, and most states that have set a shorter time frame cannot enforce the law as they have faced numerous legal challenges. -Daily Mail

    Meanwhile, Maher also put Democrats’ primal screaming over Roe v. Wade in perspective, saying “This whole bulls*** argument about, ‘Well, it’s settled law.’ So was segregation,” adding “So that’s a bulls*** argument. It’s what you think.”

    The rational Democrat strikes again…

    Tyler Durden
    Sun, 05/08/2022 – 21:35

  • Escobar: Megalopolis x Russia – Total War
    Escobar: Megalopolis x Russia – Total War

    Authored by Pepe Escobar,

    After careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”.

    “But it’s our fate / To have no place to rest, / As suffering mortals / Blindly fall and vanish / From one hour / To the next, / Like water falling / From cliff to cliff, downward / For years to uncertainty.”

    – Holderlin, Hyperion’s Fate Song

    Operation Z is the first salvo of a titanic struggle: three decades after the fall of the USSR, and 77 years after the end of WWII, after careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”. No wonder the Empire of Lies has gone completely berserk, obsessed in completely expelling Russia from the West-centric system.

    The U.S. and its NATO puppies cannot possibly come to grips with their perplexity when faced with a staggering loss: no more entitlement allowing exclusive geopolitical use of force to perpetuate “our values”. No more Full Spectrum Dominance.

    The micro-picture is also clear. The U.S. Deep State is milking to Kingdom Come its planned Ukraine gambit to cloak a strategic attack on Russia. The “secret” was to force Moscow into an intra-Slav war in Ukraine to break Nord Stream 2 – and thus German reliance on Russian natural resources. That ends – at least for the foreseeable future – the prospect of a Bismarckian Russo-German connection that would ultimately cause the U.S. to lose control of the Eurasian landmass from the English Channel to the Pacific to an emerging China-Russia-Germany pact.

    The American strategic gambit, so far, has worked wonders. But the battle is far from over. Psycho neo-con/neoliberalcon silos inside the Deep State consider Russia such a serious threat to the “rules-based international order” that they are ready to risk if not incur a “limited” nuclear war out of their gambit. What’s at stake is nothing less than the loss of Ruling the World by the Anglo-Saxons.

    Mastering the Five Seas  

    Russia, based on purchasing power parity (PPP), is the 6th economy in the world, right behind Germany and ahead of both the UK and France. Its “hard” economy is similar to the U.S. Steel production may be about the same, but intellectual capacity is vastly superior. Russia has roughly the same number of engineers as the U.S., but they are much better educated.

    The Mossad attributes Israel’s economic miracle in creating an equivalent of Silicon Valley to a base of a million Russian immigrants. This Israeli Silicon Valley happens to be a key asset of the American MICIMATT (military-industrial-congressional-intelligence-media-academia-think tank complex), as indelibly named by Ray McGovern.

    NATOstan media hysterically barking that Russia’s GDP is the size of Texas is nonsense. PPP is what really counts; that and Russia’s superior engineers is why their hypersonic weapons are at least two or three generations ahead of the U.S. Just ask the indispensable Andrei Martyanov.

    The Empire of Lies has no defensive missiles worthy of the name, and no equivalents to Mr. Zircon and Mr. Sarmat. The NATOstan sphere simply cannot win a war, any war against Russia for this reason alone.

    The deafening NATOstan “narrative” that Ukraine is defeating Russia does not even qualify as an innocuous joke (compare it with Russia’s “Reach Out and Touch Someone” strategy). The corrupt system of SBU fanatics intermingled with UkroNazi factions is kaput. The Pentagon knows it. The CIA cannot possibly admit it. What the Empire of Lies has sort of won, so far, is a media “victory” for the UkroNazis, not a military victory.

    Gen Aleksandr Dvornikov, of Syria fame, has a clear mandate: to conquer the whole of Donbass, totally free up Crimea and prepare the advance towards Odessa and Transnistria while reducing a rump Ukraine to the status of failed state without any access to the sea.

    The Sea of Azov – linked to the Caspian by the Don-Volga canal – is already a Russian lake. And the Black Sea is next, the key connection between the Heartland and the Mediterranean. The Five Seas system – Black, Azov, Caspian, Baltic, White – enshrines Russia as a de facto continental naval power. Who needs warm waters?

    Moving “at the speed of war”

    The pain dial, from now on, will go up non-stop. Reality – as in facts on the ground – will soon become apparent even to the NATOstan-wide LugenPresse.

    The woke Chairman of the Joint Chiefs of Staff, Gen Mark Milley, expects Operation Z to last years. That’s nonsense. The Russian Armed Forces may afford to be quite methodical and take all the time needed to properly demilitarize Ukraine. The collective West for its part is pressed for time – because the blowback from the real economy is already on and bound to become vicious.

    Defense Minister Shoigu has made it quite clear: any NATO vehicles bringing weapons to Kiev will be destroyed as “legitimate military targets”.

    A report by the scientific service of the Bundestag established that training of Ukrainian soldiers on German soil may amount, under international law, to participation in war. And that gets even trickier when coupled with NATO weapons deliveries: “Only if, in addition to the supply of weapons, the instruction of the conflict party or training in such weapons were also an issue would one leave the secure area of ​​non-warfare.”

    Now at least it’s irretrievably clear how the Empire of Lies “moves at the speed of war” – as described in public by weapons peddler turned Pentagon head, Lloyd “Raytheon” Austin. In Pentagonese, that was explained by the proverbial “official” as “a combination of a call center, a watch floor, meeting rooms. They execute a battle rhythm to support decision-makers.”

    The Pentagonese “battle rhythm” offered to a supposedly “credible, resilient and combat-capable Ukraine military” is fed by a EUCom system that essentially moves weapons orders from Pentagon warehouses in the U.S. to branches of the Empire of Bases in Europe and then to the NATO eastern front in Poland, where they are trucked across Ukraine just in time to be duly incinerated by Russian precision strikes: the wealth of options include supersonic P-800 Onyx missiles, two types of Iskander, and Mr. Khinzal launched from Mig-31Ks.

    Kremlin spokesman Dmitry Peskov has stressed Moscow is perfectly aware the U.S., NATO and UK are transferring not only weapons but also loads of intel. In parallel, the collective West turns everything upside down 24/7 shaping a new environment totally geared against Russia, not caring for even a semblance of partnership in any area. The collective West does not even consider the possibility of dialogue with Russia.

    Hence talking to Putin is “a waste of time” unless a “Russian defeat” in Ukraine (echoing strident Kiev P.R.) would make him “more realistic”. For all his faults, Le Petit Roi Macron/McKinsey has been an exception, on the phone with Putin earlier this week.

    The neo-Orwellian Hitlerization of Putin reduces him, even among the so-called Euro-intelligentzia, to the status of dictator of a nation chloroformed into its 19th century nationalism. Forget about any semblance of historical/political/cultural analysis. Putin is a late Augustus, dressing up his Imperium as a Republic.

    At best the Europeans preach and pray – chihuahuas yapping to His Master’s Voice – for a hybrid strategy of “containment and engagement” to be unleashed by the U.S., clumsily parroting the scribblings of denizens of that intellectual no-fly zone, Think Tankland.

    Yet in fact the Europeans would rather “isolate” Russia – as in 12% of the world’s population “isolating” 88% (of course: their Westoxified “vision” completely ignores the Global South). “Help” to Russia will only come when sanctions are effective (as in never: blowback will be the norm) or – the ultimate wet dream – there’s regime change in Moscow.

    The Fall

    UkroNazi P.R. agent Ursula von der Lugen presented the sixth sanction package of the Europoodle (Dis)Union.

    Top of the bill is to exclude three more Russian banks from SWIFT, including Sberbank. Seven banks are already excluded. This will enforce Russia’s “total isolation”. It’s idle to comment on something that only fools the LugenPresse.

    Then there’s the “progressive” embargo on oil imports. No more crude imported to the EU in six months and no more refined products before the end of 2022. As it stands, the IEA shows that 45% of Russia’s oil exports go to the EU (with 22% to China and 10% to the U.S.). His Master’s Voice continues and will continue to import Russian oil.

    And of course 58 “personal” sanctions also show up, targeting very dangerous characters such as Patriarch Kirill of the Orthodox Church, and the wife, son and daughter of Kremlin spokesman Dmitri Peskov.

    This stunning display of stupidity will have to be approved by all EU members. Internal revolt is guaranteed, especially from Hungary, even as so many remain willing to commit energy suicide and mess up with the lives of their citizens big time to defend a neo-Nazi regime.

    Alastair Crooke called my attention to a startling, original interpretation of what’s goin’ on, offered in Russian by a Serbian analyst, Prof. Slobodan Vladusic. His main thesis, in a nutshell: “Megalopolis hates Russia because it is not Megalopolis – it has not entered the sphere of anti-humanism and that is why it remains a civilization alternative. Hence Russophobia.”

    Vladusic contends that the intra-Slav war in Ukraine is “a great catastrophe for Orthodox civilization” – mirroring my recent first attempt to open a serious debate on a Clash of Christianities.

    Yet the major schism is not on religion but culture: “The key difference between the former West and today’s Megalopolis is that Megalopolis programmatically renounces the humanistic heritage of the West.”

    So now “it is possible to erase not only the musical canon, but also the entire European humanistic heritage: the entire literature, fine arts, philosophy” because of a “trivialization of knowledge”. What’s left is an empty space, actually a cultural black hole, “filled by promoting terms such as ‘posthumanism’ and ‘transhumanism’.”

    And here Vladusic gets to the heart of the matter: Russia fiercely opposes the Great Reset concocted by the “hackable”, self-described “elites” of Megalopolis.

    Sergey Glazyev, now coordinating the draft of a new financial/monetary system by the Eurasia Economic Union (EAEU) in partnership with the Chinese, adapts Vladusic to the facts on the ground (here in Russian, here in an imperfect English translation).

    Glazyev is way more blunt than in his meticulous economic analyses. While noting the Deep State’s aims of destroying the Russian world, Iran and block China, he stresses the U.S. “will not be able to win the global hybrid war”. A key reason is that the collective West has “put all independent countries in front of the need to find new global currency instruments, risk insurance mechanisms, restore the norms of international law and create their own economic security systems.”

    So yes, this is Totalen Krieg, Total War – as Glazyev spells it out with no attenuation, and how Russia denounced it this week at the UN: “Russia needs to stand up to the United States and NATO in its confrontation, bringing it to its logical conclusion, so as not to be torn between them and China, which is irrevocably becoming the leader of the world economy.”

    History may eventually register, 77 years after the end of WWII, that neocon/neoliberalcon psychos in Washington silos instigating an inter-Slavic war by ordering Kiev to launch a blitzkrieg against Donbass was the spark that led to the Fall of the U.S. Empire.

    Tyler Durden
    Sun, 05/08/2022 – 21:00

  • Morgan Stanley: "We Live In The Most Chaotic, Hard-To-Predict Macroeconomic Times In Decades"
    Morgan Stanley: “We Live In The Most Chaotic, Hard-To-Predict Macroeconomic Times In Decades”

    By Seth Carpenter, Global Chief Economist of Morgan Stanley

    How Close To The Edge

    Fears of a global recession abound, and in the past three months we have revised our global growth forecast down 170bp while inflationary pressures have risen.

    We live in the most chaotic, hard-to-predict macroeconomic times in decades. The ingredients for a global recession are on the table. My colleague Mike Wilson is calling for a substantial further selloff in US equities, even in the base case of no recession. Consider that the recovery from Covid means companies that have over-earned – especially those producing consumer goods whose demand has soared – will face a reversal of fortune. What’s more, higher rates and falling growth are never good for valuations. Avoiding a recession is our base case, but markets will have to confront the rising probability of one regardless.

    China’s sharp slowdown is clear. Last year, the Chinese government embarked on a regulatory reset that caused a marked downshift in the economy. Then successive waves of Covid buffeted the country. The Covid-zero policy has throttled household spending and has not left the productive side of the economy unscathed. Critically large cities like Shanghai and Shenzhen have been locked down, and cases in other major cities have been rising. The risk of an extended contraction is plain to see.

    For Europe, the slowdown is more prospective because recent PMIs and confidence surveys suggest continued momentum. But since Russia’s invasion of Ukraine started, downside macroeconomic risks have risen. The sharp spike in energy and food prices will impose a tax on the European consumer. And as the Russian invasion of Ukraine continues, the prospect of an embargo on oil imports from Russia is becoming more certain. The second half of the year looks decidedly worse for euro area growth than the first half. Accompanying these headwinds, high inflation has spurred the ECB to normalize policy. While ending QE and bringing the depo rate to zero are highly unlikely to pitch Europe into recession, markets are forward looking, and the selloff in euro area sovereigns is likely just the start of tightening financial conditions.

    In the US, GDP contracted in 1Q. To be sure, domestic final spending was solid, and the culprits were inventories and exports. Weak exports, however, warn of softening global growth. Nonfarm payrolls for April rose by 428k, extending a string of very strong job gains. But just as in Europe, we have yet to see the hit to consumer spending from the surge in food and energy prices, and our recent work shows that the drag can be noticeable (see Slower Growth Ahead). Moreover, mortgage rates have gone above 5% for the first time in 12 years, and with a shortage of new homes driving prices higher and higher, home affordability is the worst in decades. And of course, the Fed has signaled a fairly aggressive set of rate hikes that we see taking the federal funds rate past 2.5% this year as the balance sheet starts to shrink. The direction of travel for the US economy is clear, though for now it remains strong.

    So why not call for a global recession? For now, even if Chinese GDP sees a modest sequential contraction in 2Q, mounting fiscal policy and receding Covid should allow for a subsequent rebound. A European embargo on Russian oil is likely to be manageable, while for a recession, we would need a scenario where all energy imports from Russia including natural gas are cut off abruptly. And the Fed is feeling its way with policy, trying to slow the economy to rein in inflation but willing to reverse course at the first sign of doing too much. We would need a European contraction to hit the US economy after enough front-loaded policy tightening is in train to trigger a recession. The alignment of those unlucky stars is possible, hence the rising risk, but it is not something I would count on.

    Tyler Durden
    Sun, 05/08/2022 – 20:30

  • Pro-Abortion Activists Target Homes Of Justices Kavanaugh And Roberts
    Pro-Abortion Activists Target Homes Of Justices Kavanaugh And Roberts

    Authored by Naveen Athrappully via The Epoch Times (emphasis ours)

    Photo via Fox News

    Around 100 pro-abortion activists took their protests to the homes of two conservative U.S. Supreme Court Justices on Saturday night in the aftermath of a leaked draft opinion, according to which the landmark 1973 Roe v. Wade ruling is set to be overturned.

    Protests kicked off from a local café at Chevy Chase, and protestors first headed off to the home of Justice Brett Kavanaugh, then toward the residence of Chief Justice John Roberts, located just half a mile away, and finally back to Kavanaugh’s, where police asked them to disperse.

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    During the demonstration, protestors chanted slogans like “Keep abortion safe and legal.” Left-wing group ShutDown DC is planning on holding a protest outside Supreme Court Justice Samuel Alito’s house on May 9.

    “The evening of Monday, May 9, we will hold a vigil for all these rights that Alito is threatening to take away. Because it’s been impossible to reach him at the Supreme Court (especially now with the enormous fences), we will do it at his home,” said an online description of the event.

    “At 7:30 pm we will gather at a nearby location and walk together to his house. At the foot of his driveway, on the public street, we will light candles and speakers will share their testimony.”

    According to the leaked Supreme Court draft opinion, the justices have decided to overturn the 1973 decision that categorized abortion as a constitutional right.

    Alito wrote that the 1973 judgment was “egregiously wrong from the start,” its reasoning was “exceptionally weak,” and the decision has had “damaging consequences.”

    Numerous states are set to ban abortion once the Supreme Court strikes down Roe v. Wade. States that continue to allow abortion may see an influx of pregnant women seeking such services.

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    Roberts called the unprecedented leak “absolutely appalling” during a recent talk with a group of lawyers and judges. He also called the individual who leaked the document “foolish” if they believed the action would affect the final court judgment.

    “To the extent this betrayal of the confidences of the Court was intended to undermine the integrity of our operations, it will not succeed. The work of the Court will not be affected in any way,” Roberts said.

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    “This was a singular and egregious breach of that trust that is an affront to the Court and the community of public servants who work here.”

    Kavanaugh is one of the five justices known to have cast the preliminary votes to overturn Roe v. Wade. Roberts opposed striking it down completely, instead batting for a compromise decision that would leave some parts of the original ruling intact while keeping abortion limited to 15 weeks of pregnancy.

    Amid protests triggered by the draft opinion, Justice Clarence Thomas, one of the most conservative on the nine-member Supreme Court panel, stated that the court cannot be “bullied.”

    As a society, “we are becoming addicted to wanting particular outcomes, not living with the outcomes we don’t like,” Thomas said, according to Reuters. “We can’t be an institution that can be bullied into giving you just the outcomes you want. The events from earlier this week are a symptom of that.”

    *  *  *

    [ZH and a reminder…]

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    Tyler Durden
    Sun, 05/08/2022 – 20:11

  • Hedge Fund CIO: "We're On Our Own Now, Without A Fed Safety Net. It's A Sobering Reality"
    Hedge Fund CIO: “We’re On Our Own Now, Without A Fed Safety Net. It’s A Sobering Reality”

    By Eric Peters, CIO of One River Asset Management

    Hope all goes well… “For as long as we’ve been trading, every time stocks fell hard, you knew they’d step in and cut rates,” said the CIO, describing the Fed Put. “But with the kind of inflation we’re seeing now, there’s no way the Fed can cut rates just because stocks fall,” he said. “Even if the S&P were to puke 25% in a week or two, the best you could hope for from the Fed is some kind of statement saying they’ll slow down, maybe pause.”

    US stocks had just finished lower for the 5th consecutive week. “What we’re seeing is the market pricing out the Fed Put. We’re on our own now, without a safety net. It’s a sobering reality, a bit like trading crypto.”

    Overall:

    “Our plans and policies have produced the strongest job creation economy in modern times,” declared Biden. “The unemployment rate now stands at 3.6% – the fastest decline in unemployment to start a President’s term ever recorded,” he boasted. “There have been only 3 months in the last 50yrs where the unemployment rate in America is lower than it is now – a direct result of the American Rescue Plan, our COVID vaccination program, and my plan to grow our economy from the bottom up and middle out.”

    No one could’ve known exactly what would happen when Biden signed into law the $1.9trln American Rescue Plan in March 2021. Now we do. “Inflation is much too high,” said Powell, following his 50bp rate hike, and describing plans to reduce the Fed’s $9trln balance sheet.

    “We understand the hardship it is causing, and we’re moving expeditiously to bring it back down,” pledged the Fed Chairman. “We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.”

    The essential tool the Fed has is its ability to create slack in the labor market through forcing people out of work, undermining their position when negotiating higher wages. But higher wages and narrowing inequality are precisely what the administration wants from America’s hot economy.

    So begins a new conflict in a world of rapidly expanding hostilities. For decades, the disinflationary tendencies that accompanied rising levels of globalization, slowing working-age population growth rates, and accelerating microprocessor processing speeds, allowed central banks to act in general support of fiscal stimulus. In each cycle, their stimulus ratcheted up as our central bankers probed for the point at which their expansive policies would spur runaway inflation, wage-price spirals, hoarding, debasement. But they never found it — until now that is.

    In that previous paradigm, stocks and bonds generally rose together. Even better, when the former temporarily declined the latter rallied. What replaces it will look far different. And we are only now getting a glimpse. 

    Tyler Durden
    Sun, 05/08/2022 – 19:41

  • How To Kill A Zombie? Positive Real Yields Leave Record Number Of Biotechs Trading Below Cash
    How To Kill A Zombie? Positive Real Yields Leave Record Number Of Biotechs Trading Below Cash

    An aggressive, hawkish, and behind the curve Federal Reserve unleashed the most significant rate hike since the Dot-Com bubble burst in the early 2000s. The oversized 50bps hike was in response to inflation at four-decade highs. The Fed is expected to ‘taper’ its balance sheet at the beginning of June, and all of this hawkishness has crushed the valuations of profitless companies. 

    The Fed telegraphed its move to embark on the hiking cycle late last year from emergency levels. The market’s consensus forecast of rate hikes for 2022 increased from 50bps in November to 235bps in May as the Fed is on the path to finding the neutral rate by the end of the year to slow inflation. 

    More importantly, real yields jumped into positive territory for the rest time in two years. However, the move didn’t happen overnight and began in November. 

    Once deeply in negative territory, the dynamic helped divert money from U.S. government bonds into risky stocks, such as profitless companies like biotech. This has since reversed. 

    Anticipation of tighter monetary policy pushed real yields positive and has re-rated risky companies, evident in the fact that over 20% of the Nasdaq Biotechnology Index’s 370 members – a record by a long way – are now trading less than cash. 

    The rise in real yields makes ‘growth’-focused, profitless ‘lottery ticket’ stocks less attractive (as those longer duration equity payoffs get discounted more and more heavily).

    It seems, the world’s freshly schizophrenic central bank hawks have finally figured out how to kill zombies. As we detailed recently, Zombies were introduced to the economic jargon by Ricardo Caballero, Takeo Hoshi, and Anil Kashyap in their article, “Zombie lending and depressed restructuring in Japan” in 2008, where they named the unprofitable and indebted yet still operating firms in Japan as “zombie companies.” They found that, after the financial crash of the early 1990s, large Japanese banks kept money flowing to otherwise insolvent borrowers, aka zombies.

    What happens, when money (credit) is abundantly and easily available? Unprofitable firms that should fail start to roll-over their debts and seek easy funding to carry on. This is what happened after central banks enacted their ‘extreme’ monetary measures in the 2010’s. They started to create zombie companies, like ailing Japanese banks did in the 1990’s.

    Zombie companies are a menace to the economy, because they restrict the entry of new, more productive companies, diminish job creation in the economy and lock capital to unproductive use. Zombie companies seek to survive, not to thrive. They hoard money and debt, but do not invest. Workers may keep their jobs, but they are locked in unprofitable production.

    According to research by Natixis, a French bank, the share of zombie corporations in Europe had risen to 21 percent by the end of 2019. Now, due to the “corona bailouts,” the share is likely to be considerably higher. According to the data compiled by Deutsche Bank Securities, the number of U.S. publicly traded companies classified as zombies had risen to close to 19 percent by the end of 2020. According to Bloomberg, in November 2020, U.S. zombie corporations sat on an incomprehensibly large mountain of $2 trillion in debt. The number of publicly listed zombie companies had also swollen by 200 since the start of the pandemic. This is a clear example of how government and central bank induced bailouts make the economy more fragile.

    Alas, central banks, especially the Federal Reserve and the European Central Bank have fed the creation of zombie companies for years through ultra-low interest rates and QE programs.

    Zombies should not exist in the real world, and the real world is about catching up with the “zombified” global corporate sector. With the drastically hastening inflation forcing the hand of central bankers to raise rates aggressively in the coming months, we are heading into a flood of corporate bankruptcies.

    And then, calamity.

    At the same time, the TINA (there is not alternative) narrative has died with Treasuries now offering ‘safer’, higher-yielding alternatives for increasingly anxious investors (despite the worst ever start to a year for bonds)…

    However, it gets worse, as Paul Tudor Jones recently warned, piling headlong into bonds may not be the wisest choice, as he notes that we are now in “uncharted territory”.

    Specifically, PTJ warned investors to prioritize capital preservation in such a challenging environment for “virtually anything.”

    “I think we’re in one of those very difficult periods where simply capital preservation is I think the most important thing we can strive for,” Jones said.

    “I don’t know if it’s going to be one of those periods where you’re actually trying to make money.”

    It’s not just investors that are in ‘uncharted territory’ as The Fed faces global stagflation…

    As he summarized: “You can’t think of a worse environment than where we are right now for financial assets.”

    And perhaps the signals from the riskiest of risky lottery ticket stocks – Biotechs – is one more sign of that risk-tolerating, zombie-embracing behavior being abandoned.

    Tyler Durden
    Sun, 05/08/2022 – 19:15

  • CA Lawmakers Use 'Gut-And-Amend' To Resurrect Failed Gun Tax
    CA Lawmakers Use ‘Gut-And-Amend’ To Resurrect Failed Gun Tax

    Submitted by The Machine Gun Nest (TMGN, emphasis ours),

    California lawmakers have used a legislative technique known as “gut-and-amend” to revive and fast-track a tax on firearms and ammunition.

    On May 5th, the California State Assembly ‘gutted’ the contents of an unrelated bill (AB-1227) aimed at building energy efficiency, and amended it with language reviving a long-failed firearm and ammunition excise tax which, if passed, would be effective immediately as an “urgency statute.”

    According to the new language, “The year 2020 saw an unprecedented surge in firearm and ammunition sales across the nation, and this trend has continued into 2021.” They say that the tax is needed because “This surge in firearm and ammunition sales and profits has occurred alongside an unprecedented nationwide spike in shootings and gun homicides.” Seemingly conflating legal gun sales with crime and violence.

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    The bill itself calls for an excise tax of 10% on handguns and 11% on long guns, ammunition, or precursor parts. California would then deposit the tax collected from the bill into a so-called Gun Violence Prevention, Healing, and Recovery Fund. We’ve stated that these funds are cover for liberal states to tax gun owners and fund their opposition research, which in turn supports more gun control laws. It’s like an authoritarian Uroboros.

    Interestingly, a similar bill, AB-1223, was introduced by the same author, California state legislator Marc Levine, but failed to pass in February. This is another attempt to pass a failed gun tax by gutting and amending a solar roofing bill. 

    What’s even more telling of the lawmakers’ attitudes in California is this excerpt from the proposed legislation: “Existing law imposes various taxes, including taxes on the privilege of engaging in certain activities.” It’s obvious here that California intends to treat the 2nd Amendment like a privilege, to be taxed and taken away from those that are unworthy, or cannot afford it, instead of a constitutional right.

    As expected, the reaction on Twitter from gun owners has been explosive.

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    While the insanity of the situation can almost be humorous, gun owners should look at California not as a bubble but as an example of what can happen when one party controls a state. Don’t forget, California was a Republican stronghold state until the 90s but now serves as a template and testing ground for gun control policy nationwide.

    Tyler Durden
    Sun, 05/08/2022 – 18:40

  • 3 American Tourists Found Dead In Mysterious "Health Emergency" At Bahamas Resort
    3 American Tourists Found Dead In Mysterious “Health Emergency” At Bahamas Resort

    Three American tourists were found dead inside their hotel room, and a fourth person was hospitalized Friday, at a Sandals resort in the Bahamas, according to local authorities. 

    Bahamian Acting Prime Minister Chester Cooper said two men and a woman died at the Sandals Emerald Bay resort on Exuma. A fourth was airlifted to a hospital in nearby Nassau. 

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    Royal Bahamas Police Force said it was investigating that at least two people sought medical treatment Thursday night after suffering from nausea and vomiting. 

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    On Friday, police found a man and woman dead in their hotel room. In a separate hotel room, a man was found dead. All had signs of convulsion but no trauma, police added. 

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    Sandals confirmed the three deaths to USA Today. A spokesperson for the resort released this statement:

    “It is with deep sadness that we can confirm the passing of three guests at Sandals Emerald Bay on May 6, 2022.

    “A health emergency was initially reported and following our protocols we immediately alerted emergency medical professionals and relevant local authorities,” Stacy Royal, a spokesperson for Sandals, said. 

    Minister of Health and Wellness Dr. Michael Darville and his team are expected to arrive on the island this evening to investigate the health emergency. 

    “We thought we might have to make a makeshift facility, a mini-hospital … we believe it’s an isolated situation that revolves around four people,” Darville said. It remains unclear how the three died. 

    Tyler Durden
    Sun, 05/08/2022 – 18:05

  • Duck And Cover
    Duck And Cover

    By Peter Tchir of Academy Securities

    Even I am not old enough to done “duck and cover” drills in school, but it somehow comes to mind this weekend as we digest the latest market action and the ongoing Russian nuclear threats.

    Markets

    On the week, stocks didn’t do too badly. The Dow was almost unchanged, and even the hard-hit Nasdaq “only” dropped 1.4%. Based on that, last weekend’s Bad to the Bone seemed overly dramatic. But the weekly change isn’t reflective of the mess the markets were. From its lows on Wednesday, ahead of the FOMC, the Nasdaq 100 rallied over 5% only to plunge almost 8% at its lowest point on Friday morning! While we expected many to try and rally, post FOMC, largely because it worked extremely well back in March, I had no expectation that the rally would be that strong and fast! Nor, did I expect it to be so short lived and to turn so ugly, so quickly.

    Markets, largely, remain broken. Liquidity is abysmal. Stock indices seem to move 0.5% on a whim and the trading this week, made me think back to the days when the TARP legislation failed, which I discussed on TD Ameritrade.

    There were some bright spots, like energy, where XLE was up almost 10% on the week! (Barron’s included Academy’s view that “The energy companies of today are also the energy companies of the future”). Bitcoin, on the other hand, is back below $35,000 as I type and had a miserable week, dropping more than 10%.

    I remain concerned that the “non-virtuous circle” described in last week’s report, highlighting the linkage between “disruptive” stocks and crypto isn’t over (though TQQQ had large inflows last week, including a huge inflow on Friday, as some investors bet heavily on a bounce, using leverage. ARKK, which I also highlight, had inflows on the week, but had a significant outflow on Friday which is something to watch).

    As much as I want to be full on bullish at these levels, the only “capitulation” that I have seen is the capitulation of shorts and hedges on Wednesday afternoon!

    Duck and cover seems to apply to trying to manage risk in these markets.

    Rates and Credit

    Much of the blame for last week’s markets can be placed on the Treasury market, though, that is a bit too simplistic. Yes, the 10-year treasury went from 2.94% on Wednesday, to 3.13% by Friday, but it did moved 5 bps higher on Monday, while stocks rallied and even on Friday, stocks and bonds were not moving in lock-step, which sets us up, potentially for a “risk-off” type of day, when stocks sell-off as treasuries rally.

    The yield curve actually steepened (at least 2s vs 10s) which should, if anything, be encouraging.

    Credit, as expected (or at least as hoped) did very well! The Bloomberg corporate bond spread actually tightened from 135 to 134 on the week. That seemed almost too good to be true, but LQD (a longer dated IG ETF) had spreads go from 172 to 169. The CDX index, didn’t fare as well, but that is linked, via algos, to the stock market almost as much as to the bond market.

    Lower prices and overall higher yields are attracting money to corporate bonds! That has been very supportive for spreads.

    I think there are some key takeaways from the credit markets:

    • Credit is holding in, which should support equity prices. Equities should not go into freefall while credit is holding in. What we are seeing is the gap between high equity valuations and credit, close. There is a large buffer between the credit risk and equity risk for most firms and that is what is getting priced in. Even some “distressed” investors are buying IG bonds, as the dollar prices are so attractive (buying bonds below par, solves a lot of credit concerns).
    • Watching the leveraged loan market closely. Leveraged loans and CLO’s had done very well, especially versus high yield bonds. That, to me, indicated that the movement was primarily rates related, and there wasn’t much concern about credit spreads. But these markets (BKLN and SRLN and JBBB are some ETFs to watch) are back to their march lows, or even worse than that. There is at least a hint that in the high yield market, credit risk is becoming more of a concern! This “metric” or signal has gone from comforting to mildly disturbing.

    Market Strategy – Duck and Cover

    As we head into this week:

    • Expect more volatility. I cannot think of any reason why volatility would decline dramatically. Last week’s extreme price action will likely feed into VAR (value at risk) models and cause traders to reduce positions. Liquidity, with summer coming is likely to remain poor, or get worse as traders won’t have the stomach for large positions with reduced staff as people take their vacations.
    • Buy dips on credit and rates. Unless we see signs of credit fears (either IG bond spreads widening or leveraged loans catching up to high yield bonds) I like buying dips on credit and rates. But very cautiously.
    • Watch Quantitative Tightening in action. When a bond matures, the issuer often issues new debt. That applies to treasuries as much as anything. Often, the holders of an existing bond, “roll” into the new bond. There is, to some extent, a list of ready made buyers. They are receiving cash for the bond that is maturing and may have an inclination to re-invest that money in bonds of the same issuer. Simplistic, yes, somewhat true, also yes. So, when the FED holds bonds that are maturing and is NOT planning on re-investing those proceeds, new buyers have to be found. I think we will see investors in every asset class, reduce risk to get similar expected returns, which is why I think the selling in the riskiest assets, isn’t quite over, yet.
    • Sell rips on risky assets. I’m stuck thinking we have another 10% downside on risky assets (and more than that on crypto). It doesn’t mean that we won’t get vicious “bear market” rallies. But I just don’t think this ‘valuation re-evaluation’ is over yet. It is getting close to being done, but I would really like to see capitulation, which I still don’t think we’ve seen.

    Stay nimble. Duck and cover was meant to be a way to protect yourself, and I think we have to trade this market with that perspective in mind.

    Longer term, the level of discussion about “securing” supply chains is high and I’m certain is going to result in action as companies (and countries) focus on ensuring that their supply chains are robust and “secure”.

    I am the least bearish I’ve been, even expecting some sort of a rally, which may mean I’ve become part of the problem and markets will face a rough start to the week.

    Tyler Durden
    Sun, 05/08/2022 – 17:37

  • The World Is "Crying Out For Diesel"; Product Tankers Could Win Big
    The World Is “Crying Out For Diesel”; Product Tankers Could Win Big

    By Greg Miller of Freight Waves,

    Retail gasoline prices in the U.S. are up 45% year on year. Diesel used by American truckers is up 75% and just hit an all-time high. But this is not just an American problem. Pain at the pump is global. And so-called product tankers — ships designed to transport cargoes such as diesel, gasoline and jet fuel — are in prime position to profit.

    Fuel flows globally to where it earns the highest return. Case in point: As U.S. diesel prices have skyrocketed, American exports of diesel have surged, because demand in other countries is higher.

    U.S distillate fuel exports hit 1.74 million barrels per day (b/d) in early April, nearing record levels, according to preliminary data from the Energy Information Administration (EIA). Total U.S. exports of all refined products in April rose 28% year on year.

    ‘Outright panic buying of diesel’

    “There has been outright panic-buying of diesel,” said Anthony Gurnee, CEO of product-tanker owner Ardmore Shipping, during a conference call on Wednesday.

    Ardmore specializes in MR tankers, a vessel class with capacity ranging from 25,000-54,999 deadweight tons (DWT). Clarksons Platou Securities said that modern-built MRs were earning $49,800 per day in the spot market as of Friday. That’s more than quadruple the average rate for full-year 2021. Clarksons puts the breakeven rate for such vessels at $18,000 per day.

    “The world is really crying out for diesel and that’s causing refinery margins to spike,” said Lois Zabrocky, CEO of International Seaways, during a conference call on Wednesday.

    INSW’s product tanker fleet primarily consists of MRs and LR1s (55,000-79,999 DWT). Modern LR1s are earning $50,400 per day in the spot market, according to Clarksons, which puts the breakeven rate for such ships at $19,000 per day. Current LR1 rates are almost quadruple their full-year 2021 average.

    Larger LR2s (80,000-119,00 DWT) that handle high-volume, long-haul runs are showing even steeper gains. Rates for modern LR2s jumped 21% on Friday to $58,600 per day, said Clarksons.

    War exacerbates diesel shortages

    The worldwide diesel market is “extremely tight” and the Russia-Ukraine war “has exacerbated the global diesel shortage,” said James Doyle, head of corporate development at Scorpio Tankers, during a conference call on April 28.

    Before the invasion, he said, Russia exported about 1 million b/d of diesel to Europe. That volume has plummeted. “But the diesel shortage in Europe is not new,” he added. “And the shortage extends beyond Europe to Latin America and Africa, which have similar diesel deficits.

    “For our MRs, the highest rate increases were for our vessels going from the U.S. Gulf to Latin America, which has less to do with Russia and Ukraine and more to do with increasing demand,” Doyle pointed out.

    “We expect the market to tighten further with increased competition for distillate molecules as jet fuel demand returns. This is also having an impact on gasoline. With refineries running in max distillate mode, we are not building significant gasoline inventories ahead of peak driving season. As demand grows and inventories remain low, product tankers will need to be the conduit for filling the global supply-demand imbalance.”

    Commodity specialist Argus made the same point on gasoline. “The lack of spare capacity is causing alarm heading into the peak summer driving season,” Argus warned on Thursday. “The situation is compounded by even higher middle-distillate margins, which have boosted supply of diesel over gasoline.”

    Inventories drawn through COVID era

    Usually, rates for tankers that carry crude oil and rates for tankers that carry petroleum products trend roughly in tandem. And if one outperforms the other, it’s usually crude. This year, product tankers are dramatically outperforming crude tankers; larger crude tankers are still below breakeven. 

    Both crude and product tankers saw rates collapse during the COVID era. Oil production outstripped demand amid lockdowns. The world’s inventories filled with cheap crude and products bought at the trough.

    Ever since, those inventories have been drawn down instead of using tankers to import new supply (because new supply is much more expensive than the petroleum still in storage bought at the trough).

    Due to this practice, stockpiles were already historically low months before Russia invaded Ukraine. In November 2021, Alphatanker published a report called “Welcome to the great diesel squeeze,” which warned: “It’s now apparent that global gasoil and diesel markets are tightening at an alarming pace with supply shortfalls now hitting key consumer markets worldwide.”

    Then Russia invaded Ukraine. “This event immediately laid bare … the risks of severely depleted inventories,” said Evercore ISI analyst Jon Chappell.

    Product tankers vs. crude tankers

    Asked why this has boosted product tanker rates so much more than crude tanker rates — given that crude inventories are also historically low — Chappell responded, “Usually the two groups are highly correlated, and usually crude leads and outperforms by measure of magnitude. But we are far from normal times.

    “Crude tankers are doing really well in regions directly impacted by Russia’s invasion of Ukraine — the Black Sea, Baltic and the Med — owing to the higher insurance costs and risks of entering those markets. But overall, the crude markets have been balancing new longer trade routes with the inability of OPEC to meet quotas, Russia [being] offline, and China lockdowns. The market is better than it probably should be based on those latter factors, but the low inventories and longer ton-miles [voyage distances] are offsetting some of the macro headwinds.

    “Product tankers are benefiting from localized diesel shortages, high refinery margins … and massive trading arbs [arbitrages] that allow traders to pay much higher freight costs and still make a ton on the arb. Inventories are far too low globally and prices will likely remain elevated, forcing more trading in unusual trade lanes, tightening capacity and lifting that market well before and well above crude.

    “Eventually crude tankers will catch up, I think, if supply of crude can meet higher refinery demand. But right now, it’s a unique product story. And talking with my oil analyst, it’s hard to see how these diesel shortages ease or the strong tanker markets end,” said Chappell.

    Earnings recap

    Among the universe of listed shipowners, Clarksons Platou Securities said that “product tankers are sailing up as the winning sector year to date.” Rates are surging on “exploding refining margins,” said Clarksons. It maintained that “the products sector looks primed to gain further.”

    Through Thursday’s close, the stocks of Scorpio Tankers and Ardmore Shipping were up 106% and 114% year to date, respectively. Shares of International Seaways — which owns both crude and product tankers — were up 50% year to date.

    Listed product tanker owners have just reported more losses for the first quarter. The rate upswing won’t be fully felt until the current quarter.

    Ardmore Shipping reported a net loss of $7 million for Q1 2022 versus a net loss of $8.5 million in Q1 2021. The adjusted loss of 4 cents per share beat consensus expectations for a loss of 8 cents.

    Ardmore has 50% of its Q2 2022 available MR spot days booked at $25,500 per day. That compares to rates of $16,513 per day in Q1 2022.

    International Seaways reported a net loss of $13 million for Q1 2022 compared to a net loss of $13.4 million in the same period last year. The adjusted loss of 29 cents per share was slightly better than Wall Street expectations for a loss of 30 cents.

    The company has 41% of its available Q2 2022 MR spot days booked at an average of $24,500 per day. That compares to $14,030 per day in the first quarter.

    Scorpio Tankers reported a net loss of $84.4 million for Q1 2022 compared to a net loss of $62.4 million in Q1 2021. The adjusted loss per share of 27 cents came in much better than the consensus forecast for a loss of 58 cents.

    Scorpio has 42% of its available Q2 2022 spot MR days booked at $30,000 per day. Its MR fleet earned an average of $16,305 per day in the first quarter.

    Tyler Durden
    Sun, 05/08/2022 – 17:30

  • Western Banks Brace For $10 Billion Hit Over Russia Exit
    Western Banks Brace For $10 Billion Hit Over Russia Exit

    Western banks are bracing for a $10 billion collective hit as they prepare to shutter operations in Russia over the invasion of Ukraine – a move which mirrors several US lenders last month.

    A Societe Generale logo on a Rosbank bank branch in Moscow, Russia. The French bank was hurt by a write-down on its Russian business.
    Bloomberg News

    According to the Financial Times, international sanctions have “forced banks to consider turning their backs on a country that some lenders first entered more than a century ago.”

    This week a string of European banks set aside billions of euros in provisions ahead of the closure of their Russian operations, following similar moves by US lenders last month. Western banks collectively have $86bn of exposure to Russia — with close to 40,000 staff — and are setting aside more than $10bn in expectation of losses on their ventures, according to Financial Times calculations. -FT

    French lender Société Générale, which has operated in Russia for 150 years, has set aside €561mn for the first quarter, and expects to lose €3.1bn ($3.3bn) on the sale of its Rosbank subsidiary – which was founded by billionaire Vladimir Potanin. The bank has 3.1 million retail customers throughout Russia and €18bn ($19.3bn) of total exposure to the country. Around 12,000 people are employed by Rosbank.

    Italy’s UniCredit has set aside €1.3bn ($1.37bn), and says that exiting Russia entirely could cost it €5.3bn ($5.6bn). The bank currently has 4,000 workers and 2 million customers in the country, where it has operated for 17 years.

    “I’m sure you have noticed the speed of change in terms of . . . waves of sanctions,” said CEO Andrea Orcel.

    Graphic via FT Research (Steven Bernard and Patrick Mathrin)

    Other European banks preparing to take a hit are French bank Crédit Agricole, Austria’s Raiffeisen, Swiss lender UBS, and Credit Suisse.

    Tyler Durden
    Sun, 05/08/2022 – 16:55

  • Biden Sends First Lady Jill To War-Torn Ukraine After Zelensky Urged Him To Come
    Biden Sends First Lady Jill To War-Torn Ukraine After Zelensky Urged Him To Come

    It appears the White House PR team has been quite busy trying to get creative in terms of ways it could display support for Ukraine… short of President Joe Biden actually going there himself (as has been requested and urged by Zelensky). They came up with a Mother’s Day “surprise” in the form of first lady Jill Biden traveling to a war zone to meet the first lady of Ukraine for a photo op.

    CNN reports of the previously unannounced visit, “First lady Jill Biden spent part of Mother’s Day making an unannounced trip to Uzhhorod, Ukraine, a small city in the far southwestern corner of Ukraine, a country that for the last 10 weeks has been under invasion by Russia.”

    Via The Independent

    The two met in a former school that’s now a refugee center for Ukrainians’ fleeing the fighting. Notably it’s the first time that President Zelensky’s wife, Olena Zelenska, has appeared in public since the Russian invasion kicked off on Feb.24.

    The Ukrainian first lady praised Jill Biden’s “very courageous act” – and Biden explained, “I wanted to come on Mother’s Day.” She said: “We thought it was important to show the Ukrainian people this war has to stop. And this war has been brutal.” Biden added, “The people of the United States stand with the people of Ukraine.”

    Three weeks ago Ukraine’s President Zelensky told CNN’s Jake tapper that the US president should visit his country in person because “he is the leader of the United States, and that’s why he should come here to see.” 

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    But many pundits have noted the huge security risk for such a trip, but additionally the question of Biden’s age, stamina and mental acumen for such a journey. Last month both Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin visited Kiev, and House Speaker Nancy Pelosi made the trip a week ago.

    Last month when pressed on the question of Biden going, White House Press Secretary Jen Psaki insisted “No. no… We are not sending the president to Ukraine.” She explained that when the UK’s Boris Johnson made the trip, he had to take a long train ride under high secure conditions. The suggestion was that it would be too difficult and risky for the US president to undertake, however, apparently it’s not for his wife Jill.

    Tyler Durden
    Sun, 05/08/2022 – 16:20

  • What Traders Can Learn From Professional Horse-Betting
    What Traders Can Learn From Professional Horse-Betting

    By Alex of the MacroOps Substack

    Thegreek.com, a horse racing blog, discusses the “seven deadly sins” losing horse bettors commit. Repeat these sins in your trading and you’ll suffer the same fate as the losers at the track.

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    Here are the four most important sins to avoid:  

    Deadly Sin No.1: The most important thing is picking winners.

    Wrong! Professional horse bettors will tell you that trying to pick the winner of the race is a failed strategy and that it’s far more important to get value. What’s “value?” Consider this: A horse that you handicap as a legitimate even-money favorite should win about half the time. So that horse is a bad play at 4/5 or less. A horse that you analyze should win about one in four times the race is run, should be about 3/1. That horse won’t win as often as the even money shot but if you can get value, say 5/1 or higher, you’ll make money in the long run.

    The few horse bettors good enough to make a living know it’s not about picking a winner. It’s about identifying positive expected value. Oftentimes that means the lower probability play is the better bet.

    If an option is currently priced to profit 1 in 10 times, but you think it’ll profit 2 in 10 times, then buy it. It’s a value. It doesn’t matter that most of the time the option will expire worthless. Over the long haul, the buyer will walk away profitable.

    Deadly Sin No.3: You should bet more on a horse you really like, such as your “best bet.”

    Ridiculous. Why bet if you don’t like who you’re betting? Put another way, any horse worth betting is one worth betting significantly. Sophisticated bettors usually bet about the same amount on every bet. After all, as one professional gambler told me, “If I knew what my ‘best bets’ were I’d only bet those.” A “best bet” is a media creation. If you know what you’re doing, your best bet always should be the next bet you make.

    Professional track gamblers understand that bet size is incredibly important. Sizing your bets based on “hunches” leaves you susceptible to accidentally betting big on losers and tiny on winners.

    Imagine three trades where you’re right on the first two and wrong on the last. And since you thought you had a “hot hand”, you bet really big on that last loser. This would result in the losses from the last trade canceling out the gains from your first two winners. Your account would end up net negative.

    Sizing up has a time and a place in trading. Soros would bet big when the stars aligned. But you need lots of experience before you can start sizing up on what you think are great trades.

    Until you’re seasoned and able to decipher between a good and great bet, keep your position sizes consistent. If you don’t, you risk going broke from bad luck.

    Deadly Sin No. 4: Statistical betting trends are important.

    Actually, they’re not. “Technical handicapping,” as it’s called, is another of those manufactured disciplines used by professional touts, not professional horse racing bettors. Mostly, technical handicapping—wherein statistics are employed to predict an outcome—are little more than “backfitting,” a practice where someone makes up a theory to fit a set of numbers. It’s a lazy handicapping shortcut and no replacement for hard analysis.

    Ever wonder why those really smart quants with the fancy degrees end up blowing up? It’s because they have too much trust in a model tightly fit to past data.

    Studying the past can help you figure out what’ll happen in the future, but only within reason. If you create a trading model based on the premise that the future will play out exactly like the past… it will fail.

    Keep historically based assumptions as simple as possible. That will help thread the needle between useful insight and robustness.

    Deadly Sin No. 7: Specialize in certain aspects of the game and pick your spots.

    Why limit yourself? If you never bet grass races or stay away from maidens you may be missing some great betting opportunities. When you gamble, having more options always is preferable.

    Tyler Durden
    Sun, 05/08/2022 – 15:45

  • Peak Inflation And Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
    Peak Inflation And Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors

    Submitted by Joseph Carson, former chief economist At AllianceBernstein, via The Carson Report

    Some have used peak inflation to create the impression that the worse of inflation news is in the rear and that the Fed has less tightening to do than what many expect. Yet, peak inflation says a lot about what the Fed has to do, which should worry the Fed and scare investors.

    In three out of the last four decades, the US experienced a cyclical rise in inflation (4% and above) that compelled policymakers to raise official rates in response. It didn’t matter if the inflation cycles were broad (the early and late 1980s) or narrow (oil spike in the mid-2000s). But policymakers had to raise official rates above peak inflation on each occasion to squash the price cycle.

    No one is thinking the unthinkable that the Fed has to raise rates above the 8.5% increase in consumer prices over the past year. Yet, past experiences provide painful lessons on the level of official rates required to reverse inflation cycles.

    Each inflation cycle has common and unique factors. However, many, including Fed officials, have argued that the current inflation cycle has more than a few items lifting prices temporarily. The Bureau of Labor Statistics (BLS) produces a special aggregate series that removes some things people have cited, so it helps remove some of the noise.

    For example, BLS published a series of CPI less food, energy, shelter, and used car and truck prices. This series removes the recent temporary spikes in food and energy prices linked to the Russian invasion of Ukraine. It also removes the massive spike in used vehicle prices associated with supply bottlenecks owing to the pandemic. Yet, this dumbed-down price series still shows a 5.8% in the past year, matching the highest rate recorded in 40 years. 

    So even if this is the inflation rate the Fed needs to target to reverse the inflation cycle, it still calls for a fed funds rate of 6% or more than twice the peak rate shown in policymakers’ official rate projections made in March.

    Given how tight the labor markets are nowadays and everything else being equal, it would probably take a 6% fed funds rate to impact consumer demand and dampen inflation by creating more unemployment. At the end of March, there were a record 11.5 million job openings against a backdrop of 6 million unemployed. Never before has the Fed faced a significant inflation cycle with labor markets this tight. 

    Yet, I would bet that long before the fed funds rate gets close to 6%, something else would break to stop the Fed. Things that stopped the Fed in the past were an abrupt and sharp drop in the financial markets or a cessation in the flow of credit that could lead to economic and financial instability. 

    Given the current market environment, none of those conditions are present, so the risk, for now, is that Fed tightening course could look a lot like those of the past until something else breaks. Investors forewarned.

    Tyler Durden
    Sun, 05/08/2022 – 15:10

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May 08

Today’s News 8th May 2022

  • "The Whole Planet Is A Pot, And We're All Frogs"
    “The Whole Planet Is A Pot, And We’re All Frogs”

    Authored by Ugo Bardi via The Seneca Effect blog,

    The lockdown in China: if the powerful are doing something that looks stupid, it’s because whatever they’re doing IS actually stupid

    I received several comments on my post “The Shanghai Lockdown: a Memetic Analysis,” and I think that some were so interesting to be worth reproducing in a full-fledged post. The first comment comes from an anonymous commenter living in China. It seems to me believable, and also consistent with my interpretation.

    In practice, the Chinese were (and are) not the only one who are conditioned by factors such as avoiding a loss of face.

    Italians did the same during the lockdowns of 2020 and 2021.

    There seems to be an enormous psychological problem that when you discover that you have been conned, you don’t want to admit that. It makes little difference if you are Chinese, Italian, or another nationality.

    There follows a comment by “Mon Seul Desir” on which I fully agree. So much that I used it in a condensed version for the title of this post.

    When something looks insane, most likely, it IS insane.

    A comment on “The Shanghai Lockdown: A Memetic Analysis”by “Anonymous”

    I am in Shanghai. I have been living here since 2007. I can read/speak Chinese at a high level of fluency. I also travelled extensively in the country.

    There is something that most foreign analyst do not grasp: the Chinese Mind (the “collective subconscious” if you wish.)

    • The Chinese Mind likes to be seen in the Struggle doing things to fight in the Struggle (no matter what the Struggle is, whether those actions give tangible results or not, at least they make great photo ops for the media.)

    • The Chinese Mind is hive-like, it’s blindly obedient, and it lashes out at the “Enemy” (whether real or imaginary)

    • The Chinese Mind is a bit childish, it is for sure stubborn, and non-rational/logical (non-Cartesian)

    • The Chinese Mind is constantly under ideological propaganda, everywhere, every time, from childhood til death, from home to the workspace…

    • The Chinese Mind is never guilty, it always blames the Other (and the object of the blame is constantly shifting)

    • The Chinese Mind hates losing face (what face, nobody knows) and hates being criticized (just shut up and put it under the carpet)

    Remember the famines? One day they wake up and decide to kill all the birds (that were eating bugs that were eating crops…)

    Same Mindset.

    Shanghai has always been seen as the most “civilized” city in China. Shanghai is often called Le Paris de l’Orient, it is an “international” first tier city… probably the top Chinese city in terms of openness, quality of life and access to medical care.

    Nobody expected to see such levels of insanity in Shanghai… in other areas of the country, yes, but not here. Looking at the conditions in the quarantine centers… Containers without doors in a field, tents set on a highway, toilets flooded with feces… open air zoo.

    They come take positive cases in big buses and ambulances almost daily. The police is patrolling streets at all times and we are unable to even set foot on the sidewalk. Every building that had a positive case is either: shut down with barriers OR has 1-2 men in a tent monitoring 24/7 (imagine all the manpower required.) Currently there are 3-4 of those tents in my compound. It’s basically Martial Law.

    The psychological toll is quite high. The monetary one must be hard of lower classes. Some neighbors have mental breakdowns. Some people spray alcohol in the air while walking to get tested… You’d think the Plague is upon us.

    Some people were getting messages in group chat about “foreign spies” and “foreign media fueling anti-China conspiracies.” Good ol’ shift the blame tricks.

    I have been in lockdown since mid-March, got tested 35 times, and lost about 12 pounds. The local governmental commune gave us a little bit of food, but barely enough to survive.

    Luckily we had some preps and were able to order some food. Now most delivery guys are not allowed to deliver to our address. We can get a bit of food, but we need to get imaginative to create new recipes (boiled/sweet and sour/spicy/fermented cabbage.)

    My take is:

    It could be a test for something much bigger (ie., war, energy crisis) or they are truly afraid of the unrest if lots of old people were to die. Chinese people tend to get emotional and the last thing the authorities want to deal with is mobs lynching doctors in the streets.

    Is the frog slowly boiling in the pot?

    I think so.

    Except the whole planet is pot and we’re all frogs.

    Posted by “Mon Seul Desir”

    I think that there’s far too many attempts to rationalize the conduct and policies of the powerful as being part of some astonishingly clever plan, myself I use Occam’s razor, if the powerful are doing something that looks incredibly stupid, self destructive and utterly insane, then it is because whatever they’re doing IS actually incredibly stupid, self destructive and utterly insane. I don’t buy the myth that those in power are unusually clever, informed or are far seeing. Here in Canada I’ve been witnessing the follies of our child-rulers for the past few years and the bungling of senile Brandon south of the border and this is governance on the level of Honorius and Arcadius and their corrupt intrigue filled courts. As for China, I saw a report on Xi’s appearance before the Congress of Peoples Deputies and I wondered. How many of the deputies applauding him are actually plotting against him?

    Tyler Durden
    Sat, 05/07/2022 – 23:20

  • These Cities And States Are Leading America's Manufacturing Comeback
    These Cities And States Are Leading America’s Manufacturing Comeback

    The health of the US manufacturing sector has become a major political issue in recent years. Populist figures like Donald Trump on the right and Bernie Sanders on the left have seized on the supposed death of American manufacturing to criticize the ruling political order.

    From former President Trump’s focus on trade policy and President Biden’s $1.2 trillion bipartisan infrastructure bill to companies “reshoring” plants for the sake of their supply chains – and for consumers expressing preferences for American-made goods – manufacturing in the US is poised for a comeback, according to one study.

    Still, manufacturing in the US represents a much smaller slice of jobs today than it did years ago.

    After manufacturing peaked at near 40% of American jobs at the height of World War II, the sector has seen a steady decline over time, to around 8.4% of employment today. In total employment, manufacturing jobs peaked at 19.5 million in the late 1970s and fell off sharply after 2000 to just 12.6 million today.

    Interestingly, despite the decrease in manufacturing employment over the past several decades, manufacturing output as a share of real GDP has stayed relatively stable. Since 1997, manufacturing has fluctuated between 11.5% and 13.2% of GDP.

    In terms of which states are responsible for the largest  growth in manufacturing jobs, Nevada has seen nearly 50% increase in both manufacturing employment in terms of jobs and percentage of GDP from 2010 to 2020, while California has seen a 45.6% increase in manufacturing GDP and Florida has reported an increase of 35.5%.

    At the metro level, many of the top locations for manufacturing currently are also found in these states, although a few Rust Belt metros have also enjoyed a resurgence in manufacturing, an industry that they historically saw.

    Meanwhile, here’s a breakdown of small and midsize metros where manufacturing activity is thriving.

    Meanwhile, here’s a breakdown of large cities where manufacturing is thriving.

    15. Tampa-St. Petersburg-Clearwater, FL

    14. Tucson, AZ

    13. Orlando-Kissimmee-Sanford, FL

    12. San Antonio-New Braunfels, TX

    11. Austin-Round Rock-Georgetown, TX

    10. Tulsa, OK

    9. Phoenix-Mesa-Chandler, AZ

    8. Raleigh-Cary, NC

    7. Portland-Vancouver-Hillsboro, OR-WA

    6. Nashville-Davidson–Murfreesboro–Franklin, TN

    5. San Francisco-Oakland-Berkeley, CA

    4. Detroit-Warren-Dearborn, MI

    3. San Diego-Chula Vista-Carlsbad, CA

    2. San Jose-Sunnyvale-Santa Clara, CA

    1. Grand Rapids-Kentwood, MI

    Tyler Durden
    Sat, 05/07/2022 – 22:45

  • We Are All Traders Now
    We Are All Traders Now

    By Nicholas Colas of DataTrek Research

    Even the most committed long-term investor can learn a thing or two from how traders go about their process. The core tenets of trading are: 1) respect price action, 2) manage risk so you can meet your goals, and 3) maximize the impact of your time and attention. The last 2 days tell us US/global equities still have a slog ahead of them. The only goal now, for investors and traders alike, is to make it to the turn in asset prices (whenever that is) with the least amount of incremental damage to portfolios. A little bit of traders’ discipline can help.

    Ever since I (Nick) started on Wall Street in the mid 1980s, there has been a bright line between “traders” and “investors.” The stereotypes for each tell the story. Traders are momentum-chasing volatility addicts. Investors buy and hold no matter what the tape is saying.

    I have worked for and with individuals who have made billions of dollars for themselves and their investors following one or the other approach, so I am not much of a fan of these labels. Many people point to the fact that Warren Buffett is wealthier than any trader as proof that investing beats trading. Fair enough, but as Barron’s recently pointed out, Buffett made 90 percent of his money after age 65. His edge in the global wealth league tables is just as much about longevity as investment acumen. He has been blessed with both.

    One reason professional traders and investors are so different is due to their training. This was the approach when I got to SAC Capital in 1999:

    • You start with a base of capital, say $1 million.
    • Your goal is to make $1,000/day, every day, on that capital. This works out to a 25 percent annual return. Not a crazy amount, but well more than the S&P’s typical 7-10 percent return. And when I say “every day” that is exactly what I mean. Every day, no excuses.
    • Once you can reliably make $1,000/day for 4-6 weeks you up the goal to, say, $1,500/day.
    • If you stumble at $1,500/day, you go back to the $1,000/day goal. Once you make that for a few weeks, you try again to hit the higher target. The process then repeats. Eventually, you add more capital to the original $1 mm base and set ever-higher goals.

    This is nothing like the typical training for an “investor”. The usual path for them combines education (MBA or CFA preferred, as the help wanted ads often say) and on the job training. Many investors start as industry analysts, then run a sector portfolio, and finally a diversified book. I did the first part of this path myself, getting an MBA and then working as an industry analyst at Credit Suisse for 9 years. Only then did I go to SAC and undergo the training described above.

    I can tell you from those first-hand experiences that the difference in training leads to very different decision-making pathways for “traders” versus “investors”. A few simple examples:

    • Show a trader a stock making a 52-week low, and they’ll be inclined to short it. The investor, on the other hand, will be more inclined to want to buy it. Most stocks do not go to zero, they reason, so a “cheaper” stock may have better future return prospects.
    • If a trader owns a stock that drops 3-5 percent in a day, they will almost certainly sell it right there. That loss is a hit against their daily profit target, so selling clears the mental decks and provides the capital to focus on making that money back in other names. The investor is more likely to think that “the market has it wrong”. See Cathie Wood’s endless defense of her major holdings in the ARKK ETF for a case study in that way of thinking.
    • Traders focus on high conviction ideas – those that have the best chance to deliver their daily profit goal. They don’t need to have a perspective on anything else. Investors face a more wide-ranging challenge. Most are broadly diversified, which means they need a high level of competence across a wide array of asset classes, geographic regions, sectors, and stocks.

    The point here is not that trading is “better”, but that in challenging markets even the longest-term investor can use a trader’s discipline to achieve better results. A few examples:

    • As we have said many times of late, avoid holding on to new 52-week lows and certainly be very careful considering any stock or ETF that has recently made one. Wait for the price to level out for 1-3 months at least. Cheap stocks and sectors always get cheaper when markets are resetting valuations lower.
    • Scale risk exposure based on the CBOE VIX Index. When it gets to 36 (or, even better, 44 or 52) consider adding some risk. When it gets closer to 20, lighten up.
    • Focus only on future returns. Even the most novice trader does this by keeping to their $1,000/day goal. The hardest thing about making good investment decisions in a bear market is acknowledging prior mistakes, selling, and moving on.
    • Stocks don’t love you back. That’s an old saying among traders, and it is equally true for long term investors. It is easy, but wrong, to think that a stock or sector will work just because you’ve done a lot of work on it or think the CEO is a genius.

    The bottom line here is that trading emphasizes the importance of goal setting, following a disciplined process and embracing intellectual honesty – all essential habits for sensible investing in volatile markets. Traders may come across as less intelligent than investors, but their approach acknowledges that managing capital is ultimately about managing your time and emotions. “Investing”, grounded in academic theory, skips over those all-too-human considerations. That’s fine in a bull market, but in a bear market a more realistic approach is essential.

    Final thought: if you read these comments as a sign we think US/global equity markets have further to fall, you are correct. The good news, after a fashion, is that there will be some fantastic money to be made when asset prices turn around. The only goal now for investors should be to get to that point with a minimum of incremental damage to their portfolios.

    Tyler Durden
    Sat, 05/07/2022 – 22:10

  • Top Tractor-Maker Warns Ransomware Attack Has "Adversely Affected" Production
    Top Tractor-Maker Warns Ransomware Attack Has “Adversely Affected” Production

    One of the world’s top manufacturers and distributors of agricultural equipment announced Thursday that a ransomware attack impacted operations. 

    Duluth, Georgia-based AGCO Corp. released a statement that some of its manufacturing plants have slowed production for several days because of a ransomware attack. 

    “AGCO is still investigating the extent of the attack, but it is anticipated that its business operations will be adversely affected for several days and potentially longer to fully resume all services depending upon how quickly the Company is able to repair its systems,” AGCO’s statement read. 

    AGCO has an extensive portfolio of machines and equipment manufacturers for farming. Some brands include Massey Ferguson, Valtra, Challenger, and Fendt. Its brands are sold around the world. 

    The company added this cautionary statement: 

    Our expectations with regard to resolving the issues are forward-looking statements, and actual results could be materially different due to a number of factors, including our ability to successfully reinstall software and restore IT operations at the effected sites.

    The ransomware attack comes only a few weeks after the FBI’s Cyber Division warned about increased cyber-attack threats on agricultural companies and comes after a curious string of fires and explosions that damaged major US food processing plants.

    Tyler Durden
    Sat, 05/07/2022 – 21:35

  • 'Criminal, Inhumane And Unethical': EU Passes Resolution Condemning Chinese Regime’s Forced Organ Harvesting
    ‘Criminal, Inhumane And Unethical’: EU Passes Resolution Condemning Chinese Regime’s Forced Organ Harvesting

    Authored by Eva Fu via The Epoch Times (emphasis ours),

    The European Parliament has adopted a resolution voicing “serious concerns” about the Chinese regime’s ongoing forced organ harvesting, while calling on its member states to publicly condemn the abuse.

    “Parliament expresses serious concern about reports of persistent, systematic, inhumane and state-sanctioned organ harvesting from prisoners in China, and more specifically from Falun Gong practitioners,” reads a statement dated May 5 following the adoption of the text.

    Falun Gong practitioners participate in a parade to commemorate the 23rd anniversary of the April 25th peaceful appeal of 10,000 Falun Gong practitioners in Beijing, in Flushing, N.Y., on April 23, 2022. (Larry Dye/The Epoch Times)

    The Parliament members “consider that the practice of organ harvesting from living prisoners on death row and prisoners of conscience in China may amount to crimes against humanity,” it reads.

    A 2019 independent panel, called the China Tribunal, found that the Chinese regime had for years been killing prisoners of conscience for their organs for transplant on a substantial scale, a practice that’s still going on. It concluded that such actions amounted to crimes against humanity and that the main victims were detained Falun Gong practitioners.

    Falun Gong is a spiritual practice consisting of meditative exercises and moral teachings based on the principles of truthfulness, compassion, and tolerance. In 1999, adherents became the target of a sweeping persecution campaign by Beijing after the practice’s vast popularity was perceived as a threat to the communist regime’s authoritarian control on society. Millions of detained Falun Gong practitioners around the country were essentially turned into a large involuntary organ bank for the Chinese regime’s hungry organ transplant system.

    Falun Gong practitioners participate in a parade to commemorate the 23rd anniversary of the April 25th peaceful appeal of 10,000 Falun Gong practitioners in Beijing, in Flushing, N.Y., on April 23, 2022. (Chung I Ho/The Epoch Times)

    Since reports of forced organ harvesting first emerged in the mid-2000s, the Chinese regime has repeatedly denied the allegations but has also refused outside access to medical and detention facilities to verify its claims.

    The EU resolution noted that the regime refused to testify before the China Tribunal.

    The resolution further denounced the lack of independent oversight on whether detainees had given consent to organ donation, and the Chinese authorities’ silence on reports that families were being prevented from claiming the bodies of loved ones who died in detention.

    The four-page resolution, adopted by a show of hands on May 5, was the first public statement from the European Union on the issue since 2013, when the European Parliament first put Beijing on notice that the practice of forced organ harvesting was unacceptable.

    Besides condemning the abuse in public, the resolution said, the EU and its member states should raise the organ harvesting issue “at every Human Rights Dialogue,” raise the issue in engaging with partners, and take necessary actions to prevent their citizens from participating in transplant tourism to China. Relevant institutions, it said, should reconsider their collaboration with Chinese counterparts on transplant medicine, research, and training.

    Human Rights ‘Not an Option’

    The passage of the resolution came three days ahead of U.N. High Commissioner for Human Rights Michelle Bachelet’s planned trip to China, and the European Parliament in the resolution urged the human rights body to investigate the issue during the visit.

    EU’s top foreign policy official Josep Borrell a day earlier highlighted the issue during a parliamentary debate, saying the 27-member bloc “condemns in the strongest possible terms the criminal, inhumane and unethical practice of forced organ harvesting.”

    “Respect for human rights is not an option, but a requirement in all areas, including in the challenging medical and ethical area of organ donation and transplantation,” he said in prepared remarks delivered by Jutta Urpilainen, commissioner for international partnerships, on his behalf.

    An April medical study published in the American Journal of Transplantation identified dozens of Chinese publications where physicians took out the hearts and lungs from people for transplant without following the standard protocol for establishing brain death. This effectively meant that patients were killed for their organs and that the hundreds of medical professionals involved were acting as “executioners” for the state, the authors said.

    Borrell’s speech was applauded by U.S. Rep. Gus Bilirakis (R-Fla.), who serves as the co-chairman of the International Religious Freedom Congressional Caucus.

    “China’s abominable human rights record, including the inhumane practice of organ harvesting of ethnic and religious minorities, will no longer be swept under the rug,” he told The Epoch Times. “It is imperative that the United States and her allies send a strong and unwavering message in defense of basic human rights and protections for all people.”

    Others believe the measure is still far from solving the problem.

    Torsten Trey, executive director of the medical ethics advocacy group Doctors Against Forced Organ Harvesting, noted the international community’s prolonged silence on the matter.

    “Three years have passed since the China Tribunal concluded that China is killing people for their organs. For over two decades China has persecuted Falun Gong practitioners and probably killed over a million of them, probably more than [the fatalities] in Ukraine up to today,” he told The Epoch Times.

    Compared to the world’s response to the war in Ukraine, the resolution has been “a feeble call to a communist regime that backs up Russia in its aggression,” he said.

    “We need actions on China, not calls. China heard these calls for two decades and ignored them,” he said.

    “At this point, Europe is being challenged by the CCP: Will Europe make basic human rights and values a non-negotiable condition for partnership, or ignore the gruesome practice of forced organ harvesting from living Falun Gong practitioners in China?”

    Tyler Durden
    Sat, 05/07/2022 – 21:00

  • Used Car Prices Are Crashing At A Near Record Pace
    Used Car Prices Are Crashing At A Near Record Pace

    It’s been a challenging year for consumers. And with the highest inflation in four decades, some are paring back spending on big-ticket items, such as used automobiles. After jumping 90%, since the start of the virus pandemic, used car prices are cooling as buyers balk due to affordability issues stemming from soaring interest rates. 

    Outside of the COVID shock and Great Financial Crisis of 2008/09, the Manheim Used Vehicle Value Index, a wholesale tracker of used car prices, printed the most significant monthly decline in terms of rate of change averaged out over three months in April at 6.4%. It didn’t beat the April 2020 print of -11.2% nor December 2008 of -11.5%, but those two periods were in full-blown financial crises.

    Currently, the Federal Reserve and the Biden administration reassure everyone the economy is strong, and there’s nothing to worry about. The Fed routinely says monetary tightening will create a soft-landing, similar to the mid-90s. However, tightening financial conditions could only spark trouble for an economy based 70% on consumption and driven by access to cheap credit. 

    The cooling in the used car market could suggest a broader economic slowdown is ahead.

    Take a look at the used car market year-over-year growth rates versus used car auto loan rates. A jump in rates has dampened upward price pressure as fewer buyers can afford cars. 

    The rate surge was evident in April as used car sales slowed down precipitously, down 13% compared with March. 

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    Readers may recall the first used car price stall warning printed in early February. In a piece titled “Used Car Prices Arrive At Yet Another Major Inflection Point,” it was evident that the loss in momentum in used car prices was a grave concern. By mid-March, used car prices slid some more as supply chain congestion peaked and was believed to soon increase the supply of new cars. Then by early April, used car prices continued to slump as we asked the question: “Are Used Car Prices About To Peak For Real This Time?”

    Some have pointed out that used car prices via the CarGurus index have already rebounded and suggest Manheim could be a laggard indicator. 

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    However, those in the industry have more confidence in Manheim than CarGurus. 

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    Consumers have likely tightened their belts in early May. This comes as the Fed is cooling off hot inflation. New and used vehicles account for 9.2% of consumer prices. And if the Fed wants to find the neutral rate by the midterms, interest rates will go higher and inflict more downward pressure on used car prices, thus helping to extinguish the inflation fire it sparked two years ago by printing trillions of dollars. 

    Tyler Durden
    Sat, 05/07/2022 – 20:33

  • Visualizing The World's Largest Economies Since 1970
    Visualizing The World’s Largest Economies Since 1970

    Global GDP has grown massively over the last 50 years, but not all countries experienced this economic growth equally.

    In 1970, the world’s nominal GDP was just $3.4 trillion. Fast forward a few decades and it had reached $85.3 trillion by 2020. And thanks to shifting dynamics, such as industrialization and the rise and fall of political regimes, the world’s largest economies driving this global growth have changed over time.

    As Visual Capitalist’s Jenna Ross details in the slides below, using graphics from Ruben Berge Mathisen, show the distribution of global GDP among countries in 1970, 1995, and 2020.

    Methodology

    Using data from the United Nations, Mathisen collected nominal GDP in U.S. dollars for each country. He then determined each country’s GDP as a share of global GDP and sized each graphic’s bubbles accordingly.

    The bubbles were placed according to country latitude and longitude coordinates, but Mathisen programmed the bubbles so that they wouldn’t overlap with each other. For this reason, some countries are slightly displaced from their exact locations on a map.

    1970: USSR as a Major Player

    In 1970, the U.S. accounted for the largest share of global GDP, making up nearly one-third of the world economy. The table below shows the top 10 economies in 1970.

    Then a global superpower, the former Union of Soviet Socialist Republics (USSR) came in second place on the list of the world’s largest economies.

    In the years leading up to 1970, the USSR had seen impressive GDP growth largely due to adopting Western technologies that increased productivity. However, the USSR’s economy began to stagnate in the ‘70s, and eventually collapsed in 1991.

    On the other side, Germany (including both West and East Germany) was the third-largest economy in 1970 after rising from economic ruin following World War II. West Germany’s “Economic Miracle” is largely credited to the introduction of a new currency to replace the Riechsmark, large tax cuts brought in to spur investment, and the removal of price controls.

    1995: Japan Begins to Slow Down

    By 1995, the U.S. still held the top spot on the world’s largest economies list, but the country’s share of global GDP had shrunk.

    Meanwhile, Japan had leapfrogged into second place and nearly tripled its share of the global economy compared to 1970. A number of factors played into Japan’s economic success:

    • Large business groups known as keiretsu used their connections to undercut rivals

    • Fierce competition between companies encouraged innovation

    • Tax breaks and cheap credit stimulated investment

    • The well-educated workforce was willing to work extremely long hours

    But around 1990, the country’s economy had actually begun to slow down. Japan’s decreasing labor force participation rate and diminishing returns from higher education both could have played a role.

    2020: The World’s Largest Economies Shift Again

    In 2020, the United States continued to hold onto the number one spot among the world’s largest economies. However, Japan’s slowdown created a rare opportunity for a new powerhouse to emerge: China.

    China’s economy saw incredible growth following economic reforms in 1978. The reforms encouraged the formation of private businesses, liberalized foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce. With profit incentives introduced to private businesses, productivity increased.

    China was also positioned as a cheap manufacturing hub for multinational corporations. Since rising into contention, the country has become the world’s largest exporter.

    India held the title of the sixth largest economy in 2020. Similar to China, the country’s growth came from relaxed economic restrictions, and it has seen particularly strong growth within the service sector, including telecommunications, IT, and software.

    With dynamics shifting, which countries will be on the leaderboard in another 25 years?

    Tyler Durden
    Sat, 05/07/2022 – 20:25

  • FDA Investigating Reports Of COVID Relapses Following Use Of Pfizer’s Pill
    FDA Investigating Reports Of COVID Relapses Following Use Of Pfizer’s Pill

    Authored by Zachary Stieber via The Epoch Times (emphasis ours),

    The U.S. Food and Drug Administration (FDA) is investigating reports of relapses among people who took Pfizer’s COVID-19 pill.

    A Pfizer technician handles the company’s COVID-19 pill, known as Paxlovid, in a file photograph. (Pfizer via AP)

    The FDA “is evaluating the reports of viral load rebound after completing paxlovid treatment and will share recommendations if appropriate,” an agency spokesperson told The Epoch Times in an email.

    In a recent preprint case report, Veterans Affairs researchers reported that a 71-year-old male who took the pill, also known as nirmatrelvir, experienced a “rapid and progressive reduction” in the viral load of SARS-CoV-2, the virus that causes COVID-19.

    But four days after completing the treatment course, there was a “surprising rebound of viral load and symptoms,” they reported.

    The report “highlights the potential for recurrent, symptomatic SARS-CoV-2 replication after successful early treatment” with the pill, the researchers said.

    A number of others have said they saw renewed symptoms after taking paxlovid.

    In the FDA’s evaluation (pdf) of data on paxlovid, which the agency cleared on an emergency basis in 2021, the agency reported that in an ongoing phase 2/3 trial run by Pfizer, several participants “appeared to have a rebound” in viral load five to nine days after completing their treatment courses.

    In light of the new reports, additional analyses of the paxlovid trial data were performed and showed that 1 to 2 percent of the patients had one or more positive COVID-19 tests after testing negative, or an increase in the amount of viral load, after completing the treatment, Dr. John Farley of the FDA said in an interview the agency published on May 4.

    “This finding was observed in patients treated with the drug as well as patients who received placebo, so it is unclear at this point that this is related to drug treatment,” he said, adding that, at this time, the reports “do not change the conclusions from the paxlovid clinical trial which demonstrated a marked reduction in hospitalization and death.”

    As part of the authorization agreement, the FDA said Pfizer must later submit information regarding “prolonged virologic shedding or rebound in clinical trials.”

    Pfizer did not respond to a request for comment.

    The company told Bloomberg that the rate of rebound in its trial was not higher among people who took paxlovid than in people who took a placebo.

    “This suggests the observed increase in viral load is unlikely to be related to paxlovid,” the company said.

    Dr. Clifford Lane, deputy director for clinical research at the National Institute of Allergy and Infectious Diseases, told the outlet that the agency will study the issue, calling it “a priority.”

    Lane and the agency did not return queries.

    The FDA authorized paxlovid for the treatment of mild to moderate COVID-19 in Americans 12 years or older. To get the pill, a person must test positive for COVID-19 and be deemed at high risk of progressing to severe disease.

    Tyler Durden
    Sat, 05/07/2022 – 19:50

  • "Yeah, I'm Smart": Dr. Oz Repeatedly Booed At MAGA Rally Over Abortion Flip-Flop
    “Yeah, I’m Smart”: Dr. Oz Repeatedly Booed At MAGA Rally Over Abortion Flip-Flop

    US Senate candidate from Pennsylvania, Mehmet Oz (who had been living in New Jersey until recently), was savagely booed Friday night at a MAGA rally headlined by former President Donald Trump, who has endorsed Oz.

    The television doctor has come under fire for remarks two years ago calling efforts to overturn Roe v. Wade as a conspiratorial crusade – and was supportive of abortion rights after allegedly witnessing unsafe abortions in medical school.

    “I went to medical school in Philadelphia, and I saw women who had coat-hanger events. And I mean really traumatic events that happened when they were younger, before Roe v. Wade. And many of them were harmed for life,” he said in a 2019 interview.

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    Now, Oz has rebranded – and claims “I’m pro-life, life starts at conception, and that’s how I feel.”

    MAGA ain’t buying it…

    “President Trump endorsed me because he said I was smart, tough and I will never let you down,” Oz argued. “Yeah, I’m smart, but am I tough? That’s the question. He knew it because he checked it out. He did his homework. He wrote that announcement himself. ‘Cause I am smart. ‘Cause I’m tough as nails and I will never let you down.”

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    As Mediaite notes, Trump’s endorsement of Oz ‘has left some conservatives scratching their heads.’

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    Tyler Durden
    Sat, 05/07/2022 – 19:15

  • Poor Rail Service Threatens US Economy, Shippers Tell Federal Regulators
    Poor Rail Service Threatens US Economy, Shippers Tell Federal Regulators

    By Bill Stephens of Trains.com,

    Utilities are worried that the slowdown in coal deliveries could threaten U.S. electricity supply and destabilize the power grid.

    A BNSF train climbs Edelstein Hill near Chillicothe, Ill.

    Chemical producers say erratic rail service has forced them to curtail production of essentials like chlorine used to treat public drinking water systems and the plastics used in medical products.

    And one of the nation’s largest retailers of diesel fuel, renewable diesel, ethanol, and diesel exhaust fluid says Union Pacific’s plan to cut its shipments by 50% will create fuel shortages, bring trucking to a halt, and raise prices at the pump.

    Those were among the shipper concerns raised on Wednesday during a second day of hearings on railroad service problems that have been created by a shortage of train crews.

    “The nation’s supply chains are in a dire situation today because of this. And it’s not getting better, it’s getting worse. And the longer it goes on, the worse it’s going to get,” Ross Corthell, chair of the National Industrial Transportation League’s rail committee, told the Surface Transportation Board.

    He adds: “I don’t want to be doomsday, but it’s critical to our national security at some point in time. We have to be able to move commodities. And it’s becoming more and more challenging every day.”

    Shippers complained about how lengthy delays, erratic service, and missed switches forced them to curtail or halt production or shift some shipments to more expensive trucks. Some products, such as chlorine and coal, have no alternative to rail. “We need to move coal and right now it’s just not happening,” says Katie Mills, a lawyer for the National Mining Association.

    Shameek Konar, CEO of Pilot Travel Centers, says UP’s plan to restrict traffic as a way to ease congestion will squeeze already tight supplies of diesel fuel nationwide, and particularly of renewable diesel fuel required in California.

    UP initially asked Pilot to curtail its shipments by 26%, but subsequently said it would have to reduce its carloads by 50% or face railroad-imposed embargoes, Konar says. Unlike some shippers, who ordered extra cars as cycle times increased on UP, Pilot’s car fleet has held steady since January. UP gave Pilot a week to voluntarily reduce shipments but has not yet issued an embargo, Konar says. Pilot outlined the situation in a filing to the board last week.

    Eric Gehringer, UP’s executive vice president of operations, says the railroad continues to work with customers like Pilot to fully understand their car supply and shipment needs. “We’re still working through those details,” he says. “So we’re not pressuring them, saying you have to be at this level by this date. We’re still in the collaborative phase of ‘How can we do this together?’ ”

    STB steps up criticism

    STB Chairman Martin J. Oberman, who criticized CSX Transportation and Norfolk Southern officials in the first day of hearings, on Wednesday scolded BNSF Railway and UP for not maintaining a cushion of employees to handle a surge in traffic.

    Oberman pointed to June 2021 letters from BNSF CEO Katie Farmer and UP CEO Lance Fritz, who both offered assurances that their railroads would have enough crews to meet rising demand. Instead, both railroads have been holding a rising number of trains per day for a lack of crews and locomotives.

    Railroad officials apologized and said they were working as quickly as possible to hire crews and to pull locomotives out of storage. The railroads attributed their service problems to a combination factors: Traffic that rebounded faster than expected from pandemic lows; tangles in other links in the global supply chain, including ports, trucking, and warehouses; lower than anticipated return of furloughed crew members; higher than expected attrition of train crews and conductor trainees; and the struggle to hire conductors in a tight job market.

    BNSF aims to hire 1,700 conductors this year; UP says it will hire 1,400.

    “As BNSF has made clear in our communication with the board and to our customers, we’re not here to make excuses,” says Matt Garland, BNSF’s vice president of transportation. “Our service is our responsibility and we simply have not met our customer expectations in recent months.”

    BNSF expects service to be choppy over the next 30 days, but within 60 days should start to show signs of improvement as conductor trainees are deployed across the system, Garland told the board.

    UP’s terminals are fluid, he says, but main lines are congested due to excess car inventory. As UP’s customers have put 30,000 more cars into the system as the railroad slowed down, UP has had to run 70 to 90 additional trains per day. And that compounded congestion that feeds on itself by requiring more crews and more locomotives.

    “With the amount of congestion currently on the network, it will likely take us the better half of the year to decongest the network, assuming minimal variability on the network in addition to our customers’ crucial help in taking private cars off the network,” Gehringer says, based on the railroad’s recovery from similar events in 2014, 2017, and 2019.

    Board member Robert Primus was critical of UP’s use of embargoes, which he said are far and away higher than the rest of the industry. And he said it shows UP is penalizing its customers for the railroad’s inability to provide efficient and reliable service.

    Gehringer said UP only resorts to embargoes after lengthy discussions with customers and doesn’t restrict traffic if congestion at a customer facility or local serving is a result of UP service failures.

    BNSF defended its controversial Hi-Viz attendance policy, which is designed to boost crew availability. Crews can still use vacation and personal days, Garland says, and more than 90% of crews have earned points for good attendance since the policy was implemented this year.

    And he disputed labor union claims that the attendance policy has led to a wave of resignations. Attrition is slightly higher than normal, Garland says, but most of the 300 engineers and conductors who have left recently had not worked a shift in the past six months.

    KCS to the rescue?

    With UP and BNSF traffic snarled in the busy Houston terminal, Kansas City Southern has offered use of its crews to move dead trains parked on main lines. KCS, which was singled out for providing good service and was not required to attend the STB hearing, made the offer in a Friday letter to the STB.

    “Union Pacific understands the severity of the situation and is working hard to restore service to the levels our customers expect,” Gehringer says.

    The congestion has hurt the operation of KCS cross-border traffic that relies on long segments of trackage rights, mostly on UP, through Houston and across south Texas. On average, KCS has had to use two crews — instead of one — to move traffic between Beaumont and Kendleton, west of Houston.

    “To help resolve the Houston congestion problems, KCS has actually offered its crews on several occasions to move BNSF and UP trains that lacked crews off the main line so that KCS trains can pass,” John Orr, executive vice president of operations, wrote to the board. “We have also moved our interchange with BNSF for some auto traffic from the Robstown/Corpus Christi area to Rosenberg, just west of Houston, so BNSF has to expend fewer crews from their over-taxed crew base.”

    Orr suggested that the STB might consider granting KCS temporary trackage rights so that it and other railroads could bypass Houston congestion to reach the border at Laredo, Texas.

    “Can we do something to ease the congestion in Houston, at least … as a temporary measure if not a permanent one,” Oberman asked.

    UP and BNSF were unaware of the KCS filing but said they’d follow up. Gehringer was surprised about KCS’s claims, saying UP has spent $250 million in the last two years to extend tracks in its Englewood and Settegast yards in Houston, which are fed by a triple-track main. And Garland said BNSF and UP collaborate well every day to move traffic through Houston.

    Oberman asked the railroads to work together. “Really, you need to pull out all the stops,” he says.

    More PSR criticism

    For a second day, shippers and rail labor criticized the railroads’ implementation of the low-cost Precision Scheduled Railroading operating model and blamed it for cuts in personnel, yards, locomotives, and local service.

    The NIT League’s Corthell disputed railroads’ claims that their PSR implementations had been flawless, noting that local service complaints were brought to the board in 2019 – when CSX and NS both said their service was at record levels of reliability.

    And while railroads have blamed their service failures on crew availability and power, Corthell says the problem did not begin during the pandemic. “The problem started before COVID and it has its roots in the financial model known as Precision Scheduled Railroading, or PSR,” Corthell says. “And yes, I did say financial model.”

    Railroads have reduced local service in pursuit of lower operating ratios, Corthell says, and have continued to miss scheduled switches at an alarming rate. “Precision Scheduled Railroading has proven to be anything but precise at origin and destination,” he says.

    Unions representing mechanical and signal workers told the board that railroads are cannibalizing stored locomotives to keep active units in service and claimed that shop forces, car inspectors, and signal maintainers are spread too thin.

    Many have resigned due to working conditions, they said, including machinists with 10 to 20 years experience who have left Railroad Retirement benefits behind.

    “The problem is not inherently with a scheduled railroad, but a ruthless cost-cutting business model,” says labor lawyer Richard Edelman.

    Canadian Pacific, which like Canadian National and KCS was not required to attend the hearing, defended PSR. James Clements, the railway’s senior vice president of strategic planning and technology transformation, says CP has grown and run well despite disruptions over the past three years.

    The railway’s improved financial performance since adopting PSR in 2012 allowed it to invest in track upgrades, longer sidings, centralized traffic control, and yards that can handle longer trains. “We have built what I would call the foundation upon which you operate the PSR model,” Clements says, noting improvements in the railway’s service and customer satisfaction.

    Primus thanked CP and CN for attending. “You guys weren’t on the firing squad list to be here, and yet you came,” he says. But he was critical of Farmer and Fritz for not attending.

    Tyler Durden
    Sat, 05/07/2022 – 18:40

  • Where The Press Is The Most (And Least) Free
    Where The Press Is The Most (And Least) Free

    Norway, Denmark and Sweden are the countries with the highest scores on this year’s World Press Freedom Index issued by Reporters Without Borders (RSF), with the first two scoring more than 90 points.

    Infographic: The State of World Press Freedom | Statista

    You will find more infographics at Statista

    As Statista’s Florian Zandt details below, while the top-ranked countries have changed somewhat compared to 2013, there’s a lot less movement in the bottom rungs, with one major exception.

    This exception is the Southeast Asian country of Myanmar, which in comparison with 2013 fell by 24 ranks to the fifth-last place. According to RSF, this can largely be attributed to the February 1, 2021 coup deposing State Counsellor of Myanmar Aung San Suu Kyi, in the wake of which the military junta banned a slew of media outlets dedicated to independent reporting from the region.

    Infographic: Where the Press Is the Most and the Least Free | Statista

    You will find more infographics at Statista

    While countries like North Korea, China or Iran have always been among or around the bottom 20 in the past, the number of countries losing the classification of having “good” freedom of press compared to around ten years ago is a cause for concern. In 2013, 25 countries scored between 85 and 100 index points, while in 2022 only eight qualified for this bracket. For example, liberal democracy poster children like the United Kingdom, the United States or Germany only managed to get a “satisfactory” rating.

    This analysis comes with one important caveat: The index only portrays the level of freedom journalists and media workers enjoy in their corresponding countries and doesn’t serve as an indicator of the quality or quantity of the connected outlets.

    The World Press Freedom Index is based on an annual questionnaire conducted among journalists and media workers and covers five indicators across over 100 questions: political context (e.g. media autonomy), legal framework (e.g. ability to work without censorship), economic context (e.g. corruption and favoritism), sociocultural context (e.g. attacks on the press based on gender, class, ethnicity etc.) and safety (e.g. bodily harm).

    Tyler Durden
    Sat, 05/07/2022 – 18:05

  • "AnalF**k69": Hunter Biden's Password Revealed In Whistleblower Tell-All
    “AnalF**k69”: Hunter Biden’s Password Revealed In Whistleblower Tell-All

    A Delaware computer repair shop owner who was driven out of business for blowing the whistle over Hunter Biden’s abandoned laptop has written a book, “American Injustice: My Battle to Expose the Truth, in which he details what went down behind the scenes with the sitting president’s crack-addict son.

    According to an excerpt published by the New York Post, John Paul Mac Isaac was about to close up shop on a Friday night when Hunter Biden ‘stumbled’ in carrying three MacBook Pros.

    “I’m glad you’re still open,” Hunter reportedly said with an “air of entitlement” radiating off of him. “I just came from the cigar bar, and they told me about your shop, but I had to hurry because you close at seven.”

    John Paul Mac Isaac (James Keivom)

    One of the computers, writes Mac Isaac, had a Beau Biden Foundation sticker covering the Apple logo. He proceeded to inspect the computers, when Hunter revealed his password: Analfuck69

    For some reason, maybe misplaced compassion, I decided to check them over then and there. One at a time, I performed a quick inspection of the machines. The 15-inch laptop was a complete write-off. It had extensive liquid damage, and because the drive was soldered to the logic board, data recovery was beyond my capability. (If a Mac can’t power on, you won’t be able to access the drive and get to the data.)

    The 13-inch 2015 MacBook Pro was in slightly better shape. It could boot up, but the keyboard was unresponsive. I pulled out an external keyboard and asked for permission to log in.

    Hunter started laughing.

    “My password is f–ked up. Don’t be offended!” he said, before announcing that it was “analf–k69” or something to that extent. His inebriated condition made it difficult to understand is speech. My eyes widened a bit, and I told him that maybe it would be best if he tried to log in himself.  -via the NY Post

    Mac Isaac then offered to loan Hunter the keyboard so he could perform his own hard drive recovery on one of the other laptops, before discovering porn on what would come to be known as the ‘laptop from hell.’

    “Scrolling down, I started to see files that didn’t align. I started to individually drag and drop the files to the recovery folder. It took only a few files before I noticed pornography appearing in the right column,” he writes.

    “How many of these does he have?” I wondered. It wasn’t just him alone either. Although it looked like he was having a love affair with himself, there also were photos with women. I decided I’d had enough, that I was no longer going to preview the data. I would just go by the file name and hope for the best. And I tried to work out how to keep a straight face when he returned for the recovery data.

    He then writes that there was a file labeled “income.pdf,” which showed what Hunter made in 2013, 2014 and 2015. “Next to each year was the amount of taxable income earned: $833,000+ in 2013, $847,000+ amended to $1,247,000+ in 2014, $2,478,000+ in 2015.” – all while Joe Biden was the sitting Vice President.

    Another note read, “Since you couldn’t have lived on $550,000 a year, you ‘borrowed’ some money from RSB in advance of payments.”

    The whole document seemed shady. I saw that a lot of money had exchanged hands, and it didn’t seem like it had been recorded lawfully. But what did I know? Plus, it was none of my business. It wasn’t my job to judge — just to transfer and verify. So I kept transferring data until I hit a rather large file. The file was about half transferred when the screen went blank. Dammit, the battery had run out.

    Now while all of this is certainly entertaining, what’s it going to take for the DOJ to launch a special counsel – given all the evidence of international dealings and other malarkey involving Joe Biden? If it was Don Jr’s laptop we would have already moved on to impeachment. Then again, we’re sure big tech platforms wouldn’t have interfered in the 2020 election by censoring the original story if the shoe was on the other foot.

    Tyler Durden
    Sat, 05/07/2022 – 17:34

  • Hospital Workers Are Fleeing High Housing Costs: Where Are They Moving?
    Hospital Workers Are Fleeing High Housing Costs: Where Are They Moving?

    By Becker Hospital Reviews

    As hospitals battle workforce shortages, part of their struggles come from workers leaving their jobs at hospitals for various reasons. Some have left because of emotional exhaustion while others have retired early. But there is another factor contributing to the shortages: housing costs. For some hospitals, the issue has become so prevalent they are building employee housing.

    Although the nation’s mover rate has been decreasing for several years, almost half of all movers in 2021 cited housing-related reasons for moving, according to a U.S. Census Bureau report released March 7.

    Mary Broadworth, vice president of human resources at Burlington-based University of Vermont Medical Center, told Becker’s earlier this year there are hurdles when it comes to nurse recruitment and retention, including a lack of housing options because of migration to the state. 

    “We have a housing shortage, pretty much no inventory,” Ms. Broadworth said.

    “And there aren’t a lot of other industries for career advancement in the state. For example, we have someone who moves up [to Vermont] with a partner, the partner is challenged to find a job outside of healthcare.”

    To address this, the University of Vermont Health Network announced in March that it is investing $2.8 million to help finance housing in South Burlington that can be used for its workers. UVM Health Network officials told Becker’s on March 10 that the health system will take a 10-year master lease on 61 new one-, two- and three-bedroom apartments that are being built, then make those units available first to its workers, potentially at a subsidy for eligible employees.

    Where are people moving?

    To determine the top 10 moving destinations for 2021, moving truck rental company Penske examined one-way consumer truck rental reservations made through the company’s website, calls to its 1-800-GO-PENSKE call center and via one-way reservations made at Penske’s more than 2,500 truck rental locations.

    To find the metro areas with the highest and lowest housing costs for a family of four, 24/7 Wall St. analyzed data from the Economic Policy Institute’s 2022 Family Budget Calculator.

    The top 10 moving destinations for 2021, according to the Penske list, which was released May 2: 

    1. Houston

    2. Las Vegas

    3. Phoenix

    4. Charlotte, N.C. 

    5. Denver

    6. San Antonio 

    7. Dallas

    8. Orlando, Fla.

    9. Austin, Texas 

    10. Chicago

    The 10 metro areas where families pay the most for housing and the estimated annual housing costs, according to the 24/7 Wall St. analysis:

    1. San Francisco-Oakland-Berkely, Calif.: $42,636

    2. San Jose-Sunnyvale-Santa Clara, Calif.: $36,612

    3. Santa Cruz-Watsonville, Calif.: $36,252

    4. Santa Maria-Santa Barbara, Calif.: $28,488

    5. Boston-Cambridge-Newton, Mass. and N.H.: $28,032

    6. San Diego-Chula Vista-Carlsbad, Calif.: $25,488

    7. Urban Honolulu, Hawaii: $24,876

    8. Los Angeles-Long Beach-Anaheim, Calif.: $24,696

    9. New York-Newark-Jersey City, N.Y., N.J. and Pa.: $24,636

    10. Napa, Calif.: $24,216

    The 10 metro areas where families pay the least for housing and the estimated annual housing costs, according to the 24/7 Wall St. analysis: 

    1. Jefferson City, Mo.: $8,136

    2. Hickory-Lenoir-Morganton, N.C.: $8,316

    3. Kingsport-Bristol, Tenn. and Va.: $8,412

    4. Dothan, Ala.: $8,472

    5. Decatur, Ala.: $8,496

    6. Gadsden, Ala.: $8,604

    7. Anniston-Oxford, Ala.: $8,676

    8. Johnstown, Pa.: $8,688

    9. Fort Smith, Ark. and Okla.: $8,736

    10. Pine Bluff: Ark.: $8,748

    Tyler Durden
    Sat, 05/07/2022 – 17:30

  • Taliban Orders All Afghan Women To Cover Faces In Public, Taking Country Back To Pre-2001
    Taliban Orders All Afghan Women To Cover Faces In Public, Taking Country Back To Pre-2001

    Over two decades after 9/11 and George W. Bush’s invasion of Afghanistan to overthrow the Taliban – which had at the time involved officials making arguments for the need (among other rationales offered) to secure women’s rights in central Asia – we’ve now come full circle…

    “Afghanistan’s Taliban leadership orders all Afghan women to wear the all-covering burqa in public,” The Associated Press reports based on the new Saturday published ruling.

    Image: Reuters 

    This means women will literally no longer be allowed to show their faces in public. The burqa, which is now required, goes far beyond the hijab which is typical in Sunni Islam and merely covers the hair; instead, the burqa prevents any skin including on the face from being shown at all. This is often accompanied by gloves covering the hands in hardline Islamic communities.

    The ruling, which is a reversion to the strict public code of pre-2001 prior to the US toppling the Taliban and installing its own national coalition (and more “democratic” secular-leaning) leaders, takes things back to the medieval style Islam of the Taliban.

    The man identified as supreme leader of the Islamic Emirate, Mawlawi Hibatullah Akhundzada, confirmed a statement that was issued by the “Vice and Virtue Ministry” (which ironically enough had prior to the Taliban taking the country back last August been known as the “Ministry of Women’s Affairs”), which reads as follows:

    …hijab is an obligation in Islam and that any dress that covers the body can be considered as hijab given that it is not “thin and tight.”

    The ruling said further according to national Tolo News:

    When it comes to the type of the covering or hijab that women will need to wear, the statement says that burka is the best type of hijab/covering “as it is part of Afghan culture and it has been used for ages.” 

    The statement, called “the descriptive and accomplishable plan on legitimate hijab,” also instructs women not to step out of home unless it is necessary, calling it one of the best ways of observing hijab.

    Perhaps all that’s left to do is remind the reader of the immense cost in blood and treasure (for both Americans and Afghanis, as well as allied coalition forces) of the 20+ year long so-called “Global War on Terror”…

    “Since invading Afghanistan in 2001, the United States has spent $2.313 trillion on the war, which includes operations in both Afghanistan and Pakistan,” a previous Brown University study found. “Note that this total does not include funds that the United States government is obligated to spend on lifetime care for American veterans of this war, nor does it include future interest payments on money borrowed to fund the war. This $2.313 trillion spent on Afghanistan is a portion of the total estimated cost of the post-9/11 wars.”

    Tyler Durden
    Sat, 05/07/2022 – 16:55

  • Courts Can't Be "Bullied" Into Delivering Outcomes People Demand: Clarence Thomas
    Courts Can’t Be “Bullied” Into Delivering Outcomes People Demand: Clarence Thomas

    Authored by Tom Ozimek via The Epoch Times,

    U.S. Supreme Court Justice Clarence Thomas on Friday defended judicial independence, arguing that government institutions mustn’t allow themselves to be strong-armed into delivering outcomes that people demand, according to news outlets.

    Thomas made the remarks at a May 6 judicial conference in Atlanta, where he was asked by a moderator to discuss the biggest threats to judicial independence, according to Law360.

    In his response, Thomas decried what he described as an erosion of respect for the high court and made an apparent reference to protests that erupted after the leak of a draft Supreme Court opinion suggesting the court is poised to overturn Roe v. Wade, with major implications for access to abortion.

    He said that at as a society, “we are becoming addicted to wanting particular outcomes, not living with the outcomes we don’t like,” according to Reuters.

    “We can’t be an institution that can be bullied into giving you just the outcomes you want. The events from earlier this week are a symptom of that,” he added.

    A flurry of protests and counter-protests broke out outside the Supreme Court after Politico obtained and published the draft opinion that would uphold a Mississippi law banning abortions after 15 weeks of pregnancy and overturn the Roe v. Wade decision that legalized abortion nationwide.

    The protests have been loud but mostly peaceful, though there have been reports that pro-abortion activists attacked pro-life pastors.

    In a bid to prevent violence, police have now surrounded the Supreme Court with a set of 9-foot high metal barricades, with an officer telling an Epoch Times reporter that the move was “just in case.”

    Speaking at the 11th Circuit Judicial Conference, a gathering of lawyers and judges, Thomas referred several times to the “unfortunate events” of the past week, bemoaning declining respect for institutions and the rule of law.

    “It bodes ill for a free society,” he said, according to The Washington Post.

     It can’t be that institutions “give you only the outcome you want, or can be bullied” into submission.

    Thomas also expressed concern about a “different attitude of the young” towards respect for institutions and the law, suggesting this is on the decline relative to past generations, as cited by the outlet.

    The Supreme Court has confirmed the authenticity of the draft opinion but called it preliminary.

    A ruling in the case is expected in June.

    Tyler Durden
    Sat, 05/07/2022 – 16:20

  • Watch: Autonomous Chinese Drone Swarm Flies Through Forest While Hunting For Humans 
    Watch: Autonomous Chinese Drone Swarm Flies Through Forest While Hunting For Humans 

    A swarm of micro-drones autonomously navigated a dense bamboo forest in China without GPS, able to avoid trees, branches, and brush. The incredible footage suggests these drones could one day be used for search and rescue efforts or even put to sinister use: hunting humans.

    Chinese scientists from Zhejiang University published a report and footage of ten lightweight drones maneuvering at speed through a forest. The technology behind the drones autonomously navigates the best flight path through high-tech sensors. 

    Lead author Xin Zhou wrote in a paper published Wednesday, in the journal Science Robotics, that “multi-robot aerial systems are a symbol of future technology” and cited science fiction films, Prometheus (2012), Ender’s Game (2013), Star Wars: Episode III (2005), and Blade Runner 2049 (2017), where drones or drone swarms were used, which ultimately “inspired” the research team.  

    Here is the drone swarm navigating through the woods. Full video below. 

    In another experiment, Zhou and his team showed the drone swarm could track a human “target” through a field of trees. 

    Commenting on the breakthrough research is Enrica Soria, of the laboratory of intelligent systems at the Swiss Federal Institute of Technology in Lausanne, Switzerland, who told The Telegraph: 

    “This work presents a notable contribution to the robotics community and an important step towards the application of drone swarms beyond the constrained environment of a laboratory, not only for exploration in forests but also for a range of safety-critical missions in human-made environments, such as urban areas with humans and buildings.”

    What’s terrifying is if researchers transfer the technology to Beijing, or even the military, who could use the advanced drone software for hunting humans, if that’s for domestic surveillance purposes, or equip it with weapons for the modern battlefield. 

    About five years ago, the world’s leading AI researchers and humanitarian organizations warned about lethal autonomous weapons systems, or killer robots, that select and kill targets without human control. Future of Life Institute released this dystopic video of “slaughter bots.”

    Tyler Durden
    Sat, 05/07/2022 – 15:45

  • CDC Investigating 109 Mysterious Hepatitis Cases In Children, Including 5 Deaths
    CDC Investigating 109 Mysterious Hepatitis Cases In Children, Including 5 Deaths

    Authored by Jack Phillips via The Epoch Times,

    The U.S. Centers for Disease Control and Prevention (CDC) is investigating more than 100 cases of a mysterious form of hepatitis in children, saying that five have died so far.

    Dr. Jay Butler, the CDC’s deputy director of infectious diseases, said during a briefing said the agency is investigating 109 cases of acute hepatitis, or liver inflammation, in 24 U.S. states and Puerto Rico. The cause of the outbreak is not yet clear, he stressed, adding that about half of the children had adenovirus infections, although Butler said the CDC doesn’t know yet if adenovirus is the actual cause.

    Approximately 90 percent of the children required hospitalization, Butler said. Five have died so far, and more have required liver transplants, he added in the briefing.

    Last month, the CDC issued a nationwide alert after nine acute hepatitis cases were discovered among children in Georgia. Since then, a number of state agencies have reported cases and several deaths.

    Several days ago, the CDC issued a report saying that it found no evidence that COVID-19 vaccines caused the outbreak of hepatitis among children. None of the initial children in Alabama, the agency said, received the vaccine.

    Meanwhile, other countries have reported similar outbreaks of hepatitis among children. On Friday, the UK Health Security Agency reported that (pdf) the country’s case count had risen to 163, dating back to early January, adding that 11 children have received liver transplants so far.

    “Adenovirus remains the most frequently detected potential pathogen. Amongst 163 UK cases, 126 have been tested for adenovirus of which 91 had adenovirus detected,” said the agency.

    “Amongst cases the adenovirus has primarily been detected in blood.”

    UK officials also ruled out the COVID-19 vaccine as a potential cause.

    “There are fewer than five older case-patients recorded as having had a COVID-19 vaccination prior to hepatitis onset,” the report said, adding that most of the impacted children are too young to receive the shot.

    “There is no evidence of a link between COVID-19 vaccination and the acute hepatic syndrome.”

    Earlier this week, the World Health Organization (WHO) told news outlets that there were at least 228 probable cases of hepatitis worldwide in at least 20 countries. That statement came before the CDC’s latest announcement Friday.

    Hepatitis is an inflammation of the liver that can be caused by a viral infection, alcohol, prescription drugs, over-the-counter medications acetaminophen, high doses of certain herbal supplements, toxins, and various medical conditions. Hepatitis viruses, which spread via bodily fluids, can also cause liver inflammation. The hepatitis A, hepatitis B, and hepatitis C viruses are also well known to target the liver.

    Symptoms include abdominal pain—namely in the upper right part of the abdomen right below the ribs—dark-colored urine, light-colored stools, and jaundice, which is the yellowing of the skin and whites of the eyes.

    Tyler Durden
    Sat, 05/07/2022 – 15:10

  • States Sue Biden Administration For 'Pressuring And Colluding' With Big Tech To Censor Free Speech
    States Sue Biden Administration For ‘Pressuring And Colluding’ With Big Tech To Censor Free Speech

    Authored by Katabella Roberts via The Epoch Times (emphasis ours),

    Two Republican-led states have filed a lawsuit against President Joe Biden, White House press secretary Jen Psaki, Dr. Anthony Fauci, and other top administration officials for allegedly pressuring and colluding with social media giants with the aim of censoring and suppressing free speech.

    U.S. President Joe Biden speaks as Assistant to the President & Chair of the Council of Economic Advisers Cecilia Rouse listens during an event at the Roosevelt Room of the White House in Washington, on May 4, 2022. (Alex Wong/Getty Images)

    Missouri Attorney General Eric Schmitt and Louisiana Attorney General Jeff Landry filed the lawsuit in the U.S. District Court for the Western District of Louisiana on April 5, they announced in separate statements on Thursday.

    The attorneys claim that Biden and other government officials worked with big tech companies like Meta, Twitter, and YouTube to censor conversation around matters relating to everything from COVID-19 and election integrity to the Hunter Biden laptop story, doing so under the guise of combating “misinformation.”

    Others named in the lawsuit include Surgeon General Vivek Murthy, Department of Homeland Security Secretary Alejandro Mayorkas, and the executive director of DHS’s newly established “Disinformation Governance Board,” Nina Jankowicz.

    Nina Jankowicz [ZH]

    The Centers for Disease Control and Prevention (CDC), the National Institute of Allergy and Infectious Diseases (NIAID), Department of Health and Human Services (HHS) Secretary Xavier Becerra, and Director of the Cybersecurity and Infrastructure Security Agency Jen Easterly are also listed as defendants.

    In announcing the lawsuit on Thursday, attorney Schmitt stressed the importance of freedom of speech which he said is “paramount to a healthy society,” adding that “discourse, debate, and discussion have been the cornerstone of our country since the Founders codified that right in the Bill of Rights.”

    Schmitt stated that Americans use social media platforms to discuss an array of topics, noting that those topics have more recently, in light of the global COVID-19 pandemic, conversations regarding whether or not face coverings are effective in preventing the virus from spreading and whether the virus origins came from a lab leak in Wuhan, China.

    White House press secretary Jen Psaki speaks during a White House daily press briefing at the James Brady Press Briefing Room at the White House in Washington on May 04, 2022. (Alex Wong/Getty Images)

    Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, responds to questions during a congressional hearing in Washington in a file image. (Greg Nash/Pool via Reuters)

    “In direct contravention to the First Amendment and freedom of speech, the Biden Administration has been engaged in a pernicious campaign to both pressure social media giants to censor and suppress speech and work directly with those platforms to achieve that censorship in a misguided and Orwellian campaign against ‘misinformation,’” said Schmitt, referencing George Orwell’s dystopian novel about a totalitarian state, 1984.

    The lawsuit filed on Thursday specifically accuses Biden and other government officials of working with big tech companies to remove “truthful information related to the lab-leak theory, the efficacy of masks, election integrity, and more,” Schmitt said.

    It also accuses Biden and other officials of “falsely” attacking the Hunter Biden laptop story as “disinformation” along with tech giants like Twitter.

    The story, which was first published by the New York Post in October 2020, detailed the contents of Hunter Biden’s laptop that was abandoned in a Delaware computer repair shop, and which included compromising pictures and emails regarding allegedly corrupt foreign business deals.

    Twitter labeled the story as “potentially harmful” and locked the New York Post’s main Twitter account while simultaneously blocking Twitter users from publishing the link to the story.

    Hunter Biden attends his father Joe Biden’s inauguration as the 46th President of the United States on the West Front of the U.S. Capitol in Washington on Jan. 20, 2021. (Jonathan Ernst/Pool/Reuters)

    The New York Times and the Washington Post have since acknowledged the existence of Hunter Biden’s laptop and emails.

    “Big Tech has become an extension of Biden’s Big Government, and neither are protecting the freedoms of Americans; rather, they are suppressing truth and demonizing those who think differently,” said Attorney General Landry.

    “Ripped from the playbook of Stalin and his ilk, Biden has been colluding with Big Tech to censor free speech and propagandize the masses. We are fighting back to ensure the rule of law and prevent the government from unconstitutional banning, chilling, and stifling of speech.”

    The lawsuit alleges that the federal government violated Missourians’, Louisianans’, and Americans’ First Amendment rights and “coerced, threatened, and pressured social-media platforms to censor disfavored speakers and viewpoints by using threats of adverse government action.”

    As a result of those threats, the lawsuit states, the defendants “are now directly colluding with social-media platforms to censor disfavored speakers and viewpoints, including by pressuring them to censor certain content and speakers, and ‘flagging’ disfavored content and speakers for censorship. These actions violate the First Amendment.”

    The attorneys asked the court to declare that Biden and other defendants violated the First Amendment, exceeded their statutory authority, and to stop the officials from continuing to engage in their “unlawful” conduct.

    Furthermore, they claim that the DHS and HHS officials’ conduct violates the Administrative Procedure Act.

    The Epoch Times has contacted a White House Spokesperson for comment.

    Tyler Durden
    Sat, 05/07/2022 – 14:00

  • Peter Grandich: "Situation Is Beyond Fed's Control" As Recession Unstoppable
    Peter Grandich: “Situation Is Beyond Fed’s Control” As Recession Unstoppable

    Inflation today compared to the 1980s “is a completely different animal this time around, and the situation is so beyond what the Fed can do now,” says Peter Grandich, founder of Peter Grandich & Company.

    The enthusiasm over this week’s Fed rate hike is misrepresented, he tells Stansberry Research’s Daniela Cambone, because Powell and the Fed, “will still be behind the curve, and need to be more aggressive.”

    “Social and political disharmony is at the highest level since the onset of Civil War,” in the U.S., and “with the world suffering economic challenges, “it does not paint a good picture for the future,” he warns.

    General stocks and bonds have had a phenomenal run, but have been overdone on the upside, Grandich states, “and the only market I can risk capital on for capital appreciation is the gold market.”

    He concludes that the mining companies, “especially the majors, are in phenomenal shape,” with the juniors market still facing struggles.

    Watch the full interview here….

    Tyler Durden
    Sat, 05/07/2022 – 13:25

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Today’s News 7th May 2022

  • The Pragmatic American: "Can 'We, The People' Be Trusted?"
    The Pragmatic American: “Can ‘We, The People’ Be Trusted?”

    Authored by Tony Woodlief via RealClearBooks,

    The following essay is excerpted from “I, Citizen: A Blueprint for Reclaiming American Self-Governance“.  This is Part 1 in a symposium that seeks to answer the question posed within this essay: “Can ‘We the People’ be trusted?”

    The Pragmatic American

    “I would rather be governed by the first 2,000 people in the telephone directory than by the Harvard University faculty.”

    – William F. Buckley, Jr.

    While American partisans have altered their policy opinions to match the ideologies of the political class, regular Americans have ignored that marching order. Partisans no longer agree with the Other Side on anything, but average Americans don’t let team allegiance dominate their views. Even most Americans who are registered as Democrats or Republicans still favor some policies desired by majorities in the other party. Average citizens demonstrate greater independence of thought than the ideological conformists so revered by political scientists.

    Political scientists still contend, however, that Americans are in no condition to vote responsibly, let alone engage in self-governance. By evaluating citizens through a unidimensional, ideological lens, they’ve concluded that there’s neither rhyme, reason, nor consistency behind our voting patterns. In the words of Kinder and Kalmoe, “many Americans simply don’t know what they want from government.”

    Is the fact that most Americans don’t flock to either pole on the ideological spectrum proof that their opinions aren’t held together by an underlying value system? Some opinion researchers have pondered the possibility that force-fitting survey answers to the liberal/conservative spectrum incorrectly casts everyday Americans as flighty and unserious. “Perhaps ordinary citizens’ issue preferences lacked ‘constraint,’” speculate Christopher Achen and Larry Bartels, “because they had thoughtfully constructed their own personal political belief systems transcending conventional ideologies and party lines?”

    I, Citizen: A Blueprint for Reclaiming American Self-Governance, Encounter Books

    Despite more than a hint of derision in this question, there is indeed evidence that when we unpack the liberal/conservative continuum, Americans aren’t as scatterbrained as scholars make them out to be. Researchers have separated American opinions about foreign policy and defense, economic policy, and moral issues, and found that we hold somewhat consistent beliefs within those issue areas. The problem for theorists is that, when taken in total, those beliefs don’t fit onto their unidimensional, ideological spectrum. Many Americans, for example, are very religious and oppose abortion, which political scientists would consider conservative. Yet these same people also embrace government aid to minorities and laws that ensure equal access to job opportunities, which are typically considered liberal positions. Likewise, a significant portion of America embraces free enterprise and limited government spending, but also abortion rights and gay adoption. We’re “liberal” on some things, and “conservative” on others, and this drives theorists batty.

    The damning reality about Americans, however, which makes political scientists so confident in their negative assessments, is that our political opinions fluctuate from year to year. One year we favor more aid to minorities; two years later we oppose it. We say the government should provide health insurance, then we say it shouldn’t. We believe the US should intervene less in foreign affairs, then we’re for war. If average Americans did have an underlying value structure informing their policy preferences, goes the reasoning, their survey answers wouldn’t jump around so much. Maybe there’s an ideology that leads someone to be for both free trade and government-provided health insurance, but there’s no ideology that leads a person to favor these policies one year, and disapprove of them the next.

    Before we throw in the towel on the American mind, however, let’s consider a pretend survey question. It asks you to express, on a seven-point scale, your agreement or disagreement with this statement: “People will be better off if they have children.” One means you very strongly disagree; seven means you agree very strongly.

    Before you protest that this question lacks all context (“What people?” “How old are they?” “How many children will they have?”), let me remind you that I didn’t make the survey rules. Here’s a real statement, for example, that the American National Election Studies has used for more than sixty years to evaluate American opinions about foreign policy: “This country would be better off if we just stayed home and did not concern ourselves with problems in other parts of the world.”

    Let’s tease that one out before returning to my hypothetical childbearing question. Imagine a survey respondent in 2002 who has just recently watched President George W. Bush’s “axis of evil” speech. Inspired by the urgent imperative to stop weapons of mass destruction from proliferating in the hands of evildoers, he might feel strongly that the US will be worse off if it doesn’t get more involved overseas. So, he chooses “disagree” on the survey.

    Fast forward to 2012. American soldiers have suffered terrible casualties in Iraq and Afghanistan. Reports of civilian deaths and dismemberments, meanwhile, are staggering. It now appears clear that intelligence failures, even deliberate misstatements, were used to justify our military interventions. No weapons of mass destruction were found, and many of the people we told ourselves we were going to liberate want us out of their countries.

    Our same citizen, finding himself once again contemplating this survey question, has significantly cooled toward military interventions. Maybe he still believes some kind of action was warranted against the people who masterminded the September 11th attacks, but he no longer supports wholesale invasions. So, this time he chooses “agree.”

    This is entirely reasonable logic. One might even argue that this citizen has better judgment — and certainly more humility — than the politicians and bureaucrats who remain resolutely unapologetic for plunging America into a twenty-year war costing $6.5 trillion and more than 7,000 American lives. Yet still this respondent will be judged as inconsistent by pollsters, because he changed his answer to their survey question.

    Now, imagine what might go through someone’s mind when answering my hypothetical survey question about having children. One respondent has just been around parents yelling at their kids in the local park. Another has an unmarried teenage niece with a six-month-old baby. Still another recently watched her daughter win a state championship in wrestling. Do you think this personal context matters? If it does, do you think the very same people, two or four or eight years later, might give significantly different answers that will have been colored by their recent experiences? If so, does this prove they have inconsistent beliefs about children and parenting?

    Of course it doesn’t. Ordinary people, when asked abstract philosophical questions, will draw on recent, concrete experience to inform their answers. Cognitive psychologists Amos Tversky and Daniel Kahneman labeled this tendency “availability bias.” “Perhaps the most obvious demonstration of availability in real life,” they wrote in the academic journal Cognitive Psychology, “is the impact of the fortuitous availability of incidents or scenarios.” Asked to evaluate abstractions, the natural human response is to draw upon experience, and often our most recent experience is the most accessible. You may hold bedrock beliefs that are proven out in the way you live and how you treat others, yet which don’t shine through in opinion surveys that, lacking sufficient context, invite emotion, varied interpretations, and recency to affect your choice of a number on a scale.

    With that said, there is a small group of people whose answers to the parenting question wouldn’t vary: those with such strong convictions about childbearing that context doesn’t matter. Some people have firm religious beliefs, for example, that everyone is called to “be fruitful and multiply,” and that God will work out the circumstances. Others believe the world’s resources are so depleted that it’s imperative for everyone to stop having children before the planet dies.

    People who believe a principle should be adhered to no matter what the cost — ideologues, in other words — are likely to be much more consistent in survey after survey than the rest of us. What’s more, they’ll struggle to imagine how people whose responses depend on context can be anything other than shallow. If they happen to be the scholars constructing the surveys and interpreting the results, well, you get today’s near-consensus about American public opinion, which is that most citizens are shortsighted, biased, forgetful, and relatively unprincipled. Not well-suited, in other words, to govern themselves according to the vision of the American Founders.

    It’s worth noting that a more charitable view of their fellow man might evoke curiosity among scholars about why their surveys indicate citizenship incompetence among a wide swath of Americans. Given a well-established psychological literature revealing the human tendency to explain one’s own behaviors (and inconsistencies) with more grace than one generally affords others, we might be justified in saying to the professors who hold such a damning view of everyday Americans: “Physician, heal thyself.”

    The plain truth is that the machinery of public-opinion surveys, crafted by ideologues, is geared to detect ideology. Ideology is the only mechanism they imagine can drive political opinion in a coherent, predictable direction. There are entire academic treatises on the nature of ideology, its formation and its actualization. The fact that you obey the law, pay your taxes, and participate in the market economy is proof, in some interpretations, that you are embedded in a web of ideology. That discussion is not worth delving into here. The question at hand is whether Americans have shared beliefs that not only lead them to respond to surveys with answers that cut across the academic conceptualization of liberal vs. conservative, but which also explain the variation in their policy preferences over time. 

    Can “We the People” Be Trusted?

    This isn’t just a philosophical question. What’s at stake is the American republic. If most citizens really are indifferent, and the remainder blindly partisan, then the faith of the Founders was mislaid, and we are in no condition to govern ourselves. Far better to leave all those policy decisions to the attentive politicos in DC, provided we can find a way to keep them from plunging us into civil war.

    In short, where we go from here depends on an honest answer to this question: is there something other than capriciousness and low information that drives the political opinions of average Americans? Something that makes their desires for our country trustworthy?

    I believe there is, for two reasons.

    First, public-opinion scholars assess citizens’ knowledge of issues and politics like they’re grading a midterm exam. Political scientist James Gibson points out, for example, that President Richard Nixon repeatedly mangled the name of the man he himself nominated to the Supreme Court, William Rehnquist. Coding standards applied by the American National Election Studies would have required pollsters to record Nixon as not knowing his own Supreme Court nominee. So were real survey respondents, when presented with William Rehnquist’s name, recorded as not knowing who he was if they answered with something like: “head honcho of the Supreme Court.” Using a more reasonable standard of knowledge, Gibson found that 72 percent of responses recorded as wrong were in fact correct. The surveys employed to prove most Americans are ignorant, in other words, appear to be off the mark.

    More importantly, surveys of American beliefs about government focus almost exclusively on policy levers. They ask whether respondents believe government should provide health insurance, and whether it should spend more or less on welfare, public health, education, crime—even space exploration. They ask whether courts should be harsher or more lenient with criminals, and whether more or fewer immigrants should be allowed into the country. This is like asking an average person to diagnose his car trouble from the driver’s seat. He can no more tell you how much welfare spending is adequate than he can determine how much transmission fluid he’s lacking. If you force him to offer diagnoses, he’s going to grasp at impressions. Wasn’t there a grinding sound last week? Didn’t I notice a funny smell?

    Ask him repeatedly over the years, and his answers are going to jump around. All his seeming schizophrenia proves is that he isn’t a mechanic. It doesn’t mean that he has no consistent vision of where he wants his car to go, and how he wants it to get there. Likewise for Americans when it comes to their conceptualizations of government and the common good. Everyday people don’t know how much money government at all levels spends on education, or how much it should spend. This doesn’t mean they lack coherent opinions about what a child’s education ought to look like. 

    Instead of Survey Respondents, Citizens

    Imagine that instead of asking Americans to be government mechanics, we instead asked them to think like citizens. Rather than quiz them regarding what policy levers ought to be pulled, they would be questioned about what outcomes they believed were best for our country. People disagree vehemently about government-provided health insurance, for example, but share a desire to see as many Americans as possible receive the medical care they need. People disagree about whether parents should be allowed to divert public funds to private schools, but share a desire to see every American child receive a suitable education. We’re divided over what levers to pull, but not nearly so divided as the political class when it comes to the ends we want to achieve, because we are far more united in our core values than they are.

    How do I know? Most directly, I have experienced this reality firsthand — as I suspect you have as well — in many conversations with friends, neighbors, relatives, coworkers, and fellow parishioners whose political opinions vary. Beyond one’s own sense from those conversations, hints of an underlying consensus on American values can be found in the same surveys used by scholars to claim American beliefs are incoherent. Occasionally, a question on those broad national surveys reveals — perhaps without meaning to — values and desires of Americans regarding public policy and the common good.

    The American National Election Studies, for example, has asked Americans for decades how they feel about government support for people who need jobs. Between 1956 and 1960, on average 58 percent of Americans said the government should see to it that people who needed jobs should get them. Opposing that goal were 26 percent of respondents, with another 17 percent stating either that they didn’t know or didn’t care. In 1964, however, the percentage of respondents who agreed with this lofty aspiration fell almost by half, to 31 percent. Those who disagreed, meanwhile, rose to 43 percent.

    On the surface, this appears to be another example of American ideological schizophrenia. Either that, or a sizable portion of Americans lost their charitable instincts in four short years. A closer look at the question’s wording, however, reveals that between 1956-1960, Americans were asked to either agree or disagree with this statement:

    The government in Washington ought to see to it that everybody who wants to work can find a job.

    The statement’s wording was altered in 1964, however, replacing a simpler declaration with this version:

    In general, some people feel that the government in Washington should see to it that every person has a job and a good standard of living. Others think the government should just let each person get ahead on his own. Have you been interested enough in this to favor one side over the other?

    This is a very different question, isn’t it? Before, Americans were asked whether they wanted government to help everyone willing to work find a job. The revised question, in contrast, asked whether Americans believed government should provide everyone a job (no mention of willingness to work), and beyond that a good standard of living. The dramatic change in subsequent survey responses doesn’t simply illustrate the sensitivity of surveys to how questions are worded. It illuminates, as demonstrated with greater proof below, a core conviction that informs how everyday Americans think about everything from welfare to immigration, namely that we should help people who are trying to help themselves.

    This is a widespread and stable value that directly affects how Americans feel about welfare, preferential hiring, aid to minorities, immigration, and other policies. The majority of survey questions about these topics, however, pretend this sentiment doesn’t exist. The two most consistently administered and academically rigorous survey batteries in America — the American National Election Studies (University of Michigan) and General Social Survey (University of Chicago) — don’t ask Americans to distinguish between welfare recipients who have one child out of wedlock versus three, or immigrants willing to work versus those who subsist on crime or welfare. Yet these are exactly the considerations, as anyone who’s talked to regular Americans for even a few minutes about these topics can attest, that determine how generous or stingy most Americans will be. Little wonder responses to survey questions about how much we should spend on social services, or how many immigrants we should allow into the country, fluctuate. Lacking context, respondents base their answers on what’s prominent in the news or other media, alongside immediate personal experiences.

    Another effect of the aforementioned change to the wording of the jobs question reveals something else about how Americans respond to surveys. When surveyors altered the wording in 1964, the percentage of respondents who subsequently replied that they either didn’t know or didn’t care rose by more than half, from 17 percent to 26 percent. When the surveyors switched, eight years later, from a Yes/No format to a seven-point scale, the “don’t know” responses fell by half. Forty-two percent of respondents, furthermore, placed themselves in the middle of the scale, choosing a three, four, or five.

    Between 1964-1972, in other words, ANES administrators forced respondents to consider a false choice: either government guarantees everyone a job and a good standard of living, or it leaves people to fend for themselves. Anyone acquainted with everyday life understands there’s a third alternative in which assistance comes from families, churches, and communities. This isn’t an uncommon phenomenon in surveys. Ideologically-minded researchers manufacture false choices, and Americans respond by either opting out of the questions altogether, or placing themselves in the middle of a scale when it’s available, which gets interpreted as mindless moderation borne of ignorance and shallow beliefs. Americans appear schizophrenic to academics on many policy issues because they’re being asked the wrong questions.

    Fortunately, some academics have invested in the more painstaking work of asking Americans what they think about government, public policies, and the common good, and recording what respondents have to say in their own words.

    The findings of these scholars offer a sharp — and encouraging — contrast to the work of pollsters.

    While survey researchers paint a picture of Americans as ignorant and indifferent, scholars who take the time to actually talk with the subjects of these surveys describe people who sound like they’re capable of — and willing to be — the kinds of citizens the American Founders envisioned.

    *  *  *

    Tony Woodlief is Executive Vice President at State Policy Network, a nationwide community that cultivates and supports state-based organizations working on behalf of citizen freedom and self-determination.

    Tyler Durden
    Fri, 05/06/2022 – 23:40

  • President Xi Insists China's COVID Lockdowns Will "Stand The Test Of Time"
    President Xi Insists China’s COVID Lockdowns Will “Stand The Test Of Time”

    Shanghai residents who have been trapped in lockdown conditions that have barely eased over the span of a month-and-a-half were given a sense of false hope on Friday, when Chinese news outlets mistakenly reported that Disneyland in Shanghai was preparing to open with limited capacity.

    https://platform.twitter.com/widgets.js

    Those reports were quickly retracted, and instead, the Politburo doubled down on China’s “COVID zero” policy, while President Xi insisted that the lockdowns would withstand the test of time, and that pledged to combat any attempts to “distort” or “question” the CCP’s heavy handed policies.

    The SCMP reported that this marked the first time that Xi has spoken out in defense of the country’s lockdown in Shanghai.

    Meanwhile, in Beijing, local authorities have closed public transport routes, told people to work from home and ordered mass testing in an effort to stop the capital outflows.

    In a statement issued after the latest meeting of the Politburo Standing Committee, the Politburo insisted that the Chinese people must stand strong in the face of COVID.

    “We must be firm in overcoming thoughts of indifference and self-righteous thinking, and underestimating the epidemic,” a statement issued after the meeting said.

    “We must keep a clear head and unwaveringly adhere to the general policy of dynamic zero-Covid. We must struggle against speech and acts that distort, question or reject our country’s anti-epidemic guidelines and policy.”

    That President Xi has felt the need to directly address the lockdowns is hardly a surprise. As we have noted, the lockdown in China’s financial and economic capital has led to an intense blowback among the public (well, as intense as criticism of the government ever gets in China), with residents complained of food shortages, difficulties in gaining medical treatment and fences being set up outside residential buildings to stop residents leaving.

    Tyler Durden
    Fri, 05/06/2022 – 23:20

  • Adam Kinzinger Executes Neocon Vision For Ukraine
    Adam Kinzinger Executes Neocon Vision For Ukraine

    Authored by Patrick Macfarlane via The Libertarian Institute,

    As the war in Ukraine approaches its tenth week, the steady flow of ominous headlines has grown to a floodwater deluge. Dissenting observers are made to watch, seemingly helpless, as the broader levy of sanity threatens to break, unleashing a torrent of death and destruction across Eastern Europe, and likely, the globe.

    Leading the bad news cycle, on Sunday, May 1, Congressman Adam Kinzinger proposed a new Authorization of Use of Military Force (AUMF) in the U.S. House of Representatives. The legislation, if passed, would allow President Joe Biden to deploy American forces to restore “the territorial integrity of Ukraine” in the event that Russia uses chemical, biological, or nuclear weapons. When Kinzinger announced the legislation on Meet the Press, he stated that he “doesn’t think we need to be using force in Ukraine right now.” However, as Antiwar.com opinion editor Kyle Anzalone ominously noted, in 2002, then-Senator Joe Biden similarly downplayed the danger of war before voting for the 2002 AUMF—under which President George W. Bush later prosecuted the invasion of Iraq.

    If bad Ukraine policy amounts to a downpour, Rep. Adam Kinzinger has been performing a rain dance for years now.

    Kinzinger was elected to the U.S. House of Representatives in 2010. In March 2014, while sitting on the House Foreign Affairs Committee, Kinzinger pledged that the House would back the Obama administration’s efforts in Ukraine. Further, he stated the House would consider legislation calling for increased aid to Ukraine, up to and including adding Georgia and Ukraine into NATO. Kinzinger’s pledge came soon after the conclusion of the 2014 Euromaidan Coup, where the US State Department played an instrumental role in ousting then-president Viktor Yanukovych. By April, 2014, Ukraine would launch a civil war against pro-Russian separatists in Ukraine’s eastern Donbas region.

    In 2016 Kinzinger co-authored H.R. 5094, the Stability and Democracy for Ukraine Act (the STAND for Ukraine Act). On September 21, 2016, the STAND for Ukraine Act passed the U.S. House unanimously by voice vote. It was engineered to “contain, reverse, and deter Russian aggression in Ukraine, to support the sovereignty of Crimea against Russia’s illegal annexation, and to ultimately assist Ukraine’s democratic transition.” The STAND for Ukraine Act cemented sanctions as a permanent fixture of American policy by making it “effectively…impossible to remove certain anti-Russian sanctions unless Crimea is returned to Ukraine.”

    Since Russia’s February 2022 invasion of Ukraine, Kinzinger has repeatedly pushed to escalate a situation that his policy helped to create. On March 3, 2022, he publicly called for a “no-fly zone” over Ukraine to “prevent Russian air attacks.” If enforced, a no-fly zone in Ukraine would see U.S. forces shooting down Russian planes and even attacking targets in Russia.

    Kinzinger’s corresponding press release cited his experience piloting an intelligence aircraft in Iraq as being some sort of qualification for such a daft and dangerous proposition:

    Representative Kinzinger understands what being a hero means…Maybe Congress and President Joe Biden should listen to him. Kinzinger thinks that war with Russia might be inevitable. We would have the advantage now when few people would die. It looks as if we will find out.

    Kinzinger likely wouldn’t state his true credentials for pushing such maniacal Ukrainian policy. Indeed, through his years advocating—near universally—for an aggressive U.S. foreign policy, Kinzinger has been immersed in the neoconservative think-tank circuit.

    https://platform.twitter.com/widgets.js

    On March 24, 2014, Kinzinger joined the American Enterprise Institute (AEI) for a panel discussion involving arch-neoconservative Fredrick Kagan. During the panel, Kinzinger “underlined the…potential dangers associated with leaving [Afghanistan]” in the wake of the Karzai government.

    For all the seven years of U.S. support for the Kabul government between Kinzinger’s 2014 panel appearance at AEI and his April 15, 2021 reprisal, the withdrawal had the same predictable result. In a matter of weeks, the Afghan National Army washed away like water breaking upon stone. The Kabul government disintegrated with it.

    In 2022, nearly nine months after the withdrawal of U.S. troops from Afghanistan, the “potential dangers” Kinzinger foretold have failed to materialize—at least for the American public. Instead, Afghanistan has vanished from the U.S. news cycle. The AEI, who so loudly virtue-signaled for the rights of Afghanistan women, is now silent about the consequences of the twenty-year U.S. war there—except to the extent that it could be used to justify even further intervention. Beyond AEI, on May 26, 2016, Kinzinger attended an event hosted by the ultra-neoconservative Foreign Policy Initiative and The Hudson Institute. He stated:

    Our involvement in NATO is not because we just want to defend Europe out of the goodness of our heart, but because without NATO we never would have been able to drop the Iron Curtain and bring freedom to millions of people and make us safer…Are there challenges? Of course. But that needs to be done in the context of “how do we get NATO reengaged” versus “let’s just get out of the rest of the world. That’s a narcissistic foreign policy.”

    The Foreign Policy Initiative was founded in 2009 by Weekly Standard editor Bill Kristol and Brooking’s Institute Fellow Robert Kagan. In the 1990s, Kristol and Kagan founded the now-infamous Project for a New American Century are largely credited as being architects of the Global War on Terrorism.

    Robert Kagan’s wife, Victoria Nuland, served as assistant secretary of state during the 2014 Euromaidan Coup in Ukraine. In a leaked phone call with the then-U.S. ambassador to Ukraine, Nuland lamented the European Union’s decision to limit its involvement. She then stated “Yats is the guy, he’s got the economic experience,” referring to opposition leader Arseniy Yatsenyuk. The first prime minister of the post-Madian interim government was none other than Arseniy Yatsenyuk. The Hudson Institute is:

    part of a closely-knit group of neoconservative institutes that champion aggressive, Israel-centric U.S. foreign policies. Founded in 1961 by several dyed-in-the-wool Cold Warriors, including Herman Kahn–a one-time RAND nuclear war theorist notorious for his efforts to develop “winnable” nuclear war strategies [emphasis added]. Kinzinger has also spoken at the Atlantic Council, a think tank that has long pushed increasing confrontation between the US and Russia over Ukraine. It is funded, to the tune of millions, by weapons manufacturers, the UAE, the Rockefeller Foundation, Goldman Sachs, Facebook, JP Morgan–Chase, and Palantir.

    While it is unclear exactly how much influence the above-named think tanks have had on Kinzinger’s policy positions, it is clear that Kinzinger has played a starring role in escalating diplomatic tensions between the U.S. and Russia over Ukraine.

    Just as in the Global War on Terror, this time with Kinzinger as their thrall, the same ghouls slither forth from their crypts for another orgy of death. Is our best hope another twenty-year, society-eating slog? Or will the NeoConservatives’ Ukrainian denouement detonate a flash ending?

    Tyler Durden
    Fri, 05/06/2022 – 23:00

  • $50 Million Of Cocaine Found At Nespresso Factory
    $50 Million Of Cocaine Found At Nespresso Factory

    Employees at a Swiss Nespresso factory were shocked after discovering about a half-ton of cocaine in a shipment of coffee beans delivered to the plant from Brazil. 

    According to AFP, workers at the Nespresso plant in Romont, in western Switzerland, notified authorities on Monday after discovering mysterious white powder inside mounds of coffee sacks in shipping containers. 

    Local police seized more than 500 kilos (1,103 pounds) of cocaine from five containers. 

    The shipment originated from Brazil, police said, adding the seized cocaine was 80% pure and had a street value of $50 million (48 million euros). 

    “It appears that all of the drugs were destined for the European market,” police said.

    The Nespresso plant is a subsidiary of the multinational food and drinks processing conglomerate Nestlé. The Romont plant specializes in producing single-serve coffee capsules. 

    Bloomberg’s top commodity expert Javier Blas recently told Joe Weisenthal and Tracy Alloway in an Odd Lots podcast that in physical trading of commodities, such as agricultural, metals, and energy, traders “don’t have to disclose anything.” 

    Several years ago, a much larger shipment of cocaine was seized on a containership owned by JP Morgan Chase. U.S. Customs and Border Protection seized 20 tons from the ship, worth an estimated street value of $1.3 billion. 

    If it’s Nestlé or a JP Morgan ship, drug cartels have somehow tapped large supply chains owned by large Western companies to smuggle drugs into the developed world. 

    Tyler Durden
    Fri, 05/06/2022 – 22:40

  • China Has 'Financial Nuclear Bombs' If West Levies Russia-Style Sanctions, Beijing Warns
    China Has ‘Financial Nuclear Bombs’ If West Levies Russia-Style Sanctions, Beijing Warns

    Multiple analysts at Chinese state-linked think tanks and banks have weighed in on the Biden administration’s recent threats to punish the world’s second-largest economy over China’s refusal to condemn Russia’s war in Ukraine, and amid US charges that it could be helping Moscow evade sanctions, or even quietly resupplying Putin’s military machine (charges which at this point have remained without evidence).

    “It is necessary to speed up the construction and external connection of the cross-border yuan clearing system CIPS … [But] the primary choice is to continue to strengthen cooperation with Swift,” Wang Yongli, a former vice-president with the Bank of China and a former board member for Swift, was cited as saying in a fresh South China Morning Post report this week.

    However, China is taking note and studying its own preparedness and future options in the wake of the US drastic measure of freezing Russia’s central bank assets overseas. On this, Yongli underscored to the SCMP that “The huge foreign exchange reserves are hard-won, and they are China’s ‘financial nuclear bombs’ with a powerful deterrent effect. It must be used properly rather than arbitrarily, and cannot be easily slashed.”

    Beijing file image via Skift

    Officials in Beijing are putting counterparts in Washington on notice – pointing out that “China is no Russia” given China’s immensely larger role in nearly every facet of the global economy. They’ve also said that any potential Taiwan reunification scenario with the mainland would not be like Russia-Ukraine, and yet it’s understood well due to the current crisis and the West’s anti-Russia sanctions constitute a “textbook warning for China”:

    “The expansive economic sanctions that US-led Western countries have imposed on Russia can be seen as a textbook warning for China – on how far [the sanctions] can go,” said He Weiwen, former economic and commercial counsellor at the Chinese consulates in New York and San Francisco.

    The SCMP report lists a number of short and long-term strategies being mulled in a crisis scenario with the West, predicated on geopolitical factors like a showdown over Taiwan.

    For example, “China has been stepping up efforts to diversify its foreign exchange reserve assets in the past two decades, according to data from the State Administration Of Foreign Exchange.” The report recommends, “One countermeasure China can take is to expand its economic and financial opening up to the outside world, and encourage foreign investors to hold more Chinese assets, according to Chinese government advisers.”

    Below are some key sections from the analysis outlining various possible scenarios…

    Unintended Consequences

    “China and the US have a stake in each other, so for the US, China is totally different from Russia. The political calculations will inevitably be restrained by economic conditions.”

    Lu Xiang, a senior fellow with the Chinese Academy of Social Sciences (CASS), also said that if the same sanctions were levied against China, they would have unintended consequences for the nation or global bloc imposing them.

    “The effects of any sanctions are mutual,” Lu said. “We have assets in the US and Europe, and so do they in China.”

    “Some US sanctions will inevitably remain in place, and perhaps more will come, but the unfolding of the sanctions will follow its original pace,” according to Shi Yinhong, an international relations professor at Renmin University and an adviser to the State Council, the country’s cabinet.

    “A sharp and sudden escalation is quite unlikely,” Shi said.

    Playing with Ambiguity

    “The United States is now playing with ambiguity,” a Beijing-based foreign diplomat was quoted as saying. “China also wants to know, clearly, under what specific circumstances it would be sanctioned.”

    Accordingly, the Chinese government, along with state-owned banks and enterprises that have business relations with Russia, have been adopting a very prudent approach since the war began, according to Professor Shi with Renmin University.

    “Such a Western attitude [towards Russian aggression] has probably been fully anticipated by China, so to protect Chinese assets, I think so far, China has been acting very cautiously,” Shi said.

    https://platform.twitter.com/widgets.js

    Slashing Reserves?

    According to the report, “There has been talk inside China of slashing its huge holding of reserves, but experts say this is not feasible, as a sudden change in the volume could have catastrophic consequences in global markets.”

    Wang Yongli explained, “…Of course, this does not rule out China increasing its purchase of gold or other strategic materials, or adjusting the currency and country composition of foreign exchange reserves, to further reduce its US dollar reserves, but we avoid this as much as possible to use it as a means of confrontation with the US.”

    Read the rest of the SCMP report here.

    Tyler Durden
    Fri, 05/06/2022 – 22:00

  • 80 'Suspicious Actors' And 'Material Witnesses' Under Scrutiny By Jan. 6 Defense Attorneys
    80 ‘Suspicious Actors’ And ‘Material Witnesses’ Under Scrutiny By Jan. 6 Defense Attorneys

    Authored by Joseph M. Hanneman via The Epoch Times (emphasis ours),

    Defense attorneys seek to identify and investigate 80 suspicious actors and material witnesses, some of whom allegedly ran an entrapment operation against the Oath Keepers on January 6, 2021, and committed crimes including the removal of security fencing, breaching police lines, attacking officers, and inciting crowds to storm into the Capitol.

    Attorney Brad Geyer seeks information on unidentified “suspicious actors” at the U.S. Capitol on Jan. 6, 2021. (Brad Geyer/Graphic via The Epoch Times)

    In a motion (pdf) and supplement (pdf) filed after 11 p.m. on May 5 in federal court in Washington, attorney Brad Geyer listed 80 people, some of whom he said could be government agents or provocateurs. The people are seen on video operating in a coordinated fashion across the Capitol grounds on January 6, the attorney alleged.

    Geyer’s suggestion of an entrapment scheme will resonate with dozens of January 6 defense attorneys, coming shortly after two men were acquitted of an alleged plot to kidnap Michigan Gov. Gretchen Whitmer (D). There was a hung jury on charges against two other defendants. The jury in that case was allowed to consider FBI entrapment as a defense.

    Geyer, who represents Oath Keepers defendant Kenneth Harrelson, is seeking a court order from U.S. District Judge Amit Mehta compelling federal prosecutors to help identify the individuals and disclose whether they were working for law enforcement or any government agency on January 6. Geyer wrote that the information is exculpatory, which compels the government to produce it. Other Oath Keepers defendants are expected to join in the motion.

    The May 5 filing comes on the heels of an April 12 Oath Keepers motion that alleged at least 20 “assets” from the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) were embedded in the crowds on January 6.

    More than a dozen ‘suspicious actors’ flagged by defense attorneys line up on the east steps of the U.S. Capitol, shortly before they pushed past police and climbed to the Columbus Doors on Jan. 6, 2021. (Attorney Brad Geyer/Screenshot via The Epoch Times)

    According to the new filing, video evidence the defense gained access to only recently shows that some of the 80 people attacked police, other people, and members of the Oath Keepers; entered the Capitol on the west side “with apparent permission or acquiescence of government actors”; opened the Columbus Doors on the east side of the Capitol “from the inside, possibly with even further assistance of government actors”; and deployed “sophisticated crowd-behavior techniques,” orienting themselves between protesters and police.

    Suspicious actors are seen on video “associating, conferring and traveling with others, engaging in behavior to confuse law enforcement through body masking, facial masking, clothing changes, and disorienting skirmishing behavior,” Geyer wrote.

    The suspected people used earpieces, satellite phones, and other communication equipment. “Often it appears that these communications devices do not seem to be affected by capacity restriction or sophisticated jamming that was evident throughout the day,” Geyer wrote.

    “If it can be established that these SAs [suspicious actors] were government agents, this could amount to entrapment defense that will dispose of this 7th indictment prior to trial,” the motion said.

    “If it can be established that SAs, even without established government agency, from the west or elsewhere, were let into the Capitol and/or were assisted in opening the Columbus Doors from the inside—a reasonable inference from video evidence—a reasonable jury might conclude that one or more SAs had government sponsorship,” Geyer wrote.

    Eleven members of the Oath Keepers were charged on January 12 with seditious conspiracy, obstruction of a government proceeding, and other counts. The government alleged the Oathkeepers committed the crimes to prevent the certification of Electoral College votes from the 2020 presidential election.

    Two Oath Keepers defendants of the original 11 accepted deals offered by prosecutors and pleaded guilty to seditious conspiracy and obstruction. Another Oath Keepers member from North Carolina was charged May 4 with the same counts and pleaded guilty on May 5. All three are expected to assist the FBI with its ongoing January 6 investigations.

    Geyer suggested the Oath Keepers who entered the Capitol Rotunda through the famous Columbus Doors atop the east stairs were entrapped by suspicious actors who boxed them in and attempted to push them into the Capitol after the doors were opened from the inside.

    “Prima facie evidence of an entrapment scheme (very possibly without formal government agency) is becoming impossible to ignore on video,” Geyer wrote.

    Video shot by a French television crew, and surveillance footage under court seal raise “significant concerns of informants, influencers, and inciters whose activities are now clearly observable,” said a footnote in the motion.

    Suspicious Examples

    “The now observable behavior suggests the exact kind of specialized training, coordination, logistical support, timing, and common goals and objectives that the government attributes to the Oath Keepers,” Geyer wrote. “Conduct alleged against the Oath Keepers seems to have been perpetrated by others before the Oath Keepers were brought in front of the Columbus Doors.”

    The new video evidence “not only exculpates defendant Harrelson and the Oath Keepers in compelling ways, it also shows a large group of SAs that actually carry out the crimes of which the Oath Keepers are accused and which is the centerpiece of the government’s case,” the motion said.

    The many unidentified individuals in the court filing are referred to by the hashtag nicknames assigned by the Sedition Hunters website.

    “James Dean Wannabe” stood on a column near the Columbus Doors and led “vicious attacks by SAs on police with chemicals and mace,” Geyer wrote.

    As soon as the inner doors to the Rotunda opened, James Dean Wannabe shot inside the door and began violently pulling protesters into the Capitol, the document said. He also helped to trap Oath Keepers member James Dolan into a tight space with a Capitol Police officer, the report alleged. He was later seen on the east steps after changing clothes and removing his hat.

    “Lemony Kickit” and “Lemon Zest,” both known for their colorful hats, appeared at the first and second breach points of the day near Ray Epps, the alleged provocateur who was captured on video on January 5 and 6 imploring protesters to go into the Capitol.

    Video also showed Lemony Kickit and Lemon Zest pushed at police and breached the police line on the east steps before they moved up the stairs to the Columbus Doors.

    Columbus Doors Were Closed

    Videos referenced in Geyer’s motion show that the 17-foot-high, 20,000-pound bronze Columbus Doors were closed when the crowd gathered at the bottom of the steps and then breached the police line. When the crowd reached the top, the fortress-like doors were still shut. It’s not clear when, or why, the doors were opened.

    That significant revelation backs up arguments made in January by attorney Jonathon Moseley, who told prosecutors his client, Kelly Meggs, could not have breached the doors because they are controlled from inside the Capitol.

    “The outer doors cast from solid bronze would require a bazooka, an artillery shell, or C4 military-grade explosives to breach,” Moseley wrote in a letter to federal prosecutors. “That of course did not happen. You would sooner break into a bank vault than to break the bronze outer Columbus Doors.”

    The 17-foot-high bronze Columbus Doors at the U.S. Capitol were closed when protesters and suspicious actors pushed past police on the east steps on Jan. 6, 2021. The 20,000-pound doors can only be opened from inside. (Attorney Brad Geyer/Screenshot via The Epoch Times)

    The towering Columbus Doors that lead into the Rotunda on the east side of the U.S. Capitol are secured by magnetic locks that can only be opened from the inside by using a security code controlled by Capitol Police, Moseley wrote in an eight-page memo in January.

    The two inner doors are secured by magnetic locks and cannot be opened from the outside. Twice within an hour on January 6, suspicious actors opened the inner doors from inside the Rotunda, surveillance video shows.

    According to Geyer’s filing, a large number of suspicious actors controlled the scene directly in front of the Columbus Doors after the giant doors were opened. They chased away regular protesters with pepper spray and moved other actors into place. The Oath Keepers, each of whom was shadowed by at least one suspicious actor, were positioned and coaxed toward the entrance.

    Six to eight suspicious actors attacked police with mace in preparation to breach the entrance, Geyer wrote.

    “The dynamic of the crowd makes this almost invisible or fleeting to almost all publicly available camera angles, so most people in the crowd could not have known these chemical assaults occurred and certainly no one could have known who was standing on the steps which is where the Oath Keepers were positioned at exactly this moment.”

    The net effect is that the Oath Keepers, who had come up the east stairs, were swept into the Capitol with the group of suspicious actors, the document alleged. The actors attacked police, breached the doors, and led a crowd inside the Rotunda.

    Members of the Oath Keepers were flanked and followed into the U.S. Capitol by suspicious actors on Jan. 6, 2021. (Attorney Brad Geyer/Screenshot via The Epoch Times)

    Some of the video evidence referenced in the court motion was redacted from the document because it is part of the more than 14,000 hours of video under a protective court seal.

    The court filing will bring fresh attention to the issue of provocateurs at the U.S. Capitol. Epps, a former Oath Keepers member from Arizona, denies he was working as a government informant on Jan. 5 and 6.

    Federal prosecutors announced earlier this year they would disclose more information about Epps, whose photo was removed from the FBI’s Jan. 6 most-wanted list. He has not been arrested or charged, despite urging crowds to enter the Capitol and being present when police lines were breached by protesters.

    Some of the suspicious actors on Geyer’s list were also seen in the hallway outside the Speaker’s Lobby where Ashli Babbitt was shot at 2:44 p.m. on Jan. 6. There are a number of other unidentified individuals who stood near Babbitt before she tried to climb out of the hallway and was shot and killed by Capitol Police Lt. Michael Byrd.

    Three witnesses to the Babbitt shooting were removed from the FBI’s most-wanted list in April 2021 without explanation. Those men have not been identified or charged.

    Tyler Durden
    Fri, 05/06/2022 – 21:40

  • Americans Prefer Low-Tech Approach To High-Tech Security
    Americans Prefer Low-Tech Approach To High-Tech Security

    With life moving more and more into the digital domain and hybrid work solutions potentially creating more vulnerabilities concerning sensitive data, adequate password security is one of the key concerns for the cybersecurity sector. However, as Statista’s Florian Zandt details below, although programs like password managers and built-in password vaults in browsers are geared towards maximizing security by generating and storing complicated passphrases, 41 percent of U.S. Americans still rely on memorizing techniques to store their passwords.

    Infographic: U.S. Prefers Low-Tech Approach to High-Tech Security | Statista

    You will find more infographics at Statista

    As data from a joint survey of security.org and YouGov shows, an additional 30 percent of respondents claimed to have their passwords written out on paper. While this is technically a safe way to store your passphrases, it’s rarely convenient and can still be a potential attack point when using said notes outside of the confines of your own home. 24 and 23 percent keep their passwords in their browser or a digital note file, respectively, while one fifth of survey participants commit one of the cardinal sins of cybersecurity: Reusing the same few passwords again and again.

    For the 20 percent who use password managers, which are programs that can generate passwords, store them in a digital vault locked behind a master password and enable synchronization across devices, LastPass, Keeper and McAfee True Key are the most popular solutions.

    Following an initiative by chipmaker Intel in 2013, every first Thursday in May is observed as World Password Day. This international observance is meant to underline the importance of using secure and strong passwords to protect users’ data and privacy. These efforts still seem to fall short, though: According to an analysis of a database containing over 275 million passwords by NordPass, the three most common passwords used in 2021 were 123456, 123456789 and 12345.

    Tyler Durden
    Fri, 05/06/2022 – 21:20

  • Financial War Takes A Nasty Turn
    Financial War Takes A Nasty Turn

    Authored by Alasdair Macleod via GoldMoney.com,

    The chasm between Eurasia and the Western defence groupings (NATO, Five-eyes, AUKUS etc.) is widening rapidly. While media commentary focuses on the visible side of the conflict in Ukraine, the economic and financial aspects are what really matter.

    There is an increasing inevitability about it all. China has been riding the inflationist Western tiger for the last forty years and now that it sees the dollar’s debasement accelerating wonders how to get off. Russia perhaps is more advanced in its plans to do without dollars and other Western currencies, hastened by sanctions. Meanwhile, the West is increasingly vulnerable with no apparent alternative to the dollar’s hegemony.

    By imposing sanctions on Russia, the West has effectively lined up its geopolitical opponents into a common cause against an American dollar-dominated faction. Russia happens to be the world’s largest exporters of energy, commodities, and raw materials. And China is the supplier of semi-manufactured and consumer goods to the world. The consequences of the West’s sanctions ignore this vital point.

    In this article, we look at the current state of the world’s financial system and assess where it is headed. It summarises the condition of each of the major actors: the West, China, and Russia, and the increasing urgency for the latter two powers to distance themselves from the West’s impending currency, banking, and financial asset crisis.

    We can begin to see how the financial war will play out.

    The West and its dollar-based pump-and-dump system

    The Chinese have viewed the US’s tactics under which she has ensured her hegemony prevails. It has led to a deep-seated distrust in her relationship with America. And this is how she sees US foreign policy in action.

    Since the end of Bretton Woods in August 1971, for strategic reasons as much as anything else America has successfully continued to dominate the free world. A combination of visible military capability and less visible dollar hegemony defeated the communism of the Soviets and Mao Zedong. Aid to buy off communism in Africa and Latin America was readily available by printing dollars for export, and in the case of Latin America by deploying the US banking system to recycle petrodollars into syndicated loans. In the late seventies, banks in London would receive from Citibank yards-long telexes inviting participation in syndicated loans, typically for $100 million, the purpose of which according to the telex was invariably “to further the purposes of the state.”

    Latin American borrowing from US commercial banks and other creditors increased dramatically during the 1970s. At the commencement of the decade, total Latin American debt from all sources was $29 billion, but by the end of 1978, that number had skyrocketed to $159 billion. And in early-1982, the debt level reached $327 billion.[i] We all knew that some of it was disappearing into the Swiss bank accounts of military generals and politicians of countries like Argentina. Their loyalty to the capitalist world was being bought and it ended predictably with the Latin American debt crisis.

    With consumer price inflation raging, the Fed and other major central banks had to increase interest rates in the late seventies, and the bank credit cycle turned against the Latins. Banks sought to curtail their lending commitments and often (such as with floating-rate notes) they were paying higher coupon rates. In August 1982, Mexico was the first to inform the Fed, the US Treasury, and the IMF that it could no longer service its debt. In all, sixteen Latin American countries rescheduled their debts subsequently as well as eleven LDCs in other parts of the world.

    America assumed the lead in dealing with the problems, acting as “lender of last resort” working with central banks and the IMF. The rump of the problem was covered with Brady Bonds issued between 1990—1991. And as the provider of the currency, it was natural that the Americans gave a pass to their own corporations as part of the recovery process, reorganising investment in production and economic output. So, a Latin American nation would have found that America provided the dollars required to cover the 1970s oil shocks, then withdrew the finance, and ended up controlling swathes of national production.

    That was the pump and dump cycle which informed Chinese military strategists analysing US foreign policy some twenty years later. In 2014, the Chinese leadership was certain the riots in Hong Kong reflected the work of American intelligence agencies. The following is an extract translated from a speech by Major-General Qiao Liang, a leading strategist for the Peoples’ Liberation Army, addressing the Chinese Communist Party’s Central Committee in 2015:

    “Since the Diaoyu Islands conflict and the Huangyan Island conflict, incidents have kept popping up around China, including the confrontation over China’s 981 oil rigs with Vietnam and Hong Kong’s “Occupy Central” event. Can they still be viewed as simply accidental?

    I accompanied General Liu Yazhou, the Political Commissar of the National Defence University, to visit Hong Kong in May 2014. At that time, we heard that the “Occupy Central” movement was being planned and could take place by end of the month. However, it didn’t happen in May, June, July, or August.

    What happened? What were they waiting for?

    Let’s look at another timetable: the U.S. Federal Reserve’s exit from the Quantitative Easing (QE) policy. The U.S. said it would stop QE at the beginning of 2014. But it stayed with the QE policy in April, May, June, July, and August. As long as it was in QE, it kept overprinting dollars and the dollar’s price couldn’t go up. Thus, Hong Kong’s “Occupy Central” should not happen either.

    At the end of September, the Federal Reserve announced the U.S. would exit from QE. The dollar started going up. Then Hong Kong’s “Occupy Central” broke out in early October.

    Actually, the Diaoyu Islands, Huangyan Island, the 981 rigs, and Hong Kong’s “Occupy Central” movement were all bombs. The successful explosion of any one of them would lead to a regional crisis or a worsened investment environment around China. That would force the withdrawal of a large amount of investment from this region, which would then return to the U.S.”

    For the Chinese, there was and still is no doubt that America was out to destroy China and stood ready to pick up the pieces, just as it had done to Latin America, and South-East Asia in the Asian crisis in 1997. Events since “Occupy Central” will have only confirmed that view and explains why the Chinese dealt with the Hong Kong problem the way they did, when President Trump mounted a second attempt to derail Hong Kong, with the apparent objective to prevent global capital flows entering China through Shanghai Connect.

    For the Americans the world is slipping out of control. They have had expensive wars in the Middle East, with nothing to show for it other than waves of displaced refugees. For them, Syria was a defeat, even though that was just a proxy war. And finally, they had to give up on Afghanistan. For her opponents, America has lost hegemonic control in Eurasia and if given sufficient push can be removed from the European mainland entirely. Undoubtedly, that is now Russia’s objective. But there are signs that it is now China’s as well, in which case they will have jointly obtained control of the Eurasian land mass.

    Financial crisis facing the dollar

    The geopolitics between America and the two great Asian states have been clear for all of us to see. Less obvious has been the crisis facing Western nations. Exacerbated by American-led sanctions against Russia, producer prices and consumer prices are not only rising, but are likely to continue to do so. In particular, the currency and credit inflation of not only the dollar, but also the yen, euro, pound, and other motley fiat currencies have provided the liquidity to drive prices of commodities, producer prices and consumer prices even higher. In the US, reverse repos which absorb excess liquidity currently total nearly $2 trillion. And the higher interest rates go, other things being equal the higher this balance of excess currency no one wants will rise.

    And rise they will. The strains are most obvious in the yen and the euro, two currencies whose central banks have their interest rates stuck below the zero bound. They refuse to raise them, and their currencies are collapsing instead. But when you see the ECB’s deposit rate at minus 0.5%, producer prices for Germany rising at an annualised rate of over 30%, and consumer prices already rising at 7.5% and sure to go higher, you know they will all go much, much higher.

    Like the Bank of Japan, the ECB and its national central banks through quantitative easing have assembled substantial portfolios of bonds, which with rising interest rates will generate losses which will drive them rapidly into insolvency. Furthermore, the two most highly leveraged commercial banking systems are the Eurozone’s and Japan’s with assets to equity ratios for the G-SIBs of over twenty times. What this means is that less than a 5% fall in the value of its assets will bankrupt the average G-SIB bank.

    It is no wonder that foreign depositors in these banking systems are taking fright. Not only are they being robbed through inflation, but they can see the day when the bank which has their deposits might be bailed in. And worse still, any investment in financial assets during a sharply rising interest environment will rapidly lose value.

    For now, the dollar is seen as a haven from currencies on negative yields. And in the Western world, the dollar as the reserve currency is seen as offering safety. But this safety is an accounting fallacy which supposes that all currency volatility is in the other fiat currencies, and not the dollar. Not only do foreigners already own dollar-denominated financial assets and bank deposits totalling over $33 trillion, but rising bond yields will prick the dollar’s financial asset bubble wiping out much of it.

    In other words, there are currently winners and losers in currency markets, but everyone will lose in bond and equity markets. Add into the mix counterparty and systemic risks from the Eurozone and Japan, and we can say with increasing certainty that the era of financialisation, which commenced in the 1980s, is ending.

    This is a very serious situation. Bank credit has become increasingly secured on non-productive assets, whose value is wholly dependent on low and falling interest rates. In turn, through the financial engineering of shadow banks, securities are secured on yet more securities. The $610 trillion of OTC derivatives will only provide protection against risk if the counterparties providing it do not fail. The extent to which real assets are secured on bank credit (i.e., mortgages) will also undermine their values.

    Clearly, central banks in conjunction with their governments will have no option but to rescue their entire financial systems, which involves yet more central bank credit being provided on even greater scales than seen over covid, supply chain chaos, and the provision of credit to pay for higher food and energy prices. It must be unlimited.

    We should be in no doubt that this accelerating danger is at the top of the agenda for anyone who understands what is happening — which particularly refers to Russia and China.

    Russia’s aggressive stance

    There can be little doubt that Putin’s aggression in Ukraine was triggered by Ukraine’s expressed desire to join NATO and America’s seeming acquiescence. A similar situation had arisen over Georgia, which in 2008 triggered a rapid response from Putin. His objective now is to get America out of Europe’s defence system, which would be the end of NATO. Consider the following:

    • America’s military campaigns on the Eurasian continent have all failed, and Biden’s withdrawal from Afghanistan was the final defeat.

    • The EU is planning its own army. Being an army run by committee it will lack focus and be less of a threat than NATO. This evolution into a NATO replacement should be encouraged.

    • As the largest supplier of energy to the EU, Russia can apply maximum pressure to speed up the political process.

    The most important commodity for the EU is energy. And through EU policies, which have been to stop producing carbon-based energy and to import it instead, the EU has become dependent on Russian oil, natural gas, and coal. And by emasculating Ukraine’s production, Putin is putting further pressure on the EU with respect to food and fertiliser, which will become increasingly apparent over the course of the summer.

    For now, the EU is toeing the American line, with Brussels instructing member states to stop importing Russian oil from the end of this year. But already, it is reported that Hungary and Slovakia are prepared to buy Russian oil and pay in roubles. And it is likely that while other EU governments will avoid direct contractual relationships with Russia, ways round the problem indirectly are being pursued.

    A sticking point for EU governments is having to pay in roubles. Otherwise, the solution is simple: non-Russian, non-EU banks can create a Eurorouble market overnight, creating rouble bank credit as needed. All that such a bank requires is access to rouble liquidity to manage a balance sheet denominated in roubles. The obvious providers of rouble credit are China’s state-controlled megabanks. And we can be reasonably sure that at his meeting with President Xi on 4 February, not only would the intention to invade Ukraine have been discusseded, but the role of China’s banks in providing roubles for the “unfriendlies” (NATO and its supporters) in the event of Western sanctions against Russia will have been as well.

    The point is that Russia and China have mutual geopolitical objectives, and what might have come as a surprise to the West was most likely agreed between them in advance.

    The recovery in the rouble from the initial hit to an intraday low of 150 to the dollar has taken it to 64 at the time of writing. There are two factors behind this recovery. The most important is Putin’s announcement that the unfriendlies will have to pay for energy in roubles. But there was a subsidiary announcement that the Russian central bank would be buying gold. Notionally, this was to ensure that Russian banks providing finance to gold mines could gold and other related assets as collateral. But the central bank had stopped buying gold and accumulated the unfriendlies currencies in its reserves instead. This was taken by senior figures in Putin’s administration as evidence that the highly regarded Governor, Elvira Nabiullina, had been captured by the West’s BIS-led banking system.

    Russia has now realised that foreign exchange reserves which can be blocked by the issuers are valueless as reserves in a crisis, and that there is no point in having them. Only gold, which has no counterparty risk can discharge this role. And it is a lesson not lost on other central banks either, both in Asia and elsewhere.

    But this sets the rouble onto a different course from the unbacked fiat currencies in the West. This is deliberate, because while rising interest rates will lead to a combined currency, banking, and financial asset crisis in the West, it is a priority of the greatest importance for Russia to protect herself from these developments.

    A new backing for the rouble

    Russia is determined to protect herself from a dollar currency collapse. So far as Russia is concerned, this collapse will be reflected in rising dollar prices for her exports. And only last week, one of Putin’s senior advisors, Nikolai Patrushev, confirmed in an interview with Rossiyskaya Gazeta that plans to link the rouble to commodities are now being considered. If this plan goes ahead, the intention must be for the rouble to be considered a commodity substitute on the foreign exchanges, and its protection against a falling dollar will be secured.

    We are already seeing the rouble trending higher, with it at 64 to the dollar yesterday. Figure 1 below shows its progress, in the dollar-value of a rouble.

    Keynesians in the West have misread this situation. They think that the Russian economy is weak and will be destabilised by sanctions. That is not true. Furthermore, they would argue that a currency strengthened by insisting that oil and natural gas are paid for in roubles will push the Russian economy into a depression. But that is only a statistical effect and does not capture true economic progress or the lack of it, which cannot be measured. The fact is that the shops in Russia are well stocked, and fuel is freely available, which is not necessarily the case in the West.

    The advantages for Russia are that as the West’s currencies sink into crisis, the rouble will be protected. Russia will not suffer from the West’s currency crisis, she will still get inflation compensation in commodity prices, and her interest rates will decline while those in the West are soaring. Her balance of trade surplus is already hitting new records.

    There was a report, attributed to Dmitri Peskov, that the Kremlin is considering linking the rouble to gold and the idea is being discussed with Putin. But that’s probably a rehash of the interview that Nickolai Patrushev recorded with Rossiyskaya Gazeta referred to above, whereby Russia is considering fixing the rouble against a wider range of commodities. At this stage, a pure gold standard for the rouble of some sort would have to take the following into account:

    • History has shown that the Americans and the West’s central banks manipulate gold prices through the paper markets. To fix the rouble against a gold standard would hold it a hostage to fortune in this sense. It would be virtually impossible for the West to manipulate the rouble by intervening in this way across a range of commodities.

    • Over long periods of time the prices of commodities in gold grams are stable. For example, the price of oil since 1950 has fallen by about 30%. The volatility and price rises have been entirely in fiat currencies. The same is true for commodity prices generally, telling us that not only are commodities priced in gold grams generally stable, but a basket of commodities can be regarded as tracking the gold price over time and therefore could be a reasonable substitute for it.

    • If Russia has significant gold bullion quantities in addition to declared reserves, these will have to be declared in conjunction with a gold standard. Imagine a situation where Russia declares and can prove that it has more gold that the US Treasury’s 8,133 tonnes. Those who appear to be in a position to do so assess the true Russian gold position is over 10,000 tonnes. Combined with China’s undeclared gold reserves, such an announcement would be a financial nuclear bomb, destabilising the West.

    • For this reason, Russia’s partner, China, for which exporting semi-manufactured and consumer goods to the West is central to her economy activities, would prefer an approach that does not add to the dollar’s woes directly. The Americans are doing enough to undermine the dollar without a push from Asia’s hegemons.

    Furthermore, a mechanism for linking the rouble to commodity prices has yet to be devised. The advantage of a gold standard is it is a simple matter for the issuer of a currency to accept notes from the public and to pay out gold coin. And arbitrage between gold and roubles would ensure the link works on the foreign exchanges. This cannot be done with a range of commodities. It will not be enough to simply declare the market value of a commodity basket daily. Almost certainly forex traders will ignore the official value because they have no means of arbitrage.

    It is likely, therefore, that Russia will take a two-step approach. For now, by insisting on payments in roubles by the unfriendlies domestic Russian prices for commodities, raw materials and foods will be stabilised as the unfriendlies’ currencies fall relative to the rouble. Russia will find that attempts to tie the currency to a basket of currencies is impractical. After the West’s currency, banking, and financial asset crisis has passed then there will be the opportunity to establish a gold standard for the rouble.

    The Eurasian Economic Union

    While it is impossible to formally tie a currency which trades on the foreign exchanges to a basket of commodities, the establishment of a virtual currency specifically for trade settlement between jurisdictions is possible. This is the basis of a project being supervised by Sergei Glazyev, whereby such a currency is planned to be used by the member states of the Eurasian Economic Union (EAEU). Glazyev is Russia’s Minister in charge of integration and macroeconomics of the EAEU. While planning to do away with dollars for trade settlements has been in the works for some time, sanctions by the unfriendlies against Russia has brought about a new urgency.

    We know no detail, other than what was revealed in an interview Glazyev gave recently to a media outlet, The Cradle [ii]. But the desire to do away with dollars for the countries involved has been on the agenda for at least a decade. In October 2020, the original motivation was explained by Victor Dostov, president of the Russian Electronic Money Association:

    “If I want to transfer money from Russia to Kazakhstan, the payment is made using the dollar. First, the bank or payment system transfers my roubles to dollars, and then transfers them from dollars to tenge. There is a double conversion, with a high percentage taken as commission by American banks.”

    The new trade currency will be synthetic, presumably price-fixed daily, giving conversion rates into local currencies. Operating rather like the SDR, state banks can create the new currency to provide the liquidity balances for conversion. It is a practical concept, which being relatively advanced in the planning, is probably the reason the Kremlin is considering it as an option for a future rouble.

    That idea of a commodity basket for the rouble itself is bound to be abandoned, while a successful EAEU trade settlement currency can be extended to both the wider Shanghai Cooperation Organisation and the BRICS members not in the SCO.

    China’s position

    We can now say with confidence that at their meeting on 4 February Putin and Xi agreed to the Ukraine invasion. Chinese interests in Ukraine are affected, and the consequences would have had to be discussed.

    The fact that Russia went ahead with its war on Ukraine makes China complicit, and we must therefore analyse the position from China’s point of view. For some time, America has attacked China’s economy, trying to undermine it. I have already detailed the position over Hong Kong, to which can be added other irritations, such as the arrest of Huawei’s chief financial officer in Canada on American instructions, trade tariffs, and the sheer unpredictability of trade policy during the Trump administration.

    President Biden and his administration have now been assessed by both Putin and Xi. By 4 February their economic and banking advisors will have made their recommendations. Outsiders can only come to one conclusion, and that is Russia and China decided at that meeting to escalate the financial war on the West.

    Their position is immensely strong. While Russia is the largest exporter of energy and commodities in the world, China is the largest provider of intermediate and consumer goods. Other than the unfriendlies, nearly all other nations are neutral and will understand that it is not in their interests to side with NATO, the EU, Japan and South Korea. The only missing piece of the jigsaw is China’s commoditisation of the renminbi.

    Following the Fed’s reduction of its funds rate to the zero bound and its monthly QE increase to $120bn per month, China began to aggressively stockpile commodities and grains. In effect, it was a one-nation crack-up boom, whereby China took the decision to dump dollars. The renminbi rose against the dollar, but by considerably less than the dollar’s loss of purchasing power. This managed exchange rate for the renminbi appears to have been suppressed to relieve China’s exporters from currency pressures, at a time when the Chinese economy was adversely affected first by credit contraction, then by covid and finally by supply chain disruptions.

    With respect to supply chains, current lockdowns in Shanghai and the logjam of container vessels in the Roads look set to emasculate Western economies with supply chain issues for the rest of the year. All we know is that the authorities are making things worse, but we don’t know whether it is deliberate.

    It is increasingly difficult to believe that the financial and currency war is not being purposely escalated by the Chinese-Russian partnership. Having attacked Ukraine, the West’s response is undermining their own currencies, and the urgency for China and Russia to protect their currencies and financial systems from the consequences of a fiat currency crisis has become acute.

    It is the financial war which is going “nuclear”. Talk in the West of the military war escalating towards a physical nuclear war misses this point. China and Russia now realise they must protect themselves from the West’s looming currency and economic crisis as a matter of urgency. To fail to do so would simply ensure the crisis overwhelms them as well.

    Tyler Durden
    Fri, 05/06/2022 – 21:00

  • Nantucket Gives The OK For Going Topless On Its Beaches
    Nantucket Gives The OK For Going Topless On Its Beaches

    There once was a man from Nantucket…

    But seriously, there could wind up being many more “men from Nantucket” now that the island has opened its beaches up for topless sunbathing. 

    Residents voted for the measure at the annual town meeting this week and it passed 327-242. But it was the way the measure passed that some may find interesting: it passed as a “Gender Equality on Beaches bylaw amendment”, the New York Post wrote this week.

    Sex educator Dorothy Stover proposed the amendment and celebrated the measure by writing on Instagram: “Thank you thank you thank you for choosing equality.”

    Stover also runs the online Nantucket Love School, according to the report. She brought up that men have been allowed to go topless on beaches for nearly 90 years. She made arguments about human anatomy and the history of the beach, the report said. 

    At the meeting to vote on the issue, she said: “Being topless is not being nude. This bylaw would not make beaches nude beaches. This bylaw would allow tops to be optional for anyone that chooses to be topless.”

    She talked about how she came up with the idea: “This past summer, I was at the beach and I wanted to lay out topless. And I thought, ‘Why can’t I do that?’ In Europe, it’s completely normal to be topless, you don’t even think about it.”

    A supporter of the proposal said at the meeting: “Nantucket women have always practiced and lived gender equality. Now I may not choose to go topless … but I think other people should have that choice … I would suggest that we vote for this so that we have choice.”

    She continued: “I’ve had more support than I thought I would. It’s been surprising seeing who supports it and who is pushing back. They say women’s breasts are sexual, and I said no, they’re sexualized, not sexual. We have the exact same makeup — men have mammary glands and nipples — and so I started reaching more into it and men can go topless but we can’t.”

    “Some men have bigger breasts than I do,” she quipped. 

    One man who expressed concern said: “Speaking as a father, I just feel as though this is opening a can of worms, for which we may not be able to control.”

    The official amendment reads “in order to promote equality for all persons, any person shall be allowed to be topless on any public or private beach within the Town of Nantucket,” the New York Post reported. 

    Tyler Durden
    Fri, 05/06/2022 – 20:40

  • Beijing Aggression Has Turned Australia Into Crucial Pillar Of US Defense: Expert
    Beijing Aggression Has Turned Australia Into Crucial Pillar Of US Defense: Expert

    Authored by Victoria Kelly-Clark via The Epoch Times (emphasis ours),

    The emergence of a more authoritarian and militarising Chinese Communist Party (CCP) has transformed Australia into a crucial component of U.S. defence plans to maintain its influence over the Pacific.

    The Australian flag is seen on the Parliament House in Canberra, Australia, on April 1, 2022. (Rebecca Zhu/The Epoch Times)

    John Blaxland, professor of international security and intelligence studies at the Australian National University, told The Epoch Times that middle powers are stepping up as the United States wrestles with its position in the international community.

    “Geo-strategically, and as a backup to the United States, Australia’s become more significant than ever for America’s plans and contingencies,” the former head of the Strategic and Defence Studies Centre said. “And that’s, I think, in part because of the rise of China. The emergence of a more authoritarian and powerful, increasingly militarised state that is much more prepared to throw its weight around than we had previously anticipated.”

    A Philippine Navy special operations group (NAVSOG) on board speed boats patrols off Subic Bay, facing the South China Sea, on Aug. 6, 2013. (Ted Aljibe/AFP via Getty Images)

    As a counter to China’s increasingly belligerent behaviour, Blaxland noted that it wasn’t just Australia, but also Japan and South Korea that have stepped forward in the Asia-Pacific to help maintain the security environment.

    “My sense is that the QUAD has become more and more important, particularly the role of Japan and Australia in contributing to helping the United States maintain its resolve and assuring the U.S. of being a welcome security partner in this part of the Indo-Pacific,” he said.

    Likewise, China’s assertiveness has also driven a more focused multilateral response from Australia, according to Blaxland.

    “When initially touted in 2007, the Quad was quite easily derailed by Chinese protestation. Australia gave priority to allaying their fears and showing due deference [under former Labor Prime Minister Kevin Rudd],” he said. “But the reinvigoration of the Quad in recent times would not have been possible without China’s assertiveness, particularly under President Xi. The member states now see their interests more closely aligned.”

    Blaxland also noted that interoperability between the United States, Australia, Japan, and Korea has been increasing over the past 20 years, allowing Australia to be able to “plug and play” as part of a U.S.-led coalition in the region.

    ‘Cut Australia from the Herd’

    Australia’s support for the United States has made it a target of the CCP however, firstly via soft power and more recently through economic coercion.

    Blaxland believes that the latter was an attempt by Beijing to isolate Australia from the Anglosphere and its allies.

    “I think there’s enough circumstantial evidence to mount a reasonably strong case that they are trying to and have been trying to for a number of years to wean us off United States security lines. To be honest, in the last few months, it’s backfired,” he said. “We’ve been a U.S. and UK ally for 100 plus years. So, if you’re able to break that bond, wouldn’t that be powerful? Yes, it will be very, very powerful.”

    The comments from Blaxland follow those that Kurt Campbell, the Indo-Pacific coordinator under the Biden administration, said on July 2021 in an address to the Asia Society.

    “I think from our perspective, it looks at least [on] some level that there is an attempt to cut Australia out of the herd, and to try to see if they can affect Australia to completely change how it both sees itself and sees the world,” Campbell said.

    The Embassy of the People’s Republic of China in Canberra, Australia, on April 1, 2022. (Rebecca Zhu/The Epoch Times)

    He noted that the relationship between Canberra and Washington has deepened as a result.

    “We’re not going to leave Australia on the field—that’s just not going to happen,” Campbell said.

    Blaxland says that Beijing has been surprised at how difficult it has been to sever Australia–U.S. ties.

    “Xi has miscalculated on Australia because our sense of honour and our interests are now more divergent than ever. And I don’t think he appreciated how that would manifest and what the implications would be,” he said.

    Australian Prime Minister Scott Morrison said in April that Australia is currently dealing with a very different China than in the past.

    “They’ve been coercing; they’ve been bullying; they’ve been intimidating in our region,” he said. “This is why we stepped up.”

    Tyler Durden
    Fri, 05/06/2022 – 20:20

  • All Hell Breaks Out At Apple China Factory As Workers Clash With Guards Over Lockdowns
    All Hell Breaks Out At Apple China Factory As Workers Clash With Guards Over Lockdowns

    Chaos broke out at Apple’s MacBook factory in China after hundreds of employees clashed with authorities and jumped isolation barriers following weeks of intense lockdowns, reported Bloomberg, citing local media sources. 

    Radio Free Asia (RFA) China posted a video early Friday morning showing an uprising of hundreds of workers who were angered with the continuous “closed-loop production” (which means they were kept on-site and quarantined to keep production humming) at the MacBook factory in Shanghai, owned by Taiwan’s Quanta Computer Inc. The incident reportedly occurred Thursday evening. 

    “[Suspected of dissatisfaction with “closed-loop production” epidemic prevention is too strict] [Quanta’s Shanghai plant was shocked to hear that employees “rioted”] Shanghai Dafeng Electronics, a subsidiary of Shanghai Quanta, which has just partially resumed work, experienced an employee “riot” on the evening of Thursday (5th).

    “As seen in the video, hundreds of young employees did not obey the command, jumped over the gate and ran away, and rushed out of the blockade to clash with the guards. It is reported that employees are dissatisfied with the epidemic prevention and control and want to go out to buy civilian materials,” RFA China tweeted. 

    https://platform.twitter.com/widgets.js

    Taiwanese media outlet UDN said the riots occurred after Quanta “prevented employees who had returned to work from returning to the dormitory area during off-duty hours, causing employees to panic and worry about returning to a strict state of isolation and control. Therefore, the group rushed into the dormitory area to cause riots, mainly because of dissatisfaction with the strict epidemic control.” 

    Quanta is Apple’s top Macbook factory and has conducted closed-loop production at the factory for the last month to keep workers from getting infected. Bloomberg noted that the discontent was resolved Friday morning, and the factory returned to normal operations. In its latest earnings report, Apple warned that supply constraints would cost the company $4 billion to $8 billion in the current quarter. 

    Shanghai has enforced a zero-COVID strategy (supported by China’s Politburo) across Shanghai, locking down nearly 25 million people for more than a month. Reuters reports the city’s epidemic prevention and control situation is “improving.” Some companies opted for closed-loop production to keep factories open. This helped restart 70% of production in the manufacturing hub, while 90% of 660 top industrial companies have resumed output.

    “But it’s unclear how long the closed loops can be sustained, given the resources required to feed and house thousands of workers at a time. The system also requires that workers avoid contact with anyone outside the loop, including family members,” Bloomberg explained. 

    The situation at Quanta on Thursday night shows workers are getting frustrated with strict controls and could lead to more uprisings at other factories. 

    Tyler Durden
    Fri, 05/06/2022 – 20:00

  • Former Tesla Engineer Aims To Build Next Generation Electric Battery Material Plant In The US By 2024
    Former Tesla Engineer Aims To Build Next Generation Electric Battery Material Plant In The US By 2024

    Authored by Bryan Jung via The Epoch Times (emphasis ours),

    Sila Nanotechnologies, a battery startup founded in 2011 by a former Tesla engineer, announced on May 3 plans for a new plant based in the United States that will mass-produce material for low-cost next-generation batteries with a longer range and is not dependent on manufacturing in China.

    “In a commitment to ensure America retains global leadership in the world’s transition to the new energy storage era, Sila, a next-generation battery materials company, today announced the purchase of a facility with more than 600,000 square feet of space located in Moses Lake, WA to be used to manufacture Sila’s breakthrough lithium-ion anode materials at automotive volumes and quality,” announced the company in a May 3 press release.

    “Powered with hydropower, the facility is located on 160-acres of land close to rail lines for convenient and efficient shipping,” said Sila.

    Electric vehicle lithium battery pack at a factory. (Sergii Chernov/Adobe Stock)

    Sila’s CEO Gene Berdichevsky told Reuters that the company will invest a few hundred million dollars to build the new factory in Washington state, which is set to open in the second half of 2024, with full production beginning in early 2025.

    The cost of electric car batteries has yet to fall to a more affordable price as was earlier anticipated, when Tesla jump-started the demand for batteries after its founding in 2003, due to material situations, explained the CEO to Reuters.

    Berdichevsky said that his materials could be used to build up to 500,000 chips, which would help lower the cost to consumers, making electric vehicles less expensive.

    The battery company had raised an additional $590 million in 2021, raising its valuation to an estimated $3.3 billion.

    “The U.S. has always excelled at innovation. Now we must also excel at manufacturing that innovation,” said Berdichevsky, who said that his company “is delivering proven next-generation anode materials today.”

    “Our new Washington state plant builds on that momentum offering the manufacturing capacity to meet the needs of our auto partners on their way to a fully electric future. We’ve been working towards automotive quality standards and scale since our start to ensure longer range, faster charge times, and lower battery cost.”

    “With this scale-up, we have a pivotal piece to realize the full potential of next-generation materials at the volumes required to make a global impact,” Berdichevsky concluded.

    The battery CEO said that Sila’s new plant in Moses Lake would make silicon-based anode materials, which he claims can store 20 percent more energy than anodes that typically use graphite, of which 70 percent comes from an increasingly unreliable China.

    Graphite is considered by the U.S. government to be a strategic mineral, but not silicon, which can be found largely domestically.

    The Biden administration has said it aims to reduce American reliance on China in the battery supply chain.

    Sila claims that its silicon anode allows more lithium ions to be stored in batteries, thus increasing energy density and creating a battery that is cheaper and contains more energy in the same space.

    Tesla’s CEO Elon Musk announced a plan in 2020 to use silicon-based anodes in its new batteries, but it is not certain whether it has taken advantage of the new technology.

    Sila is currently operating a test production facility at its headquarters in Alameda, California, that can produce battery materials for about 1,000 cars a year, but it is currently limited to making materials used in fitness watches.

    Berdichevsky said the company’s new facility aims to deliver annual silicon-based anode production sufficient to power 10 gigawatt hours of batteries in 100,000 electric vehicles, with a goal to increase the capacity of “150 GWh of cells when used as a full graphite replacement or 750 GWh as a partial replacement—enough to power two to ten million electric vehicles per year.”

    He said that Sila will address the immediate issue of rapidly expanding production to meet the needs of automakers.

    German automaker Daimler AG, meanwhile, has put a minority equity stake in Sila, which also has a contract to produce electric battery materials with its rival, BMW.

    Reuters has contributed to this report.

    Tyler Durden
    Fri, 05/06/2022 – 19:40

  • Nationwide Baby Formula Shortage Hits "Shocking" Levels, Sparking Panic Among Parents
    Nationwide Baby Formula Shortage Hits “Shocking” Levels, Sparking Panic Among Parents

    Authored by Jack Phillips via The Epoch Times,

    A nationwide shortage in baby formula is worsening, according to a new analysis, as parents have expressed alarm over the worrying trend.

    At retail locations across the United States, about 40 percent of the top-selling infant formula products were not in stock for the week ending April 24, said Datasembly. The company said that it tracked baby formula stock at more than 11,000 stores nationwide.

    “This is a shocking number that you don’t see for other categories,” Ben Reich, CEO of Datasembly, told CBS News.

     “We’ve been tracking it over time and it’s going up dramatically. We see this category is being affected by economic conditions more dramatically than others,” Reich added.

    Previously, drugstore chains like Walgreens and CVS have announced they would limit how many baby formula products each shopper can purchase at a given time.

    In a statement, Reich cited inflation, product recalls, and supply chain shortages as why there is “an unprecedented amount of volatility for baby formula.” And he believes that the shortages will continue in the near future.

    “We expect to continue to see the baby formula category being dramatically affected by these conditions,” Reich said.

    “Baby formula stock, which has been one of the more affected categories so far in 2022, and one that will continue to demonstrate higher than average out-of-stock levels.”

    Meanwhile, some parents have expressed alarm on social media about the apparent lack of infant formula on shelves.

    “If the [mainstream media] can talk about the toilet paper shortage ever [sic] hour, they should be talking about the baby formula shortage at least,” Danielle Miller, a mother, wrote on Twitter last week.

    “We ended [up] finding the Amazon brand online but not everyone is so lucky to be able to feed that. Please share. This is every store!”

    “The baby formula shortage is unreal!” GET THESE BABIES SOME FOOD!” another mother wrote on Twitter along with a photo of empty shelves, adding that “it’s a crisis all over.”

    Another parent, Irene Anhoeck of San Francisco, told local media that “we’ve noticed it being difficult to find maybe a couple months ago—two, three months ago—and then just recently we can’t find it.” She added, “We’ve tried all the local Targets. We checked Costco, Costco online, Walgreens, Long’s. Can’t find it anywhere.”

    In February, a major baby formula producer, Abbott Nutrition, recalled numerous lots of its products following reports of bacterial illnesses in infants. Last week, the U.S. Food and Drug Administration issued a notice to consumers telling them not to consume any products manufactured at Abbott’s facility in Sturgis, Michigan, over concerns of contamination.

    Tyler Durden
    Fri, 05/06/2022 – 19:40

  • As Average Apartment Size Shrinks, Renters Are Finding Best Deals In The Midwest
    As Average Apartment Size Shrinks, Renters Are Finding Best Deals In The Midwest

    Part of it is due to the trend of Americans increasingly congregating in trendy cities like NYC, but over the past couple of decades, the amount of square footage enjoyed by the average American renter has decidedly shrunk.

    Source: Rentcafe

    But in the era of remote work, renters looking to maximize their square footage will be best served by moving to the midwest, with Kansas City, MO emerging as the most obvious candidate among the nation’s major metropolitan areas.

    For renters who would be more at home in the suburbs, three small towns outside Kansas City have even more affordable options, according to a recent report from RentCafe.

    And if Kansas City doesn’t work, RentCafe has crunched the numbers to highlight some other high-value markets, producing a map of some of the most affordable cities (in terms of value by square footage), which readers can find below.

    Source: Rentcafe

    Here’s the data represented in another format, which also highlights that the south also offers increasingly strong deals for renters.

    Source: Rentcafe

    While the Midwest is the locus for the best deals for renters, its antithesis is – not NYC – but the state of California. Just check out the list of least affordable locales.

    Source: Rentcafe

    You’ll notice they all have one thing in common.

    Tyler Durden
    Fri, 05/06/2022 – 19:20

  • White House Defends Planned Left-Wing Protest At Homes Of Supreme Court Justices
    White House Defends Planned Left-Wing Protest At Homes Of Supreme Court Justices

    Authored by Caden Pearson via The Epoch Times (emphasis ours),

    The White House on May 5 defended the right of left-wing pro-abortion activists to protest at the homes of six conservative Supreme Court Justices, and avoided characterizing them as “extreme,” with outgoing press secretary Jen Psaki instead calling for “peaceful protest.”

    White House press secretary Jen Psaki answers questions during the daily briefing in Washington, on March 17, 2022. (Win McNamee/Getty Images)

    After the leak on Monday of a draft Supreme Court opinion that would overturn Roe v. Wade, the 1973 ruling that made abortion legal across the entire United States, protests erupted by progressive pro-abortion activists whom Psaki described as being “outraged.”

    Barricades were erected around the Supreme Court and security was beefed up around the Justices.

    Tall, heavy barricades surround the U.S. Supreme Court in Washington on May 5, 2022. (Jackson Elliot/The Epoch Times)

    Further, the left-wing organization Ruth Sent Us posted the supposed addresses of six conservative Justices and called for a “walk-by” protest on May 11.

    “At the homes of the six extremist justices, three in Virginia and three in Maryland. If you’d like to join or lead a peaceful protest, let us know,” the group’s website states.

    The group also calls for, and offers to pay, muralists and chalk artists to join the protests.

    Psaki conveyed President Joe Biden’s wishes that any protests remained peaceful but stopped short of characterizing them as extreme. This is while Biden on May 4 characterized a spectrum of the GOP—what he called the “MAGA crowd”—as the “most extreme political organization” in recent American history.

    “The president, for all those women, men, others, who feel outraged, who feel scared, who feel concerned, he hears them. He shares that concern and horror at what he saw in that draft opinion,” she told reporters, noting that it wasn’t a final opinion.

    Pro-abortion protestors shout before the U.S. Supreme Court in Washington on May 4, 2022. (Jackson Elliott/The Epoch Times)

    Biden’s direct message to anybody feeling frustrated by the Supreme Court’s draft opinion, Psaki said, is to participate in peaceful protest.

    “Ensure it’s peaceful. Have your voice heard peacefully. We should not be resorting to violence in any way, shape, or form. That’s certainly what he would be conveying,” she said.

    Psaki declined to say if Biden also viewed the left-wing activists who are planning protests at the homes of the Justices as “extreme.”

    “Peaceful protest? No. Peaceful protest is not extreme,” Psaki said.

    “Our view here is that peaceful protest—there’s a long history in the United States, in the country, of that. And we certainly encourage people to keep it peaceful and not resort to any level of violence,” she went on to say, ref

    Tyler Durden
    Fri, 05/06/2022 – 19:00

  • Putin Issued Rare Apology To Israel In Ukraine-Focused Phone Call
    Putin Issued Rare Apology To Israel In Ukraine-Focused Phone Call

    Russia’s President Vladimir Putin has issued a rare formal apology to Israel’s Prime Minister Naftali Bennet during a Thursday phone call, an Israeli statement has said.

    “The Prime Minister accepted President Putin’s apology for Lavrov’s remarks and thanked him for clarifying the President’s attitude towards the Jewish people and the memory of the Holocaust,” Bennett’s office said.

    PM Naftali Bennett, source: Tass

    However, the Russian statement didn’t reference the apology, instead saying the two leaders talked about the Nazi defeat during WWII head of Russia’s Monday ‘Victory Day’ celebrations.

    Israeli Foreign Minister Yair Lapid had days ago slammed remarks made by Russian FM Sergey Lavrov explaining why part of Russia’s war aim in Ukraine is to ‘deNazify’ it when President Zelensky is Jewish as “unforgivable and scandalous and a horrible historical error.”

    “In my opinion, Hitler also had Jewish origins, so it doesn’t mean absolutely anything. For some time we have heard from the Jewish people that the biggest antisemites were Jewish,” Lavrov had controversially stated Lavrov’s words made headlines around the world, and were promptly condemned by US and European officials.

    The remarks had created a days-long diplomatic row between the two countries. Lavrov had further in the interview explained that the “most rabid antisemites tend to be Jews.” Moscow for its part has been outraged that for years Western media and politicians have been cheerleading far-right nationalist groups in Ukraine that have long been widely acknowledged as neo-Nazi in ideology, Azov regiment foremost.

    Also during the Thursday call the standoff at Azovstal iron and steel works was discussed, as the Israeli leader has sought to mediate the situation as calls for a ceasefire and allowance for all remaining civilians to be able to exit the site grow. Fierce fighting has been ongoing there over the past days, also as an emergency UN humanitarian team seeks direct access to the besieged plant.

    Tyler Durden
    Fri, 05/06/2022 – 18:40

  • Biden Strategy Pushing US Nuclear Deterrence 'Beyond Its Usefulness': Experts
    Biden Strategy Pushing US Nuclear Deterrence ‘Beyond Its Usefulness’: Experts

    Authored by Andrew Thornebrooke via The Epoch Times,

    The Biden administration’s nuclear policies and budget are too ambiguous or otherwise wide reaching to provide the type of conflict deterrence that is expected of them, according to several experts.

    “How are you going to contain Russia and China?” said Harlan Ullman, a senior advisor at the Atlantic Council, a Washington-based think tank. “The policy statements don’t tell you. They’re aspirational.”

    Commander of U.S. Strategic Command Admiral Charles Richard testifies during a Senate Armed Services Committee hearing in Washington on March 8, 2022. (Drew Angerer/Getty Images)

    Ullman’s comments referenced the few statements made by the Biden administration about its National Defense Strategy (NDS) and National Security Strategy (NSS), neither of which has been released in unclassified form, and which were largely constructed on classified information.

    He noted also that the Pentagon would be unlikely to deliver on any large-scale strategic modernization efforts, given the fact that the nation was at a record $30 trillion in debt and was facing immense economic strain from 40-year record-high inflation.

    Further, Ullman said that the administration’s concept for nuclear deterrence was being pushed beyond its limits, and would prove an Achilles’ heel in the administration’s strategy unless more work was done to credibly improve the nation’s non-nuclear, or “conventional” forces.

    “How are you going to deter Russia and China, and from what?” Ullman said. “Nuclear deterrence has been expanded far beyond its usefulness. It’s going to prevent a major world war, but let’s not believe it can do lots of other things.”

    A Growing Strategy and a Shrinking Military

    Ullman delivered the comments amid a series of discussions on the nature of the Biden administration’s grand strategy at the Brookings Institution, a public policy think tank.

    The talks coincided with a series of Congressional hearings over the past week, which examined the administration’s proposed defense budget for FY23, and the role of the NDS and NSS in guiding that budget.

    Republican lawmakers criticized the budget as being a real cut to military spending given that the budget only allots a 2.2 percent inflation rate instead of the actual 8.5 percent, as well as for proposing to cut the number of ships and aircraft in the military amid growing tensions between the United States, China, and Russia.

    Sen. Susan Collins (R-Maine) said that the proposed budget would place the United States at “real risk.” Rep. Mike Rogers (R-Ala.), meanwhile, said that the budget did not meet the needs of President Joe Biden’s own strategy.

    China’s DF-41 nuclear-capable intercontinental ballistic missiles are seen during a military parade at Tiananmen Square in Beijing, China, on Oct. 1, 2019. (Greg Baker/AFP via Getty Images)

    China, and the Limits of Nuclear Deterrence

    At the Brookings event, another expert questioned the efficacy of the NDS and NSS for championing the idea that mere nuclear firepower could deter adversaries from engaging in unwanted behavior, especially given the recent failure of just such a strategy in preventing the invasion of Ukraine by Russia.

    “Both [the NDS and NSS] viewed and continue to view China as the primary threat to U.S. security,” said Melanie Sisson, a fellow at Brookings. “The NDS, in particular, defines the role of the military in providing American security today, and in this new period of competition, by being prepared to fight and to win a war with China.”

    “[But] We can’t assume that being able to win a war with China will create general deterrence, [or] that it will deter China not just from starting a war, but also from behaving badly in other ways,” Sisson added.

    Like Ullman, Sisson believed that the administration was making a mistake in believing that it could credibly deter China merely by establishing capabilities that could win a hypothetical war. As such, she said that the Pentagon would need to do more to illustrate its strategy of “integrated deterrence” in action as opposed to couching its meaning in buzzwords and slogans.

    “Deterrence isn’t a thing that one has,” Sisson said. “It’s an effect that we can produce. It’s the outcome of a strategy.”

    “I really want to know more about what the administration means by ‘integrated deterrence’ and don’t want just the bumper sticker slogan about ‘we’re going to work across all of the domains’,” Sisson added.

    To that end, Sisson said that the administration could provide real value by engaging in targeted initiatives designed to limit the potential for catastrophic conflict with China, such as engaging in talks with Chinese leadership to reach an agreement to take nuclear command and control systems off the table for cyber attacks.

    China Continues Nuclear Development with Eye on Taiwan

    Such efforts are increasingly likely to be deemed necessary as relations between the United States and China continue to bottom out to historic lows amid tensions over trade, IP theft, Russia’s invasion of Ukraine, and the continued de facto independence of Taiwan.

    As tensions have soared, the Chinese Communist Party (CCP) has continued the historic expansion and modernization of its nuclear arsenal, placing new emphasis on the capability of the United States’ own aging nuclear stockpile.

    Air Force Secretary Frank Kendall said that China’s ultimate aim in building such an arsenal was to develop a military capable of ejecting the United States from the Western Pacific, and that the regime was deliberately pursuing military technologies capable of undermining or otherwise circumventing U.S. defense systems.

    The test of a hypersonic weapon by the Chinese military in July was one such example of this effort in practice, he said, and at least one other U.S. official has said that the United States could not defend against such technology.

    The tensions have also highlighted the apparent disparity in growth between the American and Chinese militaries, and led some experts to question whether the United States actually has a strategy in place for potential conflict with China’s communist regime over Taiwan.

    China’s sole operational aircraft carrier, the Liaoning (front), sailing with other ships during a drill at sea in April 2018. (AFP via Getty Images)

    To that end, Rep. Ann Wagner (R-Mo.) said in April that the United States was effectively “ceding the Indo-Pacific” to China.

    Relatedly, comments delivered by Adm. Charles Richard, the current commander of the United States’ nuclear arsenal, during a hearing of the Senate Strategic Forces Subcommittee on May 4, suggested that U.S. military leadership was uncertain of the exact trajectory of Chinese military capabilities.

    “We don’t know where China is going to end up in capabilities and capacity,” Richard said.

    Richard also noted that China was in the process of a “strategic breakout” that would challenge the world order and that the United States would need to vigorously pursue “competitive overmatch,” or overwhelming superiority in force, to deter the CCP from expansionary or otherwise aggressive behaviors.

    That mission was rendered further complex, he said, by the deepening partnership between the CCP and the Kremlin, which placed the United States in the unprecedented position of needing to simultaneously deter two near-peer nuclear adversaries.

    “We are facing crisis deterrence dynamics right now that we have only seen a few times in our nation’s history,” Richard said.

    Richard further added that the CCP “will likely use nuclear coercion to their advantage in the future” due to its observations of Russia’s success in preventing Western interference in its invasion of Ukraine by threatening nuclear action.

    The remarks echoed similar comments by experts that China’s growing nuclear arsenal could easily be used to give cover to more conventional aggression by allowing China to effectively intimidate the United States away from interfering in any expansionary activities, such as an invasion of Taiwan, which Richard said the CCP planned to carry out by 2027.

    Stuck in the Middle with Nukes

    Caitlin Talmadge, a fellow at Brookings, said that the United States would need to develop a “more coherent way” to use non-nuclear means to achieve deterrence across domains, now that China was developing enough nuclear punch to counter the United States’ nuclear forces. To that end, she said nuclear would nevertheless continue to color military and diplomatic strategy.

    “We’re back to the world where nuclear weapons actually do cast a shadow over conventional and sub-conventional conflict.” Talmadge said.

    Despite this, there was little transformation in U.S. nuclear policy or strategy over the last decade and a half, according to Robert Einhorn, a senior fellow at Brookings, who said that, barring some classified unknown information, there was a broad continuity in nuclear policy through the Obama, Trump, and Biden administrations.

    “President Obama rejected a policy of no first use, and he insisted on retaining the option to use nuclear weapons in response to non-nuclear aggression,” Einhorn said. “Trump did the same and Biden will do the same in his [nuclear posture review].”

    As such, Einhorn said that the American public could likely expect a middling approach to nuclear modernization that neither excessively modernized nor shrunk the strategic weapons arsenal of the United States. That approach he said, would take into account the fact that the administration was unlikely to find support for expanding American nuclear capabilities given current fiscal concerns and the risk of triggering an even more costly arms race. Likewise, he said, there was little chance of the administration not pursuing some modernization efforts given the threat-rich environment facing the nation.

    “Given today’s very threatening strategic environment with growing threats from Russia, China, and North Korea, I don’t think there’s going to be much support for limiting U.S. nuclear capabilities and options,” Einhorn said.

    Tyler Durden
    Fri, 05/06/2022 – 18:20

  • The Idea Of A Four-Day Work-Week Is Spreading Throughout Asia
    The Idea Of A Four-Day Work-Week Is Spreading Throughout Asia

    The idea of the 4 day workweek is starting to make its way through Asia.

    The concept is being tested as long working hours are taking a noticeable toll on workers (and their productivity), a new report from Nikkei Asia says. Leading the charge is Japan, who is notorious for what Nikkei calls a “punishing” work culture.

    Hitachi announced last month that it was going to implement 4 day workweeks for about 15,000 of its employees. They were soon followed by game developer Game Freak, who is the company behind the Pokemon series. 

    Japanese staffing giant Persol Holdings polled about 1,000 workers about what new policies they would like to see implemented. About 23.5% of respondents, the largest group, said they wanted 3 day or 4 day workweeks. 

    Nikkei notes that in the year leading up to March 2021, there were more than 2,800 claims for karoshi, which is literally the term for “death from overwork”. That number is up 43% from 10 years prior. 

    Panasonic Holdings and NEC are also considering the change and the idea is spreading across the continent.

    In Indonesia, for example, lending company Alami has been on 4 day workweeks since last year. South Korean education company Eduwill has been working on the schedule since 2019 and was the first in its industry to do so. 

    India is also considering the idea, with the country set to implement four labor codes this year that will alter working hours and wages. The changes will offer workers the option of working four days a week. 

    China and South Korea also have reputations for overworking their citizens, Nikkei reported:

    In China’s “996” work culture, pervasive in its tech sector, employees toil from 9 a.m. to 9 p.m., six days a week. South Koreans on average worked 1,908 hours in 2020, according to the Organization for Economic Cooperation and Development, the highest in Asia and 221 hours more than the OECD average.

    Yoshie Komuro, CEO of Tokyo-based consultancy Work Life Balance commented: “Japan’s overtime is a bargain” for businesses. Governments should also push for companies to “effectively evaluate employees’ productivity,” Kumoro concluded. 

    Tyler Durden
    Fri, 05/06/2022 – 18:00

  • Child-Gang's Violent Spree Shakes-Up Downtown Boston
    Child-Gang’s Violent Spree Shakes-Up Downtown Boston

    Authored by Alice Giordano via The Epoch Times (emphasis ours),

    A gang of young juveniles led by an 11-year-old girl is terrorizing random people throughout the popular downtown area of Boston.

    Police in Boston, Massachusetts, cannot detain many of the gang members because they are under the age of 14. (Maddie Meyer/Getty Images)

    According to incident reports released by police, all the children are black and under the age of 14.

    A 13-year-old in the gang already had an outstanding felony warrant for assault with a dangerous weapon at the time of the recent attacks.

    Their victims were all white—with the exception of one victim identified in the reports as a light-skinned Hispanic woman who the gang of juveniles allegedly called a “white [expletive] with braids.”

    The gang has been menacing people throughout the popular Boston Common. (George KUZ/Shutterstock)
    She told police the young minors began punching and kicking her after telling her she could not wear her hair “in the style” because she was “not black.”

    In one incident, the child gang is alleged to have entered a McDonald’s outlet chanting “Black Lives Matter” and ordering customers to say the phrase. They also demanded free food.

    When the McDonald’s owner asked them to leave, they spat at him with an 11-year-old lunging at him with a knife, police reports state.

    They then smashed the glass of the front doors to the establishment.

    Several of their attacks were captured on both surveillance cameras and filmed by bystanders with the 11-year-old leading some of the attacks.

    They included the beating of an elderly man and a violent assault of two college students that left one with head trauma. One of the children stomped on her eyeglasses after they fell off the student’s head in the attack.

    Police arrested, but then released some of the older children.

    In a written statement on the incidents, Boston police said they know the identity of the 11-year-old girl, but cannot arrest her because she is under 12, the cut off for prosecuting a minor under a law passed in 2018 in Massachusetts.

    Suffolk County District Attorney Kevin Hayden also cited the law as the reason his office has had a limited response to what he called an “urgent matter.”

    “Under this legislation, the primary responsibility for preventing these attacks instead falls on city, state, and community agencies,” Hayden said in a statement.

    The law also limits their ability to detain minors under the age of 14.

    According to the Office of Juvenile Justice Delinquency Preventions, 16 percent of members of youth gangs are now under 14.

    Boston’s Mayor Michelle Wu blames the children’s crimes on the pandemic. (Scott Eisen/Getty Images)
    At a press conference on the incident, Boston’s Mayor Michelle Wu blamed the crimes of the children on the COVID-19 pandemic.

    “All throughout our city right now, all through our country right now, there’s an incredible amount of stress and anxiety that’s translating the trauma of the pandemic into mental health challenges across every demographic, across every community.

    “There is really a second epidemic that’s coming out of this pandemic that is related to mental health,” Wu said in response to a question about the level of violence by the children.

    Just weeks after the election in 2021, Wu imposed some of the most restrictive COVID-19 school mandates in the nation, promising to keep them even if schools reached an 80 percent vaccination rate.

    Her “B together” policy, akin to New York City’s proof of vaccine passport, drew angry protesters who camped daily outside her home.

    Wu’s unwavering vaccine mandate for city workers also led to a lawsuit filed against her administration by police and firefighters.

    Wu also ran on a campaign platform for what she called the demilitarization of the Boston police.

    At least three Boston police officers were attacked by members of the child gang, including one that suffered a bloody nose after being punched in the face by the 13-year-old with priors.

    Some of the kids also kicked and spat on the police and caused damage to a police cruiser, the incident reports reveal.

    One of the children made racial slurs and homophobic comments to one of the officers.

    According to a police report, one of the children said he had been “set off” when called a racial slur by a person he asked to buy him ice cream.

    Boston is one of 24 states that set minimum ages for the prosecution of children.

    The National Juvenile Justice Network has called on a national minimum prosecution age of 14.

    As part of its call, it cited a video of a police officer in Rochester, New York, pepper-spraying a 9-year-old girl after she refused to get into a police cruiser, telling the officer she won’t get into the car until her father arrived.

    The child’s school called the police after she allegedly threw a temper tantrum in class.

    There have been similar incidents including a 2019 video of a New Mexico cop slamming an 11-year-old girl to the ground as she sobs and begs the police officer to get off of her.

    The officer, who later resigned, was arresting her because she took milk from the school cafeteria.

    Gangs made up of similar-aged children have for over a year been committing similar crimes in other major U.S. cities including New York, Seattle, and Chicago, where a 10-year-old boy held a woman at gunpoint while stealing her car as part of a string of violent attacks by a child gang.

    Boston, which has few neighborhoods that are not affluent, has until recently been relatively free of violent crimes with incidents mostly confined to the city’s low-income districts of Dorchester, Mattapan, Roxbury, Hyde Park, and Jamaica Plain.

    Boston Common, the vestige to such iconic literary tales as “Make Way For Ducklings” and its iconic Swan Boats, has been a main area for the child gang.

    The gang has also carried out attacks in an area of Boston known as Downtown Crossing, once the city’s red-light district that flourished into a tourist attraction where people flocked from all over to stare into the Christmas decorated windows of Macy’s and the landmark of Filene’s basement.

    At the press conference on the child gang, Wu called for privacy for the minors and suggested some of them have mental health issues and need support services.

    Wu also said there is “never any excuse for violence.”

    Tyler Durden
    Fri, 05/06/2022 – 17:40

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May 06

Today’s News 6th May 2022

  • Visualizing How The Mobile Phone Market Has Evolved Over 30 Years
    Visualizing How The Mobile Phone Market Has Evolved Over 30 Years

    The mobile phone landscape looks drastically different today than it did three decades ago.

    As Visual Capitalist’s Stefan Ionescu and Carmen Ang detail below, in 1993, Motorola accounted for more than half of the mobile phone market. But by 2021, its market share had shrunk to just 2.2%. How did this happen, and how has the mobile industry changed over the last 30 years?

    This video by James Eagle chronicles the evolution of the mobile phone market, showing the rise and fall of various mobile phone manufacturers. The data spans from December 1992 to December 2021.

    The Early Days of Mobile Phones

    Motorola is known for being a pioneer in the mobile phone industry.

    In 1983, the American company launched one of the world’s first commercially available mobile phones—the DynaTAC 8000X. The revolutionary analog phone cost nearly $4,000 and offered users up to 30 minutes of talk time before needing to be recharged.

    Motorola went on to launch a few more devices over the next few years, like the MicroTAC 9800X in 1989 and the International 3200 in 1992, and quickly became a dominant player in the nascent industry. In the early days of the market, the company’s only serious competitor was Finnish multinational Nokia, which had acquired the early mobile network pioneer Mobira.

    But by the mid-1990s, other competitors like Sony and Siemens started to gain some solid footing, which chipped away at Motorola’s dominance. In September 1995, the company’s market share was down to 32.1%.

     

    By January 1999, Nokia surpassed Motorola as the leading mobile phone manufacturer, accounting for 21.4% of global market share. That put it just slightly ahead of Motorola’s 20.8%.

    One of the reasons for Nokia’s surging popularity was the major headway the company was making in the digital phone space. In 1999, the company released the Nokia 7110, the first mobile phone to have a web browser.

    But it wasn’t just Nokia’s innovations that were hampering Motorola. In 1999, Motorola fell on hard times after one of its spin-off projects called Iridium SSC filed for bankruptcy. This put a massive financial strain on the company, and it eventually laid off a large chunk of its workforce after the project failed.

    From then on, Motorola’s market share hovered between 14% and 20%, until Apple’s iPhone entered the scene in 2007 and turned the mobile phone industry on its head.

    The Emergence of the iPhone

    Things really started to change with the launch of the iPhone in 2007.

    In a keynote presentation at the San Francisco Macworld Expo in 2007, Steve Jobs presented the iPhone as three products wrapped into one device: a touchscreen iPod, a revolutionary cell phone, and an internet communications device.

    One year later, Apple launched the App Store, which gave users the ability to download applications and games onto their iPhones. Not only did this greatly enhance the iPhone’s functionality, but it also allowed consumers to customize their mobile devices like never before.

    This was the start of a new era of smartphones—one that Motorola failed to keep up with. Less than two years after the iPhone launched, Apple had captured 17.4% of the mobile phone market. In contrast, Motorola’s market share had shrunk down to 4.9%.

    By the end of 2021, Apple held about 27.3% of the global mobile market. The iPhone is a key part of the tech giant’s growth, driving more than 50% of the company’s overall revenue.

    A Failure to Pivot

    While a number of factors contributed to Motorola’s downfall, many point to one central hurdle—the company’s failure to pivot.

    The iPhone’s emergence was the start of a new, software-driven era. Motorola had mastered the hardware-driven era, but failed to keep up when the tides changed. And the animation above highlights other companies that also failed to adapt or keep up, including BlackBerry (formerly RIM), Palm, Sony, and LG.

    But Apple is not alone. The popularity of Google’s Android mobile operating system has helped competitors like South Korea’s Samsung and China’s Huawei and Xiaomi flourish, with each company establishing strong footholds in the global mobile phone market.

    In today’s fast-paced world, the ability to pivot is essential if businesses want to remain competitive. Will today’s mobile phone giants like Apple and Samsung remain on top? Or will other companies like Huawei catch up in the next few years?

    Tyler Durden
    Fri, 05/06/2022 – 02:45

  • Turkey: NATO's Pro-Putin Ally
    Turkey: NATO’s Pro-Putin Ally

    Authored by Burak Bekdil via The Gatestone Institute,

    • Western leaders shrugged it off when, in 2016, Erdoğan said in plain language that Turkey did not need to join the European Union “at all costs” and could instead become part of a security bloc dominated by China, Russia and Central Asian nations.

    • Erdoğan’s popularity, since he came to power in 2002, has worked as a self-poisoning instrument in the Turkish society, increasingly fuelling anti-Western sentiment, particularly anti-Americanism.

    • The… poll also indicated that 48% of the Turkish public think that the U.S. and NATO are responsible for the situation in Ukraine. Turks also think that Russia is their country’s third most important partner.

    • Nearly six out of 10 Turks (58.3%), according to the GMFUS poll, see the U.S. as the country’s biggest threat, while 31% said Russia and 29% said Israel. The percentage of Turks who say the U.S. should help solve global problems stands at just 6%.

    • While sending smiley messages of reconciliation to the West and the West’s partners in the Middle East, including Israel, Erdoğan keeps fuelling anti-Western sentiments in Turkey.

    • When they are not reading pro-Erdoğan newspapers, Turks are watching pro-Erdoğan television channels featuring commentators who blame the war on Washington and NATO’s eastward expansion.

    • Turkey… dismissed the idea of send its S-400 missiles to Ukraine to help Kyiv resist Russian troops.

    • “The Russians are buying houses and other properties in Turkey, taking advantage of the law that allows foreigners to become Turkish citizens if they invest at least $250,000. Many Russians are able to circumvent Western sanctions by transferring their money from Russian to Turkish banks and converting their rubles to Turkish liras or other currencies. All NATO member countries, with the exception of Turkey, have imposed strict sanctions on Russia…” — Wall Street Journal, April 13, 2022.

    • “Turkey’s central bank took in about $3 billion in just two days in mid-March… That money was likely largely composed of deposits from Russians.” — Wall Street Journal, April 13, 2022

    • This is how NATO ally Turkey is “fighting” the Western battle against Russian aggression. In return, the Biden administration seems to be rewarding Erdoğan.

    • The Biden administration, evidently, at the behest of Turkey, has tried to kill the EastMed gas pipeline project, which could supply gas from Cyprus and Israel, via Greece, to Europe.

    • Worse, the US State Department, in a March 17 letter to Congress, said that a potential sale of F-16 fighter jets to Turkey would be “in line with U.S. national security interests” and would also “serve NATO’s long-term unity.”

    • Greece, which recently has experienced countless illegal Turkish overflights, not to mention the last few years, must be thrilled.

    • Turkey needs to start acting like an ally; not a deceitful, pro-Putin ally.

    Turkish President Recep Tayyip Erdoğan’s popularity, since he came to power in 2002, has worked as a self-poisoning instrument in the Turkish society, increasingly fuelling anti-Western sentiment, particularly anti-Americanism. Turkey needs to start acting like an ally; not a deceitful, pro-Putin ally.

    Pictured: Erdoğan meets with Russian President Vladimir Putin in Moscow, on March 10, 2017. (Image source: kremlin.ru)

    Turkey’s “balancing act” during the Russian invasion of Ukraine is the result of the country’s Islamist leader’s two-decade long indoctrination of a generation of Turks to make them “pious.” President Recep Tayyip Erdoğan may or may not have raised pious generations, as he declared was his political mission, but he has definitely raised an anti-Western generation. That anti-Western sentiment once again makes Turkey the odd-man-out in NATO.

    Western leaders shrugged it off when, in 2016, Erdoğan said in plain language that Turkey did not need to join the European Union “at all costs” and could instead become part of a security bloc dominated by China, Russia and Central Asian nations. Earlier, in 2013, Turkey had signed up as a “dialogue partner” saying it shared “the same destiny” as members of the Shanghai Cooperation Organisation — China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) — which was formed in 2001 as a regional security bloc.

    The same Western leaders looked silly when they were “shocked” at a 2019 Turkish decision to buy the Russian-made S-400 surface-to-air missile system. They simply missed that Turkey had long been only a part-time NATO ally.

    Erdoğan’s popularity, since he came to power in 2002, has worked as a self-poisoning instrument in the Turkish society, increasingly fuelling anti-Western sentiment, particularly anti-Americanism. The Turkish public’s views of the Russian invasion of Ukraine today is an inevitable consequence. A poll by the German Marshall Fund of the U.S. (GMFUS) found that nearly 84% of Turks want their country either to mediate or stay neutral — 10 times more than those who want Turkey to back only Ukraine. Put in other words, 84% of Turks do not support Ukraine in the conflict.

    Turkish pollster MetroPoll found in March that fewer than half (49.3%) of those surveyed think Turkey should be a member of the EU, down from 80% in the early 2000s. The same poll also indicated that 48% of the Turkish public think that the U.S. and NATO are responsible for the situation in Ukraine. Turks also think that Russia is their country’s third most important partner.

    Nearly six out of 10 Turks (58.3%), according to the GMFUS poll, see the U.S. as the country’s biggest threat, while 31% said Russia and 29% said Israel. The percentage of Turks who say the U.S. should help solve global problems stands at just 6%.

    While sending smiley messages of reconciliation to the West and the West’s partners in the Middle East, including Israel, Erdoğan keeps fuelling anti-Western sentiments in Turkey. Speaking at the inauguration of a madrassa (Islamic seat of learning) on April 15, Erdoğan spoke of “these days when the Western culture and life-style has invaded the whole world.”

    Echoing his boss’ ideological obsession, Interior Minister Süleyman Soylu said in a March 14 interview that the Ukraine war shows that the “UN, NATO, and global institutions are going bankrupt” and “the EU is no longer meaningful as a community.” Soylu claimed that the Kremlin merely reacted against U.S. efforts to contain Russia “at a time when the vulnerability of the U.S. and the EU reached a peak under the pandemic.” The war, in Soylu’s thinking, symbolizes the end of globalization as nation-states rise to power.

    When they are not reading pro-Erdoğan newspapers, Turks are watching pro-Erdoğan television channels featuring commentators who blame the war on Washington and NATO’s eastward expansion. One well-known admiral saluted the Russian invasion of Ukraine as “a step to end the imperialist Atlanticist age”, and another claimed that Moscow was tricked into the conflict so that it can be weakened for years to come. Others said that Moscow was not massacring people and was in fact opening an opportunity for peace by not seizing Kyiv.

    Since the beginning of the Russian aggression, some of the confused Turkish action reflecting the country’s confused directions included:

    • On February 25, Turkey abstained from voting on suspending Russia’s membership in most bodies of the Council of Europe in response to the military operation in Ukraine. “During the vote in Strasbourg, Turkey decided to abstain,” Foreign Minister Mevlüt Çavuşoğlu said. “We don’t want to break off the dialogue with Russia.”

    • In an op-ed published in the Wall Street Journal, former CIA official Paul Kolbe suggested that “Turkey should send Ukraine the Russian-made S-400 missile defense systems.” Turkey, however, dismissed the idea of send its S-400 missiles to Ukraine to help Kyiv resist Russian troops.

    • Although Turkey has blocked some Russian ships from their Black Sea blockade of Ukraine, according to retired U.S. Admiral James Stavridis, “This is an illegal blockade in every dimension — no declared war, no self-defense involved, illegitimate and flagrant violation of international law. Designed to starve the population and break the economy. Yet another example of Russian criminal behavior.” No one, of course, has held Russia accountable. Turkey has, in fact, blocked all naval vessels, including NATO’s ships, which must make Russia happy — but not supplies.

    • As Western governments targeted Roman Abramovich and several other Russian oligarchs with sanctions to isolate Putin and his allies, a second superyacht linked to the Russian billionaire docked in a Turkish resort. A source in Ankara told Reuters that Abramovich and other wealthy Russians were looking to invest in Turkey, given the sanctions imposed elsewhere. “He wants to do some work and may buy some assets,” the source said, adding that the oligarch already had some assets in Turkey. Another source in Ankara said Turkey was not currently considering joining sanctions action and expected wealthy Russians to purchase assets and make investments.

    • Çavuşoğlu said on March 26 that “Russian oligarchs are welcome in Turkey.” The message was taken. On April 16, the Clio, a superyacht owned by Russian tycoon Oleg Deripaska, arrived at Turkey’s port of Göcek. Deripaska, the founder of the Russian aluminum giant Rusal, was sanctioned by the US, the EU and Britain.

    • Erdoğan’s government announced the creation of an airline, Southwind, with the aim of bringing Russian tourists to resorts and attractions in Turkey. This is part of a Turkish-Russian understanding that Russia keeps using Turkish airspace as free as if it had never invaded Ukraine.

    • The Wall Street Journal reported in a headline that “Superyachts, Seaside Apartments and Suitcases Full of Cash: Russians Pour Money Into Turkey.” The article said that tens of thousands of Russians have fled to Turkey with suitcases full of money, yachts, private jets and other assets:

      “The Russians are buying houses and other properties in Turkey, taking advantage of the law that allows foreigners to become Turkish citizens if they invest at least $250,000. Many Russians are able to circumvent Western sanctions by transferring their money from Russian to Turkish banks and converting their rubles to Turkish liras or other currencies. All NATO member countries, with the exception of Turkey, have imposed strict sanctions on Russia, preventing its citizens from wiring their money out of the country, blocking Russian Airlines from flying to western countries, and confiscating the oligarchs’ superyachts and private jets. Refusing to impose sanctions on Russia, Turkey is trying to revive its bankrupt economy by generating desperately-needed funds… Turkey’s central bank took in about $3 billion in just two days in mid-March… That money was likely largely composed of deposits from Russians.”

    This is how NATO ally Turkey is “fighting” the Western battle against Russian aggression. In return, the Biden administration seems to be rewarding Erdoğan.

    The Biden administration, evidently, at the behest of Turkey, has tried to kill the EastMed gas pipeline project, which could supply gas from Cyprus and Israel, via Greece, to Europe.

    According to Gatestone Senior Fellow Soeren Kern:

    “The EastMed pipeline has been in the works for more than a decade. The Israel-Greece-Cyprus project — joined by Bulgaria, Hungary, North Macedonia, Romania and Serbia — has long been seen as a way to diversify natural gas supplies to Europe.”

    Worse, the US State Department, in a March 17 letter to Congress, said that a potential sale of F-16 fighter jets to Turkey would be “in line with U.S. national security interests” and would also “serve NATO’s long-term unity.”

    Greece, which recently has experienced countless illegal Turkish overflights, not to mention the last few years, must be thrilled.

    Turkey needs to start acting like an ally; not a deceitful, pro-Putin ally.

    Tyler Durden
    Fri, 05/06/2022 – 02:00

  • The American People Must Relocate Power To The States
    The American People Must Relocate Power To The States

    Authored by Richard M. Reinsch II via RealClear Books (emphasis ours),

    When American citizens look to Washington, D.C., they find much to be disappointed in and even less to believe in. The fundamental problem is that the federal government has, through its regulatory and spending powers, usurped much of the governing authority for the republic.

    Morton

    However, for reasons both predictable and lamentable, it has failed to govern well for decades, with policy breakdowns occurring across the board. Peter Schuck observed in his book “Why Government Fails So Often” that most federal government policies cannot pass a transparent cost-benefits test. But this dysfunctional government results from size and scope – from the federal government vastly exceeding a competency scale that our Constitution attempted to establish.

    There is no manifest line in the Constitution that guides the distribution of power between the federal government and the state governments. In the Federalist Papers, Publius argues that the question will be decided by citizens about where to place power, and their judgment will turn on competency in administration. This process inevitably will be a deliberative one, influenced by elections, arguments, and results.

    If so, we should record that federal spending is now so large and so encompassing that it swallows the ability of the states to be self-governing and accountable to their citizens. This has occurred through ever-expanding federal grants-in-aid. These programs should be culled for the restoration of constitutional order and its commitment to a self-governing people.

    As Philip Hamburger argues in his new book “Purchasing Submission,” the federal government can impose laws and rules on the states through the so-called Spending Power. The constitutional authority of the government to act in this capacity is suspect, and its consequences go beyond the mere size of the expenditures. And yet, on federal spending, we are also facing real limits on government power, with negative consequences in the form of inflation, chronic indebtedness, and lost economic growth.

    Our country even faces potential catastrophic entitlement cuts, since, as a debtor nation, we continue to pay for present expenses with long-term debt instruments that we cannot afford to pay without drastic tax increases, spending cuts, or both.

    Of course, most of our state governments eagerly seek federal grants and funding. Even though such money comes with strings attached to Washington, most states can’t leave well enough alone. What do they lose by taking the money – funds that enable them to claim success for services to constituents whose real costs are not actually paid for by the state’s taxpayers?

    The loss is that we as citizens no longer govern ourselves in an open and competitive fashion versus other states. This crucial discipline over state governments is circumvented. However, the loss of self-government includes not only the states. Members of Congress no longer focus their undivided attention on what should be for them the more pressing objectives of national government. The federal government now gets wagged by the tail, turned on behalf of local concerns and interests that are served by grant programs.

    The failure here is to assume that federal spending in the form of grants to states and localities will produce better policy results than if local priorities had been decided by the actual authorities elected by that state’s voters. Thus does the centralization of power and its enthronement of experts continue unabated as the prime mover in American government.

    What must happen for the proper liberation of the states to govern themselves in full? That would entail ceasing federal grants through a constitutional amendment. This would save billions of dollars and, crucially, restore Congress to its proper function of deliberating national problems and issues.

    The American people must be able to locate authority and accountability in their state governments, which should be led by officials who are fully transparent with their citizens about the costs of programs that must be borne by actual citizens in the state, not by federal taxpayers in an endless game of fiscal shapeshifting. In this way, the federal government would stick to its basic set of truly national issues. The states would become what they were meant to be: entities that govern close to the people, shaping the communities within their jurisdiction, in ways that a national government cannot.

    Tyler Durden
    Thu, 05/05/2022 – 23:40

  • Watch: Air Force's "QUICKSINK" Smart Bomb Rips Cargo Ship In Half
    Watch: Air Force’s “QUICKSINK” Smart Bomb Rips Cargo Ship In Half

    Just weeks after Ukraine sunk a Russian warship, the US Air Force revealed new footage of a precision-guided bomb ripping a cargo ship in half during a new weapons test. 

    The US Air Force Research Laboratory (AFRL) used a modified GBU-31 Joint Direct Attack Munition (JDAM) under the Quicksink Joint Capability Technology Demonstration (JCTD) on April 28 over the 120,000-square-mile Eglin Gulf Test and Training Range on the Gulf of Mexico to sink a cargo ship. 

    An F-15E Strike Eagle fighter dropped the JDAM, successfully striking the ship at the marine testing range. The smart bomb penetrated the ship’s hull and exploded, immediately ripping the vessel in half. 

    “QUICKSINK is an answer to an urgent need to neutralize maritime threats to freedom around the world,” said Col. Tony Meeks, director of AFRL’s Munitions Directorate. 

    By repurposing a JDAM for maritime missions, QUICKSINK will save the DoD money and be able to quickly field these weapons worldwide. 

    “QUICKSINK is unique in that it can provide new capabilities to existing and future DOD weapons systems, giving combatant commanders and our national leaders new ways to defend against maritime threats,” explained Kirk Herzog, AFRL program manager.

    QUICKSINK could soon be another viable option for combat commanders to sink enemy ships and is a low-cost alternative to torpedoes. 

    “A Navy submarine has the ability to launch and destroy a ship with a single torpedo at any time, but the QUICKSINK JCTD aims to develop a low-cost method of achieving torpedo-like kills from the air at a much higher rate and over a much larger area,” continued Herzog.

    The testing of this technology comes as Russia continues a two-month assault on Ukraine. There’s also concern that China is expanding its massive naval fleet in the Pacific. 

    Watch the insane video of the modified JDAM splitting the vessel in half. 

    Tyler Durden
    Thu, 05/05/2022 – 23:20

  • The 5 Stages Of Getting Orange-Pilled
    The 5 Stages Of Getting Orange-Pilled

    Via Lightningnetwork.plus,

    No matter the subject, it’s never easy to accept the realization that one’s world view is incorrect. For many smart and educated people like Michael Saylor it took years to get it. Bitcoin’s underlying philosophy itself, and its implementation challenge many well engrained ideas. It’s also not a minor subject, it shakes the foundation of what you hold to be true all your life.

    Bitcoiners often get disappointed with nocoiners (people who don’t have Bitcoin) when trying to orange pill them (open their minds to Bitcoin), because they don’t seem to understand the obvious. I urge us to be patient and understanding.

    Learn to recognize the “5 stages of grief” most people go through while detoxing from fiat, and help them through the hurdles with patience and with compassion.

    1. Shock and denial 😲

    Initially people can’t accept that fiat money and the global monetary system is not what they thought it is. They can’t accept that the official narrative they have been thought in school and have been fed by mass media doesn’t tell the full story. It’s shocking to realize one has been manipulated.

    People also can’t accept that a pseudunomous economist / programmer(s) (Satoshi Nakamoto) can discover digital scarcity, and reboot the world economy with a more efficient and more just monetary system that doesn’t rely on centralized powers.

    This stage can take a relatively long time, because one has to learn a quite a bit about bitcoin while being in denial.

    2. Anger 😡

    Once people get over the shock, they often get angry.

    They are angry for being lied to by the system, but they are also upset because they assume they missed out on buying bitcoin early.

    Some construct or buy into various narratives that Bitcoin is actually dangerous because it will replace the old established monetary systems, or because it uses too many resources to run, etc.

    At one point though, people do come to accept that this is happening no matter what.

    3. Bargaining 🧐

    The next step for intelligent people typically is bargaining.

    They will ask: can we roll back time, and instead of bitcoin use another crypto coin that they can buy into early, or can we make the properties of bitcoin different so they would fit one’s personal preferences (that typically turn out to be shortsighted)?

    This stage is very important because people will learn through questioning about legacy systems, the engineering decisions made for bitcoin, about complex incentive structures, and other deeper aspects of the subject.

    4. Depression 😕

    As people understand more about the economy, financial systems, political powers, money in general, inflation, etc. they get depressed.

    There is a lot of uneccessary injustice, unfairness and cruelty going on in the world, and bitcoin doesn’t seem to offer a quick solution to all these problems right away. Most people in the world haven’t adopted bitcoin to any level in their lives. There are massive powers who are opposed to change. How will we ever get over these hurdles?

    Fortunately, most people are strong in heart and not willing to give in or give up. Many move on to the last and most important stage.

    5. Acceptance and hope 🤩

    Once people realize bitcoin is not an instant or perfect solution to all ills in the world, but it is our only fair shot to fix things, they reach the final stage. They start to see bitcoin’s true value and ingenuity, and how it can be the foundation for a new fair monetary and economic system. The future doesn’t seem bleak no more. Hope returns.

    At this point, people start to do what they can to help to push bitcoin forward:

    • Most adopt it in their lives for savings and for payments

    • Some start to run a node and provide liquidity to the Lightning Network

    • Some can’t hold back the good news and start to talk to their friends about bitcoin

    • Some transition into jobs where they can work on bitcoin and its ecosystem

    This entire process is difficult, yet extremely rewarding. It not only gives back hope in the future and improves one’s financials, but that hope cascades into other areas of life like health, relationships, improved moral values, etc. People start to feel empowered to take charge and embetter themselves and their communities.

    If you’re a bitcoiner, I don’t have to convince you about the above. If you’re a nocoiner, you won’t believe me until you experienced the change yourself. Good luck on your journey no matter where you stand! 🚀

    Tyler Durden
    Thu, 05/05/2022 – 23:00

  • Timeline: The Rise, Fall, & Return Of The Hummer
    Timeline: The Rise, Fall, & Return Of The Hummer

    The Hummer brand has a relatively short history, but its trucks are some of America’s biggest automotive icons (both figuratively and literally). Originally designed for the military, Hummers are famous for their size, off-road capability, and of course, fuel consumption.

    However, as Visual Capitalist’s Marcu Lu details below, the latter proved to be the Hummer’s Achilles’ heel. By 2007, a recession was coming, and the appetite for oversized gas guzzlers had shrunk. The Hummer brand was discontinued, and its last truck rolled off the production line in 2010.

    Over a decade later, GM is reviving the Hummer as a fully-electric off-road vehicle. Preorders have surpassed 65,000 units, but how does this compare to the brand’s heyday in the 2000s?

    The Origins

    The Hummer traces its roots to 1983, when AM General, a heavy vehicle manufacturer, received $1 billion from the Pentagon to build the High Mobility Multipurpose Wheeled Vehicle (Humvee).

    The Humvee became a staple of the U.S. military, and by 1991, 72,000 had been produced. The truck was especially useful in Middle Eastern conflict zones due to its ability to transport troops and cargo over rough terrain.

    If you’re wondering how this military vehicle ended up on public roads, you can thank none other than Arnold Schwarzenegger.

    While filming the 1990 action-comedy, Kindergarten Cop, Arnold reportedly fell in love with a Humvee used on set. He later persuaded AM General to produce a consumer version of the truck, which arrived in 1992 under the name “Hummer”.

    Apart from adding creature comforts like air conditioning, AM General made very few changes to the consumer-spec Hummer. It was notoriously crude and unsuited for city driving, but its military roots gave it plenty of character. GM saw an opportunity in expanding the brand, so in 1999, it purchased the rights to produce and market the Hummer.

    Rise and Fall

    GM moved rather quickly after purchasing Hummer. It renamed the truck to “H1”, and released an “H2” just a few years later.

    Sales in the U.S. jumped, hitting over 35,000 in 2003 before tapering off slightly. To keep momentum going, GM rolled out the smaller and cheaper “H3” in 2005. Sales once again spiked, and the brand recorded over 71,000 sales in 2006.

    Unfortunately, what goes up eventually comes down. In 2009, during GM’s bankruptcy proceedings, the Hummer brand was discontinued along with Pontiac and Saturn.

     

    So what went wrong? For starters, the H2 was a victim of the times. It was large, expensive, and extremely thirsty for gas—attributes that don’t fare well during an economic recession.

     

    In fact, the H2 never received an official fuel economy rating from the Environmental Protection Agency (EPA) because it was too heavy. Regulations at the time excluded vehicles over 8,500 lbs from testing, though journalists observed an average of less than 10 mpg.

    The H3 mitigated some of these issues by downsizing, and it quickly become the brand’s best selling vehicle. This success was short-lived, as the H3 alone could not sustain the brand.

    Jolted to Life

    In 2020, GM announced the all-electric Hummer EV. It bears a strong resemblance to the H2, carrying over iconic design elements such as the front grill with vertical slats.

    Compared to the H2, this electric model is longer, wider, and heavier. Estimates suggest that it will weigh over 9,000 lbs, which according to EPA estimates, is more than double the weight of the average car. This is primarily attributed to the truck’s vast quantity of battery packs.

    Power is also increased thanks to the electric drivetrain, with the “Edition 1” model boasting 1,000 horsepower from its three electric motors (a similar configuration to Tesla’s Plaid platform). Lesser models, which only have two motors, are expected to generate north of 600 horsepower.

    A Promising Restart

    Will battery power be the key to the Hummer’s long-term success?

    So far, GM appears to have played its cards right. New trucks are outselling new cars by a ratio of 3-to-1 in the U.S., and the release of the Hummer EV is well-timed to capitalize on this trend.

    The Hummer EV also sheds one of its predecessors’ biggest weaknesses—fuel consumption. With gas prices at all-time highs, can we dare to call the new Hummer “economical”?

    Either way, GM is certainly enjoying the economic benefits of its decision. Over 65,000 pre-orders have been received, and production of the Hummer EV is completely sold out until 2024. The truck is being built at Factory Zero in Michigan, which is GM’s first EV-dedicated production facility.

    Tyler Durden
    Thu, 05/05/2022 – 22:40

  • Chinese National Convicted Of Conspiracy To Steal Cancer Drug Trade Secrets To Benefit China-Backed Company
    Chinese National Convicted Of Conspiracy To Steal Cancer Drug Trade Secrets To Benefit China-Backed Company

    Authored by Andrew Thornebrooke via The Epoch Times (emphasis ours),

    A Chinese-Swiss man was convicted after trial for his role in a family conspiracy to steal trade secrets related to cancer drugs, according to the Department of Justice (DOJ).

    A GSK employee is at work at the factory of British pharmaceutical company GlaxoSmithKline (GSK) in Wavre, Belguim, on Feb. 8, 2021. (Photo by Kenzo TRIBOUILLARD / AFP) (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)

    U.S. Attorney Jennifer Williams announced on May 2 that Xue Gongda, a permanent resident of Switzerland with Chinese citizenship, was convicted for his part in a $10 billion scheme to steal cancer medications from his employer and rebrand them under his own biomedical company.

    According to a DOJ statement, Xue had worked as a scientist for the Friedrich Miescher Institute for Biomedical Research (FMI) in Switzerland, which is affiliated with Novartis. His sister, Xue Yu, meanwhile, worked as a scientist at GlaxoSmithKline (GSK) in Pennsylvania at the same time.

    “This defendant illegally stole trade secrets to benefit companies controlled by himself and his sister, one of which were financed by the Chinese government,” Williams said.

    “The lifeblood of companies like GSK is its intellectual property, and when that property is stolen and transferred to a foreign country, it threatens thousands of American jobs and disincentivizes research and development. Such criminal behavior must be prosecuted to the fullest extent of the law.”

    Both Gongda and Yu conducted confidential research into cancer for their prospective companies, and each signed confidentiality agreements as part of their employment, the DOJ said. Gongda carried out research for publication in journals, and his sister Yu performed research for anti-cancer drugs then under development.

    While working for their respective entities, Gongda and Yu shared confidential information for their own personal benefit, stealing and sending their companies’ information back and forth and creating new biopharmaceutical companies through which they could sell proprietary drugs under new names, prosecutors said. Gongda created Abba Therapeutics in Switzerland, and Yu created Renopharma in China. Renopharma even received direct funding from the Chinese Communist Party.

    Renopharma’s internal projections showed that the company could be worth as much as $10 billion based on the stolen GSK data, the DOJ said.

    Gongda was charged in 2018 and extradited from Switzerland to the United States in December 2019. The FBI arrested Yu and her Renopharama associates in January 2016.

    Yu pleaded guilty to theft of trade secrets alongside GSK colleague Lucy Xi. Further, another sister, Xue Tian, pleaded guilty to conspiracy designed to launder the substantial ill-gotten gains that Renopharma expected to receive. One of the directors of Renopharma, Li Tao, also pleaded guilty for his role in conspiring to steal GSK trade secrets. The other director of Renopharma, Mei Yan, is a fugitive who currently resides in mainland China, according to the DOJ.

    “When a company like GSK spends billions on research and development to bring new drugs to market, the theft of valuable trade secrets poses a significant operational threat,” said Jacqueline Maguire, an FBI agent associated with the case. “When those secrets are stolen on behalf of a global adversary, it also endangers the security of our nation and the stability of our economy.”

    “The FBI will continue to bring all our investigative resources to bear to hold accountable criminals like Xue and his codefendants who steal intellectual property to benefit themselves and the Government of China. Our relationships with private sector partners like GSK are critical to disrupting such costly activity and bringing those responsible to justice.”

    Tyler Durden
    Thu, 05/05/2022 – 22:20

  • Bond Market Is Breaking: The Last Three Times 30Y Yields Jumped More, The Fed Intervened
    Bond Market Is Breaking: The Last Three Times 30Y Yields Jumped More, The Fed Intervened

    Some concerning observations about the state of the bond market from JPMorgan’s Jay Barry (full note available to pro subscribers in the usual place).

    We argued yesterday that the sharp decline in front-end yields was exaggerated by the unwind of speculative short positions, but we did not expect for that move to nearly fully reverse today as Treasury yields rose 11-16bp.  Given this reversal, it’s tempting to say the market is coalescing on our view; however, we do not think this represents a more hawkish reassessment of yesterday’s FOMC meeting, as the long-end led the way to higher yields.

    Notably, there have only been 6 instances over the last decade in which 30-year bond yields rose more than today: the top 3 were all amid the worst of market dysfunction in March 2020 which forced the Fed to intervene in unprecedented fashion, the fourth was the day after the presidential election in 2016, the fifth was a stronger-than-expected payroll release on a low-liquidity Friday around the July 4th holiday in 2013, and the sixth was in December 2015 when the ECB disappointed market’s expectations for additional stimulus

    Accordingly, we think it’s critical to explore the drivers of this historic move. 

    First, it’s hard to say valuations justify this bearish steepening. Over a longer period, when the Fed is on the move, the curve tends to trade counter directionally, flattening as yields rise, and vice versa. As a result, the curve has completely decoupled from the market’s Fed’ expectations: over the last 6 months, 2-year Treasury yields have explained about 93% of the variation in the 5s/30s curve, and given these moves, the curve appears about 14bp too steep (Exhibit 2).

    Second, we’ve argued lately that the liquidity backdrop is relatively weak: as we showed yesterday, Treasury market depth has been sitting at levels only seen during the worst of the GFC in late-2008/early-2009 and the COVID-19 pandemic in March 2020. This paints a weaker picture on Treasury market liquidity than the presentation by TBAC. Ten-year Treasury market depth remains near the lowest levels since March 2020. Now poor liquidity in itself does not cause this move, but can be an accelerant in the face of other factors. It’s likely this has been exaggerated by cyclical dynamics, as liquidity tends to weaken in the days leading up to the monthly employment report: this could be exaggerated by the calendar configuration, as today falls the day after the FOMC and the day before the April employment report (Exhibit 3).

    Third, risk appetite is light: we’ve highlighted that investors have used the move to higher yields to reduce risk, and Exhibit 4 shows that the share of neutrals in our Treasury Client Survey have been on the rise throughout 2022, matching the highest share since early-March 2020, and the upper end of the range we’ve seen over the past decade. This matters because Treasury is set to auction about $105bn in 10-year Treasury equivalents next week, certainly smaller than the last few months, but still the largest weekly concentration of duration supply over the course of this month.

    Tyler Durden
    Thu, 05/05/2022 – 22:03

  • Feds Take Emergency Action To Delay Water Releases From Lake Powell As Megadrought Sparks Crisis 
    Feds Take Emergency Action To Delay Water Releases From Lake Powell As Megadrought Sparks Crisis 

    The federal government announced Tuesday unprecedented measures to increase the water level in Lake Powell, the second-largest reservoir on the Colorado River. The reservoir, which supplies water and power to millions of people in seven states, has plunged to 24% of total capacity and the lowest level in over half a century. 

    Amid the worst drought in 1,200 years, the Bureau of Reclamation announced a plan to release approximately 500k acre-feet (kaf) of water from Flaming Gorge Reservoir, located upstream, that will flow into Lake Powell. Another 480k kaf that would have been released from Lake Powell will be retained in the artificial lake on the Utah-Arizona border. 

    Such an emergency action is in response to Powell’s water surface elevation at 3,522 feet and quickly dropping. A level below 3,490 feet would mean the Glen Canyon Dam hydropower plant would no longer be operational and could disrupt power and water to millions of people. 

    “The measure protects hydropower generation, the facility’s key infrastructure, and the water supply for the city of Page, Arizona, and the LeChee Chapter of the Navajo Nation,” the federal agency said. 

    This will buy federal and state officials 12 months as it considers additional measures to prevent Lake Powell from slipping under the disastrous level of 3,490 feet. 

    “We have never taken this step before in the Colorado River Basin, but the conditions we see today and the potential risk we see on the horizon demand that we take prompt action,” Tanya Trujillo, the Interior Department’s assistant secretary for water and science, told reporters. 

    CNN spoke with Bryan Hill, general manager of the public power utility in Page, Arizona, compared the water crisis at Lake Powell to judgment day.

    “We’re knocking on the door of judgment day … Judgment day being when we don’t have any water to give anybody, Hill previously said. 

    The decision comes two weeks after federal officials weighed measures to hold back water at the dam to protect the hydropower plant at Glen Canyon Dam. Their action response time of just two weeks suggests a water crisis is underway. 

    Recently, Tom Buschatzke, Arizona’s top water official, warned of an impending water crisis. He said: “We’re going to have to learn to live with less water.”

    With summer in a month and a half, federal government meteorologists are already warning that severe drought conditions could worsen. US Drought Monitor data shows much of the US West is experiencing severe to extreme drought conditions. 

    Several counties in Southern California have already declared a water shortage emergency for the first time, restricting residents from outdoor watering. This could broaden to more states that depend on the Colorado River as Lake Powell and Lake Mead (more downstream) experience record low levels. A megadrought in the western part of the country won’t be abating anytime soon. 

    Tyler Durden
    Thu, 05/05/2022 – 22:00

  • April Payrolls Preview: Get Ready For A Big Miss
    April Payrolls Preview: Get Ready For A Big Miss

    With the Fed unleashing the most aggressive tightening campaign in decades just days after US GDP unexpectedly printed negative – a technical recession just one more subzero quarter away – and both the US stock and housing market careening in scary reruns of the 1970s, the only pillar of strength the US has left is the overheating labor market. But, as we noted earlier today, even that is starting to crack.

    Which is why tomorrow’s April payrolls will be closely scrutinized, not just whether there is an unexpectedly poor jobs print further confirming that the US is on the verge of recession, but also for information on whether red-hot wage growth – a byproduct of the runaway wage-price spiral –  is finally cooling, and hinting at peak inflation.

    So here’s what Wall Street expects tomorrow, courtesy of Newsquawk:

    The consensus expects 391k non-farm payrolls to be added in April, with the pace easing from recent averages as well as the prior rate. The breakdown of expectations by bank is as follows:

    • Daiwa +500K
    • JPM +475K
    • Jeff +475K
    • MS +475K
    • SocGen +475K
    • BNP +460K
    • BofA +450K
    • Barx +450K
    • AP +440K
    • RBC +420K
    • HSBC +405K
    • NW +400K
    • Scotia +400K
    • TD +400K
    • BMO +380K
    • Citi +360K
    • CS +350K
    • Miz +350K
    • Nom +340K
    • DB +300K
    • GS +300K
    • UBS +300K
    • WF +300K
       
    • Median +380K

    It is likely that traders will place a great deal of emphasis on the average hourly earnings metrics given that the Fed is more focused on the inflation part of its mandate. Proxies of labor market progress have been mixed in the month: the ADP’s gauge of payrolls disappointed expectations and was below the analyst forecast range; although initial jobless claims inched up slightly comparing the reference periods for the March and April jobs reports, the four-week moving average has fallen, as have continuing claims; within the two ISM reports on business, the employment sub-indices both fell in the month, with the services sector down beneath the 50.0 neutral level. Meanwhile, other reports continue to note the tightness within labor markets, and there are some data points–like the Employment Costs Index–which continue to allude to strongly rising wages as consumer prices continue to rise.

    HEADLINE EXPECTATIONS:

    • Consensus expects 380k nonfarm payrolls (Wall Street’s thought leader Goldman is at 300K) to be added to the US economy in April (vs the prior 431k), with the rate of payroll growth seen further easing below recent trend rates (3-month average at 562k, 6-month average at 600k, 12-month average at 541k).
    • The unemployment rate is likely to fall by one-tenth of a percentage point to 3.5%; note, the FOMC projects the jobless rate will fall to that level this year, and currently forecasts it will remain there through the end of 2023, before moving up to around 4.0% in the longer-run. The central bank will next update its projections in June, but at his post-meeting press conference this week, Fed Chair Powell said that job gains have been robust in recent months, and noted that the unemployment rate has declined substantially.
    • Average hourly earnings are expected to rise 0.4% compared to March, the same as last month’s increase. On an annual basis, hourly earnings as expected to slow down modestly to 5.5% from 5.6% the previous month.

    PROXIES: The ADP’s gauge of private payrolls was soft relative to expectations, printing 247k against an expected 395k–below the 300-585k forecast range–although the March data saw an upward revision to 479k from 455k. Analysts at Pantheon Macroeconomics were dismissive about the relevance of the data, noting that it is just a model-driven forecast with a “patchy record”. The consultancy says that the “ADP talks about how it incorporates data from firms which use their payroll processing services, but that’s not the core of their model, which also includes regular macro data and the lagged official payroll numbers,” adding that its estimate “is not statistically significant when incorporated into a payroll model using the Homebase numbers, so we aren’t changing our 300K forecast for Friday’s official headline reading.” Elsewhere, the weekly data that coincides with the typical reference period for the establishment survey showed initial jobless claims rising to 185k from 177k heading into the March jobs report, although the four-week average slipped to 177.5k from 188.75k; continuing claims eased to 1.408mln from 1.542mln, with the four-week average also falling.

    BUSINESS SURVEYS: Within the ISM manufacturing survey, the Employment sub-component fell by 5.4 points to 50.9, a shade above the 50.0 neutral level, indicating that labour market momentum in the manufacturing sector was slowing. (NOTE: ISM says that an employment index above 50.5, over time, is generally consistent with an increase in the BLS data on manufacturing employment). The report noted that panellists were still struggling to meet labour management plans, with fewer signs of improvement compared to March. ISM said that there was a smaller share of comments noting greater hiring ease in the month, while an overwhelming majority of panellists were again indicating that their companies were hiring. That said, 34% of those surveyed expressed difficulty in filling positions, which was higher than the 28% in March; turnover rates remained elevated, and there were fewer indications of hiring improvement. The ISM said employment levels, driven primarily by turnover and a smaller labour pool, remained the top issue affecting further output growth. The Services ISM, meanwhile, saw its employment sub-index decline by 4.5 points, taking it to 49.5 – below the 50.0 neutral mark. The survey noted that comments from respondents included “job openings exist, but finding talent to fill them remains a struggle across most industry sectors and job categories” and “demand for employment remains hypercompetitive; there is just not enough qualified personnel available.”

    WAGES: The street expects average hourly earnings to rise by 0.4% M/M in April, although the annual measure is seen slipping by one-tenth of a percentage point to 5.5% Y/Y. Much of the market’s focus will be on these wage components, particularly after the Q1 employment cost index (ECI) rose by 1.4%, topping the consensus 1.1%; on an annualized basis; the ECI was up 5.2% Y/Y. Analysts have been paying more attention to the ECI data after Fed Chair Powell last November cited it as a measure that he was monitoring closely when gauging how employment compensation was faring. Analysts generally agree that the trends seen in this report suggest the labour market is tight and consistent with the need for the FOMC to front-load rate hikes to put a lid on price pressures. UBS says that a composition-adjusted average hourly earnings measure that it constructed has recently been running at a little below 4%, which is a bit below the pace of annualised gains seen in the ECI data. The bank is expecting that the April AHE data will likely surprise to the upside, however, this would be due to calendar shifts, and should not be taken as a strong economic signal.

    ARGUING FOR A WEAKNER THAN EXPECTED REPORT:

    • Labor supply constraints. As shown in Exhibit 1, when the labor market is tight, job growth tends to slow during the spring hiring season. This reflects the combination of a high seasonal hurdle—the BLS adjustment factors assume roughly 800k of seasonal hiring in April—with fewer available workers. The arrival of the youth summer labor force tends to ease these constraints in June and July.

    • Big Data. High-frequency data on the labor market generally indicate weakness in April employment, with four of the five indicators we track consistent with a below-consensus report (see Exhibit 2). The Census Household Pulse Survey is an outlier to the downside; however, that has series has been very volatile in recent months (-3.2mn in April after +3.1mn in March, +4.8mn in February, and -3.7mn in January).

    • Employer surveys. The employment components of business surveys generally decreased in April. Our services survey employment tracker decreased by 0.9pt to54.8 and our manufacturing survey employment tracker decreased 1.3pt to 56.8.
    • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas increased by 8% month-over-month in April, after increasing by 5% in March (SA by GS).
    • ADP. Private sector employment in the ADP report increased by 247k in April, below consensus expectations. We believe the ADP miss reflected the combination of slowing underlying job growth and a drag from the other inputs to the ADP model.

    ARGUING FOR A STRONGER-THAN-EXPECTED REPORT:

    • Public health. After reaching new highs in December and early January, domestic covid infections fell sharply in the early spring. And while infections have begun to rise again from low levels, consumer and business activity has not been significantly impacted. For example, as shown in Exhibit 3, dining activity has been relatively stable at pre-pandemic levels since mid-March. Forecasts assume a roughly100k rise in leisure-sector payrolls in Friday’s report (mom sa).

    • Evolution of the seasonal factors. The April seasonal factors have evolved favorably in recent years (+787k in April 2021 vs. +897k in April 2016), likely reflecting the seasonal adjustment refitting to the weaker-than-expected April payroll prints during the pandemic. This lower seasonal hurdle represents a tailwind of roughly 100k, other things equal, in our view. However, we still view April seasonality as a net negative factor due to binding constraints on labor supply duringa rehiring month.
    • Jobless claims. Initial jobless claims decreased during the April payroll month, averaging 175k per week vs. 209k in March. Continuing claims in regular state programs decreased 139k from survey week to survey week.
    • Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—decreased by 2.5pt to +44.6. JOLTS job openings increased by 205k in March to an all-time high of 11.5mn

    The take home message is simple: bulls should pray for a huge miss, the bigger the better, because between negative GDP and a big hit to the “overheating labor market” stories, the Fed’s aggressive hiking and QT will last at most a few months, before it is followed by its logical successor: ZIRP (or NIRP) and QE, both of which will sent stocks, gold and cryptos to new all time highs.

    Tyler Durden
    Thu, 05/05/2022 – 21:34

  • Texas Faces "Record High" Temps As Grid Operator Warns Of Above-Average Power Usage 
    Texas Faces “Record High” Temps As Grid Operator Warns Of Above-Average Power Usage 

    An early-season heatwave could send temperatures across some parts of Texas into the upper 90s and or even triple digits this weekend and into early next week. Texas’s power-grid manager warned that power consumption could be abnormally high for this year. 

    On Saturday, much of the state will record temperatures above 95 degrees, except for the upper Texas coast and portions of East Texas. 

    Dallas is expected to reach the upper 90s by Saturday afternoon, while Austin, San Antonio, and Midland could reach 100 degrees. 

    “Dallas doesn’t typically see its first 95-degree day until late May. If Austin and San Antonio hit 100 degrees, it would be incredibly early, as the first 100-degree temperature there is typically not until early July in Austin and late June in San Antonio.

    “More than a dozen daily record highs are in jeopardy of being tied or broken on Saturday in the Lone Star State, including 94 degrees in Houston, 97 degrees in Amarillo, 100 degrees in San Antonio, and 103 degrees in San Angelo.

    “The heat will continue into Sunday across Texas. Once again, nearly the entire state could see high temperatures near or above 95 degrees,” said Fox Weather. 

    The heat is expected to linger well into next week. Commodity Wx Group provides several weather models showing Houston could record a temperature above 100 degrees that may last through Monday. 

    The threat of unseasonably warm weather has already concerned Texas’s power-grid manager, the Electric Reliability Council of Texas, otherwise known as ERCOT. They said “larger-than-normal” power consumption would be observed due to a surge in cooling demand. 

    Commodity research firm Criterion Research said, “ERCOT’s power load is expected to climb far above normal for this time of year, with Monday’s demand forecast ramping to nearly 55 GW as heat moves in across Texas.” 

    According to Bloomberg data, Texas day ahead on-peak average power price for Friday has already hit $195.57 a megawatt-hour, the highest since June. 

    In recent days, the prospects of higher cooling demand in Texas have sent natural gas futures soaring on supply concerns. June contracts jumped above $8/MMBtu on Wednesday and, as of Thursday morning, are around $8.50//MMBtu, a level not seen since late 2008. 

    There was only one other time natgas prices were this high for this time of year; that was 2008. 

    Bespoke Weather Services said, “if this kind of heat sticks around, and that is a risk in the South, where we have been leaning hotter with our summer ideas … We easily will go over $10 in prompt month over the next several weeks.” 

    Tyler Durden
    Thu, 05/05/2022 – 21:20

  • 10 Ways Information-Shapers Have Infiltrated Our Institutions
    10 Ways Information-Shapers Have Infiltrated Our Institutions

    Authored by Sharyl Attkisson via The Epoch Times,

    Few matters are so important as the integrity of the information we receive and the recent degradation in its reliability.

    Fencing surrounds the Supreme Court in Washington on May 2, 2022. (Kevin Dietsch/Getty Images)

    The recent leak of a Supreme Court draft related to the landmark Roe v. Wade abortion case underscores how corrupted so many of our important institutions have become by those dedicated to shaping public opinion in a sometimes-dishonest way.

    Nearly every facet of our American institutions has been infiltrated by activists, corporate and political propagandists, and even criminals.

    Here are 10 key institutions that have been successfully infiltrated by information-shapers:

    Bed Bath & Beyond store in Los Angeles, on April 10, 2013. (Kevork Djansezian/Getty Images)

    1. Corporations

    High-profile corporations increasingly do business, or withhold business, on the basis of political considerations in an effort to sway public opinion.

    Additionally, they take part in removing the ability of some people they disagree with to sell products, conduct bank transactions, or otherwise operate their businesses. One recent example is retailers, including Kohl’s and Bed, Bath & Beyond, banning popular “My Pillow” products from the company owned by conservative and ardent Trump supporter Mike Lindell.

    Major League Baseball Commissioner Rob Manfred answers questions during an MLB owner’s meeting at the Waldorf Astoria, in Orlando, Fla., on Feb. 10, 2022. (Julio Aguilar/Getty Images)

    2. Sports

    Sports organizations have stepped into the political realm to try to force some views and censor or punish those who take opposing viewpoints. One recent example is Major League Baseball stripping the All-Star Game from Atlanta over a Georgia law designed to strengthen election integrity following a troubled and error-riddled 2020 election.

    Sports institutions also are involved in trying to sway public discourse on the issue of males competing as females on girls’ and women’s teams, such as the swimmer born as Will Thomas who switched names to Lia Thomas and joined the women’s team at the University of Pennsylvania, setting numerous women’s records.

    Facebook, Google, and Twitter logos are seen in this combination photo from Reuters files. (Reuters)

    3. Big Tech

    Big Tech’s well-known fake fact checks, censorship, and disinformation have manipulated the information landscape in a more dramatic and chilling way than most any other factor. The biggest example is Big Tech’s censorship of arguably the most important political figure of our time: Donald Trump.

    Recent major examples of the sector fostering disinformation include amplifying claims that the Hunter Biden laptop story was Russian disinformation and censoring stories about it; repeatedly backing false information related to COVID-19, while censoring accurate information or legitimate scientific views; and falsely labeling the COVID-19 lab origin story as a conspiracy theory.

    A general view of the Centers for Disease Control and Prevention (CDC) headquarters in Atlanta on Sept. 30, 2014. (Tami Chappell/Reuters)

    4. Public Health Agencies

    The Centers for Disease Control and Prevention (CDC) and other public health agencies have increasingly departed from the realm of public interest and science in order to advance false narratives and disinformation. Recent examples include the head of CDC, Dr. Rochelle Walensky, falsely claiming that people who are vaccinated don’t carry and can’t spread COVID-19; and the agency knowingly putting out disinformation that falsely claimed original studies showed the vaccine’s benefit for people who’d already had COVID-19.

    Another example is National Institutes of Health (NIH) officials Drs. Francis Collins and Anthony Fauci privately working with the media to smear and discredit highly credentialed scientists who disagreed with the lockdown approach to COVID-19.

    Fences and barriers surround the U.S. Capitol after being reinstalled ahead of President Joe Biden’s State of the Union Address before a Joint Session of Congress in Washington on Feb. 27, 2022. (Pete Marovich/Getty Images)

    5. Congress

    Members of Congress in both parties have gotten caught taking part in questionable information-shaping and manipulation, particularly when it comes to pharmaceutical-related material. One recent example is members of Congress unilaterally writing letters to or contacting Big Tech in order to get certain topics or scientific studies and discussions controversialized or banned.

    Some of the members of Congress who are engaged in the efforts are the same ones responsible for their own high-profile disinformation campaigns. A recent example of that is Rep. Adam Schiff (D-Calif.), who repeatedly pushed false and misleading information on the Trump–Russia narrative, lobbying Big Tech to censor certain information related to COVID-19.

    A general view of the White House in Washington, on Oct. 2, 2021. (Al Drago/Reuters)

    6. The Executive Branch

    Having lost the most powerful tool in its arsenal to shape information, the executive branch has now formed its own extra-Constitutional agency to serve that function: the Disinformation Governance Board. The named head of the board, Nina Jankowicz, has widely furthered disinformation in the past.

    The NBC News logo in Las Vegas, on Feb. 18, 2020. (Ethan Miller/Getty Images)

    7. The Media

    With blogs and quasi-news outlets such as Axios, Slate, Daily Kos, Huffington Post, Vox, Salon, Talking Points Memo, and Rolling Stone joining more traditional partisan outlets such as the Los Angeles Times, Politico, MSNBC, NBC, The Washington Post, CNN, and The New York Times in dominating the information landscape—while their conservative equivalents are controversialized—the media has proven to rank close to Big Tech in terms of their influence in further misinformation.

    A classroom in Tustin, Calif., on March 10, 2021. (John Fredricks/The Epoch Times)

    8. Academia and Public Schools

    America’s colleges and universities have taken increasingly heavy-handed roles in terms of squelching free speech and free thought (when it leans against progressive or radical views), in exchange for a managed environment where only carefully filtered views are allowed, and specific language, expressions, and behavior are mandated.

    Many public school systems have grown stronger in efforts to install social engineering and political ideology in teachings and policies. Recent examples include policies involving the use of pronouns when referring to transgender students, and the instruction of critical race theory.

    The Department of Justice (DOJ) logo is pictured on a wall in New York on Dec. 5, 2013. (Carlo Allegri/Reuters)

    9. Dept. of Justice, FBI, and Other Intel Agencies

    The very agencies that should remain furthest above the fray with clean hands have found themselves repeatedly muddied involving major investigations and their political influence efforts. One recent example is the criminal conviction of FBI attorney Kevin Clinesmith, who falsified a document in order to spy on Trump campaign associate Carter Page. Though multiple people would have known about the crime—possibly participating, and staying silent—only Clinesmith was charged.

    He was only charged with a relatively minor crime in relation to the significance, and avoided any prison time. Meanwhile, the agency hasn’t offered any apology or redress to Page. Other examples include the Department of Justice targeting school parents as possible terrorists, and lopsided prosecution efforts regarding the Jan. 6, 2021, Capitol breach, compared to many more violent events and crimes.

    Additionally, intel operators have taken major roles both in front of the camera and behind the scenes to try to shape public opinion using false information and propaganda. One recent example is the “more than 50 former intelligence officials” who “signed a letter casting doubt on the provenance” of an accurate New York Post story about the Hunter Biden laptop.

    The Supreme Court in Washington on Sept. 21, 2020. (Samira Bouaou/The Epoch Times)

    10. The Supreme Court

    Whether it’s the leak to multiple press outlets about Justice Stephen Breyer’s impending retirement or the more problematic new leak of the Roe v. Wade abortion draft, information-shapers have infiltrated the highest court in the land.

    Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

    Tyler Durden
    Thu, 05/05/2022 – 21:00

  • David Stockman Slams Sleepy Joe's $33 Billion Abomination
    David Stockman Slams Sleepy Joe’s $33 Billion Abomination

    Authored by David Stockman via LewRockwell.com,

    Donald Trump has been well relegated to the sidelines of America’s political debate, but the TDS (Trump Derangement Syndrome) lives on, more virulent than ever. The latter is what’s behind Washington’s descent into the current mindless Ukraine war fever—an outbreak of irrationality that makes even the post-9/11 hysteria seem like an orderly discourse.

    At the center of this madness, of course, is Vladimir Putin, the Devil Incarnate. Prior to February 24th he had attained that designation in Imperial Washington not just because of his rough methods of governance in Russia or small time military forays in the 2008 South Ossetia/Georgia dispute or in putting down alleged terrorists in Chechnya, but because according to the RussiaGate hoax he had thrown the election to Donald Trump in 2016, thereby shockingly interrupting the rule of the bipartisan duopoly.

    Accordingly, for the next four years the apparatus of official Washington–including the MSM in cahoots with the national security state—did not cease in its vilification of Putin via the running RussiaGate Hoax, the phony Mueller investigation, the rogue impeachment proceedings and the nonstop MSM linkage of Trump’s unwelcome presence in the Oval Office with the nefarious doings of Vlad Putin.

    At length, the TDS got so virulent and all-consuming inside the beltway that the resulting enmity toward Donald Trump became coterminous with the demonization of Putin. Consequently, when Trump got ushered off the stage (barely) by the American electorate in November 2020, Washington’s war on the Donald simply got re-focused with fevered intensity on Putin. In the target practice galleries of Washington politics, Vlad became the Donald’s avatar.

    Needless to say, with the politicians in both parties foaming at the mouth against Putin, the Deep State and military-industrial complex had a field day hyping Russia into a national security threat that was not remotely justified, but which did massively distort policy.

    That includes perpetuating the Donald’s insanely bloated national security budget even further to $813 billion in the FY 2023 Biden request; stonewalling Russia’s reasonable proposals of December to reset security arrangements in eastern Europe, which would have precluded the devastation now besetting Ukraine entirely; and, after February 24th, turning the intramural dispute between Russia and its historic vassal and step-child, Ukraine, into a purported history-defining contest between peaceful Democracy and belligerent Autocracy—a struggle that justified launching a global Sanctions War against the very essence of the dollar-based payments and trading system upon which America’s tenuous prosperity precariously rests.

    As a result of TDS-come-Putinphobia, Washington is now on a doomsday path that has no rational end game except the risk of WW III, even though the objective facts of the matter scream in the opposite direction. That is to say, in an objective and rational world, Washington would not be touching the Russia/Ukraine dispute with a 100-foot pole because it implicates nothing of consequence for America’s homeland security.

    In the first instance, Russia is not a direct military threat to America notwithstanding some of its fancy new weapons and ultra high speed missiles. America’s triad nuclear defense is still fully in tact and is as lethal as ever. That means as between Russia and the US on the nuclear front, mutual assured destruction (MAD) still prevails, meaning that Russia would never launch a nuclear attack against America because of all the things Putin is, suicidal is not one of them.

    By the same token, the idea that Russia poses a credible conventional military threat to the American homeland was always ludicrous, but is now laughable. In ten weeks it has not been able to subdue a weak neighbor with which it shares a 1,900 Km open land border (no mountains, no waterways, no walls!). So where in the world comes the historically unprecedented armada of carrier battle groups, massive air fleets and endless divisions of tanks and mechanized infantry required to invade and occupy the US of A, located is it is 8,000 Km away on the far side of central Eurasia and beyond the great Atlantic and Pacific moats?

    Besides, the GDP of Russia is $1.6 trillion versus $24 trillion for the US. And for better or worse a Russian attack on America would bring NATO’s article 5 into play, thereby mobilizing $43 trillion of total NATO GDP, which is 27X more economic girth than possessed by Russia; and also $1.2 trillion of combined NATO military budgets, which is 18X Russia’s $65 billion military budget.

    So, no, there is no plausible Russian military threat to the American homeland, meaning that Washington’s scary story stuff arises entirely from the fictional realm of lurid Warfare State propaganda.

    For instance, there is the baseless notion that Ukraine is just a stepping stone in Putin’s grand plan for recreating the former Soviet Union. And unimpeded in Ukraine, he would not hesitate to roll through Poland, the Baltics and the Balkans in the creation of an empire that would eventually dominate Western Europe, too, leaving the US all alone, cowering behind the Atlantic and Pacific shorelines.

    Alas, anything remotely leaning in this direction amounts to the unalloyed humbug of retired military officers and deep staters who are paid by think tanks and the MSM to scare the living daylights out of the public and the politicians alike.

    In turn, that’s so they will more readily acquiesce to the $813 billion of military budgets that are not only a colossal waste, but a fount of the schemes and threats which actually undermine national security. The Washington sponsored Maidan coup of February 2014, which fractured Ukraine’s fragile polity and opened up the civil war against the Russian speaking Donbas that has now morphed into a prelude to WW III, is only the latest example.

    The fact is, Putin is a Churchill level historian and the Russian leadership still has memory muscle that goes back to Soviet times. They know that Poland, the Baltics and much of the non-Serbian Balkans is a hotbed of deep anti-Russian sentiment that would make even an attempt at conquest a bloody, economically draining fiasco.

    Putin may not appeal to the sensibilities of the dandies who scribble out Cold War 2.0 screeds at the Council on Foreign Relations, but his methodical crushing of the Ukrainian resistance demonstrates that he is the Cool Hand Vlad of the present era. As such, he is not about to fall for hopelessly impossible enterprises like the recreation of the old Soviet Union.

    To the contrary, his operation in Ukraine is not the prelude to recreating the Soviet Union, but the coda to unfinished business in the 1300-year history of Russia and its “borderlands”, the latter term being the Russian meaning of the word “Ukraine”.

    Accordingly, scratch any current map of the battle front in Ukraine, and what lies on the Russian controlled side to the east and along the shorelines of the Black Sea and the Sea of Azov shows up as “Novorossiya” (“New Russia”) on any map made between 1764 and 1917.

    Even here, it is not crude Russian revanchism that motivated Putin’s desperate last resort invasion of February 24th; it was for better or worse, Moscow’s frustration with the relentless push of Ukraine into NATO on a de facto basis, and the relentless assault on the Russian speaking populations of the Donbas that over the eight years after the February 2014 coup had led to upwards of 14,000 civilian deaths and the utter destruction of towns and cities in the breakaway Republics every bit as horrific as the nightly MSM fare with respect to Russian bombing on the other side of the battle front.

    So in a world not besotted with the TDS, the alternative course of action would be straight forward. No Washington sanctions; no taking sides in the Ukraine civil war and age-old disputes between Russia and its vassal; no supplying of weapons to the hopelessly outgunned Ukraine military that only prolongs the war; and a complete Washington renunciation of any interest in extending NATO to Ukraine or other ex-Soviet Republics, along with a pullback of US forces and missile installations from former Warsaw Pact countries that are now members of NATO.

    Under that non-TDS scenario, this is what Washington would do in the name of homeland security and it would bring an end to the war and the pointless destruction of Ukraine in a heartbeat.

    Needless to say, under this benign scenario, Joe Biden would not be asking Congress for $33 billion of additional Ukraine war funding, including more than $20 billion in “security and military assistance,” $8.5 billion in economic aid, and $3 billion in “humanitarian assistance” And, of course, this comes on top of the $4.6 billion in security assistance the U.S. has given Ukraine since January 2021, including $3.7 billion since Russian forces invaded the country in February.

    All of that is an abomination, midwifed by the TDS and resulting irrational demonization of Putin. Yet the truth is, America’s homeland security does not require that a single dime be spent on Ukraine!

    Likewise, it also most definitely does not require a single Congressional cowboy or cowgirl to be visiting a remote corner of the earth that does not have a damn thing to do with the security, liberty and prosperity of the American people.

    As it was, the crew pictured below spent a little over three hours on the ground in Kiev conducting a glorified photo-op and “ata boy”.

    The delegation included a “who’s who” of the Dem House leadership—none of whom had the slightest idea of where they were as a historical matter or understood that the silly marionette they meet with had nothing more in mind than dragging America into a shooting war that is none of its business.

    Indeed, in the pre-TDS times the Dem leadership would have been not on a junket to Kiev, but at the White House demanding an end to the Sanctions War on Russia, a halt to the destructive flow of arms from NATO and the urgent return to the conference table to negotiate an end to the carnage—even if it meant that partition of Ukraine, which after all that has now transpired cannot be reconstituted as a unitary state, anyway.

    As it happened, however, the meet and greet delegation included the following: Reps. Gregory Meeks of New York, who chairs the House Foreign Affairs Committee, Adam Schiff of California, the chairman of the House Intelligence panel, and Jim McGovern of Massachusetts, who leads the House Rules Committee, Democratic Reps. Bill Keating of Massachusetts, Barbara Lee of California and Jason Crow of Colorado.

    These people shouldn’t have bothered. They weren’t on a serious foreign policy mission, but had come to virtue signal that they still hate Donald Trump with all their hearts and are willing to start WWIII by making war on his Moscow avatar.

    Indeed, in a fitting it benediction, Nancy Pelosi let loose of her best TDS idiocy:

    “We are visiting you to say thank you for your fight for freedom, that we’re on a frontier of freedom and that your fight is a fight for everyone. And so our commitment is to be there for you until the fight is done.”

    Alas, she may be right, but not in the way she imagines.

    *  *  *

    Reprinted with permission from David Stockman’s Contra Corner.

    Tyler Durden
    Thu, 05/05/2022 – 20:20

  • US Intel Assisted In Sinking Russian Flagship Vessel: Officials Claim Bombshell Escalation
    US Intel Assisted In Sinking Russian Flagship Vessel: Officials Claim Bombshell Escalation

    Less than 24 hours after The New York Times issued a provocative report citing unnamed US officials who are celebrating that American intelligence-sharing with Ukraine’s military has helped take out multiple Russian generals since the Feb.24 invasion, NBC News is out with yet another bombshell claim sourced to the deep state US intel officials. 

    Amid what seems escalation after escalation, and new revelations of Washington’s deepening and perhaps increasingly direct role in fighting Russia in Ukraine, NBC brings us this doozy… “Intelligence shared by the U.S. helped Ukraine sink the Russian cruiser Moskva, U.S. officials told NBC News, confirming an American role in perhaps the most embarrassing blow to Vladimir Putin’s troubled invasion of Ukraine.”

    Image later leaked of the April 15 sinking of the Moskva

    As a reminder of just how hugely significant the claim is – and just how dangerous in terms of representing a massive escalation – the Moskva was considered the flagship of Russia’s Black Sea Fleet, had 510 crewmen on board before Neptune anti-cruise ship missiles scored a direct hit in mid-April, and was the most embarrassing single blow to President Putin’s war effort of the whole conflict thus far.’

    “The attack happened after Ukrainian forces asked the Americans about a ship sailing in the Black Sea south of Odesa, U.S. officials told NBC News,” the report continues. “The U.S. identified it as the Moskva, officials said, and helped confirm its location, after which the Ukrainians targeted the ship.” This comes after the NY Times revealed in a report the night prior that much of the intel-sharing is focused on Russian troop and equipment movements.

    According to further details based on anonymous US senior officials:

    The U.S. did not know in advance that Ukraine was going to target the Moskva, officials said, and was not involved in the decision to strike. Maritime intelligence is shared with Ukraine to help it defend against attack from Russian ships, officials added.

    The U.S. role in the sinking has not been previously reported.

    Biden admin officials in the days after the Moskva sinking had been relatively silent, possibly suggesting that they knew more about the details than what their quiet public stance let on.

    https://platform.twitter.com/widgets.js

    The April 15 event had initially also been met with lack of answers from Moscow as it attempted to deal with the crisis of its flagship missile cruiser sinking to the bottom of the Black Sea after it was hit off Odessa, and as it later said all the crew were evacuated. However some Ukrainian and Western officials said the ship suffered casualties.

    It goes without saying that this fresh NBC report will be viewed by Moscow as an outrageous acknowledged escalation by Washington, though so far Russian leadership’s public response has been rather muted…

    https://platform.twitter.com/widgets.js

    The Kremlin had previously warned it would hold external countries supplying arms and other forms of assistance “responsible” – and that “decision-making” centers including Kiev would come under increased attack. Meanwhile, cruise missile strikes even as far west as Lviv do appear to be expanding this week.

    https://platform.twitter.com/widgets.js

    Indeed it seems that these intentional “leaks” to the media, likely as part of a deliberate strategy of seeking to intimidate Russia in hopes it will more quickly back off its military operations, will instead only serve to ratchet things further as broader great power tensions hit boiling point.

    Tyler Durden
    Thu, 05/05/2022 – 19:46

  • "What A Crazy 24 Hours"
    “What A Crazy 24 Hours”

    By Peter Tchir of Academy Securities

    What a crazy 24 hours!

    I do want to buy risk into the close, but am still a bit cautious because

    • 1) my childish charts point to more downside on nasdaq
    • 2) so many people expected the FOMC meeting to mark a turning point that money got put to work yesterday and shorts came off, exposing the market
    • 3) and yes, I understand, TQQQ is not “the” driver, I think it is symbolic of risk and buy the dip… it started seeing heavy inflows April 26th. It is lower than at any point since then (down 17% today as I type). On rebalancing alone, it will sell into close, but if we see capitulation from recent dip buyers, we have more downside.

    I am the least bearish I’ve been in some time, but too scared to get bullish

     

    Tyler Durden
    Thu, 05/05/2022 – 19:37

  • "The Market Is Softening, Full Stop": Zillow Plunges After Company Issues Dire Housing Outlook
    “The Market Is Softening, Full Stop”: Zillow Plunges After Company Issues Dire Housing Outlook

    It’s one thing for a fringe, tinfoil, conspiracy theory website such as this one to warn (repeatedly, for months) that with mortgage rates rapidly approaching 6%, the US housing market is on the verge of a vicious collapse, as discussed articles such as these:

    It’s another for one of the biggest housing-market linked companies to confirm just that.

    On Thursday, Zillow plunged as much as 13% in late trading Tuesday after a dismal outlook stoked investor fears that rising mortgage rates will spark the next crash in the US housing market.

    The company, which last year suffered tremendous losses of more than $500 million in its home-flipping segment resulting in a record wrtide-down, projected that its internet, media and technology (IMT) segment will bring in $134 million to $169 million in EBITDA in the second quarter, according to a shareholder letter published Thursday.

    While home sales usually pick up in the spring, Zillow’s outlook indicates that soaring mortgage rates and low inventory of for-sale homes will finally slow activity.

    Zillow co-founder and CEO Rich Barton, played both good cop and bad cop, and in the company’s press release issued a somewhat upbeat outlook: “while the housing market outlook may be choppy in the near term, today’s first-quarter results, together with our strong brand, audience, and balance sheet, demonstrate how well-positioned and prepared Zillow is to forge ahead.”

    However, in an interview with Bloomberg, his takes was far less cheerful: “The market is softening, full stop,” Barton said, adding that the toughest macro lens is that inventory levels continue to plummet. Flat transactions would be a good year this year, and I don’t know if we’ll get there.”

    As Bloomberg writes, Zillow’s dire outlook caps a tumultuous period during which it shut down a foray into flipping homes and shifted its focus to a “housing super app” to integrate home tours, financing, seller services and the company’s partner network.  Barton said that shuttering Zillow Offers had lightened his company’s balance sheet and left it in a better position to weather a slowing market.
    “It’s a great way to go into a headwind,” he said. “We can go into this headwind confidently, with our eyes focused on building out the super app.”

    It wasn’t all bad news: the (still) hot housing market in the first three months of 2022 boosted Zillow’s advertising business and helped speed efforts to wind down the home-flipping operation, called Zillow Offers. The company generated a total $220 million in adjusted Ebitda for the quarter. Analysts expected $156 million, the average in a Bloomberg-compiled survey. 

    In hopes of preventing a stock plunge, Zillow also authorized an additional $1 billion in share buybacks, but it wasn’t meant to be and ZG tumbled more than 13% after hours.

     

    Tyler Durden
    Thu, 05/05/2022 – 19:27

  • Poop-Boom: Manure Supplies Tighten As Fertilizer Prices Soar 
    Poop-Boom: Manure Supplies Tighten As Fertilizer Prices Soar 

    Manure has become a hot commodity. U.S. farmers hunting for organic fertilizer come as chemical fertilizers are in short supply or at sky-high prices. According to Reuters, soaring demand for manure has unleashed a poop shortage. 

    “Manure is absolutely a hot commodity,” said industry consultant Allen Kampschnieder, who works for Nebraska-based Nutrient Advisors.

    Kampschnieder said cattle feeders selling waste are sold out for 2022. “We’ve got waiting lists,” he said. 

    Farmers quickly switched to animal manure, a mixture of animal feces and straw, because the prices for industrial fertilizer jumped since the European natural gas crisis in the winter of 2021 and Western sanctions on Russia for invading Ukraine in March. 

    This week, Canada-based Nutrien Ltd., the world’s largest fertilizer company, warned that fertilizer disruptions “could last well beyond 2022.” If so, this could drive even more farmers into spreading poop on fields. 

    Agriculture experts say manure is not a complete replacement for chemical fertilizer because it lacks some nutrients. Plus, there’s not enough to overtake the chemical fertilizer market share in the U.S., hence why shortages are already materializing. 

    Meanwhile, the Biden administration said it was great news chemical fertilizer shortages were happening because it would force farmers to “go green” by using “natural solutions like manure.” 

    However, Chris Jones, a research engineer and water quality expert at the University of Iowa, said manure is not all that green. If spread on fields, manure can cause serious water contamination issues to nearby streams, lakes, and groundwater. 

    Going green comes at a cost … but that has yet to stop demand as farmers must use some form of crop nutrients to maintain robust yields at the end of harvest. 

    “We’re definitely seeing farmers move toward manure with the increase in fertilizer prices,” said Jim Monroe, spokesperson for Smithfield Foods, the world’s largest pork producer. 

    Kampschnieder said that farmers across the country are sniffing out new poop supplies without any luck. This has caused solid manure in Nebraska to jump to $11 to $14 per ton, up from $5 to $8 per ton. 

    The poop boom has also moved into heavy machinery and equipment needed to spread manure on fields. It’s a stinky business, but a lot of money is being made. 

    “We have people looking for equipment right away, and we’re sold out for six months,” said Husky Farm Equipment Ltd.’s President Walter Grose. His company sells spreading equipment and can’t keep up with demand. 

    Dan Andersen, an associate professor at Iowa State University who specializes in manure management, warned there’s not enough manure in the U.S. to replace commercial fertilizer completely. 

    There’s also a risk that manure could become even more valuable in the second half of this year, as U.S. livestock herds are expected to decline. This means poop production will shrink, shooting up prices even further. 

    Demand for poop is soaring under the Biden administration partly because they sanctioned Russia and Belarus (the world’s top fertilizer exporters) for the invasion of Ukraine. The admin’s ability to spin the transition of the chemical fertilizer to manure because it’s the “green” thing to do is nothing short of disinformation. As for now, US farmers are desperate for poop, and supplies are tight.

    Tyler Durden
    Thu, 05/05/2022 – 19:20

  • Obama, Biden Largely To Blame For $1.6 Trillion Student Debt Crisis: Author
    Obama, Biden Largely To Blame For $1.6 Trillion Student Debt Crisis: Author

    By John Ransom of The Epoch Times

    As President Joe Biden considers some form of loan forgiveness for college borrowers, student loans in America have been a slow-boiling crisis for almost a decade now.

    U.S. President Joe Biden gives remarks before meeting with small business owners in the South Court Auditorium of the White House in Washington on April 28, 2022.

    One expert critic who has been following the crisis lays much of the blame for the $1.6 trillion loan debacle at the feet of two men at the very top of the U.S. government: former President Barrack Obama and Biden.

    “This is far worse than the Savings and Loan crisis, or the sub-prime auto crisis and even the subprime mortgage crisis,” Allen Collinge, author of the book “The Student Loan Scam: The Most Oppressive Debt in U.S. History and How We Can Fight Back,” told the Epoch Times.

    “These two guys are some of the people most responsible for permanently saddling so many Americans with debt for which they have no way out but dying,” Collinge added.

    Two factors have come together, said Collinge, to create what he calls the biggest loan crisis in U.S. history.

    The first was the removal of bankruptcy protections that people enjoy from all other debt in America.

    “Among all living, serving elected officials, Biden literally is most culpable for removing bankruptcy protections from these loans, which really is the core of this problem,” said Collinge, who runs an organization called Student Loan Justice, which is seeking cancellation of all student loan debt in return for the end of the federal student loan program.

    Serving as a member, and then eventually, as the chairman of the Senate Judiciary Committee, Biden was instrumental in removing bankruptcy protection from, at first, government-backed student loans, and then, from privately-made student loans.

    “Joe Biden bears a large amount of responsibility for passage of the bankruptcy bill,” Ed Boltz, president of the National Association of Consumer Bankruptcy Attorneys, told International Business Times in 2015.

    Then Came Obama

    Those pieces of legislation that denied students bankruptcy protection dove-tailed into the rapid expansion of student loans for which then-President Obama stumped in 2010 as he federalized the student loan program

    To get students to borrow more, Obama pulled out all the stops, as the Congressional Budget Office (CBO) claimed the move to federalization would save the country $60 billion.

    “This is great for the country,” Then-Education Secretary Arne Duncan told NPR in an interview at the time the measure was approved.

    “It’s one of these sort of miraculous, once-in-a-lifetime opportunities, and we could put $60 billion minimum there behind students simply by removing subsidies to banks and not going back to taxpayers for another dime,” Duncan added.

    Source: Congressional Budget Office, using data from the Department of Education’s National Student Loan Data System.

    Then the president sent out First Lady Michelle Obama as the face of an effort which the Obama White House called “Reaching the ‘North Star’ by 2020,” which encouraged everybody to go back to some sort of higher education institution and get another degree, financed of course, by the U.S. government.

    Students were encouraged to take out student loans that were termed by the White House “financial aid eligibility that can make college affordability a reality.”

    During the Obama years, student loans climbed from about $700 billion to nearly $1.4 trillion, edging out credit card debt by 2012.

    Prospective students were told to host their own “signing-day” party where they signed up with a college, university, or vocational school for higher education, just like college football players and basketball players do when they signed on with schools.

    The signing day came with its own 16-page instruction booklet from the White House that told students “an education is worth way more than just a higher paycheck—it’s the most valuable asset a person can ever have. It is something they will have their entire life.”

    One question that remained unanswered in those books, however, was how students would pay off their debt.

    But Obama’s efforts paid off as student debt rose from $12,434, per student debtor in 1992, according to the Pew Research Center, to the $40,904 that’s owed per student debtor today, according to EducationData.org.

    Increasingly, it looks like student loan debt is debt that will follow students their entire life; a debt that has turned that “asset” the White House told them to prize, into a millstone around students’ necks.

    And that $60 billion in savings that was forecasted by the CBO that then-Education Secretary Duncan was touting? It turns out that instead of saving the country $60 billion, it cost $400 billion, not including any loan forgiveness.

    “CBO miscalculated the cost of the Healthcare and Reconciliation Act [that federalized student loans] by $503 billion, before factoring in President Biden’s student loan bailouts. Congress may not have passed this bill had CBO appropriately scored it,” House Republicans wrote in a letter this week to CBO Director Philip Swagel, demanding to know how the CBO got the figures so wrong.

    The Epoch Times has reached out to the White House, CBO, and Obama for comment.

    The Obama-Biden Legacy Comes Due

    According to figures gathered by Collinge that he gleaned from the Department of Education (DOE), 63 percent of all money borrowed in student loans are from people over the age of 35, who on average owe $41,900 worth of debt.

    That compares to the under-35 crowd which has an average debt of $25,300.

    “The big growth in loans has been in graduate schools,” Jason Delisle, now a research fellow at the Urban Institute think tank, told PBS in 2017, sounding an early alarm bell.

    “Yet there’s just no heat on what are people getting for these degrees. On the undergraduate side, there are loan limits and concern around defaults and earnings. On the graduate school side, there’s none of that,” added Delisle.

    And graduate studies are big money makers for schools, often making the difference between being profitable and closing down, say some experts.

    Slate recently called Master’s degree programs “the biggest scam in higher education,” citing one expert who called schools’ Master’s programs “largely unregulated cash cows that help shore up their bottom line.”

    Even before the pandemic hit, the DOE said only one in four borrowers were paying down both principal and interest on loans.

    While it’s bad in every state, especially hard hit by student borrowing are the states of the Deep South.

    The worst-hit is Mississippi where the debt to income for student loans is nearly 1:1.

    According to Collinge, what makes this loan crisis different than, say, the Savings and Loan crisis of the 1980s or the subprime mortgage crisis of the 2000s is the unlimited collection powers of the federal government, the lack of any statute of limitations on the debt and the fact that the debtors have no recourse to bankruptcy protections that our Founders intended them to have.

    He cited one documented case where he shows a debtor who borrowed $26,000 as a student loan has paid $93,593.54 in interest payments and less than $1.00 of principal.

    As of today, the principal balance is still $132,174 for this 59-year-old woman facing retirement shortly.

    Screenshots showing the loan repayments and debt outstanding on a 59-year-old woman’s student loan. (Provided to The Epoch Times)

    “The harm caused by this predatory lending system created by Biden—and others—and exacerbated by Obama, is particularly acute for seniors, who are seeing their social security and disability income garnished, often despite having repaid far, far more than they originally borrowed,” said Collinge.

    This failure to disclose the actual terms upon which borrowers are taking out loans was a great concern to the federal government during the subprime mortgage crisis that saw the government take action against mortgage lenders who paid fines of over $234 billion for actions that are essentially fraudulent, with at least 59 bankers going to jail.

    But somehow, when the federal government started loaning the money to students, those same rules stopped applying.

    “If any other lending system did this, it would be criminal, people would be in handcuffs,” concluded Collinge.

    So as the argument rages in Congress about whether student loans should be forgiven, or go into collection, Collinge wants people to remember one simple thing: Stop listening to the people who actually caused the problem to begin with.

    Tyler Durden
    Thu, 05/05/2022 – 19:00

  • Why Did The Market Just Break? Nomura Explains
    Why Did The Market Just Break? Nomura Explains

    Yesterday, while stocks were surging in the aftermath of the Powell presser during which the Fed chair took away the possibility of a 75bps rate hike, we joked that the bullish market reaction is precisely the opposite of what bulls – or Powell – want…

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    … as the easing in financial conditions (i.e., higher stocks) would undo almost all of the tightening from the incremental 50bps rate hike (first of many… or not many, now that the BOE confirmed that all developed central banks are hiking right into a recession). And just to make sure the market understood what was going on, we repeated it again this morning.

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    Which brings us to today’s remarkable U-turn in stocks, and the complete reversal in stocks observed yesterday.

    But first, a quick recap of what sparked the post-Fed rally, which as we explained yesterday was nothing more than the latest giant gamma squeeze, an observation confirmed this morning by Nomura’s Charlie McElligott who writes the following:

    I believe the scenario which might have scared [Powell] the most would have been going so hard with the potential “50bps May / 75bps June / 75bps July” which would have gotten them to “Neutral-ish” by end of Summer and stuck sitting on their hands…but then, risk being caught in a situation where the MoM inflation data stays persistently higher while unemployment data makes new lows—which would then see the market “expect even more” again, off what was already a “75bps hikes prior” and risking an enormous “policy / communications error” hawkish-escalation “hard landing” accident

    As this was clearly then perceived by a VERY front-footed “hawkish” market as “UNDER-delivering” on said expectations for a “hawkish messaging,” we then saw Stocks blow higher thereafter, thanks to a massive “Short Gamma” squeeze and the corroborated “Vanna sling-shot” feedback loop we have been discussing, as implied Vols were just clobbered with the “hawkish left-tail” then viewed as almost essentially “removed” from the scenario distribution going-forward.

    Precisely what we said yesterday, but recall we also said the following: “while it is easy to turn optimistic here, a warning: the last thing the Fed wants is for its 50bps rate hike – the biggest in 22 years – to be viewed as a green light to more risk on. In fact, if we indeed see stocks surging in the next few days, we fully expect the next crew of Fed talking heads which will hit the mic as soon as Friday to warn that not only is a 75bps – and even as 100bps – rate hike on the table, but that an emergency, inter-meeting announcement is distinctly positive if algos ignore the Fed call at their own peril.”

    Which brings us to the even more important question of “where to from here” which prompted a witty rejoinder Charlie McElligott who writes today that “a client said something which struck me two days ago: “Bulls and Bears both want a rally.”

    That, of course, corroborates with what we said yesterday and Nomura’s feedback from many in the “impulse FCI tightening” bear-camp, who have been saying they wanted to fade a large post-Fed relief / mechanical rally.

    To the Nomura strategist, this then means the best way to continue trading this environment is “Short Vol, Short Delta.”

    Practically, key levels for Bulls to reclaim from here are the “Zero Gamma” lines—where it truly feels that “THE” force which continues to drive the market are these “short Gamma” hedging pinch-points, where particularly SPX and QQQ are within reach—but still below—reclaiming this as a “stabilizing” force moving-forward:

    • SPX / SPY $Gamma -$1.2B (jumping up to 24.2%ile now), “Zero Gamma” neutral line up at 4314 (currently nearing “Neutral Gamma vs Spot” but still “Short”)
    • QQQ $Gamma +$139.9mm (jumping up to 60.0%ile now), “Zero Gamma” neutral line up $327.02 (currently nearing “Neutral Gamma vs Spot” but still “Short”)
    • IWM $Gamma -$96.1mm (jumping up to 36.4%ile now), “Zero Gamma” neutral line up at $200.93 (currently still VERY “Short Gamma vs Spot”)

    Charlie then looks at history to make an “analog” observation; specifically he took a look at days when the Fed hiked Rates and the SPX was up by more than either +1% or more than +2%. The read?  Both show forward returns are locally “mixed at best” with a median SPX trade that is LOWER out 3m thereafter for both “triggers” (which is very rare for 3m windows in SPX tbh)…while revealing some especially “cringe” dates on the backtest:

    1% moves on Fed hikes:

    2% moves on Fed hikes:

    McElligott concludes by noting that the Fed’s “reset” of expectations to “buy time” for data to fit their view “feels risky to me — I mean, we are talking an attempt at threading the needle, but with a MOAB — as it risks both another “hawkish escalation” down the road which would almost certainly then see the market price “policy error / hard landing” bets even more aggressively, as the Fed would then be pushing into outright “restrictive” territory.”

    Of course, by extension if a market rally is the opposite of what bulls wanted  yesterday, pushing into “outright restrictive” territory – i.e., accelerating the next recession – is just what the bulls need, as it means rate cuts and a fresh QE can’t be far behind. In fact, today’s crash is precisely what the bulls want…

    More in the full note available to professional subscribers in the usual place.

    Tyler Durden
    Thu, 05/05/2022 – 18:55

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May 05

Today’s News 5th May 2022

  • EU Takes Aim At Russia's Ability To Insure Oil Transport In 'Iran-Style' Sanctions Escalation
    EU Takes Aim At Russia’s Ability To Insure Oil Transport In ‘Iran-Style’ Sanctions Escalation

    As part of the new ‘imminent’ sanctions on Russia – to include a phased ban on all Russian oil by the end of the year – it seems the European Union is ready to escalate even further, taking action to and beyond all-encompassing Iran-style sanctions. 

    Now it’s mulling going after Russia’s ability to even ship oil on the high seas with a proposed ban on European vessels and companies’ ability to provide services to Russian shipping entities. As Bloomberg is reporting Wednesday, the action would constitute “a move that could dramatically impair Moscow’s ability to ship its oil anywhere in the world.”

    Image: Greenpeace protesters have literally tried to attack tankers believed carrying Russian oil

    If such a ban on Russia’s access to European insurers were enacted, this would leave Russian companies exposed to the tune of multiple billions of dollars every time a single tanker leaves port, given risks like accidents and oil spills can bring with it such a price tag in terms of claims and legal action.

    Russian energy companies would then be left with few or no alternatives, writes Bloomberg: “While member states are still wrangling over the terms, it’s a potentially powerful tool because 95% of the world’s tanker liability cover is arranged through a London-based insurance organization called the International Group of P&I Clubs that has to heed European law.”

    The report makes direct comparison of such a course of action to a key way that Washington has for years been able to severely limit Iran’s ability to transport of crude, forcing the Islamic Republic to cover its risks directly.

    But huge hurdles still remain in terms of inter-EU unity on a Russian oil embargo, given the rise in countries demanding exemptions – led most notably by Hungary and Slovakia. And further erecting major hurdles for European companies is expected to be even more controversial given the ripple effect at home.

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    The ban would prevent any European entity or individuals from transporting Russian oil anywhere in the world, which will be particularly painful to the economies of smaller Mediterranean countries like Greece, Cyprus and Malta  – which play an outsized role in the European shipping and transport industry.

    These countries have reportedly already registered their opposition to such a drastic punitive plan, which they say will only blowback on European companies and their ability to do business.

    Tyler Durden
    Thu, 05/05/2022 – 02:45

  • The Long, Lucrative & Bloody Road To World War 3
    The Long, Lucrative & Bloody Road To World War 3

    Authored by Connor Freeman via The Libertarian Institute, 

    Well, this war in Ukraine will last “months and years.” At least, that is what the leaders of the D.C. foreign policy blob, the media, President Joe Biden’s men, Pentagon and NATO leadership have decided. Their plan is to pour oil on the flames and keep the fire raging. Also, Americans are going to have to cough up the dough for another massive aid package, with $20 billion worth of weapons to keep the blood flowing. In total, this next package will cost the taxpayer $33 billion. With Biden’s proposed $813 billion “defense” budget for 2023, the U.S. is spending more on the military and war now than ever before in the country’s history.

    Now that we have our very own Ministry of Truth, it would appear any national debate over these polices, indeed if such a debate is ever allowed to take place, will likely have to be moderated by cockroaches and Keith Richards.

    NATO is set to expand again, bringing in Finland and Sweden. This will extend the alliance’s border with Russia by greater than 800 miles and further stoke nuclear tensions, bringing the current brinksmanship to a whole new level. Moscow plans to respond including by increasing air and naval forces in the Baltic Sea and reinforcing its Kaliningrad exclave, which lies between NATO members Poland and Lithuania, with additional nuclear weapons and hypersonic missiles. Until 2004, it was unthinkable that NATO would ever expand to Russia’s borders until that actually happened. Like most of our issues with Russia, this is all Bill Clinton and George W. Bush’s fault.

    Even as Russia’s Foreign Minister Sergei Lavrov and other leaders in Moscow repeatedly warn of nuclear conflict and World War III, even directly comparing the current situation to the Cuban Missile Crisis, senior Pentagon officials say they are not concerned.

    Images: AP

    Nor do our all-knowing rulers appear concerned with the fact that they have “almost zero” ability to keep track of the myriad sophisticated weapons systems they are sending to Ukraine. CNN quoted briefed sources saying intelligence shows American arms are falling into a “big black hole.” They say it’s worth it.

    Nor do they seem to be concerned with the Russians’ warnings regarding how the West’s weapons flood in Ukraine threatens to expand the war into NATO territory and destabilize Europe. UK Foreign Secretary Liz Truss demands the West must “double down” on arms shipments, insisting particularly on “heavy weapons, tanks, airplanes—digging deep into our inventories, ramping up production. We need to do all of this.”

    Our top diplomat Antony Blinken says the plan is regime change in Moscow, much like his boss did in March with his Polish “gaffe.” Ironically, the $47 billion in weapons and other U.S. aid pledged to Ukraine these last two months will soon surpass the State Department’s entire budget. Eat your heart out, Netanyahu!

    Secretary of Defense Lloyd Austin, former Raytheon board member, says the goal is to see Russia “weakened” to the point where it lacks even the capability to defend itself just outside its borders. As Pat Buchanan notes, this policy, whether its intended to or not, pressures the Kremlin to more seriously consider pulling its nuclear trigger.

    “We want to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine,” Austin said with a clear eye toward increasing Russian casualties and the long term destruction of Moscow’s conventional power.

    Perhaps, Austin wants to cripple Russia so severely that his Pentagon can fight a war with China, the “most consequential strategic competitor and the pacing challenge for the Department,” without having to worry so much about Moscow—deemed a second tier “acute” threat, albeit one armed with roughly 6,000 nukes—getting involved.

    Austin’s Raytheon pals are making a killing on this proxy war as well as the ancillary effects such as European NATO states, at long last, increasing their military spending.

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    As Ron Paul has written,

    One group of special interests profiting massively on the war is the US military-industrial complex. Raytheon CEO Greg Hayes recently told a meeting of shareholders that, “Everything that’s being shipped into Ukraine today, of course, is coming out of stockpiles, either at DOD or from our NATO allies, and that’s all great news. Eventually we’ll have to replenish it and we will see a benefit to the business.”

    He wasn’t lying. Raytheon, along with Lockheed Martin and countless other weapons manufacturers are enjoying a windfall they have not seen in years. The U.S. has committed more than three billion dollars in military aid to Ukraine. They call it aid, but it is actually corporate welfare: Washington sending billions to arms manufacturers for weapons sent overseas.

    By many accounts these shipments of weapons like the Javelin anti-tank missile (jointly manufactured by Raytheon and Lockheed Martin) are getting blown up as soon as they arrive in Ukraine. This doesn’t bother Raytheon at all. The more weapons blown up by Russia in Ukraine, the more new orders come from the Pentagon.

    Former Warsaw Pact countries now members of NATO are in on the scam as well. They’ve discovered how to dispose of their 30-year-old Soviet-made weapons and receive modern replacements from the U.S. and other western NATO countries.

    There is scarcely a status quo to oppose. For weeks, escalations have continued apace. London has deployed SAS troops in Kiev to train Ukrainian troops on English anti-tank weapons. The U.S. is training Kiev’s troops in Germany and two other secret locations in Europe on heavy artillery, radar systems, and armored vehicles. Washington is expanding intelligence sharing with Kiev for its war with Russia in the Donbas, providing howitzers, vehicles to carry them, and an additional 144,000 artillery rounds. Poland is sending tanks to Ukraine, Slovenia has a plan to send large numbers of T-72 battle tanks as well. The Germans will be supplying anti-aircraft tanks to Kiev and the Pentagon says an unidentified European ally is providing Ukraine with warplanes.

    London’s armed forces minister declared his government’s support for Kiev’s “completely legitimate” attacks inside Russia using British arms. This comes amid an uptick in reports of Ukrainian cross border drone and helicopter assaults including on Russian oil depots, residential areas, and villages. The U.S. and its European allies are implementing a long term policy that looks to exile Russia, looking toward a new world order where they no longer seek to “coexist” with Moscow.

    London wants Europe to cut off all Russian energy “once and for all,” which would make war more likely, impoverish innocent people, and cause massive recessions.

    The U.S., NATO, and Russian presence in the Mediterranean Sea has reached Cold War levels, as NATO builds new Eastern European battlegroups.

    In March, NATO Secretary General Jens Stoltenberg warned that any “use of chemical weapons would totally change the nature of the conflict, it would be a blatant violation of international law and would have far-reaching consequences.” This weekend, legislation for a new Authorization for the Use of Military Force (AUMF) has been introduced by Congressman Adam Kinzinger (R-IL). Kinzinger’s announcement calls the would be AUMF a “clear red line,” which would authorize Biden to deploy troops to Ukraine to fight Russians if Moscow should “use chemical, biological, and/or nuclear weapons.”

    With the almost complete bipartisan Congressional support for the renewal of Lend-Lease and other anti-Russia, pro-war legislation, it is not outside the realm of possibility that this bill and its cynical redline trap becomes law.

    For nearly two decades, Washington has funded “biological research” and other laboratories inside Ukraine. According to the head of the DoD’s Cooperative Threat Reduction Program, some of these labs may contain Soviet-era bioweapons.

    As Dave DeCamp, news editor at Antiwar.com, has reported,

    The Pentagon funds labs in Ukraine through its Defense Threat Reduction Agency (DTRA). According to a Pentagon fact sheet released last month, since 2005, the U.S. has “invested” $200 million in “supporting 46 Ukrainian laboratories, health facilities, and diagnostic sites.”

    Moscow has accused Ukraine of conducting an emergency clean-up of a secret Pentagon-funded biological weapons program when Russia invaded. The World Health Organization said it advised Ukraine to destroy “high-threat pathogens” around the time of the invasion.

    For their part, the U.S. maintains that the program in Ukraine and other former Soviet states is meant to reduce the threat of biological weapons left over from the Soviet Union. While downplaying the threat of the labs, Pentagon officials have also warned that they could still contain Soviet-era bioweapons.

    Robert Pope, the director of the DTRA’s Cooperative Threat Reduction Program, told the Bulletin of the Atomic Scientists in February that the labs might contain Soviet bioweapons and warned that the fighting in Ukraine could lead to the release of a dangerous pathogen.

    Much like previous Syrian redlines, this is practically the hawks’ invitation to bad actors seeking U.S. intervention to go ahead and launch an attack that could be plausibly blamed on our Hitler du jour to manufacture their desired casus belli.

    It seems there may be ample sites somebody could hit that would cross Kinzinger’s cleverly drawn line in the sand. And much like the CIA, Turkey, and Saudi Arabia’s al Qaeda allies in Syria, the Azov Battalion and other Nazi groups, who have taken a humiliating beating thus far in the war, are prime candidates to launch a false flag.

    If the American people do not wake up and demand an end to our government’s intervention in Ukraine, the U.S. may be directly entering this war soon.

    If Russia was doing what the U.S. and its allies are doing in Ukraine, in Mexico or Canada, in addition to the unprecedented economic war being waged, these hawks in D.C. would have pulled the aforementioned nuclear trigger months ago.

    Tyler Durden
    Thu, 05/05/2022 – 02:00

  • When The Government Plays God: The Slippery Slope From Abortions To Executions
    When The Government Plays God: The Slippery Slope From Abortions To Executions

    Authored by John W. Whitehead & Nisha Whitehead via The Rutherford Institute,

    “Abortion on demand is the ultimate State tyranny; the State simply declares that certain classes of human beings are not persons, and therefore not entitled to the protection of the law. The State protects the ‘right’ of some people to kill others, just as the courts protected the ‘property rights’ of slave masters in their slaves.”

    – Ron Paul

    The government wants to play god.

    It wants the power to decide who lives or dies and whose rights are worthy of protection.

    Delve beneath the rhetoric and spin that have turned abortion into a politicized, polarized and propagandized frontline in the culture wars, and you will find a greater menace at work.

    Abortion may be front and center in the power struggle between the Left and the Right over who has the right to decide—the government or the individual—when it comes to bodily autonomy, the right to privacy, sexual freedom, the rights of the unborn, and property interests in one’s body, but there’s so much more going on here.

    The Left would suggest that unborn babies do not have constitutional rights and the only right that matters is a woman’s right to privacy in choosing whether or not to abort a pregnancy. The Right, while fixated on saving the lives of unborn babies, seems less concerned about what happens to those lives from birth to death.

    What few seem willing to address is that in the 30 years since the U.S. Supreme Court issued its landmark ruling in Roe v. Wade, the government has come to believe that it not only has the power to determine who is deserving of constitutional rights in the eyes of the law but it also has the authority to deny those rights to an American citizen.

    This is how the abortion debate—a politicized tug-of-war over when an unborn child is considered a human being with rights—plays into the police state’s hands by laying the groundwork for discussions about who else may or may not be deserving of rights.

    Even if (as a leaked draft opinion in the case of Dobbs v. Jackson Women’s Health Organization suggests) the Supreme Court overturns its earlier rulings recognizing abortion as a constitutional right under the Fourteenth Amendment, that will not resolve the larger problem that plagues us today: namely, that all along the spectrum of life—from the unborn child to the aged—the government continues to play fast and loose with the lives of the citizenry.

    Take a good, hard look at the many ways in which Americans are being denied their rights under the Constitution.

    So, what is the common denominator here?

    These are all American citizens—endowed by their Creator with certain unalienable rights, rights that no person or government can take away from them, among these the right to life, liberty and the pursuit of happiness—and they are all being oppressed in one way or another by a government that has grown drunk on power, money and its own authority.

    If the government—be it the President, Congress, the courts or any federal, state or local agent or agency—can decide that any person has no rights, then that person becomes less than a citizen, less than human, less than deserving of respect, dignity, civility and bodily integrity. He or she becomes an “it,” a faceless number that can be tallied and tracked, a quantifiable mass of cells that can be discarded without conscience, an expendable cost that can be written off without a second thought, or an animal that can be bought, sold, branded, chained, caged, bred, neutered and euthanized at will.

    It’s a slippery slope that justifies all manner of violations in the name of national security, the interest of the state and the so-called greater good.

    Yet those who founded this country believed that what we conceive of as our rights were given to us by God—we are created equal, according to the nation’s founding document, the Declaration of Independence—and that government cannot create, nor can it extinguish our God-given rights. To do so would be to anoint the government with god-like powers and elevate it above the citizenry.

    Unfortunately, we have been dancing with this particular devil for quite some time now.

    If we continue to wait for the government to restore our freedoms, respect our rights, rein in its abuses and restrain its agents from riding roughshod over our lives, our liberty and our happiness, then we will be waiting forever.

    Already, the politicos are beating the war drums to herald the next phase of the abortion wars.

    President Biden wants voters to elect more pro-abortion rights officials to ensure that “a woman’s right to choose is fundamental.” The Senate plans to vote to codify the right to an abortion into federal law. Chief Justice John G. Roberts is opening an investigation into how the Supreme Court’s draft abortion ruling was leaked. And polling indicates that the majority of the American people want abortion to remain legal.

    Like clockwork, we find ourselves smack dab in the middle of yet another political circus that could get scary, ugly and overwhelming really fast.

    Before you get too distracted by this conveniently timed diversion that has everyone forgetting about spiking gas prices, inflation, housing shortages, and warring empires, remind yourself that no matter how the Supreme Court rules in Dobbs, it will not resolve the problem of a culture that values life based on a sliding scale.  Nor will it help us navigate the moral, ethical and scientific minefields that await us as technology and humanity move ever closer to a point of singularity.

    Humanity is being propelled at warp speed into a whole new frontier when it comes to privacy, bodily autonomy, and what it means to be a human being. As such, we haven’t even begun to wrap our heads around how present-day legal debates over bodily autonomy, privacy, vaccine mandates, the death penalty, and abortion play into future discussions about singularity, artificial intelligence, cloning, and the privacy rights of the individual in the face of increasingly invasive, intrusive and unavoidable government technologies.

    Yet here is what I know.

    Life is an inalienable right.

    By allowing the government to decide who or what is deserving of rights, it shifts the entire discussion from one in which we are “endowed by our Creator with certain inalienable rights” (that of life, liberty property and the pursuit of happiness) to one in which only those favored by the government get to enjoy such rights.

    If all people are created equal, then all lives should be equally worthy of protection.

    There’s an idea embraced by both the Right and the Left according to their biases that there is a hierarchy to life, with some lives worthier of protection than others, but there is no hierarchy of freedoms.

    All freedoms hang together.

    As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, we must never stop working to protect life, preserve our freedoms and maintain some semblance of our humanity.

    Freedom cannot be a piece-meal venture.

    Tyler Durden
    Wed, 05/04/2022 – 23:40

  • Russia's Largest Shipper Races To Sell Third Of Fleet To Satisfy Western Loans
    Russia’s Largest Shipper Races To Sell Third Of Fleet To Satisfy Western Loans

    Russia’s largest shipping firm is unloading a third of its fleet, in a move to repay loans to western banks and financiers before sanctions come into effect on May 15, according to Lloyd’s List, citing industry sources. 

    One industry insider said Sovcomflot is attempting to offload 40 of the 121 vessels it currently owns with buyers in Dubai and China. 

    The European Union and the UK have slapped Russia with a series of sanctions — one specifies that all banks must terminate Russian agreements by May 15. This means that Sovcomflot must satisfy all outstanding loans before that date, which has prompted the shipper to sell a third of its fleet. 

    “Basically, all banks and charterers have until May 15 to actually terminate the contracts, which means Sovcomflot has a very short window to pay back the loans and realistically, there is only one way it can do that and that is to sell the ships,” said one senior banker currently negotiating terms with Sovcomflot.

    Others with direct discussions of the deals said only eight vessels had been sold, with four of them finding buyers in Dubai. There are active conversations with Chinese buyers. 

    Lloyd’s List couldn’t figure out how much Sovcomflot owed western banks but said, “the last available consolidated accounts detail $2.1bn of debt, made up of short- and long-term bank loans.” 

    Here’s a breakdown of Sovcomflot’s tanker fleet as per Lloyd’s List. 

    On top of the May 15 deadline, the EU announced a proposed total ban on Russian oil imports on Wednesday, including the phase-out of Russian crude oil within six months and refined products by the end of the year. European Commission President Ursula von der Leyen said the bloc would wean off Russian oil in “an orderly fashion” (orderly, probably not …). 

    Tyler Durden
    Wed, 05/04/2022 – 23:20

  • Illegal Aliens Sue Texas Officials After Arrests For Trespassing
    Illegal Aliens Sue Texas Officials After Arrests For Trespassing

    Authored by Charlotte Cuthertson via The Epoch Times,

    A group of illegal aliens has filed a lawsuit against Texas officials for alleged constitutional violations within the governor’s Operation Lone Star criminal trespass program.

    The lawyers for the 15 plaintiffs hope to turn the case into a class action lawsuit on behalf of more than 2,000 illegal immigrants whom they say have been over-incarcerated; arrested based on race, immigration status, or national origin; as well as denied due process.

    “In particular, the Plaintiffs and the Class Members have suffered a common cause of injury, namely the violation of their Fourth Amendment and Fourteenth Amendment rights,” the lawsuit states.

    “Using state criminal law, the state of Texas and participating counties have created, and are carrying out what is, in reality, a system of state immigration enforcement that targets Black and Brown—primarily Latino—individuals for prosecution and enhanced punishment.”

    The lawyers are seeking ​​$18,000 per day for each inmate that is found to have been unlawfully incarcerated or unlawfully reincarcerated. They also seek an injunction to discontinue the Operation Lone Star program.

    The lawsuit was filed in the U.S. District Court for the Western District of Texas, Austin division.

    Texas Department of Public Safety state troopers meet up at shift-change in Brackettville, Texas, on April 18, 2022. (Charlotte Cuthbertson/The Epoch Times)

    Operation Lone Star (OLS) was launched in March 2021, and Gov. Greg Abbott beefed up the number of Texas state troopers on border roads to intercept smuggling operations and Texas National Guardsmen to augment security and observation along the border.

    The program was expanded in June last year to allow for illegal immigrants trespassing on private or state land to be arrested and prosecuted. The OLS budget funded jail space for alleged illegal immigrant trespassers, defense counsel, and prosecution resources.

    Kinney County and neighboring Val Verde County in south Texas were the first to begin the trespass prosecutions under OLS, and since then, seven more counties have joined, including Edwards, Frio, Jim Hogg, Kimble, Maverick, Uvalde, and Zavala.

    Kinney County and its sheriff, Brad Coe, are listed as defendants in the lawsuit, along with Abbott, Texas Department of Public Safety (DPS) Director Steve McCraw, and DPS Executive Director Bryan Collier.

    “Under the guise of state criminal trespass law but with the explicit, stated goal of punishing migrants based on their immigration status, Texas officials are targeting migrants,” the lawsuit alleges. “OLS targets only migrants, and only men of brown or black skin.

    “Hundreds of those arrested have waited in jail for weeks or months without a lawyer, or without charges, or without bond, or without a legitimate detention hold or without a court date.”

    A group of illegal aliens is apprehended by law enforcement on a ranch in Kinney County, Texas, on Jan. 15, 2022. (Courtesy of Kinney County Sheriff’s Office)

    County Attorney Brent Smith said his small county has struggled to keep up with the volume of prosecutions—he went from about six cases per month to more than 30 per day.

    But, he said, the law has safeguards in place to protect alleged criminals.

    “For instance, a writ of habeas corpus hearing is triggered when more than 30 days elapses before there’s a complaint filed. And when that occurs, they’re eligible to get a reduced bond or a PR bond,” Smith said in an earlier interview.

    Regarding the lawsuit, Smith told The Epoch Times on May 2 that “it reads more like the liberal media propaganda than something based in actual law and fact.”

    He spurned the racial profiling allegation. “Nowhere in the entire complaint can they point out where we didn’t arrest someone because they were white or non-Hispanic or non-Latino. If you’re breaking the law, you get arrested,” he said.

    Coe said he’s heard about the lawsuit but hasn’t been served or seen it yet.

    “It’s kind of hard to profile when a) you can’t see inside the vehicles, everybody has tinted windows. And b) it’s hard to profile when you’re sitting there waiting for somebody to show up and a group of 10 shows up and they’re all Mexicans. So how is that profiling?” Coe told The Epoch Times on April 29.

    “We’re protecting citizens, we’re protecting landowners, so I don’t really see it going anywhere, but we’ll see what happens.”

    Lt. Christopher Olivarez, DPS spokesman for the south Texas region, told The Epoch Times via email that “the department does not discuss pending litigation.”

    Kinney County Sheriff Brad Coe in Brackettville, Texas, on Jan. 18, 2022. (Charlotte Cuthbertson/The Epoch Times)

    Border Security

    The Texas legislature has approved nearly $3.5 billion for OLS since September last year.

    Since its inception, the program has been condemned by state Democrats, organizations such as the American Civil Liberties Union (ACLU), and lawyer groups for illegal immigrants.

    A group of 50 Democrats in the Texas House of Representatives wrote a letter in January urging the departments of Justice and Homeland Security to investigate the program. The ACLU filed its own 50-page complaint to the Department of Justice in December 2021.

    “Operation Lone Star uses state criminal law to target Black and Latino migrants for punishment,” the Democrats’ Jan. 26 letter to the federal agencies alleges.

    “Anti-immigrant hate is on the rise in Texas, and state and local officials are fanning the flames,” the ACLU stated in its complaint.

    Abbott has defended the program, saying it “continues to fill the dangerous gaps left by the Biden administration’s refusal to secure the border.”

    “Every individual who is apprehended or arrested and every ounce of drugs seized would have otherwise made their way into communities across Texas and the nation due to President Biden’s open border policies,” Abbott said in a statement on April 29.

    Abbott, a Republican, declared a state of disaster on May 31, 2021, as the crisis escalated. This meant most misdemeanor charges of trespassing were elevated from a Class B to a Class A misdemeanor, which carries a higher penalty. The charge is also elevated if the individual has a deadly weapon or is found more than 100 feet past the property line on agricultural land.

    The illegal aliens arrested on ranches in Kinney County aren’t turning themselves over to Border Patrol and seeking asylum, Smith said.

    “They’re being smuggled across. And then whenever law enforcement locates them, they’re running. They’re not trying to surrender at all,” Smith told The Epoch Times in an earlier interview.

    “If they were trying to claim asylum, they’d be doing that at the port of entry, or the first law enforcement they come to. But instead, they’re evading law enforcement—and they’re destroying property while they do it.”

    A group of illegal aliens is apprehended by law enforcement on a ranch in Kinney County, Texas, on Jan. 14, 2022. (Courtesy of Kinney County Sheriff’s Office)

    Kinney County has prosecuted more than 2,885 illegal aliens for trespassing and evading arrest since August last year, as well as several U.S. citizens.

    The county only has 14 male-only jail spaces, which are perpetually full. So the aliens are booked and appear before a magistrate at a tent facility in neighboring Val Verde County.

    From Val Verde, troopers transport them 100 miles away to the Briscoe Unit in Dilley, Texas, which has been repurposed to detain almost 1,000 illegal aliens who are waiting for their court cases and serving out their sentences. The Segovia Unit in Edinburg, Texas, has also been repurposed for OLS detainees.

    Kinney County’s first jury trial is scheduled for May 9, after several aliens pleaded not guilty to their trespass charges.

    Border Patrol agents made more than 1.3 million apprehensions of illegal aliens in Texas in 2021. An additional half million are estimated to have evaded capture.

    Tyler Durden
    Wed, 05/04/2022 – 23:00

  • White House Pressures Israel To Expand Military Aid To Ukraine
    White House Pressures Israel To Expand Military Aid To Ukraine

    Axios has revealed in a Wednesday report that the Biden administration last week urged Israel to begin giving Ukraine direct military aid. Israel has sought thus far during the Russian invasion to portray itself as neutral, up to this point refusing requests from Ukrainian leadership for Israeli weapons.

    However, it was only last month that Israel agreed to send what were perhaps merely symbolic shipments of helmets and bulletproof vests, which were described as for use by first responders, and not Ukraine’s armed forces.

    Pro-Ukraine demonstrators at Habima Square in Tel Aviv, via AFP

    At the moment Ukraine is reportedly seeking Israeli military communications gear and anti-drone systems, according to Axios. Tel Aviv has long sought to be careful about not angering Russia, given the two countries’ interests butt up against each other inside Syria, and relatedly Israel needs Russia’s help on the issue of Iranian influence and expansion in the region.

    So far the Israelis are said to be mulling the possibility of only providing nonlethal military aid – as they come under pressure from Washington.

    According to details offered in the Axios report, “Israel last week sent Dror Shalom, the head of the political-military bureau at the Ministry of Defense, to Ramstein Air Base in Germany for a U.S.-led meeting on sending weapons to Ukraine.”

    US officials communicated understanding of Israel’s delicate position vis-a-vis its Russian relations:

    • The Biden administration made it clear to the Israelis that the U.S. understands its complicated situation with Russia and appreciates what it has done so far in terms of aid to Ukraine, but hopes it could do more in providing military equipment, U.S. and Israeli officials said.
    • This message was delivered during a meeting between White House national security adviser Jake Sullivan and his Israeli counterpart, Eyal Hulata, at the White House last week and in conversations between the Pentagon and the Israeli Ministry of Defense.

    Meanwhile, there’s the possibility that Baltic countries in possession of Israeli weapons systems could be given the greenlight to transfer them to Kiev.

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    The timing of the above revelations could prove further awkward given the report comes amidst a worsening Israel-Russia diplomatic spat, following Russia’s foreign minister Sergey Lavrov speculating that Adolf Hitler may have had “Jewish Blood”.

    This has led to Israel demanding an official apology and retraction of the statement, which appeared intended by Lavrov to deflect when pressed on why President Putin has repeatedly said Ukraine is in the grip of neo-Nazis when its president Volodymyr Zelensky is himself Jewish. Moscow has so far refused to apologize or have Lavrov walk back the comments which came during an interview with an Italian newspaper.

    Tyler Durden
    Wed, 05/04/2022 – 22:40

  • China Bets The House On New Houses
    China Bets The House On New Houses

    Submitted by Benn Steil and Benjamin Della Rocca

    Last September, after China’s second-largest property developer, Evergrande Group, missed $131 million in interest payments, Beijing promised to rein in risky real-estate speculation. We didn’t buy it. As we wrote in November, Chinese leaders rely on frothy housing markets and lending growth to meet their politically determined annual GDP growth targets. Serious housing reform was not in the cards.

    Sure enough, Beijing soon revealed that the promise was a head-fake. In January, the government moved to make it easier for developers to pay creditors using pre-construction homebuyer funds held in escrow. In March, the National People’s Congress killed plans to introduce a national property tax and other structural reforms to reduce property speculation. Municipal authorities have subsidized young buyers’ home purchases, directed state-owned banks to slash mortgage rates, and eased home down-payment requirements.

    The state-controlled press says it is all working perfectly—speculation is being stamped out, and the housing market is “stable.” Yet home sales are plunging.

    So how does the government square this circle? It points to data showing steady prices for new homes. Our left-hand graphic above confirms this fact. But it also shows a steep decline—the steepest on record—in prices for existing homes.

    What is happening? The government cares less about prices of existing homes than new-home prices, since over-leveraged developers make their money selling new units. So, not surprisingly, it is betting the house on keeping new homes popular and profitable.

    Chinese cities have been imposing price floors and prohibiting “malicious price cuts” on new construction. They have been offering generous consumer-goods vouchers and tax cuts to buyers of new properties. All of this costly window-dressing is keeping new-home prices up and overleveraged developers afloat, even as the market for existing homes tanks. Still, real-estate analysts and Chinese developers alike widely expect new-home prices to head south soon enough.

    Falling house prices affect GDP through the so-called wealth effect—that is, consumers’ tendency to cut spending when their assets fall in value. A $100 decline in housing-market net worth, according to one U.S.-based study, lowers consumption by $2.50-5.00. In China, the housing wealth effect is likely at least this large. As the right-hand chart above shows, homes represent roughly 45 percent of Chinese household net worth. (In some cities, it is more like 70 percent.) That compares with just 27 percent in the United States.

    What does all this mean for China’s economy? If existing-home price declines bring a wealth effect at the upper end of the range above, then we would expect recent changes alone to shave roughly half a percent off China’s 2022 GDP growth. Last month, owing to omicron’s spread, the IMF revised China’s 2022 growth forecast down to 4.4 percent, 1.1 percentage points below the government’s target, although home-price effects do not seem to be part of their equation. All else equal, something below 4 percent is more likely. Of course, President Xi may be unwilling to accept 4 percent growth—in which case we can expect yet further measures to juice borrowing and home prices.

    Eventually, unsustainable debt becomes—well, unsustainable. At that point, there is a financial crisis or productivity collapse that crushes growth. Defining “eventually,” of course, is the big challenge.

    Tyler Durden
    Wed, 05/04/2022 – 22:20

  • The Legal Status Of Abortion Worldwide
    The Legal Status Of Abortion Worldwide

    According to a leaked draft opinion reported on by Politico, the U.S. supreme court has provisionally voted to overturn Roe v Wade – the landmark 1973 ruling that legalized abortion nationwide in the United States. Reproductive rights have been put under a lot of pressure in some parts of the country recently, and an analysis by the Guttmacher Institute predicts that around half of U.S. states will take advantage of Roe v Wade being overturned by banning abortions completely.

    Infographic: Which States Would End Abortion if Roe v. Wade Was Overturned? | Statista

    You will find more infographics at Statista

    However, as Statista’s Martin Armstrong notes, the story is very different elsewhere in the world.

    Infographic: The Legal Status Of Abortion Worldwide | Statista

    You will find more infographics at Statista

    In February this year, Colombia decriminalized abortion during the first 24 weeks of pregnancy. This was the latest step forward for reproductive rights in Latin America after a more conservative but nevertheless significant decriminalization in Mexico in September 2021. In January 2021, Argentina had become the largest Latin American country to legalize abortion. This occurred despite opposition from the Catholic church and represented a considerable milestone in a highly conservative region.

    Asia has also seen moves in favor of reproductive rights. Effective from the start of 2021, South Korea decriminalized abortion until the 14th week of pregnancy. In Thailand, parliament voted in January 2021 to make abortion legal within the 12 weeks, although penalties are still in place for those who terminate later in their pregnancies.

    This world map uses data from The Center for Reproductive Rights to show the state of global abortion laws at the start of 2021.

    Tyler Durden
    Wed, 05/04/2022 – 22:00

  • To Spy On A Trump Aide, The FBI Pursued A Dossier Rumor The Press Shot Down As 'Bulls**t'
    To Spy On A Trump Aide, The FBI Pursued A Dossier Rumor The Press Shot Down As ‘Bulls**t’

    Authored by Paul Sperry via RealClear Investigations,

    The FBI decision to spy on a former Trump campaign adviser hinged on an unsubstantiated rumor from a Clinton campaign-paid dossier that the Washington Post’s Moscow sources had quickly shot down as “bullshit” and “impossible,” according to emails disclosed last week to a D.C. court hearing the criminal case of a Clinton lawyer accused of lying to the FBI.

    AP

    Though the FBI presumably had access to better sources than the newspaper, agents did little to verify the rumor that Trump foreign policy adviser Carter Page had secretly met with sanctioned Kremlin officials in Moscow. Instead, the bureau pounced on the dossier report the day it received it, immediately plugging the rumor into an application under the Foreign Intelligence Surveillance Act to wiretap Page as a suspected Russian agent.

    The allegation, peddled to both the press and FBI in the summer of 2016 by Fusion GPS, an opposition research firm hired by Hillary Clinton’s campaign to dig up dirt on Trump during the presidential race, proved to be the linchpin in winning approval for the 2016 warrant, which was renewed three times in 2017 – even though the FBI learned there were serious holes in the story and had failed to independently corroborate it.

    The revelations of early media skepticism about the Trump-Russia narrative before journalists embraced it are included in a 62-page batch of emails between Fusion and prominent Beltway reporters released by Special Counsel John Durham, who is scouring the FBI’s investigation of the Trump campaign for evidence of abuse and criminal wrongdoing.

    The documents suggest that some journalists, as keen as they were to report dirt on Trump, were nevertheless more cautious than FBI investigators about embracing hearsay information served up by Clinton agents. (The FBI declined comment.) The new material also offers a look at the lengths to which those working on Clinton’s behalf went in order to seed the government with unverified rumors about Trump and Russia that amounted to a disinformation campaign. Among those targeted were powerful Democratic members of Congress, including House Intelligence Committee Chairman Adam Schiff, who proved to be a willing collaborator.

    Trump as ‘Manchurian Candidate’

    The story of high-level Kremlin meetings didn’t ring true with some in the press, who checked with sources in Moscow and pushed back on Fusion GPS. But journalists’ interest in the story remained high during the campaign.

    In an interview, Page said he was flooded with calls during the summer of 2016 from Washington journalists, including veteran reporters from the Washington Post, the New York Times and the Wall Street Journal. He said Fusion had misled them into believing they were working on the story of their lifetimes – that a real-life “Manchurian candidate,” or Russian sleeper agent, was running for president.

    “Each news outlet kept calling me,” he said. “One by one.”

    Page said he strenuously denied the accusations.

    “It was B.S.,” he said. “I tried to warn them.”

    Peter Fritsch and Glenn Simpson of Fusion GPS: Journalists were skeptical, at least for a time. YouTube/NBC News

    As eager as journalists may have been to make Trump appear to be a Kremlin operative, some were skeptical about what Fusion was telling them about Page. Among those were now former Wall Street Journal foreign affairs correspondent Jay Solomon, who used “Manchurian candidate” in a July 2016 email exchange with Fusion, expressing his doubt.

    “Everyone wants shit on this,” insisted Fusion co-founder Peter Fritsch, a former Journal reporter himself, in an attempt to coax his old colleague Solomon into covering the story.

    Fritsch then outlined the rumors Fusion had just received from Christopher Steele, a former British intelligence officer his firm had hired to help tie Trump to Russia as part of its contract with the Clinton campaign. Those rumors, contained in a series of memos known as the Steele dossier, were shared with the FBI, including “Intelligence Report 94” dated July 19, 2016. It claimed that during a July 2016 trip to Moscow, Page attended a “secret meeting” with Putin crony Igor Sechin to discuss lifting Ukraine-related sanctions against Russia. The dossier also alleged that Page met with Kremlin official Igor Divyekin to share compromising information about Clinton with the Trump campaign.

    An ‘Easy Scoop,’ Said GPS

    “The easy scoop waiting for confirmation: that dude carter page met with igor sechin when he went to moscow earlier this month,” Fritsch stated in a July 26, 2016, email pitching the story to Solomon. “sechin discussed energy deals and possible lifting of sanctions on himself et al. he also met with a senior kremlin official called divyekin, who told page they have good kompromat on hillary and offered to help. he also warned page they have good kompromat on the donald.” (“Kompromat” is compromising information typically used in blackmail.)

    Added Fritsch, referring in part to the mass leak of Democratic emails by WikiLeaks before the 2016 Democratic National Convention in late July: “needless to say, a senior trump advisor meeting with a former kgb official close to putin, who is on a treasury sanctions list, days before the republican convention and a big russian-backed wikileak would be huge news.”

    Indeed it would be – if it were true. “Thanks for this,” Solomon said. “Will run down.”

    But later that day, Solomon reported back that “Page is neither confirming nor denying,” so Fritsch suggested he “call adam schiff or difi,” referring to the then-ranking Democrat on the House Intelligence Committee and Sen. Dianne Feinstein, a top Democrat on the Senate Intelligence Committee. It is not clear what information Fritsch expected the two Democrats to provide. (Schiff would later read the same raw dossier rumors about Page into the congressional record during a public hearing about Trump’s alleged Russian ties.)

    Three days later, Fusion’s attempts to plant their rumor in influential media outlets hit more resistance. Another Journal alumnus, Tom Hamburger, said he was “getting kick back” while trying to confirm the rumor for the Washington Post, where he worked on the paper’s national desk.

    “That Page met with Sechin or Ivanov. ‘Its [sic] bullshit. Impossible,’ said one of our Moscow sources,” Hamburger reported back to Fusion co-founder Glenn Simpson, who also previously worked for the Journal. (The rumor included Sergei Ivanov, a top Putin aide.) The Post’s Moscow bureau chief at the time was David Filipov. Hamburger added that another reporter he knew “doesn’t like this story” and was passing on it.

    “No worries, I don’t expect lots of people to believe it,” Simpson replied. “It is, indeed, hard to believe.”

    As Fusion was pushing the rumors to reporters that July, its subcontractor Steele was pushing them to FBI agents, who received copies of his dossier earlier in the month. Steele also briefed a top Justice Department official, Bruce Ohr, on the Carter Page rumors on July 30 during a breakfast at the Mayflower Hotel in D.C., and asked Ohr to relay them to FBI brass. The next day, the FBI officially opened its Crossfire Hurricane investigation targeting Trump advisers – though the bureau says this decision was based on a tip it had received from an Australian diplomat.

    For his part, Hamburger still pursued the story, asking for documents on Page later that month; and Fusion recycled the false rumor in an internal report, separate from the Steele dossier, which it emailed to Hamburger and another Post reporter in September. 

    The report, which Fritsch claimed that “one of our [research] associates wrote,” went beyond even the dossier. It asserted that Page’s July 8 speech at the New Economic School in Moscow (where President Obama had also once spoken) was “concocted to give Page a public explanation for his trip to Moscow, which sources say included secret meetings with top Kremlin officials, where the American presidential campaign and U.S. sanctions against Russia were both discussed.”

    Fritsch did not say who the Fusion “sources” were. But around the same time, he and Simpson brought Steele to Washington to brief journalists from the Post, the New York Times, CNN, and Yahoo News on Page in a private room at the Tabard Inn, a hotel-bar long a favorite of Washington scribes.

    Fusion had finally found a media outlet to take the bait it had been chumming out to reporters for months. After meeting with Steele for about an hour, Yahoo News’ Michael Isikoff ran with the rumors in a September 23 online article, which the FBI then used to corroborate the dossier in its initial October 2016 FISA application, even though the supposed corroboration was redundant: Steele and his dossier were Isikoff’s source for the story. (Isikoff, who did not respond to requests for comment, would later write in a 2018 book he co-authored, “Russian Roulette,” that the rumors about Page were just “pillow talk.”)

    The Clinton campaign jumped on what it called Isikoff’s “bombshell report” and heavily promoted it on social media. Clinton campaign official Glen Caplin issued a statement republishing the Yahoo piece in full and proclaiming: “It’s chilling to learn that U.S. intelligence officials are conducting a probe into suspected meetings between Trump’s foreign policy adviser Carter Page and members of Putin’s inner circle while in Moscow … [T]his report suggests Page met with a sanctioned top Russian official to discuss the possibility of ending U.S. sanctions against Russia under a Trump presidency – an action that could directly enrich both Trump and Page while undermining American interests.”

    Added Caplin: “This is serious business and voters deserve the facts before election day.”

    But the media never reported the real facts behind the story – that it was all based on Clinton campaign opposition research – which allowed the rumors to survive without any real scrutiny for years.

    The Washington Post eventually stopped paying attention to the red flags surrounding the dossier. The newspaper seized on other rumors Fusion fed reporters from the Clinton-paid document.

    Hamburger, for one, later bit on a tip that the source for the most explosive allegations in the dossier was a Trump supporter with Kremlin ties. He reported in 2017 that Sergei Millian was behind the claim that Russian President Vladimir Putin had compromising sex tapes of Trump and that he and Trump were engaged in a “well-developed conspiracy” to steal the 2016 election.

    However, the Post had to retract his stories after Special Counsel John Durham last year disclosed that Millian was fabricated as a source. The prosecutor indicted Steele’s “primary subsource,” Igor Danchenko, for lying to the FBI when he told agents that Millian was a source for the dossier. Millian had nothing to do with the dossier, as RCI reported. Danchenko, who awaits trial, apparently made it all up.

    Hamburger did not respond to repeated requests for comment.

    ‘Pushed It Over’ the Line

    Carter Page, who is suing the former corporate parent of Yahoo News for defamation, suggested anti-Trump bias blinded the media to glaring problems with the dossier. But even more alarming, he said, is how FBI leaders, whose text messages reveal that they shared the media’s hatred for Trump, were even more reckless in gunning for him. Page said it’s outrageous that, at least initially, the press seemed to have “higher ethical standards” than FBI headquarters.

    On Sept. 19, 2016, the FBI’s Crossfire Hurricane team formally received Steele’s dossier Report 94 alleging Page’s secret Kremlin meetings, according to Justice Department Inspector General Michael Horowitz, who detailed the FBI’s handling of the rumors in a 2019 report. That same day, the team began discussions with department lawyers “to consider Steele’s reporting as part of a FISA application targeting Carter Page.”

    In an email to attorneys, FBI Supervisory Intelligence Analyst Brian Auten forwarded an excerpt from Steele’s report and asked, “Does this put us at least *that* much closer to a full FISA on [Carter Page]?” The FBI agent handling the case said the rumors from Steele “supplied missing information in terms of what Page may have been doing during his July 2016 visit to Moscow.”

    The attorneys thought it was a “close call” when they first discussed a FISA targeting Page in early August, Horowitz relayed in his report, but the Steele reporting in September “pushed it over” the line in terms of establishing probable cause. 

    In the run-up to the FBI securing approval for the FISA request in late October 2016, the bureau tasked an undercover informant, Stefan Halper, to question Page about the alleged meetings with Kremlin officials. Halper struck out. In a conversation Halper recorded surreptitiously, Page not only denied huddling with Sechin and Divyekin but said he had never even heard of Divyekin. The FBI decided not to include these inconvenient facts in its FISA warrant application, an omission the Justice Department’s inspector general found striking.

    “The application did not contain these denials even though the application relied upon the allegations in Report 94 that Page had secret meetings with both Sechin and Divyekin,” the Horowitz report noted.

    It wasn’t the only exculpatory evidence the FBI left out of its FISA applications. It also omitted information it possessed showing that Page, who had once worked in Moscow as a Merrill Lynch investment banker, had earlier assisted the FBI in catching a Russian spy, as RealClearInvestigations first reported. The former Navy lieutenant also previously helped the CIA monitor Russia, something an FBI attorney deliberately hid from the FISA court. (The lawyer, Kevin Clinesmith, was recently convicted of charges related to his doctoring of a government email documenting Page’s role as a CIA source.)

    In early 2017, as the FBI was preparing to reapply for wiretaps on Page, Steele’s primary subsource Danchenko told Auten and other FBI officials that he had made it clear to Steele that he had only heard a rumor that such clandestine meetings might take place but not that they actually occurred as Steele wrote in his dossier. The FBI nonetheless omitted from subsequent FISA renewal applications the revelation of Danchenko backing away from the critical piece of information supporting probable cause and admitting it was merely hearsay.

    In the end, “The FBI was unable to determine whether a meeting between Sechin and Page took place,” Horowitz wrote in his report.

    Page said it’s “chilling” that the nation’s most powerful police force could act so cavalierly, disregarding basic investigative procedures like verifying tips and rumors before obtaining wiretaps on a U.S. citizen.

    Worse, he said, is how the FBI misled the secret FISA court. In a 2020 review of the applications, the powerful court determined that at least two of the surveillance warrants were invalid and therefore illegal. Page is now suing both the FBI and Justice Department for $75 million for violating his constitutional rights.

    Tyler Durden
    Wed, 05/04/2022 – 21:40

  • CIA Director Traveled For Secret Meeting With Saudi Crown Prince To Heal Souring Ties
    CIA Director Traveled For Secret Meeting With Saudi Crown Prince To Heal Souring Ties

    It was revealed this week in The Wall Street Journal that CIA director William Burns recently traveled to Jeddah, Saudi Arabia where he held a secretive meeting with Crown Prince Mohammed bin Salman.

    The purpose of the publicly unannounced visit, held in mid-April, appears to have been another attempt to try and heal souring relations with the Biden administration after the White House has been pressuring the kingdom to rapidly boost oil output as a vital backstop amid fears over unpredictable supply due to Russia’s war in Ukraine, and as Europe readies a controversial embargo on Russian oil.

    Saudi tensions have grown with Washington also over the Iran nuclear deal, which though on the ropes has been declared ‘not dead yet’ by the US administration. Both Israel and Saudi Arabia have in unison sought to torpedo progress in Vienna. US pressure to wind down the war in Yemen has also frustrated the Saudis, which have perhaps grown used to the blank check they were given to execute large-scale airstrikes on Yemenis for years prior going back to 2015.

    President Biden had also in the recent past (while on the campaign trail) referred to crown prince MbS as a “pariah” in relation to the murder of journalist Jamal Khashoggi. 

    “It was a good conversation, better tone than prior U.S. government engagements,” one US official was cited in WSJ as saying of the CIA chief’s meeting with MbS.

    This appears a far better result than when national security adviser Jake Sullivan was dispatched to Riyadh last year:

    According to a previous WSJ report, in September 2021 MbS shouted at US National Security Adviser Jake Sullivan after being pressed on the murder of Saudi journalist Jamal Khashoggi.

    At the time, MbS reportedly told Sullivan that the US can forget about asking OPEC to increase oil supplies to lower prices.

    Since then, OPEC has maintained its quotas despite pressures from the west to increase output following fuel shortages due to the sanctions against Russian energy exports. OPEC member states have opted to maintain ties with Moscow.

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    In late March, as the Ukraine war raged and Yemen’s Houthis began to mount more daring missile and drone attacks on Saudi territory, the kingdom’s energy ministry stressed that Saudi Arabia will “not be held responsible” for any shortage of oil supplies to global markets. 

    Meanwhile the Saudis have been enjoying a windfall amid steadily rising oil prices, leaving little incentive to bow to the immediate urgings of Washington, which is on the one hand trying to severely punish Moscow for its Ukraine war, but on the other attempting to mitigate blowback on global energy supply and prices, and Western consumers.

    Tyler Durden
    Wed, 05/04/2022 – 21:20

  • Tamny: The Dollar Is 'Mighty' In the Way That Kim Jong Un Is 'Tall'
    Tamny: The Dollar Is ‘Mighty’ In the Way That Kim Jong Un Is ‘Tall’

    Authored by John Tamny via RealClearMarkets.com,

    Were he around, Adam Smith would marvel. All this talk of a “strong,” “weak,” or as is often said lately, a “mighty” dollar. Wait, what? Money just is, yet pundits of the moment quite literally act as though money grows on trees such that it grows “stronger” today, but perhaps not tomorrow. No, the money discussion isn’t serious. Again, Smith would be aghast.

    He would be given his common sense understanding that money’s sole purpose is as a measure to facilitate the exchange of goods and services. Producers of actual goods and services quickly happened on the blinding glimpse of the obvious that barter was inefficient, thus necessitating money. A common agreement among producers about a measuring stick of value would enable producers of varied goods and even more varied wants to trade with each other.

    At which point stability of the unit of value (money) was of utmost importance. Since money flows logically signaled the exchange of products and services for products and services, stability of the unit mattered. A vintner providing his wine for “dollars” logically wanted the money taken in for the wine to command equal value in the marketplace.

    All of which explains the eventual migration to gold. The appeal of the yellow metal wasn’t its shininess, or religious factors, or something else unrelated to exchange. Gold came to define money because the producers who comprise the market realized that it was the commodity least affected by everything else. Put another way, gold was remarkably stable. Which meant it was and is the ultimate money. Producers want equal value for their production, period.

    That gold still is the ultimate definer of money will logically trigger some in our midst, and without regard to political persuasion. Supposedly gold is “yesterday,” supposedly it’s the stuff of monetary cranks, or conspiracy theorists. In a sense it is. There are a lot of oddballs out there who are for what they imagine is a “gold standard,” and they’re for it without a clue of what gold’s historical purpose as a definer of money was. Oh well, no big deal. Fringe attaches itself to all ideas in some shape or form. That it does in no way vitiates the simple and modern truth that gold remains the ultimate money precisely because it remains the commodity least affected by everything else.

    Evidence supporting the above claim is $7 trillion in daily currency trading. Before President Nixon severed the dollar’s link to gold in 1971 (and by extension, the world’s currency link to gold), currency markets were largely non-existent. With good reason. With the dollar defined as 1/35th of a gold ounce, and the world’s currencies either explicitly or implicitly defined in terms of the dollar, currencies were very stable. Nothing to trade. That there’s so much trading today is powerful evidence that producers the world over still require stable money to exchange, which explains the frenzied “currency markets.” Something must mitigate the tautology that is currency instability wrought by money lacking a standard, hence the trillions in daily trading. When money had a commodity definition, it just was. Like a foot, inch, or minute, money was the quiet aspect of commerce that facilitated actual commerce. Again, pre-1971 “currency trader” wasn’t a profession. Money was as Smith defined it in The Wealth of Nations.

    Which is why he would once again marvel at the discussion of money today? The dollar is “strong”? How? Why would money be anything but a constant measure of value? Exactly.

    Still, the dollar is said to be strong today. It’s well up against the yen, the euro, the pound, etc. Okay, but what does that mean? There has to be context. Think about it. North Korean leader for life is Kim Jong Un is said to be 5’7”, or 5’4” without lifts in his shoes. In that case, Kim would be tall around 5-year old kids, but rather short around 35-year olds.

    The Wall Street Journal’s Joseph Sternberg claims the dollar is “mighty,” but he bases the claim on it rising versus other paper currencies that lack definition. In that case, is the dollar “mighty,” or is it just “less weak” than other currencies Sternberg is measuring it against. Market signals indicate that the dollar is just “less weak.”

    Indeed, while currencies no longer have a gold definition, gold still speaks through the markets. At present the “mighty” dollar is worth 1/1900th of a gold ounce. When the 21st century began a dollar purchased roughly 1/300th of a gold ounce, when Joe Biden entered office the price of gold was around 1/1853rd of a gold ounce. What the gold signal tells us is that the dollar has long been weak, but not notably weaker in recent years. In other words, it hasn’t been “mighty” as much as the pound, euro and yen have been in decline.

    The shame, as always, is that this is even being discussed. No one talks about a “strong” inch, foot, or minute. All three are quiet. As constant measures of length and time, they just facilitate the understanding of reality. Money is no different, or should be no different. Not wealth on its own, money that’s credible as a measure facilitates enormous wealth creation precisely because it fosters simple exchange among producers that makes possible immense specialization among the individuals who comprise what we call an economy. The more labor is divided among producers, the more productivity. It’s really quite simple.

    Sadly, money’s lack of quietude such that it’s “mighty,” “weak,” or somewhere in between means that a growing number of wildly talented people are sidelined from production in order to trade the chaos brought on by the pretense that what solely exists to enable trade should itself be traded. Economists will plan money and its “supply,” don’t you know?

    Yes, we all do. Prosperity is being sacrificed on the obnoxious conceit of economists and pundits who haven’t a clue about what money is. Yes, Smith would most certainly marvel.

    Tyler Durden
    Wed, 05/04/2022 – 21:00

  • Russia Indefinitely Bans Entry Of Japan's Prime Minister Among 63 Top Officials
    Russia Indefinitely Bans Entry Of Japan’s Prime Minister Among 63 Top Officials

    Russia announced Wednesday it has “indefinitely” banned 63 Japanese citizens including Prime Minister Fumio Kishida from ever entering the country over joining Washington’s anti-Russia campaign in response to the Ukraine war.

    Also on the banned entry list is Foreign Minister Yoshimasa Hayashi, Defense Minister Nobuo Kishi, and Finance Minister Shunichi Suzuki, as well as a number of members of parliament and top military officers, according to CNN citing state RIA.

    Diplomatic tensions have also risen of late due to Japan early last month removing Ukraine’s Azov battalion from its designated list of recognized terror and neo-Nazi groups. 

    Additionally Tokyo has jumped on the bandwagon of the West’s sanctions campaign, which has included introducing measures to freeze the assets of President Putin and some of his family members.

    Russian Ambassador to Japan Mikhail Galuzin had said at the time that Japan initiated the official change in status regarding Azov…

    “I think that the actions the corresponding Japanese structures undertook to exclude the Azov nationalist battalion from the category of neo-Nazi organizations stem from the fact that Japan, like other Group of Seven nations, supports the Kiev regime in all its actions, including those against the population of the Donetsk and Lugansk People’s Republics,” according to TASS.

    This fresh move to bar Japanese top officials is said to be in response to an “unprecedented anti-Russian campaign.”

    Russia’s Foreign Ministry said: “The administration of Fumio Kishida launched an unprecedented anti-Russian campaign, allows unacceptable rhetoric against the Russian Federation, including slander and direct threats,” as cited in RIA.

    “It is echoed by public figures, experts and media representatives of Japan, who are completely engaged in the attitudes of the West towards our country,” the statement continued.

    Tensions have also ratcheted in regional waters where Russia has been angered over planned US-Japan naval exercises in waters close to contested areas and disputed islands.

    Tyler Durden
    Wed, 05/04/2022 – 20:40

  • Greenwald: Homeland Security's "Disinformation Board" Is Even More Pernicious Than It Seems
    Greenwald: Homeland Security’s “Disinformation Board” Is Even More Pernicious Than It Seems

    Authored by Glenn Greenwald via greenwald.substack.com,

    The most egregious and blatant official disinformation campaign in the U.S. took place three weeks before the 2020 presidential election. That was when dozens of former intelligence officials purported to believe that authentic emails regarding Joe Biden’s activities in China and Ukraine, reported by The New York Post, were “Russian disinformation.” That quasi-official proclamation enabled liberal corporate media outlets to uncritically mock and then ignore those emails as “Russian disinformation,” and pressured Big Tech platforms such as Facebook and Twitter to censor the reporting at exactly the time Americans were preparing to decide who would be the next U.S. president.

    Official government portrait of Nina Jankowicz, appointed to serve as Executive Director of the new “Disinformation Board” to be housed within the U.S. Department of Homeland Security (posted by Jankowicz to Twitter)

    The letter from these former intelligence officials was orchestrated by trained career liars — disinformation agents — such as former CIA Director John Brennan and former Director of National Intelligence James Clapper. Yet that letter was nonetheless crucial to discredit and ultimately suppress the New York Post‘s incriminating reporting on Biden. It provided a quasi-official imprimatur — something that could be depicted as an authoritative decree — that these authentic emails were, in fact, fraudulent.

    After all, if all of these noble and heroic intelligence operatives who spent their lives studying Russian disinformation were insisting that the Biden emails had all of the “hallmarks” of Kremlin treachery, who possessed the credibility to dispute their expert assessment? This clip from the media leader in spreading this CIA pre-election lie — CNN — features their national security analyst James Clapper, and it illustrates how vital this pretense of officialdom was in their deceitful disinformation campaign:

    This same strategic motive — to vest accusations of “disinformation” with the veneer of expertise — is what has fostered a new, very well-financed industry heralding itself as composed of “anti-disinformation” scholars. Knowing that Americans are inculcated from childhood to believe that censorship is nefarious — that it is the hallmark of tyranny — those who wish to censor need to find some ennobling rationale to justify it and disguise what it is.

    They have thus created a litany of neutral-sounding groups with benign names — The Atlantic Council, the Institute for Strategic Dialogue, various “fact-checking” outfits controlled by corporate media outlets — that claim to employ “anti-disinformation experts” to identify and combat fake news. Just as media corporations re-branded their partisan pundits as “fact-checkers” — to masquerade their opinions as elevated, apolitical authoritative, decrees of expertise — the term “disinformation expert” is designed to disguise ideological views on behalf of state and corporate power centers as Official Truth.

    Yet when one subjects these groups to even minimal investigative scrutiny, one finds that they are anything but apolitical and neutral. They are often funded by the same small handful of liberal billionaires (such as George Soros and Pierre Omidyar), actual security state agencies of the U.S., the UK or the EU, and/or Big Tech monopolies such as Google and Facebook.

    Indeed, the concept of “anti-disinformation expert” is itself completely fraudulent. This is not a real expertise but rather a concocted title bestowed on propagandists to make them appear more scholarly and apolitical than they are. But the function of this well-funded industry is the same as the one served by the pre-election letter from “dozens of former intelligence officials”: to discredit dissent and justify its censorship by infusing its condemnation with the pretense of institutional authority. The targeted views are not merely wrong; they have been adjudged by official, credentialed experts to constitute “disinformation.”

    This scam is the critical context for understanding why the Biden Administration casually announced last week the creation of what it is calling a “Disinformation Board” inside the Department of Homeland Security (DHS). There is no conceivable circumstance in which a domestic law enforcement agency like DHS should be claiming the power to decree truth and falsity. Operatives in the U.S. Security State are not devoted to combatting disinformation. The opposite is true: they are trained, career liars tasked with concocting and spreading disinformation. As Politico’s Jack Schafer wrote:

    Who among us thinks the government should add to its work list the job of determining what is true and what is disinformation? And who thinks the government is capable of telling the truth? Our government produces lies and disinformation at industrial scale and always has. It overclassifies vital information to block its own citizens from becoming any the wiser. It pays thousands of press aides to play hide the salami with facts….Making the federal government the official custodian of truth would be like Brink’s giving a safe-cracker a job driving an armored car.

    The purpose of Homeland Security agents is to propagandize and deceive, not enlighten and inform. The level of historical ignorance and stupidity required to believe that U.S. Security State operatives are earnestly devoted to exposing and decreeing truth — as CNN’s Brian Stelter evidently believes, given that he praised this new government program as “common sense” — is off the charts. As Jameel Jaffer, formerly of the ACLU and now with the Columbia’s Knight First Amendment Institute put it, most troubling is “the fact that the board is housed at DHS, an especially opaque agency that has run roughshod over civil liberties in the past.”

    Typically, any attempt to apply George Orwell’s warning novel 1984 to U.S. politics is reflexively dismissed as hyperbolic: a free and democratic country like the United States could not possibly fall prey to the dystopian repression Orwell depicts. Yet it is quite difficult to distinguish this “Disinformation Board” from Ingsoc’s Ministry of Truth. The protagonist of Orwell’s novel, Winston Smith, worked in the Ministry of Truth and described at length how its primary function was to create official versions of truth and falsity, which always adhered to the government’s needs of the moment and were subject to radical change as those interests evolved.

    That the Board will be run by such a preposterous and laughable figure as Nina Jankowicz — a liberal cartoon, a caricature of a #Resistance Twitter fanatic who spent 2016 posting adolescent partisan tripe such as: “Maybe @HillaryClinton‘s most important point so far: ‘A @realDonaldTrump presidency would embolden ISIS.’ #ImWithHer” — has, in some sense, made this board seem more benign and harmless. After all,

    Subscribers can read the rest here.

    Tyler Durden
    Wed, 05/04/2022 – 20:20

  • Apple Poaches 31 Year Industry Veteran From Ford For Help Advancing Its Car Project
    Apple Poaches 31 Year Industry Veteran From Ford For Help Advancing Its Car Project

    It appears that Apple and Ford are engaging in some type of poaching war for employees. The latest example came this week, when it was reported that Apple has poached a 31 year veteran of the auto industry, formerly with Ford, to help ramp up development of its forthcoming electric vehicle.

    The tech giant has hired Desi Ujkashevic, who has worked at Ford since 1991 and has most recently been the company’s global director of automotive safety engineering, Bloomberg reported on Tuesday.

    She helped “oversee engineering of interiors, exteriors, chassis and electrical components for many Ford models,” the report says. 

    From Ford’s website:

    In her previous role, she was the Engineering Director for North American Vehicle Programs where she was responsible for Engineering for Car and Utility Programs managing engineering design deliverables including achievement of cost, profit, quality, and timing objectives. Prior to this, Desi was the Global Director, Interiors Engineering where she led the Strategy, Program execution, Quality and launch for Interiors on all Global Programs. Previous to this, Desi completed a 3-year international assignment in Germany, serving as Ford’s Director of Engineering for Body Systems and Design Operations.

    In addition to working on EVs, she helped develope the Ford Escape, Explorer, Fiesta and Focus, according to Mac Rumors. The outlet also noted that Bloomberg has reported “that Apple wants the ‌Apple Car‌ to be safer than cars from Tesla and Waymo, with backup systems to avoid driving system failures.”

    Recall, back in September 2021, Ford poached iconic auto engineer Doug Field from Apple. 

    Field, who previously worked as a vice president of Mac hardware engineering at Apple, returned to the Cupertino tech giant after a nearly five-year stint at Tesla to work on Apple’s secretive automotive initiative.

    Three years later, Field jumped ship again and the former Tesla and Apple exec was poached by Ford as its chief advanced technology and embedded systems officer. The latest transition marked a full circle for Field, who started his career as an engineer at Ford.

    Field, who led development of Tesla’s Model 3, most recently served as vice president of special projects at Apple, which also included the tech giant’s Titan car project. 

    Ford said Field will lead its vehicle controls, enterprise connectivity, features, integration and validation, architecture and platform, driver assistance technology and digital engineering tools.

    Tyler Durden
    Wed, 05/04/2022 – 20:00

  • Japan's Role In Global Financial (In)Stability, Part 2: Trapped Ahead Of Unavoidable Inflation
    Japan’s Role In Global Financial (In)Stability, Part 2: Trapped Ahead Of Unavoidable Inflation

    Authored by Michael Lebowitz via RealInvestmentAdvice.com,

    We ended “Japan’s Role In Global Financial (In)Stability, Part 1: Liquidity Crisis In The Making”  with the following quote regarding inflation from BOJ Governor Haruhiko Kuroda:  “The BoJ should persistently continue with the current aggressive money easing toward achieving the price stability target of 2% in a stable manner.”

    While many central bankers are anxiously waging war against inflation, the Japanese are egging it on. Over the last few weeks, the BOJ has offered to buy as many 10-year notes at 0.25% as the market will offer them. In central bank parlance, we call that unlimited QE. While the BOJ caps bond yields with “aggressive” QE, they are doing so at the expense of the yen.

    Carry Trade

    In Part 1, we discussed how Japanese citizens and pension plans invested abroad to earn higher yields. They were not the only ones taking advantage of the difference in interest rates between Japan and many other countries.

    Hedge funds and institutional investors worldwide were also making the most of the situation by borrowing yen cheaply in Japan, converting the yen to another currency, and investing the funds at much higher rates. Such a trade is called a carry trade.  

    To understand the allure of the carry trade, let’s consider a popular carry trade that many of you are actively engaged in.

    Buying a house with a mortgage is a type of carry trade. If you purchase a home for $500,000 with a $400,000 mortgage and $100,000 in cash/equity, you are leveraged at a rate of 5:1. Any change in the home price affects your return on the investment by a factor of five. For instance, a 10% increase in the price ($50k) results in a 50% gain on your equity ($50k/$100k).

    Leverage can be much greater than 5:1 in financial market carry trades, thus resulting in more significant gains and losses than in our example.

    Yen Carry Trades

    Unlike mortgage payments and house values denominated in dollars, the yen carry trade introduces currency risk. If you borrow in yen and it appreciates, you pay back the loan with more expensive yen. Therefore, appreciation of the yen eats into profits and discourages the yen carry trade.

    For example, you go to a Japanese bank and put down $100,000 in assets to borrow 1,000,000 yen for one year at 0%. You convert the yen to dollars and buy a one-year U.S. Treasury note at 3%. Assuming the yen’s value doesn’t change versus the dollar, the return will be 30% (3% * 10x leverage). If the yen appreciates by 1% over the year, and you did not hedge the currency risk, the return falls to 20%. 5% appreciation of the yen results in a 20% loss.  

    As you might surmise, yen carry trades are very sensitive to yen price movement. Understanding this, the BOJ has acted numerous times to arrest the yen’s appreciation. We share the following from the book The Rise of Carry:

    “Over a period of just seven months up to March 2004, the BOJ/MOF accumulated well over US$250 billion in foreign reserves in the attempt to prevent the yen from appreciating. At the end of this period, the yen dollar exchange rate was basically flatlining as the BOJ stood in the market and absorbed all the dollars that yen purchasers wished to sell.”

    At that time and many other times, the BOJ bought dollars and sold yen to keep the exchange rate stable. By minimizing currency risk, the yen carry trade retained its attractiveness to foreign investors. The size of the yen carry trade has declined in recent years, as shown below. Even at 100 trillion yen, carry trade investors control approximately $80 billion worth of assets worldwide.

    Japan’s Achilles Heel

    Currently, the yen is rapidly depreciating. It is the direct consequence of the BOJ’s aggressive actions to halt yields from rising. As we share in Part 1, Japan can ill afford higher interest rates with its massive debt levels.

    However, as the BOJ tries to stop rates from rising, they weaken the yen. Japan is in a trap. They can protect interest rates or the yen but not both. Further, its actions are circular. As the yen depreciates, inflation increases and the Japanese central bank must do even more QE to keep interest rates capped.

    The graph below shows the recent depreciation of the yen in blue. The graph charts the amount of yen needed to buy a dollar; ergo, the rising amount represents depreciation. With interest rates capped in Japan and in rising in America, you can see the widening difference in yields in orange. Essentially the graph highlights the stark contrast between the Fed’s hawkish policy and the BOJ’s dovish policy.  

    The BOJ, with full government support, appears willing and able to do everything in its power to keep monetary policy extremely aggressive regardless of what other central banks do. Such a stance by the Japanese central bank might be possible if inflation remains tame.

    Japanese CPI and PPI

    Japanese inflation is much lower than in most other major economic nations. However, there are signs that prices may catch up. For instance, the prices of input goods (PPI) have begun to rise rapidly. While CPI is still low at .9%, we must consider that PPI and inflation expectations, shown below, often lead CPI.  

    Japan may be already experiencing a jump in CPI that the government is minimizing, or the data is simply lagging. Either way, this inflationary impulse is far different from minor impulses in the past.

    Further, given the surging price of global commodities and Japan’s lack of natural resources, it will be near impossible to avoid inflation.

    Inflation and Demographics

    Many politicians say inflation is good because of Japan’s massive debt levels. It can essentially reduce the amount of debt as a percentage of the economy.

    It appears that for this reason, the BOJ wants more inflation. However, with more inflation, the BOJ must expend even greater efforts to ensure interest rates do not follow inflation higher.

    Let’s review Japan’s demographic situation. As we wrote in Part 1- “A poor demographic profile also hamstrings Japan’s economy. The working-age population is almost 15% below its peak of 1995. To make matters worse, over a third of their population is 65 or older and quickly becoming dependent on the remaining population.”

    A large percentage of Japan’s elderly population relies on fixed income portfolios. High inflation will be devastating to them. It will severely crush their purchasing power if interest rates do not rise in line with higher prices.  

    Regardless of whether the Japanese government accurately measures inflation, the citizens already feel it. In an admission that inflation is becoming problematic, the Japanese government is trying to ease citizens’ pain. Per Nikkei Asia- “Japan plans to spend 6.2 trillion yen ($48.2 billion) on additional gasoline subsidies, low-interest loans and cash assistance to alleviate the pain of consumers and small businesses facing rising prices, Nikkei has learned.”

    The Stage Is Set

    So, what happens if CPI data starts rising rapidly? More importantly, might high inflation and the limited means of many of Japan’s citizens force the BOJ to take a more hawkish stance to limit inflation? Doing so would involve fighting yen depreciation at the expense of interest rates. This hawkish scenario, which hasn’t been seen in Japan in thirty years, is deeply troubling.

    A strong yen and higher rates will entice liquidity to flow back to Japan. Yen carry trades will be reversed as their borrowing costs rise alongside an appreciating yen. Such is a recipe for a global drain of liquidity and possibly a financial crisis. Japanese citizens and pension funds will start to bring their money home to take advantage of higher yields without the currency risk.  

    Such a reversal of liquidity is not a Japan-centric problem as the tentacles of the yen carry trade spread through global financial markets. The loss of liquidity will be felt worldwide. 

    Summary

    The BOJ is trapped. They are conducting unlimited QE to keep rates low and but at the same time, weaken the yen, which promotes inflation. Unlike many other economic pundits, it is not the collapse of the yen that is our chief concern. It is the opposite. The BOJ has avoided inflation for thirty years. The onset of inflation might be too much for them to evade.

    Wayne Gretzky claims he was such a good hockey player because he went to where the puck would be. As investors, we should consider what Japan is doing today but focus on what they may have to do tomorrow.

    Tyler Durden
    Wed, 05/04/2022 – 19:40

  • Musk Reportedly Secures $10 Billion For Twitter Deal From 'Old Friends'
    Musk Reportedly Secures $10 Billion For Twitter Deal From ‘Old Friends’

    Private-equity giant Thoma Bravo (one of the first firms to become associated with Elon Musk’s campaign to buy Twitter) may have backed out of the deal, but that hasn’t stopped Musk from finding the money elsewhere. 

    According to a report published Wednesday night by the New York Post, Musk is reportedly closing in on securing $10 billion (out of the total $44 billion valuation for the deal) for his bid to buy Twitter from a group of “deep-pocketed” venture firms and family offices – although the Post report didn’t name the specific firms (although it did claim that the firms had experience backing other Musk ventures, including SpaceX. 

    Musk has said he’s trying to limit his own exposure to Twitter to just $15 billion (a pittance for the world’s richest man). He has also said he hopes to turn the company around and take it public again within three years. 

    One of the Post’s sources claimed that Musk has “[h]e has more than $10 billion of committed equity”.

    A source said that Musk had spent “hours” talking to Thoma Bravo founder Orlando Bravo, but in the end, one of Bravo’s deputies (or perhaps several of them) ended up torpedoing the deal.

    “My sense is Orlando Bravo wanted to do it but one or two of his top partners don’t want to,” a second source said.

    Most of the biggest buyout firms on the street have already turned Musk down, or said they would prefer to limit their exposure to debt finance (like Apollo).

    Other major buyout firms including Stephen Schwarzman’s Blackstone and billionaire Robert F. Smith’s Vista Equity Partners also have turned Musk down altogether, a source said. Apollo Global Management, meanwhile, is only interested in providing debt financing, according to sources close to the talks.

    On top of lining up the equity financing from other backers, Musk is also reportedly working on securing more than $5 billion in existing equity from previous Twitter shareholders (including Jack Dorsey and Fidelity), who – according to Musk’s plan – would be allowed to roll over their shares into the new privately-owned venture.

    Several banks have already said that they would rather not become directly exposed to Twitter. Citigroup, Credit Suisse and RBC have signaled that they’re open to providing loans against Musk’s Tesla stock (otherwise known as a margin loan), but they have balked at providing loans against Twitter’s equity because of the fact that this debt burden would eat up too much of Twitter’s cash flow. One of the Post’s sources said that the amount of leveraged financing in the Twitter deal was “crazy”. 

    Tyler Durden
    Wed, 05/04/2022 – 19:20

  • All Eyes On Florida's New Education Commissioner
    All Eyes On Florida’s New Education Commissioner

    Authored by Robert Pondiscio via RealClear Policy (emphasis ours),

    Last Friday, Florida’s State Board of Education voted to approve Republican Senator Manny Diaz, Jr. the state’s new education commissioner. Diaz makes history as Florida’s first Hispanic education commissioner.

    (AP Photo/Wilfredo Lee)

    He is also, on Day One, the most important and closely watched state education chief in the country. His new boss, Florida governor Ron DeSantis, has his eye on the White House in 2024; the Governor’s political appeal and personal brand rests heavily on education, particularly a series of controversial measures exerting the state’s authority over controversial curriculum content. It will fall to Diaz to communicate, execute, and enforce these polarizing initiatives. His success or failure may therefore exert an outsize effect of DeSantis’ national reputation and political fortunes.

    Diaz brings a strong education background to the job. He’s a former high school social studies teacher who began his teaching career at the same high school from which he graduated, before moving to another local school where he rose to become an assistant principal. To this day, he is still certified to teach in Florida. At the same time, he’s a staunch champion of school choice and worked as a legislator representing the Miami-Dade area to expand access to Florida’s many public scholarship programs and to grow the state’s charter school sector. First elected to the Florida House of Representatives in 2012, he served three terms before winning his Senate seat in 2018. Most recently he was the Senate sponsor of House Bill 7, aimed at curbing “corporate wokeness” and eliminating critical race theory from Florida schools. Diaz stood alongside DeSantis at a signing ceremony for the bill two weeks ago. “I’m clearly straight in line with his ideology and we have been that way since he took office,” Diaz told me in an interview shortly before the state board accepted DeSantis’s recommendation last week.

    As a senator, Diaz supported Florida’s Parental Rights in Education law, famously derided by critics as the “Don’t Say Gay” bill, which forbids schools from teaching lessons on sexual orientation or gender identity in grade K-3 classes, or at any grade level if not deemed age-appropriate. “We have to let kids be kids,” Diaz argued on the Senate floor in favor of the measure he will now be responsible for implementing. “There are topics that our kids are not mature enough to grasp.” Similar parental rights bills have been introduced in dozens of states, ensuring further scrutiny of the effects of the Florida law on which most of those measures have been modeled.

    Overlooked entirely in national coverage of these “culture war” measures is Florida’s decision to eliminate its multi-day state tests and replace them with a “progress monitoring system” that will assess students three times a year through tests that take a few hours instead of a few days. The intention is to reduce time spent on testing although critics, including the state’s teachers’ unions, insist the new system will have the opposite effect and increase time spent on testing. It will fall to Diaz to make good on DeSantis’ promise that the new system will be less burdensome and provide more timely and individualized feedback to students, teachers, and parents.

    Florida ranks among the most school choice-friendly state in the nation. Nearly half the state’s children attend schools other than an assigned local public school. When I met first met Diaz two years ago, he was one of several Florida Republicans predicting the state would be the first universal choice state in the country — a prediction he tempered when we spoke last week. “There are legislative leaders that have that vision,” he said. “That’s an ongoing conversation, I’d like to have with the governor to see what his vision is going forward on choice programs.”

    But without question, the national spotlight will shine the brightest on Florida as Diaz oversees implementation of the spate of new laws exerting the state’s authority on classroom content, which has implications far beyond the state’s classroom: those measures are central to DeSantis’s brand. Diaz sounded unphased by the high stakes when we spoke last week. “My goal is to have conversations with superintendents, school board members, with parents, teachers, and stakeholders about what it means, and to make sure that we are teaching our standards and that we’re not having material in there that violates the law,” he said. “Despite all of the noise around it, the aim and the goal of these pieces of legislation are pretty clear.”

    Tyler Durden
    Wed, 05/04/2022 – 19:00

  • This Is What Sparked Today's Euphoric Post-Fed Meltup
    This Is What Sparked Today’s Euphoric Post-Fed Meltup

    A historic Fed decision is in the books and Fed Chair Powell did not disappoint. As Oanda’s Edward Moya writes, the Fed delivered the first-rate hike in 22 years and signaled more rate increases are appropriate and that the balance sheet runoff will begin in June, all of which was as expected. What was somewhat surprising is Powell’s vow (for now) that larger rate hikes are not on the table. ​Risky assets got a boost after Fed Chair Powell said, “So a 75 basis point increase is not something that the committee is actively considering.” Surprisingly, Powell’s confidence that large hikes aren’t coming takes place as inflation is not slowing down anytime soon, but that is not scaring Powell as his confidence grows that he can slow inflation without triggering a recession.

    And yet, the truth is that virtually nobody actually expected 75bps of rate hikes which emerged as an extra hawkish bogeyman in the last minute, allowing Wall Street to give itself a dovish release is this unlikely outcome did not take place. Sure enough, in his Fed post-mortem, Standard Chartered’s Steve Englander asks rhetorically “why the optimistic market reaction?” and answers:

    We expected investors to approach this FOMC worried about whether the FOMC would explicitly or implicitly endorse shifting to a hiking pace of 75bps down the road, or raise the possibility of tightening well above neutral. Such fears were evident in asset price moves as the FOMC approached. We consequently saw a risk that an “as expected” outcome would be viewed as dovish as this added risk premium dissolved. While today’s price moves were dramatic, 5Y UST yields and BBDXY are still well above the levels that prevailed for almost the entire month of April. So it is fair to say that positioning and excess pessimism reflect a big part of the market reaction.

    There is more: as we wrote repeatedly over the past week, the Fed is set to hike aggressively right into a recession, and it appears that even Powell is becoming concerned about this eventuality. To wit, Englander writes in his post-Fed note that “we also saw a few tentative indications that the Fed sees a little more risk of a slowdown (or at least a moderation in activity), and that it did not want to endorse the most hawkish views under discussion at this point.”

    Some more thoughts from Englander:

    Fed Chair Powell went out of his way to point to 50bps hikes as the norm, provided inflation and activity evolved according to plan, but didn’t endorse 75bps. He mentioned a possibility that jobs growth would slow, one of the first Fed characterizations of the jobs market as anything other than ‘red hot’. He pointed to some slowing of inflation in monthly data (while indicating that the Fed wanted to see concrete indications that inflation was coming off). Overall, the tone was much more balanced than at the January and March FOMC meetings.

    Today’s tone shift is in line with our expectation that activity and, eventually, inflation will slow as 2022 progresses, and ultimately be reflected in a significantly lower fed funds path and USD level once we slide into a recession some time in the second half of 2022 at which point the Fed will not only cut rates but resume QE. However, until the slower growth trend is well established, the ups and downs of data could produce big swings in expectations and in the tone of Fed commentary.

    Finally, how did this “strategic” easing of Fed tensions translate into the actual tactical buying euphoria? Simple: as we first explained in “Buyback Blackout Period Is Over, And 10 More Reasons Why Goldman Calls The End Of The Market Carnage“, positioning was almost universally bearish, not only with AAII net bullish sentiment tied for the lowest ever…

    … but hedge funds were almost uniformly positioned for much more losses, with a huge imbalance in put/call ratios as well as an extremely negative dealer gamma. Recall what Goldman said over the weekend:

    S&P Index Gamma (no longer long) given institutional “forced hedging” of May puts – do we see monetization of puts after the big FOMC event next week? Dealer long gamma has been unwound, and works in both directions. This will exacerbate, not buffer moves in the same direction as the market.

    Indeed, today’s “unclenching” which was catalyzed by Powell “taking 75bps off the table”, sparked precisely the epic short squeeze , both in cash and gamma, that Goldman expected as puts were aggressively monetized, sending the VIX tumbling.

    Another take on this phenomenon comes from our friends at Spot Gamma, who have shared the following video explaining how vol sellers drove today’s 3% market rally (if only practically speaking, it was of course Powell who started it).

    That said, there is some disagreement about what happens next is: according to SpotGamma, 4,300 still remains a line of resistance on the S&P, while Oanda is more bullish and concludes that “risky assets can rally now that Wall Street has fully priced in the rest of the year’s rate hikes by the Fed.” While it is easy to turn optimistic here, a warning: the last thing the Fed wants is for its 50bps rate hike – the biggest in 22 years – to be viewed as a green light to more risk on. In fact, if we indeed see stocks surging in the next few days, we fully expect the next crew of Fed talking heads which will hit the mic as soon as Friday…

    https://platform.twitter.com/widgets.js

    … to warn that not only is a 75bps – and even as 100bps – rate hike on the table, but that an emergency, inter-meeting announcement is distinctly positive if algos ignore the Fed call at their own peril.

    Tyler Durden
    Wed, 05/04/2022 – 18:40

  • Stocks Soar To Best Fed-Hike-Day Performance In 44 Years
    Stocks Soar To Best Fed-Hike-Day Performance In 44 Years

    Tl:dr: This was the biggest gain on a Fed day since Dec 2008 (a rate-cut day), but this was the greatest upside-day for the S&P 500 on a Fed Rate-Hike day since Nov 1978!!

    And here’s what happened last time the S&P rallied this much on a Fed rate-hike day… (we made new lows)

    *  *  *

    “Inflation is much too high,” warned Fed Chair Powell in his opening words, in an effort to assure the American people – and the markets – that they are really really serious this time, pinky-swear, about hiking even if the market pukes its guts out… (or not).

    https://platform.twitter.com/widgets.js

    The market did not like that news (stocks fell, yields rose, rate-hike-odds rose)

    But then Powell tried to assuage fears of a 75bps hike:

    “A 75 basis point increases is not something the committee is actively considering,” but noted that the “next couple of meetings” will be 50bps hikes.

    The market loved that news (stocks surged, USD dumped, yield curve steepened with short-end yields plunging)… monkeyhammering all the risk away (VIX crashed to a 24 handle)…

    STIRs immediately priced-out the odds of a 75bps hike in June…

    Source: Bloomberg

    And the rate-hike-trajectory also dropped on Powell’s more dovish tilt…

    Source: Bloomberg

    The short-end of the yield curve collapsed (2Y -13bps, 30Y -2bps)…

    Source: Bloomberg

    …and the yield curve steepened drastically…

    Source: Bloomberg

    Notably Bloomberg’s Ira Jersey warned that “The market may be interpreting the lack of a 75-bp move incorrectly as ‘dovish’ given the strong rally in the front end of the yield curve. A string of 50-bp hikes, without a 75-bp move, could actually mean a higher terminal rate and over time may not mean much for the short end of the yield curve. There could be an opportunity building in the curve.”

    Additionally, Powell warned The Fed could act “expeditiously” – which could easily mean more than three 50bps-hikes are in order if inflation remains high.

    10Y Yields reversed once again at 3.00% (exactly where they did in Dec 2018 before Powell folded)…

    Source: Bloomberg

    Stocks went utterly vertical on the ‘lack of 75bps move’ (as the dramatically oversold/over-hedged positioning unwound again)…Yes, the Nasdaq exploded 3.5% higher on the day (from down 1.5% this morning)….

    ‘That escalated quickly…”

    All the sectors shot higher, led by tech and discretionary (but energy was best on the day)…

    Source: Bloomberg

    …apparently ignoring the fact that they are not at all priced for a series of 50bps hikes…

    Source: Bloomberg

    The chart above shows what happened after the last FOMC meeting – will we see another melt-up squeeze? This afternoon saw a serious short-squeeze begin…

    Source: Bloomberg

    So that’s it then… The Fed has the problem in hand and a soft landing is now priced in (and a hard landing, in case we dip again).

    https://platform.twitter.com/widgets.js

    The dollar tumbled during the press conference…

    Source: Bloomberg

    The Ruble soared to its strongest relative to the USD since Feb 2020…

    Source: Bloomberg

    Oil prices soared on the day on the heels of EU embargo headlines – erasing all of Biden’s ‘improvements’ in price…

    Finally, Powell admitted that The Fed is useless:

    “Our tools don’t really work on supply shocks, our tools work on demand.”

    Which could be why Bitcoin quickly ripped up to $40k…

    Source: Bloomberg

    Gold was also bid on his comments…

    As hard as Powell tried to rescue his credibility, crypto and gold exposed the lie.

    https://platform.twitter.com/widgets.js

    As one veteran trader noted: “it seemed like Powell reverted back to his ‘inflation is transitory’ perspective… good fucking luck with that!”

    Tyler Durden
    Wed, 05/04/2022 – 18:24

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May 04

Today’s News 4th May 2022

  • Morgan Stanley's Frankfurt Offices Raided As Part Of Cum-Ex Tax Fraud Probe
    Morgan Stanley’s Frankfurt Offices Raided As Part Of Cum-Ex Tax Fraud Probe

    German regulators have been staying busy over the last few weeks.

    Just days after we noted that Deutsche Bank offices in Frankfurt were being raided as part of a money laundering probe the bank reportedly tipped regulators off to, it now looks like Morgan Stanley is also dealing with a regulatory raid by German prosecutors. 

    The Morgan Stanley raid is related to the “rapidly widening” Cum-Ex scandal, which is centered on cross-border tax fraud. 

    “Authorities are searching a bank and the homes of two suspects in a probe over Cum-Ex and related strategies,” Bloomberg reported Tuesday morning, stating that more than 75 officers were on hand to take part in the raid. 

    The same report notes that Morgan Stanley confirmed that it had been targeted and said that the investigation relates to a “historic activity” and that the bank is “continuing to cooperate with the German authorities.” 

    The probe encompasses about 1,500 people from the financial industry and similar raids have been carried out at Barclay’s and Bank of America/Merrill Lynch. Deutsche Bank is also said to face “major repercussions”. 

    Cum-ex reportedly diverted “at least 10 billion euros” in government revenue by exploiting German tax laws that allowed multiple investors to claim refunds of a tax on dividends that was paid only once, Bloomberg reported.

    The practice was abolished in 2012, but the probe continues. 

    Tyler Durden
    Wed, 05/04/2022 – 02:45

  • This Time, NATO Better Take Putin's Ukraine Warnings Seriously
    This Time, NATO Better Take Putin’s Ukraine Warnings Seriously

    Authored by Ted Galken Casrpenter via AntiWar.com,

    In one of the great foreign policy blunders of modern times, U.S. and European leaders repeatedly disregarded Vladimir Putin’s warnings that Russia would never tolerate Ukraine becoming a NATO military asset. Because of resistance from the French and German governments (which had as much to do with Ukraine’s chronic corruption as with concerns about Russia’s reaction), the Alliance delayed offering Kyiv a Membership Action Plan – an essential step toward membership. Nevertheless, at the 2008 summit in Bucharest, NATO’s existing members ostentatiously insisted that “someday” Ukraine would join the Alliance, and they repeated that pledge on numerous occasions thereafter.

    Worse, Western officials typically insisted that Russia would have nothing to say about the matter. Jens Stoltenberg, NATO’s Secretary General, was especially blunt and arrogant on that score. He summarily rejected Moscow’s demands in late 2021 that NATO provide binding security guarantees to Russia, including a commitment that Ukraine would never be offered membership, and that NATO military forces would not be deployed in that country.

    Stoltenberg’s response could not have been more uncompromising. “NATO has an open-door policy. This is enshrined in NATO’s founding treaty … The message today to Russia is that it is for Ukraine as a sovereign nation to decide its own path. And for the 30 NATO allies to decide when Ukraine is ready to become a member.”

    Western officials implicitly assumed that Russia could be intimidated and eventually compelled to accept Ukraine as part of NATO. They dismissed the Kremlin’s increasingly pointed warnings that efforts to make Kyiv an Alliance asset would cross a red line that violated Russia’s security. Their assumption that Moscow would tamely accept a NATO presence inside Russia’s core security zone proved to be spectacularly wrong, and Ukraine is now paying a very high price in treasure and blood for their miscalculation.

    One might hope that NATO leaders would have learned an important lesson from such a costly mistake. However, they are stubbornly ignoring a new set of ominous warnings from Moscow, and this time, the price of such tone-deaf arrogance could be utterly catastrophic. Indeed, it is creating the risk of a nuclear clash between Russia and the United States. In his first speech announcing the “special military operation” in Ukraine, Vladimir Putin warned all outside parties (clearly meaning NATO members) not to interfere. “Anyone who tries to interfere with us . . . must know that Russia’s response will be immediate and will lead you to such consequences as you have never before experienced in your history.” [Emphasis added]

    Yet the Biden administration and other NATO governments boast about how much the Alliance is supporting Ukraine’s military resistance to Russia’s invasion. The centerpiece of the effort to this point has been a surge of weapons shipments to Ukraine, including a focus on heavier and more powerful systems. US Secretary of Defense Lloyd Austin vows that the United States will “move Heaven and Earth” to keep arming Ukraine. New York Times columnist Paul Krugman gushes that the United States has again become the “arsenal of democracy,” as it had been in World War II

    The policy constitutes an extremely risky venture that could make the United States a belligerent in a perilous war. Moscow has declared on multiple occasions that convoys carrying weapons from NATO countries into Ukraine are legitimate targets of war. Putin could easily interpret the U.S.-orchestrated cascade of NATO weaponry to support Ukraine’s military resistance as unacceptable interference. The same is true of another Biden administration measure – sharing intelligence data with Kyiv, even providing Ukrainian forces with real-time targeting information. In one case, that intelligence sharing apparently enabled Ukraine to shoot down a Russian plane with several hundred troops aboard.

    As they did during the prewar period, NATO countries are ignoring the warnings coming out of Moscow. Adopting a defiant stance, they instead are boosting their military aid and creating a full-fledged proxy war against Russia. The Kremlin’s warnings are becoming more strident. Putin himself recently admonished NATO members not to test Russia’s patience by continuing to escalate their support for Ukraine. Margarita Simonyan, the editor-in-in chief of both RT and Sputnik and a close associate of the Russian president, stated that Russia might have little choice except to use nuclear weapons if Western policy continues on its current course.

    Once again, though, hawks in the foreign policy blob are supremely confident that continued US and NATO belligerence will deter the Kremlin. Michael McFaul, a former US ambassador to Russia, contends blithely that warnings from Putin about using nuclear weapons in response to mounting Western military assistance to Kyiv should be ignored. “The threat of escalation is cheap talk,” McFaul states confidently. “Putin is bluffing.”

    In an April 27 Wall Street Journal op-ed, former deputy undersecretary of the Navy Seth Cropsey even emphasized that the United States must be prepared to demonstrate that it would “win” a nuclear war against Russia. Other hawks pressure the Biden administration not to give in to Russia’s “nuclear blackmail.” They seem serenely oblivious to the probable consequences if they are wrong. Two analysts even scorned the administration for being excessively fearful of a direct “skirmish” with Russia, as though a clash with a major nuclear power would be the equivalent of a dust-up on a middle school playground. Unfortunately, the policies that Washington is pursuing by pouring arms into Ukraine and creating a proxy war against Russia suggest that administration policymakers may be nearly as clueless as the ultra-hawks outside government to the dangers.

    Western officials and members of the foreign policy establishments in the United States and Europe speak openly of helping Ukraine win its war and inflict a humiliating defeat on Russia. What such individuals do not seem to comprehend is that Ukraine is a vital Russian security interest, and the Kremlin will do whatever is necessary – probably even the use of tactical nuclear weapons – to prevent a defeat. The failure to understand just how important Ukraine is to Russia caused Western leaders to disregard Moscow’s warnings over more than a decade against making Kyiv a military ally. For the same reason, they seem to be making an even more dangerous blunder by ignoring Putin’s latest warning about making Ukraine a pawn in a NATO proxy war against Russia. It is imperative to take the new warnings very seriously and back away from a looming war with potentially horrific consequences.

    Tyler Durden
    Wed, 05/04/2022 – 02:00

  • "'An Anti-Majoritarian Check" – Greenwald Exposes The Radical Fallacies Of SCOTUS Hyperbole
    “‘An Anti-Majoritarian Check” – Greenwald Exposes The Radical Fallacies Of SCOTUS Hyperbole

    Authored by Glenn Greenwald via greenwald.substack.com,

    Politico on Monday night published what certainly appears to be a genuine draft decision by Supreme Court Justice Samuel Alito that would overturn the Court’s 1973 decision in Roe v. Wade. Alito’s draft ruling would decide the pending case of Dobbs v. Jackson Women’s Health Organization, which concerns the constitutionality of a 2018 Mississippi law that bans abortions after fifteen weeks of pregnancy except in the case of medical emergency or severe fetal abnormalities. Given existing Supreme Court precedent that abortion can only be restricted after fetal viability, Mississippi’s ban on abortions after the 15th week — at a point when the fetus is not yet deemed viable — is constitutionally dubious. To uphold Mississippi’s law — as six of the nine Justices reportedly wish to do — the Court must either find that the law is consistent with existing abortion precedent, or acknowledge that it conflicts with existing precedent and then overrule that precedent on the ground that it was wrongly decided.

    Protesters gather outside the U.S. Supreme Court on May 03, 2022, in Washington, DC, after a leaked initial draft majority opinion obtained by Politico, in which Supreme Court Justice Samuel Alito allegedly wrote for the Court’s majority that Roe v. Wade should be overturned (Photo by Anna Moneymaker/Getty Images)

    Alito’s draft is written as a majority opinion, suggesting that at least five of the Court’s justices — a majority — voted after oral argument in Dobbs to overrule Roe on the ground that it was “egregiously wrong from the start” and “deeply damaging.” In an extremely rare event for the Court, an unknown person with unknown motives leaked the draft opinion to Politico, which justifiably published it. A subsequent leak to CNN on Monday night claimed that the five justices in favor of overruling Roe were Bush 43 appointee Alito, Bush 41 appointee Clarence Thomas, and three Trump appointees (Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett), while Chief Justice Roberts, appointed by Bush 43, is prepared to uphold the constitutionality of Mississippi’s abortion law without overruling Roe.

    Draft rulings and even justices’ votes sometimes change in the period between the initial vote after oral argument and the issuance of the final decision. Depending on whom you choose to believe, this leak is either the work of a liberal justice or clerk designed to engender political pressure on the justices so that at least one abandons their intention to overrule Roe, or it came from a conservative justice or clerk, designed to make it very difficult for one of the justices in the majority to switch sides. Whatever the leaker’s motives, a decision to overrule this 49-year-old precedent, one of the most controversial in the Court’s history, would be one of the most significant judicial decisions issued in decades. The reaction to this leak — like the reaction to the initial ruling in Roe back in 1973 — was intense and strident, and will likely only escalate once the ruling is formally issued.

    Every time there is a controversy regarding a Supreme Court ruling, the same set of radical fallacies emerges regarding the role of the Court, the Constitution and how the American republic is designed to function. Each time the Court invalidates a democratically elected law on the ground that it violates a constitutional guarantee — as happened in Roe — those who favor the invalidated law proclaim that something “undemocratic” has transpired, that it is a form of “judicial tyranny” for “five unelected judges” to overturn the will of the majority. Conversely, when the Court refuses to invalidate a democratically elected law, those who regard that law as pernicious, as an attack on fundamental rights, accuse the Court of failing to protect vulnerable individuals.

    This by-now-reflexive discourse about the Supreme Court ignores its core function. Like the U.S. Constitution itself, the Court is designed to be an anti-majoritarian check against the excesses of majoritarian sentiment. The Founders wanted to establish a democracy that empowered majorities of citizens to choose their leaders, but also feared that majorities would be inclined to coalesce around unjust laws that would deprive basic rights, and thus sought to impose limits on the power of majorities as well.

    The Federalist Papers are full of discussions about the dangers of majoritarian excesses. The most famous of those is James Madison’s Federalist 10, where he warns of “factions…who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.” One of the primary concerns in designing the new American republic, if not the chief concern, was how to balance the need to establish rule by the majority (democracy) with the equally compelling need to restrain majorities from veering into impassioned, self-interested attacks on the rights of minorities (republican government). As Madison put it: “To secure the public good, and private rights, against the danger of such a faction, and at the same time to preserve the spirit and the form of popular government, is then the great object to which our enquiries are directed.” Indeed, the key difference between a pure democracy and a republic is that the rights of the majority are unrestricted in the former, but are limited in the latter. The point of the Constitution, and ultimately the Supreme Court, was to establish a republic, not a pure democracy, that would place limits on the power of majorities.

    Thus, the purpose of the Bill of Rights is fundamentally anti-democratic and anti-majoritarian. It bars majorities from enacting laws that infringe on the fundamental rights of minorities. Thus, in the U.S., it does not matter if 80% or 90% of Americans support a law to restrict free speech, or ban the free exercise of a particular religion, or imprison someone without due process, or subject a particularly despised criminal to cruel and unusual punishment. Such laws can never be validly enacted. The Constitution deprives the majority of the power to engage in such acts regardless of how popular they might be.

    And at least since the 1803 ruling in Madison v. Marbury which established the Supreme Court’s power of “judicial review” — i.e., to strike down laws supported by majorities and enacted democratically if such laws violate the rights guaranteed by the Constitution — the Supreme Court itself is intended to uphold similarly anti-majoritarian and anti-democratic values.

    When the Court strikes down a law that majorities support, it may be a form of judicial tyranny if the invalidated law does not violate any actual rights enshrined in the Constitution. But the mere judicial act of invalidating a law supported by a majority of citizens — though frequently condemned as “undemocratic” — is, in fact, a fulfillment of one of the Court’s prime functions in a republic.

    Unless one believes that the will of the majority should always prevail — that laws restricting or abolishing free speech, due process and the free exercise of religion should be permitted as long as enough citizens support it — then one must favor the Supreme Court’s anti-democratic and anti-majoritarian powers. Rights can be violated by a small handful of tyrants, but they can also be violated by hateful and unhinged majorities. The Founders’ fear of majoritarian tyranny is why the U.S. was created as a republic rather than a pure democracy.

    Whether the Court is acting properly or despotically when it strikes down a democratically elected law, or otherwise acts contrary to the will of the majority, depends upon only one question: whether the law in question violates a right guaranteed by the Constitution. A meaningful assessment of the Court’s decisions is impossible without reference to that question. Yet each time the Court acts in a controversial case, judgments are applied without any consideration of that core question.

    The reaction to Monday night’s news that the Court intends to overrule Roe was immediately driven by all of these common fallacies. It was bizarre to watch liberals accuse the Court of acting “undemocratically” as they denounced the ability of “five unelected aristocrats” — in the words of Vox‘s Ian Millhiser — to decide the question of abortion rights. Who do they think decided Roe in the first place?

    Indeed, Millhiser’s argument here — unelected Supreme Court Justices have no business mucking around in abortion rights — is supremely ironic given that it was unelected judges who issued Roe back in 1973, in the process striking down numerous democratically elected laws. Worse, this rhetoric perfectly echoes the arguments which opponents of Roe have made for decades: namely, it is the democratic process, not unelected judges, which should determine what, if any, limits will be placed on the legal ability to provide or obtain an abortion. Indeed, Roe was the classic expression of the above-described anti-majoritarian and anti-democratic values: seven unelected men (for those who believe such demographic attributes matter) struck down laws that had been supported by majorities and enacted by many states which heavily restricted or outright banned abortion procedures. The sole purpose of Roe was to deny citizens the right to enact the anti-abortion laws, no matter how much popular support they commanded.

    This extreme confusion embedded in heated debates over the Supreme Court was perhaps most vividly illustrated last night by Waleed Shahid, the popular left-wing activist, current spokesman for the left-wing group Justice Democrats, and previously a top aide and advisor to Squad members including Rep. Alexandria Ocasio-Cortez. Shahid — who, needless to say, supports Roe — posted a quote from Abraham Lincoln’s first inaugural address, in 1861, which Shahid evidently believes supports his view that Roe must be upheld.

    But the quote from Lincoln — warning that the Court must not become the primary institution that decides controversial political questions — does not support Roe at all; indeed, Lincoln’s argument is the one most often cited in favor of overruling Roe. In fact, Lincoln’s argument is the primary one on which Alito relied in the draft opinion to justify overruling Roe: namely, that democracy will be imperiled, and the people will cease to be their own rulers, if the Supreme Court, rather than the legislative branches, ends up deciding hot-button political questions such as abortion about which the Constitution is silent. Here’s the version of the Lincoln pro-democracy quote, complete with bolded words, that Shahid posted, apparently in the belief that it somehow supports upholding Roe:

    It is just inexplicable to cite this Lincoln quote as a defense of Roe. Just look at what Lincoln said: “if the policy of the government, upon vital questions affecting the whole people, is to be irrevocably fixed by decisions of the Supreme Court, [then] the people will have ceased to be their own rulers.” That is exactly the argument that has been made by pro-life activists for years against Roe, and it perfectly tracks Alito’s primary view as defended in his draft opinion.

    Alito’s decision, if it becomes the Court’s ruling, would not itself ban abortions. It would instead lift the judicial prohibition on the ability of states to enact laws restricting or banning abortions. In other words, it would take this highly controversial question of abortion and remove it from the Court’s purview and restore it to federal and state legislatures to decide it. One cannot defend Roe by invoking the values of democracy or majoritarian will. Roe was the classic case of a Supreme Court ruling that denied the right of majorities to decide what laws should govern their lives and their society.

    One can defend Roe only by explicitly defending anti-majoritarian and anti-democratic values: namely, that the abortion question should be decided by a panel of unelected judges, not by the people or their elected representatives. The defense of democracy invoked by Lincoln, and championed by Shahid, can be used only to advocate that this abortion debate should be returned to the democratic processes, which is precisely what Alito argued (emphasis added):

    Abortion presents a profound moral issue on which Americans hold sharply conflicting views. Some believe fervently that a human person comes into being at conception and that abortion ends an innocent life. Others feel just as strongly that any regulation of abortion invades a woman’s right to control her own body and prevents women from achieving full equality. Still others in a third group think that abortion should be allowed under some but not all circumstances, and those within this group hold a variety of views about the particular restrictions that should be imposed.

    For the first 185 years after the adoption of the Constitution, each State was permitted to address this issue in accordance with the views of its citizens. Then, in 1973, this Court decided Roe v. Wade….At the time of Roe, 30 States still prohibited abortion at all stages. In the years prior to that decision, about a third of the States had liberalized their laws, but Roe abruptly ended that political process. It imposed the same highly restrictive regime on the entire Nation, and it effectively struck down the abortion laws of every single State. As Justice Byron White aptly put it in his dissent, the decision Court represented the “exercise of raw judicial power,” 410 U. S., at 222….

    Roe was egregiously wrong from the start. Its reasoning was exceptionally weak, and the decision has had damaging consequences…..It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives. “The permissibility of abortion, and the limitations, upon it, are to be resolved like most important questions in our democracy: by citizens trying to persuade one another and then voting.” Casey, 505 U.S. at 979 (Scalia, J, concurring in the judgment in part and dissenting in part). That is what tho Constitution and the rule of law demand.

    Rhetoric that heralds the values of democracy and warns of the tyranny of “unelected judges” and the like is not a rational or viable way to defend Roe. That abortion rights should be decided democratically rather than by a secret tribunal of “unelected men in robes” is and always has been the anti-Roe argument. The right of the people to decide, rather than judges, is the primary value which Alito repeatedly invokes in defending the overruling of Roe and once again empowering citizens, through their elected representatives, to make these decisions.

    The only way Roe can be defended is through an explicit appeal to the virtues of the anti-democratic and anti-majoritarian principles enshrined in the Constitution: namely, that because the Constitution guarantees the right to have an abortion (though a more generalized right of privacy), then majorities are stripped of the power to enact laws restricting it. Few people like to admit that their preferred views depend upon a denial of the rights of the majority to decide, or that their position is steeped in anti-democratic values. But there is and always has been a crucial role for such values in the proper functioning of the United States and especially the protection of minority rights. If you want to rant about the supremacy and sanctity of democracy and the evils of “unelected judges,” then you will necessarily end up on the side of Justice Alito and the other four justices who appear ready to overrule Roe.

    Anti-Roe judges are the ones who believe that abortion rights should be determined through majority will and the democratic process. Roe itself was the ultimate denial, the negation, of unrestrained democracy and majoritarian will. As in all cases, whether Roe‘s anti-democratic ruling was an affirmation of fundamental rights or a form of judicial tyranny depends solely on whether one believes that the Constitution bars the enactment of laws which restrict abortion or whether it is silent on that question. But as distasteful as it might be to some, the only way to defend Roe is to acknowledge that your view is that the will of the majority is irrelevant to this conflict, that elected representatives have no power to decide these questions, and that all debates about abortion must be entrusted solely to unelected judges to authoritatively decide them without regard to what majorities believe or want.

    For those interested, I’ve given numerous speeches over the years about the anti-majoritarian and anti-democratic values embedded in the Constitution and the Court, including this 2011 lecture at the University of Maryland, this 2012 speech at the University of Indiana/Purdue University, and this 2013 lecture at Yale Law School.

    To support the independent journalism we are doing here, please subscribe, obtain a gift subscription for others and/or share the article

    Tyler Durden
    Wed, 05/04/2022 – 00:05

  • Gen. Milley Warns Congress: Chances Of War Among Great Powers "Increasing, Not Decreasing"
    Gen. Milley Warns Congress: Chances Of War Among Great Powers “Increasing, Not Decreasing”

    With NATO-Russia tensions boiling, the enduring fog of war on the ground in Ukraine, and constantly ratcheting rhetoric which has even of late dangerously included nuclear threats – this seems almost like an invitation for yet more escalation… not to mention the competing information war which has seen all sides consistently allege false flags in the works… Foreign Policy’s Pentagon correspondent reports the following on Tuesday:

    Russian use of chemical or biological weapons against Ukraine would likely trigger a “reaction from the international community”: U.S. Defense Secretary Lloyd Austin Russia could also escalate the Ukraine conflict with a cyber attack, Austin said.

    The warning came as Pentagon leaders briefed lawmakers at a Senate Appropriations Subcommittee hearing on the Defense Budget.

    Image: Associated Press

    Austin had issued a similar warning of a “significant reaction” from the West if Russia were to use chemical weapons or WMD in Ukraine a month ago during an appearance on CBS’ “Face the Nation”.

    In the early part of April, there had actually been attempts of Ukrainian Azov militants to claim they were victims of a Russian chemical gas attack – but this was met by general skepticism among many war analysts and media pundits – despite UK government attempts to give it credibility.

    Austin this week repeating the chemical attack possibility, despite there being no evidence of Russia’s intent, keeps the door wide open for Ukrainian fighters who are no doubt desperate for direct Western intervention in the war to float the claims again.

    US Chairman of the Joint Chiefs of Staff Gen. Mark Milley also gave his assessment of how Russia’s war is going in the Congressional testimony. He said we are now witnessing “the greatest threat to peace and security of Europe and perhaps the world” in decades.

    “The Russian invasion of Ukraine is threatening to undermine not only European peace and stability, but global peace and stability that my parents and generations of Americans fought so hard to defend,” Milley said. 

    On the question of whether a broader war could break out, he said:

    “The potential for significant international conflict between great powers is increasing, not decreasing.”

    He described that the US is “at a very critical and historic geo-strategic inflection point,” meaning the US military ust “maintain readiness and modernize for the future” at the same time. And more via Reuters wire:

    • U.S. DEFENSE SECRETARY: THE DIFFERENCE BETWEEN CHINA AND RUSSIA IS THAT THE FIRST IS A CHALLENGE AND THE SECOND HAS BECOME A REAL-TIME THREAT
    • U.S. DEFENSE SECRETARY: WAR IN UKRAINE CHANGES AND COMING WEEKS WILL BE CRUCIAL

    Meanwhile, at China’s Foreign Ministry…

    https://platform.twitter.com/widgets.js

    “If we do not do that, then we are risking security of future generations,” Milley stressed. The top general had also in the testimony said that while China poses a “challenge” for the United States, the Ukraine invasion has now made Russia “a real-time threat”.

    Tyler Durden
    Tue, 05/03/2022 – 23:45

  • Here's Why AK-47 Ammo Could Shoot To The Moon
    Here’s Why AK-47 Ammo Could Shoot To The Moon

    Submitted by The Machine Gun Nest (TMGN).,

    7.62×39, which many may know as a standard Russian caliber, famously used by the AK47, will be much more expensive soon, along with many other Russian calibers. Here’s why.

    In August 2021, the administration announced a ban on Russian ammunition imports, which accounts for almost 40% of ammunition in the US Market, according to industry insiders. 

    Steph with TMGN gives some background on the Russian Ammo Ban: 

    The reason behind the ban? An Aug. 20, 2020 poisoning of a Russian opposition leader, Alexei Navalny. Almost a full year later, the Biden admin (after failing to push gun control through the legislative process) decided to cut a significant supply of ammunition into the United States.

    Although current imports that were approved before the ban’s passage will continue, no new import will be approved thanks to the Biden administration. So once those ammunition shipments are sold, there will be no restock.

    To make matters worse, Russian ammo accounts for many of the more budget-friendly brands of ammo in the US Market. This import ban is, of course, an attempt to price gun owners out of being able to enjoy their 2nd amendment right.

    This backdoor gun control has become all too common for Biden, who, even during his recent announcement of the new “ghost gun rule,” mentioned his “regulatory authority” in subverting Congress and governing via executive fiat.

    Naturally, after the import ban was announced, prices for popular Russian calibers like 7.62×39, 5.45×39, and 7.62x54R shot up from their already high pandemic pricing. But, as current pre-approved imports continue, the price has come down slightly.

    As of Apr. 8, 2022, the Biden admin has now raised a 32.3% duty on all imports from Russia and Belarus thanks to the aptly named “Suspending Normal Trade Relations with Russia and Belarus Act,” or HR 7108 for short.

    This duty increase was confirmed to TMGN by a representative of Barnaul Ammunition.

    The 32.3% raise itself comes from HR 7108, making Russia & Belarus ineligible for the “most-favored-nation” tariff rates that the United States currently applies to imports from WTO member countries.

    How does this affect Russian Ammo imports, you might ask? Well, because this new law applies to all current imports, we can expect the price to increase dramatically on all Russian ammo still on its way to the US Market.

    Most components needed for ammunition production are trading at a much higher value than in years past. As supply tightens and prices increase through duties and taxes, we will see a significant increase in cost to the consumer. Additionally, this cost increase is compounded by the current commodities shock, supply chain issues, and more.

    Hopefully, in the future, US companies will start to produce these calibers in larger quantities or find a friendly nation overseas to import from. As of right now, our advice is to grab this ammo while you can.

    Tyler Durden
    Tue, 05/03/2022 – 23:25

  • Are Biden Democrats Holding A Losing Hand?
    Are Biden Democrats Holding A Losing Hand?

    Authored by Pat Buchanan,

    “Sometimes nothing is a real cool hand.”

    In the movie classic “Cool Hand Luke,” the convict Luke, played by Paul Newman, explains that to his fellow inmates after winning the pot in a hand of poker without even a pair of deuces.

    President Joe Biden should take notice. For, right now, “nothing” is the hand he is looking at going into the 2022 election.

    With the economy the predominant issue, the last business day of April brought disquieting news for Democrats.

    “Nasdaq Caps Worst Month Since 2008,” blared Saturday’s lead headline in The Wall Street Journal. “Dismal Data Fuel Stagflation Fears,” ran the top headline in the Financial Times.

    “Market Plunge Reflects Alarm of Pain Ahead,” blared The New York Times. Subhead: “Decline in April was worst in two years.”

    “Trajectory in Question as Markets Tank Again,” said page one of The Washington Post. To what was the Post referring?

    Nasdaq had closed down over 4%. The Dow Jones Industrial Average was down over 900 points on the day. The S&P 500 was off 3.6% Friday, raising April’s loss to nearly 9% of its value. Not since World War II has the S&P begun a year with a worse performance.

    This bloodbath in the markets is piled atop an 8.5% inflation rate and a shrinkage of 1.4% in the GDP over the first quarter. If a similar decline follows in the second quarter, the economy on which Biden’s party stands or falls in November will officially be in recession.

    With Biden’s disapproval rating already running 10 points higher than his 42% approval, the economic issue could bring an even larger rout of House Democrats than would be normal at the midterms.

    The issue now ranked second as a national concern is the crisis on the border where 2 million illegal migrants crossed over in Biden’s first year and the “gotaways” who evaded every U.S. official while sneaking in are estimated in the hundreds of thousands.

    Some 8,000 migrants now cross the U.S. border every day. And according to the Biden administration itself, half again that many will be crossing daily if Title 42, which enables border authorities to turn back migrants into Mexico for health concerns, is lifted this month.

    Third in voters’ concern is the explosion in violent crime, especially “mass killings” that involve four victims dead or wounded, not including the perpetrator. This year, mass killings are nearly matching the record number set in Biden’s first year.

    There was a time when mass murder, like the St. Valentine’s Day Massacre in Chicago by the Al Capone gang, or Charlie Starkweather’s murderous rampage across the Great Plains in 1958, were rare events.

    Now people shooting up malls, trains and subways, and running down people with cars and trucks are daily occurrences.

    Biden is not responsible for the explosion of carjackings and mass killings or cop shootings. But his party has come to be identified with its left wing’s campaign to “defund the police” and refocus on the “root causes” of crime, the social conditions said to produce criminals, rather than the criminals themselves.

    The Republican Party has come to be identified with solutions that involve more police, more prosecutors and more prison cells and inmates, which, increasingly, is where the country is at.

    In addition to the issues turning against the Democrats, Biden has himself become a drag on the party. His low poll numbers, verbal foot faults, visible frailty and perceived “cognitive decline” all handicap efforts to portray him as a strong, engaged and decisive leader.

    The wild card in Biden’s poker hand is the war in Ukraine.

    Biden has funneled $3.7 billion into the Ukrainian war effort and sent Javelin and Stinger missiles and, lately, heavy artillery. He is pressing Congress for an additional $33 billion — $20 billion of that in military aid — over the next five months of this fiscal year.

    Thus far, the U.S. political class in this capital has been largely united and supportive of the Ukrainians.

    But dissent is rising. Why, it is being asked, are we so focused on the Eastern borders of Ukraine when the Southern border of the United States is being breached illegally by 200,000 invaders every month, and thousands more “gotaways” — some of whom are sex traffickers, drug dealers, terrorists and members of Mexican cartels.

    The future of the United States is not likely to be altered in a significant way by who eventually controls Mariupol or the Sea of Azov.

    But more than 2 million migrants every year walking into the United States at will cannot but have an impact on the future character and composition of the nation that has lost control of its border.

    Is whether Moscow controls Luhansk and Donetsk, which it did for the duration of the Cold War and for decades before, more important to us than whether the America we grew up in becomes more of a Third World than a Western nation?

    Tyler Durden
    Tue, 05/03/2022 – 22:45

  • FOMC: More Room For Hawkish Than Dovish Surprises
    FOMC: More Room For Hawkish Than Dovish Surprises

    By Steve Englander, head of G10 FX and North America Macro Strategy at Standard Chartered

    Summary:

    • The strong consensus is that policy rates move 50bps higher and QT is announced
    • We see a hawkish stance as more likely than dovish at this meeting
    • Widening the scope for 75bp hikes at future meetings or faster QT are the main hawkish risks
    • Indicating satisfaction with market pricing would be seen as dovish
    • Market fears may rise as FOMC approaches and unwind temporarily if the FOMC does just as expected

    Hawkishness not yet interrupted

    Money markets are pricing a c.52bps hike for the fed funds target rate on 4 May and 255bps by end-2022, near peak levels for both (Figure 1). To us this signals that 50bps is the base and 75bps a long shot possibility for this meeting. Some FOMC participants have signalled that 75bps moves are under consideration, but for future meetings beyond May. There is also a consensus that details on quantitative tightening (QT) will be announced with caps on balance sheet run-off quickly moving up to a total of about USD 100BN by late Q3 or early Q4. A Bloomberg survey suggests that most (like us) expect QT to begin mid-May.

    As always, the market question is what can be hawkish or dovish versus these expected outcomes, and which side is more likely. Notwithstanding our expectation that the Fed hikes less than markets expect over 2022, we do not see much room for dovishness at the May meeting. It took a while for the FOMC to form a consensus and we don’t see an incentive for that consensus to break in H1. Monthly run rates for core PCE and average hourly earnings have come off their year-end peaks (Figure 2), but the levels remain too high and the drops too tentative for the FOMC to back off, in our view.

    On the whole, we see a risk of hawkish fears continuing to build as the FOMC meeting approaches and maybe beyond. So expectations of Fed hikes could rise as we approach the FOMC meeting, putting pressure on asset prices and supporting the USD. If the FOMC sticks to the script and raises the policy rate by 50bps and announces QT – but no more – there may even be a brief relief rally. However, for a dovish rally to last, we think a clear turn in US economic data is needed, which has not yet happened.
    The hawkishness can show itself in the statement with ‘inflation pressures continue to rise substituting for ‘inflation remains elevated as a nod to the risk of fed funds moving more than 50bps at future FOMC meetings. Or ‘the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities’ could be replaced by the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage- backed securities, initially by run-off, starting in May’. Even if the statement text is little changed, Fed Chair Powell could convey similar sentiments at the press conference

    FOMC statements so far have addressed neither what the level of neutral is nor the risk of and extent to which policy rates could exceed neutral. In the press conference, reference to the risk that estimates of neutral are rising or that policy rates could exceed neutral for a significant period or a significant amount would be viewed as ramping up the hawkish stance. In our view, much of the perception of increased hawkishness in recent weeks has come from the shift in Fed language across the hawkish/dovish spectrum from the need to get policy rates to neutral to the possible need to tighten beyond (with how much and how long unspecified).

    We think the Fed at this point sees conveying a hawkish stance as more desirable than showing any wavering. The bar to added hawkish hints is largely that there is so much already on the plate for this meeting and so much uncertainty on forces beyond the Fed’s control economic spillovers from the COVID surge in China and the Russia-Ukraine war – that the FOMC may see it as prudent to go slow on further hawkish surprises at this point.

    We don’t think there is a major incentive to surprise on the dovish side at this meeting. The FOMC still characterizes the US economy as red hot’. We see signs of a slowdown (Figure 3), but we suspect the FOMC would want to see more evidence before backing off. Nonetheless, the most likely indications of dovishness would be a press conference comment that the market is pricing likely Fed policy adequately, which would be taken by market participants as a signal that the Fed has no desire to drive rates further up. Alternatively, some reference could be made to small indications that supply-chain issues (other than China) are beginning to resolve themselves. Given market positioning, any supply-chain optimism or suggestion that rates markets have enough hikes priced would be seen as dovish, but on balance extending the frontiers of Fed hawkishness seems more likely than pulling back.

    Tyler Durden
    Tue, 05/03/2022 – 22:30

  • Taibbi: PayPal's IndyMedia Wipeout
    Taibbi: PayPal’s IndyMedia Wipeout

    Authored by Matt Taibbi via TK News,

    In the last week or so, the online payment platform PayPal without explanation suspended the accounts of a series of individual journalists and media outlets, including the well-known alt sites Consortium and MintPress.

    Each received a variation of the following message:

    Unlike many on the list, Consortium editor Joe Lauria succeeded in reaching a human being at the company in search of details about the frozen or “held” funds referenced in the note. The PayPal rep told him that if the company decided “there was a violation” after a half-year review period, then “it is possible” PayPal would keep the $9,348.14 remaining in Consortium’s account, as “damages.”

    “A secretive process in which they could award themselves damages, not by a judge or a jury,” Lauria says. “Totally in secret.”

    Consortium, founded by the late investigative reporter Robert Parry, has been critical of NATO and the Pentagon and a consistent source of skeptical reporting about Russiagate, as well as one of just a few outlets to regularly cover the Julian Assange case with any sympathy for the accused. Ironically, one of the site’s primary themes involves exploring disinformation emanating from the intelligence community. The site has had content disrupted by platforms like Facebook before, but now its pockets are being picked in addition.

    This episode ups the ante again on the content moderation movement, toward the world hinted at in the response to the Canadian trucker protests, where having the wrong opinions can result in your money being frozen or seized. Going after cash is a big jump from simply deleting speech, with a much bigger chilling effect. This is especially true in the alternative media world, where money has long been notoriously tight, and the loss of a few thousand dollars here or there can have a major effect on a site, podcast, or paper.

    As MintPress founder and executive director Mnar Adley points out, the current era of content moderation — characterized by private platforms either overtly or covertly working with government to identify accounts for censure — really began with PayPal’s historic decision in 2010 to halt donations to Wikileaks. In that case, PayPal acted after receiving a letter from the State Department claiming the site’s activities were illegal.

    “PayPal banning donations from WikiLeaks really set up the blueprint for today’s censorship,” Adley says.

    Lauria believes PayPal is basing a potential claim on his company’s funds on a list of restricted activities in its service agreement that includes providing “false, inaccurate or misleading information.” He notes, of course, that “false” is “what they think is false, that is,” which is troubling for a pair of big reasons.

    One is the ongoing possibility of government or law enforcement involvement in fact-checking decisions, as PayPal announced just last year it would be cooperating with authorities in a content moderation campaign. The other is that the thread connecting the recent affected accounts — which include the former RT contributor Caleb Maupin and the host of the Geopolitics and Empire podcast Hrvoje Morić, among others — is that they’re all generally antiwar voices, who’ve been critical either of NATO or of official messaging with regard to the Ukraine conflict.

    Alan McLeod of MintPress is one of the writers who received the notice about improper “activity” in his account. He assumed at first there had to be a mistake.

    “The claim that my activity is ‘inconsistent’ with their user agreement is complete nonsense because I literally haven’t used my PayPal account since at least August of 2021,” he says. “I actually assumed [the suspension] was because it’d been inactive for too long.”

    McLeod’s most recent article is entitled, “The NATO to TikTok Pipeline: Why is TikTok Employing So Many National Security Agents?” In it, he laid out a long list of “former spooks, spies, and Mandarins” hired by TikTok:

    While simultaneously being the Content Policy Lead for TikTok Canada, Alexander Corbeil is also the vice president of the NATO Association of Canada, a NATO-funded organization chaired by former Canadian Minister of Defense David Collenette… Another NATO-linked new recruit is Ayse Koçak, a Global Product Policy manager at the company. Before joining TikTok last year, she spent three years at NATO…

    If this is what qualifies as “false, inaccurate, or misleading information,” while CNN, MSNBC, and Fox’s daily rollout of ex-military analysts with undisclosed lobbying ties is upheld as the unobjectionable truth, it’s more or less finita la commedia for independent media. “I guess writing about big social media outlets being staffed with former NATO officials might be controversial,” McLeod quipped.

    The experience of MintPress exemplifies the logistical Whac-a-Mole controversial publishers have to play now in order to survive as businesses. In addition to the PayPal ban — which hit McLeod, Adley, and one other former Mint contributor, forcing the company to stop paying its writers via the platform — MintPress last month saw two of its fundraising campaigns on GoFundMe shut down. According to Adley, the outlet was able to receive about 90% of donations across a two-year campaign before they were abruptly cut off. At least GoFundMe didn’t try to keep “damages,” as several thousand dollars earmarked for MintPress were instead returned to donors.

    Adley believes the chief crime of MintPress is that it exists as an alternative to monolithic messaging surrounding issues like Ukraine. Moreover, she believes it’s in trouble with PayPal not for being false, but precisely for printing true uncomfortable things, like McLeod’s NATO-to-TikTok story, or Dan Cohen’s recent piece about the 150-odd Western public relations firms working with Ukraine’s Foreign Ministry. Several of these MintPress pieces about Ukraine have gone viral in recent weeks.

    “We name the names, we break through the propaganda, we show the profiteers,” Adley says. “There’s so few of us left that do that, and I think that’s why we’ve become a target.”

    As is the case with a lot of these accounts, MintPress falls out of the mainstream on whole ranges of issues. It’s come under heavy fire for its coverage of Syria, for instance. A lot of political moderates will struggle to connect with its point of view. This however is the whole point of alternative media, whose brief is to explore themes the traditional press won’t or can’t. If traditional news consumers feel comfortable reading them, these sites probably aren’t doing their jobs correctly. Censorship of them is especially concerning if law enforcement plays any role, since these are among the last media concerns to evince any skepticism about national security messaging. Unfortunately, there is reason to suspect this is the case.

    On July 26th of last year, PayPal announced a new partnership with the Anti-Defamation League (ADL) to “fight extremism and hate through the financial industry and across at-risk communities.” In describing the arrangement, PayPal talked about a third actor — the government:

    PayPal and ADL have launched a research effort to address the urgent need to understand how extremist and hate movements throughout the U.S. are attempting to leverage financial platforms to fund criminal activity. The intelligence gathered through this research initiative will be shared broadly across the financial industry and with policymakers and law enforcement.

    While companies like Facebook, Google, and Twitter at least occasionally explain why prominent accounts have been suspended, neither PayPal nor the ADL will comment about how suspensions and confiscations of companies like MintPress and Consortium fit into their efforts to head off “criminal activity.” I reached out this week not just to the media relations offices of PayPal and the ADL, but to figures quoted in last year’s announcement, including ADL’s Jonathan Greenblatt and PayPal Chief Risk officer Aaron Karczmer, getting no response anywhere.

    The ADL’s silence is particularly galling because some of the suspended accounts have written extensively about neo-Nazi movements not just in Ukraine, but in the U.S. and in other countries, including Russia. McLeod only just recently published a thread on the Nazi symbols worn by soldiers on both sides of the Ukraine conflict:

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    Is the ADL really interested in suppressing these voices? Why will they not answer questions on this front? At the very least, the ADL and PayPal should both explain the nature of their relationship to “policymakers” and “law enforcement.” Are they getting recommendations on whom to suspend from authorities? How do they identify sites for censure? So long as PayPal takes money from customers without guaranteeing they will explain suspension or confiscation decisions, or at least deigns to answer media queries about its decisions, media outlets should probably think twice about using their services.

    PayPal was sued earlier this year by three other account-holders for similar freezing of accounts without explanation. One of the original complainants was Chris Moneymaker, winner of the 2003 World Series of Poker, who claimed PayPal placed a hold on $12,000 of his money (the firm ultimately returned the funds, according to Bloomberg). The litigation involving the other complainants is still pending. PayPal meanwhile has periodically cut off other controversial media outlets, on both the left and the right. A former Infowars employee named David Knight, for instance, saw his independent broadcast show cut off last year, ironically after he broke with Alex Jones over the Stop the Steal issue.

    All of this is going on at a time when the Biden administration just announced the formation of a dystopian “Disinformation Governance Board,” preposterously headed by a bubbly former Kennan Institute fellow, Nina “The Singing Neoliberal” Jankowicz. In a detail Jonathan Swift couldn’t have written better, Jankowicz — who once cited the author of the greatest news hoax of our generation, Christopher Steele, as an expert on the “evolution of disinfo” — last year put out a video of herself as the “Mary Poppins of Disinformation.” In it, she sang a variation of “Supercalifragilisticexpialidocious” featuring lines like:

    They’re laundering disinfo and we really should take note

    And not support their lies with our wallet voice or vote…

    https://platform.twitter.com/widgets.js

    As many have pointed out, this is a literal nanny singing about the joys of the nanny state, in a song that includes lines about using the “wallet” to starve speech. There’s a fine line between parody and horror, and we’re tumbling fast to the horror side.

    Subscribe to TK News by Matt Taibbi

    Tyler Durden
    Tue, 05/03/2022 – 22:05

  • SCOTUS Leak Sparks Rise In Democrats' Odds Of Controlling Senate/House After Midterms
    SCOTUS Leak Sparks Rise In Democrats’ Odds Of Controlling Senate/House After Midterms

    About six months until the midterm elections, a leaked Supreme Court draft opinion signals the potential for Roe v. Wade to be overturned after five decades. The news sparked speculation that if the highest court in the land rules to overturn abortion as a “sacred” right to women, it could spark political gyrations ahead of the elections in November, and politicians on the Left were quick to pounce.

    Jim Bianco of Bianco Research tweeted the question: “Will the Roe decision impact the midterms?” 

    Bianco points to political future odds on PredictIt have seen a “massive spike in volume” following the leak.

    The first contract is “Which Party will Win the House in the 2022 Elections?” 

    Outlined in the chart is a surge in volume and a jump in odds for Democrats from 11% on 5/1 to 17% on 5/2. Republicans saw a decline of 90% on 5/1 to 84% on 5/2. 

    The next contract is “Which Party will Control the Senate After 2022 Election?“

    Again, another massive volume spike in political futures with Democrats increasing from 22% to 28% and Republicans declining from 78% to 74%.

    On Tuesday, President Biden reacted immediately to the leaked draft and said:

    “I believe that a woman’s right to choose is fundamental, Roe has been the law of the land for almost fifty years, and basic fairness and the stability of our law demand that it not be overturned.

    “And it will fall on voters to elect pro-choice officials this November.” 

    The Democrats now have a compelling message, something they lacked this year as the highest inflation in four decades crushes working poor Americans who struggle with record-high gas and food prices moved to the right side of the political aisle. Now, there’s a chance that some middle of the fence voters could be swayed to vote Democrat based on a potential ruling by the Supreme Court. 

    Still, Republicans have a significant lead over Democrats as a recent Gallup poll suggests Americans are far less concerned about abortion than other issues, according to Newsweek, which also said, “Roe v. Wade may not have a major effect on Republicans’ chances in the midterm elections.”

    Mark Spiegel of Stanphyl Capital commented on Bianco’s tweet and said:

    “I doubt that during our economic misery (due to inflation), this “theoretical” decision will sway many votes in December.

    “The strong anti-choice crowd ALWAYS votes Republican and the adamant pro-choicers always vote Democrat. Those in the middle will prioritize their pocketbooks.” 

    The timing of the leak (given the collapsing approval ratings) and the immediate politicization by the Biden administration are mere coincidence of course.

    Tyler Durden
    Tue, 05/03/2022 – 21:45

  • Goldman Warns 'Dollar Dominance On A Downtrend'
    Goldman Warns ‘Dollar Dominance On A Downtrend’

    As we have noted numerous times in the past (since 2014), nothing lasts forever…

    And while he falls short of the apocalyptic views of The World Bank’s former chief economist:

    “The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank.

    “The solution to this is to replace the national currency with a global currency.”

    …and Zoltan Poszar’s recent warnings of the backlash against US weaponization of the dollar against Russia, noting that

    “…wars tend to turn into major junctures for global currencies, and with Russia losing access to its foreign currency reserves, a message has been sent to all countries that they can’t count on these money stashes to actually be theirs in the event of tension… it may make less and less sense for global reserve managers to hold dollars for safety, as they could be taken away right when they’re most needed.”

    …and Dylan Grice’s fears over the end of dollar hegemony…

    https://platform.twitter.com/widgets.js

    Goldman Sachs’ Zach Pandl argues that the Dollar’s role as the dominant international currency will likely continue to decline over the coming years, reinforcing his view that the Dollar will weaken over the medium term.

    Within a country’s borders, the typical money medium used by households and firms is largely dictated by government rules and regulations. At an international level, by contrast, currency users have a choice. For over six decades, the US Dollar has been the world’s dominant international currency, reflecting both the convenience of using the US currency and a lack of suitable alternatives. But the Dollar’s international role is now under pressure on both fronts. US foreign policy choices may discourage heavy reliance on the Dollar in some cases, while policy changes by other governments, as well as technological innovation, may help facilitate diversification away from it. The Dollar’s share of global foreign exchange reserves peaked at around 85% in the 1970s and fell to below 60% last year, a downward trend we expect to continue over the coming years as other nations pivot toward other fiat currencies and, potentially, alternative money mediums.

    US foreign policy doing the Dollar no favors

    Pressures on the Dollar’s dominant international role partly stem from US foreign policy choices, in particular, the US’ aggressive use of extraterritorial financial sanctions. Given that all transactions in Dollars eventually pass through the US financial system, preventing US banks and their subsidiaries from transacting with a sanctioned entity effectively shuts that entity out of the global financial system. For example, an EU business could be prevented from trading with Iran, even if it’s legal under domestic EU law, because its bank could run afoul of US sanctions. For this reason, the EU Commission has said that US sanctions and trade disputes with other countries represent a threat to the EU’s economic and monetary sovereignty. Overuse of sanctions by the US could discourage other countries from transacting in the Dollar in the first place, a risk that US officials are well aware of. Former Treasury Secretary Jacob Lew said in 2016 that the US “must be conscious of the risk that overuse of sanctions could undermine our leadership position within the global economy, and the effectiveness of our sanctions themselves… if they excessively interfere with the flow of funds worldwide, financial transactions may begin to move outside of the United States entirely—which could threaten the central role of the US financial system globally.” Similarly, former US Secretary of State Henry Kissinger said in 2014: “I do have a number of problems with the sanctions [on Russia for its annexation of Crimea]. When we talk about a global economy and then use sanctions within the global economy, then the temptation will be that big countries thinking of their future will try to protect themselves against potential dangers, and as they do, they will create a mercantilist global economy.”

    Will the recent imposition of sanctions on Russia’s central bank over the war in Ukraine be the straw that breaks the camel’s back? Countries hold foreign exchange reserves as a store of value to use in times of crisis. But when the Russian government recently needed its reserves to stabilize the country’s financial system, they were immobilized by Western sanctions. As a result, other nations may worry that the value of their Dollar-denominated financial assets is only as solid as their relationship with the US at the time, which may motivate sovereign investors to search for alternative assets, including a more diversified mix of foreign currency holdings.

    Dollar facing stiffer competition

    Competition for the Dollar has also gotten stiffer, especially from China, which has taken significant steps to modernize and open up its financial system, leading to a wave of fixed income portfolio inflows in recent years. Since 2016, mutual fund and ETF holdings of Chinese bonds have increased sixfold and official reserve allocations to the Yuan have increased almost fourfold.

    We expect both of these trends to continue over the coming years, due to likely increases in China’s weight in major benchmark indices, as well as the Yuan’s relatively high nominal and real yields, its relatively cheap valuation, and China’s increasing strategic importance. The Bank of Israel, for instance, cited related considerations when explaining the ramp-up of its Yuan-denominated reserve assets this year. And China’s efforts to develop the first major central bank digital currency (CBDC) may also help facilitate international use of the Yuan, perhaps first by Chinese tourists abroad and partner countries in the Belt and Road Initiative.

    Separately, recent institutional upgrades to the EU—as well as the prospect of positive cash yields—could help the Euro compete with the Dollar in international currency choice over time. While the Euro functions as an international currency today, primarily in trade with its regional neighbors, it has fallen well short of the project’s initial aspirations, and is generally thought to be “punching below its weight”, for several reasons.

    • First, the Euro area has lower macroeconomic stability than other highly-developed economies, due in large part to an incomplete fiscal union and therefore more persistent internal imbalances.

    • Second, the Euro area lacks a large supply of the type of high-quality government bonds sought by sovereign investors.

    • And third, Europe lacks the geopolitical reach of the US, in part because foreign affairs and defense policy are still conducted at the member state level. While the European Union has a coordinator for regional foreign policy, and arguably some aspects of “soft power”, it lacks the type of global military arrangements that help underpin Dollar dominance.

    However, Europe tends to take steps forward in times of crisis, and the policy responses to recent disruptions are likely building a better foundation for the single currency for the future. While not billed as an effort to speed up Euro internationalization, the EU Recovery Fund/NGEU project— Europe’s response to the Covid pandemic—helps address the Euro’s structural weaknesses, and may therefore have positive implications for the currency’s global use over time. The program addresses macroeconomic instability through intraregional transfers—in effect, a step toward fiscal federalism— and also creates a new supply of highly-rated government bonds, which should be attractive to sovereigns and other international investors. Russia’s invasion of Ukraine presents new challenges for the EU and Euro area, and may damage economic growth over the short term, but could be positive for the Euro over the long term if it results in an increase in defense spending and more “hard power” for the region.

    Lastly, while cryptocurrencies are still in their infancy today, the technology could eventually be applied to certain types of international payments, possibly displacing the Dollar. The Western conflict with Russia, for example, demonstrates the key challenge that cryptocurrency networks like Bitcoin aim to solve: the need for parties who may not know or trust each other to transact value. Gold often served this role as an alternative international money medium to fiat currency in the past. Before Bitcoin, there was no digital equivalent to gold, because digital payments required a centralized intermediary. While there is no guarantee that Bitcoin will serve this purpose in the future, its foundational blockchain technology demonstrates that a scarce digital medium can be created through cryptographic algorithms and the careful use of economic incentives, and some market participants may prefer this type of digital medium to traditional fiat currencies for certain types of international payments.

    Declining dominance, eventually a declining Dollar

    In recent days and weeks, the Dollar has continued to appreciate as markets have discounted even more monetary tightening by the Fed, and, over the near term, the outlook for rate hikes in the US relative to other economies will likely remain the primary driver of Dollar exchange rates. But over a medium-term horizon, the balance of risk around the Dollar is skewed significantly to the downside, in our view, due to the currency’s high valuation (more than 10% overvalued on our standard models) and three potential structural changes in global capital flows:

    (i) fixed income flows back to the Euro area as the ECB exits negative rates,

    (ii) outflows from US equities on any sustained underperformance, and

    (iii) de-Dollarization efforts by official institutions designed to reduce exposure to Dollar-centric payment networks.

    The Dollar maintains its role as the world’s leading international currency for many reasons – with reinforcing complementarities or “network effects” a key factor – so this structure will not change overnight. But the shifting tactical and structural trends reinforce our conviction in a weaker Dollar over the medium term.

    Tyler Durden
    Tue, 05/03/2022 – 21:25

  • China-Controlled Condo Conversion At NYC's Waldorf Astoria Faces Mounting Problems
    China-Controlled Condo Conversion At NYC’s Waldorf Astoria Faces Mounting Problems

    The Waldorf Astoria is one of the most historic hotels in the US. It’s history includes a stretch of ownership by President Donald Trump (long before the start of his political career) and more recently, it became emblematic of the impact of foreign money on American real estate when Chinese insurer Anbang bought the property in one of the most richly valued American commercial real-estate deals in recent memory (the company bought the property for nearly $2 billion back in 2015).

    Now, WSJ reports that the Chinese developer’s attempts to turn the property around by converting it into luxury condos has hit a wall, the latest indication that the problems facing Chinese developers aren’t limited solely to the domestic market.

    Just last week, the American CEO/frontman for the project abruptly quit, leaving the conversion – which is already two years behind schedule – to flounder.

    According to the report, the Chinese company that’s now in control of the Waldorf (having taken over after Anbang’s founder was imprisoned for nearly two decades in China a few years ago during an anti-corruption crackdown/political purge) is aiming to finish the conversion before the end of next year, although they acknowledged that work may continue into 2024.

    Costs now are expected to run to more than $2 billion, company insiders told WSJ. That means the total acquisition and conversion costs could potentially exceed $4 billion if cost overruns rear their ugly head.  

    But even if they don’t, the conversion of the Waldorf is already expected to be one of the largest, most intricate and most expensive condo conversions and hotel rebuilds ever undertaken.

    On top of the run-of-the-mill issues pertaining to the supply-chain crunch, high materials costs and general permitting insanity, the conversion of the Waldorf has faced other issues unique to it: demolishing rooms in the century-old hotel has been a difficult process, and the fact that it’s a designated landmark has led to other complications.

    As if all these issues weren’t enough, the Chinese state-controlled company running the conversion opened a sales office to market the converted condos just before the pandemic hit and sent the real-estate market in NYC into a tailspin (although real-estate prices have rebounded substantially since).

    One luxury real-estate agent told WSJ that no sales have been reported for any of the properties soon-to-be-completed units. On the hotel side, when the property does reopen, it will feature 375 guest rooms and 375 residences. Prices are expected to start at $1.8 million for a studio apartment, before soaring to tens of millions of dollars for a penthouse. Residents will have separate entrances and amenities from hotel guests, including a 25-meter Starlight Pool overlooking Park Avenue.

    While a new sales incentive for brokers allowing them to collect their commission once a contract is sign has led to a frenzy of traffic, Donna Olshan, a luxury real-estate agent whose firm publishes a weekly report on the state of the luxury real-estate market in NYC, said the uncertainty in the global economy was likely giving many buyers second thoughts.

    “Now we don’t just have Covid, which people have gotten used to, we have war. Inflation. Rising interest rates. And China is all upside down,” Olshan said. “When you put that cocktail together, that can be daunting for a developer.”

    Tyler Durden
    Tue, 05/03/2022 – 21:05

  • Closure Of Russian Restaurants Cost McDonald's $127 Million In Q1
    Closure Of Russian Restaurants Cost McDonald’s $127 Million In Q1

    Authored by Bryan Jung via The Epoch Times (emphasis ours),

    The closure of all 850 McDonald’s restaurants in Russia has cost the fast-food chain $127 million in the first quarter of 2022.

    People sit on the terrace of a closed McDonald’s restaurant in Moscow on Aug. 21, 2014. (Alexander Nemenov/AFP via Getty Images)

    The fast-food company announced during its first-quarter earnings report on April 28 that its suspension of operations in Russia cost it $27 million in leases, supplier costs, and employee wages, and another $100 million in unsold inventory for its supply chain.

    McDonald’s is losing roughly $55 million a month to pay staff, landlords, and suppliers “for keeping the infrastructure going” for its restaurants in Ukraine and Russia, said Chief Financial Officer Kevin Ozan.

    Those losses altogether dragged its earnings down by 13 cents per share in the first three months of the year.

    McDonald’s had also temporarily shuttered its 108 locations in Ukraine for safety reasons.

    According to McDonald’s, Russia and Ukraine both accounted for roughly 2 percent of its global sales and less than 3 percent of its operating income.

    McDonald’s opened its first store in the Soviet Union two months after the fall of the Berlin Wall in 1989.

    It was a symbolic moment in the waning years of the Cold War, as the restaurant drew large crowds on its opening day.

    After heavy pressure from the Biden administration and activist consumers protesting Russia’s invasion of Ukraine, McDonald’s announced in early March that it would be temporarily closing all of its 850 locations in Russia after more than 30 years in the country.

    Since the end of February, more than 750 primarily Western companies have since curtailed operations in Russia.

    Rosinter Restaurants Holding PJSC, which operated more than 200 restaurants in Russia including nine McDonald’s locations, said on April 28 that it earned a net profit for fiscal 2021 of 94.8 million rubles versus a loss of 1.83 billion rubles in 2020 at the height of the pandemic.

    Starbucks, PepsiCo, and Coca-Cola were among those who suspended their business activities in Russia, along with Yum Brands, which had 1,000 KFC restaurant franchises and 50 Pizza Hut locations in Russia.

    It is not known when or if McDonald’s will ever resume its operations in Russia and Ukraine, but the fast-food chain said it is still committed to continuing to pay its employees in both countries.

    Excluding costs to support its operations in Russia and Ukraine, as well as other one-time expenses, McDonald’s had earned a profit of $2.28 per share last week, beating earlier estimates of $2.17.

    McDonald’s comparable sales in its overseas markets surged nearly 15 percent, despite the draconian CCP (Chinese Communist Party) virus lockdowns in China that have temporarily closed restaurants across the country.

    Meanwhile, menu price hikes and a new loyalty program helped the fast-food chain beat estimates for quarterly sales and profit with shares rising 2 percent, despite rising inflation, the war in Ukraine, and pandemic lockdowns in China, announced the company in its report.

    Many American restaurant chains have raised prices to offset skyrocketing costs from salaries to ingredients and paper packaging.

    Commodities prices for the company have roughly doubled since the fourth quarter in the United States and Europe and are now as much as 14 percent higher for the year, said Ozan.

    The 8 percent jump in McDonald’s menu prices in the first quarter versus the prior year did little to dent sales.

    The rising cost of gas, rents, and groceries for lower-income customers have caused some to buy cheaper or fewer McDonald’s menu items in certain areas, said Chief Executive Officer Chris Kempczinski to investors.

    In “certain parts of the business and in certain geographies, there is a little bit of a trade down that we’re seeing that we’re just keeping an eye on,” he said.

    “We need to make sure that we continue to have value be an important part of our proposition.”

    McDonald’s will analyze its options in those regions and will try to provide clear direction to investors no later than the end of the current quarter, said Kempczinski.

    The CEO had touted the success of the introduction of its digital loyalty program late last year, which now has 26 million subscribers, and has helped increase profits by 3.5 percent in first-quarter comparable sales in its primary U.S. market.

    The fast-food chain’s global comparable sales rose in the first quarter to 11.8 percent, above estimates for an 8.2 percent gain.

    Total revenue increased 11 percent to $5.67 billion, beating expectations of $5.59 billion.

    Reuters contributed to this report.

    Tyler Durden
    Tue, 05/03/2022 – 20:45

  • Mike Rowe Says Truckers "Aren't Buying Putin Price Hike" Spin As Diesel Hits New High
    Mike Rowe Says Truckers “Aren’t Buying Putin Price Hike” Spin As Diesel Hits New High

    Baltimore native Mike Rowe became famous as the Dirty Jobs jobs guy on the Discovery Channel. Now he’s filming the second season of “How America Works” on Fox Bussiness, showcasing the many individuals that work around the clock to keep the US economy humming. 

    During Monday’s “Fox and Friends” show, Rowe sat down with Steve Doocy to discuss out-of-control inflation. He said the tuckers he knows aren’t buying the “Putin Price Hike” narrative. 

    As the national average for diesel prices at the pump jump to a record high of $5.32 a gallon, Rowe said truckers are sending him pictures and videos of them filling up, spending more than a thousand dollars at a time. 

    “I get video almost every day now from people who we featured on ‘Dirty Jobs” and ‘How America Works.’

    “They’re just sending me videos of them at the gas pump and some of them are filling up 18-wheelers. And, I’m not kidding you, $1,100, $1,200.

    “Most people, all we can think about is the price for us at a relative terms know it’s awful. 

    “When you put $1,200 in your gas tank and just six months ago it was costing you $600 or 700, the exponential reality of it is starting to sink in. You just can’t walk that back. It touches every single thing that matters in this country. From food production to transportation … all of it,” Rowe explained. 

    Doocy then asked: “Are truckers buying the ‘Putin Price Hike’?” 

    Rowe responded by saying, “The ones I know aren’t… A guy said to me the other day, it’s like … falling down the stairs in slow motion. We’re watching it happen. It’s happening in real-time, and it’s not just diesel. It’s not just gasoline …” 

    He then explains that the rising cost of energy and fertilizer has resulted in higher food prices.

    “But you have to talk about fertilizer too. … There’s no food without fertilizer in this country. The cost of fertilizer is hundreds, hundreds of percent higher than it was. When you combine that with the cost of energy, the average person has now really gotten the memo, but not from the gas pump, from a restaurant, a steak. The cost of a steak is almost two times what it was six, seven months ago.” 

    Meanwhile, the Biden administration has launched an information war against the American people to persuade them President Putin was responsible for inflation. 

    However, most people aren’t buying the Biden narrative. A new Rasmussen poll revealed, “76% of Republicans think Biden bears most responsibility for higher fuel prices, as do 24% of Democrats and 54% of voters not affiliated with either major party.”

    With a little more than six months to the midterm elections, the Biden administration has yet to convince the American people that Putin is responsible for the highest inflation in four decades — this could prove disastrous for Democrats come November. 

    In March, a Quinnipiac University poll revealed that more Americans blame Biden than the Ukraine invasion or corporate greed for the rise in fuel prices. 

    Americans understand inflation was ripping higher well before the Ukraine conflict. The Biden got desperate last week by having the Department of Homeland Security announce the creation of the “Disinformation Governance Board” to control narratives combat whatever they deem ‘misinformation’ ahead of the midterm elections. 

    And when did the vast majority of this inflation occur? Pre-Ukraine. Hard to dispute that. 

    Watch Mike Rowe’s full interview here. 

    Tyler Durden
    Tue, 05/03/2022 – 20:25

  • Latest Shanghai Lockdown Controversy Involves Elderly COVID Patient Mistaken For Dead
    Latest Shanghai Lockdown Controversy Involves Elderly COVID Patient Mistaken For Dead

    Since the initial lockdown in Shanghai began nearly six weeks ago, there has been an abundance of horror stories ranging from elderly patients dying in the city’s nursing homes (without being officially declared COVID casualties) to COVID workers suspected of murdering the city’s pets (or at the very least those suspected of having been exposed to COVID).

    But the latest controversy has been inspired by footage apparently showing a senior citizen being mistaken for dead by staff at an ‘aged care center’ in Shanghai.

    Readers can watch the video below:

    The Putuo district government confirmed the mistake on Monday morning and announced an investigation, which has already swept up six people.

    The incident was officially reported Sunday afternoon, sparking an online controversy when videos circulating widely on Chinese social media showed two men who appeared to be mortuary workers handling a yellow body bag outside the Shanghai Xinchangzheng welfare hospital.

    In the video, the staff members can be seen moving the body, then returning to deliberate with two people in white hazmat suits after realizing that the patient is still alive.

    According to the SCMP, the incident triggered a horrified response from many Shanghai residents, whose grief and anger have reached a new peak. What’s more, the local government is facing mounting criticism for its handling of the Omicron outbreak.

    Punishments are being handed down, but it’s not clear whether this will be enough to satiate the public backlash. Four officials, including a director of the care home and a doctor, had been either sacked or reprimanded. Ge Fang, director of the Shanghai Xinchangzheng Welfare Hospital, has been fired, while a doctor in charge was barred from practicing medicine and will face further police investigation.

    Tyler Durden
    Tue, 05/03/2022 – 19:45

  • Russia Is Returning To The Gold Standard: Is China Next?
    Russia Is Returning To The Gold Standard: Is China Next?

    Submitted by QTR’s Fringe Finance

    No sooner was it that I wrote an article talking about how Russia was going to back the ruble with gold than “one of the Russia’s most powerful security/intelligence officers and a close ally of Putin” has admitted the country’s intentions to do just that.

    And I’m predicting that no sooner will the gravity of this decision finally sink in with the West that China will follow closely in Russia’s footsteps and do the same.

    Russia backing its currency with gold represents one of the most drastic changes to the foreign currency market in decades. As of 2022, precisely zero countries still adhere to a gold standard, though many countries still hold gold in reserve.

    The new global monetary system is likely going to look like Russia, China, India, Saudi Arabia and other countries with commodity-backed, sound money on one side – and the west and our allies, with our “infinite” fiat, under the tutelage of rocket surgeon Neel Kashkari, on the other.

    Despite the enormity of the situation, the news hasn’t really been digested by global markets yet. The FX market has been relatively calm, but for the ruble strengthening, and gold prices have crashed so far this week, with front month futures falling nearly $50/oz. on Monday, back down to about $1,860/oz.

    Image

    Ruble vs. Euro chart from Zero Hedge

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    Aside from the FX market, the news also hasn’t been digested by US politicians or financial “thought leaders” yet.

    However, there are underground rumblings starting to catch the ears of those who are actively listening. Ronan Manly wrote for BullionStar.com last week:

    On Tuesday 26 April in an interview with newspaper Rossiyskaya Gazeta (RG), the Secretary of the Russian Federation’s Security Council, Nikolai Patrushev, said that Russian experts are working on a project to back the Russian ruble with gold and other commodities.

    Manly was kind enough to translate the interview with RG, which stated Russia’s intentions to back the ruble with gold in crystal clear fashion:

    RG Question: And what do we need to do to ensure the ruble’s sovereignty?

    Nikolai Patrushev: “For any national financial system to be sovereignized, its means of payment must have intrinsic value and price stability, without being pegged to the dollar.

    Now experts are working on a project proposed by the scientific community to create a two-circuit monetary and financial system.

    In particular, it is proposed to determine the value of the ruble, which should be backed by both gold and a group of goods that are currency values, and to put the ruble exchange rate in line with the real purchasing power parity.”

    Manly concludes, matter-of-factly:

    So there you have it. The Russian Government is actively working on creating a gold and commodity backed Russian ruble with intrinsic value which is outside the orbit of the US dollar. 

    …

    What we are seeing now is Nikolai Patrushev and the Kremlin confirming this simple equation of linking the Russian ruble to gold and commodities. In other words, the beginning of a multilateral gold and commodity backed monetary system, i.e. Bretton Woods III.  

    Just days ago I published an in-depth analysis by my friend Lawrence Lepard, about what Bretton Woods III might look like. For anyone concerned about the future of the monetary system, it is a must-read: Putin Knows The Monetary System Is A Credit Based Ponzi Scheme: Lawrence Lepard

    Finally, to take Manly’s analysis one step further, I think China isn’t going to be far behind Russia in adopting a gold standard.

    How much can — and will — China help Russia as its economy crumbles?

    Going back to last summer, before the invasion of Ukraine happened and before inflation was an issue, I wrote an article arguing that it was the most common sense scenario for China to affix its new digital currency to gold.

    That was before Russia decided they were ready to take a stand against the west’s monetary policies and before China became interested in buying distressed strategic oil assets from Russia while the rest of the globe tries to shut the country down economically.

    Now, Russia and China are closer than they’ve ever been and arguably more unified in their interests of keeping the U.S., the west and NATO in check than they’ve ever been.

    China has also kept one eye on Taiwan, as I noted in an article last month exploring whether or not President Xi is actively entertaining the idea of catalyzing World War III. For now, those concerns have taken a back seat to the country’s bizarre recent reaction to a Covid “outbreak” that it is fruitlessly trying to control.

    Meanwhile, as Russia accepts payment for oil only in rubles or gold, “the digital yuan has already been piloted in various Chinese cities and was used in more than $8 billion worth of transactions in the second half of 2021,” CNN reported earlier this year. In other words, the rubber is starting to hit the road for China’s digital currency.

    And, with everyone locked in their homes once again, it’s extremely convenient timing.

    Is the picture becoming clear yet, or do I need to spell it out for you?

    If you haven’t read them yet, numerous articles that explain my position on Russia and China creating their own monetary system include:

    Thank you for reading QTR’s Fringe Finance . This post is public so feel free to share it: Share

    Disclaimer: I am long gold and silver and tons of miners. This is not a recommendation to buy or sell any stocks or securities. I own or may own all names I mentioned or linked to in this piece. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot.

    Tyler Durden
    Tue, 05/03/2022 – 19:25

  • US Drone Carrying Guns Across Canadian Border Intercepted After Hitting Tree
    US Drone Carrying Guns Across Canadian Border Intercepted After Hitting Tree

    In what appears to be an illegal movement of firearms from the U.S. to Canada, law enforcement in Ontario said they intercepted a drone carrying handguns. 

    Global News reports Lambton County Ontario Provincial Police found a drone that smashed into a tree along the St. Clair River near Port Lambton. On the other side of the river resides Michigan, and not too far away is Detroit. 

    Few details are known, but investigators say it’s believed the handguns were being transported across the border from the U.S. when the drone got stuck in the tree near Port Lambton.

    Police say they seized the handguns, while St. Clair Township firefighters removed the drone from the tree. – Global News 

    Lakeshore News provided more color about the guns: “Attached to the drone was a bag containing eleven handguns which investigators believe were coming from the U.S.”

    Gun smuggling has been a problem on the northern border (as well as the southern border). 

    In 2021, the U.S. Immigration and Customs Enforcement announced a new cross-border task force with Canadian law enforcement “to disrupt and dismantle the illegal movement of firearms, ammunition, and explosive weapons across the U.S.-Canadian border.” 

    Tyler Durden
    Tue, 05/03/2022 – 19:05

  • Subpoenas Issued In Georgia Ballot-Trafficking Investigation
    Subpoenas Issued In Georgia Ballot-Trafficking Investigation

    Authored by Steven Kovac via The Epoch Times,

    Georgia election officials last week issued subpoenas to obtain the identities of individuals and non-governmental organizations (NGOs) who may have engaged in the crime of ballot trafficking.

    Georgia Secretary of State Brad Raffensperger holds a press conference on the status of ballot counting in Atlanta, Ga., on Nov. 6, 2020. (Jessica McGowan/Getty Images)

    The offenses are alleged to have occurred in both the 2020 presidential election and the December 2020 U.S. Senate runoff election in Georgia.

    Recipients of the subpoenas are the election watchdog organization True the Vote (TTV), the group’s founder Catherine Engelbrecht, and the research contractors that worked on the 15-month investigation into illegal vote trafficking in Georgia and a half-dozen other swing states.

    “We presented our data a year ago to Governor Kemp (a Republican) and the Georgia Bureau of Investigation. They covered it up for seven months,” alleged Engelbrecht in an April 30 television interview on Real America’s Voice.

    “The GBI told us they had no jurisdiction,” Engelbrecht said.

    “We gave our data to the FBI in Atlanta. No response for seven months,” she said.

    “We filed a full complaint with the Georgia Secretary of State in November of 2021. We heard nothing for six months. Finally, we got the subpoenas.”

    True The Vote founder Catherine Engelbrecht in an interview with Facts Matter, in April 2022, in a still from the video. (The Epoch Times)

    In January 2022 Georgia Secretary of State Brad Raffensperger, a Republican, announced that an investigation into TTV’s allegations was underway.

    An investigative team from TTV used cell phone tracking, geo-fencing, and video footage to show that 242 mules collected thousands of absentee ballots from voters and made 5,668 stops at drop boxes in the metro Atlanta area in late 2020.

    The data is supplemented by statements from a whistleblower who also shed light on a number of NGOs orchestrating and funding the unlawful effort.

    Ballot harvesting was outlawed in Georgia in 2019.

    The evidence provided by TTV is the basis of Dinesh D’Dsouza’s new movie “2000 Mules”, which is scheduled to debut the first week of May at theaters nationwide and on streaming services.

    Ballot trafficking is the act of a third-party intermediary, called a “mule,” collecting an unlimited number of absentee ballots from voters and depositing them in ballot drop boxes for money.

    Ballot trafficking and ballot harvesting eliminate any documented chain of custody for the ballots and the practice makes official oversight of the handling of the ballots impossible.

    The elections in Georgia figure prominently in D’Souza’s latest documentary film, but the scope of the problem of ballot trafficking affects all of the battleground states.

    OPSEC Group’s Gregg Phillips conducted the geospatial investigation into ballot trafficking featured in Dinesh D’Souza’s “2000 Mules” documentary to be released next week. (Screenshot/”2000 Mules”)

    In addition to the 242 mules uncovered in Georgia, Engelbrecht said that TTV has documented the actions of 202 mules in Maricopa County, Arizona; more than 100 in Milwaukee, 500 in Wayne County, Michigan; and 1,000 in Philadelphia.

    TTV recently announced that at least 137,500 absentee ballots were cast through unlawful vote trafficking throughout several of Wisconsin’s largest cities in the 2020 election.

    Joe Biden won Wisconsin by 21,000 votes.

    Gregg Phillips, a cyber expert working with TTV, estimates that 4.8 million votes were trafficked nationally based on studies conducted by his group in Georgia, Wisconsin, Arizona, Pennsylvania, Texas, and Michigan.

    “The numbers are staggering. In order to stay in power, officials in these states engaged in an absolute subversion of the election process. Fraud has been institutionalized,” alleged Engelbrecht.

    Engelbrecht believes politics may be playing a role in the recent issuing of the Georgia subpoenas.

    “It wasn’t until the Trump rally held in Georgia (on March 26) that we saw some movement from the GBI,” she said.

    U.S. President Donald Trump at a rally at the Banks County Dragway in Commerce, Georgia, on March 26, 2022. (Megan Varner/Getty Images)

    The subpoenas were issued just weeks ahead of the May 24 primary, where Raffensperger is facing a stiff challenge from Republican Congressman Jody Hice, a vocal critic of Raffensperger’s conducting of the 2020 elections.

    Raffensperger provoked the ire of some Georgia Republicans when he administered the mailing out of absentee ballot applications to every registered voter in the state of Georgia in 2020.

    Raffensperger maintains the 2020 elections in Georgia were conducted legally and fairly.

    He also has spoken against the suggested decertification of the state’s 2020 presidential election results due to alleged cheating by Democrats.

    Hice has been an outspoken advocate for decertification and for more robust election reform in Georgia.

    According to a recent poll by the Atlanta Journal-Constitution and the University of Georgia, Hice, who has the endorsement of former President Donald Trump, is in a statistical tie with Raffensperger.

    In the four-person race, Raffensperger is polling at 28 percent and Hice has 26 percent, with 37 percent undecided.

    The remaining 8 percent is divided between the other two Republican candidates.

    Mail-in Voting Bodes Ill for Republicans

    One hundred fifty-nine million people voted in the 2020 presidential election.

    According to the United States Elections Project, in that election, 101 million people voted early in some way—35.8 million people voted early in person, and 65.6 million cast mail-in ballots.

    As of November 23, 2020, there were 26.6 million absentee ballots that were still outstanding.

    Across the country, the percentage of mail-in votes cast broke in favor of Democrats in 2020 by huge margins.

    For example, in Georgia Biden got 65 percent of the absentee votes to 34 percent for Trump.

    In Pennsylvania Biden received 76 percent of the absentee votes to 23 percent for Trump.

    15.4 million, or 87 percent of the votes cast in California, were cast somewhere other than a traditional polling place, according to the Los Angeles Times.

    Biden defeated Trump in California by over five million votes.

    Georgia Gov. Brian Kemp speaks during a press conference in Atlanta, Ga., on Aug. 10, 2020. (Elijah Nouvelage/Getty Images)

    Through a process she calls “lawfare,” Engelbrecht said Democrat-dominated states have steadily worked to change state election laws in order to dramatically increase the use of mail-in voting even prior to the pandemic.

    She voiced her displeasure with the incumbent Republicans seeking reelection that are presiding over the upcoming midterm elections in Georgia, including Kemp, Raffensperger, and Attorney General Chris Carr.

    “They have publicly torched our data. They have done whatever they could to delegitimize our work,” alleged Engelbrecht.

    “A state official has tried to intimidate our contractors by warning them that there may be no more state contracts,” she said.

    “It’s either fix 2020 or we have no hope for 2022,” she added.

    Tyler Durden
    Tue, 05/03/2022 – 18:45

  • Watch: Selfie App Scans Eyes For Neurological Diseases
    Watch: Selfie App Scans Eyes For Neurological Diseases

    Researchers at the University of California San Diego have discovered an innovative way to detect neurological diseases like Alzheimer’s through a smartphone app that uses the device’s camera to monitor eye movement to assess cognitive health.

    UC San Diego reports the new app utilizes the smartphone’s RGB selfie camera and the front-facing near-infrared camera to track how a person’s pupil changes in size. Those pupil measurements can reveal a person’s cognitive condition. 

    “While there is still a lot of work to be done, I am excited about the potential for using this technology to bring neurological screening out of clinical lab settings and into homes.

    “We hope that this opens the door to novel explorations of using smartphones to detect and monitor potential health problems earlier on,” said Colin Barry, an electrical and computer engineering Ph.D. student at UC San Diego and the lead author of the paper. 

    Barry said the pupils offer insight into a person’s neurological functions. An example of this would be pupil size increases during a challenging cognitive task or unexpected sound. Being able to measure changes in pupil diameter is called a pupil response test. 

    “A scalable smartphone assessment tool that can be used for large-scale community screenings could facilitate the development of pupil response tests as minimally-invasive and inexpensive tests to aid in the detection and understanding of diseases like Alzheimer’s disease. This could have a huge public health impact,” said Eric Granholm, a psychiatry professor at UC San Diego School of Medicine and director of the MHTech Center.

    Researchers said the app’s measurements were comparable to a handheld pupillometer used in doctor offices. 

    “For us, one of the most important factors in technology development is to ensure that these solutions are ultimately usable for anyone. This includes individuals like older adults who might not be accustomed to using smartphones,” said Barry. 

    More testing is needed, but one day, scanning for brain diseases could be as easy as opening up a smartphone app and snapping a few pictures of the eyes while sitting at home. 

    Watch the app scanning for brain diseases. 

    Tyler Durden
    Tue, 05/03/2022 – 18:25

  • Dear Illinois Parents, Your Kid's Sex-Ed Curriculum May Be More Extreme Than You Think
    Dear Illinois Parents, Your Kid’s Sex-Ed Curriculum May Be More Extreme Than You Think

    Authored by Ted Dabrowski and John Klingner via Wirepoints.org,

    It doesn’t matter where you stand on the issues of sex-ed, pronoun usage or transgenderism in school, you should know who’s teaching your kids, what they’re teaching them and whether there’s more than meets the eye. 

    How far does the sex ed curriculum go? What’s being “normalized” by your school’s teachers? Who sets the agenda and how are your children’s teachers being trained? And how does the material align with your family values?  

    Judge for yourself in the case of AMAZE.org, an organization with materials that have made its way into Illinois schools. According to its website, AMAZE “takes the awkward out of sex ed. Real info in fun, animated videos that give you all the answers you actually want to know about sex, your body and relationships.” 

    AMAZE videos appear on standards proposed for Illinois’ New Sexuality Ed courses by the group’s partner organization Advocates for Youth, which are posted on this website. And Advocates for Youth appears as a resource on the Illinois State Board of Education website.

    Some of the AMAZE videos cover some basic sex ed topics with little to object to. But there are others that many parents are sure to find objectionable. Take a look at these two short videos for a sample.

    We were recently made aware of AMAZE by a parent from Avoca SD 37, a two-school district in the New Trier Township with some 700 total students. The parent noticed that AMAZE’s video for instructing young children on pronoun usage was linked in the principal’s April newsletter.

    A FOIA by Wirepoints further revealed that other AMAZE videos are now part of the district’s curriculum. Avoca contracts out its 5th grade reproductive health education to Lurie’s Children’s Hospital, a leading youth transgender clinic in the midwest. Lurie’s education materials use AMAZE’s body odor, male anatomy and female anatomy videos. 

    The problem is, Lurie Hospital has effectively vetted AMAZE by using their materials. And now that students have seen the intro videos, they have knowledge of and access to the group’s other controversial videos like the ones above.

    Some parents may be okay with normalizing porn for their children, but most won’t be. Many others will take exception to the group’s position on masturbation.

    AMAZE will also step over the line for many parents with its handing of transgender issues like gender identity, transgenderism and puberty blockers.

    While Avoca SD 37’s use of AMAZE is just one example, it may very well be that the company’s videos, or something like it, may soon be standard in sex ed curriculums statewide. Illinois passed legislation last year requiring ISBE to finalize new sex ed standards by August 1, 2022.

    The spread of AMAZE into district curricula is concerning, not just because of its content, but because most parents have little idea of what’s actually being taught in their children’s classrooms.

    It took a FOIA by Wirepoints, and subsequent questioning, to find out about AMAZE’s full role in Avoca’s sex ed lesson. It shouldn’t be that difficult.

    Parents should have more power and control over curriculums. At the very least, they should know what’s being taught so they can choose whether or not to opt their children out.

    *  *  *

    Read more from Wirepoints:

    *  *  *

     

    Tyler Durden
    Tue, 05/03/2022 – 18:05

Digest powered by RSS Digest

May 03

Today’s News 3rd May 2022

  • Speed-Limiters Will Be Equipped In All-New EU Cars Beginning Next Month
    Speed-Limiters Will Be Equipped In All-New EU Cars Beginning Next Month

    On July 6, all new vehicles sold in Europe – including the UK – will be equipped with a speeder limiter as per new legal requirements to boost road safety. 

    The new speed limit assist system “will become mandatory on new cars in 2022 uses a forward-facing camera mounted on the car and the vehicle’s satellite navigation system to identify the speed limit and, if the car is exceeding it, to restrict the fuel flowing to the engine until the vehicle is at the limit speed,” British automobile magazine Autocar said. 

    Autotrader added: “The speed limiter will send haptic, audio, and visual warnings until you start driving within the speed limits.” 

    EU officials believe the speed limiters will increase road safety while reducing exhaust emissions. 

    Matthew Avery, director of research at Thatcham Research, told UK paper Telegraph & Argus: “Many drivers want to remain safe and drive within the law, however changing from one speed limit to another can be difficult and distracting. In this respect, Intelligent Speed Assistance systems help to not only keep drivers safe but also legal.”

    The rules aren’t retroactive, so older vehicles will still be able to go above the speed limit. It may be near impossible to fit the technology on cars built decades ago. 

    On the other side of the Atlantic Ocean, the Biden administration has signed a new law requiring automakers to equip new cars beginning in 2026 with government kill switches. 

    Under the guise of “safety measures,” Western governments’ move to place more control over private citizens’ vehicles is a glimpse of the dystopic future that remains ahead.  

    Tyler Durden
    Tue, 05/03/2022 – 02:45

  • "Ghost Of Kyiv" Fighter Ace Was Fake News, Ukraine Military Admits
    “Ghost Of Kyiv” Fighter Ace Was Fake News, Ukraine Military Admits

    Authored by Bill Pan via The Epoch Times,

    The mysterious Ukrainian war hero hailed as the “Ghost of Kyiv” not only didn’t die in combat, but also wasn’t real, the Ukrainian military has said.

    The unsubstantiated tale about an anonymous Ukrainian fighter jet pilot who allegedly took down six Russian warplanes in one day has been circulating on social media since the early days of Russia’s full-scale military offensive against Ukraine. The story gained major media attention and was perpetuated by official Ukrainian social media channels, including Twitter accounts of the Ukrainian government and former president Petro Poroshenko.

    “People call him the Ghost of Kyiv, and rightly so,” Ukrainian government wrote on Twitter on Feb. 27.

    “This UAF ace dominates the skies over our capital and country, and has already become a nightmare for invading Russian aircrafts.”

    Over the past two months, many people questioned whether the “Ghost” was real. But it wasn’t until the supposed death of the Ghost made news headlines that the Ukrainian military came out and admitted there never was such a person.

    Last week, The Times of London identified the Ghost as Stepan Tarabalka, a 29-year-old man flying a MiG-29 fighter jet. According to the report, Tarabalka had shot down as many as 40 Russian aircraft until he was “overwhelmed” by the enemy forces and killed on March 13.

    The report prompted the Ukrainian Air Force to clarify that Tarabilka did die in a battle, but he was definitely not the “Ghost of Kyiv,” which is but a fictional character created to boost Ukrainian morale in their conflict against Russians.

    “Stepan Tarabilka is not a ‘Ghost of Kiev’ and he did not shoot down 40 planes,” UAF spokesman Yuriy Ignat told The NY Times. “On March 13, 2022, Major Stepan Tarabilka heroically died in an air battle with the superior forces of the Russian occupiers.”

    “The ‘Ghost of Kyiv’ is a superhero legend who was created by the Ukrainians! This is rather a collective image of the pilots of the 40th Tactical Aviation Brigade defending the sky of the capital. Which suddenly appear where they are not expected.”

    In another Facebook post, Ukraine’s Air Force Command again confirmed that “the Ghost of Kyiv is a superhero-legend.”

    “Hero of Ukraine Stepan Tarabalka is NOT ‘Ghost of Kyiv’ and he did NOT shoot down 40 planes,” the post reads.

    The story comes as Ukraine continues to ask the United States to provide American fighter jets, such as F-16s, to help deny Russian air advantage over Ukrainian skies. Senior Pentagon officials said, however, that Ukraine has an air force that “relies principally” on Russian-made aircraft, and F-16s are not yet a part of America’s aid plan.

    “We have been providing and helping coordinate from other nations that have the kinds of aircraft that the Ukrainians fly,” a senior defense officials said at an April 28 press conference, referring to former members of the Eastern Bloc and their Soviet-era jets.

    “I’m not going to speculate about future aircraft deliveries one way or the other. Again, this is an Air Force that relies principally on old Soviet aircraft, that’s what they’re used to flying, that’s what they’ve got in their fleet,” the official said.

    Tyler Durden
    Tue, 05/03/2022 – 02:00

  • China Holds Secret Bank Meetings To Plan For Protecting Assets From US Sanctions
    China Holds Secret Bank Meetings To Plan For Protecting Assets From US Sanctions

    China is taking serious steps to prepare itself for potential future US sanctions such as have been imposed against Russia’s banking sector, with regulators recently convening an emergency meeting of domestic and foreign banks to examine how to best protect the country’s overseas assets. 

    Over the weekend the FT identified that the internal conference was held on April 22 and included top officials from China’s central bank and finance ministry. It’s also said that representatives were sent from every domestic and Chinese overseas bank, and additionally some China-tied international institutions, notably among them HSBC. The somewhat secretive conference was held as Russia is charging Washington with stealing $300 billion of its assets held overseas.

    The People’s Bank of China (PBOC), via Reuters

    “Western nations have actually stolen more than 300 billion US dollars from Russia when they seized the money meant to pay for Russian gas, Russian Foreign Minister Sergey Lavrov said in an interview with Al Arabiya TV on Friday,” wrote state-run TASS base don the top diplomat’s words.

    Lavrov had with the last days again described US-led actions of the West “shameless robbery” and described, “London, Washington, Brussels are looking at seizing the money they have frozen to transfer it to someone else.”

    Indeed there’s been open talk of using seized Russian assets, including frozen Russian Central Bank reserves, to rebuild Ukraine in the future and to fund Ukrainian institutions. European countries have led to way in the seizures with Washington’s goading. 

    It appears China is taking note and not sitting idly by for its own similar crisis, especially as rhetoric ratchets concerning Taiwan and potential parallels with Ukraine. The emergency meeting also came after starting in March the Biden administration began expressly warning Beijing not to serve as enabler to Russia’s military machine by supplying it, or also assisting in sanctions evasion. Biden had in a March 18 call conveyed this warning to President Xi Jinping directly.

    https://platform.twitter.com/widgets.js

    Citing official sources out of China, FT details the following: “…the meeting began with remarks from a senior finance ministry official who said Xi’s administration had been put on alert by the ability of the US and its allies to freeze the Russian central bank’s dollar assets.”

    “The officials and attendees did not mention specific scenarios but one possible trigger for such sanctions is thought to be a Chinese invasion of Taiwan, which China claims as its territory and has threatened to invade if Taipei refuses to submit to its control indefinitely,” the report continued.

    A person briefed on some specifics discussed at the meeting told FT: “If China attacks Taiwan, decoupling of the Chinese and western economies will be far more severe than [decoupling with] Russia because China’s economic footprint touches every part of the world.” And more from the report:

    Senior regulators including Yi Huiman, chairman of the China Securities Regulatory Commission, and Xiao Gang, who headed the CSRC from 2013 to 2016, asked bankers in attendance what could be done to protect the nation’s overseas assets, especially its $3.2tn in foreign reserves. China’s vast dollar-denominated holdings range from more than $1tn US Treasury bonds to New York office buildings. State-owned Dajia Insurance Group, for example, owns the Waldorf Astoria New York.

    At the same time, it seems Taiwan is on the opposite side of taking notes from the Ukraine playbooks and domino effect of international reaction. 

    “We try to see what we can learn from Ukraine in defending ourselves,” Taiwan’s Foreign Minister Joseph Wu told CNN’s Fareed Zakarai in a Sunday interview.

    As China engages in long-range preparations for a theoretical economic war with the West as a result of a Taiwan armed showdown, Taipei is thinking purely strategic defense and survival with help from the West. “There are two things, of course,” Wu said in the interview. “The first is asymmetric capability. Look at the Ukrainians, they use small personal weapons to go against a large enemy. And I think that is something we can learn from. In fact, we have been preparing for that, but we need to make more investment in this regard.”

    “The second area we can learn from Ukraine is civil defense. Look at the Ukrainian people,” the foreign minister added. “All of the males are having the determination to defend the country. They want to serve in the military. They want to go to the war zones to fight against Russia. That kind of spirit is enviable for the Taiwanese people.”

    Tyler Durden
    Mon, 05/02/2022 – 23:20

  • "The End Of Euphoria": Earnings Season Turns Dire As Corporate Sentiment Plummets
    “The End Of Euphoria”: Earnings Season Turns Dire As Corporate Sentiment Plummets

    Last week, when we commented on corporate earnings ahead of the upcoming “week 3” deluge of earnings where a whopping 46% of S&P500 companies would announce results, we summarized the sorry state of affairs as follows: “Q1 Earnings From Bad To Dismal: Tech Earnings Sliding, Guidance Collapsing.” In the 7 days since, things have only gotten from “dismal” to even worse, and as Bank of America’s Savita Subramanian writes in her weekly Eranings Tracker now that week 3 is in the history books…

    …. we have clearly reached the “end of euphoria” phase.

    Which is not to say that earnings as reported are terrible, on the contrary: 276 S&P 500 companies (71% of earnings) have reported so far, and consensus 1Q EPS has risen 4% since April 1 to $53.54, up 9% YoY, with all 11 sectors are beating consensus, and 56% beating on both sales and EPS vs. a typical 44% Week 3 rate.  

    Underscoring what we reported last week, the two COVID demand reversals observed this quarter continue apace: first, a rapid shift from rate-sensitive big ticket items (housing & autos) to services (Exhibit 7), which will be a headwind for S&P earnings (50% goods vs. 20% goods for the economy). Second, Tech earnings are lagging. Its 2022 consensus earnings as % of S&P 500 earnings are now below are now below where it stood at the end of 2020, implying to full reversal of COVID-driven demand pull forward (Exhibit 8).

    So far so good, but that’s as good as it gets. Because while consensus 2022 EPS rose 1% since April 1, it was entirely driven by Energy (and dropped -0.2% ex-Energy). Worse, when looking forward, both BofA’s guidance ratio (sliding to just 0.7x in April) and its earnings revision ratio (0.8x) have plummeted to the lowest since 2Q20, confirming the collapsing outlook trend we first noted one week ago.

    It’s not just guidance that is imploding: according to Bofa’s Predictive Analytics team corporate sentiment sharply fell this quarter, representing the lowest level since 2Q20. Other than the COVID-impacted 1Q-2Q20, this marks the lowest level since 2Q16 when trailing 12-mo. EPS fell 2.7% peak-to-trough.

    Worst of all, the sentiment score has also been highly predictive of the following quarter’s earnings growth YoY (54% r-sq), and points a sharp drop in earnings ahead. 

    Adding insult to injury, companies’ mentions indicate a sharp drop in business conditions, with the spread between “better” or “strong” vs. “worse” or “weaker” falling to the lowest level since 2Q20.

    Oblivious of this sharp reversal in corporate sentiment, analysts continue to expect S&P net margins (ex-Fins) reaching new highs by 2Q, which is at this point ridiculous and overly optimistic and sets the stage for sharp downside risks to consensus earnings.

    Meanwhile, oblivious to reality, Wall Street consensus remains – as usual – too optimistic: as BofA notes, history shows analysts typically start the year too optimistic and cut estimates throughout the year. Since 2001, actual EPS came in 5% below where consensus stood at the beginning of the year on average (-1% excluding 2008 and 2020).

    Consensus EPS for both 2022 and 2023 continued to climb higher YTD (+3% and 2%, respectively) driven by higher Energy earnings…

    … but expect this to tumble once the weak guidance and slowing macro conditions finally make it clear to Wall Street that the euphoria is now officially over.

    More in the full note available to professional subscribers.

    Tyler Durden
    Mon, 05/02/2022 – 22:40

  • Why Every American Should Care That Diesel Prices Are Surging Across The Country
    Why Every American Should Care That Diesel Prices Are Surging Across The Country

    By Craig Fuller, CEO of FreightWaves,

    Gasoline prices are increasing almost daily, pinching the wallets and pocketbooks of nearly all Americans with cars. However, as bad as that news is, diesel prices are surging even more across the country.

    The cost of diesel fuel impacts truckers and the entire economy

    Today’s truckstop retail diesel prices hit a new record of $5.32/gallon. Since February 1st, national truckstop diesel prices have increased by $1.57/gallon. For an owner-operator whose truck gets 6.5 miles per gallon, this equates to a cost increase of $0.24 per mile.

    Diesel’s importance to our economy

    To many Americans (including politicians), diesel prices are so removed from their version of reality that they often dismiss the importance of diesel to the U.S. and global economies. However, diesel is the fuel that drives the economy and leaves major industries vulnerable to cost shocks. 

    Without diesel fuel, the U.S. economy would collapse in a matter of days. Our supply chains would completely shrivel, almost overnight. 

    Trucks use it to haul our goods across the country. Of all Class 8 trucks (the big ones), 97% use diesel. No, Elon Musk is not going to save us here. When Tesla announced the Semi in 2017, Musk projected that over 100,000 would be produced by 2022. Today there are less than 20, mostly prototypes. 

    Trains also depend on diesel to transport products across the country. Almost every train in the country depends on diesel for energy. 

    A BNSF train hauls coal. (Photo: Flickr/Aaron Hockley)

    Even a large portion of our electricity is indirectly powered by diesel. Over one-fifth (22%) of our electricity in the United States comes from coal. Diesel-powered trains transport coal to power plants across the nation. 

    Diesel is also critical to our imports and exports, because 80% of the ships that transport products via the ocean are powered by diesel. 

    A world without diesel would mean that our grocery stores and restaurants would run out of food, retail store shelves would be empty, and hospitals would run out of medical supplies. But that is just scratching the surface. 

    Maersk container ships (Photo: Flickr/Kees Torn)

    Diesel’s importance to agriculture

    Farmers use diesel to power most of their machinery. According to the Diesel Technology Forum, diesel is critical to the farming industry: 

    One reason why U.S. agriculture is among the most productive and economically valuable in the world; producing more yield in less time with fewer inputs, is thanks to the advancements in the machines and equipment that do the planting, harvesting and tending to the land. Today, diesel engines power the majority of agricultural equipment in the U.S. and around the world necessary to plant, cultivate and harvest crops and transport them to markets or for processing and then delivered ultimately to the consumer.

    Diesel engines power more than two-thirds of all farm equipment, transport 90% of its product and pump one-fifth of its water in the United States. Ninety-six percent of the large trucks that move agricultural commodities to railheads and warehouses are powered by a diesel engine. One hundred percent of the freight locomotives, marine river grain barges and ocean-going vessels that deliver these products to markets at home and abroad are powered by diesel.

    In the agricultural sector, there is no cost-effective substitute for diesel engines with the same combination of energy efficiency, power and performance, durability and reliability. Diesel dominates the entire “farm supply chain” – planting the product, tending the crop (watering, fertilizers, and pesticides), harvesting the product and even bringing the product to market by truck, rail or ship. Farm tractors, combines, irrigation pumps and other equipment are the workhorses in an industry vital to our national economy and quality of life.

    Nearly every fishing vessel around the world uses diesel for power. Without diesel, our fishing food supply chain would collapse.

    The Pharr-Reynosa International Bridge is one of the largest land port for fruits and vegetables in the nation. (Photo: Customs and Border Protection)

    Diesel’s importance to the industrial sector

    Diesel also powers the construction industry. From the Diesel Technology Forum: 

    Roughly 850,000 diesel-powered vehicles nationwide are in use bringing supplies, materials and workers to and from U.S. construction sites. Earthmovers, bulldozers, bucket loaders, backhoes, cranes, pavers, excavators and motor graders are all essential to building and expanding our economic infrastructure. For most of these machines, there is simply no substitute for diesel power. No viable alternative has yet emerged for equipment that exceeds 500 horsepower; some construction engines produce several thousand horsepower.

    Since diesel powers the industrial economy, the recent surges in prices will put additional inflationary pressures on the U.S. economy – in the sectors that have already experienced unprecedented inflation – transportation, agriculture, and construction. 

    But this may be less damaging than demand destruction that may come along with price surges, especially in transportation and construction. 

    Tyler Durden
    Mon, 05/02/2022 – 22:20

  • RBA Preview: First Rate Hike Since 2010
    RBA Preview: First Rate Hike Since 2010

    The Australian central bank, the RBA, is expected to hike the Cash Rate Target by 15bps to 0.25% at its meeting on Tuesday, its first hike since 2010.

    As Newsquawk writes, Australia’s highest annual inflation in more than two decades and above target Preferred Trimmed Inflation spurred calls for a sooner lift-off, while the RBA also dropped its ‘patient’ reference at the last meeting. That said, some expect the RBA to wait for more wage data and after the election before hiking with Australia’s largest bank CBA, Goldman Sachs and HSBC among those calling for a hold.

    Here is a detailed preview of what to expect from the RBA in a few hours, courtesy of Newsquawk.

    OVERVIEW: The RBA will decide on rates on Tuesday in what is widely viewed as a live meeting as swaps traders have fully priced in a 15bps hike in the Cash Rate Target to 0.25% from the current record low of 0.10% and with a 25% chance of a greater 40bps move. Furthermore, a recent Reuters survey of 32 economists showed that 16 anticipated a 15bps hike, 4 called for a 40bps increase, while 12 saw no change to rates.

    HIGH INFLATION BROUGHT FORWARD RATE HIKE CALLS: Expectations for a sooner lift-off were spurred after the mostly firmer than expected inflation data for Q1 which showed headline annual inflation at 5.1% vs. Exp. 4.6% (Prev. 3.5%) for the fastest pace of increase in more than two decades and the RBA’s preferred trimmed mean inflation also surpassed the central bank’s 2-3% target at 3.7% vs. Exp. 3.4% (Prev. 2.6%). This prompted an adjustment of rate hike expectations with JPMorgan anticipating the RBA to hike by 15bps in May and Westpac also bringing forward its rate hike call in which it now expects a 15bps increase at Tuesday’s meeting followed by a 25bps move in June from a previous forecast of a 40bps increase in June.

    RBA’S RECENT HAWKISH PIVOT VS. UPCOMING FEDERAL ELECTION: The RBA opened the door for an earlier hike after having dropped its reference to the Board being “patient” from the statement at its last meeting and noting that developments have brought forward the likely timing of the first rate hike, while it also stated in the recent semi-annual Financial Stability Review that it is important borrowers are prepared for an increase in interest rates. Conversely, others are not convinced of a move at the upcoming meeting with Goldman Sachs and Capital Economics in the June lift-off camp, while CBA and HSBC also anticipate no change in rates at this meeting in which the arguments for a pause include the RBA’s previous desire to wait for wage data in coming months and with Australians set to go the polls for the election on May 21st.

    ANNOUNCEMENT: The announcement is scheduled for 05:30BST/00:30EDT where the focus will be centerd on the actual decision on rates with a 15bps hike likely to be supportive for AUD/USD and even more so if there is an aggressive move of 40bps, while a surprise hold in rates would pave the way for AUD selling unless the central bank counterbalances it with hawkish remarks for an impending rate increase. Attention will also be on the statement for the latest clues on central bank policy and if the RBA makes any announcement regarding its government bond holdings as ANZ Bank previously suggested the RBA may allow government bond holdings to mature without reinvesting them.

    Tyler Durden
    Mon, 05/02/2022 – 22:00

  • They Can Print Money, But They Can't Print Food
    They Can Print Money, But They Can’t Print Food

    Authored by Michael Snyder via TheMostImportantNews.com,

    Whenever there is some sort of a major crisis, our politicians normally attempt to solve it by spending money.  But in this case, that isn’t going to work.  Our leaders can try to throw billions or even trillions of dollars at the global food crisis, and they may even convince themselves that they are making a difference.  However, the truth is that they simply cannot create food out of thin air.  As I discussed last week, we are facing a worldwide nightmare of epic proportions.  Fertilizer prices have spiked to absurd levels, extremely bizarre weather patterns are playing havoc with crop production all over the planet, and the war in Ukraine has caused a growing supply crunch that will not be resolved any time soon.  There simply is no “magic wand” that our politicians can wave that will make this problem go away.

    Even before 2022 came along, global food supplies were getting really right.  In fact, it is being reported that more than 800 million people did not have enough food to eat in 2020…

    The world was already rife with hunger before Covid-19 struck. In 2020, up to 811 million people – nearly one in 10 people – did not have enough food. And now the world is hurtling towards an unprecedented hunger crisis.

    Global hunger increased steadily during the COVID pandemic, and now a whole host of other factors are accelerating matters.  At this point even Joe Biden is admitting that the coming food shortages are “going to be real”, and his administration just announced that a whopping 670 million dollars will be directed to nations where things have already become quite desperate…

    Today, the Biden Administration announced that the U.S. Department of Agriculture (USDA) and the U.S. Agency for International Development (USAID) are taking the extraordinary step to draw down the full balance of the Bill Emerson Humanitarian Trust (BEHT) as part of an effort to provide $670 million in food assistance to countries in need as a result of Putin’s unprovoked invasion of Ukraine. The world is suffering from historic levels of global food insecurity, which is being exacerbated by the impact Russia’s war on Ukraine is having on global food supplies.

    When all of that money is gone, Joe Biden will inevitably ask for more.

    But he can’t conjure up more food out of nothing.  All he can do is to redistribute whatever is available.

    And with each passing day, this growing crisis just seems to get even worse.

    Last month, I wrote a long article about the series of mysterious fires that are happening at food industry facilities all over the United States.  Since then, there have been more fires, including a fire that happened at a Perdue Farms facility in Virginia on Saturday evening…

    A fire took place at Perdue Farms facility in the South Norfolk area of Chesapeake Saturday evening.

    The Chesapeake Fire Department is currently working on an industrial fire at the grain processing and storage facility.

    Firefighters received a call at 501 Barnes Road at 8:41 p.m. after a plant operator at Perdue acknowledged and verified a fire at the location. All employees from the area were evacuated.

    Why are so many important food processing facilities suddenly erupting in flames?

    I think that all of us would like an answer to that question.

    Meanwhile, weather conditions continue to be a massive headache for farmers in the middle of the country.  On Friday, a huge tornado ripped through an important area of rural Kansas…

    Following a devastating tornado that crashed down in Andover, Kansas, 40 million Americans remain under severe storm threat as two separate weather systems move through over a dozen states.

    On Friday a devastating tornado ripped through Kansas leaving the city of Andover with extensive damage as it leveled multiple homes and damaged the Capital Federal Amphitheater and the local YMCA, which saw part of its roof collapse, KWCH reported.

    On the other side of the globe, extreme heat is the major problem right now.

    In India, an unprecedented heat wave threatens to significantly reduce wheat production…

    An unusually early, record-shattering heat wave in India has reduced wheat yields, raising questions about how the country will balance its domestic needs with ambitions to increase exports and make up for shortfalls due to Russia’s war in Ukraine.

    Since the depths of the pandemic, the price of wheat has more than doubled, and many experts are anticipating that it will go a lot higher from here.

    Of course fertilizer prices have been going up even faster.  Some fertilizer prices have more than tripled, and as a result much less fertilizer will be used all over the globe this growing season.

    In Brazil, one of the largest farming companies just announced that it will be substantially reducing the amount of fertilizer that it uses in 2022…

    Soaring prices for industrial fertilizer have forced one of Brazil’s largest farmers to initiate plans to reduce nutrient spreading on fields by at least a quarter in 2022-23, according to Bloomberg.

    SLC Agricola SA, which manages soybeans, corn, and cotton fields in an area larger than the state of Delaware, will reduce the use of fertilizer by 20% and 25%, Chief Executive Officer Aurelio Pavinato said.

    Needless to say, similar things are happening all over the planet.

    Just check out these examples…

    Coffee farmers in Brazil, Nicaragua, Guatemala, and Costa Rica, some of the largest coffee-producing countries, are expected to spread less fertilizer because of high costs and shortages. A coffee cooperative representing 1,200 farmers in Costa Rica predicts coffee output could slip 15% next year because of soaring fertilizer costs.

    The International Fertilizer Development Center (IFDC) warned a reduction in fertilizer use would shrink yields of rice and corn come harvest time. Farmers in China, India, Bangladesh, Indonesia, and Vietnam — the largest rice-producing countries — are spreading less fertilizer, and may result in a 10% reduction in output, equating to about 36 million tons of rice, or enough food to feed a half billion people.

    When more fertilizer is used, yields are higher and more food is produced.

    When less fertilizer is used, yields are smaller and less food is produced.

    In 2022, global food production will be way below original expectations.

    In other words, there isn’t going to be enough food for everyone.

    The worldwide famine that I have been warning about for years is now here.

    The way that we produce our food is not sustainable, and experts have known about this for a very long time.

    It was inevitable that a day of reckoning would come, and now recent events have greatly accelerated matters.

    And the truly frightening thing is that many of the factors that are causing this crisis are not going to go away any time soon.

    So if you think that things are bad now, just wait until we get a couple more years down the road…

    *  *  *

    It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.

    Tyler Durden
    Mon, 05/02/2022 – 21:40

  • Ukraine Missile Attack Just Misses Secretive Visit By Russia's Top General To Front Line
    Ukraine Missile Attack Just Misses Secretive Visit By Russia’s Top General To Front Line

    Ukraine’s military is touting that a major rocket strike on a makeshift command center in the country’s east near the Donbas had just missed the presence of Russia’s highest general. 

    It was revealed Sunday that for the first time in the war the chief of staff of Russia’s forces and President Vladimir Putin’s top military adviser Gen. Valery Gerasimov made the secretive trip to observe firsthand military gains in the region. 

    Chief of the General Staff of the Russian Armed Forces, Gen. Valery Gerasimov, file image

    The New York Times had described the rare, high-risk journey to Izium as an attempt to boost morale and “change the course” of the slow pace of the advance in capturing the eastern territories.

    “Our working assumption is that he was there because there’s a recognition they haven’t worked out all their problems yet,” a US official told The New York Times.

    Gen. Gerasimov already departed the area back to Russia following a reported two-day trip to the Russia-captured zone. Ukraine forces still claim to have killed another general during the strikes, but this is unconfirmed:

    Ukrainian officials said an attack on a key Russian command center in the eastern city of Izyum on Saturday evening killed about 200 Russian troops, including Maj. Gen. Andrei Simonov, but just missed hitting the chief of the general staff of the Russian military, Gen. Valery Gerasimov, who had just concluded a secret visit to the army and airborne command center. Earlier, unconfirmed reports suggested Gerasimov was wounded in the strike.

    The attack reportedly took out School No. 12, Russia’s Izyum command center, following Gerasimov’s secretive visit which was only made public in the aftermath. Ukraine government officials are claiming that there were a “Large number of casualties among senior Russian officers” – but the Kremlin has not acknowledged the assertions is not expected to.

    Ukraine’s military says it received belated intelligence on the Russian commander’s high-level visit to the frontlines…

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    A top Ukraine military official told the NY Times that “The decision to destroy this object was taken not because of Gerasimov, but because it is an important base of operations.”

    If it’s accurate that the strike killed Gen. Simonov, he “could be at least the 10th Russian general killed during Russia’s Ukraine war,” according to The Week. While it’s clear that some high-ranking commanders have been among the casualties since the Feb.24 invasion began, in many cases it’s proven impossible to verify the list of generals Ukraine’s military says it’s killed thus far.

    Tyler Durden
    Mon, 05/02/2022 – 21:20

  • Supreme Court Set To Overturn Roe v Wade, Leaked Draft Opinion Shows
    Supreme Court Set To Overturn Roe v Wade, Leaked Draft Opinion Shows

    A leaked draft of a US Supreme Court decision reveals that the majority of the court has decided to overturn Roe v. Wade by a vote of 5-4, according to Politico, which calls it a “full-throated, unflinching repudiation of the 1973 decision which guaranteed federal constitutional protections of abortion rights and a subsequent 1992 decision – Planned Parenthood v. Casey – that largely maintained the right.”

    “Roe was egregiously wrong from the start,” wrote Justice Samuel Alito in the draft which was circulated inside the court before someone leaked it to the news outlet. “We hold that Roe and Casey must be overruled.”

    Politico highlighted these 10 passages from the draft opinion:

    • “We hold that Roe and Casey must be overruled. The Constitution makes no reference to abortion, and no such right is implicitly protected by any constitutional provision….”
    • “Roe was egregiously wrong from the start. Its reasoning was exceptionally weak, and the decision has had damaging consequences. And far from bringing about a national settlement of the abortion issue, Roe and Casey have enflamed debate and deepened division. It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives.”
    • “In the years prior to [Roe v. Wade], about a third of the States had liberalized their laws, but Roe abruptly ended that political process. It imposed the same highly restrictive regime on the entire Nation, and it effectively struck down the abortion laws of every single State. … [I]t represented the ‘exercise of raw judicial power’… and it sparked a national controversy that has embittered our political culture for a half-century.”
    • “The inescapable conclusion is that a right to abortion is not deeply rooted in the Nation’s history and traditions. On the contrary, an unbroken tradition of prohibiting abortion on pain of criminal punishment persisted from the earliest days of the common law until 1973.”
    • “In some States, voters may believe that the abortion right should be more even more [sic] extensive than the right Casey and Roe recognized. Voters in other States may wish to impose tight restrictions based on their belief that abortion destroys an ‘unborn human being.’ … Our nation’s historical understanding of ordered liberty does not prevent the people’s elected representatives from deciding how abortion should be regulated.”
    • “We have long recognized, however, that stare decisis is ‘not an inexorable command,’ and it ‘is at its weakest when we interpret the Constitution.’ It has been said that it is sometimes more important that an issue ‘be settled than that it be settled right.’ But when it comes to the interpretation of the Constitution — the ‘great charter of our liberties,’ which was meant ‘to endure through a long lapse of ages,’ we place a high value on having the matter ‘settled right.’”
    • “On many other occasions, this Court has overruled important constitutional decisions. … Without these decisions, American constitutional law as we know it would be unrecognizable, and this would be a different country.”
    • ”Casey described itself as calling both sides of the national controversy to resolve their debate, but in doing so, Casey necessarily declared a winning side. … The Court short-circuited the democratic process by closing it to the large number of Americans who dissented in any respect from Roe. … Together, Roe and Casey represent an error that cannot be allowed to stand.”
    • “Roe certainly did not succeed in ending division on the issue of abortion. On the contrary, Roe ‘inflamed’ a national issue that has remained bitterly divisive for the past half-century….This Court’s inability to end debate on the issue should not have been surprising. This Court cannot bring about the permanent resolution of a rancorous national controversy simply by dictating a settlement and telling the people to move on. Whatever influence the Court may have on public attitudes must stem from the strength of our opinions, not an attempt to exercise ‘raw judicial power.’”
    • “We do not pretend to know how our political system or society will respond to today’s decision overruling Roe and Casey. And even if we could foresee what will happen, we would have no authority to let that knowledge influence our decision. We can only do our job, which is to interpret the law, apply longstanding principles of stare decisis, and decide this case accordingly. We therefore hold that the Constitution does not confer a right to abortion. Roe and Casey must be overruled, and the authority to regulate abortion must be returned to the people and their elected representatives.”

    The magnitude of this report is so serious that Politico included this editor’s note vouching for the authenticity of the draft decision.

    Via Ben Mullin

    The leak has completely wiped the headlines and Twitter is exploding with hot takes.

    Tyler Durden
    Mon, 05/02/2022 – 20:59

  • These Are The 10 Cities Seeing The Steepest Home-Price Declines
    These Are The 10 Cities Seeing The Steepest Home-Price Declines

    Double-digit monthly price growth for the US housing market could soon slow as skyrocketing mortgage rates trigger an affordability crisis that has caused fewer and fewer buyers to bid on homes in some metropolitan areas. 

    “What goes up must come down, right?” Realtor.com said in a new report, adding “price hikes have seemed unstoppable—until now.” 

    Realtor.com provided new data revealing the top ten metro areas that recorded the steepest price drops in March. Those cities include Toledo, Ohio; Rochester, New York; Detroit, Michigan; Pittsburg, Pennsylvania; and Springfield, Massachusetts. 

    Here’s a complete list of where home prices fell the most.

    1. Toledo, OH

    • Median listing price: $115,000

    • Median listing price change: -18.7%

    2. Rochester, NY

    • Median listing price: $149,900

    • Median listing price change: -17.0%

    3. Detroit, MI

    • Median listing price: $75,000

    • Median listing price change: -15.4%

    4. Pittsburgh, PA

    • Median listing price: $230,000

    • Median listing price change: -13.7%

    5. Springfield, MA

    • Median listing price: $239,900

    • Median listing price change: -5.8%

    6. Tulsa, OK

    • Median listing price: $220,000

    • Median listing price change: -5.0%

    7. Los Angeles

    • Median listing price: $985,000

    • Median listing price change: -5.0%

    8. Memphis, TN

    • Median listing price: $173,500

    • Median listing price change: -4.6%

    9. Chicago

    • Median listing price: $399,000

    • Median listing price change: -3.7%

    10. Richmond, VA

    • Median listing price: $310,000

    • Median listing price change: -3.4%

     As discussed in March, “Housing Affordability Is About To Crash The Most On Record“ and “Biggest Housing Affordability Shock In History Incoming,” the affordability crisis has already begun to cool and red-hot housing market. 

    Since the beginning of the year, 30 Year fixed mortgage rate has jumped a staggering 214 bps, the highest in over a decade, with Bankrate data showing mortgage rates are above 5.40%. 

    Higher rates and elevated prices have caused the housing affordability index to crash to record lows. 

    Since housing affordability tends to lead the trajectory of existing home sales by about half a year, we suspect the housing market will continue to cool through the second half of the year. 

    Tyler Durden
    Mon, 05/02/2022 – 20:40

  • 'Deep State' Was Working Against Trump On COVID-19 Response: Dr. Paul Alexander
    ‘Deep State’ Was Working Against Trump On COVID-19 Response: Dr. Paul Alexander

    Authored by Harry Lee and Roman Balmakov via The Epoch Times,

    According to Paul Alexander, when former President Donald Trump was trying to tackle COVID-19 in 2020, the “swamp” or the “deep state” was working against him, using flawed data to tarnish him, locking down society, and keeping schools closed.

    “Can you imagine the president of the United States fighting against the [teachers’] union, fighting against the [Centers for Disease Control and Prevention (CDC)], fighting against his own task force?” Alexander told EpochTV’s “Facts Matter” program in an interview that will air on May 3.

    “They’re working against him. So you need to be there to understand when he said ‘the swamp’ – and he talked about deep state – it is real. I dealt with them. It is the bureaucracy. The entrenched bureaucracy is real.”

    From late March till early September 2020, Alexander served as scientific adviser to Michael Caputo, then-assistant secretary for public affairs at the Department of Health and Human Services (HHS).

    Dr. Paul Alexander in an interview with EpochTV’s “Facts Matter” program. The interview is scheduled to premier on May 3rd, 2022. (Screenshot via The Epoch Times)

    During that time, Alexander was attacked by the media and some health agency officials for trying to “tweak” the COVID-19 death numbers in the CDC’s Morbidity and Mortality Weekly Report (MMWR).

    On Aug. 8, 2020, in an email to Caputo (pdf) and other officials, Alexander wrote:

    “CDC to me appears to be writing hit pieces on the administration and meant at this time to impact school re-openings and they then send it to the media knowing it is deceiving. I ask it be stopped now! … Nothing to go out unless I read and agree with the findings how they CDC, wrote it and I tweak it to ensure it is fair and balanced and ‘complete.’ And not misleading.”

    At the time, Alexander also pushed for herd immunity to handle the pandemic, insisting the only way to do so was to allow the non-high-risk groups to expose themselves to the virus.

    Former Trump campaign official Michael Caputo arrives at the Hart Senate Office building to be interviewed by Senate Intelligence Committee staffers, in Washington on May 1, 2018. (Mark Wilson/Getty Images)

    However, some media outlets depicted Alexander’s proposal as trying to get people infected intentionally. They also claimed that Caputo was promoting unfounded accusations and conspiracy theories in a Facebook video. Pressure from the media and some government officials later led to the departure of Caputo and Alexander.

    On Sept. 16, 2020, HHS announced that Caputo would take a 60-day medical leave of absence, and Alexander would leave the department.

    “New York Times wrote—now it’s part of the public discussion—that the CDC reporting to the public and the data is suboptimal. It’s incomplete. It’s not balanced. It’s missing information. So that is exactly what I was trying to say two years ago, that I was attacked for,” said Alexander.

    The New York Times on Feb. 20 reported that the CDC has been withholding critical COVID-19 data on boosters, hospitalizations, and other analyses. A CDC spokesperson told the outlet that one reason is the agency was afraid the data might be misinterpreted as the vaccines being ineffective.

    In March, the CDC quietly removed 72,277 deaths, including 416 among children, that were said to have been from COVID-19 from its data tracker web page.

    “The CDC removed 72,000 deaths. Why? I will say it this way, under the Trump administration, the CDC worked with the [National Institutes of Health (NIH)]  and the media to make the response terrible for him. Make it look, on a day-to-day basis, terrible, like bad. And they will do that with the numbers. They will report escalating infections, escalating cases, any which way they could,” said Alexander.

    “But now, in the present administration, they want to remove those deaths and those problematic metrics because it makes the present administration look bad. Fact is that more people have died from COVID under President [Joe] Biden than died under President Trump.”

    The CDC responded that the change was to make the data more accurate.

    “CDC constantly reviews our COVID-19 data to ensure its accuracy,” a CDC spokesperson told The Epoch Times via email last month, adding that “CDC’s algorithm was accidentally counting deaths that were not COVID-19-related.”

    Lockdown Based on Flawed Numbers

    In early April 2020, the United States reported more than 260,000 COVID-19 cases and about 6,200 deaths. On April 1, 2020, Trump said he would leave it up to state governments to decide whether to implement lockdowns. A day later, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told CNN that there should be a federal lockdown. “I don’t understand why that’s not happening,” he said.

    On March 20, 2020, California became the first state to order a lockdown. By the end of May 2020, 42 states and territories issued mandatory stay-at-home orders.

    Alexander said the lockdowns were based on flawed numbers, and no study showed they work.

    “They closed society on a test that had a 97 percent false positive,” said Alexander, referring to the PCR test that is still widely used to determine a positive COVID-19 infection.

    “And remember, at that point, we were having problems in terms of how deaths were classified, how COVID infections were classified, and whether we were really having such an extensive number of infections or cases or hospitalizations,” Alexander said.

    HHS has been criticized for changing the rules for writing death certificates so that deaths were primarily attributable to COVID-19. The agency has also been targeted for a high number of false-positive COVID-19 results from PCR tests that were authorized for emergency use.

    “We were having a problem at that point with the PCR test. The PCR tests [were] over-cycled, and we knew over 24 cycles,” said Alexander. “Once you cycle over 24, 25, you are picking up viral dust and viral junk, non-infectious, non-viable pathogens. So let me put it this way, the vast majority, maybe 90 percent of people in 2020 and 2021, who were designated as COVID-positive with PCR tests were false-positive.”

    A medical worker places a nasal swab into a test tube after performing a COVID-19 PCR test at East Boston Neighborhood Health Center in Boston, Mass., on Dec. 20, 2021. (Joseph Prezioso/AFPvia Getty Images)

    An Irish doctor first claimed that PCR tests have a false rate of 97 percent. Some fact-checkers deemed the claim as false.

    One fact-checker interviewed Harvard professor Michael Mina, an epidemiologist, who said the claim was not true and “a clear misunderstanding of the PCR primers.”

    However, Mina also told The New York Times in 2021 that “in Massachusetts, from 85 to 90 percent of people who tested positive in last July with a cycle threshold of 40 would have been deemed negative if the threshold were 30 cycles.”

    On July 21, 2021, the CDC announced it would withdraw the request for an emergency use authorization for the agency-developed PCR test after Dec. 31, saying the Food and Drug Administration (FDA) has authorized “hundreds” of other COVID-specific tests.

    “We’ve argued from the beginning, this was never an emergency that they made it out to be,” said Alexander. “We could have properly protected the vulnerable and let the rest of society live largely normal lives.”

    Earlier this month, a study showed that states with strict lockdowns and other restrictive measures, such as California, New York, and New Jersey, handled the pandemic poorly. Florida, which ditched COVID-19 restrictions early, performed among the best states.

    “Trump was working to open society and to open schools. And he had a daily battle with that task force that what you saw there—that was like a clown car show—that was real. Behind the scenes, Trump was fighting them, fighting Fauci, fighting [Dr. Deborah] Birx, and the union, and the CDC to open schools because we were getting reports of young children in America hanging themselves. Children across America committed suicide because of the school closures,” said Alexander.

    President Donald Trump and Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, listen to White House coronavirus response coordinator Dr. Deborah Birx speak in the Rose Garden at the White House in Washington on March 29, 2020. (Tasos Katopodis/Getty Images)

    In July 2020, Fauci warned parents to send kids back to school in the fall semester, saying a study showed kids over 9 years old could transmit the CCP (Chinese Communist Party) virus as well as adults. The authors of the study later issued a correction, saying they could not define what direction transmission was happening within their study.

    Birx, then-White House COVID-19 task force coordinator, told media in August 2020, “If you have high caseload and active community spread … we are asking people to distance learn at this moment, so we can get this epidemic under control.”

    According to Dr. Scott Atlas, former special adviser to Trump on the coronavirus pandemic, only the three most influential doctors on the task force—Birx, Fauci, and then-CDC Director Dr. Robert Redfield—could advise governors to implement lockdowns.

    (L-R) Director of the National Institute of Allergy and Infectious Diseases Anthony Fauci, Response coordinator for White House Coronavirus Task Force Deborah Birx, and CDC Director Robert R. Redfield attend the daily briefing on COVID-19 in the Brady Briefing Room at the White House in Washington on April 8, 2020. ( Mandel Ngan/AFP via Getty Images)

    “We could have handled this pandemic just by properly protecting the vulnerable and allowing everybody else to live a normal life, become exposed naturally and harmlessly among their own natural immunity,” said Alexander.

    “That’s how we do it for the last 100 years. But with COVID, we’ve done something different. We lock the healthy society down.”

    Alexander said he once had a discussion with some State Department officials talking about Trump.

    “They told me in no uncertain terms that: ‘Trump is only a visitor here. He doesn’t seem to understand we run things.’”

    “‘We the bureaucracy, we the deep state that you call the deep state pal, yes, we run things here. The president just visits here. He’ll be gone. We’ll be here,’” recalled Alexander.

    “That’s how they think. And that is the crux of the matter.”

    Tyler Durden
    Mon, 05/02/2022 – 20:20

  • US Informs Taiwan Of Howitzer Delivery Delay Due To "Crowded" Production Line
    US Informs Taiwan Of Howitzer Delivery Delay Due To “Crowded” Production Line

    Taiwan has confirmed that US weapons systems slated for delivery have been delayed. It’s being widely viewed as directly related to the ongoing war in Ukraine, where Washington has committed an unprecedented amount of resources. An official statement cited a “crowded” production line.

    “In response to media reports on the case of the M109A6 self-propelled guns arms sale, the Ministry of National Defense said today that the M109A6 arms purchase [by Taiwan] was crowded out in the production line. The US side informs us that this system will not be delivered to the Republic of China until 2026 at the earliest”, the ministry said in a statement posted to its website.

    Via Associated Press

    As a result Taipei is now said to be looking at ‘alternative’ weapons options. This as there’s been abundant commentary of late paralleling the Ukraine and Taiwan situations, despite Beijing’s insistence that they are not at all comparable, given China sees the democratic-run island as part of its ‘sovereign territory’. 

    As for the howitzers in question, last year the US had approved for possible sail up to 40 155mm M109A6 Medium Self-Propelled Howitzer artillery systems to Taiwan. The deal is said to be valued at up to $750 million. Previously Taiwanese media had cited a delivery timeframe of at least by 2023 – so the fact that its defense ministry is now saying 2026 – a full three years later, is a hugely significant gap.

    According to some regional observers, Taiwan may not have an extra three years to prepare for a feared Chinese invasion.

    Reuters writes of possible alternatives to fill the gap: “Taiwan is considering other precision and long-range alternative weapons systems including truck-based rocket launchers made by Lockheed Martin Corp called the High Mobility Artillery Rocket System, or HIMARS,” based on the defense ministry statement.

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    And further, “It did not say why the production line was snarled, but the United States has been ramping up its military support and supply of equipment for Ukraine following Russia’s invasion.”

    Over the weekend Taiwan’s foreign minister Joseph Wu said, “When there’s a war, we need friends and allies to support Taiwan, as in the case of Ukraine.”

    “The people here in Taiwan are ready and prepared to defend ourselves,” he added. “We are asking the United States and other governments to provide Taiwan with necessary defensive articles, so that we are able to defend ourselves.”

    Tyler Durden
    Mon, 05/02/2022 – 20:00

  • Wall Street Journal Claims "Shadow Crew" Of Billionaires Urged Elon Musk To Buy Twitter
    Wall Street Journal Claims “Shadow Crew” Of Billionaires Urged Elon Musk To Buy Twitter

    Authored by Andrew Moran via The Epoch Times,

    Elon Musk responded on May 1 to a report from The Wall Street Journal, based on anonymous sources, that stated the world’s richest man had been persuaded to buy Twitter by a “shadow crew.”

    Marc Andreessen, general partner of the venture capital firm Andreessen Horowitz, shared a screenshot of the story on Twitter, prompting a response from Musk.

    “My Shadow Crew is sickkk! Also, who are they again?” Musk wrote on Twitter.

    “Sell Shadow Crew merch to buy Twitter?” Musk later asked in the same thread.

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    Musk has been highly critical of Twitter’s content moderation policies for months. He has taken to the social media platform to lambast the company’s performance, from censorship claims to shadow bans. At the end of March 2022, Musk polled his followers:

    “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?”

    Most respondents replied, “No.”

    The Wall Street Journal report claimed that many people had nudged the Tesla Motors CEO to get involved in the struggling tech firm. The newspaper referred to this group as a “shadow crew” that included Twitter co-founder Jack Dorsey, billionaire investor Peter Thiel, entrepreneur David Sacks, and early Tesla investor and venture capitalist Steve Jurvetson. Musk’s brother, Kimbal Musk, also advocated for Musk to purchase a stake in the microblogging website, the report claims.

    Musk declined to be interviewed for the story, and The Wall Street Journal admitted early in its report that “it isn’t clear whether he took any of their advice to heart or merely followed his own gut,” referring to Musk and the alleged “shadow crew.”

    In March 2022, according to the article, Musk contacted Seth Dillon, the CEO of conservative satirical news outlet The Babylon Bee.

    Musk had inquired to determine if the publication had been suspended from Twitter following a tweet that referred to the U.S. assistant secretary for health, a transgender woman, as “Man of the Year.” Musk had reportedly quipped to Dillon that he might need to purchase Twitter.

    Elon Musk, founder and chief engineer of SpaceX, speaks at the 2020 Satellite Conference and Exhibition in Washington on March 9, 2020. (Win McNamee/Getty Images)

    Musk had ostensibly kept his decision close to the chest up until the day before his intentions were revealed.

    “Over dinner in a private dining room at a local restaurant, Mr. Musk didn’t show much interest in talking about Twitter, one attendee said. Instead, he asked those at the table to share their theories about the meaning of life,” The Wall Street Journal reported.

    “The next day, Mr. Musk disclosed that he was seeking to take over Twitter.”

    There is a discussion in the public town square of what Musk means by free speech.

    Musk restated his views on free speech in an April 26 tweet.

    “By ‘free speech’, [sic] I simply mean that which matches the law. I am against censorship that goes far beyond the law. If people want less free speech, they will ask government to pass laws to that effect. Therefore, going beyond the law is contrary to the will of the people,” Musk wrote.

    The Response to Free Speech on Twitter

    The reaction to Musk acquiring Twitter has been mixed, with both sides either cheering or jeering. In the aftermath of Musk’s Twitter takeover, the company identified fluctuations in follower counts that included mass deactivations, reactivations, and new account creations.

    On Capitol Hill, Republican lawmakers have congratulated Musk.

    Sen. Ted Cruz (R-Texas) labeled it as “the most important development for free speech in decades.”

    Sen. Josh Hawley (R-Mo.) requested that Musk urge the San Francisco-based company to probe into internal efforts to suspend users and downrank stories pertaining to Hunter Biden’s laptop.

    “The left doesn’t want you to speak. If you don’t agree with them, you’re not allowed to talk,” Rep. Jim Jordan (R-Ohio), told Fox News’ Sean Hannity. “That all changes today with Elon Musk owning Twitter.”

    Some Democrats are mulling over hearings on Musk’s plans for Twitter, citing the website’s role in public discourse.

    While there is no official announcement on any hearings, Sen. Maria Cantwell (D-Wash.), chair of the Senate Commerce Committee, revealed to BNN Bloomberg that “we’re thinking about it.”

    Sen. Ed Markey (D-Mass.), a member of the Commerce Committee, said a hearing with Musk was crucial.

    “It’s a technology which is central to democracy and our economy and it is important for the representatives of the American people to hear what the new owners intend on using that technology to accomplish,” he told BNN Bloomberg. “We have to understand the censorship or lack thereof, content moderation or not, that is going to be the policy for the new owner.”

    “In terms of what the values are that this company is going to be creating for the new Elon Musk Twitter world, I think that’s actually a necessary role for Congress to play,” Markey added.

    In response to a series of tweets about the ideological shift in U.S. politics, Musk acknowledged his support for former President Barack Obama.

    “I strongly supported Obama for President, but today’s Democratic Party has been hijacked by extremists,” he wrote.

    Musk has also complained about the far left and far right, urging “less hate and more love.”

    A plurality of Americans agrees that Musk’s Twitter takeover “will lead to greater free speech on the platform.”

    According to a new Ipsos poll (pdf), 39 percent of overall Twitter users believe Musk will improve the platform. Twenty-eight percent of nonusers say he will enhance the website.

    Among heavy users, 52 percent think Musk’s involvement will improve the quality of dialogue, while 29 percent believe it will get worse.

    Seventy-three percent of all survey participants support removing posts that are considered false information. But there is a divergence on deleting political posts: 47 percent support taking down tweets that champion political action, and 40 percent are against the practice.

    “Compared with our survey results in early April, views toward the role of social media platforms in removing certain types of content remain unchanged,” the polling firm wrote.

    Elon Musk’s agreement with Twitter has not been finalized and could take several months to close. Both sides could still abandon the deal, paying a $1 billion termination fee.

    Tyler Durden
    Mon, 05/02/2022 – 19:40

  • Russian TV Warns Britain Can Be 'Drowned In Radioactive Tsunami’ By Single Nuclear Sub Strike
    Russian TV Warns Britain Can Be ‘Drowned In Radioactive Tsunami’ By Single Nuclear Sub Strike

    A recent Russian state TV program has stirred outrage and made headlines across the United Kingdom after a television presenter featured a simulated demonstration of how the Russian navy’s nuclear submarines would take out the UK with ease.

    The segment aired late last week on public broadcaster “Channel One” and featured the chairman of the nationalist Rodina political party, Aleksey Zhuravlyov, who declared that “one Sarmat missile and the British Isles will be no more.” 

    Specifically under discussion was the UK’s military support to Ukraine. London was earliest out of the gate to publicize it’s repeat planeloads of weapons, including anti-tank systems and munitions, flown into Ukraine.

    That’s when the segment transitioned to news anchor Dmitry Kiselyov describing the following as a graphic of a submarine played behind him:

    “It approaches its target at a depth of 1km at a speed of 200km/h. There’s no way of stopping this underwater drone. The warhead on it has a yield of up to 100 megatons.”

    “The explosion of this thermonuclear torpedo by Britain’s coastline will cause a gigantic tsunami wave up to 500m high.”

    The clip from the segment, which is now being widely shared in the West…

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    He then said the UK could be turned into “a radioactive desert” in the most provocative moment of the program: 

    “Such a barrage alone also carries extreme doses of radiation. Having passed over the British Isles, it will turn what might be left of them into a radioactive desert.”

    The panel had started off by reacting to recent comments by UK’s Armed Forces Minister, who appeared to earlier give approval for Ukraine striking Russian soil utilizing UK-provided weapons if need be.

    https://platform.twitter.com/widgets.js

    British Defence Secretary Ben Wallace issued the remarks last Thursday while describing Ukraine’s right to defend itself.

    “Part of defending itself in this type of invasion is obviously where Ukraine will go after the supply lines of the Russian army because without fuel and food and ammunition, the Russian army grinds to a halt and can no longer continue its invasion,” he told BBC TV.

    But he did note the caveat that it remains unlikely. “They currently don’t have British weapons that could do that, so it’s unlikely that it is our weapons,” he said, and added: “We’re very unlikely to supply that to anyone simply because of the technology and also the scarcity we have of those capabilities. So it is very unlikely.”

    Tyler Durden
    Mon, 05/02/2022 – 19:33

  • Venture-Backed Sale Of 'Virtual Land' Raises Millions In Buying Frenzy
    Venture-Backed Sale Of ‘Virtual Land’ Raises Millions In Buying Frenzy

    There’s an old investing aphorism that goes something like this: “buy land, because God ain’t making any more of it”.

    And while that still holds for the real estate market here on Earth, in the metaverse, it’s a different story entirely. While the market for digital assets has been in rough shape lately (one only needs to glimpse the formerly high-flying market for NFTs to arrive at this conclusion), a weekend auction of “virtual land” sponsored by the creators of the Bored Ape Yacht Club – purveyors of one of the most widely hyped and most highly valued NFTs – raised about $320 million in crypto in what has been seen as the largest offering of its kind.

    In fact, demand was so intense that activity related to the event caused ripple effects across the entire Ethereum blockchain, disrupting activity and causing transaction fees to soar, Bloomberg reports.

    The ‘virtual land’ will feature in a new metaverse platform game called “Otherside” which is being developed by Yuge Labs, the creators of the BAYC.

    Holders of the ApeCoin token who verified their identities jockeyed to buy deeds for 55,000 parcels of virtual land in Otherside, the project’s planned metaverse game and the latest extension of the Bored Ape franchise. Anticipation that interest would be strong for the plots – Ethereum-based NFTs called Otherdeeds – had pushed up the price of ApeCoin last week ahead of the sale.

    Each plot cost about $6,000, and buyers paid in ApeCoin. For what it’s worth, the project has the implicit backing of major venture capital funds like the fund formerly known as Andreessen Horowitz.

    Each plot cost a buyer around $5,800 based on ApeCoin’s price of $19 as of Saturday, plus transaction costs, or “gas fees,” in Ether, which skyrocketed after the sale went live at 9 p.m. New York time as the land grab attracted heavy demand. Transaction costs just to mint Otherdeed NFTs after the launch reached $123 million, with each Otherdeed requiring about $6,000, or 2 Ether, in transaction fees to mint, according to data from Etherscan — or more than the price of the deed itself.

    Experts said that the sale led to one of the largest increases in gas fees in recent memory on the Ethereum blockchain.

    “Yuga Labs’ virtual land sale has triggered one of the highest spikes in transaction fees on Ethereum,” said Jason Wu, founder of decentralized lending protocol DeFiner. “I have seen other NFT launches causing high gas fees, but this is definitely one of the highest.”

    In addition to the virtual land sold on Saturday, another 45K plots have been allocated to holders of BAYC and MA NFTs as well.

    Besides the 55,000 Otherdeeds sold Saturday, another 45,000 were allocated to holders of Bored Ape Yacht Club and Mutant Ape NFTs, as well as Yuga Labs and other project developers, with another 100,000 of the tokens expected to be awarded later to certain Otherdeed holders, according to the Otherside website. While the 55,000 Otherdeed NFTs were sold out around midnight New York Time, the process for BAYC and MAYC holders to claim their free Otherdeeds was initially delayed to avoid sending gas fee even higher. That one-time claim eventually reopened for those NFT holders as gas fees settled.

    ApeCoin is striving to become widely used in a variety of so-called web3 apps, using digital coins and blockchains. The idea is for owners to be able to access a variety of events, services, merchandise and games. It’s also the governance token of ApeCoin DAO, whose board includes Reddit Co-founder Alexis Ohanian, FTX’s Amy Wu and Animoca’s Siu. Ahead of the Otherdeed sale Saturday evening, OpenSea said it would accept ApeCoin.

    For what its worth, the Otherside land sale is bucking a broader trend: for example, while many apps have sold virtual land for cryptocurrency before, most have seen only a small number of users and transactions. On Decentraland, for example, the number of transactions is down 35% in the last 30 days, according to data tracker DappRadar.

    Tyler Durden
    Mon, 05/02/2022 – 19:20

  • Mayorkas Says DHS Preparing For Surge In Immigrants After Title 42 Ends, Warns "Do Not Come"
    Mayorkas Says DHS Preparing For Surge In Immigrants After Title 42 Ends, Warns “Do Not Come”

    Authored by Katabella Roberts via The Epoch Times,

    Homeland Security Secretary Alejandro Mayorkas said on Sunday that his agency is preparing for a possible flood of immigrants attempting to enter the United States through its southern border when Title 42 border restrictions are lifted later this month.

    The Trump-era Title 42 policy allowed Border Patrol agents to turn illegal aliens back to Mexico immediately if they were deemed to pose a health threat amid the COVID-19 pandemic.

    However, the Biden administration announced in April that the emergency order would be terminated in May, citing an increase in tools used to combat the spread of the virus such as vaccinations.

    This has prompted fears among some lawmakers, border officers, local residents, and officials that law enforcement will now see a surge in illegal immigrants allowed to enter from the southern border in the coming months, at a time when the United States is already experiencing a border crisis.

    Mayorkas appeared on CNN’s “State of the Union” on Sunday where he warned immigrants not to attempt to enter via the southern border, while noting that his department is “prepared” for an influx in migrants.

    “Because our border is not open,” Mayorkas said.

    “What happens now is individuals are either expelled under the Title 42 authority or they are placed in immigration enforcement proceedings. And they are removed if they do not have a valid claim under our law to remain.”

    When asked what message he has for immigrants considering entering the U.S. illegally at the border, the secretary replied: “Do not come.”

    Mayorkas also stressed that DHS is prepared for a surge in immigrants at the border, citing a 20-page memorandum released last week which contains six “pillars” that officials are already putting into place ahead of the expected surge in migrants.

    “It is our responsibility to be prepared for different scenarios, and that is what we are doing, and we have incredibly talented and dedicated people,” the DHS secretary said.

    “That is why the plan we have prepared calls for a number of different actions, not just in the domestic arena but also with our partners in the south,” he added.

    However, Mayorkas acknowledged that if a record-breaking number of migrants are encountered on the U.S.-Mexico border daily—which DHS estimated could be 18,000 by the time the powers are terminated, up from 13,000 in early 2021—this would put a “strain on the system.”

    “There is no question that if we reach that number, that is going to be an extraordinary strain on our system, but we are preparing for it,” Mayorkas said.

    Mayorkas was previously asked by lawmakers on Wednesday during hearings on Capitol Hill in Washington if he believes it is time to end the controversial Title 42 restrictions.

    “Our responsibility in the Department of Homeland Security is to implement the Title 42 authority of the CDC at our border and to implement it effectively and judiciously according to the law,” he said. “We are mindful that there can be an increase in migratory flows encountered at our southern border should Title 42 come to an end, as the CDC has determined it needs to do by May 23. Our responsibility, therefore, is to prepare and plan for that eventuality.”

    Mayorkas’ latest remarks come after a federal judge on April 27 temporarily blocked the Biden administration from lifting Title 42, at the request of 21 states, including Arizona and Missouri.

    U.S. District Judge Robert Summerhays, a Trump appointee, said in a temporary restraining order that the plaintiffs “have established a substantial threat of immediate and irreparable injury resulting from the early implementation of Title 42, including unrecoverable costs on healthcare, law enforcement, detention, education, and other services for migrants, and further that the balance of harms and the public interest both favor issuance of a temporary restraining order.”

    The block remains in place for two weeks, unless it is further extended by the judge.

    Tyler Durden
    Mon, 05/02/2022 – 19:00

  • Kim Jong Un Warns Of 'Preemptive Nuclear Strike' If North Korea Threatened
    Kim Jong Un Warns Of ‘Preemptive Nuclear Strike’ If North Korea Threatened

    North Korean leader Kim Jong Un warned South Korea that he won’t hesitate to preemptively use nuclear weapons if threatened, according to the Associated Press.

    During a meeting to congratulate his top army officials for a massive military parade in Pyongyang last week, Kim expressed “firm will” to continue his nuclear program so that it could “preemptively and thoroughly contain and frustrate all dangerous attempts and threatening moves, including ever-escalating nuclear threats from hostile forces, if necessary,” North Korea’s Central News Agency said Saturday.

    KCNA said Kim called his military officials to praise their work during the April 25 parade, where the North showcased the biggest weapons in its nuclear arsenal, including intercontinental ballistic missiles that could potentially reach the U.S. homeland. The North also rolled out a variety of shorter-range solid-fuel missiles designed to be fired from land vehicles or submarines, which pose a growing threat to South Korea and Japan. -AP

    Kim also told thousands of troops and spectators gathered for the parade that he would continue developing nuclear weapons at the “fastest possible speed,” adding that his arsenal would “never be confined to the single mission of war deterrent” when the North faces external threats to its “fundamental interests.”

    Kim’s threats come as South Korea ushers in a new conservative government in May that could strike a harsher tone than outgoing liberal President Moon Jae-in.

    North Korea has conducted 13 weapons launches so far this year, including its first full-range test of an ICBM since former US President Donald Trump de-escalated tensions.

    Meanwhile, North Korea appears to be rebuilding tunnels surrounding a nuclear testing ground that was last active in 2017, which AP‘s anonymous experts suggest could mean that Kim will try to conduct new tests sometime between the South’s inauguration of President-elect Yoon Suk Yeol on May 10, and Yoon’s scheduled summit with US President Joe Biden on May 21, “to maximize its political effect.”

    According to US State Department deputy spokesperson Jalina Porter, “We urge the DPRK to refrain from further destabilizing activity and instead engage in serious and sustained dialogue.”

    Kim’s recent remarks followed a fiery statement released by his powerful sister earlier April in which she criticized South Korea’s defense minister for touting preemptive strike capabilities against the North. She said her country’s nuclear forces would annihilate the South’s conventional forces if provoked.

    Yoon, during his campaign, also talked about enhancing the South’s preemptive strike capabilities and missile defenses. He also vowed to strengthen South Korea’s defense in conjunction with its alliance with the United States. -AP

    Since 2019, North Korea has been expanding its arsenal of short-range solid-fuel missiles, which Kim’s regime has described as “tactical” – suggesting battlefield nukes that could be used during conventional warfare. 

    “Taken together with ambitions for tactical nuclear warheads, submarine-based launch capabilities, and more sophisticated ICBMs, Pyongyang is not simply looking to deter an attack. Its goals extend to outrunning South Korea in an arms race and coercing the United States to reduce sanctions enforcement and security cooperation with Seoul,” said Leif-Eric Easley, a professor of international studies at Seoul’s Ewha Womans University.

    Tyler Durden
    Mon, 05/02/2022 – 18:40

  • Sen. Scott: Left-Wing Groups Using Race, Lawsuits To Carry Out Election Fraud
    Sen. Scott: Left-Wing Groups Using Race, Lawsuits To Carry Out Election Fraud

    Authored by Jack Phillips via The Epoch Times (emphasis ours),

    One of the top Senate Republicans said that left-wing groups are using lawsuits and allegations of racism to push for measures that weaken the country’s election integrity.

    Voters cast their ballots at Keevan Elementary School in North St. Louis, Mo., on Aug. 4, 2020. (Michael B. Thomas/Getty Images)

    Sen. Rick Scott (R-Fla.) says that Democrats are currently using claims that voter ID laws are racist in a bid to strike them down, although many such laws are commonplace in countries across Europe and elsewhere.

    “You know what the left does? Well, you’re a racist. My gosh, if you do anything like that you’re a racist,” Scott told Just The News. “If you do you have to ask somebody for their ID, you’re a racist, or if you don’t allow us to do same-day registration where you won’t know who’s voting, you must be a racist.”

    Meanwhile, left-wing advocacy groups, reportedly coordinating with the Department of Justice, are trying to “make sure that you can commit fraud in this country,” Scott added. Such reports suggest those groups are seeking to dissolve or block voter ID laws, ballot harvesting laws, and limits on ballot boxes, he said.

    Sen. Rick Scott (R-Fla.) speaks during a news conference on Capitol Hill in Washington, on May 26, 2021. (Drew Angerer/Getty Images)

    “It’s not fair that you get to know who’s going to vote in an election. And we ought to be able to ballot harvest. And by the way, those ballot boxes, they shouldn’t be monitored,” Scott, the head of the National Republican Senatorial Committee (NRSC), told the outlet. “That’s what they want.”

    Scott said that NRSC and Republican National Committee are now defending numerous lawsuits against election integrity laws across the United States.

    “We’re defending lawsuits all over the country where these states have improved their election laws to make sure that your vote is never diluted,” he said.

    About a month ago, a judge in Florida ruled that the state’s new election law, SB 90, was unconstitutional, although state officials have appealed the order. That law was signed in May 2021 by the governor before it was challenged by several liberal advocacy groups, some of which accused the law of being racist.

    Chief U.S. District Judge Mark Walker of the U.S. District Court for the Northern District of Florida, an Obama appointee, said the law is discriminatory and claimed it violates the Constitution. He also issued a permanent injunction that prevented the enforcement of many of the provisions

    Florida Attorney General Ashley Moody last month appealed the ruling, while Gov. Ron DeSantis said he believes Walker’s ruling will be overturned.

    “I don’t think there is any question that it will be stayed and reversed, but this was way, way outside the bounds of what the current law is,” the governor said in April.

    Department of Justice officials didn’t respond by press time to a request by The Epoch Times for comment.

    Tyler Durden
    Mon, 05/02/2022 – 18:20

  • "Never Let A Crisis Go To Waste" – Biden Official Says Fertilizer Shortage Will Spark Green Farming Transition
    “Never Let A Crisis Go To Waste” – Biden Official Says Fertilizer Shortage Will Spark Green Farming Transition

    “Never let a crisis go to waste,” those were the words of the U.S. Agency for International Development (USAID) Chief Samantha Power on “This Week” Sunday. She explained the emerging global food crisis would transition farmers toward a green new world. 

    “We’re working with farmers to also increase their production so you actually have more supply brought on the market. 

    “Fertilizer shortages are real now because Russia’s a big exporter of fertilizer, and even though fertilizer is not sanctioned, less fertilizer is coming out of Russia.

    “As a result, we’re working with countries to think about natural solutions like manure and compost, and this may hasten transitions that would have been in the interest of farmers to make eventually, anyway. So, never let a crisis go to waste,” Power said. 

    Power noted global food prices are up 34% over the last year, which has promoted USAID to request emergency assistance from Congress to ease shortages in countries heavily reliant on grain from Russia and Ukraine. She said her agency works hard with farmers to transition their use of chemical fertilizers to “natural solutions.” 

    However, farmers worldwide are already reducing chemical fertilizer, which may threaten yields come harvest time. Lower yields may exacerbate the food crisis. 

    The U.N.’s World Food Programme (WFP) warned that a toxic combination of the conflict in Ukraine, economic disruptions due to COVID-19, and bad harvests, are driving food prices to record highs. 

    WFP pointed out millions of Middle Eastern and North African families struggle to buy even the most basic foods to keep hunger at bay. 

    “People’s resilience is at a breaking point. This crisis is creating shock waves in the food markets that touch every home in this region. No one is spared,” Corinne Fleischer, WFP Regional Director said. 

    President Biden recently said that food shortages are “gonna be real,” pledging that the U.S. and other countries will increase grain supplies to lessen the blow. 

    Power’s comment comes weeks after Rockefeller Foundation President Rajiv Shah told Bloomberg Television’s David Westin a “massive, immediate food crisis” is on the horizon. 

    The Rockefeller Foundation is aligned with the World Economic Forum, advocating for a ‘global reset‘ of the food supply chain. 

    Remember what Power’s said at the beginning: “Never let a crisis go to waste.” 

    Tyler Durden
    Mon, 05/02/2022 – 18:00

Digest powered by RSS Digest

May 02

Today’s News 2nd May 2022

  • The Countries Committing The Most Of Their GDP To Ukraine Aid
    The Countries Committing The Most Of Their GDP To Ukraine Aid

    While not directly intervening in the war in Ukraine so far, countries in Europe and the United States have been contributing to the defence of Ukraine via financial, humanitarian and military aid. In absolute terms, the largest supporter as of March 27 was the United States, with a total of €7.6 billion made up of €3.2 billion in humanitarian aid and €4.4 billion in military aid.

    But as Statista’s Martin Armstrong shows in the infographic below, using Kiel Institute for the World Economy data, when it comes to a country’s commitment in relative terms, no country came close to Estonia in the first four weeks of the war – its contribution of €0.22 billion in military aid equates to 0.8 percent of the country’s GDP.

    Infographic: The Countries Committing the Most of Their GDP to Ukraine Aid | Statista

    You will find more infographics at Statista

    The United States’ financial input up to this point was equivalent to 0.04 percent of its economic output.

    Worth noting is that the indirect aid sent by countries such as Germany, France and Italy via the EU is not taken into account for these individual assessments. The source states that EU institutions have contributed €1.4 billion and a further €2 billion is attributed to the European Investment Bank.

    Tyler Durden
    Mon, 05/02/2022 – 02:45

  • Decentralized And Neutral
    Decentralized And Neutral

    Authored by Hans-Hermann Hoppe via The Mises Institute,

    States, regardless of their constitution, are not economic enterprises. In contrast to the latter, states do not finance themselves by selling products and services to customers who voluntarily pay, but by compulsory levies: taxes collected through the threat and use of violence (and through the paper money they literally create out of thin air). Significantly, economists have therefore referred to governments—i.e., the holders of state power—as stationary bandits.

    Governments and everyone on their payroll live off the loot stolen from other people. They lead a parasitic existence at the expense of a subdued and “host” populace.

    A number of further insights emerge from this.

    Naturally, stationary bandits prefer larger loot to smaller loot. This means that states will always try to increase their tax revenue and further increase their spending by issuing more paper money. The larger the loot, the more favors they can do for themselves, their employees, and their supporters. But there are natural limits to this activity.

    On the one hand, the bandits have to be careful not to burden their “host,” whose work and performance make their parasitic existence possible, so much that the latter stops working. On the other hand, they have to fear that their “hosts”—and especially the most productive among them—will migrate from their dominion (territory) and settle elsewhere.

    Against this background, a number of historical tendencies and processes become understandable.

    • First of all, it becomes understandable why there is a tendency towards territorial expansion and political centralization: with this, states succeed in bringing more and more “hosts” under their control and making it more difficult for them to emigrate to foreign territories. This is expected to result in a larger amount of loot. And it becomes clear why the end point of this process, the establishment of a world state, would by no means be a blessing for all mankind, as is often claimed. Because one cannot emigrate from a world state, and in this respect there is no possibility of escaping state looting by emigration. It is therefore to be expected that with the establishment of a world state, the scope and extent of state exploitation—indicated, among other things, by the level of state income and expenditure, by monetary inflation, the number and volume of so-called public goods and persons employed in the “public service”—will continue to increase beyond any previously known level. And that is certainly not a blessing for the “host population” that has to fund this state superstructure!

    • Secondly, a central reason for the rise of the “West” to become the world’s leading economic, scientific, and cultural region becomes understandable. In contrast to China in particular, Europe was characterized by a high degree of political decentralization, with hundreds or even thousands of independent dominions from the early Middle Ages up until the recent past. Some historians have described this state of affairs as “orderly political anarchy.” And it is now common among economic historians to see in this quasi-anarchic state a key reason for the so-called European miracle. Because in an environment with a large variety of independent, small-scale territories in the immediate vicinity of each other, it is comparatively easy for the subjects to vote with their feet and escape the robberies of state rulers by emigration. To avert this danger and to keep local producers in line, these rulers are constantly under great pressure to moderate their exploitation. And this moderation, in turn, promotes economic entrepreneurship, scientific curiosity, and cultural creativity.

    • Finally, in the light of the above considerations, a well-founded historical classification and assessment of the European Union (EU) is possible.

    The EU is a prime example of the aforementioned tendency towards territorial expansion and political centralization, with the resulting consequences: an increase in exploitative state measures and a corresponding growth in the parasitic state superstructure (keyword: Brussels).

    More concretely: the EU and the European Central Bank (ECB) are the first step towards the establishment of a European superstate, which should eventually merge into a one-world government dominated by the USA and its central bank, the Federal Reserve. Contrary to euphonious political pronouncements, the EU and the ECB have never been about free international trade and competition. You don’t need thousands and thousands of pages of paper for this, full of ordinances and regulations! Rather, it was always and above all a matter of harmonization of the tax, legal, and regulatory provisions of all member states in order to reduce or eliminate all economic location competition in this way. Because if the tax rates and state regulations are the same everywhere or are increasingly being aligned, then there are fewer and fewer economic reasons for productive people to relocate their activities to another location, and the stationary bandits can be all the more undisturbed and therefore continue in their activity of taking and distributing booty.

    In addition, the current EU, as a cartel of various governments, only holds together as long as the wealthier bandits, who can draw on a more productive “host population,” above all the German governments, are willing and able to support their needier counterparts in the south and east, with their less productive “hosts,” on a permanent and large scale. And all at the expense of local producers!

    In sum, the EU and the ECB are moral and economic monstrosities. You cannot consistently penalize productivity and economic success while rewarding parasitism, waste, and economic failure without causing disaster. The EU will tumble from one economic crisis to the next and eventually disintegrate.

    In view of this, it seems urgent to gain a clear idea of ​​possible alternatives to the current course of increasing political centralization. And the memory of the aforementioned “European miracle” should point the way to proceed. Radical decentralization is required for Europe to thrive. Instead of the EU and the ECB, what is needed is a Europe made up of thousands of Liechtensteins and Swiss cantons, linked by free trade and an international gold standard and competing to keep and attract productive people with attractive locational conditions.

    However, in order to make this situation not only conceivable, but feasible, it is necessary that states and politicians are no longer regarded as what they claim to be, but as what they actually are: stationary bandits, gangsters and crooks. Until recently, this insight was unthinkable for the overwhelming majority of the population. But the coronavirus regime over the last two years, with its arbitrary and absurd bans on going out, contact, and assembly, and its constantly changing test, certificate, and vaccination regulations, including compulsory vaccinations, has meanwhile caused a great many politicians to be regarded as heavily armed and unscrupulous violent criminals.

    *  *  *

    PS: Do the current military events in Ukraine require a revision or correction of the above analyses? 

    On the contrary.

    First of all, it is not the Russians, the Ukrainians, the Germans, or the Americans who cause wars, but the bandit gangs that rule Russia, Ukraine, Germany, and America and who can pass on the costs of a war to the civilian population in question.

    Then, small states or bandit gangs only wage small wars against small opponents. Large states, on the other hand, which emerged from successful earlier small wars, are generally more warlike and wage not only small but also larger wars against large opponents. And the largest and most powerful of all states, the USA, and its vassal states assembled in NATO (the North Atlantic Treaty Organization), is the most keen on war and expansion. That alone is a reason for small states and decentralization.

    Finally, when a smaller state is faced with the expansionist drive and threat of a larger one, it basically has two options: It can submit. Or it can try to maintain its independence. And in order to achieve this goal and avoid war or minimize the risk of war, there is only one promising recipe: neutrality. One does not interfere in the internal affairs of the great power, and one does not threaten or provoke it. Even a great power cannot simply invade another country. For this always requires justification to its own population, which has to bear the burden of a war. And the smaller a state, the more difficult it is to portray its behavior as a threat or a provocation. (Who feels threatened by Liechtenstein?!) And this imperative of neutrality applies all the more when, as in the case of Ukraine, you are faced with two major powers with rival claims at the same time and taking the side of one means an additional threat for the other. The current war is the result of multiple violations of this rule by the government of Ukraine. If the government that came to power in a US-orchestrated coup in 2014 had expressly refrained from joining NATO and the EU, like Switzerland did, and the two then breakaway Russian-speaking provinces in the east of the country would have been let go instead of bullied and terrorized, the potential threat to Russia would have been reduced and the present catastrophe would almost certainly not have occurred. Under sustained US pressure, combined with their own audacity, the Ukrainian ruling clique did nothing of the sort and continued to demand NATO membership. This would have extended the US military presence right up to the borders of greater Russia, which had been declared an enemy state. Therefore, no one could doubt that the behavior of the Ukrainian government would be perceived by the Russian side as a tremendous provocation and a serious threat. The actual result of this provocation, which is now available, was not foreseeable, but it was quite foreseeable that one’s own behavior would also make a Russian reaction like the one that actually took place more likely. In the war in Ukraine, as so often in history, Putin does not have just one father, but several. The completely one-sided anti-Russia hysteria and agitation that is currently widespread in the West is therefore not only factually incorrect, but is primarily intended to distract from the West’s own role in the current drama. And it is meant to make us forget that the United States and its NATO vassals have been responsible for far more war casualties and war damage over the past thirty years than Russia has since the collapse of the Soviet Union and currently in Ukraine.

    Tyler Durden
    Mon, 05/02/2022 – 02:00

  • Gordon Chang: What To Do About China
    Gordon Chang: What To Do About China

    Authored by Gordon Chang via The Gatestone Institute,

    • Since about 2018, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory, part of the People’s Republic of China. This means that China considers those heavenly bodies to be like the South China Sea. This also means that China will exclude other nations from going to the moon and Mars if they have the capability to do so. We do not have to speculate about that: Chinese officials say this is what they are going to do.

    • [W]hen Biden says, “Oh, the Chinese just want to compete with us,” he is wrong. They do not want to “compete” within the international system. They do not even want to change that system… They want to overthrow it altogether, period.

    • Is Xi Jinping really that bold… to start another war? … First, China considers the United States to be its enemy. Second the United States is no longer deterring China. China feels it has a big green light to do whatever it wants.

    • We Americans don’t pay attention to propaganda… After all, these are just words. At this particular time, these words… [suggest] to me that China is laying the justification for a strike on the United States. We keep ignoring what Beijing is saying. We kept ignoring what Osama bin Laden was saying.

    • We have to remember that the Chinese regime, unlike the Japanese, always warn its adversaries about what it is going to do

    • The second reason war is coming is that America’s deterrence of China is breaking down.

    • Di’s message was that with cash, China can do anything it wants, and that all Americans would take cash. He mentioned two words in this regard: Hunter Biden.

    • In February, [Biden] had a two‑hour phone call with Xi Jinping. By Biden’s own admission, he didn’t raise the issue of the origins of COVID‑19 even once. If you are Xi Jinping, after you put down the receiver, your first thought is, “I just got away with killing hundreds of thousands of Americans.”

    • We have news that China is building something like 345 missile silos in three locations: in Gansu, Xinjiang, and in Inner Mongolia. These silos are clearly built to accommodate the DF‑41. The DF‑41 has a range of about 9,300 miles, which means that it can reach any part of the United States. The DF‑41 carries 10 warheads. This means that China could, in about two years…, have a bigger arsenal than ours. …we have to assume the worst because Chinese leaders and Chinese generals, on occasion, unprovoked, have made threats to nuke American cities.

    • In July, 2021 China tested a hypersonic glide warhead, which circled the world. This signals China intends to violate the Outer Space Treaty, to which China is a party.

    • As of today, more than eight million people have died outside China. What happened? No one imposed costs on China.

    • For at least a half‑decade, maybe a little bit longer, Chinese military researchers have been openly writing about a new type of biological warfare….They talk about a new type of biological warfare of “specific ethnic genetic attacks.” In other words, pathogens that will leave the Chinese immune but sicken and kill everybody else, which means that the next disease from China can be a civilization killer.

    • A lot of military analysts talk about how the first seconds of a war with China are going to be fought in outer space. They are going to blind our satellites, take them down, do all sorts of stuff. Those statements are wrong. The first day of war against the United States occurs about six months earlier, when they release pathogens in the United States. Then we are going to have that day in space. The war starts here, with a pathogen ‑‑ a virus, a microbe, a bug of some kind. That is where it begins.

    • The One‑China policy is something many people misunderstand. Probably because Beijing uses propaganda to try to fuzzy up the issue…. China has a One‑China principle: that Taiwan is part of the People’s Republic of China, full stop. We have a One‑China policy…, that the status of Taiwan is unresolved…. that the resolution of the status of Taiwan must be with the consent of people on both sides of the Strait.

    • We need a policy of “strategic clarity,” where we tell China that we will defend Taiwan. We also say we will extend a mutual defense treaty to Taiwan if it wants it, and we will put American troops on the island as a tripwire.

    • We are Americans. We naturally assume that there are solutions, and good solutions, to every problem. After three decades of truly misguided China policy, there are no … solutions that are “undangerous.” …The current trend of policy is unsustainable. There will be no American republic if we continue to do what we are currently doing and if we continue to allow China to do what it does. I do not think that enforcing a trade deal will start World War III.

    • China has not met its obligations. As of a few months ago, China had met about 62% of its commitments….. We should be increasing the tariffs that President Trump imposed under Section 301 of the Trade Act of 1974. Remember, those tariffs are meant to be a remedy for the theft of US intellectual property. China has continued to steal US IP. As matter of fact, it has gotten worse…

    • I do not think that we should be trying to foster integration of Wall Street into China’s markets…. Do not take it from me, just look at their failure to comply with very simple, easy‑to‑comply-with requirements. It was a mistake.

    • The best response would be if we hit them with everything at once because China right now is weak. If we were going to pick the number one thing to do, I would think trade.

    • China now has a debt crisis, so they are not going to invest their way out of this crisis, which means the only way they can save their economy is net exports. We should stop buying their stuff.

    • China has bought the political establishment in the Solomon Islands, except for one brave man named David Suidani. Recently, somebody got the bright idea of publishing all of the specific payments that Beijing has made to Solomon Islands politicians…. We should be doing this with payments to American politicians, we should be doing this across the board.

    • What bothers me is that, although their assumptions about China have demonstrably been proven wrong, American policymakers still continue with the same policies. There is, in some people’s mind, an unbreakable view that we have to cooperate with China…. This is what people learn in international relations school when they go to Georgetown, and they become totally stupid.

    • Clearly, Nike and Apple and other companies are now, at this very moment, trying to prevent Congress from enacting toughened rules on the importation of forced‑labor products into our country.

    • Moreover, the Chinese regime is even more casualty‑averse than we are. Even if Beijing thinks it can take Taiwan by force, it is probably not going to invade because it knows an invasion would be unpopular with most people in China. It is not going to risk hundreds of thousands of casualties that would result from an invasion.

    • Unfortunately…, we taught the Chinese that they can without cost engage in these dangerous maneuvers of intercepting our planes and our ships. That is the problem: because as we have taught the Chinese to be more aggressive, they have been.

    • [W]e should have made it clear to the Chinese leadership that they cannot kill Americans without cost. Hundreds of thousands Americans have been killed by a disease that China deliberately spread. From October 2020 to October 2021, more than 105,000 Americans died from fentanyl — which China has purposefully, as a matter of state and Communist Party policy — sold to Americans… we have to change course.

    • I would close China’s four remaining consulates. I would also strip the Chinese embassy down to the ambassador and his personal staff. The thousands who are in Washington, DC, they would be out.

    • I would also raise tariffs to 3,600%, or whatever. This is a good time to do it. We have supply chain disruptions. We are not getting products from China anyway. We can actually start to do this sort of stuff.

    • I would… just hammer those guys all the time verbally. People may think, “Those are just words.” For communists, words are really important, because they are an insecure regime where propaganda is absolutely critical.

    • I would be going after the Communists on human rights, I would be going after them on occupying the South China Sea, on Taiwan, unrelentingly — because I would want to show the world that the United States is no longer afraid of China…. State Department people, they are frightened. We need to say to the Chinese regime, like Dulles, “I’m not afraid of you. I’m going after you, and I’m going to win.”

    Is Xi Jinping really that bold… to start another war?…

    • First, China considers the United States to be its enemy.

    • Second the United States is no longer deterring China.

    China feels it has a big green light to do whatever it wants.

    All the conditions for history’s next great war are in place. Jim Holmes, the Wiley Professor at the Naval War College, actually talks about this period as being 1937.

    1937 was the year in which if you were in Europe or America, you could sense the trouble. If you were in Asia in 1937, you would be even more worried, because that year saw Japan’s second invasion of China that decade.

    No matter where you lived, however, you could not be sure that the worst would happen, that great armies and navies around the world would clash. There was still hope that the situation could be managed. As we now know, the worst did happen. In fact, what happened was worse than what anyone thought at the time.

    We are now, thanks to China, back to 1937.

    We will begin our discussion in Afghanistan. Beijing has had long‑standing relations with the Afghan Taliban, going back before 9/11, and continuing through that event.

    After the US drove the Taliban from power and while it was conducting an insurgency, China was selling the group arms, including anti‑aircraft missiles, that were used to kill American and NATO forces.

    China’s support for killing Americans has continued to today. In December 2020, Indian Intelligence was instrumental, in Afghanistan, in breaking up a ring of Chinese spies and members of the Haqqani Network. The Trump administration believed that the Chinese portion of that ring was actually paying cash for killing Americans.

    What can happen next? We should not be surprised if China gives the Taliban an atomic weapon to be used against an American city. Would they be that vicious?

    We have to remember that China purposefully, over the course of decades, proliferated its nuclear weapons technology to Pakistan and then helped Pakistan sell that Chinese technology around the world to regimes such as Iran’s and North Korea’s.

    Today, China supports the Taliban. We know this because China has kept open its embassy in Kabul. China is also running interference for the Taliban in the United Nations Security Council. It is urging countries to support that insurgent group with aid. It looks as if the Taliban’s main financial backers these days are the Chinese.

    Beijing is hoping to cash in on its relationship in Central Asia. Unfortunately, there is a man named Biden, who is helping them.

    In early August, Biden issued an executive order setting a goal that by 2030, half of all American vehicles should be electric‑powered. To be electric‑powered, we need rare earth minerals, we need lithium. As many people have said, Afghanistan is the Saudi Arabia of rare earths and lithium.

    If Beijing can mine this, it makes the United States even more dependent on China. It certainly helps the Taliban immeasurably.

    Unfortunately, Beijing has more than just Afghanistan in mind. The Chinese want to take away our sovereignty, and that of other nations, and rule the world. They actually even want to rule the near parts of the solar system. Yes, that does sound far‑fetched, but, no, I’m not exaggerating. Chinese President Xi Jinping would like to end the current international system.

    On July 1, in a landmark speech, in connection with the centennial of China’s ruling organization, he said this: “The Communist Party of China and the Chinese people, with their bravery and tenacity, solemnly proclaim to the world that the Chinese people are not only good at taking down the old world, but also good in building a new one.”

    By that, China’s leader means ending the international system, the Westphalian international system. It means he wants to impose China’s imperial‑era notions of governance, where Chinese emperors believed they not only had the Mandate of Heaven over tianxia, or all under Heaven, but that Heaven actually compelled the Chinese to rule the entire world.

    Xi Jinping has been using tianxia themes for decades, and so have his subordinates, including Foreign Minister Wang Yi, who in September 2017 wrote an article in Study Times, the Central Party School’s influential newspaper.

    In that article, Wang Yi wrote that Xi Jinping’s thought on diplomacy ‑‑ a “thought” in Communist Party lingo is an important body of ideological work ‑‑ Wang Yi wrote that Xi Jinping’s thought on diplomacy made innovations on and transcended the traditional theories of Western international relations of the past 300 years.

    Take 2017, subtract 300 years, and you almost get to 1648, which means that Wang Yi, with his time reference, was pointing to the Treaty of Westphalia of 1648, which established the current system of sovereign states.

    When Wang Yi writes that Xi Jinping wants to transcend that system, he is really telling us that China’s leader does not want sovereign states, or at least no more of them than China. This means that when Biden says, “Oh, the Chinese just want to compete with us,” he is wrong. They do not want to “compete” within the international system. They do not even want to change that system so it is more to their liking. They want to overthrow it altogether, period.

    China is also revolutionary with regard to the solar system. Since about 2018, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory. In other words, as part of the People’s Republic of China. This means that China considers those heavenly bodies to be like the South China Sea: theirs and theirs alone.

    This also means that China will exclude other nations from going to the moon and Mars if they have the capability to do so. We do not have to speculate about that: Chinese officials say this is what they are going to do.

    Let us return to April 2021. Beijing announced the name of its Mars rover. “We are naming the Mars rover Zhurong,” the Chinese said, “because Zhurong was the god of fire in Chinese mythology, ” How nice. Yes, Zhurong is the god of fire. What Beijing did not tell us is that Zhurong is also the god of war—and the god of the South China Sea.

    Is Xi Jinping really that bold or that desperate to start another war? Two points. First, China considers the United States to be its enemy. The second point is that the United States is no longer deterring China. China feels it has a big green light to do whatever it wants.

    On the first point, about our enemy status, we have to go back to May 2019. People’s Daily, the most authoritative publication in China, actually carried a piece that declared a “people’s war” on the US. This was not just some isolated thought.

    On August 29th 2021, People’s Daily came out with a landmark piece that accused the United States of committing “barbaric” acts against China. Again, this was during a month of hostile propaganda blasts from China.

    On the August 29th, Global Times, which is controlled by People’s Daily, came right out and also said that the United States was an enemy or like an enemy.

    We Americans don’t pay attention to propaganda. The question is, should we be concerned about what China is saying? After all, these are just words.

    At this particular time, these words are significant. The strident anti‑Americanism suggests to me that China is laying the justification for a strike on the United States. We keep ignoring what Beijing is saying. We kept ignoring what Osama bin Laden was saying.

    We have to remember that the Chinese regime, unlike the Japanese, always warn its adversaries about what it is going to do. Jim Lilley, our great ambassador to Beijing during the Tiananmen Massacre, actually said that China always telegraphs its punches. At this moment, China is telegraphing a punch.

    That hostility, unfortunately, is not something we can do very much about. The Chinese Communist regime inherently idealizes struggle, and it demands that others show subservience to it.

    The second reason war is coming is that America’s deterrence of China is breaking down. That is evident from what the Chinese are saying.

    In March of 2021, China sent its top two diplomats, Yang Jiechi and Wang Yi, to Anchorage to meet our top officials, Secretary of State Antony Blinken and National Security Advisor Jake Sullivan. Yang, in chilling words, said the US could no longer talk to China “from a position of strength.”

    We saw the same theme during the fall of Kabul. China then was saying, “Look, those Americans, they can’t deal with the insurgent Taliban. How can they hope to counter us magnificent Chinese?” Global Times actually came out with a piece referring to Americans: “They can’t win wars anymore.”

    We also saw propaganda at that same time directed at Taiwan. Global Times was saying, again, in an editorial, an important signal of official Chinese thinking, “When we decide to invade, Taiwan will fall within hours and the US will not come to help.”

    It is probably no coincidence that this propaganda came at the time of incursions into Taiwan’s air-defense identification zone.

    We need to be concerned with more than just the intensity and with the frequency of these flights, however. We have to be concerned that China was sending H‑6K bombers; they are nuclear‑capable.

    Something is wrong. Global Times recently came out with an editorial with the title, “Time to warn Taiwan secessionists and their fomenters: war is real.”

    Beijing is at this moment saying things heard before history’s great conflicts. The Chinese regime right now seems to be feeling incredibly arrogant. We heard this on November 28th in 2020, when Di Dongsheng, an academic in Beijing, gave a lecture live-streamed to China.

    Di showed the arrogance of the Chinese elite. More importantly, he was showing that the Chinese elite no longer wanted to hide how they felt. Di, for instance, openly stated that China could determine outcomes at the highest levels of the American political system.

    Di’s message was that with cash, China can do anything it wants, and that all Americans would take cash. He mentioned two words in this regard: Hunter Biden.

    Unfortunately, President Joe Biden is reinforcing this notion. China, for instance, has so far killed nearly one million Americans with a disease that it deliberately spread beyond its borders. Yet, what happened? Nothing.

    We know that China was able to spread this disease with its close relationship with the World Health Organization. President Trump, in July of 2020, took us out of the WHO. What did Biden do? In his first hours in office, on January 20th, 2021, he put us back into the WHO.

    In February, he had a two‑hour phone call with Xi Jinping. By Biden’s own admission, he didn’t raise the issue of the origins of COVID‑19 even once. If you are Xi Jinping, after you put down the receiver, your first thought is, “I just got away with killing hundreds of thousands of Americans.”

    Then there’s somebody named John Kerry. Our republic is not safe when John Kerry carries a diplomatic passport, as he now does. He is willing to make almost any deal to get China to sign an enhanced climate arrangement.

    Kerry gave a revealing interview to David Westin of Bloomberg on September 22, 2021. Westin asked him, “What is the process by which one trades off climate against human rights?” Climate against human rights?

    Kerry came back and said, “Well, life is always full of tough choices in the relationship between nations.” Tough choices? We Americans need to ask, “What is Kerry willing to give up to get his climate deal?”

    Democracies tend to deal with each other in the way that Kerry says. If we are nice to a democracy, that will lead to warm relations; warm relations will lead to deals, long‑standing ties. Kerry thinks that the Chinese communists think that way. Unfortunately, they do not.

    We know this because Kerry’s successor as Secretary of State, Hillary Clinton, in February 2009, said in public, “I’m not going to press the Chinese on human rights because I’ve got bigger fish to fry.” She then went to Beijing a day after saying that and got no cooperation from the Chinese.

    Even worse, just weeks after that, China felt so bold that it attacked an unarmed US Navy reconnaissance vessel in the South China Sea. The attack was so serious that it constituted an act of war. The Chinese simply do not think the way that Kerry believes they do.

    All of this, when you put it together, means that the risk of war is much higher than we tend to think. Conflict with today’s aggressor is going to be more destructive than it was in the 1930s. We have news that China is building something like 345 missile silos in three locations: in Gansu, Xinjiang, and in Inner Mongolia.

    These silos are clearly built to accommodate the DF‑41. The DF‑41 has a range of about 9,300 miles, which means that it can reach any part of the United States. The DF‑41 carries 10 warheads. This means that China could, in about two years, as some experts think, have a bigger arsenal than ours.

    China has built decoy silos before. We are not sure they are going to put all 345 missiles into these facilities, but we have to assume the worst because Chinese leaders and Chinese generals, on occasion, unprovoked, have made threats to nuke American cities.

    This, of course, calls into question their official no‑first‑use policy, and also a lot of other things. China will not talk to us about arms control. We have to be concerned that China and Russia, which already are coordinating their military activities, would gang up against us with their arsenals.

    In July, 2021 China tested a hypersonic glide warhead, which circled the world. This signals China intends to violate the Outer Space Treaty, to which China is a party. It also shows that in hypersonic technology, which was developed by Americans, China is now at least a decade ahead of us in fielding a weapon.

    Why is China doing all this now? The country is coming apart at the seams. There is, for instance, a debt crisis. Evergrande and other property developers have started to default. It is more than just a crisis of companies. China is basically now having its 2008.

    Even more important than that, they have an economy that is stumbling and a food crisis that is worsening year to year. They know their environment is exhausted. Of course, they also are suffering from a continuing COVID‑19 epidemic.

    To make matters worse, all of this is occurring while China is on the edge of the steepest demographic decline in history in the absence of war or disease.

    Two Chinese demographers recently stated that China’s population will probably halve in 45 years. If you run out those projections, it means that by the end of the century, China will be about a third of its current size, basically about the same number of people as the United States.

    These developments are roiling the political system. Xi Jinping is being blamed for these debacles. We know he has a low threshold of risk. Xi now has all the incentive in the world to deflect popular and regime discontent by lashing out.

    In 1966, Mao Zedong, the founder of the People’s Republic, was sidelined in Beijing. What did he do? He started the Cultural Revolution. He tried to use the Chinese people against his political enemies. That created a decade of chaos.

    Xi Jinping is trying to do the same thing with his “common prosperity” program. The difference is that Mao did not have the means to plunge the world into war. Xi, with his shiny new military, clearly does have that ability.

    So here is a 1930s scenario to consider. The next time China starts a conflict, whether accidentally or on purpose, we could see that China’s friends — Russia, North Korea, Iran, Pakistan — either in coordination with China or just taking advantage of the situation, move against their enemies.

    That would be Ukraine in the case of Russia, South Korea in the case of North Korea, Israel in the case of Iran, India in the case of Pakistan, and Morocco in the case of Algeria. We could see crises at both ends of the European landmass and in Africa at the same time.

    This is how world wars start.

    *  *  *

    Question: Why do you believe China attacked the world with coronavirus?

    Chang: I believe that SARS‑CoV‑2, the pathogen that causes COVID‑19, is not natural. There are, for example, unnatural arrangements of amino acids, like the double‑CGG sequence, that do not occur in nature.

    We do not have a hundred percent assurance on where this pathogen came from. We do, however, have a hundred percent assurance on something else: that for about five weeks, maybe even five months, Chinese leaders knew that this disease was highly transmissible, from one human to the next, but they told the world that it was not.

    At the same time as they were locking down their own country ‑‑ Xi Jinping by locking down was indicating that he thought this was an effective way of stopping the disease — he was pressuring other countries not to impose travel restrictions and quarantines on arrivals from China. It was those arrivals from China that turned what should have been an epidemic confined to the central part of China, into a global pandemic. As of today, more than eight million people have died outside China. What happened? No one imposed costs on China.

    For at least a half‑decade, maybe a little bit longer, Chinese military researchers have been openly writing about a new type of biological warfare. This was, for instance, in the 2017 edition of “The Science of Military Strategy,” the authoritative publication of China’s National Defense University.

    They talk about a new type of biological warfare of “specific ethnic genetic attacks.” In other words, pathogens that will leave the Chinese immune but sicken and kill everybody else, which means that the next disease from China can be a civilization killer.

    Remember, Xi Jinping must be thinking, “I just got away with killing eight million people. Why wouldn’t I unleash a biological attack on the United States? Look what the virus has done not only to kill Americans but also to divide American society.”

    A lot of military analysts talk about how the first seconds of a war with China are going to be fought in outer space. They are going to blind our satellites, take them down, do all sorts of stuff. Those statements are wrong.

    The first day of war against the United States occurs about six months earlier, when they release pathogens in the United States. Then we are going to have that day in space. The war starts here, with a pathogen ‑‑ a virus, a microbe, a bug of some kind. That is where it begins.

    Question: You mentioned 1939. Taiwan is the Poland of today. We get mixed signals: Biden invites the Taiwanese foreign minister to his inauguration, but then we hear Ned Price, his State Department spokesman, say that America will always respect the One‑China policy. Meaning, we’re sidelining defending Taiwan?

    Chang: The One‑China policy is something many people misunderstand. Probably because Beijing uses propaganda to try to fuzzy up the issue. China has a One‑China principle: that Taiwan is part of the People’s Republic of China, full stop.

    We have a One‑China policy, which is different. We recognize Beijing as the legitimate government of China. We also say that the status of Taiwan is unresolved. Then, the third part of our One‑China policy is that the resolution of the status of Taiwan must be with the consent of people on both sides of the Strait. In other words, that is code for peace, a peaceful resolution.

    Our policies are defined by the One‑China policy, the Three Communiques, Reagan’s Six Assurances, and the Taiwan Relations Act.

    Our policy is difficult for someone named Joe Biden to articulate, because he came back from a campaign trip to Michigan, and he was asked by a reporter about Taiwan, and Biden said, “Don’t worry about this. We got it covered. I had a phone call with Xi Jinping and he agreed to abide by the Taiwan agreement.”

    In official US discourse, there is no such thing as a “Taiwan agreement.” Some reporter then asked Ned Price what did Biden mean by the Taiwan agreement. Ned Price said, “The Taiwan agreement means the Three Communiques the Six Assurances, the Taiwan Relations Act, and the One‑China policy.”

    Ned Price could not have been telling the truth because Xi Jinping did not agree to America’s position on Taiwan. That is clear. There is complete fuzziness or outright lying in the Biden administration about this.

    Biden’s policies on Taiwan are not horrible, but they are also not appropriate for this time. decades, we have had this policy of “strategic ambiguity,” where we do not tell either side what we would do in the face of imminent conflict. That worked in a benign period. We are no longer in a benign period. We are in one of the most dangerous periods in history.

    We need a policy of “strategic clarity,” where we tell China that we will defend Taiwan. We also say we will extend a mutual defense treaty to Taiwan if it wants it, and we will put American troops on the island as a tripwire.

    Question: You think he is not saying that because he has no intention of actually doing it, so in a way, he is telling the truth?

    Chang: The mind of Biden is difficult to understand. We do not know what the administration would do. We have never known, after Allen Dulles, what any administration would do, with regard to Taiwan. We knew what Dulles would have done. We have got to be really concerned because there are voices in the administration that would give Taiwan, and give other parts of the world, to China. It would probably start with John Kerry; that is only a guess.

    Question: You mentioned earlier the growing Chinese economic problems. Would you use taking action on the enormous trade deficits we run with China to contribute to that problem?

    Chang: Yes, we should absolutely do that. Go back to a day which, in my mind, lives in infamy, which is January 15th, 2020, when President Trump signed the Phase One trade deal, which I think was a mistake. In that Phase One trade deal, it was very easy for China to comply, because there were specific targets that China had to meet in buying US goods and services. This was “managed trade.”

    China has not met its obligations. As of a few months ago, China had met about 62% of its commitments. That means, they have dishonored this deal in a material and significant way. If nothing else, China has failed to meet its Phase One trade deal commitments.

    We should be increasing the tariffs that President Trump imposed under Section 301 of the Trade Act of 1974. Remember, those tariffs are meant to be a remedy for the theft of US intellectual property. China has continued to steal US IP. As matter of fact, it has gotten worse: for instance, these Chinese anti‑lawsuit injunctions, which they have started to institute.

    We need to do something: China steals somewhere between $300 to $600 billion worth of US intellectual property each year. That is a grievous wound on the US economy, it is a grievous wound on our society in general. We need to do something about it.

    Question: As a follow‑up on that, Japan commenced World War II because of the tariffs Roosevelt was strapping on oil imports into Japan, do you think that might well have the same effect on China, where we do begin to impose stiffer tariffs on American imports?

    Chang: That is a really important question, to which nobody has an answer. I do not think that China would start a war over tariffs. Let me answer this question in a different way. We are Americans. We naturally assume that there are solutions, and good solutions, to every problem. After three decades of truly misguided China policy, there are no good solutions. There are no solutions that are “undangerous.”

    Every solution, going forward, carries great risk. The current trend of policy is unsustainable. There will be no American republic if we continue to do what we are currently doing and if we continue to allow China to do what it does.

    I do not think that enforcing a trade deal will start World War III. The point is, we have no choice right now. First, I don’t think the Chinese were ever going to honor the Phase One agreement . This was not a deal where there were some fuzzy requirements. This deal was very clear: China buys these amounts of agricultural products by such and such date, China buys so many manufactured products by such and such date. This was not rocket science. China purposefully decided not to honor it.

    There are also other issues regarding the trade deal do not think that we should be trying to foster integration of Wall Street into China’s markets, which is what the Phase One deal also contemplated. Goldman Sachs ran away like a bandit on that. There are lot of objections to it. I do not think we should be trading with China, for a lot of reasons. The Phase One trade deal, in my mind, was a great mistake. Do not take it from me, just look at their failure to comply with very simple, easy‑to‑comply-with requirements. It was a mistake.

    Question: Concerning cybersecurity, as we saw in the recent departure of a Pentagon official, ringing the alarm on how we are completely vulnerable to China’s cyberattacks. From your perspective, what would an attack look like on China that would hurt them? What particular institutions would be the most vulnerable? Is it exposing their secrets? Is it something on their financial system? Is it something on their medical system or critical infrastructure? What does the best way look like to damage them?

    Also, regarding what you mentioned about Afghanistan, we know that China has been making inroads into Pakistan as a check on American hegemony in relationships with India and Afghanistan.

    Now that the Afghanistan domino is down, what do you see in the future for Pakistan’s nuclear capability, in conjunction with Chinese backing, to move ever further westward towards Afghanistan, and endangering Middle East security?

    Chang: Right now, India has been disheartened by what happened, because India was one of the main backers of the Afghan government. What we did in New Delhi was delegitimize our friends, so that now the pro‑Russian, the pro‑Chinese elements in the Indian national security establishment are basically setting the tone. This is terrible.

    What has happened, though, in Pakistan itself, is not an unmitigated disaster for us, because China has suffered blowback there. There is an Afghan Taliban, and there is a Pakistani Taliban. They have diametrically‑opposed policies on China. The Afghan Taliban is an ally of China; the Pakistani Taliban kill Chinese.

    They do that because they want to destabilize Pakistan’s capital, Islamabad. Beijing supports Islamabad. The calculation on part of the Pakistani Taliban is, “We kill Chinese, we destabilize Islamabad, we then get to set up the caliphate in Pakistan.” What has happened is, with this incredible success of the Afghan Taliban, that the Pakistani Taliban has been re‑energized — not good news for China.

    China has something called the China‑Pakistan Economic Corridor, part of their Belt and Road Initiative. Ultimately that is going to be something like $62 billion of investment into Pakistani roads, airports, electric power plants, utilities, all the rest of it.

    I am very happy that China is in Pakistan, because they are now dealing with a situation that they have no solutions to. It’s like Winston Churchill on Italy, “It’s now your turn.”

    We should never have had good relations with Pakistan. That was always a short‑term compromise that, even in the short term, undermined American interests. The point is that China is now having troubles in Pakistan because of their success in Afghanistan.

    Pakistan is important to China for a number of reasons. One of them is, they want it as an outlet to the Indian Ocean that bypasses the Malacca Strait — a choke point that the US Navy ‑‑ in their view ‑‑ could easily close off, which is correct.

    They want to bypass that, but their port in Gwadar is a failure in many respects. Gwadar is in Pakistan’s Baluchistan. The Baluchs are one of the most oppressed minorities on earth. They have now taken to violence against the Chinese, and they have been effective. Pakistan is a failure for China.

    The best response would be if we hit them with everything at once because China right now is weak. If we were going to pick the number one thing to do, I would think trade.

    Trade is really what they need right now. Their economy is stalling. There are three parts to the Chinese economy, as there are to all economies: consumption, investment, and net exports. Their consumption right now is extremely weak from indicators that we have. The question is can they invest?

    China now has a debt crisis, so they are not going to invest their way out of this crisis, which means the only way they can save their economy is net exports. We should stop buying their stuff.

    We have extraordinary supply chain disruptions right now. It should be pretty easy for us to make the case that we must become self‑sufficient on a number of items. Hit them on trade. Hit them on investment, publicize the bank account details of Chinese leaders. All these things that we do, we do it all at the same time. We can maybe get rid of these guys.

    Question: In the Solomon Islands, they published China’s under-the-table payments to political figures. Should we do the same thing with China’s leaders?

    Chang: Yes. There is now a contest for the Solomon Islands, which includes Guadalcanal. China has bought the political establishment in the Solomon Islands, except for one brave man named David Suidani. Recently, somebody got the bright idea of publishing all of the specific payments that Beijing has made to Solomon Islands politicians. This was really good news. We should be doing this with payments to American politicians, we should be doing this across the board.

    Why don’t we publish their payments to politicians around the world? Let’s expose these guys, let’s go after them. Let’s root out Chinese influence, because they are subverting our political system.

    Similarly, we should also be publishing the bank account details of all these Chinese leaders, because they are corrupt as hell.

    Question: Could you comment, please, on what you think is the nature of the personal relationships between Hunter Biden, his father, and Chinese financial institutions. How has it, if at all, affected American foreign policy towards China, and how will it affect that policy?

    Chang: There are two things here. There are the financial ties. Hunter Biden has connections with Chinese institutions, which you cannot explain in the absence of corruption.

    For instance, he has a relationship with Bohai Harvest Partners, BHR. China puts a lot of money into the care of foreign investment managers. The two billion, or whatever the number is, is not that large, but they only put money with people who have a track record in managing investments. Hunter Biden only has a track record of being the son of Joe Biden.

    There are three investigations of Hunter Biden right now. There is the Wilmington US Attorney’s Office, the FBI — I don’t place very much hope in either of these – but the third one might actually bear some fruit: the IRS investigation of Hunter Biden.

    Let us say, for the moment, that Biden is able to corrupt all three of these investigations. Yet money always leaves a trail. We are going to find out one way or another. Peter Schweizer, for instance, is working on a book on the Biden cash. Eventually, we are going to know about that.

    What worries me is not so much the money trail — and of course, there’s the art sales, a subject in itself, because we will find out.

    What worries me is that Hunter Biden, by his own admission, is a troubled individual.

    He has been to China a number of times. He has probably committed some embarrassing act there, which means that the Ministry of State Security has audio and video recordings of this. Those are the things that can be used for blackmail. We Americans would never know about it, because blackmail does not necessarily leave a trail. This is what we should be most concerned about.

    Biden has now had two long phone calls with Xi Jinping. The February call, plus also one a few months ago. We do not know what was said. I would be very worried that when Xi Jinping wants to say something, there will be a phone call to Biden, and it would be Xi doing the talking without note takers.

    Question: Please tell us about the China desk over the 30 years, the influence of the bureaucracy on politics; what can they affect?

    Chang: I do not agree with our China policy establishment in Washington, in general, and specifically the State Department and NSC.

    This a complicated issue. First, there is this notion after the end of the Cold War, that the nature of governments did not matter. You could trade with them, you could strengthen them, and it would not have national security implications. That was wrong for a number of reasons, as we are now seeing.

    What bothers me is that, although their assumptions about China have demonstrably been proven wrong, American policymakers still continue with the same policies. There is, in some people’s mind, an unbreakable view that we have to cooperate with China.

    You hear this from Blinken all the time: “We’ve got to cooperate where we can.” It is this formulation which is tired, and which has not produced the types of policies that are necessary to defend our republic. That is the unfortunate thing.

    This is what people learn in international relations school when they go to Georgetown, and they become totally stupid. We Americans should be upset because we have a political class that is not defending us. They are not defending us because they have these notions of China. George Kennan understood the nature of the Soviet Union. I do not understand why we cannot understand the true nature of the Chinese regime.

    Part of it is because we have Wall Street, we have Walmart, and they carry China’s water. There are more of us than there are of them in this country. We have to exercise our vote to make sure that we implement China policies that actually protect us.

    Policies that protect us are going to be drastic and they will be extreme, but absolutely, we have now dug ourselves into such a hole after three decades of truly misguided views on China, that I don’t know what else to say. This is not some partisan complaint. Liberals and conservatives, Republicans and Democrats, all have truly misguided China policies.

    I do not know what it takes to break this view, except maybe for the deaths of American servicemen and women.

    Question: Is the big obstacle American businesses which, in donations to Biden, are the ones stopping decoupling of commerce, and saying, “Do not have war; we would rather earn money”?

    Chang: It is. You have, for instance, Nike. There are a number of different companies, but Nike comes to mind right now, because they love to lecture us about racism.

    For years they were operating a factory in Qingdao, in the northeastern part of China, that resembled a concentration camp. The laborers were Uighur and Kazakh women, brought there on cattle cars and forced to work.

    This factory, technically, was operated by a South Korean sub‑contractor, but that contractor had a three‑decade relationship with Nike. Nike had to know what was going on. This was forced labor, perhaps even slave labor.

    Clearly, Nike and Apple and other companies are now, at this very moment, trying to prevent Congress from enacting toughened rules on the importation of forced‑labor products into our country.

    One of the good things Trump did was, towards the end of his four years, he started to vigorously enforce the statutes that are already on the books, about products that are made with forced and slave labor. Biden, to his credit, has continued tougher enforcement.

    Right now, the big struggle is not the enforcement, but enhancing those rules. Apple and all of these companies are now very much trying to prevent amendment of those laws. It’s business, but it’s also immoral.

    Question: It is not just big Wall Street firms. There are companies that print the Bible. Most Bibles are now printed in China.

    When President Trump imposed the tariffs, a lot of the Bible printers who depended on China actually went to Trump and said, “You cannot put those tariffs in because then the cost of Bibles will go up.”

    Chang: Most everyone lobbies for China. We have to take away their incentive to do so.

    Question: What are the chances that China’s going to invade Taiwan?

    Chang: There is no clear answer.

    There are a number of factors that promote stability. One of them is that, for China to invade Taiwan, Xi Jinping has to give some general or admiral basically total control over the Chinese military. That makes this flag officer the most powerful person in China. Xi is not about to do that.

    Moreover, the Chinese regime is even more casualty‑adverse than we are. Even if Beijing thinks it can take Taiwan by force, it is probably not going to invade because it knows an invasion would be unpopular with most people in China. It is not going to risk hundreds of thousands of casualties that would result from an invasion.

    The reason we have to be concerned is because it is not just a question of Xi Jinping waking up one morning and saying, “I want to invade Taiwan.” The danger is the risk of accidental contact, in the skies or on the seas, around Taiwan.

    We know that China has been engaging in hostile conduct, and this is not just the incursions into Taiwan’s air-defense identification zone. There are also dangerous intercepts of the US Navy and the US Air Force in the global commons. One of those accidents could spiral out of control.

    We saw this on April 1st, 2001, with the EP‑3, where a Chinese jet clipped the wing of that slow‑moving propeller plane of the US Navy. The only reason we got through it was that George W. Bush, to his eternal shame, paid China a sum that was essentially a ransom.

    He allowed our crew to be held for 11 days. He allowed the Chinese to strip that plane. This was wrong. This was the worst incident in US diplomatic history, but Bush’s craven response did get us through it. Unfortunately, by getting through it we taught the Chinese that they can without cost engage in these dangerous maneuvers of intercepting our planes and our ships.

    That is the problem: because as we have taught the Chinese to be more aggressive, they have been. One of these incidents will go wrong. The law of averages says that. Then we have to really worry.

    Question: You don’t think Xi thinks, “Oh well, we can sacrifice a few million Chinese”?

    Chang: On the night of June 15th, 2020, there was a clash between Chinese and Indian soldiers in Ladakh, in the Galwan Valley. That was a Chinese sneak attack on Indian-controlled territory. That night, 20 Indian soldiers were killed. China did not admit to any casualties. The Indians were saying that they killed about 45 Chinese soldiers that night.

    Remember, this was June 15th of 2020. It took until February of 2021 for China to admit that four Chinese soldiers died. TASS, the Russian news agency, recently issued a story reporting that 45 Chinese soldiers actually died that night.

    This incident shows you how risk‑averse and casualty‑averse the Chinese Communist Party is. They are willing to intimidate, they are willing to do all sorts of things. They are, however, loath to fight sustained engagements. Remember, that the number one goal of Chinese foreign policy is not to take over Taiwan. The number one goal of Chinese foreign policy is to preserve Communist Party rule.

    If the Communist Party feels that the Chinese people are not on board with an invasion of Taiwan, they will not do it even if they think they will be successful. Right now, the Chinese people are not in any mood for a full‑scale invasion of Taiwan.

    On the other hand, Xi Jinping has a very low threshold of risk.

    He took a consensual political system where no Chinese leader got too much blame or too much credit, because everybody shared in decisions, and Xi took power from everybody, which means, he ended up with full accountability, which means — he is now fully responsible.

    In 2017, when everything was going China’s way, this was great for Xi Jinping because he got all the credit. Now in 2021, where things are not going China’s way, he is getting all the blame.

    The other thing, is that Xi has raised the cost of losing a political struggle in China. In the Deng Xiaoping era, Deng reduced the cost of losing a struggle. In the Maoist era, if you lost a struggle, you potentially lost your life. In Deng’s era, if you lost a struggle, you got a nice house, a comfortable life.

    Xi Jinping has reversed that. Now the cost of losing a political struggle in China is very high. So there is now a combination of these two developments. Xi has full accountability. He knows that if he is thrown out of power, he loses not just power. He loses his freedom, his assets, potentially his life.

    If he has nothing to lose, however, it means that he can start a war, either “accidentally” or on purpose. He could be thinking, “I’m dying anyway, so why don’t I just roll the dice and see if I can get out of this?”

    That is the reason why this moment is so exceedingly risky. When you look at the internal dynamics inside China right now, we are dealing with a system in crisis.

    Question: China has a conference coming up in a year or so. What does Chairman Xi want to do to make sure he gets through that conference with triumph?

    Chang: The Communist Party has recently been holding its National Congresses once every five years. If the pattern follows — and that is an if — the 20th National Congress of the Communist Party will be held either October or November of next year.

    This is an important Congress, more so than most of them because Xi Jinping is looking for an unprecedented third term as general secretary of the Communist Party.

    If you go back six months ago, maybe a year, everyone was saying, “Oh, Xi Jinping. No problem. He’s president for life. He’s going to get his third term. He will get his fourth term. He will get his fifth term, as long as he lives. This guy is there forever.” Right now, that assumption is no longer valid. We do not know what’s going to happen because he is being blamed for everything.

    Remember, as we get close to the 20th National Congress, Xi Jinping knows he has to show “success.” Showing “success” could very well mean killing some more Indians or killing Americans or killing Japanese or something. We just don’t know what is going to happen.

    Prior to the National Congress, there is the sixth plenum of the 19th Congress. Who knows what is going to happen there. The Communist Party calendar, as you point out, does dictate the way Xi Jinping interacts with the world.

    Question: Going back to the wing-clip incident, what should Bush have done?

    Chang: What Bush should have done is immediately demand the return of that plane. What he should have done was to impose trade sanctions, investment sanctions, whatever, to get our plane back.

    We were fortunate, in the sense that our aviators were returned, but they were returned in a way that has made relations with China worse, because we taught the Chinese regime to be more aggressive and more belligerent. We created the problems of today and of tomorrow.

    I would have imposed sanction after sanction after sanction, and just demand that they return the plane and the pilots. Remember, that at some point, it was in China’s interests to return our aviators. The costs would have been too high for the Chinese to keep them. We did not use that leverage on them.

    While we are on this topic, we should have made it clear to the Chinese leadership that they cannot kill Americans without cost. Hundreds of thousands Americans have been killed by a disease that China deliberately spread.

    In one year, from 2020 to 2021, nearly 80,000 Americans died from fentanyl, which China has purposefully, as a matter of state and Communist Party policy — sold to Americans. China is killing us. We have to do something different. I’m not saying that we have good solutions; we don’t. But we have to change course.

    Question: Biden is continuing this hostage thing with Huawei, returning the CFO of Huawei in exchange for two Canadians. Have we taught the Chinese that they can grab more hostages?

    Chang: President Trump was right to seek the extradition of Meng Wanzhou, the chief financial officer of Huawei Technologies. Biden, in a deal, released her. She did not even have to plead guilty to any Federal crime. She signed a statement, which I hope we’ll be able to use against Huawei.

    As soon as Meng was released, China released the “two Michaels,” the two Canadians who were grabbed within days of our seeking extradition of Meng Wanzhou. In other words, the two Michaels were hostages.

    We have taught China that any time that we try to enforce our own laws, they can just grab Americans. They have grabbed Americans as hostages before, but this case is high profile. They grabbed Americans, and then they grabbed Canadians, and they got away with it. They are going to do it again.

    We are creating the incentives for Beijing to act even more dangerously and lawlessly and criminally in the future. This has to stop.

    Question: On the off-chance that the current leader does not maintain his position, what are your thoughts on the leaders that we should keep an eye on?

    Chang: There is no one who stands out among the members of the Politburo Standing Committee. That is purposeful. Xi Jinping has made sure that there is nobody who can be considered a successor; that is the last thing he wants.

    If there is a change in leadership, the new leader probably will come from Jiang Zemin’s Shanghai Gang faction. Jiang was China’s leader before Hu Jintao, and Hu came before Xi Jinping.

    There is now a lot of factional infighting. Most of the reporting shows that Jiang has been trying to unseat Xi Jinping because Xi has been putting Jiang’s allies in jail.

    Remember, the Communist Party is not a monolith. It has a lot of factions. Jiang’s faction is not the only one. There is something called the Communist Youth League of Hu Jintao. It could, therefore, be anybody.

    Question: Double question: You did not talk about Hong Kong. Is Hong Kong lost forever to the Chinese Communist Party? Second question, if you could, what are the three policies that you would change right away?

    Chang: Hong Kong is not lost forever. In Hong Kong, there is an insurgency. We know from the history of insurgencies that they die away — and they come back. We have seen this in Hong Kong. The big protests in Hong Kong, remember, 2003, 2014, 2019. In those interim periods, everyone said, “Oh, the protest movement is gone.” It wasn’t.

    China has been very effective with its national security law, but there is still resistance in Hong Kong. There is still a lot of fight there. It may not manifest itself for quite some time, but this struggle is not over, especially if the United States stands behind the people there. Biden, although he campaigned on helping Hong Kong, has done nothing.

    On the second question, I would close China’s four remaining consulates. I would also strip the Chinese embassy down to the ambassador and his personal staff. The thousands who are in Washington, DC, they would be out.

    I would also raise tariffs to 3,600%, or whatever. This is a good time to do it. We have supply chain disruptions. We are not getting products from China anyway. We can actually start to do this sort of stuff.

    The third thing, I would do what Pompeo did, just hammer those guys all the time verbally. People may think, “Those are just words.” For communists, words are really important, because they are an insecure regime where propaganda is absolutely critical.

    I would be going after the Communists on human rights, I would be going after them on occupying the South China Sea, on Taiwan, unrelentingly — because I would want to show the world that the United States is no longer afraid of China.

    We have taught the world that we are afraid of dealing with the Chinese. State Department people, they are frightened. We need to say to the Chinese regime, like Dulles, “I’m not afraid of you. I’m going after you, and I’m going to win.”

    Tyler Durden
    Sun, 05/01/2022 – 23:20

  • DoD Sends "Phoenix Ghost" Kamikaze Drones To Ukraine 
    DoD Sends “Phoenix Ghost” Kamikaze Drones To Ukraine 

    The Department of Defense announced it was sending “121 Phoenix Ghost Tactical Unmanned Aerial Systems” to Ukraine. The never-before-seen kamikaze drone is a brand-new weapon system designed for ambushing Russian tanks.

    As reported by Breaking Defense, the Phoenix Ghost tactical drone is similar to the Switchblade drone already fielded in Ukraine. 

    https://platform.twitter.com/widgets.js

    Not much is known about the new drone. The DoD described it as a “one-way” drone that will “deliver a punch” and said it would operate similar to the Switchblade drone system. 

    The War Zone reported that Pentagon Press Secretary Jack Kirby said the Phoenix Ghost’s capabilities differ from Switchblades. 

    “I’m gonna be loath to get into much more detail about the system at this point for classification purposes, but you can safely assume that, in general, it works,” Kirby said. “It provides the same sort of tactical capability that a Switchblade does. Switchblade is a one-way drone if you will, and it clearly is designed to deliver a punch. It’s a tactical UAS, and Phoenix ghost is of that same category.”

    California-based AEVEX Aerospace is the defense company that designed and manufactured Phoenix Ghost. The company markets itself as “a recognized leader in full-spectrum airborne intelligence solutions.” 

    The new drone is part of the latest U.S. arms package to Ukraine. Here’s what’s included:

    • Over 1,400 Stinger anti-aircraft systems;
    • Over 5,500 Javelin anti-armor systems;
    • Over 14,000 other anti-armor systems;
    • Over 700 Switchblade Tactical Unmanned Aerial Systems;
    • 90 155mm Howitzers and 183,000 155mm artillery rounds;
    • 72 Tactical Vehicles to tow 155mm Howitzers;
    • 16 Mi-17 helicopters;
    • Hundreds of Armored High Mobility Multipurpose Wheeled Vehicles;
    • 200 M113 Armored Personnel Carriers;
    • Over 7,000 small arms;
    • Over 50,000,000 rounds of ammunition;
    • 75,000 sets of body armor and helmets;
    • 121 Phoenix Ghost Tactical Unmanned Aerial Systems;
    • Laser-guided rocket systems;
    • Puma Unmanned Aerial Systems;
    • Unmanned Coastal Defense Vessels;
    • 14 counter-artillery radars;
    • Four counter-mortar radars;
    • Two air surveillance radars;
    • M18A1 Claymore anti-personnel munitions;
    • C-4 explosives and demolition equipment for obstacle clearing;
    • Tactical secure communications systems;
    • Night vision devices, thermal imagery systems, optics, and laser rangefinders;
    • Commercial satellite imagery services;
    • Explosive ordnance disposal protective gear;
    • Chemical, Biological, Radiological, Nuclear protective equipment;
    • Medical supplies to include first aid kits.

    Russia’s Ambassador to the U.S., Anatoly Antonov, accused Biden of pumping Ukraine with weapons:

    “The U.S. authorities do not seem to be interested in a ceasefire. What matters for John Kirby and his colleagues is that the American military-industrial complex receives additional income by getting rid of obsolete weapons from their warehouses,” Antonov said.

    So far, the Biden administration has committed more than $4 billion in security assistance to Ukraine and has just requested a whopping $33 billion more. The massive request includes billions of dollars for economic and humanitarian aid. 

    Tyler Durden
    Sun, 05/01/2022 – 22:45

  • Food Shortages In Six Months – The Globalists Are Telling Us What Happens Next
    Food Shortages In Six Months – The Globalists Are Telling Us What Happens Next

    Authored by Brandon Smith via Alt-Market.us,

    In mid 2007 the Bank for International Settlements (The central bank of central banks) released a statement predicting an impending “Great Depression” caused by a credit market implosion. That same year the International Monetary Fund also published warnings of “subprime woes” leading to wider economic strife. I started writing alternative economic analysis only a year earlier in 2006 and I immediately thought it was strange that these massive globalist institutions with far reaching influence on the financial world were suddenly starting to sound a lot like those of us in the liberty movement.

    This was 16 years ago, so many people reading this might not even remember, but in 2007 the alternative media had already been warning about an impending deflationary crash in US markets and housing for some time. And, not surprisingly, the mainstream media was always there to deny all of our concerns as “doom mongering” and “conspiracy theory.” Less than a year later the first companies awash in derivatives began to announce they were on the verge of bankruptcy and everything tanked.

    The media response? They made two very bizarre claims simultaneously: “No one could have seen it coming” and “We saw this coming a mile away.” Mainstream journalists scrambled to position themselves as the soothsayers of the day as if they said all along that the crash was imminent, yet, there were only a handful of people who actually did call it and none of them were in the MSM. Also ignored was the fact that the BIS and IMF had published their own “predictions” well before the crash; the media pretended as if they did not exist.

    In the alternative media we watch the statements and open admissions of the globalists VERY carefully because they are not in the business of threat analysis; rather, they are in the business of threat synthesis. That is to say, if something goes very wrong in the world economically, central bankers and money elites with aspirations of a single centralized economic authority for the world are ALWAYS found to have a hand in that disaster.

    For some reason, they like to tell us what they are about to do before they do it.

    The idea that globalists artificially create economic collapse events will of course be criticized as “conspiracy theory,” but it is a FACT. For more information on the reality of deliberate financial sabotage and the “order out of chaos” ideology of globalists please read my articles ‘Fed One Meeting Away From Creating A Doomsday Sinkhole’ and ‘What Is The Great Reset And What Do The Globalists Actually Want?’

    The Great Reset agenda proposed by WEF head Klaus Schwab is just one example of the many discussions hidden in plain sight by globalists concerning their plans to use economic and social decline as an “opportunity” to quickly establish a new one world system based on socialism and technocracy.

    The primary problem with discerning what the globalists are planning is not in uncovering secret agendas – They tend to openly discuss their agendas if you know where to look. No, the problem is in separating the admissions from the disinformation, the lies from the truth. This requires matching up globalist white papers and statements to the facts and evidence at hand in the real world.

    Let’s look specifically at the food shortage problem in detail…

    Food Shortages In Six Months

    A week ago there was a torrent of press releases from global institutions all mentioning the same exact same concern: Food shortages within the next 3 to 6 months. These statements line up very closely with my own estimates, as I have been warning regularly about impending dangers of inflation leading to food rationing and supply chain disruptions.

    The IMF, the BIS, World Bank, The UN, the Rockefeller Foundation, the World Economic Forum, Bank of America and even Biden himself are all predicting a major food crisis in the near term, and it is not a coincidence that the policies of these very institutions and the actions of puppet politicians that work with them are causing the crisis they are now predicting. That is to say, it’s easy to predict a disaster when you created the disaster.

    The claim is that Russia’s invasion of Ukraine is the primary cause, but this is a distraction from the real issue. Yes, sanctions against Russia will eventually lead to less food supply, but the globalists and the media are purposely ignoring the bigger threat, which is currency devaluation and price inflation created by central banks pumping out tens of trillions of dollars in stimulus packages to prop up “too big to fail” corporate partners.

    In 2020 alone, the Fed created over $6 trillion from nothing and air dropped it into the economy through covid welfare programs. Add that to the many trillions of dollars that the Fed has printed since the credit crash in 2008 – It has been a nonstop dollar destruction party and now the public is starting to feel the consequences. Lucky for the central bankers that covid struck and Russia invaded Ukraine, because now they can deflect all the blame for the inflationary calamity they have engineered onto the pandemic and onto Putin.

    Inflation hit 40 year highs in the US well before Russia invaded Ukraine, but let’s consider the ramifications of that war and how it affects the food supply.

    The Russian invasion certainly disrupts Ukrainian grain production, which makes up around 11% of the total world wheat market. Russia also maintains a 17% share and together these two nations feed a large swath of third world nations and parts of Europe with 30% of wheat and barley exports, 19% of corn exports, 23% of canola exports, and 78% of sunflower exports.

    It is the sanctions on Russia that are a problem well beyond Ukraine, however, as Russia also produces around 20% of global ammonia and 20% of global potash supplies. These are key ingredients to fertilizers used in large scale industrial farming. Farmers are estimating an overall price spike of around 10% in food markets, but I believe this is very conservative. I am already seeing overall price increases of at least 20% from six months ago, and I expect there to be another 30% in price hikes before this year is over. In other words, we are looking at 50% in average increases in 2022.

    Official government inflation data and CPI cannot be trusted. Double whatever numbers they give and you will be much closer to the truth. The inflation rate used by Shadowstats.com, calculated using methods once applied by the US government in the 1980s before they “adjusted” their models to hide the data, supports my position so far.

    The expectation among US agricultural experts is that China will fill the void where Russian supplies disappear, but it’s a mistake to make this assumption.

    Something Weird Is Going On In China

    China’s crackdown on covid infections has reached levels so bizarre I have to ask the question: Are their lockdowns really about covid, or are they hiding something else?

    The death rate of covid in China is impossible to calculate accurately because they have never released proper data that can be confirmed. However, almost everywhere else in the world we see a median infection fatality rate of 0.27% for covid; meaning, over 99.7% of people in the world on average have nothing to fear in terms of dying from the virus. But in China, the CCP is acting as if they are dealing with the Black Plague. Why?

    Lockdowns have resulted in food shortages across the country as supply chains become strained and manufacturing remains shut in many cases. The story many westerners are not hearing much about, though, is the fact that Chinese exports have essentially been frozen. This is very important so I think it needs emphasis – Over 1 IN 5 container ships IN THE WORLD are now backed up in Chinese ports due to their covid lockdowns. This is incredible.

    Why would China do this over a virus we all know is not dangerous to the vast majority of people? Why institute the worst lockdown in the country so far and starve their own people when the majority of Western governments have now given up on their pandemic fear mongering and the forced vaccination agenda?

    I would suggest the possibility that China might already be engaging in an economic war that many Americans and Europeans don’t even realize is going on. This may be a beta test for a shut down of exports to the US and Europe, or it is an incremental shutdown that is meant to become permanent. The bottleneck on trade may also be a precursor to a Chinese invasion of Taiwan.

    Taiwan is actually more dependent and intertwined with China’s economy than many people know. China is the biggest buyer of Taiwan’s exports and those exports account for 10% of Taiwan’s GDP. Taiwan has hundreds of thousands of workers and businessmen that travel regularly to China to work, another economic factor that is now strained by lockdowns. Furthermore, Taiwan has multiple corporations that operate their factories on mainland China, all of which could be closed due to covid lockdowns.

    All I’m saying is, if I was China planning on invading Taiwan in the near future, I might consider using covid as a cover for damaging their economy first and disrupting their export model. Communists see the population as a utility that can be sacrificed if necessary, and China is perfectly willing to cause short term suffering to their people if it means long term gains for the party. Beyond that, if I was going to engage in economic warfare with the west covertly, what better way than to tie up 20% of the world’s cargo ships and disrupt supply chains in the name of protecting the country form a “pandemic?”

    The bottom line? Don’t rely on China to fill export needs for fertilizer ingredients or anything else as sanctions on Russia continue.

    Inflation vs. Supply vs. Control

    It’s not just globalist organizations talking about incoming food shortages; the CEO of international food corporation Goya has also recently warned we are on the precipice of a food crisis. As I have noted in the past, inflation leads to government price controls, price controls lead to lack of production incentives (profits), lack of profits leads to loss of production, loss of production leads to shortages, and shortages lead to government rationing (control over all large food sources).

    As we have seen with almost every authoritarian regime in modern history, control over the food supply is key to controlling the population. It is only surpassed as a strategic concern by control over energy (which we will also see shortages of soon as Europe sanctions Russian oil and gas and starts eating up supplies from other exporters). The food issue hits closest to home because we can see the effects immediately on our wallets and on our families. There is nothing worse for many parents than the prospect of their children going hungry.

    The mainstream media is once again ignoring any potential economic threat, specifically they are denying the notion of food shortages as something to be worried about. I say, why listen to a group of people that are always wrong on these types of events? If anything, I would at least take the words of the globalists seriously when it comes to economic collapse; they benefit the most from such disasters after all, and they also have the most influence when it comes to triggering crisis.

    Preparedness today costs nothing tomorrow. Lack of preparedness today costs EVERYTHING tomorrow. The choice for anyone with a brain is simple – Get prepared for the end of affordable and easily available food before this year is out.

    *  *  *

    If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.

    You can also follow me at – Parler: @AltMarket Gettr:  @Altmarket1

    Tyler Durden
    Sun, 05/01/2022 – 22:10

  • US Cities With Hottest Inflation May Cause Pain For Democrats 
    US Cities With Hottest Inflation May Cause Pain For Democrats 

    Inflation doesn’t strike the whole economy evenly. Some metropolitan areas across the U.S. recorded hotter inflation than others. Democratic lawmakers in these regions, up for re-election, could be in jeopardy come midterms. 

    Bloomberg found the four top metro areas where consumer prices cracked above the 10% barrier in February. Phoenix-Mesa-Scottsdale, Arizona, had the highest inflation of any urban region at 10.9%. 

    Inflation is so rampant in the metro area that Arizona Democratic Senator Mark Kelly’s re-election bid could be at risk as the high cost of living has crushed residents. 

    Evangelina Diaz, 56, drives about an hour from Maricopa, Arizona, to her job in central Phoenix. Gasoline prices hit particularly hard in the state, where workers drive further and more often than the average American. She says filling her tank now costs up to $50. 

    “We’re working to put gas in our car,” Diaz said. “It’s real ridiculous.”

    Stan Barnes, a former Arizona state senator and GOP political consultant, said Kelly is a “likable person who’s married to one of the most important and admired people in Arizona [Gabby Giffords]. But this time, he needs to carry Joe Biden around like a sack of bricks and somehow explain his record.” 

    Biden’s presidency depends on campaigns like Kelly’s. Republicans are expected to win a majority in the U.S. House in November. 

    “It’s one of the most critical races,” said Jennifer Duffy, Senate editor of the Cook Political Report. “If Democrats lose him [Kelly], they’re on very shaky ground.”

    Vulnerable Democrats in other metro areas where inflation is running hot could also be in trouble.

    The other cities, Atlanta-Sandy Springs-Roswell, Georgia; Miami-Fort Lauderdale-West Palm Beach, Florida; and Baltimore-Columbia-Towson, Maryland, have hit 10% or are close to double-digit inflation.

    When it comes time to vote in the upcoming midterms, many people will be voting with their depleted wallets, which could be a “biblical disaster” for Democrats. Perhaps that’s why the Biden adminstration created a “Disinformation Governance Board” to control narratives combat whatever they deem ‘misinformation’ before the 2022 midterms and beyond. 

    Tyler Durden
    Sun, 05/01/2022 – 21:35

  • Hedge Fund CIO: Can A Modern Nation Pull Off A Debt Jubilee Without Full Monetary Collapse?
    Hedge Fund CIO: Can A Modern Nation Pull Off A Debt Jubilee Without Full Monetary Collapse?

    By Eric Peters, CIO of One River Asset Management

    “While central banks in the U.S. and Europe are moving toward monetary tightening or rate increases, the Japanese economy is still on the road to recovery,” said the Bank of Japan Governor. “It is most important to support economic recovery by patiently continuing monetary easing,” added Kuroda-san.

    The Bank of Japan first cut interest rates to zero 23yrs ago, and ignoring a couple aborted attempts to briefly normalize policy they have remained at zero or lower ever since.

    Government debt exploded in that time, with annual deficits and stimulus packages becoming so commonplace they lost their effectiveness.  The central bank bought nearly half the 1.4 quadrillion Yen of government debt that mounted, a stunning 260% of GDP. And yet, through it all, core prices in Japan’s economy remain almost identical today as they were when its zero-interest-rate experiment began.

    For decades, it seemed everyone lost money trading Japanese bonds, which moved in counter-intuitive ways. They called the inexorable government bond rally the “Widow-Maker.” Traders with the highest IQs tend to have the least-disciplined risk management, so they suffered most profoundly.

    In the years preceding the pandemic, economists claimed they definitively understood how and why Japan’s disinflation developed, persisted, and then manifested in other nations. Secular Stagnation.

    Perhaps they did actually figure it out. But no sooner had the economists named their magnificent mental model then the world started to change — which of course is the only durable model in all of economics. There are others that tend to work too. Like when major central banks are tightening, while others are easing, volatility rises until something breaks badly, at which point policy makers panic (for more on this topic, see “The Biggest Story No-One Is Talking About”: Why Albert Edwards Expects “Something In The Market Is About To Snap“).

    Another model that seems to hold is that highly intelligent economists and central bankers generally believe they understand inflation, as if it is a mathematical equation. And even though inflation appears when they least expect it, and fails to manifest when they most anticipate it, they remain remarkably confident in their ability to predict it.

    Anecdote:

    The more you think about money, the less it makes sense. That is why the topic is so alluring for the masochists amongst us, attempting to solve the unsolvable, climb the unclimbable, conquer the unconquerable.

    We engineer thought experiments and mental models in the hope of gaining a glimpse of some truth, the scent of something real, a money-making opportunity. Japan provides an enigma to explore. It once had a bubble so big the Emperor’s Palace was worth more than the state of California. Unreal. Impossible. But so it was.

    When that bubble burst, real estate and equity prices utterly collapsed. The Yen strengthened for decades. It remains stronger today than back then. Japan’s exporters carried on, managing costs lower, maintaining competitiveness. The government supported the system, running persistent deficits and in each recession announced a special stimulus.

    The central bank stimulated too. In 1999 the Bank of Japan reduced rates to zero, unsuccessfully lifted them a couple times, and in 2015 cut them to -0.10% where they remain. The level of government debt expanded in ways that almost everyone agreed would lead to an inflationary collapse. It did not. The Bank of Japan bought bonds, and now owns roughly 130% of GDP worth of government debt, which is half of the 260% outstanding.

    It also pledged yield curve control, bidding for an unlimited quantity of 10yr government bonds at a 0.25% yield. Could the central bank create money, buy all the outstanding bonds, and simply burn them? Execute a modern version of an Old Testament debt jubilee? The currency of a nation that chooses this path should weaken, as it is now doing in Japan.

    But might it be possible for a country to pull off such a feat without full monetary collapse? We don’t know, yet. What seems certain though, is that if you were to attempt such a bold maneuver, you would absolutely want to be the first nation to try. 

    Tyler Durden
    Sun, 05/01/2022 – 21:00

  • Texas Gov. Threatens To Declare 'Invasion' As Illegal Immigration Expected To Skyrocket
    Texas Gov. Threatens To Declare ‘Invasion’ As Illegal Immigration Expected To Skyrocket

    Texas Governor Greg Abbott (R) is considering invoking war powers to expand the state’s authority to manage the southern border by officially declaring an “invasion” – verbiage which would comply with a clause in the US Constitution that says states are prohibited from engaging in war except when “actually invaded.”

    Top lawyers for Mr. Abbott and for the Texas attorney general, Ken Paxton, met this month to debate the move, which would put the state in a head-on collision with the federal government by allowing state police to arrest and deport migrants, according to two people familiar with the discussions. Mr. Abbott says he remains open to the approach, but he has expressed concern about unintended consequences. -NYT

    “If we do use this strategy, it could expose law enforcement in the state of Texas to being prosecuted,” said Abbott during a recent press converence. “Is it something we’re looking into? Yes,” he added.

    Abbott has already mobilized thousands of National Guard troops to patrol the border, and ordered safety inspections of incoming trucks from Mexico – a short-lived program after it caused massive gridlock and disrupted international trade. He’s also overseen the construction of around 20 miles of new border fencing at key ares. What’s more, Abbott repurposed several state prisons to hold migrants charged with trespassing.

    Perhaps most famously, Abbott recently began busing migrants from Texas to Washington DC.

    The New York Times echoes the Biden administration, which has framed Abbott’s immigration policy as nothing more than a political stunt, writing that his “aggressive posture has done little to stem the tide and also exposed him to fierce criticism that he is using his authority to meddle in a policy area that belongs to the federal government,” however they acknowledge that his attempts to tighten border security along the state’s 1,254 mile border have helped him hold off political challengers.

    Federal agents recorded nearly 129,000 crossings into Texas in March, about 11,000 more than during the same month last year, when Mr. Abbott began the effort known as Operation Lone Star. The biggest increase occurred in an area of the border that includes Eagle Pass, a sun-faded city of 28,000 people, numerous stray cats and dogs and few resources to spare.

    Costs have been mounting. Just maintaining the National Guard deployment through the summer will require another $531 million, state officials said this month. A 22-year-old soldier assigned to the mission drowned last week while attempting to rescue two migrants in swift water. -NYT

    INCOMING

    While immigration levels have been out of control in recent years, Texas officials are bracing for an even larger influx of illegal immigrants when the Biden administration ends a Trump-era policy known as Title 42 – which used the pandemic to justify turning back hordes of asylum seekers.

    The current surge in migrants kicked off with the election of President Biden, which was taken as a virtual green light to flood into the country without the same level of border security as former President Donald Trump employed.

    Now, Abbott is under pressure to do more as Biden pull back.

    “Lone Star hasn’t moved the needle one iota for the simple reason that they’re not returning people to Mexico,” said former Trump DHS official Ken Cuccinelli, a vocal proponent of declaring an invasion.

    The White House has pushed back against Texas, with Press Secretary Jen Psaki saying that the state “does not need to replace C.B.P. at the southern border,” referring to the federal Customs and Border Protection Agency.

    We wonder which political party the immigrants will support, should they be granted amnesty at some point in the future?

    Tyler Durden
    Sun, 05/01/2022 – 20:25

  • Morgan Stanley: "In Hindsight, 2022 Is Kind Of Simple, It's Not Exactly Fermat's Last Theorem"
    Morgan Stanley: “In Hindsight, 2022 Is Kind Of Simple, It’s Not Exactly Fermat’s Last Theorem”

    By Andrew Sheets, Chief Cross-Asset Strategist for Morgan Stanley

    It’s a funny year. Returns are awful, with significant losses in almost every asset class not labelled ‘commodities’. Investors still face wide-ranging uncertainties, from how fast the Fed tightens, to whether Europe sees an energy crisis, to how China addresses Covid, to the ongoing fall of the yen. Cross-asset performance feels confused, with defensive equities unusually strong while government bonds are unusually weak.

    But step back a bit, and 2022, in hindsight, is also kind of simple. Valuations were high and policy is tightening and growth is slowing…and prices have fallen. Cheaper stocks are (finally) outperforming more expensive ones. Bond yields were very low and are (finally) rising. Credit and MBS spreads were tight, and have widened. The UK has weak growth, a large current account deficit and world-beating negative real yields, and has seen its currency weaken substantially. It’s not exactly Fermat’s Last Theorem.

    So what should investors do, given a complex set of challenges, but also signs of underlying rationality? This can be a good time to step back and look at what rules-based indicators are telling us.

    Let’s start by focusing on what these indicators say about where we are in the cycle, and what that means for investment strategy. Our cycle indicator looks at a range of economic indicators and tries to map them to historical patterns of cross-asset performance.

    Our indicator sees the data as highly extended versus trend. We call this ‘late cycle’ because, historically, readings sharply above trend have often (but not always) occurred later in an economic expansion. This statement is not about predicting a recession, necessarily, but our economists are convicted that we are seeing a meaningful deceleration. And thinking probabilistically, that type of deceleration almost surely increases the chances of a downturn. Whether the contraction materializes or not, it will affect cross-asset performance today.

    At present, the late-cycle indicator is consistent with underperformance of high yield credit relative to both equities and bonds, the outperformance of defensive equities, a flatter curve and fewer headwinds to long-end duration.

    Of course, our cycle indicator isn’t alone in flagging caution. With the risks to the market so obvious, sentiment is negative. Which brings us to the next question – despite the macro challenges, is sentiment now extreme enough to boost markets?

    It’s possible. But our best attempts to statistically quantify a sentiment signal say ‘not yet’. In a recent report led by my colleague Naomi Poole, we explored the efficacy of different measures of ‘sentiment’ and turning them into a signal. We think that using a composite of sentiment indicators is most powerful, and that level and trend of sentiment matter for creating a signal with good returns and hit rates over time. Our indicator is not yet extreme, and has not yet turned (it is ‘neutral’). We are watching it closely.

    Given the swirling mix of storylines and volatility, a third related question is what would a fully rules-based cross-asset strategy do today? For that, we turn to CAST, our Cross-Asset Systematic Trading strategy, developed by my colleague Phani Naraparaju. CAST is the most powerful quantitative instrument in our cross-asset toolkit, evaluating ~1,500 factors across ~150 global assets. For all that complexity, it asks a simple question – what looks most attractive today based on what some of those factors (different measures of carry, valuation, momentum and fundamentals) have meant in the past?

    CAST has helped our process so far this year. While it has certainly gotten things wrong, it has gotten more things right, especially a positive view on commodities, a defensive skew in US equities and a negative view on JPY, GBP and global 2yr rates. It has been most successful with cross-asset relative value, while struggling more with directional views, a not-so-subtle hint that this is a better market for alpha than beta. And while CAST is a completely rules-based tool, we pay special attention where its views align with the bottom-up, fundamental calls of our strategy colleagues. A few things stand out.

    CAST is dialling back its beta, especially in commodities, where it has become more negative on copper (but still likes energy). Second, CAST is giving the same signals as our Asia macro strategists, who expect CNY weakness and like receiving CNY rates. And similar to views in equity strategy, it is positive on the Nikkei (FX-hedged) and Healthcare, and negative on the NASDAQ and Russell 2000. CAST has also unwound a large credit compression trade it had been running post-Covid, which lines up with the decompression and dispersion theme our credit strategists expect to be more prominent.

    Rules-based tools help in markets that are volatile, emotional and present more storylines than a reasonable investor can process. For the moment, they suggest that cross-asset performance continues to follow the late-cycle playbook, sentiment has not yet given a conclusive tactical signal, and following historical factor-based patterns is helping to trade relative value. They won’t solve everything, but given the challenges of 2022 so far, every little bit helps.

    Tyler Durden
    Sun, 05/01/2022 – 19:50

  • Building Balanced Exposure To The Blockchain Economy
    Building Balanced Exposure To The Blockchain Economy

    Blockchain technology extends far beyond Bitcoin, Dogecoin, and other popular cryptocurrencies, as it provides a foundation for verifiable financial systems and proof of ownership for digital goods and assets.

    From privacy concerns to anti-trust issues, big tech has eaten away at the world’s trust in the technology sector. And, as Visual Capitalist’s Niccolo Conte details below, as people search for better and more trustless solutions for their financial services, the blockchain economy is flourishing to meet their needs.

    This infographic from MSCI outlines how quickly decentralized solutions and services have grown, and how investors can be a part of this exciting new sector.

    The Three Key Trends of Blockchain Adoption

    By cutting out the need for a centralized middleman that facilitates transactions, blockchains can provide more efficient systems to power three key trends of the fintech future:

    • Digital hard money and assets

    • Decentralized finance (DeFi)

    • Digital goods and collectibles

    As the first cryptocurrency and deflationary monetary asset, Bitcoin is the ambassador for digital hard money. By having a fixed supply of 21 million bitcoin set in code and a decentralized network powering transactions on the network, Bitcoin provides anyone access to a deflationary digital asset that they can transfer in minutes without having to trust centralized intermediaries.

    While Bitcoin pioneered the blockchain revolution over the past decade, further functionality built on blockchain technology is enabling digital goods and collectibles with non-fungible tokens (NFTs) along with more equitable and trustless financial systems through decentralized finance.

    Decentralized Finance (DeFi) Makes Financial Services Accessible

    Along with seeking decentralized hard money assets in the form of cryptocurrencies like Bitcoin, the world is looking for trustless financial services through which they can borrow, lend, and perform other essential financial services.

    Decentralized finance (DeFi) enables these services through decentralized applications (Dapps) powered by smart contracts. Today, more than $260 billion is currently “locked” or engaged with some form of smart contract in a DeFi application.

    Below are the 10 largest DeFi applications by the amount of value currently “locked” or engaged with the applications’ smart contracts.

     

    Source: DeFi Llama
    As of Jan 2022

     

    From staking tokens within a protocol in exchange for governance votes to providing market liquidity by locking tokens up in exchange for a portion of trading fees, DeFi is providing functionality and incentives for participants in the blockchain economy.

    What is the MSCI Blockchain Index?

    The MSCI Blockchain Index was developed in collaboration with ARK Invest with the aim of representing the performance of a set of companies associated with the development of products and services for the blockchain economy.

    From providing payments services for cryptocurrencies to the actual hardware products used for verifying blockchains, these companies fall into five core segments of the digital blockchain sector:

    1. Developers of tech and protocols of decentralized finance like Dapps and smart contracts

    2. Products and services for the infrastructure of digital markets like cryptocurrency exchanges and payment gateways

    3. Providers of blockchain solutions and services through corporations

    4. Hardware and software providers for the verification of blockchains

    5. Buyers and sellers of cryptocurrency providing liquidity and facilitating payments

    With a broad variety of industries contributing to the blockchain economy, companies like AMD, Visa, and the Intercontinental Exchange (ICE) are among the top constituents of the index.

    As decentralized finance and other technologies bring about a trustless revolution for financial systems and the ownership of digital goods, the MSCI Blockchain Index ensures you aren’t left behind.

    Tyler Durden
    Sun, 05/01/2022 – 19:15

  • Bad To The Bone
    Bad To The Bone

    Authored by Peter Tchir via Academy Securities,

    If last Friday’s price action was ugly, this Friday’s can only be described as mega-ugly!

    This weekend’s T-Report follows in the footsteps of The Not So Good, The Bad, and The Ugly and Welcome to Thunderdome!!! Sadly, there is a theme emerging in the tone of these T-Reports and the markets – decidedly negative.

    On Thursday, we asked the question Is The Worst Behind Us? We decided it was not, which seemed like a horrid decision as stocks skyrocketed ahead of Thursday’s earnings, but hasn’t looked so bad since 3:25pm on Thursday when stocks resumed their downward decent.

    Today, we try to figure out where markets and the economy head next and try and identify a bottom!

    Geopolitics

    Academy published Around the World on Thursday night. This month’s topics include:

    • Update on the Russian Invasion of Ukraine.

    • China’s Solomon Islands Partnership and Influence in the Region.

    • Israeli / Palestinian Violence Escalates.

    • Protests in Peru Over Inflation Crisis.

    General Spider Marks also discussed the latest on the war on CNN with Wolf Blitzer.

    Bad to the Bone

    With so much going on, we are going to try to address what’s next by focusing on:

    • Markets themselves. Price action and the alleged “capitulation” so many are talking about.

    • Earnings. What I think is playing out with earnings.

    • Bad Actors Behaving Badly. This will touch on Russia, but go beyond that as we examine risks (that are still a low probability), but are things we should be thinking about.

    • Inflation. This section will be brief, which is not actually the case with inflation. Food and Energy.

    • The Fed. We get the FOMC announcement and press conference on Wednesday. This will be the first opportunity for the Fed to address the market volatility and the last FOMC meeting set the stage for a strong rally!

    What Are Markets Telling Us?

    One thing the markets are certainly telling us is that they are as illiquid as heck! The Nasdaq 100 rose 1.5% on Monday, fell almost 4% on Tuesday, started Wednesday up 2%, back to slightly negative then back to up almost 2%, only to finish the day wildly unchanged. On Thursday, it was up 4.25% and finished up 3.5%, only to finish down 4.5% the next day.

    It is concerning when the weekly drop of 3.7% doesn’t do justice to just how volatile and crazy the week was.

    This “chaotic” trading occurred in almost every market I watch. I picked the Nasdaq 100 because a few of the juggernauts in that index reported earnings this week, but you name a market and “crazy” trading patterns were evident.

    CDX IG had some vicious trading and closed the week at 84 bps, the highest since June 2020 (the Bloomberg Corporate Bond OAS isn’t back to mid-March levels, but a lack of liquidity is evident in credit trading as well based on all the reports I’m getting from customers).

    These wild oscillations bring back memories of watching the Tacoma Narrows Bridge collapse in some elementary school class. Will the market’s oscillations resolve themselves in the same way as they did with the bridge? I hope not, but that seems to be a non-zero risk. I also must be cautious about getting too bearish as the lack of liquidity is evident in both directions! Rallies like Thursday’s will be just as sharp and vicious as the declines.

    Last Week’s Chart – Updated

    We have now broken through the 12,570 line I had on the chart. We had broken it on Tuesday and stayed below on Wednesday and made a valiant attempt to bounce on Thursday, but are now below that, and are at the lowest close on the Nasdaq composite since December 2020! I am concerned that we have to fall to the next rough level of support, which is below 11,000 (just over 10% further to fall).

    PARA

    Bill Hwang was arrested this week so I felt it was appropriate to bring out this chart of PARA, which traded under a different ticker during the time that was highlighted.

    Based on the allegations made around the arrest, I think we can assume that at least some part of the rise can be attributed to “flows” (him buying more and more, because he could) and a substantial portion of the fall can also be attributed to “flows” (stop losses, triggering selling). In full disclosure, I own some of this right around current levels (it had been a nice contrarian dip buy for me until the recent plunge started about 2 weeks ago).

    The point of this chart is to really hammer home the point about how important flows are, and how illiquid things can become, as that is an important part of my current view on where markets are headed.

    I would like the “capitulation” story to be a little more obvious!

    Speculative Fund Flows

    I am closely watching 3 funds:

    • The $13 billion TQQQ, which is a triple leveraged ETF on the Nasdaq 100 (so it represents over $40 billion of “QQQ” purchasing power).

    • SQQQ, which is only $3 billion, but is a 3x short fund.

    • ARKK, which is just under $9 billion and is invested in “disruptive” companies.

    Due to the leverage in the two funds and the volatility of the ARKK fund, I think these give some good insight into whether we are seeing “capitulation” or not.

    ARKK, which is down 50% YTD and down 29% in April, had inflows. I appreciate the buy the dip mentality and a lot of the companies in the ETF have interesting valuations here (for full disclosure I am flat as of the close on Friday and am tempted to buy). But, regarding signs of “capitulation,” I just don’t see it.

    But the TQQQ story is even more interesting because it got significant inflows last week! Even as the market has been selling off and getting more volatile, money poured into this triple leveraged fund, which was down 12% on the week, down 37% on the month, and down 56% year to date. From a “traditional” view where returns correlate with flows, these things wouldn’t happen. As a contrarian, I’m impressed that they are happening, but I cannot help but wonder if we aren’t nearing a breaking point? Every dollar that has come into TQQQ (and ARKK) this year is underwater, often by significant amounts. If we’d seen “real” capitulation, I would expect fund outflows, rather than inflows last week.

    The SQQQ finally got some inflows late last week, so that at least is a sign that we are seeing some hedges.

    Yes, there are all sorts of ways to determine positioning, and this sample set is really much more retail focused, but the lesson is:

    • Capitulation may be getting talked about a lot more than it is actually occurring.

    • In general, the bearish discussions do not seem to be getting backed up by fully bearish positioning (90% of my conversations are about dip buying and finding the bottom).

    The Non-Virtuous Cycle

    I am going to try and tie the previous charts and stories into a simple narrative. There was a group of people out there who had this happen to them during the pandemic:

    • They worked at fun, interesting, disruptive firms and had stock prices soar or were even able to participate in their companies’ IPOs.

    • That wealth was heavily tied to their company.

    • When they could access this wealth, they “diversified” into:

      • Other disruptive companies because they loved the disruptive mindset and they could relate to it, and the excitement was palpable.

      • Big buyers of crypto. Crypto met the “disruptive” and “change the world” feelings that were often pervasive during the wild rebound post pandemic. Bitcoin hit $60k in March 2021 and then again in November, but is languishing around $40k right now.

    I would argue that you had a “virtuous” cycle that started after Covid and has been running out of steam. This “cycle” theory helps explain why crypto is so correlated to some volatile tech sectors (they are owned by the same people).

    I cannot tell if this “group” (which I completely believe exists) has managed to properly diversify themselves, or if we have another leg down?

    Maybe I’ve picked my charts too narrowly, but I am not getting a good “vibe” from the market itself. And I didn’t even bring up, at least not too much, that the cost of credit is rising and will be a drag on earnings.

    Earnings and Multiples

    I spend very little time on earnings, but this week was as good as any to pay attention to. What I think about earnings season, especially right now, is that:

    • It is not so much about what was made, but what will be made.

    • It is far more about the multiple the market is willing to pay, than about the earnings or even the outlook.

    Going back to January of this year, we discussed the Valuation Evaluation. This earnings season is still more about what multiple we will pay for future earnings, rather than about the future earnings themselves. We are about to embark on balance sheet reduction and that is influencing what investors will pay for future earnings.

    When I look at price action post-earnings, the bigger moves are related to this valuation evaluation, rather than the prospects of future earnings (though that plays a role given the global uncertainty and higher rates). So far earnings haven’t been a help for stocks (though I’d argue that is more about this valuation adjustment than the earnings themselves) and neither have some hefty buyback announcements. The buyback announcements will help over time as they are a flow that is going in the right direction for stocks.

    At the moment, earnings and buybacks aren’t enough to create a bounce in stocks and risk assets, but they do set the stage for a nice long rebound once we get to that stage.

    Bad Actors Behaving Badly

    People keep wondering when China will abandon Russia. I cannot think of a reason for them to do so. Yes, they need us, but we need them far more than they need us, and we’ve already shown our colors (the West that is) by continuing to buy Russian oil. Xi cares about China and their long-term needs. I’m willing to bet that China sells military equipment to Russia long before they stop buying Russian commodities.

    Any leader of an autocratic nation, whose behavior goes against what the U.S. stands for, has to be working to establish even better and closer relationships with China, as they have the money (and the need for resources), don’t care about internal politics, and haven’t weaponized their currency the way we did when we froze the Russian Central Bank’s dollar reserves.

    On Putin, I spend about 2% of my time thinking about how we come to a peaceful outcome and about 98% of my time thinking about how he can use a nuclear weapon to further his goals. The nuclear threat is there, but it seems so “binary” that it isn’t as powerful as it might be. Putin, of all people, would seem to benefit by making the threat of nuclear attacks more real! Yes, he needs to be careful with India and China to ensure their ongoing purchases in the event he does something. Yes, he has to be extremely careful about our retaliation. No, I haven’t come up with a way that seems plausible, but this is coming up in conversation after conversation. If Putin’s only option is to “win” and he is most definitely not “winning” by any true measure, what will he do to “win”?

    Again, no one seems to have come up with a strategy that works for him to elevate his nuclear threat to get more from the West, but we have to believe he is exploring that option. One very sobering thought that came out of some of these discussions is that from the Russian (or Soviet) perspective, the only country to ever use a nuclear weapon was the U.S. I’m not sure what to say about that, other than it is sobering and may well factor into Putin’s thoughts.

    On the subject of nuclear, every bad actor (most are already pursuing nuclear weapons, if they don’t already have them) will be aggressively pursuing them now, having seen what a deterrent they are. I believe they aren’t working as well as Putin would like, but there is no argument that they are working.

    So far, Russia has held off on a full-scale cyber assault, but that remains a risk. I do have to say that our Geopolitical Intelligence Group has been spot on with their analysis that our defenses are thwarting Russian attempts. There have been a lot more cyber attacks than we hear about because our defenses (at a national and corporate level) have been so good! A big shout-out for the good team, but vigilance is still required.

    We live in a world where bad actors feel more emboldened to act badly, which gets me back to my “closeness” of supply chains, which I won’t regurgitate here, but I think is crucial and the direction countries and companies are headed!

    Inflation

    High energy costs are here for some time as we need to spend to build out sustainable energy sources and we need to re-invest in traditional energy sources that in many cases suffer from underinvestment. Personally, I don’t understand why starting the Keystone Pipeline isn’t on the table, but that is a topic for another day. Food inflation is likely to be worse than energy inflation.

    • War in Ukraine. With the war dragging on, it is almost impossible to expect much of a crop out of Ukraine. Russia may get a crop, but how will they ship it? Or even transport it within Russia as the invasion is co-opting their rail system. More problematic is this has the risk of becoming a muti-year problem.

    • Fertilizer. Our conversations are literally filled with fertilizer. Nitrates, peat, natural gas, etc. are all working against the cost of fertilizer. That is a major problem and is still getting worse rather than better.

    • Equipment. Like with most heavy equipment, there are supply chain issues.

    • Farms are expensive to run. Not only is fertilizer expensive, but workers are also expensive and the fuel to power the equipment is expensive.

    • Ukrainian refugees. Countries in Europe are finding homes for millions of refugees from Ukraine. That is straining existing supply and delivery systems. The food distribution system will adapt, but the massive displacement of people is not helping the food problem as logistics need to catch up with this shift in consumption.

    Since fuel and food inflation are real, I don’t see the politicians backing down on “fighting” inflation. I don’t really think that the Fed is in a great position to fight the type of inflation that we are getting. I also think that subsidies to help people purchase food and fuel are deflationary. They are potentially necessary as the poor are the hardest hit, but policies like that do more to offset the costs of inflation rather than stopping inflation.

    The Fed

    The Fed meeting is on Wednesday. The last Fed meeting sparked a big rally. There are two things that might be different this time:

    • Everyone knows the last Fed meeting sparked a rally, so they might be holding off selling risky assets until after the Fed meeting! I know that as a bear, I am deathly afraid of a post Fed rally, which might mean we don’t get it this time.

    • We will get balance sheet reduction and while that seems much more priced in, that could still be a scenario where we sell the news because it becomes real.

    I am scared of a post FOMC rally (and that could be the turning point), but it seems almost too obvious to happen again!

    On the bright side, I’m on the road for the next two weeks straight seeing customers, investors, and friends in person! That is the best part of this job, and I will enjoy it even if I still cannot get to the point of being bullish! I’m closer to being bullish, but not there yet! Small positions and nimble trading still seem to be the order of the day (and I don’t mind rates – the 10-year was only 3 bps higher on the week). I do hope that “Bad to the Bone” turns out to be a bad title, but that’s where I’m stuck right now.

    Tyler Durden
    Sun, 05/01/2022 – 18:40

  • Alarming Signs Farmers Reduce Fertilizer May Wreck Crop Yields 
    Alarming Signs Farmers Reduce Fertilizer May Wreck Crop Yields 

    There is growing concern farmers worldwide are reducing chemical fertilizer, which may threaten yields come harvest time, according to Bloomberg. The repercussions could be huge: Lower yields may exacerbate the food crisis. 

    There are alarming signs commercial farmers in top growing areas in the world are decreasing the use of essential nutrients — nitrogen, phosphorus, and potassium. 

    Revealed last week, SLC Agricola SA, one of Brazil’s largest farming operations, managing fields of soybeans, corn, and cotton fields in an area larger than the state of Delaware, will reduce the use of fertilizer by 20% and 25%. 

    Coffee farmers in Brazil, Nicaragua, Guatemala, and Costa Rica, some of the largest coffee-producing countries, are expected to spread less fertilizer because of high costs and shortages. A coffee cooperative representing 1,200 farmers in Costa Rica predicts coffee output could slip 15% next year because of soaring fertilizer costs. 

    The International Fertilizer Development Center (IFDC) warned a reduction in fertilizer use would shrink yields of rice and corn come harvest time. Farmers in China, India, Bangladesh, Indonesia, and Vietnam — the largest rice-producing countries — are spreading less fertilizer, and may result in a 10% reduction in output, equating to about 36 million tons of rice, or enough food to feed a half billion people.

    More fertilizer equals more food production; Less fertilizer equals lower food production. It’s a simple concept to understand and may suggest an even larger food crisis is on the horizon. 

    The US won’t be spared. Chairman of the Kansas Wheat Commission Gary Millershaski said his “biggest fear” this spring is that farmers in North America skip out on applying nitrogen to wheat plantings. He said, if farmers did, this might suggest harvests would be a “lower class of wheat.”

    In March, Tony Will, the chief executive of the world’s largest nitrogen fertilizer company CF Industries Holdings Inc., warned: “My biggest concern is that we end up with a very severe shortage of food in certain areas of the world.” 

    Rockefeller Foundation President Rajiv Shah provided Bloomberg Television’s David Westin with a timeline of when the “massive, immediate food crisis” begins. He said, “in the next six months.” 

    Tyler Durden
    Sun, 05/01/2022 – 18:05

  • California Expands Medi-Cal To Adults 50 And Older, Regardless Of Immigration Status
    California Expands Medi-Cal To Adults 50 And Older, Regardless Of Immigration Status

    Authored by Vanessa Serna via The Epoch Times (emphasis ours),

    California will extend Medi-Cal health care coverage to more than 185,000 residents 50 years and older, regardless of their immigration status starting May 1.

    Volunteers at the Lestonnac Free Clinic guide patients through the COVID-19 vaccination process in Orange, Calif., on March 9, 2021. (John Fredricks/The Epoch Times)

    “This is an investment in our people, our economy, and our future,” Gov. Gavin Newsom said in an April 29 statement.

    This Medi-Cal coverage extension was a part of Assembly Bill 133, which was voted into law in July 2021, following Newsom’s proposal to expand health care to low-income residents and address “health disparities and inequities, especially among populations of color” during the COVID-19 pandemic, according to the statement.

    Medi-Cal currently provides low-income individuals under the age of 25 or above the age of 65, pregnant women, and those with disabilities with free or low-cost medical and dental care.

    Until recently, Medi-Cal was only available for U.S. citizens in the state, except for refugees staying in the country temporarily.

    “We’re delivering concrete results for Californians, continuing to fulfill the promise of a Healthy California for All, and I encourage all those eligible to take advantage of these essential health services,” Newsom said.

    Looking forward, Newsom has also proposed expanding Medi-Cal coverage to about 700,000 people from ages 26 to 49, regardless of their immigration status by January 2024.

    Tyler Durden
    Sun, 05/01/2022 – 17:30

  • Buyback Blackout Period Is Over, And 10 More Reasons Why Goldman Calls The End Of The Market Carnage
    Buyback Blackout Period Is Over, And 10 More Reasons Why Goldman Calls The End Of The Market Carnage

    Two weeks ago, when looking at a recent matrix of market bull and bear cases, we asked if it was time to get bullish on stocks and concluded that the since fundamentals leaned in either direction, the answer was most likely “not yet” for one simple reason: JPM’s resident permabull, Marko Kolanovic, had just turned from modestly bearish – an extremely rare stance for him – to bullish again, urging his clients to reverse from taking profits (unclear on what exactly since he had been bullish all the way down from the market’s all time high)…

    … to buying the dip again. Meanwhile, at roughly the same time, the far more accurate strategists at Goldman’s flow desk – in this case Tony Pasquariello – had just warned that the market was likely to be well lower in several weeks time, not higher. After last week’s furious rout in the market they were right. 

    Which is why we find it worth mentioning that after correctly calling the market’s downward inflection point in April, those same Goldman folks are once again leaning bullish, and in a Friday note from Goldman Scott Rubner (which is not for mass distribution to the bank’s entire client base and instead is reserved for a handful of the bank’s top client as it indicate what the bank’s traders actually do believe, it is also available to zero hedge professional subscribers), he says that the worst is behind us and gives 11 reasons why the late April rout may have been the market bottom for the time being.

    Rubner’s argument in a nutshell: pointing to Thursday’s explosive move higher as testament of the market’s extremely negative sentiment and low positioning (which of course was followed by Friday’s rout), the Goldman trader thinks that global stocks will rally “significantly” in May as the flow-of-funds is set to improve starting on Monday (even though the closely watched 50bps rate hike FOMC meeting is due on May the 4th).

    Below we lay out Rubner’s bullish 11-point checklist in greater detail.

    • 1. US Corporates return back to the open window on Monday with dry powder. Rubner calculates $5BN of demand per day, every day until mid-June. US corporates are the largest buyer of equities in 2022 and have authorized record YTD (AAPL = $90bn; GOOG = $70bn; MSFT = $60bn; FB = $50bn, etc).
    • 2. Pensions flipped to buy given the recent outperformance of bonds vs stock. This should carry over into next week.
    • 3. S&P Index gamma turned negative on Thursday for the first time since March.
    • 4. Synthetic Short Gamma through CTA and Vol-Control strategies supply will fade over the next week (Thursday’s move will lower some of the supply expectations and Goldman’s estimates will dramatically change next week).
    • 5. Liquidity is simply not available to try to cover liquid macro. As we noted on several occasions last week [insert hyperlink to liquidity tweet], top book liquidity in the S&P 500 futures is $2.8M. This ranks in the 1st percentile in the last 10-years. This is as low as it gets.
    • 6. Sentiment is the most bearish since the market crash lows in March 2009. Rubner says that he has done “more bearish zoom calls these past two weeks, than I can recall.” The bears (AAIIBEAR) published a reading of 59.40 today. This was the highest level since March 5th 2009 (70.27). S&P500 rallied 8.54% in March 2009 and 9.39% in April of 2009. That was the generational market bottom.
    • 7. Money Market Inflows Logged a massive +$60B inflows last week, which was the largest weekly inflow since Covid 2020 (and typically another fear gauge).

    • 8. For the fixed income watchers, Goldman’s CTA models show some impressive demand. Goldman has +$20B of bonds to buy in a flat tape, but +$117B of bonds to buy in an up tape, and $37B of bonds to buy in a down tape. This should ease some of the pressure on long duration equities and largest construction of market cap.
    • 9. Goldman’s Prime Desk notes that hedge funds exposure is dismal. Gross and Net Exposure are currently at 2-year lows. And vs the past 5 years, Gross ranks in the 21st and Net ranks in the 38th. US TMT Megacap L/S ratio declined by -48% in the past 1-month. (~right before earnings)
    • 10. Everyone is short: Short leverage (with options) ranks in the 98th percentile in the last 5 years.
    • 11. New month = New Inflows. There should be some decent inflows to start May per normal rebalancing cycle in retirement accounts.

    * * *

    Rubner then does a more detailed breakdown of what the latest flows indicate for markets. We excerpt from the main points below (professional subscribers have access to the full note).

    1. Passive USA Large Cap Outflows (and resulting MOC 3:50pm imbalances): = “you ask me for money and I sell”

    • US Equity Funds registered their largest outflows of 2022.

    • b) US large cap Equity funds registered the largest outflows since 2018.

    • c) this is LIFO (last in, first out) behavior. This is where all of the new repatriated safe haven has flowed.

    * * *

    2. “Everything cross-asset outflow” – this is rare. Stocks, Bonds, and Cash all saw outflows this past week

    • You don’t see this very often. This is what we call an everything outflow. No lines saw inflows, and its back to checking accounts.

    * * *

    3. Retail Investors buyers of 0-1 DTE (days-to-expiry) puts are largest on record – does retail start buying calls again?

    • Friday’s same-day SPX were the highest dollar-volume ever traded for a single expiry on a single day
    • $225bln of puts and $160bln notional of calls traded
      • Already in 12 figures on Friday’s SPX expiration – $105bln in just the the first hour. Keep an eye on DTEs
    • Daily option volume Notional volume ($bln) traded in listed US equity options

    Final-day trading volume: Notional SPX option volume traded on the day of expiration, excluding Third Friday and end-of-month expirations

    * * *

    4. Both Professional and Retail Sentiment have reached new lows. Rules and Tools have historically marked a contrarian indicator.

    • GS sentiment indicator (SI) current reading of -2.2 is a signal of extremely light positioning and typically acts as a solid contra indicator for the market. Out of 687 weekly readings (first recording: 2/27/09), there have only been 14 instances in which the sentiment indicator was more negative (below -2.2).

    • AAIIBULL (bullish investors) reached the 9th lowest reading since 1987 (1820) observations (zeroth percentile).

    • Market returns after such extremely negative readings have been uniformly bullish, and the hit rate six months after such a reading is 100% (14 of 14 occasions), leading to a median 19% return!

     * * *

    5. Futures Positioning has been unwound and ranks in the 15th percentile over the past 10 years.

    • For context, the high futures position for 2022 was +$138.4B (January 25th ) vs. +$10B currently.

    * * *

    6. Peak Blackout is behind us. US Corporates return from the blackout window on May 2nd (Monday). The largest buyer of equities in 2022 has been out of the market for much of April and is now back.

    • 51% of the S&P 500 reported last week. This is the largest week for earnings in Q1. Corporates are slowing re-emerging from the blackout.

    • 2022 US corporate authorizations are off to the best year on record. Do they come back to buy stocks at these levels having already authorized? Do we hear about more big authorizations this week?

    • GS buyback activity last week was 2.4x the bank’s average 2021 levels – despite being in the earnings ‘blackout window.’ the bank estimates ~59% of companies will emerge by this time next week

    * * *

    7. S&P Index Gamma (no longer long) given institutional “forced hedging” of May puts – do we see monetization of puts after the big FOMC event next week?

    Dealer long gamma has been unwound, and works in both directions. This will exacerbate, not buffer moves in the same direction as the market.

    * * *

    8. Systematic Equity Supply is far smaller than some have feared given recent deleveraging.

    • Goldman calculates that CTA strategies have to sell $8B over the next 1 week and $21B to sell over the next month.
    • In an up tape, CTA strategies have up to buy $78B vs. down tape -$81B to sell. Said otherwise, they will continue to trade negative synthetic gamma in the same direction as the market

    * * *

    9. Synthetic fixed income short gamma (CTA strategies) have triggered flip levels. Does FI demand ease pressure on rate move and long duration equities?

    • Bond yields lower = SPX construction higher? This might be important chart for equity traders given the large cap tech weighting of the indices.

    * * *

    10. S&P 500 Top Book Liquidity “works in both directions”

    • Liquidity in the most liquid equity future in the world ranks in the 7th percentile in the past 10 years, and offers just $6M to trade on the screens.

    * * *

    12. Seasonals – “Sell in May and Go Away” this year? Positioning is already too low to sell from here. (30-yr look back)

    • This chart will matter if and when May inflows come back.

    * * *

    13. HF Leverage Exposure remains at cycle lows, does May the 4th become another clearing event and quick adding back of exposure?

    • Overall book Gross leverage +1.0 pts to 228.4% (5th percentile one-year) and Net leverage -0.6 pts to 72.9% (lowest since May ‘20). Overall book L/S ratio -0.9% to 1.937 (lowest since May ‘20).
    • Fundamental L/S Gross leverage +1.3 pts to 172% (6th percentile one-year) and Fundamental L/S Net leverage -1.1 pts to 49.3%, near the lowest levels since Apr ‘20.

    As Rubner concludes, “choppy and wide trading range continues but market technicals flip in favor of the bulls for may.” One thing is clear: the market can’t take much more pain without the Fed having to step in – we are talking the proverbial “flush” – no matter how much Biden berates Powell into standing to the side as stocks crash if it somehow means that inflation will shrink – and boost Biden’s approval rating – just because we enter a bear market. Incidentally, we wonder if Biden’s handlers have considered what will happen to the president’s approval rating if in additional to a stagflationary recession, the president were to also add a market crash to his list of achievements.

    Finally, for those curious how to best trade the world as envision by the Goldman flow trader, details can be found in the full note available to professional subscribers.

    Tyler Durden
    Sun, 05/01/2022 – 16:55

  • 'We're Taking Back Our Street" – Sacramento Man Barricades Street To Stop Out-Of-Control Crime 
    ‘We’re Taking Back Our Street” – Sacramento Man Barricades Street To Stop Out-Of-Control Crime 

    People are fed up with the urban utopian socialist experiment in California. One business owner barricaded a public street in Sacramento to prevent a further spillover in crime from other areas. 

    “The game is over. We’re taking back our streets,” business owner Rich Eaton told FOX40. He barricaded part of Railroad Drive to prevent the commercial area from additional car burglaries, rampant building theft, prostitution, and homeless encampments. 

    “The city’s dereliction of duty has just come to a boiling point and I’m really just begging for help,” Eaton said, adding he has complained about the out-of-control crime to the mayor. So far, he’s received no response. 

    “I paid some homeless people some money so they would leave. I fed them; I took care of them and helped them and when Railroad Drive was cleared. I put up barriers,” Eaton said.

    A person who didn’t want to be identified and works for a company on the street told the local news: “It was like walking through a working meth lab to get to work.” 

    “There’s days when they’ll be parked three-wide on the street and we can barely get by. They’ve had our gates completely blocked. I’ve pulled up and had employees waiting to get in because they were afraid to get out of their gate and punch in the code.

    “Literally a week ago from this spot to there, all the way down and around the corner there were 57 motor homes and trailers parked,” the employee said.

    Eaton said someone scaled his building last week and stole his surveillance cameras from the roof. 

    “The prostitution, the stolen cars, people meeting on the street at 3 a.m.,” Eaton said, it’s just chaos he added. 

    Sacramento responded to Eaton’s barricade with an order to stop blocking the street. 

    Business owners taking action as city governments seem unresponsive is a new emerging trend. Last year, dozens of Baltimore City businesses banded together. They collectively threatened the mayor with no tax payment because they were fed up and frustrated “with the outburst of violence.”  

    Tyler Durden
    Sun, 05/01/2022 – 15:45

  • Being A Successful Trader Is A Paradox
    Being A Successful Trader Is A Paradox

    By Alex Barrow of Macro Ops Musings

    Winners Evolve

    This will make you sit up in your chair (emphasis mine):

    In the 1990’s Harvard Business School’s Amy Edmondson performed some research to try to understand some of the qualities that make up a well-run hospital. She was not prepared, however, for one of the results her research produced. After surveying the nurses at eight different institutions, one of the things her study found was that in those hospitals where nurses reported the very best leadership team, along with great relationships with their co-workers, the number of medical errors reported was ten times higher!

    What could possibly explain this outcome?

    …In hospitals where the nurses felt safe and highly regarded, both by their peers and by their managers, the reason they reported more errors was that they felt more psychologically “safe.” Nurses in these more cohesive, well-led units made comments such as “mistakes are natural and normal to document,” and “mistakes are serious because of the toxicity of the drugs, so you are never afraid to tell the nurse manager.”

    By contrast, in those environments where mistakes were not forgiven and miscreants were punished, nurses were more likely to report that “The environment is unforgiving, heads will roll.” In other words, it was highly likely that just as many mistakes — if not more — were made in these institutions, but not reported. Instead of learning from their mistakes, these hospitals were hiding from them.

    – Don P, Peppers & Rogers Group, Does Your Company Make Enough Mistakes?

    That opener is so eye-opening it is worth repeating:

    “in those hospitals where nurses reported the very best leadership team, along with great relationships with their co-workers, the number of medical errors reported was ten times higher!”

    Think about what this implies:

    • the sheer number of hospital errors that DON’T get reported

      • the number of errors that even top hospitals make (a lot)

      • the number of errors that marginal to poorly run hospitals make (surely a lot more)

      • the number of hidden or non-reported errors that are missed completely

    An observed reporting spread of 10-to-1 suggests the hospital error base rate is remarkably high. If there are remarkably high error rates in the confines of hospitals — where medical processes are exhaustively detailed and regimented — think how much more capacity there is for error in the relatively undocumented world of discretionary trading and investing.

    And if top hospitals report an order of magnitude more errors than second or third-rate peers… while surely having a lower absolute number of errors (because top-performing institutions are better run)… think of the overwhelming number of errors sloppy performers must make… and by simple logical extension, the vast quantity of errors marginal traders and investors must be making over and over again, every single day.

    (The collective presence of investor error fuels real trading opportunity, by the way, for the same reason errors at the poker table are profit opportunities for the skilled. Difference being, in a poker game you typically only have one opponent on the other side of a big hand. In a big trade you can have myriad investors, who have collectively all made the same mistake, pooling profits in your pocket by way of their positioning.)

    “Heads Will Roll”

    This fuels a delicious irony: If Edmondson’s findings translate to traders, one of the strongest indicators of performance quality is the frequency with which one admits and reports weaknesses or mistakes rather than hides them. This is 180 degrees from the attitude of “I never make mistakes ever.”

    When interviewing a prospective money manager, then, what you want to hear is: “We’ve messed up plenty of times but learned a lot, and continue to learn.” If instead you get some variant of “We’ve always been perfect and will continue to be perfect,” walk away fast.

    Why is it, then, that top performers are more willing to admit mistakes? Perhaps because lesser performers operate out of fear:

    • fear that bosses will judge them harshly
      • fear that clients or investors will judge harshly (or even pull funding)
      • an inaccurate self-judging compass (the perception that all mistakes are bad)
      • an ego-preserving data distortion field (fear of ego being bruised or even shattered)

    Unfortunately, bad bosses and bad clients actually justify such fear in all too many cases. The notion that “heads will roll” is the result of subconscious signals delivered and received. Within organizations, bad leaders really do “shoot messengers”… confuse useful feedback with negative performance… fail to distinguish between luck and skill… fail to cultivate small improvements… R&D expansion into adjacent areas… better results monitoring… and so on.

    In the investment world, bad clients are even worse: Rewarding slickly polished presentations from “empty suits”… chasing performance over a cliff… being emotionally averse to inevitable flat periods… disregarding the value of risk control… preferring artificial smoothness to organic robusticity… etcetera ad infinitum.

    (The answer to the “heads will roll” problem is tongue-in-cheek but effective: Avoid bad bosses and clients! If someone with a functional lack of understanding and/or an obtuse point of view has the ability to impact your future in a negative way, change your situation to remove that person’s impact — or at least minimize it — as soon as you can…)

    Mistakes vs Weaknesses

    For mechanical traders, and discretionary traders who long ago check-listed their basic processes, it is also important to distinguish between “mistakes” and “weaknesses” — and to recognize that reporting and studying a “weakness” can have the same beneficial impact as a mistake.

    Take the practice of honoring one’s risk points, for example, or always following a daily homework routine. For traders with a certain level of experience and professionalism, these standards are virtually never deviated from. For a seasoned and disciplined trader, mistakes defined as “a deviation from established best practices” might happen once in a quarter, or even less frequently than that (e.g. less than 2% percent of the time).

    Even still though, weaknesses can be treated as a form of mistake — and every process that crosses a minimum complexity threshold – like most any trading or investing methodology — has potential weaknesses embedded that can be observed, reported on and contemplated: Flaws in the structure of the process… potential adjustments to variable component weightings… adjustments to the step-by-step pre- and post-analysis process… the shoring up of knowledge gaps or re-tooling of assumptions… and so on.

    An Emphasis on Culture

    At Macro Ops we are keenly aware of mistakes — and “weaknesses,” which apply even when processes are down cold — and as a result have a very strong emphasis on culture.

    Institutional culture is real and powerful. You cultivate it, establish it, and strengthen it via what you do and how you do it, day after day. Think of the winning habits, processes and mindsets a successful person relies on until they are “second nature.” Then expand those mental models, ways of thinking and doing and interpreting, across a team, an organization, an entity of multiple individuals, where values and step-by-step actions, “ways of doing things” are passed on to anyone new who comes through the door. That’s culture.

    As the size of our research team grows — and we are hiring in 2021 by the way! — an emphasis on growing and maintaining the MO culture becomes ever more important. This is not just because culture contributes massively to consistent outperformance (though it certainly does)… but because the quality of your culture determines the rate at which you evolve.

    And the rate at which you evolve goes back to errors, weaknesses and mistakes…

    EVOLUTION, MORPHEUS, EVOLUTION

    Think of the following logic chain:

    • Error Data (Mistakes + Weaknesses) = Constructive Feedback

      • Constructive Feedback = Opportunity to Analyze and Refine

      • Analyzing and Refining = Incremental Improvement

      • Incremental Improvement = Micro-Evolution

      • Micro-Evolution over extended time cycles = Macro-Evolution

      • Macro-Evolution = Smarter, Faster, Deeper, Stronger

      • Smarter, Faster, Deeper, Stronger = DOMINATE

    To approach from another angle:

    • Natural evolution = serendipitous impact of randomly distributed trial and error

      • Accelerated evolution = guided impact of shaped and observed trial and error

      • Trial and error = experimentation, hypothesis, “useful failures” etc

      • Which cycles back around to errors, weaknesses etc as “Constructive Feedback”

    The trading organizations that deliberately nurture a “culture of embracing mistakes” will receive a much higher volume of constructive feedback… and will further be better positioned to respond and hypothesize… in turn allowing them to “analyze and refine” at a faster rate… allowing them to improve and evolve at a faster rate than their peers.

    In trading and investing, this is huge.

    But individuals can apply these ideas too. You don’t need a team to create a culture (though it certainly helps). You can embrace mistakes on your own by asking questions like:

    • Am I a vigilant observer of my trading and investing process?

      • Do I diligently record my errors and mistakes?

      • Do I seek out and contemplate potential weaknesses?

      • Do I probe and test for weaknesses as a matter of habit…

      • …not to bring myself down, but to make my process stronger?

      • Do I constantly seek to analyze, refine and evolve as a matter of survival?

      • Do I give myself permission to acknowledge weaknesses and still feel like a winner?

    Cheerful vs Zero Tolerance

    Keep in mind, too, that there is an important balance here. Being a winner means walking the line between tolerating mistakes — responding to them cheerfully and constructively — and ruthlessly stamping them out with a “zero tolerance” attitude.

    At Macro Ops, our general mode of operation is a response of positive urgency to fresh mistakes we uncover. When the observation bell goes off, we “halt the assembly line” and ask questions like:

    • What was the origin of this mistake (or observed weakness)?

      • Did it come from a gap in process, misread of information, judgment error etc?

      • Was it something subtle and nuanced, or big and obvious?

      • Does it fall under research, execution, strategic allocation, or something else?

      • How do we extract maximum tuition from this?

      • Should a specific step-by-step aspect of the process be modified?

      • Should a conceptual or philosophical principle be explored (or re-explored)?

      • How can we best evolve and strengthen from this?

      • How do we use this to become more awesome?

    We can’t claim originality in this. The most successful organizations in the world, be they trading-focused or something completely different, all have some variant of the same mindset.

    For instance: The following quotes are from Ray Dalio, the founder of Bridgewater (one of the most successful hedge funds of all time):

    More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively.

    I believe the biggest problem humanity faces is an ego sensitivity to finding out whether one is right or wrong and identifying what one’s strengths and weaknesses are.

    Your ability to see the changing landscape and adapt is more a function of your perceptive abilities and reasoning abilities than your ability to learn and process quickly.

    Recognize that you will certainly make mistakes; so will those around you and those who work for you. And what matters is how you deal with them. If you treat mistakes as learning opportunities that can yield rapid improvement if handled well, you will be excited by them.

    If you don’t mind being wrong on the way to being right, you will learn a lot.

    Of course, there is also a certain class of mistakes we have “zero tolerance” for — things like:

    • Neglecting risk or failing to follow a risk management protocol

      • Blatantly neglecting an established process step

      • Any type of “phoning it in” or extended delivery of subpar effort

      • Being “mentally hard of hearing” — not paying attention to repeated instruction

      • Making the same mistake repeatedly (failing to learn from repeated trials)

    In other words, some mistakes are understandable and even exciting — as Ray Dalio puts it — because their presence indicates forward evolution and opportunity for advancement on the capability frontier.

    But other mistakes — the ones that go back to well-covered areas, well-developed process, or issues of moral code and doing one’s best work — represent serious internal issues and thus receive a brutally harsh response. (We aren’t afraid to lose our tempers.)

    The Circle of Competence

    In evaluating mistakes, you can picture acceptable vs unacceptable in the context of a circle — a “circle of competence.”

    Mistakes on the circumference of the growth circle are acceptable, and even desirable… if they represent intelligent efforts at expanding competence. The only way you make the circle bigger is by evolving your capabilities… and you do this via thoughtful trial and error, risk-adjusted tinkering and refining, allocations to R&D, and so on.

    Mistakes deep within the circle are unacceptable, however, because they represent failure in areas already covered… or failure in areas that should be covered… or worse yet, a failure of internal structure as relating to things like capacity for hard work, commitment to accuracy, moral commitment to excellence, and so on.

    Furthermore there are at least two competence circles that matter: The circle for the individual team member, and the circle for the organization as a whole. Efforts to expand the organization as a whole — via contributions to team knowledge or net capability — are appreciated and rewarded. There are many “good failures” in respect to this endeavor, because the potential ROI (return on investment) is so long-term beneficial. (This is a good acid test of leadership by the way. Does the leadership “get” this? Do they embrace it as a directive?)

    On the individual team member side, competence circles should match up with experience levels and expectations. A senior trader or analyst with 10+ years of experience will be expected to have a much larger competence circle than, say, a fresh analyst with lots of talent but only a modicum of seasoning. For this reason a certain type of mistake or weakness may be acceptable in one team member but not in another, again relative to situational differences.

    Altogether this unites to create an enlightened (in our opinion) and goal-oriented approach to evaluating mistakes and weaknesses: We want to maximize top performance, minimize “unforced errors” and low-grade process failures, and cultivate a healthy expansion of competence for both individual team members and the organization as a whole. Mistakes made in alignment with this goal are not only tolerated but appreciated — “winners evolve” is our short and sweet motto, and it applies across the board. Mistakes of the unacceptable kind, if made too frequently, result in a friendly parting of the ways (so as to avoid team resentment and “Full Metal Jacket” treatment).

    Confidently Humble

    In many ways, being a successful trader is a paradox. You must develop a deep sense of confidence in your methodology and talent, yet remain ever humble and flexible. You have to trust yourself, but also know when to intelligently doubt yourself — and have no fear of doing so. You need a profound unshakeable faith in who you are and what you can do… yet at the same time maintaining the attitude of the humble student, the raw beginner, the white belt always ready to learn.

    Getting this mix right is also the key to personal evolution and incremental improvement, because evolution itself is such an iterative, trial-and-error driven process (and thus a reflective / contemplative process).  It’s not enough to get your hands dirty and fall on your face every so often. Having fallen, you must have the presence of mind to put your ego aside… objectively examine your weakness or mistake… and then put in the elbow grease of analyzing, and intelligently responding to, the data born of your stumble.

    None of this is rocket science. But it is harder than it sounds… harder even than rocket science in some aspects… and thus represents a golden opportunity, because so few can do it! The need for ego preservation is a massive block to trading in so many ways — even among people who appear “humble” on the outside, yet cannot apply a “culture of embracing mistakes” on the internal level.

    Tyler Durden
    Sun, 05/01/2022 – 15:10

  • Biden Price Hike: Most Americans Blame US President For Higher Gas Prices
    Biden Price Hike: Most Americans Blame US President For Higher Gas Prices

    A majority of Americans still don’t believe the Biden administration’s ham-fisted attempts to shove the “Putin’s Price Hike™” narrative down our throats.

    According to a new Rasmussen poll, when asked whether Biden or Russian President Vladimir Putin is to blame for higher fuel prices, “76% of Republicans think Biden bears most responsibility for higher fuel prices, as do 24% of Democrats and 54% of voters not affiliated with either major party.“

    What’s more, 84% of likely US voters believe the rising price of gasoline, home heating oil and other petroleum products is a ‘serious problem.’ 61% say it’s a ‘very serious problem.’

    And when did the vast majority of this inflation occur? Pre-Ukraine.

    Rasmussen’s findings echo those from several weeks ago, as NBC’s Tom Costello reported on “The Today Show” that people aren’t buying the Putin Price Hike narrative.

    “President Biden is trying to label this Putin’s price hike. Well most Americans, according to an NBC News poll, are not buying that. Only 6% blame Putin; most believe that President Biden’s policies are very much to blame.“

    And in March, a Quinnipiac University poll revealed that more Americans blame Biden than the Ukraine invasion or corporate greed for the rise in gas prices.

    Forty-one percent of those polled say the Biden Administration’s economic policies are more responsible for the recent rise in gas prices.

    Two other factors tied for second place at 24% each. The first was the war in Ukraine and resulting sanctions against Russia, while the second factor was oil companies charging more. -WCSC, Mar. 30

    What was that, Joe?

    That said, talk to us about the cost of energy when Putin shuts off gas to Europe.

    https://platform.twitter.com/widgets.js

    Tyler Durden
    Sun, 05/01/2022 – 14:35

  • Diesel For Dinner
    Diesel For Dinner

    Via Doomberg Substack,

    “Governing a great nation is like cooking a small fish – too much handling will spoil it.” – Lao Tzu

    The words edible and eatable are often used interchangeably but embedded within their respective definitions is a distinction that makes an important difference. Edible means “safe to eat,” whereas eatable means “pleasant to eat.” A variant of the word eatable is delicious, commonly defined as “highly pleasant to eat.” Delicious certainly sounds more enticing than highly eatable, a phrase nobody would use to compliment an exquisite meal crafted by a professional chef. We find such linguistic nuances pleasing.

    Whether the balance of calories a person consumes is edible, eatable, or delicious depends on where they sit on Maslow’s hierarchy of needs, a concept we covered at length in a piece we wrote last July called Why Are Cows Sacred?  For those at the base of the pyramid, the struggle to consume enough edible food just to see another sunrise defines much of their existence. At the top of the pyramid sit those fortunate souls who can afford to cook delicious meals with fresh ingredients, eat at fine restaurants, or even hire a personal chef to tend to their every dietary indulgence.

    At the molecular level, the distinction between edible and inedible can be subtle. The rearrangement of a few atoms within an otherwise similar chemical structure can make the difference between satiation and a trip to the emergency room.  Prior to the advent of the modern chemical and energy industries, humanity leveraged animal and plant byproducts to create many of the functional materials used in daily life, making the tradeoff between food and other needs a more visceral one than it is today. The edible parts were eaten, and the inedible stuff – presumably identified through an unfortunate series of trial and error experiments – was converted into other useful things or burned to create energy.

    Armed with humanity’s mastery of chemistry, we can now rearrange atoms with astonishing specificity at an unimaginable scale, pushing billions of people further up Maslow’s hierarchy than they would otherwise be. In addition to using fossil fuels to create most of the materials that surround us, we leverage them to produce fertilizers, herbicides, fungicides, and other inputs into the farming process, boosting crop yields to levels once thought impossible. We also synthesize mountains of edible ingredients directly from oil and gas. Touring a modern food processing factory would seem almost indistinguishable from a specialty chemical plant, mostly because they aren’t all that different.

    While it makes perfect sense to leverage our bounty of fossil fuels and ability to manipulate them at the molecular level to increase global food abundance, going through the effort to grow food only to turn around and burn it for energy seems less than ideal. In a controversial piece we wrote in January titled “In Praise of Corn Ethanol,” we put forth a theory that the adoption of corn ethanol as a mandated additive to gasoline was a scheme to coverup one of the greatest environmental scandals of the past century: the use of tetraethyl lead as an anti-knock agent. While some readers interpreted our piece as supporting this policy – undoubtedly because of the title – our primary purpose was to highlight the ugly history that got us to the current situation, and how it was predominantly a dirty political compromise. In hindsight, “Why Corn Ethanol is a Thing” might have been a better title.

    No such compromise underpins the decision to use foodstuffs as replacements for diesel, a policy that will make the unfolding global food crisis substantially worse if it is not soon overturned.

    When a barrel of oil is refined, it is separated into various products using the different boiling points of its components. Gasoline boils at a lower temperature than diesel and represents about 43% of each barrel of oil. Diesel makes up approximately 27%, with the other 30% destined to become heating oil, jet fuel, asphalt, and other important materials. Because of its higher energy density per gallon and the efficiency of engines designed to use it, diesel is a desirable fuel, especially for long-haul trucking.

    Trucks at the pump | Getty Images

    Unfortunately for those near the bottom of Maslow’s pyramid, many cooking oils – liquid fat isolated from various crops used extensively in frying, baking, and other types of food preparation all over the world – have a molecular structure quite similar to that of diesel. It does not take much chemical magic to transform previously edible cooking oils into workable substitutes for the valuable fuel. Now that the environmental lobby has convinced government officials worldwide that “renewable carbon content” is prima facia a desirable thing – a fallacy that deserves its own Doomberg piece – various mandates exist to literally take food out of the mouths of the hungry and pump it into our trucks for burning. For the planet, and whatnot.

    The first commercially relevant incarnation of a diesel substitute derived from crops is a product known as biodiesel. Oils derived from palm, sunflower, soybean, rapeseed, and castor are used as inputs, to name a few, and they are reacted with methanol (derived from fossil fuels) in a chemical process known as transesterification. Transesterification generates a product with higher oxygen content than standard diesel. This presents some challenges, including poor low-temperature performance, increased microbial growth, corrosion of engine parts, and higher shipping costs (biodiesel cannot leverage existing pipelines that are used to transport regular diesel). Much like corn ethanol, biodiesel is blended with regular diesel at concentrations between 2-20% before being marketed. Despite these limitations, government mandates have motivated farmers the world over to redirect a sizable chunk of their crops from the grocery store to the gas station.

    Nearly all of the challenges with biodiesel have been overcome with the recent development of renewable diesel, a material synthesized by hydrotreating cooking oils. Here’s how the US Energy Information Agency (EIA) describes the differences (emphasis added throughout):

    “Renewable diesel is a biomass-based diesel fuel similar to biodiesel, but with important differences. Unlike biodiesel, renewable diesel is a hydrocarbon that is chemically equivalent to petroleum diesel and can be used as a drop-in biofuel that does not require blending with petroleum diesel for use…

    Because renewable diesel is a drop-in fuel, it meets ASTM D975 specification for petroleum diesel and can be seamlessly blended, transported, and even co-processed with petroleum diesel.”

    Image credit: iStockPhoto / Lori Hays

    To the truckers forced to meet renewable carbon content mandates, renewable diesel is a godsend. It requires no change on their part, is indistinguishable from regular diesel, and allows them to proudly proclaim their green bonafides. To the companies who produce it, renewable diesel is a government-mandated financial pot of gold. The US Environmental Protection Agency (EPA) issues valuable renewable identification numbers (RINs) to track compliance with various mandates and to stoke production. There’s also a national $1-per-gallon tax credit to further incentivize producers.

    While support at the federal level has been important, the real driver for renewable diesel adoption has been the State of California. Through its low-carbon fuel standards (LCFS) program, credits currently trading for $115 per carbon ton are being issued, and renewable diesel is now the largest source of incremental credits. This is before the real capacity to produce renewable diesel comes online.

    Where will all this renewable diesel come from? In the US, soybean oils are the main input, and it should come as no surprise that planting strategies are being quickly modified to produce more of it. This quote from an industry consultant frames the magnitude of the upcoming disruption well:

    “The dramatic development of the U.S. renewable diesel industry is similar to how ethanol changed the U.S. corn industry from 2007 to 2010, says Dan Basse, president of AgResource Company. But he believes renewable diesel could be more disruptive.

    ‘We are calling for 90.5 million soybean acres in 2022 versus this year’s 87 million, and that just gets us started in meeting renewable diesel demand,” he says. “Then we’d need to increase soybean acres by 5 million to 7 million each year. We have to top 120 million acres of soybeans to meet the growing demand for renewable diesel.’”

    With the force of the government’s thumb on the scale of demand compounding pre-existing inflationary pressures hitting farmers, the price of soybeans has soared to fresh all-time highs. At the time of this writing, soybeans trade for $17 per bushel, more than double the price seen just two years ago. Unless these policies are unwound, it is difficult to imagine a scenario where positive price momentum abates.

    In a piece we wrote last October called Starvation Diet, we warned that the unfolding energy crisis would trigger a global famine, a process that would be exacerbated by protectionism. Here’s a key passage:

    “We’ve written extensively about how the market for energy in Europe broke and how the ripple effects will snap through our delicate supply chains like a whip. When the supply of critical goods goes short, countries implement protectionist policies in a futile attempt to minimize the impact at home. A cascading series of retaliatory moves usually follows, leading to economic vapor lock. We are seeing that pattern play out now in agriculture.”

    Although we take no joy in being proven right in this regard, more evidence of our prescience emerged last week when Indonesia shocked the world by banning all exports of palm oil. Cooking oils can be substituted for each other and price pressures on one oil inevitably puts a bid under the others. Here’s how The Guardian describes the situation:

    “The price of edible oils such as soyoil, sunflower oil and rapeseed oil is expected to rise after Indonesia announced a surprise export palm oil ban, experts have warned.

    Major edible oils are already in short supply due to adverse weather and Russia’s invasion of Ukraine. The move by Indonesia to pause exports will place extra strain on cost-sensitive consumers in Asia and Africa hit by higher fuel and food prices.”

    The magnitude of this ban cannot be overstated. According to data from Statista, palm oil accounted for 35% of all cooking oil produced last year. Indonesia is responsible for a staggering 60% of global palm oil production. The blast waves emanating from this explosive move will be felt the world over, most acutely by those already on the brink that can least afford to react. Bluntly, people are going to starve.

    In the face of a global energy crisis, the war in Ukraine, food shortages, and rampant inflation, does it make sense to be redirecting so many acres of valuable cropland to make renewable diesel, a fuel we can easily and directly drill for domestically? Do our policymakers understand the interconnected nature of these markets, and how forcing a strong link between diesel and soybeans creates a tunnel through which the contagion of crisis in one market bleeds directly into the other? Imagine how grotesque this spectacle must seem to the most vulnerable among us. While they scramble to secure enough edible food to survive, our elite know-it-alls gorge themselves on the most delicious hors d’oeuvres the cocktail party circuit can provide. Through either shocking ignorance or callous indifference, they convince themselves they are saving the planet.

    Saving the planet for who, exactly? The poorest citizens on Earth? Nah.

    Let them eat diesel.

    *  *  *

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    Tyler Durden
    Sun, 05/01/2022 – 14:00

  • New COVID Bill Fines Parents For Unvaxxed Kids And Doubles Income Taxes 
    New COVID Bill Fines Parents For Unvaxxed Kids And Doubles Income Taxes 

    An absurd COVID-19 bill by radical leftist Road Island Senator Samuel W. Bell says that residents who refuse the vaccine and its booster shots are subjected to fines and pay more income tax unless they receive an exemption. 

    Bell introduced Rhode Island Senate Bill S2552 on March 1. As of last week, the bill had not been passed into law is currently in review by the Senate Health and Human Services committee. 

    S2552 states eligible Rhode Island residents would have to be vaccinated against COVID. If they reject, they could face a $50 monthly fine and pay double the state income tax. There are also fines for unvaccinated children under the age of 16 that would be imposed on the parents. Text from the bill reads:

    This act would mandate all residents sixteen (16) years or older to be vaccinated against COVID-19. If a resident is under sixteen (16) years of age, the resident would be required to be immunized against COVID-19, with the responsibility for ensuring compliance falling on all parents or guardians with medical consent powers.

    Additionally, any person who violates this chapter would be required to pay a monthly civil penalty of fifty dollars ($50.00) and would owe twice the amount of personal income taxes.

    Talking about the bill, Bell told the Boston Globe:

    “The reason I introduced the bill is we have a crisis with the pandemic.

    “Thousands of Rhode Islanders have died. I’ve had really painful calls from constituents who can’t go to the store because they’re immuno-compromised, who have lost loved ones to this pandemic, who are really ill and not fully recovered, suffering long-term effects.”

    Bell has faced harsh criticism for the introduction of the bill. He tweeted this email he received from one angry Rhode Islander. 

    Subjecting adults to fines and more taxes for not being vaxxed or even their kids not being vaxxed is a significant overreach by government. Also, the vaccine is not risk-free, especially for children.

    Dr. Robert Malone, a virologist and immunologist who has contributed to the technology of mRNA vaccines, recently said: “Think twice before you vaccinate your kids. Because if something bad happens, you can’t go back and say, ‘whoops, I want a do-over.'” 

    Tyler Durden
    Sun, 05/01/2022 – 13:25

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