• A Self-Loathing Ruling Class Cannot Endure
  A Self-Loathing Ruling Class Cannot Endure

  Authored by Conrad Black via AmGreatness.com,

  The U.S. now has an official regime of lies, supported by an almost worthlessly dishonest media, and scores of millions of Americans brainwashed into the false view that they live in an evil country…

  

  Not every aspect of the onslaught of self-hate that has broken over America, warped its media, and turned most of the academy – and even apparently, most of its elementary and secondary schools – into centers of reorientation designed to convince Americans their national past is loathsome hypocrisy, is bad. Every country has a national mythos, and the larger, more complicated countries have relatively elaborate, conventionally agreed-upon versions of the raison d’être of their nationalities. In the case of the United States, there have always been some soft points in this rationale, and to a slight extent, there may be some merit in addressing them. 

  Despite the brilliant opening and ending of the Declaration of Independence, the indictment of King George III as a virtual Nuremberg Trial defendant who was trying to destroy America and indiscriminately kill its people, while dabbling in other atrocities such as the propagation of the Roman Catholic faith throughout the 13 colonies (an insane allegation—Jefferson was referring to the Quebec Act, which assured that population the practice of their language, religion, and civil rights) was an outrage. George III was a limited monarch who suffered from porphyria, but he was far from an evil man (and he was an arch-Protestant papaphobe).   

  The facts were that Americans really had no more civil rights after the Revolution than before, nor measurably more civil rights than citizens of England, Switzerland, most of the Netherlands, and parts of Scandinavia. But they had a resident government. Unlike almost all the nations of Europe and East Asia, in a world of only about 25 sovereign countries, the United States did not have a language of its own, and its founders, with great ingenuity, and eloquence invented for it the vocation of freedom and opportunity. The lore was not of the past but of the future. And with the dramatic emergence of the Americans, facilitated by Franklin’s stupendous feat in persuading the absolutist French monarchy to go to war on behalf of secessionism, democracy, and republicanism, the eyes of the world were on America and have never ceased to be on America these 245 years.    

  There was from the start the terrible problem of slavery, which belied the assertion that “all men are endowed by their Creator with certain inalienable rights.” The Civil War was conducted in the North to preserve the Union, and only the immense political dexterity of Abraham Lincoln achieved the approval of the emancipation of the slaves as a war aim, in part to stir unrest within the Confederacy.

  Segregation continued to be enforced with an iron fist in the South and not infrequently in parts of the North as well, for over a century. The South was completely defeated but had received credit for 60 percent of the slave population in establishing their congressional and Electoral College representations before the war and henceforth received 100 percent credit for the African Americans who, though nominally emancipated, still could not vote in the South.

  When Franklin D. Roosevelt was hassling Winston Churchill in the midst of World War II about granting independence to India and suggesting texts from the founding of America as models to use, Churchill was well within his rights in saying to his entourage (although, unfortunately, he did not say it to Roosevelt) that he would take his solicitude for the vast masses of India more seriously if he could pass an anti-lynching law in his own Congress.  

  A Question of Scale

  If the Americans had resisted the temptation to revolution, then as Benjamin Franklin had predicted, by approximately the time of the Civil War, Americans would have been preeminent in the entire British world: a vast expanse of South Asia, Australasia, Africa, and all of North America north of the Rio Grande. There would have been much less pressure for independence from such a formidable empire, and the power and influence of the Americans this past century would have been much greater even than it has been. It is also doubtful that Germany or Japan would ever have dared warfare with such an immense power.

  Even to those who wish America well, the whole argument of American exceptionalism became threadbare and tiresome decades ago, and is entirely now a question of scale, a measurement by which China threatens the United States more seriously than has any other country in over a century. 

  One of the most nauseatingly persistent American delusions is that the American justice system is one of the best in the world. As I have written here and elsewhere, it is an appalling, disgraceful, terribly unjust 360-degree cartel for the avaricious legal profession, and on the criminal side, it has been so undermined by the corruption of the plea bargain system that it is essentially the right of prosecutors to suborn false inculpatory testimony with no danger of sanctions for their misconduct.

  The result is that the United States has six to 12 times as many incarcerated people per capita as other comparable large prosperous democracies: Australia, Canada, France, Germany, Japan, and the United Kingdom. Its conviction rates are much higher than almost all of these countries and so are its crime rates. Millions of innocent people are convicted and millions of innocent people are over-sentenced and millions are ground to powder in the conveyor belt to the bloated and corrupt American prison system. Everyone who is acquainted with the facts is aware of this. 

  The Bill of Rights guarantees of due process, a grand jury as assurance against capricious prosecution, an impartial jury, no seizure of property without just compensation, access to counsel of choice, prompt justice, and reasonable bail have been practically expunged.

  But with all that said, the flag-waving, anthem-singing, traditional pride in America was and remains substantially justified.

  All nations have somewhat delusional self-images and though the American star system elevates many who are not stars, the current eruption of Americophobia is vastly excessive, utterly despicable, cannot remotely be sustained, and is propagated, not just by the faddishly and aggressively ignorant, but also by disturbed and often wicked people. 

  Self-Hatred as Virtue 

  America’s exceptionalism has been diluted by America’s success: once the United States realized that it was in a Cold War, it defined this as a life and death struggle between totalitarian communism and the free world, never mind that the free world included the dictatorships of Latin America, the House of Saud, Franco’s Spain, Salazar’s Portugal, Syngman Rhee’s South Korea and many other dubious claimants to the title of champions of freedom. Most of them became democracies and the world must never forget nor fail to be grateful for the fact that the United States is chiefly responsible for the spread of democracy and the free market. 

  No nation in history has made the effort the United States has to eliminate racial discrimination and to assist minorities bootstrapping themselves up to parity. Whatever liberties may have been taken in national rhetorical puffery, there has never been anything remotely like America’s rise from a few million colonists in two long lifetimes after the Revolutionary War to, as Churchill said in his eulogy of President Roosevelt to a position of “might and glory . . . never attained by any nation in history.” 

  Possessed of a nuclear military monopoly and half the GDP of the world, the United States turned its energies to putting western Europe and Japan back on their feet. The attempt of the American enemy within to portray the United States as an evil racist enterprise based on slavery is a blood libel on the same level of pernicious mendacity as the Protocols of the Elders of Zion. The right of educators to teach falsely sourced self-hatred and of the media’s righteous replacement of reporting with subversive and defamatory advocacy is now proclaimed as a long-repressed virtue. It does not fall far short of treason and Joe Biden will pay for his endorsement of the false charge against his country of “systemic racism.”   

  The United States now has an official regime of lies, supported by an almost worthlessly dishonest media, and scores of millions of Americans have been brainwashed into the false view that they live in an evil country. This lie will not succeed because everyone in America can see that it is not true. 

  Most Americans are reasonable and fair-minded people most of the time, and their numbers, their patience, and the righteousness of their not-uncritical faith in and love for their country will ultimately prevail. There was no excuse for the secretary of state to turn a meeting with the Chinese on American soil into a confessional for a cringe-worthy recitation of America’s faults. Despite everything, America remains a proud country with much to be proud of, and no person nor any nationality can stand unlimited, unjustified, self-loathing. It will end sooner than we dare think, and it will take down its ghastly and contemptible preceptors with it, including the dismal Pharisees of this administration.

  Tyler Durden
  Sun, 04/11/2021 – 00:00

• Visualizing The Plunging Purchasing Power Of The US Dollar
  Visualizing The Plunging Purchasing Power Of The US Dollar

  The purchasing power of a currency is the amount of goods and services that can be bought with one unit of the currency.

  For example, one U.S. dollar could buy 10 bottles of beer in 1933. Today, as Visual Capitalist’s Govind Bhutanda notes, it’s the cost of a small McDonald’s coffee.

  In other words, the purchasing power of the dollar – its value in terms of what it can buy – has decreased over time as price levels have risen.

  

  Tracking the Purchasing Power of the Dollar

  In 1913, the Federal Reserve Act granted Federal Reserve banks the ability to manage the money supply in order to ensure economic stability. Back then, a dollar could buy 30 Hershey’s chocolate bars.

  As more dollars came into circulation, average prices of goods and services increased while the purchasing power of the dollar fell. By 1929, the value of the Consumer Price Index (CPI) was 73% higher than in 1913, but a dollar was now enough only for 10 rolls of toilet paper.

  

  Between 1929-1933, the purchasing power of the dollar actually increased due to deflation and a 31% contraction in money supply before eventually declining again. Fast forward to 1944 and the U.S. dollar, fixed to gold at a rate of $35/oz, became the world’s reserve currency under the Bretton Woods agreement.

  Meanwhile, the U.S. increased its money supply in order to finance the deficits of World War II followed by the Korean war and the Vietnam war. Hence, the buying power of the dollar reduced from 20 bottles of Coca-Cola in 1944 to a drive-in movie ticket in 1964.

  By the late 1960s, the number of dollars in circulation was too high to be backed by U.S. gold reserves. President Nixon ceased direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.

  More Dollars in the System

  Money supply (M2) in the U.S. has skyrocketed over the last two decades, up from $4.6 trillion in 2000 to $19.5 trillion in 2021.

  The effects of the rise in money supply were amplified by the financial crisis of 2008 and more recently by the COVID-19 pandemic. In fact, around 20% of all U.S. dollars in the money supply, $3.4 trillion, were created in 2020 alone.

  How will the purchasing power of the dollar evolve going forward?

  Tyler Durden
  Sat, 04/10/2021 – 23:30

• Joe Biden: America's Biggest Gun Salesman
  Joe Biden: America’s Biggest Gun Salesman

  Op-Ed by Roger L. Simon via The Epoch Times

  With his new – most likely unconstitutional – executive orders regarding weapons, Joe Biden is cementing his place as America’s leading gun salesman…

  

  Gun sales have been wildly up all year. He just pushed them to a new level.

  It’s almost as if he were marketing director for Smith & Wesson.

  (As America’s president he might have made that clear to prevent people from running out to buy yet more Austrian-made Glocks when the locally-produced version is arguably as good.)

  The hypocrisy of this doddering man who threatened to punch out Donald Trump is nothing short of monumental.

  Any sentient being—not a slavish, ultra-conformist Democrat who no longer thinks for him or herself—has been alarmed at the escalating violence in our streets.

  Murders are way up. Assaults are way up. Police protection way down.

  This is all thanks to our Democrat friends many of whom seek to defund and/or handcuff the police, even, in some cases, after the latest group of self-described revolutionary maniacs has decided to torch their house.

  But the president wants to disarm us. Hello, Germany 1938.

  The measure of this hypocrisy can be seen in the treatment of those who breached the Capitol on Jan. 6—many of whom are still incarcerated without bail, including those with no criminal record whatsoever, none of whom (nota bene) had guns of any sort, not even a Derringer tucked in a boot—compared with the treatment of Antifa and Black Lives Matter demonstrators.

  The latter, always thugs in the Antifa case and too often thugs in the BLM case, almost always get off and got off “Scot Free” after committing true acts of violence and mayhem that dwarf anything that happened in the Capitol.

  We can easily mock the usual liberal virtue signaling about guns going on here, but one of Mr. Biden’s proposals is particularly alarming because superficially attractive to many.

  He has directed the Department of Justice to publish model “red flag” legislation for the states. Those are laws that allow family members, police, and possibly others to ask a court to bar an individual from possessing firearms if he or she seems to be dangerous to themselves or others.

  We might call this the “Stasi Law” because it encourages us to snitch on each other in the manner of East Germany under their Stasi, the most ruthless of all communist intelligence agencies before the fall of the Iron Curtain.

  If you have seen the brilliant German film “The Lives of Others,” you know how it worked. (If you haven’t, download this movie now. It’s the most relevant political film made in the last twenty-five years.)

  And speaking of the cinema, it used to be in the old Hollywood movies the snitch was considered an oily villain who got his just deserts. Unamerican, really. Nowadays, we’re headed in the opposite direction, not just in film, but in our society.

  This “snitchery” is already here. I recently heard the story of some Tennessee people who were warned by their own parents not to visit them in Pennsylvania because the parents’ neighbor would report a Tennessee license plate in their driveway—such interstate fraternization being verboten (I assume we all know that German word from World War II flicks) in Pennsylvania because of COVID.

  The possibilities for similar behavior with “red flag” legislation are endless—children ratting on their parents and so forth—just as are the ramifications from vaccination passports.

  We live in a different world.

  In case you want to buy Smith & Wesson stock, it trades on the NASDAQ as SWBI. It’s down today a touch. You know what they say—buy on the dip.

  Roger L. Simon is an award-winning novelist, Oscar-nominated screenwriter, co-founder of PJMedia, and now, editor-at-large for The Epoch Times. His most recent books are “The GOAT” (fiction) and “I Know Best: How Moral Narcissism Is Destroying Our Republic, If It Hasn’t Already” (nonfiction). He can be found on Parler as @rogerlsimon.

   

  Tyler Durden
  Sat, 04/10/2021 – 23:00

• Missouri Ghost Town Swarmed With People After Viral TikTok Video
  Missouri Ghost Town Swarmed With People After Viral TikTok Video

  Video of an abandoned Missouri resort town filled with dilapidated mansions has gone viral on TikTok as local law enforcement warns people to stay away. 

  Near Table Rock Lake in Branson, Missouri, is a 900-acre project, called Indian Ridge Resort, which held huge promises when it was partially constructed a little more than a decade ago. The ambitious $1.6 billion resort went bankrupt around the Great Recession of 2008 and has been dormant ever since. 

  However, the deserted resort has come back to life after a TikTok user posted a video of what appears to be a spooky ghost town.

  The video has gained so much attention on the internet that people from all over are checking it out. 

  This prompted the Stone County Sheriff’s Office to warn potential thriller seekers inspired by the viral TikTok video to stay away from the private property. 

  “A recent Tik-Tok video went viral about the Indian Ridge development that went bankrupt. This has caused this location off of 76 Highway to become a tourist attraction. THIS IS PRIVATE PROPERTY AND YOU CAN BE CITED FOR TRESPASSING!Our Deputies are very busy handling calls for service and really do not want to write people tickets for trespassing. Please do not enter the property. Please do not trespass on the property. It has been a constant flow of people walking down in the development all weekend. Please go visit our many other tourist attractions in Stone County including Table Rock lake! Thank you! Sheriff Doug Rader”

  The viral TikTok video, posted by user “carriejernigan1,” has more than 15.6 million views. 

  

  https://www.tiktok.com/embed.js

  What’s impressive is how easily popular social media users can influence the masses. It only took one user to turn an abandoned resort town into a popular tourist attraction

  https://www.tiktok.com/embed.js

  Tyler Durden
  Sat, 04/10/2021 – 22:30

• Canada's Green Shift Could Displace Three-Quarters Of Oil Workers
  Canada’s Green Shift Could Displace Three-Quarters Of Oil Workers

  Authored by Charles Kennedy via OilPrice.com,

  Canada’s climate strategy to significantly cut emissions and become a net-zero emissions economy by 2050 will create a seismic shift in the large oil and gas sector, where up to three-quarters of the workers, or up to 450,000 people, are at risk of displacement, TD Bank said in a new report on Tuesday.

  

  Canada aims to become a net-zero emissions economy within three decades, and to cut emissions by between 32 percent and 40 percent by 2030.

  While those commitments could be critical to staving off the worst effects of global warming, Canada needs to take significant action, including coming to terms with the effect of climate policies on the oil and gas workers, the bank said.

  “According to Natural Resources Canada, roughly 600,000 Canadians, located mostly in Alberta, Saskatchewan, and Newfoundland and Labrador are either directly or indirectly employed in the oil & gas sector. We estimate between 50-75% of those workers are at risk of displacement in the transition through 2050, equivalent to 312,000 – 450,000 workers,” TD Bank said in the report.

  “The belief is that many of those displaced will find a home in the clean energy sector, but we should not assume that the transition will absorb all displaced workers,” the bank said, noting that it is critical that Canada do not repeat past mistakes and ensure a just transition for energy sector workers.

  “The clean-energy transition will create many new job opportunities, but there is no guarantee or automatic market mechanism to ensure these benefits accrue to where the costs will be borne on the displacement,” according to the bank.

  South of the border, in the United States, thousands of oil and gas jobs disappeared during the oil price and demand crash last year, and more and more former oil workers moved to jobs in the clean energy business. However, they have also taken a pay cut moving to renewables as the industry still pays lower than oil and gas.

  Tyler Durden
  Sat, 04/10/2021 – 22:00

• Turkey Furious After Mario Draghi Calls Erdogan "Dictator"
  Turkey Furious After Mario Draghi Calls Erdogan “Dictator”

  In the aftermath of last week’s historic snub, when the female president of the European Commission was left speechless – and chairless – during her controversial visit to Turkey’s president, diplomatic relations between Europe and Turkey has once again fallen off a cliff. 

  As a reminder, the European Commission president, Von der Leyen was clearly taken aback when she and her male partner, European Council President Charles Michel, met Erdogan in Ankara last Tuesday, only to find just two chairs prepared, which were quickly occupied by the men. Erdogan and Michel quickly seated themselves while von der Leyen, whose diplomatic rank is the same as that of the two men, was left standing. Official images later showed her seated on a sofa opposite Turkish Foreign Minister Mevlut Cavusoglu.

  “Ehm” is the new term for “that’s not how EU-Turkey relationship should be”. #GiveHerASeat #EU #Turkey #womensrights pic.twitter.com/vGVFutDu0S

  — Sergey Lagodinsky (@SLagodinsky) April 6, 2021

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

  In response, former Goldman partner, ECB head and current Italian Prime Minister, Mario Draghi, told reporters on Thursday that “I absolutely do not agree with Erdoğan’s behavior towards president Von der Leyen … I think it was not appropriate behavior and I was very sorry for the humiliation Von der Leyen had to suffer.”

  He then said that “with these dictators, let’s call them what they are – who however are needed – one must be honest in expressing one’s diverging ideas and views about society.”

  We would love to know more about what Draghi meant by “dictators who are needed” and how Europe treats them compared to dictators who are unneeded… like perhaps having Europe’s unelected money-printing dictators pushing their bond yields to double digits overnight? But we digress.

  Predictably, Turkey was furious with the Italian Prime Minister for calling Erdogan a “dictator” and Turkey’s Foreign Ministry on Thursday summoned the Italian ambassador to Ankara to condemn the remarks. According to a foreign ministry statement, the ambassador was told that Draghi’s remarks were against the spirit of the Turkey-Italy alliance.

  The ministry said Draghi should “immediately” take back his “impudent and ugly remarks”. Foreign Minister Cavusoglu also slammed the remarks in a tweet.

  “We strongly condemn the appointed Italian Prime Minister Draghi’s unacceptable, populist discourse and his ugly and unrestrained comments about our elected president,” he wrote on Twitter.

  Earlier on Thursday, Çavuşoğlu said that the seating at the meeting was arranged in line with the bloc’s demands and international protocol and that Turkey was being subject to “unjust accusations“.

  Turkey has insisted that the EU’s own protocol requests were applied but the EU Council head of protocol said his team did not have access, during their preparatory inspection, to the room where the incident happened.

  “If the room for the tete-a-tete had been visited, we should have suggested to our hosts that, as a courtesy, they replace the sofa with two armchairs for the president of the commission,” Dominique Marro wrote in a note made public by the EU Council. He added that the incident might have been prompted by the order of protocol established by the EU treaty.

  Of course, Erdogan’s excuse was BS: the incident came only weeks after Erdoğan pulled Turkey out of a key European convention aimed at combating violence against women. The move was a blow to Turkey’s women’s rights movement, which says domestic violence and murders of women are on the rise. During her visit to Ankara, Von der Leyen called for Erdoğan to reverse his decision to withdraw from the Istanbul convention – named after the Turkish city where it was signed in 2011.

  Not to put too fine a point on it, but with the world so deep inside the rabbit hole, we would not be surprised if WWIII broke out over some seating arrangement.

  Tyler Durden
  Sat, 04/10/2021 – 21:30

• Conservative Filmmakers Start To Fight Back
  Conservative Filmmakers Start To Fight Back

  Authored by Christian Toto via RealClearInvestigations,

  A documentary film about an African American lawyer who rose from poverty and oppression in the Deep South to the highest court in the land would seem a natural for Black History Month. Yet, in February, at the very time its Prime Video service was featuring films highlighting black history makers, Amazon without explanation stopped offering digital streams of “Created Equal: Clarence Thomas in His Own Words.” 

  ​

  While the film was pulled despite having at one time reached No. 1 on Amazon’s documentary charts, the world’s largest online retailer continued to make available streams of less-popular documentaries, including a favorable one on Anita Hill, the former Thomas colleague who nearly derailed his Supreme Court confirmation.

  

  Amazon initially refused to carry this film challenging the liberal narrative about the 2014 shooting in Ferguson, Mo., which helped spark the Black Lives Matter movement. 

  That was frustrating to Michael Pack, writer-director of “Created Equal” and a documentary filmmaker for decades. But it was no surprise to him and the small but growing cadre of other conservative documentarians, who say they face obstacles because of their politics and are starting to fight back against the long odds of “cancel culture.” Black conservative scholar Shelby Steele saw Amazon initially refuse to carry his documentary “What Killed Michael Brown?” last year because it challenged the liberal narrative about the 2014 shooting in Ferguson, Mo., that helped spark the Black Lives Matter movement. Amazon, which relented after a public outcry, did not respond to a request for comment.

  Justin Folk, director of “No Safe Spaces,” which focuses on college-based attacks on free speech and features prominent liberals including Dr. Cornel West and Van Jones, along with conservatives such as Dennis Prager, Dave Rubin and Ben Shapiro, said he had a hard time finding a traditional distributor for his documentary because Hollywood saw the film as conservative.

  “Despite having big names in our film, a big audience, and a very relevant topic, we were mostly ignored,” said Folk, who said his film, which eventually grossed $1.3 million, was rejected by the prestigious Telluride Film Festival. “In one case, a major distributor actually admitted to us that they think our film is a winner but they can’t get behind it because Dennis Prager is in it.”

  Conservative filmmakers faced little discrimination in the past because there were so few of them. That started to change in 2012, when conservative commentator Dinesh D’Souza’s “2016: Obama’s America” became the second-highest-grossing political documentary of all time ($33 million).

  The years since have been a golden age for documentaries. Streaming services such as Amazon, Netflix, and Hulu have created major distribution channels, matching content with massive, algorithmically targeted audiences. This, in turn, has led to explosive growth in filmmaking. Documentaries that in the past might never have seen the light of day — since their economic viability would be tied to packing movie houses — can flourish today, particularly lately with people more homebound due to the coronavirus pandemic.

  Typically it was liberal activists, not conservative polemicists like D’Souza, who made documentaries. As Thom Powers, who runs America’s largest documentary festival, DOC NYC, told CBS News, the best documentaries try to make a difference. “There have been films that have gotten people out of prison, like the ‘Paradise Lost’ series, or Errol Morris’ ‘Thin Blue Line.’ ‘Super Size Me’ totally changed the conversation around fast food. ‘Inconvenient Truth’ totally changed the conversation around climate change. So all over the world, you can see documentaries having an effect.”

  But the idea of “making a difference” has generally trended in one direction politically, illustrated lately by Barack and Michelle Obama’s film production deal with Netflix, which has already yielded a best documentary Oscar. Virtually ignored is an underserved niche in the market. “More than 70 million Americans voted for Donald Trump in the November election,” the Hollywood Reporter noted in a March 11 story. “And, at the moment, there’s little Hollywood content that directly appeals to them. That leaves a big opening for those willing to risk ostracization from the rest of the industry.”

  Industry support is crucial because it helps in raising money, in earning film festival slots to persuade a distributor to get a film in front of an audience, and enticing journalistic outlets to cover and review it.

  “If you’re on the left, there’s a whole infrastructure that enables you to make things very easily,” said D’Souza, who illustrated his point by citing what he calls the “charmed life” of left-wing filmmaker Michael Moore. Each new Moore film is considered a pop-culture moment. They are featured at the top festivals, where they often win prizes – to go along with his Oscar for “Bowling for Columbine.”

  “He’s on the ‘Today’ show and ‘The View.’ … There’s a whole apparatus of publicity in place,” D’Souza added.

  D’Souza has succeeded without enjoying such support. But he said the odds against conservatives have worsened in recent years because of suppression by both Big Tech and woke corporations. His 2020 film, “Trump Card,” scrapped its planned theatrical release for a video-on-demand slate due to COVID-19, but the hurdles didn’t stop there.

  “The radioactive connection wasn’t me, but Trump,” D’Souza says. “Trump Card” hit video-on-demand services several weeks before the 2020 presidential election, by design. D’Souza says Amazon placed a large order of “Trump Card” DVDs, which his company met. But some Amazon customers were told the product was “out of stock” and wouldn’t be delivered until after Election Day.

  “I’m not used to these kinds of obstacles,” he says. “I never thought of Amazon as a left-wing company.” He’s changed that view after seeing it take part in a concerted takedown of Twitter alternative Parler as well as it removing books such as “When Harry Became Sally,” which criticized elements of the trans movement.

  “What Killed Michael Brown?,” produced by filmmaker Eli Steele in tandem with father Shelby, faced similar discrimination. Amazon initially rejected the handsomely mounted, jazz-filled work, saying it didn’t meet the streaming giant’s quality standards and that no appeal would be heard. That news brought attention from the Wall Street Journal editorial page and other media outlets, and Amazon quickly reversed course. Eli Steele says that opened his eyes to how much sway Amazon holds over the film marketplace.

  “The numbers between Amazon and other platforms are not even comparable,” Steele says of its sizable audience reach. He says most film festivals “lack the backbone to show perspectives outside of their echo chambers,” but he doesn’t want ideological diversity to be forced into the current system.

  “Anyone can start their own film festival and they program it however they wish,” he says. “So why not plan a prestigious film festival that crosses all sorts of lines and invites healthy dialogue and debate?”

  The conservative film sub-genre is attracting some unlikely participants. Radio talk show host Larry Elder made a splash in 2020 with “Uncle Tom,” a documentary letting black conservatives like him share their views and discuss how they’re treated by select liberals. The title captures the latter sentiment.

  Elder, a best-selling author and nationally syndicated talk show host, says right-leaning documentaries often turn to private sources, like affluent Republicans, to fund their work. His film got little attention outside of conservative outlets at a time when the media invested heavily in telling black stories by black creators. 

  “It was ignored by the Hollywood ‘we want diversity’ community, including all the film reviewers of the major newspapers and trade publications like Variety and The Hollywood Reporter,” says Elder, who co-wrote, co-produced and appears in the film. “Uncle Tom” boasts only three official reviews at RottenTomatoes.com, and no critics’-average “Tomatometer” score, in contrast with a robust 96% “fresh” rating from users.

  Neither The Hollywood Reporter nor Variety would comment on the matter.

  Yet none of that stopped Elder’s documentary from turning a tidy profit. The film’s virtual opening weekend last June grossed $400,000. Elder notes the film quickly recouped its costs and ended up earning multiples of its budget of some $450,000 including post-production. It helped that Elder has a hearty social media presence – 859,000 followers on Twitter alone — along with a syndicated radio show to promote the project.

  Its commercial success was also aided by the development of alternative distribution platforms, showing that markets can punish discrimination, and that discrimination may serve as the mother of innovation.

  Initially, “Uncle Tom” was sold exclusively through a partnership with SalemNOW, part of the conservative media company that distributes Elder’s radio show. Following that 70-day exclusive with SalemNOW, the film’s website (UncleTom.com) became the primary sales location, with additional platforms added over the ensuing few months, including iTunes, Amazon and, later, Amazon Prime.

  Elder says his team unsuccessfully approached Netflix about carrying “Uncle Tom,” a platform that features a crush of original, left-leaning documentaries including “13th” and “Miss Americana,” a film that honored Taylor Swift’s progressive awakening.

  The team behind the film didn’t submit it to most major film festivals, save for the boutique USA Film Festival in Dallas. The documentary’s conservative bent helped shape that decision, as did restrictions in place from the ongoing pandemic. 

  RealClearInvestigations reached out to multiple documentary groups for comment on this story, including DOC NYC, the Southern Documentary Fund, the Center for Independent Documentary, Docs in Progress and the International Documentary Association. None responded to those queries. Neither did several major film festivals, including Sundance, Telluride, Slamdance and the Toronto International Film Festival.

  Other conservative filmmakers are going outside traditional channels. SalemNOW began streaming Pack’s “Created Equal” on March 30 in response to Amazon’s decision to pull the film. (It’s listed on Amazon as a DVD but often out of stock.) Christopher Rufo has used YouTube to distribute his short films, including “Chaos by the Bay: The Truth About Homelessness in San Francisco” and “Mob Rule in Seattle.”

  “I can immediately inject it into the bloodstream of the national conversation,” Rufo said. But, he added, coming out as a right-leaning storyteller in the documentary field is “complete poison to your career.”

  “People tell me, ‘You’re now conservative. I can’t even work with you,’” says Rufo, who adds documentary organizations that once collaborated with him suddenly stopped returning his calls. “It’s kind of shocking. … They can’t even process how anyone would have another opinion.”

  Documentary producer Nadia Gill of Encompass Films noted the industry’s allegiance to identity politics in a recent column for Persuasion.com:

  First-hand experience of a subject has always been considered helpful in documentary filmmaking. But this has traditionally been a genre in which creators are free to engage with material that lies far beyond the boundaries of their own lives. Now, during the entire process — from access to financing and distribution — the filmmaker’s identity is at least as closely scrutinized as that person’s filmmaking aptitude.

  Gill, who describes her political philosophy as “center left,” says modern documentaries can be broken down into two categories – classic and commercial, the latter fueled in part by Netflix’s robust documentary lineup. The former, Gill says, isn’t just liberal in nature but “fringe left,” while the commercial market offers some room for right-of-center storytelling. Either way, conservative documentaries rarely grace the film festival circuit.

  “The vast majority of submissions [to film festivals] are, in fact, going to be from the left perspective,” she says. “It would be good for our industry to hear those voices [from the right] … and have an honest conversation.”

  That won’t happen unless more independent funders show up to support this brand of art. Left-of-center storytellers can lean on a variety sources, including the Ford Foundation (2017’s “Whose Streets?”) and the MacArthur Foundation (2010’s “How Democracy Works Now”) to finance their work, Gill says.

  “Progressive institutions have set themselves up for years to make these films,” she says. So far, few non-left groups have copied that approach.

  Amanda Milius agrees. “The donor class of the right has to start acting like the donor class of the left,” says Milius, director of the 2020 documentary “The Plot Against the President,” based on the book of the same title by Lee Smith, a freelance contributor to RealClearInvestigations. “Put that money into issue-based culture … and creators that hold the same values you do. Make something that lives forever.”

  “You’re probably gonna make your money back and more,” she adds, “plus, you’re investing in actual change of the culture.”

  Tyler Durden
  Sat, 04/10/2021 – 21:00

• UPS Buying Vertical Takeoff Aircraft For Time-Sensitive Deliveries
  UPS Buying Vertical Takeoff Aircraft For Time-Sensitive Deliveries

  About 1.5 years after the Federal Aviation Administration (FAA) granted UPS Flight Forward the ability to start a drone airline business, UPS Flight Forward announced Wednesday plans to purchase electric Vertical Takeoff and Landing (eVTOL) aircraft from Beta Technologies.

  The first ten BETA aircraft are scheduled to enter UPS Flight Forward’s fleet by 2024, with an option to purchase an additional 150 more. Each eVTOL aircraft can carry upwards of 1,400 pounds of cargo and take off and land at UPS facilities in small and mid-size markets.

  

  Ideally, the BETA aircraft will transport time-sensitive packages that would otherwise fly on small fixed-wing planes. The aircraft has a distance of 250 miles and can cruise at 170 mph. UPS will integrate the fleet of eVTOL aircraft for short routes that will ultimately speed up delivery times. 

  “This is all about innovation with a focus on returns for our business, our customers, and the environment,” said UPS Chief Information and Engineering Officer Juan Perez. 

  Perez continued: “These new aircraft will create operational efficiencies in our business, open possibilities for new services, and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operation.”

  BETA’s eVTOL is designed to fly autonomously as UPS Flight Forward received the first FAA Part 135 Standard air carrier certification to operate a drone airline in 2019. The FAA certification will allow UPS to eventually fly payloads up to 7,500 lbs. with an operator or autonomously.

  UPS Flight Forward’s future plans appear to be riveting as the package delivery and supply chain management company will soon begin to integrate large unmanned aircraft systems into our airspace to improve the delivery of time-sensitive packages across metro areas and regions. 

  Tyler Durden
  Sat, 04/10/2021 – 20:30

• "You’d Have To Shut Down The Internet" To Ban Bitcoin, Says SEC's Hester Peirce
  “You’d Have To Shut Down The Internet” To Ban Bitcoin, Says SEC’s Hester Peirce

  Any government efforts to ban Bitcoin would be “foolish,” said Hester Peirce (aka “Crypto Mom”), a very Bitcoin-friendly commissioner at the U.S. Securities and Exchange Commission (SEC), during a MarketWatch virtual conference earlier this week, according to Cryptoslate reporter Liam Frost.

  “I think we were past that point very early on because you’d have to shut down the Internet,” Peirce said, adding, “I don’t see how you could ban it. You could certainly make the effort. It would be very hard to stop people from [trading Bitcoin]. So I think it would be a foolish thing for the government to try to do that.”

  Not only that, but the government would immediately wipe out $2 trillion in net wealth – the market cap of the crypto sector – an event that would have profoundly deleveraging consequences, and since much of that wealth is now backed by debt, for example all those debt-funded purchases of bitcoin by Microstrategy, such a move by the government would immediately destabilize the all important debt market.

  The statement came on the heels of Ray Dalio, a billionaire investor and founder of Bridgewater Associates, arguing that there’s “a good probability” that governments around the world would ban Bitcoin and other cryptocurrencies.

  Dalio told Yahoo Finance:

  “Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control. They outlawed gold, that’s why also outlawing Bitcoin is a good probability.”

  However, according to Peirce, the main issue for authorities—at least when it comes to cryptocurrencies—is to find an approach to regulation that would be productive and non-restrictive at the same time. She noted:

  “We’ve seen other countries take, I would say, a more productive approach. We really need to turn that around. And I’m optimistic, with a new chairman coming in with a deep knowledge of these markets, that is something we could do together—build a good regulatory framework.”

  At the same time, Peirce also pointed out that she doesn’t know when—or if—a Bitcoin exchange-traded fund (ETF) will finally be approved in the U.S. Recently, we’ve seen a new wave of major investment companies, such as Fidelity Investments, SkyBridge Capital, and VanEck, filing their applications for Bitcoin ETFs with the SEC.

  The regulator, however, never approved a single filing of this kind so far, which as discussed earlier, may be a good thing for not only bitcoin but the entire nascent DeFi ecosystem where hundreds of billions in very real money is now intertwined.

  There is another reason why the government may have no intention of (ever) banning bitcoin: as Artemis Capital’s Christopher Cole wrote recently echoing what we said back in 2016 and 2017, “Bitcoin has emerged as a “shadow” monetary tool, a type of liquidity overflow to prevent even bigger asset bubbles in conventional assets such as commodities, stocks and housing.

  As Cole tweeted, “right now [bitcoin] helps Gov by serving as a vol buffer for the middle class so money devaluation flows into a purely speculative asset and less into home prices or other goods.”

  Bitcoin is a “shadow” monetary tool

  Right now, it helps Gov by serving as a vol buffer for the middle class so money devaluation flows into a purely speculative asset and less into home prices or other goods

  Explains lack of regulation, which will come concurrently w/inflation pic.twitter.com/SQQQql7p4P

  — Christopher Cole (@vol_christopher) March 31, 2021

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

  Said otherwise, cryptos now represent some $2 trillion in excess liquidity that would otherwise be invested in housing or stocks, making both of these respective asset bubbles that much more prone to bursting, and bringing the entire asset-bubble dependent socia-economic and financialsystem closer to collapse. However, thanks to bitcoin, there is a substantial buffer allowing Powell to keep printing indefinitely.

  This benign side effect of bitcoin which paradoxically allows the Fed to perpetuate its ultra-easy monetary policy for much longer, “explains lack of regulation” although once we hit hyperinflation and bitcoin goes offerless, regulation will come for one simple reason: it will be tantamount to deleveraging the system by trillions in a heartbeat (recall the market cap of all crypto assets is now above $2 trillion) and rising.

  Regulation of crypto is a structural risk to investors/speculators

  Regulation of crypto can be seen as 2nd order monetary tightening tool by Gov to tame inflation

  All of the above doesn’t invalidate ownership of the asset but requires deep thought on risk-reward

  My point

  Regulation of crypto is a structural risk to investors/speculators

  Regulation of crypto can be seen as 2nd order monetary tightening tool by Gov to tame inflation

  All of the above doesn’t invalidate ownership of the asset but requires deep thought on risk-reward

  — Christopher Cole (@vol_christopher) March 31, 2021

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

  This is a sound warning for bitcoin bulls, but it only applies when inflation gets truly out of hand, but that is unlikely to happen until lat 2022 or early 2023 assuming the Fed keeps rates at zero and barely tapers as it has been predicting it will do. That’s nearly two years of upside potential for the best performing assets of the year, decade, century and millennium.

  Tyler Durden
  Sat, 04/10/2021 – 20:14

• "First Substantive Victory For Beijing": China Hits Alibaba With Record $2.8 BIllion Antitrust Fine
  “First Substantive Victory For Beijing”: China Hits Alibaba With Record $2.8 BIllion Antitrust Fine

  With US politicians “desperate” to show internet monopolies Google, Facebook and Amazon just who is boss – if purely for brownie points with their constituents but terrified to actually do so in real life, China overnight showed how it’s done when Xi’s regime escalated his ongoing crusade against China’s richest man, Jack Ma, byt imposing a massive fine of 18.2 billion yuan, equivalent to $2.8 billion, against Alibaba Group for abusing its dominant position over rivals and merchants on its e-commerce platforms, a record penalty in the country that comes amid a wave of scrutiny on the business empire of company founder Jack Ma.

  China’s State Administration for Market Regulation said Saturday in Beijing that Alibaba punished certain merchants who sold goods both on Alibaba and on rival platforms, a practice that it dubbed “er xuan yi”—literally, “choose one out of two.”

  Alibaba’s business practices limited competition, affected innovation, infringed on the rights of merchants and harmed the interests of consumers, the regulator said.

  The punishment was announced less than four months after China’s top regulator launched an antitrust probe into Alibaba, focusing on vendor claims that Alibaba pressured them into selling exclusively on its e-commerce platform. It is the harshest rebuke yet against the company, though it also removes some uncertainty over the company’s future.

  The record fine is equivalent to 4% of the company’s domestic annual sales, the regulator added. Under Chinese rules, antitrust fines are capped at 10% of a company’s annual sales. As part of the penalty, regulators said they will require that Alibaba carry out a comprehensive revamp of its operations and submit a “self-examination compliance report” within the next three years.

  “The regulator’s punishment of Alibaba Group is a move to standardize the company’s development and set it on the right path, to purify the industry and to forcefully protect fair competition in the market,” the Communist Party’s flagship newspaper the People’s Daily said in a commentary on the regulator’s statement, adding that the fine is “also a kind of love.”

  The fine isn’t intended to deny the importance of the platform economy to China’s development or to signify a change in state support for its development, the newspaper said.

  

  Terrified of inciting an angrier onslaught by Beijing, which “disappeared” Jack Ma for several months after Chinese fintech giant Ant was forced to yank its IPO last November in a show of force between Xi and Ma which the Chinese president handily won, a penitent Alibaba said that it “accepts the penalty with sincerity and will ensure its compliance with determination,” adding that “to serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation.”

  

  Quoted by the WSJ, Jeffrey Towson, a former professor at Peking University’s Guanghua School of Management said that “that is serious money, but it’s not going to hinder their development,” adding that “it strikes you as an appropriate level for corrective action.”

  Alibaba came under regulatory scrutiny after Ma angered government officials, including President Xi Jinping, with his criticism that regulatory restrictions were hampering innovation. Ma’s comments derailed the much-anticipated initial public offering of Ant Group.

  Since the investigation was announced, Alibaba has made conciliatory gestures such as establishing a task force to review its businesses internally and by saying it will shoulder more social responsibility.

  The punishment marks the first substantive victory for Beijing in trying to restrain the market power of the country’s internet giants, according to Fang Xingdong, a former internet entrepreneur and founder of Beijing-based think tank China Labs.

  “The 4% is still undoubtedly a compromise,” Mr. Fang said of the fine, arguing that regulators could have justified a higher number given the damage Alibaba’s practices caused and its previous unwillingness to cooperate.

  While the fine is large, the government’s treatment of Alibaba contrasts with that of Ant Group, which has been ordered to transform itself into a financial holding company overseen by China’s central bank. The restructuring could significantly cut into revenue and profit growth at Ant. Its IPO had been expected to be the world’s largest before it was canceled.

  Chinese officials said Beijing was reluctant to come down too severely on Alibaba, a pillar of the Chinese tech sector that is immensely popular among consumers, but wanted it to dissociate from Ma, The Wall Street Journal previously reported.

  Ironically, the new clarity on Alibaba’s future should come as a relief to some investors, said Towson although questions remain:

  “I think the next question is, are they going to move on from Alibaba now to another company?”

  Alibaba’s shares, which hit a record high in October, have fallen 27% in Hong Kong since Ant’s IPO was canceled in November. The company’s American depositary receipts have declined 22% over the same period.  Alibaba thanked customers, merchants and investors for their patience in an open letter on Saturday.

  “It is not lost on us that today’s society has new expectations for platform companies, as we must assume more responsibilities as part of the nation’s economic and social development,” the letter said.

  Tyler Durden
  Sat, 04/10/2021 – 19:30

• Target Sells Woke Prayer Book: "Dear God, Please Help Me Hate White People"
  Target Sells Woke Prayer Book: “Dear God, Please Help Me Hate White People”

  Authored by Simon Black via SovereignMan.com,

  Are you ready for this week’s absurdity?

  Here’s our weekend roll-up of the most ridiculous stories from around the world that are threats to your liberty, risks to your prosperity… and on occasion, inspiring poetic justice.

  Prayer Book Urges “help me to hate White people.”

  A prayer book called “A Rhythm of Prayer: A Collection of Meditations for Renewal,” is a number one bestseller on Amazon in the category “meditation”.

  

  One prayer, called “Prayer of a Weary Black Woman,” by Dr. Chanequa Walker-Barnes, a theology professor at Mercer University, starts:

  “Dear God, Please help me to hate White people. Or at least to want to hate them… I want to stop caring about their misguided, racist souls, to stop believing that they can be better, that they can stop being racist.”

  The “prayer” then describes the type of White person they want to hate— not the actual blatantly racist ones, but the “wolves in sheep’s clothing” who “don’t see color”, are friendly and accepting on the surface.

  “Lord, if it be your will, harden my heart. Stop me from striving to see the best in people. Stop me from being hopeful that White people can do and be better. Let me imagine them instead as white-hooded robes standing in front of burning crosses. Let me see them as hopelessly unrepentant, reprobate bigots who have blasphemed the Holy Spirit and who need to be handed over to the evil one.”

  “Grant me a Get Out of Judgment Free Card if I make White people the exception to your commandment to love our neighbors as we love ourselves.”

  This is a sick, insane, religious cult of hateful people. But institutions like churches, schools, and corporations are pushing this blatant racism mainstream.

  The book is also available at Target— a store which banned a book that gave voice to transgender people who regretted their decisions to transition.

  But hatred of white people is perfectly acceptable.

  Click here to see photos of the excerpts.

  Teachers Union President Says “Jews are now part of the ownership class”

  The head of one of the largest teachers union in the US took aim at Jews who criticize opening schools back up.

  When asked about the people who don’t understand why some teachers don’t want to return to in person teaching, Randi Weingarten, President of the American Federation of Teachers targeted her response at Jews:

  “American Jews are now part of the ownership class. Jews were immigrants from somewhere else… Both economic opportunity through the labor movement and an educational opportunity through public education were key for Jews to go from the working class to the ownership class.

  “What I hear when I hear that question is that those who are in the ownership class now want to take that ladder of opportunity away from those who do not have it.”

  So somehow Jews criticizing teachers for NOT wanting to teach, is a form of pulling the ladder away from vulnerable kids who need an educations? Okay…

  But apparently Jews are now the oppressors, and therefore not entitled to have an opinion on the matter.

  Almost reminds me of a certain European country in the 1930s…

  Click here to read the interview transcript.

  Race-based healthcare in Vermont

  As Vermont opens up vaccine eligibility to more groups, some categories make sense.

  For example younger people with health conditions and older people more susceptible to serious Covid-19 cases are eligible to receive the vaccine.

  But another group has nothing to do with Covid risk. Vermont has now opened up vaccinations to ethnic minorities.

  “If you or anyone in your household identifies as Black, Indigenous, or a person of color (BIPOC), including anyone with Abenaki or other First Nations heritage, all household members who are 16 years or older can sign up to get a vaccine.”

  Health Vermont does not explain why there is a racially segregated line for the Covid vaccine— apparently it’s just the woke thing to do these days.

  Click here to read the guidelines.

  Spirit Airlines kicks off two toddlers in the past month

  Serious criminals in 2021: parents who can’t keep masks on their toddlers.

  Spirit airlines has opted to involve police to kick families off flights TWICE in the past month.

  In the latest incident, a two year old refused to wear a mask, so the airline crew informed the family they would have to exit the flight. When the family refused, the crew deplaned the entire plane, and contacted the police.

  Last month, it was an autistic four year old who refused to wear his mask, also causing his family to be kicked off a Spirit Airlines flight.

  It’s hard to understand how this can be good for the business model. Must be another case of Covid derangement syndrome.

  Click here to read the full story.

  Pete Buttigieg caught faking bike ride to work for photo op

  Transportation Secretary Pete Buttigieg cares so much about the environment that he decided to ride a bicycle to work… at least the last two blocks.

  He was caught unloading a bicycle from a black SUV a short distance from the White House so he could finish his ride to the cabinet meeting on bike. Such a great photo opportunity.

  Security followed in the SUV.

  Click here to read the full story.

  Churches visited by police for Easter services

  There are two notable videos circulating of police attempting to break up holiday masses over the past couple of weeks.

  One occurred in Canada, and shows the pastor of the church loudly refusing entry to the health inspector who is accompanied by half a dozen police officers.

  The pastor shouts over the official “I don’t care what you have to say! Out!”

  He tells them that if they come back they should have a warrant.

  As the health officials and police leave, he refers to them as “Nazis” and “Gestapo”, saying it is shameful that these “psychopaths” think they have the authority to break up religious services over Covid-19 rules.

  The local authorities issued a statement which said their inspector was not allowed to enter the church and was unable to confirm whether the gathering violating public health orders.

  That’s basically admitting it was a fishing expedition with no probable cause in the first place.

  The second video comes from the UK, where police take the pulpit on Easter Sunday to inform the masked congregation that the gathering is illegal, and they must disperse or face fines.

  The churchgoers quietly comply.

  See the video from Canada here, and the video from the UK here.

  *  *  *

  On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

  Tyler Durden
  Sat, 04/10/2021 – 19:00

• Law Firms And Banks Are Showering Employees With Gifts To Try And Avoid A "Retention Crisis"
  Law Firms And Banks Are Showering Employees With Gifts To Try And Avoid A “Retention Crisis”

  While the junior bankers at Goldman Sachs who spoke out about long hours worked during the SPAC boom may not be in favor in the C-suite at the bank, they have started a trend that is going to make them legendary amongst their fellow junior bankers in the industry.

  Just weeks later, the world’s top professional service firms and banks are showering their employees with luxury gifts and bonuses to try and prevent them from moving on to other opportunities in what is becoming a fierce section of the job market for those qualified. 

  Law firms are getting in on the action, too. Financial Times reported this week that Davis Polk & Wardwell and Simpson Thacher & Bartlett, two elite law firms, have given one time bonuses between $12,000 and $64,000 to their employees for their “hard work during the pandemic”. This is on top of a Covid bonus employees were already given.

  Latham & Watkins and Goodwin Procter have also followed suit. Goodwin’s employees will be paid in two tranches, one in July and another in October.

  

  Nathan Peart, managing director of associate recruiting at Major, Lindsey & Africa, said: “It’s no secret that associates have been working huge numbers of hours and are approaching burnout. Firms are taking action and money is a starting point.”

  Investment bank Jefferies has given its employees a choice of a Peloton, a Mirror or various Apple products. David Polk offered its employees wine packages, gift cards and shopping sprees. Credit Suisse – who has larger, Archegos-sized problems on its hands right now – said it would pay its junior staff $20,000 in bonuses. Our advice to those junior bankers, given the $5 billion Credit Suisse might be facing in Archegos losses? Make sure those checks clear immediately..

  Some lawyers in the U.K. are offering “golden handcuff” deals – similar to retention bonuses – designed to prevent employees from leaving. One lawyer told FT: “While having to repay it would be painful, I’m not sure it’s enough to actually serve its purpose — especially where the salary difference or potential sign-on bonus elsewhere would potentially make up for it.” 

  A U.S. based headhunter concluded: “Associates can’t easily be easily replaced. If an associate billing 2,500 hours a year leaves, you have to spread those hours over other people. If two leave it starts to become a problem.”

   

  Tyler Durden
  Sat, 04/10/2021 – 18:30

• How Long Can This Printing-Press-Money-Induced, Lopsided Trade Insanity Last?
  How Long Can This Printing-Press-Money-Induced, Lopsided Trade Insanity Last?

  Authored by MN Gordon via EconomicPrism.com,

  Have you recently bought furniture, auto parts, clothes, electronics, plastic wares, doofers, doodads, or other doohickeys?  Chances are, they were made overseas.

  The U.S. monthly trade deficit in February scored a new record. 

  

  According to the Commerce Department, the U.S. imported $71.1 billion more goods and services than it exported.  Of this, $30.3 billion was from China alone.

  What’s more, the month of February only had 28 days.  At a daily gap of $2.54 billion, had it been a full 31-day month, the monthly trade deficit would have been over $78 billion.  What to make of it…

  A trade deficit is not inherently bad.  Remember, countries as a whole do not trade with each other.  Individuals and businesses trade with other individuals and businesses between countries.  Presumably they do so because it’s advantageous for both sides.

  Sound money, of limited supply and market determined interest rates, would provide natural limits to how wide a trade deficit could expand.  But we don’t live in a world of sound money and market determined interest rates.  We live in a world of fake money where interest rates are set by central planners.

  The gargantuan trade deficit is a byproduct of the insanity of central economic planning.  Let’s follow the fake money and see where it leads…

  The Federal Reserve creates credit from thin air and loans it to the U.S. Treasury in the form of Treasury bond purchases.  At the same time, commercial banks extend credit via fractional reserve banking.  The Federal Reserve encourages the over issuance of credit by artificially suppressing interest rates for extended time periods – often a decade or more.

  This continuous flood of credit – the flip-side of debt – finds its way into stocks, real estate, and foreign made imported goods.  Some of it even finds its way into the absurdity of 75-inch flat screen televisions with sound bars.

  Surplus trading partners, like China and Japan, then recycle the dollars back into U.S. Treasuries, thus, perpetuating greater debt creation – and an ever expanding trade deficit.  Many countries also engage in competitive currency devaluations – made possible by fake money – to garner a trade advantage.

  The trade deficit, you see, is a function of fake money and expansive fiscal and monetary policies.  Without fake money, the trade deficit never could have blown out to today’s extreme, $71.1 billion monthly imbalance.

  “Waikiki of Southern California”

  Nowhere is the insanity of central economic planning so visibly stark raving mad as at the Port of Los Angeles / Port of Long Beach (POLA / POLB) shipping complex.  The combined ports account for over one third of all U.S. imports.  We know the area well.  We pass through it every day.

  

  As context, the Southern California coast, from Orange County and into south Los Angeles County, extends up from the south and wraps to the west.  So, when standing on the shore in Long Beach and peering out at the Pacific Ocean you’re not looking west…you’re looking south.

  The immediate body of water, which is naturally protected from the west by the blunted Palos Verdes Peninsula, is San Pedro Bay.  The bay is generally bookended by the San Gabriel River mouth on the east and the east facing extent of the peninsula on the west.  At about its midpoint is the terminus of the Los Angeles River.

  San Pedro Bay is not entirely land protected like San Francisco Bay or San Diego Bay.  Its south facing orientation is naturally exposed to summertime south swells, which are generated by storms in the South Pacific near New Zealand and from tropical storms off the coast of Mexico.

  Long Beach was known as the “Waikiki of Southern California” in the early 20th century because it had waves ideal for surfing.  This is hearsay for most residents.  No one has ridden a wave in Long Beach for over 70 years.

  A massive 8.5 mile breakwater was constructed between 1899 and the 1940s, to seal off San Pedro Bay from the south.  This colossal breakwater structure supported the buildout of the massive POLA / POLB shipping complex.  Still, despite being mega in all ways, it’s not mega enough for fake money…

  The colossal fiscal and monetary stimulus experiment that’s been executed by Washington and the Fed under the pretext of COVID-19 relief has stimulated the U.S. trade deficit with China.

  Definitive Absurdity

  Starting last fall, container ships began log jamming the berths at the POLA / POLB and anchoring in San Pedro Bay.

  In February, nearly 40 ships were at anchor and unable to dock.  This number has somewhat abated.  But it still remains around 30.  Moreover, with unremitting money printing now the overt policy of America’s central planners, this madness should continue through the year – possibly longer.

  Attempts to accommodate the ever escalating volume of trade have been unsuccessful.  Just five years ago the majority of ships had a capacity of under 10,000 twenty-foot equivalent units (TEUs).  Presently, many of the ships at anchor have a capacity of 14,000 to 15,000 TEUs.  Some are even larger.

  In September, after seven years of construction at a cost of $1.5 billion, the Gerald Desmond Bridge replacement was commissioned.  The prior bridge was too low to accommodate larger ships entering the Inner Harbor.

  The new bridge structure, which has the highest vertical clearance of any cable-stayed bridge in the U.S., is a remarkable engineering achievement.  The two towers rise up to roughly 515 feet above mean sea level, and include 40 cables per tower.  The bridge’s linear extent is approximately 8,800 feet.  The cable-stayed span alone is 2,000 feet.

  Construction included 18 million pounds of structural steel, 75 million pounds of rebar, and 300,000 cubic yards of concrete.  In addition to this massive bridge, berths have been widened, and channels have been deepened to accommodate the definitive absurdity of money printing and perpetual credit creation: The CMA CGM Benjamin Franklin.

  This mega 18,000 TEUs container ship, if you’re unfamiliar with it, is over 20 stories tall, the width of a 12 lane freeway, and longer than four football fields.  It has enough cargo space to hold 90 million pairs of ‘Made In China’ shoes.

  Journey To The End Of San Pedro Bay

  Driving west from Downtown Long Beach, up and over the Gerald Desmond Bridge replacement, you are consumed by the massive – roughly 5-square mile – sea of piled up shipping containers.  They arrive full of imports, are unloaded and dispersed via rail and trucks, and then returned so they can be shipped back to China…largely empty.

  Continuing west, at about the mid-point of Terminal Island, you cross from the Port of Long Beach to the Port of Los Angeles.  Then up and over the Main Channel via the Vincent Thomas Bridge – another impressive suspension bridge – and into the San Pedro district of Los Angeles.

  To best observe the madness and folly of insane central economic planning, follow the east facing extent of the peninsula south and upward to Angel’s Gate Park.  There, high upon the bluffs at the southeastern tip of the Palos Verdes Peninsula, you’ve arrived at the end of San Pedro Bay.

  At the center of Angel’s Gate Park, just south of the youth hostel, sits the Korean Bell of Friendship.  The massive bronze bell is positioned over a stone pavilion.  The imposing pyramidal roof structure, supported by twelve columns, is etched with ornate Korean zodiac animals and vibrant color patterns.

  Immediately, beneath the ground where the bell sits are the old abandoned World War I bunkers of Fort MacArthur, named after Lieutenant General Arthur MacArthur – father of World War II General Douglas MacArthur.  Several remnants of massive gun battery emplacements are located immediately adjacent.  This site falls within the area of The Great Los Angeles Air Raid of 1942, where Los Angeles fell under – real or imagined? – attack from a squadron of Japanese bombers.

  Winds gusts off the Pacific Ocean from three directions, explode up the face of the sea cliffs, and wildly swirl about the park’s crest.  Sweeping views of the mega POLA / POLB shipping complex fill the eastern scenic scape.  Catalina Island rises from the waters like a mountain berg to the south.

  Peering over the bluff from Point Fermin Park, down to Cabrillo Beach, you can look directly east, downline of the breakwater.  A hodgepodge of marooned container ships dot the water.  The massive ports complex lacerates the eye to the north and east.

  Behind that is the humble Long Beach skyline and the Convention Center, which, at this precise moment, is being rapidly transformed from a COVID-19 vaccination center to housing for upward of 1,000 migrant children.  On a clear day, the overconfident Los Angeles skyline, framed by the San Gabriel Mountains can be seen in the distance.

  How long can this printing press money induced, lopsided trade insanity last?

  When the dollar collapse arrives, and trade recedes, the mega ports complex will quickly slip into disrepair and decay – perhaps, indefinitely.

  The ancient Egyptians left the Pyramids and the Great Sphinx of Giza.  The pre-Columbian civilizations of the new world had their pyramids too.  Nearly, 1,000 monumental statutes were left by early inhabitants of Easter Island.  The Coliseum, Hadrian’s Wall, Timgad, Colosseum of Pula, Aqua Marcia, numerous arches, basilicas, and baths…the skeletons left by the Romans are immense.

  Surely, the ruins of madness at POLA / POLB will provide a lasting monument to the folly of printing press money and insane central planning for future generations to scratch their heads over.

  Tyler Durden
  Sat, 04/10/2021 – 18:00

• Seattle Elementary School Won't Let City Remove Giant Homeless Encampment As Students Return To Class
  Seattle Elementary School Won’t Let City Remove Giant Homeless Encampment As Students Return To Class

  Students at one Seattle elementary school are getting an unexpected lesson in sharing, as district officials are refusing assistance from the city to remove a homeless encampment on school grounds until all of the vagrants are placed in shelters, according to KOMO.

  Students returned to campus for in-person classes earlier this month.

  

  The decision to let the homeless remain – over a quarter of whom have severe mental illness or substance abuse issues – has rattled some parents, who have asked the district to reconsider.

  “I am calling on the school board to allow Jenny Durkan to take of these encampment as she has in the past, offer services and then guide campers out of the park,” said one parent, Ryle Goodrich.

  

  According to Mayor Jenny Durkan, however, the city needs permission from the district to do so.

  “Seattle Public Schools is a separate governmental entity and it controls its own properties,” Durkan told KOMO. “The City of Seattle does not and cannot go onto school grounds and start dealing with encampments.”

  Durkan noted that the city has years of experience moving homeless people into housing, while the school district does not.

  

  “They made it very clear that they did not want to relocate those encampments unless they can place those people into shelter,” she said, adding “We’ve been trying to give them our experience how best to accomplish that.”

  The camp of near 40 tents sits between Bitter Lake and a fence surrounding the school grounds. While it would be hard for students on the playground to have direct contact with the tents, the camp sits on school district property.

  When asked if the district has “asked” the City for help and allow HOPE team outreach staff onto school property, a district spokesman was non-committal.

  “It is a somewhat fluid situation and we appreciate the city’s partnership and flexibility as we proceed,” said Tim Robinson, Seattle Public Schools’ spokesperson. -KOMO

  According to the Mayor’s spokesman, the city has not officially been asked for help by the district.

  Tyler Durden
  Sat, 04/10/2021 – 17:30

• Multiple New York Times Staff Previously Worked For CCP-Controlled Media: Report
  Multiple New York Times Staff Previously Worked For CCP-Controlled Media: Report

  Authored by Isabel van Brugen via The Epoch Times,

  Several current New York Times staffers were previously employed by the Chinese Communist Party (CCP)-controlled English-language newspaper China Daily, which has in recent years paid U.S. media millions of dollars to publish its state-approved content.

  

  Current employees at the New York Times who formerly worked for the Chinese state-run media outlet include; Jonah Kessel, Director of Cinematography at the Times; Diarmuid McDermott, a current Staff Editor and Designer at the outlet; and Europe culture reporter Alex Marshall, the National Pulse found.

  

  In now-deleted Twitter posts, Kessel, who took on the role of China Daily’s Creative Director from July 2009 to November 2010, wrote that working for the CCP sometimes has its “benefits.” He also mentioned that he was “psyched” for starting the role, which included “redesigning” the propaganda arm of the CCP.

  He had disclosed in several posts that he was “working for” and “getting paid” by Chinese state media.

  “You know you work for the PRC [The People’s Republic of China] when the first word that comes to your mind when asked to describe your work place is ‘harmonious’ #china,” Kessel wrote in a Twitter post in November 2009.

  According to McDermott’s LinkedIn profile and personal website, he worked as editor and designer for China Daily in a Hong Kong-based role for eight years—from November 2012 to November last year. He assumed the same role at the NY Times last year, and is still based in Hong Kong.

  He revamped China Daily’s “Asia Weekly” publication, which, according to his profile, involved “Copy editing; Rewriting raw copy; Designing layout and graphics; Sourcing news stories and pictures; Developing and maintaining a web presence across multiple platforms; Outputting pages for printers across the region.”

  Marshall was reportedly employed by China Daily as an editor between 2003 and 2004.

  The Epoch Times has reached out to the NY Times for comment.

  For years, the NY Times has sought expanded access to the Chinese market and accepted millions in advertising revenue from Chinese state-owned media entities.

  Records from the U.S. Department of Justice last year show that China Daily paid nearly 19 million dollars to U.S. media companies for advertising and printing expenses over the past four years.

  Paid supplements with a pro-Beijing agenda produced by the outlet were published in newspapers such as The Washington Post and The Wall Street Journal.

  The CCP-controlled outlet also paid the NY Times $50,000 for advertising, the Justice Department records show.

  Tyler Durden
  Sat, 04/10/2021 – 17:00

• US Farmers Celebrate As Corn Exports Near Records 
  US Farmers Celebrate As Corn Exports Near Records 

  Reuters reports US corn exports “have blown past nearly every benchmark” as China, the world’s largest food and ag importer, appears to be ramping up purchases of US farm goods. What’s mildly funny is how China has begun to purchase large amounts of farm goods from the US under the Biden administration. 

  According to official US export data Wednesday, February’s corn exports recorded 6.3 million tons. The amount topped “2008’s record for the month by 17% and is the largest monthly volume since July 2018,” said Reuters. 

  A few months back, December’s corn exports exploded to 13-year highs. The first-quarter outlook already suggests record volumes. 

  Reuters’ projections indicate weekly export data for March could reach an all-time high, possibly topping north of 9 million tons. The largest-ever export volume for a given month was 7.75 tons in May 2018. 

  

  China has primarily driven strong US corn exports. By Mar. 25, Beijing booked around 23.2 million tons of US corn for the 2020/21 year. The previous high for US corn exports to China was 5.15 million in 2011/12.

  In January, we first noted that China customs data showed that grain imports soared to record highs in 2020 after tight domestic corn supplies pushed prices to multi-year peaks, driving demand for cheaper imports.

  The USDA forecasted 2020/2021 corn exports at a record 66 million tons, and there’s a chance in the upcoming growing season, the number could be much higher due to China’s increasing demand. 

  This is happening as corn prices have nearly doubled since August. 

  

  … prompting a very worried Albert Edwards to warn about rapid food inflation could result in socio-disturbances unless food prices stabilize and revert to much lower levels (see “Why Albert Edwards Is Starting To Panic About Soaring Food Prices.”) The first places where unrest could happen due to higher food prices are in emerging market countries.  

  In the meantime, soaring corn exports and prices are a blessing for US farmers who have had their farm incomes collapse in recent years. 

  Tyler Durden
  Sat, 04/10/2021 – 16:35

• Is A Cultural Revolution Brewing In America?
  Is A Cultural Revolution Brewing In America?

  Authored by Charles Hugh Smith via OfTwoMinds blog,

  The lesson of China’s Cultural Revolution in my view is that once the lid blows off, everything that was linear (predictable) goes non-linear (unpredictable).

  There is a whiff of unease in the air as beneath the cheery veneer of free money for almost everyone, inequality and polarization are rapidly consuming what’s left of common ground in America.

  Though there are many systemic differences between China and the U.S., humans in every nation are all still running Wetware 1.0 and so it is instructive to consider what can be learned from China’s Cultural Revolution 1966-1976.

  China’s Cultural Revolution was remarkably different from the Party’s military-political victory of 1949. Where the political revolution was managed by the centralized hierarchy of the Communist Party (CCP), the Cultural Revolution quickly morphed from a movement launched by Mao into a decentralized mass movement against all elites, including Party and state elites which had been sacrosanct and untouchable.

  The Cultural Revolution is not an approved topic in China today, and that alerts us to its importance.

  Although ostensibly launched by Mao (as part of his 1966 purge of Party rivals), the Cultural Revolution very quickly devolved into a decentralized, semi-chaotic movement of Red Guards, students and other groups who shared ideas and programs but who acted quite independent of the Party’s central leadership. (In systems language, semi-chaotic dynamics are emergent properties.)

  If you examine Mao’s statements that supposedly launched The Cultural Revolution, you’ll find they’re not much different from his many pronouncements in the 1950s and early 1960s, none of which sparked a violent national upheaval. The Cultural Revolution cannot be traced back to Mao’s control or plans; rather, Mao served as the politically untouchable inspiration for whatever measures the local cadres deemed necessary in terms of advancing (or cleansing) the people’s revolution.

  The important point here is that the Cultural Revolution was not controlled by the political authorities, even as they maintained control of the Party and central government hierarchy in Beijing. But this was nothing more than an illusion of control: the forces of the Cultural Revolution had broken free of central command and control, even as the Red Guards expressed their loyalty to Mao and the principles of the Party as the politically approved cover for their rampage.

  That’s the irony of Cultural Revolutions: the authorities cannot claim it is a political counter-revolution because the cultural revolutionaries proclaim their loyalty to the ideals and principles the authorities claim to be upholding.

  Cultural Revolutions in effect claim the higher ground, eschewing political influence for direct action in the name of furthering the ideals which the authorities have abandoned or betrayed.

  Given the fragmentary nature of The Cultural Revolution, the history is equally fragmentary– especially given the official reticence.

  A recent academic book, Agents of Disorder: Inside China’s Cultural Revolution, provides granular detail on the fragmented, decentralized, rapidly evolving dynamics of the movement:

  “(The author) devoted decades to examining the local records of nearly all of China’s 2,000-plus county-level jurisdictions. He found that factions emerged from the splintering, rather than the congealing, of class-based groups. Small clusters of students, workers, and cadres struggling to respond to Mao’s shifting directives made split-second decisions about whom to align with. Political identities did not shape the conflict; they emerged from it. To explain this process of identity formation, he offers a theory of ‘factions as emergent properties’ and suggests that similar dynamics may characterize social movements everywhere.”

  In other words, groups modified their alliances, identities and definitions of “class enemies” on the fly, entirely free of central authorities. Factions splintered, regrouped and splintered again. In the chaos, no one was safe.

  Those who lived through The Cultural Revolution are reticent about revealing their experiences. Even in the privacy of their homes in the U.S., their voices become hushed and their reluctance to give voice to their experiences is evident.

  The unifying thread in my view is the accused belonged to some “counter-revolutionary” elite –or they were living vestiges of a pre-revolutionary elite (children of the landlord class, professors, etc.)–and it was now open season on all elites, presumed or real.

  What generates such spontaneous, self-organizing violence on a national scale? My conclusion is that cultural revolutions result from the suppression of legitimate political expression and the failure of the regime to meet its lofty idealistic goals.

  Cultural revolutions are an expression of disappointment and frustration with corruption and the lack of progress in improving everyday life, frustrations that have no outlet in a regime of self-serving elites who view dissent as treason and/or blasphemy.

  By 1966, China’s progress since 1949 had been at best uneven, and at worst catastrophic: the Great Leap Forward caused the deaths of millions due to malnutrition and starvation, and other centrally planned programs were equally disastrous for the masses.

  Given the quick demise of the Let a Hundred Flowers Bloom movement of open expression, young people realized there was no avenue for dissent within the Party, and no way to express their frustration with the Party’s failure to fulfil its idealistic goals and promises.

  When there is no relief valve in the pressure cooker, it’s eventually released in a Cultural Revolution that unleashes all the bottled-up frustrations on elites which are deemed politically vulnerable. These frustrations have no outlet politically because they’re threatening to the status quo.

  All these repressed emotions will find some release and expression, and whatever avenues are blocked by authorities will channel the frustrations into whatever is still open.

  A Cultural Revolution takes the diversity of individuals and identities and reduces them into an abstraction which gives the masses permission to criticize the abstract class that “deserves” whatever rough justice is being delivered by the Cultural Revolution.

  As the book review excerpt noted, the definition of who deserves long overdue justice shifts with the emergent winds, and so those at the head of the Revolution might find themselves identified as an illegitimate elite that must be unseated.

  I submit that these conditions exist in the U.S.: the systemic failure of the status quo to deliver on idealized promises and the repression of dissent outside “approved” (i.e. unthreatening to the status quo) boundaries.

  What elite can be criticized without drawing the full repressive powers of the central state? What elite will it be politically acceptable to criticize? I submit that “the wealthy” are just such an abstract elite.

  To protect itself, a repressive status quo implicitly signals that the masses can release their ire on an abstract elite with indistinct boundaries–a process that will divert the public anger, leaving the Powers That Be still in charge.

  But just as in China’s Cultural Revolution, central authorities will quickly lose control of conditions on the ground. They will maintain the illusion of control even as events spiral ever farther from their control. The falcon will no longer hear the falconer.

  In other words, once the social pressure cooker valve gives way, then the unleashed forces soon grasp that there are few limits on what they can criticize as long as they do so within an implicitly approved narrative–for example, “the wealthy” hoarded wealth and power and so it is just to claw it back by whatever means are available. Since the government failed to do so, the people will have to do so.

  The extreme inequalities of wealth and power that are now the dominant dynamic in America are heating the cultural pressure cooker, and when the pressure can no longer be contained, then being recognized as wealthy will shift very quickly from something desirable to something to avoid at all costs.

  The lesson of China’s Cultural Revolution in my view is that once the lid blows off, everything that was linear (predictable) goes non-linear (unpredictable, fragmented, contingent, emergent, prone to extremes, uncontrollable). If America experiences a Cultural Revolution, the outcome won’t lend itself to tidiness or predictability.

  To use an analogy from previous blog posts, if the pendulum is pushed to an extreme, when it’s released, it will reach an equivalent extreme (minus a bit of friction) at the opposite end. That could be an unexpected but entirely foreseeable Cultural Revolution.

  

  Those who claim that can’t happen in America are safely outside the pressure cooker, protected by a delusional confidence that since I’m doing great, everyone is doing great. Since real political agency is no longer allowed, then the pressure will find release outside the political system. It’s just Wetware 1.0 running defaults few recognize.

  Of related interest:

  The West’s Descent into ‘Cultural Revolution’ 1/18/19

  Can’t Get You Out of My Head (2021) – Part 1 of 6– Adam Curtis documentary series which includes extensive footage and commentary on China’s Cultural Revolution.

  Resistance, Revolution, Liberation: A Model for Positive Change (book)

  Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (book)

  Inequality and the Collapse of Privilege (book)

  *  *  *

  If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
   

  Tyler Durden
  Sat, 04/10/2021 – 16:10

• Why Is The Bitcoin Curve So Steep… And Could A Bitcoin ETF Be The Worst Possible Thing For Crypto
  Why Is The Bitcoin Curve So Steep… And Could A Bitcoin ETF Be The Worst Possible Thing For Crypto

  Having repeatedly tried (and failed) to “bash” bitcoin in what we said was a glaring attempt to force clients to offload exposure to JPM’s own prop traders, one which almost worked judging by bitcoin’s all time high price today (or else, is a testament to how terrible JPM’s research desk is)…

  JPMorgan’s daily bitcoin hitpiece is out. Just how bad does JPM prop want to be long this?

  — zerohedge (@zerohedge) January 25, 2021

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  … JPMorgan’s analysts are pivoting away from making blanket (and consistently wrong) value determinations especially and hilariously when it comes to defining bitcoin’s “intrinsic value” like when in its initiating coverage report from Feb 2014, the bank said that “bitcoin looks like an innovation worth limiting exposure to”, and anyone who listened has lost out on the single best investment opportunity of the millennium…

  

  … starting to analyze bitcoin as an established asset class – one interest in derivatives and other sources of leverage is exploding – and finding that not only is Wall Street ignoring all of JPM’s periodic hit pieces on bitcoin, but just can’t get enough of the cryptocurrency to the point that the futures curve has gotten extremely steep as an indication of mounting institutional demand.

  The good news is that in finally shifting away from nearly a decade of attempting to convince clients not to invest in bitcoin, JPM is actually starting to provide some value, like for example a report published by JPM’s rates strategist Joshua Younger, who traditionally focuses on such arcane topics as repo market plumbing and negative overnight rates, and who overnight published an article asking a critical question with profound consequences, namely “why is the bitcoin futures curve so steep?“

  Younger notes that as has been the case in the past, the growth and maturation of cryptocurrency markets has generated interest in derivatives and other sources of leverage and though futures trade against a range of pairs, “Bitcoin unsurprisingly dominates this nascent marketplace.” Similarly to the spot market, Younger notes that these products trade within a highly fragmented ecosystem, with nearly 30 active venues. The vast majority is traded offshore as well, with less than 15% of the total open interest listed on major, regulated domestic venues like the CME (Exhibit 1 below), with JPM noting that normalized depth in futures has also kept pace with the deepening of the cash market, suggesting it too is benefiting from institutional inflows and improved liquidity provision in spot (Exhibit 2).

  

  In total, futures represent a rather modest and consistent 2-3% of Bitcoin’s total capitalization. While this may not seem like a large fraction, there is reason to believe that price discovery in Bitcoin – where a handful of whales own the bulk of the float and rarely if ever make any market moves – is driven by high turnover in a relatively small fraction of the total stock. For example, recent analysis of the public blockchain suggests that less than 10% of tokens qualify as highly liquid while roughly half have not changed hands in more than a year.

  Further, turnover in derivatives is often higher than the spot market, particularly in the offshore exchanges that dominate activity, which suggests they are overrepresented in price discovery and risk transfer. That makes a clear sense of what positioning and pricing in derivatives is telling us about the underlying balance of flows key to understanding the market as a whole, and also suggests that derivatives have far more signal to institutional participation than the Grayscale bitcoin Trust which many, inexplicably, continue to believe best represents institutional flows.

  Still, as Younger notes, even a cursory look at positioning raises a puzzle, however. Though not the largest venue by any measure, Bitcoin futures listed at the CME have the benefit of public disclosure in the CFTC Commitment of Traders Report. Those data suggest that leveraged funds have increased their net short exposure to BTC futures over the past few months, with longs from smaller funds and retail investors who do not meet the reporting threshold and, more recently, institutional investors who do not fit neatly into the other major categories taking the other side.

  

  Similar to the Gamestop squeeze, this brings up a pertinent question: how could investors who are presumably very sensitive to short-term P/L fluctuations not just maintain but grow wrong-way exposure in the face of an explosive rally in spot prices?

  Here, Younger makes a critical point which many superficial analysts often ignore: as with many asset classes, the downside to these data are they only show one leg of the trade (the futures) and do not account for potential offsetting exposures in cash. Basis positions, which seek to earn carry by shorting the contract against longs in spot or equivalents (e.g., closed-end funds or ETFs) are not reflected. As the JPM strategist note, these trades are functionally offering leverage to the market by lending out cash holdings via derivatives, in most cases hoping to monetize the richness of futures which implies high funding costs.

  

  Such basis trades are particularly attractive in the cryptocurrency market: consider that as of this moment, the June CME Bitcoin contract offers ~25% annualized slide relative to spot! The richness of futures is even more acute if we broaden our view to include unrelated exchanges, where carry can be as high as 40+% (see chart above). To put this in context, very few fiat currencies, including both developed and emerging markets, offer easily monetizeable local yields (e.g., from FX swaps) in excess of 5%.

  

  There is of course the special case of TRY, but as JPM admits “with local consumer price inflation around 10% or higher, as compared to the explicitly deflationary monetary policy and cross-border transferability of Bitcoin, this hardly seems a plausible substitute.” Yes, to JPM bitcoin is now a more viable currency than the Turkish Lira. But we digress…

  The above brings up another key topic: how and why has such attractive pricing not simply been arbitraged away?

  As JPM suggests, one could perhaps blame counterparty and repatriation risk in unrelated offshore markets, but certainly not the CME. As the bank further points out, “in a market with rampant bullish sentiment and heavy retail involvement it is tempting to simply blame demand for leverage” (demand which would not have been there had the broader investing public listened to JPM in recent months when the bank unleashed one hit piece after another seeking to slam the cryptocurrency) And that is certainly true to some extent. However, as Younger points out, there are also some more idiosyncratic but equally important aspects of how these contracts are designed in the context of market segmentation that are specific to Bitcoin and likely explain a substantial fraction of this richness.

  The first is that CME futures are cash settled to their Bitcoin Reference Rate (BRR) Index. This is not a single observation of spot trading levels, but rather a 1-hour VWAP across a range of major exchanges as of 4pm LST. That may seem trivial, but the extreme volatility of Bitcoin relative to more traditional assets is worth bearing in mind here. Over the past month, for example, 60-minute volatility has not just been high (~0.6% based on volume-weighted prices) but also varied considerably over the course of the trading day (a high of ~0.9% around New York morning versus a low of ~0.3% during the Asian afternoon). Over a longer horizon, using just Coinbase prices, the monthly tracking error of BRR versus 4pm LST mids has at times been 2% or higher over the past year. Backtesting the performance of basis trades against spot levels as of the same time results in an annualized tracking error of more than 10% over the past year

  

  This raises a potentially more important issue presented by market segmentation. As JPMorgan confirms what we said three months ago, “not only is it rather difficult to replicate the settlement index in spot markets, but many institutional investors do not have access to Bitcoin , owing to concerns around custody, ambiguities around taxation and accounting, reputational risk and the origin of some tokens, and other potential issues.” This is hilarious because  back in December, when looking at the most recent Fund Manager survey, we said that Wall Street professionals were convinced that Bitcoin is becoming the most crowded trade on Wall Street, which as we said was impossible for the simple reason that most of these same “professionals” were not even involved in bitcoin. And now JPMorgan admits as much.

  Wall Street professionals, most of whom can’t trade bitcoin in their work accounts, are convinced that “long bitcoin” is the third most crowded trade. Shows just how meaningless these surveys are pic.twitter.com/4dPk3y1iUn

  — zerohedge (@zerohedge) December 15, 2020

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  Rather, according to the JPM strategist, a significant fraction of inflows to the space have been channeled through closed-end funds like GBTC. A number of factors have led to significant volatility in the price of these shares relative to NAV, introduce a new and often more important source of hedge inefficiency relative to final settlement prices to the futures contract. The problem has been particularly acute this year—were one to have been long GBTC versus the front Bitcoin contract over the past year, the annualized tracking error relative to ex-ante slide was more than 50%  Under those circumstances, one should expect significant risk premium priced into the futures.

  This raises what JPM correctly notes is an important question: what could drive a curve normalization?

  One likely critical catalyst would be the listing of a Bitcoin ETF tracking spot exchange rates in the U.S. or other major jurisdiction: not only would create/redeem for physical features result in much lower tracking error than closed-end funds, but it would also presumably be easier for prime brokers to take those securities as collateral. Access to leverage on the cash side will be key. At the moment listed basis trades require ~40% initial margin against the futures position in addition to ongoing variation margin and fully funding the opposing long GBTC positions, making return on cash noticeably less attractive than headline slide. One could of course turn to one of the increasing number of crypto-native lenders, but that likely represents an even higher hurdle than accessing the spot Bitcoin market directly.

  This – to JPMorgan  – makes launching a Bitcoin ETF in the US key to normalizing the pricing of Bitcoin futures. Such a move could reduce many barriers to entry, bringing much more new potential demand into the asset class. and pushing the price of cryptos even higher. That said, a risk factor worth considering, however, is that it would also make basis trading much more efficient and attractive at current pricing, particularly if those ETFs can be purchased on margin.

  Such a development would bring more basis demand into futures markets, especially the CME but also potentially other onshore exchanges, according to JPM. To the extent that contango normalizes for those contracts, we would expect some pass-through to  pricing on unrelated exchanges as well, since presumably there is some arbitrage activity between the two. Normalizing these implied funding spreads with more two-way flow is a prerequisite for broadening the base of participants in Bitcoin derivatives more generally, since it takes quite a bullish outlook to be willing to pay 30-40% annually to source levered long exposure.

  Another critical question is how closely tied these basis trades are to the nascent DeFi industry, particularly cryptolending. The value of tokens locked in these platforms has exploded along with other aspects of the market, increasing from less than $1bn only a year ago to more than $25bn as of this writing, which coincides with comparable growth in the futures market.

  

  Many of these products offer double-digit returns to borrow Bitcoin—expensive liabilities which must be offset by even higher-yielding assets. Though details are naturally hard to come by, because they are crypto-native, these platforms are ideally situated to onward lend those tokens via the unregulated derivatives market, making a healthy spread in the process. To the extent this is the case, if a listed ETF in the U.S. leads to compression in the CME-listed Bitcoin cash/futures basis which ultimately spreads offshore, they would naturally lower their own offering rates. JPM makes another good point that under these circumstances, it is unclear how the nascent DeFi industry would react to the resulting decline in crypto-based yields. Though far from a perfect analogy,  the Chinese experience in alternative payments suggests that the economics of participation tend to be a more reliable driver of inflows than network externalities or other more intangible considerations.

  The conclusion, ironically, is that the crypto industry and its de-fi spinoff space, appears to have now found a perfect niche for itself one where it is flourishing precisely because of the SEC’s refusal to greenlight a bitcoin ETF. If JPM is right, should the SEC reverse itself and allow one or more bitcoin ETFs, while the immediate outcome would be far greater demand, the consequences on the crypto market where curve and yield normalization would promptly follow, could be – paradoxically – quite devastating especially for the DeFi space which has seen exponential growth in the past year.

  While the Securities and Exchange Commission has thrown out all applications for Bitcoin ETFs in the US (unlike Canada where three local bitcoin ETFs have been approved), citing a manipulable market, a new administration, SEC chair and renewed institutional interest, means ETF applications are on the rise and the SEC is taking another look at them. Ironically, would an ETF approval be the worst thing possible for bitcoin?

  Tyler Durden
  Sat, 04/10/2021 – 15:45

• Buchanan: Vaccine Patriotism Versus Vaccine Globalism
  Buchanan: Vaccine Patriotism Versus Vaccine Globalism

  Authored by Patrick Buchanan,

  When the Pfizer and Moderna vaccines first proved their efficacy, preventing nearly 95% of coronavirus infections in those who got the shots in test trials, a vexing issue immediately arose.

  Who should get priority in receiving these life-saving shots?

  Generally speaking, the answer, while differing slightly from state to state, was that those most vulnerable to the virus, and those most vital to battling it, should be inoculated first.

  The most vital were doctors, nurses and emergency medical personnel in hospitals receiving infected patients. The most vulnerable were the elderly in nursing homes with comorbidities and compromised immune systems who would be the least likely to survive an infection.

  As the age for early inoculations dropped from 75 to 65, and then 50, and communities began to be vaccinated in greater numbers, a new issue arose: race. Blacks, peoples of color and the poor were not receiving inoculations at the same rate as the white and wealthy.

  Efforts were made to rectify any such inequity.

  

  However, almost no voice arose to say the world’s poor should be inoculated at the same time and at the same rate as Americans — with vaccines Americans had invented and produced.

  That role has now been filled. In The Washington Post of April 6, Darren Baker, President of the Ford Foundation, writes: “An equitable vaccine rollout must prioritize the most vulnerable around the world.”

  “Vast disparities are emerging in vaccine access — both within countries and between them,” says Baker, “especially for Afro-descendant and Indigenous communities.

  “Within countries, the gaps are stark. In the United States… White people remained nearly two times more likely to be vaccinated than their neighbors of color at the end of March. In Brazil, Indigenous populations are 10 times more likely to die of covid-19 than the general population… And in India, many members of poor Muslim and Dalit communities are denied access to the limited vaccine supply that is available…

  “Rich nations are hoarding the vaccines. Whether it’s the European Union blockading international vaccine exports entirely, or the United States stockpiling 30 million AstraZeneca doses, a wave of vaccine nationalism is depriving the world of much-needed supply.”

  What must we Americans do to end the inequity?

  Embrace a new policy of vaccine globalism and egalitarianism.

  “The United States could… vaccinate the world — mobilizing the resources of the U.S. military and other agencies to manufacture, ship and distribute doses around the world. … To paraphrase the Rev. Martin Luther King, Jr., vaccine inequality anywhere is a threat to global health everywhere.”

  Walker reflects what might be called Ford Foundation values. But are these American values?

  Is it wrong for the U.S. government to put Americans first in the distribution of life-saving vaccines, ahead of people from any other country?

  Is it wrong for the U.S. to ensure that every American who wants a shot gets one, before taking on the task of vaccinating the rest of the world?

  Is it wrong for America to put Americans first?

  “Vaccine nationalism” seems but a synonym for vaccine patriotism.

  If and when we have a surplus sufficiently large to send our vaccines abroad, would it be wrong to prioritize nations that are tried and true friends and allies like Canada and Britain?

  When it comes to moral obligation, especially when it involves a matter so serious as human life, ought not one’s own family and friends, community and country come first?

  Again, vaccine nationalism mandates putting fellow Americans first in receiving vaccines Americans discovered, tested and produced, even if that contradicts Ford Foundation values?

  While all peoples may be equal in their God-given rights to liberty and life, the duty of the U.S. government is to protect and defend first and foremost the rights, and the health and safety of American citizens.

  King may have written, “Injustice anywhere is a threat to justice everywhere.” But America is not responsible for “justice everywhere” — a utopian concept — but to establish justice to the degree it can in the USA.

  Nor is inequality always a manifestation of injustice.

  Easter Sunday is just behind us, the day Christians celebrate the Resurrection of Jesus Christ who taught, “Greater love than this hath no man that he lay down his life for his friend.”

  Such individuals are saints, and that is indeed sanctity.

  But natural law teaches that, when it comes to love and loyalty, one puts one’s own family and country first.

  “Vaccine inequality,” says Walker, is “a crisis to be solved… We must move away from vaccine nationalism to vaccine equity.

  “An equitable vaccine rollout must prioritize and protect the most vulnerable in our societies – from the Dalit community in India, to Indigenous populations in Brazil, to essential farm workers and grocery store clerks throughout the United States.”

  Sorry, but India’s Dalit community is Narendra Modi’s responsibility.

  The indigenous population of Brazil is Jair Bolsonaro’s responsibility.

  And the “farm workers and grocery store clerks in the USA” are ours.

  Tyler Durden
  Sat, 04/10/2021 – 15:20

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• Infrastructure Bills Do Not Lead To Recovery, Only Increased Federal Control
  Infrastructure Bills Do Not Lead To Recovery, Only Increased Federal Control

  Authored by Alt-Market.us’ Brandon Smith and originally published at Birch Gold Group,

  The concept of infrastructure stimulus has been hyped for decades as a kind of cure-all for economic decline. The propaganda runs parallel to the narrative of the “savior” of the Great Depression, Franklin Delano Roosevelt. In fact, one cannot examine the presidency of FDR without being bombarded with one sided worship of infrastructure spending and the “New Deal.”

  

  The New Deal is often credited in left-leaning literature as being the singular cure for the depression, and FDR by extension has been handed messiah status among leftists. The New Deal is supposedly proof that massive socialized federal and central bank interventions through public works programs is an economic ambrosia. So, it’s not surprising that nearly every president since the Great Depression has argued for an unprecedented infrastructure bill when faced with economic collapse. A large portion of the public on both sides of the aisle has been trained to think these programs will save us.

  Biden, in particular, has made historic stimulus spending the very first platform of his administration, and consistently cites FDR and Lyndon Johnson as patron saints of his infrastructure bill. If it worked for them, then obviously it will work for him… right?

  Actually, the New Deal wasn’t a great deal

  In reality, the public works and welfare programs of FDR in particular had very little to do with the ending of the Great Depression. In fact, the New Deal actually made the situation worse.

  Roosevelt’s own Treasury Secretary, Henry Morgenthau, lamented on May 6th, 1939 after two full terms of FDR’s presidency and stimulus programs that the New Deal was a complete failure. He stated to fellow Democrats during a session of the House Ways and Means Committee that:

  “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!”

  High unemployment and declining living standards were an epidemic in the U.S. throughout the 1930s and well into World War II. The Census Bureau outlines the dismal state of the financial system and the U.S. consumer throughout this period in its “Historical Statistics of the United States.” By 1939 the stock market had crashed on multiple occasions, car sales imploded by 30%, business closures increased by 50%, and real estate foreclosures were still near record highs. The New Deal had achieved minimal benefits of limited scope, but not much else. For the average American, it was as if nothing had changed in a decade.

  That said, for certain major companies and big banks, the gains were incredible. Companies like General Electric, IBM, Proctor and Gamble and JP Morgan saw endless profits during the Great Depression while buying up smaller competitors for pennies on the dollar. Those companies involved in public works programs siphoned government money like a black hole while very little trickled down to American workers. All in all, the Great Depression was a windfall for the corporate elite as wealth was consolidated and centralized into fewer and fewer hands.

  So we have to ask, if the New Deal was a failure and did nothing to solve the depression problem, what did solve it? Some historians and journalists suggest the beginning of World War II and increased defense spending saved America. This is incorrect. As noted by Robert Higgs, the U.S. standard of living continued to decline throughout World War II. It was not the beginning of the war that saved America, but “After the war genuine prosperity returned for the first time since 1929.”

  How the U.S. led the world out of the war

  The U.S. was one of the only industrialized nations on the planet that had been left mostly untouched by the destruction. Because of this, all other nations had to turn to the U.S. for manufacturing during the long rebuilding process. In Europe, this process carried on well into the 1950s. The U.S. had very little competition, so much so that the U.S. dollar’s reserve status increased to the point of complete dominance. If you wanted access to manufactured goods, you had to trade with the U.S., and to trade with the U.S., you had to have a stockpile of U.S. dollars.

  What I see today is a change in the flow of global commerce – in the opposite direction from the post war era. Yes, trillions of dollars in stimulus measures have created a short term reversal of the pandemic collapse. In fact, there is much evidence to suggest the economy is overheating. Price inflation is becoming rampant in numerous sectors.

  In the meantime, U.S. Treasuries are being dumped by foreign investors and the dollar is in decline. Central banks are now dumping the dollar, decreasing their reserves to the lowest level since 1995.

  China is now the world’s largest manufacturing base, leaving very little major industry on U.S. soil. In the background, globalists are calling for a “Great Reset” of the world economy that would centralize monetary policy even further and create the foundation of a cashless society built on a digital reserve currency system.

  What’s the massive infrastructure spending really about?

  I believe, according to the evidence as well as past failures like the New Deal, that Biden’s infrastructure plans will accelerate the U.S. collapse instead of reversing it. The U.S. GDP might increase, but only because it is calculated to include almost every dime the government prints out of thin air and spends. Production of fiat money is not the same as real production within the economy.

  Trillions of dollars in public works programs might create more jobs, but it will also inflate prices as the dollar goes into decline. So, unless wages are adjusted constantly according to price increases, people will have jobs, but still won’t be able to afford a comfortable standard of living. This leads to stagflation, in which prices continue to rise while wages and consumption stagnate.

  Another Catch-22 to consider is that if inflation becomes rampant, the Federal Reserve may be compelled (or claim they are compelled) to raise interest rates significantly in a short span of time. This means an immediate slowdown in the flow of overnight loans to major banks, an immediate slowdown in loans to large and small businesses, an immediate crash in credit options for consumers, and an overall crash in consumer spending. You might recognize this as the recipe that created the 1981-1982 recession, the third-worst in the 20th century.

  In other words, the choice is stagflation, or deflationary depression.

  Finally, I would point out that there may also be an ulterior motive for the deluge of federal dollars into state economies through public works. Currently, Conservative states are increasingly willing to risk the consequences of returning to business as usual, regardless of federal mandates. Resistance is building against pandemic-related restrictions.

  Red states are also seeing a far superior financial recovery when compared to blue states. Blue states have sabotaged themselves with lockdowns while red states have remained more open. However, the Biden Administration is hell bent on keeping pandemic restrictions in place nationwide

  What if infrastructure spending plans are designed to trap red states into compliance with future covid mandates? What if the goal is to bribe these states with trillions in stimulus, but only if they submit to federal authority? I suspect that Biden’s public works bill is partially intended to be a blue state bailout, and money will be withheld from any conservative state that refuses to conform to lockdowns.

  Only time will tell what the true agenda is, but this much is undeniable given the facts at hand: Biden’s plan is either:

  • an act of desperation,

  • a deliberate attempt to pull the rug out from under the U.S. dollar and the economy to jump-start the globalist reset,

  • or a scheme to lock state governments into obedience over pandemic restrictions.

  

  Whatever else Biden’s “New New Deal” is, it is certainly NOT a plan for economic recovery.

  *  *  *

  With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.

  Tyler Durden
  Fri, 04/09/2021 – 23:40

• Remains Of Alien Planet Lurk Deep Within Earth's Mantle, Researchers Suggest 
  Remains Of Alien Planet Lurk Deep Within Earth’s Mantle, Researchers Suggest 

  Researchers theorize that the Moon formed when a protoplanet, called Theia, struck Earth billions of years ago. They also say the alien planet’s remains are hiding deep within Earth’s mantle.

  Researchers with Arizona State University’s (ASU) School of Earth and Space Exploration published a paper titled “Giant Impact Origin For The Large Low Shear Velocity Provinces,” which says mysterious continent-sized formations are hiding under the Pacific Ocean and Africa, are, in fact, remnants of Theia.

  The impact, approximately 4.5 billion years ago, is thought to have transformed Earth’s surface into a sea of magma and may be responsible for ejecting enough planetary debris to create the Moon. 

  

  Qian Yuan, the lead researcher behind the new report, studies geodynamics at ASU, explained that “the left-over Theia mantle materials may have sunk to the bottom of Earth’s mantle and caused the Large Low Shear Velocity Provinces (LLSVPs).”

  Yuan told Bussiness Insider the collision preserved parts of Theia’s mantel in the Earth’s mantel – this could only be due to the alien planet’s mantel is denser.

  He said those pieces are “millions of times larger than Mount Everest in terms of volume.” 

  Researchers said the LLSVPs are 1.5% and 3.5% denser than the rest of Earth’s mantle, and hotter.

  If the planet Theia was rich in iron and highly dense, Yuan’s models showed, any pieces of it that broke off when it hit Earth would have sunk deep into our planet’s mantle. There, they could have accumulated undisturbed, rather than getting mixed into the rest of the mantle.

  

  It’s also possible denser chunks of Earth’s crust sank into the mantle and joined them, contributing to the blobs’ growth over time, Yuan said.

  Figuring out what these slabs are made of is challenging. Their deepest parts are 1,800 miles under our feet, in the part of the mantle closest to Earth’s outer core. They’re 621 miles (1,000 kilometers) high and two to three times wider than they are tall. 

  But scientists have figured out that plumes of hot rock and magma from some Icelandic and Samoan volcanoes came from these blobs. By analyzing this magma’s makeup, researchers can glean insight into the composition of these mysterious buried chunks. According to a 2019 study, some elements in the volcanic plumes date back to about 4.5 billion years ago — when Theia supposedly hit Earth. – Bussiness Insider

  Yuan’s findings will soon be published in the journal Geophysical Research Letters. The research may finally offer some proof of the LLSVPs that lurk deep within the Earth and the Moon’s formation. 

  Read the report here:

  Tyler Durden
  Fri, 04/09/2021 – 23:20

• Kissinger Warns Washington: Accept New Global System Or Face A Pre-WWI Geopolitical Situation
  Kissinger Warns Washington: Accept New Global System Or Face A Pre-WWI Geopolitical Situation

  Authored by Paul Antonopoulos via GlobalResearch.ca,

  With the White House continually provoking tensions against Russia and China, the doyen of American foreign policy, Henry Kissinger, dramatically warned Washington last week to either agree to a new international system or continue pushing tensions that are leading to a situation similar to the eve of World War One.

  

  In a recent Chatham House webinar with former British Foreign Secretary Jeremy Hunt, 97-year-old Kissinger called on the U.S. to create a balance with existing global forces, adding

  “if you imagine that the world commits itself to an endless competition based on the dominance of whoever is superior at the moment, then a breakdown of the order is inevitable. And the consequences of a breakdown would be catastrophic.”

  The veteran diplomat urged the U.S. to understand that not every issue has “final solutions” and warned

  “if we don’t get to an understanding with China on that point, then we will be in a pre-World War One-type situation in which there are perennial conflicts that get solved on an immediate basis but one of them gets out of control at some point.”

  However, the idea that the U.S. should stop imposing its will on everyone else will not be easily accepted in Washington. This is attested by the sharp rhetoric and personal insults that U.S. President Joe Biden continually levels against his Russian and Chinese counterparts, Vladimir Putin and Xi Jinping.  

  High-ranking Chinese official Yang Jiechi told U.S. Secretary of State Anthony Blinken on March 18 in Alaska that “the United States does not have the qualification to say that it wants to speak to China from a position of strength.” Then, Russian Foreign Minister Sergei Lavrov and his Chinese counterpart Wang Yi boldly said days later on March 22 during their meeting in Beijing that they “jointly safeguard multilateralism, maintain the international system with the UN at its core and the international order based on international law, while firmly opposing unilateral sanctions as well as interference in other countries’ internal affairs.”

  Kissinger’s career is washed in blood when we remember his backing of Pakistan during Bangladesh’s War of Independence despite the massacre of hundreds of thousands of people and mass rape; orchestrated a military coup in Chile to remove democratically elected Allende in favor of the Pinochet dictatorship; tacitly supported Indonesia’s mass killing of hundreds of thousands of East Timorese; and, blessed Turkey’s invasion of northern Cyprus that led to 200,000 Greek refugees without a right of return – among many other things.

  However, his most recent statement about the U.S. and the international system is actually a mature proposal that would be beneficial for world peace if the Biden administration accepts his advice that the global order is changing. It is unlikely that Washington is ready to unilaterally end its hard and soft power aggression as it falsely believes it can maintain a unipolar order.

  

  It is always difficult for Great Powers to accept that the world has changed, especially when it is to their detriment. The behavior of the Biden administration, which deliberately uses threatening and inappropriate rhetoric, demonstrates that it will not rationally accept a multipolar world system, especially since Russophobia and Sinophobia are on the rise.

  Personal insults against Putin and Xi are an expression of American impotence, especially when we consider that the U.S. historically did not engage in this kind of rhetoric when it was at the zenith of its power. The U.S. is no longer the world’s sole superpower and its rivals are no longer accepting such aggression, which is exactly why the Chinese delegation that went to Alaska last month clearly stated that it does not accept any language of force.

  An additional problem for the U.S. is whether its allies will strain their relations with China and Russia, and whether they will accept being pushed into conflicts with them. There are indications that the most important European countries will resist U.S. demands. This is evidenced by the Nord Stream 2 issue where American attempts to prevent its construction are being met with resistance from important European Union countries despite the endless complaints from minnows like Lithuania and Poland.

  Robert Gates, former director of the CIA and U.S. Secretary of Defense, admitted in a recent interview with the Washington Post that sanctions against Russia do not any good for the U.S. In The National Interest, Robert Kaplan describes Russia as a “problem from hell” because it cannot be subdued. Kaplan offered reasons why it is necessary for Russia to “move away from its one-sided alliance with China” and find balance with the U.S.

  Washington’s misguided policy of aggression to maintain a unipolar world order worked in the favor of China and Russia, especially in accelerating their cooperation. The West can no longer suppress China’s economic power or Russia’s military power. Military strategists in the West are aware that the Russo-Sino cooperation cannot be compensated by anything. 

  In the end, Washington will have to resort to a strategy resembling Kissinger’s suggestion of finding equilibrium, whilst also accepting the multipolar reality that has been established.

  Tyler Durden
  Fri, 04/09/2021 – 23:00

• What Was The Vatican Searching For When They Built Secret Tunnel Under Jerusalem Church? 
  What Was The Vatican Searching For When They Built Secret Tunnel Under Jerusalem Church? 

  The Vatican has constructed a secret underground tunnel in Jerusalem that has infuriated a local preservation group who claim the tunnel resides in a sensitive area that may contain antiquities and other artifacts.  

  The Regavim Movement, a research-based think tank and lobbying group dedicated to preserving Israel’s national lands and resources, recently filed a petition with the Jerusalem District Court, demanding the city take action against the illegal underground tunnel. 

  According to the petition submitted to the Jerusalem District Court, the Regavim Movement alleges the church concealed the existence of the 100-meter long tunnel that infringes on public property in an area allegedly known for archaeological remains.

  

  The petition says the tunnel connects the Church of the Dormition on Mount Zion in the Old City of Jerusalem to “Beit Josef,” a nearby guest house. 

  “When the details began to come into focus, we demanded over and over that the Jerusalem Municipality publicize the documentation of its findings, as required by the Freedom of Information Law. We further demanded that oversight, inspection and law enforcement procedures be taken immediately, to restore the site to its previous condition either by sealing off or demolishing the tunnel,” attorneys Avi Segal and Yael Cinnamon of the Regavim Movement told The Jerusalem Post. 

  “We filed this petition only when our repeated requests to the Jerusalem Municipality were not answered,” the attorneys said.

  Naomi Kahn, director of Regavim’s International Division, told Jewish News Syndicate, “the fact that the State of Israel has not protected the antiquities that we know are there and how the digging of the tunnel has disturbed what’s there is outrageous.”

  “To dig a tunnel in such a sensitive area without any oversight, inspection or access to the public is insane,” Kahn added. “They had no right to do so, to begin with.”

  According to a statement by Regavim last year, their “investigation revealed that along the path of the tunnel, underground rooms contain ancient artifacts, and the tunnel itself encroaches to a significant extent on public property.” 

  Watch: The Church’s secret tunnel hidden by the Jerusalem Municipality

  There are many questions about why the Vatican secretly constructed a tunnel through a plot of land known for ancient artifacts. Perhaps the tunnel’s true intent is not for transportation, but rather church officials were searching for something… 

  Tyler Durden
  Fri, 04/09/2021 – 22:40

• Is 2021's Fictional Cyberattack Simulation Prepping Us For A Cyber Pandemic?
  Is 2021’s Fictional Cyberattack Simulation Prepping Us For A Cyber Pandemic?

  Authored by Robert Wheeler via The Organic Prepper blog,

  Many readers are aware of a simulation conducted by the World Economic Forum called Event 201 that preceded the COVID pandemic. Event 201 eerily described and seemed to predict the pandemic. (There was also a pandemic simulation called Clade X that preceded Covid.)

  

  What some readers may not know, however, is that the World Economic Forum conducted a similar simulation, Cyber Polygon 2020. This 2020 event also predicted a global catastrophe.

  A new cyberattack simulation, Cyber Polygon, will occur in July 2021.

  The WEF, Russia’s Sberbank, and its cybersecurity subsidiary BIZONE announced in February that a new cyberattack simulation would occur July 9, 2021. The event will simulate a supply-chain cyberattack similar to the SolarWinds attack that would “assess the cyber resilience” of the exercise participants. 

  From the Article written by Whitney Webb and Johnny Vedmore, “From Event 201 To Cyber Polygon: The WEF’s Simulation Of A Coming Cyber Pandemic” :

  The exercise comes several months after the WEF, the “international organization for public-private cooperation” that counts the world’s richest elite among its members, formally announced its movement for a Great Reset, which would involve the coordinated transition to a Fourth Industrial Revolution global economy in which human workers become increasingly irrelevant. This revolution, including its biggest proponent, WEF founder Klaus Schwab, has previously presented a major problem for WEF members and member organizations in terms of what will happen to the masses of people left unemployed by the increasing automation and digitalization in the workplace.

  New economic systems that are digitally based and either partnered with or run by central banks are a key part of the WEF’s Great Reset, and such systems would be part of the answer to controlling the masses of the recently unemployed. As others have noted, these digital monopolies, not just financial services, would allow those who control them to “turn off” a person’s money and access to services if that individual does not comply with certain laws, mandates and regulations.

  How do the event coordinators describe Cyber Polygon 2021?

  The newly updated event website, Cyber Polygon 2021, ominously warns as the world is more interconnected and global digitalization accelerates “a single vulnerable link is enough to bring down the entire system, just like the domino effect. A secure approach to digital development today will determine the future of humanity for decades to come.”

  From the World Economic Forum site:

  What is Cyber Polygon?

  Cyber Polygon is a unique cybersecurity event that combines the world’s largest technical training exercise for corporate teams and an online conference featuring senior officials from international organisations and leading corporations.

  Cyber Polygon in 2021

  This year discussions during the live-streamed conference will centre on secure development of ecosystems. With global digitalisation further accelerating and people, companies, and countries becoming ever more interconnected, security of every single element of a supply-chain is key to ensuring the sustainability of the whole system.

  During the technical exercise, participants will hone their practical skills in mitigating a targeted supply chain attack on a corporate ecosystem in real time.

  Crises seem to conveniently arise when the people in power want change.

  All this ties right into Universal Basic Income. The very popular UBI, introduced with even more vigor after the COVID 19 pandemic, has popularized consistent “stimulus payments” to survive the crisis. The idea of the UBI has been thrown around as a solution to poverty for some time, with bloggers like Daisy Luther comparing it to modern-day feudalism. With the building blocks of the technological control grid already in place, adding a UBI forms a relatively strong foundation. 

  The WEF has settled on the model of “stakeholder capitalism.” In name and theory, it appears to be an inclusive type of capitalism. However, it would essentially merge the public and private sectors, which would, as Webb and Vedmore write, create “a system much more like Mussolini’s corporatist style of fascism than anything else.” To get to that point, however, the current system must collapse. Its replacement society will be successfully marketed to the general population as being better than its predecessor.

  “When the world’s most powerful people, such as members of the WEF,” write Webb and Vedmore, “desire to make radical changes, crises conveniently emerge—whether a war, a plague, or economic collapse—that enable a “reset” of the system, which is frequently accompanied by a massive upward transfer of wealth.”

  Is there a possible warming of international relations with Russia?

  What’s also notable about the upcoming simulation is Russia’s inclusion as a leader of such an important global event.

  If there is a real cyberattack that disables and disrupts a large portion of the global financial system, who will be blamed? Is the overused Russian hacker narrative coming to an end?

  The answer to that question might be the final nail in the coffin of anything resembling a free society.

  How do we prepare for a real cyberattack?

  Many of you would probably rather not wait for a fictional simulation to tell you how to prepare for this. Here’s what you need to know about them and how to prepare for a cyber attack. Cyber attacks are a growing risk, experts say, with some even suggesting that cyber warfare will be the battleground of the future.

  It’s interesting how simulations, trial runs, and mock attacks often seem to precede actual events.

  Tyler Durden
  Fri, 04/09/2021 – 22:20

• Morning Traffic Congestion Is Returning To New York
  Morning Traffic Congestion Is Returning To New York

  Things are slowly getting back to normal in the Big Apple (or they would be, if any rich people still wanted to live there after Cuomo is done pushing their tax rate near triple digits).

  While peak congestion remains mostly unchanged across the U.S, the morning peak appears to be slowly re-emerging in New York City as commuters begin to return to offices, according to an analysis from Bloomberg.

  

  Elsewhere across North America, traffic levels remain around half of normal levels while outside the U.S., congestion levels have ticked higher across South America, in particular in Sao Paulo and Lima.

  

  It’s a different story in China, where average hourly peak congestion on a five-day rolling average basis in the major Chinese cities (Beijing, Shanghai and Guangzhou) remains close to pre-pandemic levels, with peak morning traffic in Beijing and Shanghai exceeding normal levels, while the recovery remains incomplete only in Guangzhou. At the same time, the recovery is advancing in many parts of South and South East Asia, with the re-emergence of the morning peak in many cities signaling that commuters are returning to offices.

  

  Looking at Europe, the current impact of the latest round of lockdowns across Europe is difficult to discern due to the Easter public holiday affecting normal mid-week travel patterns. As Bloomberg notes, lockdowns of varying stringency remain in force across Italy, France, the U.K., parts of Scandinavia, Iberia and Greece, although the recovery appears to be underway in Spain and Portugal.

  Tyler Durden
  Fri, 04/09/2021 – 22:00

• Canada To Censor "Hurtful" Comments About Politicians, Implement Internet Kill-Switch
  Canada To Censor “Hurtful” Comments About Politicians, Implement Internet Kill-Switch

  Authored by Mark Jeftovic via BombThrower.com,

  …but, constituents to remain fair game for abuse from party apparatchiks.

  A colleague forwarded me the text of an article from Blackrocks Reporter, which covers Canadian politics from Ottawa, our capitol.

  It’s a report on Federal Heritage Minister Steven Guibeault’s ongoing vendetta against non-conforming political speech on the internet, in which he’s calling for censorship of “hurtful” comments against politicians and implementation of an internet killswitch to facilitate it.

   

  Federal Heritage Minister Steven Guibeault

  Blackrocks is behind a paywall, permit me to quote it here:

  ‘Federal internet censors should target hurtful words against politicians, says Heritage Minister Steven Guilbeault. The Minister added pending regulations may include an internet kill switch to block websites deemed hurtful, but called it a “nuclear” option.

  “We have seen too many examples of public officials retreating from public service due to the hateful online content targeted towards themselves or even their families,” said Guilbeault.  “I have seen firsthand alongside other Canadians the damaging effects harmful content has on our families, our values and our institutions. As a dad and a stepdad to six kids, I know more can and should be done to create a safer online environment.”

  Guilbeault made his remarks in a podcast sponsored by Canada 2020, an Ottawa think tank affiliated with the Liberal Party. Legislation to censor internet content will be introduced shortly, he said.

  “I am confident we can get this adopted,” said Guilbeault. “Once the legislation is adopted, clearly creating a new body, a new regulator like that in Canada, would take some time.”’

  The same story is covered here by the Post Millienial (the rest of Canada’s “approved media”, as in the ones who received hundreds of millions in tax breaks and subsidies from the Federal Government in the run up to the last election, are not giving it a lot of airtime for some reason).

  The goal is obviously to silence non-conforming analysis

  Coincidentally or not Guilbeault has been relentlessly pursuing the recommendations of the Canada’s Broadband Telecom Legislative Review (BTLR), which I wrote about last year and tabled a petition to the House of Commons to kill it. Then the whole pandemic thing broke out, and we entered this “New Normal”.

  After BTLR published, Canada’s “approved media”  joined the chorus calling for more regulation against unlicensed news outlets.

  For a political cabinet minister to seriously push forward new rules silencing free speech directed against politicians is quite rich, having just last week been publicly attacked and mocked by a senior advisor to Premier Doug Ford (my transgression? Raising the issue of small business bankruptcies under lockdowns with my MPP).

  

  Under this plan, it will still be perfectly fine for political apparatchiks to hurl insults and ad hominem attacks at constituents raising legitimate issues with their MPPs. But under these impending new regulations against “political taunts” and even “unlicensed internet undertakings” my write up on the entire incident, or even my commentary on the proposal here, might land me afoul of The New Rules.

  (Cue up Jacobs, who will probably come barrelling in here and call me a moron because Guilbeault is Federal and he’s provincial, so I’ll save him the trouble to say: it’s all one political class)

  These are the last gasps of our political overlords

  This global, near ubiquitous ham-fisted reaction to the global pandemic has ushered us into an era of hypernormalization. That’s simply defined as when the mental fatigue and psychic stress of pretending to believe demonstrably false and often contradictory narratives begins to manifest in a kind of mass neurosis.

  Being brainwashed or coerced into accepting ideologies that have been decided by oligarchs and billionaire Sith Lords are an additional antagonizing factor.

  Sooner or later a tipping point will be reached and the public will simply abandon what they see as an increasingly non-functional system, one where the entire might of the state is arrayed against their own interests.

  When this happens it can channel into populism, deteriorate into (arguably deserved) demagoguery, or perhaps more hopefully a type of mass opt-out of the current system into the next iteration of human organization and governance.

  We’re in the early innings of an inexorable transition from the age of nation states into network , or crypto states (“crypto populism”?). How that looks is often the topic of discussion on our AxisOfEasy podcasts, it can be chilling, as in if the Network State is Facebook, or Google. Or it can be liberating, like a decentralized mosaic of Hanseatic Crypto States. That’s a choice we, as people and citizens actually can participate in, right now, today.

  But these cocooned, self-serving elites running these dilapidated nation states? They’re just rigging a game that’s increasingly irrelevant. It doesn’t really matter because their era is over.

  No matter which trajectory things pursue, one thing is certain: the next step is a cascading loss of institutional and political legitimacy, such as what happened in 1989 with the implosion of communism and the Warsaw Pact states. A year earlier, not one geo-political strategist, let alone party apparatchik would have forecasted the coming collapse. Eighteen months later, it was all over.

  I think we’re headed for a similar period over the next few years, and it’s the current leadership and the incumbent elites who brought us here.

  *  *  *

  To receive future posts in your mailbox join the free Bombthrower mailing list or follow me on Twitter. 

  Tyler Durden
  Fri, 04/09/2021 – 21:40

• New Neuralink Video Purportedly Shows Monkey Playing Video Games Using Its Mind
  New Neuralink Video Purportedly Shows Monkey Playing Video Games Using Its Mind

  The man who can’t seem to keep his cars (or his recent spaceships) from spontaneously combusting now claims that his mind-machine interface company, Neuralink, can allow a monkey to play video games using only its mind.

  Neuralink released footage this week that purports to show a monkey named Pager, who is nine years old, playing video games in exchange for a banana smoothie delivered through a straw. Pager was hooked up to a Neuralink system six weeks ago, according to RT.

  The video shows links recording activity from more than 2,000 electrodes implanted in the monkey’s motor cortex. The activity is then wirelessly fed to a machine-learning algorithm, which “sensed modulations in the monkey’s neurons and allowed the system to predict intended hand movements via a mathematical model of neural activity and the corresponding joystick movements.”

  Researchers calibrated the system, the report says, by monitoring Pager’s brain waves as it manipulated a joystick. Then, they disconnected the controller without telling the monkey, who wound up playing pong using only its brain, sans the joystick.

  And what would an inch of progress be without Elon Musk taking a mile? Musk quickly took to Twitter to proclaim that Neuralink’s first product would “enable someone with paralysis to use a smartphone with their mind faster than someone using thumbs”. 

  “Later versions will be able to shunt signals from Neuralinks in brain to Neuralinks in body motor/sensory neuron clusters, thus enabling, for example, paraplegics to walk again,” Musk wrote. 

  Later versions will be able to shunt signals from Neuralinks in brain to Neuralinks in body motor/sensory neuron clusters, thus enabling, for example, paraplegics to walk again

  — Elon Musk (@elonmusk) April 9, 2021

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

  This prompted some critics to inconveniently point out some of Musk’s past predictions, and timelines.

  Hmmm… what happened to this claim?https://t.co/SwcK802goe

  — Gordon Johnson (@GordonJohnson19) April 9, 2021

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

  We think it must be capital raising time for Neuralink. Either way, it’s starting to smell like the Neuralink SPAC – or perhaps the Neuralink/SpaceX merger, or something equally as heinous – is just right around the corner.

  Tyler Durden
  Fri, 04/09/2021 – 21:20

• Section 230 Isn't The Problem, Payment Networks Are
  Section 230 Isn’t The Problem, Payment Networks Are

  Authored by ‘Josh’ via MadAtTheInternet.com,

  Section 230 of the Communications Decency Act is one of the most important pieces of legislation in American history.  Passed into law in 1996, it has overseen the entirety of the consumer Internet’s development.  Its premise is simple: Internet service providers and platform operators are not responsible for civil damages that result from user-generated content that they host or manage.  These protections are why the United States is the first choice for hosting any digital service.  Without them, the entire world would suffer a less free Internet.

  I have operated a controversial website called the Kiwi Farms for 8 years and was featured in ZeroHedge in 2019 after telling New Zealand police I would not be surrendering my user’s information to them.  My website thrives and doubles in size each year, primarily thanks to Section 230. I can allow my users to say almost anything they want without having to worry about being sued for what they say.  Without these essential protections, I would not be able to host in the United States.

  Unfortunately, Section 230 has been defamed as the reason Facebook, Twitter, Google, et al behave the way they do.  This is not true.  These businesses censor because they have personal motivations to do so.  More importantly, they have financial motivations to do so.

  I hope to convince a reasonable person that:

  1. Payment networks must be regulated to give fair access.

  2. Section 230 is essential and modifying it harms online speech.

  3. Big tech does not need Section 230, but you do.

  4. You should learn how to use cryptocurrencies right now.

  

  The payment networks are more powerful than big tech. 

  Without the consent of all four major payment networks to stay in business, even mighty tech giants are vulnerable to lose billions of dollars in revenue.  The various agreements enforced by the four major payment networks (MasterCard, Visa, Amex, and Discover) impose rules that any business wanting to exist in the digital economy must obey. Not all these rules are written.

  The big payment networks like to stay out of the public eye.  They avoid attention by using blacklists which they claim only banks can add to, but which they manage and share. You also never deal with the payment network directly. An eCommerce site passes your credit card information to a “payment gateway”, which is plugged into a “payment processor”, and that payment processor handles communications with the payment networks. Each of these are usually different companies. When you get banned from processing payments, you are told so by your payment gateway or payment processor, but the decision can come from much higher up. If it were, you’d be lucky to find out.

  Consider a company like Patreon. They are an online crowdfunding service which handles donations from many supporters to many online content creators. Patreon has its own rules, uses Stripe as a payment gateway and payment processor, agrees to Stripe’s terms of service, and then Stripe coordinates with all major payment networks which each have their own set of agreements. That means every creator on Patreon must obey six different sets of rules. If the gateway were its own company, it would be seven. It is no wonder so many people get banned, as only the most tepid and inoffensive content creators could hope to meet so many different standards!

  Patreon must keep Stripe happy to stay in business, and Stripe must keep all four payment networks happy to stay in business.  If any one of MasterCard, Visa, Amex, or Discover pass a rule, then it affects the entire downstream ecosystem.  If Discover (5% of the market) says an industry or behavior is prohibited, then Stripe must enforce that rule on all the merchants on their service (even merchants who do not process Discover).  If Discover were to cut ties with Stripe, then Stripe would lose at least 5% of their transactions over night and any merchants who do want to process Discover cards.  That is a large and dramatic blow to any company operating on small margins.

  I do not claim it is MasterCard’s fault that Twitter banned Trump.  I am sure Twitter makes many stupid decisions all on its own.  The problem is that these rules—how they are enforced, the secrecy in which they are enforced, and unappealable finality of these decisions—stifle competition.  Startups like Gab quickly find themselves told they are not allowed to make money. This problem has never existed before on the scale that it does now.

  This phenomenon transcends the type of startup. All alt-tech is trodden upon equally. Patreon competitor New Project 2 was first banned from a payment processor at the demand of Discover, then after finding a new payment processor was put on MATCH (the MasterCard blocklist), prohibiting the company from ever finding another payment processor.  If Dick Masterson (the owner of NP2) made a new company to try and get around MATCH for the purpose of continuing NP2, he would very likely find his person on that blocklist directly, ending all his businesses at once.

  These blocklists, and the risk management factors which decide who goes on them, are “trade secrets” and you cannot even sue to figure out why you were added to them.  New Project 2 was blacklisted for “Violation of Standards”, which prohibits it from even using so-called high-risk processors. Nobody knows what “Violation of Standards” means. Dick only found some details of New Project 2’s blacklisting because he called the banks and annoyed the right people for days until they reluctantly admitted who was actually at fault.  Payment networks claim they do not add merchants to the blacklists, and that only partner banks can, but they will call these banks and tell them to do it on their behalf, and the banks are not in any position to refuse.

  PayPal has not been mentioned so far, but rest assured they are one of the most egregious and will drop you first.  BitChute, a video platform competing with YouTube, was banned from PayPal.  ZeroHedge itself is banned from using PayPal.  To this day, because of my association with the Kiwi Farms, I cannot use the Uber app to get a taxi because Uber uses PayPal to process credit cards and I am banned from PayPal.

  Before we regulate the Internet, why don’t we try to regulate the payment networks? 

  Give the market a fair chance at competing with tech giants by enforcing fair access to credit and debit card processing!

  The Office of the Comptroller of Currency proposed new regulation which would require banks (and the services they run, including payment networks) to stop industry blacklisting and require specific examples of risk to ban a merchant from processing cards.  It was called Fair Access to Financial Services (OCC-2020-0042-0001).

  These “fair access” rules were finalized on January 14th, 2021.  They were set to take effect on April 1st.  Placing this on April Fool’s Day was a bit too prescient, because the Chairman immediately resigned after passing this rule, and the fair access rule was formally put on an indefinite pause on January 28th, 2021 – one week after Biden assumed office.

  This rule was politicized as a way for Republicans to force poor, innocent multinational trillion dollar banking institutions to do business with ‘evil’ industries like oil drilling and the NRA.  The Chairman of the OCC made note that it should be an act of congress to regulate those industries, not unilaterally enforced by nameless risk management committees behind closed doors.

  It is unlikely that payment network regulation will find bipartisan support.  The payment networks do a good job of picking their targets.  Controversial but left-leaning organizations like Nation of Islam appear to have no issue processing cards, despite their virulent antisemitism rivaling anything found on Gab.  Perhaps if Planned Parenthood suddenly needed cash upfront to perform abortions things would change.  Until then, free speech will be clustered alongside weapons and Alaskan oil prospecting as an industry that is safe to punch down at.

  So, if bankers are above regulation for now, why not regulate social media?

  We have already amended Section 230 and it sucked. 

  There are holes poked into Section 230 protections already.  When Section 230 was first passed in 1996, Congress effectively legalized piracy.  Platforms were immunized even from copyright infringement damages.  So, if pirates could stay anonymous, there was no one to sue for distributing copies of movies.

  To patch the piracy loophole, in 1998, we passed the DMCA.  This act created the process for the copyright takedown system that is infamous on websites like YouTube.  Rights Holders can now take down copyrighted content and sue the services directly if they refuse to comply. Unfortunately, the process created is so sloppy and awful it is a continuous nightmare for a host like me (and everyone on YouTube) to deal with.

  For one, there is no recourse for flagrant or malicious DMCA takedowns.  There is no requirement that the person sending the DMCA prove they own the copyright, to have a copyright ID, to be an attorney, or anything to that effect.  I routinely receive copyright complaints that I must take seriously for content they don’t even own.  OnlyFans (a Grand Cayman company) makes it clear in their Terms of Service that they do not own the content they host. Despite that, OnlyFans routinely sends me DMCA takedown notices for their 3rd party content through a man out of California who is not an attorney.  This is a total farce, and there is nothing I can do.  I still must reply with a counter notice, but they never take it to court and I never even hear back.  I have no legal recourse against this abuse.

  This will be everything online if further loopholes were carved into Section 230.  Imagine if defamation was handled the same way the copyright system is.  Random trolls could issue takedowns for your Tweets and Facebook posts. You would have to send a legal counter notice with your real name and address to the troll to reinstate your messages.  There would be no validations in place.  Your speech would be at the mercy of the whims of insane people online.

  In this environment where platforms could be held liable for things said on their websites, only the richest of them could afford survival.  I am currently dealing with two lawsuits.  They are completely baseless, insane ramblings from insane people, but they will still cost a lot of money to deal with.  There is no way to get fees from them because they have nothing to take. Without Section 230, I would lose a layer of protection enabling me to deal with these lawsuits for much less than it would if we had to take it to trial.  It would destroy the site, especially since I cannot charge cards normally to generate consistent revenue to fund my defenses with.

  President Trump and people in general seem desperate just for revenge.  The rabble directed towards Section 230 is out of anger.  “If only this blow were delivered and 230 were repealed,” they think, “Twitter would be plunged into financial ruin overnight.”  Maybe a Samson Option is what we need?

  Unfortunately, it is not so simple.  Twitter would adapt and become more censorious to reduce its civil liabilities.  All US search engines would have their results curated by anyone willing to complain about defamation—including, and perhaps especially, by public figures with something to hide.  The smaller and less profitable sites hosted out of the US (Gab, Parler, 4chan, 8kun, Kiwi Farms, Encyclopedia Dramatica, thousands of small, federated services and communities) would either be destroyed outright, forced go private, or driven out of the United States. It would be a total disaster for the little guys.

  Jack Posobiec made a comment recently that Justice Clarence Thomas had ruled Section 230 was unconstitutional.  This is not true.  The opinion he cited as ‘sauce’ was not case law, but rather an opinion in the strictest sense.  Thomas did not even claim Section 230 was unconstitutional.  This misinformation was seen hundreds of thousands of times and further defamed the public perception of a law we rely on to even conduct these conversations about Section 230 online.

  So, if we can’t regulate the banks and Section 230 is actually good, what can we do?  

  What Clarence Thomas actually suggested was that we might have to regulate the supermassive tech companies as ‘common carriers’ or utilities.  Regulating only the largest social media networks could work.  You can either be a monopoly, or you can be unregulated, you cannot be both.  I maintain that regulating payment networks first would be ideal, but that will not happen.

  There is some hope that FedNow, an atrociously named US answer to SEPA, could offer some relief to this payment network bottleneck on speech. I am not optimistic for it, but it is good for more people to know it is supposedly in development.

  Cryptocurrencies bypass the payment network bottleneck now. 

  The more people who know how to transact in cryptocurrency, the freer the Internet will be. Sites like buybitcoinworldwide.com (not an affiliate url) contain simple guides on how to get into the ecosystem regardless of your country.  You do not have to invest any money in. Just learn how crypto works, how to get it, and how to send it. That knowledge cannot be taken away from you—and it might prove useful, sooner rather than later.

  Tyler Durden
  Fri, 04/09/2021 – 21:00

• Top Carbon-Credit-Seller Launches Internal Probe After Selling "Worthless" Offsets To JPMorgan, Disney
  Top Carbon-Credit-Seller Launches Internal Probe After Selling “Worthless” Offsets To JPMorgan, Disney

  Back in December, Bloomberg published a sweeping expose that raised serious questions about the ESG investing craze sweeping the world. In the piece, Bloomberg detailed how the Nature Conservancy, the world’s biggest environmental group and a prominent seller of carbon offsets, had sold “worthless” credits to JPMorgan, Disney and BlackRock as the corporations sought to finance the protection of carbon-absorbing forest land to absolve them of their sins tied to fossil fuel usage.

  Carbon credits and so-called “green” bonds are some of the most popular ESG-focused products that are being purchased by corporations, or ESG investment funds. But as Bill Blain pointed out in his Morning Porridge a couple of weeks back, it looks like the ESG craze is already becoming too ‘woke’ for its own good, as companies and institutional investors are chiefly concerned with virtue signaling, and less concerned with whether the products they’re buying are actually making a difference in the fight against climate change.

  

  Fast forward to Monday, and Bloomberg is reporting that the Nature Conservancy is launching an investigation into its procedures for selling carbon credits to try and address the criticisms raised by Bloomberg.

  The self-examination follows a Bloomberg Green investigation last year that found the world’s largest environmental group taking credit for preserving trees in no danger of destruction. The internal review is a sign that it’s at least questioning some practices that have become widespread in the environmental world, and could carry implications for the broader market for carbon credits.

  While the Nature Conservancy declined to answer specific questions about the review, it said in a statement that it aims to meet the highest standards with its carbon projects and that the inquiry will be led by scientists and a “team of experts with deep project knowledge.”

  Selling credits for well-protected trees potentially undermines the sustainability efforts of some of the world’s biggest companies. Each carbon offset is supposed to represent the reduction of one ton of planet-warming emissions that would have otherwise spewed into the atmosphere without intervention. Around the world, a wide variety of offset projects do everything from protect mangrove forests to destroy heat-trapping gases from landfills and coal mines. But offset payments channeled to already safe ecosystems don’t fundamentally change the amount of carbon dioxide in the atmosphere.

  Considering the investing public’s growing interest in ESG, with talk of an ESG boom driving EV stocks higher (while companies like Deliveroo flop on concerns about governance issues and the outlook for more restrictive labor laws for “gig economy” firms), the details about the market for carbon offsets aren’t well understood. As Bloomberg explains, every carbon offset project is measured against a “baseline scenario”, an estimate of what would have happened if preservation efforts weren’t undertaken. When the project involves a forest, the manager of the project calculates the difference between the existing ‘preserved’ trees, and the “baseline scenario”, and uses that to determine the amount of carbon credits that can be sold.

  Since there’s virtually no oversight or review of these calculations by a third party, carbon-credit producers have carte blanche to make up the rules as they go along. Project developers can make unlikely claims about the huge numbers of well-protected trees that were supposed to be cut down, and in that way produce a surfeit of credits.

  In this case, the Conservancy claims the forest land it protects would have been aggressively harvested if it weren’t for carbon payments. But while this allows the nonprofit to earn more money by selling more credits, those credits aren’t actually offsetting pollution. “In a sense, you’re giving a polluter a license to emit a very large quantity of pollution based on these things,” says Charles Canham, a forest ecologist at the Cary Institute of Ecosystem Studies and a longtime board member of a local chapter of the Conservancy who has acted as a whistleblower, repeatedly and publicly criticizing the Conservancy’s tactics, telling BBG  that “the way the Nature Conservancy has gone about this is unconscionable.”

  For its part, the Conservancy claims its projects have been vetted by third parties and comply with nonprofit registries that supervise offsets. “As our understanding of climate change science and policy evolves, changes, and grows, we strive to ensure our projects do the same so we can achieve our goals for a low-carbon future,” the group said.

  Since megacorps like Amazon, Google-owner Alphabet and Microsoft (along with some of the West’s biggest banks, like JP Morgan, have vowed to achieve “net zero” emissions within a few decades. To accomplish this, carbon credits will be essential (because not even the most dedicated uranium bull expects the US to go all-in on nuclear power in the foreseeable future). In 2020, carbon offset sales increased by roughly one-third vs. the prior year.

  Carbon offsets have become an increasingly popular method way for corporations looking to reduce their emissions, as some aim to achieve “net zero” emissions in the not-too-distant future.

  In 2020, companies purchased more than 93 million carbon credits, equivalent to the pollution from 20 million cars in a year. That’s a 33% increase over 2019, according to clean-energy research firm BloombergNEF. The market is poised to grow sharply in the coming years as heavy emitters such as Royal Dutch Shell Plc, Delta Air Lines Inc., and JetBlue Airways have vowed to negate pollution by acquiring more carbon offsets. Mark Carney, the former Bank of England governor who is an organizer of this year’s COP26 climate talks in Glasgow, Scotland, has said that the global market for carbon offsets can be expected to grow to $100 billion in the decades ahead.

  But the biggest problem facing governments, regulators etc. seeking to ensure carbon credits have the intended environmental impact is this: they must ensure that the activities that carbon projects take credit for weren’t already occurring. The biggest sin committed by the Conservancy is it essentially sells too many credits backed by the same patches of “preserved” forestland – although the organization has protected more than 125M acres since it was founded 70 years ago, before carbon credits were even a twinkle in the eye of environmental activists.

  “Carbon offsets are not a donation to a nonprofit group, it’s a purchase of a product,” says Eli Mitchell-Larson, a University of Oxford climate researcher and co-author of the Oxford Offsetting Principles, which provides guidance for how offsets should be used by companies with zero-emission targets. “The purchaser is getting the ability to say they’ve neutralized one ton of their emissions.”

  While Mitchell-Larson applauds conservation groups for protecting and restoring lands, he says they hinder the world’s response to climate change when they sell offsets on land that was going to be preserved anyway. “One of my frustrations is the slowness of some conservation groups to take seriously the credibility of carbon claims they are making,” he says.

  To be sure, the Conservancy isn’t the only well-known environmental group selling carbon credits against land that was already set to be preserved. Bloomberg cited some examples of the National Audubon Society using similar tactics.

  The Conservancy isn’t the only environmental group selling offsets from acreage it didn’t intend to harvest. For instance, in the swampy tidal region of South Carolina, the National Audubon Society has been preserving an ancient forest since 1970. Some of the towering cypress trees have stood for more than 1,000 years. On its website for the sanctuary, known as Beidler Forest, Audubon describes a “pristine ecosystem untouched for millennia.”

  In 2013, Audubon began selling carbon credits from this natural sanctuary, with the project’s documents describing a rapacious baseline scenario of “clearcuts and thins.” The majority of its trees would have been felled within 25 years in the absence of carbon payments, stated the documents.

  In reality, nothing of the sort would have happened, according to Norman Brunswig, who helped launch the carbon project and managed the sanctuary for Audubon for decades before retiring a few years ago. “We never intended to cut that forest,” he says.

  Retrofitting American infrastructure with more emissions-friendly materials and technologies is a major theme from President Biden’s “American Jobs Plan”. Biden and his team have set a goal for the US to reach “net zero” emissions by 2050. Part of the plan will harness the largess of the federal budget is to build charging ports for electric vehicles, electric heat pumps for residential heating and advanced nuclear reactors. But there’s little doubt that, for most companies and governments, achieving “net zero” will be impossible without the purchase of offsetting credits. Expect scrutiny of the space to intensify in the coming years.

  Tyler Durden
  Fri, 04/09/2021 – 20:40

• Japan Comes Clean, Admits Dumping Fukushima Radioactive Water In Pacific Ocean Is Now "Unavoidable"
  Japan Comes Clean, Admits Dumping Fukushima Radioactive Water In Pacific Ocean Is Now “Unavoidable”

  Authored by Elias Marat via TheMindUnleashed.com,

  While Japan last month marked the 10th anniversary of the devastating 2011 Tohoku earthquake and tsunami with solemn ceremonies, the government has also been stressing the successes of its recovery efforts in the country’s northeast.

  

  In truth, however, the country is still coping with the aftermath of the Fukushima Daiichi disaster, which has already cost Japan trillions of yen and whose exclusion zone will require up to 40 more years to fully rehabilitate.

  And with contaminated water continuing to build up at the ruined Fukushima Daiichi Nuclear Power Plant, Prime Minister Yoshihide Suga says that the government must finally begin dumping it into the Pacific Ocean.

  With nuclear waste and fuel rods still contaminating the area, over one million tons of radioactive waste water continue to seep from the facility, according to The Japan Times, forcing authorities into what Suga describes as the “unavoidable” position of having to dump the water.

  Officials claim that the water would be purified to the maximum extent possible, but environmentalist groups like Greenpeace warn that the water contains hazardous material that could damage human DNA and the health of marine life.

  #Fukushima water release could change human DNA, Greenpeace warns: a “major contributor to collective human radiation dose and has the potential to damage human DNA.” https://t.co/S0864I4Vns

  — Jasper Teulings (@Patagorda) October 27, 2020

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

  Fishermen also fear that consumers will refuse to buy fish caught in contaminated waters, worsening their plight amid a restriction of imports from Fukushima prefecture imposed by 15 countries and regions.

  Regardless, authorities argue they must deal with the cards that have been dealt.

  “What to do with the [treated] water is a task that the government can no longer put off without setting a policy,” Japanese trade minister Hiroshi Kajiyama said on Wednesday.

  Suga is expected to formally decide on the course of action by next Tuesday. If he proceeds, authorities will dilute tritium to 2.5 percent of the maximum concentration allowed by the country before it is dumped.

  But while Japanese officials say that the water will be safe, it remains an open question whether people will trust their word.

  Tyler Durden
  Fri, 04/09/2021 – 20:20

• Melvin Capital Down Another 7% In March, Brings Q1 Loss To 49%
  Melvin Capital Down Another 7% In March, Brings Q1 Loss To 49%

  Just two questions: i) is Melvin Capital still short Gamestop and ii) how does it still have any clients left?

  That’s what we would like answered first and foremost after Bloomberg just reported that Gabe Plotkin’s notorious Melvin Capital Management, best known for being blown up by a bunch of WallStreetBet redittors over its Gamestop short, and which lost billions of dollars requiring a $2.75BN bailout from Ken Griffin and Steve Cohen, ended the first quarter down 49% after dropping another 7% last month. 

  The sharp drop – which “mysteriously” coincided with a sharp surge in Gamestop stock in March – reversed a gain of almost 22% in February – when Gamestop plunged after its historic January surge, which caused Melvin to lose a record 53% of AUM.

  

  Another firm which was also caught in the cross hairs of the GameStop saga – Maplelane Capital – which we first profiled here, is reportedly “starting to recover” after losing 45% in January. The fund rose 6.5% in February and 2.1% in March, according to people familiar with the matter, and ended the first quarter with a loss of 39.5%.

  The fund benefited from its long and short wagers on technology and consumer-focused companies, a Bloomberg source said. It also appears that unlike some others who claimed the opposite, Maplelane actually did close out its Gamestop short.

  Still, after such historic and furious plunges, it’s amazing that anyone is still an LP in either of the two funds, which will take many months if not years of high aggressive – and flawless – performance to recover the January losses. In fact, it’s far more likely that the two funds will lose everything as they aggressively double down with Archegos-style leverage to recover their record losses.

  As for our first question of whether Melvin is still short GME, we will have to wait until mid-April when its 13F hits. Assuming the fund is still around by then and hasn’t been converted into a Credit Suisse-special family office.

  So how did everyone else do? Well, Senvest – which orchestrated the entire Gamestop squeeze and made a killing on it – remains the top performing hedge fund according to HSBC, with a bunch of familiar names rounding out the top 20 including Odey Europe, Maverick, Glenview, Mudrick and the perfectly titled Tulip Trend fund. On the other side, there are quite a few systematic hedge funds in addition to the public-facing Renaissance fund, RIEF B, which continues to suck unlike its “friends and family only” cousin, Medallion.

  

   

  Tyler Durden
  Fri, 04/09/2021 – 20:00

• Into The Swarm #1: Archegos In The Coal Mine
  Into The Swarm #1: Archegos In The Coal Mine

  Submitted by Romain Bocher of The Swarm Blog

  While the S&P 500 keeps rallying and hitting new records, the spectacular collapse of Archegos family office brought a sharp reminder of the consequences of excessive leverage in the financial system.

  

  As always, Warren Buffet had already warned us: “Having a large amount of leverage is like driving a car with a dagger on the steering wheel pointed at your heart. If you do that, you will be a better driver. There will be fewer accidents but when they happen, they will be fatal.”

  I do not know what the worst part of that story is. Whether it is the fact that Bill Hwang had a criminal record. Or that Archegos used the same collateral to enter contracts with up to seven banks boosting leverage as high as 500%. Or if it is Nomura’s reaction, saying basically that whatever happens central banks will rescue banks if needed. Nothing seems to matter anymore for a system accustomed to perpetual bailouts since the LTCM failure.

  But beyond those ethical considerations, the Archegos collapse has taught a few interesting things about US capital markets.

  The first lesson for investors is the fact that years of lose monetary policy have laid the ground for moral hazard and very risky bets, as evidenced by the  record of margin debt. And the higher the leverage ratio, the bigger the vulnerability to unexpected moves.

  

  The subprime crisis was a perfect illustration of that issue, as it “only” took a 11% drop of US home prices and a 1.5 expansion of the delinquency rate on mortgages to funnel the global banking industry toward the cliff in September 2008. In a highly leveraged system, you do not necessarily need a violent crash to generate significant losses and trigger a bigger crisis.

  Using debt to go all-in on stocks on like ViacomCBS which had already started to move vertically was not the smartest thing to do in my opinion, as such technical patterns often signal imminent ruptures. It is hard to believe that professionals who managed those amounts of money got caught in such an absurd situation, but I do think that other players will exhibit similar losses sooner or later, as most participants have caved to the mania and have assumed that equities cannot go down anymore.

  More and more participants display “Gaussian-like behavior,” meaning that they tend to unconsciously underestimate the probability of occurrence of large volatility spikes (i.e. significant drawdowns). And I am not only talking about retail investors. The whole market has turned extremely bullish, and everyone believes that “the Fed has our backs” and that there will always be someone to bid if necessary.

  That brings us to the second lesson of the Archegos collapse, which is how illiquid can assets suddenly become when a big seller comes out.

  The concept of liquidity can be very misleading, as past trading volume is no guarantee of future liquidity. Indeed, the convexity of the order book means that if the selling flows become too big, then there may be no bid unless the price adjusts significantly to the downside (I recommend the following thread on Twitter by @FadingRallies).

  

  In fact, there is a nonlinear and negative relationship between depth and instantaneous volatility, meaning that the liquidity of equities is likely to shrink whenever the VIX spikes. Therefore, the idea that there will always be someone to bid and to buy the dip, even on large cap shares, can be proven wrong.

  As the S&P 500 is trading above 4k, it is important to bear in mind that any unexpected situation leading to forced selling could trigger a problematic situation. And even though people tend to naturally display “Gaussian-like behavior,” everyone should remember that volatility spikes are distributed following some form of power law (see my paper on that topic), meaning that extreme fat-tail events occur more frequently than what the general public thinks.

  And in my opinion, there is not much the Fed can do about it.

  Red Queens Narratives

  I often say that financial markets are all about intersubjective narratives. Thus, I have created this second section to analyze the narratives at play.

  The past months have been characterized by a once-in-a-lifetime buying frenzy, with millions of retail investors entering the market as wannabee gurus like Dave Portnoy kept saying that “stocks ony go up.” The corollary of this phenomenon has been the “you only live once” philosophy (YOLO), justifying any risky trade by the idea that nothing really matters anymore on markets.

  For months, we have seen people chasing stocks like Tesla, Virgin Galactic, Zoom, or Peloton, whatever the price. Then, we have seen them rushing to purchase out-of-the-money call options to maximize their profits, leading to the so-called “gamma squeeze.”

  However, while everyone expected Americans to massively spend their second check on the market, the YOLO trade has started to exhibit signs of weakness recently. And as already mentioned in a previous post, the launch of the Buzz ETF may have coincided with the top of the retail mania (see Whale Beaching).

  But beyond the lower volume on equity call options, it is worth highlighting the recent disappointing performance of indices tracking IPOs or SPACs (see charts below).

  

  The thing is, there has been a record level of equity issues, and most of them were YOLO names. And not only on the stock market, as there have also been record amounts issued on the convertible bonds segment, most of the issuers being companies like Beyond Meat, Airbnb, Peloton, etc.

  After all, maybe the market is reaching its digestive limits.

  Even if the Nasdaq managed to bounce back to mid-February levels, the recent moves have been characterized by negative internals, meaning that US tech indices have been mainly driven by FAANGs, while many YOLO stocks have struggled to recapture the powerful trend of the past months.

  Does it mean that the party is over? I have learned to be careful about calling the top, but I do believe that a bubble is all about a narrative, and thus when the dominant narrative starts to weaken, it is time to seriously question the validity of the bull thesis.

  Tyler Durden
  Fri, 04/09/2021 – 19:40

• Biden's Border Czar Abruptly Quits Despite 'No Crisis'
  Biden’s Border Czar Abruptly Quits Despite ‘No Crisis’

  While the Biden-Harris administration continues to insist there’s ‘no border crisis‘ (as they take over seven hotels near the US-Mexico border), the departure of ‘Border Czar’ Roberta Jacobson, suggests otherwise.

  

  Jacobson, a former US ambassador to Mexico who criticized the White House for sending ‘mixed messages‘ to asylum seekers over whether they should head for the border (which Biden absolutely implied during the 2020 election), is stepping down after less than three months on the job.

  Suggesting her services were no longer needed (as ICE commandeers seven border-area hotels because government facilities have run out of space), National Security Adviser Jake Sullivan said on Friday that Jacobson’s departure was “consistent with her commitment at the outset to serve in the Administration’s first 100 days,” according to the New York Post.

  The move comes as the Biden administration is reportedly considering sending cash payments to Central Americans in a bid to prevent them from making the trek north and as Vice President Kamala Harris, tapped by Biden to handle the crisis, still has yet to visit the border. 

  Meanwhile, migrant parents already in the United States say they are not being given regular — if any — updates about the location or well-being of their children in federal custody. And it’s reportedly costing US taxpayers more than $60 million a week to care for 16,500 unaccompanied migrant teenagers and children now in federally run shelters. -NY Post

  Despite thousands of migrant children sitting in US Border Patrol detention facilities – White House officials have maintained that there’s no crisis – because to do so would mean Biden sparked the crisis when he presented himself as an immigrant-friendly antithesis to President Trump – who he now blames for the border surge.

  Biden’s Press Secretary Jen Psaki can’t name any “numerical” or “tangible” goal or measure that the Biden Administration has in dealing with the border crisishttps://t.co/VVMfLCBVsg pic.twitter.com/6ftE9rZu9P

  — RNC Research (@RNCResearch) April 7, 2021

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

  Last month White House press secretary Jen Psaki accidentally referred to the “crisis at the border,” only to correct herself when pressed – calling them “challenges on the border.”

  Tyler Durden
  Fri, 04/09/2021 – 19:20

• The Two Faces Of Joe Biden: Taibbi
  The Two Faces Of Joe Biden: Taibbi

  Authored by Matt Taibbi via TK News,

  On April Fool’s Day, CNN ran an “analysis” of Joe Biden’s presidency:

  Will JRB take his place alongside FDR and LBJ?

  CNN explained “JRB” had just unveiled a $2 trillion infrastructure plan “to boost ordinary working Americans rather than the wealthy,” a program that together with his $1.9 trillion Covid rescue doubles “as a bid to lift millions of Americans out of poverty.”

  

  The news is like high school. One day, one kid comes in wearing Dior sneakers and Nike X Ambush pants, and two days later, that’s all you see in the halls. The “Biden-as-FDR” stories raced around News High, with headlines like “With nods to FDR, JFK and LBJ, Biden goes big on infrastructure plan” (Yahoo!) and “Can Biden achieve an FDR-style presidency? A historian sees surprising parallels” (Washington Post). Even the New Yorker’s naysaying take, “Is Biden Really the Second Coming of F.D.R. and L.B.J.?” read at first glance like an affirmation.

  That this high-flown language came on the heels of Biden’s people whispering F.D.R. comparisons in the ears of reporters for weeks, and Biden himself calling his plan “a once-in-a-generation investment in America,” seemed not to bother anyone. We live in a time when a president can be said to have “sharply cut poverty” the moment he signs a relief bill, so why not say, as CNN editorialists Stephen Collison and Caitlin Hu did, that this new bill’s passage would immediately allow Biden to “lay claim to a spot in the Democratic pantheon alongside Franklin Roosevelt and Lyndon Johnson?”

  This would only be natural, they said, since “Scranton Joe” has long despaired over the silver spoon inequities of Donald Trump’s trickle-down economy:

  The President complained as he unveiled his plan in Pittsburgh — the kind of gritty blue-collar city he loves — that the top 1% saw their wealth rise by $4 trillion during the pandemic while millions of Americans lost jobs. “Just goes to show you how distorted and unfair our economy has become,” Biden said. “Wasn’t always this way. Well, it’s time to change that.”

  Left unmentioned was that the same gritty, blue-collar president oversaw the TARP bailout, which resulted in a similar Trumpian windfall for the 1%. The richest saw their share of America’s wealth increase from 30% in 2010 to 39% in 2016. Median household net worth fell 34% from a peak in 2007 to the end of the Obama-Biden presidency, while banks in 2009 had the best year they would have until 2020, that “unfair” bailout year Biden complained about.

  Pundits have long been working on revising that history. By last summer, the Atlantic was writing this about Biden’s management of the other bailout:

  Critics on the left faulted him and Obama for not making the stimulus package bigger (though keeping it below $1 trillion was the price of winning necessary Republican votes for its passage in the Senate).

  That’s just not true. Certainly, Republicans would have hammered Obama for a stimulus of any size, but Obama officials decided on those levels on their own. We’ve known this since 2012, when the New Yorker published a piece outing the fact that Larry Summers advised the incoming president to prioritize deficit reduction over stimulus. You can read the 57-page secret Summers memo here.

  With a partisan divide wedded to a hyper-concentrated landscape, commercial media companies can now sell almost any narrative they want. They can disappear the past with relative ease, and the present can be pushed whichever way a handful of key decision-makers thinks will sell best with audiences.

  In the case of Biden, we’ve seen in the first few months that the upscale, cosmopolitan target audiences of outlets like CNN, the New York Times, and the Washington Post want to believe they’re living through a “radical,” “transformative” presidency, the political antidote to the Trump years. The same crowd of West Wing power-tweeters was leading the charge against “purity” in politics about eight minutes ago.

  In fact, in the 2019-2020 primary season, Bernie Sanders was regularly lambasted by the same blue-leaning press outlets for trying to re-imagine F.D.R. through programs with names like the “Green New Deal.” Proposal after proposal that had been directly inspired by F.D.R. was described as too expensive, unrealistic, or a political non-starter heading into a general election.

  Now that the real version of that brand of politics has been safely eliminated, a new PR campaign is stressing that Democrats did elect F.D.R. after all. Moreover, a legend is being built that crime-bill signing, PATRIOT-Act inspiring, Iraq-war-humping Joe Biden wanted all along to be a radical progressive, but was held back by the intransigence of the evil Republicans. Is that even remotely true?

  Observe, for instance, the hilarious Ezra Klein editorial that just ran in the New York Times, called “Four Ways to Look at the Radicalism of Joe Biden” (someone actually wrote that headline!):

  Before Biden, Democratic presidents designed policy with one eye on attracting Republican votes, or at least mollifying Republican critics. That’s why a third of the 2009 stimulus was made up of tax cuts, why the Affordable Care Act was built atop the Romneycare framework, why President Bill Clinton’s first budget included sharp spending cuts…

  Over the past decade, congressional Republicans slowly but completely disabused Democrats of these hopes. The long campaign against the ideological compromise that was the Affordable Care Act is central here…

  The result is that Obama, Biden, the key political strategists who advise Biden and almost the entire Democratic congressional caucus simply stopped believing Republicans would ever vote for major Democratic bills. 

  Question for Ezra: did Obama also accelerate the drone program, expand the surveillance state, and abandon enforcement of white-collar crime to a degree that made John Ashcroft look like Eliot Ness, in a similar effort to reach across the aisle? Or were those Executive Branch behaviors just expressions of unrequited love?

  Obama as a presidential candidate in 2008 contrasted himself with Hillary Clinton by insisting he would be the guy to stop kowtowing to special interests. On health care, he was incredibly specific: he would green-light drug re-importation from Canada and allow Medicare to negotiate bulk pharmaceutical prices, insisting also he was a “proponent” of single-payer.

  Obama went so far as to do an ad blasting former Louisiana congressman Billy Tauzin, who went from helping write the ban on Medicare bargaining to going to “work for the pharmaceutical industry making two million dollars a year” at the lobbying group PhRMA.

  “Imagine that,” said Obama. “That’s an example of the same old game‐​playing in Washington. I don’t want to learn how to play the game better. I want to put an end to the game‐​playing.”

  The year after this ad ran, Obama was meeting with that same Billy Tauzin in, ironically, the Roosevelt Room of the White House (Tauzin would end up visiting a dozen times). There, they hammered out a deal: Tauzin’s group, PhRMA, would fund a $150 million ad campaign boosting Obama’s health care program, in exchange for the Obama White House agreeing to kill the reimportation idea and leave the ban on Medicare negotiation in place.

  Tauzin later described the deal, saying it had been “blessed” by the White House, and emails later released showed a union official who was part of health care bill negotiations explaining how Obama’s White House planned on paying for its PR campaign: “They plan to hit up the ‘bad guys’ for most of the $.”

  Obama in other words won a contentious primary against Hillary Clinton by snowing reporters like me into hyping him as the clean hands guy who’d push aside Clintonian transactional politics. Then he turned around a year later and passed his signature program with help from the worst industry actors, paying for it by killing the progressive parts of the plan.

  This history — important history — is now being rewritten by people like Klein as an “ideological compromise” inspired by the Obama/Biden White House’s misguided desire to govern with Republican votes. The fact that the Affordable Care Act passed with a grand total of zero such votes is apparently irrelevant, as was Biden’s ignored and erroneous (do we only say “lie” in some cases?) insistence as a candidate last year that he found “Republican votes” for “Obamacare.”

  Something like Obama’s PhRMA one-two is happening again, and predictably, it’s not getting much press. A hundred countries have formally asked the World Trade Organization to waive intellectual property laws that only allow companies like Pfizer, Moderna, and AstraZeneca to make Covid-19 vaccines. Favoring the waiver: Sanders, Elizabeth Warren, and hundreds of millions of poor and mostly nonwhite folks in other countries who are nervous about the whole dying thing.

  Opposing (drumroll, please): that same PhRMA lobbying group, which says such waivers would “undermine the global response to the pandemic, including ongoing effort to tackle new variants.” Meaning, industry will stop developing vaccines now, and certainly won’t develop any the next time, if you don’t let it cash in.

  Without the ability to make generics, countries like Mexico have to be grateful for handouts of some of the tens of millions of excess vaccine doses we have sitting in storage. In fact, in what the New York Times called a “notable step into vaccine diplomacy,” Biden agreed to send 2.5 million doses to Mexico in return for Mexico promising to increase patrols on its southern border with Guatemala.

  To recap: while waffling on patent waivers, Biden traded 2.5 million doses of vaccine to Mexico for a promise to crack down on the Central American migrants who have become a pain in this administration’s public relations tuchus. Perhaps Biden eventually will push for the patent waivers, but for now, does anyone even have to ask what the headlines describing that kind of lives-for-fewer-immigrants deal would have looked like if Trump brokered it?

  This has so much been the story of Biden’s presidency, which is certainly less chaotic than Trump’s and does have some clearly different ambitions, but in many ways represents continuity with both his predecessor and his predecessor’s predecessor.

  What would we have said if Trump promised to stop wall construction, then went ahead and kept building it anyway? Candidate Biden promised not to build “another foot of wall,” and although it is true that he’s frozen Defense Department funding for Trump’s project, his Homeland Security Secretary Alejandro Mayorkas said the decision left “room” for the administration to “make decisions” about “areas of the wall that need renovation and “particular projects that need to be finished.” So F.D.R. is building more wall.

  Others have made plenty of hay about the discrepancies in covering unaccompanied child detainees now, versus a few years ago. Agencies from the AP to the Washington Post are using the word “challenge” instead of “crisis” or “horror.” It’s of course only a coincidence that this is the word Press Secretary Psaki started using back on March 18th (correcting the use of “crisis”).

  The cries of hypocrisy about the non-use of the term “kids in cages” is, I think, overblown, because separating children from families was an intentional aim of the Trump administration — remember, Trump officials were hoping for a lot of media coverage about separated kids, with the specific aim of producing a “substantial deterrent effect.” That was substantially more deranged than any Biden policy. That doesn’t make it not ridiculous that the Washington Post called the following structures “migrant facilities”:

  

  When pressed on the absurdity, the Post noted that it hadn’t necessarily said what was happening at the border was a good thing, even quoting activists saying it was a “huge step backward.” The Post hastened to add that the same activist said of the Carrizo Springs, Texas facility, “I consoled myself with the fact that it was considered the Cadillac of [migrant child] centers.”

  Again, is it hard to imagine what the response would have been if anyone, inside or outside the Trump administration, had tried to sell us on the idea that immigrant kids were staying in the “Cadillac” of detention centers? The “Cadillac cages” and “Cadillac concentration camps” jokes would have written themselves.

  The dull truth about Biden is that he’s governed, domestically, as a slightly more progressive version of the Obama administration, with a more ambitious bailout, while his foreign policy is a notch or two more hawkish — a wash, overall, though most of the stories about policy continuity from Afghanistan to Iran to Ukraine and beyond, don’t get headlines.

  During the recent all-consuming furor over the Major League Baseball all-star game, for instance, news that the federal defense budget under Biden will likely remain at the same astronomical levels they reached under Trump went mostly unnoticed. A few outlets that paid attention used the common defense industry talking point that the numbers actually represented a cut, since the increase was smaller than the rate of inflation. Same with Biden’s continuation of the storied presidential tradition of punting on withdrawal of support for Israel’s occupation of Palestine territories, reported via headlines like, “Joe Biden is not planning to solve the Israeli-Palestinian conflict.”

  Read the rest here.

  Tyler Durden
  Fri, 04/09/2021 – 19:00

• White House Eases US Officials' Ability To Freely Meet With Taiwan Counterparts
  White House Eases US Officials’ Ability To Freely Meet With Taiwan Counterparts

  On Friday the White House issued a statement on spiraling tensions with China over the Taiwan issue, saying that the US is “not looking for confrontation with China” but that it’s concerned over Beijing’s “potentially destabilizing” actions in the region.

  The statement came after White House Press Secretary Jen Psaki was asked whether the administration believed that China is on the cusp of invading Taiwan. But in terms of avoiding “confrontation” – another announcement Friday all but ensures that confrontation is exactly what we’re headed toward: the Biden admin has just opened up the ability of American officials to freely meet with their Taiwan counterparts. 

  

  While for decades the US has maintained stringent rules and restrictions on its own diplomats and officials regarding such meetings in accord with keeping its ‘One China’ policy, these have now been largely lifted.

  FT relates the following details in the wake of Friday’s published guidelines: “US officials will be able to meet more freely with their Taiwanese counterparts under new Biden administration guidelines, the latest move by the White House aimed at checking increased aggression by Beijing in the region.”

  “The new rules, which are to be issued by the US state department on Friday, according to American officials, will ease decades-old restrictions that have hampered meetings between American and Taiwanese diplomats.”

  However, there will still be “guardrails” in place – for example regarding meeting on particular holidays in Taiwan which would be considered especially brazen, which would surely earn Beijing’s rebuke of violating the One China stance. Regardless China has of late frequently leveled this charge, particularly with multiple and unprecedented US delegations that visited the island within the last 6 months of the Trump administration. And last month under Biden the US envoy to Palau become to first American ambassador to be received in Taiwan since 1979.

  China sends more fighter jets into Taiwan’s air defense zone as Taipei’s FM Joseph Wu says his country will fight to the end if Beijing attackshttps://t.co/6OU1eE2axq

  — DAILY SABAH (@DailySabah) April 7, 2021

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  FT continues to review: “While Biden reviewed the guidelines in recent months, there were signs he would take a looser approach than during the Obama administration. Joseph Young, the acting US ambassador to Japan, recently welcomed his Taiwanese counterpart to his Tokyo residence and publicized the visit on Twitter, echoing a similar move by Trump’s ambassador to the Netherlands after Pompeo’s announcement.”

  Beijing’s reaction and imminent protest of the relaxing of the guidelines will no doubt be fierce, and could involve a continued escalation of aerial and naval incursions of Taiwan-claimed territory, also as the US “answers” these threatening moves by sending its own warships into the South China Sea. 

  Tyler Durden
  Fri, 04/09/2021 – 18:40

• Stimmy Bonanza: Here Comes Another Blockbuster Retail Sales Print
  Stimmy Bonanza: Here Comes Another Blockbuster Retail Sales Print

  Bank of America’s economists have been on a roll in the past two months.

  Back in February, the bank looked at its credit and debit card spending data and concluded that consensus was far, far too low, predicting that the Jan retail sales print would be above 4.1%.

  

  Not only was BofA’s outlier forecast right, but the headline retail sales number came in even higher: at a whopping 5.3%, nearly 5x higher than the consensus estimate of a 1.1% rise.

  One month later, when the Wall Street herd scrambled to make up for its clueless January forecast by being overly optimistic, Bank of America once again took the contrarian approach, not because it wanted to but because that’s what the data showed: spending on BofA branded credit and debit cards tumbled in February, prompting BofA to predict a -3.0% retail sales print.

  

  Once again, BofA was spot on to the dot, with the official retail sales print coming at -3.0%.

  So with the March retail sales on deck, Wall Street can take its perpetually wrong consensus estimate and shove it, all that matters is what BofA’s economists expect. And that, according to the latest note from BofA economist Michelle Meyer, is nothing short of March Madness, which just so happens is what the bank titled its retail sales preview…

  

  … which expects the March retail sales to print a blowout 11.1% (ex-autos, and 11.5% headline), which would be the third highest monthly print on record (and nearly 3x the consensus estimate for retail sales ex-autos of 4.4%).

  

  Here are the details: based on aggregated BAC credit and debit card data, total card spending increased 67% on a 1-year change and 20% on a 2-year change, over the 7-days ending April 3rd. The 2- year change, which captures the underlying trend, was steady compared to last week and roughly double the growth rate prior to the stimulus distribution. More remarkable was the monthly data: based on aggregated card spending, retail sales ex-autos increased 11.1% mom SA (seasonally adjusted) in March.

  

  A breakdown of spending by category saw the biggest jump in airline spending, which rose 37.5% sequentially, with groceries up just 1.9% M/M, even though travel spending has yet to return to pre-pandemic level. That said, goods spending is now running well above pre-pandemic levels!

  

  Of course, the reason for the surge is simple: stimmy checks. As BofA notes, over the 7-days ending April 3rd total card spending was up 33% yoy over a 2-year period for stimulus recipients vs. a 14% gain for non-recipients (defined as those who did not receive the stimulus payment through direct deposit on Mach 17). On Day 17 after stimulus distribution, stimulus recipients are spending 24% more than others.

  

  A big driver of the incremental spending is restaurants, where spending was up 13% over the 7-day period (2-year change) vs. mid-March when it was still in negative territory. Notably, NYC in-person dining is now running at -39% over a 2-year period vs. nearly -70% in the beginning of February.

  

  BofA also looked at activity in Florida where there was a boost from travel: in-person dining in Florida by out-of-state residents is up 21% on a 2-year basis vs. 10% on a 2-year rate for FL residents

  

  Another interesting observation from the latest BofA data: investors are starting to turn their back on online spending, and after a year of lockdowns, are now far more interested to spend their moeny at traditional brick and mortar outlets.

  

  Going back to the monthly data which pro subs can find in the usual place, BofA concludes that the blistering 11.1% surge in March “showed the impact of stimulus, reopening and better weather” and “should set up for a very strong Census Bureau report” indeed, BofA sees upside for the official Census number even relative to the bank’s 11% growth rate. As the chart below shows, the Census showed an even bigger gain following the last two stimulus distributions than BofA data.

  

  According to BofA economists, “this reflects the likely increase in cash usage which is consistent with the relatively larger gain in debit vs. credit spending during stimulus distribution months.”

  Finally, here is what the retail sales data will look like chart in historical context:

  

  Since by now we have little reason to doubt BofA data, which is derived directly from spending patterns, expect the third biggest jump (and maybe second if there is enough upside) in retail sales on record. The question, of course, is what then – with far fewer direct stimmies on the horizon, is this as good as it gets for a long, long time?

  Tyler Durden
  Fri, 04/09/2021 – 18:20

• Iran Finally Releases Seized S.Korean Tanker As Vienna Talks Start On "Positive Note"
  Iran Finally Releases Seized S.Korean Tanker As Vienna Talks Start On “Positive Note”

  Iran has finally released a South Korean-flagged tanker that the IRGC had siezed back in January, which developed into a diplomatic standoff over billions of dollars in frozen Iranian funds held in South Korean banks due to US-led sanctions.

  While some of the crew of the Hankuk Chemihad had been allowed to leave in February, a dozen along with the captain stayed on in order to conduct maintenance with the hope of eventually being able to sail it home. On Friday South Korea’s foreign ministry issued a statement confirming the ship’s detention had been lifted and that it “departed safely today”.

  

  The month before the Hankuk Chemihad was seized in the Strait of Hormuz with the official charge being that it had “violated rules of pollution”, Tehran had mounted protest with Seoul for freezing close to $10 billion in Iranian assets (according to foreign ministry figures), though the governor of the Central Bank of Iran had estimated it at $7BN.

  Regardless, the tanker seizure did bring significant leverage and pressure to bear against the South Koreans, and upon Friday’s freeing of the tanker the country signaled headway was made. Details have not been released or confirmed, but the Associated Press had the following update:

  But an official from South Korea’s Foreign Ministry, speaking on condition of anonymity under regulations, said Seoul’s willingness to resolve the issue of Iranian assets tied up in South Korea “possibly had a positive influence” in Iran’s decision to release the vessel.

  The official said Iran had acknowledged South Korea’s attempts to resolve the dispute as it became clear the issue was “not just about South Korea’s ability and efforts alone” and was “intertwined” with negotiations over the return to Tehran’s foundering nuclear deal.

  It does indeed also appear a good faith gesture to ensure talks go well in Vienna, where the US and Iran are engaging “indirectly” via the other signatories to the 2015 JCPOA nuclear deal, mainly through European mediators. 

  Meanwhile, The New York Times reports that things in Vienna are surprisingly on a “positive” track following weeks of threatening rhetoric and demands from the US and Iranian sides…

  Talks on the Iran nuclear deal have made progress, participants say, and will continue next week https://t.co/akPpDbwOba

  — New York Times World (@nytimesworld) April 9, 2021

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  In particular it is now being reported that working groups set to tackle uranium enrichment issues at the summit are “making progress” and will resume next week.

  Early on in the Vienna talks the Biden administration reportedly offered some level of quick sanctions relief in order to compel Iran back into compliance with uranium enrichment caps and other stipulations. 

  Tyler Durden
  Fri, 04/09/2021 – 18:00

• Luongo: A Rising Dollar Sinks All Boats
  Luongo: A Rising Dollar Sinks All Boats

  Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

  Every day I open up my web browser to see yet another example of the basic functions of society breaking down.  Last week it was the vaporization of Archegos capital. I told you what I thought of this in a post that I hope, got people thinking.

  Previous to Archegos, over the past two months we’ve seen the electrical grid collapse in Texas, hedge funds blown up over a meme stock.  Bitcoin is screaming that the national fiat currencies are all hyperinflating at the same time.

  In the case of the recently solved Suez Canal incident, it doesn’t matter if it was incompetence or malicious behavior which caused the Ever Given to stick in the mud, in a world this fragile the smallest mistake can have outsized consequences.

  The few days the canal was blocked caused an enormous pile up and re-routing of basic supplies and fundamentally important goods to Europe and North America that, to me, is a harbinger of where we are headed.

  An overly complex world is an inherently fragile one.  Global trade is dependent on a handful of chokepoints remaining clear, like the Suez or the Straits of Malacca.  Jam up one of them and watch our everyday life we take for granted collapse.

  And that brings me to the conundrum the central banks face. 

  

  Their decades of interference in capital markets have created multiple points of failure for a global financial system that is still dependent on major chokepoints for liquidity: the prime brokerages and clearinghouses.

  That’s why Archegos’ collapse was so spooky. A small family office acquired enough levered capital to threaten the solvency of eight major prime brokers including Nomura, Credit Suisse and Morgan Stanley.

  And the reverberations haven’t died down. Every day we hear of another aftershock of the the Archegos tac nuke which nearly detonated these systemically important firms. Now it’s Tiger Capital, JP Morgan Chase and millions of shares of Academy Sports and Outdoors (NYSE:ASO).

  From Zerohedge this morning:

  Since this is virtually identical to what happened two Fridays ago when similar public BWICs by Goldman and other banks proceeded to unwind the Archegos portfolio, the immediate question on everyone’s lips is whether a second highly levered family office has blown up.

  There are more similarities: the block offered by JPM is massive: the 9MM shares represents almost a quarter of ASO’s float and roughly 10% of ASO’s total outstanding shares.

  In a notable tangent, it [is] worth noting that ASO, which was IPOed by PE firm KKR in October, has Tiger Global as one of its top holders. Granted, nobody but KKR has a public stake worth 9 million shares.

  To this end, one false step or misplaced word by Powell can send markets careening off course creating massive logjams in the plumbing of the global financial system as everyone tries to get out of a position at the same time.

  This is why the recent FOMC policy statement Chairman Jerome Powell was careful to sound dovish but change nothing about monetary policy.  Powell knows he is walking a tightrope right now.

  If he is too dovish, he’ll spook the capital markets that there’s something terribly wrong.

  If he’s too hawkish it will drain the world of dollar liquidity too quickly causing panic in major markets like Japan or Germany. 

  Despite Powell’s best efforts, however, the U.S. dollar, after more than a year of weakening versus the other major currencies like the euro, British pound, Japanese yen and Chinese yuan, has reversed course sharply.   

  And that reversal is causing all sorts of problems. 

  A strong dollar is exactly what the financial markets can’t handle right now and that’s exactly what we’re getting, despite Powell’s attempts to talk it down, which he did at today’s conference call with the IMF.

  Even though, the only thing more boring than watching the Fed’s balance sheet since last summer has been Joe Biden’s lame attempts at completing sentences in public.

  Ultimately, there isn’t much Powell can do as long as there isn’t an imminent crisis, lest he sound the alarm too early like his counterpart at the ECB, Christine Lagarde, did the week before, who literally dared markets earlier this week to test her resolve.

  Oh, don’t worry Chrissy, it will.

  Lagarde finally admitted that the euro-zone wasn’t recovering and greatly expanded the ECB’s various bond-buying programs.  And it immediately set the euro into a tailspin, falling more than 3% in a couple of weeks.

  And no matter how hard she tries, interest rates on core sovereign debt in the euro-zone keep rising.  Bellwethers like the German 10-year bund keeps pushing back up against Lagarde’s line in the sand at -0.3%.

  That’s how fragile and weak the European bond market is. It can’t handle interest rates on its most powerful economy’s most important bond market getting anywhere close to yielding investors a positive return on capital.

  It speaks to just how screwed up these markets are and calls into question both the competence and the maliciousness of those in charge of them.

  Projecting confidence is the first job of a central banker. Balancing the impulses within the overly complex systems is a task far beyond the crude tools of the central banks.

  Savvy market analysts understand this basic point.  Too bad our markets aren’t governed by such folks anymore but rather the dumbest of dumb headline-scanning algorithms which the central banks shamelessly manipulate through language which belies their actions.

  Humans, however, in the aggregate are far cleverer than those that try to control them. And the central banks’ interventions and financial regulations continually create the very problems that eventually destroy them. 

  All of their theories about capital have failed and yet we are still prisoners of their crazy schemes.

  Despite that and their throwing their weight around like the proverbial bull in a china shop, the debt markets are finally calling their bluff.

  The amount of leverage they have pushed into the capital markets, especially the equity markets, is astounding.  But what else is there to do if you’re a fund manager or family office except try to find the safest harbor possible for your money?

  Since last summer one of those harbors has been Chinese blue-chip stocks.  The MSCI China Large Cap 50 Index nearly doubled off last March’s low, outperforming even the Dow Jones Industrials.  But since February, when the dollar began firming it has given back more than 40% of those gains.

  And that’s had the knock-on effect of blowing Archegos. 

  Archegos through leverage used off-exchange transactions called CFD’s – contracts for difference — to accumulate massive synthetic positions in a few companies, which didn’t have to be reported to regulators because they didn’t actually own the stock.

  They owned bets on the movements of the stocks.

  When markets reversed, thanks to a rising dollar draining Chinese capital markets, Archegos got a margin call forcing huge blocks of stocks like Tencent and Discover onto the market by the millions, cratering their prices into last week’s close.

  What’s astounding here is how a small family office’s implosion could create liquidity problems for prime brokers who lent them the money.

  It was Morgan Stanley reportedly frantically selling huge blocks of Discover at massive discounts raise the capital needed.  Archegos was gone by that point.

  It reminds me of the weekend Bear Stearns evaporated in March 2008 and we all know how that turned out later that year.

  This begs the question how many more Archegos-like ships are out there ready to run the world financial system into the ground?

  Because last month it was GameStop.  This month Archegos?  Who’s next month’s victim?  Is Tiger Global this week’s?

  No wonder Bitcoin continues spiking and 80% of Americans plan on saving or paying debt with their stimulus checks. 

  The money isn’t circulating, it’s circling the drain.

  And when does Powell come off the sidelines to declare that inflation expectations are still contained even though the real economy is grinding to a halt thanks to rising gas and commodity prices? Housing prices just spiked as migrations out of major urban centers is pushing up the cost of all basic commodities like lumber and steel?

  There are chip shortages everywhere causing the car industry to shut down production with cars 99% completed and Apple to finally admit even it can’t manage supply chain disruptions like we’ve seen. And Tim Cook is literally the best the world has ever seen at such things.

  Every time I see another story like this, I’m reminded of the last act of Ayn Rand’s Atlas Shrugged.  Its formerly brilliant society which effortlessly coordinated the labor and time of millions grinds to a halt as perpetual interference and the elevation of politics over performance makes even the basic functions of society difficult to produce.

  Civilization is supposed to create the opportunity for boredom.  Things are supposed to be so stable that we should have the luxury of taking a day for ourselves rather than constantly worrying about what these idiots will do tomorrow, whether the lights will come on, and if there’ll be toilet paper when we go to the store.

  And if these are the effects of the smallest uptick in the strength of the U.S. dollar today, it doesn’t hold out much hope for the rest of 2021.

  So, while the Ever Given was finally sent on its way and we (may have) dodged a bullet with Archegos, the rising dollar is draining out of the monetary chokepoints and leaving dozens more firms like it and the central banks with zero margin for navigational error.

  *  *  *

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  Tyler Durden
  Fri, 04/09/2021 – 17:40

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• BMW Is The Latest Car Manufacturer To Smash Q1 Comps, Sales Rise 33.5%
  BMW Is The Latest Car Manufacturer To Smash Q1 Comps, Sales Rise 33.5%

  BMW is the latest legacy automaker to smash its sales comps for Q1, as automakers benefit from 2020’s poor sales due to the pandemic.

  BMW said it delivered 636,606 BMW, MINI and Rolls-Royce vehicles to customers during the quarter. The figure isn’t just a 33.5% rise in sales for the automaker, it’s also a new all time high for sales for the company’s first quarter.

  Not unlike other legacy automakers, BMW also saw a massive surge in electric vehicles. Its sales of EVs more than doubled to 70,207 units during the quarter. Total sales rose by 8.3% in Europe, 17,3% in the Americas, and an astounding 76.4% in Asia – thanks to Q1 2020’s lockdowns. 

  Recall, yesterday we noted that Mercedes also smashed its Q1 numbers. Sales were up 22% in Q1 thanks to not only easy comps, but also record demand out of China. Globally, Mercedes-Benz sold 581,270 cars and saw its China sales figures rise by 60%. China is the biggest market for the brand and had the most favorable comps, similar to BMW. 

  The pop for both automakers in North America shouldn’t be too much of a surprise. We wrote just days ago that most legacy automakers in the U.S. were posting fantastic Q1 comps. 

  

  What’s selling? “Everything,” said one Ford dealer. GM said its U.S. retail deliveries were up 19% in Q1, the company’s first number reported against pandemic-impacted comps. The automaker sold 642,250 vehicles in the U.S. in the first quarter of 2021. Toyota sold 603,066 vehicles in the quarter, a 22% rise from Q1 2020, according to IBD. Even more pronounced was the company’s numbers for March, which were up 87% against the first month of coronavirus lockdowns in 2020.

  Volkswagen also posted blowout comps, as sales rose 21% in Q1 to 90,853 vehicles sold. The company was helped along by robust SUV demand while also selling 474 units of its new ID.4, which only went on sale in the U.S. in late March. 

  Ford saw its sales rise 1% for the quarter, but sales were up 5% for trucks and 14% for SUVs. Even more notable, however, is the fact that Ford sold 6,613 Mustang Mach-E electric crossovers, up from just 3 sold in Q4. Ford said that “the fully electric Mustang Mach-E turning on dealer lots in just 7 days.”

  Both domestically and abroad, shoring up the supply chain has become crucial for all automakers heading into 2021. The auto industry, as a whole is rethinking its cost cutting measures in the midst of both the pandemic and the chip shortage, Reuters reported last week. Companies are stockpiling key commodities at higher inventory levels and using software to track the integrity of the supply chains that they order from. 

  Richard Barnett, chief marketing officer of Supplyframe, which provides market intelligence to companies across the global electronics sectors, told Reuters: “The whole issue is exposing the brittleness, the fragility of the automotive supply chain. We’re trying to dual-source whenever possible critical components.”

  Tyler Durden
  Fri, 04/09/2021 – 02:45

• The Donbass War Of 2021?
  The Donbass War Of 2021?

  Authored by J.Hawk exclusively for SouthFront,

  Ever since assuming office, the Biden Administration has been probing countries it designated as America’s enemies for weaknesses through a variety of provocations. So far this approach has not had any successes. China plainly told Biden’s SecState Blinken to go packing, Iran is showing no eagerness to kowtow to Washington under new management, and Russia itself has stayed the course, brushing off verbal attacks and promising either in-kind or asymmetrical responses to any new chicaneries from Washington or Brussels.

  

  That does not mean that Washington has acknowledged defeat. Unwilling to concede, it is liable to escalate a crisis situation elsewhere. Since Navalny’s perennial “poisonings”, “hunger strikes”, and “leg pains” have not had the desired effect on Western governments and his life and health are moreover quite secure in a Russian prison, so the prospect of a new war in Eastern Ukraine is back on the agenda, and the opponents of Nord Stream 2 now have two things to pray for: Aleksey Navalny’s death and a Russia-Ukraine war.

  Zelensky on the Spot

  The Russian government has made it clear on numerous occasions that it is adhering to the Minsk Agreements, will not abandon the Donbass, but at the same time will not escalate the situation out of the desire to minimize the damage to all concerned. In practical terms it means a continuation of “coercive diplomacy”. Russian military force will be used only if Ukraine attempts to create facts on the ground through offensive action. For that reason it is unlikely in the extreme that Russia will be the one to escalate first. It is worth remembering that both the summer 2014 campaign and the winter 2014/15 campaign were initiated by Kiev which first sent troops and bombers to suppress the then-peaceful protests against the Maidan and referenda to secede, and then to hope to quickly resolve the stalemate. Both operations ended in failure through the efforts of the hastily assembled and armed militias of the breakaway republics, with some “Northern Wind” military support that decimated Ukrainian forces.

  Poroshenko survived the disasters that shredded the Ukrainian military thanks to the alliances he’s made with the nationalists while preparing for the Maidan. Zelensky’s position is considerably weaker and more vulnerable to the consequences of a military defeat. Having been elected on a promise to end the war in the Donbass, he has already badly disappointed his supporters on that score. But his transformation into a warhawk, perhaps best characterized by his awkward appearances on the front lines wearing an ill-fitting helmet and a remarkably short armor vest, has not earned him even grudging respect from the nationalists and neo-Nazis on whose shoulders much of Ukraine’s war effort rests. While Poroshenko could get out of many a tight spot with his “Cynical Baderite” jacket, Zelensky is now a very lonely person in Kiev, a hostage to the decisions of Ukraine’s National Security and Defense Council whose decisions he automatically signs, in contrast with Poroshenko who often simply ignored them.

  In practice it means that Zelensky might be in process of being a scapegoat for Ukraine’s all-but-inevitable defeat at the hands of Russian forces hastening to aid the republics in the event of Ukraine’s military scoring early victories. Blackmail might be playing a role in Zelensky’s calculus too. There were persistent reports in March of an imminent release of a documentary implicating Zelensky’s office in the failure of Ukrainian intelligence operation to lure Wagner associates to Ukraine in order to imprison and try them. At the same time, if Zelensky sends his military to a defeat, his reputation will be gravely damaged, possibly to the point of forcing him to resign and even endangering his life. His nervous activity of the first week of April, including a total non-sequitur of a visit to NATO headquarters in order to plead for Ukraine’s quick admission to the alliance, is indicative of a man in a tight spot with no easy ways out.

  Resistible Force Meets Immovable Object

  Zelensky might be in a less anxious mood if he had a reliable military instrument to wield. The Ukrainian Armed Forces are not that instrument. While the Russian military entered 2014 rather unprepared for the prospect of high-intensity land warfare thanks to the Serdyukov reforms that made the brigade the main tactical unit, since that time much lost ground has been recovered through the reactivation of several divisions and armies, such as the First Guards Tank Army, and modernization of Land Forces’ equipment. Russia’s military today is a considerably more impressive force than it was seven years ago.

  Meanwhile Ukraine’s armed forces stagnated. Unmodernized T-64 remains its most numerous main battle tank while production of light armored vehicles proceeds at a trickle. Considering that artillery has been the most active arm in the years of static warfare along the line of separation, Ukraine’s “god of war” remains in poor shape and is suffering from ammunition shortage. In the last decade, Ukraine has suffered seven major ammunition depot explosions, in addition to the tremendous expenditure of munitions during the 2014 and 2015 battles and the occasional escalations of shelling since. Since Ukraine is a failing state that cannot even maintain its crumbling civilian infrastructure, it is little wonder that it has failed to establish domestic munitions manufacture. It did receive some supplies of weapons and munitions from NATO member states which have stores of Soviet-pattern weapons themselves, most notably Bulgaria, but little in the way of heavy artillery munitions. Since Ukraine also does not manufacture artillery pieces, specifically the technology-intensive barrels, for either its tanks or howitzers, the existing artillery park is being gradually used up, and every shell fired not only diminishes existing reserves but also adds to the wear and tear of the artillery pieces. An effort to provide cheap indirect fire capabilities by procuring 120mm “Molot” mortars manufactured in a factory owned by Poroshenko did not live up to expectations. There have been several cases of these mortars bursting during live fire exercises, with dire consequences for their crews. And if a simple technology of a mortar cannot be mastered by Ukraine’s defense industry, what success can it have attempting more challenging tasks?

  Nor is the human factor any better. To borrow Wellington’s characterization of his own soldiers, UAF rank and file are “scum of the earth, enlisted to drink.” Military service remains highly unpopular and attracts only those who cannot find lucrative employment in the civilian economy—or abroad. Draft evasion and bribery of military recruitment officials is widespread, leading the Rada to drastically increase penalties for such activities to include lengthy prison terms. Even if such measures do not result in an exodus of able-bodied males out of the country, they are hardly likely to fill the ranks with motivated recruits. In the first week of April 2021 alone, Ukrainian forces have lost on average one soldier a day to non-combat causes, which included alcohol and drug overdoses, careless handling of weapons, suicide, and murder. The single greatest killer of Ukrainian soldiers, however, are their own minefields, which have killed 57 soldiers and injured 126 between July 27, 2020 (the beginning of the last ceasefire) and April 3, 2021, a statistic indicating a very low level of training and discipline.

  Units themselves remain understrength. Some of the brigades are short of 60% of enlisted personnel and 30% of officers. Troops’ low morale translated into not only irregular and erratic training but also into poor equipment maintenance habits. An inspection of the 59th Brigade whose results fell into the hands of Novorossia intelligence services revealed that as of March 2020, some 60% of the brigade’s heavy weapons and vehicles were either greatly behind their maintenance schedule or were altogether unserviceable. The brigade has not held any maneuvers because the fuel supplies delivered to its logistics units never made it to the actual tactical subunits, suggesting theft by brigade’s leadership.

  Cossack Mace

  For all of the above reasons, a Ukrainian military operation, even a limited one, seems unlikely in the immediate future. The very visible Ukrainian troop movements meant that no element of surprise could be achieved. The aim appears to have been to relocate sizable formations to the Donbass so as to provide them with an ability to launch a quick, almost no-warning attack in the future, after Novorossia’s vigilance has been dulled by months of alerts and provocations.

  Unless other events intervene, the period of greatest danger will be the Cossack Mace exercise held during the summer of 2021. The aim of the exercise which will take place under British leadership is to practice repelling a “Russian invasion” and then launching an offensive to secure the Ukraine-Russia border which would mean the end of Novorossia.

  The fact of British leadership is particularly worrisome, since that country seems to have undertaken the task of “dirty tricks” on Washington’s behalf. In this instance, the “dirty trick” could be using the exercise to rehearse invasion of the Donbass immediately prior to its execution or, equally plausibly, the exercise itself might turn into an invasion. Foreign command of the invasion would be consistent with the Ukrainian trend of slipping under direct control by Western powers, and reminiscent of the role of the Military Professional Resources Incorporated (MPRI) in the planning and execution of Croatia’s Operation Storm in 1995.

  One can’t even rule out direct British participation in such an operation, since a British-supported Ukrainian offensive against Novorossia forces would not be an offensive against Russia. The Defence Review released in March 2021 stated that the British Army would stand up four so-called “ranger regiments”, or battalion-sized formations whose aim would be to train “indigenous forces” and, if need be, actually go to battle with them in order to pursue British interests as part of the “Global Britain” project. An addition of professional British soldiers, in conjunction with British planning and execution of the operation, would provide a morale boost to the UAF and increase the chances of at least moderate success. Once embedded within Ukrainian forces, British troops would also serve as a deterrent against a direct Russian intervention.

  An Ounce of Prevention

  It may well be that the sudden Russian troop movements, the reinforcement of Crimea, and even Belarus’ deployment to the border of Ukraine, indicate contingency planning to launch an enveloping counteroffensive that would trap Ukrainian forces in a giant cauldron between the Dnepr River and Novorossia itself. At the very least, their presence forces Ukraine to divert forces away from its offensive grouping on the Donbass toward the border with Russia and even Belarus. It is also possible that the snap deployment was intended to pre-empt Ukraine’s increasingly obvious moves to mount an offensive during the summer, an offensive with direct foreign military employment. Russia’s pre-emption may also include a changed status of the Donbass. President Putin’s declaration that the rights of 600,000 holders of Russian passports in Novorossia has become a priority for him. An official recognition of Novorossia, combined with the placement of a Russian peacekeeper force, would stop the Ukrainian offensive dead in its tracks and moreover render any British participation unsustainable, though at certain diplomatic cost due to the withdrawal from the Minsk Agreements it would entail. The forceful Russian response has already had the effect of knocking not only Ukraine but, judging by the panicky demands for Russia to “explain” its troop movements, all of NATO. It communicated that under no circumstances will Ukraine enjoy tactical, operational, or strategic surprise. Now the question is whether Russia and major European powers can craft a diplomatic solution that will allow Zelensky to back down in a face-saving manner, thus ending the danger of war against the Donbass.

  British “ranger regiments” and “greyzone warfare”

  Use of NATO forces directly vs. unrecognized republics is no the same as use of NATO forces against Russia. Recognition by Russia would, on the other hand, create an additional layer of deterrence, though associated with risks for Russia.

  If LPR/DPR are formally recognized by the Russian Federation which then spreads the umbrella of “extended deterrence” which, it should be noted, is backed by a potent nuclear arsenal. It would also mean Russia’s formal rejection of Minsk Agreements and of the Normandy Four format, creating a legal limbo fraught with unpredictability. NATO countries which committed themselves to preserving Ukraine’s “sovereignty and integrity” could hardly be expected to ratify this move.

  Major minelaying operations by Ukrainian forces, which may be part of the offensive preparations. The greater the extent and intensity of mines on a certain sector of the front, the greater the ability to concentrate forces on other sectors—suggesting that whichever  sectors of the front are not seeing a minelaying operations are being reserved as corridors for future assault, making them eligible for DPR/LPR defensive minelaying.

  Tyler Durden
  Fri, 04/09/2021 – 02:00

• "Boom Or Bust For The Economy & Markets" – JPM Previews The Next 100 Days For Biden
  “Boom Or Bust For The Economy & Markets” – JPM Previews The Next 100 Days For Biden

  On April 7, 2021, JPMorgan hosted two sessions as part of the J.P. Morgan Virtual Investor Seminar at the time of the 2021 IMF/WB Spring Meetings featuring external speakers and J.P. Morgan’s Policy Center, Federal Government Relations and Global Research team to discuss the priorities for the Biden administration for the next 100 days and the macro and market implications.

  What follows is a summary of the top 10 takeaways of the ideas presented during the seminar by JPMorgan analysts, strategists and economists, as summarized by JPM itself.

  1. US growth is entering a boom period with positive spillovers. J.P. Morgan’s Economics Research team estimates US growth will reach 9.5% in 2Q and 8.3% in 3Q before trending down to 6.3% for the year as a whole. Positive spillovers from US imports and a boom of the US economy from financial markets is a positive for the rest of the world, notwithstanding rising interest rates and possibly upward pressure on the dollar. Although vaccine distribution has been uneven across the world, the impending tidal wave of vaccine supply due to a ramp up in production in the next 3-6 months should improve prospects for growth in the rest of the world.
  2. The recovery from the pandemic is vastly different from the scarring that took place after the 2008-2009 Global Financial Crisis (GFC) as both the US and China will close the output gap and will likely to be operating above full employment by the end of 2022. J.P. Morgan’s Economics Research team sees the US unemployment rate reaching 4.5% by year end which is vastly different to a similar point after the GFC where US unemployment was around 9.5%. This time around, the Fed and other central banks will likely remain firmly on hold in raising rates. Another important difference is that the US does not have an overhang of spending and durables, particularly in housing like in the GFC. Instead, there is tailwind from the improvement in household balance sheets where excess savings has been building up. However, emerging markets will bear the brunt of the scarring. Slow vaccination rates and limited fiscal space place EM (ex-China) around 4% below its pre-pandemic growth path.
  3. The staggered global economic recovery – led by China last year, moving to the US now, with Europe to come later this year – supports the market recovery and risky assets will continue to benefit. The scenario for the global environment remains favorable for risky assets backed by above-trend global GDP growth, continued policy support and progress on vaccination and re-opening of economies. It is a blessing in disguise that the global recovery is not synchronized as the staggered rally has prevented broad-based asset bubbles. A synchronized recovery could have meant a likely overshooting of US treasury yields which would have negative implications for valuations of risky asset classes, specifically for equity multiples. Positioning in risky assets remains below average in a historical context as markets are coming off a record year in market volatility with the VIX recording its highest level in March 2020 that caused broad de-risking across markets. J.P. Morgan’s Equity Strategy Research team expects volatility to decline this year which will contribute to systematic investors’ overall positioning moving higher not just in equity but in other risky assets such as commodities and emerging markets. We continue to favor cyclical sectors and believe that the energy sector remains attractive. While there is a lot of talk about asset bubbles, it is hard to see one in the broad equity market, but certain segments that have more than tripled in price over a short period of time are likely experiencing bubbles, such as innovative ESG  sectors like clean energy, solar energy and Electric Vehicles, along with crypto assets and SPACs.
  4. Fear of rising inflation is here to stay and the run rate for headline inflation will increase, but delivered inflation continues to lag, and we do not see a regime shift in actual inflation performance. While markets could continue to test the Fed’s resolve, the messaging will remain clear that the Fed will tolerate an inflation overshoot, and its guidance for liftoff, rate normalization is likely off the table at least through 2022. We have not changed our forecast that the first Fed hike will not occur until early 2024. The recent pickup in headline inflation rates were due largely to jumps in energy prices. While business surveys could signal higher inflation to come, the relationship between the survey price data and future inflation changes generally has been weak.
  5. The Biden administration will remain focused on super charging the economy before mid-term elections in 2022 with further spending to be pursued, with passage of the infrastructure bill likely to occur by end-September using budget reconciliation even if tax increases are not approved. Democrats’ ability to control the Senate and the composition of the House could flip in 2022, and they are looking to take advantage of the current wave of support generated after the passing of the latest stimulus package and rapidly expanding vaccine eligibility to go as big as they can on an infrastructure package. Republicans are also feeling more confident in their standing as picking up seats in the House was unexpected. The outlook for the Senate is more uncertain due to the three pending retirements of Republican senators Roy Blunt (Missouri), Rob Portman (Ohio) and Pat Toomey  (Pennsylvania). While Speaker of the House Nancy Pelosi has stated that she would like to see passage of the infrastructure package before the August recess, the hard deadline is likely mid-to-late September. This coincides with the September expiration of the surface transportation legislation known as the FAST Act, as well as the expiration of expanded unemployment benefits from the American Rescue Plan and the July 31 debt ceiling, which all act as deadlines for Congressional action.
  6. The recent ruling by the US Senate’s parliamentarian to budget reconciliation procedures have the potential to be a “revolution” in the Senate. The budget reconciliation process allows for a bill to pass Congress with only 51 votes in the Senate, or 50 votes with the vice president casting the tie-breaking vote. The new ruling means that budget reconciliation is no longer limited to one vote within the fiscal year as revisions of prior budget measures can be proposed, with no limit on the number of revisions. The implications of this ruling could mean that Democrats could try and pass much of the infrastructure bill, especially the parts pertaining to social equity, through budget reconciliation. (However, Democratic Senators, such as Joe Manchin, have expressed their reservations on using budget reconciliation again this year.)
  7. The possibility of gaining approval to raise the corporate tax rate to 28% is highly unlikely to pass with an increase in the 22-24% range more likely. During the Trump administration, the corporate tax rate in the US was reduced from 35% to the current rate of 21%. The Biden administration has proposed raising the corporate tax rate to 28% and increase the international minimum tax rate that US companies pay on their foreign profits to 21%. The debate on corporate taxes is not a binary choice between 21% vs. 28%. Speakers cautioned that the US corporate tax rate needs to remain globally competitive and that the relative rate is what matters. Including the average 5% tax rate at the state-level raises the US corporate tax to 26%, which is “in the middle of the pack” as the average corporate tax rate for an OECD country is 24%. If the US corporate tax is raised to 28%, it effectively increases to 33% including state taxes, which is a higher rate than China or Scandinavian countries. This week, Treasury Secretary Yellen made the case for a global minimum corporate tax to address the global competitiveness issue and “avoid a race to the bottom.” The discussion on tax increases is separate from proposals to increase spending. There is no decision about how much of the infrastructure proposal needs to be paid for, or with what specific tax policy change. Nor is there a unified tax agenda and taxes will likely only be raised as much as they need to be raised. Wealth taxes are unlikely to be approved. A reversal of the state and local tax (SALT) cap, which currently hits high income earners the most, will not only be optically unappealing, it is expensive to replace and its expiration date at the end of 2025 makes it less open to debate than other measures. With slim majorities in the Senate and House, Democrats cannot afford to lose a single vote in the Senate and 3-4 votes in the House (though the House number changes daily) and many Democrats will still be hesitant to raise taxes before the 2022 election, when control of both the House and Senate is in play.
  8. Markets will remain focused on the risk of a disorderly rise is US bond yields as the projected $3.8trn budget deficit will require $3trn in net new US Treasury supply with ongoing concerns on whether flows will be absorbed smoothly. We look for higher yields and a steeper curve beyond the 2-year point, and our US Treasury team forecasts the 10-year yield at 1.95% at year-end. Bearish positions are focused on the 7- and 20-year points on the curve that have lacked sponsorship. Discussions on implications of the expiration of the supplementary leverage ratio (SLR) carve-out are ongoing but unresolved, with some calls by former Fed officials to at least exempt the incremental reserves that have accumulated since it began its latest securities purchase program in March 2020 as GSIB banks are among the largest buyers of US Treasuries.
  9. Credit markets have been immune to higher rates, equity and commodities volatility in large part due to positive technicals. While investors remain undecided between whether or not reflation will prove orderly or disorderly, issuance trends seem to reflect a much stronger statement by companies on credit market conditions going forward. Credit markets have been supported by the macroeconomic ‘sugar rush’ associated with the new Biden administration’s spending plans, and US Treasury yields have duly reacted to the specter of inflation. This debate might be entering a new phase, however. The new executive is set to unveil a program of tax increases to pay for its $2trn infrastructure spending plans, which might influence expectations of how quickly said sugar rush might fade. However, the stickiness of secondary market spreads continues to reflect underlying positioning, which does not appear excessively levered or complex. All-in funding costs have likely bottomed and companies are refinancing ‒ especially in loans ‒ and companies unencumbering assets pledged as part of rescue-financing packages last year.
  10. Despite the volatility and underperformance of EM FX and local markets, which could persist with the ongoing rise in US rates, EM credit valuations are attractive. EM credit valuations are attractive and cross-over and high grade investors have been gravitating to holding barbell positions in US and EM credit given attractive pickup (as much as 100bp in yield over US HY) and the low EM HY corporate default rate (JPM 2021F: 2.5%), which is expected around the levels of US HY (2.0%). EM equities haven’t appreciated much over the past decade, and rising 10-year US treasury yields has predominantly been associated with positive absolute returns for EM equities but underperformance to DM equities. Our EM equity strategists have looked back 11 years (since the GFC) and identified periods where the US 10-year yield increased by more than 50bps. During these periods, there was a median USD+3.4% EM equity gain. EM equities produced negative results in only 2 of 8 periods (25%) (See Rising US yield: more friend than foe to EM equities, Pedro Martin Junior, 7 April 2021). US-China tensions will remain in the headlines, but both the US and China have focused on domestic issues rather than each other in recent months. The Biden administration has embraced a multilateral approach to discussions with China, focusing on working with allies and international institutions, and the first meetings have included Japan, Korea and the European Union.

  Tyler Durden
  Thu, 04/08/2021 – 23:40

• 53% Of Canadians On Brink Of Insolvency
  53% Of Canadians On Brink Of Insolvency

  53% of Canadians are on the verge of insolvency and are $200 or less away from not being able to pay their monthly bills and obligations, while 25% took on more debt during the pandemic, according to a new survey by MNP.

  

  The news comes as Canada’s MNP consumer debt index hits a five-year high, and is a 10-point jump from a December survey, according to Bloomberg.

  “The anxiety Canadians are feeling about making ends meet – or already unable to do so – tells us we may eventually see an avalanche of households falling behind on payments or defaulting on loans, mortgages, car payments or credit cards,” said MNP president, Grant Bazian, in a Thursday report, which noted that government support programs which were meant to be temporary have alleviated the pain to some degree.

  Households may have tried to save more and spend less amid the pandemic, and – to be fair – some have been very successful at doing just that. However, there are others who have taken on more debt due to job loss, wage reductions or desperately trying to keep small businesses afloat. 

  According to MNP, a quarter of Canadians took on more debt amid the pandemic. Among respondents, 20 per cent said they used savings to pay bills, 14 per cent used credit cards, seven per cent used a line of credit, while three per cent took out a bank loan or deferred mortgage payments, respectively. -Bloomberg

  “Those taking on more debt are becoming increasingly vulnerable to interest rate increases in the future. They might find that their debt becomes unaffordable when that happens,” Bazian wrote.

  According to Pattie Lovett-Reid, Chief Financian Commentator for CTV, “Higher rates should be a real concern to those who borrow and naively think rates won’t head higher once the economy warrants it. In fact, I find it outrageous that six in ten respondents said that the current low-rate environment makes it a good time to buy things they might not otherwise be able to afford,” adding: “We need to stop spending if we can’t afford it – now.“

  As far as solutions go, Bazian recommended that a Licensed Insolvency Trustee be established to help consumers set up monthly budgets, refinance credit, consolidate debts, negotiate with creditors, sell high-value assets that might provide additional cashflow – and of course, declare bankruptcy.

  Tyler Durden
  Thu, 04/08/2021 – 23:20

• Robert Epstein: Big Tech's Greatest Threat
  Robert Epstein: Big Tech’s Greatest Threat

  Authored by Robert Epstein via The Gatestone Institute,

  “Ephemeral experiences”: You might never have heard this phrase, but it’s a very important concept. These are brief experiences you have online in which content appears briefly and then disappears, leaving no trace. Those are the kinds of experiences we have been preserving in our election monitoring projects. You can’t see the search results that Google was showing you last month. They’re not stored anywhere, so they leave no paper trail for authorities to trace. Ephemeral experiences are, it turns out, quite a powerful tool of manipulation.

  

  Are people at companies like Google aware of the power they have? Absolutely… In emails leaked from Google to the Wall Street Journal in 2018, one employee says to others, “How can we use ephemeral experiences to change people’s views about Trump’s travel ban?” There is that phrase, “ephemeral experiences.”

  During a period of days before the 2020 election, we found that on Google’s home page, it was sending “go vote” reminders just to liberals. That’s a powerful ephemeral message, and not a single one went to conservatives. How do we know this? Because we were recording the content our 700 “field agents” were seeing on their computer screens. That was a diverse group of registered voters we had recruited in three key swing states. Google was sending those vote reminders only to liberals. That’s a powerful manipulation that’s entirely invisible to people — unless a group like ours has found a way to monitor what people are seeing.

  A preliminary analysis of the more than 500,000 ephemeral experiences we preserved in Arizona, North Carolina, and Florida, turned up some disturbing things. Number one, we found a strong liberal bias in the search results people saw on Google when they searched for political topics; this bias was absent on Bing and Yahoo. 92% of searches are conducted on Google, and we know from years of experiments we’ve conducted that biased search results can easily shift the voting preferences of undecided voters, and those are the people who decide the outcomes of close elections. In experiments, we can easily shift 20% or more of undecided voters after just one search by showing them biased search results.

  In a national study we conducted in 2013, in one demographic group — moderate Republicans — we got a shift of 80% after just one search, so some people are especially trusting of search results, and Google knows this. The company can easily manipulate undecided voters using techniques like this — in other words, people who are vulnerable to being influenced.

  Even before people see search results, biased search suggestions — those phrases Google flashes at you when you start to type a search term — can shift thinking and behavior. We have shown in controlled experiments that biased search suggestions can turn a 50‑50 split among undecided voters into a 90‑10 split, with no one having the slightest idea they have been manipulated.

  People have no idea that manipulations like these are being used. They are simply doing what they always do — typing in a search term, clicking (sometimes) on a search suggestion, and then clicking on a high-ranking search result, which takes them to a web page. They are trusting what is high in search results, usually clicking on the first or second item and trusting that this is the best answer to their question.

  Unfortunately, people mistakenly believe that computer output must be impartial and objective. People especially trust Google to give them accurate results. Therefore, when people who are undecided click on a high‑ranking search result and are taken to a Web page that supports one candidate, they tend to believe the information they’re being shown. They have no idea that they may have been driven to that web page by highly biased search results that favor the candidate Google is supporting.

  Dwight D. Eisenhower did not talk about his accomplishments in his famous farewell speech of 1961. Instead, he warned us about the rise of a “technological elite” who could control public policy without anyone knowing. He warned us about a future in which democracy would be meaningless. What I have to tell you is this: The technological elite are now in control. You just don’t know it. Big Tech had the ability to shift 15 million votes in 2020 without anyone knowing that they did so and without leaving a paper trail for authorities to trace. Our calculations suggest that they actually shifted at least six million votes to President Biden without people knowing. This makes the free-and-fair election — a cornerstone of democracy — an illusion.

  I am not a conservative, so I should be thrilled about what these companies are doing. But no one should be thrilled, no matter what one’s politics. No private company should have this kind of power, even if, at the moment, they happen to be supporting your side.

  Do these companies think they are in charge? Are they planning a future that only they know for all of us? Unfortunately, there are many indications that the answers to these questions are yes. One of the items that leaked from Google in 2018 was an eight‑minute video called “The Selfish Ledger,” which should be accessible here. I also made a transcript of the film.

  This video was never meant to be seen outside of Google, and it is about the power that Google has to reshape humanity, to create computer software that “not only tracks our behavior but offers direction towards a desired result.”

  How do we protect ourselves from companies like this? It’s more difficult than you might think. How do you control a mind control machine, after all? You might have heard the phrase “regulatory capture” — an old practice in which a large company that is facing punishment from the government works with the government to come up with a regulatory plan that suits the company.

  When you are talking about, for example, “breaking up” Google, all this means is that we will force them to sell off a couple of the hundreds of companies they have bought. On average, Google buys another company every week. We force them to sell off some companies, the major shareholders are enriched by billions of dollars, and the company still has the same power and poses the same threats it does today — threats to democracy, to free speech, and even to human autonomy.

  Tech moves at the speed of light, but regulation and law move slowly. It’s doubtful that regulations and laws will ever be able to protect us from emerging technologies. But imagine if these companies knew that we were monitoring them on a large scale 365 days a year — that we were, in effect, doing the same thing to them that they do to us and our children 24 hours a day.

  Imagine that we were, in effect, looking over the shoulders of thousands of real people (with their permission), just as the Nielsen Company does with its network of families to monitor their television watching. Imagine if these tech companies knew that they were being monitored — that even the answers they are giving people on personal assistants like Amazon’s Alexa and Apple’s Siri were being monitored. Do you think they would risk sending out targeted vote reminders to members of just one political party? I doubt it very much, because we would catch them immediately and report their manipulation to authorities and the media.

  On October 30, 2020 — a few days before the November 3rd election, we went public with some of our election monitoring findings, and we got Google to back down. From the 31st on, Google started sending those vote reminders to everyone, not just to liberals.

  Remember that all the usual election shenanigans are inherently competitive: tampering with votes, mail, and voting machines. But the kinds of influence that I have been discovering and studying since 2013 is not competitive. That is the difference. In other words, if Google itself wants to favor one cause or one candidate, there is no way to counteract what they are doing. In fact, without monitoring systems in place, you can’t even detect Google’s manipulations, even though they can shift the opinions and votes of millions of people. And people have no idea they’re being manipulated, which makes these kinds of manipulations especially dangerous. People end up concluding that they have made up their own minds when in fact they have not.

  We have conducted controlled experiments with tens of thousands of people covering five national elections. We know how powerful these new forms of influence are. We know that people cannot see them. We know that people mistakenly end up believing that they have made up their own minds when in fact we were the ones who decided which candidate they were going to support.

  What can we do? In my opinion, the solution to almost all the problems these companies present is to set up large‑scale monitoring systems and to make them permanent — not just in the United States, but around the world. Because monitoring is technology, it can keep up with whatever the new tech companies are throwing at us, and however they are threatening us, we can get them to stop.

  I am envisioning a new nonprofit organization that specializes in monitoring what the tech companies are showing to voters, families, and children — protecting democracy and the autonomy and independence of all citizens. There might also be a for‑profit spinoff that could serve as a permanent funding source for the nonprofit. The for‑profit spinoff could provide commercial services to campaigns, law firms, candidates, researchers, and many others.

  And there’s another way to completely eliminate the threats that Google poses to democracy and humanity. As I noted in an article I published in Bloomberg Businessweek in 2019, and as I testified before Congress that year, our government could quickly end Google’s monopoly on search by declaring that the database Google uses to generate search results is a “public commons,” accessible to all. It is a very old legal concept, and it is a light-touch form of regulation. It would rapidly lead to the creation of thousands of competing search platforms, each appealing to different audiences.

  On November 5, 2020, three U.S. Senators — Senator Mike Lee, Senator Ron Johnson, and Senator Ted Cruz — sent a letter on U.S. Senate stationary to the CEO of Google. The letter talks about some of the findings from a 2020 online election monitoring project in which my team and I had discovered several things.

  We had detected — just as we had in previous elections — a strong liberal bias in Google search results, but not in search results on Bing or Yahoo. That is important for comparison purposes. It was a liberal bias sufficient to have shifted at least six million votes over time toward Biden and toward other Democratic candidates.

  We also found a smoking gun. This is what the Senators’ letter focuses on. We found that for a period of days before the election, on Google’s home page the company was sending a “go-vote” reminder just to liberals. Not a single one went to conservatives. How do we know this?

  Because we had recruited 733 field agents in key swing states: Arizona, Florida and North Carolina. The agents were registered voters. They were diverse, politically and in other ways demographically. We knew who the liberals were, who the conservatives were, and who the moderates were.

  With their permission, we had installed special software on their computers that allowed us, in effect, to look over their shoulders as they were doing politically related things on the Internet. We aggregated that data. What we are particularly interested in are what are called “ephemeral experiences.” That phrase comes right from a leak of emails from Google to The Wall Street Journal.

  Ephemeral experiences — it’s a very important concept. It’s how Google and other tech companies shift opinions and votes without people knowing. We were preserving these fleeting events that impact us every day and that normally then disappear, leaving no trace. Normally, these kinds of events — like search results, search suggestions, newsfeeds, or messages coming from Facebook or Google — normally, events like these appear, they impact us, they disappear, and they are then lost forever. You can’t go back in time and see what these events were. You can’t look back at the search results Google showed you last month.

  I have been conducting randomized controlled studies on the impact of ephemeral experiences on behavior, thinking, and voting now for almost eight years, so I have learned a great deal about how they work, and they are powerful. Are people at companies like Google aware of the power they have? Absolutely.

  In leaked emails from Google in 2018, one employee says to others, “How can we use ephemeral experiences to change people’s views about Trump’s travel ban?” There is that phrase: “ephemeral experiences.”

  Why are they interested in using ephemeral experiences to influence people — and not just us, by the way, but also people around the world? Because such experiences are extremely powerful and because they leave no paper trail for authorities to trace. They are the perfect weapon for changing people’s views or changing the outcome of elections.

  We set up our first election monitoring system in 2016. We were able to preserve 13,000 election‑related searches on Google, Bing, and Yahoo. We found significant liberal bias in Google search results, sufficient to have shifted between 2.6 and 10.4 million votes to Hillary Clinton (whom I supported) without people knowing that this was occurring and without leaving a paper trail.

  This was quite an accomplishment at the time. We had 95 field agents in 24 states. We preserved 13,000 searches and about 98,000 Web pages. Preserving those ephemeral events allowed us to analyze them, looking for political bias.

  To compare, this year in the Presidential election we had 733 field agents in three key swing states because we knew that if there were going to be manipulations, we would most likely detect them in those states.

  This time we preserved over 500,000 ephemeral events – not just on Google, but on Bing, Yahoo, Google’s home page, YouTube and Facebook. It will take us months to analyze this wealth of data.

  A preliminary analysis of the data we collected yielded disturbing findings:

  • Number one, we found strong liberal bias in Google search results, but not in search results on Bing or Yahoo. Since 92% of searches are conducted on Google, that can shift a lot of votes — not yours, perhaps, but the votes of undecided voters — the people who decide who wins a close election.

  • In controlled experiments, we can easily use biased search results to shift 20% or more of undecided voters. We can shift their opinions and their voting preferences after just one search.

  • In one demographic group — moderate Republicans — we found a remarkable shift of 80% after just one search.

  People have no idea this is occurring. People are simply doing what they always do. They are trusting what is high in search results, usually clicking on the first or second item and trusting that doing so will lead them to the best web page.

  People mistakenly believe that computer output must be impartial and objective, and they especially trust Google for giving them accurate results. Therefore, when someone who is undecided clicks on a high‑ranking search result, and it takes them to a Web page that makes one candidate look better than the other, the user tends to trust the content. It has been chosen by an impartial computer algorithm, after all.

  With television, newspapers, billboards, and advertisements, everyone is skeptical of what they see because they see the human hand. Also, in conventional forms of influence, there is competition. You put up your billboard, I put up mine.

  The problem with platforms like Google and Facebook and Twitter is that they have no competitors. If Google itself is favoring one candidate or one party, you cannot counteract the influence that their tools are having on users.

  Generally speaking, in fact, unless you do the kind of monitoring that I do, you can’t even detect what they are doing. They have tremendous power, not just here but around the world, to impact thinking, behavior, beliefs, attitudes, purchases — and votes.

  I gave a speech recently at Hillsdale College. They asked me to submit a copy in writing, which I did. My title was “The Technological Elite Are Now in Control.”

  It might surprise you to hear where I got that phrase from: “technological elite.” It comes from Dwight D. Eisenhower’s farewell speech as president in January 1961, which he gave a few days before John F. Kennedy was inaugurated.

  Some people are old enough to remember that speech because it warned people about the rise of “the military industrial complex.” In that same speech, Eisenhower also warned about the rise of a “technological elite” who could control public policy without anyone knowing.

  This was 1961, a decade before the invention of the microcomputer, decades before the invention of the Internet, decades before the founding of Google. What an extraordinary speech that was.

  The usual farewell speeches of a president usually review an administration’s accomplishments. Sometimes we also get some platitudes about how great the American people are and what a great future we have to look forward to.

  That is not what Eisenhower did. Remember, this was a highly decorated U.S. Army general who led the Allied forces in World War II. Eisenhower did not talk about his accomplishments. He warned us about a future in which democracy would be meaningless.

  Here’s what I have to tell you about this issue: The technological elite are now in control. You just don’t know it. They had the ability to shift 15 million votes in 2020 without anyone knowing that they did so and without leaving a paper trail for authorities to trace — except, of course, for my monitoring projects.

  Let me say a bit about that. What we have done is extraordinary. We have preserved hundreds of thousands of these extremely dangerous ephemeral experiences that Google and other tech companies now use deliberately to affect thinking and behavior.

  How do we know it’s deliberate? Well, I’ve already mentioned those emails that leaked in 2018, and, at this point, we also have several hundred leaked documents, as well as a dozen whistleblowers who are telling us over and over again that Google, Facebook, Pinterest, Twitter and other tech companies have a strong political agenda and that they are using tools that people are unaware of to advance that political agenda.

  I am not a conservative, so I should be thrilled about what these companies are doing. I have friends and family members who are thrilled and who are also unhappy with my research. But no one should be thrilled, no matter what one’s politics, because no private company should have the power to undermine our democracy.

  Today, they might be advancing a cause you believe in, but you don’t know what cause they will be supporting tomorrow. If you look around the world, in fact, you will find that Google does not necessarily support the left outside the United States.

  Here, 96% of Google’s donations go to Democrats, but in Cuba, the company supports the right because the left is in power, and the people in power don’t like Google.

  In China, Google works with the Chinese government to help the government to surveil and control its population. You don’t know what these companies are going to do — what their agenda is going to be from one day to the next.

  Another leak from Google is a PowerPoint presentation called “The Good Censor.” In this presentation Google explains that, by default, it is the world’s censor, but that it is a “good” censor because the decisions they make about what we see and do not see are good decisions. According to whom? (For further information on this issue, see my article, “The New Censorship,” in U.S. News & World Report.)

  The problem here is that these companies are not accountable to us. Our elected officials are, and they come and go. We can vote them out of office, but Google is not accountable to anyone, except maybe its shareholders.

  Facebook is not even accountable to its shareholders. Mark Zuckerberg holds the lion’s share of voting stock, so he is not accountable to anyone.

  These are the executives who now control the most powerful tools of manipulation ever invented.

  I discovered the first such tool in 2013 — the Search Engine Manipulation Effect — SEME for short. Since then, I have discovered a dozen similar new forms of online influence and have been studying and quantifying them over the years.

  Manipulating search suggestions, for example — those little phrases that flash at you as you are typing a search term into the search bar — can turn a 50‑50 split among undecided voters into a 90‑10 split with no one having the slightest idea they have been manipulated. I call this manipulation the Search Suggestion Effect (SSE).

  Those answer boxes you see above the search results also impact opinions and votes. Did you know that 50% of Google searches no longer end in a click? Think about what that means. In other words, while someone is typing a search term, Google flashes an answer and many people just accept it. No click. I’ve been studying this phenomenon too; I call it the Answer Bot Effect (ABE).

  How about the Google Home device or the Google Assistant on Android phones? You ask a question, and a computerized voice simply gives you “the answer.” This also shifts opinions and votes, just as those answer boxes do. But where did that answer come from? Who decided that that was the correct answer? Who checked it? Was it checked by any experts or scholars? Of course not. The answers Google gives you serve the company’s needs. They make more money for the company, shift political thinking according to company values, or both.

  Perhaps you have an Apple iPhone, and Siri gives you answers, so you’re free from Google’s influence, right? But do you know where Siri gets its answers from? From Google. Siri is just an extension of Google. Apple pays Google $6 billion a year to get those answers.

  Let me just finish by pointing out some very broad issues here. We are all aware at this point that under the Trump administration (but not under Obama), several federal agencies went after Google, and to some extent, Facebook: the FCC, the FTC, the DOJ, and so on. You might also have heard about our government’s plans for breaking up Big Tech companies. I work with members of Congress, with people from the DOJ, and with the attorneys general of several states, and I can tell you that all that is happening here is “regulatory capture.”

  That’s a very old practice in which a large company that is facing punishment from the government works with the government to come up with a plan that suits the company. That is what is happening right now. You might think that these companies are on the verge of being tamed, but that is not the case.

  When you are talking about breaking up Google, for example, all this means is that the government will force them to sell off some of the hundreds of companies they have bought over the years. On average, Google buys another company every week.

  When they sell off companies, the major shareholders will be enriched by billions of dollars, and the company will still have the same power it has now. It will still present the same threats it currently poses to democracy, to free speech, and even to human autonomy.

  This is because you cannot break up the Google search engine itself, and, in the case of Facebook, you cannot break up the social media platform itself. For both companies, these central platforms give these companies three powers which pose, in my view, grave threats to democracy and humanity.

  The first power is surveillance. Google is observing us and our children using more than 200 different tools that people are entirely unaware of. If you wear a Fitbit device, first of all, you should throw it away. Google recently purchased Fitbit, which allows it to track physiological data about you and your children 24 hours a day. If you have a smart thermostat in your house made by the Nest company, I suggest you replace with an old-fashioned one from Home Depot as soon as possible. About five years ago, Google bought Nest, after which it installed microphones into the smart thermostats without telling anyone. The most recent versions of the thermostats have cameras in them, as well.

  Google uses a business model which is called the “surveillance business model,” which Google invented 20 years ago, and that model has since spread to thousands of other companies. They trick us into using software or gadgets that spy on us, and then they monetize the personal information they’re collecting.

  They have no actual products. We the people are their products. That is the world that we will be handing over to our kids and grandkids. To me, that is unacceptable.

  What can we do? Unfortunately, not just because of regulatory capture, but for other reasons as well, I do not believe that laws or regulations are going to solve this problem. Laws and regulations move very slowly, while technology moves at lightning speed.

  So what, if anything, can we do? In my opinion, the solution to almost all the problems that these companies present is to set up monitoring systems of the sort that I have set up, but to set them up on a very large scale and to make them permanent — not just in the United States, but around the world.

  Monitoring is technology, so it can detect and expose whatever new manipulations tech companies are dishing out, and it can also get them to stop.

  How do I know this? Because on Thursday, October 29, 2020, we got Google to back down on a blatant manipulation. On that day, I decided to go public with some of our monitoring results, and I was communicating all day with a reporter, Ebony Bowden, from the New York Post. I sent her lots of details about what we were finding. She drafted an article that day about evidence my team and I had collected which suggested that there had been large‑scale election rigging in 2020.

  Her editor asked Google for comments on the article before it was to be printed the next day. Even without asking for comments, Google knew all about the upcoming article, because the New York Post, like The New York Times and The Guardian and hundreds of other newspapers, not to mention thousands of schools and universities, shares all its emails with Google. (See my article on this topic in The Daily Caller here.)

  That night, two things happened — one bad, one good. The bad thing is that the article was pulled, killed. In other words, I was censored by the conservative, Trump-supporting New York Post, which is crazy. How could that have happened? Might someone from Google have reminded the powers that be at the Post that 32% of the newspaper’s traffic comes from Google? Google could shut down the Post in a heartbeat.

  The New York Post had taken on Twitter just a few weeks before, because Twitter was suppressing its negative story about Hunter Biden. The Post could take on Twitter because only 5% of its traffic comes from Twitter, but taking on Google would have been risky.

  And a second thing happened that night, important because it means there is hope for the future. A few minutes before midnight on Thursday, October 29th, Google stopped its targeted “go-vote” manipulation. From that point on until the end of Election Day, all 733 of our field agents received those go‑vote reminders. The targeting stopped.

  Imagine if these companies knew that we were monitoring them on a large scale 365 days a year — that we were, in effect, looking over the shoulders of thousands of real people, just as the Nielsen Company does with the Nielsen families. Nielsen monitors television watching; that is where the Nielsen ratings come from.

  Imagine if these tech companies knew they were being monitored — that even the answers they were giving on personal assistants were being monitored. Do you think they would risk sending out targeted vote reminders just to some political groups and not others? I doubt it, because they would risk fines and even jail sentences by doing so.

  We need to find the resources and the will to create large‑scale, permanent monitoring systems. They will protect our children and maybe even our grandchildren from manipulation by new technologies. They will protect democracy, free speech, and human autonomy. That is the vision I’m sharing with you today.

  I’ll finish by giving you a couple of links. One is MyGoogleResearch.com, If you scroll to the bottom of the page, you will find a link to the letter that was sent by three US senators to the CEO of Google, on November 5th, 2020.

  If you are interested in my solution to the coronavirus problem, please visit NationalTestingDay.com. And if you are interested in how to get some privacy online, I recommend that you read my article at MyPrivacyTips.com. It begins, “I haven’t received a targeted ad on my computer or mobile phone since 2014.” You can learn how to protect yourself and your family from aggressive new kinds of surveillance that are operating 24 hours a day. You can learn how to begin to get some privacy back in your life.

  *  *  *

  The following is a transcript from a briefing Dr. Epstein delivered to Gatestone Institute on November 10, 2020

  Question: Have you found anything from the November 3rd election?

  Dr. Epstein: Yes, definitely. We found a consistent pro‑liberal bias in all 10 search positions on the first page of Google search results, sufficient to have shifted millions of votes over time — not the votes of people who are strongly committed but the votes of people who are undecided, trying to make up their minds. Six months before a national election in the U.S., that’s about 30 million people.

  We also found that bias in every demographic group that we’ve looked at so far, including conservatives. In other words, Google was sending pro‑liberally‑biased search results to conservatives, not just to liberals.

  You cannot look at search results with the naked eye and see this happening. You need to look at the news sources and web pages, which is what we do. Of course, we also found that smoking gun, namely, a go‑vote reminder being sent exclusively to liberals.

  It is my understanding that these senators are going to subpoena the CEO of Google again and that I will be at the same hearing. They are going to say to this man, “How do you explain Dr. Epstein’s results?” They’re trying to catch him in an outright lie so that he can be charged with lying to Congress.

  Question: What can be done by private businesses to expose or stop all of this? It seems a potential national security threat.

  Dr. Epstein: I am not sure about the security threat. Google works closely with our intelligence agencies. Google was created in part with funds that came from the NSA and the CIA. The thinking at the time was pretty reasonable. Google was building a very good gateway to information on the Internet.

  The thinking of the intelligence community was that this would be a good way for us to find people who want to build bombs, to find people who want to hurt our government, and to find people who are a risk to national security. Google works closely with our intelligence agencies and with other intelligence agencies around the world.

  The national security issue is a bit complicated because of that long‑running collaboration. There is no question, though, that Google and, to a lesser extent, other tech companies, pose a serious threat to democracy. I do not think at this point that we even have a democracy anymore. The warning that Eisenhower gave us has come true.

  Eisenhower urged us to be vigilant because he thought a technological elite would arise that would control public policy without us knowing. In my opinion, as I mentioned, we are already there. In the swing states, at least, if you look at how close the vote was, I can say on the record that I do not believe that Biden could have won this election without the clandestine support of the tech community.

  Looking at the numbers, I suspect that President Trump would have won the election by a large margin without that form of influence. [Emphasis added.]

  Question: How much of your findings are relevant to election recount efforts? Are we simply on notice for the future?

  Dr. Epstein: The recount efforts, in my opinion, are not going to go anywhere. As a lawyer told me many years ago, you have got to give a judge something to hang his or her hat on.

  Remember that tampering with votes, mail, and voting machines is competitive, whereas the kinds of influence that I have been studying are not competitive. That is the difference. In other words, if Google itself wants to favor one cause or one candidate, there is no way to counteract what it is doing.

  It is not like television ads or mail tampering, because this type of influence is not competitive. That is why it is incredibly dangerous. The fact that people cannot even see the influence makes it even more dangerous. People end up concluding that they have made up their own minds when in fact they have not. We know this because we have done experiments with tens of thousands of people covering five national elections.

  We know how powerful these new forms of influence are. We know that people cannot see them. We know that people mistakenly end up believing that they have made up their own minds when in fact we were the ones who decided which candidate they were going to support. We decided, not them.

  Question: What about these findings that certain algorithms and mechanisms within the actual ballot machines can physically switch a vote from one candidate to another?

  Dr. Epstein: I have been reading those reports. In court, you have to have evidence not only that that is possible but that it actually occurred. Then you have to show — that is the hard part — that there was consistent tampering in one direction only. It is not enough to show what is possible. It is not enough to come up with some examples of irregularities. You have to show consistent shifting of votes in one direction. But we are talking about activities that are inherently competitive. In other words, there have always been irregularities on both sides — always — and there always will be.

  I saw some clips from Fox News from the 2018 election in which some of the hosts on Fox News were making fun of some of the Democratic candidates who had lost. At that point, Democratic candidates were claiming that there was vote tampering going on in that election, that they only lost because of cheating, of fraud, of vote tampering.

  Of course, that went nowhere. So far, the lawsuits that have been filed and that have been heard by the courts have been thrown out. Given the numbers that we have at this point, this election is over.

  Biden ended up with 306 electoral college votes, which, by the way, is exactly what Trump had in 2016. Biden does not even need a couple of those swing states. The margins in those states — three of which we were monitoring — are not small margins.

  Some of you remember the Gore versus Bush matter in which the Supreme Court decided to stop the recount in Florida. Al Gore was very gracious, even though he had won the popular vote by 500,000 votes. There was some question about irregularities, certainly, in the vote count in Florida.

  Question: Based on what you are saying, there will be no more Republican election victories. There will never be any other honest election.

  Dr. Epstein: That is why I was asking about how we move forward. That is the question. How are we going to move forward? What disturbs me most about a Biden presidency is that the investigations into the tech companies that began under Trump might be shut down.

  There is precedent for that, because in January 2013 when Obama began his second term, one of the first actions he took was to shut down the anti‑trust investigation that was underway against Google by the Department of Justice. That was just after someone from Google visited the White House.

  Obama’s chief technology officer was a former Google executive. So was Hillary Clinton’s chief technology officer, Stephanie Hannon. By the end of Obama’s second term, six federal agencies were being run by former Google executives. 250 people swapped high positions in his administration with high positions at Google. There were 450 visits to the White House by Google representatives — about 10 times more than any other company.

  I have real concerns here about what the future is going to be like. The tech companies might be able to consolidate their power over the next four to eight years. We might never be able to fight them after that.

  But we can still set up those monitoring systems which, at the very least, will prevent them from manipulating our elections. That is my vision: to set up systems that will protect humanity, democracy, and free speech. That, I believe, we can do with private funds no matter who is in power.

  To make sure they do their job properly, monitoring organizations should be independent of government. If they are controlled by the government, the ruling party will make sure there is never a free-and-fair election again.

  I am thinking about large‑scale, non‑partisan monitoring systems that report irregularities as they occur and that preserve data that is normally lost forever.

  Question: You mentioned at the beginning about receiving an email and a letter from an attorney in DC telling you to disappear for a while for your own good. Have you been intimidated by anyone or anything into stopping your work?

  Dr. Epstein: I have not been intimidated. I have received these warnings before. They do concern me. I had a reporter contact me about my research. He had a lot of questions, of course. Then he called me a couple of days later. He said he called Google to get comments on my research. He said he was speaking, he believed, with the head of their public relations department.

  He said, “She screamed at me.” He said, “I’ve never had that happen before.” Then he said, “I have two things to say about that. Number one, you have their attention, and number two, if I were you, I would take precautions.”

  In 2019, I testified before Congress about my research and about my concerns. I also gave a private briefing to some of the AGs about these issues. Afterwards, one of these AGs — I will never forget this — came up to me said, quite seriously, “Dr. Epstein, I think that in the next few months, you are going to die in an accident.” Then he walked away. A few months later, I did not die in an accident, but my wife did — the day after Christmas in 2019. I am still wearing my wedding band.

  I have some concerns. I mean, I have five children. I want them to be safe, obviously. Google sent a private investigator to my house a few years ago, which was quite disturbing to my wife and to people I was working with at the time.

  Question: You talked about thermostats now having cameras and microphones in them. Big Brother is becoming reality. Has this not been exposed by Congress or the media, and if not, why not?

  Dr. Epstein: First of all, this has gone so far that it is almost terrifying. The fact is, if you have an Android phone, that phone is listening. If you disconnect from your service provider, the phone is still listening and it is still keeping track of where you go during the day, what books you read on your phone, what music you listen to on your phone, and so on — all your emails, everything — the most confidential personal emails that you send out, your phone is tracking all that. The moment you reconnect with the Internet or reconnect with your mobile service provider, it uploads all that information to Google.

  The surveillance is completely out of hand, and you are saying, “Well, what about Congress?” The problem, you see, is that many members of Congress are getting money from Google, and the Democrats are also getting votes.

  As you may or may not know, many nonprofit organizations are also getting money from Google, including some prestigious conservative organizations. That is probably one of the reasons I found it almost impossible to fund my 2020 monitoring project.

  Google is putting lots of money into the pockets of members of Congress, and Google knows more about members of Congress than they themselves do.

  It is very hard for anyone — any business, certainly — to go up against Google. You are risking the future of your business. I had dinner the other night with some friends from Breitbart. (Many of my friends now are conservatives, which is crazy.) They told me that Google has eliminated about 99% percent of their traffic. How do you fight that?

  The members of Congress are for the most part immobilized. There are very few who are doing what Ted Cruz is doing, and they are taking a tremendous risk when they do. Why isn’t Congress acting? Because Google controls Congress.

  Question: The monster is so enormous that nothing can be done to challenge or dismantle it?

  Dr. Epstein: I would not say that exactly. For example, the day before I testified before Congress, I published an article in Bloomberg Businessweek, explaining how Congress, the DOJ, or the FTC could quickly end Google’s monopoly on search. They just have to declare that the database Google uses to generate search results is a public commons.

  It is a very old legal concept, and it is a light-touch form of regulation. It would lead to the creation of thousands of competing search platforms, each appealing to different audiences. Search would become just like news media. It would become highly competitive, just as it used to be before Google became a monopoly, and search would also become far more innovative if this happened. There have been no innovations in online search since Google took control.

  Congress could make Google’s database public. They could negotiate with Google, saying, “This is what you need to do. We need you to agree, and if you don’t, we’ll do something far worse.” The EU could also make it happen. That is a more interesting possibility, because the members of the European Parliament, for the most part, are not in Google’s pocket.

  Congress could also help us to set up monitoring systems, but it’s important that these systems stay free from government control. If these systems are sophisticated enough, and if we can find ways to fund them long‑term, I don’t think we’ll have to rely on laws and regulations to protect humanity from new technologies.

  Question: How much is possibly budgeted for this, please, to set up a permanent monitoring system, large scale?

  Dr. Epstein: To set it up so that it is credible and also large enough to keep these companies at bay — that’s a $50 million project. $50 million will allow us over an 18‑month period to set up a sophisticated system that is running in all 50 states.

  I am also envisioning a for‑profit spinoff that would have access to the data the nonprofit is collecting. The for‑profit will provide commercial services to campaigns, to law firms, candidates, researchers, all sorts. It will also support the nonprofit financially.

  With me or without me, whether I’m dead or alive, I do not see this project as optional. In other words, permanent monitoring systems must be set up to protect democracy and humanity from the threats that emerging technologies are posing.

  The numbers in the experiments are extraordinary. We recently started a new line of research on what we’re calling YME: the YouTube Manipulation Effect. 70% of the videos that people watch now on YouTube around the world are suggested by Google’s “up‑next” algorithm. Think of the power that a sequence of videos has on the mind of someone who is impressionable, who is vulnerable, or who is undecided. Think of how a sequence of videos — selected by Google — can affect young children.

  We are in the process now of studying and rigorously quantifying this effect. By the way, at this point in our 2020 election monitoring, we have captured more than 7,000 YouTube sequences. We weren’t just tracking search results this time.

  YouTube video sequences are also ephemeral, just like search results and search suggestions, which means they don’t leave a paper trail. But we have found ways not only to preserve them but also to study them.

  Question: Could you tell us the search engines you consider safe?

  Dr. Epstein: If you go to MyPrivacyTips.com, you will see what I use. My article is a bit out of date, but the search engine I use is called Swisscows.com. It’s a terrible name but a great search engine, and it doesn’t track you.

  I also maintain a special link — PryvateSearch.com — “pryvate” with a Y. That will always link to whichever search engine I think is the safest one to use. Right now, it links to Swisscows.

  There are many tools out there that don’t track you. They have a different business model, not the deceptive surveillance business model. Companies don’t need to spy on people to make money, obviously. Corporate spying is new, and it should be made illegal.

  If you have been using the Internet as I have for 20 years, Google has the equivalent of about three million pages of information about you. They even have information about your DNA if you were ever foolish enough to send off some of your saliva to 23andMe. 23andMe is Google.

  Tim Cook, CEO of Apple computers, has gone on record saying that he thinks that the surveillance business model is “creepy.” It is not a legitimate way of doing business. It is inherently deceptive. You think you are using a search engine. You think you are using an email service or a spreadsheet. That is not what they are. These are just surveillance platforms. The function that you think they serve, that is there just to fool you. It is to trick you into giving up a massive amount of personal data.

  *  *  *

  Dr. Robert Epstein is a senior research psychologist at the American Institute for Behavioral Research and Technology and the former editor‑in‑chief of “Psychology Today” magazine. A PhD of Harvard University, he has published 15 books on artificial intelligence, parenting, and other topics, as well as more than 300 scientific and popular articles.

  Tyler Durden
  Thu, 04/08/2021 – 23:00

• LA-Based Actor Charged With Running $227 Million Ponzi Scheme
  LA-Based Actor Charged With Running $227 Million Ponzi Scheme

  Zachary Horwitz, a little known LA-based actor, has been arrested by the FBI this week and was charged with running “an enormous ponzi scheme” wherein he represented that he had a successful film distribution company.

  The reality was that the actor – who has had some roles in small films – was cheating his investors out of $227 million and using most of the money to fund his own lifestyle, according to the NY Post. Horwitz also “used investor funds to pay in cash for a $5.7 million home in Los Angeles’s Beverlywood neighborhood,” the Wall Street Journal added.

  He falsely represented that 1inMM Capital LLC, his company, had licensing deals with names like Netflix and HBO. Those deals didn’t exist.

  

  He also told investors that his company had distributed 52 films in South America, Africa and Australia.

  Horwitz thanked his investors with expensive gifts, like Johnny Walker Blue Label scotch, the report says. “Mr. Horwitz told investors that he had acquired and distributed dozens of films including titles such as ‘Active Measures,’ ‘Lucia’s Grace’ and ‘Blood Quantum.’,” the Wall Street Journal reported. The Journal also reported that Horwitz “faked contracts” supposedly signed by HBO and Netflix executives.

  For a while, he was paying back old investors with new investor money. That strategy started to fizzle out by 2019, when he began defaulting on his investors. 

  He has defaulted on about 160 payments to his investors, totaling $227 million, according to the FBI. He has been charged with wire fraud and was released on $1 million bond at his arraignment this week. 

  How soon until his SPAC launch?

  Tyler Durden
  Thu, 04/08/2021 – 22:40

• Leon Black's "Surprise" Apollo Exit Came After Sexual Harassment Allegation From Former Model
  Leon Black’s “Surprise” Apollo Exit Came After Sexual Harassment Allegation From Former Model

  What a shock: a person who paid dead pedophile financier Jeffrey Epstein $158 million for his “financial advice” was allegedly sexually harassing a woman dozens of years younger, a woman whom Black now admits he had a “consensual” affair with.

  According to the NY Post, Leon Black’s unexpected and rushed departure from the helm of private equity giant Apollo Global last month came just days after several directors on the private-equity giant’s board learned of accusations of sexual harassment against him by a woman he claimed was trying to shake him down following a past “consensual affair.”

  While Black was already on track to step down as Apollo CEO by the end of July, on March 22 he unexpectedly announced that he would be leaving as CEO and Chairman, effective immediately, sparking a flood of speculation if an (underage female) skeleton was about to emerge from Black’s deep closet, even though Black apparently lied and cited his wife’s ailing health and his own health problems for the sudden change in plans.

  What Black forgot to mention at the time of his resignation is that in the days leading up to his resignation, at least four of Apollo’s 12 board members had become aware of a series of little-noticed but explosive tweets by Güzel Ganieva, a former model who claimed to have been “forced to sign an NDA in 2015” relating to allegations that Black “sexually harassed and abused ” her, Post sources revealed.

  

  Black did not deny that he had been involved sexually with Ganieva, but denied that he acted inappropriately toward her according to the Post

  “I foolishly had a consensual affair with Ms. Ganieva that ended more than seven years ago,” Black said in his statement. “Any allegation of harassment or any other inappropriate behavior towards her is completely fabricated.”

  Naturally, he also denied that her allegations influenced his decision to step away from the company faster than planned, so basically he is still claiming that he quit 4 months early because of concerns about his wife’s health… the same wife he has now confirmed he cheated on at least once. In January, Black had signaled he would stay on as chairman after stepping down as CEO on July 31.

  “This is entirely a personal matter; this matter has nothing to do with Apollo or my decision to step away from the firm” Black said, adding that he believes he was “extorted” by Ganieva because he had allegedly “made substantial monetary payments to her, based on her threats to go public concerning our relationship, in an attempt to spare my family from public embarrassment.”

  In other words, Black paid Epstein over $100 million for his “estate planning” advice and then paid a girl that was less than half his age to keep her mouth shut.

  A pattern is emerging here…

  The billionaire said he has referred the matter to “the criminal authorities” at the recommendation of his counsel and welcomes “a thorough investigation.” It remains unclear whether any of Black’s allegations against Ganieva would amount to criminal conduct and there is no indication that charges have been brought or are being considered. 

  As for Ganieva, she claims that in 2015, she signed a non-disclosure agreement aimed at keeping her quiet “under duress,” but did not elaborate on the terms or whether she received a monetary benefit.

  “Although I am a private person, in light of the recent media coverage, I think I have an obligation to make a statement regarding Apollo Global Management’s CEO and Chairman, Leon Black,” began the first of her March 17 tweets. “I was sexually harassed and abused by him for years.

  

  “It started in 2008 when I met with him to discuss work,” Ganieva continued. “While he understood my career aspirations, he could not understand me when I refused his sexual advances. I was bullied, manipulated, threatened, and coerced.”

  Ganieva declined to provide a copy of the NDA. A second NY Post source claiming knowledge of the matter, agreed that an NDA was signed but declined to elaborate. NDAs became a flashpoint in the #MeToo movement, with commentators arguing that they had become a tool that protected powerful men against allegations of abuse.

  “I am breaking my silence now because I do not want this type of predatory behavior to continue happening to other women,” Ganieva said in her third and final tweet, which as of Thursday was still posted on Twitter.

  Speaking to the Post, Ganieva alleged that Black’s abuse “was over a long period of time and it was tragic.” The former model, who emigrated to the US from Russia, said she met Black at a 2008 Manhattan party when she was 25 years old. He tried for some time to help her get a job, she said, but claimed he wanted favors in return.

  Ganieva declined to talk more specifically about her allegations, saying she was not yet comfortable sharing additional details about her claims.

  Here the plot thickens: among the directors who had learned of the tweets, the sources said, were Jay Clayton, the former chief of the US Securities and Exchange Commission, who was tapped as Apollo’s lead independent director in a January overhaul meant to improve Apollo’s corporate governance. Ironically, Clayton – who runs his internal probes the same way he ran the SEC – ultimately cleared Black of all wrongdoing.

  In January, an investigation for Apollo by the law firm Dechert (which most likely is a repeat client of Apollo and thus would never do anything to jeopardize such a lucrative relationship) found he had paid Epstein $158 million for tax advice and estate-planning services between 2013 and 2017. After the close of the investigation, Black said of his involvement with Epstein that he was only guilty of poor judgment in his dealings with Epstein, and that he had done nothing wrong.

  “[There was no] evidence that I had any involvement with Mr. Epstein’s egregious conduct or engaged in wrongdoing of any kind,” he said in a letter to Apollo investors.

  Four days later on March 26, Black said he would not run for re-election as chairman of the Museum of Modern Art when his term ends on June 30.

  Tyler Durden
  Thu, 04/08/2021 – 22:30

• Iran And Israel In The World's Most Dangerous Game Of 'Battleship'
  Iran And Israel In The World’s Most Dangerous Game Of ‘Battleship’

  Submitted by South Front,

  Israeli and Iranian ships in the Red Sea have been subject to regular attacks in recent weeks and months. Tel Aviv and Tehran blame each other but with little evidence to support either side’s claims.

  On April 6th, an Islamic Revolutionary Guard Corps (IRGC) cargo ship was struck in an unknown manner, in the area between the coasts of Yemen and Eritrea. Some sources claimed that it had been struck below the waterline, meaning that it had been hit by a magnetic mine.

  Others, however, claimed that it was subject to rocket fire. Either way, there was official confirmation that an IRGC ship by the name of Saviz had sustained damage. 

  Earlier, on March 25th, an Israeli-owned cargo ship – the “LORI” was struck by a missile as it was sailing from Tanzania to India. This was immediately blamed on Iran. No significant damage nor casualties were reported.

  On March 11th, during this tit-for-tat series of ship attacks, an explosion rocked an Iranian-owned ship named SHAHR E KORD off the shores of Syria. Tehran claimed that the incident was a “terrorist attack”.

  And even before that, on February 26, the Israeli-owned MV HELIOS RAY experienced a number of explosions while sailing in the Sea of Oman. Israel claimed that the vessel was attacked by Iranian forces.

  Both sides vehemently deny all accusations.

  Still, the Wall Street Journal cited US officials claiming that Israel has targeted at least a dozen vessels bound for Syria, mostly carrying Iranian oil, out of concern that petroleum profits are funding extremism in the Middle East.

  Indeed, Iran has repeatedly claimed to be a victim of just such a subversive Israeli policy, from 2019 onwards.

  In the most recent attack on April 6th, the New York Times cited an anonymous US official who said that the Israeli side had confirmed the attack on the IRGC cargo ship. The Pentagon, for its part, denied that US forces were involved at all.

  This is likely out of concern that any such incident could hurt the unofficial talks taking place in Vienna to salvage the Iran Nuclear Deal. Tel Aviv strongly opposes any normalization on that front, and has vowed to go to some lengths in order to impede it.

  Tel Aviv’s efforts are not only limited to the dangerous game of battleship. An alleged Israeli spy was arrested in Iran. Israel and the US were accused of subterfuge and attempting to undermine the upcoming June 18th elections.

  Tyler Durden
  Thu, 04/08/2021 – 22:20

• Big Tech, Banks, And Others Warn Texas Not To Drive Up Wind Power Costs With New Bill
  Big Tech, Banks, And Others Warn Texas Not To Drive Up Wind Power Costs With New Bill

  More than two-dozen companies which have invested heavily in renewable power have fired off an angry letter to Texas Governor Greg Abbott and other officials over a new bill working its way through the state legislature which would require power producers to bear the costs of services which help keep the electrical grid stable.

  

  The bill, which comes in response for the state’s February power outages which have been blamed in part on frozen wind turbines, would require the grid operator, the Electric Reliability Council of Texas (ERCOT) to “directly assign” ancillary service costs to solar and wind power generation.

  According to the letter from the Partnership for Renewable Energy Finance (PREF), the bill would “unfairly shift the cost of ancillary electric services exclusively onto renewable generators rather than all the beneficiaries.” PREF has countered the bill, saying that not only do all generators use ancillary services, but that the costs have remained flat over the last decade as wind and solar generation has grown by over 250%.

  Ancillary services are the levers that operators can pull to keep electricity flowing. Electrical grids are finely tuned pieces of infrastructure that must be kept in balance at all times. Uncontrolled surges in demand or generation can take down key pieces of equipment, like transformers, sending entire regions into blackout. Ancillary services cover a wide range of functions: operators might call on power plants to ramp up generation to counter an anticipated spike in demand, or they might rely on battery storage to stabilize within seconds threatening dips in frequency. They might also order some plants to shut down to prevent the grid from becoming overloaded. –ArsTechnica

  Signatories include Amazon, Google, Bank of America, Citi, BlackRock, Berkshire Hathaway Energy and others which have significant commitments in the renewable energy space as costs have dropped in recent years, making investments in things such as wind farms and solar plants to run power-hungry data centers, according to ArsTechnica.

  

  “It is important to note that these changes neither enhance electric reliability nor lower consumer costs,” the letter continues. “They appear to be premised on the assumption that renewable energy was disproportionately responsible for the state’s February power outages, a thesis that has been unequivocally discredited.”

  Most electrical grids are currently set up to distribute power from fossil fuel and nuclear plants, which in most cases can be ramped up and down at will. For wind and solar, utilities use weather forecasting to determine when supplies will be high and low. As more wind and solar power is added to the grid, operators have to more carefully prepare for these fluctuations. –ArsTechnica

  Texas currently uses wind and solar to generate around 28% of the state’s power – putting it just behind California’s 30%, however the Lone Star State will need to move quickly to beef up its battery storage, which currently stands at 225MW vs. California’s 2,000 MW anticipated to be in place by this summer.

  Tyler Durden
  Thu, 04/08/2021 – 22:00

• US Delivers Military Cargo To Ukraine As It Hypes Russian Military Movements
  US Delivers Military Cargo To Ukraine As It Hypes Russian Military Movements

  Authored by Dave DeCamp via AntiWar.com,

  While hyping the movement of Russian troops near the border with Ukraine, the US has delivered multiple military shipments to Kyiv.

  A Newsweek report that cited local media said that over the past two weeks, the US had made three military cargo deliveries to Ukraine. On March 25th, 350 tonnes of cargo was delivered by ship to the Black Sea port city of Odessa in southern Ukraine. Included in the delivery were 35 Humvees.

  

  “The U.S. has reportedly delivered three military cargoes to Ukraine in the last fortnight amid growing international demands for Russia to explain its troop build-up on the border with its neighbor,” Newsweek said.

  On April 2nd, a US Air Force C-17A Globemaster III military transport aircraft flew to Kyiv from a US base in Germany. On April 4th, another C-17A Globemaster III landed in the western city of Lviv. It’s not clear what the planes were carrying, but the C-17A Globemaster IIIs can transport up to 102 troops and 77 tons of cargo.

  Since the US-backed coup in Kyiv in 2014 that sparked the fighting in the eastern Donbas region, the US has provided Ukraine with more than $2 billion in military aid. The Pentagon recently announced a new $125 million package for Ukraine that includes armed patrol boats, and another $150 million is expected to be provided sometime this year.

  The news of the military deliveries come as tensions in the region are skyrocketing. Ukrainian President Volodymr Zelensky is calling for Ukraine to become a full-fledged member of NATO and is traveling to the conflict zone in Donbas on Thursday.

  Tyler Durden
  Thu, 04/08/2021 – 21:40

• As Olympics Loom, Tokyo Tightens Restrictions To Combat COVID Surge
  As Olympics Loom, Tokyo Tightens Restrictions To Combat COVID Surge

  Days after a surge in infections in Osaka forced the Olympic torch off the street, prompting Taro Kono, Japan’s minister in charge of vaccinations, to warn that Tokyo had also seen a surge in COVID cases driven by “a similar mutation,” it looks like the Japanese capital city, which is due to host the 2020 Olympics in three months, is officially dealing with an “emergency surge” of its own.

  

  Tokyo, which came out of a state of emergency on March 21, might be heading back into lockdown after Its governor, Yuriko Koike, told reporters Thursday that she had asked the government to allow her to issue binding orders under a new virus prevention law enacted in February. These penalties could include punishments for business owners who defy government measures, as well as compensation for those who comply.

  “It would be a matter of time before Tokyo faces a situation similar to Osaka,” Koike said.

  She said timing and details of the new measures, including shorter hours for restaurants and bars, will be decided later, possibly on Friday.

  Koike said she is alarmed by the rapid spread of the new variants, especially one initially detected in the UK. Tokyo reported 545 cases Thursday, the highest reading since late February.

  

  Kyodo News agency reported Wednesday that Japan is considering prioritizing Olympic athletes for vaccination by late June. Chief Cabinet Secretary Katsunobu Kato on Thursday denied that his government is discussing any details at the moment, but added that he is closely watching discussions among Olympic officials about how to guarantee athletes’ safety for the games, which are set to begin in three months.

  The latest surge in Japan, which notably weathered COVID with far fewer cases and deaths than other developed nations, started in western Japan, including Osaka, where the daily toll hit a record 905 earlier this week. Gov. Hirofumi Yoshimura asked that the Olympic torch relay scheduled for Tuesday and Wednesday be held at a park and not on the public road. He said more than 70% of hospital beds have been occupied, a threshold for a local medical alert.

  Reports of rising cases have impacted Japanese equity indexes, which declined slightly overnight.

  Tyler Durden
  Thu, 04/08/2021 – 21:20

• Meet The Censored: The U.S. Right To Know Foundation
  Meet The Censored: The U.S. Right To Know Foundation

  Authored by Matt Taibbi via TK News,

  In July of 2020, a nonprofit watchdog group called the U.S. Right to Know Foundation — which describes its mission as exposing “corporate wrongdoing and government failures that threaten the integrity of our food system, our environment, and our health” — began filing requests for public documents “in an effort to discover what is known about the origins of the novel coronavirus SARS-CoV-2,” which “causes the disease Covid-19.”

  

  Later in the year, the Foundation began publishing the results of those document requests. These included reports of unsafe conditions at biolabs in Fort Collins, Colorado, as well as emails connected with the EcoHealth Alliance, an American non-profit that has been supported in part by taxpayer-funded grants, and has collaborated with the Wuhan Institute of Virology.

  Those emails were not flattering to the EcoHealth Alliance. They showed that its leadership had a role in helping organize a letter in the prominent medical journal, The Lancet, denouncing as “conspiracy theory” the idea that Covid-19 might have had laboratory origins, but appeared reluctant to have its own involvement made public. In one email, EcoAlliance president Peter Daszak appeared to suggest distancing itself from the Lancet statement.

  “We’ll then put it out in a way that doesn’t link it back to our collaboration so we maximize an independent voice,” the EcoHealth president wrote.

  

  Despite the correspondence, Daszak did ultimately sign the letter publicly, and the emails are not proof of anything, other than that EcoAlliance had some P.R. concerns about seeming too eager to denounce theories of laboratory origin for Covid-19. Still, it’s clearly in the public interest.

  USRTK, whose reporting is mostly based on public document searches, is an organization that inspires strong opinions. They inhabit a corner of the media universe focusing on who pays for what kind of research, and to what result, around topics like food additives and Genetically Modified Organisms. The material can get very personal, and thanks to headlines like “The misleading and deceitful ways of Dr. Kevin Folta,” they’re not generally in the friend-making business.

  Moreover, agencies like USRTK are particularly vulnerable in the age of algorithmic moderation, as computers don’t easily distinguish between conspiracy theory and legitimate reporting that runs counter to present accepted narratives. Any organization that swims in those waters and isn’t attached to a big name now has to keep looking over its shoulder. If such an organization does end up suspended, deleted, or de-ranked, as USRTK later would be, it has to wonder: was it something we wrote?

  As a nonprofit, USRTK isn’t terribly click-conscious, and director Gary Ruskin wasn’t aware initially that its traffic went off a cliff in December, 2020, dropping nearly 60% overnight:

  

  The World Socialist Web Site had to conduct its own analysis to discover a similar drop in traffic after Google’s “Project Owl” update in early 2017. Other sites, like the Chris Hedges-led TruthDig, had to perform similar self-analysis to find similar drops.

  In other words, when an individual or outlet sees a significant drop or a ban, they’re rarely told what’s happening. An overnight, ongoing, 60% drop in traffic is not likely an organic phenomenon, but what is it? Ruskin only had a few data points to work with.

  “On December 2nd, things were good,” he says. “On December 4th, the bottom fell out.”

  Did anything happen in that time frame? As it turns out, yes. On December 3rd, Google announced a “core algorithm update.” Google changes its search algorithm daily, but makes what it calls “significant, broad changes” several times a year. The company has obviously dealt with the problem of people negatively impacted by these changes, having posted notices offering public advice to those affected.

  “Some sites may note drops,” the company wrote, in 2019. “We know those with sites that experience drops will be looking for a fix, and we want to ensure they don’t try to fix the wrong things. Moreover, there might not be anything to fix at all.”

  Translation: you may not be doing anything wrong. You may just be screwed. However, just in case you did want to try to unscrew yourself, the company offers the following Platonic advice: ask questions. Self-interrogate! A sample (emphasis mine):

  • Does the content provide original information, reporting, research or analysis?

  • If the content draws on other sources, does it avoid simply copying or rewriting those sources and instead provide substantial additional value and originality?

  • Does the headline and/or page title avoid being exaggerating or shocking in nature?

  • Would you expect to see this content in or referenced by a printed magazine, encyclopedia or book?

  • Is this content written by an expert or enthusiast who demonstrably knows the topic well?

  • Does the content have an excessive amount of ads that distract from or interfere with the main content?

  • Does the content seem to be serving the genuine interests of visitors to the site or does it seem to exist solely by someone attempting to guess what might rank well in search engines?

  U.S. Right to Know is basically ad-free. It doesn’t aggregate, but instead publishes original reporting based mainly on public documents. It’s the opposite of a click-chasing SEO-oriented site that is “attempting to guess what might rank well.” It doesn’t have shocking or sensational headlines — in fact, it barely had an engagement strategy. Its work is referenced by peer-reviewed medical journals and established outlets like the New York Times.

  Once the December drop was detected, Ruskin reached out to more computer-savvy folks to ask how they could fix whatever they were doing wrong. Those experts in SEO optimization could only offer a little advice.

  “We’re talking to some search engine people who offered suggestions,” Ruskin says. “They tell us things like, ‘Oh, that’ll affect a tenth of a percent of your problem, but we don’t understand the other 99.9% of it.’”

  A consistent detail in these stories is that the affected outlet doesn’t know whom to call to ask for help. Nearly everyone ends up going through their contact lists in search of someone who might know someone at a company like Google.

  Ruskin did get a name to contact at the firm, and wrote a note that detailed his credentials and showed the dramatic drop in traffic. The Google staffer wrote back with a standard-issue reply:

  Our December 2020 core update, like any core update, does not involve particular sites. We explain a bit more about core updates in our post about them: “There’s nothing in a core update that targets specific pages or sites…”

  The staffer went on to say that she was happy to pass complaints on, but that not only would nothing be done right away, nothing could be done for any individual site, even if they wanted to try. Note the Kafka-style “nor could we” phrase here:

  I’ve passed along your feedback to our teams for general review. This will not result in any immediate change, nor could we make such a change, given that core updates don’t involve the ranking of particular sites. But our teams may use this feedback to understand how to make general improvements in our ranking systems overall.

  The Freedom of the Press Foundation, which had a similar issue with its own database of Donald Trump tweets, picked up on USRTK’s story in a piece called, “When Algorithms Come for Journalists” that also highlighted stories profiled in this space, like the one involving Jordan Chariton’s Status Coup. In describing its own problems with its Trump tweets data, the site wrote:

  Still, we were lucky. Some of our colleagues know employees at Google… After many people made private inquiries on our behalf, the document was restored without explanation a day after we discovered it was down. Obviously, that course of action is not available to most. We still have no idea why the Trump tweet database was taken down.

  Not long ago, outlets like USRTK mainly had to worry about PR campaigns. The Freedom of the Press Foundation noted, for instance, that the organization had been one subject of a much-publicized effort by Monsanto to discredit its work, setting up an online “intelligence center” that produced weekly reports on the organization’s activity.

  Or: has the site crossed an unknown line with its Covid-19 reports, which include lines like, “To date, there is not sufficient evidence to definitively reject either zoonotic origin or lab-origin hypotheses”? Language like that seemed to be okay when The Telegraph ran headlines like “Scientists to examine possibility Covid leaked from lab as part of investigation into virus origins.” But is it less okay when a different site says something similar? Is there something in the algorithm that triggers such reactions? Who knows? Companies like Google only speak in riddle-like generalities when queried about things like this, sounding like Confucian sages, or Alan Greenspan.

  I spoke to Ruskin about his organization’s experience:

  TK: What happened?

  Ruskin: We don’t know. There was a big core update in December of 2020 that the timing corresponds exactly with this, but that doesn’t prove that it was it.

  TK: Would a core update be responsible for that big of a drop in traffic?

  Ruskin: You’re asking the wrong guy. I mean, there are a couple of articles that explain in very opaque language what it did, but to my understanding, it doesn’t say anything that is pertinent to us. There was nothing that jumped out at me. That’s part of what’s Kafkaesque about this whole process: there have been no explanations, no one to appeal to, to talk with.

  TK: Will this affect your funding, your ability to keep working?

  Ruskin: Certainly it’s easy to imagine how it could, but we do our work so that it gets read and so that the world understands what we’re trying to explain about public health. And now so many fewer people read our stuff, can find our stuff.

  Our organization, we spent six years of blood, sweat, and tears to build this website, which up until December, lots of people looked at. And now it’s not so many people look at it and nobody told us why. That’s one of the concerning things about the whole story. In some ways, Google has the power to decide what we all read, and that’s more power than one corporation should hold.

  TK: Is this censorship, or a glitch? Has this been a learning experience?

  Ruskin: I really strongly believe in the First Amendment and have been concerned for probably during that entire period about when the censors come for someone, they could easily come for you tomorrow. So that, I think, is the lesson of history. But I can’t say that this is censorship, because I don’t have the faintest idea. That’s another part of what’s so frustrating.

  It’s so hard to believe that this has happened, and there’s no reason for it that we can uncover. It happened all of a sudden, we’re wondering if it will go away all of a sudden. So maybe that’s wishful thinking. We don’t know what to do. We’re talking to some search engine people… We’re doing a little of that to try to see if there’s anything sensible to be understood and done. We’re making a few better URLs than the ones we had, which were crummy. But nobody thinks that that’s the reason for this.

  TK: Is that the hardest thing about these situations? That there’s no procedure for fixing something like this?

  Ruskin: Absolutely. It’s straight out of Kafka. What door do I knock on?

  Tyler Durden
  Thu, 04/08/2021 – 21:00

• Bank Of America The Latest Investment Bank To Bump Pay For Its Junior Bankers
  Bank Of America The Latest Investment Bank To Bump Pay For Its Junior Bankers

  Bank of America is joining the list of investment banks taking drastic measures to try and appease their junior bankers by bumping their pay up. The move comes after junior bankers at Goldman Sachs spoke out about long hours worked during the SPAC boom, prompting banks to take action to retain their junior level “talent”. 

  Bank of America is going to be giving its junior bankers a boost in pay starting May 1, Bloomberg reported on Thursday. 

  The bank wrote in a memo to its junior employees on Thursday: “Given our ongoing remote work environment — coupled with the recent pace of market activity as well as client requests and transactions — your contributions and commitment have become more important than ever to the continuous success of our deal teams and client relationships. Your efforts and well-being are critical to our success.”

  John Yiannacopoulos, a spokesman for the bank, said the pay bumps would be “meaningful”, according to the report. The memo also noted that Senior managers will start having meetings with about 25 junior bankers at a time to discuss “how to continue to make things easier and more efficient, provide targeted resources and support, ensure your health and wellness, and stay connected.”

  

  Recall, we wrote just days ago about how competitive retaining talent at places like investment banks and law firms has become. The world’s top professional service firms and banks are showering their employees with luxury gifts and bonuses to try and prevent them from moving on to other opportunities in what is becoming a fierce section of the job market for those qualified. 

  Law firms are getting in on the action, too. Financial Times reported this week that Davis Polk & Wardwell and Simpson Thacher & Bartlett, two elite law firms, have given one time bonuses between $12,000 and $64,000 to their employees for their “hard work during the pandemic”. This is on top of a Covid bonus employees were already given. Latham & Watkins and Goodwin Procter have also followed suit. Goodwin’s employees will be paid in two tranches, one in July and another in October.

  Nathan Peart, managing director of associate recruiting at Major, Lindsey & Africa, said: “It’s no secret that associates have been working huge numbers of hours and are approaching burnout. Firms are taking action and money is a starting point.”

  Investment bank Jefferies has given its employees a choice of a Peloton, a Mirror or various Apple products. David Polk offered its employees wine packages, gift cards and shopping sprees. Credit Suisse – who has larger, Archegos-sized problems on its hands right now – said it would pay its junior staff $20,000 in bonuses.

  Our advice to those junior bankers, given the $5 billion Credit Suisse might be facing in Archegos losses? Make sure those checks clear immediately..

  Tyler Durden
  Thu, 04/08/2021 – 20:40

• Hunter Biden Incident Shows That Gun Laws Are For The Little People
  Hunter Biden Incident Shows That Gun Laws Are For The Little People

  Via NRA-ILA,

  There is a central hypocrisy at the heart of the gun control effort. High-profile gun control-supporting politicians, the Hollywood elite, and billionaire tycoons, will advocate to strip ordinary Americans of their right to defend themselves and their family, all the while enjoying the security that armed men with guns provide. As Hunter Biden’s 2018 firearm incident shows, this hypocrisy extends even to incidents where a high-profile individual has taken the step of procuring their own firearm. The message from these elites could not be clearer: Gun laws are only for the little people.

  For those who have yet to learn of Hunter’s escapades in firearm ownership, according to a report from Politico, the troubled son of the president purchased a .38-caliber revolver from a Delaware Federal Firearms Licensee (FFL) on October 12, 2018. In order to acquire the gun, Hunter filled out the required BATFE Form 4473. On October 23, Hallie Biden, widow to Joe Biden’s son Beau and then-companion to Hunter, searched the ne’er-do-well’s truck, which was parked at her home in Wilmington, Del., and found the handgun. Apparently fearing for Hunter’s safety, Hallie wrapped the revolver in a shopping bag and threw it into a trash receptacle outside nearby gourmet grocery store Janssen’s Market – which is located across the street from the campus of Alexis I. du Pont High School.

  Later that day, after Hunter told Hallie to retrieve the firearm, Hallie returned to where she had disposed of the gun but could not find it. At this point law enforcement was notified of the missing firearm, prompting an investigation that reportedly involved the Delaware State Police, the United States Secret Service, and the Federal Bureau of Investigation.

  As it happens, between Hallie’s disposal of the firearm and her return to the market, a man who routinely searches the store’s trash receptacles for recyclables recovered the firearm. This man returned the revolver a few days after finding it.

  

  According to Politico, prior to the firearm’s return a pair of Secret Service agents visited the FFL where Hunter purchased the firearm in an attempt to obtain the corresponding Form 4473.

  The Politico report noted,

  Secret Service agents approached the owner of the store where Hunter bought the gun and asked to take the paperwork involving the sale, according to two people, one of whom has firsthand knowledge of the episode and the other was briefed by a Secret Service agent after the fact.

  The gun store owner refused to supply the paperwork, suspecting that the Secret Service officers wanted to hide Hunter’s ownership of the missing gun in case it were to be involved in a crime, the two people said. The owner, Ron Palmieri, later turned over the papers to the Bureau of Alcohol, Tobacco, Firearms, and Explosives, which oversees federal gun laws.

  As has been made clear in a previous item regarding this incident, NRA does not allege that Hunter or Hallie engaged in any criminal conduct. However, Hunter and Hallie’s conduct give rise to several legal questions.

  Hunter was discharged from the U.S. Navy Reserve in 2014 after he tested positive for cocaine. Further, at various times, Hunter has been a notorious and admitted drug user. Hunter’s lengthy battle with drugs has been chronicled by himself and the Biden family in numerous interviews and a forthcoming memoir titled, “Beautiful Things.”

   An April 1, 2020 USA Today piece on Hunter’s memoir contained the following summary of some of its contents,

  In the spring of 2018, he used his “superpower – finding crack anytime, anywhere” – in Los Angeles. At one point, a dealer pointed a gun at his head before he realized Biden was looking for drugs.

  He later learned how to cook drugs and spent a lot of time with thieves, addicts and con artists. “I never slept. There was no clock. Day bled into night and night into day,” he writes.

  The situation grew out of control. “I was smoking crack every 15 minutes,” he writes.

  Biden returned to the East Coast in the fall of 2018, again wanting to get better, though that didn’t happen.

  Eventually, his family tried to stage an intervention. “I don’t know what else to do,” Joe Biden told him. “I’m so scared. Tell me what to do.” His son replied: “Not (expletive) this.” 

  It wasn’t until he met now-wife Melissa Cohen in Los Angeles – whom he married after only a week of knowing – that he got sober again. They told each other they loved each other on their first date; she had the same eyes as Beau, he writes. She championed his sobriety and dumped out his crack.

  It is illegal for a person “who is an unlawful user of or addicted to any controlled substance” to possess a firearm. Possession of a firearm by a prohibited person is punishable by up to 10 years imprisonment.

  In order to purchase a firearm from an FFL, a buyer must fill out a Form 4473. The form asks, “Are you an unlawful user of, or addicted to, marijuana or any depressant, stimulant, narcotic drug, or any other controlled substance?” Hunter answered “no” to this question.

  Lying on a form 4473 is two separate crimes. It is a crime when a person “knowingly makes any false statement or representation with respect to the information required by this chapter to be kept in the records of a person licensed under this chapter,” such as the Form 4473. A violation of this provision is punishable by up to 5 years imprisonment. It is also a crime for a person to “make any false or fictitious oral or written statement” to a dealer “with respect to any fact material to the lawfulness of the sale.” A violation of this provision is punishable by up to 10 years imprisonment.

  Janssen’s Market is located less than 250 yards from the campus of Alexis I. du Pont High School.

  As a U.S. senator, Joe Biden was a key proponent of the federal Gun-Free School Zones Act of 1990. The initial version of this unconstitutional and unwise policy was struck down by the U.S. Supreme Court in U.S. v. Lopez. A later, similarly constitutionally dubious, version remains on the books.

  18 USC 922(q)(2)(A) provides,

  (A) It shall be unlawful for any individual knowingly to possess a firearm that has moved in or that otherwise affects interstate or foreign commerce at a place that the individual knows, or has reasonable cause to believe, is a school zone.

   18 USC 921 (a)(25) defines school zone as, 

              (25) The term “school zone” means—

  (A) in, or on the grounds of, a public, parochial or private school; or

  (B) within a distance of 1,000 feet from the grounds of a public, parochial or private school. 

  18 USC 922(q)(2)(B) does provide for some exemption for possession of a firearm, 

              (i) on private property not part of school grounds;

  (ii) if the individual possessing the firearm is licensed to do so by the State in which the school zone is located or a political subdivision of the State, and the law of the State or political subdivision requires that, before an individual obtains such a license, the law enforcement authorities of the State or political subdivision verify that the individual is qualified under law to receive the license;

  (iii) that is—

  (I) not loaded; and

  (II) in a locked container, or a locked firearms rack that is on a motor vehicle;

  (iv) by an individual for use in a program approved by a school in the school zone;

  (v) by an individual in accordance with a contract entered into between a school in the school zone and the individual or an employer of the individual;

  (vi) by a law enforcement officer acting in his or her official capacity; or

  (vii) that is unloaded and is possessed by an individual while traversing school premises for the purpose of gaining access to public or private lands open to hunting, if the entry on school premises is authorized by school authorities. 

  Maybe Hallie had a Delaware License to Carry a Concealed Deadly Weapon or placed the firearm in a locked container while she brought the gun to the store. However, a reasonable person might wonder whether an individual who would throw a handgun wrapped in a shopping bag away in a publicly accessible trash receptacle, would comport their conduct within these narrow exceptions while traversing the public roadways to Janssen’s Market. 

  If Hunter and Hallie are guilty of any illegal conduct, it’s difficult to fault the pair for ignoring the potential legal ramifications of their actions. After all, these gun control measures were not designed to be followed by well-connected elites like them. 

  

  This point is underscored by the Secret Service’s alleged involvement in the case. Rather than having their conduct scrutinized by federal law enforcement, if the Politico report and Hunter’s contemporaneous text messages are to be believed, the federal government tried to cover up for the prominent pair.

  As well-protected politicians and their establishment allies push for new gun controls, ordinary law-abiding Americans should know that these hypocrites have no intention of parting with their own elaborate security measures or being otherwise inconvenienced by the burdens they foist upon the rest of us.

  Tyler Durden
  Thu, 04/08/2021 – 20:20

• Iran To "Without A Doubt" Respond Against US & Israel For Red Sea Mine Attack 
  Iran To “Without A Doubt” Respond Against US & Israel For Red Sea Mine Attack 

  Iran said on Thursday that it will “without a doubt” respond to the widely reported attack on an Iranian military vessel in the Red Sea that occurred Tuesday. A spy vessel later identified as the Saviz was damaged in the incident, with the The New York Times alleging that Israel was behind a naval mine attack.

  Anonymous US officials had told Reuters the US did not conduct the attack; however, in Thursday’s statement a top Iranian general indicated that Tehran believes both Israel and the United States were behind the Red Sea mine attack. This after Israel appears to have owned up to it according to a US official’s statement to the Times.

  “We will respond without any doubt to the attack on our ship Saviz in the Red Sea once we identify those involved,” Iran’s military spokesman Brig. Gen. Abolfazl Shekarchi said to Sputnik Arabic. 

  

  “The US is undoubtedly involved in all attempts to undermine and harm Iran,” Shekarchi added. 

  Iranian state media has reported that there were no casualties and only “minor damage” caused by limpet mines attached to the hull. Iranian sources are also calling the Saviz a “civilian ship”. But the AP has reported it was damaged below it’s waterline, suggesting much more severe damage.

  An Iranian Foreign Ministry statement said as much: “The Saviz civilian ship was stationed in the Red Sea region and the Gulf of Aden to establish maritime security along the shipping lanes and to counter piracy,” a spokesman said. “This ship practically acted as a logistics station (technical support and logistics) of Iran in the Red Sea, and therefore the specifications and mission of this ship had previously been officially announced.”

  The Jerusalem Post reports that “While officially listed as a merchant ship, the Saviz was likely a covert IRGC forward base,” based on Israeli defense and intelligence officials. 

  Latest on Saviz from ⁦@jongambrellAP⁩: “While the previous attacks on shipping targeted only commercial vessels and caused cosmetic damage above the waves, Tuesday’s blast apparently blew through the hull of the Saviz below its waterline.” https://t.co/zX4NTHZSlw

  — Henry Rome (@hrome2) April 8, 2021

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  As we’ve noted before, it appears Israel is getting increasingly brazen in its covert sabotage campaign targeting Iran and its operations abroad – especially as the Biden White House seeks a way forward with the Iran nuclear deal (JCPOA).

  Netanyahu appears willing now to take major risks in conducting destabilizing actions ultimately aimed at blowing up the possibility of Washington rejoining the JCPOA.

  Tyler Durden
  Thu, 04/08/2021 – 20:00

• Major League Baseball's Attack On Georgia Proves America Is Cancelling Itself Into Oblivion
  Major League Baseball’s Attack On Georgia Proves America Is Cancelling Itself Into Oblivion

  Authored by Robert Bridge via The Strategic Culture Foundation,

  The so-called ‘cancel culture,’ should it continue on its iron track, will spell the doom of US democracy only to be replaced by something altogether un-American.

  

  Baseball is America’s quintessential sport that speaks to the heart of the nation’s very existence. Yet it appears that not even the great game can protect itself from the cancel culture ideologues.

  Amid political haggling between Democrats and Republicans over Georgia passing new election reform legislation, which the left says disenfranchises minorities, the executives at Major League Baseball (MLB) should have done what they been doing for over a century: keep the dirty world of politics far away from America’s national pastime.

  At the very least, this would have been the best business decision, especially when it is considered that most Americans view “cancel culture” as an existential threat to the country. Unfortunately, corporate decisions today are no longer guided by the capitalistic profit motive, but rather by the progressive virtue signaling motive. Paradoxically, leftist ideology has supplanted capitalist ideology in America. Consequently, MLB made the lamentable decision to deprive Atlanta from hosting this year’s All-Star Game.

  “Over the last week, we have engaged in thoughtful conversations with Clubs, former and current players, the Players Association, and The Players Alliance, among others, to listen to their views,” MLB commissioner Rob Manfred said in a statement, aired by ESPN. “I have decided that the best way to demonstrate our values as a sport is by relocating this year’s All-Star Game and MLB Draft.”

  “Major League Baseball fundamentally supports voting rights for all Americans and opposes restrictions to the ballot box,” the statement continued.

  Regrettably, Mr. Manfred is seriously misguided. The best way for the MLB to “demonstrate our values as a sport” is by disallowing outside forces from interfering with an event that should be totally shielded from the shifting political winds. After all, one of the main reasons that fans are attracted to sport in the first place is it allows them to escape from the trials and tribulations of daily living. Their obvious displeasure with mixing politics and sports is visible by declining TV viewership ever since the Cultural Marxists crashed the gates.

  Georgia’s laws don’t comport with @MLB “values” but China’s do?https://t.co/354BUflBd3

  — Mike Pompeo (@mikepompeo) April 3, 2021

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  Obviously, Manfred doesn’t know or simply doesn’t care about maintaining fan loyalty in a period of cultural madness that has descended on America like a Kool-Aid drinking religious cult. If he did, he would have taken a cue from the viewership statistics from Super Bowl LV between the Patriots and Kansas City Chiefs. That match saw the worst ratings for the big game since the 1969 clash between the then-Baltimore Colts and New York Jets in Super Bowl III.

  Moreover, had he performed some due diligence, instead of taking his talking points from leftist fanatics, Manfred would have realized that Georgia’s Election Integrity Act of 2021 has nothing in common with the segregationist Jim Crow laws, as the mainstream media has recklessly and dangerously suggested.

  The state of New York, for example, a major Democratic powerhouse, provides voters just 10 days of early voting; Georgia, by comparison, provides a minimum of 17 days. At the same time, New York voters must provide a reason for voting absentee, whereas in Georgia no formal excuse is demanded. Approaching voters waiting in line to vote, perhaps to pass out water or food, will also be considered a criminal act. Finally, the decision to require voters to provide an ID to receive an absentee ballot cannot be blamed on ‘racism,’ as the left screams at every opportunity, but rather sound voting practice.

  It is slanderous to say that people who care about honest and fair elections are racist. @MLB Major League Baseball and anyone else pushing that lie should be ashamed of themselves. At a time baseball is struggling to keep its fans, much less get new fans, this is disgusting.

  — Mollie (@MZHemingway) April 2, 2021

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  Past polls have found that Americans from across the political spectrum favor ID legislation to protect the integrity of elections.

  Yet with pressure bearing down on the MLB executives from even the White House, as well as the newly empowered and financially supercharged social justice movements, like Black Lives Matter, it is more understandable albeit no less conscionable how Manfred could have succumbed to the wild rhetoric.

  “This is Jim Crow on steroids, what they’re doing in Georgia,” US President Joe Biden told ESPN.

  And it was not just the MLB that broke under pressure from the left.

  Dozens of big name corporations, including Coca-Cola, Delta Airlines and Cisco, expressed their discontent with the new election legislation signed into law by Georgian Gov. Brian Kemp, who many Republicans say did not do enough to challenge the presidential election results over accusations of voter fraud and irregularities, many of which were never adequately explained.

  The full court press against the state of Georgia does not stop at the MLB. The National Black Justice Coalition is asking PGA Tour players not to compete in the Peach State until the voting law is repealed.

  “The PGA Tour and Masters Tournament have both made commitments to help diversify golf and address racial inequities in this country — and we expect them to not only speak out against Georgia’s new racist voter suppression law, but to also take action,” said David J. Johns, executive director of the organization.

  It is not difficult to see how many athletes, concerned about their public image from being (wrongly) branded “racist” or worse, will submit to the pressure, despite the fact that Georgia’s legislation has absolutely no connection to “systemic racism,” the canard of the progressives ever since George Floyd died under the knee of a white police officer last summer. For many Republicans, the only way to respond to this corporate and borderline fascist foray into politics is by hitting them in the wallet.

  Former President Donald Trump called for conservatives to boycott the companies that threw their support behind the MLB decision.

  “For years the Radical Left Democrats have played dirty by boycotting products when anything from that company is done or stated in any way that offends them. Now they are going big time with the WOKE CANCEL CULTURE and our sacred elections,” Trump said in a statement on April 3rd released by Save America PAC.

  “It is finally time for Republicans and Conservatives to fight back— we have more people than they do— by far,” Trump continued. “We can play a better game than them!”

  What is disturbing and even frightening about this latest development on the cancel culture front is that it exposes the yawning abyss that now separates millions of Americans from each other as civil war memories come to mind. Across this increasingly belligerent battle line everyone from corporations to average consumers are taking their battle stations, cancelling events here, and boycotting in response there.

  Although it could be argued that this is merely evidence of the First Amendment in action, the opposing sides are too disparate for there to ever exist lasting peace. The left has been usurped by the radical progressives, while the right has latched on ever tighter to its conservative principles. The middle ground has been washed away and now exists as a perilous no-man’s land littered with landmines and other incendiaries.

  Quite simply, the specter of a single political party and its corporate underlings strong-arming governments is a phenomenon one would expect to see in Mussolini’s Italy of 1925, not Joe Biden’s American presidency of 2021. This so-called ‘cancel culture,’ should it continue on its iron track, will spell the doom of US democracy only to be replaced by something altogether un-American.

  Tyler Durden
  Thu, 04/08/2021 – 19:40

• Biden Says Rejoining 'Open Skies' Would Send "Wrong Message" To Russia After Bashing Trump For Exiting It
  Biden Says Rejoining ‘Open Skies’ Would Send “Wrong Message” To Russia After Bashing Trump For Exiting It

  Remember when then candidate Joe Biden slammed Trump for withdrawing the US from the Open Skies Treaty with Russia? He began a May 2020 statement on the issue as follows:

  In announcing the intent to withdraw from the Open Skies Treaty, President Trump has doubled down on his short-sighted policy of going it alone and abandoning American leadership.

  Biden at the time further harangued Trump for a move that will “exacerbate growing tensions between the West and Russia, and increase the risks of miscalculation and conflict” in a statement heavily focused on attacking Trump’s “America first” doctrine.

  

  And now fast-forward to President Biden, who has said the US must stay out of the Open Skies Treaty as rejoining the pact would “send the wrong message” to Russia. Defense News has just obtained a Biden administration memo notifying allies:

  The United States appears unlikely to rejoin the 34-nation Open Skies Treaty over its concerns about Russian noncompliance, with the Biden administration telling international partners in a recent diplomatic memo obtained by Defense News that doing so would send the “wrong message” to Russia.

  The note, sent days before the U.S. Air Force confirmed plans to retire the aging aircraft used to fulfill the mutual surveillance pact, may signal the end of hopes that the U.S. will rejoin the agreement.

  Interestingly it comes after the Biden White House in February agreed to extend the New START nuclear arms control treaty with Russia. 

  Statement by Vice President Joe Biden on President Trump’s Decision to Withdraw from the Open Skies Treaty https://t.co/25Ao0PZnrL

  — K.Street1111 SOS America (@kstreet111) May 23, 2020

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  Initiated in 1992 and then ratified in 2002, Open Skies allowed the 35 member states that eventually joined it to conduct short-notice, unarmed observation flights to monitor other countries’ military operations in mutual verification of arms-control agreements. 

  The treaty even allowed Russian recon flights over tightly restricted Washington D.C. airspace — in past years Russian Tupolev Tu-154s have even flown at low altitude over such sensitive sites as Andrews Air Force Base in Maryland, the US Capitol, the Pentagon, and CIA headquarters in Langley. 

  

  The Trump administration had said as part of its rationale for exiting Open Skies last year that the US “gets nothing out of it” while it potentially exposes national security secrets to broad Russian surveillance. It had formally ended in November of 2020.

  Apparently with the campaign and election long behind, President Biden now openly agrees with Trump’s position. 

  Tyler Durden
  Thu, 04/08/2021 – 19:20

• Florida Gov DeSantis Sues CDC To Force Reopening Of Cruise Industry
  Florida Gov DeSantis Sues CDC To Force Reopening Of Cruise Industry

  A few weeks ago, cruise stocks slumped after the CDC extended a moratorium on cruises to November, even as packed flights with barely-compliant travelers wearing masks on their chins while eating and drinking have been the norm for months.

  The industry is already facing the obstacle of re-selling the public on taking cruises after myriad outbreaks aboard cruises run by Royal Caribbean were blamed for facilitating the early spread of the virus. The incidents also drew attention to the fact that cruises are essentially floating petri dishes (although sales have rebounded more quickly than some might have anticipated).

  

  In what he characterized as an effort to aid the thousands of Floridians employed by the cruise industry, Fla. Gov Ron DeSantis announced Thursday that the state will file a lawsuit against the CDC, demanding cruise ships be allowed to resume sailing immediately.

  “On behalf of the tens of thousands of Floridians whose livelihoods depends on the viability of an open cruise industry, today Florida’s fighting back,” he announced in a press conference on Thursday. “We don’t believe the federal government has the right to mothball a major industry for over a year, based on very little evidence and very little data.”

  He tweeted that federal law doesn’t give the CDC the power to shut down an industry indefinitely.

  We must fight to get our cruise liners and their employees back to work and safely sailing again. To be clear, no federal law authorizes the @CDCgov to indefinitely shutdown an entire industry.

  — Ron DeSantis (@GovRonDeSantis) April 8, 2021

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  This lawsuit is necessary to protect Floridians from the federal government’s overreach and resulting economic harm to our state. https://t.co/I0uLeBzZqZ

  — Ron DeSantis (@GovRonDeSantis) April 8, 2021

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  In comments to the press reported by CNBC, DeSantis called the CDC’s decision to delay the opening of the US cruise industry “irrational”, saying he believes that this lawsuit will have a “good chance for success.”

  Royal Caribbean announced Thursday it would be extending the suspension of some of its trips that depart from US ports. Royal Caribbean International, Celebrity Cruises and Silversea Cruises trips will be suspended until June 30, while trips leaving from new home ports in other areas of the world are still operating on schedule.

  Last week, The governor signed an executive order on Friday forbidding so-called vaccine passports, which will also apply to the cruise industry, saying that private and public businesses are not required to show proof of vaccination.

  Tyler Durden
  Thu, 04/08/2021 – 19:00

• Treasury 20Y Bonds Surge, S&P Futures Jump After Fed Hints At More Bond Buying
  Treasury 20Y Bonds Surge, S&P Futures Jump After Fed Hints At More Bond Buying

  It had been a relatively quiet day for Treasurys which were bought for much of the day, when right at the close the 20Y TSY yield hit an air pocket and dropped by 3bps in minutes. Perplexed traders looked for the reason for the move, and eventually found it in the prepared comments of NY Fed Executive Vice President Lori Logan released at 4pm, which sparked speculation the central bank will increase purchases of the 20Y tenor.

  In a speech discussing the role of Primary Dealers in “The New Normal“, Logan said that the Treasury’s introduction of the 20-year Treasury bond in May of last year had “increased amounts outstanding around the 20-year maturity point.” She also said that since “the pace of increase in TIPS issuance has been slower relative to nominal coupon securities” and with “net issuance expected to remain high in the near term, we anticipate that the composition of outstanding supply will continue to evolve.”

  But it was the punchline from Logan that led to the buying stampede:

  “as a result, we plan to make minor technical adjustments to our purchase sectors and increase the frequency at which we update purchase allocations to remain roughly proportional to the outstanding supply of nominal coupon securities and TIPS. We expect to announce these as a part of a normal purchase calendar release in coming months.”

  As Bloomberg first observed, the market reacted as if this means Fed purchases of 20-year bonds will rise, with the 20-year TSY sliding 3bps and the now richer by 6.8bp on the day, predictably outperforming rest of the curve, as traders positioned to frontrun the Fed’s purchases (we point this out just in case there are still naive traders who believe the Fed’s open market purchases have no impact on yields). 

  

  But it wasn’t just the 20Y that spiked: so did futures. As shown in the chart below, spoos ramped as much as 10 points right around the close as Logan’s speech made the trading desks, pushing the Emini to a new all time high of 4,098.5, leaving even commentators at Goldman Sachs perplexed by the move, especially since it took place amid a $1 billion market for sale imbalance: here is what Goldman’s John Flood sent out after the close: “S&P +42bps closing @ 4097 (ATH) despite 4th consecutive MOC sell imbal (today was -$1b).“

  In a time when the Fed’s shaky credibility is being questioned from all sides, It’s good to see that even a mere hint at more bond buying by the Fed can still send stocks surging to new all time highs.

  Tyler Durden
  Thu, 04/08/2021 – 18:55

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• Mercedes Q1 Sales Rise By 22% After Demand Surges From China, North America
  Mercedes Q1 Sales Rise By 22% After Demand Surges From China, North America

  Mercedes looks like it is joining the cabal of automakers who have smashed expectations for Q1, as the auto industry posts its first YOY comps that are helped along by last year’s global Covid lockdown. 

  Sales were up 22% in Q1 thanks to not only easy comps, but also record demand out of China. Globally, Mercedes-Benz sold 581,270 cars and saw its China sales figures rise by 60%. China is the biggest market for the brand, according to Bloomberg. 

  The manufacturer also saw a slight tick up in Europe, where sales rose 1.8% to a total of 192,302 cars. The company’s global share of sales of plug in hybrids and full EVs was more than 25% in Europe. That number falls to about 10% worldwide. 

  The company also saw 20,000 orders for its compact EQA model and saw commercial van sales rise 18% to 76,328 vehicles.

  Finally, Mercedes saw a 12.5% pop in sales in passenger vehicles in North America, with sales figures rising to 88,318 vehicles sold. 

  

  The pop in North America shouldn’t be too much of a surprise. Recall, we wrote just days ago that most legacy automakers in the U.S. were posting fantastic Q1 comps. 

  What’s selling? “Everything,” said one Ford dealer.

  GM said its U.S. retail deliveries were up 19% in Q1, the company’s first number reported against pandemic-impacted comps. The automaker sold 642,250 vehicles in the U.S. in the first quarter of 2021. Toyota sold 603,066 vehicles in the quarter, a 22% rise from Q1 2020, according to IBD. Even more pronounced was the company’s numbers for March, which were up 87% against the first month of coronavirus lockdowns in 2020.

  Volkswagen also posted blowout comps, as sales rose 21% in Q1 to 90,853 vehicles sold. The company was helped along by robust SUV demand while also selling 474 units of its new ID.4, which only went on sale in the U.S. in late March. 

  

  Ford saw its sales rise 1% for the quarter, but sales were up 5% for trucks and 14% for SUVs. Even more notable, however, is the fact that Ford sold 6,613 Mustang Mach-E electric crossovers, up from just 3 sold in Q4. Ford said that “the fully electric Mustang Mach-E turning on dealer lots in just 7 days.”

  Both domestically and abroad, shoring up the supply chain has become crucial for all automakers heading into 2021. The auto industry, as a whole is rethinking its cost cutting measures in the midst of both the pandemic and the chip shortage, Reuters reported this week. Companies are stockpiling key commodities at higher inventory levels and using software to track the integrity of the supply chains that they order from. 

  Richard Barnett, chief marketing officer of Supplyframe, which provides market intelligence to companies across the global electronics sectors, told Reuters: “The whole issue is exposing the brittleness, the fragility of the automotive supply chain. We’re trying to dual-source whenever possible critical components.”

  Tyler Durden
  Thu, 04/08/2021 – 02:45

• Escobar: Bombshell Book In Germany Revives 9/11 As A Business Model
  Escobar: Bombshell Book In Germany Revives 9/11 As A Business Model

  Authored by Pepe Escobar via The Saker blog,

  Nearly 20 years after 9/11, Germany and the German-speaking world are being hit by a formidable one-two.

  A ground-breaking study by gifted independent financial journalist Lars Schall, Denken wie der Feind – 20 Jahre Ausnahmezustand 9/11 und die Geopolitik des Terrors.

  (“Thinking Like the Enemy – 20 Years State of Emergency, 9/11 and the Geopolitics of Terror”) is being published in Germany in two books.

  The first one – Das Erdöl, der Dollar und die Drogen (“The Oil, The Dollar and The Drugs”) – is out this week. Volume II will be out next week.

  Nomi Prins, formerly from Goldman Sachs, has described Schall’s “investigation of 9/11 insider trading” as “stunning”. Marshall Auerback, researcher at the Levy Institute in the U.S., noted how “most of the MSM still refuse to tackle the broader, more controversial aspects of the 9/11 tragedy”. Schall, he adds, “provides a healthy corrective”.

  A sample of Schall’s work, already published by The Saker blog, is this interview on 9/11 terror trading.

  I’ve had the pleasure to write the introduction for the German one-two. Here it is – hoping that such an extraordinary achievement may find its way in many other languages, especially across the Global South.

  

  9/11, or “The Owls Are Not What They Seem”

  Until COVID-19 showed up on the scene in the Spring of 2020, nearly two decades after the fact, the world remained hostage to 9/11. This was the ultimate geopolitical game-changer that set the tone for the young 21st century. The book you have in your hands asks the ultimate question: why 9/11 matters.

  Follow the money. It’s quite fitting that this meticulous investigation is conducted by a gifted, extremely serious financial journalist – and, in an unprecedented way, presents a mass of information previously unavailable in German.

  I’ve known Lars Schall, virtually, for years – exchanging correspondence on politics and economics. When we met in person in Berlin in 2015, we finally had time, live, to also indulge in our number one pop culture mutual passion: David Lynch’s Twin Peaks. Lars may be a German incarnation of FBI Special Agent Dale Cooper. Or, better yet, the compassionate version of Albert Rosenfield, the sarcastic pathologist in Twin Peaks.

  Take for instance this dialogue from Twin Peaks:

  Albert Rosenfield: We sent a portrait of your long-haired man to every agency from NASA to DEA and came up empty. This cat is in nobody’s database. 

   Special Agent Dale Cooper: A man that four of us have seen here in Twin Peaks. 

   Albert Rosenfield: [smiling] Sure. Oh, by the way, you were shot with a Walther PPK. It’s James Bond’s gun, did you know that?

  So what you have in your hands is 9/11 dissected by a thoroughly working pathologist, who had “a lot of cutting and pasting to do”. He was aware of myriad red lines from the start, as well as myriad vanishing acts and false non sequiturs. 9/11 may be the ultimate illustration of one of Twin Peaks’ legendary one-liners: “The owls are not what they seem”.

  Our pathologist had in fact to disassemble a humongous matryoshka to break it down into smaller dolls. This process had some surprises in store: by following-the-money approach regarding 9/11, for instance, our pathologist was in the end confronted with the case of an anal prolapse at Guantanamo Bay. You don’t believe it? Just wait and read the research.

  This journey will take you through hundreds of pages of text and myriads of endnotes, over 2,400 of them, quite a few dealing with many different sources, as well as selected sensitive documents treated by professional translators.

  The double volume details the interconnected implications of extremely complex dossiers:

  • the US national energy policy group chaired by former Vice-President Dick Cheney, in secrecy, only four days after the start of the Bush administration;

  • the ramifications of Peak Oil; the interest by the Council on Foreign Relations (CFR) on Middle East oil, especially Iraq;

  • the CIA’s major role in the drug trade business;

  • the Saudi-U.S. alliance related to the protection of al-Qaeda; what happened with the U.S. air defense on 9/11;

  • and last but not least, insider trading on 9/11, especially anomalies in the option and bond markets.

  The nearly mythical computer software program PROMIS, created in the 1970s by former NSA analyst Bill Hamilton, plays a sort of Rosebud role in this narrative – complete with a trail of unexplained deaths and disappearing files that renders some of its avatars, especially those containing backdoor eavesdropping capabilities enhanced by artificial intelligence (AI) almost impervious to investigation.

  As a matter of fact, Lars had been contacted by Bill Hamilton, who asked him if he could help in relation to the PROMIS affair. It was this request – which took place in the Spring of 2012 after Lars had just published a 9/11-Insider Trading article at Asia Times – that has been the spark which started the investigation you are about to read.

  For the German reader, one of the firsts of this sprawling analysis is to take what is considered in the U.S. as a “conspiracy theory” – Mike Ruppert’s seminal 2004 book “Crossing the Rubicon” – and, in Lars’s words, “figure out how far it can be proven correct, more than 15 years after it was published.”

  Lars shows in detail how 9/11 enabled a state of emergency, a permanent Continuity of Government (COG) in the U.S. and mass surveillance of U.S. citizens – connecting the dots all the way from missing trillions of dollars in the Pentagon to NSA data mining and leading U.S. neocons. The latter had been praying for a “Pearl Harbor” to reorient US foreign policy since 1997. Their prayers were answered beyond their wildest dreams.

  The investigation eventually displays a startling road map: the war on terror as a business model. However, as Lars also shows, in the end, much to the despair of U.S. neocons, all the combined sound and fury of 9/11 and the Global War on Terror, in nearly two decades, ended up bringing about a Russia-China strategic partnership in Eurasia.

  It’s fair to ask the author what did he learn as he juggled for years with this immense mass of information. Lars points to the familiarity he acquired with the work of Peter Dale Scott – author, among others of “The Road to 9/11”, and a specialist in the origins of the U.S. Deep State – which is diametrically opposed to the sanitized narrative privileged by the Beltway and U.S. corporate media. Lars presents information by Peter Dale Scott that had never been translated into German before.

  Special Agent Lars Cooper / Lars Rosenfield had in effect to kiss goodbye to a career as a journalist, because “I’ll be forever scorned as a ‘conspiracy theorist’,” as he told me. So a stark choice was in play; fearlessness, or a comfortable career as a corporate hack. In the end, Lars chose fearlessness.

  In Twin Peaks, Special Agent Dale Cooper has ultimately to confront himself. He knows he’s lost if he tries to run away from his dark self – who is “the dweller on the threshold.” Our Special Agent Lars Cooper definitely did not run away from the dweller on the threshold this time around. He dared to cross to the other side to stare at the abyss. And now he’s back to tell us in a book what it looks like.

  *  *  *

  Denken wie der Feind – 20 Jahre Ausnahmezustand 9/11 und die Geopolitik des Terrors 

  (“Thinking Like the Enemy – 20 Years State of Emergency, 9/11 and the Geopolitics of Terror”), by Lars Schall

  

  Book 1: Das Erdöl, der Dollar und die Drogen

  (The Oil, The Dollar and The Drugs)

  Via Books on Demand (BOD):

  ISBN for the book: 9783753442938. For the e-Book: 9783753414737

  Book 2:  Das “Pearl Harbor” des 21. Jahrhunderts (The “Pearl Harbor “ of the 21st Century)

  Via Books on Demand (BOD):

  ISBN for the book: 9783753460796. For the e-book:  9783753433882

  Tyler Durden
  Thu, 04/08/2021 – 02:00

• Germany Says It Will Buy Russia's Sputnik Vaccine, But EU Approving Agency To Likely Drag Its Feet
  Germany Says It Will Buy Russia’s Sputnik Vaccine, But EU Approving Agency To Likely Drag Its Feet

  At the moment over 50 countries across the globe have approved use of the “controversial” Sputnik V vaccine… controversial of course not with regards to science or effectiveness, but merely that it’s Russian-produced. 

  There continues to be huge demand particularly in Latin America, where Brazil is foremost among those getting hit hard, suffering its deadliest month throughout the pandemic in March. But of most “concern” to EU and US officials, however, is that parts of Europe continue to do separate deals to obtain the Sputnik vaccine.

  The European Medicines Agency (EMA) appears to be dragging its feet in what likely comes down to a political decision (as opposed to a health and scientific decision) – as Bloomberg writes: “EU leaders were told during a recent video conference that it could take three to four months before Sputnik receives EMA approval, according to a diplomatic cable seen by Bloomberg. Some leaders questioned whether the drug would still be needed at that point, the note said.”

  

  The European Commission on Wednesday reportedly informed EU member states that Brussels does not intend to start talks with Russia for procuring Sputnik V, even as controversy continues over AstraZeneca and blood clots, and the ability of Europe to obtain enough jabs for herd immunity to the population. 

  This has prompted Germany to break step and start its own bilateral negotiations with Russia, as Reuters detailed Wednesday:

  That is why German Health Minister Jens Spahn announced during the virtual meeting that Germany would start preliminary negotiations with Russia on a bilateral agreement to secure the vaccine, the source added.

  In the preliminary talks, Germany first wants to determine which quantities Russia can deliver and when, the source said.

  But then German officials included the further key caveat that it will only purchase the vaccine once it meets EMA approval – again, which would likely extend the timeline for procurement far enough out to bring into question whether it would be needed by time of the belated EMA approval. Late last month Berlin signaled it would likely pursue talks with Russia even if other EU member countries chose not to.

  And within Germany, some regions/states are moving even faster: “Bavaria signed a preliminary agreement to secure as many as 2.5 million doses of Russia’s Sputnik V Covid-19 vaccine, some of which would be produced at a facility in the German state,” writes Bloomberg.

  #BREAKING Germany’s Bavaria region signs provisional agreement to buy doses of Russia’s Sputnik V coronavirus vaccine once approved by European regulators: state premier pic.twitter.com/EWyuwGsS46

  — AFP News Agency (@AFP) April 7, 2021

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

  “The deal with the state-run Russian Direct Investment Fund, which backed Sputnik V’s development and is in charge of its international roll-out, is contingent on the shot gaining European Union or German approval, Bavaria’s health ministry said in an emailed statement,” the report revealed. 

  Recall that US and in some cases EU officials have linked the Sputnik V vaccine with Russia’s “malign influence” and have further questioned the spread of the vaccine from a country that “has less than desirable values” – as the European Council president once put it.

  Tyler Durden
  Thu, 04/08/2021 – 01:00

• Scenes From 2030
  Scenes From 2030

  Authored by TE Creus via Off-Guardian.org,

  “Hi, dude!”

  “Oh. Hi. How are you?”

  “I’m good. How do you like my shoes?”

  “Nice. Are those…”

  “Yeah. The original Nike Lil Nas X Satan’s Shoes, version 2030.”

  “Wow. But don’t those cost a fortune? How can you afford them, with just the Universal Basic Income?”

  “Well, duh. I didn’t buy them, dude. I’m just renting them from Amazon Prime, of course. All of my clothes are rented, including the original Calvin Klein underwear.”

  “Eew… Well, they did say that ‘you’ll own nothing, and you’ll be happy’…”

  “What are you talking about?”

  “Nothing, just remembering an old joke here. So, what’s new? What are your plans for next week?”

  “Not sure. Maybe I’ll go to the City Hall Yearly Masked Ball. You want to come? The masks are all N95 compliant, so it’s safe.”

  “No, thanks. I thought you were travelling to Italy for the holidays?”

  “Nah, I can’t board a plane this month. I didn’t get my Moderna monthly booster shots. I wanted to, but the lines were so big, the next appointment available for me is only next month.”

  

  “This Covid-29 is really pesky, isn’t it?”

  “You bet. But I’m sure the vaccine is working. Just give it time. It takes a few years to achieve full immunization, but of course, with the new variants and viruses that appear every month, it’s always a game of catching up. We got to be patient. So, yeah, no travel this month for me.”

  “Well, you know, you could always travel around your own room.”

  “What?”

  “Oh. I just got reminded of an old 18th century novel. ‘Voyage around my room,’ by Xavier de Maistre.”

  “What it’s about?”

  “It’s about a guy who, well, travels around his room.”

  “18th century? Man, that’s like, old. When was that exactly? I guess that’s when the first lockdowns happened, right? In the first Covid era?”

  “Yeah, sort of… Anyway, forget it, you just reminded me of that book. But I guess reading is not really your thing.”

  “Nah. Is there a YouTube version? You are funny, you’re one of those guys who still read, right? You’re really old-fashioned. I bet you don’t even have a microchip in your brain, L.O.L.”

  “Thankfully not…”

  *  *  *

  “What’s wrong?”

  “Don’t get close to me.”

  “What? Why? Who are you calling?”

  “Who am I calling? Who am I calling? The police, dude. Not having a brain chip is a felony, and it’s my duty as a citizen to report you, sorry. I know you’re a friend and neighbour and all, but, that’s just sick, dude. That’s really fucked-up.”

  “No, No… Wait, stop! I meant that I don’t have the latest version of he chip. But I still have the 2029 model. As you said, I’m old-fashioned…”

  “Ah… Ok… But… I don’t see the scar in your head…”

  “Oh, it’s there, trust me. It’s just that I got a hair implant on top of it, so, it’s not visible.”

  “Ah, OK. That’s cool. You were starting to scare me, dude. I mean, not having a brain chip, in this day and age… I was starting to think you were a radical or something…”

  “Well…”

  “Oh man, it’s getting late. It was nice seeing you, but, sorry, I got to go now. I have a Zoom meeting with my family. But, see you another time, I guess. Should we do an elbow bump, or a foot shake?”

  *  *  *

  “What’s up dude? What’s wrong with you?”

  “Nothing, you know, memories. I’m kind of old now, and sometimes I get flashes of images from previous times. And now I was thinking of an old movie I saw once, long ago…“The Flowers of Saint Francis”, it was called. By Roberto Rossellini, about Saint Francis of Assisi. There is one scene in which a leper comes, ringing a bell… You know, at that time, in the Middle Ages, lepers were forced to wear bells on their clothes to announce their arrival… And so this leper comes, his little bell ringing, asking for some money, but all people move away from him, and he’s there all alone, looking so forlorn. So Saint Francis sees this, and he is so overcome with pity, that he approaches the leper and hugs him. A long hug, for several minutes. And when the poor leper goes away, he starts to cry.”

  “Eew… That’s sick, man. I mean, hugging someone. That’s just gross! What’s a leper?”

  “Oh… it’s a… Leprosy was a disease that existed a long time ago. I mean, it still exists, but it was more common then.”

  “Oh. I guess mRNA vaccines cured it, right? Man, viruses are evil. But thankfully we have those magic vaccines today.”

  “Sort of. It’s not really caused by a virus, and the treatment is not a vaccine. But anyway, I was just reminded of that scene, I don’t know why…”

  “OK. So, elbow bump or foot shake, then?”

  “Honestly, I prefer neither.”

  “Sure, that’s the safest way. See you around then, man. And get that 2030 brain chip, bro, for Satan’s sake. I mean, we’re in 2030, dude. We are not in the Middle Ages anymore.”

  “Yeah… We sure aren’t…”

  Tyler Durden
  Thu, 04/08/2021 – 00:00

• Naval Mine Washes Ashore On South Florida Beach
  Naval Mine Washes Ashore On South Florida Beach

  An unusual discovery on a South Florida beach Sunday promoted local police, the bomb squad, and the military to investigate a gray spherical device, reported CBS Miami. 

  According to the Broward Sheriff’s Office, a naval mine, measuring about four feet in diameter, washed ashore early Sunday morning near Lauderdale-by-the-Sea. 

  A deputy on patrol first spotted the naval mine around 0230 ET. Shortly after, the beach was closed, and the bomb squad and Air Force personnel were called in. 

  

  The sheriff’s office said a “possible explosive training device” had floated ashore near Lauderdale-by-the-Sea, next to the Plunge Beach Hotel.

  

  The world “INERT” was spray-painted on its side, and the device was likely used for military training purposes at one point.

  

  It was removed from the beach around 1045ET.

  

  So far, there no indication of where it came from. 

  A similar instance occurred on a beach in North Carolina in March 2020. The device was identified as a Mark 49 mine warfare target, a simulated mine designed to train mine-hunting teams.

  The device found in South Florida Sunday was likely a MK 49 though authorities have yet to confirm. 

  Tyler Durden
  Wed, 04/07/2021 – 23:40

• Major Fire At Pemex Refinery In Mexico Leaves Seven Injured 
  Major Fire At Pemex Refinery In Mexico Leaves Seven Injured 

  A massive fire erupted on Wednesday evening at an oil refinery operated by Petroleos Mexicanos (Pemex) in the city of Minatitlan in the eastern Mexican state of Veracruz, reported Reuters. 

  “Specialized staff of Pemex attends a fire in the transfer pump house of the Gral. Lázaro Cárdenas from Minatitlán,” Pemex tweeted. 

  Pemex went on to say that “seven were injured with minor injuries: a worker for burns and one for poisoning; and five firefighters who participated in controlling the incident.” 

  According to Mexican newspaper Reforma, the fire began around 5 pm and was “caused by a leak in the plant’s charge pump.”

  

  Reforma continued: “the pumps have a mechanical seal that in this case failed and there was a leak, which caused the fire. The plant receives gasoline to produce benzene, toluene, and xylenes, products known as aromatics.”

  

  Allegedly, someone snapped a picture of a Pemex oil worker closing values during the explosion. The picture has an unknown author and yet to be confirmed. 

  

  The executive director of Mexico’s safety, energy, and environment regulator ASEA, Angel Carrizales, tweeted:

  “The ASEA agency is tackling the incident that is currently ongoing at the Lazaro Cardenas oil refinery in Minatitlan, the state of Veracruz. The incident is associated with the inflammation of a fuel pump.”

  Footage posted on Twitter showed a massive column of black smoke rising from the refinery. 

  Mexique : L’incendie et l’explosion ont touché la tour 5 de la raffinerie Pemex de Minatitlán, dans l’état de Veracruz.
  Aucun bilan disponible. pic.twitter.com/YgtXBO1z53

  — Rebecca Rambar (@RebeccaRambar) April 8, 2021

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

  ¿Así luce la soberanía energética? @rocionahle #Minatitlán

  pic.twitter.com/n8Wrw7N7kr

  — el Nigromante (@elnigromante_) April 8, 2021

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

  Reuters notes the refinery is one of six operated by Pemex and has a capacity of around 285,000 barrels per day. 

  Tyler Durden
  Wed, 04/07/2021 – 23:28

• Biden Admin Plots Revenge On Russia For Alleged Hacking, Meddling
  Biden Admin Plots Revenge On Russia For Alleged Hacking, Meddling

  President Joe Biden – whose son Hunter received $3.5 million by the wife of the late Moscow Mayor Yuri Luzhkov for reasons unknown – is preparing to retaliate for various Russian misdeeds, including the SolarWinds hack and election interference, according to Bloomberg.

  

  Retaliatory options may include sanctions on people close to Russian President Vladimir Putin, agencies linked to alleged election meddling, and the expulsion of Russian intelligence officers in the US who are currently under diplomatic cover, according to anonymous officials – one of whom said that the US response ‘would likely comprise several elements.’

  The actions will be the outcome of the review President Joe Biden ordered on his first full day in office into four areas: Interference in the U.S. election, reports of Russian bounties on U.S. soldiers in Afghanistan, the SolarWinds attack and the poisoning of Russian opposition leader Alexey Navalny.

  The administration announced sanctions against Russian officials over Navalny last month but had so far held off on action in the other three areas. –Bloomberg

  Last month, Biden nodded in agreement when asked if he thought Putin was a “killer,” to which Putin said ‘takes one to know one.’

  Putin then challenged Biden to a live, televised debate to discuss geopolitical friction, which the US President promptly declined.

  According to the report, beyond sanctioning individuals, the Biden administration could expel diplomats or other measures designed to establish ‘effective deterrence against cyber attacks’ such as the SolarWinds exploit which affected several government agencies and private corporations.

   

  Tyler Durden
  Wed, 04/07/2021 – 23:20

• Hypersonic Weapon? Black Triangular Object Spotted Over Pasadena
  Hypersonic Weapon? Black Triangular Object Spotted Over Pasadena

  Self-professed extraterrestrial expert and conspiracy theorist Scott C. Warin uploaded a video on YouTube of an unexplainable phenomenon over the skies of Pasadena, California, last month. 

  Warin is a UFO hunter who manages the blog UFOSightingsDaily and wrote some commentary on the sighting. 

  He said the object floating over the Pasadena skies appeared to be a “black triangle object.” He said the object’s shape seems to resemble the United States Air Force’s hypersonic weapon, except the object was hovering, rotating, and stopping at times – something a hypersonic weapon isn’t capable of. 

  

  Warin’s conspiracy theorist side quickly comes out as he speculates the UFO might’ve been “monitoring the covid infections and immunizations of the humans below to assess future predictions of events.”

  In a world where deepfake technology can create convincing events – the authenticity of a video must always be questioned. 

  We must note Lockheed Martin’s Advanced Development Program, responsible for developing advanced aircraft, is about an hour away from Pasadena. 

  Some internet users were convinced the object was a balloon or even possibly a drone. 

  Tyler Durden
  Wed, 04/07/2021 – 23:00

• "We Found Something Better Than Gold": Rio Tinto Starts Lithium Production In The US
  “We Found Something Better Than Gold”: Rio Tinto Starts Lithium Production In The US

  By OilPrice.com,

  Rio Tinto has kicked off lithium production from waste rock at a plant located at a borates mine it controls in California. The demonstration facility is the next step in scaling up a breakthrough lithium production process developed at the Boron mine. The method allows Rio Tinto to recover the critical mineral and extract additional value out of waste piles from over 90 years of mining at the operation.

  

  An initial small-scale trial in 2019 successfully proved the process of roasting and leaching waste rock to recover high grades of the metal, vital in the production of batteries that power electric vehicles (EVs) and most high tech electronics. Rio’s discovery of lithium at Boron was a fluke. The miner was actually testing Boron’s tailings to see whether the presence of gold was significant and found instead traces of lithium at a concentration higher than domestic projects under development.

  “We were looking for gold… but we found something better than gold: battery-grade lithium – and the potential to produce a lot of it,” Alex Macdonald, senior engineer at the plant, said on the company’s website.

  The project comes at a time when the US is pushing to both encourage the electrification of vehicles and reduce the country’s dependence on China for rare earths, lithium and other minerals needed for EV batteries. The Biden administration has promised to convert the entire US government fleet — about 640,000 vehicles — to EVs. If the plan is successful, the total number of EVs in the US would increase by more than 50%.

  Major leagues

  Rio Tinto invested $10 million to build the pilot plant that will be able to produce 10 tonnes a year of lithium-carbonate. By the end of the year, and based on the trial’s results, it will decide whether or not to spend a further $50 million in an industrial-scale plant with annual capacity of 5,000 tonnes a year — enough for around 15,000 Tesla Model S batteries.

  The projected production would be roughly the same as the capacity of Albemarle’s Silver Peak mine in Nevada, which is currently the only lithium-carbonate producing asset in the country, according to the US Geological Survey. Until now, the global miner’s incursion in the lithium market has been mostly limited to its 100%-owned lithium and borates mineral project in Jadar, Serbia. A feasibility study for the proposed mine is expected to be complete by the end of 2021, Rio said.

  Rio has produced borates — a group of minerals used in soaps, cosmetics and other consumer goods — for nearly a century in the Mojave Desert, about 195 km (120 miles) north of Los Angeles. The world’s second-largest miner announced in March an agreement with renewable energy firm Heliogen to explore the deployment of solar technology at the mine.

  Rio Tinto is not alone in its quest to produce lithium in California. Lithium Americas is also advancing a major project that received final federal approval in January.  The Thacker Pass lithium mine is expected to generate 20,000 tonnes a year of the battery metal, once operational in 2023.

  The plant at Boron is one the company’s latest attempts latest to extract valuable materials from waste rock or by-products – including scandium from titanium dioxide production, as well as anhydrite and Alextra from its aluminum operations.

  Tyler Durden
  Wed, 04/07/2021 – 22:40

• Veteran Intelligence Officials Issue Letter To Biden Urging To Avoid War In Ukraine
  Veteran Intelligence Officials Issue Letter To Biden Urging To Avoid War In Ukraine

  MEMORANDUM FOR: The President
  FROM: Veteran Intelligence Professionals for Sanity (VIPS)
  SUBJECT: Avoiding War in Ukraine

  Dear President Biden,

  We last communicated with you on December 20, 2020, when you were President-elect.

  At that time, we alerted you to the dangers inherent in formulating a policy toward Russia built on a foundation of Russia-bashing. While we continue to support the analysis contained in that memorandum, this new memo serves a far more pressing purpose. We wish to draw your attention to the dangerous situation that exists in Ukraine today, where there is growing risk of war unless you take steps to forestall such a conflict.

  At this juncture, we call to mind two basic realities that need particular emphasis amid growing tension between Ukraine and Russia.

  First, since Ukraine is not a member of NATO, Article 5 of the NATO Treaty of course would not apply in the case of an armed conflict between Ukraine and Russia.

  Second, Ukraine’s current military flexing, if allowed to transition into actual military action, could lead to hostilities with Russia.

  We think it crucial that your administration immediately seek to remove from the table, so to speak, any “solution” to the current impasse that has a military component. In short, there is, and can never be, a military solution to this problem.

  Your interim national security strategy guidance indicated that your administration would “make smart and disciplined choices regarding our national defense and the responsible use of our military, while elevating diplomacy as our tool of first resort.” Right now is the perfect time to put these words into action for all to see.

  

  We strongly believe:

  1. It must be made clear to Ukrainian President Zelensky that there will be no military assistance from either the US or NATO if he does not restrain Ukrainian hawks itching to give Russia a bloody nose — hawks who may well expect the West to come to Ukraine’s aid in any conflict with Russia. (There must be no repeat of the fiasco of August 2008, when the Republic of Georgia initiated offensive military operations against South Ossetia in the mistaken belief that the US would come to its assistance if Russia responded militarily.)

  2. We recommend that you quickly get back in touch with Zelensky and insist that Kiev halt its current military buildup in eastern Ukraine. Russian forces have been lining up at the border ready to react if Zelensky’s loose talk of war becomes more than bravado. Washington should also put on hold all military training activity involving US and NATO troops in the region. This would lessen the chance that Ukraine would misinterpret these training missions as a de facto sign of support for Ukrainian military operations to regain control of either the Donbas or Crimea.

  3. It is equally imperative that the U.S. engage in high-level diplomatic talks with Russia to reduce tensions in the region and de-escalate the current rush toward military conflict. Untangling the complex web of issues that currently burden U.S.-Russia relations is a formidable task that will not be accomplished overnight. This would be an opportune time to work toward a joint goal of preventing armed hostilities in Ukraine and wider war.

  There is opportunity as well as risk in the current friction over Ukraine. This crisis offers your administration the opportunity to elevate the moral authority of the United States in the eyes of the international community. Leading with diplomacy will greatly enhance the stature of America in the world.

  For the Steering Group, Veteran Intelligence Professionals for Sanity

  • William Binney, former Technical Director, World Geopolitical & Military Analysis, NSA; co-founder, SIGINT Automation Research Center (ret.)
  • Marshall Carter-Tripp, Foreign Service Officer & former Division Director in the State Department Bureau of Intelligence and Research (ret.)
  • Bogdan Dzakovic, former Team Leader of Federal Air Marshals and Red Team, FAA Security (ret.) (associate VIPS)
  • Graham E. Fuller,Vice-Chair, National Intelligence Council (ret.)
  • Robert M. Furukawa, Captain, Civil Engineer Corps, USNR (ret.)
  • Philip Giraldi, CIA, Operations Officer (ret.)
  • Mike Gravel, former Adjutant, top secret control officer, Communications Intelligence Service; special agent of the Counter Intelligence Corps and former United States Senator
  • John Kiriakou, former CIA Counterterrorism Officer and former Senior Investigator, Senate Foreign Relations Committee
  • Karen Kwiatkowski, former Lt. Col., US Air Force (ret.), at Office of Secretary of Defense watching the manufacture of lies on Iraq, 2001-2003
  • Edward Loomis, NSA Cryptologic Computer Scientist (ret.)
  • Ray McGovern, former US Army infantry/intelligence officer & CIA presidential briefer (ret.)
  • Elizabeth Murray, former Deputy National Intelligence Officer for the Near East & CIA political analyst (ret.)
  • Pedro Israel Orta, CIA Operations Officer & Analyst; Inspector with IG for the Intelligence Community (ret.)
  • Todd E. Pierce, MAJ, US Army Judge Advocate (ret.)
  • Scott Ritter, former MAJ., USMC, former UN Weapon Inspector, Iraq
  • Coleen Rowley, FBI Special Agent and former Minneapolis Division Legal Counsel (ret.)
  • Kirk Wiebe, former Senior Analyst, SIGINT Automation Research Center, NSA
  • Sarah G. Wilton, CDR, USNR, (ret.); Defense Intelligence Agency (ret.)
  • Robert Wing, U.S. Department of State, Foreign Service Officer (former) (associate VIPS)
  • Ann Wright, U.S. Army Reserve Colonel (ret) and former U.S. Diplomat who resigned in 2003 in opposition to the Iraq War

  Veteran Intelligence Professionals for Sanity (VIPs) is made up of former intelligence officers, diplomats, military officers and congressional staffers. The organization, founded in 2002, was among the first critics of Washington’s justifications for launching a war against Iraq. VIPS advocates a US foreign and national security policy based on genuine national interests rather than contrived threats promoted for largely political reasons. An archive of VIPS memoranda is available at Consortiumnews.com.

  Tyler Durden
  Wed, 04/07/2021 – 22:20

• "It's Class Warfare" – Protests, Tax Hikes Create "Hostile Environment" For Wealthy New Yorkers
  “It’s Class Warfare” – Protests, Tax Hikes Create “Hostile Environment” For Wealthy New Yorkers

  Richard Ravitch, the former lieutenant governor and elder statesman credited with helping to guide the city through the tumultuous 1970s, claims he has never seen the rich be so thoroughly demonized in New York City, a symbol of American class inequalities.

  “It bothers me because it gives a lot of nourishment to all the rightwing nuts I despise,” Ravitch says. There was once a sense of collegiality among business and labour leaders fighting to rescue the city, he laments. “None of that exists now.”

  As he struggles to beat back twin scandals, including allegations that he sexually harassed female aides, NY Gov. Andrew Cuomo is pushing a progressive budget that would see New York’s millionaires pay the highest state income tax in the country, overtaking even massive California. Unfortunately for Cuomo, his latest plan to silence his progressive critics just might backfire. Because as the FT reports, NYC’s rich are starting to feel like they might be better off somewhere else – and the work-from-home revolution has helped to weaken NYC’s status as the “center of the universe” in the US. As we reported yesterday, NY legislators have been briefed on a plan under which income-tax rates would rise to 9.65% from 8.82% for single filers reporting more than $1 million of income and joint filers reporting more than $2 million, the people said. The plan would also add two new tax brackets. Income over $5 million would be taxed at 10.3% and income over $25 million would be taxed at 10.9%, the people said of the plan, and the new rates would expire in 2027.

  But it’s not just the tax hikes that are making the rich feel threatened: it’s the protest environment witnessed last summer as the rich are being blamed for perpetuating systems of racial, sexual and class repression.

  

  Even Terri Liftin, a Democratic lawyer and candidate for Comptroller felt emboldened – or rather, potentially risking political blowback in the process.

  Terri Liftin, a Democratic lawyer who is running for New York City comptroller, says it was to be expected that the inequality exacerbated by coronavirus would breed greater hostility towards the rich. But she worries about nascent “class warfare” that, she says, would ultimately leave New York City worse for everyone. “You can’t bring us all together if the emotional tide is against the wealthy,” she says. “I don’t think the rich mind paying a bit more but I don’t think they want to pay more if they’re being told they’re terrible people.”

  One society figure protested that the rich should feel like “partners”, not targets.

  Frederick Peters, chief executive of Warburg Realty — and a scion of the old-money Warburg family — echoes a complaint that is common among the wealthy: that the proposed tax increases are motivated less by fiscal needs than ideological ones. While forecasters were last year predicting a $15bn fiscal deficit for the state, that has since narrowed as tax revenues have beaten expectations and President Joe Biden’s stimulus plan has plugged many holes.

  “If you feel like your city is treating you like the enemy and you already own a place in Palm Beach, it seems a maladroit moment” to raise taxes on the wealthy, Peters says, adding: “The rich shouldn’t feel like the enemy. They should feel like partners.”

  Some might argue that the wealthy have a lot of nerve to complain about taxes after a year where more than 30K New Yorkers succumbed to COVID (deaths that, as the FT reminds us, were borne disproportionately by the poor). One Empire State lawmaker from Queens claimed that if the wealthy feel attacked, well, it’s their own fault.

  “We’re still dealing with the fact that Ronald Reagan won the political debate four decades ago – even though we don’t know if the data backs up the efficacy of that economic approach,” says Michael Gianaris, a state senator from Queens, setting out the broader stakes.

  Gianaris joined the progressive camp when he opposed Amazon’s 2019 attempt to build a second headquarters in his borough. He says it is absurd to believe that paying a few per cent more in tax in a time of “economic calamity” should tip the balance between whether people return to Manhattan or stay in Palm Beach.

  “If they’re feeling like the bad guy, it’s because they’re making themselves the bad guy by arguing that they shouldn’t contribute more to help us recover when they have done extremely well,” he says. “Let’s be clear: no matter what we do, the very rich will continue to be very rich.”

  Many of the wealthy are channeling this rage into the mayoral race, as they seek to push a business-friendly mayor, instead of another bumbling de Blasio-style progressive.

  The city is at a crossroads. This is truly the most important election of our lifetime and in NYC’s history,” Stephen Ross, chair of The Related Companies, and de facto king of the city’s developers, wrote to fellow business leaders last month as he urged them to join his effort to elect a business-friendly mayor. The race’s outcome, Ross wrote, will determine whether “NYC will rebound or languish”.

  Looming large for executives like Ross is the grim memory of the 1970s, when a fraying city ended up losing half its Fortune 500 companies – many fleeing to surrounding suburbs – and shedding more than 1m inhabitants. That era also birthed a civic movement.

  Of course, the roots of this recent anti-rich wave started long before the pandemic. Back in 2019, AOC helped scuttle Amazon’s plans to build its second headquarters in Queens after the Congresswoman complained about tax incentives from the state and city.

  And while many financial firms have already moved to Florida or Texas (or another Sun Belt state), Reuters reports that Cuomo’s budget has already pushed more financiers to start looking for an exit.

  But with plans afoot to raise rates as part of a New York state budget agreement, some financiers are exploring exits, emboldened by a pandemic that has illustrated how working on Wall Street may no longer mean working from Wall Street.

  “I’m already looking for an apartment in Florida,” said one highly paid person at a top-tier bank who asked not to be identified because his employer does not yet know of his plans to move.

  Others earning more than $1 million are considering still bolder steps such as moving not only themselves but also their entire investment firms out of the city, arguing higher taxes cut into their ability to pay staff.

  The state’s tax collectors would do well to remember: the more financial services firms move to Florida, the easier it will become for other firms to move there as well.

  Tyler Durden
  Wed, 04/07/2021 – 22:00

• SPAC Bubble Pops: Flood Of New SPAC IPOs Hits A Brick Wall
  SPAC Bubble Pops: Flood Of New SPAC IPOs Hits A Brick Wall

  “3 SPAC IPOs this week after 2 last week after 276 in Q1 (vs 228 all of last yr vs 170 from 2013 – 2019 combined)”   – Goldman Sachs trader John Flood, April 7, 2021

  As Bloomberg’s Drew Singer writes, the days of special purpose acquisition companies debuting by the dozens on public exchanges appear to have come and gone, “spelling trouble for the broader market for initial public offerings.”

  After fueling a record first quarter for IPOs, SPACs have suddenly stopped going public at anything close to the same scale, as if they hit a brick wall in the second quarter.

  

  The plunge in deal making follows weak trading in these vehicles, slow progress in their search for acquisitions and outperformance by traditional listings, not to mention various warnings by the SEC itself.

  Hearing about SPACs? Remember, it is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment. https://t.co/pzowsgP2Oh

  — SEC New York (@NewYork_SEC) April 7, 2021

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  Just three SPACs have listed this week, including two on Wednesday. This follows just a pair of IPOs by SPACs last week and compares to more than 20 deals a week during most of the year.

  Worse, according to Bloomberg data, public SPAC offerings are poised for their slowest two-week stretch since the end of 2020.  While a reversal remains possible as we get further from Easter weekend, investors have been signaling a growing distaste for these deals. More than 100 or about a third of SPACs that went public this year are trading below their IPO price as investors wait for news of an acquisition. In all, 2021’s SPACs are trading 0.8% above their debut levels, compared with an average 6.0% gain by the year’s traditional IPOs.

  The trouble in SPACs comes alongside other signs of weakness in the global IPO market even as the S&P 500 continues to trade near record highs. Stocks rose on Wednesday amid a surge in the Nasdaq 100.

  Postmarket launches of U.S. secondary offerings:

  Academy Sports (ASO)

  • Bookrunners: JPMorgan
  • Shares -3.5% postmarket
  • Seller unknown

  Identiv (INVE)

  • Bookrunners: B. Riley, Lake Street, Northland
  • Shares -2.2% postmarket
  • Seller: Company

  Otonomy (OTIC)

  • Bookrunners: Cowen, Piper Sandler
  • Shares -9.8% postmarket
  • Seller: Company

  Tyler Durden
  Wed, 04/07/2021 – 21:40

• "Clear Focus On Foreign Income": Full Breakdown Of The Treasury's Corporate Tax Proposal
  “Clear Focus On Foreign Income”: Full Breakdown Of The Treasury’s Corporate Tax Proposal

  As reported earlier, today the Treasury has released a new, more detailed description of its corporate tax proposals which will be the pay-for to fund Biden’s $2.25 trillion “Jobs”, aka infrastructure, plan. The proposals are in line with the outline from the White House last week, but include a few key details related to the treatment of foreign income and the minimum tax on book income.

  Below we lay out a summary of what was released, courtesy of Goldman’s political economist Alec Philips:

  • Overall, Treasury estimates the proposal would raise around $2 trillion over 10 years. Compared to the CBO’s projection of total corporate profits, this would represent an increase in the effective corporate tax rate of 7pp. The net increase by company would vary substantially from this for two reasons.
  • First, the White House is proposing substantial tax incentives for specific activities—manufacturing, R&D, infrastructure, housing, and clean energy to name a few—many of which would go to corporations.
  • Second, around 60% of the gross tax increase the Treasury proposes relates to more heavily taxing the foreign profits of multinationals at rates similar to the current 21% domestic tax rate. The proposals would also tax the US profits of foreign multinationals more heavily.
  • These details are very likely to change. Senate Democrats have already released their own proposal, though it follows the same general outline. More importantly, some centrist Democrats have already suggested they prefer a smaller corporate rate increase.
  • The Treasury’s report is silent on the timing of tax increases, but Goldman thinks a retroactive tax hike is very unlikely. Budget rules require long-term offsets to new spending, but not in the near-term, and we expect that retroactive tax increases would reduce political support for the next fiscal package.

  As Larry McDonald summarizes in his latest Bear Trap report, the plan (infrastructure bill) would raise the corporate tax rate to 28% from 21%, increase minimum taxes on U.S. companies’ foreign income and make it harder for foreign-owned companies with U.S. operations to benefit from shifting profits to low-tax countries, i.e., effectively blocking the inversion deals that were so prevalent under Obama… And, as Yellen revealed today, the US is working with G-20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom.

  “So the global minimum tax would be on US companies doing business abroad but they are ALSO trying to get the G20 to agree to a minimum… Keep in mind, some companies such as Ireland have corporate tax rates as low as 12.5%. Goldman’s 9% EPS-hit projection does not incorporate a potential hike on foreign profits.“

  “The infrastructure bill wants to raise the so-called GILTI tax 10ppt on US companies’ foreign income. Yellen is separately trying to negotiate countries raise their corporate tax BECAUSE US wants to raise GILTI tax and if other countries don’t raise their taxes, we get same thing that happened pre 2017, USA companies going abroad. But these countries are not going to play ball with Yellen…”

  What these considerations in mind, here are the full details from the Treasury’s description of its corporate tax proposal, which it has subbed the “Made in America Tax Plan“, courtesy of Goldman:

  There are no new proposals in today’s Treasury release. The proposals all appear to have been mentioned in the outline the White House released last week as part of its “American Jobs Plan.” However, the proposal includes some new details, particularly with regard to the replacement for the Base Erosion and Anti-Avoidance Tax (BEAT) (see below), which the prior release did not describe.

  Treasury’s proposals imply a 7pp gross increase in the effective corporate tax rate. The Congressional Budget Office (CBO) projects corporate profits totaling $29.3 trillion over the next ten years. A $2 trillion rise in gross corporate taxes would represent a 7% increase off of that base. Looked at differently, CBO currently projects the Treasury will collect $3.5 trillion in corporate taxes, so a $2 trillion increase would increase corporate taxes by more than 60%. However, this is subject to two important caveats. First, the net tax increase would be smaller, as the Administration is also proposing new tax incentives (not detailed today) that some of these new revenues would pay for. Second, it would affect multinationals more heavily.

  The release highlights how much the Biden Administration plans to rely on taxing foreign profits for new tax revenue. Of the roughly $2 trillion over ten years the Treasury estimates the plan would raise, around $1.2 trillion appears to come from changing the tax treatment of foreign corporate income, primarily by tightening or replacing policies Congress first enacted in the 2017 Tax Cut and Jobs Act (TCJA). This would primarily affect US-based companies with foreign profits, though some provisions would also affect foreign-based multinationals with profits in the US.

  The main points of the proposal are as follows:

  • GILTI-related taxes would more than triple. The TCJA established a new tax on Global Intangible Low-Tax Income (GILTI), which taxed US-based companies on half of their foreign profits from intangible assets at the US rate (21%). Intangible income is defined as profits in excess of a 10% return on physical capital. The tax applies to aggregate foreign profits, net of tax credits worth 80% of taxes paid on those profits. The Administration proposes three changes: repeal the 10% return on capital; tax 75% of foreign profits rather than 50%; and apply the system on a country-by-country basis to better isolate profits in low-tax jurisdictions.  Treasury estimates this would raise $500bn in revenue in excess of the revenue from the current policy. For comparison, adjusted to today’s tax code and corporate profit projections, the Joint Committee on Taxation (JCT) estimated that the current GILTI provision would raise around $200bn. This is likely to increase the tax on GILTI that intellectual property-intensive industries already pay, but is also likely to affect other industries not currently affected by GILTI due to the exclusion of profits on physical capital and/or the aggregation of profits across countries.
  • BEAT would be replaced and increase by several times its current effect. The Base Erosion and Anti-Abuse Tax (BEAT) was also established by the 2017 law. It applies a tax on intra-company transactions, but exempts Cost of Goods Sold(COGS) and only applies if transactions exceed 3% of total deductions. The Treasury proposes to replace BEAT with SHIELD (Stopping Harmful Inversions and Ending Low-tax Developments). The proposal still lacks detail, but appears to tie treatment of related-party transactions to the tax rate of the related party. It would also seek to further limit corporate inversions. Adjusted for current profit projections and the 28%proposed tax rate, the original JCT estimate suggests BEAT should raise around$250bn over 10 years. However, Treasury data and projections suggest the IRS might collect only around $50bn in direct BEAT taxes over that period. Today’s Treasury release does not specify the exact amount of revenue SHIELD would raise, but the figures it mentions imply it would raise at least $200bn over 10 years.
  • FDII would be eliminated. The TCJA grants a deduction for the foreign profits of US companies that are derived from US-held intangible assets, known as Foreign Derived Intangible Income (FDII). This was intended to encourage companies to hold patents and other intangible assets in the US rather in low-tax jurisdictions and was meant to be complimentary to the GILTI regime. With a rise in the effective GILTI rate, Treasury appears to view the FDII policy as unnecessary. Treasury does not estimate the revenue repealing it would raise, but the 2017 JCT estimates, adjusted as above, suggest repeal might raise around $100bn.
  • The Treasury provides a few new details on the global minimum tax. The Biden campaign proposed a 15% tax on global income, applied to the figure companies report to shareholders rather than the figure reported to the IRS. The White House included this in the last week’s outline without new detail. The only new detail the Treasury now provides is that it would credit firms for extra taxes (above the 15% threshold) paid in prior years, general business tax credits, and foreign tax credits. Treasury does not provide an exact revenue estimate, but the figures it does mention suggest that it would be scored at around $175bn over 10 years.
  • Fossil fuel subsidies would end. The White House discussed this previously, and the Treasury estimates repeal to raise $35bn over 10 years.

  These details are very likely to change. Senate Finance Committee Chairman Wyden (D-Oreg.), along with two committee members, Sens. Brown (D-Ohio) and Warner (D-Va.), have already released their own proposal, which follows the same general outline but differs in a few specifics. More importantly, at least one centrist Democrat, Sen. Manchin (D-W. Va.) has already suggested that he would prefer to increase the rate to only 25%.

  Retroactive increases look unlikely. The Treasury release is silent on the timing of tax increases, but Goldman thinks a retroactive tax hike is very unlikely. There are two reasons the White House is proposing tax increases:

  • The first is to pay for some of the “Jobs Plan” over the next ten years. If the White House intended to cover the full cost of the bill using the 10-year window that Congress typically uses for scoring fiscal measures, there could be pressure to make the increases retroactive in order to generate enough revenue. But neither the White House nor Congressional Democrats are proposing to fully offset the cost of their spending plan over the next ten years, so an extra year of revenue is unlikely to be worth the political cost of making tax increases retroactive.
  • The second and more important reason for tax increases would be to fully offset the cost of new policies after 10 years. Assuming Democrats use the reconciliation process to circumvent Republican opposition, they will have to comply with a particular set of rules, including a prohibition on increasing the deficit after the ten-years Congress uses to consider fiscal policies (currently 2022-2031). This is less relevant for infrastructure, which would be a one-time spending boost, but would be critical to make permanent policies like expanded child care, health insurance subsidies, or the newly expanded child tax credit

  When Republicans wrote the TCJA in 2017, they allowed some policies to phase out after several years while delaying the full effect of some tax increases for several years. The effect was to produce a bill that JCT estimated to raise the deficit substantially in the first several years but not at all over the long run (i.e., after the 10-year period Congress uses). At the time, most observers imagined that a future Congress would extend the tax relief and delay the tax increases. Congressional Democrats will likely use a version of this strategy this year as well, with a net deficit increase in the near-term and a budget-neutral impact over the longer term as some tax policies become more restrictive.

  Tyler Durden
  Wed, 04/07/2021 – 21:20

• Navalny "Seriously Ill" In Prison As Supporters Mount Protest At Penal Colony
  Navalny “Seriously Ill” In Prison As Supporters Mount Protest At Penal Colony

  Anti-Kremlin activists Alexei Navalny is said to be “seriously ill” and in “quite bad condition” according to this lawyer, and has been moved to a prison sick ward at the facility where he’s serving out a two-and-a-half year sentence east of Moscow. 

  He’s being treated for an as yet unknown respiratory illness, which has prompted a COVID-19 test (the results of which are still undisclosed), but also fears that he may have contracted tuberculosis, given there appears to be an ongoing outbreak of the disease at the penal colony.

  

  Over the past weeks Navalny and his legal team have complained of harsh conditions and further that prison doctors have refused to given him proper care related to a pinched nerve that’s causing severe leg problems. Prison authorities have countered that he’s in good condition and has access to the standard level of care all inmates receive. 

  The Kremlin has meanwhile charged that Navalny and his supporters are simply trying to keep up political pressure on Russian leaders during Navalny’s confinement stemming from parole violation from an earlier embezzlement conviction. 

  On Tuesday Navalny’s lawyer Olga Mikailova told a Moscow radio station that the 44-year old dissident remains “in rather bad condition.”

  

  “He has lost a lot of weight, plus he has a strong cough and a temperature of [100.6F],” Mikhailova said. 

  “This man is seriously ill. It’s a complete outrage that the IK-2 [prison] has driven him to this condition.”

  New video has since emerged from the end of March of Navalny inside the prison. He’s shown interacting with guards while drinking what appears to be a cup of coffee. CNN among others featured the CCTV footage to highlight his deteriorating health; however others pointed out he looks better than how his legal team is presenting the situation…

  This CCTV footage is allegedly showing #Navalny ( with a cup of coffee in his hands ) in prison on the 26th March 2021- no indication that he had any problems with his leg but a lot of problems with his attitude. https://t.co/adEpwDnXqz

  — Elena Evdokimova (@elenaevdokimov7) April 2, 2021

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  At the start of this month Navalny announced he would go on hunger strike in protest medical conditions at the prison facility and to highlight the unjustness of his plight.

  Supporters have been claiming that “the Kremlin may be slowly killing Alexei Navalny in prison” following his last August ordeal in which he said Putin ordered intelligence services to poison him with nerve agent, which led to a lengthy hospital stay and recovery in Berlin, Germany before he flew back to Moscow where he was arrested for violating parole. 

  All of this have prompted European leaders to once again chime in lately:

  Alarmed by reports of Navalny’s treatment, French President Emanuel Macron and German Chancellor Angela Merkel pressed Russian President Vladimir Putin during a videoconference last week to “preserve” Navalny’s health.  

  This week it’s being reported that groups of supporters are actually showing up to the prison to protest his conditions and confinement there.

  Meanwhile, the list of Navalny’s ailments and ill-health conditions keep getting more bizarre…

  Jailed Kremlin critic Navalny loses sensation in hands: Lawyers https://t.co/6INnTMFrDK pic.twitter.com/K2rT3vWnPL

  — Al Jazeera News (@AJENews) April 7, 2021

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  Tyler Durden
  Wed, 04/07/2021 – 21:00

• Ketchup Can't Catch Up As Nationwide Shortage Fries Restaurants, Fast-Food Chains
  Ketchup Can’t Catch Up As Nationwide Shortage Fries Restaurants, Fast-Food Chains

  Ketchup packets are the next COVID-19-related nationwide shortage. 

  America’s most popular condiment, ketchup packets, are in short supply at restaurants across the country, according to The Wall Street Journal.

  The shortage materialized over the last year as public health orders forced restaurants to close or limit indoor dining, which resulted in a boom in takeout orders. There were also health and safety guidelines from the Centers for Disease Control and Prevention (CDC) that advised restaurants to “avoid using or sharing items that are reusable such as menus, condiments and any other food containers” to prevent the spread of the virus. More specifically, the CDC recommended eateries to use “single-serving condiments,” such as individual packets. 

  Numerous regulations and or advisories sent ketchup packet prices surging, up more than 13% since the beginning of the pandemic. Heinz, the largest producer who controls 70% of the US condiment market, was overwhelmed by demand, and this is how the shortage was sparked. 

  

  Heinz told the Journal it would shortly increase production by a quarter, for a total of 12 billion packets per year. America’s most widely used ketchup brand confirmed it still couldn’t keep up with orders for its ketchup packets. 

  The shortage forced larger restaurant chains to find alternatives, the report said. From mom-and-pop eateries to large chains, restaurants nationwide have been scrambling to find alternative brands to fill the void.

  “We’ve been hunting high and low,” said Chris Fuselier, operator of a small Denver-based eatery called Blake Street Tavern, who has struggled to source ketchup packets in 2021. 

  Large chains like Texas Roadhouse and Long John Silvers have had to purchase other brands of ketchup. 

  “We feel like the bottom of the barrel,” Texas Roadhouse spokesperson Travis Doster told the paper.

  Texas Roadhouse used 55 million ounces of ketchup last year and has resorted to sourcing ketchup at Costco and other wholesalers. 

  Kraft Heinz said when restaurant demand collapsed at the beginning of the pandemic, it saw a monumental shift to takeout and delivery and pivoted production lines to meet those needs. Still, demand is greater than supply. 

  Other recent shortages include flour, aluminum cans as people consume beverages at home, plastics, lumber, steel, semiconductors, sofas, fitness equipment, hot tubs, electronics, and cookware. 

  Goldman Sachs told clients last month that supply chain woes might not be resolved until 2022. 

  Tyler Durden
  Wed, 04/07/2021 – 20:40

• US Agrees To Withdraw "Remaining Combat Troops" From Iraq In Joint Talks
  US Agrees To Withdraw “Remaining Combat Troops” From Iraq In Joint Talks

  Starting weeks ago the Iraqi government began putting pressure on the Biden administration to enter a new round of talks over withdrawing all remaining US troops from the country – a process previously stalled amid tit-for-tat strikes between American forces and Iran-backed Iraqi paramilitary groups.

  The new high level talks have started this week, which is the third round stretching back into the Trump administration, but the first under the Biden presidency. As part of demands for a total US forces exit, Baghdad is seeking to assure the White House that Iran-backed militias in the country will also stand down. However, it’s quite another question whether Baghdad will be able to deliver, and Washington has long used this as a prime excuse for staying with no firm exit date. 

  

  “Iraq’s prime minister asked Iran’s leaders to rein in Iran-backed militias in Iraq and in a strongly worded message to Tehran, suggested he would confront the factions, two Iraqi officials said Wednesday,” the Associated Press reports. 

  Already a major agreement has been reportedly reached during the virtual talks involving Secretary of State Anthony Blinken and Under Secretary of State for Political Affairs David Hale representing the US side in the remote meeting with their Iraqi counterparts. 

  The AFP is reporting Wednesday afternoon that the US has agreed to move “remaining combat troops” out of Iraq.

  Just in: Biden admin indicates that 2,500 US troops will eventually leave Iraq in joint stmt after strategic dialogue with Baghdad. Both sides confirmed US-led mission now focused on training & advising, but timing of US redeployment will be established in technical talks. pic.twitter.com/jXE6YaQydT

  — Jack Detsch (@JackDetsch) April 7, 2021

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  However, the timing of this full pullout will continue to be negotiated as part of the ongoing talks. 

  The joint statement reads in part: “…The parties confirmed that the mission of US and Coalition forces has now transitioned to one focused on training and advisory tasks, thereby allowing for the redeployment of any remaining combat forces from Iraq, with the timing to be established in upcoming technical talk.”

  Will the some few thousand troops remaining in Iraq simply be “redeployed” to neighboring Syria where the US occupation of the country’s northeast controversially endures with no end in sight?

  If so this will do nothing to de-escalate the continuing proxy war with Iran in the region, which would likely only see American forces eventually redeploy once again inside Iraq as Iran tensions continue to spiral. Of course, much of this also depends on the fate of nuclear talks now being held in Vienna over restoration of the JCPOA, as well as the “wild card” that is Israel – and its attempts to sabotage any path back to US participation in the deal. 

  Tyler Durden
  Wed, 04/07/2021 – 20:20

• "It's A Biological Fukushima" – Brazil On Track To Pass US In COVID Deaths
  “It’s A Biological Fukushima” – Brazil On Track To Pass US In COVID Deaths

  A couple of months ago, Brazil surpassed the US as the country reporting the most new COVID cases per day. Now, the stricken Latin American country is reporting as many as 4K deaths per day (for context, the US reported fewer than 500 yesterday).

  The wide disparity in deaths between the US and Brazil has been attributed to mutant strains, some of which were first identified in Brazil, which researchers believe have lead to harsher symptoms, especially for younger people. Anyway, as the odds of Brazil overtaking the US in terms of total deaths grow (Brazil now has nearly 340K deaths compared with 555K in the US), its health-care system has been pushed to the breaking point.

  When adjusted for population, Brazil looks set to surpass the US by the end of the week.

  One Brazilian doctor suggested that Brazil’s outbreak seems like it’s powered by a nuclear reactor, according to Reuters. On Tuesday, the Health Ministry reported another 4,195 COVID-19 deaths in the past 24 hours, well above the country’s prior single-day record.

  “It’s a nuclear reactor that has set off a chain reaction and is out of control. It’s a biological Fukushima,” said Miguel Nicolelis, a Brazilian doctor and professor at Duke University, who is closely tracking the virus.

  Brazil has set daily death records every week since late February, according to Reuters, which blamed the mutants and the country’s “meager” social distancing guidelines. A team of researchers, citing a widely used forecasting metric, quoted by the newswire said Brazil could reach 563K total deaths by July 1.

  Nicolelis and Christovam Barcellos, a researcher at Brazilian medical institute Fiocruz, are separately forecasting that Brazil could surpass the United States in both overall deaths and the record for average deaths per day.

  As soon as next week, Brazil may break the record U.S. seven-day average for COVID-19 deaths, according to a model by the influential Institute for Health Metrics and Evaluation (IHME) at the University of Washington. The U.S. average for daily deaths peaked at 3,285 in January.

  The IHME forecast does not currently extend beyond July 1, when it projects Brazil could reach 563,000 deaths, compared with 609,000 total U.S. fatalities expected by then.

  Despite the scourge of the virus, and the fact that Brazil is presently contributing one in every four deaths to the daily global tally, Brazilian officials insist they could soon return the country to some semblance of normal, even as President Jair Bolsonaro’s reluctance to secure supplies of foreign-made vaccines, and his resistance to social distancing efforts, have been blamed for exacerbating the crisis. To be sure, Bolsonaro has shifted his approach in response to the surge in deaths, shaking up his cabinet and imploring Brazilians to get vaccinated.

  

  But will it be enough? Only time will tell. While Brazil isn’t the only major emerging economy struggling with a surge in case (India is reporting the most new daily cases since last fall), Brazil is one of the few countries still reporting such large numbers of daily fatalities.

  Tyler Durden
  Wed, 04/07/2021 – 20:00

• JPM: It Appears There Is A Worker Shortage
  JPM: It Appears There Is A Worker Shortage

  Yesterday’s JOLTS Job Openings printed 7.37mm vs. 6.90mm survey and 7.10mm prior.

  

  These February numbers preceded March’s large jobs gains. Combine this with reports from Bloomberg and Reuters, and – as JPMorgan writes today – “it appears that there is a worker shortage.”

  Irrespective of the cause (worker flight due to joblessness, or “robust” stimulus keeping lazy workers on the sidelines and in front of their TV, which as we will show shortly, is indeed the case) JPM then notes that “businesses are rapidly raising wages to attract workers; but most of where this phenomenon is seen is for lower-income workers within the Service segment.“

  

  As we saw last April with the combination of $600/week federal employment and $1,200/adult and $500/child stimulus checks, which had the effect of bringing the bottom 3-4 deciles income brackets toward the median income, the impact on spending was significant.

  While, these wage increases will not have as dramatic an impact as last year’s fiscal stimulus  the impact on spending should be material. Low-income workers have a higher marginal propensity to consume with a lower savings rate. This may be part of why Staples have outperformed recently; but, more generally, should continue to add support for the Consumer-led rally that JPM believes we will witness throughout 2021.

  Tyler Durden
  Wed, 04/07/2021 – 19:40

• Joe Biden's Bait-And-Switch Presidency
  Joe Biden’s Bait-And-Switch Presidency

  Authored by Charles Lipson via RealClearPolitics.com,

  Joe Biden was elected as a moderate-left Democrat, but he is not governing as one. He pledged repeatedly to work across party lines, but he is ramming through the biggest, most expensive progressive agenda in American history without any Republican votes. He is almost certain to try it again with his next two spending proposals, the largest since Lyndon Johnson’s Great Society programs. As the White House pushes these mammoth bills with only Democratic votes, Americans are realizing they got a very different president from the one they bargained for, the one they were promised during the campaign. What’s unclear is whether they will recoil from this new reality.

  

  Throughout the summer and fall, Biden ran as a unifier who could work across party lines. He wanted to do so, he said, and he reiterated that comforting message as late as his inaugural address. It was probably his most important policy message, and Americans believed it. They remembered his years in the Senate and his primary victory over socialist Bernie Sanders.

  The reality has been very different from the promises. Biden’s pledge of bipartisanship and unity turned out to be a cynical sleight-of-hand, raw partisanship masquerading as comity. In the general election, it worked well enough to defeat a divisive incumbent, whose impulsiveness, rancor, and personal attacks repulsed many Americans. Now that the election is over, so is the message. Despite razor-thin Democratic majorities on Capitol Hill, Biden is determined to pass an ambitious agenda with no support from Republicans.

  The clearest indication of Biden’s bait and switch came with the stimulus bill. Before signaling his final position, the president reached out to Republicans, who proposed a $600 billion package, focused on immediate needs plus some fiscal stimulus.

  The bipartisan meeting was all for show. Biden quickly rejected the Republicans’ proposal, made no effort to meet with them again or negotiate any compromise, and chose instead to push for a bill three times as large, much of it to be spent long after the COVID crisis has passed. The extra $1.3 trillion did not include the infrastructure and other programs he now considers essential.

  Those are coming in additional bills with huge price tags and associated tax hikes.

  

  President Biden, Speaker Nancy Pelosi, and Senate Majority Leader Chuck Schumer knew their mammoth COVID bill would face unified Republican resistance. No matter. They pushed it through anyway, using the Senate’s arcane rule for budget reconciliation. They went big and unilateral, even though Republicans were eager to sign off on a large relief bill that would have commanded a Senate supermajority. This week, we learned Schumer has quietly asked the Senate parliamentarian if he can use the same 50-vote procedure for Biden’s latest spending bills, hoping to avoid any Republican filibuster.

  Will this ‘ram-it-through’ mentality characterize the remainder of Biden’s first two years? You don’t have to visit the Oracle at Delphi for an answer. The clearest indication is that the president, who ran for the Oval Office as a man of the Senate, now wants to smash long-standing Senate rules so he can pass the rest of his legislative agenda without Republican votes.

  The filibuster rules, Biden says, are nothing more than “relics of the Jim Crow era.” He’s relying on the distant memory that, more than half a century ago, Southern senators used the filibuster to oppose desegregation. Yet the huge civil rights and voting rights bills of the mid-1960s still passed. What’s more, they passed with enough debate and votes to buttress the statutes with a national political consensus.

  Since then, both parties have used the filibuster to oppose all sorts of bills, most of them far removed from race. The Democrats used the technique repeatedly last year, when they were in the minority. They used it, for instance, to stop a police reform bill proposed by Tim Scott, an African American representing the state that fired the first shots in the Civil War. But that’s only one example among many. When Joe Biden and Barack Obama served in the Senate, they not only used the filibuster, they explicitly defended it. So did Chuck Schumer. Were they defending Jim Crow? No. They were defending the historic role of the Senate, which grants some power to the minority party.

  Now, the same Democrats want to overturn those rules, and they are cynically deploying the sensitive issue of race to do it. But race is not the real issue here. It is whether the Senate wants to afford significant rights to the minority party, as it has for over two centuries, forcing either compromise solutions or stalemate. Put differently, do senators really want to turn their chamber into something like the House, where the minority is powerless and debate is meaningless? Once they do that, they can never turn back.

  Behind Biden’s choice to go big, progressive, and unilateral lie three basic calculations.

  • The first is that, if history is any guide, Democrats are likely to lose the House in 2022. The incumbent president’s party almost always suffers losses, often big ones, and the Democrats don’t have any seats to spare. That means Biden has only two years to pass his aggressive agenda.

  • Second is his judgment that voters really like big government spending. Recent polling suggests they do, for now.  The question is whether that support will last and whether it will outweigh voters’ concerns about tax hikes to pay for those programs.

  • Third, Biden is betting that voters in 2022 and 2024 will care a lot more about today’s practical results than about yesterday’s broken campaign promises. That’s probably true. The White House also knows it can blame Republicans for any resistance to its agenda. It has a bully pulpit and a compliant media to help.

  The result is a president determined to pass everything on the Democrats’ all-you-can-eat menu, even if he has to do it with strict party-line votes. As a candidate, Joe Biden promised voters a center-left agenda and bipartisanship. As a president, he is giving them neither. Biden’s deception is based on the oldest marketing technique in the book: bait and switch.

  Tyler Durden
  Wed, 04/07/2021 – 19:20

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• "A Great Step Forward" – EU Praises Yellen's Global Minimum Tax, Says Deal Could Come Later This Year
  “A Great Step Forward” – EU Praises Yellen’s Global Minimum Tax, Says Deal Could Come Later This Year

  Few, if any, industries are going to love the higher taxes they will soon face in the US and abroad thanks to President Biden and his American Jobs Plan. But big tech has good reason to be particularly unnerved by Treasury Secretary Janet Yellen’s calls for a global minimum corporate tax rate.

  Though it didn’t name its source, Bloomberg reported Tuesday that the EU plans to insist that its long-awaited digital tax on the US tech giants – which Washington (under Trump) had protested – be part of the same package as the global minimum corporate tax in order to secure a deal.

  

  A bevy of European officials have praised Yellen’s call for nations to work together to set a new tax floor, a call that was made during a speech to the Chicago Council on Global Affairs yesterday.

  Paolo Gentiloni, the European Commission’s point man on the economy, responded to Yellen’s plea for G-20 economies to agree on the minimum tax to prevent a “race to the bottom” with praise, saying there could be a breakthrough agreement by the summer.

  He wasn’t the only European official to endorse the idea. German Finance Minister Olaf Scholz also welcomed the idea, calling the minimum corporate tax “a great step forward” in the battle to stem the erosion of government revenues. “The support of the USA gives this initiative a strong tailwind,” Scholz told reporters, adding that he hoped a deal could be achieved this year, according to AFP.

  “It’s very good news,” Gentiloni said in an interview with Bloomberg Television’s Francine Lacqua where he welcomed “this new multilateral atmosphere with the new US administration and the strong possibility of cooperation in the global arena. One of the main results could be finding agreements in global taxation.”

  Finance ministers of the G-20 group of large economies are expected to discuss the proposal during a virtual meeting on Wednesday, where Italy will preside as the current occupant of the G-20’s rotating presidency. 

  A Treasury official told reporters the G-20 goal is to have a proposal on the global minimum tax by July, and President Joe Biden’s administration could if needed change its legislation to bring the US minimum tax into line with the international plan. A G-20 agreement would, in turn, increase the odds that members of the broader OECD agree to the minimum.

  European Commission spokesman Daniel Ferrie said the bloc called “on all global partners to remain engaged in these discussions and to continue work without delay.”

  But if we have learned anything from the past few years, it’s that just because Brussels endorses a plan, doesn’t mean all of the 27 remaining EU member states will go along with it. And as member states prepare to tap the massive EU COVID rescue fund, some might chafe at Brussels’ removing one pathway toward stoking growth and job creation.

  Of course, the EU isn’t the only transnational organization exclaiming the virtues of higher taxes. The IMF has been pushing predistributive and redistributive policies even before the pandemic, though it has since doubled down, as Mike Shedlock explains.

  

  in the meantime, analysts will need to factor in greater odds of a new global tax regime that could arrive before the end of the year.

  Tyler Durden
  Wed, 04/07/2021 – 02:45

• Fallout From Greensill Collapse Splatters British Government, Leaves Taxpayers With Big Losses
  Fallout From Greensill Collapse Splatters British Government, Leaves Taxpayers With Big Losses

  Authored by Nick Corbishley via NakedCapitalism.com,

  Downing Street’s dodgy dealings with Citigroup and Greensill show just how far the British government is willing to go to line the pockets of banks and other financial firms while bleeding taxpayers dry. 

  

  The collapse of UK-based supply chain finance firm Greensill Capital continues to reverberate. In Germany the private banking association has paid out around €2.7 billion to more than 20,500 Greensill Bank customers as part of its deposit guarantee scheme after the bank collapsed in early March. But the deposits of institutional investors such as other financial institutions, investment firms, and local authorities are not covered. Fifty municipalities are believed to be nursing losses of at least €500 million.

  Greensill’s biggest source of funds, Credit Suisse, has seen its share price plunge by almost a quarter. This is due not only to the fallout from Greensill’s collapse but also the impact of losses at its prime brokerage division caused by the stricken U.S. hedge fund Archegos, which are expected to reach €4 billion. The lender has warned of “considerable uncertainty” regarding the valuation of its supply chain finance fund. More than $5 billion of the roughly $10 billion invested in the fund remains outstanding.

  Credit Suisse had assured clients in marketing documents that the debt in the supply chain fund was “low risk”. In one factsheet, it also said: “The underlying credit risk of the notes is fully insured by highly rated insurance companies.” At the beginning of March, that turned out not to be true. Some clients whose money remains trapped in the fund have threatened to sue.

  Greensill’s biggest client, Anglo-Indian steel magnate Sanjeev Gupta, is on the verge of bankruptcy. Gupta’s GFG Alliance reportedly owes Greensill more than €3 billion. It began defaulting on its obligations after Greensill stopped lending to the group at the beginning of March. At the end of March Gupta requested a £170 million emergency loan from the UK government, which was duly rejected. Greensill’s administrator, Grant Thornton, has been unable to verify invoices underpinning some of the loans to Gupta. Companies listed on the documents denied ever having done business with the metals magnate.

  Now the fallout is beginning to splatter the British government, which invited Greensill to participate in its Coronavirus Large Business Interruption Loan Scheme (CLBILS). This is despite the fact the company: a) wasn’t a bank; and b) was quite clearly already in deep financial trouble. Greensill’s participation in CLBILS allowed it to extend even more loans, this time government backed, to Gupta’s empire. Taxpayers will now probably end up holding the bag for those loans.

  Special Treatment, Frantic Lobbying

  Greensill Capital was the only non-bank financial firm to administer the emergency coronavirus loan schemes. The Treasury has admitted that Greensill was exempt from the capital adequacy and stress tests that would safeguard the public from risk when using other lenders. The apparent reason for this special treatment was that former UK Prime Minister David Cameron, who had joined Greensill as an advisor in 2018, was frantically lobbying Chancellor of Exhchequer Rishi Sunak to hand government loans to the embattled financial firm even as it spiralled toward bankruptcy.

  Cameron is believed to have held share options in Greensill Capital worth tens of millions of pounds. Now they’re worth nothing.

  Cameron’s ties with Greensill’s eponymous founder, Lex Greensill, date all the way back to 2011, when Cameron’s then-cabinet secretary, Jeremy Heywood, brought Greensill — then the head of Citi’s supply chain finance division — into 10 Downing Street as a special advisor. Greensill was still on Citi’s payroll when he joined the government. As an expose in The Sunday Times reveals, his brief was to convince ministers and senior civil servants to hire Citi to extend early payment to many of the government’s biggest suppliers.

  Citigroup’s pitch was to pay the state’s suppliers in sectors where it apparently paid late, such as pharmacists awaiting NHS prescription fees.

  [Maurice Thompson, the British boss of Citigroup who would later become chairman of Greensill Capital’s supervisory board] claimed this would help business owners — offering them an alternative to expensive loans — and the government. It would also be a smart investment for Citi: paying tens of billions of pounds in invoices on behalf of the most reliable of clients, the state, and taking a cut along the way.

  This was not about finding a solution to a government problem, but rather a government problem that would fit Citi’s — and later Greensill’s — particular solution. The plan met stiff opposition in certain quarters. Given that government can borrow at ultra-low interest rates, some began asking why it needed to bring in Citigroup, or any investment bank for that matter, to pay its bills. Surely it made more sense to find a way to expedite its payments to suppliers rather than pay an intermediary to do so on its behalf.

  Citi aimed to start small, by paying pharmacists that supplied the NHS, but its ambition was sweeping. It sought to roll out supply chain finance across the UK’s public sector, “paying invoices covering GPs, dentists, opticians, physiotherapists, the Ministry of Defence, Her Majesty’s Revenue and Customs (HMRC), Royal Mail and even the BBC.”

  Dodgy Dealings

  A group of civil servants tried to thwart the plan. But Greensill enjoyed the backing of Heywood, Britain’s “most powerful civil servant” at the time. Heywood gave Greensill his own team and access to any department he wished to address. He also made him a senior advisor and crown representative to Her Majesty’s Government on supply chain finance. 

  What really irked some civil servants was the ambiguity of Greensill’s position. After Greensill had left Citibank, months after joining Downing Street, and set up his own supply chain finance firm (Greensill Capital) “it was unclear whose interests he was advancing: his former employer’s, his own firm’s or, as one would expect, the taxpayer’s.” Even more dubious was the way in which the government assigned projects to Citi (and later Greensill Capital), reports the Sunday Times.

  At the time the pharmacy scheme was announced, there was no detail about who would benefit from it. The government never formally announced or published details of the policy.

  It is only thanks to the legal small print sent to pharmacists that details have emerged. For the first five years the scheme was operated by Citigroup. Then it was awarded to Greensill Capital, which ran it until the company’s collapse last month. The scheme has since been nationalised.

  The precise circumstances in which the work was awarded to Citigroup remain unclear. The law states that unless the government is procuring services in an emergency, such as buying PPE during a pandemic or a helicopter in the middle of a war, it must create open and fair competition for companies that hope to deliver them.

  However, last night the government admitted it did not sign a contract for Citigroup’s services. Nor did it create an open competition so that other banks could bid for the work. Despite the warnings of Peilow, it was handed out directly to Citi via an existing and secretive relationship between the bank and the Government Banking Service.

  This chimes with an email sent by Greensill on November 12, 2012. He wrote: “It is important to note that there is no formal contract with Citibank with respect to the provision of supply chain finance.” He added: “This situation is entirely normal in the private sector as the bank is providing financing to our suppliers, not us.”

  What is not normal is that a Wall Street bank was allowed to handle billions of pounds of NHS cash without a contract. Even by the government’s own standards it was exceptional: in 2018 it created a formal procurement process before handing the scheme to Greensill.

  The evidence points to a stark conclusion: in the face of staunch opposition from civil servants, the government secretly gave a scheme to Citigroup, which came up with the idea, after its former head of supply chain finance, Greensill, drove the policy through Whitehall.

  The only point of this scheme was to create easy money for financiers while bleeding taxpayers dry. As such, this scandal is not just about the losses taxpayers will have to bear as a result of the government’s underwriting of Greensill’s emergency loans to Gupta; it’s about the money that’s already been squandered by the government’s wholly unnecessary use of supply chain finance in the first place. 

  It’s all eerily reminiscent of the disastrous Private Finance Initiative (PFI). Over decades successive Tory and Labour governments signed off on hundreds of debt-financed projects for which the rate of interest could be as much as 2 to 3.75 percentage points higher than the cost of government borrowing. It was a giant cash cow for the government’s corporate and banking partners. In 2018 it was estimated that the government would end up paying private companies £199 billion, including interest, between April 2017 until the 2040s for existing deals, in addition to some £110 billion already paid — for 700 projects worth around £60 billion!

  The senior politicians and civil servants get rewarded for their loyalty later down the line. The civil servant in charge of all the government’s commercial contracts during Cameron’s administration, Bill Crothers, became a director at Greensill in 2016, a year after leaving government. In 2017 Lex Greensill was awarded the  CBE for services to the British economy in Queen Elizabeth II’s 2017 Birthday Honours. A year later his company won a juicy government contract. 

  Happy Camping With Bin Salman

  As for Cameron himself, he joined Greensill as a a special adviser in 2018, two years after leaving politics. In February 2020 he and Lex Greensill went on a camping holiday with Saudi Crown Prince Mohammed bin Salman, little more than a year after bin Salman had arranged the murder of Washington Post and Middle East Eye columnist Jamal Khashoggi. The holiday appears to have reaped dividends. In June 2020, a senior Greensill Capital executive spoke publicly about the company’s partnership with the Saudi Public Investment Fund, describing it as “part of the family” of the sovereign wealth fund.

  According to most reports Cameron did nothing wrong. Last week he was cleared of breaking lobbying rules after it was concluded that as an employee of Greensill, he was not required to declare himself on the register of consultant lobbyists. But his already tarnished reputation is in tatters and he could face an investigation. Cameron himself refuses to even respond to the lobbying allegations. His ear-splitting silence speaks volumes about the state of British politics today.

  Tyler Durden
  Wed, 04/07/2021 – 02:00

• Goldman Bought $100M Of Deliveroo Shares During "Worst IPO Ever"…And Still Made Money
  Goldman Bought $100M Of Deliveroo Shares During “Worst IPO Ever”…And Still Made Money

  Goldman Sachs managed to avoid billions of dollars in potential losses from the implosion of highly levered hedge fund Archegos Capital Management by breaking ranks with other syndicate banks to dump large blocks of shares representing Archegos’s exposure to a coterie of tech and media names. When the dust settled, the bank told shareholders any losses would be insignificant, while Credit Suisse, the bank with perhaps the biggest exposure, said Tuesday it has booked a nearly $5 billion loss.

  

  But it looks like Archegos’ collapse wasn’t the only disaster to rattle the Vampire Squid. As we previously noted, the bank served as one of the lead underwriters and stabilization agents for Deliveroo’s abysmal London IPO, which has been criticized as the worst IPO in London’s history for the massive drop the shares suffered during their market debut (sliding 31% after pricing at the bottom of their range).

  But amazingly, while 70K retail traders got burned in the IPO after Deliveroo allowed customers and employees to invest in the early allocations via a platform called PrimaryBid (all told, they invested £50 million), Goldman managed to walk away with a modest profit. According to the FT, the Goldman bout about £75 million in Deliveroo on the open market to help prop up the price. That amount was equal to roughly 25% of the shares traded during the first two days of trading last week, according to Bloomberg data. Even though the shares had shed nearly one-third of their value, the FT said Goldman likely booked a profit on the trade, which was tantamount to closing a short position after the bank sold its over-allotment – though some of these profits will be surrendered to Deliveroo.

  So far, Goldman has used roughly half of its overallotment, per the FT.

  The £75m worth of purchases by Goldman Sachs, when used in combination with the “overallotment” reserved for stabilising the IPO, mean the bank should have booked a profit from Deliveroo’s declining share price.

  This is because brokers sell more stock than their allotments at the issue price and then cover their orders either by exercising the overallotment option or, if the shares fall, by buying in the market at below the flotation price. The difference between the 390p issue price and whatever Goldman Sachs paid in the market equates to the profit booked on the trade.

  But these profits will be surrendered to Deliveroo, as part of an agreement between the two companies which was not disclosed in the company’s IPO prospectus, people with direct knowledge of the matter added.

  Goldman Sachs and Deliveroo declined to comment.

  Shares remain well below their IPO price as of Tuesday’s close.

  

  And bankers are bracing for more potential downside as the 70K retail investors mentioned above can start cashing out of their positions tomorrow.

  Advisers working on the deal received roughly £49M in fees from Deliveroo. While Goldman Sachs is the sole stabilisation agent on the deal, it was in charge of the listing process alongside JPMorgan, while the other banks on the deal include Bank of America, Citigroup, Jefferies and Numis. Bankers have sought to blame pernicious short-sellers and concerns about future labor-regulation regarding gig economy workers, as well as Deliveroo’s dual-class share structure (which gives CEO Will Shu control of the boar), for the stock’s troubles. Some also blamed timing, saying the firm debuted too late to catch the wave of spectacular tech offerings last year, but too early for expected changes in British securities laws to allow companies with the dual-class structure to be included as part of the FTSE 100, the UK’s premier index.

  But now, the FT has reported that Goldman, one of the lead underwriters responsible for managing the IPO, also took a massive short position during the company’s debut.

  Bankers are worried that the IPO could dissuade other British tech firms from listing in London, perhaps pushing them to choose the US – or Amsterdam (now Europe’s leading market for IPOs). When bankers look back, how much of the blame for the botched IPO will rest with Goldman?

  Tyler Durden
  Wed, 04/07/2021 – 01:00

• Is The Volunteer Military Too Expensive? Or Is It Global Intervention That's Too Expensive
  Is The Volunteer Military Too Expensive? Or Is It Global Intervention That’s Too Expensive

  Authored by Doug Bandow via AntiWar.com,

  The Napoleonic Wars consumed the lives of between 2.5 million and 3.5 million soldiers, most unwilling draftees. Although defeated, discredited, and exiled after years of brutal conflict, the self-anointed emperor responsible for those deaths today is honored – lionized, actually – in Paris. His tomb is located in the Hotel Les Invalides surrounded by commemorations of his many great but costly victories.

  Aggressive war and mass slaughter obviously look better through the mists of time. And conscription, which Napoleon used to terrorize a continent, is still routinely employed by nations today.

  

  Today millions of people can be dispatched by a few bombs launched from half the world away. A couple people sitting in a missile silo can unleash hell and more by turning a couple keys. However, the tragic propensity of mankind to engage in war obviously goes back to humanity’s beginning. The horror and cruelty of ancient conflict is almost unimaginable. It was mass killing at its most personal. Massacres required many hands and took much time and effort.

  As political control fractured European warfare eventually turned into the far more restricted game of kings. Unless you were unlucky enough to live near a battlefield, you probably wouldn’t be bothered. Indeed, you might not even notice that a war was going on. And reliance on mercenaries helped keep casualties down. They wasted neither their time nor effort, and certainly not their lives, on silly notions like patriotism and loyalty. Protracted conflicts could still be costly, but the numbers of combatants involved look shockingly small compared to modern wars.

  However, the French revolutionary wars and rise of Napoleon moved the supposedly civilized world back toward the older, more brutal era. This change also heralded a shift to militaries that were both professional and mass. Which required a universal draft.

  As the emperor Napoleon carpeted Europe with corpses to Moscow and back, France filled the ranks of La Grande Armee through conscription, The other great continental powers, most notably the kingdoms of Russia, Prussia, and Austria, also drafted men into military service to meet France on the battlefield. A century later the greatest war machines – Wilhelmine Germany, Czarist Russia, French Republic, Austro-Hungary, and even the liberal democracies of America and United Kingdom – fielded considerable armies through a modern levee en masse. The draft, reaching ever further into diminishing manpower pools, was the only way for the combatants’ armies to replace the massive casualties that ravaged an entire generation of young men.

  Government leaders kept the horror of war from the public while demonizing the enemy. The casualty lists were horrible enough. To admit the nature of the fight, raising doubt whether any victory could be worth the price, risked triggering popular revulsion which might force the end of the war. And that, political leaders across countries, ideologies, and parties agreed, could not be allowed to happen.

  A generation later came an even more horrific conflict. In it even the UK and U.S. began the war with conscription, as did the other major combatants. It is impossible to imagine the extraordinary carnage of the Eastern Front if Germany and the Soviet Union did not have the power to draft. That authority was essential for war-making. The world’s worst conflict could not have been prosecuted without an open human spigot for the military.

  After just a year lapse in conscription authority at that war’s end, Washington imposed a “peacetime” draft during the Cold War. With conscription the US fought two more large-scale wars, in Korea and Vietnam. In them America’s peak troop strength was 327,000 and 536,000, respectively. Only conscription made these unpopular wars possible. And allowed them to continue for years, despite rising opposition. War is the health of the state, declared Randolph Bourne; conscription is the health of war.

  

  You will find more infographics at Statista

  And by 2017…

  

  The Vietnam War effectively ended the draft. As Richard Nixon drew down the US military presence, the abundant manpower generated by conscription became unnecessary. He also figured that ending the detested annual lottery ritual would defuse political opposition. The All-Volunteer Force was inaugurated in 1973.

  The AVF survived a rocky beginning, bolstered by warm support from the Reagan administration. A couple decades later under George W. Bush the volunteer military hit an even rougher patch, during which the government over-extended both active and reserve forces in an unnecessary and unpopular war. The armed services – and army in particular – bent, almost breaking as many potential enlistees said no to both active and reserve service, and thus ultimately to war. The volunteer military, in sharp contrast to conscription, allowed people to essentially shut down the system by refusing to join.

  The subsequent drawdown in endless wars eased pressure on the AVF. Yet the propensity to serve in the armed services fell along with the share of the population fit to serve, forcing the Pentagon to lower personnel standards and increase enlistment incentives. Which spurred complaints that voluntarism is no longer sustainable.

  Among the arguments put forth at the AVF Forum’s conference last week against voluntarism is that it is too expensive. Not that the military per se is too expensive – that its size is too big, procurement is too inefficient, deployment is too expansive, bases are too many, commitments are too imperial, or use is too promiscuous. But the recruitment process costs too much. Rather than rely on a slightly more modern and civilized process of impressment, by which the British navy simply grabbed sailors off seaport streets, the US military must induce young men and women to sign up and turn their lives over to Uncle Sam for a number of years. Government must make the case that military service is good for the individual and nation.

  Doing so is inconvenient and costly, but that is a benefit, not a cost, for America. There is no bigger Big Government program than war. There is no greater power in the state than to send the nation into war and its people into combat. There is no more draconian control over an otherwise free man’s or woman’s life than the military. There is no more dangerous occupation than the wartime armed services. So thrusting America into such horror and tragedy should be neither easy nor automatic.

  However, is today’s AVF no longer capable of providing America’s armed forces? At the conference retired Maj. Gen. Dennis Laich worried that America might get to the point where…

  “we just won’t be able to afford it. There just won’t be enough money to go around. When you have a $26 trillion national debt and the Defense Department makes up half of the discretionary spending in the federal government.”

  America is a fiscal wreck. Noted the Congressional Budget Office early last month, before passage of the administration’s $1.9 trillion supposed COVID-19 spending extravaganza, filled with booty unrelated to the pandemic: “By the end of 2021, federal debt held by the public is projected to equal 102 percent of GDP. Debt would reach 107 percent of GDP (surpassing its historical high) in 2031 and would almost double to 202 percent of GDP by 2051. Debt that is high and rising as a percentage of GDP boosts federal and private borrowing costs, slows the growth of economic output, and increases interest payments abroad. A growing debt burden could increase the risk of a fiscal crisis and higher inflation as well as undermine confidence in the US dollar, making it more costly to finance public and private activity in international markets.”

  Moreover, the Biden administration is pushing a massive infrastructure program, with abundant outlays to enrich other political interests. Some of that spending might be offset by higher taxes, but Congress is unlikely to impose substantial fiscal pain on constituents and supporters. Whatever legislation passes will further inflate the debt burden, likely significantly over time.

  At a time when someone could make “Politicians Gone Wild” videos about the Washington, D.C. budget process, conscription should not be seen as a money-saver let alone a budget miracle. First, conscription would only allow the Pentagon to cut wages for new accessions, of whom there were 155,000 last year. The savings would accrue for just a couple years, since draftees typically serve shorter terms than volunteers. Conscription advocates never suggest slashing the (higher) pay for NCOs, the backbone of the American armed services, and officers – let alone the 653 general officers who top the manpower charts.

  Second, a draft would not cut costs. Rather, it would shift costs by forcing people to work at lower wages. Indeed, coercion increases total social costs, forcing many people to serve who don’t want to and preventing some from joining who wish to – available spots having been filled by conscripts. Moreover, it is morally grotesque for a wealthy society to take advantage of the politically weak to procure cheap labor. Why should the successful and satisfied be able to force the young to bear the disproportionate expense of defending the nation, which benefits everyone?

  Third, conscription is expensive. Enforcement machinery is necessary. Evasion activity is rife. Perverse incentives are inherent. The military would suffer dramatically from the change in incentives, moving from a system in which all those entering want to be in uniform to a situation in which most of them want to be somewhere, anywhere else. In operation, the armed forces would pay dearly for whatever budget savings occurred.

  Fourth, there is no reason that the military alone among federal programs should have to resort to extreme measures to meet expenses. The federal government spent $4.48 trillion in 2019, the last year without massive COVID-19 emergency funding. Is the Pentagon really the lowest priority program, likely to be placed at the rear as Uncle Sam doles out future funding? Is there nothing at the Department of Commerce, Department of Housing and Urban Development, Department of Education, or Department of the Interior which could be trimmed first if the federal government found itself short of cash?

  The obvious answer to a cash crunch would be to cut low priority programs, of which the federal government is full. However, if that is too painful politically, why not apply Laich’s proposed solution of conscription to civilian programs? Why not draft federal civilian workers?

  For example, the Department of Defense employs about 700,000 civilians. Conscript them if the federal government must save money. Pay them a salary comparable to that what military draftees would receive. Do the same for the Department of Veterans Affairs, which has nearly 400,000 workers.

  There is no reason to stop at military-related agencies. The Postal Service employs roughly a half million employees. Why not institute a postal draft, cutting pay for them? Homeland Security has nearly 200,000 on staff. The Justice Department and Department of Agriculture employ around 100,000. Conscript them all! That should save a lot of cash. Of course, doing so wouldn’t be fair, but neither would be a military draft. If the government is going to force someone into service, it would be better to conscript those whose lives would not be at risk. This could be viewed as a form of mandatory “national service” so beloved of social engineers.

  Laich’s concern that Washington won’t put DOD at the front of the very long federal soup line suggests that he recognizes a deeper problem. If the Pentagon stops protecting the nation it no longer deserves preferential treatment over, say, the Departments of Agriculture and Energy. And foolish wars of choice like Iraq and unnecessary welfare for rich friends like NATO do not make Americans safer.

  US military budget requirements are not immutable, set by the stars or other cosmic phenomena. Rather, defense outlays are the price of America’s foreign policy. The latter will, or at least should, vary over time based on changing circumstance. However, as long as Washington implements a frankly imperial foreign policy the cost will be exceedingly high.

  Defending the US is relatively easy, with vast oceans east and west and pacific neighbors north and south. In contrast, most of what the Department of Defense does is offensive, designed to variously coerce and protect other nations. Sometimes doing so is necessary for America’s defense, but not nearly as often as claimed by Washington.

  The forever wars make no sense. The Iraq invasion was an enormous blunder and two decades of nation-building in Afghanistan have been a terrible waste; both were humanitarian catastrophes. The US should spurn, not join, foreign civil wars like Libya and Syria.

  South Korea, which enjoys an economy more than 50 times as large and population twice as that of the North, needs no American garrison. NATO lost its raison d’etre with the collapse of the Soviet Union and dissolution of the Warsaw Pact. Europe vastly outranges Moscow in economic wealth and population size yet prefers to rely on US defense guarantees rather than invest in its own defense. Reducing unnecessary US military commitments would allow a concomitant reduction in force structure.

  Washington’s fiscal irresponsibility is beyond description. Government should set priorities. Congress should spend only for serious purposes and pay for what it spends. Which requires substantial cuts in wasteful programs throughout government.

  At the top of any priority list should be those who take on the always difficult and sometimes dangerous job of serving in the armed services and defending America. Even so, significant budget cuts should be made to the Pentagon as well. The US should drop needless, expensive military commitments. End subsidies for prosperous, populous allies. And stop foolish, counterproductive social engineering abroad, especially fruitless nation-building projects.

  Other important military issues would remain. The AVF Forum rightly worries about fundamental issues including combat effectiveness, citizenship values, and social fairness. The subjects are serious and complex. The solutions won’t come easy. But conscription is not one.

  Uncle Sam has a spending problem. A big one. However, the major challenge is not affording the cost of military manpower. The federal government does far too much and does it far too expensively. The same goes for the military. The solution is for Washington to do less, and to do what it does less expensively. Not to draft young men and women to fight more needless endless wars.

  Tyler Durden
  Tue, 04/06/2021 – 23:45

• Uber Pays Blind Woman $1.1 Million After Stranding Her 14 Times
  Uber Pays Blind Woman $1.1 Million After Stranding Her 14 Times

  Uber is shelling out $1.1 million to a woman that says she missed work, birthdays, Christmas Eve church services and was left in the dark and in the rain because drivers refused to pick up her and her dog on more than a dozen occasions. 

  The customer, Lisa Irving, won against Uber in arbitration recently – about 5 years after the ride-sharing company had already finalized a settlement from being sued in 2014 for discriminating against blind people and their guide dogs, The Verge reported this weekend. 

  That 2016 settlement required Uber to shell out $2.6 million, but apparently the company didn’t quite learn its lesson.

  The more than a dozen times Irving said she was discriminated against occurred after the 2016 settlement. “Uber allowed drivers who discriminated against disabled riders to continue driving without discipline,” an arbitrator ruled this week. 

  

  The arbitrator’s report continued: “When Uber did conduct an investigation, its investigators were trained, in some instances, to coach drivers to find non-discriminatory reasons for ride denials, sometimes even to ‘advocate’ to keep drivers on the platform despite discrimination complaints.”

  Irving claimed she was rejected for rides “at least 60 times”, including one instance where a driver got “vocally angry” about having a dog in the car and threatened to leave her on the side of the ride. 

  Of the $1.1 million Irving won, $805,313 will go to legal costs and $324,000 were awarded in damages. 

  Uber has now implemented a new “Service Animal Policy” with its own dedicated support form for future instances. You can read the full arbitration report at The Verge.

  Tyler Durden
  Tue, 04/06/2021 – 23:25

• Buchanan: For What Should We Fight Russia Or China?
  Buchanan: For What Should We Fight Russia Or China?

  Authored by Pat Buchanan via Buchanan.org,

  Last Monday, in a single six-hour period, NATO launched 10 air intercepts to shadow six separate groups of Russian bombers and fighters over the Arctic, North Atlantic, North Sea, Black Sea and Baltic Sea.

  

  Last week also brought reports that Moscow is increasing its troop presence in Crimea and along its borders with Ukraine.

  Joe Biden responded.

  In his first conversation with Ukrainian President Volodymyr Zelensky, Biden assured him of our “unwavering support for Ukraine’s sovereignty and territorial integrity in the face of Russia’s ongoing aggression in the Donbass and Crimea.”

  Though Ukraine is not a member of NATO, and we have no treaty obligation to fight in its defense, this comes close to a war guarantee. Biden seems to be saying that if it comes to a shooting war between Moscow and Kiev, we will be there on the side of Kiev.

  Last week, Kremlin spokesman Dmitry Peskov answered that if the U.S. sends troops to Ukraine, Russia will respond.

  Again, is Biden saying that in the event of a military clash between Ukrainians and Russians in Crimea, Donetsk or Luhansk, the U.S. will intervene militarily on the side of Ukraine?

  Such a pledge could put us at war with a nuclear-armed Russia in a region where we have never had vital interests, and without the approval of the only institution authorized to declare war — Congress.

  

  Meanwhile, off Whitsun Reef in the South China Sea, which Beijing occupies but Manila claims, China has amassed 220 maritime militia ships.

  This huge Chinese flotilla arrived after Secretary of State Anthony Blinken put Beijing on notice that any attack on Philippine planes or ships challenging Beijing’s claim to rocks and reefs of the South China Sea that are in Manila’s exclusive economic zone will be backed by the U.S.

  Our 70-year-old mutual security treaty with Manila covers these islets and reefs, said Blinken, though some are already occupied and fortified by China.

  Apparently, if Manila uses force to assert its claims and expel the Chinese, then we will fight beside our Philippine allies. This amounts to a war guarantee of the kind that forced the British to declare war on Germany in 1939 over the invasion of Poland.

  Two weeks ago, 20 Chinese military aircraft entered Taiwan’s air defense identification zone in the largest incursion yet by Beijing over the waters between Taiwan and Taiwan-controlled Pratas Islands. As national security correspondent Bill Gertz writes in today’s Washington Times:

  “China is stepping up provocative activities targeting regional American allies in Asia … with an escalating number of military flights around Taiwan and the massing of more than 200 fishing ships near a disputed Philippines reef.

  “China also raised tensions with Japan, announcing last week that Tokyo must drop all claims to the disputed Senkaku Islands, an uninhabited island chain that Japan has administered for decades but that Beijing recently claimed as its territory.

  “The most serious provocation took place March 29. An exercise by the People’s Liberation Army air force that included 10 warplanes flew into Taiwan’s air defense zone is what analysts say appeared to be a simulated attack on the island. It came just three days after an earlier mass warplane incursion.”

  While China appears clear about its aims and claims to virtually all of the islands in the South China Sea and East China Sea as well as Taiwan — it is less clear about its intentions as to when to validate those claims.

  As for the U.S., does the present foggy ambiguity as to what we may or may not do as China goes about asserting its claims serve our vital interests in avoiding war with the greatest power on the largest continent on earth?

  If red lines are to be laid down, they ought to be laid down by the one constitutional body with the authority to authorize or declare war — Congress. And questions need to be answered to avoid the kinds of miscalculations that led to horrific world wars in the 20th century.

  Are the reefs and rocks the Philippines claim in the South China Sea, claims contradicted by China, covered by the U.S. mutual security treaty of 1951? Are we honor-bound to fight China on behalf of the Philippines, if Manila attempts to reclaim islets China occupies?

  What is our obligation if China moves to take the Senkakus? Would the United States join Japan in military action to hold or retrieve them?

  What, exactly, is our commitment to Taiwan if China attempts to blockade, invade or seize Taiwan’s offshore islands?

  John F. Kennedy in the second debate with Richard Nixon in 1960 wrote off Quemoy and Matsu in the Taiwan Strait as indefensible and not worth war with Mao’s China.

  With its warnings and threats, China is forcing America to address questions we have been avoiding for about as long as we can.

  China is saying that it is not bluffing: These islands are ours!

  Time to show our cards.

  Tyler Durden
  Tue, 04/06/2021 – 23:05

• Where America's Bridges Are Crumbling
  Where America’s Bridges Are Crumbling

  Back in August 2007, the dangerous and decaying state of America’s infrastructure became a shocking reality when the I-35W Mississippi River Bridge in Minneapolis collapsed, sending vehicles crashing into the river below. 13 people were killed while another 145 were injured. In August 2018, a bridge collapse in Genoa, Italy, shocked the world with 43 people losing their lives. After that catastrophe, many countries, including the United States, started to seriously look at the state of their deteriorating infrastructure.

  Last week, as Statista’s Niall McCarthy notes, President Biden unveiled his plans for a $2 trillion investment in American infrastructure, describing it as “a once-in-a-generation effort”. It would involve replacing lead piping, rebuilding 20,000 miles of roads and repairing the country’s 10 most economically important bridges. Biden described the program as “unlike anything we have seen or done since we built the interstate highway system and the space race decades ago”. He added that it would be “the largest American jobs investment since World War II”.

  After the announcement, a report from the American Road & Transportation Builders Association (ARTBA) illustrated the scale of the challenge in overhauling and repairing U.S. infrastructure by finding that more than 220,000 American bridges need repair work. 45,000 of them were deemed structurally deficient and Americans cross them 171.5 million times daily. At the current rate, it would take more than 40 years to fix all of them and cost an estimated $41.8 billion.

  The good news is that the number of structurally deficient bridges has declined for the past five years but that trend has been tempered by more bridges being downgraded from good to fair condition.

  

  You will find more infographics at Statista

  Out of all U.S. states, Iowa has the most structurally deficient bridges, 4,571 or 19.1 percent of its total bridges. Pennsylvania comes second on the list with 3,353 of its bridges falling into the same category, along with 2,374 in Illinois.

  West Virginia has the highest share of bridges classified as structurally deficient at 21 percent while Nevada has the lowest at just 1.4 percent.

  Tyler Durden
  Tue, 04/06/2021 – 22:45

• NY State To Give Up To $2.1 Billion To Illegal Immigrants
  NY State To Give Up To $2.1 Billion To Illegal Immigrants

  Just when you thought things couldn’t get more surreal, New York State’s democratic-party-dominated legislature decides to crank the virtue-signaling ‘equity’ amplifier up to 11.

  

  Embattled Gov. Andrew Cuomo – desperate for any news to distract from his dueling sex abuse and nursing home death scandals (“Hey, want some pot?“) – struck a deal on Tuesday with New York Lawmakers to spend $2.1 billion towards to assist jobless workers who were excluded from unemployment benefits during the pandemic – primarily undocumented immigrants and ex-convicts, after activists launched several hunger strikes.

  Lawmakers justified the stunning addition to the state’s broader $212 billion budget agreement, by claiming – as Lohud.com’s Tifany Cusac-Smith and David McKay Wilson report – many undocumented immigrants have not received aid such as stimulus checks or federal unemployment benefits during the pandemic, even though studies show that they pay billions of dollars in taxes each year.

  The study in question – by The Institute on Taxation and Economic Policy – appears custom-tailored to justify classifying illegal immigrants as qualifying residents, as they claim tax revenues would skyrocket if currently illegal workers were suddenly made legal and paid taxes… legally?

  Here is the table showing that undocumented workers paid $1.108 billion in taxes (which, if our math is correct, is around half what they are about to get from the state).

  

  Like other people living and working in the United States, undocumented immigrants pay state and local taxes. They pay sales and excise taxes when they purchase goods and services (for example, on utilities, clothing and gasoline). They pay property taxes directly on their homes or indirectly as renters. Many undocumented immigrants also pay state income taxes. The best evidence suggests that at least 50 percent of undocumented immigrant households currently file income tax returns using Individual Tax Identification Numbers (ITINs), and many who do not file income tax returns still have taxes deducted from their paychecks.

  Actual details of the bill are not available yet, including whether the handouts from the state would be taxable themselves… like they are for all legal tax-paying residents.

  “The federal government has given trillions of dollars of relief to Americans, the state of New York is getting billions of dollars, but not everybody. We’re here to fix that,” said state Sen. John Liu, D-Queens.

  “Excluded workers may not have a piece of paper, but they’re New Yorkers just as much.”

  …

  In one iteration of the proposal, those who could prove residency for 60 days, had a federal Tax Identification Number, and show they earned less than $26,000, would qualify for $15,000.

  Is it just us, or does “excluded worker” feel like a focus-group phrase designed to gaslight readers into believing that illegal immigrants – whose presence in the country hurts low-income legal residents the most – have suffered “injustice” and “inequity” when it comes to the social safety net that honest taxpayers will have to subsidize for decades to come? Perhaps the term “illegally-employed-worker” would be more appropriate?

  

  After watching near record numbers of immigrants crossing the US-Mexico border to reach Biden’s promised land, some lawmakers expressed fears that the bill would make New York a magnet for illegal immigrants. Others view the pandemic as a humanitarian crisis that illegal immigrants have been caught on the wrong side of.

  Murad Awawdeh, interim co-executive director of the New York Immigration Coalition, said undocumented families in New York deserve a chance at recovery from this pandemic.

  “Undocumented immigrant New Yorkers on the frontlines of this pandemic are still struggling to pay their bills and feed their families because of the injustice of nearly every federal stimulus relief package, which excluded these New Yorkers from all social safety nets just because of their immigration status.“

  Yet, we can’t help but wonder how low-income, law-abiding, tax-paying, legal immigrants and American citizens will feel about their taxes being used to subsidize those who chose to cut in line.

  As a reminder, we detailed yesterday that after years of paying the highest income tax in the country, the privilege of being the most IRS-abused group shifts from virtue-signaling California 1%-ers to New York millionaires, who would pay the highest income tax in the United States under a new budget currently being finalized by embattled NY Governor Andrew Cuomo.

  According to the WSJ, Cuomo and NY state lawmakers are nearing a budget agreement that would increase corporate and income taxes by $4.3 billion a year and would make top earners in New York City pay the highest combined local tax rate in the country.

  Vote woke, go broke.

  Tyler Durden
  Tue, 04/06/2021 – 22:25

• Iranian Spy Vessel Damaged By Israeli Mine Attack, Claims NYT
  Iranian Spy Vessel Damaged By Israeli Mine Attack, Claims NYT

  Update (2217ET): The New York Times alleges Israel is behind the naval mine attack that damaged an Iranian vessel, identified as the Saviz, on Tuesday. 

  An American official told the NYT that the Israelis notified Washington about how its forces mounted a mine to the Saviz. 

  The official, who spoke on condition of anonymity to share private intelligence communications, said that the Israelis had called the attack a retaliation for earlier Iranian strikes on Israeli vessels, and that the Saviz had been damaged below the water line. The vessel’s precise location in the Red Sea was not immediately clear. -NYT 

  A shadowy regional war appears to be playing out between Israel and Iran, as both countries exchange accusations of attacking each other’s vessels.

  Readers may recall The Wall Street Journal revealed last month that Israeli intelligence has been waging its own tanker sabotage campaign against the Iranians over the past two years.

   * * * 

  Update (1557ET): Reuters’ Idrees Ali, who covers foreign policy at the Pentagon, reports US officials did not carry out the Iranian Saviz vessel’s attack earlier on Tuesday. 

  U.S. officials tell Reuters that the United States did not carry out the attack. https://t.co/Hqu0eBkRcN

  — Idrees Ali (@idreesali114) April 6, 2021

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

  Fellow Elizabeth Tsurkov, of the Newlines Institute for Strategy and Policy, responded to Ali’s tweet by saying: “Israel did.” 

  Israel did

  — Elizabeth Tsurkov (@Elizrael) April 6, 2021

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

  Tsurkov’s theory is certainly interesting, considering The Wall Street Journal revealed last month that Israeli intelligence has been waging its own tanker sabotage campaign against the Iranians over the past two years. 

  “Israel has targeted at least a dozen vessels bound for Syria and mostly carrying Iranian oil out of concern that petroleum profits are funding extremism in the Middle East, the US and regional officials say, in a new front in the conflict between Israel and Iran,” the WSJ wrote last month.

  It remains to be seen who is responsible for the Saviz attack, but we should note the incident occurred during the Joint Comprehensive Plan of Action (JCPOA) meeting in Vienna today as top world powers began a new effort to bring the US back into the 2015 nuclear deal they signed with Iran. 

   * * * 

  Update (1521ET): Reuters cites another Tasnim report indicating the Iranian Saviz vessel was struck by “limpet mines in the Red Sea.” 

  “The vessel Iran Saviz has been stationed in the Red Sea for the past few years to support Iranian commandos sent on commercial vessel (anti-piracy) escort missions,” Tasnim reported.

  Here’s what a limpet mine looks like 

  

  Refinitiv shipping data shows the vessel has been stationary for at least 180 days. 

  

  * * * 

  Update (1503ET): Iranian news agency Tasnim reports the Iranian Saviz vessel in the Red Sea was struck by a naval mine and sustained damage to its hull. 

  According to the defense correspondent of Tasnim news agency, some sources report an accident for the Iran Saviz ship in the Red Sea.

  According to this report, according to the information obtained by Tasnim reporter, it is said that this accident occurred due to the explosion of landmines in the hull of the ship.

  IranSavis has been stationed in the Red Sea for the past few years to support Iranian commandos who are sent to escort commercial vessels.

  Official sources have not yet commented on this and additional news will be announced later. -Tasnim

  * * * 

  Unconfirmed reports circulating on social media indicate an Iranian spy ship was hit in an attack in the Red Sea, amid increasing tensions between Israel and Iran, according to Israeli newspaper Haaretz. 

  The targeted vessel is a merchant ship but is likely a secret marine spy base operated by the Islamic Revolutionary Guard Corps (IRGC). 

  Saudi-owned television network Al Arabiya reports the vessel affiliated with the IRGC was attacked in the Red Sea off the coast of Eritrea, a northeast African country on the Red Sea. 

  

  Israel-based news network Channel 13’s Alon Ben-David, tweeted:

  A spy ship and electronic surveillance of the Revolutionary Guards were attacked in the Red Sea. The ship was damaged, making it difficult for it to continue operating

  The U.S. Naval Institute provides more information on the secret IRGC spy ship: 

  The naval role of ships like the Saviz is hard to prove with open sources, but the inference is clear. There is no legitimate civilian explanation for the action, and uniformed men have been seen onboard. On the ship’s deck are Boston Whaler type launches, a boat type popular with the IRGC and not in keeping with Saviz’s civilian design.

  The ship is anchored off the Yemen coast at the southern end of the Red Sea, near to where Bab el-Mandeb Strait forms a natural choke point. Automated Information System transmissions and analysis of commercial satellite images show the ship has barely moved in the past three years. From its position, the ship can provide constant surveillance of maritime traffic. The narrow waterway just south of its position squeezes tankers to a channel just a couple of miles wide. There have been numerous attacks on tankers in the area.

  

  There has yet to be any confirmation on the attack from Iranian or Israeli officials. 

  As we’ve noted before, Israel has attacked dozens of Iranian ships over the years. 

  Tyler Durden
  Tue, 04/06/2021 – 22:17

• Here's Why Hedge Funds Are Having Another Dismal Year
  Here’s Why Hedge Funds Are Having Another Dismal Year

  It’s shaping up as one of those years for hedge funds. A little over three months into the new year, retail investors (as measured by a basket of retail favorite names) is up almost 20%, the S&P is up a little over 8% while he dge funds have barely managed to generate any returns. In fact, until last week, the average global equity Long/Short fund was down for the year. It was only in the past week when Goldman Prime found that Equity Fundamental L/S hedge funds rose +2.92% globally…

   

  

  … that year-to-date performance finally tipped into the green by a minuscule +0.05%.

  

  And it’s not because hedge funds have “learned” from Archegos’ mistakes and are cutting their use of leverage: on the contrary, Goldman Prime writes that gross leverage fell a modest -1.0 pts to 240.2% (94th percentile) while Net leverage rose +0.5 pts to 88.7% (98th percentile). Overall book L/S ratio rose +0.8% to 2.170 (95th percentile).

  No, there is something else going on here. As Bank of America found, hedge funds have become so accustomed to quick and easy beta gains from buying FAAMG and tech stocks and slapping 3x, 5x, or more leverage, that they no longer have any idea how to do actual value investing.

  As Bloomberg notes, the reason why hedge funds have performed dismally so far in 2021 – even without the help of Archegos – is that while most other investors have been wagering on an economic rebound leading to a surge in value names since November’s presidential election, one group of investors has refused to rotate.

  Indeed, despite a rally of at least 40% in energy and financial shares over the five months, the average hedge fund – which no longer remember what net leverage, EBITDA or Free Cash Flow coverage is – has steadfastly shunned value stocks in the reflation trade, favoring instead companies seen as resilient during an economic slowdown, i.e. tech names that in the past decade have led to quick and easy gains. Indeed, their exposure to cyclical shares sits at one of the lowest levels in a decade relative to defensive ones, as the following BofA chart shows.

  

  It’s not just BofA clients who have forgotten how to do anything but “buy and lever up”: Morgan Stanely client data shows a similar pattern, and after peaking near the end of 2020, the industry’s net exposure to the reflation strategy has retreated to the 78th percentile over the last 12 months, according to the bank’s prime brokerage unit, which most recently has been in the news for dumping its exposure to Archegos ahead of all other prime brokers.

  According to Bloomberg it isn’t obvious what’s driving the aversion to value:

  One theory is that hedge funds aren’t buying the return-to-normal narrative despite the rollout of vaccines. Last year, when retail investors rushed to hunt bargains in beaten-down groups like airlines and hotels, professional speculators were hesitant to chase pandemic-ravaged companies.

  Another explanation holds it may be related to apprehension that economic acceleration, propelled by monetary and fiscal support, will lose steam once the latest federal spending wears out. Mike Wilson, an equity strategist at Morgan Stanley, is an ardent proponent advocating a shift to stocks better positioned to weather potentially disappointing economic data, such as consumer staples.

  “This is the time to upgrade the portfolio and shift toward quality ahead of slowing rates of change in a number of macro indicators,” Wilson wrote in a note to clients Monday.

  We disagree that it “isn’t obvious” what is causing this drift: a decade of Pavlovian “buying the f**king dip” in tech and devastation in value stocks has made an entire industry into the best paid experimental dogs in the world, so much so that when told to do work and find good “value” investments, hedge fund portfolios immediately slink back to buying Tesla, Google and Amazon.

  In any case, whatever reason is behind hedge funds’ cautious stance, Bloomberg is correct that it’s starting to reverberate in the broad market: “over the past month, utilities and consumer staples have taken over leadership from energy shares while a spike in bond yields stalled even as hiring and services-sector data outstripped estimates.”

  Meanwhile, Wall Street strategists find themselves desperately urging hedge funds to do precisely the opposite of what central banks have indoctrinated for the past decade. For example, Canaccord strategist Tony Dwyer, said investors should take advantage of any pullback in the reflation trade to add exposure.

  “The only way to view this, in our view, is as a ‘Capital V’ recovery that is in the early innings, and the only thing that could stand in the way would be another shutdown of the economy to contain new Covid-19 strains or a policy mistake by the Fed,” said Dwyer. “Neither appear imminent.”

  Furthermore, it also appears that the Great Rotation into energy that was predicted by JPMorgan in March never occurred, and when compared to history, hedge funds’ exposure to financial and energy shares now trails all other sectors, BofA data show. Such skepticism bodes well for these stocks that are under-owned and traded at lower multiples relative to earnings or book value, according to the firm’s strategists led by Savita Subramanian.

  “Hedge funds are yet to embrace rotation to value which leaves room for increased positioning in the coming months,” she wrote in a note last week.

  Of course, for that to happen hedge funds need to step away from blindly hoping that doing what worked in the past decade will still work now. Until then, returns in the hedge fund industry will continue to suck.

  Tyler Durden
  Tue, 04/06/2021 – 22:05

• Beijing Accelerating Timeline For Possible Invasion Of Taiwan, Expert Warns
  Beijing Accelerating Timeline For Possible Invasion Of Taiwan, Expert Warns

  Authored by Frank Fang via The Epoch Times,

  The Chinese communist regime is accelerating its plans to invade Taiwan, an expert warns, as Beijing ratchets up military maneuvers against the island.

  

  Twenty Chinese military aircraft – including four nuclear-capable H-6K bombers, 10 J-16 fighter jets, two Y-8 anti-submarine warfare aircraft, and a KJ-500 airborne early warning and control aircraft – entered Taiwan’s air defense identification zone (ADIZ) on March 26, according to Taiwan’s Ministry of National Defense. It was the largest incursion ever reported by the ministry.

  Taiwan’s ADIZ, located adjacent to the island’s territorial airspace, is an area where incoming planes must identify themselves to the island’s air traffic controller.

  The incursion caps off a significant increase in hostility by Beijing against Taiwan since 2020. Taiwan’s President Tsai Ing-wen, re-elected last January, has taken a hard line against threats posed by the Chinese Communist Party (CCP), while the island has deepened its cooperation with the United States—prompting the regime to escalate its warmongering towards the island.

  The CCP sees Taiwan as a part of its territory and has threatened war to bring the island under its fold. The self-ruled island is in reality a de-facto independent country with its own democratically-elected government, military, constitution, and currency.

  The Republic of China (ROC)—Taiwan’s official name—overthrew China’s Qing Dynasty emperor in 1911. After the ROC retreated to Taiwan upon being defeated by the CCP during the Chinese Civil War, the CCP established a communist state called the People’s Republic of China (PRC) in 1949, while Taiwan gradually transitioned to become a democracy. But to this day, the Chinese regime has refused to recognize Taiwan’s sovereignty.

  Last year, the Chinese air force flew about 380 sorties into Taiwan’s ADIZ, the highest number in a given year since 1996. So far this year, the Chinese military has been sending aircraft into the ADIZ on a near-daily basis.

  The island’s coast guard on April 1 announced that Beijing has been flying unmanned drones near Taiwan’s Dongsha Island, located in the northern part of the South China Sea. The authority said it could not rule out that Beijing was using the drones to carry out reconnaissance.

  Alongside military actions, the regime has sharpened its rhetoric towards the island. Earlier this year, a Chinese defense spokesperson threatened war against Taiwan if it declared independence.

  On March 31, Hu Xijin, editor-in-chief of hawkish state-run media Global Times, wrote on his social media, that he would like to order able-bodied men to go blow up bunkers in Taiwan in the event of war.

  An unnamed Chinese pilot, who flew one of the Chinese aircraft crossing into Taiwan’s ADIZ on March 29, said, “This is all ours” after being asked to leave the airspace by the pilot of a Taiwanese interceptor aircraft, according to local media, who obtained a recording of the pilot’s remark from the Facebook page “Southwest Airspace of TW.”

  Preparing to Invade

  Beijing’s incursions are part of a series of dry runs in preparation for an invasion of Taiwan, John Mills, the former director of cybersecurity policy, strategy, and international affairs at the Office of the Secretary of Defense, told The Epoch Times.

  Mills projects that these exercises could culminate in a large-scale dry run in the next two years. These dry runs are necessary, Mills said, given the complexity of amphibious landing operations—as well as how the Chinese military has never conducted a forced landing on a hostile power in a real-life situation before.

  Any amphibious assault on Taiwan may also involve swarms of Chinese civilian merchant vessels and fishing boats, Mills said.

  He believes that an invasion could come in the next three years—much earlier than the six-year estimate given by U.S. Adm. Philip Davidson, head of the U.S. Indo-Pacific Command (INDOPACOM), during a congressional hearing in early March.

  “If they haven’t done in 10 years, I think [Chinese leader] Xi [Jinping] will probably have been removed from office. I think even six years is pushing it,” Mills said. He added that Xi could come under pressure to attack Taiwan to deflect attention away from internal problems, such as an economic crisis.

  U.S. Adm. John Aquilino, the nominee to replace Davidson as head of INDOPACOM, at his confirmation hearing in March declined to endorse Davidson’s six-year estimate, but said the threat of a Chinese invasion is “much closer to us than most think.”

  This point was echoed by former national security advisor H.R. McMaster, who in March said that Xi believes “he has a fleeting window of opportunity that’s closing” in relation to attacking Taiwan. McMaster said the period from 2022 onward marks the time “of greatest danger” to Taiwan, noting that this coincides with after the conclusion of the 2022 Beijing Winter Olympics.

  But right now, the Chinese military is still not ready for an attack against the island, Mills said. The problem is, however, that the longer it waits to invade, the more ready and fortified Taiwan will be.

  “We all need to be aware of and be ready for an acceleration of these timelines,” Mills warned.

  Beijing’s Taiwan ambitions stem primarily from its desire to get its hands on the island’s semiconductor-making capability, according to Mills. Taiwan is home to TSMC, the world’s largest contract chipmaker.

  China is heavily dependent on foreign semiconductors—tiny chips that power everything from cellphones to missiles. According to Bloomberg, China imported $380 billion-worth of chips in 2020, accounting for about 18 percent of all its imports.

  The regime is now struggling to secure foreign semiconductors following a series of sanctions slapped on Chinese companies by the Trump administration. U.S. sanctions have crippled the smartphone business of Chinese tech giant Huawei. Chinese chipmaker SMIC has also been put on a trade blacklist.

  Hitting Back at US

  Soong Hseik-wen, a professor at the Institute of Strategic and International Affairs (ISIA) of Taiwan’s National Chung Cheng University (NCCU), told The Epoch Times that the Chinese regime was making a statement with its incursion on March 26, in response to actions by the U.S. government in March.

  These events included President Joe Biden’s first summit with Quad leaders from Australia, India, and Japan; the meeting in Tokyo between Secretary of State Antony Blinken, Pentagon chief Lloyd Austin, and their Japanese counterparts; and the Sino-U.S. talks in Anchorage, Alaska, according to Soong.

  “These three events showed that there are structural conflicts between China and the United States, and they cannot be resolved through diplomatic negotiations,” he said.

  The two-day talks in Anchorage were marked by heated exchanges on March 18, during which the CCP’s top diplomat Yang Jiechie lashed out at U.S. foreign and trade policies, and over what he said was the United States’ struggling democracy and poor treatment of minorities.

  The meeting highlighted how far apart the Chinese regime and United States are on critical issues, as the Chinese delegation rejected U.S. concerns about Beijing’s human rights abuses in Xinjiang, its crackdown on freedoms in Hong Kong, and its intimidation of Taiwan, on the grounds that they were China’s “internal affairs.”

  Viewing U.S. actions as escalating efforts to confront the regime, Beijing decided to flex its military muscle by sending a large aircraft squadron into Taiwan’s ADIZ on March 26, Soong said.

  A bilateral agreement on coast guard cooperation between Taiwan and the United States—signed the day before the incursion—may have played into Beijing’s plan to take military action against Taiwan on March 26, Soong added. The agreement, he said, was a clear attempt to push back against Beijing after it passed a law in January to allow its coast guard to fire on foreign ships if needed.

  With the agreement, the U.S. government was “explicitly saying” that the coast guard would also be a part of its maritime strategy to secure peace and stability in the region, Soong said.

  China’s coast guard law has drawn widespread concern from its neighbors, including Japan, the Philippines, Taiwan, and Vietnam.

  On March 28, U.S. Ambassador to Palau John Hennessey-Nilan arrived in Taiwan as part of a Palau delegation headed by President Surangel Whipps. Palau is one of Taiwan’s 15 diplomatic allies.

  Soong suggested that Beijing could have received intelligence of the U.S. ambassador’s visit to Taiwan, which would have prompted Beijing to show its disapproval, since the visit marked the first time a sitting U.S. diplomat has traveled to Taiwan since Washington ended diplomatic ties in favor of Beijing in 1979.

  Kelly Craft, former U.S. Ambassador to the United Nation, was originally going to visit Taiwan in mid-January, before her trip was canceled at the last minute.

  Defending Taiwan

  In the face of an escalating military threat from China, Mills said the Biden administration should adopt an unambiguous policy of deterrence towards the CCP. Specifically, Mills said the United States should have a visible navy and air force presence around Taiwan, as well as in the East China Sea and the South China Sea.

  Boosting Taiwan’s self-defense capability is also important, and the Biden administration should sell the island any weapons that it asks for, in accordance with the Taiwan Relations Act, according to Mills. Under the legislation, the United States is obliged to supply the island with weapons needed for its self-defense.

  Finally, the Pacific Deterrence Initiative (PDI) created under the fiscal 2021 Pentagon spending bill, would also be vital for U.S. forces in defending the region, Mills added. The PDI, akin to the European Deterrence Initiative, is aimed at securing advanced military capabilities to deter China’s military threats in the Indo-Pacific region.

  To defend against a possible invasion, Taiwan “can never have enough ammunition,” Mills said, adding that the island’s recent move to begin producing long-range missiles that could reach deep into mainland China was a “big deal.”

  Taiwan’s missiles are “a clear message that they’re going to reach out and inflict cost,” according to Mills.

  Soong suggested that the Biden administration could support Taiwan in two ways: assisting Taiwan to participate in international organizations and welcoming Taiwan to become a part of a “trusted industry alliance.”

  In February, Biden signed an executive order to begin a 100-day review of U.S. supply chains in several key sectors, including semiconductors, pharmaceuticals, and rare-earth minerals.

  The American Institute in Taiwan, the de-facto U.S. embassy in Taiwan, announced on April 1 that a virtual forum was held on Wednesday between high-level Taiwanese and American officials, to discuss the effort to expand Taiwan’s participation in “U.N. organizations and other international fora,” including the World Health Organization (WHO).

  Taiwan is currently not a member of the WHO because of Beijing’s objections.

  The Biden administration could also take active steps to enforce several pieces of pro-Taiwan legislation that were signed into law by former President Donald Trump, Soong said. The legislation includes the Taiwan Travel Act, the TAIPEI Act, and the Asia Reassurance Initiative Act.

  Taiwan, located on the first island chain, would be among the first targets of any Chinese military aggression in Asia. The first island chain is an arbitrary demarcation from the southern Japanese island of Kyushu, Taiwan, the Philippines, to Indonesia. For decades, the CCP’s military strategists have seen the first island chain as a barrier to the regime’s air and naval power, leaving the second island chain and beyond out of its reach.

  As a result, Soong said that some European and Asian countries, in particular Japan and Australia, are observing Taiwan closely to see whether cooperation between Taipei and Washington is solid.

  “These countries are watching how the U.S. government will enact these legislation, questioning whether it will pay lip service [about U.S. commitment to allies’ security] under certain situations,” explained Soong.

  The Biden administration has said its commitment to Taiwan is “rock-solid.” But according to Soong, how serious the administration is in defending the island remains to be seen, especially given that Biden himself has never used the word “threat” to describe the CCP.

  Biden has instead framed the regime as America’s “most serious competitor.”

  Soong said he foresees the United States and China engaging in small-scale military conflicts in the near future, especially at two Taiwan-controlled islands in the South China Sea—Dongsha and Taiping.

  “I believe the United States and China are in a new cold war,” Soong said.

  Tyler Durden
  Tue, 04/06/2021 – 21:45

• Michael "Big Short" Burry Quits Twitter Amid Speculation About SEC Probe
  Michael “Big Short” Burry Quits Twitter Amid Speculation About SEC Probe

  A few weeks ago, we reported that Michael Burry, the hedge fund manager who shot to international fame thanks to the “Big Short”, had once again deleted all of his tweets and announced that he would be taking a break from twitter after receiving some kind of warning from the SEC (he claimed agents had “paid us a visit”).

  

  Over the past year or so, Burry has attained a new level of financial-industry stardom after becoming a closely followed figure among the army of retail traders coalescing on and around Wall Street Bets. He made the bullish case for Gamestop and took a stake in the company long before anybody had heard of “RoaringKitty”, and under his familiar user name “Cassandra” he attracted hundreds of thousands of followers on Twitter often thanks to his gloomy takes – often only to delete his tweets and threads, much to the consternation of many of his fans.

  But instead of merely deleting tweets, it appears the Scion Asset Management founder has deleted his entire account. The webpage for the @michaeljburry account that used to show Burry’s musings on the dangers of Bitcoin and the bubble around the current retail trading wave now displays a message saying, “This account doesn’t exist.”

  

  Speculation immediately turned to the SEC and whether Burry had deleted his account for some kind of compliance-related reason. In recent weeks, Burry has become even more aggressively skeptical of the non-stop equity rally, murmuring about how he is bracing for a massive drawdown as the reflation trade forces the market to recalibrate its rate-hike projections.

  Has the SEC come to visit you yet, like Burry?

  — Tom Wells (@tomwellsjr) April 5, 2021

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  What’s more lame: that the SEC visited Burry, or that he caved? https://t.co/WdwwWNcoxE

  — 𝔻🦩𝕃𝔸ℕ 𝔾ᚱ𝔸₿🌐💚§𝕂𝕀 (@GrabowskiDylan) April 6, 2021

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  @MaddowBlog why does Dr. Burry’s account no longer exist? @michaeljburry He was trying to warn people again. SEC told him to stop. He tried to put his warning in a background image. Seriously! The guy who told us the economy was collapsi g last time has to use secret messages!

  — A fox in space (@woundedkarma) April 6, 2021

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  Others brought up Burry’s infamous Tesla short (Tesla shares this week have reversed some of their earlier losses from the past two months).

  @michaeljburry Twitter no longer exists, huh?

  RIP: Michael Burry (aka “Cassandra”), last seen touting his Tesla short position or being interviewed by SEC over market manipulation. Either way, be well Michael! We’ll get Mark Spiegel to play you in the next film!$tsla $tslaq pic.twitter.com/SE6VwBXh1W

  — equilibrium (@Equilibrium_420) April 6, 2021

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  To be sure, as at least one twitter user pointed out, this isn’t the first time Burry has deleted his twitter account, and it’s entirely possible he just did it on a whim.

  Burry has deleted his Twitter about 10 times in 10 years. Sec didn’t make him do that.

  — King Kahn (@KingKahn23) April 6, 2021

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  Tyler Durden
  Tue, 04/06/2021 – 21:25

• China's Digital Currency Has Nothing To Do With Bitcoin
  China’s Digital Currency Has Nothing To Do With Bitcoin

  Authored by Peter Earle via The American Institute for Economic Research,

  China’s digital currency has left the testing stage and is set for a full rollout to the entire country and region.

  China is only the second country and the first major economy to officially launch a blockchain version of its own currency. According to Bloomberg, the sand dollar of the Bahamas Central Bank launched last year and was already being accepted in stores in the capital Nassau.

  

  You will find more infographics at Statista

  For some reason, the major media stories on the topic circle around the issue of Bitcoin, invented in 2009 as an alternative to government paper money. 

  

  Just because a money has the word “digital” in the title doesn’t mean it is a form of Bitcoin. It is not. It is nothing more than a government currency with a different delivery system. 

  • The digital Yuan does not live on a public ledger. It is controlled centrally by Chinese authorities, to be changed if, as, and when political whims require such. 

  • The digital Yuan is not a peer-to-peer currency but rather requires the use of officially regulated financial intermediation. 

  • The digital Yuan does not have a market-based valuation independent of the old version of the currency. They are tied together. 

  • The digital Yuan does not have an algorithmic protocol dictating the production of new assets (akin to money creation), much less an end date at which point no more will be created. It is a currency with a discretionary money supply controlled by the government.

  • The digital Yuan is programmable to the point that the currency can be made to expire, thus forcing consumers to use it up by a certain date. This is a twist on an obscure, unconventional monetary policy innovation known as a Gesell currency: expiring money, which gives the issuing government a heightened degree of control over money velocity. 

  • The digital Yuan permits a new method for surveilling the population, creating new data which can be tracked by authorities. Bitcoin has pseudonymous protections for user privacy. 

  The value of Bitcoin and other uncensorable, trustless, decentralized cryptocurrencies and assets was to no small extent based upon the interlocking relationship between the distribution of new currency units and the processing power needed to drive transactions. 

  Cryptographic security gave the blockchain actual use value. That market-derived valuation – seen in the live, ticking price of coins or other mining rewards for public blockchains – provided an incentive for miners to compete in the packaging of blocks. The robustness of a large number of competitive miners contributes pivotally to the security of the ledger, through a form of node “diversification” and the inability of one miner to dominate the hashrate.

  Chinese Yuan spot (5 yr)

  

  (Source: Bloomberg Finance, LP)

  No such thing exists in a state-issued digital asset, which would more accurately be termed a pseudo-crypto or a government digital currency. 

  The assertion that a central bank-issued digital currency would reduce certain transaction costs and be less error prone is likely accurate. But at what cost? Other assertions – for example, that they would necessarily reduce real interest rates – hinge critically upon how exactly the digital currency in question is structured, and the purposes for which the currency is used. (One should also be suspicious of the ceteris paribus assertion that lowering interest rates is necessarily a positive outcome and not highly context-driven.)

  Diem (Libra), Facebook’s proposal for a multi-asset backed (but still centrally-managed) currency, was far from an authentic crypto. Nevertheless, political entities from states to regulatory agencies around the world leapt to quash it. The issue is not even decentralization vs. centralization, but government-centralization. Every political incentive is directed toward monolithic control, which is evident in the design of the digital Yuan. 

  In short, everything that makes Bitcoin what it is is absent from this thing. Bitcoin was a fantastic revelation in the modern age because it demonstrated that government is not necessary for the existence of money. It needs no issuing authority or technocratic management. 

  Bitcoin demonstrated that money can be both private and live on a decentralized ledger that is unowned by anyone: it solved the Byzantine generals problem. It can be both a currency unit and a means of payment in one unified package. To see it come to life in real time and then gradually develop a $1.1 trillion market cap was remarkable – especially in the face of intellectual incredulity and unrelenting government attacks. 

  Governments who attempt to create their own crypto now are merely seeking to bathe in the warmth of one of our epoch’s greatest creations even while they eschew everything that made Bitcoin and other tokens so wonderful. The market itself is now in a position to decide. In the long term, the market will choose its friends over its enemies.

  Tyler Durden
  Tue, 04/06/2021 – 21:05

• Biden Builds Annex At Texas Border Facility As Overcrowding Continues
  Biden Builds Annex At Texas Border Facility As Overcrowding Continues

  So many migrants have been caught illegally crossing into the United States that the Biden administration is constructing a temporary annex facility for unaccompanied minors next to the Texas border patrol processing center which made headlines after photos and videos revealed giant rooms full of mylar-wrapped migrants packed into plastic pens. In some instances, over 300 migrants have been crammed into pods intended to hold just 48 people. 

  

  The Donna, Texas annex will allow officials to release children from the Customs and Border Protection facility faster – where they’ll sit in another building on CPB-owned land, according to Axios, which notes that the new unit, dubbed Delphi, will be overseen by the Department of Health and Human Services.

  

  More via Axios:

  • The administration has been focused on getting minors out of border stations and into HHS supervision as soon as possible.
  • The Rio Grande Valley sector, which includes Donna, has been receiving some of the largest numbers of migrants over the past few months.

  Between the lines: Border officials told Republican members of Congress and a handful of staffers about the new facility during a tour of Donna‘s temporary tent-like structures on Tuesday morning.

  • The officials said they were sending more than 300 migrant minors to the new facility on Tuesday— the first day it was open, according to two people who were briefed.
  • From one parking area of the border station, construction work could be seen through a fence.
  • The facility will be able to hold as many as 1,500 13-17 year-old boys and girls, HHS said in a statement provided to Axios. Minors will be tested for COVID-19 before and during their stay at Delphi, according to an HHS fact sheet.

  *  *  *

  According to the most recent agency data, the Biden administration has reduced the number of migrant children in CPB custody to 4,699 as of Sunday.

  Tyler Durden
  Tue, 04/06/2021 – 20:45

• Supreme Court Could Greenlight Warrantless Gun Seizures
  Supreme Court Could Greenlight Warrantless Gun Seizures

  Submitted by Sovereign Man Blueprint

  What happened:

  Last week the Supreme Court heard arguments in Caniglia v. Strum on whether police can enter a home without a warrant under a “community caretaking” exemption to the Fourth Amendment right against unreasonable search and seizure. The case stems from a 2015 incident in Rhode Island in which police entered an innocent man’s home, without his permission, and confiscated his firearms.

  Police had been called by Edward Caniglia’s wife, who claimed she feared her husband might be suicidal after they had an argument. Edward spoke calmly to police when they showed up, told them he would never kill himself, and displayed no reason to believe he may be suicidal. Police bullied him into visiting a psychiatric care facility, and lied that they would not confiscate his firearms while he was away. The facility immediately released Edward, because in their assessment, his mental health was fine.

  Police then lied to Edward’s wife, saying her husband gave police permission to enter the home and remove his firearms, which they did.

  After Edward sued, his firearms were returned. But the court ruled the police had acted properly in seizing the guns based on “community care.” Edward’s appeal made it to the Supreme Court.

  At last week’s arguments in front of the Supreme Court, the Biden administration sent a representative of the United States to argue on the officers’ behalf. In other words, the Biden administration is in favor of a court decision which would allow police to enter homes and confiscate firearms without a warrant in the name of “community care.”

  What this means:

  Lawyers for the police officers argued that a precedent for the “community care” exemption to the Fourth Amendment, which applied only to impounded vehicles, should also apply to the home.  While other exceptions to the Fourth Amendment require an immediate emergency, this one does not. If the Supreme Court ultimately agrees, it would weaken the Fourth Amendment protection against unreasonable search and seizure, especially as it applies to firearms.

  This would essentially force a “red flag law” on the entire country.

  Red flag, or ERPO (Extreme Risk Protection Order) laws have been passed in 19 states (plus DC). They allow police to seize firearms from an innocent person, with the permission of a judge.

  This is a “pre-crime”— the court decides, without the subject present, if their non-criminal behavior suggests they pose a threat to themselves or the community. But at least under red flag laws the cops need a judge to go along. If the Supreme Court rules in favor of the police in Caniglia v. Strum, it means police across the country will have free reign to serve as judge and jury, to convict someone of a pre-crime.

  What you can do about it:

  It’s pretty ironic that the same people who want to restrict the ability to defend yourself claim that the police are all racist and cannot be trusted to keep communities safe.

  The reality is that self defense is a personal responsibility.

  Guns can absolutely be misused, and in some cases needlessly escalate situations.

  But it’s hard to deny that firearms are sometimes an important part of a Plan B for self and home defense in a worst case scenario.

  The following 19 states (plus DC) have some version of red-flag laws on the books— which again, means police could confiscate your firearms with a court order, even if you have never committed, or even been accused, of a crime.

  • California

  • Colorado

  • Connecticut

  • Delaware

  • District of Columbia

  • Florida

  • Hawaii

  • Illinois

  • Indiana

  • Maryland

  • Massachusetts

  • New Jersey

  • New Mexico

  • New York

  • Nevada

  • Oregon

  • Rhode Island

  • Vermont

  • Virginia

  • Washington

  Oklahoma is the only state with an anti-red flag law. The law passed in May 2020 says the state, nor local governments, may enact a law that allow confiscating firearms from innocent people. No state agencies may accept funds to implement such a law either.

  Here is a basic overview of gun ownership legality in a few common Plan B destinations.

  Canada: It is legal to own firearms in Canada with training, a background check, and a permit. Canada issues different permits based on the type of firearms you wish to acquire. Shotguns and rifles commonly used for hunting are considered non-restricted, which is the easiest type of firearm license to acquire. These firearms do not have to be registered.

  Handguns are considered restricted, and require a different permit, and registration of each individual firearm. To carry handguns outside the home, you must acquire another special permit based on your occupation, or an imminent danger to your life.

  Mexico: It is legal for citizens and legal residents to own firearms in Mexico provided they are registered with the government and only kept in the home.

  To carry a firearm outside the home, a special permit is required. You must prove an occupational or special need, and meet other requirements including previous military service. Other exceptions exist for certain farming, hunting or sporting reasons.

  Panama: Legal residents and citizens of Panama can own firearms after obtaining a permit. Requirements include a psychiatric evaluation, to submit DNA, a background check, and a drug test in order to obtain the permit.

  Firearms must already be registered with the government, or go through the registration process if it is imported, which includes ballistic “fingerprinting” of the firearm.

  Keep in mind that states and countries have different standards for when you are allowed to use a firearm in self defense.

  Of course guns should always be a last resort, to save your life or the life of a loved one. In those circumstances, when faced with the choice of death or having to prove self-defense in court, most people would choose the latter.

  Again, there can be parts of a Plan B that you hope you will never have to use. But as the saying goes, better to have it and not need it, than need it and not have it.

  Tyler Durden
  Tue, 04/06/2021 – 20:25

• In Biden Change Of Tune, US Mulling Boycott Of 2022 Beijing Olympics
  In Biden Change Of Tune, US Mulling Boycott Of 2022 Beijing Olympics

  As if US-China relations weren’t bad enough at this moment, things are about to escalate further – potentially taking the Biden White House past even beyond the low-point of the trade war during the Trump presidency. 

  State Department spokesman Ned Price told reporters during a daily briefing on Tuesday that the US and its allies are discussing a joint boycott of the 2022 Winter Olympics in Beijing. 

  It’s not the first time the issue has been addressed, and previously it was mainly Republicans pressuring action regarding the Olympics and China’s egregious human rights record. In early February the White House had indicated it “had no plans” for a boycott, with Jen Psaki asserting at the time, “We’re not currently talking about changing our posture or our plans as it relates to the Beijing Olympics.”

  

  But “plans” have clearly changed, especially following the March 22 coordinated sanctions slapped on top Beijing officials over the Uighur crackdown by the US, UK, EU and Canada. The Canadians in particular have been the most vocal in parliament for urging an international boycott of the 2022 games, which has riled China. 

  Here’s what the State Department’s Ned Price said in the Tuesday afternoon comments: 

  “It [a joint boycott] is something that we certainly wish to discuss,” …he told reporters when asked about the Biden administration’s plans ahead of the international games.

  “A coordinated approach will not only be in our interest but also in the interest of our allies and partners,” he added.

  Price said that the United States has not yet made a decision but was concerned about China’s egregious human rights abuses. The Olympic Games are due to take place between Feb. 4 to Feb. 20.

  When pressed over a possible timeline of when such a decision would be reached, Price added: “We’re talking about 2022, and we are still in April of 2021, so these Games remain some time away.” 

  “I wouldn’t want to put a time frame on it, but these discussions are underway.” 

  Quickly following the comments Price attempted a little damage control…

  As I said, we don’t have any announcement regarding the Beijing Olympics. 2022 remains a ways off, but we will continue to consult closely with allies and partners to define our common concerns and establish our shared approach to the PRC.

  — Ned Price (@StateDeptSpox) April 6, 2021

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  Of course, the administration might want to consult the US Olympic committee as well as the hundreds of elite athletes now training and working toward their 2022 Olympic dreams – as it would mean them having to sit on the sidelines, missing a once in four year opportunity. 

  In prior reactions particularly to Canadian and other Western politicians calling for the boycott, China’s foreign ministry has slammed the human rights abuse allegations as based purely on “lies and fabrications”. 

  Tyler Durden
  Tue, 04/06/2021 – 20:05

• California's Failed Response To COVID
  California’s Failed Response To COVID

  Authored by Dr.Jayanta Bhattacharya and Dr.Martin Kulldorff via The American Institute for Economic Research,

  Now that we’ve “celebrated” the first anniversary of COVID-19 in California, it’s a good time to take stock of the state’s response.

  

  From the beginning, the Golden State has taken an aggressive stance toward the epidemic, including imposing the earliest shelter-in-place order in the nation; ceasing in-person schooling for the vast majority of public-school kids; shuttering churches, parks, and playgrounds; mandating masks, with hefty fines for violators; and forcing the closure of “non-essential” businesses that cannot operate using distancing technologies, such as videoconferencing. Even Disneyland has been closed since March 2020. In short, California has followed one of the strictest lockdowns in the country.

  Though the state’s response received high marks in July from the “covidian” high priesthood, including Dr. Anthony Fauci, the state has seen exploding coronavirus cases and deaths. Through March 28, 2021, 8.9 percent of all Californians have been identified as COVID cases – 3.6 million cases. Since most infections are not recognized as cases, a much larger fraction of the population has been infected with COVID. Through March 29 this year, nearly 57,800 people have died in California with COVID.

  To put these numbers in perspective, it helps to have a comparison state that has followed a very different policy. For that, we should consider Florida, which partially lifted its lockdown in May 2020 and then further relaxed restrictions in September (based in part on focused protection ideas advocated by us).

  

  In sharp contrast to California, in Florida most schools and universities have been open for in-person instruction since the fall, normal human activities—sports, church going, visits to the park—occur with regularity, and businesses have been open for in-person activities.  Local ordinances can recommend masks and social distancing and impose indoor-capacity limitations but cannot mandate closures, as is the case in California. Disneyworld has been open since July. At the same time, Florida increased testing and protection within its nursing homes to reduce the risk of COVID among its most vulnerable residents.

  The Florida policy has drawn sharp criticism from Fauci, who said it “opened up too quickly” in July. However, the infection control results to date look remarkably similar to California’s, and in some ways better. Through March 28, 9.5 percent of Floridians have been identified as COVID cases. Once we account for the fact that Florida has one of the oldest populations in the country and California has one of the youngest, the death rates with COVID through March 28 are lower in Florida than in California. In fact, the COVID death rate for the under-65 population and the over-65 population are both lower in Florida than in California.

  Some think of lockdowns as the only possible way to protect the population from exposure to COVID risk. In reality, the lockdowns in California and elsewhere have served to protect only a portion of the population—the rich.

  Data from Los Angeles County, where a large fraction of COVID cases in California has happened, put this fact in stark relief. Through March 28, in the wealthiest parts of LA County (those with less than 10 percent of households in poverty), the age-adjusted death rate with COVID-19 was 119 people per 100,000 population. As we look in poorer and poorer areas, the death rate mounts: areas with more than 30 percent of households in poverty have faced a death rate of 394 people per 100,000—a death rate more than three times higher. Hispanics in LA have borne the worst of the pandemic, with a death rate of 338 per 100,000. By contrast, Black, Asian, and White residents have experienced 188, 143, and 119 deaths per 100,000, respectively. The California lockdowns are a form of trickle-down epidemiology. In Florida, by contrast, there is little difference among races in COVID-related death rates throughout the epidemic, with the Black and Hispanic populations dying at lower rates than the White population.

  While anyone can get infected, there is more than a thousandfold difference in COVID-19 mortality between the oldest and youngest. According to a report by analysts at the University of Southern California, a strategy that prioritizes the elderly for the first vaccinations would result in a 70 percent increase in the number of lives saved, even with the same number of doses distributed. From the beginning of the epidemic, mathematical epidemiologists have touted the benefits of protecting the vulnerable to reduce COVID-related deaths. While the vaccine is a scarce resource, vulnerable populations should receive it first.

  Through December and January, California failed to rapidly distribute the vaccine to the elderly, who are at the highest mortality risk after infection. Governor Newsom did not make the vaccine available to the elderly until January 13, and California ranked dead last in the country in the pace of vaccine distribution in late January. One of the authors’ 80-year old mother, who lives in LA County and does not drive, was directed to a vaccination site at Dodger Stadium, 30 miles away, for inoculation and only received her first dose during the third week of February. By contrast, Florida offered the vaccine to every single resident and staffer in the state’s nursing homes, as well as in hundreds of assisted-living facilities, by the end of January. Though California has eventually caught up, it lagged behind Florida in its vaccine rollout through the crucial early winter months.

  That California and Florida have had similar COVID outcomes despite disparate policies would matter less if the lockdowns were costless.  However, this is very far from the case. The harms of the lockdowns are manifold and devastating wherever they have been implemented, including plummeting childhood vaccination, worsened cardiovascular disease outcomes, less cancer screening early in the epidemic, and deteriorating mental health, to name a few. According to a CDC estimate, one in four young adults in the United States seriously considered suicide, as reported this past June. For children, the cessation of in-person schooling since spring 2020 has led to severe learning losses, with adverse consequences projected throughout affected students’ life spans.

  On January 25, Governor Newsom lifted the statewide shelter-in-place order he had imposed on California in early December. This order returned the state to the regional color-coded lockdown regime that had been in place before the even more draconian shelter-in-place order. While this will permit some businesses to operate again, most state public schools remain closed to in-person instruction. As of March 28, California ranks last in the United States in access to in-person instruction for K–12 students. The lockdowns of varying stringency in place since March 2020 have evidently failed to protect Californians—especially poor Californians—from COVID and have inflicted enormous harm.

  It is far past time to try a better strategy.

  Tyler Durden
  Tue, 04/06/2021 – 19:45

• Virtue Un-Signaled? Biden Admin Mulls Restarting Border Wall Construction
  Virtue Un-Signaled? Biden Admin Mulls Restarting Border Wall Construction

  Less than 90 days after President Biden signaled his immense virtue by halting construction on Trump’s border wall and canceling future contracts, Biden’s beleaguered Department of Homeland Security is exploring whether to restart border wall construction in order to ‘plug gaps’ in the current barrier, according the Washington Examiner, citing DHS Secretary Alejandro Mayorkas.

  

  This of course would make Biden a xenophobic tyrant, if we’re playing by the Trump-era media guidebook.

  In a conversation with Immigration and Customs Enformcement employees last week Mr. Mayorkas was asked about his plans for the wall and he said that while President Biden has canceled the border emergency and halted Pentagon money flowing to the wall, “that leaves room to make decisions” on finishing some “gaps in the wall.”

  Mr. Mayorkas, according to notes of the ICE session reviewed by The Washington Times, said Customs and Border Protection, which oversees the wall, has submitted a plan for what it wants to see happen moving forward. -Washington Examiner

  “It’s not a single answer to a single question. There are different projects that the chief of the Border Patrol has presented and the acting commissioner of CBP presented to me,” said Mayorkas, adding “The president has communicated quite clearly his decision that the emergency that triggered the devotion of DOD funds to the construction of the border wall is ended. But that leaves room to make decisions as the administration, as part of the administration, in particular areas of the wall that need renovation, particular projects that need to be finished.”

  According to Mayorkas, the work would cover “gaps,” “gates,” and areas “where the wall has been completed but the technology has not been implemented.”

  Former President Trump’s acting commissioner of CBP, Mark Morgan, said Mayorkas’ comments were “more spin and misdirection,” and that the agency has always given the administration options on how to proceed with the wall.

  When Trump left office, around 460 miles of border wall was completed – most of which being improvements in areas with existing wall and/or outdated designs, or vehicle checkpoints that people could simply walk around.

  The new wall is more than just the steel slats. Officials describe it as a system, one that includes technology to allow agents to detect incursions and high-speed roads to allow them to reach trouble spots faster so that agents can interdict anyone who does make it over.

  That a question about the wall came from employees at U.S. Immigration and Customs Enforcement, which handles interior enforcement and deportation rather than border matters, shows just how deeply the wall has penetrated the psychology of Homeland Security.

  It’s sparked fierce devotees — including Border Patrol agents themselves — and rabid opponents. -Washington Examiner

  Biden’s border blunders have not inspired confidence. According to a recent poll conducted for the Senate Opportunity Fund, 53% of those surveyed now favor construction. 

  Read the rest of the report here.

  Tyler Durden
  Tue, 04/06/2021 – 19:25

• Pentagon Publishes Photos Of Syrian Kurds Training To Call In Airstrikes
  Pentagon Publishes Photos Of Syrian Kurds Training To Call In Airstrikes

  Authored by Dave DeCamp via AntiWar.com,

  Last month, US Air Force Joint Terminal Attack Controllers (JTACs) trained members of the Kurdish-led Syrian Democratic Forces (SDF) during live-fire attack helicopter exercises. JTACs direct military aircraft during combat and pictures published on a Pentagon website show the JTACs training SDF members to call in airstrikes, which appears the first time the US is giving non-state actors such training, at least publicly.

  

  Above: A person wearing an SDF patch speaks into radio during training with JTACs (Sgt. Torrance Saunders/Army).

  According to a report from Air Force Times, the pictures might be the first time JTAC training with the SDF is publicized, but the training is nothing new. SDF fighters have had the ability to call in US airstrikes for years now.

  The report said the SDF fighters were not trained to be JTACs themselves but relayed coordinates to US JTACs who would then order the airstrikes. During the campaign against ISIS in the Syrian city of Raqqa, which was decimated by US bombs in 2017, some SDF members were given an app for their tablets that they could put GPS coordinates into, which they would share with JTACs through encrypted messaging.

  

  

  The Biden administration has made it clear it will continue occupying northeast Syria and supporting the SDF. While this support is framed as part of the fight against ISIS, it is more about keeping the oil resources in the region out of the hands of the Syrian government in Damascus.

  On top of the occupation of the oil fields, the US maintains crippling economic sanctions on Syria that specifically target reconstruction, preventing Syria from rebuilding after a decade of war.

  Meanwhile, Syria’s army recently published combat training footage of its own:

  The sanctions have had a devastating impact on the civilian population. According to the UN, 12.4 million Syrians are facing starvation.

  Tyler Durden
  Tue, 04/06/2021 – 19:05

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• Erdogan Warns Of New Coup As He Arrests Ten Admirals
  Erdogan Warns Of New Coup As He Arrests Ten Admirals

  Two weeks ago, in the immediate aftermath of the latest financial crisis in Turkey following the shocking termination of the hawkish Turkish central bank head at the hands of Erdogan, we said that it was almost time for another diversionary “coup” to take place.

  Almost time for another “coup” in Turkey

  — zerohedge (@zerohedge) March 21, 2021

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

  While this was said (mostly) in jest to demonstrate how deeply in the banana republic rabbit hole Turkey, which now has negative net FX reserves…

  

  … has fallen, it appears we were once again spot on because overnight Turkey detained ten retired admirals on Monday, as President Erdogan warned of a new coup following a letter signed by more than 100 retired admirals warning about a possible threat to a treaty governing the use of Turkey’s key waterways.

  According to the Greek Reporter, the Ankara chief public prosecutor’s office said arrest warrants have been issued for the ten men. Prosecutors also ordered four other suspects to report to Ankara police within three days, opting not to detain them because of their age. The development comes one day after the letter was sharply condemned by the government, which said the move is “reminiscent of coup times” in Turkey’s past.

  Turkey’s approval last month of plans to develop a shipping canal in Istanbul comparable to the Panama or Suez canals has opened up debate about the 1936 Montreux Convention. The admirals said in their letter that apart from its environmental impact, the new canal venture could undermine the Montreux accord.

  The convention guarantees the free passage through the Bosphorus and Dardanelles straits of civilian vessels in times of both peace and war. It also regulates the use of the strait by military vessels from non-Black Sea nations.

  The proposed canal would allow ships to transit between the Mediterranean and the Black Sea without passing through part of the straits that are covered by the treaty.

  Turkey warns of a coup following letter

  The declaration has drawn strong reactions from the government and officials. Presidential spokesperson Ibrahim Kalın said the statement is “reminiscent of coup periods” and made the former Navy men “a laughingstock.”

  “Know your place and stay where you are,” he added. “These retirees, who’ve not been seen for years, are creating chaos with their agendas,” Parliament Speaker Mustafa Şentop charged.

  Interior Minister Süleyman Soylu said the admirals should not use their ranks and uniforms as a means to push their political rhetoric.

  On July 15, 2016 a fake coup attempt against Erdogan was carried out by a faction within the Turkish Armed Forces which according to Erdogan had organized themselves as the Peace at Home Council. They attempted to seize control of several places in Ankara, Istanbul, Marmaris and elsewhere, such as the Asian side entrance of the Bosphorus Bridge, but failed to do so after forces loyal to the state defeated them.

  The Council cited an erosion of secularism, elimination of democratic rule, disregard for human rights, and Turkey’s loss of credibility in the international arena as reasons for the coup. The government said the coup leaders were linked to the Gülen movement, which is designated as a terrorist organization by the Republic of Turkey and led by Fethullah Gülen.

  Tyler Durden
  Tue, 04/06/2021 – 02:45

• Is War Between Russia And Ukraine Now Inevitable?
  Is War Between Russia And Ukraine Now Inevitable?

  Via Southfront.org,

  The situation in Eastern Ukraine is critical. Russia and Ukraine are on the brink of an open armed conflict. In this context, many military experts suggest their opinions and forecasts on the military developments in the region. The position of famous warlord Igor Strelkov is definitely one that deserves special attention.

  

  Igor Streikov

  He became popular during the so-called Crimean Spring in 2014. Strelkov took part in the process of the Crimean unification with Russia, after which in Eastern Ukraine, he was one of the first who organized an open resistance to the nationalist forces that had earlier staged a coup in Kiev. During his military activity, he became more and more critical of Kremlin’s factual position. According to his later statements, the situation in Donbass remains close to disastrous due to the policy of the definite part of the Russian elite. Asserting his views, Strelkov even got in conflict with the Russian President’s adviser at that time Vladislav Surkov. As a result, Strelkov was forced to leave Eastern Ukraine and lost the opportunity to influence in the situation in the region.

  In ideology, Strelkov’s vision may be characterized in terms that today become known as “Orthodox socialism.” This concept is based on justice, conciliarity, national unity and social responsibility.

  Strelkov is widely known as a strong supporter of the so-called “Russian world” concept. This term despite the using of the word “Russian” has nothing to do with nationalism or a hurrah-patriotic adherence to the ideas of monarchism.

  “The Russian world (Pax Rossica) is the social totality associated with Russian culture. Russkiy Mir is the core culture of Russia and is in interaction with the diverse cultures of Russia through traditions, history and the Russian language. It comprises also the Russian diaspora with its influence in the world. The concept is based on the notion of “Russianness”, and both have been considered ambiguous. The Russian world and awareness of it arose through Russian history and was shaped by the respective period.

  The term received a new sound in the 21st century against the background of the restoration of the foreign policy influence of the Russian state, on the one hand, and the intensifying attacks on Russian culture and the Russian language in the former Soviet republics, on the other.

  Today the “Russian world” is often indicated as a threat in speeches of Moscow’s geopolitical rivals, justifying the need to contain Russia.”

  In the politic field, Strelkov is a supporter of the authoritarian strong Russian state, where social life is based on the principles indicated above.

  In military terms, during the hostilities in 2014-2015 and to the present, he claimed that the only chance to ensure peace in Eastern Ukraine was a full participation of the Russian army and taking control of the Ukrainian territory at least to the Dnieper River.

  Thus, Igor Strelkov is a rather controversial person. However, he is one of the few alive warlords of the 2014-2015 period, who deeply knows the situation inside the region, simultaneously being a dogged critic of Kremlin policy. His analysis is very valuable for predicting the situation and simulation of possible developments.

  “At the end of the day:

  1. The war between Russia and Ukraine is inevitable, but at the moment (in April), it is very likely;

  2. For Russia and the Russian People, war “now” is preferable to war later;

  3. The USA now will not fight for Ukraine with 99% probability;

  4. Comments were disabled, I will not answer clarifying questions in private messages.” – Strelkov wrote in Telegram and Vkontakte.

  On April 4, he published a post on his Telegram channel reflecting his opinion on the current situation in Eastern Ukraine. There were 3 main ideas:

  The first one was that the war between Russia and Ukraine is inevitable, but at the moment (in April), it is very likely.

  Many military experts agree with his opinion about state of affairs in the region.

  The development of the current political situation in Russia, whatever directions it would move in, sooner or later will lead to an armed conflict with Ukraine. No matter which side would instigate the conflict. If the power remains in the hands of the so-called “Putin’s team”, the conflict will develop according to the current scenario and, as a result, most likely it will dissolve into armed one in short or mid terms. Even in case of radical changes in Russia and the coming to power of pro-Western opposition, the escalation would not be avoided. The Ukrainian military thought is based on the core ideas of deoccupation of the Eastern regions and taking control, in its further advance, over a good part of Russian territory. For example, it is referring to the Rostov, Krasnodar and even Volgograd regions. Thus, the weakening of Russia as a result of internal political turmoils may lead to the decision of the current Ukrainian leadership to start a major military operation in the regions with strategic goal to give checkmate to the Russian Federation.

  Secondly, for Russia and the Russian People, war “now” is preferable to war later.

  Igor Strelkov adheres to this position throughout the entire conflict in Ukraine. The longer the conflict drags on, the more the nationalist regime that came to power in Ukraine strengthens. At the same time in Russia, the so-called “Crimean effect”, i.e. social excitement, build-up caused by Russian geopolitical successes in 2014-2016, is weakening. In previous years, this phenomenon contributed to increase the level of support for the Putin’s government.

  Today, when the conflict in Eastern Ukraine has been persisting for 7 years, any attempts to settle it peacefully are ineffective. Considering the complicated political situation in Russia, there are no signs that the current government has found a recipe to prevent further internal deterioration. Thus, the longer the hot phase of the conflict would be postponed, the worse the conditions of the Russian side would be.

  In its turn, the hot phase of the conflict in Eastern Ukraine may become a kind of medicine necessary for Moscow that would be used as an internal unifying factor.

  Thirdly, the USA now will not fight for Ukraine with 99% probability.

  Firstly, one should take into account the current domestic political situation in the United States, where a transitional period with the new government is taking place. A participation in a military conflict is possible only if there are threats to a key ally of the Americans, which Ukraine is not.

  Secondly, the global foreign policy situation is not favorable for the deployment of US forces far beyond the country’s borders. The Biden administration must first of all confront the growing global influence of China, which is also likely to be indirectly involved in the military conflict in Ukraine, for example, through financial support. On April 2, Russian Foreign Minister Sergey Lavrov received Zhang Hanhui, Ambassador of the People’s Republic of China to the Russian Federation. The exact topics that were discussed during the negotiations were not unveiled, but it is not difficult to assume that the military escalation in the Donbass region became part of the talks.

  At the same time, the position of the United States in the Middle East is not stable. The Biden administration is actively working to regulate the relations with key partners in the region, developing its position on the main issues, including the Iranian nuclear deal, the Syrian crisis, the situation in Iraq, etc.

  At the moment, Washington has a number of problems of paramount importance for maintaining its global influence, which does not allow it to openly intervene in the approaching war in Ukraine. However, in the near future, in a year or more, the Biden administration will strengthen US positions in key regions. Nothing will be able to contain it.

  Tyler Durden
  Tue, 04/06/2021 – 02:00

• Escobar: How Eurasia Will Be Interconnected
  Escobar: How Eurasia Will Be Interconnected

  Authored by Pepe Escobar via The Asia Times,

  The extraordinary confluence between the signing of the Iran-China strategic partnership deal and the Ever Given saga in the Suez Canal is bound to spawn a renewed drive to the Belt and Road Initiative (BRI) and all interconnected corridors of Eurasia integration.

  

  This is the most important geo-economic development in Southwest Asia in ages – even more crucial than the geopolitical and military support to Damascus by Russia since 2015.

  Multiple overland railway corridors across Eurasia featuring cargo trains crammed with freight – the most iconic of which is arguably Chongqin-Duisburg – are a key plank of BRI. In a few years, this will all be conducted on high-speed rail.

  The key overland corridor is Xinjiang-Kazakhstan – and then onwards to Russia and beyond; the other one traverses Central Asia and Iran, all the way to Turkey, the Balkans, and Eastern Europe. It may take time – in terms of volume – to compete with maritime routes, but the substantial reduction in shipping time is already propelling a massive cargo surge.

  The Iran-China strategic connection is bound to accelerate all interconnected corridors leading to and crisscrossing Southwest Asia.

  Crucially, multiple BRI trade connectivity corridors are directly linked to establishing alternative routes to oil and gas transit, controlled or “supervised” by the Hegemon since 1945: Suez, Malacca, Hormuz, Bab al Mandeb.

  Informal conversations with Persian Gulf traders have revealed huge skepticism about the foremost reason for the Ever Given saga. Merchant marine pilots agree that winds in a desert storm were not enough to harass a state of the art mega-container ship equipped with very complex navigation systems. The pilot error scenario – induced or not – is being seriously considered.

  Then there’s the predominant shoptalk: stalled Ever Given was Japanese owned, leased from Taiwan, UK-insured, with an all-Indian crew, transporting Chinese merchandise to Europe. No wonder cynics, addressing the whole episode, are asking, Cui Bono?

  Persian Gulf traders, in hush hush mode, also drop hints about the project for Haifa to eventually become the main port in the region, in close cooperation with the Emirates via a railway to be built between Jabal Ali in Dubai to Haifa, bypassing Suez.

  Back to facts on the ground, the most interesting short-term development is how Iran’s oil and gas may be shipped to Xinjiang via the Caspian Sea and Kazakhstan – using a to-be-built Trans-Caspian pipeline.

  That falls right into classic BRI territory. Actually more than that, because Kazakhstan is a partner not only of BRI but also the Russia-led Eurasia Economic Union (EAEU).

  From Beijing’s point of view, Iran is also absolutely essential for the development of a land corridor from the Persian Gulf to the Black Sea and further to Europe via the Danube.

  It’s obviously no accident that the Hegemon is on high alert in all points of this trade corridor. “Maximum pressure” sanctions and hybrid war against Iran; an attempt to manipulate the Armenia-Azerbaijan war; the post-color revolution environment in both Georgia and Ukraine – which border the Black Sea; NATO’s overarching shadow over the Balkans; it’s all part of the plot.

  Now get me some Lapis Lazuli

  Another fascinating chapter of Iran-China concerns Afghanistan. According to Tehran sources, part of the strategic agreement deals with Iran’s area of influence in Afghanistan and the evolution of still another connectivity corridor all the way to Xinjiang.

  And here we go back to the always intriguing Lapis Lazuli corridor – which was conceptualized in 2012, initially for increased connectivity between Afghanistan, Turkmenistan, Azerbaijan, Georgia and Turkey.

  Lapis Lazuli, wonderfully evocative, harks back to the export of an array of semiprecious stones via the Ancient Silk Roads to the Caucasus, Russia, the Balkans and North Africa.

  Now the Afghan government sees the ambitious 21st century remix as departing from Herat (a key area of Persian influence), continuing to the Caspian Sea port of Turkmenbashi in Turkmenistan, via a Trans-Caspian pipeline to Baku, onwards to Tblisi and the Georgian ports of Poti and Batumi in the Black Sea, and finally connected to Kars and Istanbul.

  This is really serious business; a drive that may potentially link the Eastern Mediterranean to the Indian Ocean.

  Since Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan signed the Convention on the Legal Status of the Caspian Sea in 2018, in the Kazakh port of Aktau, what’s interesting is that their major issues are now discussed at the Shanghai Cooperation Organization (SCO), where Russia and Kazakhstan are full members; Iran will soon be; Azerbaijan is a dialogue partner; and Turkmenistan is a permanent guest.

  One of the key connectivity problems to be addressed is the viability of building a canal from the Caspian Sea to Iran’s shores in the Persian Gulf. That would cost at least US$7 billion. Another issue is the imperative transition towards container cargo transport in the Caspian. In SCO terms, that will increase Russian trade with India via Iran as well as offering an extra corridor for China trade with Europe.

  With Azerbaijan prevailing over Armenia in the Nagorno-Karabakh flare up, while finally sealing a deal with Turkmenistan over their respective status in the Caspian Sea, impetus for the western part of Lapis Lazuli is now in the cards.

  The eastern part is a much more complicated affair, involving an absolutely crucial issue now on the table not only for Beijing but for the SCO: the integration of Afghanistan to the China-Pakistan Economic Corridor (CPEC).

  In late 2020, Afghanistan, Pakistan and Uzbekistan agreed to build what analyst Andrew Korybko delightfully described as the PAKAFUZ railway. PAKAFUZ will be a key step to expand CPEC to Central Asia, via Afghanistan. Russia is more than interested.

  This can become a classic case of the evolving BRI-EAEU melting pot. Crunch time – serious decisions included – will happen this summer, when Uzbekistan plans to host a conference called “Central and South Asia: Regional Interconnectedness. Challenges and Opportunities”.

  So everything will be proceeding interconnected: a Trans-Caspian link; the expansion of CPEC; Af-Pak connected to Central Asia; an extra Pakistan-Iran corridor (via Balochistan, including the finally possible conclusion of the IP gas pipeline) all the way to Azerbaijan and Turkey; China deeply involved in all these projects.

  Beijing will be building roads and pipelines in Iran, including one to ship Iranian natural gas to Turkey. Iran-China, in terms of projected investment, is nearly ten times more ambitious than CPEC. Call it CIEC (China-Iran Economic Corridor).

  In a nutshell: the Chinese and Persian civilization-states are on the road to emulate the very close relationship they enjoyed during the Silk Road-era Yuan dynasty in the 13th century.

  INSTC or bust

  An extra piece of the puzzle concerns how the International North-South Transportation Corridor (INSTC) will mix with BRI and the EAEU. Crucially, INSTC also happens to be an alternative to Suez.

  Iran, Russia and India have been discussing the intricacies of this 7,200 km-long ship/rail/road trade corridor since 2002. INSTC technically starts in Mumbai and goes all the way via the Indian Ocean to Iran, the Caspian Sea, and then to Moscow. As a measure of its appeal, Azerbaijan, Armenia, Belarus, Kazakhstan, Tajikistan, Kyrgyzstan, Ukraine, Oman, and Syria are all INSTC members.

  Much to the delight of Indian analysts, INSTC reduces transit time from West India to Western Russia from 40 to 20 days, while cutting costs by as much as 60%. It’s already operational – but not as a continuous, free flow sea and rail link.

  New Delhi already spent $500 million on a crucial project: the expansion of Chabahar port in Iran, which was supposed to become its entry point for a made in India Silk Road to Afghanistan and onward to Central Asia. But then it all got derailed by New Delhi’s flirting with the losing Quad proposition.

  India also invested $1.6 billion in a railway between Zahedan, the key city in southeast Iran, and the Hajigak iron/steel mining in central Afghanistan. This all falls into a possible Iran-India free trade agreement which is being negotiated since 2019 (for the moment, on stand-by). Iran and Russia already clinched a similar agreement. And India wants the same with the EAEU as a whole.

  Following the Iran-China strategic partnership, chairman of the Iranian Parliament’s National Security and Foreign Policy Committee, Mojtaba Zonnour, has already hinted that the next step should be an Iran-Russia strategic cooperation deal, privileging “rail services, roads, refineries, petrochemicals, automobiles, oil, gas, environment and knowledge-based companies”.

  What Moscow is already seriously considering is to build a canal between the Caspian and the Sea of Azov, north of the Black Sea. Meanwhile, the already built Caspian port of Lagan is a certified game-changer.

  Lagan directly connects with multiple BRI nodes. There’s rail connectivity to the Trans-Siberian all the way to China. Across the Caspian, connectivity includes Turkmenbashi in Turkmenistan and Baku in Azerbaijan, which is the starting point of the BTK railway through to the Black Sea and then all the way from Turkey to Europe.

  On the Iranian stretch of the Caspian, Amirabad port links to the INSTC, Chabahar port and further on to India. It’s not an accident that several Iranian companies, as well China’s Poly Group and China Energy Engineering Group International want to invest in Lagan.

  What we see in play here is Iran at the center of a maze progressively interconnected with Russia, China and Central Asia. When the Caspian Sea is finally linked to international waters, we will see a de facto alternative trade/transport corridor to Suez.

  Post-Iran-China, it’s not far-fetched anymore to even consider the possible emergence in a not too distant future of a Himalaya Silk Road uniting BRICS members China and India (think, for instance, of the power of Himalayan ice converging into a shared Hydropower Tunnel).

  As it stands, Russia is very much focused on limitless possibilities in Southwest Asia, as Foreign Minister Sergey Lavrov made it clear in the 10th Middle East conference at the Valdai club. The Hegemon’s treats on multiple fronts – Ukraine, Belarus, Syria, Nord Stream 2 – pale in comparison.

  The new architecture of 21st century geopolitics is already taking shape, with China providing multiple trade corridors for non-stop economic development while Russia is the reliable provider of energy and security goods, as well as the conceptualizer of a Greater Eurasia home, with “strategic partnership” Sino/Russian diplomacy playing the very long game.

  Southwest Asia and Greater Eurasia have already seen which way the (desert) winds are blowing. And soon will the masters of international capital. Russia, China, Iran, India, Central Asia, Vietnam, Indonesia, the Korean Peninsula, everyone will experience a capital surge – financial vultures included. Following the Greed is Good gospel, Eurasia is about to become the ultimate Greed frontier.

  Tyler Durden
  Mon, 04/05/2021 – 23:40

• Chicago Shootings In March Top Four Year High As Mayor Lightfoot's Plan To Combat Crime Fails  
  Chicago Shootings In March Top Four Year High As Mayor Lightfoot’s Plan To Combat Crime Fails  

  Two years since Chicago mayor Lori Lightfoot won that runoff election, her multi-year plan to combat violent crime across the Democratic-run city is in shambles. 

  The Chicago Police’s Monthly Crime Newsletter shows the number of shootings in the metro area in March – and the number of shooting victims – jumped to a four-year high. The report is a stark reminder of Lightfoot’s anti-violence plan to reduce violent crime and rebuild communities has hit a snag. 

  In March, there were 233 shooting incidents and 298 shooting victims, the report showed. This compares to 146 shootings and 175 victims in March 2020, 136 shooting incidents and 165 victims in March 2019, and 136 shootings, with 151 victims in March 2018. 

  Homicides in the Democratic stronghold city were up 33% in the first three months of this year compared with the same period in 2020. For the same period, shootings were up 40%. 

  The surge in violence comes as Lightfoot is fighting the unprecedented socio-economic impacts of COVID-19 across the metro area. Her multi-year plan to heal the community, protect and secure public places, improve policing, among other goals, has yet to decrease violent crime.

  At some point, her stated goals will have to come into question as some public health experts warn of a “perfect storm” of socio-economic collapse, virus pandemic, mental health crisis, and drug epidemic are some factors resulting in the wave of violent crime. There’s also a community-based movement calling for de-policing that continues to widen the trust between the community and police. 

  Just this weekend alone, seven people were killed and at least 27 others wounded in shootings across the city. An uptick in shootings and violence could be associated with warmer weather trends as criminal gangs fight for turf. 

  Data compiled by HeyJackass shows on a year-to-date basis, homicides, and shootings are significantly higher than last year. This is problematic ahead of the summer season when much of the killing occurs.

  54 people were shot last week in #Chicago, 7 fatally.

  Same week last year: 45 shot, 6 fatally.

  2021 YTD: 149 killed, 632 wounded
  2020 YTD: 112 killed, 459 wounded pic.twitter.com/rxEnNa0jmC

  — HeyJackass.com (@w_h_thompson) April 5, 2021

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  On a community basis, HeyJackass shows a high number of homicides and shootings have occurred in Englewood, Grand Crossing, Austin, and Garfield Park. 

  

  In the last 30 days, 52 people have been killed and 257 wounded. 

  

  Black-on-Black shootings in Chicago are out of control,

  

  Already, the year-to-date homicide trend in 2021 appears to be nearing the decade record. This suggests momentum in violent crime will continue into summer. 

  

  Chicago’s situation echoes that of many other liberal-run cities, where crime has run rampant since last summer’s “peaceful protests,” which consisted of property damage, assaults, looting, and lighting cities on fire. The latest “police reform” protest turned violent last month. 

  Tyler Durden
  Mon, 04/05/2021 – 23:20

• 88 Years Ago Today, FDR Banned Gold. Will A Bitcoin Ban Be Next?
  88 Years Ago Today, FDR Banned Gold. Will A Bitcoin Ban Be Next?

  Authored by Tho Bishop via The Mises Institute,

  Today is the 88th anniversary of Executive Order 6102, signed by President Franklin Delano Roosevelt, “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.” The order was one of the several disastrous responses to the Great Depression that succeed in escalating the financial crisis. Later in the year, the US Congress would pass a resolution retroactively supporting the legislation, however, it was the determined autocratic leadership of FDR that gave way for these unprecedented measures.

  It would be a crime for Americans to hold gold for over forty years when President Gerald Ford reversed the order in 1974. 

  

  This episode has several lessons for the current financial environment, particularly given the acceleration of tyranny-by-expert rule that has taken over much of the worst this past year.

  The underlying legislation that evoked by FDR’s Executive Order was the Trading with the Enemy Act of 1917 – a byproduct of WWI – despite the fact US was in no way in a period of war in 1932. Similarly, we have seen War on Terror-inspired financial legislation increasingly be used against American citizens. For example, in the name of “fighting terrorism” the US Patriot Act significantly increased Know Your Customer laws, empowering Federal regulators to use the traditional banking system to better track the economic behavior of American citizens.

  In the eyes of the Federal government, “anti-terrorism” legislation was quickly expanded to include additional missions – such as stopping money laundering and drug crimes. Increasingly, these boogeymen have used by policymakers around the world to erode financial privacy assets – such as cash and secret Swiss bank accounts.

  On the domestic side, we have increasingly seen US corporate actors demonstrate their loyalty to the progressive political zeitgeist by pro-actively cracking down on various dissident political figures and conservative action groups. Bank of America, for example, has de-banked various gun manufacturers and also turned over client data following the January 6th protests at the US Capitol. These moves could prove useful if BoA needs another federal bailout from a Biden-Harris administration, but highlights the degree to which the modern financial system can easily be weaponized against a state’s political enemies.

  The same playbook is being increasingly used to target Bitcoin and other cryptocurrencies that are beyond the reach of the state.

  

  Earlier this year, Treasury Secretary Janet Yellen indicated that cryptocurrencies are in her crosshairs, telling an industry roundtable that:

  The misuse of cryptocurrencies and virtual assets is a growing problem….I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.

  European Central Bank President Christine Lagarde has also called for global regulation of cryptocurrencies, responding to increased interest in these alternative assets. Of course, the increased interest in assets like Bitcoin is itself a direct response to the monetary policy of the Federal Reserve, ECB, and other global central banks responding to government-caused economic shutdowns in 2020.

  While central bankers often publicly dismiss the role of non-politicized assets like gold and Bitcoin in financial markets, in their own circles they understand the dangers that exist in allowing the public the option of opting out of their financial schemes.

  For example, at an annual Federal Reserve conference in 2016, the late Marvin Goodfriend noted the role that cash played in limiting what anti-saving policies a central bank could pursue. He advocated the abolishment of cash in return, and drew comparisons to the elimination of the gold standard. In 2018, an IMF report warned that cryptocurrencies could reduce demand in fiat money, and recommended “rigorously applying measures to prevent money laundering and the financing of terrorism” in an attempt to undermine this consumer behavior.

  In addition, central banks have sought to compete with the convenience of digital currency by developing their own versions. China – whose central bank has been one of the most aggressive in credit expansion since 2008 – has recently released a “digital yuan”, while the ECB is working on a “digital euro.”

  As I noted in 2017, this could set up a “next generation” of global currency war between private crypto and state digital currency. Since it is the nature of a state to defend its power, we should expect to see regulators and central bankers around the world escalate regulatory and legal pressure against financial assets beyond their control.

  As FDR’s gold crackdown showed, tyrants know the importance of controlling money in a time of crisis.

  Thankfully, so far Bitcoin has demonstrated to be resilient against the most forceful of state actions. For example, in countries like Morocco – which has banned Bitcoin entirely – peer-to-peer trading of Bitcoin has skyrocketed.

  What will be interesting to see is whether countries that are suspicious of international governing organizations –  such as the IMF, EU, and UN – recognize the political value of private money as a check against globalist political hegemony.

  We’ve seen Russia recognize the value of gold as a check against the weaponization of the dollar, could Bitcoin be next?

  Tyler Durden
  Mon, 04/05/2021 – 23:00

• "We Are Struggling" – Capitol Police Union Head Warns Of Officer Exodus 
  “We Are Struggling” – Capitol Police Union Head Warns Of Officer Exodus 

  The US Capitol Police (USCP) union commander warned of a possible officer exodus and the need to bolster security following the latest attacks. 

  “We are struggling to meet existing mission requirements even with the officers working massive amounts of forced overtime,” Gus Papathanasiou, chairman of the Capitol Police Labor Committee, said in a statement.

  “I’ve had many younger officers confide in me that they’re actively looking at other agencies and departments right now.”

  

  USCP has had a remarkably traumatic year. Last Friday, the latest incident occurred when a driver slammed into a barricade, killing one officer and injuring another. The attack came months after Trump supporters stormed the Capitol complex on Jan. 6, injuring 80 officers. 

  “We have now lost two officers in the line of duty this year,” Papathanasiou said.

  “Another officer has taken his own life, and we have 80 officers who were seriously injured in the insurrection. Some of those injured officers may never return to duty.”

  The union chief said police are short-staffed and morale is low. Younger officers are moving to other agencies or departments, and older officers are putting in their retirement papers. 

  “In the next three to five years, we have another 500 officers who will be eligible to retire,” he said.

  “Many of these officers could put in their retirement papers tomorrow.”

  Papathanasiou said the department is 233 officers below its authorized level of more than 2,000. The shortage has already forced some officers to work “massive amounts of forced overtime,” he added. 

  The Capitol Police is the law enforcement agency responsible for protecting Congress – its members, visitors, and facilities. 

  … and perhaps the shortage that could transform into a mass exodus at any moment is the reason why the Pentagon recently extended National Guard presence around the Capitol complex

  Tyler Durden
  Mon, 04/05/2021 – 22:40

• Rebound In Full Swing As Capacity Crowd Expected For Rangers Home Opener
  Rebound In Full Swing As Capacity Crowd Expected For Rangers Home Opener

  One month after Texas Governor Greg Abbott lifted the mask mandate and all other anti-pandemic restrictions amid declining hospitalizations and infection rates, the Texas Rangers held their first full-capacity sports game on Monday. 

  For now, the lockdown nightmare is over, for millions of Texans, with at least 38,238 of them attending the first home game for the team at Globe Life Field in Arlington.  

  So this is what a packed ballpark feels like?! Almost forgot. What a sight! pic.twitter.com/L4nz2lc7fi

  — Sam Gannon (@SamGannon87) April 5, 2021

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  FOX 4 News Dallas-Fort Worth said the game was declared a “sellout” as fans have been waiting nearly a year to attend a game. 

  

  “Been waiting for a while; we are fired up and ready to go,” said fan Lane Smith.

  In fact, this is one of the first full capacity major sports events in the US since the COVID-19 pandemic began more than a year ago. With the stands full, event staff made sure fans were abiding by safety guidelines.

  “After being safe for a year, to be in a large crowd, it’s just a little nervous,” said fan Carmen Smith.

  “Yes, there are some mild concerns, but it seems as if people are being safe, and we are being as safe as we can be,” said Tommy Ware.

  Some of the safety guidelines included mandatory mask-wearing inside the ballpark despite Abbott’s lift on the mask mandate. 

  Home opener #Rangers pic.twitter.com/KTMkjMxqFQ

  — Mike Doocy (@MikeDoocyFox4) April 5, 2021

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  Abbott’s anti-pandemic measures had drawn the ire of other governors, CDC, and the Biden administration. 

  The Rangers game comes one day after Michael Osterholm, an adviser to President Biden’s coronavirus task force, told NBC’s “Meet the Press” that “the highest number of cases reported globally since the beginning of the pandemic” will occur in the coming weeks. 

  Despite the federal government’s fearmongering, Texas health officials reported around 1,000 new infections on Monday, the lowest since June 2020. 

  

  The Ranges said Abbott’s lifting of health restrictions allowed full capacity for Monday’s home game. 

  “We waited for one year to open this business with Rangers fans in it. Certainly excited when the governor issued the executive order on March 2 to give us that capability,” said Rob Matwick, the Rangers executive vice president of ballpark operations. “When we found out that would be the opportunity, we certainly look forward to welcoming as many fans as we can this season.”

  About a month after Abbott eased virus restrictions, the state has not observed a surge in new infections. People are cautiously emerging from their homes, trying to remember what it was like in pre-COVID times. Perhaps the best way to feel liberated from the draconian lockdown measures is for people to get outside and attend a good old fashion baseball game.

  Those in other states who don’t have the luxury to attend a major sports event because of restrictions, try visiting parks, pick up a new outdoor hobby, and or just go outside and relax. 

  Tyler Durden
  Mon, 04/05/2021 – 22:20

• Senate Parliamentarian Sets Dangerous Precedent, Grants Schumer Permission For Second Reconciliation Vote
  Senate Parliamentarian Sets Dangerous Precedent, Grants Schumer Permission For Second Reconciliation Vote

  Congressional Democrats are resorting to desperate and undemocratic measures to bulldoze new legislation into law, which – as Politico warns – “could set a significant new precedent by empowering any party in full control of Washington to stretch the limits of its power.”

  

  At issue; Senate Majority Leader Chuck Schumer says his office was just given the green light by the chamber’s parliamentarian to use the budget reconciliation process for a second time to “recycle the fiscal ’21 budget resolution,” which only requires a simple majority to pass certain measures as opposed to a bipartisan 60 votes currently mandated by the Senate filibuster rule, according to Politico‘s Caitlin Emma.

  Schumer scores a major win with Senate parliamentarian, who says he can recycle the fiscal ’21 budget resolution to deploy reconciliation for a second time.

  Could have *huge* repercussions for the use of reconciliation moving forward: https://t.co/AW4ZvmMu9M

  — Caitlin Emma (@caitlinzemma) April 5, 2021

  “The Parliamentarian has advised that a revised budget resolution may contain budget reconciliation instructions,” reads a statement from Schumer’s office, adding that “While no decisions have been made on a legislative path forward using section 304 and some parameters still need to be worked out, the Parliamentarian’s opinion is an important step forward…”

  Infrastructure news: Chuck Schumer’s office says the parliamentarian agrees with his interpretation of the Senate budget process, which could enable Democrats to bypass a filibuster and use reconciliation once more in fiscal year 2021 (and several more times next year). pic.twitter.com/OoiEQpd6lX

  — Sahil Kapur (@sahilkapur) April 5, 2021

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  Democrats used budget reconciliation to pave the way for the most recent – and massive – pandemic stimulus bill, allowing them to pass the measure with a 51-vote majority (with Vice President Kamala Harris serving as the tie-breaker).

  As Emma wrote last week, “Democrats could pass Biden’s multi-trillion-dollar infrastructure agenda without GOP support, while keeping another shot at muscling through major priorities that are now stuck on the back burner.”

  The move is certain to set a new precedent for any party that commands ‘every lever of government power’ – “to muscle its priorities past partisan roadblocks by using a process that’s supposed to be an exhausting lift for lawmakers.”

  Now, “reconciliation could technically get used as often as a Senate majority party wants to, provided that it also holds the House and White House. The biggest reason Democrats may not want to use the procedure over and over again, though, is the sheer laboriousness of a process that forces members to spend hours upon hours on the floor in both chambers, in addition to two Senate voting marathons in which anyone can force a roll-call vote on any amendment of their choice,” according to the report.

  “If this is allowed, that’s going to be the thing that limits this process,” said Zach Moller, deputy director of economics at the Third Way think tank, in comments prior to today’s news. “Because Senate floor time is incredibly valuable.”

  That said, Democrats aren’t going to want to use reconciliation every time – as it means that the parliamentarian can scrap portions of Democrats’ legislation if they feel they’re incompatible with various ‘arcane’ rules that dictate when the rule can be used. As such, “Democrats recognize that reconciliation doesn’t work as an end-run around eliminating the filibuster, the 60-vote threshold for passage of most bills that their left flank is pushing to kill for good.”

  “You don’t want to do business via reconciliation all the time,” one House Democratic lawmaker told Politico on condition of anonymity, adding “The Senate is totally screwed up.”

  “The Senate needs to figure out how it wants to be an effective legislative body, and that’s kind of the bottom line,” the added.

  Last week, Senate Minority Leader Mitch McConnell (R-KY) telegraphed the decision – saying “Unfortunately, this looks like it’s not going to head in the direction that I had hoped,” adding “My advice to the administration is, if you want to do an infrastructure bill, let’s do an infrastructure bill. Let’s not turn it into a massive effort to raise taxes on businesses and individuals.“

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  Tyler Durden
  Mon, 04/05/2021 – 22:00

• Blue States Lead US COVID Resurgence As "Double Mutant" Strains Discovered In California
  Blue States Lead US COVID Resurgence As “Double Mutant” Strains Discovered In California

  COVID cases continued to climb in the US over the holiday weekend, as the 7-day average of new cases nationwide topped 64K yesterday, its highest level since March 1. The US reported just under 68K new cases yesterday, along with 804 deaths (for what it’s worth, deaths in the US have continued to decline, as some have theorized that many of the new cases being recorded are the result of false positives).

  

  Source: mSightly

  All told, the US has more than 30.7M confirmed coronavirus cases and 555K deaths.

  Furthermore, Massachusetts public health authorities warned that the Bay State now accounts for roughly 25% of total cases of the P.1 coronavirus “variant” confirmed in the US. the mutant strain was first discovered in Brazil, and has been blamed for driving the sharp acceleration in mortality rates seen among younger patients in Latin America’s largest economy.

  

  Researchers from MIT and Harvard have traced the mutant strain to a cluster on Cape Cod. The state announced the first case of the P.1 variant, which was originally detected in Brazil and is more transmissible than the original strain, on March 16, and said it was identified in a Barnstable County woman in her 30s. She first tested positive for the virus in late February, and at the time officials said there was no information available pertaining to her travel history or illness.

  But Massachusetts isn’t alone: Many of its neighboring northeastern states are also seeing new cases accelerate.

  

  Source: mSightly

  What’s more, 13 US states are now in the highest COVID-19 risk level, up from 11 last week.

  

  Source: mSightly

  In Michigan, one of the states in the “red” column, federal officials have warned about a potential fourth wave of infections as the state emerges as one of the most troublesome hotspots in the country, with average daily infections now 5x higher than they were 6 weeks ago. According to state data, since Feb. 19, average daily new COVID-19 cases among children under 10 jumped 230%, more than any other age group. The second-highest increase in infections is in the 10 to 19 age group, which saw cases rise 227%. The trends in these groups exceed that of the state as a whole. Doctors and infectious disease experts in Michigan attributed much of the rise in pediatric cases to the reopening of schools and youth sports. State data show more than 40% of new outbreaks (defined as two or more cases linked by place and time) have been traced to either K-12 schools or youth programs.

  As reports about the risks posed by mutant strains spread, researchers in California’s Bay Area have confirmed a “double-mutant” strain first identified in India. The strain’s arrival in the US was recently confirmed by researchers at Stanford’s Clinical Virology Lab. Genomic sequencing was used to identify the strain, and at least 7 cases of the variant have been confirmed by the team. The variant is being labeled as the “double mutant” because it carries two mutations in the virus that helps it latch onto cells, according to Fox News.

  “If you are in an elevator with someone that is infected with the variant you are more likely to be infected by that variant,” said Stanford Clinical Virology Lab Director, Dr. Ben Pinsky.

  Pinsky added that the variant could be more infectious because it accounts for 20% of cases in the hard-hit Indian state of Maharashtra. Cases there have increased 50% within the last week, he said.

  As the US reacts to the “mutant” threat, Cornell University officially became the first Ivy League school to follow suit, announcing Sunday night that it plans to require students (and faculty, unlike Rutgers, which gave faculty a pass) to get vaccinated against COVID-19 if they want to be allowed onto the school’s campuses in the fall. The decision follows a similar decision by Rutgers, New Jersey’s flagship public university, announced that it would require all students to be fully vaccinated before returning to campus in the fall,

  Last week, New Jersey-based Rutgers became the first major university to announce that it, too, would require students and staffed to get inoculated before the state of the fall semester.

  ‘With the recent announcements of expanded vaccine eligibility in New York and other states, and increasing vaccine production, it is likely that all members of our community will be able to obtain vaccination sometime this spring or summer,’ Cornell President Martha Pollack and Provost Michael Kotlikoff wrote in a joint statement.

  On the vaccine front, 12 more US states are allowing all adults to sign up for vaccinations starting Monday.

  

  Source: mSightly

  Still, according to pubic health experts, the US is still a ways away from achieving herd immunity. Even after hitting a new record of more than 4M vaccinations delivered over the weekend, only about 18.5% of adults are fully vaccinated.

  Looking abroad, India also made headlines Monday as health officials reported more than 100K new COVID cases over the prior 24 hours – the highest daily tally since late last year. Daily infections in India have climbed 12x since hitting a multi-month loaw in February, as authorities have eased restrictions, and scientists warned that mutant cases have “supercharged” the pandemic. Indian stocks tumbled on Monday, as the country’s resurgent COVID outbreak has horrified investors.

  Tyler Durden
  Mon, 04/05/2021 – 21:40

• Mea Culpa: Oregon's Largest Newspaper Admits Defunding Police Was A Terrible Idea As Homicides Skyrocket
  Mea Culpa: Oregon’s Largest Newspaper Admits Defunding Police Was A Terrible Idea As Homicides Skyrocket

  Oregon’s largest newspaper, The Oregonian, has published a mea culpa over their previous endorsement of defunding the police, after 266 shootings and 25 homicides in the first quarter of 2021. In fact, in a Monday article from the paper’s editorial board, they heaped praise on the city’s gun violence reduction team and defended the mayor’s recent proposal to restart the ‘canceled’ unit after a spate of violence ensued.

  

  “While we supported the move at the time, we – and all Portlanders ­– should recognize what has also been lost. The gun violence reduction team responded to every shooting, identifying incidents that were connected and helping disrupt potential retaliatory action. Officers had established relationships with many of those considered high-risk for being involved in gun-violence, connecting people with resources in the community as well as communicating with them about ongoing disputes to keep violence down. And as part of their work, they took dozens of guns off the street.”

  The paper then slams the city council for ignoring the “reality of the threat” that removing cops from enforcement jobs has had on the city, saying that a proposal by commissioners to hand $3.5 million to unspecified community groups reflects a “startling lack of seriousness, if not outright naivete,” which “fails to show the urgency or understanding of the scope of this crisis.”

  “The council’s three newest commissioners told Mayor Ted Wheeler that they oppose the $2 million proposal to revive the gun-violence unit that he developed with members of the Interfaith Peace & Action Collaborative…”

  https://t.co/Ay6YMgFBfk

  — Ryan Chittum (@ryanchittum) April 4, 2021

  As PJMedia‘s Jeff Wreynolds noted last month, after (George) Floyd’s death, the “defund the police” movement sprung up under misplaced motivations of social justice, and many people died unnecessarily.

  Crime policy expert Sean Kennedy, a fellow at Maryland Public Policy Institute, crunched the numbers, based on Portland Police Bureau stats and media reports:

  • Since June 2020, there has been a 255% increase in murder in Portland through February 2021;

  • Shootings up 173% – by 551;

  • Shootings increased 126% in 2020, and Year to Date have increased 93%.

  The numbers are truly alarming. From January through April 2020, there were a total of three murders in Portland. Just in January and February 2021, we’ve already seen 20 murders. For the period of June 2020 through February 2021, 71 murders have occurred in Portland. That’s a staggering 255% increase over the same period one year prior.

  * * *

  “These shootings and murders are happening now ­­– on streets, in convenience stores, in homeless camps as well as in parks, with homicides occurring at a pace to reach a record-busting 100 this year. Many shootings are tied to retaliatory violence between rival groups – a complex dynamic of relationships, families and history that was well understood by the disbanded Portland Police’s gun violence team but whose connections now go largely unrecognized as investigations are handled by whoever is on duty,” the editorial continues, adding that restarting the gun violence unit would not be an easy undertaking.

  Then, the paper suggests that “somehow” the city has become polarized to the point where everything has been painted as a “zero-sum game” in which “support for one thing translates into rejection of another.”

  When will leftist lawmakers stop making sweeping, kneejerk decisions that affect entire communities so they can signal their virtue? We won’t hold our breath.

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  Tyler Durden
  Mon, 04/05/2021 – 21:20

• Credit Suisse Fires Risk Chief, Others As Archegos Losses Climb To $5 Billion
  Credit Suisse Fires Risk Chief, Others As Archegos Losses Climb To $5 Billion

  Shortly after Credit Suisse dumped its last blocks of the so-called Archegos stocks Monday evening in the US (and in the middle of the night in Switzerland), the Financial Times confirmed rumors from earlier in the day by reporting that Lara Warner, Credit Suisse’s chief risk and compliance officer, had been fired, along with two other senior bankers.

  

  The others included Brian Chin, head of Credit Suisse’s investment banking division, and Paul Galietto, head of equities sales and trading.

  Insider reported Galietto’s departure, while the FT reported on Chin and Warner. Chin was fired since the prime brokerage unit was part of the investment bank.

  

  Brian Chin

  While Warner wasn’t directly involved in nurturing the relationship with Greensill, she did sign off on a $140M bridge loan made by Credit Suisse to Greensill even after other risk managers raised concerns.

  The FT reported that the Archegos collapse and Greensill’s filing for administration had called into question “the risk management processes within the bank.”

  Fair enough.

  Still, by firing Warner, the bank is axing one of the most senior women on Wall Street.

  Having moved from Lehman, Warner had been with Credit Suisse since 2002, rising from senior equity analyst to head of global fixed income research (interesting specialty shift?) to COO of Investment Banking and finally to board member  and Chief Risk and Compliance Officer…

  

  And sits (or sat, we should say) on numerous boards…

  

  As far as optics are concerned, it might lead to some awkwardness, especially as the reins to American rival Citigroup were recently taken over by CEO Jane Fraser, the first female CEO of a Wall Street megabank.

  

  Lara Warner

  As the FT explained, Gottstein, shortly after taking over the bank, expanded the remits of both Warner and Chin, which would in theory give him exposure to the scandal.  Though the firings haven’t been made official, the FT said the bank is expected to announce their departures a soon as Tuesday morning.

  However, as a number of sell-side analysts (and arm-chair commentators) have pointed out, CS has spared CEO Thomas Gottstein, a decision that the bank’s shareholders seem to support, and understandably so.

  “I think it is unfair at this stage to put this on Mr. Gottstein,” David Herro from Harris Associates, one of the bank’s top shareholders, said in a Bloomberg TV interview last week.  

  “He attempted and has been attempting to reorganize Credit Suisse, but Rome wasn’t built in a day. Unless we see evidence to the contrary, I think he is the right person to continue to lead the organization.”

  Setting aside the question of whether Gottstein truly deserves to be fired, it’s important to remember that Switzerland’s second-largest bank is still recovering from 2019’s corporate spying scandal, which resulted in the firing of the bank’s prior CEO, Tidjane Thiam, last February. Firing two CEOs in just over a year would set a new precedent for C-suite churn, even for the famously scandal-prone Swiss bank.

  As we noted earlier, if there’s a silver lining to Monday’s bloc-by-bloc dumps, it’s that Credit Suisse finally appears to be out of inventory to unload (CS having been the only bank involved in the blowup not to release an accounting of its losses). Not long after the FT broke news of the firings, Reuters reported that CS’s losses from the Archegos michegas have reached at least $5 billion. That’s more than the $4 billion initially anticipated, according to “early estimates” quoted by the FT.

  Combined with the $3 billion to $5 billion CS might owe to clients (should it make good on rumors to make some of the clients who lost big on the Greensill funds whole), the bank could be looking at up to $10 billion in losses from the twin crises alone. Fortunately, the SPAC deal boom has continued to drive massive dealmaking activity – the strongest globally since 1980, even as another wave of COVID descends upon the West.

  Tyler Durden
  Mon, 04/05/2021 – 21:00

• One Bank Spoils The Party, Reminds Traders We Are This Close To The "Breaking Point"
  One Bank Spoils The Party, Reminds Traders We Are This Close To The “Breaking Point”

  One look at the S&P500, which closed today at a fresh all time high well above 4,000, suggests that after a period of rangebound trading and some modest quarter-end market jitters, traders once again don’t have a worry on their mind with even mega cap tech stocks ramping in recent days as concerns about reflation and higher rates are seemingly fading away.

  Commenting on the market’s endurance and willingness to push higher even amid higher yields, Bloomberg’s Ye Xie notes that after a record services PMI, and nearly 1 million jobs added, “treasuries barely changed much over the past two days.” As he notes, “that perhaps suggests a lot of bad news for bonds is in the price. After all, the markets have now priced in four rate hikes through the end of 2023, when the Fed indicated it plans to keep rates unchanged throughout.” And with yields stalling, the dollar’s rally seems to also be losing some momentum (ironically, just as Goldman covered its dollar short), and as the DXY index is sitting right at the 200-day moving average. As for equities, Xie notes, “yield stability allows for some breathing room as stock benchmarks hit new records.”

  He is right… the only question is how much longer with this yield stability persist. Because if Deutsche Bank rates strategist Steven Zang is correct, the next move higher in yields is on its way.

  In a note that could sober up some of the stock market Kool-aid drinkers, Zeng reminds us that the amount of outstanding Treasury coupon debt is increasing at a record pace, and “every quarter, the Treasury is adding more than $650bn of new debt to replace the T-bills issued last year and to support new stimulus spending.”

  The math is, to put it mildly, startling: even with the Fed buying substantial amounts, the amount of coupon supply left to private investors is staggering, and it will only go up more once the Fed begins to taper its purchases.

  

  “All of that begs the question: who will buy all these Treasuries”, Zeng asks rhetorically (especially since the Fed’s next move is not more QE but an eventual tapering of QE). As DB recently highlighted, households have taken on an increasing role in Treasuries ownership, accounting for nearly half of total net issuance between 2017 and 2020.

  

  The risk though, as Janet Yellen noted to Congress last week, is that too much Treasury debt owned by households (and in general) could crowd out other forms of productive investment and private spending. This means that overreliance on any one sector to buy that many Treasuries and potentially pushing beyond their natural limit could also spell trouble for the future.

  Zeng then notes that the bank’s model suggests that the increase in coupon issuance since last year has raised the 10y yield by about 48bp, although about 30bp of that is being offset by the Fed buying $80BN per month.

  The question is what all of this comes to a head, and when does the market realize that MMT is nothing but bullshit. Zeng does not know the answer, but writes that “looking ahead, the Treasury will soon do another review of its coupon issuance sizes against the current financing needs; expect the spotlight to be on its decision in a few weeks’ time.”

  Here’s hoping they can pull out another magic money tree out of their hat… or at least a rabbit..

  Tyler Durden
  Mon, 04/05/2021 – 20:40

• Supreme Court Justice Thomas Suggests Facebook, Twitter Could Be Regulated Like Utilities
  Supreme Court Justice Thomas Suggests Facebook, Twitter Could Be Regulated Like Utilities

  Authored by Jack Phillips via The Epoch Times,

  Supreme Court Justice Clarence Thomas appeared to signal that Big Tech firms could be regulated after Facebook and Twitter suspended President Donald Trump earlier this year.

  

  Thomas, considered a conservative on the high court, made the point during a 12-page submission as the Supreme Court issued an order that rejected a lawsuit over Trump’s blocking of certain Twitter users from commenting on his posts before his account was taken down. The Supreme Court said the lawsuit ultimately should be dismissed as Trump isn’t in office anymore and was blocked from using Twitter, coming after the Second Circuit Court of Appeals had ruled against Trump.

  “Today’s digital platforms provide avenues for historically unprecedented amounts of speech, including speech by government actors. Also unprecedented, however, is control of so much speech in the hands of a few private parties,” Thomas wrote Monday (pdf).

  “We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.”

  Thomas also noted there are arguments suggesting digital platforms such as Twitter or Facebook “are sufficiently akin to common carriers or places of accommodation to be regulated in this manner.”

  Thomas made reference to the respective owners of Facebook and Google by name—Mark Zuckerberg, Larry Page, and Sergey Brin.

  “Although both companies are public, one person controls Facebook (Mark Zuckerberg), and just two control Google (Larry Page and Sergey Brin),” he wrote.

  Thomas agreed that Trump’s Twitter account did “resemble a constitutionally protected public forum” in certain aspects, he noted that “it seems rather odd to say that something is a government forum when a private company has unrestricted authority to do away with it,” possibly referring to Twitter’s ban against Trump following the Jan. 6 incident.

  “Any control Mr. Trump exercised over the account greatly paled in comparison to Twitter’s authority, dictated in its terms of service, to remove the account ‘at any time for any or no reason,’” he added.

  “Twitter exercised its authority to do exactly that.”

  Thomas then said that modern technology isn’t easily addressed by existing laws and regulations. But he warned that the Supreme Court may “soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms.”

  “The Second Circuit feared that then-President Trump cut off speech by using the features that Twitter made available to him,” Thomas said.

  “But if the aim is to ensure that speech is not smothered, then the more glaring concern must perforce be the dominant digital platforms themselves. As Twitter made clear, the right to cut off speech lies most powerfully in the hands of private digital platforms. The extent to which that power matters for purposes of the First Amendment and the extent to which that power could lawfully be modified raise interesting and important questions.”

  Thomas noted that Big Tech firms have a vast amount of power over the flow of information—even books. He said it does not matter that Amazon, Facebook, Twitter, and others are not the only ways in which to distribute speech as long as their power to do so is unequaled.

  “A person always could choose to avoid the toll bridge or train and instead swim the Charles River or hike the Oregon Trail,” he wrote. “But in assessing whether a company exercises substantial market power, what matters is whether the alternatives are comparable. For many of today’s digital platforms, nothing is.”

  Tyler Durden
  Mon, 04/05/2021 – 20:20

• Majority Of Americans Reject Democrats' "Election Integrity" Outrage, Support Voter IDs
  Majority Of Americans Reject Democrats’ “Election Integrity” Outrage, Support Voter IDs

  Earlier today, Mitch McConnell blasted the “Outrage Industrial Complex” over the lemming-like response to Georgia’s voting integrity reforms.

  “Our private sector must stop taking cues from the Outrage-Industrial Complex,” McConnell added. “Americans do not need or want big business to amplify disinformation or react to every manufactured controversy with frantic left-wing signaling.”

  It turns out McConnell is right and in fact, a new AP-NORC poll released Friday shows an overwhelming amount of American support requiring identification to vote.

  

  Voter identification requirements are supported by 72% of the public. That popularity is largely driven by support from Republicans, 91% of whom support a requirement that all voters provide photo identification in order to cast their ballot.

  However, as the poll shows, 56% of Democrats also support requiring photo ID to vote.

  

  As AmericanThinker’s Eric Utter recently noted, we live in a hyper-credentialed society.

  • Little girls need a government-granted license to sell lemonade at their sidewalk stands.

  • One must provide a valid photo I.D. and be vetted by the FBI’s National Instant Criminal Background Check System (NICS) – and possibly be subject to a several-day waiting period – to purchase a firearm.

  • One must present a current, valid photo I.D. to cash a check, or buy a loaf of bread, a six-pack of beer, or pack of smokes at a grocery store. 

  • Want to board a plane? I.D. please.

  • And probably soon, a vaccine I.D.

  But one should never have to be troubled to identify oneself to vote for the most powerful person on earth, say Democrats. That would be racist!

  

  It’s sad that even a majority of their voting public disagrees with Democratic politicians’ (admittedly false) narrative over Voter IDs.

  Tyler Durden
  Mon, 04/05/2021 – 20:00

• Peter Schiff: Friday's Payrolls Report Does Not Reflect "Job Creation"
  Peter Schiff: Friday’s Payrolls Report Does Not Reflect “Job Creation”

  Via SchiffGold.com,

  The economy is recovering quickly! Just look at the rebounding jobs market. But in a recent podcast, Peter Schiff poured cold water on the notion that falling unemployment is necessarily a sign of an impending economic boom. After all, people going back to work do not reflect actual job creation.

  

  The March jobs report came in better than expected. According to Labor Department numbers, nonfarm payrolls rose by 916,000 last month, and the unemployment rate declined to 6%. But even within this rosy report, there were some shadows. While the labor participation rate ticked up slightly to 61.5, this remains a very low number.

  So, despite the fact that a lot of people returned to their jobs, there’re still a lot of people that aren’t working at all, thanks in large part to the US government, which is providing tremendous financial incentives for people not to return to work.”

  There are still nearly 7.9 million fewer Americans counted as employed than in February 2020, while the labor force is down 3.9 million.

  Peter said it’s important to keep the jobs report in perspective. It does not reflect a strong economy creating all sorts of new jobs that never existed before.

  This is an economy where jobs that were temporarily put on hold are being restored. People who left their jobs because of the COVID shutdowns are now returning to those jobs.”

  The Labor Department numbers reflect this. The biggest job gains in March were in sectors hardest hit by the government response to the pandemic. The leisure and hospitality sectors showed the strongest gains with 280,000 “new” jobs. Bars and restaurants added 176,000 jobs. Arts, entertainment, and recreation added 64,000 jobs on the month.

  There was also a big jump in education jobs as schools begin to reopen for in-person learning.

  But even with the big job gains, the leisure and hospitality sectors remain 3.1 million jobs below their pre-pandemic total. And Peter noted that all of the people who lost their jobs are not going to return to work.

  Many of the businesses they use to work at are not going to reopen. Or some of the ones that do reopen may only reopen temporarily before they shut down. So yes, we’re going to get some big job numbers in the near term. But don’t confuse that with a booming economy. We’re simply allowing the jobs that we already had and which were temporarily lost to be restored. But again, we’re not going to restore all that was lost due to a lot of the damage that is permanent.”

  We also have to contend with the effects of the government “cure” for the economic hit inflicted by the COVID – the debt, the money printing, all of the new government spending. This is going to take a further toll on an economy that was weak before coronavirus reared its ugly head.

  I expect a lot of the jobs that have been restored to be lost again. Except this time it won’t be a temporary loss. It will be a permanent loss.”

  Even as the number of jobs increased, average hourly earnings ticked down slightly. They were expected to rise 0.2%, but instead, they fell 0.1%. Average hourly earnings year-over-year were also well below estimates. Economists estimated a rise of 4.6%, but it came in at just 4.2%.

  The number of jobs added in the manufacturing sector was less stellar, coming in at an unimpressive 53,000.

  The US continued to lag on manufacturing, which is why our manufacturing trade deficits continue to hit record highs. And I think we’re going to keep setting a string of new record highs in the months ahead because the vast majority of the jobs that we are going to be adding are not going to be in goods-producing jobs but in service-providing jobs. And all these workers are going to need to buy things that other Americans are not making. The stuff that they’re going to be buying are things that workers in other countries that actually have stronger economies are going to be producing. So, the trade deficits are going continue to rise.”

  Peter said the most important thing to keep in mind as you look at these job numbers is that they don’t evidence a strong economy.

  It evidences the inflation that’s being created by the Fed and all of the money that’s being spent by the US government. Yes, if you print enough money and spend enough money, well sure, in the short run, people are going to go back to work as they’re spending all that money. But this is not the result of economic growth. We’re spending money without actually producing the goods to give that money value. We are relying on the goods that are being produced by the rest of the world and their continued willingness to exchange the goods that they produce for the paper that we print. And what we’re ignoring as we’re looking at these strong GDP numbers — we’re not paying attention to the exploding debt, which is making that GDP growth possible.”

  The question is what are the consequences of that debt? How will servicing that debt and trying to repay that debt weigh on future GDP?

  Tyler Durden
  Mon, 04/05/2021 – 19:40

• South Korea's LG Abandons Smartphones As Electric Vehicles Business Sees Explosive Growth
  South Korea’s LG Abandons Smartphones As Electric Vehicles Business Sees Explosive Growth

  Samsung, the world’s biggest smartphone maker, has just cemented its dominance in its home market after one of its earliest domestic competitors, LG, decided to throw in the towel.

  After five years of worsening losses, South Korea’s LG Electronics, a dominant player in the pre-iPhone cellphone market, announced Monday that it would finally exit the smartphone business and instead focus on growth areas, like producing parts for EVs, which are once again ascendant following Tesla’s latest sales figures, published earlier today. Just three weeks ago, LG Energy Solution, the world’s largest producer of electric vehicle batteries, announced plans to invest more than $4.5 billion in the US by 2025 to meet growing consumer demand for non-carbon emitting cars.

  The company cautioned that it will continue support for its phones, with the length of the extension expected to vary depending on the model.

  

  As the FT explains, LG has seen its competitive edge eroded by Chinese firms who create cheaper competitors in the low-to-mid end segment, while its premium phones have been badly outcompeted by Apple and Samsung (despite some stumbles there).

  LG’s mobile phone business has posted cumulative losses of nearly $4.5 billion over the past five years, with its global market share falling to about 2%, according to research provider Counterpoint. The smartphone business generated just $4.6 billion of sales last year, equivalent to just 8.2% of LG’s total revenues. Successive failures for its flagship phones have caused LG to drop out of the global top seven players by market share, as Chinese rivals like Huawei (which has struggled with its own issues thanks to a crackdown by Washington), Xiaomi and Oppo.

  Shareholders have urged LG to wind down the smartphone business, complaining that the money could be better spent on other business lines. The smartphone business has been seen as weighing on the company’s market cap, despite strong growth in premium home appliances and televisions, along with the prospects for its EV business.

  “Being late is always better than never,” said Daniel Kim, an analyst at Macquarie, of LG’s decision to retire from the sector. “It entered the smartphone market too late and couldn’t scale up amid stiff competition in the saturated market.”

  And with President Biden including tens of billions of dollars in handouts to EV makers in his new infrastructure plan, analysts have heralded the company’s investment in its EV partnerships with General Motors – which just unveiled its electric Hummer to much fanfare  – as a major potential moneymaker. Plus, LG’s involvement will help ease supply shortages of critical components like batteries and chips in the US. The company also plans to launch a joint venture with automotive supplier Magna International in July to produce more EV components.

  Tyler Durden
  Mon, 04/05/2021 – 19:20

• Is Outside Air COVID-Safe? Are Masks Needed Outdoors?
  Is Outside Air COVID-Safe? Are Masks Needed Outdoors?

  Via Cliff Mass Weather Blog,

  When I visit parks in Seattle and the region, bike along the Burke Gilman Trail, cross-country ski at WA snowparks, or go hiking in the Cascades, I note that many people are wearing masks outdoors to avoid COVID-19.  A lot of people.

  Some folks are clearly afraid and fearful of COVID exposure outdoors.  For example, I often see individuals making a point to avoid unmasked bikers or joggers on the Burke-Gilman trail…moving 5-10 feet off the trail and sometimes turning away. Occasionally it gets tense, as when one local scientist (not me) was angrily called a “Republican” when he was walking in a park without a mask.  

  The fear of outdoor spread even hit the management of Seattle Parks last year, when several parks and their parking lots were closed because of COVID fears.

  

  Photo by Nate Loper Through a Creative Commons License

  It is time to bring science to this issue and to relieve the worries of many who wish to enjoy outdoor recreation.

  In this blog, I will tell you about measurements of carbon dioxide (CO2) I took around Seattle this weekend, measurements that suggest little threat of COVID transmission outdoors. I will also review some of the latest scientific literature, which again does not indicate a significant threat of COVID transmission in the outside air.

  The message of this information is obvious: wearing masks outdoors does not appear to be necessary.

  My Field Experiment Around Seattle

  In my experiment, I used a sensitive CO2 sensor that makes use of proven measurement technology (see below).  Human breathing puts out a lot of CO2, roughly 4 percent by volume or roughly 40,000 parts per million (ppm).  The background level of CO2 in the free atmosphere is currently approximately 415 ppm…. a concentration much, much less than coming out of our mouths.

  

  Thus, CO2 can act as a tracer of the air coming out of our respiratory systems, something mosquitoes know all about since they use the plume of CO2 we exhale to find us.  By measuring CO2 levels, it is possible to determine the relative concentration of air coming from humans and the degree of dilution by the surrounding air.

  There have been a number of peer-reviewed scientific papers that have shown that CO2 concentrations are a potent tool for evaluating the potential for disease spread by viruses and other agents, with higher concentrations of CO2 associated with more transmission of disease (some examples of relevant scientific papers found here and here).  

  Most of these papers use CO2 to measure the potential for transmission in indoor spaces, so why not take it one step further and evaluate potential disease transmission in the outside environment? That is what I did around Seattle on Saturday, a very nice day (high around 63F) with lots of people in the parks and outdoor locations.

  My CO2 unit reported about 400-405 ppm away from roads and people, and this value represents the background level of carbon dioxide.

  The Burke-Gilman Trail

  My first stop was the crowded Burke Gilman trail, with folks walking, running, and whizzing by continuously.  There was no increase in CO2 concentrations compared to the background at any time (around 400).  Clearly, the diffusion/dispersion/dilution of CO2 by outside environmental air was very large.  And the same would be true of any COVID virus breathed out by anyone on the trail.

  

  Magnuson Park

  I then traveled to Magnuson Park, one of the most popular parks in Seattle.  First, I walked about a half-mile, back and forth, on a crowded path.  No increase in CO2 values above background (still around 400 ppm).  

  Then I decided to really push things and walked around crowded picnic shelters, some with as many as 15-20 peoples without masks. (I suspect they thought I was being a bit odd as I circled around the groups, but this was for science!)   I could find no enhancement of CO2 above the background levels….natural movement of air diffused their CO2 emissions completely.    I did find a weak signal downstream of a raging barbecue fire…but even that was muted (about a 10 ppm increase 40 feet downwind).

  So the bottom line so far:  natural ventilation and mixing in the outside air was effective in diffusing the CO2 emitted by people in an outside park environment, even when there was a high density of people.  And if CO2 enhancement by all the people was undetectable, the same would be true of COVID-19 virus emission by any infected individuals.  Parks appear to be entirely safe locations and masks are not necessary.

  University Village Shopping Center:  Outside and Inside

  Next, I went to the University Village shopping center.  There is a nice little urban park adjacent to the Apple Store.  It was packed with people enjoying the nice weather.  If there was going to be a place where human CO2 would be evident, this would be it, particularly with nearby structures lessening the wind flow.

  

  I walked all around the park, even close to groups of people.  Only background levels of CO2 were observed.  No hint of people’s CO2.  Atmospheric mixing was still large, and thus there was little threat of catching COVID-19 from the general environment.  And I found similar results near lines of individuals waiting to enter some U. Village stores.

  Supermarkets and Indoor Restaurants

  As a little side test, I then went into a busy local supermarket.  The CO2 concentration zoomed up to 830 ppm.  A warning, perhaps, about food stores.  

  Then I went into a restaurant, one that was well ventilated (I could feel the breeze) and with reasonable spacing between tables.   The CO2 level was a very modest 520.  Turns out the restaurant had a CO2 meter, which read 530.   Good confirmation of my calibration and a positive note about the restaurant providing a safe environment for its patrons.

  A Visit to A Gym

  Then I stopped in a local gym, a major one located in northeast Seattle.  Lots of ventilation and the CO2 level was a very modest 465.   A safe place for one’s workout and less than the value in my home (which is about 530).   People are required to wear masks in the gym, but quite honestly they probably aren’t needed.

  Reality Check

  I shared my results with some local air quality experts and a well-known epidemiologist.  They thought my results were reasonable and not surprising.   They acknowledged that COVID transmission is far less problematic outdoors. 

  One suggested that the risk outside was not zero:  imagine if you had a conversation with a highly infectious individual for an extended time at close proximity (within a foot or two), with little wind and the person was upstream of you.  Perhaps.  But you can imagine how unlikely this situation would be.  And easily avoided.

  

  The epidemiologist, although generally agreeing about the safety of outdoor air, suggested the potential for a very short (transient) exposure to the long-distance breath of a COVID-infected person.

  He noted the example of smelling cigar or pot smoke at a distance–might one get exposed to COVID the same way?  I suspect this is highly unlikely. First, large virus-containing droplets tend to fall out close to the infected (that is why there is a six-foot “rule” for separation).  And smaller particles tend to get diluted with distance. But just as important is that current best science suggests that extended or prolonged exposure to a COVID-infected individual is necessary, with the Centers for Disease Control indicating 30 minutes or longer (see here).  That is simply not going to happen outside if you and the source are moving around.

  

  This never made any sense and prevent people from enjoying a healthful environment

  Finally, what does the current scientific literature indicate about outdoor transmission?  The scientific literature is very thin on this topic, but here are some examples:

  • Qian et al., 2020:   Examined 1245 confirmed cases in 120 cities in China and identified only a single outbreak in an outdoor environment, which involved two cases. 

  • Nishiura et al., 2020:  Transmission of COVID-19 in a closed environment was 18.7 times greater compared to an open-air environment (95% confidence interval). (they could not exclude the possibility that the few “outdoor” transmission might have occurred by undocumented indoor transmission)

  • Bulfone et al., 2021:  A review of all the literature on outdoor transmission.  They found only five studies, two of which are above.  They noted the poor quality and inconsistent approaches of most of the studies so far.

  Quite honestly, one can only be disappointed in the quality of the “studies”  on outdoor transmission, which is surprising at this point in time.  Importantly, there is no compelling published research that demonstrates significant outdoor transmission. 

  The Key Message

  My observations of CO2 concentrations suggest that the diffusion, dilution, and dispersion of human exhalations are very large outdoors, making the threat of outdoor COVID-19 transmission very, very low.  This is consistent with the (limited) scientific literature on the topic.

  Outside air is very safe, and it gets even safer during the summer since ultraviolet radiation rapidly kills airborne virus.  The logical conclusion from these results is that wearing a mask outdoors is probably unnecessary. Closing outdoor parks makes no sense at all.

  If any of you see some weaknesses in the above logic, let me know.  That is how science works.

  Tyler Durden
  Mon, 04/05/2021 – 19:00

• Japan Poised To Allow Coast Guard To Fire On Chinese Vessels In New Legislation 
  Japan Poised To Allow Coast Guard To Fire On Chinese Vessels In New Legislation 

  New legislation being considered that would radically alter current Japan Coast Guard policy toward how it engages foreign vessels in Japan’s waters could inadvertently hurl the region toward a hot conflict involving China. 

  The new proposed law comes at a moment of more frequent and heightened incidents between Chinese and Japanese vessels around the contested Senkaku islands near Taiwan (and which happen to also be claimed as Taiwan’s). Currently Japan doesn’t have a mechanism which would activate its Self-Defense Forces in any entanglement with Chinese fishermen landing on the islands, which might escalate to involve Chinse military patrols. 

  But that could change, especially after Beijing recently allowed its own coast guard to be militarized at a moment it attempts to stave off regional rivals’ claims to islands in the East and South China Seas. Tokyo is preparing to beef up is own ability for an immediate and rapid response, as Nikkei details of the new legislation: “The Japanese government says the Police Duties Execution Act allows ships to fire on vessels to halt an unauthorized landing,” Further it explains, “If the police or coast guard is unable to mount an adequate response, then a phone call and a snap decision by the Cabinet would mobilize the Self-Defense Forces to a police operation.”

  

  And here’s more on why Japan considers the beefing up of its rules of engagement necessary, according to Nikkei: 

  Unconvinced, LDP lawmakers involved in defense policy last week put together a proposal for legislation that “fills the gap.”

  The document calls for amending Japan’s coast guard law. The changes would allow coast guard vessels, within the bounds of international law, to use arms against foreign ships that refuse to comply with expulsion orders.

  The caucus is also pushing for rules that would allow the deployment of the Japanese Ground Self-Defense Force to remote islands in advance to cut down on the response time in the event of a hostile situation.

  It would take current potential conflict situations that previously were dubbed ‘gray-zone’ matters – which fall short of allowing for hostile engagement – and would effectively allow for the weaponization of the coast guard to stave off a surprise takeover of an island (such as in the Senkakus). 

  

  The Nikkei report describes that one common emerging view among Japanese officials is that China is indeed preparing to dramatically scale-up its presence in the Senkakus and other contested islands in a bid to assert control.

  This, the report says, is likely to lead to a “nightmare scenario” for the Japan Coast Guard, which goes something like this:

  A Chinese fishing boat breaks down near Japan’s Senkaku Islands. China, which claims the islands and calls them the Diaoyu, instructs its own coast guard to protect the boat. The fishermen land on one of the islands to wait for repair parts, ignoring warnings by Japan. Amid tension and confusion, alarmed China coast guard personnel start firing at their Japanese counterparts.

  Amid repeated Chinese incursions in waters near the Senkakus, such scenarios are not out of the question any more. Discussions within Japan’s ruling party have reignited regarding the need for legislation that explicitly lays out the rules of engagement in such cases.

  China has spent years warning Tokyo over the islands which have been contested for over a century, with the United States officially recognizing Japan’s claims over the uninhabited islands, and with Biden previously reiterating America’s commitment to protective them in accord with Article 5 of the US-Japan Security Treaty.

  

  Despite Japan laying claim to the islands since 1895 China began strongly reasserting claims especially in the 1970s, triggering a crisis which became more acute after in 2012 when Japan’s government purchased three of the disputed islands from a private owner. The area is considered potentially resource-rich, including likely oil and gas reserves, along with being considered excellent fishing grounds and close to key shipping lanes. 

  Tyler Durden
  Mon, 04/05/2021 – 18:40

• Monetary Policy At A Crossroad: Policymakers Need To Break Promise Of Easy Money To Avoid Boom-Bust
  Monetary Policy At A Crossroad: Policymakers Need To Break Promise Of Easy Money To Avoid Boom-Bust

  Submitted by Joseph Carson, former chief economist at Alliance Bernstein

  The Federal Reserve’s new policy approach is that policymakers want to see “actual progress, not forecast progress” before deciding to change its policy stance. Substantial actual progress is occurring in the economy, some places faster than others. How much monetary accommodation is needed to meet the ultimate employment and inflation objectives is debatable. But it is less than when the pandemic started and less after the passage of $1.9 trillion in federal stimulus.

  Determining when a policy stance has become too accommodative is not an easy matter—but enabling excessive risk-taking to become well-entrenched is comparable to past policy mistakes by allowing a build-up of inflation and inflation expectations. Both are difficult to unwind, and past episodes have shown it is impossible without triggering significant adverse effects in the economy.

  Evidence of Actual Economic Progress & Excessive Risk-Taking

  Employment and Jobless Rate: In March, payroll employment increased 916,000, far above market expectations, bringing the three-month job gains of Q1 to 1.6 million. The strong string of monthly job gains helped lower the jobless rate by 0.7 percentage points, from 6.7% to 6.0%.

  Job gains in Q2 could easily double Q1 numbers. The rapid increase in vaccinations, enabling the many parts of the economy to re-open, especially travel and schools, will trigger outsized solid job gains. By mid-year, the jobless rate could drop a whole percentage point to 5%, getting very close to the Fed’s year-end target of 4.5%.

  Does it make sense to maintain the same monetary accommodation scale with the jobless rate at 5% as when it was 10% one year earlier?

  Manufacturing, Growth & Inflation Outlook: The Institute of Supply Management (ISM) composite diffusion index for manufacturing in March increased 4 points to 64.7%, the highest reading in 37 years. The substantial gains in new orders and production provide hard evidence of rapid economic growth in Q1 and coming quarters.

  But there are also signs of more inflation. The prices paid diffusion index at 85.6, off 0.4 points, remained at a relatively high level. A diffusion index does not distinguish between the scale of the gains and declines, so it is unclear how much inflation is in the pipeline. However, purchasing managers listed 57 commodities rising in price (not sure if that is a record number) and 25 items in short supply, which together speak of a broad range of price and cost pressures hitting companies.

  Does it make sense to maintain the same monetary accommodation scale from a year ago now that the growth and inflation outlook has flipped?

  Inflation & Housing: The Federal Reserve is committed to hitting the 2% general inflation target, but in doing so, they are fueling a fire-storm in the housing market.

  The house price index published by the Federal Housing Finance Agency (FHFA) is up 12% in the last twelve months, pushing house prices to record levels. That compares to the 2% increase in the imputed owners’ rent used to calculate the consumer price index. The gap of 1000 basis points between actual house prices and implied rents is 200 basis points wider than the gap during the peak of the housing bubble of the early 2000s.

  Oddly, policymakers employ the same monetary tools of zero official rates and massive purchases of mortgage back securities today to support the housing market as they did after the housing bubble burst in 2008/09.

  How can the Fed justify the same monetary accommodation scale for the housing sector when prices rise at a double-digit pace and when they fall double-digits?

  Finance & Risk-Taking: In Q1, the broad equity markets reached record levels, extending the fast gains of 2019 and 2020. Domestic equities’ market value has increased 50% or $16 trillion to $48.7 trillion in the past two years. At least one policymaker had acknowledged the dizzying heights of asset prices.

  Last week, Federal Reserve Bank of Dallas President Robert Kaplan stated, “There’s no question that financial assets, broadly, are at elevated valuation levels.” Mr.Kaplan went on to say that he was “concerned about excess risk-taking and if risk-taking goes too far, whether it creates excesses or imbalances, that could ultimately create challenges..”

  The Fed’s dot plot suggests that policymakers plan to maintain the same monetary accommodation scale for the next three years. That creates a vision of continued gains in equity prices and encourages speculation and excessive risk-taking.

  The overly stimulative monetary policy stance is evident in the rapid price increases for residential real estate and financial assets. In the past, policymakers failed to take reasonable steps to head off inflation pressures before they intensified. Nowadays, policymakers need to counter a build-up of excessive increases in asset prices.

  A successful monetary policy is to avoid fueling financial and price imbalances that cut short a business cycle and not hit arbitrary jobless and inflation rates. Policymakers need to signal a break in the promise in its easy money policy soon to avoid a boom-bust economic cycle.

  Tyler Durden
  Mon, 04/05/2021 – 18:20

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• Why US Troops Will Never Be Pulled Out Of Syria
  Why US Troops Will Never Be Pulled Out Of Syria

  Authored by “Ehsani” – a Middle East expert, Syrian-American banker and financial analyst who visits the region frequently and writes for the influential geopolitical analysis blog, Syria Comment. 

  A friend recently asked: “Surely, the American Army is not staying in Syria forever and sooner or later they will leave, no?” To his surprise, my answer was: “No, I don’t think they would leave. Why would they? It costs very little and they incur hardly any casualties.”

  Moreover of all past military interventions in the region, the US presence in Syria is unique in a number of ways. It is relatively small in scope, yet it does achieve a seemingly broad set of objectives both geopolitically and even domestically.

  

  Remember that the initial [ostensible] objective for entering Syria was to fight ISIS. Following the group’s attack on Mosul in June 2014, it only took only 8 weeks for the US to to begin air strikes against them in Iraq. A month later, these strikes were expanded into Syria.

  By December 2017, ISIS had effectively lost 95% of its territory. Even though Iraq’s PM publicly declared victory against the group early that month, US strikes on Syria’s side of the border continued. It took another year till Dec 2018 for Trump to declare the defeat of ISIS.

  You would have thought that Trump would get his way and that he would pull out of Syria after his mission of defeating ISIS was accomplished….But, you would be wrong. Many in the Washington establishment as well regional “allies” would quickly join forces to stop Trump.

  Not surprisingly, the “system’ was able to reverse Trump’s decision. Think Tank and Op-ed pieces were quickly warning about the calamity that would soon follow any troop pull out of Syria. America’s prestige and her national interests were all at stake here, Trump was told.

  Heartbreaking story of a Syrian child killed by US sanctions.

  “Can Biden, Congress, and EU leaders sleep at night while an entire people die of hunger, oppression, and marginalization just because politicians want to be seen as doing something tough?”

  https://t.co/xDABsjuKpZ

  — Aaron Maté (@aaronjmate) April 2, 2021

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

  Bottom line… NO U.S. President will pull out of Syria. In Washington’s thinking:

  1) It costs little in lives or money

  2) For a change, local terrain is friendly, i.e. the Kurds

  3) It controls the oil & reinforces sanctions

  4) It shows you are tough on Iran 

  5) It satisfies Israel and other allies

  6) It leaves you at the negotiation table

  * * *

  Welcome to America’s next forever occupation, apparently, from which it will never willingly extricate itself, akin to Afghanistan or Iraq.

  Tyler Durden
  Sun, 04/04/2021 – 23:30

• FBI Raids Business Renting Anonymous Safety Deposit Boxes, Forces Customers To Reveal Identity To Get Stuff Back
  FBI Raids Business Renting Anonymous Safety Deposit Boxes, Forces Customers To Reveal Identity To Get Stuff Back

  In a case that’s already sparked one lawsuit, a Beverly Hills strip mall business which rents private, anonymous safe deposit boxes was raided by the FBI last month – at which time the agency conducted a blanket seizure of hundreds of customers’ belongings.

  

  To retrieve their valuables, customers will need to “identify themselves and subject themselves to an investigation to verify their legal ownership,” according to the Los Angeles Times, which noted that one customer has already gone to court claiming that the government overreached by confiscating the contents of every security box.

  The company, U.S. Private Vaults, has been accused of laundering money for drug dealers – who anonymously stashed guns, drugs and cash.

  In an indictment against U.S. Private Vaults, Inc., the U.S. attorney for Los Angeles accused the company of marketing itself deliberately to attract criminals, saying it brazenly promoted itself as a place customers could store valuables with confidence that tax authorities would be hard-pressed to learn their identities or what was stored in their locked boxes. To access the facility, customers needed no identification; it took just an eye and hand scan to unlock the door.

  “We don’t even want to know your name,” it advertised, according to prosecutors.  –Los Angeles Times

  The feds used “multiple informants and at least one undercover police officer who posed as customers” to surveil the store and gather information about its customers.

  One of the company’s owners and several employees are accused of being involved in drug sales that took place at the business, as well as helping customers to convert cash into gold in a way that would avoid suspicion. Of note, U.S. Private Vaults shared a storefront with Gold Business – named as a co-conspirator in the indictment – which is accused of helping customers convert cash into gold to avoid having to report currency transactions which exceed $10,000.

  

  In the March 9 indictment that was unsealed Friday, a federal grand jury charged U.S. Private Vaults with three counts of conspiracy — to launder money, distribute narcotics and structure cash transactions to dodge detection. None of the people who are allegedly behind the operation were named in the court records. It is was not immediately clear whether any individuals will face criminal charges as well. –Los Angeles Times

  The FBI and Drug Enforcement Agency took five days to go through and process all the boxes after the raid began on March 22, according to court documents. US prosecutors argued on Friday that while the original warrant remains under seal, the magistrate judge who approved it thought that the sweeping seizures were appropriate.

  “The government seized the nests of safety deposit boxes because there was overwhelming evidence that USPV was a criminal business that conspired with its criminal clients to distribute drugs, launder money, and structure transactions to avoid currency reporting requirements, among other offenses,” prosecutors claimed in papers filed in Los Angeles federal court.

  According to prosecutors, the raid produced an unspecified number of weapons, fentanyl, OxyContin, and “huge stacks of $100 bills” which were flagged by drug-sniffing dogs. One box reportedly had $1 million in cash.

  The indictment was unsealed on Friday – just one hour before a court-issued deadline to respond to a lawsuit brought by a US Private Vaults customers who alleged that the blanket seizure was unconstitutional.

  The unnamed customer, listed in court papers as John Doe, said the search warrant should not have authorized seizure of the jewelry, currency and bullion that he kept in his three boxes at U.S. Private Vaults, because there was no probable cause to suspect the person committed a crime.

  “Just as the tenant of each apartment controls that space and therefore has a reasonable expectation of privacy in it, each of the hundreds of renters of safety deposit boxes … has a separate reasonable expectation of privacy in his or her separately controlled box or boxes,” the person’s attorney, Benjamin N. Gluck, wrote in the complaint. –Los Angeles Times

  The customer seeks to stop the FBI from requiring anonymous customers to reveal themselves and undergo an investigation to verify legal ownership of their valuables – with attorney Benjamin Gluck arguing that the government is holding his  client’s goods “hostage” until he identifies himself. Gluck pointed to a statement by assistant US Attorney Andrew Brown describing the procedure for retrieving valuables.

  “Though Mr. Brown perhaps deserves credit for his candor, his announced plan is grossly improper and manifestly unconstitutional,” wrote Gluck, noting that Brown had previously conceded in court papers that some US Private Vaults customers were “honest citizens to whom the government wishes to return their property.”

  “But the majority of the box holders are criminals who used USPV’s anonymity to hide their ill-gotten wealth,” he wrote. “To distinguish between honest and criminal customers, the government must examine the specific facts of each box and each claim, precisely what the anonymous plaintiff wants to prevent by refusing to disclose not only his identity, but even the specific boxes he claims are his.”

  

  Beverly Hills attorney Nina Marino, who represents several US Private Vaults clients, said that even if there were some criminal customers, “that does not authorize the government’s conduct in this sweeping action of not only seizing innocent box owners’ property, but viewing that property.”

  “Every single person that paid money on a monthly basis did that with the expectation of maintaining their anonymity, and it’s just outrageous that the government has such low regard for the 4th Amendment and for an individual’s expectation of privacy,” she added.

  UCLA law professor Beth Colgan called the issue “fascinating,” adding that the big question is whether the search warrant was based on sufficient probable cause to believe that evidence of criminal wrongdoing would be found in virtually all of the safe deposit boxes.

  “I would just be very surprised if a judge had approved a warrant that would allow the FBI to go through every single box absent evidence that the entire system was corrupt,” said Colgan. “Maybe they have the evidence, and that’s the thing we don’t know.”

  Tyler Durden
  Sun, 04/04/2021 – 23:00

• Senators Push To End MLB Antitrust Status After League Pulls Georgia All-Star Game
  Senators Push To End MLB Antitrust Status After League Pulls Georgia All-Star Game

  Authored by Jack Phillips via The Epoch Times,

  Several Republican senators joined calls to end Major League Baseball’s (MLB) antitrust exemption after it pulled the 2021 All-Star Game out of Atlanta, Georgia, saying that it was because of the recent voter integrity bill that has been lambasted by other major corporations and Democratic officials.

  MLB announced the decision to move the game on April 2, saying it would do to protest against the voting law that it claimed would restrict the ability of people to vote. Republicans, in criticizing the MLB and other major corporations, have accused them of bowing to Democratic-led and celebrity-led pressure. Democrats, without providing evidence, have said the new laws will make it harder for African-American voters to cast their ballots.

  The measure, which was passed last month and signed into law by Georgia’s governor, implements identification requirements for mail-in ballots and places restrictions on the number of drop boxes across the state.

  “Why does @MLB still have antitrust immunity? It’s time for the federal government to stop granting special privileges to specific, favored corporations – especially those that punish their political opponents,” Sen. Mike Lee (R-Utah) wrote on Twitter.

  Added Sen. Ted Cruz (R-Texas):

  “EXACTLY right. And @SenMikeLee & I will be working hard to END MLB’s antitrust immunity,” accusing the organization of becoming “woke,” a pejorative used by conservatives to describe left-wing activism that focuses on identity politics while using censorship and pressure campaigns to silence opposing viewpoints.

  Later on April 2, Cruz posted a link to MLB’s corporate sponsors, which Cruz said pressured the league “to pull the All Star game out of Atlanta. Do all of them oppose voter ID? Are all of them willing to be the woke enforcers of the corrupt Democratic Party? And do all hate the 75m who voted for Trump?”

  “Why are we still listening to these woke corporate hypocrites on taxes, regulations & anti-trust?” Sen. Marco Rubio (R-Fla.) wrote.

  

  Meanwhile, Chinese state media reported on April 1 that MLB will continue to be aired on the streaming platform operated by Chinese tech giant Tencent, which has significant ties to the Chinese Communist Party (CCP). Tencent is one of the Chinese companies that had temporarily dropped NBA games as a form of censorship after former Houston Rockets general manager Daryl Morey spoke out in support of the pro-democracy protests in Hong Kong.

  MLB Commissioner Rob Manfred defended the move to pull the game out.

  “Major League Baseball fundamentally supports voting rights for all Americans and opposes restrictions to the ballot box,” he added, saying it is “the best way to demonstrate our values as a sport.”

  But Gov. Brian Kemp, a Republican, said that Democrats and corporations have deliberately mischaracterized the law.

  “Here’s the truth,” Kemp said in a statement last week.

  The measure “expands access to voting, secures ballot drop boxes around the clock in every county, expands weekend voting, protects no-excuse absentee voting. It levels the playing field on voter I.D. requirements as well as streamlining election procedures,” Kemp said.

  Kemp said that Democrats, meanwhile, have spread misinformation about a provision that would not allow groups to give voters waiting in line water.

  Kemp said that it is just political organizations and “anyone else” who are not allowed to “harass or electioneer voters who are waiting in line to vote, within the 150-foot buffer.”

  Tyler Durden
  Sun, 04/04/2021 – 22:30

• CDC Investigating Salmonella Outbreak Linked To Wild Songbirds
  CDC Investigating Salmonella Outbreak Linked To Wild Songbirds

  As epidemiologists chide Americans for abandoning their fight against the coronavirus with new cases on the rise, and a dangerous new variant from Brazil making headway in several states, the CDC on Sunday issued a warning about an outbreak of a different kind: wild songbirds have caused an outbreak of salmonella in the Pacific Northwest.

  Health authorities have identified 19 cases nationwide, including three in California, six in Washington and five in Oregon, and they’re expanding their investigation to focus on a handful of states where they fear wild finches that have been dying from salmonella-causing bacteria might have spread the disease. Other states where the CDC is investigating include Kentucky, Mississippi, New Hampshire, Oklahoma and Tennessee.

  

  Although it’s commonly associated with eating undercooked chicken and raw eggs, salmonella can infect humans in other ways. Nearly all of the cases tied to wild birds were linked to families with bird feeders. The thinking goes that one of the homeowners touched an infected dead bird, or contracted the virus while cleaning a bird feeder where an infected bird had made contact. The bacteria can then spread if the individual then touches their face or mouth.

  Of the 13 people interviewed as part of the investigation, nine said they owned a bird feeder. Two others reported that they had come into contact with a sick or dead wild bird.

  No deaths have been reported, but 8 people have been hospitalized due to the outbreak. Patients have ranged from 2 months to 89 years old, with 16 years being the median age.

  However, officials believe the number of cases in the outbreak is “likely much higher than the number reported because many people recover without medical care and are not tested for Salmonella,” according to a statement on the CDC’s website. “In addition, recent illnesses may not yet be reported as it usually takes 2 to 4 weeks to determine if a sick person is part of an outbreak.”

  The outbreak may have started months ago, according to the Associated Press, which reported that California’s Department of Fish and Wildlife was inundated with calls back in December about a rash of dead of dying finches at bird feeders across the state.

  For those who haven’t encountered salmonella, the symptoms can show up between six hours and six days following exposure to the bacteria, and they can include: bloody or prolonged diarrhea, a fever higher than 102 degrees, excessive vomiting and signs of dehydration. The infection typically lasts four days to a week, and people usually recover without treatment. But patients with weakened immune systems, or who are under the age of 5 (or older than 65) are at particularly high risk.

  Tyler Durden
  Sun, 04/04/2021 – 22:00

• "It's Work-To-Live, Not Live-To-Work" – San Francisco Expats Say They Have No Regrets About Moving To Austin
  “It’s Work-To-Live, Not Live-To-Work” – San Francisco Expats Say They Have No Regrets About Moving To Austin

  Elon Musk has said he plans to move there. Late last year, Oracle, one of the biggest tech companies in the US, announced plans to move its headquarters to Austin from Silicon Valley. And since the start of the new year, others have followed suit.

  As moe and more Silicon Valley tech workers decamp for Austin, more are finding that they appreciate the capital of the Lone Star State more than the City by the Bay. As Austin comes to represent a “land of opportunity” for tech bros tired of the Silicon Valley ultra-liberal monoculture, the Houston Chronicle interviewed five “tech industry professionals” including Salesforce alums who have worked in both places, to the CEO of Austin’s premier tech incubator. The consensus is that Austin is preferable to the Bay Area, both in terms of the labor market for tech jobs (employees feel like bigger fish in a smaller pond), the housing market, and the general culture of the city. 

  

  The consensus: the grass is definitely a different color – and for now, at least, it appears “very green.”

  Vivek Sodera, co-founder of email client Superhuman, who recently moved to Austin, told the Chronicle that he appreciates that tech doesn’t dominate all other industries in Austin like it does in San Francisco.

  “Tech is an industry [in S.F.], wherein other parts of the country, tech is a subset of other existing industries,” says Vivek Sodera, co-founder of email client Superhuman, who recently moved to Austin. “I think we’re going to start to see Austin not just be a subset of existing industries itself.”

  Like San Francisco, Austin has plenty of issues of diversity, but on a professional level, you’re much less likely to find yourself at a bar surrounded entirely by tech workers.

  “It was just everywhere in San Francisco, you’re running into somebody from Snowflake or Uber or whatever. In Austin, you’re free from that a little bit,” says Holly Firestone, who worked in Salesforce for several years in both cities, and now is the vice president of community for Venafi in Austin. “I have tons of friends that aren’t in tech, which is just not something you experienced in San Francisco at all.”

  Anthony Brown, co-founder and CEO of music platform Breakr, moved to Austin in the fall and says the city allows talented tech workers the opportunity to build an even larger network.

  “There’s less of the tech community here. So I feel like you can get connected to the right infrastructure faster in Austin. So I think that’s actually a competitive advantage for Austin; there’s enough high quality people here in the city that if you do come and you are in the tech ecosystem, that you can actually build a really powerful kind of network.”

  A small pond, or what some tech investors have described as a “tier two city,” also has its drawbacks. For some (especially those working outside the tech world), the ubiquity of hoodie-wearing coders in San Francisco can be a negative, but that density is part of what’s allowed Silicon Valley companies to flourish. Some of that simply comes down to a matter of geography and the fact that not everyone is driving to work.

  Joah Spearman, an Austin-based tech founder who launched travel recommendation site Localeur, said he has struggled to recruit “director- and VP-level talent”, though others say this “skills gap” is starting to close.

  One Austin tech founder and CEO, Joah Spearman of travel recommendation site Localeur, has noticed that Austin does have a talent gap.

  “There is not this deep bench of director- and VP-level tech talent in Austin. And there’s this belief that if there was that here, the companies that get to $200 million evaluations would get to a billion,” says Spearman.

  Joshua Baer, CEO of Austin’s biggest incubators, explained that this gap is rapidly closing for one important reason: workers enjoy life more in Austin. As he explained, workers living in the city can still do “big things” professionally, but they can evade getting sucked into the “work to live” mindset that plagues the Bay Area.

  And while Austin’s housing market has boomed in recent years (while the pandemic has hit the overstretched San Francisco property market extremely hard), it’s still much more affordable than the Bay Area.

  But according to Joshua Baer, CEO of one of Austin’s biggest incubators, Capital Factory, that gap is getting smaller.

  “The type of people that we’re attracting, certainly from my own personal experience and somewhat logically, are educated entrepreneurial people who can live anywhere and they’re choosing to come here and that’s a good thing. That’s going to fuel our talent. It’s bringing in people who have Silicon Valley ethos, you know, who think big and want to go do big things,” says Baer.

  What makes Austin so appealing to many tech workers is that although you’ll still be able to do big things professionally, there’s opportunity for a richer personal life. To state the obvious, home ownership is much more achievable for transplants, however that’s caused a ripple effect that’s made it harder for many Austinites to own real estate (the average home price rose 10.1% in the past year to $433,493). It has also amplified long-running issues of racial diversity.

  Instead of feeling like they are “property of their job”, Austinites can enjoy “a closer relationship with the city,” Baer added.

  The rising cost of living in Austin is worthy of a story of its own, but the difference in culture between Austin and San Francisco is broader than just affordability. According to Spearman, much of it simply comes down to mindset, describing Austin as a “work to live” city, compared to the nonstop pace of San Francisco’s “live to work” culture.

  “In more rigid tech cultures, from the moment you leave your house, to get in a bus or a van to go to Silicon Valley to work at Apple or Google or et cetera, you’re kind of like property of your job until you get back to your house,” he says. “There are people that live like that in S.F. Austin doesn’t have that.”

  […]

  “I think there’s just something about the Texas vibe that makes people chill out and be a little bit more relaxed,” he says.

  Quality of life and affordability may be the largest factors driving San Francisco tech workers to Austin, but it begs the question what will happen once they arrive. Many Austinites were already priced out of one of the nation’s hottest real estate markets years ago, but another issue is the effect on Austin culture at large. The exodus out of San Francisco can’t just be about leaving the problems of the city behind, but rather an active desire to become a part of something new.

  “Being an Austinite is an experience. It’s about showing up and participating, being part of what’s happening in Austin,” says Baer.

  “If you want to move to Austin, the thing that you should be expecting is that you’re going to have a closer relationship with the city that you’re living in, not a more distant relationship,” says Spearman. “I think for a lot of people who are in S.F. and work in tech, their closest relationship in S.F. is with their job. Whereas in Austin, your job should be secondary to your relationship with the place that you live in.”

  Of course, as more people from Silicon Valley migrate to Austin, some worry that this could have a harmful impact on the city’s culture (as well as erode the relative affordability of real-estate). In the end, the only thing that might keep hordes of progressives from flooding into the Lone Star State might be fears about being caught in another deep-freeze.

  Then again, with taxes set to rise in blue states like California and New York, tech workers might soon be making room for finance workers as financial firms expand their footprint in the southern US.

  Tyler Durden
  Sun, 04/04/2021 – 22:00

• Largest Meth Seizure In Miami History Brings Cartel Arrests
  Largest Meth Seizure In Miami History Brings Cartel Arrests

  By Noi Mahoney of FreightWaves,

  More than 1,100 pounds of methamphetamine hidden in shipments of concrete tiles were intercepted in March by federal agents in Miami, leading to the arrests of six alleged Mexican cartel traffickers, officials said.

  

  The Drug Enforcement Administration’s (DEA) seizure of the crystal meth is the largest in Miami-Dade County history, according to the U.S. Attorney’s Office. The methamphetamine was shipped by truck in two loads from Mexico through Texas to South Florida, according to a criminal complaint filed Thursday.

  “As the threat of methamphetamine continues to grow in Florida, this was yet another brazen attempt by a highly organized and dangerous foreign criminal group to set up a significant methamphetamine pipeline from Mexico directly into the Miami metro area,” Keith Weis, DEA’s Miami field division special agent in charge, said in a release.   

  Officials did not give a dollar amount to the methamphetamine seized in Miami. In December 2020, border officials in Pharr, Texas, discovered 1,853 pounds of meth, which had a street value of $37 million. 

  Authorities have charged Adalberto Fructuoso Comparan-Rodriguez, whose nickname is “Fruto,” the former mayor of Aguililla, Mexico, and the reported leader of the United Cartels in Michoacán, Mexico, with drug trafficking crimes, according to the indictment.

  Alfonso Rustrian, of Mexico, has also been charged as a co-conspirator. Another four defendants were charged for their roles in the alleged methamphetamine scheme.

  According to court filings, Comparan-Rodriguez and Rustrian met in Cali, Colombia, with whom they believed were members of Hezbollah but were actually undercover DEA agents. Comparan-Rodriguez and Rustrian agreed to send 1,100 pounds of methamphetamine from Mexico through Texas to the Miami area, according to the charges.

  Once the meth arrived in Miami, Comparan-Rodriguez and Rustrian allegedly cracked open the concrete tiles and dissolved the meth inside 5-gallon buckets of house paint. The men are alleged to have extracted the pure crystal meth from the paint.  

  The Miami case reflects a resurgence of meth shipments pouring over the southern border of the U.S., authorities said.

  Tyler Durden
  Sun, 04/04/2021 – 21:30

• Meet The Michigan Telecom CEO Who Led A Second Life As A Cocaine Kingpin
  Meet The Michigan Telecom CEO Who Led A Second Life As A Cocaine Kingpin

  A Michigan telecom executive who died in 2018 has now been revealed to have had a “double life” running a “sprawling international drug ring”. 

  Former CEO of Clementine Live Answering Service Marty Tibbitts was known as a successful executive. But details of his “second life” emerged this year as part of a federal indictment against alleged 43 year old drug kingpin Ylli Didani, according to Yahoo/The Daily Beast. Didani was arrested this week, with regulators alleging his cartel sold cocaine in 15 different countries. He faces charges of conspiracy to distribute controlled substances on a boat in U.S. jurisdiction, conspiracy to distribute controlled substances, and money laundering. 

  Tibbitts was found – under a pseudonym of “Dale Johnson” – to have worked together with Didiani on trying to develop something called “The Torpedo”, which would be a “parasitic submarine meant to haul clandestine cocaine across the globe.”

  The sub would be remote controlled, via GPS and would attach to the hulls of cargo ships using magnets. The two hoped to be able to “stuff the sub with cocaine” before tracking it using GPS and regaining control of it 100 miles off European shores. At that point, a fishing boat would retrieve it. 

  

  Didani and Tibbitts allegedly paid $12,000 via cryptocurrency and wires from an Albanian bank account to develop the sub. The company developing it said it was unaware of what the “underwater hull scrubber device” was meant for, according to the report.

  Tibbitts bankrolled Didani’s operation, the report says, giving him more than $1.8 million in total. At one point, he cut a check for $864,000 for the cartel that was “cashed at a pawn shop or gold exchange business.”

  When Tibbitts died in 2018 as a result of his plane crashing in Wisconsin, plans for “The Torpedo” were scrapped and the cartel wound up spiraling into descent. Didani sought new funding in the UAE, but by that time, investigators had already closed in on him.  

  As for Tibbitts’ double life, his neighbors were shocked to hear the news. “I think anybody who would hear something like this would be shocked,” one of his neighbors told The Detroit News. 

  Tyler Durden
  Sun, 04/04/2021 – 21:00

• Drone Whistleblower Case Will Be First Espionage Act Conviction Of Biden Presidency
  Drone Whistleblower Case Will Be First Espionage Act Conviction Of Biden Presidency

  Authored by Brett Wilkins via via CommonDreams.org,

  Press freedom, peace, and human rights advocates are rallying behind Daniel Hale, the former intelligence analyst who blew the whistle on the US government’s drone assassination program, and who pleaded guilty Wednesday in federal court to violating the Espionage Act.

  The Washington Post reports Hale, who was set to go on trial next week, pleaded guilty to a single count of violating the 1917 law that has been used to target whistleblowers including Julian Assange, John Kiriakou, Chelsea Manning, Edward Snowden, Jeffrey Sterling, Reality Winner, and others. 

  

  Hale was charged in 2019 during the Trump administration after he leaked classified information on the US government’s targeted assassination program to a reporter, who according to court documents, matches the description of The Intercept founding editor Jeremy Scahill. He is the first person to face sentencing for an Espionage Act offense during the admnistration of President Joe Biden. 

  As vice president under President Barack Obama, Biden contributed to the creation of whistleblower protections in the Dodd-Frank Wall Street Reform and Consumer Protection Act, while simultaneously serving in an administration that, while promising “a new era of open government,” relentlessly targeted individuals who revealed US war crimes and other classified information. 

  Kiriakou—a former CIA agent who under Obama was sentenced to 30 months’ imprisonment for exposing US torture—told Kevin Gosztola that he is “dissappointed that Daniel Hale’s case was continued in the Biden Justice Department.”

  “I had hopes that Biden’s Justice Department appointee would recognize the public service that Daniel Hale provided when he revealed illegality and abuse in the drone program,” said Kiriakou. 

  Hale, who was an intelligence analyst for the US Air Force before moving on to the National Security Agency and then the National Geospatial-Intelligence Agency, “knowingly took highly classified documents and disclosed them without authorization, thereby violating his solemn obligations to our country,” according to a statement from Raj Parekh, the acting U.S. attorney for the Eastern District of Virginia.

  

  According to Gosztola, Hale’s whistleblowing led to the revelation by The Intercept that “nearly half of the people on the U.S. government’s widely shared database of terrorist suspects are not connected to any known terrorist group,” details on how the Obama administration approved targeted assassinations, and information about Bilal el-Berjawi, a Briton “who was stripped of his citizenship before being killed in a U.S. drone strike in 2012.” 

  The Post reports that Hale admitted in court to writing an anonymous chapter in Scahill’s 2016 book, The Assassination Complex: Inside the Government’s Secret Drone Warfare Program, which divulged information taken from top-secret documents about drone strike protocols, civilian casualties, and Pentagon officials’ debate about the accuracy of intelligence.

  “These documents detailed a secret, unaccountable process for targeting and killing people around the world, including US citizens, through drone strikes,” Betsy Reed, editor-in-chief of The Intercept, said after Hale’s indictment. “They are of vital public importance, and activity related to their disclosure is protected by the First Amendment.”

  Hale had initially centered his defense on First Amendment grounds, and his numerous defenders condemned his prosecution as a violation of press freedom and freedom of speech. His lawyer, Jesselyn Radack, issued a statement saying “the U.S. government’s policy of punishing people who provide journalists with information in the public interest is a profound threat to free speech, free press, and a healthy democracy.”

  Daniel Hale was my roommate when we were in the Air Force. A kind and caring person who promised his life in defense of this nation and its values.

  The people conducting secret illegal killings in other countries are criminals.

  Standing up for human rights makes Daniel a hero. https://t.co/8tBN4uA7oP

  — Jon Ivy （艾森） (@jonivy) April 2, 2021

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

  “Classified information is published in the press every day; in fact, the biggest leaker of classified information is the US government,” wrote Radack. “However, the Espionage Act is used uniquely to punish those sources who give journalists information that embarrasses the government or exposes its lies.”

  “Every whistleblower jailed under the Espionage Act is a threat to the work of national security journalists and the sources they rely upon to hold the government accountable,” she added. 

  Medea Benjamin, co-founder of the women-led peace group CodePink, tweeted that it’s “outrageous that drone whistleblower Daniel Hale will be going to prison for exposing the drone murders by the U.S. military. Why don’t the murderers go to jail? Or the ones who ok the murders? Or the ones who make the killer drones and profit from murder?”

  Hale’s sentencing is scheduled for July 13. He faces up to 10 years behind bars. Kiriakou told Gosztola that he hopes the judge “recognizes the good in what Daniel Hale has done and gives him the lightest possible sentence.”

  Tyler Durden
  Sun, 04/04/2021 – 20:30

• One Step Away From "ESG": Why Uranium Stocks Are About To Soar
  One Step Away From “ESG”: Why Uranium Stocks Are About To Soar

  For the past three months, we have been especially constructive on the uranium sector (and its handful of beaten down stocks), which we believe are set to benefit tremendously as the sector gets swept up in the upcoming flurry of Biden’s various multi-trillion infrastructure deals and the concurrent ESG euphoria. Some of our recent observations can be found at the following links:

  • Uranium Stocks Soar: Is This The Beginning Of The Next ESG Craze

  • Uranium Stocks Soar After World’s Highest-Grade Uranium Mine Suspends Operation Due To COVID

  • As Wall Street’s Love For Uranium Returns, One Analyst Lists 4 Reasons To Buy The Biggest Miner

  Then, as uranium stocks did move significantly higher in recent months as investors rekindled their love affair with a sector that had been left for dead for much of the past decade, at the start of February an TD Securities analyst said that the reddit short squeeze crowd had started to buy into the sector as well, shortly after a BofA analyst laid out an even more bullish fundamental case, on the assumption that the US could delay the closure of its aging nuclear fleet, boosting demand over the next few decades.

  

  Next, the bullish uranium case was further bolstered by a lengthy tweetstorm by former hedge fund manager Hugh Hendry who said “A lot of you are invested in uranium. I commend you. I wish I was. Uranium is the rockstar of commodities. It doesn’t mess around – bull and bear markets are of epic proportions.”

  Hendry was followed by yet another iconic hedge fund manager, who also jumped on the uranium bandwagon. In a tweet from Michael “the Big Short” Burry (who communicates with the outside world almost exclusively by twitter with tweets that are spontaneously deleted after a few days), the hedge fund manager said that “If the government is going to spend $2 trillion, there is no better use than converting the US to nuclear.  Dems can do it! Jobs +”potentially limitless electricity…no greenhouse gas emissions” #greenfuture NOW!”

  Then, after a few weeks of rangebound price moves for equities in the sector, it appears that we are now set to see the next surge for uranium stocks, for two main reasons.

  The first reason is a mix of regulatory and market developments.

  As we reported earlier today, the spot price for U3O8 moved above $30 per pound for the first time this year as uranium producers and mine developers hoovered up above-ground inventories and reactor construction continues apace. Two new research notes from BMO Capital Markets and Morgan Stanley say today’s price marks a floor and predict a rally in prices over the next few years to the ~$50 level by 2024, which – all else equal – would translate into soaring stock prices for names such as CCJ, UEC, URA and URNM.

  Indeed, as Mining.com said, the stars seem to be aligning for a new phase of nuclear energy investment with the US, China and Europe bolstering the bull case for the fuel this month.

  And while nuclear energy was not (yet) mentioned explicitly in the $2 trillion Biden infrastructure proposal released today, its federally mandated “energy efficiency and clean electricity standard” is hardly achievable without it. 

  Curiously, the big regulatory move may be coming out of Europe, where – as we expected – Uranium is now officially part of the cool ESG crowd as over the weekend leaked documents showed a panel of experts advising the EU is set to designate nuclear as a sustainable source of electricity which opens the door for new investment under the continent’s ambitious green energy program.

  

  Then there is China – as Mining.com notes, China’s 14th five-year plan released a fortnight ago also buoyed the uranium market with Beijing planning to up the country’s nuclear energy capacity by 46% – from 48GW in 2020 to 70GW by 2025. There are several factors working in uranium’s favor, not least the fact that annual uranium demand is now above the level that existed before the 2011 Fukushima disaster when Japan shut off all its reactors:

  • Uranium miners, developers and investment funds like Yellow Cake (13m lbs inventory build up so far) are buying material on the spot market bringing to more normal levels government and utility inventories built up over the last decade

  • Major mines are idled including Cameco’s Cigar Lake (due to covid-19) which accounts for 18m lbs or 13% of annual mine supply.  The world’s largest uranium operation McArthur River was suspended in July 2018 taking 25m lbs off the market

  • Permanent closures so far this year include Rio Tinto’s Ranger operation in Australia (3m lbs) and Niger’s Cominak mine (2.6m lbs) which had been in operation since 1978. Rio is exiting the market entirely following the sale of Rössing Uranium in Namibia

  • Like Cameco, top producer Kazatomprom, which mined 15% less material last year due to covid restrictions has committed to below capacity production (–20% for the state-owned Kazakh miner) for the foreseeable future

  • Price reporting agency and research company UxC estimates that utilities’ uncovered requirements would balloon to some 500m lbs by 2026 and 1.4 billion lbs by 2035  

  • Roughly 390m lbs are already locked up in the long term market while 815m lbs have been consumed in reactors over the last five years, according to UxC

  • There are 444 nuclear reactors in operation worldwide and another 50 under construction – 2 new connections to the grid and one construction start so far in  2021

  • Much cheaper and safer, small modular nuclear power reactors which can readily slot into brownfield sites like decommissioned coal-fired plants (or even underground or underwater) are expected to become a significant source of additional demand.

  The last bullet brings us to reason number 2: the coming “small modular reactor” frenzy:

  As Nikkei Asia reports today, one of Japan’s top industrial engineering companies will join a US-led project to build a new type of nuclear power plant designed with added precautions against meltdowns. These plants will be built in the US, where they will propel the uranium sector to level it hasn’t seen in decades (indicatively CCJ traded roughly double where it is today as just before the 2008 financial crisis).

  According to the Nikkei, Japan’s JGC Holdings will help build a plant in the state of Idaho designed by NuScale Power, an American company whose proposal for a small modular reactor (SMR) involves immersing the containment units in a pool of water.

  Small nuclear reactors have been hailed as an option for replacing fossil fuel power plants as nations commit to cutting carbon dioxide emissions in the coming decade

  And here, we get one step closer to Uranium becoming part of ESG: when Joe Biden meets Japanese Prime Minister Yoshihide Suga for a summit in the U.S. later this month, fighting climate change will be on the agenda and “small nuclear” – and uranium – will be high on the agenda.

  JGC has invested $40 million for a roughly 3% stake in NuScale, one player in the emerging field of SMRs. The Japanese group will work with NuScale’s parent, U.S.-based engineering company Fluor, on construction management and other aspects of the Idaho project.

  One thing is clear: as the SMR strategy takes off, much more uranium will be needed, as the partners eventually could set their sights on similar projects in the Middle East – where JGC boasts a long track record in oil and petrochemical infrastructure – and Southeast Asia. In fact, the entire world could soon be covered in small, safe nukes which will lead to an unprecedented renaissance for the uranium sector.

  Why the scramble for SMR?

  The first reason is simple: price. Nuclear plants on the scale of 1,000 megawatts cost around $10 billion to build using established reactor designs. NuScale’s SMR design – which completed a technical review by the U.S. Nuclear Regulatory Commission in August 2020, ahead of rival proposals – reportedly costs around $3 billion for more than 900 MW. The Idaho plant will have a capacity between 600 MW and more than 700 MW, according to announced plans. NuScale also has a strategic partnership with South Korea’s Doosan Heavy Industries and Construction, which will supply components for the plant.

  The second, and far more important reason, is safety. Japan’s Fukushima nuclear disaster a decade ago shows what happens when reactor cooling systems break down. The loss of emergency power after a devastating 2011 tsunami led to reactor meltdowns at the Fukushima Daiichi plant operated by Tokyo Electric Power Co. Holdings. Well, NuScale’s SMR design seeks to remove this risk, as the water in the pool takes a month to evaporate and helps keep the reactor’s temperature down.

  The U.S. government supports research and development in small-scale reactors. A Green Growth Strategy announced by Japan last year calls for “providing active support” to Japanese companies participating in experimental overseas projects in this field. Many existing nuclear plants in Japan, the U.S. and other advanced economies have been in operation for decades and require upgrades or decommissioning.

  In short, between recent bullish market dynamics, and a sector that is on the cusp of becoming the next ESG craze, the promise of new SMR technologies could ensure uranium demand is stable for decades, leading to a new golden age for uranium stocks.

  * * *

  Finally, if that’s not enough, courtesy of Larry McDonald, author of the Bear Traps report, here is a March 25 report published by ACG Analytics, titled “Energy: Uranium Gateway to Net Zero Emissions?“

  Executive Summary

  The Biden Administration is at a potential pivot point regarding future U.S. nuclear energy policy. How the Administration grapples with long-standing issues, deploys investment, and who Biden selects to head the Nuclear Regulatory Commission (NRC) will indicate the future of the sector.

  Issue

  In the most recent Democratic Party Platform (which the Biden campaign helped shape), the Democratic Party committed to advancing nuclear power as part of a “technology-neutral” means of decreasing fossil fuel emissions. In the Biden campaign’s “Plan for A Clean Energy Revolution and Environmental Justice” (“Climate Plan”), the campaign also committed itself to identifying the future of nuclear energy, identifying nuclear waste disposal as a “challenge with nuclear power today” while promising to focus on “small modular nuclear reactors at half the construction cost of today’s reactors.” The question now for the Biden Administration is how to proceed.

  Impact

  By rejoining the Paris Agreement and committing to more ambitious emissions targets, the Biden Administration may utilize nuclear energy as a bridge until other renewable energy sources are more viable and battery storage technology improves. The Administration faces several immediate political challenges regarding the greater adoption of nuclear power including the planned closure of several existing plants, the aversion many Democrats have towards new mining projects which stem from environmental concerns, the related but distinct concerns of many Native American tribes located where U.S. uranium mining might occur, and the aforementioned long-standing question of longer-term spent nuclear material storage. On the other hand, if nuclear plants continue to close early, decreasing the U.S. zero emissions base-load capacity, demand for dependable carbon emitting sources will increase.

  Next Steps

  President Biden is likely to address some of these challenges in upcoming infrastructure legislation, which will incorporate much of the Administration’s environmental agenda and potentially include incentives for maintaining the existing U.S. nuclear fleet. President Biden is expected to outline his infrastructure plan publicly on March 31st. Another key decision will be who President Biden nominates to the Nuclear Regulatory Commission (NRC) which comprises 2 Democrats and 2 Republicans, stymying the decision-making process at an agency integral to the future of U.S. nuclear energy policy.

  More details

  Uranium itself will benefit from increased demand in the United States, but U.S. and Canadian miners also stand to benefit from efforts to secure safe and reliable uranium supply chains, ending U.S. reliance on adversarial countries for imports. Republicans have emphasized that U.S. foreign reliance represents a national security threat and believe the Administration should loosen mining requirements while also committing itself to completing the U.S. uranium reserve established by law late last year. House Minority Leader Kevin McCarthy (R-CA) is also attempting to get House Republicans to coalesce around an environmental agenda that includes investments in nuclear energy and regulatory changes to speed up permitting and environmental reviews. Many Progressives, however, do not support these moves. Senator Bernie Sanders (I-VT), who challenged Biden to be the 2020 Democratic nominee, would ban nuclear energy.

  Biden’s Cabinet appointments come from both sides of the spectrum on nuclear energy. Interior Secretary Deb Haaland has opposed uranium mining on public lands and fought for compensation for communities exposed to radiation. She won the Nuclear-Free Future Award last year from the German Nuclear Free Future Foundation while a Representative from New Mexico. Former Michigan Governor and current Energy Secretary Jennifer Granholm has less experience with nuclear policy, arguing during her Senate confirmation hearing that the disposal of used nuclear fuel is a “sticky situation” and that “We have to maybe look at what the Blue Ribbon Commission [An Obama Administration panel tasked with developing policy options for nuclear waste] did on this, which was to engage in some consensus-based strategies that allow us to determine where that waste should go.”

  The Biden Administration, however, is expected to devote additional resources to research and development (R&D) in the nuclear space, particularly R&D regarding the development and adoption of small modular nuclear reactors, among other promising technologies. The Department of Energy (DOE) Loan Programs Office, with $40 billion in loan authority, will prioritize renewable and net-zero emission technologies.

  While the Obama-era Blue Ribbon Commission on America’s Nuclear Future was tasked with developing policy options for current and future nuclear waste, it was not tasked with identifying alternative waste disposal sites after work on completing Nevada’s Yucca Mountain Nuclear Waste Repository ceased in 2011, arguably for political reasons. After the completion of its work in January 2012, the Blue Ribbon Commission’s recommendations went largely ignored during the remainder of the Obama Administration and during the Trump Administration.

  Waste storage continues to be the largest risk to greater adoption of nuclear power in the United States. The Federal government has tried for decades to create a central repository for spent nuclear waste and since work began in 1987 on Yucca Mountain (which is unlikely to re-commence under President Biden), no other long-term waste disposal site has been identified in what would likely be a several decades-long process if the selection of another site or sites were to occur.

  Currently, existing nuclear plants typically store most of their waste on site. Proponents believe such storage is relatively safe and disaggregates the risks associated with the long- term care of radioactive waste in centralized locations. Transporting large quantities of waste along thousands of miles of highways to a central repository increases the risk of an accident and contamination. However, at least 7 states (California, Connecticut, Illinois, Kentucky, Maine, Oregon and West Virginia) have laws prohibiting additional nuclear reactors in the state until longer-term waste disposal issues have been solved by the Federal government. Massachusetts, Montana, and Oregon require voter approval, while other states have varying degrees of prohibitions.

  This week, Rep. Doris Matsui (D-CA) introduced “The Storage and Transportation of Residual and Excess Nuclear Fuel (STORE) Act,” which aims to create interim waste storage facilities. It remains unclear if this legislation could be folded into President Biden’s infrastructure package (it would not meet rules if passed in its current form under Reconciliation). Currently, the legislation has no-cosponsors and appears tied to a specific issue affecting her district Matsui does, however, sit on the House Energy & Commerce Committee and her legislation comports with the recommendation of the Blue Ribbon Commission and the Administration’s goals that nuclear waste disposal citing be consent-based in the future.

  Tyler Durden
  Sun, 04/04/2021 – 20:00

• UBI And The Road To Serfdom
  UBI And The Road To Serfdom

  Authored by David Gordon via The Mises Institute,

  Many people think that a universal basic income (UBI) would be a good substitute for the welfare state. Under this proposal, each person resident in a country would receive a guaranteed income, sufficient to live at a modest level. People would get the money unconditionally. Unlike welfare payments, the UBI would not be lessened if people earned money in addition to the amount it provided, and, because it is not means tested—absolutely everyone gets it, even billionaires—it requires no complex bureaucracy to administer.

  

  The UBI would cost a great deal of money, but its defenders claim that since it is a substitute for the welfare state, we would also save the vast amounts of money now required for financing welfare programs. Further, if our economy continues to grow, at some point the UBI will become affordable. Charles Murray, for example, in a short book published a number of years ago, says of his version of the UBI, “I began this thought experiment by asking you to ignore that the Plan was politically impossible today. I end proposing that something like the Plan is politically inevitable—not next year, but sometime…. Real per capita GNP has grown with remarkable fidelity to an exponential growth equation for more than a century” (In Our Hands, AEI Press, 2006, p. 125).

  The critics of the UBI aren’t convinced and still claim the program would be too costly to implement. In a recent book, Universal Basic Income – For and Against (Rational Rise Press, 2019). Antony Sammeroff offers a very able account of this controversy and many other issues connected with the UBI. He gives an especially good analysis of the argument that automation is liable to make so many people unemployable that a UBI will be needed to provide for them. But what I’d like to discuss this week is another argument that Sammeroff deploys to great effect against the UBI.

  The UBI, Sammeroff reminds us, is a government program, and we ought always to view the state as an enemy of liberty. It is precisely the feature of the UBI that its supporters emphasize, its universal coverage, which would enable to state to exercise tyrannical control. Sammeroff says,

  Now a Basic Income Guarantee may begin universal, but as the years wear on and it proves expensive to grant, corners may be cut to ensure its continuance. Hardly anyone will object to the UBI being withdrawn from criminals, for example. And then perhaps for anti-social behavior. Petty crimes, like littering the street, might lead people to receive a penalty against their UBI. A few might moan that this is the beginning of a government social-engineering program, but to most people it will seem like quite a sensible and reasonable measure…. Clipping people’s Basic Income will soon seem the most sensible and appropriate response to many crimes and misdemeanors. (p.148–49)

  Not only could the state use the UBI as an instrument of social control; we have every reason to think those in charge of the state would exercise their power for bad motives.

  This is the same class of people [who] launched a permanent war in the Middle East wasting trillions of dollars and destroying millions of lives. They bailed out the banks from the public purse and gave themselves raises after telling the rest of the nation that we had to tighten our belts. They have robbed the young of the opportunity to own a home by sending house prices through the roof, and mean to leave them a nation in ruinous debt. (p.147)

  Sammeroff’s argument here is consistent with the contention of Hayek’s Road to Serfdom, summarized in the title of chapter 10, “Why the Worst Get on Top,” but it is not quite the same. Hayek argues that rulers will very likely be bad, but Sammeroff’s point is not dependent on this thesis. His claim is rather that the evidence shows that our present rulers are bad and will remain so. Thus they can be expected to abuse the UBI program.

  

  Sammeroff strengthens his case that the UBI poses a threat of tyranny by using an admission from Charles Murray, who, as mentioned above, is a pioneering advocate of the program. He acknowledges that the UBI would require people to have a “universal passport” and “known bank account.” Making the most of these admissions, Sameroff says,

  I don’t think it’s unrealistic to imagine that people may soon be forced to accept a mandatory Government ID Card in order to claim their Basic Income. Before long they will be asked to show it in order to get into government buildings. Then at the airport to get on a plane. Then simply to board a train or a bus. Then to post a package. Then to get into a bar. Then a restaurant. Before long every public place will ask you to show your ID card…. you will be expected to produce it in order to vote, and before long not voting may result in a fine as well…. Just as states freeze the assets of suspected fraudsters, they will soon be freezing the “known bank account” of political dissenters. By the time they come for those with radical ideas about freedom from government tyranny there will be precious few left to speak out for us. (pp. 151–52)

  One might object to this that the state is capable of demanding a government ID card and controlling people’s bank accounts without the UBI, but why give the government an excuse to perpetrate such horrors on us? Sammeroff notes that it is the poor, supposedly those who would gain the most from the UBI, who would be most vulnerable to its abuse:

  Certainly, the poor, who depend solely on their handouts to survive, will quickly become very cautious of what they say and do. But even reasonably affluent people will think twice before risking the money. The UBI institutionalizes the state as patron, and citizen as ward. Before long we may arrive in a frightening era where payments and penalties are used to mould us into compliant little drones. The utopian dream will have descended into a tyrannical nightmare. (p. 152)

  Tyler Durden
  Sun, 04/04/2021 – 19:30

• Someone Just Paid $660,000 For An Unopened 1986 Copy Of Super Mario Bros.
  Someone Just Paid $660,000 For An Unopened 1986 Copy Of Super Mario Bros.

  Today in “where’s the inflation?” news…

  An unopened copy of a Nintendo game, that was originally purchased in 1986, has just sold at auction for $660,000. 

  The copy of Super Mario Brothers had been “forgotten in a desk drawer” for nearly 3 decades, AP reported, before being sold by Heritage Auctions in Dallas. It sold on Friday of last week. 

  

  The game was originally purchased as a Christmas gift more than 25 years ago, but was instead placed into a desk drawer where it remained “sealed in plastic with its hang tab in tact”.

  Valarie McLeckie, Heritage’s video game specialist, told AP: “Since the production window for this copy and others like it was so short, finding another copy from this same production run in similar condition would be akin to looking for single drop of water in an ocean.”

  The copy of the game is being called the “finest” to ever have been professionally graded for auction. A similar copy last sold for $114,000 only last summer. While that copy was produced a year later in 1987, it still marks a nearly 6x rise in the price of a game that once cost less than $100 under 3 decades ago.

  Tyler Durden
  Sun, 04/04/2021 – 19:00

• Goldman, JPM Expect Econ Activity In April, May To Top "Anything We'll See In Our Careers"
  Goldman, JPM Expect Econ Activity In April, May To Top “Anything We’ll See In Our Careers”

  Last week, ahead of both the March payrolls and a burst of closely watched economic data in the coming weeks, we warned readers that we are about to experience the craziest base effect since the great depression, as the US economy laps the 1-year anniversary of the Covid shutdowns which ground the US economy to a halt virtually overnight last March, and which now mean that when looked at on a year-over-year basis, March (and onward) data will looks like this.

  

  But while it’s true that the base effect will lead to some impressive if mostly meaningless Y/Y charts, the reality is that the US economy is about to ramp even higher not just on the simple accounting of calendar effects, but because of the continued flood of fiscal stimulus that is about to send the US economy overheating to never before seen levels.

  First consider the latest observation from JPMorgan economist Jesse Edgerton, who looks at the latest credit card/high frequency data contained in JPM’s Quant Econ Dashboard and notes that a meaningful portion of the US never fully shutdown or had minimal restrictions. So as we approach April 19, the date when Biden says that 90% of all US adults will have vaccine access within 5 miles of their home, JPMorgan urges its clients to consider the magnitude of what could happen: the combined population of California, Illinois, Massachusetts, and New York is ~78.5mm people.

  These are states that had some of the more stringent lockdowns and are poised to reopen. In the chart below you can see the differential in perhaps the most popular reopening activity, dining out, in some of those states relative to Florida and Texas. Florida and Texas did not have the same magnitude of restrictions as the states mentioned.

  

  In short, in just two weeks, the US could experience a spending spree the likes of which have never been seen before.

  But wait, there’s more… and for that we go to Goldman head of hedge fund sales Tony Pasquariello who – as we noted earlier – is becoming concerned about “fat tail” outcomes after the subsurface turmoil of the first quarter, although as he expounded, the risk/reward “will be on the right tail” as the US quickly moves towards herd immunity. Specifically, he says to consider the following three data points:

  • i. $4.44tr currently sits in US money market funds ($1.5tr is held by retail, $2.94tr is held by institutions). since February of 2020, that $4.44tr pile has grown by … $830bn.
  • ii. US households have accumulated about $1.5tn in ‘excess’ or ‘forced’ savings, and Goldman expects that to rise to about $2.4tn, or 11% of GDP, by the time that normal economic life is restored around mid-year
  • iii. attendant to the largest jump in US consumer confidence in 18 years: a record share of respondents said they plan to purchase a home in the coming months. a measure of consumers’ plans to buy cars and major appliances also rose. A separate report Tuesday showed U.S. home prices surged to the highest since February 2006.

  His conclusion: after the change observed in the markets in Q1, which presents a different setup for Q2, Pasquariello notes that “if April and May are THE peak growth months for US economic activity – perhaps as robust as anything we’ll see in the remainder of our careers – there’s still a lot to play for, and I still believe a reflationary framework is the right place to anchor your risk-taking.”

  Which, however, is not necessarily good news: judging by the ramp higher in yields after the blockbuster, goldilocks payrolls report on Friday which has nonetheless triggered a new round of the reflationary dynamic, the Goldman strategist warns that “the path higher from here is apt to be choppier and risk/reward is not what it was four or five months ago” and “in practical terms, this argues for a more tactical trading stance where illiquid positions – and recency bias – are the enemy.”

  Tyler Durden
  Sun, 04/04/2021 – 18:30

• Elon Musk's January Claims Of Model S/X Production Debunked By Tesla's Own Q1 Delivery Disclosure
  Elon Musk’s January Claims Of Model S/X Production Debunked By Tesla’s Own Q1 Delivery Disclosure

  If there’s one thing you have to hand to Tesla short sellers, it is that they are incessant and relentless, even in the midst of getting their respective faces kicked in by Tesla equity over the last 24 months.

  But as time passes, more and more critical questions and examples of potential red flags about Tesla continue to pop up, not the least of which is what can only be described as a glaring inaccuracy at best, fraud at worst, made by Elon Musk regarding the company’s Model S&X production earlier this year.

  Short seller Mark Spiegel took to Twitter this weekend to point out what he called “the latest evidence Elon Musk is a securities fraud committing liar”. 

  THE LATEST EVIDENCE ELON MUSK IS A SECURITIES FRAUD-COMMITTING LIAR:
  In January’s conference call he said the new S&X were “in production now & would be delivered in February”

  Yet today’s 8-K says $TSLA produced ZERO. THIS IS BLATANT FRAUD@SEC_Enforcement

  H/T: @ContrarianShort pic.twitter.com/4cnyXx6ZFP

  — Stanphyl Capital (@StanphylCap) April 3, 2021

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

  First, Spiegel points out that in the company’s January 2021 conference call, Musk is quoted as saying that the company’s new Model S and X vehicles were in production and would be delivered in February 2021. Musk’s exact quote was:

  “Regarding the new Model S and X, we are launching the — we’re super excited to announce the new Model S and Model X are in production now and will be delivered in February. So we’ve been able to bring forward the Plaid, Model S and X. And Model S will be delivered in February and X a little later. The Model S Plaid, and we’re actually in production now, and we’ll be delivering next month.”

  But when the company released its production and delivery numbers yesterday, which we documented at length here, their 8-K filed with the Securities and Exchange Commission clearly shows that no Model S or X vehicles were produced during the quarter.

  

  “This is blatant fraud,” Spiegel Tweeted to @SEC_Enforcement. And while it does appear that Spiegel has a case, if regulatory past performance by the SEC versus Elon Musk is any indication of future results, we’re not sure that anyone will care or that Musk will face any real consquences.

  The beat goes on…

  Tyler Durden
  Sun, 04/04/2021 – 18:00

• Goldman Asks "Is There A More Interesting Chart On Planet Earth Right Now"
  Goldman Asks “Is There A More Interesting Chart On Planet Earth Right Now”

  In his exhaustive Q1 lookback and post-mortem, Goldman’s Tony Pasquariello  (global head of Hedge Fund Sales, which these days we assume excludes family offices for obvious reasons) whose work we have profiled extensively in the past, discussed how much has changed in the past quarter, in which while stocks continued to ramp and closed 6.2% higher there was unprecedented turbulence below the surface, and is why he writes that “certain impulses changed as the quarter wore on, which presents a different setup for Q2.”

  In any case, while we will look at a detailed analysis of all that happened in one of the most unforgettable quarters in history (and they said 2021 would be much quieter than 2020), here are the seven most important market charts to follow according to one of the people who is most critical in setting the narrative at Goldman.

  1. Pasquariello starts with the latest fund flows, where he notes that on one hand the market has seen record inflows to equity funds to start the year yet at the same time that really only marks a reversal of outflows in the prior few years (and also takes place during a burst in market volatility as discussed in “Another Market Paradox: Wall Street Struggles To Explain Record Equity Inflows Amid Stock Turmoil“). According to the GS trader, while retail demand is apt to slow from a white hot pace, it should on net remain positive “as equity funds take from both bond funds and the money markets”:

  

  2. Looking ahead, Pasquariello says that Goldman’s composite score for the bank’s proprietary US reopening scale will be critical to watch in the coming months, as the US gets closer to normalcy with every passing day.

  

  3. In turn, the Goldman trader thinks “this is a very interesting chart”: the blue line is a custom basket of stocks levered to the stay-at-home theme (GSXUSTAY), expressed as a ratio vs S&P; the white line is a custom basket of stocks most exposed to the pandemic (GSXUPAND), also vs the S&P. “As you can see, these trades did exactly what you’d expect them to do for a while. What I
  find interesting, however, is how much these spreads have narrowed in recent months:”

  

  4. This brings us to the punchline: a very long-term chart of the long bond. According to Goldman, with the 30Y now at the long-term resistance line and potentially set to break a 31-year-channel, what happens next is critical, and is why Goldman asks “is there a more interest chart on planet earth right now.”

  

  5. And speaking of the bond market, Pasquariello notes that for all the uniqueness of this cycle, the relationship between bond yields (green line) and cyclicals vs defensives (white line) is right in line. In fact as the Goldman trader notes, “look at the tell equities gave in advance of the bond move last year.”

  

  6. One of the prevalent themes on Wall Street in Q1 has been the resurgence of faith in commodity names, and here is another reason why. The next chart from Pasquariello shows a measure of US wealth inequality. Why is this notable? Because as he writes, “the best era of US equality was coincident with exceptionally strong commodity prices. given the focus of global policy makers on the inequality issue right now, one can understand how this underscores a bullish medium-term call on commodities.”

  

  7. Finally, what chart recap is possible without mentioning the virtue signaling craze du jour: As Pasquariello concludes, “the more things change, the more they stay the same, and while outflows from equity funds have thankfully inflected (light blue) , investor demand for ESG product (dark blue) remains firmly in place” and os one of the biggest drivers of inflows into global stocks.

  

  Tyler Durden
  Sun, 04/04/2021 – 17:55

• CBS Yanks 'Straight-News' Article Advising Companies "How To Beat" Georgia Election-Integrity Laws
  CBS Yanks ‘Straight-News’ Article Advising Companies “How To Beat” Georgia Election-Integrity Laws

  Authored by Monica Showalter via AmericanThinker.com,

  Has CBS skidded down to straight-opinion activism? Sure looks like it.

  On April 2, they came out with a supposedly straight-news article (archived version here) bearing this headline:

  3 ways companies can help fight Georgia’s restrictive new voting law

  

  And here’s a summary of the content from the Daily Caller:

  The article in question, written by CBS MoneyWatch reporter Khristopher J. Brooks, gave three suggestions for companies to boycott Georgia’s voting law, according to “activists.”

  The first section urged companies not to donate to the two Georgia Republicans who co-sponsored the bill.

  The second bullet point pushed for companies to “spread awareness” via television and social media advertisements, and

  the third note called for them to “fight for federal law” regarding the “For the People Act.”

  It was as if aliens had taken over Georgia or a pandemic were on, and companies everywhere needed advice on what to do, how to combat it, since they would have no idea and CBS knows everything, even political strategy.

  What didn’t figure in this was that the law they advocated fighting was brought on by the duly-elected and legitimately seated legislature of Georgia. 

  It was pure, straight, naked activism masquerading as news.

  What it shows is that what was once the gold standard of straight-news reporting many decades ago is now as left-wing as The Nation:

  Now it’s been yanked, according to reports, because of backlash from the public, and more important to CBS News, other journalists, who recognize opinion-writing when they see it and know it wouldn’t cut it at their own outlets.

  

  Here’s some Twitter reaction from some of the few professional trained journalists out there:

  

  Embarassment, yes, for CBS, but don’t blame just the bylined writer.

  Incredibly, this crap passed through a lot of editors before making it onto the Internet. Anyone who knows the news industry would know that.

  And that demonstrates a problem of culture, a rotten fish problem that stinks from the top.

  Anyone hear anything funny from CBS of late suggesting as much.

  Take a look at Lester Holt. The Mr. Assuring Newsman of avuncular demeanor was just talking about the importance of not reporting conservative views in his reports. That would make such reports better, of course, but for Lester, they’d undermine the leftist agenda, so guess which one wins?

  I got news for Lester: I’ve been educated in journalism, too, at Columbia University’s famous grad school of journalism, in the 1990s, and don’t think that issue didn’t come up. I recall a memorably good professor of foreign reporting, Stanley Meisler, of the Los Angeles Times, teaching us kids at the time that we don’t have to give every nutbag view equal weight or even space in every story … but, and this is a big ‘but,’ we do have weigh whether a view with which we may disagree with, or find bad does have consequence. That’s called news judgment. 

  Umm, Lester apparently is saying that anyone with conservative views is bearing a view without consequence and conservative voices don’t matter. They’re fringe, despite 70-plus million votes that came in for President Trump in 2020, and therefore, like any nutbag view, need to be ignored. Sound like a good news judgment? Only if you are convinced that Democrats will be in power forever, conservatives will never vote to win, and Republicans will be erased, Stalin-style, from every picture.

  Thus far, history doesn’t work that way. But CBS is continuing its slide downhill, with a “news” culture that lets this kind of activist call to action get put out, trashing its credibility, and retreating only when other journalists say ‘yuck.’

  Tyler Durden
  Sun, 04/04/2021 – 17:30

• Record Warmth Spreads Across Western Half Of US
  Record Warmth Spreads Across Western Half Of US

  Several locations across the West and Midwest may experience record high temperatures this weekend, including Boise, Salt Lake City, Phoenix, Denver, Boulder, and Fort Collins. 

  

  Temperature anomalies for much of the West and Midwest are experiencing above-average conditions this weekend. Temperatures were 10 to 25 degrees above average in some spots. Above-average temperatures will continue through the midpoint of the month. After that, temperatures are expected to be more in line with seasonal averages. 

  

  On Sunday, the forecasted high of 81 degrees for Salt Lake City may smash the 132-year record. 

  Ahead of the warm shot, readers may recall, in a note titled “April Temperature Anomalies Spike In Central US As Farmers Prepare For Early Spring Planting,” we outlined how temperature models suggested warmer weather was ahead and would possibly result in an early spring planting season.

  However, with warmer temperatures hovering over the Western and Central US, these conditions support an elevated fire risk as drought conditions persist with high winds and low humidity. 

  Since our last drought note titled “Fears Of A “Return Of The 1930s Dust Bowl” Rise As Record Drought Sizzles Southwest,” in early March, persistent dry conditions continue for parts of the West, Southwest, and South. 

  

  What a wild few months of weather across the US as record low temperatures were set across the country in February – now record-high are being set in April, a testament to the highly volatile climate. 

  If weather volatility persists through spring, this could be bad news for farmers who many experience crop losses and add to supply strains that would continue to boost food inflation. 

  Tyler Durden
  Sun, 04/04/2021 – 17:00

• Could Bitcoin Solve The Oil Flaring Problem?
  Could Bitcoin Solve The Oil Flaring Problem?

  Authored by Felicity Bradstock via OilPrice.com,

  As governments aim to curb carbon emissions from gas flaring, Bitcoin data centers offer a way to use this energy instead of letting it go to waste, in return for the digital currency.  Gas flaring, a byproduct of fracked shale production, produces around 1 percent of global carbon emissions at present. Companies burn the gas off at the well site, rather than using it as an energy source, because of its unprofitable nature. The alternative option is simply to vent the gas into the atmosphere, releasing methane and adding to harmful greenhouse gasses that have a knock-on effect on the environment. 

  However, several companies are calling for an end to gas flaring within the next decade and looking to find other uses for this energy.

  

  Bitcoin producers realized this gas could be a great source of energy for small, transportable cryptocurrency data centers. One of the biggest problems faced by digital currency producers is the high price of electricity needed to farm the currency. But if this energy can be found cheaper from a product that would not otherwise be used, it could present the perfect solution for both industries. 

  In 2019, it was suggested that Bitcoin required more energy than the entire country of Switzerland for mining. This figure increased in 2020 and it is estimated that the Bitcoin network consumes around 80 terawatt-hours per year.

  But the swinging price of Bitcoin and the Covid-19 pandemic deterred oil companies from making a commitment until now. Bitcoin did not appear a viable long-term option due to its volatility, especially when the future of oil was also looking bleak in 2020. While some companies took the plunge and trialed a Bitcoin-for-gas program as early as 2019, this was a widely overlooked solution to flaring and venting.  

  Sergii Gerasymovych, the owner of a Bitcoin mining company, EZ Blockchain, reached out to oil and gas companies a few years ago to no avail. But “The market conditions have changed,” he explained. “Now, every oil and gas company we reached out to in 2018 is calling us back because they see Bitcoin is making a lot of money.”

  Bitcoin is becoming increasingly attractive to companies looking to modernize and go digital with the price of the digital currency doubling during the last year, despite a pre-pandemic dip. 

  EZ blockchain has recently set up five Bitcoin mines on gas sites, the latest in Utah with independent gas company Wesco Operating Inc. Other companies using the innovative solution include Crusoe Energy Systems Inc., which has introduced low-cost/no-cost ‘Digital Flare Mitigation’ programs with Bitcoin companies to put 20 data centers into action.

  Other countries have also recognized the opportunity, with Russian companies developing similar projects. In January, Russian state-owned oil major Gazprom Neft has announced a successful pilot project that uses gas that would otherwise be flared to produce electricity to mine cryptocurrency at a Siberian drilling site.

  Vekus was the first Russian cryptocurrency company to develop such an energy source for digital currency mining. Vekus used a shipping container to create an on-site mine, demonstrating the potential for digital currency mines to be placed on oil and gas sites around the country. 

  Russia is the world’s biggest gas flare producer, followed by Iraq, the U.S., and Iran, which in total accounted for 45 percent of global gas flares in 2017-2019. 

  Other cryptocurrency companies could make similar deals with oil and gas companies so long as they have proof of Work (PoW) option to process transactions. This could make digital currencies more sustainable in the long-term as electricity costs currently account for the majority of their production costs. 

  As oil and gas companies are feeling increasing pressure from regulators and governments to curb their carbon emissions over the coming decade, Bitcoin-for-gas could offer a simple solution to put an end to flaring and venting. 

  Tyler Durden
  Sun, 04/04/2021 – 16:30

• NASA's Marscopter Prepares For Imminent Flight On Red Planet 
  NASA’s Marscopter Prepares For Imminent Flight On Red Planet 

  On Saturday evening, NASA Jet Propulsion Laboratory tweeted its Mars helicopter “Ingenuity” officially touched down on the Red Planet after being released from the belly of the Perseverance rover. The first helicopter flight on Mars is expected in about a week. 

  “#MarsHelicopter touchdown confirmed! Its 293 million mile (471 million km) journey aboard @NASAPersevere ended with the final drop of 4 inches (10 cm) from the rover’s belly to the surface of Mars today. Next milestone? Survive the night,” NASA Jet Propulsion Laboratory tweeted. 

  

  The helicopter weighs about 4 pounds and is solar-powered. Much of the battery usage is to keep the internal system warm from the harsh Martian night. 

  “This heater keeps the interior at about 45 degrees F through the bitter cold of the Martian night, where temperatures can drop to as low as -130 F (minus 90 degrees Celsius),” NASA’s Bob Balaram, chief engineer for the Mars Helicopter project, wrote Friday. “That comfortably protects key components such as the battery and some of the sensitive electronics from harm at very cold temperatures.”

  The $85 million marscopter will be the first helicopter to fly on the Red Planet. Data from Ingenuity’s first flight, expected to be on Apr. 11, will be received by NASA on Apr. 12. Ingenuity is embedded with multiple cameras that will soon allow it to observe Jezero Crater (where the Perseverance rover landed on Feb. 18). Each flight will be conducted over a 300-foot-long flight range at a maximum altitude of 16.5 feet. 

  

  Balaram said after the first flight, “the Ingenuity team will be anxiously waiting to hear from the helicopter the next day.” 

  While Ingenuity is an exploratory technology demonstration, a successful test flight would confirm the helicopter technology could be scaled up, with larger models that may assist astronauts on the Red Planet with transportation one day. 

  Tyler Durden
  Sun, 04/04/2021 – 16:00

• "Record Market Fragility": Something Snapped In Q1… And What Goldman Expects For Q2
  “Record Market Fragility”: Something Snapped In Q1… And What Goldman Expects For Q2

  As Goldman trader and head of HF sales Tony Pasquariello writes in his first quarter post-mortem, “Q1 is done. boring, it was not.“

  And, boy, can say that again… but before we get into the weeds of what happened (and what may happen) let’s first take a look at the obvious – the best and worst performing assets of the past quarter.

  Luckily, Deutsche Bank has done the analysis, and in a note from the bank’s strategist Henry Allen, he writes that markets had a pretty mixed performance in Q1, with 20 of the 38 non-currency assets in the German bank’s sample having a positive return over the first three months of the year. The gains concentrated among risk assets including equities, oil and HY credit, as progress on the vaccine rollout and the prospect of further stimulus in the US proved supportive. In a reversal of 2020 however, safe havens have struggled against this backdrop, with gold the worst-performing asset in the main sample (bitcoin was on the other end) and sovereign bonds also losing ground over the quarter.

  A quick detour here from BofA CIO Michael Hartnett, gives us the highlights in the form of the following performance: Bitcoin 103.3%,  oil 21.9%, global stocks 4.7%, US$ 3.7%, cash 0.0%, HY bonds -0.1%, IG bonds -4.3%, government bonds -5.8%, gold -9.6% YTD.

  

  Going back to DB, we are reminder that one of the biggest stories over Q1 has been the massive rise in US Treasury yields. This began at the very start of the year as the results of the Georgia Senate runoffs meant that the Democrats would have control of both houses of Congress under the new Biden administration. In turn, this has given them the leeway to pursue substantial stimulus, with the $1.9tn American Rescue Plan already signed into law, and Biden announcing his American Jobs Plan yesterday. In response, yields on 10yr Treasuries have risen by +82.7bps over the quarter, which is the largest rise in absolute terms since Q4 2016 when Donald Trump unexpectedly won the presidency.

  However, the selloff in sovereign bonds hasn’t been confined to the US, with their European counterparts also losing ground as investors increasingly bet on a stronger economic recovery once the vaccine is rolled out. Gilts (-7.3%), bunds (- 2.4%) and BTPs (-0.9%) all fell over the quarter, though their monthly performance for March hasn’t been quite as bad, with only bunds losing ground slightly.

  On the other end, for equities, both March and Q1 marked a very strong performance, and in a major reversal from 2020, it was European indices which saw the largest advances. Over Q1, the DAX (+9.4%), the FTSE MIB (+11.3%) and the STOXX 600 (+8.4%) all saw solid gains in total return terms, while banks led the way thanks to higher yields, with the STOXX 600 Banks up +20.3% over the quarter. The US lagged behind however, with the S&P 500 up +6.2%, albeit rising to fresh highs in March, while EM indices were even further back, with the MSCI EM Equities up just +2.2% over the last three months.

  Of course, nothing compares to bitcoin, which has exactly doubled since the start of the year…

  

  … but away from crypto, the top performing asset continues to be oil on a YTD basis, with a Q1 performance of +22.7% for Brent Crude and +21.9% for WTI. Oil is still in the lead in spite of the fact that both prices fell over the last month, as concerns over a rise in Covid cases at the global level led to renewed fears about further restrictions and reductions in mobility. Nevertheless, while oil is at the top of the DB YTD sample, other commodities haven’t performed so well, with precious metals the worst, in a mirror image of returns last year.

  

  Bottom line, going back to Pasquariello, he puts it best saying that “on the surface, it was a fine quarter: S&P printed a 6.2% total return on 7.8% realized volatility, and sits within close reach of both the highs and the 4000 level.” However, as the Goldman trader expands, “those headlines, belie the degree of difficulty involved in managing professional money along the path — particularly within the fundamental long/short space.”

  To illustrate the turbulence below the surface, consider the following Q1 returns:

  • the hedge fund VIP basket (GSTHHVIP) underperformed a basket of widely held shorts (GSCBMSAL) by … 30%
  • growth stocks (GSXUMFGL) underperformed value stocks (GSXUMFVL) by … 28%.
  • 52-week momentum winners (GSCBHMOM) underperformed 52-week momentum losers (GSCBLMOM) by … 18%.

  In working through the presumed drivers of these factor breaks, the Goldman trader points out the following key items:

  1. be it the 82bps backup in US 10-year note yields — or the worst start to a year in the history of the aggregate index — the bond market sold off hard, with that came an element of climate change for stock operators.
  2. on one hand, Q1 saw the largest inflows to equity funds on record; on the other hand, as the quarter progressed, some steam came out of the higher velocity vehicles (witness a clear decline in single stock call option volumes, recent outflows from ARKK, and some indigestion in certain corners of the new issue market). ZH discussed this one month ago in  “Another Market Paradox: Wall Street Struggles To Explain Record Equity Inflows Amid Stock Turmoil“
  3. on the fundamental side, the fiscal story in Q1 was eye-popping; a $900bn rush in December was followed by a $1.84bn boomer in March. All of that was deficit financed. Meanwhile, as we learned last week, the next round – perhaps the final round – will be much more complicated with respect to funding and taxes.

  If all that is a little abstract for some, here is BofA’s CIO Michael Hartnett breaking down Q1 i) by the numbers; ii) by winners and losers and iii) by flows:

  Q1 by the Numbers:

  • 608MM global Covid-19 vaccinations,
  • More than $4tn US fiscal stimulus,
  • 200bps jump in US ’21 nominal GDP forecast to >8%,
  • global stocks +$5tn in market cap,
  • Value of negative-yielding global bonds drops $6tn,
  • Worst Q1 return for 30-year Treasury since 1919,
  • Worst Q1 for IG bonds since 1980,
  • Worst Q1 for gold since 1982.

  Q1 Winners & Losers:

  • winners = cyclical stocks…energy stocks 29%, oil 22%, banks 23%, copper 13%;
  • losers = bonds & duration…30yr UST -16%, gold -10%, EM LC bonds -8%, US IG bonds -6%, US biotech -4%;
  • tighter financial conditions led to “events”, e.g. GME, Archegos…, but stocks (XHB +22%, XBD +16%) signal “good” rise in rates thus far.

  Q1 flows: record inflow to global equity ($372bn), EM ($65bn), value ($35bn), tech ($30bn), financials ($24bn); largest equity inflow % AUM (2.4% – Chart 3) in 15 years…

  

  … although this appears to be reversing with the biggest tech outflows since Sept 2020:

  

  Indeed, while superficially the broader markets rose, there was a tangible bifurcation within risk assets with catastrophic results for some traders. 

  Which brings us to the latest note from BofA derivatives strategist Benjamin Bowler, who in a note published last week, reverts to his favorite theme, namely that growing market fragility has made risk-taking extremely risky, despite the overall rise in markets.

  As Bowler puts it, in words that could threaten to “cancel” him for being overly honest, “markets are fragile owing to extreme liquidity driving asset bubbles and trading liquidity drying up at record speed during times of stress.” He then adds that “while an increasing number of people intuitively accept this fact, modelling this risk can be difficult, and underappreciating the nature of fragility can make risk-managing levered positions challenging. In part, this is because traditional volatility metrics woefully understate today’s still high PNL volatility among US stocks.” 

  What does Bowler mean by this? Well, consider that as shown in the chart below, so far in 2021, the total market cap being gained or lost in extreme swings among S&P 500 stocks is nearly on par with that of the first half of 2020 (during the Covid crash), despite stock volatility being over 40% lower now.

  

  Notably, there were unprecedented, extreme swings among small cap stocks, which in Q1 set records with 80% more 10-sigma upside shocks this year than ever before according to BofA, which to Bowler illustrates that “there is more risk to managing risk than meets the eye.”

  

  In other words, something clearly snapped in the market’s “reaction function” to a quarter that saw a gargantuan fiscal stimulus injected into the economy to make the already massive monetary stimulus.

  This, in turn, takes us back to the conclusion from Goldman’s Pasquariello, who summarizes his market sentiment as follows:

  certain impulses changed as the quarter wore on, which presents a different setup for Q2. to be clear, if April and May are THE peak growth months for US economic activity — perhaps as robust as anything we’ll see in the remainder of our careers, — there’s still a lot to play for.

  It perhaps not surprising then that looking ahead, one of Goldman’s top traders believes that “a reflationary framework is the right place to anchor your risk-taking” although there are a few key caveats:

  I’m trying to balance that anchor point against an instinct that liquidity dynamics – and the trading environment – are changing. If that’s all mostly correct, the path higher from here is apt to be choppier and risk/reward is not what it was four or five months ago. in practical terms, this argues for a more tactical trading stance where illiquid positions – and recency bias – are the enemy.

  That said, in his final point, Pasquariello writes that if he is wrong on the view that risk/reward is a bit more balanced now, he thinks it will be on the right tail. as the US quickly moves towards herd immunity. In other words, he expects a blow off top in risk assets, due to the following three data points:

  • i. $4.44tr currently sits in US money market funds ($1.5tr is held by retail, $2.94tr is held by institutions). since February of 2020, that $4.44tr pile has grown by … $830bn.
  • ii. US households have accumulated about $1.5tn in ‘excess’ or ‘forced’ savings, and Goldman expects that to rise to about $2.4tn, or 11% of GDP, by the time that normal economic life is restored around mid-year
  • iii. attendant to the largest jump in US consumer confidence in 18 years: a record share of respondents said they plan to purchase a home in the coming months. a measure of consumers’ plans to buy cars and major appliances also rose. a separate report Tuesday showed U.S. home prices surged to the highest since February 2006.

  Pasquariello then shares several “must see” charts (profiled earlier), which also includes the long-term chart of the 30Y TSY, which to the Goldman trader is “the most interesting chart on planet earth right now.”

  

  Read the full post here.

  Tyler Durden
  Sun, 04/04/2021 – 15:30