May 11

Today’s News 11th May 2021

  • The 700 Year Old Romanian Castle That Inspired "Dracula" Is Now A Free COVID Vaccination Site
    The 700 Year Old Romanian Castle That Inspired “Dracula” Is Now A Free COVID Vaccination Site

    Dracula has gone from sucking blood to injecting vaccines.

    In what is undoubtedly fertile ground for irony and a glance into the sad reality of the post-Covid world, the more than 700 year old castle that was said to have inspired Bram Stoker’s Dracula is now being used as a Covid vaccination site.

    The landmark is offering free Pfizer vaccines for visitors every weekend in May, according to CBS. 

    Medics on site wear fang stickers and the castle boasts signs that feature Dracula’s fangs replaced with vaccination needles.

    Visitors to the site can show up without an appointment and, after getting vaccinated, will receive “free admission” to the castle’s exhibits of – you guessed it – medieval torture instruments.

    Romania has pledged to vaccinate at least 10 million people by September. The country’s number currently stands at about 5.8 million people, out of a total population of 19.41 million. 

    The country has “one of the highest vaccine hesitancy rates,” the report notes (though with thoughtful stunts like this one, we can’t imagine why people aren’t taking it more seriously). “Nearly half” the country’s population doesn’t want to get vaccinated. 

    Those in charge hope the “Dracula’s castle” approach to medicine not only helps administer more vaccines, but drives up tourism numbers in the process.

    It’s a bold strategy. Let’s see if it works out for them.

    Tyler Durden
    Tue, 05/11/2021 – 02:45

  • The Risks Of A Positive Agenda Between The EU And Turkey
    The Risks Of A Positive Agenda Between The EU And Turkey

    Authored by Doris Christodoulou via GlobalRiskInsights.com,

    In the aftermath of the 25-26 European Council Summit, the EU is clearly divided in its approach to Turkey. While some wish to see a more determined EU which supports its values and protects its Member States, others disagree with sanctions on Turkey and support a more welcoming plan with which to meet the state. However, an approach using exclusively soft power opens up the EU to risks that have the potential to be very costly. 

    During the 25-26 March European Council Summit, one of the main points on the agenda was the situation in the Eastern Mediterranean. More extensively, the Summit focused on EU-Turkey relations. EU leaders recalled ‘the European Union’s strategic interest in a stable and secure environment in the Eastern Mediterranean and in the development of a cooperative and mutually beneficial relationship with Turkey.’ Although some are arguing for more sanctions, many leaders are hoping for an exclusively positive agenda between the EU and Turkey.

    Following the meeting on 25 March, the EU said that, provided Turkey maintains the current de-escalation and conditionalities laid out in previous conclusions of the European Council, the EU is ready to develop a positive agenda  that will facilitate cooperation with Turkey in areas of common interest, including economic cooperation and migration. However, an exclusively positive agenda comes with risks at the cost of the EU.

    Risk #1: The EU Undermines Its Own Legitimacy 

    A critical risk that comes with a positive EU-Turkey agenda is that it may undermine the EU as a legitimate player in the international arena. By adopting a positive agenda with Turkey, the EU runs the risk of appearing paradoxical. 

    The EU has recently imposed further sanctions on Russia over the imprisonment of opposition leader Alexey Navalny, on Belarus over the violent suppression of the opposition, and on Myanmar following the military coup. However, the EU is reluctant to impose sanctions on Turkey which likewise has breached laws and core European values, including democracy, sovereignty, and human rights. In fact, the EU continues to discuss further funding and investment in Turkey in the years to come. 

    This engenders skepticism around the efficacy of the EU’s normative power and puts EU solidarity to the test. Sticking to a soft power approach despite Turkey’s flagrant violations of democracy, human rights and state sovereignty would make the EU look weak, undermining the values it claims to represent. In addition to risking its standing as a legitimate international actor, it is likely that an exclusively positive agenda will make the EU  appear as though it lacks resolve, hence making it harder to maintain its leverage over issues that will arise in the future, such as on the new deal on migration. 

    Risk #2: The Return of Crisis in EU-Turkey Relations

    A positive agreement with Turkey must come with a consistent return to the rule of law. Yet, a closer look at Turkey’s domestic politics and a series of democratic failures in Turkey reveals that a future crisis in EU-Turkey relations is very likely. Whether this comes in the form of a threat to migration flows into the EU, or unauthorized gas explorations that undermine the sovereignty of EU member states, and more extensively the breach of international law if it does not align with Turkey’s interests. 

    It is rather naïve to expect that a state whose President exercises full control over domestic politics and foreign policy – without allowing much room for domestic challenge from other parties – would simply abide by international law. Evident to that is Turkey’s illegal occupation of Cyprus. Although a comprehensive solution to the Cyprus Problem is key to successful EU-Turkey relations, Turkey’s objection to the EU’s participation in the resumption of negotiations with Cyprus clashes with Turkey’s alleged cooperation with the EU. This breach of international law and deterioration of human rights are very likely to continue. A key example of human rights abuses includes crude violations against women. More than eleven million women have faced sexual or domestic violence in Turkey. Significantly, Turkey recently withdrew from the Istanbul Convention, an international treaty for the protection of women. This adds to the systematic failures to protect women’s rights and by extension human rights. The EU would do well to  be cautious of Erdogan’s statements regarding his willingness to cooperate. The risk that comes with the EU’s soft power approach is that it would only be a partial and temporary success in managing Turkey. Future conflicts of interest in the EU-Turkey relations are therefore highly likely.

    Conclusions

    The adoption of a purely positive agenda with Turkey, and the complete disregard of discussion to add sanctions, poses potential threats to the EU’s legitimacy and stability. Firstly, it undermines the EU’s influence as a normative power. It works in favour of the autocratic power in Turkey, which flies in the face of fundamental European values. If the EU were to take this approach to the situation with Turkey, it would run the risk of appearing paradoxical and illegitimate on the international stage. Secondly, by adopting a completely soft approach, the EU runs the risk of gaining a temporary half-victory, i.e., smoothing over relations in the region at the cost of the values it claims to hold so dear. 

    Future clashes with Turkey that harm European interests are very likely to occur, given its current autocratic regime and the deterioration of democratic values and human rights domestically. This hints at the unlikelihood of Turkey’s ability to effectively abide by international law. With this positive agenda, it appears the EU wishes to avoid breaking economic ties or migration flows to the EU. However, even if it succeeds in the short term, another crisis surrounding EU-Turkey relations can be expected in the future. The softer the EU’s response, the more power hungry Turkey may become, feeding a vicious circle – potentially exacerbating tensions in migration flows and geopolitical challenges, or neglecting human rights, just to name a few.

    Tyler Durden
    Tue, 05/11/2021 – 02:00

  • Escobar: An Empire In Love With Its Afghan Cemetery
    Escobar: An Empire In Love With Its Afghan Cemetery

    Authored by Pepe Escobar via The Asia Times,

    The New Great Game 3.0 is just beginning with a hat tip to Tacitus and dancing to the Hindu Kush groove…

    One cannot but feel mildly amused at the theatrical spectacle of the US troop pullout from Afghanistan, its completion day now postponed for maximum PR impact to 9/11, 2021.

    Nearly two decades and a staggering US$2 trillion after this Forever War was launched by a now immensely indebted empire, the debacle can certainly be interpreted as a warped version of Mission Accomplished.

    “They make a desert and call it peace,” said Tacitus – but in all of the vastness of the Pentagon there sits not a single flack who could imagine getting away with baldfacedly spinning the Afghan wasteland as peaceful.

    Even the UN bureaucratic machinery has not been able to properly account for Afghan civilian deaths; at best they settled for 100,000 in only ten years. Add to that toll countless “collateral” deaths provoked by the massive social and economic consequences of the war.

    Training and weaponizing the – largely inefficient – 300,000-plus Afghan Army cost $87 billion. “Economic aid and reconstruction” cost $54 billion: literally invisible hospitals and schools dot the Afghan landscape. A local chapter of the “war on drugs” cost $10 billion – at least with (inverted) tangible results: Afghanistan now generates 80% of the world’s opium.

    All these embarrassing facts disappear under the shadow play of 2,500 “official” departing troops. What really matters is who’s staying: by no means just a few out of some 17,000 “contractors,” over 6,000 of whom are American citizens.

    “Contractor” is a lovely euphemism for a bunch of mercenaries who, perfectly in tune with a shadow privatization drive, will now mingle with Special Forces teams and covert intel ops to conduct a still lethal variation of hybrid war.

    Of course this development won’t replicate those David Bowie-style Golden Years in the immediate post-9/11 era. Ten years ago, following the Obama-Petraeus surge, no fewer than 90,000 contractors were dancing to the Hindu Kush groove, lavishly compensated by the Pentagon and dabbling in everything from construction, transportation and maintenance to “enhanced interrogation services.”

    Collectively, this shadow army, a triumph of private enterprise many times cheaper than the state-sponsored model,  bagged at least $104 billion since 2002, and nearly $9 billion since 2016.

    Now we’re supposed to trust CENTCOM commander General Kenneth McKenzie, who swears that “the U.S. contractors will come out as we come out.” Apparently the Pentagon press secretary was not briefed: “So on the contractors, we don’t know exactly.”

    Some contractors are already in trouble, like Fluor Corporation, which is involved in maintenance and camp construction for no fewer than 70 Pentagon forward operating bases in northern Afghanistan. Incidentally, no Pentagon PR is explaining whether these FOBs will completely vanish.

    Fluor was benefitting from something called LOGCAP – Logistics Civil Augmentation IV Program – a scheme set by the Pentagon at the start of Obama-Biden 1.0 to “outsource logistical military support.” Its initial five-year deal was worth a cool $7 billion. Now Fluor is being sued for fraud.

    Enhancing stability forever

    The current government in Kabul is led by a virtual nonentity, Ashraf Ghani. Like his sartorially glamorous predecessor Hamid Karzai, Ghani is a US creature, lording it over a rambling military force financed by Washington to the tune of $4 billion a year.

    So of course Ghani is entitled to spin a rosy outlook for an Afghan peace process on the pages of Foreign Affairs.

    It gets curioser and curioser when we add the incandescent issue that may have provoked the Forever War in the first place: al-Qaeda.

    A “former security coordinator for Osama bin Laden” is now peddling the idea that al-Qaeda may be back in the Hindu Kush. Yet, according to Afghan diplomats, there is no evidence that the Taliban will allow old-school al-Qaeda – the Osama/al-Zawahiri incarnation – to thrive again.

    That’s despite the fact that Washington, for all practical purposes, has ditched the Doha Agreement signed in February 2020, which stipulated that the troop pullout should have happened this past Saturday, May 1.

    Of course, we can always count on the Pentagon to “enhance security and stability”  in Afghanistan. In this Pentagon report we learn that “AQIS [al-Qaeda in the Indian Subcontinent] routinely supports and works with low-level Taliban members in its efforts to undermine the Afghan government, and maintains an enduring interest in attacking US forces and Western targets.”

    Well, what the Pentagon does not tell us is how old-school al-Qaeda, pre-AQIS, metastasized into a galaxy of “moderate rebels” now ensconced in Idlib, Syria. And how contingents of Salafi-jihadis were able to access mysterious transportation corridors to bolster the ranks of ISIS-Khorasan in Afghanistan.

    The CIA heroin ratline

    All you need to know, reported on the ground, about the crucial first years of the imperial adventure in Afghanistan is to be found in the Asia Times e-book Forever Wars, part 1.

    Two decades later, the politico-intel combo behind Biden is now spinning that the end of this particular Forever War is an imperative, integrated to the latest US National Security Strategy.

    Shadow play once again reigns. Withdrawal conditionals include the incompetence and corruption of the Afghan military and security forces; that notorious Taliban-al-Qaeda re-engagement; the fight for women’s rights; and acknowledging the supreme taboo: this ain’t no withdrawal because a substantial Special Forces contingent will stay in place.

    In a nutshell: for the US deep state, leaving Afghanistan is anathema.

    The real heart of the matter in Afghanistan concerns drugs and geopolitics – and their toxic intersection.

    Everyone with transit in the Dubai-Kandahar axis and its ramifications knows that the global-spanned opium and heroin business is a matter very close to the CIA’s heart. Secure air transport is offered by bases in Afghanistan and neighboring Kyrgyzstan.

    William Engdahl has offered a concise breakdown  of how it works. In the immediate post-9/11 days, in Afghanistan, the main player in the opium trade was none other than Ahmed Wali Karzai, presidential brother and a CIA asset. I interviewed him in Quetta, Balochistan’s capital, in October 2001 (the interview can be found in Forever Wars). He obviously did not talk about opium.

    Ahmed Karzai was snuffed out in a Mafia-style hit at home, in Helmand, in 2011. Helmand happens to be Afghanistan’s Opium Central. In 2017, following on previous investigations by Seymour Hersh and Alfred McCoy, among others, I detailed the workings of the CIA heroin ratline in Afghanistan.

    New Great Game 3.0 is on

    Whatever happens next will involve layers and layers of shadow play. CENTCOM’s McKenzie, at a closed-door hearing at the US House Armed Services Committee, basically said they are still “figuring out” what to do next.

    That will certainly involve, in McKenzie’s own assessment, “counter-terrorism operations within the region”; “expeditionary basing” (linguistic diversion to imply there won’t be any permanent bases, at least in thesis); and “assistance” to Afghan National Defense and Security Forces (no details on what this “assistance” will consist of).

    Now compare it with the view by major Eurasian powers: Russia, China, Pakistan and Iran, three of them members of the Shanghai Cooperation Organization (SCO), with Iran as an observer and soon full member.

    Their number one priority is to prevent any mutating Afghan jihadi virus to contaminate Central Asia. A massive 50,000 troop-strong Russia-Tajikistan military exercise in late April had exactly that in mind.

    Ministers of defense of the Collective Security Treaty Organization (CSTO) met in Dushanbe with the objective of further fortifying the porous Tajik-Afghan border.

    And then there’s the Turkmen-Afghan border, from which the opium/heroin trail reaches the Caspian Sea and diversifies via Russia, Kazakhstan and Azerbaijan. Moscow, even more than the CSTO, is particularly worried by this stretch of the trail.

    The Russians are very much aware that even more than different opium/heroin routes springing up, the top danger is a new influx of Salafi-jihadis into the Commonwealth of Independent States (CIS).

    Even if analyzing it from completely different perspectives, Americans and Russians seem to be equally focused on what Salafi-jihadists – and their handlers – may come up with in post-9/11, 2021 Afghanistan.

    So let’s go back to Doha, where something really intriguing is afoot.

    On April 30, a so-called extended troika – Russia, the United States, China and Pakistan – issued a joint statement in Doha on their discussions regarding a negotiated settlement in Afghanistan.

    The extended troika met with the Kabul government, the Taliban and host Qatar. At least they agreed there should be “no military solution.”

    It gets curioser and curioser again: Turkey, backed by Qatar and the UN, is getting ready to host a conference to further bridge the gap between the Kabul government and the Taliban. Realpolitik cynics will have a ball wondering what Erdogan is scheming at.

    The extended troika, at least rhetorically, is in favor of an “independent, sovereign, unified, peaceful, democratic, neutral and self-sufficient Afghanistan.” Talk about a lofty undertaking. It remains to be seen how Afghanistan’s “neutrality” can be guaranteed in such a nest of New Great Game serpents.

    Beijing and Moscow will be under no illusions that the newly privatized, Special Forces Afghan-American experiment will eschew using Salafi-jihadis, radicalized Uighurs or other instant assets to destabilize what in effect should be the incorporation of Afghanistan to the China-Pakistan Economic Corridor (CPEC), the Shanghai Cooperation Organization (where it’s already an observer) and the larger Eurasia integration project.

    An extra-intriguing piece of the puzzle is that a very pragmatic Russia – unlike its historical ally India – is not against including the Taliban in an overall Afghan settlement. New Delhi will have to go along. As for Islamabad, the only thing that matters, as always, is to have a friendly government in Kabul. That good old “strategic depth” obsession.

    What the major players – Russia and China – see in the framework of a minimally stabilized Afghanistan is yet one more step to consolidate the evolution of the New Silk Roads in parallel with the Greater Eurasia partnership. That’s exactly the message Russian Foreign Minister Sergey Lavrov delivered during his recent visit to Pakistan.

    Now compare it with the – never explicit – strategic deep state aim: to keep some sort of military-intel “forward operating base” in the absolutely crucial node between Central and South Asia and close, oh so close, to national security “threats” Russia and China.

    The New Great Game 3.0 is just beginning at the graveyard of empires.

    Tyler Durden
    Tue, 05/11/2021 – 00:10

  • China Enforces New Boundary With Nepal At Summit Of Everest To Keep Infected Climbers Out
    China Enforces New Boundary With Nepal At Summit Of Everest To Keep Infected Climbers Out

    In the latest sign that Beijing is warily eyeing the outbreak in India as it spills over its borders into neighboring Nepal, China has set up a “line of separation” at the summit of Mount Everest to prevent any climbers from the Nepal side from mingling with climbers from the Tibet side, Reuters reports. The decision comes as the Everest base camp on the Nepal side has struggled with a persistent COVID-19 outbreak since April.

    To accomplish this, China is sending an expedition of climbers to install the line, though it’s not clear how they intend to enforce the boundary.

    Starved of tourism revenue, the Nepalese government has refused to impose limits on tourists and climbers who come in droves to visit the legendary mountain. Beijing apparently doesn’t feel great about this.

    As Reuters pointed out, it’s not clear how Beijing intends to enforce the border line in one of the most inhospitable environments for humans – the area surround the summit of Everest. The summit itself is about the size of a dining room table.

    To install it, Beijing is dispatching a small team of Tibetan climbing guides – which will include 21 Chinese nationals – who will ascend Everest and set up the “line of separation” at the summit.

    It’s also unclear whether the team of guides who will be setting up the line of separation will remain in the “death zone”, the area leading up to the summit where hundreds of travelers have died.

    China hasn’t allowed any foreign climbers to ascend the mountain from the Tibetan side since the coronavirus pandemic began. Tourists are also banned from visiting the base camp on the Tibetan side.

    So if you do happen to get infected with COVID-19 at 30,000 feet, you better just stay up there.

    Tyler Durden
    Mon, 05/10/2021 – 23:50

  • Welcome To The Socialist Paradise Of California
    Welcome To The Socialist Paradise Of California

    Authored by Michael Snyder via TheMostImportantNews.com,

    If you like extremely high taxes, a ridiculously inflated cost of living, horrifying bureaucratic nightmares, rising crime rates, endless homeless encampments and “health restrictions” that make it nearly impossible to operate a small business successfully, then you are going to absolutely love California.  Vast hordes of people have fled the state over the past 12 months, and so that means that there is now plenty of room for more socialists to move in.  But before you come, you will want to make sure that you have completely discarded any lingering notions of “freedom” and “liberty” because they won’t be of any use to you once you arrive in California.

    Over the past few years, California has gotten a bad rap for being an absolutely filthy place, but the truth is that authorities are going to great lengths to try to clean things up.

    In fact, they just removed 180 pounds of feces from one homeless encampment alone…

    This week, Echo Lake Park in Los Angeles California, the location of a former homeless encampment, received a much needed, and long overdue, deep cleaning.

    The park was closed last month and since then, city officials have been working to clean and revitalize the park and have reportedly removed over 170 tents and other debris, the Los Angeles Times reported.

    Among the 35 tons or 70,000 pounds of garbage, there were literal piles of poop, amounting to 180 pounds of feces and 564 pounds of urine according data from L.A. Sanitation & Environment workers. This did not include excrement collected from portable or permanent restrooms. Other hazardous waste like needles used for drugs, gasoline, and kerosene amounted to 300 pounds of the total trash collected, the LA Times noted.

    Critics of California often focus on the worst parts of the state, and that is very unfortunate.

    California is a state known for great natural beauty, and that natural beauty once attracted tourists from all over the globe.  Unfortunately, the pandemic has kind of killed tourism and many of the most iconic locations in the state have been marred by the “temporary” problems that the state is currently experiencing.  Venice Beach is just one example…

    Residents of Venice Beach in Los Angeles say soaring crime rates and the exploding homeless population have made life in the elite beachside community unbearable.

    A ‘catastrophic’ increase in homelessness in Los Angeles has seen hundreds of tents line the beach’s famous boardwalk.

    Business owners say they are being forced to close their doors and longterm residents are afraid to leave their homes after dark after being subjected to violent attacks and intimidation.

    Many Californians aren’t leaving their homes that much during daylight hours either because the price of gasoline has gotten so high.

    At this point, the average price of a gallon of regular-grade gasoline in the United States has reached $3.02 per gallon.

    That is not good, but in many parts of California the average price of a gallon of regular-grade gasoline is now hovering around four dollars a gallon, and in some locations a gallon of premium is almost five dollars a gallon.

    But officials in California are assuring us that higher taxes and absurd regulations are “only partly to blame” for why residents of California have to pay such high prices for gasoline…

    Some industry observers insist the higher cost of gasoline in California is due to higher taxes and regulations on gas and carbon emissions statewide. State agencies and consumer advocates insist those factors are only partly to blame and that the largest manufacturers charge more in California simply because they can, while big oil companies have held back on ramping up supply, according to the New York Times, after seeing huge cuts to their profits and workforce last year because of the pandemic.

    Of course the gasoline prices in California are not even worth comparing to the absurdly high housing prices in the state.

    But the good news is that those housing prices have started to moderate a bit as hordes of former residents have stampeded out of the state over the past year.

    Some suspect that rising crime rates may have something to do with the mass exodus.  After a huge increase last year, the murder rate in Los Angeles County is up almost 200 percent so far in 2021…

    Murders in Los Angeles County have spiked nearly 200% so far this year compared to the same time in 2020, with at least one official blaming the “defund the police” movement and progressive law enforcement officials.

    Apparently not satisfied with how fast crime is rising, California Governor Gavin Newsom has decided that now is a perfect time to start releasing tens of thousands of violent criminals back on to the streets…

    California is giving 76,000 inmates, including violent and repeat felons, the opportunity to leave prison earlier as the state aims to further trim the population of what once was the nation’s largest state correctional system.

    More than 63,000 inmates convicted of violent crimes will be eligible for good behavior credits that shorten their sentences by one-third instead of the one-fifth that had been in place since 2017. That includes nearly 20,000 inmates who are serving life sentences with the possibility of parole.

    We are being told that California prisons will soon be a lot safer once all of those violent criminals are gone.

    So if you plan on living in a California prison, that is really promising news.

    As my regular readers already know, I really like to make fun of the state of California.

    But the truth is that the entire country is slowly but surely becoming just like California, and there is nothing funny about that.

    The state of California was once one of the most beautiful and most prosperous places on the entire planet.

    Sadly, now socialism is transforming it into a dirty, filthy, crime-ridden bureaucratic hellhole.

    The rest of the nation should be recoiling in horror from the cautionary tale that California has become, but instead both major political parties have deeply embraced socialism at this point.

    The path that we are on does not lead anywhere good, and those that actually live in California should understand this better than any of us.

    *  *  *

    Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.

    Tyler Durden
    Mon, 05/10/2021 – 23:30

  • US Navy Seizes Massive Weapon Shipment From Stateless Vessel In Arabian Sea
    US Navy Seizes Massive Weapon Shipment From Stateless Vessel In Arabian Sea

    The guided-missile cruiser USS Monterey (CG 61) seized a massive shipment of illicit weapons last week that was being transited through international waters of the North Arabian Sea, according to the US Navy. 

    A Sikorsky SH-60 Seahawk launched from the USS Monterey helped stopped the stateless dhow sailing vessel on May 6 as part of a routine operation to verify its registry. 

    USS Monterey personnel worked with US Coast Guard Advanced Interdiction Team (AIT), boarded the vessel, and found the weapon stash. 

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    “The cache of weapons included dozens of advanced Russian-made anti-tank guided missiles, thousands of Chinese Type 56 assault rifles, and hundreds of PKM machine guns, sniper rifles and rocket-propelled grenades launchers. Other weapon components included advanced optical sights,” the Navy said. 

    The illicit cargo was removed from the vessel and laid out on the rear of the flight deck of the 567-foot warship. 

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    Lt. Cmdr. Pete Pagano, a spokesperson for the Navy’s Fifth Fleet, told CNN in an email Monday, the weapons were likely bound for Houthi rebels in Yemen. He cited similar seizures by the Fifth Fleet over the years. 

    “It comes amid tensions in Yemen and Iran’s attempt to support Houthi rebels there. However, it may be linked to other militant groups in Yemen or even the Horn of Africa or elsewhere,” said The Jerusalem Post. 

    On Feb. 9, the cruiser USS Normandy seized missile components from a dhow sailing vessel in the Arabian Sea. 

    The seizure of the weapons was around the time the Biden administration lashed out at Yemen’s Iran-backed Houthi rebels last Friday for refusing to meet with senior UN officials to address plans to wind down the country’s devastating war and increase humanitarian relief to suffering civilians. President Biden has also announced the end of operations in the Yemen War. 

    Tyler Durden
    Mon, 05/10/2021 – 23:10

  • "This Is Not Transitory": Hyperinflation Fears Are Soaring Across America
    “This Is Not Transitory”: Hyperinflation Fears Are Soaring Across America

    There was some good news for the (transitorily hyper–)inflation-ravaged US economy today when copper, wheat and lumber futures all fell after days of surging – in the case of the latter, the first drop in 13 days…

    … pushing the Bloomberg commodity index lower after six straight days of gains.

    Yet while today’s boiling-off in commodities may have been a faint validation of the Fed’s claim that this inflation is “transitory”, inflation pressures are unmistakably building, with Bloomberg’s Vince Cignarella noting that the five-year/five-year inflation swap is above 2.5% and rising: “that’s the highest since January 2018 and just 10 basis points below levels we saw in January 2017.”

    Why is this important? As Cignarella explains, “Inflation swaps are used by financial professionals to mitigate/hedge the risk of inflation and are considered reasonably accurate estimates for the break-even rate for the period in question. They’re also helpful to central banks and dealers who are trying to determine the market’s future inflation expectations.”

    In short, the market is looking at all the signals and is growing convinced that whatever “this” is, it is not transitory.

    And it’s not just finance pros who are calling the Fed’s bluff: according to the New York Fed’s survey of consumer expectations, median 1-year and 3-year inflation expectations by ordinary Americans jumped to a multi-year high of 3.4% and 3.1% respectively, the highest since September 2013.

    Digging through the details reveals an even more alarming picture: over the next year consumers anticipate gasoline prices jumping 9.18%, food prices gaining 5.79%, medical costs surging 9.13%, the price of a college education climbing 5.93%, and rent prices increasing 9.49%!

    This is hardly a “transitory inflation” expectation, to the contrary – expectations for sharply higher inflation are become firmly ingrained.

    But wait, there’s more: the CPI report on Wednesday is also expected to show price pressures leaped in April, and not just on a distorted year-over-year basis (where the base effect makes readings meaningless). The 0.3% core CPI M/M increase will be the highest print this century!

    It gets worse: one week after we showed that mentions of “inflation” on company earnings calls have now quadrupled YoY; and have jumped nearly 800% YoY…

    … as companies now openly freak out about soaring costs which they generously pass on to consumers, prompting BofA to conclude that “on an absolute basis, [inflation] mentions skyrocketed to near record highs from 2011, pointing to at the very least, “transitory” hyper-inflation ahead.”

    Maybe the hyperinflation will be transitory – if so, it would be the first time in history – but the soaring prices have clearly sparked a panic amid the broader population as the following chart of google searches of “inflation” shows.

    Source: Lehman econometrics

    And so, with most assets now “fixed” by the Fed, with bonds having lost all their inflationary signaling as they now trade in a world of implicit yield curve control, and with stocks already in a massive bubble, is there any wonder why the chart of the latest crypto darling du jour – Ethereum – which so far has not been “micromanaged” by the Fed (unlike the central bank’s old nemesis, gold), looks the way it does…

    … when increasingly more see the crypto asset class as one of the few remaining hedges for inflation, as even Bloomberg’s John Authers recently admitted.

    Tyler Durden
    Mon, 05/10/2021 – 22:50

  • Chelsea Clinton Calls For Global Crackdown On "Anti-Vax" Social Media Posts
    Chelsea Clinton Calls For Global Crackdown On “Anti-Vax” Social Media Posts

    Speaking at a Vatican-organized conference meant to promote “open dialogue”, Chelsea Clinton called for a global effort to crack down on all “anti-vax” social media posts, or anything that’s ‘skeptical’ of the official narrative.

    The statement, made in a pre-recorded segment that featured questions for the erstwhile first daughter, Clinton was asked to respond to a query about “vaccine hesitancy” and what can be done to encourage wider vaccine adoption.

    Clinton chose to opine about limiting freedom of speech and cracking down on social media posts, but didn’t touch the issue of access and the ongoing debate about waiving IP protections for COVID-19 vaccines, something the White House recently said it would support, even as much of the developed world opposes the plan (even if the EU signaled that it’s open to discuss it).

    “I personally very strongly believe there has to be more intensive and intentional and coordinated global regulation of the content on social media platforms,” she said.

    “We know that the most popular video across all of Latin America for the last few weeks that now has tens of millions of views is just an anti-vax, anti-science screed that YouTube has just refused to take down.”

    Clinton added that anti-vaccine content created in the US “flourishes” acround the world due to social media like YouTube and Facebook.

    “We know that – because I have tried – that appealing to the leadership of these companies to do the right thing has just not worked, and so we need regulation.”

    Clinton said that the Clinton Foundation has been doing what it can to convince the “vaccine hesitant” and the “vaccine refusers” to accept doses of the COVID-19 vaccines. She believes it is important to differentiate between people who are “hesitant” and those in the “refusal group.” The “hesitant” have questions that she can answer, for instance regarding the speed at which the vaccines were developed, their ingredients, and “conspiracies about microchips.”

    Recently, those who have questioned aspects of the COVID-19 rollout in the US (most notably, Joe Rogan, who was recently forced to apologize for vaccine-skeptic musings on his show), have been attacked by a growing chorus of critics including the mainstream press while being de-platformed by everyone from Facebook to PayPal.

    If Clinton wants to start setting standards for what content should be banned on social media, she should probably start by being more specific about what constitute’s being “anti vax”. For example, are the Norwegian health officials who recommended rejecting both the AstraZeneca and J&J jabs over safety concerns “anti vaxx”? How about the other European public health officials who came to similar conclusions?

    And what about the CDC, with its increasingly byzantine guidelines about when and where masks are appropriate, what types of precautions must still be taken by those who have been “fully vaxxed” and whether or not Americans can expect to receive a booster dose.

    Of course, if Clinton wants to improve adoption rates for COVID-19 vaccines, maybe she should focus on broadening access in the developing world.

    Tyler Durden
    Mon, 05/10/2021 – 22:30

  • US Already Planning How To "Choke" Chinese Submarines In Case Of Conflict
    US Already Planning How To “Choke” Chinese Submarines In Case Of Conflict

    A hugely significant weakness and set-back for the Chinese Navy and particularly its submarine capability was featured in recent Nikkei analysis, which found that its coastal system already has geography working against it, while at the same time giving Japan and Taiwan a significant edge.

    “When you look at China’s submarine bases, every single one of them has a fair bit of shallow water that their submarines have to transit through in order to get to deep water,” former US Navy submariner Tom Shugart explained to Nikkei Asia.

    Chinese Navy nuclear submarine, via Reuters

    A key issue is that submarines are much easier for rival nations to search out and track as they traverse shallow water, while in deep sea waters identity and defensive action against subs becomes extremely difficult. 

    What’s more is that US allies Japan and Taiwan are much less constrained by these “chokepoints” which are more characteristic of China’s shallower coastal waters. This gives the Japanese and Taiwanese navies the ability to deep dive a submarine fast, and quickly drop off their east coasts. 

    “A fast take a look at Google Earth reveals that China’s coast is surrounded by mild blue — which displays shallow seas — in distinction to the darkish blue deep waters that instantly drop off from the east coasts of Taiwan and Japan,” Nikkei observes. 

    And another defense expert was cited on what this means for China and more importantly for Pentagon planning as follows:

    “For them to move from China’s near seas to the open ocean, they’re going to have to transit through different chokepoints and straits in the island chains,” mentioned Shugart, an adjunct senior fellow on the Center for a New American Security assume tank.

    “That will provide opportunities for an adversary — the U.S. and our allies’ submarine forces — to monitor more closely and try to intercept them if we were involved in a conflict, or in the run-up to a conflict.”

    The US Department of Defense as well as closely affiliated think tank Rand Corp. is said to be studying “chokepoint management” in the region, given that any future potential US and allies conflict with China in the East and South China seas would put the US side at a distinct advantage when it comes to submarine warfare. 

    US Defense Defense Secretary Lloyd Austin recently signaled that Japan and other regional allies will be essential in establishing ‘integrated deterrence’ against China based on deeper collaboration.

    Map of South China Sea and Beijing’s expansive claims…

    The rest of the full Nikkei Asia analysis can be found here.

    Tyler Durden
    Mon, 05/10/2021 – 22:10

  • Egypt Reduces Compensation Fine Against Ever Given By $300 Million
    Egypt Reduces Compensation Fine Against Ever Given By $300 Million

    Egypt’s Suez Canal Authority (SCA) offered to drop $300 million from its compensation claims against the owners of the Ever Given containership, according to Egypt Today. 

    The Panama-flagged Ever Given containership, owned by Japan’s Shoei Kisen Kaisha, blocked the Suez Canal for six days in late March. SCA initially requested $916 million in damages for the blockage and continues to impound the ship 30 miles up the channel in the Great Bitter Lake. 

    Here’s the current location of the containership as of 0645 ET.

    The reduction of compensation claims was announced by the SCA Chairperson Admiral Osama Rabie on Friday. He told the MBC Masr channel that Egypt would continue to impound the vessel until the fine is paid. We’ve noted the court battle between SCA and the vessel owners could be a long-drawn-out process. 

    Egyptian business tycoon Naguib Sawiris tweeted that SCA’s fine is “exaggerated and unrealistic,” stating it’s not a good image for the country. 

    There have been instances where commercial vessels involved in international disputes take months or even years to resolve. There’s still no timeline when Ever Given’s owners will pay the fine, but the prolonged legal battle is not good luck for SCA. 

    Tyler Durden
    Mon, 05/10/2021 – 21:50

  • 71% Of Eligible Gen-Zers Don't Qualify For Military Due To Obesity, Criminal Records And Other Reasons
    71% Of Eligible Gen-Zers Don’t Qualify For Military Due To Obesity, Criminal Records And Other Reasons

    Bloomberg is out with a Monday report chronicling the sad state of affairs the US military has found itself in – notably trying to lure eligible recruits from Generation Z with a cartoon series dubbed “The Calling,” which will run on YouTube during May and June.

    As Bloomberg notes, “The Army—the U.S. military’s largest service—faces a complex set of problems: the eligible recruiting pool into all military services is small; and the newest generation of prospects, Gen Z, has had almost no contact or knowledge of the military, which has largely fought wars abroad since 2001. The Gen Z cohort grew up with technology, the internet, and social media.”

    The videos feature Emma, the self-proclaimed spoiled kid; David, the Hawaiian kid who at first didn’t let himself dream about becoming a pilot; Rickie, who grew up in a religious Haitian family in Florida; Janeen, a singer performing on cruise ships who joined the Reserves with the help of her Vietnam-veteran father; and Jennifer, born to first-generation Dominican immigrants, who worked long hours to make ends meet. -Bloomberg

    It gets worse.

    According to the report, almost 71% of those aged 17 to 24 – roughly 24 million out of 34 million people – are ineligible to join the military because of “obesity, lack of high school diploma, or a criminal record,“ according to Pentagon data.

    In order to lure the eligible Gen-Z’ers, the Army will be spending $425 million on marketing, with the goal of recruiting 60,000 to 70,000 active-duty soldiers, along with 40,000-45,000 National Guardsmen, and 13,000 to 17,000 members of the reserve. To do this, prospective recruits will be served content on YouTube via 15-second trailer. If a person watches at least 10 seconds of the ad, they will see a two-to-three minute episode of the recruiting cartoon, followed by an invitation to hop over to the Army’s website.

    “Gen Z flips through social media like it is an Olympic sport, and in order to get them to stop their thumbs for a few seconds, you’ve got to surprise them,” said Maj. Gen. Alex Fink, the Army’s chief of enterprise marketing. “The Calling has got a much more different look and feel than anything else than not only the Army has done—but nobody in the military has done something like this.”

    America’s foreign adversaries must be laughing their asses off.

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    Tyler Durden
    Mon, 05/10/2021 – 21:44

  • What Was Behind Friday's "Literally Shocking" Payrolls Miss
    What Was Behind Friday’s “Literally Shocking” Payrolls Miss

    By Steve Englander, head global G10 FX research at Standard Chartered bank

    Summary:

    • We see sampling issues and child-care concerns as the most likely drivers of the NFP weakness
    • We are skeptical of the work disincentives explanation as the number of UI benefit recipients and of long-term unemployed dropped sharply
    • Seasonality was normal, so this does not seem to have been a major issue
    • We doubt the Fed will change its stance, even if an abnormal May bounce offsets the April shortfall

    Work disincentives likely a future issue, but not in April

    There is a lot of discussion on the big forecast miss of April non-farm payrolls (NFP). The consensus was for around 1mn jobs, our forecast was 1.5mn and the outcome was 266,000 (Bloomberg even called it “literally shocking data“). Against much commentary in recent days, we doubt that the generosity of unemployment insurance (UI) benefits played an important role in April, but we do not underestimate its future impact. We suspect sampling issues in the survey were the main source of the miss but find evidence that child-care issues played an important but secondary role. The run-up in average hourly earnings seems abrupt but is consistent with anecdotal reports of labor shortages.

    We see the main takeaway for markets as USD weakness, accompanied by an upward drift in breakevens and commodity prices. Manufacturing wages lagged other sectors but were still up 0.6%. Labor shortages and wage growth in sectors open to competition add up to lost competitiveness, absent USD weakness. If disincentives to work grow in importance there will likely be added depreciation pressure. We think investors may be uncertain on how literally to take the disappointing NFP outcome but see the cost pressures as persistent. The consensus forecast for April core CPI is 0.3% m/m, the first time the consensus has been above 0.2% in the 21st century!

    April disincentive effect was probably exaggerated

    Many analysts have cited the potential impact on the labor supply of generous unemployment benefits. However, if these disincentives to work were the driver, we probably would not have seen the number of those receiving benefits drop as sharply as they did in March and April (Figure 2). It is hard to believe that NFP are capturing an unemployment effect invisible in claims and UI expenditure data. In addition, in the household survey the number of long-term unemployed continued to fall, while the number of those unemployed five weeks or less rose. We would expect the disincentives to show in the long-term unemployed hanging onto benefits.

    A separate Bureau of Labor Statistics survey of the impact of COVID-19 indicates that 1.7mn fewer workers were unable to work in April than in March because their employers closed or lost business due to COVID-19. While it is hard to link this survey directly to the Current Employment Survey from which NFP are derived, it does seem as if workers are going back to work once COVID-19 constraints are removed. We dismiss the supply-side impact in April because the data do not support it, but see risk that it becomes a bigger factor down the road.

    Tentative evidence that chid-care constraints matter

    Employment in the BLS household survey increased 326,000, but employment of women dropped 8,000. Only women aged 16-19 years showed an appreciable employment increase. This is consistent with the possibility that child-care responsibilities may have limited women’s ability to accept jobs. The drop from March to April in the category ‘Did not look for work in the last 4 weeks because of the coronavirus pandemic’ was steeper for men than for women and steeper for those without children under 18 than for those with; but the differences were not big enough to explain the shortfall in job gains.

    What makes this driver tentative is that women’s job gains over the past year have exceeded men’s. It is possible that child-care constraints increased in April but we are not sure why this would have happened as reopening extended.

    Note also that even had women’s employment gone up as much as men’s, the outcome would still be disappointing (we assume that men’s ability to accept employment was far less constrained).


    Seasonality was typical

    Non-seasonally-adjusted NFP were up 1.089mn, but the seasonal adjustment reduced the gains to 266,000. At first glance this looks like an aggressive seasonal adjustment, but in fact this is pretty typical for the pre-COVID-19 period.

    The non-seasonally adjusted April NFP average over 2015-19 was 1.1mn jobs that the seasonal adjustment reduced to 215,000. For the seasonal factor to be relevant there would have to be an argument that seasonal effects were distorted; for example, that seasonal layoffs in Q1 were less than normal, so April rehiring was similarly less than normal. We do not see these as easy arguments to make.

    Sampling error

    We put forward sampling error as an explanation with caution, as the temptation to resort to sampling error after a big forecasting miss is significant. We see three arguments for considering sampling error seriously:

    • The supplementary BLS shows continuous easing of COVID-constraints on working. For example the number of people teleworking dropped by almost four million from March to April (Figure 5). This drop cannot be mapped directly into NFP gains but indicates improving conditions. Almost by definition, the ramping up and easing of COVID-19 related constraints should not be seasonally adjusted away.
    • The BLS birth and death model that adjusts for firms (re-)opening and shutting down may be particularly imprecise under current circumstances. The BLS has adjusted its estimation procedures, but it is unclear how much their revised adjustment captures.
    • Most other labor-market indicators were showing robust conditions. There is no direct link between the BLS surveys and these other indicators, but the lackluster BLS releases are at odds with the ISM, other surveys and other labor-market indicators.

    Tyler Durden
    Mon, 05/10/2021 – 21:30

  • "Gas Run Has Begun" – Fuel Stations Run Dry Amid Hacked Pipeline
    “Gas Run Has Begun” – Fuel Stations Run Dry Amid Hacked Pipeline

    Gas shortages are being reported in the Southeast of the US amid the recent cybersecurity attack that temporarily shut down one of the largest pipelines in the US.

    Colonial Pipeline Co. Chief Executive Officer Joseph Blount said the company was in the process of restoring its systems but wouldn’t resume fuel shipments until the ransomware had been removed, according to Bloomberg. 

    At the moment, Colonial Pipeline is manually operating a segment of pipeline between North Carolina to Maryland and expects a complete system restore by the weekend. However, gas shortages are already being reported across North Carolina to Florida to Alabama. 

    On Monday, North Carolina Governor Roy Cooper signed an Executive Order declaring a state of emergency, temporarily suspending motor vehicle fuel regulations to ensure adequate fuel supply supplies throughout the state.

    WLOS’ Caitlyn Penter reported gas shortages in North Carolina. 

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    Penter said long gas lines were developing. 

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    WEAR-TV’s Renee Beninate shows that one gas station in Northwest Florida was selling regular gas for $4.29/gallon.

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    More people in Florida panic buying fuel for $4.50/gallon. 

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    In Fitzgerald, Georgia, one Twitter user shows long gas lines at an enmarket gas station. 

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    One South Carolina gas station was out of unleaded and plus. 

    Someone in Myrtle Beach panic hoarded gas. 

    People are getting worried about the shortage. 

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    A massive line of people waiting for fuel in Asheville, North Carolina.

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    People waiting to fuel up at one gas station in Plymouth, North Carolina.

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    Not sure where, but the run has begun. 

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    Gas shortage in Atlanta. 

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    Gas lines in Clinton, North Carolina. 

    WSOC’s Greg Suskin reports a gas station in South Carolina has entirely run out of gas, except for diesel. 

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    Shortages now spreading into Tennessee. 

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    According to Google Search Trends, people started panic searching “gas shortage” around 1300 ET in the Southeast.

    So far, nationwide gas prices have surged six cents this week to $2.96 – the highest for this time of year since 2014. If the national average soars to $2.99 or higher this week, it will be the highest since November 2014… and right before the start of summer driving season.

    AAA forecasts gas prices are soaring because of the shutdown of the Colonial Pipeline, which delivers about 45% of all fuel to the East Coast. 

    “This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee, and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week,” said Jeanette McGee, AAA spokesperson. “These states may see prices increase three to seven cents this week.”

    This is beginning to look like the 1970s gas shortage. If the panic just started hours ago – just wait until tomorrow. People will freak. 

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

  • Hedge Fund Gross Leverage Hits All Time High As HFs Furiously Short Tech Stocks
    Hedge Fund Gross Leverage Hits All Time High As HFs Furiously Short Tech Stocks

    Hedge funds had another rough week according to Goldman’s Prime Brokerage, with the GS Equity Fundamental L/S  Performance Estimate falling -1.68% between 4/30 and 5/6 (vs MSCI World TR -0.33%), driven by alpha of -1.11% – the worst weekly alpha in two months – and to a lesser extent beta of -0.57% (from market exposure and the market sensitivity factor combined). As a result, global fundamental equity L/S hedge funds lost almost two-thirds of their YTD gains in just the past week, bringing their total YTD return to just 0.97% in what is setting up as another dismal year for the 2 and 20 crowd.

    What is remarkable is just how sensitive to overall market beta the hedge fund space has become, and there is a reason for that: according to Goldman Prime, overall book Gross leverage rose +1.7 pts to 247.1%, the highest on record, while Net leverage fell -0.9 pts to 88.2% (not quite an all time high, but still 87th percentile).

    Looking at the composition of hedge fund purchases, the overall GS Prime book was modestly net bought again in the past week (+0.15 SDs), driven by risk-on flows as long buys outpaced short sales. Specifically, single Names were net bought while Macro Products (Index and ETF combined) were net sold. North America and to a lesser extent Europe were net bought driven by long buys, while DM Asia and EM Asia were net sold driven by short sales. 8 of 11 global sectors were net bought led in $ terms by Consumer Disc, Health Care, Staples and Real Estate, while Info Tech, Materials, and Financials were net sold.

    Meanwhile, continuing the trend first observed last week when we noted that hedge funds shorted tech shares for 9 of the previous 10 days, Goldman notes that Info Tech saw the largest net selling in nine months as managers reduced exposure for a third straight week. And in a surprise reversal to months of bullishness on IT, GS Prime points out that hedge funds are currently Underweight Info Tech stocks by -1.4% vs. the MSCI World, the lowest level since last November and in the 3rd percentile vs. the past five years.

    Some more details from the Goldman reports:

    • Info Tech, the worst performing sector this week, was also by far the most net sold sector on the GS Prime book driven by short sales outpacing long buys 7 to 1.
    • Info Tech stocks were net sold for a third straight week and saw the largest week/week $ net selling since last August (-1.6 SDs). Net trading flow diverged on a subsector level – Semis & Semi Equip, Software, and Electronic Equip were the most net sold, while Comm Equip and IT Services were the most net bought.
    • Hedge funds are currently U/W Info Tech stocks by -1.4% vs. the MSCI World, the lowest level since last November and in the 3rd percentile vs. the past five years.
    • From an industry group standpoint, hedge funds are still O/W Software & Svcs by +4.7% (28th percentile) and U/W Semis & Semi Equip and Tech Hardware by -1.6% (13th percentile) and -4.3% (18th percentile), respectively

    And while hedge funds shorted tech, the Goldman US Consumer Discretionary sector saw the largest net buying in three months driven by E-Commerce stocks. As a result, the GS Prime book is now O/W US Consumer Discretionary by +3.3% vs. the S&P 500, which is in the 9th percentile vs. the past year and in the 50th percentile vs. the past five years.

    • In $ terms, Consumer Discretionary was the most net bought US sector on the GS Prime book this week, driven by risk-on flows with long buys outpacing short sales 4 to 1.
    • The sector’s aggregate long/short ratio (MV) on the GS Prime book ended the week at 2.53, which is in the 2nd percentile vs. the past year and in the 77th percentile vs. the past five years. The GS Prime book is now O/W US Consumer Discretionary stocks by +3.3% vs. the S&P 500, which is in the 9th percentile vs. the past year and in the 50th percentile vs. the past five years.

    Tyler Durden
    Mon, 05/10/2021 – 20:50

  • Wildfires Rage In Arizona; Southwestern US Faces Megadrought 
    Wildfires Rage In Arizona; Southwestern US Faces Megadrought 

    The US Department of Agriculture (USDA) has warned against a megadrought approaching dangerous levels in the southwestern US. Wildfire conditions have been ripe across the region as Red Flag Warnings have been sprouting up from California to Texas. 

    Arid conditions in Arizona appear to have sparked a duo of wildfires burning in the state, forcing thousands of folks to flee as firefighters struggle to contain the blazes. 

    One of the fires rages just south of Prescott National Forest, located in north-central Arizona. Mandatory evacuations orders forced thousands from their homes in Minnehaha, Fort Misery, and Horsethief Basin, while Crown King was placed on alert Sunday. The fire has been dubbed the Tussock Fire.

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    “There is significant danger to you, gather necessary items and go,” read a Facebook post operated by the Arizona Bureau of Land Management (BLM). The Facebook page continued to say the Tussock Fire is “approximately 3,500 acres; 0% containment.” 

    The second wildfire is approximately 2,560 acres and stood at 35% contained as of Sunday evening. The fire is called Copper Canyon Fire and is burning 3 miles northeast of Globe in Gila County, located in the state’s central part. 

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    The US Drought Monitor as of last week shows more than 40% of the country is in drought coverage. Most of the “extreme” to “exceptional” drought is in the southwestern US. 

    “There have only been four times in the history of the drought monitor that we have seen more than 40% US drought coverage as we come into early May,” said USDA Meteorologist Brad Rippey. “The current US drought coverage is 46.6% of the lower 48 states in drought. That is a 2.6% increase from what we saw five weeks ago.”

    Fears of another 1930s Great Depression-style drought are quickly materializing in the southwestern US. 

    Utah and Nevada recorded their driest years in more than 126 years in 2020, while Arizona and Colorado had their second driest and New Mexico its fourth. The Southwest, plagued with “severe,” “extreme,” and “exceptional” drought conditions, suggests similarities to the Great Depression’s Dust Bowl of the 1930s (read: “Return Of The Dust Bowl? The “Megadrought” In The Southwest Is Really Starting To Escalate”). 

    Besides escalating wildfires and water shortages, farmers in the western half of the country are frightened of a significant agricultural disaster this growing season as the drought rages. The exceptional dryness could result in crop failures that would ultimately send agricultural prices even higher. So much for that “transitory” inflation, the Federal Reserve continues to squawk about… 

    Now Dust Bowl conditions have returned, wildfires begin to break out, and farmers are panicking about crop failures. But don’t worry, the Federal Reserve will just print more money in the name of climate change. 

    Tyler Durden
    Mon, 05/10/2021 – 20:30

  • Labor Shortage Sets Off "Inflationary Time Bomb" McDonalds Franchises Warn, Fearing Big Mac Price Hike
    Labor Shortage Sets Off “Inflationary Time Bomb” McDonalds Franchises Warn, Fearing Big Mac Price Hike

    An independent group of McDonald’s franchisees warns higher wages, signing bonuses, paid interviews are no longer working to attract new workers as generous unemployment benefits worsen the labor shortage, according to Bussiness Insider. 

    The National Owners Association (NOA), an independent, self-funded advocacy group of McDonald’s franchisees, sent a letter to its members Sunday criticizing “hiring challenges on the “perverse effects of the current unemployment benefits.” 

    The letter pointed to last week’s massive April payrolls employment miss, which consensus expected a whopping 1 million number, and some forecasters calling as high as 2+ million, were shocked with a 266k print. 

    “What’s going on here? When people can make more staying at home than going to work, they will stay at home,” the letter read, which was obtained by Insider. “It’s that simple. We don’t blame them. We fault the system.”

    The letter went on to say, “when higher wages, signing bonuses, paid interviews no longer work, we have a problem.”  

    Neema Ardebili, the vice president of global franchise and strategic partnerships at ADP, told Insider that the working-poor collecting stimmy checks are making more money sitting on the couch than actually working. 

    “Natural human behavior is to choose to receive more money while staying at home, than working for a highly demanding job — especially with the amount of stress that is being put on employees right now,” Ardebili said. 

    NOA Board said franchisees must increase pay and benefits to attract workers. These additional labor costs will be passed onto the consumer in the form of higher Big Mac prices. 

    “Inflation is the flip side to all of these changes,” the letter reads. “Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive.”

    “Our government officials need to know what is happening out in the real world,” the letter continues. “They need to know what they are creating; an inflationary time bomb.” 

    Meanwhile, White House press secretary, Jen Psaki, is utterly oblivious to the unemployment benefits disincentivizing people from wanting to return to work. 

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    And now, President Biden is out Monday afternoon saying, “anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.” It sounds like Biden is on damage control for his failed progressive policies. 

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    What’s clear is that the White House will never admit their progressive unemployment policies, borderline universal basic income, have been a complete disaster as it has prevented a labor market recovery.

    Now the Chamber of Commerce has urged an end to Biden’s pandemic handouts as “paying people not to work is dampening what should be a stronger jobs market and is hurting the overall recovery”…

    … or listen to NFIB chief economist Bill Dunkelberg who said that “small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force”…

    … or listen to restaurant legend Wolfgang Puck who said, “I don’t think we should pay people to stay home and not work if there are jobs available.”

    To attract workers, low-income workers, mainly under the $40k per year mark, employers must offer higher wages and other benefits equal or greater to what the government is paying, thus creating soaring labor costs for labor-intensive fast-food companies that will pass along the costs to consumers. 

    The Federal Reserve’s narrative that inflation is “transitory” is a load of crap. Prepare for much higher costs at fast-food joints. 

    Bank of America recently warned clients: “Buckle up! Inflation is here.” 

    Fast-food workers might get their wage increases in the short run, but in the longer run, this will force companies to quickly adopt automation and artificial intelligence to lower labor costs, displacing millions of workers this decade. 

    Tyler Durden
    Mon, 05/10/2021 – 20:10

  • Has The Mainstream Media Finally Turned Against Bill Gates?
    Has The Mainstream Media Finally Turned Against Bill Gates?

    Not long after we pointed out a report from the Daily Beast which traced the tensions in the marriage of Bill and Melinda Gates to Bill’s relationship with convicted pedophile Jeffrey Epstein, the Wall Street Journal has followed up with more reporting that confirms that Melinda Gates started consulting divorce attorneys as far back as 2019, before the pandemic thrust her husband back into the global spotlight as the world’s de facto vaccine czar.

    Documents obtained by WSJ show the couple negotiated their divorce throughout the pandemic.

    Ms. Gates consulted with divorce lawyers roughly two years before she filed for divorce from Mr. Gates, saying their marriage was “irretrievably broken,” according to people familiar with the matter and documents reviewed by The Wall Street Journal.

    As the Daily Beast also reported, tensions in their marriage can be traced back to a New York Times report claiming that Gates had met with Epstein several times, and that he had once stayed late into the night at Epstein’s Manhattan townhouse. Their meetings, according to Gates’ people, reportedly focused on issues of philanthropy. The pair first announced their split a week ago, and since then, the world has been waiting to learn more about how they plan to split their $130 billion-plus fortune.

    But what’s almost more notable than the details report by WSJ and the Daily Beast, is the fact that the MSM seems to be jumping on the story that Bill Gates’ relationship with Jeffrey Epstein directly led to the dissolution of his marriage. 

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    This is a big deal because, as we reported more than a year ago, Bill Gates and the Gates Foundation have built up one of the world’s most formidable media-manipulation machines to help silence Gates’s growing chorus of critics.

    Here’s a snippet from a Columbia Journalism Review story on how Gates manipulates the press:

    Gatess generosity appears to have helped foster an increasingly friendly media environment for the worlds most visible charity. Twenty years ago, journalists scrutinized Bill Gatess initial foray into philanthropy as a vehicle to enrich his software company, or a PR exercise to salvage his battered reputation following Microsofts bruising antitrust battle with the Department of Justice. Today, the foundation is most often the subject of soft profiles and glowing editorials describing its good works.

    During the pandemic, news outlets have widely looked to Bill Gates as a public health expert on covideven though Gates has no medical training and is not a public official. PolitiFact and USA Today (run by the Poynter Institute and Gannett, respectivelyboth of which have received funds from the Gates Foundation) have even used their fact-checking platforms to defend Gates from false conspiracy theories and misinformation, like the idea that the foundation has financial investments in companies developing covid vaccines and therapies. In fact, the foundations website and most recent tax forms clearly show investments in such companies, including Gilead and CureVac.

    In the same way that the news media has given Gates an outsize voice in the pandemic, the foundation has long used its charitable giving to shape the public discourse on everything from global health to education to agriculturea level of influence that has landed Bill Gates on Forbess list of the most powerful people in the world. The Gates Foundation can point to important charitable accomplishments over the past two decadeslike helping drive down polio and putting new funds into fighting malariabut even these efforts have drawn expert detractors who say that Gates may actually be introducing harm, or distracting us from more important, lifesaving public health projects.

    As we have reported, Gates’ ties to Epstein are much deeper than a simple prearranged meeting or two on the subject of philanthropy. The Daily Mail once reported that Gates was a guest aboard Epstein’s plane.

    When confronted about this, a representative for Gates said he wasn’t aware the plane belonged to Epstein!

    Meanwhile, employees of the Gates foundation also visited Epstein’s mansion on multiple occasions, while Epstein also “spoke with the Bill and Melinda Gates Foundation and JPMorgan Chase about a proposed multibillion-dollar charitable fund — an arrangement that had the potential to generate enormous fees for Mr. Epstein,” according to the Times.

    Two of Gates’ closest advisors developed close relationships with Epstein, and later introduced him to Gates.

    Gates once said in an email that he found Epstein’s “lifestyle” to be “intriguing”, though he immediately noted that it wouldn’t suit him.

    With all this preamble once again coming out in the press, we can’t help but wonder: is a Bill Gates accuser about to step forward?

    Tyler Durden
    Mon, 05/10/2021 – 19:55

  • Free Speech Inc. – How Democrats Have Found A New But Shaky Faith In Corporate Speech
    Free Speech Inc. – How Democrats Have Found A New But Shaky Faith In Corporate Speech

    Authored by Jonathan Turley,

    Below is an updated version of my column in the Hill on Facebook’s decision to uphold the ban on former president Donald Trump. Notably, this weekend, Twitter took it upon itself to add a gratuitous response to an observation made by Donald Trump Jr. after he tweeted “Biden isn’t the next FDR [Franklin Delano Roosevelt] he’s the next Jimmy Carter.” Twitter took it upon itself to say that many are “confused” by the remark since Carter was a great humanitarian and noble prize winner. It was a telling moment. These companies now act as either censors or officious intermeddlers when it comes to comments made on the platforms. They view themselves as a party to any postings and that viewpoints must be corrected or clarified to advance the corporate position.

    Here is the column:

    After Facebook’s oversight board this week upheld the social media giant’s continuing ban of former President Trump, the response of Rep. Ilhan Omar (D-Minn.) captured the visceral joy of many on the left: She posted a series of laughing emojis.

    Welcome to Free Speech, Inc.: the Democratic incorporation of free speech built around the a presumption of corporate censorship (for some).

    Of course, Democrats insist they are not attacking free speech, just combating “disinformation.” After all, they say, private companies have every right to control speech — unless you are, say, a bakery opposed to preparing a cake for a same-sex wedding, or a company contributing to political causes. The current mantra defending Facebook’s corporate speech rights seems strikingly out of sync with years of Democrats and political activists demanding the curtailment of such rights.

    When Masterpiece Cakeshop in Colorado refused on religious grounds to make a cake for a same-sex wedding, Sen. Elizabeth Warren (D-Mass.) denounced the bakery’s claim of free speech: “It was never about a cake — it’s about making sure no one has a license to discriminate against LGBTQ+ Americans.” When the Supreme Court ruled in the Citizens United case that corporations have free speech rights to participate in politics, Warren was appalled. She has long rejected the notion that corporations have the constitutional rights like individuals: “Corporations are not people. People have hearts. They have kids. They get jobs. They get sick. They cry. They dance. They live. They love. And they die.”

    Notably, Warren felt that one company (Masterpiece Cakeshop) can be forced to speak while another corporation (Facebook) should be able to stop others from speaking.

    When Facebook barred Trump, Warren declared: 

    “I’m glad that Donald Trump is not going to be on Facebook. Suits me.”

    House Intelligence Committee Chair Adam Schiff (D-Calif.) also celebrated and added:

    “Facebook must ban him. Which is to say, forever.”

    When free speech concerns are raised over corporate censorship, Democrats often drop references to “free speech” violations and instead address “First Amendment” violations. Indeed, when Trump objected to the ban on Twitter as “banning free speech,” a host of media outlets ran stories like: “Fact Check: Did Twitter Violate President Trump’s First Amendment Rights?” Experts like Wayne State University law professor Jonathan Weinberg chimed in that, under the First Amendment, a company “gets to choose who it does business with and who it doesn’t.”

    Likewise, when questioned about the Board’s decision and its impact on free speech, board member and Stanford Law Professor Michael McConnell dismissed such concerns by insisting that the First Amendment does not apply to Facebook and “no judge in the country would rule” in favor of the former president.”

    The First Amendment is not the full or exclusive embodiment of free speech, however. It addresses just one of the dangers to free speech posed by government regulation. Many of us view free speech as a human right. Corporate censorship of social media clearly impacts free speech, and replacing Big Brother with a cadre of Little Brothers actually allows for far greater control of free expression.

    This is even more concerning when politicians openly pressure companies to increase censorship. In one hearing last year, Sen. Richard Blumenthal (D-Conn.) actually warned Big Tech CEOs that he and his colleagues were watching to be sure there was no “backsliding or retrenching” from “robust content modification.”

    Obviously, these politicians would insist that the Masterpiece Cakeshop case is about discrimination while the Facebook controversy is about disinformation. However, some of us have long viewed all of these controversies as about free speech. Indeed, taking a free speech approach avoids the hypocrisy on both sides.

    Under a free speech approach, cakeshop owners have a right to refuse to prepare cakes that offend their deep-felt values, including religious, political or social values. Thus, a Jewish cakeshop owner should be able to decline to make a “Mein Kampf” cake for a local skinhead group, a Black owner to decline to make a white supremacist-themed cake, or a gay baker to decline to make a cake with anti-LGBT slogans. While these bakers cannot discriminate in selling prepared cakes, the act of decorating a cake is a form of expression, and requiring such preparation is a form of compelled speech.

    In the same way, NFL teams have a free speech right to prevent kneeling or other political or social demonstrations by players during games, Citizen’s United has a right to support political causes — and, yes, Facebook has a right to censor speech on its platform.

    Free speech also allows the rest of us to oppose these businesses over their policies. We have a right to refuse to subsidize or support companies that engage in racial or content discrimination. Thus, with social media companies, Congress should not afford these companies legal immunity or other protections when they engage in censorship.

    These companies once were viewed as neutral platforms for people to exchange views — people who affirmatively “friend” or invite the views of others. If Big Tech wants to be treated like a telephone company, it must act like a telephone company. We wouldn’t tolerate AT&T interrupting calls to object to some misleading conversation, or cutting the line for those who misinform others.

    As a neutral platform for communications, telephone companies receive special legal and economic status under our laws. Yet, it sometimes seems Facebook wants to be treated like AT&T but act like the DNC.

    In defending Big Tech’s right to censor people, University of California at Irvine law professor Richard Hasen declared that “Twitter is a private company, and it is entitled to include or exclude people as it sees fit.” That is clearly true under the First Amendment. It also should be true of others who seek to speak (or not speak) as corporations, from bakeries to sports teams.

    Yet, when the Supreme Court sent back the Masterpiece Cakeshop case in 2018 for further proceedings, an irate House Speaker Nancy Pelosi (D-Calif.) declared: “Masterpiece Cakeshop is a commercial bakery open to the public, and such services clearly must be made available to the public on equal terms … No business or organization open to the public should hide their discriminatory practices behind the guise of religious liberty.” But Pelosi applauded when social media companies barred some members of the public based on viewpoint discrimination on subjects ranging from climate change to vaccines to elections.

    The difference, of course, is that Masterpiece Cakeshop was willing to sell cakes to anyone but refused to express viewpoints that conflict with the owners’ religious beliefs. Conversely, social media companies like Twitter and Facebook are barring individuals, including a world leader like Trump, entirely from their “shop.” And, taking it one step further, Facebook has declared it will even ban the “voice of Donald Trump.”

    Big Tech is allowed to be arbitrary and capricious in corporate censorship. However, our leaders should follow a principled approach to corporate speech that does not depend on what views are being silenced. Because Elizabeth Warren was right. This “never was about a cake” or a tweet or “likes” for that matter. It was always about free speech.

    Tyler Durden
    Mon, 05/10/2021 – 19:50

  • 14% Of Americans Own Crypto: Here Is A Profile Of The Average HODLer
    14% Of Americans Own Crypto: Here Is A Profile Of The Average HODLer

    According to the latest just released report on the State of the Crypto Market from Gemini, 2020 which polled 3,000 U.S. adults, ages 18 to 65 with $40,000 or more in household income (survey respondents were polled from October 19-November 16, 2020, and included 921 self-identifying current cryptocurrency owners and 1,697 consumers who were interested in learning more about cryptocurrency), the exchange estimates that roughly 14% of the U.S. population owns cryptocurrency. This translates to 21.2 million U.S. adults who own cryptocurrency, and other studies estimate this number to be even higher. This number is expected to double in 2021.

    Gemini then set forth to profile who exactly is the average crypto holder. Here’s what it found:

    Crypto skews young, male and white: 74% of crypto holders are men, 77% of all crypto owners are under the age of 45, and 71% are white. The data shows that the “average” cryptocurrency owner is a 38-year-old male making approximately $111k a year.

    To be sure, not everyone is a HODLer: there are roughly 4.5 times more who are “cryptocurious.”

    The crypto-curious audience is defined as those who do not currently own cryptocurrency but indicate either wanting to learn more or planning to buy soon. This group is significant in size, comprising 63% of U.S. adults, and has the potential to disrupt what we think of as the “average” crypto holder.

    The most bullish case for crypto? Roughly 13% of U.S. adults plan to purchase cryptocurrency in the next 12 months. This adds up to approximately 19.3 million adults — which would nearly double the current crypto investor population. In taking a deeper look at the “crypto-curious” audience, we see some emerging trends that have the potential to change the profile of the average crypto holder.

    While just 26% of current crypto holders are women, there is potential for this to change significantly. Women account for more than half (53%) of those interested in getting into crypto soon, representing a major potential shift. The next wave of crypto buyers is also likely to be slightly older than current holders — with an average age of 44. They are also likely to have slightly less money to invest than those who are already crypto holders and are more likely to live in a small town or rural area than in an urban area, though it’s also worth noting that the crypto-curious audience remains largely white: 76% of the crypto-curious audience identifies as white or caucasian.

    Looking closer at the female breakdown of crypto-curious consumers, Gemini spots an interesting shift in age: 45% of current female crypto owners are under the age of 35, and just 4% are 55 or older. But among crypto-curious women, only about a quarter are under the age of 35, and a notable 25% are 55 or older. Women are not only poised to make up a larger portion of the next wave of crypto buyers, they’re also more likely to be women nearing retirement. This shift in gender, age, average income, and location indicates that crypto is starting to broaden its appeal away from an investment solely reserved for those with a large amount of assets to one that is more mainstream and accessible for the average person.

    Here is a full demographic breakdown of the current investor population vs the crypto curious:

    In looking at the survey results, it becomes clear that crypto awareness is spreading, and acceptance is becoming more and more mainstream; the survey revealed that there are many more people who are crypto curious than who are completely disinterested in crypto, which is promising for the future of crypto’s growth.

    Based on the percentage of respondents indicating that they plan to purchase crypto in the next 12 months, this could mean 19.3 million U.S. adults entering the crypto market very soon. And given what we know about the demographics of the crypto-curious audience, the profile of the average crypto holder could also soon be changing in a very welcome way. The future of crypto looks bright, and we are excited about the influx of a more diverse audience to continue to shape that future

    Going back to the survey, the next question tried to pintpoint what the average US adult knows about crypto. Not surprisingly, here it appears to mostly be all about bitcoin even though it is Ethereum that has become the most exciting token in recent weeks ( as we said it would). Some more details from the report:

    While the group of crypto-curious U.S. adults is growing, general knowledge about cryptocurrency seems to mirror what we hear in the news: Bitcoin is almost synonymous with crypto, but few have heard of other coins. The vast majority of owners or cryptocurious (95%) have heard of bitcoin, while little more than one-third have heard of Ethereum.

    Education appears to be central to converting crypto-curious consumers from simply interested in crypto to actual crypto holders. Over one-third (39%) of those who don’t yet own cryptocurrency consider themselves “somewhat or very” knowledgeable about  cryptocurrency. This indicates that consumers are attempting to learn before they dive in head first, but there’s still a significant opportunity for consumers to learn more: 60% of the crypto-curious identify as “not very” or “not at all” knowledgeable about cryptocurrency today. More than two-thirds of U.S. adults (77%) indicate they are open to learning more about digital assets, whether they already own cryptocurrency or not. As the current generation of crypto holders is well-educated — 90% identify as at least somewhat knowledgeable and 45% consider themselves extremely or very knowledgeable — this shows us that the potential “next  wave” of crypto buyers will continue to be savvy and well researched about crypto’s purpose and potential.

    What is perhaps most surprising, is that the level of reported knowledge shows the vast majority of crypto investors are taking the time to thoroughly understand this space before investing. They’re thoughtful and betting on real promise versus trying out something trendy for fun. The crypto curious audience is taking a similar approach: those who want or plan to buy soon appear to also take time to educate themselves on the industry first. It’s worth noting that these existing crypto holders aren’t just early adopters who have had years to immerse themselves in the space: 26% of current crypto owners first bought crypto within the past year. This indicates again that the market, as expected, is made up of people who take the time to understand and research before investing in crypto.

    Next, the survey looked at what crypto holders own, and how they trade.

    It found that more than a quarter (26%) of current owners first acquired crypto in the last year, and a full 68% purchased crypto within the last two years. This shows crypto is no longer a niche investment reserved for early-adopters. Widespread interest is growing, and growing fast.

    While new cryptocurrencies emerge nearly every day, bitcoin still reigns supreme as not only the coin most people have heard of, but also the coin most crypto holders own. Nearly 9 in 10 current crypto owners currently own or have owned bitcoin (87%), compared to ether at 36%, bitcoin cash at 22% and litecoin at 21%. Bitcoin also appears to have the most staying power: while 87% report they have at some point owned bitcoin, 84% still have it in their portfolio. By comparison, 21% of crypto investors have owned litecoin and only 15% still currently own it.

    * * *

    One final discovery – and perhaps the least surprising one for the notoriously illiquid space where the float is a tiny fraction of any given token – is that more than two-thirds of crypto investors are indeed HODLers,

    The large majority of current crypto owners say they buy and hold crypto for its long-term investment potential. More than two-thirds (69%) buy and hold, compared to the 36% who actively buy and sell as a means to achieve profits and the 27% who actively use it to make purchases on the internet.

    A look at the crypto-curious audience reveals a similar split: half of the crypto curious (54%) reported wanting to buy and hold crypto as a long-term investment, while 39% indicated they are interested in actively trading to make a profit.

    When it comes to trading activity, investors run the gamut: a quarter of crypto investors trade, buy or sell only a few times a year, while more than another quarter (27%) trade, buy, or sell at least several times a month. This indicates that there’s a mix of “buy and hold” strategists, crypto holders who continue to buy more, and those who experiment with regular trading to achieve short-term profits.

    Source

    Tyler Durden
    Mon, 05/10/2021 – 19:30

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