• Le Pen Warns Macron "Danger Of Civil War" Looms If He Doesn't Handle Islamist Problem
  Le Pen Warns Macron “Danger Of Civil War” Looms If He Doesn’t Handle Islamist Problem

  The French government and much of the public has reacted with outrage after another open letter issued by military personnel has warned that France is headed for “civil war” if it doesn’t handle its Muslim extremism problem.

  The controversy was further stoked when Marine Le Pen – commonly dubbed by mainstream media as France’s outspoken “leader of the far-right” – once again showed support for the letter by agreeing on the “danger of a civil war” in an apparent rallying of her base around the message ahead of next April’s election where they’ll seek to take on President Emmanuel Macron. Clearly a significant bulk of officer and enlisted military members agree with her stark assessment.

  

  Bloomberg noted that “While Le Pen has consistently spoken out about tightening migration and the need to be tougher on Islamism, her recent comments are perhaps the most controversial to date.”

  The Macron government condemned the second letter issued Sunday as “crude” – which unlike the first letter written by 20 retired generals and which included signatories by some 1,000 currently serving soldiers – had anonymous authorship: 

  The letter, posted on the website of the rightwing Valeurs Actuelles magazine late Sunday, echoes the one published by the same publication last month but appears to have been written by an unknown number of younger troops still in active service.

  Far-right leader Marine Le Pen said France was in danger of a civil war as it prepared to tackle President Emmanuel Macron in next April’s election.

  At least 200,000 people had signed the letter by the time Le Pen commented on it. In particular Le Pen while at a campaign event on Monday had promoted the new letter as a “clear” assessment of the country’s inability to combat the growing tide of Islamism. 

  “There is always the danger of civil war,” she had said, which her opponents were quick to dimiss, and are calling out the statements as far-fetched and outrageous.

  Among more controversial highlights of the letter include the line: “If a civil war breaks out, the military will maintain order on its soil because it will be asked to do so,” it said while addressing Macron, according to Bloomberg. It said the active duty signatories have long been “fighting Islamism, to which you are making concessions on our soil.”

  Read a translation of the full letter below…

  Active duty French soldiers wrote a second letter warning their leaders about civil war in France. You can find my translation and analysis here. https://t.co/5Qhg4Q7clt

  — Alister Riviere (@RiviereAlister) May 10, 2021

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

  “If nothing is undertaken, laxity will continue to spread inexorably in society, causing, in the end, an explosion and the intervention of our comrades in action in a perilous mission of protecting our civilisational values and safeguarding our compatriots in the national territory,” the letter said.

  “There is no more time for procrastination, otherwise tomorrow the civil war will put an end to this growing chaos, and the dead, for which you will bear responsibility, will number in the thousands.”

  It also calls out French leaders’ “hatred” of the country’s own history (a reference to the ongoing debate over French colonialism) while at the same time making accommodating statements on Islamic extremism.

  And all of this comes after the shocking street beheading of 47-year old teacher Samuel Paty, who Muslim students and parents had accused of showing derogatory cartoons of Islam’s founder Muhammad to his students. France and other European countries have since been rocked by similar Islamist shootings and attacks, including against Jewish neighborhoods.

  Tyler Durden
  Wed, 05/12/2021 – 02:45

• UK Plans To Require Voter ID To Ensure Election Integrity
  UK Plans To Require Voter ID To Ensure Election Integrity

  Authored by Alexander Zhang via The Epoch Times,

  The UK government plans to introduce requirements for voters to show photographic ID when casting ballots, in order to ensure the integrity of elections.

  

  The Electoral Integrity Bill, which requires voters to show identification before being issued with a ballot paper in a polling station, is part of the Conservative government’s legislative agenda set out in the Queen’s Speech on Tuesday.

  “We think showing identification to vote is a reasonable approach to combat the inexcusable potential for voter fraud,” Prime Minister Boris Johnson’s official spokesman said.

  “Everyone wants to maintain the integrity of our democracy and this would bring us in line with not only Northern Ireland but countries such as Canada, many European countries including France, the Netherlands, Sweden—all require a form of identification to vote,” the spokesman said.

  The main opposition Labour party accused the government of trying to make it harder for people to vote.

  Shadow Justice Secretary David Lammy said on Twitter that the government is prioritising “voter suppression” and “disenfranchising millions through Voter ID.”

  Lisa Nandy, Labour’s shadow foreign secretary, told Sky News that the government should defend the UK’s democracy by taking action against Russian interference.

  Asked if Labour would support plans to require voter IDs, she said: “We have got to defend our democracy robustly but I just think it’s really bizarre coming from this government that they have made it so much more difficult for people in this country to vote over recent years, but they have taken absolutely no action to defend our democracy from attacks overseas.”

  The Electoral Integrity Bill has also come under attack from U.S. civil rights groups.

  According to The Guardian, The American Civil Liberties Union (ACLU), Southern Poverty Law Center (SPLC), and Common Cause said the requirement for voter ID “amount to Republican-style voter suppression and are likely to erode faith in the democratic process.”

  Voters casting their vote in polling stations in Great Britain currently do not need to present any form of identification before receiving a ballot paper, but identification has been a requirement in Northern Ireland, also part of the UK, for nearly 40 years.

  Voter ID requirements were introduced in Northern Ireland after the 1983 General Elections following concerns about the extent of voter fraud in the British province. Since 2003 photographic ID has been required.

  According to a briefing paper for the House of Commons, “There has been no evidence that the ID requirements in Northern Ireland have affected turnout.”

  Since 2014 the Electoral Commission has recommended that photo ID should be required in the rest of the UK.

  The Commission recommends that any system of voter ID introduced in Great Britain should mirror that in Northern Ireland, where voters without access to approved photo ID can apply for a free photographic electoral ID card from their local council.

  Tyler Durden
  Wed, 05/12/2021 – 02:00

• How 'Woke' May Be Leading Us To Civil War
  How ‘Woke’ May Be Leading Us To Civil War

  Authored by Roger Simon via The Epoch Times,

  The other day, I wrote that “woke” was the new conformism.

  It is, of course, but I undersold it. It’s much more than that and more dangerous.

  As Tal Bachman notes at Steynonline, it’s now our state religion, a state religion in a country that – constitutionally and for good reason – isn’t supposed to have one.

  But “Wokism” is yet more than that, too. It’s a mass psychosis similar to many that have arisen throughout history when the masses followed leaders who, in their zeal or self-interest, took them to disastrous ends.

  A good example was when the Dominican friar Girolamo Savonarola – in a 1497 version of “cancel culture” – swept up everything secular in Florence from some of the most extraordinary paintings and sculpture of all time to the works of Boccaccio and burned them in the so-called Bonfire of the Vanities.

  

  Being Jewish, I am also reminded of the bizarre tale of Sabbatai Zevi, the 17th-century Sephardic rabbi who proclaimed himself the long-awaited true messiah of the Jews, garnered thousands of followers, and then ended up leaving them completely in the lurch when he converted to Islam. (Interestingly, Bachman writes that “wokism” resembles Islam structurally.)

  Closer to our time, the great Italian director Federico Fellini, in his film “La Dolce Vita” (1960), shows us what seems like hundreds of people rushing about, tears streaming, trampling each other, believing reports that the Madonna has been sighted. As the scene progresses, the crowd grows, with more and more people convinced of the sighting.

  Of course, what Fellini documents is more or less harmless—not so “woke.” This psychosis has a political dimension and the capability of changing a society, which it has already done.

  Face Excommunication

  “Woke” gains adherents much in the manner of “est”—the cult-like Erhard Seminars Training—that I attended in the 1970s at the behest of a movie producer interested in making a film about it. (It never happened.)

  If you’re too in, you’re out.

  For est, several hundred people sat in a large conference room listening to the “training” for hours under instructions not to get up, even to go to the bathroom, until they raised their hands signaling they “got it” (i.e., effectively joined the cult). Nature’s calling being what it is, most eventually did.

  Although operationally similar, “woke” is exponentially more perilous than the now-defunct est training. Our position in society, our livelihoods, and our children’s educations and futures are being held over our heads, not our mere use of a restroom.

  An iron-fisted, ideologically extreme minority has our country under its thumb—play along or face ex-communication. This is stronger than anything in our history and almost identical to what we see and have seen in totalitarian countries.

  

  It’s a psychosis approaching mass hallucination.

  In Franco’s Spain, they shouted, “Viva la muerte!” (“Long live death!”) Here we are asked to proclaim just as loudly “Black Lives Matter,” to display signs saying as much on our lawns, although we never thought otherwise and always thought (naively, we are told) that all lives mattered.

  All key aspects, most parts of them anyway, of our society “get it” as they did in est (i.e., now believe in ”woke”) or, yet more ominously, cynically say they do—the media, the corporations (“Better woke than broke!”), the government bureaucracy, the Democratic Party, the Department of Justice, the FBI, the military (yikes!), entertainment, the university system, the K–12 system, the medical community, the scientific community (incredibly), the religious community (sadly), and on and on.

  All, to one extent or another, believe in “woke” except—the people.

  Most of the people anyway.

  Most of what used to be called the common men (or women) in the street roll their eyes at “woke”—including even some silent, but browbeaten, Democrats—and do their best to move on, although many realize that “woke” and its sister “social justice” are in essence euphemisms for an ideology far more totalitarian than any ever in control of this country, communism.

  Rebellion Brewing

  How long can this gaping dichotomy continue?

  How long before they stop rolling their eyes?

  A rebellion against “woke” is brewing, particularly in red states, some of which are banning or have already banned critical race theory in their schools, among other pushbacks. (Kudos to Rep. Mark Green, Republican of Tennessee and Iraq War veteran, for introducing legislation to block critical race theory training at U.S. military academies.)

  But will that be enough against a federal government that lives and breathes this evil ideology and that is essentially governed by a homegrown politburo—the thought that Biden acts by himself is ludicrous—determined to impose it?

  As this imposition increases, the “contradictions,” as the Marxists would say, are heightened.

  What the extremist ideology of “woke” actually provokes is talk of—and not just talk—secession and even civil war.

  Few of us have heard anything like that in our lifetimes. But now it’s real. We have been driven apart as never before. We have been awakened indeed.

  Anything can happen and some of us, who would never have considered anything like secession and civil war, suddenly do—highly disturbing to us as those thoughts may be.

  So why do we even tolerate “woke”?

  Bachman gives us a quotation from Austrian philosopher Karl Popper that is remarkably apposite for our times:

  “Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them.”

  From Antifa to BLM (whose leader apparently identifies with the mass murderer Chairman Mao) to the willfully blind talking heads of left-wing cable TV, no one is as intolerant as the ”woke” folks. They break all domestic records in that regard.

  Time to stop tolerating them.

  Tyler Durden
  Tue, 05/11/2021 – 23:25

• China Calls UN Planned Event On Xinjiang "Total Blasphemy"
  China Calls UN Planned Event On Xinjiang “Total Blasphemy”

  China is angrily boycotting and urging the banning of a planned United Nations event because it will highlight human rights and China’s treatment of Uyghur Muslims in Xinjiang.

  The event will be held virtually on Wednesday, and is sponsored by the United States, Germany, and Britain. China’s foreign ministry spokeswoman Hua Chunying issued a hugely provocative statement Monday, saying “This is total blasphemy against the United Nations.”

  

  “The US has banded up with several countries, abused the United Nations’ resources and platform, and smeared and attacked China to serve it’s own interests,” she said at a daily briefing Monday. She urged UN member nations to not attend the virtual event which she further said is an insult to the institution.

  China’s UN mission issued a simultaneous rejection of the planned UN meeting, “We trust the member states will see through this political scheme… and choose to reject it,” it said. “The US and other co-sponsors are obsessed with fabricating lies and plotting to use Xinjiang-related issues to contain China and create mess in China.”

  Beijing has long sought to combat an avalanche of Western media stories highlighting the network of labor and communist-run ‘reeducation’ centers for China’s minority Muslim population. Chinese officials have defended what they tend to call “vocational centers” which are “necessary” to combat Islamic extremism.

  It should be remembered that China has for years boasted of its outsized monetary contributions to the United Nations, particularly with regard to its peacekeeping mission, and also being a major contributor of troops.

  

  Currently, China is the second-largest funder of the UN’s peacekeeping mission at 15% of the total budge, behind the United States (at 27%).

  Like with its influential role within the World Health Organization (WHO), Beijing probably expects more quid pro quo type acknowledgement when it comes to the issues the UN highlights.

  Tyler Durden
  Tue, 05/11/2021 – 23:05

• Bovard: Biden's "America The Beautiful" Vision Ignores Feds' Dreadful Record
  Bovard: Biden’s “America The Beautiful” Vision Ignores Feds’ Dreadful Record

  Authored by James Bovard via The American Institute for Economic Research,

  Will Biden’s “America the Beautiful” program save America’s environment? On January 27, President Joe Biden issued an executive order proclaiming “the goal of conserving at least 30 percent of our lands and waters by 2030.”

  That target would require almost tripling the amount of land under government restrictions – an area twice the size of the state of Texas. Last week, the Biden administration released a 22-page “America the Beautiful” vision statement short on details but overflowing with bromides including the following gem: “The road to a full recovery remains steep, but President Biden is determined to lead America to new heights.” 

  

  Biden has not yet specified which provision of the Constitution entitles the president to proclaim national land use goals. Regardless, he is reaping applause for pledging to fight climate change, protect biodiversity, expand parkland, and other courageous positions. Biden is launching the initiative regardless of the feds’ own dreadful environmental record. As law professor Jonathan Turley observed, “the government remains the nation’s premiere environmental felon.” 

  But everything will be different under Biden, right? His plan was jointly developed by the Commerce, Interior, and Agriculture Departments. Gina McCarthy, Biden’s senior climate change advisor, proclaimed, “This is the very first national conservation goal we have ever set as a country.”

  However, much of the plan resembles what the U.S. Department of Agriculture (USDA) has claimed to be achieving for almost a century. 

  Federal agricultural policy offers stark lessons on the folly of trusting politicians with the environment. Since Franklin Roosevelt’s New Deal, farm policymakers have routinely portrayed the private sector as inherently destructive to the environment. Secretary of Agriculture Henry Wallace declared in 1934: “Probably the most damaging indictment that can be made of the capitalistic system is the way in which its emphasis on unfettered individualism results in exploitation of natural resources.” 

  But federal policy has been devoted to perpetually inflating crop prices regardless of damage to the environment or the economy. In 1936, the Supreme Court struck down the Agricultural Adjustment Act (AAA), which boosted crop prices by paying farmers to idle land, as unconstitutional. A few weeks after the Supreme Court ruling, Congress enacted the Soil Conservation and Domestic Allotment Act to pay farmers for reducing their acreage of “soil-depleting” crops – which by amazing coincidence turned out to be the same crops government planners sought to restrict. Paying farmers purportedly to conserve soil was much more politically defensible than paying farmers not to work. 

  Politicians continued to set price supports far above market levels, causing crop surpluses that the government struggled to hide, dump, or suppress. In 1956, the Eisenhower administration launched the Soil Bank to pay for long-term acreage reduction. The program quickly flopped; Time magazine commented that it had “once more proved that, barring police-state controls, farmers will always outsmart bureaucrats.” The Soil Bank was abolished in 1965.

  In the 1970s and early 1980s, the USDA earned the nickname, “Uncle Sam, Super Sodbuster.” Between 1977 and 1982, almost 4 million acres of relatively low-quality land were plowed up. Many of the newly plowed acres were born-again cropland that the USDA paid farmers to retire into grassland in the 1940s in response to the Dust Bowl. USDA Secretary John Block complained in 1984 that federal farm programs “encouraged farmers to tear up the cover crop on erodible soil ahead of schedule to provide a crop history” to collect subsidies. Deputy Assistant Secretary Richard Siegel observed that “there is a direct connection between the degradation of the fragile soil and the wheat price supports.” 

  Rather than fixing the problem by ending subsidies that rewarded farmers for plowing up fragile land, Congress instead created a new subsidy program to pay farmers not to plant. The Conservation Reserve Program, launched in 1985, paid farmers to idle tens of millions of acres of farmland for ten years. The CRP often paid double or triple the prevailing local rental rate to reward farmers for shutting down their farms. In Missouri, the CRP disrupted land values so badly that rocky, craggy ground became worth more than good farmland. Though farmland mortgages are routinely stretched out over 30 years, USDA’s ten annual CRP rental payments exceeded the total value of the land for over half of all CRP land. The CRP became an early retirement program for many farmers, allowing them to shut down their businesses and move to Florida. Most of the land enrolled in the CRP could have been farmed with little or no environmental harm.

  The CRP ravaged the economies in much of rural America. Sen. Kent Conrad (D-ND) complained that the CRP has “absolutely wiped out small town after small town as we took land out of production.” A 1995 University of Minnesota study concluded that USDA acreage-idling programs such as the CRP had directly reduced rural population by one-third since 1950. The CRP hurt aspiring young farmers in many areas by creating a comparative shortage of farmland and artificially inflating rent.

  The Clinton administration believed the solution to CRP’s problems was to vastly expand the program. In 1997, the USDA announced that most of the cropland in the United States was in such bad shape that the government would consider paying to shut it down. Secretary of Agriculture Dan Glickman bragged, “This is the most profound conservation program in the history of the United States of America.” The Associated Press inadvertently captured the new policy’s irony: “Up to 240 million acres, two-thirds of the nation’s farmland, will be eligible for the Conservation Reserve Program under the new rules, which are intended to target the most environmentally sensitive land.” How much targeting occurred if most of the cropland in the country was eligible? But that was typical of how farm programs were designed to maximize the number of handout recipients. Kendell Keith, president of the National Grain and Feed Association, said that the USDA “grossly exaggerated” the number of highly erodible acres it enrolled in the CRP and blamed the program for “the 15 percent decline in U.S. wheat export market share.”

  Any marginal environmental benefit the CRP conveyed was swamped by the perverse incentives of other federal policies. A 2007 Government Accountability Office report found that tens of millions of acres of fragile grasslands had been converted to cropland in the prior decades thanks to lavish crop subsidies. GAO concluded, “Farm program payments provide significant incentive to convert grassland to cropland because they increased the expected profitability of farming while lowering the associated risks.” Many farmers sodbusted poor-quality grasslands solely to qualify for federal disaster or crop insurance payments when their crops failed. Some farmers plowed worthless land, seeded from an airplane, and collected government payments when the crop inevitably failed.

  Politicians’ pious prattle about conserving fragile grasslands was irrelevant compared to the impact of federal ethanol mandates, which sent corn prices through the roof. Farmers planted 14 million more acres of corn in 2007 than in 2006. By 2016, almost half the corn crop was devoted to ethanol – which remained politically popular even though it boosts smog, damages gasoline engines, and sows starvation in poor nations by driving up food prices. 

  As part of the “America the Beautiful” campaign, the Biden administration is expanding the Conservation Reserve Program. USDA Secretary Tom Vilsack declared, “With CRP, the United States has one of the world’s most successful voluntary conservation programs.” But Vilsack, a former Iowa governor, is one of the biggest ethanol zealots in the land, who portrays it as aggie holy water. The Biden administration is expected to mandate greater use of ethanol in fuel, thereby likely spurring more grassland conversion to cropland regardless of the administration’s rhetorical emissions.  

  Property and Environment Research Center president Brian Yablonski labeled Biden’s “30 by 30” plan as “the president’s eco moonshot.” Many farmers and other rural Americans fear being in the moonshot’s crosshairs. Sen. Roger Marshall (R-KS) said, “this is the No. 1 emotional issue out there… You talk about upsetting people, start messing with their property rights.” Rep. Pete Stauber, (R-MN), warned that “Biden’s 30 by 30 agenda means further extending federal control into our way of life.” 

  Biden’s “30 by 30” program may be another in a long series of command-and-control interventions that presumes the feds must forcibly intervene to prevent landowners from committing economic suicide. But private owners have a much better record of caretaking land than does the U.S. Forest Service, the Bureau of Land Management, or other bureaucratic monoliths. 

  Biden’s “30 by 30” will likely become simply another pork barrel environmental program which deluges their friends and donors with subsidies. But there is no reason to expect “America the Beautiful” to be less of a debacle than FDR’s farm programs, Eisenhower’s Soil Bank, or the Conservation Reserve Program. If political hot air was all that was required to achieve “America the Beautiful,” the United States would have become paradise long ago.

  Tyler Durden
  Tue, 05/11/2021 – 22:45

• (Do Not) Let The Games Begin!
  (Do Not) Let The Games Begin!

  Could Japan still cancel the Tokyo Olympics over COVID?

  

  As Statista’s Felix Richter notes, recent comments from Prime Minister Yoshihide Suga have driven speculation that the Summer Games could be called off. As COVID-19 infections rise in Japan, public support for the Games continues to drop.

  Just around 70 days ahead of the Games’ opening date, a poll conducted by TBS News found that 65 percent of Japanese wanted the Games cancelled or postponed again, with 37 percent voting to scrap the event altogether and 28 percent calling for another delay.

  Japan has extended the state of emergency in Tokyo and three other areas until the end of May and is struggling to contain a surge of COVID-19 cases, raising questions about whether the Games should go ahead. Japan’s vaccination rate is also the lowest among wealthy nations.

  The Olympic Games, which were already delayed by a year due to the pandemic, are set to open on July 23, with the International Olympic Committee (IOC) and organisers insisting that measures will be put in place to ensure the safety of athletes and visitors.

  As the following chart shows, the Summer Olympics have only been cancelled three times in the modern era dating back to 1896.

  

  You will find more infographics at Statista

  The 1916 games in Berlin fell victim to World War I and the 1940 and 1944 games, scheduled to be held in Helsinki and London, respectively, were cancelled due to World War II. Interestingly, the 2016 Rio games were also clouded by a health crisis, as many athletes refused to participate due to the ongoing outbreak of the Zika virus.

  Tyler Durden
  Tue, 05/11/2021 – 22:25

• Penn State Administrator Who Failed To Report Sandusky Sex Crimes With Minors Received $330,699 Public Pension
  Penn State Administrator Who Failed To Report Sandusky Sex Crimes With Minors Received $330,699 Public Pension

  By Adam Andzejewski of OpenTheBooks.com, submitted by RealClearPolicy.com,

  In 2001, Gary Schultz was Penn State’s senior vice president for finance and business when he was told that assistant football coach Jerry Sandusky had sexually assaulted a boy in the school’s locker room shower.

  But neither he nor any other Penn State administrators who were told about the incident reported it to law enforcement, childcare, or youth services.

  

  Schultz was charged with perjury and failing to report to authorities allegations of sexual contact with a minor. However, he retired from Penn State and collected a $330,699 annual pension.

  He plead guilty to endangering the welfare of children in March 2017, was sent to jail and released in September 2017.

  Schultz was given a six-to-23-month sentence, with only the first two months in jail and the remainder on house arrest, followed by probation.

  While Pennsylvania has a pension forfeiture law that strips pensions from public employees convicted of job-related crimes, Schultz’s crime fell between the cracks, allowing him to continue collecting his $330,669 yearly pension.

  Sandusky is serving a 30-60-year prison sentence after his conviction on 45 counts of sexually abusing young boys from 1994 to 2009 through the charity he founded, The Second Mile, to serve Pennsylvania’s underprivileged and at-risk youth.

  Sandusky “retired” and received a $58,600 public pension – that continues to this day.

  Tyler Durden
  Tue, 05/11/2021 – 22:05

• Goldman Scrambles To Comfort Its Clients Who Are Freaking Out About China's Soaring Prices
  Goldman Scrambles To Comfort Its Clients Who Are Freaking Out About China’s Soaring Prices

  It’s hardly a secret that commodity and raw material prices in China have been soaring: this was confirmed by last night’s April PPI inflation print which surprised the market to the upside and reached 6.8% Y/Y, the highest since 2017.

  

  The frenzy culminated with Monday’s 10% one-day jump in iron ore prices which, as Goldman’s China strategist Hui Shan wrote this morning, “brought many questions from clients regarding the impact of upstream price increases on the Chinese economy and monetary policy” especially when it comes to the threat risk of tighter monetary policy/rate hike by the PBOC.

  

  So to address these growing concerns that China may be in the early stages of commodity hyperinflation, Goldman addresses these questions below in collaboration with its commodities strategists.

  Q: Is China demand as strong as the commodity prices suggest?

  Based on our reading of both macro data (e.g., PMI and exports) as well as micro data (e.g., steel consumption and air pollution), we think on-the-ground demand remains solid. Our equity analysts’ channel checks confirm stable infrastructure and property activity and resilient auto and appliance production in April. However, it is important to emphasize that China’s role in the commodity market has changed somewhat from previous years in three ways.

  First, we have seen manufacturing outperforming infrastructure and property investment in China, which is also consistent with the fact that prices of flat steel (mostly used in manufacturing) outperform those of long steel (mostly used in construction). And the key source of manufacturing strength is strong external demand, which in turn was driven by economic re-opening after mass vaccination and significant monetary and fiscal support overseas. Therefore, as our commodity strategists have argued, the incremental demand for commodities currently comes from ex-China.

  Second, changes in China supply outlook play an important role. Tightened steel capacity swap rules and the anti-corruption campaign in the coal industry of Inner Mongolia have added supply pressure during a time when demand is strong. China’s commitment to “Carbon Neutral 2060”, which our equity analysts expect to generate profound impacts on upstream industries, further signals to the market that China’s supply of high-emission products such as steel, aluminum and cement is unlikely to respond to higher prices.

  Third, geopolitical tensions introduce risk premium and complicate the picture. The most recent example is the announcement by the National Development and Reform Commission (NDRC) to suspend indefinitely all activities under the China-Australia Strategic Economic Dialogue. Although little details were provided and our ANZ economics team believes tariffs or restrictions on iron ore are very unlikely given China’s heavy reliance on Australian supply, the news may have contributed to the latest market moves given the inbound questions that we received on the headline.

  Bottom line: China demand appears robust in level terms, but we do not think the latest commodity price increases indicate China’s commodity demand is accelerating.

  Q: What near-term responses can we expect from Chinese policymakers?

  Chinese policymakers have taken notice of the sharply rising upstream price inflation. For example, at the Financial Stability and Development Committee meeting chaired by Vice Premier Liu He on April 8, policymakers stated the need to “keep prices stable” and to “closely monitor commodity prices”. On April 9, Premier Li Keqiang hosted a meeting with economists and entrepreneurs where Premier Li called for “strengthening the management of raw materials markets” and “alleviating the cost pressure on businesses”.

  The challenge from a policy perspective is that at the same point Beijing desires lower commodity prices, they are also focused on achieving their de-carbonization targets by restraining metals supply in sectors with significant spare capacity, relative low value, and high carbon footprint (e.g., aluminum and steel in particular). Policy induced constraints on both current and forward supply act as tightening effects on underlying balances and support price. Moreover, in an environment of both strong domestic and external demand as is currently the case, such supply cuts provide even greater price effect. Until there is a material deceleration in demand conditions to moderate current tightness across the majority of industrial commodities, the ability to sustainably restrain price dynamics is limited.

  In regard to actual policy tools to alleviate the pain on downstream manufacturers, so far there have been a few channels of attempted influence by Chinese policymakers. The first is to reduce other types of costs faced by businesses. We think recent announcements on cutting taxes and fees fall into this category. Second, policymakers can encourage imports and discourage exports to help meet domestic demand. For example, the Ministry of Finance has removed the export tax rebate on 146 steel products effective May 1. Third, the government can deploy strategic reserves of commodities. And lastly, regulators have urged commodities futures exchanges to curb speculative activities.

  Bottom line: Although some measures are available to policymakers to temporarily alleviate pressures, the fundamental supply and demand tightness is more difficult to address.

  Q: What is the impact of higher upstream prices on China growth and inflation?

  Rising prices are the mechanism through which the market finds a new equilibrium by destroying demand and/or incentivizing supply. The degree to which each of the two margins of adjustment happens depends on supply and demand elasticities. So far there has been little evidence of end-demand destruction at current price levels in the available China macro and micro data. However, one trend which has emerged from late Q1 onward is a phase of downstream metal destocking. This has been best demonstrated by the negative metals apparent demand growth rates in April after strong year-over-year growth in Q1. We believe this reflects essentially a temporary buyer strike, where downstream consumers destock inventory until they have to return to market given end-demand requirements. This trend could temporarily soften metal physical markets, although raw material stock levels suggest this should abate into Q3.

  The potential for supply-side responses are limited by Beijing’s de-carbonization policy emphasis. In the short run, whilst there exists some spare capacity flex in the system, a combination of weak processing margins (e.g., copper, zinc) or policy constraints at a provincial level (e.g., aluminum smelting in Inner Mongolia and steel mills in Tangshan) offer headwinds to any output acceleration. At the margin we do expect some improvement in secondary based metals production from scrap, though the volumes will be limited in aggregate. The risk of net supply capacity additions from here is low particularly in the aluminum and steel (blast furnace) sectors. A hard cap on aluminum capacity will be hit this year after which only swaps will be allowed. For steel, a recent tightening in blast furnace capacity swap rules (1.5:1 old for new swap ratio) limits any expansion potential beyond shifts to electric arc furnace (EAF).

  While higher inputs costs are impacting gross margins in some industries including auto, historical experience suggests that downstream profits at the aggregate level do not suffer greatly when upstream prices increase, likely due to the relatively small raw material share of total costs and producers’ ability to improve efficiency and/or pass some of the higher costs onto end-consumers. That said, the COVID shock is like no other, and we may see significant demand destruction if prices move higher for longer, particularly when supply has become much less responsive to price signals than before because of longer-term trends such as de-carbonization.

  In previous research, we have found that PPI inflation only affects non-food goods in CPI and the pass-through is far from complete. Given the softening food price inflation on pork cycle and the muted service inflation on both economic slack and government policies aimed at reducing housing and medical costs faced by consumers, we think CPI inflation is likely to remain subdued even as PPI inflation reaches a multi-year-high.

  Bottom line: The impact of higher commodity prices and upstream producer prices on Chinese growth and CPI inflation looks limited thus far.

  Q: Will the upstream price inflation cause the PBOC to tighten monetary policy?

  In the Q4 PBOC Monetary Policy Report, the central bank characterized the high PPI inflation and low CPI inflation as driven by “temporary factors”. The Q1 PBOC survey of urban depositors showed inflation expectations remained subdued among consumers. In April, Monetary Policy Committee (MPC) member Wang Yiming discussed the rebound in oil and metals prices and highlighted the need to “avoid strengthening inflation expectations.” Overall, the central bank appears to be paying closer attention to upstream price pressures and inflation expectations over the past few months.

  On the other hand, interbank liquidity has been kept ample and 7-day repo rate has stayed below the policy rate of 2.2%, suggesting little signs of policy tightening on the back of sharply rising upstream prices. The lack of response from the central bank makes economic sense because the root cause of the latest commodity price rally is not China demand. As discussed earlier, stronger ex-China demand and supply concerns have played a bigger role in driving the market higher. If this diagnosis is indeed correct, then tightening monetary policy in China would not be an effective solution. If anything, the demand destruction impact of higher input costs may argue for accommodative monetary policy to offset the overall burdens on businesses as long as inflation expectations remain anchored.

  Bottom line: We do not expect the PBOC to tighten monetary policy on higher upstream prices.

  Tyler Durden
  Tue, 05/11/2021 – 21:45

• The American Cyber Stasi Will Suppress All Digital Dissent In Biden's Dystopia
  The American Cyber Stasi Will Suppress All Digital Dissent In Biden’s Dystopia

  Authored by Andrew Korybko via OneWorld.press,

  CNN’s recent report that the US’ security services are considering contracting the services of so-called “researchers” as a legal workaround for spying on average Americans confirms that Biden’s dystopian hellhole is rapidly moving in the direction of establishing a “Cyber Stasi” for suppressing all digital dissent against the Democrats as they continuing consolidating their de facto one-party rule of the country.

  

  The dystopian hellhole that I predicted would become a fait accompli following Biden’s confirmation as President by the Electoral College is quickly becoming a reality after CNN’s recent report that the US’ security services are considering contracting the services of so-called “researchers” as a legal workaround for spying on average Americans. According to the outlet, these ostensibly independent contractors would be charged with infiltrating the social media circles of white supremacists and other supposedly terrorist-inclined domestic forces within the country. The report claims that the intent is to “help provide a broad picture of who was perpetuating the ‘narratives’ of concern”, after which “the FBI could theoretically use that pool of information to focus on specific individuals if there is enough evidence of a potential crime to legally do so”.

  In other words, the US’ security services essentially want to establish a “Cyber Stasi” of “fellow” citizens who spy on one another and produce purported “evidence” of “potential crimes” for “justifying” the FBI’s “legal” investigations. CNN quoted an unnamed senior intelligence official who asked, “What do you do about ideology that’s leading to violence? Do you have to wait until it leads to violence?”, thereby hinting that this initiative might likely be exploited to stop so-called “pre-crime”, or crimes before they occur. Put another way, even those average Americans who practice their constitutionally enshrined right to the freedom of speech to peacefully dissent against the Democrats’ consolidation of their de facto one-party rule of the country might find themselves targeted by the security services depending on how the contracted “researchers” spin their words.

  It should be remembered that even Americans’ constitutionally enshrined right to the freedom of assembly is nowadays under scrutiny depending on the stated reason behind their planned peaceful protests if they dare to propose gathering in opposition to last year’s alleged voter fraud for example. The events of 6 January were exploited as a game-changer by the security services in order to restrict Americans’ freedoms. It’s neither here nor there whether one sincerely believes that the election was stolen since the purpose in pointing these double standards out is to prove that average Americans are being politically discriminated against with the implied threat of legal intimidation when it comes to exercising their constitutional rights about “politically incorrect” issues of concern to them.

  Although the reported purpose of the “Cyber Stasi” is to preemptively thwart emerging domestic terrorist plots, it can’t be discounted that the combination of political Russophobia and “mission creep” will combine to create additional objectives such as stopping the spread of so-called “Russian disinformation” throughout society. That phrase is actually just a euphemism for “politically incorrect” facts and interpretations thereof that contradict the Democrats’ official narrative of events, being intentionally vague enough to function as an umbrella under which to cover practically every alternative understanding possible. With this in mind, those average Americans who dare to share something “politically incorrect” – even in private chats amidst the presence of “deep state” infiltrators (“researchers” employed as “Cyber Stasi”) – might be targeted by the FBI.

  The end effect is that the US’ security services might succeed in suppressing most expressions of digital dissent in the coming future. They’re inspired to do so by the ruling administration which wants to impose a syncretic system of economic leftism and social fascism onto the country. It’s not “communist” in the sense that the economic vision is more akin to state capitalism than traditional Marxism, but the social impact will certainly mirror that of East Germany during its darkest days of Stasi rule, though that’s precisely why many critics casually describe it as “communist” despite that not being economically correct (at least not yet). The US’ “researcher”-contracted “Cyber Stasi” will have a chilling effect how Americans interact with one another from here on out, all in order for Biden’s dystopian hellhole to avoid the fate of its predecessor, East Germany.

  Tyler Durden
  Tue, 05/11/2021 – 21:25

• China Sees Slowest Population Growth In Decades Raising Concerns About Aging Labor Force
  China Sees Slowest Population Growth In Decades Raising Concerns About Aging Labor Force

  A few weeks ago, we reported that China, the world’s largest country, reported a shrinking population for the first time in 70+ years, a sign that the global economy might struggle with long-term structural deflation as the population across the developed world shrinks.

  But according to the latest census data released Tuesday by China’s National Bureau of Statistics, China reported only 12 million births last year, the lowest annual reading since 1961, and down 18% from 2019.

  

  Looking back at the last 10 years, China’s population increased by just 72 million people (between 2010 and 2020) bringing the country’s total population to 1.41 billion. That breaks down to an average annual growth rate of just 0.53%, slower than the 0.57% seen in 2010, according to the FT.

  

  You will find more infographics at Statista

  As analysts studied the data,  Nikkei reported that the declining population growth reflects China’s “failure of policies designed to reverse China’s falling birth rate. The rate of increase is the lowest since China first conducted a census in 1953. The fastest growth was the 2.09% recorded in the 1982 census.”

  

  You will find more infographics at Statista

  Unsurprisingly, the declining birth rate shows that China’s average age has increased substantially, posing a demographic crisis similar to what’s being experienced in Japan. People over the age of 65 now make up 13.5% of the population, compared with 8.9% back in 2010, when the previous census data was published. Meanwhile, the working-age population of people aged between 15 and 59 declined to 63.35% from 70.14%.

  Ning Jizhe, the director of the NBS, told the FT that China’s democratic crisis actually doesn’t seem so bad when compared with the US, which has an average age of 38.8 years, compared with China’s 38 years. Still, “the further ageing of the population imposed continued pressure on the long-term balanced development of the population in the coming period.”

  

  Source: Nikkei

  But Ning noted that an aging population will likely be a salient feature of China’s demographic trends for years

  “The proportion of the elderly population is rising fast, and aging will become the basic characteristic of our country in the future,” said Ning.

  Even after Beijing scrapped its controversial one-child policy in favor of a “two child policy” a few years back, China’s fertility rate – which measures how many children the average female will have in her lifetime – is still a paltry 1.3, below the ~2+ level needed for population replacement.

  But falling birth rates weren’t the only problem plaguing China’s cities. Another issue seen in more than a dozen cities, especially in China’s north-eastern provinces, is that an exodus of younger workers seeking opportunities in more “economically vibrant” regions (or perhaps even abroad) is adding further pressure in local labor markets.

  Looking back, China’s population added 5.8% in the decade to 2010 and grew by double-digit percentage amounts between each of the previous censuses, which were held in 1953, 1964, 1982, 1990 and 2000.

  

  Source: Nikkei

  Such a shift will have a major impact on what economists call “the dependency ratio”, which refers to the burden shouldered by workers for caring for children and the elderly.

  Goldman analysts broke it down in a chart.

  

  Source: Goldman Sachs

  To be sure, while China’s population growth is slowing, it’s still in a better position than other developed Asian economies like Japan and South Korea.

  Tyler Durden
  Tue, 05/11/2021 – 21:05

• Japanese Investors Panic After Stocks Tumble And BOJ Does Not Buy ETFs
  Japanese Investors Panic After Stocks Tumble And BOJ Does Not Buy ETFs

  Something took place on Tuesday that has happened just once since 2016: Japan’s Topix index (which is widely viewed as more representative of Japanese equities than the Nikkei) tumbled by 2% in the morning session…. and the BOJ did not intervene.

  Why is this notable? Because – in a world where everyone is now completely used to Plunge Protection Teams and central bank bailouts as if it is a perfectly expected event –  this was only the second time since at least 2016 that the Bank of Japan did not make an ETF purchase after the Topix fell more than 1% in the morning session. The only other time? April 21, when the Topix also tumbled 2% in the morning session and the BOJ was nowhere to be seen.

  

  To be sure, the BOJ’s lack of intervention was to be expected: as a reminder, the central bank tweaked its ETF purchase program at the March meeting, with changes that came into effect in April. As part of its policy review, the BOJ on March 19 said it would buy ETFs as needed, scrapping the previously 6T yen annual target, but keeping its 12T yen upper limit on purchases

  Until last month, the largest drop the BOJ would tolerate without buying ETFs was the 0.89% full-day decline on Feb. 24; In other words, any time the Topix would drop by 1% or more, the BOJ would step in or else there would be a market crash. Furthermore, before this year, the BOJ typically bought if the Topix fell more than 0.5% in the morning session.

  This changed on April 20, when the Topix tumbled more than 2% in the morning session and contrary to trader expectations that they would get bailed out, the BOJ did not intervene, and led to a panicked stock dump in the morning of April 21, at which point the BOJ had no choice – it had to buy ot else it would suffer a far worse crash. And buy it did, purchasing 70.1b yen on April 21, the day after it so miserly withheld its bailout of Mrs Watanabe.

  

  As Bloomberg notes, “today’s lack of action by the central bank may further fuel speculation that the bank will only step in if the drop in the AM session exceeds 2%; previously the bank had bought after a 0.5% decline.”

  So keep a close eye on Japanese stocks, where frentic investors will likely test the BOJ’s resolve again by dumping stocks if only to test the new level of the “Kuroda Put.” And woe to Japan if there is a second 2% – or bigger – drop in a row in the Topix and still no BOJ bailout.

  Tyler Durden
  Tue, 05/11/2021 – 20:45

• World's Most Vaccinated Nation Sees Active COVID Cases Double In Under A Week
  World’s Most Vaccinated Nation Sees Active COVID Cases Double In Under A Week

  The situation in the Seychelles, an island nation that has suffered from a recent surge in COVID-19 cases despite boasting the world’s highest vaccination rate, is going from bad to worse.

  Since we last reported on the Seychelles one week ago, the island nation has faced a fresh surge in COVID cases.

  

  The vaccine failure cannot be determined without a detailed assessment, said the WHO. The hike in coronavirus cases has stoked concerns that the jabs might not be helping to suppress the island nation’s COVID-19 outbreak. A vaccine failure can’t be determined without a detailed study by the WHO, however.

  Presently, the health body is in direct communication with Seychelles and working on evaluating the situation, said Kate O’Brien, director of the WHO’s department of immunization, vaccines and biologicals at a briefing on May 10.

  The Indian Ocean archipelago nation started vaccinations in January when it introduced the Chinese-developed Sinopharm vaccine. It administered Chinese vaccine shots to 57% of those who were fully inoculated and the rest received vaccines that were made in India.

  Since last week, the number of active coronavirus cases has more than doubled to 2,486 people. Of these, 37 percent of the population have received both the vaccine doses, as per the report.

  Due to the surge in COVID-19 cases, Seychelles re-imposed curbs last week, including closing schools, canceling sports events and banning mingling of households.

  Seychelles’ first two positive cases of COVID-19 were confirmed on March 14, 2020. The two individuals were a couple from Seychelles who had returned from a trip to Italy. Aftre this, the country imposed a nationwide lockdown in which most shops, businesses and schools were closed for 21 days in April. The airport was also closed and ships were prevented from bringing tourists.

  Finally, with the outbreak threatening to scuttle the island nation’s critical upcoming summer tourism season, Seychelles President Wavel Ramkalawan insisted that the island is safe for visiting tourists.

  Still, the fact that so many residents are being reinfected with COVID despite being fully vaxxed is raising questions about the efficacy of the Chinese and Indian-made jabs.

  Tyler Durden
  Tue, 05/11/2021 – 20:25

• Is 'GosFed' Looming At The Eccles Building?
  Is ‘GosFed’ Looming At The Eccles Building?

  Via The American Institute for Economic Research,

  Economist Judy Shelton had a crackerjack column in last week’s Wall Street Journal on the lack of intellectual and policy diversity at the Federal Reserve. She points out that during the entire term of Chairman Jerome Powell and his predecessor, Janet Yellen, not a single dissenting vote was recorded among the governors. It reminds us of the central bank of the Soviet Union.

  

  Is that what we want – GosFed? That’s our jibe, not Ms. Shelton’s. It’s a play on Gosbank, for Gosudarstvenny Bank, the name of the Soviet central bank. It’s not our intention to suggest that our Fed or anyone associated with it is a communist. All the more mystifying, though, is the absence of dissent among GosFed governors, particularly when a new administration is readying vast new spending.

  It “may surprise people to learn,” Ms. Shelton writes, “that not a single dissenting vote was cast by any member of the Fed’s Board of Governors throughout the eight monetary-policy meetings in 2020 and the three meetings held so far this year. The same is true for 2019, 2018, 2017, 2016, 2015 and 2014, covering Mr. Powell’s years as Fed chairman and the entire term of his predecessor, Janet Yellen.”

  “No Fed governor,” Ms. Shelton adds, “cast a dissenting vote from the Fed chair at any monetary policy meeting held throughout that time.” Presidents of regional Fed banks have during this period done some dissenting in the open market committee, but no break by a Fed governor with the chairman has fetched up on our scope in recent years.

  It’s all the more powerful a point if one considers the unprecedented growth of the Fed balance sheet, which is now something like $7.8 trillion. Most of the securities that make up that debt, even if acquired on the open market, are obligations of the government of which the Fed is a part. That, incidentally, is how GosBank worked. Ms. Shelton wrote a warning about that, too, and also in the Wall Street Journal.

  That piece, issued in July 2012, was called “The Soviet Banking System — and Ours.” Ms. Shelton wrote that “[u]nder Soviet accounting practices, the true gap between concurrent revenues generated by the economy and the expenditures needed to sustain the nation was obscured by a phantom ‘plug’ figure that ostensibly reflected the working capital furnished by the Soviet central bank, Gosbank.”

  That is, as she puts it at one point, “The Soviet central bank was making up for the difference between government revenues and government expenditures by creating empty credits to be disbursed by central-planning bureaucrats.”

  When Mikhail Gorbachev acceded to party boss in 1985, Ms. Shelton writes, the budget deficit the central bank was covering was more than 30% of total government expenditures.

  Neither Ms. Shelton, as we read her pieces, nor we are suggesting the American economy is at quite that point or is false in the sense that the Soviet Union’s was. The system of having the Gosbank create money to fund the state, though, didn’t turn out so well. It’s getting harder by the year to see, as well, how the GosFed is going to come out whole in the end as well.

  It’s maddening to see the Fed governors plunge down this road without recorded dissent. We made this point when the Democrats on the Senate Banking Committee were maneuvering to block Ms. Shelton’s nomination to a Fed governorship because she isn’t a “mainstream” economist. So did the Wall Street Journal. As did James Grant, who in 2016 wrote about a call by Democrats for more diversity at the Fed.

  Mr. Grant, in his Interest Rate Observer, noted that what the solons — including, among others, Senators Bernie Sanders and Elizabeth Warren — wanted was diversity in race and gender on the mostly male and white Fed boards. Mr. Grant focused on “the kind of diversity that would leave the monetary establishment constructively rattled” — governors and economists who would question 21st century monetary dogma.

  That question looms today at not only the Fed. We now have, in Janet Yellen, a former chairwoman of the Fed as Treasury Secretary. Dissent is also scant between the Fed and Treasury, as we launch these multi-trillion-dollar commitments. It’s easy to see why the comrades of Gosbank showed so little dissent. Say, or think, the wrong thing in the Soviet Union, and you risked a one-way ticket to Siberia. What in the world is GosFed’s excuse?

  Tyler Durden
  Tue, 05/11/2021 – 20:05

• Wild Tiger On The Loose In Houston Area Belongs To Murder Suspect Out On Bond Since 2017
  Wild Tiger On The Loose In Houston Area Belongs To Murder Suspect Out On Bond Since 2017

  A tiger that was seen roaming loose in a Houston area neighborhood over the weekend has yet to be located – but its owner has been identified and arrested.

  The exotic animal reportedly belongs to a man named Victor Cuevas, who was out of jail on bond on an “unrelated murder charge”, according to local ABC affiliates. “Cuevas is accused of shooting and killing a man in July 2017 and is out on a $125,000 bond,” the report reads.

  Go figure.

  Cuevas “is known to possess several exotic animals”, the report reads. Authorities took Cuevas into custody at his mother’s house on Monday, the same day he was supposed to turn himself in to the Harris County jail. Cuevas evaded police on Sunday and was also charged with felony evading arrest, as a result. 

  Cuevas’ lawyer, Michael Elliot, wasn’t thrilled about his client being apprehended on the same day he was supposedly planning to turn himself in. Elliot said: “Fifteen minutes before he leaves to surrender, (HPD) go and arrest him, and the result is they get to keep him there for 10 days now.”

  

  Paying adage to the famous “I was just holding it for a friend” defense, Elliot also maintains that the tiger doesn’t belong to Cuevas, but rather that he simply “knows the owner”. 

  “There’s a lot of misunderstandings and miscommunications and a lot of things put out there falsely that’s very troubling. First off, The Houston Police Department here. I know they’re trying to do their job. Everyone wants to know about the tiger and their safety. Make no mistake, there’s no crime of having a tiger in the state of Texas,” he said.

  However, ABC reviewed Cuevas’ Instagram and found he was “no stranger” to exotic animals:

  The videos show him playing with a baby bear, feeding it with a bottle, and giving the bear kisses in his home. There are also videos of at least two monkeys. Cuevas is seen taking one monkey with him while he was having dental work done, and taking another monkey to a convenience store, where the clerk was not pleased. In addition, several videos show Cuevas cuddling with a young tiger.

  Police had responded to a call about the tiger on Sunday. HPD Commander Ron Borza said: “The owner put the tiger in a white SUV and drove off from the scene, there was a brief pursuit, and the man got away with the tiger. My main concern right now is focused on finding him, and finding the tiger, because what I don’t want him to do is harm the tiger. We have plenty of places where we can take the tiger and he can spend the rest of his life.”

  Our Animal Cruelty Unit, along with @BARC_Houston are currently investigating the incident in which a tiger was seen at 1103 Ivy Wall Drive about 8 p.m. on Sunday (May 9). The male owner was seen escorting the tiger to the residence then putting it into his vehicle. 1/3

  — Houston Police (@houstonpolice) May 10, 2021

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

  Cuevas’ neighbor, Jose Ramos, said: “I did notice one time, and this is something interesting, that I was walking by my driveway. There was a capuchin monkey that showed up in the window. I figured, ‘OK, this is a small animal. It could be domesticated.’ But I never thought they would hold a tiger in their house.”

  Tyler Durden
  Tue, 05/11/2021 – 19:45

• Professor Explains Flaw In Many Models Used For COVID-19 Lockdown Policies
  Professor Explains Flaw In Many Models Used For COVID-19 Lockdown Policies

  Authored by Andrew Chen via The Epoch Times (emphasis ours),

  Economics professor Doug Allen wanted to know why so many early models used to create COVID-19 lockdown policies turned out to be highly incorrect. What he found was that a great majority were based on false assumptions and “tended to over-estimate the benefits and under-estimate the costs.” He found it troubling that policies such as total lockdowns were based on those models.

  “They were built on a set of assumptions. Those assumptions turned out to be really important, and the models are very sensitive to them, and they turn out to be false,” said Allen, the Burnaby Mountain Professor of Economics at Simon Fraser University, in an interview.

  

  Allen says most of the early cost-benefit studies that he reviewed didn’t try to distinguish between mandated and voluntary changes in people’s behaviour in the face of a pandemic. Rather, they just assumed an exponential growth of cases of infection day after day until herd immunity is reached.

  In a paper he published in April, in which he compiled his findings based on a review of over 80 papers on the effects of lockdowns around the world, Allen concluded that lockdowns may be one of “the greatest peacetime policy failures in Canada’s history.”

  He says many of the studies early in the pandemic assumed that human behaviour changes only as a result of state-mandated intervention, such as the closing of schools and non-essential businesses, mask and social distancing orders, and restrictions on private social gatherings.

  However, they didn’t take into consideration people’s voluntary behavioural changes in response to the virus threat, which have a major impact on evaluating the merits of a lockdown policy.

  “Human beings make choices, and we respond to the environment that we’re in, [but] these early models did not take this into account,” Allen said. “If there’s a virus around, I don’t go to stores often. If I go to a store, I go to a store that doesn’t have me meeting so many people. If I do meet people, I tend to still stand my distance from them. You don’t need lockdowns to induce people to behave that way.”

  Allen’s own cost-benefit analysis is based on the calculation of “life-years saved,” which determines “how many years of lost life will have been caused by the various harms of lockdowns versus how many years of lost life were saved by lockdowns.”

  Based on his lost-life calculation, lockdown measures have caused 282 times more harm than benefit to Canadian society over the long term, or 282 times more life years lost than saved.

  Furthermore, “The limited effectiveness of lockdowns explains why, after one year, the unconditional cumulative deaths per million, and the pattern of daily deaths per million, is not negatively correlated with the stringency of lockdown across countries,” writes Allen. In other words, in his assessment, heavy lockdowns do not meaningfully reduce the number of deaths in the areas where they are implemented, when compared to areas where lockdowns were not implemented or as stringent.

  Today, some 14 months into the pandemic, many jurisdictions across Canada are still following the same policy trajectory outlined at the beginning of the pandemic. Allen attributes this to politics.

  He says that politicians often take credit for having achieved a reduction in case numbers through their lockdown measures.

  “I think it makes perfect sense why they do exactly what they did last year,” Allen said.

  “If you were a politician, would you say, ‘We’re not going to lock down because it doesn’t make a difference, and we actually did the equivalent of killing 600,000 people this last year.’”

  You wouldn’t, he said, because “the alternative is they [politicians] have to admit that they made a mistake, and they caused … multiple more loss of life years than they saved.”

  Allen laments that media for the most part have carried only one side of the debate on COVID-19 restrictions and haven’t examined the other side. Adding to the concern, he says, is that views contrary to the official government response are often pulled from social media platforms.

  He says he has heard that even his own published study has been censored by some social media sites.

  “In some sense these are private platforms. They can do what they want. But on the other hand, I feel kind of sad that we live in the kind of a world where posing opposing opinions is either dismissed, ignored, or … name-called, [and] in some ways cancelled,” Allen said.

  Tyler Durden
  Tue, 05/11/2021 – 19:25

• NRA In Peril After Judge Rejects Bankruptcy Filing
  NRA In Peril After Judge Rejects Bankruptcy Filing

  The NRA was dealt a serious blow on Tuesday after a Texas judge tossed the gun rights organization’s bid to declare bankruptcy, saying it was filed in “bad faith” in an effort to dodge litigation in New York.

  Judge Harlin Hale tossed the case after New York Attorney General Letitia James and others questioned how legitimate the January 15th bankruptcy filing was, according to a report by Law 360.

  #BREAKING: A judge has ruled in our favor and rejected the @NRA‘s attempt to claim bankruptcy and reorganize in Texas.

  The @NRA does not get to dictate if and where it will answer for its actions, and our case will continue in New York court.

  No one is above the law.

  — NY AG James (@NewYorkStateAG) May 11, 2021

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

  The group filed for Chapter 11 bankruptcy after James filed a lawsuit to dissolve the NRA – alleging that the organization has abused its status as a nonprofit, along with corruption, and a “culture of self-dealing, mismanagement, and negligent oversight” fostered by longtime CEO Wayne LaPierre.

  

  The decision means that Hale will be able to more easily seize the NRA’s assets if she prevails in her New York lawsuit, where she argued that the group should be dissolved.

  According to bankruptcy filings, the organization has $50 million more assets than their debt load, making the financially solvent. In their bid to restructure and move to Texas, the NRA claimed that New York’s regulatory environment is corrupt. NRA attorneys accused James, a Democrat, of waging a political campaign against the organization – and argued that Texas would offer a ‘regulatory haven’ for the gun-rights group.

  Meanwhile, LaPierre faces additional litigation from James’ office, after the Wall Street Journal reported that the IRS is investigating him for potential criminal tax fraud.

  Tyler Durden
  Tue, 05/11/2021 – 19:05

• Three Places Where "Permanently" Higher Inflation Could Come From
  Three Places Where “Permanently” Higher Inflation Could Come From

  Tomorrow we get a CPI number which according to consensus at least, will be historic: it will be the first 0.3% sequential increase in core (not the much higher headline) prices this century…

  

  … a talking point which will merely underscore the recent surge in inflation fears across both companies (who can pass these rising costs on to consumers)…

  

  … and consumers (who can’t).

  

  Yet while households are growing more convinced with each passing day that higher prices will stick, with the NY Fed’s latest survey of consumer expectations revealing that over the next year consumers anticipate gasoline prices jumping 9.18%, food prices gaining 5.79%, medical costs surging 9.13%, the price of a college education climbing 5.93%, and rent prices increasing 9.49%…

  

  … neither the Fed, nor sellside analysts are willing to concede as much yet. Take BofA’s chief economist Michelle Meyer, who expects core PCE inflation, the Fed’s preferred measure, to peak at 2.3% this quarter, before settling back down to 1.9% by the end of 2021. Meyer then expects prices to trend slightly higher over the medium term, eventually surpassing the Fed’s target consistently enough (and in an environment of full employment) that interest rate hikes will be warranted, possibly not until the second half 2023.

  Needless to say, the market disagrees, and especially the bond market, where traders are pricing in far more inflation and faster Fed hikes than that. But, as BofA’s Jared Woodard notes, they often do, and are usually very early: as shown in the chart below, since 2007, rates implied by Fed funds futures have been, on average, 54bp higher than actual interest rates one year later.

  

  But maybe this time will be different? As Woodard counters, the challenge for those who expect permanently higher or harmful inflation is to explain where it will come from. In response, the BofA strategist says he can see three possible sources of “permanent” inflation, if no no plausible ones.

  1. Scarce goods

  In 2020, many firms cut capacity and reduced inventories, expecting a long recession. The faster rebound has meant shortages in lumber, corn, copper, etc. Some bottlenecks may lack quick fixes (e.g. semiconductors), but many others can be resolved.

  

  More importantly, whether necessitated by Covid or by the reorientation of supply chains toward reliable democracies, a period of higher capex should be tolerable. Many companies have proven pricing power, and in Q1, US corporate profit margins are at record highs.

  

  Scarce workers

  Woodard then predicts that there are also good reasons to think that any sharp surge in wages will end by Q4 for the following reasons:

  • Labor supply is set to rise sharply.
  • Generous unemployment insurance benefits expire in September,
  • children will return to public schools,
  • health concerns will be alleviated,
  • firms will be able to hire from a broader pool of remote workers.

  Indeed, we have 9.8 million unemployed workers and BofA economists expect an additional 2mm+ returning to the labor force by the fall, by which point the Biden unemployment checks will have expired. 

  Meanwhile, those widespread reports of employers offering hiring bonuses…

  

  … are a sign of a temporary mismatch, not an incipient spiral. “A bonus is not a raise”, according to BofA… although it’s a key part of one’s compensation – we wonder how many BofA bankers would work without one.

  In any case, BofA believes that a higher long-term trend in wage growth would be positive for GDP and productivity: of the firms that said they will not raise capex in the latest Duke CFO survey, 2/3 said it is because they “have no need to expand capacity.” Persistent higher demand is necessary for sustained corporate investment. It’s, therefore, hard even to imagine a wage-spiral tail risk according to Woodard who argues that it would take steady wage gains of 10-12% to push inflation to the levels of the 1970s & 80s…

  

  … and the US economy is structured very differently today. Non-elite unions are politically toothless. Technology penetrates every industry. The offshoring of more services is coming.

  Excess demand

  The last argument against persistent inflation is that there are also no signs of excess demand. The latest BofA consumer appears to affirm a “fiscal liquidity trap” thesis.

  • High-income households have excess savings, but history shows they don’t spend; and a chill in high-income spending is more likely in 2021 from the threat of higher taxes (Ricardian equivalence);
  • Low-income households received excess stimulus but their spending has already peaked (Exhibit 7) and <10% of new rounds of stimulus are being spent (Exhibit 8).

  

  While we are confident that many readers will disagree, Woodard concludes that “in sum, we expect high inflation levels to be transitory because structural deflationary forces are very strong, most supply shortages can be resolved, wage increases are modest (and helpful long-term in any case), and there is no evidence of excess demand.”

  * * *

  Bullshit, you say. Between the trillions in stimulus and the monetary pump, this time is different.

  Perhaps, but there is another problem: anyone wishing to hedge against soaring inflation faces a daunting high cost (one could almost say “inflationary” cost).

  As shown in the chart below, historical data show that a permanent portfolio allocation to inflation assets only hurts returns (unlike a deflationary bias). Allocating $1 in 1974 equally to a basket of commodities, gold, global value, and European equities – i.e. inflationary assets –  was worth $38 today; at the same time, an allocation to IG corporate bonds, Treasuries, US growth stocks, and the S&P 500 was worth $104.

  

  Curiously, even a tactical allocation imposes a significant cost unless timed perfectly. BofA economists expect 3.6% average inflation for Q2. Over the last 30 years, there were five occasions when CPI surged above that level (May’01, Sept’05, June’06, Oct’07, June’11).

  On average, investors who bought inflation assets on those triggers suffered losses over the next year: commodities -10%, value vs growth -2%, EU vs US equities -3% and cyclical vs defensives -1%. Only TIPS and small vs large saw positive average returns. And today, 10-year TIPS yield -0.93%, just 19bps from record lows.

  In conclusion, Woodard writes that “the best time to buy inflation protection would be after the next “natural” recession, not when inflation expectations are already at 13-year highs.”

  While that may true, one thing Woodard refuses to admit – or perhaps forgot to acknowledge – is that in a world where even the BIS admits it is in the business of manipulating gold lower, crypto has emerged as the best inflation hedge in the world. In that case, his entire argument about “expensive” inflation hedges can be thrown out, because one look at the return of bitcoin, ethereum, or the various DeFi tokens in the past year, and the conclusion is that the market is convinced that what is coming will make the Weimar and Zimbabwe hyperinflations seem like a walk in the park…

  Tyler Durden
  Tue, 05/11/2021 – 18:45

• Hedge Funds Descend On Puerto Rico As Biden Tax Threat Looms
  Hedge Funds Descend On Puerto Rico As Biden Tax Threat Looms

  With President Biden and the Democrats on the warpath to separate the richest Americans from their income, hedge funds managers are starting to expand into Puerto Rico – leaving open the possibility of relocating to the island to obtain huge tax breaks, according to Bloomberg.

  

  Both ExodusPoint Capital Management and Millennium Management have opened local subsidiaries on the island, according to local records. ExodusPoint, headed by Michael Gelband, created a money-management in Puerto Rico on behalf of co-founder Hyung Soon Yee, who moved there last year.

  Millennium, run by Izzy Englander, set up shop on the island just weeks after Biden won the 2020 US election.

  And with Biden’s proposed tax increases on the wealthy and corporations looming, those who venture to Puerto Rico may be able to avoid both state and federal taxes according to the report.

  The lure for would-be tax-savers is a pair of laws Puerto Rico enacted in 2012 to attract wealthy mainlanders: the Export Services Act and the Individual Investors Act. The latter is of particular interest to hedge fund managers because it exempts capital-gains taxes, including those levied on the performance fees that comprise the bulk of their compensation. In New York, such income currently would be subject to aggregate federal, state and local taxes approaching 50%.

  Puerto Rico received almost 3,500 applications for the tax incentives during fiscal 2019 and 2020, exceeding the combined total for the previous seven years, according to the commonwealth’s Department of Economic Development and Commerce. -Bloomberg

  In the first six months leading up to March, over 1,000 applications for tax incentives were filed according to an agency spokeswoman. Applications for the tax breaks, which are generally available to new residents and services businesses which generate revenue outside Puerto Rico, are typically kept confidential until approval. The government office which vets them reports a seven-month backlog, which has been exacerbated by the pandemic and surging demand thanks to Biden’s tax plans.

  “You have a lot of people looking to relocate because they no longer have to be in close proximity to where they work,” said Euro Pacific Capital head Peter Schiff, who moved his firm’s asset management arm to San Juan in 2013. “The higher taxes are, the greater the appeal of coming here,” he added.

  Menlo Park-based Pantera Advisors, headed by Dan Morehead, established a money-management unit last month in the Puerto Rican town of Guaynabo, according to a filing.

  According to SEC records, ExodusPoint and Millennium were the only large money managers with Puerto Rico affiliates as of the end of March. At present, neither firms’ subsidiaries have been granted incentives under the Export Services Act, according to the government spokeswoman.

  Real estate prices going ham

  Around 20 miles west of the capital of San Juan lies Dorado, an area considered family-friendly which boasts high-end housing and the infrastructure required by finance professionals to access necessary computer networks on the mainland.

  “There has been exceptional interest, in part because Dorado has access to fiber broadband,” said Jared Dubin – who recently set up Troluce Capital Advisers to manage money for ExodusPoint. “The Dorado real estate market has been pretty wild,” he added.

  And of course, the flood of new money managers snapping up high-end real estate is squeezing prices even higher in the region.

  Millennium incorporated a San Juan-based company, MPG PRManagement, on Nov. 23, according to records maintained by Puerto Rico’s Department of State. The subsidiary had four money managers working there at year-end, SEC records show. In June, ExodusPoint incorporated its subsidiary in Dorado, where Lee, 52, now lives. He owns 50% of that entity, ExodusPoint Capital Management Puerto Rico, and shares ownership of the rest with Gelband through another affiliate, according to a regulatory filing.

  Lee, whose Facebook page shows him seated at the controls of a private plane, has a commercial pilot rating and is certified to fly small jets, Federal Aviation Administration records show. In September, ExodusPoint revised its SEC filings to say that Lee’s business trips on a plane he had recently purchased would be partially covered by the firm’s expense policy. It allows Lee and Gelband to seek reimbursement from ExodusPoint hedge funds for private flights, with repayment limited to the equivalent cost of first-class commercial airfare.

  “If people are interested in drastic life changes in order to pay less tax, then I have one item on my list,” according to Stewart Patton – a Belize-based attorney who helps US expats optimize their tax situations. 

  “Move to Puerto Rico…”

  Tyler Durden
  Tue, 05/11/2021 – 18:25

• Marked-to-Marxist: Weighting Chinese Stocks
  Marked-to-Marxist: Weighting Chinese Stocks

  Authored by Nick Schmitz via Verdad Capital

  The three largest economies by GDP are the US, China, and Japan. These are also the largest country stock markets by aggregate market cap. By our count, US-headquartered stocks add up to $44T in equity value, Chinese (and Hong Kong) stocks add up to $17.3T, and Japanese stocks add up to $6.5T. Meanwhile, Vanguard’s Total World Stock ETF allocates 57% to US stocks, 5% to Chinese stocks, and 7% to Japanese stocks.

  Figure 1: GDP, Aggregate Market Size, and Vanguard (VT) Fund Weighing

  

  Source: IMF for 2021 nominal GDP estimates. Capital IQ for aggregate market cap of all country-headquartered public listings on country exchanges, excluding REITS and capital markets; China includes Hong Kong. Vanguard (VT) for country exposure weights.

  Relative to GDP or total market capitalization, global equity indices, and by proxy most investors, are massively underweight Chinese stocks. The case for upping exposure to China looks even stronger when we look at the selection opportunity, liquidity and growth, especially relative to China’s Asian competitor, Japan. China has 2x the number of listed stocks as Japan, and those stocks have 3x the median market cap of Japan.

  Figure 2: Stocks, Stock Size, and Growth for the Big Three Countries

  

  Perhaps most notably, China’s median firm growth rates are >5x Japan’s. And China’s exceptional growth rates aren’t just figments of equity analysts’ imaginations: Chinese corporate profits have been growing faster than Japan’s for decades.

  Figure 3: Chinese vs Japanese GDP Growth Rates

  

  It’s puzzling, therefore, to note that China’s equity market hasn’t dramatically outperformed the Japanese market for 10 years now.

  Despite a massive difference in historic growth rates, the MSCI Japan index returned the exact same amount as the MSCI China index over the past decade, and with way less heartburn along the way.

  Figure 4: MSCI Japan vs MSCI China Index (2011–2021)

  

  This is in large part because investors paid a hefty premium to own Chinese stocks throughout the decade. The growth differential, it appears, was more than priced in. The picture today is little changed from a decade ago: the price differential between the two is still one of the biggest for countries outside of US markets, a concerning data point for China bulls.

  Figure 5: Chinese vs Japanese Median Stock Trading Multiples Today

  

  Chinese stocks are around 25% to 200% more expensive than Japanese stocks, depending on how you measure them.

  But this simple analysis assumes a Chinese public equity is the same thing in kind as other developed-market public equities like a Japanese stock. There is a relevant quote, often misattributed to Stalin: “I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this—who will count the votes, and how.” For minority voting shareholders of Chinese “public equities,” we think both may be extremely important. This is because Chinese public equities are neither “public” nor “equitable” to the extent we can measure.

  As shown below, Chinese equities have a public float of 45% on average, making them technically not public. Despite China’s maintenance, until recently, of the democratic-sounding “one share, one vote” law, in practice, this means that state-owned or quasi-state-owned institutions will often maintain full control according to academics and Pulitzer Prize winning journalism. This is a system of collective equity that might be thought of as having less of the nuance of James Madison and more of the nuance of Mao’s 1949 concept of The People’s Democratic Dictatorship. This “democracy for the people and dictatorship over the reactionaries,” is most likely why the reactionary practice of shareholder activism is “quite uncommon” in China, according to legal experts.

  But why rely on the opinions of experts and academics in their ivory towers? As shown below, when you ask Chinese people themselves, they routinely rank themselves alongside Bhutan, the Kyrgyz Republic, and Colombia on most every metric related to the equitable treatment of shareholders, again making them not technically “equities” to the extent we can measure this.

  Figure 6: Public Float and Indicators of Equitable Treatment for “Public Equities”

  

  Source: Capital IQ for float. All publicly listed stocks, excluding REITs and capital markets. Survey rankings from the latest World Bank’s and World Economic Forum’s Global Competitiveness Ranks.

  Finally, in comparing Chinese to Japanese equities, it may be useful to consider not just the valuation and transparency risks but also the debt markets these equities are subordinated to.

  Below is the aggregate amount of corporate ex-financial debt in China and Japan over the last 20 years. The financial statement growth that makes Chinese equities so attractive compared to Japanese equities has come at the cost of skyrocketing debt.

  Figure 7: Total Corporate Ex-Financial Debt ($M)

  

  And while the Chinese ratings agencies have ranked most all issued domestic bonds in the AAA to AA investment grade range, when the imperialist swine at S&P Credit Ratings applied their independent analysis on the publicly available Chinese accounting data, this resulted in a downgrade of the same sample of Chinese issuers from exclusively investment grade to largely speculative and junk grade.

  Figure 8: Chinese Domestic Credit Ratings vs S&P Indicative Ratings

  

  China is a unique market. We can think of only one historical analogue to a country like China today. A country whose capital markets rose at breakneck speed from the ashes of war and economic catastrophe. A country with a market that emerged as nearly dominant globally after prolonged sustained growth, at massive scale, with high valuations and extremely accommodative corporate lending. A country that adopted many capitalist standards to get there while allowing the government and complex webs of corporate crossholdings to play a heavy-handed role in directing national industrial and technological efforts before hitting peak population and a non-performing loan crisis. That country is Japan in the 1980s, before the asset bubble burst.

  But China is quite different from the historical example of Japan for many reasons, including that China is one of the very few officially Marxist-Leninist countries surviving today. North Korea, Laos, and Cuba don’t really have markets, let alone stock markets. As such, this extreme survivorship bias makes it difficult to estimate your long-term probability of realizing a return on (or return of) your capital in Marxist-Leninist states. We are left with only rough comparable examples like the Ho Chi Minh City Stock Exchange in Vietnam and Venezuela’s Caracas Stock Exchange. We can’t say much empirically on such a limited sample, but for what it’s worth, all three markets joined the UN’s Sustainable Stock Exchanges Initiative, giving your capital what some would argue is two layers of communist oversite.

  It may be tempting to assume that when you put your money in a foreign country, no matter which one, you will get it back a decade later, as has occurred quite regularly since the ’70s. Capital controls were really something that only our grandparents had to worry about. But foreign investors thinking about Chinese exposure over the next decade have neither the assurance of constrained law nor credible deterrence. Meanwhile, in Japan, investors enjoy the backdrop of a close ally with a pluralistic liberal democratic constitution and the geopolitical insurance policy that only a division of US Marines in Okinawa can provide.    

  For these reasons, we think of allocation decisions to the largest countries outside of the US as more complicated than a weighting of fully interchangeable financial instruments.

  Our conclusion is that, compared to Japanese public equities today, Chinese public equities are not technically public or equitable to the extent we can measure. They are massively more expensive and are probably subordinated to much more dubious lending practices than the government-approved ratings agencies would let on, according to S&P’s mathematical standards. But we must admit that the trailing and one year forward growth is red-hot in the market that’s marked-to-Marxist.

  Tyler Durden
  Tue, 05/11/2021 – 18:05

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• The 700 Year Old Romanian Castle That Inspired "Dracula" Is Now A Free COVID Vaccination Site
  The 700 Year Old Romanian Castle That Inspired “Dracula” Is Now A Free COVID Vaccination Site

  Dracula has gone from sucking blood to injecting vaccines.

  In what is undoubtedly fertile ground for irony and a glance into the sad reality of the post-Covid world, the more than 700 year old castle that was said to have inspired Bram Stoker’s Dracula is now being used as a Covid vaccination site.

  The landmark is offering free Pfizer vaccines for visitors every weekend in May, according to CBS. 

  

  Medics on site wear fang stickers and the castle boasts signs that feature Dracula’s fangs replaced with vaccination needles.

  Visitors to the site can show up without an appointment and, after getting vaccinated, will receive “free admission” to the castle’s exhibits of – you guessed it – medieval torture instruments.

  Romania has pledged to vaccinate at least 10 million people by September. The country’s number currently stands at about 5.8 million people, out of a total population of 19.41 million. 

  

  The country has “one of the highest vaccine hesitancy rates,” the report notes (though with thoughtful stunts like this one, we can’t imagine why people aren’t taking it more seriously). “Nearly half” the country’s population doesn’t want to get vaccinated. 

  Those in charge hope the “Dracula’s castle” approach to medicine not only helps administer more vaccines, but drives up tourism numbers in the process.

  It’s a bold strategy. Let’s see if it works out for them.

  Tyler Durden
  Tue, 05/11/2021 – 02:45

• The Risks Of A Positive Agenda Between The EU And Turkey
  The Risks Of A Positive Agenda Between The EU And Turkey

  Authored by Doris Christodoulou via GlobalRiskInsights.com,

  In the aftermath of the 25-26 European Council Summit, the EU is clearly divided in its approach to Turkey. While some wish to see a more determined EU which supports its values and protects its Member States, others disagree with sanctions on Turkey and support a more welcoming plan with which to meet the state. However, an approach using exclusively soft power opens up the EU to risks that have the potential to be very costly. 

  

  During the 25-26 March European Council Summit, one of the main points on the agenda was the situation in the Eastern Mediterranean. More extensively, the Summit focused on EU-Turkey relations. EU leaders recalled ‘the European Union’s strategic interest in a stable and secure environment in the Eastern Mediterranean and in the development of a cooperative and mutually beneficial relationship with Turkey.’ Although some are arguing for more sanctions, many leaders are hoping for an exclusively positive agenda between the EU and Turkey.

  Following the meeting on 25 March, the EU said that, provided Turkey maintains the current de-escalation and conditionalities laid out in previous conclusions of the European Council, the EU is ready to develop a positive agenda  that will facilitate cooperation with Turkey in areas of common interest, including economic cooperation and migration. However, an exclusively positive agenda comes with risks at the cost of the EU.

  Risk #1: The EU Undermines Its Own Legitimacy 

  A critical risk that comes with a positive EU-Turkey agenda is that it may undermine the EU as a legitimate player in the international arena. By adopting a positive agenda with Turkey, the EU runs the risk of appearing paradoxical. 

  The EU has recently imposed further sanctions on Russia over the imprisonment of opposition leader Alexey Navalny, on Belarus over the violent suppression of the opposition, and on Myanmar following the military coup. However, the EU is reluctant to impose sanctions on Turkey which likewise has breached laws and core European values, including democracy, sovereignty, and human rights. In fact, the EU continues to discuss further funding and investment in Turkey in the years to come. 

  This engenders skepticism around the efficacy of the EU’s normative power and puts EU solidarity to the test. Sticking to a soft power approach despite Turkey’s flagrant violations of democracy, human rights and state sovereignty would make the EU look weak, undermining the values it claims to represent. In addition to risking its standing as a legitimate international actor, it is likely that an exclusively positive agenda will make the EU  appear as though it lacks resolve, hence making it harder to maintain its leverage over issues that will arise in the future, such as on the new deal on migration. 

  Risk #2: The Return of Crisis in EU-Turkey Relations

  A positive agreement with Turkey must come with a consistent return to the rule of law. Yet, a closer look at Turkey’s domestic politics and a series of democratic failures in Turkey reveals that a future crisis in EU-Turkey relations is very likely. Whether this comes in the form of a threat to migration flows into the EU, or unauthorized gas explorations that undermine the sovereignty of EU member states, and more extensively the breach of international law if it does not align with Turkey’s interests. 

  It is rather naïve to expect that a state whose President exercises full control over domestic politics and foreign policy – without allowing much room for domestic challenge from other parties – would simply abide by international law. Evident to that is Turkey’s illegal occupation of Cyprus. Although a comprehensive solution to the Cyprus Problem is key to successful EU-Turkey relations, Turkey’s objection to the EU’s participation in the resumption of negotiations with Cyprus clashes with Turkey’s alleged cooperation with the EU. This breach of international law and deterioration of human rights are very likely to continue. A key example of human rights abuses includes crude violations against women. More than eleven million women have faced sexual or domestic violence in Turkey. Significantly, Turkey recently withdrew from the Istanbul Convention, an international treaty for the protection of women. This adds to the systematic failures to protect women’s rights and by extension human rights. The EU would do well to  be cautious of Erdogan’s statements regarding his willingness to cooperate. The risk that comes with the EU’s soft power approach is that it would only be a partial and temporary success in managing Turkey. Future conflicts of interest in the EU-Turkey relations are therefore highly likely.

  Conclusions

  The adoption of a purely positive agenda with Turkey, and the complete disregard of discussion to add sanctions, poses potential threats to the EU’s legitimacy and stability. Firstly, it undermines the EU’s influence as a normative power. It works in favour of the autocratic power in Turkey, which flies in the face of fundamental European values. If the EU were to take this approach to the situation with Turkey, it would run the risk of appearing paradoxical and illegitimate on the international stage. Secondly, by adopting a completely soft approach, the EU runs the risk of gaining a temporary half-victory, i.e., smoothing over relations in the region at the cost of the values it claims to hold so dear. 

  Future clashes with Turkey that harm European interests are very likely to occur, given its current autocratic regime and the deterioration of democratic values and human rights domestically. This hints at the unlikelihood of Turkey’s ability to effectively abide by international law. With this positive agenda, it appears the EU wishes to avoid breaking economic ties or migration flows to the EU. However, even if it succeeds in the short term, another crisis surrounding EU-Turkey relations can be expected in the future. The softer the EU’s response, the more power hungry Turkey may become, feeding a vicious circle – potentially exacerbating tensions in migration flows and geopolitical challenges, or neglecting human rights, just to name a few.

  Tyler Durden
  Tue, 05/11/2021 – 02:00

• Escobar: An Empire In Love With Its Afghan Cemetery
  Escobar: An Empire In Love With Its Afghan Cemetery

  Authored by Pepe Escobar via The Asia Times,

  The New Great Game 3.0 is just beginning with a hat tip to Tacitus and dancing to the Hindu Kush groove…

  

  One cannot but feel mildly amused at the theatrical spectacle of the US troop pullout from Afghanistan, its completion day now postponed for maximum PR impact to 9/11, 2021.

  Nearly two decades and a staggering US$2 trillion after this Forever War was launched by a now immensely indebted empire, the debacle can certainly be interpreted as a warped version of Mission Accomplished.

  “They make a desert and call it peace,” said Tacitus – but in all of the vastness of the Pentagon there sits not a single flack who could imagine getting away with baldfacedly spinning the Afghan wasteland as peaceful.

  Even the UN bureaucratic machinery has not been able to properly account for Afghan civilian deaths; at best they settled for 100,000 in only ten years. Add to that toll countless “collateral” deaths provoked by the massive social and economic consequences of the war.

  Training and weaponizing the – largely inefficient – 300,000-plus Afghan Army cost $87 billion. “Economic aid and reconstruction” cost $54 billion: literally invisible hospitals and schools dot the Afghan landscape. A local chapter of the “war on drugs” cost $10 billion – at least with (inverted) tangible results: Afghanistan now generates 80% of the world’s opium.

  All these embarrassing facts disappear under the shadow play of 2,500 “official” departing troops. What really matters is who’s staying: by no means just a few out of some 17,000 “contractors,” over 6,000 of whom are American citizens.

  “Contractor” is a lovely euphemism for a bunch of mercenaries who, perfectly in tune with a shadow privatization drive, will now mingle with Special Forces teams and covert intel ops to conduct a still lethal variation of hybrid war.

  

  Of course this development won’t replicate those David Bowie-style Golden Years in the immediate post-9/11 era. Ten years ago, following the Obama-Petraeus surge, no fewer than 90,000 contractors were dancing to the Hindu Kush groove, lavishly compensated by the Pentagon and dabbling in everything from construction, transportation and maintenance to “enhanced interrogation services.”

  Collectively, this shadow army, a triumph of private enterprise many times cheaper than the state-sponsored model,  bagged at least $104 billion since 2002, and nearly $9 billion since 2016.

  Now we’re supposed to trust CENTCOM commander General Kenneth McKenzie, who swears that “the U.S. contractors will come out as we come out.” Apparently the Pentagon press secretary was not briefed: “So on the contractors, we don’t know exactly.”

  Some contractors are already in trouble, like Fluor Corporation, which is involved in maintenance and camp construction for no fewer than 70 Pentagon forward operating bases in northern Afghanistan. Incidentally, no Pentagon PR is explaining whether these FOBs will completely vanish.

  Fluor was benefitting from something called LOGCAP – Logistics Civil Augmentation IV Program – a scheme set by the Pentagon at the start of Obama-Biden 1.0 to “outsource logistical military support.” Its initial five-year deal was worth a cool $7 billion. Now Fluor is being sued for fraud.

  Enhancing stability forever

  The current government in Kabul is led by a virtual nonentity, Ashraf Ghani. Like his sartorially glamorous predecessor Hamid Karzai, Ghani is a US creature, lording it over a rambling military force financed by Washington to the tune of $4 billion a year.

  So of course Ghani is entitled to spin a rosy outlook for an Afghan peace process on the pages of Foreign Affairs.

  It gets curioser and curioser when we add the incandescent issue that may have provoked the Forever War in the first place: al-Qaeda.

  A “former security coordinator for Osama bin Laden” is now peddling the idea that al-Qaeda may be back in the Hindu Kush. Yet, according to Afghan diplomats, there is no evidence that the Taliban will allow old-school al-Qaeda – the Osama/al-Zawahiri incarnation – to thrive again.

  That’s despite the fact that Washington, for all practical purposes, has ditched the Doha Agreement signed in February 2020, which stipulated that the troop pullout should have happened this past Saturday, May 1.

  Of course, we can always count on the Pentagon to “enhance security and stability”  in Afghanistan. In this Pentagon report we learn that “AQIS [al-Qaeda in the Indian Subcontinent] routinely supports and works with low-level Taliban members in its efforts to undermine the Afghan government, and maintains an enduring interest in attacking US forces and Western targets.”

  Well, what the Pentagon does not tell us is how old-school al-Qaeda, pre-AQIS, metastasized into a galaxy of “moderate rebels” now ensconced in Idlib, Syria. And how contingents of Salafi-jihadis were able to access mysterious transportation corridors to bolster the ranks of ISIS-Khorasan in Afghanistan.

  The CIA heroin ratline

  All you need to know, reported on the ground, about the crucial first years of the imperial adventure in Afghanistan is to be found in the Asia Times e-book Forever Wars, part 1.

  Two decades later, the politico-intel combo behind Biden is now spinning that the end of this particular Forever War is an imperative, integrated to the latest US National Security Strategy.

  Shadow play once again reigns. Withdrawal conditionals include the incompetence and corruption of the Afghan military and security forces; that notorious Taliban-al-Qaeda re-engagement; the fight for women’s rights; and acknowledging the supreme taboo: this ain’t no withdrawal because a substantial Special Forces contingent will stay in place.

  In a nutshell: for the US deep state, leaving Afghanistan is anathema.

  The real heart of the matter in Afghanistan concerns drugs and geopolitics – and their toxic intersection.

  

  Everyone with transit in the Dubai-Kandahar axis and its ramifications knows that the global-spanned opium and heroin business is a matter very close to the CIA’s heart. Secure air transport is offered by bases in Afghanistan and neighboring Kyrgyzstan.

  William Engdahl has offered a concise breakdown  of how it works. In the immediate post-9/11 days, in Afghanistan, the main player in the opium trade was none other than Ahmed Wali Karzai, presidential brother and a CIA asset. I interviewed him in Quetta, Balochistan’s capital, in October 2001 (the interview can be found in Forever Wars). He obviously did not talk about opium.

  Ahmed Karzai was snuffed out in a Mafia-style hit at home, in Helmand, in 2011. Helmand happens to be Afghanistan’s Opium Central. In 2017, following on previous investigations by Seymour Hersh and Alfred McCoy, among others, I detailed the workings of the CIA heroin ratline in Afghanistan.

  New Great Game 3.0 is on

  Whatever happens next will involve layers and layers of shadow play. CENTCOM’s McKenzie, at a closed-door hearing at the US House Armed Services Committee, basically said they are still “figuring out” what to do next.

  That will certainly involve, in McKenzie’s own assessment, “counter-terrorism operations within the region”; “expeditionary basing” (linguistic diversion to imply there won’t be any permanent bases, at least in thesis); and “assistance” to Afghan National Defense and Security Forces (no details on what this “assistance” will consist of).

  Now compare it with the view by major Eurasian powers: Russia, China, Pakistan and Iran, three of them members of the Shanghai Cooperation Organization (SCO), with Iran as an observer and soon full member.

  Their number one priority is to prevent any mutating Afghan jihadi virus to contaminate Central Asia. A massive 50,000 troop-strong Russia-Tajikistan military exercise in late April had exactly that in mind.

  Ministers of defense of the Collective Security Treaty Organization (CSTO) met in Dushanbe with the objective of further fortifying the porous Tajik-Afghan border.

  And then there’s the Turkmen-Afghan border, from which the opium/heroin trail reaches the Caspian Sea and diversifies via Russia, Kazakhstan and Azerbaijan. Moscow, even more than the CSTO, is particularly worried by this stretch of the trail.

  The Russians are very much aware that even more than different opium/heroin routes springing up, the top danger is a new influx of Salafi-jihadis into the Commonwealth of Independent States (CIS).

  Even if analyzing it from completely different perspectives, Americans and Russians seem to be equally focused on what Salafi-jihadists – and their handlers – may come up with in post-9/11, 2021 Afghanistan.

  So let’s go back to Doha, where something really intriguing is afoot.

  On April 30, a so-called extended troika – Russia, the United States, China and Pakistan – issued a joint statement in Doha on their discussions regarding a negotiated settlement in Afghanistan.

  The extended troika met with the Kabul government, the Taliban and host Qatar. At least they agreed there should be “no military solution.”

  It gets curioser and curioser again: Turkey, backed by Qatar and the UN, is getting ready to host a conference to further bridge the gap between the Kabul government and the Taliban. Realpolitik cynics will have a ball wondering what Erdogan is scheming at.

  The extended troika, at least rhetorically, is in favor of an “independent, sovereign, unified, peaceful, democratic, neutral and self-sufficient Afghanistan.” Talk about a lofty undertaking. It remains to be seen how Afghanistan’s “neutrality” can be guaranteed in such a nest of New Great Game serpents.

  Beijing and Moscow will be under no illusions that the newly privatized, Special Forces Afghan-American experiment will eschew using Salafi-jihadis, radicalized Uighurs or other instant assets to destabilize what in effect should be the incorporation of Afghanistan to the China-Pakistan Economic Corridor (CPEC), the Shanghai Cooperation Organization (where it’s already an observer) and the larger Eurasia integration project.

  An extra-intriguing piece of the puzzle is that a very pragmatic Russia – unlike its historical ally India – is not against including the Taliban in an overall Afghan settlement. New Delhi will have to go along. As for Islamabad, the only thing that matters, as always, is to have a friendly government in Kabul. That good old “strategic depth” obsession.

  What the major players – Russia and China – see in the framework of a minimally stabilized Afghanistan is yet one more step to consolidate the evolution of the New Silk Roads in parallel with the Greater Eurasia partnership. That’s exactly the message Russian Foreign Minister Sergey Lavrov delivered during his recent visit to Pakistan.

  Now compare it with the – never explicit – strategic deep state aim: to keep some sort of military-intel “forward operating base” in the absolutely crucial node between Central and South Asia and close, oh so close, to national security “threats” Russia and China.

  The New Great Game 3.0 is just beginning at the graveyard of empires.

  Tyler Durden
  Tue, 05/11/2021 – 00:10

• China Enforces New Boundary With Nepal At Summit Of Everest To Keep Infected Climbers Out
  China Enforces New Boundary With Nepal At Summit Of Everest To Keep Infected Climbers Out

  In the latest sign that Beijing is warily eyeing the outbreak in India as it spills over its borders into neighboring Nepal, China has set up a “line of separation” at the summit of Mount Everest to prevent any climbers from the Nepal side from mingling with climbers from the Tibet side, Reuters reports. The decision comes as the Everest base camp on the Nepal side has struggled with a persistent COVID-19 outbreak since April.

  

  To accomplish this, China is sending an expedition of climbers to install the line, though it’s not clear how they intend to enforce the boundary.

  Starved of tourism revenue, the Nepalese government has refused to impose limits on tourists and climbers who come in droves to visit the legendary mountain. Beijing apparently doesn’t feel great about this.

  As Reuters pointed out, it’s not clear how Beijing intends to enforce the border line in one of the most inhospitable environments for humans – the area surround the summit of Everest. The summit itself is about the size of a dining room table.

  To install it, Beijing is dispatching a small team of Tibetan climbing guides – which will include 21 Chinese nationals – who will ascend Everest and set up the “line of separation” at the summit.

  It’s also unclear whether the team of guides who will be setting up the line of separation will remain in the “death zone”, the area leading up to the summit where hundreds of travelers have died.

  China hasn’t allowed any foreign climbers to ascend the mountain from the Tibetan side since the coronavirus pandemic began. Tourists are also banned from visiting the base camp on the Tibetan side.

  So if you do happen to get infected with COVID-19 at 30,000 feet, you better just stay up there.

  Tyler Durden
  Mon, 05/10/2021 – 23:50

• Welcome To The Socialist Paradise Of California
  Welcome To The Socialist Paradise Of California

  Authored by Michael Snyder via TheMostImportantNews.com,

  If you like extremely high taxes, a ridiculously inflated cost of living, horrifying bureaucratic nightmares, rising crime rates, endless homeless encampments and “health restrictions” that make it nearly impossible to operate a small business successfully, then you are going to absolutely love California.  Vast hordes of people have fled the state over the past 12 months, and so that means that there is now plenty of room for more socialists to move in.  But before you come, you will want to make sure that you have completely discarded any lingering notions of “freedom” and “liberty” because they won’t be of any use to you once you arrive in California.

  

  Over the past few years, California has gotten a bad rap for being an absolutely filthy place, but the truth is that authorities are going to great lengths to try to clean things up.

  In fact, they just removed 180 pounds of feces from one homeless encampment alone…

  This week, Echo Lake Park in Los Angeles California, the location of a former homeless encampment, received a much needed, and long overdue, deep cleaning.

  The park was closed last month and since then, city officials have been working to clean and revitalize the park and have reportedly removed over 170 tents and other debris, the Los Angeles Times reported.

  Among the 35 tons or 70,000 pounds of garbage, there were literal piles of poop, amounting to 180 pounds of feces and 564 pounds of urine according data from L.A. Sanitation & Environment workers. This did not include excrement collected from portable or permanent restrooms. Other hazardous waste like needles used for drugs, gasoline, and kerosene amounted to 300 pounds of the total trash collected, the LA Times noted.

  Critics of California often focus on the worst parts of the state, and that is very unfortunate.

  California is a state known for great natural beauty, and that natural beauty once attracted tourists from all over the globe.  Unfortunately, the pandemic has kind of killed tourism and many of the most iconic locations in the state have been marred by the “temporary” problems that the state is currently experiencing.  Venice Beach is just one example…

  Residents of Venice Beach in Los Angeles say soaring crime rates and the exploding homeless population have made life in the elite beachside community unbearable.

  A ‘catastrophic’ increase in homelessness in Los Angeles has seen hundreds of tents line the beach’s famous boardwalk.

  Business owners say they are being forced to close their doors and longterm residents are afraid to leave their homes after dark after being subjected to violent attacks and intimidation.

  Many Californians aren’t leaving their homes that much during daylight hours either because the price of gasoline has gotten so high.

  At this point, the average price of a gallon of regular-grade gasoline in the United States has reached $3.02 per gallon.

  That is not good, but in many parts of California the average price of a gallon of regular-grade gasoline is now hovering around four dollars a gallon, and in some locations a gallon of premium is almost five dollars a gallon.

  But officials in California are assuring us that higher taxes and absurd regulations are “only partly to blame” for why residents of California have to pay such high prices for gasoline…

  Some industry observers insist the higher cost of gasoline in California is due to higher taxes and regulations on gas and carbon emissions statewide. State agencies and consumer advocates insist those factors are only partly to blame and that the largest manufacturers charge more in California simply because they can, while big oil companies have held back on ramping up supply, according to the New York Times, after seeing huge cuts to their profits and workforce last year because of the pandemic.

  Of course the gasoline prices in California are not even worth comparing to the absurdly high housing prices in the state.

  But the good news is that those housing prices have started to moderate a bit as hordes of former residents have stampeded out of the state over the past year.

  Some suspect that rising crime rates may have something to do with the mass exodus.  After a huge increase last year, the murder rate in Los Angeles County is up almost 200 percent so far in 2021…

  Murders in Los Angeles County have spiked nearly 200% so far this year compared to the same time in 2020, with at least one official blaming the “defund the police” movement and progressive law enforcement officials.

  Apparently not satisfied with how fast crime is rising, California Governor Gavin Newsom has decided that now is a perfect time to start releasing tens of thousands of violent criminals back on to the streets…

  California is giving 76,000 inmates, including violent and repeat felons, the opportunity to leave prison earlier as the state aims to further trim the population of what once was the nation’s largest state correctional system.

  More than 63,000 inmates convicted of violent crimes will be eligible for good behavior credits that shorten their sentences by one-third instead of the one-fifth that had been in place since 2017. That includes nearly 20,000 inmates who are serving life sentences with the possibility of parole.

  We are being told that California prisons will soon be a lot safer once all of those violent criminals are gone.

  So if you plan on living in a California prison, that is really promising news.

  As my regular readers already know, I really like to make fun of the state of California.

  But the truth is that the entire country is slowly but surely becoming just like California, and there is nothing funny about that.

  The state of California was once one of the most beautiful and most prosperous places on the entire planet.

  Sadly, now socialism is transforming it into a dirty, filthy, crime-ridden bureaucratic hellhole.

  The rest of the nation should be recoiling in horror from the cautionary tale that California has become, but instead both major political parties have deeply embraced socialism at this point.

  The path that we are on does not lead anywhere good, and those that actually live in California should understand this better than any of us.

  *  *  *

  Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.

  Tyler Durden
  Mon, 05/10/2021 – 23:30

• US Navy Seizes Massive Weapon Shipment From Stateless Vessel In Arabian Sea
  US Navy Seizes Massive Weapon Shipment From Stateless Vessel In Arabian Sea

  The guided-missile cruiser USS Monterey (CG 61) seized a massive shipment of illicit weapons last week that was being transited through international waters of the North Arabian Sea, according to the US Navy. 

  A Sikorsky SH-60 Seahawk launched from the USS Monterey helped stopped the stateless dhow sailing vessel on May 6 as part of a routine operation to verify its registry. 

  USS Monterey personnel worked with US Coast Guard Advanced Interdiction Team (AIT), boarded the vessel, and found the weapon stash. 

  USS Monterey provided more than 36 hours of over watch and security for its boarding teams and the interdicted vessel throughout the two-day operation. pic.twitter.com/IIqA7qCKMO

  — U.S. 5th Fleet (@US5thFleet) May 8, 2021

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  “The cache of weapons included dozens of advanced Russian-made anti-tank guided missiles, thousands of Chinese Type 56 assault rifles, and hundreds of PKM machine guns, sniper rifles and rocket-propelled grenades launchers. Other weapon components included advanced optical sights,” the Navy said. 

  

  The illicit cargo was removed from the vessel and laid out on the rear of the flight deck of the 567-foot warship. 

  Thousands of illicit weapons interdicted by guided-missile cruiser @USSMonterey (CG 61) from a stateless dhow in international waters of the North Arabian Sea on May 6-7.

  Cache of weapons included advanced Russian-made anti-tank guided missiles & Chinese Type 56 assault rifles. pic.twitter.com/07Fv92vbrV

  — U.S. 5th Fleet (@US5thFleet) May 8, 2021

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  Lt. Cmdr. Pete Pagano, a spokesperson for the Navy’s Fifth Fleet, told CNN in an email Monday, the weapons were likely bound for Houthi rebels in Yemen. He cited similar seizures by the Fifth Fleet over the years. 

  “It comes amid tensions in Yemen and Iran’s attempt to support Houthi rebels there. However, it may be linked to other militant groups in Yemen or even the Horn of Africa or elsewhere,” said The Jerusalem Post. 

  On Feb. 9, the cruiser USS Normandy seized missile components from a dhow sailing vessel in the Arabian Sea. 

  The seizure of the weapons was around the time the Biden administration lashed out at Yemen’s Iran-backed Houthi rebels last Friday for refusing to meet with senior UN officials to address plans to wind down the country’s devastating war and increase humanitarian relief to suffering civilians. President Biden has also announced the end of operations in the Yemen War. 

  Tyler Durden
  Mon, 05/10/2021 – 23:10

• "This Is Not Transitory": Hyperinflation Fears Are Soaring Across America
  “This Is Not Transitory”: Hyperinflation Fears Are Soaring Across America

  There was some good news for the (transitorily hyper–)inflation-ravaged US economy today when copper, wheat and lumber futures all fell after days of surging – in the case of the latter, the first drop in 13 days…

  

  … pushing the Bloomberg commodity index lower after six straight days of gains.

  

  Yet while today’s boiling-off in commodities may have been a faint validation of the Fed’s claim that this inflation is “transitory”, inflation pressures are unmistakably building, with Bloomberg’s Vince Cignarella noting that the five-year/five-year inflation swap is above 2.5% and rising: “that’s the highest since January 2018 and just 10 basis points below levels we saw in January 2017.”

  

  Why is this important? As Cignarella explains, “Inflation swaps are used by financial professionals to mitigate/hedge the risk of inflation and are considered reasonably accurate estimates for the break-even rate for the period in question. They’re also helpful to central banks and dealers who are trying to determine the market’s future inflation expectations.”

  In short, the market is looking at all the signals and is growing convinced that whatever “this” is, it is not transitory.

  And it’s not just finance pros who are calling the Fed’s bluff: according to the New York Fed’s survey of consumer expectations, median 1-year and 3-year inflation expectations by ordinary Americans jumped to a multi-year high of 3.4% and 3.1% respectively, the highest since September 2013.

  

  Digging through the details reveals an even more alarming picture: over the next year consumers anticipate gasoline prices jumping 9.18%, food prices gaining 5.79%, medical costs surging 9.13%, the price of a college education climbing 5.93%, and rent prices increasing 9.49%!

  

  This is hardly a “transitory inflation” expectation, to the contrary – expectations for sharply higher inflation are become firmly ingrained.

  But wait, there’s more: the CPI report on Wednesday is also expected to show price pressures leaped in April, and not just on a distorted year-over-year basis (where the base effect makes readings meaningless). The 0.3% core CPI M/M increase will be the highest print this century!

  

  It gets worse: one week after we showed that mentions of “inflation” on company earnings calls have now quadrupled YoY; and have jumped nearly 800% YoY…

  

  … as companies now openly freak out about soaring costs which they generously pass on to consumers, prompting BofA to conclude that “on an absolute basis, [inflation] mentions skyrocketed to near record highs from 2011, pointing to at the very least, “transitory” hyper-inflation ahead.”

  Maybe the hyperinflation will be transitory – if so, it would be the first time in history – but the soaring prices have clearly sparked a panic amid the broader population as the following chart of google searches of “inflation” shows.

  

  And so, with most assets now “fixed” by the Fed, with bonds having lost all their inflationary signaling as they now trade in a world of implicit yield curve control, and with stocks already in a massive bubble, is there any wonder why the chart of the latest crypto darling du jour – Ethereum – which so far has not been “micromanaged” by the Fed (unlike the central bank’s old nemesis, gold), looks the way it does…

  

  … when increasingly more see the crypto asset class as one of the few remaining hedges for inflation, as even Bloomberg’s John Authers recently admitted.

  Tyler Durden
  Mon, 05/10/2021 – 22:50

• Chelsea Clinton Calls For Global Crackdown On "Anti-Vax" Social Media Posts
  Chelsea Clinton Calls For Global Crackdown On “Anti-Vax” Social Media Posts

  Speaking at a Vatican-organized conference meant to promote “open dialogue”, Chelsea Clinton called for a global effort to crack down on all “anti-vax” social media posts, or anything that’s ‘skeptical’ of the official narrative.

  

  The statement, made in a pre-recorded segment that featured questions for the erstwhile first daughter, Clinton was asked to respond to a query about “vaccine hesitancy” and what can be done to encourage wider vaccine adoption.

  Clinton chose to opine about limiting freedom of speech and cracking down on social media posts, but didn’t touch the issue of access and the ongoing debate about waiving IP protections for COVID-19 vaccines, something the White House recently said it would support, even as much of the developed world opposes the plan (even if the EU signaled that it’s open to discuss it).

  “I personally very strongly believe there has to be more intensive and intentional and coordinated global regulation of the content on social media platforms,” she said.

  “We know that the most popular video across all of Latin America for the last few weeks that now has tens of millions of views is just an anti-vax, anti-science screed that YouTube has just refused to take down.”

  Clinton added that anti-vaccine content created in the US “flourishes” acround the world due to social media like YouTube and Facebook.

  “We know that – because I have tried – that appealing to the leadership of these companies to do the right thing has just not worked, and so we need regulation.”

  Clinton said that the Clinton Foundation has been doing what it can to convince the “vaccine hesitant” and the “vaccine refusers” to accept doses of the COVID-19 vaccines. She believes it is important to differentiate between people who are “hesitant” and those in the “refusal group.” The “hesitant” have questions that she can answer, for instance regarding the speed at which the vaccines were developed, their ingredients, and “conspiracies about microchips.”

  Recently, those who have questioned aspects of the COVID-19 rollout in the US (most notably, Joe Rogan, who was recently forced to apologize for vaccine-skeptic musings on his show), have been attacked by a growing chorus of critics including the mainstream press while being de-platformed by everyone from Facebook to PayPal.

  If Clinton wants to start setting standards for what content should be banned on social media, she should probably start by being more specific about what constitute’s being “anti vax”. For example, are the Norwegian health officials who recommended rejecting both the AstraZeneca and J&J jabs over safety concerns “anti vaxx”? How about the other European public health officials who came to similar conclusions?

  And what about the CDC, with its increasingly byzantine guidelines about when and where masks are appropriate, what types of precautions must still be taken by those who have been “fully vaxxed” and whether or not Americans can expect to receive a booster dose.

  Of course, if Clinton wants to improve adoption rates for COVID-19 vaccines, maybe she should focus on broadening access in the developing world.

  Tyler Durden
  Mon, 05/10/2021 – 22:30

• US Already Planning How To "Choke" Chinese Submarines In Case Of Conflict
  US Already Planning How To “Choke” Chinese Submarines In Case Of Conflict

  A hugely significant weakness and set-back for the Chinese Navy and particularly its submarine capability was featured in recent Nikkei analysis, which found that its coastal system already has geography working against it, while at the same time giving Japan and Taiwan a significant edge.

  “When you look at China’s submarine bases, every single one of them has a fair bit of shallow water that their submarines have to transit through in order to get to deep water,” former US Navy submariner Tom Shugart explained to Nikkei Asia.

  

  A key issue is that submarines are much easier for rival nations to search out and track as they traverse shallow water, while in deep sea waters identity and defensive action against subs becomes extremely difficult. 

  What’s more is that US allies Japan and Taiwan are much less constrained by these “chokepoints” which are more characteristic of China’s shallower coastal waters. This gives the Japanese and Taiwanese navies the ability to deep dive a submarine fast, and quickly drop off their east coasts. 

  “A fast take a look at Google Earth reveals that China’s coast is surrounded by mild blue — which displays shallow seas — in distinction to the darkish blue deep waters that instantly drop off from the east coasts of Taiwan and Japan,” Nikkei observes. 

  

  And another defense expert was cited on what this means for China and more importantly for Pentagon planning as follows:

  “For them to move from China’s near seas to the open ocean, they’re going to have to transit through different chokepoints and straits in the island chains,” mentioned Shugart, an adjunct senior fellow on the Center for a New American Security assume tank.

  “That will provide opportunities for an adversary — the U.S. and our allies’ submarine forces — to monitor more closely and try to intercept them if we were involved in a conflict, or in the run-up to a conflict.”

  The US Department of Defense as well as closely affiliated think tank Rand Corp. is said to be studying “chokepoint management” in the region, given that any future potential US and allies conflict with China in the East and South China seas would put the US side at a distinct advantage when it comes to submarine warfare. 

  US Defense Defense Secretary Lloyd Austin recently signaled that Japan and other regional allies will be essential in establishing ‘integrated deterrence’ against China based on deeper collaboration.

  Map of South China Sea and Beijing’s expansive claims…

  

  The rest of the full Nikkei Asia analysis can be found here.

  Tyler Durden
  Mon, 05/10/2021 – 22:10

• Egypt Reduces Compensation Fine Against Ever Given By $300 Million
  Egypt Reduces Compensation Fine Against Ever Given By $300 Million

  Egypt’s Suez Canal Authority (SCA) offered to drop $300 million from its compensation claims against the owners of the Ever Given containership, according to Egypt Today. 

  The Panama-flagged Ever Given containership, owned by Japan’s Shoei Kisen Kaisha, blocked the Suez Canal for six days in late March. SCA initially requested $916 million in damages for the blockage and continues to impound the ship 30 miles up the channel in the Great Bitter Lake. 

  Here’s the current location of the containership as of 0645 ET.

  

  The reduction of compensation claims was announced by the SCA Chairperson Admiral Osama Rabie on Friday. He told the MBC Masr channel that Egypt would continue to impound the vessel until the fine is paid. We’ve noted the court battle between SCA and the vessel owners could be a long-drawn-out process. 

  Egyptian business tycoon Naguib Sawiris tweeted that SCA’s fine is “exaggerated and unrealistic,” stating it’s not a good image for the country. 

  

  There have been instances where commercial vessels involved in international disputes take months or even years to resolve. There’s still no timeline when Ever Given’s owners will pay the fine, but the prolonged legal battle is not good luck for SCA. 

  Tyler Durden
  Mon, 05/10/2021 – 21:50

• 71% Of Eligible Gen-Zers Don't Qualify For Military Due To Obesity, Criminal Records And Other Reasons
  71% Of Eligible Gen-Zers Don’t Qualify For Military Due To Obesity, Criminal Records And Other Reasons

  Bloomberg is out with a Monday report chronicling the sad state of affairs the US military has found itself in – notably trying to lure eligible recruits from Generation Z with a cartoon series dubbed “The Calling,” which will run on YouTube during May and June.

  As Bloomberg notes, “The Army—the U.S. military’s largest service—faces a complex set of problems: the eligible recruiting pool into all military services is small; and the newest generation of prospects, Gen Z, has had almost no contact or knowledge of the military, which has largely fought wars abroad since 2001. The Gen Z cohort grew up with technology, the internet, and social media.”

  The videos feature Emma, the self-proclaimed spoiled kid; David, the Hawaiian kid who at first didn’t let himself dream about becoming a pilot; Rickie, who grew up in a religious Haitian family in Florida; Janeen, a singer performing on cruise ships who joined the Reserves with the help of her Vietnam-veteran father; and Jennifer, born to first-generation Dominican immigrants, who worked long hours to make ends meet. -Bloomberg

  

  It gets worse.

  According to the report, almost 71% of those aged 17 to 24 – roughly 24 million out of 34 million people – are ineligible to join the military because of “obesity, lack of high school diploma, or a criminal record,“ according to Pentagon data.

  

  In order to lure the eligible Gen-Z’ers, the Army will be spending $425 million on marketing, with the goal of recruiting 60,000 to 70,000 active-duty soldiers, along with 40,000-45,000 National Guardsmen, and 13,000 to 17,000 members of the reserve. To do this, prospective recruits will be served content on YouTube via 15-second trailer. If a person watches at least 10 seconds of the ad, they will see a two-to-three minute episode of the recruiting cartoon, followed by an invitation to hop over to the Army’s website.

  “Gen Z flips through social media like it is an Olympic sport, and in order to get them to stop their thumbs for a few seconds, you’ve got to surprise them,” said Maj. Gen. Alex Fink, the Army’s chief of enterprise marketing. “The Calling has got a much more different look and feel than anything else than not only the Army has done—but nobody in the military has done something like this.”

  America’s foreign adversaries must be laughing their asses off.

  Only 29% of Generation Z eligible for military service because of obesity, lack of high school diploma, or a criminal record: Pentagon pic.twitter.com/BZHV9xnoG0

  — zerohedge (@zerohedge) May 10, 2021

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  Tyler Durden
  Mon, 05/10/2021 – 21:44

• What Was Behind Friday's "Literally Shocking" Payrolls Miss
  What Was Behind Friday’s “Literally Shocking” Payrolls Miss

  By Steve Englander, head global G10 FX research at Standard Chartered bank

  Summary:

  • We see sampling issues and child-care concerns as the most likely drivers of the NFP weakness
  • We are skeptical of the work disincentives explanation as the number of UI benefit recipients and of long-term unemployed dropped sharply
  • Seasonality was normal, so this does not seem to have been a major issue
  • We doubt the Fed will change its stance, even if an abnormal May bounce offsets the April shortfall

  Work disincentives likely a future issue, but not in April

  There is a lot of discussion on the big forecast miss of April non-farm payrolls (NFP). The consensus was for around 1mn jobs, our forecast was 1.5mn and the outcome was 266,000 (Bloomberg even called it “literally shocking data“). Against much commentary in recent days, we doubt that the generosity of unemployment insurance (UI) benefits played an important role in April, but we do not underestimate its future impact. We suspect sampling issues in the survey were the main source of the miss but find evidence that child-care issues played an important but secondary role. The run-up in average hourly earnings seems abrupt but is consistent with anecdotal reports of labor shortages.

  We see the main takeaway for markets as USD weakness, accompanied by an upward drift in breakevens and commodity prices. Manufacturing wages lagged other sectors but were still up 0.6%. Labor shortages and wage growth in sectors open to competition add up to lost competitiveness, absent USD weakness. If disincentives to work grow in importance there will likely be added depreciation pressure. We think investors may be uncertain on how literally to take the disappointing NFP outcome but see the cost pressures as persistent. The consensus forecast for April core CPI is 0.3% m/m, the first time the consensus has been above 0.2% in the 21st century!

  

  April disincentive effect was probably exaggerated

  Many analysts have cited the potential impact on the labor supply of generous unemployment benefits. However, if these disincentives to work were the driver, we probably would not have seen the number of those receiving benefits drop as sharply as they did in March and April (Figure 2). It is hard to believe that NFP are capturing an unemployment effect invisible in claims and UI expenditure data. In addition, in the household survey the number of long-term unemployed continued to fall, while the number of those unemployed five weeks or less rose. We would expect the disincentives to show in the long-term unemployed hanging onto benefits.

  A separate Bureau of Labor Statistics survey of the impact of COVID-19 indicates that 1.7mn fewer workers were unable to work in April than in March because their employers closed or lost business due to COVID-19. While it is hard to link this survey directly to the Current Employment Survey from which NFP are derived, it does seem as if workers are going back to work once COVID-19 constraints are removed. We dismiss the supply-side impact in April because the data do not support it, but see risk that it becomes a bigger factor down the road.

  Tentative evidence that chid-care constraints matter

  Employment in the BLS household survey increased 326,000, but employment of women dropped 8,000. Only women aged 16-19 years showed an appreciable employment increase. This is consistent with the possibility that child-care responsibilities may have limited women’s ability to accept jobs. The drop from March to April in the category ‘Did not look for work in the last 4 weeks because of the coronavirus pandemic’ was steeper for men than for women and steeper for those without children under 18 than for those with; but the differences were not big enough to explain the shortfall in job gains.

  What makes this driver tentative is that women’s job gains over the past year have exceeded men’s. It is possible that child-care constraints increased in April but we are not sure why this would have happened as reopening extended.

  Note also that even had women’s employment gone up as much as men’s, the outcome would still be disappointing (we assume that men’s ability to accept employment was far less constrained).

  
  Seasonality was typical

  Non-seasonally-adjusted NFP were up 1.089mn, but the seasonal adjustment reduced the gains to 266,000. At first glance this looks like an aggressive seasonal adjustment, but in fact this is pretty typical for the pre-COVID-19 period.

  

  The non-seasonally adjusted April NFP average over 2015-19 was 1.1mn jobs that the seasonal adjustment reduced to 215,000. For the seasonal factor to be relevant there would have to be an argument that seasonal effects were distorted; for example, that seasonal layoffs in Q1 were less than normal, so April rehiring was similarly less than normal. We do not see these as easy arguments to make.

  Sampling error

  We put forward sampling error as an explanation with caution, as the temptation to resort to sampling error after a big forecasting miss is significant. We see three arguments for considering sampling error seriously:

  • The supplementary BLS shows continuous easing of COVID-constraints on working. For example the number of people teleworking dropped by almost four million from March to April (Figure 5). This drop cannot be mapped directly into NFP gains but indicates improving conditions. Almost by definition, the ramping up and easing of COVID-19 related constraints should not be seasonally adjusted away.
  • The BLS birth and death model that adjusts for firms (re-)opening and shutting down may be particularly imprecise under current circumstances. The BLS has adjusted its estimation procedures, but it is unclear how much their revised adjustment captures.
  • Most other labor-market indicators were showing robust conditions. There is no direct link between the BLS surveys and these other indicators, but the lackluster BLS releases are at odds with the ISM, other surveys and other labor-market indicators.

  

  Tyler Durden
  Mon, 05/10/2021 – 21:30

• "Gas Run Has Begun" – Fuel Stations Run Dry Amid Hacked Pipeline
  “Gas Run Has Begun” – Fuel Stations Run Dry Amid Hacked Pipeline

  Gas shortages are being reported in the Southeast of the US amid the recent cybersecurity attack that temporarily shut down one of the largest pipelines in the US.

  Colonial Pipeline Co. Chief Executive Officer Joseph Blount said the company was in the process of restoring its systems but wouldn’t resume fuel shipments until the ransomware had been removed, according to Bloomberg. 

  

  At the moment, Colonial Pipeline is manually operating a segment of pipeline between North Carolina to Maryland and expects a complete system restore by the weekend. However, gas shortages are already being reported across North Carolina to Florida to Alabama. 

  On Monday, North Carolina Governor Roy Cooper signed an Executive Order declaring a state of emergency, temporarily suspending motor vehicle fuel regulations to ensure adequate fuel supply supplies throughout the state.

  WLOS’ Caitlyn Penter reported gas shortages in North Carolina. 

  This gas station in Robbinsville is all out of gas. Clerk said manager told her it could be five days before they have gas again. Says phone has been ringing off the hook of people calling around to find gas @WLOS_13 pic.twitter.com/SCcwmb1Pc0

  — Caitlyn Penter (@CaitlynWLOS) May 10, 2021

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  Penter said long gas lines were developing. 

  This is the gas station across the street. Long line for gas. @WLOS_13 pic.twitter.com/mxaX7QU9a0

  — Caitlyn Penter (@CaitlynWLOS) May 10, 2021

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  WEAR-TV’s Renee Beninate shows that one gas station in Northwest Florida was selling regular gas for $4.29/gallon.

  SKY HIGH GAS PRICES: We’ve received calls into the @weartv newsroom about this #gas station in #EscambiaCounty selling regular gas for $4.29/gallon. Within a minute of our news car showing up, it was dropped to $3.29. Check it out 👇🏼 Are you paying more at the pump? #GasShortage pic.twitter.com/ghyAnQO7f6

  — Renee Beninate (@reneebeninate) May 10, 2021

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  More people in Florida panic buying fuel for $4.50/gallon. 

  Next week people in Florida are going to bitch that fuel is $4.50 a gallon. You’ll be able to thank the panic buyers of today for the high fuel prices next week. pic.twitter.com/XBXfi7TjAH

  — 𝐆𝐫𝐞𝐠 𝐓𝐢𝐬𝐡 📻 Real Talk 93.3 WVFT (@Greg_Tish) May 10, 2021

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  In Fitzgerald, Georgia, one Twitter user shows long gas lines at an enmarket gas station. 

  #Gasmegetton #FitzgeraldGa #FolksPanic This is exactly why it’s a gas shortage pic.twitter.com/NpGdCslJDK

  — IDFree (@indeefree) May 10, 2021

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  One South Carolina gas station was out of unleaded and plus. 

  

  Someone in Myrtle Beach panic hoarded gas. 

  

  People are getting worried about the shortage. 

  Need an idea for what to do if gas becomes too high to fill up lawnmowers or if there’s a shortage?

  Ronnie Miller from Johnson City has an idea! pic.twitter.com/yS2T70Wya1

  — Anslee Daniel WJHL (@Anslee_WJHL) May 11, 2021

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  A massive line of people waiting for fuel in Asheville, North Carolina.

  Video coming out of Asheville, North Carolina show the fuel shortage in effect.

  Some gas stations are completely out of supply, while others have lineups. pic.twitter.com/7xrSoPA99G

  — Marie Oakes (@TheMarieOakes) May 11, 2021

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  People waiting to fuel up at one gas station in Plymouth, North Carolina.

  Gas stations are running out, Plymouth NC lines are around the building. 4 stations are out. #gasshortage pic.twitter.com/TcIwRpCsBG

  — Fly on the wall (@Huge2na) May 11, 2021

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  Not sure where, but the run has begun. 

  Update https://t.co/HPKrGl8l7T pic.twitter.com/MZEZhBbvYF

  — SixPackSpeak (@sixpackspeak) May 11, 2021

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  Gas shortage in Atlanta. 

  Go get gas if you need to. #gasshortage pic.twitter.com/xS17MnUplb

  — Joche’ (@missexclusive4) May 11, 2021

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  Gas lines in Clinton, North Carolina. 

  

  WSOC’s Greg Suskin reports a gas station in South Carolina has entirely run out of gas, except for diesel. 

  This is crazy. I stopped for gas just now having no idea what was happening. It’s out. People here told me they’d been to other stations and found the same. pic.twitter.com/7LDVdUXPo4

  — Greg Suskin (@GSuskinWSOC9) May 11, 2021

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  Shortages now spreading into Tennessee. 

  At a Racetrack in Cleveland TN… out of gas #gasshortage pic.twitter.com/kKSYjhSpaz

  — anne finch (@thatdamnanne) May 11, 2021

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  According to Google Search Trends, people started panic searching “gas shortage” around 1300 ET in the Southeast.

  

  So far, nationwide gas prices have surged six cents this week to $2.96 – the highest for this time of year since 2014. If the national average soars to $2.99 or higher this week, it will be the highest since November 2014… and right before the start of summer driving season.

  

  AAA forecasts gas prices are soaring because of the shutdown of the Colonial Pipeline, which delivers about 45% of all fuel to the East Coast. 

  “This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee, and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week,” said Jeanette McGee, AAA spokesperson. “These states may see prices increase three to seven cents this week.”

  This is beginning to look like the 1970s gas shortage. If the panic just started hours ago – just wait until tomorrow. People will freak. 

  Tyler Durden
  Mon, 05/10/2021 – 21:09

• Hedge Fund Gross Leverage Hits All Time High As HFs Furiously Short Tech Stocks
  Hedge Fund Gross Leverage Hits All Time High As HFs Furiously Short Tech Stocks

  Hedge funds had another rough week according to Goldman’s Prime Brokerage, with the GS Equity Fundamental L/S  Performance Estimate falling -1.68% between 4/30 and 5/6 (vs MSCI World TR -0.33%), driven by alpha of -1.11% – the worst weekly alpha in two months – and to a lesser extent beta of -0.57% (from market exposure and the market sensitivity factor combined). As a result, global fundamental equity L/S hedge funds lost almost two-thirds of their YTD gains in just the past week, bringing their total YTD return to just 0.97% in what is setting up as another dismal year for the 2 and 20 crowd.

  

  What is remarkable is just how sensitive to overall market beta the hedge fund space has become, and there is a reason for that: according to Goldman Prime, overall book Gross leverage rose +1.7 pts to 247.1%, the highest on record, while Net leverage fell -0.9 pts to 88.2% (not quite an all time high, but still 87th percentile).

  

  Looking at the composition of hedge fund purchases, the overall GS Prime book was modestly net bought again in the past week (+0.15 SDs), driven by risk-on flows as long buys outpaced short sales. Specifically, single Names were net bought while Macro Products (Index and ETF combined) were net sold. North America and to a lesser extent Europe were net bought driven by long buys, while DM Asia and EM Asia were net sold driven by short sales. 8 of 11 global sectors were net bought led in $ terms by Consumer Disc, Health Care, Staples and Real Estate, while Info Tech, Materials, and Financials were net sold.

  Meanwhile, continuing the trend first observed last week when we noted that hedge funds shorted tech shares for 9 of the previous 10 days, Goldman notes that Info Tech saw the largest net selling in nine months as managers reduced exposure for a third straight week. And in a surprise reversal to months of bullishness on IT, GS Prime points out that hedge funds are currently Underweight Info Tech stocks by -1.4% vs. the MSCI World, the lowest level since last November and in the 3rd percentile vs. the past five years.

  Some more details from the Goldman reports:

  • Info Tech, the worst performing sector this week, was also by far the most net sold sector on the GS Prime book driven by short sales outpacing long buys 7 to 1.
  • Info Tech stocks were net sold for a third straight week and saw the largest week/week $ net selling since last August (-1.6 SDs). Net trading flow diverged on a subsector level – Semis & Semi Equip, Software, and Electronic Equip were the most net sold, while Comm Equip and IT Services were the most net bought.
  • Hedge funds are currently U/W Info Tech stocks by -1.4% vs. the MSCI World, the lowest level since last November and in the 3rd percentile vs. the past five years.
  • From an industry group standpoint, hedge funds are still O/W Software & Svcs by +4.7% (28th percentile) and U/W Semis & Semi Equip and Tech Hardware by -1.6% (13th percentile) and -4.3% (18th percentile), respectively

  

  And while hedge funds shorted tech, the Goldman US Consumer Discretionary sector saw the largest net buying in three months driven by E-Commerce stocks. As a result, the GS Prime book is now O/W US Consumer Discretionary by +3.3% vs. the S&P 500, which is in the 9th percentile vs. the past year and in the 50th percentile vs. the past five years.

  • In $ terms, Consumer Discretionary was the most net bought US sector on the GS Prime book this week, driven by risk-on flows with long buys outpacing short sales 4 to 1.
  • The sector’s aggregate long/short ratio (MV) on the GS Prime book ended the week at 2.53, which is in the 2nd percentile vs. the past year and in the 77th percentile vs. the past five years. The GS Prime book is now O/W US Consumer Discretionary stocks by +3.3% vs. the S&P 500, which is in the 9th percentile vs. the past year and in the 50th percentile vs. the past five years.

  

  Tyler Durden
  Mon, 05/10/2021 – 20:50

• Wildfires Rage In Arizona; Southwestern US Faces Megadrought 
  Wildfires Rage In Arizona; Southwestern US Faces Megadrought 

  The US Department of Agriculture (USDA) has warned against a megadrought approaching dangerous levels in the southwestern US. Wildfire conditions have been ripe across the region as Red Flag Warnings have been sprouting up from California to Texas. 

  Arid conditions in Arizona appear to have sparked a duo of wildfires burning in the state, forcing thousands of folks to flee as firefighters struggle to contain the blazes. 

  One of the fires rages just south of Prescott National Forest, located in north-central Arizona. Mandatory evacuations orders forced thousands from their homes in Minnehaha, Fort Misery, and Horsethief Basin, while Crown King was placed on alert Sunday. The fire has been dubbed the Tussock Fire.

  PHD- Update: #TussockFire near Crown King was mapped at 2,448 ac and has reached Prescott NF. Due to lack of moisture, hot, dry and windy conditions and rugged terrain, a Type 1 IMT has been ordered and will take over fire command this evening.
  (Photo:BLM Weaver Mtn)
  #AZFire pic.twitter.com/KuyBCZbCEp

  — BLM Arizona Fire (@BLMAZFire) May 9, 2021

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  “There is significant danger to you, gather necessary items and go,” read a Facebook post operated by the Arizona Bureau of Land Management (BLM). The Facebook page continued to say the Tussock Fire is “approximately 3,500 acres; 0% containment.” 

  The second wildfire is approximately 2,560 acres and stood at 35% contained as of Sunday evening. The fire is called Copper Canyon Fire and is burning 3 miles northeast of Globe in Gila County, located in the state’s central part. 

  #CopperCanyonFire NE of #Globe – 2,652 acres & 35% contained. Add’l growth due to Saturday night’s burning ops as part of suppression efforts. NE side active Sunday as fire consumed unburned island of fuel w/n perimeter of fire. US 60 remains closed in area. #AZFire #AZForestry pic.twitter.com/lmKiDZClUv

  — AZ State Forestry (@azstateforestry) May 10, 2021

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  The US Drought Monitor as of last week shows more than 40% of the country is in drought coverage. Most of the “extreme” to “exceptional” drought is in the southwestern US. 

  “There have only been four times in the history of the drought monitor that we have seen more than 40% US drought coverage as we come into early May,” said USDA Meteorologist Brad Rippey. “The current US drought coverage is 46.6% of the lower 48 states in drought. That is a 2.6% increase from what we saw five weeks ago.”

  

  Fears of another 1930s Great Depression-style drought are quickly materializing in the southwestern US. 

  Utah and Nevada recorded their driest years in more than 126 years in 2020, while Arizona and Colorado had their second driest and New Mexico its fourth. The Southwest, plagued with “severe,” “extreme,” and “exceptional” drought conditions, suggests similarities to the Great Depression’s Dust Bowl of the 1930s (read: “Return Of The Dust Bowl? The “Megadrought” In The Southwest Is Really Starting To Escalate”). 

  Besides escalating wildfires and water shortages, farmers in the western half of the country are frightened of a significant agricultural disaster this growing season as the drought rages. The exceptional dryness could result in crop failures that would ultimately send agricultural prices even higher. So much for that “transitory” inflation, the Federal Reserve continues to squawk about… 

  

  Now Dust Bowl conditions have returned, wildfires begin to break out, and farmers are panicking about crop failures. But don’t worry, the Federal Reserve will just print more money in the name of climate change. 

  Tyler Durden
  Mon, 05/10/2021 – 20:30

• Labor Shortage Sets Off "Inflationary Time Bomb" McDonalds Franchises Warn, Fearing Big Mac Price Hike
  Labor Shortage Sets Off “Inflationary Time Bomb” McDonalds Franchises Warn, Fearing Big Mac Price Hike

  An independent group of McDonald’s franchisees warns higher wages, signing bonuses, paid interviews are no longer working to attract new workers as generous unemployment benefits worsen the labor shortage, according to Bussiness Insider. 

  The National Owners Association (NOA), an independent, self-funded advocacy group of McDonald’s franchisees, sent a letter to its members Sunday criticizing “hiring challenges on the “perverse effects of the current unemployment benefits.” 

  The letter pointed to last week’s massive April payrolls employment miss, which consensus expected a whopping 1 million number, and some forecasters calling as high as 2+ million, were shocked with a 266k print. 

  “What’s going on here? When people can make more staying at home than going to work, they will stay at home,” the letter read, which was obtained by Insider. “It’s that simple. We don’t blame them. We fault the system.”

  The letter went on to say, “when higher wages, signing bonuses, paid interviews no longer work, we have a problem.”  

  Neema Ardebili, the vice president of global franchise and strategic partnerships at ADP, told Insider that the working-poor collecting stimmy checks are making more money sitting on the couch than actually working. 

  “Natural human behavior is to choose to receive more money while staying at home, than working for a highly demanding job — especially with the amount of stress that is being put on employees right now,” Ardebili said. 

  NOA Board said franchisees must increase pay and benefits to attract workers. These additional labor costs will be passed onto the consumer in the form of higher Big Mac prices. 

  “Inflation is the flip side to all of these changes,” the letter reads. “Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive.”

  “Our government officials need to know what is happening out in the real world,” the letter continues. “They need to know what they are creating; an inflationary time bomb.” 

  Meanwhile, White House press secretary, Jen Psaki, is utterly oblivious to the unemployment benefits disincentivizing people from wanting to return to work. 

  Peter Doocy battles Jen Psaki over whether the Biden administration’s massive unemployment benefits is disincentivizing people from wanting to return to work.

  Psaki disagrees, citing the lack of “livable, working wage” in jobs, schools being closed, and expensive child care. pic.twitter.com/vOEomgMwC9

  — Curtis Houck (@CurtisHouck) May 10, 2021

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  And now, President Biden is out Monday afternoon saying, “anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.” It sounds like Biden is on damage control for his failed progressive policies. 

  BREAKING: President Biden says “anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.” pic.twitter.com/yVXcUdzmnc

  — Breaking911 (@Breaking911) May 10, 2021

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  What’s clear is that the White House will never admit their progressive unemployment policies, borderline universal basic income, have been a complete disaster as it has prevented a labor market recovery.

  Now the Chamber of Commerce has urged an end to Biden’s pandemic handouts as “paying people not to work is dampening what should be a stronger jobs market and is hurting the overall recovery”…

  … or listen to NFIB chief economist Bill Dunkelberg who said that “small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force”…

  … or listen to restaurant legend Wolfgang Puck who said, “I don’t think we should pay people to stay home and not work if there are jobs available.”

  To attract workers, low-income workers, mainly under the $40k per year mark, employers must offer higher wages and other benefits equal or greater to what the government is paying, thus creating soaring labor costs for labor-intensive fast-food companies that will pass along the costs to consumers. 

  

  The Federal Reserve’s narrative that inflation is “transitory” is a load of crap. Prepare for much higher costs at fast-food joints. 

  Bank of America recently warned clients: “Buckle up! Inflation is here.” 

  Fast-food workers might get their wage increases in the short run, but in the longer run, this will force companies to quickly adopt automation and artificial intelligence to lower labor costs, displacing millions of workers this decade. 

  Tyler Durden
  Mon, 05/10/2021 – 20:10

• Has The Mainstream Media Finally Turned Against Bill Gates?
  Has The Mainstream Media Finally Turned Against Bill Gates?

  Not long after we pointed out a report from the Daily Beast which traced the tensions in the marriage of Bill and Melinda Gates to Bill’s relationship with convicted pedophile Jeffrey Epstein, the Wall Street Journal has followed up with more reporting that confirms that Melinda Gates started consulting divorce attorneys as far back as 2019, before the pandemic thrust her husband back into the global spotlight as the world’s de facto vaccine czar.

  Documents obtained by WSJ show the couple negotiated their divorce throughout the pandemic.

  Ms. Gates consulted with divorce lawyers roughly two years before she filed for divorce from Mr. Gates, saying their marriage was “irretrievably broken,” according to people familiar with the matter and documents reviewed by The Wall Street Journal.

  As the Daily Beast also reported, tensions in their marriage can be traced back to a New York Times report claiming that Gates had met with Epstein several times, and that he had once stayed late into the night at Epstein’s Manhattan townhouse. Their meetings, according to Gates’ people, reportedly focused on issues of philanthropy. The pair first announced their split a week ago, and since then, the world has been waiting to learn more about how they plan to split their $130 billion-plus fortune.

  But what’s almost more notable than the details report by WSJ and the Daily Beast, is the fact that the MSM seems to be jumping on the story that Bill Gates’ relationship with Jeffrey Epstein directly led to the dissolution of his marriage. 

  Pretty interesting that EVERY major outlet is covering this story. https://t.co/w64Ew0dFtE

  — David Reaboi (@davereaboi) May 10, 2021

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  This is a big deal because, as we reported more than a year ago, Bill Gates and the Gates Foundation have built up one of the world’s most formidable media-manipulation machines to help silence Gates’s growing chorus of critics.

  Here’s a snippet from a Columbia Journalism Review story on how Gates manipulates the press:

  Gatess generosity appears to have helped foster an increasingly friendly media environment for the worlds most visible charity. Twenty years ago, journalists scrutinized Bill Gatess initial foray into philanthropy as a vehicle to enrich his software company, or a PR exercise to salvage his battered reputation following Microsofts bruising antitrust battle with the Department of Justice. Today, the foundation is most often the subject of soft profiles and glowing editorials describing its good works.

  During the pandemic, news outlets have widely looked to Bill Gates as a public health expert on covideven though Gates has no medical training and is not a public official. PolitiFact and USA Today (run by the Poynter Institute and Gannett, respectivelyboth of which have received funds from the Gates Foundation) have even used their fact-checking platforms to defend Gates from false conspiracy theories and misinformation, like the idea that the foundation has financial investments in companies developing covid vaccines and therapies. In fact, the foundations website and most recent tax forms clearly show investments in such companies, including Gilead and CureVac.

  In the same way that the news media has given Gates an outsize voice in the pandemic, the foundation has long used its charitable giving to shape the public discourse on everything from global health to education to agriculturea level of influence that has landed Bill Gates on Forbess list of the most powerful people in the world. The Gates Foundation can point to important charitable accomplishments over the past two decadeslike helping drive down polio and putting new funds into fighting malariabut even these efforts have drawn expert detractors who say that Gates may actually be introducing harm, or distracting us from more important, lifesaving public health projects.

  As we have reported, Gates’ ties to Epstein are much deeper than a simple prearranged meeting or two on the subject of philanthropy. The Daily Mail once reported that Gates was a guest aboard Epstein’s plane.

  

  When confronted about this, a representative for Gates said he wasn’t aware the plane belonged to Epstein!

  

  Meanwhile, employees of the Gates foundation also visited Epstein’s mansion on multiple occasions, while Epstein also “spoke with the Bill and Melinda Gates Foundation and JPMorgan Chase about a proposed multibillion-dollar charitable fund — an arrangement that had the potential to generate enormous fees for Mr. Epstein,” according to the Times.

  

  Two of Gates’ closest advisors developed close relationships with Epstein, and later introduced him to Gates.

  Gates once said in an email that he found Epstein’s “lifestyle” to be “intriguing”, though he immediately noted that it wouldn’t suit him.

  With all this preamble once again coming out in the press, we can’t help but wonder: is a Bill Gates accuser about to step forward?

  Tyler Durden
  Mon, 05/10/2021 – 19:55

• Free Speech Inc. – How Democrats Have Found A New But Shaky Faith In Corporate Speech
  Free Speech Inc. – How Democrats Have Found A New But Shaky Faith In Corporate Speech

  Authored by Jonathan Turley,

  Below is an updated version of my column in the Hill on Facebook’s decision to uphold the ban on former president Donald Trump. Notably, this weekend, Twitter took it upon itself to add a gratuitous response to an observation made by Donald Trump Jr. after he tweeted “Biden isn’t the next FDR [Franklin Delano Roosevelt] he’s the next Jimmy Carter.” Twitter took it upon itself to say that many are “confused” by the remark since Carter was a great humanitarian and noble prize winner. It was a telling moment. These companies now act as either censors or officious intermeddlers when it comes to comments made on the platforms. They view themselves as a party to any postings and that viewpoints must be corrected or clarified to advance the corporate position.

  

  Here is the column:

  After Facebook’s oversight board this week upheld the social media giant’s continuing ban of former President Trump, the response of Rep. Ilhan Omar (D-Minn.) captured the visceral joy of many on the left: She posted a series of laughing emojis.

  Welcome to Free Speech, Inc.: the Democratic incorporation of free speech built around the a presumption of corporate censorship (for some).

  Of course, Democrats insist they are not attacking free speech, just combating “disinformation.” After all, they say, private companies have every right to control speech — unless you are, say, a bakery opposed to preparing a cake for a same-sex wedding, or a company contributing to political causes. The current mantra defending Facebook’s corporate speech rights seems strikingly out of sync with years of Democrats and political activists demanding the curtailment of such rights.

  When Masterpiece Cakeshop in Colorado refused on religious grounds to make a cake for a same-sex wedding, Sen. Elizabeth Warren (D-Mass.) denounced the bakery’s claim of free speech: “It was never about a cake — it’s about making sure no one has a license to discriminate against LGBTQ+ Americans.” When the Supreme Court ruled in the Citizens United case that corporations have free speech rights to participate in politics, Warren was appalled. She has long rejected the notion that corporations have the constitutional rights like individuals: “Corporations are not people. People have hearts. They have kids. They get jobs. They get sick. They cry. They dance. They live. They love. And they die.”

  Notably, Warren felt that one company (Masterpiece Cakeshop) can be forced to speak while another corporation (Facebook) should be able to stop others from speaking.

  When Facebook barred Trump, Warren declared: 

  “I’m glad that Donald Trump is not going to be on Facebook. Suits me.”

  House Intelligence Committee Chair Adam Schiff (D-Calif.) also celebrated and added:

  “Facebook must ban him. Which is to say, forever.”

  When free speech concerns are raised over corporate censorship, Democrats often drop references to “free speech” violations and instead address “First Amendment” violations. Indeed, when Trump objected to the ban on Twitter as “banning free speech,” a host of media outlets ran stories like: “Fact Check: Did Twitter Violate President Trump’s First Amendment Rights?” Experts like Wayne State University law professor Jonathan Weinberg chimed in that, under the First Amendment, a company “gets to choose who it does business with and who it doesn’t.”

  Likewise, when questioned about the Board’s decision and its impact on free speech, board member and Stanford Law Professor Michael McConnell dismissed such concerns by insisting that the First Amendment does not apply to Facebook and “no judge in the country would rule” in favor of the former president.”

  The First Amendment is not the full or exclusive embodiment of free speech, however. It addresses just one of the dangers to free speech posed by government regulation. Many of us view free speech as a human right. Corporate censorship of social media clearly impacts free speech, and replacing Big Brother with a cadre of Little Brothers actually allows for far greater control of free expression.

  This is even more concerning when politicians openly pressure companies to increase censorship. In one hearing last year, Sen. Richard Blumenthal (D-Conn.) actually warned Big Tech CEOs that he and his colleagues were watching to be sure there was no “backsliding or retrenching” from “robust content modification.”

  Obviously, these politicians would insist that the Masterpiece Cakeshop case is about discrimination while the Facebook controversy is about disinformation. However, some of us have long viewed all of these controversies as about free speech. Indeed, taking a free speech approach avoids the hypocrisy on both sides.

  Under a free speech approach, cakeshop owners have a right to refuse to prepare cakes that offend their deep-felt values, including religious, political or social values. Thus, a Jewish cakeshop owner should be able to decline to make a “Mein Kampf” cake for a local skinhead group, a Black owner to decline to make a white supremacist-themed cake, or a gay baker to decline to make a cake with anti-LGBT slogans. While these bakers cannot discriminate in selling prepared cakes, the act of decorating a cake is a form of expression, and requiring such preparation is a form of compelled speech.

  In the same way, NFL teams have a free speech right to prevent kneeling or other political or social demonstrations by players during games, Citizen’s United has a right to support political causes — and, yes, Facebook has a right to censor speech on its platform.

  Free speech also allows the rest of us to oppose these businesses over their policies. We have a right to refuse to subsidize or support companies that engage in racial or content discrimination. Thus, with social media companies, Congress should not afford these companies legal immunity or other protections when they engage in censorship.

  These companies once were viewed as neutral platforms for people to exchange views — people who affirmatively “friend” or invite the views of others. If Big Tech wants to be treated like a telephone company, it must act like a telephone company. We wouldn’t tolerate AT&T interrupting calls to object to some misleading conversation, or cutting the line for those who misinform others.

  As a neutral platform for communications, telephone companies receive special legal and economic status under our laws. Yet, it sometimes seems Facebook wants to be treated like AT&T but act like the DNC.

  In defending Big Tech’s right to censor people, University of California at Irvine law professor Richard Hasen declared that “Twitter is a private company, and it is entitled to include or exclude people as it sees fit.” That is clearly true under the First Amendment. It also should be true of others who seek to speak (or not speak) as corporations, from bakeries to sports teams.

  Yet, when the Supreme Court sent back the Masterpiece Cakeshop case in 2018 for further proceedings, an irate House Speaker Nancy Pelosi (D-Calif.) declared: “Masterpiece Cakeshop is a commercial bakery open to the public, and such services clearly must be made available to the public on equal terms … No business or organization open to the public should hide their discriminatory practices behind the guise of religious liberty.” But Pelosi applauded when social media companies barred some members of the public based on viewpoint discrimination on subjects ranging from climate change to vaccines to elections.

  The difference, of course, is that Masterpiece Cakeshop was willing to sell cakes to anyone but refused to express viewpoints that conflict with the owners’ religious beliefs. Conversely, social media companies like Twitter and Facebook are barring individuals, including a world leader like Trump, entirely from their “shop.” And, taking it one step further, Facebook has declared it will even ban the “voice of Donald Trump.”

  Big Tech is allowed to be arbitrary and capricious in corporate censorship. However, our leaders should follow a principled approach to corporate speech that does not depend on what views are being silenced. Because Elizabeth Warren was right. This “never was about a cake” or a tweet or “likes” for that matter. It was always about free speech.

  Tyler Durden
  Mon, 05/10/2021 – 19:50

• 14% Of Americans Own Crypto: Here Is A Profile Of The Average HODLer
  14% Of Americans Own Crypto: Here Is A Profile Of The Average HODLer

  According to the latest just released report on the State of the Crypto Market from Gemini, 2020 which polled 3,000 U.S. adults, ages 18 to 65 with $40,000 or more in household income (survey respondents were polled from October 19-November 16, 2020, and included 921 self-identifying current cryptocurrency owners and 1,697 consumers who were interested in learning more about cryptocurrency), the exchange estimates that roughly 14% of the U.S. population owns cryptocurrency. This translates to 21.2 million U.S. adults who own cryptocurrency, and other studies estimate this number to be even higher. This number is expected to double in 2021.

  Gemini then set forth to profile who exactly is the average crypto holder. Here’s what it found:

  Crypto skews young, male and white: 74% of crypto holders are men, 77% of all crypto owners are under the age of 45, and 71% are white. The data shows that the “average” cryptocurrency owner is a 38-year-old male making approximately $111k a year.

  

  To be sure, not everyone is a HODLer: there are roughly 4.5 times more who are “cryptocurious.”

  The crypto-curious audience is defined as those who do not currently own cryptocurrency but indicate either wanting to learn more or planning to buy soon. This group is significant in size, comprising 63% of U.S. adults, and has the potential to disrupt what we think of as the “average” crypto holder.

  

  The most bullish case for crypto? Roughly 13% of U.S. adults plan to purchase cryptocurrency in the next 12 months. This adds up to approximately 19.3 million adults — which would nearly double the current crypto investor population. In taking a deeper look at the “crypto-curious” audience, we see some emerging trends that have the potential to change the profile of the average crypto holder.

  While just 26% of current crypto holders are women, there is potential for this to change significantly. Women account for more than half (53%) of those interested in getting into crypto soon, representing a major potential shift. The next wave of crypto buyers is also likely to be slightly older than current holders — with an average age of 44. They are also likely to have slightly less money to invest than those who are already crypto holders and are more likely to live in a small town or rural area than in an urban area, though it’s also worth noting that the crypto-curious audience remains largely white: 76% of the crypto-curious audience identifies as white or caucasian.

  Looking closer at the female breakdown of crypto-curious consumers, Gemini spots an interesting shift in age: 45% of current female crypto owners are under the age of 35, and just 4% are 55 or older. But among crypto-curious women, only about a quarter are under the age of 35, and a notable 25% are 55 or older. Women are not only poised to make up a larger portion of the next wave of crypto buyers, they’re also more likely to be women nearing retirement. This shift in gender, age, average income, and location indicates that crypto is starting to broaden its appeal away from an investment solely reserved for those with a large amount of assets to one that is more mainstream and accessible for the average person.

  Here is a full demographic breakdown of the current investor population vs the crypto curious:

  

  In looking at the survey results, it becomes clear that crypto awareness is spreading, and acceptance is becoming more and more mainstream; the survey revealed that there are many more people who are crypto curious than who are completely disinterested in crypto, which is promising for the future of crypto’s growth.

  Based on the percentage of respondents indicating that they plan to purchase crypto in the next 12 months, this could mean 19.3 million U.S. adults entering the crypto market very soon. And given what we know about the demographics of the crypto-curious audience, the profile of the average crypto holder could also soon be changing in a very welcome way. The future of crypto looks bright, and we are excited about the influx of a more diverse audience to continue to shape that future

  Going back to the survey, the next question tried to pintpoint what the average US adult knows about crypto. Not surprisingly, here it appears to mostly be all about bitcoin even though it is Ethereum that has become the most exciting token in recent weeks ( as we said it would). Some more details from the report:

  While the group of crypto-curious U.S. adults is growing, general knowledge about cryptocurrency seems to mirror what we hear in the news: Bitcoin is almost synonymous with crypto, but few have heard of other coins. The vast majority of owners or cryptocurious (95%) have heard of bitcoin, while little more than one-third have heard of Ethereum.

  Education appears to be central to converting crypto-curious consumers from simply interested in crypto to actual crypto holders. Over one-third (39%) of those who don’t yet own cryptocurrency consider themselves “somewhat or very” knowledgeable about  cryptocurrency. This indicates that consumers are attempting to learn before they dive in head first, but there’s still a significant opportunity for consumers to learn more: 60% of the crypto-curious identify as “not very” or “not at all” knowledgeable about cryptocurrency today. More than two-thirds of U.S. adults (77%) indicate they are open to learning more about digital assets, whether they already own cryptocurrency or not. As the current generation of crypto holders is well-educated — 90% identify as at least somewhat knowledgeable and 45% consider themselves extremely or very knowledgeable — this shows us that the potential “next  wave” of crypto buyers will continue to be savvy and well researched about crypto’s purpose and potential.

  

  What is perhaps most surprising, is that the level of reported knowledge shows the vast majority of crypto investors are taking the time to thoroughly understand this space before investing. They’re thoughtful and betting on real promise versus trying out something trendy for fun. The crypto curious audience is taking a similar approach: those who want or plan to buy soon appear to also take time to educate themselves on the industry first. It’s worth noting that these existing crypto holders aren’t just early adopters who have had years to immerse themselves in the space: 26% of current crypto owners first bought crypto within the past year. This indicates again that the market, as expected, is made up of people who take the time to understand and research before investing in crypto.

  

  Next, the survey looked at what crypto holders own, and how they trade.

  It found that more than a quarter (26%) of current owners first acquired crypto in the last year, and a full 68% purchased crypto within the last two years. This shows crypto is no longer a niche investment reserved for early-adopters. Widespread interest is growing, and growing fast.

  

  While new cryptocurrencies emerge nearly every day, bitcoin still reigns supreme as not only the coin most people have heard of, but also the coin most crypto holders own. Nearly 9 in 10 current crypto owners currently own or have owned bitcoin (87%), compared to ether at 36%, bitcoin cash at 22% and litecoin at 21%. Bitcoin also appears to have the most staying power: while 87% report they have at some point owned bitcoin, 84% still have it in their portfolio. By comparison, 21% of crypto investors have owned litecoin and only 15% still currently own it.

  * * *

  One final discovery – and perhaps the least surprising one for the notoriously illiquid space where the float is a tiny fraction of any given token – is that more than two-thirds of crypto investors are indeed HODLers,

  The large majority of current crypto owners say they buy and hold crypto for its long-term investment potential. More than two-thirds (69%) buy and hold, compared to the 36% who actively buy and sell as a means to achieve profits and the 27% who actively use it to make purchases on the internet.

  

  A look at the crypto-curious audience reveals a similar split: half of the crypto curious (54%) reported wanting to buy and hold crypto as a long-term investment, while 39% indicated they are interested in actively trading to make a profit.

  When it comes to trading activity, investors run the gamut: a quarter of crypto investors trade, buy or sell only a few times a year, while more than another quarter (27%) trade, buy, or sell at least several times a month. This indicates that there’s a mix of “buy and hold” strategists, crypto holders who continue to buy more, and those who experiment with regular trading to achieve short-term profits.

  Source

  Tyler Durden
  Mon, 05/10/2021 – 19:30

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• Spaniards Celebrate Curfew End With 'Freedom' Fiestas 
  Spaniards Celebrate Curfew End With ‘Freedom’ Fiestas 

  As the clock struck midnight in Spain, thousands of people poured into the city streets in the early hours of Sunday, celebrating the official end of the local coronavirus curfew. 

  

  The 11 p.m. curfew was lifted in 13 of the country’s 17 regions at midnight. Footage from the beaches of Barcelona to the streets of Madrid saw thousands of young people dancing, hugging, and chanting “freedom.”  

  As the clock struck midnight Barcelona residents poured into the street to celebrate the end of the local curfew. Spain ended a 6-month-long national state of alarm on Sunday following a decrease in virus cases and a boost in vaccinations. (AP Video/Renata Brito) pic.twitter.com/KadXj83d8m

  — Renata Brito (@RenataBritoAP) May 9, 2021

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

  Visca la meva gent de Barcelona. pic.twitter.com/CVABbffw40

  — Coronavirus (@CoronaVid19) May 8, 2021

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

  Madrid against curfew! pic.twitter.com/nEwXE34Osu

  — conspiracyguy (@conspiracyguy9) May 9, 2021

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

  After a strict stay-at-home order went into effect at the start of the virus pandemic in early 2020, the country’s second state of emergency kicked in last October. It granted people more freedoms but still, late-night curfews restricted social gatherings.

  Nationwide, there are 198 cases of COVID-19 per 100,000 population. Some regions are experiencing higher rates, like Navarra, which will maintain restrictions until the spread is controlled. 

  In Aragon, the cases stand around 297 per 100,000. Authorities are continuing the curfew in that region. In the Balearic Islands, where the infection rate is 59 per 100,000, the government will maintain the curfew.

  The highest infection rate is seen in Basque Country, with an infection rate of around 463 per 100,000. However, efforts to maintain the curfew there were scrapped by the Basque High Court on Friday.

  “I am a bit worried, although the most vulnerable people are already vaccinated, I think we should still be careful of the cases increasing again,” Natalia Pardo Lorente, a biomedical researcher at the Centre for Genomic Regulation in Barcelona, told CNN Sunday. “Even while the curfew was still active Friday, I saw large groups of people drinking in the Ciutadella, and it was after ten at night.

  “Is there really a need to be gathering in groups of 100 people or more in parks? Why is it not enough to meet your close friends and that’s it?” Lorente added.

  Spain has been hard hit by the pandemic. More than 3.5 million infections have been recorded, along with 78,000 deaths. Across Europe, Spain is the fourth-hardest hit country in Europe, behind France, the UK, and Italy.

  Tyler Durden
  Mon, 05/10/2021 – 02:45

• The Butterfly Effect Re-Setting The Global Paradigm
  The Butterfly Effect Re-Setting The Global Paradigm

  Authored by Alastair Crooke via The Strategic Culture Foundation,

  The shift of paradigm centred on the U.S. pivot away from West Asia naturally impacts on Iran’s JCPOA calculus…

  

  In chaos theory, the butterfly effect is the idea that small things can have non-linear impacts on a complex system. The concept is imagined with a butterfly flapping its wings, and though this, in itself, would be unlikely to cause a tornado, nonetheless small events can cause cascades of change within a complex system. And so to Europe, where Germany is changing. The Green Party is flapping its wings in the spatial void left by Merkel’s expected departure. And though the Party, some years ago, was almost wholly Corbinite (i.e. classic anti-establishment), today, beneath its liberal surface, the Green rhetoric is something different – It is fiercely North Atlanticist, pro-NATO and anti-Russian (even quasi neo-liberal).

  Today, the European political zeitgeist is changing. It is soaking up the Biden ‘we must join together to curb Chinese and Russian behaviours’ meme. Of course, this shift cannot all be laid at the door of the German Greens; nonetheless, they seem destined to emerge with a pivotal role in the polity of the pivotal EU state, as the Green emergence becomes somehow iconic of the butterfly wing effect.

  The language of a human rights ideology defined in a multitude of gender and diversity iterations has seized the Brussels discourse. Some might welcome this development in principle, viewing it as righting ancient injustices. However, it should be understood that it is rooted not so much in human compassion, but is firmly seated in power dynamics, and, what’s more, a particularly dangerous set of power dynamics.

  One the one hand, the ‘Biden agenda’ is primarily about ousting a deeply-rooted constituency of Americans (Red America) permanently from power.

  He says it explicitly.

  And on the other, as Blinken repeats and endlessly insists, the U.S.-shaped rules-based order must prevail in the world. Biden’s ‘progressive values’ are but the tool to mobilise politics to achieve these ends. (Biden in his long Senate career was not noted for being progressive.)

  The flapping of the German butterfly wing in Europe enables and facilitates Washington’s sought-after geo-strategic paradigm change. The Cold War, which has so seared itself into the American foreign-policy mindset, and implanted too its toxic residue of visceral Russophobia, just ignored China.

  It was assumed that China’s turn toward a western-style economic model simply would flush away the communist colouring – via the agency of an emergent consumerist middle class. Now, Washington observes China unobtrusively to have shed its chrysalis only to reveal the unfolding wings of a superpower – both rivalling, and potentially besting, America. The Biden circles want now to focus America’s power entirely on outdoing and out-rivalling China.

  Whereas Trump was obsessed by Iran, the Biden team is not. It is keener to pivot away from Trump’s passion with Iran (and the troublesome West Asia, more generally), to focus on bringing Europe to a different ‘pivot’– that of cultivating its hostility towards Russia (a project, led by Britain’s propaganda campaign, and by certain East European states who seem to have become ‘the tail’ wagging the EU policy ‘dog’). For Washington Beltway circles stuck in the old Cold War mindset, Russia remains a ‘minor economy and regional power’ that does not merit America’s full attention – unlike China, which is a major economic power, with military capabilities at the very least, on a par with those of the U.S.

  It is seen to be enough (in DC) for Europe to be mandated to do the ‘heavy lifting’ of attrition against Russia, with the U.S. ‘leading from behind’ – as Obama did in Libya. Victoria Nuland, of Ukraine regime change fame, is now confirmed by the Senate as a top State Department official.

  Why should Biden circles want Europe to pivot against Russia and China? Well, it is the old Mackinder rule: the heartland must never be allowed to unite. China and Russia (and Iran) must be kept apart, and be divided through ‘triangulation’, as Dr Kissinger used to say. First it was Afghanistan that was the ‘swamp’ in which Russia (then USSR) was to be mired; then Syria; and now it is to be the Ukraine that is supposed to keep Russia pre-occupied and on edge – Containment, whist the U.S. focusses on isolating China.

  In this vein, the EU parliament, which ‘has no battalions’ (like the Pope, in the old quip), issued its Promethean ultimatum to Moscow: Should Russia again threaten Ukrainian sovereignty, the EU must make clear that the consequences for such a violation of international law and norms would be severe. MEPs agreed, “such a scenario must result in an immediate halt to EU imports of oil and gas from Russia, the exclusion of Russia from the SWIFT payment system, and the freezing of assets and cancellation of visas for Europe of all oligarchs tied to the Russian authorities”.

  But when it is observed that this very hostile resolution was carried by 569 votes to 67, it is clear that this exercise had considerable political heft behind it (a case of the Biden circles again ‘leading from behind’ perchance?). The EU, in the same week, also censored China for “endangering peace” in the South China Sea, and sent a naval expeditionary force there.

  And so the Europeans are falling into line with Blinken’s demand for co-ordinated action and rhetoric on China and Russia, it would seem.

  None of these events will have surprised Moscow or Beijing, which earlier resolved to resist western attempts at divide and rule. Nonetheless, these western ploys do entail high risk. The EU Ukrainian ultimatum, backed by such a huge parliamentary majority, hints that a further round of tensions over the Donbass is anticipated (and is being prepared).

  This expectation surely lay behind the broadside out from the EU parliament. If so, they should know that Russia will not abandon Donbass to Kiev (Presiden Putin warned plainly that Russia’s red lines should not be mis-construed, in his recent address to the Federal Assembly). The EU resolution thus smacks of preparing of the ground for NATO intervention of some type.

  No doubt, the EU sees its role as fore-staging its ‘values’ as a part of lending weight to its strategic autonomy ambitions being taken seriously. But this comes at a price. Ukraine is not under Zelensky’s control (there are other players – hotheads with different agendas). Anything can happen. The EU ultimately will be the one to pay the price for any outbreak of military hostilities.

  And for what? Re-constituting warm relations with the Democrats (as in the old days)? It all speaks to short-termism, well shy of any discernable strategy.

  And the risks are not just kinetic: Russia, China and U.S. do not seek military escalation, yet U.S. policies towards China (on Taiwan) and Russia (concerning Ukraine) may be taking them toward inadvertent confrontation.

  They are economic too: Europe desperately needs Chinese investment and technology – and Russian gas – if its economy is not to collapse into prolonged recession. It was only ‘yesterday’, as it were, that EU leaders were singing the refrain of the EU should stand aloof from the heavy-weight mega-competition.

  The political risk for the EU is that Biden’s political honeymoon may quickly run out of steam. His ramming radical legislation through Congress with no bi-partisan support is levered on a hangover from the pre-election era – of Democratic hatred for anything Trump. That sentiment however, is already draining away with the passage of time. Trump no longer monopolises the headlines. The carte blanche provided to Biden by this emotional animus to his predecessor may quieten and further erode, even before he attempts to move from the progressive end of the spectrum to the centre of politics – which he must do in good time for 2022 if he is to appeal to middle of the road Democrats, and not just his Leftist constituency.

  Biden’s vulnerability in the 2022 mid-term elections is underscored by the fact that apart from his handling of the coronavirus, the majority of Americans disapprove of his performance in all other areas. The U.S. might whiplash off in a different direction, leaving the EU clinging to a stranded asset (Biden).

  The shift of paradigm centred on the U.S. pivot away from West Asia naturally impacts on Iran’s JCPOA calculus too: With the U.S. pursuing a 5th generation full-spectrum ‘knock-back’ delivered to the China-Russia axis, Iran cannot (and will not) allow itself to be positioned as hors de combat, bogged down in lengthy negotiations over the JCPOA. The archetypal exemplar of the Imam at Kerbala will require Iran to adopt a principled stand with its allies – and with ‘the Axis’. Already, we see Saudi Arabia responding, in its own way, to the paradigm shift – through opening channels with both Tehran and Damascus.

  So, to where will this lead? Significantly, Richard Haas and Charles Kupchan, from the ‘oracle’ that is the Council for Foreign Relations, argue that America, having renewed its standing, will ultimately itself have to pivot towards a new Concert of Powers. They write:

  “Pax Americana is now running on fumes. The United States and its traditional democratic partners have neither the capability nor the will to anchor an interdependent international system and universalize the liberal order that they erected after World War II … Establishing a global concert would not be a panacea. Bringing the world’s heavyweights to the table hardly ensures a consensus among them. Indeed, although the Concert of Europe preserved peace for decades after it was formed, France and the United Kingdom ultimately faced off with Russia in the Crimean War. Russia is again at loggerheads with its European neighbors over the Crimean region, underscoring the elusive nature of great-power solidarity … The United States and its democratic partners have every reason to revive the solidarity of the West. However they should stop pretending that the global triumph of the order they backed since World War II is within reach”.

  It seems hardly credible though, that Washington could make such an existential psychic transformation of ‘stopping pretending’ without first undergoing a major crisis. Is that what these authors anticipate – a Fourth Turning?

  Tyler Durden
  Mon, 05/10/2021 – 02:00

• Antony Blinken Continues To Lecture The World on Values His Administration Aggressively Violates: Greenwald
  Antony Blinken Continues To Lecture The World on Values His Administration Aggressively Violates: Greenwald

  Authored by Glenn Greenwald via greenwald.substack.com,

  Continuing his world tour doling out righteous lectures to the world, U.S. Secretary of State Antony Blinken on Thursday proclaimed — in a sermon you have to hear to believe — that few things are more sacred in a democracy than “independent journalism.” Speaking to Radio Free Europe, Blinken paid homage to “World Press Freedom Day”; claimed that “the United States stands strongly with independent journalism”; explained that “the foundation of any democratic system” entails “holding leaders accountable” and “informing citizens”; and warned that “countries that deny freedom of the press are countries that don’t have a lot of confidence in themselves or in their systems.”

  

  The rhetorical cherry on top of that cake came when he posed this question: “What is to be afraid of in informing the people and holding leaders accountable?” The Secretary of State then issued this vow: “Everywhere journalism and freedom of the press is challenged, we will stand with journalists and with that freedom.” Since I know that I would be extremely skeptical if someone told me that those words had just come out Blinken’s mouth, I present you here with the unedited one-minute-fifty-two-second video clip of him saying exactly this:

  That the Biden administration is such a stalwart believer in the sanctity of independent journalism and is devoted to defending it wherever it is threatened would come as a great surprise to many, many people. Among them would be Julian Assange, the founder of WikiLeaks and the person responsible for breaking more major stories about the actions of top U.S. officials than virtually all U.S. journalists employed in the corporate press combined.

  Currently, Assange is sitting in a cell in the British high-security Belmarsh prison because the Biden administration is not only trying to extradite him to stand trial on espionage charges for having published documents embarrassing to the U.S. Government and the Democratic Party but also has appealed a British judge’s January ruling rejecting that extradition request. The Biden administration is doing all of this, noted The New York Times, despite the fact that “human rights and civil liberties groups had asked the [administration] to abandon the effort to prosecute Mr. Assange, arguing that the case . . . could establish a precedent posing a grave threat to press freedoms” — press freedoms, exactly the value which Blinken just righteously spent the week celebrating and vowing to uphold.

  It was the Trump DOJ which brought those charges against Assange after then-CIA Director Mike Pompeo claimed in a 2017 speech that WikiLeaks has long “pretended that America’s First Amendment freedoms shield them from justice,” and then warned: “they may have believed that, but they are wrong.” Pomepo added — invoking the mentality of all states that persecute and imprison those who report effectively on them — that “to give [WikiLeaks] the space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for. It ends now.” 

  But like so many other Trump policies concerning press freedoms — from defending the Trump DOJ’s use of warrants to obtain journalists’ telephone records, to demanding Edward Snowden be kept in exile, to keeping Reality Winner and Daniel Hale imprisoned — top Biden officials have long been fully on board with Assange’s persecution. Indeed, they have been at the forefront of the effort to destroy basic press freedoms not just for WikiLeaks but journalists generally.

  It was Joe Biden who called Assange a “high-tech terrorist” in 2010. It was the Obama administration that convened a years-long grand jury to try to prosecute Assange. It was Sen. Dianne Feinstein (D-CA) who urged Assange’s prosecution under the Espionage Act years before Trump was in office. And it was Blinken’s colleague on the Obama national security team, Hillary Clinton, who praised the DOJ for its prosecution of Assange. All of this was intended as punishment for Assange’s revelations of rampant wrongdoing by the U.S. Government and its allies and adversary governments around the world.

  

  How can you run around the world feigning anger over other countries’ persecution of independent journalists when you are a key part of the administration that is doing more than anyone to destroy one of the most consequential independent journalists of the last several decades? Indeed, as numerous journalists warned at the time, there were few, if any, administrations in U.S. history more hostile to basic press freedoms than the Obama administration in which Blinken previously served, including prosecuting double the number of journalistic sources under espionage laws than all previous administrations combined.

  In 2013, while Blinken was serving as a high-level official in the State Department, the Committee to Protect Journalists did something very rare — issued a report warning of an epidemic of press freedom attacks by the U.S. Government — and said: “In the Obama administration’s Washington, government officials are increasingly afraid to talk to the press.” The New Yorker‘s Jane Mayer said of the Obama administration’s press freedom attacks: “It’s a huge impediment to reporting, and so chilling isn’t quite strong enough, it’s more like freezing the whole process into a standstill.” James Goodale, the New York Times’ General Counsel during the paper’s battle in the 1970s to publish the Pentagon Papers, warned that “President Obama will surely pass President Richard Nixon as the worst president ever on issues of national security and press freedom.”

  Even the specific “press freedom attack” Blinken referenced in that video interview — namely, Russia’s recent demand that media outlets linked to foreign governments such as Radio Free Europe register as “foreign agents” with the Russian government and pay fines for their failure to do so — is one which Blinken and his comrades have wielded against others for years. Indeed, Russia was responding to the U.S. Government’s previous demand that RT and other Russian news agencies register as “foreign agents” in the U.S., as well as the Biden administration’s escalated attacks just last month on news agencies it claims serves as propaganda agents for the Kremlin.

  It is hardly new for the U.S. to dole out lectures which the rest of the world recognizes as complete farces. In 2015, then-President Obama was prancing around India giving lectures on the importance of human rights, only to cut short his trip to fly to Saudi Arabia, where he met numerous top officials of the U.S. Government to pay homage to Saudi King Abdullah, their long-time close and highly repressive ally whose totalitarian regime Obama did so much to fortify.

  But galavanting around the world masquerading as the champion of press freedoms and the rights of independent journalists, all while working to extend the confinement and detention of one of the people responsible for much of the most important journalistic revelations of this generation beyond the decade he has already endured, is a whole new level of deceit. “Hypocrisy” is insufficient to capture the craven insincerity behind Blinken’s posturing.

  It is always easy — and cheap — to condemn the human rights abuses of your enemies. It is much harder — and more meaningful — to uphold those principles for your own dissidents. Blinken, like so many who preceded him in that Foggy Bottom office, theatrically excels at the former while failing miserably at the latter.

  Tyler Durden
  Mon, 05/10/2021 – 00:05

• Ranking US Generations On Their Power And Influence Over Society
  Ranking US Generations On Their Power And Influence Over Society

  We’re on the cusp of one of the most impactful generational shifts in history.

  As it stands, the Baby Boomers (born 1946-1964) are America’s most wealthy and influential generation. But, as Visual Capitalist’s Carmen Ang details below, even the youngest Boomers are close to retirement, with millions leaving the workforce every year. As Baby Boomers pass the torch, which generation will take their place as America’s most powerful?

  In our inaugural Generational Power Index (GPI) for 2021, we’ve attempted to quantify how much power and influence each generation holds in American society, and what that means for the near future.

  Download the Generational Power Report (.pdf)

  

  Generation and Power, Defined

  Before diving into the results of the first GPI, it’s important to explain how we’ve chosen to define both generations and power.

  Here’s the breakdown of how we categorized each generation, along with their age ranges and birth years.

  

  The above age brackets for each generation aren’t universally accepted. However, since our report largely focuses on U.S. data, we went with the most widely cited definitions, used by establishments such as Pew Research Center and the U.S. Federal Reserve.

  To measure power, we considered a variety of factors that fell under three main categories:

  • Economic Power

  • Political Power

  • Cultural Power

  We’ll dive deeper into each category, and which generations dominated each one, below.

  Overall Power, By Generation

  Baby Boomers lead the pack when it comes to overall generational power, capturing 38.6%.

  

  While Boomers hold the largest share of power, it’s interesting to note that they only make up 21.8% of the total U.S. population.

  Gen X comes in second place, capturing 30.4% of power, while Gen Z ranks last, snagging a mere 3.7%. Gen Alpha has yet to score on the ranking, but keep in mind that the oldest members of this generation will only be eight years old this year—they haven’t even reached double digits yet.

  Generational Power: Economics

  Considering that Baby Boomers hold nearly 53% of all U.S. household wealth, it makes sense that they dominate when it comes to our measurement of Economic Power.

  

  At 43.4%, the GPI shows that Boomers hold more economic influence than Gen X, Millennials, and Gen Z combined. They make up a majority of business leaders in the U.S., and hold 42% of billionaire wealth in America.

  Timing plays a role in the economic prosperity of Baby Boomers. They grew up in a post-WWII era, and spent their primary working years in a relatively stable, prosperous economy.

  In contrast, Millennials entered the workforce during the Great Recession and have seen only tenuous economic and wage growth, impacting their ability to accumulate wealth. Combine this with crippling amounts of student debt, and it’s no surprise that Millennials have nearly 50% less wealth than other generations (Boomers, Gen X) at a comparable age.

  Generational Power: Political

  In addition to holding the most Economic Power in the GPI, Baby Boomers also rank number one when it comes to Political Power.

  

  Boomers capture 47.4% of political influence. This generation accounts for 32% of all U.S. voters, and holds the majority of federal and state positions. For instance, 68% of U.S. senators are Baby Boomers.

  Political spending on election campaigns and lobbying predominantly comes from Boomers, too. When it comes to money spent on lobbying, we found that 60% of the top 20 spenders were from organizations led by Baby Boomers.

  In contrast, Millennials and Gen Zers barely make a splash in the political realm. That said, in the coming years, it’s estimated that the combined voting power of Millennials and Gen Z will see immense growth, rising from 32% of voters in 2020 up to 55% by 2036.

  Cultural Power

  There is one category where other generations gave Boomers a run for their money, which is in Cultural Power.

  

  In this category, it’s actually Gen X that leads the pack, capturing 36.0% of Cultural Power. Gen X is especially dominant in press and news media—over half of America’s largest news corporations have a Gen Xer as their CEO, and a majority of the most influential news personalities are also members of Gen X.

  Despite a strong showing in our culture category, Gen X falls short in one key variable we looked at—the digital realm. On digital platforms, Millennials dominate when it comes to both users and content creators, and Gen Z has growing influence here as well.

  The Future of Generational Power

  Generational power is not stagnant, and it ebbs and flows over time.

  As this process naturally plays out, our new Generational Power Index and the coinciding annual report will aim to help quantify future shifts in power each year, while also highlighting the key stories that exemplify these new developments.

  For a full methodology of how we built the Generational Power Index, see pages 28-30 in the report PDF. This is the first year of the report, and any feedback is welcomed.

  Tyler Durden
  Sun, 05/09/2021 – 23:40

• Record-Low Deportations Part Of Biden's Plan To "Dismantle ICE": Former ICE Chief
  Record-Low Deportations Part Of Biden’s Plan To “Dismantle ICE”: Former ICE Chief

  Authored by Zachary Stieber via The Epoch Times,

  The record-low number of deportations in the United States in April signals that the Biden administration is working toward abolishing immigration enforcement, the former acting chief of Immigration and Customs Enforcement (ICE) says.

  “It’s terrible. You got record numbers, people coming into the country illegally being released, and a record low of people being removed,” Thomas Homan, who headed the agency during the Trump administration, told The Epoch Times.

  “But that’s by design, this isn’t an accident—they want to dismantle ICE. Rather than abolish them, which they had a tough time doing they’re just making them not effective. Looks like it’s working,” he added.

  The end goal, according to Homan, is completely halting immigration enforcement.

  “They want open borders because they think they’re going to be all future Democratic voters. This is about perpetual power of the government,” he said.

  ICE and the White House did not respond to requests for comment. White House press secretary Jen Psaki has not been asked during recent briefings about the low number of deportations.

  

  Only 2,962 deportations were carried out in April, according to the agency. That does not include expulsions made under Title 42 emergency powers amid the COVID-19 pandemic.

  An ICE spokesman said via email earlier this week that the agency “has concentrated its limited law enforcement resources on threats to national security, border security, and public safety,” which has “allowed ICE to focus on the quality of enforcement actions and how they further the security and safety of our communities rather than the simple quantity of arrests and removals.”

  

  Former acting ICE Director Tom Homan testifies at a House hearing in front of the Committee on Oversight and Reform, in Washington on July 12, 2019. (Charlotte Cuthbertson/The Epoch Times)

  A recent surge in illegal border crossings, meanwhile, has shown little signs of slowing down. Over 177,000 illegal immigrants were apprehended by border agents in April, according to preliminary numbers, with another 42,620 aliens evading authorities.

  President Joe Biden upon entering office quickly reversed or dramatically altered key Trump-era measures aimed at curbing illegal immigration, including completely undoing the program that forced asylum seekers to wait outside the country for their claims to be heard. In February, ICE announced new interim guidelines for deportations that narrowed the agency’s focus to only three priority areas: national security, border security, and public safety.

  If an illegal immigrant is encountered who doesn’t fall under one of the areas, an agent must seek approval from their field office before taking any action.

  Republicans and some analysts said the low April numbers should not be a surprise given the narrowing deportation criteria.

  “With the Biden Administration willfully ignoring the rule of law, it’s no wonder we have a crisis at our southern border,” Rep. Debbie Lesko (R-Ariz.) wrote on Twitter.

  Andrew Arthur, a resident fellow in law and policy for the Center for Immigration Studies, a research institute that looks at how immigration impacts America, said the current restrictions on ICE incentivize illegal immigration.

  “As bad as the situation at the border is, interior non-enforcement is, if anything, worse. But you don’t see children crowded into makeshift detention centers under foil blankets when ICE isn’t allowed to deport criminals,” he wrote in a blog post. “The current non-enforcement rules are the reason aliens are coming, though, because they send the signal that once those aliens get into the United States, they will get to stay.”

  Tyler Durden
  Sun, 05/09/2021 – 23:15

• Visualizing What $50k In Lumber Can Build Today Versus Last Year
  Visualizing What $50k In Lumber Can Build Today Versus Last Year

  Skyrocketing lumber prices have more than tripled over the past 12 months and made the cost associated with building an average new single-family home significantly rise. The folks at Visual Capitalist dove deeper into the lumber price storm to find out how many new single-family homes $50k in lumber can build today versus the same period in 2020. 

  To calculate each home, Visual Capitalist used the following parameters:

  • Lumber requirements: 6.3 board feet (bd ft) per square foot (sq ft)

  • Median single-family house size: 2,301 sq ft

  • Total lumber required per single-family house: 14,496 bd ft

  What they found was that $50k in lumber in 2015 could build 14.74 new single-family homes. By April 2020, the same price of lumber could build around 10.5 homes. And in May, after a meteoric rise in lumber prices, $50k in lumber could only build 2.11 homes. 

  

  Here’s a visualization of what $50k in lumber can build in May 2021 versus May 2020. 

  

  On Friday, lumber prices rose at the Chicago Mercantile Exchange to over $1,700 per 1,000 bd ft, closing up 2.49% to $1,686, fresh record highs. The chart below is in a parabolic move – almost like Bitcoin or Etherum. 

  

  Despite Weyerhaeuser Co., Georgia-Pacific LLC, West Fraser Timber Co., Ltd., among others, attempting to increase output, lumber prices continue to soar and will likely remain elevated until new capacity comes online or the housing market frenzy loses steam. 

  All this talk about “transitory” inflation is non-sense, as Bank of America elegantly put it: “Buckle up! Inflation is here.” 

  Tyler Durden
  Sun, 05/09/2021 – 22:50

• Critical Race Theory Training In Workplace Could Lead To Increased Bullying, Anxiety, Expert Says
  Critical Race Theory Training In Workplace Could Lead To Increased Bullying, Anxiety, Expert Says

  Authored by Janita Kan via The Epoch Times (emphasis ours),

  HR expert and author Jim Stroud says the impact of critical race theory (CRT) in workplace training could be detrimental to employees because it could lead to increased bullying and anxiety in the workplace.

  

  The the quasi-Marxist theory has been heavily promulgated throughout academia, entertainment, government, schools, and the workplace in recent years and rose to new prominence following the rise of far-left groups such as Antifa and Black Lives Matter. Some workplaces have included concepts from the doctrine in their “racial and cultural sensitivity” training, which essentially teaches employees that the United States is fundamentally racist, or that one race is inherently superior to another race.

  Stroud, who has 20 years’ experience in human resources and has written about CRT’s impact on the workplace, argues that such training could negatively impact workplace dynamics and teaches employees to mistrust each other.

  “So imagine that you’re working in a space and the day before the training, everything was fine,” Stroud told NTD’s “The Nation Speaks.” “You work with your co-workers, you had good friendships, good team building exercises, everything is fine. After the training, you’re looking at your co-workers in a different way. You’re wondering, okay, I thought you were my friend but because of this training, I now believe that you’re oppressing me, so I don’t really know if we’re really friends. I don’t really know if we’re really working together. I don’t know if the reason why you refused me taking on some project is because my idea wasn’t valid or because you’re racist.”

  

  Employees may also question whether they were chosen to work on a certain project because they were suitable for the job or because of some corporate policy aiming to fulfill at curbing discrimination stemming from intersectionality, he added. Intersectionality is the concept where different aspects of a person’s identity can expose them to overlapping forms of discrimination and marginalization.

  “So I also think that it would bring about a lot of anxiety inside the workplace because if people disagree with critical race theory then you will be accused of being racist, which is what critical race theory does,” he said.

  If an employee continues to deny that accusation, the CRT states that that individual is “all the more racist,” he explained. Eventually, this anxiety in some people could lead to hostile workplaces.

  Stroud said that CRT is essentially a “movement to make racism acceptable,” saying it teaches the idea that “white people are born oppressors without redemption and that all minorities are oppressed.”

  “It teaches that the most important thing about anyone is their skin color, not their character, not the things they do, not the personality, not even the environment that they inhabit,” he said. “That’s purely telling you that your worth and everything you are is measured in the color of your skin.”

  The movement to push back on the expansion of CRT in schools and workplace training has fueled a heated debate on how cultural and racial sensitivity education should be conducted. Conservatives and Republicans have warned that the CRT movement is not about eliminating racism, and is simply pushing divisive concepts. Meanwhile, progressives and Democrats argue that the CRT approach would advance equity for all.

  During his administration, President Donald Trump placed a ban on critical race theory training in federal workplaces, but President Joe Biden rescinded the measure. Instead, Biden has promoted policies that embrace the ideology, issuing an executive order stating that the federal government must pursue “a comprehensive approach to advancing equity for all.”

  Stroud said he believes that the best way for corporations who are grappling with partisan politics in their organization is to attempt to steer conversations away from politics, but he warned that this could prompt backlash, citing the example of employee exodus at software firm Basecamp. The technology company saw mass resignations after its CEO announced that its employees are banned from openly sharing their “societal and political discussions” at work.

  In a blog post, Basecamp CEO Jason Fried explained that the discussions are “a major distraction,” “saps our energy,” and “redirects our dialog toward dark places.”

  “It’s not healthy, it hasn’t served us well. And we’re done with it on our company Basecamp account where the work happens. People can take the conversations with willing co-workers to Signal, Whatsapp, or even a personal Basecamp account, but it can’t happen where the work happens anymore,” he said.

  Stroud said he also hopes to see legislative measures that would make an individual’s political affiliation a protected class under state or federal discrimination laws in order to counter discrimination or bullying based on a person’s political beliefs.

  “Hopefully by the time of the election, it’ll become law. I think will be tricky because talking about politics is is something that both sides need,” he said, adding that given the Democrat-controlled Congress, it is unlikely that such a law would pass.

  Follow Janita on Twitter: @janitakan

  Tyler Durden
  Sun, 05/09/2021 – 22:25

• Uneven Recovery Leaves Working-Poor Communities In The Dust 
  Uneven Recovery Leaves Working-Poor Communities In The Dust 

  The US economy is fragmented more than ever. Millions of Americans continue to suffer job loss and housing and food inequities. At the same time, 650 billionaires in the US saw their net worth increase by more than $1 trillion since the pandemic began. A Bloomberg analysis provides a deep dive into the unevenness of the recovery in a dozen cities. 

  To capture the multi-speed track recovery for different races, social classes, and various metro areas, Bloomberg used unemployment data from a monthly Current Population Survey of approximately 60,000 households via the Bureau of Labor Statistics and the US Census Bureau.

  They found the recovery is patchy geographically: 

  “For Asian Americans in San Francisco and Los Angeles, low tourism and high housing costs are weighing on their rebound, while Latinos in Phoenix have benefited from a strong construction sector.”

  Meanwhile, the Federal Reserve and the White House have vowed to continue unprecedented monetary and fiscal accommodations until employment metrics improve, such as Black national unemployment, wage growth for working-poor, and labor force participation for those without college degrees.

  Janelle Jones, the top economist at the Labor Department, recently said there “no economic recovery can be complete if some communities are left behind.” But after trillions of dollars of monetary and fiscal injections, the recovery remains uneven: 

  Bloomberg found the socio-economic collapse during the virus pandemic widened the non-seasonally adjusted White-vs.-Black unemployment gap nationally by 2.9 percentage points and the White-vs.-Hispanic gap by 2.3 points. In contrast, unemployment among Asians reverted to normal levels. 

  

  On a more microscopic level, average jobless rates between January and March were 15.5% for Black people in Los Angeles and 3.5% for White people in Atlanta. 

  

  Bloomberg pointed out Hispanic workers in Phoenix had better labor conditions than their peers nationally because service-related jobs were hiring more. 

  

  For Blacks, Hispanic, and Whites in Houston, joblessness across the board was much worse than the national average, primarily because of the industry-wide downturn in oil and gas. On the other hand, Asians had the best labor conditions. 

  

  Focusing on minorities, Black and Hispanic people in Las Vegas, Philadelphia, and Los Angeles face double-digit unemployment numbers. 

  

  “Still, for more than half of minority groups, local unemployment rates have not fully recovered to March 2020 levels, when stay-at-home orders were first enacted, while some gaps have widened,” Bloomberg said. 

  

  Combining the data above with other regional data such as home prices, job listings and small business loans from the Paycheck Protection Program, Bloomberg dives even further to show what minority metro areas have been left behind in the ‘frankenstein’ recovery (otherwise known as the “K-shaped” recover) produced by government and central bank. 

  

  What’s clear is that government nor the central bank can demonstrate effective policies to lift all participants. One thing is sure, the billionaires got richer, and the bottom 90% of Americans got poorer. 

  Tyler Durden
  Sun, 05/09/2021 – 22:00

• Biden Gives Beijing Reason To Dump More Treasuries
  Biden Gives Beijing Reason To Dump More Treasuries

  By Ye Xie, Bloomberg reporter and Market Live commentator

  Three things we learned last week:

  1. The U.S.-China relationship remains tense.

  For anyone who expects an improvement in the U.S.-China relationship, it’s been a disappointing early start to the Biden administration. President Biden has kept almost all of Trump’s China economic policies, including tariffs, and restrictions on Chinese tech companies. He rallied U.S. allies to put pressure on China over issues from human rights to cybersecurity.

  Under these circumstances, China has most likely been divesting from the dollar and U.S. Treasuries for “logical tactical reasons,” said Stephen Jen, co-founder of London-based Eurizon SLJ Capital. “If the risks of financial sanctions by the U.S. are rising, why would SAFE (China’s State Administration of Foreign Exchange) hold so much U.S. Treasuries that could potentially one day be subject to confiscation or be frozen?” he said.

  Indeed, China has sold Treasuries since 2018 when the trade war started. What’s interesting is that over the past year, its holding of long-term Treasury bonds have been steady, but its purchases of short-term bills surged to $76 billion, from $3 billion in February 2020, when the pandemic hit. The reason for the bill purchases is unknown, but it doesn’t look like a long-term commitment.

  

  2. The weak jobs report supports the Fed’s dovish stance.

  The shockingly weak U.S. jobs report was almost too bad to be true. It might have been because of technical factors such as seasonal adjustments or the lack of incentives for workers to return thanks to enhanced unemployment payments. But it certainly justifies the Fed’s cautious policy that it’s not the time to talk about removing stimulus. It’s likely to keep the dollar on the back foot.

  Given the Fed now puts more weight on employment than on inflation under its new framework, the report should lower the markets’ sensitivity to this week’s inflation figure.

  3. Strong data and currency give China a window to open capital markets.

  China’s exports surged and the tourism spending during the Labor Day holiday shows consumption is recovering. The stable growth provides China a window to address some long-term structural issue, including cleaning up the debt overhang and opening up its capital account. Last week, China issued rules on Wealth Management Connect, which would allow investments across the border between Hong Kong and the nation’s southern region.

  “While it is a small step in making investment abroad easier for qualified residents in Guangdong province, it is a big step toward China’s capital account liberalization experiment,” Citigroup’s economists led by Li-Gang Liu wrote.

  Tyler Durden
  Sun, 05/09/2021 – 21:40

• Lessons From Steve Cohen And Jerry Seinfeld
  Lessons From Steve Cohen And Jerry Seinfeld

  By Nick Colas of DataTrek Research

  This week we’re considering the concept of “Mastery”. The word can mean either “a high level of skill” or “control over something/ someone”. Steve Cohen and Jerry Seinfeld both have mastery of their respective crafts, for example. As different as trading and comedy may be, their process of gaining mastery is actually quite similar: work every day, no excuses. This builds “skill”, of course, but also confidence (i.e., mastery over self, and self-doubt).

  Two stories about “mastery” to share with you:

  #1: Steve Cohen. When I (Nick) got to SAC in 1999. I heard a story about how Steve had developed his style of catalyst-driven trading. When he left Gruntal and set up his own shop, he started by only trading one stock: IBM. He got to know the floor specialists who made the market, read all the analyst reports and financial filings, and traded only when he thought he had an edge on specific events. Once he was satisfied his process worked, he started scaling the business by adding traders and training them in this approach.

  By the time I got to Steve’s shop, there was an additional process layer on top of “know your edge”: a specific daily trading profit goal. You started with, say, a $1,000 budget – make that profit every day for 30 days. It didn’t matter if you made it at the open, the close, or sometime in between. Once you made the grand, you basically took all risk off and started working on the next day’s trade ideas. Once you achieved a 30-day continuous string of profits, you set a new one – $2,000/day, say.

  What if you stumbled at some point, and had a few days of losses as you ramped up your profit goal? Well, then you went back to the $1,000/day goal. You already knew how to do that, after all. String together a few weeks of those gains and try for $2,000/day again. We all met weekly with the in-house shrink, who helped us understand the psychology behind our successes and failures, but always in the context of that daily profit goal number.

  Takeaway: Steve and IBM is a great example of mastery as “comprehensive knowledge” built through daily discipline, and the $1,000/day goal is mastery as “control over someone”, namely yourself.

  #2: Jerry Seinfeld. Ok, not an investment guy, obviously, but he clearly has mastery over his craft. How did he do that? Here’s his hack, as described to a fellow comedian many years ago:

  • “He said the way to be a better comic was to create better jokes and the way to create better jokes was to write every day.
  • He told me to get a big wall calendar that had a whole year on one page and hang it on a prominent wall. The next step was to get a big red magic marker. He said for each day that I do my task of writing, I get to put a big red X over that day.
  • After a few days you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job is to not break the chain.”

  Takeaway: Just like Steve, Seinfeld sees mechanized, disciplined routine as the path to mastering a skill and mastering yourself. In his episode of “Comedians in Cars” with Dave Chappelle, the two have a long exchange about how it can take years to craft the perfect joke. One word might make all the difference, and the only way to find it is to search for it every day.

  Wrapping up with a few other thoughts on the subject of mastery:

  As Henry Ford said, “If you think you can do a thing or think you can’t do a thing, you’re right”. “Mastery of knowledge” gets so much attention in investing that it’s easy to shortchange “mastery of someone”, namely yourself. Behavioral finance covers some of this ground, but too often in a way that makes decision-making mistakes look unavoidable. The important thing is to keep trying to overcome them with a specific process, executed daily.

  Small wins mean a great deal. The $1,000/day trading profit goal had two very specific purposes. First, it forced junior traders to learn P&L discipline and risk management – especially the idea of cutting losses early. Second, and just as important, it gave them confidence. There is nothing like a 30-day string of wins – in any field – to give you the impetus to keep crossing off the days on a Seinfeld-style calendar.

  Achieving mastery – of knowledge, or self – is an ongoing process more than it is a destination unto itself. Back at SAC I knew a trader who would mark down the individual closing positions on his personal P&L software (not the fund’s books and records, of course) so that he showed a smaller daily gain (say $2 mm instead of $4 mm). Why? Because at the next day’s open his real-time P&L would always be positive by a million or two regardless of overnight volatility. He simply found it easier to make good decisions if he was “making money”. Unorthodox as that may sound, it reflects the right priorities – mastery is often as much a brain hack as it is based in empirical knowledge.

  Final note: we obviously follow the daily approach to “mastery” at DataTrek, something that actually started in our prior gig right around 2010 when we first read about Seinfeld’s routine. To us, it made more sense than Malcolm Gladwell’s 10,000-hour rule (it takes that long to achieve a high level of skill) as described in his 2008 book “Outliers”. After +30 years on Wall Street, I have come to the conclusion that mastery is first and foremost a process, and one that requires daily, sustained attention. The minute you stray from that path, you quickly start to lose it. As Seinfeld said, “Your only job is to not break the chain”.

  Sources:

  Jerry Seinfeld’s Daily Routine: https://www.balancethegrind.com.au/daily-routines/jerry-seinfeld-daily-routine/

  Tyler Durden
  Sun, 05/09/2021 – 21:35

• Liz Cheney Faces Chopping Block As GOP Braces For Chaotic Week
  Liz Cheney Faces Chopping Block As GOP Braces For Chaotic Week

  House Republicans will return to Washington DC this week to address a growing schism in the party between never-Trumpers led by Rep. Liz Cheney (WY), and Rep. Elise Stefanik (NY) who hopes to replace her as chair of the House Republican Conference – a move endorsed on Sunday by House Minority Leader Kevin McCarthy – roomate of Democrat pollster Frank Luntz.

  

  “She’s done as a member of leadership. I don’t understand what she’s doing,” one former House GOP lawmaker told The Hill of Cheney’s ongoing attacks on former President Trump. “It’s like political self-immolation. You can’t cancel Trump from the Republican Party; all she’s done is cancel herself.“

  Cheney has repeatedly attacked Trump for ‘inciting’ the Jan. 6 ‘insurrection’ despite telling supporters to protest peacefully and then go home following the breach of the Capitol.

  GOP leaders hope that purging Cheney from the leadership ranks will move Republicans beyond their civil war over Trump — one that’s raged publicly since the Jan. 6 attack on the Capitol — and allow the party to unite behind a midterm campaign message that President Biden and the Democrats are too liberal for the country. –The Hill

  “There are still a few members that are talking about things that happened in the past, not really focused on what we need to do to move forward and win the majority back next year,” according to Rep. Steve Scalise (R-LA), the minority whip. “We’re going to have to be unified if we defeat the socialist agenda you’re seeing in Washington.”

  A victory by Stefanik would mark a symbolic shift back towards Trump by leading Republicans – as the former president remains highly engaged this election cycle and has threatened to politically obliterate any remaining GOP opposition.

  “By ousting her, what we’re saying is: We are repudiating your repudiation of the Trump policies and the Trump agenda and her attacks on the president,” according to Rep. Andy Biggs (R-AZ), adding “President Trump is the leader of the Republican Party. And when she’s out there attacking him, she’s attacking the leader of the Republican Party.”

  Cheney has already survived one challenge to her leadership post, in February, after she infuriated conservatives by voting to impeach Trump for inciting the Capitol rampage on Jan. 6. With the backing of Minority Leader Kevin McCarthy (R-Calif.), she easily kept her seat as conference chair, 145 to 61 by secret ballot.

  With McCarthy and Scalise fed up with Cheney and now backing Stefanik, the 36-year-old New Yorker is expected to prevail in Wednesday’s contest — a would-be victory for leaders who have failed to unite the conference behind a post-Trump strategy in the early months of the Biden administration. –The Hill

  That said, ousting Cheney is not without risk. She’s the highest-ranking GOP woman in Congress, the daughter of a former Vice President, and has a much more conservative voting record than Stefanik’s – which has caused some GOP leaders to fear alienating female Republican voters, particularly educated suburbanites who will be key votes in the 2022 elections.

  “You’re not going to win or hold some of these swing seats if it’s all about loyalty to a person,” said former Rep. Barbara Comstock (R-VA). “We certainly know that Trump divided the country, and lost the House and lost the Senate — he lost the [popular vote] two times — and you’re now going to hang your hat on the guy who got 47 percent” in 2020? she asked, snarkily.

  “This is nuts,” added Comstock. “He’s not going to get more votes. His people are dying off.”

  Cheney isn’t the only House Republican facing backlash for taking on Trump. Earlier in the week, Sen. Mitt Romney (R-Utah), one of seven Republican senators who voted this year to convict Trump, was booed and called a traitor at the Utah GOP state convention, where he narrowly beat back an effort to censure him.

  On Friday, the Ohio Republican Party Central Committee voted to censure Rep. Anthony Gonzalez (R-Ohio), Cheney and the eight other House Republicans who backed Trump’s impeachment in January. The Ohio GOP also formally called for Gonzalez’s resignation.

  House GOP leadership allies have argued that this week’s referendum on Cheney isn’t about the final purge of Trump foes from the party. They note that McCarthy stood by Cheney after she voted to impeach Trump, in a bid to unite the warring factions of his 212-member conference.

  But McCarthy allies say the GOP leader has no choice but to dump her this time around, arguing she has repeatedly undercut McCarthy and the GOP’s message during leadership news conferences, in media interviews and in op-eds where she continues to rail against the dangers of Trump and his “Big Lie.” -The Hill

  And so, Cheney’s ouster will set the tone for whether Trump still has his mojo within the Republican party. That, in turn, will be a key indicator of whether he’s got any kind of chance in 2024 – should he choose to run again.

  Tyler Durden
  Sun, 05/09/2021 – 21:10

• Canadian Preacher Artur Pawlowski Arrested, Charged After Allegedly Defying Public Health Orders
  Canadian Preacher Artur Pawlowski Arrested, Charged After Allegedly Defying Public Health Orders

  Authored by Jack Phillips via The Epoch Times,

  Officials in Calgary, Canada, said they arrested Artur Pawlowski, a street preacher who allegedly defied local lockdowns, over the weekend.

  

  “Earlier today, police arrested two organizers of a church service who were in violation of a new court order obtained by Alberta Health Services (AHS) in relation to mandatory compliance of public health orders for gatherings,” said the Calgary Police Service in a statement on Saturday.

  His brother, David Pawlowski, was also taken into police custody.

  Both were charged with allegedly organizing an illegal in-person gathering as well as  “requesting, inciting or inviting others” to join them, according to police.

  The force said that Alberta’s provincial government obtained a bench order from a court that applies to “protests, demonstrations and rallies” that imposes “new restrictions on organizers of protests and demonstrations requiring compliance with public health orders including masking, physical distancing and attendance limits.”

  “It is important to understand that law enforcement recognizes people’s desire to participate in faith-based gatherings as well as the right to protest. However, as we find ourselves in the midst of a global pandemic, we all must comply with public health orders in order to ensure everyone’s safety and wellbeing,” the police service added.

  A video uploaded on Twitter that appeared to show his arrest on a highway included Pawlowski’s voice: “If you are watching this video, it means that they have successfully arrested me.” It included a link to a crowdfunding website for his legal defense.

  During the COVID-19 pandemic, the Pawlowski brothers have held gatherings and have denied officials’ entry into their church located in Dover, Calgary, according to reports.

  Pawlowski drew headlines several weeks ago after he compared police with the Nazi Gestapo paramilitary forces and fascists.

  “And they did it again! Today, the Gestapo Attacked our Church Again! History is being repeated in front of our eyes! Another sad day for Freedom and democracy!” Pawlowski wrote on April 24.

  Before that, in a viral clip, he was seen in a video telling officers: “I do not cooperate with Gestapo!”

  “I’m not interested in any word that you have to say. I do not cooperate with Gestapo, I do not talk to the Nazis,” Pawlowski told officers on Easter Sunday weekend, adding, “Brown shirts of Adolf Hitler. You are Nazi, Gestapo, communist, fascists! I do not cooperate with Nazis!”

  On April 3, Pawlowski was fined $1,200 for allegedly holding a public gathering of more than 15 people at his Street Church, in violation of COVID-19 health orders.

  Pawlowski, who emigrated from Poland to Canada in the 1990s, told Fox News in April that Canadian police are engaging in Soviet-like activity during the pandemic. He has also been fined repeatedly for violating public health orders by holding church services.

  “I grew up under a communist dictatorship behind the Iron Curtain, under the boot of the Soviets, and I’m telling you that’s no fun at all. It was a disaster,” he said in the interview. “So, it was like a flashback when those police officers showed up at my church. Everything kind of came back to life from my childhood, and the only thing I could do is to fend off the wolves as a shepherd, and I used my voice to get rid of them,” Pawlowski added.

  Tyler Durden
  Sun, 05/09/2021 – 20:45

• The Generals Will Be Back: Goldman Assures Its Clients That FAAMGs Will Make Triumphant Return
  The Generals Will Be Back: Goldman Assures Its Clients That FAAMGs Will Make Triumphant Return

  Earlier today, Morgan Stanley’s chief equity strategist Michael Wilson looked at what was likely the highlight of Q1 earnings season, pointing out that “the vaunted FAANMG stocks sold off on terrific 1Q earnings results after an outsized run into the event. This was… a reminder that stocks often peak on good news.”

  Not to make a too fine point out of it, suddenly everyone is focusing on the performance of the FAAMG stocks which, after soaring for much of 2020 when they returned 56% and accounted for 7% of the 18% S&P 500 return last year, have gone nowhere in recent months prompting concerns that it’s all downhill from here.

  Not surprisingly, FAAMGs were also the topic of the latest weekly note from Goldman’s chief equity strategist David Kostin, who writes that confronted with the prospect of decelerating US economic activity, the bank’s clients are suddenly freaking out about a breakdown in the 5 Generals, and are “asking about the potential for a transition in market leadership” even as “many investors have expressed the view that economic deceleration should support the outperformance of the largest “Big Tech” stocks in the market”, a topic which Goldman analyzed recently and which view the bank supports.

  Despite its ringing endorsement of FAAMGs, Kostin admits that one common concern with this thesis relates to the high current market concentration compared with history, to wit: he five largest stocks in the S&P 500 represent 21% of index capitalization, significantly more than the long-term average of 14%, above the 18% at the peak of the Tech bubble in 2000, and only trailing the 25% level reached during mid-2020. This large index weight of the top stocks is important because it serves as a practical headwind to continued appreciation given SEC restrictions on portfolio concentration that limit how much mutual funds can continue to buy them.

  

  Of course, there is a fundamental reason why investors have piled into the FAAMGs, first and foremost, the durability of the revenue streams of these firms during 2020 was in stark contrast with the extreme declines exhibited by many other businesses. Last year, sales for the median S&P 500 company collapsed at its nadir by 7% before partially recovering to post flat full-year growth. In contrast, the five FAAMG stocks collectively grew sales by 18% even at the point of maximum contraction for the economy in 2Q. They grew full-year 2020 revenues by 21% vs. 2019.

  

  Q1 results show that the FAAMG growth persists. The median S&P 500 stock reported year/year sales growth of 9% and 57% of S&P 500 firms beat consensus sales estimates, with a median positive surprise of 4%. At the same time, the five largest stocks reported aggregate 1Q 2021 sales of $321 billion –a remarkable $24 billion or 8% above consensus – for year/year growth of 41%. For 2022, consensus expects the five stocks will post revenue and EPS growth of 14% and 10%, respectively, compared with 6% and 10% for the median S&P 500 stock.

  But according to Goldman it’s not the topline growth that is the most distinguishing aspect of the FAAMG business models, but the amount and share of operating cash flow they devote to driving growth. During 2020, the five FAAMG stocks, spent $128 billion in R&D and another $104 billion on capex, accounting for 22% of the S&P 500 total. FAAMG posted a growth investment ratio of 64% over the last three years vs. 11% for the typical stock. As Goldman puts it, “they are investing their way to superior growth.”

  

  While those are the clearest positives propping up the FAAMGs, they are largely priced in; at the same time there is a list of sizable and growing risks, starting with Biden’s proposed tax reform which would raise both corporate and capital gains tax rates and represent possible sources of risk for the FAAMG stocks. If the Biden corporate tax plan were fully enacted, FAAMG 2022E earnings would decrease by roughly 9% relative to consensus expectations. FAAMGs generate approximately 55% of income abroad. Using a back-of-the-envelope approach, applying the proposed 28% domestic statutory rate and 21% tax rate on foreign income to each portion of FAAMG’s income, their collective effective tax rate would rise by 7% to 24% (vs. +6 pp to 25% for the median S&P 500 stock) and would decrease consensus 2022 FAAMG earnings by 9% (vs. -8% for the S&P 500).

  Separately, the FAAMG stocks are also vulnerable to higher capital gains rates. If the capital gains tax rate becomes set to rise in 2022, investors subject to the higher rate may choose to realize some of their substantial capital gains in 2021 at the lower current tax rate. The FAAMG stocks have appreciated by $5 trillion during the last 5 years, accounting for 29% of the S&P 500 market cap increase during that time. Needless to say, if there will be selling, it could be furious.

  It doesn’t end there: valuation multiples also pose a risk to the FAAMG stocks. Investor conversations around FAAMG inevitably turn to their valuations. FAAMG trades at a forward P/E of 29x (90th percentile for the top 5 stocks since 1980), compared with 21x for the remaining 495 S&P 500 stocks. This 34% P/E premium for the five largest stocks ranks in the 76th percentile since 1980.

  That said, if multiples were to shrink everything would crash, which is why Kostin writes that “the current low level of interest rates and the fast pace of expected growth support the lofty multiples of the FAAMG stocks.” While the nominal 10-year Treasury yield has risen this year, at 1.6% it remains extremely low in historical terms, Kostin also makes some other valuation observations:

  Low rates support the valuation of high growth, long duration stocks.FAAMG has an earnings yield gap (E/P less 10Y UST) of 191 bp, above the 40-yearaverage of 144 bp, indicating that the stocks are attractively valued adjusting for thelow level of rates. Valuation on a growth-adjusted basis also looks more reasonable:FAAMG actually trades at a 14% PEG discount to the median S&P 500 stock (1.7xvs. 1.9x).

  

  While all this worked in an ultra low rates environment, rising interest rates represent a potential headwind to FAAMG returns in coming months (incidentally Goldman rates strategists forecast10-year US Treasury yields will rise by 34bps to 1.90% by the end of 2021). Furthermore, all five FAAMG stocks have above-average duration compared with the Russell 1000, meaning they are especially sensitive to moves in long-term interest rates. As yields rose sharply from November through March, FAAMG underperformed the S&P 500 by 7 pp (+21% vs. +14%). A similar period of rising rates in 2H 2021 would likely hamper FAAMG returns.

  Putting all this together, Kostin writes that the greatest fundamental risk to the continued market leadership of the five largest companies “appears to be the potential intervention of regulators.” He adds that recent Biden administration appointments “suggest some risk of a stricter regulatory regime and tighter antitrust enforcement.” He has a point: with the exception of MSFT, the other four FAAMG stocks face a laundry list of legal battles and investigations over their market power and competitive practices ranging from commercial litigation to DoJ and FTC antitrust lawsuits to Congressional probes.

  Then again, as Kostin concludes, his year-end 2021 S&P 500 index forecasts of 4300 and 4600 at the end of 2022 assume these companies generate sales and earnings in line with consensus expectations, their relative valuations remain stable, and therefore implicitly that antitrust actions have no major impact.

  In short, Goldman clients can just relax and keep buying the FAAMG dip.

  Tyler Durden
  Sun, 05/09/2021 – 20:21

• Derby Drug Bust: Thoroughbred On Roids Could See Victory Revoked
  Derby Drug Bust: Thoroughbred On Roids Could See Victory Revoked

  Winner of the famed Kentucky Derby on May 1st, the thoroughbred Medina Spirit, could have its victory removed after failing a post-race drug test, it was revealed Sunday. The growing scandal included Churchhill Downs taking the dramatic action of immediately suspending Hall of Fame trainer Bob Baffert over suspicions he’s been doping horses for years.

  Apparently “horse doping” is pervasive and the sport has lately tried to crack down on such injury-masking & performance-enhancing drugs: “Baffert is a Hall of Fame horse trainer, but five of his horses have fail drug tests in about the past year, while the sport’s leaders have vowed to crack down on horse doping, per AP,” Axios writes.

  

  Specifically the doping allegation stems from an illegal amount of a type of steroid typically used on horses to mitigate pain and swelling called betamethasone. Apparently it was double the limit allowed for the Kentucky Derby.

  The controversy is expected to be prolonged given Baffert is challenging the allegation, saying he’ll fight the Churchhill Downs ruling “tooth and nail” – and the fact that a winning horse hasn’t faced disqualification over doping since 1968. He said in a statement, “I got the biggest gut-punch in racing, for something I didn’t do.”

  As to whether the title will be stripped altogether, the race organization had this to say:

  “Churchill Downs will not tolerate it,” the statement said. “Given the seriousness of the alleged offense, Churchill Downs will immediately suspend Bob Baffert, the trainer of Medina Spirit, from entering any horses at Churchill Downs Racetrack. To be clear, if the findings are upheld, Medina Spirit’s results in the Kentucky Derby will be invalidated and Mandaloun will be declared the winner.“

  If a further test confirms the initial drug test results, Medina Spirit will be disqualified, which has many naturally wondering how such a decision would impact betting and settling results. In recent years total gambling on the Kentucky Derby has reached well over $150 million changing hands. 

  Medina Spirit, trained by Bob Baffert — the Lance Armstrong of horse racing — won today’s Kentucky Derby. Watching it, all I could think of was the @joedrape⁩ story from 2020 below. So many failed doping tests. So much suspicion. https://t.co/Bqaj4dLYhy

  — Juliet Macur (@JulietMacur) May 2, 2021

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

  Partly at issue here is that Baffert’s horses have failed about 30 drug tests in the past four decades, according to The New York Times, resulting in an avalanche of accusations from competitors for decades.  

  Tyler Durden
  Sun, 05/09/2021 – 19:55

• $170,000 Per Year: The Post-COVID Hiring Crunch Is Hitting The World Of AI Data Scientists
  $170,000 Per Year: The Post-COVID Hiring Crunch Is Hitting The World Of AI Data Scientists

  We already know that minimum wage payers are having trouble recalling workers for their post-Covid plans. And why wouldn’t they? Laid off workers have been making more on unemployment and PPP loans over the last year than they likely ever made working rank-and-file jobs in years past.

  But now the hiring drought is starting to hit higher end jobs, like AI talent, the Wall Street Journal notes. 

  To drum up interest, companies are now sponsoring award programs and scouting software development contests in the hunt for data scientists and other AI professionals. 

  Peter Krensky, director, analyst on Gartner Inc.’s business analytics and data science team, told the Journal: “You’ve got to be creative about finding people that care about more than just money.”

  And while base salary for these workers is generally $120,000, companies are now offering up to $170,000 or more to entice talent. Companies have turned to recruiters and internship programs to find talent, but Krensky says that’s “not enough” given today’s competition. 

  “There were 37,000 AI job postings in the first quarter of this year, up more than 45% from the fourth quarter of 2020,” the Journal reported.

  

  Among those seeking talent are companies like J.P. Morgan, who is looking for “hundreds” of AI researchers and scientists (totally normal for a bank). The bank says it has recruited through deep relationships with computer science programs at universities. In 2018, the bank hired Carnegie Mellon University’s head of machine learning as its head of AI research. 

  She now runs an award program that recognizes university faculty and Ph.D. students. The awards come with financial support and can also recognize “highly talented” post-graduate work. The banks says it has hired “several” award recipients. 

  Carol Juel, executive vice president and chief information officer at Synchrony Financial, told the Journal that her bank has also increased AI hiring over the last 3 years. The bank has hosted “datathons” at the University of Illinois, partnering with the school’s statistics department and providing software training and tools to help students “think like data scientists”. 

  “You have to go to where the talent is,” Juel said. 

  We’re certain that’s why businesses are also watching other AI contests, like those run by Google’s Kaggle, to see who can solve complex problems for cash prizes. It likely makes the transition to doing such work for a living – for both the candidate and the business – much easier. 

  Tyler Durden
  Sun, 05/09/2021 – 19:30

• The Mystery Of Dark Energy
  The Mystery Of Dark Energy

  Authored by Alex Kimani via OilPrice.com,

  “Dark energy is not only terribly important for astronomy, it’s the central problem for physics. It’s been the bone in our throat for a long time.”

  – Steven Weinberg, Nobel Laureate, University of Texas at Austin.

  More than three years into its quest to solve the nature of dark energy and illuminate the origin, evolution, and fate of our universe, the Hobby-Eberly Telescope Dark Energy Experiment (HETDEX) project remains on track to complete the largest map of the cosmos ever.

  HEDTEX, a project by Penn State University scientists, aims to create a three-dimensional map of 2.5 million galaxies that will yield valuable insights into the byzantine puzzle of why the expansion of the universe is speeding up over time, a property attributed to the so-called dark energy.

  But first things first, what exactly is dark energy?

  Dark energy in an expanding universe

  

  Source: NASA.org

  The observable universe consists of three known components: normal matter, dark matter, and dark energy. Dark energy is the most abundant at 68%, with dark energy making up another 27% of the universe while ordinary matter constitutes just 5%.

  Today, there is consensus among astronomers that the universe we inhabit is expanding despite the presence of gravity, and that its expansion is accelerating, giving rise to the notion of a repulsive force that astronomers have dubbed ‘dark energy,’ though the concept has only been around for a little more than 20 years. Generally, astronomers and astrophysicists assign the prefix ‘dark’ to concepts they have little or no clue about.

  Dark energy is the name given to the mysterious force that’s causing the rate of expansion of our universe to accelerate, rather than to slow down and go out in a Big Crunch as it ages. That’s contrary to what one might expect from a universe that was birthed by an event like the Big Bang. 

  Back in 1917 when Albert Einstein came up with the general theory of relativity that laid the foundations of the Big Bang and the universe as a whole, he and most leading scientists were convinced that the cosmos was static and non-expanding. Einstein introduced the Cosmological Constant to help explain why the universe was not collapsing under the attractive force of gravity.

  It wasn’t until 12 years later when Edwin Hubble discovered that the universe is in fact expanding, with galaxies farther away from our planet moving away faster than those that are closer. The model of a static universe was finally abandoned, forcing Einstein to quickly modify his theories and come up with two new distinct models of the expanding universe, both of them without the cosmological constant, just a year later.

  However, it would be decades later–1998 to be precise–before astronomers discovered that the universe was dominated by dark energy and not normal matter as earlier thought.

  Solving dark energy

  More than two decades after the discovery of dark energy, astronomers remain in the dark regarding what it’s all about.

  However, several theories have been advanced to attempt to explain dark energy.

  Ironically, Einstein’s previously abandoned cosmological constant is one of the frontrunners, which modern-day physicists describe as vacuum energy.

  “The vacuum in physics is not a state of nothing. It’s a place where particles and antiparticles are continuously created and destroyed. The energy produced in this perpetual cycle could exert an outward-pushing force on space itself, causing its expansion, initiated in the big bang, to accelerate,” says Penn State University Associate Professor of Astronomy and Astrophysics, Donghui Jeong.

  But here’s the rub with the concept of vacuum energy: The theoretical calculations of vacuum energy diverge from actual observations by a factor of as much as 10120.

  Clearly this is a massive discrepancy that could necessitate a reworking of the current theory. 

  Another possibility: Einstein’s theory of gravity is wrong from the get-go hence leading to erroneous conclusions.

  Nonetheless, the cosmological constant in the form of vacuum energy remains the leading candidate that explains dark energy.

  HETDEX ambition

  Obviously, mapping 2.5 million galaxies is no mean undertaking and requires quite a bit of elbow grease. This is not made any easier by the fact that whereas other comparable studies measure the universe’s expansion using distant supernovae or a phenomenon known as gravitational lensing, HETDEX is focused on sound waves from the big bang, called baryonic acoustic oscillations. 

  Luckily, HETDEX has secured more than $40 million in funding and a set of more than 150 spectrographs called VIRUS (Visible Integral-Field Replicable Unit Spectrographs), that gathers light from far-away galaxies into an array of some 35,000 optical fibers where it is split into its component wavelengths.

  Another perk: HETDEX is the first probe to try to do a whole lot of spectroscopy and then figure out what they will see by observing broad swaths of sky instead of specific, predetermined objects, meaning they will end up collecting an insane amount of data. Who knows, that treasure trove might yield unexpected insights that might help mankind in its quest to eventually colonize the universe.

  Tyler Durden
  Sun, 05/09/2021 – 19:05

• US Declares State Of Emergency To Keep Gasoline Flowing After Colonial Fails To Restart Hacked Pipeline
  US Declares State Of Emergency To Keep Gasoline Flowing After Colonial Fails To Restart Hacked Pipeline

  Update 9:00pm ET:  The US government declared a state of emergency late on Sunday, lifting limits on the transport of fuels by road in a bid to keep gas supply lines open as fears of shortages spiked after the continued shutdown of the Colonial Pipeline.

  “This Declaration addresses the emergency conditions creating a need for immediate transportation of gasoline, diesel, jet fuel, and other refined petroleum products and provides necessary relief,” the Department of Transportation said. White House Press Sec Jen Psaki added that “as the Administration works to mitigate potential disruptions to supply as a result of the Colonial Pipeline incident, @USDOT is taking action today to allow flexibility for truckers in 17 states.”

  As the Administration works to mitigate potential disruptions to supply as a result of the Colonial Pipeline incident, @USDOT is taking action today to allow flexibility for truckers in 17 states. https://t.co/mILRtlhjkP

  — Jen Psaki (@PressSec) May 9, 2021

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

  The move lifted limits on the transport of fuels by road to ease the fallout from the continuing closure of the Colonial pipeline, which carries almost half the fuel consumed on the US East Coast, following a ransomware cyber attack on Friday.

  The decision comes as the government scrambles to deal with the fallout from the closure of Colonial, the biggest refined products pipeline in the US, transporting 2.5m barrels of fuel a day from refineries on the Gulf Coast to markets such as Atlanta, Washington and New York (see more below).

  If the pipeline is not quickly reopened the impact on prices could become more severe in the coming days, said Patrick De Haan, head of petroleum analysis at data provider GasBuddy. “We’re realizing the gravity of it is maybe worse than what we’d expected,” said De Haan. “There’s still a little breathing room, we’re starting to run low on it. But Monday, Tuesday if there’s no news, you know we’re dealing with something fairly significant.”

  * * *

  Just in case the US didn’t already have a “transitory hyperinflation” problem, gasoline futures soared more than 4% – and are likely to jump much more – late on Sunday after the Colonial Pipeline announced that while some smaller lateral lines between terminals and delivery points are now operational, its mainlines (Lines 1, 2, 3 and 4) remain offline since late Friday after the company suffered a crippling cyberattack that affected its key IT systems.

  Colonial operates Line 1 for gasoline and Line 2 for diesel and jet fuel from Pasadena, Texas, some 15 miles from the nation’s largest refineries, to Greensboro, North Carolina, at a combined 2.5 million barrels a day. They merge at Greensboro to feed a line carrying about 900,000 barrels a day into New York Harbor, and other East Coast pipelines.

  

  Colonial said that it is “in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.” Full statement below:

  Update — Sunday, May 9, 5:10 p.m.

  On May 7, Colonial Pipeline Company learned it was the victim of a cybersecurity attack and has since determined that the incident involved ransomware. Quickly after learning of the attack, Colonial proactively took certain systems offline to contain the threat. These actions temporarily halted all pipeline operations and affected some of our IT systems, which we are actively in the process of restoring.

  Leading, third-party cybersecurity experts were also immediately engaged after discovering the issue and launched an investigation into the nature and scope of this incident. We have remained in contact with law enforcement and other federal agencies, including the Department of Energy who is leading the Federal Government response.

  Maintaining the operational security of our pipeline, in addition to safely bringing our systems back online, remain our highest priorities. Over the past 48 hours, Colonial Pipeline personnel have taken additional precautionary measures to help further monitor and protect the safety and security of its pipeline.

  The Colonial Pipeline operations team is developing a system restart plan. While our mainlines (Lines 1, 2, 3 and 4) remain offline, some smaller lateral lines between terminals and delivery points are now operational. We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.

  At this time, our primary focus continues to be the safe and efficient restoration of service to our pipeline system, while minimizing disruption to our customers and all those who rely on Colonial Pipeline. We appreciate the patience and outpouring of support we have received from others throughout the industry.

  Meanwhile, downstream customers, which includes pretty much the entire Eastern seaboard, are starting to freak out as they face a new week without the primary source of gasoline supply for hundreds of millions of customers.

  In response to the news, gasoline futures jumped 4% to $2.21 a gallon, approaching the highest since 2014. WTI and Brent both spiked more than 1%, while other products such as diesel and jet fuel are also likely to jump.

  

  Should Colonial be unable to bring its main pipeline back online, which as a reminder were hacked by a ransomware group called DarkSide, according to Allan Liska, senior threat analyst at cybersecurity firm Recorded Future, there is no telling how high prices will shoot up as Colonial supplies nearly half the east coast gasoline.

  On Friday, the national average stood at $2.96 a gallon Friday, according to auto club AAA, and with national gasoline inventories ample, the pump price wasn’t expected to tick much higher until Memorial Day at the end of May, which is traditionally viewed as the start of the U.S. summer driving season. However, it now appears that we can add gas to the list of items that have seen prices soar. Gasoline last bested the $3 average in October 2014.

  

  Price increases in road fuel may stoke even more worries about inflation as commodities from oil to lumber to corn skyrocket with the world’s major economies emerging from pandemic restrictions. The oil industry was gearing up to meet what is expected to be a surge in fuel demand as newly vaccinated Americans take to the roadways and skies this summer. The downed Colonial Pipeline is a key artery for gasoline, diesel and jet fuel produced by oil refiners on the U.S. Gulf Coast and major metropolitan areas between Atlanta and New York.

  “It all comes down to the duration of the disruption. If it lasts longer, it’s likely to result in some location dislocations — shortage of oil products in the East Coast, abundance in the Gulf region. That will support New York product prices and might attract more oil products from abroad,” said Giovanni Staunovo, commodity analyst at UBS Group AG.

  One bank that is optimistic on the outcome of the shutdown is Goldman, its commodities strategist Damien Courvalin writing on Sunday that “the Colonial pipeline disruption likely to be brief” while “falling inventories will exacerbate the impact of future potential outages.” Some more details from the note:

  With no physical damage to the pipeline, sufficient PADD1 inventories and above seasonal gasoline imports into the region, only a long outage (likely more than 5 days) would materially tighten local supplies. The Southeast region is most at risk of shortages given tighter inventories in the PADD 1C region.

  As prior Colonial outages have shown, like in 2016, resupply is further likely to be rapid:

  1. the Colonial pipeline was running below capacity so a resumption of flows at capacity would accelerate the restocking,
  2. Kinder Morgan is working to accommodate additional barrels on its PPL line,
  3. vessels from the USGC and EU can arrive in 7 to 14 days, while
  4. the US administration could waive the Jones Act shipping restriction as well as summer gasoline requirements.

  As a result, while NY Harbor petroleum product June cracks and June-July timespreads are set to rally on Sunday’s open/Monday should the pipeline not have been restarted by then, such moves are likely to be short-lived and mean reverting, with the June RBOB contract expiring on May 28.

  Not everyone is so sure, and Bloomberg reports that traders are already seeking vessels to deliver gasoline that would have otherwise been shipped on the Colonial system. Some tankers are being secured to temporarily store gasoline in the U.S. Gulf in the event of a prolonged shutdown, they said.

  There is some good news: the terminus of the pipeline, New York, was well stocked with fuel ahead of the attack and could weather the upset if missing fuel is replaced or the line restarts quickly. East Coast gasoline stockpiles at the end of April were near five-year seasonal averages. Of course, a lenghty shutdown would mean gasoline shortage the likes of which were last seen in the 1970s…

  

  … which would be poetic justice since price are already soaring at a pace that has surpassed America’s hyperinflationary period, which ended with the Volcker Fed hiking rates to 20% in 1980.

  Tyler Durden
  Sun, 05/09/2021 – 18:23

• Rickards: The Sky Is Falling
  Rickards: The Sky Is Falling

  Authored by James Rickards via The Daily Reckoning,

  What do you think is America’s most serious geopolitical challenge – China, Russia, Iran, maybe North Korea?

  

  None of the above, apparently. According to President Biden’s Director of National Intelligence, Avril Haines, climate change needs to be “at the center” of countries’ national security and foreign policy.

  Well, Treasury Secretary Janet Yellen will be doing her best to make sure the crusade against climate change gets plenty of funding.

  Yellen has called for a “whole-of-economy” approach to fighting climate change — which essentially means massive subsidies to finance so-called green energies and discourage fossil fuel production.

  In other words, climate alarmism is the official position of the Biden administration.

  Where’s the Science?

  Alarmism has no basis in observable science. It’s all the result of climate models, which have been consistently wrong about warming because they reflect the biases of their programmers.

  Garbage in, garbage out.

  They’re kind of like the climate’s version of the Fed’s economic models. They’re always wrong, and not by a little.

  If you listen to the climate alarmists, they’ll tell you we only have a few years to save the planet. If we don’t eliminate CO2 emissions quickly, the planet will warm, sea levels will rise, storms will intensify, cities will be inundated, and lives will be lost to starvation, disease and dehydration.

  Every one of those claims is empirically false, but that doesn’t stop the global power elite from trying to shut down the oil and gas industries and replace power generation with solar, wind and hydropower or so-called renewable sources.

  The War Against Plants

  Here are the facts: The best evidence is that the planet is not warming, but it may be cooling under the influence of a periodic minimum in solar flare activity and increased volcanic activity (the two may actually be related), which creates an atmospheric ash layer that cuts down on sun intensity.

  Sea levels may be rising slightly, but the tempo is about 7 inches in the next 100 years. That’s hardly cause for alarm considering that sea levels rose 400 feet since the end of the last ice age, and humans adapted just fine.

  CO2 is a trace gas that makes up just 0.04% of the atmosphere (400 parts per million) and doesn’t have a major impact as far as science can tell, except that it is essential for plant nourishment.

  Based upon recent studies, a doubling of carbon dioxide would likely result in a temperature increase of only about 1.5 degrees Celsius. That’s hardly a crisis.

  There is some danger that if CO2 levels are reduced too much, plant life may suffer. The reason hurricanes are producing more property damage is not because the storms are more intense – peak intensity in the past hundred years was in the 1940s – it’s because fools with federally subsidized flood insurance are building mansions on sand bars where they don’t belong and the mansions get blown away in predictable storms.

  The Polar Bears Are Getting Fat

  Remember when the same climate alarmists said in 1988 that the New York City subways would be flooded by 2010? Never happened. The polar bears are also doing just fine.

  Recent reports show the polar bear population is thriving, and one report showed that polar bear obesity is an emerging problem because the bears have so much to eat.

  Yet, the claims of the alarmists are even worse than junk science. Even further, the “solution” to these non-problems doesn’t work either. Simply put, solar and wind power cannot replace oil and gas in producing electricity to supply the grid.

  This is because solar and wind are unreliable. When the wind doesn’t blow and the sun doesn’t shine (which is often in most places), there is no power output at all.

  The only way to overcome the reliability problem is with immensely expensive batteries. And battery production itself uses up enormous amounts of electricity, poisonous chemicals, and metals, creating disposal problems.

  Electric Vehicles Aren’t So Green

  Solar and wind can be supplemented by oil and gas (and nuclear power), but they cannot replace them due to unreliability and the expense of batteries.

  And do you think you’re going green by driving an electric car? Well, research by the Swedish Environment Institute reveals that up to 17.5 tons of carbon dioxide go into producing an electric battery.

  If you keep the car for 10 years or longer, the battery will have to be replaced, meaning another 17.5 tons of carbon dioxide.

  And electric charging stations largely depend on fossil fuels to generate electricity.

  In comparison, a standard internal combustion engine might produce about 45 tons of carbon dioxide after 160,000 miles, about 16 years of use on average.

  But the Biden administration seems determined to push the Green New Deal anyway, despite all the costs and little benefit.

  Get ready for higher energy costs, power outages, death and damage from cold spells, and possible lines at the gasoline pump. The Green New Deal is a policy fiasco in the making that will take us back to the 1970s.

  ESG Investing

  Of course, many corporations are fully on board with the environmental agenda because it means subsidies and tax breaks if they adopt the right policies.

  Have you heard about ESG investing?

  If not, you soon will. ESG stands for Environmental, Social and Governance, which are the three factors business managers and investment advisors are implored to take into account when making business and asset allocation decisions.

  Prior to ESG, managers were only accountable for corporate profits (which could be based on a wide array of factors, including good personnel policies and good community relations), and investment managers were only accountable for consistent high risk-adjusted returns.

  Making the environment better, improving society and ensuring good governance outside the boardroom was considered to be the job of government, civil society or not-for-profit entities. Companies were all about the bottom line. Not anymore.

  Because of their wealth, scope and influence, companies have been hijacked by the power elite and ideologues to carry water for a host of social programs and causes from public housing and education to climate change.

  They’re going from shareholder capitalism — which places the shareholders as number one — to “stakeholder” capitalism — which takes the broader community into consideration.

  Maybe that’s good overall, maybe it’s not. Regardless, what one thinks of this evolution in the purpose of a corporation is irrelevant; it’s happening, and investors need to take it into account because it can be extremely profitable.

  Might as Well Profit From It All

  Assets under management in ESG funds are now over $2 trillion, more than the largest sovereign wealth funds. These funds and large asset managers such as BlackRock are scouring the corporate landscape for companies that meet their ESG investment criteria.

  Since there is a scarcity of attractive ESG companies relative to the funds chasing ESG investments, the stocks of good candidates are likely to outperform. Funds are also putting pressure on corporate management to conform existing corporate practices to ESG measurements or face shareholder revolts.

  Since the ESG target companies are overwhelmingly green (in areas of solar and wind power, recycling and efficient construction), investors may find even better opportunities in blue projects involving water recycling, irrigation, and cutting-edge vertical farming.

  Again, whether you agree with the new model or not is irrelevant. It’s happening anyway.

  These trends are just beginning, so there’s still time for investors to jump on the red-hot green and blue bandwagon and put their portfolios in the black.

  Tyler Durden
  Sun, 05/09/2021 – 18:15

• Compressed Air Grid 'Battery' To Challenge Tesla Powerpack 
  Compressed Air Grid ‘Battery’ To Challenge Tesla Powerpack 

  Solar, wind, batteries, nuclear, tidal power, among others, provide carbon-free electricity. But their generation is usually immediately absorbed into the power grid for use or stored in lithium-ion batteries. Large-scale energy hoarding is expensive, and quite frankly, with base metal prices skyrocketing, maybe unattainable unless the Biden administration allocates billions of dollars to upgrade the grid. 

  Toronto-based Hydrostor has found a solution to storing power on the grid that doesn’t involve batteries but instead stores energy in the form of compressed air in underground chambers. 

  

  California is becoming the new site for two new compressed-air energy storage plants that “will soon rival the world’s largest non-hydroelectric facilities and hold up to 10 gigawatt-hours of energy,” said Popular Mechanics. 

  Compressed air is part of a growing type of energy storage to stabilize the grid. Here’s how Hydrostor’s: A-CAES technology works:

  A-CAES uses surplus electricity from the grid or renewable sources to run an air compressor. The compressed air is then stored in a big underground tank until energy is needed, at which point it’s released through a turbine to generate electricity that’s fed back into the grid.

  Rather than vent the heat generated as the air is compressed, Hydrostor’s system captures that heat and stores it in a separate thermal storage tank, then uses it to reheat the air as it’s fed in to the turbine stage, which increases the efficiency of the system. This could prove to be key; compressed air storage systems have typically offered round-trip efficiencies between 40-52 percent, and Quartz is reporting more like 60 percent for this system.

  Hydrostor’s A-CAES also makes use of a closed-loop reservoir to maintain the system at a constant pressure during operation. The storage cavern is partially filled with water and as the compressed air is piped in, the water is forced into a separate compensation reservoir. Later, when the air is needed, the water is pumped back into the air storage cavern, pushing the air out towards the turbine. – New Atlas 

  Hydrostor provides three-minute of how the technology works. 

  Hydrostor has two major projects in active development – one in southern Kern County and one in Central California, creating a more practical way to store energy on the grid than costly batteries. 

  “Hydrostor’s patented and commercially proven A-CAES technology provides 8-12+ hours of energy storage, versus the 1-4 hours that current battery technologies can feasibly provide,” Hydrostor said. 

  When it comes to longevity, a compressed air energy storage plant has a lifespan of more than 50 years, far outpacing battery farms, like Elon Musk’s Tesla Powerpacks. 

  … and to be clear – all this talk about net-zero carbon emissions talk in the next couple of decades is just a guess by policymakers. 

  Tyler Durden
  Sun, 05/09/2021 – 17:50

Digest powered by RSS Digest

• Three Shot In Times Square Including Four-Year-Old Girl
  Three Shot In Times Square Including Four-Year-Old Girl

  New York’s Times Square was temporarily cordoned off on Saturday after at least three people were injured in a shooting, according to NBC News, citing police. The suspect, pictured below, was caught on camera.

  Earlier today, 3 people were shot in @TimesSquareNYC, including a 4-year-old child.

  Help your @NYPDDetectives identify the man pictured below — they want to talk him about the incident.

  Call 800-577-TIPS with info. pic.twitter.com/GrgPUu7nCC

  — Commissioner Shea (@NYPDShea) May 9, 2021

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

  The victims, a four-year-old girl, a 23-year-old and a 43-year-old received non-fatal wounds after one of four men involved in an altercation drew a gun around 5 p.m. and opened fire. All of the victims were bystanders, while the little girl underwent surgery and is expected to survive.

  “Two shots. They was bleeding the toddler was bleeding and the mom was crying,” said one Times Square vendor.

  All of the people struck were bystanders. They include a four-year-old, 23-year old, and 43-year-old. None are related. One is a tourist visiting the city from Rhode Island. They were struck when one of four men in a dispute pulled a gun and fired shots, per sources.

  — Myles Miller (@MylesMill) May 8, 2021

  A shooting in #TimesSquare: A four-year-old was hit.

  All of these officers are on scene to help. A female officer, with the child in her arms, trucks it to the ambulance down the block. pic.twitter.com/nDfq8BaJAd

  — Pete Goode (@720threat) May 9, 2021

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  It is unclear what the dispute was over which led to the shooting. No suspects have been detained. The shooting came just one hour before a scheduled rally in memory of Daunte Wright, a black man who was fatally shot by a police officer in Minnesota in early April. Police have not linked the shooting to the event at this time.

  There have been 416 shootings in New York City through May 2 of this year, up 83% from this time last year when everyone was locked down, accordsing to police data.

  “A child in one of the top tourist spots in the world on a spring Saturday isn’t safe from this nation’s gun violence epidemic,” said local TV reporter Steve Keeley of Fox29.

  A child was one of two people shot this Saturday afternoon in Times Square. A child in one of the top tourists spots in the world on a spring Saturday isn’t safe from this nation’s gun violence epidemic @FOX29philly https://t.co/5RFuiaAfUB

  — Steve Keeley (@KeeleyFox29) May 8, 2021

  The shooting comes amid a spate of attacks against asians committed primarily by black suspects. Last Sunday, two Asian women were assaulted by a black woman wielding a hammer – leading to one of the victims, a 31-year-old Taiwanese woman, being hospitalized with a head wound.

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  Tyler Durden
  Sat, 05/08/2021 – 23:45

• Kauai Real Estate In Total Frenzy As Buyers Snap Up Multi-Million Dollar Homes Sight-Unseen
  Kauai Real Estate In Total Frenzy As Buyers Snap Up Multi-Million Dollar Homes Sight-Unseen

  Real estate on the no-longer sleepy island of Kauai has gotten so hot that people are buying multi-million dollar homes sight-unseen, as the pandemic-fueled housing boom continues seemingly unabated.

  

  According to the Wall Street Journal, luxury properties on Kauai – with a population of 72,000 permanent residents – start at $3 million, while just 3% of the island’s 550 square miles are open to development, meaning that housing stock in all categories is scarce. And according to the report, Californians looking for primary and secondary homes are squeezing prices even higher.

  Ms. Cook, 46, a former commercial real-estate broker, and her husband, 51, a lawyer, had considered looking for a new home in the suburbs north of San Francisco, but were reluctant to test their luck in a seller’s market, where all-cash deals and multiple bidders had become the rule.

  “I looked at him,” says Ms. Cook, “And I said, ‘OK, great, when are we leaving?’ ”

  The Cooks made an offer of $1.8 million, sight unseen, on a furnished three-bedroom, three-bathroom bungalow located on Kauai’s North Shore, which is known for its verdant mountains and beautiful beaches. The 2,200-square-foot house, with a great room that opens to the outdoors, is on a ¼-acre lot that is a five-minute drive from the ocean. The couple and their two boys, now 4 and 5 years old, moved in time for Thanksgiving. -WSJ

  Kauai, once a sleepy and very rainy destination, has become the state’s prime destination for luxury-minded homeowners – with Mark Zuckerberg and wife Priscilla Chan having snapped up 1,400 contiguous acres – including approximately 600 acres just purchased in March, according to a family spokesman.

  Matthew G. Beall, CEO of Hawai’i Life real-estate, says the island’s residential sales above $3 million went from 23 in 2019 to 38 last year, and that 2020’s top sale on the island (and all of Hawaii in fact), was a 1.7 acre waterfront compound on Hanelai Bay on the North Shore of Kauai.

  The home has eight bedrooms and 10 bathrooms spread across three structures. It sold for $36.7 million last April in an all-cash deal to an undisclosed buyer. The agent on the sale, Neal Normal of Hawai’i Life’s luxury platform, says that more buyers are making pandemic-era offers without a viewing. Last year, he said that of the 30 or so residential sales he handled with an average price of around $10 million, six were sold sight unseen. In his previous 30 years as an agent, just one listing was bought without a viewing.

  Despite some 80 inches of rain per year (and 360 inches at the center of the island at Mount Awialeale – over 5,000 feet above sea level), Kauai’s North Shore has become the island nation’s most expensive market, according to the Big Island’s Rebecca Keliihoomalu – VP of Corcoran Pacific Properties.

  Last year, there were six residential sales on the island north of $10 million, compared to just two in the Wailea-Makena area of southwest Maui, and three above Honolulu.

  That said, buying properties on Kauai is not without risks.

  “Every year we have two or three floods,” said Kauai landscaper Brandon Miranda, a third-generation islander, whose home-care and landscaping business looks after high-end estates for second-home owners.

  “Everyone wants to be on the beach,” says Miranda. “But this is a tropical environment and all that moisture causes problems,” which affect everything from electrical outlets to AC units – on top of the flooding.

  This spring, Kauai and other islands were hit by torrential rains and isolated flooding. A resulting mud slide has impeded access to Hanalei. Mr. Miranda says local Hanalei owners can expect problems for months to come.

  What Mr. Miranda calls super-high-maintenance homes sit on what Hawai’i Life’s Mr. Beall calls “one of the most incredibly beautiful places on the planet.” -WSJ

  Just months ago, one Hanalei oceanfront five-bedroom house sitting on 1.11 acres went on the market for an asking price of $24.75 million.

  Another home on the market belongs to Canadian entrepreneur Brent Naylor, 75, and his wife Gayle, 74. They bought an empty 4/5 of an acre lot perched above Hanelai for $1.6 million, then proceeded to spend around $18 million to construct an 8,200 sqft four-bedroom house, which includes an outdoor kitchen and a 1,200 sqft master suite with a fireplace and private terrace.

  

  It’s been listed for sale for over 200 days at $22.75 million – so perhaps even Hawaii’s hottest market has limits.

  Tyler Durden
  Sat, 05/08/2021 – 23:30

• Turn Over Routers Or Face Subpoenas, Arizona Lawmakers Tell Maricopa County
  Turn Over Routers Or Face Subpoenas, Arizona Lawmakers Tell Maricopa County

  Submitted by Zachary Stieber

  

  Legislators in Arizona and officials in the state’s largest county clashed anew this week over election audit subpoenas, with county officials refusing to hand over routers and claiming they do not have passwords to access administrative control functions of election machines.

  Arizona’s Senate told Maricopa County on Friday that it would issue subpoenas for live testimony from the county’s Board of Supervisors unless it received the materials that are being withheld. “We’ve been asked to relay that the Senate views the County’s explanations on the router and passwords issues as inadequate and potentially incorrect,” a lawyer for the Senate said in an email to county officials.

  The Arizona Senate subpoenaed a slew of election materials, such as ballots, following the 2020 election. Lawmakers also issued subpoenas for election machines, passwords, and other technology.

  Maricopa County alleged in a lawsuit that the request for materials was overly broad and threatened voter privacy. A judge, though, ruled that they were “the equivalent of a Court order.” But the county said this week it is not turning over routers or router images, claiming that doing so poses a significant security risk to law enforcement.

  The county has also informed the Senate’s audit liaison, former Republican Secretary of State Ken Bennett, that it does not have passwords to access administrative functions on Dominion Voting Systems machines that were used to scan ballots during the election.

  “They’ve told us that they don’t have that second password, or that they’ve given us all the passwords they have. They’ve also told us that they now can’t, as they promised a couple weeks ago, provide our subcontractors with the virtual access to the routers and hubs and other things at the Maricopa County tabulation and election center, as was part of the subpoenas,” Bennett told One America News at the site of the audit in Phoenix.

  John Brakey, a Democrat who is serving as an assistant to Bennett, told the broadcaster that he was “blown away” by the password development.

  “It’s like leasing a car and they refuse to give you the keys. They’re supposed to be running the election. You know what’s wrong? Sometimes these vendors have too much power, and we’re voting on secret software, and that’s why this recount down here is very important,” he added.

  Jack Sellers, the Republican chairman of the Maricopa County board, said Friday that he is angered by allegations of corruption and would not address every allegation, but would speak to the password issue.

  “The specific password and security tokens Ken Bennett referenced this week provide access to proprietary firmware and source code. Elections administrators do not need to access this information to hold an election, and we do not have it in our custody,” he said in a statement.

  

  The county board called an emergency meeting later on Friday. The board was going to consider legal advice and litigation regarding its non-compliance with the Senate subpoenas.

  In a response to the Senate’s lawyer, Allister Adel, Maricopa County’s attorney, said that the county has “already produced every password and security key for the tabulators that is [sic] within the County’s possession.”

  “It does not have any others,” Adel added. The county is working to figure out if there is “a safe manner” to get the Senate information from the routers without risking non-election data.

  Dominion, whose machines are used in about half of U.S. states, did not respond to a request for comment. The company has said it supports forensic audits by federally-accredited laboratories and that Cyber Ninjas, which is leading the Arizona audit, is not verified. Both Dominion and Sellers noted that Maricopa County contracted its own audits, one for machines and another for ballots.

  But Brakey, the assistant Senate liaison, has called the description of those audits misleading. The ballot batches were picked beforehand and auditors only analyzed a small percentage of the ballots cast in the election, he said, while the machine testing could only determine whether the technology was working well at the time of the review.

  “They claim that’s an audit. I call it fatally flawed,” he told One America News.

  Maricopa County Sheriff Paul Penzone, meanwhile, joined other county officials in decrying the Senate’s attempt to obtain the routers.

  “Its most recent demands jeopardize the entire mission of the Maricopa County Sheriff’s Office,” he said in a statement.

  “We are talking about confidential, sensitive, and highly-classified law enforcement data and equipment that will be permanently compromised. The current course is mind-numbingly reckless and irresponsible. I look forward to briefing them on the horrendous consequences of this demand and the breadth of its negative impact on the public safety in this County.”

  Tyler Durden
  Sat, 05/08/2021 – 23:00

• Justice Dept. Proposes New Rule To Serialize "Ghost Gun" Kits 
  Justice Dept. Proposes New Rule To Serialize “Ghost Gun” Kits 

  President Biden has promised to defeat the National Rifle Association and wage war on ghost guns in his first hundred days. He appears to be making good on both, as the Justice Department on Friday released a proposed rule that changes the definition of a firearm to require 80% lower kits to include serial numbers, according to AP News. 

  

  The proposed rule change comes as President Biden has declared war on “ghost guns.” These weapons have unserialized lower receivers (the regulated part of a gun) that can be easily bought in a kit form online or at a gun store (without a background check), and in a few hours, with some drilling and additional fabrication, can be transformed into a fully functional weapon after the upper receiver (unregulated part of the gun) is attached. 

  

  

  The federal government is terrified as the popularity of ghost guns has increased over the years. Anyone can buy 80% lower kits online and watch a few YouTube videos, and have a working lower receiver after trigger parts are installed, totally untraceable to the government. These weapons have become popular with gangs and other criminals and have been turning up in more violent crimes across the country.

  Between 2016 to 2020, the DoJ estimates about 23,000 ghost guns were seized by law enforcement agencies across the country, and some were identified to be connected with homicides or attempted homicides.

  A senior Justice Department official told AP the proposed rule sets forth several factors in determining whether the unfinished lower receiver could be easily convertible into a working firearm. The official said if the lower receiver meets that criteria, manufacturers will be required to include a serial number. The rule would also require serial numbers attached to un-serialized weapons traded in or turned into federal firearms dealers.

  “Criminals and others barred from owning a gun should not be able to exploit a loophole to evade background checks and to escape detection by law enforcement,” Attorney General Merrick Garland said in a statement. “This proposed rule would help keep guns out of the wrong hands and make it easier for law enforcement to trace guns used to commit violent crimes, while protecting the rights of law-abiding Americans.”

  There was no mention of 3D-printed ghost guns that can be entirely manufactured at home. The 9th U.S. Circuit Court of Appeals in San Francisco recently reinstated a Trump administration order that authorized removing ghost guns from the State Department’s Munitions List. This allowed untraceable 3D-printed gun blueprints to be shared online. 

  Regulating 80% lower kits might be an easy task for the Biden administration. They will have a near-impossible time regulating 3D-printed guns that can be entirely printed at home. 

  Tyler Durden
  Sat, 05/08/2021 – 22:30

• Beijing's Elusive Bid For Pricing Power On Rare Earths
  Beijing’s Elusive Bid For Pricing Power On Rare Earths

  Authored by Damien Ma via MacroPolo.org,

  From ventilator and chip shortages to what kind of ships traverses through which canals, the linkages and nodes of the global economy have rarely been in the spotlight as much as they have over the last 12 months. Many of these disruptions are short-term ones, but they have also brought attention to longstanding challenges of supply chain resilience and dependence.   

  One of those challenges is that of China’s grip on rare earth elements (REEs), a key input in permanent magnets that are in everything from smart phones and wind turbines to electric vehicles and missile guidance systems.   

  

  Figure 1. REE Demand for Permanent Magnets by Application, 2010-2025  

  

  Source: Statista estimates; Quest Rare Minerals.  

  This is not the first time these 17 elements that sit at the bottom of the periodic table have raised alarm from Tokyo to Washington. Back in 2010, Beijing was roundly accused of embargoing REE exports to Japan as Sino-Japan relations soured.  

  At the time, China was responsible for some 90%-plus of REE supplies globally, even though its estimated reserves are around just 25%-33% of the global total. Given the wide belief in Japan and the United States—which also happen to be the largest importers of REEs—that China could weaponize this resource, its supply monopoly raised hackles and intensified calls for diversification. 

  A decade since, has much changed? I had trekked to Inner Mongolia’s Baotou Rare Earth Hi-Tech Zone back in 2010 to gain more insight into China’s designs on the REE industry and how that affected the global market. It’s worth revisiting this industry now to understand how its dynamics shaped Beijing’s thinking and intent on managing this resource.  

  “Selling gold for the price of radishes”  

  China has long viewed REEs as a strategic resource, with the industry’s development spurred by a quip supposedly attributed to Deng Xiaoping: “The Middle East has oil, but China has rare earths.”  

  Yet as China became the dominant supplier of REEs over subsequent decades, it saw the price of REEs plummet, hardly the price-setting influence that an OPEC exerted on oil prices. That frustrated the economic nationalists in Beijing, grumbling that China was essentially “selling gold at the price of radishes.”   

  Much of that frustration stemmed from the government’s inability to regulate a wild industry that was rife with smuggling. At one point in 2011, it was estimated that there was a gap of 120% between REE volumes that China officially exported and what other countries imported. Meanwhile, REE mining was also exacting a hefty environmental toll.  

  The Chinese government decided it needed to consolidate the REE industry. Beijing thought it could clean up the illegal business, while also receiving some of that price-setting power that has long eluded it. What’s more, the move also dovetailed with rolling out the original “strategic emerging industries” initiative, the start of China’s effort to indigenize supply chains and move up the value chain.  

  In other words, why export this resource for pennies when China should keep more of it for its own tech industries of the future?  

  This is where Baotou comes into play. Part of the industry restructuring was intended as a “resource for technology” play. That is, instead of exporting REEs, China did what it knows best: set up zones to attract high-tech manufacturing investment in exchange for easy access to critical materials. Baotou, of course, was and still is China’s largest production base of REEs.   

  Did the strategy work?  

  Although economic nationalist in orientation, China’s REE policy was a far cry from banning exports (see Figure 2). The stringent export quotas in the 2011-2012 period certainly drove a spike in prices, but that was short-lived. By 2014, it became apparent that China was ramping up exports rather than reducing them, and prices quickly corrected and have remained relatively low since. The reality reflects Beijing’s perennial struggle in imposing its will on a fragmented, messy, and profit-driven industry.  

  Figure 2. China’s REE Exports Have Not Declined Over Last Decade 

  

  Source: Wind. 

  It is also not entirely clear whether an actual embargo took place in 2011 or whether it was the result of Beijing’s export quotas. But whatever the judgment in hindsight, the damage has already been done to China as a reliable supplier of REEs, leading to gradual resource diversification. China is now just under 60% of global REE production (see Figure 3).  

  Figure 3. Global Share of REE Production (in tons)

  

  Source: US Geological Survey.

  The relative abundance of REE reserves globally, it turns out, means that China’s bid for price-setting power rested on faulty assumptions of its leverage. Despite national security hawks’ continued pitch for exercising pricing power, Beijing seems to have recognized that it no longer has a monopoly on production.  

  Instead of obsessing over what’s in the ground and how much to sell it for, China appears to have shifted tactic to redouble its effort on developing the midstream REE processing industry and downstream end products like magnets.  

  A clear indication of that focus was President Xi Jinping’s recent visit to Jiangxi—a major hub of REE production. Rather than a mining operation, Xi toured JL Mag, a downstream company that supplies magnets to the likes of Goldwind and BYD. We will look further at the midstream and downstream dynamics of the REE industry in future analysis. 

  Tyler Durden
  Sat, 05/08/2021 – 22:00

• NATO Allies "Take Over" Black Sea For Military Exercises
  NATO Allies “Take Over” Black Sea For Military Exercises

  Authored by Rick Rozoff via AntiWar.com,

  The title is courtesy of the Hungary-based Transylvania Now news site. The Pentagon’s Special Operations Command Europe kicked off the Trojan Footprint 21 exercise on May 3; what is identified as its premier special operations forces drills.

  The war games will be held until May 14 in five Black Sea and Balkans nations: Bulgaria, Georgia, Montenegro, North Macedonia and Romania. Special forces from the U.S. – all branches of the armed forces including Green Berets – the five host nations, Britain, Germany, Spain and Ukraine are involved. With the exception of Turkey, all Black Sea littoral states but Russia are participating.

  

  The exercise is designed for “enhancing interoperability between NATO allies” to prepare for “counter[ing] myriad threats.” Though there aren’t a thousand… only one threat. Russia.

  Just as it is all-service so it is “all-domain” with air, land and sea forces engaged in combating an unnamed adversary in the Black Sea. One which has a fleet based in Sevastopol in Crimea.

  “While the exercise is focused on improving the ability of SOF to counter a myriad of threats, it also increases integration with conventional forces and enhances interoperability with our NATO allies and European partners,” Col. Marc V. LaRoche, Deputy Commander, U.S. Special Operations Command Europe described in a statement. “Most importantly, Trojan Footprint fortifies military readiness, cultivates trust, and develops lasting relationships which promote peace and stability throughout Europe.”

  Follow the exercise through May 14th with #TrojanFootprint and #SOFinEurope https://t.co/a8MSaIE2lH

  — U.S. Embassy Tbilisi (@usingeo) May 4, 2021

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

  Trojan Footprint 21 is occurring simultaneously with the massive DEFENDER-Europe 21 war games in the same area and ahead of the Steadfast Defender exercise, also to be held in the Black Sea region.

  Tyler Durden
  Sat, 05/08/2021 – 21:00

• Chinese Military Discussed Weaponizing COVID In 2015 'To Cause Enemy's Medical System To Collapse'
  Chinese Military Discussed Weaponizing COVID In 2015 ‘To Cause Enemy’s Medical System To Collapse’

  In 2015, Chinese military scientists discussed how to weaponze SARS coronaviruses, five years before the COVID-19 pandemic emerged in Wuhan, China – where CCP scientists were collaborating with a US-funded NGO on so-called ‘gain of function’ research to make bat coronaviruses infect humans more easily.

  

  In a 263-page document, written by People’s Liberation Army scientists and senior Chinese public health officials and obtained by the US State Department during its investigation into the origins of COVID-19, PLA scientists note how a sudden surge of patients requiring hospitalization during a bioweapon attack “could cause the enemy’s medical system to collapse,” according to The Weekend Australian (a subsidiary of News Corp).

  It suggests that SARS coronaviruses could herald a “new era of genetic weapons,” and noted that they can be “artificially manipulated into an emerging human ­disease virus, then weaponized and unleashed in a way never seen before.”

  The chairmen of the British and Australian foreign affairs and intelligence committees, Tom ­Tugendhat and James Paterson, say the document raises major concerns about China’s lack of transparency over the origins of COVID-19.

  The Chinese-language paper, titled The Unnatural Origin of SARS and New Species of Man-Made Viruses as Genetic Bioweapons, outlines China’s progress in the research field of biowarfare.

  “Following developments in other scientific fields, there have been major advances in the delivery of biological agents,” it states.

  “For example, the new-found ability to freeze-dry micro-organisms has made it possible to store biological agents and aerosolise them during attacks.”

  Ten of the authors are scientists and weapons experts affiliated with the Air Force Medical ­University in Xi’an, ranked “very high-risk” for its level of defence research, including its work on medical and psychological sciences, according to the Australian Strategic Policy Institute’s ­Defence Universities Tracker.

  The Air Force Medical University, also known as the Fourth Medical University, was placed under the command of the PLA under President Xi Jinping’s military reforms in 2017. The editor-in-chief of the paper, Xu Dezhong, reported to the top leadership of the Chinese Military Commission and Ministry of Health during the SARS epidemic of 2003, briefing them 24 times and preparing three reports, according to his online ­biography. -The Australian

  

  “We were able to verify its ­authenticity as a document authored by the particular PLA ­researchers and scientists,” according to Robert Potter, a digital forensics specialist who has worked for the US, Australian and Canadian governments – and has previously analyzed leaked Chinese government documents, according to the report. “We were able to locate its genesis on the Chinese internet.”

  Former US Secretary of State Mike Pompeo and his chief China adviser, Miles Yu, referenced the document in a February op-ed in the Wall Street Journal, writing that “A 2015 PLA study treated the 2003 SARS coronavirus outbreak as a ‘contemporary genetic weapon’ launched by foreign forces.”

  

  And according to Peter Jennings, executive director of the Australian Strategic Policy Institute, “There is no clear distinction for research capability because whether it’s used offensively or defensively is not a decision these scientists would take,” adding “If you are building skills ostensibly to protect your military from a biological attack, you’re at the same time giving your military a capacity to use these weapons ­offensively. You can’t separate the two.”

  The study also examines the optimum conditions under which to release a bioweapon. “Bioweapon attacks are best conducted during dawn, dusk, night or cloudy weather because intense sunlight can damage the pathogens,” it states. “Biological agents should be released during dry weather. Rain or snow can cause the aerosol particles to precipitate.

  “A stable wind direction is ­desirable so that the aerosol can float into the target area.”

  Among the most bizarre claims by the military scientists is their theory that SARS-CoV-1, the virus that caused the SARS epidemic of 2003, was a man-made bioweapon, deliberately unleashed on China by “terrorists”. -The Australian

  News of the document follows a May 3 report that the Wuhan Institute of Virology was working with the Chinese government in a team which comprised five military and civil experts, “who conducted research at WIV labs, military labs, and other civil labs leading to “the discovery of animal pathogens [biological agents that causes disease] in wild animals,” according to the Epoch Times.

  And as we noted in March, the US National Institutes of Health (NIH) – headed by Dr. Anthony Fauci, “had funded a number of projects that involved WIV scientists, including much of the Wuhan lab’s work with bat coronaviruses.”

  

  In 2017, Fauci’s agency resumed funding a controversial grant to genetically modify bat coronaviruses in Wuhan, China without the approval of a government oversight body, according to the Daily Caller. For context, in 2014, the Obama administration temporarily suspended federal funding for gain-of-function research on bat coronaviruses. Four months prior to that decision, the NIH effectively shifted this research to the Wuhan Institute of Virology (WIV) via a grant to nonprofit group EcoHealth Alliance, headed by Peter Daszak.

  

  The NIH’s first $666,442 installment of EcoHealth’s $3.7 million grant was paid in June 2014, with similar annual payments through May 2019 under the “Understanding The Risk Of Bat Coronavirus Emergence” project.

  

  Notably, the WIV “had openly participated in gain-of-function research in partnership with U.S. universities and institutions” for years under the leadership of Dr. Shi ‘Batwoman’ Zhengli, according to the Washington Post‘s Josh Rogin.

  

  So now we have a 2015 document from the Chinese military describing using COVID as a bioweapon – four years before the COVID-19 pandemic breaks out just miles away from a Chinese lab working to make bat COVID more transmissible to humans, and you’re a conspiracy theorist peddling ‘debunked lies’ if you think they might be related.

  And for those who say ‘COVID-19 couldn’t be man-made because a laboratory-created virus would have tell-tale signs of manipulation’ – au contraire. As Nicholas Wade noted three days ago in the Bulletin of the Atomic Scientists, “newer methods, called “no-see-um” or “seamless” approaches, leave no defining marks. Nor do other methods for manipulating viruses such as serial passage, the repeated transfer of viruses from one culture of cells to another. If a virus has been manipulated, whether with a seamless method or by serial passage, there is no way of knowing that this is the case. “

  It’s as if the painfully obvious answer was right in front of us, only to be shrouded in propaganda by China-friendly politicians, big tech, and news outlets running cover for what should be the easiest game of connect-the-dots on the planet. Luckily, what was taboo as recently as a year ago will soon be exposed for the world to see, thanks to The Bulletin Of Atomic Scientists which earlier this week dared to open The Wuhan Virus “Pandora’s Box“…

  Tyler Durden
  Sat, 05/08/2021 – 21:00

• Dollar Stores Dominate US Retail Store Openings 
  Dollar Stores Dominate US Retail Store Openings 

  The wildly uneven US economic recovery since the virus pandemic began in early 2020 has given rise to dangerous levels of inequality, otherwise known as the “K-shaped” recovery. The “K” represents an immediate recovery for the rich but continued economic hardships for the working poor. Payrolls are still millions of jobs short of pre-COVID levels, and millions of others continue collecting stimulus checks. Corporate America understands this souring picture and has found a way to capitalize on an increasingly larger population of working poor Americans by opening a flurry of dollar stores across the country. 

  Coresight Research, a firm that focuses on retail & technology companies, reports about 45% of the 3,597 store openings of large chains in the US this year are from Dollar General, Dollar Tree, and Family Dollar. 

  

  The pandemic resulted in millions of Americans who instantly fell into poverty and will remain there as the economy is short 8 million jobs from pre-COVID levels. Many of these folks enjoy the high-life, collecting Biden stimulus checks with minimal incentive to find a job. 

  

  Corporate America understands the dynamics at play as failed fiscal and monetary policies could not lift all boats. Anyone who owned stocks, bonds, real estate, classic cars, fine art, wine, and anything else of value saw incredible valuation gains over the past year as those without assets (working poor) saw very little financial improvements besides a few government stimulus checks. 

  This means that millions of folks in a pre-Covid world who shopped at middle to upper-class shops can no longer afford and have migrated to low-income dollar stores for survival. Corporate America is capitalizing on this trend by expanding these stores at a very fast clip. 

  “We’ve seen a bifurcation in the economy,” said Ken Fenyo, the president and head of advisory and research at Coresight. “So while the wealthy have done well and continue to do well since the Great Recession, there’s certainly a lot of the population that has not done as well. The dollar stores appeal strongly to that segment of the population. That’s probably the overriding reason we see for the growth in the format.”

  The recent surge of new dollar stores across the country is indicative not of a robust recovery but one that is extremely uneven, benefiting a handful at the expense of the many, with deep residual scarring that may last a generation. 

  Tyler Durden
  Sat, 05/08/2021 – 20:30

• New York Baseball Stadiums To Seat Fans in Separate Vaccinated And Unvaccinated Sections
  New York Baseball Stadiums To Seat Fans in Separate Vaccinated And Unvaccinated Sections

  By Zachary Stieber of The Epoch Times

  

  People who have not received a COVID-19 vaccine will be seated separately from those who have in two major baseball stadiums in New York, officials announced this week. The segregation will be enforced at Fans at Citi Field and Yankee Stadium, home to Major League Baseball’s New York Mets and New York Yankees.

  “There are going to be separate sections for those who are vaccinated,” Randy Levine, president of the Yankees, told a May 5 briefing he joined with New York Gov. Andrew Cuomo.

  “As we sell tickets on an individual basis, they will go into one of those two areas, either unvaccinated or vaccinated because we will have some inventory in both types of location,” added Sandy Alderson, the president of the Mets.

  The details of how the new policy will be enforced are still being developed.

  Sections with people who are vaccinated against the CCP (Chinese Communist Party) virus, which causes COVID-19, can be full, with no capacity restrictions. But in sections with unvaccinated people, fans will need to be spaced apart six feet. All fans, regardless of their status, must wear a mask, even though the games are played outdoors.

  “For baseball reopening, May 19th. Two different categories. Not Yankees/Mets. Vaccinated/Unvaccinated,” Cuomo, a Democrat who has refused calls to resign over sexual assault allegations and his administration hiding the number of elderly New Yorkers who died from COVID-19, told the briefing.

  “I want to thank the Mets and the Yankees from the bottom of my heart. It’s a pain in the neck for them to operate this vaccinated and unvaccinated. The gentlemen who run the stadiums are here. It’s not easy to do this. Nobody’s done this before. Nobody’s done any of this before, let’s be honest,” he added.

  Cuomo insisted the new plan is legal.

  

  Fans will be able to use the Excelsior Pass, an application, to show proof of vaccination when entering one of the stadiums, or proof of a negative COVID-19 test. The app was developed by IBM in partnership with the state. It was tested earlier this year at NBA and NHL games before being rolled out officially in March.

  The Yankees reported 10,850 fans at their stadium on Tuesday night. That’s the most they can have under current restrictions. In a bid to get more New Yorkers vaccinated, the teams are offering people who get a shot at a stadium a free ticket.

  “Basically you come to the game … you take a vaccine shot, you get a voucher, you can go to that game. If that game’s sold out, you can go tomorrow night and go to a game of your choice,” Levine said. Officials at Citi Field said approximately 2,000 people are getting vaccinated there each day.

  Also at the briefing, Dr. Howard Zucker, the state’s health commissioner, refused to comment on a report that said Cuomo’s senior aides delayed the release of an audit on nursing home deaths for months.

  “This is an ongoing investigation, so I won’t answer any questions at this point,” he said.

  Cuomo called the pressure on state officials regarding the shielding of death numbers political. The shielding is being probed by the Department of Justice. He also denied that his administration withheld the numbers because of fear the data would be used against them. One of Cuomo’s top aides, Melissa DeRosa, said as much in a conference call with state Democratic lawmakers earlier this year.

  Tyler Durden
  Sat, 05/08/2021 – 20:00

• Ethereum Soars To Record High Above $3,800 As JPMorgan Lays Out 6 Reasons Why Explosive Move Will Continue
  Ethereum Soars To Record High Above $3,800 As JPMorgan Lays Out 6 Reasons Why Explosive Move Will Continue

  Back on April 25, we quoted a prominent billionaire VC who said that “Ethereum is the world’s most interesting trade right now” and we predicted that “Ethereum Is About To Make An Epic Breakout Over Bitcoin.“

  That’s exactly what happened: two weeks later, and one report from FundStrat’s Tom Lee putting out a $10,500 price target on Ethereum (and $100,000 on bitcoin)..

  

  … and ethereum has returned 66% to bitcoin’s paltry 16%, a 4x outperformance which even to the most jaded traders constitutes an “epic breakout.”

  

  More importantly, as bitcoin has languished in the $50-$60K range over the past month, ETH has nearly doubled and moments ago traded at an all time high above $3,800.

  

  Meanwhile, the ratio of ETH/BTC finally broke out above its recent highs..

  

  … and as we said two weeks ago “once the recent high is taken out, there is much more room to go… In fact, should ETHBTC hit its historical high, Ethereum would be above $5,000.” We are now just $1,200 away which at the current pace of ascent, may be reached some time next week.

  While there are many reasons for the renewed investor fascination in Ethereum, including the launch of four ethereum ETFs, the application by VanEck for the first US Ethereum ETF, the exploding demand for NFTs, interest in DeFi and generally the realization that while Bitcoin is just a token, Ethereum is an entire digital platform (not to mention the most obvious one: relentless upside momentum which in the case of bitcoin, appears to have tapered for now).

  It’s perhaps why two days after we said to brace for an “epic” ethereum breakout, JPMorgan published a note on April 27 from one of its most respected rates and fixed income (!) strategists, Joshua Young, explaining “why ETH is outperforming” in which it gave yet another reason for ethereum’s stunning outperformance compared to bitcoin: ETH valuations may be less dependent on levered  demand than BTC, a technical but occasionally important tailwind going forward.

  

  Of course, one can’t also discount the rabid frenzy to all things crypto in recent days as Elon Musk is set to appear on SNL on Saturday night and pitch the “joke” crypto, Dogecoin, whose returns have blown everything else out of the water.

  Guest starring … pic.twitter.com/buM3bTOWbX

  — Elon Musk (@elonmusk) May 7, 2021

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

  So yes, there is a risk that after Saturday night, the crypto space and especially Doge, will be hit as some take profits, but as JPMorgan writes in a new note published late on Friday and authored by its versatile cross-asset quant Nick Panagirtzoglou whose job is to cover everything from retail interest in stocks to calculating the “fair value” of bitcoin and ethereum (yes, really), the move higher in ethereum has been far more striking than the one in bitcoin, and is likely to continue.

  As the JPM quant writes in a section discussing “ethereum’s ascent”, the crypto market expanded sharply in recent weeks led by ethereum and other smaller cryptocurrencies, despite bitcoin still hovering below $60k, with Panigirtzoglou admitting that “the rise in ethereum in particular has been striking”, which he attributes to a combination of factors:

  1. The European Investment Bank (EIB) used the ethereum blockchain to issue €100mn in two-year zero-coupon digital notes last week, its first ever digital bond. The transaction involved a series of bond tokens on the ethereum blockchain, where investors purchase and pay for the security tokens using traditional fiat. The EIB digital bond is surely very significant as it represents the endorsement of the ethereum blockchain by a major official institution.
  2. The first ethereum ETF (ETHH) was launched on April 20th by Purpose Investments in Canada and three more ethereum ETFs launches followed during the same month.
  3. The structural decline in ethereum supply from the pending introduction of protocol EIP1559 in the summer. EIP 1559‘s objective is to make transaction fees on the ethereum blockchain more predictable by introducing an automatically calculated base fee for all transactions depending on network activity. Once paid with ethereum, this fee would be immediately burned, implying reduced supply of ethereum in the future. Ethereum’s theoretically unlimited supply had been a concern in the past, with ethereum in circulation rising by 5% per year over the past three years. Via burning ethereum through base fees, EIP1559 could potentially reduce the annual change of ethereum in circulation to 1-2% per year.
  4. The greater focus by investors on ESG has shifted attention away from the energy intensive bitcoin blockchain to the ethereum blockchain, which in anticipation of Ethereum 2.0 is expected to become a lot more energy efficient by the end of 2022. Ethereum 2.0 involves a shift from an energy intensive Proof-of-Work validation mechanism to a much less intensive Proof-of-Stake validation mechanism. As a result, less computational power and energy consumption would be needed to maintain the ethereum network.
  5. The sharp growth of NFTs and stablecoins in recent months are increasing the usage of the ethereum which is already dominating the DeFi ecosystem.
  6. The rise in bond yields and the eventual normalization of monetary policy is putting downward pressure on bitcoin as a form of digital gold, the same way higher real yields have been putting downward pressure on traditional gold. With ethereum deriving its value from its applications, ranging from DeFi to gaming to NFTs and stablecoins, it appears less susceptible than bitcoin to higher real yields.

  Indeed, JPM concedes that both retail and institutional demand indicators accelerated in recent weeks and months, while JPM’s position proxy based on CME ethereum futures, shown in Figure 6 more than tripled during April pointing to significant, around $250mn, of institutional buying in Etherem.

  

  The flow trajectory for ethereum funds got boosted in April from the launch of four ETFs, pointing to a mix of institutional and retail impulse (Figure 7 and Figure 8).

  

  These flow metrics look even more impressive if one compares them to the equivalent for bitcoin as shown in Figure 9 and Figure 10.

  

  The surge in interest is translating into rapidly accelerating activity on the ethereum network, similarly implying rising demand.

  

  And while we were quite surprise by the JPM’s bullish take on ethereum at least as compared with its persistent bearishness on bitcoin, it is not surprising that the bank’s quant concluded his report with a warning, noting that “the past weeks have not only seen a large expansion of the market cap of ethereum but also of other coins such as Binance Coin, Dogecoin, Litecoin, Ethereum Classic, and others. This expansion has shifted the market cap of cryptocurrencies excluding Bitcoin and Ethereum and as well as stablecoins to a staggering $800bn with the share of bitcoin in the total crypto market falling steeply from around 60% to 45% over the past month.”

  

  Of course, the JPM strategist has to admit that a big part of this decline has been helped by increased institutional interest in ethereum (the same ethereum whose “striking” move higher he believes will continue). But to the extent it is driven by a rally in other cryptocurrencies driven more by retail demand, Panigirtzoglou writes that “it carries some echoes of the froth that was evident in December 2017 when the share of bitcoin had fallen from around 55% to below 35%.”

  Of course, those who actually traded through the crash of 2018 know that it had little to do with retail participation and everything to do with the Fed’s ongoing tightening, with the Fed hiking rates three times in 2017 and then another 4 in 2018. So while there may be similarities, there is one giant difference, namely that for now the Fed has little intention to taper QE let alone hike rates. In fact, if one goes according to comparisons to the Fed’s last rate hike cycle, ethereum, bitcoin, and other cryptos, will peak some time in late 2024, one year after the Fed will have started its latest (failed) tightening cycle. The only question is how many tens (or hundreds) of thousands of dollars one ethereum token will cost then.

  

  Tyler Durden
  Sat, 05/08/2021 – 19:35

• US Troops Accused Of Pillaging Syrian Grain Silos As Russia Warns Of Increased Occupation
  US Troops Accused Of Pillaging Syrian Grain Silos As Russia Warns Of Increased Occupation

  Syrian and Russian state sources are reporting late this week that Russia’s Defense Ministry is expressing anger over what it described as noticeably increased American military activity in Syria’s northeast region, particularly an uptick in military equipment and troop deployments to the al-Jazeera area.

  The Russian Coordination Center in Hmeimim cited the increased air and land transport of American military hardware as part of the continuing violation of Syria’s sovereignty intended to block the Syrian population from its own vital resources, including wheat and energy.

  

  The Russian statement said “such military mobilization, synchronized with the economic and social situation resulting from the US blockade damages opportunities for a political solution to the crisis in Syria.”

  The most recent estimates of US troop numbers in the country put the Pentagon’s presence at around 1,000 troops – with many of these being special forces. In prior years it was believed to be anywhere from 2,000 to 3,000 – but these estimates have long likely shielded the true numbers of US personnel, including US intelligence and security contractors. 

  Days ago Damascus accused US troops of pillaging grain silos in an occupied area of the Hasaka countryside. 

  You can see these grain silos everywhere in Northeast Syria. This one is near Hasaka (city). pic.twitter.com/ixmXfAoPnE

  — Rena Netjes (@RenaNetjes) May 3, 2021

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

  “US occupation forces brought out a new batch of Syrian wheat stolen from Tal Alou silos in Hasaka countryside to the north of Iraq,” state-run SANA reported Wednesday.

  “Local sources in al-Sweidia village in al-Ya’arubia area told SANA reporter that a convoy of 35 trucks laden with wheat stolen from Tal Alou silos left under a protection of an armed group affiliated to US occupation –backed QSD militia through al-Waleed illegitimate crossing heading for north Iraq,” the report said.

  Tyler Durden
  Sat, 05/08/2021 – 19:30

• The Dynamics Behind America's Ugly Amount Of Empty Office Space
  The Dynamics Behind America’s Ugly Amount Of Empty Office Space

  Authored by Wolf Richter via WolfStreet.com,

  This sort of sudden structural collapse in demand for office space raises some existential questions for landlords…

  Companies are not massively defaulting on their office leases, and that’s the good thing. But they have put a historic amount of vacant office space on the sublease market, while continuing to pay rent to the landlord. They decided they no longer need that much space, now that some form of flexible work, or hybrid work-from-home, or even permanent work-from-anywhere is being integrated into office real estate plans, cost cutting efforts, and footprint-reduction strategies.

  Now, 14 months into the Pandemic, office occupancy – workers actually showing up at the office – is still dreadfully low. As of the end of April, office occupancy in the 10 largest metros averaged only 26.5% of where it had been just before the Pandemic, according to Kastle Systems today, whose electronic access systems secure thousands of office buildings around the country. In other words, the number of people entering these offices was still down by 73.5% from pre-pandemic levels and has barely made headway in recent months:

  

  The epicenters of work-from-home show the biggest drops in office occupancy rates, according to Kastle’s “Back to Work Barometer” at the end of April: in San Francisco, the occupancy rate was at 14.8% of the pre-Pandemic level, in New York City at 16.2%, and in San Jose at 18.0%.

  Among tech companies, 95% expect remote work for at least a few days a week; 9% said that they will never return to the office at all; another 47% said that they will need less office space; only 13% said they would need more office space, according to a survey by Savills.

  A survey of Californian residents found that 82% of the employees who now work at home want to continue working at home at least some of the time. Only 18% don’t want to work at home at all.

  But even at the top end of office occupancy, working remotely is still king. In Dallas, office occupancy is at 41.2% of where it was pre-Pandemic, and in Austin at 40.2% (click on the chart to enlarge):

  

  How exactly this will shake out for office real estate is getting complicated, as they say, with everyone involved having different ideas as to what they want.

  A survey by Accenture of 400 North American financial-services companies found that 80% of the executives would like for workers to spend four or five days in the office post-Pandemic. Many of them think that working at home makes training younger employees more difficult and is hurting company culture.

  But employees are looking for flexibility, now that they have proven that they can be productive at home.

  “You’ve seen the senior executives sitting in their office and there’s nobody behind them,” Laurie McGraw, head of Accenture’s capital markets industry team in North America, told Bloomberg. “And then you see the entry-level folks starved for in-person interaction because they need to be coached on a more regular basis. And then there’s the vast middle that’s content to be home.”

  The work-from-home year 2020 generated record profits for banks, proving that work-from-home can be managed, and many employees question the need to commute every day. According to Rob Dicks, Accenture’s talent and organization head for capital markets, employees are likely to push back against a full-time return.

  Despite whatever executives would like, the reality of the cost-cutting aspects of working from home has already set in. According to Accenture’s survey, of the same executives:

  • Nearly two-thirds expect to cut their office footprint by 11% to 40% over the next nine months.

  • Over half are planning to relocate employees to new lower-cost locations.

  • 9% said they’ll close their headquarters in a major market.

  Financial firms have been all over the place with their plans.

  Goldman Sachs, in an internal memo seen by Bloomberg, told its US employees that they should be prepared to report to the office by June 14, according to an internal memo seen by Bloomberg.

  Vanguard Group, which employs about 17,300 people, is planning a hybrid model for most of its staff, with many employees able to work from home on Mondays and Fridays.

  Bridgewater Associates is going for the hybrid model as well and will allow their employees to work from home at least part of the time.

  Deutsche Bank, which employs about 8,000 people in the US, is planning to let its staff work from home for up to three days a week. Separately, the bank had said that it wanted to reduce its office foot print to cut costs.

  Deutsche Bank is offering “flexibility” as an inducement for hiring and retention. A survey had found that 90% of its employees wanted the opportunity to work from home at least part of the time after the Pandemic. Office space will be reconfigured to accommodate the hybrid model.

  JPMorgan Chase told its employees in a memo to report back to the office by early July on a “consistent rotational schedule” that would allow staff some flexibility.

  For landlords, these are existential questions as an enormous amount of office space is now vacant and available for lease in the US, and more office towers are in the process of being built, and nothing could have prepared the commercial real estate industry for this sort of sudden structural collapse in demand.

  *  *  *

  Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. 

  Tyler Durden
  Sat, 05/08/2021 – 19:00

• "Will Of The Country": Huge Victory For Scottish Nationalists Sets Up Next Independence Clash With UK
  “Will Of The Country”: Huge Victory For Scottish Nationalists Sets Up Next Independence Clash With UK

  The last hugely controversial Scottish referendum on independence took place in September 2014 and showed that the Scottish population’s desire to leave its three-centuries old union with England and Wales was gaining momentum. At that time it was approaching half – with the 2014 result being 55% voting to remain with 45% in favor of independence.

  It’s now widely believed that if the UK allowed another vote today, that margin would be much narrower, and it looks like that showdown will now come sooner than thought after Saturday’s decisive election victory by First Minister Nicola Sturgeon’s Scottish National Party (SNP). Sturgeon’s first declaration was aimed squarely at London and Boris Johnson, as she called another independence referendum the “will of the country”.

  

  Her SNP won an unprecedented 64 seats in the Scottish Parliament, which falls just one seat short of a majority, marking a slight increase even over 2016, which ensures a legal and constitutional battle for the future of the United Kingdom will be sparked once again.

  Given that the pro-independence Scottish Greens also made huge gains in what’s widely considered their best performance ever, the result is a firm pro-independence majority.

  

  Sturgeon quickly put London on notice…

  An independence referendum was pledged in the manifesto of both the SNP and the Scottish Greens, and Ms Sturgeon declared: “It is a commitment made to the people by a majority of the MSPs have been elected to our national parliament.”

  “It is the will of the country.”

  “Given that outcome, there is simply no democratic justification whatsoever for Boris Johnson or anyone else seeking to block the right of the people of Scotland to choose our future.”

  If the request is rejected, Ms Sturgeon said, “it will demonstrate conclusively that the UK is not a partnership of equals and that – astonishingly – Westminster no longer sees the UK as a voluntary union of nations”.

  She added: “That in itself would be a very powerful argument for independence.”

  Sturgeon further explained the vote result is a clear and urgent mandate for Scotland to push ahead with preparing for a second independence referendum to be held as soon as the COVID-19 pandemic is over. 

  consistent with my assumption…
  that he knows he can’t stand in the way of a referendum without dishonouring the UK’s democratic heritage, and taking the whole UK to a very dark place. As @GavinBarwell argues it is hard for a British PM to…

  — Robert Peston (@Peston) May 8, 2021

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

  Rabobank noted the significance of this weekend as follows:

  The Scottish regional election on May 6 is potentially shaping up to have a big impact on the future of Scotland and the UK, as independence has returned to the top of the agenda. The Scottish National Party looks set to win by a considerable margin, and is then likely to claim to have gained a new mandate for a referendum. The Conservative Party, officially the Conservative and Unionist Party, will in turn continue to make the case for the union. But even when prime minister Johnson denies Scotland a second independence referendum, or employs more heavy-handed tactics to suppress ‘Scoxit’ sentiments, the rift between Scotland and England looks set to widen. The Scottish regional election should be viewed entirely through this prism.

  In the meantime Sturgeon told her supporters that it’s time to “patiently persuade our fellow citizens” of the case for an independent Scotland.

  Tyler Durden
  Sat, 05/08/2021 – 18:30

• "This Was a Massacre": Brazilian Police Kill Two Dozen In Deadliest Favela Raid In Rio's History
  “This Was a Massacre”: Brazilian Police Kill Two Dozen In Deadliest Favela Raid In Rio’s History

  Authored by Jake Johnson via CommonDreams.org,

  More than 100 heavily armed Brazilian police officers stormed a sprawling Rio de Janeiro favela (a shanty town or slum) Thursday and killed at least two dozen people, a raid that human rights activists, researchers, and journalists described as the deadliest such police atrocity in the city’s history.

  The hours-long operation, purportedly aimed at drug traffickers in the poverty-stricken Jacarezinho favela, ultimately left at least 25 people dead, including one police officer. Horrific video footage and images posted to social media in the wake of the raid—which was carried out despite a court order against such incursions during the Covid-19 pandemic—show favela residents surveying rooms, hallways, and alleys streaked with blood. “It’s extermination—there’s no other way to describe it,” Pedro Paulo Santos Silva, a researcher at Rio’s Center for Studies on Public Security and Citizenship, told The Guardian. “This was a massacre.”

  

  “Really grim moment in Brazil,” Robert Muggah, co-founder of the Igarapé Institute, a Rio-based think tank, said in an interview with the Washington Post. “These shootings are obviously routine in Rio de Janeiro, but this is unprecedented, in that it’s the operation that has generated the largest number of deaths, ever.”

  Brazilian lawmaker David Miranda, who grew up in Jacarezinho, called the deadly police raid “a tragedy, a slaughter authorized by Cláudio Castro,” Rio’s governor. “Jacarezinho is my origin, it is the favela that created me,” said Miranda. “No person born outside the favela can know what that is. Brazilian institutions insist on disrespecting and marginalizing the favela.”

  Journalist Glenn Greenwald, Miranda’s husband, wrote on Twitter that he has “seen probably two dozen videos that are way too horrifying to publish: police enter homes with full force and violence, and then execute people as they lay on the ground, shooting them 10-15 times each in the head.”

  “It’s an atrocity what happened today,” Greenwald added.

  Please watch the 2-minute video here on Thursday’s police massacre in Rio de Janeiro. The death toll is now up to 29. https://t.co/hDU3f0JIYe

  — Glenn Greenwald (@ggreenwald) May 8, 2021

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

  Brazil suffers one of the highest rates of police killings in the world, and the nation is currently led by a far-right president who campaigned on the promise to “give the police carte blanche to kill.” According to Human Rights Watch, Rio law enforcement officers killed 453 people during the first three months of 2021.

  “They say there is no death sentence in Brazil. Except if you live in a favela,” said Marilia Corrêa, a Latin America historian and postdoctoral fellow at the University of Michigan’s Weiser Center for Emerging Democracies. “In this case, the police can just march in, kill dozens of people, and call it a day. This is appalling, revolting, outrageous. They have no right.”

  (Warning: the following footage is disturbing)

  Uma casa invadida e esse eh o resultado pic.twitter.com/gf8lVZMqCh

  — Joel Luiz Costa (@joelluiz_adv) May 6, 2021

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

  Jurema Werneck, executive director of Amnesty International Brazil, said in a statement Thursday that “the number of people killed in this police operation is reprehensible, as is the fact that, once again, this massacre took place in a favela.”

  “It’s completely unacceptable that security forces keep committing grave human rights violations such as those that occurred in Jacarezinho today against residents of the favelas, who are mostly Black and live in poverty,” said Werneck. “Even if the victims were suspected of criminal association, which has not been proven, summary executions of this kind are entirely unjustifiable.”

  Tyler Durden
  Sat, 05/08/2021 – 18:00

• Hedge Funds Are The 'Most Short' Junk Debt Since Lehman
  Hedge Funds Are The ‘Most Short’ Junk Debt Since Lehman

  A month ago we warned that The Fed’s incessant intervention had put distressed investors out of business as the remarkable rally in even the lowest quality junk debt (‘CCC or triple hooks’) had created party time for zombie companies everywhere as “high yield” is now officially “low yield.”

  

  And, while the party can and will go on as long as there are greater fools, one look at the fundamentals…

  

  … confirms that the party will only last as long as central banks keep injecting hundreds of billions into the market each and every month.

  “People aren’t investing, they’re just chasing.”

  That is the ominous, ponzi-like warning from Adam Cohen, Caspian Capital’s managing partner as the distressed debt investor has chosen to return some money to investors because the rewards don’t justify the high risks anymore.

  He’s right. Despite soaring debt levels and forward economic uncertainty, US HY debt risk spreads are 100bps tighter than pre-COVID levels…

  

  And all that has sparked a resurgence in hedge funds betting against this farce continuing.

  In fact, as Bloomberg reports, global high-yield bonds worth as much as $55 billion are on loan to traders seeking to profit if prices drop, according to data from IHS Markit.

  That is the largest balance since the fall of 2008, and compares with about $35 billion at the start of the year.

  “I would expect that to get bigger as spreads tighten and/or people get worried about rates rising,” said Tim Winstone, a portfolio manager at Janus Henderson, which oversees 294 billion pounds ($409 billion).

  “At these levels of valuations, I’m not surprised more people, such as hedge funds, are setting shorts.”

  And we are starting to see the impact of this drop in bullish/momo-chasing malarkey in the performance of deals in the secondary market. Almost one out of four high-yield bonds sold this year is indicated below the price it was issued at, based on data compiled by Bloomberg.

  With The ECB already hinting at scaling back its asset-purchases, and BoE having already done so, The Fed continues to ignore talk of its own tapering, but between HY shorts, and deleveraging, investors are starting to signal the build-up of defenses against a potential scaling back of central-bank support.

  Tyler Durden
  Sat, 05/08/2021 – 17:39

• Bill Gates-Funded Company Releases Genetically Modified Mosquitoes In US
  Bill Gates-Funded Company Releases Genetically Modified Mosquitoes In US

  Submitted by Epoch Times

  

  Genetically modified mosquitoes have been released for the first time in the United States as part of an experiment to combat insect-borne diseases such as Dengue fever, yellow fever, and the Zika virus.

  UK-based biotechnology firm Oxitec, which is funded by the Bill and Melinda Gates Foundation, said it released the mosquitoes in six locations in Monroe County’s Florida Keys: two on Cudjoe Key, one on Ramrod Key, and three on Vaca Key. It’s part of an effort to help tackle a disease-transmitting invasive mosquito population—the Aedes aegypti mosquito species—that’s responsible for “virtually all mosquito-borne diseases transmitted to humans,” according to the company.

  These mosquitoes make up about 4 percent of the mosquito population in the Keys, and transmit dengue, Zika, yellow fever, and other human diseases, as well as heartworm and other potentially deadly diseases to pets and other animals.

  The experiment is in collaboration with the Florida Keys Mosquito Control District (FKMCD), and was approved by the U.S. Environmental Protection Agency (EPA), the Florida Department of Agriculture and Consumer Services (FDACS), the U.S. Centers for Disease Control and Prevention, and an independent advisory board.

  Over the next 12 weeks, fewer than 12,000 mosquitoes are expected to emerge each week, for approximately 12 weeks. Untreated comparison sites will be monitored with mosquito traps on Key Colony Beach, Little Torch Key, and Summerland Key. If successful, some 20 million additional genetically modified mosquitoes will be released later in the year.

  “We really started looking at this about a decade ago, because we were in the middle of a dengue fever outbreak here in the Florida Keys,” FKMCD Executive Director Andrea Leal said during a video news conference. “So we’re just very excited to move forward with this partnership, working both with Oxitec and members of the community.”

  The insects released by the biotechnology firm are all male, so they don’t bite. They’re expected to mate with the local biting female mosquitoes, and in doing so, they will pass on a lethal gene that will ensure their female offspring die before reaching maturity.

  According to Quartz, areas including Malaysia, Brazil, the Cayman Islands, and Panama, where similar experiments have been carried out, have seen mosquito populations drop by as much as 90 percent.

  The project has faced backlash from residents, who say their consent was not sought for the experiment.

  Tyler Durden
  Sat, 05/08/2021 – 17:14

• Credit Suisse Hires Former Prime Brokerage Head To Restore Business After Archegos Blowup
  Credit Suisse Hires Former Prime Brokerage Head To Restore Business After Archegos Blowup

  After firing a raft of senior employees including its head of risk, Lara Warner, Credit Suisse has been struggling to move past a series of major risk-management failures that together could cost the bank $10 billion, or more, though the final tally of losses from the Archegos blowup isn’t yet known as the bank weighs whether it should cover some client losses associated with the “low risk” trade-finance funds that collapsed earlier this year.

  

  Following reports that the bank took in only $17.5MM in fees from servicing the trade that led to the collapse of highly-levered Archegos Capital, the hedge fund that used highly leveraged $20 billion to more than $100 billion via a string of bets with various prime brokers to amplify its bets on ViacomCBS and a host of other tech and media stocks (many Chinese ADRs) while skirting reporting requirements, it has become apparent the bank’s leadership in that division is sorely lacking (both of the co-heads of the division were both sacked in the aftermath of the Archegos implosion).

  So, Bloomberg reports that, in order to reorganize and “clean up” the bank’s prime brokerage business, it’s bringing back a familiar face: Indrajit Bardhan, a former head of the unit who left the bank three years ago in what BBG described as a “leadership shakeup”. Bardhan will return as a consultant to offer the bank some guidance as it seeks to reconstitute the potentially lucrative (but risky) business of serving hedge funds and family offices.

  The Swiss bank hired Bardhan as a consultant, according to people with knowledge of the arrangement, who asked not to be identified because the matter is private. He was among a number of high-profile executives to exit in 2018. He relinquished his role as global head of prime services to Paul Galietto, who later rose to head of equities and then left last month after the bank posted $5.5 billion in losses tied to Archegos.

  As BBG points out, the unusual decision to enlist a veteran of the bank (and one who apparently ran afoul of the leadership under former CEO Tidjane Thiam) reflects the desperate position Switzerland’s second-largest lender has found itself in. Bardhan was among a number of high-profile executives to exit in 2018. He relinquished his role as global head of prime services to Paul Galietto, who later rose to head of equities before being canned last month.

  The unusual decision to enlist a veteran underscores the challenge the Zurich-based bank faces in rebuilding the potentially lucrative but risky business of catering to hedge funds and other sophisticated investors. It pared a number of experienced staffers years ago. And more recently the firm saw another raft of senior departures after the Archegos debacle, including the co-heads of the prime brokerage unit.

  So far, Archegos alone has wiped out one year of profit for Credit Suisse, and with the Archegos situation not yet fully resolved, investors have started to question everything, from CEO Thomas Gottstein’s ability to manage the bank, to the board’s ability to supervise him. In another unusual move, the board sacked one of its own in the face of growing shareholder pressure ahead of its annual meeting.

  We can’t help but wonder: Will CS bring back Tidjane Thiam to help offer some guidance to Gottstein?

  Tyler Durden
  Sat, 05/08/2021 – 15:31

• Why Californians Have Sky-High Electricity Bills
  Why Californians Have Sky-High Electricity Bills

  Authored by Irina Slav via OilPrice.com,

  Californians pay for some of the most expensive electricity in the United States. They also live in one of the greenest states, at least from an energy perspective. California is only going to get greener. Meanwhile, electricity bills are expected to continue their rise. Some deny there is a link between the two.

  

  The facts show otherwise.

  A paper by the California Public Utilities Commission released earlier this year identified the state’s plans to reduce greenhouse gas emissions by adopting more renewable energy as one big factor for bigger utility bills and expectations for further increases in electricity rates in the coming years.

  The report said that while the state’s plans to reduce emissions will negatively affect electricity bills, a concerted switch to what the authors call “all electric homes and electric vehicles” could lead to a substantial drop in monthly bills. However, this would require a large upfront investment, which would be impossible to shoulder by medium- and lower-income households.

  “In the absence of subsidies and low-cost financing options, this could create equity concerns for low- to moderate-income households and exacerbate existing disparities in electricity affordability,” the report said.

  But funding such a hypothetical move to “all electric homes and electric vehicles” is only part of the problem. Another part, ironically, is distributed energy systems.

  A March report in CalMatters summarized the reasons for Californians’ high electricity bills as follows: first, the size and geography of the state make the fixed costs associated with the maintenance of its grid higher than in most other states; second, households with rooftop solar installations don’t pay for these fixed costs even if they use the grid. And all this is deepening the divide between wealthy and not-so-wealthy Californians, making electricity increasingly less affordable for the latter.

  Distributed solar installations appear to be only affordable for the wealthier citizens of the state. They can afford the upfront costs and then benefit from lower electricity bills, according to one of the authors of a UC Berkeley’s Haas Business School study that CalMatters cited in its report.

  Solar power is regularly touted as cheaper and cheaper, even exceeding the affordability of fossil fuels. The truth, however, is that the cost declines that have been celebrated by renewable power lobbies only concern the PV panels. Granted, any cost decline in solar is good news, but what most reports forget to mention is that it’s not just panels that make solar farms or even rooftop installations.

  Besides panels, solar power installations also involve other components—whose costs are not falling—and there is the cost of installation. Taken together, all these make up a rather hefty sum, which explains why it is wealthy Californians who are the ones taking advantage of the state’s programs aimed at encouraging the adoption of low-carbon energy sources. They are also the ones reaping the benefits at the expense of poorer Californians.

  California has something called a net energy metering (NEM) program that basically pays owners of solar installations for feeding electricity into the grid. An analysis of the system between 2017 and 2019, Utility Dive reported recently, shows that the costs of the program stood at $9.46 billion while the benefits stood at $7.96 billion. Another study of the program, focusing on customer bills, found that the benefits of the program came in at $7.58 billion while costs were as high as $20.58 billion and much of that was shouldered by the people who couldn’t afford to buy a rooftop solar installation.

  And yet, California is forging ahead with its electrification plans as the only presumably viable way of reducing emissions. Meanwhile, the state’s utilities are preparing for another hot summer with possible blackouts on the menu. According to the new chief operating officer of CAISO, California will see additional generation—and crucially storage—capacity come online this year, but supply will remain tight because of the retirement of gas-fired plants and one nuclear power plant.

  These retired facilities are being replaced with renewables, much of it solar. Last summer, solar was one of the culprits behind California’s blackouts as the output of solar farms declines exactly when demand for electricity increases, in the evening, and storage capacity was nowhere near sufficient to handle the discrepancy. This summer, as CAISO’s COO, Mark Rothleder, “we will ensure storage resource providers understand how we expect them to operate the system so that storage is available when needed to meet the challenging net peak demand in the stressed summer conditions.” 

  California’s government certainly has its emission-reduction work cut out for it. On the one hand, electricity bills are rising along with renewable power capacity and the retirement of fossil fuel power plants. On the other, grid reliability leaves a lot to be desired. Dealing with the bills will require a massive investment because the people most affected by electricity rate trends simply cannot afford to shoulder that bill, too. Dealing with grid reliability will require investment, too. It would be nothing short of a transformation of the state’s grid that will involve lots and lots of energy storage capacity. On the bright side, however, California’s emissions have fallen considerably since 2000.

  Tyler Durden
  Sat, 05/08/2021 – 15:04

• And Now Rents Are Soaring Too
  And Now Rents Are Soaring Too

  With BofA predicting that the US is facing a period of “transitory hyperinflation” as a result of soaring commodity prices in everything from metals to food…

  The @UNFAO global food price index rose for an 11th month in April to a seven year high at 120.9, representing a y-o-y jump of 30.7%. Food #inflation has not risen this fast since 2011 with all sectors rising led by sugar and oils – #agriculture #grains pic.twitter.com/V78egWukzI

  — Ole S Hansen (@Ole_S_Hansen) May 6, 2021

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

  …. and beyond, in what increasingly more warn is a stagflationary burst right out of the 1970s playbook…

  

  … it makes sense that home prices are also surging thanks to trillions in stimmy checks, near-record low mortgage rates and an exodus away from cities, and as we noted two weeks ago that’s precisely what they are doing, with Redfin reporting an 18% jump in median home sale prices to an all time high…

  

  … as a record 58% of all houses sell within two weeks of listing, of which 45% sell for more than their listing price, also a record.

  

  Amid this dismal “transitorily hyperinflationary” landscape, where those whose incomes aren’t similarly hyperinflating find themselves at risk of being unable to afford a roof above their head, there was one ray of hope: renting, with rent prices tumbling in recent months and according to the BLS’ monthly CPI metric, rent inflation had just dropped to the lowest in a decade, just below 2.0% annually…

  

  … which due to the way the CPI basket is weighted acted as a key anchor on overall CPI rates, and served to distort the broader inflationary picture. In short, the Fed would look at the relatively tame core CPI which was only tame thanks to “tumbling” rents and would conclude that there is nothing to worry about.

  Only it now appears that not only was the government misrepresenting the actual data in hopes of extracting as much stimulus from the Biden regime by pretending inflation is low and “contained”, but that rents are in fact soaring once again.

  On Thursday, American Homes 4 Rent, which owns 54,000 houses, increased rents 11% on vacant properties in April, the company reported in a statement:

  … Continued to experience record demand with a Same-Home portfolio Average Occupied Days Percentage of 97.3% in the first quarter of 2021, while achieving 10.0% rental rate growth on new leases, which accelerated further in April to an Average Occupied Days Percentage in the high 97% range while achieving over 11% rental rate growth on new leases.

  Invitation Homes, the largest landlord in the industry, also boosted rents by similar amount, an executive said on a recent conference call. Or, as Bloomberg puts it, record occupancy rates are emboldening single-family landlords to hike rents aggressively, testing the limits of booming demand for suburban rentals.

  While soaring housing costs had put homeownership out of reach for most Americans, rents had been relatively tame for much of 2020. But in recent months, rents have also soared as vaccines fuel optimism about a rebound from the pandemic, and a reversal in the city-to-suburbs exodus.  The increases, as Bloomberg so eloquently puts it, “may add to concerns about inflation pressures.” Mmmk.

  “Companies are trying to figure out how hard they can push before they start losing people,” said Jeffrey Langbaum, an analyst at Bloomberg Intelligence. “And they seem to be of the opinion they can push as far as they want.”

  Why the change? Well, in the early months of the pandemic, the big single-family rental companies slowed rent hikes amid an exodus of renters fleeing the big cities as a result of militant BLM protests and covid, preferring to maximize occupancy during an uncertain time for the economy. But now, widespread vacancies are giving them pricing power.

  What is remarkable is that this price hike is likely to stick: Invitation Homes reported an occupancy rate of more than 98% during the first quarter, freeing the company to raise prices by more than 10% on vacant houses in April. Invitation Homes is targeting increases of as much as 8% for tenants seeking to renew leases in coming months, an executive said on a recent conference call.

  Single-family landlords have had the upper hand over apartment owners in the age of remote work, but those advantages might dissipate as employers summon workers back to the office.

  “How much of the demand is temporary?” said Langbaum. “I do believe some component of it will revert back to urban markets.”

  So as rent rebound with a vengeance, and the CPI basket’s all important Shelter and Rent inflation series (which also serves as a bseline for the Owner Equivalent Rent series) jerks higher, how much longer can the Fed pretend that the vastly overheating US economy is not in a “transitory hyperinflation“, or at least on the verge of stagflation.

  Tyler Durden
  Sat, 05/08/2021 – 14:18

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• Webb: This Biden Proposal Could Make The US A "Digital Dictatorship"
  Webb: This Biden Proposal Could Make The US A “Digital Dictatorship”

  Authored by Whitney Webb via UnlimitedHangout.com,

  A “new” proposal by the Biden administration to create a health-focused federal agency modeled after DARPA is not what it appears to be. Promoted as a way to “end cancer,” this resuscitated “health DARPA” conceals a dangerous agenda.

  

  Oura Ring biometric tracker.

  Last Wednesday, President Biden was widely praised in mainstream and health-care–focused media for his call to create a “new biomedical research agency” modeled after the US military’s “high-risk, high-reward” Defense Advanced Research Projects Agency, or DARPA. As touted by the president, the agency would seek to develop “innovative” and “breakthrough” treatments for cancer, Alzheimer’s disease, and diabetes, with a call to “end cancer as we know it.”  

  Far from “ending cancer” in the way most Americans might envision it, the proposed agency would merge “national security” with “health security” in such as way as to use both physical and mental health “warning signs” to prevent outbreaks of disease or violence before they occur. Such a system is a recipe for a technocratic “pre-crime” organization with the potential to criminalize both mental and physical illness as well as “wrongthink.”

  The Biden administration has asked Congress for $6.5 billion to fund the agency, which would be largely guided by Biden’s recently confirmed top science adviser, Eric Lander. Lander, formerly the head of the Silicon Valley–dominated Broad Institute, has been controversial for his ties to eugenicist and child sex trafficker Jeffrey Epstein and his relatively recent praise for James Watson, an overtly racist eugenicist. Despite that, Lander is set to be confirmed by the Senate and Congress and is reportedly significantly enthusiastic about the proposed new “health DARPA.”

  This new agency, set to be called ARPA-H or HARPA, would be housed within the National Institutes of Health (NIH) and would raise the NIH budget to over $51 billion. Unlike other agencies at NIH, ARPA-H would differ in that the projects it funds would not be peer reviewed prior to approval; instead hand-picked program managers would make all funding decisions. Funding would also take the form of milestone-driven payments instead of the more traditional multiyear grants.

  ARPA-H will likely heavily fund and promote mRNA vaccines as one of the “breakthroughs” that will cure cancer. Some of the mRNA vaccine manufacturers that have produced some of the most widely used COVID-19 vaccines, such as the Pfizer/BioNTech vaccine, stated just last month that “cancer is the next problem to tackle with mRNA tech” post-COVID. BioNTech has been developing mRNA gene therapies for cancer for years and is collaborating with the Bill & Melinda Gates Foundation to create mRNA-based treatments for tuberculosis and HIV.

  Other “innovative” technologies that will be a focus of this agency are less well known to the public and arguably more concerning.

  The Long Road to ARPA-H

  ARPA-H is not a new and exclusive Biden administration idea; there was a previous attempt to create a “health DARPA” during the Trump administration in late 2019. Biden began to promote the idea during his presidential campaign as early as June 2019, albeit using a very different justification for the agency than what had been pitched by its advocates to Trump. In 2019, the same foundation and individuals currently backing Biden’s ARPA-H had urged then president Trump to create “HARPA,” not for the main purpose of researching treatments for cancer and Alzheimer’s, but to stop mass shootings before they happen through the monitoring of Americans for “neuropsychiatric” warning signs.

  

  Still from HARPA’s video “The Patients Are Waiting: How HARPA Will Change Lives Now”, Source: http://harpa.org

  For the last few years, one man has been the driving force behind HARPA—former vice chair of General Electric and former president of NBCUniversal, Robert Wright. Through the Suzanne Wright Foundation (named for his late wife), Wright has spent years lobbying for an agency that “would develop biomedical capabilities—detection tools, treatments, medical devices, cures, etc.—for the millions of Americans who are not benefitting from the current system.” While he, like Biden, has cloaked the agency’s actual purpose by claiming it will be mainly focused on treating cancer, Wright’s 2019 proposal to his personal friend Donald Trump revealed its underlying ambitions.

  As first proposed by Wright in 2019, the flagship program of HARPA would be SAFE HOME, short for Stopping Aberrant Fatal Events by Helping Overcome Mental Extremes. SAFE HOME would suck up masses of private data from “Apple Watches, Fitbits, Amazon Echo, and Google Home” and other consumer electronic devices, as well as information from health-care providers to determine if an individual might be likely to commit a crime. The data would be analyzed by artificial intelligence (AI) algorithms “for early diagnosis of neuropsychiatric violence.”

  The Department of Justice’s pre-crime approach known as DEEP was activated just months before Trump left office; it was also justified as a way to “stop mass shootings before they happen.” Soon after Biden’s inauguration, the new administration began using information from social media to make pre-crime arrests as part of its approach toward combatting “domestic terror.” Given the history of Silicon Valley companies collaborating with the government on matters of warrantless surveillance, it appears that aspects of SAFE HOME may already be covertly active under Biden, only waiting for the formalization of ARPA-H/HARPA to be legitimized as public policy. 

  The national-security applications of Robert Wright’s HARPA are also illustrated by the man who was its lead scientific adviser—former head of DARPA’s Biological Technologies Office Geoffrey Ling. Not only is Ling the main scientific adviser of HARPA, but the original proposal by Wright would have Ling both personally design HARPA and lead it once it was established. Ling’s work at DARPA can be summarized by BTO’s stated mission, which is to work toward merging “biology, engineering, and computer science to harness the power of natural systems for national security.” BTO-favored technologies are also poised to be the mainstays of HARPA, which plans to specifically use “advancements in biotechnology, supercomputing, big data, and artificial intelligence” to accomplish its goals.

  The direct DARPA connection to HARPA underscores that the agenda behind this coming agency dates back to the failed Bio-Surveillance project of DARPA’s Total Information Awareness program, which was launched after the events of September 11, 2001. TIA’s Bio-Surveillance project sought to develop the “necessary information technologies and resulting prototype capable of detecting the covert release of a biological pathogen automatically, and significantly earlier than traditional approaches,” accomplishing this “by monitoring non-traditional data sources” including “pre-diagnostic medical data” and “behavioral indicators.” 

  While nominally focused on “bioterrorist attacks,” TIA’s Bio-Surveillance project also sought to acquire early detection capabilities for “normal” disease outbreaks. Bio-Surveillance and related DARPA projects at the time, such as LifeLog, sought to harvest data through the mass use of some sort of wearable or handheld technology. These DARPA programs were ultimately shut down due to the controversy over claims they would be used to profile domestic dissidents and eliminate privacy for all Americans in the US. 

  That DARPA’s past total surveillance dragnet is coming back to life under a supposedly separate health-focused agency, and one that emulates its organizational model no less, confirms that many TIA-related programs were merely distanced from the Department of Defense when officially shut down. By separating the military from the public image of such technologies and programs, it made them more palatable to the masses, despite the military remaining heavily involved behind the scenes. As Unlimited Hangout has recently reported, major aspects of TIA were merely privatized, giving rise to companies such as Facebook and Palantir, which resulted in such DARPA projects being widely used and accepted. Now, under the guise of the proposed ARPA-H, DARPA’s original TIA would essentially be making a comeback for all intents and purposes as its own spin-off.

  Silicon Valley, the Military and the Wearable “Revolution” 

  This most recent effort to create ARPA-H/HARPA combines well with the coordinated push of Silicon Valley companies into the field of health care, specifically Silicon Valley companies that double as contractors to US intelligence and/or the military (e.g., Microsoft, Google, and Amazon). During the COVID-19 crisis, this trend toward Silicon Valley dominance of the health-care sector has accelerated considerably due to a top-down push toward digitalization with telemedicine, remote monitoring, and the like. 

  One interesting example is Amazon, which launched a wearable last year that purports to not only use biometrics to monitor people’s physical health and fitness but to track their emotional state as well. The previous year, Amazon acquired the online pharmacy PillPack, and it is not hard to imagine a scenario in which data from Amazon’s Halo wellness band is used to offer treatment recommendations that are then supplied by Amazon-owned PillPack.

  Companies such as Amazon, Palantir, and Google are set to be intimately involved in ARPA-H’s activities. In particular, Google, which launched numerous health-tech initiatives in 2020, is set to have a major role in this new agency due to its long-standing ties to the Obama administration when Biden was vice president and to President Biden’s top science adviser, Eric Lander.

  As mentioned, Lander is poised to play a major role in ARPA-H/HARPA if and when it materializes. Before becoming the top scientist in the country, Lander was president and founding director of the Broad Institute. While advertised as a partnership between MIT and Harvard, the Broad Institute is heavily influenced by Silicon Valley, with two former Google executives on its board, a partner of Silicon Valley venture capital firm Greylock Partners, and the former CEO of IBM, as well as some of its top endowments coming from prominent tech executives. 

  

  The Broad Institute, Source: https://www.broadinstitute.org

  Former Google CEO Eric Schmidt, who was intimately involved with Obama’s 2012 reelection campaign and who is close to the Democratic Party in general, chairs the Broad Institute as of this April. In March, Schmidt gave the institute $150 million to “connect biology and machine learning for understanding programs of life.” During his time on the Broad Institute board, Schmidt also chaired the National Security Commission on Artificial Intelligence, a group of mostly Silicon Valley, intelligence, and military operatives who have now charted the direction of the US government’s policies on emerging tech and AI. Schmidt was also pitched as potential head of a tech-industry task force by the Biden administration.

  Earlier, in January, the Broad Institute announced that its health-research platform, Terra, which was built with Google subsidiary Verily, would partner with Microsoft. As a result, Terra now allows Google and Microsoft to access a vast trove of genomic data that is poured into the platform by academics and research institutions from around the world.

  In addition, last September, Google teamed up with the Department of Defense as part of a new AI-driven “predictive health” program that also has links to the US intelligence community. While initially focused on predicting cancer cases, this initiative clearly plans to expand to predicting the onset of other diseases before symptoms appear, including COVID-19. As noted by Unlimited Hangout at the time, one of the ulterior motives for the program, from Google’s perspective, was for Google to gain access to “the largest repository of disease- and cancer-related medical data in the world,” which is held by the Defense Health Agency. Having exclusive access to this data is a huge boon for Google in its effort to develop and expand its growing suite of AI health-care products.

  The military is currently being used to pilot COVID-19–related biometric wearables for “returning to work safely.” Last December, it was announced that Hill Air Force Base in Utah would make biometric wearables a mandatory part of the uniform for some squadrons. For example, the airmen of the Air Force’s 649th Munitions Squadron must now wear a smart watch made by Garmin and a smart ring made by Oura as part of their uniform. 

  According to the Air Force, these devices detect biometric indicators that are then analyzed for 165 different biomarkers by the Defense Threat Reduction Agency/Philips Healthcare AI algorithm that “attempts to recognize an infection or virus around 48 hours before the onset of symptoms.” The development of that algorithm began well before the COVID-19 crisis and is a recent iteration of a series of military research projects that appear to have begun under the 2007 DARPA Predicting Health and Disease (PHD) project.

  While of interest to the military, these wearables are primarily intended for mass use—a big step toward the infrastructure needed for the resurrection of a bio-surveillance program to be run by the national-security state. Starting first with the military makes sense from the national-security apparatus’s perspective, as the ability to monitor biometric data, including emotions, has obvious appeal for those managing the recently expanded “insider threat” programs in the military and the Department of Homeland Security.

  One indicator of the push for mass use is that the same Oura smart ring being used by the Air Force was also recently utilized by the NBA to prevent COVID-19 outbreaks among basketball players. Prior to COVID-19, it was promoted for consumer use by members of the British Royal family and Twitter CEO Jack Dorsey for improving sleep. As recently as last Monday, Oura’s CEO, Harpeet Rai, said that the entire future of wearable health tech will soon be “proactive rather than reactive” because it will focus on predicting disease based on biometric data obtained from wearables in real time.

  Another wearable tied to the military that is creeping into mass use is the BioButton and its predecessor the BioSticker. Produced by the company BioIntelliSense, the sleek new BioButton is advertised as a wearable system that is “a scalable and cost-effective solution for COVID-19 symptom monitoring at school, home and work.” BioIntelliSense received $2.8 million from the Pentagon last December to develop the BioButton and BioSticker wearables for COVID-19. 

  

  BioIntelliSense CEO James Mault poses with the company’s BioSticker wearable. Source: https://biointellisense.com

  BioIntelliSense, cofounded and led by former Microsoft HealthVault developer James Mault, now has its wearable sensors being rolled out for widespread use on some college campuses and at some US hospitals. In some of those instances, the company’s wearables are being used to specifically monitor the side effects of the COVID-19 vaccine as opposed to symptoms of COVID-19 itself. BioIntelliSense is currently running a study, partnered with Philips Healthcare and the University of Colorado, on the use of its wearables for early COVID-19 detection, which is entirely funded by the US military.

  While the use of these wearables is currently “encouraged but optional” at these pilot locations, could there come a time when they are mandated in a workplace or by a government? It would not be unheard of, as several countries have already required foreign arrivals to be monitored through use of a wearable during a mandatory quarantine period. Saint Lucia is currently using BioButton for this purpose. Singapore, which seeks to be among the first “smart nations” in the world, has given every single one of its residents a wearable called a “TraceTogether token” for its contact-tracing program. Either the wearable token or the TraceTogether smartphone app is mandatory for all workplaces, shopping malls, hotels, schools, health-care facilities, grocery stores, and hair salons. Those without access to a smartphone are expected to use the “free” government-issued wearable token.

  The Era of Digital Dictatorships Is Nearly Here

  Making mandatory wearables the new normal not just for COVID-19 prevention but for monitoring health in general would institutionalize quarantining people who have no symptoms of an illness but only an opaque algorithm’s determination that vital signs indicate “abnormal” activity. 

  Given that no AI is 100 percent accurate and that AI is only as good as the data it is trained on, such a system would be guaranteed to make regular errors: the question is how many. One AI algorithm being used to “predict COVID-19 outbreaks” in Israel and some US states is marketed by Diagnostic Robotics; the (likely inflated) accuracy rate the company provides for its product is only 73 percent. That means, by the company’s own admission, their AI is wrong 27 percent of the time. Probably, it is even less accurate, as the 73 percent figure has never been independently verified.

  Adoption of these technologies has benefitted from the COVID-19 crisis, as supporters are seizing the opportunity to accelerate their introduction. As a result, their use will soon become ubiquitous if this advancing agenda continues unimpeded. 

  Though this push for wearables is obvious now, signs of this agenda were visible several years ago. In 2018, for instance, insurer John Hancock announced that it would replace its life insurance offerings with “interactive policies” that involve individuals having their health monitored by commercial health wearables. Prior to that announcement, John Hancock and other insurers such as Aetna, Cigna, and UnitedHealthcare offered various rewards for policyholders who wore a fitness wearable and shared that data with their insurance company.

  In another pre-COVID example, the Journal of the American Medical Association published an article in August 2019 that claimed that wearables “encourage healthy behaviors and empower individuals to participate in their health.” The authors of the article, who are affiliated with Harvard, further claimed that “incentivizing use of these devices [wearables] by integrating them in insurance policies” may be an “attractive” policy approach. The use of wearables for policyholders has since been heavily promoted by the insurance industry, both prior to and after COVID-19, and some speculate that health insurers could soon mandate their use in certain cases or as a broader policy.

  These biometric “fitness” devices—such as Amazon’s Halo—can monitor more than your physical vital signs, however, as they can also monitor your emotional state. ARPA-H/HARPA’s flagship SAFE HOME program reveals that the ability to monitor thoughts and feelings is an already existing goal of those seeking to establish this new agency. 

  According to World Economic Forum luminary and historian Yuval Noah Harari, the transition to “digital dictatorships” will have a “big watershed” moment once governments “start monitoring and surveying what is happening inside your body and inside your brain.” He says that the mass adoption of such technology would make human beings “hackable animals,” while those who abstain from having this technology on or in their bodies would become part of a new “useless” class. Harari has also asserted that biometric wearables will someday be used by governments to target individuals who have the “wrong” emotional reactions to government leaders. 

  Unsurprisingly, one of Harari’s biggest fans, Facebook’s Mark Zuckerberg, has recently led his company into the development of a comprehensive biometric and “neural” wearable based on technology from a “neural interface” start-up that Facebook acquired in 2019. Per Facebook, the wearable “will integrate with AR [augmented reality], VR [virtual reality], and human neural signals” and is set to become commercially available soon. Facebook also notably owns the VR company Oculus Rift, whose founder, Palmer Luckey, now runs the US military AI contractor Anduril. 

  As recently reported, Facebook was shaped in its early days to be a private-sector replacement for DARPA’s controversial LifeLog program, which sought to both “humanize” AI and build profiles on domestic dissidents and terror suspects. LifeLog was also promoted by DARPA as “supporting medical research and the early detection of an emerging pandemic.”

  It appears that current trends and events show that DARPA’s decades-long effort to merge “health security” and “national security” have now advanced further than ever before. This may partially be because Bill Gates, who has wielded significant influence over health policy globally in the last year, is a long-time advocate of fusing health security and national security to thwart both pandemics and “bioterrorists” before they can strike, as can be heard in his 2017 speech delivered at that year’s Munich Security Conference. That same year, Gates also publicly urged the US military to “focus more training on preparing to fight a global pandemic or bioterror attack.”

  In the merging of “national security” and “health security,” any decision or mandate promulgated as a public health measure could be justified as necessary for “national security,” much in the same way that the mass abuses and war crimes that occurred during the post-9/11 “war on terror” were similarly justified by “national security” with little to no oversight. Yet, in this case, instead of only losing our civil liberties and control over our external lives, we stand to lose sovereignty over our individual bodies.

  The NIH, which would house this new ARPA-H/HARPA, has spent hundreds of millions of dollars experimenting with the use of wearables since 2015, not only for detecting disease symptoms but also for monitoring individuals’ diets and illegal drug consumption. Biden played a key part in that project, known as the Precision Medicine initiative, and separately highlighted the use of wearables in cancer patients as part of the Obama administration’s related Cancer Moonshot program. The third Obama-era health-research project was the NIH’s BRAIN initiative, which was launched, among other things, to “develop tools to record, mark, and manipulate precisely defined neurons in the living brain” that are determined to be linked to an “abnormal” function or a neurological disease. These initiatives took place at a time when Eric Lander was the cochair of Obama’s Council of Advisors on Science and Technology while still leading the Broad Institute. It is hardly a coincidence that Eric Lander is now Biden’s top science adviser, elevated to a new cabinet-level position and set to guide the course of ARPA-H/HARPA.

  Thus, Biden’s newly announced agency, if approved by Congress, would integrate those past Obama-era initiatives with Orwellian applications under one roof, but with even less oversight than before. It would also seek to expand and mainstream the uses of these technologies and potentially move toward developing policies that would mandate their use.

  If ARPA-H/HARPA is approved by Congress and ultimately established, it will be used to resurrect dangerous and long-standing agendas of the national-security state and its Silicon Valley contractors, creating a “digital dictatorship” that threatens human freedom, human society, and potentially the very definition of what it means to be human. 

  Tyler Durden
  Fri, 05/07/2021 – 23:40

• When Will Lab-Grown Meat Become Cheap Enough To Buy?
  When Will Lab-Grown Meat Become Cheap Enough To Buy?

  Lab-grown meat consumes less energy and water and emits significantly fewer greenhouse gases than farm-raised meat. Bioengineering meat products in labs are part of the new food supply chain that we’re all going to eat after the global green reset is over. 

  Dozens of start-ups have been making cultured or in vitro meats for a number of years. Production costs are expensive and are about a decade away from parity with traditional meat prices. 

  Israeli start-up Future Meat, whose backers include Archer Daniels Midland, Tyson Foods, and S2G, has halved production costs in just a few months for its lab-grown chicken – a big move towards commercial viability, according to Financial Times.

  

  Future meat can produce a 110-gram chicken breast for just under $4, down from $7.50 announced at the start of the year. 

  Rom Kshuk, the chief executive, expects the piece of meat could fall below $2 in the next 12-18 months. 

  There are more than 50 companies worldwide working on getting lab-grown meat into supermarkets. Kshuk said his company is focused on obtaining regulatory approval for commercialization from the USDA and the FDA in 2022.

  “We will launch a product in the US market in the next 18 months that will have a commercially viable price,” he told FT.

  From chicken nuggets to lobster, companies are working towards a more sustainable approach for future food. 

  There’s also been a push for plant-based meat and an increasing acceptance of plant-based products. This could be great news for lab-grown meat as it appears global elites want to crush livestock farming because they believe it significantly contributes to greenhouse emissions. 

  So the question we are all asking ourselves – when does lab-grown meat become commercially viable where the average consumer can afford it? According to FT, sometime in the early 2030s. 

  

  It’s becoming more evident how the global reset and elites behind it are restructuring the global economy towards their eventual goals of a net-zero carbon emissions economy by the 2040-2060 timeframe. 

  … but like anything spewing from government or the non-elected officials who attempt to dictate the future – they’re often wrong in timing or the outcome as a whole. 

  Tyler Durden
  Fri, 05/07/2021 – 23:20

• Existential Economic Threats: How US States Can Survive Without Federal Money
  Existential Economic Threats: How US States Can Survive Without Federal Money

  Authored by Brandon Smith via Alt-Market.us,

  We all knew it was coming; the alternative economic media has been warning about it for years. Eventually, monetary intervention and bailout after bailout by central banks always leads to devaluation of the currency and inflation in prices. Helicopter money always ends in disaster and at no point in history has it ever produced positive long-term results for a society.

  

  The federal reserve has generated trillions in fiat dollars over the course of a single year (on top of the tens of trillions created in the past decade), all in the name of offsetting deflation. This deflation was NOT caused by the pandemic, it was caused by the government response to the pandemic.  On top of that, the shutdowns of “non-essential businesses” and the lockdowns in general ended up being useless in slowing the spread of COVID-19.

  All the information, all the facts and all the science supports the anti-lockdown crowd. Conservative run states that removed lockdowns and mandates months ago are seeing falling infection and death numbers and local businesses are on the mend. The problem is, government authorities don’t seem to care about this. It appears that their intention is to double down and continue demanding restrictions stay in place for the long haul.

  In other words, they are going to FIND an excuse to keep the mandates going. If no reason exists, they will create a reason. Consider for a moment the fact that COVID-19 is mutating constantly, and like any other virus there are new strains that pop up every year. Just as we have a seasonal flu, we will probably now have seasonal COVID.

  Since viruses also tend to evolve into less deadly forms of their original iteration it is unlikely that new COVID mutations will be any more dangerous than they were in the past. But each new strain creates a new rationale for the federal government to proclaim a national emergency and possibly enforce new lockdowns.

  This puts a lot of state governments in a difficult position. If they ever shut down again simply because federal authorities demand it, they will be angering their citizens and harming their region’s cash flow and production. Small businesses will go bankrupt by the thousands and the public will be on the verge of rebellion.

  On the other hand, if states defy the federal government (many are already passing laws blocking draconian vaccine passports), there is a good chance that the feds will respond by cutting off taxpayer funds and stimulus dollars to those states. With the combined threats of price inflation and federal financial retaliation, some states may cave and submit to more lockdowns or other mandates. And, by extension, their economies will begin to die once again.

  It’s a Catch-22, but it doesn’t have to be this way. There are measures that states and communities can take to diminish inflation and reduce dependency on federal dollars at the same time.

  Taking Back Resource Management

  The most important action states and counties can pursue in my view is taking back control of resource management within their own borders. For decades the federal government through agencies like the EPA and the Bureau of Land Management have dictated how states can utilize natural resources. Entire industries have faded in the U.S. because of this, whether it be oil production, coal production, steel production, lumber production, etc.

  If the federal government tries to punish states that refuse to comply with fiscally damaging pandemic restrictions by taking away stimulus payments and tax dollars, those states should reclaim control of their resources and ignore federal agencies. They should also take away federally controlled lands within their borders to make up for the loss of tax dollars. It’s only fair.

  With resource production back in the hands of the states and their local businesses, these economies will have a chance to become more independent and the need for federal money will diminish.

  Incentives For Local Manufacturing

  Aggressive taxation along with overpowered labor unions have made manufacturing businesses difficult to maintain in the U.S., but states have the power to change this.

  If we define price inflation as too many dollars chasing too few goods (I realize this is only one aspect of inflation, but it is important), then increased production of raw materials and manufactured goods should help to decrease inflation pressures. Why is production in the U.S. continuing to stagnate when it should be quickly expanding?

  Many of the products Americans purchase are made overseas, and with continued dollar devaluation, this means that prices will keep rising. A weaker dollar translates to higher costs in exchange for foreign made goods. So, why not make those goods here?

  Availability reduces price increases, localized manufacturing reduces dependency on foreign goods and increases employment. But how can states bring manufacturing back?  I suspect it is more simple than many economists realize: Just offer protection from federal taxation to any manufacturer that is willing to open up shop within your state. If the government is going to try to punish you anyway just for refusing to comply with pandemic rules, then you might as well take it to the next level and punish the government back.

  This should create ample incentive for new businesses in particular to start production within certain states as profits would be MUCH higher. Their ability to compete with major corporations (which get unlimited special treatment from the federal government through stimulus measures) would also grow.

  Create A Commodity-Backed Currency System

  While labor and wages are a sensitive issue, the market, if left to flow naturally, will determine what fair wages and fair prices should be. That said, in the midst of a monetary crisis such as hyperinflation or stagflation, the most likely response by the federal government would be price controls as well as wage controls and rationing of goods. The last vestiges of the free market would be eradicated.

  As long as states rely on the dollar, and the dollar’s value is determined by the whims of central bankers that do not actually answer to the public, there is no way to fight inflationary damage. However, if states were to offer an alternative currency or scrip that was NOT fiat, that was backed by a tangible resource or commodity that helps to limit money creation, then they could save themselves.

  Such a move would have to be undertaken by a state-run bank, much like the bank that North Dakota utilizes to aid industry and agriculture. As long as issuance of the currency is backed by a commodity or precious metal like gold (or with inherent intrinsic value like the Morgan silver dollar). A backed currency’s value would be preserved even as the dollar sinks. Commodity-backed currencies would flourish as citizens and investors (even international investors) search for safe havens.

  Essentially, states and communities would be decentralizing their economies so they are no longer slaves to the demands of people that answer to no one and do not have our best interests at heart.

  There is, of course, the issue of aggression against states that take these measures, but we should remember that this is exactly what the Founding Fathers did in the years leading up to the American Revolution. They did not simply declare their independence, they made themselves independent through localized economic tactics.

  Without economic independence, no other freedoms are possible. I believe it is time for Americans and free-minded states to once again focus on localization. The future of liberty in our nation depends on it.

  *  *  *

  After 10 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

  Tyler Durden
  Fri, 05/07/2021 – 23:00

• Dream Chaser Spaceplane Cleared To Resupply Space Station 
  Dream Chaser Spaceplane Cleared To Resupply Space Station 

  The Dream Chaser spaceplane entered into a Use Agreement for Space Florida’s Launch and Landing Facility (LLF) to land after resupply missions to the International Space Station (ISS) in 2022. 

  

  The uncrewed, robotic spaceplane will be catapulted into low Earth orbit via the Launch Alliance Vulcan Centaur rockets from Florida’s Cape Canaveral Space Force Station. The first resupply mission is slated for the first half of 2022. 

  

  Once the Dream Chaser docks and delivers cargo to the ISS – the ship will return to LLF, formerly known as the space shuttle runway. The spaceplane needs a 10,000-foot runway or wherever a commercial jet land.

  

  “This is a monumental step for both Dream Chaser and the future of space travel,” said Sierra Nevada Corporation (SNC) CEO Fatih Ozmen. SNC was tasked with developing the spaceplane. “To have a commercial vehicle return from the International Space Station to a runway landing for the first time since NASA’s space shuttle program ended a decade ago will be a historic achievement,” he said.

  Janet Kavandi, executive vice president of SNC’s Space Systems business area, said Dream Chaser is “hands-down the best way home,” adding that “a runway landing is an optimum solution for both humans and science.” 

  This is opposed to SpaceX’s Crew Dragon capsule that splashes down in the ocean upon return. 

  Sierra Nevada won $2 billion in NASA contracts to develop Dream Chaser as a reusable cargo vessel. As early as spring 2022, the company could start the first of seven cargo trips to ISS. 

  ISS is expected to wind down operations by the end of this decade. Russia is set to withdraw from the space station by 2025. 

  Sierra Nevada executives believe Dream Chaser can carry people someday and be more appealing to space tourists. The company appears to be taking advantage of the increasing interest in commercial space investments.

  Tyler Durden
  Fri, 05/07/2021 – 22:40

• Bovard: The Coming IRS Reign Of Terror
  Bovard: The Coming IRS Reign Of Terror

  Authored by James Bovard,

  The power to tax has long conferred the power to destroy political opponents. But in the glorious era of President Joe Biden, all previous cases of government abuse of power are being expunged, at least by the media and Biden supporters. That is why it is supposedly safe to vastly increase the power of perhaps the most feared federal agency, the Internal Revenue Service.

  

  After announcing his endless wish list for new federal spending, Biden told Congress last week: “I’ve made clear that we can do it without increasing deficits.” Biden believes he has found a goose that will lay golden eggs for federal revenue – a new army of IRS agents to hound Americans and corporations to pay far more taxes.

  The Washington Post reported that “the single biggest source of new revenue in the plan comes from dramatically expanding the clout of the nation’s tax agency.” Slate reported, “Biden wants to fund a massive upgrade to the American welfare state by making the IRS great at audits again.”

  But the agency Biden seeks to expand and unleash has an appalling record.

  As author David Burnham noted in “A Law Unto Itself: The IRS and the Abuse of Power” (1990), “In almost every administration since the IRS’s inception the information and power of the tax agency have been mobilized for explicitly political purposes.”

  President Franklin Roosevelt used the IRS to harass newspaper publishers who were opposed to the New Deal, including William Randolph Hearst. FDR also dropped the IRS hammer on political rivals such as the populist firebrand Huey Long and radio agitator Father Coughlin, and prominent Republicans such as former Treasury Secretary Andrew Mellon. President John F. Kennedy spurred the IRS to launch the Ideological Organizations Audit Project, which targeted right-leaning groups, including the Christian Anti-Communist Crusade, the American Enterprise Institute and the Foundation for Economic Education. Nixon Administration officials gave the IRS a list of official enemies to, in the words of presidential assistant John Dean, “use the available federal machinery to screw our political enemies.” Congress enacted legislation to severely restrict political contacts between the White House and the IRS.

  But the power of IRS agents continued to increase decade by decade. In 1988, then-Sen. David Pryor, a moderate Democrat from Arkansas, warned that the IRS “operates a near totalitarian system.” Pryor complained that the IRS had encouraged a “bounty-hunter mentality among revenue officers” and called for reforms to assure that the IRS “operates on the basis of public respect rather than fear.” Congress enacted a so-called Taxpayer Bill of Rights but it failed to curb the revenuers.

  The Clinton administration, like many of its predecessors, exploited the IRS to punish its political enemies. In 1995, the White House and the Democratic National Committee produced a 331-page report entitled “Communication Stream of Conspiracy Commerce” that attacked magazines, think tanks, and other entities and individuals who had criticized President Bill Clinton. In the subsequent years, many organizations mentioned in the White House report were hit by IRS audits. More than 20 conservative organizations — including the Heritage Foundation and the American Spectator magazine — and almost a dozen individual high-profile Clinton accusers, such as Paula Jones and Gennifer Flowers, were audited.

  Members of Congress also routinely exploited their power to send the secret financial police against their enemies. The Associated Press reported in 1999 that “members of both parties in Congress have prompted hundreds of audits of political opponents in the 1990s,” including “personal demands for audits from members of Congress.” Audit requests from congressmen were marked “expedite” or “hot politically” and IRS officials were obliged to respond within 15 days. Because the abuse was bipartisan, there was little enthusiasm on Capitol Hill for an investigation.

  In the Obama era, the IRS again became a political hit squad. The IRS demanded donor lists from 24 conservative nonprofits and proceeded to audit 10% of their donors — an audit rate ten times higher than average for the country. A 2013 Inspector General report confirmed that IRS employees had devoted far more scrutiny to nonprofit applications that used the terms “tea party” or “patriot” or that criticized government spending or federal deficits. In 2017, the IRS formally apologized to scores of conservative groups that it had wrongfully targeted in tax audits.

  The hubbub over Obama IRS machinations overshadowed similar appalling abuses on Capitol Hill. In 2014, the Center for Competitive Politics (since renamed as the Institute for Free Speech) filed a complaint with the Senate Ethics Committee charging that senators had personally intervened to demand IRS audits against conservative organizations. The senators “pressured the IRS to undertake income-tax investigations of specific organizations, to find that specific organizations were in violation of the law, to reach predetermined results pertaining to pending applications by individual organizations for nonprofit status.”

  Democratic New York Sen. Charles Schumer, lamenting the Republican takeover over the House of Representatives in 2010, declared that “there are many things that can be done by the IRS.” In a March 12, 2012 letter to the IRS, Schumer “urged the service to investigate various groups identified through reference to news articles,” a Wall Street Journal oped noted. On December 16, 2014, the Senate Ethics Committee dismissed the complaint from the Center for Competitive Politics, claiming that senators “have broad discretion to comment on matters of public policy in communications with agencies.” Perhaps the committee also presumed senators had a sacred prerogative to exploit the IRS to assail their enemies.

  While political abuses of the IRS have received most of the headlines, routine day to day outrages have continued unabated for decades. In the 1990s, IRS agents were indoctrinated to see taxpayers as liars and class enemies.

  IRS agents were trained with a game called “Culture Bingo.” That game taught the doctrine: “Taxpayers seem to live better than I do” to maximize resentment of taxpayers being audited. The American Institute for Certified Public Examiners complained of the course materials: “Every ethical issue presented finds the ethical result to be pro-IRS and anti-taxpayer. There is not one scenario where an IRS agent might act unethically against a taxpayer’s interest.”

  “Culture Bingo” spurred IRS agents to audit the lifestyles of taxpayers instead of simply their tax returns. IRS agents showed up unannounced to inspect people’s homes and demand to know what people kept in their bedroom drawers.

  Former Republican Sen. Bill Roth exposed stunning IRS abuses in Senate hearings in the late 1990s. Former IRS district chief David Patnoe testified: “More tax is collected by fear and intimidation than by the law. People are afraid of the IRS.”

  One confidential IRS document uncovered in 1997 revealed that IRS auditors in the San Francisco region were expected to assess at least $1,012 in additional taxes for each hour they spend auditing a taxpayer’s return. An IRS instructor in the Arkansas-Oklahoma district was caught on videotape lecturing collection agents on how to treat taxpayers: “Make them cry. We don’t give points around here for being good scouts. The word is enforced. If that’s not tattooed on your forehead, or somewhere else, then you need to get it. Enforcement. Seizure and sales…. Enforce collection until they come to their knees.”

  Congress passed reform legislation, but it did little to curb the vast arbitrary power possessed by IRS agents. Consider IRS depredations under the Bank Secrecy Act of 1970, which required banks to file a federal report for any cash transaction exceeding $10,000. The IRS “enforced” the law by presuming that anyone who deposited slightly less than $10,000 was a criminal. The IRS seized a quarter billion dollars because it disapproved of how businesses and individuals structured their bank deposits and withdrawals. IRS bureaucrats don’t even need to file a criminal charge before snaring citizens’ life savings.

  Between 2005 and 2012, the number of IRS seizures rose more than fivefold, but the vast majority of victims were never criminally prosecuted for structuring offenses. “One-third of those cases involved nothing more than making a series of sub-$10,000 cash transactions,” the Institute for Justice reported. A 2017 Inspector General report found no evidence in 91% of the forfeiture cases that the money came from illegal activities. IRS investigators simply looked at banking records and then confiscated  the accounts of hundreds of people. Most of the victims were “legal businesses such as jewelry stores, restaurant owners, gas station owners, scrap metal dealers, and others.”

  The IRS targeted businesses with legal sources of income because “the Department of Justice had encouraged task forces to engage in ‘quick hits,’ where property was more quickly seized… rather than pursuing cases with other criminal activity (such as drug trafficking and money laundering), which are more time-consuming,” the Inspector General reported.

  The one certainty is that the new powers Biden bestows on the IRS will be horrendously abused, and that most members of Congress won’t give a damn.

  Instead, they will pile on to further oppress American citizens and political activists. In 1967, a federal appeals court decision proclaimed, “The court will not place its stamp of approval upon a witch-hunt, a crusade to rid society of unorthodox thinkers and actors by using the federal income tax laws” to silence them.

  Unfortunately, such lofty sentiments are far more likely to be found in musty judicial compilations than in today’s Washington.

  *  *  *

  James Bovard is the author of “Attention Deficit Democracy,” “The Bush Betrayal,” “Terrorism and Tyranny,” and other books. Bovard is on the USA Today Board of Contributors. He is on Twitter at @jimbovard. His website is at www.jimbovard.com

  Tyler Durden
  Fri, 05/07/2021 – 22:20

• East Bay Area Homes Selling $1 Million Over Asking Price 
  East Bay Area Homes Selling $1 Million Over Asking Price 

  The housing boom sparked by the Federal Reserve during the virus pandemic was built on historically low mortgage rates and record low inventory as city-dwellers moved to rural areas amid remote-work phenomenon. 

  According to San Francisco Chronicle, the East Bay area or the eastern region of the San Francisco Bay Area has been an area of extreme housing market euphoria as some homes are selling more than $1 million over the list price. 

  

  Josh Dickinson, the founder of real estate agency Zip Code East Bay, said it’s pretty common to see a home go $1 million over list price. “When my clients see a house for $1.9 million, they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley,” he said. 

  This year, Dickinson said, a fierce bidding war between “frantic” buyers is absolutely crazy. Buyers are becoming super aggressive in how they submit offers, he added. 

  “I think I could pull up the MLS and pull up a dozen [listings] that went more than a million over this year so far,” he said. “Most of them had the ‘it factor,’ but some of them were just in the right place at the right time.”

  Dickinson said people are searching for amazing views and a spacious backyard in a post-COVID environment. More importantly, there needs to be enough space for at least two home offices. 

  “Even we don’t know as savvy agents. We don’t know when the thing is going to go bonkers,” he said. “We just try to let the market do its thing.”

  Record-low inventory, low mortgage rates, and urban flight have been the perfect cocktail for the East Bay boom. 

  In April, a five-bedroom home in the Elmwood neighborhood of Berkeley sold for $3.15 million, in an all-cash deal, with a listing price of $1.995 million. Since March, at least 20 properties have sold for more than $800,000 over the listing price, and six of those went for $1 million or more over the asking price three in Berkeley, three in Oakland, one in Piedmont.

  Redfin real estate agent Ena Everett said the East Bay market is becoming a lot more competitive. “In Oakland and Berkeley … people could expect homes to go 20% over asking on a pretty regular basis,” she said. “Now that the supply is a lot smaller, instead of 20% over, it’s common to see houses go for 10 to 40% over asking or more.”

  Overall, Bay Area home prices increased by 6% as compared to the same time last year.

  We noted not too long ago, an uninhabitable shack in the Bay Area was listed for $575k. 

  This year, housing prices have been so absurd that Case-Shiller, US home prices in 20 major cities are up a shocking 11.10% year-over-year.

  

  This is the fastest YoY rise since March 2014.

  Away from the 20 major cities, prices are rising even faster, up 11.22% – the fastest YoY price appreciation since Feb 2006…

  

  … but as we all know, manias don’t last forever and today’s housing boom may have just had a wake-up call from Treasury Secretary Janet Yellen, who said (but has since walked back) interest rates might have to rise to prevent any significant inflationary impact. 

  Tyler Durden
  Fri, 05/07/2021 – 22:00

• The Rise Of Bitcoin
  The Rise Of Bitcoin

  Authored by William Luther via The American Institute for Economic Research,

  In hindsight, the rise of cryptocurrencies appears to have begun with the introduction of bitcoin in 2009. Earlier cryptocurrencies had been launched in the 1990s, but they failed to take hold. David Chaum’s DigiCash is widely thought to have been ahead of its time. Chaum founded his company at the start of the decade, well before the rise of e-commerce. By 1998, it had filed for bankruptcy. More generally, early “digital-cash firms made a fatal miscalculation,” Julia Pitta wrote for Forbes in 1999. “They figured, wrongly it turns out, that consumers would be leery of using credit cards on the Web and would demand tight security and ironclad privacy.”

  

  It was not clear, at first, that bitcoin would be any different. Perhaps fearing the fate of e-gold creator Douglas Jackson, bitcoin’s designer(s) adopted a pseudonym––the now-famous Satoshi Nakamoto––and shared the upstart open source project in email to the Cryptography Mailing List on January 8, 2009. Nakamoto had circulated a white paper explaining the technical details a few months before. Congratulatory replies soon followed, but there was little indication that bitcoin would quickly become a household name. It was little more than a novelty discussed by a handful of programmers on the Internet.

  Over the nine months that followed, bitcoin was basically worthless. Transactions consisted of mere test spends by the few programmers interested in bitcoin at the time in order to work out bugs in the protocol. No one was handing over valuable goods or services for bitcoin. There were no market exchange rates with the dollar, euro, or other currencies. Indeed, there were no exchanges to facilitate currency exchange.

  The first positive-price transaction for bitcoin appears to have occurred in early October 2009. On October 5, a user employing the username New Liberty Standard estimated that it cost roughly $1 to produce 1,309.03 bitcoin. Seven days later, he purchased 5,050 bitcoin from Martti Malmi for $5.05, settling the transaction via PayPal. The price of bitcoin, in other words, stood at just $0.0010. 

  Prior to March 2010, users interested in exchanging traditional currencies for bitcoin were limited to ad hoc exchanges, typically organized via message boards. Then, on March 16, The Bitcoin Market became operational, providing a central location on the Internet to exchange bitcoin for dollars. The first posted bid, submitted by the site-creator dwdollar, put the price of bitcoin at $0.0067.

  In addition to helping users acquire or offload bitcoin, the new exchange also made it easier to assess the exchange value of bitcoin. If you know, for example, that a host of users are willing to pay $0.50 to $0.75 for 100 bitcoin, you can use that information to figure out how much other goods and services routinely priced in dollars are worth in terms of bitcoin. The new exchange, therefore, makes it easier for users to buy and sell goods and services with bitcoin.

  On May 22, 2010, a Jacksonville, FL-based programmer named Laszlo Hanyecz made what many believe to be the first purchase of goods or services with bitcoin. In a post to the BitcoinTalk forum on May 18, Hanyecz offered to purchase two pizzas for 10,000 bitcoin. The implicit exchange rate was generous. The Bitcoin Market valued 10,000 bitcoin at around $41 at the time. But, initially, there were no takers. “I just think it would be interesting if I could say that I paid for a pizza in bitcoins,” Hanyecz posted on May 21. The following day, he posted photos of two large pizzas from Papa John’s. Together, he and a user named jercos, who had facilitated the transaction, showed that bitcoin could be used to acquire goods and services in the real world.

  As word of the upstart cryptocurrency spread, so too did its value. A Slashdot article published on July 11 introduced bitcoin to a host of new users. The exchange rate increased from $0.008 on July 12 to $0.080 on July 17. On July 18, Jed McCaleb launched the popular exchange site MtGox and, by November 6, one bitcoin was trading for $0.50 on the site. Keir Thomas profiled bitcoin for PC World on December 10. “Bitcoins are worth taking a look at,” he wrote. In the years that followed, many people did. On December 3, 2013, one bitcoin was worth $1,078.

  Today, there are few people who have not heard about bitcoin. And, yet, just as few people seem to understand how it works.

  Perhaps that is to be expected.

  The way in which the bitcoin protocol processes transactions is new and fundamentally different from traditional payment mechanisms. Whereas traditional payment mechanisms employ decentralized or centralized clearing mechanisms, bitcoin transactions are processed via a distributed clearing mechanism.

  Consider a cash transaction. When you pay for a Coke with cash, the transaction is cleared by you and the merchant. You debit your account by removing the dollar from your wallet and handing it to the merchant. The merchant credits her account by accepting the dollar from you and placing it in the cash register. Since cash is physical, and no longer in your possession, you cannot spend that dollar again. That dollar now belongs to the merchant, who can spend it as she sees fit.

  Cash, in other words, is processed using a decentralized clearing mechanism.  A decentralized payment is cleared by the parties to the exchange. No trusted third party is required to process the transaction. Indeed, no one other than the parties to the transaction even needs to know that the transaction occurred.

  Suppose, instead, you were to purchase that Coke by writing a check or swiping your debit card. In this case, your bank will debit your account and transfer the funds to the merchant’s bank. The merchant’s bank will credit her account. The funds, in this case, are digital. Unlike physical cash, digital balances could be duplicated and spent again. However, the banking system generally prevents that from happening. Once funds have been transferred, they are considered final––meaning the sender no longer has access to the funds.

  Checks and debit card payments are processed using a centralized clearing mechanism. A bank or other financial institution acts as a trusted third party to process the transaction. Indeed, such transactions often involve multiple levels of centralized clearing. The transaction between your bank and the merchant’s bank, for example, might be cleared by the Federal Reserve’s FedWire. The Fed debits your bank’s account and credits the account of the merchant’s bank. Centralized clearing requires routing the transaction––and, hence, information about the transaction––through one or more trusted third parties. As such, they tend to offer less financial privacy than other payment mechanisms.

  Bitcoin employs neither a decentralized nor centralized clearing mechanism. Instead, it processes transactions using a distributed clearing mechanism. With distributed clearing, payments are processed by the network as a whole. Typically, distributed networks amount to a shared ledger, which denotes who owns what, and a protocol for updating that ledger. In many cases, any individual user is capable of debiting and crediting accounts on the ledger. Changes to the ledger are only recognized as legitimate, however, when they have been confirmed by the network of users in accordance with the protocol.

  If you were to pay for that Coke with bitcoin, you would announce the transaction to the network by signing a balance of bitcoin with your private key, thereby confirming ownership, and identifying the merchant by her public key. In practice, this often amounts to scanning a QR code with a bitcoin wallet mobile app. Your transaction is then bundled together with other recent transactions and the computers running the bitcoin protocol race to process the entire block of transaction. Once the block of transactions has been processed, the ledger is updated to reflect the various debits and credits required by the transactions in the block. The shared ledger is known as a blockchain because each block of transactions is chained to the previous block, producing a long chain of transaction blocks corresponding to all of the transactions that have been made and certified as legitimate up until that point.

  While it is convenient to think about a single shared ledger, or blockchain, indicating how much bitcoin is in each account, there are in fact multiple versions of that shared ledger at any point in time. The bitcoin protocol resolves this issue by recognizing the longest blockchain as legitimate. As a result, those running the bitcoin protocol will typically abandon shorter blockchains in order to build on the longest blockchain. Any transaction that has been included in a shorter blockchain but not in the longer, legitimate blockchain is added to a subsequent block of transactions to be processed.

  Recall that, with cash, one need not worry about a balance being spent more than once since spending requires relinquishing ownership of the physical asset; with checks and debit cards, a bank or banking system ensures that ownership of the digital asset is relinquished when spent. Two features of the bitcoin protocol combine to prevent double spending. First, it is computationally difficult to process transactions. In order to add a block of transactions to the blockchain, a computer must be the first to solve for the input corresponding to the given hashed output. Since a brute force approach is the best any computer can do, each computer  effectively has a random chance of being the first to process a batch of transactions proportionate to its share of the bitcoin system’s computing power. Second, as noted above, the bitcoin protocol recognizes the longest blockchain as legitimate. In order to execute a double spend, therefore, one would not only need to pass an illegitimate transaction as legitimate; he would also have to continue processing transactions at a faster rate than than the rest of the network in order to ensure the blockchain supporting his illegitimate transaction remained the longest. Unless a user enjoys a majority of the computing power on the system, such a feat would be incredibly unlikely. Knowing this in advance leaves little incentive to attempt a double spend attack in the first place. 

  The blockchain technology at bitcoin’s core provides a new and fundamentally different way to process payments. It relies on neither decentralized nor centralized clearing. Instead, it processes transactions over a distributed network. And, by solving the double spending problem without recourse to a trusted third party, it has the potential to offer a degree of financial privacy comparable to decentralized payment mechanisms like cash. For these reasons, bitcoin has gained much support. Whether bitcoin will become routine in retail transactions, remain limited to niche uses, or be abandoned altogether remains to be seen.

  Tyler Durden
  Fri, 05/07/2021 – 21:40

• Demand For Ass Implants Booms During Pandemic 
  Demand For Ass Implants Booms During Pandemic 

  In the early days of the virus pandemic, things didn’t look so hot for the field of plastic survey. Hospitals were overrun with COVID-19 infections and banned all elective procedures, limiting plastic surgeries. But sometime after, when the economy reopened, and hospitals allowed elective surgeries, demand for butt implants soared. 

  Bloomberg, citing data from the American Society of Plastic Surgeons (ASPS), says there were broad declines for minimally invasive and surgical cosmetic procedures during 2020. Botox and soft-tissue fillers remained popular with consumers. But it was buttock augmentation, or butt implants were a massive hit among consumers. Cosmetic procedures for the implants last year were up 22%, from 970 to 1,179. 

  

  Dermatologist Ava Shamban said the lockdowns likely triggered those with flat buttocks to receive implants after spending their days surfing Instagram and seeing influencers and models with “higher, tighter rounder assets. “

  The typical butt implant is not cheap, costing more than $5,000, and has a durability life of approximately ten years. ASPS doesn’t provide data on the average age or gender of those who received buttock augmentation during 2020, but we would assume it was bored millennials who still had a job. Unless stimulus checks were spent on ass implants, there are no data points supporting this. 

  Here are some examples of before and after buttock augmentations: 

  

  

  ASPS said one of the most significant declines in cosmetic procedures during the pandemic were hair transplants, down 60% last year. 

  Dr. Lisa Cassileth of Cassileth Plastic Surgery and Skincare told Bloomberg since implants have a shelf life and will eventually fail, an eventual replacement or removal will be needed. 

  “The population of aging implants is getting greater every year, so part of this is just a reflection of the boom we have had in implants over the years,” Cassileth said. 

  So if it’s wanting to look like an Instagram influencer or removal of old implants – ASPS doesn’t specify – all we do know is that cosmetic surgical procedures for ass implants soared during the pandemic.

  Tyler Durden
  Fri, 05/07/2021 – 21:20

• New Image Shows Mars Helicopter Completing 5th Flight
  New Image Shows Mars Helicopter Completing 5th Flight

  Update (2105ET): NASA’s Jet Propulsion Laboratory in Pasadena, California, said Ingenuity Mars helicopter “completed its 1st one-way trip and 5th flight on Mars. It touched down at its new location, kicking off a new demo phase where we test this new tech and see how it can aid future missions on Mars and other worlds.”

  

  * * * 

  NASA’s Ingenuity Mars helicopter is preparing to explore a new region of the Red Planet today on its fifth scheduled flight (3:26 p.m. EDT, or 12:26 p.m. PDT), with flight data coming in around 7:31 p.m. EDT (4:31 p.m. PDT). 

  Off to new places! The #MarsHelicopter is slated for its fifth flight on May 7, with data coming down at 4:31pm PT (7:31pm ET). The rotorcraft will take off at Wright Brothers Field and will land elsewhere this time, which is another first for Ingenuity. https://t.co/JxLNz7UADw pic.twitter.com/zOGo1j7srt

  — NASA JPL (@NASAJPL) May 6, 2021

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

  If all goes well, the 4-pound helicopter will climb 16 feet, then retrace flight four, heading south 423 feet. But instead of heading back to home base, the aircraft will soar to an altitude, a new height record, of 33 feet, where it will take color (as well as black-and-white) photos of the Red Planet. This flight is expected to last about 110 seconds and will be a one-way trip. 

  “But instead of turning around and heading back, we’ll actually climb to a new height record of 33 feet (10 meters), where we can take some color (as well as black-and-white) images of the area,” Josh Ravich, Ingenuity mechanical engineering lead at NASA’s Jet Propulsion Laboratory in Southern California, wrote in a blog post Thursday. 

  “After a total flight time of about 110 seconds, Ingenuity will land, completing its first one-way trip,” Ravich added. “When it touches down at its new location, we will embark on a new demonstration phase — one where we exhibit what this new technology can do to assist other missions down the road.”

  Ingenuity landed with NASA’s Perseverance rover on Feb. 18 and deployed two months later from the belly of the land-based robot. The helicopter has already completed four flights in three weeks and plans more daring flights as an aerial exploration scout. 

  More developments will come this evening when NASA Jet Propulsion Laboratory will announce how the flight went on its Twitter account. 

  Tyler Durden
  Fri, 05/07/2021 – 21:06

• Texas Senate Approves Permitless Carry Of Handguns
  Texas Senate Approves Permitless Carry Of Handguns

  Authored by Janita Kan via The Epoch Times,

  The Texas Senate approved a bill on May 5 that would allow eligible residents 21 years and older to carry a holstered handgun, openly or concealed, without a permit, also known as constitutional carry.

  

  House Bill 1927 passed the Republican-led Senate in an 18–13 vote following a lengthy debate and will now head back to the House to debate amendments and settle differences between the two chambers’ versions. The House had passed the measure in mid-April.

  Gov. Greg Abbott has previously signaled that he’s supportive of such a measure and told WBAP’s Rick Roberts last week that he was willing to sign it.

  “Once the Senate passes it out, the House and Senate will convene and work out any differences and get it to my desk and I’ll be signing it,” Abbott said.

  Under current Texas law, residents are required to obtain a permit to carry handguns. To obtain the permit, applicants must complete classroom training, pass a written exam, submit fingerprints, and pass a proficiency demonstration.

  Republicans say the proposed law will help remove some barriers for Lone Star State residents to carry a handgun and hence save them time and money.

  State Sen. Charles Schwertner previously defended the bill at a committee meeting following the House’s passage of the measure.

  “Right now, we have the license to carry—the LTC—and it is a hurdle for some individuals to avail themselves of their constitutional right to keep and bear arms, and I think that is a hurdle that should be removed. That’s what this bill does,” he said.

  Opponents of the law, including state Democrats, have expressed concerns that the proposed bill would allow individuals to obtain a handgun without appropriate training or background checks. Some members of law enforcement have also expressed concerns about the bill.

  Austin Police Interim Chief Joseph Chacon said at a press conference last week that he believes the proposed law would “make our streets less safe and will make law enforcement’s jobs harder.”

  “Guns are easier to obtain than ever before, and it has become more common for people to use them. Weakening training regulations and effectively eliminating training requirements is not the direction that we should be going right now,” Chacon said.

  Lt. Gov. Dan Patrick, who previously expressed worry that the Senate lacked the votes to pass the measure, issued a statement on May 5 welcoming the passage.

  “I am proud that the Texas Senate passed House Bill 1927 today, the Constitutional Carry bill, which affirms every Texan’s right to self-defense and our state’s strong support for our Second Amendment right to bear arms. In the Lone Star State, the Constitution is our permit to carry,” Patrick said.

  The National Rifle Association had previously expressed support for the measure, saying in a statement that “it’s time for Texas to join the 20 other states that have legalized this personal protection option.”

  

  You will find more infographics at Statista

  Last month, Tennessee Gov. Bill Lee signed into law his state’s version of a permitless carry measure.

  Tyler Durden
  Fri, 05/07/2021 – 21:00

• China Plans To Build Giant Wind Farm Next To USAF Base In Texas 
  China Plans To Build Giant Wind Farm Next To USAF Base In Texas 

  Texas lawmakers have launched an all-out effort to block a Chinese billionaire from building a massive wind farm near Laughlin Air Force base in southwest Texas. The wind farm’s close proximity to the military base has raised concerns about potential spying and attacks on the energy grid by China. 

  The Chinese-backed project called Blue Hills Wind, which could house up to 40 turbines in Val Verde County, Texas, is being managed by GH America Energy, the US subsidiary of the Chinese Guanghui Energy Company. The project sits on approximately 140,000 acres of land located about 70 miles from Laughlin. 

  

  According to American Military News, Guanghui is owned by Chinese billionaire Sun Guangxin, who reportedly has close relations with the ruling Chinese Communist Party.

  The legislation called the “Protecting Military Installations and Ranges Act,” was passed last month by a handful of lawmakers, Congressman Tony Gonzales (TX-23) today with Senators Cruz (R-TX) and Rubio (R-FL), and Congressmen Ronny Jackson (TX-13) and Pat Fallon (TX-04), to prevent foreign enemies from acquiring land near military bases.

  Lawmaker’s behind the bill are attempting to stop the Chinese billionaire from hooking into the Texas power grid and potentially spying for China. 

  “Our greatest concern is the long-term implications this will have on the Air Force’s mission of pilot training not with a single application, but rather a cumulative strategy that cannot be evaluated in the first filing,” Val Verde County Judge Lewis G. Owens Jr. and Del Rio Mayor Bruno Lozano wrote in a letter obtained by Foreign Policy. “We believe that this project and all future projects of a similar nature will result in unacceptable risk to the national security of the United States.”

  Meanwhile, the Committee on Foreign Investment in the US (CFIUS) authorized GH America Energy’s Texas wind farm project in 2020. However, the lawmakers in the state are making sure the project is stopped. 

  Whatever the outcome is in Texas will certainly be a testament to the deteriorating Sino-US relations, even under a new US administration.

  Last week, President Biden made his first public address to Congress. Speaking to the chamber, he frequently said his expansive domestic policy agenda is a call to confront Beijing in a battle of “democracy versus autocracy.”

  Tyler Durden
  Fri, 05/07/2021 – 20:40

• Rising Bond Yields Threaten Financial Market Stability
  Rising Bond Yields Threaten Financial Market Stability

  Authored by Alasdair Macleod via GoldMoney.com,

  There is a growing recognition in financial circles that price inflation will increase significantly in the near future, and official estimates that it will be a temporary phenomenon limited to an average of 2% are overly optimistic. There is, therefore, increasing speculation about the need for interest rates to rise.

  The bond yield on 10-year US Treasuries has already more than doubled over the last year. It is in the nature of market cycles for equity and other financial assets to continue to rise in value during an initial increase in bond yields. It is the second increase that can be expected to turn bullish optimism about the economic outlook into the beginning of a bear market. Financial markets, already dislocated from fundamental realities, appear to be acutely vulnerable to such a change in sentiment.

  This article points out that equity markets are driven more by money flows rather than perceived economic prospects. Bank credit for industry is contracting, commodity prices are soaring, and supply chains remain disrupted. Fuelled by earlier expansions of money supply and further expansions to come, the world faces a far larger increase in price inflation than currently contemplated, and therefore far higher interest rates, threatening to destabilise both financial markets and fiat currencies.

  

  Introduction

  There is a rustling in the undergrowth, disturbing the sylvan setting where we complacently enjoy the dappled sunlight, innocently unaware of the prowling bear. The bear heralds another rise in bond yields as we grapple with the inflationary consequences of recent and current events.

  Public participation in equity markets is at an all-time high, not just through direct holdings — amateurish speculation is rife — but through passive index tracking funds and the like. With respect to these, the underlying assumption financial advisors make and tell their innocent clients is that trackers are risk free, because exposure to individual corporate failures is so diluted as to be immaterial. And over time, markets always rise, captured by investing in these funds. But this is deception, ignoring market cycles and systemic risks. Ignorance of the inevitable cyclical switch from greed for profits to fear of loss that defines the divide between bull and bear markets invalidates the permabulls’ advice.

  Without doubt, the prowling bear in our so far untroubled scene is bond yields. Unnoticed, they have begun to rise as shown in the chart heading this article. With increasing urgency, it is time to consider the effect on market relationships. Over many investing cycles it has been observed that bond prices conventionally top out before equities. It is one of the most reliable warning signs, which, despite its track record is routinely dismissed by wishful thinkers until it is too late.

  Instead, it is a commonplace to argue that prospects for corporate profits have improved at this stage of the economic cycle because of the growing certainty of a better economic outlook. And now that this time the civilised world is emerging from lockdowns, every analyst in the mainstream media delivers this message. For them, the rise in bond yields confirms that improving business conditions are in place to justify yet higher equity prices. But it is all a cycle, having little to do with economic prospects.

  Today, we see that the relationship between declining bond prices and rising equities, and all the sentiment and commentary around them, are as we should expect.. But beware the bear lurking in the woods. It’s the second rise in bond yields that often slays the equity bull. I vividly recall meeting an industrialist the autumn of 1972, who told me that his business was the best it ever had been. He then paraded his ignorance of financial matters by telling me that it was wholly irresponsible for the London Stock Exchange to permit the FT 30 share index to have halved in the previous fifteen months. Following that conversation, the FT 30 halved again after interest rates were jacked up in October 1973, creating the infamous secondary banking crisis and losing 70% from its peak in May 1972 by January 1975. And the last I heard of the unfortunate industrialist his business had gone bust and he had committed suicide.

  It is a mistake to take opinions or evidence of economic conditions as the principal reason to invest in equities. It is more important to follow the money, specifically the cycle of bank credit. While amateur investors are buying into equity market tops, bankers begin to see that the early signs of rising interest rates are disrupting business plans and will lead inevitably to corporate failures. This comes at a time when their own balance sheets are most highly leveraged. With this credit cycle, there are some additional features specific to it. Even though the ending of pandemic restrictions is expected to lead to a substantial recovery in economic activity, these extra features are extreme, and the bear case is therefore strong.

  Banks have begun to withdraw credit from non-financial sector borrowers, meaning they will lack the finance to process and deliver goods to meet increasing demand. Banks are also over-leveraged as they usually are at this stage of the credit cycle, but they have never been more so than they are this time around. The transition from banking greed to banking fear always leads to a substantial cut in bank lending, with the potential outcome of banks being forced to liquidate collateral into falling markets. Unthinkable? It would have happened every credit cycle without central banks taking action to avoid it — which they have achieved every time so far since the 1930s. And consider interest rates, which are already at zero, and negative in euros, yen and Swiss francs. Where can they go to rescue a global economy failing for lack of bank credit?

  The stand-out indicator is always bond yields. The chart at the head of this article strongly suggests to us that after the current pause they are heading higher — probably much higher. This article explains why, and what will be the consequences for financial markets. And why, despite higher bond yields, the purchasing power of fiat currencies have not only started to fall at an accelerating pace but will almost certainly continue to do so.

  Why bond yields are rising

  The 10-year US Treasury yield fell to only 0.48% in March 2020, when deflationary fears were mounting. The S&P 500 index had fallen by 32% in just five weeks as China’s covid crisis was followed by the prospect of other jurisdictions going into pandemic lockdowns. Commodity prices were collapsing. The Fed then did what it always does in these conditions. It cut interest rates to the minimum possible (zero this time) and it flooded markets with money ($120bn in QE every month) along with some other market fixes to cap corporate bond yields from rising to reflect lending risks.

  

  Immediately, almost everything began to recover with the exception of bond prices. But the initial increase in their yields can be justified on the basis that they were previously depressed by fears of deflation ahead of the spreading pandemic, and that with the worst fears of deflation had now passed a state of normality had returned. In the year following, equity markets recovered fully and have gone on to new highs. Commodity prices are now rising strongly, which so far is believed by market optimists to indicate recovering demand and therefore confirmation of economic recovery. Having some time ago changed the inflation target from 2% to an average of 2% over time, only last week the Fed saw no reason to expect a rise in price inflation to be more than a temporary phenomenon.

  Officially, it’s a case of seeing no evil. But already the establishment consensus is testing more bearish ground. Infrastructure investment plans, not just in the US, but supporting green agendas everywhere are expected to drive oil and copper prices higher, along with a raft of other commodities. As well as state-induced infrastructure spending, in anticipation of strong post-pandemic demand manufacturers are bidding up commodity and raw material prices as well as the cost of the logistics to deliver them. Key industries, particularly agriculture, are suffering acute labour shortages. In many cases, skilled workers are not available. Even the most irresponsibly inflationist economists and commentators are beginning to point out that interest rates will probably have to rise because prices risk spinning out of control.

  Fuelling it all is the expansion of base money by central banks. The St Louis Fed’s FRED chart below showing the Fed’s monetary base illustrates the point and is a proxy for the global picture, because the dollar is the reserve currency and the pricing medium for all commodities.

  

  From the beginning of March 2020, which was the month the Fed announced virtually unlimited monetary expansion, base money has grown by 69%. It is this rapid growth in central bank money which is undoubtedly behind rising commodity prices, or put more accurately, is why the purchasing power of the dollar in international markets is falling.

  When the outlook for the purchasing power of a fiat currency falls, all holders expect compensation in the form of higher interest rates. Partly, it is due to time preference — the fact that an owner of the currency has parted with the use of it for a period of time. And partly it is due to the expectation that when returned, the currency will buy less than it does today. Official forecasts of the CPI state that the dollar’s purchasing power will probably sink to 97.5 cents on the dollar, then the yield on the ten-year UST should be at least 2.56% (2.5%/0.97), otherwise new buyers face immediate losses. The official expectation that the rise in the rate of price inflation will be temporary is immaterial to an investment decision today, because the yield can be expected to evolve over time in the light of events.

  This is before adding something to the yield for time preference (admittedly minimal in a freely traded bond), plus something for currency risk relative to an investor’s base currency and plus something for creditor risk. Stripped of these other considerations, on the basis of expected inflation alone a current yield of 1.61 appears to be far too low, and a yield target of at minimum of 2.5% appears more appropriate.

  Apologists for the dollar argue that the deeper the crisis, the greater is the desire for dollars. It is true that many holders of dollars accord to it a safe-haven status compared with their own currencies. But that is fundamentally an argument that applies to short-term liquidity more than to any other reason to hold dollars, with the exception, perhaps, of holders whose base currencies are minor and systemically weak. But with the dollar’s trade weighted index sinking itself since March 2020 that is not true of the wider currency universe. With the dollar falling against other currencies and non-Governmental foreign ownership of dollar financial assets over-owned to the point which exceeds US GDP, the safe haven argument for the dollar lacks credibility.

  The Fed’s apparently optimistic assumptions about the dollar’s stability appear to play to its own vested interest. Naturally, there is a reluctance to admit to a greater erosion of its prospective exchange rate, which consequently might require a change in interest rate policy. But commodity prices are soaring, and as locked-up consumer and business spending is unleashed, the supply of goods will be limited, partly due to a lack of domestic capital resources due to the commercial banks restricting bank credit, and partly due to continuing chaos in the supply chains. Instead of a price inflation rate at 2.5%, we should look for a significantly higher rate with which to discount the future purchasing power of the dollar.

  It is likely to be only a brief matter of time before holders of all fiat currencies address this issue soberly without the bullish sentiment currently pervading in markets. However, the advanced signs of one final fling for financial assets were visible to those who understand money in March 2020, when the Fed cut its funds rate to zero and announced QE of $120bn per month. It has been a theme of these articles ever since.

  Since then, commodities have soared in price along with other inflation hedges, such as cryptocurrencies, equities and residential property. Other than the purchasing power of currencies, the fallers are fixed interest bonds as their yields have risen.

  

  The first class of dollar holder to be affected is foreigners. Some of them are businesses which don’t really need dollars, given they will end up holding even more by exporting to the US. They must be learning it is better to have stockpiled the raw materials for production.

  Some of them are investors based in other currencies, diversifying their portfolios, ephemeral holders of financial assets who will sell them when bond yields rise further. This liquidation potential in foreign hands is a major consideration because of the enormous quantities involved. The splits between official and private sector holders (Others) are shown in Table 1 below.

  

  It should be noted that American holdings of foreign currencies are minimal becaause lending to foreigners is overwhelmingly in dollars instead of foreign currencies, and America’s massive trade deficit ensures that while dollars accumulate in foreign hands, foreign currencies do not accumulate in American hands. This makes the figures in Table 1 as a dollar crisis waiting to happen all too real.

  Once non-official holders awaken to what is happening to their dollars and to the consequences of increasing bond yields for the wider classes of financial assets, they will almost certainly reduce their holdings of nearly $23 trillion. Holdings of all dollar-denominated financial assets will be at risk, and where they go, financial assets denominated in all other currencies naturally follow. We can expect the dollar to continue its fall against other currencies as well, in part driven by President Biden’s highly inflationary spending plans. Irrespective of the domestic economic conditions, the Fed will then have no practical alternative to raising interest rates to stabilise the dollar against other currencies. But we can be sure the Fed will be extremely reluctant to do so.

  The latent primacy of markets over monetary policy

  Without doubt, there were urgent reasons for the Fed to rescue stocks and other markets in March 2020. For several decades successive Fed chairmen from Alan Greenspan onwards have openly admitted that a rising stock market is central to monetary policy, because of its roles for wealth creation and the enhancement of economic confidence. But the market rescue fourteen months ago also confirmed, if confirmation was needed, that the Fed would always address any financial and economic crisis by inflationary means. This has not yet led to the inflationary crisis that will eventually occur.

  As the much-vaunted post-lockdown consumer spending is unleashed, the lack of available production supply together with supply chain chaos can only result in consumer prices rising significantly above the Fed’s average target of 2%. Not only will this naturally lead to higher bond yields, but the valuation basis for equity markets will shift, undermining prices. Even if the Fed tries to offset it by increasing QE to feed more cash into bonds and equities, it will be impossible to offset the valuation effect. Equities will almost certainly succumb to an interest rate shock. At the same time, the increase in bond yields will undermine government finances. The prospect of increasing losses on portfolio investments will inevitably lead to the foreign liquidation described above, causing a weaker dollar and yet higher bond yields.

  In these conditions the Fed will be trapped. It cannot let bond and equity prices slide and risk commercial banks accelerating the contraction of bank credit, leading inexorably to the liquidation of loan collateral. Investment sentiment would turn deeply negative. Nor can it stand back and let markets sort themselves out, because of the record levels of corporate and other debt which would become impossible to refinance. Nor can it just print money in order to rescue everything, because the dollar will be further undermined. That leaves it with only one alternative left to pursue, albeit with the greatest reluctance. And that is to raise interest rates — substantially.

  Neo-Keynesians, who appear to subscribe to the belief that interest is usuary and savers must be denied returns for the benefit of everyone else, are embedded in central banks and are certain to denounce this attempt at a remedy. But the experience of the 1970s confirms that central banks will raise rates, too little too late, before eventually deciding to kill market expectations of higher interest rates by pre-empting them. Famously, this is what Paul Volcker did in 1979-81. What is less remembered is that despite prime rates hitting 20%, money supply growth continued, so that the interest cost was covered by inflationary means. This is illustrated in the chart below.

  

  From this earlier precedent, we can conclude that in the choice between ceasing to print money and raising interest rates, the Fed will raise interest rates. This adds to the growth of money supply, as can be detected by the increased rate of climb from 1979 onwards. But what would be the effect of such a policy today?

  In the 1970s, the build-up of domestic debt beyond that required to genuinely finance production had yet to occur, and the financialisation of the US economy did not happen until the mid-1980s. The increase in debt was mainly sovereign as US banks recycled oil dollars to Latin America. The only significant domestic casualty from high interest rates was the Savings & Loan industry.

  Today, the US and other economies are loaded up with debt, much of which is unproductive. A sharp rise in interest rates to contain price inflation would drive the world’s economy into an humungous debt-induced slump. And while that is exactly what is needed to clear out all the zombie deadwood, it is not within the Fed’s remit to take such action. Furthermore, with government borrowing already out of control, the US Government would be forced to curtail its spending dramatically at a time of rapidly escalating welfare obligations.

  But we are previewing the end of the road, describing events which logically procede from the dangers before us today. But for now, the consequences of rising bond yields are that they will bring a rapid shift from overtly bullish assumptions to a more considered bearish outlook, bringing with it a wholly different perspective. Instead of bad and inflationary policies being tolerated or even demanded by investors, their thinking turns on a dime to a fear of anything and everything. Under bearish circumstances, every turn of the central management of economic outcomes only makes things worse, when before it appeared to resolve them. Greenspan and the Fed chairmen who followed him were correct about the psychology of improving markets, while they kept quiet about the negative psychology of bear markets. Suddenly, we will find that Charon is waiting to ferry the bodies of the bulls over the river Styx.

  Such is the violence of market imbalances that when they are unleashed from the Fed’s control, not only will financial markets face rapid value destruction, but fiat currencies will also be undermined by the need to accelerate the pace of monetary inflation. The emphasis for inflationary policies will shift from financing governments by debauching the money to debauching the money in order to rescue the wider economy. The Fed and its sister central banks will seek to supplement contracting bank credit, make capital freely available to businesses which would otherwise collapse, continue with helicopter drops of money to consumers, and compensate for supply chain disruption. The policy planners are likely to be so confused and the task so enormous that they will end up robbing Peter to pay… who else but Peter himself.

  The relevant precedent for this madness comes from 1720, when John Law in France, who among other things was appointed Controller General of Finance, printed unbacked livres to inflate and then support the collapsing Mississippi bubble. His venture lived on to fight Clive in India, but the livre became worthless within seven months. Today, some contemporary corporations will survive, as did Law’s Mississippi venture, but by tying the bubble to the currency, the currency failed completely and is almost certain to do so again today.

  Gold and rising interest rates

  As a consequence of current events, the failure of fiat currencies is increasingly assured. Unlike the runaway inflation in the 1970s which followed the ending of the Bretton Woods Agreement, debt levels are now so high and state intervention in markets so great that hiking interest rates in the manner deployed by Paul Volcker would simply prick the everything bubble. Debt defaults would be overwhelming. Nevertheless, as the purchasing power of fiat currencies continues to slide, higher and higher interest rates become inevitable as markets try to discount yet further declines towards their ultimate valuelessness.

  There is a common misconception that does not accord with the facts: that higher interest rates are bad for the gold price. It is assumed by those promoting this nonsense that gold does not have an interest rate and is therefore at a disadvantage compared with fiat money. This is only true of both physical gold and fiat cash to hand, when neither folding notes nor gold pay interest. But both can be loaned and leased to borrowers for interest. It’s just that the interest on ephemeral fiat tends to be higher than on physical gold, because gold is the more stable form of money with no issuer risk.

  That rising interest rates on fiat currencies are no deterrent to a rising gold price is confirmed in the chart below, which shows how these relationships evolved in the 1970s.

  

  Not only did the decade commence with the yield on the 1-year US Treasury bond at less than six per cent, ending at more than double that, but the gold price rose from $35 to $524 by the end of the decade. Furthermore, the chart shows that from 1972 onwards, gold tended to rise with the yield on the bond and fall with it, defying those who fail to grasp the true relationship.

  All this assumes that the collapse of fiat currencies’ purchasing power will take some time. But the truth of the matter is we do not know either the timing or how long it will take. It is unlikely to echo the great European inflations of the 1920s, because to a large degree commerce subsisted on the alternative of gold-backed dollars, instead of local currencies. Today, the collapse of the dollar will mean there is unlikely to be any alternative currency available, because they are all tied to the dollar.

  A collapse of financial asset values taking the currencies down with them appears to be more in common with a repetition of John Law’s bubble and subsequent collapse, which incidentally was a forerunner of Keynesianism in action. But a fiat currency going to zero today could take less time, given instantaneous modern communications. In that event, anyone who does not plan to get hold of some physical gold and silver with a high degree of urgency could end up sinking with nothing but valueless fiat currencies.

  Tyler Durden
  Fri, 05/07/2021 – 20:20

• Screw Lumber, Just 3D-Print Your Next Home 
  Screw Lumber, Just 3D-Print Your Next Home 

  With lumber prices up 67% since the start of this year and up 340% from a year ago, according to Random Lengths, a wood products industry tracking firm, adding tens of thousands of dollars to new residential builds, there is a viable new option to construct a home (lumber free) through machine-printed clay. 

  Machine-printed clay homes are lumber-free and mitigate the ecological impacts of construction could soon become a viable option for affordable housing. 

  The push for 3D-printed homes could already be underway due to the historic rise in lumber prices. The National Association of Home Builders recently said lumber costs for a new single-family home had risen $36,000 in the past year. Lumber is found in framing, roofing, flooring, windows, cabinets, railings, and the list goes on and on. 

  Now there’s a new way to completely circumvent lumber via the Italian 3D printing company, WASP, who built a prototype of a 3D-printed home that looks like Lars homestead from Star Wars. 

  

  WASP works with Milan-based architectural firm, Mario Cucinella Architect, to develop one-of-a-kind clay homes that are entirely 3D printed out of clay. 

  

  “From the shapeless earth to the earth as house-shaped. Today we have the knowledge to build with no impact in a simple click,” said Massimo Moretti, the founder of WASP. 

  

  The WASP printer can print 538 square feet of living space and, therefore, make it possible to build independent living modules, of any shape, in a few days. Multiple printers can be linked together and create a more elaborate home.

  

  Instead of clay, Apis Cor, 3D printing specialists based in Russia and San Francisco, are printing homes with a concrete solution in under 24 hours. 

  The disruptive nature of 3D printing allows homes to be constructed lumberless. Given today’s market conditions, we could see an uptick in interest as people seek other methods and or materials to build houses. 

  Tyler Durden
  Fri, 05/07/2021 – 20:00

• Blinken Demands WHO Invite Taiwan Into Decision-Making Body Over Chinese Objections
  Blinken Demands WHO Invite Taiwan Into Decision-Making Body Over Chinese Objections

  Secretary of State Antony Blinken on Friday issued a statement that’s sure to once again provoke Beijing, urging the World Health Organization (WHO) to formally invite Taiwan’s participation in the global body which works alongside the UN.

  China has long seen such a proposal as an “illegal” violation of the longstanding One China policy, which both the UN and WHO have thus far upheld. Ignoring this, Blinken called on the WHO to facilitate Taiwan’s participation in the upcoming World Health Assembly meeting which is set for the last week of May in Geneva.

  

  “There is no reasonable justification for Taiwan’s continued exclusion from this forum, and the United States calls upon the WHO Director-General to invite Taiwan to participate as an observer at the WHA – as it has in previous years, prior to objections registered by the government of the People’s Republic of China,” Blinken said in a statement Friday.

  China has consistently blocked Taiwan’s participation even as an ‘observer’ going back to 2016. 

  Blinken argued that Taiwan is a “reliable partner” and a “vibrant democracy,” saying that—

  “We urge Taiwan’s immediate invitation to the World Health Assembly.”

  He said the urgency of stopping the global pandemic means “political disputes” must not get in the way, given the virus knowns no boundaries or conflicts over autonomy. 

  “Global health and global health security challenges do not respect borders nor recognize political disputes,” Blinken’s statement continues.

  Blinken calls on WHO director-general @DrTedros to invite Taiwan to participate in the World Health Assembly.

  “There is no reasonable justification for Taiwan’s continued exclusion from this forum….” https://t.co/UVIcpo1L2P

  — Chuck Ross (@ChuckRossDC) May 7, 2021

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

  “Taiwan offers valuable contributions and lessons learned from its approach to these issues, and WHO leadership and all responsible nations should recognize that excluding the interests of 24 million people at the WHA serves only to imperil, not advance, our shared global health objectives.”

  The fresh Friday statements echoed similar statements of US officials at the G-7 meeting in London at the start of this week. China’s Foreign Ministry has vehemently fought Taiwan’s WHA entry on the basis that Taipei and its backers refuse to “recognize that both sides of [the Taiwan Strait] belong to one and the same China.”

  Tyler Durden
  Fri, 05/07/2021 – 19:40

• South Carolina To Add Death-By-Firing-Squad As Execution Method 
  South Carolina To Add Death-By-Firing-Squad As Execution Method 

  South Carolina House members voted Wednesday to add execution by firing squad amid a lack of lethal injection drugs, according to local newspaper The State. 

  State lawmakers voted 66-43 Wednesday for a bill that would add death by firing squad to the default method of execution from lethal injection to the electric chair. The state is one of nine that still use the electric chair and will become the fourth to use firing squads. 

  The state Senate approved the bill in March but conducted another procedural vote after some minor modifications. The bill now heads to the desk of Republican Gov. Henry McMaster, who is expected to sign it. 

  “We are one step closer to providing victims’ families and loved ones with the justice and closure they are owed by law. I will sign this legislation as soon as it gets to my desk,” McMaster tweeted after the bill’s passage. 

  We are one step closer to providing victims’ families and loved ones with the justice and closure they are owed by law. I will sign this legislation as soon as it gets to my desk.

  — Gov. Henry McMaster (@henrymcmaster) May 5, 2021

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  Supporters say execution by firing squad will deliver justice. Opponents say the form of execution could lead to an innocent person’s death. 

  Once McMaster signs the bill into law. It will end South Carolina’s 10-year dry streak on executions. Current law states inmates have the option of death by the electric chair or lethal injection. But due to a nationwide shortage of drugs, death by firing squad is set to become a quick, cheap, and easy way to execute criminals. 

  “Getting the death penalty back on the track will be positive for the criminal justice system, I know it will be for the victims in those cases, unfortunately, I have victims in those cases that I’ve helped that are waiting too,” Rep. Tommy Pope, R-York, who is also a prosecutor, told local news WIS. 

  Meanwhile, Democrats are concerned the law would lead to the death of potentially innocent people.

  “It would not sit well on my conscience,” said Rep. Jermaine Johnson, D-Richland, about the vote. “Especially in a state where we claim to be pro-life, and we claim to believe in individuals and their rights to live and survive, but we are literally talking about a bill today that if this stuff passes we are literally signing their death certificates,” he said.

  Utah, Mississippi, and Oklahoma are the only other states that allow death by firing squad. As soon as McMaster signs the bill into law, South Carolina will be added to the list. 

  Tyler Durden
  Fri, 05/07/2021 – 19:20

• Joe Biden's Offshore Wind Energy Mirage
  Joe Biden’s Offshore Wind Energy Mirage

  Authored by Craig Rucker via RealClearEnergy.com,

  President Biden recently announced ambitious plans to install huge offshore industrial wind facilities along America’s Atlantic, Gulf of Mexico and Pacific coasts. His goal is to churn out 30 gigawatts (30,000 megawatts) of wind capacity by 2030, ensuring the U.S. “leads by example” in fighting the “climate crisis.”

  

  Granted “30 by 2030” is clever PR. But what are the realities?

  The only existing U.S. offshore wind operation features five 6-MW turbines off Rhode Island. Their combined capacity (what they could generate if they worked full-bore, round the clock 24/7) is 30 MW. Mr. Biden is planning 1,000 times more offshore electricity, perhaps split three ways: 10,000 MW for each coast.

  While that might sound impressive, it isn’t.  It means total wind capacity for the entire Atlantic coast, under Biden’s plan, would only meet three-fourths of the peak summertime electricity needed to power New York City.  Again, this assumes the blades are fully spinning 24/7. In reality, such turbines would be lucky to be operating a top capacity half the time. Even less as storms and salt spray corrode the turbines, year after year.

  The reason why is there is often minimal or no wind in the Atlantic – especially on the hottest days. Ditto for the Gulf of Mexico. No wind means no electricity – right when you need it most.

  Of course, too little wind isn’t the only issue. Other times, there’s too much wind – as when a hurricane roars up the coast. That’s more likely in the Gulf of Mexico. But the Great Atlantic Hurricane of 1944 had Category 4 winds in Virginia, Category 3 intensity off Cape Hatteras (NC), Long Island and Rhode Island, and Category 2 when it reached Maine. It sank four U.S. Navy and Coast Guard ships.

  When storms or hurricanes hit, turbines can be destroyed. Repairing or replacing hundreds of offshore turbines could take years.

  If the White House is planning to generate all that power using common 6-MW turbines, our coastlines would need a hefty 5,000 of the 600-foot tall monsters dotting them. The Washington Monument is 655 feet tall.

  Going instead with 12-MW turbines, like the 850-foot-tall GE Haliade-X turbines Virginia is planning to install off its coast, America would still need 2,500 of the behemoths – just to complete Phase One of Biden’s plan. 30,000 megawatts by 2030.  Even if these were all plopped in the Atlantic, it still would not be enough to meet New York State’s current electricity needs.

  And what about the environment?

  How many millions of tons of steel, copper, lithium, cobalt, rare earth elements, concrete, petroleum-based composites (for turbine blades) and other raw materials would be required to manufacture and install the turbines and undersea electrical cables, especially where deep-water turbines are involved? 

  How many billions of tons of ore would have to be mined, crushed, processed and refined – considering that it takes 125,000 tons of average ore for every 1,000 tons of pure copper metal?

  Not only would nearly all of this mining and manufacturing require fossil fuels, but much of it would be done in China, or in other countries by Chinese-owned companies. Haliade-X turbines are also manufactured in China. And much of the mining and processing is done under horrid workplace safety and environmental conditions, often with near-slave and child labor.

  More turbines will also kill countless birds and bats. Turbine infrasound and other noise have been implicated in disorienting and stranding whales and dolphins. The numbers, height and low-frequency turbine noise also interferes with surface ships, submarines, aircraft and radar.

  Nuclear power or billions of batteries (or retained fossil fuel power plants) will have to back up every megawatt of intermittent, unreliable wind power, so that society can function every time the wind fails. That means more raw materials, transmission lines and costs.

  Even with massive taxpayer subsidies, electricity generated by offshore turbines will cost many times what we are paying today, even in New York and California. That will have especially heavy impacts on energy-intensive industries, hospitals, and poor, middle-class, minority and fixed-income families.

  Economic, environmental and climate justice reviews must fully, carefully and honestly assess every one of these factors. No “expedited” or “climate emergency” shortcuts should be permitted.

  President Biden likes to say offshore wind energy is clean, green, renewable and sustainable. Wind itself certainly is. But harnessing the wind (or sun), to meet the needs of modern civilization is not – especially in ocean environments.

  Claiming otherwise is a mirage – a scam. Maybe that’s why the Bureau of Ocean Energy Management already canceled two wind projects off Long Island. The costs and impacts are enormous, and local opposition was high. Do climate activists in and out of the Biden Administration expect otherwise anywhere else?

  Tyler Durden
  Fri, 05/07/2021 – 19:00

• Nearly 50% Of Americans Believe Social Distancing Will Become Permanent
  Nearly 50% Of Americans Believe Social Distancing Will Become Permanent

  The persistent question over the past months as more of the US population has had access to COVID-19 vaccines has remained: “when will it all end?” A new poll has found that nearly half of Americans believe some form of social distancing measures will now become permanent, according to a study by Signs.com. 

  The majority, however, at 64% believe that their local and state governments will loosen up restrictions like caps on attending public venues or being in places like bars or restaurants, even should national policies remain in place, at some point within the next three months. 

  

  The recent study on Americans’ views of distancing measures was published as it’s becoming increasingly clear that large states like Texas have not suffered a resurgence in the virus even after it “opened 100%” at the start of March.

  The extensive polling data was also released just as a major MIT study challenged many social distancing guidelines, including the effectiveness of mask-wearing. The study found that “one is no safer from airborne pathogens at 60 feet than 6 feet.”

  “We need scientific information conveyed to the public in a way that is not just fearmongering but is actually based in analysis,” the MIT scientists said.

  Yet Americans now fear that many of these policies previously forced on the population like the “6 foot rule” (even as they were anything but “established science”) will now become permanent.

  

  

  Below are some of the key takeaways from the survey, which was published Friday:

  • 45.4 percent of respondents disliked the “new normal” of social interactions during COVID-19
  • 43.1 percent believe the world would go back to normal, just as it used to be 
  • 41.3 percent thought that some social distancing measures would remain permanently, even after the pandemic ends
  • 57.6 percent said they are uncomfortable visiting the gym, while 54.4 percent said the same about restaurants and 45.2 percent said the same about hospitals. 
  • 72.6 percent said they felt most comfortable going to places like parks (72.6 percent), grocery stores (59 percent) and pharmacies (57.9 percent) in person. 
  • 54.8 percent listed one-way aisles in stores as the most annoying social distancing measure
  • 22.9 percent confirmed they were following social distancing rules more strictly now than at the beginning of the pandemic compared with 27.7 percent who had decreased their efforts in following the previously adopted practices. 

  Via Signs.com study…

  

  And there was this interesting line from the study: “53.7% of baby boomers believed some social distancing measures would remain in place permanently.”

  Ultimately, the survey concluded, “43.1% of respondents believed that the world would go back to normal, just as it used to be” while in contrast “41.3% thought that some social distancing measures would remain permanently, even after the pandemic ends.”

  Tyler Durden
  Fri, 05/07/2021 – 18:40

• Stephen Moore: "Something Is Very Fishy" About The Biden Census Bureau Data
  Stephen Moore: “Something Is Very Fishy” About The Biden Census Bureau Data

  Authored by Stephen Moore, op-ed via The Epoch Times,

  Why Did Biden Census Bureau Add 2.5 Million More Residents to Blue-State Population Count?

  There is something very fishy about the new 2020 Census Bureau data determining which states picked up seats and which states lost seats.

  

  Most all of the revisions to the original estimates have moved in one direction: Population gains were added to blue states, and population losses were subtracted from red states.

  The December revisions in population estimates under the Biden Census Bureau added some 2.5 million blue-state residents and subtracted more than 500,000 red-state residents. These population estimates determine how many electoral votes each state receives for presidential elections and the number of congressional seats in each state.

  Is this a mere coincidence?

  These population estimates determine how many electoral votes each state receives for presidential elections and the number of congressional seats in each state.

  Remember, the House of Representatives is razor-thin today, with the Democrats sporting just a six-seat majority with five seats currently vacant. So, a switch in a handful of seats in 2022 elections could flip the House and take the gavel from current Speaker Nancy Pelosi and the Democrats. A shift of 3 million in population is the equivalent of four seats moving from Republican to Democrat.

  The original projections for Census reapportionment had New York losing two seats, Rhode Island losing a seat, and Illinois perhaps losing two seats. Instead, New York and Illinois only lost one seat, and Rhode Island lost no seats. Meanwhile, Texas was expected to gain three seats, Florida two seats, and Arizona one seat. Instead, Texas gained only two seats, Florida only one, and Arizona none.

  Was the Census Bureau count rigged? Was it manipulated by the Biden team to hand more seats to the Democrats and to get more money—federal spending is often allocated based on population—for the blue states?

  The evidence is now only circumstantial, but when errors or revisions are almost all only in one direction, the alarm bells appropriately go off.

  Here are some of the strange outcomes in the Census revisions just released:

  No. 1: New York—We’ve been tracking the annual population/migration changes between states since the last census in 2010. Over the past decade, New York LOST about 1.3 million residents on net to other states. (This does not include immigration, births, and deaths.) Still, this is a population loss that is the equivalent of two, maybe three, lost congressional seats. But the final numbers ADDED approximately 860,000. That’s roughly twice the population of Buffalo and Rochester—combined. This is the state that has lost by far the largest population over the past decade.

  No. 2: Many deep-blue states had 2020 Census numbers significantly revised upward from their December estimates: Connecticut, Hawaii, Illinois, Massachusetts, New Jersey, New York, Rhode Island, and Vermont.

  No. 3: Many red states had 2020 Census numbers lower than their 2020 estimates: Arizona, North Carolina, and South Carolina.

  No. 4: Going back to the 2010 Census, the final headcount in every state was within 0.4 percent of the original estimate, and 30 of them were within 0.2 percent. This time around, 19 states were more than 1 percent off, 7 were more than 2 percent off, New York was more than 3.8 percent off, and New Jersey was more than 4.5 percent off.

  No. 5: Virtually every one of the large deviations from the estimates favored Democrats. Just five states in the 2020 Census were within the same margin (0.41 percent) that all states were within from the 2010 census.

  Maybe the 2010 estimates were abnormally accurate, or maybe the 2020 estimates were abnormally inaccurate. The Census Bureau needs to tell Congress why these revisions under former President Barack Obama were so much larger than normal and so weighted in one direction: toward the blue states.

  Tyler Durden
  Fri, 05/07/2021 – 18:20

• Developer Pivots Luxury Brooklyn High-Rise Condo To Rentals 
  Developer Pivots Luxury Brooklyn High-Rise Condo To Rentals 

  A high-end condominium glut in Brooklyn forced one developer to reconstruct its entire business model from condos to rentals for one of its new luxury highrises. 

  Avery Hall Investments announced Monday the commencement of leasing at One Boerum Place located at Brooklyn Heights and Boerum Hill. Bloomberg notes the building was never intended for rentals, but a glut of condos in the borough and citywide forced the developer to change paths. 

  Avi Fisher, a founding partner of Avery Hall, told Bloomberg that One Boerum Place “was very much envisioned as a condo.” At the time of construction, which began around 2016, the condo market in the borough was “roaring, and all signs were pointing to continued growth, and in our company’s history, this was the culmination of the condo pipeline we’d amassed,” he said. 

  In all, Fisher said his firm spent about $250 million on building costs. When 2019 came along, the condo market began to deteriorate. A year later, during the pandemic, the condo market plunged as city dwellers moved to suburban areas and rural communities to escape the socio-economic collapse of the liberal-run city. 

  

  Sales of One Boerum Place were to begin in late 2020, but Fisher and his team began to evaluate the oversupplied condo market. That’s when they decided to flip the business model from selling condos to high-end rentals. 

  “What solidified the fate of this building was ultimately the pandemic,” Fisher said. “The condo market deteriorated to the point where the decision was clear to us.”

  To change course, Fished received approval from lenders and partners. The press release today outlines “pre-leasing commences” at the luxury building. 

  “One Boerum Place will now become luxury rentals, with prices ranging from $8,500 a month for a roughly 1,200-square-foot three-bedroom to $12,000 a month for a roughly 3,120-square-foot four-bedroom. There are also, the developer says, “not many” one-bedroom apartments which will start in “the low $4,000s,” and a few two-bedroom apartments that will rent for just under $6,000,” Bloomberg said. 

  Fisher said his company made the right move:

  “As an organization, we felt the right move for us and our investors and partners was to [create] a rental portfolio,” he said, “because we believe it will stand the test of time.”

  Fisher explained the “exodus in Manhattan” resulted in a “large number of [those] people came to Brooklyn.” He believes his building could be in a perfect spot to capture the outflow of Manhattanites.

  He added: “We don’t have to sell this asset now, and the best way we can help participate in the recovery of New York and capitalize on that [recovery] is to execute a rental plan.”

  Brooklyn’s rental glut may get worse as new supply via One Boerum Place has just hit the market. 

  Tyler Durden
  Fri, 05/07/2021 – 18:00

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• Social Unrest Fears Mount As World Food Prices Soar In April
  Social Unrest Fears Mount As World Food Prices Soar In April

  Global inflation is headed into overdrive as the leading food price indicator that is the United Nations’ Food and Agriculture Organization’s food price index increased for an 11th consecutive month in April, hitting levels not seen since May 2014, with sugar prices leading the rise in the main index. 

  The Rome-based FAO released data Thursday showing the food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat, and sugar, surged 2 points from 118.9 points in March to 120.9 in April. 

  

  That is a 30.7% YoY jump – the fastest rise since 2011…

  

  The April surge was primarily led by price increases of sugar, oils, meat, dairy, and cereals. 

  

  FAO’s cereal price index moved up 1.2% in April M/M and 26% Y/Y. Drought conditions in Argentina, Brazil, and the US increased corn prices by 5.7% last month, while wheat prices were flat. Global rice prices slipped last month. 

  

  FAO’s vegetable oil price index rose 1.8% last month because of increasing soy, rapeseed, and palm oil prices, which offset lower sunflower oil prices.

  Milk prices increased 1.2%, with surging demand from Asia, while the meat index rose 1.7%. FAO said there was “solid demand” for bovine and ovine meat in East Asia. 

  

  The idiots at the Marriner Eccles building seemingly have no interest in reading the extensive literature in connecting higher food prices to periods of social unrest.  Indeed, you’ll notice from the chart below that the last big surge from the middle of 2010 to early 2011 coincided with the start of the Arab Spring, for which food inflation is regarded as a contributing factor.

  

  While this is hardly new – we discussed it in “Why Albert Edwards Is Starting To Panic About Soaring Food Prices” and in “We Are Edging Closer To A Biblical Commodity Price Increase Scenario.”

  DB’s Jim Reid reminds us that emerging markets are more vulnerable to this trend since their consumers spend a far greater share of their income on food than those in the developed world.

  Inflation is always a monetary phenomenon, and this time is no different. Central bankers call transitory effects, but we beg to differ.  

   

  Tyler Durden
  Fri, 05/07/2021 – 02:45

• NATO's Southeastern Spearhead: Turkey's Military Aggression In Iraq, Syria, Yemen, & Caucasus Signals Proxy Conflict With Iran
  NATO’s Southeastern Spearhead: Turkey’s Military Aggression In Iraq, Syria, Yemen, & Caucasus Signals Proxy Conflict With Iran

  Authored by Rick Rozoff via Anti-Bellum,

  The past week has witnessed reports of increased Turkish military activity in Iraq and Syria as well as its intruding itself deeper into the war in Yemen. In all three cases Ankara has pitted itself against forces that are or can be seen to be pro-Iranian: Shiite parties in northern Iraq, the government of Syria and the Houthi-led government in Yemen.

  

  Direct tensions between Turkey and Iran have been increasing since last year over the above three nations as well as the Turkish-directed attack on Nagorno-Karabakh by Azerbaijan (Turkey and Azerbaijan identify themselves as “one nation, two states’) and its aftermath.

  Each time the North Atlantic Treaty Organization has rushed to Turkey’s defense over the past eighteen years – holding Article Four consultations four times (one time to “protect” it against Iraq, three times against Syria), maintaining three Patriot anti-ballistic missile batteries since 2013 – it has referred to the nation as NATO’s southeastern border. In addition to Turkey having the largest population and the largest military of any NATO member state except for the U.S., it is also the only member of the military bloc to border countries in the Middle East and the Caucasus: Iraq, Iran, Syria, Armenia, Azerbaijan and Georgia. Turkey has invaded the first and third and participated in a near-invasion against the fourth. (Last September a Turkish F-16 shot down an Armenian SU-25, killing its pilot.)

  The U.S. maintains B61 nuclear bombs in Turkey under a NATO nuclear sharing/burden sharing arrangement which mandates that the host country provide aircraft to deliver the bombs. NATO also has its Joint Command Southeast and Allied Air Component Command headquarters in Turkey. It moved its Allied Land Command to Turkey in 2012. In the same year it installed a Forward-Based X-Band Transportable anti-missile radar facility with a range of 2,900 miles. This year it handed over the command of its Very High Readiness Joint Task Force to Turkey.

  Nothing Turkey does in the Middle East, the Caucasus, North Africa and the Eastern Mediterranean can be seen aside from its status as a NATO member. Nothing it has done and is doing in those locations has ever been criticized by NATO.

  On April 23 Turkey’s military launched Operations Claw-Lightning and Claw-Thunderbolt in northern Iraq, claiming to have destroyed over 500 targets in attacks that included strikes from warplanes, drones and artillery and airdropping paratroopers and commandos from Chinook and Black Hawk helicopters.

  On May 1 Turkey’s Interior Minister Suleyman Soylu announced that Turkey will construct a military base in Iraq, ostensibly to combat the Kurdistan Workers’ Party (PKK), stating, “Just like we did in Syria, we will establish bases and control the area.”

  The leader of the al-Nahj al-Watani party in the Iraqi parliament, Ammar Ta’meh, denounced Turkey’s “expansionist plans,” stating they would further vitiate already strained relations between the two countries and “bring harm and loss to everyone.”

  In addition to the PKK, Turkish military forces in northern Iraq have increasingly come into conflict with pro-Iranian Shiite groups, leading to direct engagements as well as to worsening the antagonism between Ankara and Tehran.

  In February the Iranian Foreign Ministry summoned the Turkish ambassador to Iran, Derya Örs, to express grave concerns over the Turkish interior minister accusing Iran of harboring PKK fighters. Iran condemned the remark as being “unacceptable” and a violation of protocols befitting cooperation and good relations between nations.

  The Foreign Ministry also communicated objections to comments by Turkey’s ambassador to Iraq (see below), with the government news agency adding, “the territorial integrity and national sovereignty of countries were stressed as the fortifying base of international relations.”

  Later the same month Turkey summoned the Iranian ambassador to condemn remarks by Tehran’s ambassador to Iraq, Iraj Masjedi, accusing Turkey of violating Iraq’s sovereignty and territorial integrity – which is the simple truth – with ongoing cross-border military operations. His words were: “We reject military intervention in Iraq and Turkish forces should not pose a threat to violate Iraqi soil.”

  Turkey’s ambassador to Iraq, Fatih Yildiz, responded in a tweet with: “Ambassador of Iran would be the last person to lecture Turkey about respecting borders of Iraq.”

  The Turkish accusations against Iran center in part on claims that Iranian units of the Popular Mobilization Forces (PNF) were in some – truly convoluted – manner affiliated with PKK fighters in northern Iraq. And on the contention of Turkish Foreign Minister Soylu, as seen above, that Iran was harboring “525 terrorists.” He didn’t indicate how he had determined the exact figure.

  Almost two months before the current Turkish offensive in Iraq, Iraqi news reports stated that Popular Mobilization Forces militias were deploying three brigades in the Sinjar district of the Nineveh Governorate in northern Iraq to confront Turkish incursions. It was also reported that “the PMF has deployed 15,000 fighters and built new bases in Sinjar to counter any Turkish military threat.”

  Another proxy conflict between Turkey and Iran is in Yemen. Recently Abdul Wahab Al-Mahbashi, member of the Supreme Political Council in Yemen, the executive body of the Houthi-led government based in Sanaa, warned Turkey against further military involvement in his nation. He predicted that Turkey, like its new ally Saudi Arabia, would be defeated in any attempt to do so, stating, “If Turkish soldiers enter Yemen they will have a fate worse than that of the aggressors who preceded them.”

  Recent reports claim that Turkey has unloaded twenty armored vehicles and equipment at Somali ports to be shipped to the Yemeni port of Qena for Saudi-backed Islah militias.

  From the beginning of the horrific catastrophe inflicted on the Yemeni people by Saudi Arabia, the U.S. and their allies, the perception has existed that at root the crisis there was in part a Saudi-Iranian proxy war. Turkey has now entered that conflict on behalf of Saudi Arabia and against Iran.

  In a recent report by the Middle East Monitor based on regional press accounts it was suggested that Turkey will replicate in Yemen what has proven effective for it in Libya and Nagorno-Karabakh. A two-pronged strategy of drone warfare and importing Islamist mercenaries. The Shaam Times reported that 300 Syrian fighters have joined the ranks of the Islah militia in Marib, the last stronghold of Saudi-backed forces in the north of Yemen.

  Turkish drones were used extensively in Libya and against Nagorno-Karabakh and Armenia, and Turkey has now provided Bayraktar TB2 drones to Ukraine for the war in the Donbass. The Middle East Monitor feature indicates that Turkish drones have already been used in Yemen.

  Abdul Wahab Al-Mahbashi, the above-cited Yemeni official, warned that Turkey could deploy troops to his country, in which case “Invading Yemen will not have a happy ending for Erdogan himself as well as the country’s government and military,” or could repeat what it did in Libya and Nagorno-Karabakh by deploying mercenaries.

  During last year’s war by Azerbaijan and Turkey against Nagorno-Karabakh, Armenian, Syrian and Russian officials and other sources warned of Turkey deploying thousands of Syrian and other mercenaries, as many as 4,000, to Nagorno-Karabakh.

  Since the collapse of the Soviet Union and the emergence of Armenia as an independent nation in 1991, Iran has had no closer or more reliable ally in the world. The Azerbaijani-Turkish war against Nagorno-Karabakh and Armenia last year was then also a message to Iran. In two ways. First, its closest ally was attacked and humiliated. Second, a war to “liberate” ethnic Azeris was a warning to Iran itself, where as many as 18 million ethnic Azeris reside.

  Turkish President Recep Tayyip Erdoğan was the guest of honor at the postwar victory parade in the capital of Azerbaijan on December 10, where among other matters he praised Enver Pasha, one of the key architects of the Armenian genocide of the last century, and read a poem condemning the “division of Azerbaijani territory” between Iran and Russia in the 1800s.

  As a result of Erdoğan’s incitement in Baku, the Iranian Foreign Ministry summoned Turkey’s ambassador to Tehran. “The Turkish ambassador was informed that the era of territorial claims and expansionist empires is over,” Iran’s Foreign Ministry said on its website.

  “Iran does not allow anyone to meddle in its territorial integrity.”

  In addition to Turkey’s proxy wars with Iran in Iraq, Yemen and the Caucasus, there is also that in Syria. As the Turkish interior minister acknowledged above, Turkey has troops and bases in the north of the country. Its military incursions have displaced tens if not hundreds of thousands of Syrian civilians. In the past week Syrian news sources have reported that:

  The governor of Raqqa, Abdul Razzaq Khalifa, accused Turkey of reducing the water supply from the Euphrates River to Syria from 500 to 200 cubic meters per second, contrary to a 1987 agreement not to reduce the rate to under the first level, “which prevented the operation of the turbines from generating electricity produced in the Euphrates Dam, in addition to reducing irrigation and drinking water.”

  Syrian Arab News Agency places the event in the context of continued military attacks by Turkey and mercenaries under Turkish control.

  An explosive device was triggered in the city of Ras al-Ayn “where Turkish occupation forces and their terrorist mercenaries” operate.

  The Turkish military and its mercenary allies fired a barrage of rocket and artillery shells against several villages in the northern Aleppo countryside and near the Meng Military Airport.

  Two pro-Turkish fighters were killed in internecine fighting in the city of Jarablus.

  By expanding military attacks against Iran’s few allies in the world – in Iraq, in Yemen, in Armenia, in Syria – Turkey is spearheading the West’s campaign to isolate, contain and confront Iran.

  Tyler Durden
  Fri, 05/07/2021 – 02:00

• Are Americans Becoming Sovietized?
  Are Americans Becoming Sovietized?

  Authored by Victor Davis Hanson, op-ed via The Epoch Times,

  What ultimately ended the nihilist Soviet system?

  Was it not that Russians finally tired of the Kremlin’s lies and hypocrisies that permeated every facet of their falsified lives?

  

  Here are 10 symptoms of Sovietism.

  Ask yourself whether we are headed down this same road to perdition.

  1. There was no escape from ideological indoctrination—anywhere. A job in the bureaucracy or a military assignment hinged not so much on merit, expertise, or past achievement. What mattered was loud enthusiasm for the Soviet system.

  Wokeness is becoming our new Soviet-like state religion. Careerists assert that America was always and still is a systemically racist country, without ever producing proof or a sustained argument.

  2. The Soviets fused their press with the government. Pravda, or “Truth,” was the official megaphone of state-sanctioned lies. Journalists simply regurgitated the talking points of their Communist Party partners.

  In 2017, a Harvard study found that over 90 percent of the major TV news networks’ coverage of the Trump administration’s first 100 days was negative.

  3. The Soviet surveillance state enlisted apparatchiks and lackeys to ferret out ideological dissidents.

  Recently, we learned that the Department of Defense is reviewing its rosters to spot extremist sentiments. The U.S. Postal Service recently admitted it uses tracking programs to monitor the social media postings of Americans.

  CNN recently alleged that the Biden administration’s Department of Homeland Security is considering partnering with private surveillance firms to get around government prohibitions on scrutinizing Americans’ online activity.

  4. The Soviet educational system sought not to enlighten but to indoctrinate young minds in proper government-approved thought.

  Currently, cash-strapped universities nationwide are hiring thousands of diversity, equity, and inclusion staffers and administrators. Their chief task is to scan the admissions, hiring, curriculum, and administration at universities. Like good commissars, our diversity czars oversee compliance with the official narrative that a flawed America must confess, apologize for, and renounce its evil foundations.

  5. The Soviet Union was run by a pampered elite, exempt from the ramifications of their own radical ideologies.

  Now, woke Silicon Valley billionaires talk socialistically but live royally. Coke and Delta Airlines CEOs who hector Americans about their illiberality make millions of dollars a year.

  What unites current woke activists such as Oprah Winfrey, LeBron James, Mark Zuckerberg, and the Obamas are their huge estates and their multimillion-dollar wealth. Just as the select few of the old Soviet nomenklatura had their Black Sea dachas, America’s loudest top-down revolutionaries prefer living in Martha’s Vineyard, Beverly Hills, Montecito, and Malibu.

  6. The Soviets mastered Trotskyization, or the rewriting and airbrushing away of history to fabricate present reality.

  Are Americans any different when they indulge in a frenzy of name-changing, statue-toppling, monument-defacing, book-banning, and cancel-culturing?

  7. The Soviets created a climate of fear and rewarded stool pigeons for rooting out all potential enemies of the people.

  Since when did Americans encourage co-workers to turn in others for an ill-considered word in a private conversation? Why do thousands now scour the internet to find any past incorrect expression of a rival? Why are there now new thought criminals supposedly guilty of climate racism, immigration racism, or vaccination racism?

  8. Soviet prosecutors and courts were weaponized according to ideology.

  In America, where and for what reason you riot determines whether you face any legal consequences. Politically correct sanctuary cities defy the law with impunity. Jury members are terrified of being doxxed and hunted down for an incorrect verdict. The CIA and FBI are becoming as ideological as the old KGB.

  9. The Soviets doled out prizes on the basis of correct Soviet thought.

  In modern America, the Pulitzer Prizes and the Emmys, Grammys, Tonys, and Oscars don’t necessarily reflect the year’s best work, but often the most politically correct work from the most woke.

  10. The Soviets offered no apologies for extinguishing freedom. Instead, they boasted that they were advocates for equity, champions of the underclass, enemies of privilege—and therefore could terminate anyone or anything they pleased.

  Our wokists are similarly defending their thought-control efforts, forced re-education sessions, scripted confessionals, mandatory apologies, and cancel culture on the pretense that we need long-overdue “fundamental transformation.”

  So if they destroy people in the name of equity, their nihilism is justified.

  Tyler Durden
  Fri, 05/07/2021 – 00:10

• Super Rich Gobble Up "Trophy Trees" For Their Mansions 
  Super Rich Gobble Up “Trophy Trees” For Their Mansions 

  The “trophy wife” “trophy tree” has become a new status symbol for America’s super-rich during the virus pandemic, according to WSJ. In a culture where things are “on-demand,” the rich aren’t waiting around for seedlings to transform into large trees with lush canopies – they’re calling tree brokers to find the perfect tree. 

  Walter Acree, owner of landscaping business Green Integrity’s in South Florida, is part of a lucrative business: helping the super-rich find a trophy tree for their multi-million dollar estates. 

  “I’m kind of unique,” said Acree. “Not a lot of people do what I do.”

  Acree, 61, an exotic tree broker, hunts for the perfect trees for residential and commercial clients. A client of his recently was quoted at $250,000 to purchase a tree from a private owner and move it to a new site. 

  Trees On The Move

  

  Acree’s business has been steadily growing over the last five years, but with everyone fleeing Northeast cities for warm South Florida markets. He said his business had been absolutely on fire since the pandemic. 

  

  “It’s the busiest the business has ever been, and we’re doing things at a scale that is just remarkable,” Tim Johnson, a partner at Fernando Wong Outdoor Living Design in Miami. He said the wealthy are demanding nondisclosure agreements to keep their horticultural endeavors super secret. 

  

  Johnson said several wealthy clients bought properties next store to demolish the home and extend their gardens.  

  A few years back, he said one of his clients was in a bidding war with basketball star Michael Jordan over a 45-foot canopied oak tree. 

  Cash-strapped elites don’t want to wait two decades to see a tree grow, and this is primarily why many of them are purchasing trees with a price range of thousands to hundreds of thousands of dollars, depending on the species of the tree and, of course, appearance. 

  Michael Chen, a Los Angeles real estate developer, told WSJ he spent 18 months searching for the perfect tree to install in the middle of his $65 million Beverly Hills mansion. The 150-year-old, 15-foot olive tree that was imported from Tuscany, which he calls the “tree of life.” 

  

  For the super-rich, it’s not just about the trophy wife and owning a 1960s Ferrari – but also owning a piece of nature as they push their horticultural ambitions towards trophy trees. At least these virtue-signaling elites can point to their tree and the good things they’re doing in life to solve climate change right as they step into their private jet.  

  Tyler Durden
  Thu, 05/06/2021 – 23:50

• Space Force Chief Scientist Says Developing Augmented 'Super Soldiers' Is "Imperative" 
  Space Force Chief Scientist Says Developing Augmented ‘Super Soldiers’ Is “Imperative” 

  Authored by Dave DeCamp via AntiWar.com,

  The top scientist in the US Space Force said last week that human augmentation should be embraced and that it is “imperative” for the US military to start working on such technology that could create a type of super-soldier.

  “In our business of national defense, it’s imperative that we embrace this new age, lest we fall behind our strategic competitors,” Dr. Joel Mozer said at an event at the Air Force Research Laboratory. Mozer said augmentation technology could produce a “superhuman workforce” that uses technologies like “augmented reality, virtual reality, and nerve stimulation.”

  

  “You could put [an] individual into a state of flow, where learning is optimized, and retention is maximized,” he said. “This individual could be shaped into somebody with very high-performing potential.”

  Mozer said that there will be “unimaginable” advances in this type of technology, as well as artificial intelligence (AI). He said AI could create “autonomous” programs that commanders can use to devise military strategies that “no human could.”

  “This will extend to the battlefield, where commanders and decision-makers will have at their disposal multiple autonomous agents, each able to control the execution of things like reconnaissance, or fire control, or attack,” he said.

  US military leaders have called for increased investments in hi-tech weapons to compete with countries like Russia and China. While there’s no evidence Russia or China are working on super-soldiers, a baseless claim about China and such technology was made last December by former Director of National intelligence John Ratcliffe.

  CAPTAIN CHINA: Regime doing human testing to create ‘super soldiers’: US official — via @inkonthepad & @nypost https://t.co/Dseecnk2de

  — Tom Durante (@TomDurante) December 4, 2020

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  In an op-ed for The Wall Street Journal, Ratcliffe said, “US intelligence shows that China has even conducted human testing on members of the People’s Liberation Army in hope of developing soldiers with biologically enhanced capabilities.”

  That one sentence from Ratcliffe spread like wildfire through Western media. Even though Ratcliffe never provided evidence for the claim, it was repeated as fact by many outlets. A few days after Ratcliffe’s op-ed was published, the French military was given the green light to begin research on “enhanced soldiers,” which was met with much less fanfare.

  Tyler Durden
  Thu, 05/06/2021 – 23:30

• April Payrolls Preview: It Will Be A Blowout Number But Will It Be "Too Blowout"
  April Payrolls Preview: It Will Be A Blowout Number But Will It Be “Too Blowout”

  What follows is our traditional payrolls preview post which looks at how Wall Street has established its latest consensus for the April print, but ahead of tomorrow’s jobs report – which could indeed be rather consequential if it is a significant outlier – the only question is what number would scare investors, one which we answered yesterday when we quoted Std Chartered’s Steven Englander who said that 2 million+ April job additions are needed for investors to see risk that the Fed changes its stance; Meanwhile, the widely expected whisper range of 1.0-1.5 million jobs “may not be enough for the Fed to shift, even if jobs exceed the 1mn consensus.”

  Of course there is also the risk of a downside surprise: only 2 of 79 forecasts are below 800,000, so the consensus of 1 million could generate a modest bond rally and 650,000 or lower, quite a move down. Given the volatility of labor-market data, such a print might not extinguish optimism, but it would raise the possibility that the market is wrong in its hawkishness and the Fed is right in its dovish stance.

  With that in mind, here is what Wall Street expects tomorrow, courtesy of Newsquawk:

  Summary: Fed officials want to see a “string” of strong jobs reports before they begin the conversation on when to taper asset purchases. While the exact meaning of “string” is yet to be explicitly defined, one would assume that this entails a consecutive run of quite a few solid jobs reports since there are, after all, almost 8.5 mln Americans that remain out of work compared to the pre-pandemic period, as officials remind us frequently. Accordingly, analysts say that in the months ahead, insight on how the economy is eroding slack may be better evidenced in the participation rate, employment/population ratio, and underemployment rate metrics, rather than the headline unemployment rate. On price pressures, the Fed has warned us that inflation is expected to run above target in the near-term, due to pandemic base effects, crude prices, and some pent-up demand; however, this is not expected to be seen in the average hourly earnings metrics in April, which may in fact tilt negative; recall, this time last year, the wages measures actually rose as lower-paid employees fell out of the survey sample – this dynamic is expected to reverse as lower-paid Americans return. Labor market proxies have generally had a constructive tilt: initial jobless claims and continuing claims data fell in the survey window; business surveys were mixed, but noted tightening labor market conditions and challenges in attracting staff; ADP payrolls fell short of expectations, but still showed healthy gains, and has tended to underreport the NFP data in recent months; announced job cuts have declined significantly.

  Consensus Expectations:

  • Non-farm Payrolls (exp. 998k, prev. 916k);
  • Private Payrolls (exp. 925k, prev. 780k);
  • Manufacturing Payrolls (prev. 55k, prev. 53k);
  • Government Payrolls (prev. 136k);
  • Unemployment Rate (exp. 5.8%, prev. 6.0%);
  • Participation Rate (prev. 61.5%);
  • U6 Underemployment (prev. 10.7%);
  • EPOP (prev. 57.8%);
  • Average Earnings M /M (exp. 0.0%, prev. -0.1%);
  • Average Earnings Y/Y (exp. -0.4%, prev. 4.2%);
  • Average Workweek Hours (exp. 34.9 hrs, prev. 34.9hrs).

  Payrolls: While consensus expects a 1 million print (with a handful of forecasts as high as 2 million or just above), Goldman believes that tomorrow’s number will be 1.3 million as mass vaccinations and the easing of business restrictions supported rapid job growth in virus-sensitive industries, including leisure and hospitality, retail, and education (public and private). Additionally, Big Data signals generally indicate job gains of 1mn or more in the month.

  Unemployment Rate: The Fed has signaled that it will continue purchases of Treasuries and mortgage bonds at a rate of $120bln/month until “substantial further progress” has been made toward its maximum-employment and price stability goals. Officials have also been cautious in using the unemployment rate as a proxy for the level of slack in the economy, with many suggesting that the ‘real’ rate of joblessness is closer to the 10.0% mark, rather than the 6.0% headline unemployment rate. Accordingly, the focus will likely be on the U6 measure of “underemployment” (which stood at 10.7% in March), and the participation metrics; the latter is becoming increasingly important to judge the progress of slack erosion, and may offer better insight than the headline unemployment rate. In the March report, participation rose by one-tenth of a percent point to 61.5%, still off the 63.2% pre-pandemic level seen in February 2020. It is also worth paying attention to the little-reported Employment/Population ratio, which some Fed officials have recently referenced; that ratio stood at 57.8% in March, still 3.3ppts beneath the pre-pandemic level of 61.1%.

  Average Hourly Earnings: Some warn that the Y/Y metrics may be dragged into negative territory in April. Recall, a year ago, as the pandemic began to bite and economies were shuttered, lower-wage workers were the first to be benched, and fell out of the data sample; this artificially buoyed the earnings metrics (pushing them higher), and the unwinding of this effect is expected to exert influence this month. The consensus therefore expects the Y/Y average hourly earnings measure to be negative for the first time on record. However, some desks are hopeful that not only will this return to positive territory quickly, but also that wages could begin rising as many surveys have alluded to: the Fed’s April Beige book noted that wages increased further over the reporting period, with employers in sectors that reported difficulties in attracting and retaining workers also highlighting tight wage competition, especially for hourly workers; the report also cited some employers lifting salaries in order to attract more workers (it points out that the ability to attract and hire employees varied considerably among contacts, depending on the industry).

  ADP Payrolls: ADP payrolls disappointed expectations, printing 742k against an expected 800k; some made the point that this was better than was implied by the Homebase employment data, which tends to focus on smaller businesses, and suggests that big companies have been proactive in reopening e-forts. As always, caveat that ADP’s data has understated that of the official BLS numbers in recent months, so desks were not revising down their NFP forecasts in wake of the release.

  Initial Jobless Claims: In the BLS survey period that coincides with the weekly unemployment claims data, initial jobless claims fell from 678.75k to 655.75k, while continuing claims declined from 3.71mln to 3.68mln, boding well for the April BLS data.

  Business Surveys: The ISM surveys gave a mixed assessment of the labor market, with the Employment subindex falling 4.5 points in the manufacturing report, to 55.1, remaining in expansion for the fifth consecutive month; however, panelists continued to note significant difficulties in attracting and retaining labor at their companies’ and suppliers’ facilities. The employment sub-index in the services report saw a rise of 1.6 points to 58.8, the fourth straight month in expansion, and the highest level since September 2018. The services report also noted the competition for labor as more restaurants began easing restrictions and returning to normal levels of activity, and all levels of the business were increasing personnel.

  Challenger Job Cuts: Challenger reported that job cut announcements fell from 30,603 in March to 22,913 in April, the lowest monthly figure since June 2000, and -96.6% Y/Y. Challenger said that, so far this year, employers have announced plans to cut 167,599 jobs from their payrolls, down 84% from the 1,017,812 jobs eliminated through the same period last year. The report said that employers were no longer undergoing massive cuts, and consumers were beginning to feel safe traveling and spending, and the number of job openings is edging higher. However, the report also noted a labor shortage despite the millions of Americans remaining out of work. Challenger added that the ongoing impact of increased vaccinations and the American Rescue Plan will be reflected in the April job numbers, with a likely decline in both the unemployment rate and weekly initial jobless claims and an increase in job openings.

  Arguing for a better-than-expected report:

  • Reopening. Despite flattish case counts, US fatalities continued to trend down in the spring. And more importantly from the perspective of tomorrow’s report, the severity of business restrictions eased further between the March and April survey period. Reflecting this, restaurant seatings on OpenTable rebounded to -24% in April from -32% in March, albeit with a lull in the week following the payroll survey period.

  

  • Big Data. High-frequency data on the labor market generally indicate accelerating employment in April, with four of the six measures Goldman tracks indicating job gains of 1 mn or higher, and generally stronger gains among the more reliable datasets.

  

  • Employer surveys. The employment components of both our services (+3.8pt to 55.9) and manufacturing (+1.7pt to 59.9) survey trackers increased to the highest level since 2018.
  • Job availability. The Conference Board labor differential—the difference between nthe percent of respondents saying jobs are plentiful and those saying jobs are hard to get — surged to +24.7 in April (from +8.0 in March) and is now at 2018 levels.
  • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas fell by 22% in April after declining by 25% in March (mom, SA by GS). Layoffs were at the lowest level since 2000.
  • Jobless claims. Initial jobless claims declined during the April payroll month, averaging 656k per week vs. 752k in March. Across all employee programs including emergency benefits, continuing claims fell by 1.3mn between the payroll survey weeks.

  Neutral/mixed factors:

  • ADP. Private sector employment in the ADP report increased by 742k in April, below consensus expectations but above the pace in March. As usual, the ADP panel methodology likely undercounted workers returning to their previous employers, and this would argue for a larger gain in tomorrow’s report.

  Market Reaction: Observing the handful of data releases seen in the month of May, Rabobank’s analysts note that yields rose in wake of a weak ADP report, which might indicate a shift in the market reaction function that we have been accustomed to in recent months; now, weak data is providing a negative impulse for bonds, which Rabo says is a function of the market interpreting that the bad data implies centrist Democrat lawmakers would be less likely to try and water down President Biden’s stimulus plans (while resistance is more likely to rise if the data tone improves, which would reduce the need for any bumper fiscal spending). Rabo also notes that Eurodollar futures’ reaction supported the ‘bad news is bad news’ playbook, with the rationale being that, as the market assigns a greater probability to fiscal stimulus, it must therefore give a greater chance that the Fed will scale back its support too.

  Tyler Durden
  Thu, 05/06/2021 – 23:10

• Chinese Flights Through Taiwan's Air Defense Zone Have Doubled
  Chinese Flights Through Taiwan’s Air Defense Zone Have Doubled

  Authored by Dave DeCamp via AntiWar.com,

  According to numbers released by Taiwan’s Ministry of National Defense, Chinese military flights through Taiwan’s air defense identification zone (ADIZ) doubled in April compared to the previous two months, which coincides with increased US military activity in the region.

  While there is much hype surrounding these flights, the ADIZ is not Taiwanese air space, and the Chinese planes usually pass through the southwest corner of the ADIZ, far from the island of Taiwan. An ADIZ is an airspace where a country requires foreign aircraft to identify themselves. The ADIZ concept is not covered under any international treaties and has no international regulations.

  

  The US created the first ADIZs in the 1950s and established Taiwan’s ADIZ, as well as ones for Japan, South Korea, and the Philippines. Taiwan now claims an ADIZ that covers parts of mainland China, although the Defense Ministry does not publicize flights from China’s People’s Liberation Army on the Chinese sign of the median line, which separates the Taiwan Strait. China created an ADIZ in 2013 over the East China Sea, which the US has challenged with B-52 bombers.

  Taiwan’s Defense Ministry said there were 117 incidents of Chinese warplanes flying through Taiwan’s ADIZ in April, which more than doubled the totals from February and March. The previous high was in January, which saw 81 ADIZ sorties, which fell to 40 in February and 54 in March.

  Because the Chinese planes almost always fly through the southwest of the ADIZ, it’s likely they are going to or returning from drills in the South China Sea, where the US has significantly stepped its military presence in recent years. President Biden has stepped up provocations in the region even more. China said that since Biden came into office, operations had increased by more than 20 percent for US warships and 40 percent for military aircraft in waters claimed by Beijing.

  

  The US is also boosting diplomatic ties with Taiwan as part of its strategy to counter China. In April, the Biden administration announced a new policy to “encourage” contacts between US and Taiwanese officials.

  Last Friday, the top US and Taiwanese diplomats in France held a public lunch meeting, drawing sharp condemnation from Beijing.

  Tyler Durden
  Thu, 05/06/2021 – 22:50

• Iran Releases Video Threatening Strike On Israel's Dimona Nuclear Reactor
  Iran Releases Video Threatening Strike On Israel’s Dimona Nuclear Reactor

  Iranian state media has again put out a hugely provocative clip depicting an imagined attack on its foreign enemies, which is clearly intended as a threat and “warning”. On Wednesday we detailed that just days earlier a propaganda video set to Iranian patriotic music featured Iran’s military launching a missile on Washington D.C., which resulted in an imagined direct hit on the Capitol Building. The clip briefly showed shocking footage of the Capitol bursting into flames as the lyrics praised the “avengers” who will “liberate Jerusalem” and defeat the Islamic Republic’s enemies.

  And now on Thursday state-controlled Islamic Republic of Iran Broadcasting (or IRIB) has issued another similar video, this time depicting an aerial missile strike on Dimona nuclear reactor in southern Israel.

  New video from #Iran‘s IRIB threatening a strike on #Dimona nuclear reactor in #Israel ahead of #QudsDay. pic.twitter.com/QBooLSQwgx

  — Jason Brodsky (@JasonMBrodsky) May 6, 2021

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  The brief clip simulates the vantage point of a fighter jet or a drone hovering over what clearly appears to be the large Dimona facility, after which a missile is fired down upon it, but then the footage cuts to an hour glass, suggesting time is “running out” for Israel. 

  Interestingly, just weeks ago on April 22 (in the overnight hours) what was widely described as an “errant” Syrian missile (as Damascus defenses had been responding to an Israeli raid) had fallen close to the Dimona nuclear reactor facility. 

  “A Syrian missile exploded in southern Israel on Thursday, the Israeli military said, in an incident that triggered warning sirens near the secretive Dimona nuclear reactor and an Israeli strike in Syria,” Reuters had reported at the time. 

  The Shimon Peres Negev Nuclear Research Center, commonly referred to as the Dimona complex:

  

  The whole incident had been somewhat mysterious, given the length the missile traveled to within the general vicinity of one of Israel’s most secure and sensitive sites, leaving many to speculate that the “errant” surface missile fired from Syria was actually an intentional “message” to the Israelis. 

  Below is the IRGC propaganda clip which had been released this past weekend…

  In Broadcast Leading to Khamenei’s Speech, Iran TV Airs Nationalist Song Depicting Capitol Hill Being Destroyed by a Missile #Iran #JCPOA pic.twitter.com/1Z9onUPMPM

  — MEMRI (@MEMRIReports) May 5, 2021

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  Perhaps seizing on this capability of Iran or its regional allies to potentially hit an Israeli nuclear rector, which would cause untold severe damage to the whole surrounding area in southern Israel, Tehran appears to be putting Israel “on notice” over the latest string of Israeli covert sabotage incidents, most notably the April 11 Natanz attack which damaged Iranian centrifuges. 

  This latest clip was issued on the occasion of Quds Day, which is an Iranian Islamic holiday that specifically commemorates the expected “liberation of Jerusalem” and which falls every year on the last Friday of Ramadan.

  Tyler Durden
  Thu, 05/06/2021 – 22:30

• Slap On The Wrist: Honeywell Fined For Sharing F-35, Other Secrets To China
  Slap On The Wrist: Honeywell Fined For Sharing F-35, Other Secrets To China

  Via South Front,

  On May 5th, the US State Department announced that it had reached a $13 million settlement with defense contractor Honeywell.

  

  The settlement is over allegations it exported technical drawings of parts for the F-35 fighters and other weapons platforms to China, Taiwan, Canada and Ireland, according to the Bureau of Political-Military Affairs’ charging document.

  “Honeywell voluntarily disclosed to the Department the alleged violations that are resolved under this settlement.  Honeywell also acknowledged the serious nature of the alleged violations, cooperated with the Department’s review, and instituted a number of compliance program improvements during the course of the Department’s review.  For these reasons, the Department has determined that it is not appropriate to administratively debar Honeywell at this time.”

  The State Department alleged some of the transmissions harmed national security, which Honeywell acknowledges with the caveat that the technology involved “is commercially available throughout the world. No detailed manufacturing or engineering expertise was shared.”

  Overall, the materials pertained to the F-35 Joint Strike Fighter, the B-1B Lancer long-range strategic bomber, the F-22 fighter, the C-130 transport aircraft, the A-7H Corsair aircraft, the A-10 Warthog aircraft, the Apache Longbow helicopter, the M1A1 Abrams tank, the tactical Tomahawk missile; the F/A-18 Hornet fighter, and the F135, F414, T55 and CTS800 turboshaft engines.

  Honeywell would only pay its fine, essentially, and keep working for the US government, because it voluntarily admitted to violating national security.

  Between 2011 and 2015, Honeywell allegedly used a file-sharing platform to inappropriately transmit engineering prints showing layouts, dimensions and geometries for manufacturing castings and finished parts for multiple aircraft, military electronics and gas turbine engines. Its first disclosure of violations to the government came in 2015.

  “The U.S. Government reviewed copies of the 71 drawings and determined that exports to and retransfers in the PRC [People’s Republic of China] of drawings for certain parts and components for the engine platforms for the F-35 Joint Strike Fighter, B-1B Lancer Long-Range Strategic Bomber, and the F-22 Fighter Aircraft harmed U.S. national security,” the charging document read.

  In a statement, Honeywell said it has since taken steps to ensure there are no repeat incidents.

  “Under an agreement reached with the State Department to resolve these issues, Honeywell will pay a fine, engage an external compliance officer to oversee the Consent Agreement for a minimum of 18 months, and will conduct an external audit of our compliance program,” Honeywell’s statement on the matter reads in part.

  “Since Honeywell voluntarily self-reported these disclosures, we have taken several actions to ensure there are no repeat incidents. These actions included enhancing export security, investing in additional compliance personnel, and increasing compliance training.”

  Interesting enough, the US was concerned that the F-35 flying disaster’s secrets would be shared through Turkey’s purchase of an S-400 missile defense system.

  Turns out, a US corporation simply sold the secrets to China and others, simply for profit.

  But it is all well, since it apologized after the fact, reinforcing the notion that it is much simpler to ask for forgiveness than it is to ask for permission.

  Tyler Durden
  Thu, 05/06/2021 – 22:10

• South Carolina Follows Montana In Ending All Supplemental Unemployment Benefit Programs
  South Carolina Follows Montana In Ending All Supplemental Unemployment Benefit Programs

  It appears we were overly cynical when we said just an hour ago that we won’t be holding our breath to find out if any other state will join Montana in ending many unemployment benefits in response to the unprecedented worker shortage.

  Just moments after we published that post, perhaps emboldened by the daring example set by his republicans peers in Montana, South Carolina Governor Henry McMaster today became the second state to end the people’s addition to government handouts, and directed the S.C. Department of Employment and Workforce to terminate South Carolina’s participation in all federal, pandemic-related unemployment benefit programs, effective June 30, 2021.

  Governor McMaster directed the agency to take the action in a letter to DEW Executive Director Dan Ellzey.

  “South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived – both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors – now face an unprecedented labor shortage,” governor McMaster wrote.

  “This labor shortage is being created in large part by the supplemental unemployment payments that the federal government provides claimants on top of their state unemployment benefits. In many instances, these payments are greater than the worker’s previous pay checks. What was intended to be a short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace.”

  In a memo to Governor McMaster, Executive Director Ellzey outlined existing federal unemployment programs and what will change when the governor’s directive goes into effect on June 30.

  Those programs include the following:

  • Pandemic Unemployment Assistance (PUA)
  • Pandemic Emergency Unemployment Compensation (PEUC)
  • Federal Pandemic Unemployment Compensation (EPUC)
  • Mixed Earners Unemployment Compensation (MEUC)
  • Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations
  • Temporary Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week

  In conclusion, McMaster says that following termination of participation in these federal programs, DEW shall return to normal operation of the State’s unemployment insurance program, including enforcing the requirement that claimants demonstrate active efforts to seek employment in order to remain eligible for benefits.

  In response, Dan Ellzey wrote that “at the current time, there are 81,684 open positions in the state of South Carolina. The hotel and food service industries have employee shortages that threaten their sustainability. However, no area of the economy has been spared from the pain of a labor shortage.”

  The Director of the S.C. Department of Employment and Workforce Director continued: “While the federal funds supported our unemployed workers during the peak of COVID-19, we fully agree that reemployment is the best recovery plan for South Carolinians and the economic health of the state. Last week’s initial claims numbers were the lowest since the pandemic began, and employers around the state are eager to hire and anxious to get South Carolina back to business.”

  With 2 states down and 48 to go, or 49 – we are not sure if Washington D.C. is now officially part of the USSA – one can only hope that more states will follow in this example, although as with all things, we expect that the final breakdown will be by party lines with people in red states working and while people in blue state are paid to smoke pot and do nothing.

  McMaster’s full note below (pdf link):

  Tyler Durden
  Thu, 05/06/2021 – 21:50

• CNN Host Says People Who Don't Take The Vaccine Should Be Socially Ostracized By Friends & Family
  CNN Host Says People Who Don’t Take The Vaccine Should Be Socially Ostracized By Friends & Family

  Authored by Paul Joseph Watson via Summit News,

  CNN’s Michael Smerconish says that people who don’t take the vaccine should be socially ostracized and shunned by their friends and family.

  

  During a segment on his show, Smerconish discussed a suggestion made by prosecutor Michael Stern in a USA Today opinion piece about vaccination uptake.

  “We’ve gotta shun folks, we’ve gotta shun people into getting vaccinated,” said Smerconish, agreeing that businesses should make getting the vaccine mandatory as a condition of employment.

  However, he also asserted that family members and friends should socially ostracize those who choose not to take the vaccine.

  CNN’s ⁦@smerconish⁩ says it’s time for people to “shun” friends and family who aren’t vaxxed pic.twitter.com/OfzuDhTbTq

  — Jack Posobiec (@JackPosobiec) May 5, 2021

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  Continuing to quote Stern’s article, Smerconish stated, “People should require friends to be vaccinated to attend the barbeques and birthday parties they host – friends don’t let friends spread COVID.”

  Smerconish then proudly revealed the results of a poll on his website which found that 73% of respondents thought it was “time to shun.”

  “Doesn’t @Smerconish realise we absolutely want to be shunned by people like him and his viewers,” remarked Raheem Kassam.

  “That’s literally the dream.”

  “This isn’t going to end well,” commented Donald Trump Jr.

  Smerconish and his ilk are not encouraging others to shun “anti-vaxxers” because they care that much about incentivizing more people to take the vaccine (take up rates are already very high), they’re shaming them so as to legitimize the brutal discrimination that will be metered out later on down the line to those who don’t take it.

  Meanwhile, the ‘sane’ people who insist everyone must take the vaccine are walking around behaving like this…

  History will look back in awe. pic.twitter.com/jxx02xqe4l

  — Paul Joseph Watson (@PrisonPlanet) May 5, 2021

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  Tyler Durden
  Thu, 05/06/2021 – 21:30

• Air Force Aborts ICBM Test Flight Just Before Launch For Unknown Reasons
  Air Force Aborts ICBM Test Flight Just Before Launch For Unknown Reasons

  On Wednesday the US Air Force was moments away from a planned test of an unarmed nuclear Minuteman III intercontinental ballistic missile but aborted prior to launch, according to an official statement. 

  It was supposed to happen in the early morning hours at Vandenberg Air Force Base in California, but “experienced a ground abort prior to launch,” the Air Force Global Strike Command said. No further explanation was given as to why the test launch was shut down, other than the service indicating that the “cause of the ground abort is currently under investigation.”

  

  The news release did however note that ballistic missiles are only launched when “all safety parameters with the test range and missile are met,” according to the news release. The launch is expected to be rescheduled pending the results of the investigation. 

  As a report in The Hill highlights, a debate is currently raging on Capitol Hill and in the halls of the Pentagon over the near-future viability of the program. “The failed test comes as lawmakers debate whether to proceed with the program to replace the aging Minuteman III missiles or try to extend the life of the missiles,” The Hill writes.

  Currently some 400 three-state Minuteman III missiles form the critical land-based ‘last defense’ element in the US nuclear triad, and were first deployed in 1970 with an initial expected 10-year service life. But after undergoing multiple life extensions the Air Force has long argued for their complete replacement, but this would come at a hefty $1.2 trillion or more price tag.

  

  US Strategic Command chief Adm. Charles Richard, who oversees America’s nuclear arsenal, has been pushing for the Ground-based Strategic Deterrent (GBSD) program to immediately replace the ageing systems.

  “We simply cannot continue to indefinitely life-extend Cold War leftover systems,” Richard told Congress last month. “I do not see an operational reason to even attempt to do that.”

  Tyler Durden
  Thu, 05/06/2021 – 21:10

• Atlas Is Shrugging: Forget 'The Great Reset', Here Comes 'The Great Reject'
  Atlas Is Shrugging: Forget ‘The Great Reset’, Here Comes ‘The Great Reject’

  Authored by Mark Jeftovic via BombThrower.com,

  The Jackpot Chronicles Scenario #4: Atlas Shrugged

  

  Never mind The Great Reset. Here comes The Great Reject.

  It occurred to me that I never did finish the final instalment of last summer’s Jackpot Chronicles, wherein I posited four possible post-Covid scenarios.

  For a quick refresher, The Jackpot is concept I cribbed from William Gibson. It’s a term he uses across a few of his near-future cyberpunk novels that describes a series of rolling global catastrophes that set in sometime around 2016 (his stories span multiverses, and timelines, but the common theme is that somewhere around 2016, some kind of irrevocable glitch in the matrix occurred that put a permanent end to normalcy as it has been understood up until that point).

  If there was a Jackpot, whatever it was, it could arguably have happened at many points throughout the 20th century, or if we wanted to confine our speculation to the 21st century then, 9/11 or the GFC would do. Everything after that being symptomatic as opposed to causal.

  And then… 2020 and COVID hit. That’s when the fabric of time cleaves us into the before times and The Jackpot.

  

  The other post-pandemic scenarios from the rest of my Jackpot series were:

  1. Force Majeure: The wheels come off completely and the system comes unglued. Mad Max.

  2. Tin Foil Hat: It really is one Big Conspiracy and we’re into a New World Order.

  3. The Great Bifurcation: The middle class gets wiped out and we get a two-tier society

  I had thought the fourth scenario would be the one themed Deglobalization, and to a certain extent it still is. In the original outline I described that Deglobalization:

  “Is where multi-national corporations, so shaken from this Near Death Experience, realizing their error of betting the farm on just-in-time supply chains, labour cost arbitrage and having zero buffers, begin pulling manufacturing back home.

  The smart ones start building cushions and shock absorbers into their business logic, and they begin to eschew leverage after being on the wrong side of a series of cascading liquidity implosions. In other words, businesses begin to transition themselves into what I called “Transition Companies” as posited in the inaugural posting for [this blog]”.

  I also went on to say that I considered this one most desirable yet least likely. My view on this scenario has changed somewhat, and I also think that the staggering government ineptitude and duplicity at all levels in all jurisdictions (with few notable exceptions) has made our regeared “4th scenario” more likely given that it’s in progress. Mass demonstrations, mass exoduses, crypto-currencies are symptoms of a Great Reject, or as I’ve renamed this scenario “Atlas Shrugged“.

  The TL,DR of the novel, Atlas Shrugged is that once the institutional sclerosis of the ruling class was understood to be both incorrigible and irreversible, the only other option was a global opt-out. There was no Great Reset in Atlas Shrugged. They got The Great Reject instead.

  Under the Atlas Shrugged scenario, deglobalization is just one of numerous motivating factors, but it’s mainly an outcome of a larger dynamic where all non-ruling factions in society lose faith in the prevailing structure of Neoliberal Globalism (a.k.a “Mr. Global”). With Mr. Global’s viability in question, people begin to look for the exits.

  This begins to occur on two fronts. What Vilfredo Pareto called “the non-governing elites” begin to realize that the system which used to accommodate them, even rely on their tacit support, is now becoming hostile toward them. At the very least, the ruling elites are undermining their interests. This is part of the dynamic of Peter Turchin’s “elite overpopulation” that we looked at recently.

  The other front is the comparatively powerless underclass, which, in pace with Pareto’s Theory of Elite Cycles, lose their moorings and standing within the system they are expected to adhere to. The social contract no longer seems to be a matter of middle-class protections and living standards but instead becomes starkly authoritarian and one-sided. What is clear is that the existing institutions are now functioning to defend the position of the overclass, not to uphold the rights and liberties of the underclass.

  The culmination of multiple super-cycles (Pareto’s Elite Cycles, Turchin’s long term dynamics of sociopolitical instability, debt, a Fourth Turning, and a Maunder Minimum for good measure) combined with an accelerated onslaught of technological innovation: Internet, crypto-currencies …biotech? Nanotech? Micro nuke? Fusion? Quantum computing? We have all the necessary components for a complete breakdown of existing institutions and the total loss of legitimacy of the current governing elite class.

  So it goes in our Atlas Shrugged scenario. Various interests of many forms and myriad factions, from dissident states (like Florida), to decentralized and virtual companies, emergent DAO’s, all the way to individuals and cultural tribes all begin to experience these moments of clarity in their own way. From there they will act in their own rational self-interests and cooperate with others doing the same in order to navigate the breakdown of Mr. Global.

  In spite of this, Mr. Global’s prevailing policymakers and governance structures will frantically maneuver and spin narratives of fear and fantasy in order to keep the existing system on the rails.

  

  They walked back the second one, but not the first one.

  That is what The Great Reset really is: it’s an attempt at a zeitgeist-level rationalization that doubles-down on institutional failure on the part of the entire governance structure of Mr. Global, and gives them a new lease on life to remain in charge. Reimagined by the Davos crew, amplified by the mainstream media, lubricated by Big Tech.

  The antidote to all of this are crypto-currencies, smart contracts and decentralization.

  That antidote also brings significant upside regardless of which one of our four possible scenarios plays out.

  When I listen to people who are complete denial about crypto, I realize that there is a common thread in their objections (what made me think about all this today was listening to Michael Pento’s criticisms of Bitcoin on George Gammon’s Rebel Capitalist. Pento’s 2012 book on the inevitable bursting of the bond bubble is a must read. That book helped be form the basis on what I think is the funds flow that is actually putting a floor under crypto. I don’t begrudge Pento for not seeing it, because as I’ll explain, he’s looking at it through the wrong lens)

  

  We could go on for hours about how most of these people haven’t really delved into the technology or what it means, how their criticisms at the defects around Bitcoin apply even more accurately to US dollars (“backed by nothing”, “infinite supply”, “uses too much energy”, et al). But what they all have in common is that they all posit that whether Bitcoin and cryptos succeed or fail is premised on whether the existing establishment will permit it.

  What will the Fed do? What if the government bans it? Won’t the World Bank just create their own CBDC?

  This is completely inverted. They have it backwards. It’s not up to the existing system, because the existing system is over. That’s the part they don’t get.

  The existing system should be looking for its place in the new reality of network states, not pontificating how it will run the new landscape. The coming system will be multipolar in not just the geopolitical dimension, but across cyberspace and the network dimensions as well.

  Instead, the incumbent system is busy banning menthol cigarettes, imposing negative interest rates and undergoing mass conversion to a peculiar new religion called Wokeness.

  

  It won’t work, and it brings to mind a particularly vivid example I once heard about a balloon disaster that still makes me cringe when I think of it:

  A group of people were embarking on a balloon ride and as they were just a foot or two off the ground, the burner erupted into flames. The balloon pilot realized immediately what this meant and he leapt from the gondola which was still only a few feet off the ground.

  One or two of the passengers were quick witted enough to realize what this meant and followed him. This set off a feedback loop: as the fire expanded, its hot air forcing the balloon higher, combined with the weight reductions as the first few people bailed out, the situation very quickly escalated past a point of no return.

  The balloon had accelerated very rapidly to heights from which it was no longer possible to leap safely. The unfortunates who had hesitated and were trapped in a gondola being propelled higher by a fireball, to their inevitable doom.

  That’s what our entire situation feels like today. The balloon is still hanging a foot or so above the ground, the canopy is on fire, and the people who have figured out what this means are bailing out while they can and in doing so they are accelerating the ultimate burn-then-crash of the entire system.

  

  In Rand’s book they went to a hidden valley called “Galt’s Gulch” and used their skills and their resources to restore new communities while the old systems imploded. If this scenario plays out we’d be looking for people creating a decentralized, network of gulches. Seeking each other out who are pursuing this same goals, creating open protocols to to rebuild civil societies and autonomous communities built on the ageless principles of free markets, liberty and prosperity.

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  Tyler Durden
  Thu, 05/06/2021 – 20:50

• China Pollutes More Than US And All Developed Countries Combined: Report
  China Pollutes More Than US And All Developed Countries Combined: Report

  

  China’s 2019 greenhouse gas emissions exceeded those of the United States and the rest of the developed world combined, according to CNBC, citing a Thursday report by the Rhodium Group – a New York-based advisory group founded in 2003 by China expert Daniel H. Rosen.

  

  According to the study co-authored by a former Obama admin climate policy official, energy modelers and emissions experts (just go with it), China is now responsible for 27% of total global emissions – more than the combined total produced by the United States (11%), India (6.6%) and the 27 EU member nations together (6.4%).

  

  In 2019, China’s emissions not only eclipsed that of the US—the world’s second-largest emitter at 11% of the global total—but also, for the first time, surpassed the emissions of all developed countries combined (Figure 2). When added together, GHG emissions from all members of the Organization for Economic Cooperation and Development (OECD), as well as all 27 EU member states, reached 14,057 MMt CO₂e in 2019, about 36 MMt CO₂e short of China’s total. -Rhodium Group

  In short, Chinese President Xi Jinping stole Greta Thunberg’s childhood.

  

  That said, the Rhodium Group also gives China somewhat of a pass for their climate sins – noting that since it’s home to over 1.4 billion people, they’re not quite so evil per capita.

  To date, China’s size has meant that its per capita emissions have remained considerably lower than those in the developed world. In 2019, China’s per capita emissions reached 10.1 tons, nearly tripling over the past two decades (Figure 3). This comes in just below average levels across the OECD bloc (10.5 tons/capita) in 2019, but still significantly lower than the US, which has the highest per capita emissions in the world at 17.6 tons/capita. While final global data for 2020 is not yet available, we expect China’s per capita emissions exceeded the OECD average in 2020, as China’s net GHG emissions grew around 1.7% while emissions from almost all other nations declined sharply in the wake of the COVID-19 pandemic.

  …

  While China exceeded all developed countries combined in terms of annual emissions and came very close to matching per capita emissions in 2019, China’s history as a major emitter is relatively short compared to developed countries, many of which had more than a century head start. A large share of the CO₂ emitted into the atmosphere each year hangs around for hundreds of years. As a result, current global warming is the result of emissions from both the recent and more distant past. Since 1750, members of the OECD bloc have emitted four times more CO₂ on a cumulative basis than China (Figure 4). This overstates the relative role of OECD emissions in the more than 1 degree Celsius increase in global temperatures that has occurred since before the industrial revolution because a large share of annual CO₂ emissions is absorbed in the earth’s carbon cycle in the decades after release. But China still has a way to go before surpassing the OECD on a cumulative contribution basis.

  

  So of course, historically speaking, China has polluted far less – a point we’re still trying to understand.

  

  As CNBC notes, “The findings come after a climate summit President Joe Biden hosted last month, during which Chinese President Xi Jinping reiterated his pledge to make sure the nation’s emissions peak by 2030. He also repeated China’s commitment to reach net-zero emissions by midcentury and urged countries to work together to combat the climate crisis.”

  “We must be committed to multilateralism,” said Xi during brief remarks at the summit. “China looks forward to working with the international community, including the United States, to jointly advance global environmental governance.”

  Xi also said that it would ‘control its coal-fired generation projects and limit increases in coal consumption over the next five years.’

  As we noted on Tuesday, this means China needs to shutter 600 coal plants to meet its emissions goals of net zero greenhouse emissions by 2060. If they don’t meet that goal, we’re sure the virtuous masters of the universe will surely refuse to conduct further business with Beijing.

  Is China aware that Blackrock, Bridgewater and Goldman will never, ever invest in it unless it shuts 600 coal-fired plants to hit its climate target?

  Oh wait…

  — zerohedge (@zerohedge) May 3, 2021

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  Tyler Durden
  Thu, 05/06/2021 – 20:30

• Why Masks Are Still Mandatory
  Why Masks Are Still Mandatory

  Authored by Alex Hamilton via AmericanThinker.com,

  Joe Biden is in a pickle.  

  

  He wants to continue to convince Americans they should get the experimental biological agent (AKA “the vaccine”), but, as Tucker Carlson pointed out last week, the administration and the CDC have offered no explanation as to why you need to continue to wear a mask after you have taken “the vaccine.” 

  

   Why would they want us to doubt the efficacy of the vaccine?  Why would any sane person who is not in a high-risk group contemplate becoming a lab experiment subject if you are not allowed (yes, our rights are now derived from government and will be doled out based on compliance) to burn your mask and return to a pre-pandemic way of life?  

  That’s just bad salesmanship…until you think about the alternative.

  Think about what would happen if they allowed (there’s that word again) people not to wear masks after being vaccinated.  

  Here’s a typical scenario.  

  The vaccinated test subject enters the supermarket.  

  The vigilante mob of leftists can’t wait to accost and demand compliance to their edict, using physical violence if necessary.  

  The test subject then proclaims that he has put his mask in his pocket.  

  A short time later, the test subject hears the man claim the same immunity.

  In this fictional example, you can begin to see what the ramifications of this policy would be.  

  Within weeks, the majority of Americans would stop wearing masks.  

  (Along with social distancing, and lockdowns, and getting the vaccine).  

  People would actually begin to associate non-masking people with safety, while mask-wearing people would signal danger.  The danger of the unvaccinated.

  The government has just lost all control.  

  Do you really think these people will give up their newfound power so easily?  I’m afraid not.  

  I imagine that their Big Tech partners are working furiously building a mandatory vaccine passport system as you read this.  

  Until that is up and running, you can expect the regime to continue requiring all people to wear masks, especially those who have been “vaccinated.”

  Tyler Durden
  Thu, 05/06/2021 – 20:10

• Why Have Bond Yields Gone Nowhere In The Past Month Despite Blowout Macro Data: Here Is Goldman's Answer
  Why Have Bond Yields Gone Nowhere In The Past Month Despite Blowout Macro Data: Here Is Goldman’s Answer

  After a turbulent start to the year for the treasury market, which posted its worst quarterly total return since 1980 as 10y Treasury yields rose more than 80bp, leaving markets to consider just how much further yields might move once the expected economic acceleration went from forecast to fact, Treasuries have found themselves stuck in a very narrow range, gripped by an eerie calm even as the US economy continues to power ahead and is on pace for the strongest expansion in GDP since the record Q3 of last year.

  However, hile one can analyze CTA flows, extrapolate Japanese pension positioning and even speculate about stealth central bank intervention in seeking an answer for the recent bond market calm, there may be a far simpler reason why bond moves have fizzled out even as economic surprises continue coming hot and heavy: as Goldman’s William Marshall writes, yield sensitivity to data surprises tends to decline at higher levels of forecast uncertainty – a key feature of the macro environment since the onset of the pandemic. As a result, until there is some convergence in projections, “yield responses to data releases may remain muted by historical standards.”

  Let’s back up.

  As Marshall notes, after a torrid first three months of 2021, and despite a continuation of positive surprises across a range of significant releases last month – including payrolls, CPI, and retail sales – US yields finished the month lower on net, with yield responses to the data surprises ranging from muted to puzzling. A feature of data releases since the COVID shock has been and remains the high degree of forecast dispersion, which at this point likely reflects the range of views on both timing and magnitude of the acceleration.

  

  This week brings the first look at April data, with economists projecting even stronger job gains (consensus is now just around 1 million new jobs) Goldman takes a look at the likely responsiveness of US rates to data surprises in this environment.

  In tracking the evolution of data surprises, the standard approach is to normalize individual releases by some measure of historical forecast error. This approach helps in providing historical grounding for the magnitude of a given surprise. However, in periods where data is somewhat more volatile than normal — such as at present —using realized forecast errors may significantly under-represent the degree of uncertainty around individual releases. For markets, identifying the level of perceived noise around economic data is useful in gauging how much of a signal a given data point can provide. To this end, using forecast dispersion to normalize data surprises(rather than historical forecast errors) may provide a better picture of the information content in a particular release for markets by directly capturing the level of uncertainty surrounding the print. In general, both approaches (the more standard normalization by historical errors or normalizing each surprise by Bloomberg forecast standard deviation) produce highly correlated results until 2020; however, the last year or so and to a lesser extent the period around the GFC stand out as notable exceptions as shown in the chart below.

  

  Intuitively this makes sense: if the underlying data volatility is orders of magnitude higher than some “calm” baseline, the information value of every outlier print is reduced exponentially as the very next month we may see a sharp reversal.

  To gauge how markets respond to data surprises in different forecast uncertainty regimes, Goldman regressed daily yield changes on daily surprise scores, splitting the sample into regimes of forecast dispersion using the series shown in Chart 1. Pre-COVID (2000-2019) evidence suggests that when forecast dispersion is relatively high, the beta of yields to data surprises normalized by historical forecast errors is somewhat lower than in periods where forecast dispersion is low.

  

  Meanwhile, the relationship between yield sensitivity to surprises and the level of forecast uncertainty is less apparent when scaling surprises by forecast dispersion. An interpretation of this initial observation is that periods of higher forecast uncertainty tend to be associated with lower sensitivity of yields to data by historical standards. Expanding the sample to include the last year firmly reinforces this pattern.

  

  So what does this mean? Here is some more analysis from Goldman guaranteed to make your brian bleed as it tries to put in scientific terms what is ultimately a very simple concept:

  There is a clearer negative relationship between forecast uncertainty yield sensitivity to data surprises normalized by historical standard errors, particularly when forecast dispersion is in the top decile. Normalizing by forecast standard deviation, meanwhile, generates somewhat more stable sensitivities across forecast dispersion regimes, suggesting that the impact of a given data surprise on yields is more reliably informed by the level of uncertainty around any given release — what may be a market-movingsurprise in the context of low levels of dispersion among forecasters is little more than noise when said dispersion is high.

  Got all that – it certainly is a smarter way to say that data no longer matters…

  Anyway, the simple implication of all this is that for now – until the data volatility returns to normal –  it’s likely that yield sensitivity to data will be muted by historical standards, owing to the wide range of expectations (e.g., the standard deviations of forecasts for April non-farm payrolls is more than 3x its historical average).

  That is not to say that data won’t matter — US rates rallied on the back of the softer than expected ISM manufacturing earlier this week, and in the accumulation of better than consensus data will take yields higher into mid-year (and vice versa). However, it likely means that more historically “normal” yield responses to data will require some amount of convergence among forecasters, instead of the prevailing “throw a dart at the wall” chaos.

  It’s reasonable to expect that convergence to occur later this year, though that may take place in the context of less volatility in the data itself. In other words, don’t be surprised if we get an absolute blowout beat (or miss) tomorrow, and the 10Y does… nothing.

  Tyler Durden
  Thu, 05/06/2021 – 19:50

• Gen Z Is Anything But Politically Ill-Informed
  Gen Z Is Anything But Politically Ill-Informed

  Authored by Samuel J. Abrams via RealClearPublicAffairs,

  I have had the privilege of teaching politics and history to college students for well over a decade, and I noticed a significant change among my students in the past few years: their interest in politics and political engagement is far greater than when I began. My first group of students were Millennials, and while some were deeply interested in politics and the socio-historical world, this was the exception, not the norm. Today, my Gen Z students are deeply passionate about political change and not politically dogmatic. The 2020 election revealed their significant level of turnout, potentially setting the stage for a more vibrant polity going forward.

  

  Despite high voter turnout, countless reports bemoan political ignorance and a lack of historical understanding among younger generations. Many observers lament the loss of civics education in schools and the rise of social media and celebrity politics, leading to questions about the civic capacity of younger Americans. Thanks to a national survey commissioned in 2019 by the American Council of Trustees and Alumni (ACTA) and NORC at the University of Chicago, we now know better. Gen Zers are not far out of line with older generations in terms of their political and civic literacy. In fact, the data shows that my impressions are correct: Gen Zers possess greater levels of civic knowledge than Millennials, who are the least politically literate generation today.

  The survey presented 15 questions on political history and civics, asking the identity of the current the Chief Justice of the U.S. Supreme Court to noting the historical fact that the 13th Amendment ended slavery, not Lincoln’s Emancipation Proclamation. Overall, 75 percent of the respondents correctly answered 10 of 15 items, although the average number of correct responses was 8, a bit over half.

  When the data is broken down by generation, Gen Z is not an outlier. Members of the Silent Generation are the most knowledgeable, with an average of 8.8 correct answers, while Millennials are the least knowledgeable at only 6.7 correct answers on average. Gen Z is comparable to Gen X at around 7.5 correct answers, marginally lower than the national average.

  Digging deeper, there were cases where Gen Z was notably better compared to their grandparents. Consider the question of what Harriet Tubman was best known for. Respondents were given a selection of choices, including serving as a Civil War medic, organizing marches on Washington and various boycotts, and guiding slaves through the Underground Railroad, the correct answer. Tubman undertook at least 13 missions that rescued over 70 enslaved people via the Underground Railroad. In aggregate, 78 percent of the population knew this fact; 77 percent of Gen Zers knew this, compared to 65 percent of Silents.

  When asked about what government action guaranteed women the right to vote, Gen Zers were not off the average. Fourty-five percent of the overall sample selected the correct answer of the 19th Amendment, though a sizable portion of Americans – 30 percent – believed this right was guaranteed by the Equal Rights Amendment, an idea that has been around for almost a century but has never been adopted by Congress. Nevertheless, 47 percent of those in the Silent Generation and 49 percent of Boomers answered this question correctly. Fifty-four percent of Gen Zers answered this correctly, compared to just 41 percent of Millennials. Clearly, the youngest cohort is more aware of voting rights than both their grandparents and their immediately preceding cohort.

  Of course, there are examples where Gen Z could benefit from a deeper understanding of history. For instance, one question covered who the architect of the New Deal was; overall responses were split. Fifty-five percent of the total sample replied Franklin D. Roosevelt – the correct choice – but the next greatest percentage picked Alexandria Ocasio-Cortez at 18 percent. Seventy percent of the Silent Generation knew the answer was FDR, and just 11 percent answered AOC. In contrast, only 43 percent of Millennials answered FDR with 22 percent thinking that the correct answer was AOC. Gen Z was notably better, with 60 percent correctly answering FDR and just 12 percent choosing AOC. While AOC has been talking about a Green New Deal, younger Americans should certainly know that her ideas were cribbed from the FDR-initiated New Deal.

  In short, the data supports what I saw in my classroom and seminars: Gen Zers are indeed more politically knowledgeable than older Millennials. While the overall level of political and historical knowledge in the nation should be better, Gen Z does not lag far behind older cohorts. Our various institutions – schools, families, and community organizations – should do more to improve civic literacy. It would be a mistake to assume that Gen Z is simply ignorant of politics and history; Millennials are far more disconnected. Politicos and parties would be wise to cultivate this youngest generational cohort and not speak past them, as they are already aware of American history and how our republic functions.  

  Samuel J. Abrams is professor of politics at Sarah Lawrence College and a visiting scholar at the American Enterprise Institute.

  Tyler Durden
  Thu, 05/06/2021 – 19:30

• Montana Is First State To Cancel Unemployment Benefits In Response To Unprecedented Worker Shortage
  Montana Is First State To Cancel Unemployment Benefits In Response To Unprecedented Worker Shortage

  Three weeks ago, when looking at the unprecedented labor shortage that is crippling the US economy (even with some 100 million Americans not in the labor force)…

  

  …we said that there is a simple reason for this paradoxical phenomenon: trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, but to sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world’s greatest “under the radar” experiment in Universal Basic Income.

  Consider the following striking anecdotes from Bloomberg:

  • Early in the Covid-19 pandemic, Melissa Anderson laid off all three full-time employees of her jewelry-making company, Silver Chest Creations in Burkesville, Ky. She tried to rehire one of them in September and another in January as business recovered, but they refused to come back, she says. “They’re not looking for work.”
  • Sierra Pacific Industries, which manufactures doors, windows, and millwork, is so desperate to fill openings that it’s offering hiring bonuses of up to $1,500 at its factories in California, Washington, and Wisconsin. In rural Northern California, the Red Bluff Job Training Center is trying to lure young people with extra-large pizzas in the hope that some who stop by can be persuaded to fill out a job application. “We’re trying to get inside their head and help them find employment. Businesses would be so eager to train them,” says Kathy Garcia, the business services and marketing manager. “There are absolutely no job seekers.”

  Even more amazing: a stunning 91% of small businesses surveyed by the NFIB said they had few or no qualified applicants for job openings in the past three months, tied for the third highest since that question was added to the NFIB survey in 1993.

  But what is most striking is the context on these figures: recall that just one year ago, the unemployment rate was a depression-era 14.8%. And while it has since dropped to 6%, it remains well above the 3.5% rate of February 2020, before the pandemic. So judging from the jobless rate – which the Federal Reserve tracks closely – there’s still plenty of slack in the labor market.

  Only… if one goes by the complete lack of workers, there isn’t.

  This was confirmed by the results of the latest, April, NFIB Small Business survey, which found that a record 42% of companies reported job openings that could not be filled.

  

  The key quote from NFIB Chief Economist Bill Dunkelberg was “Main Street is doing better as state and local restrictions are eased, but finding qualified labour is a critical issue for small businesses nationwide.” And the explicit admission that BIden’s “trillions” in stimulus are behind this predicament:

  “Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force.”

  As if it wasn’t clear, the NFIB added that “finding eligible workers to fill open positions will become increasingly difficult for small business owners.”

  Seven percent of owners cited labor costs as their top business problem and 24% said that labor quality was their top business problem. Finding eligible workers to fill open positions will become increasingly difficult for small business owners.

  Illinois-based Portillo’s Hot Dogs LLC boosted hourly wages in markets including Arizona, Michigan and Florida, and is offering $250 hiring bonuses. The chain has hired social-media influencers and built a van called the “beef bus” to help recruit. Still, many of the chain’s 63 restaurants remain understaffed, said Jodi Roeske, Portillo’s vice president of talent.

  “We are absolutely struggling to get people to even show up for interviews,” Ms. Roeske said.

  To be sure, it’s not just entry level places that can’t find workers: full-service and high-end restaurants like Wolfgang Puck’s Spago Beverly Hills, where servers can earn $100,000 a year with tips, also are struggling to recruit workers. Puck said in an interview with the WSJ that expanded unemployment benefits and new options like personal chef gigs are contributing to staffing shortages at Spago and his other restaurants.

  “I don’t think we should pay people to stay home and not work if there are jobs available,” he said.

  Summarizing the data, Rabobank’s Michael Every wrote that Biden’s generous unemployment benefits are “ironically helping to push up wages, at least temporarily – which I am sure nobody intended, but underlines just how radical policy has to get in the US to make it happen.” His conclusion: ”the problem is that small businesses trying to get past Covid are least well placed to lead this socio-economic charge; and if this points to a wage-price spiral –which is still unlikely– then the bond market will soon be pointing its finger at the Fed.”

  Well if it is unemployment benefits that is causing the labor shortage why not do away with said benefits?

  Of course, that is far easier said than done: once Americans are used to collecting money for doing nothing, they would be extremely displeased – to put it mildly – once the money is gone. This is not lost on politicians who know that they would be the immediate target of popular ire.

  And yet, one state is taking the much needed, if extremely unpopular step, of breaking this addition to stimmy handouts which has also led to this historic labor shortage.

  According to Yahoo, Montana plans to stop some of its federally-funded unemployment benefits to address “the state’s severe workforce shortage,” according to its labor department, which will leave many out-of-work residents without any support at all.

  “Nearly every sector in our economy faces a labor shortage,” Governor Greg Gianforte, a Republican, said in a statement on Tuesday, echoing what we said last month, namely that “The vast expansion of federal unemployment benefits is now doing more harm than good.”

  Instead, the state will do the correct thing and begin offering return-to-work bonuses to help employers looking to hire.

  Starting June 27, Montanans will lose access to the extra $300 in weekly unemployment benefits, but maintain their regular benefits. Contractors, gig workers, and others will also lose access to the Pandemic Unemployment Assistance (PUA) program, meaning those workers won’t get any benefits.

  

  Those relying on the DOL’s Pandemic Emergency Unemployment Compensation (PEUC) program, which gives additional weeks of unemployment benefits to workers, will stop receiving benefits. The state also plans to reinstate the requirement that stipulates workers must be actively searching for a job to qualify for unemployment benefits.

  Predictably, the decision sparked howls of outrage from those already habituated to Biden’s Universal Basic Income regime:

  “Montana’s move to end these fully federally-funded UI programs, along with their COVID-19 exceptions, is cruel, ill-informed, and disproportionately harms Black and Indigenous People of Color and women,” Alexa Tapia, unemployment insurance campaign coordinator at the National Employment Law Project, told Yahoo Money, basically slamming the decision as both racist and sexist. “Ending these programs would leave 22,459 people unable to support their families and hurt thousands more.”

  Alternatively, those 22,459 people can find a job.

  Montana’s unemployment rate was 3.8% in March, down from its 11.9% pandemic peak in April 2020, according to data by the Labor Department.

  The federally-funded unemployment programs run through September 6 nationwide. Montana’s cancellation would cost workers at least $3,000 per worker in supplement benefits if they couldn’t find work through the program expiration. Workers on PUA and PEUC would lose at least $4,500 in benefits because they no longer will be eligible for the base unemployment benefit.

  Liberal economists were also outrage, claiming that Universal Basic Income is a wonderful creation (it hasn’t worked out that great in any socialist nation where it has become a staple of social welfare, but whatever), with studies from such liberal bastions as the National Bureau of Economic Research all the way to Yale University claiming that the extra $600 in benefits distributed earlier in the pandemic had limited labor supply effects and likely didn’t disincentivize work. (narrator: they disincentivize work, just see Wolfgang Puck’s quote above).

  “The 100% federally-paid unemployment benefits have boosted spending and contributed to the strong economic recovery,” Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. “It’s shortsighted for the state to sacrifice that economic stimulus based on the anecdotal labor shortages concerns of a few employers, especially given the limited evidence of work disincentives from unemployment pay during the pandemic.”

  What he forgot to mention is that the artificial spending created by stimulus has led to soaring prices and out of control “transitory” inflation, which will lower the standard of living for everyone, not just those on the government’s dole, but again anything that goes contrary to the liberal mantra of “bigger government is always better” is anathema and must be crushed immediately.

  So far, Montana is the first and only state to fully opt out of the federal unemployment benefit programs enacted in the pandemic and currently extended by the American Rescue Plan signed into law in March. As a way to incentivize workers to return to work, the state is offering a one-time return-to-work payment of $1,200, using money from the American Rescue Plan to fund the program. Only those who complete four weeks of work would receive the payment.

  “Incentives matter,” Gianforte said. “Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work.”

  One can only hope that more states follow Gianforte’s extremely unpopular, if extremely prudent decision, before the US is mired in 1970s style hyperinflation.

  

  We won’t be holding our breath.

  Tyler Durden
  Thu, 05/06/2021 – 19:10

• Voting With Your Feet
  Voting With Your Feet

  Authored by Walter Block via InternationalMan.com,

  Voting with your feet is a crucially important indicator of what is really going on, regarding the political economy. No, this does not refer to taking off your shoes and socks, entering the polling booth, pressing a button with your big toe instead of your thumb or index finger.

  Rather, it denotes migration patterns as the best way to determine human welfare.

  

  The island government 90 miles off the Florida shore can brag all it wants about its health care and educational systems that have “made Cuba great.” But massive numbers of people have rejected that sorry system as demonstrated by their migration away from it, often at great bodily risk, to enter our country. Yes, there might have been a Bernie fan or two who moved in the opposite direction (Senator Sanders spent his honeymoon not in Russia, but in the USSR), but these are the exceptions that prove the rule.

  Were there any Jews attempting to enter Nazi Germany? Who knows; again, maybe one or two. But the virtual one-way traffic was in the very opposite direct. Ditto for the Berlin wall. In which way was the immense movement there? To ask this question is to answer it.

  The U.S is a racist country that grinds down blacks? Then we ought to see large numbers of African Americans attempting to leave for greener pastures elsewhere, and observe very few people from sub Saharan Africa headed in the U.S. direction. But this does not occur. Indeed, the very opposite takes place. There is no better refutation to the claims of the Black Lives Matter Marxist movement. All the statistics about African American unemployment rates falling and a poverty rate of intact black families falling to single digits (before Covid) pales into insignificance compared to the primordial fact of migration patterns. Or, rather, lack of same.

  What is the reaction of the governments from which migrants are fleeing? Some act responsibly, morally, justly: they do not try to shoot or incarcerate emigrants as they depart. Mexico is certainly an example of this, and ought to be congratulated for such civilized behavior. Similar accolades must be awarded to Namibia, Botswana, Zimbabwe (formally Rhodesia) and Mozambique. They did not violently prevent their residents from entering even apartheid South Africa.

  But others act in the opposite direction, and reveal themselves to be in effect, gigantic jail cells. The cases in point are too numerous to mention, but the following are certainly examples:

  • All too many Cubans have resorted to making the passage to Florida on rafts supported by inner tube tires and were shot at or arrested by authorities of that nation.

  • East and West Germany and the infamous Berlin Wall; in which direction were the feet voters headed!!!

  • The traffic in the Korean peninsula eight decades ago, and even in the modern era, was from North to South, not in the opposite direction

  • Recent headlines blare: “Hong Kong Residents Formally Arrested.” Their “crime?” They were caught attempting to escape to Taiwan. So much for the “One Country, Two Systems” agreed upon in a treaty signed by both countries when Brittain in 1997 turned this island community over to the tender mercies of the People’s Republic of China. So far, no Uighurs have been imprisoned for fleeing, but it does not take too much imagination to suppose that if they had a prayer of succeeding in such a venture, they would also dearly love to do so.

  Let us close with a U.S. example. In the 1930s, there was a strong pattern of African Americans leaving Alabama, Mississippi, and other Jim Crow southern states for Detroit, Philadelphia, Chicago, and other more receptive environs. Did the donor states attempt to in any way prevent this migration pattern? No. So they also garner honor roll mention in the litany of political jurisdictions that have eschewed the title of vast penitentiaries.

  *  *  *

  The political and economic climate is constantly changing… and not always for the better. Obtaining the political diversification benefits of a second passport is crucial to ensuring you won’t fall victim to a desperate government. That’s why Doug Casey and his team just released a new complementary report, “The Easiest Way to a Second Passport.” It contains all the details about one of the easiest countries to obtain a second passport from. Click here to download it now.

  Tyler Durden
  Thu, 05/06/2021 – 18:50

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• Where The EU Exports Its Waste
  Where The EU Exports Its Waste

  The European Union exported 32.7 million tonnes of waste in 2020, according to Eurostat, a 75 percent increase since 2004.

  

  As Statista’s Niall McCarthy points out, Turkey was the primary destination country for EU waste last year with some 13.7 million tonnes sent there – three times as much as in 2004.

  

  You will find more infographics at Statista

  India received the second highest quantity of EU waste last year with some 2.9 million tonnes.

  It was followed by two European countries – the UK and Switzerland – with 1.8 and 1.6 million tonnes, respectively.

  Eurostat reported that the volume of waste being sent from the EU to China has fallen noticeably in recent years, declining from a peak of 10.1 million tonnes in 2009 to 0.6 million tonnes in 2020.

  Tyler Durden
  Thu, 05/06/2021 – 02:45

• Russia Is Prepared To Disconnect From SWIFT Payment System: Foreign Ministry
  Russia Is Prepared To Disconnect From SWIFT Payment System: Foreign Ministry

  Via South Front,

  Russia is preparing to depart from the international payment system SWIFT, Maria Zakharova, Russia’s Defense Ministry spokeswoman said, in an interview with RT.

  

  According to her, disconnecting from SWIFT was “hypothetical” currently, but not at all impossible.

  “The possibility of being disconnected from SWIFT is still considered as hypothetical. Nevertheless, inter-minsistry work is underway to minimize the risks and economic damage if our country’s access to the usual international financial instruments and payment mechanisms is limited. The Financial Messaging System of the Bank of Russia is an example of such alternative instruments. At the moment, options for its pairing with foreign counterparts – European SEPA, Iranian SEPAM, Chinese CUP and CIPS, are being discussed,” she said.

  Zakharova pointed out that cooperation between the Russian payment system “MIR” and foreign counterparts, in particular, the Chinese UnionPay, the Japanese JCB and the international Maestro are developing.

  These payments providers operate both in Russia and abroad. However, it is too early to talk about the specific timing for the completion of a comprehensive national toolkit for payment transactions and its promotion to international markets, as this is a lengthy and time-consuming process.

  “In parallel, Russia is actively exploring the opportunities provided by modern digital technologies, the potential of their use to increase the stability and independence of the national financial system and means of payment, with the clear understanding that digital money can in the future become the foundation of the updated international financial system and cross-border settlement operations,” the Russian Foreign Ministry spokeswoman concluded.

  “Similar co-branding cards work both in Russia and abroad. In particular, various operations on them are already available in Armenia, Abkhazia, South Ossetia, Belarus, Kazakhstan, Kyrgyzstan, Uzbekistan, Turkey,” she said.

  According to her, this is a rather long-term and time-consuming process. Zakharova noted that “it is too early to talk about any specific terms in terms of completing the creation of a comprehensive national toolkit in the implementation of payment transactions and its promotion to international markets.”

  Andrei Krutskikh, Director of the Department of International Information Security of the Russian Foreign Ministry, said that the Russian side is ready to respond if it is disconnected from the international payment system SWIFT.

  Russia has been attempting to push its Mir payment system since 2019, with Russian lawmakers backing the international use of a Russian alternative system for the global financial messaging network SWIFT designed by Moscow to eliminate the risk of Western sanctions.

  Back then, Russia held talks with China, India, Iran and Turkey about joint use of Russia’s financial messaging system, said Anatoly Aksakov, who heads the Russian Banking Association and a financial committee with the lower house of parliament.

  “As the system has proved to be viable and efficient, it draws interest from both Russian and foreign players, it is proposed to give any legal entities, Russian and foreign, the possibility to use it,” Aksakov said.

  This is becoming increasingly likely, as the sanctions the US, and also the EU pushes on Russia and China are making the two countries move ever closer.

  Most recently, China’s foreign ministry said that US sanctions on Russia amounted to bullying at this point.

  “US announced new sanctions on Russia. Wanton use or threat of use of unilateral sanctions in international relations is nothing but power politics&bullying,” China’s Foreign Ministry spokeswoman Hua Chunying said on Twitter.

  She added: “China firmly rejects such behavior.”

  Tyler Durden
  Thu, 05/06/2021 – 02:00

• China "Indefinitely" Suspends Economic Dialogue With Australia As Relations Continue To Deteriorate
  China “Indefinitely” Suspends Economic Dialogue With Australia As Relations Continue To Deteriorate

  China on Thursday announced the “indefinite” suspension of all activity under a China-Australia Strategic Economic Dialogue amid strained relations between the two countries, its state economic planner said on Thursday.

  

  The news caused the Aussie Dollar to fall sharply, dropping as low as 0.7701 vs the US dollar vs. Wednesday’s $0.7747.

  

  “Recently, some Australian Commonwealth Government officials launched a series of measures to disrupt the normal exchanges and cooperation between China and Australia out of Cold War mindset and ideological discrimination,” said China’s National Development and Reform Commission (NDRC) regarding the decision.

  According to CNBC, trouble in paradise began in 2018 when Australia became the first country to publicly ban Chinese tech giant Huawei from its 5G network – citing national security grounds over companies that were “likely to be subject to extrajudicial directions from a foreign government.” The move followed similar action by the Trump administration over espionage concerns.

  Under Chinese law, companies must cooperate with intelligence services, according to the BBC.

  Relations were further strained in 2018 after Australia officially called for an independent investigation into the origin of the COVID-19, resulting in an ongoing spat which included Beijing targeting exports, and Australia canceling two deals struck between the state of Victoria and China on its Belt and Road Initiative, causing the Chinese embassy to issue a warning over bilateral ties.

  More recently, China accused Australia of giving a “free pass” to terror-sympathizers over accusations that Aussie politicians are backing Uighur activists and providing external support to Muslim fundamentalists in Xinjiang – which came just weeks after a senior Australian official warned that the “drums of war” are “beating” as relations continue to sour.

  “In a world of perpetual tension and dread, the drums of war beat — sometimes faintly and distantly, and at other times more loudly and ever closer,” said Australia’s Department of Home Affairs Secretary Mike Pezzullo in comments that were made public late last month.

  “Today, as free nations again hear the beating drums and watch worryingly the militarization of issues that we had, until recent years, thought unlikely to be catalysts for war, let us continue to search unceasingly for the chance for peace while bracing again, yet again, for the curse of war,” he said.

  

  As we noted at the time, While Pezzullo didn’t mention China in the remarks that were published, it’s clear he was referencing tensions with Beijing in the Indo-Pacific. Australia has followed the US in its military provocations against China and is a member of the Quad, a group that is seen as a possible foundation for an anti-China NATO-style alliance in Asia.

  Days earlier, Australia’s defense minister said the possibility of a war erupting over Taiwan should not be “discounted” and warned of regional tensions. “People need to be realistic about the activity,” Defense Minister Peter Dutton said. “There is militarization of bases across the region. Obviously, there is a significant amount of activity and there is an animosity between Taiwan and China.”

  Beijing responded to Dutton’s comments on Monday. Chinese Foreign Ministry spokesman Wang Wenbin said China hoped Australia would “fully recognize the high sensitivity of the Taiwan issue” and refrain from “sending any false signals to the separatist forces of ‘Taiwan independence.'”

  The last meeting under the China-Australia Strategic Economic Dialogue was in 2017.

  Tyler Durden
  Thu, 05/06/2021 – 01:00

• Aldous Huxley Foresaw Our Despots – Fauci, Gates, & The Vaccine Crusaders
  Aldous Huxley Foresaw Our Despots – Fauci, Gates, & The Vaccine Crusaders

  Authored by Patricia McCarthy via AmericanThinker.com,

  In 1949, sometime after the publication of George Orwell’s Nineteen Eighty-Four, Aldous Huxley, the author of Brave New World (1931), who was then living in California, wrote to Orwell.  Huxley had briefly taught French to Orwell as a student in high school at Eton.

  Huxley generally praises Orwell’s novel, which to many seemed very similar to Brave New World in its dystopian view of a possible future.  Huxley politely voices his opinion that his own version of what might come to pass would be truer than Orwell’s.  Huxley observed that the philosophy of the ruling minority in Nineteen Eighty-Four is sadism, whereas his own version is more likely, that controlling an ignorant and unsuspecting public would be less arduous, less wasteful by other means.  Huxley’s masses are seduced by a mind-numbing drug, Orwell’s with sadism and fear. 

  The most powerful quote In Huxley’s letter to Orwell is this: 

  Within the next generation I believe that the world’s rulers will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging and kicking them into obedience.

  
  Aldous Huxley.

  Could Huxley have more prescient?  What do we see around us?  

  Masses of people dependent upon drugs, legal and illegal.  The majority of advertisements that air on television seem to be for prescription drugs, some of them miraculous but most of them unnecessary.  Then comes COVID, a quite possibly weaponized virus from the Fauci-funded-with-taxpayer-dollars lab in Wuhan, China.  The powers that be tragically deferred to the malevolent Fauci who had long been hoping for just such an opportunity.  Suddenly, there was an opportunity to test the mRNA vaccines that had been in the works for nearly twenty years.  They could be authorized as an emergency measure but were still highly experimental.  These jabs are not really vaccines at all, but a form of gene therapy.  There are potential disastrous consequences down the road.  Government experiments on the public are nothing new.

  Since there have been no actual, long-term trials, no one who contributed to this massive drug experiment knows what the long-term consequences might be.  There have been countless adverse injuries and deaths already for which the government-funded vaccine producers will suffer no liability.  With each passing day, new side-effects have begun to appear: blood clots, seizures, heart failure.

  As new adverse reactions become known despite the censorship employed by most media outlets, the more the Biden administration is pushing the vaccine, urging private corporations to make it mandatory for all employees.  Colleges are making them mandatory for all students returning to campus.

  The leftmedia are advocating the “shunning” of the unvaccinated.  The self-appointed virtue-signaling Democrats are furious at anyone and everyone who declines the jab.  Why?  If they are protected, why do they care?  That is the question.  Same goes for the ridiculous mask requirements.  They protect no one but for those in operating rooms with their insides exposed, yet even the vaccinated are supposed to wear them!

  Months ago, herd immunity was near.  Now Fauci and the CDC say it will never be achieved?  Now the Pfizer shot will necessitate yearly booster shots.  Pfizer expects to make $21B this year from its COVID vaccine!  Anyone who thinks this isn’t about money is a fool.  It is all about money, which is why Fauci, Gates, et al. were so determined to convince the public that HCQ and ivermectin, both of which are effective, prophylactically and as treatment, were not only useless, but dangerous.  Both of those drugs are tried, true, and inexpensive.  Many of those thousands of N.Y. nursing home fatalities might have been prevented with the use of one or both of those drugs.  Those deaths are on the hands of Cuomo and his like-minded tyrants drunk on power.

  Months ago, Fauci, et al. agreed that children were at little or no risk of getting COVID, of transmitting it, least of all dying from it.  Now Fauci is demanding that all teens be vaccinated by the end of the year!  Why?  They are no more in danger of contracting it now than they were a year ago.  Why are parents around this country not standing up to prevent their kids from being guinea pigs in this monstrous medical experiment?  And now they are “experimenting” on infants.  Needless to say, some have died.  There is no reason on Earth for teens, children, and infants to be vaccinated.  Not one. 

  Huxley also wrote this:

  “The surest way to work up a crusade in favor of some good cause is to promise people they will have a chance of maltreating someone.  To be able to destroy with good conscience, to be able to behave badly and call your bad behavior ‘righteous indignation’ — this is the height of psychological luxury, the most delicious of moral treats.” 

  – Crome Yellow

  Perhaps this explains the left’s hysterical impulse to force these untested shots on those of us who have made the decision to go without it.  If they’ve decided that it is the thing to do, then all of us must submit to their whims.  If we decide otherwise, it gives them the righteous right to smear all of us whom they already deplore.

  As C.J. Hopkins has written, the left means to criminalize dissent.  Those of us who are vaccine-resistant are soon to be outcasts, deprived of jobs and entry into everyday businesses.  This kind of discrimination should remind everyone of …oh, Germany three quarters of a century ago.  Huxley also wrote, “The propagandist’s purpose is to make one set of people forget that certain other sets of people are human.”  That is precisely what the left is up to, what BLM is planning, what Critical Race Theory is all about. 

  Tal Zaks, Moderna’s chief medical officer, said these new vaccines are “hacking the software of life.”  Vaccine-promoters claim he never said this, but he did.  Bill Gates called the vaccines “an operating system” to the horror of those promoting it, a Kinsley gaffe.  Whether it is or isn’t hardly matters at this point, but these statements by those behind the vaccines are a clue to what they have in mind. 

  There will be in the next generation or so a pharmacological method of making people love their servitude and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies so that people will in fact have their liberties taken away from them but will rather enjoy it.

  This is exactly what the left is working so hard to effect: a pharmacologically compromised population happy to be taken care of by a massive state machine.  And while millions of people around the world have surrendered to the vaccine and mask hysteria, millions more, about 1.3 billion, want no part of this government vaccine mania.

  In his letter to Orwell, Huxley ended with the quote cited above and again here because it is so profound:

  Within the next generation I believe that the world’s rulers will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging and kicking them into obedience.

  Huxley nailed the left more than seventy years ago, perhaps because leftists have never changed throughout the ages. 

  Tyler Durden
  Thu, 05/06/2021 – 00:10

• Record High Lumber Prices Send "Portable Sawmill" Searches To The Moon
  Record High Lumber Prices Send “Portable Sawmill” Searches To The Moon

  Humans readily respond to changing market conditions in various ways when it comes to soaring commodity prices. For instance, as random length lumber futures on the Chicago Mercantile Exchange hit a record $1,640 on Wednesday, there has been a multi-month explosion of internet searches for people who want to learn how to make lumber. 

  Genius right? Bypass Weyerhaeuser Co., Georgia-Pacific LLC, West Fraser Timber Co., Ltd., among others, and who cares about the low-end wood sold at home improvement retailers, such as Home Depot and Lowes. 

  Amid a lumber price storm, people are becoming their lumberjacks in the pursuit of cheap wood. Google searchers for “portable sawmill” have exploded to record highs in the last couple of months, coinciding with lumber prices. 

  

  So what is a portable sawmill? Just like it sounds – it’s a portable saw on a trailer that is large enough to cut logs into lumber. The same lumber that Home Depot and Lowes are charging an arm and a leg. 

  

  Before the pandemic, any discussions of lumber prices were painfully dull, but now it has become the talk of the town. And maybe ordinary folks are buying these machines to save money on new home builds or capitalize on soaring prices. 

  Soon, lumber contracts are going to outpace gold futures. 

  

  The lumber situation is very relatable to ammunition – as shortages appeared and prices jumped, people learned how to make their own ammo

  Tyler Durden
  Wed, 05/05/2021 – 23:50

• The Curious Case Of The Asian-American Victim
  The Curious Case Of The Asian-American Victim

  Authored by Richard Bernstein, RealClearInvestigations,

  The mass shooting in Atlanta on March 16, which took the lives of six Asian women among the eight victims, appears to be a one-off event – the violent act of a deeply troubled 21-year-old man who, according to what he told the police, was trying to wipe away sexual temptation, in the form of massage parlors that he felt guilty patronizing.

  But that’s not how the incident was treated by the Asian American commentariat. Instead, a consensus quickly formed among journalists, scholars, and cultural figures writing op-eds and giving broadcast interviews that the shooting represented a pervasive, historical victimization by Asian people at the hands of the white majority. It was almost as if shootings of Asian women by white gunmen were an everyday occurrence, rather than a singular, exceedingly rare event.

  

  Bee Nguyen, the first Asian woman to be elected to the George state assembly, declared at a rally four days after the shooting that the incident requires us “to demand justice not only for these victims but for all victims of white supremacy.” The Asian-American Association of Massachusetts, a supposedly nonpartisan group established by the state legislature, issued a statement blaming the attack on “misogyny, white supremacy, and the historical portrayal of Asians as the ‘Yellow Peril.’”

  The Korean American novelist R.O. Kwon wrote a “letter to my fellow Asian women whose hearts are breaking,” published in Vanity Fair, saying that the Atlanta murders represented “the passing of women shot for what they looked like, killed by a racist gunman and by this country’s white supremacy.”

  Two days after the attack, the page one headline in The New York Times read, “How Racism and Sexism Intertwine to Torment Asian-American Women,” with the article quoting several women excoriating the Atlanta police for even thinking that the massage parlor shootings may not have been racially motivated. There were no views on the other side of the issue in the Times coverage. Similarly in a New York Times podcast, the poet and essayist Cathy Park Hong said, “We have also been victims to systemic racism throughout history,” except, she continued, “we have been conditioned to pretend that it doesn’t exist.”

  “I think that came from the white supremacist system that we live in,” she added.

  The country may be used to this sort of narrative, with its intersectionality vocabulary of racial oppression and sexism. Looked at historically, these terms do contain kernels of truth when applied to Asian Americans, who have experienced plenty of both exclusion and violence in the past.

  Still, the prevailing narrative for Asian peoples in America over the last quarter-century and longer has told a success story. Asians may experience a certain residual bigotry, but they have overcome it, the story goes, turning themselves into the “model minority.” The values of hard work, studiousness, and the postponement of gratification won them a disproportionate number of slots at the country’s most coveted schools and helped them become the wealthiest large ethnic group in America.

  But that all was ignored in the wake of the Atlanta shooting, with commentary turning instead to a narrative of victimization at the hands of the same supposedly white supremacist America that has, in what seems a contradiction, welcomed them as immigrants and allowed them to prosper.

  This is significant. It signals the ever-growing expansion into the mainstream of a set of ideas once considered the province of a radical political and academic fringe. Asian Americans — or at least the Asian Americans paid attention to by the mainstream media — apparently have adopted a version of critical race theory, the notion that America is divided into white oppressors and the non-white oppressed, and that history consists of the effort of the former to maintain the “structures of oppression” that ensure its dominance over the latter. Through this lens, the triumphalist narrative of Asian success is a patronizing expression of racism.

  “The dangerous and racist ideology” of the “model minority” is “a means to really minimize and silence and erase the diverse, rich Asian experience in order to reinforce and maintain systemic racism and oppression,” Anastasia Kim, an associate professor of psychology at the Wright Institute in Berkeley, California, said in a colloquium on the Atlanta murders.

  In many ways, the growing embrace of this narrative of systemic racism and white supremacy, at least among the intelligentsia, represents the continued assimilation of Asian Americans – like other groups, they too are embracing their victimhood. They, too, are highlighting discriminatory events from the past. But the effort is fraught not only because of the broad success that many millions of Asian Americans have enjoyed in supposedly white supremacist America, but also because of the complex politics of race itself.

  The very term Asian American is an arbitrary construct, one that throws together people from more than 20 countries and regions that in many cases have no more to do with each other culturally or racially than they do with Africa or Europe.

  Conditions vary considerably among them. Indian Americans have the highest average household incomes in America; people originating in Cambodia, Bhutan, and Bangladesh are less prosperous. There are Hmong refugees and other tribal groups from Laos; the descendants of Vietnam boat people who escaped South Vietnam after the communist takeover there in 1975; rich ethnic Chinese tycoons and ethnic Chinese and Korean workers in nail salons, dry cleaners and restaurants. Almost nothing, except the mania for creating ethnic groupings and contrasting them with the supposedly dominant whites, justifies putting them into the same category.

  

  In that sense, what’s called anti-Asian violence has really mostly been violence against Chinese Americans or other people who are mistaken for them, carried out by people angry over the “China virus.”

  According to the group Stop AAPI Hate (AAPI standing for Asian-American Pacific Islanders) there have been some 3800 reported assaults against Asians since the early days of the COVID pandemic, a sharp increase from previous years — with the race or ethnicity of the victimizers often not described. Citing this figure and the Atlanta-area shootings, the Senate last month passed a bill by a 94-1 vote titled “The COVID-19 Hate Crimes Act.”

  “To me it’s pretty shocking, because I know that it’s not something new,” Min Zhou, the director of the Asian American ethnic studies program at UCLA, said in a Zoom interview. “Historically Asians were discriminated against. It’s on and off, and when I say ‘off’ I mean it’s just less visible. It has been there all along, but it gets heightened, and the impact has been profound on me personally.”

  It is understandable, especially given this history of anti-Asian discrimination, that many Asians and others would feel this way. The attacks have evoked memories of incidents, like the internment of Japanese Americans during World War II, and 1982 killing of Vincent Chin, a Chinese American beaten to death by two white autoworkers enraged by competition from Japan – they mistakenly thought Chin was Japanese.

  Still, there are major differences between the past violence and exclusion and the current spike in violence, which major media seem largely to ignore. The country has officially repudiated the internment of Japanese Americans; President Reagan in 1988 formally apologized to them, and each surviving internee received a reparations payment of $20,000. The killing of Vincent Chin seems similar to the spike in anti-Asian violence, one related to fury over losses of jobs because of Japanese competition; the other an irrational fury at Chinese falsely supposed to be responsible for the COVID epidemic.

  Neither case, though, demonstrates some continuing, pervasive racial hatred of Asians much less some effort by white supremacy to keep Asians down. Nor does the spike in anti-Asian violence, however horrifying. Almost 90% of the incidents have been verbal or involve acts of shunning, and many of them appear to have come from mentally disturbed, often homeless people. A substantial number of the reported attacks have been carried out by other minority group members, especially blacks, though commentators cited in the media attribute even this to white supremacy.

  The public radio station in San Francisco, KQED, for example, interviewed Sherry Wang, a professor of counseling for Santa Clara County, on the reluctance of some victims to report on attacks against them for fear of encouraging anti-black feelings. Wang said that “these concerns about reporting racist incidents are reflections of the wider effect that white supremacy has on both Asian American communities and black communities.”

  In other words, when a black person knocks down an Asian woman and kicks her in the head, the fault lies with white people, a notion that the journalists at KQED approvingly reported.

  To point this out is not to minimize the shocking nature of the violence. In fact, one of the most vicious attacks, shown on security camera video, was of a man on a Manhattan street repeatedly kicking a 65-year-old Filipino woman in the head while shouting, “You don’t belong here.” This understandably had a powerful impact, especially on Asian women who are a large majority of the reported victims.

  

   But even among scholars, at least in recent public comments, there seems to be little effort to put the past history into context, or to acknowledge how much things have changed.

  Since the mid-1960s, 14 million Asian immigrants have arrived in the country.

  Different subgroups have had different outcomes, but the average household incomes of Indian Americans, Korean Americans, and Chinese Americans are substantially higher than whites, despite the latter’s supposed efforts to maintain their dominance.

  Lawsuits have been filed against Harvard and Yale by groups representing Asian students, claiming that they are held to a higher standard than other students in admissions decisions. Still, even with that higher standard, 20%-30% of the student bodies and a great deal of the faculties of the most exclusive universities in the land are of Asian descent. At the California Institute of Technology, which does not strive for racial balance in admissions, the number is 43%.

  

  And yet, the Asian American commentariat seems determined to have Asian Americans identified as a group victimized by white supremacy. One reason clearly is that, in the wake of the death of George Floyd and the emergence of the Black Lives Matter movement, doing so has become fashionable. Liberal Asian Americans working in elite institutions wish, as do white liberals, to show solidarity with blacks, and one way to do that is to express a common victimization. 

  “There’s definitely a cool factor, especially for young people,” said Kenny Xu, a writer on these topics and author of the forthcoming book, “An Inconvenient Minority: The Attack on Asian American Excellence and the Fight for Meritocracy.” “Look at Hassan Minaj and his tirade in favor of affirmative action.” The reference was to the popular Indian American stand-up comic who a couple of years ago inaugurated a Netflix series, “Patriot Act,” by ridiculing the lawsuit brought by some Asian students against Harvard for allegedly discriminating against them in admissions.

  “I find it hilarious,” Minaj said, “that this is the hill we’re willing to die on.”

  But the tropes of critical race theory long predate recent events. The academic world, especially the ethnic studies departments, have been preparing this ground for decades, promoting the idea that white supremacy is at the heart of the American experience, and the constant repetition of that notion has gradually transformed it from a theory to established, indisputable fact.

  Scott Kurashige, chair of the Comparative Race and Ethnic Studies Department at Texas Christian University, for example, put it this way in an interview with Vox: “What we need to realize is that there’s this timeless structure in which there’s always one group on top and another at the bottom. … This country has had a white supremacist ruling class since the beginning.”

  Lok Siu, an associate professor of Asian American and Asian Diaspora Studies at UC-Berkeley, told the New York Times that anti-Asian violence is “built into the structure and built into the way we think of Asians and the way we insert Asians into society.”

  Asked to elaborate on this idea, she spoke of the long history of exclusion of Asians, going back to the ban on the immigration of Chinese women in 1875, followed by the ban on virtually all Asian immigration that lasted from 1925 to 1965, the murderous anti-Chinese riots in California and other places in the 19th century, the laws forbidding marriage between Asian men and white women, and even bans on land ownership by Asians. There’s no question that for many decades America did treat Asians with systemic, legally enforced, exclusionary racism.

  “When you have these laws about who belongs and who doesn’t belong, you’re creating an ideology of distrust, that these people don’t really belong here,” Siu said in a Zoom interview. “There’s a bamboo ceiling that prevents Asian Americans from actually achieving full equity with white Americans, and that is still an issue. It’s not written into law, but you can see can see how it functions, making Asians the perpetual foreigner, the yellow peril.”

  By no means do all Asian Americans agree with that analysis, or with the adoption of the critical race theory narrative. On contentious issues like affirmative action, there are bitter divides among Asian groups and between some of them. In the election last year, voters in California defeated by a 67% majority Proposition 16, which would have ended a state ban on racial preferences in state college admissions. Groups made up largely of ethnic Chinese played prominent roles on both sides of that issue.

  “Asians are caught in the crossfire of a culture war, with the progressive side seeking to inject traces of white supremacy into every situation to confirm their ideology,” said Wenyuan Wu, the executive director of Californians for Equal Rights, one of the groups that opposed Proposition 16.

  There are also aspects of the Asian American discourse that will be controversial among both Asians and non-Asians. Among the demands made by Stop AAPI Hate, the group reporting on the incidents of anti-Asian attacks, is that the United States discontinue the China Initiative, the Justice Department program to investigate technology theft by China and its agents in the country. The program, according to a letter the group sent to President Biden, “has led to the wrongful targeting and persecution of Chinese scientists.”

  One element in this picture, also originating in the academic world, is a concerted attack on the idea of the model minority, pejoratively called the Model Minority Myth by its detractors. The criticism, which has been made for at least a quarter-century, has been that it creates a misleading stereotype of the smart but nerdy Asian student, which leaves out Asians who don’t fit the stereotype and need help.

  But in recent years, the attack against the model minority idea has been portrayed in CRT terms — as an element in an insidious conspiracy to maintain white supremacy, because implicit in the notion of Asian success is assumption that if Blacks changed their behavior, they could do just as well, and it’s their fault if they don’t.

  “Why Be a ‘Model Minority’ When You Could Dismantle White Supremacy?” was the headline in a recent article in The Nation, written by Dae Shik Kim, a community organizer in Seattle.

  “Asian Americans have long been used as a tool by white supremacists to justify systemic racism against black people,” the author writes, voicing an argument and the vocabulary used by many others.

  A related notion, also with roots in academia, is what’s called “adjacent whiteness” or “honorary whiteness” or “conditional whiteness.” It’s the idea that the system of white supremacy has accorded Asians some of the presumed privileges of being white as a way of deterring solidarity among the supposedly oppressed groups.

  “Conditional whiteness … weaponizes people of color against their own communities by making individuals complicit in perpetuating racism and exhibiting dominance over other non-white bodies,” one writer, Dorothy He, said in the online journal Reappropriate.

  That seemingly radical statement has gone mainstream. In the ethnic studies curriculum recently adopted by the California Board of Education, one of the sample lessons is “Asian American Pacific Islanders and the Model Minority Myth.”

  According to the curriculum guidelines, students in that class “will understand how this label for AAPIs becomes a hindrance to expanding democratic structures and support and, at worst, how it creates a division among the AAPI community and places a wedge between them and other oppressed groups.”

  In other words, from now on, when it comes to describing the Asian American experience in California schools, the ideas of critical race theory will be treated as accepted truths. The California curriculum was devised as a model for the rest of the country, and other states are likely to follow it.

  

  Tyler Durden
  Wed, 05/05/2021 – 23:30

• Kansas City Follows West Coast Progressives In Building Village For Homeless 
  Kansas City Follows West Coast Progressives In Building Village For Homeless 

  Progress politicians have been pitching free public housing for years as a cure for housing, wealth, and all sorts of other inequalities. Several West Coast cities have implemented housing first initiatives, with taxpayers shelling out more than one billion dollars in the last half-decade. Years later, the attempt to break the homeless in perpetuity hasn’t worked out exactly as politicians promised. 

  Ignoring the failures on the West Coast, Kansas City leaders have been exploring a similar housing first initiative for residents experiencing homelessness.

  According to The Kansas City Star, Kansas City officials are considering a “150-bed village” almost like the “Hoovervilles” of the 1930s Great Depression. If built, maybe the village should be called “Bidenville.” 

  Here’s an example of one of the tiny homes classy sheds. 

  

  Local officials have yet to decide on the exact location of the new homeless village and provided limited details about the construction.

  Last week, Mayor Quinton Lucas said the homeless village would support Kansas City’s homeless population by allowing them “a sense of dignity and pride in housing options.” 

  “We’ve recognized for too long — for years, for generations — we have not done enough,” Lucas said. “We have not done enough to be creative. We have not done enough to help people get back on their feet.”

  “Kansas City is not looking the other way anymore,” the mayor added.

  We’ve seen this story before. West Coast politicians, especially in San Francisco and Los Angeles, have made grand announcements about solving homelessness through housing first initiatives, but none seem to be working. 

  Touted by influential political leaders, activists, and media outlets in Los Angeles, the simple solution was to build more housing for the homeless. Five years later, a billion dollars down the drain, the project has been plagued by construction delays, massive cost overruns, and accusations of corruption. 

  Meanwhile, unsheltered homelessness jumped 41%, vastly outpacing the construction of new supportive housing units. Streets are also becoming more dangerous, drug use is skyrocketing, and public disorder is out of control. 

  Without acknowledging success, Los Angeles recently called for more shelters for the entire homeless population of skid row by October. A similar story is also playing out in San Francisco. 

  So back to Kansas City, as if officials there have yet to publicly acknowledge the failures of the housing first initiatives on the West Coast – it appears they are diving headfirst into a destructive policy. 

  But again, none of that matters when City Manager Brian Platt said the housing project would be partially funded with federal stimulus. 

  Platt said, “This is a big part of that recovery and relief for people in the city.”  

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  On top of the funding for the homeless village, the federal government is also paying people not to work. This is not a recovery – this is the nation diving into socialism. 

  Tyler Durden
  Wed, 05/05/2021 – 23:10

• Losing Texas Candidate Issues Warning: 2022 "Could Be Major Setback" For Democrats
  Losing Texas Candidate Issues Warning: 2022 “Could Be Major Setback” For Democrats

  Authored by Jack Phillips via The Epoch Times,

  A Democratic candidate who lost her bid during last weekend’s Texas congressional special election sounded the alarm that the 2022 midterms “could be a major setback” for the Democratic Party.

  

  During the special election, two Republicans – and no Democrats – advanced in the runoff as the top two vote-getters in the race for Texas’s 6th Congressional District, after no one in the 23-candidate field won an outright majority of votes on May 1.

  Republicans Susan Wright, wife of the late Rep. Ron Wright, finished with 19 percent of the vote, while Jake Ellzey garnered 14 percent. Democrat Jana Lynne Sanchez finished third with 13 percent and conceded on May 2.

  “On Saturday, Republican candidates got 62 percent of the vote to 38 percent for Democrats (R+25). All the things I thought would motivate Democrats, such as the attempted violent overthrow of a legitimate election result, along with Snowmaggedeon … failed to get our voters out,” Sanchez wrote on Monday after conceding defeat.

  “I’m sounding the alarm bell: If Democrats don’t organize and prepare, 2022 could be a major setback to our gains of recent years,” she said.

  Wright, notably, was endorsed by former President Donald Trump, who on Monday championed his endorsement.

  “Please explain to the Democrats and RINOs that the reason Texas-06 completely shut out Democrats in Saturday’s Jungle Primary is because of my Endorsement of Susan Wright, who surged last week after receiving it,” the former president said in a statement on Monday.

  “RINO,” or “Republican in name only,” is a term used against Republicans who seemingly embrace progressive or Democratic politics.

  The fact that no Democrats advanced can also be seen as a blow to House Speaker Nancy Pelosi’s (D-Calif.) quest to keep her majority after 2022. Generally, the party of the president loses seats during midterm elections, and in 2018, Democrats were able to reclaim the House majority after Trump’s 2016 victory.

  

  The House, meanwhile, is currently split at 218 Democrats to 212 Republicans with five vacancies, which means that Pelosi can only lose two votes to pass legislation. If there is a tie in the House, the bill won’t pass.

  During an interview last week, however, Pelosi struck an optimistic tone and asserted that Democrats would prevail during the midterms. The reason why, she said, is because of recent census results.

  “I feel very confident that the Democrats will hold the majority after the next election,” she told CBS News in late April. “I think that we’re—for all the huffing and puffing the Republicans are doing, these numbers were not as good for them as they had hoped. They wanted three in Texas, two in Florida, and the rest.”

  Tyler Durden
  Wed, 05/05/2021 – 22:50

• Number Of Seniors Tapping Social Security Plummets As "Excess Deaths" Spike During Pandemic
  Number Of Seniors Tapping Social Security Plummets As “Excess Deaths” Spike During Pandemic

  The rate of seniors collecting Social Security benefits has plunged to the lowest level in a decade, which Bloomberg suggests may be due to the disproportionate number of COVID-19 deaths among the elderly.

  According to the Social Security Administration, the number of people who took retirement benefits rose by just 900,000 to 46.4 million in March, the smallest year-over-year gain since April 2009.

  

  More via Bloomberg:

  While the Office of the Chief Actuary at the government agency said it is still too early to assess the impact from Covid-19, the year-over-year change appears to reflect excess deaths. About 447,000 people who died from the virus were 65 or older, according to data from the Centers for Disease Control and Prevention, or about 80% of total deaths.

  The number of Social Security beneficiaries has risen in the past decade as baby boomers — the large cohort born between 1946 and 1964 — started to reach retirement age. Usually, during economic downturns, many are forced into retirement due to job losses, which adds to the retiree pool.

  According to the CDC, there were 660,200 excess deaths from all causes between January 26, 2020 and February 27, 2021, mostly associated with COVID. 

  

  Bloomberg notes that other factors ‘can’ have an impact on Social Security numbers – for example, “In the early 2000s, the bump in beneficiaries was likely tied to the Senior Citizens’ Freedom to Work Act signed into law in April 2000,” which reduced penalties for beneficiaries who continued to work. That said, there’s nothing of the sort going on which could explain the current dropoff.

  Life expectancy in the United State plunged by a full year in the first half of 2020 – the biggest drop since WWII – to 77.8 years from 78.8 in 2019 according to the National Center for Health Statistics.

   

  Tyler Durden
  Wed, 05/05/2021 – 22:30

• Bulletin Of Atomic Scientists Opens The Wuhan Virus Pandora's Box
  Bulletin Of Atomic Scientists Opens The Wuhan Virus Pandora’s Box

  Authored by Nicholas Wade via the Bulletin of the Atomic Scientists (emphasis ours),

  The COVID-19 pandemic has disrupted lives the world over for more than a year. Its death toll will soon reach three million people. Yet the origin of pandemic remains uncertain: The political agendas of governments and scientists have generated thick clouds of obfuscation, which the mainstream press seems helpless to dispel.

  In what follows I will sort through the available scientific facts, which hold many clues as to what happened, and provide readers with the evidence to make their own judgments. I will then try to assess the complex issue of blame, which starts with, but extends far beyond, the government of China.

  By the end of this article, you may have learned a lot about the molecular biology of viruses. I will try to keep this process as painless as possible. But the science cannot be avoided because for now, and probably for a long time hence, it offers the only sure thread through the maze.

  

  The virus that caused the pandemic is known officially as SARS-CoV-2, but can be called SARS2 for short. As many people know, there are two main theories about its origin. One is that it jumped naturally from wildlife to people. The other is that the virus was under study in a lab, from which it escaped. It matters a great deal which is the case if we hope to prevent a second such occurrence.

  I’ll describe the two theories, explain why each is plausible, and then ask which provides the better explanation of the available facts. It’s important to note that so far there is no direct evidence for either theory. Each depends on a set of reasonable conjectures but so far lacks proof. So I have only clues, not conclusions, to offer. But those clues point in a specific direction. And having inferred that direction, I’m going to delineate some of the strands in this tangled skein of disaster.

  A tale of two theories. After the pandemic first broke out in December 2019, Chinese authorities reported that many cases had occurred in the wet market — a place selling wild animals for meat — in Wuhan. This reminded experts of the SARS1 epidemic of 2002, in which a bat virus had spread first to civets, an animal sold in wet markets, and from civets to people. A similar bat virus caused a second epidemic, known as MERS, in 2012. This time the intermediary host animal was camels.

  The decoding of the virus’s genome showed it belonged a viral family known as beta-coronaviruses, to which the SARS1 and MERS viruses also belong. The relationship supported the idea that, like them, it was a natural virus that had managed to jump from bats, via another animal host, to people. The wet market connection, the major point of similarity with the SARS1 and MERS epidemics, was soon broken: Chinese researchers found earlier cases in Wuhan with no link to the wet market. But that seemed not to matter when so much further evidence in support of natural emergence was expected shortly.

  Wuhan, however, is home of the Wuhan Institute of Virology, a leading world center for research on coronaviruses. So the possibility that the SARS2 virus had escaped from the lab could not be ruled out. Two reasonable scenarios of origin were on the table.

  From early on, public and media perceptions were shaped in favor of the natural emergence scenario by strong statements from two scientific groups. These statements were not at first examined as critically as they should have been.

  “We stand together to strongly condemn conspiracy theories suggesting that COVID-19 does not have a natural origin,” a group of virologists and others wrote in the Lancet on February 19, 2020, when it was really far too soon for anyone to be sure what had happened. Scientists “overwhelmingly conclude that this coronavirus originated in wildlife,” they said, with a stirring rallying call for readers to stand with Chinese colleagues on the frontline of fighting the disease.

  Contrary to the letter writers’ assertion, the idea that the virus might have escaped from a lab invoked accident, not conspiracy. It surely needed to be explored, not rejected out of hand. A defining mark of good scientists is that they go to great pains to distinguish between what they know and what they don’t know. By this criterion, the signatories of the Lancet letter were behaving as poor scientists: They were assuring the public of facts they could not know for sure were true.

  It later turned out that the Lancet letter had been organized and drafted by Peter Daszak, president of the EcoHealth Alliance of New York. Daszak’s organization funded coronavirus research at the Wuhan Institute of Virology. If the SARS2 virus had indeed escaped from research he funded, Daszak would be potentially culpable. This acute conflict of interest was not declared to the Lancet’s readers. To the contrary, the letter concluded, “We declare no competing interests.”

  

  Virologists like Daszak had much at stake in the assigning of blame for the pandemic. For 20 years, mostly beneath the public’s attention, they had been playing a dangerous game. In their laboratories they routinely created viruses more dangerous than those that exist in nature. They argued that they could do so safely, and that by getting ahead of nature they could predict and prevent natural “spillovers,” the cross-over of viruses from an animal host to people. If SARS2 had indeed escaped from such a laboratory experiment, a savage blowback could be expected, and the storm of public indignation would affect virologists everywhere, not just in China. “It would shatter the scientific edifice top to bottom,” an MIT Technology Review editor, Antonio Regalado, said in March 2020.

  A second statement that had enormous influence in shaping public attitudes was a letter (in other words an opinion piece, not a scientific article) published on 17 March 2020 in the journal Nature Medicine. Its authors were a group of virologists led by Kristian G. Andersen of the Scripps Research Institute. “Our analyses clearly show that SARS-CoV-2 is not a laboratory construct or a purposefully manipulated virus,” the five virologists declared in the second paragraph of their letter.

  Unfortunately, this was another case of poor science, in the sense defined above. True, some older methods of cutting and pasting viral genomes retain tell-tale signs of manipulation. But newer methods, called “no-see-um” or “seamless” approaches, leave no defining marks. Nor do other methods for manipulating viruses such as serial passage, the repeated transfer of viruses from one culture of cells to another. If a virus has been manipulated, whether with a seamless method or by serial passage, there is no way of knowing that this is the case. Andersen and his colleagues were assuring their readers of something they could not know.

  The discussion part of their letter begins, “It is improbable that SARS-CoV-2 emerged through laboratory manipulation of a related SARS-CoV-like coronavirus.” But wait, didn’t the lead say the virus had clearly not been manipulated? The authors’ degree of certainty seemed to slip several notches when it came to laying out their reasoning.

  The reason for the slippage is clear once the technical language has been penetrated. The two reasons the authors give for supposing manipulation to be improbable are decidedly inconclusive.

  First, they say that the spike protein of SARS2 binds very well to its target, the human ACE2 receptor, but does so in a different way from that which physical calculations suggest would be the best fit. Therefore the virus must have arisen by natural selection, not manipulation.

  If this argument seems hard to grasp, it’s because it’s so strained. The authors’ basic assumption, not spelt out, is that anyone trying to make a bat virus bind to human cells could do so in only one way. First they would calculate the strongest possible fit between the human ACE2 receptor and the spike protein with which the virus latches onto it. They would then design the spike protein accordingly (by selecting the right string of amino acid units that compose it). Since the SARS2 spike protein is not of this calculated best design, the Andersen paper says, therefore it can’t have been manipulated.

  But this ignores the way that virologists do in fact get spike proteins to bind to chosen targets, which is not by calculation but by splicing in spike protein genes from other viruses or by serial passage. With serial passage, each time the virus’s progeny are transferred to new cell cultures or animals, the more successful are selected until one emerges that makes a really tight bind to human cells. Natural selection has done all the heavy lifting. The Andersen paper’s speculation about designing a viral spike protein through calculation has no bearing on whether or not the virus was manipulated by one of the other two methods.

  The authors’ second argument against manipulation is even more contrived. Although most living things use DNA as their hereditary material, a number of viruses use RNA, DNA’s close chemical cousin. But RNA is difficult to manipulate, so researchers working on coronaviruses, which are RNA-based, will first convert the RNA genome to DNA. They manipulate the DNA version, whether by adding or altering genes, and then arrange for the manipulated DNA genome to be converted back into infectious RNA.

  Only a certain number of these DNA backbones have been described in the scientific literature. Anyone manipulating the SARS2 virus “would probably” have used one of these known backbones, the Andersen group writes, and since SARS2 is not derived from any of them, therefore it was not manipulated. But the argument is conspicuously inconclusive. DNA backbones are quite easy to make, so it’s obviously possible that SARS2 was manipulated using an unpublished DNA backbone.

  And that’s it. These are the two arguments made by the Andersen group in support of their declaration that the SARS2 virus was clearly not manipulated. And this conclusion, grounded in nothing but two inconclusive speculations, convinced the world’s press that SARS2 could not have escaped from a lab. A technical critique of the Andersen letter takes it down in harsher words.

  Science is supposedly a self-correcting community of experts who constantly check each other’s work. So why didn’t other virologists point out that the Andersen group’s argument was full of absurdly large holes? Perhaps because in today’s universities speech can be very costly. Careers can be destroyed for stepping out of line. Any virologist who challenges the community’s declared view risks having his next grant application turned down by the panel of fellow virologists that advises the government grant distribution agency.

  The Daszak and Andersen letters were really political, not scientific, statements, yet were amazingly effective. Articles in the mainstream press repeatedly stated that a consensus of experts had ruled lab escape out of the question or extremely unlikely. Their authors relied for the most part on the Daszak and Andersen letters, failing to understand the yawning gaps in their arguments. Mainstream newspapers all have science journalists on their staff, as do the major networks, and these specialist reporters are supposed to be able to question scientists and check their assertions. But the Daszak and Andersen assertions went largely unchallenged.

  Doubts about natural emergence. Natural emergence was the media’s preferred theory until around February 2021 and the visit by a World Health Organization (WHO) commission to China. The commission’s composition and access were heavily controlled by the Chinese authorities. Its members, who included the ubiquitous Daszak, kept asserting before, during, and after their visit that lab escape was extremely unlikely. But this was not quite the propaganda victory the Chinese authorities may have been hoping for. What became clear was that the Chinese had no evidence to offer the commission in support of the natural emergence theory.

  This was surprising because both the SARS1 and MERS viruses had left copious traces in the environment. The intermediary host species of SARS1 was identified within four months of the epidemic’s outbreak, and the host of MERS within nine months. Yet some 15 months after the SARS2 pandemic began, and after a presumably intensive search, Chinese researchers had failed to find either the original bat population, or the intermediate species to which SARS2 might have jumped, or any serological evidence that any Chinese population, including that of Wuhan, had ever been exposed to the virus prior to December 2019. Natural emergence remained a conjecture which, however plausible to begin with, had gained not a shred of supporting evidence in over a year.

  And as long as that remains the case, it’s logical to pay serious attention to the alternative conjecture, that SARS2 escaped from a lab.

  Why would anyone want to create a novel virus capable of causing a pandemic? Ever since virologists gained the tools for manipulating a virus’s genes, they have argued they could get ahead of a potential pandemic by exploring how close a given animal virus might be to making the jump to humans. And that justified lab experiments in enhancing the ability of dangerous animal viruses to infect people, virologists asserted.

  With this rationale, they have recreated the 1918 flu virus, shown how the almost extinct polio virus can be synthesized from its published DNA sequence, and introduced a smallpox gene into a related virus.

  These enhancements of viral capabilities are known blandly as gain-of-function experiments. With coronaviruses, there was particular interest in the spike proteins, which jut out all around the spherical surface of the virus and pretty much determine which species of animal it will target. In 2000 Dutch researchers, for instance, earned the gratitude of rodents everywhere by genetically engineering the spike protein of a mouse coronavirus so that it would attack only cats.

  

  Virologists started studying bat coronaviruses in earnest after these turned out to be the source of both the SARS1 and MERS epidemics. In particular, researchers wanted to understand what changes needed to occur in a bat virus’s spike proteins before it could infect people.

  Researchers at the Wuhan Institute of Virology, led by China’s leading expert on bat viruses, Shi Zheng-li or “Bat Lady,” mounted frequent expeditions to the bat-infested caves of Yunnan in southern China and collected around a hundred different bat coronaviruses.

  Shi then teamed up with Ralph S. Baric, an eminent coronavirus researcher at the University of North Carolina. Their work focused on enhancing the ability of bat viruses to attack humans so as to “examine the emergence potential (that is, the potential to infect humans) of circulating bat CoVs [coronaviruses].” In pursuit of this aim, in November 2015 they created a novel virus by taking the backbone of the SARS1 virus and replacing its spike protein with one from a bat virus (known as SHC014-CoV). This manufactured virus was able to infect the cells of the human airway, at least when tested against a lab culture of such cells.

  The SHC014-CoV/SARS1 virus is known as a chimera because its genome contains genetic material from two strains of virus. If the SARS2 virus were to have been cooked up in Shi’s lab, then its direct prototype would have been the SHC014-CoV/SARS1 chimera, the potential danger of which concerned many observers and prompted intense discussion.

  “If the virus escaped, nobody could predict the trajectory,” said Simon Wain-Hobson, a virologist at the Pasteur Institute in Paris.

  Baric and Shi referred to the obvious risks in their paper but argued they should be weighed against the benefit of foreshadowing future spillovers. Scientific review panels, they wrote, “may deem similar studies building chimeric viruses based on circulating strains too risky to pursue.” Given various restrictions being placed on gain-of function (GOF) research, matters had arrived in their view at “a crossroads of GOF research concerns; the potential to prepare for and mitigate future outbreaks must be weighed against the risk of creating more dangerous pathogens. In developing policies moving forward, it is important to consider the value of the data generated by these studies and whether these types of chimeric virus studies warrant further investigation versus the inherent risks involved.”

  That statement was made in 2015. From the hindsight of 2021, one can say that the value of gain-of-function studies in preventing the SARS2 epidemic was zero. The risk was catastrophic, if indeed the SARS2 virus was generated in a gain-of-function experiment.

  Inside the Wuhan Institute of Virology. Baric had developed, and taught Shi, a general method for engineering bat coronaviruses to attack other species. The specific targets were human cells grown in cultures and humanized mice. These laboratory mice, a cheap and ethical stand-in for human subjects, are genetically engineered to carry the human version of a protein called ACE2 that studs the surface of cells that line the airways.

  Shi returned to her lab at the Wuhan Institute of Virology and resumed the work she had started on genetically engineering coronaviruses to attack human cells. How can we be so sure?

  

  Because, by a strange twist in the story, her work was funded by the National Institute of Allergy and Infectious Diseases (NIAID), a part of the US National Institutes of Health (NIH). And grant proposals that funded her work, which are a matter of public record, specify exactly what she planned to do with the money.

  The grants were assigned to the prime contractor, Daszak of the EcoHealth Alliance, who subcontracted them to Shi. Here are extracts from the grants for fiscal years 2018 and 2019. (“CoV” stands for coronavirus and “S protein” refers to the virus’s spike protein.)

  “Test predictions of CoV inter-species transmission. Predictive models of host range (i.e. emergence potential) will be tested experimentally using reverse genetics, pseudovirus and receptor binding assays, and virus infection experiments across a range of cell cultures from different species and humanized mice.”

  “We will use S protein sequence data, infectious clone technology, in vitro and in vivo infection experiments and analysis of receptor binding to test the hypothesis that % divergence thresholds in S protein sequences predict spillover potential.”

  What this means, in non-technical language, is that Shi set out to create novel coronaviruses with the highest possible infectivity for human cells. Her plan was to take genes that coded for spike proteins possessing a variety of measured affinities for human cells, ranging from high to low. She would insert these spike genes one by one into the backbone of a number of viral genomes (“reverse genetics” and “infectious clone technology”), creating a series of chimeric viruses. These chimeric viruses would then be tested for their ability to attack human cell cultures (“in vitro”) and humanized mice (“in vivo”). And this information would help predict the likelihood of “spillover,” the jump of a coronavirus from bats to people.

  The methodical approach was designed to find the best combination of coronavirus backbone and spike protein for infecting human cells. The approach could have generated SARS2-like viruses, and indeed may have created the SARS2 virus itself with the right combination of virus backbone and spike protein.

  It cannot yet be stated that Shi did or did not generate SARS2 in her lab because her records have been sealed, but it seems she was certainly on the right track to have done so. “It is clear that the Wuhan Institute of Virology was systematically constructing novel chimeric coronaviruses and was assessing their ability to infect human cells and human-ACE2-expressing mice,” says Richard H. Ebright, a molecular biologist at Rutgers University and leading expert on biosafety.

  “It is also clear,” Ebright said, “that, depending on the constant genomic contexts chosen for analysis, this work could have produced SARS-CoV-2 or a proximal progenitor of SARS-CoV-2.” “Genomic context” refers to the particular viral backbone used as the testbed for the spike protein.

  The lab escape scenario for the origin of the SARS2 virus, as should by now be evident, is not mere hand-waving in the direction of the Wuhan Institute of Virology. It is a detailed proposal, based on the specific project being funded there by the NIAID.

  Even if the grant required the work plan described above, how can we be sure that the plan was in fact carried out? For that we can rely on the word of Daszak, who has been much protesting for the last 15 months that lab escape was a ludicrous conspiracy theory invented by China-bashers.

  On December 9, 2019, before the outbreak of the pandemic became generally known, Daszak gave an interview in which he talked in glowing terms of how researchers at the Wuhan Institute of Virology had been reprogramming the spike protein and generating chimeric coronaviruses capable of infecting humanized mice.

  “And we have now found, you know, after 6 or 7 years of doing this, over 100 new SARS-related coronaviruses, very close to SARS,” Daszak says around minute 28 of the interview. “Some of them get into human cells in the lab, some of them can cause SARS disease in humanized mice models and are untreatable with therapeutic monoclonals and you can’t vaccinate against them with a vaccine. So, these are a clear and present danger….

  “Interviewer: You say these are diverse coronaviruses and you can’t vaccinate against them, and no anti-virals — so what do we do?

  “Daszak: Well I think…coronaviruses — you can manipulate them in the lab pretty easily. Spike protein drives a lot of what happen with coronavirus, in zoonotic risk. So you can get the sequence, you can build the protein, and we work a lot with Ralph Baric at UNC to do this. Insert into the backbone of another virus and do some work in the lab. So you can get more predictive when you find a sequence. You’ve got this diversity. Now the logical progression for vaccines is, if you are going to develop a vaccine for SARS, people are going to use pandemic SARS, but let’s insert some of these other things and get a better vaccine.” The insertions he referred to perhaps included an element called the furin cleavage site, discussed below, which greatly increases viral infectivity for human cells.

  In disjointed style, Daszak is referring to the fact that once you have generated a novel coronavirus that can attack human cells, you can take the spike protein and make it the basis for a vaccine.

  One can only imagine Daszak’s reaction when he heard of the outbreak of the epidemic in Wuhan a few days later. He would have known better than anyone the Wuhan Institute’s goal of making bat coronaviruses infectious to humans, as well as the weaknesses in the institute’s defense against their own researchers becoming infected.

  But instead of providing public health authorities with the plentiful information at his disposal, he immediately launched a public relations campaign to persuade the world that the epidemic couldn’t possibly have been caused by one of the institute’s souped-up viruses. “The idea that this virus escaped from a lab is just pure baloney. It’s simply not true,” he declared in an April 2020 interview.

  The safety arrangements at the Wuhan Institute of Virology. Daszak was possibly unaware of, or perhaps he knew all too well, the long history of viruses escaping from even the best run laboratories. The smallpox virus escaped three times from labs in England in the 1960’s and 1970’s, causing 80 cases and 3 deaths. Dangerous viruses have leaked out of labs almost every year since. Coming to more recent times, the SARS1 virus has proved a true escape artist, leaking from laboratories in Singapore, Taiwan, and no less than four times from the Chinese National Institute of Virology in Beijing.

  One reason for SARS1 being so hard to handle is that there were no vaccines available to protect laboratory workers. As Daszak mentioned in the December 19 interview quoted above, the Wuhan researchers too had been unable to develop vaccines against the coronaviruses they had designed to infect human cells. They would have been as defenseless against the SARS2 virus, if it were generated in their lab, as their Beijing colleagues were against SARS1.

  A second reason for the severe danger of novel coronaviruses has to do with the required levels of lab safety. There are four degrees of safety, designated BSL1 to BSL4, with BSL4 being the most restrictive and designed for deadly pathogens like the Ebola virus.

  The Wuhan Institute of Virology had a new BSL4 lab, but its state of readiness considerably alarmed the State Department inspectors who visited it from the Beijing embassy in 2018. “The new lab has a serious shortage of appropriately trained technicians and investigators needed to safely operate this high-containment laboratory,” the inspectors wrote in a cable of January 19, 2018.

  The real problem, however, was not the unsafe state of the Wuhan BSL4 lab but the fact that virologists worldwide don’t like working in BSL4 conditions. You have to wear a space suit, do operations in closed cabinets, and accept that everything will take twice as long. So the rules assigning each kind of virus to a given safety level were laxer than some might think was prudent.

  Before 2020, the rules followed by virologists in China and elsewhere required that experiments with the SARS1 and MERS viruses be conducted in BSL3 conditions. But all other bat coronaviruses could be studied in BSL2, the next level down. BSL2 requires taking fairly minimal safety precautions, such as wearing lab coats and gloves, not sucking up liquids in a pipette, and putting up biohazard warning signs. Yet a gain-of-function experiment conducted in BSL2 might produce an agent more infectious than either SARS1 or MERS. And if it did, then lab workers would stand a high chance of infection, especially if unvaccinated.

  Much of Shi’s work on gain-of-function in coronaviruses was performed at the BSL2 safety level, as is stated in her publications and other documents. She has said in an interview with Science magazine that “[t]he coronavirus research in our laboratory is conducted in BSL-2 or BSL-3 laboratories.”

  “It is clear that some or all of this work was being performed using a biosafety standard — biosafety level 2, the biosafety level of a standard US dentist’s office — that would pose an unacceptably high risk of infection of laboratory staff upon contact with a virus having the transmission properties of SARS-CoV-2,” Ebright says.

  “It also is clear,” he adds, “that this work never should have been funded and never should have been performed.”

  This is a view he holds regardless of whether or not the SARS2 virus ever saw the inside of a lab.

  Concern about safety conditions at the Wuhan lab was not, it seems, misplaced. According to a fact sheet issued by the State Department on January 21, 2021, “The U.S. government has reason to believe that several researchers inside the WIV became sick in autumn 2019, before the first identified case of the outbreak, with symptoms consistent with both COVID-19 and common seasonal illnesses.”

  David Asher, a fellow of the Hudson Institute and former consultant to the State Department, provided more detail about the incident at a seminar. Knowledge of the incident came from a mix of public information and “some high end information collected by our intelligence community,” he said. Three people working at a BSL3 lab at the institute fell sick within a week of each other with severe symptoms that required hospitalization. This was “the first known cluster that we’re aware of, of victims of what we believe to be COVID-19.” Influenza could not completely be ruled out but seemed unlikely in the circumstances, he said.

  Comparing the rival scenarios of SARS2 origin. The evidence above adds up to a serious case that the SARS2 virus could have been created in a lab, from which it then escaped. But the case, however substantial, falls short of proof. Proof would consist of evidence from the Wuhan Institute of Virology, or related labs in Wuhan, that SARS2 or a predecessor virus was under development there. For lack of access to such records, another approach is to take certain salient facts about the SARS2 virus and ask how well each is explained by the two rival scenarios of origin, those of natural emergence and lab escape. Here are four tests of the two hypotheses. A couple have some technical detail, but these are among the most persuasive for those who may care to follow the argument.

  1) The place of origin. Start with geography. The two closest known relatives of the SARS2 virus were collected from bats living in caves in Yunnan, a province of southern China. If the SARS2 virus had first infected people living around the Yunnan caves, that would strongly support the idea that the virus had spilled over to people naturally. But this isn’t what happened. The pandemic broke out 1,500 kilometers away, in Wuhan.

  Beta-coronaviruses, the family of bat viruses to which SARS2 belongs, infect the horseshoe bat Rhinolophus affinis, which ranges across southern China. The bats’ range is 50 kilometers, so it’s unlikely that any made it to Wuhan. In any case, the first cases of the COVID-19 pandemic probably occurred in September, when temperatures in Hubei province are already cold enough to send bats into hibernation.

  What if the bat viruses infected some intermediate host first? You would need a longstanding population of bats in frequent proximity with an intermediate host, which in turn must often cross paths with people. All these exchanges of virus must take place somewhere outside Wuhan, a busy metropolis which so far as is known is not a natural habitat of Rhinolophus bat colonies. The infected person (or animal) carrying this highly transmissible virus must have traveled to Wuhan without infecting anyone else. No one in his or her family got sick. If the person jumped on a train to Wuhan, no fellow passengers fell ill.

  It’s a stretch, in other words, to get the pandemic to break out naturally outside Wuhan and then, without leaving any trace, to make its first appearance there.

  For the lab escape scenario, a Wuhan origin for the virus is a no-brainer. Wuhan is home to China’s leading center of coronavirus research where, as noted above, researchers were genetically engineering bat coronaviruses to attack human cells. They were doing so under the minimal safety conditions of a BSL2 lab. If a virus with the unexpected infectiousness of SARS2 had been generated there, its escape would be no surprise.

  2) Natural history and evolution. The initial location of the pandemic is a small part of a larger problem, that of its natural history. Viruses don’t just make one time jumps from one species to another. The coronavirus spike protein, adapted to attack bat cells, needs repeated jumps to another species, most of which fail, before it gains a lucky mutation. Mutation — a change in one of its RNA units — causes a different amino acid unit to be incorporated into its spike protein and makes the spike protein better able to attack the cells of some other species.

  Through several more such mutation-driven adjustments, the virus adapts to its new host, say some animal with which bats are in frequent contact. The whole process then resumes as the virus moves from this intermediate host to people.

  In the case of SARS1, researchers have documented the successive changes in its spike protein as the virus evolved step by step into a dangerous pathogen. After it had gotten from bats into civets, there were six further changes in its spike protein before it became a mild pathogen in people. After a further 14 changes, the virus was much better adapted to humans, and with a further four, the epidemic took off.

  But when you look for the fingerprints of a similar transition in SARS2, a strange surprise awaits. The virus has changed hardly at all, at least until recently. From its very first appearance, it was well adapted to human cells. Researchers led by Alina Chan of the Broad Institute compared SARS2 with late stage SARS1, which by then was well adapted to human cells, and found that the two viruses were similarly well adapted. “By the time SARS-CoV-2 was first detected in late 2019, it was already pre-adapted to human transmission to an extent similar to late epidemic SARS-CoV,” they wrote.

  Even those who think lab origin unlikely agree that SARS2 genomes are remarkably uniform. Baric writes that “early strains identified in Wuhan, China, showed limited genetic diversity, which suggests that the virus may have been introduced from a single source.”

  A single source would of course be compatible with lab escape, less so with the massive variation and selection which is evolution’s hallmark way of doing business.

  The uniform structure of SARS2 genomes gives no hint of any passage through an intermediate animal host, and no such host has been identified in nature.

  Proponents of natural emergence suggest that SARS2 incubated in a yet-to-be found human population before gaining its special properties. Or that it jumped to a host animal outside China.

  All these conjectures are possible, but strained. Proponents of a lab leak have a simpler explanation. SARS2 was adapted to human cells from the start because it was grown in humanized mice or in lab cultures of human cells, just as described in Daszak’s grant proposal. Its genome shows little diversity because the hallmark of lab cultures is uniformity.

  Proponents of laboratory escape joke that of course the SARS2 virus infected an intermediary host species before spreading to people, and that they have identified it — a humanized mouse from the Wuhan Institute of Virology.

  3) The furin cleavage site. The furin cleavage site is a minute part of the virus’s anatomy but one that exerts great influence on its infectivity. It sits in the middle of the SARS2 spike protein. It also lies at the heart of the puzzle of where the virus came from.

  The spike protein has two sub-units with different roles. The first, called S1, recognizes the virus’s target, a protein called angiotensin converting enzyme-2 (or ACE2) which studs the surface of cells lining the human airways. The second, S2, helps the virus, once anchored to the cell, to fuse with the cell’s membrane. After the virus’s outer membrane has coalesced with that of the stricken cell, the viral genome is injected into the cell, hijacks its protein-making machinery and forces it to generate new viruses.

  But this invasion cannot begin until the S1 and S2 subunits have been cut apart. And there, right at the S1/S2 junction, is the furin cleavage site that ensures the spike protein will be cleaved in exactly the right place.

  The virus, a model of economic design, does not carry its own cleaver. It relies on the cell to do the cleaving for it. Human cells have a protein cutting tool on their surface known as furin. Furin will cut any protein chain that carries its signature target cutting site. This is the sequence of amino acid units proline-arginine-arginine-alanine, or PRRA in the code that refers to each amino acid by a letter of the alphabet. PRRA is the amino acid sequence at the core of SARS2’s furin cleavage site.

  Viruses have all kinds of clever tricks, so why does the furin cleavage site stand out? Because of all known SARS-related beta-coronaviruses, only SARS2 possesses a furin cleavage site. All the other viruses have their S2 unit cleaved at a different site and by a different mechanism.

  How then did SARS2 acquire its furin cleavage site? Either the site evolved naturally, or it was inserted by researchers at the S1/S2 junction in a gain-of-function experiment.

  Consider natural origin first. Two ways viruses evolve are by mutation and by recombination. Mutation is the process of random change in DNA (or RNA for coronaviruses) that usually results in one amino acid in a protein chain being switched for another. Many of these changes harm the virus but natural selection retains the few that do something useful. Mutation is the process by which the SARS1 spike protein gradually switched its preferred target cells from those of bats to civets, and then to humans.

  Mutation seems a less likely way for SARS2’s furin cleavage site to be generated, even though it can’t completely be ruled out. The site’s four amino acid units are all together, and all at just the right place in the S1/S2 junction. Mutation is a random process triggered by copying errors (when new viral genomes are being generated) or by chemical decay of genomic units. So it typically affects single amino acids at different spots in a protein chain. A string of amino acids like that of the furin cleavage site is much more likely to be acquired all together through a quite different process known as recombination.

  Recombination is an inadvertent swapping of genomic material that occurs when two viruses happen to invade the same cell, and their progeny are assembled with bits and pieces of RNA belonging to the other. Beta-coronaviruses will only combine with other beta-coronaviruses but can acquire, by recombination, almost any genetic element present in the collective genomic pool. What they cannot acquire is an element the pool does not possess. And no known SARS-related beta-coronavirus, the class to which SARS2 belongs, possesses a furin cleavage site.

  Proponents of natural emergence say SARS2 could have picked up the site from some as yet unknown beta-coronavirus. But bat SARS-related beta-coronaviruses evidently don’t need a furin cleavage site to infect bat cells, so there’s no great likelihood that any in fact possesses one, and indeed none has been found so far.

  The proponents’ next argument is that SARS2 acquired its furin cleavage site from people. A predecessor of SARS2 could have been circulating in the human population for months or years until at some point it acquired a furin cleavage site from human cells. It would then have been ready to break out as a pandemic.

  If this is what happened, there should be traces in hospital surveillance records of the people infected by the slowly evolving virus. But none has so far come to light. According to the WHO report on the origins of the virus, the sentinel hospitals in Hubei province, home of Wuhan, routinely monitor influenza-like illnesses and “no evidence to suggest substantial SARSCoV-2 transmission in the months preceding the outbreak in December was observed.”

  So it’s hard to explain how the SARS2 virus picked up its furin cleavage site naturally, whether by mutation or recombination.

  That leaves a gain-of-function experiment. For those who think SARS2 may have escaped from a lab, explaining the furin cleavage site is no problem at all. “Since 1992 the virology community has known that the one sure way to make a virus deadlier is to give it a furin cleavage site at the S1/S2 junction in the laboratory,” writes Steven Quay, a biotech entrepreneur interested in the origins of SARS2. “At least 11 gain-of-function experiments, adding a furin site to make a virus more infective, are published in the open literature, including [by] Dr. Zhengli Shi, head of coronavirus research at the Wuhan Institute of Virology.”

  4) A question of codons. There’s another aspect of the furin cleavage site that narrows the path for a natural emergence origin even further.

  As everyone knows (or may at least recall from high school), the genetic code uses three units of DNA to specify each amino acid unit of a protein chain. When read in groups of 3, the 4 different kinds of DNA can specify 4 x 4 x 4 or 64 different triplets, or codons as they are called. Since there are only 20 kinds of amino acid, there are more than enough codons to go around, allowing some amino acids to be specified by more than one codon. The amino acid arginine, for instance, can be designated by any of the six codons CGU, CGC, CGA, CGG, AGA or AGG, where A, U, G and C stand for the four different kinds of unit in RNA.

  Here’s where it gets interesting. Different organisms have different codon preferences. Human cells like to designate arginine with the codons CGT, CGC or CGG. But CGG is coronavirus’s least popular codon for arginine. Keep that in mind when looking at how the amino acids in the furin cleavage site are encoded in the SARS2 genome.

  Now the functional reason why SARS2 has a furin cleavage site, and its cousin viruses don’t, can be seen by lining up (in a computer) the string of nearly 30,000 nucleotides in its genome with those of its cousin coronaviruses, of which the closest so far known is one called RaTG13. Compared with RaTG13, SARS2 has a 12-nucleotide insert right at the S1/S2 junction. The insert is the sequence T-CCT-CGG-CGG-GC. The CCT codes for proline, the two CGG’s for two arginines, and the GC is the beginning of a GCA codon that codes for alanine.

  There are several curious features about this insert but the oddest is that of the two side-by-side CGG codons. Only 5 percent of SARS2’s arginine codons are CGG, and the double codon CGG-CGG has not been found in any other beta-coronavirus. So how did SARS2 acquire a pair of arginine codons that are favored by human cells but not by coronaviruses?

  Proponents of natural emergence have an up-hill task to explain all the features of SARS2’s furin cleavage site. They have to postulate a recombination event at a site on the virus’s genome where recombinations are rare, and the insertion of a 12-nucleotide sequence with a double arginine codon unknown in the beta-coronavirus repertoire, at the only site in the genome that would significantly expand the virus’s infectivity.

  “Yes, but your wording makes this sound unlikely — viruses are specialists at unusual events,” is the riposte of David L. Robertson, a virologist at the University of Glasgow who regards lab escape as a conspiracy theory. “Recombination is naturally very, very frequent in these viruses, there are recombination breakpoints in the spike protein and these codons appear unusual exactly because we’ve not sampled enough.”

  Robertson is correct that evolution is always producing results that may seem unlikely but in fact are not. Viruses can generate untold numbers of variants but we see only the one-in-a-billion that natural selection picks for survival. But this argument could be pushed too far. For instance, any result of a gain-of-function experiment could be explained as one that evolution would have arrived at in time. And the numbers game can be played the other way. For the furin cleavage site to arise naturally in SARS2, a chain of events has to happen, each of which is quite unlikely for the reasons given above. A long chain with several improbable steps is unlikely to ever be completed.

  For the lab escape scenario, the double CGG codon is no surprise. The human-preferred codon is routinely used in labs. So anyone who wanted to insert a furin cleavage site into the virus’s genome would synthesize the PRRA-making sequence in the lab and would be likely to use CGG codons to do so.

  A third scenario of origin. There’s a variation on the natural emergence scenario that’s worth considering. This is the idea that SARS2 jumped directly from bats to humans, without going through an intermediate host as SARS1 and MERS did. A leading advocate is the virologist David Robertson who notes that SARS2 can attack several other species besides humans. He believes the virus evolved a generalist capability while still in bats. Because the bats it infects are widely distributed in southern and central China, the virus had ample opportunity to jump to people, even though it seems to have done so on only one known occasion. Robertson’s thesis explains why no one has so far found a trace of SARS2 in any intermediate host or in human populations surveilled before December 2019. It would also explain the puzzling fact that SARS2 has not changed since it first appeared in humans — it didn’t need to because it could already attack human cells efficiently.

  One problem with this idea, though, is that if SARS2 jumped from bats to people in a single leap and hasn’t changed much since, it should still be good at infecting bats. And it seems it isn’t.

  “Tested bat species are poorly infected by SARS-CoV-2 and they are therefore unlikely to be the direct source for human infection,” write a scientific group skeptical of natural emergence.

  Still, Robertson may be onto something. The bat coronaviruses of the Yunnan caves can infect people directly. In April 2012 six miners clearing bat guano from the Mojiang mine contracted severe pneumonia with COVID-19-like symptoms and three eventually died. A virus isolated from the Mojiang mine, called RaTG13, is still the closest known relative of SARS2. Much mystery surrounds the origin, reporting and strangely low affinity of RaTG13 for bat cells, as well as the nature of 8 similar viruses that Shi reports she collected at the same time but has not yet published despite their great relevance to the ancestry of SARS2. But all that is a story for another time. The point here is that bat viruses can infect people directly, though only in special conditions.

  So who else, besides miners excavating bat guano, comes into particularly close contact with bat coronaviruses? Well, coronavirus researchers do. Shi says she and her group collected more than 1,300 bat samples during some eight visits to the Mojiang cave between 2012 and 2015, and there were doubtless many expeditions to other Yunnan caves.

  Imagine the researchers making frequent trips from Wuhan to Yunnan and back, stirring up bat guano in dark caves and mines, and now you begin to see a possible missing link between the two places. Researchers could have gotten infected during their collecting trips, or while working with the new viruses at the Wuhan Institute of Technology. The virus that escaped from the lab would have been a natural virus, not one cooked up by gain of function.

  The direct-from-bats thesis is a chimera between the natural emergence and lab escape scenarios. It’s a possibility that can’t be dismissed. But against it are the facts that 1) both SARS2 and RaTG13 seem to have only feeble affinity for bat cells, so one can’t be fully confident that either ever saw the inside of a bat; and 2) the theory is no better than the natural emergence scenario at explaining how SARS2 gained its furin cleavage site, or why the furin cleavage site is determined by human-preferred arginine codons instead of by the bat-preferred codons.

  Where we are so far. Neither the natural emergence nor the lab escape hypothesis can yet be ruled out. There is still no direct evidence for either. So no definitive conclusion can be reached.

  That said, the available evidence leans more strongly in one direction than the other. Readers will form their own opinion. But it seems to me that proponents of lab escape can explain all the available facts about SARS2 considerably more easily than can those who favor natural emergence.

  It’s documented that researchers at the Wuhan Institute of Virology were doing gain-of-function experiments designed to make coronaviruses infect human cells and humanized mice. This is exactly the kind of experiment from which a SARS2-like virus could have emerged. The researchers were not vaccinated against the viruses under study, and they were working in the minimal safety conditions of a BSL2 laboratory. So escape of a virus would not be at all surprising. In all of China, the pandemic broke out on the doorstep of the Wuhan institute. The virus was already well adapted to humans, as expected for a virus grown in humanized mice. It possessed an unusual enhancement, a furin cleavage site, which is not possessed by any other known SARS-related beta-coronavirus, and this site included a double arginine codon also unknown among beta-coronaviruses. What more evidence could you want, aside from the presently unobtainable lab records documenting SARS2’s creation?

  Proponents of natural emergence have a rather harder story to tell. The plausibility of their case rests on a single surmise, the expected parallel between the emergence of SARS2 and that of SARS1 and MERS. But none of the evidence expected in support of such a parallel history has yet emerged. No one has found the bat population that was the source of SARS2, if indeed it ever infected bats. No intermediate host has presented itself, despite an intensive search by Chinese authorities that included the testing of 80,000 animals. There is no evidence of the virus making multiple independent jumps from its intermediate host to people, as both the SARS1 and MERS viruses did. There is no evidence from hospital surveillance records of the epidemic gathering strength in the population as the virus evolved. There is no explanation of why a natural epidemic should break out in Wuhan and nowhere else. There is no good explanation of how the virus acquired its furin cleavage site, which no other SARS-related beta-coronavirus possesses, nor why the site is composed of human-preferred codons. The natural emergence theory battles a bristling array of implausibilities.

  The records of the Wuhan Institute of Virology certainly hold much relevant information. But Chinese authorities seem unlikely to release them given the substantial chance that they incriminate the regime in the creation of the pandemic. Absent the efforts of some courageous Chinese whistle-blower, we may already have at hand just about all of the relevant information we are likely to get for a while.

  So it’s worth trying to assess responsibility for the pandemic, at least in a provisional way, because the paramount goal remains to prevent another one. Even those who aren’t persuaded that lab escape is the more likely origin of the SARS2 virus may see reason for concern about the present state of regulation governing gain-of-function research. There are two obvious levels of responsibility: the first, for allowing virologists to perform gain-of-function experiments, offering minimal gain and vast risk; the second, if indeed SARS2 was generated in a lab, for allowing the virus to escape and unleash a world-wide pandemic. Here are the players who seem most likely to deserve blame.

  1. Chinese virologists. First and foremost, Chinese virologists are to blame for performing gain-of-function experiments in mostly BSL2-level safety conditions which were far too lax to contain a virus of unexpected infectiousness like SARS2. If the virus did indeed escape from their lab, they deserve the world’s censure for a foreseeable accident that has already caused the deaths of three  million people. True, Shi was trained by French virologists, worked closely with American virologists and was following international rules for the containment of coronaviruses. But she could and should have made her own assessment of the risks she was running. She and her colleagues bear the responsibility for their actions.

  I have been using the Wuhan Institute of Virology as a shorthand for all virological activities in Wuhan. It’s possible that SARS2 was generated in some other Wuhan lab, perhaps in an attempt to make a vaccine that worked against all coronaviruses. But until the role of other Chinese virologists is clarified, Shi is the public face of Chinese work on coronaviruses, and provisionally she and her colleagues will stand first in line for opprobrium.

  2. Chinese authorities. China’s central authorities did not generate SARS2, but they sure did their utmost to conceal the nature of the tragedy and China’s responsibility for it. They suppressed all records at the Wuhan Institute of Virology and closed down its virus databases. They released a trickle of information, much of which may have been outright false or designed to misdirect and mislead. They did their best to manipulate the WHO’s inquiry into the virus’s origins, and led the commission’s members on a fruitless run-around. So far they have proved far more interested in deflecting blame than in taking the steps necessary to prevent a second pandemic.

  3. The worldwide community of virologists. Virologists around the world are a loose-knit professional community. They write articles in the same journals. They attend the same conferences. They have common interests in seeking funds from governments and in not being overburdened with safety regulations.

  Virologists knew better than anyone the dangers of gain-of-function research. But the power to create new viruses, and the research funding obtainable by doing so, was too tempting. They pushed ahead with gain-of-function experiments. They lobbied against the moratorium imposed on Federal funding for gain-of-function research in 2014, and it was raised in 2017.

  The benefits of the research in preventing future epidemics have so far been nil, the risks vast. If research on the SARS1 and MERS viruses could only be done at the BSL3 safety level, it was surely illogical to allow any work with novel coronaviruses at the lesser level of BSL2. Whether or not SARS2 escaped from a lab, virologists around the world have been playing with fire.

  Their behavior has long alarmed other biologists. In 2014 scientists calling themselves the Cambridge Working Group urged caution on creating new viruses. In prescient words, they specified the risk of creating a SARS2-like virus. “Accident risks with newly created ‘potential pandemic pathogens’ raise grave new concerns,” they wrote. “Laboratory creation of highly transmissible, novel strains of dangerous viruses, especially but not limited to influenza, poses substantially increased risks. An accidental infection in such a setting could trigger outbreaks that would be difficult or impossible to control.”

  When molecular biologists discovered a technique for moving genes from one organism to another, they held a public conference at Asilomar in 1975 to discuss the possible risks. Despite much internal opposition, they drew up a list of stringent safety measures that could be relaxed in future — and duly were — when the possible hazards had been better assessed.

  When the CRISPR technique for editing genes was invented, biologists convened a joint report by the US, UK and Chinese national academies of science to urge restraint on making heritable changes to the human genome. Biologists who invented gene drives have also been open about the dangers of their work and have sought to involve the public.

  You might think the SARS2 pandemic would spur virologists to re-evaluate the benefits of gain-of-function research, even to engage the public in their deliberations. But no. Many virologists deride lab escape as a conspiracy theory, and others say nothing. They have barricaded themselves behind a Chinese wall of silence which so far is working well to allay, or at least postpone, journalists’ curiosity and the public’s wrath. Professions that cannot regulate themselves deserve to get regulated by others, and this would seem to be the future that virologists are choosing for themselves.

  4. The US role in funding the Wuhan Institute of Virology. From June 2014 to May 2019, Daszak’s EcoHealth Alliance had a grant from the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, to do gain-of-function research with coronaviruses at the Wuhan Institute of Virology. Whether or not SARS2 is the product of that research, it seems a questionable policy to farm out high-risk research to unsafe foreign labs using minimal safety precautions. And if the SARS2 virus did indeed escape from the Wuhan institute, then the NIH will find itself in the terrible position of having funded a disastrous experiment that led to death of more than 3 million worldwide, including more than half a million of its own citizens.

  The responsibility of the NIAID and NIH is even more acute because for the first three years of the grant to EcoHealth Alliance, there was a moratorium on funding gain-of-function research. Why didn’t the two agencies therefore halt the federal funding, as apparently required to do so by law? Because someone wrote a loophole into the moratorium.

  The moratorium specifically barred funding any gain-of-function research that increased the pathogenicity of the flu, MERS, or SARS viruses. But then a footnote on page 2 of the moratorium document states that “[a]n exception from the research pause may be obtained if the head of the USG funding agency determines that the research is urgently necessary to protect the public health or national security.”

  This seems to mean that either the director of the NIAID, Anthony Fauci, or the director of the NIH, Francis Collins, or maybe both, would have invoked the footnote in order to keep the money flowing to Shi’s gain-of-function research.

  “Unfortunately, the NIAID director and the NIH director exploited this loophole to issue exemptions to projects subject to the Pause—preposterously asserting the exempted research was ‘urgently necessary to protect public health or national security’ — thereby nullifying the Pause,” Ebright said in an interview with Independent Science News.

  When the moratorium was ended in 2017, it didn’t just vanish but was replaced by a reporting system, the Potential Pandemic Pathogens Control and Oversight (P3CO) Framework, which required agencies to report for review any dangerous gain-of-function work they wished to fund.

  According to Ebright, both Collins and Fauci “have declined to flag and forward proposals for risk-benefit review, thereby nullifying the P3CO Framework.”

  In his view, the two officials, in dealing with the moratorium and the ensuing reporting system, “have systematically thwarted efforts by the White House, the Congress, scientists, and science policy specialists to regulate GoF [gain-of-function] research of concern.”

  Possibly the two officials had to take into account matters not evident in the public record, such as issues of national security. Perhaps funding the Wuhan Institute of Virology, which is believed to have ties with Chinese military virologists, provided a window into Chinese biowarfare research. But whatever other considerations may have been involved, the bottom line is that the National Institutes of Health was supporting gain-of-function research, of a kind that could have generated the SARS2 virus, in an unsupervised foreign lab that was doing work in BSL2 biosafety conditions. The prudence of this decision can be questioned, whether or not SARS2 and the death of 3 million people were the result of it, which emphasizes the need for some better system of control.

  In conclusion. If the case that SARS2 originated in a lab is so substantial, why isn’t this more widely known? As may now be obvious, there are many people who have reason not to talk about it. The list is led, of course, by the Chinese authorities. But virologists in the United States and Europe have no great interest in igniting a public debate about the gain-of-function experiments that their community has been pursuing for years.

  Nor have other scientists stepped forward to raise the issue. Government research funds are distributed on the advice of committees of scientific experts drawn from universities. Anyone who rocks the boat by raising awkward political issues runs the risk that their grant will not be renewed and their research career will be ended. Maybe good behavior is rewarded with the many perks that slosh around the distribution system. And if you thought that Andersen and Daszak might have blotted their reputation for scientific objectivity after their partisan attacks on the lab escape scenario, look at the second and third names on this list of recipients of an $82 million grant announced by the National Institute of Allergy and Infectious Diseases in August 2020.

  The US government shares a strange common interest with the Chinese authorities: Neither is keen on drawing attention to the fact that Shi’s coronavirus work was funded by the US National Institutes of Health. One can imagine the behind-the-scenes conversation in which the Chinese government says, “If this research was so dangerous, why did you fund it, and on our territory too?” To which the US side might reply, “Looks like it was you who let it escape. But do we really need to have this discussion in public?”

  Fauci is a longtime public servant who served with integrity under President Trump and has resumed leadership in the Biden Administration in handling the COVID-19 epidemic. Congress, no doubt understandably, may have little appetite for hauling him over the coals for the apparent lapse of judgment in funding gain-of-function research in Wuhan.

  To these serried walls of silence must be added that of the mainstream media. To my knowledge, no major newspaper or television network has yet provided readers with an in-depth news story of the lab escape scenario, such as the one you have just read, although some have run brief editorials or opinion pieces. One might think that any plausible origin of a virus that has killed three million people would merit a serious investigation. Or that the wisdom of continuing gain-of-function research, regardless of the virus’s origin, would be worth some probing. Or that the funding of gain-of-function research by the NIH and NIAID during a moratorium on such research would bear investigation. What accounts for the media’s apparent lack of curiosity?

  The virologists’ omertà is one reason. Science reporters, unlike political reporters, have little innate skepticism of their sources’ motives; most see their role largely as purveying the wisdom of scientists to the unwashed masses. So when their sources won’t help, these journalists are at a loss.

  Another reason, perhaps, is the migration of much of the media toward the left of the political spectrum. Because President Trump said the virus had escaped from a Wuhan lab, editors gave the idea little credence. They joined the virologists in regarding lab escape as a dismissible conspiracy theory. During the Trump administration, they had no trouble in rejecting the position of the intelligence services that lab escape could not be ruled out. But when Avril Haines, President Biden’s director of national intelligence, said the same thing, she too was largely ignored. This is not to argue that editors should have endorsed the lab escape scenario, merely that they should have explored the possibility fully and fairly.

  People round the world who have been pretty much confined to their homes for the last year might like a better answer than their media are giving them. Perhaps one will emerge in time. After all, the more months pass without the natural emergence theory gaining a shred of supporting evidence, the less plausible it may seem. Perhaps the international community of virologists will come to be seen as a false and self-interested guide. The common sense perception that a pandemic breaking out in Wuhan might have something to do with a Wuhan lab cooking up novel viruses of maximal danger in unsafe conditions could eventually displace the ideological insistence that whatever Trump said can’t be true.

  And then let the reckoning begin.

  Acknowledgements

  The first person to take a serious look at the origins of the SARS2 virus was Yuri Deigin, a biotech entrepreneur in Russia and Canada. In a long and brilliant essay, he dissected the molecular biology of the SARS2 virus and raised, without endorsing, the possibility that it had been manipulated. The essay, published on April 22, 2020, provided a roadmap for anyone seeking to understand the virus’s origins. Deigin packed so much information and analysis into his essay that some have doubted it could be the work of a single individual and suggested some intelligence agency must have authored it. But the essay is written with greater lightness and humor than I suspect are ever found in CIA or KGB reports, and I see no reason to doubt that Deigin is its very capable sole author.

  In Deigin’s wake have followed several other skeptics of the virologists’ orthodoxy. Nikolai Petrovsky calculated how tightly the SARS2 virus binds to the ACE2 receptors of various species and found to his surprise that it seemed optimized for the human receptor, leading him to infer the virus might have been generated in a laboratory. Alina Chan published a paper showing that SARS2 from its first appearance was very well adapted to human cells.

  One of the very few establishment scientists to have questioned the virologists’ absolute rejection of lab escape is Richard Ebright, who has long warned against the dangers of gain-of-function research. Another is David A. Relman of Stanford University. “Even though strong opinions abound, none of these scenarios can be confidently ruled in or ruled out with currently available facts,” he wrote. Kudos too to Robert Redfield, former director of the Centers for Disease Control and Prevention, who told CNN on March 26, 2021 that the “most likely” cause of the epidemic was “from a laboratory,” because he doubted that a bat virus could become an extreme human pathogen overnight, without taking time to evolve, as seemed to be the case with SARS2.

  Steven Quay, a physician-researcher, has applied statistical and bioinformatic tools to ingenious explorations of the virus’s origin, showing for instance how the hospitals receiving the early patients are clustered along the Wuhan №2 subway line which connects the Institute of Virology at one end with the international airport at the other, the perfect conveyor belt for distributing the virus from lab to globe.

  In June 2020 Milton Leitenberg published an early survey of the evidence favoring lab escape from gain-of-function research at the Wuhan Institute of Virology.

  Many others have contributed significant pieces of the puzzle. “Truth is the daughter,” said Francis Bacon, “not of authority but time.” The efforts of people such as those named above are what makes it so.

  Nicholas Wade is a science writer, editor, and author who has worked on the staff of Nature, Science, and, for many years, the New York Times

  Tyler Durden
  Wed, 05/05/2021 – 22:10

• Watch: Thousands Of Ford Pickups Sit Idle In Kentucky Lots, Awaiting Semi Chip-Related Components
  Watch: Thousands Of Ford Pickups Sit Idle In Kentucky Lots, Awaiting Semi Chip-Related Components

  Alongside Interstate 71, there sits thousands of Ford Super Duty trucks, parked in rows and waiting on parts.

  The scene is the latest sign of an ongoing semiconductor crisis that has stung not only the entire auto industry – but Ford specifically, who was the latest auto manufacturer to slash its expectations for full year production as a result of the shortage.

  As a result, “thousands” of America’s best selling pickup trucks can be seen sitting along the highway near Sparta, Kentucky. There were 22,000 vehicles awaiting installation of chip related components, the Detroit Free Press reported this week.

  Kelli Felker, Ford global manufacturing and labor communications manager said this week: “Ford will build and hold the vehicles for a number of weeks, then ship the vehicles to dealers once the modules are available and comprehensive quality checks are complete.”

  

  “The semiconductor shortage and the impact to production will get worse before it gets better,” Ford CEO Jim Farley said during the company’s earnings call last week. 

  Wall Street has been, and will continue to “pay attention” to the lots, and specifically America’s best selling pickup truck apparently hitting a full-on production stand still. 

  Ford claims its shortage is no different than many other domestic manufacturers. “All automakers will be dramatically impacted by the chip shortage so it sure seems off that Ford got punished for its transparent honesty,” one analyst commented, supporting that view. Jennifer Flake, executive director of global product communications, said: “The global semiconductor shortage is affecting automakers around the world — as well as other industries, including consumer electronics companies.” 

  The Detroit Free Press estimates that lost vehicle production globally this year has been projected to be:

  • Ford, 362,663 fewer vehicles
  • General Motors, 326,651
  • Renault Nissan Mitsubishi, 284,948
  • Volkswagen, 207,521
  • Stellantis, 202,486
  • Toyota, 113,555
  • Honda, 82,482

  Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, concluded: “This is a growing concern. Like COVID last year, from the beginning it seemed like it would go away in the near term but as the months go by, it’s growing into a bigger and bigger issue.”

  

  He continued: “It takes so long to get a plant up and running that’s dedicated to these particular chips. With the increased computerization of vehicles, these chips are the lifeblood. They operate the powertrain control unit, the infotainment. You can drive a car without the infotainment system but you can’t sell a car without an infotainment system. You can’t run an engine without certain chips. They’re the nerve center of different sections of the vehicle.”

  “Estimates project the full recovery of the auto chip supply will stretch into the fourth quarter of this year and possibly even into 2022, making industry volume recovery in the second half of the year even more challenging,” Farley concluded. 

  Tyler Durden
  Wed, 05/05/2021 – 21:50

• "An American Tragedy": Restaurants Ready to Hire, But Government Payments Keep Workers Home
  “An American Tragedy”: Restaurants Ready to Hire, But Government Payments Keep Workers Home

  Authored by Bowen Xiao via The Epoch Times (emphasis ours),

  As more and more states start easing pandemic restrictions, restaurants large and small are grappling with a widespread problem: hiring employees.

  

  Owners and managers from New York, California, Washington, and Chicago told The Epoch Times hiring woes have become a nightmare amid a litany of other challenges like indoor occupancy rules. They say the federal unemployment bonuses handed out during the CCP (Chinese Communist Party) virus pandemic incentivized people to stay home instead of working.

  Now, restaurants are starting the long, hard, and costly climb back to profitability. The lockdowns imposed across the country a year ago have since put out of business over 110,000 eateries, some of them permanently.

  It’s become so dire that one McDonald’s location in Florida started paying $50 to anyone who would show up for a job interview. Other franchises like Taco Bell, which needs at least 5,000 new employees, are holding hiring events in parking lots.

  Hiring difficulties have long existed in the service industry, even before the pandemic. But Hudson Riehle, the senior vice president for research at the National Restaurant Association said it’s reaching unprecedented levels.

  “When it comes to recruiting workforce, in January, 7 percent of restaurant operators rated recruitment and retention of workforce as their top challenge; by April that number had risen to 57 percent,” Riehle told The Epoch Times.

  “With fewer people in the workforce, the stimulus supports still in place, worker safety concerns, the need for caregivers to remain at home, and much greater competition with other industries for workers, operators are returning to pre-pandemic recruitment techniques for hiring,” he said.

  ‘An American Tragedy’

  Mark Fox, a Dublin native who lives in New York City, owns four restaurants in the Big Apple. While business is now finally starting to pick up, hiring troubles have slowed down the momentum.

  “We have difficulty hiring hourly workers, bartenders, servers, bar-backs, busboys, runners, overnight cleaning staff,” Fox told The Epoch Times inside his flagship restaurant, The Ragtrader & Bo Peep Cocktail and Highball Store.

  “We are probably 60 employees short,” he said. “I have one restaurant in Greenwich Village that I haven’t reopened yet because they don’t have the manpower.”

  

  

  The Ragtrader, a 300-seat restaurant in its fourth week of reopening, was hit hard last year. Fox said he lost a “devastating” amount of money. He said revenue levels currently are half of what he made in 2019 but that the needle is “moving in the right direction.”

  According to Fox, the biggest factor behind the difficulty in hiring is the enhanced unemployment benefits, which now extend until the beginning of September. While he stressed it was necessary earlier in the pandemic, he believes the federal government has continued it for too long.

  “It’s not financially beneficial for [people] to return to work,” he said. “So we’re in a real crisis with respect to labor shortfall.”

  As Fox told his story, he described the emotional struggle he dealt with as he was forced to lay off workers on a long-term basis. At the time, they had no other resources to pull money from and Fox felt powerless to help them.

  While he is an advocate of responsible social distancing and hygiene practices, Fox believes the lockdown restrictions in the city were arbitrary and not based on evidence.

  “I think there was a distrust from the state government. A lot of people lost their businesses and lost their livelihoods and their dreams because of it,” he said. “And I think it’s an American tragedy, to be perfectly honest with you.”

  New York City and New York state had different restrictions last year. Fox pointed out one that made him scratch his head: guests were not allowed to sit at the bar counter in New York City but they were in New York State. Restaurants in New York City tend to be smaller and the rule made it impossible for a lot of places to stay open.

  And while New York state has been allowed a 50 percent occupancy right through to today, New York City closed down twice and restaurants were given 25 percent occupancy mandates for many months. Fox described how he had to pay tens of thousands of dollars to bring in protective equipment, sanitizing equipment, temperature checkers, and more.

  

  

  People spent money they didn’t have, and ended up closed again, he said. He also called the 10 p.m. curfew “ridiculous.”

  “I believe our state and city leaders didn’t do their job,” he said. “I think that they made arbitrary decisions based on hunches. I hope that they’re held to account for it.”

  Andrew Rigie the executive director at the NYC Hospitality Alliance, a nonprofit association representing eating and drinking establishments, said restaurants are facing a “complex labor shortage” on top of an economic crisis.

  “We need a plan and policies to help get more people back to work,” Rigie told The Epoch Times via email.

  Unemployment Checks

  Jim Walker, a local restauranteur in California and former president of the Newport Beach Restaurant Association, said the entire industry has been thrown into disarray.

  “There is a huge shortage in back-of-the-house kitchen staff, and those who are available are dictating what they want to be paid,” Walker told The Epoch Times. “Finding hostesses and bartenders is our biggest ongoing challenge.”

  Because of this, Walker is now offering bonuses for new hires who stay on for a certain length of time and offering existing staff referral bonuses. He owns three restaurants—Bungalow Restaurant, Cedar Creek, Domenico’s Pizza—and is set to open another in July.

  While business is coming back for him, costs are “rising significantly,” he said noting that cattle breeders have cut back on their herds due to a lack of demand and that in one week, meat costs for a bone-in ribeye went up $7 per pound.

  On top of that, Walker pays $100,000 per year in credit card fees. Unemployment benefits, he said, are also discouraging people from working.

  “People are staying home because they can make more money from stimulus extension than if they go back to work,” he said.

  

  “Those coming across the border who might normally immediately become part of the labor market are not doing so because of all the government aid currently being handed out,” he added. “They are not motivated or desperate to get a job once they are in the U.S.”

  New York City, for example, has set aside $2.1 billion in funds from the state budget to pay illegal immigrants who lost work during the pandemic.

  Walker’s wife recently went to a restaurant in San Juan Capistrano. When the bill came there was a 4 percent “Kitchen Appreciation Fee.” Some restaurants, according to Walker, are now charging a “COVID Recovery Fee” as well, and many consumers are not even noticing the extra charges.

  One chef and owner of a seafood restaurant franchise in California summed up the dismal situation in a now-viral Twitter post.

  “There are no employees available in California,” Andrew Gruel wrote on April 29. “We are paying dishwashers $21 to start. The two main reasons people tell me they won’t work: They are making enough on unemployment and would rather not work; 2. With schools closed, they can’t pay someone to watch their children.”

  Gruel added in a follow-up post that not a single person he spoke to said they were scared of the virus.

  Out of Options

  Keisha Rucke, owner of The Soul Shack, said her restaurant is short-staffed and she is always on the lookout for new hires.

  Rucke told The Epoch Times she needs four more servers, a line person for the day and one for the evening, and another cleaning crew. Her cooking staff, however, have stayed with her through everything over the last two years since they opened.

  “I just hired two cashiers. I couldn’t get cashiers for a month,” she said. “I literally had people here multitasking. I was cashiering, I actually had to hire my daughter to come in.”

  Two of her friends who own restaurants in the area told her they had to adjust their hours for dine-in because of a lack of servers. Rucke said she now is paying a higher hourly rate for her own servers in order to entice them into work.

  

  

  She believes there are multiple reasons why hiring is hard, including that people are still taking in unemployment checks that are probably higher than the paychecks they would get from working, or they are still afraid of coming out due to the pandemic.

  “I don’t know what is that we can do,” she said. “I see so many signs where people are looking for servers and line persons and cashiers that I don’t think it’s only a restaurant industry thing at this point.”

  Unpredictability

  Eric St. Clair, manager at Proper 21, a bar located in Washington, said the hardest part of hiring for them was the unpredictability. One day they would be super busy all day, and then the next they would be understaffed.

  They closed entirely for 3 months last year, and while they had a few former employees come back, some went to other industries like beauty and construction. While hiring is a factor, the biggest issue the bar is facing now is the restaurant restrictions imposed by Washington Mayor Muriel Bowser.

  “It’s just kind of crippling restaurants now,” he told The Epoch Times. “They are still keeping us at 25 percent when other states have lifted outdoor masks and Virginia is going back to bar seating.”

  “I wish she would open it up,” he said. “A bunch of bars have sent her letters recommending opening back up, but she’s just not budging right now.”

  St. Clair noted that smaller restaurants were hurt much harder than corporate restaurants or chains. He described how for the longest time, their restaurants would just have one manager and one bartender doing everything.

  Emel Akan, Cara Ding, and Lynn Hackman contributed to this report 

  Tyler Durden
  Wed, 05/05/2021 – 21:30

• Bond Shorts Shake-Out Paves Way For Higher Yields In May
  Bond Shorts Shake-Out Paves Way For Higher Yields In May

  Authored by Anchalee Worrachate. Bloomberg Reports and Markets Live Commentator

  Last month’s bull run in bonds despite strong economic data may not continue after short positions were greatly reduced and seasonal demand from Japanese buyers dissipated. This means there is no barrier for yields to move higher if data continues to surprise to the upside.

  

  Last month’s rally that pushed 10-year Treasury yields lower by as much as 20 basis points was driven partly by demand from Japanese investors such as pension funds switching from foreign stocks into foreign bonds in April, the first month of their fiscal year.

  Japanese holders had purchased $30 billion of overseas bonds as of April 23, the most since November. That re-balancing is likely to have completed.

  

  There was also talk of buying from momentum-based investors such as CTAs. This means the market is probably no longer very short, confirmed by proprietary indicators from major market players including Jefferies and JPMorgan.

  With bond underweights’ froth shaken off, data is likely to drive yields. The re-opening of the economy, supply constraints, pent-up consumer demand, excess savings and base effects should boost growth and inflation numbers in the near term. No wonder few analysts who contribute to Bloomberg yield forecasts revised their estimates lower in April. In fact, they boosted them, now expecting 10-year Treasury yields to be at 1.71% by the end of 2Q.

  Tyler Durden
  Wed, 05/05/2021 – 21:10

• CIA Embraces Left-Wing Ideology, Leftists Deny That This Is Happening
  CIA Embraces Left-Wing Ideology, Leftists Deny That This Is Happening

  Authored by Michael Tracy via mtracey.substack.com,

  In a mind-blowing marketing video first published on March 25, but which had escaped widespread notice until recent days, the CIA enthusiastically endorsed several key tenets of what has now indisputably become a hegemonic left/liberal ideological and rhetorical construct:

  “I am a woman of color,” the video’s protagonist, an unnamed CIA officer, triumphantly proclaims. “I am a cisgender millennial who’s been diagnosed with generalized anxiety disorder. I am intersectional, but my existence is not a box-checking exercise.” 

  She continues, “I used to struggle with imposter syndrome. But at 36, I refuse to internalize misguided patriarchal ideas of what a woman can or should be. I am tired of feeling like I’m supposed to apologize for the space I occupy.” 

  

  The video is a quick tour de force of the tropes and quirks most closely associated with contemporary “Woke Ideology,” such as: 

  • A direct reference to “intersectionality” doctrine — arguably the ideology’s core operating premise, taken to mean that a broad range of identity-based oppressions “intersect” and must be overturned

  • Invocation of the term “cisgender,” which is intended to signify the CIA’s inclusiveness of non-gender normative people, i.e. Trans

  • A denunciation of “patriarchy,” one of the most abhorred identity-based systems of oppression

  • Weird pride in one’s self-reported diagnosis of mental illness, as though it’s just another identity trait to be advertised and embraced, rather than a debilitating ailment to be cured

  • The now-ubiquitous use of the noun “space” in reference not to any physical location, but rather to the vague metaphysical force one purportedly brings to bear in life… or something like that. (“Know your worth. Command your space,” the woman further adds) 

  “Woke Ideology” is an imprecise, amorphous term for a wide-ranging set of beliefs and practices; adherents to the ideology will often deny that such a thing even exists. And yet, everyone who hasn’t been living under a rock knows approximately what the term means, recognizes the rhetorical style by which it is expressed, and immediately understands that this video is an instantiation of it. Sort of like how one can identify instantiations of “communism” or “libertarianism” notwithstanding the perpetual debates about the precise definition of those ideological designations. 

  While the video was produced by the CIA, it could’ve just as easily been produced by any Fortune 500 company or foundation-funded activist organization, all of which are now reading from more-or-less the same script. 

  The CIA video is actually just one installment in a running series called “Humans of the CIA,” a title possibly intended to be reminiscent of the Humans of New York social media craze, wherein ordinary citizens are “humanized” with schmaltzy and touchingly relatable stories. Just as the CIA has at least attempted to do with this series.

  Another “Humans of the CIA” video features a man narrating his Journey™ with the following quote: “Growing up gay in a small Southern town, I was lucky to have a wonderful and accepting family. I always struggled with the idea that I might not be able to discuss my personal life at work. Imagine my surprise when I was taking my oath at CIA, and I noticed a rainbow on then-director Brennan’s lanyard.”

  

  “Inclusion is a core value here,” the man who Grew Up Gay continues. “Officers from the top down work hard to ensure that every single person — whatever their gender, gender identity, race, disability, or sexual orientation — can bring their entire self to work every day.”

  John Brennan, the former CIA Director under Barack Obama (and a main character in the CIA-generated Trump/Russia saga) happens to feature in both of these videos as a man who seeks to ensure that CIA agents can “bring their entire self to work every day,” as opposed to only part of their selves, like just a few limbs. There he is, smiling alongside the Latina Woman as a symbol of CIA leadership’s commitment to equity and inclusion. Also making a cameo appearance is one of Brennan’s successors, Gina Haspel, whose appointment was heralded by the Trump Administration as a victory for “women’s empowerment.” Clearly, there’s nothing partisan about the Agency’s newfound passionate devotion to these identity-related values!

  

  Though it’s possible that the CIA marketing department’s zeal to adopt this lingo intensified with the onset of a new Democratic administration, the PR scheme appears to have predated the inauguration of Joe Biden. On January 4, 2021, a video was posted in which another unnamed agent touts his experience as a “chief of corporate strategy and education for diversity and inclusion” as wonderful preparation for a career in the CIA. 

  One struggles to imagine Donald Trump personally authorizing such a marketing campaign (although, who knows). Either way, the CIA’s role in left/liberal political activism reached a certain crescendo under the presidency of Trump. Brennan was personally integral in launching the narrative that Trump had “colluded” with the Russian government in order to subvert American democracy, and this narrative became an object of furious fixation on the liberal/left — in part due to Brennan’s constant agitation on Twitter and his perch in corporate media: 

  Donald Trump’s press conference performance in Helsinki rises to & exceeds the threshold of “high crimes & misdemeanors.” It was nothing short of treasonous. Not only were Trump’s comments imbecilic, he is wholly in the pocket of Putin. Republican Patriots: Where are you???

  — John O. Brennan (@JohnBrennan) July 16, 2018

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  (For anyone who denies that segments of “the left” were invested in the Trump/Russia narrative, please take a look at the organizations which sponsored rallies in defense of Special Counsel Robert Mueller throughout 2017 and 2018. They include the Working Families Party, Progressive Democrats of America, People for the American Way, Indivisible, and others. It wasn’t just wishy-washy “liberals” or “centrists” doing this.) 

  So, the CIA’s latest rhetorical overture could be understood as a continuation of the trend whereby the CIA’s prerogatives increasingly align with the prerogatives of the foundation-funded left/liberal nonprofit complex and activist class. Perhaps not coincidentally, former (or “former”) CIA agents comprised a significant share of Democrats’ incoming freshmen when the Party won control of the House of Representatives in 2018.

  Whenever they are confronted with the reality that their rhetorical stylings are being aped across the entire country’s power centers, now including the Intelligence Community, left-wing activists and journalists tend to angrily disclaim any culpability. The CIA’s decision to institutionally pronounce itself a wellspring of “intersectionality,” they’ll insist, is all fake and cynical co-optation. 

  However, this isn’t so much a “co-optation” as it is a natural evolution of Woke Ideology’s imperatives. The CIA can easily adopt something approximating an “intersectional” attitude toward racial, gender, gender identity-related oppressions and continue on with its ordinary mission. In fact, the adoption of this rhetoric could enhance its mission by strengthening its domestic cultural cachet. Say John Brennan is a true believer in intersectionality doctrine — which definitely is not out of the question — and truly believes the CIA can help carry out its goals. What then?

  Asserting some discontinuity between these concepts’ newfound universal popularity and left-wing activism makes no sense. Is there any more potent left-wing belief in circulation at the moment than that of “intersectional” oppressions, and their all-pervasive, defining influence on American life? All the CIA is doing is signaling its eagerness to partake in the ideological project of dismantling these alleged oppressions. In a way, this is a true victory for the Activist Left — the potency of whose beliefs are gaining purchase at a spellbinding pace, probably never more rapidly than in the past year.

  But instead of interrogating why it is that the rhetorical and ideological paradigm they’ve relentlessly promoted fits so easily within the country’s most powerful institutions, from Wall Street banks to the Big Tech monopolies to the CIA, left-wing activists and journalists will often petulantly change the subject. After I commented on the “Woke CIA” video yesterday via Twitter, hardcore radical Rage Against the Machine frontman Tom Morello came out of nowhere to accuse me of denying the “evils” of past CIA actions — such as assassinations and coups — and acting like the “real problem” with the CIA is their sudden practice of distributing so-called “woke pamphlets.”

  I’m reading a very illuminating book right now (not a pamphlet) that details numerous largely-forgotten brutal CIA transgressions, such as a covert 1958 mission which resulted in the bombing of a market and a church on Ambon Island, Indonesia, obliterating civilians. Anyone unfamiliar with this and other chapters in CIA history should “educate” themselves, and perhaps that will help them understand what the boldly subversive left-wing guitar player evidently doesn’t — which is that “Woke Ideology” is perfectly compatible with the CIA’s institutional prerogative to further entrench its own power. 

  That history makes it doubly absurd for liberals (and, albeit more tacitly, leftists) to have been so tolerant of CIA interventions into domestic political affairs because their short-term political objectives (disabling and ousting Trump) happened to align. Now, they seem angrier with those who point out the self-evident absurdity of this CIA marketing tactic than with the tactic itself. Maybe that’s because they’ve been prime movers in creating the political conditions under which adopting such tactics is considered shrewd.

  (Last summer Morello professed himself a huge fan of Robin DiAngelo’s White Fragility, one of the worst books ever written and a main source of the insane “anti-racist” precepts being adopted across corporate America. So that gives some insight into where he’s coming from.)

  Liberals and leftists have to constantly run around disclaiming that their beliefs, aesthetics, and speech codes have become hegemonic because posturing as beleaguered, noble outsiders is fundamental to their self-conception. As one Twitter commenter put it to me, “My view is that the CIA has looked at the beliefs of those coming out of elite schools and decided this is how they have to pitch to them.” Well… yeah.

  Many don’t find it interesting or worthy of comment that ideological prescriptions and rhetorical formulations once largely relegated to Tumblr and obscure academic circles have migrated to the highest levels of the US intelligence apparatus within a matter of years. They should feel free to keep screeching into the void online, while others attempt to critically evaluate this culture-upheaving phenomenon.

  Tyler Durden
  Wed, 05/05/2021 – 20:50

• How Bezos Got Revenge Against The Tabloids For Exposing His Relationship With Lauren Sanchez
  How Bezos Got Revenge Against The Tabloids For Exposing His Relationship With Lauren Sanchez

  As Bill and Melinda Gates divorce shocks corporate America, even capturing the attention of main street given their status as a preeminent global power couple, many observers have been looking for parallels between the Gates split and the “de-coupling” of Jeff and MacKenzie Bezos. Ultimately, MacKenzie agreed to walk with $38 billion, the biggest divorce settlement ever. It’s widely expected that Melinda Gates could walk away with even more.

  

  As the world scrutinizes the Gates situation for similarities and differences with the Bezos split as (however the couple’s assets are divided could have an impact on the share price of numerous companies) Bloomberg on Wednesday published an excerpt from a new book by Brad Stone, the tech writer and author known for his coverage of Amazon.

  In his new book, Stone reminds the world just how dramatic the Bezos divorce saga was. Almost from the beginning, tabloid stories about Bezos’ relationship with Lauren Sanchez, triggered a PR battle that pitted Bezos against a suite of adversaries, including President Trump, National Enquirer publisher AMI, and the Saudi Royal Family (and Crown Prince Mohammad bin Salman) who were miffed about The Bezos-owned Washington Post’s coverage of the killing of Jamal Khashoggi, a former WaPo opinion contributor.

  But as Stone reports, while Bezos came out on top in the affair, successfully portraying himself as the victim of a lurid plot to embarrass him by exposing his personal life, he largely has only himself to blame for how it all started.

  The Bloomberg excerpt starts with Bezos addressing the tabloid reports about his divorce and relationship with Sanchez. As has been previously reported, Bezos and his wife grew apart when he started attending glitzy Hollywood events. Sanchez, the wife of a prominent venture capitalist, was more than willing to accompany Bezos on the red carpet. One source described her as “basically the opposite of MacKenzie”.

  Now, facing Amazon’s leadership group, the S-team, Bezos addressed the elephant in the room. “The story is completely wrong and out of order,” he said. “MacKenzie and I have had good, healthy, adult conversations about it. She is fine. The kids are fine. The media is having a field day.” Then he tried to refocus the conversation on the matter at hand: personnel projections for the current year. “All of this is very distracting, so thank you for being focused on the business,” he said.

  News of the affair came as “a shock” to many Amazon executives. But some couldn’t help but wonder about his motivations when he started pushing the board to consider a proposal to introduce a new class of shares that would help Bezos amplify his control of the company, something that would help him cement his dominance of the board even after giving up some of his stake.

  By 2018, a year before the divorce, Bezos and Sanchez were seeing each other more or less openly. Bezos would occasionally be seen squirering Sanchez to the Washington Post’s printing press, or to visits at Amazon headquarters in Seattle, or elsewhere around his vast empire.

  At some point, Bezos grew comfortable “sexting” with Sanchez, she was, unbeknownst to him, sharing his sexts and some of his texts with her brother, Michael Sanchez, who would later leak them to tabloids and emerge as one of Bezos’ chief antagonists in the drama, along with President Trump, the Saudi Royal Family (chiefly Crown Prince MbS) and the National Enquirer.

  In the end, Sanchez sold out his sister and her boyfriend to AMI, the publisher of the National Enquirer and other tabloids, for a $200,000 payout, among the highest sums ever paid by the company for exclusive celebrity photos.

  Even after paying, AMI sat on the story for weeks as it mulled whether publishing would be a smart move for the business. The company had just inked a non-prosecution agreement for killing negative stories about President Trump during the campaign, and the prospect of being sued by the world’s richest man made AMI publisher David Pecker extremely nervous, even as he praised a draft of the story as the “best piece of journalism” the magazine had ever published.

  Sanchez helped the Enquirer shape the story for months.

  For the rest of that fall, the Enquirer worked on the story with Michael Sanchez’s help. He emailed the paper more photographs and text messages and tipped off editors to the couple’s travel plans. When he had dinner with Bezos and his sister at the Felix Trattoria restaurant in Venice, Calif., on Nov. 30, two reporters were stationed at tables nearby as photographers clicked away surreptitiously. On the promised explicit selfie, though, Sanchez seemed to equivocate. He arranged to share it with Howard in L.A. in early November, then canceled the meeting. A few weeks later, on Nov. 21, after Enquirer editors kept hounding him, he finally agreed to show it to Simpson while Howard and Robertson watched via FaceTime from New York.

  Amusingly, he has developed a detailed rationalization for why none of this constitutes “selling out” his sister – and that by cooperating with the tabloids, he was actually helping Bezos,

  None of this, Sanchez claims, was a betrayal of his sister. She and Bezos were conducting their relationship out in the open, and it was only a matter of time before their families and the larger world discovered it. “Everything I did protected Jeff, Lauren, and my family,” Sanchez later said in an email. “I would never sell out anyone.” He also believed, naively, that his source agreement with AMI precluded the media company from using the most embarrassing material he had provided them.

  On one issue, at least, it appears that Sanchez didn’t betray his sister. He later told FBI investigators that he never actually had an explicit photograph of Bezos in his possession. In the FaceTime meeting on Nov. 21, Sanchez didn’t show a picture of Bezos at all. It was a random photograph of male genitalia that he’d captured from an escort website called Rent.Men.

  According to Bloomberg, the rumored Bezos “dick pick” is actually a fraud. As for the involvement of Saudi Arabia and Trump, we already know that MbS was spying on Bezos after hacking his phone with a phishing text. But while the National Enquirer did try to pressure Bezos to make a statement saying their coverage wasn’t politically motivated, any links to Saudi Arabia were murky, at best. It all culminated with Bezos shocking Medium post, published in February 2019, where he shared copies of his correspondence with the Enquirer. This forced the tabloid to back down since it raised the possibility of political and legal blowback.

  Bloomberg’s excerpt ends with a glimpse of the megayacht that many suspect is being built outside Rotterdam for Bezos.

  Employees now had even more reasons to wonder. What did the future hold for their founder? At least part of the answer to that could be found in the shipyards of the Dutch custom yacht builder Oceanco. There, outside Rotterdam, a new creation was secretly taking shape: a 127-meter-long, three-mast schooner about which practically nothing was known, even in the whispering confines of luxury boat builders—except that upon completion, it will be one of the finest sailing yachts in existence. Oceanco was also building Bezos an accompanying support yacht, which had been expressly commissioned and designed to include—you guessed it—a helipad.

  Tyler Durden
  Wed, 05/05/2021 – 20:30

• BlackRock ESG Hypocrisy Exposed: Firm Backs Palm Oil Producer With History Of Abuses
  BlackRock ESG Hypocrisy Exposed: Firm Backs Palm Oil Producer With History Of Abuses

  BlackRock made a big stink about Warren Buffett’s resistance to a pair of shareholder proposals to mandate ESG and diversity reporting standards across Berkshire Hathaway’s vast business holdings. Buffett ultimately prevailed, as he has in past years, but the backlash this year was more vocal, with a team of Reuters reporters writing that Buffett’s ESG “snub” “risks alienating Wall Street.”

  While some insist that ESG is the way of the future, others contend that it’s more of a fad. Some purveyors of tradeable carbon credits have been accused of selling “worthless” offsets, revealing that the system is actually pretty complicated, and auditing whether these credits are actually behaving as advertised could be a resource-intense endeavor.

  But while BlackRock makes a fuss about reporting standards that, more likely than not, would have little real-world impact, a report published Wednesday by the Financial Times laid bare the ETF giant’s hypocrisy when it comes to enforcing its new ESG “standards”.

  

  The world’s biggest asset manager, with nearly $9 trillion in assets, has been accused of being inconsistent for supporting a shareholder protest against Procter & Gamble’s sourcing of palm oil from an Indonesian company called Astra Agro Lestari, a subsidiary of the Astra International conglomerate based in Indonesia. The company has been accused of stealing land from local farmers, and other ESG abuses. The company’s product enters the US supply chain via a relationship with Singapore-based Wilmar International, which P&G has since asked to investigate its suppliers.

  But as it happens, BlackRock owns a stake both in Astra International, as well as a small direct stake in its subsidiary. And what has BlackRock done to push reform? Nothing substantial, activists conclude.

  Rights groups and sustainable investment advocates have now turned their attention to BlackRock, which is a significant shareholder in Astra International. According to Bloomberg data, the US fund group is Astra International’s third-largest investor, with a holding worth almost $350m. It also has a small direct holding in Astra Agro Lestari.

  Green finance groups said BlackRock had been inconsistent in its approach to ESG considerations by not openly pressing Astra over its environmental record. The $8.7tn fund house has come under increasing pressure to live up to its 2020 pledges regarding ESG and sustainable investing.

  “It’s incoherent that BlackRock is pushing P&G to clean up its value chain while simultaneously continuing to profit from this same value chain,” said Lara Cuvelier, sustainable investments campaigner at Reclaim Finance, an investor lobby group.

  BlackRock should “make time-bound and detailed requests to the company…and commit to divesting if the requisite changes are not forthcoming,” Cuvelier added.

  BlackRock has long argued that behind-the-scenes conversations with board directors will drive change, but critics argue that companies often only listen to the “ultimate sanction” of divestment.

  Astra International is majority-owned by Hong Kong trading house Jardine Matheson through its Singapore-listed unit, Jardine Cycle and Carriage. BlackRock’s holdings, which have gradually increased over nine years, are mostly held through mutual funds and ETFs. And that’s the problem. While the company can vote against board proposals, BR’s index investing model makes it difficult to threaten divestiture, which activists say is typically the only threat that ESG abusers will take seriously.

  BlackRock said it was “well aware” of the concerns and was “continuously engaged” with companies over sustainability concerns. “Where we believe companies are not moving with sufficient speed and urgency, our most frequent course of action will be to hold directors accountable by voting against their re-election,” it said. At Astra International’s 2020 annual meeting, BlackRock voted against a motion regarding board changes and director remuneration over disclosure issues.

  Circling back to the Berkshire Hathaway, Buffett said over the weekend that he opposed the ESG measures (one of which would have required annual reports about what Berkshire companies were doing to confront climate change, as well as updates on “diversity and inclusion”) because he doesn’t like making “moral judgments” on businesses.

  Buffett isn’t alone: ValueAct’s Jeff Ubben, who once praised BlackRock for its commitment to make ESG and fighting a climate change a priority, recently criticized the fund giant’s measures as misguided.

  Tyler Durden
  Wed, 05/05/2021 – 20:10

• Arkansas Boots Critical Race Theory From State Agency Educational Materials
  Arkansas Boots Critical Race Theory From State Agency Educational Materials

  Arkansas has joined the growing opposition to Critical Race Theory – which posits that white supremacy and systemic racism is embedded in every facet of American life, must be actively corrected by re-engineering society, and anyone who denies this is guilty of ‘white complicity’ and racist themselves.

  

  As Isabel van Brugen of the Epoch Times recently described it, “CRT has gradually proliferated in recent decades through academia, government structures, school systems, and the corporate world. It redefines human history as a struggle between the “oppressors” (white people) and the “oppressed” (everybody else), similarly to Marxism’s reduction of history to a struggle between the “bourgeois” and the “proletariat.” It labels institutions that emerged in majority-white societies as racist and “white supremacist.”

  

  On Monday, Arkansas Gov. Asa Hutchinson (R) allowed legislation (SB 627) to become law – without endorsing or vetoing it – which effectively ends Critical Race Theory education within state agencies. The bill is described as “an act to prohibit the propagation of divisive concepts” and “to review state entity training materials.”

  BREAKING: Arkansas passes legislation banning critical race theory indoctrination in public agencies. The bill will prohibit the state government from promoting race essentialism, collective guilt, and neo-segregation.

  We are fearless; we are relentless; we are inevitable. pic.twitter.com/pj6Bu1Rvx7

  — Christopher F. Rufo ⚔️ (@realchrisrufo) May 4, 2021

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  The law, which takes effect in 2022, does not apply to local governments, law enforcement training, or public education according to the Associated Press.

  Arkansas joins Oaklahoma, Idaho, Florida and Texas in various forms of pushback against CRT – with Oklahoma’s House voting last Thursday to ban public schools and universities from teaching the concept, and Texas GOP legislators, who introduced a bill do the same. –

  Critical Race Theory is being used to indoctrinate our children and divide America. State-sanctioned racism must not and will not be tolerated. #AmerciaFirst #CriticalRaceTheory https://t.co/xxd3kTPUlG

  — Arizona Republican Party (@AZGOP) May 4, 2021

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  Critics of Critical Race Theory have pushed back – insisting that is teaches white children to hate themselves and causes racism.

  Critical Race Theory is teaching our kids to be racist and it’s teaching many to hate how they were born. We’ll flip more school boards and local elections from Democrat to Republican by fighting this issue than we will by fighting almost any other issue. We must fight to ban it!

  — Robby Starbuck (@robbystarbuck) May 3, 2021

  More:

  Critical Race Theory is an indoctrination of kids that has no business in America’s classrooms. This isn’t teaching children how to combat racism & discrimination. It’s a gross attempt to devalue, divide & dumb down our children. https://t.co/V2sTY1xqkw

  — Lee Zeldin (@RepLeeZeldin) May 1, 2021

  Seattle Public Schools tells teachers that the education system is guilty of “spirit murder” against black children and that white teachers must “bankrupt [their] privilege in acknowledgement of [their] thieved inheritance.” https://t.co/nsgyrbEtYw

  — Christopher F. Rufo ⚔️ (@realchrisrufo) April 27, 2021

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  A Cupertino, California, elementary school forces third-graders to deconstruct their racial and sexual identities, then rank themselves according to their “power and privilege.” They separate the eight-year-old children into oppressors and oppressed.https://t.co/me7APT6KiB

  — Christopher F. Rufo ⚔️ (@realchrisrufo) April 27, 2021

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  A Philadelphia elementary school forces fifth-graders to celebrate “Black communism” and simulate a Black Power rally to “free Angela Davis” from prison. At this school, 87 percent of students will fail to achieve basic literacy by graduation.https://t.co/AWcnk8cGVL

  — Christopher F. Rufo ⚔️ (@realchrisrufo) April 27, 2021

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  Buffalo Public Schools teaches students that “all white people” perpetuate systemic racism and forces kindergarteners to watch a video of dead black children warning them about “racist police and state-sanctioned violence” who might kill them at any time. https://t.co/lraff9C36B

  — Christopher F. Rufo ⚔️ (@realchrisrufo) April 27, 2021

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  The California Department of Education passed an “ethnic studies” curriculum that calls for the “decolonization” of American society and has students chant to the Aztec god of human sacrifice. The solution, according to one author, is “countergenocide.”https://t.co/4OxSrBwWzb

  — Christopher F. Rufo ⚔️ (@realchrisrufo) April 27, 2021

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  Santa Clara County Office of Education denounces the United States as a “parasitic system” based on the “invasion” of “white male settlers” and encourages teachers to “cash in on kids’ inherent empathy” in order to recruit them into political activism.https://t.co/N29tlJi9Zy

  — Christopher F. Rufo ⚔️ (@realchrisrufo) April 27, 2021

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  Tyler Durden
  Wed, 05/05/2021 – 19:50

• '50 Cent' Flees New York For Texas After Complaining About COVID Restrictions, High Taxes
  ’50 Cent’ Flees New York For Texas After Complaining About COVID Restrictions, High Taxes

  Authored by Paul Joseph Watson via Summit News,

  Rapper Curtis ’50 Cent’ Jackson has joined the wave of Americans fleeing New York, announcing that he had moved to Texas after complaining about draconian COVID-19 restrictions and high taxes.

  

  “I love New York, but I live in Houston now,” 50 Cent told his social media followers. “I’ll explain later.”

  I Love NY, but i live in Houston now i’ll explain later.🚦Green Light Gang 💣BOOM💥 pic.twitter.com/z6FAkAYwB4

  — 50cent (@50cent) May 4, 2021

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  However, the hip hop star had already made it clear why he was planning to leave the Big Apple in March by responding to Texas Governor Greg Abbott’s vow to lift mask mandates and other lockdown restrictions with the remark, “I’m headed to Texas fuck this.”

   

   

   

   

  View this post on Instagram

   

   

   

   

   

   

   

   

   

   

   

  A post shared by 50 Cent (@50cent)

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  The actor and producer is also notorious for flouting COVID rules, having hosted a huge party in an aircraft hangar in St. Petersburg, Florida back in February, putting himself at risk of a massive fine.

  In October last year, Jackson also said he was voting for Trump in an attempt to avoid Joe Biden’s punishing tax policies, which would have taken 62% of his earnings.

  👀WHAT THE F*CK! (VOTE ForTRUMP) IM OUT, 🏃‍♂️💨F*CK NEW YORK The KNICKS never win anyway. 🤷🏽‍♂️I don’t care Trump doesn’t like black people 62% are you out of ya fucking mind. 😤 pic.twitter.com/uZu02k2Dlz

  — 50cent (@50cent) October 19, 2020

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  “I don’t care [if] Trump doesn’t like black people,” 50 Cent said. “62% – are you out of ya f**king mind?”

  50 Cent follows Elon Musk and Joe Rogan in fleeing from a liberal coastal city to low tax Texas, but many ordinary Americans are also making the move.

  A survey conducted in September 2020 found that two in five New Yorkers wanted to leave the city, with the reasons cited being crime and public safety as well as the anemic post-COVID economic recovery.

  Moving trucks became a common sight on the streets, with 2020 showing a 44% increase in home sales in the suburbs compared to the same time period in 2019 as people flee for bigger homes in safer areas.

  As we highlighted yesterday, judging by the supposedly ‘busy’ rush hour traffic in Manhattan, it may take years for New York to recover from draconian lockdown measures.

  *  *  *

  Brand new merch now available! Get it at https://www.pjwshop.com/

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  In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Also, I urgently need your financial support here.

  Tyler Durden
  Wed, 05/05/2021 – 19:30

• Bill Gates Transfers $1.8 Billion In Stocks To Melinda Amid Divorce
  Bill Gates Transfers $1.8 Billion In Stocks To Melinda Amid Divorce

  As reporters look for clues about how Bill and Melinda Gates plan to divide up their fortune (as a reminder, here’s everything we have learned so far) focus is shifting to Cascade, the Gates family office set up with the proceeds from selling Gates’ Microsoft shares, as well as his investment dividends. The family office has long been seen as a piggy bank for the Bill and Melinda Gates foundation.

  

  And according to an SEC filing, Cascade transferred $1.8 billion (14.1MM shares) in Canadian National Railway stock to Melinda French Gates on May 3. Cascade also transferred 2.94 million shares in AutoNation, worth $309M.

  The move makes Ms. Gates the sixth-biggest shareholder in CN, Canada’s largest railway, however, Cascade (controlled by Bill Gates) remains thee largest shareholder, with more than 101M shares worth roughly $11 billion)

  CN is the biggest investment held by Cascade, representing 24.4% of its holdings. Waste disposal company Republic Services is Cascade’s second-largest stake at 23.9%, while heavy equipment make Deere and  is third, at 18%.

  Through Cascade, Gates has interests in real estate, energy and hospitality as well as stakes in dozens of public companies, including Deere & Co. and Republic Services. The couple are also among the largest landowners in America.

  Other investments Gates owners via Cascade include:

  • Berkshire Hathaway Class B $1.69 billion
  • AutoNation $1.9 Billion
  • Ecolab Inc. $6.9 Billion
  • Liberty Global PLC $235.6 Million
  • Waste Management $2.3 Billion

  Gates lists himself as the sole member of Cascade Investment and makes clear that the stocks that he and Melinda own jointly through the Bill & Melinda Gates Foundation Trust are completely separate from his direct ownership of what’s in his family office hedge fund, Cascade Investment, which operates out of Kirkland, Washington.

  We’re still waiting for more clues about the Gates’ “separation agreement”, as well as any settlement talks.

  Tyler Durden
  Wed, 05/05/2021 – 19:10