Today’s News 10th February 2021

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

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

  

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

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

  

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

  Here are the details:

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

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

  

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

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

  Goldman’s main points:

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

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

  

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

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

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

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

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

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

  In short: Beijing continues to lie about everything.

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

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

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

  

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

  

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

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

  …

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

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

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

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

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

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

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

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

  

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

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

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

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

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

  

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

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

  

  Read the original Caldwell affidavit below:

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

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

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

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

  – George Orwell, 1984

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

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

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

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

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

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

  These are dangerous times.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  Sound familiar?

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

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

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

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

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

  

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

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

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

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

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

  

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

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

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

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

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

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

  
  Find more statistics at Statista

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

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

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

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

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

  By Cahterine Ngai, Bloomberg reporter and commentator

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

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

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

  

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

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

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

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

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

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

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

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

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

  To this our counterargument was simple:

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

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

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

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

  Our conclusion was simple:

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

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

  

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

  

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

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

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

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

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

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

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

  

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

  Are such large transactions even possible?

  — Elon Musk (@elonmusk) December 20, 2020

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

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

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

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

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

  * * *

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

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

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

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

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

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

  

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

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

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

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

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

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

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

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

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

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

  And the punchline:

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

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

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

  — zerohedge (@zerohedge) February 10, 2021

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

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

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

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

  Submitted by Southfront,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  

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

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

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

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

  

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

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

• Our Animal Farm
  Our Animal Farm

  Authored by Victor Davis Hanson via AMGreatness.com,

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

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

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

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

  

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

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

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

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

  

  Ullstein bild via Getty Images

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  

  Ullstein bild via Getty Images

  Our Nightmare, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  And the military elite?

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

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

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

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

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

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

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

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

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

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

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

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

  

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

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

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

  

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

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

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

  

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

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

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

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

  

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

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

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

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

  Authored by Bruce Wilds via Advancing Time blog,

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

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

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

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

  Consider this a trip down memory lane, please enjoy.

  *  *  *

  Fisker Automotive Another Government Folly 

  Sunday, April 28, 2013

  Great Looking Car

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

  

  The Company Failed!

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

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

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

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

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

  

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

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

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

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

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

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

  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  Authored by J.Christian Adams via The Gatestone Institute,

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

  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  

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

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

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

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

  

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

  

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

  

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

  

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

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

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

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

  Submitted by Market Crumbs,

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

  

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

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

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

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

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

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

  

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

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

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

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

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

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

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

  

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

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

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

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

  so two US carriers in the south china sea

  — zerohedge (@zerohedge) February 2, 2021

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

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

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

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

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

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

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

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

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

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

  Authored by Patrick Buchanan via Buchanan.org,

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

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

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

  

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

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

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

  And did not the riots produce beneficial results?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  Such accusations against our elites are intolerable and immoral.

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

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

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

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

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

  

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

  

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

  

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

  

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

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

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

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

  

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

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

  

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

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

  It wasn’t clear if he was trying to convince others or himself that his purchases are prudent, because while the party can and will go on as long as there are greater fools, one look at the fundamentals…

  

  … confirms that the party will only last as long as central banks keep injecting hundreds of billions into the market each and every month.

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

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

  Authored by Jim Quinn via The Burning Platform blog,

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

  

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

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

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

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

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

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

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

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

  

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

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

  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • Learn how to communicate with allies using encrypted messaging.

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

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

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

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

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

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

  

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

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

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

  

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

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

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

  

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

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

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

  

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

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

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

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

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

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

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

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

  *  *  *

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

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

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