- The WEF’s Stakeholder Capitalism Is Just Global Fascism By Another Name
The WEF’s Stakeholder Capitalism Is Just Global Fascism By Another Name
Authored by Brandon Smith via Alt-Market.us
The concept of “fascism” was originally entered into the Encyclopedia Italiana by Italian philosopher Giovanni Gentile, who stated that “Fascism should more appropriately be called corporatism because it is a merger of state and corporate power.” Benito Mussolini would later take credit for the quote as if he had written it himself, but it’s important to note because it outlines the primary purpose of the ideology rather than simply throwing the label around at people we don’t like as a dishonest means to undermine their legitimacy.
Despite the fact that leftists today often attack conservatives as “fascists” because of our desire to protect national boundaries and western heritage, the truth is that all fascism is deeply rooted in leftist philosophies and thinkers.
Mussolini was a long time socialist, a member of the party who greatly admired Karl Marx. He deviated from the socialists over their desire to remain neutral during WWI, and went on to champion a combination of socialism and nationalism, what we now know as fascism. Adolph Hitler was also a socialist and admirer of Karl Marx, much like Mussolini. It is actually hard to find where Marx, the communists and the fascists actually differ from each other – A deeper sense of nationalism seems to be one of the few points of contention.
Though Marx saw the existence of nation states as temporary to the proletariat and to the ruling class, he noted that the industrialists were erasing national boundaries anyway. Marx argues in the Communist Manifesto with some optimism:
“National differences and antagonisms between peoples are already tending to disappear more and more, owing to the development of the bourgeoisie, the growth of free trade and a world market, and the increasing uniformity of industrial processes and of corresponding conditions of life.”
Marx saw the development of corporate power as useful and the next necessary step towards socialism, noting that joint-stock companies (corporations) and the credit system are:
“The abolition of the capitalist mode of production within the capitalist mode of production itself.”
In other words, corporations are viewed as a tool for the eventual transition to a socialist “Utopia” and the death of free markets. Once again, we see there is very little difference in motive between the political left and the fascists. The natural progression of every form of Marxism, communism, socialism, fascism etc. all ultimately lead to a kind of globalist ideology and erasure of cultural separation. The methods might differ slightly but the end result is the same. Some think this is a good thing, but it is actually quite poisonous.
Globalism requires an overarching social dynamic, a single hive mind, otherwise it cannot survive. If people have the ability to choose or create better options (or different options) for living then globalism loses significance. The existence of choice has to be erased. This is a behavior that the political left has fully embraced and they are more than happy to work hand-in-hand with corporate oligarchs to make their ideal system a reality. Long gone are the days of the anti-corporate progressive – They LOVE corporate dominance, but only if those companies promote and enforce leftist models for society.
Mussolini’s fascism is at the root of the very corporate governance that leftists applaud and lust after today. They have far more in common with fascists than they realize.
The new fascism is a re-branded philosophy best represented by something called “Stakeholder Capitalism.” It is a term often used by globalists at the World Economic Forum and the head of the WEF, Klaus Schwab. The media friendly definition of Stakeholder Capitalism is:
A form of capitalism in which companies do not only optimize short-term profits for shareholders, but seek long term value creation, by taking into account the needs of all their stakeholders, and society at large.
But who are “all stakeholders” in the opinion of the WEF?
Well, according to Klaus Schwab they are all of human civilization, now and in the future. In other words, the goal of SHC is for corporate leaders and globalist bureaucracy to take responsibility for the entire world, not just their own employees, shareholders and profits. And such leaders would not be acting as individuals, they would be acting as a collective. In other words, SHC requires all major corporations to act as a single unit with a single purpose and a unified collectivist ideology – An ideological monopoly.
As Klaus Schwab states:
“The most important characteristic of the stakeholder model today is that the stakes of our system are now more clearly global. Economies, societies, and the environment are more closely linked to each other now than 50 years ago. The model we present here is therefore fundamentally global in nature, and the two primary stakeholders are as well.
…What was once seen as externalities in national economic policy making and individual corporate decision making will now need to be incorporated or internalized in the operations of every government, company, community, and individual. The planet is thus the center of the global economic system, and its health should be optimized in the decisions made by all other stakeholders.”
The SHC concept is deceptive on its very face because it pretends as if corporations will be held accountable by the public within some form of “business democracy,” as if the public will have a vote on what the corporations do. In reality, it will be corporations telling the public what is acceptable to think and do and corporations in conjunction with governments using their power to punish people who do not agree.
The great magic trick is that these same unified corporations use the shield of “private property” and business rights as a means to control society without repercussions. After all, a primary principle of conservatism and the US constitution is private property rights. So, stepping in to disrupt corporate governance would be violating one of our own beloved ideals. It sounds like a Catch-22, but it’s really not.
As mentioned above, corporations are at their very core a socialist concept: They are created through government charter, handed legal personhood and given special protections from government. They are NOT free market entities, and Adam Smith, the originator of most free market ideals, stood against corporations as destructive and prone to monopoly.
As long as they receive protections from government including monetary stimulus and bailouts, corporations should not enjoy the same private property protections as regular businesses do. They are parasitic creations, alien to the natural business world. In a freedom-based society they would be dismantled to prevent authoritarian outcomes.
Stakeholder Capitalism is also an incredibly arrogant premise because it assumes that corporate leaders have the wisdom or objective intelligence to expand their role beyond business and into social and political spheres. This has already happened in many respects with much chaos created, but open corporate governance is the end game and it is anything but objective or benevolent.
What are some examples of this kind of corporate/political governance (fascism) in action?
How about Big Tech social media censorship leaning HEAVILY against conservatives and liberty activists? How about evidence of collusion between Big Tech companies and government, such as the Biden Administration and the DHS working closely with Twitter and Facebook to actively remove voices and viewpoints they don’t like? How about corporate leaders colluding to destroy conservative based social media competitors like Parler?
How about ESG loans funded by corporate backers such as Blackrock or globalist non-profits like the Rockefeller Foundation?
If all corporate lenders applied ESG to their loan practices, all individuals and businesses would have to adopt leftist social ideologies and dubious environmental claims in order to have access to credit. ESG is a monetary incentive created by corporate elites to keep all other businesses in line. If it continues, ESG could wipe out political opposition to globalism in the span of a single generation.
And, what about the Council For Inclusive Capitalism? This is the most blatant expression of open global fascism I have ever seen, with money elites and politicians working in concert with the UN and even religious leaders like Pope Francis. Their goal is to institute a single centralized world governing platform built around the same agendas outlined in ESG and SHC, making corporations members of a new global council which they refer to as “The Guardians.” They aren’t even trying to hide the conspiracy anymore, it’s right out in the open.
Klaus Schwab takes special care to mention often that global crisis events are the “opportunity” that is needed to push the public into the arms of Stakeholder Capitalism through a nexus point called “The Great Reset.” Meaning, he thinks that widespread fear and desperation must exist (or be engineered) to perpetuate the SHC framework quickly.
Obviously, the globalists are on a shrinking timeline, though it’s hard to say why. They are tearing off the mask faster in the past two years than they have in the previous decade. More than likely they understand to some degree that if they go too slow the public will have time to mount a defense against them.
They will conjure all kinds of distractions and scapegoats to prevent liberty minded people from hitting them back. They’ll aim us at Russia, they’ll aim us at China, they’ll aim us at useful idiots among the leftists. They’ll aim Russia, China and the leftists at us. They will try to send us to war, they will call us insurrectionists, they will call us terrorists, they will say we started the whole collapse and that we are to blame for the world’s ills. None of this matters. What matters is that the globalists at the top pay the price for the harm they cause.
When the head of the snake is removed, only then can we sort out who is to blame; who were the heroes, who were the villains, and who were the idiots. Only then can we rebuild with true freedom in mind.
Tyler Durden
Wed, 11/09/2022 – 23:40 - The US And China Lead The Space Race 2.0
The US And China Lead The Space Race 2.0
Private space travel is taking off, with around $265 billion having been invested in space startups since 2014.
According to Space Capital, almost half of this sum went to companies in the U.S., while another 30 percent was invested in Chinese firms.
You will find more infographics at Statista
Space 2.0 marks a new wave of space travel. As Statista’s Anna Fleck details below, the boom is primarily being shaped by private companies, including an increasing number of start-ups, which are combining the latest tech innovations with new business models.
In the past, space travel was financed almost exclusively by the state and operated by a few established companies such as Boeing, Airbus or Lockheed Martin and Northrop Grumman, among others.
Founded in 2002 by Tesla founder Elon Musk, SpaceX is currently the leading company in terms of number of spacecraft launches. The company is known for a number of projects, including providing supply flights to the International Space Station (ISS), with its first manned flight having docked there at the end of May 2020. SpaceX is also the pioneer of Starlink satellites, which are low orbit satellites intended to provide broadband internet to communities with little or no connectivity. As of August 2022, around 2,800 of SpaceX’s Starlink satellites orbited the earth. This is set to rise to 12,000 in the coming years.
On September 15, 2021, SpaceX took four space tourists into space for three days, marking the world’s first space mission without a professional astronaut. In the long term, SpaceX plans to colonize Mars.
Tyler Durden
Wed, 11/09/2022 – 23:20 - New Chinese Property Support No Match For $456 Billion Hole
New Chinese Property Support No Match For $456 Billion Hole
By Ye Xie, Bloomberg markets live reporter and analyst
Another day, another measure to support the beleaguered Chinese property sector. Developers rallied Wednesday after Beijing expanded a funding program to support debt sales by private companies, including builders.
It’s a positive that the authorities are doing more to bolster the housing sector. But it’s another bandage that’s unlikely to turn around the market.
Stocks of developers such as Country Garden Holdings and CIFI Holdings surged after the National Association of Financial Market Institutional Investors widened the bond financing program to about 250 billion yuan ($35 billion) for private companies, including developers.
The program, first introduced in late-2018, is one of the “three arrows” that the People’s Bank of China uses to help private companies raise capital. The other two channels include bank loans and equity financing.
In September, Bloomberg reported that policymakers have asked state banks to increase lending to developers to ease their liquidity crunch. After firing the first arrow, Beijing is now pulling the trigger on the second one.
But as Nomura’s economist Lu Ting pointed out, there are reasons to question the effectiveness of the program. First, new home sales revenue is the largest funding source for developers, far more than any other channels. It accounted for 53% of overall funding for developers last year, compared with 12% from bank loans.
In the first nine months, new home sales contracted 31%. At this rate, developers’ funding from home sales will fall by 3.3 trillion yuan ($456 billion) this year, according to Nomura’s estimate. That’s too big of a funding hole.
Secondly, the $35 billion bond financing quota is for all private companies, not just for developers. Builders accounted for 15% of all private bond issuance between 2018 and 2020, before falling to around 9% in 2021, according to Nomura.
Lastly, developers still need to pay off a large amount of maturing bonds in coming months, with about 30 billion yuan worth of onshore debt due by March. The implication is that even if they can access the bond market, the net fundraising would be limited after paying off the debt.
All in all, the second arrow is literally more like an arrow, not a bazooka.
Tyler Durden
Wed, 11/09/2022 – 23:00 - China Revises Military Doctrine To Focus On Troop Deployments Overseas
China Revises Military Doctrine To Focus On Troop Deployments Overseas
The Chinese People’s Liberation Army is expected to undergo continued expansion and modernization following last month’s CCP five-yearly national congress, which made key revisions to the Communist Party constitution. This included changes on the nation’s military posture.
One of those revisions stated the need to “elevate our people’s armed forces to world-class standards” – according to an addition to the party constitution, as translated in the Hong Kong-based South China Morning Post. This is being seen as aimed at expansion of deployed assets overseas, also following widespread reports within the past year that Beijing is seeking to establish a string of bases on Africa’s Atlantic coast.
PLA troops & officers attend opening ceremony of China’s military base in Djibouti in August 2017. AFP/Getty Images. The revised constitution included an official explanation published alongside it which stated “Overseas safety and security has become a major issue that we must address” – in particular citing the need for beefed-up counterterror forces to better protect against attacks on Chinese institutes and companies in foreign countries.
According to further commentary of the changes via the SCMP:
Drawing on examples from China’s military defeats in the 19th century, it said international politics still followed the “law of the jungle”, with the strong in charge and able to uphold their will. The impact of a lagging military on national security would be fatal, it added.
It remains that compared to the United States or even Russia, China’s oversees military presence is tiny or almost non-existent. China has had a naval facility which opened in 2017 in Djibouti, long considered its main and lone military base abroad – not counting reports of one or possibly two outposts in Tajikistan, and the string of small bases in China’s backyard, on manmade island-bases in the South China Sea.
But as Foreign Policy, The Economist, and other Western geopolitical-focused publications have long previewed, China has ambitions for many more, especially in Africa. “Tanzania, Cambodia, and the UAE are on China’s wish list— and now Kiribati, within striking distance of Hawaii,” an FP report stated in summer 2021.
China’s military ambitions abroad, via The Economist
Source: The Economist This week President Xi Jinping again reaffirmed his commitment to focusing on “preparing for war” with the country’s security “increasingly unstable and uncertain,” according to his latest declaration.
Tyler Durden
Wed, 11/09/2022 – 22:40 - Russia's Oil Output Set To Fall By 1.5 Million Bpd In December To 9 Million Barrels
Russia’s Oil Output Set To Fall By 1.5 Million Bpd In December To 9 Million Barrels
By Michael Kern of OilPrice.com
Russia’s oil production could drop to as low as 9 million barrels per day (bpd) in December when the EU embargo on imports of Russian crude oil enters into force, Russian news agency TASS reported on Wednesday, citing analysts at the Energy Development Center. “We expect that production in December will fall by 1.5-1.7 mln barrels per day compared to the June-October average, or 14%,” according to a report from the Energy Development Center cited by TASS.
The expected sharp drop in Russia’s oil production will lead to a spike in international oil prices, also considering that the OPEC+ group is reducing the target production as of November, the experts said.
Russia’s oil production, excluding condensate, for October came in well below its production quota for the month, at just 9.9 million bpd, Russian Deputy Prime Minister Alexander Novak said earlier this month.
Russia’s October production was 1.1 million bpd below its quota of 11 million bpd assigned under the OPEC+ agreement, but mostly in line with Novak’s estimates made last month.
For November, Russia’s oil production quota under the OPEC+ pact will drop from 11 million bpd to 10.5 million bpd.
In October, Russian oil production, including condensate, was 1.47 million tons of oil per day, or 10.78 million bpd. The October production was slightly down from the 10.8 million bpd reported for September
However, the production decline could accelerate from November as the EU prepares to introduce an embargo on imports of Russian crude from December 5, Russian business daily Kommersant reported at the end of October, quoting sources familiar with the situation.
Analysts have estimated that around 2 million bpd-3 million bpd of Russian oil and products may have to find new homes after the EU embargo enters into force. Russia has redirected a large part of its flows eastwards to Asia, but it may not be able to accommodate immediately and find willing buyers for the trade flows previously going to Europe, especially with the ban on services handling Russian oil cargoes unless the oil is sold at or below a certain price cap.
Tyler Durden
Wed, 11/09/2022 – 22:20 - The Post-Midterms State Of Marijuana Legalization In The US
The Post-Midterms State Of Marijuana Legalization In The US
In the 2022 midterm election, Maryland and Missouri have legalized recreational marijuana via the ballot box.
However, as Katharina Buchholz notes, three similar referendums have been voted down in Arkansas, North Dakota and South Dakota, CNN projects.
South Dakota had actually given the recreational and medical use of cannabis the green light in the 2020 elections, but the state’s Supreme Court ruled the ballot measure on recreational weed invalid for technical reasons after a complaint funded by Governor Kristi Noem. The second time around, the referendum is expected to be narrowly defeated.
As of now, this means that recreational marijuana will be legal in 21 states and the District of Columbia.
You will find more infographics at Statista
After successful ballot measures in the 2020 election, weed became legal in Arizona, New Jersey and Montana. During 2021 and 2022, state legislatures in New York, Virginia, New Mexico, Rhode Island and Connecticut passed bills to legalize marijuana. These recent development have brought recreational cannabis to more East Coast states after the American West had long been the hotbed of legalization efforts. Colorado and Washington were the first states to legalize the drug in 2012.
While official sales of marijuana can take a while to start as setting up a licensing system for dispensaries usually takes time, possession and consumption are expected to become legal more quickly in the states in question. There are currently 37 states that have medical marijuana laws, including all that allow recreational use.
Tyler Durden
Wed, 11/09/2022 – 22:00 - Sequoia Writes Off Entire $210MM FTX Investment; Here Are All The Other Funds That Are Losing Billions In FTX
Sequoia Writes Off Entire $210MM FTX Investment; Here Are All The Other Funds That Are Losing Billions In FTX
(Update: 9:00pm ET): Slowly but surely, the humiliated “investors” who do zero homework and merely look at who else has coinvested before they sign the check, are coming out admitting that it’s gone… al gone.
In a tweet late on Wednesday, venture capital giant Sequoia Capital said had written down the entire value of its stake in FTX, a little over $210 million.
“We are in the business of taking risk,” Sequoia wrote in a message to investors seen by Bloomberg. “Some investments will surprise to the upside, and some will surprise to the downside.”
Here is the note we sent to our LPs in GGFIII regarding FTX. pic.twitter.com/Cgp1Yxk1pz
— Sequoia Capital (@sequoia) November 10, 2022
https://platform.twitter.com/widgets.js
A smaller venture fund, Multicoin, told investors Wednesday that about 10% of its assets under management were affected.
“Unfortunately, we were not able to withdraw all of the Fund’s assets on FTX,” Multicoin wrote in a letter reviewed by Bloomberg.
A sudden loss of confidence in FTX among customers exposed deep problems with the cryptocurrency exchange. Peoplewithdrew money and sold off tokens associated with the company, causing a liquidity crunch. A rival, Binance, agreed to buy FTX and then pulled out over concerns with FTX’s financial health.
* * *
Now that the world’s largest crypto exchange, Binance, has walked away from a bailout of world’s second-largest crypto exchange, FTX, but biggest ever crypto fraud – far bigger than MtGOX ever was, here is a list of all the “luminary” investors whose money in FTX is now gone… all gone.
We start at the top, where we find the “who is who” of clueless momentum chasers, who over the years somehow got confused with credible, diligent investors: we are talking of course about Tiger Global, which is down 55% this year (and is about to be down a whole lot more) and of course the fund that we once dubbed the bubble era’s “short of the century“, SoftBank.
Can’t make this up: among the January Series C investors in FTX which valued the ponzi scheme at $32BN, were Tiger Global (down 55% YTD) and Softbank
— zerohedge (@zerohedge) November 9, 2022
https://platform.twitter.com/widgets.js
One wonders how much of today’s widespread selling across various asset classes was due to Tiger Global getting margin called and dumping what it can?
There are more funds, of course: Third Point and Altimeter Capital Management are among hedge funds that recently participated in funding rounds for Sam Bankman-Fried’s once-high-flying crypto exchange. Brevan Howard Asset Management’s Alan Howard, the family office of Paul Tudor Jones and Millennium Management founder Izzy Englander also chipped in as angel investors, alongside celebrities including Gisele Bundchen and Tom Brady.
There were many others: FTX also attracted capital from the Ontario Teachers’ Pension Plan, Sequoia Capital, Lightspeed Venture Partners, Iconiq Capital, Insight Partners, Thoma Bravo and Masayoshi Son’s SoftBank.
Tiger Global and Ontario Teachers’ first invested in FTX in December 2019 in a funding round that valued the company at $8 billion, according to PitchBook data. Both topped up their wagers in October 2021, giving FTX a $25 billion valuation, and did so again in January, the data show. Some of the other firms and individuals backed FTX in July 2021, paying cash to participate in a $1 billion funding round that valued the crypto exchange at $18 billion.
Prefer bullets? Here is a list of the most prominent investors in FTX courtesy of The Block’s Frank Chaparro:
- BlackRock
- Ontario Pension Fund
- Sequoia
- Paradigm
- Tiger Global
- SoftBank
- Circle
- Ribbit
- Alan Howard
- Multicoin
- VanEck
- Temasek
Remarkably, as ever more clueless pedigreed investors piled up to fund this fraud of epic proportions, the valuation went super parabolic, and after two early rounds in 2019 and 2020, FTX got its first real outside funding in July 2021 when it pocketed $900MM at a valuation of $18 billion in its Series B round; this was followed by two more rounds, the most notable of which was Series C when ts valuation exploded to a staggering $32 billion. It was around this time that Scam Bankrupt-Fraud started naming sports stadiums, and imagined a world in which FTX would buy Goldman.
The chart below is the definitive proof that even (or rather especially) the smartest investor do no homework before allocating huge amounts of capital.
All that seems so long ago now that regulators are investigating whether FTX properly handled customer funds – translation: the firm probably used client funds from its exchange to funds its trading shop, Alameda Research – and the firm’s relationship with other entities Bankman-Fried controls, and concerns raised by Binance executives during their due diligence process could torpedo the deal.
As a result of FTX collapse, all of the abovenamed investors, among others, are set to lose all of their invested cash, especially with news such as this hitting the tape:
- *BANKMAN-FRIED TOLD INVESTORS FTX HAS SHORTFALL OF UP TO $8 BLN
Still, while billions will be lost, nobody will be crushed as much as Bankman-Fried himself, whose personal wealth has collapsed from $16 billion to what may now be a negative number when accounting for his personal debt. Of course, it’s all downhill from there especially once SBF is thrown in prison from stealing billions in client funds in his exchange and using them not even to buy yachts but to make catastrophically bad investments.
Tyler Durden
Wed, 11/09/2022 – 21:44 - Video Games May Be Beneficial For The Developing Brain
Video Games May Be Beneficial For The Developing Brain
Authored by Ross Pomeroy via RealClearScience.com,
Video games are often maligned by parents and the media, but a recently published study of 2,217 nine- and ten-year-olds found that kids who played at least 21 hours of video games per week performed better on tests of cognitive performance involving response inhibition and working memory than kids who didn’t play video games at all.
The research, spearheaded by scientists in the Department of Psychiatry at the University of Vermont, is published in the journal JAMA Network Open.
Video games are everywhere
In the span of three decades, video games have grown from rare to ubiquitous in modern society. No longer relegated to the realm of nerdom, nearly three-quarters of children aged 2 to 17 play them, whether on computers, consoles, or smartphones, leaving parents to wonder, “How much is the right amount?”
The American Academy of Pediatrics (AAP) recommends that children over two play no more than one hour of video games on school days and no more than two hours on non-school days.
More broadly, scientists have explored whether gaming is associated with changes to behavior and cognitive function in kids. Prior research has linked heavy gaming with slightly increased rates of aggression, depression, and violence. At the same time, however, frequent gamers do tend to outperform their peers on various measures of cognitive ability. Research on both behavior and cognitive ability has tended to suffer from small sample sizes, however.
The new study did not. Thousands of kids, enrolled in the Adolescent Brain Cognitive Development (ABCD) study, were separated into two groups: those who played at least 21 hours of video games per week (well over AAP recommendations) and those who played none at all. Participants were challenged with a Stop-Signal Task (SST) — designed to measure inhibition control — in which they were told to work on a simple, rapid-fire task on a computer until a “stop” signal was given. They were also given an N-Back task — a test of working memory — in which they were asked to rapidly recall something that they were previously presented. Both cognitive assessments were completed while subjects sat in an fMRI brain scanner.
The gamers outperformed the non-gamers by about 5% to 10% on both tasks. Moreover, their brains showed higher activity in regions associated with attention and memory and in frontal brain regions linked to more cognitively demanding tasks.
While the gamers and non-gamers did not differ on age, BMI, or IQ, the gamers were disproportionately male and had less combined parental income. The income disparity actually adds to the robustness of the finding. Higher parental income is often sharply linked with all sorts of improved child outcomes, from health to behavior to intelligence, so the fact that child gamers from poorer homes tended to cognitively outperform non-gamers from richer ones is certainly interesting.
Is Tetris the same as Grand Theft Auto?
The researchers caution that not all video games are likely to be equally beneficial: a violent, first-person shooter is undeniably different than an educational, strategy, or puzzle-solving game, for example. Their study did not tease out which games participants were actually playing. Moreover, they cautioned that the study was merely a snapshot in time, assessing correlation, not causation.
However, future data releases from the ABCD study group as the participants age should allow the scientists to detect changes in cognitive ability. Will gamers continue to outperform their non-gaming peers, perhaps growing their advantage? Time will tell.
Tyler Durden
Wed, 11/09/2022 – 21:40 - CPI Preview: Inflation Is Cooling But Will It Be Enough
CPI Preview: Inflation Is Cooling But Will It Be Enough
As discussed earlier, most banks agree that while the midterms are important over the medium and long run, Thursday’s CPI print will be the most important factor to shape the expectations for December FOMC and the market’s near term reaction. Here, courtesy of Newsquawk, is what to look for.
- Analysts expect headline consumer prices to pick up by 0.6% M/M in October, accelerating from the 0.4% M/M rate in September while the core measure is seen cooling to 0.5% M/M, lower than the 0.6% M/M in September, but a still elevated level vs historical levels.
- On an annual basis, headline CPI is expected to rise 7.9%, down from 8.2% last month; core CPI sill also slow to 6.5% from 6.6%.
- The data will be framed in the context of how much progress the Fed is making towards lowering inflation. After the November FOMC meeting, Fed Chair Powell said it was “very premature” to consider pausing or ending the rate hiking cycle, noting that inflation remains well above the Fed’s longer-run goals, with price pressures evident across goods and services. Although longer-term inflation expectations still appear well-anchored, the Fed wants to see inflation coming down decisively, and is prepared to stay the course until the job is done.
As a reminder, the message from Powell last week was that the Fed is strongly committed to its inflation target of 2%. Powell did, however, allude to a potentially slower pace of rate hikes in December – the statement said the Fed will consider the “cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments” when determining the pace of future rate increases. Analysts rationalised that with rates in restrictive territory, the Fed can downshift to a slower pace of normalization to assess the impact of the 375bps worth of rate tightening unleashed since March.
Currently, the market is split in its views about whether the Fed will implement a 50bps or 75bps rate hike in December.
Accordingly, the market seems to be of the view that if inflation metrics move lower (and traders are keeping an eye on aggregate inflation data, including CPI, PCE, wages metrics within jobs data, consumer inflation expectations via surveys, etc), this gives the Fed cover to downshift to the lower increment. However, if inflation data does not cooperate, then the Fed will prefer the larger sized hike, and potentially an even a higher terminal rate (Powell suggested that the eventual peak Fed Funds Rate Target is above the 4.6% pencilled in within the September projections; money markets see the peak at 5.00-5.25% in Q2 2023).
Shifting away from the consensus, we next focus on what Goldman’s economists expect from tomorrow’s print. As discussed in the preview from Jan Hatzius (available to pro subs), Goldman expects a below-consensus 0.44% increase in core CPI in October (vs. 0.5% consensus and 0.6% prior), which would lower the year-on-year rate to 6.46% (vs. 6.5% consensus and 6.6% prior).
The bank expects moderate increases in both food and energy prices to raise headline CPI by 0.49% (vs. 0.6% consensus and 0.4% prior), which would lower the year-on-year rate to 7.8% (vs. 7.9% consensus and 8.2% prior).
The bank’s research team also highlights 3 key component-level trends this month:
1) Expect CPI used car prices to catch down (-2.5% in October) to auction price data, which have now plunged substantially from their peak, and just tumbled at the 3rd fastest pace on record.
2) The small but volatile health insurance component should finally swing from providing a large boost over the past twelve months to providing a large drag over the next twelve months (-3% in October) with the incorporation of new data on health insurer profit margins. The reason is that the CPI incorporates source data on health insurer profitability once per year and feeds them through for the next twelve months. Last year, roughly stable premiums coupled with reduced health care use amidst Covid fears caused profit margins to rise, leading to a year of very strong health insurance inflation (+2.1% in September; +28.2% year-on-year). Now, the rebound in health care use has caused profit margins to fall, which should lead to a year of very negative health insurance inflation (-3% in October; -28% next twelve months). That would cause the contribution to the core from this small component to fall by 65bp over the next year.
3) Goldman also expects shelter inflation to run hot (rent +0.78%, OER + 0.75%), even though as we discussed extensively, real-time alternative web-based measures of new tenant rent growth have slowed—because continuing tenant rent levels still have a long way to catch up to new tenant market rates. In other words, rent inflation will keep coming in hot even as prices slump outside of excel models.
Elsewhere, Goldman also expects a 2% pullback in airfares based on timely data and also expects another large increase in the car insurance category (+1.6%), as carriers push through price increases to offset higher repair and replacement costs.
Going forward, the bank expects monthly core CPI inflation to remain in the 0.3-0.4% range for the next couple of months before edging down to 0.2-0.3% next year. Goldman expects year-over-year core CPI inflation of 6.2% in December 2022, 3.3% in December 2023, and 2.7% in December 2024. The deceleration we expect in 2023 is driven more by goods than services categories. Of course, a sharp recession will unleash deflation much sooner.
Shifting from Goldman to JPM, this is what its head economist Mike Feroli said in his preview:
We estimate that the consumer price index (CPI) rose 0.6% in October. Even with this strong increase expected for the month, we think year-ago headline inflation will moderate, from 8.2% in September to a still-robust 7.9% in October. The headline strength should come in part from energy prices, for which we forecast a jump in October following a run of three straight monthly declines. We think that food prices continued to climb into October, but we expect additional moderation in this CPI aggregate (following a very strong run), with the food CPI up 0.6% in the month. Away from food and energy, we forecast that the core CPI rose 0.38% in October, with this measure coming in 6.4%oya (down from 6.6% in September).
We think that continued firmness in the CPI’s rent measures will drive the expected gain in the core aggregate in October. While we think rental inflation will moderate eventually, we don’t see this happening at this point in time, and we forecast that tenants’ rent rose 0.83% in October while owners’ equivalent rent increased 0.76%.These gains would be a little softer than the reported September changes but still quite firm.
Away from rent, we expect softer changes in many of the other main CPI components. Auto industry figures point to recent declines in related prices (particularly for used vehicles) and we look for new vehicle prices to be down 0.1% in the October CPI while used vehicle prices fell 2.2%. We also think that airfares declined in October, which would help push the broader public transportation price index down 2.2%. Apparel prices came down a bit in September and we forecast another modest decline in October, with prices down 0.2%. We also think that communication prices will keep trending lower, with a 0.1% move down reported for October.
We also expect a noticeable downshift in medical care inflation in the CPI, with the BLS set to incorporate an annual update to source data used to estimate health insurance prices. We think overall medical care prices edged up just 0.1% in October, with a near-4% drop in health insurance prices being offset by gains in other related prices on net. This would represent a big shift from the past 12 months, which had monthly gains in medical care prices averaging 0.5% with health insurance prices up about 2% per month. We also look for a fairly modest gain in lodging prices in October, with a 0.3% increase expected to offset a portion of September’s 1.0% decline.
Turning to the market, in terms of the S&P’s reaction function to the headline CPI YoY print here is framework Goldman’s John Flood is using using:
- >8.2% S&P loses 3+%
- 8 – 8.2% S&P loses 1-2%
- 7.8 – 7.9% S&P gains 0 – 1%
- <7.8% S&P gains 2+%
Finally, as discussed earlier, JPM was much more hyperbolic in its CPI market scenario analysis:
- CPI 8.4% or higher: this would be a move back to July levels of inflation, which we may see on a MoM basis but think Equity investors care most about the Headline YoY level. This would represent the largest differential between actual and estimated in this cycle. SPX would plunge 4.5% – 6%. Probability 5%
- 8.1% – 8.3%: there have been 4x misses of 20bps or more and the SPX fell 1.6%, 2.9%, 40bps, and 4.3% which is a down 2.3% average. The 40bps outlier came when the SPX was ~3820 the day before the print. In the other 3 cases, the SPX was between 3930 and 4000. SPX would drop 2% – 3%. Probability 30%
- 7.9% – 8.0%: I think bonds, and thus stocks, take this as a small positive since it meets expectations and does not reprice yields higher. Given that we are at the bottom of JPM’s Cash Trading team’s range (3700 – 3900), we may see some covering leading to an uptick in stocks. SPX would rise 1% – 1.5%. Probability 40%
- 7.7% – 7.9%: this could be similar to the August 10 print which had a dovish beat by 20bps and triggered a 2.1% rally in SPX, 2.8% in NDX, and 2.9% in RTY. Cyclicals, Value Shorts, Momentum Shorts, and ARKK the best performers that day. Given the increased bearishness, the magnitude of move could be larger. SPX higher 2.5% – 3.5%. Probability 20%
- 7.6% or below: a stepdown in inflation of this magnitude likely pulls the 10Y yield below 4% (currently 4.158%) and triggers a sharp rally in stocks. This may also reset the yield curve lower with terminal rate expectations falling under 5%. SPX higher 5% – 6%. Probability 5%.
Looking at historical data the past year has seen a decidedly negative reaction to CPI on the day of the report, however when CPI came in below expectations, the SPX is up 0.8%, but down -1.2% when the CPI comes in hotter than expected.
And while there have been decidedly few CPI misses in the past year, any time they do happen they lead to a powerful 5-day rally, certainly more powerful than the drop when CPI comes in hot.
As always,all full reports discussed above are available to pro subs.
Tyler Durden
Wed, 11/09/2022 – 21:30 - The Deep State Is What Disables Democracy
The Deep State Is What Disables Democracy
Authored by Jeffrey Tucker via The Epoch Times,
The idea of democracy as it emerged gradually out of the Enlightenment, and drawing on ancient forms in Greece and Rome, is that the people govern themselves. People serve as the main determinants of the rules, laws, and legislation under which they live. They even set the rules concerning what people are allowed to do to themselves and each other using government: such is the point of a constitution.
In a representative democracy, we elect leaders who represent our interests in the halls of government. Crucially, the main point is not the election or even the right of masses of people to vote. Those are means to an end. The end is self-government, government by and for the people, which came to be seen in republican theory as a crucial feature of freedom itself.
Many totalitarian societies have figured out over time how to appear to be democratic without actually being so. When I was growing up, we used to laugh about how the Soviet people had a vote. What possibly could that mean or why would it matter in the slightest if the vote only ends up changing the face and name of the marionette on the balcony reading prepared propaganda?
We as Americans sneered at such a fake democracy. It exists in name only over there, whereas here we have the real thing!
Or so we thought. Every American must absolutely learn the lesson of these last 31 months.
They locked us in their homes, closed our churches and schools and businesses, restricted travel, segregated whole cities based on whether a person had taken a medicine like some kind of dystopian movement, wrecked the entire economy, and separated families by force.
Not one person in this entire country voted for a single one of these things to happen. It was never on the ballot. And for the most part, the elected leaders in this country were not the main actors in this. They gave approval to be sure but mainly because most of them are deeply ignorant, easily led, and deeply scared.
The main actors were people who were never elected. They were appointed bureaucrats. Most of them cannot be fired. They have permanent jobs with high income and benefits. They have vast power, more power it seems than the politicians and certainly more power than you. Indeed they have awesome power over you. And over everything, to the point that they can say whether you can go to church or not or whether your children can play with friends.
Not even the courts can act fast enough to control them and stop them from exercising total power over our lives.
The Deep State has learned that it can announce or wholly fabricate a national emergency and practically put the entire country on a wartime footing wherever it wants. We can tolerate this no longer.
This permanent and unelected class of rules is called the administrative state, or, more colloquially, the Deep State. It exists at the federal level, the state level, and at the city level. In the COVID crisis, they all worked together out of their own interests. They showed their face and their power. We had never experienced anything like this.
Their power is not new. It’s been growing for more than 100 years. What was new was the ferocity of the attack and the brazenness of imposition. They went on TV to brag about what they were doing and shame dissidents. Media companies and Big Tech did their best to give them cover and block voices that made rational points.
In effect, this country became a multivariate dictatorship but the people doing the dictating were mostly not the politicians we elected, though they went along with the whole caper. It was this permanent class of rulers, managers, and specialists who were in charge—people who have never faced the voters and cannot be fired by anyone no matter what.
This is not a just system. It wrecked this country. We pay the price every day now: rent, gas, groceries, bills, and now job loss. All of this wreckage you see today traces to what they did. It’s why your child is behind in language, math, and reading skills. It’s why your grandmother died alone and no one could attend her funeral. It could be why your friend’s husband died suddenly. It’s why your brother has a crisis-level addiction to liquor, weed, and pills.
The administrative state waged a war on the country for longer than two years. No politician in the country had the power to stop it. Once Trump greenlighted this mess in March 2020, he was effectively unseated from power and became like the marionettes in foreign countries about whom we used to laugh: talking a good game but ultimately powerless in the face of the real power behind the scenes.
Now let’s talk about the Red Wave. It is a means, not an end. The question now is: what is to be done. I strongly suggest that all new officeholders take a gander at the Federal Register and search for agencies. What you find is a list of 434 of them. Print it out. Using your brain and a red pen, strike out those that are nonessential—same as these people did with millions of workers.
Let go of the idea that these agencies can be cut. They need to be abolished. When Elon Musk took over Twitter, he didn’t reduce the hours of the employees who were just taking up space. No, he immediately sent them packing. That day. No more email access. No more Slack access. Gone. Now. The new Congress needs to do this to, let’s say, half of the 434 agencies. Bring down the number to 200. That should be the goal.
The private sector has gone through massive cutbacks and families too. Government must do the same. And not just for financial and economic reasons. It needs to be done to restore government by the people. Then we need serious changes in the employment status of any federal bureaucrat who remains. If the person is involved in any aspect of policy-making, that person needs to be reclassified as an at-will employee, same as exists in the private sector.
This is just the beginning. There is another layer of the Deep State that is not employed by government. It lives in the private sector that is well-connected. Think of a person like Scott Gottlieb. You have seen him on TV for 30 months, pontificating about the need to lock down and get the jab. He is a former commissioner of the FDA. He now works for a fancy think tank in Washington, D.C. that is funded by industry and foundations. He also sits on the Pfizer board, which must pay pretty well, so he is, in effect, a lobbyist for Big Pharma who only pretends to be an independent intellectual.
When Jared Kushner needed advice on how much Trump should lock down the country, his first call was to Gottlieb. Gottlieb told him to be more stringent than Trump wants. That was his one piece of advice: take away as many rights and liberties as you can get away with.
How does Gottlieb or Bill Gates fit into this deep state structure? They are essential to it. But no one elected them and they don’t even work for government. This is an enormously complicated problem but the solution must be to break up these networks of influence and control. That’s what must happen if we are to restore democracy.
I just watched a clip of an interview with Gates in which he says that if government rounds you up for quarantine in a stadium, you should have no choice but to go. And so too if government says you have to take this shot, you have no choice. “People act as if they have a choice but they do not,” he says.
No system of self-government, of government by the people, can exist with this sort of person exercising such power.
Dealing with the problem of the Deep State has to be the major priority of the new officeholders. It is not enough just to get elected and then celebrate. It means nothing unless there is some agenda, some point, some purpose, some drive, some plan. I’m not really seeing much evidence yet that there is one. We need some focus here now. We might not have another chance.
Tyler Durden
Wed, 11/09/2022 – 21:00 - From Riches To Rags: Peloton Co-Founder Starts A Rug Company
From Riches To Rags: Peloton Co-Founder Starts A Rug Company
After Peloton’s former CEO and co-founder, John Foley, made a series of demand miscalculations for Peloton bikes during the pandemic and eventually resigned as shares in the company cratered, he’s back in the spotlight with a new venture: direct-to-consumer rug business.
Foley’s new company is called “Ernesta.” According to Forbes, he started the custom rug company with two other co-founders from Peloton.
Transitioning from slapping an iPad on a bike or treadmill to selling custom rugs seems like an unlikely path for the former billionaire. But maybe after borrowing millions of dollars worth of stock collateralized with Peloton shares and receiving repeated margin calls from Goldman Sachs, the rug business is his best bet to make a rebound.
On Monday, Ernesta announced $25 million in venture capital funding. The company is stacked with ex-Peloton managers and is hoping to take a slice of the high-end rug market.
Foley told Forbes the company “plans to sell 50 different styles of machine-made, custom-cut rugs in five colors each.”
“With Peloton, we didn’t know if it would be a success or not, but I knew that working with good people was a valuable way to spend my time.
“Rugs might seem like a potentially uninteresting category, but there’s probably at least one in your house. They’re ubiquitous, and people don’t spend a lot of time worrying about them,” Peloton and Ernesta co-founder Hisao Kushi told Forbes.
Custom Market Insights released a report in July that showed more than 100 million rugs are sold in the US yearly. The rug market is expected to expand from $18 billion this year to $25 billion by 2030. Foley said for Ernesta to be successful, it needs to capture only a fraction of such volume.
“I want to show discipline, I want to show profitability and have a real focus on unit economics,” Foley said
“Ernesta won’t attempt to vertically integrate its supply chain. Instead, the company will work with business-to-business partners in Georgia to source rolls of carpet in bulk, then cut them to order in a New Jersey warehouse to ship either directly or through logistics partners,” Forbes said.
At least Foley can now sell Peloton customers a fancy rug for their bike. What a dramatic shift for the former billionaire … from bikes to rugs.
Tyler Durden
Wed, 11/09/2022 – 20:40 - Dershowitz Accuser Says She 'May Have Made A Mistake' As Defamation Suit Is Settled
Dershowitz Accuser Says She ‘May Have Made A Mistake’ As Defamation Suit Is Settled
The woman at the center of sexual abuse accusations against former Jeffrey Epstein lawyer Alan Dershowitz has ‘corrected the record,’ and now says she may have been mistaken.
In addition to dropping her defamation lawsuit against Dershowitz, accuser Virginia Giuffre, formerly Virginia Roberts, made the following statement:
“I have long believed that I was trafficked by Jeffrey Epstein to Alan Dershowitz. However, I was very young at the time, it was a very stressful and traumatic environment, and Mr. Dershowitz has from the beginning consistently denied these allegations,” she said. “I now recognize I may have made a mistake in identifying Mr. Dershowitz.”
According to both parties, there were no payments involved in the settlement, which also included other related lawsuits.
Dershowitz notably represented Epstein in his earliest criminal case.
Giuffre, meanwhile, said that both Epstein and his ‘madam’ Ghislaine Maxwell raped her. She reached a settlement with Epstein in 2009 after he pleaded guilty in Florida to procuring a prostitute under the age of 18.
Later, Giuffre said Dershowitz raped her six times in three states, as well as the US Virgin Islands at Epstein’s property.
Dershowitz has maintained his innocence the entire time.
“As I have said from the beginning, I never had sex with Ms. Giuffre,” he said, adding “I have nevertheless come to believe that at the time she accused me she believed what she said. Ms. Giuffre is to be commended for her courage in now stating publicly that she may have been mistaken about me.”
At the Epoch Times notes, The settlement also involved Dershowitz’s countersuit against Giuffre, a defamation suit from lawyer David Boies against Dershowitz, and a countersuit from Dershowitz against Boies.
“I agree with Mr. Dershowitz and Ms. Giuffre that the time has come to end this litigation and move on,” Boies said in a statement. “I know that Alan Dershowitz has suffered greatly from the allegation of sexual abuse—an allegation that he has consistently, and vehemently, denied.”
Boies had said in a complaint that Dershowitz was trying to “distract attention from his own misconduct” when he launched “a campaign to attack and vilify each of the lawyers who have represented his victims,” including Giuffre.
Dershowitz, meanwhile, now says his claims that Boies engaged in an extortion plot and tried to induce perjury “were mistaken.”
Giuffre also accused Prince Andrew of raping her. She had produced a photograph showing her with the prince and Maxwell, who was convicted in 2021 of sex trafficking and sentenced more recently to 20 years in prison.
Giuffre’s lawsuit against Prince Andrew was settled in February. The details were not disclosed.
Tyler Durden
Wed, 11/09/2022 – 20:20 - World's Top Chipmaker To Build Another US Plant In Arizona
World’s Top Chipmaker To Build Another US Plant In Arizona
Currently, US semiconductors are a measly 10% of global production. Most chips are produced in Asia, particularly South Korea and Taiwan, and the Biden administration has pushed the Chips and Science Act to boost development and production domestically.
The CHIPS Act earmarks $52 billion to revert a decades-long trend of US production shifting abroad to low-cost labor regions. There was evidence some of this production is being reshored, according to a WSJ report, revealing Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, is laying the groundwork for a second US factory in Arizona.
People familiar with the plans told WSJ that TSMC would soon announce one of the most advanced semiconductor plants just north of Phoenix, Arizona, next to another one of its chip factories. They said the investment in the new plant could be upwards of $12 billion, similar to what was committed in 2020 to build the factory beside it.
TSMC is making a big bet on the revival of US semiconductor production after increasing US-China tensions led Washington to pass the CHIPS Act to spur domestic semiconductor manufacturing.
“TSMC’s new facility would manufacture so-called 3-nanometer transistors, some of the tiniest and most lightning-fast currently possible,” the people said.
In a statement to WSJ on Wednesday, TSMC confirmed it was constructing a building to “potentially” house a second chip plant at its site in Arizona. The statement said it would add more advanced chip capacity there, though a final decision has yet to be announced.
The Biden administration’s move to rebuild semiconductor production in the US comes after a massive chip shortage in Asia that caused supply chain snarls for manufacturers of automobiles, electronics, and defense systems. The expansion signifies that reshoring supply chains from China and surrounding countries will ensure secured chip production during wartime.
TSMC, whose production plants are based primarily in Taiwan, has begun to diversify over the past year due to invasion threats by China.
In August, TSMC Chair Mark Liu told CNN that if China were to invade Taiwan and seize the world’s most advanced chip factories, it would cause devastating supply chain disruptions worldwide.
Apart from domestic initiatives, the Biden administration has slapped China with export restrictions on advanced chips and curbed the sale of chipmaking equipment. The restrictions attempt to slow advancements in China while buying the US time to rebuild its chip production base.
Intel Corp. and memory maker Micron Technology Inc. are also investing in new US chipmaking factories as global supply chains are rejiggered due to national security threats.
Tyler Durden
Wed, 11/09/2022 – 20:00 - Doug Casey On The WEF's Plan For Mankind And What Comes Next
Doug Casey On The WEF’s Plan For Mankind And What Comes Next
Authored by Doug Casey via InternationalMan.com,
International Man: The World Economic Forum (WEF) describes its mission as the “international organization for public-private cooperation.”
What do you make of the WEF and the power it wields?
Doug Casey: “International organization for public-private cooperation” is a code phrase for economic fascism – which is to say, the hand-in-glove melding of the political power of the State with the economic power of corporations.
Things like the WEF, and other NGOs (non-governmental organizations), institutes, and think tanks, have proliferated in recent years. They’re almost all destructive parasites on productive society.
Almost all of them are leftist, statist, and collectivist in orientation. They’re typically populated by intellectuals and academics and funded by tax-exempt foundations, usually set up by elderly do-gooders interested in leaving a “legacy.”
The WEF is by far the most successful of the breed. Instead of just cadging donations so intellectuals could hang around and seem prestigious, in 1971, Klaus Schwab formed a club where the rich and powerful could discuss ideas with other members of the overlord class. Political and financial types could find a philosophical home, disguising the quest for money and power with a patina of benevolence. It’s become an amazingly large and powerful organization. They have roughly 800 full-time employees, most of them very highly paid. They have an annual budget of over $300 million. Their balance sheet indicates that the WEF is worth over $1 billion, funded by major corporations who give it millions of dollars, as do various governments. Most of the world’s political leaders and corporations are members.
Schwab was very clever to have put together an organization where the richest, most powerful, and most influential people in the world are charged huge amounts to be introduced to each other and talk about how they can become even richer, more powerful, and more influential.
It seems clear that members of the WEF have to toe the party line or be disinvited. Nobody wants to be excommunicated from the WEF or cut off from association with other rich and powerful people. It’s safe to say that WEF members share a common philosophy, one that’s in line with Schwab’s weltanschauung.
FWIW, I think it’s wrong for public corporations to make political, charitable, or indeed any kind of contributions. A corporation’s raison d’etre is to generate money for its shareholders, not allow management to play big shot. Managements often like to give away shareholders’ money; it costs them nothing, but they reap the prestige of giving. Better that the money be distributed to shareholders so they can dispose of it as they wish. If that were the case, outfits like the WEF would have a lot less money and power. And wouldn’t be in a position to promote the pernicious ideas it does.
For instance, it would appear that Klaus Schwab actually originated, or at least popularized, the term “stakeholder.” Stakeholderism believes that business is obligated to treat employees, customers, local residents, and anyone who claims to be affected by business as if they had some right to what a company produces. People who identify as stakeholders easily develop into mooches and leeches. Schwab was also an early supporter of the ESG (Environmental, Social, and Governance) and DEI (Diversity, Equity, and Inclusion) movements. And political correctness in general.
With as much money, power, and influence as the WEF has, it’s easy for them to groom up-and-comers. They created several sub-organizations for people who are under 40 years old—where they can reinforce their beliefs that the world ought to go in a certain way—under the direction of WEF-type people.
Schwab has to be complimented for having built the WEF from nothing and making himself one of the most powerful people in the world. But the WEF is a dangerous and despicable organization. It’s basically what’s known as a self-licking ice cream cone—it serves no useful purpose but to perpetuate itself and its members.
International Man: Yuval Noah Harari is a key adviser to the WEF.
He has risen to fame as reviewers and editors have anointed him as a public intellectual.
What’s your take on the rise of Harari?
Doug Casey: Harari is a perfect example of how, when an organization like the WEF gets in the back of somebody, they can make him rich, famous, and influential. These people all feed each other and scratch each other’s backs.
Harari apparently came from a perfectly average middle-class Israeli family, but I would think that he’s got to be worth at least $50 million, just based upon sales of 30 million copies of his books. He appears to be an ideal court intellectual, living quietly with his husband in a modest suburb of Tel Aviv, promoting the party line.
International Man: Harari has made several disturbing statements, including:
“Covid is critical because this is what convinces people to accept, to legitimize, total biometric surveillance.
We want to stop this pandemic. We need not just to monitor people, we need to monitor what is happening under their skin.
Governments want to know not just where we go or who we meet. Above all, they want to know what is happening under our skin.”
What do you think about this?
Doug Casey: Well, he really wants to transform the world, and it’s kind of clever the way he proposes to do it.
His book Sapiens, which I read about 10 years ago, is a competent enough summation of how humans evolved over the course of the Pleistocene during the last 2.5 million years. It doesn’t make any cosmic breakthroughs but tells a basically correct story. He explains how technology started to take on a life of its own and how we changed the world. And how technology’s now changing us at the rate of Moore’s Law. Fair enough.
The problem lies in his projections of how and where humans will evolve over the years to come. In particular, who will guide that evolution. And if things continue advancing at the rate that they are, it’s likely that machines will integrate with humans.
I see no problem with that. If you voluntarily want to replace body parts with mechanical parts—a new knee, a new heart, be a $6 Million Man—that’s wonderful. Taking it one step further, if you can put a chip in your brain and instantly access all the knowledge on the Internet without going through a computer, that could be even more wonderful, except for the fact the Social Credit System and hackers will have access to your chip.
The problem is that the WEF people think that they know what’s best for the rest of humanity. And they feel it’s for the good of all that they be closely monitored, controlled, and guided. They’ve made statements to the effect that most people are “useless eaters,” which is probably true at this point. Or it will be once everybody gets a Guaranteed Annual Income—enough to keep them sated with avocado toast and vanilla lattes while they watch cat videos at the local Starbucks. They’d really like to do without superfluous humans and just have the elite calling the shots. Humans that remain would amount to serfs. The WEF have said, “You’ll own nothing and be happy.” They’re very bold.
It’s very disturbing how they talk about guiding the advance to the next stage of human evolution. As pessimistic as I am about the current state of the world and where it’s going, I still believe in The Ascent of Man— but I believe it can only happen if individual liberty is maximized. From the point of view of personal freedom, Harari is actually talking about regressing to feudal times. Albeit a kinder and gentler version, where wise solons like Klaus and Yuval are in charge.
As far as I can tell, his values are antithetical to those of Western Civilization. But he’s an effective mouthpiece to convince the hoi polloi that their leaders have their best interests at heart. And I suppose they do. At least the way a farmer has the best interests of his dairy—or beef—cattle at heart.
International Man: Harari has often described a high-tech totalitarian future where a small elite with access to the latest technology evolves into different beings. At the same time, drugs and video games pacify the masses until their eventual extinction.
What are your thoughts about this dystopian future? Is it inevitable?
Doug Casey: Harari projects a certain inevitability to the evolution of technology, and he may actually be right.
I don’t mind change. Rapid technological progress has been accelerating for the last 10,000 years and, with a little luck, will go hyperbolic with the evolution of nanotechnology, computers, biotech, space exploration, robotics, and artificial intelligence. These are all good things.
The question is whether these things will be imposed upon humanity or will they be something that individuals can adopt or not as they choose? To me, this is the essential ethical and moral question.
Harari, and for that matter, the rest of these WEF people, never examine any ethical or moral issues.
For instance, Harari is very big on transgenderism, which he seems to want to make into a political hobby horse—where it’s not just accepted as a psychological aberration, but is almost imposed on society, whether you like it or not.
He’s a vegan. I have no problem with being a vegan. It’s just that he wants to impose his views of the correct way to deal with animals (absolutely including humans) on everybody else. He’s certain that he knows what’s best for everybody else.
I’ve long believed in the arrival of the Singularity, which Ray Kurzweil has discussed in detail. I think it’s a good thing. Technological progress has always been a good thing—whether we’re talking about the invention of gunpowder that allowed the average man to overthrow his medieval rulers, or the printing press, that allowed peasants to access the knowledge of the ruling classes.
But the problem is that the bad guys usually get control of technology first. The powers-that-be use tech to impose their will upon the little people until the cat gets out of the bag.
I’m all for the rapid evolution of technology, even though it’s very dangerous because the power-mongers, the bad guys, and the minions of the State usually get it first.
On the bright side, I suspect that under the influence of Schwab and his muchacho de mantequilla Harari, the WEF will collapse. The snakes in the snake pit will eventually turn on each other. Optimism is warranted because stupid ideas have always come and gone throughout history. Evil is usually vanquished over the long run.
The WEF is promoting destructive ideas in a dangerous time. If you value free thought, free minds, and free markets, recognize the WEF as an enemy.
* * *
Sociopaths are drawn to the government and international organizations like the World Economic Forum. They seek power and control over others through coercion, taxation and more. Unfortunately, there’s little any individual can practically do to change the course of these trends in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation. New York Times best-selling author Doug Casey and his team just released a guide that will show you exactly how. Click here to download the PDF now.
Tyler Durden
Wed, 11/09/2022 – 19:40 - Pennsylvania Reelects Dead Democrat
Pennsylvania Reelects Dead Democrat
A Pennsylvania state representative who died in October was reelected during yesterday’s midterm elections, according to the Pennsylvania House Democratic Caucus.
Anthony “Tony” DeLuca, 85, died Oct. 9 “after a brief battle with lymphoma, a disease he twice previously beat,” the Caucus said in a statement.
“While we’re incredibly saddened by the loss of Representative Tony DeLuca, we are proud to see the voters continue to show their confidence in him and his commitment to Democratic values by re-electing him posthumously. A special election will follow soon,” said PA House Democrats in a tweet, Fox News reports.
Some folks commenting that the voters here were oblivious. Some certainly were. But for others, they likely preferred the idea of a special election over electing the third-party candidate on the ballot
— Charlie Wolfson (@chwolfson) November 9, 2022
Challenger Queonia “Zarah” Livingston, who is living, ran a far-left campaign, with her top three priorities listed on her website as; environmental justice, ending the war on drugs and reducing gun violence.
DeLuca was a resident of Penn Hills for over 60 years. He got his start in politics serving on the Penn Hills Government Study Commission, then five years as a Penn Hills Councilman, followed by two years as Penn Hills Deputy Mayor before running for his legislative seat and defeating the Republican incumbent. -Fox News
DeLuca had four children, nine grandchildren and three great-grandchildren.
Tyler Durden
Wed, 11/09/2022 – 19:20 - Global Energy Driven Inflation May Ease As China Sees Lower Growth
Global Energy Driven Inflation May Ease As China Sees Lower Growth
By Simon Watkins of OIlPrice.com
The key driver of the rising inflation causing economic mayhem across the developed world remains historically elevated oil and gas prices that have been in play since the prospect of Russia’s invasion of Ukraine first came into view, which was in September last year, when the oil price was around US$65 per barrel (pb) of Brent. This rise, when combined with the huge rise in global liquidity caused by the various long-running quantitative easing programs that followed the Great Financial Crisis, have led Western government to embark on a series of dramatic increases in interest rates aimed at capping inflation but which, in themselves, may cause long-lasting economic recessions. One major factor that may serve to mitigate against this, by acting as a drag on oil and gas prices, is the economic outlook of China, which surpassed the U.S. as the largest annual gross crude oil importer in the world in 2017.
Part of the problem for China’s economy has been the exceptionally negative effects of its ‘zero-Covid’ policy. This policy, personally championed by President Xi Jinping, is based on ultra-tight lockdowns that are introduced across entire cities immediately that a relatively miniscule number of Covid-19 cases are identified. December 2021 had seen a refinement of the zero-Covid strategy to one incorporating the idea of ‘dynamic clearing’, which provided local governments more flexibility in imposing restrictions, allowing daily increases in symptomatic cases to be capped at around 200 on a national basis. It was thought that this number might be increased, given that in the new outbreaks in March this year alone, 184,000 individuals with possible Covid symptoms had been put under medical observation in isolation in the first two weeks of those outbreaks.
Optimism arose from comments made by several Chinese agencies about a possible softening up of the zero-Covid rules, and then came the publication in the middle of April of the Chinese Center for Disease Control and Prevention (CCDC) guide that outlined measures for quarantining at home. These would have alleviated the economy-paralysing effects of people having to quarantine at centralised state-run facilities, even if suffering from very mild symptoms or none, having tested positive for Covid-19. These hopes were dashed, though, as, when asked for further clarification of these home-quarantining procedures, the CCDC simply reiterated the previous rules. President Xi then personally reiterated that: “We must adhere to scientific precision, to dynamic zero-Covid…Persistence is victory.” As it now stands, China still does not have an effective vaccine against Covid-19, nor does it have an effective post-infection anti-viral, and it still refuses to buy in such supplies from non-domestic suppliers, despite repeated offers from all major producing countries to make such supplies available to it.
The clean sweep of support that President Xi secured at the recent 20th Party Congress to be re-elected as General Secretary of the Chinese Communist Party for a third term almost certainly means that this zero-Covid policy will not change at all. “China’s commitment to its dynamic clearing COVID strategy remains the strongest headwind to growth, and official statements before and during the Party Congress trumpeted the policy as the most appropriate for the country,” Eugenia Fabon Victorino, head of Asia Strategy for SEB, told OilPrice.com last week. “In 2020, China’s economy managed a swift recovery from the first wave of infections as mobility restrictions succeeded in capping transmissions to a limited number of regions, but the increasingly contagious viral strains have led to a substantial rise in regions reporting daily new cases of COVID,” she added. Indeed, as of just over a week ago, 26 out of 31 regions had seen severe outbreaks that threaten to spear to China’s key commercial cities.
Another part of the problem for China is the increasingly perilous position of the country’s property sector and, by extension, of its huge hidden debt burden. The collapse of major Chinese real estate developer, Evergrande, earlier this year, under the weight of over US$300 billion in liabilities, heightened concerns that contagion might spread beyond the property sector, crushing demand in China’s offshore bond markets. As highlighted by OilPrice.com at the time, and well before that by then-Fitch analyst, Charlene Chu, China had long been hiding a mountain of debt, used in part to finance its extraordinary economic growth for the 20 or so years since the 1990s. Combined with the corollary bubbles in China’s housing and other asset markets that have been inflating over the past few years, as analysed in depth in my new book on the global oil markets, the situation in China right now is very similar to the one in the West in 2007/08 to which nobody paid attention until there started to be bankruptcies, which then snowballed into the full-blown Great Financial Crisis. “Before the Congress, Beijing announced yet another raft of policy adjustments to boost housing demand,” said SEB’s Victorino. “However, cash-strapped developers continue to default on offshore bond maturities- in fact, the issuer-based offshore default rate among real estate names continues to climb, to 20.4 percent as of September, from 5.2 percent at the end of 2021,” she added.
In terms of specific negative ramifications for China’s economic growth, the key Purchasing Managers’ Index (PMI) for factory activity fell unexpectedly in October, to 49.2, a decrease of 0.9 from the previous month, and indicative of an outright contraction. In line with this, China’s crude oil imports for the first three quarters of the year fell 4.3 percent year-on-year to mark the first annual decline for the period since at least 2014. As at the end of the first half of this year, then, the economic outlook for China was already deteriorating more than had previously been expected, with SEB’s Victorino and TS Lombard’s head of China and Asia research, Rory Green, having already downgraded their GDP growth estimates for China earlier in the year, to just 3.5 percent in SEB’s case, and only 2.5 percent in TS Lombard’s.
Tyler Durden
Wed, 11/09/2022 – 19:00 - Midterms And Markets: The Good News And The Bad News
Midterms And Markets: The Good News And The Bad News
While stocks pummeled today on a toxic cocktail of bad news including the collapse of FTX, and the lack of a red wave, Deutsche Bank had some good news for investors who are now shaking ahead of tomorrow’s CPI print which could deliver the knock out blow should it come in hot.
So here is the good news: as DB strategist Jim Reid notes, in all 19 post WWII midterm cycles, the S&P 500 has always been higher 12 months after the elections were out of the way. You can see it here.
Additionally, in Reid’s Nov 8 Chart of the Day, he shows the performance of the S&P 500 through the four year election cycle with Y1 Q1 referring to the inauguration quarter of the new President and midterms being Y2 Q4. As one can see, the three quarters from midterms onwards are historically amongst the strongest quarters however far you go back. Indeed since 1949 they ARE the strongest three. Will history repeat itself? It may well do in the short -term as uncertainty lifts.
However before investors dump all their money in the stock market in hopes of a guaranteed 12 month return, here is the bad news in the form of a follow up analysis from Reid why we should be very careful about this analysis around midterms and positive markets in the subsequent 12 months.
The chart below shows the same 4-year presidential cycle as the one shown above, but instead of equity returns this time Deutsche shows the percentage of time in each quarter since 1949 that the US economy has been in recession. For example, Y1 Q1 has seen a recession within it just over 15% of the time over the last 73 years.
The real jaw dropper though is that over this period a recession has not started in year 3 of the election cycle. There have been legacy recessions that ended in Y3 Q1 but for the other Y3 quarters the graph shows a stunning zero percent. Given that equities tend to bottom on average mid-way through a recession one can see that history would suggest Y3 of the presidential cycle has always had a clear run in a way no other year has.
The obvious next question is whether there is a reason why Y3 has not seen a recession start during it since 1949. At a push an incumbent president might be more minded to allow a recession in Y1 and Y2 of the presidency to save bullets for the re-election campaign/legacy in Y4 (unless, of course, one is terminally confused about everything like Biden and his puppetmasters). Therefore recession risk might be front loaded in an election cycle (it could also all be completely random).
If the argument on lack of front-loaded stimulus above has any grounding, you can’t say it about this presidential cycle as the Biden Y1 saw the culmination of the largest stimulus package seen in history with no bullets left to fire now. So much so that the hiking cycle this year has been by far the most aggressive seen in any Y2 of the cycle.
Which is why this time can be a lot different to history. So, in conclusion, Jim Reid says that “the midterms and subsequent positive equity performance charts that you’re seeing from me and others have to be put in context. Unless of course you think the lack of a Y3 recession through history can be easily explained and is likely to repeat in 2023. If so, please let me know ASAP before I finish my 2023 outlook.”
More in the full reports available to pro subs in the usual place.
Tyler Durden
Wed, 11/09/2022 – 18:40 - India Pledges To Buy More Russian Oil, Mulls Joint Weapons Production
India Pledges To Buy More Russian Oil, Mulls Joint Weapons Production
Authored by Kyle Anzalone via The Libertarian Institute,
Indian Foreign Minister Subrahmanyam Jaishankar says his country has no plans to stop importing Russian energy. The statement was made as Western countries plan to roll out price caps on Moscow’s oil exports next month.
Jaishankar traveled to Russia to meet his counterpart Sergey Lavrov on Tuesday. At a joint press conference, the Indian diplomat stressed the importance of the New Delhi-Moscow relationship, saying “Russia has been a steady and time-tested partner” and that “any objective evaluation of our relationship over many decades would confirm that it has actually served both our countries very, very well.”
Image via Russian Foreign Ministry/Twitter Since President Vladimir Putin ordered the invasion of Ukraine in February, Washington has led a sanctions campaign aimed at crushing the Russian economy. However, so far, the economic war has largely backfired.
Rising energy prices in much of the West have led to protests against the sanctions in Europe. Meanwhile, the Russian economy has weathered the Western isolation by selling more oil to China, India and Turkey, despite pressure from the United States to sever their ties with Moscow. Prior to the war, New Delhi imported just 2% of its oil from Moscow. By September, that number had jumped to 23%.
US Treasury Secretary Janet Yellen devised a scheme to cut Russia’s energy exports by enforcing a price cap on Moscow’s oil. The US announced the cap will take effect December 5 but did not set the value. The price ceiling requires Russia to agree to sell its oil at below market value, though the Kremlin has warned that any country attempting to enforce the measure will simply be cut off from Russian oil.
Jaishankar indicated that New Delhi will not institute the price cap and will continue buying Russian oil at the previous rates:
“As the world’s third-largest consumer of oil and gas, a consumer where the levels of income are not very high, it is our fundamental obligation to ensure that the Indian consumer has the best possible access on the most advantageous terms to international markets,” he said, adding “we have seen that the India-Russia relationship has worked to advantage. If it works to my advantage, I would like to keep that going.”
Russian Foreign Minister Sergey Lavrov says he discussed the joint production of modern weapons with his Indian counterpart during their fifth meeting this year. https://t.co/poEmVppFED
— DW News (@dwnews) November 8, 2022
https://platform.twitter.com/widgets.js
For his part, Lavrov discussed new potential arms agreements between New Delhi and Moscow, noting that the two officials “discussed in detail the state and prospects of military-technical cooperation, including joint production of modern arms.”
Tyler Durden
Wed, 11/09/2022 – 18:20 - Beijing Insists On Zero-COVID Policy But Blames Local Governments For Excessive Measures
Beijing Insists On Zero-COVID Policy But Blames Local Governments For Excessive Measures
Authored by Mary Hong via The Epoch Times,
In a press conference on Friday, the Chinese Health Commission insisted the country’s zero-COVID policy is an effective and economic measure for pandemic containment.
The officials also blamed local governments such as Zhengzhou for unscientific measures that hurt the economy and frustrated the public.
On Nov. 5, the Health Commission emphasized sticking with the policy to prevent imported cases and recurrence of the domestic cases, and claimed the policy is the “accurate” way to deal with the pandemic.
Blaming Local Governments
In answering press questions on complaints posed by the populace during the implementation of the zero-COVID policy, the officials named Zhengzhou, in central China Henan Province, as the city that received the most criticism for its arbitrary travel restrictions and lockdowns.
Consequently, Zhengzhou officials held a press conference on Nov. 6, apologizing to the public and promising to rectify its measures in containing the virus.
The manufacturing sector in China has seen the disastrous impact of the arbitrary lockdown imposed by the authorities.
A resident undergoes a nucleic acid test for COVID-19 in Anyang in central China’s Henan Province on Jan. 26, 2022. (STR/AFP via Getty Images)
On Nov. 2, Zhengzhou imposed a seven-day lockdown for the industrial park where the manufacturer Foxconn is housed.
Since September, Zhengzhou has been one of the epicenters of viral infection. Positive cases were also reported in the Foxconn factory starting in October.
Recently, a large number of Foxconn employees fled the factory for fear of infection and a shortage of food and medicine on the factory premises due to the lockdown.
The Zhengzhou Foxconn location is Apple’s largest iPhone assembly factory in the world.
According to the 2020 China Top 500 Foreign Trade Research Report by the Statistical Society for Foreign Economic Relations & Trade of China, Zhengzhou Foxconn contributed to 82 percent of Zhengzhou’s total export value in 2019; Zhengzhou Foxconn’s total export volume reached $31.6 billion, the largest contributor to Chinese foreign trade export in 2019; and the import and export volume was second only to two state-owned enterprises, China Petrochemical Corporation and China National Petroleum Corporation.
On Nov. 6, Apple released a statement saying that the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou is currently “operating at significantly reduced capacity.”
Tyler Durden
Wed, 11/09/2022 – 17:40
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