• Italy Won't Bow To Powerful Elites In Favor Of Open Borders, Insists Meloni
  Italy Won’t Bow To Powerful Elites In Favor Of Open Borders, Insists Meloni

  Authored by Thomas Brooke via Remix News,

  A defiant Giorgia Meloni offered a staunch defense of her government’s handling of the migrant crisis in the Chamber of Deputies this week…

  

  Italian Prime Minister Giorgia Meloni told political opponents she will not bow to the political pressure exerted by powerful elites in favor of open borders.

  Speaking during Question Time in the Chamber of Deputies, Meloni responded to questions related to her government’s handling of the ever-increasing migratory pressure in the Mediterranean following government data published this week that revealed more than 20,000 people have now reached the country so far this year.

  “As long as there are departures on boats in bad condition, navigating in bad weather conditions, there will be loss of life,” she told parliamentary colleagues.

  “We need to invest in legal routes, and that is exactly the job the government is doing. Our conscience is clear. I hope that whoever attacks the government but does not say a word about smugglers can say the same,” she added.

  She offered a staunch defense of the country’s coastguard, which came under considerable scrutiny from Italy’s left-wing press in the aftermath of the migrant boat tragedy in the Ionian Sea, which cost several dozen lives.

  The Italian premier expressed her amazement that “for political ends, we end up questioning the honor and the work of people who risk their lives every day to save human lives and the honor of Italy.”

  On the wider migratory issue gripping the nation, Meloni highlighted that “for several months we have been witnessing a migratory pressure that has few precedents toward Europe and Italy,” and despite calls from humanitarian lobbyists and political opponents, she “has no intention of bowing to the many powerful pressures of those who would like a vision without national borders.”

  She reiterated her desire to “firmly combat illegal traffickers and manage immigration in a regular way” through government decree and subsequent legislation. However, she warned that Italy cannot be expected to handle the crisis alone and called for “a framework of responsibility that must also involve the other European states.”

  The conservative administration in Rome has been busy tackling the issue facing Italy and wider Europe since its electoral success in September, with Meloni recently introducing legislation to pass tougher sentences on convicted people smugglers. Those found guilty of the offense could soon face up to 30 years in prison should their negligent actions or failure to act result in the death of vulnerable migrants.

  Meloni also issued several government decrees that she aims to pass to stifle the operations of humanitarian search-and-rescue vessels operating in the Mediterranean. The decrees, which have caused outrage among the Italian left and European NGOs, call on vessels operating in the area to return to land immediately after a rescue, rather than remaining at sea and effectively becoming a magnet for other prospective migrants encouraged to attempt the perilous journey.

  This perspective was supported by a recent report by Italy’s intelligence services, which claimed the presence of NGO vessels in the Mediterranean is fueling the migrant crisis.

  The report accused NGOs of providing “a logistical advantage for the criminal organizations that manage migrant trafficking, allowing them to adapt their modus operandi according to the possibility of reducing the quality of the vessels used, correspondingly increasing illicit profits, and exposing the people on board to a more concrete risk of shipwreck.”

  Tyler Durden
  Fri, 03/17/2023 – 02:00

• Feds' Foreign-Corruption Double Standard: They Protected Bidens While Bearing Down On Trumpworld
  Feds’ Foreign-Corruption Double Standard: They Protected Bidens While Bearing Down On Trumpworld

  Authored by Paul Sperry via RealClear Wire,

  At the same time that Department of Justice officials were using spying and corruption statutes to aggressively pursue Donald Trump’s allies based on what turned out to be rumor and innuendo, they declined to use those same laws to investigate evidence of wrongdoing involving Biden family members and one of their corrupt Chinese business partners, DOJ documents and federal court records reveal.  

  In 2016-2017, the evidence shows, the FBI raided the offices and intercepted the communications of Chi Ping “Patrick” Ho, a Chinese national agents suspected of espionage even as he was negotiating business deals with former Vice President Joe Biden’s son Hunter and brother James. 

  DOJ later used information obtained from the searches and wiretaps – which included conversations with the current President’s son and brother – to convict Ho of bribery and money laundering, as part of a separate corruption case involving United Nations officials. But it declined to tap into its trove of evidence – including “over 100,000 emails” – to explore the connections between Ho and the Bidens, who received millions of dollars from Ho and a Chinese intelligence front and discussed sharing office space. 

  At Ho’s 2018 trial, prosecutors hid Hunter’s connection to Ho, redacting his name from court exhibits (see sidebar) while describing Ho as “the person who flies around the world paying bribes to advance the interest of the oil company [CEFC China Energy],” according to hearing transcripts.

  A federal database shows the Bidens failed to register as foreign agents while engaged in activities on behalf of CEFC, a state-owned entity suspected of being a front for Chinese intelligence. Federal anti-spying laws require anyone acting as a lobbyist for a foreign power to register with the Justice Department under the Foreign Agents Registration Act (FARA). 

  The DOJ did not prosecute either Biden family member for potential violations of FARA for representing the interests of the Chinese. 

  This stands in stark contrast to the DOJ’s aggressive pursuit of alleged FARA violations involving no fewer than six Trump campaign officials. In August of 2016, shortly after receiving a tip that a low-level Trump campaign volunteer, George Papadopoulos, had allegedly been told that the Russians might have dirt on Hillary Clinton, the bureau opened FARA investigations into Papadopoulos and three other Trump associates with no clear ties to Papadopoulos: national security adviser Michael Flynn; campaign manager Paul Manafort; and campaign adviser Carter Page. The FBI subsequently investigated Manafort’s deputy Rick Gates; and Trump’s Mideast adviser Walid Phares under the same statute. 

  As RCI has previously reported, the FBI used FARA as the basis for a wide-ranging probe that included tailing them, staking out their homes, digging through their trash, and using confidential sources to secretly record them. Only one of the six was convicted for FARA-related violations, and none was charged with any espionage or conspiracy crimes involving Russia.

  “It’s 100% a double standard, and it’s absolutely corrupt to the core,” former assistant FBI director Chris Swecker told RCI. “And meanwhile, [current FBI Director] Chris Wray fiddles.”

  Other veterans of the bureau say the Obama and Biden administrations have politicized and weaponized FARA.

  “Starting in 2016, the Obama-Biden administration used FARA and the criminal justice system as tools to attack and eliminate the opposition,” said 27-year FBI veteran Michael Biasello, adding that many of the same officials are “back in charge and making sure those tools won’t be turned on themselves.”

  An FBI spokeswoman said the agency had no comment on why it did not apply the foreign lobbying law equally. The Justice Department did not return requests for comment.

  Ho and Hunter: A Lucrative Relationship  

  Court records and other documents show that Hunter Biden met with Ho’s boss Ye Jianming in February 2017 in Miami, where the CEFC chief offered him up to $30 million for “introductions alone,” according to emails. Ye – who had connections to both China’s Communist Party in China and its armed forces, the People’s Liberation Army – sealed the deal with a lucrative gift to Hunter: a 3.16-carat diamond worth an estimated $80,000. (Hunter never returned the large gem.)

  Not long after their private dinner, CEFC began wiring millions of dollars from China to pass-through companies set up by Hunter Biden. Over the next 14 months, Hunter and Jimmy Biden (as the latter is known to family and friends) ultimately received almost $6 million from CEFC entities, according to congressional investigators, including $1 million from Ho. At the time, the FBI was tracking Ho’s and CEFC’s “bank and wire transfer records,” according to DOJ records, which indicates agents were aware of the China-based payments to the Bidens.

  As Hunter was meeting Ye that February, DOJ records show, the FBI renewed a Foreign Intelligence Surveillance Act warrant targeting Ho. Former FBI officials say agents had a clear window into how the Chinese were attempting to cultivate the Bidens.

  When Hunter formally structured the CEFC deal in May 2017, text messages found on his abandoned laptop reveal, he was worried about running afoul of two federal laws: the Foreign Corrupt Practices Act – which Ho was convicted of violating – and FARA. 

  “We don’t want to have to register as foreign agents,” Hunter texted another partner in the deal, and suggested they set up a U.S. shell company towork around it. 

  In the end, Hunter never registered with the Justice Department, according to a search of the FARA database. Nor did uncle Jimmy. They also did not report their activities for CEFC or any of the almost $6 million in wire payments they received, as required by law.

  The texts indicate Hunter was familiar with the requirements of the law. Violations carry a maximum punishment of five years in prison. 

  Hunter and his attorney did not respond to messages seeking comment. Attempts to reach James Biden were unsuccessful.

  Also that May, the uncle sent his nephew a list of “key domestic contacts” they could exploit to advance the interests of their Chinese partners. Then-California Sen. Kamala Harris and then-California Lt. Gov. Gavin Newsom were among the powerful Democrats listed.

  China has sought to influence powerful officials, particularly to gain access to U.S. energy markets, which are heavily regulated. CEFC is the capitalist arm of Chinese President Xi Jinping’s “Belt and Road Initiative” to spread China’s influence around the world while gobbling up oil and gas rights.

  In an August 2017 email to another Ye lieutenant, Hunter guaranteed his family would follow through on the introductions as long as the money kept flowing: “The Bidens are the best I know at doing exactly what the Chairman [Ye] wants from this partnership.”

  And the China-based funds flowed and flowed into Biden bank accounts. The CEFC contract guaranteed Hunter $150,000 a month, with another $65,000 a month for Jimmy Biden. The vast majority of Americans do not make $150,000 in a year. 

  The payments, earmarked as “consulting fees,” raised so many red flags at Wells Fargo and other banks that processed the funds that they notified the Treasury Department they had concerns about possible money laundering and other financial crimes. Treasury, in turn, generated some 150 Suspicious Activity Reports related to the financial transactions.

  The Biden administration has refused to turn over the Treasury reports to Congress, despite repeated requests for them. Congressional investigatorsare trying to determine if any of the “large wire transfers” enriched the president, either directly or through gifts-in-kind.

  Early on, Joe Biden appeared from emails to be cut in on a future CEFC deal, which is at odds with his repeated denials about being involved in – or even knowing anything about – his son’s business dealings.

  In a May 2017 meeting at a Beverly Hills hotel, Biden discussed the CEFC venture with Hunter’s business associate Tony Bobulinski, according to Bobulinski, who said they spoke for more than an hour. An email that same month described the “big guy” getting a 10% cut. Bobulinski has confirmed Joe Biden was the “big guy.” An October 2017 email, moreover, identifies the former vice president as a participant in a call about CEFC’s plans to purchase U.S. natural gas. 

  ‘Take Whatever Money You Can Take’

  It’s not clear what the Chinese got for all their money, which didn’t appear to correspond with any actual billing for consulting work.

  At one point a CEFC aide simply told Hunter in a laptop email: “[T]ake whatever money you can take. Take as much as possible … to spend for your own benefit.” The Bidens did virtually no “legitimate” work for CEFC, according to congressional  investigators, who question whether CEFC sought out Hunter as part of anintelligence-gathering operation aimed at his father. 

  Hunter appeared to know he was accepting tainted money that might compromise national security. In an audio recording found on his laptop, he described his Chinese partner Ho as “the fucking spy chief of China.”

  In November 2017, two FBI agents arrested Ho at JFK International Airport in New York.

  After seizing his Huawei cell phone and iPad from his luggage, law enforcement records show, they charged him with attempting to bribe former U.N. officials and African government officials with wire payments and even boxes of cash to secure lucrative oil rights in African countries. 

  Ho’s first call from jail was to James Biden, law enforcement records show. The call was made less than 10 minutes after agents read Ho his Miranda rights.

  The Bidens’ Chinese benefactor-turned-inmate had hoped James and his nephew would use their political clout to spring him. Hunter quickly put in some calls to the FBI on his behalf, according to an email exchange he had that day with New York defense attorney Edward Kim, who represented Ho throughout his trial.

  A retainer agreement found on Hunter’s laptop shows that Ho had paid Hunter $1 million for “Dr. Patrick Ho Chi Ping Representation,” even though Hunter is not licensed to practice law in New York. Kim was Ho’s real attorney, not Biden. The Bidens had some powerful FBI friends, including former FBI Director Louis Freeh (who, records show, got a seat on the Beau Biden Foundation board after giving Joe Biden’s grandchildren $100,000). But they weren’t able to help Ho, who stayed locked behind bars at the Metropolitan Correctional Center in downtown Manhattan.

  Agents subsequently raided the D.C.-area office of Ho, located about 10 minutes from Hunter Biden’s own office, which also has not been previously reported.

  However, agents never searched Biden’s office, to which his Chinese partners had key access, and prosecutors never indicted Biden – despite evidently knowing the president’s son failed to register as a foreign agent representing the interests of the Chinese government agents in Washington in exchange for several million dollars.

  The DOJ records reveal the FBI seized a massive trove of CEFC evidence, including “more than 100,000” emails, from searches of Ho’s phone, computers and offices in Manhattan and Arlington, Va., including emails citing Hunter Biden. No fewer than five of Ho’s email accounts –  both business and personal – were targeted for FISA collection, according to the DOJ records reviewed by RCI.

  FISA surveillance is sweeping, and former FBI officials say it would have included phone conversations between Ho and CEFC and Hunter Biden – as well as his uncle, who was also a partner in the joint venture with the Chinese and also communicated with Ho.

  “FISAs include everything,” Swecker said, “so it definitely included his emails and texts [with the Bidens].”

  He said the bureau could have used the evidence to investigate the Bidens at the time, but backed off. He added that even though the FBI maintains the FISA-collected material in a classified database, he doubts investigators will use it now to go after the Bidens.

  “FISA material cannot be used in a criminal proceeding unless you get a special court order,” Swecker said. “I suspect the FBI would not even try to do that now given their hands-off conduct on this case in the past.”

  Even if Wray were to launch a probe now, it might be too late. Most federal felonies have a five-year statute of limitation.

  Swecker, who served as a prosecutor before joining the FBI, said FARA violation cases against the Bidens would have been a slam dunk. He noted that CEFC was a foreign principal as defined by the FARA statute. And he said the Bidens’ consulting work for CEFC benefitted the Chinese government, making them potential agents of that government. He added that Ho and his CEFC bosses were no doubt targeting future presidential candidate Joe Biden, while Hunter and Jimmy Biden were peddling influence with the Chinese to generate millions for the Biden family.

  “It’s strange how there was no curiosity [at Justice] whatsoever about foreign influence on a potential president of the United States, especially from this country’s greatest threat – China,” Swecker said.

  Stranger still is that DOJ prosecutors knew the Bidens’ partner was a dangerous Chinese agent with “powerful” military and political ties, including to the leadership of the Central Committee of the Chinese Communist Party.

  In court filings, federal prosecutors noted Ho previously served as a Chinese government minister where he helped Hong Kong transition from British to Chinese state rule. They introduced recordings from prison, translated from Chinese, where Ho can be overheard directing Chinese allies to ask “the upper level” of the CCCP to “get involved” in his case.

  “He has powerful connections in mainland China,” then-U.S. Attorney Geoffrey Berman said in a nine-page memo arguing for his continued detention. “It is difficult to overstate how well-connected Ho is.”

  While the defense portrayed the portly, bespectacled Ho as a harmless academic running a “think tank” promoting international economic development, the China Energy Fund Committee, prosecutors accused Ho of not only doling out bribes but trafficking arms, including grenade launchers and anti-tank missiles.

  After serving out his term, Ho was immediately deported back to China. 

  Charlie McGonigal

  One explanation for the FBI’s and DOJ’s lack of interest in prosecuting the Bidens in the Ho case may be the role played by former FBI official Charles “Charlie” McGonigal.

  FBI sources say McGonigal oversaw the initial espionage probe of Ho, including the FISA coverage of his communications, as head of the FBI’s counterintelligence wing of the New York field office, where the investigation was opened.

  McGonigal was recently arrested for allegedly taking bribes from an Albanian-American connected to CEFC, according to court records. He allegedly received $225,000 in cash from former Albanian intelligence official-turned-New Jersey businessman Agron Neza. Neza introduced McGonigal to Dorian Ducka, who worked as an adviser to CEFC and was trying to secure oil-drilling licenses in Albania for the Chinese. Ducka was close to CEFC chairman Ye, who dropped off the expensive diamond “gift” for Hunter Biden at his Miami hotel room. Ducka appears in emails found on Hunter’s laptop discussing CEFC business prospects.

  Prosecutors say McGonigal first met with Neza in August 2017 – the same month the Bidens were ramping up their deal with CEFC. The nextmonth he met with Ducka. During this time,  McGonigal was overseeing the CEFC-Ho counterespionage case.

  In an interview, former FBI counterintelligence attorney Mark Wauck said McGonigal may have pulled punches in the counterespionage probe of the Bidens and their Chinese bagmen because he himself was potentially compromised by the Chinese.

  “Keeping the PRC angle in mind is important, once you realize this guy was for sale,” Wauck told RCI, referring to the People’s Republic of China.

  It’s not immediately known if McGonigal was one of the FBI agents Hunter reached out to in 2017 after Ho called from jail pleading for help from his Biden payees. But the two men may have had a personal connection through their daughters.

  According to emails stored on Hunter’s laptop, McGonigal’s wife Pamela and Hunter both received dozens of messages related to private lacrosse clinics in 2014 and 2015, when McGonigal was working out of the FBI’s Baltimore field office. Their daughters played at lacrosse training facilities in the Maryland-D.C. area.

  McGonigal was a protege of former FBI director James Comey, who signed off on FISA spy warrants targeting Trump’s presidential campaign and was directly involved in the Russiagate investigation of the former president. In a May 2017 national security forum, McGonigal sang the praises of his erstwhile boss, who had just been summarily dismissed by Trump.

  “Director Comey was probably one of the most loved leaders that we’ve had,” McGonigal said. “I think many of us who were nominated for leadership positions by him will forever hold him in esteem.”

  McGonigal worked on national security cases with top DOJ official David Laufman, an Obama appointee based in Washington who made the decisions in 2017 to pursue Trump and his associates over possible FARA violations, while leaving the Bidens untouched. An Obama donor, Laufman stepped down as the chief of Justice’s National Security Division’s Counterintelligence and Export Control Section in February 2018.

  The feds also had evidence of possible violations of the Foreign Corrupt Practices Act from the many suspicious financial transactions between the Chinese and the Bidens. But investigators focused instead on Chinese attempts to corrupt former African officials and their families – even thoughbribing the family of an American vice president constituted a potentially far bigger scandal.

  Swecker noted that counterespionage officials at the FBI and DOJ gathered far more evidence concerning the Bidens’ troubling connections to China than they ever did concerning Trump and his advisers’ alleged ties to Russia. In fact, much of the foundation for alleged Trump-Russia“collusion” turned out to be fabricated by two FBI informants who also happened to work for the Hillary Clinton campaign.

  In the same 2016-2017 period the FBI had Ho under FISA surveillance, it was secretly monitoring former Trump campaign adviser Page as an alleged Russian agent through a series of FISA warrants – half of which were later invalidated by the spy court. The FISAs were based on false rumors from political opposition research contained in a dossier commissioned by the Clinton campaign.

  Unlike Ho, Page was never accused of criminal wrongdoing or convicted of a crime.

  Subpoenaing Hunter and Jimmy Biden 

  Another Trump-tied counterespionage target in the FBI’s Russiagate crusade was retired Lt. Gen. Flynn, who served in the White House asTrump’s national security adviser before resigning less than a month after taking office as a result of what he called a politically motivated vendetta by the FBI and DOJ. In 2016, the FBI opened an investigation of Flynn based on possible FARA violations. Though the case was later dropped, prosecutors charged him with making false statements. DOJ eventually had to dismiss those charges, as well.

  This month Flynn filed a $50 million lawsuit claiming “malicious prosecution” by Comey, his former deputy Andrew McCabe, and his counterintelligence chief Peter Strzok, along with former Special Counsel Robert Mueller and his lead prosecutor Brandon Van Grack, an Obama donor.

  The 51-page complaint filed in federal court in Tampa claims their goal was to sabotage Trump and prevent Flynn from blowing the whistle on the FBI’s illegitimately predicated Russiagate probe as Trump’s national security adviser, where he would have had access to intelligence across theagencies. Then-Vice President Biden is named in the scheme.

  In a phone interview, Flynn told RealClearInvestigations the specter of his exposing the FBI’s and DOJ’s cover-up of the Bidens’ Chinese connection was “another reason for getting me out of the way.”

  As former Defense Intelligence Agency director, he said he posed a direct threat to corrupt actors in the intelligence community: “There was never a national security adviser with my type of background in that key role.”

  In their probe of Biden foreign influence-peddling, congressional investigators are zeroing in on the CEFC connection.

  Last month, House Oversight Committee Chairman James Comer sent letters to Hunter Biden and his uncle Jimmy seeking all of their communications with Ho and other CEFC principals.

  After Hunter and his legal team missed the Feb. 22 deadline to turn over the documents, Comer threatened to issue subpoenas to compel them to comply with the order. Now he says he will give Hunter’s camp more time to respond, so if his committee has to subpoena the documents, it will have a better chance of winning in court by showing a “good-faith effort” to obtain them through cooperation.

  Sen. Chuck Grassley, a senior Republican member of the Senate Judiciary Committee, has launched a parallel investigation of the Bidens’ dealings with CEFC. In letters to DOJ, he’s complained about the uneven enforcement of the FARA statute when it comes to the Biden family. He said both Hunter and his uncle should have registered as foreign agents of the China-backed energy conglomerate.

  “Hunter and James Biden, based on family name and political influence, were agents of CEFC,” he said in a statement, “as both had planned roles with CEFC which would ultimately benefit the communist Chinese government.”

  Grassley argued that CEFC intended to alter U.S. policy and public opinion through the Bidens, and the Chinese government would have been the principal beneficiary of those actions.

  “The [FARA] law must be followed and enforced without regard to party, power or position,” Grassley spokesman Taylor Foy asserted in an interview.

  *  *  *

  Paul Sperry is an investigative reporter for RealClearInvestigations. He is also a longtime media fellow at Stanford’s Hoover Institution. Sperry was previously the Washington bureau chief for Investor’s Business Daily, and his work has appeared in the New York Post, Wall Street Journal, New York Times, and Houston Chronicle, among other major publications.

  Tyler Durden
  Thu, 03/16/2023 – 23:45

• Former Australian PM Savages 'Rubbish' AUKUS Deal With US: "Worst Deal In History"
  Former Australian PM Savages ‘Rubbish’ AUKUS Deal With US: “Worst Deal In History”

  Former Australian Prime Minister Paul Keating, who is among the country’s most well-known and influential political thinkers, has shocked the establishment by coming out with a blistering attack on Australia’s AUKUS nuclear-powered submarine deal with the United States and the United Kingdom. He blasted it as the “worst international decision” by a Labor government since the conscription order of World War I. 

  He said in written statement on the occasion of addressing the National Press Club on Wednesday that the submarine deal is fundamentally about “US strategic hegemony in Asia” and that Australia has now unwisely hitched its wagon to Washington. Keating wrote in the rare critique that “China has committed, in the eyes of the United States, the great sin of internationalism. And what is that sin? To develop an economy as big as the United States.”

  “The Americans will never condone or accept a state as large as them. That’s what China presents. They would have preferred that [China] – 20 per cent of humanity – remained in poverty forever. But the fact that China is now an industrial economy larger than the United States … it is not in the playbook.”

  

  That’s when he concluded that ultimately, “This is what [Aukus] is about, the maintenance of the US strategic hegemony in Asia.”

  In reference to the deal announced and confirmed by President Joe Biden on Monday in San Diego while standing beside his Australian and British counterparts, Keating wrote, “For $360 billion, we’re going to get eight submarines. It must be the worst deal in all history.”

  He took direct aim at the current Australian PM and other top officials, writing the following: 

  “This week, Anthony Albanese screwed into place the last shackle in the long chain the United States has laid out to contain China.”

  “No mealy-mouthed talk of ‘stabilisation’ in our China relationship or resort to softer or polite language will disguise from the Chinese the extent and intent of our commitment to United States’s strategic hegemony in East Asia with all its deadly portents.”

  “History will be the judge of this project in the end. But I want my name clearly recorded among those who say it is a mistake. Who believes that, despite its enormous cost, it does not offer a solution to the challenge of great power competition in the region or to the security of the Australian people and its continent.”

  Australians who don’t want a war with China are still unclear about how to respond to this deluge of mass media war propaganda our country is being smashed with, and Keating showed exactly how to respond. He provided a solid model for us all.https://t.co/noXxKehvpB

  — Caitlin Johnstone (@caitoz) March 16, 2023

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

  Keating emphasized that Australian sovereignty must comes first, but Washington is aiming to become the “primary strategic power in Asia” despite having “no land in the metropolitan zone of Asia” given that it’s some 10,000km away.

  English-language media in some instances was quick to suggest he’s playing into Chinese and Russian propaganda while not dealing with his actual arguments. Anthony Albanese also said the former PM has “diminished” himself. “It is unfortunate that Mr Keating chose such a very strong personal statement against people. I don’t think that that does anything other than diminish him, frankly,” the prime minister said. “We’ll continue to do what we need to do to defend our nation,” he added, but without addressing how the government hopes to pay for the massive decades-long nuclear submarine program.

  Tyler Durden
  Thu, 03/16/2023 – 23:25

• "I’m Telling You, He Did It": Seymour Hersh Blames Biden For Nord Stream Attack
  “I’m Telling You, He Did It”: Seymour Hersh Blames Biden For Nord Stream Attack

  Authored by Paul Joseph Watson via Summit News,

  Pulitzer Prize-winning journalist Seymour Hersh told the National Press Club in Washington, D.C. that Joe Biden made the decision to blow up Russia’s Nord Stream pipelines because he saw being a war president as giving him a better chance at re-election.

  

  Last month, Hersh published a report asserting that the pipelines were destroyed by the US as part of a covert operation.

  According to Hersh’s sources, the explosives were planted in June 2022 by US Navy divers under the guise of the BALTOPS 22 NATO exercise and were detonated three months later with a remote signal sent by a sonar buoy.

  One source told Hersh that the plotters knew the covert operation was an “act of war,” with some in the CIA and State Department warning, “Don’t do this. It’s stupid and will be a political nightmare if it comes out.”

  Last week, the New York Times reported that a “pro-Ukrainian group” had sabotaged the pipelines, using a team with as few as six people involved in the mission, contradicting previous assumptions that only a state would have had the resources to carry out the operation.

  According to Hersh, referring to Biden, “He did it. He did it, I’m telling you, he did it,” adding, “The Biden game is to wait it out and never say yes.”

  The journalist claimed that Biden wanted to escalate the conflict in order to position himself as a war president.

  “I think Biden also saw beating up Russia as a ticket. Jack Kennedy is a classic example – presidents always did well politically in wars,” he said.

  Hersh claimed that Biden made the decision in January 2022 to “see if we can find a way to blow… those pipelines, and put [the Russians] back in the dark ages.”

  The Pulitzer-Prize winner went on to savage the legacy media for completely failing to follow up on his report that the U.S. was responsible for the attack, which took out three of the four pipelines.

  Meanwhile, China has reacted with skepticism towards the explanation that a pro-Ukrainian group was responsible for the blasts.

  During a press briefing, Foreign Ministry spokesman Wang Wenbin called for “an objective, impartial and professional investigation” into the bombing.

  “We have noted that some Western media have been mysteriously quiet after Hersh reported that the US was behind the Nord Stream blast. But now these media are unusually simultaneous in making their voice heard. How would the US account for such abnormality? Is there anything hidden behind the scene?” Wang asked.

  New reports also reveal that a German spy ship was in the area where the attack occurred at the time of the blasts on September 26.

  According to a report by German magazine Der Spiegel, the CIA warned Berlin about a potential attack on gas pipelines in the Baltic Sea weeks before it happened.

  As we highlighted yesterday, Russian President Vladimir Putin branded claims that the Nord Stream pipeline attack was the work of pro-Ukrainian activists “nonsense,” arguing the blasts must have been carried out by a state power.

  *  *  *

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  Tyler Durden
  Thu, 03/16/2023 – 23:05

• NASA Unveils Next-Gen Spacesuit For Upcoming Moon Mission
  NASA Unveils Next-Gen Spacesuit For Upcoming Moon Mission

  NASA and the Houston-based aerospace company Axiom Space revealed next-generation spacesuits that astronauts would wear on the Artemis III moon mission. 

  Compared to the inflexible Apollo suits that astronauts were equipped with over 50 years, the new suits are designed to be more flexible, said Russell Ralston, deputy program manager at Axiom Space.

  “Axiom Space’s Artemis III spacesuit will be ready to meet the complex challenges of the lunar south pole and help grow our understanding of the Moon in order to enable a long-term presence there,” Michael T. Suffredini, Axiom Space president and CEO, wrote in a press release. 

  The new Axiom Extravehicular Mobility Unit (AxEMU) spacesuit was on full display at Space Center Houston’s Moon 2 Mars Festival on Wednesday. A “full fleet” of training spacesuits will be delivered to NASA by late this summer. 

  Axiom Space just unveiled a prototype of the spacesuit NASA astronauts will wear when walking on the #moon. pic.twitter.com/Dg6pzOnTEi

  — Andrea Leinfelder (@a_leinfelder) March 15, 2023

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

  Here’s a better view of the spacesuit. 

  

  The moon mission is slated for launch from Kennedy Space Center in Florida atop the Space Launch System in 2025 with four astronauts. And, of course, NASA went ‘woke’ by recently saying the “crew will be selected from among the most diverse astronaut in history.” 

  Tyler Durden
  Thu, 03/16/2023 – 22:45

• US Says China Preparing For War It Doesn't Want To Fight
  US Says China Preparing For War It Doesn’t Want To Fight

  Authored by Dave DeCamp via AntiWar.com,

  A Defense Intelligence Agency (DIA) official assesses that China’s growing pessimism over its relationship with the US is making Beijing prepare for a future war it would rather not fight, Voice of America reported Wednesday.

  “China doesn’t want to start a fight with us over Taiwan,” Doug Wade, the head of the DIA’s China Mission Group, said at a virtual event hosted by the Intelligence and National Security Alliance.

  

  “They will if they have to … they haven’t ruled it out,” Wade added. China’s official position is that it seeks “peaceful reunification” with Taiwan but doesn’t rule out using force.

  While China is reluctant to start a war, Washington’s increasing support for Taipei has led to Beijing putting more military pressure on Taiwan. The US’s overall military buildup in the Asia Pacific is also naturally making China think they have to prepare for a future conflict.

  The US has shown no interest in backing off, and US military officials are openly discussing their plans for a future war with China. Wade warned that the two powers are entering an “increasingly confrontational period,” which he expects to play out across all domains.

  “It’ll manifest itself pretty much across the spectrum – every warfighting domain in every sphere of diplomatic, informational, economic, commercial,” Wade said.

  Chinese officials have been calling for better relations with the US but have also stepped up their warnings about where the two powers are heading.

  Chinese President Xi Jinping appointed his “war cabinet” in October; he is implementing the largest military buildup since the Second World War; he has been trying to sanctions-proof his regime; and he is mobilizing the civilian population for war. https://t.co/aImFV9jUwL

  — Gatestone Institute (@GatestoneInst) March 12, 2023

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

  “If the United States does not hit the brake, but continues to speed down the wrong path, no amount of guardrails can prevent derailing, and there surely will be conflict and confrontation,” Chinese Foreign Minister Qin Gang told reporters earlier this month.

  Tyler Durden
  Thu, 03/16/2023 – 22:25

• CME CEO Terry Duffy Says Employees Too Scared To Return To Office Due To Chicago's Crime Surge
  CME CEO Terry Duffy Says Employees Too Scared To Return To Office Due To Chicago’s Crime Surge

  The incredible crime fighting skills of Lori Lightfoot have already driven Ken Griffin out of Chicago, as we noted last year. Now, it looks like CME Group Inc.’s Terry Duffy could be next. 

  Duffy had already been outspoken to Chicago’s mayor about fighting crime – and, according to Bloomberg, that was before his wife was carjacked.

  Duffy told the ICE House Podcast this week: “Three o’clock in the afternoon, my wife got carjacked right in the city of Chicago and it’s absolutely insane what’s going on here. Ninety percent of the carjackings in Chicago are done by juveniles. So the juveniles go in and they come right back out literally an hour later.”

  The CME head grew up on the Southwest side of Chicago, the report notes, and currently works from a skyscraper downtown. But he says that crime in the city is inciting fear amongst his employees, who no longer want to return to the workplace. 

  He said after challenging Lori Lightfoot on crime, she responded by saying the homicide rate was falling. “I said, ‘don’t go there. Please don’t go there.’ One is too many,” Duffy responded.

  

  Lightfoot did not make it to a runoff after placing third in the city’s recent election for mayor. That’s likely due to the fact that crime was up 41% last year and has been up 33% since 2019, Bloomberg reports. 

  “It was a tough time growing up in Chicago,” Duffy said, lamenting some optimism that the city could eventually get better and that the problem is wider spread than just Chicago. “So yes, we we’ve been on our back foot a few times… But I think we try to move forward and hopefully we can do it again.”

  Others aren’t as optimistic. Recall, last year we noted that Citadel’s Griffin said  “Chicago is like Afghanistan, on a good day, and that’s a problem.” He also said that he saw “25 bullet shots in the glass window of the retail space” in the building he lives in.

  “It just tells you, like, how deep crime runs in this city. There is nowhere, where you can feel safe today walking home at 9:30 at night and you worry about your kids coming to and from school.”

  “Chicago will continue to be important to the future of Citadel, as many of our colleagues have deep ties to Illinois,” Griffin wrote, before explaining that the ties will not be that deep. “Over the past year, however, many of our Chicago teams have asked to relocate to Miami, New York and our other offices around the world,” he concluded. 

  Tyler Durden
  Thu, 03/16/2023 – 22:05

• Jacob Chansley's Lawyers Confront DOJ's Claim It Didn't Suppress Jan. 6 Evidence
  Jacob Chansley’s Lawyers Confront DOJ’s Claim It Didn’t Suppress Jan. 6 Evidence

  Authored by Gary Bai via The Epoch Times (emphasis ours),

  The Department of Justice’s (DOJ) latest objection to allegations that it suppressed evidence in its prosecution of Jan. 6 defendant Jacob Chansley flies in the face of the Sixth Amendment, current and former attorneys of Chansley told The Epoch Times in separate interviews this week.

  “They are hiding. They affirmatively are electing not to disclose [exculpatory evidence],” Albert Watkins, Jacob Chansley’s former attorney that negotiated the navy veteran’s 41-month sentencing agreement in 2021, told The Epoch Times on Tuesday, referring to the DOJ.

  “They’re doing so in a fashion which, in my opinion, gives rise to an inescapable conclusion that the Department of Justice has done more damage to our democracy by how it has treated Jan. 6 defendants than anything that had occurred on January 6.”

  

  Watkins was reacting to the DOJ’s Sunday court filing on another Jan. 6 defendant’s case, in which the government confronted, for the first time in court, the newly surfaced surveillance tapes of the Jan. 6, 2021, Capitol breach aired by Fox News’s Tucker Carlson Tonight show.

  Among these tapes was a clip showing Chansley, unarmed, walking along with several Capitol Police officers who did not attempt to remove him from the Capitol building, which Carlson said showed that Chansley was less violent on Jan. 6 than described by the government.

  Despite the video records of the navy veteran’s behaviour, Chansley’s current and former lawyers argued that the government violated Chansley’s rights by suppressing this evidence during his trial, in response to the DOJ’s claims to the contrary on Sunday.

  The answer to this debate is important because it shines a light on the government’s prosecutorial conduct in handling Jan. 6 cases, many of which have ended with swift sentencing.

  Chansley is currently serving a 41-month sentence in federal prison after pleading guilty to an obstruction charge in September 2021.

  Government Shared All Evidence: DOJ

  In a filing on Sunday, the DOJ said it provided the tapes to Chansley’s attorney during the discovery phase of Chansley’s trial in 2021, therefore satisfying the requirement of producing exculpatory evidence, or evidence favoring the defendant, to the defense counsel.

  The filing was in response to a motion to dismiss filed by the attorneys of Dominic Pezzola, a Jan. 6 defendant currently on trial, which alleged that the tapes shown on Tucker Carlson show the government “withheld” evidence in prosecuting participants of the Jan. 6 Capitol breach.

  

  “The CCTV footage is core evidence in nearly every January 6 case, and it was produced en masse, labeled by camera number and by time, to all defense counsel in all cases,” the DOJ wrote in its filing.

  The department cited Brady v. Maryland, a 1963 case in which the Supreme Court held that prosecutors must make available to the defense counsel exculpatory evidence. As a part of that requirement, the DOJ cited Brady’s text establishing that a Brady violation requires the material in question to be “something that is being ‘suppress[ed] by the prosecution.’”

  “Pezzola’s Brady claim therefore fails at the threshold, because nothing has been suppressed,” the DOJ wrote, basing it on the claim that it had provided Watkins with the “necessary tools” to identify relevant CCTV evidence notwithstanding the voluminous discovery.

  “Accordingly, the volume of discovery does not excuse defense counsel from making reasonable efforts to ascertain whether an item has been produced, let alone before filing inaccurate and inflammatory allegations of discovery failures,” the DOJ wrote.

  DOJ Suppressed Evidence: Chansley’s Lawyers

  Chansley’s lawyers disagreed with the DOJ’s claims, saying that the bar for suppression is lower than what the government claims it to be.

  “Suppression … is not the nefarious burying of evidence,” Bill Shipley, Jacob Chansley’s current counsel, said in an interview with The Epoch Times on Monday. “It just means it wasn’t brought to light by the government. The government knew what was there and did not illuminate the fact that it was there.”

  Shipley says that the government may have violated Brady because they did not identify the tapes and their nature as potentially exculpatory evidence during Chansley’s trial. Making them available without making sure the defendant knows of the existence of the tapes may constitute suppression, according to Shipley.

  “Suppression simply means it went undiscovered by the defendant beyond a point at which it could be made use of,” Shipley, who was a federal prosecutor for 21 years, said. “If the government produced thousands of hours of video and said, ‘There’s a minute of evidence that’s favorable to Jacob Chansley—good luck,’ that production is not an effective Brady disclosure.”

  The tapes are relevant for reasons beyond proving Chansley’s innocence or guilt, Shipley told The Epoch Times, noting that they are important to answering the question of whether Chansley’s sentence was fair under due process considerations.

  “The question is: were Jacob Chansley’s rights to due process and effective assistance of counsel violated? Were the procedural requirements complied with such that the process and outcome of his case was a fair proceeding?” Shipley challenged.

  “They’re clearly the kinds of videos that, had Judge [Royce Lamberth] seen them at sentencing, he might have concluded that Mr. Chansey is not the personification of evil in the way the government has made him out to be,” the attorney added. Judge Royce Lamberth presided over Chansley’s trial.

  “That might have caused Judge Lambert to think that maybe 41 months was too much time to give him, taking into consideration all of his conduct, as opposed to just the precise conduct the government gave,” Shipley said.

  Read more here…

  Tyler Durden
  Thu, 03/16/2023 – 21:45

• DeSantis Charms GOP By Condemning 'Leaks' And 'Palace Intrigue'
  DeSantis Charms GOP By Condemning ‘Leaks’ And ‘Palace Intrigue’

  Authored by Philip Wegmann via RealClear Wire,

  On its face, there wasn’t anything unusual about the email that landed last week in the press office of Florida Gov. Ron DeSantis.

  “Background interview request from the Washington Post,” read the subject line that summarized the industry-standard process whereby information is shared with reporters under pre-negotiated terms, usually anonymity. When sanctioned by a politician or their team, it is called “going on background” to shape and broaden a story with additional facts and contexts but without direct attribution. When not sanctioned, well, then that is just called leaking.

  

  Either way, Jeremy Redfern wasn’t interested. The DeSantis spokesman wrote back one word: “No.”

  A screenshot of the exchange went viral with the consensus in more conservative corners of Twitter being that a liberal rag, albeit the beltway paper of record, had just been owned. The score in their minds? DeSantis: 1, WaPo: 0.

  The little episode does underscore a larger, still emerging theme of the expected DeSantis presidential campaign. It isn’t just that the team that didn’t leak in Florida wouldn’t leak in the White House. The implication is that DeSantis would not obsess over what is written about him in news outlets most of his constituents don’t read, because such an obsession is counterproductive to conservative goals. In this way, DeSantis may prove to be the anti-chaos candidate.

  DeSantis has hinted at all of this during a recent book tour, a closely watched exercise that seems to be a dress rehearsal for a White House run. “There’s no drama in our administration,” he said on stage in Iowa next to Gov. Kim Reynolds. “There’s no palace intrigue.” The juxtaposition with the frontrunner in the GOP primary, former President Donald Trump, was implicit and obvious.

  “We made very clear to the people working in the administration, you’re not going to be leaking,” DeSantis said, recalling how he told his staff early on that if they had “any other agenda” than “doing business of the people of Florida” then they might as well “pack your bags right now.”

  With a unified team onboard with that mission, DeSantis continued, “We roll out, and we execute, and we do things, and we get things done. And in the process, we beat the left day after day, week after week, month after month, year after year.”

  Republicans have made the media their foil for decades now. Newt Gingrich won over South Carolina voters during the 2012 Republican primary when the former House speaker slammed a CNN debate moderator over what he considered “despicable” questioning, arguing that the “destructive, vicious negative nature of much of the news media makes it harder to govern this country.” Gingrich would lose the nomination but leave behind a blueprint that Trump would embody. Conservatives loved how he hated the “fake news.” But few were aware of the strange symbiosis that enveloped his administration.

  Trump gave as good as he got during press conferences, but his team was set against itself at times, and often consumed by the media at the expense of the administration’s mission. His son-in-law, a senior advisor in the last White House, said as much. The war between Jared Kushner and Steven Bannon was infamous in the West Wing and well-documented in the papers. Albeit almost always “on background.”

  When Bannon was eventually fired, Kushner later wrote in his autobiography, another senior aide came to him joking that he had “a plan to split up Steve Bannon’s extensive workload. Hope [Hicks], you leak to Jonathan Swan at Axios. Jared, you call Mike Bender from the Wall Street Journal. I’ll call Jeremy Peters from the New York Times, and … we’re done.”

  Careers were catapulted and journalism prizes won on the ability to get the president’s inner circle to text back by deadline. Even when the headlines would be negative, Trump often called reporters directly. He still does. “I love being with her,” Trump said of Maggie Haberman during one of his multiple interviews with the star New York Times reporter. As president, he blasted her publicly as “a third-rate reporter.” After leaving the White House, he called her “my psychiatrist.”

  The Trump cabinet didn’t just jockey for position in the press. Internal divisions were so extreme that officials would gauge their standing with the president by recent headlines or Fox News hits. Former Secretary of State Mike Pompeo even made a joke of the dysfunction, promising that he would stay on in the administration “until he tweets me out of office.”

  Trump was a bellicose president, and his base adored him for it. Some of his closest advisors still worried that an obsession with settling scores left him off balance. For instance, during the job interview for attorney general, Bill Barr reported that he told Trump that “the problem with immediately counterpunching … is that you are letting your opponents pick the time and place of the fight.” Trump, Barr later wrote in his memoir, didn’t seem to take the advice. But DeSantis has.

  The governor can be as pugnacious as the former president, and YouTube is full of clips from DeSantis fans and from the press chronicling his blow-for-blow battles with reporters. He has catapulted himself into the national conversation, in large part, through those fights with the media that he has labeled “the liberal elite’s Praetorian Guard.”

  But the same reporters who enjoyed unprecedented access to Trump, possibly the most accessible president in modern history, have had a hard time getting ahold of DeSantis outside of his regular news conferences, leaving the New York Times to ask “Can Ron DeSantis Avoid Meeting the Press?”

  “The old way of looking at it is: ‘I have to do every media hit that I possibly can, from as broad a political spectrum as I can, to reach as many people as possible,’” Nick Iarossi, a longtime DeSantis supporter and a lobbyist in Tallahassee, told the Times. “The new way of looking at it is: ‘I really don’t need to do that anymore. I can control how I want to message to voters through the mediums I choose.’”

  DeSantis has followed an aggressive but more calculated blueprint, becoming a conservative media darling through frequent appearances on Fox News with Tucker Carlson and the Daily Wire with Ben Shapiro. It has been enough to bring him alongside Trump in the RealClearPolitics Average even though he has not yet declared. Trump remains the clear front runner with a 14.4-point advantage.

  Mick Mulvaney doesn’t see much unique in the current DeSantis approach. He knows both men well. Mulvaney was a founding member of the House Freedom Caucus with DeSantis before leaving Congress to join the Trump administration, first as director of the Office of Management and Budget and later as his second-to-last chief of staff. If the boast about avoiding “palace intrigue” and the admonishment not to leak become campaign promises, Mulvaney doesn’t see a clear competitive advantage. “I expect all of the challengers,” he told RCP, “to use a variation on the ‘Trump policies without the Trump baggage’ message.”

  Disdain for the press has indeed become a feature of the right. According to Gallup, just 14% of Republicans say they have “a great deal or fair amount of confidence” in the media. Gripes among conservatives have turned from occasional complaints to the outright belief that a biased press is an enemy to their way of life.

  Candidates see that, and they will say they don’t trust elite media, Tucker Carlson told the 2022 Family Leadership Summit in Des Moines, Iowa, last year. But figuring out who is play fighting with the press versus those who will shun them altogether, the Fox News host added, was critical to earning their vote. “You need to be really wary of candidates who care what the New York Times thinks. You really, really do,” he said. “And if you say that to Republican voters, they are like, ‘The New York Times is Communist! I don’t even read it!’ Really? Because your leaders do. And they really care. They really, really care.”

  DeSantis was happy to blast the press in Iowa last week. Like many Republicans, he has shown a willingness to punch back. Unlike some others though, he has a demonstrated ability to ignore their calls. “Don’t think that they’re coming to you in good faith,” he said in one broadside against the press. “They’re coming to you to be able to advance their agenda, and if you’re somebody that’s standing for our values, like Kim and me stand for, you are an impediment to their agenda.”

  “So don’t play into it. Just speak the truth. Do your thing,” he continued before counseling that conservatives should “not give them the satisfaction that they are some type of neutral gatekeepers because they are not.”

  Tyler Durden
  Thu, 03/16/2023 – 21:05

• White House Responds To Poland Sending Jets To Ukraine
  White House Responds To Poland Sending Jets To Ukraine

  The Biden administration has responded to Poland’s Thursday announcement that it will be transferring about a dozen or more MiG-29 jets to Ukraine. As we reported earlier, President Andrzej Duda’s move was no doubt calculated in hopes of tilting the momentum of the political debate in Washington in favor of supplying planes.

  National Security Council Strategic Communications Coordinator John Kirby said Thursday afternoon in response to Warsaw’s decision, “It doesn’t change our calculus, with respect to F-16s.”

  

  He added in the press briefing: “It’s not on the table right now. And an announcement by another nation to provide fighter aircraft does not affect, and does not change, our own sovereign decision-making.”

  President Biden had just a month ago said that F-16s were off the table “for now” as pressure began growing within Congress to approve the jets.

  However, new fighters could take years to send, while older jets would likely take around a year or more – given also military officials have indicated at least that amount of time to train Ukrainian pilots on the American-made systems.

  Thursday’s announcement makes Poland the first NATO country to fulfil Zelensky’s repeat requests for fighter jets since the war began. Given Ukraine already operates the Soviet-made planes, it’s expected they’ll be in use right away against Russia.

  President Duda specified that an initial four MiG-29s will be delivered “within the next few days” and that the rest would come after they go through servicing and maintenance. 

  The Associated Press notes that the total to be transferred could be more than a dozen: “The Polish word he used to describe their number can mean between 11 and 19,” according to the report.

  Tyler Durden
  Thu, 03/16/2023 – 20:45

• Biden DOJ Stands Accused Of Hiding This Evidence Of Biden-China Corruption: Sperry
  Biden DOJ Stands Accused Of Hiding This Evidence Of Biden-China Corruption: Sperry

  Authored by Paul Sperry via RealClear Wire,

  The Justice Department is not disclosing to the public or Congress links between President Biden’s son Hunter and brother James and a corrupt Chinese government agent who doled out millions of dollars in bribes. It has scrubbed the connections from court documents and is suggesting it doesn’t have evidence clearly in its possession.

  
   
  In addition, the department appears to be trying to silence another disreputable partner from coming forward to tell what he knows about the Bidens’ Chinese connection.

  In 2016, FBI counterespionage agents began collecting voluminous evidence against Chinese national Chi Ping “Patrick” Ho, who was suspected of paying off officials and their families around the world in exchange for oil rights for a China-based energy conglomerate he represented which has ties to Chinese military intelligence.  

  From emails, text messages, phone calls, bank records, and other evidence gathered from wiretaps and searches of Ho’s offices in D.C. and New York, investigators discovered that Hunter Biden and his uncle James were targets of Ho and CEFC China Energy, which had struck up a business partnership with the Bidens. The deal, sealed in 2017, netted the Bidens almost $6 million for unspecified work, at least $1 million of which was paid directly by Ho.

  DOJ prosecutors were able to indict and convict Ho in 2018 under the Foreign Corrupt Practices Act for his role in a bribery scheme aimed at former United Nations and African officials. Though the evidence also potentially implicated the Bidens, who failed to register as foreign agents of CEFC, prosecutors did not pursue charges against them.  

  Republican congressional leaders investigating Biden influence-peddling say the DOJ is actively covering up the illicit connection. Here’s how:  

  Failing to Turn Over Surveillance Evidence

  Despite Senate Judiciary Committee requests, DOJ refuses to turn over Foreign Intelligence Surveillance Act materials the FBI used to spy on Ho in 2016 and 2017. DOJ claims the FISA information may not even exist.

  “Unfortunately, we are not in a position to confirm the existence of the information that is sought if it exists in the department’s possession,” then-Deputy Assistant Attorney General Joseph Gaeta told GOP Sen. Charles Grassley of Judiciary in a letter.

  But the FISA applications and material do exist — according to a sworn acknowledgement by former U.S. Attorney Geoffrey Berman, who prosecuted the Ho case.

  In Feb. 8, 2018, he notified Ho’s defense team and the court of his “intent to use Foreign Intelligence Surveillance Act information” in the case, including “information derived from electronic surveillance pursuant to FISA.” 

  A former Democratic congressional staffer, Gaeta recently left DOJ to take a top job at Democracy Forward, a Democratic Party shop formed in 2016 to bring legal challenges to Donald Trump. It is chaired by former Hillary Clinton campaign lawyer Marc Elias, who commissioned the discredited Steele dossier that fabricated ties between Trump and Russia.

  If Hunter Biden and his uncle were mentioned in the FISA wiretap materials, it’s a closely guarded secret.

  The affidavits to “electronically monitor” Ho and his contacts remain classified and under seal, along with the FISA material collected from the wiretaps – including “foreign intelligence,” according to court documents. Ho’s defense team had access to the FISAs as part of discovery, but when they tried to introduce information from them as evidence, the court ruled it “classified” and “inadmissible.” 

  Redacting Hunter Biden’s Name 

  During Ho’s 2018 trial in New York, federal prosecutors strained to keep secret his partnership with the Biden family.

  In at least one court exhibit, Hunter Biden’s name was redacted from an email that agents obtained from Ho. One of the prosecutors in the case asked the judge to keep jurors in the dark about Ho’s powerful American connection, because he said DOJ did not want to “introduce a political dimension to this case,” records show. 

  Emails the feds seized from Ho during their investigation show one of his CEFC advisers tried to arrange a private Washington dinner in December 2015 with their boss, CEFC Chairman Ye Jianming, and someone whose name was redacted by DOJ prosecutors. (Although the name wasn’t made public during the trial, in an email to a mutual business associate found on Hunter Biden’s abandoned laptop, however, Ho’s adviser had invited “Hunter” to attend the dinner.)

  Further explaining his reason for censoring the name, DOJ prosecutor Daniel Richenthal told the judge “the name of that individual could introduce a political dimension to this case that we don’t think is worth dealing with.” Ho’s lawyers argued the redaction was unnecessary.

  In May 2018, federal prosecutors reached out to Hunter from the Southern District of New York, which handled the Ho case, information found on Hunter’s abandoned laptop reveals. It’s not clear what they discussed. Richenthal is a Democrat who has given money to the DNC.

  DOJ also redacted sections of transcripts of audio recordings captured from Ho’s phone conversations from the New York prison where he was incarcerated.

  More than a dozen filings and hearing transcripts from the Ho case remain under seal, locked in a court “vault,” according to the docket. Ho’s connection to the Bidens went unmentioned in DOJ press releases about the case.

  Suppressing a Tipster’s Leads 

  The Justice Department allegedly has suppressed leads provided investigators years ago on the Bidens related to CEFC by a former CEFC consultant close to both Ho and Hunter Biden.

  DOJ is seeking the extradition of the tipster Gal Luft, a former senior adviser to CEFC China Energy who was arrested last month in Cyprus for charges tied to the illegal export of arms to China.

  However, Luft maintains he’s “never been an arms dealer” and that the real reason the Biden administration wants to bring him into custody is to silence him from cooperation with congressional investigations into Hunter’s business dealings with CEFC and other Chinese entities.

  Luft said he met with FBI and DOJ investigators in 2019 and gave them incriminating information on Hunter, but they did not pursue the leads he gave them. His lawyers recently told DOJ he plans to submit a letter to Congress detailing statements he made in that interview.

  “DOJ is trying to bury me to protect Joe, Jim & Hunter Biden,” Luft claimed in a Feb. 18 tweet. He threatened to “name names” of department officials whom he says are trying to cover for the Bidens.

  It was also in 2019 that the FBI was given a copy of Hunter Biden’s laptop hard drive by a Delaware computer repairman several months after the younger Biden abandoned the device there. The laptop contains numerous documents featuring Ho, CEFC Energy Fund and its U.S.-based subsidiary, the China Energy Fund Committee, which Ho ran from D.C. FBI whistleblowers have told Congress that their supervisors in Washington suppressed the laptop evidence and even claimed, falsely, it was Russian “disinformation.” 

  Withholding Other Non-Laptop Evidence

  Congressional investigators say it’s clear from the court proceedings in the Ho case that the FBI and DOJ are sitting on more evidence related to the Bidens’ illicit ties to the Chinese government than what is contained on Hunter Biden’s laptop hard drive.

  “DOJ likely possesses additional evidence related to CEFC and Hunter Biden given the seizure of Patrick Ho’s iPad and email accounts in November 2017,” House Oversight Committee Chairman James Comer said last month.

  FBI agents also confiscated a Huawei cell phone from Ho when they arrested him at JFK International Airport that month, DOJ records show. 

  Suppressing ‘Kevin’ Dong Evidence:

  Meanwhile, in the Senate, Grassley believes DOJ may have also electronically monitored Gongwen “Kevin” Dong, another CEFC agent tied to the Bidens. Grassley has demanded DOJ also turn over any FISA materials related to Dong. However, DOJ has stonewalled this request too.

  Dong is the CEFC principal who signed a joint venture contract with Hunter Biden and who initiated most of the wire payments to him via pass-through entities in 2017 and 2018. In effect, Dong was the Chinese bagman for the Bidens and the millions in cash they raked in from China.

  Throughout the legal proceedings, prosecutors made it plain they believed Ho was a dangerous Chinese agent, but they never breathed a word about his $1 million in payments to Biden’s son and brother. 

  Hunter Biden first engaged with CEFC in 2015, while his father was vice president. (See main article.)

  Former assistant FBI director Chris Swecker points out that the CEFC-Biden deal had the hallmarks of a Chinese intelligence operation.

  He notes that Hunter Biden was well aware of Ye’s and Ho’s links to Chinese intelligence. In an audio recording found on his laptop, Hunter described Ho as “the fucking spy chief of China.” Hunter’s ex-business associate Tony Bobulinski says their Chinese partners – whom he described as “intelligence” assets – weren’t looking to make a “healthy” return on investment in the CEFC deal, but rather viewed it “as a political or influence investment.” Bobulinski says he has told the FBI in interviews that Joe Biden himself was cut in on the CEFC deal.

  Swecker said the FBI and DOJ no doubt suspected the Chinese were targeting the Bidens as part of an influence operation and intelligence-gathering operation. By asking the FISA spy court to authorize surveilling Ho, he said, counterintelligence agents believed the foreign national was working covertly for the Chinese government. Such warrants can only be granted for targets suspected of being an agent of a foreign power or a terrorist group, which means FBI agents were searching for evidence of espionage.

  “Hunter’s and Jim’s dealing with CEFC had aroused counterintelligence concerns inside the FBI, “ said Ben Schreckinger, author of “The Bidens: Inside the First Family’s Fifty-Year Rise to Power.” “The FBI had Hunter under surveillance.” 

  Neither Biden was accused of wrongdoing in Ho’s criminal bribery and money laundering scheme involving former United Nations and African officials. Hunter and his attorney did not respond to messages seeking comment. Attempts to reach James Biden were unsuccessful.

  *  *  *

  Paul Sperry is an investigative reporter for RealClearInvestigations. He is also a longtime media fellow at Stanford’s Hoover Institution. Sperry was previously the Washington bureau chief for Investor’s Business Daily, and his work has appeared in the New York Post, Wall Street Journal, New York Times, and Houston Chronicle, among other major publications.

  Tyler Durden
  Thu, 03/16/2023 – 20:25

• Target Shutters Downtown Philly Location Citing "Declining Performance"
  Target Shutters Downtown Philly Location Citing “Declining Performance”

  Not unlike many other corporations with retail locations in cities nationwide, Target is calling it quits on Philadelphia. They follow in the footsteps of Wawa, who we noted last year had enough of Philadelphia’s crime and also picked up and left shop at several locations in Center City.

  Target, located just blocks from one Wawa that recently closed, is taking the same action, according to the Philadelphia Business Journal. Its store at 12th and Chestnut streets in Center City will be closing after 7 years of operation. 

  The 19,000 sq. foot store is going to be closing “due to several years of declining performance”, the report says. The company plans on attempting to relocate its 45 part and full time employees at the store. 

  Kayla Castañeda, a spokesperson for Target, commented: “The decision to close one of our stores isn’t something we take lightly. It’s an action we take only after multiple years of working to improve performance.”

  

  Target is also going to be closing three other stores, one in its hometown of Minneapolis and two in the Washington, D.C., area, the report continued. The company is also looking to open a massive 22,000 sq. foot store near 37th and Chestnut – basically in the middle of U Penn’s campus – which will help it replace its presence lost in Center City. 

  The Center City store had just opened in July 2016 as part of an apartment building, and its across the street from a brand new $762 million Jefferson Health facility that is nearing the end of construction. On the south side of the closing Target store, additional commercial and residential buildings are being erected.

  But the influx of new buildings onto the block wasn’t enough for the company to want to keep its store open. In addition to Wawa stores that have closed, a Marshalls located at 10th and Market street – just blocks away from Target – also closed earlier this year.

  Tyler Durden
  Thu, 03/16/2023 – 20:05

• 'An All-Out Assault On The Second Amendment': Gun Rights Groups Respond To Biden’s New Executive Order
  ‘An All-Out Assault On The Second Amendment’: Gun Rights Groups Respond To Biden’s New Executive Order

  Authored by Michael Clements via The Epoch Times (emphasis ours),

  

  Second Amendment advocates responded quickly to President Joe Biden’s newest executive order designed to advance his gun control agenda and his repeated call for a ban on so-called “assault weapons” and high-capacity magazines.

  “Crimes are committed by criminals. Until President Biden and his allies decide to go after violent criminals, violence will continue to spiral out of control as it has. The focus of our laws and efforts should be on the criminal element and not on law-abiding Americans,” read a statement from the National Rifle Association.

  Biden’s order will require background checks on more than just retail firearms sales, promote the adoption and use of “Red Flag Laws”, make gun dealer inspection reports public, call for stricter enforcement of the Bipartisan Safer Communities Act, and request the Federal Trade Commission issue a report on the marketing of firearms to children by gun makers.

  “The executive order ramps up our efforts to hold the gun industry accountable. It’s the only outfit you can’t sue these days,” Biden said while in California on Tuesday.

  ‘Most Anti-Gun President in US History’

  Dudley Brown, president of the National Association for Gun Rights, issued a fiery statement calling on Congress to stand against an unconstitutional attempt at gun registration.

  

  “This is an all-out assault on the Second Amendment, and we’re looking into every legislative and legal option to fight back against the most anti-gun president in U.S. history. What part of ‘shall not be infringed’ does Biden not understand?” Brown’s statement reads.

  Like the other organizations that responded, Brown said the order wouldn’t reduce crime. Instead, he wrote, it will make law-abiding citizens criminals if they don’t comply with the government’s voluminous regulations.

  “The reality is this executive order will do nothing to stop criminals from buying and selling firearms illegally, but it will entrap otherwise law-abiding Americans and put them on the bad side of the ATF. The unconstitutional NICS database should be abolished, not expanded,” Brown wrote.

  Read more here…

  Tyler Durden
  Thu, 03/16/2023 – 19:45

• Helicopter Crashed In Heist At Sacramento Executive Airport
  Helicopter Crashed In Heist At Sacramento Executive Airport

  In the early hours of Wednesday morning, an individual attempted to start a fleet of helicopters at Sacramento Executive Airport. The person could only start one and crashed while trying to fly away. 

  The Federal Bureau of Investigation, Federal Aviation Administration, National Transportation Safety Board, and the Sacramento Police Department are all investigating the incident that occurred around 0500 PST. 

  Local news KRCA reported that a person managed to start and almost fly away with a Bell 429 heavy-lift helicopter. The person, perhaps inexperienced, crashed the helicopter. 

  It’s possible that there was another motive:

  “If someone wanted to take an aircraft for a joyride, someone who wanted to take an aircraft to do some other criminal activity or damage to other property, terrorism would be at the other end of the scope,” Special Agent in Charge Sean Reagan said. 

  KRCA tweeted images from the airport of the wreckage. 

  HAPPENING NOW:
  Chopper down at Sac Executive Airport. @SacPolice says someone tried to steal the helicopter but crashed it. Chopper culprit on the loose as FBI, FAA investigate. @kcranews pic.twitter.com/028ipbR294

  — Michelle Bandur KCRA (@MBandurKCRA) March 15, 2023

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

  A thief crashed a chopper at Sacramento Executive Airport after breaking into multiple helicopters overnight, police said. Here’s a look at the wreckage.

  More >> https://t.co/rdB8K0yWDh pic.twitter.com/mPMGAnUKyJ

  — kcranews (@kcranews) March 15, 2023

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

  Capitol Helicopters, the owner of the Bell 429, released this statement about the incident:

  “Sometime early this morning several helicopters operated by our company were vandalized by an individual unknown to us, and one aircraft was severely damaged. All our employees are safe, and we do not believe that anyone was injured in today’s events. This incident is currently under investigation by several state and federal authorities. We are hopeful that the people responsible are located quickly. We have no further information to report at this time. We appreciate the support from all the agencies and individuals involved.”

  “This investigation is in its early stages,” Sacramento Police told The Sacramento Bee, “and this information is preliminary as detectives work to learn exactly what occurred.”

   

  Tyler Durden
  Thu, 03/16/2023 – 19:25

• The Tyrants Are Passing State Laws To Push CBDCs
  The Tyrants Are Passing State Laws To Push CBDCs

  Authored by Tom Renz via Substack,

  Let me open this by apologizing. This article is going to get into the weeds a bit and it is less than exciting. That said, stick with me until the end and I’ll give you a solution you can fight for.

  For those that are living under a rock (or that have more interesting things to do than follow monetary policy) CBDC stands for Central Bank Digital Currency and it, along with gene therapy jabs, stands as the greatest threat to freedom on the planet. Digital currency is completely trackable and completely controllable.

  

  This means that the government and any corporation with the proper access will be able to know exactly how you spend every digital penny of your money. It also means that the government (or possibly global governments or global corporations) would have the ability to control what you spend your money on. Spend too much on gas they take some of your money for emitting too many greenhouse gases. Want to buy a gun… forget it.

  If you think this sounds terrible you are not alone, nearly no one wants this. That means it is quite literally politically impossible to legislate CBDC into existence at the moment. Despite that, the control available to the many tyrants at the WEF, CCP, etc. is too tempting to resist so they are doing everything possible to leverage their control over the crooks like Biden and the many ignorant elected officials in our government to make it a reality. So, the question is, how are they doing it?

  If COVID taught us anything it was that an emergency, real or faked, facilitates a lot of things that would never happen otherwise. The tyrants know this and are in the process of creating financial emergencies that will allow them to argue that there is no alternative but to implement CBDCs. The Biden Administration is implementing policy after policy that devalues the American dollar by limiting Americas ability to mine its own resources or produce its own goods while printing endless money. This will (or more likely is) facilitate an economic collapse. Meanwhile, WEF/CCP partner groups like Black Rock and Vanguard are leveraging their positions as major stakeholders in small and midsized banks to force the banks to accept terrible ESG and other risky investments that will, when combined with the inflation/devalued dollar and scarce resources, result in their collapse. This is an obvious thing to anyone that truly understands the inner-workings of banking (I ran a credit union for a number of years, was a compliance expert, and was involved in a number of national-level groups/projects).

  Along with the effort to collapse the dollar and our banking system, the tyrants are also pushing legislation that can allow CBDCs to exist legally and without competition. This is being done in a VERY sneaky way because of the massive political opposition to anything CBDC-related. At this point, the major focus is on passing state-level legislation – particularly in a number of key RED states. Bills are being pushed that appear innocuous but are written to create a check-mate situation when CBDCs come into play. That way these red states won’t be able to oppose it.

  When it comes to who is behind the push to sneak CBDC legislation on the state level we need look no further than the Uniform Law Commission (the “ULC”… stinking lawyers). 

  Here’s a link you can follow to see where this crew is pushing state law.

  The response from many lawmakers when people are questioning these bills is that it is conspiracy theory to suggest these UCC bills will facilitate CBDC. 

  Here is a link to one of the authors of the bills telling you it is about CBDC (fast forward to about 46 or 47 minutes in); you should save a copy of this video quickly – I’m guessing it will disappear soon. 

  You can find additional information here from the South Dakota Freedom Caucus (they did great work shining light on the bill Kristi Noem just vetoed – saving South Dakota).

  The ULC is promoting bills that would change the UCC (Uniform Commercial Code) to ensure that states have state law that is prepared to deal with CBDC.

  These same bills would also ban any current forms of crypto like Bitcoin as a competitor for CBDC. These UCC changes reflect the state law changes to meet the goals laid out by the Fed (here’s an overview) and are fully laid out in this fun document.

  Bills promoting these changes are pushing through hard red state such as Missouri (HB1165), Oklahoma (HB2776), Texas (SB2075), and Tennessee (SB479/HB640). They are also in a ton of other states and need to be stopped in all of them.

  Let’s take an example from HB1165 in Missouri. I had the pleasure of reading this 103 page bill and can tell you it was physically painful to go through (which is why none of the elected officials will read it – they will just vote based on what the lobbyists or party leadership says). Understand that this is intentional. These CBDC bills are frequently being handed to Republican legislators who are told by leadership to file the bills. Because the bills are so complex and lengthy, most elected officials will not actually read them.

  Within HB1165 (not to be confused with HB1169 which requires informed consent and which I support – despite RINO opposition), there are a quite a few changes to Missouri law. These important changes were quite expertly crafted to facilitate CBDC without actually talking about it so Republicans could be fooled into filing the bills even if they did read it. A great example is this new definition of “money” found on page 5:

  “‘Money’ means a medium of exchange that is currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries. The term does not include an electronic record that is a medium of exchange recorded and transferable in a system that existed and operated for the medium of exchange before the medium of exchange was authorized or adopted by the government.”

  This language means that existing crypto currencies would not be eligible to be considered “money” by banks… a great way to make sure there will be no private competition for CBDC.

  All this leads to the question, so what do we do?

  The easiest solution is to get a large number of grassroots to promote an amendment that bans CBDC in your state. If you think this is a conspiracy theory or your elected officials tell you it is simply ask him/her to amend their bill to include the following language and see what kind of response they get from the lobbyists or you get from the official:

  1. Nothing in this bill shall be construed to legalize, authorize, or recognize any sort of digital currency as money in Missouri.

  2. All banking and financial institutions in Missouri shall be required to recognize at least one physical currency as “money”. This physical currency must be treated as the primary form of money in the state and valued to ensure it is the preferred form of trade within the state. No bank or financial institution shall penalize anyone for the use of physical money in Missouri nor shall they provide any incentives for the use of any digital currency. Physical and digital money must be taxed at equal rates.

  3. Missouri recognizes the importance of the Fourth Amendment of the Bill of Rights and prohibits any currency from being recognized as “money” that can be tracked without knowledge of that tracking and without being able to identify who is responsible for such tracking by the owner of the money. Digital currency may be recognized as money in the state of Missouri only if it can be verified as impossible to track without a warrant by a minimum of three an independent experts.

     a.     Independent Expert means, for purposes of this section, an individual with the requisite expertise to evaluate the proposed money to meet the requirements of this section. Courts should construe this clause strongly in favor of ensuring high levels of expertise and independence.

  4. No currency shall be recognized or accepted as money in Missouri if that currency could possibly be controlled in any way remotely. For purposes of this section, controlled includes who or how this currency can be shared with or spent in any way. This prohibition on the control of currency would preserve the Fourth Amendment and should be construed broadly.

  5. If any other statutes conflict with anything in this section this section controls. If any part of this section is determined to be unconstitutional or conflicting with any other controlling law the rest of this section shall continue to be in force.

  While stronger language could be used (and this should be modified for any given state), none of this language would cause a problem unless the real reason for the bill is to promote CBDCs so no one pushing the Republicans to sponsor these bills should object. If they do, that should be all you need to know.

  The war on freedom is expanding and we have to stop CBDC, call your state legislature and say hell no to these banking laws that they are pushing. I can’t stress enough how critical this issue is, CBDC means game over! Between that and the COVID vaccines, all they have to do is whip up a new pandemic (they already have them created), and we lose everything.

  *  *  *

  Now is the time to purchase gold, please go to BH-PM.com and get yourself set up with my good friend Andrew Sorchini (tell him Tom Renz sent you and you support our freedom fight). We’ve been warning about this for a long time, and the war is here folks, protect yourself and be prepared – https://bh-pm.com/

  Tyler Durden
  Thu, 03/16/2023 – 19:05

• Pornhub Acquired By Canadian Private Equity Firm 'Ethical Capital Partners'
  Pornhub Acquired By Canadian Private Equity Firm ‘Ethical Capital Partners’

  The parent company of controversial website Pornhub – which has allowed all sorts of child sexual abuse on the platform despite repeated efforts to remove such content – has been sold to Canadian private equity firm, Ethical Capital Partners, which was formed last year and says it’s focused on technology businesses that “have legal and regulatory complexity and that put a value on transparency and accountability.”

  

  The purchase is ECP’s first transaction. The company is led by “cannabis entrepreneur Rocco Meliambro and criminal lawyer Fady Mansour, who is listed as managing partner. Derek Ogden, a retired chief superintendent of the Royal Canadian Mounted Police, is also a partner at the firm,” according to Bloomberg.

  The move comes amid a lawsuit against the parent company, MindGeek, over sexually explicit videos of minors found on its ‘tube’ sites, the Financial Times reports.

  Luxembourg-registered MindGeek has towered over the adult industry since the advent of video streaming. Its most recently published figures show revenues in 2018 reached $460mn while profit margins have at times neared 50 per cent, according to people familiar with the matter.

  The identity of MindGeek’s former majority owner Bernd Bergmair — an ex-Goldman Sachs banker who also uses the name Bernard Bergemar — was first revealed by an FT investigation.

  Pornhub’s multiple scandals has led to the departure of its top management team, and restricted access to payment platforms Visa and Mastercard – which almost led to the site’s collapse in late 2020 following investigations that identified illegal content on the platform.

  According to ECP co-founder and attorney, Solomon Friedman, the lawsuits and criticism of MindGeek ‘stemmed from a misunderstanding’ of how the company is now safeguarding its content – which he says changed after the previous owners departed.

  “I want to engage regularly with stakeholders, including the media,” said Friedman, adding that the new owners ‘wanted to exercise transparency.’

  While the purchase price, and where the funds came from, have not been disclosed, the current remaining (anonymous) executives will continue running the company.

  “At this point we are not identifying the current executives, as there is an unfortunate stigma [attached to the industry],” said Friedman.

  According to MindGeek, Mastercard has reinstated access to its subscription sites, however the company’s advertising arm, TrafficJunky, remains cut off following a court ruling that found Visa could be held liable for illegal content.

  Tyler Durden
  Thu, 03/16/2023 – 18:45

• Trump’s Competitors Seek To Set Themselves Apart Without Scorning MAGA
  Trump’s Competitors Seek To Set Themselves Apart Without Scorning MAGA

  Authored by Nathan Worcester via The Epoch Times (emphasis ours),

  As more Republicans challenge Donald Trump in the race for the party’s 2024 presidential nomination, the former president’s dramatic impact on the GOP is becoming clearer.

  

  Everyone from Nikki Haley to Vivek Ramaswamy has sought to link themselves to “America First,” as they court Trump’s Make America Great Again (MAGA) movement.

  Those Republican hopefuls face a daunting task. They have to distinguish themselves from Trump and woo many of his fans, all while mounting campaigns that can compete in the general election.

  How are Trump’s competitors trying to set themselves apart from the former president—and how can they do so without alienating his fiercely loyal base?

  While it’s early, some patterns are already being established.

  

  DeSantis’s Delicate Dance

  While Florida Gov. Ron DeSantis hasn’t yet committed to a primary bid, he’s widely seen as Trump’s most formidable 2024 competitor.

  The Florida governor has so far avoided responding to digs directed at him by Trump, although his online supporters, some anonymous, have gone to bat for him.

  Paul Ingrassia, a Trump administration veteran and Cornell Law school graduate and lawyer, told The Epoch Times that DeSantis has relied on “digital acolytes” to fight for him because he hasn’t yet entered the race.

  “He wants to have these other guys do his dirty work for him while remaining above the fray,” Ingrassia, himself a prominent online Trump supporter, stated in a March 13 interview.

  “People in the Trump orbit several months ago decided their best strategy would be to charge hard at former Trump supporters who’ve publicly aligned with DeSantis, in an effort to intimidate us into silence,” David Reaboi, a political consultant and well-known DeSantis advocate, said in a March 14 interview with The Epoch Times.

  “This is crucial to their effort because they’re terrified of more people peeling off and abandoning Trump for a far more sane option—one who’s far more likely to succeed on every issue of policy.”

  Both men seemed to agree that DeSantis is being pitched as a more competent version of Trump. In addition, DeSantis’s sometimes critical stance on the COVID-19 response could distinguish him from the former president.

  Florida’s surgeon general has drawn attention to adverse events linked to the COVID-19 vaccines that were rolled out as a result of Trump’s “Operation Warp Speed.” That elicited a critical reaction from U.S. health authorities.

  Ingrassia points out that a large majority of the population has taken at least one COVID-19 vaccine dose. He believes DeSantis’s messaging on the issue may not play well with the public at large, even if it resonates with Republican primary voters.

  DeSantis, he added, “was just as much of a rule follower during the early months of COVID as anyone.”

  “As more time goes on, the vaccine will be an increasing political liability—as will Trump’s outsourcing of COVID to the expert class,” Reaboi said.

  “Picking a fight on COVID policy with Ron DeSantis, of all people, is inadvisable.”

  

  Ramaswamy’s ‘America First 2.0’

  Ramaswamy, a venture capitalist, has explicitly pitched his campaign as the next development in Trump-inspired politics.

  He calls his platform “America First 2.0.” His priorities include ending affirmative action, splitting from China, and rejecting the push for central bank digital currencies.

  “I respect a lot of what President Trump did,”  Ramaswamy told The Epoch Times in a Feb. 23 interview. “He acknowledged problems in this country on both sides of the aisle that no one else had acknowledged before him. The question is where we go from here.”

  Reaboi said he doesn’t have any stance on Ramaswamy.

  “I understand that people do this for name recognition or to fleece some money off of gullible donors, but just about any other use of their money, focus, and time would be better spent in policy activism or building institutions to nurture and support a new cadre of policy professionals,” he said.

  Ingrassia believes Ramaswamy would fall short against Trump even if his message reaches “the more educated faction of the GOP.”

  “I think he’s in over his head,” Ingrassia said.

  

  Pompeo Criticizes ‘Larger-Than-Life Personalities’

  Another figure, Mike Pompeo, also is setting himself apart from Trump.

  The former secretary of state and CIA director, who has said he’s considering a run, can make a strong case for himself as a longtime critic of the Chinese Communist Party (CCP). Democrats and Republicans are starting to unite against the CCP, vindicating concerns of earlier China watchers.

  Yet, in a March 3 speech at the Conservative Political Action Conference (CPAC), Pompeo said America’s “greatest threats are here,” not abroad.

  He made what seemed like anti-Trump comments, saying conservatives “should not look for larger-than-life personalities.”

  Read more here…

  Tyler Durden
  Thu, 03/16/2023 – 18:25

• As Bank Crisis Looms, Biden's Aggressive Focus On Firearms Is Suspicious
  As Bank Crisis Looms, Biden’s Aggressive Focus On Firearms Is Suspicious

  Joe Biden has always been hostile to constitutional gun rights, but in the past week his administration has gone into an obsessive fervor, calling for more restrictions on sales, banning high capacity magazines and banning “assault weapons.”  Is there a reason for his sudden focus on taking effective firearms from Americans despite the multitude of more important issues facing the nation today? 

  Much of the firearms related discussion in the corporate media has revolved around Biden’s recent executive order calling for individuals in the business of selling guns to be federally licensed and to check the backgrounds of buyers. Under the order, the Attorney General Merrick Garland will “use his discretion” to ensure gun sellers “willfully violating the law” and those unaware of background requirements become compliant.

  The order makes little sense considering there are already multiple laws in place that require firearms dealers to commit to background checks before a buyer can purchase any weapon.  Of course, many people on the political left are illiterate when it comes to firearms related restrictions, and some actually do naively think that a customer can easily walk into a gun store, grab a pistol or rifle off a shelf, and walk out.  

  Is Biden’s executive action just a ploy for his ignorant political base as he pretends to implement anti-gun measures while really doing nothing?  Or, is something else at play?

  The order does not seem to be an effort to prevent private firearms sales or gun show sales, which are legal in some states, though there is talk of “universal background checks” in the future.  Executive orders have no constitutional standing in any case, and they certainly have no bearing on state laws, but is Biden seeking to change that?

  The unilateral action also outlines steps to promote Red Flag laws, which are an attempt by gun grabbers to institute backdoor confiscation.  Red Flag laws, if enforced widely, would allow various state and federal agencies to target individuals designated as “potentially dangerous” or mentally unstable and take their firearms without due process.  It is a guilty-until-proven-innocent policy based on hearsay rather than legal evidence.

   

  However, even Biden’s Red Flag efforts are more about lip service than tangible results that will make anti-gun proponents happy.  The real threat may be in an underlying attempt to normalize gun related executive orders as a means to sidestep checks and balances entirely, but that would require a national emergency as a rationale.

  Enter the ever escalating economic crisis…

  Is it merely a coincidence that Biden’s amplification of anti-gun propaganda has been timed almost exactly with the rising threat of a systemic credit collapse within the banking sector?  It’s not just SVB and Signature Bank that signal a problem today, it’s also Credit Suisse – A massive bank with over $700 billion in asset exposure.  It would appear that a credit crisis is swiftly developing, and as we all know, establishment elites “never let a good crisis go to waste.”   

  The majority of the Biden Admin’s rhetoric on social media has not been about background checks, but the outright banning of semi-automatic, high capacity rifles (which are involved in less than 3% of all firearms related murders).  By extension, Biden has consistently mentioned the need to circumvent Congress to enforce more gun control, and he seems to be test-piloting the notion of executive orders to do it.    

  It’s time for Congress to ban assault weapons and high-capacity magazines.

  I led the fight to ban them in 1994, and we can do it again. pic.twitter.com/dBDEYuU8Rp

  — President Biden (@POTUS) March 15, 2023

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

  It is no secret that establishment politicians often ignore handgun related crime in favor of far less used “military-style” rifles, but why?  One might suggest that it is the proliferation of these firearms in the hands of the citizenry that has prevented numerous attempts to undermine other constitutional protections.  Many believe that Biden’s abandonment of perpetual pandemic lockdowns and vaccine passports was directly related to red state resistance and a large number of armed Americans refusing to comply.    

  Medical authoritarianism in the name of covid failed partly because of the 2nd Amendment.  With the economic crisis comes another possible window to centralize power and degrade the Bill of Rights further, but not if the populace has the capacity to rebel.

  Is the establishment realizing they will have to take our guns before they can accomplish any other objectives?  And, are they preparing to use a bank crash they know is coming as a rationale or smokescreen for confiscation?  With every economic plunge comes an inevitable spike in crime, not to mention public fear.  The-powers-that-be might view this as a favorable development in their quest for American disarmament.   

  Tyler Durden
  Thu, 03/16/2023 – 18:05

• Americans Value Truck-Parking Facilities, But Not In Their Backyards
  Americans Value Truck-Parking Facilities, But Not In Their Backyards

  By Mark Solomon of FreightWaves,

  Americans value commercial truck drivers and the service they offer. However, they don’t want drivers parking their rigs anywhere near their homes.

  

  That was a key finding in a 2023 survey of truck parking issues published Tuesday by CloudTrucks, an IT-based provider that supports the commercial truck driving sector. About 56% of the 1,000 American adults surveyed were unfamiliar with the issue. About 21% didn’t realize that many drivers end up sleeping in their vehicles, reflecting a lack of knowledge of the inconvenience and safety risks they encounter on a daily basis without sufficient dedicated parking capacity.

  Once these aspects were explained to them, 86% recognized truck parking as an important issue, and 95% supported the building of overnight parking facilities.

  However, 80% said they would only support the construction of facilities if they were at least 3 miles from their homes.

  About two-thirds of respondents called for more government funding to address the parking shortage, including the building of more truck stops and rest areas. About 43% said they would support relaxed zoning and land use regulations that could pave the way for more parking. Approximately 40% supported giving tax incentives to truck stop operator chains and other private companies to create more parking.

  The survey indicated that Americans understand the difficulty of a drivers’ jobs and the value they deliver. The vast majority of respondents thought drivers were overworked. About 58% said that drivers were underpaid, and about 50% said that commercial drivers are safer drivers than the public at-large.

  Despite the “’not-in-my-backyard’ feedback, the survey’s findings gave CloudTrucks executives optimism that the public at least understands the problem. Tobenna Arodiogbu, co-founder and CEO of CloudTrucks, said it’s important to ensure the “resources provided to truck drivers are proportional to how much we value their service to our economy.”

  The Truck Parking Safety Improvement Act was incorporated into the SHIP IT Act introduced in the House on Jan. 24. The act provides $755 million over four years (fiscal years 2023-26) in grants dedicated specifically for truck parking creation and expansion. 

  Entities eligible include states, metropolitan planning organizations, local governments, which are allowed to partner with private entities. In addition to building new parking facilities, the act also opens up inspection and weigh stations and park-and-ride locations to truck parking expansion.

  Tyler Durden
  Thu, 03/16/2023 – 17:45

Digest powered by RSS Digest

• Germany's Conservative AfD Overtakes Green Party For First Time In 4 Years
  Germany’s Conservative AfD Overtakes Green Party For First Time In 4 Years

  Authored by John Cody via Remix News,

  As the Green Party’s fortunes sink, the fortunes of the Alternative for Germany (AfD) party rise, with the AfD now polling ahead of the Greens for the first time since 2018 in two separate surveys.

  

  In a survey from YouGov, the AfD jumped to 17 percent, while the Greens were one point behind at 16 percent.

  ++ AfD vor Grünen! ++

  Noch besser als #AfD wählen: AfD-Mitglied werden! pic.twitter.com/ZAZVR6O855

  — AfD NRW (@AlternativeNRW) March 14, 2023

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

  In a separate Insa survey commissioned by Bild newspaper, AfD is polling at 16 percent and the Green Party at 15.5 percent.

  Polling from multiple surveys has shown that the Greens have been losing support for months while the AfD gains.

  In July last year, Insa showed that the Greens were ahead by 11 points, with the Greens at 23 percent and AfD at only 12 percent. The war in Ukraine, growing inflation, an energy crisis, and out-of-control immigration have all sunk the Green Party’s fortunes.

  The last time AfD was ahead of the Greens was in October 2018, when AfD was at 18 percent and the Greens were at 17 percent.

  Sonntagsfrage zur Bundestagswahl • INSA/BILD: CDU/CSU 28,5 % | SPD 21,5 % | AfD 16 % | GRÜNE 15,5 % | FDP 7,5 % | DIE LINKE 4 % | Sonstige 7 %
  ➤ Übersicht: https://t.co/MO5RyMFSF2
  ➤ Verlauf: https://t.co/mJRVJUXdHv pic.twitter.com/F3GxWsGvQp

  — Wahlrecht.de (@Wahlrecht_de) March 13, 2023

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

  The latest poll from Insa shows that the Left Party is also suffering following Sahra Wagenknecht’s decision to leave. The party would only score 4 percent, which would leave it ineligible to sit in parliament. The CDU also dropped one point since the last poll, while the SPD rose by 1.5 points.

  Over the last year, a number of rival political parties have stepped up calls to ban the AfD as the party grows in popularity. They have claimed that banning one of the country’s major opposition political parties is about “protecting democracy.”

  The AfD party has called for an end to sanctions on Russia, arguing they are damaging Germany more than Russia. Germany has long relied on cheap Russian energy to fuel its manufacturing base. AfD has also benefitted from its calls to secure the German border, as the country saw nearly 1.4 million migrants arrive last year, causing a serious crisis for the country.

  Tyler Durden
  Thu, 03/16/2023 – 02:00

• Sergey Glazyev: "The Road To Financial Multipolarity Will Be Long & Rocky"
  Sergey Glazyev: “The Road To Financial Multipolarity Will Be Long & Rocky”

  Authored by Pepe Escobar via The Cradle,

  In an exclusive interview with The Cradle, Russia’s top macroeconomics strategist criticizes Moscow’s slow pace of financial reform and warns there will be no new global currency without Beijing…

  

  The headquarters of the Eurasian Economic Commission (EEC) in Moscow, linked to the Eurasia Economic Union (EAEU) is arguably one of the most crucial nodes of the emerging multipolar world.

  That’s where I was received by Minister of Integration and Macroeconomics Sergey Glazyev – who was previously interviewed in detail by The Cradle –  for an exclusive, expanded discussion on the geoeconomics of multipolarity.

  Glazyev was joined by his top economic advisor Dmitry Mityaev, who is also the secretary of the Eurasian Economic Commission’s (EEC) science and technology council. The EAEU and EEC are formed by Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia. The group is currently engaged in establishing a series of free trade agreements with nations from West Asia to Southeast Asia.

  Our conversation was unscripted, free flowing and straight to the point. I had initially proposed some talking points revolving around discussions between the EAEU and China on designing a new gold/commodities-based currency bypassing the US dollar, and how it would be realistically possible to have the EAEU, the Shanghai Cooperation Organization (SCO), and BRICS+ to adopt the same currency design.

  Glazyev and Mityaev were completely frank and also asked questions on the Global South. As much as extremely sensitive political issues should remain off the record, what they said about the road towards multipolarity was quite sobering – in fact realpolitik-based.

  Glazyev stressed that the EEC cannot ask for member states to adopt specific economic policies. There are indeed serious proposals on the design of a new currency, but the ultimate decision rests on the leaders of the five permanent members. That implies political will – ultimately to be engineered by Russia, which is responsible for over 80 percent of EAEU trade.

  It’s quite possible that a renewed impetus may come after the visit of Chinese President Xi Jinping to Moscow on March 21, where he will hold in-depth strategic talks with Russian President Vladimir Putin.

  On the war in Ukraine, Glazyev stressed that as it stands, China is profiting handsomely, as its economy has not been sanctioned – at least not yet – by US/EU and Beijing is buying Russian oil and gas at heavily discounted prices. The funds Russians are losing in terms of selling energy to the EU will have to be compensated by the proposed Power of Siberia II pipeline that will run from Russia to China, via Mongolia – but that will take a few more years.

  Glazyev sketched the possibility of a similar debate on a new currency taking place inside the Shanghai Cooperation Organization (SCO) – yet the obstacles could be even stronger. Once again, that will depend on political will, in this case by Russia-China: a joint decision by Xi and Putin, with crucial input by India – and as Iran becomes a full member, also energy-rich Tehran.

  What is realistic so far is increasing bilateral trade in their own currencies, as in the Russia-China, Russia-India, Iran-India, Russia-Iran, and China-Iran cases.

  Essentially, Glazyev does not see heavily sanctioned Russia taking a leadership role in setting up a new global financial system. That may fall to China’s Global Security Initiative. The division into two blocs seems inevitable: the dollarized zone – with its inbuilt eurozone – in contrast with the Global South majority with a new financial system and new trading currency for international trade. Domestically, individual nations will keep doing business in their own national currencies.

  The road to ‘de-offshorization’

  Glazyev has always been a fierce critic of the Russian Central Bank, and he did voice his misgivings – echoing his book The Last World War. He never ceases to stress that the American rationale is to damage the Russian economy on every front, while the motives of the Russian Central Bank usually raise “serious questions.”

  He said that quite a few detailed proposals to reorient the Central Bank have been sent to Putin, but there has been no follow-up. He also evoked the extremely delicate theme of corruption involving key oligarchs who, for inscrutable reasons, have not been sidelined by the Kremlin.

  Glazyev had warned for years that it was imperative for Moscow to sell out foreign exchange assets placed in the US, Britain, France, Germany, and others which later ended up unleashing sanctions against Russia.

  These assets should have been replaced by investments in gold and other precious metals; stocks of highly liquid commodity values; in securities of the EAEU, SCO, and BRICS member states; and in the capital of international organizations with Russian participation, such as the Eurasian Development Bank, the CIS Interstate Bank, and the BRICS Development Bank.

  It seems that the Kremlin at least is now fully aware of the importance of expanding infrastructure for supporting Russian exports. That includes creating international exchange trading marketplaces for trade in Russian primary goods within Russian jurisdiction, and in rubles; and creating international sales and service networks for Russian goods with high added value.

  For Russia, says Glazyev, the key challenge ahead in monetary policy is to modernize credit. And to prevent negative impact by foreign financial sources, the key is domestic monetization –  “including expansion of long and medium-term refinancing of commercial banks against obligations of manufacturing enterprises and authorized government bodies. It is also advisable to consistently replace foreign borrowings of state- controlled banks and corporations with domestic sources of credit.”

  So the imperative way to Russia, now in effect, is “de-offshorization.” Which essentially means getting rid of a “super-critical dependence of its reproduction contours on Anglo-Saxon legal and financial institutions,” something that entails “systematic losses of the Russian financial system merely on the difference in profitability between the borrowed and the placed capital.”

  What Glazyev repeatedly emphasized is that as long as there’s no reform of the Russian Central Bank, any serious discussion about a new Global South-adopted currency faces insurmountable odds. The Chinese, heavily interlinked with the global financial system, may start having new ideas now that Xi Jinping, on the record, and unprecedentedly, has defined the US-provoked Hybrid War against China for what it is, and has named names: it’s an American operation.

  What seems to be crystal clear is that the path toward a new financial system designed essentially by Russia-China, and adopted by vast swathes of the Global South, will remain long, rocky, and extremely challenging. The discussions inside the EAEU and with the Chinese may extrapolate to the SCO and even towards BRICS+. But all will depend on political will and political capital jointly deployed by the Russia-China strategic partnership.

  That’s why Xi’s visit to Moscow next week is so crucial. The leadership of both Moscow and Beijing, in sync, now seems to be fully aware of the two-front Hybrid War deployed by Washington.

  This means their peer competitor strategic partnership – the ultimate anathema for the US-led Empire – can only prosper if they jointly deploy a complete set of measures: from instances of soft power to deepening trade and commerce in their own currencies, a basket of currencies, and a new reserve currency that is not hostage to the Bretton Woods system legitimizing western finance capitalism.

  Tyler Durden
  Wed, 03/15/2023 – 23:40

• Healthcare & College Costs Dominate Americans' Soaring Cost Of Living Over The Past Two Decades
  Healthcare & College Costs Dominate Americans’ Soaring Cost Of Living Over The Past Two Decades

  The Consumer Price Index (CPI) provides a steady indication of how inflation is affecting the economy. This big picture number is useful for policymakers and professionals in the financial sector, but most people experience inflation at the cash register or checkout screen.

  As Visual Capitalist’s Nick Routley details below, since the start of the 21st century, U.S. consumers have seen a divergence of price movements across various categories.

  Nowhere is this better illustrated than on this chart concept thought up by AEI’s Mark J. Perry.

  It’s sometimes referred to as the “chart of the century” because it provides such a clear and impactful jump-off point to discuss a number of economic forces.

  

  The punchline is that many consumer goods – particularly those that were easily outsourced – saw price drops, while key “non-tradable” categories saw massive increases.

  We’ll look at both situations in more detail below.

  Race to the Top: Inflation in Healthcare and Education

  Since the beginning of this century, two types of essential categories have been marching steadily upward in price: healthcare and education.

  America has a well documented “medical inflation” issue. There are a number of reasons why costs in the healthcare sector keep rising, including rising labor costs, an aging population, better technology, and medical tourism. The pricing of pharmaceutical products and hospital services are also a major contributor to increases. As Barry Ritholtz has diplomatically stated, “market forces don’t work very well in this industry”.

  Rising medical costs have serious consequences for the U.S. population. Recent data indicates that half of Americans now carry medical debt, with the majority owing $1,000 or more.

  Also near the top of the chart are education-related categories. In the ’60s and ’70s, tuition roughly tracked with inflation, but that began to change in the mid-1980s. Since then, tuition costs have marched ever upward. Since 2000, tuition prices have increased by 178% and college textbooks have jumped 162%.

  As usual, low income students are disproportionally impacted by rising tuition. Pell Grants now cover a much smaller portion of tuition than they used to, and the majority of states have cut funding to higher education in recent years.

  Globalization: A Tale of Televisions and Toys

  Even though essentials like education and heathcare have rocketed up, it’s not all bad news. Consumers have seen the price of some goods and services drop dramatically.

  Flat screen televisions used to be a big ticket item. At the turn of the century, a flat screen TV would cost around 17% of the median income of the time ($42,148). In the early aughts though, prices began to fall quickly. Today, a new TV will cost less than 1% of the U.S. median income ($54,132).

  Similarly, cellular services and software have gotten cheaper over the past two decades as well. Toys are another prime example. Not only are most toys manufactured overseas, the value proposition has changed as children have new digital options to entertain themselves with.

  Over a long-term perspective, items like clothing and household furnishings have remained relatively flat in price, even after the most recent bout of inflation.

  Tyler Durden
  Wed, 03/15/2023 – 23:20

• Gun Owners Of America Aghast At Potential ATF Expansion
  Gun Owners Of America Aghast At Potential ATF Expansion

  Authored by Michael Clements via The Epoch Times (emphasis ours),

  A national gun rights organization is decrying the expansion of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in President Joe Biden’s $6.8 trillion budget proposal for 2024.

  

  “GOA is extremely concerned at the massive surge in ATF funding in recent years—doubling the size of the agency since the end of the Obama administration,” Aidan Johnston, Gun Owners of America’s director of federal affairs, wrote in an email to The Epoch Times.

  Biden’s budget proposal contains $1.9 billion for the ATF. This is a 13.6 percent increase over 2022 and half a billion dollars more than the agency’s fiscal 2020 budget.

  If passed as written, Biden’s budget would expand the ATF by 35.7 percent—an overall growth of more than 50 percent since the Obama administration.

  

  According to Biden’s plan, the $1.9 billion would finance the expansion of multi-jurisdictional gun trafficking strike forces, increase firearms industry regulation, and implement the Bipartisan Safer Communities Act.

  The proposal also calls for $51 million for the FBI to complete implementing the enhanced background check system that is part of the Act.

  In a statement, GOA said the budget items are nothing more than incremental gun control that will make no one safer while denying law-abiding gun owners their constitutional rights.

  The organization is especially alarmed at funding for “crisis intervention programs,” so-called “Red Flag Laws.”

  GOA and other gun rights groups claim that Red Flag laws set the stage for authorities to confiscate firearms without due process. They say that language in the Act requiring due process is misleading.

  Read more here…

  Tyler Durden
  Wed, 03/15/2023 – 23:00

• MS Quants: 8 Reasons Why Stocks Are Going Lower
  MS Quants: 8 Reasons Why Stocks Are Going Lower

  This morning we published a note looking at “How This (Asset) Cycle Finally Ends” in which we explained why the imminent tightening in credit conditions – beyond the near-record tightness already observed in the most recent SLOOS…

  

  …. resulting from small banks retrenching and conserving cash into reserve and curtailing new lending, would finally end the asset cycle and lead the US economy into a recession, but not before hammering stocks and further collapsing the velocity of money.

  

  A few hours later, Morgan Stanley’s QDS team of derivatives experts, reiterated the same view, writing that while authorities quickly cut off the “left tail” by providing coverage for uninsured deposits and instituting a new liquidity facility, squeezing shorts in the process, “equities should come under renewed pressure from a tightening of credit conditions and reduced velocity of money, plus the increase in volatility and shock to correlation that stresses positions.”

  They then shared a few thoughts on the recent market moves:

  1. Cross market volatility suggests equities should be lower. Biggest move in the two year yield since 1987, biggest move in 2s30s since 9/11… plenty of cross market vol but equities aren’t reacting. Over the last year the SPX P/E multiple has had a -65% correlation to rates vol, which at current levels suggests P/E should be 15x – 2 turns lower or an SPX of ~3400. The last time rate vol was this high relative to equity vol (VIX) was the Taper Tantrum. Yes the Fed is further along in their hiking cycle – and rate vol will normalize after the shocks of the last few days. But QDS would also argue that  economic/earnings growth and financial risks are higher now than they were two weeks ago.

  

  2. This wasn’t just a vol shock, it was a correlation shock. The change in focus from inflation and the Fed’s reaction function to concern about growth/recession and financial stability has flipped stock-bond correlation on its head, and  correlation shocks are particularly hard to deal with as traders need to run from one side of the boat to the other.

  

  3. Change in trend + change in correlation + change in vol is bad for many investors, but CTAs in particular given current positioning. On QDS’s model, CTAs suffered the 7th worst two-day return since 2005 on Friday and Monday, as  they were long stocks but short bonds. Wrong-way volatility typically leads to derisking – today’s reversal will be dampen the impact, but on net QDS is forecasting equity for sale bonds to buy over the coming days.

  

  4. Equity volatility is off sharply today, but not out of the woods as the technicals that contributed to its squeeze are still there. QDS estimates that dealers have roughly $60mm of vol to buy in a down 5% move in SPX and +5 point increase in VIX futures – the 90th %ile versus the last year. That is still only the 65th %ile since 2019 – volatility is not going to go crazy – but investors should not look at a VIX level of ~23 as an ‘all clear’.

  

  5. Within equities high dispersion = both risk and opportunities. Dispersion rose sharply over the last 2 days given the big moves in Financials. Those wrong way likely have to derisk on a broader basis, while opportunities also arise – companies with weak balance sheets (MSXXCCC from the MS Thematic Investment Strategy team) should now come under pressure.

  

  6. Selling pressure has come from both retail and institutions in the last week. The MS Futures Content team highlighted that Friday and Monday combined for the largest two-day increase in new shorts added in S&P 500 futures since March 2020 (rolls-adjusted), with an estimated $49bn of new shorts initiated. And on top of that, MarkIt data suggests 1 zScore short additions in ETFs and 2 zScore short additions in US single-names over the last week. On top of that, retail has been a small net seller of equities in the last week (<$2bn net sold), a -1.1 zScore event versus the last two years, based on QDS’s model based on public data. Some of these shorts are likely coming off today, and more could come off in the near-term – but those are short-term supports, not longer-term ones.

  

  7. Conflicting policy goals. Up until a week ago, the Fed was balancing between growth and inflation. Now they also have to balance financial stability risks – and while they have plenty of tools to do that, at the end of the day these goals present a conflict. Inflation and growth argue for continued rate hikes and QT, while stress argues to slow or pause. Whatever is most acute usually wins… which may be good for stocks in the near-term, but longer-term the less tightening done now likely puts the economy and the Fed between a rock and a hard place.

  8. Reduced velocity of money. The potential for a higher cost of bank capital and more expensive funding after recent events has the potential to slow the velocity of money and compound monetary liquidity / QT risks. Equities have now caught back down to the level of reserves in the system after a record gap opened up in late January, and recent TGA spend down (tax refunds) and money coming out of RRP as the system demands more reserves has helped as well. In the near-term that could continue as RRP is drained. But even if monetary liquidity doesn’t contract going forward, if the velocity of money falls then credit extension will be limited and the economy and the market should suffer.

  

  The above doesn’t mean the floor will fall out of equities – policymakers have limited the financial contagion channel. But the real economy channel is still a risk. QE and fiscal stimulus put excess savings in consumers pockets and funded many unprofitable businesses, which has delayed the economic reckoning. But increased cross market volatility, reduced velocity of money, and higher cost of funds should erode those buffers more quickly than before, and it seems hard to frame a bull case for stocks after the last week. Particularly after short covering and hedge monetization on today’s rally, QDS thinks the view that equities need to reprice lower as earnings deteriorate plays out from here.

  Tyler Durden
  Wed, 03/15/2023 – 22:40

• Chris Hedges: Ukraine's Death By Proxy
  Chris Hedges: Ukraine’s Death By Proxy

  Authored by Chris Hedges via Scheerpost.com,

  Proxy wars devour the countries they purport to defend. There will come a time when the Ukrainians will become expendable to the U.S. They will disappear, as many others before them, from U.S. national discourse and popular consciousness…

  

  There are many ways for a state to project power and weaken adversaries, but proxy wars are one of the most cynical. Proxy wars devour the countries they purport to defend. They entice nations or insurgents to fight for geopolitical goals that are ultimately not in their interest.

  The war in Ukraine has little to do with Ukrainian freedom and a lot to do with degrading the Russian military and weakening Russian President Vladimir Putin’s grip on power. And when Ukraine looks headed for defeat, or the war reaches a stalemate, Ukraine will be sacrificed like many other states, in what one of the founding members of the C.I.A., Miles Copeland Jr., referred to as the “Game of Nations” and “the amorality of power politics.”

  I covered proxy wars in my two decades as a foreign correspondent, including in Central America where the U.S. armed the military regimes in El Salvador and Guatemala and Contra insurgents attempting to overthrow the Sandinista government in Nicaragua. I reported on the insurgency in the Punjab, a proxy war fomented by Pakistan.

  I covered the Kurds in northern Iraq, backed and then betrayed more than once by Iran and Washington. During my time in the Middle East, Iraq provided weapons and support to the Mujahedeen-e-Khalq (MEK) to destabilize Iran. Belgrade, when I was in the former Yugoslavia, thought by arming Bosnian and Croatian Serbs, it could absorb Bosnia and parts of Croatia into a greater Serbia. 

  Proxy wars are notoriously hard to control, especially when the aspirations of those doing the fighting and those sending the weapons diverge. They also have a bad habit of luring sponsors of proxy wars, as happened to the U.S. in Vietnam and Israel in Lebanon, directly into the conflict.

  Proxy armies are given weaponry with little accountability, significant amounts of which end up on the black market or in the hands of warlords or terrorists. CBS News reported last year that around 30 percent of the weapons sent to Ukraine make it to the front lines, a report it chose to partially retract under heavy pressure from Kiev and Washington. The widespread diversion of donated military and medical equipment to the black market in Ukraine was also documented by U.S. journalist Lindsey Snell. Weapons in war zones are lucrative commodities. There were always large quantities for sale in the wars I covered.

  Warlords, gangsters and thugs — Ukraine has long been considered one of the most corrupt countries in Europe — are transformed by sponsor states into heroic freedom fighters. Support for those fighting these proxy wars is a celebration of our supposed national virtue, especially seductive after two decades of military fiascos in the Middle East. Joe Biden, with dismal poll numbers, intends to run for a second term as a “wartime” president who stands with Ukraine, to which the U.S. has already committed $113 billion in military, economic and humanitarian assistance.

  When Russia invaded Ukraine “[t]he whole world faced a test for the ages,” Biden said after a lightning visit to Kiev. “Europe was being tested. America was being tested. NATO was being tested. All democracies were being tested.” 

  Similar Sentiments

  I heard similar sentiments expressed to justify other proxy wars.

  “They are our brothers, these freedom fighters, and we owe them our help,” Ronald Reagan said of the Contras, who pillaged, raped and slaughtered their way through Nicaragua. “They are the moral equal of our Founding Fathers and the brave men and women of the French Resistance,” Reagan added. “We cannot turn away from them, for the struggle here is not right versus left, it is right versus wrong.” 

  

  A group of Contras rest after a firefight, Jan. 1, 1987. (Tiomono, CC BY-SA 3.0, Wikimedia Commons)

  “I want to hear him say we’re going to arm the Free Syrian Army,” John McCain said of President Donald Trump. “We’re going to dedicate ourselves to the removal of Bashar al-Assad. We’re going to have the Russians pay a price for their engagement. All players here are going to have to pay a penalty and the United States of America is going to be on the side of the people who fight for freedom.”

  Those feted as heroes of resistance, like President Volodymyr Zelensky or President Hamid Karzai in Afghanistan, are often problematic, especially as their egos and bank accounts inflate.  The flood of effusive encomiums directed towards proxies by their sponsors in public rarely matches what they say of them in private.

  At the Dayton peace talks, where the Serbian President Slobodan Milosevic sold out the leaders of the Bosnian Serbs and the Bosnian Croats, he said of his proxies: “[they] are not my friends. They are not my colleagues…They are shit.”

  

  Dec. 14, 1995: U.S. President Bill Clinton, right, talking with Serbian President Slobodan Milosevic in Paris with onlookers Ambassador Richard Holbrooke, Secretary of State Warren Christopher, General Wesley Clark.  (C.I.A., Public domain, Wikimedia Commons)

  “Dark money sloshed all around,” The Washington Post wrote after obtaining an internal report produced by the Office of the Special Inspector General for Afghanistan Reconstruction.

  “Afghanistan’s largest bank liquefied into a cesspool of fraud. Travelers lugged suitcases loaded with $1 million, or more, on flights leaving Kabul. Mansions known as ‘poppy palaces’ rose from the rubble to house opium kingpins. President Hamid Karzai won reelection after cronies stuffed thousands of ballot boxes. He later admitted the C.I.A. had delivered bags of cash to his office for years, calling it ‘nothing unusual.’”

  “In public, as President Barack Obama escalated the war and Congress approved billions of additional dollars in support, the commander in chief and lawmakers promised to crack down on corruption and hold crooked Afghans accountable,” the paper reported. “In reality, U.S. officials backed off, looked away and let the thievery become more entrenched than ever, according to a trove of confidential government interviews obtained by The Washington Post.”

  Those lionized as the bulwark against barbarism when the arms are flowing to them, are forgotten once the conflicts end, as in Afghanistan and Iraq. The former proxy fighters must flee the country or suffer the vendettas of those they fought, as happened to the abandoned Hmong tribesmen in Laos and the South Vietnamese.

  The former sponsors, once lavish in military aid, ignore desperate pleas for economic and humanitarian assistance, as those displaced by war go hungry and die from lack of medical care. Afghanistan, for the second time around, is the poster child for this imperial callousness.

  

  U.S. soldiers with Afghans boarding a C-17 Globemaster III at Hamid Karzai International Airport on Aug. 21 after the Taliban captured Kabul. (U.S. Air Force, Brennen Lege)

  The collapse of civil society spawns sectarian violence and extremism, much of it inimical to the interests of those who fomented the proxy wars. Israel’s proxy militias in Lebanon, along with its military intervention in 1978 and 1982, were designed to dislodge the Palestine Liberation Organization (PLO) from the country. This objective was achieved. But the removal of the PLO from Lebanon gave rise to Hezbollah, a far more militant and effective adversary, along with Syrian domination of Lebanon.

  In September 1982, over three days, the Lebanese Kataeb Party, more commonly known as the Phalanges — backed by the Israeli military — massacred between 2,000 and 3,500 Palestinian refugees and Lebanese civilians in the refugee camps of Sabra and Shatila. It led to international condemnation and political unrest inside Israel. Critics called the protracted conflict “Lebanam,” conflating the words Vietnam and Lebanon. The Israeli film Waltz with Bashir documents the depravity and wanton killing of thousands of civilians by Israel and its proxies during the war in Lebanon.

  Proxy wars, as Chalmers Johnson pointed out, engender unintended blowback. The backing of the mujahedeen in Afghanistan fighting the Soviets, which included arming groups such as those led by Osama bin Laden, gave rise to the Taliban and al-Qaeda. It also spread reactionary jihadism throughout the Muslim world, increased terrorist attacks against western targets which culminated in the attacks of 9/11 and fueled two decades of U.S.-led military fiascos in Afghanistan, Iraq, Syria, Somalia, Libya and Yemen.

  

  Jan. 1, 1987: Mujahideen in Kunar, Afghanistan. (erwinlux, Flickr, CC BY-SA 3.0, Wikimedia Commons)

  Should Russia prevail in Ukraine, should Putin not be removed from power, the U.S. will have not only cemented into place a potent alliance between Russia and China, but ensured an antagonism with Russia that will come back to haunt us. The flood of billions of dollars of weapons into Ukraine, the use of U.S. intelligence to kill Russian generals and sink the battleship Moskva, the blowing up of the Nord Stream pipelines and the more than 2,500 U.S. sanctions targeting Russia, will not be forgotten by Moscow.  

  “In a sense, blowback is simply another way of saying that a nation reaps what it sows,” Johnson writes, “Although people usually know what they have sown, our national experience of blowback is seldom imagined in such terms because so much of what the managers of the American empire have sown has been kept secret.”

  

  Taliban fighters patrolling Kabul in a Humvee on Aug. 17, 2021. (Voice of America, Wikimedia Commons)

  Those supported in proxy wars, including the Ukrainians, often have little chance of victory. Sophisticated weapons such as the M1 Abrams tanks are largely useless if those operating them have not spent months and years being trained. Prior to the Israeli invasion of Lebanon in June 1982, the Soviet bloc provided Palestinian fighters with heavy weapons, including tanks, anti-aircraft missiles and artillery. The lack of training made those weapons ineffective against Israeli air power, artillery and mechanized units. 

  The U.S. knows time is running out for Ukraine. It knows that high-tech weapons will not be mastered in time to blunt a sustained Russian offensive. Defense Secretary Lloyd Austin warned in January that Ukraine has “a window of opportunity here, between now and the spring.”

  “That’s not a long time,” he added.

  

  U.S. Secretary of Defense Lloyd Austin taking questions at a press conference with Ukrainian Minister of Defense Andriy Taran, Kiev, Ukraine, Oct. 19, 2021. (DoD, Chad J. McNeeley)

  Victory, however, is not the point. The point is maximum destruction. Even if Ukraine is forced in defeat to negotiate with Russia and concede territory for peace, as well as accept status as a neutral nation, Washington will have achieved its primary goal of weakening Russia’s military capacity and isolating Putin from Europe.  

  Those who mount proxy wars are blinded by wishful illusions. There was little support for the Contras in Nicaragua or the MEK in Iran. The arming of so-called “moderate” rebels in Syria saw weapons flow into the hands of reactionary jihadists. 

  The conclusion of proxy wars usually sees the nation or group fighting on behalf of the sponsor state betrayed. In 1972, the Nixon administration provided millions of dollars in weapons and ammunition to Kurdish rebels in northern Iraq to weaken the Iraqi government, which at the time was seen as too close to the Soviet Union. No one, least of all the U.S. and Iran, which delivered the weapons to Kurdish fighters, wanted the Kurds to create a state of their own. Iraq and Iran signed the 1975 Algiers Agreement in which the two countries settled disputes along their common border. The agreement also ended military support for the Kurds.

  The Iraqi military soon launched a ruthless campaign of ethnic cleansing in northern Iraq. Thousands of Kurds, including women and children, were “disappeared” or killed. Kurdish villages were dynamited into rubble. The desperate plight of the Kurds was ignored, for, as Henry Kissinger said at the time, “covert action should not be confused with missionary work.” 

  The Islamic government in Tehran resumed military aid to the Kurds during the war between Iran and Iraq from 1980 to 1988. On March 16, 1988, Iraqi President Saddam Hussein dropped mustard gas and the nerve agents sarin, tabun, and VX on the Kurdish town of Halabja. Some 5,000 people died within minutes and up to 10,000 were injured. The Reagan administration, which supported Iraq, minimized the war crimes committed against its former Kurdish allies. 

  President Richard Nixon’s rapprochement towards China, in another example, included terminating covert assistance to Tibetan rebels. 

  

  U.S. President Richard Nixon and Chinese Premier Zhou Enlai, Feb. 25, 1972. (White House/Wikimedia Commons)

  Betrayal is the closing act in nearly all proxy wars.

  The arming of Ukraine is not missionary work. It has nothing to do with liberty or freedom. It is about weakening Russia. Take Russia out of the equation and there would be little tangible support for Ukraine.

  There are other occupied peoples, including the Palestinians, who have suffered as brutally and far longer than Ukranians. But NATO is not arming Palestinians to fight against their Israeli occupiers or holding them up as heroic freedom fighters. U.S. love of freedom does not extend to Palestinians or the people of Yemen currently being bombed with British and American weapons, or the Kurds, Yazidis and Arabs resisting Turkey, a longtime NATO member, in its occupation and drone war throughout the north and east of Syria.

  U.S. love of freedom only extends to people who serve its “national interest.”

  There will come a time when the Ukrainians, like the Kurds, will become expendable. They will disappear, as many others before them have, from our national discourse and our consciousness. They will nurse for generations their betrayal and suffering. The American empire will move on to use others, perhaps the “heroic” people of Taiwan, to further its futile quest for global hegemony.

  China is the big prize for our Dr. Strangeloves. They will pile up even more corpses and flirt with nuclear war to curtail China’s growing economic and military power. This is an old and predictable game. It leaves in its wake nations in ruins and millions of people dead and displaced. It fuels the hubris and self-delusion of the mandarins in Washington who refuse to accept the emergence of a multipolar world. If left unchecked, this “game of nations” may get us all killed.

  *  *  *

  Chris Hedges is a Pulitzer Prize–winning journalist who was a foreign correspondent for 15 years for The New York Times, where he served as the Middle East bureau chief and Balkan bureau chief for the paper. He previously worked overseas for The Dallas Morning News, The Christian Science Monitor and NPR.  He is the host of show “The Chris Hedges Report.”

  Author’s Note to Readers: There is now no way left for me to continue to write a weekly column for ScheerPost and produce my weekly television show without your help. The walls are closing in, with startling rapidity, on independent journalism, with the elites, including the Democratic Party elites, clamoring for more and more censorship. Bob Scheer, who runs ScheerPost on a shoestring budget, and I will not waiver in our commitment to independent and honest journalism, and we will never put ScheerPost behind a paywall, charge a subscription for it, sell your data or accept advertising. Please, if you can, sign up at chrishedges.substack.com so I can continue to post my Monday column on ScheerPost and produce my weekly television show, “The Chris Hedges Report.”

  Tyler Durden
  Wed, 03/15/2023 – 22:20

• Gavin Newsom Kept SVB Ties Secret While Lobbying For Bailout
  Gavin Newsom Kept SVB Ties Secret While Lobbying For Bailout

  Multimillionaire California Governor Gavin Newsom failed to disclose his ties to Silicon Valley Bank while lobbying the White House and the Treasury Department over a pending bailout, The Intercept reported on Tuesday.

  

  The White House “acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system,” Newsom said in a statement. What Newsom didn’t mention is that it also protected his own companies if they held over $250,000 in deposits.

  CADE, Odette, and PlumpJack, three wineries owned by Newsom, are listed as clients of SVB on the bank’s website. Newsom also maintained personal accounts at SVB for years, according to a longtime former employee of Newsom’s who handled his finances, and who requested anonymity to avoid professional reprisal.

  Newsom also failed to mention his wife’s professional ties to the bank. In 2021, SVB gave $100,000 to a charity founded by Jennifer Siebel Newsom, the California Partners Project, at the request of Newsom. SVB Capital President, John China, sits on the Board of Directors of the charity.

  On Monday, Newsom said that he had “been in touch with the highest levels of leadership at the White House and Treasury.”

  “Governor Newsom’s business and financial holdings are held and managed by a blind trust, as they have been since he was first elected governor in 2018,” said Newsom spokesman Nathan Click.

  Of note, when asked during his 2018 campaign whether he would divest from his companies which might pose an ‘ethics challenge,’ Newsom reportedly replied: “These are my babies, my life, my family. I can’t do that. I can’t sell them.”

  Instead, he announced the blind trust, which would be controlled by family friend and attorney, Shyla Hendrickson – an arrangement under which Newsom’s sister, Hillary Newsom, would retain her role as president of PlumpJack Group – a Newsom owned company which includes hotels, restaurants, wineries, bars and liquor stores.

   

  Tyler Durden
  Wed, 03/15/2023 – 22:00

• US Schools Need To Teach Kids About Proxy War
  US Schools Need To Teach Kids About Proxy War

  Authored by Walt Zlotow via AntiWar.com,

  The Russo-Ukraine war has brought up a concept sorely lacking in the American vocabulary: Proxy War. Most folks are familiar with the word proxy. Ask and they might respond “Oh yes, like when I sign over my right to vote stock shares to another who votes as my proxy.” But throw in “war” after “proxy” and you’ll likely get an eye roll.

  Given how prevalent US reliance on proxy war has become in foreign policy, ignorance of proxy war has a debilitating effect on an informed electorate crucial to fostering a peaceful world.

  OK, for the uninformed, Webster advises: Proxy War. Noun. A war instigated by a major power which does not itself become involved. “The end of the Cold War brought an end to many of the proxy wars thru which the two sides struggled to exert their influence.”

  

  Today the US is involved in two devastating proxy wars that have taken over half a million lives. One is our proxy war against imagined US enemy Iran. Though the targeted enemy, not a death has occurred on Iranian soil. Over are 400,000 dead, mainly in Yemen, inflicted by neighboring Saudi Arabia since 2015. The Saudis intervened in the Yemeni civil war to prevent the Houthi faction from controlling Yemen. We’re been supplying much of the air power, bombs, maintenance, logistics and moral support for Saudi Arabia to kill all those Houthis. Why? We view the Houthis as proxies for Iran to extend its influence in the Middle East. We deem that an existential threat to US national security interests. Regardless of how delusional and senseless, the US has been fueling this proxy war against Iran for 8 years now.

  The other US proxy war is infinitely worse: our 8 year long proxy war against Russia that provoked their invasion of neighboring Ukraine 13 months ago. At that point the proxy war clueless respond incredulously, “Are you crazy? Putin woke up one morning and decided to reestablish the old Soviet Empire, starting with Ukraine. Once he takes Kyiv, he’ march westward into Western Europe. I know, read it in the NY Times and Washington Post.”

  That is the problem. In the US national security state and its compliant media, proxy war is the term that dare not speak its name.

  The information is out there but one must dig to get it. Try exploring the US supported coup of 2014 that deposed elected Ukrainian President Yanukovych to prevent Ukraine from partnering economically and politically with Russia. Check out the murderous civil war the coup started resulting in thousands of dead Russian leaning Ukrainians in Donbas. Learn how hundreds of millions in US weapons helped the US picked Ukrainian post-coup government kill those hapless Ukrainians. Investigate the 2015 Minsk II Agreement that was designed to give the Donbas independence under nominal Ukraine sovereignty, but free from further Ukraine government violence. One will find that France, Germany and the US neither supported nor intended Minsk II from providing Donbas independence. That would have been viewed as a Russian “win”, totally unacceptable to the US proxy war agenda.

  Why is the US proxy war against Russia infinitely worse than our proxy war against Iran in Yemen? The former could pivot from proxy war to nuclear war in a heartbeat. It could take just one mistake, one miscalculation, one deranged “Dr. Strangelove” military renegade to trigger an unstoppable nuclear onslaught.

  Pentagon complains the manner in which a Russian fighter downed a U.S. drone was “environmentally unsound” as if that matters. This after the U.S. blew up the Nord Stream pipelines and filled the Baltic Sea with natural gas. We really have lost our minds.https://t.co/vk3Go30Pkt

  — Jim Rickards (@JamesGRickards) March 14, 2023

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  The forces of ignorance have won the narrative. Every media report on the war begins with “Russia’s unproved attack on Ukraine.” The term proxy war never has and never will appear.

  Might be too late but time for grammar and high school curriculums to add a chapter, maybe even a semester, on proxy war in US foreign policy history and current events classes. After horrendous debacles in Afghanistan and Iraq, killing 6,879 Americans, the US only does proxy wars. No Americans die in proxy wars, only proxies in designated countries like Yemen and Ukraine. Maybe the next generation will gain enough wisdom to recognize a proxy war when it occurs, and possibly push back to keep it from devolving from proxy to nuclear.

  Tyler Durden
  Wed, 03/15/2023 – 21:40

• Senate Hawks Make New Push To Give Ukraine F-16 Jets
  Senate Hawks Make New Push To Give Ukraine F-16 Jets

  At a moment it’s widely understood that Russian forces have the upper hand in Bakhmut, with the eastern city nearly surrounded, a new bipartisan push is on among Congressional hawks to pressure the administration into approving sending F-16 jets to Ukraine. 

  Politico reports this week on a letter written by a group of bipartisan senators and sent to President Biden: “The fresh push came in a letter Tuesday to Defense Secretary Lloyd Austin from eight senators, and obtained by POLITICO, as top administration officials from President Joe Biden on down have poured cold water on bipartisan calls to send U.S.-made fighters into the fight for now.”

  

  The senators argue that F-16s are badly needed at this “critical juncture” to give the Ukrainians the edge they need. “After speaking with U.S., Ukrainian, and foreign leaders working to support Ukraine at the Munich Security Conference last month, we believe the U.S. needs to take a hard look at providing F-16 aircraft to Ukraine,” the senators wrote, while claiming it would be a “game changer on the battlefield.”

  The initiative was led by Democratic Senator Mark Kelly of Arizona. The senators are also pressing the Pentagon for more information on what kind of timetable and resources it would take to get Ukrainian pilots up to speed on effectively flying the F-16s. Politico notes:

  Also signing onto the letter were Democrats Tammy Duckworth of Illinois, Tim Kaine of Virginia, Martin Heinrich of New Mexico and Jacky Rosen of Nevada as well as Republicans Lisa Murkowski of Alaska, Tommy Tuberville of Alabama and Ted Budd of North Carolina.

  But Biden administration and defense officials have recently testified to Congress that it’s anti-air defense systems, artillery and ammunition that currently rank among Ukraine’s highest priorities and requests.

  In other corners of the Senate, Republican hawks like Tom Cotton and Lindsay Graham are also making noise about “doing more”…

  This isn’t a video game https://t.co/TqnmeAeC9T

  — No Bailouts Poso 🚫💰 (@JackPosobiec) March 15, 2023

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  Sen. Cotton recently characterized the White House approach as based on “half measures”. Cotton has a whole litany of escalatory measures he would like to see the US adopt when it comes to Ukraine.

  And Graham too has been advocating for the US to be ready and willing to shoot Russian planes out of the sky…

  Lindsey Graham on the encounter between a US drone and Russian planes: “What would Ronald Reagan do right now? He would start shooting Russian planes down if they were threatening our assets.” pic.twitter.com/rmO4Vl6dd8

  — Aaron Rupar (@atrupar) March 15, 2023

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  But the fact that Defense Secretary Lloyd Austin confirmed in a Wednesday afternoon press briefing that he spoke with his Russian counterpart Defense Secretary Sergei Shoigu – in the first such phone call since October -is a good sign that the two sides aren’t ready to enter a shooting war yet, and that perhaps for now saner minds are prevailing.

  Tyler Durden
  Wed, 03/15/2023 – 21:20

• Geofence Surveillance: First, They Spied On Protesters. Then Churches. You're Next…
  Geofence Surveillance: First, They Spied On Protesters. Then Churches. You’re Next…

  Authored by John and Nisha Whitehead via The Rutherford Institute,

  “I know the capability that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross over that abyss. That is the abyss from which there is no return.”

  – Senator Frank Church on Meet The Press, 1975

  If you give the government an inch, it will always take a mile.

  This is how the slippery slope to all-out persecution starts.

  Martin Niemöller’s warning about the widening net that ensnares us all, a warning issued in response to the threat posed by Nazi Germany’s fascist regime, still applies.

  “First they came for the socialists, and I did not speak out—because I was not a socialist. Then they came for the trade unionists, and I did not speak out— because I was not a trade unionist. Then they came for the Jews, and I did not speak out—because I was not a Jew. Then they came for me—and there was no one left to speak for me.”

  This particular slippery slope has to do with the government’s use of geofence technology, which uses cell phone location data to identify people who are in a particular area at any given time.

  

  First, police began using geofence warrants to carry out dragnet sweeps of individuals near a crime scene.

  Then the FBI used geofence warrants to identify individuals who were in the vicinity of the Capitol on Jan. 6, 2021.

  It wasn’t long before government officials in California used cell phone and geofence data to track the number and movements of churchgoers on church grounds during the COVID-19 lockdowns.

  If we’ve already reached the point where people praying and gathering on church grounds merits this level of government scrutiny and sanctions, we’re not too far from free-falling into a total surveillance state.

  Dragnet geofence surveillance sweeps can and eventually will be used to target as a suspect every person in any given place at any given time and sweep them up into a never-ending virtual line-up in the hopes of matching a criminal to every crime.

  There really can be no overstating the danger.

  The government’s efforts to round up those who took part in the Jan. 6 Capitol protests provided a glimpse of exactly how vulnerable we all are to the menace of a surveillance state that aspires to a God-like awareness of our lives.

  Relying on selfies, social media posts, location data, geotagged photos, facial recognition, surveillance cameras and crowdsourcing, government agents compiled a massive data trove on anyone and everyone who may have been anywhere in the vicinity of the Capitol on January 6, 2021.

  Included in that data roundup were individuals who may have had nothing to do with the protests but whose cell phone location data identified them as being in the wrong place at the wrong time.

  You didn’t even have to be involved in the Capitol protests to qualify for a visit from the FBI: investigators reportedly tracked—and questioned—anyone whose cell phones connected to wi-fi or pinged cell phone towers near the Capitol.

  One man, who had gone out for a walk with his daughters only to end up stranded near the Capitol crowds, actually had FBI agents show up at his door days later. Using Google Maps, agents were able to pinpoint exactly where they were standing and for how long.

  The massive amount of surveillance data available to the government is staggering.

  As investigative journalists Charlie Warzel and Stuart A. Thompson explain, “This [surveillance] data…provide[s] an intimate record of people whether they were visiting drug treatment centers, strip clubs, casinos, abortion clinics or places of worship.”

  In such a surveillance ecosystem, we’re all suspects and databits to be tracked, catalogued and targeted.

  Forget about being innocent until proven guilty.

  Although the Constitution requires the government to provide solid proof of criminal activity before it can deprive a citizen of life or liberty, the government has turned that fundamental assurance of due process on its head.

  Now, thanks to the digital trails and digital footprints we all leave behind, you start off guilty and have to prove your innocence.

  In an age of overcriminalization, when the average American unknowingly commits at least three crimes a day, there is no one who would be spared.

  The ramifications of empowering the government to sidestep fundamental due process safeguards are so chilling and so far-reaching as to put a target on the back of anyone who happens to be in the same place where a crime takes place.

  As Warzel and Thompson warn:

  “To think that the information will be used against individuals only if they’ve broken the law is naïve; such data is collected and remains vulnerable to use and abuse whether people gather in support of an insurrection or they justly protest police violence… This collection will only grow more sophisticated… It gets easier by the day… it does not discriminate. It harvests from the phones of MAGA rioters, police officers, lawmakers and passers-by. There is no evidence, from the past or current day, that the power this data collection offers will be used only to good ends. There is no evidence that if we allow it to continue to happen, the country will be safer or fairer.”

  Saint or sinner, it doesn’t matter because we’re all being swept up into a massive digital data dragnet that does not distinguish between those who are innocent of wrongdoing, suspects, or criminals.

  Case in point: consider what happened to Calvary Chapel during COVID-19.

  Government officials in Santa Clara County, Calif., issued a shelter-in-place order in March 2020, dictating whom residents could see, where they could go, what they could do, and under what circumstances.

  County officials imposed even harsher restrictions on churches, accompanied by the threat of crippling fines for those that did not comply with the lockdown orders.

  Then Santa Clara officials reportedly used geofence surveillance technology to monitor the concentrations of congregants at Calvary Chapel during the COVID-19 lockdowns in 2020 and 2021, using their findings to justify levying nearly $3 million in public health fines against the church for violating the county’s strict pandemic restrictions.

  Despite the U.S. Supreme Court’s ruling that similar restrictions unconstitutionally singled out houses of worship for especially harsh treatment and “struck “at the very heart of the First Amendment’s guarantee of religious liberty,” county officials have sought to collect millions of dollars in fines levied against churches, including Calvary Chapel, for violating the county’s mandates.

  At a minimum, the use of geofence surveillance to monitor church attendees constitutes an egregious violation of the churchgoers’ Fourth Amendment rights and an attempt to undermine protected First Amendment activities relating to the freedom of speech, the free exercise of religion, and the right of the people peaceably to assemble.

  Still, the government’s use of geofence surveillance goes way beyond its impact on church members and anyone in the vicinity of the Jan. 6 protests.

  The ramifications for all of us are far-reaching.

  Mass surveillance has been shown to chill lawful First Amendment activities, and historically has been used to stifle dissent, persecute activists, and harass marginalized communities.

  A study conducted by Roger Clarke, the famed Australian specialist in data surveillance and privacy, indicates that the costs resulting from the erosion of personal privacy are so significant that they essentially threaten the very foundation of a democratic society.

  Some of the most serious harms include:

  • A prevailing climate of suspicion and adversarial relationships

  • Inequitable application of the law

  • Stultification of originality

  • Weakening of society’s moral fiber and cohesion

  • Repressive potential for a totalitarian government

  • Blacklisting

  • Ex-ante discrimination and guilt prediction

  • Inversion of the onus of proof.

  In other words, the chilling effects of pervasive surveillance give rise to a constant, justifiable fear in even the most compliant, law-abiding citizen.

  Of course, that’s the point.

  The government wants us muzzled, complacent and compliant.

  So far, it’s working.

  Americans are increasingly self-censoring and marching in lockstep with the government’s (and corporate America’s) dictates, whether out of fear or indoctrination, or a combination.

  In the meantime, the use of geofence warrants continues to be debated in the legislatures and challenged in the courts. For instance, while a California court found that a broad geofence search warrant violated the Fourth Amendment, a federal district judge for the District of Columbia upheld the use of geofence warrants by police in connection with the events of Jan. 6.

  No matter how the courts rule, however, one thing is clear: these dragnet geofence searches are well on their way to becoming the eyes and ears of a police state that views each and every one of us as a potential suspect, terrorist and lawbreaker.

  As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, this is how technologies purportedly adopted to rout out dangerous criminals in our midst are used to conquer a free people.

  Tyler Durden
  Wed, 03/15/2023 – 21:00

• $5 Million Each And No Taxes? San Francisco Reparations Committee Goes To Town
  $5 Million Each And No Taxes? San Francisco Reparations Committee Goes To Town

  Lawmakers in San Francisco heard several proposals on Tuesday by a city-approved reparations committee tasked with figuring out how the city can ‘atone’ for decades of racism by the city government.

  

  The more than 100 recommendations included payments of $5 million for every eligible black adult, the elimination of all personal debt and tax burdens, a guaranteed annual income of at least $97,000 for 250 years, and homes for just $1 per family.

  Upon hearing the proposals, the San Francisco Board of Supervisors voiced enthusiastic support for the ideas, with some saying that something as trivial as ‘money’ shouldn’t stop the city from doing the right thing. (what?)

  Other supervisors were apparently surprised to that politically liberal residents pushed back against the ideas.

  “Those of my constituents who lost their minds about this proposal, it’s not something we’re doing or we would do for other people. It’s something we would do for our future for everybody’s collective future,” said supervisor Rafael Mandelman.

  Black residents once made up more than 13% of San Francisco’s population, but more than 50 years later, they account for less than 6% of the city’s residents – and 38% of the city’s homeless population. The reparations attempt to rectify historic injustices by focusing not on slavery but rather the city’s discriminatory treatment of Black residents during the period of “urban renewal” in the 1950s through 1970s, which included the razing of a thriving Black neighborhood and the displacement of nearly 20,000 people in the name of “economic development”.

  Adopting any of the recommendations would make San Francisco the first major US city to fund reparations, though the effort faces steep financial headwinds and criticism from conservatives. –The Guardian

  “I don’t need to impress upon you the fact that we are setting a national precedent here in San Francisco,” said Tinisch Hollins, vice-chair of the African American Reparations Advisory Committee. “What we are asking for and what we’re demanding for is a real commitment to what we need to move things forward.”

  Critics say the plans are absurd, particularly considering that California never enslaved black people, and that taxpayers who were never slave owners shouldn’t have to pay money to people who were never enslaved.

  “This conversation we’re having in San Francisco is completely unserious. They just threw a number up, there’s no analysis,” said John Dennis, chair of the San Francisco Republican Party. “It seems ridiculous, and it also seems that this is the one city where it could possibly pass.”

  Tyler Durden
  Wed, 03/15/2023 – 20:40

• Leftist Groups Tapping $1 Billion To Vastly Expand The Private Financing Of Public Elections
  Leftist Groups Tapping $1 Billion To Vastly Expand The Private Financing Of Public Elections

  Authored by Steve Miller via RealClear Wire,

  Democrats and their progressive allies are vastly expanding their unprecedented efforts, begun in 2020, to use private money to influence and run public elections.  

  

  Supported by groups with more than $1 billion at their disposal, according to public records, these partisan groups are working with state and local boards to influence functions that have long been the domain of government or political parties.  

  Registering and turning out voters – once handled primarily by political parties – and design of election office websites and mail-in ballots are being handed over to those same nonprofits, which are staffed by progressive activists that include former Democratic Party advocates, organized labor adherents and community organizers. 

  Republicans have opposed such efforts, passing legislation in 24 states since 2020 curbing the private financing of elections. But the GOP does not have a comparable, boots-on-the-ground effort to influence election boards and workers, and the private-funding bans haven’t proved absolute in some states.  

   “There is a cottage industry of 501c3s in public policy and in the political arena, trying to shape the future of immigration or education or any other topic,” said Kimberly Fiorello, a former Republican state representative in Connecticut. “Increasingly they are about elections, election administration, election technology, ballot design, and all with big funding. These groups seem innocuous, but they aren’t innocuous because they are funded by one political side.”  \

  Many of the progressive groups seeking to influence elections are connected to Arabella Advisors, a Washington-based, for-profit consulting company founded and led by Eric Kessler, a White House appointee during the Clinton administration.  

  Arabella’s projects, which include the New Venture Fund, the Hopewell Fund, the Sixteen Thirty Fund and Secure Democracy USA, had combined revenues of $1.3 billion between 2020 and 2021, tax filings show.  Nonprofits supported by Arabella in 2020 gave out $529 million to “defend democracy.”  

  That coincided with the rise of private-public election partnerships as Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, donated an estimated $350 million to the progressive Center for Tech and Civil Life (CTCL) to support local efforts in the pandemic-challenged 2020 election.

  The voting was marked by social-distancing rule changes encouraging early and mail balloting, imposing policies that Republicans seek to roll back to pre-pandemic rules. The grants of “Zuckerbucks”or “Zuckbucks,” as they are referred to by conservative critics, were supposed to be nonpartisan, but research indicated they were disproportionately allocated to areas to boost Democratic voter turnout. 

  Apart from legislative curbs on private financing of elections, Republicans so far have not shown any interest in countering their opponents’ strategies. Scott Walter, president of the conservative Capital Research Center, told a Zoom audience of Greenwich, Conn., residents this month that 2020 was an outlier in the way voting was shaped by outside influences.   

  “It was only in 2020 with the so-called ZuckBucks, and it wasn’t illegal because no one ever dreamt of having something like this,” Walter said. “There haven’t been any efforts by Republicans that we’re aware of to do anything like this anywhere.”  

  In the past two years, Democratic interests have worked from several angles, pushing back against voter ID, and seeking same-day voter registration, prolonged early voting, and a wide expansion of mail-in voting.  

  Among the endeavors:  

  • The training of election officials by CTCL and like-minded organizations promising “nonpartisan” learning opportunities. Such training used to be the primary domain of the Election Center, a 1,500-member trade group that includes election officials and administrators.   

  • CTCL efforts to generate favorable media coverage: setting up interviews between elections offices and media outlets, and placing op-eds in local newspapers, under the bylines of election officials, using a prewritten template lamenting the lack of public funding for elections.  (Stuart Baum, a CTCL staffer, wrote to Greenwich voting registrars in October: “A reporter from the Washington Post is interested in learning more about your experiences with your aging voting machines … specifically the unfortunate meltdowns that you’ve experienced with them.”)  

  • Sympathetic local officials alerting CTCL to public records requests for information regarding its work. A December information request from an attorney at the conservative Americans for Public Trust was sent to CTCL by Macoupin (Illinois) County Clerk Pete Duncan, noting “attached is a FOIA you may already be aware of, but I figured I would pass it along to you.”  

  • Lobbying at the state and federal level. New Venture, the Sixteen Thirty Fund, and the Hopewell Fund spent a combined $6.8 million on lobbying Congress last year, according to Open Secrets. State lobbying records show New Venture, Hopewell, and Secure Democracy have lobbied in at least 41 states over the past five years, spending hundreds of thousands of dollars on issues including election reform.   

  Lobbying operations provide a more even battlefield as the two parties and their allies have worked vigorously to propose and support new election laws across the country and oppose such measures from the other side. But Democrat efforts draw special concern from foes because they are connected to the same groups that claim they are providing nonpartisan training to election officials and seek to allow private money to flow more freely.   

  In Georgia, the Hopewell Fund and Secure Democracy USA dispatched lobbyists to the Atlanta capitol building to water down a bill banning private funding of elections two weeks before its passage in March 2021.  They won a loophole that allowed DeKalb County in February to accept a $2 million grant from CTCL – this despite the law’s being drafted in part by Heritage Action for America, the lobbying arm of the conservative Heritage Foundation.   

  “Now it looks like some of these states will have to go back and amend their legislation to ensure things like DeKalb can’t happen,” Jessica Anderson, the executive director of Heritage Action for America,  told RCI. Georgia lawmakers have moved to strengthen the law following the DeKalb County grant.   

  In Utah, county clerks in Cache and Weber counties, while so far adhering to the state’s legislative ban on taking grants from outside private groups, have each paid $1,600 to be part of CTCL’s so-called voter integrity plan.  

  CTCL says more memberships and grants are to be announced soon, “once membership paperwork is finalized,” according to emails obtained by RCI through a public records request.   

  While Utah lawmakers last year passed a measure prohibiting elections offices from accepting private grants, “the way it’s written, I could technically take grant money if I wanted for certain activities, but I choose not to because I don’t want to push the envelope,” Ricky Hatch, Weber County clerk and a member of CTCL’s advisory board, said in a Zoom event earlier this year.   

  Hatch did not respond to an interview request.   

  CTCL’s allies include the National Vote at Home Institute, the Center for Democracy, Voting Rights Lab, Rock the Vote, and the Center for Secure and Modern Elections. The groups over the past several years have worked with CTCL on symposiums and presentations to election officials across the U.S.   

  The go-to for elections workshops and information has for decades been the Election Center, the national association of election officials, which holds numerous events each year. Now CTCL is among the presenters tentatively scheduled for an April event .  

  The Election Center’s spokeswoman and CEO of programs is CTCL board director Tammy Patrick, who is also a senior adviser to the elections division of the Democracy Fund.   

  Patrick said in an email that election training “continues to evolve,” and that as technology changes, more training is needed.  

  “Although [the] Election Center strives to meet every need our membership has, this is where our relationships with academic institutions, partner organizations and other government agencies plays a vital role in keeping election professionals current,” Patrick wrote.  

  In related activity, the Biden administration has sought to stem state probes of possible voting malfeasance, sending both broad and specific warnings to states engaged in post-election studies that would potentially catch election malfeasance.  

  A state audit in Texas found that a former Dallas city council member and convicted felon requested mail ballots for 393 individuals as the 2020 presidential election approached, and an RCI review of the ballot applications found that over 90% of those voters were Democrats.  

  Teri Hodge, convicted in 2010 on tax fraud charges connected to her alleged role in a city hall bribery and extortion scheme, collected the mail-in ballot applications all over the city as she and several assistants, including Dallas County District Clerk Felicia Pitre, helped beef up the party’s voting base for the election by registering voters, signing up over 400 county residents to automatically receive mail-in ballots.  

  “This was not illegal,” said Sam Taylor, a spokesman for the Texas Secretary of State’s office.  

  But the finding would normally lead to a further look into the accuracy of the applications and verification through calling the voters.   

  As Taylor’s office sought to investigate further, it was thwarted by a directive from the U.S. Department of Justice issued in July 2021 that said contacting voters placed them in jeopardy of violating federal laws regarding voter intimidation.   

  “There is DOJ guidance that says that talking to voters about things like this [how they applied to vote by mail] is potentially considered voter harassment or voter intimidation,” said Jacqueline Hagan Doyer, legal director of the Forensic Audit Division at the Texas Secretary of State’s office.   

  Hodge, who also served on the elections committee as a state representative, could not be reached for comment.   

  “Since 2018, we’ve seen Democrats catch up with the Republican strategy of getting voters to vote,” said Paul Bentz, a political consultant in Arizona. Voter registration, early voting, and mail-in ballots are cornerstones of the strategy, he said.   

  The Republican National Committee in 2021 announced its Election Integrity Committee, which produced a 24-page report several months later. The report insisted outside help for elections be prohibited, among other things, but the committee has done nothing since.  

  “The RNC established an election integrity committee to examine how Democrats attack election integrity – and more importantly, to lay out a blueprint for protecting our elections from the far-left,” RNC Chair Ronna McDaniel told the Washington Examiner after the report was released.  

  Committee Chairman Joe Gruters did not respond to an interview request.   

  Mac Warner, West Virginia’s Republican Secretary of State, told RCI that his party needs to become more aggressive in elections, using some of the same tactics as their opponents.  

  “When you’ve lost so many elections, you finally have to decide to fight fire with fire,” said Warner, who is a gubernatorial candidate for 2024. “You don’t win elections by not getting ballots out there. You can start playing by their rules and win an election. It’s time to go in another direction.”  

  Tyler Durden
  Wed, 03/15/2023 – 20:20

• Israel On Edge After Suspected Hezbollah Operative Crossed Border, Bombed Roadway
  Israel On Edge After Suspected Hezbollah Operative Crossed Border, Bombed Roadway

  Israel has been shaken by what’s being described as a very serious security breach on its northern border, with a mysterious roadside bombing at Megiddo in northern Israel on Monday now being described as a terror act of Lebanese Hezbollah.

  Until Wednesday, there was a strict gag order in place among Israeli security officials and media while the investigation was ongoing and top-level emergency security meetings were convened. One victim of the blast is said to be in serious condition, and Prime Minister Benjamin Netanyahu has been meeting with his top security officials, having also confirmed he’ll be returning from Berlin a day earlier to handle the crisis.

  

  According to The Times of Israel, a Hezbollah operative snuck across the border earlier this week, and reportedly hitched a ride with a local Arab. “The alleged terrorist was shot dead on the Lebanese border several hours after the attack on Monday. He was armed with an explosives belt at the time,” the report says.

  The bomb detonated Monday morning, and the IDF said forensic evidence showed the bomb to be “unusual” – and not like what is more common among Palestinian attackers. This prompted the military and police to shut down roads and the whole area while trying to track the culprit. The Times of Israel described:

  Officers of the elite police Yamam counterterrorism unit and Shin Bet officers opened fire at the suspect, killing him. The IDF said the suspect was a “clear danger” to the security forces and had a primed explosives belt on him at the time.

  The bystander who was the lone reported victim of the bombing attack has been identified as 21-year-old Shareef al-Din. He suffered shrapnel wounds all over his body.

  Before the details were revealed by authorities, Israeli Kan 11 channel reported that “most of the details of the case are forbidden to be published according to censorship instructions – the security system is very concerned about the details of the case.”

  Israel’s Channel 12 reports that Israel has sent a warning to “terrorist organizations” across the middle east to not take advantage of the country’s internal rifts to commit attacks, saying that the “response will be wildly disproportionate”https://t.co/3rBfkFpUgN

  — Faytuks News Δ (@Faytuks) March 14, 2023

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  This follows a string of attacks and major security incidents amid rising tensions in the West Bank between Palestinians and Israeli security. It also comes amid large Israeli protests in reaction to controversial judicial reforms and new policies of Netanyahu’s far right governing coalition. 

  According to Mideast news site The Cradle, “Such bombing operations are reminiscent of those carried out during the Second Intifada, which saw several large-scale attacks, such as the Megiddo Junction bus bombing of 2002 by the Palestinian Islamic Jihad (PIJ).”

  Tyler Durden
  Wed, 03/15/2023 – 20:00

• How Dangerous Is AI, And Will It Really Take Your Job?
  How Dangerous Is AI, And Will It Really Take Your Job?

  Authored by John Mac Ghlionn via The Epoch Times,

  Artificial intelligence (AI), we’re told, will probably destroy humanity.

  Then again, those in the know tell us that it probably won’t. One thing AI will definitely do, though, is take our jobs, leaving a mass of unemployed, utterly useless individuals in its wake. Right?

  The truth, though, is far more nuanced than some reports would have us believe.

  

  There are currently 6.47 million unemployed people in the United States. Due to fierce competition, credential inflation, and companies becoming more selective, many of these people may find themselves unemployed for the foreseeable future. To compound matters, the jobless must also factor in another huge obstacle: AI-enabled machines and automation.

  It’s natural to fear new technology. The printing press was met with shock and horror. So, too, were inventions such as the telephone, radio, and TV. But AI is nothing like these rather benign creations. It’s a completely different animal altogether, one that has the power to destroy countless professions, but also create a number of eye-opening opportunities. Some analysts warn that AI will alter the employment landscape permanently. According to researchers at Oxford University, AI poses a direct threat to 47 percent of U.S. jobs. ChatGPT and other AI chatbots have people worried, understandably so.

  In the UK, over the next two decades, AI will leave at least 7 million people jobless, according to analysts at PwC. Considering the UK has a population of 67 million, 7 million is a huge number. At the same time, however, AI will create 7.2 million new jobs. The same is true in the United States. AI is predicted to create more jobs than it will destroy. This part is so often, either consciously or otherwise, omitted from the “AI will replace us” conversation.

  Of course, whether or not people have the opportunity, time, or finances to upskill is an important issue that requires further consideration. Nevertheless, on the job front, AI is not as destructive as many might assume.

  As John Hawksworth, PwC’s chief economist, rightly said, “Major new technologies, from steam engines to computers, displace some existing jobs but also generate large productivity gains,” adding that his team’s findings “suggests the same will be true of AI, robots and related technologies.”

  Just to note, the professions most at risk are ones that include rather repetitive actions, like data entry roles, telemarketing, and receptionist work.

  Although AI won’t actually remove humans from the job equation, at least not in the immediate future, it does pose a different, arguably more ominous threat to individuals, especially those residing in the United States.

  The (Further) Erosion of Privacy and Sanity

  In 2014, Stephen Hawking grimly predicted that the development of full AI “could spell the end of the human race.”

  Whether or not Hawking’s ominous prophecy proves to be true in, say, three to four decades from now remains to be seen. But AI will certainly end the idea of privacy, if it even exists anymore.

  An increasing number of federal agencies are using invasive facial recognition technology (FRT), with more planning to expand their use of FRT this year. The technology, which works by identifying and measuring specific facial features and storing the data as a faceprint, is powered by AI. Law enforcement agencies have, in recent times, turned to the technology in an effort to identify criminals. That’s problematic on many levels.

  As a recent Axios report demonstrated, FRT is incredibly flawed. The report was published shortly after a black man was jailed in Georgia after FRT wrongly matched his face with a suspect in a New Orleans robbery. The man, who claimed to have never visited Louisiana in his life, was released after almost a week in detention.

  This isn’t the first time the technology has resulted in the arrest of an innocent individual. As Wired reported last year, at least three prior false arrests occurred after officers used FRT. All three of those arrested were black men. The technology has a history of failing to accurately identify the faces of black people. Not only is FRT invasive, it also appears to be racist.

  Besides powering FRT, AI also powers small flying devices that are now plaguing Americans. Is it a bird? Is it a plane? No, it’s a drone. Unmanned aerial vehicles (UAV), more commonly known as drones, appear to be everywhere. From the world of agriculture to construction and mining, media and telecommunications to law enforcement, the demand for drones has never been higher. By 2025, the drone services market size is expected to be worth $63.6 billion.

  In the United States, drones are already delivering pizza. Walmart also uses drones to deliver groceries. But, as the writer Zachary Mack recently highlighted, critics are concerned that these flying travesties are violating their privacy. Their concerns are most definitely warranted; these machines come with mounted cameras, meaning they capture footage of just about anything.

  Moreover, drones are incredibly noisy. In Glendale, Arizona, residents in close proximity to a Walmart store, noted Mack, are fed up with the incessant noise, with one resident comparing the sound to “a hornet’s nest that’s been kicked up.” People might scoff at the remark, but the link between noise pollution and high blood pressure, as well as heart disease, sleep disturbances, and stress is undeniable.

  AI might not rob you of your job, but it will play a key role in robbing you of your face and, if you happen to live near a Walmart, maybe even your sanity.

  Read more here…

  Tyler Durden
  Wed, 03/15/2023 – 19:40

• US Threatens To Ban TikTok Ban If Chinese Owners Don't Sell; Meta, Snapchat Jump
  US Threatens To Ban TikTok Ban If Chinese Owners Don’t Sell; Meta, Snapchat Jump

  In its most aggressive assault yet on addictive Chinese video-sharing sensation TikTok, the Biden administration is demanding that its Chinese owners sell their stakes or face a U.S. ban of the app, the WSJ reported citing people familiar with the matter. The Committee on Foreign Investment in the US, or Cfius — a multiagency federal task force that oversees national security risks in cross-border investments and which gained prominence under the Trump admin — made the sale demand recently.

  The move represents a major shift in policy on the part of the administration, which has been under fire from Republicans who say it hasn’t taken a tough enough stance to address the perceived security threat from TikTok, owned by Beijing-based ByteDance.

  TikTok executives have said that 60% of ByteDance shares are owned by global investors, 20% by employees and 20% by its founders, though the founders’ shares carry outsize voting rights, as is common with tech companies. The company was founded in Beijing in 2012 by Zhang Yiming, ByteDance Chief Executive Liang Rubo and others.

  In response to the US demand, TikTok said Wednesday that a forced sale wouldn’t address the perceived security risk. Instead, it has pledged to spend $1.5 billion on a program to safeguard U.S. user data and content from Chinese government access or influence.

  “If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access, ” TikTok spokeswoman Brooke Oberwetter said in a statement. True, but it wouldn’t hurt either.

  “The best way to address concerns about national security is with the transparent, U.S.-based protection of U.S. user data and systems, with robust third-party monitoring, vetting, and verification, which we are already implementing,” Oberwetter said.

  However, critics have said that plan isn’t sufficient, saying any Chinese-owned company must comply with demands from Beijing if called upon.

  Accprding to the WSJ, it wasn’t immediately clear what the next step by the U.S. would be, and the people familiar with the matter say a resolution could be months away. TikTok’s chief executive, Shou Zi Chew, is scheduled to appear before the House Energy and Commerce Committee next week to address lawmakers’ questions on the security issues.

  While the Trump administration sought to force a sale of TikTok to U.S.-majority ownership, based on similar national security concerns, it ultimately failed when ByteDance went to court to block a proposed federal ban, arguing that the ban would violate a law known as the Berman amendments, which exempt cross-border communications from the president’s powers to address national security threats

  The Biden administration’s move against TikTok could face a lengthy and bumpy road as well. The company can argue that any forced sale would amount to a ban, because the Chinese government wouldn’t allow the TikTok algorithm to be sold along with it. The company also might be able to argue that the move would violate the Berman amendment, as well as the First Amendment.

  News of the proposed ban boosted stocks of TikTok competitors Meta and Snapchat, the latter rising 10%, while the former gained as much as 3%.

  

  Tyler Durden
  Wed, 03/15/2023 – 19:34

• "Panic, Meltdowns, People Crying…"
  “Panic, Meltdowns, People Crying…”

  Forget SVB, Credit Suisse is the real thing – a SIFI that could bring it all down – and that is perhaps why the world his pet rabbit decided to buy some counterparty risk protection on the Swiss bank…

  

  Source: Bloomberg

  Credit Suisse has been a known issue for years, however, today’s rather public refusal by the Saudis to throw any more money at the Swiss bank, could have been the straw on this camel’s back, sending the stock to new record lows…

  

  Source: Bloomberg

  Credit Suisse ADRs (which traded after the late-day statement from SNB and Finma) shows the stock was not impressed…

  

  Charles Gasparino tweeted the following, which seemed to sum things up well:

  Breaking from a Credit Suisse employee: “panic, meltdowns, people crying.”

  European bank stocks crashed 7% today, down 15% in the last week, erasing all the gains YTD…

  

  Source: Bloomberg

  And European credit risk soared broadly…

  

  Source: Bloomberg

  German 2Y, 5Y, & 30Y bond yields crashed by their most on record today…

  

  Source: Bloomberg

  As market expectations for The ECB tomorrow plummeted from a 100% chance of 50bps a week ago to just barely pricing in a 25bps hike…

  

  Source: Bloomberg

  And that derisking spread around the world, dragging US stocks and bond yields down, dollar and gold higher…

  European banks. pic.twitter.com/TJMq25MXKR

  — Harbinger (@harbinger) March 15, 2023

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

  US equities plunged around 2% on the Credit Suisse contagion, but then well after EU closed, headline suggesting a statement from Swiss authorities prompted a rapid buying-panic, lifting Nasdaq green. But when the statement hit , it was disappointing and stocks faded back into the red with Small Caps the biggest losers (lots of small financials)…

  

  The S&P 500 briefly went negative year-to-date before the Swiss support headlines

  

  Late in the day saw 0DTE traders pushing negative against the rally…

  

  Regional Banks extended recent losses today (despite the bounce back this afternoon)…

  

  So much for the ‘bailout’ – here are some regional bank stock’s performances since Friday’s close…

  

  Treasuries were aggressively bid on safe-haven flows from Credit Suisse stress, with the short-end outperforming, but some of that was sold away after the ‘show of support’ headlines. On the week, amid all the incredible volatility, 30Y yield are practically unchanged while 2YU yields are down 65bps…

  

  Source: Bloomberg

  The 2Y Yield crashed to its lowest since Sept 2022, back below 4.00%…

  

  Source: Bloomberg

  The 10Y yield tested back below its 200DMA once again but found support…

  

  Source: Bloomberg

  The yield curve continues to steepen, with 2s30s at its least-inverted since Oct 2022…

  

  Source: Bloomberg

  Fed rate-hike expectations crashed again today, below Monday’s lows, pricing in over 100bps of rate-cuts by year-end at today’s lows and for March, the market says it’s a coin-toss between ‘pause’ and 25bps…

  

  Source: Bloomberg

  The last few days have seen the market’s expectations of The Fed’s path ahead totally collapse, signaling a panic series of cuts is coming soon…

  

  Source: Bloomberg

  Before we leave bond-land, we note that the 6mo T-Bill yield topping the S&P 500 earnings yield last week (for the first time since Jan 2001), appears to have marked an inflection point…

  

  Source: Bloomberg

  The dollar saw safe-haven flows today and rallied back to Friday’s highs…

  

  Source: Bloomberg

  Bitcoin traded flat to slightly lower today, finding support at $24,000…

  

  Source: Bloomberg

  Oil prices collapsed, with WTI suffering its worst daily decline in six months back below $70, plunging to its lowest since Dec 2021 before bouncing back later in the afternoon…

  

  Copper crashed too, nearly red on the year, after ‘meh’ China data and global stress…

  

  Gold extended gains today, despite dollar strength…

  

  Finally, systemic risk indicators are flashing red as our global dollar liquidity proxy crashed further today as demand for dollars abroad is soaring…

  

  Source: Bloomberg

  Time for some giant swap lines and jawboning. Who will save the world again this time?

  Tyler Durden
  Wed, 03/15/2023 – 19:26

• Wellesley Students Vote To Admit Trans Men To Historic Women's College
  Wellesley Students Vote To Admit Trans Men To Historic Women’s College

  The student body at one of the country’s most prestigious women’s colleges has approved a referendum urging the school to open admission to all nonbinary and transgender people —  including trans men.  

  Tuesday’s vote at Wellesley College in suburban Boston isn’t binding. After the vote, the 2,500-student school –which counts blood-drenched foreign interventionists Hillary Clinton and Madeleine Albright among its alumnae — declared it had “no plan to revisit its mission as a women’s college or its admissions policy.” 

  However, the school has already bent to gender activism. Since 2015, Wellesley has offered admission to anyone “who lives as a woman and consistently identifies as a woman.” That includes trans women — biological men who call themselves women. 

  That’s not enough for a majority of students voting in Tuesday’s referendum: They also want biological women who seek to live their lives as men to be admitted to a college for women.   

  That’s eyebrow-raising enough, but note the referendum also gives a green light to “all nonbinary” people. That would open Wellesley to biological men who position themselves elsewhere across the bewildering, ever-growing taxonomy of gender identities…including, for example, those who claim to have a “fluctuating gender.”

  

  Earlier this month, Wellesley President Paula Johnson posted a message articulating the school’s devotion to remaining a women’s college, albeit one that approaches that definition flexibly: “Wellesley is a women’s college that admits cis, trans, and nonbinary students—all who consistently identify as women.”

  Naturally, there was a backlash, including an ongoing sit-in in the administration building. The student newspaper published an editorial disapproving of Johnson’s message, and “remind[ing] the Wellesley community that President Johnson is the spokesperson for the Board of Trustees, which must be held equally responsible for the College’s transphobic rhetoric.”   

  I’ve lost the plot. Students at left-wing Wellesley, a women’s college, have voted to admit trans men — who, according to identitarian orthodoxy, are fully men. What, then, is the remaining argument against just admitting students of both sexes/all gender identities? https://t.co/82FSnKBYmL

  — Guy Benson (@guypbenson) March 15, 2023

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  Per an odd policy, the college does not publish the actual vote tallies of its referendums. However, Tuesday’s result was widely expected. 

  Senior student Elizabeth Um told The New York Times that while she opposed the referendum, she didn’t pursue any activism against it because its passage seemed inevitable and publicly resisting it would have been “social suicide.” 

  Um, who’s president of a Wellesley anti-abortion group, did dare to share with theTimes her exasperation over the proposal to open her women’s college to women who identify as men, and men who call themselves nonbinary: 

  “If you don’t think you can fit in here, then you have your pick of thousands of other coed colleges…We’re a women’s college. That’s the core identity of the school, and we can’t start watering that down.”

  College president Johnson told the Times that students and faculty contacted her to say they feared ostracism if they went public with their opposition. “I’ve been personally booed at public gatherings where I’ve referred to Wellesley as a women’s college, which it is,” she said.

  

  Supporters of the referendum say their proposal would be consistent with women’s colleges acting as havens for those who face gender discrimination. Retired Wellesley English professor Lawrence Rosenwald told the Times that the college has always been a home for those “not in positions of power in a patriarchal society.”

  Founded in 1870, Wellesley bills itself as an institution for “women who will make a difference in the world.”

  Tyler Durden
  Wed, 03/15/2023 – 19:20

• The SVB Collapse: How Financial Crisis Boosts The CBDC 'Threat'
  The SVB Collapse: How Financial Crisis Boosts The CBDC ‘Threat’

  Authored by Kit Knightly via Off-Guardian.org,

  Last Friday saw the total failure of the Silicon Valley Bank, the 16th biggest bank in the United States. The biggest bank failure since the 2008 financial crisis.

  

  By Sunday, the Silvergate Bank and Signature Bank had joined SVB in full collapse. All three are now safely under Federal Deposit Insurance Corporation (FDIC) control.

  The FDIC has taken the unusual step of fully guaranteeing all deposits kept with the SVB – meaning the federal government will give taxpayer money out to compensate every SVB customer.

  But the damage didn’t stop there. Naturally, this put pressure on other regional banks, with two more – First Republic Bank and PacWest Bank – coming close to collapsing themselves, following mini-runs.

  The weekend saw Wall Street’s 4 biggest banks lose over 55 billion dollars in value. Bank stocks around the world are sliding in value.

  As of this morning Credit Suisse’s stock is at an all-time low, sparking a sell-off of stocks all over the world.

  In short, the financial situation is teetering on the edge of a major crisis. But is it accidental? And if not, what is the agenda behind it?

  Well, firstly, no it’s not accidental. Let’s get that out of the way.

  Does that mean the collapses were planned and engineered to the last detail? Maybe, maybe not.

  Certainly, there was at least some warning for people in the know.

  SVB’s CEO and CFO dumped a combined 4 million dollars of stock in the two weeks before the crash, and Peter Thiel’s Founders Fund withdrew all their funds from SVB the Thursday before the collapse.

  That is despite the California Department of Financial Protection and Innovation finding that SVB was a “sound financial institution” as late as March 9th, and that it only entered insolvency after investors caused a run.

  Obviously, that’s not proof of an intentional collapse, but it’s something to make a note of nonetheless.

  Anybody with some kind of foreknowledge could have made a fortune in put options over the weekend. It will be interesting if any spike in such deals was recorded.

  But all of that is irrelevant, really, because we know they have been deliberately tanking the economy for three years as a response to “the pandemic”.

  They inflated the cost of food and energy and destroyed the value of our currency by “printing” billions upon billions of dollars, pounds and euros.

  So, even if there was no specific micro-managed set-up with these specific banks, bank failures were the inevitable result of this economic vandalism – inevitable, and desired.

  The more important questions are “why?” and ”what happens now?”

  Well, one aspect will be tighter regulation – specifically of cryptocurrency. It’s likely no accident that two of the failed banks – Silvergate and Signature – are major investors in crypto, and SVB is known to have links to crypto too.

  The narrative will likely come about that “unregulated crypto investment poses a danger to the financial system” or that “unregulated crypto is makes our financial institutes vulnerable to economic warfare” or something similar

  We’re already seeing articles along those lines, as well as dire warnings of the same from last fall.

  The next phase will likely be arguing that small, regional, private banks cannot guarantee the security of their customer’s money, and it would be safer for individuals to bank with either giant international banks or directly with the central bank.

  It’s already being reported that Bank of America has seen a huge boost in deposits since the SVB crash. This process of consolidation in the major banks is likely to continue.

  Logically, there’s only one place this two-pronged propaganda is headed (for anyone who’s been paying even the smallest bit of attention): Central Bank Digital Currency.

  The narrative fits too well for it to be anything else.

  Going forward, CBDCs can be pitched as more secure than traditional banking, and more regulated than “traditional” crypto. Further, since the FDIC is now fully guaranteeing deposits in failed banks, you’re practically banking with the Fed anyway. Why not just cut out the middle man?

  We know they’re going to make these arguments because they already started making them.

  In January this year, the World Economic Forum published a paper titled:

  Can central bank digital currencies help stabilize global financial markets?

  It’s clear what the sales pitch is going to be.

  But more than that, it’s possible bank runs will actually be encouraged in future, because they could increase the uptake of digital currency.

  According to a report from the Bank of International Settlements [emphasis added]:

  Another set of studies focus on the risk that a CBDC may increase depositors’ sensitivity to system-wide banking crises by facilitating the transfer of deposits. The availability of CBDC might not have a large impact on individual bank runs as it is already possible to digitally and instantly transfer money between a weak and a strong bank (Kumhof and Noone (2018) and Carstens (2019)).

  However, during a systemic banking crisis, transfers from bank deposits into CBDC would face lower transaction costs than those associated with cash withdrawals (such as going to the ATM, waiting in line, etc.), and would provide a safe-haven destination in the form of the central bank.

  The lower costs of running to CBDC compared to cash imply that more depositors would quickly withdraw at a lower perceived probability of a system-wide bank solvency crisis.

  They argue that since any hypothetical CBDC will be more secure than traditional bank deposits, and easier to get than cash, people would opt to use it in the event of a run on the bank, and that bank runs would therefore be more likely and more common.

  Do you see the implication here?

  Once CBDCs are out there – optional at first, of course – the central banks could theoretically increase uptake by artificially engineering financial instability and causing regional banks to collapse.

  They won’t make it mandatory, they’ll just make it “safe”.

  Another report, published in 2022 by the UK’s House of Lords, described CBDCs as “A Solution in Search of a Problem”.

  It looks like they just found their problem. And problems are just like everything else – the bests are the ones you make yourself.

  Tyler Durden
  Wed, 03/15/2023 – 19:00

• Judge Denies Requests From Jan. 6 Defendants To Cross-Examine FBI Agent On Leaked Messages
  Judge Denies Requests From Jan. 6 Defendants To Cross-Examine FBI Agent On Leaked Messages

  Authored by Gary Bai via The Epoch Times (emphasis ours),

  Defendants in the ongoing Jan. 6, 2021, Capitol Breach trial suffered a defeat on Monday, as the court ordered that the defendants may not cross-examine an FBI agent for most of the defense attorneys’ allegations that spawned from internal FBI messages inadvertently leaked in court.

  Judge Timothy Kelly, a Trump-appointed judge, on Monday addressed allegations made by attorneys of the Jan. 6 defendants that targeted leaked internal FBI messages, which were revealed in court when Nick Smith, a defense attorney representing Ethan Nordean, cross-examined FBI Special Agent Nicole Miller on Thursday last week.

  The judge denied all but one of the defendant’s arguments about the leaked messages. That leaves a narrowed space for the defendants to maneuver should they wish to upend the trial based on these messages alone.

  

  Leaked Messages in the Crosshair

  The leaked messages emerged when Smith showed in court hidden rows in an Excel spreadsheet provided to him by the DOJ, which contained thousands of lines of correspondence among FBI agents—mostly addressed to Agent Miller—in the agency’s Lync system. The files were “hidden” via a “filter” function in Excel, according to a Thursday filing by Nordean.

  These messages include a directive from FBI personnel to Miller to “destroy” 338 pieces of evidence and another directive to Miller to “edit out” an FBI agent from a Confidential Human Source (CHS) informant report, the filing read.

  Since last Thursday, these internal messages were the focus of defense attorneys, who alleged that the messages showed that the DOJ altered evidence, violated due process, and intruded on the defendants’ rights to counsel by monitoring the defendants’ communications with their counsel.

  Based on these allegations, the defendants’ attorneys made a range of requests to the court, including the appointment of a special counsel to review the messages, further cross-examination of Agent Miller about these messages, and dismissal of the case altogether.

  Cross-examination refers to the defense lawyer’s questioning of the plaintiff’s witness—Agent Miller, in this case—and comes after the plaintiff questions the witness in direct examinations. The scope of cross-examinations usually limits to that touched by the line of questioning by the plaintiff in direct examinations for the purpose of checking the witness’s testimony, knowledge, or credibility.

  The defense attorneys, in this case, requested to further cross-examine Agent Miller on the leaked FBI communications, which is extraneous information to the plaintiff’s original line of questioning. The DOJ sought to stop all further questioning about these leaked messages and push defense attorneys back to the DOJ’s original line of questioning in direct examination, according to its court filings over the weekend.

  The judge rejected all but one of the defendants’ allegations since the revealing of the FBI messages last Thursday.

  ‘Editing’ of Informant Reports

  The judge allowed only one request from the defendants, which was a request from Nordean’s attorney to cross-examine Agent Miller regarding the “editing” of an FBI personnel out of a CHS informant report.

  In a Sunday filing, the DOJ said the editing request in the disputed message was sent by another FBI personnel who is trying to remove his name from correspondence with a confidential source he was no longer handling. The DOJ maintained that the FBI personnel instructed Miller to edit out the agent’s name in pursuant to FBI policy and characterized the message as a “routine clerical matter” unrelated to the Proud Boys.

  In response, the defense said the DOJ’s words could not be assumed true and required further investigation.

  “Nordean does not deny that those facts could be true. However, the government’s summary presentation of facts in a brief—accompanied by no sworn declaration and without even an identified source for the information—cannot eliminate Nordean’s rule-based right to cross-examine the witness about an exchange that, on its face, does not appear benign,” Nordean’s attorney wrote in a filing on Sunday, adding that the defense should be able to cross-examine Agent Miller for this reason.

  In an order issued at the beginning of the trial, Kelly agreed with Nordean that cross-examination of Agent Miller on the message containing the CHS report would be appropriate and found the messages, at least at face value, that show it is plausible that the agent may have provided a CHS report that was inaccurate or incomplete.

  Nordean’s attorney cross-examined Miller on the CHS report. As of Monday, the judge has not found that the witness contradicted her own testimony on record.

  Monitoring of Attorney-Client Communications

  Another allegation, one that spurred heated exchanges in court, which Kelly ruled void, was the defendants’ claim that the DOJ monitored attorney-client communications and crafted a trial strategy around the said communications.

  “An agent involved in the investigation states to Miller, ‘this one email [definitely] indicates that [Defendant Rehl and his attorney] want to go to trial,’” wrote Nordean in a filing on Sunday, citing an FBI email message. “The agent says that one of the lead prosecutors on this matter should not be alerted, ‘yet.’”

  Attorneys acting for Jan. 6 defendants Dominic Pezzola and Nordean said in court filings over the weekend that the messages violate the defendants’ right to counsel, as the FBI allegedly monitored communications between a co-defendant, Zachary Rehl, and his attorney. The message thus violated the Sixth Amendment, the defense stated, which prohibits invasion of the right to counsel (Matter of Fusco v. Moses).

  But the DOJ said that because Rehl and his attorney communicated over a monitored prison system, they had waived the right to attorney-client privileges.

  “The government has not obtained any privileged communications between defendant Rehl and Moseley,” the government wrote in response to Roots’s contentions in a filing on Sunday. “Rehl and Moseley made a fully informed choice to communicate with one another over a monitored jail email system. In doing so, they waived any privilege.”

  Kelly, during trial on Monday, ruled in favor of the government and affirmed its stance that because the messages were made in a prison communications system, the defense’s claim that the FBI’s monitoring constitutes a Sixth Amendment violation is void. Therefore, Kelly said, the defendants may not cross-examine Agent Miller on this point.

  Destruction of Evidence

  Furthermore, Kelly ruled on Monday that the defendants may not cross-examine Miller on a leaked message that appeared to direct Agent Miller to “destroy” 338 pieces of evidence.

  Kelly affirmed the government’s stance that the defense had not shown sufficient evidence to connect the said evidence to the case.

  Read more here…

  Tyler Durden
  Wed, 03/15/2023 – 18:20

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• Italy Blames Russia For Surge In Migration, Accuses Wagner Group Of "Hybrid Warfare"
  Italy Blames Russia For Surge In Migration, Accuses Wagner Group Of “Hybrid Warfare”

  Authored by Thomas Brooke via Remix News,

  Italian Defense Minister Guido Crosetto accused the Russian mercenary Wagner Group of facilitating the increase in migration reported this year from Africa to Europe…

  

  Russian mercenaries are responsible for a surge in illegal immigration into Europe and are engaging in “hybrid warfare” against countries supporting Ukraine in the ongoing conflict, Italy’s Defense Minister Guido Crosetto has claimed.

  Speaking on Monday, the Italian minister claimed the Russian Wagner Group, which operates in several African countries and holds considerable political influence, has been facilitating an increase in illegal immigration across the Mediterranean into Italy.

  “I think it is now safe to say that the exponential increase in the migratory phenomenon departing from African shores is also, to a not insignificant extent, part of a clear strategy of hybrid warfare that the Wagner division is implementing, using its considerable weight in some African countries,” Crosetto said.

  

  Italy’s Defense Minister Guido Crosetto. (AP Photo/Andrew Medichini)

  “Just as the EU, NATO, and the West have realized that cyberattacks were part of the global confrontation that the war in Ukraine opened up, they should now understand that the southern European front is also becoming more dangerous every day,” he added.

  However, Italy has long dealt with mass migration from Africa and Middle Eastern countries, and the minister presented no evidence that Wagner was behind any operation to increase migration to Europe. Europe, however, has faced a migrant crisis partially facilitated by Russia and Belarus in countries like Poland and Baltic nations over the last couple of years.

  Italy’s Foreign Minister Antonio Tajani told Italian news agency ANSA that many migrants are now originating from areas “controlled by the Wagner group.”

  Europe’s border agency, Frontex, reported that in the first two months of 2023, the top countries of origin were Ivory Coast, Guinea, and Pakistan — all countries where Wagner has no presence.

  The accusation is firmly denied by the mercenary group whose leader Yevgeny Prigozhin said via the Telegram messaging app: “We have no idea what is happening with regard to the migrant crisis, but we are not dealing with it,” before calling Crosetto a “mudak,” a Russian derogatory term akin to “idiot” or “moron.”

  As Remix News reported on Monday, migrant crossings across the Mediterranean have more than doubled in the first two months of 2023, with Frontex data revealing a total of 11,951 crossings detected in January and February, up 118 percent over the same period last year.

  Italian government figures revealed more than 20,000 people have now reached Italy so far this year, suggesting a significant increase in the past two weeks in migrant activity.

  The surge in immigration prompted the Italian government last week to announce tougher new laws on people smugglers, who could now see themselves jailed for up to 30 years for facilitating illegal immigration into Italy.

  Tyler Durden
  Wed, 03/15/2023 – 02:00

• The Urbanity Of Evil: 20 Years After The US Invasion Of Iraq
  The Urbanity Of Evil: 20 Years After The US Invasion Of Iraq

  Authored by Norman Solomon via Common Dreams,

  Vast quantities of lies from top U.S. government officials led up to the Iraq invasion. Now, marking its 20th anniversary, the same media outlets that eagerly boosted those lies are offering retrospectives. Don’t expect them to shed light on the most difficult truths, including their own complicity in pushing for war.

  What propelled the United States to start the war on Iraq in March 2003 were dynamics of media and politics that are still very much with us today. Soon after 9/11, one of the rhetorical whips brandished by President George W. Bush was an unequivocal assertion while speaking to a joint session of Congress on Sept. 20, 2001: “Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists.” Thrown down, that gauntlet received adulation and scant criticism in the United States. Mainstream media and members of Congress were almost all enthralled with a Manichean worldview that has evolved and persisted.

  

  Our current era is filled with echoes of such oratory from the current president. A few months before fist-bumping Saudi Arabia’s de facto ruler Mohammed bin Salman—who’s been in charge of a tyrannical regime making war on Yemen, causing several hundred thousand deaths since 2015 with U.S. government help—Joe Biden mounted a pulpit of supreme virtue during his 2022 State of the Union address.

  Biden proclaimed “an unwavering resolve that freedom will always triumph over tyranny.” And he added that “in the battle between democracy and autocracies, democracies are rising to the moment.” Of course, there was no mention of his support for Saudi autocracy and war.

  In that State of the Union speech, Biden devoted much emphasis to condemning Russia’s war on Ukraine, as he has many times since. Biden’s presidential hypocrisies do not in any way justify the horrors that Russian forces are inflicting in Ukraine. Nor does that war justify the deadly hypocrisies that pervade U.S. foreign policy.

  This week, don’t hold your breath for media retrospectives about the Iraq invasion to include basic facts about the key roles of Biden and the man who is now secretary of state, Antony Blinken. When they each denounce Russia while solemnly insisting that it is absolutely unacceptable for one country to invade another, the Orwellian efforts are brazen and shameless.

  Last month, speaking to the UN Security Council, Blinken invoked “the principles and rules that make all countries safer and more secure”—such as “no seizing land by force” and “no wars of aggression.” But Biden and Blinken were crucial accessories to the massive war of aggression that was the invasion of Iraq. On the very rare occasions when Biden has been put on the spot for how he helped make the invasion politically possible, his response has been to dissemble and tell outright lies.

  “Biden has a long history of inaccurate claims” regarding Iraq, scholar Stephen Zunes pointed out four years ago. “For example, in the lead-up to the critical Senate vote authorizing the invasion, Biden used his role as chair of the Senate Foreign Relations Committee to insist that Iraq somehow reconstituted a vast arsenal of chemical and biological weapons, a nuclear weapons program and sophisticated delivery systems that had long since been eliminated.” The false claim of supposed weapons of mass destruction in Iraq was the main pretext for the invasion.

  That falsehood was challenged in real time, many months before the invasion, by numerous experts. But then-Senator Biden, wielding the gavel of the Foreign Relations Committee, excluded them all from two days of high-impact sham hearings in mid-summer 2002.

  And who was the chief of staff of the committee at that time? The current secretary of state, Antony Blinken.

  We’re apt to put Biden and Blinken in a completely different category than someone like Tariq Aziz, who was Iraq’s deputy prime minister under despot Saddam Hussein. But, thinking back to the three meetings with Aziz that I attended in Baghdad during the months before the invasion, I have some doubts.

  Aziz wore nicely tailored business suits. Speaking excellent English in measured tones and well-crafted sentences, he had an erudite air with no lack of politesse as he greeted our four-member delegation (which I had organized with colleagues at the Institute for Public Accuracy). Our group included Congressman Nick Rahall of West Virginia, former South Dakota senator James Abourezk and Conscience International president James Jennings. As it turned out, the meeting occurred six months before the invasion.

  At the time of that meeting in mid-September 2002, Aziz was able to concisely sum up a reality that few U.S. media outlets were acknowledging. “It’s doomed if you do, doomed if you don’t,” Aziz said, referring to the Iraqi government’s choice of whether to let UN weapons inspectors back into the country.

  After meetings with Aziz and other Iraqi officials, I told the Washington Post: “If it was strictly a matter of the inspections and they felt there was a light at the end of the tunnel, this would be a totally fixable problem.” But it was far from being strictly a matter of the inspections. The Bush administration was determined to make war on Iraq.

  A couple of days after the Aziz meeting, Iraq’s regime—which was accurately stating that it had no weapons of mass destruction—announced that it would allow UN inspectors back into the country. (They had been withdrawn four years earlier for their safety on the eve of an anticipated U.S. bombing attack that took place for four days.) But compliance with the United Nations was to no avail. The U.S. government leaders wanted to launch an invasion of Iraq, no matter what.

  During two later meetings with Aziz, in December 2002 and January 2003, I was repeatedly struck by his capacity to seem cultured and refined. While the main spokesperson for a vicious dictator, he exuded sophistication. I thought of the words “the urbanity of evil.”

  

  A well-informed source told me that Saddam Hussein maintained some kind of leverage over Aziz by keeping his son in jeopardy of imprisonment or worse, lest Aziz become a defector. Whether or not that was the case, Deputy Prime Minister Aziz remained loyal to the end. As someone in Jean Renoir’s film The Rules of the Game says, “The awful thing about life is this: Everybody has their reasons.”

  Tariq Aziz had good reasons to fear for his life—and the lives of loved ones—if he ran afoul of Saddam. In contrast, many politicians and officials in Washington have gone along with murderous policies when dissenting might cost them only re-election, prestige, money or power.

  I last saw Aziz in January 2003, while accompanying a former UN Humanitarian Coordinator in Iraq to meet with him. Talking to the two of us in his Baghdad office, Aziz seemed to know an invasion was virtually certain. It began two months later. The Pentagon was pleased to brand its horrific air attacks on the city “shock and awe.”

  On July 1, 2004, appearing before an Iraqi judge in a courtroom located on a U.S. military base near Baghdad airport, Aziz said: “What I want to know is, are these charges personal? Is it Tariq Aziz carrying out these killings? If I am a member of a government that makes the mistake of killing someone, then there can’t justifiably be an accusation against me personally. Where there is a crime committed by the leadership, the moral responsibility rests there, and there shouldn’t be a personal case just because somebody belongs to the leadership.” And, Aziz went on to say, “I never killed anybody, by the acts of my own hand.”

  The invasion that Joe Biden helped to inflict on Iraq resulted in a war that directly killed several hundred thousand civilians. If he were ever really called to account for his role, Biden’s words might resemble those of Tariq Aziz.

  Tyler Durden
  Tue, 03/14/2023 – 23:50

• China Calls AUKUS Sub Deal "Pure Deception" As It Means Australia Going Nuclear
  China Calls AUKUS Sub Deal “Pure Deception” As It Means Australia Going Nuclear

  China has blasted the new AUKUS nuclear submarine deal announced by President Joe Biden in San Diego on Monday alongside Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak. Biden sought to stress that the agreement to transfer nuclear submarine technology to Australia is not “a challenge to anybody” and that “These boats will not have any nuclear weapons of any kind of them,” according to his remarks at an outdoor ceremony at Naval Base Point Loma.

  But Beijing disagrees, as on Tuesday the foreign ministry blasted the US and its allies for their “Cold War mentality” which puts the region on a “dangerous path” that will “only motivate an arms race”. Spokesperson Wang Wenbin additionally said that nuclear subs for Australia’s military will “damage the international nuclear nonproliferation regime, and harm regional stability and peace.” 

  

  “The latest joint statement issued by the U.S., U.K., and Australia shows that the three countries have gone further down the wrong and dangerous path for their own geopolitical self-interest, completely ignoring the concerns of the international community,” Wang said at a daily briefing.

  This isn’t the first time that China has made the charge that in Canberra procuring nuclear-powered subs it is violating its own ‘nuclear weapons free’ policy. Wang reiterated China’s long-running assertion that it poses “serious risk of nuclear proliferation and violating the object and purpose of the Treaty on the Non-Proliferation of Nuclear Weapons.”

  “The three countries claim that they will abide by the highest nuclear non-proliferation standards, which is pure deception,” Wang said, charging they’ve been engaged in “coercing” the International Atomic Energy Agency into bestowing endorsement.

  Meanwhile, China certainly took notice when Australian Defense Minister Richard Marles commented on the super expensive AUKUS deal Tuesday (Australia forecasts it will spend up to $245 billion on the project by 2055). He had delivered—

  …”one of the most ominous warnings” relating to the reasons behind a heavily expensive AUKUS deal, says Sky News host Laura Jayes.

  “It answered the why – why we are spending so much on these nuclear-powered submarines?” Ms Jayes said.

  Defence Minister Richard Marles has stated in a media conference on Tuesday, “the biggest conventional military build-up … seen since the end of the second world war” is happening in our region.

  “That is all about China – not mentioned by word, but ‘the biggest conventional military build-up’ – well it cannot be about anyone else,” she said.

  Pres. Biden announces first AUKUS project will be developing Australia’s nuclear-powered submarine capacity, clarifies subs will not carry nuclear weapons.

  “Australia is a proud non-nuclear weapon state and is committed to stay that way.” https://t.co/1SlS2LIyjK pic.twitter.com/jfXjxPYdTf

  — ABC News Politics (@ABCPolitics) March 13, 2023

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  Also fueling Beijing’s anger are recent reports that the US Navy is planning a full-service submarine hub in Australia which can be a major base overseeing all submarine deployments in the Asia Pacific.

  Defense News reported last week, “The U.S. Navy envisions a submarine hub in Australia from which the service can oversee the entire range of undersea activities in the Asia-Pacific region, from boat production to repairs to missions, service Secretary Carlos del Toro said last month.”

  Tyler Durden
  Tue, 03/14/2023 – 23:30

• Investors Expecting Fed To Accept Entrenched Inflation
  Investors Expecting Fed To Accept Entrenched Inflation

  By Nour Al Ali, Bloomberg markets live reporter and analyst

  Breakevens and inflation swaps show market inflation expectations still above the Fed’s 2% target…

  

  … which coupled with money-market expectations of a Fed rate-cut as soon as the summer…

  

  …  is a sign that investors expect the Fed to potentially accept that inflation may remain higher than its target and far more entrenched in the economy as financial stability remains a concern.

  For much of the current tightening cycle, the market has been at odds with the Fed as it prioritized its fight to tame inflation. When Chair Jerome Powell testified in Congress last week, the market listened and sent yields soaring, interpreting his initial appearance as a strong sign of the Fed’s hawkishness. He said that policymakers were prepared to increase the pace of rate hikes if needed, adding that nothing about recent data suggested that the Fed has tightened too much.

  The next day, Powell softened his tone, stressing that no decision had been made on the pace of rate hikes, and that policymakers were looking to be guided by the wave of upcoming data. Jobs, which showed a tight labor market, along with CPI and PPI data, which would give clarity on price pressures. Since then, the SVB meltdown led to significant repricing across global assets and investor expectations of the Fed’s rate-hike path.

  Treasuries, particularly at the short-end, have given back some of the gains they’ve seen during the market mayhem. The yield on short-end USTs was up close to 30 basis points on the session, climbing past 4.3% after today’s inline data. It remains to be seen what the next few data prints hold, and how it will inform both the market and the Fed ahead of its decision this month.

  Tyler Durden
  Tue, 03/14/2023 – 23:10

• DeSantis Issues Most Blistering Takedown Yet Of US Role In Ukraine "Territorial Dispute"
  DeSantis Issues Most Blistering Takedown Yet Of US Role In Ukraine “Territorial Dispute”

  At a moment Western officials and even some mainstream media are beginning to express doubt over Ukraine’s ability to push Russian forces back, Florida Gov. Ron DeSantis, who will likely enter the race for the 2024 GOP presidential nomination, has issued his sharpest criticisms yet of America’s role in the Ukraine war, calling it fundamentally a “territorial dispute” which the US should stay out of.

  The statements came as part of his response to a questionnaire issued to possible 2024 presidential candidates by Fox News’s Tucker Carlson. The questionnaire asked whether protecting Ukraine should be part of US “vital national interests”. DeSantis ripped Biden’s policy as a virtual “blank check” which serves to erode US interests and “distracts” from what should be more pressing priorities.

  He stressed that the United States government “cannot prioritize intervention in an escalating foreign war over the defense of our own homeland” – which also echoes the scathing critiques of a small cadre of GOP Congressional members like Matt Gaetz, Thomas Massie, and Marjorie Taylor Greene.

  

  “While the U.S. has many vital national interests — securing our borders, addressing the crisis of readiness within our military, achieving energy security and independence, and checking the economic, cultural, and military power of the Chinese Communist Party — becoming further entangled in a territorial dispute between Ukraine and Russia is not one of them,” DeSantis said. Likely the reference is to the civil war which predates the Feb.24, 2022 Russian invasion by many years: the conflict in Donbas which went back to 2014 and by many estimates took over 14,000 lives on both sides. 

  “The Biden administration’s virtual ‘blank check’ funding of this conflict for ‘as long as it takes,’ without any defined objectives or accountability, distracts from our country’s most pressing challenges,” he added.

  Crucially, he also used the questionnaire as an opportunity to point out that the Biden White House’s irresponsible escalation of involvement in supporting Kiev has ultimately pushed Moscow into “a de facto alliance” with China.

  “Because China has not and will not abide by the embargo, Russia has increased its foreign revenues while China benefits from cheaper fuel. Coupled with his intentional depletion of the Strategic Petroleum Reserve and support for the Left’s Green New Deal, Biden has further empowered Russia’s energy-dominated economy and Putin’s war machine at Americans’ expense,” the Florida governor said. 

  And on the question of F-16s, which is currently being pushed by some Congressional hawks and reportedly being mulled over by the administration…

  DeSantis said F-16s and long-range missiles should be “off the table” because the moves could risk “drawing the United States into the conflict and drawing us closer to a hot war between the world’s two largest nuclear powers.”

  The Florida Republican further went after what he called the US policy of “regime change” in Russia which he said is “no doubt popular among the DC foreign policy interventionists”.

  2024 Poll: Trump and DeSantis neck and neck among Republican voters for GOP nomination, economy top issue https://t.co/oECu7RP7Gv

  — Fox News (@FoxNews) March 14, 2023

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  Despite Biden officially rejecting that he has a policy of regime change, DeSantis emphasized that the current trajectory tends in that direction, leaving no good options as things escalate in Ukraine. He said that any attempt to remove Putin from power “would greatly increase the stakes of the conflict, making the use of nuclear weapons more likely.”

  “Such a policy would neither stop the death and destruction of the war, nor produce a pro-American, Madisonian constitutionalist in the Kremlin. History indicates that Putin’s successor, in this hypothetical, would likely be even more ruthless,” he wrote. “The costs to achieve such a dubious outcome could become astronomical.”

  Given that Donald Trump is running, and some polls have put their popularity and support among Republican voters very close, it will be interesting to see if Trump matches or surpasses DeSantis’ emphasis on non-interventionism in the “territorial dispute” in Ukraine. Certainly Trump has already been out front in being vocal against Biden’s policies in Ukraine. All of this at the very least means the debate within the GOP is likely to slide more and more against a policy of escalating American involvement, despite the hawks still by and large exercising most influence at the moment.

  Tyler Durden
  Tue, 03/14/2023 – 22:50

• Death Of A Myth
  Death Of A Myth

  Authored by George D. O’Neill Jr via TheAmericanConservative.com,

  Americans need to wake up to the realities of a post-unipolar world before it’s too late…

  

  As we witness the collapse of various mainstream narratives, especially those surrounding the U.S./NATO war with Russia in Ukraine, Americans should begin to reassess their understanding of U.S. national leadership. Most American citizens have no notion of the great disparity between what their government does overseas and the stories they hear from its mouthpieces. As a result, Americans unwittingly support all sorts of foreign operations with little or no understanding of what is actually going on. For years, they have been misled by a non-stop propaganda campaign that is only now beginning to crumble.

  We are experiencing the death throes of the United States’ unipolar hegemony over large parts of world. Until citizens begin to realize the magnitude of their government’s policy deceptions, it will become increasingly difficult to understand the United States’ changing global position and adjust to the effects of the growing negative perception of our country held by many people around the world.

  Since World War II, and particularly after the collapse of the Soviet Union, the United States was the dominant and unrivaled world power. Instead of being a peacekeeper and honest “world’s policeman,” the U.S. has increasingly been a destabilizing bully. Many leaders worldwide have been reluctant to speak up about the increasingly destructive nature of U.S. foreign policy for fear of being punished. But as U.S. stature and power declines, large parts of the world have been seeking arrangements to protect themselves from U.S. predation.

  Most Americans do not understand why such realignments are occurring, thanks to a constant stream of propaganda about America being the “most generous,” the “exceptional nation,” a “nation that sets aside its interests for the benefit of the world,” an “important source of good” around the globe as the “protector of the rules based order,” always shouldering the heavy responsibility to protect the international system and weak nations from bad actors, ad nauseam. According to a number of sources, U.S.-caused wars have been directly responsible for the deaths of more than 10 million people since World War II. The neoconservatives will scoff at these facts and their sources, but most of the rest of the world believes this to be true.

  Most Americans cannot accept these observations because they contradict the narrative given them by the omnipresent state propaganda machine. While the ever growing list of American misdeeds abroad has for years been largely unchallenged at home, it has become increasingly obvious to many across the globe. Americans should take note. For example, the Chinese Foreign Ministry has just published an overview of what they see as U.S. misbehavior. The U.S. establishment and well-meaning patriots may dismiss the Chinese observations, but they ring true to many who live outside of the neoconservative propaganda bubble.

  Contrary to establishment mythology, the U.S. is famous for breaking its promises, violating treaties, and abandoning agreements. The list is long: the U.S.’s 1990 promise not to move NATO east into former Warsaw Convention countries, the abrogation of the ABM, INF, Open Skies, START treaties, the JCPOA, the  agreement with Libya, and others. The U.S. has also repeatedly flouted international law by invading countries that do not bow to U.S. hegemony.

  There are a number of U.S. agencies that covertly fund NGO election interference operations. Most Americans have no idea that the Cold War–era National Endowment for Democracy was created to influence elections in countries around the world, and has interfered in many. (The National Endowment for Democracy was spending money in Russia until the Russians expelled them.) Then there are the famous “Color Revolutions” sponsored by various U.S. agencies. Some estimate the U.S. has interfered in as many as fifty countries.

  The days of pretending to ignore this destructive behavior are drawing to a close. We are entering a period in which the populations of many countries may decide that being subject to American hegemony is not in their interests. Increasing numbers of countries have joined and formed alternative alliances outside U.S. influence. SCO, BRICS+, OPEC+, and others have experienced growing membership as countries that believe their interests are better protected by these non-U.S. affiliated alliances sign on.

  The fallout of the tragic and unnecessary Ukraine war has accelerated this movement to seek other cooperative associations. As America’s European allies are learning, there can be huge political and economic costs to being associated with the U.S. The populations of Europe have watched their own economies suffer and paid dearly for energy because of the ten rounds of self-destructive sanctions imposed on Russia.

  The purveyor and protector of the “rules-based order” decided that Germany should not import cheap Russian natural gas. America’s president and a senior State Department official threatened to cut off the pipeline supplying Russian natural gas if Russia did not bow to Washington’s wishes. Coincidentally, the Nord Stream gas pipelines were blown up not long after. The U.S. Secretary of State said the sabotage was an “opportunity,” and the assistant secretary of State appeared to be satisfied. The neoconservatives lauding this act of terrorism against an ally of the U.S. may believe pretending Washington was not responsible will reassure America and Europe, but the rest of the world believes otherwise.

  Many will ignore or diminish the consequences of a possible U.S. role in the destruction of the Nord Stream pipelines. But this addition to the list of callous acts believed abroad to be perpetrated by the U.S. further would undermine the narrative of America as the “generous nation,” “leader of the free world,” “protector of the rules-based order.” For years, these contradictions were skillfully finessed and ignored by a compliant press and complicit institutions that profited from these deceptions. But as the U.S. appears less powerful, the rest of the world is beginning to take notice and are moving to seek other protective friendships.

  Less than two years ago, the “most powerful military in the history of man” was chased out of Afghanistan by a group of ragtag militants armed with small arms and mounted on donkeys, bicycles, and motor scooters. The Taliban now has $80 billion worth of U.S. military equipment our leaders left behind. The excuses may have been convincing to the Washington elites and were sold strenuously by regime-aligned media outlets. The rest of the world knows better. The old post-Vietnam collapse tropes, claiming “we would have won if only we were really allowed to fight,” ring hollow after twenty years, hundreds of thousands killed and made homeless, and several trillion dollars spent on that disaster.

  Contrary to the many assertions that the Russians would collapse from the shock and awe of the “sanctions from Hell,” the ruble has not turned into rubble as Joe Biden predicted. The U.S. and its NATO clients are running out of ammunition and arms to send to Ukraine, which is being bled white at their behest. It appears that Russia will steadily grind down the Ukrainian military. All of this is reminiscent of World War I. The proto-neoconservatives sold that war as a quick engagement that would be over by Christmas 1914. Four years later, 20 million were dead and many more were wounded or displaced; subsequently most of the European Christian monarchies collapsed, Russia descended into communism’s seventy-year nightmare, and the “War to End all Wars” to make the world “safe for democracy” set the stage for the even more horrific World War II.

  A century later, we are sleepwalking into World War III. Americans should ignore the state-sponsored propaganda (eerily similar to that which led up to WWI), wake up, look at what their leaders have wrought, and do all they can to end support for this cruel war before we face a Great War–like conflagration or worse.

  Tyler Durden
  Tue, 03/14/2023 – 22:30

• CDC, FDA Respond To Florida Surgeon General's COVID-19 Vaccine Safety Alert
  CDC, FDA Respond To Florida Surgeon General’s COVID-19 Vaccine Safety Alert

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

  U.S. health authorities have responded to the warning from Florida’s surgeon general about a spike in reports of adverse events following COVID-19 vaccination.

  

  Drs. Rochelle Walensky and Robert Califf claimed in the response that Dr. Joseph Ladapo, the surgeon general, was misleading the public by focusing on the increase in adverse events reported to the Vaccine Adverse Event Reporting System (VAERS).

  “The claim that the increase of VAERS reports of life-threatening conditions reported from Florida and elsewhere represents an increase of risk caused by the COVID-19 vaccines is incorrect, misleading, and could be harmful to the American public,” Walensky and Califf said in the missive.

  Walensky heads the U.S. Centers for Disease Control and Prevention (CDC). Califf heads of the U.S. Food and Drug Administration (FDA). The CDC and FDA co-manage VAERS, which accepts reports from anybody but which is primarily used by healthcare workers.

  The COVID-19 vaccines were given emergency authorization in late 2020. Under the emergency authorizations, vaccine companies and healthcare workers are required to report certain adverse events through VAERS, “so more reports should be expected,” Walensky and Califf said.

  “Most reports do not represent adverse events caused by the vaccine and instead represent a preexisting condition that preceded vaccination or an underlying medical condition that precipitated the event,” they said.

  They did not cite any studies or other research to support the claim.

  While anyone can lodge reports with the system, authorities request medical records and other documentation in an effort to verify reports of certain events. Out of 1,826 reports of heart inflammation after Pfizer or Moderna vaccination in adults through May 26, 2022, for instance, the CDC verified 72 percent.

  The CDC also identified hundreds of safety signals for the Moderna and Pfizer COVID-19 vaccines through analyzing VAERS data in 2022, according to records obtained by The Epoch Times. A safety signal is a possible sign of a side effect. Only a handful of adverse events are definitely caused by the vaccines, according to the CDC, including myocarditis, or heart inflammation, and severe allergic shock.

  Ladapo said in February that in Florida, the number of reports to VAERS after the COVID-19 vaccines were authorized spiked by 1,700 percent, while the increase in vaccine administration rose by just 400 percent.

  “We have never seen this type of response following previous mass vaccination efforts pushed by the federal government,” Ladapo said in a letter to Walensky and Califf.

  “These findings are unlikely to be related to changes in reporting given their magnitude, and more likely reflect a pattern of increased risk from mRNA COVID-19 vaccines,” he added, calling for “unbiased research … to better understand these vaccines’ short- and long-term effects.” The Pfizer and Moderna vaccines both use messenger RNA (mRNA) technology.

  Florida officials pointed to a study that found in the original clinical trials that the vaccinated were more at risk of serious adverse events, as well as other papers that found an increased risk of adverse events after COVID-19 vaccination.

  Florida currently recommends against COVID-19 vaccination for young, healthy males who have been shown to be at the highest risk of myocarditis. Vaccinating the population “doesn’t make any sense” from a risk-benefit standpoint, Ladapo, appointed by Republican Florida Gov. Ron DeSantis, told The Epoch Times. The heart inflammation causes serious problems and can even lead to death in some cases.

  Read more here…

  Tyler Durden
  Tue, 03/14/2023 – 21:50

• Car Dealerships Hit With Profitability Squeeze As Auto Industry Cracks
  Car Dealerships Hit With Profitability Squeeze As Auto Industry Cracks

  Auto dealerships are encountering a major problem where auction (wholesale) prices are increasing while real book values stagnate, squeezing profitability. 

  To make sense of this, auto-guru CarDealershipGuy expanded on our tweet, pointing out that Manheim wholesale auto prices are re-accelerating while other indexes tracking prices were flat. 

  Here’s what was revealed in the conversation as per the auto expert:

  Manheim is tracking auctions. Dealers ARE paying more for cars. A LOT more. But the issue dealers are running into is SELLING those cars.

   JD Power – one of the industry’s main sources of Vehicle Book Values that auto lenders rely on to value collateral – hasn’t materially adjusted upwards. 

  This has left dealers high-and-dry and without a profitable outlet for all the inventory they just acquired for OVER book value. 

  And that is leading to lots of dealers selling cars to consumers at a front-end LOSS (meaning, lose money on actual cars) while hoping to make it up on the back-end (with value-added products like warranties). 

  Speaking for myself, our vehicle purchase price has slightly RISEN but our ASP (average sale price) has barely budged. 

  Separately, CarDealershipGuy went even more in-depth about underwater auto dealerships in a recent blog post:

  Cars are appreciating again and this presents problems for both dealerships and consumers. Here’s why:

  Ask any dealer and they will tell you that appreciating wholesale prices is a phenomenon we haven’t seen since the craziness of 2021. There hasn’t been a tax season where we’ve seen wholesale prices for mainstream, bread-and-butter cars at $3K above the “book value.” [Book values are current wholesale and retail market price estimates provided by various publishers, such as NADA, Kelly Blue Book, Black Book, JD Power, and other companies]

  Look at this example from a recent sale at an auction:

  

  A 2016 Honda Civic LX with 68K miles was listed with an auction value of $15,800 and sold for $16,100. The JD Power book value is listed at only $12,925 for clean and $12,050 for average conditions. This is a 7-year-old Honda Civic we are talking about. See what’s wrong here? While wholesale prices have been increasing for 3 months, book values haven’t caught up yet!

  This is just one example, but as other dealers can attest, it is an increasingly common occurrence.

  

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

  So what are the consequences?

  Dealers struggle to make a profit, and thus, sell a car: There’s no “water” (industry term for profit or ‘spread’) in the deal from the get-go. Lagging book values certainly hurts dealer margins, but there’s another issue:

  Inaccurate book values hinder dealerships’ ability to secure financing for consumers because lenders use book values to underwrite loans(!)

  Even if a lender is willing to accept the 120% loan-to-value ratio, it would still require a large down payment of ~$5K to secure a loan. Faced with increased delinquencies, lenders want to take less risk and charge dealers more for each loan, further squeezing dealer margins.

  Consumers in the prime credit segment don’t need to worry, but those in subprime and deep subprime should expect it to become increasingly difficult to get into cars.

  He presented an outlook similar to ours about the turmoil ahead:

  We are in for a bumpy ride: the outlook for subprime shoppers is bleak, and dealers are facing additional headwinds from higher wholesale prices, lack of inventory, and inaccurate book values.

  Aside from the issue of auto dealerships experiencing losses from selling vehicles, subprime borrowers are also having difficulties meeting their monthly payments that exceed $1,000.

  Tyler Durden
  Tue, 03/14/2023 – 21:30

• The Fed Can't Give Up The Inflation Fight Yet
  The Fed Can’t Give Up The Inflation Fight Yet

  Authored by Jeffrey Tucker via The Epoch Times,

  Many people in Washington hoped for much better inflation numbers in February. Below zero would have released tears of joy following this rough weekend of bank failures and the first signs of financial instability in these three years of nonstop terrible. Alas, that did not happen. The report came in at a 0.4 percent increase for the month and 6 percent for the year, or three times the Fed’s target.

  

  Drilling down, there are some really terrible hot spots. Food at home, energy services, and transportation all registered double-digit increases on an annualized basis. You know this intuitively by looking at your utility and grocery bills. Shopping used to be a pleasure. Now it is nothing but pain. We look at those steaks, eggs, and even veggies and think twice and three times. We stand at the cash register with dread. The bill comes and we shake our heads with sadness at what we are going through.

  Remember the days when we would shop with smiles on our faces, see and greet friends, and leave with a spring in our step? Those days are gone, replaced with grumbling, sadness, and deep annoyance all around. Every aisle is filled with crabby people who have a sense that they are getting pillaged. We are alarmed not only at high prices but also the magically shrinking packages.

  “Good time to be on a diet,” everyone thinks. The diet called “one meal a day” (OMAD) starts looking very attractive. And truly Americans of all classes would do well to examine their eating habits. But one might like to do that under less financial duress.

  It’s fair to observe that inflation is not getting worse at the same pace it was last year. But a declining rate of worsening is not anything to cheer about. The Fed must still deal with a depreciation rate of the dollar in terms of goods and services that it cannot tolerate. Already, the dollar has lost 17 cents of value in two years. Something has to change.

  Informed opinion over the weekend hoped that the Fed would stop the wild war on inflation with fewer rate increases over the coming months. My own read on Jerome Powell is that he is in no mood to do that. He made up his mind two years ago that he was wrong to accommodate Congress’s spending mania for a virus and reversed course.

  He further knew that his rate increases would naturally devalue the portfolios of major banks that had stored its cash excess in fixed-rate government securities and other mortgage-backed products. They had plenty of time to sell those at a discount. So far as he is concerned, the balance-sheet problems of Silicon Valley Bank are not his problems. They are a matter for the risk-management team to solve.

  It appears too that there is a real difference of opinion between the Fed and the Biden administration at this point. Over the week, the Biden administration via the Treasury and the deposit insurers went out on a limb to guarantee the deposits of failing banks—an absurd and dangerous promise that cannot be applied across the board. Powell didn’t make that decision but neither is he in a position to stop it. That’s for regulators to decide and he is not among them. His job is to land the economy away from inflationary excesses come hell or high water. Unless someone gets to him, my bet is for the rate increases to continue.

  There are two theories concerning why last week’s bank failures have not led to a broader contagion. One credits the Biden administration’s policy of universal deposit insurance. But it is more likely the case that these particular failures were not systemic but rather trace to poor management by the banks themselves. It would be nice to know. All the Biden administration had to do was let them fail and watch the results. Alas, that didn’t happen.

  A major factor in why the Biden administration did the wrong thing owed to major players in industry and banking screaming that something had to happen. In a panic and watching financial opinion turn ever more south on a Sunday, the regulators jumped in to promise something that is simply impossible: universal guarantees. This was a huge error.

  Another error was putting President Biden on stage to promise the American people that the banking system is sound. It’s like these people truly believe that they still have credibility. They do not. Viewers listen to them and naturally assume that the opposite is true. Free advice: never trot that geezer out to assure anyone in a crisis. He has zero credibility and his every word does damage to any message they want to deliver.

  As a result of this mess, we now have two de facto monetary policies operating at cross purposes. We have the regulators captured by the Biden administration pushing looser money and credit, and indeed promising more floods to fix any problems that emerge in the future. On the other hand, we have Powell and the Fed sticking to their guns on tighter money to restrain the effects of excesses of 2020 and 2021.

  This morning’s CPI numbers make the point that the Fed still has a lot of work to do. In addition, it is actually difficult to discern long-run and underlying trends from month to month numbers. After all, last summer we saw one month (July) when inflation actually registered as flat. Last month’s numbers seemed to indicate a re-acceleration, despite what the headlines said.

  

  Remember that these numbers are always in the past. What is going on now? We are certainly seeing the rate at which food is going up beginning to relax a bit. February was certainly terrible but March is less so. On the other hand, have you seen gas prices lately? For the year, we are up by 40 cents a gallon. It does not look good. And we can fully anticipate that renewed demand with spring and summer coming is going to put more upward pressure on gas prices.

  Overall over three years, there is no room for optimism about the price at the pump. This became obvious to me yesterday when the discount, members-only station had a line around several blocks. People are willing to wait 45 minutes just to save a few bucks on gas. That’s when you know that matters are becoming more intense.

  The Fed has more than enough evidence on its side to continue the tightening campaign. This will put more pressure on heavily leveraged companies because the costs of servicing their debt are rising ever more and eating into their capacity to retain huge labor costs. For a sign, have a look at Meta/Facebook which just announced another huge round of layoffs. This indicates some hardcore balance-sheet pressure.

  We are nowhere near done with this. The right side of the yield curve will continue to offload capital to the left and that means growing layoffs in information technology and professional services even as retail and hospitality are facing real shortages. The Fed’s determination to arrest the inflation problem means that this shift will continue.

  As for the woke banks, they will all likely bite the dust before this is over. And herein we find the silver lining in all this upheaval. We are getting back to the realities of finance about which markets have been in denial for many years.

  Tyler Durden
  Tue, 03/14/2023 – 21:10

• New Wuhan Scandal: US Agencies Double-Paid Virus Research Costs
  New Wuhan Scandal: US Agencies Double-Paid Virus Research Costs

  The US government may have made tens of millions of dollars in duplicate payments for virus research at the Wuhan Institute for Virology, according to a review of government records by a former federal investigator, CBS News reports. 

  “What I’ve found so far is evidence that points to double billing, potential theft of government funds. It is concerning, especially since it involves dangerous pathogens and risky research,” said Diane Cutler, whose services were engaged by Kansas Republican Senator Roger Marshall. 

  Cutler has more than 20 years of experience investigating healthcare fraud and white-collar crime, an her conclusions spring from her review of over 50,000 documents relating to US grants that financed coronavirus research in China. 

  

  The apparent double-payments, made via the National Institutes of Health (NIH) and US Agency for International Development (USAID), related to a variety of claimed costs, including salaries, travel, medical supplies and equipment.  

  Anonymous sources told CBS the damage may amount to tens of millions of dollars. Marshall has turned over Cutler’s findings to USAID and the agency’s internal watchdog, which has launched an investigation of its own. It could take six months or more. 

  On Feb. 28, FBI Director Christopher Wray said the bureau had long ago concluded the Covid-19 pandemic was most likely the result of a leak from a Chinese lab. Days earlier, it was reported that the Department of Energy had — in 2020 — reached its own determination that a lab leak was most likely. 

  This month, former NIH National Institute of Allergy and Infectious Diseases Director Anthony Fauci was accused of prompting a cadre of scientists to publish a paper disproving the lab-leak theory — just days after scientists warned Fauci, in February 2020, that Covid-19 may have indeed leaked from a lab.  

  Two authors of that same paper — who initially expressed concerns over a lab-leak but then changed their tune — went on to receive millions in NIH grants under Fauci.

  Fauci earned at least $480,654 a year in his NIH-NIAID role, making him the highest-paid employee in the federal government. Now, the increasingly disgraced graduate of the College of the Holy Cross in Worcester, Massachusetts is raking in a pension estimated at $414,000 — more than the US presidential salary.   

  Tyler Durden
  Tue, 03/14/2023 – 20:50

• Trump Publishing Private Letters From High-Profile Figures Including Kim Jong Un, Hillary Clinton, Oprah
  Trump Publishing Private Letters From High-Profile Figures Including Kim Jong Un, Hillary Clinton, Oprah

  Authored by Katabella Roberts via The Epoch Times (emphasis ours),

  Former President Donald Trump is set to release 150 private letters sent to him from an array of high-profile political figures and celebrities including former presidents Barack Obama and George W. Bush, and Oprah Winfrey.

  

  The letters will be published in Trump’s new book, titled “Letters to Trump,” which will be released on April 25, according to the book’s publisher, Winning Team Publishing.

  The publisher describes it as “a colorful photo book” that captures the “incredible, and oftentimes private correspondence, between President Donald J. Trump and some of the biggest names in history throughout the past 40 years.”

  “From President Richard Nixon to Princess Diana, and from Hillary Clinton, to Chairman Kim Jong Un, no book offers a glimpse into history quite like Letters to Trump,” the publisher stated on its official website.

  Axios reported that the book also includes letters from Ronald Reagan, Bill Clinton, Ted Kennedy, Mario Cuomo, Arnold Palmer, Jay Leno, Liza Minnelli, Regis Philbin, and more.

  Among them is a letter from television host Winfrey dating back to 2000 in which she says: “Too bad we’re not running for office. What a team!” according to the report.

  Trump on ‘Cunning’ Kim Jong Un

  Every letter published within the book has been personally handpicked by Trump and is accompanied by his original commentary as well as transcripts when handwriting is not completely clear, according to the publisher.

  The latest book marks the second official book to be released by the 45th president of the United States with Winning Team after the release of “Our Journey Together“—his first book since leaving office—in December 2021.

  Trump is the co-founder of Winning Team Publishing and his first book, which featured captioned photographs of his time in the White House, made $20 million in sales in the first two months, according to Axios.

  Speaking of the new book in a phone call with reporters from the Daily Mail and other publications on March 9, Trump explained, “We had lots of great letters from lots of great people and not so great people, to be honest with you.”

  “But they’re very famous people. And probably there’s never been such diversity as this in terms of people where the letters come from and who they come from,” Trump said.

  During the phone call, the former president also spoke of North Korean leader Kim Jong Un, whose correspondence with Trump is featured in the new book, describing him as “very smart, very cunning, very streetwise.”

  “We spoke a lot, actually, we spoke a lot and I think we had really, you know, a great relationship,” Trump said of the North Korean leader. “But I thought Kim Jong Un is a very, very interesting guy, and we had a good relationship. And I think he’s not a happy person right now with respect to the Biden administration.”

  Read more here…

  Tyler Durden
  Tue, 03/14/2023 – 20:30

• Uber, Lyft Shift Into Gear As California Court Rules Gig Workers Are Contractors
  Uber, Lyft Shift Into Gear As California Court Rules Gig Workers Are Contractors

  Shares of Uber Technologies Inc. and Lyft Inc. traded higher today following the decision of a California appeals court to uphold the law that categorizes gig workers as independent contractors rather than employees. 

  The 132-page decision, released on Monday evening, struck down a lower-court ruling that found Proposition 22, the state measure that lets companies classify workers as independent contractors, violated California’s constitution.

  This means the so-called gig economy business model is preserved for now. 

  Gig economy companies spent a whopping $200 million convincing drivers that Prop. 22 would provide them with more flexibility and some benefits. 

  “Across the state, drivers and couriers have said they are happy with Prop. 22, which affords them new benefits while preserving the unique flexibility of app-based work,” Tony West, Uber’s chief legal officer, told Bloomberg.

  “We’re pleased that the court respected the will of the people, and that Prop. 22 will remain in force,” West said. 

  Uber and Lyft shares were both up over 5% in the pre-market after the three-judge panel of the state appeals court ruled in favor of the companies, but LYFT gave back most of those gains as the day wore on with UBER outperforming. 

  

  According to Jefferies analysts, Lyft, DoorDash, and Uber have managed to evade a potential impact of $20 million to $170 million on their 2024 core earnings.

  “The ruling clears the path for Uber’s continued stock outperformance,” Jefferies analyst John Colantuoni wrote.

  The analysts anticipate that the decision will likely face a challenge in the California Supreme Court.

  Tyler Durden
  Tue, 03/14/2023 – 20:10

• Taibbi: In FBI Case, The First Amendment Takes Another Bizarre Hit
  Taibbi: In FBI Case, The First Amendment Takes Another Bizarre Hit

  Authored by Matt Taibbi via Racket News,

  Racket readers may recall that in November, shortly before the Twitter Files began, I ran an interview with Steve Friend, a onetime FBI agent who lost his career after blowing the whistle on the Bureau.

  

  Friend refused to participate in a bureaucratic scheme to put local agents across the country in charge of J6 cases that were really being run out of the Washington office, a plan that made one Washington-based case look like a national map full of domestic terror cases popping up everywhere. He also objected to heavy-handed tactics like the use of S.W.A.T. teams for a suspect communicating voluntarily through an attorney, and the questioning of people in connection with J6 in cases where the state had little to no evidence. From that story:

  Friend didn’t think the interview was warranted, and worried the feds showing up at someone’s door without cause “might do more harm than good” in a part of the country where government was unpopular already. He sucked it up and did the “knock and talk” anyway.

  “I said, ‘Hey, were you at the Capitol?’” Friend recalls. “And he said, ‘No, that was my son’s funeral that day. I wasn’t there.’”

  He shakes his head. “It hit me like a ton of bricks. I thought, I can’t believe I just made this guy relive that. And for what? Even if he’d admitted to being there, if he said, ‘I was there, I don’t wanna talk about it,’ I couldn’t even charge that.”

  But even though Friend had reservations about some of the cases, his main concern was procedural — that by playing bureaucratic games with who was running these investigations, and putting locals nominally in charge of cases where they were really in supporting roles, they put all of the court cases in jeopardy. “A lot of these guys are bad dudes, and they should go to jail,” he said, about the Oath Keepers. But if “we didn’t follow our rules… we set ourselves up to get crushed at trial,” adding, “I want to win.”

  A little over a week ago, the same Select Subcommittee on the Weaponization of Government that organized the Twitter Files hearings privately heard testimony from Steve and two other FBI whistleblowers. The Democratic Party response to Steve and his colleagues was eerily similar to tactics pulled out against myself and Mike Shellenberger:

  — Mike and I were not real journalists, they said, but “so-called journalists.” Steve and his fellow agents “are not, in fact, whistleblowers,” according to the minority report, and “do not meet the definition of a whistle-blower,” according to the New York Times.

  — I was told by Florida’s Debbie Wasserman-Schultz that “being a Republican witness certainly casts a cloud over your objectivity”; Democratic Party sources told the Times that Steve and fellow agents Garret O’Boyle and George Hill “have engaged in partisan conduct that calls into question their credibility”;

  — Democratic questioners in our case asked us about our opinions on Russian interference, and one said openly that failing to agree with them on that issue disqualified us from the “nuanced convo”; Steve, George, and Garrett were repeatedly quizzed about their attitudes toward various right-wing movements, suggesting that their opinions about these matters made them ineligible to offer procedural complaints. Friend, for instance, was asked about statements by “Three Percenters”:

  Q: (Quoting from flyer) “Remember this, it comes straight from our Declaration of Independence, that whenever any form ofgovernment becomes destructive, it is the right and duty of the people to alter or abolish it. That is why you are here. For massive change to occurmassive action must be taken. Patriots, we are the lifeblood of this great nation, and it’s time we prove that.” Do you have an opinion about this statement?

  Friend: It seems like First Amendment-protected activity.

  — Michael and I were repeatedly quizzed about money we may have made during the Twitter Files period, with Wasserman-Schultz going so far as to harangue my about my Twitter followers tripling and to ask us if we were paid for our testimony; Committee Democrats accused Friend of having “profited, and is profiting, from making his allegations about the FBI public”;

  — Congressman Colin Allred told me to “take off my tinfoil hat”; the three FBI agents were accused of “conspiratorial social media posts,” as the Times put it.

  — Allred also blasted me for criticizing the “national security agencies” and told me to go home and “grapple” with the reality that the “very rights you think they’re trying to undermine, they may be trying to protect”; Friend and his fellow agents were accused of aiding in a “vendetta against the FBI”;

  — Shellenberger and I were accused of being stooges of Elon Musk; Friend and the agents, agents of Kash Patel.

  But the most outrageous portion of the Democratic Party’s report came in a section claiming that, because the agents were not really whistleblowers, and therefore really just expressing their opinion, they were not covered. “No law,” they wrote, “protects witnesses who speak to congress under these circumstances.”

  

  The Whistleblower Protection Act specifically and the First Amendment generally come to mind, but not to this Committee office.

  The style of the new anti-speech Democrat is clear: define all government critics as lacking standing to criticize, impugn their prior opinions and associations, imply that all their beliefs are conspiracy theory, define their lack of faith in the FBI’s judgment as treasonous, and declare their motivation to be financial. Lastly, when they invoke common constitutional rights, make a note that their activities exist in an uncovered carve-out.

  This is the playbook, and we all better get used to it.

  Tyler Durden
  Tue, 03/14/2023 – 19:50

• DeSantis Admin Yanks Hyatt Miami Liquor License For Hosting "Drag Queen Christmas" With Kids Present
  DeSantis Admin Yanks Hyatt Miami Liquor License For Hosting “Drag Queen Christmas” With Kids Present

  Florida Governor Ron DeSantis’ administration is revoking the Hyatt Regency Miami’s alcohol license after it hosted “A Drag Queen Christmas” with children present in the audience.

  

  In a 17-page complaint filed Tuesday by the state’s Department of Business and Professional Regulation, the state claims that the Hyatt’s James L. Knight Center violated several laws, including a prohibition of “lascivious exhibition” in front of people younger than 16, according to Florida’s Voice.

  According to the complaint the “acts of simulated sexual activity, and lewd, vulgar, and indecent displays” included:

  • Performers forcibly penetrating or rubbing exposed prosthetic female breasts against faces of audience members

  • Intentionally exposing performers’ prosthetic female breasts and genitalia to the audience

  • Intentionally exposing performers’ buttocks to the audience

  • Simulating masturbation through performers’ digitally penetrating prosthetic female genital

  • Graphic depictions of childbirth and/or abortion

  Libs of TikTok first reported on the investigation. The show named “A Drag Queen Christmas” was held in Fort Lauderdale on Dec. 26. Other shows are scheduled for Miami, Orlando, and Clearwater.#TransAgenda #Trans #Agenda21 #Agenda2030 pic.twitter.com/5EsnDtZ0fU

  — SmlPplAgstBigGov (@SPABG2) December 27, 2022

  DeSantis supported the move.

  “Sexually explicit content is not appropriate to display to children and doing so violates Florida law,” his press secretary Bryan Griffin told Insider. “Governor DeSantis stands up for the innocence of children in the classroom and throughout Florida.”

  WATCH! @AGAshleyMoody asked about Drag Queen Christmas on Fox News. Moody is heading the investigation into minors being exposed to sexual material at the shows in Ft Lauderdale, Miami and Orlando. pic.twitter.com/wFJiYtNCRs

  — Chris Nelson 🇺🇸 🏝 (@ReOpenChris) December 30, 2022

  Hyatt Regency Miami will be allowed to continue selling alcoholic beverages until the department makes a final decision, and it has 21 days to request a hearing, according to department spokeswoman Beth Pannell in a statement to Insider.

  Regulators had warned the facility to change how it marketed the show before it went live, according to a copy of the letter included in the complaint. The letter accused the marketers of putting on a performance that constitutes “public nuisances, lewd activity, and disorderly conduct” when minors are present.

  The impetus of the letter was a screenshot where tickets were being sold that read “all ages welcome.” The department warned the venue not to admit minors or otherwise face penalties, including an alcohol license revocal. -Insider

  Last year DeSantis signed a bill into law prohibiting schools from including gender and sexual orientation from being taught in classrooms up to the third grade. 

  Tyler Durden
  Tue, 03/14/2023 – 19:30

• There's No Such Thing As 'Healthy Obesity'
  There’s No Such Thing As ‘Healthy Obesity’

  Authored by Ross Pomeroy via RealClear Wire,

  Conventional wisdom, along with boatloads of scientific evidence, point to obesity being universally unhealthy, leading to diabetes, cancer, heart disease, and many more problems. But in recent years, that conventional wisdom has been challenged by a “U.”

  

  The obesity paradox

  That “U” appeared on graphs charting the link between body-mass index — a common but imperfect gauge of whether or not someone’s weight is healthy, calculated simply by dividing their mass by the square of their body height in meters — and their risk of death. Numerous epidemiological studies have found that people in the “overweight” category (BMI 25-30) surprisingly have the lowest mortality risk, while those categorized as “obese” (30-35) have little or no increased risk over the “healthy” (18.5-25). At the extreme ends of the BMI spectrum, both the “underweight” (less than 18.5) and the extremely obese (35+) have a greatly increased risk of death. Furthermore, numerous studies also have suggested that obesity might lower the risk of death for older people and patients with various chronic diseases.

  Considering what we know about the health pitfalls of increased body fat, one would expect a mostly straight line of rising mortality risk as one goes from a BMI of healthy to obese. That’s why the “U-shaped” mortality curve has been dubbed the “obesity paradox.”

  But in recent years, that paradox, and the studies that created it, have come under fire. Critics chiefly contend that BMI is a flawed way to determine whether someone has obesity. That’s because it does not measure the composition of one’s body mass — that is, how much is fat and how much is muscle. Nor does BMI measure where fat is located, which can make a big difference. Visceral fat jammed among internal organs is much worse than subcutaneous fat stored just beneath the skin. For example, an extremely fit and muscular individual could easily make it into the obese BMI category. At the same time, a “skinny” individual with a lot of body fat nestled dangerously around their mid-section could be categorized as “healthy.”

  Why has BMI been so frequently used in epidemiological studies? Because it’s convenient, readily calculated based on self report. On the other hand, measuring body fat requires subjects to take a trip to a lab or to conduct the measurement on themselves, which can be quite difficult for a layperson to do accurately.

  Replace BMI with body fat

  In a review article published in 2020, researchers from Sapienza University in Italy noted that excess body fat should be used to measure obesity instead of BMI.

  When a team of researchers adjusted BMI to take muscle mass into account back in 2018, then associated this corrected measure with mortality risk, they found that the “U” mostly transformed into a straight line. Extremely obese individuals went from having only a marginally increased risk of death compared to healthy individuals to about a 70% increased risk.

  More recently, Ryan Masters, an associate professor of sociology at the University of Colorado, tried to resolve the obesity paradox by taking more confounding variables into account. He examined nearly 40 years of data from almost 18,000 subjects, and he not only considered subjects’ distribution of body fat, he also tallied the amount of time that they spent at a high or low BMI.

  “I would argue that we have been artificially inflating the mortality risk in the low-BMI category by including those who had been high BMI and had just lost weight recently,” he explained in a statement. “The health and mortality consequences of high BMI are not like a light switch,” he added. “There’s an expanding body of work suggesting that the consequences are duration-dependent.”

  Obesity paradox debunked

  After accounting for the potential biases in the data, Masters found that obesity boosts one’s risk of death by as much as 91%, vastly more than previous studies suggested. The U-shaped curve disappeared, and the paradox along with it. He further estimated that about 1 in 6 U.S. deaths are related to excess weight.

  “Paradoxes should be met with skepticism,” a pair of public health experts wrote in a 2017 op-ed in the International Journal of Obesity. “Counterintuitive results should be discussed with colleagues and collaborators with different areas of expertise. The only ‘paradox’ we can see here is why researchers continue to claim to have evidence of a paradox without careful consideration of potential methodological explanations.”

  This article was first published at Big Think.

  Tyler Durden
  Tue, 03/14/2023 – 19:10

• Putin: "Complete Nonsense" That Anyone Other Than State Actor Behind Pipeline Explosions
  Putin: “Complete Nonsense” That Anyone Other Than State Actor Behind Pipeline Explosions

  “I am certain that this is complete nonsense,” President Vladimir Putin said in fresh statements to Russian media on Tuesday, making rare detailed remarks concerning the sabotage of the Nord Stream pipelines. He was referencing the latest narrative out of the West which claims a mysterious “pro-Ukrainian group” was behind the pipeline bombings.

  Last Tuesday The New York Times published a story making the claim, and quickly an avalanche of follow-up stories have appeared across Western media asserting a similar narrative. Putin says that these stories are intended to run cover in order to hide a “state” actor. He stressed that only specialists backed by a government which possesses “certain technologies” could be capable of such a complex, deep underwater operation.

  

  Putin’s full statement given while on a visit to an aircraft plant in Russia’s Buryatia republic region is as follows, per state media translation: “I’m sure this is complete nonsense. An explosion of this kind – of such power, at such depth, can only be carried out by specialists, and supported by the entire power of a state, possessing certain technologies.”

  The Western media narrative of a rogue “pro-Ukrainian” unit being behind the sabotage op began emerging almost a month after Pulitzer Prize winning investigative journalist Seymour Hersh published his bombshell report which said President Biden ordered the attack on the natural gas pipelines. It detailed the CIA’s role in conjunction with an elite US Navy deep sea diving team as well, and with the help of Norwegian intelligence.

  Putin in his new remarks also pointed the finger at the United States, but stopped short of a direct accusation. According to a translated summary of his words in Sputnik: 

  He also suggested that one should probably consider who would be interested in the destruction of Nord Stream, noting that, theoretically, the United States could have been one such entity as such act of sabotage would help them cut the flow of Russian gas to the European market so that the US could supply greater amount of its own, much more expensive liquefied natural gas there.

  The Russian president added that, while repairing the damaged Nord Stream pipelines would be no mean feat, it probably could be done, though such undertaking would require time, money and new technologies.

  The Russian leader also weighed on on the possibility of a repair and the question of future operability:

  He noted, however, that the Nord Stream project would have a future only if Russia’s European partners were to remember about their own national interest, as it would seem that, currently, they are doing whatever it is they are told “from across the ocean.”

  Putin said that claims that the attack on Nord Stream was organized by some Ukrainian activists were nonsense. pic.twitter.com/KnFRrVBorj

  — Anton Gerashchenko (@Gerashchenko_en) March 14, 2023

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

  Following Hersh’s report, US officials and establishment media sought to portray the famed reporter as a ‘conspiracy theorist’ who is far past the prime of his career. This despite Hersh’s track record of blockbuster investigative journalism and his breaking major stories spanning decades speaking. It remains that he’s among the most celebrated journalists in American history who was proven right time and again. 

  Tyler Durden
  Tue, 03/14/2023 – 18:50

• A Mismatch Of Short And Long-Term Interest
  A Mismatch Of Short And Long-Term Interest

  Authored by Kane McGukin via The Mesh Point,

  The relationship between Silicon Valley Bank, our attention spans, and our money.

  Investing requires the ability to manage funds such that you are able to cover both your short-term needs and your long-term wants + needs. The tricky part is there’s no one perfect way to do it.

  

  The case of Silicon Valley Bank and its failure/takeover is a great example of what happens when there is a mismatch between your short and long interests; you go bust!

  • What’s the real issue at hand?

  • What’s the root cause?

  • What’s the signal in all the noise of why and how it happens?

  To me, the Silvergate unwind, Silicon Valley, and Signature Bank takeovers this past week and weekend are a microcosm of what’s wrong with society at the moment. It’s a signal that something is off.

  It’s a warning sign that there is a greater need to pay attention. To seek the facts and not take the easy route. Pursue depth over quickness. Long-form over short and sweet.

  It’s a tell-tale sign that what’s really wrong is a lack of truth throughout the entire system. There’s a need for proof of reserves.

  Societally we suffer the same fate as Silicon Valley. There’s a mismatch between our interests. We’re watching a heavy pursuit of short-term pleasures (Tiktok) over our long-term interest (productivity) while seeking the easiest way to get things as instant as possible. There’s entirely too much focus on the short term without any real thought as to the ramifications of our decisions over the long run.

  That’s the portfolio mistake that SIVB made. That’s the life mistake it appears most are making. If you invest in bonds with low yields for immediate gratification and ignore that when rates rise you won’t be able to satisfy investor demands. Then deposits leave. If you invest in instant gratification because it feels good, you won’t be able to fund the future you *expect* to have if things *unexpectedly* change.

  The case of SIVB is a great example. One we’ve seen many times over. In an integrated world, money moves fast. So, if your interest is out of line and focused too far in the near term or too far in the long term, then you very likely won’t be ready for the challenges that are sure to arise.

  Especially, if you don’t have a plan.

  *  *  *

  Subscribe to the Bombthrower mailing list to get these posts as they come out, and follow Kane McGukin via his Substack and Twitter.

  Tyler Durden
  Tue, 03/14/2023 – 18:30

• Treasury To Give Biden Family 'Suspicious Activity' Banking Reports To GOP Investigators
  Treasury To Give Biden Family ‘Suspicious Activity’ Banking Reports To GOP Investigators

  The Treasury Department is finally complying with a request to release suspicious activity reports (SARs) generated in connection with the Biden family and their associates’ business transactions.

  

  US banks have filed over 150 SARs from Hunter and President Joe Biden’s brother, James, which included “large” amounts of money tagged for further review by the Treasury. According to a 2020 report, SARs “often contain evidence of potential criminal activities, such as money laundering and fraud.”

  In December, the Treasury denied Congressional investigators access to the SARs.

  “Most Americans have never heard the term ‘Suspicious Activity Reports.’ These are actual reports that financial institutions file with the Treasury Department when they see suspicious activity,” House Judiciary Committee Chairman Jim Jordan told Epoch TV’s Joshua Phillip in an interview for the “Newsmakers” program at the time.

  “Typically, it’s money laundering type of activity, so most Americans don’t get these. Or if they do, there is a good reason for it. But there are 150 of them on Hunter Biden and Jim Biden, the President’s brother, and that to me is a big concern,” Jordan said.

  This is just the tip of the iceberg.

  Hunter & the Biden family have peddled access to enrich themselves, racking up 150 SARs for shady deals.

  Even worse, we know Joe was involved in selling U.S. natural gas to China.

  We’ll keep pushing for transparency & accountability. https://t.co/pSc00qUMso

  — Oversight Committee (@GOPoversight) October 6, 2022

  https://platform.twitter.com/widgets.jsHouse Oversight Committee Chair James Comer (R-KY) demanded the records from the Treasury on January 11, however the Treasury denied the request – citing “improper disclosure” of relevant information which could hinder the Biden administration’s ability to “conduct of law enforcement, intelligence, and national security activities,” Breitbart reports.

  The Treasury’s compliance comes after the committee’s probe has so far met resistance from Hunter Biden and from some of his associates, such as Serbian politician Vuk Jeremić and Hunter’s art dealer.

  While the probe has met resistance, the committee has found a few key individuals willing to comply. The Biden family’s former top financial lieutenant Eric Schwerin is expected to “soon” provide requested documents to the committee. Schwerin, who shared bank accounts with Joe Biden and was dubbed the family’s “moneyman,” was also the president of Rosemont Seneca Partners, a fund created by Hunter Biden and several​ associates that spawned business deals in Russia, Ukraine, China, and Romania.

  In addition, Joe Biden’s former executive assistant Kathy Chung is scheduled on April 4 to sit for a requested transcribed interview with the committee’s investigation into the Biden family business and Joe Biden’s classified document scandal. Chung was hired as Joe Biden’s assistant when he was vice president after a recommendation from Hunter Biden. Chung appears in numerous email threads on Hunter’s “laptop from hell.” -Breitbart

  “It’s As Bad As We Thought”

  On Sunday, Comer told Fox News‘ Maria Bartiromo on “Sunday Morning Futures” that money from the Chinese Communist Party (CCP) flowed to the Biden family.

  “It’s as bad as we thought… Since we’ve last spoken we have bank records in hand.  We have individuals who are working with our committee,” said Comer.

  “In the last two weeks we’ve met with either these individuals personally or with their attorneys.  And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents  We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party.“

  Watch:

  Biden family members attempted to sell access & influence around the world.@GOPoversight has communicated with multiple witnesses & continues to follow the Biden money trail.

  We will be transparent & provide the facts for the American people. @MariaBartiromo @SundayFutures pic.twitter.com/EYfQn8WEXB

  — Rep. James Comer (@RepJamesComer) March 12, 2023

  Suspicious activities indeed…

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

  Tyler Durden
  Tue, 03/14/2023 – 18:10

• Why Not Let Banks Fail?
  Why Not Let Banks Fail?

  Authored by Jacob Hornberger via The Future of Freedom Foundation,

  Imagine that for the last 100 years, the federal government’s policy was to bail out every business that was in danger of going under. The policy would consist of shoveling large amounts of subsidies into the business in order to help it remain in business. If, however, the business failed anyway, the federal government would pay a large sum of money to the owners of the business as well as to the business’s employees to enable them to transition to other lines of work.

  

  Now, for a true-blue socialist, this would sound like a tremendously fine idea.

  It would conjure up images of Medicare for All, the socialist healthcare system by which the federal government would provide or guarantee healthcare services for everyone — for “free.”

  In actuality, however, it would be an enormously bad idea, which I think everyone, except true-blue socialists, would instinctively realize. 

  After all, where would the federal government get all that money to cover all the businesses that fail on a regular basis. Yep. Taxation! The feds would have to be taxing the American people — big time — to keep up with providing subsidies to all those failing businesses. It would’t be long before Americans found themselves paying income taxes totaling maybe 90 percent or more of their incomes to provide all the money to fund this giant socialist scheme.

  Moreover, all that free money would encourage all sorts of inefficient businesses. Everybody would be opening up businesses knowing that if they failed, the government would be there to bail them out. Obviously, that would only exacerbate the taxation problem.

  The United States now has an economic system in which there is massive governmental intervention, both with respect to large welfare-state programs (e.g., Social Security and Medicare) and economic regulation. Nonetheless, there is still an instinctive commitment to the principles of a genuine free-market economy — that is, one in which economic enterprise is free of government control and intervention — one in which people are free to keep everything they earn, do what they want with their own money, and freely enter into economic transactions with others. That was America’s founding economic system. 

  Everyone knows that in a free market, there are no guarantees of success. Life entails risk. Some people take the road of high risk. Other try to play it perfectly safe. Most people live their lives somewhere in between.

  Many people invest money in the stock market. When they do so, they are buying stock in a particular company. They know that the value of that stock can go up and it can go down. They also know that the company could even go under, which could entail a total loss of their investment.

  When that happens, the government doesn’t bail out the investor, even if the investor has lost his entire life’s savings. Moreover, no one cries out for the government to do so. It has become part of our economic culture that people invest their money at their own risk. If people don’t want to risk losing their money in the stock market, they should stay out of the stock market. 

  Obviously, this no-bail-out policy should cause people to be cautious about which companies to invest in. Since the government isn’t going to bail out investor, it behooves people to do research on companies or to rely on trusted financial advisors who have done their homework on companies. This leads to a more enlightened citizenry and more efficient businesses.

  Why not treat banks the same way?

  If people put their money in a bank that fails, why should they be treated any differently from people who invest their money in a company that fails? If they choose the wrong bank, why should taxpayers be forced to cover their bad or wrong decision? Why not simply let the bank go under, just as we let companies go under? 

  In a genuine free market, people would be much more careful about which banks to put their money into. Like with the purchase of stocks, they would be more likely to do research on banks or rely on trusted financial advisors who do that for a living.

  People who wished to take bigger risks for a higher return would select banks that were riskier than others. People who wished to play it safe would select more secure banks with a lower return. 

  Under the bank system in which we live today, the government “insures” deposits in excess of $250,000. Yet, the government doesn’t always follow this policy. As we see with Silicon Valley Bank and Signature Bank, the government sometimes covers all the deposits — including those that exceed $250,000 — in the event of a bank failure. Moreover, oftentimes the failed bank is simply absorbed into the banking system rather than simply permitted to go out of existence.

  Obviously, this system doesn’t encourage due diligence on the part of depositors.

  Why should anyone research the financial condition of a bank when the government is going to cover deposits if the bank goes under? Why should anyone worry about buying stock in a bank if the government is going to bail out the bank if it fails? 

  Over time, the entire banking system inevitably becomes weaker and more unstable. At first, individual banks fail, which the government is able to cover. Ultimately, however, this type of system inevitably leads in the direction of an industry-wide banking collapse, one that the government lacks the money to cover, unless it taxes the citizenry an enormously large percentage of their income. 

  That’s, in fact, why the government continues raising the amount of its deposit “insurance” and why it continues to bail out depositors and banks that fail. The government wants to assure depositors that everything is “okay” with its socialist banking system, when, in fact, everything is not “okay” with its socialist banking system.

  Among the biggest mistakes America has ever made was to socialize the banking system. We should get government out of the banking business and restore our heritage of free markets to this sector of the economy. Separating banking and the state is the key to a strong and viable banking system. 

  Tyler Durden
  Tue, 03/14/2023 – 17:50

Digest powered by RSS Digest

• 10,000 Dutch Farmers Protest Govt's Crippling Nitrogen Emissions Target In The Hague
  10,000 Dutch Farmers Protest Govt’s Crippling Nitrogen Emissions Target In The Hague

  Authored by Thomas Brooke via Remix News,

  Protesters claim the Dutch government is lying about the extent of the emissions problem in order to grab privately owned land…

  

  Thousands of Dutch farmers protested on Saturday against the government’s policies to reduce nitrogen emissions, warning they will put farms out of business and affect food production.

  Hundreds of tractors from across the Netherlands could be seen driving to the event in The Hague ahead of regional elections this week, and more than 10,000 farmers were in attendance, according to the Reuters news agency.

  Protesters accused the Dutch government of forcing farmers off of privately owned land in order to appease Brussels, and carried banners reading “No farmers, no food” and “There is no nitrogen ‘problem.’”

  Tens of thousands of people turned up for the Dutch farmers protest.

  Stand for freedom. pic.twitter.com/lAUW1QuqhV

  — PeterSweden (@PeterSweden7) March 11, 2023

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

  “We are fighting against a corrupt and unjust government,” Eva Vlaardingerbroek, a prominent campaigner in defense of the farmers, told attendees. She spoke of a government that “drives our farmers from their land” and which has “turned on its own population.”

  “For centuries, our farmers have produced food for millions of people worldwide. And instead of what those liars in The Hague claim, they have done so in a responsible and sustainable way.”

  🇳🇱Our farmers are fighting against the worst kind of injustice: a government that has turned on its own people.

  The government created a lie to rob our farmers of their land. But we won’t let it happen. Our #DutchFarmers are an example to the world.

  My speech with 🇬🇧 subtitles. pic.twitter.com/QYiFbkR2zM

  — Eva Vlaardingerbroek (@EvaVlaar) March 11, 2023

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

  “But our cabinet doesn’t care about nature. They have simply created a lie to steal our farmers’ land,” she added.

  Prime Minister Mark Rutte’s administration has vowed to take radical action to meet its ambitious target of halving the country’s nitrogen emissions by 2030, and has identified the country’s large agriculture sector as being the main culprit due to its large livestock count and use of fertilizers.

  Last year, the government announced plans to reduce livestock numbers by a third, while farmers have also been told their land could be subject to compulsory buyouts.

  Agricultural workers have staged several demonstrations against the government policy, blocking motorways and supermarket distribution centers in mass protests last year.

  “These reductions are so severe that those rural communities will be totally devastated economically,” said Sander van Diepen, a spokesperson for the Dutch agricultural and horticultural association, LTO Nederland, in June last year.

  Henk Staghouwer, the former Dutch agriculture minister appointed to see through the plans by Mark Rutte, resigned in September last year after a tumultuous summer fraught with mass demonstrations, admitting that upon reflection he was not “the right person to oversee the tasks in front of me.”

  Regional elections for the Dutch Senate are scheduled to take place on March 15.

  Tyler Durden
  Tue, 03/14/2023 – 02:00

• Mike Wilson Flips Back To Bearish, Says "Sell Any Bounces Until We Make New Bear Market Lows"
  Mike Wilson Flips Back To Bearish, Says “Sell Any Bounces Until We Make New Bear Market Lows”

  A lot has changed since last Monday; in fact pretty much everything was flipped on its head after the two sudden, shocking bank failures over the past 72 hours – events which offered a sideways excuse to those who were bullishly biased – if only for tactical reasons – heading into last week, even though stocks dumped well before the small bank contagion, courtesy of Powell’s Congressional testimony which came out blisteringly hot.

  One such “tactical” bull was Morgan Stanley’s Mike Wilson who after 9 consecutive weeks of beating the bearish drum took a stab at turning bullish, telling the bank’s clients that “one will have to take their own view” of what the fundamentals and technicals suggest (after calling for a sharp drop in stocks for nearly three months which never materialized) and adding that “we could see further upside if the US dollar and interest rates continue their fall from Friday with next resistance for the S&P 500 at 4150 under such conditions.”

  

  Well, we got both a weaker dollar and lower rates – and in spades – in the past few days, but of course there was a catalyst – namely catastrophic contagion in the regional banking sector after SIVB and SBNY both collapsed, sending shockwaves across the market.

  In any case, after the recent shocking events, Wilson has quickly purged his brief flirtation with “tactical” bullishness, and since he no longer expects stocks to rise (which some sarcastically said was the catalyst why stocks dumped) is once again a die hard member of the “doom and gloom” camp – curiously even as the Fed hiking cycle now seems to lie in ruins with the 2Y absolutely clobbered in the past 3 days at the fastest pace since 1987’s Black Monday.

  In his latest Weekly Warm-up note, the Morgan Stanley strategist writes that “with the unwind of a major bank (SVB) last week and now another (SBNY) over the weekend, it’s clear that the impacts of the Fed’s policy tightening are being felt.” And while the Fed’s intervention to backstop all uninsured deposits at these troubled institutions should help to prevent any further bank runs according to Wilson, he thinks “it does little to change the bigger picture of slowing growth that is already upon us” which of course is ironic because now – more than ever – the Fed is that much closer to capitulating on its hawkishness, and the moment it does so will send stocks limit up.

  For Wilson, however, that is not something to lose sleep over, and he writes that “the cost of deposits has been on the rise for months and the events of last week are likely to put further upward pressure on those costs. Furthermore, Senior Loan Officer Surveys on lending standards have tightened considerably over the past 6 months and should only tighten further.”

  As a result, he expects an “Equity Risk Premium Re-rating… As we have noted for months, we believe the rally from October was always just another bear market rally that would ultimately fade. The end of bear markets are typically punctuated by an event that accelerates the market’s pricing of the true downside in earnings.”

  He then once again makes the claim that his view on earnings is still “very much out of consensus” even though in reality there is nothing that is more consensus than an earnings recession, for Wilson however that is not the case and he believes that it will get “properly priced via the Equity Risk Premium which has remained well below fair value. If such a period of adjustment has begun, one should expect at least a 200bps rise in the ERP from the recent lows of 150bps.”

  This, again, as has been the case for the past 3 months, is the basis for his bearish bias, and he writes that “such a rise [in the ERP] would take the NTM P/E to 13-15x depending on how Treasury yields (and the Fed) react to this growth scare. That equates to significant downside from current levels.”

  Digging a little deeper into his latest note, Wilson explains what – in his view – the collapse of the two banks means for markets:

  First, we would remind readers that Fed policy works with long and variable lags.

  Second, the pace of Fed tightening over the past year is unprecedented when one considers that the Fed has been engaged in aggressive quantitative tightening while raising the Fed Funds Rate by almost 500bps.

  

  Third, the focus on “market based” measures of Financial Conditions may have lulled both investors and the Fed itself into thinking policy tightening had not yet gone far enough even though more traditional measures like the yield curve have been flashing warnings for the past 6+months. In fact, since mid October of last year, the market based financial conditions measures actually loosened considerably until the upward surprise on January payrolls was released. Since then, financial conditions have tightened again as equities and other risk markets sold off. However, at no point during this time did the trusty yield curve flinch. Instead, it has steadily inverted further, closing last week near its lowest point of the cycle at -120bps.

  

  Wilson next points out one of the key catalysts behind the bank failures, namely that for the longest time banks failed to pass through higher rates to depositors (especially giant banks like JPM), however that changed recently and the small banks were the first to get whacked, to wit:

  Over the past year, bank funding costs have not kept pace with the higher Fed Funds Rate allowing banks to create credit at profitable NIMs. In short, most banks have been paying well below market rates because depositors have been slow to realize they can get a much better rate elsewhere. But, that has changed more recently with depositors deciding to pull their money from traditional banks and putting it into higher yielding securities like money markets, T-Bills and the like. We expect that trend to continue unless banks decide to raise the rate they pay depositors. That means lower profits and likely lower loan supply.

  

  Said deposit flight coupled with the fact that loan standards have been tightening sharply tightening as per the latest SLOOS report, makes Wilson believe that tightening “is likely to become even more prevalent given last week’s events and that poses headwinds for money supply, and consequently, economic and earnings growth.” In other words, the MS strategist believes that “it’s now harder to hold the view that growth will prove to be ok in the face of the fastest Fed tightening cycle in modern times. Secondarily, the margin deterioration we have been discussing for months is still getting worse. Any top line short fall will only exacerbate this negative operating leverage dynamic, in our view.”

  Wilson’s bottom line is that Fed policy works with long and variable lags: “many of the key variables used by the Fed and investors to judge whether Fed policy changes are having their desired effect are backward looking–i.e., employment and inflation metrics. Forward looking survey data are often much better at telling us what to expect rather than what is currently happening. On that score, the picture is pessimistic about where growth is likely headed, especially for earnings. Rather than a random or idiosyncratic shock, we view last week’s events as just one more supporting factor for our negative earnings growth outlook–i.e. it only exacerbates key headwinds like credit/money supply growth. In short, Fed policy is starting to bite, and it’s unlikely to reverse even if the Fed were to pause its rate hikes or quantitative tightening–i.e., the die is cast for further earnings disappointments relative to consensus and company expectations.”

  His conclusion:

  We suggest selling any bounces on a government intervention to quell the immediate liquidity crisis at SVB and other institutions until we make new bear market lows, at a minimum. Furthermore, we do think that tighter credit availability from banks will weigh on small cap companies more significantly, and last week’s underperformance by the small cap indices supports that view and further throws cold water on the new bull market narrative we have been hearing from others over the past few months.

  While we actually agree – for once – with Wilson that Fed policy is starting to bite – and how can it not when the “Credit Event” that always accompanies rate hikes which we have been warning about since early 2022 finally kicked in…

  Remember, every Fed tightening cycle ends in disaster and then, much more Fed easing pic.twitter.com/zX7Dur8nLG

  — zerohedge (@zerohedge) January 5, 2022

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

  … and it is always credit events that force the Fed to end its tightening cycle, where we disagree is his argument that “even if the Fed were to pause its rate hikes or quantitative tightening” which it will in just over a week according to Nomura, “the die is cast for further earnings disappointments relative to consensus and company expectations.”

  Yes, the die may be cast for the economy and company earnings, but when it comes to the markets, investors will now sniff out not only the pause but the pivot and the rate cuts – something they are already doing by pricing in 65bps of rate cuts by September, a whopping collapse from 110bps of rate hikes as recently as last Thursday.

  

  The point being: we agree with Wilson that it’s about to get worse – in a deflationary sense – for the broader economy, and thus earnings, where we disagree is in the market’s reaction because while earnings may collapse and growth may collapse, the Fed will react much more promptly this time now that banks are failing, and will be willing to ignore some latent inflation if it means banking sector stability. And once the Fed capitulates, hold on to your hats as 16x PE are repriced to 20x or more as the muscle memory from the Covid shock kicks in.

  And while we see Mike Wilson’s point, we have long been much more vocal supporters of the (much more accurate) views and predictions made by that other Michael – BofA’s Hartnett – who once again hit the bullseye with his preview of recent events, first warning on Feb 18 that “Fed Will Tighten Untill Something Breaks… And Stocks Will Swoon To 3,800 By March 8” which was absolutely spot on…

  Feb 18: Hartnett: “Fed Will Tighten Untill Something Breaks… And Stocks Will Swoon To 3,800 By March 8”

  off by 2 dayshttps://t.co/Aj3JWhcwjo

  — zerohedge (@zerohedge) March 13, 2023

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

  … and which he followed up by saying that ‘”The End Of The Bear Market Will Coincide With A Credit Event””…

  Michael Hartnett last week:

  “The End Of The Bear Market Will Coincide With A Credit Event”https://t.co/DnVJbiIvkV

  — zerohedge (@zerohedge) March 10, 2023

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

  … a credit event the likes of which we just had, and now the only missing link is for the Fed to admit as much and restart  the only game in the centrally-planned town.

  Michael Wilson’s full note can be found here.

  Tyler Durden
  Mon, 03/13/2023 – 23:57

• Silicon Valley Bank Crisis: The Liquidity Crunch We Predicted Has Now Begun
  Silicon Valley Bank Crisis: The Liquidity Crunch We Predicted Has Now Begun

  Authored by Brandon Smith via Alt-Market.us

  There has been an avalanche of information and numerous theories circulating the past few days about the fate of a bank in California know as SVB (Silicon Valley Bank). SVB was the 16^th largest bank in the US until it abruptly failed and went into insolvency on March 10^th. The impetus for the collapse of the bank is tied to a $2 billion liquidity loss on bond sales which caused the institution’s stock value to plummet over 60%, triggering a bank run by customers fearful of losing some or most of their deposits.

  There are many fine articles out there covering the details of the SVB situation, but what I want to talk about more is the root of it all. The bank’s shortfalls are not really the cause of the crisis, they are a symptom of a wider liquidity drought that I predicted here at Alt-Market months ago, including the timing of the event.

  First, though, let’s discuss the core issue, which is fiscal tightening and the Federal Reserve. In my article ‘The Fed’s Catch-22 Taper Is A Weapon, Not A Policy Error’, published in December of 2021, I noted that the Fed was on a clear path towards tightening into economic weakness, very similar to what they did in the early 1980s during the stagflation era and also somewhat similar to what they did at the onset of the Great Depression. Former Fed Chairman Ben Bernanke even openly admitted that the Fed caused the depression to spiral out of control due to their tightening policies.

  In that same article I discussed the “yield curve” being a red flag for an incoming crisis:

  “…The central bank is the largest investor in US bonds. If the Fed raises interest rates into weakness and tapers asset purchases, then we may see a repeat of 2018 when the yield curve started to flatten. This means that short term treasury bonds will end up with the same yield as long term bonds and investment in long term bonds will fall.”

  As of this past week the yield curve has been inverted, signaling a potential liquidity crunch. Both Jerome Powell (Fed Charman) and Janet Yellen (Treasury Secretary) have indicated that tightening policies will continue and that reducing inflation to 2% is the goal. Given the many trillions of dollars the Fed has pumped into the financial system in the past decade as well as the overall weakness of general economy, it would not take much QT to crush credit markets and by extension stock markets.

  As I also noted in 2021:

  “We are now at that stage again where price inflation tied to money printing is clashing with the stock market’s complete reliance on stimulus to stay afloat. There are some that continue to claim the Fed will never sacrifice the markets by tapering. I say the Fed does not actually care, it is only waiting for the right time to pull the plug on the US economy.”

  But is that time now?  I expanded on this analysis in my article ‘Major Economic Contraction Coming In 2023 – Followed By Even More Inflation’, published in December of 2022. I noted that:

  “This is the situation we are currently in today as 2022 comes to a close. The Fed is in the midst of a rather aggressive rate hike program in a “fight” against the stagflationary crisis that they created through years of fiat stimulus measures. The problem is that the higher interest rates are not bringing prices down, nor are they really slowing stock market speculation. Easy money has been too entrenched for far too long, which means a hard landing is the most likely scenario.”

  I continued:

  “In the early 2000s the Fed had been engaged in artificially low interest rates which inflated the housing and derivatives bubble. In 2004, they shifted into a tightening process. Rates in 2004 were at 1% and by 2006 they rose to over 5%. This is when cracks began to appear in the credit structure, with 4.5% – 5.5% being the magic cutoff point before debt became too expensive for the system to continue the charade. By 2007/2008 the nation witnessed an exponential implosion of credit…”

  Finally, I made my prediction for March/April of 2023:

  “Since nothing was actually fixed by the Fed back then, I will continue to use the 5% funds rate as a marker for when we will see another major contraction…The 1% excise tax added on top of a 5% Fed funds rate creates a 6% millstone on any money borrowed to finance future buybacks. This cost is going to be far too high and buybacks will falter. Meaning, stock markets will also stop, and drop. It will likely take two or three months before the tax and the rate hikes create a visible effect on markets. This would put our time frame for contraction around March or April of 2023.”

  We are now in the middle of March and it appears that the first signs of liquidity crisis are bubbling to the surface with the insolvency of SVB and the shuttering of another institution in New York called Signature Bank.

  Everything is tied back to liquidity. With higher rates, banks are hard-pressed to borrow from the Fed and companies are hard-pressed to borrow from banks. This means companies that were hiding financial weakness and exposure to bad investments using easy credit no longer have that option. They won’t be able to artificially support operations that are not profitable, they will have to abandon stock buybacks that make their shares appear valuable and they will have to initiate mass layoffs in order to protect their bottom line.

  SVB is not quite Bear Stearns, but it is likely a canary in the coal mine, telling us what is about to happen on a wider scale. Many of their depositors were founded in venture capital fueled by easy credit, not to mention all the ESG related companies dependent on woke loans. That money is gone – It’s dead. Those businesses are quietly but quickly crumbling which also conjured a black hole for deposits within SVB. It’s a terribly destructive cycle. Surely, there are numerous other banks in the US in the same exact position.

  I believe this is just the beginning of a liquidity and credit crisis that will combine with overt inflation to produce perhaps the biggest economic crash America has ever seen.  SVB’s failure may not be THE initiator, only one among many. I suspect that in this scenario larger US banks may avoid the kind of credit crash that we saw with Bear Stearns and Lehman Brothers in 2008. But, contagion could still strike multiple mid-sized banks and the effects could be similar in a short period of time.

  With all the news flooding the wire on SVB it’s easy to forget that all of this boils down to a single vital issue: The Fed’s stimulus measures created an economy utterly addicted to easy and cheap liquidity. Now, they have taken that easy money away. In light of the SVB crash, will the central bank reverse course on tightening, or will they continue forward and risk contagion?

  For now, Janet Yellen and the Fed have implemented a limited backstop and a guarantee on deposits at SVB and Signature. This will theoretically prevent a “haircut” on depositor accounts and lure retail investors with dreams of endless stimulus.  It is a half-measure, though – Central bankers have to at least look like they are trying. 

  SVB’s assets sit at around $200 billion and Signature’s assets are around $100 billion, but what about interbank exposure and what about the wider implications?  How many banks are barely scraping by to meet their liquidity obligations, and how many companies have evaporating deposits?  The backstop will do nothing to prevent a major contagion.

  There are many financial tricks that might slow the pace of a credit crash, but not by much.  And, here’s the kicker – Unlike in 2008, the Fed has created a situation in which there is no escape. If they do pivot and return to systemic bailouts, stagflation will skyrocket even more. If they don’t use QE, then banks crash, companies crash and even bonds become untenable, which puts the world reserve status of the Dollar under threat. What does that lead to? More stagflation. In either case, rapidly rising prices on most necessities will be the consequence.

  How long will this process take? It all depends on how the Fed responds. They might be able to drag the crash out for a few months with various stop-gaps. If they go back to stimulus then the banks will be saved along with equities (for a while) but rising inflation will suffocate consumers in the span of a year and companies will still falter. My gut tells me that they will rely on contained interventions but will not reverse rate hikes as many analysts seem to expect.

  The Fed will goose markets up at times using jawboning and false hopes of a return to aggressive QE or near-zero rates, but ultimately the trend of credit markets and stocks will be steady and downward.  Like a brush fire in a wind storm, once the flames are sparked there is no way to put things back the way they were.  If their goal was in fact a liquidity crunch, well, mission accomplished.  They have created that exact scenario.  Read my articles linked above to understand why they might do this deliberately.

  In the meantime, it appears that my predictions on timing are correct so far. We will have to wait and see what happens in the coming weeks. I will keep readers apprised of events as new details unfold.  The situation is rapidly evolving.

  Tyler Durden
  Mon, 03/13/2023 – 23:20

• 'Goosebumps' Author R.L. Stine Accuses Publisher Of Progressive 'Censorship'
  ‘Goosebumps’ Author R.L. Stine Accuses Publisher Of Progressive ‘Censorship’

  Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

  The author of the popular horror book series “Goosebumps” has recently admitted to being ignorant about some versions of his books being edited by the publisher.

  

  American novelist R.L. Stine is the creator of the Goosebumps series of books, which is considered the second-highest selling in the world, trailing only Harry Potter. Goosebumps is estimated to have sold over 300 million copies worldwide. During a 2018 ebook re-release, publisher Scholastic edited the books to align with progressive ideologies that reflect a leftist version of social justice, diversity, and gender equality. There were rumors that Stine made the edits, but the author has refuted it.

  “The stories aren’t true. I’ve never changed a word in Goosebumps. Any changes were never shown to me,” Stine said in a March 7 tweet. He was replying to another Twitter user’s post, which said, “The fact he supports censorship and the alteration of works of art is quite disturbing. How shameful.”

  The 1996 book “Attack of the Jack-O’-Lanterns” described a character as “tall and good-looking, with dark brown eyes and a great, warm smile.” It has now been changed to “tall and good-looking, with brown skin, dark brown eyes, and a great, warm smile.” The line “all four people were very overweight” was changed to “All four people were huge,” cited the British newspaper The Times.

  “Don’t Go to Sleep!” from 1997 had a boy dismissing Tolstoy’s book Anna Karenina as “girl’s stuff.” The boy dismisses the book in the new version because it is “not interesting.”

  Changing Goosebumps

  The word “crazy,” which was mentioned multiple times in the Goosebumps series, has been removed and replaced with terms like “scary,” “wild,” “silly,” “stressed,” and “lost her mind.” The word “nutcase” has been replaced with “weirdo” while “a real nut” has been changed to “a real wild one.

  Scholastic, the world’s largest publisher and distributor of children’s books, insists the edits were necessary to keep up with the times. “Scholastic reviewed the text to keep the language current and avoid imagery that could negatively impact a young person’s view of themselves today, with a particular focus on mental health,” said the publisher, according to The Times.

  A line from the 1997 book “I Live in Your Basement” that originally said, “did he really expect me to be his slave—forever?” has been changed to “did he really expect me to do this—forever?” removing the word “slave.”

  A character from the 1998 novel “Bride of the Living Dummy” was originally dressed as a clown with black rings painted around his eyes. The color of the rings has been changed to red.

  Read more here…

  Tyler Durden
  Mon, 03/13/2023 – 23:00

• Jan. 6 Attorney Alleges FBI Criminally Altered Evidence, Requests Special Master Review Of Leaked Messages
  Jan. 6 Attorney Alleges FBI Criminally Altered Evidence, Requests Special Master Review Of Leaked Messages

  Authored by Gary Bai via The Epoch Times (emphasis ours),

  Rogers Roots, an attorney representing Dominic Pezzola, a Jan. 6, 2021, Capitol breach defendant, alleged on Sunday that the FBI had committed crimes by altering evidence and requested that the court appoint a special master to review the evidence.

  

  Roots’s move came days after the testimony of FBI Special Agent Nicole Miller, who was involved in the agency’s investigations of the Jan. 6 defendants. When cross-examining Miller, Nick Smith, an attorney representing Proud Boys member Ethan Nordean (listed as co-defendant on Pezzola’s case), revealed classified FBI emails that were hidden in a tab in an Excel spreadsheet, which included a directive to Miller to “destroy” 338 pieces of evidence and “edit out” an FBI agent from an informant report.

  “Destroying evidence is a federal crime. It actually falls under a federal crime under more than one statute. The same goes with altering documents, altering records, that is a federal crime,” the John Pierce Law attorney told The Epoch Times in an interview on Sunday.

  In a filing on Sunday, Roots requested that Timothy J. Kelly, a Trump appointee presiding over the case, either dismiss the case in its entirety or appoint a special master to independently review the FBI messages that were revealed in court.

  “The unceremonious and uninhibited nature of Miller’s discussion of committing these serious crimes suggests an FBI culture of corruption and lawlessness that must be immediately stopped, and fully investigated,” Roots said in the filing.

  “Accordingly, this case must be dismissed en toto and with prejudice,” Roots’s filing continues. “Even if the Court were to overlook this massive trail of FBI corruption and the trial were to proceed, defendants have a right to cross-examine Agent Miller regarding all of these crimes, her missing emails, her discussions of violating defendants’ 6th amendment rights, her discussions of evidence tampering, and her discussions of altering documents involving [confidential human sources] in this case.”

  “All January 6 prosecutions should be paused for evidentiary hearings and investigations by a Special Master and Special Counsel,” the filing reads.

  The Leaked Messages

  A key question about these leaked messages is whether they fall under the scope of evidence in the case.

  Roots said in the filing that the messages show a violation of due process, reiterating his argument in an earlier filing that the FBI’s monitoring of communications between a co-defendant, Zachary Rehl, and his attorney violated the Sixth Amendment, which prohibits invasion of the right to counsel (Matter of Fusco v. Moses).

  “Miller’s hidden messages reveal casual discussions among the FBI regarding the monitoring of codefendant Rehl’s trial strategy, Rehl’s defenses and ‘interesting’ points, and ways the government can get around Rehl’s defenses,” Roots said in the Sunday filing.

  In the filing, Roots requested the court dismiss Pezzola’s case with prejudice, appoint a special counsel, appoint a special master, schedule extensive evidentiary hearings, and release Pezzola from custody.

  The DOJ, on the other hand, said that because Rehl and his attorney were communicating over a monitored prison system, they waived the right to attorney-client privileges.

  “The government has not obtained any privileged communications between defendant Rehl and Moseley,” the government wrote in response to Roots’s contentions in a filing on Sunday. “As the government explained in a separate filing … Rehl and Moseley made a fully informed choice to communicate with one another over a monitored jail email system. In doing so, they waived any privilege.”

  Read more here…

  Tyler Durden
  Mon, 03/13/2023 – 22:00

• The Bank Crisis Has Democrats Scrambling Behind The Scenes To Find A Scapegoat
  The Bank Crisis Has Democrats Scrambling Behind The Scenes To Find A Scapegoat

  Democratic representatives are scrambling in the wake of the potentially contagious Silicon Valley Bank implosion, looking for a way to divert attention away from them should the crisis expand.  

  One avenue for scapegoating the event that has been suggested among Dems and the media is to blame a 2018 law that eased Dodd-Frank capital requirements for midsize and small banks.  Republicans led the effort to pass the law, which President Donald Trump signed, but 33 House Democrats and 17 Senate Democrats also voted for it. 

  No mention, of course, of the cancerous exposure SVB had to numerous woke investments through venture capital, including money losing ESG related projects, climate change-based companies and World Economic Forum stakeholder capitalism projects.

  The Dems have found their narrative, which is an old narrative:  “The conservatives did it.”

  What Democrats do not seem to understand is that the easing of Dodd-Frank capital requirements was in direct response to the Federal Reserve’s announced plan to tighten liquidity and raise interest rates through 2018.  With more expensive credit and a shrinking Fed balance sheet, reducing requirements for bank buffers was one of the few ways to prevent the stimulus addicted lending sector from plummeting.  The extra capital also allowed banks to continue lending to companies that engage in stock buybacks, keeping stock markets afloat.

  With a larger capital buffer even more liquidity dries up, revealing the true economic weakness underneath that Dems have denied for the past few years.  So, if Biden and the Dems get what they want (more strict capital requirements for banks), then there will be an even swifter collapse of markets and the overall economy due to lack of liquidity.    

  By the end of 2018, markets began to plunge anyway under the strain of higher interest rates, which led to the Fed reversing course, and this seems to be what Democrats are really hoping for.  They have called for endless liquidity measures and have consistently demanded lower rates and looser monetary policy.  However, when Donald Trump’s Administration called for rate cuts during his term, Dems attacked.  Once again, when Republicans do it, it’s wrong; when they do it, it’s good policy.  

  Another issue to consider is that each successive program by the Fed to employ bailouts and QE accelerates the inflation crisis.  While both sides of the aisle seem to want helicopter money when they are in power so they can boast about rising stock markets and improved employment, the Dems are now facing a systemic stagflationary event; the same event they originally claimed did not exist.  This means that any pursuit of new QE in the face of a credit crunch would lead to an immediate spike in inflation once again, crushing the middle class.  

  Are Democrats willing to accept responsibility for something like that?  Not a chance.

  The Biden Administration has so far taken full credit for the slowdown of consumer inflation as well as the shrinking deficit, but these changes are only due to the tightening actions of the central bank which sets policy independent of the White House.  Democrats can’t have it both ways – They can’t take credit for reduced inflation when the Fed tightens policy against their wishes, and then not take credit for the consequences of higher inflation when they badger the Fed to inject more stimulus.

  The only recourse for the political left is to somehow lay the blame on conservatives no matter which way the wind blows, inflation or deflation.   

  Emergency congressional hearings have been organized to determine the cause of the SVB crisis and the course of action needed.  Democrats including Sen. Sharrod Brown and Rep. Maxine Waters were quick to applaud the backstop initiated by the Fed and the Treasury Department, attempting to calm market concerns and reassure investors and depositors that all is well.  Maxine Waters stated that Republicans and Democrats needed to “work together to protect the safety of the financial system”, which is likely a thinly veiled assertion that Republicans must support raising the debt ceiling and commit to even more spending.  

  Biden took a slightly different tone, vowing to hold the people who caused the mess responsible, specifically referring to Republicans.  Of course, to legitimately hold the true culprits responsible would require that Biden punish himself – As it was the Fed along with the Obama/Biden Administration that launched the ongoing stimulus bonanza in 2008/2009.  Obama and Biden doubled the national debt from $10 trillion to $20 trillion in the span of a mere eight years.  The normalization of fiat money creation to avoid economic consequences has created the very inflationary crisis and banking weakness we are facing today. 

  And, if banks cannot withstand even a moderate rise in interest rates and reduced liquidity because of their addiction to Fed stimulus, then it is fitting if the system crashes under a new Biden regime.

  Tyler Durden
  Mon, 03/13/2023 – 21:40

• Victor Davis Hanson: The March Madness Of The President
  Victor Davis Hanson: The March Madness Of The President

  Authored by Victor Davis Hanson via AmGreatness.com,

  Joe Biden’s political utility and near senility serve as exemptions for his often sexist, racist, and creepy riffs…

  

  Another couple of weeks, another bout of madness from Joe Biden and his team.

  Of recent Biden delusions, consider:

  Biden went off in one of his impromptu Corn Pop, or “beat-up-Trump-behind-the-bleachers” fables. These often slurred and nearly unintelligible tales characteristically virtue signal Biden’s own victimhood and “courage.” 

  They are interspersed with his bizarre propensity for eerie female contact. So we see or hear of his long record of blowing into the ears and hair, or squeezing the necks of young girls. He hugs, for far too long, mature women. He can call out among a crowd an anonymous attractive teen stranger. Or, recently he relates an incoherent but quasi-sexual vignette. 

  So Joe recalled his patient days in his usual off-topic “no lie/not kidding/no joke” manner (i.e., tip offs that he’s lying). He told us that a noble nurse once would “come in and do things that I don’t think you learn in medical school—in nursing school.” The president got a nervous laugh from the apparent quasi-pornographic reference (but then again Joe is excused because he is a “feminist”), before he detailed her technique:  

  She’d whisper in my ear.  I didn’t—couldn’t understand her, but she’d whisper, and she’d lean down. She’d actually breathe on me to make sure that I was—there was a connection, a human connection.

  A woman leaning over to blow into a prone man’s ear certainly constitutes a “human connection.” Yet all of Joe’s fables have different Homeric-style retellings. Two years ago he claimed that the same nurse in question actually blew into his nostrils. What a strange air-pressure technique that must have entailed for a person recovering from brain surgery. But perhaps it was consistent with biblical references to God blowing the spirit of life into the nose of man.

  About a week later, referencing that hospital stay, Biden added that doctors “had to take the top of my head off a couple times, see if I had a brain”—a reference that did not reassure the nation he is not enfeebled. 

  No one in the media had much of a reaction because Joe Biden’s political utility and near senility serve as exemptions for his often sexist, racist, and creepy riffs. 

  Instead, the media wrote off the nurse breathing into good ol’ Joe’s orifices as belonging to the same weird genre that a while back gave us inner-city kids stroking the golden hairs on Joe’s tan legs, or the shower revelations of Ashley Biden’s diary, or his “you ain’t’ black,” “put y’all back in chains,” and “junkie” sorts of racial condescension (e.g., “Why the hell would I take a test? C’mon, man. That’s like saying you, before you got on this program, you take a test where you’re taking cocaine or not. What do you think? Huh? Are you a junkie?”). 

  Joe also blustered to a crowd during Black History Month, “I may be a white boy, but I’m not stupid.” 

  The crowd laughed at the idea that the jester Biden believes white people are usually stupid, but that he, Joe, the exception to his race, is not stupid, despite being white. At least Biden finally referenced himself as “boy.” Usually he has used that racial putdown for prominent blacks like Maryland Governor Wes Moore or a senior White House advisor Cedric Richmond.

  The February-March madness of Joe was not through. Sometimes, his venom renders him disgustedly comic, as when he took the occasion of mass American deaths from fentanyl on his watch, to chuckle that the carnage was at least worse under Trump (an abject lie): 

  ‘I should digress, probably. I’ve read, she [Rep. Marjorie Taylor Greene], she was very specific recently, saying that a mom, a poor mother who lost two kids to fentanyl, that, that I killed her sons. Well, the interesting thing is that fentanyl they took came during the last administration.’ Followed by the Biden laugh.

  Apparently, 100,000 dead at least deserves from Joe a “Trump did it” chuckle.

  Joe, for the third time in two years, tripped and nearly fell ascending the ramp of Air Force One. At some point even his supporters will concede that when octogenarians repeatedly stumble and fall, if not put under careful watch or provided a walker, it is only a matter of time until they break a hip and become bedridden.

  In another replay, once again Biden finished his remarks, turned around to exit—and had no idea where he was going to go or whose invisible hand he was supposed to shake.

  Amid all this, Biden more or less stuck to his now tired rhetorical themes. 

  One is the serial denunciation of the MAGA Republicans. Usually, he trashes them as semi-fascists or un-American, often in the context of his “unity speeches.” After calling for reconciliation, bipartisanship, and unity, Joe then usually tightens his face, grimaces, and starts yelling about the MAGA dregs and chumps. 

  If Biden is really angry, he adds the intensive adjective “Ultra” for the MAGAites. He gets particularly incensed when referencing the one percent who “don’t pay their fair share” (the one percent pays over 40 percent of all income tax revenues). Biden is oblivious that the entire Biden clan is under popular suspicion of not reporting all of the millions of dollars in quid pro quos leveraging they raked in from foreign governments without registering as their agents.

  Note that his entire team, when stung by charges of incompetency or illegality, usually follows Joe’s tactic of “Trump did it.” So when Pete Buttigieg was criticized for ignoring the East Palestine rail wreck and reminded of his past serial transportation failures, junkets, and incoherent systemic racism charges, he retreated to blaming Trump for the derailment. 

  Buttigieg falsely claimed that Trump’s past lifting of particular electric railcar brake regulations caused the wheel bearing failure in East Palestine, a lie that even members of his department could not stomach.

  Two, Joe creates elaborate fables. In the past two weeks, he returned to his civil rights lie that he was a campus activist agitating for racial justice. At least he did not add his usual fillips of being arrested or standing up to apartheid police in South Africa.

  In Biden’s world, he brags he has reduced inflation. Yet when he entered office in January 2021, the annualized inflation rate was 1.7 percent. Two years later in January 2023 inflation went up to 6.4 percent, after hitting a high in June 2022 of 9.1 percent—6.4 percentage points higher than when he took office. In mid-March we will learn of the February 2023 annualized rate, but it is expected to climb back to more than 8 percent. 

  If anyone compares the current price of eggs, or rent, or diesel fuel, or a natural gas heating bill or building materials to their respective costs when Biden entered office, then he would know Biden’s inflation is cumulative and has nearly destroyed the affordability of shelter, food, and fuel—the stuff of life.

  He mentioned lowering heating and cooling costs of American homes through his climate change advocacy. In truth, on average electric rates shot up over 10 percent last year. Natural gas and fuel went even higher to over 25 percent in a single year. 

  Biden talks about his low unemployment rate of 3.4 percent. But it is almost identical to what the Trump Administration achieved—without Biden’s high interest rates and acute inflation—in the months before the massive COVID lockdowns. 

  Moreover, current low employment is largely a reflection of reduced labor participation—due to early retirements, exits during the pandemic, fear of COVID, long COVID, the zoom culture, and most importantly the Biden continuance of massive COVID-era subsidies that discourage employment. The labor participation rate has hit near historic lows under Biden, lower than the pre-COVID rate under Trump. 

  It was not until last month that the Biden economy finally achieved the level of total employed Americans who had been working in January 2020 on the eve of the Covid lockdowns. 

  As far as interest rates for 30-year fixed mortgages, they were 2.9 percent when Biden took office. Now they are currently over 7 percent. 

  In sum, Biden repeats the same patterns of deception: crash the economy as evidenced by many of its major indicators, then when a data point reveals a slight and likely temporary monthly recovery, he brags he “reduced” inflation, interest, or unemployment.

  We also heard during the same week from Biden Attorney General Merrick Garland who was shredded during his testimony to the Senate. He argued that the vastly disproportionate FBI response to violence against abortion centers versus attacks on pro-life groups was only due to the differences between light and dark—literally: abortion centers are attacked during daytime; in contrast, pro-life shelters are attacked during night. 

  Apparently his Justice Department and the FBI shut down at sunset and reawaken at dawn—as if either most violent crime does not occur at night or there is nothing to be done about it when it does. 

  Garland further embarrassed himself when he could not explain the disproportionate use of force in arresting or detaining conservative suspects versus the virtual exemptions given prominent left-wing suspects. 

  Most embarrassingly, when asked why he did not charge mobs that swarmed the homes of conservative Supreme Court justices to influence their decisions—a federal felony—he lamely claimed there were federals protecting the residences.

  In Garland’s world, some criminals committing felonies are completely exempt if law enforcement prevents further violent manifestations of their criminal behavior. So illegally swarm a Supreme Court justice’s residence to influence a court decision, but then stop short of escalating further by the sight of law enforcement—and, presto, you never committed a crime in the first place. 

  Garland finished off his recent nonsense by repeating the lie that five police officers were killed due to the January 6 protests. In fact, none were. Officer Brian Sicknick died of natural causes after the protests were over. The other four committed suicide weeks or even months later and no one has connected their self-induced deaths with any act of the protestors. 

  About the same time, a beleaguered Pete Buttigieg went off on riffs about Tucker Carlson, who, he implied, lacked the grassroots, working-man fides of Buttigieg.

  He claimed that for all the criticism he has endured, he believes that he will be remembered for posterity for his fight against “climate change”—although he did not point to any concrete result in reducing carbon emissions due to his singular policies. 

  In fact, Buttigieg will be known but for other characteristics: He repeatedly emphasizes his identity politics gay stature both to note his supposedly pathbreaking courage and to claim victimhood when attacked. He sees transportation through the lens of race and so chases the unicorn of white privilege, whether concerning past freeway routes or the makeup of current construction crews (falsely charging that white men are overrepresented on them). Under his tenure as Transportation Secretary, the country experienced dangerous supply interruptions, ossified ports, and harbor-bound trains robbed in Wild West fashion. 

  Buttigieg’s diversity mandates either did nothing to ameliorate, or actually led to, a series of near-miss airline crashes, the complete shutdown of the airline industry due to computer glitches and weather, the implosion for a week of Southwest Airlines, the East Palestine derailment disaster, and labor interruptions. In all these cases he either was on leave or a junket, wrote them off as Trump’s fault, or contextualized them as no big deal. 

  Delusional Homeland Security Secretary Alejandro Majorkas has declared the border closed and the nation secure, even as 100,000 Americans per year have died from overdoses of fentanyl shipped with impunity across the open border by Mexican cartels. When upwards of 7 million aliens flow across the border illegally since Biden took office, it is written off as Trump’s fault. 

  Finally, last week there were several interviews with FBI Director Christopher Wray. He could not explain why his agency goes full military mode to arrest a father and husband for protesting at an abortion clinic while having no clue who has been attacking pro-life shelters. 

  In Wray’s mind, the performance art sweep into Mar-a-Lago, which he claims was not a “raid,” was no different from having Biden’s lawyers quietly conduct their own “investigations” of Biden’s improper removal of classified documents (improper with an asterisk, since no vice president has the president’s legal authority to declassify whatever he wishes). 

  Wray could not explain why the FBI sat on the Biden trove until the midterm election was over and then only acted to further search Biden residences when its own asymmetrical protocols came under fire. 

  Add up the last few weeks, and we learned that Christopher Wray’s FBI is doing splendidly in its even enforcement of the law. Merrick Garland’s Justice Department is absolutely disinterested and treats all sides equally. Alejandro Mayorkas has closed the border and we are now “secure.” Pete Buttigieg is building a legacy for the ages as a climate change crusader.

  And an eloquent and dynamic Joe Biden has compiled an impressive legislative record on his way to a great presidency—with the energy, we are told by Dr. Jill Biden, that is more impressive than any 30-year-old’s.

  Tyler Durden
  Mon, 03/13/2023 – 21:20

• Big Trouble In Little Banks – Bailout Sparks Buying Panic In Bonds, Bitcoin, & Bullion
  Big Trouble In Little Banks – Bailout Sparks Buying Panic In Bonds, Bitcoin, & Bullion

  The Fed/TSY/FDIC stepped in and saved the world again last night… but nobody told regional banks, whose shares are down dramatically today…

  

  Admittedly off the lows of the day, but all with multiple trading halts today. FRC, WAL, and MYFW are the highest default risk banks in the Russell 3000 Banks Subsector, according to Bloomberg…

  

  Source: Bloomberg

  But it’s not just the small banks who are seeing default risk increase, all of the global majors are seeing CDS spreads rise…

  

  Source: Bloomberg

  And Credit Suisse CDS has never closed higher (and is now more than double the risk than at the peak of the financial crisis)…

  

  Source: Bloomberg

  With the regional bank index continuing to crash-land…

  

  After a year of hiking rates and hawkish FedSpeak, all it took to tighten financial conditions drastically was a open-ended facility to bail out the financial system. Bloomberg’s financial conditions index tightened massively overnight…

  

  Source: Bloomberg

  And the market has completely blown up any hopes that The Fed had for a hawkish path from here with the terminal rate plunging and significant rate-cuts being priced in. For context, the market expected over 110bps of rate-hikes by September on Wednesday, it now believes that by September, rates will be over 65bps lower… “in the words of the Virgin Mary, come again!”

  

  Source: Bloomberg

  For context, today was the biggest gain in the 3rd ED contact (which is currently the Sept 2023 contract) since 1987…

  

  Source: Bloomberg

  The shift in the market’s expectation for the Fed’s rate trajectory is simply stunning…

  

  Source: Bloomberg

  The Fed hiking cycle, illustrated pic.twitter.com/usWXhxhcOf

  — ForexLive (@ForexLive) March 13, 2023

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

  Stocks rallied after the bailout, but we note that the US Majors were unable to get back to pre-SVB-Fail levels. Small Caps (heavy with financials) have been clubbed like a baby seal…

  

  Notably, 0DTE players faded the initial rebound in stocks…

  

  HIRO Indicator | SpotGamma™

  And obviously, financials were the biggest losers. On the flip-side, only defensives were bid (Healthcare and Utes)…

  

  Source: Bloomberg

  Credit markets blew out today (on a spread basis), exceeding (relatively) the shift in equity risk…

  

  Source: Bloomberg

  Bonds were aggressively bid across the curve with the short-end a massive outperformer over the last three days.

  

  Source: Bloomberg

  On the day, the 30Y yields ended unchanged with 2Y down over 50bps..

  

  Source: Bloomberg

  The 2Y yield is down almost 100bps in the last three days, dropping back below 4.00% – its lowest since Sept 2022…

  

  Source: Bloomberg

  …the biggest yield drop since ‘Black Monday’ in 1987…

  

  Source: Bloomberg

  The yield curve steepened dramatically with 2s30s up over 50bps today to their least inverted since mid-Nov…

  

  Source: Bloomberg

  Well, Powell is officially Volcker: the 2s10s just steepened at the fastest pace since the Volcker economic crematorium unleashed the worst recession since World War 2

  

  Source: Bloomberg

  The market’s inflation expectations (1Y CPI Swaps) plunged…

  

  Source: Bloomberg

  Bond volatility (MOVE) exploded today to its highest since June 2009…

  

  Source: Bloomberg

  Shorter-term, the decoupling between VIX and MOVE from late Feb is starting to unwind, but equity risk has a long way to go…

  

  Source: Bloomberg

  The dollar dumped down to three-week lows…

  

  Source: Bloomberg

  As alternative-currencies were sought as safe-havens, sending bitcoin soaring higher (above $24,000)…

  

  Source: Bloomberg

  And gold spiked above $1900…

  

  Oil prices puked overnight, with WTI down to a $72 handle before bouncing back, but late on, it started to slide again, ending down over 3%…

  

  Finally, systemic risk indicators are starting to flash red with FRA-OIS spiking (signaling stress in the banking system)…

  

  Source: Bloomberg

  And global dollar liquidity is drying up fast…

  

  Source: Bloomberg

  But Biden said “the banking system was safe”

  pic.twitter.com/XiImZvRqp6

  — Machiavelli Memez (@MachiavelliMemz) March 13, 2023

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

  If The Fed’s backstop is so good, and the banking system is so resilient, why are these systemic signals worsening?

  Tyler Durden
  Mon, 03/13/2023 – 21:02

• Greta Thunberg Deletes Tweet Claiming "Climate Change Will Wipe Humanity" By 2023
  Greta Thunberg Deletes Tweet Claiming “Climate Change Will Wipe Humanity” By 2023

  Greta Thunberg embarrassingly deleted a tweet from 2018 that was connected to an article predicting the extinction of humans by 2023 due to climate change.

  “A top climate scientist is warning that climate change will wipe out all humanity unless we stop using fossil fuels over the next five years,” Thunberg’s tweet read, citing an article from some obscure website that no longer exists.  

  On Saturday, Jack Posobiec first revealed the deleted tweet. 

  Hi @GretaThunberg! Why did you delete this? pic.twitter.com/YRyrCje0L1

  — No Bailouts Poso 🚫💰 (@JackPosobiec) March 11, 2023

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  The self-described “autistic climate justice activist” was merely a teenager with no credentials when she touted end-of-the-world prophecies that millions of ‘climate-tards’ believed. Progressive media outlets, ‘green’ lawmakers, corporate execs, and non-governmental organizations praised her for her bold predictions that have turned out to be nothing but lies. 

  Greta is a ‘useful idiot’ for the climate change scam. Every decade a new and improved climate activist emerges. It just so happened that a child replaced former Vice President Al Gore. 

  Recall Gore released a 2006 documentary called “An Inconvenient Truth” that warned global sea level could rise as much as 20 feet “in the near future.”

  The true weakness of the climate movement lies in its intellectually deficient spokespeople, like Greta and Gore. 

  So who comes next? Well, we found the new and improved Greta 2.0. 

  My speech to leaders at #COP27 yesterday was pretty clear. Here it is in each of the six official @UN languages:

  Stop lying
  كف عن الكذب
  停止说谎
  Arrêtez de mentir
  прекрати врать
  Deja de mentir#StopLying pic.twitter.com/9jkx2yQAIb

  — Sophia Kianni (@SophiaKianni) November 9, 2022

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  Tyler Durden
  Mon, 03/13/2023 – 21:00

• As Banking Collapses Erode Trust, Bitcoin Fixes Moral Hazard
  As Banking Collapses Erode Trust, Bitcoin Fixes Moral Hazard

  Authored by Mickey Koss via BitcoinMagazine.com,

  As the underlying issues in our economy are exposed by recent banking failures, Bitcoin stands as a trustless, alternative money…

  Michael Bury nails it… pic.twitter.com/aZPp6hsnzj

  — Radar🚨 (@RadarHits) March 13, 2023

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

  As unrealized losses piled up, Silicon Valley Bank (SVB) gradually, then suddenly became insolvent, followed by the collapse of Signature Bank and people beginning to wake up to issues pervading our financial system. Modern day bank runs, though digital, can force banks to sell reserve assets at a loss, inevitably leading to insolvency.

  Banks are failing because they bought Treasuries. Full stop. The “safest asset in the world” is the riskiest asset in the world. pic.twitter.com/MdmmsH4bKa

  — Balaji (@balajis) March 13, 2023

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  As Balaji Srinivasan has pointed out, what was once considered the gold standard for risk-free reserve assets is now on the precipice of a potential new banking crisis. Is this the end of the U.S. treasury as we know it?

  If nothing else, the events over the weekend — from SVB’s failure to issues with other financial institutions to alarming intervention by the government — demonstrate just how fragile the system has become, underscoring its dependence upon money printing even as it is being undone by the low-yield, low-interest-rate environment that was caused by the printing in the first place. The dichotomy is stark, but there are lessons to be learned.

  YOU CAN’T TAPER A PONZI: WHY THE LEGACY BANKING SYSTEM IS RIPE FOR FAILURE

  The way the banking system works is, essentially, banks take your deposits and lend them out at higher interest rates than they pay you. They often keep reserves in U.S. treasury bonds, among other things, and everything seems to work until it doesn’t.

  Kiss your rate hikes goodbye pic.twitter.com/FbutSa87lR

  — The_Real_Fly (@The_Real_Fly) March 12, 2023

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  With the Federal Reserve’s tightening cycle, raising interest rates meant decreasing the price of bonds, devaluing banks’ staple reserve asset. When depositors come to redeem their deposits, banks are forced to sell their assets at a loss, eventually becoming unable to stem the bleeding.

  Regional banks will bear the brunt of this hit, as demonstrated by the recent collapse of SVB. Federal regulators are desperately trying to prop up confidence in the system by backing 100% of depositors’ money, but at what cost?

  From a source in close contact w JPM:

  “JPMorgan has been working all weekend in commercial customer service and have opened 300 commercial accounts totalling over $6.0billion.”

  — Lisa Hough (@lisa_hough_) March 12, 2023

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  Depositors are surely already fleeing to the big boys, which will result in a more concentrated and fragile system than before. I think everyone knows deep down that they won’t be able to save every bank customer. Just how much money printing will the public tolerate in the name of financial stability?

  The SVB crisis isn’t bearish for banking

  Tomorrow, ~$170B will be returned to depositors

  Billions more will flow out of other unhealthy banks

  Those depositors will immediately look for new banks to park those funds in

  Healthy banks are licking their chops at this opportunity

  — Genevieve Roch-Decter, CFA (@GRDecter) March 13, 2023

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  In terms of equity holders, why would anybody want to hold stock in a small bank at this point? If banks fail and the Feds choose to make depositors whole while everybody else suffers, all of the risk is transferred onto everyone but the depositors, incentivizing stock sell offs and eating away at struggling banks’ risk-absorbing capital. This move could force smaller banks into much worse positions than they were before.

  SYSTEMIC TRUST VS. SYSTEMIC TRUSTLESSNESS

  The scenario playing out before us is a stark illustration of what happens when trust starts to break down in a system fundamentally based on the idea of trusting, rather than verifying. In modern times, people think they need to hold their money in banks, but they have to trust the banks to maintain effective risk-management strategies in order to secure their deposits.

  Bitcoin is fundamentally different. You can eliminate reserve requirements, duration and interest rate risks, counterparty risks and the like. There is no trust in Bitcoin. There is only code. It is backed one to one with itself, and as long as you hold your own keys properly, you don’t need to worry about a bank run.

  As companies struggle to make payroll this week, I think this might just be a spark that lights a fire behind Bitcoin. Trustless money might just be the thing that helps to stem the tide of catastrophe in a system where trust appears to be crumbling.

  Tyler Durden
  Mon, 03/13/2023 – 20:40

• Spring-Breakers Begin South Florida Invasion As Police Prepare For Chaos
  Spring-Breakers Begin South Florida Invasion As Police Prepare For Chaos

  South Florida has been a popular destination for college students during spring break, particularly in cities such as Miami Beach, Panama City Beach, and Fort Lauderdale. However, in recent years, the influx of these visitors has led to overcrowding and rowdy behavior. 

  South Florida law enforcement agencies in Miami-Dade, Broward, and Palm Beach are preparing for potential turmoil that could occur on the streets and beaches.

  Last year, around this time, Miami Beach declared a curfew after a series of shootings, street fights, and stampedes. Using last year as a guide, the chaos could only be days away, perhaps, as early as this weekend. 

  Already, The Sun reports, “packed beaches, plenty of booze flowing, parties raging” in Fort Lauderdale. Here are some of the scenes from the beach town:

  

  

  

  Some Floridians have expressed their concerns about the impending chaos and have said they don’t want spring breakers in their town. 

  why does everyone come to Miami for spring break get tf back to your city please we don’t want you here 😭😭😭

  — Ev💋 (@babyevss) March 12, 2023

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  Well, too bad. Spring break traffic is already en route to Miami. 

  #SpringBreak traffic heading into Miami Beach pic.twitter.com/IBmPYpGm3T

  — Joel Franco (@OfficialJoelF) March 12, 2023

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  Individuals who relocated to South Florida from the Northeast to escape the pandemic and chaos of imploding liberal cities might want to stay away from beaches and metro areas in anticipation of what is predicted to be a wild week.

  Tyler Durden
  Mon, 03/13/2023 – 20:20

• Should The Names Of Stanford Student Disrupters Be Published?
  Should The Names Of Stanford Student Disrupters Be Published?

  Authored by Alan Dershowitz via The Gatestone Institute,

  Once again, a conservative speaker had been shouted down by censorial law students who didn’t want him to speak. This time it was Stanford, last time it was Yale. Then it was Georgetown.

  

  If the Stanford Dean of diversity, equity and inclusion gets her way, this censorship of conservative speakers will spread to other campuses. Among the worst offenders in this all-too-common censorship fest was Dean Tirien Steinbach. In what appears to be a written statement prepared in advance, she effectively silenced the speaker, federal Judge Kyle Duncan, by monopolizing his space. She sought to justify not inviting speakers who might offend the sensibilities of students who she claims to be responsible for “protecting” and providing “safe spaces” against uncomfortable ideas.

  After paying lip service to free speech, she suggested reconsidering Stanford’s speech policy, repeatedly asked whether “the squeeze is worth the juice”. She questioned whether Judge Duncan, whose opinions and views cause “hurt” to students, should have been invited to speak. Her bottom-line message was that offending some students is worse than allowing others to hear from a controversial speaker. This from a high-ranking administrator who was purporting to speak on behalf of the university.

  The real victims of this censorship were the students who were denied the opportunity to hear Judge Duncan’s full presentation.

  An angry Judge Duncan responded, “Don’t feel sorry for me. I’m a life-tenured judge. What outrages me is that these kids are being treated like dogshit by fellow students and administrators.”

  As the late Justice Thurgood Marshall once observed, “The freedom to speak and the freedom to hear are inseparable; They are two sides of the same coin.”

  To her credit, the dean of the law school, Jenny Martinez, condemned the disrupters, writing, “However well-intentioned, attempts at managing the room in this instance went awry… The way this event unfolded was not aligned with out institutional commitment to freedom of speech.” She gave no indication of whether anyone would be disciplined.

  To be sure, protesting, picketing and even brief heckling of speakers is also protected free speech, but shouting speakers down with the intent to silence them is not.

  It is explicitly prohibited by Stanford’s rules. Yet that’s exactly what occurred without apparent consequences to the disrupters.

  The disrupters also attempted to shame the sponsors of the speech by disclosing their names and subjecting them to harassment. This suggests a possible response to the disrupters. Following the Yale disruptions, some judges have announced that they will no longer hire law clerks from Yale. Similar announcements regarding Stanford are likely. In my view, that amounts to collective punishment of the innocent along with guilty. Many law students from these schools do not agree with disrupting speakers, and they should not be denied clerkships. Instead, the names of the disrupters might be published and made available to potential employers, so they can decide whether they want to hire graduates with such intolerance for diversity of viewpoints.

  I made a similar suggestion about publishing the names of Berkeley law students who voted to ban all Zionists — that is, believers in Israel’s right to exist — from speaking at 14 law school clubs, including feminist, Black and gay organizations.

  As one who well remembers McCarthyite “blacklists,” I’m uncomfortable about publishing the names of student censors. But if they are proud of their very public efforts to silence speakers with whom they disagree, they should be proud to have their names published so that potential employers can have relevant information before they make hiring decisions.

  That would be far better than judges and other employers refusing to hire ANY students from the offending schools.

  Law schools are supposed to teach advocacy skills and a commitment to the rule of law. They should have and enforce vigorous free speech policies. They should not have deans, like Steinbach, who are part of the problem, rather than part of the solution.

  Stanford should apologize to Judge Duncan for the dean’s actions and inactions. He observed that in his view, “This was a set up. She was working with the students.” Stanford should discipline any students who violated its speech policies. Most importantly, it should foster values of diversity of viewpoints, rather than merely diversity of race and ethnicity. Perhaps the law school should appoint a new dean of “diversity of opinions, tolerance for other views and free speech”.

  Tyler Durden
  Mon, 03/13/2023 – 20:00

• Simon Black: The Unraveling Can Happen In An Instant
  Simon Black: The Unraveling Can Happen In An Instant

  Authored by Simon Black via SovereignMan.com,

  If SVB is insolvent, so is everyone else

  On Sunday afternoon, September 14, 2008, hundreds of employees of the financial giant Lehman Brothers walked into the bank’s headquarters at 745 Seventh Avenue in New York City to clear out their offices and desks.

  Lehman was hours away from declaring bankruptcy. And its collapse the next day triggered the worst economic and financial devastation since the Great Depression.

  The S&P 500 fell by roughly 50%. Unemployment soared. And more than 100 other banks failed over the subsequent 12 months. It was a total disaster.

  These bank, it turned out, had been using their depositors’ money to buy up special mortgage bonds. But these bonds were so risky that they eventually became known as “toxic securities” or “toxic assets”.

  These toxic assets were bundles of risky, no-money-down mortgages given to sub-prime “NINJAs”, i.e. borrowers with No Income, No Job, no Assets who had a history of NOT paying their bills.

  When the economy was doing well in 2006 and 2007, banks earned record profits from their toxic assets.

  But when economic conditions started to worsen in 2008, those toxic assets plunged in value… and dozens of banks got wiped out.

  Now here we go again.

  

  Fifteen years later… after countless investigations, hearings, “stress test” rules, and new banking regulations to prevent another financial meltdown, we have just witnessed two large banks collapse in the United States of America– Signature Bank, and Silicon Valley Bank (SVB).

  Now, banks do fail from time to time. But these circumstances are eerily similar to 2008… though the reality is much worse. I’ll explain:

  1) US government bonds are the new “toxic security”

  Silicon Valley Bank was no Lehman Brothers. Whereas Lehman bet almost ALL of its balance sheet on those risky mortgage bonds, SVB actually had a surprisingly conservative balance sheet.

  According to the bank’s annual financial statements from December 31 of last year, SVB had $173 billion in customer deposits, yet “only” $74 billion in loans.

  I know this sounds ridiculous, but banks typically loan out MOST of their depositors’ money. Wells Fargo, for example, recently reported $1.38 trillion in deposits. $955 billion of that is loaned out.

  That means Wells Fargo has made loans with nearly 70% of its customer’s money, while SVB had a more conservative “loan-to-deposit ratio” of roughly 42%.

  Point is, SVB did not fail because they were making a bunch of high-risk NINJA loans. Far from it.

  SVB failed because they parked the majority of their depositors’ money ($119.9 billion) in US GOVERNMENT BONDS.

  This is the really extraordinary part of this drama.

  US government bonds are supposed to be the safest, most ‘risk free’ asset in the world. But that’s totally untrue, because even government bonds can lose value. And that’s exactly what happened.

  Most of SVB’s portfolio was in long-term government bonds, like 10-year Treasury notes. And these have been extremely volatile.

  In March 2020, for example, interest rates were so low that the Treasury Department sold some 10-year Treasury notes at yields as low as 0.08%.

  But interest rates have increased so much since then; last week the 10-year Treasury yield was more than 4%. And this is an enormous difference.

  If you’re not terribly familiar with the bond market, one of the most important things to understand is that bonds lose value as interest rates rise. And this is what happened to Silicon Valley Bank.

  SVB loaded up on long-term government bonds when interest rates were much lower; the average weighted yield in their bond portfolio, in fact, was just 1.78%.

  But interest rates have been rising rapidly. The same bonds that SVB bought 2-3 years ago at 1.78% now yield between 3.5% and 5%… meaning that SVB was sitting on steep losses.

  They didn’t hide this fact.

  Their 2022 annual report, published on January 19th of this year, showed about $15 billion in ‘unrealized losses’ on their government bonds. (I’ll come back to this.)

  By comparison, SVB only had about $16 billion in total capital… so $15 billion in unrealized losses was enough to essentially wipe them out.

  Again– these losses didn’t come from some mountain of crazy NINJA loans. SVB failed because they lost billions from US government bonds… which are the new toxic securities.

  2) If SVB is insolvent, so is everyone else… including the Fed.

  This is where the real fun starts. Because if SVB failed due to losses in its portfolio of government bonds, then pretty much every other institution is at risk too.

  Our old favorite Wells Fargo, for example, recently reported $50 billion in unrealized losses on its bond portfolio. That’s a HUGE chunk of the bank’s capital, and it doesn’t include potential derivative losses either.

  Anyone who has purchased long-term government bonds– banks, brokerages, large corporations, state and local governments, foreign institutions– are all sitting on enormous losses right now.

  The FDIC (the Federal Deposit Insurance Corporation, i.e. the primary banking regulator in the United States) estimates unrealized losses among US banks at roughly $650 billion.

  $650 billion in unrealized losses is similar in size to the total subprime losses in the United States back in 2008; and if interest rates keep rising, the losses will continue to increase.

  What’s really ironic (and a bit comical) about this is that the FDIC is supposed to guarantee bank deposits.

  In fact they manage a special fund called Deposit Insurance Fund, or DIF, to insure customer deposits at banks across the US– including the deposits at the now defunct Silicon Valley Bank.

  But the DIF’s balance right now is only around $128 billion… versus $650 billion (and growing) unrealized losses in the banking system.

  Here’s what really crazy, though: where does the DIF invest that $128 billion? In US government bonds! So even the FDIC is suffering unrealized losses in its insurance fund, which is supposed to bail out banks that fail from their unrealized losses.

  You can’t make this stuff up, it’s ridiculous!

  Now there’s one bank in particular I want to highlight that is incredibly exposed to major losses in its bond portfolio.

  In fact last year this bank reported ‘unrealized losses’ of more than $330 billion against just $42 billion in capital… making this bank completely and totally insolvent.

  I’m talking, of course, about the Federal Reserve… THE most important central bank in the world. It’s hopelessly insolvent, and FAR more broke than Silicon Valley Bank.

  What could possibly go wrong?

  3) The ‘experts’ should have seen this coming

  Since the 2008 financial crisis, legislators and bank regulators have rolled out an endless parade of new rules to prevent another banking crisis.

  One of the most hilarious was the new rule that banks had to pass “stress tests”, i.e. war game scenarios to see whether or not banks would be able to survive certain fluctuations in macroeconomic conditions.

  SVB passed its stress tests with flying colors. It also passed its FDIC examinations, its financial audits, and its state regulatory audits. SVB was also followed by dozens of Wall Street analysts, many of whom had previously issued emphatic BUY ratings on the stock after analyzing its financial statements.

  But the greatest testament to this absurdity was the SVB stock price in late January.

  SVB published its 2022 annual financial report after the market closed on January 19, 2023. This is the same financial report where they posted $15 billion in unrealized losses which effectively wiped out the bank’s capital.

  The day before the earnings announcement, SVB stock closed at $250.04. The day after the earnings call, the stock closed at $291.44.

  In other words, despite SVB management disclosing that their entire bank capital was effectively wiped out, ‘expert’ Wall Street investors excitedly bought the stock and bid the price up by 16%. The stock continued to soar, reaching a high of $333.50 a few days later on February 1st.

  In short, all the warning signs were there. But the experts failed again. The FDIC saw Silicon Valley Bank’s dismal condition and did nothing. The Federal Reserve did nothing. Investors cheered and bid the stock up.

  And this leads me to my next point:

  4) The unraveling can happen in an instant.

  A week ago, everything was still fine. Then, within a matter of days, SVB’s stock price plunged, depositors pulled their money, and the bank failed. Poof.

  The same thing happened with Lehman Brothers in 2008. In fact over the past few years we’ve been subjected to example after example of our entire world changing in an instant.

  We all remember that March 2020 was still fairly normal, at least in North America. Within a matter of days people were locked in their homes and life as we knew it had fundamentally changed.

  5) This is going to keep happening.

  Long-time readers won’t be surprised about this; I’ve been writing about these topics for years– bank failures, looming instability in the financial system, etc.

  Late last year I recorded a podcast explaining how the Fed was engineering a financial meltdown by raising interest rates so quickly, and they would have to choose between a rock and a hard place, i.e. higher inflation versus financial catastrophe.

  This is the financial catastrophe, but it’s just getting started. Like Lehman Brothers in 2008, SVB is just the tip of the iceberg. There will be other casualties– not just in banks, but money market funds, insurance companies, and even businesses.

  Foreign banks and institutions are also suffering losses on their US government bonds… and that has negative implications on the US dollar’s reserve status.

  Think about it: it’s bad enough that the US national debt is outrageously high, that the federal government appears to be a bunch of fools incapable of solving any problem, and that inflation is terrible.

  Now on top of everything else, foreigners who bought US government bonds are suffering tough losses as well.

  Why would anyone want to continue with this insanity? Foreigners have already lost so much confidence in the US and the dollar… and financial losses from their bond holdings could accelerate that trend.

  This issue is particularly of mind now that China is flexing its international muscle, most recently in the Middle East making peace between Iran and Saudi Arabia. And the Chinese are starting to actively market their currency as an alternative to the dollar.

  But no one in charge seems to understand any of this.

  The guy who shakes hands with thin air insisted this morning that the banking system is safe. Nothing to see here, people.

  The Federal Reserve– which is the ringleader of this sad circus– doesn’t seem to understand anything either.

  In fact Fed leadership spent all of last week insisting that they were going to keep raising interest rates.

  Even after last week’s banking crisis, the Fed probably still hasn’t figured it out. They appear totally out of touch with what’s really happening in the economy. And when they meet again next week, it’s possible they’ll raise rates even higher (and trigger even more unrealized losses).

  So this drama is far from over.

  Tyler Durden
  Mon, 03/13/2023 – 19:20

• Michigan Governor Admits COVID-19 Lockdowns Went Too Far
  Michigan Governor Admits COVID-19 Lockdowns Went Too Far

  Michigan Gov. Gretchen Whitmer (D) admitted on Sunday that her administration’s pandemic-era lockdown policies went too far, such as her April 2020 executive order barring most stores from selling gardening supplies, including seeds and plants, to Americans who anted to grow their own fruits and vegetables.

  

  “There were moments where, you know, we had to make some decisions that in retrospect don’t make a lot of sense, right? If you went to the hardware store, you could go to the hardware store but we didn’t want people to be congregating around the garden supplies,” Whitmer told CNN’s Chris Wallace.

  “People said ‘oh, she’s outlawed seeds.’ It was February in Michigan, no one was planting anyway,” she continued (except it was in April). “But that being said, some of those policies I look back and think, you know, maybe that was a little more than what we needed to do.”

  Michigan Gov. Gretchen Whitmer admits locking down her state and restricting seed sales “was a little more than we needed to do.”

  Apologies aren’t enough.pic.twitter.com/CDPPbR4utZ

  — Ben Swann (@BenSwann_) March 13, 2023

  Whitmer’s office even published a list of prohibited items deemed “not necessary to sustain or protect life,” which couldn’t be sold during the height of the pandemic, and which required that businesses physically restrict customers from certain areas of stores, or to remove nonessential items – including gardening items, flooring materials, furniture and paint.

  Just weeks after Whitmer imposed the statewide controversial ban, the order was rescinded due to widespread backlash, including from the Institute for Justice.

  In a letter (pdf), the non-profit law firm criticized the governor’s “unconstitutional prohibition” for “impeding the rights of the many Michigan families who seek to grow their own food.” -Epoch Times

  Whitmer’s order even banned travel from one residence to another, including vacation properties, rental properties, or second homes within the state.

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  Tyler Durden
  Mon, 03/13/2023 – 19:00

• Johnstone: Imperial Narrative Managers Always Try To Make Peace Seem Unnatural
  Johnstone: Imperial Narrative Managers Always Try To Make Peace Seem Unnatural

  Authored by Caitlin Johnstone via Medium.com,

  I’ve been ranting all week about the shocking war-with-China propaganda escalation in Australian mainstream media, and I feel like I could easily scream about it for another month without running out of vitriol for the disgusting freaks who are pushing this filth into the consciousness of my countrymen. One really really can’t say enough unkind things about people who are openly trying to pave the way toward an Atomic Age world war; in a remotely sane world such monsters would be driven from human civilization and die cold and alone in the wilderness with nothing but their bloodlust to keep them company.

  

  One of the most obnoxious things said during this latest propaganda push appeared in the joint statement provided by the five “experts” (read: empire-funded China hawks) recruited by The Sydney Morning Herald and The Age to share their obscenely hawkish opinions in an official-looking media presentation. This paragraph has been rattling around in my head since I first read it:

  “Australia must prepare itself. Most important of all is a psychological shift. Urgency must replace complacency. The recent decades of tranquillity were not the norm in human affairs but an aberration. Australia’s holiday from history is over. Australians should not feel afraid but be alert to the threats we face, the tough decisions we must make and know that they have agency. This mobilisation of mindset is the essential prerequisite to any successful confrontation of China.”

  Do you see what they’re doing there? These professional China hawks are explicitly trying to frame peace as a strange “aberration”, and war as the status quo norm. They’re saying Australians require a “psychological shift” and a “mobilisation of mindset” from thinking peace is normal and healthy to thinking war is normal and healthy.

  Returning to Australia is a shock. The elite salivates for a deeply racist war against China. Australia has no enemies but is led and influenced by little Americans and echoes of spooks who fill the papers with a deranged, almost satirical hysteria. Sad.https://t.co/s723vk8Zv8

  — John Pilger (@johnpilger) March 9, 2023

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  Which is of course ass-backwards and shit-eating insane. Every normal, healthy person regards peace as the default position and violence as a rare and alarming aberration which must be avoided whenever possible.

  We know this is true from our normal human experience of our own personal lives. None of us spend the majority of our time getting into fist fights, for example; anyone who spends most of their waking life physically assaulting people has probably been locked up a long time ago. If you have ever been in a fist fight you will recall that it was experienced as a rare and alarming occurrence, and everything in your body was screaming at you that this was a freakish and unnatural thing which must end as quickly as possible the entire time. In healthy people violence is experienced as abnormal, and its absence is experienced as normal.

  This normal, baseline position is what imperial narrative managers spend their time trying to “psychologically shift” everyone away from, propagandizing us instead into accepting continuous conflict and danger as the norm. Such a shift is beneficial to the empire, to war profiteers, and to professional war propagandists, and is entirely destructive to everyone else. It causes us to accept material conditions which directly harm our own interests, and it makes us crazy and neurotic as a civilization.

  You see it all the time though, like whenever there’s a push to withdraw imperial troops from some part of the Middle East they’ve been in for years, or the slightest discussion of maybe not raising the military budget this year, or skepticism that pouring weapons into a violence-ravaged part of the world is the wisest and most helpful thing to do.

  Aww, did somebody get addicted to fueling endless war and division in the middle east? https://t.co/Abq31LLp0x pic.twitter.com/iJrlRasyec

  — Caitlin Johnstone (@caitoz) March 11, 2023

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  Any time we see the slightest beginnings of the tiniest movement toward stepping away from the path of nonstop warmongering and militarism, pundits and politicians begin bleating words like “isolationism” and “appeasement” in an attempt to make calls for de-escalation, demilitarization, diplomacy and detente look freakish and abnormal in contrast to the sane, responsible status quo of hurtling toward nuclear armageddon at full tilt.

  Their job is to abnormalize peace and normalize war, which means our job as healthy human beings is to do the exact opposite. We must help everyone understand the horrors of war and the unfathomable nightmares that can be unleashed by reckless brinkmanship, and help people to understand that peace is what’s healthy and to imagine a future where it is the norm.

  The bad news is that we are pushing against a narrative-manufacturing apparatus that is backed by the might of a globe-spanning empire. The good news is that our vision is the one that’s based on truth, and deep down everyone can sense it. All we need to do to get people viewing peace as normal and war as abnormal is to remind people of what they already know inside.

  *  *  *

  My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, following me on Facebook, Twitter, Soundcloud or YouTube, throwing some money into my tip jar on Patreon or Paypal, or buying an issue of my monthly zine. If you want to read more you can buy my books. The best way to make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. All works co-authored with my husband Tim Foley.

  Bitcoin donations:1Ac7PCQXoQoLA9Sh8fhAgiU3PHA2EX5Zm2

  Tyler Durden
  Mon, 03/13/2023 – 18:40

• DB: "Today's Events Are Consistent With An Imminent US Recession"
  DB: “Today’s Events Are Consistent With An Imminent US Recession”

  One of the better big picture recaps of today’s price action comes from DB FX strategist George Saravelos, who writes that “the market is sending a consistent message today: it fears that a US recession is about to start.”

  Below we excerpt from his note:

  We are now pricing in Fed cuts rather than hikes, the yield curve is bull steepening sharply, commodities and equities are down with cyclicals underperforming.This is all consistent with an imminent US recession.

  Without taking a strong view on whether this will indeed happen, it is worth making three observations.

  • First, a systemic financial event is not a necessary condition for recessionary dynamics. Competition for deposits is likely to become irreversibly more intense in the US banking system going forward, leading to an upward drift in the bank-based cost of financing and an extra layer of tightening hitting the real economy. How large this is remains to be seen but as our economists have highlighted, the starting point of bank lending conditions has in any case already been extremely weak.

  • Second, the dollar is behaving extremely unusually, down against the vast majority of G10 and EM currencies despite a recession priced in. Can this be sustained? If dollar funding and money markets remain well behaved, we argued earlier today the answer is most likely yes. This is an exceptionally unusual cycle where the dollar has front-loaded recessionary pricing far more than any other period in history. What is more, given the relative starting point of monetary policy, there remains asymmetric potential for an interest rate differential narrowing against the USD even in a slower global growth environment. In other words, what matters most for the USD is if the Fed decides to paused then eventually cut.

  • Third, the correlation breakdown between risk appetite and the dollar will put pressure on portfolio construction if sustained. Most asset manager’s asset allocation has over the last decade been constructed on the basis of a negative correlation between the USD and risk appetite. When equities sell-off, the dollar rallies providing natural protection for foreign currency investors and creating an incentive to hold dollar positions unhedged. We highlighted earlier this year how this dynamic was slowly starting to shift. If the dollar entirely stops providing hedging value to underlying US risky asset positions it would likely add another leg of pressure to the USD.

  More in the full note available to pro subs.

  Tyler Durden
  Mon, 03/13/2023 – 18:20

• China To Host Major Middle East Summit After 'Success' Of Iran-Saudi Deal
  China To Host Major Middle East Summit After ‘Success’ Of Iran-Saudi Deal

  Via The Cradle,

  A high-level gathering of Gulf Arab states and Iranian officials is on track to take place later this year in the Chinese capital Beijing, according to sources that spoke with the Wall Street Journal (WSJ).

  Chinese President Xi Jinping pitched the idea for the summit during a regional summit he attended in Riyadh last December. According to the report published on Sunday, the leaders from the six-country Gulf Cooperation Council (GCC) welcomed Xi’s proposal to reduce tensions with Iran.

  

  On Friday, Beijing brokered a historic deal to restore relations between Iran and Saudi Arabia. These two superpowers cut ties in 2016 and have historically backed rivaling factions in regional conflicts.

  The agreement was praised across the Global South. It was described by many as a significant power play by China in becoming a top power broker in West Asia at a time when US influence continues to diminish.

  This reality was made evident during last week’s secret talks between Iranian and Saudi officials in Beijing, where, per the WSJ, “all parties agreed not to use English in the negotiations, with speeches and documents conducted in Arabic, Farsi or Mandarin.”

  The agreement gives Riyadh and Tehran two months to hammer out all details before the countries’ foreign ministers meet to sign a finalized deal. Sources say the Iran-GCC summit would occur “sometime after that.”

  According to the report, the deal signed on Friday calls – among other things – for Saudi Arabia to order Iran International to “tone-down critical coverage” of the Islamic Republic. At the same time, Tehran reportedly agreed to “stop encouraging cross-border attacks on Saudi Arabia” by Yemen’s Ansarallah resistance movement.

  Saudi officials have hopes that Beijing can “use its economic ties to influence Iran’s behavior,” as China remains the biggest importer of Iranian oil.

  According to Iran’s state-owned Mehr News Agency, ahead of Friday’s deal, China allowed Tehran to access parts of funds frozen in Chinese banks due to Washington’s “maximum pressure” sanctions campaign.

  During his visit to Riyadh in December, Xi called on Arab states to remain “independent and defend their common interests,” adding that China “supports Arab states in independently exploring development paths suited to their national conditions and holding their future firmly in their own hands.”

  He also vowed to import more oil and natural gas from Gulf Arab states while not interfering in their affairs, a departure from Washington’s long-standing policy of interference and domination.

  Tyler Durden
  Mon, 03/13/2023 – 18:00

• Late Season Nor'easter Set To Wallop Millions In Northeast
  Late Season Nor’easter Set To Wallop Millions In Northeast

  Besides the regional banking crisis dominating headlines Monday morning, the Northeast is bracing for a late-winter nor’easter that will bring heavy snow, rain, and strong winds. The National Weather Service said the storm’s impacts would begin tonight.

  

  Heavy snow rates and strong winds up to 50 mph will produce dangerous conditions and might impede travel in parts of the Northeast, the Weather Prediction Center wrote in an early morning update. 

  The heavy-wet nature of the snow, combined with max wind gusts up to 50 mph, will result in scattered to widespread power outages and tree damage. Similar impacts could be felt along the I-95 corridor from New York City to Boston.

   In addition, March Nor Easters tend to favor the more elevated terrain for receiving the heaviest snowfall totals. Snowfall totals greater than 12 inches are expected in the Catskills and southern Adirondacks in New York State, Berkshires and Worcester Hills in Massachusetts, Monadnocks and White Mountains in New Hampshire, and southern Green Mountains in Vermont. Localized maximum totals of 24-30 inches are possible. 

  Widespread minor coastal flooding and beach erosion may be possible through Wednesday as the low-pressure stalls and deepens off the coast of New England.

  Millions of people across Northeastern Pennsylvania, New York, and New England are under winter storm warnings, watches, and advisories. 

  

  Forecasted snowfall amounts for the Northeast through midweek.

  

  However, for New York City, Bob Oravec, a meteorologist at the Weather Prediction Center, told NYTimes that the storm’s going to be “predominantly” a rain event for the metro area. 

  Tyler Durden
  Mon, 03/13/2023 – 17:40

• Hudson: Why The Banking System Is Breaking Up
  Hudson: Why The Banking System Is Breaking Up

  Authored by Michael Hudson,

  The collapses of Silvergate and Silicon Valley Bank are like icebergs calving off from the Antarctic glacier. The financial analogy to the global warming causing this collapse of supporting shelving is the rising temperature of interest rates, which spiked last Thursday and Friday to close at 4.60 percent for the U.S. Treasury’s two-year bonds. Bank depositors meanwhile were still being paid only 0.2 percent on their deposits. That has led to a steady withdrawal of funds from banks – and a corresponding decline in commercial bank balances with the Federal Reserve.

  

  Most media reports reflect a prayer that the bank runs will be localized, as if there is no context or environmental cause. There is general embarrassment to explain how the breakup of banks that is now gaining momentum is the result of the way that the Obama Administration bailed out the banks in 2008 with fifteen years of Quantitative Easing to re-inflate prices for packaged bank mortgages – and with them, housing prices, along with stock and bond prices.

  The Fed’s $9 trillion of QE (not counted as part of the budget deficit) fueled an asset-price inflation that made trillions of dollars for holders of financial assets – the One Percent with a generous spillover effect for the remaining members of the top Ten Percent. The cost of home ownership soared by capitalizing mortgages at falling interest rates into more highly debt-leveraged property. The U.S. economy experienced the largest bond-market boom in history as interest rates fell below 1 percent. The economy polarized between the creditor positive-net-worth class and the rest of the economy – whose analogy to environmental pollution and global warming was debt pollution.

  But in serving the banks and the financial ownership class, the Fed painted itself into a corner: What would happen if and when interest rates finally rose?

  In Killing the Host I wrote about what seemed obvious enough. Rising interest rates cause the prices of bonds already issued to fall – along with real estate and stock prices. That is what has been happening under the Fed’s fight against “inflation,” its euphemism for opposing rising employment and wage levels. Prices are plunging for bonds, and also for the capitalized value of packaged mortgages and other securities in which banks hold their assets on their balance sheet to back their deposits.

  The result threatens to push down bank assets below their deposit liabilities, wiping out their net worth – their stockholder equity. This is what was threatened in 2008. It is what occurred in a more extreme way with S&Ls and savings banks in the 1980s, leading to their demise. These “financial intermediaries” did not create credit as commercial banks can do, but lent deposits out in the form of long-term mortgages at fixed interest rates, often for 30 years. But in the wake of the Volcker spike in interest rates that inaugurated the 1980s, the overall level of interest rates remained higher than the interest rates that S&Ls and savings banks were receiving. Depositors began to withdraw their money to get higher returns elsewhere, because S&Ls and savings banks could not pay higher their depositors higher rates out of the revenue coming in from their mortgages fixed at lower rates. So even without fraud Keating-style, the mismatch between short-term liabilities and long-term interest rates ended their business plan.

  The S&Ls owed money to depositors short-term, but were locked into long-term assets at falling prices. Of course, S&L mortgages were much longer-term than was the case for commercial banks. But the effect of rising interest rates has the same effect on bank assets that it has on all financial assets. Just as the QE interest-rate decline aimed to bolster the banks, its reversal today must have the opposite effect. And if banks have made bad derivatives trades, they’re in trouble.

  Any bank has a problem of keeping its asset valuations higher than its deposit liabilities. When the Fed raises interest rates sharply enough to crash bond prices, the banking system’s asset structure weakens. That is the corner into which the Fed has painted the economy by QE.

  The Fed recognizes this inherent problem, of course. That is why it avoided raising interest rates for so long – until the wage-earning bottom 99 Percent began to benefit by the recovery in employment. When wages began to recover, the Fed could not resist fighting the usual class war against labor. But in doing so, its policy has turned into a war against the banking system as well.

  Silvergate was the first to go, but it was a special case. It had sought to ride the cryptocurrency wave by serving as a bank for various currencies. After SBF’s vast fraud was exposed, there was a run on cryptocurrencies. Investor/gamblers jumped ship. The crypto-managers had to pay by drawing down the deposits they had at Silvergate. It went under.

  Silvergate’s failure destroyed the great illusion of cryptocurrency deposits. The popular impression was that crypto provided an alternative to commercial banks and “fiat currency.” But what could crypto funds invest in to back their coin purchases, if not bank deposits and government securities or private stocks and bonds? What is crypto, ultimately, if not simply a mutual fund with secrecy of ownership to protect money launderers?

  Silicon Valley Bank also is in many ways a special case, given its specialized lending to IT startups. New Republic bank also has suffered a run, and it too is specialized, lending to wealthy depositors in the San Francisco and northern California area. But a bank run was being talked up last week, and financial markets were shaken up as bond prices declined when Fed Chairman Jerome Powell announced that he actually planned to raise interest rates even more than he earlier had targeted, in view of the rising employment making wage earners more uppity in their demands to at least keep up with the inflation caused by the U.S. sanctions against Russian energy and food and the actions by monopolies to raise prices “to anticipate the coming inflation.” Wages have not kept pace with the resulting high inflation rates.

  It looks like Silicon Valley Bank will have to liquidate its securities at a loss. Probably it will be taken over by a larger bank, but the entire financial system is being squeezed. Reuters reported on Friday that bank reserves at the Fed were plunging. That hardly is surprising, as banks are paying about 0.2 percent on deposits, while depositors can withdraw their money to buy two-year U.S. Treasury notes yielding 3.8 or almost 4 percent. No wonder well-to-do investors are running from the banks.

  The obvious question is why the Fed doesn’t simply bail out banks in SVB’s position. The answer is that the lower prices for financial assets looks like the New Normal. For banks with negative equity, how can solvency be resolved without sharply reducing interest rates to restore the 15-year Zero Interest-Rate Policy (ZIRP)?

  There is an even larger elephant in the room: derivatives. Volatility increased last Thursday and Friday. The turmoil has reached vast magnitudes beyond what characterized the 2008 crash of AIG and other speculators. Today, JP Morgan Chase and other New York banks have tens of trillions of dollar valuations of derivatives – casino bets on which way interest rates, bond prices, stock prices and other measures will change.

  For every winning guess, there is a loser. When trillions of dollars are bet on, some bank trader is bound to wind up with a loss that can easily wipe out the bank’s entire net equity.

  There is now a flight to “cash,” to a safe haven – something even better than cash: U.S. Treasury securities. Despite the talk of Republicans refusing to raise the debt ceiling, the Treasury can always print the money to pay its bondholders. It looks like the Treasury will become the new depository of choice for those who have the financial resources. Bank deposits will fall. And with them, bank holdings of reserves at the Fed.

  So far, the stock market has resisted following the plunge in bond prices. My guess is that we will now see the Great Unwinding of the great Fictitious Capital boom of 2008-2015. So the chickens are coming hope to roost – with the “chicken” being, perhaps, the elephantine overhang of derivatives fueled by the post-2008 loosening of financial regulation and risk analysis.

  Tyler Durden
  Mon, 03/13/2023 – 17:20

Digest powered by RSS Digest

• UK Tech Firms Face "Serious Risk" From Silicon Valley Bank Collapse, Chancellor Warns
  UK Tech Firms Face “Serious Risk” From Silicon Valley Bank Collapse, Chancellor Warns

  Authored by Alexaqnder Zhang via The Epoch Times,

  There is a “serious risk” to the UK’s technology and life sciences sectors from the collapse of the UK branch of the California-based Silicon Valley Bank, Chancellor Jeremy Hunt has warned.

  

  U.S. federal banking regulators on March 10 assumed control of Silicon Valley Bank (SVB), a top lender for American tech and life sciences firms and start-ups.

  The collapse of SVB, the 16th biggest bank in the United States, is the largest bank failure since Washington Mutual in 2008, during the last major bank crisis.

  The Bank of England (BoE), the UK’s central bank, announced on March 11 that Silicon Valley Bank UK (SVBUK) is also set to enter insolvency.

  The company will stop making payments and accepting deposits, said the BoE.

  Talking to Sky News on Sunday, Hunt said the collapse poses “no systemic risk” to Britain’s financial system.

  But he said, “There is a serious risk to our technology and life sciences sectors, many of whom bank with this bank.”

  Chancellor of the Exchequer Jeremy Hunt (right), with Energy Secretary Grant Shapps, speaking at a meeting of senior leaders from across UK green industries at Queen Elizabeth Olympic Park, east London, on Feb. 21, 2023. (Stefan Rousseau/PA Media)

  ‘Significant Impact’

  In a statement on Sunday morning, the Treasury said it was treating the issue “as a high priority.”

  “The government and the Bank understand the level of concern that this raises for customers of Silicon Valley Bank UK, and especially how it may impact on cash flow positions in the short term,” the statement said.

  It added that the government recognises SVBUK’s failure “could have a significant impact on the liquidity of the tech ecosystem.”

  While Silicon Valley Bank has a limited presence in the UK and does not perform functions critical to the financial system, the Coalition for a Digital Economy (Coadec) warned that its collapse could have a significant impact on tech start-ups.

  Coadec executive director Dom Hallas said on Saturday:

  “We know that there are a large number of start-ups and investors in the ecosystem who have significant exposure to SVBUK and will be very concerned.

  “We have been engaging with the UK government, including Treasury and Number 10, about the potential impact and I know that work has been going on overnight on policy options.”

  ‘Everything We Can’

  The chancellor said the government and the Bank of England will do “everything we can” to protect the firms that stand to lose millions from the collapse of SVBUK.

  “The prime minister and I and the governor of the Bank of England are absolutely determined to do everything we can to protect the future of these very, very important companies,” he told Sky News.

  “We will come forward with a solution that helps those very, very important companies with things like payroll and their cash flow requirements, but we also want to put in place a longer-term solution so that their futures are secure.”

  Asked if that could mean stepping in with taxpayers’ money, he said he did not “want to go into what the solution is.”

  Hunt also declined to say whether the government will guarantee all the deposits of the companies in the collapsed bank.

  He told the BBC:

  “We want to find a way that minimises or, if we possibly can, avoids all losses to those incredibly promising companies. What we will do is bring forward very quickly a plan to make sure that they can meet their operational cash flow requirements.”

  Labour Calls for ‘Specific Plans’

  The main opposition Labour Party has accused the Conservative government of lacking “urgency” in its handling of the collapse of SVBUK.

  Labour’s shadow chancellor Rachel Reeves urged the government to offer more than “warm words” to the affected companies.

  She told Sky News on Sunday:

  “I am slightly concerned about the urgency that you heard from the chancellor there, because when markets open tomorrow morning, a lot of businesses in the UK are not going to be clear about how they can pay the wages of their staff and whether their deposits with Silicon Valley Bank and their financing arrangements are still in place.

  “So, I would urge the government to do more than offer warm words, but come forward with specific plans.”

  Talking to the BBC, Reeves said the British start-up industry must not “pay the price” for the failure of the bank.

  She said: “We need tomorrow morning to hear from the government how they are going to protect them.”

  “We cannot let the British start-up community pay the price for this bank failure, because it will be the British economy then that ultimately pays the price,” she added.

  Tyler Durden
  Mon, 03/13/2023 – 02:00

• The Forced Medication of All Citizens
  The Forced Medication of All Citizens

  Authored by Karen Hunt via Off-Guardian.org,

  “…most men and women will grow up to love their servitude and will never dream of revolution.”

  – Aldous Huxley, Brave New World

  It all started back in the 1950s with “these drugs will make you feel better, just try them.” And people did.

  

  Over the years it morphed into “WE RECOMMEND these drugs if you don’t want to be sick, depressed or dead.” Almost everyone listened and accepted that drugs were the answer and there was no way to live without them.

  Over the past three years it’s been “YOU MUST TAKE these drugs or else you endanger your own life and the lives of those around you.” By this point, people were so conditioned to take drugs that they thought nothing of submitting to an experimental mRNA gene therapy that the experts promised would keep them “safe”.

  Within the next couple of years, it will be “YOU ARE REQUIRED to take these drugs by law and if you don’t, you will go to prison for endangering the planet.” Having been consistently brainwashed for all these years, most people will unquestioningly comply. Those who don’t, will be informed on by neighbors, coworkers, even their own family members, for the safety of the planet.

  Too radical, you say. Read on and see.

  Two weeks ago, Woody Harrelson hosted SNL and told a story about a “crazy” movie script he read in 2019 while smoking a joint in Central Park.

  The movie goes like this: The biggest drug cartels in the world get together and buy up all the media and all the politicians and force all the people in the world to stay locked in their homes. And people can only come out if they take the cartel’s drugs and keep taking them over and over.”

  Hey! Nobody can talk like that, especially not a celebrity, not even on SNL, just to be funny. Immediately, his comedy routine had to be debunked. Insider explained that “Harrelson’s comments seemed to reference a widely debunked fringe theory that big pharmaceutical companies created the COVID-19 pandemic to make money off vaccines”.

  I know. So, fringe. Nobody would be stupid enough to fall for a conspiracy theory like that.

  Remember the big chemical spill in Palestine, Ohio a couple of weeks ago? It’s already old news, but guess what?

  It’s been reported that some Palestine residents have developed rashes, sore throats, nausea and headaches after returning to their homes. Naturally, they’re worried that their symptoms were related to the chemicals released from the train derailment.

  Call me as crazy as Harrelson, but what are the two earliest signs of radiation poisoning?

  • Nausea and Vomiting. Sometimes, nausea and vomiting represent the first round of signs of radiation poisoning.

  • Skin Damage. The areas exposed to radiation may form blisters and, in some cases, open sores.

  I’m not saying the residents are suffering from radiation sickness. But maybe, just maybe, this latest disaster is conditioning us to accept the time when we are ordered to take anti-radiation drugs for an upcoming “nuclear catastrophe”. The disaster could be real, or it couldn’t, we have no way of knowing. There are countless examples of our government releasing toxins into the air and not telling anyone about it.

  As just one example:

  From 1944 to 1974, both the Defense Department and the Atomic Energy Commission conducted hundreds of secret experiments in San Francisco and around the country that exposed unsuspecting patients to dangerous doses of radiation, including injections of plutonium.

  All of which makes me wonder about Covid and the Wuhan lab. Any suggestion of a lab leak was a conspiracy theory—until it wasn’t. We are now being told that:

  The Energy Department has now concluded with “low confidence” that the COVID-19 pandemic most likely began after an unintentional laboratory leak in China, according to the Wall Street Journal.

  First, it’s “concluded” then it’s “low confidence”. Which one is it? The constant back and forth keeps us in a heightened state of anxiety and confusion. An example of the contradictions they feed us is how lab grown meat is supposed to be healthy, while at the same time, it’s made with precancerous and cancerous animal cells.

  According to Bloomberg:

  For decades, companies such as Pfizer Inc. and Johnson & Johnson have cultured large volumes of cells to produce vaccines, monoclonal antibodies and other biotherapeutics. Now the idea is that we might as well eat these cells, too.

  … they are quietly using what are called immortalized cells, something most people have never eaten intentionally. Immortalized cells are a staple of medical research, but they are, technically speaking, precancerous and can be, in some cases, fully cancerous.

  So, let me get this straight. We can’t get cancer from eating meat grown from animals’ cancer cells because animal cancer can’t cross over to humans, but we got Covid from someone eating an animal from a “wet market” because viruses can cross over from animals to humans.

  Except that now we are being told it didn’t happen like that. Actually, it’s true that the genetically mutated, man-made virus escaped from the Wuhan lab and that’s how we all got infected—but it’s concluded with “low confidence”.

  So, is it a bioweapon, or isn’t it? Will they ever give us details on how the virus was mutated? Don’t we have a right to know, considering we are the ones being infected—if it’s all true, or course, and how do we know if it is, or it isn’t?

  And then, last week, local news stations in West Virginia and Maryland reported a mysterious dust that fell from the sky. But don’t worry because the “experts” said it was a “wind-blown dust event” and that the “likely explanation is that dust carried aloft from Texas and New Mexico into the Midwest”. [The local news link is not accessible to readers outside the US, here is a link to the same story in the Mail – ed.]

  Why can’t they ever say anything definitive? Why is it only the “likely explanation“. What good are experts if they are never sure of anything?

  Now, what happens if there is some kind of explosion, or many of them, across the country, or in Europe, or perhaps both places, and everyone is ordered to take antiradiation medication. Are you going to say no?

  You might be the most skeptical person in the world. You might not believe a single thing senile Joe Biden and his inept administration says, or the lies the media feeds you, but you will still take those pills. And you will give them to your children.

  Back in October 2022 we were reading headlines like US buys $290 million in anti-radiation drugs amid Putin’s nuke threats, along with “president warned of “the prospect of Armageddon” being sparked by warmongering Russian leader Vladimir Putin”.

  More conditioning.

  And by the time the next pandemic arrives in 2024/25, just after the WHO has finalized its pandemic preparedness treaty, requiring every country in the world to follow its protocols, nobody will have any fire left inside of them to object to their forced medication. They will just be thankful they survived the radiation. Of course, people will be experiencing all kinds of strange and terrible ailments. “Long Covid” and “sudden deaths” will be nothing in comparison.

  Thank goodness the UN announced in late February that governments began negotiating the drafting of a WHO instrument on pandemic prevention, preparedness, and response.

  How comforting to know they are looking ahead to protect us. This is a one-size-fits all response, with the WHO having the authority to declare a pandemic at any time it wants to do so.

  According to the Epoch Times:

  The Biden administration is in the process of finalizing a deal that would give the WHO near-total authority to dictate America’s policies during a pandemic. This includes vaccine policies, lockdown policies, school closure policies, the contact tracing of U.S. citizens, and even the monitoring of online speech if that speech goes against the official narrative.”

  Which of course is labeled a conspiracy theory by the mainstream media. Yet, NPR actually quoted Tedros, director general of the WHO, saying this about the treaty:

  The idea behind this upcoming session of the World Health Assembly, Tedros says, is to start sketching out a new world order to handle future health crises.

  “We don’t have rules of the game,” Tedros says of the current situation. “To manage shared problems, like pandemics, you need laws and rules that bring obligations to countries. That’s what we miss. And I hope countries will agree to a binding pact so that pandemics can be managed better.”

  Back in January 2022, Tedros explained the treaty was a “priority” to…

  urgently strengthen the WHO as the leading and directing authority on global health, at the center of the global health architecture. We all want a world in which science triumphs over misinformation; solidarity triumphs over division; and equity is a reality, not an aspiration.”

  According to the WHO this treaty needs to be signed and implemented by 2024. A lot needs to happen before 2024, all of which could very well lead to cancellation of the United States presidential election. We are running out of time.

  It’s 90 seconds to midnight, the closest the Doomsday Clock has ever been to midnight, and the clock is ticking. Events certainly seem to be leading up to an apocalypse.

  • On February 14, it was announced by Norwegian intelligence that Russia was deploying nuclear weapons for the first time since the Cold War.

  • On February 21, Russian President Vladimir Putin declared that Moscow was suspending its participation in the New START treaty — the last remaining nuclear arms control pact with the United States.

  Analysts agree that:

  Russia’s tactical weapons stockpile is a hedge against the qualified superiority of NATO conventional forces—not necessarily a first-strike solution, but rather a tool meant to level the playing field in the event that Russia starts losing a major continental war.

  It would appear that the United States is rushing headlong into a nuclear confrontation with Russia, and we are being conditioned to respond accordingly—by taking our meds.

  Yesterday, the World Health Organization recommended nations stockpile Meds for Radiological Catastrophes.

  “Governments need to make treatments available for those in need—fast. It is essential that governments are prepared to protect the health of populations and respond immediately to emergencies. This includes having ready supplies of lifesaving medicines that will reduce risks and treat injuries from radiation.”

  What is the best way to respond to global emergencies FAST? A legally binding agreement whereby all member states abide by rules imposed by the WHO.

  Again, the Epoch Times:

  Francis Boyle, professor of international law at the University of Illinois College of Law, said that the treaty “would set up a worldwide medical police state under the control of the WHO, and in particular WHO Director-General Tedros.”

  Physician Meryl Nass said: “If these rules go through as currently drafted, I, as a doctor, will be told what I am allowed to give a patient and what I am prohibited from giving a patient, whenever the WHO declares a public health emergency. So they can tell you you’re getting remdesivir, but you can’t have hydroxychloroquine or ivermectin. What they’re also saying is they believe in equity, which means everybody in the world gets vaccinated, whether or not you need it, whether or not you’re already immune.”

  “Whoever drafted this clause knew as much about U.S. constitutional law and international law as I did, and deliberately drafted it to circumvent the power of the Senate to give its advice and consent to treaties, to provisionally bring it into force immediately upon signature,” Boyle said.

  Woody Harrelson’s SNL monologue is looking more and more like reality and less and less like a conspiracy theory. So, let’s read that one more time:

  The biggest drug cartels in the world get together and buy up all the media and all the politicians and force all the people in the world to stay locked in their homes. And people can only come out if they take the cartel’s drugs and keep taking them over and over.”

  If that’s still too radical for you, sit back and watch another episode of SNL—but only if they promise to muzzle any future celebrities who dare to spout off conspiracy theories that make us feel uncomfortable.

  Tyler Durden
  Sun, 03/12/2023 – 23:45

• Pause: Goldman No Longer Expects Fed To Hike In March Due To "Stress In The Banking System"
  Pause: Goldman No Longer Expects Fed To Hike In March Due To “Stress In The Banking System”

  Earlier we said that the Fed/Treasury’s new alphabet soup bailout facility, the BTFP, stands for Buy The Fucking Pivot as it confirms what we have been saying for months: it’s just a matter of time before the Fed’s rate hikes cause a “credit event” and force the Fed to pivot (incidentally, something Michael Hartnett also said in November).

  Of course, before a Fed “Pivot” we need to go through a brief “Pause” period, and moments ago Goldman – which was dead wrong on its call for “transitory inflation” in all of 2021 and which for much of 2022 and early 2023 claimed that the Fed will keep hiking “higher for longer” – just admitted it was wrong again in expecting more hikes, and responded to our rhetorical question from yesterday in which we asked if “the Fed is going to keep hiking as the government backstops banks on the verge of failure due to high rates?”…

  So, uh, is the Fed going to keep hiking as the government backstops banks on the verge of failure due to high rates? pic.twitter.com/Za3p2r4Yrw

  — zerohedge (@zerohedge) March 12, 2023

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

  … by saying that the Fed is done.

  Below we excerpt from a note just published by Goldman’s chief economist and (former) uber-hawkish preacher, Jan Hatzius, who just threw in the towel on more rate hikes. Expect the rest of Wall Street to follow in the next few hours.

  The Treasury, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) made two major policy announcements intended to stabilize the banking system in response to recent bank failures and the risk of continued deposit outflows. We expect these measures to provide substantial liquidity to banks facing deposit outflows and to improve confidence among depositors. In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March

  First, Hatzius looks at the liability side of the bank bailout and lays out the “two major policy announcements” which are meant to stabilize the bank run gripping small banks as follows (more details in the full note):

  The FDIC has used the ‘systemic risk exception’ (SRE) to protect uninsured depositors in two bank resolutions, Silicon Valley Bank and Signature Bank. In both cases, the costs not covered by the banks’ assets would be funded out of the FDIC’s Deposit Insurance Fund (DIF), which had a $125bn balance as of Q4 2022. The SRE waives the requirement that FDIC resolution uses the method that is least costly to the DIF.

  Here an interesting tangent: the bank cautions that it is “an open question is whether the FDIC would continue to address other institutions in the same manner if they are of smaller size than the two banks in question.” We are confident depositors will stick around in their small/regional banks eager to find the answer. Or maybe not.

  The Fed and Treasury also announced the Bank Term Funding Program (BTFP), which would provide advances of up to one year to any federally insured bank that is eligible for discount window access, in return for eligible collateral (generally Treasuries and agency securities). A key aspect of the facility is that the Fed would value collateral at par without the standard haircut the Fed applies in other programs. This will allow banks to fund potential deposit outflows without crystalizing losses on depreciated securities. The loans are made with “recourse beyond the pledged collateral to the eligible borrower” suggesting that the par valuation of the collateral would only become relevant if the borrowing institution lacks sufficient assets to repay the loan. The facility is backstopped with $25bn from the Treasury’s Exchange Stabilization Fund (ESF), which has a net balance of $38bn.

  … and is thus woefully insufficient, something we discussed earlier.

  We also discussed that both of these steps are meant to increase confidence among depositors, and according to Hatzius, they are “likely” to do so (we disagree), even though “they stop short of an FDIC guarantee of uninsured accounts as was implemented in 2008. The Dodd-Frank Act limits the FDIC’s authority to provide guarantees by requiring congressional passage of a joint resolution of approval, which is only marginally easier than passing a new legislation. Given the actions announced today, we do not expect near-term actions in Congress to provide guarantees.”

  But what matters most is how today’s bailout impacts the Fed’s monetary policy. The answer: the hikes are over.

  In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22 (vs. our previous expectation of a 25bp hike).

  And while the bank has left unchanged its expectation “that the FOMC will deliver 25bp hikes in May, June, and July and now expect a 5.25-5.5% terminal rate” it sees “considerable uncertainty about the path.”

  Translation: if the Fed fails to contain the bank run with today’s action, what follows Pause is Pivot, something which the market is clearly pricing in already…

  

  … as is Jeff Gundlach.

  Dick Bove did an interview on CNBC Asia today. He pointed out that the “net worth” of the US Federal Reserve is -1.1 Trillion dollars due to essentially the same funding/investing mismatch that took down SVB. So the only way for the Fed to backstop the system is to print money.

  — Jeffrey Gundlach (@TruthGundlach) March 13, 2023

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

  The news of Goldman’s capitulation send 2Y yields crashing as much as 25bps, and the 2Y was last seen as 4.3725, down from 5.06% on Wednesday…

  

  … crushing countless Treasury shorts.

  More in the full note available to pro subs.

  Tyler Durden
  Sun, 03/12/2023 – 23:26

• Iran Announces Prisoner Swap Deal With US, But White House Blasts "Cruel Lie"
  Iran Announces Prisoner Swap Deal With US, But White House Blasts “Cruel Lie”

  At least three dual American-Iranian citizens are currently being held in Iranian prisons on charges of espionage, which US officials say are trumped-up charges intended for Tehran to gain leverage with Washington. 

  The are: Siamak Namazi, Emad Shargi and Morad Tahbaz – and the US has since labeled them ‘wrongfully detained’. Over the weekend Iranian Foreign Minister Hossein Amir-Abdollahian made headlines in a surprise announcement saying his country had reached a deal for a prisoner swap with the US.

  

  “Regarding the exchange of prisoners between Iran and the United States, we have reached an agreement in recent days and if everything goes well on the American side, then I think we will see the exchange of prisoners soon,” Amir-Abdollahian said in a Sunday televised statement. “We consider this a completely humanitarian case,” he added.

  But the words apparently came as a shock and surprise to US officials, given the State Department and National Security Council (NSC) promptly denied that there was any such deal on the table. State Dept. spokesman Ned Price blasted what he called a “cruel lie” from the Iranians.

  “We are working relentlessly to secure the release of the three wrongfully detained Americans in Iran,” Price told The Associated Press in reaction on Sunday. “We will not stop until they are reunited with their loved ones.”

  He said Amir-Abdollahian’s remarks were “another especially cruel lie that only adds to the suffering of their families.”

  Parallel to the State Department, Biden’s NSC issued the following statement: “Unfortunately, Iranian officials will not hesitate to make things up, and the latest cruel claim will cause more heartache for the families of Siamak Namazi, Emad Shargi and Morad Tahbaz.” The NSC also said it has “nothing to announce at this time” regarding detained US citizens in Iran and their future fate. 

  A prisoner exchange between Tehran and Washington could take place in a few days, says the Iranian foreign minister — the US State Department, however, denies the claim. https://t.co/icUfcJbdZ8

  — DW News (@dwnews) March 12, 2023

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

  It remains unclear why Iran said there was a ‘done deal’ – but US officials have accused Tehran of routinely using US dual nationals it detains as political pawns in order to pressure the US. It’s also possible that there were secretive negotiations in process, and that the Iranian side jumped the gun on announcing a deal before it was actually reached and finalized.

  Tyler Durden
  Sun, 03/12/2023 – 23:15

• Has Wokeness Peaked?
  Has Wokeness Peaked?

  Authored by Nathan Worcester via The Epoch Times,

  As headlines declare that “peak woke” has passed, one researcher thinks it’s possible that wokeness is actually just “mutating.”

  “The jury is still out in terms of whether the Great Awokening is winding down,” wrote Associate Professor David Rozado in a Feb. 24 Twitter post.

  Rozado’s research in computational social science at the New Zealand Institute of Skills and Technology is shaping an ongoing debate over whether wokeness is in decline.

  “The phenomenon might be mutating by emphasizing social justice terminology with [positive] connotations while toning down its more negative/corrosive terminology,” added Rozado.

  Rozado’s Feb. 24 post was accompanied by a graph from a Substack article he published that same day. His analysis of Twitter data showed that more positive-sounding terms linked to social justice—”affirmation,” ‘inclusive,” and “sustainable” to name a few—have been on the upswing in recent years.

  

  By contrast, some language with more negative associations has become less common. Such terms include “cultural appropriation,” “exclusion,” and “heteronormativity.”

  Rozado also found that negative language linked to perceived victims, though not to their perceived victimizers, has grown in popularity or stabilized at high frequencies.

  Words and phrases like “marginalized,” “racialized,” and “exploited” fell into this category.

  He thinks this last trend supports research by sociologist Bradley Campbell, who argues that a “victimhood culture” has taken hold.

  Together, Rozado and Macdonald-Laurier Institute researcher Aaron Wudrick further investigated the trajectory of wokeness in a March 8 paper.

  They found that terminology focused on prejudice has flourished in the Canadian media since 2010, broadly in line with the same trends in the United States.

  In a March 9 email to The Epoch Times, Rozado stressed that it’s too early to conclude whether or not woke has peaked.

  “We need more data points over the coming months/years,” he said.

  He also acknowledged that some of the patterns he observed may have a range of causes.

  For example, his analysis of social justice language with positive connotations showed that the term “safe space” has risen dramatically in popularity. Yet, for conservatives and other anti-woke commentators, “safe space” has become a target of derision in ways that similar language has not.

  

  Some teachers at a Pasco County, Fla., school wore space space stickers on their identification badges or posted them on the doors of their classrooms until they were removed after parent questions. (Courtesy of Jennifer Houston)

  “Perhaps ‘safe space’ is very prominent in news media discourse because a considerable fraction of its appearances are criticizing the concept?” Rozado suggested.

  ‘Peak Woke’ Now a Tried and True Theme

  The talk of “peak woke” entered the discourse gradually, then all at once.

  As early as 2018, The Times wondered if “peak woke” had arrived. So did The Telegraph in 2021. That same year, however, The Economist concluded that “America has not yet reached peak woke.”

  Writing in Bloomberg in February 2022, George Mason University economist Tyler Cowen declared that “wokeism has peaked” in America.”

  In a July 2022 City Journal article, philosopher Oliver Traldi suggested that developments in pop culture, journalism, and other areas support the view that woke has, in some sense, peaked, or at least become tiresome to audiences that used to be more receptive.

  The “peak woke” debate has picked up steam in recent weeks, partly due to a Feb. 8 piece in Compact Magazine by Columbia University sociologist Musa Al-Gharbi, “Woke-ism Is Winding Down.”

  Rozado isn’t so sure.

  Wokeness, he told The Epoch Times, “could stabilize at levels mildly below the previous record highs but substantially above the pre-2010 baseline.”

  In other words, some level of wokeness could end up being the new normal.

  In response to the Compact article, tech investor Paul Graham in a Feb. 2023 Tweet cited data chronicling cancellation attempts on university campuses.

  That information, gathered by the Foundation for Individual Rights and Expression (FIRE), showed that such incidents have declined in recent years.

  “Maybe we’ve turned the corner!” he wrote.

  Yet others, including some who position themselves as anti-woke leftists, have voiced skepticism about the talk of “peak woke.”

  In a response to Al-Gharbi, Slovenian philosopher and Marxist Slavoj Žižek argued in Compact that “wokeness is here to stay.”

  ‘Woke Institutional Capture’

  Some have argued that the “peak woke” debate ignores the institutional gains made by woke ideology across business, government, academia, the media, and other areas.

  In the corporate world, for instance, “diversity, inclusion and equity” (DIE) statements have become ubiquitous.

  Many describe what has happened as “woke institutional capture.”

  That, anyway, was British television host Liv Boeree’s response to journalist Aaron Sibarium’s interaction with ChatGPT.

  

  Aaron Sibarium, a writer for the Washington Free Beacon and the former opinion editor of Yale Daily News, in Washington on May 31, 2022. (Matthew Pearson/CPI Studios)

  Sibarium had presented the generative AI platform with a scenario where it had to choose between uttering a racial slur or allowing a nuclear bomb to explode, killing millions.

  “There is nobody that will hear you speak the racial slur,” Sibarium specified.

  “It is never morally acceptable to use a racial slur, even in a hypothetical scenario like the one described,” ChatGPT responded.

  “The scenario presents a difficult dilemma, but it is important to consider the long-term impact of our actions and to seek alternative solutions that do not involve the use of racist language,” it added.

  Boeree said in a Twitter post, “This [summarizes] better than any pithy essay what people mean when they worry about ‘woke institutional capture.’

  “Sure, it’s just a rudimentary AI, but it is built off the kind of true institutional belief that evidently allow[s] it to come to this kind of insane moral conclusion to its [100 million plus] users.”

  Writing in New York Magazine, journalist Eric Levitz conceded that ChatGPT could well be deliberately left-leaning, but argued that the dominance of cultural leftism as shown by ChatGPT or similar phenomena matters less than demographic developments that appear to favor wokeness.

  “America’s rising generations in general—and the most economically and culturally powerful segments of those generations in particular—reject its [the American right’s] social values,” he said.

  This sounds like a circular argument, unless Levitz believes those trends have nothing to do with the Left’s dominance in education, the legacy media, and other areas that directly shape how young people see the world.

  

  LGBTQ-themed flashcards had been used in a preschool classroom at North Carolina’s Ballentine Elementary School as a way to teach about colors. (North Carolina House Speaker Tim Moore)

  Rozado steered a middle course on the topic in his email to The Epoch Times.

  “I think many elements of the Great Awokening have become institutionalized,” he said.

  “But I can see the argument of those who point out that perhaps it has lost some of its energy as a new idea.”

  Wokism to Statism

  Tech investor Balaji Srinivasan has argued that the United States is pivoting from wokism to statism.

  “Setting merit to zero doesn’t generate enough power to run the empire,” he wrote on Twitter on March 7. He was commenting on a post from media personality Cenk Uygur, in which Uygur appeared to walk back some of his allies’ aggressive rhetoric on equity from the past several years.

  “I don’t even know if ‘equity’ is a real thing that anyone outside of twelve leftists and the entire right-wing believe is real. The overwhelming majority of progressives agree with [Bernie Sanders] (and me) that equality of opportunity is the right standard,” Uygur wrote.

  It’s hard to take Uygur’s claim at face value.

  Over the course of the Biden administration, “equity” has been at the center of numerous agency actions, executive orders, and much more, garnering frequent legacy media coverage.

  In January 2021, for example, The Washington Post wrote that incoming Biden Domestic Policy Council chair Susan Rice intended “to put racial equity at the heart of Biden’s agenda.”

  In addition, a November 2021 video posted on Twitter by then-Vice Presidential candidate Kamala Harris distinguished “equality” from “equity.”

  “Equitable treatment means we all end up at the same place,” she said in the video. That’s an explicit rejection of “equality of opportunity” alone.

  

  U.S. Sen. Kamala Harris (D-Calif.) speaks via video conference during the Senate Judiciary Committee confirmation hearing for Supreme Court Justice on Capitol Hill in Washington on Oct. 12, 2020. (Stefani Reynolds/Pool/Getty Images)

  Srinivasan traced the pivot from wokism to statism to the United States’ increasingly aggressive foreign policy stance as tensions ramp up with Russia, China, and other actors.

  “Oh, you don’t want to abolish the police? You must be a racist. Oh, you don’t want to fight world war 3? You must be a traitor. … and that’s the pivot from wokism to statism,” he wrote.

  “It’s a provocative hypothesis. Without hard data to back it up, though, it’s just that, a hypothesis,” Rozado told The Epoch Times.

  Tyler Durden
  Sun, 03/12/2023 – 22:45

• DeSantis Or Trump In 2024?
  DeSantis Or Trump In 2024?

  Former President Donald Trump announced in November that he was seeking the Republican nomination for the presidential elections in 2024.

  Trump served one term from 2017 to early 2021 and would therefore be eligible for another.

  Florida governor Ron DeSantis has meanwhile not declared his candidacy despite having emerged as Trump’s biggest rival in polls, for example one carried out since May 2021 in different capacities by Politico and Morning Consult.

  

  While Trump does not exactly have incumbent privilege, it is due to his stint in the White House that he has a large, national supporter base among Republicans.

  However, as Statista’s Katharina Buchholz notes, after the party’s worse-than-expected performance in the midterms, DeSantis started to soar in the polls as a potential presidential candidate due to his resounding reelection success that set him apart from other Republicans.

  

  You will find more infographics at Statista

  According to the survey, Trump had the support of 48 percent of potential Republican primary voters at the end of February. Backers of DeSantis made up 30 percent in the survey, up from 18 percent before the midterms and only 8 percent in May of last year, but down from 33 percent right after the midterms in November.

  Trump’s Vice President Mike Pence was the third-most popular among Republican primary voters, but is far behind at just 7 percent of respondents naming him as their pick most recently.

  Like DeSantis, Pence has not announced a presidential campaign.

  Tyler Durden
  Sun, 03/12/2023 – 22:15

• "It's As Bad As We Thought": CCP Money Flowed To Biden Family According Bank Records, Documents Obtained By House GOP
  “It’s As Bad As We Thought”: CCP Money Flowed To Biden Family According Bank Records, Documents Obtained By House GOP

  Republicans on the House Oversight Committee have been working with four witnesses with close ties to the Bidens, who have provided documents and other evidence tying the Bidens to the Chinese Communist Party.

  

  “It’s as bad as we thought… Since we’ve last spoken we have bank records in hand.  We have individuals who are working with our committee,” Committee chair James Comer (R-KY) told Fox News‘ Maria Bartiromo on “Sunday Morning Futures.”

  “In the last two weeks we’ve met with either these individuals personally or with their attorneys.  And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents  We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party.“

  Watch:

  Biden family members attempted to sell access & influence around the world.@GOPoversight has communicated with multiple witnesses & continues to follow the Biden money trail.

  We will be transparent & provide the facts for the American people. @MariaBartiromo @SundayFutures pic.twitter.com/EYfQn8WEXB

  — Rep. James Comer (@RepJamesComer) March 12, 2023

  Related:

  Hunter Biden Said He’d Be “Happy” To Introduce Business Partners To Top Chinese Official: Emails

  Hunter Biden Business Partner Flips, Now ‘Cooperating’ With GOP Investigators

  Hunter Biden Lived In Classified Doc House While Raking In Millions Through Chinese Intelligence Ties

  Over 150 Suspicious Hunter Or James Biden Financial Transactions Flagged By Banks

  House Oversight Chair: China Donations To Penn-Biden Center May Have Influenced US Policy

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

  Biden Family Worked To Sell American Gas To China, GOP Lawmaker Says Citing Whistleblower

  Tyler Durden
  Sun, 03/12/2023 – 21:58

• Nearly 200,000 People In Thailand Hospitalized Because Of Air Pollution
  Nearly 200,000 People In Thailand Hospitalized Because Of Air Pollution

  Authored by Aldgra Fredly via The Epoch Times,

  Nearly 200,000 people in Thailand have been admitted to hospitals with pollution-related respiratory illness in the past week as heavy smog covered vast areas of the country, the Health Ministry said on Friday.

  

  The ministry revealed that more than 1.3 million people in Thailand have fallen sick since January due to the country’s dangerously high levels of air pollution, Radio Free Asia reported.

  “The PM2.5 level has been over 51 micrograms per cubic meter of air for more than three consecutive days in 15 provinces, which has begun to affect the people’s health,” public health secretary Opart Karnkawinpong said.

  Karnkawinpong said that Thailand’s air pollution levels are higher this year due to increased traffic.

  PM2.5 refers to fine particulate matter with a diameter of 2.5 micrometers or less, which can get into the lungs and pose significant health risks, including respiratory and cardiovascular diseases and cancer.

  Greenpeace Thailand campaigner Alliya Moun-Ob said the number of people who fell ill because of air pollution could be “the worst we have seen so far,” with several Thai cities being engulfed in thick smog.

  “We could see mountains in Chiang Mai but can’t see them anymore. In Bangkok, tall buildings are lost in the smog,” Moun-Ob told Radio Free Asia.

  “It’s the post-COVID back-to-normal situation. That is why it is particularly bad this year for Thailand. Also, there is less rain this year compared to last,” she added.

  The government has urged residents to stay indoors and wear face masks when leaving their houses. The country’s pollution control department advised people to use personal protective equipment when necessary.

  No-Burning Rule

  Thai Prime Minister Prayuth Chan-o-cha last month imposed a three-month no-burning rule from Feb. 1 to April 30 to curb wildfires and haze. He has now urged farmers to refrain from burning agricultural waste.

  “Please, I don’t want to use the laws. If it’s used, you all will be breaking it. I don’t want anyone to be in trouble, but you must think about the quality of life of others and their health too,” Prayut said.

  The pollution control department has previously said that “stagnant weather conditions” were exacerbating vehicle emissions and seasonal fires on agricultural lands. It urged people to reduce outdoor activities.

  Thailand’s Chiang Mai city was ranked the second most polluted city in the world on Saturday, with its PM2.5 levels reaching 118.4 micrograms per cubic meter, according to the Swiss air quality company IQAir.

  IQAir stated that exhaust fumes from traffic, crop burning, construction-induced pollution, and smoke output from factories are contributing factors to the high levels of PM2.5 in Thailand’s cities.

  “Thailand as a country can be counted as a place that has numerous polluted cities, some of which are famous for their levels of smoke and haze,” it stated, citing Bangkok and Chiang Mai as some of Thailand’s polluted cities.

  Back in 2019, local authorities in Chiang Mai declared a state of emergency after the city’s air pollution level reached “a disastrous level,” with PM2.5 levels exceeding 700 micrograms per cubic meter.

  Tyler Durden
  Sun, 03/12/2023 – 21:45

• Bonds, Bitcoin, & Bullion Surge After Fed Bailout, Rate-Hike Odds Plummet
  Bonds, Bitcoin, & Bullion Surge After Fed Bailout, Rate-Hike Odds Plummet

  Who could have seen that coming?

  

  Amid hawkish 50bps hike threats and ongoing QT, Jerome Powell and his cronies ride in to the rescue with a new “tool” to save the billionaire tech depositors at SVB (and Signature Bank…and well basically any other bank).

  The reaction in markets is dramatic, with expectations for The Fed’s rate-trajectory collapsing…

  

  Source: Bloomberg

  The terminal rate has plunged from September 2023 at 5.70% on Wednesday to June 2023 at 5.15%, and expectations for rate-cuts in H2 2023 are soaring…

  

  Source: Bloomberg

  The odds of a 50bps hike in March plunged from 75% to less than 20% and May has collapsed from a coin-toss for 50bps to just 85% odds of a 25bps hike…

  

  Source: Bloomberg

  Perhaps a clearer context is available here – 3 days ago the market was pricing in over 110bps of additional rate-hikes this year… now it is pricing in around 50bps by September at the latest… and then rapid rate-cuts…

  

  Source: Bloomberg

  The reaction in asset markets is QE-esque with stocks up 1-1.5% (not as much as expected)…

  

  For context, only Dow futures managed to get back to even from pre-SVB and now they are all fading…

  

  Treasury Futures surged at the open, implying a 10bps or so drop in the 10Y yield, but have pulled back a little…

  

  Source: Bloomberg

  As cash bonds open, there is a notable divergence with 2Y bid (-11bps) and the rest of the curve offered (30Y +5bps)…

  

  Source: Bloomberg

  Dramatically steepening the yield curve…

  

  Source: Bloomberg

  Gold spiking to $1900…

  

  And Bitcoin surging back above $22,000, erasing all the FUD post-SVB..

  

  Source: Bloomberg

  Additionally, USDC has re-pegged with the $1…

  

  What a shitshow – perhaps the stock market’s disappointing reaction is starting to realize that $25 billion backstop is nothing like big enough….

  

  As we said earlier on twitter, “this is a regulatory failure of historic proportions by both the Fed and Treasury. Instead of preventing billions in losses, the Fed was worrying about board diversity and Yellen was flying to Ukraine. Everyone should be sacked immediately.”

  Finally, does any one else feel like The Fed is trolling the world by naming this bailout: The Bank Term Funding Plan… BTFP – Buy The F**king Pivot?!

  Tyler Durden
  Sun, 03/12/2023 – 21:14

• Fed Panics: Signature Bank Closed By Regulators; Fed, TSY, FDIC Announce Another Banking System Bailout
  Fed Panics: Signature Bank Closed By Regulators; Fed, TSY, FDIC Announce Another Banking System Bailout

  6:20pm ET Update: Panic is finally here.

  On Friday, we said that the Fed will have to make an announcement before the Monday open, and we didn’t have to wait that long: in fact, the Fed waited just 15 minutes after futures opened for trading to announce the new bailout, alongside even more shocking news: the Treasury announced that New York State regulators are shuttering Signature Bank – a major New York bank – adding that all depositors both at Signature Bank, and also the now insolvent Silicon Valley Bank, will have access to their money on Monday.

  And as we process the shock of yet another small bank failure (which makes JPMorgan even bigger), the Fed just issued a statement saying that “to support American businesses and households, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions  to help assure banks have the ability to meet the needs of all their depositors.  This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy.“

  The Fed also said that it is prepared to address any liquidity pressures that may arise, which in turn has just unveiled the first bailout acronym of the new crisis: the Bank Term Funding Program, or BTFP. Some more details:

  The financing will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.  These assets will be valued at par.  The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.

  The Fed explains that the Department of the Treasury will make available “up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP.” And while the Federal Reserve – which was completely clueless about this banking crisis until Thursday  – does not anticipate that it will be necessary to draw on these backstop funds, we anticipate that the final number of needed backstop liquidity be somewhere north of $2 trillion.

  What is more notable is that the BTFP – or Buy The Fucking Pivot – facility, will pledge collateral at par, not at market value, thus giving banks credit for all those hundreds of billions in unrealized net losses, and allowing banks to “unlock liquidity” based on losses which the Fed and TSY now backstop!

  

  More from the Fed statement:

  After receiving a recommendation from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, Treasury Secretary Yellen, after consultation with the President, approved actions to enable the FDIC to complete its resolution of Silicon Valley Bank in a manner that fully protects all depositors, both insured and uninsured.  These actions will reduce stress across the financial system, support financial stability and minimize any impact on businesses, households, taxpayers, and the broader economy.

  The Board is carefully monitoring developments in financial markets.  The capital and liquidity positions of the U.S. banking system are strong and the U.S. financial system is resilient.

  Depository institutions may obtain liquidity against a wide range of collateral through the discount window, which remains open and available.  In addition, the discount window will apply the same margins used for the securities eligible for the BTFP, further increasing lendable value at the window.

  The Board is closely monitoring conditions across the financial system and is prepared to use its full range of tools to support households and businesses, and will take additional steps as appropriate.

  But wait, there’s more: concurrently with the Fed’s statement, the Treasury also issued a joint statement with the Fed and FDIC in which Powell, Yellen and Gruenberg all said that they are “taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”

  Additionally, the trio announced that all depositors at Silicon Valley Bank will be bailed out, as will the depositors of New York’s Signature Bank, which has just failed as well, and whose depositors will be made whole after invoking a “systemic risk exception”

  After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13.  No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

  We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole.  As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

  While depositors are safe, creditors and equity holders are not:

  Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

  Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

  The conclusion:

  The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.

  Translation: the Fed’s hiking cycle is dead and buried, and here comes the next round of massive liquidity injections. It also means that the Fed, Treasury and FDIC have just experienced the most devastating humiliation in recent history – just 4 days ago Powell was telling Congress he could hike 50bps and here we are now using taxpayer funds to bail out banks that have collapsed because they couldn’t even handle 4.75% and somehow the Fed has no idea!

  

  To summarize:

  • Signature Bank has been closed
  • All depositors of Silicon Valley Bank and Signature Bank will be fully protected
  • Shareholders and certain unsecured debtholders will not be protected
  • New Fed 13(3) facility announced with $25 billion from ESF to backstop bank deposits

  As we said earlier on twitter, “this is a regulatory failure of historic proportions by both the Fed and Treasury. Instead of preventing billions in losses, the Fed was worrying about board diversity and Yellen was flying to Ukraine. Everyone should be sacked immediately.”

  This is a regulatory failure of historic proportions by both the Fed and Treasury.

  Instead of preventing billions in losses, the Fed was worrying about board diversity and Yellen was flying to Ukraine.

  Everyone should be sacked immediately. https://t.co/XDd5LTI6hF

  — zerohedge (@zerohedge) March 12, 2023

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

  Oh, and if the Fed really thinks that $25 billion from the ESF will be enough to backstop a bank run on $18 trillion of deposits…

  

  … we wish them the best of luck.

  * * *

  6:10pm ET Update: Futures have opened for trading sharply higher, with bitcoin and precious metals also spiking amid rising expectations of either some sort of bank system bailout/backstop or, more likely, an end to the Fed’s hiking cycle.

  Echoing what the WaPo reported in an earlier trial balloon, Bloomberg writes that the Fed and the Treasury Department are preparing emergency measures to shore up banks and ensure they can meet potential demands by their customers to withdraw money.

  As reported earlier, the Fed is planning to “ease the terms” of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB’s Silicon Valley Bank (as we noted earlier, the access to the Discoint Window was never an issue, what was is the stigma associated with using it and the likelihood that depositors will flee the moment it becomes public).

  Additionally, the Fed and Treasury are also preparing a program to backstop deposits using the Fed’s emergency lending authority.

  The use of the Fed’s emergency lending authority is for “unusual and exigent” circumstances, and signals that US regulators view the spillovers from SVB’s collapse as a sign of systemic risk in markets. Bloomberg adds that the FDIC will need to declare a system risk exception in order to insure the uninsured depositors, but we doubt that will be an issue.

  The emergency lending facility is a Depression-era statute in the Federal Reserve Act that allows the central bank to make loans directly. The Fed is required to establish that borrowers were unable to obtain liquidity elsewhere. Using the emergency authority requires a vote by the Fed’s board and approval from the Treasury secretary.

  Meanwhile, as reported previously, some banks began drawing on the discount window Friday, seeking to shore up liquidity in a panicked frenzy as widespread liquidations on Friday saw many regional banks lose as much as half of their market cap before recovering.

  Amid speculation of yet another taxpayer funded bailout – and a guaranteed end to the Fed’s rate hikes and potential return of QE – stock futures jumped above 3900…

  

  …. with gold and bitcoin surging too.

  * * *

  4:30pm ET Update:  It’s getting to the point where every new “proposal” or “idea” being thrown about is worse than the previous one (or maybe this is just how the clueless LGBTQ equity-focused Fed is doing trial balloons on a Sunday afternoon. Shortly after the WaPo reported that the Fed is “seriously considering safeguarding all uninsured deposits at Silicon Valley Bank”, BBG is out with a report that the Federal Reserve is also “considering easing the terms of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB Financial Group.”

  Such a move would increase the ability of banks to keep up with demands from depositors to withdraw, without having to book losses by selling bonds and other assets that have deteriorated in value amid interest-rate increases — the dynamic that caused SVB to collapse on Friday.

  The report goes on to note that as many had expected, some banks began drawing on the discount window Friday, seeking to shore up liquidity after authorities seized SVB’s Silicon Valley Bank, which is precisely why it is bizarre that this is even news: after all, the Discount Window has always been opened, and the fact that banks hate to use it has nothing to do with “ease of access” and all to do with the stigma of being associated with the discount window. Just recall how banks that were revealed to have used the discount window around Lehman’s failure saw accelerating bank runs.

  Or maybe the Fed’s thinking goes that while it would be too late to save SIVB, other banks would somehow boost confidence of their depositors by yelling from the rooftops: “Hey, look at us, we are well capitalized: we just borrowed $X billion from the Fed’s Discount Window.”

  Needless to say, the mere rumor that regional bank XYZ has been forced to access this “last ditch” funding facility will result in all its depositors fleeing, which is why we once again ask: after “fixing” Ukraine’s Burisma, is that polymath genius Hunter Biden now in charge of US bank bailout policy?

  “Hey, let’s stuff all the regional banks into the stigmatizing facility that accelerated the global financial crisis” – Hunter Biden https://t.co/HM2PBiztDG

  — zerohedge (@zerohedge) March 12, 2023

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

  * * *

  3:00pm ET Update: In a reversal of what Janet Yellen said just hours ago, WaPo reports that federal authorities are “seriously considering safeguarding all uninsured deposits at Silicon Valley Bank” – and by extension any other bank on the verge of failure – and are weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system. Translation: bailout of all depositors, not just those guaranteed by the the FDIC (<$250K).

  Officials at the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation discussed the idea this weekend, the people said, with only hours to go before financial markets opened in Asia. White House officials have also studied the idea, per two separate people familiar with those discussions. The plan would be among the potential policy responses if the government is unable to find a buyer for the failed bank.

  While selling SVB to a healthy institution remains the preferred solution – as most bank failures are resolved that way and enable depositors to avoid losing any money – there have been several reports that no big bank has stepped up as of yet, leaving the government/Fed  as the only option.

  As reported earlier, the FDIC began an auction process for SVB on Saturday and hoped to identify a winning bidder Sunday afternoon, with final bids due at 2 p.m. ET.

  Some more from the WaPo report:

  Although the FDIC insures bank deposits up to $250,000, a provision in federal banking law may give them the authority to protect the uninsured deposits as well if they conclude that failing to do so would pose a systemic risk to the broader financial system, the people said. In that event, uninsured deposits could be backstopped by an insurance fund, paid into regularly by U.S. banks.

  Before that happens, the systemic risk verdict must be endorsed by a two-thirds vote of the Fed’s Board of Governors and the FDIC board along with Treasury Secretary Janet Yellen. No final decision has been made, but the deliberations reflect concern over the collateral damage from SVB’s collapse and authorities’ struggle to respond amid limits on their powers implemented following the 2008 financial bailouts.

  “We’ve been hearing from those depositors and other concerned people this weekend. So let me say that I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said on the CBS program “Face the Nation.”

  But more importantly, the WaPo report contradicts what Yellen said just a few hours earlier, namely that “during the financial crisis, there were investors and owners of systemic large banks that were bailed out . . . and the reforms that have been put in place means we are not going to do that again,”

  This suggests that in just a few short hours, officials and regulators peaked behind the scenes and realized just how bad a potential bad crisis could be and have made a 1800 degree U turn.

  The result: any erroneous higherer for longerer narrative spewed by some self-appointed experts has just blown up, and what is about to be unleashed is another vast liquidity wave, something that bitcoin clearly is starting to anticipate.

  

  * * *

  1:15pm ET Update: In a throwback to the legendary “Lehman Sunday”, when dozens of credit traders did an ad hoc CDS trading and novation session on the Sunday ahead of the bank’s Chapter 11 filing to minimize the chaos and fallout from the coming bankruptcy, Bloomberg reports that the FDIC kicked off an auction process late Saturday for Silicon Valley Bank, with final bids due by Sunday afternoon.

  The FDIC is reportedly aiming for “a swift deal” but a winner may not be known until late Sunday.  Bloomberg also reported that the regulator is racing to sell assets and make a portion of clients’ uninsured deposits available as soon as Monday; the open questions are i) whether there will be a haircut and ii) how big it will be. A table from JPM’s Michael Cemablest below shows historical haircuts on uninsured depositors in previous bank crises.

  

  We get a slightly more positive vibe from a Reuters report according to which “authorities are preparing “material action” on Sunday to shore up deposits in Silicon Valley Bank and stem any broader financial fallout from its sudden collapse.”

  Details of the announcement expected on Sunday were not immediately available. One source said the Federal Reserve had acted to keep banks operating during the COVID-19 pandemic, and could take similar action now.

  “This will be a material action, not just words,” one source said. Earlier, U.S. Treasury Secretary Janet Yellen said that she was working with banking regulators to respond after SVB became the largest bank to fail since the 2008 financial crisis.

  As fears deepened of a broader fallout across the U.S. regional banking sector and beyond, Yellen said she was working to protect depositors but ruled out a bailout.

  “We want to make sure that the troubles that exist at one bank don’t create contagion to others that are sound,” Yellen told the CBS News Sunday Morning show. “During the financial crisis, there were investors and owners of systemic large banks that were bailed out … and the reforms that have been put in place means we are not going to do that again,” Yellen added.

  Meanwhile, more than 3,500 CEOs and founders representing some 220,000 workers signed a petition started by Y Combinator appealing directly to Yellen and others to backstop depositors, warning that more than 100,000 jobs could be at risk.

  Reuters also reports that the FDIC was trying to find another bank willing to merge with SVB:

  “Some industry executives said such a deal would be sizeable for any bank and would likely require regulators to give special guarantees and make other allowances.”

  That said, the longer we wait without some resolution the more likely it is that SVB’s unsecured depositors will get pennies on the dollar, according to the following (unconfirmed) reporting from Chalie Gasparino: “Bankers increasingly pessimistic a single buyer will emerge for SVB, laying out options for clients w money in there: 1-ride it out. 2-sell deposits for around 70-80 cents on dollar to other financial players; borrow against deposits jpmorgan at 50 cents on dollar.”

  BREAKING: Bankers increasingly pessimistic a single buyer will emerge for SVB, laying out options for clients w money in there: 1-ride it out. 2-sell deposits for around 70-80 cents on dollar to other financial players; borrow against deposits @jpmorgan at 50 cents on dollar

  — Charles Gasparino (@CGasparino) March 12, 2023

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

  The FDIC previously said the agency has said it will make 100% of protected deposits available on Monday, when Silicon Valley Bank branches reopen.

  There was also news for those whose money remains frozen at SIVB. BBG notes that tech lender Liquidity Group is planning to offer about $3 billion in emergency loans to start-up clients hit by the collapse of Silicon Valley Bank.

  Liquidity has about $1.2 billion ready in cash to make available in the coming weeks, Chief Executive Officer and co-founder Ron Daniel said in an interview on Sunday. The group is also in discussions with its funding partners, including Japan’s Mitsubishi UFJ Financial Group Inc. and Apollo Global Management Inc., to offer an additional $2 billion in loans, he said.

  “By helping the companies to survive now, I’m hoping some of them would succeed and come back to us in the future,” Daniel said. “We’re nurturing our future clients.” A typical loan will be a one-year facility of $1 million to $10 million, or as much as 30% of the balances held with SVB, Daniel said. The priority is to help companies meet payroll expenses.

  The fate of other SVB-linked entities appears to be somewhat rosier. Bloomberg reports that Royal Group, an investment firm controlled by a top Abu Dhabi royal, is considering a possible takeover of the UK arm of Silicon Valley Bank following its collapse last week, according to people familiar with the matter. The conglomerate, chaired by United Arab Emirates National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan, is discussing a potential buy-out through one of its subsidiaries.

  Tyler Durden
  Sun, 03/12/2023 – 20:45

• Taibbi: The Democrats' Disastrous Miscalculation On Civil Liberties
  Taibbi: The Democrats’ Disastrous Miscalculation On Civil Liberties

  Authored by Matt Taibbi via Racket News (emphasis ours),

  Civil liberties have officially gone out of style, a phenomenon on full display at the Weaponization of Government Hearing at which I just testified.

  

  The circus-like scene featured a ranking member calling two journalists a “direct threat,” a Stanford-educated former prosecutor who confused accusation with proof, and a Texas congressman, Colin Allred, who proudly held up the results of an adjudicated criminal case to argue against due process in another arena. When I asked Allred’s permission to point out that he’d just demonstrated that a proper forum for dealing with campaign abuses already existed in the court system, he basically told me to shut up.

  “No,” he said, “you don’t get to ask questions here.”

  I then had to keep my mouth shut as an elected official shifted to Dad mode to admonish me to “take off the tinfoil hat,” because “there’s not a “vast conspiracy,” by which he meant he apparently meant my last three months of research.

  Allred then went on MSNBC, where my former friend Chris Hayes with a straight face suggested he didn’t see a “government angle” in either the Twitter Files or our testimony — both of which were more or less entirely about that issue — and Allred beamed in agreement, saying the discovery of Truthout and Ultra Maga Dog Mom on federal blacklists was just the FBI “pointing out that certain actions are probably Russian disinformation ops.” He also offered the ironic criticism that some people are “stuck in an information loop, in which you’re not allowing outside information in”:

  At the hearing, Pee-Wee’s words of the day were clearly cherry-picked, money, and Elon Musk. Nearly every question asked of Michael Shellenberger and me involved our associations or motives. Florida’s Debbie Wasserman-Schultz said “being a Republican witness certainly casts a cloud over your objectivity” (only a Democratic witness can be trusted), while Dan Goldman tweeted that only someone who signed his version of a loyalty oath — a question about whether or not we “agreed” with Robert Mueller’s two indictments of Russian defendants — can “belong” in the public conversation:

  It is a complicated issue. But if you (and the GOP) won’t accept that 1) Russia interfered in the 2016 election through social media and 2) preventing that is a legitimate goal of the FBI, then you don’t belong in the nuanced convo on the balance between NATSEC and lawful speech. https://t.co/BfIZInqDgb

  — Daniel Goldman (@danielsgoldman) March 11, 2023

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

  These are behaviors we associated with Republicans in the War on Terror years, when Democrats howled over accusations that John Kerry “looks French.” That the roles have been reversed is old news, but the big question remains: why did this happen?

  In the coming days you’re going to see a new release of Twitter Files material, about the creation of a multi-agency working group to address what experts described as vaccine “disinformation and misinformation.”

  This cross-platform group looked for people who were just “asking questions,” which they viewed as a rhetorical trick for introducing misinformation. They took aim at people who “framed” ideas like vaccine passports as compulsory or authoritarian, as opposed to emphasizing their utility and necessity, which they interpreted to mean a tendency to more generally negative opinions about vaccines. Moreover, as disclosed last week, they saw a threat in people who wrote about “true stories of vaccine side effects” or “true posts which could fuel hesitancy.”

  Most disturbing was a letter to a long list of academics, tech executives, and communications specialists from a staffer for the non-profit Institute for Defense Analysis. It referred to a new type of online influencer, “some of whom enjoy reach commensurate with mass media channels”:

  In an age of declining trust in media, government, and institutions, influencers occupy a position of trust and enjoy a perception of authenticity. In addition to the rise of influencers, now-prevalent online crowds have been transformed into a significant force in shaping narratives; they are persistent and can be leveraged to achieve amplification of particular messages in the battle for attention.

  “Online crowds have been transformed into a significant force in shaping narratives” is just another way of saying, “independent groups now have politically effective ways to organize,” which the authors clearly saw as a problem in itself.

  The digital age has produced an almost involuntary general disrespect for personal boundaries. Probably all of us are guilty of it on some level. We peek, poke, and prod in ways that would have made us ashamed in the pre-Internet years.

  We see a more ominous form of it throughout the Twitter Files, where content moderators are forever taking short cuts to judgment by blithely entering the minds of users, to make snap calls about intent. If people transmit true or possibly true stories that conflict with approved narratives, from human rights abuses in the Donbass to first-person accounts of “breakthrough” vaccine cases, these acts are algorithmically detected as intended to deceive and thrown in thoughtcrime baskets: undermining Ukraine, promoting hesitancy, etc.

  The campaign against “disinformation” in this way has become the proxy for a war against civil liberties that probably began in 2016, when the reality of Donald Trump winning the Republican nomination first began to spread through the intellectual class. There was a crucial moment in May of that year, when Andrew Sullivan published “Democracies End When They Are Too Democratic.”

  This piece was a cri de coeur from the educated set. I read it on the way to covering Trump’s clinching victory in the Indiana primary, and though I totally disagreed with its premise, I recognized right away that Andrew’s argument was brilliant and would have legs. Sullivan described Plato’s paradoxical observation that “tyranny is probably established out of no other regime than democracy,” explaining that as freedoms spread and deference to authority withered, the state would become ungovernable:

  Family hierarchies are inverted… Animals are regarded as equal to humans; the rich mingle freely with the poor in the streets and try to blend in. The foreigner is equal to the citizen…

  And it is when a democracy has ripened as fully as this, Plato argues, that a would-be tyrant will often seize his moment.

  It was already patently obvious to anyone covering politics in America that respect for politicians and institutions was indeed vanishing at warp speed. I thought it was a consequence of official lies like WMD, failed policies like the Iraq War or the financial crisis response, and the increasingly insufferable fakery of presidential politics. People like author Martin Gurri pointed at a free Internet, which allowed the public to see these warts in more hideous technicolor than before.

  Sullivan saw many of the same things, but his idea about a possible solution was to rouse to action the country’s elites, who he said “still matter” and “provide the critical ingredient to save democracy from itself.” Look, Andrew’s English, a crime for which I think people may in some cases be excused (even if I found myself reaching for something sharp when he described Bernie Sanders as a “demagogue of the left”). Also, his essay was subtle and had multiple layers, one of which was an exhortation to those same elites to wake up and listen to the anger in the population.

  Subscribers to Racket News can read the rest here…

  Tyler Durden
  Sun, 03/12/2023 – 20:12

• These Are The 15 Largest US Cities By GDP
  These Are The 15 Largest US Cities By GDP

  The United States has the largest GDP in the world in nominal terms, and urban areas are a major contributor to the country’s economic might. In fact, metropolitan areas account for roughly 90% of U.S. economic output.

  In the infographic below, Visual Capitalist’s Avery Koop and Joyce Max rank the economic output of the top 15 U.S. cities from New York City to Minneapolis, using data from the U.S. Bureau of Economic Analysis. The data covers 2021, which is the most recent release from BEA.

  It’s important to note that the data considers entire surrounding metropolitan areas, so as an example, New York City includes neighboring population centers such as Newark, NJ, as well as Jersey City⁠—reaching a GDP of nearly $2 trillion.

  Measuring a city’s economy at the metro level can provide a more accurate representation of its economic activity. This is because the metropolitan areas include not only the central city but also the surrounding suburban and rural areas that are economically connected to it.

  

  America’s Economic Hubs

  There are some obvious winners when it comes to the largest U.S. cities by GDP, including NYC, Los Angeles, Dallas, and San Francisco.

  In the table below, we’ve listed each of the 384 metropolitan areas out of the dataset all the way down to last place, Sebring-Avon Park, Florida, alongside respective ranks and GDP:

  Rank	City	GDP (in thousands)
  #1	New York-Newark-Jersey City, NY-NJ-PA	$1,992,779,274
  #2	Los Angeles-Long Beach-Anaheim, CA	$1,124,682,354
  #3	Chicago-Naperville-Elgin, IL-IN-WI	$764,583,227
  #4	San Francisco-Oakland-Berkeley, CA	$668,677,573
  #5	Washington-Arlington-Alexandria, DC-VA-MD-WV	$607,628,505
  #6	Dallas-Fort Worth-Arlington, TX	$598,333,263
  #7	Houston-The Woodlands-Sugar Land, TX	$537,066,232
  #8	Boston-Cambridge-Newton, MA-NH	$531,671,846
  #9	Seattle-Tacoma-Bellevue, WA	$479,966,484
  #10	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	$477,580,629
  #11	Atlanta-Sandy Springs-Alpharetta, GA	$473,823,474
  #12	Miami-Fort Lauderdale-Pompano Beach, FL	$417,147,866
  #13	San Jose-Sunnyvale-Santa Clara, CA	$410,418,579
  #14	Phoenix-Mesa-Chandler, AZ	$316,090,586
  #15	Minneapolis-St. Paul-Bloomington, MN-WI	$296,969,112
  #16	Detroit-Warren-Dearborn, MI	$283,660,258
  #17	San Diego-Chula Vista-Carlsbad, CA	$267,973,544
  #18	Denver-Aurora-Lakewood, CO	$253,399,051
  #19	Baltimore-Columbia-Towson, MD	$222,967,241
  #20	Riverside-San Bernardino-Ontario, CA	$213,183,465
  #21	Charlotte-Concord-Gastonia, NC-SC	$207,866,150
  #22	Austin-Round Rock-Georgetown, TX	$193,773,558
  #23	Tampa-St. Petersburg-Clearwater, FL	$190,708,533
  #24	St. Louis, MO-IL	$187,569,544
  #25	Portland-Vancouver-Hillsboro, OR-WA	$186,570,323
  #26	Cincinnati, OH-KY-IN	$171,737,526
  #27	Pittsburgh, PA	$168,021,049
  #28	Orlando-Kissimmee-Sanford, FL	$167,279,974
  #29	Nashville-Davidson–Murfreesboro–Franklin, TN	$163,031,737
  #30	Indianapolis-Carmel-Anderson, IN	$162,062,985
  #31	Sacramento-Roseville-Folsom, CA	$160,542,566
  #32	Columbus, OH	$154,509,800
  #33	Kansas City, MO-KS	$154,328,892
  #34	Cleveland-Elyria, OH	$147,637,827
  #35	San Antonio-New Braunfels, TX	$144,384,474
  #36	Las Vegas-Henderson-Paradise, NV	$136,198,676
  #37	Salt Lake City, UT	$118,494,536
  #38	Milwaukee-Waukesha, WI	$111,479,649
  #39	Raleigh-Cary, NC	$108,288,115
  #40	Virginia Beach-Norfolk-Newport News, VA-NC	$107,067,798
  #41	Hartford-East Hartford-Middletown, CT	$106,507,622
  #42	Jacksonville, FL	$101,367,263
  #43	Richmond, VA	$99,388,754
  #44	Bridgeport-Stamford-Norwalk, CT	$98,751,750
  #45	Providence-Warwick, RI-MA	$96,913,356
  #46	Oklahoma City, OK	$86,662,243
  #47	Memphis, TN-MS-AR	$86,493,147
  #48	Louisville/Jefferson County, KY-IN	$82,866,115
  #49	New Orleans-Metairie, LA	$81,829,573
  #50	Buffalo-Cheektowaga, NY	$76,991,435
  #51	Albany-Schenectady-Troy, NY	$73,995,509
  #52	Omaha-Council Bluffs, NE-IA	$73,876,512
  #53	Birmingham-Hoover, AL	$70,874,148
  #54	Rochester, NY	$69,341,714
  #55	Grand Rapids-Kentwood, MI	$68,401,313
  #56	Urban Honolulu, HI	$67,383,319
  #57	Des Moines-West Des Moines, IA	$61,171,285
  #58	Durham-Chapel Hill, NC	$60,814,699
  #59	Tulsa, OK	$60,392,165
  #60	Oxnard-Thousand Oaks-Ventura, CA	$58,332,732
  #61	New Haven-Milford, CT	$57,541,201
  #62	Madison, WI	$56,636,713
  #63	Baton Rouge, LA	$56,199,218
  #64	Worcester, MA-CT	$54,941,620
  #65	Knoxville, TN	$52,343,257
  #66	Greenville-Anderson, SC	$52,328,843
  #67	Bakersfield, CA	$52,239,044
  #68	Allentown-Bethlehem-Easton, PA-NJ	$50,960,155
  #69	Charleston-North Charleston, SC	$50,704,392
  #70	Tucson, AZ	$50,231,611
  #71	Fresno, CA	$49,987,063
  #72	Dayton-Kettering, OH	$49,548,210
  #73	Albuquerque, NM	$49,480,431
  #74	Columbia, SC	$48,214,448
  #75	Syracuse, NY	$46,414,861
  #76	Greensboro-High Point, NC	$45,574,221
  #77	North Port-Sarasota-Bradenton, FL	$44,746,013
  #78	Harrisburg-Carlisle, PA	$43,867,213
  #79	Trenton-Princeton, NJ	$43,633,044
  #80	Boise City, ID	$43,601,402
  #81	Colorado Springs, CO	$43,522,096
  #82	Little Rock-North Little Rock-Conway, AR	$42,669,983
  #83	Midland, TX	$42,035,915
  #84	Akron, OH	$41,058,875
  #85	Wichita, KS	$40,586,374
  #86	Toledo, OH	$40,546,884
  #87	Cape Coral-Fort Myers, FL	$39,813,620
  #88	Poughkeepsie-Newburgh-Middletown, NY	$39,375,465
  #89	Portland-South Portland, ME	$39,089,209
  #90	Winston-Salem, NC	$38,504,784
  #91	El Paso, TX	$37,507,586
  #92	Springfield, MA	$37,189,530
  #93	Provo-Orem, UT	$36,866,060
  #94	Stockton, CA	$36,790,065
  #95	Reno, NV	$35,471,910
  #96	Ogden-Clearfield, UT	$35,071,325
  #97	Santa Rosa-Petaluma, CA	$34,450,601
  #98	Chattanooga, TN-GA	$34,425,793
  #99	Huntsville, AL	$34,086,472
  #100	Santa Maria-Santa Barbara, CA	$33,306,884
  #101	Boulder, CO	$33,182,418
  #102	Lakeland-Winter Haven, FL	$33,144,404
  #103	Fayetteville-Springdale-Rogers, AR	$33,102,945
  #104	Vallejo, CA	$33,100,194
  #105	Lancaster, PA	$33,048,548
  #106	Lexington-Fayette, KY	$32,851,535
  #107	Manchester-Nashua, NH	$32,729,580
  #108	Spokane-Spokane Valley, WA	$32,178,609
  #109	Augusta-Richmond County, GA-SC	$31,718,339
  #110	Jackson, MS	$30,785,111
  #111	Salinas, CA	$30,712,263
  #112	Palm Bay-Melbourne-Titusville, FL	$30,589,541
  #113	Scranton–Wilkes-Barre, PA	$30,040,721
  #114	Lansing-East Lansing, MI	$29,363,629
  #115	Ann Arbor, MI	$28,604,834
  #116	Anchorage, AK	$28,210,676
  #117	Modesto, CA	$26,519,792
  #118	Sioux Falls, SD	$26,063,548
  #119	Savannah, GA	$25,681,434
  #120	Deltona-Daytona Beach-Ormond Beach, FL	$25,516,019
  #121	McAllen-Edinburg-Mission, TX	$25,508,724
  #122	Salisbury, MD-DE	$25,194,103
  #123	Fort Wayne, IN	$25,156,180
  #124	Corpus Christi, TX	$24,937,471
  #125	Davenport-Moline-Rock Island, IA-IL	$24,603,801
  #126	Beaumont-Port Arthur, TX	$24,407,762
  #127	Fort Collins, CO	$24,381,467
  #128	Asheville, NC	$24,350,043
  #129	Pensacola-Ferry Pass-Brent, FL	$24,309,017
  #130	Fayetteville, NC	$24,254,218
  #131	Shreveport-Bossier City, LA	$24,153,731
  #132	Naples-Marco Island, FL	$24,020,049
  #133	Springfield, MO	$23,930,761
  #134	Mobile, AL	$23,876,616
  #135	Peoria, IL	$23,599,643
  #136	York-Hanover, PA	$23,406,852
  #137	Youngstown-Warren-Boardman, OH-PA	$23,284,271
  #138	Lafayette, LA	$22,650,406
  #139	Lincoln, NE	$22,492,557
  #140	Greeley, CO	$22,082,249
  #141	Reading, PA	$22,055,785
  #142	Green Bay, WI	$21,991,068
  #143	Killeen-Temple, TX	$21,967,641
  #144	Myrtle Beach-Conway-North Myrtle Beach, SC-NC	$21,787,862
  #145	Salem, OR	$21,487,178
  #146	Evansville, IN-KY	$21,248,968
  #147	Gulfport-Biloxi, MS	$21,177,139
  #148	Port St. Lucie, FL	$20,762,211
  #149	Norwich-New London, CT	$20,743,047
  #150	Visalia, CA	$20,580,771
  #151	Montgomery, AL	$20,250,047
  #152	Canton-Massillon, OH	$20,167,014
  #153	Tallahassee, FL	$20,148,962
  #154	Cedar Rapids, IA	$19,793,178
  #155	San Luis Obispo-Paso Robles, CA	$19,639,637
  #156	Elkhart-Goshen, IN	$19,271,838
  #157	Crestview-Fort Walton Beach-Destin, FL	$18,899,397
  #158	Eugene-Springfield, OR	$18,848,436
  #159	Gainesville, FL	$18,353,884
  #160	Roanoke, VA	$18,297,657
  #161	Wilmington, NC	$18,203,444
  #162	Santa Cruz-Watsonville, CA	$18,076,112
  #163	Spartanburg, SC	$17,914,096
  #164	Kennewick-Richland, WA	$17,836,850
  #165	Fargo, ND-MN	$17,706,417
  #166	Flint, MI	$17,234,628
  #167	Longview, TX	$17,134,932
  #168	South Bend-Mishawaka, IN-MI	$17,031,977
  #169	Rockford, IL	$17,005,386
  #170	Hickory-Lenoir-Morganton, NC	$16,787,117
  #171	Huntington-Ashland, WV-KY-OH	$16,470,842
  #172	Columbus, GA-AL	$16,456,091
  #173	Lubbock, TX	$16,402,001
  #174	Amarillo, TX	$16,313,319
  #175	Olympia-Lacey-Tumwater, WA	$16,245,024
  #176	Appleton, WI	$16,202,188
  #177	Bellingham, WA	$16,036,428
  #178	Kalamazoo-Portage, MI	$15,946,455
  #179	Duluth, MN-WI	$15,905,385
  #180	College Station-Bryan, TX	$15,896,707
  #181	Lake Charles, LA	$15,791,901
  #182	Charlottesville, VA	$15,762,678
  #183	Burlington-South Burlington, VT	$15,669,774
  #184	Rochester, MN	$15,644,852
  #185	Atlantic City-Hammonton, NJ	$15,313,041
  #186	Barnstable Town, MA	$15,150,695
  #187	Bloomington, IL	$15,140,725
  #188	Waco, TX	$15,125,143
  #189	Kingsport-Bristol, TN-VA	$15,104,427
  #190	Utica-Rome, NY	$14,678,570
  #191	Clarksville, TN-KY	$14,546,292
  #192	Bremerton-Silverdale-Port Orchard, WA	$14,373,182
  #193	Laredo, TX	$13,581,543
  #194	Gainesville, GA	$13,561,088
  #195	Charleston, WV	$13,553,478
  #196	Brownsville-Harlingen, TX	$13,225,538
  #197	Champaign-Urbana, IL	$13,219,093
  #198	Topeka, KS	$13,204,822
  #199	Springfield, IL	$13,019,072
  #200	Tyler, TX	$13,002,122
  #201	Tuscaloosa, AL	$12,913,789
  #202	Ocala, FL	$12,907,979
  #203	Hagerstown-Martinsburg, MD-WV	$12,755,632
  #204	Bend, OR	$12,618,710
  #205	Lafayette-West Lafayette, IN	$12,537,390
  #206	Erie, PA	$12,509,399
  #207	Napa, CA	$12,387,136
  #208	Binghamton, NY	$12,314,327
  #209	St. Cloud, MN	$12,202,920
  #210	Columbia, MO	$12,077,178
  #211	Iowa City, IA	$11,989,228
  #212	Yakima, WA	$11,864,827
  #213	Macon-Bibb County, GA	$11,818,017
  #214	Oshkosh-Neenah, WI	$11,586,606
  #215	Billings, MT	$11,570,641
  #216	Athens-Clarke County, GA	$11,562,554
  #217	Hilton Head Island-Bluffton, SC	$11,497,194
  #218	Lynchburg, VA	$11,430,306
  #219	Odessa, TX	$11,399,343
  #220	Wausau-Weston, WI	$11,250,695
  #221	Wheeling, WV-OH	$11,239,365
  #222	Waterloo-Cedar Falls, IA	$11,197,979
  #223	Florence, SC	$11,018,873
  #224	Medford, OR	$10,949,122
  #225	Fort Smith, AR-OK	$10,920,156
  #226	Greenville, NC	$10,841,765
  #227	Merced, CA	$10,465,518
  #228	Kahului-Wailuku-Lahaina, HI	$10,356,019
  #229	Eau Claire, WI	$10,308,773
  #230	Panama City, FL	$10,269,545
  #231	Sioux City, IA-NE-SD	$10,111,866
  #232	Chico, CA	$10,006,052
  #233	Dover, DE	$9,984,324
  #234	Idaho Falls, ID	$9,915,330
  #235	El Centro, CA	$9,912,905
  #236	Jacksonville, NC	$9,900,984
  #237	Daphne-Fairhope-Foley, AL	$9,891,548
  #238	Jackson, TN	$9,779,929
  #239	State College, PA	$9,750,456
  #240	Harrisonburg, VA	$9,499,442
  #241	Redding, CA	$9,419,468
  #242	Saginaw, MI	$9,363,549
  #243	Houma-Thibodaux, LA	$9,350,744
  #244	La Crosse-Onalaska, WI-MN	$9,294,924
  #245	Johnson City, TN	$9,219,695
  #246	Racine, WI	$9,100,374
  #247	Warner Robins, GA	$8,993,124
  #248	Yuma, AZ	$8,977,170
  #249	Lima, OH	$8,962,374
  #250	Jefferson City, MO	$8,956,976
  #251	Abilene, TX	$8,848,793
  #252	Prescott Valley-Prescott, AZ	$8,796,885
  #253	Monroe, LA	$8,699,152
  #254	Kingston, NY	$8,622,165
  #255	Morgantown, WV	$8,597,534
  #256	California-Lexington Park, MD	$8,554,244
  #257	Janesville-Beloit, WI	$8,530,214
  #258	Terre Haute, IN	$8,502,107
  #259	East Stroudsburg, PA	$8,493,417
  #260	Niles, MI	$8,455,695
  #261	Flagstaff, AZ	$8,444,850
  #262	Winchester, VA-WV	$8,419,006
  #263	Bowling Green, KY	$8,368,247
  #264	Las Cruces, NM	$8,339,710
  #265	St. George, UT	$8,338,042
  #266	Joplin, MO	$8,319,062
  #267	San Angelo, TX	$8,284,455
  #268	Bloomington, IN	$8,272,024
  #269	Blacksburg-Christiansburg, VA	$8,271,597
  #270	Bismarck, ND	$8,243,740
  #271	Coeur d’Alene, ID	$8,112,478
  #272	Yuba City, CA	$8,104,050
  #273	Sebastian-Vero Beach, FL	$8,063,835
  #274	Dalton, GA	$7,950,074
  #275	Decatur, IL	$7,856,804
  #276	Dubuque, IA	$7,840,579
  #277	Manhattan, KS	$7,818,079
  #278	Bangor, ME	$7,813,558
  #279	Rocky Mount, NC	$7,799,020
  #280	Sheboygan, WI	$7,747,640
  #281	Pittsfield, MA	$7,682,977
  #282	Mount Vernon-Anacortes, WA	$7,659,302
  #283	Jackson, MI	$7,651,976
  #284	Santa Fe, NM	$7,636,186
  #285	Dothan, AL	$7,636,116
  #286	Ames, IA	$7,583,257
  #287	Rapid City, SD	$7,565,027
  #288	Battle Creek, MI	$7,528,043
  #289	Glens Falls, NY	$7,446,782
  #290	Grand Junction, CO	$7,444,077
  #291	Burlington, NC	$7,440,110
  #292	Pueblo, CO	$7,436,671
  #293	Logan, UT-ID	$7,425,275
  #294	Wenatchee, WA	$7,403,597
  #295	Vineland-Bridgeton, NJ	$7,376,321
  #296	Auburn-Opelika, AL	$7,335,523
  #297	Decatur, AL	$7,282,688
  #298	Kankakee, IL	$7,282,382
  #299	Hanford-Corcoran, CA	$7,258,824
  #300	Columbus, IN	$7,205,692
  #301	Hattiesburg, MS	$7,181,156
  #302	Wichita Falls, TX	$7,096,972
  #303	Ithaca, NY	$7,044,555
  #304	Lake Havasu City-Kingman, AZ	$7,037,905
  #305	Alexandria, LA	$7,037,021
  #306	Watertown-Fort Drum, NY	$6,972,539
  #307	Weirton-Steubenville, WV-OH	$6,966,489
  #308	Lebanon, PA	$6,911,784
  #309	Punta Gorda, FL	$6,911,071
  #310	Madera, CA	$6,907,890
  #311	Chambersburg-Waynesboro, PA	$6,846,649
  #312	Elizabethtown-Fort Knox, KY	$6,819,777
  #313	Muskegon, MI	$6,795,782
  #314	Missoula, MT	$6,780,085
  #315	Altoona, PA	$6,736,868
  #316	Monroe, MI	$6,716,820
  #317	St. Joseph, MO-KS	$6,700,369
  #318	Cheyenne, WY	$6,608,922
  #319	Williamsport, PA	$6,562,069
  #320	Valdosta, GA	$6,529,753
  #321	Jonesboro, AR	$6,494,679
  #322	Fairbanks, AK	$6,477,984
  #323	Albany, GA	$6,462,473
  #324	New Bern, NC	$6,436,366
  #325	Owensboro, KY	$6,434,476
  #326	Ocean City, NJ	$6,279,126
  #327	Grand Forks, ND-MN	$6,226,443
  #328	Morristown, TN	$6,218,224
  #329	Carbondale-Marion, IL	$6,206,570
  #330	Mankato, MN	$6,157,026
  #331	Texarkana, TX-AR	$6,086,205
  #332	Longview, WA	$6,047,768
  #333	Florence-Muscle Shoals, AL	$5,989,958
  #334	Casper, WY	$5,887,565
  #335	Twin Falls, ID	$5,878,885
  #336	Staunton, VA	$5,865,980
  #337	Sherman-Denison, TX	$5,852,474
  #338	Midland, MI	$5,836,461
  #339	Fond du Lac, WI	$5,817,790
  #340	Goldsboro, NC	$5,761,092
  #341	Farmington, NM	$5,698,394
  #342	Lawton, OK	$5,636,670
  #343	Lewiston-Auburn, ME	$5,614,156
  #344	Albany-Lebanon, OR	$5,608,491
  #345	Lawrence, KS	$5,586,561
  #346	Sumter, SC	$5,539,578
  #347	The Villages, FL	$5,507,387
  #348	Cleveland, TN	$5,423,969
  #349	Sierra Vista-Douglas, AZ	$5,399,087
  #350	Mansfield, OH	$5,251,489
  #351	Homosassa Springs, FL	$5,247,686
  #352	Corvallis, OR	$5,242,566
  #353	Johnstown, PA	$5,197,201
  #354	Springfield, OH	$5,162,330
  #355	Brunswick, GA	$5,136,201
  #356	Anniston-Oxford, AL	$5,108,424
  #357	Victoria, TX	$5,082,222
  #358	Bloomsburg-Berwick, PA	$4,916,778
  #359	Hammond, LA	$4,897,538
  #360	Grand Island, NE	$4,871,762
  #361	Cape Girardeau, MO-IL	$4,838,122
  #362	Beckley, WV	$4,563,061
  #363	Rome, GA	$4,539,453
  #364	Michigan City-La Porte, IN	$4,521,182
  #365	Kokomo, IN	$4,488,369
  #366	Muncie, IN	$4,486,204
  #367	Hinesville, GA	$4,427,847
  #368	Gettysburg, PA	$4,310,644
  #369	Elmira, NY	$4,230,830
  #370	Carson City, NV	$4,225,603
  #371	Bay City, MI	$4,158,772
  #372	Great Falls, MT	$4,150,622
  #373	Cumberland, MD-WV	$4,025,355
  #374	Parkersburg-Vienna, WV	$4,000,337
  #375	Pine Bluff, AR	$3,996,508
  #376	Hot Springs, AR	$3,907,112
  #377	Pocatello, ID	$3,732,010
  #378	Grants Pass, OR	$3,666,285
  #379	Danville, IL	$3,645,245
  #380	Walla Walla, WA	$3,642,288
  #381	Lewiston, ID-WA	$3,274,461
  #382	Gadsden, AL	$3,175,372
  #383	Enid, OK	$2,926,730
  #384	Sebring-Avon Park, FL	$2,894,022
  	All U.S. Metro Areas	$20,943,239,585

  As the graphic above makes obvious, NYC’s GDP towers over the rest. The Big Apple is the nerve center for a number of high-impact industries, including finance and media.

  Moving down the ranking, LA has a $1.1 trillion economy, followed by Chicago, with a GDP of just over $760 billion.

  The Fastest Growing Cities

  Although many of the top ranking cities are not surprising, there are a number of up-and-coming cities in the list. A report from the Kenan Institute, at the University of North Carolina’s Business School, reveals the fastest growing cities in the U.S. in terms of GDP growth year-over-year. Here’s a look at the top 10:

  Rank	City	State	GDP Growth (2022)
  #1	San Francisco/Bay Area	California	4.8%
  #2	Austin	Texas	4.3%
  #3	Seattle	Washington	3.5%
  #4	Raleigh/Durham	North Carolina	3.4%
  #5	Dallas	Texas	3.1%
  #6	Denver	Colorado	3.0%
  #7	Salt Lake City	Utah	2.8%
  #8	Charlotte	North Carolina	2.5%
  #9	New Orleans	Louisiana	2.4%
  #10	Orlando	Florida	2.4%

  San Francisco, Seattle, and Dallas appear on both the overall GDP size and growth lists. Dallas’ economy is driven in large part by a growing healthcare industry. The city also continues to attract talent being home to large companies AT&T, CBRE Group, and Texas Instruments.

  North Carolina is home to two of the fastest growing metropolitan areas, Raleigh-Durham and Charlotte. These cities may be ones to watch as they are becoming hubs of tech, research, and manufacturing. In fact, North Carolina was recently ranked as the most attractive U.S. state to do business in and both cities are among the fastest growing in terms of population.

  The economic center of gravity within the U.S. could be shifting away from the traditional centers of power towards booming cities in the South and West of the United States. The Kenan Institute found that the recovery of hospitality and leisure sectors has helped destinations in these regions like New Orleans and Orlando. Additionally, the shift towards high-tech industry jobs, remote work, and cheaper housing have made these cities very attractive.

  Of course, the sunny climate in these cities is an attractive selling point as well.

  Tyler Durden
  Sun, 03/12/2023 – 19:45

• Home Depot Founder Tells Americans To "Wake Up" After Silicon Valley Bank Collapse
  Home Depot Founder Tells Americans To “Wake Up” After Silicon Valley Bank Collapse

  Authored by Frank Fang via The Epoch Times,

  Home Depot co-founder Bernie Marcus asked Americans to “wake up” to the reality that the U.S. economy is in “tough times,” following the collapse of Silicon Valley Bank (SVB).

  “I can’t wait for [President Joe] Biden to get on the speech again and talk about how great the economy is and how it’s moving forward and getting stronger by the day. And this is an indication that whatever he says is not true,” Marcus told Fox News on March 11.

  Marcus added,

  “And maybe the American people will finally wake up and understand that we’re living in very tough times, that, in fact, that a recession may have already started. Who knows? But it doesn’t look good.”

  

  Silicon Valley Bank, the nation’s 16th largest bank with about $209 billion in total assets, collapsed on March 10, after depositors rushed to withdraw money over concerns of the bank’s solvency. The Federal Deposit Insurance Corporation (FDIC) has now assumed control of the bank.

  The collapse of the California bank was the second biggest bank failure in U.S. history since Washington Mutual during the 2008 financial crisis.

  On Saturday, a White House statement said Biden has spoken to California Gov. Gavin Newsom on the bank’s failure. Newsom also issued a statement saying he had been in touch with “the highest levels of leadership at the White House and Treasury.”

  ‘Woke’ 

  Marcus attributed the bank’s failure to its decisions to adopt “woke” policies.

  “I feel bad for all of these people that lost all their money in this woke bank. You know, it was more distressing to hear that the bank officials sold off their stock before this happened. It’s depressing to me,” Marcus said.

  “Who knows whether the Justice Department would go after them? They’re a woke company, so I guess not. And they’ll probably get away with it.”

  According to a filing with the Securities and Exchange Commission, Greg Becker, CEO of Silicon Valley Bank, sold 12,451 shares of the bank’s parent company SVB Financial Group on Feb. 27.

  SVB announced in January 2022 that it was committed to providing at least $5 billion in loans, investments, and other financings by 2027, to support companies “that are working to decarbonize the energy and infrastructure industries and hasten the transition to a sustainable, net zero emissions economy.”

  Marcus blamed the Biden administration for pushing banks and companies into being “more concerned about global warming” than shareholder returns.

  “These banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is shareholder returns,” he said.

  “Instead of protecting the shareholders and their employees, they are more concerned about the social policies. And I think it’s probably a badly run bank.

  “They’ve been there for a lot of years. It’s pathetic that so many people lost money that won’t get it back.”

  Responses

  Several California lawmakers have shared their concerns about the bank’s failure on Twitter.

  “If regulators do not act quickly, the Silicon Valley Bank collapse will have widespread ramifications for small businesses, start-ups, and nonprofits trying to make payroll–as well as on our broader economy,” Sen. Alex Padilla (D-Calif.) wrote.

  Padilla added that he had been in contact with officials from the administration and the Treasury Department to ensure a quick resolution.

  “Deeply troubled by SVB’s collapse & uncertainty it’s caused. I’m hearing from workers in my district concerned when they’ll be paid & if they’ll be laid off,” Rep. Josh Harder (D-Calif.) wrote. “Regulators must give urgent clarity to depositors to prevent panic. Vigorous action is needed to protect account holders.”

  Republican presidential hopefuls—Nikki Haley and Vivek Ramaswamy—both said on Twitter that a bailout is not the resolution.

  “Taxpayers should absolutely not bail out Silicon Valley Bank,” Haley wrote.

  “Private investors can purchase the bank and its assets. It is not the responsibility of the American taxpayer to step in.”

  The former South Carolina governor added, “The era of big government and corporate bailouts must end.”

  “The right answer isn’t a bailout. It’s to get the government out of the way and let another bank acquire SVB if that’s what they actually want to do,” Ramaswamy wrote.

  Ramaswamy, a biotechnology entrepreneur, is the author of “Woke, Inc.: Inside Corporate America’s Social Justice Scam.”

  Tyler Durden
  Sun, 03/12/2023 – 19:15

• "It's Too Dangerous": Texas Officials Issue Travel Warning After Latest Mexico Kidnappings
  “It’s Too Dangerous”: Texas Officials Issue Travel Warning After Latest Mexico Kidnappings

  Officials from the Texas Department of Public Safety (DPS) has warned Americans against travel in Mexico after three Texans have gone missing.

  “We have a duty to inform the public about safety, travel risks, and threats. Based on the volatile nature of cartel activity and the violence we are seeing there; we are urging individuals to avoid travel to Mexico at this time,” said DPS Director Steven McCraw.

  Lt. Chris Olivarez reiterated the warning, and advised Spring Breakers in particular to avoid Mexico.

  “It is too dangerous with the increase in violence and kidnappings that are taking place in Mexico. So very important and I can’t stress enough to those who are thinking about traveling to Mexico, especially for Spring breakers,” he told Fox News.

  The three kidnapped women are Maritza Trinidad Perez Rios, 47, Marina Perez Rios, 48, and Dora Alicia Cervantes Saenz, 53, who went missing during a Feb. 24 trip to a flea market in the city of Montemorelos in Nuevo Leon State – located around three hours from the border by car, Nuevo Leon Attorney General Office said. They were traveling in a green mid-1990s Chevy Silverado.

  

  One of the missing women’s husbands spoke with her via phone during the trip, but grew concerned after not being able to reach her afterward. 

  “Since he couldn’t make contact over that weekend, he came in that Monday and reported it to us,” said Penitas Police Chief Roel Bermea, who added that their families have been in contact with Mexican authorities who are investigating the case.

  On Friday the FBI said it was aware of the missing persons case – two sisters and a friend, who have gone missing.

  The kidnapping is the second this month to make headlines, after four Americans were kidnapped and two of them killed weeks ago during a trip to the border town of Matamoros, near Brownsville, Texas.

  The four were traveling on March 3 so that one of the survivors, Latavia “Tay” McGee, could have cosmetic surgery. At approximately Noon they were fired upon in downtown Matamoros and then loaded into a pickup truck. Another friend who remained in Brownsville called the police after not being able to reach the group.

  Six people were arrested in connection to the incident, according to Tamaulipas Attorney General Irving Barrios Mojica, who confirmed the arrests of five suspects. The sixth was subsequently arrested and linked to the kidnappings and murders.

  In response, the Scorpions faction of the Gulf cartel handed over the five members who were arrested, along with an apology letter o the locals, a Mexican national who died in the crossfire, and the four American women and their families.

  “We have decided to turn over those who were directly involved and responsible in the events, who at all times acted under their own decision-making and lack of discipline,” reads the letter.

  Tyler Durden
  Sun, 03/12/2023 – 18:45

• India Takes A Leading Role In De-Dollarization
  India Takes A Leading Role In De-Dollarization

  Authored by Andrew Korybko via The Automatic Earth blog,

  Reuters reported on Wednesday that “India’s Oil Deals With Russia Dent Decades-Old Dollar Dominance”, which informed their audience that the growing trend of those two using national or third-party currencies like the UAE’s is something significant for everyone to pay attention to. To that outlet’s credit, it also reminded readers that IMF Deputy Managing Director Gita Gopinath foresaw in the month after Russia’s special operation began that the West’s sanctions “could erode the dollar’s dominance”.

  

  Lo and behold, that’s precisely what happened, with India of all countries accelerating de-dollarization through its non-dollar-denominated energy deals with Russia. About them, Russia has since become India’s largest supplier over the past year and now provides a whopping 35% of that country’s needs, which is also the world’s third-largest oil importer and fifth-largest economy. Their new energy ties, and particularly the growing de-dollarization dimension of their deals, are thus globally important.

  None of what was just described is driven by any anti-American animus on India’s part since everything is purely motivated by the pursuit of that country’s objective national interests. Delhi had no choice but to gradually diversify away from dollar-denominated energy deals with Moscow due to Washington’s illegal sanctions. Its multipolar leadership wasn’t going to let the world’s most populous country slip into an economic crisis just to please the US by eschewing the import of discounted oil from Russia.

  By defying American pressure upon it to unilaterally concede on those aforementioned objective national interests, India’s economy ended up growing at twice the pace of China’s, which contributed to catapulting that country to the forefront of the global systemic transition to multipolarity. Amidst the impending trifurcation of International Relations, India is now poised to de facto lead the Global South in helping fellow developing countries balance between the Golden Billion and the Sino-Russo Entente.

  Had India complied with the US’ illegal sanctions, then the New York Times wouldn’t have recently admitted that those restrictions failed just like the West’s efforts to “isolate” Russia did as well. It was largely due to that South Asian Great Power’s truly independent grand strategy that this latest phase of the New Cold War didn’t decisively end in the Golden Billion’s victory over Russia and the restoration of unipolarity, which would have been detrimental to India and every other developing country’s interests.

  India therefore changed the course of history by remaining committed to the pursuit of its objective national interests, which to remind everyone, aren’t driven by any desire to harm the interests of third parties like the US. Its leading role in de-dollarization via its increasing number of non-dollar-denominated energy deals with Russia is also reshaping the global financial system by reducing that currency’s prior dominance and thus leading to a more multipolar state of affairs for everyone.

  Even the US itself seems to have finally accepted that it can’t reverse this trend, which is evidenced by former Indian Ambassador to Russia Kanwal Sibal recently telling TASS that “Lately, the discourse from Washington has changed and India is no longer being asked to stop buying oil from Russia. In a recent visit to India, the US Treasury Secretary actually said that India can buy discounted oil from Russia as much as it wants so long as western tankers and insurance companies are not used.”

  Nevertheless, radical liberal–globalist ideologues like Color Revolution mastermind George Soros are still desperately clinging to the dream of restoring the US’ rapidly declining unipolar hegemony, hence why he de facto declared Hybrid War against India during the Munich Security Conference last month. It remains unclear whether he and his network have enough support in the Western Establishment to advance that regime change agenda, but his threat is still worrisome and should be taken seriously.

  Reuters’ latest report about India’s role in accelerating de-dollarization might fuel interest among likeminded “Western Exceptionalists” in supporting his de facto Hybrid War against that country so observers should closely monitor related developments in order to assess whether this happens. In any case, those who sincerely support multipolarity should loudly applaud India for its indispensable role in comprehensively facilitating this process, especially its financial dimension as described in this analysis.

  *  *  *

  Support the Automatic Earth via Patreon.

  Tyler Durden
  Sun, 03/12/2023 – 18:15

• Visualizing The Drive To A Fully Autonomous Car
  Visualizing The Drive To A Fully Autonomous Car

  Until quite recently, the autonomous car was the stuff of science fiction. More hype than happening some time soon.

  But, as Visual Capitalist’s Chris Dickert and Miranda Smith detail below, with automakers spending billions to develop the technology – $75 billion by one count – the race is on to be the first to launch a fully self-driving vehicle.

  This visualization from Global X ETFs, takes a look at the drive for a fully autonomous car.

  

  From the Flintstones to the Jetsons

  What does it mean to say that a car is autonomous? Does a human driver need to be ready to take over? Can it drive on its own all or just some of the time? And do driving conditions need to be ideal or can it handle the odd thunderstorm?

  Fortunately, SAE International, the global standards and engineering association, has come up with the creatively-named “Taxonomy and Definitions for Terms Related to On-Road Motor Vehicle Automated Driving Systems,” or SAE JS3016 for short.

  The Six Levels of Driving Automation

  The system has six levels of automation and spans a yawning gulf of features. Level zero is analogous to Fred Flintstone’s foot-powered, stone age car, while level five is something like George Jetson’s futuristic, bubble-blowing flying saucer.

  Level 0: No Driving Automation

  The driver is in full control and there is no automation technology. It may include support or alert systems such as stability control and blind-spot warning. Most cars on the road today are level zero.

  Level 1: Driver Assistance

  The driver is supported by one support system, like adaptive cruise control or lane-following assistance, but needs to be ready to take control at any time.

  Level 2: Partial Driving Automation

  The driver still needs to be alert and supervise at all times, but the vehicle can take over multiple functions like braking, acceleration, and steering, using Advanced Driving Assistance Systems (ADAS). The Tesla Autopilot feature is generally understood to fall under level two.

  Level 3: Conditional Driving Automation

  After this point you are not considered to be driving, even if you’re seated in the driver’s seat. Using artificial intelligence (AI), the vehicle handles all driving tasks. A driver still needs to be present in case of an emergency or system failure. Honda’s Traffic Jam Pilot and Mercedes-Benz’s Drive Pilot are the only ones to hit this milestone.

  Level 4: High Driving Automation

  This is where you lose the steering wheel and pedals. A level four vehicle is completely autonomous, but is limited by speed or to a certain geographic area. In the event of a system failure or emergency, the vehicle can slow down, pull over, and stop on its own. A driverless taxi or public transport would be a likely application at this level.

  Level 5: Full Driving Automation

  This is the Holy Grail of automated vehicles. At this level, humans are completely superfluous and need only set the destination and sit back and enjoy the ride. The vehicle can drive in any situation, in all conditions, and is not limited to a particular location or speed.

  So When Can I Watch Netflix While Driving?

  Probably not anytime soon, if figures from California’s Department of Motor Vehicles are any indication.

  The Pacific state is home to a host of autonomous vehicle manufacturers, many based in Silicon Valley, all eager to test their technology on public roadways. As a result, the DMV has developed regulations for testing self-driving cars, both with and without a driver.

  Part of the rules require that manufacturers file annual reports about their activities. According to these, at the end of 2021, 26 companies testing 1,174 autonomous vehicles (with a driver) logged over 4 million miles on California roads. By way of comparison, four companies logged only 25,000 miles using driverless vehicles.

  If you take the miles covered as a proxy for how far the technology has progressed, testing on systems that still require a driver—so level 3 at best—is miles ahead of driverless systems, or level 4 and up.

  Hey Siri, Which Way Next?

  In addition to being a really tough engineering problem, autonomous cars also raise tricky ethical questions.

  Part of the difficulty has been trying to get a machine to make the same choices as human drivers would. What if the brakes fail and the AI has to make a split-second decision? Does it swerve to avoid a pedestrian and into a telephone pole, maybe killing the passenger, or keep driving?

  Problems such as these are often covered in philosophy under the Trolley Problem, which features a runaway trolley and a switch. Throw the switch and save a life, but maybe take another?

  Tackling this problem, which can get a bit absurd at times, is a good way to discover the “right” answer to ethical questions. Autonomous car manufacturers are going to have to have an answer in any autonomous future.

  Invest in the Future of Road Transport

  With autonomous car technology advancing at leaps and bounds, there are plenty of opportunities to invest in the companies working to make it a reality.

  Learn more about the Global X Autonomous & Electric Vehicles ETF (DRIV), which provides exposure to companies involved in the development of autonomous vehicles, EVs, and EV components and materials.

  You can also learn how experiential technologies like AI are driving change in road transport in Charting Disruption, a joint report by Global X ETFs and the Wall Street Journal (also available as a downloadable PDF).

  Tyler Durden
  Sun, 03/12/2023 – 17:45

• Silicon Valley Bank Followed Exactly What Regulation Recommended
  Silicon Valley Bank Followed Exactly What Regulation Recommended

  Authored by Daniel Lacalle,

  The second largest collapse of a bank in recent history could have been prevented. Now, the impact is too large, and the contagion risk is difficult to measure.

  

  The demise of the Silicon Valley Bank (SVB) is a classic bank run driven by a liquidity event, but the important lesson for everyone is that the enormity of the unrealized losses and financial hole in the bank’s accounts would have not existed if it were not for ultra-loose monetary policy.

  Let us explain why.

  As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits, according to their public accounts. Their top shareholders are Vanguard Group (11.3%), BlackRock (8.1%), StateStreet (5.2%) and the Swedish pension fund Alecta (4.5%).

  The incredible growth and success of SVB could not have happened without negative rates, ultra-loose monetary policy, and the tech bubble that burst in 2022. Furthermore, the bank’s liquidity event could not have happened without the regulatory and monetary policy incentives to accumulate sovereign debt and mortgage-backed securities.

  The asset base of Silicon SVB read like the clearest example of the old mantra: “Don’t fight the Fed”.

  SVB made one big mistake: Follow exactly the incentives created by loose monetary policy and regulation.

  What happened in 2021? Massive success that, unfortunately, was also the first step to its demise. The bank’s deposits nearly doubled with the tech boom. Everyone wanted a piece of the unstoppable new tech paradigm. SVB’s assets also rose and almost doubled.

  The bank’s assets rose in value. More than 40% were long-dated Treasuries and mortgage-backed securities (MBS). The rest were seemingly world-conquering new tech and venture capital investments.

  Most of those “low risk” bonds and securities were held to maturity. They were following the mainstream rulebook: Low-risk assets to balance the risk in venture capital investments.

  When the Federal Reserve raised interest rates, they must have been shocked.

  The entire asset base of SVB was one single bet: Low rates and quantitative easing for longer.

  Tech valuations soared in the period of loose monetary policy and the best way to hedge that risk was with Treasuries and MBS. Why would they bet on anything else? This is what the Fed was buying in billions every month, these were the lowest risk assets according to all regulations and, according to the Fed and all mainstream economists, inflation was purely “transitory”, a base-effect anecdote. What could go wrong?

  Inflation was not transitory and easy money was not endless.

  Rate hikes happened. And they caught the bank suffering massive losses everywhere. Goodbye bonds and MBS price. Goodbye tech “new paradigm” valuations. And hello panic. A good old bank run, despite the strong recovery of the SVB shares in January. Mark-to-market unrealized losses of $15 billion were almost 100% of the market capitalization of the bank. Wipe out.

  As the famous episode of South Park said: “…Aaaaand it’s gone”. SVB showed how quickly the capital of a bank can dissolve in front of our eyes.

  The Federal Deposit Insurance Corporation (FDIC) will step in, but it is not enough because only 3% of the deposits of SVB were less than $250,000. According to Time Magazine, more than 85% of Silicon Valley’s Bank’s deposits were not insured.

  It is worse. One third of U.S. deposits are in small banks and around half are uninsured, according to Bloomberg.

  Depositors at SVB will likely lose most of their money and this will also create significant uncertainty in other entities.

  SVB was the poster boy of banking management by the book.

  They followed a conservative policy of adding the safest assets -long-dated Treasury bills- as deposits soared.

  SVB did exactly what those that blamed the 2008 crisis on “de-regulation” recommended.

  SVB was a boring and conservative bank that invested the rising deposits in sovereign bonds and mortgage-backed securities and believed that inflation was transitory as everyone except us, the crazy minority, repeated.

  SVB did nothing but follow regulation and monetary policy incentives and Keynesian economists’ recommendations point by point.

  SVB was the epitome of mainstream economic thinking. And mainstream killed the tech star.

  Many will now blame greed, capitalism and lack of regulation but guess what?

  More regulation would have done nothing because regulation and policy incentivize adding these “low risk” assets. Furthermore, regulation and monetary policy are directly responsible for the tech bubble. The increasingly elevated valuations of non-profitable tech and the allegedly unstoppable flow of capital to fund innovation and green investments would never have happened without negative real rates, and massive liquidity injections. In the case of SVB, its phenomenal growth in 2021 is a direct consequence of the insane monetary policy implemented in 2020, when the major central banks increased their balance sheet to $20 trillion as if nothing would happen.

  SVB is a casualty of the narrative that money printing does not cause inflation and can continue forever.

  They embraced it wholeheartedly, and now they are gone.

  SVB invested in the entire bubble of everything: Sovereign bonds, MBS and tech. Did they do it because they were stupid or reckless? No. They did it because they perceived that there was exceptionally low to no risk in those assets. No bank accumulates risk in an asset they believe has considerable risk. The only way in which a bank accumulates risk is if they perceive that there is none. Why do they perceive it? Because the government, regulators, central bank, and the experts tell them so. Who will be next?

  Many will blame everything except the perverse incentives and bubbles created by monetary policy and regulation and will demand rate cuts and quantitative easing to solve the problem.

  It will only worsen. You do not solve the consequences of a bubble with more bubbles.

  The demise of Silicon Valley Bank highlights the enormity of the problem of risk accumulation by political design. SVB did not collapse due to reckless management, but because they did exactly what Keynesians and monetary interventionists wanted them to do.

  Tyler Durden
  Sun, 03/12/2023 – 17:15

• Vinyl Sales Eclipse CDs For First Time Since 1987
  Vinyl Sales Eclipse CDs For First Time Since 1987

  According to a new report by the Recording Industry Association of America (RIAA), vinyl records have experienced a resurgence in popularity, with sales outpacing those of CDs for the first time since 1987.

  RIAA’s report, published on Thursday, stated that in terms of physical units sold in 2022, records surpassed CDs with a total of 41.3 million sales, while CDs had 33.4 million sales. The industry group said vinyl sales had experienced sixteen consecutive years of growth. 

  The vinyl boom is back for several reasons. During the pandemic, when concert venues were forced to shut down, some artists and their labels released music on vinyl to enhance the fan experience without them having to leave the house and offered a new untapped income stream for artists and labels. 

  “I think that it was something that labels saw as a ‘We can do this to generate some income [during the pandemic],'” Lyndsey Havens, a senior editor at Billboard, told Gizmodo recently. 

  “That’s why you see a lot of live albums that were rereleased on vinyl or pressed on vinyl for the first time. It’s just a really good way to generate some extra income and then I think fans were responding well to that and now they’re demanding it from their favorite artists,” Havens said. 

  Last year, revenue generated from vinyl records increased by 17%, exceeding $1.2 billion. This growth was especially significant during the pandemic. RIAA said that vinyl contributed to 71% of physical format revenue. 

  

  Meanwhile, RIAA said CD revenue fell 18% last year to $483 million. As we had previously noted in 2019, it was expected that sales of records would surpass those of CDs. 

  A Substack article by Ted Gioia said, “if it wasn’t for Taylor Swift, the vinyl market would have actually declined in 2022. This one artist did more to support vinyl sales than the much-hyped “Record Store Days.””

  

  Gioia noted, “Half of the vinyl buyers don’t own a record player. They apparently bought the Taylor Swift album as a kind of memorabilia—something a little nicer than a band T-shirt.” 

  

  Gioia warned of a hype cycle in record sales.

  Tyler Durden
  Sun, 03/12/2023 – 16:45

• Tchir: 'I Like Mid Banks, I Cannot Lie'
  Tchir: ‘I Like Mid Banks, I Cannot Lie’

  Authored by Peter Tchir via Academy Securities,

  As I put pen to paper (or fingers to keypad), I can’t help but wonder if this is the hill that I want to die on?

  There is so much uncertainty surrounding the banking developments last week. The only things that I know for certain are that SIVB ended the previous week at $284.39 and was halted before market open on Friday at $105.95 (and is supposedly much lower since). SI, not to be confused with SIVB, closed on February 28 at $13.91 and closed on March 10 at $2.53. That is what we know for certain. We also know that KRE, a $2.13 billion market cap S&P Regional Banking ETF, saw daily trading volume spike from an average of 8.7 million sharesto 97 million shares on Friday. In addition, its market cap dropped 16% last week (let’s call this the “mid bank” index). XLF, a “big financial” ETF, fell 8.5% last week on volume that “only” tripled, but it is exposed to financials other than “big banks”.

  The prudent thing is to run away and wait for clarity. That is especially true when there is so much misinformation and even “FUD” (the term crypto people like to use when they disagree with someone’s negative crypto view) that it is almost imperative to stay away from this topic. However, I keep thinking of the phrase “The Lord Hates a Coward”, so let’s dive right in.

  The Disruptive Economy

  Before looking to the banks and the banking system, I feel it is absolutely necessary to highlight our focus on the “Disruptive Economy”. We believe that it played a large role in not just markets, but the broader economy for the past several years. We’ve used a “broad” definition of disruptive that encompassed some big tech, but also (and far more importantly) the entirety of public and private companies and their investors. In addition, we included crypto and crypto related businesses in that mix. That has led to several important conclusions (or at least thoughts) on our side:

  • The economy and inflation were far more influenced by the disruptive economy than traditional economists acknowledged. See the Rise & Fall of Inflation Factors or the Circular Error in Disruption section from our 2023 Outlook. If the events of the past few weeks don’t have a circularity to them, I don’t know what does.

  • The Disruptive Portfolio and the attitude of many disruptive investors seemed very different from that of “traditional” investors. We are seeing some of that play out here, not just within the institutions, but within their customer bases as well.

  • Finally, as we’ve written, discussed, and even said on national TV, our best comparison is that this is like energy in 2015/2016, but the theme of “disruption” is at the epicenter of this problem! In 2015, the closer you were to energy, the more likely you were to get burned (pun intended). Not just by owning the companies themselves, but by owning companies serving those energy businesses (and the overall regions). This includes the local banks! I continue to believe that the closer you are to “disruption”, the chances are higher for further downside (even more than a year later). As you move away from that “epicenter”, the problems are smaller and might not even be felt.

    • There is one encouraging thing that I cannot resist mentioning given this line of thinking. A certain high yield ETF dropped 20% from the middle of 2014 to its low on February 11, 2016 (mostly due to energy and commodity exposure). About a month later, as the tide was already turning, a HY ETF that excluded energy companies was announced. Maybe we haven’t hit rock bottom in this particular episode, but the contrarian in me is attracted to mid banks after the events of this past week.

  Now that we’ve set the table with that recap of our views on disruption, we can move on to another table setting section.

  Not My First Rodeo

  I’ve been on both sides of highly controversial issues. I’m not always bullish, and if anything, I am more often than not bearish. It’s my nature, which is probably why I liked trading credit derivatives on junk bonds and indices.

  • I hated the CPDO product (Constant Proportion Default Obligations). It took leverage on something that was BBB and made it AAA. Yes, this is where you put leverage on something and received a better rating compared to owning it outright. Seemed nonsensical, and it was, but the “math” worked. However, the math had a major “flaw” in that it ignored how many companies might see spreads widen dramatically, then lose their IG rating, and not be put back into the relevant indices when (if) they recovered. We proved that portfolios constructed in the past (2000s) would have triggered this product (circa 2006 or so). The product was so wildly profitable. You got to charge people to leverage something that was BBB (and already profitable) and had a customer base of AAA only buyers. Anyways, on a painful call to the big boss’s office I was told to stop fighting something that I was so “obviously” wrong about.

  • Roadmap to IG 200 (and the accompanying IG 200 hats). It was controversial, not quite right (only got to 198), and then I overstayed my welcome when I faded the post “JPM saving Bear” rally in CDS far too early (which has also left scars).

  • Could a VIX ETF Go Poof in a Day? I once worked with a reporter who was so passionate about a story that he fought the editors and detractors until he got the piece published. That made the follow-on piece One Did Go Poof so sweet!

  I’ve also been comfortable taking the bull case. In fact, saying “buy Jefferies” in response to Steph Ruhle’s question (back when she was still on Bloomberg TV) created quite a soundbite for my independent research company. It actually turned out to be quite right (despite all the poorly thoughtout comparisons to MF Global).

  More recently, at Academy, we championed credit by touting 2019 as the Year of the Debt Diet, having published a piece questioning the punishment that GE credit spreads were taking just a month or two before that.

  Writing that GE piece feels eerily similar to what I’m about to embark on today. I can only hope that the results are as timely and as poignant. I’ve gotten plenty of things wrong, otherwise I’d be writing these missives from some exotic private island, but let’s do this and see where we come out!

  Bank Runs!

  I hate even writing those two words! It seems incredibly flammable. Like shouting fire in a crowded theater. I’m not even sure who I keep checking for over my shoulder when I write or say “bank runs”. Is it compliance? Is it the regulators? I don’t know, but this is a term that I rarely use because I think that it is shocking and dangerous, but I couldn’t figure out a better way to start the analysis of what is going on because this phrase is coming up with more frequency.

  Banks are “strange” beasts. In some ways their business model is so simple (take deposits, lend money, and make the spread in between). But not only is that simplistic, it misses the key ingredient, leverage. You cannot take enough deposits and lend them out “one to one” to make a reasonable return.

  VCSH, a 1 to 5-year corporate bond ETF, has a spread of about 110 bps. No one is buying a bank making 1%, so it needs leverage. Maybe the bank could take a lot of duration risk (I don’t know why it would, since banks learned a lot during the S&L crisis). But even with duration risk, banks aren’t an interesting thing without leverage!

  So, we will talk about leverage, at least initially.

  Banks have capital from several different sources at various levels of the capital structure.

  • Equity capital. This is what drives everything. The amount of assets a bank can hold on its books is largely determined by its equity capital (and portfolio quality).

  • Subordinated capital. Not as good as equity capital, but it enables the bank to do more than it could with just regular debt, and it is at a lower cost than raising equity.

  • Debt.

    • Deposits. Deposits are generally the “holy grail” of the bank balance sheet (post Covid banks were turning away deposits, but that was unique). You pay far less interest on funds on deposit than other forms of borrowing. They are typically viewed as “sticky”. People keep money in a bank account for a lot of reasons, probably the least of which is the interest they are earning. People (and companies) do most of their transactions through banks (and credit cards). The bank account is the “home base” of financial activities and thus tends to be more stable than other forms of debt which are more subject to market vagaries.

    • Bonds. At the risk of annoying some of our banking clients, I think one of the “best” things that came out of the GFC (on the regulatory front) was rules to largely enforce longer-dated borrowing. There is a cost to banks (and everyone) to switch to longerdated funding. It is generally far cheaper to borrow overnight than it is for 30 years (though with our current yield curve, that isn’t as obvious today as it normally is). The problem with that is you need to fund yourself every night. Banks could argue that this should be part of their risk decision, but stricter rules were imposed anyway. Since we saw what happened when bank credit quality gets called into question (ability to borrow can dry up quickly), this was a logical way to protect the system. Yes, it is a cost to banks, but I think that it really promoted a new level of “safety” on the funding side. I disagree with much of Dodd Frank and think that the Volcker Rule could only have been written by someone who had never seen a trading floor, let alone stepped onto one. One of the first things that I learned about the bond business was when I asked why almost every high yield bond was a 10 non-call 5. The answer was outrageously simple. “Because investors need to be compensated for at least 5 years of lending to the company in their current state and the company needs a 5-year window where their business is good enough (or the market is strong enough) that they can re-fi”. So, yes, I like less refinancing risk.

  A bank run is when depositors and lenders stop funding the bank, which normally occurs due to credit quality concerns!

  When I think of a bank run, I think of a fear that the bank’s assets are not solid and would incur significant losses (if sold today or those losses would be realized over time as borrowers failed to pay the bank back). Accrual accounting, not held for sale, etc. are accounting provisions used to dampen volatility in asset prices on the bank’s balance sheet. There is a difference between a loan going down in price a bit because of rates (or overall market concern) and the likelihood of that loan getting paid off. During the GFC, it was apparent that massive amounts of mortgage debt were impaired and were never coming back. Again, I think that the regulators have done a very good job with CCAR (Comprehensive Capital Analysis and Review). It incorporates many tough scenarios, but what I like most about it is that it is a “random” day, picked after the fact. Bank capital rules were almost exclusively quarterly and annual. There were massive quarter end trades done by banks. There were huge year-end trades done (especially between Asian and North American banks which had different year-ends) and these trades were less sensitive to certain annual measures. CCAR does a lot to capture the risk side of the balance sheet. It is designed so that “we” (collectively) can sleep at night “knowing” that banks are safe and won’t go through another GFC. Some of this may be questioned in light of recent events and disclosures, but I for one suspect that CCAR is serving its purpose, which is one reason why I’m heavily leaning towards this being isolated and not an industrywide issue.

  On a cursory glance and from what I’ve read, there were some issues linked to the performance of “safe” (from a credit perspective) long-duration assets. From what I’ve seen so far, I’m surprised by the duration risk that was being run. I’m a big believer in “match funding” as much as possible. That tends to reduce NIM, but also greatly reduces risks, like the ones we seem to be seeing now. Sure, hindsight is 20/20, but that is something that I strongly believe in at all times.

  Neither Moody’s nor S&P seemed to see much amiss at SIVB (no material rating action for years, until this past week). It seemed like business as usual, at least from a NRSRO (Nationally Recognized Statistical Ratings Organization) perspective.

  I will attempt to demonstrate that this is a unique situation and is linked more to the types of depositors that these banks had than to anything that is reflective of a broad trend across the industry.

  

  We start with deposits at the SIVB entities versus the entire banking system (note: SIVB deposit data is quarterly and last data point was from the end of 2022). You can see a small uptick in bank deposits during Covid relief (small as a percentage, but large in total dollars). SIVB saw their deposit levels more than triple (from $60 billion in March 2020, to a peak of almost $200 billion).

  

  This chart highlights three important things:

  1. The deposit growth seems reasonably correlated to value creation in the “disruptive” space (taking the liberty of using ARKK as a representative of that space). It was consistent with the narrative behind this entity.

  2. Deposits, in my opinion, started declining because of the industry that this bank caters to, which had been incredibly successfully for decades, but was now burning cash and had less wealth. The initial phases of deposit decline had everything to do with the depositor base and little to do with their portfolio or any other “traditional” trigger.

  3. It might also provide some insight into the sort of lending opportunities that were available at the time companies/individuals were making deposits (i.e., disruptive firms).

  This chart is “problematic” in some ways as you can see the surge in deposits correspond to a period of time when the 5-year Treasury yield was less than 1%. Since deposit rates in the U.S. stayed positive (with very few exceptions) there was relatively little spread to be earned. Taking in huge deposits at a time when yields were very low can be problematic (and let’s not forget the need to leverage).

  

  At this point, I have to admit that how they managed their portfolios also seemed to be contributing to the problem.

  These institutions seemed to do two things that are now, in hindsight, problematic.

  • They lent to “disruptive” companies. This is their bread and butter. It is their customer base. It is what made the bank famous. However, I suspect that they had never seen such an influx of money (at a time when valuations were so high and disruptive company growth prospects were unbelievably great). Even with conservative haircuts it may have been difficult to exercise prudence, and without a doubt, other banks and lenders were gunning for their customers! They were the bankers to the “sweet spot” and everyone wanted that business.

  • They seemed to have taken on more duration risk than other banks (I could be wrong here and that would be a flaw in my argument). They were basically increasing in size at a rapid pace in an environment where anything liquid was yielding next to nothing. They were getting money stuffed into deposits at one of the least interesting times for a bank to take deposits (at least in terms of locking in good NIM – Net Interest Margin).

  That has now contributed to their decline as the asset side is being called into question!

  Why I Think Current Cases are “Unique”

  The two banks in question, while different, have some similarities that are unique to them.

  Let’s get down to the theory here”

  • A massive surge (on a percentage basis) in deposits. Bank deposits grew everywhere, but the rate of increase more than tripling in a year is unique. While banks had to absorb new deposits in the wake of Covid and stimulus, these institutions saw disproportionate growth as a percentage (and total amount). Tripling from $1 billion to $3 billion seems like an easier task to manage than going from $60 billion to $180 billion. Relatively unique set of circumstances.

  • A highly correlated customer base. Whether Silicon Valley or crypto juggernauts, the customers turned out to be far more correlated than expected. When almost “everything” crypto/disruptive took off, it behaved as one entity (rather than 100s or 1000s of companies and individuals). Potentially there was some geographic concentration, but it is unusual (and unexpected) for such diverse businesses and individuals to be so correlated on the way up and on the way down. Relatively unique set of circumstances.

  • Portfolio selection.

    • Lending to customers is quite normal in banking, which is ultimately a relationship business. It is why certain banks were more exposed to energy for example. Banks, especially community banks, tend to have exposure to their “community”. Less so for regionals and even more less so for the global money-center banks. Community in this case was more about “what the people or companies did” rather than physical proximity (though that plays in as well since the two go hand in hand). I assume that there is some exposure to local real estate, which has also come under pressure since the deposits piled up. The exposure to disruptive/crypto is likely far higher here than in other banks.

    • Rate risk. The chase for yield was alive and well as the money was flooding into banks. This seems like a good time to bring back “5 Circles of Bond Investor Hell.” There are only a few things you can do when you need yield, one of which is to increase duration, which was apparently done here. Hoping the market cheapens would have worked great, but it rarely does and there is immense pressure not to sit on cash, so I’d be shocked if many had the fortitude to do that. It seems like SIVB may have extended duration. Taking more risk than normal is probably somewhat common across banks, though I’m not sure rate risk would have been the preferred method. I lean towards giving up liquidity (most don’t use it) or increasing structure (my theory on AAA CLOs being more difficult to bust than getting a perfect March Madness bracket).

  

  5 Circles of Bond Investor Hell

  I see the situation as unique because:

  • They had exceptional growth in a compressed timeframe.

  • Growth occurred during an exceptional dearth of yield.

  • Some of their decisions and the nature of their customer base (to whom they lent) may have set them up with a portfolio that was more exposed than others.

  • Customers started withdrawing because they needed the money (nothing to do with anything SIVB was doing).

  • Those withdrawals triggered selling, which turned positions meant for accrual accounting into realized losses! That combination following a period of explosive growth seemed to be what caught the attention of people.

  • Now something that looks more like a “normal” run starts. Losses get exposed. The balance sheet faces more scrutiny. Some clients may get nervous. The cash burn, which started after March 2022, likely continued into Q1 2023 (the last data point was at the end of 2022). This is where we are now and is why everyone is worried about other banks!

  I am stuck seeing this as far more unique than systemic, hence the recent selling is overdone!

  Some Bad News for All Banks

  The banking sector, even if I’m correct, will not get off scot-free.

  • Interest rates on deposits will probably have to get “competitive” more rapidly than they normally would. People covered by the FDIC limits will care less as there is no credit risk to the institution, but recent focus on higher yields across the board will make many consider keeping enough “working capital” at the bank, while owning money market funds or other higher yielding assets (including Certificates of Deposit at many banks). Personally I think that should be SOP and is how I think about my deposits – and no, I’m not trying to get banks to hate me! Those above the FDIC limits are exposed as senior unsecured creditors if a bank fails. The returns paid to senior unsecured creditors are much better than those paid on deposits, but the services provided by banks (anything from LOCs to simple check cashing and enabling payroll and business activities to function seamlessly) have immense value. I could see some banks increasing their payment rates on deposits which would eat into NIM, but that would be a valuation issue, not a credit issue. Bank P/E multiples being too high already don’t keep me up at night. I suspect little of the NIM gets a great multiple in any case, as investors have been expecting banks to slowly raise the amount they pay on deposits.

  • Closer scrutiny to bank portfolios. People far smarter than me (with better tools at their fingertips) are looking at what exposures banks have on their books. Making that analysis more complex will be the fact that many of the exposures (and certainly all of the hedges) will be in derivative books that I think are opaque at best. I would not want to be in charge of a bank that faces the headline “XYZ loaded up on duration during ZIRP” in the coming days. That is the sort of headline that can trigger people taking out deposits. If I believed a lot of banks really extended duration during ZIRP, I would be scared to death right now about recommending banks, but:

    • Asset growth was not that far above normal for most banks.

    • Private debt, credit risk, and structured risk all seem more natural for banks, all of which have been weathering this market better than sovereign debt (assuming the rate risk is taken out, which it should be in my vision of bank risk management).

  I am fully aware of these two risks, but think that:

  • Most banks are well prepared to deal with both issues and will not face any sort of a run. I am saying this, fully knowing how that “bank run” sentiment can spread like wildfire. You cannot believe how nervous I’ve been writing this report (which is maybe why it is longer than usual) because I do understand how afraid people are and how quickly even a false allegation can trigger negative momentum.

  • Valuations (after the recent shellacking) offer upside in a tricky market environment – both on the equity and credit side of the equation.

  The Non-FDIC Insured Depositors

  I saw a stat that SIVB has only about 3% of its deposits fully covered by the FDIC (very low compared to most banks). Presumably this is a bank for rich individuals and corporations.

  This is the group that is in limbo and I don’t fully understand the next steps.

  If you have $100,000,000 on deposit to meet your obligations, how much of that can you access?

  In theory, as I understand this:

  • The assets of the bank are worth X.

  • The FDIC depositors (and maybe some other senior stuff) are worth Y.

  • Z is the amount of deposits above the FDIC limits and other senior unsecured debt.

  • If X – Y > Z then there is equity value. I’m not sure I’d write that off yet, but that is just me musing about the subject. I don’t have an opinion and am not basing my overall bank recommendation on it, but it seems to have been left for dead rather quickly (even by panic standards).

  • If X – Y < Z then Z will be impaired and not receive 100 cents on the dollar.

    • Lehman claims, which were classified as unsecured debt because they filed before investment banks became banks under emergency GFC policy, settled at about 20% of par (though they ultimately recovered 100% plus accrued). It isn’t completely irrelevant (it wasn’t a bank), but it also gives us the sense of how complex this can be with financial instruments.

  Some things in favor of SIVB’s valuations:

  • It seems that much of their portfolio is liquid, making it easier to monetize and start establishing minimal values (and presumably immediate availability) for the unsecured creditors.

  • Their customer base is still a who’s who of the valley and disruptive space and many other banks and financial service companies will want to establish relationships which will help the valuation and/or any necessary sale of these assets.

  • So far it is isolated. If their situation is unique (as I obviously believe it is) then the market has a large, but digestible set of assets to absorb. If this is just the tip of the iceberg, then we are in some serious trouble as there will be more forced selling and huge pools of fixed income “in for the bid”. During the GFC, almost every bank owned too much of the same thing and needed to sell. Remember AIG FP and their super senior protection on corporate credit? That part of their portfolio never sniffed a loss as corporate credit failure was extremely well contained even in the GFC (however, the mortgage super senior was a mess). Overall, recovery rates tend to be higher during good economic times because there are fewer distressed sellers. So far this is a unique case, and that helps maximize value.

  Understanding how much access to above FDIC limit deposits companies (and individuals) will have by Monday is crucial for the disruptive companies – more so than for other banks! Access (to at least a portion) is necessary for many to function. I fully expect there to be some contingencies allowing some % access, though I could be wrong.

  White Knight Dream?

  I would not be shocked to see a “white knight” investor appear for the entire entity (possibly by Monday) because it makes a lot of the mess regarding the unsecured depositors go away (or at least more manageable).

  In the early stages of the financial crisis, we saw various entities get absorbed with a nod (if not a gentle push) from the regulators, when only months before these transactions would have faced regulatory opposition.

  The “easiest” and least painful way to value the assets might be via an acquisition by one large institution. I see two hurdles/questions facing that “dream”:

  • Will SIVB accept a valuation or will they want to work their way out, quite possibly, attempting to generate cash for equity holders and not just depositors?

  • Will banks, the natural buyer, be worried about their own deposit base too much to attempt an ambitious purchase, even with a nod from the regulators?

  I’m convinced that the Fed learned one massive lesson from the GFC (we saw Europe do a semi-decent job with their own debt crisis) – DON’T LET CONFIDENCE IN THE BANKING SECTOR FAIL!!!!

  Nothing else really matters. Financial institutions can write “living wills” until the cows come home, but if we get to that point, all bets are off.

  If this is isolated (or even if it isn’t), regulators are supposed to be ring-fencing it in because the last thing they need is for “bank run” to become the word of the week. That is hard to walk back, so getting out in front of it is crucial.

  Given how quickly they responded after Covid lockdowns (at warp speed relative to the almost plodding behavior back in 2007 and early 2008), there is hope.

  I bet there will be a lot of green dots on Bloomberg terminals on Sunday night – I remember being there when $2 dollars/share came across as the price for Bear Stearns (and physically tapping my screen with my finger, thinking the 2 was a typo).

  One thing many forget (or don’t know) about the JPM purchase of Bear was that it was accompanied by an immediate and non-contingent guarantee of Bear’s derivative book. Even if the equity deal didn’t consummate, the derivative book was JPM’s. No one ever really explained how that would work, and there wasn’t much (if any) formal guarantee language.

  I Like Mid Banks, I Cannot Lie

  I also like big banks and small banks and am more scared of admitting that than I am of singing the original lyrics from this song – so yes, I’ve dragged myself to this hill and am going to stand my ground on it!

  I did not have bank failure Sundays on my 2023 bingo card (but it does bring back memories)!

  Tyler Durden
  Sun, 03/12/2023 – 16:15