- Cold War Lessons For US-China Today
Cold War Lessons For US-China Today
By Jordan Schneider and Irene Zhang of ChinaTalk
How did the Cold War affect US diplomacy and its actions abroad? And what lessons about gently coaxing Gorbachev back into the bosom of the international community need to be relearned?
Hal Brands (@HalBrands), professor at the Johns Hopkins University School of Advanced International Studies, is the author of Twilight Struggle: What the Cold War Teaches Us about Great-Power Rivalry Today. Along with co-host Emily Jin (@ew_jin) of the Center for a New American Security (CNAS), we discussed:
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How the US capitalized on Soviet heavy-handedness in the developing world
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The US’s never-ending cycles of self-confidence and self-doubt
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Today’s Sinologists versus Cold War Sovietologists
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Why the only person who can stop the war in Ukraine is the one who started it
Applied history, and why the Cold War?
Jordan Schneider: Applied history, what is it and why isn’t it more of a thing?
Hal Brands: Applied history is basically just a fancy way of saying that you study history not for its own sake, even though that’s important, but for what it can teach you about how to handle the problems of today and tomorrow.
This is actually the oldest possible use of history; there’s literally nothing new about it. If you go back and read Thucydides, he doesn’t use the term applied history, but he says that his History of the Peloponnesian War was meant to serve as a guide to statecraft and subsequent eras. In fact, I would say that this is why most people read history. It’s mostly professional historians who think that history should be studied for its own sake.
The challenge, I think, is that within the historical profession, there has long been a concern that doing history with an eye to shaping policy risks is diluting or compromising the scholarly objectivity on which good history is supposed to depend.
I think that that’s a fair point, and there are good examples of people who have allowed the quest for influence or whatnot to distort their historical work. But I think there are ways of balancing that challenge.
In fact, I would say that it’s hard for me to justify the doing of history if you’re not trying to make a point that’s relevant today.
Jordan Schneider: Why spend part of our marginal 10 hours of reading time a week on the Cold War?
Hal Brands: Part of it is that we all know something about the Cold War and we all probably have an image of the Cold War in our heads. It occurred within the living memory of a lot of US policymakers right now. I guarantee Joe Biden has some understanding of the Cold War, and that understanding probably plays some role in his policy decisions on issues from Afghanistan to Ukraine.
One of the arguments I’m making in the book is that the Cold War actually isn’t that exceptional. There are aspects of the Cold War that are exceptional: it’s the only great power rivalry that played out in the shadow of nuclear weapons, to give you one example. But then, it’s part of this much longer phenomenon of protracted great-power competition that goes back to the beginning of recorded history. So it ought to be able to teach us something interesting about that larger phenomenon at a time when it’s coming back to life in the form of the US’ relationships with China and Russia today.
American Exceptionalism and the Pitfalls of Ideology
Jordan Schneider: The day after Biden’s State of the Union, I was thinking: Biden is saying this stuff about how we’re the best country and we can do anything, and I’m like, oh, I really hope so. To what extent did folks back then buy this? Throughout the entirety of the Cold War, how did that sine wave flow in and out over time?
Hal Brands: I don’t think they bought it any more than they buy it today.
There was never an uncritical belief that the United States could do everything and that its influence was entirely benevolent and benign.
It’s quite often the opposite. The United States went through periods of intense self-doubt during the Cold War, and even times when the country was tearing itself apart over things that it had done overseas — just look at the domestic bombings, some of which were related to the blowback over the Vietnam War throughout much of the 1970s.
There are big debates in the United States over whether we should have NATO anymore, and whether we should still have alliance commitments around the globe. We go through these cycles of self-confidence, and then a lack of self-confidence.
This is normal; when threats are running high and we’re feeling good about ourselves, we embrace a very expansive conception of what we think we can achieve in the world. Then, when something goes wrong, like the Vietnam War, we decide that we are really unable to accomplish anything. It typically takes some sort of advance by the bad guys to shake us out of that. That’s a normal part of American history. We see that cycle repeatedly during the Cold War.
Vietnam War protest in Washington, D.C., October 21, 1967. Emily Jin: Fusing geopolitics with values or ideology, while powerful for holding a nation together, is also possibly going to lead to bad policies. How would you design an approach that actually leaves room for both unity and clear-headedness, that could detect bad policies?
Hal Brands: You probably can’t. If you want a political consensus strong enough to sustain American participation in a long-term competition, you have to tap into that ideological fervor that is very deeply rooted in the American psyche.
This is what Harry Truman understood. It’s what Ronald Reagan understood. It’s what all of the policymakers who really spoke to Americans best about the Cold War and what it represented understood, and they weren’t entirely wrong about that. I think that they were right in thinking that what was ultimately at stake in the Cold War was a contest between two fundamentally different visions about how people in societies should be organized.
But it’s like any pep talk: it’s easy to take it a little bit too far and hard to downshift into a lower gear at a particular time. The way that I try to frame this is that any political consensus that was strong enough to inspire the sort of investments that the United States was going to need to win the Cold War was also going to be strong enough that people like Joe McCarthy could abuse it, or strong enough to lend itself to red-baiting.
Jordan Schneider: This seems to be the dilemma: on the one hand, you get the Vietnam War, driven by this ideological fear that, that if we screw this up, the whole world’s going to know that we’re a paper tiger and America doesn’t stand for anything.
And on the other hand, you get these conversations that you bring to light very well through archival work, where leaders basically say that these are trade-offs that that we have to make because there’s a bigger bad behind all of this, and we’ve got to make sure that we’re doing everything we possibly can so that Marxist-Leninism doesn’t take over the planet.
Hal Brands: Jeane Kirkpatrick had a saying in the early eighties: there are degrees of evil in the world. So the alternative to working with Efrain Rios Montt in Guatemala might be something even worse than that. There’s a certain amount of truth in that, obviously.
The challenge, of course, is that there is always a point at which means can corrupt ends, right?
There’s always a point at which the way you pursue a certain goal can undermine the worthiness of the goal itself.
I think it’s a fair question to ask whether the United States occasionally got itself in positions where its own conduct was so bad, or had backed people whose conduct was so bad, that it undermined the larger moral cause it was trying to support.
President John F. Kennedy hosts Suharto in Washington, D.C., 1961. (AP) Jordan Schneider: On your degrees-of-evil scale, I’m not sure how much further Suharto can fall down. And it’s not just him: there were plenty of others, and one wonders if less death and awfulness would have befallen these countries if their left-leaning alternatives had stayed in power. I grant you that these were difficult decisions, but I do think in retrospect that there were plenty of these battles which the US could have just decided not to fight.
Hal Brands: It’s important that we not overstate how much control the United States had in some of these situations. My friend Ray Takeyh has shown pretty conclusively that the United States had a nontrivial, but perhaps non-decisive, role in the 1953 coup in Iran. The United States was deeply involved in de-stabilizing Salvador Allende’s government and Chile in the early 1970s, but as far as we can tell was not deeply directly involved in the coup that actually overthrew him in September 1973 (although we certainly supported it after the fact).
So in many cases, the choice wasn’t: should you go make people do these terrible things in the Third World or not? It was: given the trend of events, should you support actors who are doing morally questionable things, or should you refrain entirely?
Parallels Between Sovietology and Pekingnology
Jordan Schneider: The current job market for China analysts, as Emily and I can attest to, is shockingly thin, and it breaks my heart when listeners reach out to me for career advice. The supply exceeds demand and salaries are low. The market is growing at 5 or 10% a year, not at the pace that it seemed like in the 40s and 50s when the US really spun up a remarkable effort to bone up on all things Soviet. What are some of the interesting takeaways and lessons you had looking into how America tried to grok the Soviet Union?
Hal Brands: In some ways, I think we’re a little bit better off today than we were at the beginning of the Cold War.
I think it was Richard Helms who later wrote, “in the beginning, we knew nothing.”
We had a few dozen Soviet analysts in the United States. George Kennan was a brilliant guy, but one reason why he seemed so brilliant was that nobody else knew anything about the Soviet Union.
You couldn’t travel there. It was difficult to get basic information about the government and the economy. So he stood out because he was a big fish in a very small pond. I think we’re in better shape today: we have a lot more China expertise in the United States now than we had Soviet expertise in 1947.
An April 1962 propaganda poster celebrating Sino-Soviet collaboration; caption reads “The friendship between Chinese and Soviet peoples is everlasting.” Do we have more China expertise in the United States than we had Soviet expertise in 1971 or 1983? Probably not, because we haven’t made the same generational investments in that expertise that we did during the Cold War. I also worry that some of the expertise we have either isn’t in the areas where we would want it to be, because the Chinese have created really good disincentives to aspiring academics studying particular aspects of Chinese politics and society, or maybe some of it is a waste in assets because it’s getting harder and harder for people to go to China to do fieldwork.
But I think what the Cold War does teach us is that you can overcome this: it just takes a lot of time, a lot of money, and a lot of energy.
And that’s what we did during the Cold War: we basically created an entirely new academic field of Sovietologists. You had academic institutions, philanthropic foundations, and government all come together to create the money and the brainpower you needed to really study a very hard target from an intelligence perspective.
This is really when it becomes common for academics to go between academia and government, or for people to spend time at Rand or Brookings, and then serve as consultants for the executive branch. Over time, I think the strength of that arrangement helped us create a very deep pool of Soviet expertise. We didn’t always have all the expertise we needed and I’m not claiming that the record was perfect in any way, but we also created a nice ecosystem where real debate could occur.
This was one of the great differences between the US and Soviet approaches to intelligence. The Soviet Union was clearly better than us at human intelligence, for instance, but they were terrible at analysis because there was no incentive to engage in honest debate or criticism within the Soviet government.
It was different in the United States. We had a de-centralized approach to intelligence in a way that would pit different intelligence institutions against each other. You had outside experts who could argue with the government when they thought the government was getting things wrong. Overall, if not in every circumstance, I think that improved our hit rate over the course of the Cold War.
Jordan Schneider: There hasn’t been much room in academia for folks doing Pekingnology and writing about the party qua the party, which is a real misstep. That’s something that, hopefully, both the US government and philanthropic money start to address them.
Hal Brands: One of the things we eventually figured out during the Cold War was that it costs more not to have this expertise than to have it. By the time you get to the later parts of the Cold War, in administration after administration, you’re seeing specific cases of this payoff. You look at Zbigniew Brzezinski, the National Security Advisor under Carter and a product of American Sovietology; Richard Pipes, a product of American Sovietology; Jack Matlock, same deal. They were running incredibly important parts of US policy while drawing on this intellectual capital that the country had invested into.
Emily Jin: One of my hypotheses of why there might be a lack of super concentrated expertise or analytical energy going into this, besides everything that you mentioned (which I agree with), is this idea that maybe the United States has forgotten how to deal with tragedy.
I’m, specifically thinking about your 2019 book with Charles et al., where you talk about the Athenians looking at tragedy as a vehicle for collective action. How receptive is the American public and the American government to prolonged competition today? How does that influence the investment that goes into this expertise?
Hal Brands: I think our problem is we’re pursuing Cold War objectives with post-Cold War levels of urgency and investment.
We have convinced ourselves that we face a problem in China and Russia, but I don’t know that we have been honest with ourselves about what level of investment, energy, and sacrifice it’s going to be.
It’s going to be necessary to deal with those problems effectively, because as you say, we’ve forgotten how bad the penalty is for getting these things wrong in a way that the WWII generation would have found much more difficult to forget. Now, maybe the Ukraine crisis is helping to remind us of this a little bit, and the Chinese seem determined to remind us of it with some of the more outrageous things that they do.
But I do think this is a real problem. It’s one thing to say that you’re doing great-power competition. It’s another thing to do it effectively. I think we’re between those two things at the moment.
Economic Determinism: How Much Does Wealth Matter?
Jordan Schneider: At the end of the day, the balance of the offering America had to the rest of the world and to the Soviet people, just by having a GDP per capita multiples ahead of what the Soviet system could offer, seemed to be the trump card that a lot of these debates came down to. How much does the marginal stuff matter, relative to just making sure that you’re the richer country than your adversary?
Hal Brands: Being rich, powerful, and attractive is rarely a disadvantage, in geopolitics as in life. In 1945, the United States had half of global production because the rest of the world had been destroyed after WWII. So the story of the first 25 years of the Cold War was everybody else catching up with the United States. For the most part, that’s a good thing because a lot of the countries catching up with us were Japan, West Germany, and other allies. So that actually strengthens us in the Cold War.
World powers’ respective shares of global GDP, from 1AD to the present. Notice the US’ peak near 1950. (Source: World Economic Forum) I think you can make the argument that so long as the Western world held together, it was going to win in the end because the power imbalance was so severe, but it wasn’t a given that the Western world would hold together. The Western world could have fallen apart in the late 1940s, if you had economic collapse in Western Europe and a bunch of communist parties had come to power; in the early 1950s, had you not strengthened NATO and fortified the hard power backbone of the free world. There are a variety of times in the 1970s, for instance, when it looked like the Soviet Union was getting the advantage.
No matter how rich and powerful and attractive you are, there still come these critical junctures where it takes good, bold, or prudent decision-making to get what you need.
Kill Adversaries With Kindness
Jordan Schneider: One of the chapters that I really liked was the one on the conclusion of the Cold War, and how Reagan and George H.W. Bush in the closing years of the conflict killed with kindness. What went on in 1984-92?
Hal Brands: Because Soviet power was collapsing in the 80s and early 90s, Americans were playing pretty ruthlessly, but they were also going out of their way to make sure that they did not humiliate a weakened superpower and to give Gorbachev the sense that he could strengthen his own prestige and position through a partnership with the West.
Reagan uses a lot of pageantry at summits and things like that, to send Gorbachev the message that if you change Soviet foreign policy in ways that we deem constructive, you will be welcomed back into the world as a legitimate member of the international community. Bush goes out of his way to portray Gorbachev as a partner in the diplomacy surrounding German unification in 1990 for exactly the same reason.
Over time, Gorbachev comes to see that his best alternative lies in giving the West a lot of what it wants.
Because it’s giving him some of what he needs as well: prestige, economic resources, and other things. It’s ultimately a pretty ruthless policy, where we get everything we can out of Gorbachev while he is still in power. But one of the reasons that it’s acceptable to Gorbachev is that we treated him with a lot of kindness.
Photo of Reagan and Vice President Bush meeting Gorbachev at the Governors Island Summit on December 7, 1988. (Source: National Archives) Jordan Schneider: Thinking about that and the lessons with regards to the war in Ukraine, as hard as it: unless Putin gets toppled (which, maybe there’s a 10% chance), he’s going to be the one that’s going to end this war. The lessons from that moment of figuring out how to give folks off-ramps is a tricky thing to think about, especially when you see the images you see on TV, but that’s important when understanding how conflicts end.
Hal Brands: It’s particularly difficult because you’ve got to create enough pain that Putin wants the off-ramp first, then offer the off-ramp once he believes that it’s desirable to take it. That balancing act is particularly tough.
Book Recommendations
Hal Brands: One book I’m reading right now is called Autumn in the Heavenly Kingdom by Steven Platt. It’s a masterful account of the Taiping Rebellion in China in the 1850s and 1860s, which was a much bigger global deal than anybody remembers. The reason it’s relevant today is it actually has some long-lasting implications for what you might think of as the Chinese worldview. It’s useful in understanding the historical background to Chinese decision-making.
Another book that I was just leafing through this morning is an oldie, but a goodie: it’s John Gaddis’ Strategies of Containment, which was first written in the early 1980s. It was the first book to systematically study American strategy during the Cold War. I’m biased — he was my dissertation advisor — but every time I read it, I’m still impressed by the number and the quality of the insights in there.
Tyler Durden
Mon, 08/01/2022 – 23:40 -
- China New Home Sales Crater 40% As Mortgage Revolt Spreads
China New Home Sales Crater 40% As Mortgage Revolt Spreads
With just 12 hours to go until Nancy Pelosi is reportedly scheduled to land in Taiwan (around 10:20pm local time on Tuesday), prevailing consensus is that for all the posturing and heated rhetoric, nothing much will happen. Consider the following quote from General Frank Kearny:
“The Chinese have stated that they would attempt to deter her flight using Chinese aircraft creating a threatening situation which could escalate. I seriously doubt they would shoot it down as also threatened. I suspect the Taiwanese would be threatened as well with provocative demonstrations of air and naval actions. I don’t believe these are just threats. I believe some action will occur with the potential for unintended consequences.”
Or the following assessment from General Spider Marks:
“China will be diplomatically aggressive…tough talk, little likelihood China will militarily interfere with Pelosi’s visit should she get the green light from President Biden to go. China, not unlike the Russians and Iranians in the Persian Gulf, may threaten Pelosi’s aircraft or possibly US naval ships which are underway in the vicinity. The risks are too high for the Chinese to interfere and not expect (and wargame) the worse possible outcome.”
And while we certainly hope that such sanguine assessments are accurate considering that the alternative is global thermonuclear war, many are forgetting that while the reeling Biden administration would certainly benefit from the distraction that is a limited military conflict, so would China. The reason for that is that war may not be good for a whole lot of things, when it comes to economic growth it is the proverbial Keynesian jackpot.
And China certainly needs economic growth. Moments ago Bloomberg blasted out a flashing red headlines saying that…
- *CHINESE LEADERS SAY GDP GOAL IS GUIDANCE, NOT A HARD TARGET
In the article, Bloomberg reports that China’s top leaders told government officials last week that this year’s economic growth target of “around 5.5%” should serve as guidance rather than a hard target that must be hit.
Leaders held meetings with ministerial and provincial-level officials last week, during which they were told the target won’t be used to evaluate their performance and there won’t be penalties for failing to achieve it, according to the people, who asked not to be identified because they were not authorized to discuss the matter publicly. The leaders also acknowledged that the chances of meeting the target were slim, the people said.
This is certainly plausible, as there is a very clear reason why China’s economy is suddenly sinking rapidly, and it has everything to do with China’s biggest asset class: property.
As the WSJ reported on Sunday, a short-lived, 2-month recovery in China’s home sales ended with a bang in July, as the widespread mortgage revolt discussed here previously which erupted over concerns that ailing property developers wouldn’t be able to deliver still-unfinished apartments weighed on demand.
Sales at the country’s top 100 property developers fell 40% in July from the same period last year to the equivalent of $77.6 billion, or 523.14 billion yuan, according to data released Sunday by CRIC, a Chinese real-estate data provider.
But while the annual numbers have been a well-known horrorshow following last year’s implosion of Evergrande and most of its property developer peers, July sales were also down 28.6% sequentially from June, ending a two-month recovery in month-to-month sales growth. The silver lining: apartment sales showed increases in May and June from the previous months, as activity picked up following Covid lockdowns in Shanghai and other Chinese cities earlier this year.
Week-over-week data put together earlier by CRIC to study the impact of the mortgage revolt had signaled the July decline. In 30 cities CRIC determined to have been seriously affected by the revolt, new home sales dropped by 12% in the week ended July 10 from the week before, then fell 41% in the week ended July 17.
China’s private-sector property developers went on a yearslong, debt-fueled building boom, selling homes before they were built, until a funding crisis that began last year led to defaults and stalled projects. Buyers who typically sank large down payments into those homes have been venting their frustrations all summer. Meanwhile the value of China’s property market, which Goldman has estimated at $62 trillion, making it the world’s largest standalone asset class….
… is cracking much to the horror of Beijing which knows that if Chinese housing, which is where the bulk of China’s middle class has parked its net worth, goes, it may well be game over so might as well spark a foreign conflict as an economic renaissance Hail Mary.
Going back to the immediate cause for the latest plunge in new home sales, the culprit is the mortgage revolt which started at the end of June at an Evergrande project in Jingdezhen, in central China’s Jiangxi province, where frustrated home buyers threatened to renege on mortgages on unfinished properties. Thousands of buyers from roughly 320 projects across the country had followed suit as of July 29, according to a tally of statements from homeowners who said they will stop paying their mortgages circulating on GitHub.
Home buyers -some waving signs saying “Construction stops and mortgage stops!” -say the threat to halt payments is the only way to get their voices heard as projects stall and delivery times drag out.
But the bigger problem is that China’s broadly slowing economy – where property has traditionally been one of the core support pillars – is biting into employment and incomes is adding to the pressure. As a result, some buyers say they are increasingly unwilling to keep paying for a home they aren’t sure they will ever receive (in China, one purchases a new home while it is still in production, with little to no assurance one will get a finished product). More home buyers are choosing second-hand homes or new ones built by state-owned developers, which are typically in a stronger financial position.
And so, pressure on the government is building, but hopes for a large real-estate rescue package from Beijing remain unrealized. The Politburo, China’s top policy-making body, made clear recently that local governments are ultimately responsible for fixing the property woes in their markets. At the same time, amid China’s austerity, budget-strapped local authorities have strained to boost property demand, resorting to increasingly creative measures. Dozens of cities have lowered down payments and interest rates. Some are offering outright cash subsidies. Others have announced relief funds for cash-strapped developers or plans to take over troubled projects.
“But the sector won’t stabilize if developers’ liquidity crunch is not relieved,” said Song Hongwei, a research director of Tongce Research Institute, which tracks and analyzes China’s real-estate market.
It is in this context that a (limited) war is just the desired catalyst needed to reverse China’s accelerating economic contraction. And all that Beijing needed was an appropriate opportunity to launch one… an opportunity which has presented itself thanks to Nancy Pelosi’s unprecedented boondoggle into Taiwan which we are confident Beijing will now milk (or rather vodka) for all it’s worth.
Tyler Durden
Mon, 08/01/2022 – 23:20 - The Earth Just Started Spinning Faster Than Ever Before And Scientists Don't Know Why
The Earth Just Started Spinning Faster Than Ever Before And Scientists Don’t Know Why
Authored by Elijah Cohen via TheMindUnleashed.com,
The Earth recently completed a rotation faster than ever before at 1.59 millisecond under 24 hours, and the consequences for how we keep time have experts around the world alarmed.
It could be the first time in world history that global clocks will have to be sped up.
“This would be required to keep civil time—which is based on the super-steady beat of atomic clocks—in step with solar time, which is based on the movement of the Sun across the sky,” Time and Date reported.
Scientists don’t know what is causing our planet to spin faster than ever before, but some experts fear it could be “devastating,” while others speculate the shorter days could be related to climate change, of course.
Earth is spinning faster than it has in the last half-century, igniting a fiery debate about what we should do to keep the world on track. pic.twitter.com/3v0A6ru1gI
— Seeker by The Verge (@Seeker) July 30, 2022
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⏰ If it feels like there is never enough time in the day, there may be a reason.
Earth experienced its shortest day since records began last month https://t.co/g2eLh0DFaH
— The Telegraph (@Telegraph) July 31, 2022
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Since the Earth’s rotation has always largely been slowing down throughout time, atomic clocks have thus far only added positive leap seconds to keep up. 27 leap seconds have been needed to keep atomic time accurate since the 1970s.
However, it just emerged that on June 29, the Earth recorded its shortest day since scientists began using atomic clocks to measure its rotation, in what was only the latest of speed records set for our planet since 2020. It even came close again more recently on July 26, having completed a rotation in 1.5 milliseconds under 24 hours.
Spinning faster: Earth has recorded its shortest day since scientists began using atomic clocks to measure its rotational speed.
Why is this happening? We check the latest numbers: https://t.co/iD4K9rnaiy📷: ©https://t.co/K3v8k7bMqJ pic.twitter.com/lLifcY5Vko
— timeanddate.com (@timeanddate) July 27, 2022
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“A negative leap second would mean that our clocks skip one second, which could potentially create problems for IT systems,” the Time and Date website warned.
Meanwhile, Meta warned in a blog post last month that adding a negative leap second could have consequences for smartphones, computers and communications systems.
Citing Meta’s blog, the Independent reported that the leap second would “mainly benefits scientists and astronomers” but that it is a “risky practice that does more harm than good.”
Meta also warned that by adding a negative leap second, clocks will change from 23:59:58 to 00:00:00, and that this could have an unintended “devastating effect” on software relying on timers and schedulers.
“The impact of a negative leap second has never been tested on a large scale; it could have a devastating effect on the software relying on timers or schedulers,” Meta said.
This is due in part to the fact that time moving forward is seen as a constant in most technological systems.
If the internal clocks of these IT systems ever have to be adjusted backwards to account for an abnormally fast rotation of the Earth, widespread disruptions and massive outages are to be expected.
Time and Date suggests that the diminishing length of the shortest days may be related to Earth’s “inner or outer layers, oceans, tides, or even temperature,” although experts aren’t sure.
Leonid Zotov, Christian Bizouard, and Nikolay Sidorenkov will argue at the upcoming annual meeting of the Asia Oceania Geosciences Society this week that the Earth’s rotation speeding up may be related to the ‘Chandler wobble,’ the term given to the small and irregular movement of the geographical poles across the surface of the globe.
Experts say the ‘Chandler Wobble’ – a change in the spin of the Earth on its axis – may be to blame.
“The normal amplitude of the Chandler wobble is about three to four meters at Earth’s surface,” Zotov told Time and Date, adding: “But from 2017 to 2020 it disappeared.”
The International Earth Rotation Service in Paris, which tracks the planet’s rotation, will notify governments six months in advance if and when leap seconds must be added or removed.
As for whether or not the Earth will keep spinning faster and faster as the days continue to get shorter, nobody knows.
Tyler Durden
Mon, 08/01/2022 – 23:00 - Ammo Companies Say Packages Shipped With UPS Mysteriously Go "Missing"
Ammo Companies Say Packages Shipped With UPS Mysteriously Go “Missing”
Bearing Arms reported several firearm-related companies had their corporate accounts canceled by UPS. Not only that, but some of these companies also have had packages damaged or lost while in transit to customers.
One ammunition distribution company called “The Gun Food” reported out of a recent 18,000 rounds of ammunition shipped with UPS, only 6,000 made it to the end destination.
Collins, who owns the ammo company, remains suspicious that many packages he shipped via UPS have been damaged or lost. He said UPS had pinned the mishaps on his company for not correctly packaging the shipments. The carrier also said he had recently filed many claims on packages not getting delivered.
“They’re not even making it. And I don’t know what they are doing in the facilities, if they are purposefully damaging them. However, they are not making it to the customer. Now for every batch that does ship, we actually ship everything insured. And usually, depending on the quantity or the value of the shipment, we’ll ship it with some type of signature required. So it’s funny when they try to say, ‘well, you know, you put in too many claims.’ And it’s like, ‘well, no, I didn’t put in too many claims. Well, our customer never received their package that we had shipped,'” Collins.
Bearing Arms pointed out that Lee Williams over at the Gun Writer Substack, AmmoLand News, and the Second Amendment Foundation Investigative Journalism Project has also covered this phenomenon of firearm-related companies having problems with UPS.
It’s hard to say if this growing trend is an approach by the Biden administration to use corporations as a weapon to cause as much havoc as possible for gun companies or if there were UPS drivers stealing packages. Over the years, there have been numerous reports of UPS drivers stealing whole shipments of guns (read: here & here).
“In the investigation from the shipping aspect, we actually got involved with a couple of other folks that say that here in the Greater Atlanta area, where my business is based out of, we’ve ran into issues where people have not received their ammo. And we noticed it on both ends. I believe one of my distributors has actually lost over $200,000 worth of ammunition that just wound up missing,” Collins said.
Collins said his company’s new shipping policy would provide UPS with a “picture of how the box is packaged, as well as the actual box on the conveyor belt when the courier service scans it. So they really don’t have a foot to stand on when it comes to ‘did this package make it to the customer?’ ‘No.’ ‘And did the package get dropped off?’ ‘Yes.’ So you can’t really deny that.”
He said as threats to the Second Amendment broadened under the Biden administration, “you have to be very leery of the companies that you do business with, even on a personal level.”
Tyler Durden
Mon, 08/01/2022 – 22:40 - Victor Davis Hanson: Does GOP Get To Play By Radical Left's New Rules?
Victor Davis Hanson: Does GOP Get To Play By Radical Left’s New Rules?
Authored by Victor Davis Hanson via AmGreatness.com,
Are the New Progressive Rules Reciprocal?
Are today’s norms tomorrow’s norms?
In the era of peak woke we are supposed to accept any radical departure from long-held custom and tradition as the new normal.
Perhaps.
But if so, is the improved new code of behavior at least reciprocal? Will the radical Left really wish to live by its own novel normality when it loses power?
Have leftists ever read Thucydides on the stasis at Corcyra and his warning that zealots who destroy laws, customs, and traditions for short-term gain, soon rue the day they began making such changes when, in vain, they seek refuge in the very sanctuaries of behavior that they have destroyed?
Or will they just plead that their own rules do not apply to themselves given their innate moral superiority? Will they employ the John Kerry defense that one must bomb the upper atmosphere with private-jet carbon emissions in order to do the important work of flying around the globe to stop carbon emissions?
The Supreme Court
How about the new protocols regarding the Supreme Court?
Should conservatives mass at the home of Justice Sonia Sotomayor, decrying her radical nihilist abortionist ideology? Is that an understandable cri de coeur? Would such intimidation in the future moderate her extremism? Is that now an acceptable strategy?
Should Senate Minority Leader Mitch McConnell (R-Ky.) now lead a throng of screaming, right-wing protestors to the very doors of the Supreme Court? Should he egg them on by calling out by name Justices Ketanji Brown Jackson and Sotomayor, warning that they have sown the “wind” and will soon reap the “whirlwind,” as they will have no idea what “hit” them?
Is that moral courage? Would the New York Times and NPR nod approval to such “grassroots” anguish? Will anyone define what the incendiary “hit them” means?
When the Republicans gain the presidency and Congress, should they pack the court to 15 justices, on the cue of current progressive efforts?
Is the new norm that right-wing goons should dog Justice Jackson while eating at restaurants, throng her—and then be contextualized and excused by conservative cabinet members, media, and politicians? Is that our new normal reaction to rulings with which we disagree?
Should the next president trash the rulings of liberal justices when abroad before his foreign hosts? Should the conservative world keep mum when a crazy right-winger shows up fully armed near the homes of left-wing Supreme Court justices?
Should the Left one day achieve a 5-4 majority, would major conservative politicians then claim that their rulings are “illegitimate” and seek to find ways to nullify them?
Should conservative clerks leak controversial drafts of left-wing opinions to the media in hopes of mobilizing preemptive opposition to and strategies against subsequent progressive rulings?
Are the Left’s new Supreme Court protocols the new normal that the Right, when in power, should duplicate?
The Congress
If the Republicans enjoy a Senate majority in 2023, should they follow the left-wing cue of Barack Obama—to end the “Jim-Crow-era” and “racist” filibuster, and thereby end “obstructionist” ideologues who prefer “gridlock”?
Should right-wingers designate 550 sanctuary jurisdictions in which overreaching federal environmental law simply does not fully apply? Are there to be cities and counties where federal gun registration is de facto dropped—on the principle of a higher allegiance to the Constitution?
When Republicans take over the House in 2023, should they immediately start impeachment proceedings against Joe Biden, for destroying the border and ignoring his oath to faithfully execute immigration laws?
Will they also appoint a special prosecutor to investigate the “Big Guy” to find how much of son Hunter Biden’s cash he received and whether he fully reported such income to the IRS—all to impeach Biden a second time as a private citizen once he leaves office? Is that the Left’s congressional legacy?
Or should they call in Ivy League psychiatrists right now to tele-diagnose Biden as demented and deserving of an “intervention” under the 25th Amendment? Should they subpoena transcripts of all Biden’s private calls with foreign heads of state, or bring in those on the national security council to testify to what Biden said privately to foreign leaders, to ferret out any sign of senility or reference to Biden family skullduggery?
Should a newly elected House Speaker Kevin McCarthy (R-Calif.) tear up on national television the next misleading and factually inaccurate State of the Union address by Joe Biden? Will the nation then voice support for his adherence to the Nancy Pelosi norm?
Will there soon be a return of the January 6 committee in which Speaker McCarthy appoints only those Democratic members who voted in 2023 to impeach Joe Biden and were political lame ducks? Will he announce that any members of “the squad” will not be serving on any congressional committees in 2023?
Should the selectively packed committee examine the 120 days of 2020 rioting, the planned attempt to storm the White House grounds on May 31, 2020, the burning of a historic church or of a federal courthouse, and the Black Lives Matter/Antifa conspiracy to riot, loot, and destroy that was coordinated on social media?
Will they call in an “insurrectionary abettor,” Vice President Kamala Harris, to ask why in the violent aftermath of an attack on the White House grounds did she as a vice presidential candidate boast that “protests” such as those would and should continue?
Should “insurrectionist” Stacey Abrams be compelled to testify about her prior year-long efforts to “nullify” the Georgia gubernatorial vote?
Will the new Congress investigate all the House and Senate members who tried to reject the Ohio vote of 2004, or who sought to pressure electors to reject their constitutional obligations in 2016, or all the senior left-wing politicians who claimed that the president in 2017 was “illegitimate,” the vote of 2016 was “rigged,” and Joe Biden should not honor the count in 2020 if it did not go his way?
Will there be a new committee to investigate “left-wing rage,” to ascertain why political attackers, mass shooters, and attempted assassins serially target conservative congressmen, senators, Supreme Court justices, and gubernatorial candidates? Do they use social media to plan their nefarious plots?
Was such unaddressed and ignored congressional rejectionism in the past “reckless” or even “insurrectionist”?
The Military
What will be the new norm should a new Republican-appointed chairman of the Joint Chiefs or defense secretary vow before Congress, without supporting documentation, that he is rooting out dangerous BLM and Antifa sympathizers in the military as likely insurrectionists?
Will he express worry about “black rage” that is reflected in inordinate proportional representation in spiking violent crime, and especially disturbing new asymmetrical hate-crime statistics? Will he worry that white males are vastly “overrepresented” in combat units and die on the front lines at twice their numbers in the general population? Is that a de facto violation to the most existential degree of equity and inclusion or diversity?
What will be the reaction if the next chairman of the Joint Chiefs calls up his Chinese Communist counterpart to warn him that Joe Biden is senile and talks recklessly about “removing” Putin, and thus China or Russia must be warned should Biden suggest something dangerous? Do new military norms accept the chairman now has operational authority and can simply abort the chain of command when he sees fit, regardless of the statutory link between the president and defense secretary and their theater commanders?
What will happen if a slew of conservative retired generals now senses a new normal and will thus publicly decry Joe Biden as a fascist, a Nazi-like failure, a veritable architect of Auschwitz border cages, a liar, a cheat, and deserving of removal the sooner the better? Will that be OK?
Will there follow applause or at least exemption under the new normal, or will an unhinged liberal voice in the wilderness vainly suggest such invective is improper if not illegal under the Uniform Code of Military Justice?
What would happen should the new military demand mandatory conservative and traditional civic education among the ranks, banish the current woke diversity-equity-inclusion industry—and thus see recruitment crash? Would the Left stay silent or scream as the army struggles to achieve just 40 percent of its recruitment goals?
The FBI and CIA
What about the new normal at the FBI? Will it stay a retrieval service, but this time around for a Republican president in 2025—should an addled first family member lose a feloniously incriminating laptop, a sexually embarrassing diary, an unlawfully and deceitfully registered handgun, or a wayward crack pipe?
Will the next FBI director preposterously open an investigation during the 2024 election, on rumors that the activities of the Biden family, of General Mark Milley, of Anthony Fauci, of key senators with Chinese financial interests all constitute a sort-of-kind-of “collusion” conspiracy with China, aimed at advancing a self-enriching and mutual left-wing agenda in the presidential election?
Will the FBI director claim 245 times under oath before Congress he has no memory of what he has ordered? Will it be a slap-on-the-wrist, reduced-sentence tacit approval that an FBI lawyer altered a court document to ensure we get to the bottom of “Chinese collusion”? Is it alright if we learn that a Republican presidential candidate hired a foreign ex-spy, and hid his pay behind three walls, to find dirt on his opponents?
Will Congress bring in some old right-wing FBI retired bulldog to compile a “dream team” of Federalist Society legal zealots to hunt for “Chinese collusion” among Democratic grandees?
Will the FBI investigate Mark Zuckerberg, following his $419 million dark-money trail to see how many state registrars were absorbed by Zuck-bucks cash in conspiratorial fashion?
Will an enterprising conservative ex-spy compile a fantasy “dossier” of alleged Biden family shenanigans, in lurid sexual detail, with the Chinese, and then peddle it to right-wing blogs on the eve of an election, all while being paid by the FBI?
In answer to the “Access Hollywood” and various lawsuits and investigations of Donald Trump, will Congress form a committee equally to ferret out the apparent pandemic of left-wing sexual harassment, illicit romances, and dangerous liaisons, as they call in the Cuomo brothers, Andrew Gillum, Lisa Page and Peter Strzok, Rep. Eric Swalwell (D-Calif.), former New York Governor Eliot Spitzer, former Rep. Anthony Weiner (D-N.Y.)—and Joe Biden?
Will the FBI in 2025 be dispatched to school board meetings to monitor whether left-wing activists are too intimidating to board members? Will they bring in SWAT teams to arrest leftist political operatives whom the Republican Justice Department finds possibly indictable?
Will they put in chains prominent ex-Democratic advisors who refuse a Rep. Jim Jordan (R-Ohio) subpoena to appear before his new Hunter Biden committee? Will they roust out in their underwear, leftist reporters who are rumored to be in possession of a Republican president’s daughter’s diary, intimating she took inappropriate showers with her dad?
Will 50 prominent conservative ex-CIA operatives and other intelligence officers swear in 2024 that a lost Republican laptop outlining payoffs from foreign sources was a product of Chinese disinformation? Will former conservative CIA directors or directors of national intelligence lie under oath to Congress with impunity?
In sum, are today’s norms tomorrow’s norms?
Or were they simply transitory and necessary in the age of the dreaded Trump—as one-time leftist means to achieve noble ends, and thus should never be institutionalized much less boomeranged?
If so, will they reappear whenever the Left returns to power?
Or should they be applied equally to the Left right now to ensure that outrage and disgust with such immoral and illegal machinations prohibit their use in the future?
Tyler Durden
Mon, 08/01/2022 – 22:20 - Home Price Growth Suffers Largest Monthly Decline Since 1970s
Home Price Growth Suffers Largest Monthly Decline Since 1970s
We recently warned there were emerging signs the housing market had peaked. More evidence has been published today that suggests June was likely the turning point following the most significant annual home price growth decline since before Paul Volcker became Fed Chair.
Black Knight, Inc.’s Data & Analytics division published its Mortgage Monitor Report showing June was “the greatest deceleration in home price growth on record.”
Black Knight Data & Analytics President Ben Graboske said June was a record-breaking slowdown of nearly two percentage points from 19.3% to 17.3% annual home price growth and coincided with the largest single-month increase in homes listed for sale in 12 years.
“The pullback in home price growth in June marked the strongest single month of slowing on record dating back to at least the early 1970s,” said Graboske
For some context, two years before the housing crash of 2008, in 2006, the biggest single-month deceleration was 1.19 percentage points. The rapid slowdown in June comes as the Biden administration aims to crush the housing market (with the help of the Fed’s rate hikes) to lower inflation. They’ve already managed to trigger a technical recession.
The slowdown was nationwide and across all top 50 markets, with some areas slowing father than others. A quarter of US markets saw growth slow by three percentage points in June, with four decelerating by four or more points in that month alone. Slowing could be accelerated as it takes about five months for interest rate shocks to be reflected in home price indexes.
A sudden drop in home price growth in June is no surprise, as we warned back in March that housing affordability, measured by Goldman Sachs, has deteriorated to its worst level on record.
We also pointed out last month a housing crash was imminent as “Mortgage Rates Explode Price Cuts Soar And Buyer Demand Collapses.”
Black Knight’s Graboske continued: “We’re also seeing significant shifts in the demand-supply equation, though that too has quite a way to go before normalization.”
The report finds the average San Jose home value has plunged 5.1% (-$75K) in the last two months, marking the largest decline from highs among any metro area in the country. Seattle had the second largest drop of 3.8% over the same period of $30k. San Francisco (-2.8%, -$35K), San Diego (-2%, -$19.5K) and Denver (-1.4%, -$8.7K) round out the top five.
For people who panic-bought homes at record highs over the last two years, a further pullback in price growth is expected through the year’s second half. A slowing housing market could leave many underwater when prices start gapping lower.
Tyler Durden
Mon, 08/01/2022 – 22:00 - Why Markets Are Calm As Taiwan Tensions Intensify
Why Markets Are Calm As Taiwan Tensions Intensify
By Ye Xie, Bloomberg markets live commentator and reporter
Despite rising tensions between the world’s two most-powerful countries over US House Speaker Nancy Pelosi’s possible visit to Taiwan, global risk markets have been quite resilient.
That fits the historical pattern since markets often struggle to handicap geopolitical risks pre-emptively. Investors may also take comfort that market reaction to geopolitical events tends to be short-lived. Either way, we are in unchartered territory, and these risks increase the appeal of bonds in both countries.
Earlier this year, the Economist called Taiwan the “most dangerous place on Earth” in one of its cover stories. So reports about Pelosi’s potential landmark visit and angry protest from Beijing naturally put people on edge. The White House briefed reporters about possible responses from China, including firing missiles into the Taiwan Strait, launching new military operations, crossing an unofficial no-fly zone between Taiwan and the mainland and making “spurious” legal claims about the strait.
Yet global markets have largely dismissed it as a non-event. While the yuan weakened 0.5%, its one-week volatility was largely muted. ADRs of Taiwan Semiconductor Manufacturing Co., the world’s largest chipmaker, barely moved; neither did the S&P 500.
It’s not the first time that markets have remained relatively calm amid rising geopolitical risks. Despite weeks of military buildup on the Ukraine border, markets generally underestimated the risk of Russia’s invasion. It underscores the difficulty investors face when trying to price in the risk of wars.
Bhanu Baweja, UBS’s chief strategist, did recommend his clients hedge the risk of the Russia-Ukraine war before Putin eventually invaded, a call that proved to be prescient. He says the situation in China is different. First, the timeline of a possible confrontation over Taiwan is less clear cut than it was with Russia’s attack, making hedging more difficult.
In addition, foreign investors have pulled out of China’s bond market and inflows to stocks have diminished since Russia’s invasion sparked concern about potential secondary sanctions against China. The need for hedging is less so. It’s more of a slow-burning situation than a cut-and-run, he said.
Investors also may be lulled into complacency by past experiences. “People are numbed. People do expect some non-negligible risk of Pelosi visiting and China reacting poorly … i.e. a lot more war planes over, and military exercises near, Taiwan,” said Jason Hsu, chief investment officer at Rayliant Global Advisors. “But that’s not new and have historically not led to actually conflicts.”
Finally, markets’ reactions to geopolitical risks tend to be short-lived. For example, US stocks actually increased during the Cuban missile crisis and rallied even more in six months.
Source: Amundi
Of course, that markets haven’t preemptively reacted doesn’t mean the risk is gone and that investors won’t sell later. If anything, these developments reinforce the rationale for the current bond rally since investors are already concerned about a potential recession.
Tyler Durden
Mon, 08/01/2022 – 21:40 - NYC Store Locks Down Cans Of Spam Amid Crime Wave
NYC Store Locks Down Cans Of Spam Amid Crime Wave
A combination of inflation and rising crime has caused one New York City store to lock up its spam in plastic theft-prevention cases.
Shoppers at Duane Reade located in the Port Authority bus depot were faced with the ‘secured’ cans, which cost $3.99 each.
“I’ve never seen that before!” laughed one cashier, while removing a can of Spam from its anti-theft covering.
And it wasn’t limited to just Spam…
I’d love to have one to keep, case and all — but there’s only one way to do that… pic.twitter.com/PX3dbSd52B
— willy 🌜💧 (@willystaley) July 28, 2022
“Some of these things are pretty ridiculous,” said 43-year-old Jenny Kenny of Kentucky, who says she knew about the crime wave but still couldn’t believe there were “so many” items in anti-theft boxes, according to the New York Post.
As prices and crime skyrocket, New York City stores have taken to locking up staples like toothpaste and soap to prevent crooks from stealing and then hawking the products on the sidewalk or online marketplaces like Amazon and eBay.
Yet some shoppers were confused why Spam, along with $1.89 cans of StarKist tuna, was enclosed under plastic, while pricier foodstuffs like $5.49 cans of Amy’s soup sat unencumbered. -NYP
Store employees say thefts have been surging for more than two years – with one estimating that there are at least four shoplifters every night.
“I don’t think they stop anything,” said one clerk, 21-year-old Iggy, referring to the anti-theft cases. “It’s security theater. If you really needed it, you would stomp on it.”
According to the report, petty larceny complaints have spiked 52% y/y at the NYPD’s Midtown South Precinct, which includes the Port Authority bus terminal – rising to 1,771 incidents through July 24.
Meanwhile, Spam prices are set to increase after Hormel CEO Jim Snee said in May that they were experiencing increased costs of transportation, packaging and meat.
A spokeswoman for Walgreens, which owns Duane Reade, wouldn’t say why the Spam was locked down, but that installing anti-theft devices is done “in response to theft data.”
Tyler Durden
Mon, 08/01/2022 – 21:20 - Sen. Johnson Expects 'Deal' To Conceal Indictment Of Hunter Biden
Sen. Johnson Expects ‘Deal’ To Conceal Indictment Of Hunter Biden
Authored by Jack Phillips via The Epoch Times (emphasis ours),
Sen. Ron Johnson (R-Wis.) said on July 31 that he expects there to be an agreement to conceal an indictment of Hunter Biden.
Hunter Biden, son of President Joe Biden, attends the ceremony for the Presidential Medal of Freedom, the nation’s highest civilian honor, during a ceremony honoring 17 recipients, in the East Room of the White House in Washington, on July 7, 2022. (Saul Loeb/AFP via Getty Images) Johnson predicted in a Fox News interview that law enforcement “may indict Hunter Biden, but they’ll probably seal—they’ll do a deal—they’ll seal all the information.”
“The American public will never get the full truth,” he said.
Both Johnson and Sen. Chuck Grassley (R-Iowa) have been involved in a yearslong investigation into the business dealings of President Joe Biden’s son in places such as China, Ukraine, and elsewhere. The pair released a report in September 2020 that detailed extensive financial connections between Chinese Communist Party-linked entities and individuals and Hunter Biden.
“We’ve known that the Bidens are a corrupt family for years,” Johnson told Fox News’ Dan Bongino, noting that the “corrupt mainstream media has been covering it all up” and “even the FBI.”
Johnson also predicted that legacy news media outlets will now turn on Biden amid increasingly low poll numbers.
In March, both Republican senators presented bank records on the Senate floor showing CEFC China Energy, a now-defunct firm, made payments to Hunter Biden. That included a $100,000 wire payment to one of the younger Biden’s companies, Owasco, from CEFC.
Other payments include a wire transfer of $5 million to Hudson West, a company Hunter Biden invested in and managed, from Northern International Capital, a business that partnered with CEFC. A contract also made public by the senators shows that $500,000 went to Hunter Biden as a “one-time retainer fee.”
Sen. Ron Johnson (R-Wis.) speaks during a hearing in Washington on Jan. 24, 2022. (Drew Angerer/Getty Images) Two others show a $1 million payment made to Hudson West by CEFC and a transfer of $1 million from Hudson West to Owasco, with the money appearing to go to Hunter Biden for the purposes of representing Patrick Ho, a Chinese businessman who has helped CEFC gain advantages through bribery.
FBI Interference
In a recent letter, Johnson further claimed that the FBI attempted to undermine their congressional investigation in mid-2020.
Amid recent “whistleblower revelations,” they “would strongly suggest that the FBI’s August 6, 2020 briefing was indeed a targeted effort to intentionally undermine a Congressional investigation,” he wrote in a letter (pdf) to top Department of Justice officials and members of other intelligence agencies.
“If these whistleblower allegations are accurate, how can your agency, Director Wray, be capable of investigating the president’s son?” Johnson wrote in his letter. “Unfortunately, the FBI can no longer be trusted to investigate Hunter Biden with integrity and the equal application of law.”
Read more here…
Tyler Durden
Mon, 08/01/2022 – 21:00 - Manchin-Backed Spending Bill Would Tax Oil Companies $25 Billion And Spend $370 Billion On Climate Change
Manchin-Backed Spending Bill Would Tax Oil Companies $25 Billion And Spend $370 Billion On Climate Change
At a time when the Biden administration is both vilifying the oil and gas industry at any chance they get, yet also paradoxically searching for new supply to bring online to mitigate soaring prices in the sector, a new $25 billion tax bill could be on its way to oil companies.
Senate Majority Leader Chuck Schumer and Senator Joe Manchin’s that was introduced last week includes the $25 billion in new taxes, Bloomberg reported this weekend. The hikes are similar to ones that would have raised $25 billion over 10 years in the House-passed Build Back Better Act.
The newly implemented tax bill for oil companies would come from a “long-lapsed tax on crude and imported petroleum products to 16.4 cents per gallon”, a summary of the bill, which was released late on Sunday, indicated.
The Superfund tax previously “stood at 9.7 cents per barrel until it lapsed at the end of 1995”, Bloomberg noted. It was formerly paid with the intention of helping clear up hazardous waste sites (hence the “Superfund” name).
The Bill released last week was 725 pages, and so we’re certain that more wonderful goodies will make their way into the public discourse as the bill moves closer to the President. In addition to the crude tax, Bloomberg writes that it places a “new first-time fee on methane emissions rising to as much as $1,500 a ton and increases the royalty rate companies pay to the government for oil and gas produced on federal land.”
In other words, the Biden administration would be trying to tax new oil supply online. Good luck with that.
And, of course, what would any completely ass-backwards bill be without about $370 billion in spending to help fight climate change at the very same time the country is in the midst of an inflationary crisis?
As Zero Hedge contributor Quoth the Raven wrote last month, the war on capitalism continues:
It’s so clear this isn’t just a leftist war about clean energy, it’s a war on capitalism and profitability. The left absolutely hates that oil companies make money. Biden recently complained they are “making more money than god” but failed to say they “lost more money than god” when they burned through $20 billion in 2020.
Leftists politicians believe these companies simply don’t deserve it. The left wants a state planned economy where they dictate which companies are virtuous enough for them to be the bearer of profits, regardless of how integral the products or services are to them in their daily lives.
And as we see, as these companies return back to profitability, all of a sudden it’s important to immediately denounce them. This is a war on capitalism.
Tyler Durden
Mon, 08/01/2022 – 20:40 - Would Eliminating Bots Really Fix Twitter?
Would Eliminating Bots Really Fix Twitter?
Authored by Kalev Leetaru via RealClear Politics,
Earlier this year, Elon Musk created shock waves with his unsolicited offer to purchase Twitter, arguing that the social media platform plays an existential role in promoting democracy and freedom across the world. Yet in subsequent months, he has attempted to scuttle the deal, claiming the platform is so filled with bots and spam accounts that it is not worth the $44 billion purchase price. A closer look at the numbers suggests that Twitter’s problems are far deeper than bots – and even if the company managed to entirely eliminate them, doing so would not slow its degeneration into a stagnating echo chamber.
Since reaching its peak of 500 million daily tweets in August 2013, Twitter has been a platform in decline. By November 2018, the platform was seeing just 320 million daily tweets. The pandemic lockdowns that forced the world online proved a boon, helping the platform to once more reach 500 million daily tweets. Just months later, Twitter gave up all of those gains when its efforts to combat election misinformation spectacularly backfired. Daily usage has languished ever since, with even the prospect of Musk’s ownership failing to resurrect the platform’s fortunes.
In Musk’s telling, automated user accounts known as “bots” are at the root of Twitter’s ills. While the company estimates that less than 5% of all accounts are automated, Musk believes the number to be far higher, with some industry estimates putting it at 15% or more.
Some automated accounts perform useful tasks, such as automatically tweeting alerts about earthquakes or answering basic questions. On the other hand, bot accounts have also been used to attempt to influence elections, promote financial fraud, and amplify falsehoods.
While Musk has not produced an exhaustive list of the ways in which he believes bots harm Twitter’s ecosystem, he has cited the use of bots to influence public opinion and entrench echo chambers as problematic. While it is certainly true that bots have been used for such campaigns, to what degree do they systematically deviate from overall conversational behavior on the platform?
A decade ago, just 20% of tweets were retweets, meaning Twitter was largely a place to go to hear from the world. Today more than half of everything posted to Twitter each day is a retweet, and as much as 10% of all daily posts are retweets of and posts by the 0.4% of users with “verified” accounts.
If bots were the driving force behind Twitter’s echo chambers, one would expect to see a small number of users accounting for an outsize fraction of daily retweets. Instead, there is nearly a 1:1 ratio of daily retweets and distinct user accounts sending those retweets, meaning that retweeting is an entrenched behavior seen across all of Twitter’s users.
Similarly, 75% of tweets today mention another user, while just 25% are in the form of a reply to another user – indicative of a place where people come to shout at one another rather than converse. As with retweets, these behaviors are fairly evenly distributed across Twitter’s entire user base, rather than concentrated among a small set of users – as might be expected if bots were driving these behaviors.
On the other hand, examining the median age of all accounts that tweet each day, the platform began experiencing heavy churn (users joining and then quickly leaving) in 2018, at around the time that retweeting stopped linearly increasing. One possible explanation for this is increased anti-bot enforcement by Twitter that forced bot operators to constantly register new accounts as their old ones were deleted. If true, this would suggest that bots are sufficiently entrenched on the platform that aggressively deleting them had an existential impact at the level of Twitter itself. At the same time, most other major metrics, from user mentions to hashtag use, remained unchanged, suggesting that even if this was a bot purge, their impact on the platform is limited.
Rather than bots driving the conversation on Twitter, it is the verified accounts of politicians, journalists, academics, and other celebrities like Musk that seed the echo chambers he so despises.
Are Twitter bots a relatively minor nuisance, or do they existentially shape what people talk about on the platform? Anecdotal evidence suggests some potential connection between increased user churn and decreased retweeting, but this could simply reflect changing usage patterns from new users, rather than a mass-scale bot purge. Similarly, retweeting is evenly distributed across users, rather than centralized in a small cadre of bot-like accounts, suggesting that echo chambers are a native feature of Twitter’s evolution, rather than an antisocial behavior foisted on it by automated robots. The end result is that while we can’t say definitively what percentage of Twitter users are bots, it is clear that simply purging the platform of bots won’t fix its most existential issues, from echo chambers to a stagnating user base.
RealClear Media Fellow Kalev Leetaru is a senior fellow at the George Washington University Center for Cyber & Homeland Security. His past roles include fellow in residence at Georgetown University’s Edmund A. Walsh School of Foreign Service and member of the World Economic Forum’s Global Agenda Council on the Future of Government.
Tyler Durden
Mon, 08/01/2022 – 20:20 - Barclays Faces Billion-Dollar Loss From Structured Note 'Paperwork Error'
Barclays Faces Billion-Dollar Loss From Structured Note ‘Paperwork Error’
In March, we reported Barclays shocked many market participants when it suspended, until further notice, any further sales from inventory and any further issuances of a number of ETNs (including VXX and OIL).
According to a press release at the time, the suspension was because “Barclays does not currently have sufficient issuance capacity to support further sales from inventory and any further issuances of the ETNs.”
At the time, details were scarce and opaque with Barclays expecting a loss of approximately $600 million from the ‘error’ which was called “basic”, “bizarre” and “embarrassing” by analysts at the time.
Now, according to a new filing today, we get considerably more color on what exactly prompted this ‘paperwork error’ and how high the losses have already reached.
What did Barclays do wrong?
In August 2019, the SEC declared effective the 2019 F-3 of Barclays Bank which sought to cover the offer and sale of up to $20.76 billion of securities (in maximum aggregate offering price) registered thereunder.
The Subject Securities offered and sold by Barclays Bank during the Relevant Period, which comprised structured notes (“Structured Notes”) and ETNs, exceeded the maximum aggregate amount that Barclays Bank could offer from the 2019 F-3 by approximately $16.37 billion. In addition, Barclays Bank also offered and sold during the Relevant Period Subject Securities in the amount of approximately $1.27 billion that were issued under the 2018 F-3 in excess of the capacity remaining thereunder.
As such, certain offers and sales of Subject Securities were not made in full compliance with the Securities Act, giving rise to rights of rescission for certain purchasers of such securities.
The Issuer has therefore elected to make this Rescission Offer.
Translation – Barclays sold more securities than they were allowed and are now paying the price.
As a reminder, a rescission offer is an offer to rescind a securities transaction in which a securities law violation occurred or may have occurred.
The rescission offer is simple-ish – Barclays will buy back the securities from the investors at the initial purchase price (plus some interest).
There are over 3,000 structured notes on the list that are being offered rescission and 11 ETNs…
Given the market’s massive swings over the past couple of years, this rescission decision has meant surging losses for Barclays and that a number of investors have been rescued from terrible trades.
For some investors, this is a massive windfall.
Bloomberg highlights one security – a $1.8 million note tied to Peleton – which trades at an indicate price of just 7.9c on the dollar (after PTON’s share price collapse), but which Barclays will be forced to buy back at 102.06c on the dollar for those initial investors.
That’s an approximate 1200% gain for any investors who accept the rescission offer.
Finally, as Bloomberg reports, net losses from the error so far have reached £751 million ($914 million), Barclays said in its second-quarter results last week. The bank delayed a billion-pound share buyback, suspended the sales and issuance of dozens of exchange-traded notes and halted market-making activities in its own debt securities due to the error.
Tyler Durden
Mon, 08/01/2022 – 20:00 - The Mind-Blowing Stupidity Behind The $280 Billion 'Chips For America Act'
The Mind-Blowing Stupidity Behind The $280 Billion ‘Chips For America Act’
Authored by Rob Smith via RealClearMarkets.com,
It was a beautiful midsummer late afternoon. I had just checked into the “Inn” in Woodstock, Vermont. I grabbed my fly rod and hurried over to a picturesque covered bridge and waded down into the cool rushing water. I stuck a $20 cigar (spiced Maduro wrapper) in my mouth. With long sweeping rhythmic motions, I cast the fly wherever I wanted. It was a scene out of a Norman Rockwell illustration. Could life be any better?
After an hour or so, an old codger with a thick New England accent approached me and said, “there haven’t been any fish in this brook for 50 years.” In the south, we use “creek” to describe any tributary flowing off a river. At first, I was confused and merely retorted “Sir?” He repeated himself. Even though I hadn’t caught anything, I was enjoying myself, but now the fun was over, so I limped back to the Woodstock Inn. Had he not told me there were no fish, I would have stayed in that spot until well after dark and would have thoroughly enjoyed every cast!
The problem we have in America is many of our political elites are fishing over streams with no fish. They enjoy the covered bridges, the cigars and the feelings and pleasure derived from their efforts, but there ain’t no fish to be caught. The purpose of fishing is to catch fish. The purpose of work is to produce an intended, profitable result, but the nimrods and pinheads in Washington and academia don’t understand this. It’s all about how they “feel” when making beautiful casts under a New England covered bridge. When I learned that were no fish in the brook, I stopped fishing, but our academics and blowhard elites keep casting, oblivious to the fact that their casts will never produce any fish.
It’s like Bill Murray in the Groundhog’s Day movie. Repeatedly, the mediocre mullets in Washington are wrong about everything, and I mean absolutely everything! The gullible among us believe they will catch fish and feed us, so we watch them cast in awe at the bucolic scenery, even though it is an absolute certainty that they will never even get a nibble.
Has the Congressional Budget Office ever been even close to right in its projections? Was Anthony Fauci right about anything? Have you ever read the Congressional Record concerning the 1935 Social Security Act? How about the trillion dollars spent in the Middle East to turn barbaric tribesmen into Jeffersonian idealists via nation building? The formation of the Department of Education in 1979 sure turned out well. $68 billion/year is being spent and our nation’s youth can’t find the United States on a map of the world. Buy hey, at least they are learning that there are 168 genders, and boys can rest assured if they wish to cut their nuts off and become a semi-woman, the DOE is there for them. The secret $1.8 billion in cash the Obama administration gave to the mullahs in Iran was a real foreign policy home run. It completely stopped Iran’s state sponsored terrorism and desire to see Israel blown off the map. Not. The Green New Deal is fun; pretending that the world is going to end unless Americans give up all their property to fanatic worshipers of Dr. Evil, eh, I mean Klaus Schwab. How many times has the Malthusian Left been proven wrong about their climate change predictions? Remember Carl Sagan and the nuclear winter? Yet, they keep fishing. As I write this the philosopher kings at the Federal Reserve are actively trying to destroy the stock market, the housing market and to keep wages from going up in efforts to “help” us. Why Lord, why? Why do so many put their faith in government? Is there no historical memory? Here’s a quick history and economics lesson. Memorize this simple maxim of economics and you will know more than any graduate of Harvard’s Kennedy School. “The government fu#ks up everything it touches.”
It works like this. The government ignores the fact that individuals can look out for themselves and that markets work. Thus, it enacts legislation to fix a perceived problem, but the legislation does not fix the problem. It creates much bigger problems (see the American health care system). Then to fix the much bigger problem that it created, it enacts more legislation and Groundhog’s Day never ends.
All of this is on full display with Congress about to pass H.R.7178, the Chips For America Act. Remember when Jim Jones had all his followers in Guyana drink the Suicide Punch. That’s what our government did with its response to the Coronavirus. Instead of doing nothing and letting individuals make decisions in their best interests, our government shut down the world economy. Now we have a semi-conductor chip shortage. Well, DUH, you dumb sons of a bitches. What did you think would happen? The stupidity is mind blowing.
The reason there were no chip supply line shortages pre-fake-pandemic is because millions of “invisible hands” from all over the world provided the needs for a world-wide market. It’s the miracle of markets, and each year the government did not intervene “by trying to help the chip market,” the better the chips and the cheaper the chips became per unit of processing power. Yes, most of these chips were produced overseas. Big deal. That’s the way free trade works. It works the way it does because the people who are busting their ass and spending their own money in a particular industry want to buy the chips they buy from the people selling them. Trade is voluntary. Opposite parties to a transaction engage in trade with one another because they both win. It’s a marvelous, beautiful system.
Now what’s going to happen now that the U.S. government has stuck its nose into the semi-conductor market. Remember when the United States had restrictive tariffs and limits on foreign cars. Everything made in Detroit was a pile of junk; think “Plymouth Duster.” Once Detroit had to compete with Japan and Germany, American cars got a whole lot better and much cheaper as better cars produced 2 to 3 times more usable miles and lasted longer.
So what’s to become of the price and quality of semi-conductor chips? This bill carries a $280 billion cost. Doesn’t this crowd out private investment? Isn’t it better to leave money in the private sector such that overall investment can flow to its most productive use? What are the potential pitfalls and unintended consequences of this legislation? When has a government industrial policy, picking winners and losers ever worked? Why can’t Congress simply get out of the way, reduce its regulatory burden on business and let the market solve the chip shortage? By the time this Leviathan Legislation begins to bear any fruit, won’t market forces have already fixed the chip shortage?
The opening paragraph of the “Chips Act” states that it “establishes investments and incentives to support U.S. semiconductor manufacturing, research and development, and supply chain security.” Government investment in preferred industries! Yeah, that worked real well with Solyndra, the Synthetic Fuels Corporation, the Clinch River Breeder Reactor and I could go on. When Britain nationalized all its industries after WW II that too was a brilliant move, as the once richest nation in the world had to ration food to keep its people from starving (of course rationing works about as well as rent control, but hey try talking sense to someone like Clement Atlee).
Who can be against research and development? Um, eh Rob Smith for one. This isn’t private sector research and development, this is government research and development, which means politicization to control the thoughts and actions of the chosen recipients. These recipients don’t have any skin in the game as they do not own the chip companies. This is like paying me to research the North American Snail Darter. I don’t care about little salamanders, I just want to please my benefactors because I want more money. Pay me and I will tell you whatever you want to hear.
$80 billion is going to the National Research Foundation, the sister entity of the National Institute of Health. You know, the same think tank of brilliant scientists that told us the vaccines worked and wouldn’t kill people! The same government experts who created the chip shortage via its advice to ruin the world economy. This bill is completely unnecessary, the chip shortage problem will solve itself. $280 billion will flow towards a protected class of government sycophants in a “scratch my back I’ll scratch your back” corrupt system of political patronage.
It is insanity to fish in a stream where there are no fish. It is even more insane to spend $280 billion to fix a problem that does not need fixing.
Tyler Durden
Mon, 08/01/2022 – 19:40 - Biden Stresses "No Civilian Casualties" In Announcing Op That Took Out AQ's Zawahiri
Biden Stresses “No Civilian Casualties” In Announcing Op That Took Out AQ’s Zawahiri
Update(1957ET): Biden in his short speech announced the death of longtime al-Qaeda leader and mastermind Ayman al-Zawahiri, emphasizing that “no civilians” were harmed – including Zawahiri’s family – during the double hellfire missile drone attack that took him out.
“He carved a trail of murder and violence against American citizens, American service members, American diplomats and American interests,” Biden described of the AQ leader. “Now, justice has been delivered and this terrorist leader is no more.”
“None of his family members were hurt, and there were no civilian casualties,” Biden said. Shaking his finger to the camera, the US president warned took the opportunity to warn: “if you are a threat to our people, the United States will find you.”
UPDATE: CIA’s Zawahiri strike
• 9:48 pm ET Sat,6:18 am Kabul Sun
• UAV attack, 2 hellfire missiles
• Killed on balcony
• Moved to Kabul w family in 2022
• Family unharmed
• Haqqani network KNEW where he was, cleaned up after attack
• No US forces on ground(US officials)
— Joyce Karam (@Joyce_Karam) August 1, 2022
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For the US military and intelligence community, Zawahiri’s reported presence in the Afghan capital will raise questions no doubt. Previously after Biden’s controversial quick troop pullout and botched evacuation from Afghanistan after the over two decade long occupation, there was debate centered on whether the US would conduct “over the horizon” limited combat strikes and missions. With Zawahiri’s death, it appears so.
* * *
The Associated Press is reporting that a US drone strike in Afghanistan has killed top Al-Qaeda leader Ayman Al-Zawahiri.
The news is breaking minutes after the White House announced that President Biden will speak Monday evening on a “successful” operation against a “significant al-Qaida target” in Afghanistan.
“Over the weekend, the United States conducted a counterterrorism operation against a significant Al Qaeda target in Afghanistan. The operation was successful and there were no civilian casualties,” a senior administration official announced later afternoon.
US STRIKE KILLED TOP AL-QAEDA LEADER AYMAN AL-ZAWAHRI: AP
Other journalists and pundits have also been pointing to a high-level strike on a top terror operative…
The CIA carried out a drone strike in Kabul over the weekend, two U.S. officials tell me. This would mark the first publicly known CIA strikes (that I can recall) since the fall of Kabul last year.
— Idrees Ali (@idreesali114) August 1, 2022
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Source just told me AQ chief and bin laden successor, Ayman Zawahiri, has been smoked. Hope it’s true. Rest in pieces.
— Eli Lake (@EliLake) August 1, 2022
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Biden is speaking despite having a “rebound” case of Covid-19, though the administration says the address won’t be open to the full press corps.
Fox News’ Lucas Tomlinson reviews the following background:
Zawahiri had a $25 million bounty on his head since 2001. In addition to planning 9/11, also behind attack on USS Cole that killed 17 American sailors in Yemen in 2000. State Dept. says he played role in August 1998 bombings of U.S. embassies in Kenya and Tanzania that killed 224.
As for Zawahiri’s reported death… there’s been ‘false-starts’ in the recent past:
Remember back in Nov. 2020 when it was authoritatively stated that Zawahiri was dead, and the rest of the counterterrorism field and the press treated it like gospel? Because it was what they wanted to hear… https://t.co/9PtAmxyXE1
— Bill Roggio (@billroggio) July 20, 2022
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And remembering bin Laden’s death deep inside (US ally) Pakistan’s territory, and the strange details surrounding it…
Did they already throw the body of Ayman al-Zawahiri in the ocean?
— Kevork Almassian🇸🇾🇦🇲 (@KevorkAlmassian) August 1, 2022
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Biden’s address is scheduled for 7:30pm eastern time. Watch Live:
Tyler Durden
Mon, 08/01/2022 – 19:25 - US Department Of Commerce Asks Gun Holster Companies For Sales Records
US Department Of Commerce Asks Gun Holster Companies For Sales Records
A startling new report via AmmoLand News outlines how the US Department of Commerce Census Bureau asked major holster manufacturers/providers for order numbers, product descriptions, and locations where the items were shipped.
Some holster companies rejected the Department of Commerce’s request for “commodity flow surveys” related to their sold products.
“We will never turn over any information on our customers to the government no matter the cost us,” Chad Myers, President of JM4 Tactical, said. “To do so would violate our core beliefs. We need to stand up to an overbearing government. Our customers can rest assured that their information is safe with us!”
AmmoLand said, “the Census Bureau sends out the Commodity Flow Survey to random companies every year … but this seems an abnormal amount of holster companies have received the notice leading some of the holster companies to wonder if the federal government has targeted them.”
This is alarming because the overreaching government could be attempting to create a registry of gun owners, types, and numbers of firearms owned via the information collected in the survey.
Holster companies have reached out to Arbiter Weston Martinez of Texas, a former Texas Real Estate Commissioner under former Governor Rick Perry, to push back on the government collection of data.
“Clearly, the Biden administration is saber rattling for the left in the wake of all the recent losses they have incurred by Supreme Court rulings,” Martinez said. “My clients and I will never back down from anyone that is trying to impugn our Constitutional and God-give rights like the Second Amendment.”
Holster companies do not have a choice and are bound by law to turn over all requested information or face fines.
Washington Gun Law President William Kirk provides more color on the Biden administration’s use of government agencies to collect data on law-abiding citizens. He said this administration is the least trustworthy of any administration in the country’s history regarding the lawful rights of gun owners.
It’s not hard to imagine the collection of holster data could be used for nefarious purposes by the government.
Tyler Durden
Mon, 08/01/2022 – 19:20 - China's Housing Market Slump Becomes A Real Issue
China’s Housing Market Slump Becomes A Real Issue
A few months ago, I wrote that the Chinese slowdown was much more than COVID-19 related and pointed to the challenges coming from the excessive weight of the real estate sector in the economy.
A research paper by Kenneth Rogoff and Yuanchen Yang (pdf) estimated that the real estate sector constitutes 29 percent of China’s GDP.
The problems coming from the slow-motion deterioration of the property sector have extended to the financial challenges of China’s local governments and may create a relevant fiscal problem for the nation’s public accounts.
“Sales at China’s largest housing developers fell 43 percent in June from a year earlier, according to China Real Estate Information Corp,” Bloomberg reported, creating an alarming funding gap for local governments, where finances are heavily dependent on land sale revenues, and a significant problem for the financial sector and the government. China’s central bank has promised to mobilize a $148 billion bailout to complete unfinished real estate projects as anger rises among property buyers that haven’t received their homes after advancing significant payments.
The size of the real estate sector in the economy is enormous, and the impact on gross domestic product (GDP) of a slump in sales may be impossible to offset with other sectors. According to S&P Global, China’s property sales will probably drop by about 30 percent this year due to the increasing number of homebuyers’ mortgage payment suspensions. This could be worse than in 2008 when sales fell by roughly 20 percent, Esther Liu at S&P Global Ratings told CNBC. There’s no sector in China that can mitigate the impact of such a drop in tax revenues and output.
JP Morgan explained the extent of the problem in a recent report “China’s housing market alarm bell rings again.” According to the report, “Since June 30, mortgage suspension requests due to delayed home delivery have expanded to more than 300 projects in different parts of China.” JP Morgan’s equity research team estimates that these requests represent a total value of 330 billion yuan ($49 billion) (or a mortgage value of 132 billion yuan ($20 billion) assuming a 40 percent loan to value).
Local governments have seen their fiscal revenue decline by 7.9 percent in the first half of 2022, and land sales collapsed by 31.4 percent. “Meanwhile, fiscal expenses by local governments rose 6.4% due to stickiness in fiscal spending and increasing costs associated with the zero-COVID policy,” and JP Morgan estimates that a 5 percentage point deceleration in real estate investment would reduce GDP growth by 0.6 to 0.7 percentage points.
There are relevant implications for many sectors and for families. Real estate developers were the largest issuers of commercial paper in China, and millions of savers invested in bonds and debt instruments of property developers to generate stable and safe returns. Many of those are defaulting. According to ANZ bank, China bond defaults have reached $20 billion in 2022, more than double last year’s total. Out of 19 defaults recorded, 18 came from property developers.
Real estate is also a relevant driver of economic activity in the services and other manufacturing sectors. The collapse of many developers is generating ripple effects throughout the sectors that thrive from construction and the activity that real estate incentivizes.
For investors globally, this is largely a domestic issue, and many expect the government to contain it through a series of bailouts and liquidity injections to the financial sector to prevent a credit crunch. From a financial perspective this may be correct, but there’s no way for the Chinese regime to prevent the macroeconomic implications coming from the burst of a bubble of such enormous magnitude. Chinese GDP growth slowed to only 0.4 percent in the second quarter, and youth unemployment is rising to new highs.
The Chinese regime may be able to contain the financial implications of the real estate crisis, but to do so it will have to abandon the target of 5.5 percent GDP growth for 2022 and probably reduce the 2023 objective to a much smaller figure. For years, the regime has been concerned about the rising level of debt in the Chinese economy and the elevated weight of the housing sector, but it seemed it expected growth and the improvement in the so-called “new economy” to disguise the problem.
Many international analysts expected China to be the first economy to prove that it could navigate a real estate bubble by deflating it through central planification. There was too much hope placed on central planning and too little attention on the extent of the problem.
Now it’s evident that there’s no sector that can dilute the effect of a real estate bubble burst. Even if the financial challenge is addressed through bailouts and liquidity injections, the impact will have to manifest itself in the currency, inflation, unemployment, growth, or all at the same time. Many believe that the easiest solution is to depreciate the yuan, but the central bank knows it isn’t that easy, as inflation would deteriorate the standards of living of an already discontent population, and devaluation would destroy the purchasing power of real wages and the value of savings.
If we can learn anything from this property slump it’s that inflating growth with a central-planned housing bubble never leads to an easy and manageable solution.
Tyler Durden
Mon, 08/01/2022 – 19:00 - Here Are The 5 Chinese Military Response Scenarios If Pelosi Visits Taiwan
Here Are The 5 Chinese Military Response Scenarios If Pelosi Visits Taiwan
Update(1840ET): FT is out with some further details on the White House’s handling of the Pelosi trip, now being watched carefully around the world…
Pelosi did not include Taiwan on her official itinerary — which includes Japan, South Korea and Malaysia — over security concerns, but the Financial Times first reported that she would be the first Speaker to visit Taiwan in 25 years.
…President Joe Biden dispatched senior officials, including national security adviser Jake Sullivan, to lay out the risks to Pelosi, but people familiar with the situation said she had decided to press ahead with the landmark trip.
Concerning strained and now fast deteriorating relations with China, Newsquawk earlier Monday had the following details in a note on Thursday’s Biden-Xi phone call:
A senior official in Beijing said the atmosphere of last week’s Biden-Xi telephone conversation was the worst among the five talks between the leaders and President Xi was said to have showed the toughest attitude he has ever shown to any world leader, while the most important topic in the conversation was China-US relations especially the ‘Taiwan Question’.
If indeed it’s accurate that Xi got “tough” in the call with Biden, expressing Beijing’s ‘red lines’ directly to the US president, this is certainly recipe for something big in terms of a major Chinese response (of course… in what form – diplomatic or military – nobody knows) should Pelosi show up in Taipei this week.
Amid concerns that if she lands with fighter jet escort guiding her military transport plane – which has been widely reported to be set for Tuesday night – this could trigger nothing short of a shooting war with China.
And now, a number of military analysis publications are examining the various possible ‘worst case scenarios’. One independent analyst and China-Taiwan watcher has laid out a full range of hypothetical, albeit realistic scenarios involving different potential levels of Chinese aggression against the self-ruled island of Taiwan.
Taiwan special operations forces during training exercises, file image via Ministry of National Defense R.O.C. Below is an excerpt from an insightful post titled Red Clouds of War Looming Over Taiwan by a Westerner who is a Taiwan-based researcher…
Scenario 1: The minimalist approach. The PLA occupies Jinmen or Matsu islands, as well as Taiwan’s islands in the South China Sea, and maybe even the Penghu Islands. They also declare part or all of the Taiwan Strait a “no go” zone to foreign military shipping. This would probably be fairly easy for the PLA, and Taiwan would probably not want to overcommit to naval action against the huge PLA Navy (PLAN) if it didn’t directly approach the main island.
Scenario 2: Hybrid warfare. Some sort of partial naval and aerial blockade of Taiwan intended to interfere with the economy, combined with stepped-up harassment, such as direct flyovers of Taiwan’s territory by PLA Air Force (PLAAF) jets, or incursions into Taiwan’s maritime space by China’s naval militia, protected by PLAN warships. This might also be accompanied by cyberattacks designed to shut down the internet and other infrastructure for days at a time. Taiwan would have no choice to assert a stiff defensive posture, resulting in real engagements between Taiwanese and Chinese forces, posing a serious risk of escalation.
Scenario 3: A serious attack but no invasion. This would involve air and sea warfare only, no boots on the ground. A full aerial and naval blockade, a protracted set of naval and aerial battles designed to degrade Taiwan’s military, combined with ballistic missile attacks on military targets. Aggressive cyberattacks turning off the internet and shutting down critical infrastructure for days or weeks. Once air and naval superiority were established, China could pick off targets at will, ratcheting up the threat until the government breaks.
Scenario 4: The Full Monty – a proper invasion. Total air and sea blockade, massive ballistic missile attacks on military targets, massive cyberattacks to paralyze virtually all military, governmental, and civilian communication and shut down critical infrastructure. Aggressive naval and aerial engagements to degrade Taiwan’s forces and achieve battlespace superiority, followed by sustained aerial assaults by fighters and bombers on military targets. A decapitation strike at Taipei by special forces units to try to seize key leadership personnel. Well-coordinated insider treason and sabotage actions by gangsters, planted CCP agents, and other groups sympathetic to China – the so-called “5th column”. An amphibious assault with close air support from fighters, helicopters, and battle drones at one or more locations in Taiwan, and very possibly a move to seize a major port, such as Keelung, Taipei Port, Taichung, or Kaohsiung. Then hundreds of thousands of troops would start rolling in until the island was occupied. That would be the plan, anyway. PLA success in such an endeavor is very unclear. But they could do a hell of a lot of damage trying. And yes, they might actually succeed, at least partially, such as in seizing and holding the region around Taipei.
Scenario 5: Worst Case (short of nuclear) scenario. Full air and sea blockade, massive ballistic missile attacks on military targets, massive cyberattack, aggressive naval and aerial attacks to degrade Taiwan’s forces and achieve battlefield superiority, followed by aerial assaults by fighters and bomber on military targets and area bombing of civilian targets. There are massive casualties, and Taiwan is crushed by brute force, surrenders, and then the occupiers enter the country and take it over.
The full analysis can be read here.
* * *
Update(1509ET): The White House in an afternoon press briefing condemned Beijing’s escalating rhetoric after it was widely reportedly hours earlier that House Speaker Nancy Pelosi will likely touch down in Taiwan Tuesday evening. There’s speculation she could even spend the night, based on anonymously sourced statements to Taiwan officials.
“There’s just no reason for this to escalate,” White House national security spokesman John Kirby said as a warning to China. “There’s every reason given the our national security interests — as well as the interest of our allies and partners that are that are staking the Indo Pacific on any given day — there’s every reason for this to not escalate.” Kirby didn’t confirm whether she’ll go through with it.
China reiterated over the weekend and into Monday that it will take “strong and resolute measures to safeguard its sovereignty and territorial integrity” – seeing in a possible Pelosi visit a violation of ‘red lines’. “Put simply, there is no reason for Beijing to turn a potential visit consistent with long-standing U.S. policy into some sort of crisis conflict or use it as a pretext to increase aggressive military activity in or around the Taiwan Strait,” Kirby continued in his statement.
-Q: If Pelosi goes to Taiwan, how will the White House find out? On Television?
-J. Kirby: The Speaker is flying aboard a US military aircraft, we will know..— Joyce Karam (@Joyce_Karam) August 1, 2022
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Kirby blamed China’s actions of staging provocative military drills both across from Taiwan and elsewhere in the South China Sea as a sign Beijing “appears to be positioning itself to potentially take further steps in the coming days, and perhaps over a longer time horizon.” He added:
“These potential steps from China could include military provocations, such as firing missiles in the Taiwan Strait or around Taiwan.”
Kirby further repeated the White House stance that it won’t interfere with members of Congress making their own decisions on visiting Taiwan.
- INDICATIONS CHINA MILITARY MIGHT RESPOND TO PELOSI TRIP: KIRBY
- ESCALATION IN TAIWAN STRAIT SERVES NO ONE’S INTEREST: US
- US WILL ENSURE PELOSI’S SAFETY IF SHE VISITS TAIWAN: KIRBY
- WHITE HOUSE SAYS WE WILL NOT TAKE THE BAIT, NOR WILL WE BE INTIMIDATED -KIRBY
- KIRBY ON TAIWAN: PELOSI HAS NOT CONFIRMED HER TRAVEL PLANS
- PELOSI HAS THE RIGHT TO VISIT TAIWAN: KIRBY
Russia: Don’t cross our red lines in Ukraine or we’ll take action.
US politicians: They’re bluffing. Cross those red lines.
*Russia invades.*China: Don’t cross our red lines in Taiwan or we’ll take action.
US politicians: They’re bluffing. Cross those red lines.— Caitlin Johnstone (@caitoz) July 27, 2022
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“Nothing has changed. There’s no drama to talk to. It is not without precedent for the Speaker of the House to go to Taiwan,” he said. “Nothing about this potential, potential business — which, oh by the way, has precedent — would change the status quo and the world should reject any PRC effort to use it to do so.”
Chinese officials and state media are vowing a swift, severe response if Pelosi flies into Taiwan…
…and China’s retaliation will not just target Pelosi, the Biden administration will also have to face the serious consequence of a comprehensive setback of China-US relations https://t.co/vl5cIIXjCb https://t.co/FeBQalJFwf
— Global Times (@globaltimesnews) August 1, 2022
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Meanwhile the FT is out with some further fresh details related to White House scrambling ahead of Pelosi’s possible visit to the self-ruled island: “President Joe Biden dispatched senior officials, including national security adviser Jake Sullivan, to lay out the risks to Pelosi, but people familiar with the situation said she had decided to press ahead with the landmark trip,” FT wrote.
* * *
Update(10:55ET): The vast majority of breathless Western media reports about Nancy Pelosi’s now “imminent” Taiwan visit are being sourced to Taiwanese media and officials; and among Taiwanese outlets it seems to race is on to produce more and more specific detailed predictions. For example, this is the latest out of Taiwan tabloid ETtoday – picked up by international news wires: US House Speaker Nancy Pelosi will arrive at Songshan Airport Tuesday evening at 10:30pm local time.
At the same time The Wall Street Journal is reporting Monday that “she’s definitely coming” – based on an unnamed source in contact with top Taiwan officials:
People whom Mrs. Pelosi is planning to meet with in Taiwan have been informed of her imminent arrival, this person said, though some details remain in flux. Some of Ms. Pelosi’s meetings have been scheduled for Tuesday evening, but most are set for Wednesday, the person said, adding that they include, but aren’t limited to, Taiwanese government officials. “She’s definitely coming,” the person said. “The only variable is whether she spends the night in Taipei.”
And now being reported by Bloomberg – minutes following the WSJ:
PELOSI IS EXPECTED TO VISIT TAIWAN TUESDAY: PEOPLE FAMILIAR SAY
And yet Pelosi herself – not to mention the White House – could likely be very much on the fence given China’s military has ramped up threats, and is now on a war-footing, based particularly on harsher quotes coming out in state media on Monday. Taiwan’s defense ministry has said “no comment” when asked to confirm is she’s arriving.
The Chinese army will surely eliminate Pelosi’s visit’s consequence through the escalation of military operations. As a result, this will make her dejected and humiliated: Global Times Commentator Hu Xijin#HuSays pic.twitter.com/6MrLRmNX3O
— Global Times (@globaltimesnews) August 1, 2022
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China has also announced closure of waters in the South China Sea amid ongoing PLA navy drills.
After weekend drills, specifically in response to reports of a Pelosi Taiwan visit, more have been announced, set from Tuesday through Friday.
The maritime administration in Qinglan, South China’s Hainan, issued a warning on Monday and prohibited entry to an area in the South China Sea due to military exercises from Tuesday to Saturday. pic.twitter.com/xHxRRd4mBn
— Global Times (@globaltimesnews) August 1, 2022
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This as the USS Ronald Reagan carrier strike group continues to patrol waters near Taiwan – possibly preparing to respond to any aggressive acts from China which could threaten a potential Pelosi visit to the self-ruled island.
Possible location of Ronald Reagan CSG on August 1, and its entire tracks from July 1 to Aug 1. https://t.co/TVaaojjDD5 pic.twitter.com/ejef5AlJWx
— SCS Probing Initiative (@SCS_PI) August 1, 2022
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More on the US strike group’s movements… the USS Tripoli amphibious assault ship is also said to be headed for Taiwan.
* * *
US equity markets are accelerating their losses suddenly this morning (after briefly touching unchanged from overnight weakness) following headlines that House Speaker Nancy Pelosi is reportedly expected to land in Taiwan on Tuesday night.
Liberty Times reports, citing people familiar with the matter, Pelosi plans to visit the Legislative Yuan and meet lawmakers on Wednesday.
However, the US and Taiwan are still preparing for last minute changes, the paper adds.
Futures were sliding already but the Pelosi headlines pushed them to overnight lows…
Bonds are bid with 10Y Yields tumbling back to unchanged…
The offshore Yuan also tumbled on the report…
Interestingly, crude prices are notably lower (after disappointing China PMIs) and are accelerating lower after the Pelosi-Taiwan headlines…
China meanwhile Monday once again warned its military is prepared to take action if House Speaker Nancy Pelosi follows through on a landmark visit to Taiwan.
According to her published itinerary, which does not as yet name Taiwan – this could see her flying to Taiwan after her delegation visits Malaysia and just ahead of going to South Korea.
Amid Chinese PLA drills ongoing in regional waters, and with the USS Ronald Reagan carrier strike group also in the South China Sea, Nikkei writes that “The U.S. military is moving assets, including aircraft carriers and large planes, closer to Taiwan ahead of an anticipated but unconfirmed visit to the island by House Speaker Nancy Pelosi.”
PELOSI EXPECTED TO VISIT TAIWAN ON AUG 2. THE MOST WATCHED FLIGHT ON EARTH RIGHT NOW. #Pelosi #Taiwan
佩洛西预计八月二日抵台。全民围观航线GPS. pic.twitter.com/8ht40C99Rb
— Hao HONG 洪灝, CFA (@HAOHONG_CFA) August 1, 2022
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The PLA military also on Monday issued a fresh propaganda video saying essentially ‘we’re ready for war’ – consistent with prior messages circulating on official Chinese military channels…
NOW – China’s People’s Liberation Army just posted a new video on WeChat ahead of Pelosi’s potential visit to Taiwan.pic.twitter.com/QaiFcdGCn1
— Disclose.tv (@disclosetv) August 1, 2022
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As FT notes additionally of PLA muscle-flexing as a warning to Pelosi: “China’s PLA also on Saturday carried out live-fire exercises in Pintang, a coastal area in south-eastern Fujian province about 125km from Taiwan. State media also broadcast footage of a Chinese destroyer firing its weapons in the South China Sea, through which the USS Ronald Reagan aircraft carrier group is believed to be sailing after visiting Singapore.”
Tyler Durden
Mon, 08/01/2022 – 18:40 - Austin Fitts: "We're At War With The Deep State Globalists"
Austin Fitts: “We’re At War With The Deep State Globalists”
Via Greg Hunter’s USAWatchdog.com,
Catherine Austin Fitts (CAF), Publisher of The Solari Report and former Assistant Secretary of Housing (Bush 41 Admin.), says we are at war with the Deep State globalists that want nothing short of total control over all of mankind.
Central bankers want a financial system that is a lawless criminal control syndicate where it’s legal for them to do whatever they want. It is simply a choice between tyranny and sovereignty, freedom or slavery.
We start with the foundational building block of tyranny, the Central Bank Digital Currency (CBDC) that global bankers want to install in the financial system. CAF says, “It’s not a currency…”
” That’s what you need to understand. What we are talking about is a control system that is going to be implemented in a global coup d’état, and we are in the middle of a global coup d’état.
That’s what is happening right now.
Essentially, if you look at the central bankers, the BIS (Bank of International Settlements) and all the central bankers are trying to create a system where they are completely free of the laws of nation states and governments. In other words, they are inserting sovereign immunity from all laws and literally trying to create a civilization under the law where they are free to do whatever they want, including, as we know—genocide.”
CAF says to fight back against CBDC is to use cash.
Fitts says, “If you go to Solari.com, you will see something that says, “Cash Every Day.” Click the big red cap that says, “Make Cash Great Again.” If you click on that, you will get three videos. There are two videos I really want your audience to watch. One is a 56 second video of the BIS general manger Augustin Carstens in October 2020 explaining with CBDC they will have central control and enforce them centrally. It’s the only time in my life that I saw a central banker be 100% honest. The second video says “Financial Rebellion,” click it and you’ll get three minutes of a presentation by Richard Werner. He is certainly the top scholar in the world on central banking. . . . Richard explains that one of the top central bankers in Europe told him they are planning on chipping all of us.”
CAF says central bankers will ignore the U.S. Constitution, steal all of our assets like cash and gold but especially the land.
CAF contends they won’t be able to do this unless they take our guns and extinguish the Second Amendment. CAF also talks about what she thinks will happen after the first of this year when it comes to inflation or deflation.
CAF says, “We are at war and we need a war strategy. . . . The ‘Great Reset’ will turn into the ‘Great Resist.”
CAF contends the good news is people are waking up and this evil criminal system can be stopped. CAF says,
“Saint Paul said in Timothy, ‘Just stand and watch the divine go to work.’ They can’t do this. Did you see what just happened in Ireland? They tried to go all digital, and they had so many people cancel their accounts, they had to walk it back…
One thing the Bible makes clear is it will at times look hopeless, but it won’t be. That’s why you have to stand.”
There is much more in the 1 hour and 10 min. interview.
Join Greg Hunter of USAWatchdog.com as he goes One-on-One with the Publisher of The Solari Report, Catherine Austin Fitts. (7.30.22)
Tyler Durden
Mon, 08/01/2022 – 18:20 - Semiconductor Inventories In South Korea Surge Most In 6 Years As Reverse Bullwhip Effect Takes Hold
Semiconductor Inventories In South Korea Surge Most In 6 Years As Reverse Bullwhip Effect Takes Hold
The reverse bullwhip effect that we have been talking about non-stop for months looks as though it could be making its way into – out of all sectors – the semiconductor industry.
Stockpiles in South Korea have expanded at “the fastest pace in more than six years”, Bloomberg wrote this weekend, noting that the inventory rise could be a harbinger of bad things to come for the country’s export-driven economy.
In other words, the nation’s most profitable industry could be slowing down. Even more alarming, as the report notes, is that the slowdown could be coming at a time when Central Banks are in the midst of tightening.
Chip sales also help support South Korea’s currency, the won.
Nationwide inventory of chips in South Korea was up 79.8% in June from the year prior, the report says. This marks an acceleration from May’s number, which saw chips rise 53.8% in the month of May.
The rise is the largest since the country suffered a 2 year export slump and saw inventories climb 104.1% in April 2016. Other chipmakers like Samsung and SY Hynix have already warned that future sales could slow.
Investors are expecting chip companies to slow down on capex spending to offset a slump in sales.
Meanwhile, in South Korea, the economic slowdown could be broad across the country. Production was up 1.4% in the country in June, missing economist estimates of 2.1%.
In the last two months we have talked about the reverse bullwhip effect many times:
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Bullwhip Effect Ends With A Bang: Why Prices Are About To Fall Off A Cliff
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Deflationary Tsunami On Deck: A “Tidal Wave” Of Discounts And Crashing Prices
In these pieces we talked about the coming “bullwhip” effect and when formerly a scarcity of inventory becomes a glut, with inventory to sales ratios exploding higher (and in some cases reaching two-decade highs)…
… assuring inventory liquidations across the retail sector, resulting in a “deflationary tsunami” and “prices falling off a cliff“, forcing the Fed to eventually pivot on its hiking plans and even restart easing.
Tyler Durden
Mon, 08/01/2022 – 18:00
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