- A Self-Loathing Ruling Class Cannot Endure
A Self-Loathing Ruling Class Cannot Endure
Authored by Conrad Black via AmGreatness.com,
The U.S. now has an official regime of lies, supported by an almost worthlessly dishonest media, and scores of millions of Americans brainwashed into the false view that they live in an evil country…
Not every aspect of the onslaught of self-hate that has broken over America, warped its media, and turned most of the academy – and even apparently, most of its elementary and secondary schools – into centers of reorientation designed to convince Americans their national past is loathsome hypocrisy, is bad. Every country has a national mythos, and the larger, more complicated countries have relatively elaborate, conventionally agreed-upon versions of the raison d’être of their nationalities. In the case of the United States, there have always been some soft points in this rationale, and to a slight extent, there may be some merit in addressing them.
Despite the brilliant opening and ending of the Declaration of Independence, the indictment of King George III as a virtual Nuremberg Trial defendant who was trying to destroy America and indiscriminately kill its people, while dabbling in other atrocities such as the propagation of the Roman Catholic faith throughout the 13 colonies (an insane allegation—Jefferson was referring to the Quebec Act, which assured that population the practice of their language, religion, and civil rights) was an outrage. George III was a limited monarch who suffered from porphyria, but he was far from an evil man (and he was an arch-Protestant papaphobe).
The facts were that Americans really had no more civil rights after the Revolution than before, nor measurably more civil rights than citizens of England, Switzerland, most of the Netherlands, and parts of Scandinavia. But they had a resident government. Unlike almost all the nations of Europe and East Asia, in a world of only about 25 sovereign countries, the United States did not have a language of its own, and its founders, with great ingenuity, and eloquence invented for it the vocation of freedom and opportunity. The lore was not of the past but of the future. And with the dramatic emergence of the Americans, facilitated by Franklin’s stupendous feat in persuading the absolutist French monarchy to go to war on behalf of secessionism, democracy, and republicanism, the eyes of the world were on America and have never ceased to be on America these 245 years.
There was from the start the terrible problem of slavery, which belied the assertion that “all men are endowed by their Creator with certain inalienable rights.” The Civil War was conducted in the North to preserve the Union, and only the immense political dexterity of Abraham Lincoln achieved the approval of the emancipation of the slaves as a war aim, in part to stir unrest within the Confederacy.
Segregation continued to be enforced with an iron fist in the South and not infrequently in parts of the North as well, for over a century. The South was completely defeated but had received credit for 60 percent of the slave population in establishing their congressional and Electoral College representations before the war and henceforth received 100 percent credit for the African Americans who, though nominally emancipated, still could not vote in the South.
When Franklin D. Roosevelt was hassling Winston Churchill in the midst of World War II about granting independence to India and suggesting texts from the founding of America as models to use, Churchill was well within his rights in saying to his entourage (although, unfortunately, he did not say it to Roosevelt) that he would take his solicitude for the vast masses of India more seriously if he could pass an anti-lynching law in his own Congress.
A Question of Scale
If the Americans had resisted the temptation to revolution, then as Benjamin Franklin had predicted, by approximately the time of the Civil War, Americans would have been preeminent in the entire British world: a vast expanse of South Asia, Australasia, Africa, and all of North America north of the Rio Grande. There would have been much less pressure for independence from such a formidable empire, and the power and influence of the Americans this past century would have been much greater even than it has been. It is also doubtful that Germany or Japan would ever have dared warfare with such an immense power.
Even to those who wish America well, the whole argument of American exceptionalism became threadbare and tiresome decades ago, and is entirely now a question of scale, a measurement by which China threatens the United States more seriously than has any other country in over a century.
One of the most nauseatingly persistent American delusions is that the American justice system is one of the best in the world. As I have written here and elsewhere, it is an appalling, disgraceful, terribly unjust 360-degree cartel for the avaricious legal profession, and on the criminal side, it has been so undermined by the corruption of the plea bargain system that it is essentially the right of prosecutors to suborn false inculpatory testimony with no danger of sanctions for their misconduct.
The result is that the United States has six to 12 times as many incarcerated people per capita as other comparable large prosperous democracies: Australia, Canada, France, Germany, Japan, and the United Kingdom. Its conviction rates are much higher than almost all of these countries and so are its crime rates. Millions of innocent people are convicted and millions of innocent people are over-sentenced and millions are ground to powder in the conveyor belt to the bloated and corrupt American prison system. Everyone who is acquainted with the facts is aware of this.
The Bill of Rights guarantees of due process, a grand jury as assurance against capricious prosecution, an impartial jury, no seizure of property without just compensation, access to counsel of choice, prompt justice, and reasonable bail have been practically expunged.
But with all that said, the flag-waving, anthem-singing, traditional pride in America was and remains substantially justified.
All nations have somewhat delusional self-images and though the American star system elevates many who are not stars, the current eruption of Americophobia is vastly excessive, utterly despicable, cannot remotely be sustained, and is propagated, not just by the faddishly and aggressively ignorant, but also by disturbed and often wicked people.
Self-Hatred as Virtue
America’s exceptionalism has been diluted by America’s success: once the United States realized that it was in a Cold War, it defined this as a life and death struggle between totalitarian communism and the free world, never mind that the free world included the dictatorships of Latin America, the House of Saud, Franco’s Spain, Salazar’s Portugal, Syngman Rhee’s South Korea and many other dubious claimants to the title of champions of freedom. Most of them became democracies and the world must never forget nor fail to be grateful for the fact that the United States is chiefly responsible for the spread of democracy and the free market.
No nation in history has made the effort the United States has to eliminate racial discrimination and to assist minorities bootstrapping themselves up to parity. Whatever liberties may have been taken in national rhetorical puffery, there has never been anything remotely like America’s rise from a few million colonists in two long lifetimes after the Revolutionary War to, as Churchill said in his eulogy of President Roosevelt to a position of “might and glory . . . never attained by any nation in history.”
Possessed of a nuclear military monopoly and half the GDP of the world, the United States turned its energies to putting western Europe and Japan back on their feet. The attempt of the American enemy within to portray the United States as an evil racist enterprise based on slavery is a blood libel on the same level of pernicious mendacity as the Protocols of the Elders of Zion. The right of educators to teach falsely sourced self-hatred and of the media’s righteous replacement of reporting with subversive and defamatory advocacy is now proclaimed as a long-repressed virtue. It does not fall far short of treason and Joe Biden will pay for his endorsement of the false charge against his country of “systemic racism.”
The United States now has an official regime of lies, supported by an almost worthlessly dishonest media, and scores of millions of Americans have been brainwashed into the false view that they live in an evil country. This lie will not succeed because everyone in America can see that it is not true.
Most Americans are reasonable and fair-minded people most of the time, and their numbers, their patience, and the righteousness of their not-uncritical faith in and love for their country will ultimately prevail. There was no excuse for the secretary of state to turn a meeting with the Chinese on American soil into a confessional for a cringe-worthy recitation of America’s faults. Despite everything, America remains a proud country with much to be proud of, and no person nor any nationality can stand unlimited, unjustified, self-loathing. It will end sooner than we dare think, and it will take down its ghastly and contemptible preceptors with it, including the dismal Pharisees of this administration.
Tyler Durden
Sun, 04/11/2021 – 00:00 - Visualizing The Plunging Purchasing Power Of The US Dollar
Visualizing The Plunging Purchasing Power Of The US Dollar
The purchasing power of a currency is the amount of goods and services that can be bought with one unit of the currency.
For example, one U.S. dollar could buy 10 bottles of beer in 1933. Today, as Visual Capitalist’s Govind Bhutanda notes, it’s the cost of a small McDonald’s coffee.
In other words, the purchasing power of the dollar – its value in terms of what it can buy – has decreased over time as price levels have risen.
Tracking the Purchasing Power of the Dollar
In 1913, the Federal Reserve Act granted Federal Reserve banks the ability to manage the money supply in order to ensure economic stability. Back then, a dollar could buy 30 Hershey’s chocolate bars.
As more dollars came into circulation, average prices of goods and services increased while the purchasing power of the dollar fell. By 1929, the value of the Consumer Price Index (CPI) was 73% higher than in 1913, but a dollar was now enough only for 10 rolls of toilet paper.
Between 1929-1933, the purchasing power of the dollar actually increased due to deflation and a 31% contraction in money supply before eventually declining again. Fast forward to 1944 and the U.S. dollar, fixed to gold at a rate of $35/oz, became the world’s reserve currency under the Bretton Woods agreement.
Meanwhile, the U.S. increased its money supply in order to finance the deficits of World War II followed by the Korean war and the Vietnam war. Hence, the buying power of the dollar reduced from 20 bottles of Coca-Cola in 1944 to a drive-in movie ticket in 1964.
By the late 1960s, the number of dollars in circulation was too high to be backed by U.S. gold reserves. President Nixon ceased direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.
More Dollars in the System
Money supply (M2) in the U.S. has skyrocketed over the last two decades, up from $4.6 trillion in 2000 to $19.5 trillion in 2021.
The effects of the rise in money supply were amplified by the financial crisis of 2008 and more recently by the COVID-19 pandemic. In fact, around 20% of all U.S. dollars in the money supply, $3.4 trillion, were created in 2020 alone.
How will the purchasing power of the dollar evolve going forward?
Tyler Durden
Sat, 04/10/2021 – 23:30 - Joe Biden: America's Biggest Gun Salesman
Joe Biden: America’s Biggest Gun Salesman
Op-Ed by Roger L. Simon via The Epoch Times
With his new – most likely unconstitutional – executive orders regarding weapons, Joe Biden is cementing his place as America’s leading gun salesman…
President Joe Biden speaks during an event on gun control in the Rose Garden at the White House in Washington on April 8, 2021. (Alex Wong/Getty Images) Gun sales have been wildly up all year. He just pushed them to a new level.
It’s almost as if he were marketing director for Smith & Wesson.
(As America’s president he might have made that clear to prevent people from running out to buy yet more Austrian-made Glocks when the locally-produced version is arguably as good.)
The hypocrisy of this doddering man who threatened to punch out Donald Trump is nothing short of monumental.
Any sentient being—not a slavish, ultra-conformist Democrat who no longer thinks for him or herself—has been alarmed at the escalating violence in our streets.
Murders are way up. Assaults are way up. Police protection way down.
This is all thanks to our Democrat friends many of whom seek to defund and/or handcuff the police, even, in some cases, after the latest group of self-described revolutionary maniacs has decided to torch their house.
But the president wants to disarm us. Hello, Germany 1938.
The measure of this hypocrisy can be seen in the treatment of those who breached the Capitol on Jan. 6—many of whom are still incarcerated without bail, including those with no criminal record whatsoever, none of whom (nota bene) had guns of any sort, not even a Derringer tucked in a boot—compared with the treatment of Antifa and Black Lives Matter demonstrators.
The latter, always thugs in the Antifa case and too often thugs in the BLM case, almost always get off and got off “Scot Free” after committing true acts of violence and mayhem that dwarf anything that happened in the Capitol.
We can easily mock the usual liberal virtue signaling about guns going on here, but one of Mr. Biden’s proposals is particularly alarming because superficially attractive to many.
He has directed the Department of Justice to publish model “red flag” legislation for the states. Those are laws that allow family members, police, and possibly others to ask a court to bar an individual from possessing firearms if he or she seems to be dangerous to themselves or others.
We might call this the “Stasi Law” because it encourages us to snitch on each other in the manner of East Germany under their Stasi, the most ruthless of all communist intelligence agencies before the fall of the Iron Curtain.
If you have seen the brilliant German film “The Lives of Others,” you know how it worked. (If you haven’t, download this movie now. It’s the most relevant political film made in the last twenty-five years.)
And speaking of the cinema, it used to be in the old Hollywood movies the snitch was considered an oily villain who got his just deserts. Unamerican, really. Nowadays, we’re headed in the opposite direction, not just in film, but in our society.
This “snitchery” is already here. I recently heard the story of some Tennessee people who were warned by their own parents not to visit them in Pennsylvania because the parents’ neighbor would report a Tennessee license plate in their driveway—such interstate fraternization being verboten (I assume we all know that German word from World War II flicks) in Pennsylvania because of COVID.
The possibilities for similar behavior with “red flag” legislation are endless—children ratting on their parents and so forth—just as are the ramifications from vaccination passports.
We live in a different world.
In case you want to buy Smith & Wesson stock, it trades on the NASDAQ as SWBI. It’s down today a touch. You know what they say—buy on the dip.
Roger L. Simon is an award-winning novelist, Oscar-nominated screenwriter, co-founder of PJMedia, and now, editor-at-large for The Epoch Times. His most recent books are “The GOAT” (fiction) and “I Know Best: How Moral Narcissism Is Destroying Our Republic, If It Hasn’t Already” (nonfiction). He can be found on Parler as @rogerlsimon.
Tyler Durden
Sat, 04/10/2021 – 23:00 - Missouri Ghost Town Swarmed With People After Viral TikTok Video
Missouri Ghost Town Swarmed With People After Viral TikTok Video
Video of an abandoned Missouri resort town filled with dilapidated mansions has gone viral on TikTok as local law enforcement warns people to stay away.
Near Table Rock Lake in Branson, Missouri, is a 900-acre project, called Indian Ridge Resort, which held huge promises when it was partially constructed a little more than a decade ago. The ambitious $1.6 billion resort went bankrupt around the Great Recession of 2008 and has been dormant ever since.
However, the deserted resort has come back to life after a TikTok user posted a video of what appears to be a spooky ghost town.
The video has gained so much attention on the internet that people from all over are checking it out.
This prompted the Stone County Sheriff’s Office to warn potential thriller seekers inspired by the viral TikTok video to stay away from the private property.
“A recent Tik-Tok video went viral about the Indian Ridge development that went bankrupt. This has caused this location off of 76 Highway to become a tourist attraction. THIS IS PRIVATE PROPERTY AND YOU CAN BE CITED FOR TRESPASSING!Our Deputies are very busy handling calls for service and really do not want to write people tickets for trespassing. Please do not enter the property. Please do not trespass on the property. It has been a constant flow of people walking down in the development all weekend. Please go visit our many other tourist attractions in Stone County including Table Rock lake! Thank you! Sheriff Doug Rader”
The viral TikTok video, posted by user “carriejernigan1,” has more than 15.6 million views.
https://www.tiktok.com/embed.js
What’s impressive is how easily popular social media users can influence the masses. It only took one user to turn an abandoned resort town into a popular tourist attraction
Tyler Durden
Sat, 04/10/2021 – 22:30 - Canada's Green Shift Could Displace Three-Quarters Of Oil Workers
Canada’s Green Shift Could Displace Three-Quarters Of Oil Workers
Authored by Charles Kennedy via OilPrice.com,
Canada’s climate strategy to significantly cut emissions and become a net-zero emissions economy by 2050 will create a seismic shift in the large oil and gas sector, where up to three-quarters of the workers, or up to 450,000 people, are at risk of displacement, TD Bank said in a new report on Tuesday.
Canada aims to become a net-zero emissions economy within three decades, and to cut emissions by between 32 percent and 40 percent by 2030.
While those commitments could be critical to staving off the worst effects of global warming, Canada needs to take significant action, including coming to terms with the effect of climate policies on the oil and gas workers, the bank said.
“According to Natural Resources Canada, roughly 600,000 Canadians, located mostly in Alberta, Saskatchewan, and Newfoundland and Labrador are either directly or indirectly employed in the oil & gas sector. We estimate between 50-75% of those workers are at risk of displacement in the transition through 2050, equivalent to 312,000 – 450,000 workers,” TD Bank said in the report.
“The belief is that many of those displaced will find a home in the clean energy sector, but we should not assume that the transition will absorb all displaced workers,” the bank said, noting that it is critical that Canada do not repeat past mistakes and ensure a just transition for energy sector workers.
“The clean-energy transition will create many new job opportunities, but there is no guarantee or automatic market mechanism to ensure these benefits accrue to where the costs will be borne on the displacement,” according to the bank.
South of the border, in the United States, thousands of oil and gas jobs disappeared during the oil price and demand crash last year, and more and more former oil workers moved to jobs in the clean energy business. However, they have also taken a pay cut moving to renewables as the industry still pays lower than oil and gas.
Tyler Durden
Sat, 04/10/2021 – 22:00 - Turkey Furious After Mario Draghi Calls Erdogan "Dictator"
Turkey Furious After Mario Draghi Calls Erdogan “Dictator”
In the aftermath of last week’s historic snub, when the female president of the European Commission was left speechless – and chairless – during her controversial visit to Turkey’s president, diplomatic relations between Europe and Turkey has once again fallen off a cliff.
As a reminder, the European Commission president, Von der Leyen was clearly taken aback when she and her male partner, European Council President Charles Michel, met Erdogan in Ankara last Tuesday, only to find just two chairs prepared, which were quickly occupied by the men. Erdogan and Michel quickly seated themselves while von der Leyen, whose diplomatic rank is the same as that of the two men, was left standing. Official images later showed her seated on a sofa opposite Turkish Foreign Minister Mevlut Cavusoglu.
“Ehm” is the new term for “that’s not how EU-Turkey relationship should be”. #GiveHerASeat #EU #Turkey #womensrights pic.twitter.com/vGVFutDu0S
— Sergey Lagodinsky (@SLagodinsky) April 6, 2021
https://platform.twitter.com/widgets.js
In response, former Goldman partner, ECB head and current Italian Prime Minister, Mario Draghi, told reporters on Thursday that “I absolutely do not agree with Erdoğan’s behavior towards president Von der Leyen … I think it was not appropriate behavior and I was very sorry for the humiliation Von der Leyen had to suffer.”
He then said that “with these dictators, let’s call them what they are – who however are needed – one must be honest in expressing one’s diverging ideas and views about society.”
We would love to know more about what Draghi meant by “dictators who are needed” and how Europe treats them compared to dictators who are unneeded… like perhaps having Europe’s unelected money-printing dictators pushing their bond yields to double digits overnight? But we digress.
Predictably, Turkey was furious with the Italian Prime Minister for calling Erdogan a “dictator” and Turkey’s Foreign Ministry on Thursday summoned the Italian ambassador to Ankara to condemn the remarks. According to a foreign ministry statement, the ambassador was told that Draghi’s remarks were against the spirit of the Turkey-Italy alliance.
The ministry said Draghi should “immediately” take back his “impudent and ugly remarks”. Foreign Minister Cavusoglu also slammed the remarks in a tweet.
“We strongly condemn the appointed Italian Prime Minister Draghi’s unacceptable, populist discourse and his ugly and unrestrained comments about our elected president,” he wrote on Twitter.
Earlier on Thursday, Çavuşoğlu said that the seating at the meeting was arranged in line with the bloc’s demands and international protocol and that Turkey was being subject to “unjust accusations“.
Turkey has insisted that the EU’s own protocol requests were applied but the EU Council head of protocol said his team did not have access, during their preparatory inspection, to the room where the incident happened.
“If the room for the tete-a-tete had been visited, we should have suggested to our hosts that, as a courtesy, they replace the sofa with two armchairs for the president of the commission,” Dominique Marro wrote in a note made public by the EU Council. He added that the incident might have been prompted by the order of protocol established by the EU treaty.
Of course, Erdogan’s excuse was BS: the incident came only weeks after Erdoğan pulled Turkey out of a key European convention aimed at combating violence against women. The move was a blow to Turkey’s women’s rights movement, which says domestic violence and murders of women are on the rise. During her visit to Ankara, Von der Leyen called for Erdoğan to reverse his decision to withdraw from the Istanbul convention – named after the Turkish city where it was signed in 2011.
Not to put too fine a point on it, but with the world so deep inside the rabbit hole, we would not be surprised if WWIII broke out over some seating arrangement.
Tyler Durden
Sat, 04/10/2021 – 21:30 - Conservative Filmmakers Start To Fight Back
Conservative Filmmakers Start To Fight Back
Authored by Christian Toto via RealClearInvestigations,
A documentary film about an African American lawyer who rose from poverty and oppression in the Deep South to the highest court in the land would seem a natural for Black History Month. Yet, in February, at the very time its Prime Video service was featuring films highlighting black history makers, Amazon without explanation stopped offering digital streams of “Created Equal: Clarence Thomas in His Own Words.”
While the film was pulled despite having at one time reached No. 1 on Amazon’s documentary charts, the world’s largest online retailer continued to make available streams of less-popular documentaries, including a favorable one on Anita Hill, the former Thomas colleague who nearly derailed his Supreme Court confirmation.
Amazon initially refused to carry this film challenging the liberal narrative about the 2014 shooting in Ferguson, Mo., which helped spark the Black Lives Matter movement.That was frustrating to Michael Pack, writer-director of “Created Equal” and a documentary filmmaker for decades. But it was no surprise to him and the small but growing cadre of other conservative documentarians, who say they face obstacles because of their politics and are starting to fight back against the long odds of “cancel culture.” Black conservative scholar Shelby Steele saw Amazon initially refuse to carry his documentary “What Killed Michael Brown?” last year because it challenged the liberal narrative about the 2014 shooting in Ferguson, Mo., that helped spark the Black Lives Matter movement. Amazon, which relented after a public outcry, did not respond to a request for comment.
Justin Folk, director of “No Safe Spaces,” which focuses on college-based attacks on free speech and features prominent liberals including Dr. Cornel West and Van Jones, along with conservatives such as Dennis Prager, Dave Rubin and Ben Shapiro, said he had a hard time finding a traditional distributor for his documentary because Hollywood saw the film as conservative.
“Despite having big names in our film, a big audience, and a very relevant topic, we were mostly ignored,” said Folk, who said his film, which eventually grossed $1.3 million, was rejected by the prestigious Telluride Film Festival. “In one case, a major distributor actually admitted to us that they think our film is a winner but they can’t get behind it because Dennis Prager is in it.”
Conservative filmmakers faced little discrimination in the past because there were so few of them. That started to change in 2012, when conservative commentator Dinesh D’Souza’s “2016: Obama’s America” became the second-highest-grossing political documentary of all time ($33 million).
The years since have been a golden age for documentaries. Streaming services such as Amazon, Netflix, and Hulu have created major distribution channels, matching content with massive, algorithmically targeted audiences. This, in turn, has led to explosive growth in filmmaking. Documentaries that in the past might never have seen the light of day — since their economic viability would be tied to packing movie houses — can flourish today, particularly lately with people more homebound due to the coronavirus pandemic.
Typically it was liberal activists, not conservative polemicists like D’Souza, who made documentaries. As Thom Powers, who runs America’s largest documentary festival, DOC NYC, told CBS News, the best documentaries try to make a difference. “There have been films that have gotten people out of prison, like the ‘Paradise Lost’ series, or Errol Morris’ ‘Thin Blue Line.’ ‘Super Size Me’ totally changed the conversation around fast food. ‘Inconvenient Truth’ totally changed the conversation around climate change. So all over the world, you can see documentaries having an effect.”
But the idea of “making a difference” has generally trended in one direction politically, illustrated lately by Barack and Michelle Obama’s film production deal with Netflix, which has already yielded a best documentary Oscar. Virtually ignored is an underserved niche in the market. “More than 70 million Americans voted for Donald Trump in the November election,” the Hollywood Reporter noted in a March 11 story. “And, at the moment, there’s little Hollywood content that directly appeals to them. That leaves a big opening for those willing to risk ostracization from the rest of the industry.”
Industry support is crucial because it helps in raising money, in earning film festival slots to persuade a distributor to get a film in front of an audience, and enticing journalistic outlets to cover and review it.
“If you’re on the left, there’s a whole infrastructure that enables you to make things very easily,” said D’Souza, who illustrated his point by citing what he calls the “charmed life” of left-wing filmmaker Michael Moore. Each new Moore film is considered a pop-culture moment. They are featured at the top festivals, where they often win prizes – to go along with his Oscar for “Bowling for Columbine.”
“He’s on the ‘Today’ show and ‘The View.’ … There’s a whole apparatus of publicity in place,” D’Souza added.
D’Souza has succeeded without enjoying such support. But he said the odds against conservatives have worsened in recent years because of suppression by both Big Tech and woke corporations. His 2020 film, “Trump Card,” scrapped its planned theatrical release for a video-on-demand slate due to COVID-19, but the hurdles didn’t stop there.
“The radioactive connection wasn’t me, but Trump,” D’Souza says. “Trump Card” hit video-on-demand services several weeks before the 2020 presidential election, by design. D’Souza says Amazon placed a large order of “Trump Card” DVDs, which his company met. But some Amazon customers were told the product was “out of stock” and wouldn’t be delivered until after Election Day.
“I’m not used to these kinds of obstacles,” he says. “I never thought of Amazon as a left-wing company.” He’s changed that view after seeing it take part in a concerted takedown of Twitter alternative Parler as well as it removing books such as “When Harry Became Sally,” which criticized elements of the trans movement.
“What Killed Michael Brown?,” produced by filmmaker Eli Steele in tandem with father Shelby, faced similar discrimination. Amazon initially rejected the handsomely mounted, jazz-filled work, saying it didn’t meet the streaming giant’s quality standards and that no appeal would be heard. That news brought attention from the Wall Street Journal editorial page and other media outlets, and Amazon quickly reversed course. Eli Steele says that opened his eyes to how much sway Amazon holds over the film marketplace.
“The numbers between Amazon and other platforms are not even comparable,” Steele says of its sizable audience reach. He says most film festivals “lack the backbone to show perspectives outside of their echo chambers,” but he doesn’t want ideological diversity to be forced into the current system.
“Anyone can start their own film festival and they program it however they wish,” he says. “So why not plan a prestigious film festival that crosses all sorts of lines and invites healthy dialogue and debate?”
The conservative film sub-genre is attracting some unlikely participants. Radio talk show host Larry Elder made a splash in 2020 with “Uncle Tom,” a documentary letting black conservatives like him share their views and discuss how they’re treated by select liberals. The title captures the latter sentiment.
Elder, a best-selling author and nationally syndicated talk show host, says right-leaning documentaries often turn to private sources, like affluent Republicans, to fund their work. His film got little attention outside of conservative outlets at a time when the media invested heavily in telling black stories by black creators.
“It was ignored by the Hollywood ‘we want diversity’ community, including all the film reviewers of the major newspapers and trade publications like Variety and The Hollywood Reporter,” says Elder, who co-wrote, co-produced and appears in the film. “Uncle Tom” boasts only three official reviews at RottenTomatoes.com, and no critics’-average “Tomatometer” score, in contrast with a robust 96% “fresh” rating from users.
Neither The Hollywood Reporter nor Variety would comment on the matter.
Yet none of that stopped Elder’s documentary from turning a tidy profit. The film’s virtual opening weekend last June grossed $400,000. Elder notes the film quickly recouped its costs and ended up earning multiples of its budget of some $450,000 including post-production. It helped that Elder has a hearty social media presence – 859,000 followers on Twitter alone — along with a syndicated radio show to promote the project.
Its commercial success was also aided by the development of alternative distribution platforms, showing that markets can punish discrimination, and that discrimination may serve as the mother of innovation.
Initially, “Uncle Tom” was sold exclusively through a partnership with SalemNOW, part of the conservative media company that distributes Elder’s radio show. Following that 70-day exclusive with SalemNOW, the film’s website (UncleTom.com) became the primary sales location, with additional platforms added over the ensuing few months, including iTunes, Amazon and, later, Amazon Prime.
Elder says his team unsuccessfully approached Netflix about carrying “Uncle Tom,” a platform that features a crush of original, left-leaning documentaries including “13th” and “Miss Americana,” a film that honored Taylor Swift’s progressive awakening.
The team behind the film didn’t submit it to most major film festivals, save for the boutique USA Film Festival in Dallas. The documentary’s conservative bent helped shape that decision, as did restrictions in place from the ongoing pandemic.
RealClearInvestigations reached out to multiple documentary groups for comment on this story, including DOC NYC, the Southern Documentary Fund, the Center for Independent Documentary, Docs in Progress and the International Documentary Association. None responded to those queries. Neither did several major film festivals, including Sundance, Telluride, Slamdance and the Toronto International Film Festival.
Other conservative filmmakers are going outside traditional channels. SalemNOW began streaming Pack’s “Created Equal” on March 30 in response to Amazon’s decision to pull the film. (It’s listed on Amazon as a DVD but often out of stock.) Christopher Rufo has used YouTube to distribute his short films, including “Chaos by the Bay: The Truth About Homelessness in San Francisco” and “Mob Rule in Seattle.”
“I can immediately inject it into the bloodstream of the national conversation,” Rufo said. But, he added, coming out as a right-leaning storyteller in the documentary field is “complete poison to your career.”
“People tell me, ‘You’re now conservative. I can’t even work with you,’” says Rufo, who adds documentary organizations that once collaborated with him suddenly stopped returning his calls. “It’s kind of shocking. … They can’t even process how anyone would have another opinion.”
Documentary producer Nadia Gill of Encompass Films noted the industry’s allegiance to identity politics in a recent column for Persuasion.com:
First-hand experience of a subject has always been considered helpful in documentary filmmaking. But this has traditionally been a genre in which creators are free to engage with material that lies far beyond the boundaries of their own lives. Now, during the entire process — from access to financing and distribution — the filmmaker’s identity is at least as closely scrutinized as that person’s filmmaking aptitude.
Gill, who describes her political philosophy as “center left,” says modern documentaries can be broken down into two categories – classic and commercial, the latter fueled in part by Netflix’s robust documentary lineup. The former, Gill says, isn’t just liberal in nature but “fringe left,” while the commercial market offers some room for right-of-center storytelling. Either way, conservative documentaries rarely grace the film festival circuit.
“The vast majority of submissions [to film festivals] are, in fact, going to be from the left perspective,” she says. “It would be good for our industry to hear those voices [from the right] … and have an honest conversation.”
That won’t happen unless more independent funders show up to support this brand of art. Left-of-center storytellers can lean on a variety sources, including the Ford Foundation (2017’s “Whose Streets?”) and the MacArthur Foundation (2010’s “How Democracy Works Now”) to finance their work, Gill says.
“Progressive institutions have set themselves up for years to make these films,” she says. So far, few non-left groups have copied that approach.
Amanda Milius agrees. “The donor class of the right has to start acting like the donor class of the left,” says Milius, director of the 2020 documentary “The Plot Against the President,” based on the book of the same title by Lee Smith, a freelance contributor to RealClearInvestigations. “Put that money into issue-based culture … and creators that hold the same values you do. Make something that lives forever.”
“You’re probably gonna make your money back and more,” she adds, “plus, you’re investing in actual change of the culture.”
Tyler Durden
Sat, 04/10/2021 – 21:00 - UPS Buying Vertical Takeoff Aircraft For Time-Sensitive Deliveries
UPS Buying Vertical Takeoff Aircraft For Time-Sensitive Deliveries
About 1.5 years after the Federal Aviation Administration (FAA) granted UPS Flight Forward the ability to start a drone airline business, UPS Flight Forward announced Wednesday plans to purchase electric Vertical Takeoff and Landing (eVTOL) aircraft from Beta Technologies.
The first ten BETA aircraft are scheduled to enter UPS Flight Forward’s fleet by 2024, with an option to purchase an additional 150 more. Each eVTOL aircraft can carry upwards of 1,400 pounds of cargo and take off and land at UPS facilities in small and mid-size markets.
Ideally, the BETA aircraft will transport time-sensitive packages that would otherwise fly on small fixed-wing planes. The aircraft has a distance of 250 miles and can cruise at 170 mph. UPS will integrate the fleet of eVTOL aircraft for short routes that will ultimately speed up delivery times.
“This is all about innovation with a focus on returns for our business, our customers, and the environment,” said UPS Chief Information and Engineering Officer Juan Perez.
Perez continued: “These new aircraft will create operational efficiencies in our business, open possibilities for new services, and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operation.”
BETA’s eVTOL is designed to fly autonomously as UPS Flight Forward received the first FAA Part 135 Standard air carrier certification to operate a drone airline in 2019. The FAA certification will allow UPS to eventually fly payloads up to 7,500 lbs. with an operator or autonomously.
UPS Flight Forward’s future plans appear to be riveting as the package delivery and supply chain management company will soon begin to integrate large unmanned aircraft systems into our airspace to improve the delivery of time-sensitive packages across metro areas and regions.
Tyler Durden
Sat, 04/10/2021 – 20:30 - "You’d Have To Shut Down The Internet" To Ban Bitcoin, Says SEC's Hester Peirce
“You’d Have To Shut Down The Internet” To Ban Bitcoin, Says SEC’s Hester Peirce
Any government efforts to ban Bitcoin would be “foolish,” said Hester Peirce (aka “Crypto Mom”), a very Bitcoin-friendly commissioner at the U.S. Securities and Exchange Commission (SEC), during a MarketWatch virtual conference earlier this week, according to Cryptoslate reporter Liam Frost.
“I think we were past that point very early on because you’d have to shut down the Internet,” Peirce said, adding, “I don’t see how you could ban it. You could certainly make the effort. It would be very hard to stop people from [trading Bitcoin]. So I think it would be a foolish thing for the government to try to do that.”
Not only that, but the government would immediately wipe out $2 trillion in net wealth – the market cap of the crypto sector – an event that would have profoundly deleveraging consequences, and since much of that wealth is now backed by debt, for example all those debt-funded purchases of bitcoin by Microstrategy, such a move by the government would immediately destabilize the all important debt market.
The statement came on the heels of Ray Dalio, a billionaire investor and founder of Bridgewater Associates, arguing that there’s “a good probability” that governments around the world would ban Bitcoin and other cryptocurrencies.
Dalio told Yahoo Finance:
“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control. They outlawed gold, that’s why also outlawing Bitcoin is a good probability.”
However, according to Peirce, the main issue for authorities—at least when it comes to cryptocurrencies—is to find an approach to regulation that would be productive and non-restrictive at the same time. She noted:
“We’ve seen other countries take, I would say, a more productive approach. We really need to turn that around. And I’m optimistic, with a new chairman coming in with a deep knowledge of these markets, that is something we could do together—build a good regulatory framework.”
At the same time, Peirce also pointed out that she doesn’t know when—or if—a Bitcoin exchange-traded fund (ETF) will finally be approved in the U.S. Recently, we’ve seen a new wave of major investment companies, such as Fidelity Investments, SkyBridge Capital, and VanEck, filing their applications for Bitcoin ETFs with the SEC.
The regulator, however, never approved a single filing of this kind so far, which as discussed earlier, may be a good thing for not only bitcoin but the entire nascent DeFi ecosystem where hundreds of billions in very real money is now intertwined.
There is another reason why the government may have no intention of (ever) banning bitcoin: as Artemis Capital’s Christopher Cole wrote recently echoing what we said back in 2016 and 2017, “Bitcoin has emerged as a “shadow” monetary tool, a type of liquidity overflow to prevent even bigger asset bubbles in conventional assets such as commodities, stocks and housing.
As Cole tweeted, “right now [bitcoin] helps Gov by serving as a vol buffer for the middle class so money devaluation flows into a purely speculative asset and less into home prices or other goods.”
Bitcoin is a “shadow” monetary tool
Right now, it helps Gov by serving as a vol buffer for the middle class so money devaluation flows into a purely speculative asset and less into home prices or other goods
Explains lack of regulation, which will come concurrently w/inflation pic.twitter.com/SQQQql7p4P
— Christopher Cole (@vol_christopher) March 31, 2021
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Said otherwise, cryptos now represent some $2 trillion in excess liquidity that would otherwise be invested in housing or stocks, making both of these respective asset bubbles that much more prone to bursting, and bringing the entire asset-bubble dependent socia-economic and financialsystem closer to collapse. However, thanks to bitcoin, there is a substantial buffer allowing Powell to keep printing indefinitely.
This benign side effect of bitcoin which paradoxically allows the Fed to perpetuate its ultra-easy monetary policy for much longer, “explains lack of regulation” although once we hit hyperinflation and bitcoin goes offerless, regulation will come for one simple reason: it will be tantamount to deleveraging the system by trillions in a heartbeat (recall the market cap of all crypto assets is now above $2 trillion) and rising.
Regulation of crypto is a structural risk to investors/speculators
Regulation of crypto can be seen as 2nd order monetary tightening tool by Gov to tame inflation
All of the above doesn’t invalidate ownership of the asset but requires deep thought on risk-reward
My point
Regulation of crypto is a structural risk to investors/speculators
Regulation of crypto can be seen as 2nd order monetary tightening tool by Gov to tame inflation
All of the above doesn’t invalidate ownership of the asset but requires deep thought on risk-reward
— Christopher Cole (@vol_christopher) March 31, 2021
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This is a sound warning for bitcoin bulls, but it only applies when inflation gets truly out of hand, but that is unlikely to happen until lat 2022 or early 2023 assuming the Fed keeps rates at zero and barely tapers as it has been predicting it will do. That’s nearly two years of upside potential for the best performing assets of the year, decade, century and millennium.
Tyler Durden
Sat, 04/10/2021 – 20:14 - "First Substantive Victory For Beijing": China Hits Alibaba With Record $2.8 BIllion Antitrust Fine
“First Substantive Victory For Beijing”: China Hits Alibaba With Record $2.8 BIllion Antitrust Fine
With US politicians “desperate” to show internet monopolies Google, Facebook and Amazon just who is boss – if purely for brownie points with their constituents but terrified to actually do so in real life, China overnight showed how it’s done when Xi’s regime escalated his ongoing crusade against China’s richest man, Jack Ma, byt imposing a massive fine of 18.2 billion yuan, equivalent to $2.8 billion, against Alibaba Group for abusing its dominant position over rivals and merchants on its e-commerce platforms, a record penalty in the country that comes amid a wave of scrutiny on the business empire of company founder Jack Ma.
China’s State Administration for Market Regulation said Saturday in Beijing that Alibaba punished certain merchants who sold goods both on Alibaba and on rival platforms, a practice that it dubbed “er xuan yi”—literally, “choose one out of two.”
Alibaba’s business practices limited competition, affected innovation, infringed on the rights of merchants and harmed the interests of consumers, the regulator said.
The punishment was announced less than four months after China’s top regulator launched an antitrust probe into Alibaba, focusing on vendor claims that Alibaba pressured them into selling exclusively on its e-commerce platform. It is the harshest rebuke yet against the company, though it also removes some uncertainty over the company’s future.
The record fine is equivalent to 4% of the company’s domestic annual sales, the regulator added. Under Chinese rules, antitrust fines are capped at 10% of a company’s annual sales. As part of the penalty, regulators said they will require that Alibaba carry out a comprehensive revamp of its operations and submit a “self-examination compliance report” within the next three years.
“The regulator’s punishment of Alibaba Group is a move to standardize the company’s development and set it on the right path, to purify the industry and to forcefully protect fair competition in the market,” the Communist Party’s flagship newspaper the People’s Daily said in a commentary on the regulator’s statement, adding that the fine is “also a kind of love.”
The fine isn’t intended to deny the importance of the platform economy to China’s development or to signify a change in state support for its development, the newspaper said.
Terrified of inciting an angrier onslaught by Beijing, which “disappeared” Jack Ma for several months after Chinese fintech giant Ant was forced to yank its IPO last November in a show of force between Xi and Ma which the Chinese president handily won, a penitent Alibaba said that it “accepts the penalty with sincerity and will ensure its compliance with determination,” adding that “to serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation.”
Quoted by the WSJ, Jeffrey Towson, a former professor at Peking University’s Guanghua School of Management said that “that is serious money, but it’s not going to hinder their development,” adding that “it strikes you as an appropriate level for corrective action.”
Alibaba came under regulatory scrutiny after Ma angered government officials, including President Xi Jinping, with his criticism that regulatory restrictions were hampering innovation. Ma’s comments derailed the much-anticipated initial public offering of Ant Group.
Since the investigation was announced, Alibaba has made conciliatory gestures such as establishing a task force to review its businesses internally and by saying it will shoulder more social responsibility.
The punishment marks the first substantive victory for Beijing in trying to restrain the market power of the country’s internet giants, according to Fang Xingdong, a former internet entrepreneur and founder of Beijing-based think tank China Labs.
“The 4% is still undoubtedly a compromise,” Mr. Fang said of the fine, arguing that regulators could have justified a higher number given the damage Alibaba’s practices caused and its previous unwillingness to cooperate.
While the fine is large, the government’s treatment of Alibaba contrasts with that of Ant Group, which has been ordered to transform itself into a financial holding company overseen by China’s central bank. The restructuring could significantly cut into revenue and profit growth at Ant. Its IPO had been expected to be the world’s largest before it was canceled.
Chinese officials said Beijing was reluctant to come down too severely on Alibaba, a pillar of the Chinese tech sector that is immensely popular among consumers, but wanted it to dissociate from Ma, The Wall Street Journal previously reported.
Ironically, the new clarity on Alibaba’s future should come as a relief to some investors, said Towson although questions remain:
“I think the next question is, are they going to move on from Alibaba now to another company?”
Alibaba’s shares, which hit a record high in October, have fallen 27% in Hong Kong since Ant’s IPO was canceled in November. The company’s American depositary receipts have declined 22% over the same period. Alibaba thanked customers, merchants and investors for their patience in an open letter on Saturday.
“It is not lost on us that today’s society has new expectations for platform companies, as we must assume more responsibilities as part of the nation’s economic and social development,” the letter said.
Tyler Durden
Sat, 04/10/2021 – 19:30 - Target Sells Woke Prayer Book: "Dear God, Please Help Me Hate White People"
Target Sells Woke Prayer Book: “Dear God, Please Help Me Hate White People”
Authored by Simon Black via SovereignMan.com,
Are you ready for this week’s absurdity?
Here’s our weekend roll-up of the most ridiculous stories from around the world that are threats to your liberty, risks to your prosperity… and on occasion, inspiring poetic justice.
Prayer Book Urges “help me to hate White people.”
A prayer book called “A Rhythm of Prayer: A Collection of Meditations for Renewal,” is a number one bestseller on Amazon in the category “meditation”.
One prayer, called “Prayer of a Weary Black Woman,” by Dr. Chanequa Walker-Barnes, a theology professor at Mercer University, starts:
“Dear God, Please help me to hate White people. Or at least to want to hate them… I want to stop caring about their misguided, racist souls, to stop believing that they can be better, that they can stop being racist.”
The “prayer” then describes the type of White person they want to hate— not the actual blatantly racist ones, but the “wolves in sheep’s clothing” who “don’t see color”, are friendly and accepting on the surface.
“Lord, if it be your will, harden my heart. Stop me from striving to see the best in people. Stop me from being hopeful that White people can do and be better. Let me imagine them instead as white-hooded robes standing in front of burning crosses. Let me see them as hopelessly unrepentant, reprobate bigots who have blasphemed the Holy Spirit and who need to be handed over to the evil one.”
“Grant me a Get Out of Judgment Free Card if I make White people the exception to your commandment to love our neighbors as we love ourselves.”
This is a sick, insane, religious cult of hateful people. But institutions like churches, schools, and corporations are pushing this blatant racism mainstream.
The book is also available at Target— a store which banned a book that gave voice to transgender people who regretted their decisions to transition.
But hatred of white people is perfectly acceptable.
Click here to see photos of the excerpts.
Teachers Union President Says “Jews are now part of the ownership class”
The head of one of the largest teachers union in the US took aim at Jews who criticize opening schools back up.
When asked about the people who don’t understand why some teachers don’t want to return to in person teaching, Randi Weingarten, President of the American Federation of Teachers targeted her response at Jews:
“American Jews are now part of the ownership class. Jews were immigrants from somewhere else… Both economic opportunity through the labor movement and an educational opportunity through public education were key for Jews to go from the working class to the ownership class.
“What I hear when I hear that question is that those who are in the ownership class now want to take that ladder of opportunity away from those who do not have it.”
So somehow Jews criticizing teachers for NOT wanting to teach, is a form of pulling the ladder away from vulnerable kids who need an educations? Okay…
But apparently Jews are now the oppressors, and therefore not entitled to have an opinion on the matter.
Almost reminds me of a certain European country in the 1930s…
Click here to read the interview transcript.
Race-based healthcare in Vermont
As Vermont opens up vaccine eligibility to more groups, some categories make sense.
For example younger people with health conditions and older people more susceptible to serious Covid-19 cases are eligible to receive the vaccine.
But another group has nothing to do with Covid risk. Vermont has now opened up vaccinations to ethnic minorities.
“If you or anyone in your household identifies as Black, Indigenous, or a person of color (BIPOC), including anyone with Abenaki or other First Nations heritage, all household members who are 16 years or older can sign up to get a vaccine.”
Health Vermont does not explain why there is a racially segregated line for the Covid vaccine— apparently it’s just the woke thing to do these days.
Click here to read the guidelines.
Spirit Airlines kicks off two toddlers in the past month
Serious criminals in 2021: parents who can’t keep masks on their toddlers.
Spirit airlines has opted to involve police to kick families off flights TWICE in the past month.
In the latest incident, a two year old refused to wear a mask, so the airline crew informed the family they would have to exit the flight. When the family refused, the crew deplaned the entire plane, and contacted the police.
Last month, it was an autistic four year old who refused to wear his mask, also causing his family to be kicked off a Spirit Airlines flight.
It’s hard to understand how this can be good for the business model. Must be another case of Covid derangement syndrome.
Click here to read the full story.
Pete Buttigieg caught faking bike ride to work for photo op
Transportation Secretary Pete Buttigieg cares so much about the environment that he decided to ride a bicycle to work… at least the last two blocks.
He was caught unloading a bicycle from a black SUV a short distance from the White House so he could finish his ride to the cabinet meeting on bike. Such a great photo opportunity.
Security followed in the SUV.
Click here to read the full story.
Churches visited by police for Easter services
There are two notable videos circulating of police attempting to break up holiday masses over the past couple of weeks.
One occurred in Canada, and shows the pastor of the church loudly refusing entry to the health inspector who is accompanied by half a dozen police officers.
The pastor shouts over the official “I don’t care what you have to say! Out!”
He tells them that if they come back they should have a warrant.
As the health officials and police leave, he refers to them as “Nazis” and “Gestapo”, saying it is shameful that these “psychopaths” think they have the authority to break up religious services over Covid-19 rules.
The local authorities issued a statement which said their inspector was not allowed to enter the church and was unable to confirm whether the gathering violating public health orders.
That’s basically admitting it was a fishing expedition with no probable cause in the first place.
The second video comes from the UK, where police take the pulpit on Easter Sunday to inform the masked congregation that the gathering is illegal, and they must disperse or face fines.
The churchgoers quietly comply.
See the video from Canada here, and the video from the UK here.
* * *
On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.
Tyler Durden
Sat, 04/10/2021 – 19:00 - Law Firms And Banks Are Showering Employees With Gifts To Try And Avoid A "Retention Crisis"
Law Firms And Banks Are Showering Employees With Gifts To Try And Avoid A “Retention Crisis”
While the junior bankers at Goldman Sachs who spoke out about long hours worked during the SPAC boom may not be in favor in the C-suite at the bank, they have started a trend that is going to make them legendary amongst their fellow junior bankers in the industry.
Just weeks later, the world’s top professional service firms and banks are showering their employees with luxury gifts and bonuses to try and prevent them from moving on to other opportunities in what is becoming a fierce section of the job market for those qualified.
Law firms are getting in on the action, too. Financial Times reported this week that Davis Polk & Wardwell and Simpson Thacher & Bartlett, two elite law firms, have given one time bonuses between $12,000 and $64,000 to their employees for their “hard work during the pandemic”. This is on top of a Covid bonus employees were already given.
Latham & Watkins and Goodwin Procter have also followed suit. Goodwin’s employees will be paid in two tranches, one in July and another in October.
Nathan Peart, managing director of associate recruiting at Major, Lindsey & Africa, said: “It’s no secret that associates have been working huge numbers of hours and are approaching burnout. Firms are taking action and money is a starting point.”
Investment bank Jefferies has given its employees a choice of a Peloton, a Mirror or various Apple products. David Polk offered its employees wine packages, gift cards and shopping sprees. Credit Suisse – who has larger, Archegos-sized problems on its hands right now – said it would pay its junior staff $20,000 in bonuses. Our advice to those junior bankers, given the $5 billion Credit Suisse might be facing in Archegos losses? Make sure those checks clear immediately..
Some lawyers in the U.K. are offering “golden handcuff” deals – similar to retention bonuses – designed to prevent employees from leaving. One lawyer told FT: “While having to repay it would be painful, I’m not sure it’s enough to actually serve its purpose — especially where the salary difference or potential sign-on bonus elsewhere would potentially make up for it.”
A U.S. based headhunter concluded: “Associates can’t easily be easily replaced. If an associate billing 2,500 hours a year leaves, you have to spread those hours over other people. If two leave it starts to become a problem.”
Tyler Durden
Sat, 04/10/2021 – 18:30 - How Long Can This Printing-Press-Money-Induced, Lopsided Trade Insanity Last?
How Long Can This Printing-Press-Money-Induced, Lopsided Trade Insanity Last?
Authored by MN Gordon via EconomicPrism.com,
Have you recently bought furniture, auto parts, clothes, electronics, plastic wares, doofers, doodads, or other doohickeys? Chances are, they were made overseas.
The U.S. monthly trade deficit in February scored a new record.
According to the Commerce Department, the U.S. imported $71.1 billion more goods and services than it exported. Of this, $30.3 billion was from China alone.
What’s more, the month of February only had 28 days. At a daily gap of $2.54 billion, had it been a full 31-day month, the monthly trade deficit would have been over $78 billion. What to make of it…
A trade deficit is not inherently bad. Remember, countries as a whole do not trade with each other. Individuals and businesses trade with other individuals and businesses between countries. Presumably they do so because it’s advantageous for both sides.
Sound money, of limited supply and market determined interest rates, would provide natural limits to how wide a trade deficit could expand. But we don’t live in a world of sound money and market determined interest rates. We live in a world of fake money where interest rates are set by central planners.
The gargantuan trade deficit is a byproduct of the insanity of central economic planning. Let’s follow the fake money and see where it leads…
The Federal Reserve creates credit from thin air and loans it to the U.S. Treasury in the form of Treasury bond purchases. At the same time, commercial banks extend credit via fractional reserve banking. The Federal Reserve encourages the over issuance of credit by artificially suppressing interest rates for extended time periods – often a decade or more.
This continuous flood of credit – the flip-side of debt – finds its way into stocks, real estate, and foreign made imported goods. Some of it even finds its way into the absurdity of 75-inch flat screen televisions with sound bars.
Surplus trading partners, like China and Japan, then recycle the dollars back into U.S. Treasuries, thus, perpetuating greater debt creation – and an ever expanding trade deficit. Many countries also engage in competitive currency devaluations – made possible by fake money – to garner a trade advantage.
The trade deficit, you see, is a function of fake money and expansive fiscal and monetary policies. Without fake money, the trade deficit never could have blown out to today’s extreme, $71.1 billion monthly imbalance.
“Waikiki of Southern California”
Nowhere is the insanity of central economic planning so visibly stark raving mad as at the Port of Los Angeles / Port of Long Beach (POLA / POLB) shipping complex. The combined ports account for over one third of all U.S. imports. We know the area well. We pass through it every day.
As context, the Southern California coast, from Orange County and into south Los Angeles County, extends up from the south and wraps to the west. So, when standing on the shore in Long Beach and peering out at the Pacific Ocean you’re not looking west…you’re looking south.
The immediate body of water, which is naturally protected from the west by the blunted Palos Verdes Peninsula, is San Pedro Bay. The bay is generally bookended by the San Gabriel River mouth on the east and the east facing extent of the peninsula on the west. At about its midpoint is the terminus of the Los Angeles River.
San Pedro Bay is not entirely land protected like San Francisco Bay or San Diego Bay. Its south facing orientation is naturally exposed to summertime south swells, which are generated by storms in the South Pacific near New Zealand and from tropical storms off the coast of Mexico.
Long Beach was known as the “Waikiki of Southern California” in the early 20th century because it had waves ideal for surfing. This is hearsay for most residents. No one has ridden a wave in Long Beach for over 70 years.
A massive 8.5 mile breakwater was constructed between 1899 and the 1940s, to seal off San Pedro Bay from the south. This colossal breakwater structure supported the buildout of the massive POLA / POLB shipping complex. Still, despite being mega in all ways, it’s not mega enough for fake money…
The colossal fiscal and monetary stimulus experiment that’s been executed by Washington and the Fed under the pretext of COVID-19 relief has stimulated the U.S. trade deficit with China.
Definitive Absurdity
Starting last fall, container ships began log jamming the berths at the POLA / POLB and anchoring in San Pedro Bay.
In February, nearly 40 ships were at anchor and unable to dock. This number has somewhat abated. But it still remains around 30. Moreover, with unremitting money printing now the overt policy of America’s central planners, this madness should continue through the year – possibly longer.
Attempts to accommodate the ever escalating volume of trade have been unsuccessful. Just five years ago the majority of ships had a capacity of under 10,000 twenty-foot equivalent units (TEUs). Presently, many of the ships at anchor have a capacity of 14,000 to 15,000 TEUs. Some are even larger.
In September, after seven years of construction at a cost of $1.5 billion, the Gerald Desmond Bridge replacement was commissioned. The prior bridge was too low to accommodate larger ships entering the Inner Harbor.
The new bridge structure, which has the highest vertical clearance of any cable-stayed bridge in the U.S., is a remarkable engineering achievement. The two towers rise up to roughly 515 feet above mean sea level, and include 40 cables per tower. The bridge’s linear extent is approximately 8,800 feet. The cable-stayed span alone is 2,000 feet.
Construction included 18 million pounds of structural steel, 75 million pounds of rebar, and 300,000 cubic yards of concrete. In addition to this massive bridge, berths have been widened, and channels have been deepened to accommodate the definitive absurdity of money printing and perpetual credit creation: The CMA CGM Benjamin Franklin.
This mega 18,000 TEUs container ship, if you’re unfamiliar with it, is over 20 stories tall, the width of a 12 lane freeway, and longer than four football fields. It has enough cargo space to hold 90 million pairs of ‘Made In China’ shoes.
Journey To The End Of San Pedro Bay
Driving west from Downtown Long Beach, up and over the Gerald Desmond Bridge replacement, you are consumed by the massive – roughly 5-square mile – sea of piled up shipping containers. They arrive full of imports, are unloaded and dispersed via rail and trucks, and then returned so they can be shipped back to China…largely empty.
Continuing west, at about the mid-point of Terminal Island, you cross from the Port of Long Beach to the Port of Los Angeles. Then up and over the Main Channel via the Vincent Thomas Bridge – another impressive suspension bridge – and into the San Pedro district of Los Angeles.
To best observe the madness and folly of insane central economic planning, follow the east facing extent of the peninsula south and upward to Angel’s Gate Park. There, high upon the bluffs at the southeastern tip of the Palos Verdes Peninsula, you’ve arrived at the end of San Pedro Bay.
At the center of Angel’s Gate Park, just south of the youth hostel, sits the Korean Bell of Friendship. The massive bronze bell is positioned over a stone pavilion. The imposing pyramidal roof structure, supported by twelve columns, is etched with ornate Korean zodiac animals and vibrant color patterns.
Immediately, beneath the ground where the bell sits are the old abandoned World War I bunkers of Fort MacArthur, named after Lieutenant General Arthur MacArthur – father of World War II General Douglas MacArthur. Several remnants of massive gun battery emplacements are located immediately adjacent. This site falls within the area of The Great Los Angeles Air Raid of 1942, where Los Angeles fell under – real or imagined? – attack from a squadron of Japanese bombers.
Winds gusts off the Pacific Ocean from three directions, explode up the face of the sea cliffs, and wildly swirl about the park’s crest. Sweeping views of the mega POLA / POLB shipping complex fill the eastern scenic scape. Catalina Island rises from the waters like a mountain berg to the south.
Peering over the bluff from Point Fermin Park, down to Cabrillo Beach, you can look directly east, downline of the breakwater. A hodgepodge of marooned container ships dot the water. The massive ports complex lacerates the eye to the north and east.
Behind that is the humble Long Beach skyline and the Convention Center, which, at this precise moment, is being rapidly transformed from a COVID-19 vaccination center to housing for upward of 1,000 migrant children. On a clear day, the overconfident Los Angeles skyline, framed by the San Gabriel Mountains can be seen in the distance.
How long can this printing press money induced, lopsided trade insanity last?
When the dollar collapse arrives, and trade recedes, the mega ports complex will quickly slip into disrepair and decay – perhaps, indefinitely.
The ancient Egyptians left the Pyramids and the Great Sphinx of Giza. The pre-Columbian civilizations of the new world had their pyramids too. Nearly, 1,000 monumental statutes were left by early inhabitants of Easter Island. The Coliseum, Hadrian’s Wall, Timgad, Colosseum of Pula, Aqua Marcia, numerous arches, basilicas, and baths…the skeletons left by the Romans are immense.
Surely, the ruins of madness at POLA / POLB will provide a lasting monument to the folly of printing press money and insane central planning for future generations to scratch their heads over.
Tyler Durden
Sat, 04/10/2021 – 18:00 - Seattle Elementary School Won't Let City Remove Giant Homeless Encampment As Students Return To Class
Seattle Elementary School Won’t Let City Remove Giant Homeless Encampment As Students Return To Class
Students at one Seattle elementary school are getting an unexpected lesson in sharing, as district officials are refusing assistance from the city to remove a homeless encampment on school grounds until all of the vagrants are placed in shelters, according to KOMO.
Students returned to campus for in-person classes earlier this month.
The decision to let the homeless remain – over a quarter of whom have severe mental illness or substance abuse issues – has rattled some parents, who have asked the district to reconsider.
“I am calling on the school board to allow Jenny Durkan to take of these encampment as she has in the past, offer services and then guide campers out of the park,” said one parent, Ryle Goodrich.
According to Mayor Jenny Durkan, however, the city needs permission from the district to do so.
“Seattle Public Schools is a separate governmental entity and it controls its own properties,” Durkan told KOMO. “The City of Seattle does not and cannot go onto school grounds and start dealing with encampments.”
Durkan noted that the city has years of experience moving homeless people into housing, while the school district does not.
“They made it very clear that they did not want to relocate those encampments unless they can place those people into shelter,” she said, adding “We’ve been trying to give them our experience how best to accomplish that.”
The camp of near 40 tents sits between Bitter Lake and a fence surrounding the school grounds. While it would be hard for students on the playground to have direct contact with the tents, the camp sits on school district property.
When asked if the district has “asked” the City for help and allow HOPE team outreach staff onto school property, a district spokesman was non-committal.
“It is a somewhat fluid situation and we appreciate the city’s partnership and flexibility as we proceed,” said Tim Robinson, Seattle Public Schools’ spokesperson. -KOMO
According to the Mayor’s spokesman, the city has not officially been asked for help by the district.
Tyler Durden
Sat, 04/10/2021 – 17:30 - Multiple New York Times Staff Previously Worked For CCP-Controlled Media: Report
Multiple New York Times Staff Previously Worked For CCP-Controlled Media: Report
Authored by Isabel van Brugen via The Epoch Times,
Several current New York Times staffers were previously employed by the Chinese Communist Party (CCP)-controlled English-language newspaper China Daily, which has in recent years paid U.S. media millions of dollars to publish its state-approved content.
Current employees at the New York Times who formerly worked for the Chinese state-run media outlet include; Jonah Kessel, Director of Cinematography at the Times; Diarmuid McDermott, a current Staff Editor and Designer at the outlet; and Europe culture reporter Alex Marshall, the National Pulse found.
In now-deleted Twitter posts, Kessel, who took on the role of China Daily’s Creative Director from July 2009 to November 2010, wrote that working for the CCP sometimes has its “benefits.” He also mentioned that he was “psyched” for starting the role, which included “redesigning” the propaganda arm of the CCP.
He had disclosed in several posts that he was “working for” and “getting paid” by Chinese state media.
“You know you work for the PRC [The People’s Republic of China] when the first word that comes to your mind when asked to describe your work place is ‘harmonious’ #china,” Kessel wrote in a Twitter post in November 2009.
According to McDermott’s LinkedIn profile and personal website, he worked as editor and designer for China Daily in a Hong Kong-based role for eight years—from November 2012 to November last year. He assumed the same role at the NY Times last year, and is still based in Hong Kong.
He revamped China Daily’s “Asia Weekly” publication, which, according to his profile, involved “Copy editing; Rewriting raw copy; Designing layout and graphics; Sourcing news stories and pictures; Developing and maintaining a web presence across multiple platforms; Outputting pages for printers across the region.”
Marshall was reportedly employed by China Daily as an editor between 2003 and 2004.
The Epoch Times has reached out to the NY Times for comment.
For years, the NY Times has sought expanded access to the Chinese market and accepted millions in advertising revenue from Chinese state-owned media entities.
Records from the U.S. Department of Justice last year show that China Daily paid nearly 19 million dollars to U.S. media companies for advertising and printing expenses over the past four years.
Paid supplements with a pro-Beijing agenda produced by the outlet were published in newspapers such as The Washington Post and The Wall Street Journal.
The CCP-controlled outlet also paid the NY Times $50,000 for advertising, the Justice Department records show.
Tyler Durden
Sat, 04/10/2021 – 17:00 - US Farmers Celebrate As Corn Exports Near Records
US Farmers Celebrate As Corn Exports Near Records
Reuters reports US corn exports “have blown past nearly every benchmark” as China, the world’s largest food and ag importer, appears to be ramping up purchases of US farm goods. What’s mildly funny is how China has begun to purchase large amounts of farm goods from the US under the Biden administration.
According to official US export data Wednesday, February’s corn exports recorded 6.3 million tons. The amount topped “2008’s record for the month by 17% and is the largest monthly volume since July 2018,” said Reuters.
A few months back, December’s corn exports exploded to 13-year highs. The first-quarter outlook already suggests record volumes.
Reuters’ projections indicate weekly export data for March could reach an all-time high, possibly topping north of 9 million tons. The largest-ever export volume for a given month was 7.75 tons in May 2018.
Source: Reuters’ Karen Braun China has primarily driven strong US corn exports. By Mar. 25, Beijing booked around 23.2 million tons of US corn for the 2020/21 year. The previous high for US corn exports to China was 5.15 million in 2011/12.
In January, we first noted that China customs data showed that grain imports soared to record highs in 2020 after tight domestic corn supplies pushed prices to multi-year peaks, driving demand for cheaper imports.
The USDA forecasted 2020/2021 corn exports at a record 66 million tons, and there’s a chance in the upcoming growing season, the number could be much higher due to China’s increasing demand.
This is happening as corn prices have nearly doubled since August.
… prompting a very worried Albert Edwards to warn about rapid food inflation could result in socio-disturbances unless food prices stabilize and revert to much lower levels (see “Why Albert Edwards Is Starting To Panic About Soaring Food Prices.”) The first places where unrest could happen due to higher food prices are in emerging market countries.
In the meantime, soaring corn exports and prices are a blessing for US farmers who have had their farm incomes collapse in recent years.
Tyler Durden
Sat, 04/10/2021 – 16:35 - Is A Cultural Revolution Brewing In America?
Is A Cultural Revolution Brewing In America?
Authored by Charles Hugh Smith via OfTwoMinds blog,
The lesson of China’s Cultural Revolution in my view is that once the lid blows off, everything that was linear (predictable) goes non-linear (unpredictable).
There is a whiff of unease in the air as beneath the cheery veneer of free money for almost everyone, inequality and polarization are rapidly consuming what’s left of common ground in America.
Though there are many systemic differences between China and the U.S., humans in every nation are all still running Wetware 1.0 and so it is instructive to consider what can be learned from China’s Cultural Revolution 1966-1976.
China’s Cultural Revolution was remarkably different from the Party’s military-political victory of 1949. Where the political revolution was managed by the centralized hierarchy of the Communist Party (CCP), the Cultural Revolution quickly morphed from a movement launched by Mao into a decentralized mass movement against all elites, including Party and state elites which had been sacrosanct and untouchable.
The Cultural Revolution is not an approved topic in China today, and that alerts us to its importance.
Although ostensibly launched by Mao (as part of his 1966 purge of Party rivals), the Cultural Revolution very quickly devolved into a decentralized, semi-chaotic movement of Red Guards, students and other groups who shared ideas and programs but who acted quite independent of the Party’s central leadership. (In systems language, semi-chaotic dynamics are emergent properties.)
If you examine Mao’s statements that supposedly launched The Cultural Revolution, you’ll find they’re not much different from his many pronouncements in the 1950s and early 1960s, none of which sparked a violent national upheaval. The Cultural Revolution cannot be traced back to Mao’s control or plans; rather, Mao served as the politically untouchable inspiration for whatever measures the local cadres deemed necessary in terms of advancing (or cleansing) the people’s revolution.
The important point here is that the Cultural Revolution was not controlled by the political authorities, even as they maintained control of the Party and central government hierarchy in Beijing. But this was nothing more than an illusion of control: the forces of the Cultural Revolution had broken free of central command and control, even as the Red Guards expressed their loyalty to Mao and the principles of the Party as the politically approved cover for their rampage.
That’s the irony of Cultural Revolutions: the authorities cannot claim it is a political counter-revolution because the cultural revolutionaries proclaim their loyalty to the ideals and principles the authorities claim to be upholding.
Cultural Revolutions in effect claim the higher ground, eschewing political influence for direct action in the name of furthering the ideals which the authorities have abandoned or betrayed.
Given the fragmentary nature of The Cultural Revolution, the history is equally fragmentary– especially given the official reticence.
A recent academic book, Agents of Disorder: Inside China’s Cultural Revolution, provides granular detail on the fragmented, decentralized, rapidly evolving dynamics of the movement:
“(The author) devoted decades to examining the local records of nearly all of China’s 2,000-plus county-level jurisdictions. He found that factions emerged from the splintering, rather than the congealing, of class-based groups. Small clusters of students, workers, and cadres struggling to respond to Mao’s shifting directives made split-second decisions about whom to align with. Political identities did not shape the conflict; they emerged from it. To explain this process of identity formation, he offers a theory of ‘factions as emergent properties’ and suggests that similar dynamics may characterize social movements everywhere.”
In other words, groups modified their alliances, identities and definitions of “class enemies” on the fly, entirely free of central authorities. Factions splintered, regrouped and splintered again. In the chaos, no one was safe.
Those who lived through The Cultural Revolution are reticent about revealing their experiences. Even in the privacy of their homes in the U.S., their voices become hushed and their reluctance to give voice to their experiences is evident.
The unifying thread in my view is the accused belonged to some “counter-revolutionary” elite –or they were living vestiges of a pre-revolutionary elite (children of the landlord class, professors, etc.)–and it was now open season on all elites, presumed or real.
What generates such spontaneous, self-organizing violence on a national scale? My conclusion is that cultural revolutions result from the suppression of legitimate political expression and the failure of the regime to meet its lofty idealistic goals.
Cultural revolutions are an expression of disappointment and frustration with corruption and the lack of progress in improving everyday life, frustrations that have no outlet in a regime of self-serving elites who view dissent as treason and/or blasphemy.
By 1966, China’s progress since 1949 had been at best uneven, and at worst catastrophic: the Great Leap Forward caused the deaths of millions due to malnutrition and starvation, and other centrally planned programs were equally disastrous for the masses.
Given the quick demise of the Let a Hundred Flowers Bloom movement of open expression, young people realized there was no avenue for dissent within the Party, and no way to express their frustration with the Party’s failure to fulfil its idealistic goals and promises.
When there is no relief valve in the pressure cooker, it’s eventually released in a Cultural Revolution that unleashes all the bottled-up frustrations on elites which are deemed politically vulnerable. These frustrations have no outlet politically because they’re threatening to the status quo.
All these repressed emotions will find some release and expression, and whatever avenues are blocked by authorities will channel the frustrations into whatever is still open.
A Cultural Revolution takes the diversity of individuals and identities and reduces them into an abstraction which gives the masses permission to criticize the abstract class that “deserves” whatever rough justice is being delivered by the Cultural Revolution.
As the book review excerpt noted, the definition of who deserves long overdue justice shifts with the emergent winds, and so those at the head of the Revolution might find themselves identified as an illegitimate elite that must be unseated.
I submit that these conditions exist in the U.S.: the systemic failure of the status quo to deliver on idealized promises and the repression of dissent outside “approved” (i.e. unthreatening to the status quo) boundaries.
What elite can be criticized without drawing the full repressive powers of the central state? What elite will it be politically acceptable to criticize? I submit that “the wealthy” are just such an abstract elite.
To protect itself, a repressive status quo implicitly signals that the masses can release their ire on an abstract elite with indistinct boundaries–a process that will divert the public anger, leaving the Powers That Be still in charge.
But just as in China’s Cultural Revolution, central authorities will quickly lose control of conditions on the ground. They will maintain the illusion of control even as events spiral ever farther from their control. The falcon will no longer hear the falconer.
In other words, once the social pressure cooker valve gives way, then the unleashed forces soon grasp that there are few limits on what they can criticize as long as they do so within an implicitly approved narrative–for example, “the wealthy” hoarded wealth and power and so it is just to claw it back by whatever means are available. Since the government failed to do so, the people will have to do so.
The extreme inequalities of wealth and power that are now the dominant dynamic in America are heating the cultural pressure cooker, and when the pressure can no longer be contained, then being recognized as wealthy will shift very quickly from something desirable to something to avoid at all costs.
The lesson of China’s Cultural Revolution in my view is that once the lid blows off, everything that was linear (predictable) goes non-linear (unpredictable, fragmented, contingent, emergent, prone to extremes, uncontrollable). If America experiences a Cultural Revolution, the outcome won’t lend itself to tidiness or predictability.
To use an analogy from previous blog posts, if the pendulum is pushed to an extreme, when it’s released, it will reach an equivalent extreme (minus a bit of friction) at the opposite end. That could be an unexpected but entirely foreseeable Cultural Revolution.
Those who claim that can’t happen in America are safely outside the pressure cooker, protected by a delusional confidence that since I’m doing great, everyone is doing great. Since real political agency is no longer allowed, then the pressure will find release outside the political system. It’s just Wetware 1.0 running defaults few recognize.
Of related interest:
The West’s Descent into ‘Cultural Revolution’ 1/18/19
Can’t Get You Out of My Head (2021) – Part 1 of 6– Adam Curtis documentary series which includes extensive footage and commentary on China’s Cultural Revolution.
Resistance, Revolution, Liberation: A Model for Positive Change (book)
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (book)
Inequality and the Collapse of Privilege (book)
* * *
If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Tyler Durden
Sat, 04/10/2021 – 16:10 - Why Is The Bitcoin Curve So Steep… And Could A Bitcoin ETF Be The Worst Possible Thing For Crypto
Why Is The Bitcoin Curve So Steep… And Could A Bitcoin ETF Be The Worst Possible Thing For Crypto
Having repeatedly tried (and failed) to “bash” bitcoin in what we said was a glaring attempt to force clients to offload exposure to JPM’s own prop traders, one which almost worked judging by bitcoin’s all time high price today (or else, is a testament to how terrible JPM’s research desk is)…
JPMorgan’s daily bitcoin hitpiece is out. Just how bad does JPM prop want to be long this?
— zerohedge (@zerohedge) January 25, 2021
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… JPMorgan’s analysts are pivoting away from making blanket (and consistently wrong) value determinations especially and hilariously when it comes to defining bitcoin’s “intrinsic value” like when in its initiating coverage report from Feb 2014, the bank said that “bitcoin looks like an innovation worth limiting exposure to”, and anyone who listened has lost out on the single best investment opportunity of the millennium…
… starting to analyze bitcoin as an established asset class – one interest in derivatives and other sources of leverage is exploding – and finding that not only is Wall Street ignoring all of JPM’s periodic hit pieces on bitcoin, but just can’t get enough of the cryptocurrency to the point that the futures curve has gotten extremely steep as an indication of mounting institutional demand.
The good news is that in finally shifting away from nearly a decade of attempting to convince clients not to invest in bitcoin, JPM is actually starting to provide some value, like for example a report published by JPM’s rates strategist Joshua Younger, who traditionally focuses on such arcane topics as repo market plumbing and negative overnight rates, and who overnight published an article asking a critical question with profound consequences, namely “why is the bitcoin futures curve so steep?“
Younger notes that as has been the case in the past, the growth and maturation of cryptocurrency markets has generated interest in derivatives and other sources of leverage and though futures trade against a range of pairs, “Bitcoin unsurprisingly dominates this nascent marketplace.” Similarly to the spot market, Younger notes that these products trade within a highly fragmented ecosystem, with nearly 30 active venues. The vast majority is traded offshore as well, with less than 15% of the total open interest listed on major, regulated domestic venues like the CME (Exhibit 1 below), with JPM noting that normalized depth in futures has also kept pace with the deepening of the cash market, suggesting it too is benefiting from institutional inflows and improved liquidity provision in spot (Exhibit 2).
In total, futures represent a rather modest and consistent 2-3% of Bitcoin’s total capitalization. While this may not seem like a large fraction, there is reason to believe that price discovery in Bitcoin – where a handful of whales own the bulk of the float and rarely if ever make any market moves – is driven by high turnover in a relatively small fraction of the total stock. For example, recent analysis of the public blockchain suggests that less than 10% of tokens qualify as highly liquid while roughly half have not changed hands in more than a year.
Further, turnover in derivatives is often higher than the spot market, particularly in the offshore exchanges that dominate activity, which suggests they are overrepresented in price discovery and risk transfer. That makes a clear sense of what positioning and pricing in derivatives is telling us about the underlying balance of flows key to understanding the market as a whole, and also suggests that derivatives have far more signal to institutional participation than the Grayscale bitcoin Trust which many, inexplicably, continue to believe best represents institutional flows.
Still, as Younger notes, even a cursory look at positioning raises a puzzle, however. Though not the largest venue by any measure, Bitcoin futures listed at the CME have the benefit of public disclosure in the CFTC Commitment of Traders Report. Those data suggest that leveraged funds have increased their net short exposure to BTC futures over the past few months, with longs from smaller funds and retail investors who do not meet the reporting threshold and, more recently, institutional investors who do not fit neatly into the other major categories taking the other side.
Similar to the Gamestop squeeze, this brings up a pertinent question: how could investors who are presumably very sensitive to short-term P/L fluctuations not just maintain but grow wrong-way exposure in the face of an explosive rally in spot prices?
Here, Younger makes a critical point which many superficial analysts often ignore: as with many asset classes, the downside to these data are they only show one leg of the trade (the futures) and do not account for potential offsetting exposures in cash. Basis positions, which seek to earn carry by shorting the contract against longs in spot or equivalents (e.g., closed-end funds or ETFs) are not reflected. As the JPM strategist note, these trades are functionally offering leverage to the market by lending out cash holdings via derivatives, in most cases hoping to monetize the richness of futures which implies high funding costs.
Such basis trades are particularly attractive in the cryptocurrency market: consider that as of this moment, the June CME Bitcoin contract offers ~25% annualized slide relative to spot! The richness of futures is even more acute if we broaden our view to include unrelated exchanges, where carry can be as high as 40+% (see chart above). To put this in context, very few fiat currencies, including both developed and emerging markets, offer easily monetizeable local yields (e.g., from FX swaps) in excess of 5%.
There is of course the special case of TRY, but as JPM admits “with local consumer price inflation around 10% or higher, as compared to the explicitly deflationary monetary policy and cross-border transferability of Bitcoin, this hardly seems a plausible substitute.” Yes, to JPM bitcoin is now a more viable currency than the Turkish Lira. But we digress…
The above brings up another key topic: how and why has such attractive pricing not simply been arbitraged away?
As JPM suggests, one could perhaps blame counterparty and repatriation risk in unrelated offshore markets, but certainly not the CME. As the bank further points out, “in a market with rampant bullish sentiment and heavy retail involvement it is tempting to simply blame demand for leverage” (demand which would not have been there had the broader investing public listened to JPM in recent months when the bank unleashed one hit piece after another seeking to slam the cryptocurrency) And that is certainly true to some extent. However, as Younger points out, there are also some more idiosyncratic but equally important aspects of how these contracts are designed in the context of market segmentation that are specific to Bitcoin and likely explain a substantial fraction of this richness.
The first is that CME futures are cash settled to their Bitcoin Reference Rate (BRR) Index. This is not a single observation of spot trading levels, but rather a 1-hour VWAP across a range of major exchanges as of 4pm LST. That may seem trivial, but the extreme volatility of Bitcoin relative to more traditional assets is worth bearing in mind here. Over the past month, for example, 60-minute volatility has not just been high (~0.6% based on volume-weighted prices) but also varied considerably over the course of the trading day (a high of ~0.9% around New York morning versus a low of ~0.3% during the Asian afternoon). Over a longer horizon, using just Coinbase prices, the monthly tracking error of BRR versus 4pm LST mids has at times been 2% or higher over the past year. Backtesting the performance of basis trades against spot levels as of the same time results in an annualized tracking error of more than 10% over the past year
This raises a potentially more important issue presented by market segmentation. As JPMorgan confirms what we said three months ago, “not only is it rather difficult to replicate the settlement index in spot markets, but many institutional investors do not have access to Bitcoin , owing to concerns around custody, ambiguities around taxation and accounting, reputational risk and the origin of some tokens, and other potential issues.” This is hilarious because back in December, when looking at the most recent Fund Manager survey, we said that Wall Street professionals were convinced that Bitcoin is becoming the most crowded trade on Wall Street, which as we said was impossible for the simple reason that most of these same “professionals” were not even involved in bitcoin. And now JPMorgan admits as much.
Wall Street professionals, most of whom can’t trade bitcoin in their work accounts, are convinced that “long bitcoin” is the third most crowded trade. Shows just how meaningless these surveys are pic.twitter.com/4dPk3y1iUn
— zerohedge (@zerohedge) December 15, 2020
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Rather, according to the JPM strategist, a significant fraction of inflows to the space have been channeled through closed-end funds like GBTC. A number of factors have led to significant volatility in the price of these shares relative to NAV, introduce a new and often more important source of hedge inefficiency relative to final settlement prices to the futures contract. The problem has been particularly acute this year—were one to have been long GBTC versus the front Bitcoin contract over the past year, the annualized tracking error relative to ex-ante slide was more than 50% Under those circumstances, one should expect significant risk premium priced into the futures.
This raises what JPM correctly notes is an important question: what could drive a curve normalization?
One likely critical catalyst would be the listing of a Bitcoin ETF tracking spot exchange rates in the U.S. or other major jurisdiction: not only would create/redeem for physical features result in much lower tracking error than closed-end funds, but it would also presumably be easier for prime brokers to take those securities as collateral. Access to leverage on the cash side will be key. At the moment listed basis trades require ~40% initial margin against the futures position in addition to ongoing variation margin and fully funding the opposing long GBTC positions, making return on cash noticeably less attractive than headline slide. One could of course turn to one of the increasing number of crypto-native lenders, but that likely represents an even higher hurdle than accessing the spot Bitcoin market directly.
This – to JPMorgan – makes launching a Bitcoin ETF in the US key to normalizing the pricing of Bitcoin futures. Such a move could reduce many barriers to entry, bringing much more new potential demand into the asset class. and pushing the price of cryptos even higher. That said, a risk factor worth considering, however, is that it would also make basis trading much more efficient and attractive at current pricing, particularly if those ETFs can be purchased on margin.
Such a development would bring more basis demand into futures markets, especially the CME but also potentially other onshore exchanges, according to JPM. To the extent that contango normalizes for those contracts, we would expect some pass-through to pricing on unrelated exchanges as well, since presumably there is some arbitrage activity between the two. Normalizing these implied funding spreads with more two-way flow is a prerequisite for broadening the base of participants in Bitcoin derivatives more generally, since it takes quite a bullish outlook to be willing to pay 30-40% annually to source levered long exposure.
Another critical question is how closely tied these basis trades are to the nascent DeFi industry, particularly cryptolending. The value of tokens locked in these platforms has exploded along with other aspects of the market, increasing from less than $1bn only a year ago to more than $25bn as of this writing, which coincides with comparable growth in the futures market.
Many of these products offer double-digit returns to borrow Bitcoin—expensive liabilities which must be offset by even higher-yielding assets. Though details are naturally hard to come by, because they are crypto-native, these platforms are ideally situated to onward lend those tokens via the unregulated derivatives market, making a healthy spread in the process. To the extent this is the case, if a listed ETF in the U.S. leads to compression in the CME-listed Bitcoin cash/futures basis which ultimately spreads offshore, they would naturally lower their own offering rates. JPM makes another good point that under these circumstances, it is unclear how the nascent DeFi industry would react to the resulting decline in crypto-based yields. Though far from a perfect analogy, the Chinese experience in alternative payments suggests that the economics of participation tend to be a more reliable driver of inflows than network externalities or other more intangible considerations.
The conclusion, ironically, is that the crypto industry and its de-fi spinoff space, appears to have now found a perfect niche for itself one where it is flourishing precisely because of the SEC’s refusal to greenlight a bitcoin ETF. If JPM is right, should the SEC reverse itself and allow one or more bitcoin ETFs, while the immediate outcome would be far greater demand, the consequences on the crypto market where curve and yield normalization would promptly follow, could be – paradoxically – quite devastating especially for the DeFi space which has seen exponential growth in the past year.
While the Securities and Exchange Commission has thrown out all applications for Bitcoin ETFs in the US (unlike Canada where three local bitcoin ETFs have been approved), citing a manipulable market, a new administration, SEC chair and renewed institutional interest, means ETF applications are on the rise and the SEC is taking another look at them. Ironically, would an ETF approval be the worst thing possible for bitcoin?
Tyler Durden
Sat, 04/10/2021 – 15:45 - Buchanan: Vaccine Patriotism Versus Vaccine Globalism
Buchanan: Vaccine Patriotism Versus Vaccine Globalism
When the Pfizer and Moderna vaccines first proved their efficacy, preventing nearly 95% of coronavirus infections in those who got the shots in test trials, a vexing issue immediately arose.
Who should get priority in receiving these life-saving shots?
Generally speaking, the answer, while differing slightly from state to state, was that those most vulnerable to the virus, and those most vital to battling it, should be inoculated first.
The most vital were doctors, nurses and emergency medical personnel in hospitals receiving infected patients. The most vulnerable were the elderly in nursing homes with comorbidities and compromised immune systems who would be the least likely to survive an infection.
As the age for early inoculations dropped from 75 to 65, and then 50, and communities began to be vaccinated in greater numbers, a new issue arose: race. Blacks, peoples of color and the poor were not receiving inoculations at the same rate as the white and wealthy.
Efforts were made to rectify any such inequity.
However, almost no voice arose to say the world’s poor should be inoculated at the same time and at the same rate as Americans — with vaccines Americans had invented and produced.
That role has now been filled. In The Washington Post of April 6, Darren Baker, President of the Ford Foundation, writes: “An equitable vaccine rollout must prioritize the most vulnerable around the world.”
“Vast disparities are emerging in vaccine access — both within countries and between them,” says Baker, “especially for Afro-descendant and Indigenous communities.
“Within countries, the gaps are stark. In the United States… White people remained nearly two times more likely to be vaccinated than their neighbors of color at the end of March. In Brazil, Indigenous populations are 10 times more likely to die of covid-19 than the general population… And in India, many members of poor Muslim and Dalit communities are denied access to the limited vaccine supply that is available…
“Rich nations are hoarding the vaccines. Whether it’s the European Union blockading international vaccine exports entirely, or the United States stockpiling 30 million AstraZeneca doses, a wave of vaccine nationalism is depriving the world of much-needed supply.”
What must we Americans do to end the inequity?
Embrace a new policy of vaccine globalism and egalitarianism.
“The United States could… vaccinate the world — mobilizing the resources of the U.S. military and other agencies to manufacture, ship and distribute doses around the world. … To paraphrase the Rev. Martin Luther King, Jr., vaccine inequality anywhere is a threat to global health everywhere.”
Walker reflects what might be called Ford Foundation values. But are these American values?
Is it wrong for the U.S. government to put Americans first in the distribution of life-saving vaccines, ahead of people from any other country?
Is it wrong for the U.S. to ensure that every American who wants a shot gets one, before taking on the task of vaccinating the rest of the world?
Is it wrong for America to put Americans first?
“Vaccine nationalism” seems but a synonym for vaccine patriotism.
If and when we have a surplus sufficiently large to send our vaccines abroad, would it be wrong to prioritize nations that are tried and true friends and allies like Canada and Britain?
When it comes to moral obligation, especially when it involves a matter so serious as human life, ought not one’s own family and friends, community and country come first?
Again, vaccine nationalism mandates putting fellow Americans first in receiving vaccines Americans discovered, tested and produced, even if that contradicts Ford Foundation values?
While all peoples may be equal in their God-given rights to liberty and life, the duty of the U.S. government is to protect and defend first and foremost the rights, and the health and safety of American citizens.
King may have written, “Injustice anywhere is a threat to justice everywhere.” But America is not responsible for “justice everywhere” — a utopian concept — but to establish justice to the degree it can in the USA.
Nor is inequality always a manifestation of injustice.
Easter Sunday is just behind us, the day Christians celebrate the Resurrection of Jesus Christ who taught, “Greater love than this hath no man that he lay down his life for his friend.”
Such individuals are saints, and that is indeed sanctity.
But natural law teaches that, when it comes to love and loyalty, one puts one’s own family and country first.
“Vaccine inequality,” says Walker, is “a crisis to be solved… We must move away from vaccine nationalism to vaccine equity.
“An equitable vaccine rollout must prioritize and protect the most vulnerable in our societies – from the Dalit community in India, to Indigenous populations in Brazil, to essential farm workers and grocery store clerks throughout the United States.”
Sorry, but India’s Dalit community is Narendra Modi’s responsibility.
The indigenous population of Brazil is Jair Bolsonaro’s responsibility.
And the “farm workers and grocery store clerks in the USA” are ours.
Tyler Durden
Sat, 04/10/2021 – 15:20
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