- Euro 2020 Favorites: Modeling The Beautiful Game
Euro 2020 Favorites: Modeling The Beautiful Game
Following a year of COVID-lockdown-driven delays, the Euro 2020 tournament kicks off on Friday 11 June when Turkey take on Italy in Rome.
As fans from most of the continent’s major ‘footballing’ nations cheer on their teams, they recognize that some have a far higher chance of winning than others.
As the excitement for the tournament builds, Goldman Sachs’ Economics Research Group constructed a statistical model to simulate the European Cup. As Sven Jari Stehn and Christian Schnittker explain, they start by modelling the number of goals scored by each team using a large dataset of international football matches since 1980.
We find that the number of goals scored by each team can be explained by:
(1) the strength of the squad (measured with the World Football Elo Rating),
(2) goals scored and conceded in recent games (capturing the side’s momentum),
(3) home advantage (which is worth 0.4 goals per game) and
(4) a tournament effect (which shows that some countries tend to outperform at tournaments compared to their rating).
Goldman then simulates the tournament using our estimated scoring model.
So will win?
Goldman’s framework predicts that Belgium will win the Euros for the first time in history, narrowly beating Italy on July 11.
The reason the model gives Belgium the edge is primarily its high Elo score, where it is ranked first amongst European nations.
That said, we see a close race between Belgium, Italy, Portugal and Spain, which make it to the semi-finals.
The model also offers a few unexpected insights. One is that Denmark is projected to do well in this tournament, winning its group and losing only to Portugal in the quarterfinals. Although France—as world champion—has a high Elo score, Les Bleus are penalised in our model by a difficult group stage, lack of home advantage and negative momentum in recent games.
Compared to betting odds, our model favours Belgium and predicts a lower probability of success for England.
Of course, this is all rubbish as football is not a game of ‘perfect… and it is clear that England will win.
Tyler Durden
Thu, 06/10/2021 – 02:45 - Zelensky Tells Biden Ukraine Needs Clear Plan For Accession To NATO
Zelensky Tells Biden Ukraine Needs Clear Plan For Accession To NATO
Authored by Ella Kietlinska via The Epoch Times,
Ukrainian President Volodymyr Zelensky stressed in his phone conversation with U.S. President Joe Biden on Monday that Ukraine needs “a real step-by-step plan” tied to calendar dates for its accession to NATO, the chief of the Ukrainian presidential office Andriy Yermak said according to a report on Ukraine’s official website.
The time of statements and declarations of intent should be a thing of the past, Zelensky told Biden.
“There can be no doubt that Ukraine is an integral part of Europe in terms of its value foundation. Now, in the new situation in Europe, we need a logistical plan for Ukraine’s accession to the Alliance in the near future. NATO is a way of maximum protection for our country,” Zelensky said.
According to a second official report, Zelensky also informed Biden about the situation in Donbas, a Ukrainian territory temporarily occupied by Russian-backed separatists, and explained the reasons and nature of the periodic escalation of the conflict.
“The so-called withdrawal of Russian troops is only an imitation,” Zelensky said.
There was still a high concentration of Russian troops and heavy weapons in the temporarily occupied Ukraine’s territories and near the Ukrainian border, he explained.
“Ukraine’s move to NATO is also an opportunity to achieve the preconditions for establishing a stable and lasting peace in Donbas,” the second report states.
NATO Secretary General Jens Stoltenberg said on June 4 during an event at The Brookings Institution that the best way for Ukraine to move toward membership in NATO is to implement reforms to fight corruption and to modernize its defense and security institutions. “We are helping [Ukraine] with that as they move toward further Euro-Atlantic integration,” he added.
NATO provides support to Ukraine in the form of training and capacity building, Stoltenberg said, and encouraged NATO Allies “to do more of that.”
After the Russian aggression in 2014, Ukraine’s interest to join NATO continued to grow, according to Kyiv Post.
However, resolving territorial and international disputes is a prerequisite to joining the Alliance. Therefore, Ukraine’s unresolved conflicts over Crimea and Donbas could affect membership eligibility, according to an analysis by The Center for European Policy Analysis.
Biden will participate in the NATO Summit on June 14 in Brussels, Belgium, however aspirant countries would not be invited to the Summit. Stoltenberg said at a press conference that “the summit will only be for Allies because it is a relatively short summit—one day.”
Ukraine and Russia have been in conflict since 2014 when Russia seized Ukraine’s Crimea peninsula and backed a rebellion in Donbas.
Zelensky, since his election two years ago, has sought to resolve the conflict, which has claimed more than 13,000 lives since 2014.
Russia launched a buildup of troops near the Ukrainian border earlier this year before announcing in April that it would pull back those forces. The provocative move alarmed the United States and other European allies.
Tyler Durden
Thu, 06/10/2021 – 02:00 - Israel Defense Forces Strike Syria, As Netanyahu Struggles To Remain
Israel Defense Forces Strike Syria, As Netanyahu Struggles To Remain
By South Front,
Israel’s political situation is proving quite precarious for Prime Minister Benjamin Netanyahu. As a result, he’s struggling to prove that he’s required at the lead, since Tel Aviv’s enemies will allegedly flourish if Netanyahu is not there.
Late on June 8th, Israel Defense Forces (IDF) struck various targets in southern and central Syria. According to Syrian media, air defense systems managed to shoot down some Israeli missiles which were fired from the direction of Lebanon.
Not all missiles were shot down and some caused damage. The Syrian Observatory of Human Rights claimed that violent explosions were felt in Damascus and around the city, followed by Israeli strikes on military positions of the Syrian Arab Army (SAA). It also claimed that 10 pro-government fighters were killed in the strikes.
Air strikes also took place in the south of Homs province and in the border zone between Homs and Tartus.
This is the first strike attributed to Israel in nearly a month, and it coincides with Netanyahu’s struggle to remain in seat. There is no official confirmation from the IDF on carrying out the strike.
In addition to Israel’s regular assertions, the “moderate opposition” in Greater Idlib also frequently breaches the ceasefire regime and shells the nearby settlements. Militants in the region shelled several villages in nearby Hama province, in the villages of Jubas and Dadikh, and farmland was damaged. No casualties were reported.
On June 7th, militants fired 6 rockets at the village of Jurin in the northwestern province of Hama, causing damage to residential buildings and private property.
In northern Syria, the perpetual state of chaos between the Kurdish groups and the Turkish-backed factions also continues.
The Kurdish Afrin Liberation Force reported that it had carried out a successful operation against the Turkish Armed Forces and pro-Ankara militants.
Between June 1 and 4th, the Kurdish group reportedly killed 13 Turkish soldiers and 2 pro-Turkish faction members. Two vehicles were destroyed. In confirmation, Ankara admitted to losing a single serviceman in northwestern Syria.
On June 8th, a car bomb exploded in northern Syria’s Afrin causing extensive damage to nearby property. No casualties were reported.
Still, violence in northern Syria is the norm. The Kurdish groups and Turkish-backed factions continually carry out operations against each other. Infighting among the pro-Turkish groups is also not uncommon, with civilians frequently being injured and sometimes killed in collateral.
With the Syrian Arab Army reactivating air defense systems in northern Syria, it could mean that an attempted solution to the plight may be coming sooner rather than later.
Tyler Durden
Thu, 06/10/2021 – 00:10 - China's White Collar Workers Face Invasive Surveillance By 'Big Tech' Overlords
China’s White Collar Workers Face Invasive Surveillance By ‘Big Tech’ Overlords
For a Communist nation, the People’s Republic has notoriously weak labor protections. While gig economy workers face tremendous pressure to put in long hours with few breaks, as it turns out, their white-collar cousins are facing similar pressures to put in long hours as well.
Nikkei’s story starts out with testimony from Andy Wang, an IT professional in Hong Kong, whose company has been ratcheting up efforts to monitor its workforce. They call it DiSanZhiYan, or “Third Eye.” The software, installed on the laptop of every employee, monitors all their communications and movements, as well as their browsing activity and software and app usage.
The invasive software would automatically file complaints and every once in a while an employee would be fired. Finally, things like 20-hours work days began to seem impossibly daunting.
Working from their floor in a downtown high-rise, the startup’s hundreds of employees were constantly, uncomfortably aware of being under Third Eye’s intent gaze.
The software would also automatically flag “suspicious behavior” such as visiting job-search sites or video streaming platforms. “Efficiency” reports would be generated weekly, summarizing their time spent by website and application.
“Bosses would check the reports regularly,” Wang said. Farther down the line, that could skew workers’ prospects for promotions and pay rises. They could also be used as evidence when the company looked to fire certain people, he added.
Even Wang himself was not exempt. High-definition surveillance cameras were installed around the floor, including in his office, and a receptionist would check the footage every day to monitor how long each employee spent on their lunch break, he said.
Nikkei’s latest story about these types of abuses at Chinese white collar firms just so happens to follow increased scrutiny of China’s human rights record in the wake of the Biden Administration’s condemnation of Beijing’s “genocidal” treatment of the Uyghers.
While there are limits on how employers can track workers in the US, in China those limitations are virtually non-existent. Many workers have come to accept being tracked.
One Chinese tech firm, Pinduoduo, has garnered special attention for a string of incidents involving young employees,
Pinduoduo is one of the crown jewels of Chinese tech. In just five years, the Shanghai-based e-commerce company grew from zero to 788 million annual active users, surpassing JD.com to become the country’s second-largest e-commerce company with a market valuation of $175 billion, second only to Alibaba.
But it is clear that stunning growth is coming at a cost. Last December, a 22-year-old female employee died after collapsing on her way back home from work around 1:30 a.m. She worked for the company’s grocery shopping unit, Duoduo Grocery, whose services had rapidly grown to encompass 300 Chinese cities as orders leapt during coronavirus-related lockdowns.
Two weeks afterwards, Pinduoduo confirmed one of its engineers jumped to his death. The young worker, a fresh university graduate, checked the company’s messaging app one last time before he took the final leap, according to a former Pinduoduo employee.
The same month, another employee who had posted a photo of a colleague being borne out of the office on a stretcher was identified and fired by the company. In a video posted on Weibo, the Chinese social media site, the fired employee said: “I don’t know if the company identified me through computer monitoring or through information provided by Maimai.” Maimai, the Chinese equivalent of LinkedIn, denied it had provided any user information to a third-party organization.
Here are some other tools used by the government to track employees.
Zhongduantong: “Zhongduantong, a Beijing-based software company, developed a work reporting mobile application that requires workers to check in at designated locations within a certain time frame and upload a picture of the surrounding environment as proof through the app. The use of such real-time tracking apps led to the 200 yuan ($31) fine of a sales manager in the northern city of Shenyang, who was found to be visiting a housing fund center for personal matters during their lunch break, Xinhua News Agency reported in 2018.”
Who Will Watch the Watchmen?: “The AI-driven decision-making process, however, can reinforce bias and discrimination, as machine learning is designed to learn from existing examples. To Jia Kai, associate professor at University of Electronic Science and Technology of China, the crucial question is: To what extent can a human society be managed by programs? “For example, if a worker has a cold today, will the programs be able to detect that and allow more time for the person to finish his job?” Jia asks. The answer is no, he said, at least for now. “What a computer system can capture is only a simplified version of human behaviors.”
Still, as China’s middle class grows increasingly competitive, there will always be plenty of workers willing to accept the risks and drawbacks for a shot at the rewards.
Tyler Durden
Wed, 06/09/2021 – 23:50 - Blinken Props Up Biden In European Charade For New Cold War
Blinken Props Up Biden In European Charade For New Cold War
Authored by Finian Cunningham via The Strategic Culture Foundation,
Blinken is staying close to his boss during the whirlwind tour, because Biden is liable to spin out of control and reap an embarrassing collapse.
It’s a big ask for a frail 78-year-old U.S. president to rally the world around a series of myths and falsehoods. Biden flies to Europe this week to galvanize allies under strong American leadership of supposed shared “democratic values” in a “historic confrontation” with the “autocracies” of China and Russia.
President Joe Biden’s worldview is so disconnected from reality that it is going to prove difficult mentally for him to consistently and coherently make the case over a series of summits in the next week.
That’s why he has his more youthful Secretary of State Antony Blinken (59) tagging along when Biden meets G7 leaders in England on June 11-13, followed by a NATO summit on June 14 in Brussels as well as top-level discussions with European Union leaders. After all that, Blinken is “to participate” in the face-to-face meeting between Biden and Russian President Vladimir Putin on June 16 in Geneva, according to the U.S. State Department.
The latter detail in the busy itinerary – Biden’s first overseas trip since taking office in January – is the most salient. It is unprecedented that the U.S. foreign secretary should “participate” in what was previously billed as a one-on-one meeting between the American and Russian leaders. There is no indication so far from Russian media reports that Sergei Lavrov – Blinken’s counterpart – is to take part in the Geneva summit.
What this unusual arrangement suggests is that Biden is not up to the task of dealing with Putin in an equal setting. The American president’s health and mental acuity have been under the media spotlight after several public gaffes in which Biden has forgotten names of his aides and has seemed befuddled in recalling details. The Democrat-supporting U.S. media have been criticized for giving Biden an easy time from their soft approach towards the president.
This raises further questions about Biden’s health condition when he has to have his top diplomat at his side during the forthcoming summits, especially the final one with Putin whom the American president disparaged previously as a “killer”.
It is all the more taxing on Biden given that his mission is more about contriving a narrative than actually engaging with reality. The contrived narrative is the attempt to rally European and other Western allies under American leadership against “autocratic adversaries” China and Russia. In other words, fabricating a new Cold War. The trouble is the fabrication is based on myths, falsehoods, smears, delusions, and outright lies. All in all, that’s a tall order for a president who tends to get people and names mixed up and who appears to struggle at finishing press conferences with coherent thoughts.
In an op-ed for the Washington Post before his big tour of Europe, Biden presented his mission thus: “My trip to Europe is about America rallying the world’s democracies”.
In a familiar mantra of the 46th president, he demarcated the world into two camps: one under “strong American leadership” with “shared democratic values”, and the other purportedly represented by rival “autocracies” of China and Russia. This is nothing but the recreation of a Cold War whereby Washington polarizes the world into hostile entities in order to give itself a position of “moral leadership” as a guise for imperialist hegemony.
To accept this mythical framing of the world, then it is necessary to demonize the designated adversaries. Lamentably, the European allies of America (more accurately, “vassals”) are all too credulous in accepting the provocative fantasies.
Nevertheless, sometimes self-interests intrude and the Europeans find the American depiction of the world too much to bear. Hence, there is pushback from the European Union on Biden’s attempts to sabotage the economic partnership between the 27-member bloc and China. There are limits to which the EU will go in damaging the landmark Comprehensive Investment Agreement it signed with Beijing in December.
Likewise, Germany is not tolerating any attempts by the Biden administration to scupper the Nord Stream 2 gas pipeline with Russia which will be vital for fuelling German industry. Again, self-interest kicks in to bring mundane common sense into conflict with the American mythology of a Cold War.
Notwithstanding, Biden’s itinerary is purposed to orchestrate an adversarial transatlantic position towards Russia and China.
In his Washington Post op-ed, Biden pointedly outlines how his first meetings are aimed at drumming up American leadership pitted against Moscow.
The president wrote: “So, when I meet with Vladimir Putin in Geneva, it will be after high-level discussions with friends, partners and allies who see the world through the same lens as the United States, and with whom we have renewed our connections and shared purpose. We are standing united to address Russia’s challenges to European security, starting with its aggression in Ukraine, and there will be no doubt about the resolve of the United States to defend our democratic values, which we cannot separate from our interests.”
Note the inane assertion as if fact that Russia is threatening Europe’s security and is aggressing Ukraine, when in reality it is the U.S. and NATO powers that are weaponizing a rogue regime in Kiev against Russia. The U.S. has supplied $2 billion in weaponry to Kiev since the Western-backed coup d’état in 2014 and NATO forces are on the ground in Ukraine. It is NATO forces building up offensive power around Russia, not the other way around.
Biden threw in a few bromides such as “the United States does seek conflict” with Russia, and he mentioned his extension of the New START treaty back in February (preventing an arms race is hardly a claim to virtue). But these platitudes aside, Biden went on to make lame accusations about Russia’s “interference in our democratic elections”.
It can be confidently posited that President Putin will demolish the baseless claims that Biden is attempting to put forward in Geneva. It will be an intellectual slamming match, not simply due to Putin’s formidable command of detail and argumentation, but largely because the American side has an untenable case owing to its fundamental fallacies.
Let’s just say, the American case against Russia and China is a weak charade of myths and lies, full of hypocrisy and contradiction. It would be hard enough for an agile mind to maintain the implausible narrative that underpins America’s bid for global hegemony. It’s all the more difficult for an aging president to keep up the performance.
That’s why Blinken is staying close to his boss during the whirlwind tour. Because Biden is liable to spin out of control and reap an embarrassing collapse.
The State Department said Biden will be coming from his meeting with allies with “the wind at his back” as he goes on to challenge Putin. More accurately, it should be said, with Blinken propping up the president by reminding him of the dubious script.
Tyler Durden
Wed, 06/09/2021 – 23:30 - Wuhan Lab 'Experts' Deny Lab Leak, Claim No Workers Sickened With COVID-19
Wuhan Lab ‘Experts’ Deny Lab Leak, Claim No Workers Sickened With COVID-19
Anonymous experts at the Wuhan Institute of Virology (WIV) have dismissed theories that COVID-19 leaked from their lab, as well as US intelligence that three lab workers fell ill with symptoms consistent with COVID-19, according to Chinese state-run ECNS.CN.
The anonymous experts have invited the West to present their evidence.
The experts, who requested anonymity, said individuals from the West can present their proof if they have any. They also dismissed as groundless the reports from some media outlets that three workers from the institute had contracted the virus. -ECNS
According to a May 23 report by the WSJ, Three researchers at the Wuhan Institute of Virology were so sick in November of 2019 that they sought hospitalization.
The details of the reporting go beyond a State Department fact sheet, issued during the final days of the Trump administration, which said that several researchers at the lab, a center for the study of coronaviruses and other pathogens, became sick in autumn 2019 “with symptoms consistent with both Covid-19 and common seasonal illness.”
The disclosure of the number of researchers, the timing of their illnesses and their hospital visits come on the eve of a meeting of the World Health Organization’s decision-making body, which is expected to discuss the next phase of an investigation into Covid-19’s origins. -WSJ
“The information that we had coming from the various sources was of exquisite quality. It was very precise. What it didn’t tell you was exactly why they got sick,” one source told the Journal, while another person said the information, provided by an “international partner,” was potentially significant but still in need of further investigation and corroboration.
In March, former US State Department official David Asher, who led a task force on the origins of COVID-19, told a Hudson Institute seminar that he doubted the lab workers were infected with an ordinary flu.
“I’m very doubtful that three people in highly protected circumstances in a level three laboratory working on coronaviruses would all get sick with influenza that put them in the hospital or in severe conditions all in the same week, and it didn’t have anything to do with the coronavirus,” he said, adding that the researchers who fell ill may represent “the first known cluster” of COVID-19 cases.
The Wuhan lab has notably refused to share raw data, safety logs and lab records of its extensive experiments with bat coronaviruses, which a US-funded NGO, EcoHealth Alliance, collaborated with.
As we asked at the time, perhaps Beijing – with its sophisticated tracking techniques – can explain the whereabouts of still-missing WIV lab worker Huang Yanling?
Missing Chinese researcher Huang Yanling. Photo / news.com.au Huang Yanling, who worked at the Wuhan Institute of Virology, was one of scores of doctors, scientists, activists and journalists who disappeared during the Chinese Communist Party’s suspected cover-up.
During the early weeks of the outbreak last February, rumours swirled on Chinese social media that the graduate student was “patient zero”, creating a direct link between the controversial lab and the virus outbreak.
Chinese officials quickly stepped in to censor the reports from the internet.
The Wuhan Institute of Virology denied she was patient zero and insisted, without evidence, that she was alive and well elsewhere in the country – while scrubbing her biography and image from its website. -NZ Herald
So – maybe the US should present their evidence, and Beijing can finally share virus samples and other records they’ve thus far been unwilling to produce.
Tyler Durden
Wed, 06/09/2021 – 23:10 - Hydroxychloroquine & Azithromycin Boosted Survival Of Ventilated COVID-19 Patients By 200%: New Study Confirms
Hydroxychloroquine & Azithromycin Boosted Survival Of Ventilated COVID-19 Patients By 200%: New Study Confirms
Authored by Tom Ozimek via The Epoch Times,
A new study has found that the use of weight-adjusted hydroxychloroquine (HCQ) and azithromycin (AZM) improved the survival of ventilated COVID-19 patients by nearly 200 percent.
The observational study, which hasn’t yet been peer-reviewed, was based on a re-analysis of 255 patients on invasive mechanical ventilation (IMV) during the first two months of the pandemic in the United States.
The researchers found that when the HCQ–AZM combination was given at lower dosages to treat ventilated COVID-19 patients, the risk of death was more than three times higher.
“We found that when the cumulative doses of two drugs, HCQ and AZM, were above a certain level, patients had a survival rate 2.9 times the other patients,” the authors of the study noted.
“By using causal analysis and considering of weight-adjusted cumulative dose, we prove the combined therapy, >3 g HCQ and > 1g AZM greatly increases survival in COVID patients on IMV and that HCQ cumulative dose > 80 mg/kg works substantially better.”
While the authors acknowledged that patients with higher doses of HCQ had higher doses of AZM, they “cannot solely attribute the causal effect to HCQ/AZM combination therapy.”
“However, it is likely AZM does contribute significantly to this increase in survival rate. Since higher dose HCQ/AZM therapy improves survival by nearly 200 [percent] in this population, the safety data are moot,” they added.
Hydroxychloroquine—an anti-inflammatory and anti-malarial drug—has been one of the most contested treatments for COVID-19 throughout the pandemic.
A pharmacist displaying a box of hydroxychloroquine (HCQ) tablets in his store in Hyderabad, India, on April 28, 2020. (Noah Seelam/AFP via Getty Images)
The drug was approved by the Food and Drug Administration (FDA) in 1955 to treat and prevent malaria. It’s also prescribed for lupus and rheumatoid arthritis.
While the FDA initially granted HCQ an emergency use authorization (EUA) to treat COVID-19 in March 2020, the agency revoked it on June 15, 2020, because data suggested it was “unlikely to be effective in treating COVID-19” and that its potential risks outweighed the benefits.
The FDA’s turnabout came on the heels of a study by Oxford University in the United Kingdom that found HCQ underperformed its routine treatment protocols.
“Unfortunately, problems in research methodologies assessing the effectiveness and risks of HCQ have left lingering doubts,” wrote Dr. Joseph Mercola, an osteopathic physician, in an op-ed for The Epoch Times. “Those problems include questionable dosing.”
Some, like Epoch Times contributor Roger L. Simon, have argued that studies around the use of HCQ to treat COVID-19 were politicized by opponents of former President Donald Trump, who advocated the use of the drug.
Tyler Durden
Wed, 06/09/2021 – 22:50 - TC Energy Cancels Keystone XL Pipeline For Good
TC Energy Cancels Keystone XL Pipeline For Good
By OilPrice.com
The Keystone XL pipeline project’s owner, TC Energy, said on Wednesday that it has terminated the controversial pipeline project that would have served as a lifeline to Canadian oilsands producers looking for more takeaway capacity.
TC Energy Corporation confirmed Wednesday that after careful review of the available options and after consulting with the Government of Alberta, it has officially canceled the Keystone XL.
Construction activities were stopped back in January.
The project’s cancellation comes several months after President Joe Biden revoked the Presidential Permit for the pipeline on January 20 of this year, in what was mostly seen as a death blow for the pipeline.
TC Energy will now set to work on how it will wind everything down while continuing to meet its environmental and regulatory commitments.
Canada had previously warned the United States that scrapping the vital oil pipeline would weaken relationships between the two countries.
Proponents of the Keystone XL project have argued that scrapping the Keystone XL would not diminish the demand for the heavy crude oil that the pipeline would have carried to U.S. refineries. Instead, it would merely raise the United States’ dependence on crude oil from OPEC countries. An argument has been made that it would also kill jobs on both sides of the border.
It was suggested back in January that if TC Energy did not challenge the permit rescission in court or through NAFTA, it might sell some of the pipes from the project to offset some of what has been invested so far.
As of February, Alberta had spent $1.2 billion on the project so far.
The Keystone XL would have carried 800,000 bpd of oil per day from Canada to the United States.
Tyler Durden
Wed, 06/09/2021 – 22:44 - Goldman Explains Why The Economy Won't Overheat, No Matter What Tomorrow's CPI Shows
Goldman Explains Why The Economy Won’t Overheat, No Matter What Tomorrow’s CPI Shows
Yields on 10-year Treasuries dipped below 1.50% today for the first time since early March amid a furious short squeeze discussed earlier…
… and as post-pandemic inflation concerns appear to be waning as quickly as they flared up.
This is a point we first brought up last month when observing the collapse in China’s credit impulse, arguably the most important variable for the entire global reflationary narrative (see “China’s Credit Impulse Just Turned Negative, Unleashing Global Deflationary Shockwave“)…
… and it’s a point that Goldman’s chief economist Jan Hatzius reiterated in a note published on Tuesday titled simply “Why the Economy Won’t Overheat,” in which he argues – the same as the Fed – that the inflation we are seeing so far is likely to be temporary and prices will normalize again as we leg further away from unprecedented pandemic activity curtailments.
While we disagree – and so does Deutsche Bank, which sees nothing short of Weimar hyperinflation being unleashed by the Fed soon, something we first predicted in March 2009 as the ultimate endgame – it is interesting that today, at least, markets appear to be adopting this view judging by the collapse in 10Y nominal rates and the recent breach of the upward trendline in breakevens…
… this even as China’s PPI printed at a Lehman Sept 2008 high of 9.0% overnight.
So what, according to Goldman is the reason for receding inflation fears? As Hatzius and strategist Chris Hussey explain, the past 2 payrolls reports have been underwhelming as the rush back to work “is being slowed by generous stimulus as well as an inability — perhaps — to simply process so many new workers. On the one hand, fewer available workers should push up wages as companies compete to attract new workers. But a more orderly stream of employment in the post-pandemic recovery may also allow for a more extended reopening period and perhaps a bit less top-line pressure on prices.”
Another reason for receding inflation fears may also simply be time. According to Goldman, as Americans become more accustomed to getting back to their daily routines, the strangeness of such activity recedes. And it is perhaps easier for investors to envision what‘normal’ will look like. And perhaps that vision is collectively coalescing around a‘new normal’ that looks surprisingly similiar to the pre-pandemic ‘old normal’.
Hatzius then elaborates why the recent inflation pickup will remain transitory: “On the wage side, labor supply should increase dramatically over the next 3-6 months as fear of the virus diminishes further and the $300/week benefit top-up expires—over the next few weeks in most Republican-controlled states and on September 6 in the remaining states.”
In other words, employers will likely hold out another 3 months until the end of emergency benefits expire at which point they expect a flood of workers to reverse the calculus in the labor market, from one of no labor supply to a flood of supply.
On the price side, Goldman’s trimmed core PCE—which excludes the 30% most extreme month-to-month price changes, and as a reminder the surge in inflation last month was largely driven by soaring used car prices and transportation services, or as Goldman puts it “outliers” — remains at just 1.56% year-on-year, half the standard core PCE rate. This gap illustrates the unprecedented role of outliers in the recent inflation pickup.
Ultimately, to Goldman, the biggest question in the overheating debate remains whether US output and employment will rise sharply above potential in the next few years. If the answer is yes, then inflation could indeed climb to undesirable levels on a more permanent basis. Predictably, Goldman’s answer continues to be no, and here’s why: “Even though real GDP is nearly back to the pre-pandemic level, we still see significant slack in the economy based on the remaining jobs shortfall of nearly 8 million and the pandemic-driven productivity gain of 4.1% year-on-year in Q1. Moreover, we think sequential GDP growth has probably already peaked in monthly terms and will trend down from here as the fiscal impulse wanes, modestly at first and then more sharply in late 2021 and 2022.”
Here JPMorgan also chimes in and in a recent note from economist Dan Silver writes that as we prepare for the CPI print, it is worthwhile to consider the impacts of the removal of federal unemployment benefits and increasing hourly wages. In Silver’s note, he illustrates the growth in job openings among low-income jobs.
JPM then asks the right question: “will wage increases remain durable if business owners know that supply is coming back online?” A question we have asked previously, and the answer is a decisive not. To JPM, if the answer is indeed no, “we see a quicker than expected deceleration in wage growth, spending, and CPI.” Although, alternatively, it seems more likely that we will also see a surge in jobs taken and potentially another leg higher in absolute macro data.
With that in mind, what’s next on the inflation catalyst front and what will tomorrow’s critical CPI print show? Here, Goldman estimates a 0.50% increase in May core CPI (in line with consensus), which will boost the year-on-year rate by six tenths to 3.55%, up from 3.0% which however is largely impacted by the base effect collapse of last year. Goldman’s monthly core inflation forecast “reflects reopening-driven strength in airfares, hotel prices, and recreation prices.” Additionally, Goldman expects strong monthly readings in used cars (+6%) and new cars (+0.5%), reflecting “one-time” supply chain disruptions and microchip shortages.
And while the Fed is more concerned with PCE inflation rather than CPI, Goldman concludes that even though the inflation burst is transitory, “it will be interesting to see how markets react to a 3.5%+ inflation report in a monetary regime that presumably is focused on keeping inflation around 2%.”
Tyler Durden
Wed, 06/09/2021 – 22:35 - LA Sheriff Attributes Crime Surge To Soros-Backed DA Gascón, Supports Recall
LA Sheriff Attributes Crime Surge To Soros-Backed DA Gascón, Supports Recall
Authored by Chris Karr via The Epoch Times,
The city of Los Angeles saw a sharp 36 percent increase in homicides in 2020—but the L.A. County sheriff said this year is looking even more grim, and he’s blaming the widespread uptick in crime on District Attorney George Gascón.
“In 2021, that 36 percent has now become 92 percent, which is a huge statistical jump,” Sheriff Alex Villanueva told The Epoch Times.
“We’re seeing increases in all the categories – assault with a deadly weapon, arson, rape… these things are continuing upward unabated.”
The widespread uptick in crime is the direct result of Gascón’s election as DA of L.A. County and his failure to prosecute offenses, according to Villanueva. Since Gascón took office, 2,690 cases—about 30 percent—“that normally would have gone through were rejected,” he said.
Los Angeles County Sheriff Alex Villanueva sits for an interview for The Epoch Times program “California Insider,” in Irvine, Calif., on May 27, 2021. (John Fredricks/The Epoch Times)
While Gascón has defended his reform policies, criminals in prison are toasting the DA to celebrate their early release, according to officials—and the sheriff said the DA’s policies are making it more difficult for him to do his job.
“You’re supposed to have a district attorney who represents the people … but [he’s] acting like a public defender,” Villanueva said.
“There’s no one left representing the people. I need to work in partnership with the person who’s representing the people. I don’t have that right now.”
Impacting Public Safety
Gascón’s attempt to “reimagine public safety” with a series of new policies, or directives, has been widely criticized by deputy district attorneys, lawyers, current and former officials, and families of victims. Now, the DA is facing a recall.
“Had he campaigned on what he did once he took office and established those special directives … he’d have lost in a landslide. This is a classic example of bait-and-switch,” said Villanueva.
New San Francisco Police Chief George Gascón fields a question during a news conference at the Hall of Justice in San Francisco on Aug. 11, 2009. (Justin Sullivan/Getty Images)
In his view, those directives—which include eliminating the death penalty, abolishing sentencing enhancements like the Three Strikes law, and refusing to prosecute older juvenile offenders as adults for violent crimes—are having a major impact on public safety.
“It’s just gonna make a very, very dangerous place a lot more unlivable,” said Villanueva, adding that African-American and Latino communities are going to be impacted the most—the same communities that Gascón’s reforms aim to protect.
“It’s not going to impact the Gascóns of the world and their supporters, their campaign contributors … the people that live behind their mansions where they have their private security—no, no, no,” Villanueva said. “Those poorest neighborhoods [with] the highest crime rate, they’re gonna see [the impact] immediately. In fact, they already are.”
Los Angeles County Sheriff Alex Villanueva (C) attends an annual service honoring fallen peace officers in Tustin, Calif., on May 27, 2021. (John Fredricks/The Epoch Times)
‘That’s How Bad the Situation Currently Is’
Gascón maintains that his policies have produced the results he intended.
“I have instituted a series of reforms based on data and science that will enhance safety while reducing racial disparities and the misuse of incarceration. Our efforts to transform a dated approach that creates more crimes, victims and inequities are just beginning,” he wrote in a March 17 press release that reflected upon his first 100 days in office.
“We are doing all of this because the science and data tell us so. We can truly enhance public safety, increase equity, expand victim services and strengthen police accountability.”
Villanueva dismissed Gascon’s claims as “hogwash.”
“He believes, bizarrely, that somehow by letting people out, it’s going to improve or lower recidivism, [and] that keeping people locked up longer increases recidivism. And I’d say he has no facts to support that at all. No science is going to back that,” Villanueva said.
“They’re claiming that victims of violent crime want to see more rehabilitation and less consequences in terms of incarceration, and that’s news to me. … Every single victim of violent crime—parents of murdered kids, for example—that’s not what they’re saying at all.”
In his press release, Gascón cited a survey conducted by Californians for Safety and Justice that reported “strong majorities of Californian crime survivors support changes to the justice system that would increase rehabilitation and reduce mandated sentences.”
But Villanueva said this approach overlooks the “noble fallacy that somehow everyone is redeemable.”
“There are people that are not,” he added.
Furthermore, the elimination of strict legal repercussions is sending the wrong message to perpetrators, Villanueva said.
“Mr. Gascón is telling the criminal community it’s OK to commit violent crime because you will not face the same consequences in the past,” he said. “Right now, they’re toasting Gascón in the state prison for a reason.”
The L.A. sheriff pointed to a video of Phillip Dorsett, an inmate at New Folsom State Prison sentenced to 40 years to life for murdering a rival gang member in 2005.
“Right here with my cellie. … Celebrating us going home on this Gascón directive. Whoop!” Dorsett said, toasting with prison moonshine known as “white lightning.”
Greg Totten, CEO of the California District Attorneys Association, which made the video public in March, said the footage offers “compelling proof that violent criminals, not victims, will be the beneficiaries of [Gascón’s] radical policies.”
Added Villanueva, “Imagine we’re flooded with a bunch of newly released inmates from the state prison system—who are still in the prime of their crime-prone years—and they come back to L.A. That’s how bad the situation currently is.”
Recall Effort Ramps Up
If the families of violent-crime victims have their say, Gascón will face a recall in 2022.
“He clearly is not here for the victims. He’s here for the suspects,” Tania Owen, co-chair of the recall campaign, told The Epoch Times.
For Owen, a 32-year veteran of the L.A. County Sheriff’s Department, the consequences of Gascón’s reforms hit close to home. Her husband, Sgt. Steve Owen, was murdered in the line of duty in Lancaster on Oct. 5, 2016. The man who shot him, Trenton Trevon Lovell, originally faced life in prison without parole, or the death penalty.
Gascón’s reforms would have taken those options off the table, allowing Lovell to serve 20 to 25 years before being released. Last month, however, Lovell surprised Owen by pleading guilty to all charges, including the sentencing enhancements.
“It’s interesting to me because he could have very easily fought this and gone to court and likely received less time,” Owen said.
“But he took the maximum, which effectively means he is going to die in prison. At least he, the murderer, had more empathy for my family than the district attorney, who should be the one protecting us.”
While Owen has seen justice in her case, her fight for the families of other victims continues. That’s why she’s helping spearhead the effort to Recall George Gascón, alongside Villanueva, former L.A. DA Steve Cooley, former L.A. County Supervisor Mike Antonovich, and 14 cities that have issued no-confidence resolutions against Gascón.
“He is not following the law, and we want accountability,” Owen said.
“Crime in Los Angeles has skyrocketed in the very short amount of time that he has been here. There has been more aggression towards law enforcement because criminals know that they’re going to have it easy.”
In response, Gascón has defended his policies. In a tweet, he called opposition to them “backlash against reform fueled by conservative media, law enforcement unions & other ‘tough-on-crime’ types.’”
“From fear mongering to scare tactics, we are watching history repeat itself. But this time, reform will prevail,” he stated.
But Villanueva indicated the movement against Gascón is growing.
“If [the recall] doesn’t go through, you’re going to have a lot more angry residents building up, day in and day out,” he said, adding that he expects to see more cities issuing no-confidence resolutions in the near future.
Recall campaign organizers have until Oct. 27 to collect 580,000 qualified signatures—about 10 percent of L.A. County’s voters. They’re aiming to gather over 800,000, in case some are invalidated.
Gascón received $2 million in campaign funding from billionaire George Soros, who is known for bankrolling leftist politicians and organizations.
Gascón’s Office did not reply to questions submitted by The Epoch Times prior to publication.
Tyler Durden
Wed, 06/09/2021 – 22:10 - Mongolia Reports Fresh COVID Outbreak Despite High Vaccination Rates
Mongolia Reports Fresh COVID Outbreak Despite High Vaccination Rates
For weeks now, Mongolia has been touted as an unexpected success story in the international vaccination project: the poor, mostly rural country lies between northeastern China and Russia’s resource-rich east.
The country, which struck deals with its neighbors to stock its vaccine coffers months ago, drew attention due to its climbing international vaccination rate. But in recent days, Mongolia’s COVID-19 rate has surged, raising questions about the efficacy of China’s vaccines.
More than half of Mongolia’s population has been fully vaccinated. But despite this, the country reported 1,312 new cases of the coronavirus on Wednesday as the country’s total infections neared 70K, with almost all of those recorded since January. New daily infections have risen more than 70% in the past two weeks, according to a New York Times database.
The landlocked nation has easily secured enough doses of the vaccine from Russia and China. And as its case numbers rise, Sinopharm’s vaccine has come under scrutiny because of a lack of transparency in its late-stage trial data. The vaccine faced more questions after the island nation of the Seychelles, which relied heavily on Sinopharm to inoculate its population, also saw a spike in cases, although most people did not become seriously ill. “Inactivated vaccines like Sinovac and Sinopharm are not as effective against infection but very effective against severe disease,” said Ben Cowling, an epidemiologist and biostatistician at the University of Hong Kong School of Public Health. “Although Mongolia seems to be having a spike in infections and cases, my expectation is that there won’t be large number of hospitalizations,” he added.
Doubts about the efficacy of China’s Sinopharm jab have been spreading for months, as the vaccine was repeatedly shown to be less effective than the new mRNA jabs from Pfizer and Moderna-BioNTech.
In some areas, mutant strains may be spreading fast enough to cause concern even in countries where much of the population has vaccinations effective against them: Britain is dealing with a rise in cases linked to the Delta variant, despite having more than half of its adult population fully vaccinated, largely with shots from AstraZeneca and Pfizer. Still, the wave of infections has raised questions in Mongolia over why the government relied on the Sinopharm shots instead of a vaccine proven to be more effective. It came as Mongolians headed to the polls on Wednesday to vote for president, the first election since the constitution was amended to limit the president to one six-year term. The prime minister is the head of government and holds executive power.
A year ago, Mongolia was among the few countries in the world that boasted no local coronavirus cases, but an outbreak in November changed that. A political crisis ensued and protests over perceived mishandling of the outbreak led the prime minister to resign in January.
The new prime minister, Oyun-Erdene Luvsannamsrai, has promised to revive Mongolia’s lagging economy and end social distancing restrictions that have hurt businesses. A fresh wave of cases could threaten this pledge.
Tyler Durden
Wed, 06/09/2021 – 21:50 - Here We Go Again: JBS "Paid" "Russian" "Hackers" $11 Million In Bitcoin To Resolve "Ransomware" Attack
Here We Go Again: JBS “Paid” “Russian” “Hackers” $11 Million In Bitcoin To Resolve “Ransomware” Attack
There was a moment of sheer hilarity earlier today when, during a Congressional Hearing, the CEO of Colonial Pipeline Joseph Blount took the merely farcical episode of the Colonial Pipeline ransomware hack – when, as a reminder, a ragtag band of elite “Russian” hackers somehow managed to penetrate the company’s cyberdefenses but was so stupid it left most if not all of the $4.4 million bitcoins it demanded in ransom in an easily traceable address for the FBI to track down and magically confiscate (it is still unclear how the Feds got the private key to access the “hackers” digital wallet) in days if not hours – and elevated it to a level of sheer ridiculous absurdity when he told Congress that he didn’t consult the FBI before paying the ransom.
This, pardon the parlance of our times, is complete bullshit: either the CEO is lying or, worse, he is telling the truth and as some have speculated, he, the FBI and the “hackers” are all in on this so-called ransomware breach…
*PIPELINE CEO SAYS HE DIDN’T CONSULT FBI BEFORE PAYING RANSOM
Because he was paying the FBI?
— zerohedge (@zerohedge) June 9, 2021
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… a scenario which for now is yet another “conspiracy theory” and which we expect will become proven fact in the usual 6-9 months.
Yet just a few hours later, the exact same ridiculous narrative meant to achieve just one thing – tarnish the reputation of bitcoin further to the point where the US has to ban it – has struck again, and according to the WSJ last week’s big hack, that of food processing giant JBS, was also resolved when the company paid $11 million – in bitcoin of course, because in this day and age one can’t simply dump a suitcase full of cash or send a wire transfer to an incognito account – as ransom to the criminals (who will naturally soon be unveiled as Russians because of course) responsible for the cyberattack that halted the company’s operations.
Yes, if this story seems identical to that of Colonial Pipeline, up to and almost matching the demanded ransom amount, it’s because it is: so barren is the imagination of the administration’s narrative writers that they can only regurgitate the same old story over and over.
Naturally, and just like in the Colonial “hack”, the ransom payment, in bitcoin, was made to shield JBS meat plants from further disruption and to limit the potential impact on restaurants, grocery stores and farmers that rely on JBS, said Andre Nogueira, chief executive of Brazilian meat company JBS SA’s U.S. division.
“It was very painful to pay the criminals, but we did the right thing for our customers,“ Nogueira said Wednesday. It remains to be seen if the JDS CEO, like his Colonial colleague, promptly transferred the bitcoin to the
FBI’shackers’ digital wallet without advising the FBI (first for the simple reason that the FBI already knew the crypto was inbound?)The latest “shocking” attack on JBS has been part of a wave of bizarre incursions using ransomware, in which companies are hit with demands for multimillion-dollar payments to regain control of their operating systems. Some questions that remain unanswered is how the hell do these multi-billion dollar companies not have the most basic virus/malware protection to prevent some outsider – be it a 13 year old kid living in his mom’s basement, some Ukrainian hacker, or the FBI – from getting access to the company’s entire infrastructure and locking out the company itself. And then, this genius mastermind(s) is so stupid, they have no idea how to cover up their traces and promptly hand over the cash to the Feds.
Even more grotesque is that, as the WSJ notes, the attacks show how hackers have shifted from targeting data-rich companies such as retailers, banks and insurers to essential-service providers such as hospitals, transport operators and food companies. Because apparently instead of spending $29.95 on an anti-virus program, these various companies used the cash to buyback stonk.
According to the WSJ, the FBI last week attributed the JBS attack to REvil, a criminal ransomware gang, which of course comes from Russia, because – again – of course. Nogueira said that JBS and outside firms are conducting forensic analyses of its information-technology systems, and that it isn’t yet clear how the attackers accessed JBS’s systems.
What is clear is that in just a few days these crack Russian cybercommandos will have a few dozen bitcoins less when the FBI
which organized the entire farcical affairconfiscates it all.And speaking of farcical, it gets even worse, because unlike the Colonial “hack” where the company lost all control over its infrastructure, in the case of the JBS hack, Nogueira said that the company maintains secondary backups of all its data, which are encrypted. Here things get downright surreal: according to the official narrative, the company brought back operations at its plants using those backup systems, but “JBS’s technology experts cautioned the company that there was no guarantee that the hackers wouldn’t find another way to strike, and JBS’s consultants continued negotiating with the attackers.”
So even though the company had regained control, it decided to… pay the hackers?
“We didn’t think we could take this type of risk that something could go wrong in our recovery process,” Nogueira said of the decision to pay the attackers. “It was insurance to protect our customers.”
Ah, yes. All for the customers.
Meanwhile here comes yet another hearing led by that crusader for governmental uber-regulation of everything, Liz Warren, who will demand even more crackdown on bitcoin because – you see – none of this would have happened if bitcoin did not exist.
Though maybe this idiotic narrative, which is so transparent those who conceived it should be ashamed, is no longer working because unlike in the case of the Colonial pipeline when news of the ransomware hack spread hammered bitcoin over fears of reprisals, this time the crytpo sector has barely budged as even the weakest hands can’t believe just how stupid the official government narrative has become.
To this the only possible conclusion is that yes, they really do think you are that stupid.
Tyler Durden
Wed, 06/09/2021 – 21:26 - Largest Drug Bust In LA Sheriff's History, After Raid On Cartel-Operated Marijuana Farm
Largest Drug Bust In LA Sheriff’s History, After Raid On Cartel-Operated Marijuana Farm
The Los Angeles County Sheriff’s Department (LASD) has uncovered the largest drug bust in its history Tuesday, and officials allege cartels are to blame. LASD seized tens of millions of dollars worth of illegal marijuana growing in dozens of greenhouses in Southern California, according to local news KTLA.
Twenty-three people were arrested in a massive raid across the Antelope Valley, about 70 miles north of Los Angeles. Officials are currently bulldozing multiple illegal growing sites this week.
Recreational marijuana became legal in California in 2018, but it has opened up a black market for Mexican drug cartels.
Tuesday’s bust follows Antelope Valley residents complaining to local authorities about illegal growing operations stealing the area’s water supply, Los Angeles County Sheriff Alex Villanueva said during a news conference. The largest bust yesterday was a 10-acre plot housing more than 70 greenhouses, with an estimated $50 worth of marijuana.
Major Joint-Operation underway in the High Desert to take down Illegal Cartel Operated Marijuana Groves impacting farmers, families, and businesses. We have teamed up with the @usarmy @deahq @vcsheriff @kernsheriff @seblasd to eradicate these illegal Marijuana groves. pic.twitter.com/y21yWExTT9
— Alex Villanueva (@LACoSheriff) June 8, 2021
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Los Angeles County Supervisor Kathryn Barger tweeted images of one of the growing operations from a helicopter. The view is absolutely astonishing, with row after row of greenhouses filled with marijuana.
On June 22, I plan to bring actionable items to the Board of Supervisors based on a comprehensive report to stop these illegal grows, hold perpetrators accountable, and make changes to state law. (3/3) pic.twitter.com/bPMVBliTX2
— Supervisor Kathryn Barger (@kathrynbarger) June 8, 2021
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Villanueva has yet to assess the total amount of illegal marijuana seized Tuesday, but he said officials measure it in tons. Lancaster Mayor R. Rex Parris said the operation of 500 LASD deputies and DEA agents found $380 million worth of infrastructure and marijuana.
The sheriff said some of the grow operations had unspecified cartels operating the sites and stealing millions of gallons of water from the arid region, currently experiencing an extreme drought. He said these illegal growing operations are dangerous for Antelope Valley’s community as it has led to a surge in violent crime.
“We’re 300 miles away from the border and we have one of the largest illegal drug operations happening in the backyard of the high deserts of Los Angeles,” said Congressman Mike Garcia, R-Santa Clarita.
Local officials urged the Biden administration to secure the border and contribute necessary funding for police as cartels run wildly on either side.
President Biden’s disastrous border policies are chipping away at America’s law and order, and securing the border needs to happen quickly before it’s too late.
Tyler Durden
Wed, 06/09/2021 – 21:10 - The Coming Biden/Putin Train-Wreck Summit
The Coming Biden/Putin Train-Wreck Summit
Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,
I have my doubts whether the Putin-Biden summit in Geneva will take place later this month, but even if somehow it is pulled off, recent Biden Administration blunders mean the chance anything of substance will be achieved is virtually nil.
The Biden Administration was supposed to signal a return of the “adults” to the room. No more bully Trump telling NATO it’s useless, ripping up international climate treaties, and threatening to remove troops from the Middle East and beyond. US foreign policy would again flourish under the steady, practiced hands of the experts.
Then Biden blurted out in a television interview that President Putin was a killer with no soul. Then US Secretary of State Antony Blinken discovered the hard way that his Chinese counterparts were in no mood to be lectured on an “international rules-based order” that is routinely flouted by Washington.
It’s going to be a rough ten days for President Biden. Just as news breaks that under the Obama/Biden Administration the US was routinely and illegally spying on its European allies, he is preparing to meet those same allies, first at the G7 summit in England on June 11-13 and then at the June 14th NATO meeting in Brussels.
Make no mistake, Joe Biden is up to his eyeballs in this scandal. Ed Snowden Tweeted late last month when news broke that the US teamed up with the Danes to spy on the rest of Europe, that “Biden is well-prepared to answer for this when he soon visits Europe since, of course, he was deeply involved in this scandal the first time around.”
Though Germany’s Merkel and France’s Macron have been loyal US lapdogs, the revelation of how Washington treats its allies has put them in the rare position of having to criticize Washington. “Outrageous” and “unacceptable” are how they responded to the news.
Russia has been routinely accused (without evidence) of malign conduct and interference in internal US affairs, but it turns out that the country actually doing the spying and meddling was the US all along – and against its own allies!
Surely this irony is not lost on Putin.
Biden has bragged in the US media that he would be taking Putin to task for Russia’s treatment of political dissidents like Alexei Navalny. Biden wrote recently in the Washington Post, that when he meets Putin, “I will again underscore the commitment of the United States, Europe and like-minded democracies to stand up for human rights and dignity.”
Perhaps President Putin will remind him of how the Biden Administration continues the slow-motion murder of Julian Assange for the non-crime of being a journalist exposing government misdeeds.
Perhaps Putin will remind Biden of how US political dissidents are being treated, such as the hundreds arrested for what the Democrats and the mainstream media laughably call the “January 6th Insurrection.”
Many of these non-violent and unarmed protesters have been held in solitary confinement with no chance of bail, even though they have no prior arrests or convictions. Most await trial on minor charges that may not even take place until next year.
The Washington foreign policy establishment is hopelessly corrupt. The weaponization of the US dollar to bring the rest of the world to heel is backfiring. Only a serious change in course – toward non-interventionism and non-aggression – can avert a disaster. Time is running out.
Tyler Durden
Wed, 06/09/2021 – 20:50 - "Pinching At The Supply" – Delaware Restaurants Clawed By Crab Meat Shortage
“Pinching At The Supply” – Delaware Restaurants Clawed By Crab Meat Shortage
People on holiday are getting crabby in southern Delaware, right down the street from President Joe Biden’s vacation home, where a crab shortage has hit many popular restaurants.
Crab processing plants on the Delmarva Peninsula to Gulf Coast states operate at a fraction of the output due to labor shortages. Crabs coming from Indonesia, the Philippines, and or India have seen shipment delays due to West Coast port congestion.
This is a perfect storm that started well before the virus pandemic when the Trump administration put a cap on the amount of H-2B workers. Then the virus pandemic hit, and borders closed, limiting the travel of H-2B workers. On top of this, domestic workers have been paid more with Trump and Biden checks to stay home than work.
Rippling down the chain, Dewey Beach’s Woody’s crab house, located not too far away from Biden’s Rehoboth Beach-area home, is weeks away from running out of crab meat because of supply constraints mentioned above, according to WRDE‘s Mallory Metzner, who said this is all “pinching at the supply.”
Woody’s owner Jimmy O’Conor is absolutely “heartbroken” about the shortage that has forced him to cut platters down from two crab cakes and eliminate takeout. The eatery’s crabcakes are famous enough that people from out of state would order them through the mail.
Now O’Conor faces crabby customers as his supplies of crab meat dwindles as suppliers can barely keep up with his weekly orders.
“It’s not like I need ten cases, I need 100 cases and it’s just not available, O’Conor said. “People aren’t picking crabs down on the Eastern Shore, Virginia, all of the crab houses are at a fraction of what they usually do.”
According to Philadelphia-based Samuels & Son Seafood Co Inc CEO Sam D’Angelo, “the shortage has been going on since before the coronavirus, but it was accentuated with the demand that all of a sudden took place combined with the shortage of shipping lines and shipping containers and people picking crabs, whether it’s in Indonesia, Philippines or India, it’s a combined situation where everything came together in a perfect storm.”
D’Angelo said seafood supply chains might not normalize until the end of summer when the demand for crabs resides.
O’Conor said if his crab meat runs out, crab cakes might be off the menu for the rest of the summer. At the moment, his wholesale costs for crab meat are more than doubled from last year, and the restaurant is forced to pass along the costs to customers to survive.
Tyler Durden
Wed, 06/09/2021 – 20:30 - How Will Investors Know If Inflation Is Transitory Or Permanent
How Will Investors Know If Inflation Is Transitory Or Permanent
By Steven Englander and John Davies, FX and Rates strategists at Standard Chartered Bank
The Fed has indicated that it does not see its expected inflation surge in the coming months as pointing to longer-term pressures. Many investors are sceptical, but do not have a framework from which to push back against the Fed’s optimism that it can manage a “gentle inflation overshoot.”
Here we argue that looking at trimmed mean inflation is a straightforward way of assessing whether an inflation surge is broad-based or narrow. So far, we find small indications that these broad-based inflation indicators are rising, but nothing conclusive. This assessment could change in the coming months.
We do not expect fixed income investors to challenge the Fed while evidence on inflation is inconclusive. Yields may rise modestly if it looks as if growth will support the start of tapering in 2022, but a steep backup of yields likely requires either significantly increased inflation concerns or growth optimism, neither of which is now visible.
We also watch forward inflation breakevens, to see if they rise above 2.3%, and econometrically derived underlying inflation calculations from the Fed. Breakevens are calculated on a CPI basis; 2.3% would correspond to 2% on a PCE basis. This is a bit of a Rubicon for the Fed, which emphasises its commitment to maintaining stable long-term inflation expectations. Forward breakevens have poked above 2.3%, but have not been able to stay above for any length of time.
The case for looking at trimmed means is that inflation is usually a broad-based phenomenon. It is not just one or two items that go up in price but an environment of general price increases. Trimmed means take out the extremes of sharply rising and sharply dropping prices, and are preferable to core inflation measures that remove food and energy only but include temporarily volatile items. The fastest-rising prices likely reflect a surge of reopening demand or supply-chain constraints. But these price pressures should emerge in a small set of industries where activity has been limited, not across the board. The Fed could argue that a broad-based increase in prices can also be transitory, but that is a hard argument to make when much of their research associates the common element of inflation with underlying inflation trends.
None of the Fed trimmed mean measures are signalling a breakout from past inflation norms (Figure 1). All are well below mid-1990s and 2008-09 global financial crisis levels, let alone 1980s or 1970s levels, so there is no signal of an inflation surge. However, these trimmed means are now close to pre-COVID levels, so further backing up could signal an exit from the ultra-low inflation norms of the previous decade. These readings would probably need to be 0.5-1.0% higher to signal a risk that broader inflation would be above 2.5%. The San Francisco Fed’s calculation of the share of PCE spending and items with rising prices is similarly in line with the past 10 years and well below 1970-2000 levels (Figure 2).
A second approach estimates the common inflation component using econometric methods to identify and weight prices that have the most movements in common. The New York Fed’s underlying inflation gauge based on CPI prices is showing clear acceleration and is at the highest level since 2008 (Figure 3). What this means is that the CPI components with the greatest common movements are going up in price relatively quickly.
By contrast, a quarterly index put together by Federal Reserve Board staff to extract the common movement in inflation expectations (presumably more forward-looking) showed modest increases through Q1-2021. This index is a mixture of inflation expectations at various tenors and has paralleled 5Y5Y UST inflation breakevens (BE) recently, so it looks likely to accelerate in Q2 (Figure 3). However, it has a very low amplitude, even compared to a 10-year average of core PCE or 30Y UST inflation BEs, so modest moves may be a much bigger signal than appears at first glance.
Fed Vice-Chair Clarida has referred to this index several times as a guide to whether inflation expectations are anchored, but the outcome is so stable it is unclear how it should be interpreted. The series begins in 1999, the low is 1.93%, the high is 2.15% and the series has rarely gone above 2.1%, so moving beyond these levels should probably be a yellow flag on the inflation front.
The recent pull-back in breakeven spreads suggests the market has become more prepared to give the Fed the benefit of the doubt regarding its view that near-term upside inflation pressure will prove transitory. During Q1, the volatility in real yields and rise in rate hike expectations suggested the market was ready to challenge the Fed on its own forward guidance on policy. A steady flow of dovish rhetoric, from Chair Powell in particular, capped the Q1 curve steepening but breakeven spreads continued to rise through mid-May. At levels around 2.75-2.85% for 3Y-5Y breakevens, the market appeared to be questioning whether inflation would prove as transitory as the Fed expected. However, the rise in 5Y5Y and 30Y breakevens was more contained and, in our view, implied the market was broadly pricing for the Fed to achieve its average inflation target (AIT) over the longer term.
In recent days, spot breakevens across the entire curve have broken below their uptrend channels from April 2020. In the process, the breakeven curve has seen some disinversion, meaning that the move in the 5Y5Y forward breakeven has been more modest than the move in spot breakevens. This makes sense, in our view – while breakevens reflecting the near-term inflation outlook ebb and flow as the pace of re-opening and recovery plays out, the market’s longer-term inflation view should become more steadily aligned with the Fed’s 2% AIT framework. The upcoming CPI report may prove crucial in determining whether this move can extend further near-term. Given how well the market digested the April CPI and PCE data, we suspect that only an overshoot on core CPI above the higher end (3.7-3.8% y/y) of the estimate range within the consensus survey would be likely to reverse the recent breakeven decline.
Tyler Durden
Wed, 06/09/2021 – 20:10 - Why One Bank Thinks ESG Could Trigger Hyperinflation
Why One Bank Thinks ESG Could Trigger Hyperinflation
In a recent blog post from DB’s Francis Yared, the credit strategist looks at one of the lesser discussed drivers of inflation and points out that supply shocks to oil prices have historically been relevant for inflation expectations.
As Yared writes, “supply shock to oil prices have had a significant impact on inflation expectations on three occasions over the past half century: in the mid 70s, the mid 80s and the mid 10s.” However, unlike the infamous price explosions of the 70s and 80s, in the latest episode the “shale oil revolution” resulted in a significant positive supply shock to oil markets which led OPEC in 2014 to defend its market share rather than oil prices. The downward pressure on oil prices, Yared writes, resulted in a shift to a lower inflation regime, which was reflected in both consumer and market inflation expectations (University of Michigan 5-10y and 5y5y breakevens) as well as monetary policy expectations and the term premium.
Well not anymore, because ESG is unwinding the shale oil revolution. As recent events at Exxon and Shell have shown, the pressure on oil companies to reduce oil and gas exploration and adapt their business models has increased significantly over the past few months. This is reflected in crude rig counts that have lagged the recovery in oil prices and stand at 1/3rd of the 2014 peak.
Similarly, carbon emission future prices in Europe have risen considerably: as the WSJ reported recently, the price of carbon credits traded in Europe has jumped 135% over the past 12 months and recently hit a series of records as economic activity rebounded from pandemic lockdowns. Only lumber, driven higher by the housing boom, has proved a better commodities investment.
As Yared summarizes, “ESG is a negative supply shock that internalizes the climate cost of the production of goods and services.” This negative supply shock will be inflationary until technological progress absorbs these costs. That could take years. Moreover in Europe, it could garner enough of political support to justify a more aggressive fiscal policy despite the constraints at the German or EU levels.
To be sure, the global economy has still to contend with the disinflationary impact of ecommerce. However, as DB concludes, “ESG, the Fed’s Average Inflation Targeting regime and a significantly more pro-active fiscal policy (at least until the US mid-term elections) constitute a new powerful combination that should be supportive of a higher inflation environment than experienced over the last 10 years.“
Commenting on his colleague’s observations, DB credit strategist Jim Reid agrees, and writes that “maybe in the fullness of time this surge in mining between 2010-2015 will be the exception rather than the norm and that, in a rapidly changing and ever more ESG sensitive world, it will be harder to get oil out of the ground. Pricing climate-change externalities more generally could make things more expensive over time. Are we on the verge of another change in inflation expectations due to oil and energy, one that is in large part due to ESG.”
So in case there was still any confusion why the establishment has adopted ESG as gospel – and as a reminder, ESG is nothing new, and many years ago used to be called Corporate Social Responsibility, or CSR and even Nobel economist Milton Friedman warned against its subversive nature 50 years ago when he said that taking on externally dictated “social responsibilities” beyond those directly related to a company’s business opened the floodgates to endless pressure and interferenc – at a time when the same establishment is also desperate to inflate away the nearly $300 trillion in global debt, now you know: ESG looks like the catalyst that will unleash runaway inflation. And if central banks fail to contain it in time, the entire developed world may soon descend into hyperinflation.
Which in turn should also answer the other pressing question: why are central banks so desperate to issue their own digital, programmable currencies? Well, the ability to turn money on and off with the literal flip of a switch will come in extremely useful in a world where authorities have lost control over all other monetary pathways…
Tyler Durden
Wed, 06/09/2021 – 20:10 - "We're On Fire": Amidst NYC Exodus, Demand For Commercial Office Space In Palm Beach Is Off The Charts
“We’re On Fire”: Amidst NYC Exodus, Demand For Commercial Office Space In Palm Beach Is Off The Charts
With Wall Street firms tripping hand over foot to get out of New York, where taxes and crime are both on the rise, places like Palm Beach, Florida, are the beneficiaries. We have noted numerous firms, including names like Point 72 and Goldman Sachs, branching out and/or leaving New York altogether in favor of greener pastures in Florida, since the pandemic started.
Amidst the Wall Street exodus, Palm Beach office space demand is off the charges. The city has officially become a “hot market” for commercial real estate, according to a new report from BNN Bloomberg. As a result of the boom, Manhattan developer Related Cos. “has been accelerating investments in West Palm Beach and now controls about a third of its downtown office stock,” the report notes. Related is the company behind NYC developments Hudson Yards and the Columbus Circle tower.
Now, the company is betting on a continued boom in South Florida even after Covid restrictions are lifted.
Kelly Smallridge, president of the Business Development Board of Palm Beach County, told BNN: “The pandemic has really showed executives that they could do business anywhere, Developers are at the drawing board right now to develop more space to accommodate all of this growth. We’re on fire.”
Related has bought three buildings in West Palm Beach this year, including one that will house Point 72. It’ll now own 1.6 million square feet (149,000 square meters) of offices in the area.
New York-based Cohen Brothers Realty has also proposed a 400,000 square foot office tower in West Palm, the report notes. Developer Jeff Green has a mixed use project called One West Palm currently under construction, as well.
Gopal Rajegowda, a partner at Related Southeast, said: “We feel West Palm is one of the fastest-growing commercial markets. With more people thinking about lifestyle now, a lot of these companies say, ‘hey, we want to be in South Florida, so why don’t we put a stake in the ground now?’”
BNN estimates that about 59,000 people from the New York area spent “at least eight weeks” in Southeast Florida last year. 42% of those went to Palm Beach County, which gained 11,000 new residents during 2020.
The city’s 360 Rosemary tower is now more than 95% leased, compared to 30% six months ago. Mark Pateman, managing principal with Cushman & Wakefield Plc’s West Palm Beach and Boca Raton offices, said: “It would normally take way longer to lease. I am seeing a lot of non-local brokers walking through our buildings dragging Florida brokers in tow.”
One of the reasons Palm Beach is filling up so quickly is because of its small size. It has about 2.9 million square feet of office space, compared to 253 million square feet in Midtown Manhattan. Because of its small size, it’s also tough to consider West Palm’s boon as a major sea change.
Pateman concluded: “We’ve got a good run here, we have another two years of tailwinds from Covid, but is New York going away? Absolutely not. It’s overstated to say this is a paradigm shift.”
Tyler Durden
Wed, 06/09/2021 – 19:50 - Dr. Fauci's Preposterous Lie: "Attacks On Me Are Attacks On Science"
Dr. Fauci’s Preposterous Lie: “Attacks On Me Are Attacks On Science”
Authored by Mike Shedlock via MishTalk.com,
Dr. Fauci attempts to defend himself on MSNBC. And MSNBC is seemingly pleased to cooperate to spread even more Fauci lies.
I picked up this story from a Greenwald Tweet.
Beyond the dangerous arrogance and pomposity of proclaiming “anyone who criticizes me is attacking Science” — thus placing himself off-limits from questioning — he *admitted* he purposely issued false, anti-science, politicized claims, such as telling people not to wear masks: https://t.co/TghpTiKHdj
— Glenn Greenwald (@ggreenwald) June 9, 2021
https://platform.twitter.com/widgets.js
Painfully Ridiculous Lie
What’s “painfully ridiculous” is Fauci’s claim, “Attacks on Me are Attacks on Science”.
I Am The Science.
— Glenn Greenwald (@ggreenwald) June 9, 2021
https://platform.twitter.com/widgets.js
Fauci is a proven liar. He has even admitted that fact. It matters not that he he lied (allegedly to preserve masks for healthcare workers).
What About Faucigate?
The Left and the Right portray a freedom of information lawsuit email chain involving Fauci as some sort of proof of Wuhan Lab theories and mask effectiveness.
Rand Paul Tweets
It’s time to fire Fauci! Emails that have been released now under Freedom of Information Act show two very important things:
1. FAUCI has been lying
2. I’ve been right all alongStand with me today while we keep showing the way: https://t.co/B42p8TpuXz https://t.co/k5rWif6erb
— Rand Paul (@DrRandPaul) June 2, 2021
https://platform.twitter.com/widgets.js
Bloomberg gets it correct ‘Faucigate’ Emails Prove Nothing About a Covid Lab Leak
Bloomberg’s claim is true. We still do not know. Nothing has been proven. But Bloomberg hits upon the key issue that few are even aware of (emphasis mine).
If Fauci owes the public an explanation for anything, it’s why he approved funding for research that potentially made viruses more dangerous — so-called gain of function research.
Though Fauci has been unofficially anointed America’s “top expert in infectious disease” by the press, his real job is director of the National Institute of Allergy and Infectious Diseases. In that capacity, he’s not above criticism. He’s approved funding of projects on viruses that other scientists have deemed too risky to be worth doing.
These risky projects include several that Rutgers University biologist Richard Ebright calls gain of function research of concern — projects that have altered flu viruses to transmit between different hosts, for example, research on altering bat coronaviruses that was done in collaboration between U.S. researchers and those in China.
Ebright spent years warning people about gain of function research long before this pandemic broke out. Another scientist who worries about the danger of such experiments is Harvard epidemiologist Marc Lipsitch.
Gain of Function
“Gain of function” is a euphemism for “purposely making viruses more lethal.”
And research involving bats was done with collaboration between the US and China.
Questions of the Day
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Why is there so little media coverage of gain of function?
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What precisely was Fauci’s role in supporting such research?
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In what ways did the US cooperate with China?
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Did any of those ways include Wuhan?
“I Am Science”!
By saying “Attacks on Me are Attacks on Science,” he is effectively saying “I am Science“.
Excuse me for pointing out, science does not lie and never did. People lie, scientists lie, and charlatans lie.
Scientists may come to the wrong conclusions, but science does not lie.
Fauci is a proven liar and by effectively making the claim that he is science, not only is he a liar, but a proven charlatan as well.
Instead of repetitive focus on masks where opinions are already set in stone, I suggest a deep dive into Fauci’s role and US cooperation with China in gain of function research to make coronaviruses more lethal.
Tyler Durden
Wed, 06/09/2021 – 19:30 -
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