Mar 10

Today’s News 10th March 2021

  • How France And The US Cooperate
    How France And The US Cooperate

    Authored by Danny Sjursen via ConsortiumNews.com,

    After some hints to the contrary, it turns out French troops in the Sahel aren’t going anywhere anytime soon. So said President Emmanuel Macron in Paris on Feb. 16, even before his virtual summit with France’s former-colonial “partners” – Burkina Faso, Niger, Mali, Mauritania and Chad – comprising the G5 Sahel Joint Force.

    Two French Air Force fighter jets operating over Mali after refueling with a KC-135 Stratotanker. (U.S. Air Force, Christopher Mesnard)

    Formed in 2014, it’s described in bureaucratic Paris-speak as “an intergovernmental cooperation framework, in order to put forward a regional response to the various challenges.”

    In reality, the G5 are little more than a misfit crew of problematic proxies doing the bidding of the French generals leading a seven years-running Operation Barkhane – and that of America’s AFRICOM proconsuls propping-up Paris’s pet forever war in the Sahel.

    Uniformed Mercenaries

    This year’s G5 Sahel summit was based – like Operation Barkhane’s headquarters – in the Chadian capital of N’Djamena, though due to Covid-19, European and U.S. participants joined virtually.

    France launched its current military adventure in Mali – originally known as Operation Serval – in 2013, before expanding it across the region under Barkhane’s umbrella. Ironically, as the French mission has continually expanded – and recently floundered – every single metric of insecurity in the Sahel has increased along with it. That includes: civilian deaths (2,000 in 2019-20), internal displacement (well over one million), poverty (30 million people in need of food assistance), and coalition casualties (29 Malian, UN and French troops killed since the New Year). 

    Nevertheless, when it comes to doubling down on failure, France learned from the (American) best, so Macron ruled out immediate troop cuts – despite both rising antiwar sentiment at home and growing anti-French sentiment in the region – and even earned Chad’s commitment to deploy 1,200 more troops to complement Operation Barkhane’s 5,100 French soldiers. Now that’s worth keeping an eye on. The Chadian reinforcement represents a nefarious and long-running quid-pro-quo, whereby Paris scratches N’Djamena’s dictator-of-the-moment’s back in exchange for his fielding France’s favorite hired guns. 

    French President Emmanuel Macron in 2017. (Estonian Presidency, CC BY 2.0, Wikimedia Commons)

    Come to think of it, Paris often provides the guns too, so Chadian troops really amount to hired hands and cannon fodder for France’s neo-colonial combat. For example, just three weeks before the summit, the French embassy held a ceremony celebrating the handoff of nine ERC-90 armored vehicles to Chad’s uniformed mercenaries – whilst the country’s civilians starve. One wonders just how many bags of grain, mosquito nets, and vaccines nine of these even dated ERC-90s might’ve bought? No matter, since the embassy asserted that these “rustic, efficient and reliable” vehicles “will perfectly meet the operational needs of the Chadian army in its contributions to the fight against terrorism.” Too bad Chad’s children can’t eat them.

    Unhinged Hired Hands

    How about those hired guns? In other words, just what of substance do N’Djamena’s soldiers of fortune – paid all of $58 a month for their trouble – provide the destabilizing Franco-American Sahel “stabilization” mission? Beyond bullet-sponges, let’s say less than zero! Even according to a rather generous International Crisis Group assessment, “Chad’s army plays a central role in the international counter-terrorism operations in the Sahel, but it is a source of potential instability at home.” 

    Not to say current Chadian strongman Idriss Déby’s troopers don’t stay busy. He’s shipped them to support France’s fight in Central and Northern Mali (1,406 of them, in fact, by March 2017), to the five-country combat mission countering Boko Haram in the Lake Chad region in early 2015 (providing about one-third of troop strength for the Multinational Joint Task Force – which is also headquartered in the Chadian capital N’Djamena), and to the United Nations Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA) – another former French colonial disaster area.

    Chad’s President Idriss Deby Itno during the swearing in ceremony of his fifth term on Aug. 8, 2016. (Paul Kagame, Flickr, CC BY-NC-ND 2.0)

    Whether Chad’s “desert warriors” are actually value-added on these adventures is another matter entirely. In April 2014, Chadian forces had to withdraw from the UN mission in the Central African Republic after accusations they’d killed 30 unarmed civilians and offered financial and military support to the country’s Seleka rebels. In Mali, there’ve been numerous allegations of rape and sexual violence perpetrated by Chad’s soldiers.

    Nevertheless, even if Chad’s troops abuse civilians, threaten fledging democracy at home, and haven’t won any real victories abroad, Déby sees subcontracting his soldiers as the gift that keeps on giving (to his regime at least). Having crafted Chad’s image as an indispensable counter-terrorism ally, he’s “played the military diplomacy card” to consolidate Franco-American security partnerships – and thereby, his own political power. 

    The political scientist Marielle Debos even coined a clever slogan for Déby’s mercenary method of misrule – and title of her 2016 book – “Living by the Gun in Chad.”

    In 2017, she explained that Chad’s self-styled status as a newfound regional military power “leads France and the US to turn a blind eye to election rigging and human rights violations.” Déby’s even garnered decisive diplomatic clout – like the January 2017 selection of his former Foreign Minister Moussa Faki Mahamat to head of the African Union Commission. He still does.

    Dancing with Monsters, Sowing Disasters

    Naturally, Chad hasn’t much business contributing to anything abroad — given its own rampant instability and unfolding humanitarian crises. The place is a mess. Right on the heels of its hosted summit, 35 people were killed in southeastern Chad during — such a Sahelian ubiquity — communal fighting between farmers and herders.

    Furthermore, amidst rising tensions resulting from the perennial (in power since 1990) strongman’s Idriss constant constitutional goal-post-moving — he’s amended and re-amended it so he can now stay in power until 2033 — this week Chadian security forces raided the opposition presidential candidate’s house, killing five people (including his mother and son). 

    Sunset in N’Djamena, Chad, 2014. (kaysha, Flickr, CC BY-NC-ND 2.0)

    This all unfolds ahead of Chad’s scheduled April 11 election, but should hardly surprise even casual observers. Defying a government ban on protests under coronavirus restrictions, Déby’s decision to run prompted several hundred demonstrators to hit N’Djamena’s streets, set fire to tires, and chant “Leave, Déby!”

    They were met with police tear gas and several dozen were arrested. That’s all business as usual in Chad, a country where – according to the 2020 Freedom House report – “Corruption, bribery, and nepotism are endemic.”

    Such pesky details aside, both Paris and Washington view Chad as an essential ally in the regional fight against Islamist groups. In fact, almost two months to the day before the G5 summit’s kickoff, US AFRICOM’s commander, General Stephen Townsend, paid homage at Déby’s tinpot dictatorial court – where he “thanked Chad for its continued leadership in regional security and for hosting US troops.”

    Right after that, Proconsul Townsend dropped by the French Barkhane team and the European Union training detachment (Task Force Takuba), “recognizing their efforts to bring increased security and stability to the Sahel.” That’s the symbiotic relational rub: it’s France – backed by big brother America, and with a clutch EU-assist – that keeps Déby-the-despot in power, thereby fueling the foundational instability driving much of the regional mess.

    I mean that quite literally. As recently as February 2019, the French Air Force spent four days bombing rebel convoys that were en route to overthrow the monster of N’Djamena.

    From Paris’s cynical perspective, Déby is a decidedly useful monster though — as were all the other despots who proceeded him (until they weren’t) — because he provides military bases, including Barkhane’s headquarters, and ample troops to do France’s bidding. Starved and suppressed Chadian citizenry be damned! That populace need not be so put upon by the way. Chad’s humanitarian and human rights disasters are largely manmade and Franco-American accelerated.

    N’Djamena, Chad, 2014. (kaysha, Flickr, CC BY-NC-ND 2.0)

    Chad’s been exporting oil since 2003, and from 2004-11 alone earned around €4.5 billion – nothing to sneeze at for a country of just 15 million people. Not that average Chadians ever saw, or see, most of the petro-revenues. Déby mortgaged the nation’s desperately needed energy wealth to the multinational Glencore company in 2014, when his government borrowed more than a billion dollars from the Anglo-Swiss mining conglomerate. The plan was to repay the loan with future oil sales, but after the petro-market collapsed more than 80 percent of oil revenues were needed to service the debt. Talk about kicking it old-school resource-extraction-imperialist-style! 

    What little services-based infrastructure was built with the remaining energy profits tended to be of low-quality — what with cronyist corruption skimming off the top – and limited to the country’s north, where (you guessed it!) Déby’s clan happens to hail from. Most of the rest went (guessed it again!) to international gun-runners.

    According to a 2016 briefing for the World Peace Foundation, “Between 2006 and 2010, Chad became the third-largest importer of arms in sub-Saharan Africa, appearing for the first time in the top ten.” Furthermore, N’Djamena’s military spending increased eight-fold from just 2004 to 2008. 

    The globe’s top merchant of death – you know, the “arsenal of democracy” – America, has gotten plenty into that game. In August 2020, Washington delivered $8.5 million in vehicles and equipment to Chad’s Special Anti-Terrorism Group, as part of a $28 million total support package for N’Djamena’s troop contribution to the G5 Sahel Force. Additionally, many Chadian military officers – including Idriss Déby, who attended the Ecole de guerre – have long trained in France. 

    That the U.S. and (more so) France foster all this indecency — and the hypocrisy inherent in their doing so — is hardly lost on Chadians, or, frankly, other Sahelians. “Many people are saying, one day we’re going to kick France out of Africa,” said the host of a Canadian radio show geared towards fellow Chadian exiles – “France values democracy inside its borders. [But] in Chad they protect one man, the dictator.”

    What’s truly key is that Chad and the despotic Déby are only one anecdotal — but instructive — example of how the Franco-American counter-productivity game operates in the Sahel and Africa-wide. That it unfolds in the shadows, as a largely unreported – and with relatively low casualties (for the U.S.) – abstraction, makes the madness all but invisible. But as America’s new president weighs his foreign policy options, and with Macron seemingly pinning his best hopes on a Biden-bailout for France’s forever war in the Sahel, it’s worth keeping an eye on – and definitely time to talk about – the Chadian formula.

    Preferably before some mourning American soldier’s family is forced to find the damn joint on a map.

    Tyler Durden
    Wed, 03/10/2021 – 02:00

  • EU Nations Pull Trigger On Legal Action Against UK Over Brexit Backsliding
    EU Nations Pull Trigger On Legal Action Against UK Over Brexit Backsliding

    It’s no secret that EU officials in Brussels are furious over charges that Britain is backsliding on treaty obligations in its exhaustedly negotiated Brexit withdrawal agreement designed to prevent the reestablishment a hard border between Northern Ireland and the Republic.

    EU nations are now backing legal action against the UK after it was reported the European commission is busy working on “infringement proceedings” against Britain due to its “unilaterally” seeking to ease the impact of Brexit on Northern Irish businesses in contradiction of prior agreements. 

    Getty Images

    A new FT report cites diplomats who attended a closed door meeting of EU ambassadors in Brussels Tuesday to say “EU nations have supported Brussels’ plan for legal action against the UK over its decision,” and further that, “France and other countries supported the plans by EU Brexit chief Maros Sefcovic” that would include “a twin-track approach” to rebuke and punish the UK.

    “We are currently preparing it and it would be really something coming to our table very soon. The most precise term I can give you is really very soon,” Sefcovic said.

    Specifically the infringement proceeding would by the end lead the UK to the European Court of Justice, and further involving a formal reprimand for London’s “breach of good faith,” according to the report.

    Last week Sefcovic voiced what he described as “the EU’s strong concerns over the UK’s unilateral action, as this amounts to a violation of the relevant substantive provisions of the Protocol on Ireland/Northern Ireland” to UK Brexit representatives. 

    To review among the key contentions issues of the Northern Ireland Protocol include:

    As part of its departure from the EU, the U.K. agreed to conduct checks on goods moving across the Irish Sea, going from Scotland, Wales and England to Northern Ireland. The latter has remained part of the EU’s single market for goods to avoid a hard border with the Republic of Ireland in what’s known as the Northern Ireland Protocol.

    The U.K. had until the end of this month to put forward these checks, but it has decided to extend the implementation period until October. A move that the European Commission, the executive arm of the EU, said breaches their agreement and therefore international law.

    In rebuttal to EU anger the UK said it adequately notified the European commission early last week before any public statements that it’s extending a grace period merely as a “temporary” technical step in order “to provide more time for businesses such as supermarkets and parcel operators to adapt to and implement the new requirements.”

    Meanwhile, international delivery specialist ParcelHero put out a study noting that “increased red tape and duties mean UK traders could face a 35% drop in sales of products sourced overseas.” It claimed, “The Government’s Brexit rollout is going to hell in a handcart. The Prime Minister must return to the negotiating table to sort out the escalating issues facing the UK’s beleaguered retailers.”

    Tyler Durden
    Wed, 03/10/2021 – 01:00

  • The Weaponization Of The Term "Far Right"
    The Weaponization Of The Term “Far Right”

    Authored by Shane Coules via The Mises Institute,

    Economist Thomas Sowell once said that the word ‘racism’ is like ketchup: it can be put on practically anything. Today, since Robin DiAngelo et al have decided that all white people are racist, it could be argued that the word has lost some of its power; if we’re all racist, then calling us just that isn’t particularly effective. And if we’re all unconsciously racist, perhaps we’re all victims, and thus should be the target of sympathy, not anger. Or not: Ms. DiAngelo’s and her anti-racist disciples’ claptrap has been brilliantly taken apart by the esteemed linguist and author John McWhorter.

    But the term far right hasn’t been watered down nearly as much as the ‘r’ word. And when most people hear far right, they likely think of Nazi flags, white supremacists, ultranationalists, etc. So, if you are eager to wound an individual’s or a group’s reputation, the term is most certainly a useful one.

    Indeed, like its close cousin – the neologism ‘alt right’ – far right has become an effective tool for those in the media and politics, used to discredit and smear people who they consider a threat, or with whom they merely disagree. A recent example of this is the anti-lockdown protests that took place in Dublin, Ireland on February 27, 2021.

    Dublin Drama

    Reports have varied, but anywhere from 400 to 4,000 people took to the streets of Dublin to demonstrate against what have been considered the most draconian lockdowns in Europe. This third Irish lockdown has been enforced since late December and may last until June. When one reckless individual at the protest decided to point fireworks at the Irish police (An Garda Síochána, or ‘the Guards’), unfortunately further violence broke out. Predictably, the ugly scenes that followed dominated the news headlines, rather than the core issue: people protesting against their de facto mass incarceration, and the collateral damage caused by continual lockdowns.

    Papers pounced, using loaded language like “anti-lockdown protesters stormed Dublin city centre.” One elected Irish official referred to the protest as a ‘riot’. And the always-effective smear would soon be utilized, too. Extra.ie proclaimed “far right thugs attacked frontline Gardai policing an illegal protest.” The Irish Mirror declared “far right anti-lockdown protesters thronged the city flouting Covid-19 restrictions.”

    How reporters managed to sit down with protesters and learn about their respective political leanings is not only incredibly admirable – it is journalism of the highest standard. Of course, these journalists did no such thing. Were some of those in attendance right wing? Yes. That a) doesn’t necessarily make them far right, and b) doesn’t warrant labelling the protest a ‘far-right demonstration’ like some Irish politicians have. A significant number of Irish citizens decided to stand up and speak out against what is widely considered a cruel lockdown. That doesn’t make all of them extremists. Quite the opposite: it is likely that many are desperate and feel that protesting is their only option.

    Interestingly, in videos posted online, Irish Republican flags can also be seen among the crowds in attendance. Irish Republicans tend to lean left on the political compass, and often describe themselves as socialists, in keeping with the political leanings of the leaders of the Easter Rising. The likely reality is that the people protesting came from different political backgrounds, and many – if not most – were probably apolitical, like the majority of people tend to be. By using the term far right to describe the march, reporters and politicians are smearing the ordinary, non-violent people who have genuine concerns about the latest level-5 lockdown: a 5km travel limit, no guests on private or rented property, no family gatherings in any setting, the forced long-term closure of “non-essential” businesses, and fines and/or jail time for some who break the rules.

    “Far Right” as an Ad-Hominen

    No matter how rational or cogent one’s arguments are, the term formerly reserved for fascists and neo-Nazis will always be on standby, ready to be used by the writer or politician taking aim. Canadian clinical psychologist Jordan Peterson – a man who has lectured on fascist and socialist totalitarianism – has been referred to by critics as “a far-right boogeyman riding the wave of a misogynistic backlash.”

    YouTube has given a platform to progressive, socialist, communist, anarchist, conservative, classically liberal, libertarian, and centrist voices. But according to an academic paper released last year, most YouTubers are far right. The Southern Poverty Law Centre has painted Sam Harris – a self-described liberal – as “a gateway to the alt (far) right.” Conservative political commentator Ben Shapiro has recently been called a “far right gadfly” by the ‘youth culture’ magazine Uproxx. For those who don’t know, Mr. Shapiro is Jewish; Jews and neo-Nazis tend not to get on very well. But that doesn’t really matter, because according to Wikipedia – with its approximately 46 million articles accessed by 1.4 billion unique devices every month – far-right politics includes ideologies or organizations “that feature aspects of chauvinist, xenophobic, theocratic, racist, homophobic, transphobic, or reactionary views.” Good luck finding widespread agreement on what constitutes each of those terms. In any case, with such a wide net, it shouldn’t be difficult to lump people and groups under the undesirable umbrella.

    Given how the term far right is beginning to be spread like ketchup, perhaps it will soon lose its effectiveness in smearing individuals and groups. But as the above example of the Dublin anti-lockdown protest shows, it is still a useful weapon used by the media and political establishment; tarnish aspects of a protest as far right, and you essentially tarnish the entire protest – one that was reasonably justifiable.

    The sooner all of us smell the BS, the better; with such broad, divisive, and potentially damaging terms used so liberally against individuals and groups, rational dialogue between people who disagree may become even more of a rarity.

    Tyler Durden
    Tue, 03/09/2021 – 23:25

  • ​​​​​​​China Makes Massive Ethanol Purchases, Surpasses Imports From Last Year
    ​​​​​​​China Makes Massive Ethanol Purchases, Surpasses Imports From Last Year

    Three Reuters sources said Monday that Beijing made massive purchases of US energy products.

    The sources said, “three ships carrying ethanol were heading to China from the US Gulf Coast.” They said it’s a “sign that ethanol exports from the United States to the country are increasing drastically.” 

    The purchases are so big that they’re expected to “surpass the total amount of US ethanol that China imported last year,” said Reuters. 

    Each vessel is carrying 30,000 tons or about 240,000 barrels of ethanol, the sources said. It was unclear what port the ships were headed to in China. One source said two of the tankers left at the end of February.

    Searching through US Customs data, we found at least two of the vessels and their International Maritime Organization (IMO) numbers for tracking purposes.

    In January alone, China has bought “roughly 200 million gallons” (4.76 million barrels) of the US, said Archer Daniels Midland Co-Chief Financial Officer Ray Young.

    If all three tankers were filled to the brim, the cargo would be equivalent to about 720,000 barrels of ethanol, more than 506,000 barrels of US ethanol shipped to China in all of last year. 

    “While China imported an annual record of 4.72 million barrels of US ethanol in 2016, it has not recently been a large importer. However, tightening supplies of domestic corn used to make the biofuel, coupled with comparatively lower US prices, have spurred the need for imports,” Reuters said. 

    The increase comes months after former President Trump has left the White House and the Biden administration has taken control. Even though the Biden administration has promised to move quickly to restore America’s relations with the rest of the world, it has yet to improve relations with China. 

    From Iran to Russia, Europe to Latin America, the administration is cooling tensions after President Trump ran amuck, inciting trade wars and unleashing sanctions. Now cooler tensions are materializing. 

    We wonder if Beijing’s latest purchase of US ethanol is the beginning of a move to show that it plans to hold up to the trade deal agreement it signed in January 2020 to purchase more of the American farm, energy, and manufactured goods. 

    China miserably failed to meet trade deal requirements under the Trump administration, but maybe all will change under a Biden administration?

    Already, China is on a massive buying spree of US corn. 

    Tyler Durden
    Tue, 03/09/2021 – 23:05

  • Michigan Governor Whitmer Faces Possible Criminal Charges For Nursing Home Deaths
    Michigan Governor Whitmer Faces Possible Criminal Charges For Nursing Home Deaths

    Authored by Rick Moran via PJMedia.com,

    The Macomb, Mich., county prosecutor is considering filing criminal charges against Governor Gretchen Whitmer for her actions in placing coronavirus-positive patients in nursing homes after their release from the hospital.

    A similar practice in New York State resulted in the deaths of 15,000 elderly patients and staff and prosecutors are looking at charging Governor Andrew Cuomo in the matter.

    New Macomb County Prosecutor Peter Lucido, a Republican, is appealing to people who lost loved ones in nursing homes during the pandemic to file wrongful death complaints with their local police departments to help in his investigation. Lucido says he is barred by law from getting that information.

    Michigan was one of just five states to place COVID patients in nursing homes.

    WXYZ:

    Lucido started looking into this last year as a State Senator. He issued a statement in August that said more than 2,000 residents and 21 staff died in nursing homes, 32% of all deaths.

    Lucido is asking people to go back to the nursing homes and gather the vital information surrounding deaths and take it to local police to file a wrongful death report.

    He will be meeting with Macomb County Police to instruct them on how to process and verify the information and bring it to his office.

    “Why did my mom or why did my dad, brother, sister, or aunt die? Was it because of the policy by bringing in COVID-infected patients that spread to my mom that killed my mother?” Lucido asked.

    Fifteen thousand families in New York are asking the same thing.

    Lucido is running into a lot of flak from the Democratic leadership in the state. He asked them to help him set up a “blue ribbon” investigating panel made up of county prosecutors to investigate whether any charges should be filed.

    They weren’t interested.

    The Attorney General said there was not a proper basis to open a criminal investigation. The U. S. Attorney said they would look into his request.

    “I didn’t receive a very warm welcome. This is not political everyone. This is about people who passed away at the behest of a policy that was created by the Governor,” Lucido tells 7 Action News.+

    Don’t expect the feds to do anything either. National Democrats have rediscovered states’ rights and wouldn’t dream of infringing on local investigations.

    Whitmer’s office issued a self-serving statement that somehow never quite got around to answering the question.

    Our top priority from the start has been protecting Michiganders, especially seniors and our most vulnerable. The administration’s policies carefully tracked CDC guidance on nursing homes, and we prioritized testing of nursing home residents and staff to save lives. Early in the pandemic, the state acted swiftly to create a network of regional hubs with isolation units and adequate PPE to prevent the spread of COVID-19 within a facility. In addition, we have offered 100 percent of nursing home resident priority access to the vaccine.

    I’m sure the families of dead loved ones are overjoyed that nursing home residents have been given priority access to the vaccine. But what about the policy of placing infected patients in with healthy seniors?

    Whitmer’s response to the pandemic has been at times, hysterical and an incompetent mess. She owes those families an explanation and apology for adopting an incomprehensibly stupid policy that cost lives.

    Tyler Durden
    Tue, 03/09/2021 – 22:45

  • ​​​​​​​Dollar Bottom? USD At Major Crossroads
    ​​​​​​​Dollar Bottom? USD At Major Crossroads

    The US Dollar faded 3.5-month highs on Tuesday morning as Treasury yields dipped, allowing more riskier currencies to rise. The latest surge in the dollar has put it at an important crossroad after stabilizing in the last three months around the 89-90 level. 

    With dollar shorts under strain, the latest Commodity Futures Trading Commission data ending Mar. 2 shows the short dollar trade is widely overcrowded. The chart below is relatively important but doesn’t cover the real FX market, i.e., FX futures markets but does represent a sizeable short in the dollar.

    The dollar’s latest push higher has put bears under pressure, especially since the monthly 200 exponential moving average (91.355) has been breached to the upside with the 23.6-Fib (92.319) in a test. 

    Even though the dollar has slumped Tuesday along with Treasury yields, falling to around 1.54% on 10Y, yields could rise further this week as the market will have to digest $120 billion auctions of 3, 10, 30-year treasuries. After last month’s abysmal 7-year note sale that spiked yields and dollar.

    “Stability is likely to remain the theme of the day ahead of the UST auctions and the US inflation release tomorrow, which are the near-term risks for FX markets (given the possible negative spillover into USTs and the risk of a further sell-off),” ING strategists Chris Turner, Francesco Pesole and Petr Krpata wrote in their daily note. 

    The dollar has perhaps attracted short-term traders due to oversold conditions and high net speculative positioning heavily short (hello Robinhood or WSB kids…). Further, the rise in interest rates increases the dollar’s appeal. 

    And should this occur, it would not be welcome for the equity markets due to the negative correlation between the dollar and stocks. Most importantly, a surging dollar, with rising interest rates, could put a severe dent in the “reflation trade.”

    More on dollar strength is JPMorgan who recently warned dollar strength may be driving some of the recent weakness in commodities.

    However, bear in mind that trading the dollar in FX markets is merely betting its the best-looking – or worst – horse in the glu factory of fiat finance…

    We suspect ‘alternative currencies’ may be a better longer-term signal for where the dollar ends up, but counter-trend rallies against its currency peers are obviously tradable.

    Tyler Durden
    Tue, 03/09/2021 – 22:25

  • Arizona And Montana Take Legal Action Against Biden Admin ICE Arrest Regulations
    Arizona And Montana Take Legal Action Against Biden Admin ICE Arrest Regulations

    Authored by Samuel Allegri via The Epoch Times (emphasis ours),

    Arizona and Montana are taking legal action (pdf) to block new Biden administration immigration regulations, saying that these would cause negative consequences for the states.

    The new rules would limit the capability of ICE to detain some illegal immigrants unless they pose a threat to national security, entered through the border after Nov. 1, or committed aggravated felonies.

    The Biden administration says that the rules don’t impair arresting or deporting people, but the officers in the field would need to request permission from their superiors to arrest people outside of the aforementioned cases.

    “If asked about the poorest policy choice I’ve ever seen in government, this would be a strong contender,” Arizona Attorney General Mark Brnovich said in a statement. “Blindly releasing thousands of people, including convicted criminals and those who may be spreading COVID-19 into our state, is both unconscionable and a violation of federal law. This must be stopped now to avoid a dangerous humanitarian crisis for the immigrants and the people of Arizona.”

    Packets of fentanyl mostly in powder form and methamphetamine, which U.S. Customs and Border Protection say they seized from a truck crossing into Arizona from Mexico, is on display during a news conference at the Port of Nogales, Ariz., on Jan. 31, 2019. (U.S. Customs and Border Protection/Reuters)

    Montana Attorney General Austin Knudsen joined the Brnovich in the lawsuit. Both filed for a preliminary injunction aiming to block the regulations from going into effect.

    “Meth trafficked into Montana by Mexican drug cartels has wracked our state. The problem will only be made worse if the Biden administration continues to allow criminals to stay in the country,” Knudsen stated. “Enforcing our immigration laws and helping to keep Americans safe is one of the federal government’s most important functions. The Biden administration is failing its basic responsibility to Americans.”

    Last month, Chief Deputy Matthew Thomas told Townhall that the crisis at the border had begun to re-emerge at around the end of 2020 because the human and drug trafficking cartels expected President Joe Biden to have a “hands-off” attitude with regard to the border situation.

    “When [Trump] took office, we saw that this area out here went completely dead. Nobody was moving, nobody was smuggling because [the cartels] knew that Trump was going to put all hands on deck out down here and that they would be intercepted so it came to a screeching halt,” Thomas said.

    “It was a very slow trickle to get back to some kind of normal but it never got back to where it was,” Thomas added.

    A map showing the Pinal County boundary, the U.S.–Mexico border, and the major highways in central-south Arizona. (The Epoch Times)

    Thomas said that since Biden has ordered to halt the construction of the southern border wall, it has created more trouble for Pinal County since it doesn’t have physical barriers, promoting the criminals to funnel through, reaching the highway and then transporting drugs or bodies throughout the country.

    He added that once the people or drugs are smuggled in, they can go anywhere inside the United States, sometimes as far as Canada.

    “For us, effectively, I-8 … becomes the new border and even the cartels will tell you that’s their goal line because once they get there, they’re shooting west or they’re shooting east and then they’re on a main interstate right into downtown Phoenix … we become the kickoff point for that,” the Sheriff said.

    “These people and these drugs are not coming here to Pinal County to stay. This is a transport location. This is a spot they get through to get to their final destination and they’re being sent all over the country.”

    Tyler Durden
    Tue, 03/09/2021 – 22:05

  • OECD Believes Biden Stimulus Will Boost World GDP 
    OECD Believes Biden Stimulus Will Boost World GDP 

    A global economic recovery is coming in hotter and faster than previously anticipated by the OECD as President Biden’s $1.9 trillion stimulus program will boost not just the domestic economy but the world. 

    The Paris-based organization upgraded its outlook for global growth on Tuesday in a note titled “The need for speed: faster vaccine rollout critical to stronger recovery,” where it explains global output could surge above pre-pandemic levels by the second half of 2021 as vaccine rollouts and stimulus aid the recovery but warned of unevenness. In Europe, measures to boost output will result in slower growth, with the OECD lowering France and Italy’s outlook this year. It also warned accommodative policies should not be prematurely tightened. 

    OECD estimates global GDP growth will print around 5.6% this year, an upward revision of more than one percentage point since its December 2020 report.

    Laurence Boone, the OECD’s chief economist, told the Financial Times that the stimulus bill – known as the American Rescue Plan – will add one percentage point to global economic growth in 2021.

    Source: Bloomberg 

    There are consequences to governments and monetary authorities across the planet printing like there was no tomorrow – that is – a sharp rise in inflation expectations are putting pressure on central banks to adopt some form of the yield curve control to cap the long end of the curve. It has also added to a violent shift from growth to value, where the once favored tech stocks have lost their luster, such as TSLA, NFLX, and AMZN, as investors pivot to value companies like XOM. 

    Boone doesn’t believe the stimulus package will increase domestic inflation to dangerous levels because “there is a lot of slack in US labor markets,” she said.

    “The amazing fiscal support everywhere means that we have preserved the economic fabric across OECD countries. Even in emerging markets, we’ve seen amazing policy support,” Boone said.

    The upbeat US outlook, only made possible by endless money printing, has side effects. Morgan Stanley’s Mike Wilson pointed out another round of stimulus ontop of vaccine rollouts and reopening increase inflation expectations and “put pressure on valuations, especially for the most expensive stocks that had reached nosebleed valuations.”

    Wilson said, “most portfolios are positioned” and “overexposed to growth stocks and either short or underweight the value areas.” With Biden’s monstrous fiscal stimulus, the new value regime in town will generate a “portfolio disruption” causing a “net negative effect on the major averages, led by the Nasdaq.” 

    He notes, “Markets lead the Fed, not the other way around, and we are now at that moment of recognition,” adding that, “the bull market continues to be under the hood, with value and cyclicals leading the way. Growth stocks can rejoin the party once the valuation correction and repositioning is finished.”

    So in an era where MMT, or Magic Money Theory, is being unleashed by the governments and central banks to supercharge the domestic and global economy, perhaps the lesson to be learned is to stay away from the sinking ARKK. 

    Tyler Durden
    Tue, 03/09/2021 – 21:45

  • National Guard DC Deployment To Last Two More Months
    National Guard DC Deployment To Last Two More Months

    About half of the National Guardsmen deployed in Washington DC will remain at the US Capitol through May 23, the Pentagon announced Thursday evening.

    At the direction of Defense Secretary and Raytheon board member what’s his face Lloyd Austin, approximately 2,300 troops will remain stationed more than two months beyond their scheduled withdrawal scheduled for this week. There are approximately 5,100 Guardsmen at the Capitol at present.

    “This decision was made after a thorough review of the request and after close consideration of its potential impact on readiness,” said Pentagon spox John Kirby in a statement reported by The Hill.

    As part of the protracted deployment, Pentagon officials will “work with the U.S. Capitol Police to incrementally reduce the National Guard footprint as conditions allow,” said Kirby, adding “We thank the National Guard for its support throughout this mission, as well as for its significant efforts across the nation in combating the COVID-19 pandemic.”

    Blue Anon?

    One may wonder why the National Guard and razor-wire fences have become part of Washington’s ambiance. The answer, in part, is due to the belief in a left-wing conspiracy theory that Trump supporters would swarm the Capitol on March 4, when – as the legend has it, Trump would secretly be re-inaugurated on the historical anniversary of pre-1933 inaugurations before it was moved to January 20th.

    Leftists who believe in such theories – such as the Russia Hoax, Jussie Smolett’s 2am footlong craving, or that Justice Brett Kavanaugh was running a gang rape operation in college – are known as “Blue Anons,” who traffic in mainstreamed fantasies about conservatives gone wild.

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    As the Washington Post noted, March 4 came and went without much fanfare.

    When asked what the new threat is requiring the National Guard’s presence, Kirby demurred – saying “The Guard presence on the Hill, while certainly there to address a requirement that is based on law enforcement’s concerns, is also there to help bolster and support the Capitol Police and their capabilities, which may not be at the level where it needs to be given the fact that we’re in sort of a new environment in this country,” adding “So it’s not just about a threat assessment. It’s about assisting and supporting capabilities that the Capitol Police may now lack and may need to look at improving on their own.”

    Quick reaction force?

    After a Democrat-appointed “task force” was established to assess threats in DC, Army Lt. Gen. (Ret.) Russel L. Honoré told House Speaker Nancy Pelosi that a “quick reaction force” be formed and placed on standby, because the city is “a high-value target for foreign terrorists or domestic extremists, yet it has no dedicated QRF for response to crises.”

    “The USCP relies on augmentation from other civilian law enforcement agencies for emergency support, but we recommend establishment of a robust, dedicated QRF, not only for the USCP, but to serve the nation’s capital writ large,” the recommendation continues.

    Which begs the question; How ever did DC get by all this time without one?

    Tyler Durden
    Tue, 03/09/2021 – 21:25

  • "This Was A Bloodbath" – Liberal Journalists Outraged After Huffington Post Fires 1/3rd Of Its Staff
    “This Was A Bloodbath” – Liberal Journalists Outraged After Huffington Post Fires 1/3rd Of Its Staff

    Just months after it was acquired by Buzzfeed in a fire sale, the Huffington Post – the once-pioneering Internet media property – has elicited an outpouring of criticism from the blue-check crowd after abruptly firing nearly 50 reporters, roughly one-third of the site’s staff.

    News of the layoffs first emerged on Twitter, as dozens of newly-fired journos tweeted about their misfortune, but was soon picked up by Defector, the cooperatively-owned media property started by former staff writers from Deadspin.

    According to Defector, BuzzFeed founder Jonah Peretti announced Tuesday during an all-hands meeting that 47 HuffPo staffers in the US, including eight managers, would be losing their jobs in order to “drive long-term sustainability.” Rival journos slamed Peretti, accusing him of traumatizing the laid-off journalists by forcing them to repeatedly refresh their inbox to see if they had received one of the dreaded pink slips. Anybody who didn’t receive a notice by 1300ET was said to be “safe”.

    As if this wasn’t undignified enough, Peretti reportedly set the password for the mass-layoff meeting to “spr!ngisH3r3,” an innocuous message that contrasted sharply with the situation as hand. One member of the Buzzfeed union described the firings as a “bloodbath”.

    “This is a bloodbath,” a HuffPost staffer and union member told Defector. “It’s worse than the worst-case scenario for what any of us thought we would see when we got this announcement a couple hours ago. And the fucked-up way that they announced this notwithstanding, this is a just bloodbath for an award-winning international newsroom full of absolutely stellar journalists who didn’t deserve this.” “The initial reaction is I can’t believe what little chance we were given to show what we can do to help this company,” the staffer said.

    Some of the reporters and their allies recounted the firing in terms that one might reasonably describe as “melodramatic.”

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    While trying to explain the circumstances surrounding the told staffers that the newly combined company’s losses had exceeded $20MM last year, and that the company was on track to repeat that dismal performance without some kind of intervention.

    Peretti, who laid off nearly 70 percent of BuzzFeed’s furloughed staff last summer in order to keep losses under $20 million, said during today’s meeting that the company’s losses exceeded $20 million.

    “The loss of last year exceeded $20 million and would be similar this year without intervention,” Peretti said. “And BuzzFeed is a profitable company, but we’re not that profitable, and we don’t have the resources to support another two years of losses.”

    Another blue-check reporter published a complete accounting of all the reporters who were laid off, along with the beats they covered.

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    While these tweets are obviously well-intentioned, another twitter personality pointed out that sad reality that there simply aren’t any media jobs right now – at least, not for reporters who specialize in covering “culture”, “lifestyle”, “entertainment”, “violence against women” and “misinformation”, which were just a handful of the beats that were eliminated at HuffPo.

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    Others attacked Peretti and Buzzfeed-HuffPo for failing to be more sensitive to the plight of the laid-off reporters.

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    While some couldn’t help but find humor in it all.

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    But in all honesty, these reporters should have been able to read the writing on the wall. Although it was once a pioneering media organization, the Huffington Post’s best days are long behind it: the website’s traffic has shriveled in recent years to a mere fraction of what it once was, as round after round of devastating cuts thinned its staff.

    Perhaps now it will get another chance at life by mimicking Buzzfeed’s strategy of having its most popular pieces written by high school students working for free.

    Tyler Durden
    Tue, 03/09/2021 – 21:05

  • The V-Shaped Recovery Never Happened
    The V-Shaped Recovery Never Happened

    Authored by Ryan McMaken via The Mises Institute,

    In a display of unconvincing enthusiasm, NBC reported Friday that payroll employment “surged” in February. Specifically, total nonfarm payrolls (seasonally adjusted) grew 379,000, month-over-month which was above the expected increase of 210,000.

    That might sound great to some, but a closer look suggests jobs growth is quite a bit more sedate than the media narrative suggests. Moreover, a look at the job growth situation in recent months is a helpful reminder that the “V-shaped recovery” we were promised last spring never happened. 

    Some may remember all that talk about a V-shaped recovery last year. That was back when we were being assured that “two weeks” —or maybe two months— to “slow the spread” of covid-19 would pay countless dividends, because then lockdowns and forced business closures would somehow miraculously “beat back” the disease and then employment and the economy would come roaring back, the Fed could end its stimulus programs, and everything would be fine.

    Back in June, CNBC announced “The recovery from the coronavirus sure looks V-shaped” and pointed to record job growth coming out of the initial collapse in employment that occurred in March and April.

    But then the good news basically stopped, at least as far as employment was concerned.

    For example, while February’s month-over-month job growth might look impressive, the US remains a long, long way from where total employment was this time last year. In February of last year, before the effects of lockdowns were beginning to be felt, total employment topped 152 million in the US. After this February’s “surge” in employment, total employment was at 143 million, or still down 9 million. In other words, total employment is still where it was back in 2015.

    Yes, the US has regained 13 million jobs since the bottom of the crisis back in April 2020. But as we can see in the first graph, total employment has gone sideways since last November, and is only up by 200,000 over the past four months. That’s not exactly a “surge” of anything. And it’s definitely not anything resembling a “v-shaped” recovery. It looks more like a very week version of a “check mark-shaped recovery” that some predicted last year. Except the tail end of this check mark has so far been nearly flat.

    And then there is the unemployment insurance totals. New unemployment insurance claims have hovered around between 700,000 and 800,000, every week, for the past five months. There’s no evidence of any downward trend here, and the V-shaped recover turned into a long slog past the initial anemic “recovery” that took place last summer.

    Continuing unemployment claims are slowly lessening, however. Since the beginning of the calendar year, continuing claims have fallen from 5.1 million to 4.2 million.

    In both cases, totals remain well within recessionary territory. Back during the Great Recession, for example, continuing claims peaked at 6.6 million. Claims totaled about 1.7 million in 2020 before the recession began.

    Unemployment has also remained stubbornly high among those making claims under the Pandemic Unemployment Assistance program. In early January, total continuing claims under the PUA was at 8.3 million, continuing a long slow trend downward. By early March, continuing claims had only fallen to 7.3 million.

    That’s progress, but combined with regular unemployment insurance, it means there are still more than ten million Americans receiving some form of unemployment insurance, which hardly suggests a robust recovery.

    The unemployment rate remains troublingly high as well. The headline unemployment rate for February was reported as falling to 6.2 percent. That’s certainly an improvement from April 2020’s peak rate of 14.8 percent.

    But as is so often the case, the headline rate masks a more complex reality surrounding the unemployment rate.

    Although the official rate is 6.2 percent, the Washington Post’s Heather Long notes that the Minnesota Fed’s Neel Kashkari admitted “the true unemployment rate is around 9.5%”

    Why the gap? It is a result of several factors, including falling response rates to the Labor Department’s employment surveys, the fact many have simply stopped looking for work, and ambiguities in the data over whether or not someone is only temporarily unemployed.

    In other words, the official unemployment calculation excludes a great many people who would like to have jobs, but who gave up and stopped looking for work. Many others are only technically “temporarily” unemployed but in practice are jobless. The official data says many of these people are “on leave.”

    Fed Chairman Jerome Powell has also admitted that the unemployment rate was likely close to 10 percent in January. Not surprisingly, Kashkari predict no “liftoff” for the economy until 2022. 

    Taking all this together, it’s pretty clear the United States is still very much in the midst of a jobs recession. 

    Yet, CNBC tells us that the economy is “on fire” because GDP totals may surge in the upcoming first quarter data.  “Economic growth in the first quarter could hit 10%,” CNBC triumphantly proclaims, claiming the economy has “roared back” and is set to defy even the rosiest expectation.

    But unless something changes big time in the jobs situation, we’ll have to start looking at GDP the way we look at stock prices: something that reflects a lot of optimism and growth in some sectors of the economy but which has very little to do with the personal finances and job prospects of millions of ordinary Americans.  

    Tyler Durden
    Tue, 03/09/2021 – 20:45

  • Hackers Infiltrate Thousands Of Security Cameras Inside Jails, Hospitals & Tesla
    Hackers Infiltrate Thousands Of Security Cameras Inside Jails, Hospitals & Tesla

    In the latest embarrassing hacking incident to affect American technology giants, a team of hackers has stolen what Bloomberg described as a “massive trove of security-camera data collected by Silicon Valley startup Verkada” in an effort to make a point about the dangers and drawbacks of mass surveillance.

    Using administrator credentials purportedly found on the public Internet, the hackers gained access to live feeds tied to some 150K security cameras located inside hospitals, companies, police departments, prisons, schools and – bizarrely – Tesla HQ. According to the report, footage belonging to Tesla and software company Cloudflare were stolen in the hack. The hackers were also able to steal footage taken from inside women’s health clinics, psychiatric hospitals, along with footage from inside Verkada’s offices.

    The cameras administered by Verkada, which bills itself as an “enterprise security camera” maker, use facial-recognition technology to identify people. And the hackers who stole the trove of data say they have access to “the full video archive” of Verkada’s customers. In theory, this could give the hackers a panopticon-like view of hundreds of thousands – perhaps millions – of people.

    The group behind the breach bills itself as an “international hacker collective” and said it stole the footage to help make a point about the dangers and pervasiveness of video surveillance. Perhaps to help emphasize this point, the group shared some particularly sensitive footage with Bloomberg, including…

    • Footage captured inside Florida hospital Halifax Health, which showed what appeared to be eight hospital staffers tackling a man and pinning him to a bed. Halifax Health is featured on Verkada’s website in a case study entitled: “How a Florida Healthcare Provider Easily Updated and Deployed a Scalable HIPAA Compliant Security System.”

    • Video shot inside a Tesla warehouse in Shanghai showing workers on an assembly line. The hackers said they obtained access to 222 cameras in Tesla factories and warehouses.

    • A video showing officers inside a police station in Stoughton, Mass., questioning a man in handcuffs.

    • Security camera footage taken from inside Sandy Hook Elementary School in Newtown, Conn., where gunman Adam Lanza killed more than 20 people in 2012.

    • Also available to the hackers were 330 security cameras inside the Madison County Jail in Huntsville, Alabama.

    • And cameras from multiple locations of the luxury gym chain Equinox.

    • Hackers were able to download the entire list of thousands of Verkada customers, as well as the company’s balance sheet, which lists assets and liabilities. As a closely held company, Verkada does not publish its financial statements.

    Tillie Kottmann, one of the hackers who claimed credit for breaching the San Mateo, California-based Verkada, is acting as a sort of representative for the collective. Kottmann, who uses they/them pronouns, previously claimed credit for hacking chipmaker Intel and carmaker Nissan They reportedly told Bloomberg their reasons for the hack were “lots of curiosity, fighting for freedom of information and against intellectual property, a huge dose of anti-capitalism, a hint of anarchism – and it’s also just too much fun not to do it.”

    Kottmann said the hackers were able to obtain “root” access to the cameras, meaning they could use the cameras to execute their own code. In some instances, this allowed them to pivot and obtain access to the broader corporate network of Verkada’s customers, or hijack the cameras and use them as a platform to launch future hacks. Obtaining this degree of access to the camera didn’t require any additional hacking, as this is a built-in feature. The hackers’ methods were unsophisticated: they gained access to Verkada through a “Super Admin” account, allowing them to peer into the cameras of all of its customers. Kottmann says they found a user name and password for an administrator account publicly exposed on the internet.

    A rep for Verkada said the company had disabled all internal administrator controls to prevent any further unauthorized access. The individual added that “Our internal security team and external security firm are investigating the scale and scope of this potential issue.”

    Another source from inside Verkada told Bloomberg that the company’s chief information security officer, an internal team and an external security firm are investigating the incident. The company is working to notify customers and set up a support line to address questions, said the person, who requested anonymity to discuss an ongoing investigation. This facial-recognition technology is used to track staff and inmates inside prisons in the US, with many of the cameras responsible for this being hidden inside vents and other places.

    Verkada offers its clients a feature called “People Analytics” which allows a customer to “search and filter based on many different attributes, including gender traits, clothing color, and even a person’s face,” according to a Verkada blog post. While hardly a household name, in October 2020, Verkada attracted some press attention after it fired three employees who reportedly used its cameras to take pictures of female colleagues inside the Verkada office and make sexually explicit jokes about them. Verkada CEO Filip Kaliszan said in a statement to Vice at the time that the company had “terminated the three individuals who instigated this incident, engaged in egregious behavior targeting coworkers, or neglected to report the behavior despite their obligations as managers.”

    This is just the latest hack-related news to rattle the US, as the business press has been intensely covering another breach where hackers working for the Chinese government managed to exploit flaws in Microsoft’s outlook email software to gain access to potentially thousands of high-value targets.

    Tyler Durden
    Tue, 03/09/2021 – 20:25

  • Scotia Sells COMEX NY Vault In Slow Motion Exit From Gold, Silver Markets
    Scotia Sells COMEX NY Vault In Slow Motion Exit From Gold, Silver Markets

    Submitted by Ronan Manly, BullionStar.com

    On Monday 1 March, CME Group, which runs COMEX, made a short announcement saying that long time COMEX approved gold and silver vault operator, Bank of Nova Scotia was withdrawing its New York vault from being COMEX approved and that the withdrawal was ‘effective immediately’.

    The full text of the release, titled “Withdrawal of Regularity for Gold, Silver, Platinum, and Palladium” is as follows, and can also be seen at this link here:

    “Notice herby is given that the New York Mercantile Exchange, Inc. (“NYMEX”) and Commodity Exchange, Inc. (“COMEX”) (collectively, the “Exchanges”) received a request from The Bank of Nova Scotia to voluntarily withdraw their approved gold, silver, platinum, and palladium regularity at their Jamaica, NY facility. Manfra, Tordella & Brookes, Inc. will assume responsibility for the registered and eligible material at this facility effective immediately.

    This withdrawal is effective immediately.”

    Beside JFK Airport

    For those who don’t know, the Scotia vault, owned by Scotia Mocatta Depository (SMD), is located right beside JFK Airport, at “International Airport Center, 230-59 International Airport Center Boulevard, Building C, Rockaway Blvd, Jamaica, New York 11413”, the same location as the Agility Logistics center, and can be seen here and here.

    Scotia’s vault building beside JFK airport, New York
    Scotia’s vault building beside JFK airport, New York

    Scotia moved to this facility beside JFK Airport in 2006 from a vault facility that it had been using since late 2001 under 26 Broadway in Manhattan, an old Rockefeller building. That vault facility under 26 Broadway was the former Iron Mountain Depository Corporation (IMD) vault which Scotia had acquired when The Bank of Nova Scotia took over IMD in 1997.

    However, prior to September 2001, Scotia’s COMEX approved precious metals vault had been in a sub-basement under 4 World Trade Centre, which it had taken over from Swiss Bank Corporation in the 1990s. Prior to the WTC implosions, WTC 4 was the home of the COMEX and NYMEX trading floors, as well as the trading floors of the New York Board of Trade (NYBOT), the Coffee, Sugar and Cocoa Exchange (CSCE) and the New York Cotton Exchange (NYCE)

    After 4 World Trade Centre collapsed on September 11 2001 following the WTC 1 and WTC 2 (and WTC 7) buildings’ explosions and implosions (during which notably COMEX gold was unbelievably being trucked out of tunnels at the same time), Scotia moved its COMEX approved vault back to the 26 Broadway vault in late 2001, and remained there until 2006.

    Manfra, Tordella, and Brookes, also known as MTB, is a New York based bullion dealer which also runs a COMEX approved precious metals vault in Manhattan, in the International Gem Tower building at 50 West 47th Street, in midtown Manhattan. Since 2000, MTB has been part of the Swiss MKS PAMP group.

    On the same day, 1 March 2021, that Scotia Mocatta withdrew its vault from being COMEX approved, MTB, and it parent company, the Swiss based MKS PAMP group, both made announcements on their websites that MTB had:

    “completed the strategic acquisition of a leading North American financial institution’s COMEX (CME) approved depository and logistics center” including a “world class 15,000 square foot secure facility” that will give them “proximity to  major international and domestic logistics hubs [beside JFK airport], additional vaulting capacity [Scotia’s vaults], and experienced staff”.

    The acquisition, said MTB / MKS PAMP, helps offer “enhanced depository and fulfillment services to COMEX warrant holders, financial institutions, industrial, and bullion clients”.

    See the MKS PAMP announcement here, and the identical MTB announcement here.

    In effect, without stating the name of Scotia, MTB / MKS PAMP confirmed that MTB has taken over the Scotia Mocatta COMEX approved vault located in International Airport Center, 230-59, Building C, beside JFK airport.

    Scotia Metal Transfers to MTB

    Anyone who regularly looks at the COMEX daily “Warehouse and Depository Stocks” reports for gold, silver, platinum and palladium on the CME Group (COMEX) website will have also noticed that not only did MTB take over Scotia Mocatta’s New York COMEX approved vault in the first week of March, but, MTB also took over the custody of all the COMEX registered and COMEX eligible gold, silver, platinum and palladium stock and inventory that were being stored in Scotia’s COMEX vault beside JFK.

    This was evident from the COMEX gold, silver and platinum / palladium stock reports for Report Date Wednesday 3 March (Activity Date Tuesday 2 March), where the listing and metal holdings under the “THE BANK OF NOVA SCOTIA” suddenly disappeared, and the listing and metal holdings under “MANFRA, TORDELLA & BROOKES, INC” increased by the amount of metal that had been reported previously under Scotia.

    As a reminder, in COMEX parlance, ‘Registered’ precious metal bars have vault warrants attached and can be used to settle COMEX futures contracts. ‘Eligible’ metal is just any metal that happens to be in a COMEX approved vault which is in the form of a precious metals bar which is acceptable for COMEX delivery. Eligible metal does not have to have anything to do with COMEX trading, and a lot of the time doesn’t have anything to do with COMEX trading.

    The transfers from Scotia to MTB were most pronounced in silver, where a huge 32,301.490.91 ozs (or 1004 tonnes) of silver which had been in the registered category under Scotia came into the registered category of MTB. Prior to the transfer, MTB was reporting only 1,233,649.98 ozs in registered, so the transfer from Scotia gave MTB a new Registered total of 33,535,140.89 ozs, or 27 times more silver than it previously held. This was the highest Registered silver holding of any COMEX approved vault operator, even ahead of JP Morgan’s claimed 32.5 million ozs holding.

    By 3 March, MTB had 668,437 ozs of silver in eligible and 32.26 million ozs of silver in registered for a total of 33.93 millon ozs.

    Scotia Mocatta’s registered silver inventories of 32 million, just before they were transferred to MTB, March 2021. Source: www.GoldChartsRUs.com

    By 4 March MTB received in another 579,290 ozs into eligible, saw a massive 4.48 million move from registered to eligible (someone doesn’t want their silver under warrant), and had a total of 28,782,469 ozs in Registered, and 5,730,255 ozs in eligible, for a total of 34.51 million ozs overall. The Scotia transfers now put the MTB vaults in 2nd position of Registered COMEX silver holdings (just behind JP Morgan) and in 4th position of total COMEX silver holdings behind JP Morgan, Brinks and CNT.

    In gold, prior to the transfers, MTB had about 1.265 million ozs of gold in the registered category, with 20,000 in eligible, while Scotia had about 1.15 million ozs in registered and a small amount in eligible. Following the transfers, MTB now has about 2.4 million ozs in registered and about 60,000 ozs in eligible. So the MTB gold listing on the COMEX gold inventory report has increased by about 87%.

    MTB registered gold inventories jump in early March 2021 after transfers from Scotia Mocatta. Source: www.GoldChartsRUs.com

    Platinum and palladium in the Scotia vault has also been added to the MTB totals and the latest figures for MTB now have a total of 112,378 ozs of platinum, nearly all of which is in registered, and 9,676 ozs of palladium (all in registered).

    You can see the most recent COMEX inventory gold, silver and platinum / palladium holdings in Excel links on a COMEX webpage here.

    An important point to note here is that the gold, silver, platinum and palladium that were in Scotia’s Queen’s vault beside JFK airport are probably still in the Scotia vault (with the vault now owned by MTB). It would have been logistically illogical to move all the metal in the Scotia vault, to the MTB vault in midtown Manhattan.

    So basically, it looks to be a case of the COMEX reports having just reclassified all metal that was held in the Scotia vault and now reporting it under “Manfra, Tordella, and Brookes” (MTB) along with the metal in MTB’s original vault in Manhattan. This means that it will not be possible to know how much of the reported metal listed under MTB is in Manhattan, and how much is in the vault beside JFK airport.

    Scotia Mocatta – A Slow Motion Car Crash

    For those who may be having déjà vu about Scotia Mocatta previously withdrawing from the precious metals markets, you would be forgiven, as admittedly, Scotia’s withdrawal has been going on for what seems like years now, and can only be described as a slow motion car crash. For financial reporters in Reuters and Bloomberg, Scotia exiting the gold and silver markets is the “gift that keeps on giving”, year after year, because it never seem to end. This is because, like an octopus, Scotia has been intertwined into precious metals markets all around the world for decades and decades, from the London gold and silver markets to New York (COMEX) to Toronto (its Headquarters) and to as far afield as India and Dubai and China.

    As you can see from its vaulting operation, Scotia was one of the key players in COMEX precious metals for a long long time. But even following the New York vault sale, Scotia is still involved with COMEX, with Scotia Capital (USA) Inc still being a clearing firm on COMEX as can be seen on the clearing member firm list here, and also on the COMEX delivery report (Issues and Stops) here.

    But that’s only part of the larger Scotia picture. Because Scotia continues also to be one of the lynchpins in the London gold and silver markets along with the likes of HSBC and JP Morgan, and has a long history of running the LBMA along with HSBC and JP Morgan.

    In London Scotia, was one of the 3 banks that ran the cartel like London Silver Fixing (along with HSBC and Deutsche Bank), and the London Gold Fixing (along with Barclays, HSBC, SocGen and Deutsche Bank). This bullion bank cartel used the private companies London Gold Market Fixing Limited and London Silver Market Fixing Limited to run those daily benchmark auctions. When in 2014 and 2015 the old London Gold and Silver fixes were buried by the London Bullion Market Association (LBMA) and resurrected in the smoke and mirrors replacements of the LBMA Gold Price and the LBMA Silver Price, Scotia was one of the first direct participants in of each of the new fixes.

    The trigger for Scotia’s withdraw from the precious metals markets goes back all the way to early 2015 (or even earlier) when the US Department of Justice (DoJ) announced that it was investigating whether the Bank of Nova Scotia and other investment banks were manipulating gold and silver prices. Spoiler: They were.

    While this isn’t an article about Scotia’s criminal activities in manipulating gold and silver prices, a quick recap is in order so as to give some flavor as to who we are dealing with when we refer to the Scotia on the COMEX and in the LBMA.

    According to Bloomberg in February 2015:

    “At least 10 banks, including Bank of Nova Scotia, Barclays Plc, JPMorgan Chase & Co., and Deutsche Bank AG are being probed by the Justice Department’s antitrust division, said one the people, who asked not to be named because the matter is confidential.”

    Soon after that, investors filed class action suits in New York courts against London Gold Market Fixing Limited and London Silver Market Fixing Limited, of which Scotia was one of the defendants. See a 2016 article by Allan Flynn for some background – “How to Trigger a Silver Avalanche by a Pebble: “Smash(ed) it Good”.

    By June 2018, Reuters was reporting that Scotia was to “scrap half its metals business”.

    “Scotia pulling back from metals financing

    Bank is largest lender to precious metals industry

    Cuts heaviest in Europe, no decision yet on Asian business

    Scotia still trying to sell parts of metals business”  

    “Scotia’s pullback comes after a strategic review of Mocatta began in 2016 following a string of lawsuits related to the manipulation of gold and silver benchmarks and dissatisfaction with performance.

    It also follows a failed attempt to sell the business.”

    By April 2020, that ‘half’ of the Scotia precious metals business had turned into a full 100% sale, with Reuters reporting that “Scotiabank to close its metals business”,

    “’Scotia had a global call with all its metals staff and said it was shutting down its metals business,’ said one of the sources.

    ‘The plan is to unwind the metals business,’ said another.”

    But even then in April 2020, Scotia was still a market making member of the LBMA, and a direct participant in the LBMA Gold Price and LBMA Silver Price auctions, and a member of the  London bullion bank cartel unallocated gold and silver clearing company, the London Precious Metals Clearing Limited (LPMCL).

    Scotia’s Gold and Silver Price Manipulation

    Fast forward to August 2020, and the US Department of Justice announced that Bank of Nova Scotia (Scotiabank) had entered into a resolution with the DoJ: “to resolve criminal charges related to a price manipulation scheme involving thousands of episodes of unlawful trading activity by four traders in the precious metals futures contracts markets”, and to pay more than more than US$ 60 million in criminal fines. A flavor of the illegal activities of Scotia in that case is as follows:

    “’For over eight years, Scotiabank traders placed thousands of orders for precious metals futures contracts in an attempt to manipulate prices for their own and the bank’s benefit and to deceive other market participants,’ said Chief Robert A. Zink of the Justice Department’s Criminal Division, Fraud Section.”

    “’Today, Scotiabank has admitted to their role in a massive price manipulation scheme aimed at falsely manufacturing the prices of precious metals futures contracts to serve the bank’s best interests,’ said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. ‘The bank’s actions were designed to lead others to trade in ways they never would have without what was believed to be legitimate market activity.’”

    Now fast forward to 1 March 2021, the same day as the COMEX and MTB / MKS PAMP vault announcements, and Wells Fargo announces that “it has expanded its precious metals trading business, filling gaps in the market left by the withdrawal of Bank of Nova Scotia (Scotiabank)”.

    But not so fast. Did anyone tell Wells Fargo that as of 08 March 2021, Scotia is still a market making member of the LBMA in gold and silver, still a member of the fractionally backed paper gold and silver trading engine, the London Precious Metals Clearing Limited (LPMCL), and still involved in LBMA precious metals vaulting in London even though it doesn’t have its own vault:

    “those clearing members without their own vault operations – Scotiabank and UBS – utilise their accounts with one of the LBMA custodians or the Bank of England (BoE)”

    And that’s only gold and silver, In addition, Scotia is still a marketing making member of the London Platinum and Palladium Market (LPPM).

    How’s that for exiting the precious metals markets?

    This will gives the likes of Reuters’ Peter Hobson and Bloomberg’s Eddie van der Walt plenty of future material to write articles such as “Scotia Mocatta still withdrawing from the precious metals markets (Part 6)“.

    It’s as if Scotia hasn’t really exited the precious metals markets at all. Just discreetly sold its precious metals vault in New York to another party and quietly slipped out the COMEX door, while transferring over 30 million ozs of silver to MTB / MKS PAMP, as the #SilverSqueeze intensifies.

    This article was originally published on the BullionStar.com website under the same title “Scotia Sells its COMEX NY Vault, in Slow Motion Exit from Gold and Silver Markets”

    Tyler Durden
    Tue, 03/09/2021 – 20:05

  • Twitter Sues Texas AG; Claims He Retaliated Against Company For Banning Trump
    Twitter Sues Texas AG; Claims He Retaliated Against Company For Banning Trump

    Twitter has filed a lawsuit against Texas Attorney General Ken Paxton, claiming that he used his office to retaliate against the social media giant for banning former President Donald Trump following the Jan. 6 riot at the US Capitol, according to the Associated Press.

    Following Trump’s banishment by several left-leaning companies, Paxton announced that his office was investigating Twitter, Apple, Google and Amazon for what he called “the seemingly coordinated de-platforming of the President.” He made several document requests related to their content moderation policies, as well as internal communications.

    Twitter demands that the court effectively halt Paxton’s investigation.

    “Paxton made clear that he will use the full weight of his office, including his expansive investigatory powers, to retaliate against Twitter for having made editorial decisions with which he disagrees,” wrote Twitter’s lawyers in the suit filed in a Northern California court.

    Twitter’s counterpunch comes as states, in addition to federal lawmakers and governments outside the U.S., are cracking down on tech companies they see as having amassed too much power in the past decade. This includes antitrust and anti-monopoly regulation, internet privacy laws as well as attempts to regulate how platforms like Twitter, Facebook and others moderate their sites.

    In December, Paxton led 10 Republican attorneys general in suing Google for allegedly running an illegal digital-advertising monopoly in cahoots with Facebook.

    GOP politicians in roughly two dozen states have also introduced bills that would allow for civil lawsuits against platforms for what they call the “censorship” of posts. Almost always, this means what they view as the censorship of conservative or Christian religious viewpoints. –Associated Press

    Paxton cited the First Amendment while launching his investigation, claiming that tech companies’ deplatforming of Trump “chills free speech” and “wholly silences” his detractors.

    Twitter, however, does not have to abide by the First Amendment as they are a private firm with the right to silence users it disagrees with. Trump and other world leaders have been given broad exemptions, however the company said Trump’s tweets leading up to Jan. 6 constituted glorification of violence.

    Tyler Durden
    Tue, 03/09/2021 – 19:45

  • Democrat Panel Recommends Permanent Military "Quick Reaction Force" For Capitol
    Democrat Panel Recommends Permanent Military “Quick Reaction Force” For Capitol

    Authored by Steve Watson via Summit News,

    A Democrat appointed ‘task force’ has issued a report recommending a permanent military security force be stationed around Capitol Hill.

    The task force, headed up by Army Lt. Gen. (Ret.) Russel L. Honoré, reported back to Nancy Pelosi, suggesting that a “quick reaction force” be formed and put on standby in addition to Capitol police.

    The report notes that DC is “a high-value target for foreign terrorists or domestic extremists, yet it has no dedicated QRF for response to crises.”

    It adds, “The USCP relies on augmentation from other civilian law enforcement agencies for emergency support, but we recommend establishment of a robust, dedicated QRF, not only for the USCP, but to serve the nation’s capital writ large.”

    Elsewhere in the report, it is stressed the the National Guard presence at the Capitol should only be a temporary measure and “not a permanent solution.”

    Specifically, the report suggests three forms of occupation in DC.

    Firstly, “a QRF from existing federal law enforcement entities with appropriate legal authorities and appropriations to staff, train and equip such a force.”

    Secondly, “a QRF under the command of the D.C. National Guard. This could be done by mobilizing military police from Guard elements across the U.S. on rotations of three to six months.”

    Thirdly, “a QRF that permanently resides within the D.C. Guard by reestablishing a military police battalion and staffing it with Active Guard Reserve troops.”

    In all three scenarios, a permanent military style force would reside in the nation’s capitol.

    As conservatives such as Tucker Carlson have warned, the troops are not going away, they are there to “prop up the regime”.

    Watch the latest video at foxnews.com

    Since January 6th, phantom threats, including the likes of “QAnon Inauguration Day”, have been continually touted to maintain the martial law style lockdown of Capitol Hill.

    Tyler Durden
    Tue, 03/09/2021 – 19:25

  • Japan's Government To Ban Overseas Spectators From Tokyo Olympics
    Japan’s Government To Ban Overseas Spectators From Tokyo Olympics

    After a week ago it was first revealed that the Tokyo 2020 games organizing committee (to take place this summer, 2021 in late July to August.8) was seriously mulling barring all foreign spectators from attending the games on pandemic fears of a ‘superspreader’ event, Japan has confirmed that it will keep all overseas spectators away in a move expected to cause a hundreds of millions of dollars loss – possibly into billions – in revenue. 

    Reuters reports on Tuesday, “Japan has decided to stage this summer’s Tokyo Olympics and Paralympics without overseas spectators due to public concern about COVID-19, Kyodo news agency said on Tuesday, citing officials with knowledge of the matter.”

    What a spectatorless games will look like. Image via Kyodo 

    The Japanese public has been cited since reports first emerged last week as overwhelmingly in favor of keeping foreign crowds from descending on Tokyo for fear of new COVID-19 outbreaks, and given the new variants that have health officials worried. This despite the global vaccination campaign making great strides across the various populations in countries whose citizens would be likely to travel to the games, especially by the games’ start on July 23.

    Reuters cites recent surveys by a major Japanese publication:

    Most Japanese people do not want international visitors to attend the Games amid fears that a large influx could spark a resurgence of infections, a Yomiuri newspaper poll showed.

    The survey showed 77% of respondents were against allowing foreign fans to attend, versus 18% in favor.

    Some 48% said they were against allowing any spectators into venues and 45% were in favor.

    Kyodo news agency further confirmed that even the opening torch ceremony will be conducted without fans or spectators in the stadium. 

    “The organizing committee has decided it is essential to hold the ceremony in the northeastern prefecture of Fukushima behind closed doors, only permitting participants and invitees to take part in the event, to avoid large crowds forming amid the pandemic,” the report said, quoting the officials.

    Apparently only the final verdict of the Japanese government has been revealed, with the Tokyo 2020 games organizing committee expected to issue its final decision on the matter by the end of March – but it’s something which according to the latest reports looks certain to be on the side of banning spectators. 

    Recently installed president of the Japanese committee Seiko Hashimoto told reporters last week, “We would really like people from around the world to come to a full stadium, but unless we are prepared to accept them and the medical situation in Japan is perfect, it will cause a great deal of trouble also to visitors from overseas.”

    Tyler Durden
    Tue, 03/09/2021 – 19:05

  • Biden Years Ago Called It 'Tyranny' For Just One Man To Decide War
    Biden Years Ago Called It ‘Tyranny’ For Just One Man To Decide War

    Authored by Paul W. Lovinger via AntiWar.com,

    Did Joe Biden read the Democratic platform that he ran under? Elect us and we will “move away from military intervention” in the Middle East. Diplomacy will protect Syrians’ human needs and rights and “find a peaceful resolution for this horrific war.” All the “forever wars” will end.

    Instead, Biden and the military men under his command did what the military is supposed to do: kill and destroy – or, as they prefer to put it, drop “precision-guided munitions” on “targets.” Among targets of the February 25th attack on Syria were at least 22 people.

    ​​​​​​Via Getty images

    Congressional reactions did not follow party lines. Several Democrats objected to the President’s violation of the constitutional war power of Congress. Some of their GOP colleagues praised the bombing, but Senator Rand Paul (R-KY) saw no right to attack a sovereign country. His father, ex-Representative Ron Paul (R-TX), called for Biden’s impeachment.

    Few pay much attention to international laws against aggression, particularly three US treaties prohibiting it. Forcible violation of the territorial rights of one state by another has been considered a war crime since the infamous trials following World War II.

    But everything is good, from what administration spokesmen say. Don’t grieve for the 22. They were all “believed” to be members of “Iran-backed militias” accused of recent rocket attacks on US targets in Iraq. (Rest assured that no children, women, or non-militant men are ever harmed by our clever weapons, only “militants,” “insurgents,” and “terrorists.”)

    The media reported that the raid was designed to “send a message” to Iran. Whatever that message said, it was expensive. You can send one far cheaper by e-mail, phone, fax, or airmail letter. You’d think the cost would concern the budget-minded congressional Republicans, if nothing else does.

    As far as relations with Iran were concerned, the Dems’ platform pledged to call off the race to war; reject the goal of regime change in Tehran; emphasize “diplomacy, de-escalation, and regional dialogue”; and restore the nuclear agreement. If any of those things were in that message, you probably wouldn’t need to send it via bomb.

    Our defense establishment tells us that the aggression was “defensive,” yet also “retaliatory”: We attacked Syria because our forces in Iraq had been attacked, though not by Syria. (Needless to say, our forces had a perfect right to be in Iraq. As California’s Senator S. I. Hayakawa once said about Panama, “We stole it fair and square.”)

    What about the president’s decision to commit an act of war, when Article I, Section 8, of the Constitution reserves that power to Congress?

    According to an aide of the National Security Council, “Biden acted under his constitutional authority to defend US and deter the risk of additional attacks.” (I’m quoting a Bloomberg story by eight writers. It said the aide “commented on condition of anonymity.” I would want to be anonymous too, if I had to dispense stuff like that.) Don’t bother searching through your Constitution for such authority; it’s not there.

    Biden did not lose much time before tending to what the platform called “this horrific war.” The five weeks of abstention compare with 11 weeks into Trump’s term before he bombed Syria. Obama, before him, had waited five years before initiating his bombing of Syrians. Of course Trump and Obama did plenty of killing elsewhere throughout their terms. Biden is just getting started.

    Biden (2021) Should Listen to Biden (1991)

    Thirty years ago, President George H. W. Bush was massing US troops in the Saudi desert, preparing for war with Iraq over its seizure of Kuwait. Bush and his yes-men in the Defense and State Departments contended that the president, as commander-in-chief of the military, had the authority to start a war.

    Joseph R. Biden Jr., chairman of the Senate Judiciary Committee, called a hearing on “The Constitutional Roles of the Congress and the President in Declaring and Waging War.” In an introductory speech, Senator Biden found the Bush view of the war power at odds with the Constitution. The Founders, he said, took great pains to ensure that the new government would differ from that of King George III. The chief difference was how the decision to go to war would be made.

    “In England the king alone could decide to take a nation to war.” Here, the legislature would have that power. “The Constitution’s language says that the war power rests in the Congress…. The Constitution’s founders all understood this to be a key principle of our republic…. Yes, the president is the commander-in-chief….”

    Senator Biden thereupon quoted Alexander Hamilton, who wrote about the (then) proposed Constitution in The Federalist, 69. “The president is to be commander-in-chief of the army and navy… It would amount to nothing more than the supreme command and direction of the military and naval forces as first general and admiral….” His authority would be much inferior to that of the British king, which “extends to the declaring of war and the raising and regulating of fleets and armies” – all of which would be the legislature’s functions under the Constitution.

    “In short,” said the senator, “Congress decides whether to make war, and the president decides how to do so…. We have been told that the congressional debate on war could tie the president’s hands or limit his discretion….. Exactly right. Americans once lived under a system where one man had unfettered choice to decide by himself whether we could go to war or not go to war, and we launched a revolution to free ourselves from the tyranny of such a system.”

    Senator Biden noted that President Bush was claiming that his impending war on Iraq would uphold the rule of law by undoing Iraq’s invasion of Kuwait. The former commented, “If the crisis is really about upholding the law of nations abroad, the President must start by upholding the law at home, and our law begins with the Constitution.”

    Bush backed down and submitted to a congressional vote. It supported the war he wanted. Biden voted “nay.”

    Gullible and Contradictory

    Having opposed Bush Senior’s war on Iraq over the Kuwait seizure, Biden avidly supported the second war on Iraq, started by Bush’s son, George W. It was based on “weapons of mass destruction,” which Bush Jr. falsely claimed that Iraq possessed and would likely give to terrorists.

    A mere few years after his 1991 stance in Congress, Biden avidly supported the neocon push for regime change in Iraq…

    Biden fell for those lies and, as chairman of the Senate Foreign Relations Committee, spoke in favor of a resolution (prepared in the White House) to let Bush decide whether war on Iraq would be warranted. The measure would be unconstitutional, for such a decision was up to Congress to make, not the president, as Biden himself had pointed out 11 years earlier.

    Biden has shown similar gullibility in swallowing disputed allegations of Syrian use of poison gas and Russian “bounties” on lives of US servicemen in Afghanistan. Some US intelligence agents doubt that the bounty tale is true.

    In foreign affairs, Biden is full of contradictions. Nine examples follow… Joe Biden –

    • Opposed one Bush attack on Iraq and supported another.
    • Ran for president on a promise of rejoining the nuclear agreement with Iran that Trump renounced, but hesitates to keep the promise, and now comes that “message.”
    • Condemns the bombing of Yemeni civilians and the murder of Jamal Khashoggi, yet – without congressional permission – commits the US to defend the Saudi monarchy that committed those crimes.
    • Talks of having the US, Europe, and Asia “work together to secure the peace,” while confronting China with US warships provocatively close to its coast.
    • Renews the New Strategic Arms Reduction Treaty with the Russian Federation (New START) for five years, but heightens tensions by anti-Russian rhetoric and sanctions
    • Considers the climate crisis a top concern, yet the world’s single biggest producer of climate-changing gases is the US military, and war intensifies their production.
    • Resolves to work with allies on critical issues, but disregards his own country’s Congress.
    • Has repeatedly paid homage to “the rule of law,” contrary to his positions in favor of lawless actions in Syria, Iraq, and Yugoslavia (Bill Clinton’s 1999 war).
    • Conducts an act of war that is incompatible with the platform he ran under and his own comments about the war power, made to fellow senators 30 years ago.

    Tyler Durden
    Tue, 03/09/2021 – 18:45

  • Morgan Stanley Expects US To Grow Faster Than China In 2021
    Morgan Stanley Expects US To Grow Faster Than China In 2021

    Last Friday, at the start of its latest Five-Year Plenum, aka National People’s Congress, China’s government surprised markets when it announced a paltry 6% growth target for 2021 (which however did not stop if from also revealing a five-year plan and vision for 2035 that aims to expand China’s global footprint as a major technology power).

    That number is a big problem for several reasons, first and foremost of because as Michael Every explained this morning, it means that China’s credit impulse is about to collapse.Overnight, China’s central bank – the PBOC – announced it would keep growth of both money supply and aggregate financing broadly in line with that of nominal GDP. This, as the Rabo strategist said “is **STAGGERINGLY** contractionary given the last 12-month rolling aggregate financing figure was 35% y/y, the series average back to 2004 is 15%, and the most optimistic nominal GDP print one could expect would be 9% – and even that only for 2021, with something far lower further out.”

    As Every concluded, paraphrasing what we warned back in December, “it seems there is going to be an aggressive crackdown on leverage – and growth will follow. And then so will global growth with a lag. And so will the likes of AUD, etc.” This is another way of saying what we showed in December – namely the upcoming rapid slump in China’s credit impulse – also pointing out that virtually every asset in the world will be impacted the slowdown in China’a credit impulse with a lag anywhere from 1 month to 2 years.

    But there is another, even more bizarre, consequence of China’s 6% GDP target: according to the latest, just released US economic forecast from Morgan Stanley, the US will – for the first time ever – grow faster than China in 2021: according to MS chief economist Ellen Zentner, the US “reopening is progressing, the rate of vaccinations is ramping up, and the labor market is gaining momentum.”

    As a result, the investment bank is taking up its 2021 GDP forecast by 0.5% to 8.1% 4Q/4Q (+0.8pp to 7.3%Y).  And while the US may indeed grow faster than China in 2021 as a result of the massive fiscal and monetary stimilus injections, all this will reverse in 2022, when Morgan Stanley lowered its forecast by 0.1% to 2.8% 4Q/4Q (-0.3pp to 4.7% Y).

    As Zentner notes, US GDP “is now on track to reach its pre-Covid level by the end of the current quarter, with a positive output gap of 2.7% in 4Q21, and 3.6% in 4Q22.” If one incorporates the bank’s updated expectations for spending and income this year, Zentner expect excess savings in Q1 21 to total $600bn and a further $130bn in Q2 21.This would be added on top of the estimated excess savings of $1.5Tn accumulated in 2020.

    Meanwhile, on the labor front, Morgan Stanley expects that a more robust return to work will be offset somewhat by rising labor force participation, “but economic activity is strong enough to still generate a sharp decline in the unemployment rate throughout our forecast horizon.” As a result, the bank expects the unemployment rate to average 4.9% in 4Q21 (vs 5.1%, previously), falling further to 3.9% in 4Q22 (4.0% previously). . On an annual basis, MS sees the underlying unemployment rate falling from 10.5% in December 2020 to 6.1% by December 2021, showing a more substantial improvement, then falling to around 4.0% as it closes in on the as-reported unemployment rate by the end of 2022.

    So between blistering economic growth and tumbling unemployment, what does that mean for inflation? According to Zentner, now that  the US is set to surpass China as the world’s fastest growing economy if only for a few quarters, the bank expects significant price adjustments to come this year that sends core PCE to a near-term peak of 2.6%Y in April/May, before backing off to end the year at 2.3%Y (bringing a 2.3% quarterly average).

    Where MS differs from the Fed which sees no cyclical inflation anywhere, the bank expects a more sustainable inflationary impulse to start taking shape in 2021 “led by shelter inflation, healthcare services, and a multi-quarter pass through of dollar weakness into goods.” The sustainable inflation impulse intensifies in 2022 as cyclically sensitive inflation components start to dominate – based on a tightening labor market and still robust levels of demand. Ultimately, the bank sees core PCE ending 2022 at an overheating 2.3%, well above the Fed’s inflation target of 2.0% (which is precisely why the Fed made sure to give itself buffer not to hike with its new average inflation targeting policy).

    What is remarkable is that despite clearly admitting the US is set to overheat if only for one year, Morgan Stanley says that “there is nothing in the outlook that changes the Fed’s message of patience on the back of a dismissal of inflationary pressures as transient, and the improvement in the labor market and rising inflation expectations being a good start.”

    So in a world where the US grows faster than China yet where the Fed sees this as perfectly normal, all eyes now turn to the March FOMC were MS expects policymakers “will show an updated Summary of Economic Projections (SEP) with the majority of dots still firmly anchored at the zero lower bound through the end of 2023, alongside higher growth as FOMC participants onboard the stimulus package, and even some acknowledgment of emerging upside risks for near-term inflation. Policymakers will use this new dot plot to double down on dovish guidance, indicating that even after incorporating more fiscal stimulus, vaccine progress, and the latest inflation outlook,policymakers still see interest rates on hold for the foreseeable future.”

    What happens next?

    Well, unless the Fed wants to really teach China’s who’s boss and have the US economy literally explode in a hyperinflationay civil war in a couple of years when the S&P is at 1 trillion, it will have to tighten eventually. First, it will taper, then it will hike rates:

    Tapering: After the March FOMC the Fed’s job this year does not get any easier. As Zentener correctly writes “a sharper turn upward in the data as we move further into the spring coupled with a fresh round of stimulus means financial markets are likely to constantly test the Fed’s patience.” But that won’t happen for a while.

    Outlined in the FOMC statement, the Fed “will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability Morgan Stanley assumes the Fed will see this substantial further progress over the course of this year, and expects that by the middle of the year the cloud of Covid will have thinned and the recovery will have picked up meaningfully enough that the Fed will see it as appropriate to begin taking its foot off the gas pedal and Chair Powell will indicate tapering could be on the horizon.

    We would take such a message – likely delivered atthe June FOMC meeting – to indicate the start of tapering in January 2022 by reducing the pace of the Fed’s asset purchases by $10 billion Treasury/$5 billion MBS per meeting.

    Translation, brace for a bond market crash some time in the second half as we replay the Taper Tantrum on steroids.

    Rate Hikes: While tapering may be about a year off, liftoff remains a long, long way off – some time in Q3 2023 according to Morgan Stanley – which continues to expect a very gradual pace of policy normalization that is indicative of the general dovish shift in the Fed’s reaction function. Look for the June FOMC dot plot to first show a median of one Fed hike before the end of 2023, but it is the September FOMC meeting this year, when the Fed first publishes its 2024 forecasts that it can use the dot plot to redefine gradual in this cycle.

    * * *

    For all those wondering what China will be doing during this self-imposed slowdown when its credit impulse plunges and turns negative, sending its economy on the verge of a recession, stay tuned for a subsequent post in which we analyze what it means for the US to be growing near double digits which China approaches a hard landing.

    Tyler Durden
    Tue, 03/09/2021 – 18:25

  • US Preparing Cyberattack Against Russia Over SolarWinds Hack: Report
    US Preparing Cyberattack Against Russia Over SolarWinds Hack: Report

    Authored by Dave DeCamp via AntiWar.com,

    According to a report from The New York Times, the Biden administration is planning cyberattacks against Russia in the coming weeks. The cyber offensive could come with new sanctions and would mark a serious escalation towards Moscow from the new administration.

    Anonymous US officials told the Times that the first “major move” is expected to happen over the next three weeks. It will consist of a “series of clandestine actions across Russian networks that are intended to be evident to President Vladimir Putin and his intelligence services and military but not to the wider world.”

    Via Reuters

    The officials said the cyberattack will come along with new economic sanctions on Russia. Last week, the Biden administration slapped sanctions on Russian officials over the jailing and alleged poisoning of opposition figure Alexei Navalny.

    The planned cyberattack is being framed as retaliation for the hack of the software firm SolarWinds that affected several US government agencies. The SolarWinds hack was discovered late last year. It was immediately blamed on Russia by members of Congress and Western media outlets despite a lack of evidence that showed Moscow was responsible.

    The US formally attributed blame to Russia for the SolarWinds hack in January. The FBI, NSA, the Cybersecurity and Infrastructure Security Agency, and the Office of the DNI released a statement that said the hack was “likely Russian in origin.” Missing from the statement was any evidence for the accusation.

    The reality is, attributing cyberactivity is difficult as hackers have methods to conceal their identity. One reason US officials and media outlets say it could have been Russia is the sophistication of the hack. But testimony from SolarWinds’ former CEO and a cybersecurity expert made it clear that anybody could have accessed SolarWinds’ servers due to a major security lapse.

    After the hack was first discovered, Vinoth Kumar, a cybersecurity expert who advised SolarWinds, said the password for the firm’s update server was “solarwinds123.” Kumar said he warned SolarWinds that anyone could access the server because of this password. “This could have been done by any attacker, easily,” he told Reuters last December.

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

    Kumar’s claim about the password turned out to be true. It was confirmed during congressional hearings in February that not only was “solarwinds123” the password, but it was also leaked and available to the public on the internet for years. Former SolarWinds CEO Kevin Thompson blamed an intern for posting the password on GitHub, a platform programmers use to share software information.

    “They violated our password policies and they posted that password on an internal, on their own private Github account,” Thompson said during a joint hearing by the House Oversight and Homeland Security committees.

    Sudhakar Ramakrishna, the current SolarWinds CEO, said the password was publicly available as early as 2017. “I believe that was a password that an intern used on one of his Github servers back in 2017,” he said. SolarWinds did not correct the issue until November 2019. According to the timeline from SolarWinds, suspicious activity on their server began in September 2019.

    Despite the fact that it is well established that anyone could have accessed SolarWinds’ servers and the best the US intelligence agencies could come up with is that Moscow is “likely responsible,” the US is poised to launch a cyberattack on Russia anyway.

    The Times story that reported the Biden administration’s plans also mentions another recently discovered hack of Microsoft email servers that is being blamed on another US adversary, China. The hack apparently affected servers used by small businesses, local governments, and military contractors.

    So far, it’s just Microsoft making the claim that China was responsible for this cyberattack, and the US has yet to attribute blame. But according to the Times, the Biden administration is already mulling options to go after China for the Microsoft intrusion.

    According to the Times, in August 2018, President Trump signed a secret document giving US Cyber Command more authorities to go on the offensive in the cyber realm. These authorities are reportedly under review by the Biden administration, and any major cyberattacks must be brought to the White House and the National Security Council before being carried out.

    Tyler Durden
    Tue, 03/09/2021 – 18:05

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