May 10

Today’s News 10th May 2021

  • Spaniards Celebrate Curfew End With 'Freedom' Fiestas 
    Spaniards Celebrate Curfew End With ‘Freedom’ Fiestas 

    As the clock struck midnight in Spain, thousands of people poured into the city streets in the early hours of Sunday, celebrating the official end of the local coronavirus curfew. 

    The 11 p.m. curfew was lifted in 13 of the country’s 17 regions at midnight. Footage from the beaches of Barcelona to the streets of Madrid saw thousands of young people dancing, hugging, and chanting “freedom.”  

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    After a strict stay-at-home order went into effect at the start of the virus pandemic in early 2020, the country’s second state of emergency kicked in last October. It granted people more freedoms but still, late-night curfews restricted social gatherings.

    Nationwide, there are 198 cases of COVID-19 per 100,000 population. Some regions are experiencing higher rates, like Navarra, which will maintain restrictions until the spread is controlled. 

    In Aragon, the cases stand around 297 per 100,000. Authorities are continuing the curfew in that region. In the Balearic Islands, where the infection rate is 59 per 100,000, the government will maintain the curfew.

    The highest infection rate is seen in Basque Country, with an infection rate of around 463 per 100,000. However, efforts to maintain the curfew there were scrapped by the Basque High Court on Friday.

    “I am a bit worried, although the most vulnerable people are already vaccinated, I think we should still be careful of the cases increasing again,” Natalia Pardo Lorente, a biomedical researcher at the Centre for Genomic Regulation in Barcelona, told CNN Sunday. “Even while the curfew was still active Friday, I saw large groups of people drinking in the Ciutadella, and it was after ten at night.

    “Is there really a need to be gathering in groups of 100 people or more in parks? Why is it not enough to meet your close friends and that’s it?” Lorente added.

    Spain has been hard hit by the pandemic. More than 3.5 million infections have been recorded, along with 78,000 deaths. Across Europe, Spain is the fourth-hardest hit country in Europe, behind France, the UK, and Italy.

    Tyler Durden
    Mon, 05/10/2021 – 02:45

  • The Butterfly Effect Re-Setting The Global Paradigm
    The Butterfly Effect Re-Setting The Global Paradigm

    Authored by Alastair Crooke via The Strategic Culture Foundation,

    The shift of paradigm centred on the U.S. pivot away from West Asia naturally impacts on Iran’s JCPOA calculus…

    In chaos theory, the butterfly effect is the idea that small things can have non-linear impacts on a complex system. The concept is imagined with a butterfly flapping its wings, and though this, in itself, would be unlikely to cause a tornado, nonetheless small events can cause cascades of change within a complex system. And so to Europe, where Germany is changing. The Green Party is flapping its wings in the spatial void left by Merkel’s expected departure. And though the Party, some years ago, was almost wholly Corbinite (i.e. classic anti-establishment), today, beneath its liberal surface, the Green rhetoric is something different – It is fiercely North Atlanticist, pro-NATO and anti-Russian (even quasi neo-liberal).

    Today, the European political zeitgeist is changing. It is soaking up the Biden ‘we must join together to curb Chinese and Russian behaviours’ meme. Of course, this shift cannot all be laid at the door of the German Greens; nonetheless, they seem destined to emerge with a pivotal role in the polity of the pivotal EU state, as the Green emergence becomes somehow iconic of the butterfly wing effect.

    The language of a human rights ideology defined in a multitude of gender and diversity iterations has seized the Brussels discourse. Some might welcome this development in principle, viewing it as righting ancient injustices. However, it should be understood that it is rooted not so much in human compassion, but is firmly seated in power dynamics, and, what’s more, a particularly dangerous set of power dynamics.

    One the one hand, the ‘Biden agenda’ is primarily about ousting a deeply-rooted constituency of Americans (Red America) permanently from power.

    He says it explicitly.

    And on the other, as Blinken repeats and endlessly insists, the U.S.-shaped rules-based order must prevail in the world. Biden’s ‘progressive values’ are but the tool to mobilise politics to achieve these ends. (Biden in his long Senate career was not noted for being progressive.)

    The flapping of the German butterfly wing in Europe enables and facilitates Washington’s sought-after geo-strategic paradigm change. The Cold War, which has so seared itself into the American foreign-policy mindset, and implanted too its toxic residue of visceral Russophobia, just ignored China.

    It was assumed that China’s turn toward a western-style economic model simply would flush away the communist colouring – via the agency of an emergent consumerist middle class. Now, Washington observes China unobtrusively to have shed its chrysalis only to reveal the unfolding wings of a superpower – both rivalling, and potentially besting, America. The Biden circles want now to focus America’s power entirely on outdoing and out-rivalling China.

    Whereas Trump was obsessed by Iran, the Biden team is not. It is keener to pivot away from Trump’s passion with Iran (and the troublesome West Asia, more generally), to focus on bringing Europe to a different ‘pivot’– that of cultivating its hostility towards Russia (a project, led by Britain’s propaganda campaign, and by certain East European states who seem to have become ‘the tail’ wagging the EU policy ‘dog’). For Washington Beltway circles stuck in the old Cold War mindset, Russia remains a ‘minor economy and regional power’ that does not merit America’s full attention – unlike China, which is a major economic power, with military capabilities at the very least, on a par with those of the U.S.

    It is seen to be enough (in DC) for Europe to be mandated to do the ‘heavy lifting’ of attrition against Russia, with the U.S. ‘leading from behind’ – as Obama did in Libya. Victoria Nuland, of Ukraine regime change fame, is now confirmed by the Senate as a top State Department official.

    Why should Biden circles want Europe to pivot against Russia and China? Well, it is the old Mackinder rule: the heartland must never be allowed to unite. China and Russia (and Iran) must be kept apart, and be divided through ‘triangulation’, as Dr Kissinger used to say. First it was Afghanistan that was the ‘swamp’ in which Russia (then USSR) was to be mired; then Syria; and now it is to be the Ukraine that is supposed to keep Russia pre-occupied and on edge – Containment, whist the U.S. focusses on isolating China.

    In this vein, the EU parliament, which ‘has no battalions’ (like the Pope, in the old quip), issued its Promethean ultimatum to Moscow: Should Russia again threaten Ukrainian sovereignty, the EU must make clear that the consequences for such a violation of international law and norms would be severe. MEPs agreed, “such a scenario must result in an immediate halt to EU imports of oil and gas from Russia, the exclusion of Russia from the SWIFT payment system, and the freezing of assets and cancellation of visas for Europe of all oligarchs tied to the Russian authorities”.

    But when it is observed that this very hostile resolution was carried by 569 votes to 67, it is clear that this exercise had considerable political heft behind it (a case of the Biden circles again ‘leading from behind’ perchance?). The EU, in the same week, also censored China for “endangering peace” in the South China Sea, and sent a naval expeditionary force there.

    And so the Europeans are falling into line with Blinken’s demand for co-ordinated action and rhetoric on China and Russia, it would seem.

    None of these events will have surprised Moscow or Beijing, which earlier resolved to resist western attempts at divide and rule. Nonetheless, these western ploys do entail high risk. The EU Ukrainian ultimatum, backed by such a huge parliamentary majority, hints that a further round of tensions over the Donbass is anticipated (and is being prepared).

    This expectation surely lay behind the broadside out from the EU parliament. If so, they should know that Russia will not abandon Donbass to Kiev (Presiden Putin warned plainly that Russia’s red lines should not be mis-construed, in his recent address to the Federal Assembly). The EU resolution thus smacks of preparing of the ground for NATO intervention of some type.

    No doubt, the EU sees its role as fore-staging its ‘values’ as a part of lending weight to its strategic autonomy ambitions being taken seriously. But this comes at a price. Ukraine is not under Zelensky’s control (there are other players – hotheads with different agendas). Anything can happen. The EU ultimately will be the one to pay the price for any outbreak of military hostilities.

    And for what? Re-constituting warm relations with the Democrats (as in the old days)? It all speaks to short-termism, well shy of any discernable strategy.

    And the risks are not just kinetic: Russia, China and U.S. do not seek military escalation, yet U.S. policies towards China (on Taiwan) and Russia (concerning Ukraine) may be taking them toward inadvertent confrontation.

    They are economic too: Europe desperately needs Chinese investment and technology – and Russian gas – if its economy is not to collapse into prolonged recession. It was only ‘yesterday’, as it were, that EU leaders were singing the refrain of the EU should stand aloof from the heavy-weight mega-competition.

    The political risk for the EU is that Biden’s political honeymoon may quickly run out of steam. His ramming radical legislation through Congress with no bi-partisan support is levered on a hangover from the pre-election era – of Democratic hatred for anything Trump. That sentiment however, is already draining away with the passage of time. Trump no longer monopolises the headlines. The carte blanche provided to Biden by this emotional animus to his predecessor may quieten and further erode, even before he attempts to move from the progressive end of the spectrum to the centre of politics – which he must do in good time for 2022 if he is to appeal to middle of the road Democrats, and not just his Leftist constituency.

    Biden’s vulnerability in the 2022 mid-term elections is underscored by the fact that apart from his handling of the coronavirus, the majority of Americans disapprove of his performance in all other areas. The U.S. might whiplash off in a different direction, leaving the EU clinging to a stranded asset (Biden).

    The shift of paradigm centred on the U.S. pivot away from West Asia naturally impacts on Iran’s JCPOA calculus too: With the U.S. pursuing a 5th generation full-spectrum ‘knock-back’ delivered to the China-Russia axis, Iran cannot (and will not) allow itself to be positioned as hors de combat, bogged down in lengthy negotiations over the JCPOA. The archetypal exemplar of the Imam at Kerbala will require Iran to adopt a principled stand with its allies – and with ‘the Axis’. Already, we see Saudi Arabia responding, in its own way, to the paradigm shift – through opening channels with both Tehran and Damascus.

    So, to where will this lead? Significantly, Richard Haas and Charles Kupchan, from the ‘oracle’ that is the Council for Foreign Relations, argue that America, having renewed its standing, will ultimately itself have to pivot towards a new Concert of Powers. They write:

    “Pax Americana is now running on fumes. The United States and its traditional democratic partners have neither the capability nor the will to anchor an interdependent international system and universalize the liberal order that they erected after World War II … Establishing a global concert would not be a panacea. Bringing the world’s heavyweights to the table hardly ensures a consensus among them. Indeed, although the Concert of Europe preserved peace for decades after it was formed, France and the United Kingdom ultimately faced off with Russia in the Crimean War. Russia is again at loggerheads with its European neighbors over the Crimean region, underscoring the elusive nature of great-power solidarity … The United States and its democratic partners have every reason to revive the solidarity of the West. However they should stop pretending that the global triumph of the order they backed since World War II is within reach”.

    It seems hardly credible though, that Washington could make such an existential psychic transformation of ‘stopping pretending’ without first undergoing a major crisis. Is that what these authors anticipate – a Fourth Turning?

    Tyler Durden
    Mon, 05/10/2021 – 02:00

  • Antony Blinken Continues To Lecture The World on Values His Administration Aggressively Violates: Greenwald
    Antony Blinken Continues To Lecture The World on Values His Administration Aggressively Violates: Greenwald

    Authored by Glenn Greenwald via greenwald.substack.com,

    Continuing his world tour doling out righteous lectures to the world, U.S. Secretary of State Antony Blinken on Thursday proclaimed — in a sermon you have to hear to believe — that few things are more sacred in a democracy than “independent journalism.” Speaking to Radio Free Europe, Blinken paid homage to “World Press Freedom Day”; claimed that “the United States stands strongly with independent journalism”; explained that “the foundation of any democratic system” entails “holding leaders accountable” and “informing citizens”; and warned that “countries that deny freedom of the press are countries that don’t have a lot of confidence in themselves or in their systems.”

    U.S. Secretary of State Antony Blinken speaks on the importance of independence journalism, May 6, 2021 (Radio Free Europe); Julian Assange arrives at Westminster Magistrates’ Court in London in his attempt to resist extradition by the Biden administration (Photo by Victoria Jones/PA Images via Getty Images)

    The rhetorical cherry on top of that cake came when he posed this question: “What is to be afraid of in informing the people and holding leaders accountable?” The Secretary of State then issued this vow: “Everywhere journalism and freedom of the press is challenged, we will stand with journalists and with that freedom.” Since I know that I would be extremely skeptical if someone told me that those words had just come out Blinken’s mouth, I present you here with the unedited one-minute-fifty-two-second video clip of him saying exactly this:

    That the Biden administration is such a stalwart believer in the sanctity of independent journalism and is devoted to defending it wherever it is threatened would come as a great surprise to many, many people. Among them would be Julian Assange, the founder of WikiLeaks and the person responsible for breaking more major stories about the actions of top U.S. officials than virtually all U.S. journalists employed in the corporate press combined.

    Currently, Assange is sitting in a cell in the British high-security Belmarsh prison because the Biden administration is not only trying to extradite him to stand trial on espionage charges for having published documents embarrassing to the U.S. Government and the Democratic Party but also has appealed a British judge’s January ruling rejecting that extradition request. The Biden administration is doing all of this, noted The New York Times, despite the fact that “human rights and civil liberties groups had asked the [administration] to abandon the effort to prosecute Mr. Assange, arguing that the case . . . could establish a precedent posing a grave threat to press freedoms” — press freedoms, exactly the value which Blinken just righteously spent the week celebrating and vowing to uphold.

    It was the Trump DOJ which brought those charges against Assange after then-CIA Director Mike Pompeo claimed in a 2017 speech that WikiLeaks has long “pretended that America’s First Amendment freedoms shield them from justice,” and then warned: “they may have believed that, but they are wrong.” Pomepo added — invoking the mentality of all states that persecute and imprison those who report effectively on them — that “to give [WikiLeaks] the space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for. It ends now.” 

    But like so many other Trump policies concerning press freedoms — from defending the Trump DOJ’s use of warrants to obtain journalists’ telephone records, to demanding Edward Snowden be kept in exile, to keeping Reality Winner and Daniel Hale imprisoned — top Biden officials have long been fully on board with Assange’s persecution. Indeed, they have been at the forefront of the effort to destroy basic press freedoms not just for WikiLeaks but journalists generally.

    It was Joe Biden who called Assange a “high-tech terrorist” in 2010. It was the Obama administration that convened a years-long grand jury to try to prosecute Assange. It was Sen. Dianne Feinstein (D-CA) who urged Assange’s prosecution under the Espionage Act years before Trump was in office. And it was Blinken’s colleague on the Obama national security team, Hillary Clinton, who praised the DOJ for its prosecution of Assange. All of this was intended as punishment for Assange’s revelations of rampant wrongdoing by the U.S. Government and its allies and adversary governments around the world.

    The New York Times, Feb. 21, 2021

    How can you run around the world feigning anger over other countries’ persecution of independent journalists when you are a key part of the administration that is doing more than anyone to destroy one of the most consequential independent journalists of the last several decades? Indeed, as numerous journalists warned at the time, there were few, if any, administrations in U.S. history more hostile to basic press freedoms than the Obama administration in which Blinken previously served, including prosecuting double the number of journalistic sources under espionage laws than all previous administrations combined.

    In 2013, while Blinken was serving as a high-level official in the State Department, the Committee to Protect Journalists did something very rare — issued a report warning of an epidemic of press freedom attacks by the U.S. Government — and said: “In the Obama administration’s Washington, government officials are increasingly afraid to talk to the press.” The New Yorker‘s Jane Mayer said of the Obama administration’s press freedom attacks: “It’s a huge impediment to reporting, and so chilling isn’t quite strong enough, it’s more like freezing the whole process into a standstill.” James Goodale, the New York Times’ General Counsel during the paper’s battle in the 1970s to publish the Pentagon Papers, warned that “President Obama will surely pass President Richard Nixon as the worst president ever on issues of national security and press freedom.”

    Even the specific “press freedom attack” Blinken referenced in that video interview — namely, Russia’s recent demand that media outlets linked to foreign governments such as Radio Free Europe register as “foreign agents” with the Russian government and pay fines for their failure to do so — is one which Blinken and his comrades have wielded against others for years. Indeed, Russia was responding to the U.S. Government’s previous demand that RT and other Russian news agencies register as “foreign agents” in the U.S., as well as the Biden administration’s escalated attacks just last month on news agencies it claims serves as propaganda agents for the Kremlin.

    It is hardly new for the U.S. to dole out lectures which the rest of the world recognizes as complete farces. In 2015, then-President Obama was prancing around India giving lectures on the importance of human rights, only to cut short his trip to fly to Saudi Arabia, where he met numerous top officials of the U.S. Government to pay homage to Saudi King Abdullah, their long-time close and highly repressive ally whose totalitarian regime Obama did so much to fortify.

    But galavanting around the world masquerading as the champion of press freedoms and the rights of independent journalists, all while working to extend the confinement and detention of one of the people responsible for much of the most important journalistic revelations of this generation beyond the decade he has already endured, is a whole new level of deceit. “Hypocrisy” is insufficient to capture the craven insincerity behind Blinken’s posturing.

    It is always easy — and cheap — to condemn the human rights abuses of your enemies. It is much harder — and more meaningful — to uphold those principles for your own dissidents. Blinken, like so many who preceded him in that Foggy Bottom office, theatrically excels at the former while failing miserably at the latter.

    Tyler Durden
    Mon, 05/10/2021 – 00:05

  • Ranking US Generations On Their Power And Influence Over Society
    Ranking US Generations On Their Power And Influence Over Society

    We’re on the cusp of one of the most impactful generational shifts in history.

    As it stands, the Baby Boomers (born 1946-1964) are America’s most wealthy and influential generation. But, as Visual Capitalist’s Carmen Ang details below, even the youngest Boomers are close to retirement, with millions leaving the workforce every year. As Baby Boomers pass the torch, which generation will take their place as America’s most powerful?

    In our inaugural Generational Power Index (GPI) for 2021, we’ve attempted to quantify how much power and influence each generation holds in American society, and what that means for the near future.

    Download the Generational Power Report (.pdf)

    Generation and Power, Defined

    Before diving into the results of the first GPI, it’s important to explain how we’ve chosen to define both generations and power.

    Here’s the breakdown of how we categorized each generation, along with their age ranges and birth years.

    The above age brackets for each generation aren’t universally accepted. However, since our report largely focuses on U.S. data, we went with the most widely cited definitions, used by establishments such as Pew Research Center and the U.S. Federal Reserve.

    To measure power, we considered a variety of factors that fell under three main categories:

    • Economic Power

    • Political Power

    • Cultural Power

    We’ll dive deeper into each category, and which generations dominated each one, below.

    Overall Power, By Generation

    Baby Boomers lead the pack when it comes to overall generational power, capturing 38.6%.

    While Boomers hold the largest share of power, it’s interesting to note that they only make up 21.8% of the total U.S. population.

    Gen X comes in second place, capturing 30.4% of power, while Gen Z ranks last, snagging a mere 3.7%. Gen Alpha has yet to score on the ranking, but keep in mind that the oldest members of this generation will only be eight years old this year—they haven’t even reached double digits yet.

    Generational Power: Economics

    Considering that Baby Boomers hold nearly 53% of all U.S. household wealth, it makes sense that they dominate when it comes to our measurement of Economic Power.

    At 43.4%, the GPI shows that Boomers hold more economic influence than Gen X, Millennials, and Gen Z combined. They make up a majority of business leaders in the U.S., and hold 42% of billionaire wealth in America.

    Timing plays a role in the economic prosperity of Baby Boomers. They grew up in a post-WWII era, and spent their primary working years in a relatively stable, prosperous economy.

    In contrast, Millennials entered the workforce during the Great Recession and have seen only tenuous economic and wage growth, impacting their ability to accumulate wealth. Combine this with crippling amounts of student debt, and it’s no surprise that Millennials have nearly 50% less wealth than other generations (Boomers, Gen X) at a comparable age.

    Generational Power: Political

    In addition to holding the most Economic Power in the GPI, Baby Boomers also rank number one when it comes to Political Power.

    Boomers capture 47.4% of political influence. This generation accounts for 32% of all U.S. voters, and holds the majority of federal and state positions. For instance, 68% of U.S. senators are Baby Boomers.

    Political spending on election campaigns and lobbying predominantly comes from Boomers, too. When it comes to money spent on lobbying, we found that 60% of the top 20 spenders were from organizations led by Baby Boomers.

    In contrast, Millennials and Gen Zers barely make a splash in the political realm. That said, in the coming years, it’s estimated that the combined voting power of Millennials and Gen Z will see immense growth, rising from 32% of voters in 2020 up to 55% by 2036.

    Cultural Power

    There is one category where other generations gave Boomers a run for their money, which is in Cultural Power.

    In this category, it’s actually Gen X that leads the pack, capturing 36.0% of Cultural Power. Gen X is especially dominant in press and news media—over half of America’s largest news corporations have a Gen Xer as their CEO, and a majority of the most influential news personalities are also members of Gen X.

    Despite a strong showing in our culture category, Gen X falls short in one key variable we looked at—the digital realm. On digital platforms, Millennials dominate when it comes to both users and content creators, and Gen Z has growing influence here as well.

    The Future of Generational Power

    Generational power is not stagnant, and it ebbs and flows over time.

    As this process naturally plays out, our new Generational Power Index and the coinciding annual report will aim to help quantify future shifts in power each year, while also highlighting the key stories that exemplify these new developments.

    For a full methodology of how we built the Generational Power Index, see pages 28-30 in the report PDF. This is the first year of the report, and any feedback is welcomed.

    Tyler Durden
    Sun, 05/09/2021 – 23:40

  • Record-Low Deportations Part Of Biden's Plan To "Dismantle ICE": Former ICE Chief
    Record-Low Deportations Part Of Biden’s Plan To “Dismantle ICE”: Former ICE Chief

    Authored by Zachary Stieber via The Epoch Times,

    The record-low number of deportations in the United States in April signals that the Biden administration is working toward abolishing immigration enforcement, the former acting chief of Immigration and Customs Enforcement (ICE) says.

    “It’s terrible. You got record numbers, people coming into the country illegally being released, and a record low of people being removed,” Thomas Homan, who headed the agency during the Trump administration, told The Epoch Times.

    “But that’s by design, this isn’t an accident—they want to dismantle ICE. Rather than abolish them, which they had a tough time doing they’re just making them not effective. Looks like it’s working,” he added.

    The end goal, according to Homan, is completely halting immigration enforcement.

    “They want open borders because they think they’re going to be all future Democratic voters. This is about perpetual power of the government,” he said.

    ICE and the White House did not respond to requests for comment. White House press secretary Jen Psaki has not been asked during recent briefings about the low number of deportations.

    Only 2,962 deportations were carried out in April, according to the agency. That does not include expulsions made under Title 42 emergency powers amid the COVID-19 pandemic.

    An ICE spokesman said via email earlier this week that the agency “has concentrated its limited law enforcement resources on threats to national security, border security, and public safety,” which has “allowed ICE to focus on the quality of enforcement actions and how they further the security and safety of our communities rather than the simple quantity of arrests and removals.”

    Former acting ICE Director Tom Homan testifies at a House hearing in front of the Committee on Oversight and Reform, in Washington on July 12, 2019. (Charlotte Cuthbertson/The Epoch Times)

    A recent surge in illegal border crossings, meanwhile, has shown little signs of slowing down. Over 177,000 illegal immigrants were apprehended by border agents in April, according to preliminary numbers, with another 42,620 aliens evading authorities.

    President Joe Biden upon entering office quickly reversed or dramatically altered key Trump-era measures aimed at curbing illegal immigration, including completely undoing the program that forced asylum seekers to wait outside the country for their claims to be heard. In February, ICE announced new interim guidelines for deportations that narrowed the agency’s focus to only three priority areas: national security, border security, and public safety.

    If an illegal immigrant is encountered who doesn’t fall under one of the areas, an agent must seek approval from their field office before taking any action.

    Republicans and some analysts said the low April numbers should not be a surprise given the narrowing deportation criteria.

    “With the Biden Administration willfully ignoring the rule of law, it’s no wonder we have a crisis at our southern border,” Rep. Debbie Lesko (R-Ariz.) wrote on Twitter.

    Andrew Arthur, a resident fellow in law and policy for the Center for Immigration Studies, a research institute that looks at how immigration impacts America, said the current restrictions on ICE incentivize illegal immigration.

    “As bad as the situation at the border is, interior non-enforcement is, if anything, worse. But you don’t see children crowded into makeshift detention centers under foil blankets when ICE isn’t allowed to deport criminals,” he wrote in a blog post. “The current non-enforcement rules are the reason aliens are coming, though, because they send the signal that once those aliens get into the United States, they will get to stay.”

    Tyler Durden
    Sun, 05/09/2021 – 23:15

  • Visualizing What $50k In Lumber Can Build Today Versus Last Year
    Visualizing What $50k In Lumber Can Build Today Versus Last Year

    Skyrocketing lumber prices have more than tripled over the past 12 months and made the cost associated with building an average new single-family home significantly rise. The folks at Visual Capitalist dove deeper into the lumber price storm to find out how many new single-family homes $50k in lumber can build today versus the same period in 2020. 

    To calculate each home, Visual Capitalist used the following parameters:

    • Lumber requirements: 6.3 board feet (bd ft) per square foot (sq ft)

    • Median single-family house size: 2,301 sq ft

    • Total lumber required per single-family house: 14,496 bd ft

    What they found was that $50k in lumber in 2015 could build 14.74 new single-family homes. By April 2020, the same price of lumber could build around 10.5 homes. And in May, after a meteoric rise in lumber prices, $50k in lumber could only build 2.11 homes. 

    Here’s a visualization of what $50k in lumber can build in May 2021 versus May 2020. 

    On Friday, lumber prices rose at the Chicago Mercantile Exchange to over $1,700 per 1,000 bd ft, closing up 2.49% to $1,686, fresh record highs. The chart below is in a parabolic move – almost like Bitcoin or Etherum. 

    Despite Weyerhaeuser Co., Georgia-Pacific LLC, West Fraser Timber Co., Ltd., among others, attempting to increase output, lumber prices continue to soar and will likely remain elevated until new capacity comes online or the housing market frenzy loses steam. 

    All this talk about “transitory” inflation is non-sense, as Bank of America elegantly put it: “Buckle up! Inflation is here.” 

    Tyler Durden
    Sun, 05/09/2021 – 22:50

  • Critical Race Theory Training In Workplace Could Lead To Increased Bullying, Anxiety, Expert Says
    Critical Race Theory Training In Workplace Could Lead To Increased Bullying, Anxiety, Expert Says

    Authored by Janita Kan via The Epoch Times (emphasis ours),

    HR expert and author Jim Stroud says the impact of critical race theory (CRT) in workplace training could be detrimental to employees because it could lead to increased bullying and anxiety in the workplace.

    A woman holds a placard reading “white privilege” during a demonstration in Barcelona, Spain, on June 14, 2020. (Josep Lago/AFP via Getty Images)

    The the quasi-Marxist theory has been heavily promulgated throughout academia, entertainment, government, schools, and the workplace in recent years and rose to new prominence following the rise of far-left groups such as Antifa and Black Lives Matter. Some workplaces have included concepts from the doctrine in their “racial and cultural sensitivity” training, which essentially teaches employees that the United States is fundamentally racist, or that one race is inherently superior to another race.

    Stroud, who has 20 years’ experience in human resources and has written about CRT’s impact on the workplace, argues that such training could negatively impact workplace dynamics and teaches employees to mistrust each other.

    “So imagine that you’re working in a space and the day before the training, everything was fine,” Stroud told NTD’s “The Nation Speaks.” “You work with your co-workers, you had good friendships, good team building exercises, everything is fine. After the training, you’re looking at your co-workers in a different way. You’re wondering, okay, I thought you were my friend but because of this training, I now believe that you’re oppressing me, so I don’t really know if we’re really friends. I don’t really know if we’re really working together. I don’t know if the reason why you refused me taking on some project is because my idea wasn’t valid or because you’re racist.”

    Human resources expert and author Jim Stroud in a screenshot from an episode of “The Nation Speaks” that aired on May 8, 2021. (NTD)

    Employees may also question whether they were chosen to work on a certain project because they were suitable for the job or because of some corporate policy aiming to fulfill at curbing discrimination stemming from intersectionality, he added. Intersectionality is the concept where different aspects of a person’s identity can expose them to overlapping forms of discrimination and marginalization.

    “So I also think that it would bring about a lot of anxiety inside the workplace because if people disagree with critical race theory then you will be accused of being racist, which is what critical race theory does,” he said.

    If an employee continues to deny that accusation, the CRT states that that individual is “all the more racist,” he explained. Eventually, this anxiety in some people could lead to hostile workplaces.

    Stroud said that CRT is essentially a “movement to make racism acceptable,” saying it teaches the idea that “white people are born oppressors without redemption and that all minorities are oppressed.”

    “It teaches that the most important thing about anyone is their skin color, not their character, not the things they do, not the personality, not even the environment that they inhabit,” he said. “That’s purely telling you that your worth and everything you are is measured in the color of your skin.”

    The movement to push back on the expansion of CRT in schools and workplace training has fueled a heated debate on how cultural and racial sensitivity education should be conducted. Conservatives and Republicans have warned that the CRT movement is not about eliminating racism, and is simply pushing divisive concepts. Meanwhile, progressives and Democrats argue that the CRT approach would advance equity for all.

    During his administration, President Donald Trump placed a ban on critical race theory training in federal workplaces, but President Joe Biden rescinded the measure. Instead, Biden has promoted policies that embrace the ideology, issuing an executive order stating that the federal government must pursue “a comprehensive approach to advancing equity for all.”

    Stroud said he believes that the best way for corporations who are grappling with partisan politics in their organization is to attempt to steer conversations away from politics, but he warned that this could prompt backlash, citing the example of employee exodus at software firm Basecamp. The technology company saw mass resignations after its CEO announced that its employees are banned from openly sharing their “societal and political discussions” at work.

    In a blog post, Basecamp CEO Jason Fried explained that the discussions are “a major distraction,” “saps our energy,” and “redirects our dialog toward dark places.”

    “It’s not healthy, it hasn’t served us well. And we’re done with it on our company Basecamp account where the work happens. People can take the conversations with willing co-workers to Signal, Whatsapp, or even a personal Basecamp account, but it can’t happen where the work happens anymore,” he said.

    Stroud said he also hopes to see legislative measures that would make an individual’s political affiliation a protected class under state or federal discrimination laws in order to counter discrimination or bullying based on a person’s political beliefs.

    “Hopefully by the time of the election, it’ll become law. I think will be tricky because talking about politics is is something that both sides need,” he said, adding that given the Democrat-controlled Congress, it is unlikely that such a law would pass.

    Follow Janita on Twitter: @janitakan

    Tyler Durden
    Sun, 05/09/2021 – 22:25

  • Uneven Recovery Leaves Working-Poor Communities In The Dust 
    Uneven Recovery Leaves Working-Poor Communities In The Dust 

    The US economy is fragmented more than ever. Millions of Americans continue to suffer job loss and housing and food inequities. At the same time, 650 billionaires in the US saw their net worth increase by more than $1 trillion since the pandemic began. A Bloomberg analysis provides a deep dive into the unevenness of the recovery in a dozen cities. 

    To capture the multi-speed track recovery for different races, social classes, and various metro areas, Bloomberg used unemployment data from a monthly Current Population Survey of approximately 60,000 households via the Bureau of Labor Statistics and the US Census Bureau.

    They found the recovery is patchy geographically: 

    “For Asian Americans in San Francisco and Los Angeles, low tourism and high housing costs are weighing on their rebound, while Latinos in Phoenix have benefited from a strong construction sector.”

    Meanwhile, the Federal Reserve and the White House have vowed to continue unprecedented monetary and fiscal accommodations until employment metrics improve, such as Black national unemployment, wage growth for working-poor, and labor force participation for those without college degrees.

    Janelle Jones, the top economist at the Labor Department, recently said there “no economic recovery can be complete if some communities are left behind.” But after trillions of dollars of monetary and fiscal injections, the recovery remains uneven: 

    Bloomberg found the socio-economic collapse during the virus pandemic widened the non-seasonally adjusted White-vs.-Black unemployment gap nationally by 2.9 percentage points and the White-vs.-Hispanic gap by 2.3 points. In contrast, unemployment among Asians reverted to normal levels. 

    On a more microscopic level, average jobless rates between January and March were 15.5% for Black people in Los Angeles and 3.5% for White people in Atlanta. 

    Bloomberg pointed out Hispanic workers in Phoenix had better labor conditions than their peers nationally because service-related jobs were hiring more. 

    For Blacks, Hispanic, and Whites in Houston, joblessness across the board was much worse than the national average, primarily because of the industry-wide downturn in oil and gas. On the other hand, Asians had the best labor conditions. 

    Focusing on minorities, Black and Hispanic people in Las Vegas, Philadelphia, and Los Angeles face double-digit unemployment numbers. 

    “Still, for more than half of minority groups, local unemployment rates have not fully recovered to March 2020 levels, when stay-at-home orders were first enacted, while some gaps have widened,” Bloomberg said. 

    Combining the data above with other regional data such as home prices, job listings and small business loans from the Paycheck Protection Program, Bloomberg dives even further to show what minority metro areas have been left behind in the ‘frankenstein’ recovery (otherwise known as the “K-shaped” recover) produced by government and central bank. 

    What’s clear is that government nor the central bank can demonstrate effective policies to lift all participants. One thing is sure, the billionaires got richer, and the bottom 90% of Americans got poorer. 

    Tyler Durden
    Sun, 05/09/2021 – 22:00

  • Biden Gives Beijing Reason To Dump More Treasuries
    Biden Gives Beijing Reason To Dump More Treasuries

    By Ye Xie, Bloomberg reporter and Market Live commentator

    Three things we learned last week:

    1. The U.S.-China relationship remains tense.

    For anyone who expects an improvement in the U.S.-China relationship, it’s been a disappointing early start to the Biden administration. President Biden has kept almost all of Trump’s China economic policies, including tariffs, and restrictions on Chinese tech companies. He rallied U.S. allies to put pressure on China over issues from human rights to cybersecurity.

    Under these circumstances, China has most likely been divesting from the dollar and U.S. Treasuries for “logical tactical reasons,” said Stephen Jen, co-founder of London-based Eurizon SLJ Capital. “If the risks of financial sanctions by the U.S. are rising, why would SAFE (China’s State Administration of Foreign Exchange) hold so much U.S. Treasuries that could potentially one day be subject to confiscation or be frozen?” he said.

    Indeed, China has sold Treasuries since 2018 when the trade war started. What’s interesting is that over the past year, its holding of long-term Treasury bonds have been steady, but its purchases of short-term bills surged to $76 billion, from $3 billion in February 2020, when the pandemic hit. The reason for the bill purchases is unknown, but it doesn’t look like a long-term commitment.

    2. The weak jobs report supports the Fed’s dovish stance.

    The shockingly weak U.S. jobs report was almost too bad to be true. It might have been because of technical factors such as seasonal adjustments or the lack of incentives for workers to return thanks to enhanced unemployment payments. But it certainly justifies the Fed’s cautious policy that it’s not the time to talk about removing stimulus. It’s likely to keep the dollar on the back foot.

    Given the Fed now puts more weight on employment than on inflation under its new framework, the report should lower the markets’ sensitivity to this week’s inflation figure.

    3. Strong data and currency give China a window to open capital markets.

    China’s exports surged and the tourism spending during the Labor Day holiday shows consumption is recovering. The stable growth provides China a window to address some long-term structural issue, including cleaning up the debt overhang and opening up its capital account. Last week, China issued rules on Wealth Management Connect, which would allow investments across the border between Hong Kong and the nation’s southern region.

    “While it is a small step in making investment abroad easier for qualified residents in Guangdong province, it is a big step toward China’s capital account liberalization experiment,” Citigroup’s economists led by Li-Gang Liu wrote.

    Tyler Durden
    Sun, 05/09/2021 – 21:40

  • Lessons From Steve Cohen And Jerry Seinfeld
    Lessons From Steve Cohen And Jerry Seinfeld

    By Nick Colas of DataTrek Research

    This week we’re considering the concept of “Mastery”. The word can mean either “a high level of skill” or “control over something/ someone”. Steve Cohen and Jerry Seinfeld both have mastery of their respective crafts, for example. As different as trading and comedy may be, their process of gaining mastery is actually quite similar: work every day, no excuses. This builds “skill”, of course, but also confidence (i.e., mastery over self, and self-doubt).

    Two stories about “mastery” to share with you:

    #1: Steve Cohen. When I (Nick) got to SAC in 1999. I heard a story about how Steve had developed his style of catalyst-driven trading. When he left Gruntal and set up his own shop, he started by only trading one stock: IBM. He got to know the floor specialists who made the market, read all the analyst reports and financial filings, and traded only when he thought he had an edge on specific events. Once he was satisfied his process worked, he started scaling the business by adding traders and training them in this approach.

    By the time I got to Steve’s shop, there was an additional process layer on top of “know your edge”: a specific daily trading profit goal. You started with, say, a $1,000 budget – make that profit every day for 30 days. It didn’t matter if you made it at the open, the close, or sometime in between. Once you made the grand, you basically took all risk off and started working on the next day’s trade ideas. Once you achieved a 30-day continuous string of profits, you set a new one – $2,000/day, say.

    What if you stumbled at some point, and had a few days of losses as you ramped up your profit goal? Well, then you went back to the $1,000/day goal. You already knew how to do that, after all. String together a few weeks of those gains and try for $2,000/day again. We all met weekly with the in-house shrink, who helped us understand the psychology behind our successes and failures, but always in the context of that daily profit goal number.

    Takeaway: Steve and IBM is a great example of mastery as “comprehensive knowledge” built through daily discipline, and the $1,000/day goal is mastery as “control over someone”, namely yourself.

    #2: Jerry Seinfeld. Ok, not an investment guy, obviously, but he clearly has mastery over his craft. How did he do that? Here’s his hack, as described to a fellow comedian many years ago:

    • “He said the way to be a better comic was to create better jokes and the way to create better jokes was to write every day.
    • He told me to get a big wall calendar that had a whole year on one page and hang it on a prominent wall. The next step was to get a big red magic marker. He said for each day that I do my task of writing, I get to put a big red X over that day.
    • After a few days you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job is to not break the chain.”

    Takeaway: Just like Steve, Seinfeld sees mechanized, disciplined routine as the path to mastering a skill and mastering yourself. In his episode of “Comedians in Cars” with Dave Chappelle, the two have a long exchange about how it can take years to craft the perfect joke. One word might make all the difference, and the only way to find it is to search for it every day.

    Wrapping up with a few other thoughts on the subject of mastery:

    As Henry Ford said, “If you think you can do a thing or think you can’t do a thing, you’re right”. “Mastery of knowledge” gets so much attention in investing that it’s easy to shortchange “mastery of someone”, namely yourself. Behavioral finance covers some of this ground, but too often in a way that makes decision-making mistakes look unavoidable. The important thing is to keep trying to overcome them with a specific process, executed daily.

    Small wins mean a great deal. The $1,000/day trading profit goal had two very specific purposes. First, it forced junior traders to learn P&L discipline and risk management – especially the idea of cutting losses early. Second, and just as important, it gave them confidence. There is nothing like a 30-day string of wins – in any field – to give you the impetus to keep crossing off the days on a Seinfeld-style calendar.

    Achieving mastery – of knowledge, or self – is an ongoing process more than it is a destination unto itself. Back at SAC I knew a trader who would mark down the individual closing positions on his personal P&L software (not the fund’s books and records, of course) so that he showed a smaller daily gain (say $2 mm instead of $4 mm). Why? Because at the next day’s open his real-time P&L would always be positive by a million or two regardless of overnight volatility. He simply found it easier to make good decisions if he was “making money”. Unorthodox as that may sound, it reflects the right priorities – mastery is often as much a brain hack as it is based in empirical knowledge.

    Final note: we obviously follow the daily approach to “mastery” at DataTrek, something that actually started in our prior gig right around 2010 when we first read about Seinfeld’s routine. To us, it made more sense than Malcolm Gladwell’s 10,000-hour rule (it takes that long to achieve a high level of skill) as described in his 2008 book “Outliers”. After +30 years on Wall Street, I have come to the conclusion that mastery is first and foremost a process, and one that requires daily, sustained attention. The minute you stray from that path, you quickly start to lose it. As Seinfeld said, “Your only job is to not break the chain”.

    Sources:

    Jerry Seinfeld’s Daily Routine: https://www.balancethegrind.com.au/daily-routines/jerry-seinfeld-daily-routine/

    Tyler Durden
    Sun, 05/09/2021 – 21:35

  • Liz Cheney Faces Chopping Block As GOP Braces For Chaotic Week
    Liz Cheney Faces Chopping Block As GOP Braces For Chaotic Week

    House Republicans will return to Washington DC this week to address a growing schism in the party between never-Trumpers led by Rep. Liz Cheney (WY), and Rep. Elise Stefanik (NY) who hopes to replace her as chair of the House Republican Conference – a move endorsed on Sunday by House Minority Leader Kevin McCarthy – roomate of Democrat pollster Frank Luntz.

    “She’s done as a member of leadership. I don’t understand what she’s doing,” one former House GOP lawmaker told The Hill of Cheney’s ongoing attacks on former President Trump. “It’s like political self-immolation. You can’t cancel Trump from the Republican Party; all she’s done is cancel herself.“

    Cheney has repeatedly attacked Trump for ‘inciting’ the Jan. 6 ‘insurrection’ despite telling supporters to protest peacefully and then go home following the breach of the Capitol.

    GOP leaders hope that purging Cheney from the leadership ranks will move Republicans beyond their civil war over Trump — one that’s raged publicly since the Jan. 6 attack on the Capitol — and allow the party to unite behind a midterm campaign message that President Biden and the Democrats are too liberal for the country. –The Hill

    “There are still a few members that are talking about things that happened in the past, not really focused on what we need to do to move forward and win the majority back next year,” according to Rep. Steve Scalise (R-LA), the minority whip. “We’re going to have to be unified if we defeat the socialist agenda you’re seeing in Washington.”

    A victory by Stefanik would mark a symbolic shift back towards Trump by leading Republicans – as the former president remains highly engaged this election cycle and has threatened to politically obliterate any remaining GOP opposition.

    “By ousting her, what we’re saying is: We are repudiating your repudiation of the Trump policies and the Trump agenda and her attacks on the president,” according to Rep. Andy Biggs (R-AZ), adding “President Trump is the leader of the Republican Party. And when she’s out there attacking him, she’s attacking the leader of the Republican Party.”

    Cheney has already survived one challenge to her leadership post, in February, after she infuriated conservatives by voting to impeach Trump for inciting the Capitol rampage on Jan. 6. With the backing of Minority Leader Kevin McCarthy (R-Calif.), she easily kept her seat as conference chair, 145 to 61 by secret ballot.

    With McCarthy and Scalise fed up with Cheney and now backing Stefanik, the 36-year-old New Yorker is expected to prevail in Wednesday’s contest — a would-be victory for leaders who have failed to unite the conference behind a post-Trump strategy in the early months of the Biden administration. –The Hill

    That said, ousting Cheney is not without risk. She’s the highest-ranking GOP woman in Congress, the daughter of a former Vice President, and has a much more conservative voting record than Stefanik’s – which has caused some GOP leaders to fear alienating female Republican voters, particularly educated suburbanites who will be key votes in the 2022 elections.

    “You’re not going to win or hold some of these swing seats if it’s all about loyalty to a person,” said former Rep. Barbara Comstock (R-VA). “We certainly know that Trump divided the country, and lost the House and lost the Senate — he lost the [popular vote] two times — and you’re now going to hang your hat on the guy who got 47 percent” in 2020? she asked, snarkily.

    “This is nuts,” added Comstock. “He’s not going to get more votes. His people are dying off.”

    Cheney isn’t the only House Republican facing backlash for taking on Trump. Earlier in the week, Sen. Mitt Romney (R-Utah), one of seven Republican senators who voted this year to convict Trump, was booed and called a traitor at the Utah GOP state convention, where he narrowly beat back an effort to censure him.

    On Friday, the Ohio Republican Party Central Committee voted to censure Rep. Anthony Gonzalez (R-Ohio), Cheney and the eight other House Republicans who backed Trump’s impeachment in January. The Ohio GOP also formally called for Gonzalez’s resignation.

    House GOP leadership allies have argued that this week’s referendum on Cheney isn’t about the final purge of Trump foes from the party. They note that McCarthy stood by Cheney after she voted to impeach Trump, in a bid to unite the warring factions of his 212-member conference.

    But McCarthy allies say the GOP leader has no choice but to dump her this time around, arguing she has repeatedly undercut McCarthy and the GOP’s message during leadership news conferences, in media interviews and in op-eds where she continues to rail against the dangers of Trump and his “Big Lie.” -The Hill

    And so, Cheney’s ouster will set the tone for whether Trump still has his mojo within the Republican party. That, in turn, will be a key indicator of whether he’s got any kind of chance in 2024 – should he choose to run again.

    Tyler Durden
    Sun, 05/09/2021 – 21:10

  • Canadian Preacher Artur Pawlowski Arrested, Charged After Allegedly Defying Public Health Orders
    Canadian Preacher Artur Pawlowski Arrested, Charged After Allegedly Defying Public Health Orders

    Authored by Jack Phillips via The Epoch Times,

    Officials in Calgary, Canada, said they arrested Artur Pawlowski, a street preacher who allegedly defied local lockdowns, over the weekend.

    “Earlier today, police arrested two organizers of a church service who were in violation of a new court order obtained by Alberta Health Services (AHS) in relation to mandatory compliance of public health orders for gatherings,” said the Calgary Police Service in a statement on Saturday.

    His brother, David Pawlowski, was also taken into police custody.

    Both were charged with allegedly organizing an illegal in-person gathering as well as  “requesting, inciting or inviting others” to join them, according to police.

    The force said that Alberta’s provincial government obtained a bench order from a court that applies to “protests, demonstrations and rallies” that imposes “new restrictions on organizers of protests and demonstrations requiring compliance with public health orders including masking, physical distancing and attendance limits.”

    “It is important to understand that law enforcement recognizes people’s desire to participate in faith-based gatherings as well as the right to protest. However, as we find ourselves in the midst of a global pandemic, we all must comply with public health orders in order to ensure everyone’s safety and wellbeing,” the police service added.

    A video uploaded on Twitter that appeared to show his arrest on a highway included Pawlowski’s voice: “If you are watching this video, it means that they have successfully arrested me.” It included a link to a crowdfunding website for his legal defense.

    During the COVID-19 pandemic, the Pawlowski brothers have held gatherings and have denied officials’ entry into their church located in Dover, Calgary, according to reports.

    Pawlowski drew headlines several weeks ago after he compared police with the Nazi Gestapo paramilitary forces and fascists.

    “And they did it again! Today, the Gestapo Attacked our Church Again! History is being repeated in front of our eyes! Another sad day for Freedom and democracy!” Pawlowski wrote on April 24.

    Before that, in a viral clip, he was seen in a video telling officers: “I do not cooperate with Gestapo!”

    “I’m not interested in any word that you have to say. I do not cooperate with Gestapo, I do not talk to the Nazis,” Pawlowski told officers on Easter Sunday weekend, adding, “Brown shirts of Adolf Hitler. You are Nazi, Gestapo, communist, fascists! I do not cooperate with Nazis!”

    On April 3, Pawlowski was fined $1,200 for allegedly holding a public gathering of more than 15 people at his Street Church, in violation of COVID-19 health orders.

    Pawlowski, who emigrated from Poland to Canada in the 1990s, told Fox News in April that Canadian police are engaging in Soviet-like activity during the pandemic. He has also been fined repeatedly for violating public health orders by holding church services.

    “I grew up under a communist dictatorship behind the Iron Curtain, under the boot of the Soviets, and I’m telling you that’s no fun at all. It was a disaster,” he said in the interview. “So, it was like a flashback when those police officers showed up at my church. Everything kind of came back to life from my childhood, and the only thing I could do is to fend off the wolves as a shepherd, and I used my voice to get rid of them,” Pawlowski added.

    Tyler Durden
    Sun, 05/09/2021 – 20:45

  • The Generals Will Be Back: Goldman Assures Its Clients That FAAMGs Will Make Triumphant Return
    The Generals Will Be Back: Goldman Assures Its Clients That FAAMGs Will Make Triumphant Return

    Earlier today, Morgan Stanley’s chief equity strategist Michael Wilson looked at what was likely the highlight of Q1 earnings season, pointing out that “the vaunted FAANMG stocks sold off on terrific 1Q earnings results after an outsized run into the event. This was… a reminder that stocks often peak on good news.”

    Not to make a too fine point out of it, suddenly everyone is focusing on the performance of the FAAMG stocks which, after soaring for much of 2020 when they returned 56% and accounted for 7% of the 18% S&P 500 return last year, have gone nowhere in recent months prompting concerns that it’s all downhill from here.

    Not surprisingly, FAAMGs were also the topic of the latest weekly note from Goldman’s chief equity strategist David Kostin, who writes that confronted with the prospect of decelerating US economic activity, the bank’s clients are suddenly freaking out about a breakdown in the 5 Generals, and are “asking about the potential for a transition in market leadership” even as “many investors have expressed the view that economic deceleration should support the outperformance of the largest “Big Tech” stocks in the market”, a topic which Goldman analyzed recently and which view the bank supports.

    Despite its ringing endorsement of FAAMGs, Kostin admits that one common concern with this thesis relates to the high current market concentration compared with history, to wit: he five largest stocks in the S&P 500 represent 21% of index capitalization, significantly more than the long-term average of 14%, above the 18% at the peak of the Tech bubble in 2000, and only trailing the 25% level reached during mid-2020. This large index weight of the top stocks is important because it serves as a practical headwind to continued appreciation given SEC restrictions on portfolio concentration that limit how much mutual funds can continue to buy them.

    Of course, there is a fundamental reason why investors have piled into the FAAMGs, first and foremost, the durability of the revenue streams of these firms during 2020 was in stark contrast with the extreme declines exhibited by many other businesses. Last year, sales for the median S&P 500 company collapsed at its nadir by 7% before partially recovering to post flat full-year growth. In contrast, the five FAAMG stocks collectively grew sales by 18% even at the point of maximum contraction for the economy in 2Q. They grew full-year 2020 revenues by 21% vs. 2019.

    Q1 results show that the FAAMG growth persists. The median S&P 500 stock reported year/year sales growth of 9% and 57% of S&P 500 firms beat consensus sales estimates, with a median positive surprise of 4%. At the same time, the five largest stocks reported aggregate 1Q 2021 sales of $321 billion –a remarkable $24 billion or 8% above consensus – for year/year growth of 41%. For 2022, consensus expects the five stocks will post revenue and EPS growth of 14% and 10%, respectively, compared with 6% and 10% for the median S&P 500 stock.

    But according to Goldman it’s not the topline growth that is the most distinguishing aspect of the FAAMG business models, but the amount and share of operating cash flow they devote to driving growth. During 2020, the five FAAMG stocks, spent $128 billion in R&D and another $104 billion on capex, accounting for 22% of the S&P 500 total. FAAMG posted a growth investment ratio of 64% over the last three years vs. 11% for the typical stock. As Goldman puts it, “they are investing their way to superior growth.”

    While those are the clearest positives propping up the FAAMGs, they are largely priced in; at the same time there is a list of sizable and growing risks, starting with Biden’s proposed tax reform which would raise both corporate and capital gains tax rates and represent possible sources of risk for the FAAMG stocks. If the Biden corporate tax plan were fully enacted, FAAMG 2022E earnings would decrease by roughly 9% relative to consensus expectations. FAAMGs generate approximately 55% of income abroad. Using a back-of-the-envelope approach, applying the proposed 28% domestic statutory rate and 21% tax rate on foreign income to each portion of FAAMG’s income, their collective effective tax rate would rise by 7% to 24% (vs. +6 pp to 25% for the median S&P 500 stock) and would decrease consensus 2022 FAAMG earnings by 9% (vs. -8% for the S&P 500).

    Separately, the FAAMG stocks are also vulnerable to higher capital gains rates. If the capital gains tax rate becomes set to rise in 2022, investors subject to the higher rate may choose to realize some of their substantial capital gains in 2021 at the lower current tax rate. The FAAMG stocks have appreciated by $5 trillion during the last 5 years, accounting for 29% of the S&P 500 market cap increase during that time. Needless to say, if there will be selling, it could be furious.

    It doesn’t end there: valuation multiples also pose a risk to the FAAMG stocks. Investor conversations around FAAMG inevitably turn to their valuations. FAAMG trades at a forward P/E of 29x (90th percentile for the top 5 stocks since 1980), compared with 21x for the remaining 495 S&P 500 stocks. This 34% P/E premium for the five largest stocks ranks in the 76th percentile since 1980.

    That said, if multiples were to shrink everything would crash, which is why Kostin writes that “the current low level of interest rates and the fast pace of expected growth support the lofty multiples of the FAAMG stocks.” While the nominal 10-year Treasury yield has risen this year, at 1.6% it remains extremely low in historical terms, Kostin also makes some other valuation observations:

    Low rates support the valuation of high growth, long duration stocks.FAAMG has an earnings yield gap (E/P less 10Y UST) of 191 bp, above the 40-yearaverage of 144 bp, indicating that the stocks are attractively valued adjusting for thelow level of rates. Valuation on a growth-adjusted basis also looks more reasonable:FAAMG actually trades at a 14% PEG discount to the median S&P 500 stock (1.7xvs. 1.9x).

    While all this worked in an ultra low rates environment, rising interest rates represent a potential headwind to FAAMG returns in coming months (incidentally Goldman rates strategists forecast10-year US Treasury yields will rise by 34bps to 1.90% by the end of 2021). Furthermore, all five FAAMG stocks have above-average duration compared with the Russell 1000, meaning they are especially sensitive to moves in long-term interest rates. As yields rose sharply from November through March, FAAMG underperformed the S&P 500 by 7 pp (+21% vs. +14%). A similar period of rising rates in 2H 2021 would likely hamper FAAMG returns.

    Putting all this together, Kostin writes that the greatest fundamental risk to the continued market leadership of the five largest companies “appears to be the potential intervention of regulators.” He adds that recent Biden administration appointments “suggest some risk of a stricter regulatory regime and tighter antitrust enforcement.” He has a point: with the exception of MSFT, the other four FAAMG stocks face a laundry list of legal battles and investigations over their market power and competitive practices ranging from commercial litigation to DoJ and FTC antitrust lawsuits to Congressional probes.

    Then again, as Kostin concludes, his year-end 2021 S&P 500 index forecasts of 4300 and 4600 at the end of 2022 assume these companies generate sales and earnings in line with consensus expectations, their relative valuations remain stable, and therefore implicitly that antitrust actions have no major impact.

    In short, Goldman clients can just relax and keep buying the FAAMG dip.

    Tyler Durden
    Sun, 05/09/2021 – 20:21

  • Derby Drug Bust: Thoroughbred On Roids Could See Victory Revoked
    Derby Drug Bust: Thoroughbred On Roids Could See Victory Revoked

    Winner of the famed Kentucky Derby on May 1st, the thoroughbred Medina Spirit, could have its victory removed after failing a post-race drug test, it was revealed Sunday. The growing scandal included Churchhill Downs taking the dramatic action of immediately suspending Hall of Fame trainer Bob Baffert over suspicions he’s been doping horses for years.

    Apparently “horse doping” is pervasive and the sport has lately tried to crack down on such injury-masking & performance-enhancing drugs: “Baffert is a Hall of Fame horse trainer, but five of his horses have fail drug tests in about the past year, while the sport’s leaders have vowed to crack down on horse doping, per AP,” Axios writes.

    Medina Spirit, via KentuckyDerby.com

    Specifically the doping allegation stems from an illegal amount of a type of steroid typically used on horses to mitigate pain and swelling called betamethasone. Apparently it was double the limit allowed for the Kentucky Derby.

    The controversy is expected to be prolonged given Baffert is challenging the allegation, saying he’ll fight the Churchhill Downs ruling “tooth and nail” – and the fact that a winning horse hasn’t faced disqualification over doping since 1968. He said in a statement, “I got the biggest gut-punch in racing, for something I didn’t do.”

    As to whether the title will be stripped altogether, the race organization had this to say:

    “Churchill Downs will not tolerate it,” the statement said. “Given the seriousness of the alleged offense, Churchill Downs will immediately suspend Bob Baffert, the trainer of Medina Spirit, from entering any horses at Churchill Downs Racetrack. To be clear, if the findings are upheld, Medina Spirit’s results in the Kentucky Derby will be invalidated and Mandaloun will be declared the winner.“

    If a further test confirms the initial drug test results, Medina Spirit will be disqualified, which has many naturally wondering how such a decision would impact betting and settling results. In recent years total gambling on the Kentucky Derby has reached well over $150 million changing hands. 

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

    Partly at issue here is that Baffert’s horses have failed about 30 drug tests in the past four decades, according to The New York Times, resulting in an avalanche of accusations from competitors for decades.  

    Tyler Durden
    Sun, 05/09/2021 – 19:55

  • $170,000 Per Year: The Post-COVID Hiring Crunch Is Hitting The World Of AI Data Scientists
    $170,000 Per Year: The Post-COVID Hiring Crunch Is Hitting The World Of AI Data Scientists

    We already know that minimum wage payers are having trouble recalling workers for their post-Covid plans. And why wouldn’t they? Laid off workers have been making more on unemployment and PPP loans over the last year than they likely ever made working rank-and-file jobs in years past.

    But now the hiring drought is starting to hit higher end jobs, like AI talent, the Wall Street Journal notes. 

    To drum up interest, companies are now sponsoring award programs and scouting software development contests in the hunt for data scientists and other AI professionals. 

    Peter Krensky, director, analyst on Gartner Inc.’s business analytics and data science team, told the Journal: “You’ve got to be creative about finding people that care about more than just money.”

    And while base salary for these workers is generally $120,000, companies are now offering up to $170,000 or more to entice talent. Companies have turned to recruiters and internship programs to find talent, but Krensky says that’s “not enough” given today’s competition. 

    “There were 37,000 AI job postings in the first quarter of this year, up more than 45% from the fourth quarter of 2020,” the Journal reported.

    Among those seeking talent are companies like J.P. Morgan, who is looking for “hundreds” of AI researchers and scientists (totally normal for a bank). The bank says it has recruited through deep relationships with computer science programs at universities. In 2018, the bank hired Carnegie Mellon University’s head of machine learning as its head of AI research. 

    She now runs an award program that recognizes university faculty and Ph.D. students. The awards come with financial support and can also recognize “highly talented” post-graduate work. The banks says it has hired “several” award recipients. 

    Carol Juel, executive vice president and chief information officer at Synchrony Financial, told the Journal that her bank has also increased AI hiring over the last 3 years. The bank has hosted “datathons” at the University of Illinois, partnering with the school’s statistics department and providing software training and tools to help students “think like data scientists”. 

    “You have to go to where the talent is,” Juel said. 

    We’re certain that’s why businesses are also watching other AI contests, like those run by Google’s Kaggle, to see who can solve complex problems for cash prizes. It likely makes the transition to doing such work for a living – for both the candidate and the business – much easier. 

    Tyler Durden
    Sun, 05/09/2021 – 19:30

  • The Mystery Of Dark Energy
    The Mystery Of Dark Energy

    Authored by Alex Kimani via OilPrice.com,

    “Dark energy is not only terribly important for astronomy, it’s the central problem for physics. It’s been the bone in our throat for a long time.”

    – Steven Weinberg, Nobel Laureate, University of Texas at Austin.

    More than three years into its quest to solve the nature of dark energy and illuminate the origin, evolution, and fate of our universe, the Hobby-Eberly Telescope Dark Energy Experiment (HETDEX) project remains on track to complete the largest map of the cosmos ever.

    HEDTEX, a project by Penn State University scientists, aims to create a three-dimensional map of 2.5 million galaxies that will yield valuable insights into the byzantine puzzle of why the expansion of the universe is speeding up over time, a property attributed to the so-called dark energy.

    But first things first, what exactly is dark energy?

    Dark energy in an expanding universe

    Source: NASA.org

    The observable universe consists of three known components: normal matter, dark matter, and dark energy. Dark energy is the most abundant at 68%, with dark energy making up another 27% of the universe while ordinary matter constitutes just 5%.

    Today, there is consensus among astronomers that the universe we inhabit is expanding despite the presence of gravity, and that its expansion is accelerating, giving rise to the notion of a repulsive force that astronomers have dubbed ‘dark energy,’ though the concept has only been around for a little more than 20 years. Generally, astronomers and astrophysicists assign the prefix ‘dark’ to concepts they have little or no clue about.

    Dark energy is the name given to the mysterious force that’s causing the rate of expansion of our universe to accelerate, rather than to slow down and go out in a Big Crunch as it ages. That’s contrary to what one might expect from a universe that was birthed by an event like the Big Bang. 

    Back in 1917 when Albert Einstein came up with the general theory of relativity that laid the foundations of the Big Bang and the universe as a whole, he and most leading scientists were convinced that the cosmos was static and non-expanding. Einstein introduced the Cosmological Constant to help explain why the universe was not collapsing under the attractive force of gravity.

    It wasn’t until 12 years later when Edwin Hubble discovered that the universe is in fact expanding, with galaxies farther away from our planet moving away faster than those that are closer. The model of a static universe was finally abandoned, forcing Einstein to quickly modify his theories and come up with two new distinct models of the expanding universe, both of them without the cosmological constant, just a year later.

    However, it would be decades later–1998 to be precise–before astronomers discovered that the universe was dominated by dark energy and not normal matter as earlier thought.

    Solving dark energy

    More than two decades after the discovery of dark energy, astronomers remain in the dark regarding what it’s all about.

    However, several theories have been advanced to attempt to explain dark energy.

    Ironically, Einstein’s previously abandoned cosmological constant is one of the frontrunners, which modern-day physicists describe as vacuum energy.

    “The vacuum in physics is not a state of nothing. It’s a place where particles and antiparticles are continuously created and destroyed. The energy produced in this perpetual cycle could exert an outward-pushing force on space itself, causing its expansion, initiated in the big bang, to accelerate,” says Penn State University Associate Professor of Astronomy and Astrophysics, Donghui Jeong.

    But here’s the rub with the concept of vacuum energy: The theoretical calculations of vacuum energy diverge from actual observations by a factor of as much as 10120.

    Clearly this is a massive discrepancy that could necessitate a reworking of the current theory. 

    Another possibility: Einstein’s theory of gravity is wrong from the get-go hence leading to erroneous conclusions.

    Nonetheless, the cosmological constant in the form of vacuum energy remains the leading candidate that explains dark energy.

    HETDEX ambition

    Obviously, mapping 2.5 million galaxies is no mean undertaking and requires quite a bit of elbow grease. This is not made any easier by the fact that whereas other comparable studies measure the universe’s expansion using distant supernovae or a phenomenon known as gravitational lensing, HETDEX is focused on sound waves from the big bang, called baryonic acoustic oscillations. 

    Luckily, HETDEX has secured more than $40 million in funding and a set of more than 150 spectrographs called VIRUS (Visible Integral-Field Replicable Unit Spectrographs), that gathers light from far-away galaxies into an array of some 35,000 optical fibers where it is split into its component wavelengths.

    Another perk: HETDEX is the first probe to try to do a whole lot of spectroscopy and then figure out what they will see by observing broad swaths of sky instead of specific, predetermined objects, meaning they will end up collecting an insane amount of data. Who knows, that treasure trove might yield unexpected insights that might help mankind in its quest to eventually colonize the universe.

    Tyler Durden
    Sun, 05/09/2021 – 19:05

  • US Declares State Of Emergency To Keep Gasoline Flowing After Colonial Fails To Restart Hacked Pipeline
    US Declares State Of Emergency To Keep Gasoline Flowing After Colonial Fails To Restart Hacked Pipeline

    Update 9:00pm ET:  The US government declared a state of emergency late on Sunday, lifting limits on the transport of fuels by road in a bid to keep gas supply lines open as fears of shortages spiked after the continued shutdown of the Colonial Pipeline.

    “This Declaration addresses the emergency conditions creating a need for immediate transportation of gasoline, diesel, jet fuel, and other refined petroleum products and provides necessary relief,” the Department of Transportation said. White House Press Sec Jen Psaki added that “as the Administration works to mitigate potential disruptions to supply as a result of the Colonial Pipeline incident, @USDOT is taking action today to allow flexibility for truckers in 17 states.”

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

    The move lifted limits on the transport of fuels by road to ease the fallout from the continuing closure of the Colonial pipeline, which carries almost half the fuel consumed on the US East Coast, following a ransomware cyber attack on Friday.

    The decision comes as the government scrambles to deal with the fallout from the closure of Colonial, the biggest refined products pipeline in the US, transporting 2.5m barrels of fuel a day from refineries on the Gulf Coast to markets such as Atlanta, Washington and New York (see more below).

    If the pipeline is not quickly reopened the impact on prices could become more severe in the coming days, said Patrick De Haan, head of petroleum analysis at data provider GasBuddy. “We’re realizing the gravity of it is maybe worse than what we’d expected,” said De Haan. “There’s still a little breathing room, we’re starting to run low on it. But Monday, Tuesday if there’s no news, you know we’re dealing with something fairly significant.”

    * * *

    Just in case the US didn’t already have a “transitory hyperinflation” problem, gasoline futures soared more than 4% – and are likely to jump much more – late on Sunday after the Colonial Pipeline announced that while some smaller lateral lines between terminals and delivery points are now operational, its mainlines (Lines 1, 2, 3 and 4) remain offline since late Friday after the company suffered a crippling cyberattack that affected its key IT systems.

    Colonial operates Line 1 for gasoline and Line 2 for diesel and jet fuel from Pasadena, Texas, some 15 miles from the nation’s largest refineries, to Greensboro, North Carolina, at a combined 2.5 million barrels a day. They merge at Greensboro to feed a line carrying about 900,000 barrels a day into New York Harbor, and other East Coast pipelines.

    Colonial said that it is “in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.” Full statement below:

    Update — Sunday, May 9, 5:10 p.m.

    On May 7, Colonial Pipeline Company learned it was the victim of a cybersecurity attack and has since determined that the incident involved ransomware. Quickly after learning of the attack, Colonial proactively took certain systems offline to contain the threat. These actions temporarily halted all pipeline operations and affected some of our IT systems, which we are actively in the process of restoring.

    Leading, third-party cybersecurity experts were also immediately engaged after discovering the issue and launched an investigation into the nature and scope of this incident. We have remained in contact with law enforcement and other federal agencies, including the Department of Energy who is leading the Federal Government response.

    Maintaining the operational security of our pipeline, in addition to safely bringing our systems back online, remain our highest priorities. Over the past 48 hours, Colonial Pipeline personnel have taken additional precautionary measures to help further monitor and protect the safety and security of its pipeline.

    The Colonial Pipeline operations team is developing a system restart plan. While our mainlines (Lines 1, 2, 3 and 4) remain offline, some smaller lateral lines between terminals and delivery points are now operational. We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.

    At this time, our primary focus continues to be the safe and efficient restoration of service to our pipeline system, while minimizing disruption to our customers and all those who rely on Colonial Pipeline. We appreciate the patience and outpouring of support we have received from others throughout the industry.

    Meanwhile, downstream customers, which includes pretty much the entire Eastern seaboard, are starting to freak out as they face a new week without the primary source of gasoline supply for hundreds of millions of customers.

    In response to the news, gasoline futures jumped 4% to $2.21 a gallon, approaching the highest since 2014. WTI and Brent both spiked more than 1%, while other products such as diesel and jet fuel are also likely to jump.

    Should Colonial be unable to bring its main pipeline back online, which as a reminder were hacked by a ransomware group called DarkSide, according to Allan Liska, senior threat analyst at cybersecurity firm Recorded Future, there is no telling how high prices will shoot up as Colonial supplies nearly half the east coast gasoline.

    On Friday, the national average stood at $2.96 a gallon Friday, according to auto club AAA, and with national gasoline inventories ample, the pump price wasn’t expected to tick much higher until Memorial Day at the end of May, which is traditionally viewed as the start of the U.S. summer driving season. However, it now appears that we can add gas to the list of items that have seen prices soar. Gasoline last bested the $3 average in October 2014.

    Price increases in road fuel may stoke even more worries about inflation as commodities from oil to lumber to corn skyrocket with the world’s major economies emerging from pandemic restrictions. The oil industry was gearing up to meet what is expected to be a surge in fuel demand as newly vaccinated Americans take to the roadways and skies this summer. The downed Colonial Pipeline is a key artery for gasoline, diesel and jet fuel produced by oil refiners on the U.S. Gulf Coast and major metropolitan areas between Atlanta and New York.

    “It all comes down to the duration of the disruption. If it lasts longer, it’s likely to result in some location dislocations — shortage of oil products in the East Coast, abundance in the Gulf region. That will support New York product prices and might attract more oil products from abroad,” said Giovanni Staunovo, commodity analyst at UBS Group AG.

    One bank that is optimistic on the outcome of the shutdown is Goldman, its commodities strategist Damien Courvalin writing on Sunday that “the Colonial pipeline disruption likely to be brief” while “falling inventories will exacerbate the impact of future potential outages.” Some more details from the note:

    With no physical damage to the pipeline, sufficient PADD1 inventories and above seasonal gasoline imports into the region, only a long outage (likely more than 5 days) would materially tighten local supplies. The Southeast region is most at risk of shortages given tighter inventories in the PADD 1C region.

    As prior Colonial outages have shown, like in 2016, resupply is further likely to be rapid:

    1. the Colonial pipeline was running below capacity so a resumption of flows at capacity would accelerate the restocking,
    2. Kinder Morgan is working to accommodate additional barrels on its PPL line,
    3. vessels from the USGC and EU can arrive in 7 to 14 days, while
    4. the US administration could waive the Jones Act shipping restriction as well as summer gasoline requirements.

    As a result, while NY Harbor petroleum product June cracks and June-July timespreads are set to rally on Sunday’s open/Monday should the pipeline not have been restarted by then, such moves are likely to be short-lived and mean reverting, with the June RBOB contract expiring on May 28.

    Not everyone is so sure, and Bloomberg reports that traders are already seeking vessels to deliver gasoline that would have otherwise been shipped on the Colonial system. Some tankers are being secured to temporarily store gasoline in the U.S. Gulf in the event of a prolonged shutdown, they said.

    There is some good news: the terminus of the pipeline, New York, was well stocked with fuel ahead of the attack and could weather the upset if missing fuel is replaced or the line restarts quickly. East Coast gasoline stockpiles at the end of April were near five-year seasonal averages. Of course, a lenghty shutdown would mean gasoline shortage the likes of which were last seen in the 1970s…

    … which would be poetic justice since price are already soaring at a pace that has surpassed America’s hyperinflationary period, which ended with the Volcker Fed hiking rates to 20% in 1980.

    Tyler Durden
    Sun, 05/09/2021 – 18:23

  • Rickards: The Sky Is Falling
    Rickards: The Sky Is Falling

    Authored by James Rickards via The Daily Reckoning,

    What do you think is America’s most serious geopolitical challenge – China, Russia, Iran, maybe North Korea?

    None of the above, apparently. According to President Biden’s Director of National Intelligence, Avril Haines, climate change needs to be “at the center” of countries’ national security and foreign policy.

    Well, Treasury Secretary Janet Yellen will be doing her best to make sure the crusade against climate change gets plenty of funding.

    Yellen has called for a “whole-of-economy” approach to fighting climate change — which essentially means massive subsidies to finance so-called green energies and discourage fossil fuel production.

    In other words, climate alarmism is the official position of the Biden administration.

    Where’s the Science?

    Alarmism has no basis in observable science. It’s all the result of climate models, which have been consistently wrong about warming because they reflect the biases of their programmers.

    Garbage in, garbage out.

    They’re kind of like the climate’s version of the Fed’s economic models. They’re always wrong, and not by a little.

    If you listen to the climate alarmists, they’ll tell you we only have a few years to save the planet. If we don’t eliminate CO2 emissions quickly, the planet will warm, sea levels will rise, storms will intensify, cities will be inundated, and lives will be lost to starvation, disease and dehydration.

    Every one of those claims is empirically false, but that doesn’t stop the global power elite from trying to shut down the oil and gas industries and replace power generation with solar, wind and hydropower or so-called renewable sources.

    The War Against Plants

    Here are the facts: The best evidence is that the planet is not warming, but it may be cooling under the influence of a periodic minimum in solar flare activity and increased volcanic activity (the two may actually be related), which creates an atmospheric ash layer that cuts down on sun intensity.

    Sea levels may be rising slightly, but the tempo is about 7 inches in the next 100 years. That’s hardly cause for alarm considering that sea levels rose 400 feet since the end of the last ice age, and humans adapted just fine.

    CO2 is a trace gas that makes up just 0.04% of the atmosphere (400 parts per million) and doesn’t have a major impact as far as science can tell, except that it is essential for plant nourishment.

    Based upon recent studies, a doubling of carbon dioxide would likely result in a temperature increase of only about 1.5 degrees Celsius. That’s hardly a crisis.

    There is some danger that if CO2 levels are reduced too much, plant life may suffer. The reason hurricanes are producing more property damage is not because the storms are more intense – peak intensity in the past hundred years was in the 1940s – it’s because fools with federally subsidized flood insurance are building mansions on sand bars where they don’t belong and the mansions get blown away in predictable storms.

    The Polar Bears Are Getting Fat

    Remember when the same climate alarmists said in 1988 that the New York City subways would be flooded by 2010? Never happened. The polar bears are also doing just fine.

    Recent reports show the polar bear population is thriving, and one report showed that polar bear obesity is an emerging problem because the bears have so much to eat.

    Yet, the claims of the alarmists are even worse than junk science. Even further, the “solution” to these non-problems doesn’t work either. Simply put, solar and wind power cannot replace oil and gas in producing electricity to supply the grid.

    This is because solar and wind are unreliable. When the wind doesn’t blow and the sun doesn’t shine (which is often in most places), there is no power output at all.

    The only way to overcome the reliability problem is with immensely expensive batteries. And battery production itself uses up enormous amounts of electricity, poisonous chemicals, and metals, creating disposal problems.

    Electric Vehicles Aren’t So Green

    Solar and wind can be supplemented by oil and gas (and nuclear power), but they cannot replace them due to unreliability and the expense of batteries.

    And do you think you’re going green by driving an electric car? Well, research by the Swedish Environment Institute reveals that up to 17.5 tons of carbon dioxide go into producing an electric battery.

    If you keep the car for 10 years or longer, the battery will have to be replaced, meaning another 17.5 tons of carbon dioxide.

    And electric charging stations largely depend on fossil fuels to generate electricity.

    In comparison, a standard internal combustion engine might produce about 45 tons of carbon dioxide after 160,000 miles, about 16 years of use on average.

    But the Biden administration seems determined to push the Green New Deal anyway, despite all the costs and little benefit.

    Get ready for higher energy costs, power outages, death and damage from cold spells, and possible lines at the gasoline pump. The Green New Deal is a policy fiasco in the making that will take us back to the 1970s.

    ESG Investing

    Of course, many corporations are fully on board with the environmental agenda because it means subsidies and tax breaks if they adopt the right policies.

    Have you heard about ESG investing?

    If not, you soon will. ESG stands for Environmental, Social and Governance, which are the three factors business managers and investment advisors are implored to take into account when making business and asset allocation decisions.

    Prior to ESG, managers were only accountable for corporate profits (which could be based on a wide array of factors, including good personnel policies and good community relations), and investment managers were only accountable for consistent high risk-adjusted returns.

    Making the environment better, improving society and ensuring good governance outside the boardroom was considered to be the job of government, civil society or not-for-profit entities. Companies were all about the bottom line. Not anymore.

    Because of their wealth, scope and influence, companies have been hijacked by the power elite and ideologues to carry water for a host of social programs and causes from public housing and education to climate change.

    They’re going from shareholder capitalism — which places the shareholders as number one — to “stakeholder” capitalism — which takes the broader community into consideration.

    Maybe that’s good overall, maybe it’s not. Regardless, what one thinks of this evolution in the purpose of a corporation is irrelevant; it’s happening, and investors need to take it into account because it can be extremely profitable.

    Might as Well Profit From It All

    Assets under management in ESG funds are now over $2 trillion, more than the largest sovereign wealth funds. These funds and large asset managers such as BlackRock are scouring the corporate landscape for companies that meet their ESG investment criteria.

    Since there is a scarcity of attractive ESG companies relative to the funds chasing ESG investments, the stocks of good candidates are likely to outperform. Funds are also putting pressure on corporate management to conform existing corporate practices to ESG measurements or face shareholder revolts.

    Since the ESG target companies are overwhelmingly green (in areas of solar and wind power, recycling and efficient construction), investors may find even better opportunities in blue projects involving water recycling, irrigation, and cutting-edge vertical farming.

    Again, whether you agree with the new model or not is irrelevant. It’s happening anyway.

    These trends are just beginning, so there’s still time for investors to jump on the red-hot green and blue bandwagon and put their portfolios in the black.

    Tyler Durden
    Sun, 05/09/2021 – 18:15

  • Compressed Air Grid 'Battery' To Challenge Tesla Powerpack 
    Compressed Air Grid ‘Battery’ To Challenge Tesla Powerpack 

    Solar, wind, batteries, nuclear, tidal power, among others, provide carbon-free electricity. But their generation is usually immediately absorbed into the power grid for use or stored in lithium-ion batteries. Large-scale energy hoarding is expensive, and quite frankly, with base metal prices skyrocketing, maybe unattainable unless the Biden administration allocates billions of dollars to upgrade the grid. 

    Toronto-based Hydrostor has found a solution to storing power on the grid that doesn’t involve batteries but instead stores energy in the form of compressed air in underground chambers. 

    California is becoming the new site for two new compressed-air energy storage plants that “will soon rival the world’s largest non-hydroelectric facilities and hold up to 10 gigawatt-hours of energy,” said Popular Mechanics. 

    Compressed air is part of a growing type of energy storage to stabilize the grid. Here’s how Hydrostor’s: A-CAES technology works:

    A-CAES uses surplus electricity from the grid or renewable sources to run an air compressor. The compressed air is then stored in a big underground tank until energy is needed, at which point it’s released through a turbine to generate electricity that’s fed back into the grid.

    Rather than vent the heat generated as the air is compressed, Hydrostor’s system captures that heat and stores it in a separate thermal storage tank, then uses it to reheat the air as it’s fed in to the turbine stage, which increases the efficiency of the system. This could prove to be key; compressed air storage systems have typically offered round-trip efficiencies between 40-52 percent, and Quartz is reporting more like 60 percent for this system.

    Hydrostor’s A-CAES also makes use of a closed-loop reservoir to maintain the system at a constant pressure during operation. The storage cavern is partially filled with water and as the compressed air is piped in, the water is forced into a separate compensation reservoir. Later, when the air is needed, the water is pumped back into the air storage cavern, pushing the air out towards the turbine. – New Atlas 

    Hydrostor provides three-minute of how the technology works. 

    Hydrostor has two major projects in active development – one in southern Kern County and one in Central California, creating a more practical way to store energy on the grid than costly batteries. 

    “Hydrostor’s patented and commercially proven A-CAES technology provides 8-12+ hours of energy storage, versus the 1-4 hours that current battery technologies can feasibly provide,” Hydrostor said. 

    When it comes to longevity, a compressed air energy storage plant has a lifespan of more than 50 years, far outpacing battery farms, like Elon Musk’s Tesla Powerpacks. 

    … and to be clear – all this talk about net-zero carbon emissions talk in the next couple of decades is just a guess by policymakers. 

    Tyler Durden
    Sun, 05/09/2021 – 17:50

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