• New NORAD Warfare Strategies And Canada's Role In The Great Game Revisited
  New NORAD Warfare Strategies And Canada’s Role In The Great Game Revisited

  Authored by Matthew Ehret via The Strategic Culture Foundation,

  As relations between the USA and Russia continue to fall ever deeper into the abyss, and as China’s Belt and Road Initiative continues to evolve deep into the Eurasian Arctic via the Polar Silk Road, a new era of potential for cooperation as well as nuclear war awaits humanity. The decisions made over the coming months will determine which of those two opposing destinies are selected.

  

  For the time being, things are looking bad.

  On February 5, 2021 the Canadian press was lit abuzz with the headline NORAD Modernization to Dominate Agenda of Canada-U.S. Defence Relations citing various military think tanks and ivory tower game theorists who should be kept as far from any actual policy making circles if the world is going to survive beyond the coming decade.

  Citing the recent Biden-Trudeau meeting which featured a long discussion about Russian-Chinese aggression and Arctic defense, Andrea Charron (head of Manitoba’s Centre for Defence and Security Studies) states:

  “Where as before the primary threat during the Cold War was one peer competitor, who wasn’t using greyzone tactics, or at least not to the same extent as now, we now have two peer competitors to the U.S. – China and Russia – and they are using greyzone tactics, and they’re developing more sophisticated weapons like hypersonic glide vehicle weapons,”

  The idea being conveyed here is that Russian hypersonic air launched Kinzhal ballistic missiles will soon be stationed in Russia’s north which should cause NORAD to be completely revamped.

  Of course, these academics are quick to ignore all evidence of NATO encirclement of Russia and China under the insane “full spectrum dominance” game plan which certain geopoliticians believe will make nuclear war somehow winnable with 21st century technology.

  In the face of this supposed Russian and Chinese aggression, NATO-philes are screeching for Canada’s speedy entry into the NORAD Ballistic Missile shield which it abandoned over 15 years ago.

  Citing the 2020 Wilson Center report co-written by former NORAD chief Terrance O’Shaughnessy, and published by the Canada Institute, artificial intelligence programs (“SHIELD” and “Pathfinder”) are introduced as the key to the total overhaul of Canada-USA arctic strategy. O’Shaughnessy wrote of SHIELD that “It pools this data and fuses it into a common operational picture. Then, using the latest advances in machine learning and data analysis, it scans the data for patterns that are not visible to human eyes, helping decision-makers understand adversary potential courses of action before they are executed.”

  Anyone who has read Cynthia Chung’s Dr. Strangelove’s Spoonbenders will quickly realize why using AI to pick up algorithms that would normally be missed by human analysts, and generate hair-trigger decisions to counter threats from Eurasia creates a mountain of trouble for humanity, as glitches and mis-readings of Russian/Chinese intentions can easily escalate unstoppably into a nuclear retaliation by deductive/inductive machine thinking.

  Now at this point, many onlookers might make the mistake of brushing off these obvious plans for a revamped NORAD-NATO Arctic doctrine since Canada’s military is negligible, and it is merely a “middle power” that couldn’t possible do great damage anywhere.

  It is to the person asking this question that this report was written.

  The British Great Game Past and Present

  The first factor which such a person must recognize is the nature of the British Empire as an efficient power structure dominating the world even today.

  Anyone confused about this still-existing power structure need only read Eric Zuess’ new report ‘Further Proof that the U.S. and UK are One Empire’ where the author astutely writes:

  “Although the “Special Relationship” between the United States and the United Kingdom was first announced by Winston Churchill at Fulton Missouri on 5 March 1946, in the company of an approving U.S. President Harry S. Truman, it was actually started by Cecil Rhodes in 1877 when he drew up his plan for England secretly to retake America and use it so as to preserve and expand Britain’s empire throughout the world, via the Rhodes Trust. Rhodes was the first person to think up a “U.S. empire,” but it was actually only as a tool for the preservation and extension of England’s existing empire. And Winston Churchill, as a young man at the start of the 20th Century, was an acolyte and friend of Rhodes, and was viewed by Rhodes as being one of his most promising young followers.”

  The Post-WWII Order and the Rhodes Trust Origins of NATO

  In the Post-WWII order, the important tendency for U.S.-Russian partnership which shaped the 1780 League of Armed Neutrality, Russia’s support for the union in 1863 and the U.S.-Russia friendship that made WWII a success was overthrown.

  This historic friendship was directly targeted by forces loyal to the British Empire’s grand strategy for global Anglo-Saxon Dominance exemplified by Sir Winston Churchill’s unveiling of the Cold War during his March 5, 1946 “Iron Curtain” speech in Fulton Missouri and the follow-up creation of NATO in 1949 as a military bloc which would operate independently of the UN Security Council.

  An under-appreciated role in the formation of NATO and international dis-order more generally during these Cold War years is the British Deep State of Canada and due to the neglect of this fact, a few words should be said about this problem here and now.

  While official narratives have tried to spin NATO’s origins as the effect of an agreement amongst all western powers, the fact is that British intelligence operations are the true source, with British-trained Rhodes Scholar Escott Reid laying out the thesis for a supranational military body outside of the influence of the UN Security Council as early as August 1947. It was another two years before the design would materialize as an anti-Soviet military coalition based on the binding agreement that if one member enters a conflict, then all members must so enter.

  At a Round Table-directed Conference on August 13, 1947, Reid, an ardent globalist and co-founder of the Canadian branch of the London Fabian Society “recommended that the countries of the North Atlantic band together, under the leadership of the United States, to form ‘a new regional security organization’ to deter Soviet expansion.” He went on to state “In such an organization each member state could accept a binding obligation to pool the whole of its economic and military resources with those of the other members if any power should be found to have committed aggression against any one of the members.”

  The name of the British Imperial game has always been “balance of power”. Manipulate society as a single closed system by monopolizing resources, and then manage the diminishing rates of return by creating conflict between potential allies. This process can be seen clearly today behind the conflicts manipulated in the South China Sea between China and Philippines, the Diaoyu-Senkaku Islands between China and Japan, wars for oil in the Middle East and the new tension being created in the Arctic. The opposing, typically “American System of Political Economy” has always disobeyed this game of “balancing a fixed system” by introducing creative change.

  The American System on the other hand, has traditionally located its point of emphasis primarily upon creating new resources, through inventions and discoveries, rather than simply looting, consuming, and distributing what already exists. This system formulated by Benjamin Franklin, Alexander Hamilton, John Quincy Adams, Abraham Lincoln and Franklin Roosevelt proved that more energy could always be produced than was consumed IF discoveries and inventions were cultivated in a creatively developing society, shaped by concrete national intentions and bold visionary goals to increase the powers of production of society. The American System is thus understood as an open-system founded upon win-win cooperation while the British System is based on a closed-system worldview under a win-lose operating system where the elite managing nations from above dictate the wars, and diminishing rates of returns to a depopulated society.

  Since the British system implies that the world resources are limited, then the stronger will necessarily have to loot the weaker… Hence, the system is also “zero-sum”.

  Throughout the Cold War, Canada’s role as a “middle power” was defined most succinctly by Fabian Society asset Pierre Elliot Trudeau, who, when asked what his foreign policy was, explained simply: “to create counterweights”. That is, when the “geopolitical center of gravity” moves towards “capitalist America”, then Canada must move towards befriending “socialist” Russia and its allies. When the center of gravity moves towards a Russian edge within the Great Game, then do the opposite. Although the Cold War “officially” ended in 1991, the imperial Great Game never did, and Canada’s role as a British chess piece continues unabated to the present.

  The future battleground which Canada is being prepared to set up is to be found in the Arctic.

  The Strategy of the Arctic in History

  The struggle for Arctic dominance is currently being defined by the rules of British geopolitics. The above map features the layout of the arctic with dotted lines defining areas still not under the control of any particular nation.

  

  Today, the northern Arctic is among the last unexplored and undeveloped frontiers on the earth. With an area over 14 million square kilometers, this area is rich in a variety of mineral and gas deposits containing approximately 90 billion barrels of oil and 1670 trillion cubic feet of natural gas. This abundance is complicated by the fact that its borders are highly undefined, overlapping eight major nations with Canada and Russia as the dominant claimants.

  In recent history, American System methods were attempted in the opening up of the Arctic for mutual development and cooperation beginning with the sale of Alaska to America in 1867 by the “American system Czar” Alexander II to the allies of Abraham Lincoln. These same forces orchestrated the construction of the Trans-Siberian railway and heavily promoted the Bering Strait Rail tunnel connecting the two great continents which arose by the turn of the century. Early designs for the Russian-American rail connection were published in 1893 by Governor William Gilpin of Colorado which gained renewed support by the soon-to-be-deposed Czar Nicholas II in 1905. Russia again revived this project in 2011.

  

  Throughout the 20th Century, Russia has developed a far greater aptitude at creating corridors of permanent habitation in the Arctic relative to their North American counterparts which are expanding at a fast pace under Putin’s Eastern vision and China’s Polar Silk Road. Due to the post WWII Cold War dynamic of tension, much that could have been accomplished, had resources not been so badly drained by Cold War militarization, was not.

  The beacon of light during this Cold Dark process was to be found in Canada’s 13th Prime Minister John Diefenbaker, whose Northern Vision, unveiled in 1958, hinged upon his $78 million allocation for funds to construct a permanent domed nuclear-powered city in Frobisher Bay (now named Iqaluit, the capital of Nunavut), as a test case for a greater nation building program in the Arctic. When Diefenbaker was run out of office in 1963 through a British-steered operation, his vision was scrapped, and a new Arctic doctrine was artificially imposed upon Canada.

  False Polarizations Imposed onto Arctic Grand Strategy

  This new imperial Arctic doctrine was modeled around the two (anti-nation building) measures of “conservation” of fixed ecosystems and indigenous cultures on the one side, and rapacious mineral exploitation for the increasingly deregulated “global markets” on the other. Canadian examples of this operation can be seen in the Munk School of Global Affairs, the World Wildlife Fund of Canada (whose 2nd president was the CEO of Royal Dutch Shell), and their powerful affiliate, the Walter and Duncan Gordon Foundation, presided over by Pierre Trudeau’s former Principal Secretary Thomas Axworthy. Barack Gold Founder and CEO Peter Munk was one of hundreds of oil barons who acted as founding members of the 1001 Club which was created by Prince Bernhardt of the Netherlands and Prince Philip of England in order to fund the WWF in its early years. Other Canadian Deep State founding members of the 1001 Club included WWF Vice Presidents Maurice Strong and Louis Mortimer Bloomfield.

  Axworthy is a major player in the Canada 2020 machine associated with the current Liberal Party of Justin Trudeau. The overlap of major banking institutions like the Royal Bank of Canada and Scotiabank with the mineral cartels, holding companies and environmental organizations in this structure produces a very real picture that the left and the right are merely two sides of the same imperial beast.

  The role of the above interests in creating the Arctic Council in 1996 (and the later Circumpolar Business Forum) was designed to trap nations into an intellectual cage of resource exploitation under free market doctrines of zero national planning on the one side, with eco-systems management and zero national planning on the other. Now that the post-1971 world financial order is on the verge of collapse, these technocrats believe that a new replacement system will allow for national planning, but only on condition that it be directed by Malthusian technocrats and aimed at the goal of lowering the population potential of the planet. This agenda has come to be known as the Green New Deal in 2018 and since evolved into the Great Reset Agenda.

  To re-emphasize: When observed from a top-down perspective, both the “left” eco-green movement and the “right” monetarist institutions are one single thing. It is only by foolishly looking at this process from the “bottom up” that apparent differences are perceived. This is just an illusion for the credulous victims of an imperial education system who have been taught to believe their sense perceptions more than their powers of reason. The reality is that this is nothing more than British Malthusian geopolitics.

  Breaking Out of the Great Game

  The fact is that while the Atlantic economies have currently submitted to the City of London- Wall Street and Troika demands for policies of depopulation, austerity and hyperinflation, Russia and China are committed to true development. Both countries are intent on creating a unified block of win-win cooperation based upon the Shanghai Cooperation Organization (SCO), Eurasian Economic Union and BRICS and that intention is based on anti-Malthusian scientific and technological progress. The Belt and Road Initiative which now involves over 135 countries exemplifies this spirit.

  The financial system of the trans-Atlantic is collapsing and it will be reset. The only question is, will it be reset by the open system agenda advocated by Russia and China or will it be the closed system unipolar agenda promoted by sociopathic Davos creatures?

  If western societies should wish to have any claim to being morally fit to survive, then this is an optimistic power that we must re-awaken in ourselves fast. For it is only by acting on principles of scientific discovery and progress that a proper perspective can be discovered to overcome the current obstacles to our survival. That is, the discovery of what the future can and must become IF a creative change is introduced into the system.

  The only pathway to avoiding the collapse of the financial system and a thermonuclear war is to be found in imposing Natural Law vigorously upon the claimed “debts” which Wall Street, and the City of London wishes to have bailed out. The expression of this Natural Law takes the form of the restoration of Glass-Steagall laws across the trans-Atlantic economies, eliminating the $1.5 quadrillion debt bomb before it explodes and returning to the principles of national banking for all countries. Under such a reform and by joining in common interest with other nations in the Eurasian zone, a commitment to progress and security can be realized, and such poisonous agendas as the Great Reset can be avoided.

  Escaping the British two-sided trap of monetarism and ecologism means going to fusion energy, space exploration, and mining the moon for Helium-3 as China is already preparing to do. It means closing the fuel cycle, and scrapping low quality “green” energy boondoggles.

  The applications of a forward-looking space age society using fusion power, involves not only rendering imperial wars for oil and water obsolete (as energy and water will be made both incommensurably cheap and abundant relative to the fossil fuel based system now defining society’s limits), but gives mankind the tools to green deserts, build great projects, create a system of Asteroid Defense and construct the long-overdue Bering Strait Tunnel, a key link in the World Land Bridge. These are the sorts of long term projects which not only remind us of our common self interests, but as JFK described the space program in 1962, create goals which “will serve to organize and measure the best of our energies and skills”.

  Without this sort of “outside the box” thinking, it is safe to say that the current rules of the game now in place are set for total self-destruction.

  Tyler Durden
  Thu, 02/11/2021 – 00:00

• Visualizing Global Attitudes Towards The COVID-19 Vaccines
  Visualizing Global Attitudes Towards The COVID-19 Vaccines

  To vaccinate, or not to vaccinate? That is the question.

  In order to achieve herd immunity against COVID-19, some experts believe that between 70% to 80% of a population must be vaccinated.

  But, as Katie Jones of VisualCapitalist notes, attitudes towards these vaccines are undoubtedly mixed. In fact, it’s estimated that one-third of people globally have some major concerns.

  

  Using survey data from eight different countries, Global Web Index created five archetypes to help illustrate how typical attitudes towards vaccines differ depending on a range of factors, such as age, income, lifestyle, and values.

  

  Countries surveyed: United States, Germany, United Kingdom, Brazil, China, India, Japan, and Italy.

  Which segment are you most likely to fall under, according to these segments?

  Vaccine Supporters

  Which segment are you most likely to fall under, according to these segments?

  [People who say they will get the COVID-19 vaccine.]

  Out of all participants surveyed, 66% of them support the idea of getting a COVID-19 vaccine. Within this group, there is a skew towards younger people (aged 18-34) who are likely working professionals earning a high income and living in a city.

  Despite their optimism towards COVID-19 vaccines, however, one-third of vaccine supporters say they will wait to get one, due to lingering concerns regarding issues with vaccine distribution and any potential side-effects.

  Interestingly, this procrastination mindset has been seen before during the H1N1 (swine flu) pandemic when both members of the general public and healthcare workers showed low levels of vaccine acceptance due to safety concerns.

  Vaccine Hesitant

  [People who are not sure if they will get the COVID-19 vaccine.]

  The vaccine hesitant group, which is more common among cautious suburban parents, makes up 12% of the total study. They are more likely to be female, and feel anxious about the length of time spent testing vaccines and therefore require more transparency around the science.

  With that being said, this group could be easily swayed, as they are more receptive to word-of-mouth and messaging boards to get advice from their peers over any other medium.

  Vaccine Obligated

  [People who will only get the vaccine if it’s necessary for travel, school, work etc.]

  The vaccine obligated group makes up 11% of the total, and has a skew towards males aged between 16 and 24 years old.

  While this group is also concerned with potential side-effects, their responses suggesting that a vaccine may not be necessary to combat COVID-19 was above average compared to other segments in the study. They also index above average when it comes to viewing themselves as traditionalists.

  Vaccine Skeptical

  [People who won’t get the COVID-19 vaccine.]

  The vaccine skeptical group makes up another 11% of the total. However, this group is mostly female, who are aged between 45-64 and earn a lower-than-average income. They are less likely to have a college degree, and are more likely to live in a rural area.

  Along with the worry of potential side-effects, this group is generally more pessimistic about containing COVID-19 at all. Therefore a small percentage do not believe a vaccine will help tackle the global health crisis.

  With notably low trust levels, this group is one of the hardest to reach and potentially persuade. What makes them unique however, is their lack of faith in the scientific process.

  Anti-Vaxxers

  [People who will not get the vaccine, because they are against vaccines in general.]

  It is important to note that those who choose not to get a COVID-19 vaccine should not be confused with anti-vaxxers.

  Anti-vaxxers are a sub-segment of the vaccine skeptical group that makes up 1.4% of the total population. The difference is, anti-vaxxers do not believe in getting any vaccine due to safety concerns, not just not a vaccine for COVID-19.

  According to the study, anti-vaxxers tend to fall into one of two age brackets, between 16-24 years or 55-64 years old, and are typically males with lower incomes.

  Another Tool in the Arsenal Against COVID-19

  The study demonstrates that broad segments of society—regardless of their demographic or views—are at least somewhat concerned about COVID-19 vaccines becoming widely available.

  Tyler Durden
  Wed, 02/10/2021 – 23:45

• Facebook Hires Former NATO Press Officer As Its 'Intelligence Chief'
  Facebook Hires Former NATO Press Officer As Its ‘Intelligence Chief’

  Authored by Alan Macleod via MintPressNews.com,

  Ben Nimmo, a former NATO press officer and current senior fellow at the Atlantic Council, has announced Facebook has hired him to “lead global threat intelligence strategy against influence operations” and “emerging threats.” Nimmo specifically named Russia, Iran and China as potential dangers to the platform.

  His announcement was greeted with joy by several NATO officials but was not met with such enthusiasm by others. “More censorship on the way as the former NATO press officer turned Pentagon-funded ‘researcher’ who labeled real people as Russian bots and peddled disinformation to link Jeremy Corbyn to Russian active measures moves to big tech,” responded investigative journalist Max Blumenthal.

  

  Nimmo’s questionable past certainly raises questions over whether such an official having a substantial say in what 2.8 billion Facebook users worldwide see in their feeds is such a positive step for the free and open exchange of information.

  “Disinformation Agents”

  For example, in 2019, U.K. Labour Party leader Jeremy Corbyn revealed secret Conservative Party documents showing negotiations the Tory government had with the U.S. over the privatization of the National Health Service (NHS). With just days to go before the U.K. general election, the scandal could have toppled the government and brought into power the most radical antiwar, anti-establishment government in the country’s history. Corporate media went into overdrive to spin the news, and Nimmo was a key part of this, immediately announcing, without evidence, that the documents “closely resemble…a known Russian operation.” His supposedly expert conjecture allowed the story to become “Corbyn’s links to Russia” rather than “Tories privatizing the NHS in secret.” Nimmo’s work helped the Conservatives to an election victory and consigned Corbyn to the scrapheap.

  This was much to the relief of Nimmo’s Atlantic Council, who had branded Corbyn the “Kremlin’s Trojan Horse” — someone pushing Moscow’s agenda abroad. A British Army general was of a similar opinion, claiming that if Corbyn were to win the election, the military would respond. Secretary of State Mike Pompeo also said that the U.S. government was “doing its best” to prevent a radical leftist from winning power in the U.K.

  More censorship on the way as the former NATO press officer turned Pentagon-funded “researcher” who labeled real people as Russian bots and peddled disinformation to link Jeremy Corbyn to Russian active measures moves to Big Tech https://t.co/XcfGbdPJtv

  — Max Blumenthal (@MaxBlumenthal) February 7, 2021

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  Nimmo has been extremely liberal with whom he labels Russian disinformation agents. In 2018, his research identified one Twitter user, @Ian56789, as a “Kremlin troll.” In reality, the user, Ian Shilling, was a British pensioner, as Sky News was easily able to confirm, interviewing him on air and asking him the patently absurd question if he was actually a Russian bot or not. Despite clearly being a flesh and blood human, Shilling’s account was later deleted anyway.

  In the past, Nimmo has also insisted that Ruslana Boshirova was an influential Russian bot. In reality, she is an internationally known concert pianist, as one Google search would have shown. This sort of behavior does not augur well for those critical of Western foreign policy, who have faced constant harassment, suspension, or outright bans from social media.

  Pro-war Putsch

  The Atlantic Council began as an offshoot of NATO itself and maintains extremely close connections to the military alliance. It continues to receive major funding from Western governments and weapons contractors, and its board of directors is filled to the brim with senior American statespersons, such as Colin Powell, Condoleezza Rice, and Henry Kissinger. Also appearing on the board are no fewer than seven former CIA directors and a number of top military generals, such as Jim “Mad Dog” Mattis, Wesley Clark, and David Petraeus.

  In recent years, the council’s employees have penetrated deep into big tech and social media organizations. In 2018, it announced it had partnered with Facebook to aid in the curation of Facebook news feeds of users worldwide, giving it considerable power over what sort of views to highlight and which to demote. One year previously, Jessica Ashooh left the position of the council’s Deputy Director of Middle Eastern Strategy to take the position of Director of Policy at Reddit, the eighth-most visited website in the United States. However, as with many intelligence agencies, it is unclear whether one truly “leaves” the Atlantic Council.

  NATO’s Atlantic Council “analyst” @benimmo has called me an influential Russian bot.
  Influential? You bet.
  With 170 000 000 YouTube views
  and 400 000 subscribers.
  Russian? Oh well, Ukrainian-American🙄, but take it as a compliment. 😉
  Bot? Yeah. Humans can’t play like this. pic.twitter.com/pReCwBBaZ5

  — Ruslana Boshirova Альянс пианистов (@ValLisitsa) March 27, 2018

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  It is not just Russia that is in NATO’s crosshairs. Last week, the Atlantic Council published an anonymous, 26,000-word report stating that their goal for China was regime change and advising President Biden to draw a number of “red lines” around it, beyond which the U.S. would respond militarily. Meanwhile, the head of STRATCOM, Admiral Charles A. Richard, wrote that the U.S. must prepare for a potential nuclear war with Beijing.

  Greater Control

  The military escalation has been mirrored by an intensifying online propaganda war, where the U.S. has attempted to isolate China economically and stop advancing Chinese technologies such as Huawei’s 5G network, mobile phone, and semiconductor manufacturer Xiaomi, and video sharing app TikTok. Nimmo has played his part in ramping up suspicions of nefarious Chinese activity online, claiming the existence of a wide-ranging pro-Beijing bot network encouraging Americans to believe that China has handled the COVID-19 pandemic far better than the United States. That Americans might have come to that conclusion on their own appears not to have been considered.

  There is an enormous government effort to convince its population of the existence of (foreign) government efforts to manipulate their opinions online. In a massive case of projection, Western governmental organizations point the finger at their enemies, all the while securing greater access and control over the means of communication themselves, to the point where it is now difficult to distinguish where the deep state ends and the fourth estate begins.

  Nimmo’s move from NATO to NATO-aligned think tank to Facebook is just another example of this phenomenon. Perhaps the reason Nimmo is not looking for any Western influence operations online is that he is part of one.

  Tyler Durden
  Wed, 02/10/2021 – 23:25

• Struggling Airlines Abandon Business Hubs And Reroute Flights To Tropical Areas 
  Struggling Airlines Abandon Business Hubs And Reroute Flights To Tropical Areas 

  Struggling airlines such as United, Delta, and American airlines have dealt with the most challenging year in their companies’ history. Even with vaccine rollouts, 2021 business travel demand is not lifting off as previously anticipated, resulting in airlines routing flights for leisure travel, to areas such as Florida, according to Bloomberg. 

  Travelers departing from Boston, Cleveland, Milwaukee, and Indianapolis have noticed an abundance of non-stop flights to warmer regions in Florida such as Fort Lauderdale, Fort Myers, Orlando, Key West, and Tampa.

  

  Ankit Gupta, United’s vice president for domestic network planning, said this has to do with “demand.” He said, “the sunshine states are seeing much more travel demand than before, on a relative basis, while it evaporated in the Northeast.”

  Another high demand area is Los Cabos, Mexico, said Paul Tumpowsky, founder and chief executive officer of high-end travel agency Skylark.

  Tumpowsky said flights from the Northeast to Los Cabos, Mexico, were increased by United, Delta, and American this winter as demand for warmer climates booms. He said the ease of access to warmer areas such as Hawaii, Guatemala City, and the Caribbean with non-stop flights would soon increase among other carriers. 

  Routes from Northeast states to Europe will likely remain limited, said Patrick Quayle, United’s vice president of international network and alliances. He noted entry requirements that range from vaccine passports to quarantines would continue to suppress demand for European travel markets. 

  As of January, seat capacity remained at 50% compared with the same month last year. Travel analytics company Cirium estimates that 30% of the global commercial airplanes are in storage. 

  Airlines are becoming more data-sensitive and will shift flights to hotspot areas. Savvy travelers are taking advantage of cheap airfare this winter to beach towns in the tropics. 

  So with airlines ditching business hubs and rerouting flights to tropical beach towns, the shift in travel type might forever change as companies adopt remote working. Goodbye business travel means the airline industry may experience a permanent decline. 

  Tyler Durden
  Wed, 02/10/2021 – 23:05

• US Shifts Official Justification Of Its Illegal Presence In Syria From "Guarding Oil" To "Fighting ISIS"
  US Shifts Official Justification Of Its Illegal Presence In Syria From “Guarding Oil” To “Fighting ISIS”

  Submitted by Khaled Iskef via SouthFront.org,

  On February 9, the Pentagon announced that its forces in Syria are no longer responsible for the protection of the oil wells.

  

  A Pentagon spokesman, John Kirby, said that the employees and contractors of the US Department of Defense are no longer allowed to assist any private company seeking to exploit the oil resources in Syria, nor to help the employees of this company or its agents.

  Kirby added that the 900 personnel stationed in the region are there to support the mission of fighting ISIS only, which is the main reason for their presence.

  The announcement of the US Department to shift the formal objectives of its military presence in Syria goes contrary to the position of the administration of former President Donald Trump. President Joe Biden announced that it would fix what Trump ‘sabotaged’ in the US policies.

  Two years ago, Trump that he would keep a limited contingent of US forces in Syria to protect the oil wells, and said at the time that the US forces would take their share of the Syrian oil.

  Last July, the SDF signed an agreement with a private US company called Delta Crescent Energy to modernize the oil wells seized by the SDF with the support of US forces, and to smuggle the oil extracted from them outside the Syrian territories.

  Tyler Durden
  Wed, 02/10/2021 – 22:45

• Biden Holds First Phone Call With Xi, Both Sides Offer Vastly Different Accounts Of What Was Said
  Biden Holds First Phone Call With Xi, Both Sides Offer Vastly Different Accounts Of What Was Said

  Nearly a month after his inauguration and more than three months since the presidential election, Joe Biden held his first call with Xi Jinping since entering the White House, just days after his secretary of state warned Beijing that Washington would hold China accountable for its “abuses”.

  In a Wednesday night tweet, Biden said that he spoke today with President Xi “to offer good wishes to the Chinese people for Lunar New Year.” He also shared concerns “about Beijing’s economic practices, human rights abuses, and coercion of Taiwan” and told him that Biden “will work with China when it benefits the American people.”

  I spoke today with President Xi to offer good wishes to the Chinese people for Lunar New Year. I also shared concerns about Beijing’s economic practices, human rights abuses, and coercion of Taiwan. I told him I will work with China when it benefits the American people.

  — President Biden (@POTUS) February 11, 2021

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  The White house also chimed in saying that “President Biden underscored his fundamental concerns about Beijing’s coercive and unfair economic practices, crackdown in Hong Kong, human rights abuses in Xinjiang, and increasingly assertive actions in the region, including toward Taiwan. President Biden committed to pursuing practical, results-oriented engagements when it advances the interests of the American people and those of our allies.”

  “The two leaders also exchanged views on countering the COVID-19 pandemic, and the shared challenges of global health security, climate change, and preventing weapons proliferation. President Biden committed to pursuing practical, results-oriented engagements when it advances the interests of the American people and those of our allies” the White House said.

  The call, however, had vastly different content when retold from China’s side.

  According to an account of the conversation reported by Chinese state television, Xi said that “cooperation was the only choice and that the two countries need to properly manage disputes in a constructive manner.” Xi also told Biden that “confrontation between China and the United States would be a disaster and the two sides should re-establish the means to avoid misjudgments.”

  Xi also said Beijing and Washington should re-establish various mechanisms for dialogue in order to understand each others’ intentions and avoid misunderstandings, the report said.

  Finally, and most bizarrely, Xi told Biden that he hopes the United States will cautiously handle matters related to Taiwan, Hong Kong and Xinjiang that deal with matters of China’s sovereignty and territorial integrity. Quite the opposite of what Biden reportedly told Xi…

  Issues regarding Taiwan, Hong Kong and Xinjiang are China’s domestic affairs that concern China’s sovereignty and territorial integrity. The US should respect China’s core interests and deal with those issues prudently: Xi https://t.co/1FqbOst3k8

  — Global Times (@globaltimesnews) February 11, 2021

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  How is it possible that both sides came away with such profoundly different summaries of what was said: maybe the two were talking without a translator?

  Ahead of the call, a senior US official said Biden had planned to raise a number of issues with Xi, including China’s crackdown on the pro-democracy movement in Hong Kong and its repression of Muslim Uighurs in Xinjiang. It wasn’t clear if Hunter Biden was also discussed.

  “The president will raise [Hong Kong and Xinjiang] directly with Xi Jinping on the call . . . and indicate that this is not just about American values, it’s about universal values,” the official said. “It is about obligations that China itself has signed on to with respect to core international agreements.”

  Biden’s secretary of state, Anthony Blinken, angered the Chinese last month when speaking to his Chinese counterpart, Yang Jiechi, in the first high-level interaction between the countries since Biden became president, Blinken said the US viewed the detention of an estimated 1 million Muslim Uighurs in Xinjiang as “genocide”.

  China’s treatment of its Muslim population has sparked calls for countries to boycott the 2022 winter Olympics in Beijing. Asked if Biden would raise the games in the call, the senior US official said it would “not be on the agenda”. In fact, we doubt that any truly controversial topics were breached for the reason discussed in “Blockbuster Report Reveals How Biden Family Was Compromised By China.“

  Meanwhile, relations between China and the US remain at rock bottom. After years of escalating trade wars between Trump and Xi, the Financial Times reported that Chinese warplanes entered Taiwan’s air defence zone just after Biden’s inauguration and simulated missile attacks on the USS Theodore Roosevelt aircraft carrier in the South China Sea. Which may explain why the US has now sent a second aircraft carrier in the South China Sea where it is holding naval exercises even as Beijing blasts the “blow to peace and stability.”

  On Sunday, Biden told CBS News that China would face “extreme competition” from the US. While he praised his Chinese counterpart — whom he knows from his time as Barack Obama’s vice-president — as “very bright”, he said he “doesn’t have a democratic . . . bone in his body”.

  Just a few days prior, Blinken told Yang the US would stand up for democracy and human rights, signalling a hawkish stance towards China. “I made clear the US will . . . hold Beijing accountable for its abuses of the international system,” Blinken wrote on Twitter following the call. In response, Yang warned the US not to interfere in Hong Kong and Xinjiang, saying “no one can stop the great rejuvenation of the Chinese nation”.

  It’s unclear if that means that “10 for the big guy” will now stop.

   

  Tyler Durden
  Wed, 02/10/2021 – 22:37

• Salary Transparency? Survey Reveals Older Employees Far Less Likely To Disclose Pay
  Salary Transparency? Survey Reveals Older Employees Far Less Likely To Disclose Pay

  Over the last several years, a movement has emerged promoting salary transparency throughout various industries, which, according to Glassdoor.com “helps expose pay gaps between otherwise similar workers, encouraging underpaid employees to negotiate or move to better-fitting jobs, improving overall efficiency in labor markets.”

  “In recent years, there has been a gradual shift away from traditional workplace secrecy and toward more transparent salary policies,” according to a 2015 report by Glassdoor chief economist, Andrew Chamberlain.

  Fast forward six years, and the salary transparency movement is still trying to go mainstream.

  According to a January survey of 1,500 workers conducted by career resource site Zippia, it may simply be suffering from a lack of participation – particularly among older workers. In fact, 50% of workers overall are unwilling to share their salary information, while 30% of workers say they would be uncomfortable sharing their salaries, period.

  Workers 25-34 years old are most comfortable sharing salary information- a whopping 58% are willing to discuss salary. Who is less eager to share? Older workers. In particular, those over 45.

  As this age group ages and advances in their careers, this open attitude could increase salary transparency. However, it is possible younger workers will shed their desire to freely share salary information as they are promoted. –Zippia

  

  More findings via Zippia:

  • Another are 20% uncertain about whether or not they’d share how much they make.
  • Only 45% of workers feel they are adequately paid; Another 25% say they are “somewhat” fairly paid.
  • 25-34 year olds are most comfortable sharing salary information- a whopping 58% are willing to discuss salary.
  • Those over 45 are least willing to share their salary at work.
  • Half of workers would ask for more money if they knew coworkers made more than them.
  • It pays to make friends: 29% of workers report they would only feel comfortable discussing salary at work with close, friendly coworkers.
  • Good luck finding our your boss’ salary: Only 6% would feel comfortable telling someone who directly reports to them how much they make.

  Here’s a US map with salary transparency by state:

  

  So, does salary transparency lead to higher pay? That’s unclear – but workers who are expecting a ‘large raise’ were most likely to disclose their salary than those not expecting a large raise.

  

  Meanwhile, Indeed.com found in January that most workers and job seekers want to know where they stand. They also found that 66% of those surveyed have never shared their salaries on a job website, while only half have shared their pay with friends, and 60% say they’ve never asked a co-worker what they make.

  21% of those surveyed say it feels taboo to discuss pay, with around the same number of people saying that they don’t want to create drama at work, according to Indeed. 14% worry about getting in trouble with management for asking or telling.

  The bottom line, “For employers, fair pay and salary transparency aren’t just noble aims—they are proven strategies to attracting and retaining talent while also encouraging higher engagement and productivity. “

  Tyler Durden
  Wed, 02/10/2021 – 22:25

• Meanwhile In China, A Bankrupt Solar Firm Just Sold $117 Million In Shares
  Meanwhile In China, A Bankrupt Solar Firm Just Sold $117 Million In Shares

  In what at the time was a historic event, taking advantage of the early signs of retail euphoria, back in June bankrupt Hertz tried and almost succeeded in selling shares while in bankruptcy. Only the last minute intervention of a bankruptcy judge prevented what would have been a $1 billion “at the money” offering to Robinhood traders.

  But where Hertz failed a Chinese company has succeeded.

  Bloomberg reports that a Chinese solar power plant firm raised $117.4 million overnight selling 2 billion new shares in Hong Kong — an unremarkable placement at first sight… except that GCL New Energy Holdings is technically bankrupt, having defaulted on a $500 million bond just last week.

  Its stock predictably fell on Wednesday after the share placement, but it’s still up almost 54% this year. In fact, it has risen 49% since announcing the default on Feb. 1.

  The fact that a company in default was able to successfully sell new shares is perhaps not all that surprising as stocks continue to hit new highs on expectations of more stimulus. The rally has prompted companies and shareholders to sell shares, with equity sales and initial public offerings having a record start to the year.

  GCL New Energy is among renewable power developers that have been hurt by China’s government delaying subsidy payments. The firm’s accounts and notes receivable rose to more than 4.5 billion yuan ($699 million) as of June 30, up from 1.9 billion yuan four years earlier.

  And while the company had been selling renewable plants to help pay down debt, but it wasn’t enough to avoid the default earlier this month. As of June, the company had net current liabilities of 6.5 billion yuan, which cast doubt about its ability to continue as a going concern, according to a statement on Dec. 23.

  That’s when an army of new shareholders stepped in, eager to provide the company with much needed liquidity.

  And while Americans watch in disbelief as retail traders take worthless companies orders of magnitude higher, in China this is a routine occurrence: when short-video company Kuaishou Technology went public this month, investors put in hundreds of billions of dollars of orders as “investors, both retail and institutional, have flocked to share offerings in an effort to put idle cash to work given ultra-low interest rates.”

  And while we now know that Ken Griffin, Citadel’s billionaire founder, is expected to testify next week at a House hearing on wild market swings in shares of GameStop and other stocks, we doubt that the real perpetrator of the current bout of market insanity – the Chairman of the Fed – will be present.

  Tyler Durden
  Wed, 02/10/2021 – 22:05

• CDC Begins Recommending Wearing Two Masks
  CDC Begins Recommending Wearing Two Masks

  We already know based on objective, impartial, empirical data, that there is effectively no difference in covid case counts/hospitalizations/deaths in states that mandate masks and business restrictions (such as North Dakota) vs states which do not (such as its southern neighbor).

  

  So, perhaps while looking at this graphic, the CDC had a brilliant idea: ok, one mask does not work, but what about… two masks!

  That’s right: starting Wednesday, the CDC (aka the U.S. Centers for Disease Control and Prevention) began recommending that Americans wear two masks, or specifically a cloth mask over a medical mask to slow the spread of Covid-19.

  The guidance followed the release of an agency study (because “scientists”) that found double masking can boost protection from aerosolized particles.

  Whereas government officials previously said the CDC was waiting to gather evidence on double masking, they now appear to have a greenlight to mandate double-masking. The new study, part of the agency’s Morbidity and Mortality Weekly Report, also examined the efficacy of modifications made to improve the fit of a medical mask. Either double masking or tightening a mask’s fit reduced exposure to aerosols that could be infectious by about 95%, the research concluded.

  “These experiments highlight the importance of good fit to maximize mask performance,” the authors wrote.

  “There are multiple simple ways to achieve better fit of masks to more effectively slow the spread of Covid-19.”

  The findings came from experiments done by the agency last month, which tested how double masking and changes to improve mask fit worked amid coughing, which the researchers simulated. Knotting the loops of a surgical mask and tucking in extra fabric near the face was found to reduce exposure, as was wearing a cloth mask over a surgical mask.

  

  As a result, the CDC’s new guidance now recommends that Americans should ensure that masks fit tightly on their face and have layers, both of which improve protection.  There are several routes to do that, including wearing a disposable mask beneath a cloth mask or choosing a mask with multiple layers of fabric, according to the recommendation.

  That said, double-masking with two disposable masks, or with a KN95, isn’t recommended.

  “The bottom line is this: Masks work and they work best when they have a good fit and are worn correctly,” CDC Director Rochelle Walensky said at a White House briefing on Wednesday.

  And while the CDC may argue that “the bottom line” is whatever it wants it to be, at least until it changes its mind in a month to suit some political interest du jour, the reality is that wearing just one mask has shown no tangible improvement on infection numbers.

  In fact, none other than Dr Anthony Fauci said one week ago that “there’s no data that indicates that [double masking] is going to make a difference.”

  Fauci on double masking:

  “There’s no data that indicates that that is going to make a difference” pic.twitter.com/ptVivQfuwt

  — Eli Klein (@TheEliKlein) January 31, 2021

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  But that was science in January. We now have February science. As a result, it’s time to reset the count and start with two…. then three masks…. then four…. until eventually we all will look like this…

  

  … at least for a few minutes before everyone dies from asphyxiation.

  Tyler Durden
  Wed, 02/10/2021 – 21:55

• Biden Admin Says It Will Continue Trump DOJ's Extradition Of Julian Assange
  Biden Admin Says It Will Continue Trump DOJ’s Extradition Of Julian Assange

  It comes as no surprise that President Biden doesn’t plan to let up on the US pursuit of WikiLeaks founder Julian Assange, after widespread hopes and expectations that Trump was going to pardon Assange during his last days in office, which didn’t happen.

  Despite the US losing its push in a London court for the UK to extradite him in a ruling early last month on grounds that he would likely be subject to cruel punishment, the US government now has until a February 12 deadline to submit its “grounds for appeal”. It’s now been confirmed that the Biden administration intends to do just that.

  “We continue to seek his extradition,” said Justice Department spokesman Marc Raimondi on Tuesday. This is exactly what Assange’s legal team and supporters feared — Washington plans to drag this out as long as possible, leaving him to languish at Belmarsh prison, tied up in the seeming endless legal process.

  Biden is Trump with a facelift. Literally. https://t.co/Q0jTtlFxvV

  — Sharmine Narwani (@snarwani) February 9, 2021

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  Initially last year the Trump administrated formally indicted Assange on 17 counts of espionage and one count of conspiracy to commit a computer crime, which together would mean 175 years in prison if convicted.

  Interestingly, Biden’s stance is however a departure from the prior Obama policy. As one of the journalists most closely following Assange’s confinement and trial notes:

  The statement represents a departure from President Barack Obama’s administration, which declined to prosecute Assange. Justice Department officials were reportedly concerned about the threat it would pose to press freedom.

  If he were brought to the United States it would most certainly mean he’d spend the remainder of his life at the notorious at ADX Florence, the supermax facility that currently houses terrorists, murderers, and traitors to the US government – where inmates spend 23 out of 24 hours in a small cell with no view of the outside world.

  Biden’s DOJ has until Friday to appeal a UK judge’s decision not to extradite Julian Assange.

  Does the Biden admin believe in press freedom or not? If it does, it will not appeal and will end the persecution of Assange.

  It’s that simple. https://t.co/WJ3V0Z5ZCo

  — Max Blumenthal (@MaxBlumenthal) February 9, 2021

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  Based on this British district judge Vanessa Baraitser’s January 4th decision cited that Assange’s fragile mental state was “such that it would be oppressive to extradite him to the United States of America.”

  Thus it appears the legal saga and Assange’s imprisonment could press on for months more, and according to the worst-case scenario, even years.

  Tyler Durden
  Wed, 02/10/2021 – 21:45

• A Third Of All US Homeowners Own Property Worth Double The Underlying Mortgage
  A Third Of All US Homeowners Own Property Worth Double The Underlying Mortgage

  In the midst of a virus pandemic, with millions of Americans out of work facing housing and food insecurities, the Federal Reserve has managed to keep interest rates near zero, unleashing a real estate boom, the likes of which hasn’t been seen in years. 

  The central-planning mega brains at the Marriner Eccles building in Washington, D.C., have managed to boost home prices almost everywhere. The latest S&P CoreLogic Case-Shiller index of property values is accelerating at the fastest pace since May 2014. 

  

  Although the full history of the pandemic’s impact on the housing market is yet to be determined, housing data from ATTOM Data Solutions for 4Q20 shows low-interest rates boosted the number of equity-rich properties. 

  ATTOM showed at least 30% of U.S. homeowners were equity rich, which means their property was worth twice as much as their mortgage. Last quarter’s equity-rich properties were about 30.2%, or about one in three, of the 59 million mortgaged U.S. homes. The figure was up from 28.3% in the third quarter, 27.5% in the second quarter, and 26.7% in the fourth quarter of 2019.

  Despite the virus pandemic crushing the working-poor and devastating tens of millions of American households, the central planners in the Eccles building decided to inflate the housing market with low-interest rates. The federal government also played its part by initiating forbearance programs to keep homeowners from panic selling properties they could no longer afford.   

  “The housing market kept booming despite the damage caused by the virus pandemic to the broader economy,” said Todd Teta, ATTOM’s chief product officer.

  “Homeowners are sitting pretty on a growing reserve of personal wealth.”

  Why does this matter? Simple: The Fed is creating a wealth effect with rising home values to make people feel more wealthy, so they spend more. Though the wealth effect benefits certain homeowners and others who own assets have created a failed recovery, known as a “K-shape,” where the working-poor (tens of millions of folks) are left behind. 

  Bloomberg notes the increase in property values has helped reduce the number of underwater properties. These homes have mortgages worth at least 25% more than the market value, have dropped by a full percentage point over the past year, and only account for 5.4% of all mortgaged U.S. properties.

  However, there were six states (Louisiana, Mississippi, West Virginia, Iowa, Arkansas, and Illinois) where the percentage of underwater homes remains above 10%. In Vermont and California, the gap between equity-rich homes and those that are underwater is at 44.7% and 43.6%, respectively. Homes in Baton Rouge, Louisiana, have a larger percentage of underwater homes than equity-rich ones.

  

  Out of the 107 metropolitan areas with a population over 500k examined by ATTOM, the ten largest equity-rich areas last quarter were in the western part of the country, five of which were in California. The report also showed the top zip codes with the highest share of underwater properties. 

  

  Despite the Fed buying tens of billions of dollars in mortgage-backed securities every month, allowing rates to stay low to continue its circus act of bubble blowing, Fed Chairman Jerome Powell recently suggested that the housing market boom was unsustainable and likely to end soon.

  “Some of the tightness in housing markets, which has led to the significant price increases this year, we think is a passing phenomenon,” Powell said.

  Quoting Powell, the American Enterprise Institute Housing Center warned that “the housing sector has more than fully recovered from the downturn,” adding that “there is no justification for continuing or increasing investment in agency mortgage-backed securities.”

  With the labor market deteriorating and the economy stalling, the Fed will have no other choice but to continue inflating the housing bubble until it bursts.

  

  Powell and the rest of the central-planners better wake up to the reality that their so-called ‘recovery’ has left tens of millions of people behind. Simply put, trillions in stimulus aren’t working… and if the delusion of printed-money-driven home equity sparks a consumer re-leveraging (which, it would appear, is the only reason for The Fed to be enabling this farce), then we all know how that ends (or did we all forget 2008?)… Except this time it’s everything!

  Tyler Durden
  Wed, 02/10/2021 – 21:25

• JPMorgan: Investors Have Been Asking Questions About The Potential For Hyperinflation
  JPMorgan: Investors Have Been Asking Questions About The Potential For Hyperinflation

  The following excerpts from today’s JPMorgan Market Intelligence report (Afternoon Briefing) from JPM’s Andrew Tyler:

  EQUITY AND MACRO NARRATIVE: The CPI print today may assuage some of the building anxiety regarding inflation. While the reflation trade is approaching consensus long, investors across all asset classes have been asking questions about the probability/risk of inflation occurring this year as well as the potential for hyperinflation. Hyperinflation seems unlikely while the US labor market recovers.

  That said, it is possible to see some transitory spikes to inflation due to COVID-induced bottlenecks. The market’s  expectations for inflation continue to trend higher, evidenced by US breakeven rates and 5Y5Y inflation swaps.

  

  Insert photo of guy with wheelbarrow full of cash here.

  Tyler Durden
  Wed, 02/10/2021 – 21:05

• Rights Groups Outraged After Twitter Purges Accounts Of Saudi Political Prisoners
  Rights Groups Outraged After Twitter Purges Accounts Of Saudi Political Prisoners

  Twitter is once again being called out for its free speech hypocrisy and double-dealing when it comes to influential and wealthy foreign governments allied closely with Washington. In this latest case Twitter has purged accounts of recent Saudi political prisoners. 

  A number of prominent Saudi activists and public intellectuals that ran afoul of the royal family have languished in Saudi prisons since the 2017 crackdown under the auspices of Crown Prince Mohammed bin Salman (MbS), which most famously saw a number of princes and high profile officials temporarily confined to the Ritz-Carlton hotel in Riyadh.

  

  According to Middle East Eye (MEE) Twitter has removed ‘blue check’ verification badges of many of these prisoners given their account inactivity, or in other cases suspending them altogether. 

  The report details some of the following instances: 

  Among those whose verification label has been removed are Ali al-Omary and Awad al-Qarni, two senior religious figures who have been jailed since 2017. They were seized during a purge that followed Mohammed bin Salman‘s rise to the position of crown prince.

  Similarly, the accounts of the Saudi philanthropist Khaled al-Mohawesh and journalist Khaled al-Alkami, also jailed in the 2017 purge, had their blue tick removed, according to the advocacy Twitter account Prisoners of Conscience. It added that the account of economist Essam el-Zamil, another political prisoner, has been suspended. He tweeted under the handle @Essamz.

  Some of the activists were reportedly targeted by MbS because they publicly spoke out against the economic blockade on neighboring Qatar, a diplomatic crisis which has since been largely resolved, with the Saudi-UAE sanctions on Qatar lifted. 

  

  Others were reportedly women’s rights activists and those seen as luke-warm or doubtful on MbS’ promises of “reform” in the kingdom. 

  In many instances, activists or protesters had “terrorism”-related charges brought during their trials, which in Saudi Arabia is often broadly applied to enemies of the ruling family, especially when it comes to Shia dissidents in the country’s east. 

  The controversy comes amid international pressure for Riyadh to free imprisoned activists in the kingdom:

  🚨BREAKING | Saudi-American political prisoners Dr. Bader al-Ibrahim and Salah al-Haidar have been temporarily released from Saudi prisons after 307 days in arbitrary detention.

  This is welcomed progress that we hope is built on for the release of others.

  Full statement 👇🏽 pic.twitter.com/itFIgaO0hR

  — The Freedom Initiative (@thefreedomi) February 4, 2021

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  Twitter has a current policy of removing or de-verifying “inactive and incomplete” accounts, including for the deceased, but regional human rights observers say that in this context it’s “uncalled for” and could potentially be seen as rewarding oppressive governments like Saudi Arabia. 

  Two such high-profile religious figures which have recently been ‘de-verified’ were featured in the MEE report:

  

  Abdullah Alaoudh of the Gulf at Democracy for the Arab World Now (DAWN), explained: “While there is a policy to remove inactive accounts, those who are forcibly disappeared or arbitrarily detained should be treated as an exception,” he told Middle East Eye.

  Tyler Durden
  Wed, 02/10/2021 – 20:45

• Platinum Soars To Six Year Highs Amid Supply Shortage, Industrial Demand Hope
  Platinum Soars To Six Year Highs Amid Supply Shortage, Industrial Demand Hope

  The epidemic of catalytic converter theft should have been the most recent tell; but combining the recent supply shortage (the US Mint unable to meet platinum coin investment demand and South African mining issues) with demand hopes from a post-pandemic vaccine-supported industrial rebound (as well as an increasingly green global agenda against emissions) has sent platinum prices soaring in recent weeks, and much more so this week, to the highest since Jan 2015.

  “The combination of supply losses due to pandemic-driven mine closures, ongoing South African processing disruption, and strong investment demand more than offsets lower Covid-19-impacted automotive, jewellery and industrial demand.”

  

  Source: Bloomberg

  A perfect storm this week has seen the precious metal dramatically outperform its peers against a backdrop of dollar weakness…

  

  Source: Bloomberg

  Heavily used in catalytic converters – to reduce emissions from cars and trucks – Bloomberg notes that Palladium has been trading at a big discount to sister-metal palladium, which is also used primarily in catalytic converters. The price disparity between the two, as well as tougher regulations on emissions, has raised expectations that platinum will see greater use.

  

  Source: Bloomberg

  Notably, Platinum’s shortfall of supply over demand came even as auto-catalyst consumption “plunged by 22%, with steep falls in European diesel car production,” says technology specialist Johnson Matthey in its new PGM Market Report.

  “Autocatalyst demand will recover strongly on higher car output and stricter emissions limits for trucks in China. Industrial consumption will remain robust, with PGM use in chemicals [manufacturing] set to reach an all-time high.”

  There are also pressures on the supply side, as BullionVault.com reports, South Africa’s struggling power utility Eskom imposed a fresh round of electricity cuts – extending a run starting last Saturday – on households and business, running from 1pm through to 6am Thursday local time.

  “The mining industry is heavily reliant on electric output,” notes the precious metals team at French bank and London bullion market makers BNP Paribas, “and so is likely to suffer production slowness…That obviously translates into higher prices of PGMs today.”

  Looking ahead to 2021, “PGM supply and demand are forecast to bounce back in a V-shaped recovery,” says Johnson Matthey’s new report.

  “Oil is going up and commodities in general are going up,” Johan Theron, spokesman for Impala Platinum Holdings Ltd.

  “On a relative basis platinum is low on a historical level. So it’s definitely receiving a lot of investor attention and not necessarily that anything fundamentally has changed in the short-term outlook.”

  Strong investment demand from those expecting a catch-up to gold and palladium also has been supportive, and today’s CPI miss sparked more ‘bad news is good news’ support in the hopes that more stimulus will be delivered sooner, enabling even more of an industrial rebound.

  

  Source: Bloomberg

  “Optimism on the outlook for industrial and car demand, more stringent emission regulations and, in the last couple of days, some weakness in the dollar” have driven platinum higher, said Georgette Boele, senior precious metals strategist at ABN Amro Bank NV.

  “Longer-term there is much more potential” for the price to rise, she said.

  Tyler Durden
  Wed, 02/10/2021 – 20:25

• Biden Mulls Domestic Travel Restrictions Despite Improving COVID Backdrop
  Biden Mulls Domestic Travel Restrictions Despite Improving COVID Backdrop

  Despite headlines discussing COVID ‘plateaus‘ and ‘dramatic declines‘ in the United States, the Biden administration is mulling whether to impose domestic travel restrictions over concerns that “coronavirus mutations are threatening to reverse hard-fought progress on the pandemic,” according to the Miami Herald.

  

  Outbreaks of the new variants — including a highly contagious one first identified in the United Kingdom, as well as others from South Africa and Brazil that scientists worry can evade existing vaccines — have lent urgency to a review of potential travel restrictions within the United States, one federal official said.

  Discussions in the administration over potential travel restrictions do not target a specific state but focus on how to prevent the spread of variants that appear to be surging in a number of states, including Florida and California. –Miami Herald

  “There are active conversations about what could help mitigate spread here, but we have to follow the data and what’s going to work. We did this with South Africa, we did this with Brazil, because we got clear guidance,” said one White House official. “But we’re having conversations about anything that would help mitigate spread,” the official added regarding the discussions aimed at targeting the spread of the UK mutation in places like Florida – where over a third of all UK variant cases in the US have been identified.

  Two federal officials made clear that no policy announcements are imminent, and that any travel restrictions would be undertaken in coordination with state and local governments.

  “No decisions have been made, but we certainly are having conversations across government,” said the White House official, adding “This is a war and we’re at battle with the virus. War is messy and unpredictable, and all options are on the table.”

  The potential action comes after Biden directed the CDC, the Department of Homeland Security and the Department of Transportation to “promptly” create a list of recommendations on “how their respective agencies may impose additional public health measures for domestic travel.”

  Meanwhile, Transportation Secretary Pete Buttigieg, the second gay man in US history to hold a cabinet position, has been examining whether to require COVID-19 testing for domestic flights – a suggestion that has drawn criticism from airline execs as “a horrible idea.”

  “We had been pushing the use of a mask mandate, so we were very pleased to see the Biden administration put an executive order in place requiring masks in general spaces and in the airspace. That’s absolutely critical,” said Tori Emerson Barnes, executive vice president of public affairs and policy at the U.S. Travel Association who has spoken with the Biden administration on the matter. “We have some concerns around the idea of a domestic testing requirement, because not only would it require a 42% increase in the testing capacity nationwide, but it’s really not scalable, feasible or effective.”

  <!–*/

  <!–*/

  */

  /*–>*/

  /*–>*/

  The Herald notes that “COVID-19 cases in Florida have declined in recent weeks,” however the UK variant has “spread rapidly in the state during that time,” and now accounts for up to 15% of new cases in the state, according to estimates from researchers modeling the variant’s spread across the country.

  Florida Governor Ron DeSantis “opposes travel restrictions and does not believe diagnostic tests should be a prerequisite to domestic air travel,” acording to spokeswoman Meredith Beatrice, while Senator Marco Rubio (R-FL) wrote Biden to warn that travel restrictions on the state would be “reckless and economically harmful.”

  “Instituting a travel ban, or any restriction of movement between the states, would be an outrageous, authoritarian move that has no basis in law or science,” wrote Rubio.

  Speaking of science, Bank of America just noted that COVID-19 hospitalizations have “declined dramatically” and are down 40% from the peak which occurred on January 5, which they described as “a rapid turn in the crisis.”

  The decrease is broad-based (all 50 states+DC saw no increases over the past week without exception). The weekly percentage change in US Covid-19 hospitalized is consistent with the largest declines seen during the Coronavirus crisis.

  Moreover the 7-day test positivity rate has declined to 6.9% from the 13.6% peak on January 8th. Since  hospitalizations are lagged relative to time
  of infection the US Corona outbreaks peaked back in the second half of December. -Bank of America

   

  According to Robert Bednarczyk, a public health expert and assistant professor at Emory University’s Rollins School of Public Health, nobody knows whether travel restrictions will help, and implementing then now could amount to “closing the barn door once the horse is out.”

  “With only a small fraction of samples tested for specific mutations, this is likely underestimating the amount of spread,” Bednarczyk added, noting that the UK’s B.1.1.7 variant has already spread to 34 other states despite the fact that it’s more concentrated in California and Florida. “In addition to what we’ve been asking of the population — masks, distancing, avoiding large gatherings — I think people should consider avoiding travel, especially to tourist destinations where there’s a greater chance of disease spread to individuals who can take it to more places.”

  Read the rest of the report here.

   

   

  Tyler Durden
  Wed, 02/10/2021 – 20:05

• Kolanovic: A New Commodity Supercycle Has Begun
  Kolanovic: A New Commodity Supercycle Has Begun

  Having dabbled in the fields of viral epidemiology and presidential polling, JPM quant Marko Kolanovic is set to conquer yet another “cross-asset”: commodities.

  Two days after Dylan Grice published an article “The Stage is Set for a Bull Market in Oil“, with various commodities around the world soaring, and the price of oil up a stunning 64% since November, today Marko Kolanovic made a bold prediction – that the world has entered a new commodity supercycle:

  It is generally agreed that over the past 100 years, there were 4 Commodity supercycles and that the last one started in 1996 . We  believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new commodity supercycle.

  The croatian quant first looks at history to answer “what drove the last supercycle” – according to him, “on the upswing, the most important driver was the economic rise of China (and EMs more broadly). USD was weakening and asset managers increasingly added commodity exposure to diversify portfolios.” Then the 2008 global recession hit, coupled with further slowdown in Europe (2011) and China (2015) which sent commodities lower, defining the 12 year down cycle whose last leg “was marked by trade wars the ensuing global manufacturing recession, and the disastrous pandemic that sent oil prices into negative territory for the first time ever.” This is summarized in the chart below.

  

  Well, according to the JPM quant, the downcycle is now over, and “the new commodity upswing, and in particular Oil up cycle, has started” driven by the following factors:

  

  Of these, Kolanovic says that the upcycle will mostly be a story of:

  • postpandemic recovery (‘roaring 20s’),
  • ultra-loose monetary and fiscal policies,
  • weak USD,
  • stronger inflation,
  • unintended consequences of environmental policies and their friction with physical constraints related to energy consumption and production.”

  What he means by the last bullet is that as a result of dramatic capex curbs in recent years, with capital instead flowing to various pet ESG projects, there is not nearly enough capacity to meet future demands and the immediate outcome will be far higher prices.

  It’s not just the fundamental factors that form the basis for JPM’s bold call: the bank also believes that the coming years will see a substantial repurposing of financial flows which have “an increasing role in asset pricing (e.g. vs. fundamentals)” is a consequence of “the electronification of liquidity provision, increased use of leverage, and rise of systematic trading strategies and related flows.”

  It is these increasingly fast and furious flows that “exacerbated the size and velocity of price moves both in commodities and related equities” during the last downturn, and these same financial flows “can have a similar impact on prices in the up cycle.”

  Marko then discuss some of the financial flows that he believes will impact commodity and related equity prices: we have excerpted his view on some of the key ones:

  Inflation hedging: The past decade was marked by low growth and low inflation. Bonds, bond proxies and secular growth stocks were in a bull market, while commodities, value and cyclical stocks performed poorly. Kolanovic believes that the tide on yields and inflation is turning, which will pose “a major risk to multi-asset portfolios” and in light of the consensus view that commodities are the best way to hedge rising inflation, the JPM quant expects “these multi-asset portfolios to add commodity and commodity equity exposure to hedge inflation.”

  Bond-equity correlation hedging: Claiming that “bond-equity correlation is a critical input into portfolio construction (selection of assets, weights, leverage)” the quant found that Bond-equity correlation shifted regimes when the last supercycle started in 1997 and when central bank actions started intervening in bond markets to backstop equity risk. Coincidentally, Kolanovic notes, “with the end of the commodity supercycle, short-term rates have dropped globally to zero, and the ability of CBs to reinforce the bond-equity relationship without driving inflation has diminished.” So as the world recovers from Covid on the back of a “monetary and fiscal engineered recovery”, JPMorgan expects volatility to decline and inflation to increase, “delivering a 1-2 punch to bond-equity  correlation.” This means that energy equities “could present a good hedge for bond-equity correlation – they often deliver a yield (like bonds) but also hedge the inflation and bond-equity correlation risk.” Incidentally, Exxon still offers a 7% dividend yield despite oil prices being high enough to where the risk of the dividend being canceled is virtually gone.

  Quants and Momentum Investing: In a market where algos and trend-followers have emerged as one of the dominant price-setting forces, it is hardly a surprise that the JPM quant focuses on their influence as the driver behind a commodity supercycle. Indeed, he writes that after “CTAs played significant role in the 2014 oil price downturn” more recently, “CTA funds have been adding Energy exposure. The reason is that 12-month momentum turned positive on Oil, and going forward signals will remain solidly positive.” And since vol-control funds are some of the dumbest money around and their actions can be anticipated well in advance, JPM notes that “a further decline in volatility will likely result in larger and more stable cross-asset quant allocations. A larger momentum impact may affect Energy equities, which is the only sector that still has a strongly negative momentum signal and is hence heavily shorted in the context of factor investing.” That, JPMorgan believes, will “change in mid-March, when the momentum signal for energy equities turns  positive” which may be a hint to the redditors out there: if you want to squeeze the systematic shorts, do it where it hurts and buy some energy stocks to crush the CTAs. You have about a month to do so because JPM’s model momentum factor “will need to rebalance in March by closing ~20% of its allocation to Energy equity shorts, and adding ~2% to energy longs, for a ~22% net buying in Energy.”

  What is the quantitative significance of these flows? Kolanovic calculates that if one roughly assumes that there is about ~$1Tr in equity long-short quant funds and that half of these funds are not sector neutralized, “the flows could be quite significant, roughly $20-$30bn.” As shown in the chart below, the ratio of energy shares shorted vs all other S&P 500 shares shorted, closely followed the commodity supercycle. Remarkably, most recently the number of shares shorted for energy was 4 times the S&P 500 average (note that given the decline of the sector’s weight, energy share prices declined, and the effective $ amount shorted was only 2 times larger). In other words, one doesn’t even need to squeeze the shorts: come March – absent some major new crisis – as a result of broader market technicals the prevailing shorts will close them out on their own and go long.

  

  Another “flow factor” behind the “supercycle” is rotation by discretionary funds and retail: In the period from 2010 to 2015, the Energy sector had a 10.6% allocation in conventional equity portfolios. Since then, this has declined to a 3.1% weight currently (Figure 4). The largest decline was in active allocations, which declined from 7% to 1.5% (while passive allocations decreased from 3.6% to 1.8%), which is understandable – investors dumped “dead stocks” to chase growth and momentum, but the tide is now turning, and “any retracement of this decline, on a US equity fund asset base of ~$14T would result in significant inflows and re-pricing.” According to Kolanovic, as economies reopen, inflation moves higher, and yield curves steepen, active funds are expected to first close cyclical shorts, and then rotate from long secular growth towards value and cyclicals. His next point is critical: given that equity assets significantly increased over the last 10 years, and the energy sector significantly decreased, even a small rotation could produce an outsized move.

  

  Finally, retail investors also reduced energy equity allocation from 4.4% to only 0.6% currently. However, as the quant notes, “given the increased retail activity and interest in stocks that are volatile, have high short interest, are smaller in size and have thematic news/social media coverage, the sector will likely also be of interest to retail investors.”

  By which he means that we may soon have hedge funds, pardon, reddit mods and WSB participants drafting long posts discussing the relative merits of energy as the next sector to go long, and creating a critical mass of buyers which then cascades across the ranks of market participants, from ultra-fast HFTs, to fast momentum and trend-followers, to slow ETFs and eventually ultra slow pension fund money rushing to buy energy stocks and oil.

  Tyler Durden
  Wed, 02/10/2021 – 19:45

• MasterCard Joins Visa, PayPal On The Crypto Payments Bandwagon
  MasterCard Joins Visa, PayPal On The Crypto Payments Bandwagon

  Less than two weeks after Visa CEO Al Kelly said the payments giant is in a position to make cryptocurrencies more “safe, useful and applicable” and may add them to the company’s payments network; MasterCard has tonight laid out in great detail why it also plans to start supporting select cryptocurrencies directly on its network.

  In a detailed and lengthy statement, Raj Dhamodharan, MasterCard’s EVP of Digital Asset & Blockchain Partnerships, adds color to CEO Michael Miebach’s Q4 pledge to integrate digital currency payments “directly on our network.”

  The company has not yet disclosed which digital currencies it intends to support, or where.

  As CoinDesk notes, previously, Mastercard supported limited cryptocurrency transactions through its cryptocard partners Wirex and Uphold. But those programs only cover payment, not settlement; the coins are converted to fiat currency well before reaching the merchant.

  

  Full note:

  Why Mastercard is bringing crypto onto its network

  Whatever your opinions on cryptocurrencies – from a dyed-in-wool fanatic to utter skeptic – the fact remains that these digital assets are becoming a more important part of the payments world.

  We are seeing this fact play out on the Mastercard network, with people using cards to buy crypto assets, especially during Bitcoin’s recent surge in value. We are also seeing users increasingly take advantage of crypto cards to access these assets and convert them to traditional currencies for spending.

  To be clear, this data is not of any individuals – it’s anonymized and in aggregate – but the trend is unmistakable.

  We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network. This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance.

  Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value

  Doing this work will create a lot more possibilities for shoppers and merchants, allowing them to transact in an entirely new form of payment. This change may open merchants up to new customers who are already flocking to digital assets and helping sellers build loyalty with existing customers who want this additional option. And customers will be able to save, store and send money in new ways.

  We want to help these concepts flourish and reach their potential, while also developing and encouraging the necessary guardrails.

  “We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money.”

  To be completely clear, not all of today’s cryptocurrencies will be supported on our network. While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements. We expect consumers and the ecosystem as a whole will start to rally around the crypto assets that offer reliability and security. It’s those very same stablecoins that we expect to bring into our network.

  What are we looking for? Four key items.

  • First and foremost we need consumer protections, including privacy and security of consumers’ information — the same level of security people have come to expect in their credit cards.

  • Next, strict compliance protocols will be needed, including Know Your Customer, a requirement meant to snuff out illegal activity and deception in  payment networks.

  • Also, these digital assets must follow local laws and regulations in the regions they are used.

  • Lastly, people will want to use these digital assets for payments, so that is one of our criteria too. To reach our network, crypto assets will need to offer the stability people need in a vehicle for spending, not investment.

  We are already working hard to provide this consumer choice for cryptocurrencies. We teamed up with Wirex and BitPay last year to create crypto cards that allow people to transact using their cryptocurrencies. We added to those partnerships this year by joining forces with LVL, an up-and-coming cryptocurrency exchange. These relationships — with many more planned in the pipeline — build on our many years of crypto collaborations.

  In all of these cases, cryptocurrencies still don’t move through our network. Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network. Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases.

  Added to this work, Mastercard is actively engaging with several major central banks around the world, as they review plans to launch new digital currencies, dubbed CBDCs, to offer their citizens a new way to pay. Last year, we created a test platform for these banks to use these currencies in a simulated environment. Using our deep experience in payments technologies, we look forward to continuing these partnerships with governments and helping them explore the best ways to develop these new currencies.

  With 89 blockchain patents granted globally with an additional 285 blockchain applications pending worldwide, we already have one of the payments industry’s biggest blockchain patent portfolios to draw from to make these projects successful.

  We are inspired by so much of the work going on in the payments world – in banking, in emergent fintechs, in crypto – to push forward change. And we are doing as much as we can to set the stage for these players to take the next step forward.

  As CoinDesk notes, the payments space is rushing to support blockchain-based currencies at a pace not seen since Bitcoin pioneered the concept of stateless, peer-to-peer immutable transactions in 2009.

  For now there has been no reaction in Bitcoin…

  

  Source: Bloomberg

  We do find it quite ironic that in the same week as Tesla announces a major investment, MicroStrategy presents their bitcoin-funded-reserves concept to thousands of firms, and now Visa and Mastercard show support, Tim Lane, the deputy governor of The Bank of Canada, proclaimed costly verification methods and unstable purchasing power makes cryptocurrencies like Bitcoin a “flawed” method of payment.

  In a speech on “payments innovation,” Lane desperately attempted to pour cold water on the decentralized system of payments would entirely disrupt his industry, exclaiming further that, “the recent spike in their prices looks less like a trend and more like a speculative mania – an atmosphere in which one high-profile tweet is enough to trigger a sudden jump in price.”

  He doth protest too much we think.

  *Car boom is speculative mania says horse dealer https://t.co/32XHrTwPSO

  — Smokey 🧲 スモーキー (@BeegSmokey) February 10, 2021

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

  Tyler Durden
  Wed, 02/10/2021 – 19:25

• 14 State Attorneys Say Keystone Cancellation Delivers "Crippling Economic Injuries", Threaten Legal Action
  14 State Attorneys Say Keystone Cancellation Delivers “Crippling Economic Injuries”, Threaten Legal Action

  Authored by Tom Ozimek via The Epoch Times,

  Fourteen Republican attorneys general are urging President Joe Biden to reconsider his decision to cancel a permit for the construction of the Keystone XL crude oil pipeline, alleging severe economic harm and threatening to take legal action.

  “We write with alarm regarding your unilateral and rushed decision to revoke the 2019 Presidential Permit” for the pipeline, the officials wrote in a Feb. 9 letter (pdf), initiated by Montana’s Attorney General Austin Knudsen.

  

  Calling cancellation of the pipeline a decision “to impose crippling economic injuries on states, communities, families, and workers across the country,” the attorneys general urged Biden to reconsider, while warning that they are “reviewing available legal options.”

  In the letter, Knudsen denounced Biden’s decision to pull the permit as “a symbolic act of virtue signaling” that would do little to accomplish its stated objective of protecting Americans and the domestic economy from harmful climate impacts.

  “The real-world costs are devastating,” Knudsen contended. “Nationally, your decision will eliminate thousands of well-paying jobs, many of them union jobs.”

  

  Keystone XL pipeline facilities are seen in Hardisty, Alta., in a file photo. The now-canceled pipeline would have carried oilsands crude from Hardisty to the U.S. Gulf Coast. (The Canadian Press/Jeff McIntosh)

  The State Department determined in 2014 (pdf) that the Keystone XL pipeline project would support a total of 42,100 jobs and create roughly 3,900 direct jobs in Montana, South Dakota, Nebraska, and Kansas over what was expected to be one or two years of construction.

  After the pipeline entered service, operations would require around 50 employees in the United States, including 35 permanent employees and 15 temporary contractors, the State Department found.

  While construction of Keystone XL would contribute roughly $3.4 billion to U.S. gross domestic product, according to a National Regulatory Research Institute review of State Department estimates (pdf), the pipeline would also offer tax revenues for local and state governments. Property taxes resulting from the project would generate roughly $55.6 million in Montana, South Dakota, and Nebraska.

  Knudsen argued that axing the pipeline would deprive counties and states of future tax revenue.

  “Montana will lose the benefits of future easements and leases, and several local counties will lose their single-biggest property taxpayer. The loss of Keystone XL’s economic activity and tax revenues are especially devastating as five of the six impacted counties are designated high-poverty areas,” Knudsen wrote.

  In canceling the permit, Biden said the pipeline would do little to benefit the country’s energy security and economy, while approving it would undermine the administration’s efforts to combat climate change.

  “In 2015, following an exhaustive review, the Department of State and the President determined that approving the proposed Keystone XL pipeline would not serve the U.S. national interest,” Biden wrote in his Jan. 20 executive order.

  “That analysis, in addition to concluding that the significance of the proposed pipeline for our energy security and economy is limited, stressed that the United States must prioritize the development of a clean energy economy, which will in turn create good jobs,” he wrote.

  “The analysis further concluded that approval of the proposed pipeline would undermine U.S. climate leadership by undercutting the credibility and influence of the United States in urging other countries to take ambitious climate action,” he wrote, adding that, “The world must be put on a sustainable climate pathway to protect Americans and the domestic economy from harmful climate impacts.”

  Knudsen contended in the letter that Biden did not explain “how killing the Keystone XL pipeline project directly advances the goals of ‘protect[ing] Americans and the domestic economy from harmful climate impacts,’” nor does his decision “actually cure any of the climate ills” that the president referenced.

  “Observers are thus left with only one reasonable supposition: it is a symbolic act of virtue signaling to special interests and the international community,” he wrote.

  The Keystone XL pipeline was first proposed in 2008 but reached a snag under the Obama administration. Former President Donald Trump revived the project and was a strong proponent.

  Cancellation of the Keystone construction permit has also drawn heavy fire from industry groups and Republican lawmakers.

  Tyler Durden
  Wed, 02/10/2021 – 19:05

• Manhattan Luxury Real Estate Market Records Best Week Since 2019
  Manhattan Luxury Real Estate Market Records Best Week Since 2019

  Manhattan’s high-end real estate market recorded an unseasonably strong performance last week (Feb. 1-7), with the largest amount of contracts for properties asking plus $4 million since November 2019, according to Mansion Global. 

  The latest market report from Olshan Realty shows 30 luxury home contracts were signed last week. Twenty-one of those were condo units, four were co-ops, and five were townhomes.

  

  A surge in buying interest comes as developers and sellers have slashed luxury property prices following the virus pandemic. Even before the pandemic, around half of all new condo units built after 2015 were unsold. A lot of inventory still sits on the sidelines. 

  However, Donna Olshan, who tracks luxury sales, said last week’s report is “very optimistic because really what it’s showing is the consumer is out there and aggressively looking at New York as a place to buy and live.” 

  In the last two weeks, 57 contracts were signed, 48 of which were apartments. Of those, half were sold by developers. The totals in the previous two weeks “continued a trend that started after the November election—a cocktail stirred with ingredients ranging from the Covid-19 vaccine to low interest rates, a robust stock market and meaningful discounts,” Olshan continued. 

  Last week, the total weekly transaction volume for luxury Manhattan homes was around $244 million. 

  

  The priciest condo to find a buyer last week were the 10th and 11th floors at 1045 Madison Avenue on the Upper East Side, which sold for $27.95 million. The buyer plans to combine both floors into one unit with 8,386-square-foot duplex apartments.

  The second priciest condo sold last week was at One57, a 75-story building located on Billionaires’ Row, for $19.9 million, reduced from $25.2 million.

  Buyers remain in control of the market. Average asking prices for luxury properties fell 10% last week to the final price. Many of the homes took an astonishing 743 days to sell.

  The surge in buying interest among luxury properties in Manhattan is only among the ultra-rich who can obtain cheap loans, unlike average folks who are still having trouble finding mortgages as bank lending standards remain tight. 

  Tyler Durden
  Wed, 02/10/2021 – 18:45

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• China Injects Record Amount Of Loans In January
  China Injects Record Amount Of Loans In January

  On one hand China is desperate to tell the world that this time it is taking deleveraging of the world’s largest and most indebted financial system seriously. On the other hand, it is doing this:

  

  The chart shows that in January, China created a staggering, record 3.58 trillion in new yuan loans, a number which easily surpassed the previous record of 3.340 trillion set last January just as the Chinese economy shut down as a result of covid, when only gargantuan credit injections prevented a total economic collapse in the world’s 2nd largest economy. It’s almost as if only ever greater credit injections are keeping China alive.

  Because it wasn’t just new loans: the broadest Chinese credit aggregate, Total Social Financing which includes new loans as well as shadow debt creation and bond issuance, also exploded to a monstrous 5.170 trillion yuan, which at today’s exchange rate is roughly $800 billion.

  

  That’s right: in one month China injected roughly 6 months of QE into the economy. And to think of all the praise Stanley Druckenmiller heaped just a few days ago on China for its “fiscal sanity”.

  Here are the details:

  • New CNY loans: RMB 3580Bn in January vs. consensus: RMB 3500bn. Outstanding CNY loan growth: 12.7% yoy in January; December: 12.8% yoy (12.1% SA ann mom).
  • Total social financing: RMB 5170bn in January, vs. consensus: RMB 4600bn.
  • TSF stock growth (after adding all government bonds) was 13.2% yoy in January, lower than 13.4% in December. The implied month-on-month growth of TSF stock accelerated to 12.0% (seasonally adjusted annual rate) from 7.8% in December.
  • M2: 9.4% yoy in January (1.0% SA ann mom) vs. GSe: 10.0% yoy, Bloomberg consensus: 10.1% yoy. December: 10.1% yoy (2.6% SA ann mom estimated by GS).

  So yes, anyone who only looks at the M2 – like Druck – would be left with the impression that China is barely adding to the Chinese debt. That would be dead wrong as nothing could be further from the truth.

  

  As Goldman summarizes, the sequential growth of total social financing soared in January from a significant slowdown in December, mainly on decent loans growth, less drag from shadow lending (especially a rebound in banks’ undiscounted acceptance bills), and recovery in corporate bond issuance. How to read this conflicting signal amid China’s overall posture of urgent deleveraging? Well, if one listens to how Goldman justified it, this is just a Golidlocks scenario – the garguantuan amount of debt could have been even more Gargantuan:

  Overall, as suggested by the Q4 monetary policy report and December’s Central Economic Working Conference, the PBOC will avoid sharp tightening to jeopardize growth recovery, but will also likely avoid too dovish a policy to prevent risks (e.g., financial leverage).

  Goldman’s main points:

  1. The sequential growth of TSF picked up to 12.0% mom annualized sa in January, from 7.8% in December, mainly on decent loans growth, less drag from shadow lending (especially a rebound in banks’ undiscounted acceptance bills), and recovery in corporate bond issuance, despite a decline in net government bond issuance. In year-on-year terms, TSF stock growth moderated to 13.2% yoy in January. M2 growth decelerated to 9.4% yoy in January from 10.1% in December, in part due to larger-than-seasonality increase in fiscal deposits.
  2. Among major TSF components, new Rmb loans was decent in January, reflecting robust activity growth in manufacturing and construction suggested by January PMI data, and the government’s continued support for SMEs. Net increase in mid-to-long term loans to corporates was higher in January, and mid-to-long term loans to households also gained pace, although some news reports mentioned banks slowed the lending pace for mortgage loans. Banks’ undiscounted acceptance bills rebounded significantly in January (even after seasonal adjustment), partially due to lower interbank interest rates (though rates up in late January). Contraction in trust and entrusted loans also narrowed, in part due to smaller maturities. Corporate bond issuance recovered roughly to the average levels before the shock from bond defaults in November, while net government bonds issuance in January slowed notably. The government has delayed pre-allocation of part of local government special bond quota this year, and news reports seemed to suggest there remains a chance the government will pre-allocate part of quota to local governments.

  There is another reason why China injected such a massive amount of debt in the economy: the real reason. Recall that interbank interest rates in late January soared leading to concerns that PBOC may tighten monetary policy. Well, it was up to Beijing to ease nerves and to demonstrate that while rates won’t be cut, China can easily inject trillions into its economy, if needed.

  

  It was needed, because the PBOC scrambled to inject enough liquidity to unfreeze the repo market (even as it still pretended that it was tightening conditions as part of its deleveraging) and as Goldman elaborates “in a monetary policy framework with policy rates increasingly emphasized as an anchor for market rates (DR007 in particular), this is more like a normalization of market rates to the average levels (fluctuating around OMO rates) prior to the shock from bond defaults in November, and accordingly narrow the deviation of market rates from the policy rate (OMO rate).”

  And while a decent liquidity injection from PBOC and significant decline in interbank interest rates in December and early January helped corporate bond issuance recovery, it had also led to significant rise in leveraging in bond market. So to make sure the credit markets were well greased, China had no option but to flood even more new loans.

  Goldman’s conclusion is that “as suggested by the Q4 monetary policy report and December’s Central Economic Working Conference, the PBOC will avoid sharp tightening to jeopardize growth recovery, but will also likely avoid too dovish a policy to prevent risks (e.g., financial leverage).”

  Yawn. What the credit data really means is that Beijing continues to engage in a giant magic trick with the rest of the world, one where it pretends to shrink its debt even as it injects record amount of debt at the same time.

  And yes, massive credit injections are all that really matter because on Wednesday, Chinese bank stocks outperformed in Hong Kong “after financial institutions offered a record amount of new loans last month” Bloomberg reported adding that half of the 12 biggest gainers Wednesday morning in Hang Seng Index are lenders, led by Bank of Communications rising as much as 4.3% while major banks also rally in mainland trading.

  In other words, such an amount of debt was not expected, and should not have been expected if indeed China was doing as well as Beijing has been claiming.

  In short: Beijing continues to lie about everything.

  Tyler Durden
  Tue, 02/09/2021 – 23:29

• Accused 'Oath Keeper' Denies All Charges, Claims To Be Former FBI Section Chief Who's Held Top Secret Clearance For Decades
  Accused ‘Oath Keeper’ Denies All Charges, Claims To Be Former FBI Section Chief Who’s Held Top Secret Clearance For Decades

  A Virginia man accused of helping to ‘plan and coordinate’ the January 6th Capitol breach claims he’s not a member, much less a leader, of the Oath Keepers – a group commonly described in the press as ‘far-right’ extremists – and that he wasn’t at the Capitol on January 6th due to what his attorney described as “physical limitations” that would have prevented his travel in the first place.

  

  In a Monday court filing, 66-year-old Thomas Caldwell also claimed he’s held a top-secret security clearance since 1979, ran a consulting firm that did classified work for the US government, and worked as a FBI section chief from 2009 to 2010 – a job the Associated Press says typically requires ‘rising through the ranks of the bureau.’

  

  Thomas Caldwell, who authorities believe holds a leadership role in the extremist group, worked as a section chief for the FBI from 2009 to 2010 after retiring from the Navy, his lawyer, Thomas Plofchan, wrote in a motion urging the judge to release him from jail while he awaits trial.

  The defense said Caldwell, who has denied being part of the Oath Keepers, has held a top-secret security clearance since 1979, which required multiple special background investigations, according to Plofchan. Caldwell also ran a consulting firm that did classified work for the U.S. government, the lawyer said.

  …

  Caldwell’s lawyer said his client retired as a lieutenant commander with the Navy and that he was a “100% disabled veteran.” Caldwell suffered from complications related to a “service-connected injury,” including shoulder, back and knee issues, the attorney said. In 2010, Caldwell had spinal surgery, which later failed and led to chronic spinal issues and a diagnosis of post-traumatic stress disorder, according to the court filing. -Associated Press

  “Moving, sitting for extended periods of time, lifting, carrying, and other physical activities are extremely painful and Caldwell is limited in his ability to engage in them,” Caldwell’s motion seeking pre-trial release continues.

  Caldwell was arrested at his Berryville, VA home on January 19 after being accused of conspiring “to forcibly storm the US Capitol.”

  Authorities claimed in charging documents to have connected Caldwell and two other individuals, Donovan Crowl and Jessica Watkins, to the Oath Keepers through “social media messages, photos and video,” where they allegedly arranged hotel rooms in DC days before the incident. In another message, Caldwell is allegedly referred to as “commander.” An FBI witness also referred to a “Commander Tom” which investigators believe refers to Caldwell.

  Charging documents show messages between Caldwell and the others about arranging hotel rooms in the Washington area in the days before the siege. In one Facebook message from Crowl to Caldwell, Crowl states: “Will probably call you tomorrow … mainly because … I like to know wtf plan is. You are the man COMMANDER.”

  The FBI wrote that Caldwell is believed to have referenced the leader of the Oath Keepers, Elmer Stewart Rhodes, in a Facebook message to group members in the days before the riot.

  “I don’t know if Stewie has even gotten out his call to arms but it’s a little friggin late,” Caldwell wrote, according to the FBI. “This is one we are doing on our own. We will link up with the north carolina (sic) crew.” –Associated Press, Jan. 19

  Caldwell also allegedly posted a Facebook video, followed two minutes later with the comment “Us storming the castle. Please share. Sharon was right with me! I am such an instigator! She was ready for it man! Didn’t even mind the tear gas.”

  

  He then posted two minutes later: “Proud boys scuffled with cops and drove them inside to hide. Breached the doors. One guy made it all the way to the house floor, another to Pelosi’s office. A good time.”

  Authorities also claim the Oath Keepers communicated during the Capitol riot about the whereabouts of lawmakers – with Caldwell allegedly having received a message that read: “all members are in the tunnels under the capital,” and “Seal them in turn on gas.”

  “Tom all legislators are down in the Tunnels 3floors down,” read another message, and “go through back house chamber doors facing N left down hallway down steps.”

  Roughly 200 people including Caldwell have been charged with federal crimes related to the January 6 incident, ranging from disorderly conduct and assault to disrupting Congress. According to the report, a special group of prosecutors is considering whether to bring sedition charges.

  The Oath Keepers, founded by Yale Law graduate Stuart Rhodes, bills itself as an association of non-partisan current and former military officers, cops and first responders and notably provided disaster relief to Texas, Louisiana and Puerto Rican hurricane victims. They also have a policy to physically remove any white supremacists from their rallies.

  

  Of note, on January 13, one week after the Capitol Riot, US intelligence agencies warned that violent extremists with “political grievances” will likely pose the “greatest domestic terrorism threats in 2021.“

  Two weeks later, we found that one of the leaders of the Proud Boys, a group roundly labeled a “far-right extremist group” by the media and recently designated a terrorist entity by Canada, was a ‘prolific’ FBI informant who was notably ordered to stay away from Washington D.C. one day before the January 6 Capitol riot after he was arrested on vandalism and weapons charges. Several members of the Proud Boys leadership were taken down after the ‘insurrection.’

  

  Read the original Caldwell affidavit below:

  Tyler Durden
  Tue, 02/09/2021 – 23:26

• Don't Impeach Trump. Impeach The Deep State For Its Conspiracy To Kill The Constitution
  Don’t Impeach Trump. Impeach The Deep State For Its Conspiracy To Kill The Constitution

  Authored by John Whitehead and Nisha Whitehead via The Rutherford Institute,

  “All that was required of them was a primitive patriotism which could be appealed to whenever it was necessary to make them accept longer working hours or shorter rations. And even when they became discontented, as they sometimes did, their discontent led nowhere, because, being without general ideas, they could only focus it on petty specific grievances. The larger evils invariably escaped their notice.”

  – George Orwell, 1984

  Let’s be clear about one thing: the impeachment of Donald Trump is a waste of time and money.

  Impeaching Trump will accomplish very little, and it will not in any way improve the plight of the average American. It will only reinforce the spectacle and farce that have come to be synonymous with politics today

  While the nation allows itself to be distracted by yet more bread-and-circus politics, the American kakistocracy (a government run by unprincipled career politicians and corporate thieves that panders to the worst vices in our nature and has little regard for the rights of the people) continues to suck the American people into a parallel universe in which the Constitution is meaningless, the government is all-powerful, and the citizenry are powerless to defend themselves against government agents who steal, spy, lie, plunder, kill, abuse and generally inflict mayhem and sow madness on everyone and everything in their sphere.

  So here’s what I propose: let’s impeach the Deep State and its cabal of government operatives from every point along the political spectrum (right, left and center) for conspiring to expand the federal government’s powers at the expense of the citizenry.

  We’ve been losing our freedoms so incrementally for so long—sold to us in the name of national security and global peace, maintained by way of martial law disguised as law and order, and enforced by a standing army of militarized police and a political elite determined to maintain their powers at all costs—that it’s hard to pinpoint exactly when it all started going downhill, but we’re certainly on that downward trajectory now, and things are moving fast.

  Even now, we are being pushed and prodded towards a civil war, not because the American people are so divided but because that’s how corrupt governments control a populace (i.e., divide and conquer).

  These are dangerous times.

  These are indeed dangerous times but not because of violent crime, which remains at an all-time low, or because of terrorism, which is statistically rare, or because the borders are being invaded by foreign armies, which data reports from the Department of Homeland Security refute, or because a pandemic is spreading like a contagion, or even because raging mobs of so-called domestic terrorists are trying to overthrow elections.

  • No, the real danger that we face comes from none other than the U.S. government and the powers it has granted to its standing armies to rob, steal, cheat, harass, detain, brutalize, terrorize, torture and kill American citizens with immunity.

  • The danger “we the people” face comes from masked invaders on the government payroll who crash through our doors in the dark of night, shoot our dogs, and terrorize our families.

  • This danger comes from militarized henchmen on the government payroll who demand absolute obedience, instill abject fear, and shoot first and ask questions later.

  • This danger comes from greedy, power-hungry bureaucrats on the government payroll who have little to no understanding of their constitutional limits.

  • This danger comes from greedy politicians and corporations for whom profit trumps principle.

  • This danger comes from a surveillance state that grows more and more ominous.

  Consider, if you will, all of the dastardly, devious, diabolical, dangerous, debilitating, deceitful, dehumanizing, demonic, depraved, dishonorable, disillusioning, discriminatory, dictatorial schemes inflicted on “we the people” by a bureaucratic, totalitarian regime that has long since ceased to be “a government of the people, by the people and for the people.”

  Americans have no protection against police abuse. It is no longer unusual to hear about incidents in which police shoot unarmed individuals first and ask questions later. What remains all-too-usual, however, is the news that the officers involved in these incidents get off with little more than a slap on the hands.

  Americans are little more than pocketbooks to fund the police state. If there is any absolute maxim by which the federal government seems to operate, it is that the American taxpayer always gets ripped off. This is true, whether you’re talking about taxpayers being forced to fund high-priced weaponry that will be used against us, endless wars that do little for our safety or our freedoms, bloated government agencies such as the National Security Agency with its secret budgets, covert agendas and clandestine activities.

  Americans are no longer innocent until proven guilty. We once operated under the assumption that you were innocent until proven guilty. Due in large part to rapid advances in technology and a heightened surveillance culture, the burden of proof has been shifted so that the right to be considered innocent until proven guilty has been usurped by a new norm in which all citizens are suspects. This is exemplified by police practices of stopping and frisking people who are merely walking down the street and where there is no evidence of wrongdoing. Likewise, by subjecting Americans to full-body scans and license-plate readers without their knowledge or compliance and then storing the scans for later use, the government—in cahoots with the corporate state—has erected the ultimate suspect society. In such an environment, we are all potentially guilty of some wrongdoing or other.

  Americans no longer have a right to self-defense. In the wake of various shootings in recent years, “gun control” has become a resounding theme. Those advocating gun reform see the Second Amendment’s right to bear arms as applying only to government officials. As a result, even Americans who legally own firearms are being treated with suspicion and, in some cases, undue violence. In one case, a Texas man had his home subjected to a no-knock raid and was shot in his bed after police, attempting to deliver a routine search warrant, learned that he was in legal possession of a firearm. In another incident, a Florida man who was licensed to carry a concealed firearm found himself detained for two hours during a routine traffic stop in Maryland while the arresting officer searched his vehicle in vain for the man’s gun, which he had left at home.

  Americans no longer have a right to private property. If government agents can invade your home, break down your doors, kill your dog, damage your furnishings and terrorize your family, your property is no longer private and secure—it belongs to the government. Likewise, if government officials can fine and arrest you for growing vegetables in your front yard, praying with friends in your living room, installing solar panels on your roof, and raising chickens in your backyard, you’re no longer the owner of your property.

  Americans are powerless in the face of militarized police. In early America, citizens were considered equals with law enforcement officials. Authorities were rarely permitted to enter one’s home without permission or in a deceitful manner. And it was not uncommon for police officers to be held personally liable for trespass when they wrongfully invaded a citizen’s home. Unlike today, early Americans could resist arrest when a police officer tried to restrain them without proper justification or a warrant—which the police had to allow citizens to read before arresting them. (Daring to dispute a warrant with a police official today who is armed with high-tech military weapons and tasers would be nothing short of suicidal.) As police forces across the country continue to be transformed into outposts of the military, with police agencies acquiring military-grade hardware in droves, Americans are finding their once-peaceful communities transformed into military outposts, complete with tanks, weaponry, and other equipment designed for the battlefield.

  Americans no longer have a right to bodily integrity. Court rulings undermining the Fourth Amendment and justifying invasive strip searches have left us powerless against police empowered to forcefully draw our blood, strip search us, and probe us intimately. It’s no longer unusual to hear accounts of men and women being subjected to what is essentially government-sanctioned rape by police in the course of “routine” traffic stops. What remains to be seen is how the emerging hypervigilance over COVID-19 vaccines will impact that right to bodily integrity.

  Americans no longer have a right to the expectation of privacy. Despite the staggering number of revelations about government spying on Americans’ phone calls, Facebook posts, Twitter tweets, Google searches, emails, bookstore and grocery purchases, bank statements, commuter toll records, etc., little to nothing has been done to counteract these abuses. Instead, we are daily being accustomed to life in this electronic concentration camp.

  Americans can no longer rely on the courts to mete out justice. The U.S. Supreme Court was intended to be an institution established to intervene and protect the people against the government and its agents when they overstep their bounds. Yet through their deference to police power, preference for security over freedom, and evisceration of our most basic rights for the sake of order and expediency, the justices of the Supreme Court have become the architects of the American police state in which we now live, while the lower courts have appointed themselves courts of order, concerned primarily with advancing the government’s agenda, no matter how unjust or illegal.

  Americans no longer have a representative government. We have moved beyond the era of representative government and entered a new age, let’s call it the age of authoritarianism. In fact, a study conducted by Princeton and Northwestern University concluded that the U.S. government does not represent the majority of American citizens. Instead, the study found that the government is ruled by the rich and powerful, or the so-called “economic elite.” Moreover, the researchers concluded that policies enacted by this governmental elite nearly always favor special interests and lobbying groups.

  It is not overstating matters to say that Congress, which has done its best to keep their unhappy constituents at a distance, may well be the most self-serving, semi-corrupt institution in America.

  In other words, we are being ruled by an oligarchy disguised as a democracy, and arguably on our way towards fascism: a form of government where private corporate interests rule, money calls the shots, and the people are seen as mere subjects to be controlled.

  Rest assured that when and if fascism finally takes hold in America, the basic forms of government will remain: Fascism will appear to be friendly. The legislators will be in session. There will be elections, and the news media will continue to cover the entertainment and political trivia. Consent of the governed, however, will no longer apply. Actual control will have finally passed to the oligarchic elite controlling the government behind the scenes.

  Sound familiar?

  Clearly, we are now ruled by an oligarchic elite of governmental and corporate interests. We have moved into “corporatism” (favored by Benito Mussolini), which is a halfway point on the road to full-blown fascism. Corporatism is where the few moneyed interests—not elected by the citizenry—rule over the many.

  History may show that from this point forward, we will have left behind any semblance of constitutional government and entered into a totalitarian state where all citizens are suspects and security trumps freedom.

  Even with its constantly shifting terrain, this topsy-turvy travesty of law and government has become America’s new normal.

  From Clinton to Bush, Obama to Trump, and now Biden, it’s as if we’ve been caught in a time loop, forced to re-live the same thing over and over again: the same assaults on our freedoms, the same disregard for the rule of law, the same subservience to the Deep State, and the same corrupt, self-serving government that exists only to amass power, enrich its shareholders and ensure its continued domination.

  As I make clear in my book Battlefield America: The War on the American People, the powers-that-be want us to remain distracted, divided, alienated from each other based on our politics, our bank accounts, our religion, our race and our value systems.

  

  Yet as George Orwell observed, “The real division is not between conservatives and revolutionaries but between authoritarians and libertarians.”

  Tyler Durden
  Tue, 02/09/2021 – 23:25

• "Collapse Of Newborn Population Is Really Here": Births In China Plummeted 15% In 2020
  “Collapse Of Newborn Population Is Really Here”: Births In China Plummeted 15% In 2020

  Preliminary numbers assessing China’s births in 2020 released by the country’s household registration system are setting off alarm bells for Beijing, suggesting a continued severe population decline, given the new numbers for last year show a whopping 15% decline in births from the year before.

  “Concerns over the outlook for China’s population have grown after the number of newborns recorded in the country’s household registration system declined 15 per cent during a coronavirus-hit 2020,” South China Morning Post observes of the new numbers. “Last year, a total 10.035 million of newborns were recorded in the household registration system, known as hukou in China, down from 11.79 million in 2019, according to figures released by the Ministry of Public Security on Monday.”

  

  While the hukou system only reveals preliminary information on total births across the population, it’s official demographic stats for COVID-impacted 2020 is expected to come out soon via China’s National Bureau of Statistics based on a once in ten year national census it recently conducted. As SCMP underscores it’s predicted that when total official stats do come out, expectations are for a further decline after previously 2019 saw “the lowest level since 1961” and down from 2018 as well.

  China is the world’s most populous country with the number of people commonly estimated at just over 1.4 billion. When the current working-age population hits retirement, there are fears the decline in births trend will severely impact the world’s second largest economy.

  This also given the latest official figures out of the National Bureau of Statistics show that some 18% of the population is already over 60, with this ageing demographic to grow to one-third of the entire population by 2050.

  The SCMP report cited one prominent research economics professor to say the writing is on the wall. “The collapse of the newborn population is really here,” he warned, writing that:

  “Although we cannot deduce the decline in the birth population in these regions as the annual decline in the country, we consider that idea of having two children is weak and the number of women of childbearing age has decreased, so we need not anticipate further that the birth population in 2020 will drop significantly compared with 2019. The collapse of the newborn population is really here,” said James Liang, a research professor of applied economics at the Guanghua School of Management, Peking University, in a blog post last week.

  The obvious irony is of course that China is responsible for its own undoing on this front, given it’s now feeling the full impact of its draconian and dystopian/totalitarian “one child policy” which was enforced harshly and in effect from 1975 through 2015.

  
  Find more statistics at Statista

  In 2016 and after couples were allowed to have two children, which the government began vocally encouraging, though it increasingly appears too little, too late.

  Sensing the coming population and birth rate woes, the Communist-run People’s Daily in 2018 put out a rare full page editorial urging the following: “Giving birth is a family matter and a national issue too,” and warned that “the impact of low birth rates on the economy and society has begun to show.”

  Thus seemingly overnight the central planners in Beijing went from punishing those who dared to have more children to then claiming bigger families were ‘patriotic’ as part of a national duty. Based on the latest preliminary numbers, it naturally doesn’t appear the population got the message in time. 

  Tyler Durden
  Tue, 02/09/2021 – 23:05

• The US Has FANG, China Has A Booze Company
  The US Has FANG, China Has A Booze Company

  By Cahterine Ngai, Bloomberg reporter and commentator

  China’s equity market is increasingly dominated by just one stock, and that makes gains in its benchmarks look precarious.

  Liquor maker Kweichow Moutai has surged 20% this year to be worth $461 billion, in large part because mutual funds will lag rivals and lose clients if they don’t own it.

  Moutai is now the 12th-largest listed company in the world. For comparison, that’s about twice as valuable as Diageo and Anheuser-Busch InBev combined. The stock accounts for 64% of the Shanghai Composite Index’s gain this year, up from 21% of its advance over the past 12 months.

  

  As well as betting that a stick-with-your-winners momentum trade will continue to be successful, investors are counting on what appears to be an implicit endorsement from Beijing.

  That can be risky: last year, the stock tumbled as much as 8.4% after the influential People’s Daily criticized the high price of Moutai’s liquor. Back in November 2017, the state-run Xinhua News Agency said Moutai shares were rising too fast. The report triggered a plunge in the stock and a broader selloff. As illustration of the company’s rising profile, check out this rap video.

  Tyler Durden
  Tue, 02/09/2021 – 22:45

• JPMorgan Again Tries To Slam Bitcoin, Fails Spectacularly
  JPMorgan Again Tries To Slam Bitcoin, Fails Spectacularly

  With Bitcoin hitting a new all time high again today, rising above $48,000 before easing back a little, it was clearly time for JPMorgan to publish its latest hit piece against the cryptocurrency.

  In its now fourth attempt to talk down bitcoin in the past two months (see here for failed attempt #1, attempts #2, and attempt #3), JPMorgan has published a new report, this time aimed at all those bitcoin fans who buy the currency because other major corporations or funds may follow in Tesla’s footsteps , and purchase millions (or billions) of the cryptocurrency because “while bitcoin got another boost with Tesla’s announcement this week, the 8% allocation of its cash reserves to bitcoin is unlikely to be followed by more mainstream corporates”.

  We disagree completely not least of all because one month ago we predicted exactly that not only would Tesla buy bitcoin following the brilliant example set by Microstrategy, but that many more companies would follow in Elon Musk’s footsteps. As a reminder, this is what we said:

  One such company which we are convinced will announce it is converting billions of its existing cash into bitcoin, is none other than Tesla, whose CEO Elon Musk was urged by MSTR CEO Saylor to make a similar move with Tesla’s money. And since Musk, already the world’s richest man thanks to the most aggressive financial engineering on the planet, has never been one to shy away from a challenge, we are absolutely confident that it is only a matter of time before Tesla announces that it has purchased a few billion in bitcoin.

  But before we demolish the latest joke of an argument presented by JPMorgan, we would like to remind readers of the joke of a thesis that JPM laid out just over two weeks ago, when Bitcoin rose above $40,000 for the first time, and when the largest US bank once again tried to convince its clients that it would not go any higher. In a nutshell, the company warned that because bitcoin now correlates with risk assets, it does not provide “diversification” to investors who seek a safe haven from conventional risk exposure.

  To this our counterargument was simple:

  … so bitcoin sells off as much as or more than stocks do during risk off periods. But why is that any news? And why does JPM even care about bitcoin’s diversification abilities, when instead one should look at it from a very different lens: bitcoin – and all crypto – are merely extremely volatile, ultra-high beta assets which rise much more than stocks during times of massive liquidity injection and drop at or near the pace that stocks drop when liquidity is withdrawn. Over the long run, this means that bitcoin will always win. There is no advanced calculus that one needs to figure this out.

  Indeed, if one want a truly diversified and safe asset one would just buy gold. But that’s not why anyone is buying bitcoin, least of all corporate CFOs and Treasurers, who have made their case for the crypto very clearly: in a world in which just under 1% of US GDP enters the market in the form of newly created central bank liquidity, bitcoin is becoming an asset that while not safe from high beta correlation to other risk assets, is certainly a hedge to not just infinite monetary dilution but to outright fiat and monetary collapse. Ironically, it was JPM itself that admitted this:

  Relative to any other asset class or portfolio hedge, cryptocurrencies would uniquely protect portfolios against a simultaneous loss of faith in a country’s currency and its payments system, because they are produced and they circulate outside conventional and regulated channels.

  Well… yeah, that’s exactly the point guys. And the in the biggest headscrather, JPM itself admitted what Elon Musk just did, namely that “as insurance (or a lottery ticket) against dystopia, some exposure to these assets could be always justified irrespective of liquidity and volatility concerns.“

  Our conclusion was simple:

  Well, in this insane world where everyone should be seeking insurance against “dystopia”, we would be delighted to own as much of the cryptocurrency as we possibly can, “irrespective of liquidity and volatility concerns”. So just like your boss back in 2017, thanks for making the decisive case for bitcoin yet again, John.

  But the clearest and simplest reason why JPM was dead wrong is that since JPM’s latest hit piece was written on Jan 21, bitcoin is up a whopping 50% and anyone who shorted it on bitcoin’s latest “advise” has suffered terminal losses.

  

  That particular JPM report was written by the head of the bank’s cross-asset strategy, John Normand. A similar bitcoin hitpiece was written just days prior by one of the bank’s quants, the author of the popular Flows and Liquidity newsletter, Nick Panigirtzoglou, whose argument was more technical: with bitcoin failing to breach $40K, CTAs, trend followers and momentum-chasing algos and quants would no longer pursue it. Needless to say that argument was also absolutely dead wrong because while momentum-chasing quants may or may not have been long, bitcoin did find enough marginal buyers to push it up from the $30,000 level to just shy of $50,000. Not only that, but in the process it forced short-covering amid what was until recently a record short base…

  

  … with much more squeeze pain coming (incidentally those short bitcoin, are the same people who listened to JPM in the past three months when the megabank was bashing crypto at every opportunity). Which is sad because it was Panigirtzoglou that first came out with the (quite credible) forecast that bitcoin would hit $140,000 as it becomes the millennials’ “digital gold” and keeps rising until the value of gold and bitcoin reach rough parity. Clearly, since then JPM’s Greek quant got the infamous tap on the shoulder, although it remains unclear why: because he truly believes that bitcoin should be lower (why, when even his colleague Normand made the case that bitcoin is the ultimate “dystopia insurance”), or because JPM’s prop traders are hoping to get in and are eager to buy anything that JPM’s clients will sell.

  In any case, fast forwarding to today, when the same Nikolas Panigirtzoglou switched places with John Normand to became the latest JPM banker tasked with sparking at least a model selloff in bitcoin. His argument: try to build a persuasive case against the latest prevailing narrative – as laid out yesterday by Mike Novogratz who in turn took it verbatim from us one month earlier, when we explained that this is the way bitcoin hits $100,000 – that an avalanche of companies will follow in Tesla’s footsteps and buy bitcoin. This is how the JPM quant lays out his argument:

  Tesla’s announcement this week that it has invested $1.5bn in bitcoin or 8% of its corporate cash reserves surprised markets by the magnitude of the purchases and re-invigorated expectations that other corporates will follow with their cash reserves.

  It may have surprise you, Nick, but our readers were warned one month in advance that this is precisely the next key catalyst that will send bitcoin much higher. As for expectations that “other corporates” will buy bitcoin, that’s precisely what they will do. But not according to JPM because…

  … In our opinion, the main issue with the idea that mainstream corporate treasures will follow the example of Tesla is the volatility of bitcoin. The typical portfolio of a corporate treasury consists of bank deposits, money market funds and short-dated bonds. As a result, the annualized vol of a typical corporate treasury portfolio is around 1%.

  This to JPM implies that even small allocations of 1% to bitcoin “would cause a big increase in the volatility of the overall portfolio. For example, if a corporate treasurer allocates 1% of her 1% vol portfolio to bitcoin, the overall portfolio volatility will rise from 1% to 8%. This is because of the large 80% annualized vol of bitcoin.”

  On its surface this argument – which comes from the man who recently predicted that bitcoin would run out of buying power because it had somehow lost momentum when it was down for a day or two – is reasonable unfortunately it is also dead wrong, because no corporate treasurer is buying (or not buying) bitcoin because of its potential volatility. The reason why they would be buying bitcoin is also the main reason why corporate officers do anything: to boost their stock price. And as the case of MicroStrategy (MSTR), which was the first company to convert most of its cash into bitcoin demonstrates so vividly, there is a lot of stock price upside once companies load up on bitcoin.

  

  In fact, we are certain that this is one of the two key reasons behind Musk’s decision to buy bitcoin, especially after he and MSTR CEO Michael Saylor had a conversation in late December, in which Saylor told Musk “If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC . Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.”

  Are such large transactions even possible?

  — Elon Musk (@elonmusk) December 20, 2020

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

  While Panigirtzoglou clearly missed this exchange, Musk did not… and did precisely as instructed. And it’s only a matter of time before countless other companies do precisely as Musk has done, now that he has shown that it is perfectly acceptable to convert as much as 8% of one’s cash reserves into the cryptocurrency.

  There is another reason why companies will want to buy bitcoin and it is precisely the one mentioned by the JPM quant, only for a diametrically opposite rationale. By having such a volatile asset on their books, whose mark-to-market swings have to be captured in the net income line, it gives companies enough of a diversionary buffer which, when applied to some creative accounting, will allow them to either always beat bottom line estimates, or otherwise blame any miss on “one-time” bitcoin volatility. Meanwhile, thanks to having bitcoin on their books, not only do CFOs stand to benefit greatly from its appreciation (see the price of MSTR), but it makes them publicly traded proxies for bitcoin.

  Yes, in a country in which there is still no bitcoin ETF, companies who are loaded to the gills with bitcoin are a perfectly acceptable, DTCC-validated proxy for bitcoin exposure! It wouldn’t surprise us if Musk announced another $1.5 billion bitcoin purchase, and then another… as he hopes to make TSLA a company that becomes a publicly-traded proxy for bitcoin. And that’s why countless other companies will follow suit, perhaps even Apple, which RBC predicted yesterday could buy as much as $5BN in bitcoin as part of launching an “apple exchange” where bitcoin is one of the permitted currencies.

  In short: buying bitcoin is a win-win for all companies involved.

  * * *

  Perhaps knowing in the back of his head that his latest attempt to hammer bitcoin will crash spectacularly (again), Panigirtzoglou concedes that his previous skepticism was wrong, and that perhaps he is wrong this time too…

  there is no doubt that this week’s announcement changed abruptly the near-term trajectory for bitcoin by bolstering inflows and by helping bitcoin to break out above $40k. This reduces one downside risk that we saw previously with bitcoin, i.e. the idea that if its price fails to break out above $40k, the momentum signals would keep decaying till the end of March, inducing further unwinding by momentum traders. The opposite is now happening.

  Yes, Nick, precisely the opposite of what you predicted is now happening. And we suggest you get used to saying that if you plan on continuing to bash bitcoin. As for what this particular “opposite” is…

  With bitcoin breaking out above $40k, momentum traders are forced to amplify the current up move by rebuilding their long bitcoin  futures positions.

  Not only that but those shorts who built up a record bearish position in bitcoin futs as recently as the end of 2020 are now forced to cover at ever higher prices in a market in which the bitcoin float keep shrinking day after day (because every incremental institutional purchase just leaves less tokens freely traded). JPM admits this as well:

  Indeed, our position proxy based on CME bitcoin futures, the preferred vehicle of momentum traders and other speculative investors, saw a sharp almost $1bn increase this week pointing to intense buildup of futures positions.

  

  Obviously, the above observation does not help his case, so the JPMorganite needs to goalseek at least one argument in his behaf which he did by pulling the “flow” pace in the GBTC (grayscale bitcoin trust), the closest thing to an ETF, and which according to the JPM quant has seen a much “subdued” inflow of “$300m per week relative to the torrid $500m per week pace seen in December.” This to Panigirtzoglou suggests that “the additional flow impulse that helped bitcoin to break out above $40k came from more speculative institutional investors like those behind bitcoin futures rather than the ones behind the Grayscale Bitcoin Trust.”

  Well that… and also major corporations like Tesla, which bought bitcoin outright and not via the GBTC and in fact, the whole point of the argument is that as more companies buy bitcoin – as in tokens, not trusts or paper futures – they themselves become bitcoin proxies for others.

  In fact, we are shocked that Panigirtzoglou fails to grasp this simplest counterargument to his entire narrative. It’s shocking because even retail investors now get it, as the JPM analysts points out as well:  “In addition, there appears to have been an increase in the flow impulse by retail investors also this week, as suggested by the spike in volumes at itBit i.e. the exchange via which retail purchases via Paypal are routed.”

  So momentum chasers are buying, Elon Musk is buying, retail is buying, companies such as MSTR buy it and see their stock price explode 10 fold but… other companies won’t buy it. Well, that’s pretty much the gist of JPM’s argument:

  In all, while bitcoin got another boost with Tesla’s announcement this week, the 8% allocation of its cash reserves to bitcoin is unlikely to be followed by more mainstream corporates.

  At this point it makes the most sense to just agree to check back in a month and see just how off the JPMorgan strategist was… again. Amusingly, at the very end of his note, the quant himself realizes that his entire argument is as hollow as the Marriner Eccles building, and does a “yes but…”:

  Irrespective of how many corporates eventually follow Tesla’s example, there is no doubt that this week’s announcement changed abruptly the near-term trajectory for bitcoin by bolstering speculative institutional flows via bitcoin futures as well as retail flows. How sustained this week’s price surge becomes would depend in our opinion on whether less speculative institutional flows like those behind the Grayscale Bitcoin Trust follow suit.

  No, Nick, you are painfully wrong again… just like you were wrong the last time you looked at your favorite GBTC as a proxy of… something… and predicted that bitcoin would drop. It did not. Furthermore, it’s not “irrespective of how many corporates follow Tesla’s example” – that’s precisely the ballgame right there. Once we get two more companies, then 4, then 8, well even quants know what sequences that is.

  But while we have no question that many more companies – including blue chip names like Apple – will eventually buy bitcoin, the real question we have is when JPM’s biggest clients, like Bridgewater for example, will announce that they too have bought bitcoin. And Bridgewater will. And since Nick completely missed the Tesla purchase of bitcoin when he could have simply read our post on the matter (as a reminder, JPMorgan analysts, you guys are paid to predict the future, as in what will happen, not explain the past and yet that’s all you’ve been doing here for the past three months) we will be helpful and point Mr. Panigirtzoglou to what Ray Dalio said just two weeks ago:

  “I and my colleagues at Bridgewater are intently focusing on alternative storehold of wealth assets and expect Bridgewater to soon offer an alt-cash fund and a storehold of wealth fund in order to better deal with the devaluation of money and credit that we consider to be a major risk and opportunity, and Bitcoin won’t escape our scrutiny.”

  And the punchline:

  “It seems to me that Bitcoin has succeeded in crossing the line from being a highly speculative idea that could well not be around in short order to probably being around and probably having some value in the future….To me Bitcoin looks like a long-duration option on a highly unknown future that I could put an amount of money in that I wouldn’t mind losing about 80% of.”

  Translation: in the next few weeks, Bridgewater will announce on its own or in response to external prodding…

  Dear @RayDalio how much bitcoin has Bridgewater bought so far?

  — zerohedge (@zerohedge) February 10, 2021

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

  … that it has bought billions worth of bitcoin, and that will be the catalyst that sends the crypto above $50,000, $60,000 or perhaps even $100,000. Meanwhile, JPM will still be looking at the GBTC and scratching its head wondering how it could give its clients such terrible advice… again.

  Tyler Durden
  Tue, 02/09/2021 – 22:25

• Trump’s Maximum Pressure Campaign Lives On Under Biden’s Command
  Trump’s Maximum Pressure Campaign Lives On Under Biden’s Command

  Submitted by Southfront,

  The Islamic Revolutionary Guard Corps received 340 new speedboats during a ceremony at the southern Iranian port city of Bandar Abbas.

  The delivered speedboats are co-produced by the IRGC Navy and the Defense Ministry and are capable of carrying various types of missiles to attack enemy targets. The delivery took place alongside the celebration of the 42nd anniversary of the Islamic Revolution. These boats are to be actively used in the Persian Gulf, Sea of Oman, and the Caspian Sea.

  The IRGC Navy is focused on smaller vessels, aimed at swarming a potential adversary. The newly-delivered speedboats were described as agile, maneuverable and equipped with radar-evading stealth technology.

  Tehran is continuing to reinforce its positions and pursue its interests. This is prompted by the fact that US President Joe Biden’s vow to rejoin the Nuclear Deal turned out to be entirely hollow. Iran demanded that the sanctions imposed by the Trump Administration be removed, otherwise rejoining the deal meant nothing.

  On February 8th, Biden confirmed that sanctions on Iran wouldn’t be lifted, with White House Press Secretary Jen Psaki saying that such a “big policy change” wasn’t planned.

  To show some “reduction in pressure”, the USS Nimitz carrier strike group was pulled out of the region, in a signal that an escalation with Iran isn’t planned. That happened as Tehran, Moscow and Beijing announced they would hold joint naval drills.

  In response, US Central Command’s Gen Kenneth McKenzie said that Iran was the “Main Driver of Instability”, in his first public address since Biden became president. McKenzie repeated a usual a US accusation against Tehran, claiming that for more than forty years it “has funded and aggressively supported terrorism and terrorist organizations.” The “maximum pressure” campaign is simply “on hold”, but is not canceled.

  Iranian allies in the Middle East continue actively operating, hammering US interests and those of their allies.

  US convoys continue suffering regular attacks in Iraq, with two being subject to attacks on February 7th. In Lebanon, Hezbollah said that it would continue targeting and downing Israeli drones and more. Israel’s lack of activity in the previous days is quite notable.

  The most significant success is being achieved in Yemen, by the Houthis. The Ansar Allah movement is pushing the Saudi-led coalition back, as it destroyed ammunition depots and weapons in Marib. Riyadh also intercepted a swarm of suicide drones attributed to the Houthis, but there was no confirmation.

  Saudi Arabia is also remaining active in airstrikes, and violating the al-Hudaydah ceasefire, but with few results to show.

  US and allied interests are being pressured all around the Middle East, as the Biden administration refuses to turn its back on any of Trump’s “maximum pressure” policies. The withdrawal of the USS Nimitz CSG is a likely a welcome sign, but the sanction regime remaining, surely, spoils the party.

  Tyler Durden
  Tue, 02/09/2021 – 22:05

• Japanese Submarine Collides With Bulk Carrier While Surfacing
  Japanese Submarine Collides With Bulk Carrier While Surfacing

  A Japanese submarine collided with a massive dry bulk carrier as it attempted to surface on Monday off the southwestern coast of Japan, according to Nikkei Asia. 

  The Soryu-class diesel-electric attack submarine, which first entered service with the Japan Maritime Self-Defense Force (MSDF) in 2009, was attempting to surface 31 miles off the Cape Ashizuri in southwestern Japan on Monday morning, around 11:00 a.m. 

  Japanese Chief Cabinet Secretary Katsunobu Kato said the submarine was on a training exercise while surfacing and tried to avoid the Hong Kong-registered dry bulk carrier Ocean Artemis, at the very last minute, but failed to do so, severely damaging the submarine’s communication systems and diving planes. 

  Refinitiv shipping data plots Ocean Artemis’ movements in the last 48 hours with the approximate incident area. 

  

  “Soryu scraped the hull of the vessel as it was surfacing. It is extremely regrettable the MSDF submarine has collided with a commercial ship,” Defense Minister Nobuo Kishi said. He added an investigation has already been launched.

  Bradley Martin, a RAND Corp analyst and former US Navy captain, analyzed the submarine’s damage via photographs. Due to the damage sustained in the collision, he said the submarine’s capabilities were extremely limited.

  “I wouldn’t call the damage minor. The submarine can’t dive and can’t communicate,” Martin told CNN.

  Photos taken from the Coast Guard’s Saab 340B maritime patrol aircraft show the badly damaged submarine. 

  

  The question remains why didn’t the submarine’s crew use active sonar to detect incoming objects while surfacing? Though one downfall to using active sonar is that it emits signals that other submarines and vessels in the area can detect. However, passive sonar could have also been used while it provides less information about the surrounding area than its active counterpart, a massive dry bulk carrier underway should’ve been detected. 

  Tyler Durden
  Tue, 02/09/2021 – 21:45

• Our Animal Farm
  Our Animal Farm

  Authored by Victor Davis Hanson via AMGreatness.com,

  George Orwell published Animal Farm in August 1945, in the closing weeks of the Pacific War. Even then, most naïve supporters of the wartime Soviet-British-American alliance were no longer in denial about the contours of Moscow’s impending postwar communist aggression. 

  The short, allegorical novel’s human-like farm animals replay the transition of supposedly 1917 revolutionary Bolsheviks into cynical 1930s Stalinists. Thereby, they remind us that leftist totalitarianism inevitably becomes far worse than the supposed parasitical capitalists they once toppled.

  Orwell saw that the desire for power stamps out all ideological pretenses.

  It creates an untouchable ruling clique central to all totalitarian movements. Beware, he warns, of the powerful who claim to help the helpless.

  

  Something so far less violent, but no less bizarre and disturbing, now characterizes the American New New Left. It is completing its final Animal Farm metamorphosis as it finishes its long march through our cultural, economic, and social institutions. Leftists may talk of revolutionary transformation, but their agenda is to help friends, punish enemies, and to keep and expand power.

  First, remember the 1960s and 1970s agendas of the once impotent, young, and supposedly idealistic leftist revolutionaries.

  We were lectured 60 years ago that “free speech” preserves were needed on university campuses to be immune from all reactionary administrative censorship. Transparency and “truth” were the revolution’s brands.

  The First Amendment was said by them to be sacred, even as the “free speech movement” transitioned to the “filthy speech movement.” Leftists sued to mainstream nudity in film. They wanted easy access to pornography. They mainstreamed crude profanity. The supposed right-wingers were repressed. They were the “control freaks” who sought to stop the further “liberation” of the common culture. 

  

  Ullstein bild via Getty Images

  In those days, the ACLU still defined the right of free expression as protecting the odious, whether the unhinged Nazis, the pathetic old-Left Communists, or nihilistic Weather Underground terrorists. 

  “Censorship” was a dirty word. It purportedly involved the religious bigots and medieval minds that in vain had tried to cancel ideological and cultural mavericks and geniuses from Lenny Bruce to Dalton Trumbo. “Banned in Boston” was a sign of cretinism. Only drunken “paranoids” like Joe McCarthy resorted to “blacklists.” We were reminded that the inferior nuts tried to cancel the brilliant careers of their betters whom they disliked, or feared.

  The Right supposedly had sunk into fluoride and “precious bodily fluid” paranoias, and “Who lost China?” conspiracy theories. Conservatives, the radicals lectured us, masked the poverty of their thinking by “red-baiting.” They talked as if “commies” and “insurrectionists” were around every corner—in hopes of militarizing the country, and using police and troops to intimidate the “people.”

  Snooping, surveillance, wiretaps—all that and more was awful—the purported work of nutty J. Edgar Hoover. His flat-topped, wing-tipped “G-men” usually outnumbered Black Panthers, Weathermen, and SDS members at secret strategy sessions. 

  Hollywood went wild in the 1960s and 1970s by warning us about “them.” Endless movies detailed the solo efforts of heroes, who were watched and threatened by the “government,” working hand in glove, of course, with either corporations or the “rich.” In films like “Three Days of the Condor,” “The Conversation,” or “Blowup,” we were warned of the nefarious powers of surveillance. 

  Fearing Russia was the mark of a conspiracist nut. In films like “The Russians are Coming, the Russians Are Coming,” we were reminded that the paranoia about the Soviets was as deadly as the Soviets themselves, who were pleasant enough, not much different from us.

  Students in the 1960s high schools were spoon-fed Nineteen Eighty-Four, Animal Farm, Brave New World, and other dystopian novels. Orwell and Huxley warned them of the dangers of a super-spy apparat, a one-party state that reorders a docile subservient population, and the combination of “science” with thought control—the sort of stuff that Nixon or Goldwater was no doubt plotting.  

  So better to be an individualist, the Left preached, a rebel at war with all orthodoxy and conformity, a “Rebel Without a Cause,” Holden Caulfield, or one of the good renegades in “The Wild Ones.” We were to worship James Dean, Marlon Brando, and Steve McQueen because they were “free,” “didn’t give a s—t,” and demolished “the Man’s” silly imposed “rules and regulations.” “Easy Rider” was the 1960’s bible.

  On campus, professors began to drop F-bombs in class. They dressed like students, tore down hierarchies between student and teacher (“Just call me Mike”). Once staid academics now invited edgy campus speakers to blast America. In melodramatic fashion, they considered themselves perennially teaching from the barricades. 

  We were told that they were the frontline speakers of truth to power. These were the nonconformists who had defeated loyalty oaths. After all, they dated their students and joined radicals to storm the college president’s office. They preached a “do your thing” credo of letting professors pretty much say whatever they wished.

  Reporters were either iconoclastic Gonzos or shoe-leather investigators on the scent of deep state overreach. They were obsessed with wrongdoing at the CIA and FBI. Politicians, of course, weren’t to be trusted—given the corporations who pulled their puppet strings.

  The enemy of America, we were told, was the “big guys,” especially the international conglomerates like ITT with global reach. The corporationists refined the arts of the cartel, trust, and monopoly. “Small is beautiful” was the antithetical mantra. 

  Radical sons of the Left crusaded against “dirty money” and “the plutocratic rich” with their “concentration of wealth”—as if the Rockefellers or the Gettys posed existential threats to America by their abilities to insert huge amounts of cash to warp elections or to buy officials. 

  Generals were caricatured as caudillos, cigar choppers with shades, showy ribbons and bronze on their chests, and oversized hats and epaulets. We were warned they threatened us with a militarized police state. 

  The “revolving door” was a mortal sin, as the tentacles of the Pentagon octopus now squeezed out public money for bombs, rockets, and jets to fight needless wars. About every three weeks Ike’s farewell warning about the “military-industrial complex” was trotted out by liberal columnists to remind us of felonious corruption. 

  Civil and women’s rights were the twin pillars of the 1960s radicals. From Martin Luther King, Jr. to Malcolm X, the themes were for “white America” to live up to the ideals of their Constitution, to finally realize the “promises of the Declaration of Independence” and to treat people on the basis of the “content of their character” and not on “the color of their skin.” The problem was never 1776 or 1787, but those who had not yet fully met the Founders’ exceptional ideals.

  A “color-blind society” was a ’60s sobriquet. Women strove to ensure girls had the same rights as boys, from leadership roles to sports. 

  The point of the 1960s, again we were taught, was to tear down the rules, the traditions and customs, the hierarchies of the old guys. The targets were supposedly the uptight, short-hair, square-tie, adult generation who grew up in the Depression, won World War II, and were fighting to defeat Cold War Soviet Union. 

  The good guys, the students, and the activists, if they only had power, were going to break up corporations, shame (or “eat”) the rich, and bring in young, hip politicians. Reformers like the younger Kennedy brothers, the John Kerry war hero-resisters, the Bay Area Dianne Feinsteins, and the hip Nancy Pelosis would disrupt the “status quo” of politics.  

  They would all push hard for assimilation and integration of the races, and the equality of the sexes in pursuit of universal equality of opportunity. The mantra of the 1960s and 1970s was “opportunity,” Remember the 1964 federal EEOC—the Equal Employment Opportunity Commission.

  

  Ullstein bild via Getty Images

  Our Nightmare, 2021

  Fast forward a half-century. What did these now-late septuagenarians give America? 

  Yes, the downtrodden pigs, the exploited horses, and the victimized sheep finally did expel Farmer Jones from America’s Animal Farm. 

  But in his place, as Orwell predicted, revolutionary pigs began walking on two feet and absorbed all the levers of American cultural influence and power: the media, the bureaucracies, Wall Street, Silicon Valley, publishing, the academy, K-12 education, professional sports, and entertainment. And to them all, the revolutionaries added their past coarseness and 1960s-era by-any-means-necessary absolutism.

  We are now finally witnessing the logical fruition of their radical utopia: Censorship, electronic surveillance, internal spying, monopolies, cartels, conspiracy theories, weaponization of the intelligence agencies, pouring billions of dollars into campaigns, changing voting laws by fiat, a woke revolutionary military, book banning, bleeding the First Amendment, canceling careers, blacklisting, separate-but-equal racial segregation and separatism. 

  Conspiracies? Now they brag of them in Time. Read their hubristic confessionals in “The Secret History of the Shadow Campaign That Saved the 2020 Election.” Once upon a Time, radicals used to talk of a “secret history” in terms of the Pentagon Papers, or a “shadow campaign” in detailing Hollywood blacklisting. They are exactly what they once despised, with one key qualifier: Sixties crudity and venom are central to their metamorphosis. 

  Our left-wing American revolutionary cycle from the barricades to the boardroom was pretty quick—in the manner that the ideology of the Battleship Potemkin soon led to Stalin’s show trials, or Mao’s “long march” logically resulted in the Cultural Revolution. The credo, again, is that the noble ends of forced “equity” require any means necessary to achieve them. 

  The Left censors books in our schools, whether To Kill a Mockingbird or Tom Sawyer. It is the Left who organizes efforts to shout down campus speakers or even allows them to be roughed up.  

  The Left demands not free-speech areas anymore, but no-speech “safe spaces” and “theme houses”—euphemisms for racially segregated, “separate-but-equal” zones. “Microaggressions” are tantamount to thought crimes. The mere way we look, smile, or blink can indict us as counterrevolutionaries. Stalin’s Trotskyization of all incorrect names, statues, and commemoratives is the Left’s ideal, as they seek to relabel Old America in one fell swoop. No one is spared from the new racists, not Honest Abe, not Tom Jefferson, not you, not me.

  For “teach-ins,” we now have indoctrination sessions. But the handlers are no longer long-haired 1960’s dreamy, sloppy, and incoherent mentors. They are disciplined, no-nonsense brain-washers.

  The Left’s Russia is our new old bogeyman. Putin is the new “We will bury you” Khrushchev. 

  The Left spun conspiracy theories about computer pings in Trump Tower, and nefarious meetings of Trump’s campaign officials colluding with Russian agents. CNN and MSNBC tell us that the whole plot was laid out in a bought dossier—as the fantasies of Christopher Steele’s canonical hired hit piece became the Left’s version of The Protocols of the Elders of Zion. 

  No longer were we told that our toothpaste and water were making us sterile. Instead, the Duke Lacrosse team was emblematic of the return of epidemic 1930s-style racial rape. The Virginia frat boys routinely roughed up and had their way with girls. The racist Covington kids, on the National Mall no less, mocked and insulted a noble indigenous combat veteran. And Jussie Smollett fought off racist thugs while managing to hold his sandwich and cell phone, as he stumbled home with a racist rope around his neck, stained with iconic bleach. “Hands up, don’t shoot” should have been true, even if it wasn’t.

  Assimilation and integration are not our goals. Instead, we are to ferret out “cultural appropriation” and the odious culture of “white supremacy” and “unearned privilege.” “All men are created equal. But some are more equal than others” is now posted on the electric barn wall.  

  Deprogramming 74 million “whites” and “Republicans” is the advice on the pages of the progressive Washington Post. Don’t like an idea? Then wash clean the polluted minds of those who embraced it.

  The new and improved ACLU’s job is to encourage the suppression of conservative free speech. ACLU trains its handlers not to protect unfettered speech, but to spot “hate speech.” 

  To advocate burning or destroying a book is not some nightmare from Fahrenheit 451, but a woke way to “stop the hate.” 

  A new Orwellian phrase is “free speech is not free reach”—as leftists become the intellectual inheritors of the racists of the open-housing fights of the 1950s and 1960. The old racist boilerplate of apartment owners and realtors was “You can live anywhere you want, just not here.” The new hate mantra of Silicon Valley cartels is, “You can tweet or socially post anywhere you like—if you can manage to find a place.”

  Surveillance and spying are now good. How else to ferret out “right-wingers,” “white supremacists,” and “insurrectionists”? 

  So the FBI and CIA have transmogrified into heroic agencies run by stalwart social activist fighters like John Brennan, the old Gus Hall supporter, James Clapper, James Comey, and Andrew McCabe. They cut to the quick to achieve social justice, without the messy give and take of Congress, or that albatross, the relic Constitution.

  What a wonderful world they have created: Eavesdropping on the national security advisor, forging FISA documents, spying on American citizens, aiding one presidential candidate by surveilling another. 

  Finally, they can use their skills and surveillance to investigate and hound the “right” enemies, for the “right” causes.” The CIA and FBI always secretly wished to be beloved by the Left. Now they are deified.

  And the military elite?

  Militarization is now beautiful. The U.S. Army may become our People’s Revolutionary Army as generals sniff out counterrevolutionaries hidden deeply in their ranks. Maybe a cleansing purge or two is necessary, in the Soviet fashion.

  Barb-wiring the capitol and stocking it with camouflaged troops send the message that the military is, at last, woke and in control of America’s central nervous system. Corporate profiteering for retired generals and admirals is a necessary amplifier of their critical work. How else to have the resources to spot new Mussolinis, Nazi tactics, Auschwitz caging, and the al-Qaeda-like terrorists among us? 

  Bank of America helps to find out which enemy of the people bought which coffee where. The financial heroes are not hip basement day traders taking down hedge funds by boomeranging them their own manipulative tactics, but Wall Street hedge fund traders, the holy wall between sober investment and Trumpian barbarians at the gate.

  Could we have ever stopped the hate without the help of billions of dollars from Mark Zuckerberg and George Soros? Why break up monopolies and cartels when their profits pour into progressive wokeness? Only their warping of communication and knowledge retrieval correctly guides Americans to the “right” conclusions. Jeff Bezos’ net worth alone is as much as the combined GDP of Idaho and Alaska. But then again, we are to think he is far more valuable than two states full of bitter clingers, dregs, and deplorables. 

  The media? It is a Ministry of Truth. Informers and readers beg the Great Leader to let drop his favorite flavor of ice cream or the details of the Oval Office makeover. There is no need for censorship: the media are the censors. Whatever sinister idea a paranoid politician has for muzzling journalists, reporters themselves have already trumped it. Pravda is their model. Who can be disinterested when there is a war to be fought for diversity and equity, against climate change and white supremacy?

  The revolutionary animals are now running the farm in a way that would be nightmarish even to Farmer Jones.  

  They won. They are now one with—but also far, far worse than—what they rebelled against.

  Tyler Durden
  Tue, 02/09/2021 – 21:25

• "They Don't Want To Stop At All": Facing Shortage Shockwaves, Taiwan Semi Rushes To Build Infrastructure
  “They Don’t Want To Stop At All”: Facing Shortage Shockwaves, Taiwan Semi Rushes To Build Infrastructure

  In the midst of a massive semiconductor shortage that we have been documenting at length, Taiwan Semiconductor Manufacturing is rushing to try and build new facilities through the Chinese New Year in order to meet demand. 

  TSMC is one of the biggest suppliers of chips to company like Apple, Google and Qualcomm. As a result of a worldwide shortage in chips that was brought on due to the pandemic, they are now rushing to try and get a new factory in the southern Taiwanese city of Tainan built. It’ll be “the world’s most advanced 3-nanometer chip production plant,” according to Nikkei. The company is also building a research and data center in Hsinchu. 

  Construction the new facility will take place throughout 2021, with completion expected in 2022. 

  

  One executive said of TSMC’s expansion: “We received a notice from TSMC that it is giving 4,000 New Taiwan dollars ($145) a day as an extra bonus for every worker willing to come during the Lunar New Year… that is literally at least double the average daily wage for front line workers. Even if that’s only roughly a few extra days of building time [during the holiday], they don’t want to fully stop at all. That shows their commitment to speed up construction and development and confidence for future demand.”

  In addition to the 3nm plant, the company is also preparing to boost its capacity to make 5nm chips. These chips are using in the latest 5G iPhone 12s and new Mac core processors. TSMC wants to boost production by 70% from the end of last year. 

  It’ll be resuming construction “a few days earlier” than most coming out of the Lunar New Year in southern Taiwan. TSMC is also boosting capex by $25 billion, to $28 billion, this year. 

  

  Bill Chiu, chairman of Gudeng Precision, a TSMC supplier, said: “Construction workers across Taiwan are all attracted to TSMC’s sites as it is paying much higher wages than elsewhere… It’s really the strong pillar of Taiwan’s economy and the center of the tech ecosystem.”

  One local fire safety manager said: “For electroplating specialists on construction sites, the daily wage has recently jumped from NT$6,000 to NT$12,000 a day. It’s stunning and unprecedented.”

  As a result, a worker shortage has continued to intensify heading into the final quarter of 2020, one construction supervisor told Nikkei: “TSMC is a key reason… The company and its suppliers are attracting many workers from northern to southern Taiwan, while in the past year there are also many new construction projects for residential and commercial buildings in Greater Taipei. People are all fighting over labor resources. Even with higher wages, we still have a hard time finding enough workers.”

  

  “The average daily wage for regular construction workers has risen from NT$3,000 to NT$4,000 in less than a year,” the Nikkei report noted.

  The boom has taken over Taiwan – so much so that many tech executives refer to Taiwan as the “island that TSMC built”. TSMC is Taiwan’s largest company by market cap and accounts for 33% of its local stock market value and 20% of private sector investment. Taiwan’s semiconductor industry has been thrust into the spotlight this year amidst the ongoing semi shortage. 

  As we documented just days ago, the semi shortage is turning into a full blown crisis. It is now being referred to as the “most serious shortage in years”, with Qualcomm’s CEO saying last week that there were now shortages “across the board”, according to Bloomberg. 

  But it isn’t just Qualcomm executives speaking out: other industry leaders have warned in recent weeks that they are susceptible to the shortages. Apple said recently that its new high end iPhones were on hold due to a shortage of components. NXP Semiconductors has also warned that the problems are no longer just confined to the auto industry. Sony also said last week it may not be able to to fully meet demand for its new gaming console in 2021 due to the shortage. Companies like Lenovo have also been feeling the crunch.

  

  Neil Mawston, an analyst with Strategy Analytics, said: “The virus pandemic, social distancing in factories, and soaring competition from tablets, laptops and electric cars are causing some of the toughest conditions for smartphone component supply in many years.” 

  Mawston says that prices for some smartphone components are up as much as 15% the last 6 months. 

  Tyler Durden
  Tue, 02/09/2021 – 21:05

• Get Ready For More "Fisker"-Like Follies
  Get Ready For More “Fisker”-Like Follies

  Authored by Bruce Wilds via Advancing Time blog,

  A folly is a costly undertaking having an absurd or ruinous outcome. Those who are glad to see the return of the “Old Guard” to power may have forgotten the many scandals of the Obama years or how upon leaving the White House the Clintons took with them “the china.” While Trump’s style may not have appealed to everyone the vindictiveness and malicious calls to go after him and his supporters will do little to bring America together.

  A song written and performed by American popular music singer-songwriter Jimmy Buffett titled, “Gypsies in the Palace” describes what happens when those in charge take advantage of their position. In the song, Buffett talks about how, “In days of old, when knights were bold and journeyed from their castles, they would leave what they thought were “trusty men” to watch over things. Unfortunately, it was not uncommon for these men to soon help themselves to pig and peach then drink from the King’s own chalice. In short, to do a bit of plundering for their amusement and benefit.

  With the above in mind, I would like to re-post an old article from this blog. The article contains all the good stuff, like villains, and theft. Some parts have now been put into bold type to highlight the irony of what could be considered an interesting coincidence. It also stands as a reminder as to the limits of big government and suggests that we be careful of what we wish for. 

  The current political atmosphere is ripe for crony capitalism to flourish and boondoggles to sprout up everywhere, especially when it comes to going “green.” 

  Consider this a trip down memory lane, please enjoy.

  *  *  *

  Fisker Automotive Another Government Folly 

  Sunday, April 28, 2013

  Great Looking Car

  Fisker should be renamed “fiasco”, for that is what it has become. It appears that the Obama administration. was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion-dollar government loan, nearly a year before U.S. officials froze the financing in June 2011. This was done after Fisker presented new information that called into question whether key milestones – including the launch of the company’s signature, $100,000 Karma hybrid – had been achieved, according to a credit report prepared by the Energy Department.  Fisker had received a total of $192 million of the $529 million loan before it was suspended. It should be noted that the plant was never completed and never produced any Fisker cars.

  

  The Company Failed!

  In the June 2010 email, Sandra Claghorn, an official in the Energy Department loan program office, wrote that Fisker “may be in limbo due to a lack of compliance with financial covenants” set up by the department to protect taxpayers in the event of default. Another document, from April 2010, listed milestones that Fisker had not yet met. The potential loss of $171 million would be the largest loss of federal loan money since the failure of Solyndra a solar panel maker. That company’s collapse, which came despite a $528 million loan from the Energy Department, has triggered criticism of the Obama administration’s green energy program. The Energy Department seized $21 million from Fisker this month as it continued to seek repayment from the carmaker for the 2009 loan. A payment from Fisker was due Monday but was not made.

  Rep. Jim Jordan, chairman of the Oversight subcommittee on economic growth and regulation, said it is hard to understand why the Energy Department ever thought Fisker was a viable company that should receive taxpayer money. Henrik Fisker, the company’s namesake, and founder was scheduled to testify at Wednesday’s hearing. Fisker, who was forced out as CEO as the company’s troubles mounted, said in prepared testimony that he remained proud of the company’s “cutting edge technology,” which he said could “pave the way for a new generation of American car manufacturing.” Fisker disputed claims by some critics that the Anaheim, Calif.-based company needed the federal loan to survive. Fisker said a high-ranking Energy Department official approached him in 2008 and asked him to apply for the loan, which is intended to boost electric cars and other advanced vehicles.

  It was Vice President Joe Biden who announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. What does Joe Biden have to do with Fisker Automotive? On the surface, the answer would seem to be nothing at all, or at least it did until Biden himself revealed the startup automaker’s plans to introduce a new series of electric vehicles under the Project Nina banner. Not only that, Fisker just so happens to have decided to build cars in Biden’s home state. Coincidence? Fisker has denied that any political influence was used to obtain the loan or in negotiations over its terms, according to Russel Datz spokesman for Fisker, coincidence is exactly what it is, a good number of reasons exist to choose the former GM plant in Wilmington, Deleware, and the fact that it’s Biden’s home state is not one of them. Claymont, Deleware  home of Biden is roughly eight and a half miles from Wilmington.

  Nicholas Whitcomb, who directed the Energy Department’s advanced-vehicle loan program, testified that $8.4 billion in advanced-vehicle loans have been given out to five auto companies so far. While Fisker has performed poorly, he said, loans to firms like Ford, Nissan, and Tesla have helped build factories and are all scheduled to be repaid. Fisker ran into trouble from the get-go. The company’s business model was to design an attractive sports car and then purchase off-the-shelf parts from suppliers. But that unusual strategy carried risks. Fisker’s real legacy may be the damage it has done to federal support for other electric vehicles. The Energy Department hasn’t ”closed on a loan or loan guarantee or conditionally committed to doing so under either program since September 2011.” The reasons? Applicants are skittish about going through a “lengthy and burdensome” application process and facing the same pressures that faced companies like Solyndra and Fisker.

  Efforts have been made to blunt other criticism of the loan by the Obama administration, by stressing that Fisker was an anomaly. Supporters of the Obama Administration’s “green energy” loan program have banged away at the idea that Fisker’s problems stem from a lack of demand for electric cars in general, but the government should press on because it is in their opinion the right thing to do. It was announced in August 2012 GM,  would be halting the manufacture of its infamous Chevrolet Volt for at least four weeks, few were shocked. The Volt was awarded the 2010 “car of the year” title, but As of this writing, GM has sold 10,666 Volts through July, which, luckily for the automaker, is a major improvement over the 2,870 it sold at this time a year earlier. GM had made predictions that this year, over 45,000 units of the car would be sold. In other words, even if Fisker is an outlier, it’s casting a long-shadow over electric-car policy.

  

  Back in October of 2011 the Obama administration has defended its decision to allow Fisker Automotive to assemble its high concept electric sports sedan, the Karma, in Finland, even though U.S. taxpayers had made a major investment in the car’s development, saying none of the American money was spent on the car’s overseas assembly. But Republican critics this weekend challenged the administration’s explanation, saying federal loans should have only supported applicants who would be building their cars on American soil. “The Department of Energy and Fisker executives are splitting hairs about where the money went,” said Rep. Tim Murphy, a Pennsylvania Republican who sits on the House committee that has been investigating the Obama Administration’s “green energy” loan program. “Ultimately, American taxpayer dollars went to a Finnish automaker to build high-end luxury automobiles for Hollywood.”

  A report on ABC News’ “Good Morning America” about Fisker Automotive, the recipient of a “green energy” loan in 2010, quoted auto industry experts who said Fisker’s loan invited comparisons to the ill-fated Energy Department loan to Solyndra, a solar panel manufacturer that received $535 million in taxpayer support, declared bankruptcy earlier this year. That federal loan is now the subject of investigations by the Justice Department and by inspectors general from the Energy and Treasury departments. The Washington Post has discovered that the Energy Department quietly eased expectations for Fisker’s projected car sales volume after it conditionally approved the loan, and made allowances for scaling back projections in the final loan agreement, this is not the way taxpayer money should be spent. The Fisker folly, and its failure, reeks of government cronyism and waste, someone should be held accountable.

  Tyler Durden
  Tue, 02/09/2021 – 20:45

• Ex-Robinhood Employees Detail Inadequate Customer Support In Suicide Lawsuit
  Ex-Robinhood Employees Detail Inadequate Customer Support In Suicide Lawsuit

  Former employees of Robinhood have detailed a pattern of inadequate customer support, including unqualified customer service agents offering financial advice, licensed brokers “too busy” to help on urgent matters, and unanswered pleas from customers, according to CBS News.

  The stock trading app company – a major player in last month’s short-squeeze insanity – is now the subject of a Monday lawsuit brought by the family of 20-year-old college student Alex Kearns, who committed suicide last June after mistakenly thinking he was on the hook for hundreds of thousands of dollars in stock market losses over options held in his Robinhood account.

  

  The ex-employee accounts are included in the suit which claims wrongful death, negligent infliction of emotional distress and unfair business practices. Kearns’ parents told CBS News they believe their son would still be alive if Robinhood had answered any of his three urgent customer support inquiries before he killed himself.

  “He just needed a little help,” said his father, Dan Kearns.

  According to documents obtained by CBS News through a Freedom of Information Act request, other customers have also taken issue with Robinhood’s customer service, with many raising concerns about the company’s response time. In 2020, the Federal Trade Commission received more than 650 complaints from customers about Robinhood Financial LLC and its subsidiaries, more than twice as many as its competitors Etrade, Schwab, Fidelity and TD Ameritrade. A common theme among the complaints filed against Robinhood: getting “no response” from the company. -CBS News

  “I am unable to withdraw my money or invest in stock from my account,” wrote one user, who noted that Robinhood hadn’t responded to his last email in over a week. “In need of money in these difficult times as i lost my job yesterday.”

  Another disgruntled user was upset at the company’s automated responses, writing “I do not have a clue what is happening to my claim or if it’s even open anymore,” adding “They have no way to contact by phone so i can’t even communicate with anyone.”

  Robinhood used to have a telephone hotline for customers, however according to one former call center employee, Katy LaPlante (who worked as an independent contractor for Robinhood in 2016 and 2017), customers with serious financial issues were not receiving the help the needed.

  The people who called the hotline were losing money, she said, but she was unable to help. “But when we’re talking about, like, ‘Why couldn’t I sell my stock?'” she said, “What service could I give you? I couldn’t give you a service. I had to basically put you off.”

  Five other former customer service workers — including one who left the company last fall — all told CBS News Robinhood’s brokers were rarely available to help users who needed financial advice.

  LaPlante said she pushed to get people the help they needed. “If it was really egregious, I would pitch a huge fit. And I mean, a fit. Like, put down my phone, put you on hold, start really getting aggressive with my supervisors But how many times in a day can you do that?” -CBS News

  The company eventually got rid of the customer support phone line because they could not keep up with the volume of calls.

  “I feel sick,” said LaPlante following the news of Kearns’ death. “because [customer service] was an issue then. It’s an issue now. Why didn’t you fix it?”

  Dan and Dorothy Kearns say Robinhood never should have allowed such an inexperienced person access to the types of trading he was engaged in.

  “I’m angry that they can put a number like that in front of someone, whether it’s a 20-year-old kid or a 60-year-old experienced trader,” said Dorothy Kearns.

  “I think he was in just pure terror about his situation,” added Dan.

  Before his death, Alex wrote to the company three times seeking clarification. “I was incorrectly assigned more money than I should have,” he wrote, explaining that he’d structured his options trade in a way that should have protected him from losing this much money. “Could someone please look into this?”

  The company sent Alex an automated reply that assigned a case number and told him the company’s response time may be delayed.

  “Alex had written them asking for help,” said Dan Kearns. “And unfortunately, that’s the only way that Robinhood communicates, is through email. And their response was a canned reply, basically, ‘We’ll get back to you later.'” -CBS News

  After Alex’s suicide, Robinhood sent him an automated email suggesting that he didn’t owe any money at all.

  According to attorneys for the family, had anyone at Robinhood “bothered to respond,” Alex Kearns “would have been alive and well today.”

  Tyler Durden
  Tue, 02/09/2021 – 20:25

• If You Thought The 2020 Elections Were Chaotic, Just Wait
  If You Thought The 2020 Elections Were Chaotic, Just Wait

  Authored by J.Christian Adams via The Gatestone Institute,

  H.R.1 packs into one 791-page bill every bad idea about how to run elections and mandates that the states must adopt — the very things that made the election of 2020 such a mess. It includes all of the greatest hits of 2020: Mandatory mail ballots, ballots without postmarks, late ballots and voting in precincts where you don’t live. It includes so many bad ideas that no publication has satisfactory space to cover all of them. The Senate companion bill, S.1, might be even worse.

  

  These bills rearrange the relationship between the states and the federal government. The Constitution presumes that states regulate their own elections, but the Constitution has a big “but” in what is called the Elections Clause. The Constitution says, “but the Congress may at any time by Law make or alter such Regulations.” For over 200 years, Congress rarely used this power. After all, the power was put in the Constitution only to prevent the states from suffocating the federal government out of existence by never holding federal elections.

  Do not assume that the bills will stall and wither in the process. They are named H.R.1 and S.1 for a reason. The bills are the top priority of the newly empowered Democrats in Congress.

  Dissatisfied with the effectiveness of the last federal mandate — 1993’s Motor Voter law — H.R.1 dispenses with the idea that an American should go affirmatively register to vote.

  In 2020, states such as Nevada and New Jersey sent ballots through the mail to anyone on their registration lists despite having voter rolls full of errors. The Public Interest Legal Foundation documented thousands of ineligible registrations in Nevada alone that received mail ballots. Some were sent to vacant lots, abandoned mines, casinos and even liquor stores.

  States also would be blocked by H.R.1 from signature verification procedures.

  H.R.1 rigs the system for any lawsuits challenging the constitutionality of the law. All lawsuits can only be filed in one court – federal court in the District of Columbia. And all opposition must be consolidated into one brief with only one attorney being able to argue the merits. It also grants automatic intervention to any legislators who want to join in the fight against the lone opposition.

  It prohibits states from conducting list maintenance on the voter rolls. That means deadwood and obsolete registrations will stack up.

  HR.1 and S.1 are omnibus bills that would change every American citizen’s — and foreigner’s — relationship to voter registration.

  Universal automatic voter registration has, for years, been a top priority of the institutional left. In fact, H.R.1 would do away with actual voter registration and instead make the voter rolls merely a copy of anyone already on a government list — such as welfare recipients and other social service beneficiaries. The bills would expand well beyond to federal entities like the Social Security Administration, Department of Defense, Customs and Immigration, and elements of Health and Human Services.

  Naturally, a giant federal database would serve as the home for this list of people who must be automatically registered to vote, whether they know it or not.

  Imagine the number of government databases in which your information is contained. Do your names and addresses all match? Does Social Security know you moved out of your birth state? Are your married and maiden names different? Did you get a driver’s license before obtaining American citizenship?

  You can see the pitfalls. One person will be “registered” to vote multiple times, with slight variation in names, and perhaps greater variation in residence addresses.

  Making it “easier” to get registered to vote through automatic registration from government lists might seem attractive, until you consider the disaster of universal auto-mail voting as we saw in 2020.

  H.R.1 and S.1 will force states to push ballots into the mail. It builds slack into the election system. Decentralized mail elections introduce error because of error-filled rolls. Mail-in ballots delay results, create uncertainty and push the elections into kitchens and bedrooms where election officials cannot observe the voting process and cannot protect the voter from coercion.

  H.R.1 takes the absolute worst emergency rule changes of 2020 and enshrines them as federal law. Gone also are state witness and notary requirements during the mail ballot application process. Nor may states enact identification requirements of “any form” for those requesting a ballot. That means no more voter ID as a matter of federal law.

  States also would be blocked by H.R.1 from signature verification procedures.

  It gets worse. The 791-page bill also includes:

  • “Congress can reduce a state’s representation in Congress when the right to vote is denied.” Without qualification or definition, Congress could rely on this sentence unilaterally to cut the number of House members from any state it claims is denying the right to vote.

  • It criminalizes anyone who uses state challenge laws to question the eligibility of registrants wrongly. The penalty is up to one year in prison per instance.

  • It prohibits states from conducting list maintenance on the voter rolls. That means deadwood and obsolete registrations will stack up.

  • It criminalizes publishing “false statements” about qualifications to vote and “false statements” about which groups have endorsed which candidates. Information banned from being published includes false qualifications to vote and the penalties for doing so. What is a false statement will apparently be in the minds of the Justice Department lawyers who bring the charges. And if they do not act, the law provides a private right of action to individual plaintiffs to drag speakers to court. You can be sure this provision would be used as a merciless weapon against political opponents.

  • And in case it was not clear that H.R.1 was dismantling state power to run their own elections, the bill makes it clear: “The lack of a uniform standard for voting in Federal elections leads to an unfair disparity and unequal participation in Federal elections based solely on where a person lives.” In other words, state laws which have the Constitutional authority to determine the voting eligibility of its residents, will be preempted by a federal uniform standard.

  That is not all. Nationwide, states must accept mail ballots on Election Day plus 10 days later. States are allowed to add extra time to the window. No more election day. It will be election season, with a month of early voting and weeks of ballots arriving and being counted.

  And of course, unlimited ballot harvesting — having a third party “help” to fill in and gather up ballots, then drop them off at a polling station or other designated station — is guaranteed.

  Misinformation, protests, unrest, and even violence were all symptoms of the trauma of 2020. Activist groups and collusive officials in 2020 turned courts into weapons to transform state laws into election procedures that were favorable to one particular party. H.R.1 would finish the job, and federalize the policies and election procedures that made 2020 such a mess.

  It is no solution to presume that federal rules, even if they were crafted the right way, would solve the problem. When Washington D.C. gets control over elections, the policy always skews in one direction.

  I worked at the Justice Department, where career staff ignored federal laws they didn’t like, and only enforced the ones they thought would help advance their political beliefs. Motor Voter, for example, had a federal mandate that states clean voter rolls. Guess what happened after that rule passed in 1993? No private enforcement actions were brought for two decades until I brought one against Indiana.

  There is a federal mandate, passed in the 19th Century, to have one single election day. The bureaucrats in Washington in charge of enforcing that law ignore that law. Federal mandates are a one-way political ratchet. They always and only help one political party.

  The nation has seen this line of thinking before. Like Obamacare earlier, H.R.1 transitions our federalist Republic to some other brave new system that purports to right generations of structural wrongs, while at the same time entrenching other wrongs. Unifying American experiences such as coming together to vote on one single Election Day, governed by rules passed by state legislators, well, to the authors of H.R.1, that is just old fashioned.

  Tyler Durden
  Tue, 02/09/2021 – 20:05

• China Economy Rolling Over Hard Ahead Of Lunar New Year
  China Economy Rolling Over Hard Ahead Of Lunar New Year

  First the good news: after a recent spike in “domestic” new Covid cases across China (as opposed to the laughable “imported” cases), Beijing’s measures of targeted lockdown and massive testing and tracing appear to be effective in containing the recent Covid outbreak in Northern China. The seven-day average of domestic cases fell to 27 as of 5 Feb from the peak of 111 on 18 Jan.

  

  Shijiazhuang city of Hebei Province, one of the hotspots, lifted the lockdown on 29 Jan and started to resume work/production on 3 Feb. Meanwhile, on 30 Jan, the central government urged local governments not to ratchet up unnecessary travel barriers and social distancing measures in low-risk areas.

  Naturally, it was Beijing’s prerogative to halt any local outbreak ahead of the Lunar New Year week which begins this Friday, and which would have made any containment during the peak travel period impossible.On the other hand, tightened travel controls will adversely affect nationwide economic activities around the LNY time.

  And so, whether it is due to partial covid-linked lockdowns, due to China’s ongoing attempts to contain and deleverage the country’s massive debt load, or simply as a byproduct of China’s credit impulse which as we discussed last December, is now rapidly shrinking, but most real-time indicators of China are showing a sharp slowdown across the economy which appears to be rolling over in everything from traffic and mass transit, to manufacturing even as prices of many goods (especially food) rose sharply, in what some may call a pre-stagflationary outcome

  First, a look at traffic volumes, subway and migration which have clearly slowed down.

  

  Industrial production has seen a more modest hit, mostly in just the past few weeks, even as copper and rebar prices have soared.

  

  On the services side, the picture has remained more robust with both property and auto transactions solid although the recent surge in food prices has sparked some concerns about stagflation.

  

  Perhaps the most interesting chart is one tracking the recent liquidity squeeze which sent overnight and 7-day repo rates soaring in late January, only to ease substantially after the PBOC resumed net OMO injections, which have been in line with recent years. Meanwhile, both government and corporate bond issuance have picked up in the days ahead of the LNY.

  

  Putting the above data together, Nomura’s China economist Ting Lu writes that “the latest Covid-19 wave should be brought under control in coming months, but at the cost of a slower services sector recovery and a pause in policy normalization.” The bank lowered its 2021 real GDP growth forecast to 8.8% (from 9%), trimming Q1, but raising Q2 on the resurgence of Covid-19 and government countermeasures, while also trimming forecasts for activity, inflation and credit indicators. This is why:

  • Activity: To fight the worst wave of Covid-19 since the initial outbreak, central and local governments have tightened social distancing measures, reimposed some lockdown measures and travel bans, and encouraged migrant workers to stay in their workplace cities for the Lunar New Year (LNY) holiday. We believe these measures will impair the recovery in the services sector, but may provide a small boost to industrial production and construction in South China, as workers would remain at their workplaces. To reflect this, we recently cut our Q1 real GDP growth forecast to 18.0% y-o-y from 19.0%, but raised our Q2 forecast to 8.1% from 7.9%, as we expect some pent-up demand to be released once these restrictions are eased. Our Q3 and Q4 growth forecasts remain  nchanged. As a result, we lowered our 2021 annual growth forecast to 8.8% from 9.0% earlier.
  • Policy: Due to the resurgence of Covid-19 and the related growth slowdown, we believe Beijing will maintain its pledge to avoid any sharp shift in policies and its pace of normalisation will thus be highly contingent on the Covid-19 situation. We expect the PBoC to maintain its “wait-and-see” approach in the near term before resuming its gradual policy normalisation. We believe the recent surge in interbank rates was partly due to some special factors linked to RMB appreciation and cross-border RMB settlement, and expect the PBoC to ramp up short-term liquidity injections to keep interbank rates largely stable around the LNY holidays, though it may not inject as much liquidity as in previous years as the new Covid-19 wave also reduces liquidity demand.

  Tyler Durden
  Tue, 02/09/2021 – 19:45

• McDonald's Readies MyMcDonald's But Are Franchisees Happy?
  McDonald’s Readies MyMcDonald’s But Are Franchisees Happy?

  Submitted by Market Crumbs,

  Loyalty programs have been a hit among customers for countless quick-service restaurants. Starbucks, Dunkin’, Chipotle, Taco Bell and Domino’s are just some of the companies that have built a dedicated customer base by offering rewards and promotions to members.

  

  While these loyalty programs have proven successful, fast food giant McDonald’s has been slow to introduce a loyalty program of its own in the U.S. despite long having a loyalty program for its McCafé drinks.

  McDonald’s announced in November it would finally pilot a new loyalty program called MyMcDonald’s in Phoenix before launching across the U.S in 2021. Like most loyalty programs, MyMcDonald’s aims to provide a personalized service while rewarding diners the more they spend.

  With a national launch of MyMcDonald’s anticipated this year, McDonald’s confirmed the pilot is now being tested in New England, Nevada and Arizona. Approximately 900 of McDonald’s 14,000 U.S. locations are currently part of the pilot.

  Customers who use MyMcDonald’s will earn 100 points for each dollar that they spend, while McDonald’s will run targeted promotions that offer additional rewards opportunities. Rewards members will be able to redeem points across 16 menu items after hitting milestones of 1,500, 3,000, 4,500 and 6,000 points.

  “Our customers have been clear, they want even easier ways to order a Big Mac and World Famous Fries and to be rewarded for their loyalty. With MyMcDonald’s Rewards we’re doing just that,” McDonald’s U.S. Vice President, digital customer experience and media Alycia Mason said. “These tests are the first step to gather valuable customer feedback ahead of a nationwide launch later this year.”

  McDonald’s says more than 85% of the MyMcDonald’s Rewards members that have participated in the pilot are satisfied.

  

  However, not everyone is satisfied with the rapid changes taking place at McDonald’s to improve the customer experience as the costs of doing so are coming due. According to Restaurant Business, McDonald’s franchisees are reportedly unhappy about a handful of charges and subsidy cuts that could cost them an estimated $170 million this year.

  McDonald’s will now charge franchisees monthly for technology investments instead of every six months as McDonald’s operators feel the company is increasingly passing along costs to them. Operators are paying McDonald’s $250 million every year for technology fees as they also fight to gain more control over how much McDonald’s spends on digital strategies.

  While McDonald’s is preparing for the launch of MyMcDonald’s to give customers an improved experience, it may be coming at the expense of its relationship with its franchisees.

  Tyler Durden
  Tue, 02/09/2021 – 19:25

• Two US Carriers Hold Exercises In South China Sea As Beijing Blasts 'Blow To Peace & Stability'
  Two US Carriers Hold Exercises In South China Sea As Beijing Blasts ‘Blow To Peace & Stability’

  China is condemning what it’s deemed a blow to “regional peace and stability” after no less than two US aircraft carrier strike groups have initiated coordinated military exercises and maneuvers in the South China Sea on Tuesday. It comes further after China blasted the latest provocative sail by of the USS John S. McCain destroyer near the China-claimed Paracel Islands last week, as well as repeat incursions of Taiwan air space by PLA bombers and jets. 

  The USS Theodore Roosevelt and the USS Nimitz carriers “conducted a multitude of exercises aimed at increasing interoperability between assets as well as command and control capabilities,” a US Navy statement indicated.

  

  It marks the first such dual carrier operation in the South China Sea since the last one in July 2020, and represents the most serious posture of defense readiness signaled to Beijing since Biden took office. 

  “Biden is taking a strong stance to oppose China’s territorial claims in the disputed waters,” underscores Bloomberg in its reporting.

  Early this month we noted that in a reflection of the new administration’s intent to generally shift its foreign policy priorities from the Middle East to South East Asia and China in particular, the USS Nimitz was called “home” and away from its Indian Ocean-Mideast region of responsibility, but not before stopping or “pausing” provocatively in “China’s backyard” (as Beijing sees it):

  *NIMITZ CARRIER LEAVING CENTRAL COMMAND TO INDO-PACIFIC: KIRBY

  so two US carriers in the south china sea

  — zerohedge (@zerohedge) February 2, 2021

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

  Pentagon press secretary John Kirby had initially announced at the start of this month that “USS Nimitz has left Arabian Sea and 5th Fleet after being deployed for over 270 days amid tensions with Iran,” while indicating it was  “currently in the Indo-Pacific.” So now we know why.

  Chinese Foreign Ministry spokesman Wang Wenbin was quick to condemn the dual carrier “show of force” on Tuesday:

  “China will continue to take necessary measures to firmly safeguard national sovereignty and security and work with countries in the region to firmly safeguard peace and stability in the South China Sea,” according to the statement.

  Initially the Nimitz had remained out at sea past its scheduled date to return home to its US West Coast base.

  Two-carrier exercises are relatively rare, though they have seen a recent uptick in frequency. As of Tuesday, just nine have taken place in the Indo-Pacific region since 2001 — four since June.https://t.co/B8VNCAxQxC

  — Stars and Stripes (@starsandstripes) February 9, 2021

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

  It had been in the gulf region and Indian Ocean at the tail-end of the Trump presidency amid ratcheting tensions with Iran, and as the former president reportedly mulled military action to prevent Iran from taking steps to achieve nuclear weapons. 

  With the Biden administration apparently looking for rapid de-escalation with Iran, perhaps considering that particular geopolitical hotspot to be much more manageable, it appears Beijing now fully occupies the attention of Washington and the Pentagon.

  Tyler Durden
  Tue, 02/09/2021 – 19:05

• Buchanan: Of Rioters, Protesters, & Patriots
  Buchanan: Of Rioters, Protesters, & Patriots

  Authored by Patrick Buchanan via Buchanan.org,

  To Parliament, in the London of George III, the Boston Massacre of 1770 and the Tea Party of 1773 were not seen in the same light as they were by the Sons of Liberty in the Massachusetts colony.

  To Parliament, this was mob violence, and the shooting and killing at Lexington and Concord were acts of insurrection and treason.

  But because we won the Revolution, those events are portrayed and remembered differently. For when it comes to riots and revolutions, all depends on who writes the narrative of history. It is the winners.

  

  “Who controls the past controls the future: who controls the present controls the past,” said George Orwell in his novel “1984.”

  To the media, the long hot summer of rioting, looting and arson that followed the death of George Floyd in Minneapolis was driven by “racial justice” protests against a “systemic racism” that permeates society.

  The rioters were calling attention to injustices we Americans have failed to address, like police brutality. And almost all of these “peaceful protesters” were calling us to be a better people.

  And did not the riots produce beneficial results?

  Joe Biden and his party have responded by setting as a goal the replacement of “equality of rights” with “equity,” an equality of results, where gaps in test scores, incarcerations, incomes and wealth between white and black are to be closed by government action.

  However, as for the riot at the Capitol on Jan. 6 by Trumpists, to protest and perhaps change the outcome of the election, that was an act of insurrection, a treasonous attempt to overturn a democratic election and overthrow a democratic government.

  Of all the riots in 2020 and 2021, that was the unforgivable one.

  The proper response to that riot is not to heed its angry voices but to impeach the president on whose behalf they acted, to strip him of any right to serve again in public office, and to write new laws to deal with the horrific “domestic terrorism” we witnessed at the Capitol.

  About the morality and justice of the rampage of rioting in the wake of Floyd’s death, and the sole riot at the Capitol, the media are the self-anointed judges. They decide which riots are benign and which are malignant, which should receive an empathetic response, and which should end with every participant in prison.

  Western democracies almost always grant favorable publicity and moral support to popular uprisings against autocratic regimes.

  The Hong Kong protests were cheered on by the West until there arose a fear in China they were getting out of hand. Beijing then stepped in, ordered the protests halted and imposed law and order.

  In Russia, there have been protests in many cities over the recent jailing of dissident Alexei Navalny. But winter weather and thousands of police arrests have cooled the protests, and Vladimir Putin booted out of the country three EU diplomats from Poland, Germany and Sweden who attended the pro-Navalny demonstrations.

  When it comes to illegal and disorderly protests, Xi Jinping and Putin take them seriously and play hardball. They see mass protests and riots as Western-inspired, if not Western-planned, and deal with them as subversive activities.

  “The messages sent by Russian authorities during this visit confirmed that Europe and Russia are drifting apart,” EU minister Joseph Borrell blogged on his return from Moscow to Brussels.

  “It seems that Russia is progressively disconnecting itself from Europe and looking at democratic values as an existential threat.”

  In Turkey, demonstrations by staff and students erupted in January over the installation of an ally of President Recep Tayyip Erdogan as rector of Bogazici University, among the most acclaimed schools in the country. Hundreds have been arrested in clashes between protesters and police in one of the largest displays of civil unrest in Turkey in years.

  In Myanmar, thousands took to the streets this weekend to protest a generals’ coup that took over the country a week ago and ousted the elected civilian regime of Nobel Peace prize winner Aung San Suu Kyi.

  The American media defended the Hong Kong protesters and tended to minimize, excuse or ignore its excesses and violence.

  But in Moscow, Beijing, Istanbul and Myanmar, the protests are seen as insurgencies, as sappers of the state and regime, and the governments are predisposed to deal with them in every way — save capitulation. They see them as the work of “regime change” ideologues in the West.

  In Western nations, protests and riots come largely from the left and rail against what is claimed to be indifference or resistance to the rights of minorities. And the natural tendency of the media is to sympathize with protesters, especially those bedeviling autocracies.

  Again, all except the occupation of the Capitol on Jan. 6. That one was different. That one got the sympathy of no one because its premise was that an elite-backed establishment stole the election.

  Such accusations against our elites are intolerable and immoral.

  Tyler Durden
  Tue, 02/09/2021 – 18:45

• "Never Seen Anything Like This": Junk Bond Yields Slide Below 4% For First Time Ever In Record Buying Spree
  “Never Seen Anything Like This”: Junk Bond Yields Slide Below 4% For First Time Ever In Record Buying Spree

  It’s party time for zombie companies everywhere as “high yield” is now officially “low yield.”

  The record stock market euphoria and the resulting “dash for trash” seen in recent days as pennystock after pennystock has exploded higher on the back of bull raids orchestrated by redditors and complicit hedge fund managers, has spilled over into the junk bond market where the average yield on US junk bonds just dropped below 4% for the first time ever as investors keep piling into an asset class historically known for its “high yields” (hence the name), although if sub-4% is considered high then there is a problem.

  As shown below, the Bloomberg Barclays U.S. Corporate High-Yield index dipped to 3.96% on Monday evening, its sixth straight session of declines.

  

  Despite the recent rise in nominal treasury yields amid surging 10Y breakevens, investors have continued to gobble up junk bonds at a record pace as an alternative to the “not so high yield” offered by what is known as less-risky bonds such as Treasurys.

  

  The surge in demand for junk, which is now also explicitly backstopped by the Fed which last year purchased various high yield ETFs effectively removing risk from the equation, has led to the strongest start to any year on record according to Goldman.

  

  As a result of this unprecedented demand for junk, a majority of new issues, even those rated in the riskiest CCC tier of junk, have been hugely oversubscribed. So much so, in fact, that according to Credit Suisse, this  year  has  witnessed  a  remarkable  rally in lower quality HY paper with the “triple hooks”, i.e., the lowest quality CCC bonds up already +1.9% for the year and yields now sitting at record lows at 6.7% for our the broad Credit Suisse index. 

  

  While CCC bonds have outperformed the rest of the market for three consecutive months, according to Bloomberg, the spread compression means that there is now virtually no difference between the various junk bond tranches: notes rated single-B now average a 4.30% yield, while BBs yield 3.05%.

  “I’ve never seen anything like this”, said a fixed income bond manager who has lived through the euphoria of the housing bubble and lived to tell about it.

  Meanwhile, as Bloomberg adds, demand for the debt has outweighed supply by so much that in a novel spin on reverse inquiry “some money managers are even calling companies to press them to borrow instead of waiting for deals to come their way.” 

  Indeed, the ravenous appetite for the lowest quality paper has fueled a spike in issuance with January seeing $8.2bn in CCC supply,  the busiest month for that rating since… the financial crisis.

  

  It also means that the infamous PIK are back. According to Bloomberg, the relentless demand for crap means that “some of the riskiest types of transactions come to market, such as bonds that are used to fund dividends to a company’s owners and so-called pay-in-kind bonds that allow a borrower to pay interest with more debt.”

  Furthermore, in a remarkable twist, the rally has now become self-sustaining because as CS also note, the rally has opened up a  rare window of opportunity for CCC names to refinance as average coupons now sitabove average yield, which means that the lower yields drop, the more CCC issuance will flood the market!

  

  While this avalanche of junk is great news for zombie corporations which will be able to obtain cheap access to cash, allowing them to continue their cash burning, deflationary existence for another year or two, it’s an ominous sign for the bond investors buying paper at the absolute top of the market because even the smallest hiccup would send yields soaring. Then again, judging by their comments, not only are they not worried, they just want moar: Speaking to Bloomberg, David Norris, head of U.S. credit at TwentyFour Asset Management, said that CCCs bonds which have accounted for a significant chunk of recent supply, may be one of the best parts of credit this year:

   “This robust new issue pipeline of lower-quality credit is worth poring over as there are likely to be some good stories in here for investors with sufficient liquidity to get involved,” he said.

  It wasn’t clear if he was trying to convince others or himself that his purchases are prudent, because 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.

  Tyler Durden
  Tue, 02/09/2021 – 18:25

• "A Strange Game", Part 2
  “A Strange Game”, Part 2

  Authored by Jim Quinn via The Burning Platform blog,

  In Part One of this article I laid out the dire situation we find ourselves facing, as the illegitimate Biden administration inflicts the coup de grace to our dying empire of debt. I will now provide a possible framework of resistance and methods of undermining the corrupt pillaging system we call government.

  

  The concept of passive resistance has existed in various forms for centuries and has been used effectively in toppling enemies. A few weeks ago I was introduced to a concept I had never heard before in Doug Lynn’s article  Fair is Foul and Foul is Fair: Hover Through the Fog and Filthy Air. The passage below references “Irish Democracy” as a method for bringing an authoritarian regime to their knees.

  More regimes have been brought, piecemeal, to their knees by what was once called “Irish Democracy”—the silent, dogged resistance, withdrawal, and truculence of millions of ordinary people—than by revolutionary vanguards or rioting mobs.

  The premise behind “Irish Democracy” is that the State lacks the enforcement power to have its way with millions upon millions of rebels. It’s Mohandas Gandhi’s strategy, albeit without his overt confrontations with the institutions of government. “You can ignore the State and do as you please, as long as you keep your head down.”

  Removing the overt confrontations makes “Irish Democracy” much safer than any other form of rebellion. The State needs conspicuous, targetable rebels. It cannot use terror of its forces without someone to turn into an “example.” No conspicuous rebels means nothing for the State to crucify for the edification of the public.

  The description of Irish Democracy was put forth by Yale professor James C. Scott in his book, “Two Cheers for Anarchism“:

  “Quiet, anonymous, and often complicitous, lawbreaking and disobedience may well be the historically preferred mode of political action for peasant and subaltern classes, for whom open defiance is too dangerous. One need not have an actual conspiracy to achieve the practical effects of a conspiracy.”

  Widespread non-coordinated resistance to the mandates and dictates of a totalitarian state can succeed, as millions of individual actions result in having an overwhelming cumulative negative impact on the state’s functioning. As Scott reflects, the state needs conspicuous targetable enemies, which we have clearly seen, as this fledgling communist regime continues to promote the white supremacist insurrection fabrication and Trump’s guilt in provoking pretend Vikings to steal podiums and take selfies in Pelosi’s office.

  The goal of these mendacious totalitarians is to provoke Trump supporters into a violent response, so they can usher in their Domestic Terrorism Act (Patriot Act 2.0) and implement a modern-day techno gulag solution. We cannot take the bait. It is time to arrange our affairs in such a way that denies the State their claimed piece of your pie, while doing so in such a way the State does not scrutinize your “unlawful” acts. Ignoring ridiculous decrees, demands, and laws are the duty of every right-thinking American.

  

  As the cancel culture social justice warriors seek their next prominent victim to crucify across their media empire, it behooves us “little people” to deny them the satisfaction of ruining our lives. They want nothing more than to de-platform you, get you fired from your job, and destroy your reputation. This is where Irish Democracy, Going Galt, and numerous other variations of these strategies, along with heeding the wisdom Sun Tzu, need to be utilized to defeat our now firmly entrenched enemy.

  There are no white hats coming to save us. It is now up to millions of truculent, disagreeable, angry, deplorable citizens to undermine the establishment and force this empire built on a foundation of unpayable debt to collapse. It might seem like a daunting task, but each individual act of resistance is like a grain of sand added to the unstable pile. No one knows which grain will trigger the catastrophic failure of the system. We are all capable of becoming the straw that broke the camel’s back.

  

  John Galt’s speech in Ayn Rand’s Atlas Shrugged is over 33 thousand words, but these passages capture the essence of Going Galt:

  “For twelve years, you have been asking: Who is John Galt? This is John Galt speaking. I am the man who loves his life. I am the man who does not sacrifice his love or his values. I am the man who has deprived you of victims and thus has destroyed your world, and if you wish to know why you are perishing—you who dread knowledge—I am the man who will now tell you.

  You have heard it said that this is an age of moral crisis. You have said it yourself, half in fear, half in hope that the words had no meaning. You have cried that man’s sins are destroying the world and you have cursed human nature for its unwillingness to practice the virtues you demanded. Since virtue, to you, consists of sacrifice, you have demanded more sacrifices at every successive disaster. In the name of a return to morality, you have sacrificed all those evils which you held as the cause of your plight. You have sacrificed justice to mercy. You have sacrificed independence to unity. You have sacrificed reason to faith. You have sacrificed wealth to need. You have sacrificed self-esteem to self-denial. You have sacrificed happiness to duty.

  You will win when you are ready to pronounce the oath I have taken at the start of my battle—and for those who wish to know the day of my return, I shall now repeat it to the hearing of the world:

  I swear—by my life and my love of it—that I will never live for the sake of another man, nor ask another man to live for mine.”

  The key point is to deprive the Marxist/Deep State/Oligarchy of victims who they can use to further their warped, non-sensical, totalitarian agenda of control, force and wealth extraction for the greater good – of the oligarchs. They create a crisis with their laws, regulations, legislation, mandates, executive orders, and decrees and then make it far worse with their “solutions”, while demanding more sacrifices by the little people to keep their sinking ship afloat. This is their Achilles heel.

  If millions of individuals Go Galt and Starve the Beast, one transaction at a time, withdrawing our consent because we believe those governing us are illegitimate, the State lacks the enforcement power and means to punish people they cannot find or identify as criminals. This is guerilla warfare in a modern technological dystopian world. Each of us has different life circumstances, financial capacity, and constraints, but everyone can contribute something to toppling our oppressors. Here are some thoughts. I am sure you can creatively add to this list:

  • Reduce your taxable footprint as much as possible, rendering as little to Caesar as possible. Spending less deprives them of sales tax.

  • Do home improvement projects yourself and buy supplies from local retailers, rather than big box mega-stores.

  • Don’t buy anything from Amazon. If you are still on Facebook or Twitter, depart for a platform that does not censor. Don’t use Google for searches. Cancel Netflix and Amazon Prime.

  • Boycott any organization pushing the BLM agenda or critical race theory.

  • Take a course or two at the local tech school in electrical, plumbing, or other practical skill, so you can do it yourself.

  • No matter how small your plot of land, learn to grow some food – the more the better. See if hydroponics is possible. Deny the mega-food industry your business.

  • Make friends with local farmers, source meat, eggs, corn, milk, etc. from them and pay in cash. The government cannot track the transaction.

  • If you need to utilize a contractor, landscaper, painter, etc. find a local guy and pay in cash. They often will give a discount and the government will not get their slice.

  • If your circumstances warrant, bartering with locals can satisfy the needs of both parties and keeps the government out of your business.

  • Only frequent small family-owned restaurants and always pay in cash, including the tip for your waitress. The government will absolutely get their slice if you pay using a credit card.

  • If you have money in a Wall Street bank, withdraw it and put it in credit union or small local bank.

  • Do not carry any credit card debt. Pay down your mortgage. Do not borrow to buy a new car. Buy a used car.

  • Reduce your driving, not to save the environment, but to deny the State gasoline taxes and toll revenue.

  • If possible, own some precious metals, in preparation for the inevitable collapse of the USD. Crypto currencies may also be a hedge but may be too risky for most people.

  • Learn how to communicate with allies using encrypted messaging.

  • Don’t wear a mask or get the experimental DNA altering jab. Ridicule those who do.

  • The IRS is a dysfunctional, understaffed, bureaucratic calamity of an organization. You are small potatoes. They don’t have the resources to check whether your return is accurate. If the Fed can print $4 trillion out of thin air, why do they need your taxes anyway. Act accordingly.

  • If you live in an urban area, and have the means, get the hell out, preferably to a rural area inhabited by like- minded people.

  • If you live in a blue state or blue county, and can do so, move to a red state or red county. As states raise income tax rates, move to states with little or no income taxes. PA governor Wolf just proposed increasing the state income tax by 46% to give my money to teachers’ unions. Florida is looking awfully inviting.

  • With federal, state and local taxes surely going to rise, if you are near retirement, and can afford to, just drop out now and stop paying income taxes.

  • As these Going Galt actions are sure to infuriate those wielding power, make sure you are armed, have firearms training, and have a sufficient supply of ammo. Be mentally prepared to defend your homestead.

  

  Some of these actions are easier than others, but they would all contribute to an undetected rebellion against the State. If you are interested in going full Galt, this article from Marc Moran (aka Hardscrabble Farmer) –  Five Things To Do When Going Galt –details his family’s journey from being trapped in the Matrix to the freedom of controlling your own destiny – also known as the liberty to live life as you choose.

  None of what I’ve described is easy, but direct confrontation would be futile, as the majority of sheep would support the government because they are incapable of critical thought, distracted by their technological gadgets, and fearful of their own shadows. Since there is no doubt we are already at war, as the new regime has already classified us as domestic terrorists, we should heed the wisdom of Sun Tzu in confronting the enemy.

  “If your opponent is of choleric temper, seek to irritate him.  Pretend to be weak, that he may grow arrogant.” ― Sun Tzu, The Art of War

  

  “The supreme art of war is to subdue the enemy without fighting.” ― Sun Tzu, The Art of War

  If ever an opponent had a choleric temper it is the Marxist regime currently in power, with the hateful Pelosi, wrathful Schumer, venomous AOC, angry Biden, malevolent Harris, and malicious Deep State apparatchiks easily irritated and can be goaded into making irrational decisions. Their arrogance, lack of self-awareness, and continuous barefaced hypocrisy, leaves them exposed to ridicule and scorn on a daily basis, which makes them angrier and more susceptible to contempt and mockery from their opponents.

  There is no need to interrupt the enemy when they continue to issue executive orders and pass legislation which will have disastrous consequences. Even though the Reddit guys eventually had their asses handed to them, they proved a strategized sneak attack by the little guys could create havoc and disarray on Wall Street. The entire episode tore back the curtain and revealed the game is perpetually rigged in favor of billionaire hedge fund managers and the Wall Street cabal.

  

  This war is winnable if we use Irish Democracy and Going Galt tactics and out-think our narcissist, intellectually deficient, liberal arts major enemies. The danger is when they become frustrated by being out-smarted and out-maneuvered, they will lash out violently against men who just want to be left alone to live their lives as free men. When the financial system implodes, and it certainly will, they will attempt to scapegoat the deplorables.

  If they endeavor to violently enforce their mandates, they will unleash hardened men who will give no quarter in inflicting their vengeance upon those who chose not to leave them to peacefully liver their lives. The electrical grid and government computer systems are highly susceptible to attack. Strategic strikes of truckers could create food shortages in a matter of days in Democrat run urban enclaves of peaceful protests.

  The 300 million guns in this country are owned by men who know how to use them. These political animals will pay a dear price for awakening the inner Outlaw Josey Wales in millions of angry men. This unattributed quote captures what will happen when they push us too far.

  

  “The most terrifying force of death comes from the hands of ‘Men who wanted to be left Alone’.

  They try, so very hard to mind their own business and provide for themselves and those they love.

  They resist every impulse to fight back, knowing the forced and permanent change of life that will come from it.

  They know the moment they fight back, the lives as they have lived them, are over.

  The moment the ‘Men who wanted to be left Alone’ are forced to fight back, it is a small form of suicide. They are literally killing off who they used to be.

  Which is why, when forced to take up violence, these ‘Men who wanted to be left Alone’, fight with unholy vengeance against those who murdered their former lives.

  They fight with raw hate, and a drive that cannot be fathomed by those who are merely play-acting at politics and terror.

  TRUE TERROR will arrive at the Left’s door, and they will cry, scream, and beg for mercy, but it will fall upon deaf ears.”

  *  *  *

  The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation.

  Tyler Durden
  Tue, 02/09/2021 – 18:05

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• The (New Normal) War On Domestic Terror
  The (New Normal) War On Domestic Terror

  Authored (mostly satirically) by CJ Hopkins via The Consent Factory,

  If you enjoyed the Global War on Terror, you’re going to love the new War on Domestic Terror! It’s just like the original Global War on Terror, except that this time the “Terrorists” are all “Domestic Violent Extremists” (“DVEs”), “Homegrown Violent Extremists” (“HVEs”), “Violent Conspiracy-Theorist Extremists” (“VCTEs”), “Violent Reality Denialist Extremists” (VRDEs”), “Insurrectionary Micro-Aggressionist Extremists” (“IMAEs”), “People Who Make Liberals Feel Uncomfortable” (“PWMLFUs”), and anyone else the Department of Homeland Security wants to label an “extremist” and slap a ridiculous acronym on.

  

  According to a “National Terrorism Advisory System Bulletin” issued by the DHS on January 27, these DCEs, HVEs, VCTEs, VRDEs, IMAEs, and PWMLFUs are “ideologically-motivated violent extremists with objections to the exercise of governmental authority” and other “perceived grievances fueled by false narratives.” They are believed to be “motivated by a range of issues, including anger over Covid-19 restrictions, the 2020 election results, police use of force,” and other dangerous “false narratives” (e.g., the existence of the “deep state,” “herd immunity,” “biological sex,” “God,” and so on).

  “Inspired by foreign terrorist groups” and “emboldened by the breach of the US Capitol Building,” this diabolical network of “domestic terrorists” is “plotting attacks against government facilities,” “threatening violence against critical infrastructure” and actively “citing misinformation and conspiracy theories about Covid-19.” For all we know, they might be huddled in the “Wolf’s Lair” at Mar-a-Lago right now, plotting a devastating terrorist attack with those WMDs we never found in Iraq, or generating population-adjusted death-rate charts going back 20 years, or posting pictures of “extremist frogs” on the Internet.

  The Department of Homeland Security is “concerned,” as are its counterparts throughout the global capitalist empire. The (New Normal) War on Domestic Terror isn’t just a war on American “domestic terror.” The “domestic terror” threat is international. France has just passed a “Global Security Law” banning citizens from filming the police beating the living snot out of people (among other “anti-terrorist” provisions). In Germany, the government is preparing to install an anti-terror moat around the Reichstag. In the Netherlands, the police are cracking down on the VCTEs, VRDEs, and other “angry citizens who hate the system,” who have been protesting over nightly curfews. Suddenly, everywhere you look (or at least if you are looking in the corporate media), “global extremism networks are growing.” It’s time for Globocap to take the gloves off again, root the “terrorists” out of their hidey holes, and roll out a new official narrative.

  Actually, there’s not much new about it. When you strip away all the silly new acronyms, the (New Normal) War on Domestic Terror is basically just a combination of the “War on Terror” narrative and the “New Normal” narrative, i.e., a militarization of the so-called “New Normal” and a pathologization of the “War on Terror.” Why would GloboCap want to do that, you ask?

  I think you know, but I’ll go ahead and tell you.

  See, the problem with the original “Global War on Terror” was that it wasn’t actually all that global. It was basically just a war on Islamic “terrorism” (i.e., resistance to global capitalism and its post-ideological ideology), which was fine as long as GloboCap was just destabilizing and restructuring the Greater Middle East. It was put on hold in 2016, so that GloboCap could focus on defeating “populism” (i.e., resistance to global capitalism and its post-ideological ideology), make an example of Donald Trump, and demonize everyone who voted for him (or just refused to take part in their free and fair elections), which they have just finished doing, in spectacular fashion. So, now it’s back to “War on Terror” business, except with a whole new cast of “terrorists,” or, technically, an expanded cast of “terrorists.” (I rattled off a list in my previous column.)

  In short, GloboCap has simply expanded, recontextualized, and pathologized the “War on Terror” (i.e., the war on resistance to global capitalism and its post-ideological ideology). This was always inevitable, of course. A globally-hegemonic system (e.g., global capitalism) has no external enemies, as there is no territory “outside” the system. Its only enemies are within the system, and thus, by definition, are insurgents, also known as “terrorists” and “extremists.” These terms are utterly meaningless, obviously. They are purely strategic, deployed against anyone who deviates from GloboCap’s official ideology … which, in case you were wondering, is called “normality” (or, in our case, currently, “New Normality”).

  In earlier times, these “terrorists” and “extremists” were known as “heretics,” “apostates,” and “blasphemers.” Today, they are also known as “deniers,” e.g., “science deniers,” “Covid deniers,” and recently, more disturbingly, “reality deniers.” This is an essential part of the pathologization of the “War on Terror” narrative. The new breed of “terrorists” do not just hate us for our freedom … they hate us because they hate “reality.” They are no longer our political or ideological opponents … they are suffering from a psychiatric disorder. They no longer need to be argued with or listened to … they need to be “treated,” “reeducated,” and “deprogrammed,” until they accept “Reality.” If you think I’m exaggerating the totalitarian nature of the “New Normal/War on Terror” narrative, read this op-ed in The New York Times exploring the concept of a “Reality Czar” to deal with our “Reality Crisis.”

  And this is just the beginning, of course. The consensus (at least in GloboCap circles) is, the (New Normal) War on Domestic Terror will probably continue for the next 10 to 20 years, which should provide the global capitalist ruling classes with more than enough time to carry out the “Great Reset,” destroy what’s left of human society, and condition the public to get used to living like cringing, neo-feudal peasants who have to ask permission to leave their houses. We’re still in the initial “shock and awe” phase (which they will have to scale back a bit eventually), but just look at how much they’ve already accomplished.

  The economic damage is literally incalculable … millions have been plunged into desperate poverty, countless independent businesses crushed, whole industries crippled, developing countries rendered economically dependent (i.e., compliant) for the foreseeable future, as billionaires amassed over $1 trillion in wealth and supranational corporate behemoths consolidated their dominance across the planet.

  And that’s just the economic damage. The attack on society has been even more dramatic. GloboCap, in the space of a year, has transformed the majority of the global masses into an enormous, paranoid totalitarian cult that is no longer capable of even rudimentary reasoning. (I’m not going to go on about it here … at this point, you either recognize it or you’re in it.) They’re actually lining up in parking lots, the double-masked members of this Covidian cult, to be injected with an experimental “vaccine” that they believe will save the human species from a virus that causes mild to moderate symptoms in roughly 95% of those “infected,” and that over 99% of the “infected” survive.

  So, it is no big surprise that these same mindless cultists are gung-ho for the (New Normal) War on Domestic Terror, and the upcoming globally-televised show trial of Donald Trump for “inciting insurrection,” and the ongoing corporate censorship of the Internet, and can’t wait to be issued their “Freedom Passports,” which will allow them to take part in “New Normal” life — double-masked and socially-distanced, naturally — while having their every movement and transaction, and every word they write on Facebook, or in an email, or say to someone on their smartphones, or in the vicinity of their 5G toasters, recorded by GloboCap’s Intelligence Services and their corporate partners, subsidiaries, and assigns. These people have nothing at all to worry about, as they would never dream of disobeying orders, and could not produce an original thought, much less one displeasing to GloboCap, if you held a fake apocalyptic plague to their heads.

  As for the rest of us “extremists,” “domestic terrorists,” “heretics,” and “reality deniers,” (i.e., anyone criticizing global capitalism, or challenging its official narratives, and its increasingly totalitarian ideology, regardless of our specific DHS acronyms), I wish I had something hopeful to tell you, but, the truth is, things aren’t looking so good. I guess I’ll see you in a quarantine camp, or in the psych ward, or an offshore detention facility … or, I don’t know, maybe I’ll see you in the streets.

  Tyler Durden
  Mon, 02/08/2021 – 23:40

• Watch: F-15EX Flies For First Time As USAF Prepares For Deliveries 
  Watch: F-15EX Flies For First Time As USAF Prepares For Deliveries 

  Boeing reported earlier this week the first test flight of its upgraded version of the F-15 Eagle was “successful,” paving the way for two of these fighter jets to be delivered to the US Air Force later this quarter. 

  

  The F-15EX took off and landed from St. Louis Lambert International Airport in Missouri on Tuesday, completing a 90-minute test flight before returning to the airport.

  Check out the #F15EX as it makes its historic first flight. F-15EX is built on a digital thread, allowing it to also serve as a testbed to incorporate future tech and capability for the @USAirForce. pic.twitter.com/6ulnxuy1fm

  — The Boeing Company (@Boeing) February 3, 2021

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

  Matt Giese, Boeing F-15EX’s chief test pilot, said the new fighter jet is packed with “advanced systems and software.” Boeing’s team on the ground monitored the aircraft’s performance during the flight test. 

  “Today’s successful flight proves the jet’s safety and readiness to join our nation’s fighter fleet,” said Prat Kumar, Boeing vice president, and F-15 program manager. “Our workforce is excited to build a modern fighter aircraft for the US Air Force.”

  

  The updated F-15 “is capable of incorporating the latest advanced battle management systems, sensors, and weapons due to the jet’s digital airframe design and open mission systems architecture,” Kumar said.

  The Department of Defense first requested eight F-15EX fighter jets that could be delivered as soon as this year. The military wants upwards of 144 of these fighter jets in the next five years. 

  Even though the Trump administration has spent tens of billions on F-35 fifth-generation fighters, the Air Force, for some reason, still wants to obtain a 45-year-old fourth-generation fighter. 

  The reason behind the move could be due to the F-35’s internal bomb bays aren’t large enough to carry hypersonic missiles. 

  

  The Air Force is expected to purchase the F-15EX without reducing the fleet of 1,763 F-35s that it has long planned. 

  Tyler Durden
  Mon, 02/08/2021 – 23:20

• The Snowplow Test
  The Snowplow Test

  Authored by Rod Dreher via TheAmericanConservative.com,

  Los Angeles Times columnist Virginia Heffernan, who lives in Brooklyn Heights but who lives somewhere rurally to escape Covid, recently had a dilemma: her Trump-loving neighbors did something nice for her. 

  She doesn’t know what the right thing to do about it is.

  Now, stop right there.

  Normal people don’t have this problem.

  Normal people think, aww, how nice, and start thinking of ways to return the kindness.

  But normal people are not Harvard-educated New York-based liberal journalists.

  

  Hence Heffernan’s revealing column. Excerpts:

  Oh, heck no. The Trumpites next door to our pandemic getaway, who seem as devoted to the ex-president as you can get without being Q fans, just plowed our driveway without being asked and did a great job.

  How am I going to resist demands for unity in the face of this act of aggressive niceness?

  Of course, on some level, I realize I owe them thanks — and, man, it really looks like the guy back-dragged the driveway like a pro — but how much thanks?

  These neighbors are staunch partisans of blue lives, and there aren’t a lot of anything other than white lives in neighborhood.

  This is also kind of weird. Back in the city, people don’t sweep other people’s walkways for nothing.

  It takes a New Yorker to be confronted with someone doing something nice for them, and get suspicious about the angle. More:

  On Jan. 6, after the insurrection, Sen. Ben Sasse (R-Neb.) issued an aw-shucks plea for all Americans to love their neighbors. The United States, he said, “isn’t Hatfields and McCoys, this blood feud forever.” And, he added, “You can’t hate someone who shovels your driveway.”

  At the time, I seethed; the Capitol had just been desecrated. But maybe my neighbor heard Sasse and was determined to make a bid for reconciliation.

  So here’s my response to my plowed driveway, for now. Politely, but not profusely, I’ll acknowledge the Sassian move. With a wave and a thanks, a minimal start on building back trust. I’m not ready to knock on the door with a covered dish yet.

  I also can’t give my neighbors absolution; it’s not mine to give.

  Free driveway work, as nice as it is, is just not the same currency as justice and truth. To pretend it is would be to lie, and they probably aren’t looking for absolution anyway.

  :::::facepalm:::::

  Let me tell you something, Virginia: your neighbors probably have no idea who Ben Sasse is, and isn’t looking to reconcile with you, much less receive your absolution. They just wanted to do something nice for you, because you are their neighbor, and that’s what neighbors do for each other. The fact that you assume there must be some politically aware motive behind the action says a lot about you. I grew up in the rural South, and trust me, nobody stopped to ask what one’s politics were before doing something nice for them. This is not how people live outside of Blue State Cosmopolises.

  As for “absolution,” I kind of hope you do try to engage your Trumpist neighbors by descending from on high to tell them that you might be willing to wash their sins away with your pure milk of la-te-da liberal kindness. That would be fun to watch.

  The neighbors might know perfectly well that you hate Trump, but if they are like normal people, they don’t care. You’re their neighbor, and your driveway needed plowing. It didn’t occur to them to think that they needed to know anything else about you. Honestly, this kind of “MAGA-heads In The Mist” take really does call for putting on “Sweet Home Alabama,” blasting it at top volume, and shouting these lines against judgmental liberal hypocrisy:

  Now Watergate does not bother me.

  Does your conscience bother you? Tell the truth.

  No kidding, to people like Virginia Heffernan every check their own consciences? Do they believe that they are not sinners in need of forgiveness and mercy? Does Auden’s great command — “You shall love your crooked neighbour/With your crooked heart” — somehow not apply to them?

  I know a Latino immigrant who moved to a small Louisiana town for work. Years ago, I was talking to him about what his life there is like. He mentioned how much he enjoyed playing poker with a group of men he’d fallen in with. One of the men had a familiar name from my Louisiana childhood, and then I remembered that decades ago, that man — now quite old — had been a KKK leader in this state. I asked the Latino guy if he knew that.

  “Oh yeah,” he said. “But he’s really not a bad guy at all once you get to know him.”

  I thought: that’s small town life for you. It’s like that in the town where I grew up too. You just cannot afford to be mean to and judgmental of people, even if they have sinned and fallen short of the glory of God, which, believe me, you have done too. The guy you’ll need to call to saw up the tree that fell across your driveway might have MAGA and NRA stickers on his truck. He might also do it for you for free, because he knows you’ve been sick and have medical bills. Many of my friends today back in my hometown are liberals, and I’m sure life is not as pleasant for them in some ways as it would be if they lived in a blue city. But then again, very few people back home talk about politics, and certainly wouldn’t use politics as a reason not to be neighborly. If you live out in the country, you can’t afford to be that way, and besides, it just doesn’t matter that much to us.

  A story from St. Francisville, where I’m from: a liberal friend there told me that back in the late 1980s, a gay male couple moved to town. One of them was dying of AIDS, and wanted to live in the country for as long as his life was left. They started attending the local Episcopal church. My liberal friend said that nobody at the church flew rainbow flags (I speak metaphorically), but they also welcomed this couple, and cared for them with meals and chores and companionship, until the very end. If you had polled the congregation back then, you probably would have found very few who would have said much good about homosexuality. And back then, people were a lot more afraid of AIDS than they are today. But that did not matter. What mattered was that here, in front of us, in the flesh, were two people in need of our love and care. And that they received, because they were neighbors.

  That doesn’t make St. Francisville paradise. But it does make it humane, and livable.

  The local liberals may chafe at their minority status, but they’re nice people too. One of my best friends back home is super-liberal, and he wouldn’t think twice about rushing to help out a neighbor like Heffernan, whatever her politics. It just would not cross his mind to do anything else. This isn’t a left-right thing; it’s basic human decency. The lady who runs the coffee shop in my hometown is pretty liberal, and her clientele is no doubt mostly conservative, but nobody cares. Why should they care? Are you a kind person? Do you treat others with respect? Then you are welcome, even if your politics leave a lot to be desired, either way. I don’t know if it’s like this outside the South, but down here, it would be a sorry man who wouldn’t plow his neighbor’s driveway on account of she hates Trump.

  This Heffernan column is so revealing. Is that really how urban media liberals see the rest of America: as a place full of people as bitter and as judgmental as themselves? Heffernan’s column is what happens when people who have extraordinary power to shape the media discourse live in a political monoculture. It’s like the WEIRD phenomenon, in which psychological research to determine what is normative for humans has been done solely on Westerners, whose psychological profiles are very different from those of people from around the world. The baseline of normal behavior is actually quite misleading, the theory goes, because the psychology of people formed in Western, Educated, Industrialized, Rich, Democratic cultures is meaningfully different.

  A friend of mine lives in a country resort town that has been overrun during Covidtide with rich coastal liberals escaping the plague. He says that they have made life there miserable. They are snotty, entitled, and treat the locals as exotics to be patronized. He says they are bringing with them the same attitudes toward life that ruined California. I’d bet that Heffernan’s Trumpy neighbors are happy to help her, but they’ll also be happy to see the back of her too, carrying those high-and-mighty liberal attitudes back to New York.

  Bless her heart, Virginia Heffernan doesn’t know any better. She is the product of elite colleges and urban liberal media culture, and doesn’t understand that one doesn’t politicize neighborliness. One doesn’t look at one’s neighbors and sort the decent from the indecent based on how they vote. If our big-city newsrooms had more people in them who had some sort of real understanding of and sympathy for people like Heffernan’s snowplowers, we might not be such a divided country. But we all know that when the papers hire for “diversity,” they really mean they want to get ten different flavors of liberal.

  So, the Snowplow Test: Do you live in a place where people will plow your driveway without wanting something in return, because it’s the neighborly thing to do? If so, then that’s where you want to live. If not, well, better hope that when hard times come, you’ve made enough money to take care of yourself and your family, because you’re going to need it.

  Tyler Durden
  Mon, 02/08/2021 – 23:00

• Russia, Iran & China To Hold Joint Naval Drills As CENTCOM Chief Blasts Iran As "Driver Of Instability"
  Russia, Iran & China To Hold Joint Naval Drills As CENTCOM Chief Blasts Iran As “Driver Of Instability”

  On Monday Russia announced plans to hold joint naval drills with Iran and China in the Indian Ocean, according to Reuters, which cites comments made by Moscow’s ambassador to Tehran. Russian Ambassador Levan Dzhagaryan said, “The next multilateral naval exercises will take place in the northern part of the Indian Ocean in mid-February 2021.”

  It comes just after the USS Nimitz aircraft carrier was ordered out of its Mideast region of responsibility at the start of this month. The Nimitz is headed home to its base in Washington state, after Trump kept it in the Indian Ocean and gulf region on standby amid ratcheting tensions with Iran. Biden then ordered it home within his first couple weeks in office.

  

  Russia, China, and Iran last held naval drills in the region in a December 2019 exercise. Amb. Dzhagaryan detailed in his comments initially given to Russian state media that the joint drills are expected to focus on “search and rescue” operations as well as maritime security focused on shipping. Interestingly it comes following the summer of 2019 ‘tanker war’ showdown with the UK and US.

  The announcement also comes just as the US, Japan, and Australia are conducting joint drills out of Guam specifically aimed at countering a theoretical future attack from big powers like China or Russia. These drills, dubbed Cope North 2021, are expected to run until Feb. 19.

  Also on Monday the head of US Central Command, Gen Kenneth McKenzie, issued his first public remarks since President Biden entered the White House last month.

  He blasted Iran as the main and “most challenging driver of instability” in the region, while further describing that Tehran and Washington are currently in a state of “contested deterrence”.

  NEW: #Centcom‘s Gen. McKenzie

  • Iran is “Main Driver of Instability” in Mideast
  • US interest in Yemen is ONLY Counterterrorism
  • Russia & China rising competitors for US
  • SDF holds 10,000 ISIS fighters
  • Drones “most concerning” https://t.co/jN0ad9TlXi

  — Joyce Karam (@Joyce_Karam) February 8, 2021

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

  Gen. McKenzie said, “For more than forty years, the Iranian regime has funded and aggressively supported terrorism and terrorist organizations, and defied international norms by conducting malign activities which destabilized not only the region but global security and commerce as well.”

  “Our presence in the region, mostly defensive in nature, has brought us to a period of contested deterrence with Iran,” he added. “This presence sends a clear and unambiguous signal about our capabilities and will to defend partners and international interests, a signal that has been clearly received by the Iranian regime.”

  The CENTCOM chief’s comments were surprisingly blunt at a moment it remains very up in the air whether Washington and Tehran will engage toward restoring the 2015 nuclear agreement, or JCPOA. Iran has told the US it must first drop sanctions if it hopes to restore participation, while Washington has made it clear Iran must take the first step toward restoring uranium enrichment caps per the deal’s stipulations.

  Gen. McKenzie’s bold remarks will certainly only add to the controversy and sense of uncertainty looming over the nuclear deal’s future fate. 

  Tyler Durden
  Mon, 02/08/2021 – 22:40

• IMF Wants To Use "Digital Footprint Of Customers' Online Activities" To Assess Creditworthiness
  IMF Wants To Use “Digital Footprint Of Customers’ Online Activities” To Assess Creditworthiness

  Authored by Robert Wheeler via The Organic Prepper blog,

  For years, researchers have warned of a system in which the government controls every aspect of its citizens’ lives. Every citizen would have to rely entirely on the government to survive in this system. This system has been openly discussed for many years by the “ruling class.” Aka: those who have been allotted social credit (or not) and power based upon their views and opinions. 

  

  The system has already begun in China and is now spreading globally

  In a recent post, “What is Really New In Fintech,” on the IMF blog (International Monetary Fund), authors Arnoud Boot, Peter Hoffmann, Luc Laeven, and Lev Ratnovski suggest “rapid technological change” in the financial industry. Many social media and other online platforms are now creating and accepting payments. This revolutionary change in the banking world could change the face of finance forever. 

  As a result of this rapid change, the authors bring up the following questions:

  • What are the transformative aspects of recent financial innovation that can uproot finance as we know it?

  • Which new policy challenges will the transformation of finance bring?

  To answer these questions, the authors wrote: 

  Recent IMF and ECB staff research distinguishes two areas of financial innovation. One is information: new tools to collect and analyse data on customers, for example for determining creditworthiness. Another is communication: new approaches to customer relationships and the distribution of financial products. We argue that each dimension contains some transformative components.

  The authors mention the importance and functionality of “determining creditworthiness.” The method they want to use to do so can be found in the section labeled “New Types Of Information,” where they write (emphasis ours):

  The most transformative information innovation is the increase in use of new types of data coming from the digital footprint of customers’ various online activities—mainly for creditworthiness analysis.

  Credit scoring using so-called hard information (income, employment time, assets, and debts) is nothing new. Typically, the more data is available, the more accurate is the assessment. But this method has two problems. First, hard information tends to be “procyclical”: it boosts credit expansion in good times but exacerbates contraction during downturns.

  The second and most complex problem is that certain kinds of people, like new entrepreneurs, innovators, and many informal workers, might not have enough hard data available. Even a well-paid expatriate moving to the United States can be caught in the conundrum of not getting a credit card for lack of credit record, and not having a credit record for lack of credit cards.

  Fintech resolves the dilemma by tapping various nonfinancial data: the type of browser and hardware used to access the internet, the history of online searches, and purchases. Recent research documents that, once powered by artificial intelligence and machine learning, these alternative data sources are often superior than traditional credit assessment methods, and can advance financial inclusion, by, for example, enabling more credit to informal workers and households, and firms in rural areas.

  The type of browser used could potentially indicate a different ranking for browsers that heavily track users, like Chrome, vs. browsers that emphasize privacy, like Brave.

  So what does this all mean for our financial future?

  It means the IMF authors suggest the global banking network begin using a history of online searches and purchases to determine “creditworthiness.” In other words, do you read CNN and purchase sports memorabilia? You’re approved! Do you read The Organic Prepper and buy “conspiracy” or “prepping” material? We’re sorry, you can not be approved at this time based on your credit score.

  In Brandon Turbeville’s 2019 article Social Media, Universal Basic Income, and Cashless Society: How China’s Social Credit System Is Coming To America he wrote: 

  “Unbeknownst to most people, there appears to be a real attempt to create a system in which all citizens are rationed their “wages” digitally each month in place of a paycheck or ability to gain or lose money. This system would see any form of dissent resulting in the cut off of those credits and the ability to work, eat, or even exist in society. It would not only be the end of dissent but of any semblance of real individuality.”

  Turbeville outlines a plan to create a Universal Basic Income (UBI). The scheme, tied to a social credit system, will essentially cut off the financial lifeline to anyone who does not entirely tow the establishment line. I encourage you to take a look at the article and see for yourself how this scheme is coming together. For more information, here’s an article that compares UBI to modern feudalism.

  With Biden’s new administration that is openly more “global” in its outlook, the IMF has already stated that it will seek to reset its relationship with the United States and that Biden’s “commitment to multilateral institutions and his pledge to re-enter the Paris climate agreement should help the IMF advance its own targets.”

  And you thought it was challenging to gain approval before…

  The pairing of online history with credit scores is bad enough. Doing so has prevented many otherwise creditworthy citizens from accessing what they need to start businesses, buy homes, rent apartments, or buy cars. Some states have suggested laws that use your search history and social media when being assessed for your worthiness to purchase a firearm, and the Bank of America has made it incredibly clear just this past week that your purchases and financial records are by no means private.

  However, pairing both of those with the Universal Basic Income is even worse. We are fast approaching a time where even the slightest difference of opinion from the norm (i.e., the ruling class) can result in a complete freeze out of the “offender” from the entire society.

  Tyler Durden
  Mon, 02/08/2021 – 22:20

• BofA Spots A Demand Problem With Semiconductors
  BofA Spots A Demand Problem With Semiconductors

  BofA’s Michael Hartnett released a client note last Thursday titled “Big Fed, Big Tech, Big Yields.” The note had a lot of useful information. ZeroHedge Premium can see the report in full here. More importantly, within the chart pack, Hartnett outlined how the semiconductor book-to-bill ratio, otherwise considered an important leading indicator of demand trends, could be rolling over.

  The semiconductor book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. It’s widely used as a leading indicator of demand trends within the industry. 

  The data shown below shows semiconductor equipment bookings outpaced equipment billings on a three-month moving average since the steep drop at the beginning of the virus pandemic in early 2020 but has since stalled in early 2021. Hartnett overlays the PHLX Semiconductor Sector on a year-over-year basis with a red arrow pointing down, suggesting future demand issues within the industry could result in a correction.

  

  PHLX Semiconductor Sector has stalled out for the last four weeks. 

  

  Here are other notable charts Hartnett lays out in the client note: 

  Central bank liquidity versus the market cap of Apple, Amazon, Facebook, Google, Microsoft, Netflix, and Tesla. Thank the Federal Reserve for inflating the stock market bubble in tech. 

  

  Has China’s credit growth peaked? If so, this could have significant impacts on the global economy’s future growth. For more on this read, ““Peaking” China Credit Impulse Suggests Copper Prices May Have Topped.” Premium users can read a more in-depth analysis of China’s credit growth in a note titled “In Historic Reversal, China’s Credit Impulse Just Peaked: What This Means For Global Markets.” 

  

  … and of course, BofA’s Bull & Bear Indicator is at 7.5, nearing “extreme bullish” levels which would be above 8. 

  

  Despite the semiconductor shortage, the slump in the book-to-bill ratio suggests demand weakness could be ahead. 

  Tyler Durden
  Mon, 02/08/2021 – 22:00

• Journalist Andy Ngo On How Antifa Wants To "Destroy Democracy"
  Journalist Andy Ngo On How Antifa Wants To “Destroy Democracy”

  Gabriel Nadales, a former Antifa activist who now works for Campus Reform’s parent organization, the Leadership Institute, sat down with journalist Andy Ngo to talk about his new book, Unmasked: Inside Antifa’s Radical Plan to Destroy Democracy.

  

  By unmasking Antifa’s true goal and exposing the group as an extremist illiberal movement, Ngo makes the case to show why the mainstream left should not support Antifa or the Black Lives Matter organization.

  Nadales and Ngo discussed how higher education promotes Antifa’s values while Ngo highlighted that several college professors were arrested amid the 2020 Portland Antifa riots.

  Finally, Nadales and Ngo touched upon Big Tech’s censorship of conservatives while Facebook and Twitter allow far-left Antifa militants to organize on their platforms.

  Watch the full interview below:

  Tyler Durden
  Mon, 02/08/2021 – 21:40

• Hacker Tried To Poison Entire Florida Town By Raising Chemical Levels In Water Supply
  Hacker Tried To Poison Entire Florida Town By Raising Chemical Levels In Water Supply

  A town in Florida has been target of a hack which briefly altered chemicals in its water supply to “potentially damaging levels” according to local media reports. Federal and local authorities are currently investigating the computer network intrusion which happened last Friday morning, the alarming details of which are emerging Monday.

  Plant operators overseeing the small city of Oldsmar’s water supply began observing strange activity on their monitors. That’s when technicians noticed that sodium hydroxide levels (or lye), which is used to treat the city’s water in small amounts in order to control acidity while removing heavy metals, was being remotely pushed higher. 

  

  Technicians noticed the chemical levels being subject of unauthorized external manipulation in real time and immediately moved to restore the sodium hydroxide input to its safe, correct levels. The AP detailed based on local reporting: “A plant worker first noticed the unusual activity at around 8 a.m. Friday when someone briefly accessed the system.” 

  “At about 1:30 p.m., someone accessed it again, took control of the mouse, directed it to the software that controls water treatment and increased the amount of sodium hydroxide,“ the report continued.

  The hacker or hackers have yet to be uncovered and apprehended. According to details announced by the county sheriff Bob Gualtieri and featured in Tampa Bay Times: 

  Someone remotely accessed a computer for the city’s water treatment system and briefly increased the amount of sodium hydroxide, also known as lye, by a factor of more than 100, Gualtieri said at a news conference Monday. The chemical is used in small amounts to control the acidity of water but it’s also a corrosive compound commonly found in household cleaning supplies such as liquid drain cleaners.

  “This is obviously a significant and potentially dangerous increase,” the Pinellas County sheriff added. 

  

  He further explained that the hacker’s changes inside the system were detected before any damage was done that could affect the public: “The public was never in danger,” Gualtieri said additionally. “Even if the plant operator had not quickly reversed the increased amount of sodium hydroxide, it would’ve taken between 24 and 36 hours for that water to hit the water supply system.”

  The Oldsmar water treatment plant is responsible for supplying water to an estimated 15,000 residents along with dozens of businesses. It essentially appears the hacker was attempting to poison the drinking water for an entire town.

  Police press conference revealing the hack and its extent to the public on Monday:

  Currently the FBI and Secret Service have joined county sheriff efforts at attempting to trace the hack.

  The alarming incident comes following federal officials and cybersecurity experts over the past several years expressing anxiety over the vulnerability of vital US infrastructure to potentially devastating hacks, particularly from foreign entities, which could in some cases actually threaten lives.

  Tyler Durden
  Mon, 02/08/2021 – 21:20

• Parents Sue Robinhood After 20-Year-Old Son Commits Suicide Over Options Confusion
  Parents Sue Robinhood After 20-Year-Old Son Commits Suicide Over Options Confusion

  To better understand why Robinhood is so popular among millennial investors, it’s best to think about game design. The Robinhood stock trading app feels and plays very much like a video game, but of course, it’s a stock-trading game. The ‘in-game’ purchases are equities and options of real publicly traded companies. 

  During the pandemic, the platform erupted with young inexperienced traders, who could approve themselves on the app as ultra-sophisticated traders with the touch of a button. To date, Robinhood has close to 20 million users. 

  As we sadly detailed here, the devastating suicide of 20-year-old Alex Kearns last June, after discovering he faced a loss of over $700k on his massively-levered options account, exposed the very real downside of the speculative mania in the stock market. 

  

  In a note left for his family, Kearns said he had “no clue about what I was doing” and never intended to “take this much risk.”

  On Monday, Kearns’ parents filed a lawsuit, first obtained by CBS News, which accused Robinhood of “wrongful death, negligent infliction of emotional distress, and unfair business practices.”

  In the lawsuit, Dan and Dorothy Kearns allege Robinhood purposely targets young inexperienced customers, then within the app pushes them to engage in highly complex trades.

  They said the app also provided no “meaningful customer support” to resolve their son’s trade issues. 

  One weekend in June, Robinhood restricted Kearns account, indicating that his new balance totaled negative $730k. Robinhood sent another automated message detailing how he needed “immediate action” in resolving his account status by depositing $170k to settle up. 

  

  According to his parents’ lawyer, the money Kearns thought he lost may not have been lost because the options bets were structured. 

  “He thought he blew up his life. He thought he screwed up beyond repair,” Dan Kearns said. 

  When Kearns received the message from Robinhood, it appeared he freaked out. Without adequate customer support, the young inexperienced trader could not reach out to anyone for an explanation. All he received was an automated message from the company. 

  The messages read: 

  “Thanks for reaching out to our support team!” The email said, “We wanted to let you know that we’re working to get back to you as soon as possible, but that our response time to you may be delayed.” The company assigned him a case number, 06849753.

  “And their response was a canned reply,” his father said. “Basically, ‘We’ll get back to you later.'”

  His father went on to say all his son wanted were answers, but Robinhood didn’t have any. 

  Sadly, the day after Kearns committed suicide. Robinhood sent his account an automated email said the trade issue had been resolved and owed no money. 

  Here’s what the message said:

  “Great news!” The email read, “We’re reaching out to confirm that you’ve met your margin call and we’ve lifted your trade restrictions. If you have any questions about your margin call, please feel free to reach out. We’re happy to help!”

  Critics of Robinhood, such as William Galvin, Massachusetts Secretary of the Commonwealth and the chief financial regulator in the state of Massachusetts, said the online discount brokerage firm has been “very deliberate” in suckering new, inexperienced investors onto its platform. 

  In December, Galvin’s office filed a complaint against Robinhood that said the investing app is very much modeled after a video game. 

  In Massachusetts alone, Galvin said there had been more than 600 examples of Robinhood users who shouldn’t have been approved for complex options trading. 

  Before Kearns killed himself, he wrote a note to his parents that read: 

  “How was a 20-year-old with no income able to get assigned almost $1 million worth of leverage?” He added, “The puts I bought/sold should have canceled out, too, but I also have no clue what I was doing now in hindsight. There was no intention to be assigned this much and take this much risk, and I only thought that I was risking the money that I actually owned. If you check the app, the margin investing option isn’t even ‘turned on’ for me. A painful lesson. F*** Robinhood.”

  … and keep in mind, Robinhood’s business model relies upon payment for order flow to market makers, such as Citadel, as their only profit engine instead of trading commissions. This means that Robinhood has to continue attracting new users to boost revenues. 

  Robinhood is also facing multiple class-action lawsuits from customers over its decision to restrict GameStop trading and other popular meme stocks, leading to steep losses for customers.

  Tyler Durden
  Mon, 02/08/2021 – 21:00

• Vietnam Culls 100,000 Poultry As Bird Flu Spreads To 14 Provinces
  Vietnam Culls 100,000 Poultry As Bird Flu Spreads To 14 Provinces

  Reuters reports Vietnam has culled more than 100,000 chickens this year as an outbreak of the avian flu hits poultry farms in more than one dozen provinces.

  The Vietnamese government released a statement on Monday outlining how the highly pathogenic H5N1 and H5N6 bird flu strains have spread across 14 provinces in 39 days. 

  

  To mitigate the spread, the government has culled more than 100,000 chickens. 

  “The risk for the outbreaks to spread on a larger scale is very high,” the statement said.

  Vietnam’s total poultry flock is around 460 million birds. So the outbreak is not sizeable but definitely notable as bird flu outbreaks have been reported in the country over the last few years.

  Meanwhile, the country culled tens of thousands of pigs in late 2020 to curb the spread of African swine fever. 

  The outbreaks have been manageable for the country’s Department of Animal Health. If there is more spreading, readers should be on the lookout for government travel restrictions around outbreak areas. So far, none have been posted.

  Last week, we reported that China, a country that borders Vietnam, has had what one farmer told Reuters African swine fever contagion “is bad” right now. This has kept Chinese pig prices elevated, with possible meat shortages later in the year.

  ADMCF Wildlife tweeted “While #COVID19 has our attention, don’t forget all the other zoonotic risks out there! Multiple ongoing outbreaks leading to import bans by HongKong Gov.”

  • H5N8 avian flu in the UK
  • H5N8 avian flu in South Korea
  • H5N8 avian flu in Denmark
  • H5N8 avian flu in Hungary

  Readers should keep an eye on further developments of the bird flu and African swine fever possibly spreading around Asia and even Europe.

  Tyler Durden
  Mon, 02/08/2021 – 20:40

• China To "Seriously Sanction" Any Boycotters Of 2022 Beijing Winter Olympics
  China To “Seriously Sanction” Any Boycotters Of 2022 Beijing Winter Olympics

  Chinese state media is threatening Western officials and nations with “serious sanctions” should there be any largescale attempt to boycott the China-hosted Winter Olympic games scheduled for 2022.

  It comes amid a growing and increasingly growing movement, centered especially out of Canada, which is seeking to do just that. A number of Canadian MPs are currently calling for a boycott based on widespread and persistent reports that Communist authorities in China are carrying out systematic persecution of ethnic Uighur Muslims in Xinjiang region.

  The movement to hold China to account was picked up in The Guardian late last week, which highlighted the well-organized efforts of over 180 human rights groups that have called for the boycott.

  

  “The coalition of groups – primarily regional associations in support of Tibet, Taiwan, the Uighur community and Hong Kong – said the hopes in 2015 that awarding Beijing the Games would be a catalyst for progress, had faded,” The Guardian wrote while citing an ‘open letter’.

  Advocates of a boycott are angry that China was awarded the 2022 games in the first place. They write in the open letter which is now gaining global traction:

  “The IOC [ International Olympic Committee] refused to listen in 2008, defending its decision with claims that they would prove to be a catalyst for improved human rights. As human rights experts predicted, this decision proved to be hugely misplaced; not only did China’s human rights record not improve but violations increased substantially without rebuke.”

  “Now, in 2021, we find ourselves back in the same position with the IOC who are refusing to act despite the clear evidence of genocide and widespread and worsening human rights failures.”

  Calls for a boycott prompted a reaction out of the White House, with spokeswoman Jen Psaki days ago saying, “We’re not currently talking about changing our posture or our plans as it relates to the Beijing Olympics.”

  However, this didn’t satisfy Chinese state media, which is now issuing preemptive threats over the matter.

  Boycotting 2022 Beijing Winter Games, an unpopular idea, won’t receive wide support. IOC and athletes will both oppose it, and China will seriously sanction any country that follows such a call. pic.twitter.com/3cOSb2wMdS

  — Hu Xijin 胡锡进 (@HuXijin_GT) February 7, 2021

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

  On Sunday prominent state media mouthpiece Hu Xijin, who as the English language Global Times editor often echoes the thinking of government leaders in Beijing, tweeted that “China will seriously sanction any country that follows such a call.”

  He further called the movement for a boycott “unpopular” and unlikely to gain serious traction; however, given his fierce reaction he no doubt sees it as a significant “threat” to China’s prestige and reputation.

  Tyler Durden
  Mon, 02/08/2021 – 20:20

• Biden Warns China Should Expect "Extreme Competition" From US
  Biden Warns China Should Expect “Extreme Competition” From US

  During his wide-ranging interview with CBS televised just ahead of the Super Bowl Sunday night, President Biden said China is in for “extreme competition” from the United States under his leadership while still urging for the two economic powerhouses to establish a new relationship which avoids conflict. 

  “I know him pretty well,” Biden said in the “Face the Nation” interview while saying that when he next speaks to President Xi the two will have “a whole lot to talk about.” But Biden also vowed to hold Beijing to account for its severe human rights abuses – in reference to widespread reports of severe persecution and ‘reeducation camps’ targeting the ethnic Uighur Muslim minority.

  

  “I’ve said to him all along that we need not have a conflict,” Biden said of his Chinese counterpart.

  “But there’s going to be extreme competition . . . I’m not going to do it the way Trump did. We’re going to focus on international rules of the road.” Biden still made it clear he does not intend to go “softer” on China when compared to Trump. On this point, FT noted in its review of Biden’s latest comments:

  Biden, who spent considerable time with Xi as vice-president to Barack Obama, said the Chinese leader was “very bright” but “doesn’t have a democratic, small D, bone in his body”. At one point during the Democratic primary race last year, Biden described him as a “thug”. 

  In the first three weeks of the administration, senior US officials have taken a hard rhetorical stance towards China over everything from its rights record in Xinjiang and Hong Kong to its military activity near Taiwan.

  Here’s a clip of the key part of the latest CBS interview wherein Biden said:

  “But there’s gonna be extreme competition. And I’m not going to do it the way he knows. And that’s because he’s sending signals as well. I’m not gonna do it the way Trump did. We’re gonna focus on international rules of the road.”

  Biden says “I don’t mean it as a criticism” when calling China’s Xi undemocratichttps://t.co/oaRKL1m8OG pic.twitter.com/owHdEK30y3

  — RNC Research (@RNCResearch) February 7, 2021

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

  Indeed based on the latest statements on China out of Antony Blinken, the White House plans to continue Trump’s pressure campaign despite Biden’s assertion he’ll go about it differently.

  Biden’s claim is that unlike Trump, he’ll keep a “tough” stance on China but in a way that focuses on the “international rules of the road” – though it’s unclear precisely what this vague statement means.

  Tyler Durden
  Mon, 02/08/2021 – 20:00

• Government Fail: "We've Turned Teens Into Lockdown Lab Rats"
  Government Fail: “We’ve Turned Teens Into Lockdown Lab Rats”

  Via 21stCenturyWire.com,

  The verdict is clear: the imposition of lockdowns and social distancing, along with delays in getting children and adolescents back into schools – has been fatal for society, creating a slow motion mental health explosion that could last for decades.

  

  To anyone actually paying attention, warnings and concerns have been raised for months by many different people and advocacy groups, but rather than considering the spectre of permanent arrested development, governments have such dismissed concerns as a low priority in relation to ‘stopping the spread of the virus.’ Instead, virtue-signalling individuals in government, along with teachers unions, have retreated into the irrational world hypochondria and paranoia and leaving the youth hanging out to dry in the process – despite the fact that near zero risk of young people ever becoming ill from COVID-19. Similarly, most teachers are similarly in a low risk of ever becoming seriously ill from coronavirus.

  Last summer, an open letter was sent to UK Education Secretary Gavin Williamson, outlining the damage done by the government China-inspired reactionary ‘mitigation’ measures, and called for a return to ‘normal life.’ The letter was signed by more than 100 specialists in psychology, mental health and neuroscience, and published in The Sunday Times, stating:

  “As experts working across disciplines, we are united as we urge you to reconsider your decision and to release children and young people from lockdown.

  “Allow them to play together and continue their education by returning to preschool, school, college and university, and enjoy extra-curricular activities including sport and music as normally, and as soon, as possible.”

  Seven months later, the situation has deteriorated even further. The psychological impact is no longer a potential harm, it’s now manifest.

  Timandra Harkness at UnHerd writes…

  Last year an experiment was carried out on a group of adolescents to see how they would respond to being denied contact with others of the same age. The results were stark — starved of interaction with their own generation, the adolescents subsequently grew up to be more angry and fearful, drank more alcohol and found it harder to interact with others.

  

  The adolescents in questions were, of course, rats, but many of their human equivalents might wonder if a similar experiment was being carried out on them, too. Certainly it’s not a good time to be a kid. Teenagers in previous national crises risked being bombed out of their houses, killed by polio or Spanish Flu, or being sent to fight in the trenches. What Covid is wreaking is relatively invisible, and while the disease dominating the world is vanishingly unlikely to kill anyone under 25, there is a parallel epidemic of anxiety and depression crushing its way through young minds. The Royal College of Psychiatrists is warning that the psychological damage caused by the last 12 months could last for years.

  Rates of referral to child and adolescent mental health services were already alarmingly high before the pandemic; in the last year, they’ve gone up by 20%, to nearly 1 in 20 as teenagers are forced to stay home with their stressed families and live their entire lives through a screen: education, entertainment, their grandparents’ funerals and their own school-leaving prom. And, most important for teenagers, their social life.

  Adolescents need their social life the way babies need food, sleep and warmth. Everything from neuroscience to centuries of human experience tells us that the process of becoming an adult happens through spending less time with parents and more time with peers. By hanging out with friends and classmates, developing our first sexual and romantic attachments, competing and admiring, going too far and having to repair social bonds, we learn to be autonomous and independent — just as our rat cousins do.

  And yet, as the researchers on the rat experiment noted, findings in rodents don’t map simply onto human teenagers. For a start, none of the rats driven to drink by their solitary confinement had access to social media.

  Ever since teenagers first discovered that the smartphone in their pocket could connect them, not only to a boundless world of human knowledge and feline video action, but to their friends, rivals and potential love interest, adults have worried the damage it is doing. A January 2021 report on young people’s wellbeing and mental health is the latest to associate “heavy social media use” with worse wellbeing, especially for girls…

  Read more here…

  Tyler Durden
  Mon, 02/08/2021 – 19:40

• Manhattan Office Supply Soars To Record As Remote-Working Dominates 
  Manhattan Office Supply Soars To Record As Remote-Working Dominates 

  New York City’s commercial real estate is still on shaky ground. A new report shows a record amount of office space available in Manhattan as remote working continues to dominate. 

  Citing a new report via investment management firm Colliers International, Bloomberg says office availability increased to 14.9% in January, the highest since the Dot Com bust (2000). 

  

  Leasing plunged by 47% over the month compared with the same period last year. Asking rents are on a waterfall trajectory, falling for the seventh consecutive month to $73.65 a square foot, the lowest in three years. Not even at these prices are companies willing to set up shop or expand office space in the borough. 

  Supply is another issue. Since the pandemic began, companies based out of densely packed skyscrapers shifted employees to home and have made some of those working environments permanent. This has led to companies reducing their overall corporate footprint. 

  While the borough’s overall commercial real estate conditions have a negative outlook, there were some signs of optimism. “Leasing in Manhattan reached 1.9 million square feet (about 176,500 square meters) in January, the highest level since July, and 20% higher than the 2020 monthly average,” said Bloomberg.

  One notable large lease was Beam Suntory, an American company named Suntory Beverage & Food Ltd, leasing a 100,000 square feet space at 11 Madison Ave.

  As we noted last month, the return of office workers to the financial district has been nothing short of a disappointment as foot traffic slumps, yet again. 

  

  The low rate of office workers returning to Manhattan mixed with a record amount of office space available doesn’t bode well for the borough’s recovery. As a whole, the city will lag the rest of the country by a couple of years in terms of an economic recovery. 

  Tyler Durden
  Mon, 02/08/2021 – 19:20

• "The Herd Is Coming": Novogratz Sees Bitcoin At $100,000 As "Every Company" Buys It
  “The Herd Is Coming”: Novogratz Sees Bitcoin At $100,000 As “Every Company” Buys It

  Exactly one month ago, following MSTR’s latest purchase of bitcoin which helped push its stock to all time highs, we laid out a simple case for “How bitcoin hits $100,000 next” which boiled down to just one observation: “countless other publicly-traded firms will now rush to convert all their cash (and more) into bitcoin” an observation which was based on something we noticed two months earlier, namely that very soon it would be “cool” – not to mention lucrative – for corporations to buy bitcoin, and once that bandwagon was unleashed, $100,000 bitcoins would be just a matter of time.

  MicroStrategy Hits 20-Year High After Citron Call, Bitcoin Jump

  Here comes the new “blockchain” bandwagon: Which company will convert its cash into bitcoin next?

  — zerohedge (@zerohedge) November 25, 2020

  Incidentally, that was also when we – correctly – predicted that Elon Musk would become the first mega-corporation to convert a substantial portion of his cash into bitcoin:

  One such company which we are convinced will announce it is converting billions of its existing cash into bitcoin, is none other than Tesla, whose CEO Elon Musk was urged by MSTR CEO Saylor to make a similar move with Tesla’s money. And since Musk, already the world’s richest man thanks to the most aggressive financial engineering on the planet, has never been one to shy away from a challenge, we are absolutely confident that it is only a matter of time before Tesla announces that it has purchased a few billion in bitcoin.

  It took one month for Elon Musk to do just that.

  We bring all this up (again) because in the latest example that imitation may well be the sincerest form of analytical flattery (by billionaires), late on Monday, billionaire bitcoin preacher Michael Novogratz, the founder of cryptocurrency investment firm Galaxy Digital, said he sees Bitcoin “more than doubling to $100,000 by the end of the year” – sounds nice-round-numberishly familiar – spurred higher as more companies allow customers to use the token to make purchases, a thesis and price target first laid out here on Jan 9.

  Shortly after we tweeted the following rhetorical musing earlier today…

  Which will be the next top 20 company to convert (some) cash to crypto

  — zerohedge (@zerohedge) February 8, 2021

  … which we subsequently refined by suggesting that every company will now scramble to generate the kinds of stock returns that Microstar had achieved in the last 12 months, surpassing even TSLA in percentage terms as it accumulated “billions and billions” of bitcoin.

  TSLA vs MSTR indexed 1-year return

  The question is not which company will buy bitcoin next. It’s which company won’t pic.twitter.com/KqTiJvkuFy

  — zerohedge (@zerohedge) February 8, 2021

  … Novograts appeared on Bloomberg TV and said almost verbatim what we have been saying for the past month, namely that “you’re going to see every company in America do the same thing,” referring to TSLA’s $1.5BN purchase, which should propel the crypto to the stratosphere. And furthermore, between corporations adding Bitcoin to treasury funds and the city of Miami also considering adding the cryptocurrency to its balance sheet, “It doesn’t have to be a lot. It’s the messaging that matters, you’re seeing the herd here, and it’s coming.”

  Also repeating what we said in Jan, Novo – whose net worth hit an all time high today in the “billions and billions”, said that other companies would consider moving excess reserves into Bitcoin, perhaps as a hedge against inflation or against a falling dollar.

  Or just to telegraph to their investors to buy their stock, since buying bitcoin is the “cool” thing now, and lead to even faster bonuses than stock buybacks.

  Wired: buy bitcoin
  Tired: buy back stock
  Expired: run a viable, cashflow positive company

  — zerohedge (@zerohedge) February 8, 2021

  While his enthusiasm was hardly shared by his Bloomberg hosts some of whom have been spectacularly wrong about bitcoin for year and year and years (which is ok because they’ve also been wrong about everything else too), Novogratz said Elon Musk was a “genius” in his decision to “listen to the people,” or weighing the interests of a rising generation.

  “One of the things that connect Bitcoin, and Tesla and solar stocks and ESG investing is millennials and Gen Z, young people are buying into the future, and they see cryptocurrencies — Bitcoin and other currencies — as their currencies.“

  To be sure, skeptics will remain, in no small part due to Bitcoin’s infamous volatility – just a few days ago it plunged 25% before soaring by 50% days later  – has made it difficult for usually risk-averse CFOs to make it a regular part of corporate treasuries, however, with Elon Musk “breaking the seal” so to speak, the stigma of diversifying into such a volatile asset class is now gone and on the contrary, everyone will now scramble to buy some while they still can in hopes of levitating their stock and equity-linked comp in the process.

  In other words, “bitcoin is the new buyback.”

  “Now you got the biggest, the wealthiest man in the world and one of the biggest stories doing it,” Novogratz said. “You’ve got to think other CFOs and CEOs are saying, what should we be doing?”

  Why buying of course, as we said first in November.

  Full Bloomberg TV interview below:

  Tyler Durden
  Mon, 02/08/2021 – 19:00

• China Arrests High Profile Australian Journalist On Spy Charges 
  China Arrests High Profile Australian Journalist On Spy Charges 

  Fueling tensions amid an already spiraling trade dispute between the two countries, China has formally arrested an Australian citizen and journalist after she was initially detained under mysterious circumstances last summer.

  The now formal arrest of Cheng Lei is under charges of “illegally supplying state secrets overseas” after she long worked as a popular news anchor and analyst for China’s state-run English language news service, CGTN.

  

  The Australian government has long protested her detention and calls the allegations “baseless” after she was held under a law which gives Chinese authorities the ability to hold and interrogate a suspect for up to six months with no formal charges or access to lawyers.

  A Chinese Foreign Ministry statement said that “China’s judicial authorities have carried out investigation in accordance with the law, they concluded this Australian citizen conducted illegal activities on supplying state secrets overseas so in accordance with law they approved her arrest of February 5. This case is underway,” according to Australian national news.

  “We hope the Australian side will respect China’s judicial authority and stop interfering in China’s legal handling of this case in any way,” the statement added.

  When she initially “disappeared” into Chinese detention, fueling wide speculation as to her fate, Beijing officials indicated she was “suspected of carrying out criminal activities endangering China’s national security.”

  Australian consular officials said they’ve visited Cheng six times since her detention, most recently at the end of January, and it’s as yet still unclear exactly what Beijing is alleging, or whether they have evidence of alleged spying or espionage.

  

  Meanwhile, over the weekend Australian Foreign Minister Marise Payne issued a statement saying Canberra “has raised its serious concerns about Ms. Cheng’s detention regularly at senior levels, including about her welfare and conditions of detention.” Payne added that “We expect basic standards of justice, procedural fairness and humane treatment to be met, in accordance with international norms.”

  Some are speculating that China is upping the ante dramatically in terms of leverage amid the ongoing trade spat which has seen China block key Australian commodities exports. However, Beijing is insisting it is conducting a lawful and legitimate investigation.

  Tyler Durden
  Mon, 02/08/2021 – 18:40

• Biden Appears To Be Expanding The US Occupation Of Syria
  Biden Appears To Be Expanding The US Occupation Of Syria

  Authored by Jason Ditz via AntiWar.com,

  According to the Syrian Observatory for Human Rights, some 50 vehicles in a US military convoy crossed into Syria this weekend and headed for bases in the nation’s northeast Hasakeh Province.

  Details aren’t clear on why the convoy arrived, beyond delivering equipment. The Observatory noted this is the ninth such convoy to enter Syria in 2021, meaning nearly two convoys per week are showing up.

  

  While there has been no official announcement on a policy change, this speaks to the Biden Administration’s intentions in Syria, or at least intentions to not leave Syria.

  The US has very limited troop presence left in Syria, and President Trump made much of the remnant just being there to loot oil. With reports of ISIS seeking a resurgence there, it seems the US may have found itself another war, or at least a continuation of the existing war.

  A return to Obama-era priorities in Syria could set the stage for a bigger fight, as they were very keen to impose regime change in Syria before, and may be following the Libya model that saw Moammar Gadhafi deposed, killed, and Libya turned into the wreck it remains to this day.

  Biden is not merely perpetuating but expanding the US’s illegal occupation of Syria. https://t.co/iUSgx9Hb8p

  — David Mizner (@DavidMizner) February 8, 2021

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

  Citing SOHR, one regional report notes:

  According to the Britain-based monitoring group, “this is the ninth Coalition convoy to enter Syria since the beginning of 2021.”

  Nothing Biden has said would suggest otherwise, with the Kurdish YPG expecting a new influx of US support. Some of this will be done under the guise of fighting terrorism, some on claimed US interests in the region.

  No longer content to rob a single oilfield, the US may once again have designs on much more.

  Tyler Durden
  Mon, 02/08/2021 – 18:20

• With Scorching Economy Set To Overheat, Goldman Brings Forward First Rate Hike Estimate
  With Scorching Economy Set To Overheat, Goldman Brings Forward First Rate Hike Estimate

  How quickly things change.

  Just nine short months ago, in May 2020, the market did something it had never done before: it pushed Fed Fund futures for January 2021 negative, meaning that last spring bond traders were betting that sometime around today, overnight rates in the US would be negative as the US economy entered the final stretch of its Japanification implosion.

  

  Since then things haven’t quite worked out as expected, with long rates rising sharply and the 30Y today briefly breaching 2% for the first time since February 2020, on the back of surging breakeven rate, which rose by 1bp point to touch 2.21%, eclipsing a 2018 high of 2.2078%, and rising to the highest level since 2014 as markets increasingly price in far higher inflation over the next decade.

  

  And while the market would love to have its bubble-blowing zero-interest rate cake and eat it too for the next several years – as the Fed refuses to hike rates for the foreseeable future now that it is prepared to let the economy “run hot” indefinitely – that is unlikely to be the case especially with BMO calculating that just the surging price of commodities is already tantamount to a 4% headline inflation.

  

  And sure enough, already we are getting the first rumbling of what could be the next market crisis (which, recall, will be catalyzed by sharply higher inflation which will force the Fed to taper QE first and eventually to hike rates).

  In a note published this afternoon, Goldman hiked its assumption for additional fiscal measures to $1.5 trillion…

  With the passage of the budget resolution (Feb. 5), Congress has completed the first of two steps to provide additional COVID-relief funding along the lines of President Biden’s proposal.Next, committees will draft and vote on legislation. We expect this late in the nweek of Feb. 8. At this stage, we will learn much more about the details, size,and timing, of particular provisions.However, the key decision might not be made for another few weeks, when the Senate is likely to take up its version of the COVID-relief bill. By that point,centrist Democrats who have been the limiting factor on the size of the bill will need to decide how large a bill they are willing to support. We think this amount is likely to be higher than the $1.1 trillion (5% of GDP) wenhad previously assumed, and we are raising of assumption for additional fiscal measures to $1.5 trillion (6.8% of GDP)

  This is a sizable increase – Goldman estimates that the extra $400bn in stimulus is equivalent to nearly 2% of GDP – one which bumps the bank’s Q2 growth forecast from 10% to 11% and taking annual growth in 2021 and 2022 up by about 0.2% each year, to 6.8% and 4.5%respectively.

  At this point, it becomes clear that last week’s warnings from Larry Summers and Olivier Blanchard that the US economy is set to overheat are clearly coming true, which is also why Goldman has to anticipate how the Fed will response to this outlier growth, and inflation.  And it does so in a way that is unlikely to be welcome by the market, because whether it wants to or not, Goldman has to concede that such scorching GDP growth will inevitably mean an earlier tightening by the Fed, and sure enough this is what the bank’s chief economist Jan Hatzius has forecast:

  In light of the upgrade to our growth forecast, the larger-than-expected decline in the unemployment rate in January, and signs of a firmer inflation outlook, we have brought forward our forecast for the first rate hike from the second half of 2024 to the first half.  We expect the FOMC to start tapering its asset purchases in early 2022.

  Since every other banks tends to immediately imitate anything that Goldman’s econ department proposes, we expect that in the coming days we will see a barrage of sellside reports predicting that the first rate hike will be pulled back to early 2024 (or even late 2023 by those banks who really want to impress their clients with their originality), and while stocks will likely ignore this truncated tightening calendar for now, it is only a matter of time before trader euphoria pops once the realization that the Kool-aid is coming to an end starts becoming the dominant narrative.

  The only caveat is that since nobody really knows how long the Fed will allow the economy to “symmetrically” overheat as per its recent Average Inflation Targeting adjustment, those betting that the bubble bursting comes any time soon will likely end up facing substantial losses. Our advice: wait for the Fed to start leaking trail balloons of “first rate hikes.” That will be the hawkish signal that it’s finally time to get out of Dodge.

  Tyler Durden
  Mon, 02/08/2021 – 18:00

• Montana Aims To "Save Women's Sports" From Biden's Executive Order
  Montana Aims To “Save Women’s Sports” From Biden’s Executive Order

  Authored by Abigail Streetman via Campus Reform,

  The Montana House Judiciary Committee passed House Bill 112 in a 62-38 vote on Jan. 25, requiring public school athletes to participate in sports according to their biological sex. 

  The bill, named the “Save Women’s Sports Act” is sponsored by Rep. John Fuller, who told Campus Reform, “I have spent my life’s career defending children, helping them achieve their dreams and advocating for the benefits of sports and athletics for everyone.” 

  The bill passed the Montana House within days of President Joe Biden signing an executive order that would allow biological males who identify as females to compete in women’s sports, as Campus Reform previously reported. 

  According to United States v. Virginia, 518 U.S. 515, 533 (1996) “‘Inherent differences’ between men and women, we have come to appreciate, remain cause for celebration, but not for denigration of the members of either sex or for artificial constraints on an individual’s opportunity.”

  All-American track athlete Doriane Lambelet Coleman, tennis champion Martina Navratilova, and Olympic track gold medalist Sanya Richards-Ross recently wrote, “the evidence is unequivocal that starting in puberty, in every sport except sailing, shooting, and riding, there will always be significant numbers of boys and men who would beat the best girls and women in head-to-head competition. Claims to the contrary are simply a denial of science.”

  A study by the Journal of Applied Physiology found that on average women exhibit about 40 percent less upper body strength and 33 percent less lower-body strength than men. 

  If signed into law, HB 112 would take effect on July 1. 

  Montana’s House voted on a similar piece of legislation on January 25. 

  HB 113 would create the “Youth Health Protection Act.” This act would prohibit health care providers from “prescribing, providing, or administering gender transition procedures to a minor.” The bill failed to pass; a motion to reconsider also failed.  

  At least seven other states have proposed similar legislation.

  Kentucky, Oklahoma, North Dakota, and New Hampshire have joined Montana with their own versions of the “Save Women’s Sports Act.” New Hampshire, Texas, Utah, Mississippi, and Missouri have all introduced legislation that is similar to Montana’s HB 113.

  “I would hope that every state would follow Montana’s example, however, that probably won’t be the case,” Fuller said.

  South Dakota House Bill 1076 would require that citizens’ birth certificates reflect their biological sex, and may not be changed as the result of a gender transition surgery. The House was scheduled to vote on this bill on January 26. 

  However, Health and Human Services deferred to the 41st legislative day. 

  Alabama Senate Bill 10, the “Vulnerable Child Compassion and Protection Act,” prohibits gender transition therapy for minors and also forbids concealing related information from parents. The bill was referred to committee on February 2. 

  “Societies should be judged by how they protect the vulnerable in their midst and yesterday, Montana made a historic statement that they matter,” Fuller said.

  Tyler Durden
  Mon, 02/08/2021 – 17:40

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• The UK-EU Clash Over Northern Ireland Will Have Grave Consequences
  The UK-EU Clash Over Northern Ireland Will Have Grave Consequences

  Authored by Patrick Cockburn,

  “Get your retaliation in first,” is a cynical old saying in Northern Irish politics that means you hit your opponent whenever you can without waiting for a provocation. It neatly captures the violent traditions of the province and explains why the political temperature there is always close to boiling over.

  

  Imagine then the pleasure of those unionists who had always opposed the Northern Ireland Protocol, which places the new EU/UK commercial frontier between Northern Ireland and mainland Britain, to find that they had been genuinely provoked by the European Commission. In a classic cock-up, but one with grave and lasting consequences, Brussels had briefly called for a “hard border” between Northern Ireland and the Republic of Ireland, something it had repeatedly told Britain was an anathema because it would endanger the Good Friday Agreement and open the road to communal violence.

  Yet here was a glaring example of the EU selfishly backtracking on its own warnings and fecklessly reopening one of the most explosive issues in European politics, the culpable purpose of this being to stop vaccines capable of saving the lives of British pensioners from being exported from the EU to the UK.

  The Commission was instantly struck by a hail of abuse for its folly and it promptly withdrew the proposal with embarrassment, but for almost the first time in four years the EU was on the back foot in its relationship with Britain. No wonder Michael Gove was openly gloating as he told the House of Commons that the European Commission’s action had been condemned by everybody from the Archbishop of Canterbury to the former prime minister of Finland. And there was indeed some innocent pleasure to be had in watching somebody as poised and ostensibly competent as the Commission president, Ursula von der Leyen, get quite so much egg on her face.

  She had presumably miscalculated or ignored, as have so many politicians before her, the extreme combustibility of Northern Irish politics, or failed to notice how far they had already been inflamed by the creation of an Irish Sea EU/UK commercial border at the start of this year. Such flames are not be easily put out, whatever calming noises may come from Brussels, London and Dublin.

  Port officials in Belfast and Larne, who actually conduct the border checks, have stopped working on the grounds that they fear for their safety. A piece of graffiti has appeared on a wall in Larne reading: “All Border Post Staff are Targets.” For weeks, the media had been full of stories about frustrated Northern Irish businesses facing ruin because of the new border checks.

  Ever since Boris Johnson openly betrayed the unionists and signed the Irish protocol, they have felt the ground shifting under their feet and, they found to their horror, apparently shifting inexorably towards a united Ireland. They complain that even the British Army was having to fill in EU forms to bring military equipment into the province (it turned out that they were doing so, though they did not have to under the terms of the Protocol). An element of “getting your retaliation in first” surfaces here since, under pressure from those even more hard line than themselves, the Democratic Unionist Party leadership which – along with Sinn Fein – heads the government in Northern Ireland, has switched its stance. Instead of reluctantly enforcing the Irish Protocol, it now opposes it.

  One of DUP ministers, Edwin Poots, ordered the withdrawal of the port inspectors, though the police had told him that they did not believe the inspectors were under threat from loyalist paramilitaries. Poots claims the police did not have “a full understanding of the risks” – and in the long term he is probably right.

  The bizarreness – and potential dangers – of the permanent crisis in Northern Ireland cannot be over-stated. By leaving the EU, Britain created a new UK/EU frontier the effect of which would be to the benefit of either the unionists/protestants or the nationalists/catholics. A repartitioning of Ireland by resurrecting a physical barrier along the 300-mile-long land border was never feasible, if only because it largely runs through nationalist/catholic majority areas where any new customs posts would be burned or wrecked as soon they were established. Now the unionist/protestant community is extending a similar veto over an “Irish Sea border”.

  In other words, the frontier between Britain and the EU is a disputed no-man’s land where two communities struggle ceaselessly for dominance. This is something that will affect – and probably poison – future relations between London and Brussels for decades to come. Brexit automatically destabilised Northern Ireland and now Northern Ireland is going to destabilise Brexit Britain.

  But the embattled province will not be the only friction point, only the one with greatest potential for violence. Boris Johnson won the general election of 2019 by claiming that he would “Get Brexit Done”, promising that relations between Britain and the EU would soon achieve a stable equilibrium. But that is precisely what is not happening. Instability is built into the Withdrawal Agreement, and the row over vaccines and the Irish Protocol is only a precursor to decades of friction.

  Britain will be permanently in the position of negotiating and renegotiating access to the single market for its goods and services. It will, moreover, be negotiating from a position of weakness and will be continually forced to make concessions – as was so often the case during its negotiations to leave the EU. British fishermen, once the symbol of the benefits to come of enhanced British sovereignty, have become the first visible casualties of this new and unequal balance of power.

  Remainers once fantasised about the day when Leavers would see the ruinous errors of their ways in exiting Britain’s largest market and lament their folly. But the exact opposite is likely to happen: the EU will in future fight for its 27 members’ interests with even less regard for the views of the British government and British public opinion than it did before.

  A Brexiteer government and pro-Brexit media will inevitably respond by scapegoating Brussels for everything that goes wrong in Britain, accusing it of overbearing behaviour and unfair practices. They may even be right, but this will not do them any good, simply because the EU has the stronger hand of cards.

  Just at the moment the government can say – though not too loudly – that the advantages of speedy national action, unobstructed by the restraints imposed by an unwieldy EU alliance, are exemplified by its swift development and rolling out of the coronavirus vaccine, but this type of success is unlikely to be often repeated.

  On the contrary, the outlook is that Britain will remain obsessed by its relations with the EU – and that those relations will generate continuous friction. The economic relationship may begin to sort itself out in time, but at the cost of much bad political blood while Brexit turbo-charges Irish and Scottish separatism. The furore in Northern Ireland is not an atypical hangover from the past, but the first instalment of a permanent confrontation between Britain and the EU.

  Tyler Durden
  Mon, 02/08/2021 – 02:00

• Living Off Grid As The Collapse Of Society Approaches: "Why Aren't More People Doing This?"
  Living Off Grid As The Collapse Of Society Approaches: “Why Aren’t More People Doing This?”

  Authored by Michael Snyder via The Economic Collapse blog,

  You don’t have to be a cog in the system.  For most of us, the only option that was presented while we were growing up was to get on the hamster wheel and run as fast as we could.  You know what I mean – go to school, get a job, pay a mortgage, prepare for retirement, etc.  But it doesn’t have to be that way.  If you truly want to unplug from the system and live your life off the grid, you can.  Of course it isn’t easy, but nothing in life really worth doing ever is.

  

  Sadly, the lives of most people are defined by the matrix that the vast majority of us are connected to on a daily basis.  In most cases, your income and status in society are defined by whatever “job” has been given to you by whichever corporation you are currently working for.  We like to call ourselves “employees”, but in essence we are basically corporate servants.

  Of course most people feel like they can’t quit their corporate jobs because each month they have to make payments on mortgages, auto loans and credit card debts that they owe to giant corporate financial institutions.

  And most people also feel the need to constantly “prepare for retirement” by pouring money into corporate securities in the rigged game that we call “the stock market”.

  But what is going to happen to all of them when our economic and financial systems completely implode?

  During this current economic downturn, millions upon millions of Americans have already lost their jobs, and it is being reported that millions of Americans could potentially be evicted from their homes in 2021.

  When things go bad, it is the little guy that gets crushed first.

  But you don’t have to wait around for that to happen.

  An increasing number of Americans have decided that living off the grid is the way to go.  For example, 65-year-old Bob Wells will never have to make a mortgage payment or pay rent ever again.  He lives on public lands in his GMC Savana, and he uses solar power to run his 12-volt refrigerator.  In recent years he has become internationally known for his YouTube channel named “Cheap RV Living”, but it wasn’t always this way.

  In fact, his decision to adopt a nomad lifestyle was originally sparked by deep dissatisfaction with the corporate job that he was working…

  Before becoming a nomad in 1995, Bob lived in Anchorage, Alaska, with his wife and two boys. He worked as a union clerk at the same Safeway where his father had worked until retirement, only to die two years later.

  Bob didn’t want his father’s fate, but there he was. As days became decades, he went to a job he hated, worked with people he didn’t like, to buy things he didn’t want. By his own telling, he was the living embodiment of Thoreau’s “quiet desperation”. He knew he wasn’t happy, but it never occurred to him to live differently.

  When he suddenly found himself divorced, Bob made a dramatic choice that changed his life forever…

  Then, when he was 40 years old, the divorce happened. After paying alimony and child support, he was taking home $1,200 a month, $800 of which went towards rent.

  One day, fretting about impossible finances, he saw a green box van for sale and thought: “Why don’t I buy that van and move into it?” The idea struck him as crazy, but with the prospect of homelessness closing in, he drained the last $1,500 in his savings account and bought the van that was just “too ratty-looking” for its previous owner. He gave his landlord notice that night, threw a sleeping pad in the back of his new home, and cried himself to sleep.

  Today, he has hundreds of thousands of online followers, and he is even featured in a new film called “Nomadland”.

  But despite all of that success, he will continue to live in his GMC Savana.

  For others, living in a van is not a palatable option, but they have still chosen to live off the grid.

  Over in the UK, a British couple named Matthew and Charis Watkinson have fully embraced a philosophy known as “collapsology”…

  NO bills, no mortgage, an endless supply of homegrown grub and even a hot tub to relax in – welcome to the world of two Brits prepared for the end.

  Essex vets Matthew and Charis Watkinson gave up the rat race for the good life in the Welsh countryside after reading about ‘collapsology’, a movement based around the theory that society as we know it could fall apart.

  Wouldn’t it be great to have no bills every single month?

  Matthew and Charis gave up their £30,000-a-year jobs, and now they produce their own food on three acres of land in Pembrokeshire…

  Matthew and Charis, 35, bought three acres of land in Pembrokeshire for £35,000 and spent a further £25,000 on building a house, chicken coops, greenhouses, a horse poo-powered gas cooker and even a hot tub.

  They are entirely self-sufficient, installing solar panels, growing their own fruit and veg, building beehives, rearing up to 140 chickens and converting lorries and flatbed hay trailers into zero-carbon living quarters.

  If the collapse of our society greatly accelerates, they are ready.

  Meanwhile, they don’t have to get up at the crack of dawn every morning and drag themselves to corporate jobs that they absolutely hate.

  As I was preparing this article, I was reminded of a Reddit post that I saw earlier today…

  I don’t understand how people would rather have a job than be dead. I genuinely don’t understand the motive. I picked a field I love, I became educated, I have had multiple jobs that are vastly different from each other and every one gives me the same overwhelming feeling of “I’d literally rather die than do this”. It’s been every job I’ve ever had, even before graduating college. I simply don’t feel rewarded when I put in effort to complete a task, I never get fulfillment out of a job well done. I don’t understand how people do this their whole lives

  Have you ever felt that way?

  I think that most of us have.

  Matthew and Charis may have simple lives, but they are absolutely thrilled to be free of the system…

  “We’ve built a farm for a lot less than £100,000 and it’s all ours.

  “We don’t owe anybody any money and we don’t have any bills – why aren’t more people doing this?”

  I think that is a perfect question.

  Why aren’t more people doing this?

  If you hate what your life has become, maybe it is time for a big change.

  Countless others have gotten free from the system, and you can do it too.

  *  *  *

  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
  Sun, 02/07/2021 – 23:30

• China's New Type 15 Lightweight Tank Enters Service In Xinjiang To Protect Western Borders 
  China’s New Type 15 Lightweight Tank Enters Service In Xinjiang To Protect Western Borders 

  China and Russia are rushing to field new tanks while the US continues to operate M1 Abrams designed more than four decades ago. 

  According to intelligence firm Janes Information Group, the latest installment that the US is falling behind the modernization curve is China’s new lightweight battle tank has formally entered service. 

  On Jan. 30, China North Industries Group Corporation announced on state-owned television that Type 15 (also known as ZTQ-15) lightweight battle tank entered service with the Xinjiang Military Command of the People’s Liberation Army Ground Force (PLAGF).

  

  China Central Television (CCTV) said an undisclosed number of Type 15s were delivered to a PLAGF regiment in Xinjiang. CCTV broadcaster said it was “the first lightweight tank to join the military command.”

  The broadcaster said the Type 15s are outfitted with special oxygen equipment to allow the tanks to operate at high altitudes. 

  Janes said no confirmation on how many Type 15s were deployed, but it appears these new tanks will significantly increase PLAGF’s combat capabilities in the region. 

  “The Type 15 tank is easy and flexible to operate and has high mobility, as it is equipped with a new engine designed for plateau missions and an oxygen producer. It also uses new armor materials and stealth technologies, so it has reduced weight but better protection and stealth functions,” Zhang Hongjun, a master sergeant class one at the regiment, told CCTV.

  The new tanks are much lighter than the People’s Liberation Army’s Type 96 and Type 99 tanks, allowing it to become a rapid response ground-based weapon, with a maximum top speed of 43 mph.

  “It also has advanced fire control and weapons systems, and extra battlefield situational awareness capabilities, particularly the ability to identify friends or foes, providing significant convenience to the troops,” Hongjun said.

  The new tanks appear to be safeguarding China’s western borders. More specifically, Beijing has a significant “core interest” in the northwest Xinjiang province where it houses massive re-education camps of Uighur Muslims. 

  Tyler Durden
  Sun, 02/07/2021 – 23:00

• The GameStop Saga Unravels 'Stakeholder Theory'
  The GameStop Saga Unravels ‘Stakeholder Theory’

  Authored by Jeff Deist via The Mises Institute,

  The GameStop saga shows some “equity” movements are more equal than others…

  

  Stakeholder theory, the corporate version of social justice, attempts to install this hopelessly amorphous concept of “equity” in the business world. Equity, unlike equality, demands different treatment of individuals and different distribution of resources based on need, identity, and historical injustices. But now equity has evolved beyond a political buzzword, and finds growing support in calls for stakeholder capitalism. The animating impulse in big corporate boardrooms today requires cultivating an image of social responsibility. Under this theory business firms should entertain all kinds of noneconomic goals and outcomes. No longer may owners simply concern themselves with profit or loss, but instead must consider the broader societal implications of everything their business does. Whether corporate leaders concern themselves with social justice out of genuine desire or merely to avoid backlash is an open question, but the events of 2020 clearly changed the conversations in boardrooms.

  Under the old conception, businesses have four primary elements, namely owners, managers, employees (or vendors), and customers.

  All four have skin in the game, which is to say their own money or income is involved.

  The notion of stakeholders inverts this paradigm and grants a degree of power over ostensibly private businesses to those who take no risks and provide no benefit. By undermining the suddenly old-fashioned idea of profit and loss as the guiding principle for business, stakeholder theory calls into question the very existence of millions of businesses big and small—in fact their grubby and narrow focus is simply to make money.

  To suggest that the general public or society at large ought to be a de facto partner in any business, based on the interconnected nature of any economy, is to suggest an unlimited and wholesale attack on the concept of private ownership. It is patently antiproperty and implies collectivism by its very conceptual foundation. It insists everyone in society ought to have an interest in and some say over what ostensibly private firms do—and not only with respect to their profits, but even their business practices and mission. Stakeholder theory even creates a starring role for the earth itself, as the ultimate nonrenewable resource which is dubiously always in peril from business.

  Societal ownership of business firms traditionally takes three prominent forms, specifically socialism, communism, and fascism. But in 2021 these terms fail to shock or alarm us as they once did. The constant use of attenuated language makes us almost immune to powerful words that ought to be used judiciously. Socialism is increasingly popular, while fascism is the pejorative increasingly aimed at market capitalism. The newspeak of equity and stakeholders is yet another “third way” bridge blurring the distinction between private and state, between the economic means and the political means. And to be fair, equity and stakeholder movements per se do not represent outright socialism (or fascism) in either the Misesian or Rothbardian sense. We still have stock markets, we still have private owners, and we still have profits and losses. The equity revolution takes place within the form, as an evolution rather than a deviation.

  Enter GameStop and its Reddit WallStreetBets bros, determined to prop up the fading retailer’s stock price in the face of intense short-selling pressure by powerful and rich hedge funds. This uprising, whether motivated by greed, gamer culture, or sheer spite against perceived Wall Street fat cats, is as much imbued with notions of fairness and societal benefit as any protest movement.

  Yet suddenly the champions of stakeholder theory, like the predictably despicable Washington Post, find themselves singing a new tune about vulture capitalists, deciding that hedge fund short sellers are the good guys in the story.

  After all, stakeholder theory means investment funds and major corporations have the right—or even the duty—to make uneconomic decisions. Broader societal interests, not just bottom-line profits and shareholder value, must be considered. So funds and companies frequently invest in supposedly green but inevitably less efficient technology, make donations to left-wing social causes like Black Lives Matter, and give money to a variety of charities. These actions may in fact provide long-term economic benefits from a positive public image, but they do not directly increase share prices or dividends.

  Redditors have the same right. Correctly or not, they see social benefit in causing financial losses for hedge funds with short positions looking to profit off GameStop’s stock decline and anticipated eventual bankruptcy (due to downloadable games obviating any need for retail outlets). If Koch Industries can be characterized as a nasty fossil fuels polluter whose profits fund captured antidemocratic right-wing think tanks, why can’t Redditors similarly portray hedge funds as evil tools for the 1 percent to get even richer on the back of a struggling retail chain? The notion of rich Wall Street investment bankers using their inordinate financial power to rip the marrow out of a dying industry’s carcass used to excite the Left. Now that same narrative somehow becomes an alt-right populist slander, one used by Reddit bros in their evil plot to manipulate the GameStop price.

  In truth there are no victims in this tale. Perversely, the celebrated former Fed chair and current Treasury secretary Janet Yellen was paid more than $800,000 by Citadel LLC—another player in the GameStop story. Should her “equity” be redistributed? Just yesterday GameStop stock dropped nearly 60 percent and has lost $400 per share from its recent all-time high. And while it all seems like a manipulated and even immoral series of events, we should remember that nobody put a gun to anyone’s head. The WallStreetBets group collectively chose to put their own money at play, knowing they were pumping the share price and could not all get out at once or even at a profit. Melvin Capital and other hedge funds heavily invested in shorting GameStop chose to take a significant risk, and their due diligence certainly could have included understanding and monitoring Reddit investment boards. As economist Peter Earle recently said, if you get in the ring, you might get punched.

  The purpose of capital markets is price discovery. They help investors and businesses allocate capital to its best and highest uses, however imperfectly and haphazardly. Short traders, long traders, so-called insider traders, futures traders, derivative contracts, speculators, gamblers, colluders, and even naked short sellers all serve this imperfect process. All of these individuals and mechanisms constantly recalibrate and react to changing conditions, bringing a public company’s performance (and share price) into greater clarity. And any firm not wishing to subject itself to the vagaries of fickle equity markets or public campaigns can simply remain private and fund itself through operations or private placements.

  The process is imperfect because humans are imperfect. It can manifest in fits and starts, and demonstrate deep irrationality or even mania. But the alternative is nothing less than creeping socialism by another name, whether stakeholder capitalism or otherwise. When your atavistic and deficient theory backfires on you, look for a mirror rather than a congressional bailout. Everything is not everyone’s.

  Tyler Durden
  Sun, 02/07/2021 – 22:30

• Pizza Hut To Begin Drone Deliveries In Israel 
  Pizza Hut To Begin Drone Deliveries In Israel 

  Drones will significantly revolutionize last-mile logistical networks over the coming years. Companies from Amazon to UPS to Walmart and others are quickly working to pilot test drones for last-mile deliveries, with the hope that one day these autonomous aerial vehicles will be embedded in their supply chains to create higher efficiencies. 

  The topic gains further significance in Israel, where Pizza Hut will pilot test drone deliveries in June. The company partnered with Dragontail Systems where the tests will be conducted at a single store in Bnei Dror. 

  

  According to WSJ, Pizza Hut Israel won’t be flying pizzas directly to customers’ homes but instead will drop them off at government-approved hubs, such as ones that could be designated in parking lots. Delivery drivers will be able to retrieve the pies from the drone and complete the delivery’s final stretch. 

  “Drone delivery is a sexy thing to talk about, but it’s not realistic to think we’re going to see drones flying all over the sky dropping pizzas into everyone’s backyards anytime soon,” Ido Levanon, CEO and director for Dragontail Systems, which will be handling the drone trial, told WSJ.

  During the test, the country’s Ministry of Transportation has allowed an “air bubble” measuring 50 square miles north of the country, where the Pizza Hut drones can safely operate. 

  WSJ noted that Pizza Hut’s Bnei Dror store will be armed with a fleet of drones that could serve up to 7,000 additional households. 

  Ahead of the big test, Dragontail will be operating its cargo drones six times a day to perfect commercial operations. Pizza Hut and Dragontail hope the flights this summer will be enough data for the government to analyze to approve a more widespread drone delivery service at other stores. 

  There’s one problem, the transportation agency has restricted the drones to a cargo payload of only 5.5 pounds. There is a plan to increase the cargo payload to 22 pounds, which would allow it to carry multiple pizzas and bottles of soda. 

  With more people shopping from home in the virus pandemic, the need for faster delivery times has become a priority and concern for many consumers. The proliferation of drones integrated into last-mile deliveries will become a reality not just in Israel but in many other countries in the coming years. 

  Tyler Durden
  Sun, 02/07/2021 – 22:00

• "We Cannot Mince Words": San Francisco Education Official Denounces Meritocracy As Racist
  “We Cannot Mince Words”: San Francisco Education Official Denounces Meritocracy As Racist

  Authored by Jonathan Turley,

  Alison Collins, the Vice President of the San Francisco Board of Education, has declared meritocracy to be racist even in the selection of students at advanced or gifted programs. As we have previously discussed, this has been a building campaign in academia as educators and others denounce selection based on academic performance through testing. At issue in San Francisco is Lowell High School where top students were selected through testing and grades.  Most cities have such gifted programs or institutions, though we have discussed calls for the elimination of all gifted and talented programs in cities like New York.  Lowell had a majority of white and Asian students and only two percent of its student body were African-Americans. Collins and other board members want to abolish the merit-based selection in favor of a blind lottery system.

  Collins’ remarks from a San Francisco Board of Education public meeting in October 13, 2020 were only recently posted by Sophie Bearman of San Francisco’s online publication Here/Say Media. In the meeting, she declared:

  “When we talk about merit, meritocracy and especially meritocracy based on standardized testing… those are racist systems… You can’t talk about social justice, and then say you want to have a selective school that keeps certain kids out from the neighborhoods that you think are dangerous.”

  Collins made the statement in support of a resolution, entitled “In Response to Ongoing, Pervasive Systemic Racism at Lowell High School,” authored by Collins, Board President Gabriela Lopez, Commissioner Matt Alexander, and Student Delegates Shavonne Hines-Foster and Kathya Correa Almanza.

  Newsweek quotes at least one Lowell teacher who objects to the elimination of the school as a place for top performing students and said that the system is blind on race and designed to reward “the hardest working kids in terms of academics.”

  

  Gifted programs and elite academic schools are designed to allow students to reach their full academic potential with other students performing at the highest level of math and other disciplines. It is often difficult for such students to reach that potential in conventional settings. Teachers have to keep their classes as a whole moving forward in subject areas. That often means that academically gifted children are held back by conventional curricula or lesson plans. Those students can actually underperform due to boredom or the lack of challenging material. Many simply leave the public school system.  Moreover, students tend to perform better with students progressing at their similar level. Teachers can then focus on a lesson plan and discussions that are tailored to students at a similar performance level.

  Moving to a lottery system at Lowell would obviously convert the school into a conventional academic program.  We can debate the value of having such schools to cater to the most advanced students. I believe such schools are important components to public education. We not only reward students for their considerable academic achievement but guarantee all students that they can progress as far as their interests and capabilities will take them. These schools are the source of pride in many cities in showing the full potential of high school students in science and other fields.

  I do not agree that meritocracy is inherently racist. Students of all races benefit from such schools. While there is clearly less diversity at Lowell, the best solution is not to eliminate such programs but to work harder in the earlier grades to allow minority students to excel (and ultimately gain admission to such programs).

  There is a need for meritocracy in academia and society at large. Indeed, such scores offer race-neutral systems for advancement. While subjects like math have been declared racist (and a University of Rhode Island professor recently declared all of science, statistics, and technology to be “inherently racist”), these are fields that allowed many intellectuals of color to advance.

  We have to have systems of objective comparison in the ability and performance of students in academia. We use such tests and scores for the selection of students admissions to college and society uses such systems for business and professional advancement. The world is becoming a far more competitive place. Other countries are not abandoning meritocracy. They are pushing their most most talented students to achieve even more in specialized programs and advanced courses. We need to do the same if we are going to remain competitive as a nation. Eliminating elite programs like Lowell removes an opportunity not just for these students but our society as a whole.  These are some of the best developing minds in our country and they should be allowed to reach their full potential through special schools and programs.

  I have been a huge supporter of public schools my whole life. While my parents could afford private schools, they helped form a group to keep white families in the public school system in Chicago in the 1960s and 1970s. They wanted their kids to be part of a diverse school environment. I also sent my kids to public schools for the same reason. I view our public schools as important parts of our society as we shape future citizens.

  This efforts in San Francisco and New York will only encourage more families to leave our public school systems and potentially increase rather than reduce problems of diversity in our student bodies. The need to achieve greater diversity in top public high schools is real and needs to be addressed. However, the solution is to create better educational opportunities for younger students to lift them up rather than lower (or eliminate) entry standards at these schools. That is certainly harder than just imposing a lottery system for all schools but it preserves the opportunity for high advancement for students of all races.

  Tyler Durden
  Sun, 02/07/2021 – 21:35

• The Semi Chip Shortage Is Turning Into A Crisis
  The Semi Chip Shortage Is Turning Into A Crisis

  For the better part of the last month we have been writing about how the shortage in semiconductors has wreaked havoc on the auto industry. 

  Now, it looks as though the shortage is going from being a nagging pain in the auto industry, to a full scale crisis that is also affecting consumer electronics like phones and gaming consoles. 

  It is now being referred to as the “most serious shortage in years”, with Qualcomm’s CEO saying last week that there were now shortages “across the board”, according to Bloomberg. 

  But it isn’t just Qualcomm executives speaking out: other industry leaders have warned in recent weeks that they are susceptible to the shortages. Apple said recently that its new high end iPhones were on hold due to a shortage of components. NXP Semiconductors has also warned that the problems are no longer just confined to the auto industry. Sony also said last week it may not be able to to fully meet demand for its new gaming console in 2021 due to the shortage. Companies like Lenovo have also been feeling the crunch.

  

  Neil Mawston, an analyst with Strategy Analytics, said: “The virus pandemic, social distancing in factories, and soaring competition from tablets, laptops and electric cars are causing some of the toughest conditions for smartphone component supply in many years.” 

  Mawston says that prices for some smartphone components are up as much as 15% the last 6 months. 

  At the center of the shortage is Taiwan and its largest company Taiwan Semiconductor Manufacturing Co. The company now sits astride a larger political crisis between China and Taiwan while Biden officials in the U.S. work to find solutions, not only for the semiconductor issues, but for the larger conflict developing between the two nations. 

  To make matters worse, Huawei is being blamed for hoarding components in 2020 (almost as if they knew this was going to happen). This set off other manufacturers to do the same. According to the report:

  Industry executives also blame excessive stockpiling, which began over the summer when Huawei Technologies Co. — a major smartphone and networking gear maker — began hoarding components to ensure its survival from crippling U.S. sanctions. Led by Huawei, Chinese imports of chips of all kinds climbed to almost $380 billion in 2020 –– making up almost a fifth of the country’s overall imports for the year.

  Rivals including Apple, worried about their own caches, responded in kind. At the same time, the stay-at-home era spurred sales of home appliances from the costliest TVs to the lowliest air purifiers, all of which now come with smart, customized chips. TSMC executives said on its two most recent earnings calls that customers have been accumulating more inventory than normal to hedge against uncertainties, a maneuver they see persisting for some time.

  

  “There’s a chip stockpiling arms race,” said Will Bright, co-founder and chief product officer at Drop. Analyst Mario Morales of IDC said: “A lot of it can be traced back to the second quarter of last year, when the whole world basically shut down. Many auto companies shut down manufacturing and their suppliers re-prioritized. Not until the second half will we see relief for some of these markets.

  While the extent of the damage on consumer electronics remains to be seen, the shortages are expected to cost $61 billion worth of sales in the auto industry. Recall, we noted just days ago that GM and Ford had joined Nissan in cutting production due to the shortage. 

  Mid-day on Wednesday the U.S. automaker announced that the shortage would “impact production in 2021”, according to StreetInsider. The company said in a statement that “semiconductor supply for the global auto industry remains very fluid”.

  It continued: “Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM. Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021.”

  The automaker said it is “currently assessing the overall impact, but our focus is to keep producing our most in-demand products – including full-size trucks and SUVs and Corvettes – for our customers.”

  

  Nissan also announced Wednesday that it had fallen victim to the shortage. As a result, Nissan said it would suspend some truck production at its Mississippi plant due to the shortage of chips. Nissan is struggling to make “short term production adjustments”, according to Yahoo Finance, at its plants in North America.

  The stoppage is starting with three non-production days at the Canton, Mississippi plant. Further delays could continue if the semi shortage continues to negatively affect business. 

  

  We also noted just hours ago that Ford had also announced it was making more production cuts and temporary layoffs at its Chicago Assembly Plant. The most recent round of layoffs is also being attributed to the supply chain disruptions in semiconductors, according to The Pantagraph. 

  Tyler Durden
  Sun, 02/07/2021 – 21:10

• Protecting Your Capital During A War
  Protecting Your Capital During A War

  Authored by ‘Fritz’ via Asia Stock Report,

  Wars are one of the greatest destroyers of capital.

  In Barton Bigg’s book “Wealth, War & Wisdom”, he makes the case that to protect your capital during a war, investors need to own diversified portfolios of stocks and property in safe regions. The book chronicles the experience of investors during World War II: whose wealth was destroyed and why. And what you could have done to protect your wealth.

  

  Biggs comes to the conclusion that the following asset classes were best at preserving wealth, ranked from best to worst:

  1. Survival goods

  Prices for daily necessities shot up during the war. And so, the people who got rich were often the black marketers. The black market was the most lucrative profession and the best source of wealth as the war raged on. Stocks, land, real estate and businesses on the other hand, worked only if you had a very long-term horizon.

  What black marketers did was hoarding survival goods such as clothing and food and then selling them at high prices to desperate fellow citizens. Then using their black money to buy and hoard gold.

  In Japan, people became increasingly desperate as the war progressed. Becoming cold and hungry, paying up for clothes, food and whatever other survival goods they could get their hands on. Even selling land at fire-sale prices in order to survive. Biggs tells stories of people involved in the sourcing of black market construction material for the rebuilding of bombed out cities, making fortunes in the process.

  After liberation, known black marketers were often physically abused and their property seized, especially in Italy. But others managed to use their ill-gotten wealth to buy real businesses after the war. In the end, black marketers ended up ahead of almost everybody else.

  

  Desperate Japanese citizens queuing up for food rations

  2. Art, gold and jewelry

  Gold and jewelry is portable, liquid and easily protected compared to building structures. Throughout the early 1940s it remained easy to transfer gold and jewelry to Switzerland from almost anywhere in Europe. So jewelry and gold played a crucial role in preserving wealth for any individual that stayed within an occupied country.

  The difficulty was to hide jewelry from thieves and occupying forces.

  You could hide jewelry in deposit boxes. But as happened in France in the early 1940s, French banks had to report to the Germans the contents of all safe deposit boxes. The contents of those safe deposit boxes were then transferred to Germany.

  Another option was to stash jewelry at home. The downside of keeping jewelry inside your home is that bombing campaigns tend to lead to an increase in crime, as experienced in Britain throughout the 1940s. As Barton Biggs says “war unravels the bonds of civil society”. A rich old lady he knew “slept with [her] jewelry instead of her husband for four years” out of fear it would be stolen from her. Anything ostentatious was stolen.

  In Italy, some families banded together, moved their prized possessions to defensible villas in the hills and stood ready to fight for their lives, all while desperate groups wandered the countryside searching for loot. You had to protect your property with your life. In countries occupied by Germany, informants told German officers where jewelry was stashed and large estates were often ransacked by them. Con artists flourished, often promising to hold jewelry safe on behalf of others, then running off to a far-away land never to be seen again.

  A safety box outside the country would have kept jewelry safe. But you had to keep them secret. When your neighbours’ children are starving, they will do anything – including reporting you to occupying forces.

  Jewelry is more liquid than property, so it could readily be swapped for necessities such as food and medicine. At a discount, of course. In an occupied country filled with informers and treachery, you had to watch your back when transacting in jewelry. Or accept a large discount from better-known black market dealers.

  In Soviet-occupied countries, Soviet soldiers often fancied watches and jewelry and had no qualms murdering to get them. The Red Army was also used by high Soviet officials to help plunder for them. Clothes, cars, fine china, jewelry, art and grand pianos were shipped back to Russia. So jewelry did not preserve wealth effectively in countries occupied by Soviet forces.

  Art performed poorly as a wealth preserver during WWII. It is vulnerable to destruction by fire, can easily be damaged, quickly plundered and is difficult to hide. But if you had capital to buy them during the war, you would have made a fortune. Keynes famously went on a mission to Paris in the spring of 1940 to buy, to the sound of howitzers, two Cézannes and two Delacroix that subsequently appreciated 40x in the next four decades.

  

  The Cézanne painting purchase by Keynes in the spring of 1940

  3. Overseas assets

  Overseas assets also helped preserve wealth. Especially if kept in safe jurisdictions such as Switzerland. That was especially the case for individuals in occupied countries, whose domestic wealth was often confiscated by authorities. The key was to keep bank accounts in overseas countries secret – from tax authorities and even from friends & family.

  That said, getting money out was not always easy as exchange controls and taxes often ate up a large portion of the capital. For example, by the end of the 1930s, Jewish business owners in Germany had to accept large discounts if they wanted to sell their businesses – often at 50% of fair value. Even homes had to be sold at discounts. And if they wanted to bring money out of the country, they had to pay exorbitant foreign exchange taxes of up to 90%.

  Even overseas assets were expropriated in some cases. In the early 1940s, the UK the government became short of US Dollar for purchases of war materials. So the Chancellor of the Exchequer decreed that British citizens who owned US stocks had to report them to the Bank of England, and they were then sold to fund munitions purchases. The holders of those US stocks received a credit in pounds for the proceeds of the sales. Keeping your foreign assets secret remained key in avoiding confiscation.

  

  A private bank in Zermatt, Switzerland with underground bunkers and storage facilities for gold

  4. Domestic stocks

  The experience of WWII is that stocks generally did preserve wealth. But stocks had substantially higher returns if their home country was on the winning side. Losing the war and becoming occupied destroyed a country’s long-term return in equities.

  It wasn’t a smooth ride. The US stock market was sleepy during the war and stock prices fell to very low levels. A seat on the New York Stock Exchange cost only $17,000 in 1942, roughly 97% lower than the peak of $625,000 in 1929. And P/E ratios stayed low throughout the war. In 1942, the median P/E ratio for 600 representative stocks was only 5.3x. Only 10% of stocks traded at a P/E multiple over 10x trailing earnings.

  

  Stocks reflected the success each country’s military advances or setbacks. The British stock market bottomed right before the Battle of Britain in 1940, when it successfully staved off a German invasion. The German market peaked when German troops reached Moscow in 1941, just prior to the setback in Stalingrad. The bottom for the US market in May 1942 coincided with the Battle of Midway, when US forces dealt a decisive blow to the Japanese Navy.

  So if you own stock in a particular country, you better have conviction that it can win a war and avoid becoming occupied territory.

  War spending via budget deficits was generally positive for the domestic stock market in nominal terms. From 1932 until the 1937-38 high – a period of record deficit spending – Germany was the best stock market in the world. After a brief respite, the market continued to rally all the way to the Battle of Stalingrad. This period was characterized by booming military production and eventually soaring profits from low-cost forced labour from France, Poland and Holland. Eventually however, budget deficits led to a drain of foreign currency reserves that made it difficult to keep up elevated spending levels. Stock prices stopped rising.

  After Germany’s defeat at the Battle of Stalingrad, the Nazi government finally imposed controls on stock prices for the remainder of WWII to conceal the damage. No German could legally sell shares without first offering them to the Reichsbank, which had the option of buying them at 1941 prices in exchange for rapidly depreciating government bonds. After the war, the German stock market absolutely collapsed as you can see from the below chart.

  

  Germany’s CDAX index

  Holding stocks through the war required a nerve of steel. At market bottoms in the US, the UK and elsewhere, newspaper commentary was consistently negative and pessimistic. In every allied country, the market bottomed during major negative events, such as the Dunkirk evacuation and the fall of France to the Nazis.

  

  UK Financial Times, 30 Industrials index

  Likewise, the US stock market bottomed during the Battle of Midway, when newspaper commentary was largely negative. By the time of German surrender at Stalingrad, the US market had already risen well over 50%. So owners of US stocks had to stomach holding these stocks in the face of negative – or even catastrophic – news.

  

  US Dow Jones Index

  In Japan, newspapers and radio broadcast only good news about the course of the war. But in elite tea houses in Tokyo, information about the progress of the war was passed around to intelligent observers. Hence, the stock market correctly discounted Japan’s prospects of a victory in the war. The market fell gradually as the war progressed and collapsed completely in 1945 as Japan was defeated in a final blow. In real terms, Japan’s stock prices fell roughly 26% per year from 1940 to 1949. In nominal terms stocks did actually rise despite the spectacular defeat in 1945.

  

  Japan stock market price index (real + nominal), as estimated by Citigroup

  Stock markets in occupied territories performed poorly during WWII. Inflation was almost twice as high in the loser countries than in the countries that managed to avoid the war. The countries at risk of becoming occupied were primarily those in close proximity to Germany, Soviet Union, Italy and Japan: European countries and Southeast Asia.

  During WWII, a number of stock markets had “permanent breaks” with the market closing and never restarting again. That happened in Hungary, Czechoslovakia, Romania, Poland and Finland when they were taken over by the Soviet Union. Communism is clearly the greatest enemy of wealth preservation.

  Private wealth in Singapore and Hong Kong also suffered immensely in 1942-45 when they were taken over by Japan.

  Stock markets in countries that were occupied by the Germans also suffered, though some emerged unscathed: including Austria, Denmark and Holland. Many families in Holland were able to keep their homes, land and small enterprises during the entire occupation. If you were Jewish or an enemy of the state, your property was seized just like in Germany.

  France was treated poorly by their German occupiers. French were deemed not Aryan enough to be treated as equals. French patents, equipment and skilled workers were “temporarily” transferred to Germany, gutting French industry from intellectual property. Other French companies prospered mightily from military contracts. French inflation was 20% per year during the war and rose to 60% in the years following the war, completely destroying the economy. French stocks helped preserve wealth somewhat, but in real terms the stock market fell drastically throughout the 1940s.

  

  France SBF-250 index, adjusted for inflation

  5. Property

  Physical property is a dangerous thing to posses in wartime. It often gets stolen, bombed, destroyed or expropriated.

  In Nazi Germany, unless you were Jewish, property rights were generally respected. But in occupied countries of Eastern Europe, prime real estate were almost always expropriated. High-profile mansion and real estate were often used by the Wehrmacht or confiscated to become country estates for top German officers. In Hong Kong, the Chinese found that all their money and home on Victoria Peak were worth very little when the Japanese occupied the city in 1942.

  Hyperinflation caused a particular problem, as interest rates rose to radical levels. Landowners who had paid off their mortgages on the other hand survived, and business owners who had repaid their loans became unencumbered owners of real property.

  If you left property, getting it back after the war proved to be difficult in many cases. But if local property records remained intact, land often preserved wealth.

  UK and US real estate lost value during the war, with prices falling to very low levels. Rents in Wall Street office buildings were as low as $1/sqft. A seller of a New York hotel had difficulties finding buyers, even at one time annual earnings.

  A working farm often protected both wealth and your life, providing safety and food. There are number of anecdotes of affluent French families that shuttered their Paris houses in 1940 and retreated with their most precious possessions to family farms in the deep countryside, living in relative comfort through the war.

  

  Remote farmland in the French alps during World War II

  6. Fixed income securities

  Budget deficits and war spending spells disaster for the ownership of government bonds. Even in the loser countries, stocks tends to beat bonds, and bonds tend to beat short-term bills and demand deposits.

  Due to Japan’s deficit spending on war materials, prices rose 3,280% from 1930 to 1949. That caused a carnage in Japanese government bonds, which lost roughly 17% per year from 1940 to 1949.

  German government bonds saw their purchasing power erode roughly 21% per year in the 1940s, or a loss of 90% during the 1940s.

  In Italy, owners of fixed income securities were impoverished by the war. Government bonds lost 27% per year in real terms in the 1940s and government bills lost 30% per year.

  Other European countries did not fare much better, as you can see from the below table:

  

  Total real returns of a number of European countries

  Conclusion

  The best in-country stores of wealth are non-ostentatious property, such as remote farmland or vineyards. Just make sure the mortgages are paid off. Jewelry and gold are crucial since they can be readily exchanged for daily necessities.

  The best out-of-country stores of wealth are equities, jewelry and land. They should be stored in safe jurisdictions, protected by geography, rule of law and a strong national defense. The United States, New Zealand, the United Kingdom and Switzerland come to mind. Don’t be tempted to sell just because news go from bad to worse. And maintain a well-diversified portfolio of stocks.

  The biggest lesson of all might be to avoid fixed income instruments, including government bonds and demand deposits. Especially in countries at risk of becoming occupied by communist forces.

  Those are the key investing lessons from World War II.

  Tyler Durden
  Sun, 02/07/2021 – 20:45

• Creator Of The Bond VIX: The Coming "Monetary Hurricane" Is A White Swan
  Creator Of The Bond VIX: The Coming “Monetary Hurricane” Is A White Swan

  By Harley Bassman, creator of the MOVE index, aka the “VIX for bonds”

  

  Much is written about the Black Swan, famously described by Nassim Taleb in his 2001 book, Fooled by Randomness, and smartly summarized by Malcolm Gladwell in The New Yorker’s April 22, 2002 publication.

  As a reminder, the Black Swan is a metaphor that describes an event that comes as a surprise, has a major impact on markets or society, and is often considered painfully obvious with the benefit of hindsight.

  This begs the question of why we often ignore, to our detriment, the more commonplace White Swan. Daniel Kahneman won the 2002 Nobel Prize in economics for shining a bright light on how cognitive bias leads to poor decision making. Seemingly by nature, people overly worry about low probability events and diminish their concern for truly risky behaviors. For example, many people are terrified of being bitten by a shark or struck by lightning, but then hop into a taxi and fail to snap on their seat belt.

  As the calendar rolled into 2020, the MOVE Index was under 50 while the more widely watched VIX Equity volatility index was kissing 12. There are no reasonable statistics to comprehend such levels, they are just too low. And of course, my in-box was bulging with investors wanting me to reveal the next “surprise” that would shock the market out of its doldrums. I could only reply that if I knew, it would (by definition) not be a surprise.

  

  Notwithstanding that Bill Gates offered a TED Talk in 2014 on the risk of a Global pandemic, and that a dozen such science fiction movies were available on Netflix, indeed COVID-19 was a Black Swan surprise. What is no longer a surprise is the Government’s proposed Monetary and Fiscal solutions to the havoc that COVID has wreaked.

  

  At this stage, discussing the merits of the Fed’s policies is pointless; it’s an activity best held in states where weed is legal. As pictured on the prior page, there seems to be no level of balance sheet expansion that is too high.

  Not only is the FED employing QE (Quantitative Easing) to dampen an interest rate increase that would be extremely bothersome to our vastly over-leveraged economy, but they have signaled they will fund the expansion of Fiscal spending.

  

  Again, a debate about whether this is good public policy is moot; a huge Fiscal impulse is coming, and it will be funded mostly by debt issued to the FED.

  Economic purists will insist that this is not “money printing” since the US Treasury is independently selling bonds into the market via public auctions. Many of these bonds are purchased by Wall Street ‘primary dealers’ (sometimes referred to as Vampire Squids) who soon sell them to the FED for a small profit. Of course, this is “money printing” in the same way that one “borrows” beer at a Super Bowl party.

  As a reminder, notwithstanding COVID, the financial road we are traveling has been paved with good intentions, especially by the FED; the pity is the expected result did not occur.

  The GFC in 2008/09 revealed that the US had too much debt, both public as well as private. The FED recognized that there are only two ways out of a debt crisis – either default or inflate, with the caveat that inflation is simply a slow-motion default.

  

  Since the market would not allow the FED to reduce its balance sheet via asset sales (or even the slow bleed of letting bonds  mature), the alternate solution was to create inflation as a way to reduce the value of debt. This policy was reinforced by the FED’s most recent communications where they indicated they would not mind inflation rising above their 2.0% target (for a short time).

  The original plan was for the FED’s largess to inflate middle class wages; instead, the inflation occurred in assets, most notably in Global Equities.

  

  When one hears hoof beats, look for horses not zebras. There is no reason to ruminate over exotic possibilities when the problems we face are quite clear. Once again, ignore the merits of the public policy response – what is important is that there is wide support from both the Democrats and Republicans to offer significant Fiscal relief supported by massive Monetary expansion.

  Will this be inflationary – Yes; but it is unclear how soon.
  I made the case in my December 2, 2020 commentary, ”The Wages of Fear”, that demographics will set ablaze the dry kindling of printed money sometime between 2023 to 2025; and nothing has occurred to change that prediction. What is clear is that a financial bubble is being inflated, and there is risk on both sides of the distribution. Ordinarily the bloviating pundits advise one to sell assets, or perhaps execute some sort of hedge such as buying puts or selling covered calls. They are looking in the wrong direction.

  While I am not a stomping bull, the approaching monetary hurricane could well make the “surprise” a further rally in equities. Printed money should elevate stocks; either via a continued flow into assets, or into the pockets of consumers who will spend it and thus increase corporate profits. (Yes, higher taxes could be an offset, but let’s save that for another Commentary.)
  As noted, inflation is an eventual certainty, so one should own real assets; and over the longest run stocks will hold their real value. Notwithstanding the Robinhood day traders, stock equity is an ownership right in a real company. Weimar Germany is the nightmare scenario for inflation; but contrary to expectations, stockholders were protected. While the German Papiermark vs. USD exchange rate exploded (4.2 Trillion per USD), the German Stock Index, currency adjusted into USD, held its value. As such, when faced with nominal inflation – Do not sell call options.

   

  

  Below is the “skew” of Implied Volatility (IVol) for options that expire in one-year for SPY – S&P 500 ETF, and before Game Stop, one of the market’s most actively traded securities. The path of this line details the IVol used in the pricing models for various strikes. The 100% dot is the current market level of 375 (or 3750 on the S&P 500 Index); similarly, 80% would be a strike of 300 while 120% would be a strike of 450.

  The IVol for an at-the-money option of 23.0% is not unreasonable since SPY realized such a volatility as late as last September when the market stabilized near 350. Similarly, an IVol of 31% is not crazy for a strike of 300 since SPY had such a volatility when it was near that level last June.

  What is anomalous is that the 450 strike sports an IVol of only 16.9%, a level not too far from the level realized from 2018 to 2019 – before COVID.

  

  The blue line profiles the skew for options that expire in two years with Ivols of 28.50%, 23.0%, and 18.75% respectively for similar strike levels.

  

   

  Consider the results of the table above for two-year expiry options on SPY; is the risk of reaching the COVID lows (-36%) the same as a 20% rally by 2023 ? (Call px = Put px) I will not quibble with the put price as it offers “earthquake” insurance; but within the context of current events, the call price is too cheap.

  By many measures the S&P 500 is expensive; in fact, the loudest pundits cite that we are in a “bubble”. I will submit those indicators are not false, but they ignore that the Fed’s lips are tightly wrapped around a larger financial balloon. The chart below maps the relative value of US equities to real interest rates; this is what supports my view that stocks are “fair”. However, if $1.9 Trillion of fiscal stimulus is funded by the Fed holding real interest rates below zero, the surprise will be north. As such, I want to be long the distant strike call options; not because I know I am right, but rather it is so inexpensive to be wrong.

  

  Tyler Durden
  Sun, 02/07/2021 – 20:33

• America's Top Union Boss Nervously Slams Biden Over Keystone XL Decision
  America’s Top Union Boss Nervously Slams Biden Over Keystone XL Decision

  America’s top union boss isn’t happy that President Biden canceled the Keystone XL pipeline his first day in office, and doesn’t think promises of ‘retraining’ programs are much consolation for union workers who will find themselves unemployed.

  

  “If you destroy 100 jobs in Greene County, Pennsylvania, where I grew up, and you create 100 jobs in California, it doesn’t do those 100 families much good,” said AFL-CIO president Richard Trumka in comments which aired Sunday evening on “Axios on HBO.”

  Axios notes that there are significant tensions between environmentalists, the Biden administration team addressing climate change, and segments of the labor movement. By canceling the Keystone XL project, approximately 1,000 existing union jobs and 10,000 protected construction jobs are estimated to have been lost.

  Trumka, who fully supported Biden’s run for president, told Axios’ Jonathan Swan that he thought Biden’s decision to cancel the pipeline project his first day in office, without pairing it with an initiative that would create as many (or more) jobs as would be lost, was a bad move.

  “If you’re looking at a pipeline and you’re saying we’re going to put it down, now what are you going to do to create the same good-paying jobs in that area?” asked Trumka, who “appeared to be uneasy – pausing for a few seconds and ducking the question — when asked whether he was comfortable with Biden’s plan to ban fracking on federal lands,” according to the report.

  AFL-CIO president @RichardTrumka to @jonathanvswan on Biden canceling the Keystone XL pipeline: “I wish he hadn’t done that on the first day…It did and will cost us jobs…I wish he had paired that more carefully [with creating jobs].” #AxiosOnHBO pic.twitter.com/3Ba6F6g8GT

  — Axios (@axios) February 7, 2021

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

  More via Axios:

  The bottom line: Trumka, who started his career as a coal miner, signaled he will have no patience for promises of retraining programs as consolation for union workers forced from their jobs.

  • “You know, when they laid off at the mines back in Pennsylvania, they told us they were going to train us to be computer programmers.”
  • “And I said, ‘Where are the computer programmer jobs at?’ ‘Uh, they’re in, uh, Oklahoma and they’re in Vegas and they’re here.’ And I said, ‘So, in other words, what we’re going to be is unemployed miners and unemployed computer programmers as well.'”

  People “love where they live and they love the people in that area,” Trumka said. “And to them, that’s home. And that’s their culture.”

  • “I think what doesn’t get understood quite enough in the country, particularly in D.C. politics, is that that culture is very, very important to the people who live there.”

  Meanwhile, Biden’s climate ‘guy’ – John Kerry, suggested that unemployed pipeline workers can just ‘make solar panels.’

  John Kerry—who flies in private jets, owned a 76-foot yacht and several mansions—has the carbon footprint of a small nation.

  Yet he tells energy workers to “make solar panels” when the Biden administration kills their jobs. pic.twitter.com/QhK2FVykxU

  — Tom Cotton (@TomCottonAR) January 27, 2021

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

  Tyler Durden
  Sun, 02/07/2021 – 20:10

• "Mind-Boggling Liquidity": Nobody Is Paying Attention To The $1.1 Trillion Flood About To Hit Markets
  “Mind-Boggling Liquidity”: Nobody Is Paying Attention To The $1.1 Trillion Flood About To Hit Markets

  Amid the ongoing Reddit short squeeze drama which had traders glued to their trading terminals for much of the past two weeks, quite a few may have missed the biggest news of the past week which was the publication of the Treasury’s latest Borrowing forecast, according to which the US expects to borrow just $275BN in the current quarter, down a whopping 75%, or $853 billion, from its November 2020 projection of $1.127 trillion.

  

  The reason for this plunge in funding needs is because the Treasury now expects that it simply won’t need to borrow as much debt as the end-of-March cash balance held in the Treasury General Account (TGA, which is simply the Treasury’s cash balance held at the Fed) would plunge to just $800 billion, down a record $929BN from $1.729 trillion at Dec 31, 2020 (as an aside, the reason why the cash was so high as year end is because the Treasury never got around to actually disbursing the latest stimulus package in December, and it’s also why as the Treasury said “the decrease in privately-held net marketable borrowing is primarily driven by a higher beginning-of-January cash balance as a result of lower-than-assumed expenditures.”)

  In other words, had Trump used up roughly $1 trillion in cash the Treasury had previously budgeted for spending on fiscal stimulus, there would be no surprises today, and instead of the cash balance dropping to $800BN in this quarter, it would have done so last quarter (we discussed this last November in “The 2021 Liquidity Supernova: Step Aside Fed – US Treasury Will Unleash $1.3 Trillion In Liquidity“). Instead, the Treasury now expects the decline in the cash balance this quarter – which is being spent to fund last December’s fiscal stimulus – to be the main driver of funding needs.

  

  It doesn’t end there, because one quarter later, the Treasury expects to borrow just $95BN  – the lowest in two years quarters – and finish the June quarter with a cash balance of only $500BN, a reduction of $300BN for the quarter, the lowest in six quarters and less than 30% of the average cash balance at the end of the latest three quarters ($1.74BN).

  Looking beyond that, we have to go back to an analysis we put together back in November, which cited calculations from Morgan Stanley, according to which unless the debt ceiling deadline – which this year falls on Aug 1, 2021 – is extended well in advance, starting on this date, the US Treasury will not be able to issue any additional debt above and beyond what it needs to cover existing debt obligations. However, what few may be aware of, is that there is a clause written into the law that prohibits the TGA from rising above levels prior to the debt ceiling deadline, which was in 2019.

  This means that based on the 2019 debt ceiling, the Treasury cash will need to fall even more, down to just $200 billion by August 1, and as the chart from MS below shows, depending on the upcoming political fight over the debt ceiling, it could end up being quite a mess.

  

  Said otherwise, the market is about to see a flood of $800BN in extra liquidity over the next 6 weeks, and a total of $1.1 trillion in the next 10 weeks, and then potentially another $300 billion in the subsequent two months. With the TGA cash currently at just under $1.6 trillion, it means that the US Treasury may unlock as much as $1.4 trillion in liquidity over the next 6 months, nearly double the liquidity coming from the Fed over the same time period which will be $720 billion ($120BN x 6 months)!

  This, not too put it lightly, is a huge deal with major market implications (and is why three months ago we said to “buy everything ahead of an unprecedented dollar devaluation orgy” simply based on this analysis).

  First, recall that one of the early (and completely false) reasons cited for the Sept 2019 repo crash, was the modest spike in Treasury cash balances around that time, which also resulted in substantial reserve drain among banks (mostly JPMorgan) which were desperate for more QE. As a result, we almost immediately got “NOT QE” (which, of course, was absolutely QE) and hundreds of billions of reserves were injected into the system by the Fed but not before markets had to tumble to spur the Federal Reserve into acting.

  Well, what is happening now is just the opposite and many, many times bigger, as almost one trillion reserves are about to be injected into the system as cash is drained from the Treasury’s account at the Fed. As we said on Monday, “as Treasury cash balances plunge, banks will see their reserve levels soar by roughly $900 billion this quarter, a move that will lead to significant risk asset upside if previous instances of reserves growth are any indication.”

  Second, there are major implications for the rates market where the recent flood of bill issuance is set to hit a brick wall: as we said on MOnday, the plunge in short-term debt (Bill) issuance – since there will no longer be an urgent need to keep cash balances in the $1+ trillion range – will compress short-term spreads (effective FF through 3M) to zero – or even negative – as there is suddenly a flood of liquidity which could prompt the Fed to engage the fixed-rate borrowing facility or even nudging the IOER higher. Indeed, on Friday we saw just this move as the 2Y TSY dropped to the lowest yield on record.

  

  Those looking for more details can read our November preview of this event (“The 2021 Liquidity Supernova: Step Aside Fed – US Treasury Will Unleash $1.3 Trillion In Liquidity“), or read the below explanation from Larry McDonald, author of The Bear Traps Report, who last week put together an exhaustive summary of the implications of the TGA plunge.

  Again What is the TGA? The US Treasury’s General Account

  The TGA is the mechanism through which Treasury makes payments. It’s the checking account through which the government makes all its payments. This checking account is located at the Federal Reserve Bank of New York. It’s where tax payments are deposited and where funds from Treasury debt auctions are collected. So when the TGA changes, that affects deposits at the Federal Reserve. Ultimately, monetary policy, and Quantitative Easing, is conducted through the TGA. It’s important. Of course, last year the TGA grew. It moved up from its usual range of $300 million/$500 million to, since May, well over $1 trillion. The thought had been that $1 trillion would be released into the economy to stimulate it prior to the November election. Didn’t happen. Congress stalled.

  Go Big or Go Home?

  Enter “Go Big or Go Home” Yellen. What’s she gonna do now? There will be another Covid relief bill of some kind. She’ll be the one cutting the checks through the TGA. This will release money out of the TGA and that means there will be a lot more money in the system. Yellen has $1 trillion burning a hole through her pocket. Additionally, QE is pumping money in at $120 billion clips a month. The combo of a near $1 trillion check and $120 billion monthly QE is the monetary equivalent of eating a banana split after downing an Italian hero sandwich. The market will be stuffed with reserves.

  The money will in part be put into the short end of the curve (already anticipated as we can see in super low LIBOR recently, and low T-Bill yields etc.). Some of the tidal wave of money will find its way into stocks and commodities. Some will find its way to higher prices for goods and services. This is the mirror opposite of 2018/2019 when traders fretted that treasury issuance would overwhelm their desks. This led to higher rates and a higher dollar… The 2019 events drama reached its September 2019 climax when the Fed was forced to introduce QE light. What an embarrassment, after pounding the table for 2 years on the wonders of committed balance sheet REDUCTION, up to $50B a month in Q1 2019, they reversed 2x. First in January 2019 by stopping the expansion, THEN again in September 2019 by restarting QE. Reflation assets (EM, global cyclicals ripped higher from Sept to the start of Covid risk in Feb 2020). Both times the beast inside the market reversed the academics at the Fed. Traders > educators in this case.

  So now there will be mind-boggling liquidity, no vig in the front end, and a weaker dollar to boot. Nothing is guaranteed when it comes to fiat currencies, but fiat currencies are in a race to the bottom. Given the upcoming drawdown of the $1 trillion in the TGA , it’s a race the US is likely to win.

  Recap with more Complexity, Digging Deeper

  One of the questions hanging over asset markets going into 2021 was what would happen to the TGA account. The TGA is the Treasury’s General Account which is how the Treasury makes payments. As we saw last year, the TGA was built up to levels much higher than they traditionally get to. In the past, the level of the TGA has traditionally been between $300-500 billion. Currently, and pretty much since May of last year, the TGA has been over $1 trillion, which is well above its historical norm.

  Going back to Q3 of 2020 there was a lot of speculation that the previous administration would use the massive levels of TGA to get more stimulus into the economy before the elections in November. However, that never really transpired and more covid relief was not passed by congress until after the election.

  This setup the question for Secretary Yellen in terms of how she would manage the TGA, especially into the likelihood of another covid relief bill. The market has gotten its answer as Yellen and the Treasury plan to draw down the TGA balance back to more historical levels. The consequences of this are simple, a lot more reserves in the system. The combination of Fed QE running at $120 billion a month and around a trillion-dollar drawdown in the TGA level means that the levels of reserves in the system will be massive.

  The combination of less short term issuance and massive QE will continue to put pressure on front end yields. This has been seen in very low LIBOR settings, low T-bill yields, and a lower setting in the effective fed funds rate. This pressure on the front end will continue to come especially in light of less front end issuance as the Treasury draws down their TGA balance.

  The market in the first quarter of this year is basically setting up for the inverse of 2018/2019, where funding markets have begun to get stretched. The story in 2018/19 was that Treasury issuance would overwhelm the market and lead to this crowding out of assets as dealers had to move funding to take down treasuries. Now, the problem is flipped. There are so many reserves in the system already from the Fed’s QE, and now it is going to get another increase via the TGA. So if 2018/19 was the story of issuance crowding out the market and putting pressure on funding markets which led to a higher dollar, this rendition could lead to the opposite.

  With that said, we think the correlation between net issuance and asset prices is a bit overstated. Yes, there will be a ton of liquidity on the back of these moves from Treasury, but in terms of marginal drivers, it will matter most in funding markets and the front end of the treasury curve. The other part of this is, this UST funding announcement doesn’t include the impact of whatever $1.9tln will come from the White House and congress.

  Overall: the story is that reserves are everywhere and more are coming. In theory, over the near term, we are setting up for an inverse of 2018/19, which means front-end yields, funding markets etc. will be flushed and liquidity in the system will be at very high levels.

  So while the bullish case is clearly there – after all a $1.1 trillion reserve injection all but assures higher risk prices, the only question is by how much, some – such as JPM’s Nick Panigirtzoglou – have taken on a more hedged position, even though even the JPM admits that a $800BN spike in reserves in just two months would be a major market event…

  • The US Treasury signaled this week a strong intention to reduce its Treasury General Account (TGA) balance at the Fed, from its current level of close to $1.6tr to $500bn by mid-2021.
  • Such a sharp decline would mechanically bolster the liquidity in the US banking system, i.e. the amount of reserves, by $1.1tr by mid year

  … noting that “a halving in the TGA in just under two months would be a significant decline, in particular given the slow conversion of PPP loans to grants thus far with just over $100bn converted between October and mid-January.”

  Yet within this broader tidal wave in reserves, Panigirtzoglou believes that the immediate impact will be relatively modest, and explains why below, first focusing on his view of narrow vs broad liquidity “plumbing” dynamics in the market (which differ substantially from those of repo god Zoltan Pozsar so take them with a giant grain of salt)…

  What are the implications for liquidity from a prospective large reduction in the TGA balance over the coming months? We argued before that liquidity should be split into two different components: 1) narrow or banking sector liquidity, which is created by the injection of excess reserves into the banking system; and 2) broader liquidity or money supply, which is the amount of cash or deposits held by the non-bank sectors of the economy such as households, non-financial corporations and financial intermediaries such as asset managers, pension funds and insurance companies. This broad liquidity is in turn primarily a function of QE related purchases by central banks and bank lending to the real economy by commercial banks. In general, these two components of liquidity are interrelated but are not necessarily mechanically linked and are thus distinct. For example, QE bond purchases, by injecting reserves into the banking system, increase narrow liquidity, but they do not necessarily increase broad money supply. Bond purchases can result in an increase in money supply either directly, e.g. if the central bank buys bonds from a non-bank entity such as a pension fund, this automatically expands the assets (reserves) and liabilities (deposits) of the banking system; or indirectly, when central banks’ quantitative measures induce higher bank lending in the economy.

  … and then expands this analytics framework to how $1.1 trillion in reserves will impact assets:

  A sharp decline in the TGA balance and the resulted $1.1tr increase in the stock of reserves in the US banking system would bolster banking sector liquidity i.e. narrow liquidity but will have no direct implications for broad liquidity, i.e. the cash balances of non-bank investors as captured by money supply. This is because a decline in the TGA balance would have no overall impact on the size of commercial bank’s balance sheet as it would effectively replace government debt with reserves in commercial bank’s asset side and TGA balances with reserves in the Fed’s liability side. These reserves or narrow liquidity reflect the amount of reserves commercial banks have with central banks in excess of what they would need to meet usual liquidity needs. Given that the banking system cannot get rid of reserves in aggregate, these zero yielding reserves become the “hot potato” that banks try to pass to other each until the relative pricing across money market instruments is adjusted enough to remove the incentive for banks to get rid of these reserves. In other words, narrow liquidity tends to reverberate within the money market space and suppress yields at the front end of the yield curve with little implication for the longer end of the yield curve or other asset classes such as equities.

  Needless to say, we completely disagree here and merely bring up the historical record: the Sept 2019 repo crash first spiked a violent market correction and only then did the Fed conceded to inject more liquidity. It stands to reason that the equity response now will be the opposite as we are now facing a mirror image of the liquidity picture in 2019. In any case, going back to the JPM quant:

  But even with the money market space, given the US banking system is already flooded with $3.2tr of reserves, well above a neutral level which we envisage at below $2tr, an additional $1.1tr of reserves would not make much difference in the current conjuncture. Indeed, after the sharp increase in reserves during 1H20, volatility in Fed funds – IOER spreads and SOFR – IOER spreads have already significantly reduced (Figure 2). The additional injection is likely to put some downward pressure on these rates to grind toward the zero lower bound of the Feds funds target range, supporting somewhat demand for shorter-dated Treasuries as banks seek some yield and duration. However, our projections for the global bond supply-demand balance in 2021 already incorporated only a relatively modest deterioration in G4 commercial bank demand from last year’s record levels.

  

  Summarizing JPM’s view, we find it surprisingly restrained in its optimistic assessment…

  In all, we see little impact from a prospective TGA balance reduction on broad liquidity and thus on other asset classes outside money markets or the front end of the UST yield curve. And the actual path of the TGA decline may differ from the Treasury’s forecasts not least as they do not potential additional fiscal stimulus into the projection.

  … then again it comes from the same JPM analyst who has been desperately trying to talk down bitcoin for the past 4 months, most recently just two weeks ago. Well, with bitcoin hitting $41,000 this morning and all other cryptos at all time highs, not only have those who listened to Panigirtzoglou worse off, but maybe Nick has become the “big JPM fade”. In any case, we are confident that it is only a matter of time before his Croatian colleague, the permabullish Marko Kolanovic takes the other side of the euphoria trade from Panigirtzoglou… as would we by the way.

  In any case, with $1.1 trillion about to hit the market, perhaps now is not the time for nuance and instead a more shotgun approach is appropriate, which is why we like Larry McDonald’s take as it cuts to the chase, and more importantly, is correct:

  The combo of a near $1 trillion check and $120 billion monthly QE is the monetary equivalent of eating a banana split after downing an Italian hero sandwich. The market will be stuffed with reserves.

  Of this we are certain. What does remain an open question is at what S&P level – 4,000? 4,500? moar? – will the Fed finally realize what it and the Treasury have done, and intervene by warning markets that it is about to pull its pedal off the gas, especially with a chorus of dovish, establishment progressive economists such as Larry Summers and Olivier Blanchard now warning that a $1.9 trillion stimulus could overheat the economy (yes, democrats warning of such a thing as too much stimulus – now we’ve seen it all). In fact, the next big risk is increasingly shaping up as a hawkish reversal by the Fed some time around July/August, when the Treasury cash balance tumbles to $200BN or so and when the S&P is in the the low to mid-4000s…

  Tyler Durden
  Sun, 02/07/2021 – 19:55

• Washington Post Says COVID Lab Accident "Plausible" And "Must Be Investigated"
  Washington Post Says COVID Lab Accident “Plausible” And “Must Be Investigated”

  Exactly one year ago today, Zero Hedge was ‘enjoying’ our suspension by Twitter after we pointed out that scientists from the Wuhan Institute of Virology had been experimenting on bat coronaviruses, and that investigators trying to determine the origins of the COVID-19 outbreak might want to have a word with them.

  We later reported that the same scientists had been using ‘gain-of-function‘ research to make bat coronaviruses more transmissible to human beings – for which they were roundly criticized in 2015.

  

  Thus, it seemed only logical that the possibility of a lab escape at ‘ground zero’ was at least non-zero, and should be investigated alongside the ‘natural origin’ theory which posits that the virus jumped from bats to an intermediary species, which then infected a cluster of people at a Wuhan wet market. According to a study published in The Lancet, 66% of patients admitted to Wuhan hospitals (27 out of 41) as of January 2nd, 2020 had been exposed to the Huanan seafood market.

  

  Since then, the lab leak hypothesis has gained traction – and has been elevated to let’s at least investigate status by legitimate bodies.

  Three weeks ago, the US State Department announced that while they haven’t determined whether the COVID-19 pandemic “began through contact with infected animals or was the result of an accident at a laboratory in Wuhan, China,” the US 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.“

  And in late January, A World Health Organization (WHO) adviser who previously worked under President Clinton and then-Senator Joe Biden said that COVID-19 was most likely an accidental lab leak.

  Which brings us to the Washington Post, whose editorial board on Sunday suggested that the lab leak hypothesis was “plausible” and “must be investigated.”

  Many scientists have speculated that the virus leaped from animals, such as bats, to humans, perhaps with an intermediate stop in another animal. This kind of zoonotic spillover has occurred before, such as in the West Africa Ebola outbreak in 2014.

  But there is another pathway, also plausible, that must be investigated. That is the possibility of a laboratory accident or leak. It could have involved a virus that was improperly disposed of or perhaps infected a laboratory worker who then passed it to others.

  * * *

  Update (0810ET): After publication, we learn that Chinese Ambassador, Cui Tianki, has called for the WHO to investigate the United States to see whether the pandemic may have originated here.

  The Chinese Ambassador @AmbCuiTiankai just called for an investigation in the United States by the WHO into whether the coronavirus outbreak originated here. Horrendous. @cnn

  — Josh Rogin (@joshrogin) February 7, 2021

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  * * *

  The Post then notes that “Published papers show that some of these institutions have been very active in coronavirus research. The most active is the Wuhan Institute of Virology, where Shi Zhengli leads a research team that has extensively studied and experimented on bat coronaviruses that are very similar to the one that ignited the global pandemic.”

  Also noted is Shi’s response to the virus – which was to ‘check her laboratory records to see whether there had been any mishandling of experimental materials,’ and that the genetic sequence of COVID-19 did not match a similar coronavirus her team had sampled in caves in China, which “really took a load off my mind,” she told Scientific American. “I had not slept a wink for days,” Shi claimed.

  In reality, the cave-culled virus, RaTG13, was reportedly 96.2% identical to SARS-CoV-2, however in September, researchers in India concluded that “the RaTG13 genome had serious issues and all data related to it required a full review.”

  

  The Post remains skeptical of Shi’s claims.

  But that must not be the end of the story. China actively covered up the early stages of the pandemic, concealed the transmissibility of the virus from its own people and the world, and punished Wuhan doctors who expressed worry about it in late December 2019. President Xi Jinping did not warn the public in China or abroad until mid-January.

  Since then, Chinese officials and scientists have advanced a host of dubious theories to suggest the origin of the virus was beyond China’s borders: perhaps brought to China by contaminated packaging of frozen food from abroad or from the U.S. military biodefense laboratory at Fort Detrick, Md., or from mink farms. The disinformation only heightens suspicions that China is trying to distract from or conceal something. –Washington Post

  And while we recommend (we know…) reading the rest of the Post‘s Editorial Board here – where they discuss ‘gain of function’ research, a mysterious database, and RaTG13, among other things – prepare yourselves for some serious damage control by the World Health Organization (WHO), who was finally allowed into Wuhan in search of evidence supporting the natural origins theory.

  The field trip prominently included Peter Daszak – president of EcoHealth Alliance, a non-profit group that has received millions of dollars of U.S. taxpayer funding to genetically manipulate coronaviruses with scientists at the Wuhan Institute of Virology. Of note, Daszak drafted a February, 2020 statement in The Lancet on behalf of 27 prominent public health scientists which condemned “conspiracy theories suggesting that COVID-19 does not have a natural origin.”

  So, the not exactly unbiased Daszak and his team are preparing to release ‘important clues’ found during their investigation, according to Bloomberg. Daszak reports that the main findings will likely be released before Feb. 10, and that the Hunan fresh produce market in central Wuhan was “especially useful” –  which was sanitized after its closure last January. That didn’t mean there were no clues, apparently.

  Investigators looked further and found “important clues” about the market’s role, Daszak said, declining to elaborate.

  “Right now, we’re trying to tease everything together,” he said. “We’ve looked at these three strands separately. Now we’re going to bring it together and see what everything tells us.”

  While the food market was shuttered and cleaned almost immediately after cases were recognized, “it’s still pretty intact,” Daszak said. “People left in a hurry and they left equipment, they left utensils, they left evidence of what was going on, and that’s what we looked at.” –Bloomberg

  Whatever the WHO team comes up with should, at minimum, make for some great reading.

  Tyler Durden
  Sun, 02/07/2021 – 19:55

• Fossil Fuels Aren't Going Anywhere
  Fossil Fuels Aren’t Going Anywhere

  Authored by Irina Slav via OilPrice.com,

  “There is no scenario where hydrocarbons disappear,” the chief executive of Baker Hughes, Lorenzo Simonelli, said during his keynote speech at this year’s annual meeting in the company. Like other executives from the industry, Simonelli acknowledged and welcomed the energy transition, but he noted that a 100-percent renewable energy scenario was simply not possible.

  

  There is plenty of evidence this is indeed the case, despite the hopes and ambitions of many environmental advocates.

  These hopes and ambitions imagine a world where human activity is powered from electricity only, and this electricity in turn is being generated using only renewable energy sources such as solar, wind, and hydropower.

  Such a world, however, is unrealistic.

  Take Germany, for example. The country, which is among the EU members with the most renewable energy capacity, has not produced a single Watt of solar energy since the start of this year. The reason: it’s winter. It is producing solid amounts of wind power, that’s for sure, but it is also generating power from the most despised fossil fuel of all: coal.

  At the time of writing its carbon intensity was 264 grams of CO2 equivalent per kWh. That was comparable to the carbon intensity of another poster girl for renewables in Europe, Denmark, which is currently getting most of its energy from wind power.

  So, it seems building renewable capacity in itself is not a silver bullet solution to the emissions problem. In fact, if you build it too quickly without adding substantial storage capacity, it could backfire. This was most recently evidenced by a narrow miss of a major blackout in Europe prompted by a minor problem at a Croatian substation that rippled through the continent, highlighting the importance of maintaining the grid at a constant frequency—something renewables cannot do because of their intermittent generation.

  Even Denmark has thermal power plants to secure the baseload any grid needs to function properly and eliminate or at least reduce the risk of blackouts.

  But back to Simonelli’s prediction about the guaranteed future of oil and gas. This future won’t be like the past. The world is firmly on course to change the way it generates and uses energy. Both Simonelli and the other keynote speaker at Baker Hughes’ AM2021, IHS Markit’s Daniel Yergin, recognized that. It is simply that this change will not be limited to a build-up of solar- and wind-generating capacity.

  Energy efficiency, for one, will be a big part of the transition.

  Efficiency has been pushed out of the spotlight recently, replaced by things like green hydrogen and the constant emission-reduction narrative, but it has not gone away. According to Baker Huges’ Simonelli, efficiency alone could help meet as much as 27 percent of the Paris Agreement climate change targets. On a global scale, this is a massive amount of emissions cut, at a rate of half a gigaton annually.

  In addition to efficiency, there are all the commitments Big Oil is making under pressure from investors, regulators, and activists. Every supermajor now has a renewable energy transition plan, some more ambitious than others. All the plans, however, involve pouring billions of dollars into what is essentially a move away from these companies’ core business of extracting oil and gas from the ground, at a carbon and methane emission cost, of course.

  This shift to renewables might raise some doubts about whether oil and gas will really remain indispensable.  However, the facts suggest that they probably will. There are still millions of people around the world without access to any electricity, and going renewable straight out of the gate for many of these people is simply not an option, for a number of reasons including cost—yes, even though solar panel costs are dropping like WTI in April 2020—and logistics problems. Going green only appears cheaper than sticking with fossil fuels. But it isn’t.

  As IHS Markit’s Yergin pointed out in his speech, emerging economies will continue to rely heavily on fossil fuels, despite other regions’ efforts to reduce their own reliance on them. Even if solar panels become free at some point, it is not just panels that go into the making of a solar farm: it also needs components such as inverters and a link to the grid, plus storage, for best results. This alone is enough to guarantee the long-term future of oil and especially gas as an indispensable part of the world’s energy mix.

  So, if oil and gas are not going anywhere, can we at least make them a bit cleaner? We certainly can, according to both Simonelli and Yergin, as well as to many other industry experts. Carbon capture is the second element of oil and gas’ long game, besides efficiency. True, carbon capture technology is still quite costly but, as in solar and wind, costs are on their way down. From a lot of talk and little action, carbon capture is on its way to becoming a feature of the energy transition. Why? Because “the numbers don’t work without it,” as Daniel Yergen said.

  Tyler Durden
  Sun, 02/07/2021 – 19:30

• National Guard And Razor Wire Everywhere: DC Gets Dystopian As Impeachment Trial Kicks Off
  National Guard And Razor Wire Everywhere: DC Gets Dystopian As Impeachment Trial Kicks Off

  Next week, the country will gather round to watch Democrats argue why former President Trump should be convicted for inciting the Jan. 6 ‘Capitol Riot,’ after the House impeached him on one count of “incitement of insurrection.”

  To prepare for the trial, DC Homeland Security and Emergency Management chief, Christopher Rodriguez, is maintaining a dystopian backdrop of armed National Guard troops and razor wire-topped security fences.

  “We must demonstrate an overt security presence in D.C., at least for now,” Rodriguez said at a House Homeland Security Committee hearing last week. “We believe that this posture is essential to ensuring that the Metro Police Department can deploy resources to all parts of the city during an emergency.”

  

  America’s rallying cry? pic.twitter.com/aeSm2g2kSf

  — Armstrong Williams (@Arightside) February 6, 2021

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  Walkways and green spaces around the Capitol and adjacent congressional office buildings that are normally plied by tourists and joggers have been off limits since the Jan. 6 riot.

  Instead, there are rifle-toting National Guard troops — part of a contingent of several thousand assigned to assist with security — stationed with Capitol police at a checkpoints for entry to the grounds. In addition there are 500 members of the District of Columbia National Guard on standby as a quick reaction force.

  “It’s surreal,” said Representative Andy Kim, a New Jersey Democrat. “I’ve worked in a lot of tough areas before, it is very intense to see this level of structure with such a massive perimeter put forward. –Bloomberg

  Approximately 7,000 National Guard personnel will remain in DC – left behind after more than 20,000 Guradsmen were deployed to Joe Biden’s inauguration to protect against a ‘right-wing extremist threat’ that never materialized. By mid-march, the number of Guard will be reduced to 5,000.

  Live from our Nation’s Capital. Why is this show of force increasing? pic.twitter.com/RevCmjUC7q

  — Armstrong Williams (@Arightside) January 29, 2021

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  Democratic impeachment managers are expected to argue that Trump’s election fraud claims inspired a cadre of supporters to ‘storm the capitol’ (they walked through an open door), and that the ‘insurrectionists’ led by ‘QAnon Shaman’ were attempting to gain control of the United States (only to take selfies with Capitol Police and walk out un-arrested). In total, five people died during the incident – including a protester who was shot dead by Capitol Police for trying to breach an interior barricade.

  Capitol police open doors for the protestors. They stand aside and invite them inside. pic.twitter.com/OnSd3KGzz5

  — Christina Bobb (@christina_bobb) January 8, 2021

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  More footage from the Jan. 6 ‘insurrection’:

  “Any chance I could get you guys to leave?”

   

  “This is like, the sacredest place.“

  “Insurrection” pic.twitter.com/NbJRAVbcBp

  — Jack Posobiec 🇺🇸 (@JackPosobiec) January 17, 2021

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  Trump’s impeachment defense team, meanwhile, is expected to show a montage of prominent Democratic lawmakers calling for insurrection against the Trump administration, and what we assume will include footage of 2020 anti-police riots.

  The most important video of 2020
  pic.twitter.com/3nMNlxl5Q8

  — ELIJAH SCHAFFER ON GAB (@ElijahSchaffer) August 31, 2020

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  Defense attorneys will undoubtedly mention that Trump told his supporters to ‘stay peaceful‘ and then ‘go home now,’ because ‘we have to have peace.‘

  All Democrats plus 17 Republican Senators would be required to cross the two-thirds threshold to convict Trump. As Bloomberg notes, however, “A test vote in the Senate last month indicated that a few GOP members are willing to break with the former president, but far fewer than the level needed to bar him from serving in public office again.”

  Perhaps an encore performance by Rep. Alexandria Ocasio-Cortez recounting her near death experience will convince at least 17 Republicans to break ranks?

  AOC Claims She Was Killed In The Capitol Riots And Is Now A Ghosthttps://t.co/mTmKkRsrYP

  — The Babylon Bee (@TheBabylonBee) February 5, 2021

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  Tyler Durden
  Sun, 02/07/2021 – 19:05

• State Legislatures Eye Sound Money Reforms
  State Legislatures Eye Sound Money Reforms

  Submitted by Jp Cortez,

  More state lawmakers than ever are introducing sound money legislation in the opening days of the 2021 legislative session.

  

  Several states will consider measures to remove sales or general excise taxes from the purchases of gold, silver, and other precious metals.

  Many other states will weigh bills to eliminate income taxes on gold and silver.

  Still others will decide whether state funds can be held in physical gold and silver — and may even consider establishing a state-chartered bullion depository.

  With debt-funded spending and money-printing in our nation’s capital at breakneck speed, will states see the wisdom of enacting measures to counteract these policies of currency debasement?

  Here’s a rundown on newly introduced state legislation:

  In Mississippi, House Bill 375, sponsored by Representative Henry Zuber and Representative Brady Williamson, and House Bill 978, sponsored by Representative Joel Bomgar, include language to exempt precious metals from sales taxes.

  Two of Mississippi’s neighbors, Alabama and Louisiana, have already exempted precious metals from sales taxes – so the Magnolia State will continue to be at a competitive disadvantage if it maintains its current policy of taxing real money.

  South Carolina’s Representative Stewart Jones just introduced three sound money measures. House Bill 3378 excludes from gross income any net capital gain derived from the exchange of precious metals bullion.

  And Jones’s House Joint Resolution 3379 would create a committee to explore the feasibility of a state-chartered metals depository. Finally, the representative from Laurens, South Carolina, has put forward House Bill 3377, which reaffirms that gold and silver are money.

  Building on prior efforts to make precious metals purchases tax-free, Tennessee Senator Rusty Crowe introduced Senate Bill 251.

  Meanwhile, Tennessee Representative Bud Hulsey and Senator Paul Rose introduced House Bill 353 and Senate Bill 279, respectively. These bills would create a study commission regarding a gold depository for the Volunteer State and a report of findings to the state Senate and House of Representatives.

  In Arkansas, a measure that would eliminate the sales tax on precious metals purchases has been submitted for introduction by Representative Delia Haak, Representative Robin Lundstrum, and Senator Mark Johnson. Senator Johnson introduced a similar measure in 2019.

  In Alabama, Representative Andrew Sorrell will re-introduce a measure to remove income taxes from gold and silver. While Alabama enacted a precious metals sales tax exemption into law in 2018, the original bill sponsor, Senator Tim Melson, plans to introduce a bill this year to clear up some ambiguity in the 2018 language and to push out a sunset provision for another 5 years.

  Way to the west, Representative Val Okimoto and Representative Dale Kobayashi in Hawaii have introduced House Bill 1184, a measure to exempt precious metals from Hawaii’s general excise tax.

  And Idaho Representative Ron Nate and Senator Steven Vick have put forward House Bill 7 to permit the State Treasurer to hold a portion of state funds in physical gold and silver. Idaho hope to join Ohio and Texas as one of the few states make such a move to secure state assets against the risks of inflation and financial turmoil and/or to achieve capital gains as measured in Federal Reserve Notes.

  Washington State removed sales taxes against sound money decades ago, but a lawmaker hopes to take it a step further. House Bill 1417, introduced by Representative Rob Chase and co-sponsored by Representative Bob McCaslin, seeks to eliminate all Evergreen State taxes on the only form of money mentioned in the U.S. Constitution.

  Sound money forces could face some defensive battles in 2021 as well.

  Fortunately, there are now 39 states that have removed some or all sales taxes from precious metals. But during the shortened 2020 session, revenue-hungry politicians in Maryland, Pennsylvania, and Washington State tried to buck the trend and repeal those sales tax exemptions.

  All three of these recent attempts to reinstate taxes on the monetary metals have been defeated, but taxpayers should be wary of their return.

  By communicating with lawmakers, providing testimony, and igniting a vocal grassroots response, the Sound Money Defense League and its allies continue to make the case for sound money and to defend the existence of current sound money policies.

  Massive debt-financed government spending in response to COVID-19 has reemphasized the importance of sound money.

  As state legislatures and Congress consider actions in the face of a global pandemic and an unprecedented economic meltdown, they would be wise to remove the disincentives that stand in the way of protecting citizens and their states with sound, constitutional money.

  *  *  *

  Jp Cortez is the Policy Director for the Sound Money Defense League, a non-partisan, national public policy group working to restore sound money at the state and federal level and publisher of the Sound Money Index.

  Tyler Durden
  Sun, 02/07/2021 – 18:40

• "This Is The Wildest Market I've Ever Seen": Druckenmiller's Must-See Goldman Interview
  “This Is The Wildest Market I’ve Ever Seen”: Druckenmiller’s Must-See Goldman Interview

  On January 29, Tony Pasquariello, global head of Goldman Hedge Fund Coverage (whose observations we have frequently profiled on these pages) spoke to investing legend Stanley Druckenmiller, head of the Duquesne Family Office, about his current outlook on the market, his approach to risk management throughout his career, and his perspective on the conversation surrounding the role of capitalism in American society. The result was a fascinating conversation that was anything but the canned talking points one would  expect from such a high level interview (h/t to @JohnStCapital for bring it to our attention).

  Without missing a beat, Druck admitted that this “is the wildest cocktail I’ve ever seen in trying to figure out a roadmap.” Below we summarize some of his key observations.

  “The recession we had was 5x the average since WWII but it occurred in 25% of the time,” Druckenmiller said adding that “more bizarrely in a year when 11 million more people were unemployed, we had the largest increase in personal income in 20yrs during an economic downturn, due to massive policy support. The CARES Act added trillions in fiscal stimulus. How big was it? In three months in 2020 we increased the deficit more than the past 5 recessions combined (1973, 1975, 1982, the early 90s’, the dot com bust and the GFC). The Fed in 6 weeks bought more treasuries than in 10yrs under Bernanke/Yellen. Corporate borrowing, which almost always goes down in a recession, which had already increased from $6trln to $10trln going into the crisis due to the Fed’s free-money policies, went up $400bln. Putting that in perspective, it went down by $500bn during the GFC.”

  “So we had this massive increase in liquidity and stimulus which is the background and all of this stimulus has flown into financial markets, into commodities, into financial interests so it’s a bizarre background.” 

  “The juxtaposition of the various policy responses is somewhat breathtaking. Since 2018, M2 in the US has grown 25% more than nominal GDP; a 25% increase in liquidity. In China M2 to nominal GDP is where it was 3 years ago. So China hasn’t borrowed anything from their future and we’ve had a massive liquidity input and frankly very little investment. It’s primarily been transfer payments and Fed Stimulus. We’ve done a horrific job with the virus. The Chinese and Asia in general they’ve pretty much defeat the virus.”

  

  “So the background could not be more different, but could not be more exciting if you are a macro investor, because on top of all this there is the other big force in the equation which is vaccines. And it’s possible in fact probable that all this stimulus will be in place just when we unleash the biggest increase in pent up demand globally since the 1920s which could make the world extremely different than it looks today.”

  In response to a question from Pasquariello what is Druck’s favorite asset with the best opportunity, Druckenmiller refuses to answer, saying “that’s not how I play the game” and instead he says that the “overriding theme is inflation relative to what policymakers think. But because of the policymaker response which could be very varied based on the vaccine, I’ve found it’s better to have a matrix. So basically to play reflation I have a short treasury position primarily at the long end.”

  Take home #1: Druckenmiller is short long-end Treasuries.

  He also has a large position in commodities: “the longer the Fed tries to keep rates suppressed the more I win on commodities; the quicker they respond the quicker I might have a bigger problem with commodities.”

  Take home #2: He is very long commodities.

  And then there was currencies: “because of the juxtaposition of the US policy response versus Asia, I have a very, very short dollar position.”

  Take home #3: He is also “very very” short the dollar.

  Pasquariello then asks Druckenmiller about his view on stocks, and specifically the tech space (both mega cap, cloud and smaller cap names). Here, Druckenmiller is more reserved and says that “if we get 4-5% inflation in the US a few years out and bond yields rise precipitously that’s very negative historically for growth stocks relative to other stocks. On the other hand the comparisons with 2000 are ridiculous. The reason they are ridiculous is we had a double whammy back then of not only the raging mania of overvaluation but also earnings were about to end, because those companies that were growing rapidly then were all about building the Internet itself”, and that was done so there was no way to generate earnings.

  Looking to today, Druckenmiller says that “the combination of valuation and challenged bond markets could certainly make growth stocks in a very, very challenged environment the next 5 years relative to what they’ve been.”

  “Having said that, on the cloud we are in the 3rd-4th inning. COVID-19 had us jump from the 1st to 3rd-4th inning but we’re not in the 9th inning and if anything every company that I talk to is speeding up their transition because they are going to competitively die if they stay behind within digital transformation.”

  “Within tech itself AMZN and MSFT have been big underperformers in the last 2-3 months. It’s like that market has rotated into 40x sales tech companies or into radioactive reopening stocks. And if you look at Amazons, Microsofts and Googles of the world,  they are not overvalued, they are GARP names that are currently out of favor. And if the Fed continues to push the envelope in terms of friendliness I’m not worried about those stocks in fact they could keep going.”

  The interview then shifts to geographical preference and the Asian region in particular, to which Druckenmiller says that he owns China, Japan and Korea, “They’ve had a very good start to the year” and considering how much the US borrowed from the future, he thinks “Asia is the big, big winner coming out of COVID-19.”

  The same is true within tech itself, where Intel has thrown in the towel “so Asia owns foundry, memory, they are ahead in robotics.I think the next 5 years Asia looks a lot better than the US because at some point we have to pay back in terms of productivity, in terms of higher wages, in terms of lower dollar for all these transfer payments we’ve made the last nine months and we will continue to make.”

  “So I’m quite constructive on a number of names in Taiwan, in Korea, in China, in Singapore. Long-term Asia is going to be an outperformer vs the US, and especially the currency market. Net investment into China just passed the US ever this year, and it’s the beginning rather than the end of a trend.”

  * * *

  The conversation then turns to the topic of money and risk management to which Druck, who has never recorded a down year since 1981, said it was “a lot of it is luck. I’ve been deep in the hole 3-4 years and in every case something came along and it was just a coincidence of the calendar that at Dec 31 I was up.  If you looked at May 31-May 31 there would have been some down years.”

  Druck then says that “the fact that he can trade 5-6 asset classes does a few things.

  • Number one, it can point you in the right direction and if you believe something you can make big, big gains.
  • Number two, as a macro investor currencies and  bonds trade 24 hours a day and are very liquid and you can change your mind, which I’ve had to do a lot in my career cause I’ve been wrong a lot.
  • Number three, it also gives you discipline not to playing around in an area that is dangerous. Equity only investors need to be in equities. But if you’re a macro investor you don’t need to be in equities at any given point in time.

  As an example of the last point, Druck said he has never lost money big in credit because the only time he bets in credit is every 8 years after there’s a big debacle in credit and that’s when he buys a bunch of credit. But if he was a purely credit investor he would’ve had 3 or 4 down 30% years.

  Druckenmiller also said the he is “very much of philosophy to put all your eggs in one basket and watch it very carefully.” He has found that every investor has 3-4 big winners per year and usually you know what they are. But when you get in trouble is with something you’re not focused on. But if you put 50-70% of your assets in one asset class, “trust me you’re focused and you’re more risk averse” then with something you might have 5% or 6%.

  The investor also admitted that he has never used VaR: “I’m very unsophisticated I watch my PnL everyday and  if it starts acting in a strange manner relative to what I’d expect in a matrix, my antenna would go up.”

  The reason why Drucknemiller simply uses his PnL for risk management is that “I’ve found all risk models are great until complete chaos happens and then all the correlations break down and they can suck you in into a false security. If you watch your PnL, it’s a much better warning system than some of these mathematical models out there. They’re useful, just not useful when you actually need them.“

  * * *

  Naturally, no conversation could take place without a discussion of bitcoin, and when asked if bitcoin may be the “mother of all asset bubbles or something genuine” Druckenmiller said “maybe both.” And while he admits he does not know the future, he knows how we got here, and his take is one we completely agree with (and one which Neel Kashkari should read very closely): Bitcoin “wouldn’t do what it’s doing without Central Bank behavior.”

  While Druck was skeptical of XBT 3-4 years ago when the crypto first broke out out – “why would anybody buy this thing” – he now admits that bulls have done an unbelievable marketing job. Bitcoin has been around 13 years and younger millennials look at bitcoin the way he looks at Gold. That said, Druck has doubts whether Bitcoin will ever be anything other than a store of value, as Bitcoin has problems as a currency because it uses a lot of energy, it’s volatile and it’s got other problems. But that doesn’t matter because right now it’s an asset class, “my view of it has been way overblown in the press; I do own some of it, it’s gone up a lot since I bought it.” In the end he doesn’t believe in it. He doesn’t not believe in it. He simply admits honestly that he “doesn’t know.”

  The conversation then shifts to more philosophical topics, and in response to a question how he would characterize “the state of American capitalism”, Druck says that he’s worried because “we have not engaged in capitalism for some time.”

  “The Central Bank has bastardized the most important price in the world which is the cost of money. We have crony capitalism as you know.”

  “But even in the best days of capitalism there’s always been a stain in the US, which is I grew up believing that we are a meritocracy by and large but there is a subsector of out society where we are in a caste system. We have a lot of neighborhoods in our country where millions of kids just don’t have opportunity to pull up their bootstraps and work hard.”

  “That’s always been there and is something we need to address. Which is why I am not sure events of last summer were a bad thing. It’s my own view that they were a good thing because people need to be woken up to fact that American Dream is a great thing but there are a significant amount of kids without access to the American dream the way I had.”

  Watch the full interview below.

  Tyler Durden
  Sun, 02/07/2021 – 18:29

• That Mystical Monetary Theory
  That Mystical Monetary Theory

  Authored by Joakim Book via The American Institute for Economic Research,

  MMT, or Modern Monetary Theory, is on everyone’s lips – and it seems that everyone is keen on this long-obscure idea of how our public finances really work. 

  

  In an article in the latest issue of Economic Affairs, I try to condense the argument into four propositions that form the core of MMTers’ understanding of the world. I do this by reviewing Stephanie Kelton’s book from June of last year, Kelton being the most vocal and well-known persona in the field. I show that there is great tension between these propositions and that most MMT arguments include accurate statements in the service of inaccurate conclusions. What is right about MMT is mostly old – and fairly trivial – and what is new about MMT is not quite right.

  1. A currency issuer (a “monetary sovereign”) cannot run out of money 

  With this proposition, MMTers stumble upon an old and long-accepted idea in monetary economics. The more others wish to hold your liabilities, the more you benefit. Everyone from private banks on a gold standard to Amazon and Starbucks’ gift cards, and more recently Elon Musk’s Tesla have realized that free lunches abound if consumers want to hold financial claims on you.  

  Just like central banks issuing money, these companies can never run out of the paper promises they issue. Had they wished to, private banks could have issued as many notes as they wanted, just as Bezos’ Amazon can flood gift cards everywhere or Musk’s Tesla can print up as many Tesla-shares as its shareholders want. Nobody would want to, of course: Amazon would quickly make losses if the goods on their platform were mainly purchased by gift cards freely issued by a Bezos-spree; and not even Musk would know what to do with that much cash on Tesla’s balance sheet – not to mention the effect on the share price from flooding the market with new supply. 

  Isn’t the money issued by central banks entirely different? Not really. True, the dollar or euro notes in my pocket cannot be redeemed for some outside commodity or Starbucks coffee but I can dispose of them by buying goods and services – just like I can with Starbucks and Amazon gift cards. If the hypothetical me instead is a whole population of people who no longer want to hold these paper slips, everyone tries to get rid of them at the same time – which we do in a monetary economy by buying things. Since money can’t escape its closed system, excess money holdings bounce around, hot potato-style, until prices have adjusted enough that the real value of your money holders are no longer excessive – in other words: large and rapid inflation. 

  Yes, the Fed or the Bank of England can never “run out of” the paper money they issue (trivially true), but they can run into the consequences of issuing too many. Kevin Dowd writes that Kelton’s main mistake is “to presume that what is correct at the margin (i.e., that the government can avoid default by issuing a few extra dollar bills) is also correct under any circumstances, that is, at any scale.” 

  2. Taxes don’t pay for government expenditures but generate demand for money

  While the first proposition is trivially true but doesn’t mean quite what you think it means, this one is closer to “demonstrably false.” The first part is an accounting claim or at best a hypothetical proposition that central banks would honor payments by governments even if there were no funds in their Treasury accounts. 

  According to MMTers, taxes don’t fund expenditures, as monetary sovereigns just create money to settle any transaction whenever it is spent. Taxes, in contrast, merely destroy money and keep a lid on aggregate expenditures. Compared to the public finance most students learn, this is completely upside-down – but more importantly, unprovable. Despite Kelton’s desire to describe the world as it really is, this is emphatically not how governments of the world operate. Yes yes, Kelton handwaves, and says that this is because they’re in thrall to mistaken economics and that if they wanted to, they could. OK, great. 

  The second part is less ethereal, but more demonstrably wrong. When you tax something, you do not create demand for that good. When government taxes your income and requires that you pay that tax in some specific unit, that unit doesn’t become money for others; if the government would happen to pick a useful enough item – determined as such and valued by the consumers who use them – public receivability can benefit one monetary commodity over another such that this becomes a society’s general money. 

  If mandating taxes is what generates demand for money and exorbitant privilege for their issuing country, it makes no sense that countries would ever give up that right. When Ecuador in January 2000 stopped resisting its people’s monetary choices by dollarizing and no longer issued its Sucre, this must have been a mistake. In the MMT story, it is unclear why they, or Venezuela and Zimbabwe or Lebanon in the 2010s, couldn’t just have taxed away the inflation that happened when money demand plunged. But with this argument we can go one step further: if money issuers get this grand benefit that the U.S. government has – that Kelton doesn’t think it’s (ab)using enough and that’s unfair towards countries of the world that can’t enjoy this power – why don’t we extend the logic? 

  If it’s so bad that countries that don’t have monetary sovereignty can’t issue their own money, we can have the fifty states print their own dollars (why constrain states from spending on what they “desperately need?”). We can have a New York dollar, an Oklahoma dollar, a Georgia dollar and even an Austin dollar, and all of these jurisdictions can spend to their heart’s desire as they are now money issuers. I can issue Joa-coins right away (Dogecoin, anyone?) and command much more purchasing power for all the things I need! 

  The missing piece for the argument to work is that I benefit only if all of you kindly accept the Joa-coins in exchange for goods and services, even when I’m issuing more and more of them. When you don’t, the purchasing power of any outstanding Joa-coins quickly goes to zero (i.e. infinite inflation) as you all try to get rid of them at any price. We’re back at money demand: the policy proposals of modern monetary theorists only work if there is a desire to hold more of the issuer’s money. Joa-coins can only save the (my?) world if you desperately want to hold them.  

  3. Inflation is the only constraint that a monetary sovereign faces.

  4. Capitalist economies have lots of idle resources (unemployment, spare capacity, fiscal space).

  The fine-print of the MMT system arrives in the two final propositions, which MMTers freely advance Motte-and-Bailey style, against any criticism to their theory. What isn’t immediately obvious in an average conversation about MMT is that these fine prints severely restrict how far (1) and (2) can go in achieving the political ends that MMTers seek. 

  Even if (2) would be factually correct, and taxes levied don’t pay for government expenditures, once (3) starts binding – which Kelton and others explicitly accept they would at some point – taxes and borrowing must be levied to control it. In a roundabout way, real government spending would then be financed by taxes and borrowing. 

  When, in the MMT framework, do we get inflation? When there are no longer “idle resources” in the economy. This is an old idea in the Post-Keynesian tradition that when assets are not used (i.e. factories not operating, capital equipment not producing, houses not occupied) and labor is unemployed or out of the labor force, government spending becomes a free lunch. Spending, which in the MMT world means issuing more money, can bring these resources online without increasing prices because they are assumed not to have alternate uses. 

  Of course, in real life they have; asset owners may have different plans than the central MMT planner, and labor markets can be unsynchronized for other reasons – geography, welfare payments, structural and frictional unemployment – than insufficient demand (if there even is such a thing). Adjusting Ludwig von Mises’ fable of the master builder only a little: if you find yourself in a minefield, the solution is not – as Kelton and others who worry about slack and spare capacity would have you do – to run as fast as you possibly could. It’s to stand still, survey the terrain, and carefully retrace your steps until you’re once again on safe ground. Only from there can you try to go around the minefield.

  Even so, if and when idle resources and unemployed labor do not abound, government spending crowds out private spending and the alleged macroeconomic benefits come to a close (or public wants must trade off private wants). 

  Aren’t Governments and Central Banks doing MMT Right Now?

  Against James K. Galbraith’s argument that the MMT was vindicated by central bank actions of 2020, my AIER colleague Nicolás Cachanosky notes that

  “The government spent a lot of money in a short period of time and inflation expectations remained below two percent. But that doesn’t tell us much about how such a policy would work in normal times. And the supposed evidence offered in support of MMT is also consistent with the standard view. To the extent that the fear of pandemic and government lockdown orders slowed spending, good old-fashioned monetary theory explains the observed low inflation rate in 2020.”

  The real test for MMT is not the fervor with which policymakers around the world have taken MMT-like actions in the midst of a stop-all pandemic economy, but in a “normal” economy. If we make lots of resources idle (4), which governments did when they engineered a recession last year, MMT collapses into standard counter-cyclical Keynesianism with at best some cosmetic differences in form.

  It’s not under today’s conditions that MMT’s policies must deliver, but in pre-pandemic years where unemployment had virtually disappeared, wages were rising across the income distribution, median incomes were rising, and labor force participation reversed its decades-long decline. Spending government funds like it’s World War II and doubling the monetary base during those conditions (without hitting capacity constraints!) is what would vindicate MMT. 

  The MMT mistake lies in believing that any alleged shortfall in money or supply of U.S. Treasuries is big enough to finance their entire policy wish list for the foreseeable future. It also assumes that any potential labor or capital goods not currently used can be effortlessly moved to whatever production line politicians desire, without causing prices or wages to increase.

  While MMT seems to offer grand justifications for spendthrift governments, the more (3) and (4) hold, the less revolutionary (1) and (2) seem. The monetary theory that calls itself modern remains mystically inadequate. 

  Tyler Durden
  Sun, 02/07/2021 – 17:50

• Renaissance Hit With $5 Billion In Redemptions After "Terrible" Returns
  Renaissance Hit With $5 Billion In Redemptions After “Terrible” Returns

  At the end of January, when the Reddit revolt was wrecking havoc among hedge funds and forcing even market neutral quants to degross and delever, we pointed out something unexpected: according to the latest HSBC Hedge Fund performance tracker, Renaissance’s public funds – RIEF and RIDA – had a dismal 2020, losing 20% and 32% respectively, while the Renaissance Institutional Diversified Global Equities Fund (RIDGE) lost 31% as Rentec’s famous quant algos were thrown out of whack by swings the computers had never seen or experienced before (which is not to say that RenTec’s private, internal “friends and family-only” Medallion fund suffered a similar fate, quite the opposite).

  What the hell is going on in Setauket. If some teens can topple Jimbo it’s all over pic.twitter.com/n8LjrjeQYA

  — zerohedge (@zerohedge) January 29, 2021

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  This prompted us to ask “what the hell is going on in Setauket” (where RenTec’s HQ is located), a question which gained even more urgency once we found out that the dismal streak of the world’s largest quant fund (RenTec manages around $60BN) had continued into 2021, when its funds were the top and 5th worst performers overall in January (while Senvest was by far the best on the back of its $700 million gain from going long GME stock).

  

  It turns out we were not the only ones closely watching the dismal recent returns at the world’s most profitable hedge fund, because as Bloomberg writes this morning, the “investing giant that just posted its worst-ever returns across its public funds, has been hit with at least $5 billion in redemptions”, a staggering reversal in fortune for a fund which always had a line of people around the corner just waiting to get be admitted.

  According to the report, after clients pulled $1.85 billion across the three hedge funds in December (RIEF, RIDA, RIDGE), they also hit the Jim Simons’ money machine with another $1.9 billion in January, and are poised to yank another $1.65 billion this month. While those figures could be offset if there are any inflows in February or if investors decided to walk back any of their redemption requests, that does not seem very likely after the staggering underperformance of the quant hedge fund.

  

  Of course, for RenTec founder and former codebreaker Jim Simons none of this matters, because while the public facing funds are a convenient hedge, in the grand scheme of things they are tiny; the real money at Rentec is made at Medallion – the iconic fund reserved for employees and insiders – and in 2020 it soared 76% last year, according to Institutional Investor.

  This kind of discrepancy between internally managed funds and capital run for outside investors is truly unprecedented, and should prompt at least one regulator to ask what is going on. The last time they did, they found that another iconic fund – Michael Platt ‘s BlueCrest – had secretly transferred its best traders from managing outside capital to just running the firm’s own money, while assigning crappy algos to “manage” outside money by piggybacking on internal trades after they were already put on (Platt received a $170MM slap on the wrist and all was forgotten).

  In other words, as we explained in December, “when managing its own money, the macro fund would dedicate its best traders to come up with the top trades, and not only that but it would effectively frontrun its clients! Then, when the time came to manage client money, BlueCrest basically used a simply copycat algo to piggyback on its top trades but only after the management team was already in the positions, thus giving it substantial firepower to generate alpha simply by having billions in fund flows rush into the same trades it had already put on, creating a feedback loop. We wonder if BlueCrest also unloaded its own positions by selling them to its own clients.”

  Surely RenTec would never abuse its fiduciary duty so blatantly as to allow Medallion to frontrun the public fund trades… Surely.

  Back in September, Renaissance told clients that its losses were due to being under-hedged during March’s collapse and then over-hedged in the rebound from April through June. That happened because its trading models “overcompensated” for the original trouble (translation: RenTec’s models had no idea what they were doing).

  Renaissance then again addressed its dismal returns in a December letter, which Bloomberg got access to:

  “Although recent performance has been terrible and worse than prior performance would have suggested was likely for 2020,” the firm said, its model “anticipates that in track records as long as ours, some risk-return ratios every bit as bad as the ones we are now seeing are not shocking.”

  The broader lesson is that “one should expect even good investments to perform horribly from time to time.”

  Well, the returns may have been “terrible” for anyone who foolishly assumed that Simons & Co. would put the same care in managing outside money as they allocate to their own funds. Because while most outside investors have lost over a third of their investment in the past year, RenTec’s internal Medallion fund is up nearly 80% in the same period. How much longer will this divergence continue, we wonder, before someone asks the obvious question: why?

  Tyler Durden
  Sun, 02/07/2021 – 17:45

• "The Post-U.S. Era Has Started": Iran's Ayatollah Blasts Biden For Refusing To Lift Sanctions
  “The Post-U.S. Era Has Started”: Iran’s Ayatollah Blasts Biden For Refusing To Lift Sanctions

  Despite Joe Biden’s prior promises on the campaign trail to immediately restore US participation in the 2015 Iran nuclear deal (JCPOA) brokered under Obama, it’s now looking to be effectively in tatters merely less than a month into his administration. 

  Iran’s Supreme Leader Ayatollah Ali Khamenei issued a ‘final ultimatum’ on Sunday, demanding the US remove all sanctions that were enacted by Trump prior to the Islamic Republic returning to compliance. 

  “Iran has fulfilled all its obligations under the deal, not the United States and the three European countries,” Khamenei said, according as cited in Reuters. “If they want Iran to return to its commitments, the United States must in practice… lift all sanctions.”

  

  Iranian state media is widely describing it as the country’s “final word” on the deal. Given that previously Biden’s top foreign policy advisers as well as press secretary definitively stated that Iran must return to compliance first, most especially when it comes to uranium enrichment caps, the developing stalemate looks to increasingly point toward Washington staying on the sidelines, while keeping sanctions to the max – a continuation of Trump’s ‘maximum pressure’.

  Khamenei affirmed the prior position of top Iranian leaders, including President Rouhani and Foreign Minister Zarif, that it is for the US to move first since it was the one which backed out. He said further in his statement speaking of the US administration, “The side with the right to set conditions to JCPOA is Iran since it abided by all its commitments, not US or 3 European countries who breached theirs.”

  It comes on the heels of Biden saying in a CBS interview that the US won’t budge until Iran returns to compliance first:

  And so it continues. Hours after #Iran‘s Supreme Leader says Iran will only return to its JCPOA commitments AFTER the US lifts sanctions, @CBS releases this: a video of US president Joe Biden saying the US will not lift the sanctions before Iran is back in full compliance. #oott pic.twitter.com/sknoLiPsSk

  — Nader Itayim | ‌‌نادر ایتیّم (@ncitayim) February 7, 2021

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  As WSJ recaps of the latest interview which will air in full just ahead of the Super Bowl on Sunday evening:

  Asked by CBS News whether the U.S. will lift sanctions to convince Iran to participate in negotiations, Mr. Biden said, “No.” When CBS asked whether Iran must stop enriching uranium first, Mr. Biden nodded.

  Also on Sunday the Supreme Leader took to twitter to opine about the ‘decline’ of the American empire…

  One should know the US properly. Their recent events were a fiasco. #Trump’s fall wasn’t just the fall of an unfit president. It was the decline of US power & social order. Speaking of US’s decline from within & the start of a post-US era are the words of US experts, not ours.

  — Khamenei.ir 🇮🇷 (@khamenei_ir) February 7, 2021

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  “If they want Iran to go back to its JCPOA commitments, the U.S. must practically end all sanctions. We will verify if it has been done properly. If yes, we will go back to our JCPOA commitments,” Iran’s Supreme Leader said further.

  Khamenei then issued the following ominous prediction:

  The post-U.S. era has started.

  — Khamenei.ir 🇮🇷 (@khamenei_ir) February 7, 2021

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  While during his last weeks in office Trump had ramped up the pressure campaign on the Islamic Republic, Iranian authorities defiantly announced they had taken uranium enrichment to 20%, installed more advanced centrifuges, and advanced its capability to produce uranium metal crucial for nuclear warhead development (though Tehran has long maintained all of this is toward peaceful domestic energy purposes).

  Meanwhile with Washington and Tehran are now telling each other, “you first” in terms of who acts to reverse measures, the nuclear looks to effectively remain dead with the sanctions status quo remaining in effect for the foreseeable future. 

  Tyler Durden
  Sun, 02/07/2021 – 17:25

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• When (Or If) Comes The Pushback?
  When (Or If) Comes The Pushback?

  Authored by Victor Davis Hanson via AMGreatness.com,

  The corruption of the Renaissance Church prompted the Reformation, which in turn sparked a Counter Reformation of reformist and more zealous Catholics.  

  The cultural excesses and economic recklessness of the Roaring 20s were followed by the bleak, dour, and impoverished years of the Great Depression. 

  The 1960s counterculture led to Richard Nixon’s landslide victory in 1972, as “carefree hippies” turned into careerist “yuppies.” 

  So social, cultural, economic, and political extremism prompt reactions – and sometimes counterreactions.   

  The Bush-Clinton-Obama continuum of 24 years (from 1993 through 2015) cemented the bipartisan fusion administrative state. Trump and his “Make America Great Again” agenda were its pushback.  

  The counter-reaction to the populism of the Trump reset—or Trump himself—is as of yet unsure.  

  Joe Biden’s tenure may mark a return to business as usual of the Bush-Clinton years. Or more likely, it will accelerate the current hard-left trajectory. 

  Either way, it seems that Biden is intent on provoking just such a pushback by his record number of early and often radical executive orders—a tactic candidate Biden condemned. 

  On almost every issue—open borders, blanket amnesties, canceling the Keystone XL pipeline, promoting the Green New Deal, and hard-left appointees—Biden is touting positions that likely do not earn 50 percent public support. 

  When Biden made a Faustian bargain with his party’s hard-left wing of Bernie Sanders (I-Vt.), Kamala Harris, Elizabeth Warren (D-Mass.), and Alexandria Ocasio-Cortez (D-N.Y.) to win the election, he took on the commitment to absorb some of their agenda and to appoint their ideologues. 

  

  But he also soon became either unwilling or unable to stand up to them.

  Now they – and the country – are in a revolutionary frenzy.

  • The San Francisco school district has canceled over 40 schools honoring the nation’s best – Washington, Jefferson, and Lincoln – largely on racist grounds that they are dead, mostly white males. 

  • Statues continue to fall. Names change. 

  • The iconic dates, origins, and nature of America itself continue to be attacked to meet leftist demands.

  • And still, it is not enough for the new McCarthyites.

  • Social media are banning tens of thousands.

  • Silicon Valley and Wall Street monopolies go after smaller upstart opponents.  

  • A wrong word destroys a lifelong career.

  • Formerly sane pundits now call for curtailing the First Amendment.

  • Thousands of federal troops blanket a now-militarized Washington, D.C.

  If Trump’s pushback tried to return to traditions ignored during the Obama years, Biden’s reset promises to become far more radical than Obama’s entire eight years. 

  Trump likely lost his second pushback term for two reasons – neither of which had anything to do with his reset agenda.

  First, the sudden 2020 pandemic, quarantine, recession, summer-long demonstrations and riots, and radical changes in voting laws all ensured that 100 million ballots were not cast on Election Day, derailed a booming economy, and finally wore the people out.  

  Second, Trump underestimated the multitrillion-dollar power and furor of Silicon Valley, Wall Street, the media, Hollywood, and the progressive rich. Those forces all coalesced against him and swamped his outspent and outmanned campaign. 

  With 24/7 blanket ads, news coverage, endorsements, and social media messaging, Trump sometimes was easily caricatured as a twittering disrupter. The inert and mute Biden in his basement was reinvented as the sober and judicious Washington “wise man” antidote to Trump’s unpredictability.

  Had Biden continued his moderate campaign veneer, the current left-wing radicalism might not have prompted a counterreaction. 

  Instead, Biden is now unapologetically leading the most radical left-wing movement in the nation’s history. 

  Pundits thought Biden’s prior hints of a single four-year term would make him a weak lame duck.  Instead, the idea of just one term has liberated the 78-year-old Biden. We forget that septuagenarians can be as reckless as 20-year olds. Some old guys can feel their careers only have a few remaining years and might as well go out with a bang—and a legacy. 

  For now, Biden enjoys a congressional majority for the next 24 months. He has no plans to run for reelection. He sees both realities as a liberating blank check to accomplish what the much more heralded rockstar Barack Obama never could. 

  Experts assured voters that Joe Biden would work on a bipartisan consensus and bring back “normality.”

  He would “unite” the country.  

  That will not happen. How ironic that Biden will not just be pushed and pressured by the radicals whom he brought to power, but he may be leading them forward to cement an even harder Left legacy.

  Will there be a reaction to this extremism?  

  The Left is assured that radical changes in voting laws and demography, the fears of COVID-19, the Antifa-Black Lives Matter uprising, and anger at Trump over the January 6 Capitol riot have all permanently changed the electorate – and pushed it far leftward. 

  If they are wrong, they have instead alienated and insulted the American people, and will reap the whirlwind in 2022 of the wind they are now sowing.

  Tyler Durden
  Sat, 02/06/2021 – 23:30

• Google Reverses Course In Australia – Opens Paid Platform For (Some) Australian News
  Google Reverses Course In Australia – Opens Paid Platform For (Some) Australian News

  The Australian government has possibly obtained a rare, partial victory in its standoff with Google. The US-based tech giant has appeared to reverse course as Australia holds hearings aimed at enacting legislation that would effectively force Google to pay local sources for news it links to and features in its search engine. 

  Google last month threatened to pull its search engine off the continent altogether, with Canberra counter-threatening that they won’t budge. But on Thursday Google made the following official announcement: “To meet growing reader and publisher needs, last year we increased our investment in news partnerships and launched Google News Showcase.”

  The ‘Showcase’ app is the result of the company negotiating to pay some Australian news producers who sign up for the program. It’s an attempt to undercut legislation being proposed to require the company to pay for all such content. It’s not likely to stop the new legislation, however, but Google is offering it as an ‘alternative’. The move shows that the tech giant is arguably feeling the pressure and is looking to compromise.

  

  The Google announcement continued, “Today we are happy to announce we are rolling out an initial version of the product to benefit users and publishers in Australia, with a keen focus on leading regional and independent publishers given the importance of local information and the role it plays in people’s everyday lives.”

  “News Showcase is designed to bring value to both publishers and readers by providing a licensing program that pays publishers to curate content for story panels across Google services, and gives readers more insights into the stories that matter,” it said. 

  While the details have yet to be revealed, for example just which publishers will eventually be enabled to join the platform, it’s being reported as a significant compromise which is likely to first reward major national Australian outlets, as Reuters details:

  With the legislation now before a parliamentary inquiry, Friday’s launch of News Showcase in Australia will see it pay seven domestic outlets, including the Canberra Times, to use their content.

  Financial details of the content deals weren’t disclosed, and Canberra Times publisher Australian Community Media didn’t immediately respond to a request for comment.

  The months in the making Australian initiative seeks to ensure companies and content providers are compensated fairly for the value their content generates for Google and parent company Alphabet Inc. at a moment the domestic industry is in crisis, with traditional newspapers and content producers under threat of having to shut down altogether.

  WATCH: As Google considers pulling out of Australia due to a recent legal tussle with the government, companies are looking at how to reshape their online business models to survive https://t.co/ySzE4cTLCX $GOOGL pic.twitter.com/BKxfOxzWXh

  — Reuters India (@ReutersIndia) February 4, 2021

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  Last month Australia Prime Minister Scott Morrison hit back in the wake of the threatened Google shutdown in the country, saying, “We don’t respond to threats.” He added at the time: “Let me be clear. Australia makes our rules for things you can do in Australia.”

  It’s commonly estimated that Alphabet Inc. oversees at least 94% of all search traffic in Australia, similar to many other countries globally, at a time it’s coming under increased accusations of using its monopoly power to bully content providers and smaller competitors. 

  Tyler Durden
  Sat, 02/06/2021 – 23:00

• Twitter Permanently Bans Gateway Pundit For Violating "Civic Integrity Policy"
  Twitter Permanently Bans Gateway Pundit For Violating “Civic Integrity Policy”

  Twitter has permanently suspended the account of Jim Hoft, founder of the popular conservative website The Gateway Pundit, for reportedly violating the social media giant’s “civic integrity policy.”

  Twitter has suspended The Gateway Pundit’s Jim Hoft. pic.twitter.com/a3dzXrysWB

  — Josh Caplan (@joshdcaplan) February 6, 2021

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  Hoft’s account @gatewaypundit, which had over 375,000 followers, served as the outlet’s primary presence on Twitter. The ban comes one day after TGP posted election night surveillance video of Detroit’s TCF Center of what the outlet reports is a van dropping off “tens of thousands of illegal ballots,” after which “Joe Biden took the lead in Michigan.”

  Oh shit they got my boss pic.twitter.com/seMjYSG8Bl

  — Cassandra Fairbanks (@CassandraRules) February 6, 2021

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  According to a spokesperson for Twitter, “The account was permanently suspended for repeated violations of our civic integrity policy,” according to Citizen Free Press.

  Following the ban, The Gateway Pundit said of the surveillance footage that they have “much much more on this incident to report on in the coming days,” as they have yet to release all of it. Hoft posted the following tweet hours before his suspension:

  

  And while liberal Twitter celebrates Hoft’s banishment – and the founder of pro-censorship organization Sleeping Giants is now calling for their complete demonetization, The Gateway Pundit can still be found on the following platforms:

  Telegram
  Gab
  SafeChat
  MeWe
  Clouthub
  Minds
  Politichatter

  Tyler Durden
  Sat, 02/06/2021 – 22:27

• Miami Mayor Speaks With Musk About Boring Tunnel Under Brickell Avenue
  Miami Mayor Speaks With Musk About Boring Tunnel Under Brickell Avenue

  Miami Mayor Francis Suarez had a phone call with Elon Musk on Friday about digging a tunnel underneath Brickell Avenue and Biscayne Boulevard to alleviate traffic. 

  Following the phone call, the Miami Herald spoke with Suarez about the Musk-owned Boring Co. building a $30 million tunnel under the Brickell Avenue Bridge. He said the tech billionaire told him the tunnel could be built in six months. 

  

  “For him, it’s not about the money, it’s about creating a solution, creating something that creates happiness and prosperity to the people,” Suarez said.

  Suarez said the tunnel would only be accessible to electric vehicles because a major cost-savings of the tunnel is the lack of ventilation systems. He said the call lasted about 30 minutes. 

  “I think we have a unique opportunity to create a signature project, not just for Miami, but for the world,” Suarez said in a video statement on his Twitter account. 

  Just had my call w/ @elonmusk regarding @boringcompany tunnels coming to MIA

  DETAILS BELOW👇🏽 pic.twitter.com/NsJFYcvGeQ

  — Mayor Francis Suarez (@FrancisSuarez) February 5, 2021

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  Musk has also spoken with Gov. Ron DeSantis and Miami-Dade County Mayor Daniella Levine Cava about the project. 

  Suarez said the next step for him is to speak with DeSantis about the idea considering Miami-Dade County transit officials have already considered building a more expensive tunnel under the city. 

  Already, Boring has found success in completing a third of a mile transport tunnel beneath the Las Vegas Convention Center at the cost of $52.5 million. 

  Last week, San Bernardino County Transportation Authority in Southern California approved plans to connect a train station in Rancho Cucamonga, California, to Ontario International Airport with a Boring tunnel.

  … and good luck to Miami officials, who believe Musk can deliver them a tunnel under budget and in six months. Musk has been notorious for overstating promises. 

  We’re still waiting for the million robotaxis Musk promised on the road by 2020. 

  Tyler Durden
  Sat, 02/06/2021 – 22:00

• How To Protect Your Local Economy From The Great Reset
  How To Protect Your Local Economy From The Great Reset

  Authored by Brandon Smith via Birch Gold Group,

  Over the years, I have written extensively about the concept of economic “decentralization” and localization, but I think these ideas are difficult for some people to visualize without proper motivation. By that I mean, it’s not enough that the current centralized model is destructive and corrupt; it has to start breaking down or show its true totalitarian colors before anyone will do anything to protect themselves.

  Sadly, the majority of people tend to take action only when they have hit rock bottom.

  

  In recent months the pandemic lockdown situation has provided a sufficient wake up call to many conservatives and moderates. We have seen the financial effects of pandemic restrictions in blue states, with hundreds of thousands of small businesses closing, tax revenues imploding and millions of people relocating to red states just to escape the oppressive environment.

  Luckily, conservative regions have been smart enough to prevent self destruction by staying mostly open. In fact, red states have been vastly outperforming blue states in terms of economic recovery exactly because they refuse to submit to medical tyranny.

  I outlined this dynamic in detail recently in my article Blue State Economies Will Soon Crumble – But Will They Take Red States With Them?

  The data is undeniable: the states and cities that enforce lockdown mandates are dying, the states that ignore mandates are surviving. However, with a Biden presidency there is a high probability that the federal government will now seek to force compliance from all states. In other words, lockdowns will become a national issue rather than a state issue.

  For now, Biden is pretending as if reopening is right around the corner, but as I have noted in the past, the Reset agenda will never allow this. A reopening, if it happens at all, will be short and lockdowns will return. We are already seeing a new narrative being introduced to the public involving “COVID mutations”, which are supposedly “more deadly” than the original COVID-19 outbreak. So, there is a brand new and useful threat and the establishment will exploit it as a rationale for more lockdowns and restrictions.

  Beyond the pandemic mandates, there are also numerous Reset agenda policies that will be implemented under the Biden administration, including insane Green New Deal related executive orders and legislation claiming to reduce carbon emissions. What they will really do is annihilate resource production. Millions of jobs will be lost and entire industries will be erased unless conservatives act to stop Biden in his tracks.

  This means doing far more than stalling through political maneuvers. We are going to have to use concrete strategies to retake control of resource management within the states. Pointless globalist carbon policies composed by entities like the UN have no place in American economic planning. A message needs to be sent that they will never be accepted here.

  Time is running out to prepare. Lockdowns will return within a few months and this time they will be federally enforced. Conservatives must be ready to defy these orders if they have any hope of saving their local economies. This is going to take individual efforts to stock necessities and secure their finances, but ultimately wider organization is going to be needed to weather the storm.

  Conservatives must establish coalitions of counties and states, and certain economic measures will have to be applied to insulate from damage. The federal government and Biden will attempt to punish red states for refusing to submit, and we need to be ready for that eventuality.

  Here are some ways that conservative communities can stop the Reset agenda…

  Localization

  On a smaller scale, conservatives can accomplish a lot by simply changing their buying habits. If you do 80% of your retail spending with big box stores and online outlets like Amazon and only 20% at local small businesses, then try to switch that ratio. Spend 80% at local businesses and 20% at corporate outlets. Yes, small businesses tend to cost a little extra, but who do you really want your money going to? Do you want your money filling the pockets of international corporate moguls that are working to destroy your freedoms and undermine your economy? Or, do you want your cash to circulate locally?

  Individuals can also start their own business from home focusing on production of necessities or necessary skill sets. They can establish a small business co-op and encourage the community to buy locally. Often, people just don’t know how many services are available from small businesses in their area, so they automatically go to big box providers. Small businesses must work together to change the dynamic.

  This strategy also extends to local farms. Consumers and grocery stores need to buy more of their produce from farms in the area and less from chains which ship in produce from other countries. There are millions of acres of farmland in the U.S. that do not grow food at all because these farms are paid by the federal government not to. Encouraging local food production is paramount to remaining free from centralized control.

  Organized Refusal To Comply

  The problem with conservatives is that we tend to be so independent that we avoid organization. This is a problem because it leads to self-isolation. During the pandemic lockdowns in blue states, some conservative-owned businesses refused to comply, but they were left mostly to fend for themselves with no aid from the wider community. If more businesses were to ally with each other and protested in tandem, dozens or hundreds of defiant businesses working together would be a lot harder to shut down than just a few.

  By extension, it’s not enough for conservatives to merely argue against the lockdowns and demand businesses stay open, we need to also defend those businesses that take action. We need to support them with our dollars and stand in the way of anyone trying to close them down. They are taking a big risk for us, so we need to be willing to take risks for them.

  Imagine if Biden tried to assert a national lockdown order and more than half the businesses in the country ignored him? What if patrons refused to allow federal agencies to intimidate those businesses? The lockdowns would be nullified, and Biden would have little recourse.

  Establish Barter Networks

  In the event that the U.S. economy breaks down completely, we must create contingencies to prevent total trade disruption. Without trade, populations become desperate because no one has the ability to provide every necessity all the time. People have to be able to barter goods and services in an open market.

  Barter networks are a base fundamental, the universal go-to solution during economic collapse. Every society in modern history has used barter markets to stay afloat during financial crisis and to bypass government economic controls. We must be willing to do the same.

  Conservatives must start organizing barter networks within their communities now. It does not matter if you are trading with a couple of people or hundreds; the process needs to start somewhere.

  Why is this so important? Because there is a very good chance that the federal government will try to fiscally punish any state or county that opposes lockdown measures and Reset policies. This means that the government will first seek to cut off federal funding to red states. In the midst of economic crisis, many regions have become reliant on federal stimulus as a crutch, and this dependency makes them vulnerable to control.

  To truly rebel against the Reset, local economies need to be free from federal oversight or consequences. With barter networks in place along with possible local scrip and alternative currencies, the public will be less fearful of economic retaliation.

  Take Back Management Of Local Resources

  We have already seen attempts by Biden to disrupt production of carbon based energy resources like oil and coal. Frankly, the time is long past due for states and counties to take back control of federal lands. The government has been stifling American production for decades and this has hurt rural communities in particular.

  In my area, the EPA has essentially destroyed the timber harvesting industry through unfair regulations. This has led to federal mismanagement of forests to the point that fire hazard has become a major issue. All the young men in the county used work as lumberjacks to support their families; now they have to leave, or work as wildland firefighters. It’s completely backwards. And this is happening while U.S. lumber prices are skyrocketing.

  Conservative counties and states need to take back land and resource management and allow reasonable production to return. Biden should have no say in whether or not oil wells in North Dakota stay operational, or coal mines in West Virginia stay open, or trees Montana are selectively harvested. As long as the bulk of wealth from the resource production stays within the state where the resources were harvested, I see no downside to this kind of response.

  If the federal government tries to retaliate by cutting off federal funds, it won’t matter because the states will be producing jobs and wealth for themselves independently.

  Immunity From Cancel Culture

  In our current political environment, it is becoming a fact of life that the hard left can and will try to harm people that oppose their ideology. Big tech companies and government are helping them to do this. Now more than ever, conservatives that wish to remain free to voice their views and share facts that are contrary to the leftist narrative must seek protection from cancellation. But how do we do this?

  For one, we can work for ourselves. Being self employed means never having to worry about being fired because of your political opinions. Or, conservatives need to work for conservatives. This means conservative companies need to focus on hiring conservative employees, and if the leftist mob tries to attack an individual, those companies can easily ignore them. Of course, this also means that conservative consumers need to start making a list of conservative companies that have proven themselves to be immune to leftist pressure. We need to support these companies.

  Conservatives should also look into the possibility of campaigns to build more platform alternatives to Big Tech and social media. We need more web service providers that are owned by people who respect free speech rights. We may even need our own internet.

  All of these things are possible, but it takes organization and effort. Conservative communities can become safe havens for civil liberties, but this means we cannot be isolated from each other anymore. We have to be connected by more than our principles, we must also be connected through actions.

  *  *  *

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

  Tyler Durden
  Sat, 02/06/2021 – 21:30

• Super Bowl LV Ticket Prices Halved Amid Virus Fears 
  Super Bowl LV Ticket Prices Halved Amid Virus Fears 

  Super Bowl LV ticket prices have plunged in the last couple of weeks in the wake of the COVID-19 pandemic.

  As of Friday, TicketIQ’s pricing data shows the average price for a Super Bowl ticket is $5,290, down 55% since the peak on Jan. 24. 

  

  Compared with the last ten Super Bowls, the average $5,290 per ticket is still superior to any other, besides Super Bowl LIV. 

  • Super Bowl LIV: Kansas City Chiefs vs. San Francisco 49ers (Miami) – $6,621

  • Super Bowl LIII: New England Patriots vs. Los Angeles Rams (Atlanta) – $4,331

  • Super Bowl LII: Philadelphia Eagles vs. New England Patriots (Minneapolis) – $4,788

  • Super Bowl LI: New England Patriots vs. Atlanta Falcons (Houston) – $3,967

  • Super Bowl 50: Carolina Panthers vs. Denver Broncos (Santa Clara) – $4,252

  • Super Bowl XLIV: Seattle Seahawks vs. New England Patriots (Glendale) – $4,222

  • Super Bowl XLVIII: Seattle Seahawks vs. Denver Broncos (New Jersey) – $2,516

  • Super Bowl XLVII: Baltimore Ravens vs. San Francisco 49ers (New Orleans) – $2,524

  • Super Bowl XLVI: New York Giants vs. New England Patriots (Indianapolis) – $3,040

  • Super Bowl XLV: Green Bay Packers vs. Pittsburgh Steelers (Arlington) – $3,074

  StubHub spokesperson Mike Silveira told CBS Sports, “as the event draws closer, we often see prices level off as the market more appropriately sets itself based on demand and inventory.” 

  Some local health experts believe Super Bowl LV could be a super spreader event despite strict virus measures, such as health screenings, temperature checks, mask requirements, and social distancing on stadium grounds. 

  While experts fret over the stadium being a super spreader event, a more significant concern is the parties and gatherings not tied to stadium events at bars, restaurants, and house parties around the country. 

  Tyler Durden
  Sat, 02/06/2021 – 21:00

• Biden To Reverse Trump's Terror Designation Of Yemen's Houthis
  Biden To Reverse Trump’s Terror Designation Of Yemen’s Houthis

  Authored by Dave DeCamp via AntiWar.com,

  The Biden administration notified Congress that it will remove Yemen’s Houthis from the US government’s list of foreign terrorist organizations, a designation made in the last days of the Trump administration.

  “We have formally notified Congress of the Secretary’s intent to revoke these designations,” a State Department official said in a statement. “Our action is due entirely to the humanitarian consequences of this last-minute designation from the prior administration, which the United Nations and humanitarian organizations have since made clear would accelerate the world’s worst humanitarian crisis.”

  

  Due to the US-backed Saudi-led war in Yemen that has been raging since 2015, about 80 percent of Yemenis are reliant on aid, and mass starvation has been ongoing in the country for years. The terror designation means anyone who does business with the Houthis could be targeted by US sanctions.

  It essentially criminalizes the delivery of aid and other goods to Houthi-controlled areas, where most of the population lives.

  After the Trump administration announced the designation, the UN predicted that it would cause a massive famine, the likes of which the world hasn’t seen in “40 years.” The Biden administration initially granted a temporary waiver for people to do business with the Houthis, but the UN said that was not enough and still called for the full reversal of the designation.

  The reversal comes after President Biden announced that he will end US support for Saudi Arabia’s “offensive” operations in Yemen. While it was framed to leave wiggle room for the US to support the Saudis militarily in other ways, the administration seems serious about ending the conflict.

  Biden also announced that he appointed Timothy Lenderking as the US special envoy to Yemen. Lenderking is a veteran diplomat who will work to end the fighting between the Saudis and the Houthis.

  Tyler Durden
  Sat, 02/06/2021 – 20:30

• Commodities Are Soaring 25%: That's Consistent With Headline Inflation Of Almost 4%
  Commodities Are Soaring 25%: That’s Consistent With Headline Inflation Of Almost 4%

  Crescat’s Tavi Costa points out something remarkable which many may have missed amid the short squeeze and “growth” stock frenzy: oil, that “value” age relic, has had its best YTD performance in 30 years. As Costa puts it “commodities are leading the way and the inflationary thesis keeps building up” (incidentally none of this is lost on those long XOM which is not only the most levered – for better or worse – way to bet on rising oil prices but pays a generous 7%+ dividend while waiting for Warren Buffett to announce that he has amassed a 10% stake).

  Oil.
   
  Best YTD performance in 30 years.
   
  Stunning how no one is talking about this.
   
  Commodities are leading the way and the inflationary thesis keeps building up. pic.twitter.com/SWnX1gdjgV

  — Otavio (Tavi) Costa (@TaviCosta) February 6, 2021

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

  In any case, those following the reflation theme better pay attention, because with crude oil prices joining their commodity cousins in repairing the pandemic damage, inflation rumblings are getting a little louder which means that the day central banks may be forced to tighten financial conditions (perish the thought) is nearing once again.

  Of course, with every major developed economy still printing headline and core inflation below 2%, this is not today’s problem, but there is a reason for that: metrics such as CPI and PCE are politically convenient measures that strip away virtually all basket components whose prices are surging to give central banks leeway to pursue politically acceptable policies of reflating all assets (until the bubble bursts, but by then that will be some other politician’s problem).

  Still, as BMO’s Doug Porter shows, the year-over-year rise in a basket of commodity prices (and they mostly all show a similar pattern) is now a bit above 25%. This is a problem because in the past 20 years, that’s been consistent with headline inflation of just under 4%… or rather, it would be a problem if government headline inflation data actually reflected the reality of prices.

  

  That said, Porter notes some caveats and cautions that some of the biggest misses (where commodities popped and inflation didn’t) were immediately after recessions. That’s because there is still so much slack in the economy that cost increases don’t get fully passed along. (Note especially 2010/11.)

  Still, as the BMO strategist concludes, “barring a fast fall in resource prices, it looks like the days of sub-1% inflation are rapidly drawing to a close.“

  Tyler Durden
  Sat, 02/06/2021 – 20:00

• "This Is For You, Dad": Interview With An Anonymous GameStop Investor
  “This Is For You, Dad”: Interview With An Anonymous GameStop Investor

  Authored by Matt Taibbi via TK News,

  Thursday, January 21st was a critical day in the story of the video game chain GameStop (ticker name: GME). Retail investors, including many subscribers to a Reddit forum called wallstreetbets, pushed the company’s stock from $6 to $43.03, but experts said playtime was over. It was time for the big shots to clean up.

  According to Citron Research, one of many funds that had bet on the brick-and-mortar store to fail, those investing in GME were “the suckers at this poker game,” and would soon be sorry when the stock went “back to $20 fast.”

  ​

  They were wrong. Instead of amateurs being shoved aside by hedge funds, it was the pros who had their backs broken, as GME soared to $65.05, beginning a steep ascent that would become an international news phenomenon.

  It was the “We’re gonna need a bigger boat” moment for Wall Street. The pros had been sloppy. By late 2020, shares in GameStop were well over 100% short. A sudden rise in value would force shorts to pay exorbitant prices just to get out of the trade. By the afternoon of the 21st, all the “suckers” on Reddit had to do to beat them was nothing, and they did just that, behind the rallying cry “diamond hands,” signifying a determination to hold at all costs.

  Why hold? One of the millions of subscribers to wallstreetbets posted a note, explaining what the trade meant to him:

  This is for you, Dad

  I remember when the housing collapse sent a torpedo through my family. My father’s concrete company collapsed almost overnight. My father lost his home. My uncle lost his home. I remember my brother helping my father count pocket change on our kitchen table. That was all the money he had left in the world. While this was happening in my home, I saw hedge funders literally drinking champagne as they looked down on the Occupy Wall Street protesters. I will never forget that.

  My father never recovered from that blow. He fell deeper and deeper into alcoholism and exists now as a shell of his former self, waiting for death.

  This is all the money I have and I’d rather lose it all than give them what they need to destroy me. Taking money from me won’t hurt me, because I don’t value it at all. I’ll burn it down just to spite them.

  This is for you, Dad.

  

  The post went viral, scoring over 70,000 upvotes the first day and ending up on the front page of Reddit. The author, who had gone to lengths to keep his identity private, saw his Reddit handle “Space-peanut” inundated with press requests, from podcasts all the way up to the New York Times. Stuart Varney of Fox Business News read his post out loud on live television.

  Meanwhile, on wallstreetbets, Redditor after Redditor responded with similar tales.

  “My mother lost her house that spent 20 years saving for in 2008 while raising me and my sister,” wrote one. “I remember sitting on the curb, trying to keep it together myself at 16 while watching her break down uncontrollably…”

  “My dad is a carpenter and thirty years of work, retirement, and savings was nearly wiped out,” wrote another, adding: “This is for you, Dad.”

  A third letter described a man who, having lost his dairy business after the crash, attempted suicide by shooting himself in the face in the woods. He survived, leaving his son to “carry his blown-apart body to the house,” only to finish the job by throwing himself in front of a train soon after.

  “Space-peanut” watched in awe as stories piled up. The thread soon read like the untold history of America after the 2008 financial crisis:

  

  

  

  

  The original poster, whom I’ll call SP, was unaccustomed to attention. A one-time military man and father of two, he had no other social media presence and joined Reddit exclusively to comment about stock on wallstreetbets. He was overwhelmed by what he calls “just an endless Rolodex of sad stories,” nearly all referencing the same period after the crash.

  “I think that’s why my post, however terse, hit such a nerve,” he says. “So many people were saying, ‘I have deep pain from this point in time, too.’”

  An acquaintance of a long-ago source of mine, the man reached out this week. Across several conversations, he explained what GameStop meant to him, and why. For a variety of reasons, mainly having to do with his professional situation, he asked to remain anonymous.

  SP is cautious, articulate, and well-read. In our first call, one of the first things he told me was that even growing up, he’d “always wanted to work on a trading desk.” I asked why. The answer was a three-decade story that ran all the way to GameStop. It’s reproduced below, in Q&A form.

  Since 2008, the tendency among mainstream commentators has been to shrug off reverberations from the crash that force their way into news, usually on the grounds that the millions who lost homes, careers, marriages, lifetimes of savings, health, and in thousands of cases, their lives, are not truly poor or “working class,” or are only “relatively low-wealth,” as New York magazine recently put it. In the case of GameStop, there’s been a parade of stories describing investors as dupes, dummies, financial Trumpists, irresponsible gamblers, even crooks, their trade pegged as almost everything but what on some level it surely was and is, an echo of a suppressed national disaster.

  Was GameStop “recreational” investing gone haywire, or a climax to a story building for a generation? Here’s one person’s answer:

  ---

  SP: I grew up watching my parents struggle with money. Money was discussed all the time. They fought all the time. The older I got, the more I felt I had to do anything to keep my own kids from going through the same thing.

  My parents worried in different ways. With my mother, I regularly knew how much money was in her checking account because she would stress-yell the amount whenever I asked for anything. It was really difficult for her.

  My dad was the opposite. He wanted you to think he had money, but you were looking around and thinking, “I’m pretty sure we don’t.” Because I don’t have a bed, and my brother is sleeping on a couch. So if you’ve got it, maybe we should use it, I don’t know. So they were different in that regard.

  From the time I was eight and nine, I was spending summers working. When I was with my father he thought it was important for us to do the hardest manual labor possible.

  TK: Was that supposed to be about character-building?

  SP: So my dad thought it was a good idea, but at the same time, I think he needed to go to work. And that was the best place for us to be, because I don’t think he could leave us alone all day. So he was like, “I know what we’ll do. I’ll bring you to work. You can work and then we’ll be together.” (Laughs) That was character-building, yes. I built a lot of character out there. I’d say that much. I had way too much character.

  To this day I know I can outwork people in physical labor simply because my threshold for what is considered difficult is much higher, because I spent summers as a child doing that. I’m not sure where that squares with labor laws, but it happened.

  TK: What kind of work?

  SP: At that time, we were doing field work out where we were from. So you’re doing a lot of leaching, which just is basically watching a big field fill up with water to prepare it for planting. One summer, we were doing that. And then we tore down houses. We were working with other guys who were grown men and didn’t speak English.

  Those guys would do anything to get here and take that job, especially the day laborers. They wake up super early, go to a spot where they know a contractor is going to drive by, and try to pick some of them up for the day. I mean, not an easy existence. So it’s difficult to hear people lambast a specific group of migrant workers. I feel like saying, “Hey, I know I’ve done work with migrant workers and I’ll tell you what, that would be difficult to say, ‘This is what I’m going to do my whole life.’ I’ll tell you that right now.

  TK: What did your mother do?

  SP: After the divorce was over, she moved to a new state, and she spent years starting up a new business, a dining guide in a big city. Put her own money in it. There was a lot of driving, over an hour every morning to get to the city, then appointments all day. She was a single mom at the time, so she had to get back, get the kids, take care of us. But she was doing well. She had advertising contracts lined up and after years of work, was just about ready to launch, when the dot-com bubble burst and she lost it all.

  Almost overnight, the only thing really left of the business was a fax machine in our apartment. Before, companies would be faxing her signed agreements, letters of intent, and so on. All the marketing calls would come back to that number hanging on the fax machine. So basically, anything connected with her company was coming back there.

  For a long time, she would just lay on the couch, locked in depression. The fax would go off from time to time and she wouldn’t react, she would lie there in a daze. Looking back on it, it must have been painful every time that fricking thing rang, a reminder of the thing you failed at. Just imagine, you’re so close to making it, and then an exogenous shock prevents you from achieving the dream you’d set out for yourself.

  She could’ve just let that beat her down forever. But she eventually got her shit together and was like, “Hey, I need to retool myself.” She went back to school, got a master’s degree, started teaching. My dad, on the other hand, didn’t do that. He never got over what happened.

  TK: This was the concrete company?

  SP: Right. In the 2000s, he was a superintendent at a concrete company that was very successful for a time, employed hundreds of people. I worked there, too, when I was 19. Again, there were a lot of migrant laborers doing this work too, guys who were supporting families back in Mexico. And 2008 hit, another financial collapse.

  There was such explosive growth, and all of the sudden, it was gone. My father lost his job, his house, and he just got worse and worse and worse. He’s got heart problems now, he’s on a bunch of medication. I just expect to get the call any day that he’s going to be dead. He’s just circling the drain. He’s been in and out of the hospital. He doesn’t take care of himself.

  One of the people who answered my post on Reddit talked about how he felt the crash basically robbed his father from him. That’s how it was. We used to talk five times a day, man. Talking to my dad was the most reliable thing that I could do. I talked to him and my brother four or five times a day for fifteen, twenty years. And then over the past probably four or five years, it was less and less. I think I went a full year without talking to him. He didn’t know I got married. He hasn’t seen my second daughter.

  I’ll tell you, when you look in the eyes of a grown man who has no options to support his kids, that’s devastating. I decided when I first saw that in him, I would sweat blood to make sure that never happened to my family.

  I put myself through school, going for the cheapest state tuition, and did the same for the MBA program. I was able to take out a loan and I was able to start the program a semester early, while I was still finishing undergrad, so I could economize the cost. And then I went straight through both summers and got it done really quickly, overloading my class schedule because I didn’t want to take out more loans. So I got it done for $25,000, and I was working full-time too, while I was there. Later, I was able to save up enough to get it completely discharged, though in order to do that, I had to have five roommates for four years.

  TK: Why business school, why finance?

  SP: By the time I was getting ready to go to college, my brother had already been in the Marine Corps for a few years and had already done two tours in Iraq, and it was the worst time to be there. He saw a lot of carnage. And he was saying, “You know, if you still want to be in the military, it’s a much better route if you go to college first, from what I’ve seen.” And every single person I’d ever done manual labor jobs with had said, if they could do one thing differently, they would have gone to college. They’d be on the job and put a hand on my shoulder and say, “You don’t want to have to do this when you’re 50.” Like I’m 50, I’m hanging drywall. It’s my company, but it would be nice to not have to do it.

  Anyway, I got into being a Wall Street trader when I was an undergrad. I liked the high energy. I also knew a bunch of people from my home city that grew up to be traders. (Laughs). Some of them were really dumb and some of them didn’t even finish high school, but they knew a guy who was on the floor like (mimics a Chicago accent) “And my boy Tony, he hooked me up with a jawb on the exchange…”

  But they made a lot of money. I thought, “This is ridiculous. I’m more intelligent than that guy.” He could barely do math, but he’s trading options. Still, I liked hanging out with those people. Some of them were not real class acts, but… I liked the idea that it was challenging. I just wanted to study everything I could. I knew I was going to be competing with people that had way better educational pedigrees than I did, and I needed every single edge that I could get just to get myself in the door.

  I got really interested in the question, “what were the things you look for when a company starts going into financial dire straits?” That led me down the path of finding good books that had been written in the past about major bankruptcies and collapses, books like When Genius Failed, Predator’s Ball, and A Colossal Failure of Common Sense. I was studying companies like Long Term Capital Management, which got bailed out in the late nineties.

  At the time, it was just interesting to see how, when people did their homework and took a big risk on some distressed debt, they could make a gigantic payday in one day. And I was like, man, that would be exhilarating. I even saw the original movie Wall Street and I was like, “That’s badass. Even though these guys are criminals, just the idea of being on a trading floor seems really cool.”

  Now I look back at that and think, if I’d become that person, I’d be sitting in the place of some of these hedge funds who do this all day. They go out and find companies that are going to be struggling at a specific date and time, and that’s when they start buying massive put spreads, shorting the piss out of the stock, putting it in the dirt, ensuring it will fail. I look back on it now, and it’s like, “Goddamn, that would have really sucked.” They’re two very different paths I was going down. I’m glad I chose this one.

  TK: What was the other path?

  SP: Look, I originally did all that reading because I was looking for insights on how to make money. But studying firms like Drexel Burnham Lambert, Long Term Capital Management, Lehman Brothers, I learned two other things.

  One is that these guys get bailed out. The second is that they never go to jail, even when they’re dead to rights. I think the two people that got prosecuted first after the financial crisis were the two Bear Stearns hedge fund managers. The implosion of those two hedge funds was the canary in the coal mine, because that was the death knell for the coming crash.

  These two guys had emails back and forth, talking about how fraudulent their products were. Talking about how they’re totally screwing over clients, in writing! And not one of them went to jail. And who did they go after at that time? Bernie Madoff. He was the one person who went to jail. Why did he get prosecuted? Because he stole from the rich!

  TK: They even made a movie about it, starring Robert DeNiro…

  SP: Exactly! How come they didn’t make any movies about these other horrible people that profited off of the destruction of the economy? The people who ran Countrywide, or the people who were working at the ratings agencies, who knew the things they were rating were fraudulent? Even just down at the mortgage origination level. They made tons of money, and not one of those people went to jail.

  Anyway, I didn’t go that route. After I got my MBA, I joined the military.

  TK: Why?

  SP: My brother at the time had already been out of the Marines for a while. He was working for a hedge fund out in California. And his boss was very, very old, in his nineties. I thought, “Man, you can literally die at your desk at 100 years old in finance, but there’s only a short window that you can serve the nation, and once that, once that door closes, it never opens again.” So I joined, went to Officer Candidate School, got in, went to other countries, saw a lot of very, very poor places, which gave me some perspective. Long story short, I ended up working as a software engineer.

  TK: How did you get into online investing? 

  SP: I was still keeping up with all my financial periodicals, because I knew one day I was going to step back into that world. I was able to start making stock picks for myself. The first real investment I made was in Netflix when it was still double digits. I made a brokerage account with my bank and threw some money in there and started going at it.

  The industry was really changing. Robinhood’s slogan is “Democratizing Finance,” but really it’s the computer science industry democratizing finance, because all those tools that used to be proprietary are free now, included in your trading app.

  If you make a TD Ameritrade account, you can run, think or swim. It’s like a mini Bloomberg terminal. You’re not going to get the same richness of data, but you’re going to get a significant amount that you normally wouldn’t ten years ago. And in places like wallstreetbets, I was meeting people who clearly used to or still did work on Wall Street, who would teach you, for free, how to do things like recognize distressed companies, research their debt covenants, look up public data about who was invested in what, and so on.

  There’s one guy, he goes by the name fuzzy blankeet — it’s surreal on wallstreetbets, you discuss such serious topics with such ridiculously named people — who was teaching us how to be distressed debt buyers. These are really intelligent people, just giving away knowledge.

  A lot of the tools we have now, it used to be only people working at the top hedge funds on Wall Street had access to that information. So a lot of the barriers had collapsed. But the system is still skewed, which I started to see more clearly when the pandemic hit.

  TK: How so?

  I remember last March, just as the pandemic was taking hold, I was watching CNBC, and Bill Ackman, the big hedge fund guy, basically saying it’s the end of the American economy. He’s saying, “Shutdown is inevitable,” and calling for everything to be closed except essential services:

  At the time, I was wrapped up in the doom, on the side of, “I don’t think we’re prepared for what’s coming.” Because I was watching the videos coming out of China and thinking, “There are people just passing out. That’s not normal. I think that’s bad.” I saw a video of somebody being welded into his apartment, and I again, I thought, that seems bad. Seeing Ackman on TV, I was like, “I think he’s right.”

  As time went on, though, that moment bothered me. I thought, “That fuck, he’s causing the panic.”

  I guarantee a lot of people were like, “Bill Ackman’s a smart dude. He’s a lot more successful investor than I am, and he says shit’s about to hit the fan. I better start buying some protection. I don’t know, short really volatile, high flying stocks, and maybe buy a lot of put spreads.” But then we all know what happened after that.

  TK: That broadcast was March 18th, so the $2 trillion bailout was announced a week after. The market had been plummeting straight down, but it bounced right back up and kept going.

  SP: It’s the COVID-19 sell-off and pump. It’s what these guys do. It really does feel as though CNBC is a participant in market manipulation for the rich. These hedge fund guys go on air and it’s like they’re trying to spook the herd in the direction of their trades. They tell everyone to get out when they’re short, and once all the meat is all off the bone, they go long, just in time for the recovery. They get to call the top and the bottom of the market. It’s totally fucked.

  The bailout and the pandemic just exposed how there are different sets of rules, not just for different types of investors, but different types of businesses. Your favorite sandwich shop? Closed. If you’ve got 200 of those sandwich shops? Open.

  If you had sufficient capital to lobby whatever your government is, you could get an exemption, but if you were a small-time business owner, you were out of luck, and that just made no sense to me. I was like, “We’re just making this up on the fly.”

  TK: When did you first pay attention to GameStop?

  SP: I remember people posting about the GameStop potential short squeeze last summer. I definitely didn’t catch any of the attention earlier than that, but I didn’t get the trade. I’ll be honest with you. I saw the potential there. I really did, but I was like, there’s just so much going against you on that. And at the same time, the business needs to make money and they’re in debt and they’re not making money.

  But at some point, once this all started, I started to think about it. We’re in a pandemic, and there are all these people who couldn’t work all year. Or they’re small businesses that don’t have the political impact. They’re going to take the loss. And in the middle of all this misery, you have a group of the most cancerous rent-seekers on earth, aligning to destroy this company GameStop, because they decided it shouldn’t exist anymore.

  And it was GameStop! It’s such a visceral symbol for people in my generation. Even for me, in all those bad times growing up, it was always a nice memory just to go to a strip mall, go in the store, check out a game or two. I like GameStop. Everyone remembers going to GameStop. It’s part of what made it such an obvious rallying cry.

  That was it for me. I found myself thinking, I didn’t care if I lost every last dollar doing it, I was going to put it on GameStop, just to see them panic for once. Even if for just one moment they have to think about how they’re going to make their payments for their Manhattan apartments, that’s worth it. They’re playing these games while there are people out there who can’t afford Christmas presents for their kids, can’t afford food. What are these families supposed to do?

  Meanwhile those guys at the hedge funds, they’re not sharing that fear. Why should they? They’re going to get bailed out anyway.

  TK: One criticism of the GME traders is that while there are billion-dollar shorts losing on the other side, there are also big money managers on the long side, essentially using what some call “recreational” day-traders as camouflage. What do you say to that?

  There are definitely some high net worth individuals in wallstreetbets, and they were probably making good money early on, incidentally getting some good research done for free and getting in on some trades early. But there are a lot of small-time investors in there, too. The forum is so big, there’s probably a healthy bell curve of every demographic in there now. To say that the forum is made up of people who are just sitting in the basement, and don’t really have anything to lose, that’s not right. A lot of people may not care about the money not because they have too much, but too little. It may be their stimulus check, and they’re saying, “Well, I don’t have anything anyway. This was my only way to maybe make something, but I’d rather send a message with it.”

  TK: What’s Robinhood’s role?

  SP: Imagine that Wall Street is a big building, Robinhood is basically letting you into the lobby. The barrier to entry to buying and trading and stocks and options with apps like Robinhood really is very low. What we’ve discovered in the last ten days, though, is that the pen they built for us does not scale well. Big shocker!

  It’s ironic, for a brokerage that’s primarily run by software engineers, that they seem never to have thought about the edge case of millions of people transferring in thousands of dollars in one day, and all buying the same security. I don’t think that they really thought about, “Hey, what if this happens?”

  TK: GameStop crested last Thursday, January 28th, when Robinhood and other platforms began restricting trades in GME and other stocks. Robinhood obviously makes its money selling its “order flow” to a major high-frequency trader, Citadel, which was likely also the firm that made capital calls on Robinhood during the GME frenzy.

  A lot of Reddit investors believe Citadel and its billionaire CEO Ken Griffin used those collateral calls to pressure Robinhood into restricting trading in GME. Some press analysts think that explanation is conspiratorial. What’s your take?

  SP: Whether or not they were pressured to kill the rally doesn’t matter. The effect was the same. Robinhood’s restriction killed the rally, a hundred percent. That was the only thing that gave all the firms that had short interests a chance to try to recover. Now, the thing that is really insidious is some retail brokerages that locked out their retail traders, if you had an account with a certain minimum amount of money in it, you could call the customer service line that was reserved for your level of account and they would turn trading back on.

  So two people using the same trading app could have different market access. It’s just like we were talking about before. When the GameStop thing started, the shorts were like, “Hey, let’s just kill this business because it’s a pandemic, they’re going to close anyway, let’s just destroy it.” And then, once we started kicking it in the balls, they changed the game and killed the trade. It was like, “Okay, of course, of course.”

  As for the conspiracy charge, it makes me laugh. JP Morgan Chase last fall settled for $920 million or whatever in a case involving spoofing in the metals markets. Before that, they would have said, there’s no such thing as spoofing! Same with manipulation of LIBOR. Once upon a time, if you accused the banks of manipulating LIBOR, they’d say, “That’s a conspiracy theory.” Then there were settlements and now everyone knows it happened. With these people, it’s always a conspiracy until it isn’t. Once they’re found out, it’s like, “Oh, you caught us. You’re right. It wasn’t a conspiracy. But this other thing, that’s a conspiracy. That’s not happening.”

  TK: What was your reaction to the press coverage of GameStop?

  SP: The majority of the media that I’ve seen on WallStreetBets is just incorrect. The stuff that came out really early was trying to label it as a far right-ish type movement, and they got smacked down really hard on that because that’s the opposite of what happens in there. The forum is not political at all. If you post any political bullshit, that is the fastest way to get banned. There’s literally a rule, “No political bullshit.” Nobody wants to hear it. It’s strictly to talk about trades.

  TK: What’s the future of wallstreetbets?

  SP: I’m fearful of what could happen. The forum is big now. It’s never going to be ignored again. There are two opposing forces. You have big businesses that are going to try to channel this movement to benefit themselves. But at the same time, you’ve got a lot of long-time people who’ve been on there who can sniff out a fraud pretty quickly.

  It’s going to be a cat and mouse game. We already see it happening. The biggest one was in silver. Silver is often used as a way for large owners of silver, like in the SLVETF, to cover losses elsewhere. Last week I saw zero advertisements to buy Gamestop stock. Over the weekend, I saw countless news articles and advertisements all over to buy physical bullion. They’re saying, “Silver is going to get pumped. The Reddit crowd is turning to silver.”

  TK: Yahoo! had “Silver Squeeze: How to join the Reddit Bandwagon.” CNBC had, “Is Silver the Next GameStop?” It was like wallstreetbets went Hollywood.

  SP: I’m like, “I’ve got to call bullshit on this.” Now, if a large institutional owner of an asset was to, I don’t know, take out a bunch of ads and hire some people to post on wallstreetbets and maybe hire some botnets through a cut-out, would that be legal? Sounds like a pump and dump to me, but it also sounds difficult to prove. I’m not saying it’s happened. I’m saying it’s odd, and it’s very possible.

  There’s going to be a constant battle to direct the Sauron-like gaze of this board now. It’s going to be very difficult to get ahead of that, just like it’s difficult to know what the number one meme is for next month.

  TK: Was a message sent in the GameStop story, and if so, what was it?

  You had a leaderless group rise up and use whatever market power they had, whether it was buying a hundred thousand shares, or one. Some very established traders who trade for themselves frequent those boards. And then you had people who saw the message, they saw the Batman symbol and they rallied to that. You know how many messages I saw in the thread, of people just lining up? It meant something to them. They got to buy a fractional share of the hero’s journey.

  But the trade was destroyed. Whether or not that was intentional is not for me to say. All I can say is what happened. Retail brokerages all of a sudden stopped allowing their clients to trade, unless they were of a certain net worth. Banks could do it. Hedge funds could keep doing it. They could still be in the trade. But you and I could not. We could only sell. We could only do the one thing that they would need us to do, to get themselves out of the quagmire. And it wasn’t about price at that point. It was about control of physical shares that would allow you to cover.

  So yeah, a message got sent. But one was also received. They basically said, “We understand the message you’re sending. And here’s the message we’re sending back.”

  But it was worth it.

  Tyler Durden
  Sat, 02/06/2021 – 19:46

• Raskin: Trump's Decision Not To Testify May Be Cited As Evidence Of His Guilt
  Raskin: Trump’s Decision Not To Testify May Be Cited As Evidence Of His Guilt

  Authored by Jonathan Turley,

  Over the last four years, we have seen an alarming trend of law professors and legal experts discarding constitutional and due process commitments to support theories for the prosecution or impeachment of Donald Trump or his family.  Legal experts who long defended criminal defense rights have suddenly become advocates of the most sweeping interpretations of criminal or constitutional provisions while discarding basic due process  and fairness concerns.   Even theories that have been clearly rejected by the Supreme Court have been claimed to be valid in columns. No principle seems inviolate when it stands in the way of a Trump prosecution.

  Yet, the statement of House manager Rep. Jamie Raskin, D-Md., this week was breathtaking.

  A former law professor, Raskin declared that the decision of Trump not to testify in the Senate could be cited or used by House managers as an inference of his guilt — a statement that contradicts not just our constitutional principles but centuries of legal writing.

  

  Presidents have historically not testified at impeachment trials.  One reason is that, until now, only sitting presidents have been impeached and presidents balked at the prospect of being examined as head of the Executive Branch by the Legislative Branch. Moreover, it was likely viewed as undignified and frankly too risky.  Indeed, most defense attorneys routinely discourage their clients from testifying in actual criminal cases because the risks outweigh any benefits. Finally, Trump is arguing that this trial is unconstitutional and thus he would be even less likely to depart from tradition and appear as a witness.

  Despite the historical precedent for presidents not testifying, Raskin made an extraordinary and chilling declaration on behalf of the House of Representatives.  He wrote in a letter to Trump that:

  “If you decline this invitation, we reserve any and all rights, including the right to establish at trial that your refusal to testify supports a strong adverse inference regarding your actions (and inaction) on January 6, 2021.”

  Raskin justified his position by noting that Trump “denied many factual allegations set forth in the article of impeachment.” Thus, he insisted Trump needed to testify or his silence is evidence of guilt. Under this theory, any response other than conceding the allegations would trigger this response and allow the House to use the silence of the accused as an inference of guilt.

  The statement conflicts with one of the most precious and revered principles in American law that a refusal to testify should not be used against an accused party.

  The statement also highlighted the fact that the House has done nothing to lock in testimony of those who could shed light on Trump’s intent.  After using a “snap impeachment,” the House let weeks pass without any effort to call any of the roughly dozen witnesses who could testify on Trump’s statements and conduct in the White House. Many of those witnesses have already given public interviews.

  Of course, the relative passivity of the House simply shows a lack of effort to actually win this case.  The Raskin statement is far more disturbing. The Fifth Amendment embodies this touchstone of American law in declaring that “[n]o person . . . shall be compelled in any criminal case to be a witness against himself.”  It was a rejection of the type of abuses associated with the infamous Star Chamber in Great Britain. As the Supreme Court declared in 1964, it is the embodiment of “many of our fundamental values and most noble aspirations.”  Murphy v. Waterfront Commission, 378 U.S. 52, 55 (1964).

  Central to this right is the added protection that the silence of an accused cannot be used against him in the way suggested by Raskin. There was a time when members of Congress not only respected this rule but fought to amplify it. For example, in 1878, Congress was enacting a law that addressed testimonial rights but expressly stated that the failure of an accused to request to testify “shall not create any presumption against him.”

  The Supreme Court has been adamant that the type of inference sought by Raskin is abhorrent and abusive in courts of law. In Griffin v. California, 380 U.S. 609 (1964), the Court reviewed a California rule of evidence which permitted adverse comment on a defendant’s failure to testify.  The California rule sounded strikingly like Raskin’s position and mandated that a defendant’s “failure to explain or to deny by his testimony any evidence or facts in the case against him may be commented upon by the court and by counsel, and may be considered by the court or the jury.”  The Court rejected such references or reliance by prosecutors as unconstitutional.

  Later in Carter v. Kentucky, the Supreme Court held that “the privilege to remain silent is of a very different order of importance . ..from the ‘mere etiquette of trials and …the formalities and minutiae of procedure.’” It goes to the most fundamental principles of justice in our legal system.

  In the past, when such concerns have been raised, members and pundits have reached for the “anything goes” theory of impeachment. Such principles are dismissed as relevant in the purely “political” process of impeachment. I have long rejected this view. This is not a political exercise. It is a constitutional exercise. These senators do not take the take to act as politicians but to act as constitutional actors in compliance with the standards and procedures laid out for impeachments. It would make this process a mockery if, in claiming to uphold constitutional values, members like Raskin destroy the very foundations of constitutional rights.

  Yet, Harvard Professor Laurence Tribe (who has routinely favored any interpretation that disfavors Trump) declared Raskin correct promising to use a decision not to testify as evidence of guilt: “If Mr. Trump declines the chance to clear his name by showing up and explaining under oath why his conduct on January 6 didn’t make him responsible for the lethal insurrection that day, it’ll be on him. He can’t have it both ways.” No, it is on us. The House cannot have it both ways in declaring that it is upholding constitutional values while gutting them.

  It is true that this is not a criminal trial. It is a constitutional trial. As such, the Senate should try an accused according to our highest traditions and values.  That includes respecting the right to remain silent and not to have “inferences” drawn from the fact that (like prior presidents) Trump will not be present at the trial or give testimony.

  This is not the first time that reason has been left a stranger in our age of rage. There appears no price too great to pay to impeach or prosecute Trump. Now, the House is arguing against one of the very touchstones of our constitutional system and legal experts are silent.  If everything is now politics, this trial is little more than a raw partisanship cloaked in constitutional pretense.

  Tyler Durden
  Sat, 02/06/2021 – 19:30

• 115 Inmates Spark Fires In Downtown St. Louis Jail Over COVID Concerns 
  115 Inmates Spark Fires In Downtown St. Louis Jail Over COVID Concerns 

  More than 100 hundred inmates overpowered correction officers at the City Justice Center in downtown St. Louis early Saturday morning. They gained control of one section of the jail for hours. 

  About 115 detainees commandeered the fourth floor of the jail around 0230 ET, sparking fires, smashing windows, clogging toilets, and flooding floors, according to the St. Louis Post-Dispatch. It was the third disturbance at the prison in recent months.

  Law enforcement officers regained control of the jail around 1030 ET, Jacob Long, spokesman for Mayor Lyda Krewson, told the St. Louis Post-Dispatch, adding that all inmates are back in custody. 

  Jimmie Edwards, the city’s Department of Public Safety director, told reporters that one corrections office was injured and taken to a local hospital after a melee with inmates. 

  Edwards said there’s been an ongoing issue with the prison’s locks. Though he didn’t mention if the faulty locks were the trigger of today’s chaos. 

  Long said 115 detainees on the fourth-floor set fires, smashed windows, flooded floors, and clogged toilets. Around 0630 ET, inmates shattered windows to the building’s exterior – many of them could be seen with orange and yellow jumpsuits holding signs. 

  

  More scenes of the chaos. 

  

  Doyle Murphy, an editor of local newspaper Riverfront Times, captured video of the prisoners throwing items out broken windows in front of the jail. He said, “Inmates at St. Louis Justice Center have taken over at least part of the jail. There have been protests over COVID-19 dangers inside. Not sure if this is part of that.” 

  Inmates at St. Louis Justice Center have taken over at least part of the jail. There have been protests over COVID-19 dangers inside. Not sure if this is part of that. pic.twitter.com/roSCtkIHSK

  — Doyle Murphy (@DoyleMurphy) February 6, 2021

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  Long said the situation was a “very dangerous disturbance” but has since been resolved. At the time of the riot, there were 633 people in custody at the jail. 

  The Marshall Project examines COVID-19 infections in state and federal prisons in a separate report. Between Nov. 10 and Dec. 22, there was a noticeable rise in infections at jails. 

  

  This is the third riot at the facility in a matter of months as inmates “had expressed concern about unsafe conditions amid the coronavirus pandemic,” said St. Louis Post-Dispatch.

  Tyler Durden
  Sat, 02/06/2021 – 19:00

• Goldman: Does Valuation Still Matter?
  Goldman: Does Valuation Still Matter?

  One week ago, when traders were still enthralled by the ongoing marketwide short squeeze, which started off as an isolated reddit attempt to (successfully) punish GME shorts such as Melvin Capital, and which cascaded into a widespread liquidation of most popular names as a wave of VaR shocks hit countless hedge funds which had no choice but to rapidly degross and puke their most popular, liquid and profitable positions as their shorts spiked unleashing industrywide margin calls and leading to the biggest alpha drawdown in history…

  

  … we summarized recent events in a simple and succinct fashion: “What it all boils down to: the market has been broken since 2009, but broken in moderation and everyone is happy, the rich get richer, etc. But if someone (WSB, whoever) take this breakage to its absurd extreme (where stock prices no longer reflect anything), everything breaks”

  What it all boils down to: the market has been broken since 2009, but broken in moderation and everyone is happy, the rich get richer, etc.

  But if someone (WSB, whoever) take this breakage to its absurd extreme (where stock prices no longer reflect anything), everything breaks

  — zerohedge (@zerohedge) January 31, 2021

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  And for a few seconds… everything did break, and only the rapid intervention of regulators/DTCC forcing Robinhood to effectively shutdown trading is what gave the system on full tilt the critical time it needed to take a breath force a reset and reverse the momentum.

  Now, in a post-mortem to recent events, Goldman – which last week warned that if the squeeze isn’t halted, the consequences for market could be dire – wrote a somewhat lengthier take on what happened but its conclusion is similar: the price formation mechanism – and the fundamental investing process itself – broke when millions of retail investors (and a handful of very wily hedge fund investors) plowed into a the most shorted stocks, leading to an unprecedented disconnect between price and value.

  It certainly explains why Goldman’s David Kostin starts off with what may well be the best quote to describe recent events:

  More than a century ago and written in a completely different context, Oscar Wilde, the Irish playwright, penned a perfect description of the social psychology underpinning a short squeeze. In Lady Windermere’s Fan, one character asks, “What is a cynic?” The friend responds, “A man who knows the price of everything, and the value of nothing.” The dialogue continues, and the original inquirer states, “And a sentimentalist is a man who sees an absurd value in everything, and doesn’t know the market price of a single thing.”

  Needless to say, a lot of cynics and sentimentalists were unleashed in the past two weeks.

  As Kostin recaps recent events, “every financial market participant knows the recent sequence of events. An extraordinarily high short interest position in a few small cap stocks, most prominently GameStop (GME), was stampeded by a group of social media inspired retail investors. A flurry of odd-lot cash orders and out-of-the-money call options supercharged the stock price and forced short-covering at higher and higher share prices. The situation was compounded because the retail buy orders were placed with broker-dealers which suspended processing trade orders in order to meet the minimum capital requirements of the Depository Trust & Clearing Corp (DTCC). This sequence of events happened within just a few days and caused an epic short squeeze. Billions of dollars were made and lost as share prices rocketed higher and then collapsed within the span of a week.”

  But so what: it’s not like this was the first time something like this happened: after all back in Sept 2008 when the world was crashing, a similar short squeeze made Volkswagen the world’s most valuable company… if only for a few hours.

  Well, it appears this time was different because unlike back then, the current squeeze happened in a context where virtually everyone was forced to reassess the core principle and tenets of capital markets, or as Kostin poetically puts it:

  The market implications of the stock price swings are both very significant and completely inconsequential.

  Expounding on this claim, the Goldman chief market strategist says that “those two assessments are not in conflict.” Laying out the case first for why the marketwide short squeeze was a tempest in a teapot, to use the parlance of Jamie Dimon, Kostin says that while what happened was although certainly dramatic, “the wild price action of a few small-cap stocks was dwarfed by the rest of the companies in the market both in terms of scale of business activity and equity capitalization. Corporate fundamentals have been much stronger than expected. During the past month, upward estimate revisions for full-year 2021 EPS have occurred across all 11 sectors. Last week, S&P 500 fell by 3.6% from a then-record high. This week, it rebounded to establish a new high and is up 3% YTD.”

  Ok fine, but good luck telling Melvin Capital (or Ken Griffin, or Steve Cohen for that matter) that what happened was “completely inconsequential.” They are more likely to focus on the “yes but” part of Kostin’s assessment, namely that… 

  The disorderly sequence of events has implications for market structure and oversight. The House Financial Services Committee has scheduled hearings on February 18th to explore recent market volatility in a session titled: “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide.” Topics likely to be addressed include payment for order flow, capitalization of broker-dealers, rejection of customer trade orders, trade settlement, mechanics of price-vs. liquidity-driven short-covering, and the gamification of retail investing.

  Going back to the actual squeeze, Goldman writes that several aspects of the trading in GME shares are worth noting.

  First, from a positioning perspective, for more than a year the short interest in GME exceeded 100% of the float of the company, and it reached 140% in January, a “situation which is highly unusual” because during the last 10 years, Goldman has found only 15 instances when the short interest outstanding exceeded 100% of a company’s float, and as the bank explains, perhaps for the cheap seats, “extremely elevated short interest is a pre-condition if a major short squeeze is going to occur” (we wonder if Goldman, or WSB for that matter, has ever looked at the short interest in the XRT ETF)

  

  Second, and going back to the quote above, Kostin notes that “the acerbic lines from Wilde’s 1892 play perfectly capture the situation: The entire episode was all about price, and nothing about valuation” as “social media commentary typically referenced price action with lofty targets sometimes illustrated with rocket ship emojis. We almost never read a comment about valuation because the rally implied an astronomical P/E multiple.” Great point David – now maybe you can extrapolate a little beyond what you just said, and tell your clients some more about how the trillions in liquidity sloshing around market have made price and valuations so disonnected even you are forced to only showing the hilariously wrong Fed model as the only justification to keep buying stonks so they can hit your year-end price target of 4,300. Yeah, didn’t think so…

  Still, that didn’t stop the Goldman strategist from decomposing Oscar Wilde’s quote into its components as they applied to GME:

  • The price of everything. GME shares traded at an average price of $13.50 during 2018. The stock then fell sharply and between mid-2019 and mid-2020 (a period stretching from well before through the bottom of the Covidcrisis) the stock traded sideways at $5 per share. A 4Q rally pushed the shares to $19 at year-end. The explosion in stock price since the start of 2021 has been breathtaking. On Jan 13th the stock hit $30, rose to $40 the next day, and had jumped to $65 by Jan 22. The progression during the five days from Jan 25 to Jan 29 was epic: $77, $148, $348, $193, and the stock ended the month at $325, up 1,600% since the start of the year. However, this week the shares have plunged by 80% to $64.

  

  • The value of nothing. Long before the pandemic, revenues for GME fell by 22% from 2018 to 2019 followed by an additional 20% drop last year. The plunge in earnings has been even more dramatic. In 2019 –pre-pandemic –EPS fell by 92%. In 2020, GME posted a loss (-$2.18) and analysts expect a loss in 2021 (-$0.17). Consensus projects GME will return to profitability in 2022. However, the forecast EPS in 2022 (+$1.35) is only half the realized EPS in 2018 (+$2.70) back when the shares traded at an average price of $13.50 (low of $11; high of $17) (see Exhibit 3).

  

  Next, the Goldman chief strategist stubbornly keeps trying to make the point that what happened was an aberration of efficient markets and a “completely inconsequential” impossibility from a fundamental standpoint, as if anyone would even dream of arguing that GME would ever trade above $500 on its own merits…

  The absurdity of the January spike in GME share price becomes readily apparent when viewed through the lens of implied valuation. The implied P/E on projected 2022 EPS two years into the future soared from 14x at year-end 2020 to more than 250x at the peak on Jan 27, before retreating to the current P/E of 42x. For context, the shares of Tesla (TSLA), a stock that has both skeptics and cheerleaders around its valuation, but is widely viewed to have strong growth prospects –consensus forecasts a doubling in sales and a quadrupling of EPS between 2020 and 2022 –trades at 140x expected 2022 EPS following its stunning 780% rise last year (just half the percentage gain in GME shares in January 2021). The more mundane S&P 500 index trades at 20x our 2022E EPS of $196.

  … without even for a second stopping to consider that it was the Federal Reserve that made this peak absurdity possible. Why? Because in a market where virtually all valuations are in their 100% percentile…

  

  … and where the thread between price and value is barely present across most “serious” companies which are trading at 100x or even 1000x of future earnings and revenues, all the GME daytrading public did was to sever any pretense of linkages between fundamentals and prices and as a result, quickly took prices to their absurd extreme which in the case of GME meant $513.12 per share early in the morning of Thursday, January 28…

  

  Tyler Durden
  Sat, 02/06/2021 – 18:30

• Democratic Bill To Target Social Media Giants Over Failure To Police Threats
  Democratic Bill To Target Social Media Giants Over Failure To Police Threats

  Democratic Sen. Mark Warner (VA) is set to introduce a bill which would make it easier for social media users to sue tech giants for failing to police posts, photos and videos which threaten abuse, discrimination, harassment, the loss of life or other irreparable harm, according to the Washington Post.

  

  Warner’s bill is the latest attack on Section 230, a decades-old federal rule which shields social media companies from liability over what their users post as long as they don’t act as publishers – an angle Republican lawmakers have used to claim no longer applies due to editorial discrimination and censorship of conservatives.

  Democrats, meanwhile, say Section 230 allows tech companies to skirt responsibility for policing hate speech, election disinformation and other ‘dangerous content’ according to the report.

  Yet, while Republicans seek to strip tech giants of their Section 230 protections, Warner’s bill maintains its core provisions – and would instead open an “easier legal pathway” for users to sue over failures to police content that they claim caused personal harm.

  “How can we continue to give this get-out-of-jail card to these platforms that constantly do nothing to address the foreseeable, obvious and repeated misuse of their products and services to cause harm? That was kind of our operating premise,” said Warner.

  Ultimately, it would be up to a judge to decide the merits of these claims; the bill mostly opens the door for Web users to argue their cases without running as much risk of having them dismissed early. Facebook, Google, Twitter and other social media sites stand to lose these highly coveted federal protections under Warner’s bill only in the case of abusive paid content, such as online advertisements, that seek to defraud or scam customers.

  “You shouldn’t get immunity from this advertising content that’s providing you revenue,” said Warner, who is introducing the measure along with Democratic Sens. Amy Klobuchar (Minn.) and Mazie Hirono (Hawaii). –Washington Post

  Warner’s bill comes after a mob of mostly Trump-supporters ‘stormed’ the US Capitol on Jan. 6 to protest the counting of the Electoral College votes for Joe Biden – many of whom coordinated over social media. And as WaPo frames it, the ordeal raises questions “about the extent to which Facebook, Google and Twitter, and a vast web of lesser-known forums, are properly policing their sites and services.”

  “I’m going to be very interested to see how the industry reacts to this,” said Warner in an interview this week previewing his bill. “It’s going to be where the rubber hits the road. Are they going to pay lip service to reform?”

  The incident has injected fresh urgency into familiar calls to rethink Section 230, which intensified last year amid a flood of proposals from Democrats and Republicans seeking to overhaul or repeal the law. In response, the country’s largest technology companies have sought to tread carefully: Facebook CEO Mark Zuckerberg and his fellow executives have signaled an openness to changing Section 230, but the companies have not endorsed the most sweeping proposals that would hold them accountable for their missteps.

  …

  In seeking to sketch out his proposal, Warner said its passage could have wide-ranging effects: It could allow the survivors in the Rohingya genocide in Myanmar to sue Facebook, for example, because the social network had been slow to take down content that stoked ethnic tensions. –Washington Post

  “If there are going to be victims of platform-enabled human rights violations,” said Warner, adding “that should not be thrown out of court.”

  According to David Brody, a senior fellow for privacy and technology at the Lawyers’ Committee for Civil Rights Under Law, “This bill would make irresponsible big tech companies accountable for the digital pollution they knowingly and willfully produce, while continuing to protect free speech online.”

  Tyler Durden
  Sat, 02/06/2021 – 18:00

• Mike Rowe: Americans Are Realizing "The Price Of Safety Is Devastating"
  Mike Rowe: Americans Are Realizing “The Price Of Safety Is Devastating”

  More than a year after the coronavirus arrived in the United States, American are “starting to understand the importance of balance again,” Mike Rowe told “The Story” Friday.

  

  Fox News’ Michael Quinlan reports on the ‘Dirty Jobs’ host’s reality check for all Americans:

  “Several months ago, New York Gov. Andrew Cuomo said no measure, no matter how draconian, could be deemed unwise if it saves but a single life,” the “Six Degrees with Mike Rowe” host told Martha MacCallum.

  “I got a lot of flak when he said that, because I said, ‘That is a safety-first way of thinking’, and deep down we’re not a safety-first society.”

  “Now we’re starting to see the price of safety is devastating,” Rowe added. 

  “What is happening right now in the energy industry is really the thing that I think we ought to be focused on, because there feels to me, and feels to a lot of people I talk to on a day-to-day basis, like a concerted effort to wage a kind of war against energy. It’s not a war we can win, especially with regard to fossil fuels and all of the jobs that are wrapped up in that industry. I don’t mean to sound like an apologist, but I know of no greater investor in alternative energy than the fossil fuel industry.” 

  MacCallum brought the discussion back to the issue of safety, saying, “We’re a country that was built on risk-taking. We want to take wise risks, we don’t want to be reckless, but that element of being strong and fighting through is something that I think is such an American value.

  “Risk is the only four-letter word that matters,” Rowe agreed.

   “It impacts and informs every decision we make, from driving a car to walking around without a mask or wearing one mask or two masks.”

  “We’re starting to see,” Rowe concluded, “if you elevate the business of staying alive to the very, very top of all things, then the only thing you’ll ever do is stay alive. You won’t go anywhere. You won’t try anything or build anything.”

  Watch the entire interview below:

  https://video.foxnews.com/v/embed.js?id=6229577751001&w=466&h=263Watch the latest video at foxnews.com

  Tyler Durden
  Sat, 02/06/2021 – 17:30

• Russia's "Sputnik V" COVID Vaccine A Surprise Global Hit
  Russia’s “Sputnik V” COVID Vaccine A Surprise Global Hit

  Bloomberg, one of the most implicitly pro-western media outlets in existence, has finally admitted, after months of promoting skepticism, that Russian COVID-19 vaccine trail data published by The Lancet shows that the Kremlin might have a surprise international success. Just days after NYT columnist Thomas Friedman accused President Putin of trusting “what comes out of the ground more than the stuff that might come out of his people’s heads,” Bloomberg reports that 20 countries, including key markets like India and Brazil, are already lining up to buy the vaccine.

  

  Source: Bloomberg

  With an efficacy rate above 90%, Russia’s vaccine, developed by the country’s Gamelaya Institute with support from Russia’s sovereign wealth fund, has been found to be more effective than China’s, which is why several countries – including EU member Hungary, are lining up to buy it.

  At least 20 countries have approved the inoculation for use, including European Union member-state Hungary, while key markets such as Brazil and India are close to authorizing it. Now Russia is setting its sights on the prized EU market as the bloc struggles with its vaccination program amid supply shortages.

  In the global battle to defeat a pandemic that’s claimed 2.3MM lives in little more than a year, the race to obtain vaccines has assumed geopolitical significance as governments seek to emerge from the huge social and economic damage caused by lockdowns imposed to limit the spread of the virus. That’s giving Russia an edge as one of a handful of countries where scientists have produced an effective defense.

  The story quoted the head of the Russian sovereign wealth fund which financed the vaccine project.

  “This is a watershed moment for us,” Kirill Dmitriev, chief executive officer of the state-run Russian Direct Investment Fund, which backed Sputnik V’s development and is in charge of its international roll-out, said in an interview.

  Regardless of the success of the vaccine, Bloomberg adds it won’t do much to change Putin’s reputation in the West.

  Sputnik’s success won’t change hostility toward Putin among Western governments, though it could strengthen Russia’s geopolitical clout in regions such as Latin America, according to Oksana Antonenko, a director at Control Risks consultancy.

  “With this vaccine, it’s proven itself capable of producing something new that’s in demand around the world,” she said.

  Production constraints are the biggest challenge facing all manufacturers as global demand far outpaces supply. Russia, pledging free shots for its 146 million population, began output last year and the vaccine is currently being manufactured in countries including India, South Korea and Brazil.

  Yet, despite Russia’s supervillain status with the US and Europe, frustration with Putin’s tactics has never stopped the EU from buying Russian energy products.

  Why should it stop them from buying the vaccine?

  Tyler Durden
  Sat, 02/06/2021 – 17:00

• Trump Jr.: "Here's What Comes Next for Our Amazing Movement"
  Trump Jr.: “Here’s What Comes Next for Our Amazing Movement”

  Authored by Mimi Nguyen Ly via The Epoch Times,

  Donald Trump Jr.., the son of former President Donald Trump, said that efforts from the former president and his team to advance the interests of the United States are continuing. He characterized such efforts as “a movement of the people … against the elite.”

  

  In a video on Trump Jr.’s social media accounts, headlined “here’s what comes next for our amazing movement,” he told supporters, “Just want to make sure everyone knows, guys, we are not done yet.”

  https://telegram.org/js/telegram-widget.js?14

  Trump Jr. then shared a recent video clip that showed his father walking off the golf course while saying, “We haven’t finished yet.”

  “He’s actually accurate,” Trump Jr. said of his father’s remarks.

  “The reality is this movement isn’t over. All of the blood, sweat, and tears that you guys have all put into this thing is very much still alive and well. You see that. I mean, this is really a movement of the people, a movement against the establishment, a movement against the elite.”

  He continued:

  “A lot of those things have been brewing for quite some time. And that’s why for me I’m still standing engaged and we’re going to get in there and fight to elect people who really represent the people—people like you who have gone through so much.”

  Trump Jr. said that the former president is still “going to be in that fight.”

  “I know he’s still going to keep going. I know we’re up against a lot, we always have been,” Trump Jr. said, later adding that is father is “going to be in there making sure that we have people who truly represent what America is all about.”

  The former president’s son moved on to speak about how fact checkers on social media appear to be biased against conservatives while lenient toward “the other side.” Drawing from his personal experience, he said that his content is fact checked “even if there’s even a little bit” of irregularity.

  “When I look at things that I put up on my social media that are totally objective or that are satire, one or the other, that [social media content] gets fact checked so that they can use that to knock my platform, to prevent me from getting any kind of reach,” he said. “I see that stuff on a daily basis, I don’t see that on the other side. I don’t see Joe Biden getting fact checked when he said he’s not going to ban fracking, when he bans fracking.”

  He added, “If there’s even a little bit of ambiguity they get the benefit of the doubt, whereas if there’s even a little bit, a modicum, something like I said, subjective, who’s to know what the fact checker’s thinking, but certainly I know what I’m thinking and I can come up with a parameter that makes everything correct but the fact checkers can say that it falls outside of those lines.

  “Joe Biden, not one tweet—as many incorrect ones that they’ve put out—has been fact checked. It’s truly sick,” Trump Jr. expressed.

  He alleged that the Biden administration appeared to have a “China first, America last policy,” accusing the new administration of “crushing jobs” amid the CCP (Chinese Communist Party) virus pandemic.

  “The nonsense never seems to end, but neither will our fight, neither will our resolve, neither will our will to go on. We’re going to keep pushing for the American people and make sure our kids grow up in a country that we all recognize and love,” he said.

  Trump recently opened an “Office of the Former President” that seeks to advance the interests of the United States and carry on the agenda of his administration.

  

  President Donald Trump boards Air Force One at Valley International Airport after visiting the U.S.-Mexico border wall, in Harlingen, Texas, on Jan. 12, 2021. (Reuters/Carlos Barria)

  Jason Miller, a campaign adviser, said in January that Trump would be involved in the 2022 midterms with the immediate focus being to help Republicans win back both chambers of Congress.

  When Trump left Washington for Florida on Jan. 20, he told supporters that he and his team would “be back in some form.”

  “We love you. We will be back in some form,” he said at the time. “I will always fight for you. I will always be watching. I will be listening.”

  Trump on Friday appeared to have made his first social media post since leaving the White House. The post showed a letter from Trump’s lawyers to Rep. Jamie Raskin (D-Md.), the House of Representatives’ lead impeachment manager, saying that they reject attempts to have Trump testify in his upcoming impeachment trial.

  House Democrats impeached Trump on a single charge that alleges that he incited a mob that breached the Capitol on Jan. 6. The Democrats were joined by 10 Republicans.

  This is the first time in U.S. history that a president has been impeached twice. It is also the first time a former president faces an impeachment trial after leaving office. In a trial memorandum, Trump attorneys denied the allegations and challenged the constitutionality of trying Trump after he had left office.

  Tyler Durden
  Sat, 02/06/2021 – 16:30

• Americans Ditch Citizenship In Record Numbers Amid Pandemic 
  Americans Ditch Citizenship In Record Numbers Amid Pandemic 

  Americans urgently rushed to their embassies to renounce their citizenship last year amid the virus pandemic, social unrest, economic crash, and political firestorms.

  Americans Overseas said a record 6,705 Americans gave up their citizenship in 2020, a 260% increase from 2019 when 2,577 renounced their citizenship. 

  Even with consulates closed in the early part of the year because of the virus pandemic, renunciations still managed to nearly triple over the prior year. Before 2020, the highest year on record was 5,411 cases in 2016, ahead of former President Trump winning the 2016 presidential elections. 

  Americans Overseas estimates some 9 million Americans are living abroad. Every three months, the IRS publishes a log of who gave up their citizenship. 

  “This number possibly would have been higher if U.S. Embassies worldwide had not been closed for large parts of the year due to COVID-19 regulations. If this trend continues, 2021 renunciation numbers will be record-breaking,” said Americans Overseas.

  Americans Overseas said, “stimulus checks of $1,200 + $600 are also being used towards the cost of renouncing” citizenship. 

  There has been a growing trend of U.S. citizens expatriating since the pandemic began. We first outlined this disturbing trend in August of last year. 

  The International Tax Blog posted annual expatriations from 1998 to 2020, showing the dramatic rise over the last decade.

  

  From 2010 to 2020, the quarterly expatriations show a more in-depth view of when the virus pandemic began that triggered an increase in expatriations.

  

  Once U.S. embassies open full-time, Americans Overseas expects the number of people renouncing their citizenship will continue to hit records. 

  Tyler Durden
  Sat, 02/06/2021 – 16:00

• Fed Efforts To Stem Rises In Yields Are Back On The Table
  Fed Efforts To Stem Rises In Yields Are Back On The Table

  By Variant Perception

  At the end of last year we discussed the likelihood of the US debt-limit exemption not being extended past the 31st of July as a force that would drive bond yields lower towards the Spring. The Treasury’s account at the Fed, now a considerable $1.6 trillion, would have to be drawn down, and the resulting fall in average maturity of Treasury debt held by the public would put pressure on longer-term bond yields and the yield curve, potentially fuelled by short covering of positions.

  However, we stated the caveat was if the Democrats were able to also win the Senate, something they unexpectedly managed to do. The higher volume of fiscal stimulus now anticipated has helped drive yields higher, and the yield curve steeper in 2021.

  

  The risk for this year is for yields to continue rising and the curve to continue steepening, which raises the likelihood that in the coming months the Fed begins to discuss the possibility of increasing the weighted-average maturity (WAM) of QE purchases, or resurrect the possibility of yield curve control (YCC).

  Treasuries are not as overbought as they were last year, but they are still above “fair value”, and an overshoot to being oversold is conceivable.

  

  The rise in yields since October has been driven by term premium (the residual of nominal yields and long-term Fed rate expectations), given rate expectations are pinned for several years due to Fed forward guidance.

  

  Term premium has been driven ever lower and into negative territory in the years after the GFC. Yet now with rising inflation risks – both cyclical and structural – term premium has been rising to compensate bond holders for this extra risk, with term premium now close to being positive again for the first time since 2018.

  There has been a regime shift in market behavior, starting in September. Until then, ever easier global monetary policy – as captured by the rise in negative-yielding debt outstanding – coincided with falling term premium.

  

  Since September, however, term premium has kept rising despite the amount of negative yielding debt outstanding remaining stable. Bond holders are sensing rising inflation risks, with term premium increasing to compensate them.

  The rise in yields driven by term premium has attendant risks for equity markets that have become dependent on ever falling term premium and yields.

  The equity risk premium (ERP) is about 3% but, adjusted for term premium, it is closer to 2.25%.

  

  Furthermore, in the post-GFC world, equities have become vulnerable to progressively lower levels of yields and the curve.

  The chart below shows that most local peaks in the yield curve have happened just before or around local tops in the S&P. The 2s10s yield curve only had to hit 135bps in late 2017 to precipitate the 11% correction in early 2018.

  

  If yields keep rising and the yield curve keeps steepening, then the Fed will likely emphasize the possibility of an extension to WAM or, if that fails to have a sufficient impact, resurrect talk of yield curve control.

  Last year the Fed discussed the possibility of yield curve control at several FOMC meetings. In June it was discussed, with Jay Powell commenting after the meeting, “whether [yield curve control] would usefully complement our main tools remains an open question.”

  But the Fed has few options to hand if it wants to stem a rise in longer-term yields driven by rising inflation risks, which may unseat the equity market and feed negatively into the real economy. Rates are at zero, and forward guidance is already very strong.

  Direct action on longer-term yields is more likely if yields keep rising. An increase to WAM is likely to be what the Fed tries first. If this is ineffective then yield curve control is firmly back on the agenda.

  Tyler Durden
  Sat, 02/06/2021 – 15:30

• "Mind-Boggling Liquidity": Nobody Is Paying Attention To The $1.1 Trillion Flood About To Hit Markets
  “Mind-Boggling Liquidity”: Nobody Is Paying Attention To The $1.1 Trillion Flood About To Hit Markets

  Amid the ongoing Reddit short squeeze drama which had traders glued to their trading terminals for much of the past two weeks, quite a few may have missed the biggest news of the past week which was the publication of the Treasury’s latest Borrowing forecast, according to which the US expects to borrow just $275BN in the current quarter, down a whopping 75%, or $853 billion, from its November 2020 projection of $1.127 trillion.

  

  The reason for this plunge in funding needs is because the Treasury now expects that it simply won’t need to borrow as much debt as the end-of-March cash balance held in the Treasury General Account (TGA, which is simply the Treasury’s cash balance held at the Fed) would plunge to just $800 billion, down a record $929BN from $1.729 trillion at Dec 31, 2020 (as an aside, the reason why the cash was so high as year end is because the Treasury never got around to actually disbursing the latest stimulus package in December, and it’s also why as the Treasury said “the decrease in privately-held net marketable borrowing is primarily driven by a higher beginning-of-January cash balance as a result of lower-than-assumed expenditures.”)

  In other words, had Trump used up roughly $1 trillion in cash the Treasury had previously budgeted for spending on fiscal stimulus, there would be no surprises today, and instead of the cash balance dropping to $800BN in this quarter, it would have done so last quarter (we discussed this last November in “The 2021 Liquidity Supernova: Step Aside Fed – US Treasury Will Unleash $1.3 Trillion In Liquidity“). Instead, the Treasury now expects the decline in the cash balance this quarter – which is being spent to fund last December’s fiscal stimulus – to be the main driver of funding needs.

  

  It doesn’t end there, because one quarter later, the Treasury expects to borrow just $95BN  – the lowest in two years quarters – and finish the June quarter with a cash balance of only $500BN, a reduction of $300BN for the quarter, the lowest in six quarters and less than 30% of the average cash balance at the end of the latest three quarters ($1.74BN).

  Looking beyond that, we have to go back to an analysis we put together back in November, which cited calculations from Morgan Stanley, according to which unless the debt ceiling deadline – which this year falls on Aug 1, 2021 – is extended well in advance, starting on this date, the US Treasury will not be able to issue any additional debt above and beyond what it needs to cover existing debt obligations. However, what few may be aware of, is that there is a clause written into the law that prohibits the TGA from rising above levels prior to the debt ceiling deadline, which was in 2019.

  This means that based on the 2019 debt ceiling, the Treasury cash will need to fall even more, down to just $200 billion by August 1, and as the chart from MS below shows, depending on the upcoming political fight over the debt ceiling, it could end up being quite a mess.

  

  Said otherwise, the market is about to see a flood of $800BN in extra liquidity over the next 6 weeks, and a total of $1.1 trillion in the next 10 weeks, and then potentially another $300 billion in the subsequent two months. With the TGA cash currently at just under $1.6 trillion, it means that the US Treasury may unlock as much as $1.4 trillion in liquidity over the next 6 months, nearly double the liquidity coming from the Fed over the same time period which will be $720 billion ($120BN x 6 months)!

  This, not too put it lightly, is a huge deal with major market implications (and is why three months ago we said to “buy everything ahead of an unprecedented dollar devaluation orgy” simply based on this analysis).

  First, recall that one of the early (and completely false) reasons cited for the Sept 2019 repo crash, was the modest spike in Treasury cash balances around that time, which also resulted in substantial reserve drain among banks (mostly JPMorgan) which were desperate for more QE. As a result, we almost immediately got “NOT QE” (which, of course, was absolutely QE) and hundreds of billions of reserves were injected into the system by the Fed but not before markets had to tumble to spur the Federal Reserve into acting.

  Well, what is happening now is just the opposite and many, many times bigger, as almost one trillion reserves are about to be injected into the system as cash is drained from the Treasury’s account at the Fed. As we said on Monday, “as Treasury cash balances plunge, banks will see their reserve levels soar by roughly $900 billion this quarter, a move that will lead to significant risk asset upside if previous instances of reserves growth are any indication.”

  Second, there are major implications for the rates market where the recent flood of bill issuance is set to hit a brick wall: as we said on MOnday, the plunge in short-term debt (Bill) issuance – since there will no longer be an urgent need to keep cash balances in the $1+ trillion range – will compress short-term spreads (effective FF through 3M) to zero – or even negative – as there is suddenly a flood of liquidity which could prompt the Fed to engage the fixed-rate borrowing facility or even nudging the IOER higher. Indeed, on Friday we saw just this move as the 2Y TSY dropped to the lowest yield on record.

  

  Those looking for more details can read our November preview of this event (“The 2021 Liquidity Supernova: Step Aside Fed – US Treasury Will Unleash $1.3 Trillion In Liquidity“), or read the below explanation from Larry McDonald, author of The Bear Traps Report, who last week put together an exhaustive summary of the implications of the TGA plunge.

  Again What is the TGA? The US Treasury’s General Account

  The TGA is the mechanism through which Treasury makes payments. It’s the checking account through which the government makes all its payments. This checking account is located at the Federal Reserve Bank of New York. It’s where tax payments are deposited and where funds from Treasury debt auctions are collected. So when the TGA changes, that affects deposits at the Federal Reserve. Ultimately, monetary policy, and Quantitative Easing, is conducted through the TGA. It’s important. Of course, last year the TGA grew. It moved up from its usual range of $300 million/$500 million to, since May, well over $1 trillion. The thought had been that $1 trillion would be released into the economy to stimulate it prior to the November election. Didn’t happen. Congress stalled.

  Go Big or Go Home?

  Enter “Go Big or Go Home” Yellen. What’s she gonna do now? There will be another Covid relief bill of some kind. She’ll be the one cutting the checks through the TGA. This will release money out of the TGA and that means there will be a lot more money in the system. Yellen has $1 trillion burning a hole through her pocket. Additionally, QE is pumping money in at $120 billion clips a month. The combo of a near $1 trillion check and $120 billion monthly QE is the monetary equivalent of eating a banana split after downing an Italian hero sandwich. The market will be stuffed with reserves.

  The money will in part be put into the short end of the curve (already anticipated as we can see in super low LIBOR recently, and low T-Bill yields etc.). Some of the tidal wave of money will find its way into stocks and commodities. Some will find its way to higher prices for goods and services. This is the mirror opposite of 2018/2019 when traders fretted that treasury issuance would overwhelm their desks. This led to higher rates and a higher dollar… The 2019 events drama reached its September 2019 climax when the Fed was forced to introduce QE light. What an embarrassment, after pounding the table for 2 years on the wonders of committed balance sheet REDUCTION, up to $50B a month in Q1 2019, they reversed 2x. First in January 2019 by stopping the expansion, THEN again in September 2019 by restarting QE. Reflation assets (EM, global cyclicals ripped higher from Sept to the start of Covid risk in Feb 2020). Both times the beast inside the market reversed the academics at the Fed. Traders > educators in this case.

  So now there will be mind-boggling liquidity, no vig in the front end, and a weaker dollar to boot. Nothing is guaranteed when it comes to fiat currencies, but fiat currencies are in a race to the bottom. Given the upcoming drawdown of the $1 trillion in the TGA , it’s a race the US is likely to win.

  Recap with more Complexity, Digging Deeper

  One of the questions hanging over asset markets going into 2021 was what would happen to the TGA account. The TGA is the Treasury’s General Account which is how the Treasury makes payments. As we saw last year, the TGA was built up to levels much higher than they traditionally get to. In the past, the level of the TGA has traditionally been between $300-500 billion. Currently, and pretty much since May of last year, the TGA has been over $1 trillion, which is well above its historical norm.

  Going back to Q3 of 2020 there was a lot of speculation that the previous administration would use the massive levels of TGA to get more stimulus into the economy before the elections in November. However, that never really transpired and more covid relief was not passed by congress until after the election.

  This setup the question for Secretary Yellen in terms of how she would manage the TGA, especially into the likelihood of another covid relief bill. The market has gotten its answer as Yellen and the Treasury plan to draw down the TGA balance back to more historical levels. The consequences of this are simple, a lot more reserves in the system. The combination of Fed QE running at $120 billion a month and around a trillion-dollar drawdown in the TGA level means that the levels of reserves in the system will be massive.

  The combination of less short term issuance and massive QE will continue to put pressure on front end yields. This has been seen in very low LIBOR settings, low T-bill yields, and a lower setting in the effective fed funds rate. This pressure on the front end will continue to come especially in light of less front end issuance as the Treasury draws down their TGA balance.

  The market in the first quarter of this year is basically setting up for the inverse of 2018/2019, where funding markets have begun to get stretched. The story in 2018/19 was that Treasury issuance would overwhelm the market and lead to this crowding out of assets as dealers had to move funding to take down treasuries. Now, the problem is flipped. There are so many reserves in the system already from the Fed’s QE, and now it is going to get another increase via the TGA. So if 2018/19 was the story of issuance crowding out the market and putting pressure on funding markets which led to a higher dollar, this rendition could lead to the opposite.

  With that said, we think the correlation between net issuance and asset prices is a bit overstated. Yes, there will be a ton of liquidity on the back of these moves from Treasury, but in terms of marginal drivers, it will matter most in funding markets and the front end of the treasury curve. The other part of this is, this UST funding announcement doesn’t include the impact of whatever $1.9tln will come from the White House and congress.

  Overall: the story is that reserves are everywhere and more are coming. In theory, over the near term, we are setting up for an inverse of 2018/19, which means front-end yields, funding markets etc. will be flushed and liquidity in the system will be at very high levels.

  So while the bullish case is clearly there – after all a $1.1 trillion reserve injection all but assures higher risk prices, the only question is by how much, some – such as JPM’s Nick Panigirtzoglou – have taken on a more hedged position, even though even the JPM admits that a $800BN spike in reserves in just two months would be a major market event…

  • The US Treasury signaled this week a strong intention to reduce its Treasury General Account (TGA) balance at the Fed, from its current level of close to $1.6tr to $500bn by mid-2021.
  • Such a sharp decline would mechanically bolster the liquidity in the US banking system, i.e. the amount of reserves, by $1.1tr by mid year

  … noting that “a halving in the TGA in just under two months would be a significant decline, in particular given the slow conversion of PPP loans to grants thus far with just over $100bn converted between October and mid-January.”

  Yet within this broader tidal wave in reserves, Panigirtzoglou believes that the immediate impact will be relatively modest, and explains why below, first focusing on his view of narrow vs broad liquidity “plumbing” dynamics in the market (which differ substantially from those of repo god Zoltan Pozsar so take them with a giant grain of salt)…

  What are the implications for liquidity from a prospective large reduction in the TGA balance over the coming months? We argued before that liquidity should be split into two different components: 1) narrow or banking sector liquidity, which is created by the injection of excess reserves into the banking system; and 2) broader liquidity or money supply, which is the amount of cash or deposits held by the non-bank sectors of the economy such as households, non-financial corporations and financial intermediaries such as asset managers, pension funds and insurance companies. This broad liquidity is in turn primarily a function of QE related purchases by central banks and bank lending to the real economy by commercial banks. In general, these two components of liquidity are interrelated but are not necessarily mechanically linked and are thus distinct. For example, QE bond purchases, by injecting reserves into the banking system, increase narrow liquidity, but they do not necessarily increase broad money supply. Bond purchases can result in an increase in money supply either directly, e.g. if the central bank buys bonds from a non-bank entity such as a pension fund, this automatically expands the assets (reserves) and liabilities (deposits) of the banking system; or indirectly, when central banks’ quantitative measures induce higher bank lending in the economy.

  … and then expands this analytics framework to how $1.1 trillion in reserves will impact assets:

  A sharp decline in the TGA balance and the resulted $1.1tr increase in the stock of reserves in the US banking system would bolster banking sector liquidity i.e. narrow liquidity but will have no direct implications for broad liquidity, i.e. the cash balances of non-bank investors as captured by money supply. This is because a decline in the TGA balance would have no overall impact on the size of commercial bank’s balance sheet as it would effectively replace government debt with reserves in commercial bank’s asset side and TGA balances with reserves in the Fed’s liability side. These reserves or narrow liquidity reflect the amount of reserves commercial banks have with central banks in excess of what they would need to meet usual liquidity needs. Given that the banking system cannot get rid of reserves in aggregate, these zero yielding reserves become the “hot potato” that banks try to pass to other each until the relative pricing across money market instruments is adjusted enough to remove the incentive for banks to get rid of these reserves. In other words, narrow liquidity tends to reverberate within the money market space and suppress yields at the front end of the yield curve with little implication for the longer end of the yield curve or other asset classes such as equities.

  Needless to say, we completely disagree here and merely bring up the historical record: the Sept 2019 repo crash first spiked a violent market correction and only then did the Fed conceded to inject more liquidity. It stands to reason that the equity response now will be the opposite as we are now facing a mirror image of the liquidity picture in 2019. In any case, going back to the JPM quant:

  But even with the money market space, given the US banking system is already flooded with $3.2tr of reserves, well above a neutral level which we envisage at below $2tr, an additional $1.1tr of reserves would not make much difference in the current conjuncture. Indeed, after the sharp increase in reserves during 1H20, volatility in Fed funds – IOER spreads and SOFR – IOER spreads have already significantly reduced (Figure 2). The additional injection is likely to put some downward pressure on these rates to grind toward the zero lower bound of the Feds funds target range, supporting somewhat demand for shorter-dated Treasuries as banks seek some yield and duration. However, our projections for the global bond supply-demand balance in 2021 already incorporated only a relatively modest deterioration in G4 commercial bank demand from last year’s record levels.

  

  Summarizing JPM’s view, we find it surprisingly restrained in its optimistic assessment…

  In all, we see little impact from a prospective TGA balance reduction on broad liquidity and thus on other asset classes outside money markets or the front end of the UST yield curve. And the actual path of the TGA decline may differ from the Treasury’s forecasts not least as they do not potential additional fiscal stimulus into the projection.

  … then again it comes from the same JPM analyst who has been desperately trying to talk down bitcoin for the past 4 months, most recently just two weeks ago. Well, with bitcoin hitting $41,000 this morning and all other cryptos at all time highs, not only have those who listened to Panigirtzoglou worse off, but maybe Nick has become the “big JPM fade”. In any case, we are confident that it is only a matter of time before his Croatian colleague, the permabullish Marko Kolanovic takes the other side of the euphoria trade from Panigirtzoglou… as would we by the way.

  In any case, with $1.1 trillion about to hit the market, perhaps now is not the time for nuance and instead a more shotgun approach is appropriate, which is why we like Larry McDonald’s take as it cuts to the chase, and more importantly, is correct:

  The combo of a near $1 trillion check and $120 billion monthly QE is the monetary equivalent of eating a banana split after downing an Italian hero sandwich. The market will be stuffed with reserves.

  Of this we are certain. What does remain an open question is at what S&P level – 4,000? 4,500? moar? – will the Fed finally realize what it and the Treasury have done, and intervene by warning markets that it is about to pull its pedal off the gas, especially with a chorus of dovish, establishment progressive economists such as Larry Summers and Olivier Blanchard now warning that a $1.9 trillion stimulus could overheat the economy (yes, democrats warning of such a thing as too much stimulus – now we’ve seen it all). In fact, the next big risk is increasingly shaping up as a hawkish reversal by the Fed some time around July/August, when the Treasury cash balance tumbles to $200BN or so and when the S&P is in the the low to mid-4000s…

  Tyler Durden
  Sat, 02/06/2021 – 15:04

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• Netflix Is Hiking Prices 13% In Japan
  Netflix Is Hiking Prices 13% In Japan

  As new, low cost streaming competitors are emerging left and right, Netflix appears ready to move in for the kill. 

  That’s because, after spreading its platform globally, all Netflix has to do is flip “the pricing switch” in order to make a positive impact to the company’s free cash. And in Japan, that appears to be exactly what the platform is doing.

  Starting today, Netflix’s basic and standard tier prices will rise about 13% in Japan, while premium service pricing remains unchanged, according to Bloomberg. The company’s basic plan will rise to 990 yen ($9.39) from 880 yen. Its standard tier rises from 1,320 yen to 1,490 yen. 

  

  Asia is the company’s second fastest growing region, the report notes. Netflix has invested heavily in anime for the market, which is popular in Japan. 

  The company said in a statement: “We’re updating our prices so that we can continue to offer more variety of TV shows and films — in addition to local shows such as ‘Alice in Borderland,’ and our ever-growing anime lineup. As always, we offer a range of plans so that people can pick a price that works best for their budget.”

  The market liked the move, with Netflix stock finishing Thursday’s session up 2.3%. Shares had been little changed since January. 

  Recall, Netflix just posted an earnings report in January that saw its stock soar. The company posted a big subscriber beat and noted that it would be free cash flow positive in all quarters going fowrward. 

  

  At the same time, as we noted, the world’s largest paid streaming service is also facing more intense and cutthroat (or rather cut-price) competition than ever. Comcast’s Peacock platform has been rolling out for a few months, along with the short-form video service Quibi. And AT&T’s big bet on streaming, HBO Max is also up and running now while Disney+ has been a massive hit.

  Bloomberg notes that in the all-important Netflix subscriber guessing game, the web traffic research site SimilarWeb suggests the service averaged about 1.5 million new subscribers globally per month in Q4. That’s below the 6 million target the company has given and down from Q4 2019. On the plus side, SimilarWeb notes, subscribers have been rising each month in the quarter and are up sharply from the disappointing Q3.

  Tyler Durden
  Sat, 02/06/2021 – 00:00

• Clarity In Trump's Wake
  Clarity In Trump’s Wake

  Authored by Angelo Codevilla via AMGreatness.com,

  The United States of America is now a classic oligarchy. The clarity that it has brought to our situation by recognizing this fact is its only virtue…

  

  “Either the Constitution matters and must be followed . . . or it is simply a piece of parchment on display at the National Archives.”

  – Texas v. Pennsylvania et al.

  Texas v. Pennsylvania et al. did not deny setting rules for the 2020 election contrary to the Constitution. On December 10, 2020, the Supreme Court discounted that. By refusing to interfere as America’s ruling oligarchy serves itself, the court archived what remained of the American republic’s system of equal justice. That much is clear.

  In 2021, the laws, customs, and habits of the heart that had defined the American republic since the 18th century are things of the past. Americans’ movements and interactions are under strictures for which no one ever voted. Government disarticulated society by penalizing ordinary social intercourse and precluding the rise of spontaneous opinion therefrom. Together with corporate America, it smothers minds through the mass and social media with relentless, pervasive, identical, and ever-evolving directives. In that way, these oligarchs have proclaimed themselves the arbiters of truth, entitled and obliged to censor whoever disagrees with them as systemically racist, adepts of conspiracy theories. 

  Corporations, and the government itself, require employees to attend meetings personally to acknowledge their guilt. They solicit mutual accusations. While violent felons are released from prison, anyone may be fired or otherwise have his life wrecked for questioning government/corporate sentiment. Today’s rulers don’t try to convince. They demand obedience, and they punish.

  Russians and East Germans under Communists Leonid Brezhnev and Erich Honecker in the 1970s lived under less ruling class pressure than do today’s Americans. And their rulers were smart enough not to insult them, their country, or their race.

  In 2015, Americans could still believe they lived in a republic, in which life’s rules flow from the people through their representatives.

  In 2021, a class of rulers draws their right to rule from self-declared experts’ claims of infallibility that dwarf baroque kings’ pretensions.  In that self-referential sense, the United States of America is now a classic oligarchy.

  The following explains how this change happened. The clarity that it has brought to our predicament is its only virtue.

  Oligarchy had long been growing within America’s republican forms. The 2016 election posed the choice of whether its rise should consolidate, or not. Consolidation was very much “in the cards.” But how that election and its aftermath led to the fast, thorough, revolution of American life depended on how Donald Trump acted as the catalyst who clarified, energized, and empowered our burgeoning oligarchy’s peculiarities. These, along with the manner in which the oligarchy seized power between November 2016 and November 2020, ensure that its reign will be ruinous and likely short. The prospect that the republic’s way of life may thrive among those who wish it to depends on the manner in which they manage the civil conflict that is now inevitable.

  From Ruling Class to Oligarchy

  By the 21st century’s first decade, little but formality was left of the American republic. In 1942, Joseph Schumpeter’s Capitalism, Socialism, and Democracy described the logic by which government and big business tend to coalesce into socialism in theory, oligarchy in practice. But by then, that logic had already imposed itself on the Western world. Italy’s 1926 Law of Corporations—fascism’s charter—inaugurated not so much the regulation of business by government as the coalescence of the twain. Over the ensuing decade, it was more or less copied throughout the West. 

  In America, the 1890 Sherman Antitrust Act’s authors had erected barriers against private oligopolies and monopolies. By maintaining competition between big business, they hoped to preserve private freedoms and limit government’s role. But the Great Depression’s pressures and temptations led to the New Deal’s rules that differed little from Italy’s. No matter that, as the Supreme Court pointed out in Schechter Poultry v. U.S., public-private amalgamation does not fit in the Constitution. It grew nevertheless alongside the notion that good government proceeds from the experts’ judgment rather than from the voters’ choices. The miracles of production that America brought forth in World War II seemed to validate the point.

  President Dwight D. Eisenhower, who had come to understand large organizations that feed on government power and dispense vast private benefits, was not shy in warning about the danger they pose to the republic. His warning about the “military-industrial complex” that he knew so well is often misunderstood as a mere caution against militarism. But Ike was making a broader point: Amalgams of public and private power tend to prioritize their corporate interests over the country’s. 

  That is why Eisenhower cautioned against the power of government-funded expertise. “The prospect of domination of the nation’s scholars by federal employment, project allocations, and the power of money is ever-present and is gravely to be regarded,” he said, because “public policy could itself become the captive of a scientific-technological elite.” Government money can accredit a self-regarding elite. Because “a government contract becomes virtually a substitute for intellectual curiosity,” government experts can end up substituting their power for truth.

  The expansion of government power throughout the 1960s and ’70s in pursuit of improving education, eradicating poverty, and uplifting blacks created complexes of public-private power throughout America that surpassed the military-industrial complex in size, and above all in influence. 

  Consider education. Post-secondary education increased fourfold, from 9 percent of Americans holding four-year degrees in 1965 to 36 percent in 2015. College towns became islands of wealth and political power. From them came endless “studies” that purported to be arbiters of truth and wisdom, as well as a growing class of graduates increasingly less educated but ever so much more socio-politically uniform.

  In the lower grades, per-pupil expenditure (in constant dollars) went from $3,200 in 1960 to $13,400 in 2015. That money fueled an even more vast and powerful complex—one that includes book publishers, administrators, and labor unions and that has monopolized the minds of at least two generations. As it grew, the education establishment also detached itself from the voters’ control: In the 1950s, there were some 83,000 public school districts in America. By 2015, only around 13,000 remained for a population twice as large. Today’s parents have many times less influence over their children’s education than did their grandparents.

  Analogous things happened in every field of life. Medicine came to be dominated by the government’s relationship with drug companies and hospital associations. When Americans went to buy cars, or even light bulbs and shower nozzles, they found their choices limited by deals between government, industry, and insurance companies. These entities regarded each other as “stakeholders” in an oligarchic system. But they had ever less need to take account of mere citizens in what was becoming a republic in name only. As the 20eth century was drawing to a close, wherever citizens looked, they saw a government and government-empowered entities over which they had ever less say, which ruled ever more unaccountably, and whose attitude toward them was ever less friendly.

  The formalities were the last to go. Ever since the signing of the Magna Carta in 1215 A.D., the rulers’ dependence on popular assent to expenditures has been the essence of limited government. Article I, section 9 of the U.S. Constitution enshrines that principle. Congressional practice embodied it. Details of bills and expenditures were subject to public hearings and votes in subcommittees, committees, and the floors of both Houses. But beginning in the early 1980s and culminating in 2007, the U.S government abandoned the appropriations process.

  Until 1981, Congress had used “continuing resolutions” to continue funding government operations unchanged until regular appropriations could be made. Thereafter, as congressional leaders learned how easy it is to use this vehicle to avoid exposing what they are doing to public scrutiny, they legislated and appropriated ever less in public, and increasingly put Congress’ output into continuing resolutions or omnibus bills, amounting to trillions of dollars and thousands of pages, impossible for representatives and senators to read, and presented to them as the only alternative to “shutting down the government.” This—now the U.S government standard operating procedure—enables the oligarchy’s “stakeholders” to negotiate their internal arrangements free from responsibility to citizens. It is the practical abolition of Article I section 9—and of the Magna Carta itself.

  In the 21st century, the American people’s trust in government plummeted as they—on the political Left as well as on the Right—realized that those in power care little for them. As they watched corporate and non-profit officials trade places with public officials and politicians while getting much richer, they felt impoverished and disempowered. Since the ruling class embraced Republicans and Democrats, elections seemed irrelevant. The presidential elections of 2008 and 2012 underlined that whoever won, the same people would be in charge and that the parceling out of wealth and power among stakeholders would continue.

  Americans on the Right were especially aggrieved because the oligarchy had become culturally united in disdain for Western civilization in general and for themselves in particular. The cultural warfare it waged on the rest of America inflamed opposition. But it also diluted its own focus on solidifying profitable arrangements.

  By 2016, America was already well into the classic cycles of revolution. The atrophy of institutions, the waning of republican habits, and the increasing, reciprocal disrespect between classes that have less in common culturally, dislike each other more, and embody ways of life more different from one another, than did the 19th century’s Northerners and Southerners precluded returning to traditional republican life. The election would determine whether the oligarchy could consolidate itself. More important, it would affect the speed by which the revolutionary vortex would carry the country, and the amount of violence this would involve.

  The Trump Catalyst

  By 2015, the right side of America’s challenge to the budding oligarchy was inevitable. Trump was not inevitable. Senator Ted Cruz (R-Texas) had begun posing a thorough challenge to the “stakeholders” most Americans disrespected. Candidate Trump was the more gripping showman. His popularity came from his willingness to disrespect them, loudly. Because the other 16 Republican candidates ran on different bases, none ever had a chance. Inevitably, victory in a field so crowded depended on when which minor candidate did or did not withdraw. There never was a head-to-head choice between Trump and Cruz.

  Trump’s candidacy drew the ferocious opposition it did primarily because the entire ruling class recognized that, unlike McCain in 2008 and Romney in 2012, he really was mobilizing millions of Americans against the arrangements by which the ruling class live, move, and have their being. Since Cruz’s candidacy represented the same threat, it almost certainly would have drawn no less intense self-righteous anger. Nasty narratives could have been made up about him out of whole cloth as easily as about Trump. 

  But Trump’s actual peculiarities made it possible for the oligarchy to give the impression that its campaign was about his person, his public flouting of conventional norms, rather than about the preservation of their own power and wealth. The principal consequence of the ruling class’ opposition to candidate Trump was to convince itself, and then its followers, that defeating him was so important that it legitimized, indeed dictated, setting aside all laws, and truth itself.

  Particular individuals had never been the oligarchy’s worry. In 2008, as Barack Obama was running against Hillary Clinton and John McCain—far cries from Trump—he pointed to those Americans who “cling to God and guns” as the problem’s root. Clinton’s 2016 remark that Trump’s supporters were “a basket of deplorables,”—racists, sexists, homophobes, etc.—merely voiced what had long been the oligarchy’s consensus judgment of most Americans. For them, pushing these Americans as far away as possible from the levers of power, treating them as less than citizens, had already come to define justice and right. 

  Donald Trump—his bombastic, hyperbolic style, his tendency to play fast and loose with truth, even to lie as he insulted his targets—fit perfectly the oligarchy’s image of his supporters, and lent a color of legitimacy to the utterly illegitimate collusion between the oligarchy’s members in government and those in the Democratic Party running against Trump.

  Thus did the FBI and CIA, in league with the major media and the Democratic Party, spy on candidate Trump, concocting and spreading all manner of synthetic dirt about him. Nevertheless, to universal surprise, he won, or rather the oligarchy lost, the 2016 election.

  The oligarchy’s disparate members had already set aside laws, truth, etc. in opposition to Trump. The realization that the presidency’s awesome powers now rested in his hands fostered a full-court-press #Resistance. Trump’s peculiarities helped make it far more successful than anyone could have imagined.

  “Dogs That Bark Do Not Bite”

  Applying this observation to candidate Trump’s hyperbole suggested that President Trump might suffer from what Theodore Roosevelt called the most self-destructive of habits, combining “the unbridled tongue with the unready hand.” And, in fact, President Trump neither fired and referred for prosecution James Comey or the other intelligence officials who had run the surveillance of his campaign. He praised them, and let himself be persuaded to fire General Michael Flynn, his national security advisor, who stood in the way of the intelligence agencies’ plans against him. Nor did he declassify and make public all the documents associated with their illegalities. 

  Four years later, he left office with those documents still under seal. He criticized officials over whom he had absolute power, notably CIA’s Gina Haspel who likely committed a crime spying on his candidacy, but left them in office. Days after his own inauguration, he suffered the CIA’s removal of clearances from one of his appointees because he was a critic of the Agency. Any president worthy of his office would have fired the entire chain of officials who had made that decision. Instead, he appointed to these agencies people loyal to them and hostile to himself.

  He acted similarly with other agencies. His first secretary of state, secretary of defense, and national security advisor mocked him publicly. At their behest, in August 2017, he gave a nationally televised speech in which he effectively thanked them for showing him that he had been wrong in opposing ongoing war in the Middle East. He railed against Wall Street but left untouched the tax code’s “carried interest” provision that is the source of much unearned wealth. He railed against the legal loophole that lets Google, Facebook, and Twitter censor content without retribution, but did nothing to close it. Already by the end of January 2017, it was clear that no one in Washington needed to fear Trump. By the time he left office, Washington was laughing at him.

  Nor did Trump protect his supporters. For example, he shared their resentment of being ordered to attend workplace sessions about their “racism.” But not until his last months in office did he ban the practice within the federal government. Never did he ban contracts with companies that require such sessions.

  Thus, as the oligarchy set about negating the 2016 electorate’s attempt to stop its consolidation of power, Trump had assured them that they would neither be impeded as they did so nor pay a price. Donald Trump is not responsible for the oligarchy’s power. But he was indispensable to it.

  #TheResistance rallied every part of the ruling class to mutually supporting efforts. Nothing encourages, amplifies, or seemingly justifies extreme sentiments as does being part of a unanimous chorus, a crowd, a mob—especially when all can be sure they are acting safely, gratuitously. Success supercharges them. #TheResistance fostered the sense in the ruling class’ members that they are more right, more superior, and more entitled than they had ever imagined. It made millions of people feel bigger and better about themselves than they ever had.

  Logic and Dysfunction

  Disdain for the “deplorables” united and energized parts of American society that, apart from their profitable material connections to government, have nothing in common and often have diverging interests. That hate, that determination to feel superior to the “deplorables” by treading upon them, is the “intersectionality,” the glue that binds, say, Wall Street coupon-clippers, folks in the media, officials of public service unions, gender studies professors, all manner of administrators, radical feminists, race and ethnic activists, and so on. #TheResistance grew by awakening these groups to the powers and privileges to which they imagine their superior worth entitles them, to their hate for anyone who does not submit preemptively.

  Ruling-class judges sustained every bureaucratic act of opposition to the Trump Administration. Thousands of identical voices in major media echoed every charge, every insinuation, non-stop and unquestioned. #TheResistance made it ruling-class policy that Trump’s and his voters’ racism and a host of other wrongdoing made them, personally, illegitimate. In any confrontation, the ruling class deemed these presumed white supremacists in the wrong, systemically. By 2018, the ruling class had effectively placed the “deplorables” outside the protection of the laws. By 2020, they could be fired for a trifle, set upon in the streets, prosecuted on suspicion of bad attitudes, and even for defending themselves.

  Because each and every part of the ruling coalition’s sense of what may assuage its grievances evolves without natural limit, this logic is as insatiable as it is powerful. It is also inherently destructive of oligarchy.

  Enjoyment of power’s material perquisites is classic oligarchy’s defining purpose. Having conquered power over the people, successful oligarchies foster environments in which they can live in peace, productively. Oligarchy, like all regimes, cannot survive if it works at cross-purposes. But the oligarchy that seized power in America between 2016 and 2020 is engaged in a never-ending seizure of ever more power and the infliction of ever more punishment—in a war against the people without imaginable end. Clearly, that is contrary to what the Wall Street magnates or the corps of bureaucrats or the university administrators or senior professors want. But that is what the people want who wield the “intersectional” passions that put the oligarchy in power.

  As the oligarchy’s every part, every organ, raged against everything Trump, it made itself less attractive to the public even as Trump’s various encouragements of economic activity were contributing to palpable increases in prosperity.

  Hence, by 2019’s end, Trump was likely to win reelection. Then came COVID-19.

  The COVID Fortuna

  The COVID-19 virus is no plague. Though quite contagious, its infection/fatality rate (IFR), about 0.01 percent, is that of the average flu, and its effects are generally so mild that most whom it infects never know it. 

  Like all infections, it is deadly to those weakened severely by other causes. It did not transform American life by killing people, but by the fears about it that our oligarchy packaged and purveyed. Fortuna, as Machiavelli reminds us, is inherently submissive to whoever bends her to his wishes. The fears and the strictures they enabled were not about health—if only because those who purveyed and imposed them did not apply them to themselves. They were about power over others.

  COVID’s politicization began in February 2020 with the adoption by the World Health Organization—which is headed by an Ethiopian bureaucrat beholden to China—and upon recommendation of non-scientist Bill Gates, of a non-peer-reviewed test for the infection. The test’s chief characteristic is that its rate of positives to negatives depends on the number of cycles through which the sample is run. More cycles, more positives. Hence, every test result is a “soft” number. Second, the WHO and associated national organizations like the U.S. Centers for Disease Control reported COVID’s spread by another “soft” number: “confirmed cases.” That is, sick persons who tested positive for the virus. 

  When this number is related to that of such persons who then die, the ratio—somewhat north of 5 percent—suggests that COVID kills one out of 20 people it touches. But that is an even softer number since these deaths include those who die with COVID rather than of it, as well as those who may have had COVID. Pyramiding such soft numbers, mathematical modelers projected millions of deaths. Scary for the unwary, but pure fantasy.

  For example, the U.S. Institute for Health Metrics and Evaluation (IHME), which modeled the authoritative predictions on which the U.S. lockdowns were based, also predicted COVID-19 deaths for Sweden, which did not lock down. On May 3, the IHME predicted that Sweden would suffer 2,800 COVID deaths a day within the next two weeks. The actual number was 38. Reporting on COVID has never ceased to consist of numbers as scary as they are soft.

  Literate persons know that, once an infectious disease enters a population, nothing can prevent it from infecting all of it, until a majority has developed antibodies after contracting it—so-called community immunity or herd immunity. But fear leads people to empower those who promise safety, regardless of how empty the promises. The media pressed governments to do something. The Wall Street Journal’s Peggy Noonan screamed: “don’t panic is terrible advice.” The pharmaceutical industry and its Wall Street backers salivated at the prospect of billions of government money for new drugs and vaccines. Never mind the little sense it makes for millions of people to accept a vaccine’s non-trivial risk to protect against a virus with trivial consequences for themselves. All manner of officials yearned to wield unaccountable power.

  Because the power to crush the general population’s resistance to itself is the oligarchy’s single-minded focus, it was able to bend fears of COVID to that purpose. Thus, it gathered more power with more consequences than the oligarchs could have imagined.

  But only President Trump’s complaisance made this possible. His message to the American people had been not to panic, be mindful of the scientific facts—you can’t stop it, and it’s not that bad—while mitigating its effects on vulnerable populations. But on March 15, Trump bent, and agreed to counsel people to suspend normal life for two weeks to “slow the spread,” so that hospitals would not be overwhelmed. Two weeks later, the New York Times crowed that Trump, having been told “hundreds of thousands of Americans could face death if the country reopened too soon,” had been stampeded into “abandoning his goal of reopening the country by Easter.” He agreed to support the “experts’” definition of what “soon” might mean. By accrediting the complex of government, industry, and media’s good faith and expertise, Trump validated their plans to use COVID as a vehicle for enhancing their power.

  Having seized powers, the oligarchs used them as weapons to disrupt and disaggregate the parts of American society they could not control.

  The economic effects of lockdowns and social distancing caused obvious pain. Tens of millions of small businesses were forced to close or radically to reduce activity. More than 40 million Americans filed claims for unemployment assistance. Uncountable millions of farmers and professionals had their products and activities devalued. Millions of careers, dreams that had been realized by lifetimes of work, were wrecked. Big business and government took over their functions. Within nine months, COVID-19 had produced 28 new billionaires.

  Surplus and scarcity of food resulted simultaneously because the lockdowns closed most restaurants and hotels. As demand shifted in ways that made it impossible for distribution networks and processing plants to adjust seamlessly, millions of gallons of milk were poured down drains, millions of chickens, billions of eggs, and tens of thousands of hogs and cattle were destroyed, acres of vegetables and tons of fruit were plowed under. Prices in the markets rose. Persons deprived of work with less money with which to pay higher prices struggled to feed their families. This reduced countless self-supporting citizens to supplicants. By intentionally reducing the supply of food available to the population, the U.S. government joined the rare ranks of such as Stalin’s Soviet Union and Castro’s Cuba.

  But none of these had ever shut down a whole nation’s entire medical care except for one disease. Hospitals stood nearly empty, having cleared the decks for the (ignorantly) expected COVID flood. Emergency rooms were closed to the poor people who get routine care there. Forget about dentistry. Most Americans were left essentially without medical care for most of a year. Human bodies’ troubles not having taken a corresponding holiday, it is impossible to estimate how much suffering and death this lack of medical care has caused and will cause yet.

  The oligarchy’s division of all activity into “essential”—meaning permitted—and “nonessential”—to be throttled at will—had less obvious but more destructive effects. Private clubs, as well as any and all gatherings of more than five or 10 people, were banned. Churches were forbidden to have worship services or to continue social activities. The “social distancing” and mask mandates enforced in public buildings and stores, and often on the streets, made it well-nigh impossible for people to communicate casually. Thus, was that part of American society that the oligarchy did not control directly disarticulated, and its members left alone to face unaccountable powers on which they had to depend.

  Meanwhile, the media became the oligarchy’s public relations department. Very much including ordinary commercial advertising, it hammered home the oligarchy’s line that COVID restrictions are good, even cool. These restrictions reduced the ideas available to the American people to what the mass media purveyed and the social media allowed. Already by April 2020, these used what had become near-monopoly power over interpersonal communications to censor such communications as they disapproved. Political enforcers took it upon themselves even to cancel statements by eminent physicians about COVID that they judged to be “misleading.” Of course, this betrayed the tech giants’ initial promise of universal access. It is also unconstitutional. (In Marsh v. Alabama, decided in 1946, the Supreme Court barred private parties from acting as de facto governments). Since these companies did it in unison, they also violated the 1890 Sherman Antitrust Act. But the ruling class that had become an oligarchy applauded their disabling whatever might be conducive to conservatives’ interests and inconvenient to their own candidates.

  Private entities wielding public powers in coordination with each other without having to observe any of government’s constitutional constraints is as good a definition of oligarchy as there is. Oligarchy had increasingly taken power in the buildup to the 2020 election. In its aftermath, it would try to suffocate America.

  Sovereignty of the Vote Counters

  The oligarchy’s proximate objective, preventing the 2020 presidential election from validating the previous one’s results, overrode all others. The powers it had seized under COVID’s cover, added to the plethora that it had exercised since the 2016 campaign’s beginning, had surely cowered some opposition. But as November 2020 loomed, no one could be sure how much it also had energized. 

  Few people were happy to be locked down. It was a safe bet that not a few were unhappy at being called systemically racist. The oligarchy, its powers notwithstanding, could not be sure how people would vote. That is why it acted to take the presidential election’s outcome out of the hands of those who would cast the votes and to place it as much as possible in the hands of its members who would count the votes.

  Intentionally, traditional procedures for voting leave no discretion to those who count the votes. Individuals obtain and cast ballots into a physical or electronic box only after showing identification that matches their registration. Ballot boxes are opened and their contents counted by persons representing the election’s opposing parties. Persons registered to vote might qualify to vote-by-mail by requesting a ballot, the issuance and receipt of which is checked against their registration. Their ballots are counted in the same bipartisan manner.

  The Democratic Party had long pressed to substitute universal voting by mail—meaning that ballots would be sent to all registered voters, in some states to anyone with a driver’s license whether they asked for them or not and regardless of whether these persons still lived at the address on the rolls or were even alive. The ballots eventually would arrive at the counting centers, either through the mail, from drop boxes, or through “harvesters” who would pick them up from the voters who fill them out, and who may even help them to fill them out. Security, if any, would consist of machine-matching signatures on the ballot and on the envelope in which it had come. The machine’s software can be dialed to greater or lesser sensitivity.

  But doing away with scrutiny of ballots counted by representatives of the election’s contenders removes the last possibility of ensuring the ballot had come from a real person whose will it is supposed to represent. Once the link between the ballot and the qualified person is broken, nothing prevents those in charge of the electoral process from excluding and including masses of ballots as they choose. The counters become the arbiters.

  Attorney General William Barr pointed out the obvious: Anyone, in America or abroad, can print up any number of ballots, mark them, and deliver them for counting to whoever is willing to accept them and run them through their machines. Since the counters usually dispose of the envelopes in which ballots arrive—thus obviating any possibility of tracing the ballot’s connection to a voter—they may even dispense of the fiction that there had ever been any signed envelopes. That is especially true of late-found ballots. Who knows where they came from? Who cares to find out?

  Only in a few one-party Democratic states was universal vote-by-mail established by law. Elsewhere, especially in the states sure to be battlegrounds in the presidential election, mail-in voting was introduced by various kinds of executive or judicial actions. Questions of right and wrong aside, the Constitution’s Article II section 1’s words—“Each State shall appoint, in such Manner as the Legislature thereof may direct”—makes such actions unconstitutional on their face. Moreover, in these states—Georgia, Pennsylvania, Michigan, and Wisconsin—the counting of votes in the most populous counties is firmly in the hands of Democratic Party bosses with a well-documented history of fraud.

  To no one’s surprise, the 2020 presidential election was decided by super-majorities for the Democratic candidate precisely from these counties in these states. Yes, Trump’s percentage of the vote fell in certain suburbs. But Trump received some 11 million more votes in 2020 than four years earlier, and nearly doubled the share of votes he received from blacks. The Democrats’ gain of some 15 million votes came exclusively from mail-in ballots, and their victory in the Electoral College came exclusively from the supermajorities piled up in these corrupt counties—the only places where Trump’s share of the black vote was cut by three-quarters. Did people there really think so differently?

  This is not the place to recount the list of affidavits sworn under penalty of perjury by persons who observed ballot stuffing, nor the statistical anomaly of successive batches of votes that favored Biden over Trump by precisely the same amounts, of un-creased (i.e., never mailed) ballots fed into counting machines, nor the Georgia video of suitcases of ballots being taken from under tables and inserted into counting machines after Republican observers had been ousted. Suffice it to note that references to these events have been scrubbed from the Internet. It is more important to keep in mind that, in America prior to 2020, sworn affidavits that crimes have been committed had invariably been probable cause for judicial, prosecutorial, or legislative investigations. But for the first time in America, the ruling class dismissed them with: “You have no proof!” A judge (the sister of Georgia’s Stacey Abrams) ruled that even when someone tells the U.S. Postal Service they have moved, their old address is still a lawful basis for them to cast a ballot. Certainly, proof of crime is impossible with such judges and without testimony under oath, or powers of subpoena.

  Just as important, Republicans in general and the Trump White House in particular bear heavy responsibility for failing to challenge the patent illegality of the executive actions and consent decrees that enabled inherently insecure mail-in procedures in real-time, as they were being perpetrated in key states. No facts were at issue. Only law. The constitutional violations were undeniable.

  Pennsylvania et. al. answered Texas’s late lawsuit by arguing it demanded the invalidation of votes that had been cast in good faith. True. But Texas argued that letting stand the results of an election carried out contrary to the Constitution devalued the votes cast in states such as Texas that had held the election in a constitutional manner. Also true. Without comment, the Supreme Court chose to privilege the set of voters on the oligarchy’s side over those of their opponents. Had the lawsuit come well before the election, no such choice would have existed. Typically, the Trump Administration substituted bluster for action.

  The Oligarchy Rides its Tigers

  Winning the 2020 election had been the objective behind which the oligarchy had coalesced during the previous five years. In 2021, waging socio-political war on the rest of America is what the oligarchy is all about. 

  The logic of hate and disdain of ordinary Americans is not only what binds the oligarchy together. It is the only substitute it has for any moral-ethical-intellectual point of reference. Donald Trump’s impotent, inglorious reaction to his defeat offered irresistible temptations to the oligarchy’s several sectors to celebrate victory by vying to hurt whoever had supported the president. But permanent war against some 74 million fellow citizens is a foredoomed approach to governing.

  The Democratic Party had promised a return to some kind of “normalcy.” Instead, its victory enabled the oligarchy’s several parts to redefine the people who do not show them due deference as “white supremacists,” “insurrectionists,” and Nazis—in short, as some kind of criminals—to exclude them from common platforms of communication, from the banking system, and perhaps even from air travel; and to set law enforcement to surveil them in order to find bases for prosecuting them. Neither Congress nor any state’s legislature legislated any of this. Rather, the several parts of America’s economic, cultural, and political establishment are waging this war, uncoordinated but well-nigh unanimously.

  Perhaps most important, they do so without thought of how a war against at least some 74 million fellow citizens might end. The people in the oligarchy’s corporate components seem to want only to adorn unchallenged power with a reputation for “wokeness.” For them, causing pain to their opponents is a pleasure incidental to enjoying power’s perquisites. The Biden family’s self-enrichment by renting access to influence is this oligarchy’s standard.

  But the people who dispense that reputation—not just the professional revolutionaries of Antifa and Black Lives Matter, but “mainstream” racial and gender activists and self-appointed virtue-crats, have appetites as variable as they are insatiable. For them, rubbing conservative America’s faces in excrement is what it’s all about. A Twitter video viewed by 2.6 million people urges them to form “an army of citizen detectives” to ferret out conservatives from among teachers, doctors, police officers, and “report them to the authorities.” No doubt, encouraged by President Biden’s characterization of opponents as “domestic terrorists,” any number of “authorities” as well as private persons will find opportunities to lord it over persons not to their taste. This guarantees endless clashes, and spiraling violence.

  Joseph Biden, Kamala Harris, and the people they appoint to positions of official responsibility are apparatchiks, habituated to currying favor and pulling rank. They have neither the inclination nor the capacity to persuade the oligarchy’s several parts to agree to a common good or at least to a modus vivendi among themselves, never mind with conservative America. This guarantees that they will ride tigers that they won’t even try to dismount.

  At this moment, the oligarchy wields an awesome complex of official and unofficial powers to exclude whomever it chooses from society’s mainstream. Necessarily, however, exclusions cut both ways. Invariably, to banish another is to banish one’s self as well. Google, Facebook, and Twitter let it be known that they would exclude anything with which they disagree from what had become the near-universal means of communication. They bolstered that by colluding to destroy their competitor, Parler. Did they imagine that 74 million Americans could find no means of communicating otherwise? Simon and Schuster canceled a book by Senator Josh Hawley (R-Mo.) critical of communications monopolies. Did its officials imagine that they would thereby do other than increase the book’s eventual sales, and transfer some of their customers to Hawley’s new publisher? The media effectively suppressed inconvenient news. Did they imagine that this would prevent photos of Black Lives Matter professionals in the forefront of the January 6 assault on the U.S. Capitol from reaching the public?

  In sum, intending to relegate conservative America to society’s servile sidelines, the oligarchy’s members drew a clear, sharp line between themselves and that America. By telling conservative Americans “these institutions and corporations, are ours, not yours,” they freed conservative America of moral obligations toward them and themselves. By abandoning conservative America, they oblige conservative America to abandon them and seek its own way.

  Clarity, Leadership, and Separation

  To think of conservative America’s predicament as an opportunity is as hyperbolic as it was for Machiavelli to begin the conclusion of The Prince by observing that “in order to know Moses’ virtue it was necessary that the people of Israel be slaves in Egypt, and to know the greatness of Cyrus’s spirit that the Persians be oppressed by the Medes, and to know the excellence of Theseus, that the Athenian people be dispersed, so at the present, in order to know the virtue of an Italian spirit it was necessary that Italy reduce herself to the conditions in which she is at present . . .” 

  Machiavelli’s lesson is that the clarity of situations such as he mentions, and such as is conservative America’s following the 2020 election, is itself valuable. Clarity makes illusions of compromise untenable and points to self-reliant action as the only reasonable path. The people might or might not be, as he wrote, “all ready and disposed to follow the flag if only someone were to pick it up.” But surely, someone picking up the flag is the only alternative to servitude.

  What, in conservative America’s current predicament, might it mean to “pick up the flag?” Electoral politics remains open to talented, courageous, ambitious leadership. In Florida and South Dakota, Governors Ron DeSantis and Kristi Noem have used their powers to make room for ways of life different from and more attractive than that in places wholly dominated by the oligarchy. Texas and Idaho as well attract refugees from such as California and New York by virtue of such differences with life there as their elected officials have been able to maintain. Governmental and corporate pressures on such states to conform to the oligarchy’s standards, sure to increase, are opportunities for their officials to lead their people’s refusal to conform by explaining why doing this is good, and by personally standing in the way. They may be sure that President Kamala Harris would not order federal troops to shoot at state officials for closing abortion clinics or for excluding men from women’s bathrooms.

  For more than a generation, a majority of Americans have expressed growing distrust of, and alienation from, the establishment. The establishment, not Donald Trump, made this happen. That disparate majority, in many ways at cross purposes with itself, demands leadership. Pollster Patrick Caddell’s in-depth study of the American electorate, which he titled “We Need Smith,” showed how the themes that made it possible for the hero of the 1939 movie “Mr. Smith Goes to Washington” to prevail against the establishment then are even more gripping now and appeal to a bigger majority. Trump was a bad copy of Mr. Smith.

  More than ever, an audience beyond the 74 million Americans who voted for Trump hungers for leadership. The oligarchy came together by ever more vigorously denigrating and suppressing these deplorables. Already before the 20th century’s turn, the FBI and some elements in the Army and the Justice Department had concluded that they are somehow criminal, and that preparations should be made to treat them as such. The official position of the administration taking power after the 2020 election is that domestic terrorism from legions of “white supremacists” is the primary threat facing America. No wonder those so designated for outlawry demand protection.

  The path to electoral leadership is straightforward. Whoever would lead the deplorables-plus must explain their cause to friend and foe, make it his own, and grow it by leading successful acts of resistance. 

  Increasingly, conservative Americans live as if under occupation by a hostile power. Whoever would lead them should emulate Charles de Gaulle’s 1941 basic rule for la résistance: refrain from individual or spontaneous acts or expressions that produce only martyrs. But join with thousands in what amount to battles to defeat the enemy’s initiatives, weaken his grip on power, and prepare his defeat. Thus, an aspirant to the presidency in 2024, in the course of debunking the narrative by which the oligarchy seized so much power over America, might lead millions to violate restrictions placed on those who refuse to wear masks. Or, as he pursues legislative and judicial measures to abolish the compulsory racial and gender sensitivity training sessions to which public and private employees are subjected, he might organize employees in a given sector unanimously to stay away from them in protest. They can’t all be fired or held back.

  Such a persuasive prospective president, or president, could finish the process that, beginning circa 2010, initiated the process of reshaping the Republican Party into something like Caddell’s Mr. Smith would have personified.

  Electoral politics, however, is the easy part. Major corporations, private and semi-private institutions such as schools, publishing houses, and media, are the oligarchy’s deepest foundations. These having become hostile, conservative Americans have no choice but to populate their own. This is far from impossible. 

  Sorting ourselves out into congenial groups has been part of America’s DNA since 1630, when Roger Williams led his followers out of Massachusetts to found Providence Plantations. In the 19th century, the Mormons left unfriendly environments to establish their own settlements. Since 1973, Americans who believe in unborn children’s humanity have largely ceased to intermarry with those who do not. Nobody decided this should happen. It is in the logic of diverging cultures. 

  As American primary and secondary education’s dysfunction became painfully apparent, parents of all races have fled the public schools as fast as they could. Businesses have been fleeing the Rust Belt for the Sun Belt for generations. When Democratic governors and mayors used COVID to make life difficult in their jurisdictions, people moved out of them. When Twitter’s censorship of conservatives became undeniable, Parler added customers by the hundreds of thousands each day. Facebook and Twitter’s stock lost $50 billion in a week. Much more separation follows from the American people’s diverging cultures.

  As conservative America sorts itself out from oligarchy’s social bases, it may be able to restore something like what had existed under the republic. Effectively, two regimes would have to learn to coexist within our present boundaries. But that may be the best, freest, arrangement possible now for the United States.

  Tyler Durden
  Fri, 02/05/2021 – 23:40

• 10 Pounds Of High Powered C-4 Explosives Disappear From California Military Base
  10 Pounds Of High Powered C-4 Explosives Disappear From California Military Base

  Military officials are scrambling to recover 10 pounds of Composition C-4, after the high-powered explosives vanished from Twentynine Palms Marine Corps Base in Southern California, according to ABC 10News, citing ‘sources with close military ties.’

  

  The explosives disappeared during a long training exercise two weeks ago, and are believed to have been stolen.

  The unit’s commanding officer is considering extending the training exercise until the explosives are found, sources said. They also confirm the commanding officer messaged subordinate commands about a monetary reward for any information leading to the discovery of the C-4.

  The base would not confirm any details with ABC 10News. Capt. Zachary Colvin, with the Marine Air Ground Task Force Training Command, told this station that “the ongoing investigation into this incident is being handled by NCIS and the affected units.” –ABC 10News

  A NCIS Public Affairs spokesperson told ABC 10News “Out of respect for the investigative process, NCIS does not comment on or confirm details relating to ongoing investigations.

  Retired Captain Kelly Mayer – a former firefighter and bomb-technician with 23-years of eperience, told the outlet that one pound alone could blow up a vehicle when detonated, adding that C-4 is one of the most powerful explosives to be manufactured.

  For reference, here’s 10 lbs of C-4 exploding.

  Tyler Durden
  Fri, 02/05/2021 – 23:20

• During Pandemic, China Sent Millions Of Counterfeit Masks, Test Kits To US: Customs Data
  During Pandemic, China Sent Millions Of Counterfeit Masks, Test Kits To US: Customs Data

  Authored by Frank Fang via The Epoch Times,

  China accounted for about 51 percent of counterfeit or substandard COVID-19-related products seized by U.S. customs officials from October 2019 to Sept. 30 last year, according to a newly-released report from the U.S. Customs and Border Protection (CBP).

  

  Among the products seized by U.S. customs officials were over 12.7 million counterfeit masks, 177,356 COVID-19 test kits prohibited by the U.S. Food and Drug Administration (FDA), and 38,098 FDA-prohibited chloroquine tablets.

  The effectiveness of the anti-malarial drug hydroxychloroquine and its closely-related chloroquine in treating symptoms of COVID-19, which is caused by the CCP virus (commonly known as the novel coronavirus), is of much debate.

  The FDA initially issued an emergency use authorization for the two drugs, but later revoked the authorization in June last year, saying that they were “unlikely to be effective in treating COVID-19.”

  However, there have been studies showing their effectiveness: one study showed hydroxychloroquine lowered the death rate of COVID-19 patients, while another study demonstrated a drug cocktail containing hydroxychloroquine could lower the hospitalization and death rate of patients infected by the virus.

  The FDA currently has a database listing fraudulent COVID-19 products, including test kits. The list contains company names and the names of their products.

  In December last year, customs officials in Cincinnati seized 10,080 counterfeit surgical masks, which were labeled “3M Mask Model 1860,” in a shipment originating from China, according to a press release. The boxes containing the masks were fraudulently labeled as “Made in the USA.”

  If genuine, these fake 3M masks would have an estimated manufacturer’s suggested retail price of $65,520.

  CBP officers in Cincinnati made a significant seizure of counterfeit masks that were packaged advertising protection against communicable respiratory diseases. Officers seized the 21 shipping boxes that contained over 10K counterfeit mask.https://t.co/L0x1I1qaXF pic.twitter.com/2irnkDArZ6

  — CBP Chicago (@CBPChicago) January 15, 2021

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

  Counterfeit masks were also arriving in the United States from Hong Kong. Customs officials in Cincinnati seized 6,080 fake 3M masks in freight from Hong Kong on Dec. 6, 2020.

  Another seizure took place in Chicago in September last year, when local customs officials stopped a shipment containing 500,000 counterfeit N95 masks. These masks were determined to have an estimated retail price of $474,905, if genuine. The shipment originated from the southern Chinese city of Shenzhen and was destined for a company in Manalapan, New Jersey.

  Forced Labor Products

  The CBP report also mentioned that customs officials issued a record number of 13 new withhold release orders, banning the imports of products made with forced labor, in the 12-month period that ended on Sept. 30, 2020.

  Most of these targeted products—including disposable gloves, seafood, and cotton—originated from China. Together, these products were valued at nearly $50 million, according to the report.

  On Jan. 13, the CBP issued a new withhold release order banning all imports of cotton, apparel, textiles, and tomato products from far-western China’s Xinjiang region.

  Beijing has detained more than one million ethnic Muslims, including Uyghurs, Kazakh, and Kyrgyz people, in internment camps in Xinjiang. Detainees are subject to forced labor, torture, and political indoctrination sessions. Beijing claims these camps are “vocational training centers.”

  In August last year, a U.S. company was fined $575,000 for importing stevia powder and derivatives there were made by prison labor in China. Several months later, in October, CBP asked all U.S. ports to seize stevia products made by an Inner Mongolia-based company, after evidence showed the company used convict, forced, or indentured labor to manufacture the products.

  “Currently, CBP is enforcing 44 active withhold release orders and seven active findings,” according to the report.

  General Products

  Finally, the report concluded that CBP officials seized a total of 26,503 shipments with products found to have violated U.S. intellectual property rights, with China being the “top source” of such seizures. These products would have a total estimated manufacturer’s suggested retail price of over $1.3 billion.

  ICE, @CBP and LAPD seize counterfeit Viagra pills, footwear, belts, car emblems and headphones worth more than $32 million at the Los Angeles/Long Beach Seaport. Learn more: https://t.co/cK9jWDw1mo pic.twitter.com/67QjuucuO2

  — ICE (@ICEgov) December 17, 2020

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

  In December last year, customs officials in Los Angeles seized three cargo shipments from China containing counterfeit products that could be worth over $32 million. Among the seized fake products were one million knockoff Viagra pills, footwear, belts, purses, and headphones.

  Counterfeit toys from China that could be worth about $1.3 million were also seized at the Port of New York/Newark, the CBP announced on Dec. 21 last year.

  Tyler Durden
  Fri, 02/05/2021 – 23:00

• Rapper Lil Uzi Got $24 Million Diamond Pierced In His Forehead 
  Rapper Lil Uzi Got $24 Million Diamond Pierced In His Forehead 

  While Friday’s job numbers showed the labor market continues to deteriorate, with millions of people unemployed, experiencing housing and food insecurities, one rapper, in these unprecedented economic times, decided to show off his wealth by piercing a jaw-dropping stone to his forehead. 

  Rapper Lil Uzi Vert (real name: Symere Bysil Woods) showed off his new $24 million diamond pierced to his forehead on Wednesday. 

  

  “Beauty is pain,” the 26-year-old rapper posted to his Instagram account, followed by a video of the jaw-dropping diamond. 

  It was initially assumed by many that Uzi had the stone embedded into his forehead. But, according to Luis Garcia, the vice president of the Association of Professional Piercers, it’s just a piercing. 

  “It looks like he has what we would call a vertical bridge piercing, as in the bridge of the nose. That would be an actual piercing with a staple shape barbell that enters at one point, exits at another, and then the big diamond attaches to that bar on the front,” Garcia told Yahoo. “It’s a piercing, while obviously not super common in typical circles, it’s fairly common in piercing circles. …Definitely not with a giant $24 million diamond on it. But it’s something that gets done.”

  In today’s economy, facing a double-dip recession, walking around with an 11-carat diamond plastered to the rapper’s forehead makes him a walking target. 

  Tyler Durden
  Fri, 02/05/2021 – 22:40

• Is A Space Mining War Inevitable?
  Is A Space Mining War Inevitable?

  Authored by Cecilia Jamasmie via Mining.com,

  A brewing war to set a mining base in space is likely to see China and Russia joining forces to keep the US increasing attempts to dominate extra-terrestrial commerce at bay, experts warn

  

  The Trump Administration took an active interest in space, announcing that America would return astronauts to the moon by 2024 and creating the Space Force as the newest branch of the US military.

  It also proposed global legal framework for mining on the moon, called the Artemis Accords, encouraging citizens to mine the Earth’s natural satellite and other celestial bodies with commercial purposes.

  The directive classified outer space as a “legally and physically unique domain of human activity” instead of a “global commons,” paving the way for mining the moon without any sort of international treaty.

  Spearheaded by the US National Aeronautics and Space Administration (NASA), the Artemis Accords were signed in October by Australia, Canada, England, Japan, Luxembourg, Italy and the United Emirates.

  “Unfortunately, the Trump Administration exacerbated a national security threat and risked the economic opportunity it hoped to secure in outer space by failing to engage Russia or China as potential partners,” says Elya Taichman, former legislative director for then-Republican Michelle Lujan Grisham.

  

  NASA is working on lunar bases that can travel on wheels, or even legs, increasing landing zone safety, provide equipment redundancy and improve the odds of making key discoveries. (Image courtesy of NASA.)

  “Instead, the Artemis Accords have driven China and Russia toward increased cooperation in space out of fear and necessity,” he writes.

  Russia’s space agency Roscosmos was the first to speak up, likening the policy to colonialism.

  “There have already been examples in history when one country decided to start seizing territories in its interest — everyone remembers what came of it,” Roscosmos’ deputy general director for international cooperation, Sergey Saveliev, said at the time.

  China, which made history in 2019 by becoming the first country to land a probe on the far side of the Moon, chose a different approach. Since the Artemis Accords were first announced, Beijing has approached Russia to jointly build a lunar research base.

  President Xi Jinping has also he made sure China planted its flag on the Moon, which happened in December 2020, more than 50 years after the US reached the lunar surface.

  The Next Wild West?

  China has historically been excluded from the US-led international order in space. It is not a partner in the International Space Station (ISS) program, and a US legislative provision has limited NASA’s ability to cooperate with it in space since 2011.

  “America and China should cooperate in space,” say policy experts Anne-Marie Slaughter and Emily Lawrence.

  “If the US managed to coordinate with the Soviet Union on space policy during the Cold War, it can find a way to cooperate with China now,” they note.

  Slaughter, a former director of policy planning in the US State Department from 2009 to 2011, believes that President Joe Biden’s team should distance from Trump’s accords and instead pursue a new course within the UN Committee on the Peaceful Uses of Outer Space.

  “Biden can restore some of America’s global legitimacy by working to establish a multilateral framework, negotiated with all relevant parties that protects areas of common interest while granting internationally accepted commercial opportunities,” Slaughter and Lawrence wrote.

  It will not be an easy task, they say, but a necessary one. “Without an international framework that includes all major spacefaring countries, the moon could become the next Wild West.”

  The race is on. It has been for a while. So much so that NASA has laid out a $28 billion plan to launch an unmanned mission around the moon in 2021, followed by a crewed moon flyby in 2023, then a lunar landing in 2024. 

  NASA plans to build a permanent moon-orbiting base called the Gateway, similar to the ISS. From there, the agency hopes to build a base on the lunar surface, where it can mine the resources required to fly the first astronauts to Mars.

  Russia has been pursuing plans in recent years to return to the moon, potentially travelling further into outer space.

  Roscosmos revealed in 2018 plans to establish a long-term base on the moon over the next two decades, while President Vladimir Putin has vowed to launch a mission to Mars “very soon.”

  

  NASA outlined in 2019 its long-term approach to lunar exploration, which includes setting up a “base camp” on the moon’s south pole. (Artist’s rendition courtesy of NASA.)

  The US, Russia and China are not the first nor the only nations to jump on board the lunar mining train.

  Luxembourg, one of the first countries to set its eyes on the possibility of mining celestial bodies, created in 2018 a Space Agency (LSA) to boost exploration and commercial utilization of resources from Near Earth Objects.

  Unlike NASA, LSA does not carry out research or launches. Its purpose is to accelerate collaborations between economic project leaders of the space sector, investors and other partners.

  The tiny European nation announced in November plans to create a European Space Resources Innovation Centre (ESRIC), in charge of laying the foundations for exploiting extra-terrestrial resources.

  Luxembourg is also supporting a program to begin extracting resources from the Moon by 2025.

  The mission, in charge of the European Space Agency in partnership with ArianeGroup, plans to extract waste-free nuclear energy thought to be worth trillions of dollars.

  Trillion-dollar market

  Both China and India have also floated ideas about extracting Helium-3 from the Earth’s natural satellite. Beijing has already landed on the moon twice in the 21st century, with more missions to follow.

  In Canada, most initiatives have come from the private sector. One of the most touted was Northern Ontario-based Deltion Innovations partnership with Moon Express, the first American private space exploration firm to have been granted government permission to travel beyond Earth’s orbit.

  Space ventures in the works include plans to mine asteroids, track space debris, build the first human settlement on Mars, and billionaire Elon Musk’s own plan for an unmanned mission to the red planet.

  Geologists, as well as emerging companies, such as US-based Planetary Resources, a firm pioneering the space mining industry, believe asteroids are packed with iron ore, nickel and precious metals at much higher concentrations than those found on Earth, making up a market valued in the trillions.

  On December 5, 2020, a metallic asteroid 140 miles wide and worth an estimated $10,000 quadrillion made its closest approach to our planet.

  

  In this concept image, a resource prospector carrying a payload roves on the lunar surface. (Image courtesy of NASA.)

  “With NASA and other companies investing in and developing nuclear power for use in space travel and colonization, the reality of mining asteroids is closer than ever before,” says Bob Goldstein, CEO of US Nuclear Corp.

  With proven successful fusion energy experiments under their belt, US Nuclear and Magneto-Inertial Fusion Technologies (MIFTI) believe they are only a few years away from building the world’s first fusion power generator.

  Fusion power releases up to four times as much energy as fission, and uses fuel that is lightweight, low-cost, safe, and sustainable.

  A spacecraft with fusion-powered propulsion systems could reach the asteroid belt in as little as seven months. According to Goldstein, it could be powerful enough to transport the asteroid to an earth orbit where it would be much more efficient to mine and transport these valuable resources to earth.

  Tyler Durden
  Fri, 02/05/2021 – 22:20

• Nevada Gov Pushes Plan To Let Companies Raise Taxes, Create Local Governments
  Nevada Gov Pushes Plan To Let Companies Raise Taxes, Create Local Governments

  Imagine a place where private companies get to effectively separate from the surrounding area and create their own towns, raise their own taxes, and create their own laws – all while still using American dollars.

  Such a place would bring a whole new meaning to the phrase “company town”.

  

  Just imagine an Apple-ville, Google-town, or PornHubtopia, but instead of rising out of Silicon Valley, the companies may need to trek out to the Nevada desert.

  Because Nevada is trying to make all this – and more – a reality with its latest economic development plan, which involves a decidedly innovative approach that differs starkly with the traditional tax abatements and incentives offered by states like New York (to megacorps like Amazon), and by other states, to other (also often already very large) companies. But Nevada isn’t just trying to lure in the big fish. It’s trying to convince people to come there and build.

  According to a draft of the plan obtained by the Las Vegas Review-Journal (but not yet shared with the legislature), the law would effectively make Nevada an ideal place of business for the next generation of crypto-libertarian innovators. These corporation-run governments “would carry the same authority as a county, including the ability to impose taxes, form school districts and justice courts and provide government services, to name a few duties,” the Review-Journal added.

  While the details of the plan were just leaked this week, when Democratic Gov. Steve Sisolak first introduced the plan during his State of the State address on Jan. 19. At that time, he named Blockchain LLC as one company that had committed to traveling to Nevada and building there.

  The leak to the Review-Journal is starting to pick up traction, as the story about Nevada’s plan for “Innovation Zones” attracts the interest of the national press. It has all the makings of a good political story – after all, it features a Democrat trying to create an independent, decidedly capitalist, libertarian society.

  The whole point of the plan is to bring in more businesses, people and competition by bringing “groundbreaking technologies” to the state, which is already benefiting from the exodus from nearby California, as stretched residents of the Bay Area (and other parts of the Golden State) have been making homes in Las Vegas, Reno, Carson City and other parts of the Silver State, and more will likely continue to do so as California moves to chase away the wealthy, especially in the tech space. 

  The governor’s office of economic development will manage applications for the plan. And even though it’s hardly a sure thing to pass the legislature, it has already got some developers and local officials, excited.

  Storey County Commissioner Lance Gilman, one of the industrial center’s developers, said that the Blockchains Innovation Zone is “going to have an impact on Storey County, and the jury is still out on whether that will be positive or negative.” Gilman said that the county is staying open-minded about the idea, but there needs to be some sort of incentive to compensate for ceding the land to the zone itself.

  Perhaps the most refreshing thing about the plan is that it represents a rare example of state-led economic development that doesn’t feature the use of tax abatements or other publicly funded incentive packages. Kowtowing to corporate interests helped bring Tesla’s Gigafactory to Nevada, apparently.

  But we suspect the notoriously open-minded Tesla CEO Elon Musk might be willing to trade Texas and California for Nevada if this plan were to pass.

  Tyler Durden
  Fri, 02/05/2021 – 22:00

• House Impeachment Brief Against Trump Threatens Freedom Of Speech Of All Americans: Dershowitz
  House Impeachment Brief Against Trump Threatens Freedom Of Speech Of All Americans: Dershowitz

  Authored by Tom Ozimek via The Epoch Times,

  Harvard Law School professor emeritus Alan Dershowitz said Thursday that the House impeachment brief against former President Donald Trump, which seeks to undermine Trump’s First Amendment-based argument in his defense, amounts to a dangerous broadside against the freedom of speech of all Americans.

  

  Writing in an op-ed for The Hill, Dershowitz made a case against a key argument contained in the brief (pdf), namely that “the First Amendment does not apply at all to impeachment proceedings,” signals Congressional willingness to take aim at freedom of speech more broadly.

  “The brief filed by the House managers advocating the conviction and disqualification of citizen Donald Trump contains a frontal attack on freedom of speech for all Americans,” Dershowitz wrote.

  “It states categorically that ‘the First Amendment does not apply at all to impeachment proceedings,’ despite the express language of that amendment prohibiting Congress from making any law, or presumably taking any other action, that abridges ‘the freedom of speech.’”

  

  Attorney Alan Dershowitz, then member of President Donald Trump’s legal team, speaks to the press in the Senate Reception Room during the Senate impeachment trial at the Capitol in Washington on Jan. 29, 2020. (Mario Tama/Getty Images)

  The legal scholar then challenged another statement in the brief, namely that “the First Amendment exists to promote our democratic system.”

  “This categorical statement surely would have surprised the Framers of the First Amendment, who believed in freedom of speech but not so much in democracy,” Dershowitz wrote. “The Framers of our constitutional system thought they were building a ‘republic,’ with limited suffrage and many checks on ‘democracy,’” he added, arguing that freedom of speech is “essential to keeping it a republic, but not necessarily a democracy.”

  “So, no, the First Amendment does not exist only to ‘protect our democratic system.’ It exists to protect our liberty, regardless of what system we choose,” he wrote.

  Dershowitz said that the argument made by the authors of the House brief that the First Amendment “doesn’t apply to presidents or others who ‘attack our democracy,’ is the same as that made by Sen. Joseph McCarthy and his acolytes decades ago “when they sought to deny First Amendment protection to communists and others who were seen as enemies of democracy and who, if they had come to power, would have denied the rest of us our freedoms, including that of free speech.”

  “Freedom of speech must include those who would replace democracy with other systems of governance. It must even include those who advocate severe restrictions on freedom of speech, as many young left wing radicals do today. They, too, must be allowed to express their dangerous views,” he argued.

  The House brief argues that the First Amendment protects private citizens from the government but “it does not protect government officials from accountability for their own abuses in office.”

  Holding Trump “accountable through conviction on the article of impeachment would vindicate First Amendment freedoms—which certainly offer no excuse or defense for President Trump’s destructive conduct,” the brief’s authors argue.

  “Even if the First Amendment were applicable here, private citizens and government officials stand on very different footing when it comes to being held responsible for their statements,” they wrote.

  Citing U.S. Supreme Court rulings in cases Branti v. Finkel and Elrod v. Burns, they argued that, “as the leader of the Nation, the President occupies a position of unique power. And the Supreme Court has made clear that the First Amendment does not shield public officials who occupy sensitive policymaking positions from adverse actions when their speech undermines important government interests.”

  The House brief alleges that Trump incited a mob that breached the U.S. Capitol on Jan. 6 by sowing doubt about the integrity of the 2020 presidential election.

  

  Protesters clash with police at the U.S. Capitol in Washington on Jan. 6, 2021. (Julio Cortez/AP Photo)

  Trump’s legal team denies the allegation and argues in a memo (pdf) that the trial is unconstitutional because Trump is no longer president. The team also argues that Trump exercised his First Amendment rights in calling into question the results of the election.

  “After the November election, the 45th President exercised his First Amendment right under the Constitution to express his belief that the election results were suspect, since with very few exceptions, under the convenient guise of COVID-19 pandemic ‘safeguards’ states election laws and procedures were changed by local politicians or judges without the necessary approvals from state legislatures,” the legal team wrote.

  “Like all Americans, the 45th President is protected by the First Amendment,” they wrote. “Indeed, he believes, and therefore avers, that the United States is unique on Earth in that its governing documents, the Constitution and Bill of Rights, specifically and intentionally protect unpopular speech from government retaliation.”

  “If the First Amendment protected only speech the government deemed popular in current American culture, it would be no protection at all,” they added.

  Dershowitz’ sentiment that the reasoning featured in the impeachment brief is a threat to freedom of speech more broadly was echoed in a statement by Trump adviser Jason Miller, who said: “not only will President Trump be on trial next week. The First Amendment will be on trial next week because the Democrats aren’t going to stop with attacking President Trump, they want to go after the free speech and the rights of all Americans.”

  Democrats face an uphill battle in the Senate in their pursuit of an impeachment conviction against Trump. Forty-five Republican senators voted in favor of a resolution calling the trial unconstitutional, since Trump is now a private citizen. With the Senate split 50–50, the impeachment managers would have to convince 17 Republicans that the trial is constitutional and that Trump is guilty of inciting an insurrection.

  Tyler Durden
  Fri, 02/05/2021 – 21:40

• "No Room For Debate": Beijing Imposes Sweeping Pro-China Curriculum On Hong Kong Schools
  “No Room For Debate”: Beijing Imposes Sweeping Pro-China Curriculum On Hong Kong Schools

  In yet more significant fallout and far-reaching impact from the so-called Hong Kong national security law imposed by Beijing in June of last year, HK authorities in concert with China have unveiled sweeping new ‘national security rules’ for schools.

  Schools have been ordered to adopt the curriculum which instills “an affection for the Chinese people” and while at the same time weeding out potentially disloyal teachers. “As far as national security is concerned, there is no room for debate or compromise,” the new security directive for schools reads ominously. 

  The measures were announced late Thursday and as Bloomberg details, “will require primary and secondary school students to memorize the law’s offenses, which include subversion, secession, subversion, terrorism and collusion with foreign powers.”

  

  And further, “Authorities are also looking to incorporate national security education into all subjects, from geography to biology, the government said in a statement.”

  While it remains unclear (and highly dystopian) just how it is that “national security education” will be incorporated into something like science and biology, Beijing has long suspected Hong Kong’s youth of being the main problem behind recent unrest. The mainland further blamed a “foreign hand” to the rolling protests and unrest of recent years.

  China’s Education Bureau was cited as saying the following:

  The fundamentals of national security education are to develop in students a sense of belonging to the country, an affection for the Chinese people, a sense of national identity, as well as an awareness of and a sense of responsibility for safeguarding national security.

  As far as prevention and education are concerned, schools have a significant role to play.

  The rolling and increasingly aggressive protests which saw entire districts of Hong Kong grind to a halt in 2019 into the early part of 2020 were largely driven by young people, in particular college and no doubt high school students as well. There were a number of instances of students ditching school en masse in order to join the anti-mainland protest movement.

  2/ Schools must inform the police and parents of incidents involving “political propaganda” – including students chanting slogans, posting material with political messages and asking or coercing other children to follow their political stance.

  — Tom Grundy (@tomgrundy) February 5, 2021

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

  Also alarming is that it appears to set up a ‘loyalty litmus test’ of sorts for teachers and staff, which will also no doubt induce ‘informants’ to turn-in fellow faculty. Thursday’s Education Bureau statement further urged school staff to “step up the prevention and suppression” of teaching that’s considered in breach of the security law while helping students to “gain a correct understanding” of the legislation.

  Thus HK schools have now effectively and seemingly overnight been transformed into ‘reeducation’ programs of pro-mainland propaganda. This is precisely what many students feared as in recent years China sought to emphasize “patriotic education” in Hong Kong schools, which met with fierce resistance. 

  The question remains whether this will serve to trigger new waves of unrest, or if China has already effectively gained enough control to stifle even the beginnings of a fresh street uprising. 

  Tyler Durden
  Fri, 02/05/2021 – 21:20

• Biggest Gun Control Bill In History Targets The Poor, Will Make Millions Of Felons Overnight
  Biggest Gun Control Bill In History Targets The Poor, Will Make Millions Of Felons Overnight

  Authored by Matt Agorist via TheFreeThoughtProject.com,

  HR127, known as the Sabika Sheikh Firearm Licensing and Registration Act introduced by Rep. Jackson Lee, Sheila [D-TX-18], is, without a doubt, the most tyrannical gun control bill ever proposed.

  Like all gun control measures, this bill would hit the poor and minority communities the hardest. Its massive scope would also turn tens of millions of legal, law abiding gun owners into felons overnight.

  

  As TFTP reported in December, before Joe Biden took office, his administration has major plans for eviscerating the Second Amendment. Biden has been an outspoken gun grabber and on his campaign website, he’s stated that he will use executive action to enforce gun control.

  On the site, Biden states that he will use executive action to “get weapons of war off our streets.” Calling an AR-style weapon a “weapon of war” is laughable given the fact that Biden, under president Obama, aided in the wholesale slaughter of countless innocent civilians in Afghanistan, Iraq, Yemen, Libya, and Somalia — using actual “weapons of war” like drone strikes, hellfire missiles, and sanctions.

  Nevertheless, the new boss — who is the same as the old boss, contrary to what many believe — is presiding over a Congress that will consider the most tyrannical gun control measures in the history of America, HR127.

  Former vice presidential candidate for the Libertarian Party, Spike Cohen points out that “HR127 would be most heavily enforced against those with the least ability to defend themselves in court: the poor, and minorities. It will also make things much worse in marginalized communities, where only police and criminals will have guns.”

  In a post to Facebook, Cohen narrowed down some of the bill’s most ominous points that would target every single gun owner in the country.

  1. Firearms License required for any new gun purchases or ownership transfers.

  • Licensee Must be 21, complete a 24 hour gun safety training course, and must undergo a psych evaluation.

  • Multi-tier license. Individual license for ownership and display of “antique” firearm, standard firearm license, and “military style” license.

  • Military license requires additional 24 hour safety course.

  • Licensing is revoked immediately for anyone indicted of a crime in which the sentence lasts longer than 1 year.

  This heavily discriminates against anyone who has ever seen a therapist or had to get mental health treatment, such as victims of abuse and people with depression, and veterans seeking care for PTSD. Depression and addiction are mentioned specifically as reasons for licensing denial.

  Also, gun licensing is expensive, which makes ownership less accessible for those who need their own protection most.

  2. Requires an $800 annual government insurance fee for all current and future gun owners, to be paid to the Attorney General EVERY YEAR.

  There is no grandfather clause, meaning this applies to anyone that owns a gun at all, not just those who purchase a new firearm after this passes.

  This fee will certainly go up each year. It’s yet another barrier for those in poverty to be able to defend themselves.

  3. Mandatory Nationwide Firearms Registration & Database

  • ALL firearms owned shall be registered under penalty of up to $150,000 and 15 years in prison.

  • Serial, make, model, date, identity of owner, and the location of where the firearm will be stored to be collected and maintained in a database by the US Attorney General.

  • Names and information of all those who may have access to the firearms shall be collected as well.

  • This information to be accessible by state, local, and federal police, military, as well as state and local governments.

  4. Ammunition and Magazine Bans

  • Bans .50cal and larger ammunition outright.

  • Bans all mags that hold more than 10 rounds

  This ammo is mostly used for hunting and is rarely used against people. The most common handguns and rifles use magazines that exceed this arbitrary limit, which makes TENS OF MILLIONS of law-abiding gun owners felons overnight.

  Illegal ownership of even a single round of banned ammo will result in up to $100,000 in fines AND 20 years in prison.

  This bill was originally presented last year and reinvented this year with a whole new level of tyranny added to it both in the government and out of it. For example, the registration data will be made public. Given the cancel culture mass hysteria-inciting media frenzy as of late, this list could be used by big tech and woke cults to target their political rivals. They could seek out this data and use it to implement blacklists, social media bans, and any other number of ways the cancel culture attacks those with whom they disagree.

  As we reported in December, many of these gun control measures are already on the president’s agenda, which go even further.

  One of Biden’s most ominous moves in regard to controlling guns is his push for “smart gun technology” that will require biometrics to fire in an ostensible move to “prevent unauthorized use.” In reality, however, this paves the way for bad actors, including the state and hackers, to be able to control, hack, or essentially turn off your gun, making it a paperweight.

  Biden also plans to pick up where Trump left off in regard to extreme risk laws, also called “red flag” laws. Under Biden’s plan, which is similar to the many plans implemented under Trump, family members or law enforcement officials will be able to make claims — many which involve no evidence — allowing a person’s guns to be temporarily taken until that person is declared fit enough to get them back.

  This attacks on the Second Amendment must be resisted. Please consider calling your representative and peacefully telling them to oppose this bill.

  Tyler Durden
  Fri, 02/05/2021 – 21:00

• Tokyo Olympics Gripped By New Scandal After Head Organizer Makes "Sexist Remarks"
  Tokyo Olympics Gripped By New Scandal After Head Organizer Makes “Sexist Remarks”

  Multiple “controversies” – not the least of which are looming pandemic risk and health concerns – are threatening to once again derail the Tokyo Olympics. The summer Olympics were already postponed from last year, a first in history, moved to July of this upcoming summer. But now a fresh scandal has again put the pressure and spotlight on the games and its organizers as one of the eldest members of the Olympic Committee is accused of making sexist comments. Reuters reports:

  Japan’s Olympic Games faced a “major issue” after the head of the local organizing committee made sexist remarks, Tokyo’s governor said on Friday, sending a clear signal the deepening controversy risked tarnishing the global event.

  

  83-year old Yoshiro Mori unleashed a “social media storm” this week which has since been picked up in a torrent of international reports by simply saying that women talk too much.

  Somewhat absurdly (given the multiple major other pressing issues and immense hurdles the Olympic Games are now facing amid a global pandemic), these are the reports now headlining across the world, as The Washington Post recaps:

  Yoshiro Mori, president of the Tokyo Olympic organizing committee, on Wednesday said women have an “annoying” tendency to make meetings run unnecessarily long in comments that he sought to retract Thursday.

  Speaking to members of the Japanese Olympic Committee with reporters present, Mori said “board of directors meetings with many women take a lot of time.”

  “When you increase the number of female executive members, if their speaking time isn’t restricted to a certain extent, they have difficulty finishing, which is annoying,” he said, as told by an Agence France-Presse translation of an Asahi Shimbun story.

  “Women are competitive,” Mori added. “When one person raises a hand, others think they need to speak up as well. That’s why everyone speaks.”

  “Some members of the committee reportedly laughed at Mori’s remarks…” WaPo noted further.

  Mori is currently under pressure to resign his post. Making matters worse the whole commentary which apparently may have been an attempt at humor was in response to a question centered on the Japan Olympic Committee’s (JOC) gender make up. Critics have said there’s not enough female representation.

  “I don’t speak to women much.”

  Tokyo Olympics chief Yoshiro Mori apologises but refuses to resign after making sexist remarks https://t.co/bw3PrVSune pic.twitter.com/zNww3U3d7H

  — AFP News Agency (@AFP) February 4, 2021

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

  The controversy has now escalated to be categorized as a matter of “safety” and “security”. The comments from the out of touch octogenarian caused Reuters to write this over-the-top line: “The incident has cast another dark shadow over the Games, postponed for a year due to the coronavirus pandemic, with just months left before the opening ceremony.”

  Tokyo’s female governor, Yuriko Koike, added fuel to the controversy by saying, “The mission of the metropolis and the organizing committee is to prepare for a safe and secure Games, and we are facing a major issue.”

  Meanwhile, in real news not subject to as much hyperventilating and over-dramatization, the International Olympic Committee is now mulling canceling the upcoming games altogether as it could be “too dangerous to proceed” amid the continuing coronavirus pandemic.

  “The IOC has the power to cancel,” IOC Canadian member Dick Pound said in a new interview this week, according to Bloomberg. “I’m sure that would be a decision to be made together with the Japanese government and the Japanese organizers on the basis of advice from the World Health Organization and other scientific data,” he added, explaining further it’s no longer a matter of merely postponing further: “We don’t have three choices anymore, we have only two – we go or we cancel.”

  Tyler Durden
  Fri, 02/05/2021 – 20:40

• SPAC Craze Goes To Wine Country
  SPAC Craze Goes To Wine Country

  Submitted by Market Crumbs,

  It’s almost every day that we write about a new SPAC deal. January saw the amount of money raised by SPACs jump 20-fold from last January to $24.26 billion, already accounting for 30% of last year’s $79 billion raised by SPACs.

  

  While SPAC deals have commonly targeted companies in the electric vehicle space, the list of companies that have gone public through this route is quickly growing.

  This week saw an interesting SPAC deal as Vintage Wine Estates has entered into a merger with Bespoke Capital Acquisition Corp. to become a publicly traded company.

  Vintage Wine Estates, which was founded 20 years ago, is one of the fastest growing U.S. wine producers with sales of nearly 2 million nine-liter equivalent cases annually. Vintage Wine Estates carries more than 50 brands that range in price from $10 to $150 per bottle.

  The winemaker touts profitability every year since inception, with 20% average annual revenue and EBITDA growth since 2010. The combination will see Vintage Wine Estates continue to be run by founder and CEO Pat Roney while the management team will remain in place.

  “Our advantaged scale within a highly fragmented wine industry, industry-leading DTC platform that positions us well in a post-COVID consumer world and premium brand portfolio provide a strong foundation to build upon and sustain robust long-term growth,” Roney said. “This transaction will not only enable us to invest behind our brands to drive market share where necessary, but it will also fuel the next phase of our rapid growth in the U.S. wine industry.”

  Vintage Wine Estates will use the combination to expand in the U.S. wine industry, which has seen sustained growth over the past 25 years and has room for more growth, according to the company.

  The combination will also bring the experience of former Diageo CEO Paul Walsh, who is the Executive Chairman of Bespoke Capital Acquisition Corp. and will serve as the non-executive Chairman of the combined company.

  “After evaluating over 100 companies, we are delighted to have identified VWE as the ideal merger partner,” Walsh said. “The Company represents a unique and compelling investment opportunity in the consumer staples space. VWE’s well-diversified portfolio of high-quality brands spanning all price points and differentiated omni-channel marketing approach bring great balance.”

  As SPACs continue to dominate, this is just one of the interesting examples of a company that has been given a fresh boost as it heads to the public markets.

  Tyler Durden
  Fri, 02/05/2021 – 20:20

• "The Open Kimono": NRA Bankruptcy Will Lead To Unprecedented Disclosure Of Org's Financial Habits
  “The Open Kimono”: NRA Bankruptcy Will Lead To Unprecedented Disclosure Of Org’s Financial Habits

  A forthcoming NRA bankruptcy may mark the first time critics of the association get a deep look into the inner-workings of the organization.

  As part of its coming bankruptcy, the NRA “will be forced to release a detailed list of cash payments it has made to insiders in the last year and any unusual property transfers it has made to anyone within two years,” Bloomberg notes. It will also have to disclose whether or not it had a 5% stake in any other businesses.

  The disclosure are relatively common for a bankruptcy proceeding, but the fact that the NRA has often played their cards close to their chest with how they run their business means that the volunteering of the information will be a break from the norm. 

  The U.S. Trustee will set up an official committee of unsecured creditors that will have the power to look into the NRA’s spending, the report notes. Howard Seife, head of the bankruptcy practice at the Norton Rose Fulbright law firm, said: “We have a technical term for it in the trade. It’s called the open kimono.”

  Dallas bankruptcy attorney John Penn said: “Each bit of information in that filing can open the door for more inquiries and discovery.”

  

  “Any time you are considering filing for Chapter 11 and taking advantage of the protections of the bankruptcy code, you need to be prepared for tremendous scrutiny of your operations and financial conditions,” Seife added. In addition, top members of the NRA may have to testify under oath. 

  The NRA has filed for bankruptcy as part of a strategy to resolve lawsuits it is facing, claiming it is “the subject of a political attack” from regulators in New York. The organization is hoping to reincorporate in Texas for a fresh start. New York Attorney General Letitia James is suing to dissolve the organization and is specifically targeting its executive Vice President, Wayne Lapierre. 

  James alleges that Lapierre spent over $1 million of NRA money on unauthorized flights and received inappropriate gifts. 

  The NRA’s lawyer, William Brewer, said: “The NRA will provide the information required by the bankruptcy schedules without hesitation. The truth is, most of its senior staff members, including CEO Wayne LaPierre, have no guarantees of future employment and have voluntarily taken pay reductions to help the NRA address the pandemic.”

  “The NRA will utilize all tools at its disposal to highlight the motivations of the NYAG. Clearly, the NRA believes this was a politically motivated attack – fueled by the NYAG’s opposition to the NRA’s political point of view,” he concluded.

  Tyler Durden
  Fri, 02/05/2021 – 20:00

• Calling For An American Ministry Of Truth – The US Media's Dystopian 2021
  Calling For An American Ministry Of Truth – The US Media’s Dystopian 2021

  Authored by Stephen Lendman via Global Research,

  The New York Times never misses an opportunity to miss an opportunity for truth-telling as it should be.

  It’s a notion long ago abandoned in deference to providing press agent services for powerful interests.

  At the same time, the Times finds new ways to disgrace itself.

   

  Calling for a US Ministry of Truth headed by a “reality czar” sounds ominously like what Orwell described in his dystopian 1984 novel that’s no longer fiction, saying:

  The Ministry of Peace concerns itself with war, the Ministry of Truth with lies, the Ministry of Love with torture and the Ministry of Plenty with starvation.

  These contradictions are not accidental, nor do they result from from ordinary hypocrisy.

  They are deliberate exercises in doublethink.

  Along with Big Brother mass surveillance and newspeak, Orwell’s Ministry of Truth was all about controlling the message, eliminating whatever conflicts with it, memory holes used for this purpose.

  The Times and other US major media operate this way now — a collective ministry of truth as described above.

  Featuring the official narrative exclusively, alternative views are filtered out and suppressed, free and open expression banned in their reports.

  In 1984, unnwanted material went down memory holes to “be whirled away (in) enormous furnaces…devoured by the flames,” said Orwell, adding:

  “(T)here were the directing brains who co-ordinated the whole effort and laid down the lines of policy which made it necessary that this fragment of the past should be preserved, that one falsified, and the other rubbed out of existence.”

  In the US and West, no Orwell-style memory hole is needed, no furnaces, no ceremonial book-burnings.

  Big Media in cahoots with diabolical government officials censor and eliminate truth-telling on what’s vital for everyone to know.

  What Times fake news called a US “reality crisis” amounts to urging greater state-sponsored censorship than already.

  What it called “the scourge of hoaxes, lies and delusions” are hard truths about US imperial wars, hazardous covid vaccines to be shunned, stolen Election 2020, unelected/cognitively impaired Biden unable to serve in any public capacity, the anti-Trump Jan. 6 Capitol Hill false flag, and other cutting-edge issues.

  What the self-styled newspaper of record calls “misguided beliefs” are indisputable facts important for everyone to know.

  A real “national reality crisis” exists because of Big Government in cahoots with Big Media – like the Times — serving privileged interests exclusively at the expense of most others.

  It’s because of US police state totalitarian rule on a fast track toward full-blown tyranny.

  It’s because the US no longer is open, free, and fair.

  It’s because hardline government is the mortal enemy of ordinary people — their health, well-being, safety, and fundamental freedoms being eliminated in real time.

  It’s because of US war OF terrorism, not on it, rages against ordinary people, wanting them exploited to serve privileged interests.

  It’s because America is no longer safe and fit to live in for most of its people.

  It’s because of the largely ignored greatest ever US Main Street Great Depression while wealth, power, and privileged interests never had things better.

  It’s because media like the Times suppress what’s crucial for everyone to know.

  What the Times called “violent extremism” is state-sponsored.

  What it calls a “truth commission” reflects shades of 1984.

  What it calls “domestic terrorists” are FBI, CIA, DHS, local police, and other elements of oppression to cow ordinary people into submission to a diabolical higher power in Washington.

  Truth-telling as it should be is polar opposite how the Times and other establishment media operate.

  As a collective lying machine, truth-telling is their moral enemy, what they’re hellbent for eliminating in whatever form it shows up.

  In today’s America, Big Brother mass surveillance, police state control, and ministry of truth Big Lies are part of the national fabric.

  That’s the ugly reality suppressed by the Times and other Big Media.

  The nation I grew up in long ago no longer exists.

  Growing tyranny heading toward becoming full-blown replaced it.

  That’s the ugly reality establishment media like the Times suppress – to their disgrace.

  Tyler Durden
  Fri, 02/05/2021 – 19:40

• The Curious Case Of The Hedge Fund That Made $700 Million On GameStop
  The Curious Case Of The Hedge Fund That Made $700 Million On GameStop

  While retail was “sticking it to the suits” – the actual suits at hedge fund Senvest Management were about to net a cool $700 million on GameStop’s run higher. Why? Because GME was the largest Senvest holding as of Oct 7, an oddity considering many within the hedge fund world at the time viewed it as a potential bankruptcy candidate – hardly a prudent move from a fiduciary standpoint, unless Senvest had a plan… and boy did it have a plan.

  

  But let’s back up.

  Senvest principles, Richard Mashaal and Brian Gonick, started buying GSE stock equity in September, the Wall Street Journal report reveals, just weeks before they had accumulated a massive 3.6 million shares making Gamestop the fund’s largest holding. Mashaal told the Journal: “When it started its march, we thought, something’s percolating here. But we had no idea how crazy this thing was going to get.”

  In retrospect, he just might have had an idea.

  GameStop turned into the firm’s most profitable ever investment by dollars earned and IRR. Senvest’s fund has ballooned from $1.6 billion to $2.4 billion as a result of GameStop’s move and, for the month of January, the fund was up 38.4%. Gamestop is also the reason why Senvest is currently the top performing fund tracked by HSBC’s popular Hedge Weekly report.

  

  Thomas Peterffy, chairman of Interactive Brokers, noted what many had suspected: “It is not just little people on the long side here. There are huge players playing both sides of GameStop.”

  

  He was right. Senvest says their interest in the name was “piqued by a presentation from the new GameStop chief executive at a consumer investment conference in January 2020.” The Journal writes:

  But as they spoke with management, sussed out competitors and noted the involvement of activists in the stock, including Chewy Inc. co-founder Ryan Cohen, they eventually started buying. By the end of October, Senvest owned more than 5% of the company, paying under $10 a share for the bulk of the stock.

  They thought that if GameStop could hold on until the next generation of videogame consoles came out and stoked demand for games and accessories, the company would get a boost. And they reasoned that if Mr. Cohen could help transform GameStop from a largely bricks-and-mortar operation into an online gaming destination, the company could be worth far more.

  Sure there are fundamentals, but we doubt that was the reason for the accelerated accumulation of GME stock by Senvest. Something tells us there were other factors that prompted the urgent buying spree, especially since the original “short burn of the century” article on Reddit which sparked the retail interest in the name, appeared in early September right around the time Senvest started acquiring shares, according to the Journal. One almost wonder if the two aren’t linked.

  The post reads: “Sup gamblers. Feel bad about missing the gain train on TSLA? Fear not – something much greater and stupider is here. You know Citadel? The MM that took all our money today? Well now we finally won’t be at the mercy of the MMs. Instead, we’re going to temporarily join forces with the Galactic Empire and hijack the death star.”

  The post then launches into a relatively sophisticated explanation of the hows and whys of orchestrating a short squeeze:

  The this turn around is going to make TSLA’s short burn look like warm afternoon tea.

  Why? Well, most short squeezes are mostly math. This one is special because we have math AND great underlying news.

  To be clear, this will happen whether or not we participate. I prefer us idiots to be a part of history. Here’s what’s up:

  Short interest:

  GME currently has between 85% – 99.8% short interest, depending on what site you use. For context, 20% is already considered high as the moon. TSLA and NFLX were around 30-40% at their peak. But GME’S ACTUAL SHORT INTEREST IS OVER 110%. 

  Here is a simple way of framing the timeline:

  – Senvest made $700MM on GME.

  – “Richard Mashaal and Brian Gonick started buying GameStop Corp. shares in September” – WSJ

  – the r/WSB post “Greatest Short Burn of the Century” hit on Sept 8 https://t.co/fKOc2NDeb8https://t.co/HQuZMcoAEG pic.twitter.com/a3yJOiXkUg

  — zerohedge (@zerohedge) February 5, 2021

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

  Just a few months later, in December the GameStop long thesis got a major boost among both the retail (outside of WSB) as well as C-grade institutional community, when Hedgeye, which sells research to clients, pitched the name.

  On Dec. 17, when GME stock closed at $14.83, Hedgeye told its clients that GameStop was one of their “Best Ideas” and held a presentation as to why the equity, then trading at $14.83 could eventually be worth $100. What Hedgeye’s clients did not know – according to the WSJ – is that Senvest had pitched the idea to them. 

  Of course, for Hedgeye it would be a knockout blow if it emerged that the firm wasn’t an “independent provider of research” but middle-man and facilitator for hedge funds who had put on trades and then used Hedgeye’s client network as an amplification system… similar to what many accuse hedge funds of doing to r/wallstreetbets right now. Which is why the advisory denied that the upgrade was promptly solely by Senvest’s whispers (we can only assume that Senvest is also a client): “I respect Senvest a lot. We vetted it independently and we came up with a similar conclusion,” said Hedgeye analyst Brian McGough said. 

  In any case, by late December – between wallstreetbets and Hedgeye clients, the thesis was already widely spreading among the retail community, a process that would eventually culminate with the explosion of the stock price in late January. Why? Because the prevailing narrative was one where one or more hedge funds would never be able to cover their shorts because there was not enough short available in the float to cover, a process the world first encountered with Volkswagen, leading to a huge squeeze.

  A squeeze, incidentally, which Senvest was all too familiar with. The WSJ writes:

  Messrs. Mashaal and Gonick had been on the wrong end of short squeezes before at Senvest. One case was with opioid maker Insys Therapeutics Inc., though they ultimately made money on their short position. GameStop’s stock could soar if it got caught up in a situation in which its rising price forced bearish investors to start buying back shares to curb their losses, they thought.

  They thought… and they were right. All they needed was the critical mass of buyers to ramp an initial buying cascade which would then trigger the squeeze and the rest is history. That’s precisely what happened in mid to late January, when the stock price exploded from $20 to over $500.

  Unable to believe their eyes (or perhaps knowing precisely how such a massive short squeeze would play out) Senvest was just waiting for the catalyst to dump it all. They got it on on January 26, when Tesla CEO Elon Musk joined the stock-pumping fray and Tweeted out: “GameStonk!!”. 

  “Given what was going on, it was hard to imagine it getting crazier,” Senvest’s Mashaal concluded.

  And here’s who made sure that a hedge fund would make $700MM on GME https://t.co/7ylfMYWF4P pic.twitter.com/CqdSQX8xJZ

  — zerohedge (@zerohedge) February 5, 2021

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

  So just a series of very lucky coincidences leading up to a record, $700 million payday, or a masterfully executed plan that was laid out and executed far better than most Hollywood scripts?

  We hope to have the answer once Congress holds its Gamestop hearings, although considering that Maxine Waters is in charge we won’t be holding our breath.

  Tyler Durden
  Fri, 02/05/2021 – 19:22

• Trump Says Lou Dobbs "Is & Was Great" After Fox News Cancels '#1 Business News' Show
  Trump Says Lou Dobbs “Is & Was Great” After Fox News Cancels ‘#1 Business News’ Show

  Update (2215ET): Former President Trump has issued a statement on Lou Dobbs show being cancelled:

  Thanks for your kind words Mr.President. God bless you and all the American patriots who make this country great. https://t.co/7aPPQMl898

  — Lou Dobbs (@LouDobbs) February 6, 2021

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

  *  *  *

  It’s probably just a coincidence, but…

  A day after voting software company SmartMatic filed a $2.7 billion defamation suit against Fox News and three of its hosts – Dobbs, Maria Bartiromo and Jeanine Pirro – over voting-machine-fraud claims, The LA Times reports that, according to a Fox News representative who confirmed the cancellation, Fox News has canceled “Lou Dobbs Tonight”.

  

  The show, which is described by the network as “the #1 news program on business television”, came under fire during the 2020 election after pushing claims of election fraud. 

  Additionally, Dobbs was forced to issue a fact-checking clip on his show in December 2020 after Smartmatic, a voting machine company, issued a legal letter regarding what it says was “false and defamatory statements and reports,” The Daily Beast previously reported.

  “As we said in October, Fox News Media regularly considers programming changes and plans have been in place to launch new formats as appropriate post-election, including on Fox Business,” a Fox News spokesperson said according to the LA Times.

  “This is part of those planned changes. A new 5 p.m. program will be announced in the near future.”

  Finally, The LA Times cited “people familiar with discussions” who suggested that Dobbs’ cancellation had been in the works prior to legal issues regarding the voting machine companies.

  “Lou Dobbs Tonight” is being renamed as “Fox Business Tonight” beginning next week. The show will see rotating guest hosts, according to the LA Times.

  Dobbs, 75, remains under contract at Fox News but he will in all likelihood not appear on the company’s networks again.

  Tyler Durden
  Fri, 02/05/2021 – 19:20

• TSA To Slap Mask-Mandate-Violators With $1,500 Fines
  TSA To Slap Mask-Mandate-Violators With $1,500 Fines

  Mask up on planes, or the Transportation Security Administration (TSA) will slap travelers with hundreds of dollars in fines. Repeated offenders could see penalties north of $1,500, according to a TSA press release. 

  “Based on substantial aggravating or mitigating factors, TSA may seek a sanction amount that falls outside these ranges. TSA has provided transportation system operators specific guidance on how to report violations so that TSA may issue penalties to those who refuse to wear a face mask,” the agency also said.

  

  Darby LaJoye, Senior Official Performing the TSA Administrator’s Duties, said TSA would “fully comply with the President’s Executive Orders, CDC guidance and the DHS National Emergency determination to ensure healthy and secure travel across all transportation sectors. This will help prevent further spread of COVID-19 and encourage a unified government response.” 

  Two weeks ago, President Biden signed an executive order requiring passengers to wear face coverings on planes. That means people who don’t wear masks could be slapped with fines, or worse, banned from traveling. 

  “As we continue to experience impacts from this pandemic, we are committed to this measure as the right thing to do for the TSA workforce, for our industry stakeholders and for passengers,” LaJoye said.

  The crackdown on mask-wearing has resulted in more than 2,500 passengers banned from planes for violating onboard mask policies. 

  The airline industry has been turning to mask enforcement as a way to regain confidence in air travel. Another confidence booster has been the introduction of “immunity passports” in Europe, which could be coming to the US later this year. 

  While there’s been an abundance of research to show masks don’t work against COVID-19, rules are rules, and if you want to fly and avoid being slapped with a fine, wear a mask. 

  Tyler Durden
  Fri, 02/05/2021 – 19:20

• Did You Make Janet Yellen Rich?
  Did You Make Janet Yellen Rich?

  Authored by MN Gordon via EconomicPrism.com,

  Up until the WallStreetBets crowd short squeezed Melvin Capital for a $7 billion loss, Robinhood had it made.  But losing billions is stressful.  And when your product blows up your customer the clucking that follows comes hot and heavy.

  One of the sweetest displays in the world, we’ve been told, is the bursts of digital confetti that shower down Robinhood’s investment app to celebrate the purchase of stocks, options, and cryptocurrencies.  These digital confetti bursts – in addition to spinning prices and scratch off rewards – are great entertainment.  So, too, is watching the price of bitcoin quoted in neon pink.  It just screams buy!

  Trading on Robinhood is designed to be both fun and exciting.  There are even freebie alerts.  It’s like playing Candy Crush.  Only the score is kept in dollars and cents.  And with a little practice you can strike it rich.

  The clucking for Robinhood CEO, Vlad Tenev, began on Thursday, January 28, at 3:30 am Pacific Time.  That’s when the National Securities Clearing Corporation (NSCC) informed his company that it had to put up $3 billion.  According to Tenev, that’s “an order of magnitude more than what it typically is.”

  But Tenev and the fellows at the NSCC handled the situation like professionals.  After several early morning phone calls they came to a nifty agreement…

  Robinhood would provide $700 million.  In lieu of the remaining funds, the company would restrict buying – and digital confetti bursts – of the WallStreetBets-fueled rocket launch of GameStop, AMC, and several other heavily shorted stocks.  That’s when the clucking really began.

  The Ultimate Catch

  The promise of something for free will always be an enticing marketing ploy.  Years ago, for example, when opening a new bank account at your local thrift, they’d kick in a free toaster.  Robinhood took this marketing strategy and adapted it to the digital age.

  When opening a Robinhood trading account, for instance, you have a 100 percent chance of getting a free stock.  When you link your bank account, and fulfill certain conditions, you get free stock.  When you invite friends…you get free stock.

  The free stocks are selected at random.  If you’re lucky, you’ll score a share of Apple or Visa.

  These free promotions are fun…and generally harmless.  Moreover, there are worse ways to acquire new customers.  If Robinhood wants to sprinkle free stock around, like digital confetti bursts, good for them.

  Yet everyone knows Robinhood’s ultimate freebie is its commission free trades.  Certainly, this goes counter to how brokerages have traditionally conducted business.  Hence, this ultimate freebie comes with the ultimate catch.

  On January 28, after Tenev’s early morning fireside chat with the NSCC, and after WallStreetBets had delivered a three day beat down to Melvin Capital, this ultimate catch was revealed with exacting clarity.  By restricting buying at this critical moment, Robinhood appeared to be making an explicit choice: Hedge funds over customers.

  And therein lies the kicker: The hedge funds are Robinhood’s customers; its users are the product.

  Before noon, Congressional members from Alexandria Ocasio-Cortez to Ted Cruz were cluck, cluck, clucking…

  Rigged Markets

  During the late stages of an epic bubble, fraud, folderol, grift, and graft, drip like honey from a mistresses lips.

  Behind Melvin Capital stands Citadel and Point72 Asset Management.  As Melvin Capital was getting short squeezed, Citadel and Point72 came to its rescue with $2.75 billion.

  Was this an act of fraternal benevolence?  Maybe.

  But a day or two later Robinhood restricted its users from buying the very stock – GameStop – that wrecked Melvin Capital.  Is it merely a coincidence that Citadel is also Robinhood’s biggest customer?

  You see, Robinhood, which offers commission free trades, makes its money by selling users’ trades to other large firms – like Citadel Securities – before they’re actually executed.  Those firms make money by effectively seeing what the retail investors on Robinhood are going to do before they actually do it, and acting accordingly.  The Financial Times explains:

  “Citadel Securities pays tens of millions of dollars for this order flow but makes money by automatically taking the other side of the order, then returning to the market to flip the trade.  It pockets the difference between the price to buy and sell, known as the spread.”

  If this skimming activity sounds like a rigged market it’s because it is.  What’s more, it’s making certain insiders ridiculously rich.

  Did You Make Janet Yellen Rich?

  Incoming Treasury Secretary Janet Yellen, who was Chair of the Federal Reserve from 2014 to 2018, is an insider’s insider.  During her brief hiatus from public life Yellen went on a spectacular speaking tour of the big Wall Street banks and corporations.

  In total, she raked in $7.2 million in speaking fees from places like Citi, Goldman Sachs, Google, City National Bank, UBS, Barclays, Credit Suisse, Salesforce, and more.  Not bad work, if you can get it.

  But what could she have possibly said that was so valuable?  Did she prove the existence of perpetual motion?  Did she, in fact, square the circle?

  

  For an insider’s insider, speeches are delivered with unspoken symbiosis.  The words uttered have little relevance.  The fees, however, lubricate the mechanism of future access.  It wasn’t much of a gamble to bet that Yellen would be Treasury Secretary under a Biden presidency.

  Another one of the firms Yellen spoke at happened to be Citadel – Robinhood’s biggest customer.  She got $810,000 for two speeches and a series of webinars.

  Now where did Citadel get the money to pay Yellen?

  Obviously, the company funded it via business profits.  But, remember, some of those profits came from skimming retail investor order flow purchased from Robinhood.  From what we gather, Schwab, TD Ameritrade, and other online brokers also sell order flow to Citadel.

  Thus, if you’ve made a trade over the last three years using an online brokerage, guess what?

  You’ve unknowingly contributed to making Janet Yellen rich.

  The cluckers in Congress have vowed to get to the bottom of the hullaballoo.  Somehow this will all be WallStreetBets’ fault…and the insiders – once again – will get off scot free.

  Tyler Durden
  Fri, 02/05/2021 – 19:00

• Head Of The Fed's Plunge Protection Team Resigns To Join Biden Administration
  Head Of The Fed’s Plunge Protection Team Resigns To Join Biden Administration

  Back in the summer of 2019, a series of unprecedented personnel shake ups rocked the New York Fed, also known as the most critical Fed due to its direct involvement with capital markets, which a year earlier had appointed former San Fran Fed president and career academic John Williams, a Ph.D economist and Fed lifer, as its new figurehead president to replace Bill Dudley. In a move that shocked Fed watchers, the two most important people at the NY Fed, Simon Potter and Richard Dzina, announced with just a few days’ notice that they would be quitting in what we subsequently learned was their termination by the inferiority complexed Williams.

  In late May, Mr. Williams announced the departure of Simon Potter, head of the markets desk since 2012, and Richard Dzina, head of financial services. They had joined the New York Fed in 1998 and 1991, respectively. People familiar with the matter said the exits had less to do with particular policy disputes than with tension over day-to-day management issues.

  The way Mr. Williams executed the abrupt departures rattled upper management and sank staff morale, current and former staffers said. Mr. Potter learned of the decision from Mr. Williams shortly before he was to deliver a keynote address in Hong Kong that had already been announced.

  At a going-away party at the New York Fed’s headquarters, Messrs. Potter and Dzina received an extended ovation that kept Mr. Williams waiting offstage to address attendees. “It was maybe three minutes,” said one attendee. “It is hard to describe how awkward the air felt.”

  Not surprisingly, just a few months later, the hapless Williams – now without Potter by his side – faced the biggest financial crisis in recent years (until the Covid pandemic of course), when the repo crisis struck and for a few critical hours NY Fed president Williams had no clue what to do or how to restore market confidence:

  Mr. Williams’s team was making its moves without key leadership after he ousted two veterans.

  * * *

  “Market confidence in the New York Fed markets desk is critical, and a series of events here have, let’s say, dinged confidence in the operations,” said Ward McCarthy, chief financial economist at financial-services company Jefferies LLC. “It’s important that the confidence issue be addressed before it becomes a more significant problem.”

  Mr. Williams in the interview defended the bank’s response, saying, “We diagnosed it right, and Lorie and her team worked with others to get that done and get it done quickly.”

  Some analysts said that the Fed ultimately made the right calls but that the incident showed officials had miscalculated the quantity of reserves needed in the system and how tight funding markets would get as a result.

  “The lack of response on Monday was unnerving,” said Mark Cabana, head of short-term interest-rate strategy research at Bank of America Merrill Lynch. “They came in on Tuesday, but they came in too late.”

  In any event, why was the unexpected departure significant?

  Because Simon Potter was the brains behind the actual execution of QE and the Fed’s various indirect trades (using a hedge fund and market maker that has made quite a few headlines in recent days) as the head of the NY Fed’s Markets Group, he was the head trader for the infamous plunge protection team (PPT). Potter’s intimate knowledge of how the Fed “interfaces” with the market also made him an extremely valuable commodity and is why one year later, Potter ended up joining one of the world’s best hedge funds, Izzy Englander’s Millennium Management.

  Eventually, more than half a year later, in February 2020 just as the covid pandemic was set to crush the stock market,  Williams finally found a replacement for Potter when he hired Daleep Singh, an economist who previously served at the Treasury Department, who was tasked with the massive challenge of running the NY Fed’ markets group; effectively a bureaucrat was in charge of micromanaging the most important capital markets in the world.

  

  But not for long, because fast forwarding to today, just a little over a year after he was hired, Singh announced his resignation from the NY Fed to join the Biden Administration as Deputy National Security Advisor and Deputy National Economic Council Director.

  Here is the full press release:

  The Federal Reserve Bank of New York today announced that Daleep Singh has stepped down from his role as Head of the Markets Group and will be leaving the Bank in mid-February to join the Biden Administration as Deputy National Security Advisor and Deputy National Economic Council Director. Anne Baum, Head of Central Bank and International Account Services, will serve as interim Head of the Markets Group and the New York Fed will launch a search for his successor in the coming weeks.

  “Daleep brought his dedication to public service and leadership skills to the New York Fed and had a meaningful impact during his tenure,” said John C. Williams, president and chief executive officer of the New York Fed. “Over the past year, Daleep has played a critical leadership role in the emergency facilities the Fed launched in response to COVID-19. I’m thrilled that he will continue to leverage his knowledge and expertise in support of economic policy at this important time.”

  Mr. Singh joined the New York Fed in February 2020. As Head of the Markets Group, he focused on bringing together policy, strategy, analysis and operational effectiveness. He also served as a member of the Executive Committee.

  Previously, Mr. Singh was Senior Partner and Chief U.S. Economist at SPX Capital, a global investment firm. He also worked at the U.S. Department of the Treasury from 2011 to 2017, serving as Acting Assistant Secretary for Financial Markets and Deputy Assistant Secretary for International Affairs.

  The problem is that while Singh had no prior capital markets experience and was merely a figurehead, his temporary replacement, Anne Baum is even more clueless.

  Which means that for the next several months, the world’s most important trading desk will be without a head trader. And while that shouldn’t be a problem if the markets keep going up, for the sake of the Biden administration – and crony capitalism in general – let’s hope that the NY Fed does not encounter another market crisis that needs more than a token academic figurehead at the helm to know what to do to restore market calm.

  Tyler Durden
  Fri, 02/05/2021 – 18:40

Digest powered by RSS Digest

• UK Vaccine Minister: All Over Age 50 Must Be Vaccinated Before Lockdown Lift Begins
  UK Vaccine Minister: All Over Age 50 Must Be Vaccinated Before Lockdown Lift Begins

  Submitted by PFW News,

  UK Vaccine Minister Nadhim Zahawi says that lockdown restrictions will not be lifted until all over the age 50 receive the COVID-19 vaccine, a decision he claims could push the return to normalcy into the summer.

  

  Zahawi, the top bureaucrat over the country’s vaccine roll out, clarified when speaking to The Sun on Tuesday that the government ideally wants to see the top 9 age categories vaccinated in the first phase of dose administration, which includes everyone over 50.

  “Is your message to the country and to your own back benches, forget mid-February, forget the 8th of March … not until we’ve done everybody over the age of 50 can we can we really talk about getting back to life, anything like normal?” a radio host with The Sun asked Zahawi, to which the Minister responded …

  “We’ll do that as quickly as possible … the prime minster has made it very clear that on the 22nd of February there will be a road map for how we intend to reopen the economy, beginning with schools on the 8th of March and then gradually the rest of the economy.”

  Zahawi would insist that the UK is on pace to have jabbed nearly everyone in the most Covid vulnerable group – those over 70 – within the next 11 days.

  Despite this group accounting for the vast majority of Covid deaths, the Minister claims this is still not enough to lift freedom crushing restrictions.

   “We want to reopen schools, reopen our economy, get our lives back, but never have to go back into another severe lockdown like the one we’re all experiencing and suffering from at the moment,” he said.

  The Vaccine Minister would espouse a slow moving method to lifting lockdown measures that relies heavily on data.

  “You’ve got to make sure that your vaccination program has protected the top nine categories in phase one – that is 99% of mortality.”

  Prime Minister Boris Johnson announced during a Tuesday Downing Street press conference that there would indeed be a road map for exiting lockdown presented on February 22.

  The people of England are currently strapped under harsh lockdown rules that restrict them from being social with anyone outside their home or “support bubble” without a government approved “reasonable excuse.”

  People breaking these rules can face fines, including an £800 penalty for those attending house parties of more than 15 people and a £10,000 fine for the organizers, reports BBC News.

  Tyler Durden
  Fri, 02/05/2021 – 02:00

• Mapping Global Income Support During COVID-19
  Mapping Global Income Support During COVID-19

  Income loss has impacted many during the COVID-19 pandemic. As Visual Capitalist’s Avery Koop details below, unemployment, reduced hours, office closures, and business shutdowns have prompted the need for mass income support.

  Globally, income from work fell $3.5 trillion in the first nine months of 2020, a change of -10.7% compared to the same period in 2019.

  In the map below, Our World in Data reveals the different levels of income support provided by governments across the globe.

  Income support, in this case, is defined as governments broadly covering lost salaries, or providing universal basic income or direct payments to people who have lost their jobs or cannot work. Levels of income support are changing over time.

  Small Government

  Many world governments have provided no support when it comes to a universally applicable scheme to cover lost income in their countries.

  Examples: (as of January 25th, 2021)

  •  Venezuela

  •  Syria

  •  Belarus

  •  Bangladesh

  •  Cambodia

  The majority of the governments providing no support are in low to lower-middle income countries. Based on a recent report from the International Labour Organization (ILO), lower-middle income countries have also seen the highest income losses, reaching 15.1% since 2019.

  Developing countries tend to experience a significant fiscal stimulus gap, in which they do not have the capacity to cushion lost income or lost jobs. In fact, it’s estimated by the ILO that low and lower-middle income countries would need to inject an additional $982 billion into their economies to reach the same level of fiscal stimulus as high income countries.

  A Helping Hand

  There are other governments that are giving out some help on a wide-scale basis, providing citizens less than 50% of their lost salaries:

  Examples: (as of January 25th, 2021)

  •  South Africa

  •  China

  •  Russia

  •  Thailand

  •  Australia

  South Africa’s unemployment rate was the highest in the world at 37.0% in 2020, an increase from 28.7% in 2019. Despite having one of the strictest lockdowns, the country has not been able to slow rising case counts or job losses. Now, South Africa is facing another threat, as a new strain of the novel coronavirus has taken hold in the nation.

  The Most Supportive Governments

  Finally, many world governments have offered higher amounts of income support, providing citizens with more than 50% of lost income:

  Examples: (as of January 25th, 2021)

  •  Canada

  •  United States

  •  United Kingdom

  •  Spain

  •  Saudi Arabia

  Regionally, it’s the Americas that have been hit the hardest, according to the ILO. The region experienced a 12.1% drop in labor income in 2020 compared to 2019, revealing the need for broad-based income support.

  U.S. unemployment went from 3.7% to 8.9% between 2019 and 2020. While the American government initially provided support in the form of the CARES Act, the policy response was recently extended through the more recent $900 billion relief deal.

  Income Support Post COVID-19

  While some countries have not been in extreme need of income support, others have been and haven’t received it. When looking at demographics, the hardest hit workers have been temporary workers, migrant workers, care workers, and self-employed vendors who have no labor contracts or employment insurance.

  As a result, some critics have used this as an opportunity to call for universal basic income (UBI). A three-year study is already being implemented in Germany, for example, to test out how effective this kind of income support would be in the post-pandemic period.

  Today, however, income is not a guarantee, and while in 2021 things may be returning to ‘normal,’ that does not mean that income levels will go back to normal.

  Tyler Durden
  Fri, 02/05/2021 – 01:00

• The Old Mantra Of "Too Big To Fail" Is Exposed As A Lie…
  The Old Mantra Of “Too Big To Fail” Is Exposed As A Lie…

  Authored by Brandon Smith via Alt-Market.us,

  It is a general rule that corrupt economies tend to operate on faith and not on fundamentals. And to be clear, it’s not so much about naive faith that the system is stable or functional. No, it’s more about the masses having faith that the corruption and instability will never be derailed. Most people are not as stupid as the establishment and central bankers think they are – Almost everyone knows the system is broken, they just refuse to consider the possibility that the fraud will be disrupted, or that it will be allowed to fail.

  The old mantra “too big to fail” is a lie. NOTHING is too big to fail, and that includes the US economy, the dollar and the elaborate Kabuki theater that keeps them both afloat. All it takes is a single moment, an epiphany that the Ponzi scheme is unsustainable rather than unstoppable.

  I’m reminded specifically of the inflationary crisis of Argentina in 2001 – 2002.

  Argentina’s economy was highly dependent on foreign capital inflows, and its currency peg to the US dollar, not to mention they were precariously reliant on support from the IMF. The IMF openly validated the government of Argentina and their currency peg model, but foreign capital began to decline and the peg became unsustainable. Without tangible growth in manufacturing and a strong middle class, an economy cannot survive for long. A top down system based on illusory “financial products” and creative accounting is doomed to crash eventually.

  All it took was for the IMF to criticize the policies they initially endorsed and announced that they were removing financial aid, and all hell broke loose in Argentina.

  Almost overnight the Argentina peso plunged in value, interest rates spiked and inflation struck hard. People poured into the streets and civil unrest erupted. The IMF would later admit it made “errors” in its handling of the Argentina situation, but this was simply spin control designed to protect them from further scrutiny. The IMF avoided most of the blame and has been growing into a monstrous global centralization machine ever since.

  I think we are witnessing the beginning of a similar end of mass faith in fraud in the US. The recent Robinhood short squeeze event as well as the current decoupling of physical silver prices from the paper ETF market have accelerated the timetable. Not surprisingly, these moves have forced the establishment to intervene to some extent to essentially stop renegade traders from freely investing. Accusations are flying and deplatforming has ensued. The idea that the system is a functional fraud is gone; The world now knows it is a dysfunctional fraud, and collapse cannot be very far behind.

  Furthermore the collusion between banks, hedge funds and Big Tech is blatantly revealed. These relationships are supposed to remain hidden in the ether. They are obvious to anyone with any financial knowledge and sense, but they aren’t supposed to be wielded in the open. Conspirators aren’t supposed to admit to the conspiracy? Right?

  Some people might say the establishment has been forced to unmask by activists. Maybe. But, as I have been warning for many years, when criminals start openly admitting to their crimes it is probably because they think that it’s too late for anyone to do anything about it.

  The point is, bankers and globalists have ways of avoiding responsibility for the disasters they engineer. When the con-game breaks, they always have patsies to take the fall.

  This sets up a bizarre dynamic in which the money elites that constructed the economy like a time-bomb are treated like victims (or heroes) and the people telling the truth about the fraud are treated like villains and criminals. Are activist stock market traders and silver market guerrillas to blame for any crisis that erupts in the near future? No, of course not, but they will be blamed anyway.

  That said, propaganda narratives and scapegoats may not be enough to save the bankers this time. They will never allow a major fiscal crash to develop in a vacuum. They need more cover, and they need to have the means to lock down the public to prevent civil unrest or rebellion from spilling over into their backyards. I have long suspected that the covid pandemic is a useful tool in this regard. As I noted in my article ‘How Viral Pandemic Benefits The Globalist Agenda’, published in January of 2020:

  “Even if a pandemic does not kill a large number of people, it still disrupts international travel, it disrupts exports and imports, it disrupts consumer behavior and retail sales, and it disrupts domestic trade. If it does kill a large number of people, and if the Chinese government’s response is any indication, it could result in global martial law. With many economies including the US economy already in a precarious balancing act of historic debt vs. crashing demand and useless central bank repo market intervention, there is little chance that the system can withstand such a tsunami…”

  As we all know, medical martial law in the name of “public health” is being established in most countries regardless of the actual death rate. The insane globalist rantings of the World Economic Forum and Klaus Schwab have been very revealing; Schwab and other elites have even called the pandemic a “perfect opportunity” to execute there agenda for the “Great Reset”.

  However, the globalists are highly fallible, and mistakes in judgment have been made. During the Event 201 pandemic wargame on a coronavirus outbreak (conveniently held two months before the real thing happened), the elites forecast at least 65 million initial deaths globally from such a virus. We are a year into the pandemic and nowhere near that kind of death rate. In fact, the death rate is so minuscule (0.26%), that the public is beginning to realize the lockdown mandates are pointless.

  In the US, conservative states are moving on and keeping their economies wide open. Half the population is refusing to take the vaccines, and many members of law enforcement are refusing to implement lockdown policies. I don’t think this is what the globalists expected at all. They needed mass fear and they are getting mass defiance.

  They’re going to need a bigger threat, or a bigger virus.

  

  This is why I have been repeatedly warning that the talk of reopenings by Biden and other democrats is going to be very short lived. I have predicted that Biden will attempt a federal lockdown similar to the Level 4 lockdowns used in Europe and Australia after a couple of months of relative calm. I based this prediction on the covid “mutation” narrative being spread right now by the mainstream media and establishment cronies like Anthony Fauci. It is not hard to see where this is headed.

  The globalists must have the “legal” option of restricting public movement as well as large gatherings, and they must have the option of surveillance on individuals 24/7 through contact tracing. This is the only way to prevent rebellion against the Reset and rising anger due to economic turmoil. The veil has been lifted, the conspiracy is being widely broadcast. Martial law alone would only inspire more dissent, medical tyranny in the name of “saving lives” is the ONLY play the globalists have. They have to have help from a large portion of the citizenry, so they must maintain the appearance that they are operating from the moral high ground.

  The covid mutation story is clearly the next play, and Bank of America economists appear to agree with me. They recently stated that they see little optimism in terms of a reopening of the economy, and that hard lockdowns will return, possibly in March or April.

  Another factor to consider is that the economic crash will have to reach a peak soon because Joe Biden now resides in the White House. If the crash happens in the near term, activist investors can be blamed, Trump can be blamed, and conservatives and liberty activists can be blamed. If the crash happens a year or two from now, only Biden and the globalists will get the blame.

  Without lockdowns and scapegoats the scenario will end very badly for the globalists. It might end badly for them anyway. Be ready for more chaos by Spring; I suspect the elites are getting desperate, and if they allow America to go back to normal and for the pandemic to end with a whimper they will never get another chance at their precious Reset.

  *  *  *

  If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.

  Tyler Durden
  Fri, 02/05/2021 – 00:00

• Meet The Robot Designed To Replace Forklifts 
  Meet The Robot Designed To Replace Forklifts 

  San Jose-based robotics company Fetch unveiled the latest robot to replace human forklift drivers in warehouses, called PalletTransport1500, according to a company press release. 

  The PalletTransport1500 is a square-like robot capable of lifting pallets weighing up to 2,500 pounds. The robot is powered by Honeywell Intelligrated’s Momentum software suite designed to automate warehouses. 

  

  Fetch claims that forklifts are the most significant safety risks in warehouses, resulting in 100,000 injuries every year. Here’s a tweet from the company showing how the robot works. 

  Our new autonomous warehouse robot is designed to replace forklifts—which are involved in about 100K accidents every year.

  Meet PalletTransport1500, designed to sport payloads of up to 2,504 pounds 🦾🤖

  See it in action: https://t.co/kjyTKR4Yuy pic.twitter.com/pmow5B00zG

  — Fetch Robotics (@FetchRobotics) January 29, 2021

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

  Fetch Chief Product Officer Stefan Nusser said, “even the most well-managed distribution centers are struggling to keep up with the ongoing growth of e-commerce, which is putting tremendous stress on facilities and warehouse associates to move goods in and out of facilities at record speed.” 

  “By combining Fetch’s new PalletTransport1500 with Honeywell Intelligrated’s Momentum, distribution and fulfillment centers will now be able to orchestrate every aspect of automated warehouse execution for maximum facility efficiency and safety,” Nusser said. 

  While Amazon has been hiring hundreds of thousands of warehouse employees, we’ve been documenting the proliferation of warehouse robots, slated to take human jobs in the coming years (see: here & here). 

  To sum up, the robot is designed to remove humans from warehouses. We’ve warned readers over the years that a wave of automation and artificial intelligence will displace millions of jobs. 

  Tyler Durden
  Thu, 02/04/2021 – 23:40

• The Great Reset, Part IV: "Stakeholder Capitalism" Vs. "Neoliberalism"
  The Great Reset, Part IV: “Stakeholder Capitalism” Vs. “Neoliberalism”

  Authored by Michael Rectenwald via The Mises Institute,

  Read Part I: Reduced Expectations And Bio-Techno-Feudalism here…

  Read Part II: Corporate Socialism here…

  Read Part III: Capitalism With Chinese Characteristics here…

  Any discussion of “stakeholder capitalism” must begin by noting a paradox: like “neoliberalism,” its nemesis, “stakeholder capitalism” does not exist as such. There is no such economic system as “stakeholder capitalism,” just as there is no such economic system as “neoliberalism.” The two antipathetic twins are imaginary ghosts forever pitted against each other in a seemingly endless and frenzied tussle.

  

  Instead of stakeholder capitalism and neoliberalism, there are authors who write about stakeholder capitalism and neoliberalism and companies that more or less subscribe to the view that companies have obligations to stakeholders in addition to shareholders. But if Klaus Schwab and the World Economic Forum (WEF) have their way, there will be governments that induce, by regulations and the threat of burdensome taxation, companies to subscribe to stakeholder redistribution.

  Stakeholders consist of “customers, suppliers, employees, and local communities” in addition to shareholders. But for Klaus Schwab and the WEF, the framework of stakeholder capitalism must be globalized. A stakeholder is anyone or any group that stands to benefit or lose from any corporate behavior—other than competitors, we may presume. Since the primary pretext for the Great Reset is global climate change, anyone in the world can be considered a stakeholder in the corporate governance of any major corporation. And federal partnerships with corporations that do not “serve” their stakeholders, like the Keystone Pipeline project, for example, must be abandoned. Racial “equity,” the promotion of transgender agendas, and other such identity policies and politics, will also be injected into corporate sharing schemes.

  If anything, stakeholder capitalism represents a consumptive worm set to burrow into and hollow out corporations from within, to the degree that the ideology and practice find hosts in corporate bodies. It represents a means of socialist wealth liquidation from within capitalist organizations themselves, using any number of criteria for redistribution of benefits and “externalities.”

  But don’t take my word for it. Take one David Campbell, a British socialist (although non-Marxist) and author of The Failure of Marxism (1996). After declaring that Marxism had failed, Campbell began advocating stakeholder capitalism as a means to the same ends. His argument with the British orthodox Marxist Paddy Ireland represents an internecine squabble over the best means of achieving socialism, while also providing a looking glass into the minds of socialists determined to try other, presumably nonviolent tacks.

  Campbell castigated Ireland for his rejection of stakeholder capitalism. Ireland held—wrongly, Campbell asserted—that stakeholder capitalism is ultimately impossible. Nothing can interfere, for very long, with the inexorable market demand for profit. Market forces will inevitably overwhelm any such ethical considerations as stakeholders’ interests.

  Ireland’s more-radical-than-thou Marxism left Campbell flummoxed. Didn’t Ireland realize that his market determinism was exactly what the defenders of “neoliberalism” asserted as the inevitable and only sure means for the distribution of social welfare? “Marxism,” Campbell rightly noted, “can be identified with the deriding of ‘social reform’ as not representing, or even as obstructing, ‘the revolution.’” Like so many antireformist Marxists, Ireland failed to recognize that “the social reforms that [he] derided are the revolution.” Socialism is nothing if not a movement whereby “the purported natural necessity represented by ‘economic’ imperatives is replaced by conscious political decisions about the allocation of resources” (emphasis mine). This political socialism, as against Marx’s orthodox epigones, is what Marx really meant by socialism, Campbell suggests. Stakeholder capitalism is just that: socialism.

  Ireland and Campbell agreed that the very idea of stakeholder capitalism derived from companies having become relatively autonomous from their shareholders. The idea of managerial independence and thus company or corporate autonomy was first treated by Adolf A. Berle and Gardiner C. Means in The Modern Corporation and Private Property (1932) and after them in James Burnham’s The Managerial Revolution (1962). In “Corporate Governance, Stakeholding, and the Company: Towards a Less Degenerate Capitalism?,” Ireland writes of this putative autonomy: “[T]he idea of the stakeholding company is rooted in the autonomy of ‘the company’ from its shareholders; its claim being that this autonomy…can be exploited to ensure that companies do not operate exclusively with the interests of their shareholders in mind.”

  This apparent autonomy of the company, Ireland argues, came about not with incorporation or legal changes to the structure of the corporation, but with the growth of large-scale industrial capitalism. The growth in the sheer number of shares and with it the advent of the stock market made for the ready salability of the of the share. Shares became “money capital,” readily exchangeable titles to a percentage of profit, and not claims on the company’s assets. It was at this point that shares gained apparent autonomy from the company and the company from its shareholders.

  Moreover, with the emergence of this market, shares developed an autonomous value of their own quite independent of, and often different from, the value of the company’s assets. Emerging as what Marx called fictitious capital, they were redefined in law as an autonomous form of property independent of the assets of the company. They were no longer conceptualized as equitable interests in the property of the company but as rights to profit with a value of their own, rights which could be freely and easily bought and sold in the marketplace….

  On gaining their independence from the assets of companies, shares emerged as legal objects in their own right, seemingly doubling the capital of joint stock companies. The assets were now owned by the company and by the company alone, either through a corporation or, in the case of unincorporated companies, through trustees. The intangible share capital of the company, on the other hand, had become the sole property of the shareholder. They were now two quite separate forms of property. Moreover, with the legal constitution of the share as an entirely autonomous form of property, the externalization of the shareholder from the company had been completed in a way not previously possible.
   

  Thus, according to Ireland, a difference in interests emerged between the holders of the industrial capital and the holders of the money capital, or between the company and the shareholder.

  Nevertheless, Ireland maintains, the autonomy of the company is limited by the necessity for industrial capital to produce profit. The value of shares is ultimately determined by the profitability of the company’s assets in use. “The company is, and will always be, the personification of industrial capital and, as such, subject to the imperatives of profitability and accumulation. These are not imposed from the outside on an otherwise neutral and directionless entity, but are, rather, intrinsic to it, lying at the very heart of its existence.” This necessity, Paddy argues, defines the limits of stakeholder capitalism and its inability to sustain itself. “The nature of the company is such, therefore, as to suggest that [there] are strict limits to the extent to which its autonomy from shareholders can be exploited for the benefit of workers or, indeed, other stakeholders.”

  Here is a point on which the “neoliberal” Milton Friedman and the Marxist Paddy Ireland would have agreed, despite Ireland’s insistence that the extraction of “surplus value” at the point of production is the cause. And this agreement between Friedman and Ireland is exactly why Campbell rejected Ireland’s argument. Such market determinism is only necessary under capitalism, Campbell asserted. Predictions about how companies will behave in the context of markets are only valid under current market conditions. Changing company rules such that profitability is endangered, albeit, or even especially, from the inside out, is the very definition of socialism. Changing the way companies behave in the direction of stakeholder capitalism is revolutionary en se.

  Despite this insurmountable “neoliberal”/Marxist impasse, the notion of stakeholder capitalism is at least fifty years old. Debates about the efficacy of stakeholder capitalism date to the 1980s. They were stirred up by Friedman’s rejection of the “soulful corporation,” which reached its peak with Carl Kaysen’s “The Social Significance of the Modern Corporation” in 1957. Kaysen viewed the corporation as a social institution that must weigh profitability against a broad and growing array of social responsibilities: “there is no display of greed or graspingness; there is no attempt to push off onto the workers or the community at large part of the social costs of the enterprise. The modern corporation is a soulful corporation.” Thus, in Kaysen, we see hints of the later notion of stakeholder capitalism.

  Likely, stakeholder capitalism can be traced, although not in an unbroken line of succession, to the “commercial idealism” of the late nineteenth and early twentieth centuries, when Edward Bellamy and King Camp Gillette, among others, envisioned corporate socialist utopias via incorporation. For such corporate socialists, the main means for establishing socialism was through the continuous incorporation of all the factors of production. With incorporation, a series of mergers and acquisitions would occur until the formation of a singular global monopoly, in which all “the People” had equal shares, was complete. In his “World Corporation,” Gillette declared that “the trained mind of business and finance sees no stopping-place to corporate absorption and growth, except final absorption of all the World’s material assets into one corporate body, under the directing control of one corporate mind.” Such a singular world monopoly would become socialist upon the equal distribution of shares among the population. Stakeholder capitalism falls short of this equal distribution of shares but gets around it by distributing value on the basis of social and political pressure.

  Interestingly, Campbell ends his argument, rather undogmatically, by stating unequivocally that if Friedman was right and “if these comparisons [between shareholder and stakeholder capitalism] tend to show exclusive maximization of shareholder value to be the optimal way of maximizing welfare,” then “one should give up being a socialist.” If, after all, the maximization of human welfare is really the object, and “shareholder capitalism” (or “neoliberalism”) proves to be the best way to achieve it, then socialism itself, including stakeholder capitalism, must necessarily be abandoned.

  Tyler Durden
  Thu, 02/04/2021 – 23:20

• San Bernardino Cops Bust Man Who 3D Printed Guns From Garage 
  San Bernardino Cops Bust Man Who 3D Printed Guns From Garage 

  San Bernardino County Sheriff’s Department tweeted a short video Wednesday of deputies serving a “warrant” related to a previous traffic stop. Deputies uncovered a 3D-printer used to make illegal firearms, otherwise known as “ghost guns.” 

  “Deputy Ryan Rappisi and our patrol team served a search warrant today related to a previous traffic stop. The usual dope and illegal firearms were recovered, along with a 3D printer capable of producing plastic gun frames for ghost guns. Awesome job!!” tweeted Captain Matt Griffith. 

  The video shows what appears to be an inexpensive 3D printer, likely the Ender-3 V2 3D Printer. Deputies removed the printer, and multiple printed lowers for pistols from the suspect’s garage. 

  Deputy Ryan Rappisi and our patrol team served a search warrant today related to a previous traffic stop. The usual dope and illegal firearms were recovered, along with a 3D printer capable of producing plastic gun frames for ghost guns. Awesome job!! pic.twitter.com/wTw64cbLr7

  — Captain Matt Griffith (@SBCSDmgriffith) February 4, 2021

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

  Griffith provided no further information on the 3D-printed gun operation. There was no word on if the guns were used by the suspect or supplied to criminal gangs. Without a serial number, police and federal agencies have no way of tracing ownership. 

  Not too long ago, a 29-year-old Australian man was charged with supplying 3D-printed pistols to criminal gangs across Sydney. 

  The rise of 3D printing guns is nothing new. As early as 2014, we told readers about Cody Wilson’s libertarian non-profit Defense Distribute using a $1,200 computer-controlled milling machine designed to let anyone make the aluminum lower body of an AR-15 rifle at home. 

  … and there’s some bad news for the “ghost gun” community, expect the Biden administration to crack down on these untraceable weapons by passing legislation requiring that purchasers of 80% lowers or 3D printing codes to pass federal background checks. 

  Facing gun and ammo shortages during the pandemic, internet searches among Americans for 3D printed pistols surged. 

  

  It’s only a matter of time before the crackdown of ghost guns begin. 

  Tyler Durden
  Thu, 02/04/2021 – 23:00

• Is China Preparing To Blitz The Moon?
  Is China Preparing To Blitz The Moon?

  Authored by Rick Fisher via The Epoch Times,

  When the Chinese Communist Party (CCP) commences its manned Moon program it may do so in a big way, as its goal is to control the Earth-Moon system to enforce its hegemony on Earth and then to regulate access to the future “Space Economy.”

  

  This means the United States must exploit what may be temporary advantages in technology to create an early dominant lunar presence for the democracies.

  For most of the last decade, the Chinese regime has been peddling the idea that its manned Moon program may not start until around 2030. This appeared to be confirmed by Chinese revelations that its main Moon mission space launch vehicle (SLV), the China Aerospace Science and Technology Corporation (CASC) Long March-9, would not be in service until about 2030.

  But now it is possible to assess that China may get there well before 2030. China began to reveal a possible acceleration of its Moon plans in November 2018, when it revealed a new 5-meter diameter manned SLV with a three parallel booster configuration, like the 63-ton to Low Earth Orbit (LEO) SpaceX Falcon Heavy. Few details were revealed at the time, not even its name, so Chinese space enthusiasts dubbed it the “921 Rocket” after China’s manned “921 Program” from 1992.

  Then, in September 2020, an official subordinate to the Armaments Department of the Central Military Commission of the People’s Liberation Army, which controls China’s space program, officially confirmed for the fist time that China had an active manned Moon program, and was developing a new manned Moon Lander, and the new manned SLV. This is the 921 Rocket designed to loft about 70 tons to LEO, and about 25 tons to the Moon.

  It is possible that future versions of this SLV will feature reusable first stages like Falcon Heavy, helping China to significantly reduce the cost of sending people and supporting payloads to the Moon.

  The interest and attention paid to this new rocket caused some Chinese observers to speculate that the Long March-9 program has possibly been abandoned. But this was put to rest by a Nov. 26, 2020 report in China Daily that stated, “China Aerospace Science and Technology Corp [CASC] has estimated that about 10 Long March 9s will be needed each year from 2030 to 2035 in China to serve the nation’s robust demand for heavy-lift rockets.”

  This means that the Chinese regime may be planning to build 60 of its Long March-9 super heavy space launch vehicles (SLVs) over a period of six years. This has huge implications for China’s ambitions to build a dominant presence on the Moon and to begin colonizing Mars.

  While it is not yet clear that the CCP leadership has approved such plans, CASC would likely not be disclosing such SLV requirement numbers without some level of approval or encouragement from Party leaders.

  China Daily also stated, “The super-heavy rocket will be 93 meters tall, have a liftoff weight of 4,140 metric tons, and a thrust power of 5,760 tons. Its core stage will be about 10 meters in diameter … will be able to transport spacecraft with a combined weight of 140 tons to a low-Earth orbit … will also be able to place spaceships weighing up to 50 tons in an Earth-Moon transfer trajectory for lunar expeditions.”

  Other Chinese sources indicate that other possible versions of the Long March-9 could loft 65 ton payloads to the Moon.

  

  The Jiuquan space center in the Gobi Desert in Jiuquan, northwest China’s Gansu Province, on June 11, 2013. (AFP/AFP/Getty Images)

  Such limited data, however, does offer some idea for how rapidly China might populate the Moon. One might start by estimating that China devotes 40 of the potential 60 Long March-9’s to Moon missions, with the remaining to be used to support a second-generation Low Earth Orbit space station, and to begin sending people to Mars.

  The 50 square meter interior and 22.5-ton Tianhe module that could be launched by April for China’s new space station can support a crew of three. Perhaps a Moon base of four similar size modules might support a crew of six people. Assuming a Long March-9 could transport two Tianhe size Moon base habitat modules to the Moon, then 20 Long March-9 missions might begin the building of 10 separate Chinese Moon bases.

  The other 20 Long March-9 missions could transport the Moon rovers, power systems, communication systems, mining equipment, and Moon production systems that would enable full exploitation of the Moon’s resources. This, in turn, could accelerate the Chinese regime’s ambition to build very large space-based solar power satellites to achieve energy independence on Earth.

  Such potential Chinese Moon “blitz” ambitions are of concern because it is also possible that water-ice, the most important early lunar resource objective, may be available only in a small number of locations at the Moon’s South Pole. Remember, the CCP is capable of “imperialism” as in the South China Sea.

  In March 2019, the Trump Administration set a goal of getting to the Moon by 2024, which does not appear realistic given Congressional reluctance to provide additional funding. The U.S. National Aeronautics and Space Administration (NASA) is developing its non-reusable Space Launch System (SLS) superheavy SLV that could send 27 to 46 tons of cargo to the Moon. It is a classic risk-adverse NASA program but its projected payload cost to the Moon is about $20,000 a kilogram.

  Starship could be ready for Moon missions by 2022 to 2023 and has been selected by NASA as a possible Moon lander for its Artemis Program to return to the Moon. But it offers a potential amazing strategic advantage, if projections are correct, of transporting payloads to the Moon for about $2,000 a kilogram.

  Perhaps China’s potential plans to build such a large number of Long March-9 super heavy SLVs may be their response to the Starship, along with an accelerating investment in their own reusable SLVs.

  This only redoubles the need for Starship to succeed so that the United States, its allies, and partners can use it to build a sufficient Moon presence before China does, to have a better chance of deterring the CCP from lunar imperialism and aggression. The advantages offered by Starship, if quickly exploited by resolute U.S. leadership, could help thwart the Chinese regime’s hegemonic ambitions.

  Tyler Durden
  Thu, 02/04/2021 – 22:40

• US Navy Tests 3D Printers In Move To Shore Up Supply Chain 
  US Navy Tests 3D Printers In Move To Shore Up Supply Chain 

  The race is on, and the US military is preparing to shore up its complex supply chains with 3D printers. The military wants to transform how supplies are deployed in a conflict. 

  The US Naval Postgraduate School (NPS) partnered with Xerox to pilot test the Xerox ElemX Liquid Metal 3D printer on its university campus, according to 3D Printing Industry. 

  

  Naresh Shanker, Xerox Chief Technology Officer, said the US military supply chain is very complex, and NPS understands future manufacturing challenges as supply chains between the US and China are fracturing as trade tensions increase.

  “This collaboration will aid NPS in pushing adoption of 3D printing throughout the US Navy, and will provide Xerox valuable information to help deliver supply chain flexibility and resiliency to future customers,” Shanker said. 

  The Collaborative Research and Development Agreement (CRADA) between Xerox and NPS will one day allow the Navy to print 3D parts and equipment on demand, and on the modern battlefield. 

  NPS students will experiment with the Xerox ElemX Liquid Metal 3D printer. They will learn how to design and create prototype parts on the device. 

  “From the age of sail to the nuclear era, sailors have been fixing things at sea so they can complete the mission,” said NPS President, Ann Rondeau. “This partnership is about the strategic ability of the navy to have sailors on ships with the capability through creativity and technology to advance their operations at sea.” 

  Rondeau said, “through collaboration, NPS and Xerox are helping build a Navy for the 21st century.” 

  Xerox’s 3D printer could soon allow the Navy to fabricate military parts without worrying about vulnerabilities in its supply chains. 

  “The NPS Alumni Association and Foundation-supported bringing the ElemX liquid metal printer to NPS because it will enable soldiers, sailors, airmen, and marines to solve their problems where they are, when problems occur,” said retired US Marine Corps Colonel and Vice President of the NPS Alumni Association and Foundation, Todd Lyons. 

  The CRADA between Xerox and NPS will transform the supply chain and how the Department of Defense operationally plans for war. 

  The US military has already integrated 3D printers into operations by printing missile parts and helicopter parts.

  In a separate report, BofA’s Francisco Blanch told clients, in a note, that for many years, America levered its economic and military might to secure global supply chains. Still, as the world becomes a more fractured place, the military has turned to new technologies to stay ahead of China.

  Blanch shows the US military tremendously outspends the Chinese but that gap could be closing by the end of the decade.

  

  Readers may recall, the Centre for Economics and Business Research warns China could overtake the US to become the world’s largest economy in 2028, five years earlier than previously anticipated, after weathering the virus pandemic much better than the US. 

  To sum up, the US must rapidly modernize its force or it will lose the great power competition. 

  Tyler Durden
  Thu, 02/04/2021 – 22:20

• Head Of Strategic Command Warns Nuclear War With Russia, China "A Real Possibility"
  Head Of Strategic Command Warns Nuclear War With Russia, China “A Real Possibility”

  Authored by Dave DeCamp via AntiWar.com,

  The head of US Strategic Command (STRATCOM) warned that a nuclear war with Russia or China is a “real possibility” and is calling for a change in US policy that reflects this threat.

  “There is a real possibility that a regional crisis with Russia or China could escalate quickly to a conflict involving nuclear weapons, if they perceived a conventional loss would threaten the regime or state,”  Vice Adm. Charles Richard wrote in the February edition of the US Naval Institute’s monthly magazine.

  

  Richard said the US military must “shift its principal assumption from ‘nuclear employment is not possible’ to ‘nuclear employment is a very real possibility,’ and act to meet and deter that reality.”

  The STRATCOM chief said Russia and China “have begun to aggressively challenge international norms and global peace using instruments of power and threats of force in ways not seen since the height of the Cold War.”

  Richard hyped up Russia and China’s nuclear modernization, calling for the US to compete with the two nations. When it comes to China’s nuclear weapons, the US and Russia have vastly larger arsenals. Current estimates put Beijing’s nuclear arsenal at about 320 warheads, while Washington and Moscow have about 6,000 warheads each.

  Even if Beijing doubles its arsenal over the next decade, as the China hawks are predicting, it will still be small compared to Washington’s. The US would have to eliminate a good amount of its arsenal to convince Beijing to participate in arms control agreements.

  Since STRATCOM is the command post that oversees Washington’s nuclear arsenal, its commanders are always overplaying the risk of nuclear war and asking for more money to modernize the stockpile. But with the US prioritizing so-called “great power competition” with China and Russia and an increased US military presence in places like the South China Sea, the Arctic, and the Black Sea, the threat of nuclear war is rising.

  Tyler Durden
  Thu, 02/04/2021 – 22:00

• January Payrolls Preview: Beware A Big Beat
  January Payrolls Preview: Beware A Big Beat

  After last month’s dismal payrolls report, according to which the US labor market contract by a whopping 140K workers in December (primary as a result of 372K restaurant workers losing their jobs amid the latest round of covid shutdowns), renewed optimism has emerged that the worst is over for the US market and that tomorrow when the BLS reports the January payrolls, the surprise will be solidly to the upside.

  Or maybe not all that solidly: as Newsquawk reports, the expectation is for headline nonfarm payrolls to rebound in January from the negative reading in December, but analysts do not seem convinced that January’s data will fully pare back the December downside, despite increasingly constructive labor market signals. While initial jobless claims data had worsened (until today when it unexpectedly smashed expectations), continuing claims data has improved; the ADP’s gauge of payrolls surprised to the upside in January, raising hopes that similar can be seen in the BLS report; within the ISM business surveys, the employment subcomponents improved in both the services and manufacturing sectors, the former rising back into growth territory.

  Further propping up the optimistic view, earlier today Goldman raised its nonfarm payrolls estimate from 125K to 200k, above the consensus of +100k, due to “stabilization in dining activity and in the severity of business restrictions” which suggests a smaller or minimal drag from the coronavirus relative to December. While Big Data employment signals were mixed in the month, the generally showed stabilization or improvement. Goldman also expects fewer seasonal layoffs of retail, leisure, and temp help workers, due to already-depressed employment levels in those industries (the BLS seasonal factors embed a decline of roughly 1.2mn workers).

  On the other hand, consumer surveys have not signaled that Americans are more optimistic about labor market conditions in January. Incidentally, a far worse print would be precisely what the market wants: from a trader’s perspective, the reaction to the data – particularly in the event of a big upside beat or a big downside miss – will solidify the stimulus debate as the argument that good data could be bad for stimulus prospects gains traction amid the improvement seen in some economic metrics, COVID trends, and vaccination rollouts recently. Alternatively, a huge miss would accelerate the passage of the Biden stimulus plan.

  With that in mind, this is what consensus expects tomorrow:

  • Nonfarm payrolls:. +100k (range -250k to +450k) prev. -140k
    • Private payrolls:. +50k, (range -120k to +350k) prev. -95k
    • Manufacturing payrolls: +30k (range 0 to +77k) prev. 38k;
  • Unemployment rate: 6.7% (range 6.5% to 7.0%) prev. 6.7%
  • Average earnings m/m: +0.3% (range -0.4% to +0.8%) prev. 0.8%
  • Average earnings y/y: +5.1% y/y (range 4.5% to 6.7%) prev 5.1%

  A look at some of the factors behind the growing consensus view that the job market is on the mend, courtesy of Newsquawk:

  JOBLESS CLAIMS: The read from the weekly initial jobless claims data is mixed: in the week that corresponds to the BLS survey period, claims printed 914k vs 892k going into the December jobs report; continuing claims, however, have eased to 4.99mln from 5.53mln going into the December report. In the January survey window, Pandemic Unemployment Assistance claims decreased in the week by 20k, taking it to 427k – while an encouraging development, it is still higher than the 398k in the December survey window. Through a broader lens, the four-week moving average for initial jobless claims ticked up to 851.75k going into the January jobs report (vs 814.25k going into the December report), although the continuing claims trend improved, with its four-week moving  verage falling to 4.998mln heading into the January report (vs 5.534mln going into the December report).

  ADP: Payrolls company ADP’s gauge of January labor market conditions surprised to the upside, printing 174k vs an expected 49.0k, while the previous was revised up from -123.0k initially reported to -78k. After the data, Pantheon Macroeconomics said that given the noise in the data and the unreliability of the seasonals over the turn of the year, the recent trend in payrolls has been flat, adding that the ADP data has been close to the official payroll numbers in recent months, so a modest increase in Friday’s BLS number looks a decent bet. The consultancy looks for an aboveconsensus 200k reading, and ahead, is optimistic that the lifting of lockdown restrictions in February may see larger monthly prints from March onwards, if the vaccination rollouts continue and newer variants of the virus do not force further restrictions.

  SURVEYS: Within both the manufacturing ISM and services ISM data, the employment sub-index ticked up in January. The manufacturing sector saw the employment sub-index rise from 51.7 to 52.6, remaining in growth territory for a second month; the services employment sub-index moved back into expansion, rising from 48.7 in December to 55.2 in January. ISM noted that comments from respondents in the services sector included “new hires required to perform awarded work in 2021” and “trying to replace and build staff in critical areas,” and after the manufacturing data, ISM said for the fifth straight month, survey panelist comments indicated that significantly more companies are hiring or attempting to hire than those reducing labor forces. In Markit’s composite PMI for the US, the data compiler said a softer rise in employment at service providers offset a quicker increase in job creation at manufacturers, as pressure on service sector capacity waned. Nevertheless, the business surveys contrast with consumers’ assessment of current business conditions, which weakened in January according to the Conference Board, and consumers’ assessment of the labor market was also less favorable the report said, with consumers saying jobs were ‘plentiful’ declining from 21.0 to 20.6, while those claiming jobs were ‘hard to get’ rose from 22.9 to 23.8.

  JOB CUTS: Data from Challenger showed that planned job cuts for US based companies ticked slightly higher in January, rising to 79,552 from 77,030. But encouragingly, Challenger said that COVID was no longer the leading cause of cuts; in fact, it was a demand downturn that was the leading reason cited for job cut announcements, followed by restructuring; COVID was only responsible for 4,620 of the January job cuts figure. The report added that we are beginning to see a levelling-off in announcements, which is a positive sign for the months ahead. The report also said that firms might be reassessing staffing levels, and waiting on the impact of the government relief bill, before making any additional workforce decisions. The Challenger data might offer us an early insight into how consumers will enter the normalization phase of the pandemic; are they likely to throw caution to the wind and resume consuming at prepandemic levels, or will they remain cautious in the face of uncertainties; the contrast between business surveys and consumer surveys may, at this point, lean towards the latter.

  * * *

  Cribbing from Goldman’s latest upgrade of the labor situation published earlier today, here are the bank’s arguments for a better-than-expected report:

  • The third wave of Covid. The coronavirus resurgence weighed on the December report, with a 498k drop in leisure and hospitality payrolls more than offsetting the 358k gains across the rest of the economy. While the public health situation remained dire in January, the severity of business restrictions was roughly unchanged on net, based on the Oxford policy stringency index and Goldman’s EffectiveLockdown Index (ELI). And as shown in Exhibit 1, restaurant seatings on Open tableactually rebounded modestly nationwide. While we doubt virus-sensitive industries rehired workers aggressively in January, sequential stabilization would be consistent with an above-consensus nonfarm payrolls reading as long as job growth in the rest of the economy proceeded anywhere near its December pace.

  

  • Seasonality: Goldman expects a rise in temp help, retail, and potentially leisure payrollsn, reflecting fewer-than-usual seasonal layoffs. As shown in Exhibit 2, given the depressed employment levels in those industries, the end-of-year layoffs may have been smaller than usual. Reflecting this, these categories are expected to decline by less than the BLS seasonal factors anticipate, resulting in higher seasonally adjusted payrolls. Illustratively, a flat unadjusted reading across these three groupings would result in a +1.2mn contribution to January payrolls on a seasonally adjusted basis (mom sa)

  

  • ADP. Private sector employment in the ADP report increased by 174k in January, above consensus expectations and consistent with a firm or solid rise in the official measure. On a seasonally adjusted basis, ADP reported strength in the leisure and hospitality industry and health care industry.
  • Employer surveys. Business activity surveys increased on net in January. The employment component of the services survey tracker edged down (-0.3pt to 49.3),but one of the most comprehensive measures from the ISM increased to its highest level since December 2019 (55.7). And the employment component of Goldman’s manufacturing survey tracker increased to the highest level since March 2019

  NEUTRAL/MIXED FACTORS:

  • Big Data. High-frequency data on the labor market was mixed in January, but generally showed stabilization or improvement relative to December. While seasonal adjustment is particularly difficult in the month of January due to varying sensitives to end-of-year layoffs, Goldman estimates that the Google mobility index is consistent with an approximately +0.9mn rise in January payrolls and the Homebase measure with +0.8mn. In contrast, the Understand America Survey by USC is consistent with a modest decline in payrolls.
  • Jobless claims. Initial jobless claims rose during the January payroll month but at a slower pace, averaging 835k per week vs. 814k in December and 744k in November. Some of these filings likely reflected filing incentives in the Phase 4 fiscal package (newly available $300 top-up payments), as well as some administratively required refiles at the start of the new year. Continuing claims fell 537k between the payroll survey weeks, but this decline partly reflects expiring regular-state-programs (as opposed to reemployment). Across all employee programs including emergency benefits, continuing claims fell by 480k.
  • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas fell by 18% in January after increasing by 32% in December. They remain 23% above their January 2020 levels.Arguing for a weaker-than-expected report:

  ARGUING FOR A WEAKER THAN EXPECTED REPORT:

  • Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get — fell further into contractionary territory (to -3.2 in January from -1.9 inDecember and +6.9 in November).

  Finally, a look at how the market could react:

  The market reaction will be informative for traders, particularly in the event of a big beat or a big miss. An argument is gaining traction that improving economic data and COVID trends in the US after some stark concerns at the end of last year/start of this year,  combined with a quicker than expected vaccine rollout, may stoke the hawkish argument that less monetary and fiscal stimulus might be warranted in the US, which could be detrimental to risk assets (the key catalysts for stocks are continued official support, improving corporate earnings, and continued improvement in COVID trends – if one of these is shaken, it may lead traders to reassess the bull case). After this week’ s solid ISM services data and ADP data on Wednesday, some downside was seen in the equities complex; this downside was only subsequently parred after a blog post from White House economic advisors, who warned about the long-term scarring potential on the economy (and of course implying that in spite of some of the better trends seen recently, a large degree of stimulus was still appropriate). But while policymakers adopt a cautious approach on scarring, some market participants remain unconvinced: as Goldman Sachs recently noted, signs of long-term damage to the economy remain surprisingly limited so far, calculating that around two-thirds of the jobs lost in the pandemic have now returned, while total company bankruptcies remained beneath pre-pandemic levels in December.

  Tyler Durden
  Thu, 02/04/2021 – 21:47

• Former CIA Counterterror Chief Suggests Going To War Against "Domestic Insurgents"
  Former CIA Counterterror Chief Suggests Going To War Against “Domestic Insurgents”

  Authored by Steve Watson via Summit News,

  The former head of the CIA Counterterrorism Center has suggested that counterinsurgency tactics used by the military in Iraq and Afghanistan should be applied to ‘domestic extremists’ inside the US.

  

  NPR reports that Robert Grenier, who directed the CIA’s Counterterrorism program from 2004 to 2006, declared “We may be witnessing the dawn of a sustained wave of violent insurgency within our own country, perpetrated by our own countrymen.”

  In an op-ed for The New York Times last week, Grenier suggested that “extremists who seek a social apocalypse … are capable of producing endemic political violence of a sort not seen in this country since Reconstruction.”

  

  Grenier, also a former CIA station chief in Pakistan and Afghanistan, grouped together “the Proud Boys, the Three Percenters, the Oath Keepers, ‘Christian’ national chauvinists, white supremacists and QAnon fantasists” and claimed they are all “committed to violent extremism.”

  Grenier labeled dissenters an “insurgency” and called for them to be “defeated” like an enemy army.

  In further comments to NPR, Grenier stated that “as in any insurgency situation, you have committed insurgents who are typically a relatively small proportion of the affected population. But what enables them to carry forward their program is a large number of people from whom they can draw tacit support.”

  Grenier also stated that insurgents may emerge from groups who “believe that the election was stolen,” or those “who don’t trust NPR or The New York Times.”

  “The most violent elements that we are concerned about right now see former President Trump as a broadly popular and charismatic symbol,” the CIA spook added, before comparing Trump to Saddam Hussein.

  “You know, just as I saw in the Middle East that the air went out of violent demonstrations when [Iraqi leader] Saddam Hussein was defeated and seen to be defeated, I think the same situation applies here,” he proclaimed.

  Grenier suggested that Trump should be convicted at the upcoming impeachment trial as a ‘national security imperative’ because “So long as he is there and leading the resistance, if you will, which he shows every sign of intending to do, he is going to be an inspiration to very violent people.”

  Grenier then compared Americans to Al Qaeda and the Taliban, noting that in Afghanistan “the thrust of our campaign there was, yes, to hunt down al-Qaida, but primarily to remove the supportive environment in which they were able to live and to flourish. And that meant fighting the Taliban.”

  “I think that is the heart of what we need to deal with here,” he added.

  Listen:

  Linking to Grenier’s comments, journalist Glenn Greenwald quipped that wedding guests throughout America should watch out for drone missiles:

  If you’re planning a wedding on US soil in the next couple of years, probably best to assign one of the guests to keep an eye on the sky to ensure there are no drones flying overhead to bomb the wedding party: https://t.co/dUpEunYm2q

  — Glenn Greenwald (@ggreenwald) February 3, 2021

  The call to treat Americans as terrorist insurgents comes on the heels of a Department of Homeland Security warning that those dissatisfied with the election result may rise up and commit acts of terrorism in the coming weeks.

  “Information suggests that some ideologically-motivated violent extremists with objections to the exercise of governmental authority and the presidential transition, as well as other perceived grievances fueled by false narratives, could continue to mobilize to incite or commit violence,” stated the bulletin issued last week through the DHS National Terrorist Advisory System — or NTAS.

  The bulletin added that ‘extremists’ may be “motivated by a range of issues, including anger over COVID-19 restrictions, the 2020 election results, and police use of force.”

  Tyler Durden
  Thu, 02/04/2021 – 21:20

• Jeff Ubben Considers "Meaningful Stake" In Exxon, May Seek Board Spot
  Jeff Ubben Considers “Meaningful Stake” In Exxon, May Seek Board Spot

  Exxon Mobil is considering adding Inclusive Capital’s legendary activist Jeff Ubben to its board of directors in what could be a step toward helping beaten down Exxon stock unlock significant value, Bloomberg reported on Thursday evening. In addition, Inclusive is considering taking a “meaningful stake” in the company if he is appointed to the board.

  Ubben is having “ongoing” and “constructive” talks with the board, according to the report. Other shareholders, including D.E. Shaw which have agitated in the recent past for Exxon – which over the weekend was reported to have considered a merger with Cheveron – to do something to push its stock price higher, are supportive of Ubben’s inclusion to the board (for obvious reasons). A decision on Ubben’s inclusion to the board could be made “in coming weeks”, the report says. 

  

  Ubben left ValueAct last year to start his own firm that is focused on investments in social and environmental issues. Ubben may be eyeing Exxon not only due to the company’s ripe yield, but also as an opportunity to help guide Exxon out of the fossil fuel era, and to transition it for inclusion into the ESG frenzy.

  Other activists have been busy in the name, too. “D.E. Shaw has written the company urging it to cut costs in order to preserve its dividend and called on the company to take steps to improve its environmental reputation” and Engine No. 1 investments has nominated 4 directors to the company’s board. 

  Recall, just days ago, Exxon reported its first loss in 40 years but vowed to preserve its dividend, which currently sits at 7.3% as of Thursday’s close. 

  For the fourth quarter, Exxon posted a previously disclosed $19.3 billion writedown of U.S. natural gas and other assets, capping the first annual loss for the Western world’s largest oil company in at least four decades. However, excluding the historic impairment, Exxon returned to profit in the fourth quarter, earning 3 cents per share, above the 0.02 consensus estimate, and ending a run of three consecutive quarterly losses.

  

  As Bloomberg notes, Exxon is gradually emerging from the wreckage of 2020 facing the worst crisis in its modern history, its stock a far cry from where it traded just a year ago. In addition to growing criticism of its environmental record, financial performance has eroded to the point where its fabled dividend, the third-largest in the S&P 500 Index, is under pressure. Exxon extended the $3.7 billion payout for another quarter last week but hasn’t increased it since early 2019 and is relying on borrowed cash to sustain it.

  That said, the company did go all-in on its defense of its massive dividend, with Bloomberg noting that “gone is any wiggle room on its statement: the company is pledging investors that even if oil prices average $50 a barrel (Brent basis) in 2021 and refining margins are horrendous, it would make enough money to cover both shareholders payouts and spending in projects.”

  Perhaps sensing that Exxon was ripe for activist involvement, in late 2020 most major bank upgraded the stock to a buy after holding it at neutral or sell since the covid crisis.

  Tyler Durden
  Thu, 02/04/2021 – 21:00

• 'Domestic Terror' Is A Government Without Constraints
  ‘Domestic Terror’ Is A Government Without Constraints

  Authored by Mark Jeftovic via BombThrower.com,

  Ruh Roh: That Unhinged Canadian Conspiracy Theory is 5-for-5 so far…

  A friend I’ve referenced in my writings before as “an unemployed tech CEO” (he’s been unemployed since one of his exits about 10 years ago) sent me that link that was making the rounds back in October…

  

  It was purportedly from an anonymous Liberal Party “Strategic Committee” leaker that laid out a plan where the Canadian federal government, in collusion with world governments everywhere, were going to use the Coronavirus pandemic to impose a New World Order, distinctly communist in nature, replacing private property with Universal Basic Income and immunity passports.

  I wrote it up at the time pointing out the various holes in the narrative, not the least of which was that it was completely unsourced. You had to decide to believe something like that.

  My response to him was:

  I saw this months ago and kinda ripped the guy who sent it to me because it sounded very Qanon-ish and just batshit. No sources, no attributions, it could literally be anything. I hate this kind of stuff.

  Next thing I know my phone is ringing, and as I plug in my earbuds I hear his thick middle-eastern accent:

  “Ok junior” (he had picked up my knickname from my punk rock days nearly 30 years ago, although he was never in that scene), “bring it up and let’s just walk down the list”:

  • Phase in secondary lock down restrictions on a rolling basis, starting with major metropolitan areas first and expanding outward. Expected by November 2020

  Well, here we are under lockdown in Toronto, again – and most other Canadian cities as well.

  • Rush the acquisition of (or construction of) isolation facilities across every province and territory. Expected by December 2020.

  The recently announced travel restrictions we’re all aware of. All flights to Caribbean and Mexico canceled, returning citizens sent to government approved hotels, which, at least as per the media reports coming in, seem to feel more like internment camps than hotels. Joe Warmington’s article describing the plight of a returning citizen who has been locked in a hotel room and fed prison-like rations despite having had a negative COVID-19 test prior to his embarking on the returning flight…

  From @joe_warmington: Bread and water in locked room during forced detention after landing at Pearson https://t.co/Ui9vlu8z6e #cdnpoli

  — Toronto Sun (@TheTorontoSun) February 3, 2021

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

  • Daily new cases of COVID-19 will surge beyond capacity of testing, including increases in COVID related deaths following the same growth curves. Expected by end of November 2020.

  Right, well the “casedemic” has been infuriating for anybody who actually looks at the data, who understands what a medical “case” is supposed to be or what a PCR test isn’t supposed to be. Especially when using high Cycle Thresholds.

  As Chris Martenson (PhD in pathology from Duke University) outlines in the 2020 Year in Review with Dave Collum (PhD Columbia, Chemistry, teaches at Cornell): a medical “case” is one in which a patient is presenting symptoms and requires medical attention. That’s a case. PCR tests were never meant to discern whether somebody is an “infected case” or not, and as Collum elaborated in that same interview, “with a Cycle Threshold over 35, you can get a positive PCR test out of a dog’s ass”.

  • Daily new cases of COVID-21 hospitalizations and COVID-19 and COVID-21 related deaths will exceed medical care facilities capacity. Expected Q1 – Q2 2021.

  According to the media, this is true. According to reality, it isn’t. In CNN-style “fact checking” parlance, it would thus score as “partially true”.

  “Covid Related Deaths” is a well worn catch-all. What is known to anybody keeping track: the vast majority of COVID fatalities are with COVID, not from it. We all know this,  for some reason it doesn’t seem to matter. The overall survival rate for this thing is somewhere around 97% or higher. Most people don’t know anybody in their immediate circle of friends and family that have actually died from it.

  It can be terrible virus to catch and become sick with, and it’s tragic to die from. But the majority of people either exhibit flu like symptoms and shrug it off or remain completely asymptomatic. Overall it causes fewer fatalities to society than either alcohol (3 million deaths per year, globally) or driving (1.5 million) or for that matter air pollution at 4.2 million.

  • Enhanced lock down restrictions (referred to as Third Lock Down) will be implemented. Full travel restrictions will be imposed (including inter-province and inter-city). Expected Q2 2021.

  Travel restrictions, as we noted, are here, or at least starting to show up. My unemployed CEO friend is expecting localized roadblocks, i.e “Where are you going? Why are you going there? Can I see your immunity passport and contact tracker please?” type roadblocks. Unless you’re a politician or someone Transport Canada deems to be exempted in “the national interest”, you’re probably stuck where you are for the foreseeable future.

  

  Excerpt from the Transport Canada making the rounds on who is exempted from forced quarantine at the approved Internment Hotels

  • Projected COVID-19 mutation and/or co-infection with secondary virus (referred to as COVID-21) leading to a third wave with much higher mortality rate and higher rate of infection. Expected by February 2021.

  Well they aren’t calling it COVID-21, but there is a lot in the media about the UK and South African mutations. Overlooked is that COVID-19 has been mutating from very early on, all viruses do. Everything does.

  

  From: Is the coronavirus mutating? Yes. But here’s why you don’t need to panic, Science News, May 2020

  Anyway, by the time we got this far down the list I felt the mild caffeine euphoria of my morning cup-o-joe wearing off and despondency setting in… I know where this list goes from here:

  • The imposition of UBI and debt jubilee where “the individual would forfeit ownership of any and all property and assets forever”.

  I take some comfort in that the original article has been written so poorly that it makes 4chan a more likely origin vector and not some high powered political insider.

  But the entire conversation made me feel uneasy, here’s why:

  As I stated the first time,  when something is completely unsourced and disconnected from supporting material or citations, believing it is a choice. It’s an act of faith. You can choose to believe that we’re in The End Times,  or that The Singularity is Near, Alien Disclosure is imminent, or we’re entering the final victory of World Communism or a final Malthusian or climate driven collapse. These narratives are at their core eschatological in nature and all the same . We won’t be able to say with any certainty until one of these scenarios would actually come to pass. Even then we’d probably be incapable of forming a consensus around something that had already occurred.

  

  One of things that I’ve really had a hard time grappling with since all this began came out of my introductory study of General Semantics. Facing the reality that none of us really knows anything and that we only think we know is so much harder than just stumbling through life dead certain about your assumptions and oblivious to your own ignorance and biases. At least that way you just bounce around between successes, failures and misadventure but at least you think you’ve got things under control or at least understand what is happening.

  None of that is true, and when you realize that, it can be terrifying.

  All the more so because when I think about a crazy, unhinged conspiracy theory like this one, the reasons why I would normally dismiss it: that it was just somehow untenable for governments anywhere to just rescind everybody’s civil liberties and basic human rights at the stroke of a pen with zero due process, no constitutional basis, no public consultation, no legal review or any right to appeal. When I think about how things have played out over the past year,  I realize that these assumptions weren’t actually anchored to anything.

  These days I’m reading Marco Papic’s Geopolitical Alpha, and in it, his core premise, is this:

  “Preferences are optional and subject to constraints, whereas constraints are neither optional nor subject to preferences.”

  By this he means: many investors factor their assumptions around how governments will impact their plans on what turn out to be policy preferences. But what actually happens, and what actually does impact their activities will be shaped by constraints, not preferences.

  Said differently, a lot of capital gets allocated on what people think governments want to do, but what actually matters is what is preventing or constraining the government from doing what they want to do.

  The five big constraints on governments are: political, economic, financial, geo-political and legal/constitutional.

  Seen in this light, even if true, that governments wanted to impose a totalitarian communist regime globally, surely they are constrained from doing so. Right? RIGHT? They can’t just fscking do it. 

  But… all kinds of things I thought governments couldn’t just come out and do over the last year…. well they just came right out and did it. And just to really mess with my head, Papic added two wildcard constraints to his list: terrorism and pandemics.

  The problem is, those wildcards, they aren’t wildcard constraints – they’re wildcard enablers. Those two wildcards seem to have the ability to trump all normal constraints. Every one of those constraints went out the window because of the wildcards.

  Where does that leave us?

  Speaking for myself, I’m losing my moorings as I no longer have any clear idea what, if any, policy constraints exist anymore.

  So I have no grounding in the arena of what’s possible, how arbitrarily policy makers can act, what’s to stop them from simply confiscating my wealth (except for my crypto), or nationalizing the business I’ve built up over 22 years, and doing the same to everybody else. This is Canada. We’re generally meek as fuck here.

  Second passport and expat strategies won’t work if, as per the “World Debt Reset Program” outlined in the conspiracy theory, this happens simultaneously everywhere. Granted that seems farfetched, but the boundaries of the word “farfetched” have shifted dramatically since all this began.

  The question I keep coming back to is “What’s to stop them from trying it?”

  One of my first articles that I wrote on my old blog said that:

  “The ultimate goal of the State is to cultivate absolute dependency on it by its subjects. This is because until this happens there is a real danger that those governed will one day wake up and realize that the State is not only entirely unnecessary but actually malignant; a malevolent force actively impoverishing society to the benefit of it’s elites”

  I think nation states do know this, and that the continuous iteration of failed policies painted all of them into a corner vis-à-vis the global economy and the financial system as we know it. As Daniel Dimartino Booth observed in a recent George Gammon podcast, (paraphrasing) “The central banks were screwed. They needed something like COVID because the financial system was coming unglued”.

  Understanding that there is a real incentive for nation states to move in a drastic direction, combined with a conspicuous absence of restraints, is taking a huge psychological toll on the populace. As hypernormalization runs wild, a type of mass psychosis sets in which has been manifesting in rabid polarization, hysterical cancel culture, Reddit-driven stonk manias and myriad tribes of neo-Flagellants.

  Something’s gotta give, but at the same time, I’m really worried that something’s about to give.

  *  *  *

  Join the Bombthrower mailing list as we brace ourselves for whatever comes next.

  Tyler Durden
  Thu, 02/04/2021 – 20:40

• "Peaking" China Credit Impulse Suggests Copper Prices May Have Topped 
  “Peaking” China Credit Impulse Suggests Copper Prices May Have Topped 

  As we detailed earlier in the year for our Premium subs, if this turning point in the Chinese credit impulse is confirmed by the upcoming data, expect a dispersion between inflation-sensitive assets in 2021.

  At the time, we pointed out a critical estimated timeline of the peak Y/Y performance for each of the assets analyzed after China’s credit impulse turned down. 

  

  Fast forward til today, and that timeline appears to be starting to come true as alarm bells continue to ring with multiple banks pointing out what we said more than a month earlier. A peaking credit impulse may result in slower global growth and slumping industrial base metal prices. 

  Regular readers should know by now that under the current Chinese regime of debt-fueled growth – one of the most precise indicators of future economic growth is the credit impulse. 

  JPMorgan’s Mislav Matejka explains this week in a note to clients that China’s credit impulse is in the process of “peaking.” The change in the growth rate of aggregate credit as a percentage of gross domestic product in the country has a tremendous impact on the global economy’s future. Saxo Bank once said the credit impulse leads the global economy by 9 to 12 months.

  

  A peaking credit impulse in China could soon dictate a regime shift in macro themes to weaker inflation, slower growth, slumping industrial metal prices, and falling Treasury yields. 

  More importantly, Matejka focuses on industrial metals, indicating “speculative positions on copper are very elevated, and are showing signs of peaking.” 

  

  Since China leads the global economy, it’s important to note that country’s credit creation heavily influences commodities’ prices. 

  Focusing on copper, which is a critical contributor to the global economy, and prices rise and fall with China’s demand. The chart below shows that China’s peaking credit impulse tends to drag down copper bullish speculative positioning in the base metal, eventually leading to price declines.

  

  A further move higher in copper prices could depend on China continuing to expand credit or if Washington passes a massive stimulus bill. Though upside in copper could be fairly limited considering the credit situation in China. 

  If copper prices turn south, other base metals may follow with the threat of persistent oversupplied conditions as the global economy slows. Already, the Bloomberg Industrial Metals index weekly appears to be reversing after a sustained up-move since global central banks injected trillions of dollars into capital markets when the pandemic began in early 2020. 

  

  If you need any more confirmation that China could be headed into a slowdown, the always-well-managed services sector activity on Tuesday night printed at its slowest pace in nine months in January. 

  Caixin China Jan. Services PMI 52; Est. 55.5

  — zerohedge (@zerohedge) February 3, 2021

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

  Again, as we’ve told our readers in the past, all that matters is the Chinese credit impulse.

  For more on credit impulses, checkout Zerohedge Premium. 

  Tyler Durden
  Thu, 02/04/2021 – 20:20

• McMaken: Incitement Is Not A Real Crime
  McMaken: Incitement Is Not A Real Crime

  Authored by Ryan McMaken via The Mises Institute,

  Former president Donald Trump has been impeached for “incitement to insurrection.” The House Democrats’ claim is that Trump made an inflammatory speech which – a week later – led to the Capitol riot of January 6.

  The Senate is now considering whether or not to convict Trump of this “crime.”

  I put “crime” in scare quotes for a couple of reasons.

  

  The first reason is that the impeachment proceedings aren’t a criminal trial, so even conviction wouldn’t establish guilt the way an actual criminal court might. Contrary to what the public thinks—with its third grade–level understanding of American politics—and what the media is happy to imply, impeachment is strictly a political process that does nothing more than remove a person from office. The Democrats’ new interpretation that impeachment can be used to bar someone from holding office in the future is a rather novel approach.

  Moreover, it’s already clear that if Trump were being tried in an actual criminal court, it is extremely unlikely a prosecutor could get a conviction. Trump’s alleged incitement doesn’t meet the legal requirements for such a charge as set out by the US Supreme Court back in 1969. An incitement conviction would require prosecutors to show there was an imminent threat of violence from the inflammatory remarks. Clearly, the Capitol riot, occurring a week later, was not “imminent,” and in a criminal case, it would be nearly impossible to prove this was directly connected to a political speech made days earlier.

  The second reason “crime” needs to be in scare quotes is because incitement isn’t a real crime at all. It assumes that the person committing the “incitement” is simply passing down orders to blank-slate automatons who then turn around and do whatever their “leader” says.

  In fact, the only people guilty of rioting are the rioters.

  Rothbard spelled this out several times.

  For instance, in an essay written for a small newspaper in the late 1960s, Rothbard explains the problem with claiming incitement is a real crime:

  Suppose that Mr. A tells Mr. B: “Go out and shoot the mayor.” Suppose, then, that Mr. B, pondering this suggestion, decides it’s a darn good idea and goes out and shoots the mayor. Now obviously B is responsible for the shooting. But in what sense can A be held responsible? A did not do the shooting, and didn’t take part, we will assume, in any of the planning or executing of the act itself. The very fact that he made that suggestion cannot really mean that A should be held responsible. For does not B have free will? Is he not a free agent? And if he is, then B and B alone is responsible for the shooting.

  If we attribute any responsibility at all to A, we have fallen into the trap of determinism. We are then assuming that B has no will of his own, that he is then only a tool in some way manipulated by A.

  Now, if Person A participated in the planning of a riot or a murder, then Person A is guilty of conspiracy, not incitement. But Person A is not guilty of anything for have merely suggested to Person B that he shoot the mayor. Person B, after all, is responsible for his own actions.

  Rothbard continues:

  if the will is free, then no man is determined by another; then just because somebody shouts “burn, baby, burn,” no one hearing this advice is thereby compelled or determined to go and carry the suggestion out. Anybody who does carry out the advice is responsible for his own actions, and solely responsible. Therefore, the “inciter” cannot be held in any way responsible. In the nature of man and morality, there is no such crime as “incitement to riot,” and therefore the very concept of such a “crime” should be stricken from the statute books.

  Finally, Rothbard notes that incitement laws are also damaging because they are a direct attack on the natural right to free speech:

  Cracking down on “incitement to riot,” then, is simply and purely cracking down on one’s natural and crucial right to freedom of speech. Speech is not a crime. And hence the injustice, not only of the crime of incitement, but also of such other “crimes” as “criminal sedition” (sharp criticism of the government), or “conspiracy to advocate overthrow of the government”—in other words, planning someday to exercise one’s basic and natural right to freedom of speech and advocacy.

  A decade later, Rothbard emphasized the importance of rejecting the notion of incitement as a crime in his book For a New Liberty. Under the section titled “Freedom of Speech,” he writes:

  What, for example, of “incitement to riot,” in which the speaker is held guilty of a crime for whipping up a mob, which then riots and commits various actions and crimes against person and property? In our view, “incitement” can only be considered a crime if we deny every man’s freedom of will and of choice, and assume that if A tells B and C: “You and him go ahead and riot!” that somehow B and C are then helplessly determined to proceed and commit the wrongful act. But the libertarian, who believes in freedom of the will, must insist that while it might be immoral or unfortunate for A to advocate a riot, that this is strictly in the realm of advocacy and should not be subject to legal penalty.

  Later, in his book The Ethics of Liberty, Rothbard again makes very similar remarks:

  Suppose that Green exhorts a crowd: “Go! Burn! Loot! Kill!” and the mob proceeds to do just that, with Green having nothing further to do with these criminal activities. Since every man is free to adopt or not adopt any course of action he wishes, we cannot say that in some way Green determined the members of the mob to their criminal activities; we cannot make him, because of his exhortation, at all responsible for their crimes. “Inciting to riot,” therefore, is a pure exercise of a man’s right to speak without being thereby implicated in crime. On the other hand, it is obvious that if Green happened to be involved in a plan or conspiracy with others to commit various crimes, and that then Green told them to proceed, he would then be just as implicated in the crimes as are the others—more so, if he were the mastermind who headed the criminal gang. This is a seemingly subtle distinction which in practice is clearcut—there is a world of difference between the head of a criminal gang and a soap-box orator during a riot; the former is not, properly, to be charged simply with “incitement.”

  This problem is related to a similar problem: making noncrimes like slander (i.e., defamation) into prosecutable offenses. A “slanderer” can say all sorts of things. And, indeed, a respect for freedom of speech dictates that we allow him to do so. After all, the people who hear what he has to say remain completely free to come to their own conclusions about what to do with that information. Just because some person says “your sister is a whore,” doesn’t mean we are required to believe him or act on those words in any particular way.

  In practice, laws against incitement and defamation are very dangerous to basic human rights, and both place nonviolent people in legal jeopardy merely for the “crime” of expressing opinions. These laws are direct attacks on the right to free speech. In the case of Trump and “incitement,” he expressed an opinion about the election and encouraged people to “fight like hell” in a vague, nonspecific way. If this sort of thing is “criminal” then anyone who expresses an opinion that people should “resist” or “fight” against the regime—or even suggest that the regime is illegitimate or worthy of contempt—is likely to find himself on trial any time one of his social media “friends” decides to deface a government building or throw a rock at a cop. 

  Tyler Durden
  Thu, 02/04/2021 – 20:00

• Panasonic Is Quitting The Solar Panel Business
  Panasonic Is Quitting The Solar Panel Business

  Panasonic is quitting the solar panel business.

  The company was formerly a leader in the market but has now succumb to cheap competition out of China, according to Nikkei Asia. 

  The company plans on halting manufacturing as soon as March 2022 at its factories in Malaysia and Japan. It’ll be a “complete exit from the solar manufacturing business”, the report says. Panasonic will stay in the power industry by procuring panels from other manufacturers.

  New solar generation this year is expected to rise 10% from the previous year, to 117 million kilowatts. Prices of panels have fallen to about 33% of what they were 10 years ago thanks to increased Chinese production. This increase has put pressure on legacy players, like Panasonic.

  

  Most of Panasonic’s sales have been based on domestic demand, but that demand is not expected to grow due to government subsidies in Japan being rolled back.

  Panasonic had previously acquired Sanyo Electric and was building on its solar cell business after making it a subsidiary. Panasonic “had its sights set on becoming a top-three manufacturer, but is now out of the top five due to price wars with Chinese companies,” Nikkei wrote. 

  Despite leaving solar, Panasonic will stay in renewable energy, focusing on projects like power management for smart cities. 

  With its exit from the industry, Kyocera and Sharp remain the two key solar panel manufacturers in Japan. 

  Recall, Panasonic also shares Tesla’s solar panel factory in Buffalo, NY but ended its partnership with the auto company last year. There have been no details on how any shutdown can, and will, further affect Tesla, but we will continue to monitor the situation closely. 

  Tyler Durden
  Thu, 02/04/2021 – 19:40

• Biden's Energy Plan May Be Costly For Consumers
  Biden’s Energy Plan May Be Costly For Consumers

  Authored by Daniel Lacalle,

  Joe Biden has presented a $2 trillion clean energy plan that may be very expensive for consumers if the United States follows the mistakes of the European example.

  

  Watch:

  There are some important facts that should concern us when thinking about the US and Europe’s energy policy, supporting industry and creating jobs:

  • In the European Union, SMEs pay 20% more for electricity than in China and 65% more than in India. Between 2005 and 2012 electricity prices in Europe rose 38%, while in the United States they fell 4%. If we go to natural gas, in Europe prices rose 35%, while in the US they fell 66%. But the worst thing is that this trend has become more pronounced in recent years.

  • The “green” policy in Germany has doubled bills for households while the price of wholesale generation fell, and in 2017 it still had over 52% of its electricity mix and 88% of primary energy consumption from fossil fuels. The German “energiewende” has already cost more than 243 billion euro between taxes and “renewable subsidies” since 2000, and greenhouse gas emissions are almost flat since 2009. Even worse, the impact of net job creation in the energy sector has been negative. Between the job losses in traditional companies and the bankruptcies of local solar names, job creation has turned negative. Germany once had a goal of 500,000 green energy jobs by 2020. After peaking at just below 380,000 a few years ago, the number is now approaching 350,000 and this means that the net effect in the industry will be a 20,000 loss.

  • Up to 33% of the total costs of industrial companies come from energy expenses, which have exploded in recent years due to the impact of subsidies, fixed costs, and taxes.

  It is very simple, either we look for competitiveness or the negative impact on employment and delocalization of industries will increase.

  The energy sector is key in the decarbonization process, but will not achieve it through perverse incentives and accumulated costs that penalize the efficient in favor of the inefficient, subsidize the expensive, and tax the competitive ones.

  The best technological tool to improve the environment is a combination of natural gas, nuclear, hydro, and renewable energy. But renewables are intermittent, while consumption is continuous. We cannot forget the billions required in grid connections and support to maintain an intermitent and volatile mix.

  The energy policy of the United States must comply with the principles of safety, diversification and competitiveness. All these can only happen with higher liberalization and competition, not less.

  Technology replacement and energy transition should be achieved through competition, lower costs and efficiency, the same way as crude oil ended with whale oil, not because it was decided by a committee, but because the cost was lower and the benefits for consumers evident.

  Security of supply must be achieved, also, from a flexible and diversified energy mix which must be cheap and efficient, not via subsidies and higher fixed costs, but through the tax incentives that prevent “fake demand signals” and prevent overcapacity.

  Energy is the cornerstone of the future of any nation. Destroying competitiveness would likely worsen the current crisis. The U.S. has the tools, using all technologies, to ensure an abundant and cheap energy supply. Anything else would bring it to repeat the mistakes that Europe made a few years ago.

  Tyler Durden
  Thu, 02/04/2021 – 19:20

• House Democrats And 11 Republicans Boot Greene From Committees Over QAnon
  House Democrats And 11 Republicans Boot Greene From Committees Over QAnon

  House Democrats on Thursday voted to strip Rep. Marjorie Taylor Greene (R-GA) of her committee assignments after arguing that her past support of QAnon disqualified her from holding them.

  

  Lawmakers voted 230-199 to remove Greene from the House education and budget committees, with 11 Republicans joining the Democrats, after the GOP declined to take action themselves, according to The Hill.

  House votes 230-199 to strip Marjorie Taylor Greene of her committee assignments.

  11 Republicans vote yes:

  Carlos Gimenez
  Mark Jacobs
  John Katko
  Young Kim
  Adam Kinzinger
  Nicole Malliotakis
  Maria Elvira Salazar
  Mario Diaz-Balart
  Chris Smith
  Fred Upton
  Brian Fitzpatrick pic.twitter.com/GWb64PTmPh

  — The Recount (@therecount) February 4, 2021

  The vote came after members of both parties gave impassioned speeches for or against removing Greene – with much of the GOP stepping up to her defense, while at the same time condemning her past comments.

  Some Republicans warned Democrats that they were setting a dangerous precedent.

  “I think you are, frankly, overlooking the unprecedented nature of the acts that you’ve decided upon, and where that may lead us when the majority changes,” said Rep. Tom Cole (R-OK), the senior Republican member of the Rules Committee.

  On Wednesday night, Greene received a standing ovation during a closed-door GOP conference meeting, where she apologized for embracing QAnon. Then on Thursday, Greene said in a House floor speech that she had recently ‘realized the dangers’ of such narratives.

  Greene described how she’d “stumbled across” QAnon in late 2017 and began posting about it on Facebook while she was “upset about things and didn’t trust the government.” 

  Later in 2018, Greene said, “when I started finding misinformation, lies, things that were not true in these QAnon posts, I stopped believing it.”

  Greene also disavowed her previous support for several conspiracy theories, declaring a belief that school shootings are “absolutely real” and that 9/11 “absolutely happened.” 

  But as Greene concluded her speech, she adopted a more defiant tone, blasting unnamed Democrats for what she suggested was their encouragement of the violence that, at times, accompanied last year’s national protests against police brutality. –The Hill

  “If this Congress is to tolerate members that condone riots that have hurt American people, attack police officers, occupy federal property, burn businesses and cities, but yet wants to condemn me and crucify me in the public square for words that I said, and I regret, a few years ago, then I think we’re in a real big problem,” she said, before criticizing the MSM.

  “Will we allow the media, that is just as guilty as QAnon of presenting truth and lies, to divide us?” Greene asked, drawing sharp rebuke from House Rules Committee Chairman Jim McGovern (D-MA) who called the comparison “beyond the pale.”

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

  Yet, at the end of the day, Greene’s defense wasn’t enough to overcome the Democrats and 11 Republicans who decided to punched right over a colleague’s past.

  Tyler Durden
  Thu, 02/04/2021 – 19:07

• US Border Agents Nab Group Of Iranians 
  US Border Agents Nab Group Of Iranians 

  U.S. Customs and Border Protection (CBP) agents arrested a group of Iranians who illegally crossed into the US Monday evening.

  CBP said five women and six men were nabbed near San Luis, Arizona, on a bridge near County 21st Street and the Salinity Canal. Agents detained the group shortly after illegally crossing the Mexico–U.S. border. 

  There was no mention in the CBP press release if any group member belonged to terrorist organizations. The group is in processing with CBP while their fate is yet to be determined. 

  The illegal crossing comes shortly after the Biden administration reversed significant border protections by former President Trump.

  Former Acting CBP Commissioner Mark Morgan was heard on Newsmax this week calling out the new administration for their borderless security, ultimately making America less safe. 

  The U.S. and many countries in the West have repeatedly declared that Iran is the principal state sponsor of terrorism. So when a bunch of Iranians are apprehended on the border, it’s a big deal because of their potential connections to radical groups. 

  The Immigration Reform Law Institute has outlined 10,000 illegal immigrants from countries designated as state sponsors of terrorism are living within the U.S. 

  

  Biden reversing the travel ban on predominantly Muslim countries, halting border wall construction, and suspending deportations may result in a more dangerous country. 

  Tyler Durden
  Thu, 02/04/2021 – 19:00