Today’s News 11th May 2022

• NATO Country Among 1st To Adopt Law Declaring Russia's Invasion "Genocide" & "Terrorism"
  NATO Country Among 1st To Adopt Law Declaring Russia’s Invasion “Genocide” & “Terrorism”

  The Baltic country of Lithuania has become among the first NATO member countries to formally call Russia’s military action in Ukraine a “genocide” while legally declaring the invasion state-sponsored “terrorism”.

  Its parliament voted unanimously on Tuesday to adopt the motion into law, also calling for future Nuremberg style war crimes trials for top Russian officials – something which most pundits and legal experts agree is likely impossible to practically carry out.

  

  Reuters details that “The motion, co-sponsored by Prime Minister Ingrida Simonyte, said Russian forces’ war crimes in Ukraine included the deliberate killing of civilians, mass rape, forcible relocation of Ukrainian citizens to Russia and the destruction of economic infrastructure and cultural sites.”

  “The Russian Federation, whose military forces deliberately and systematically select civilian targets for bombing, is a state that supports and perpetrates terrorism,” the Lithuanian parliamentary motion reads. It follows a prior similar designation by Canada’s parliament.

  In mid-April, President Joe Biden raised eyebrows in calling Russia’s invasion a “genocide” for the first time. It was met with some controversy among analysts in the United States given that the United Nations’ definition for formal application of the term has strict requirements and typically isn’t thrown around loosely.

  A Russian parliament official was the first to respond to the Lithuanian action, explaining that the Baltic state is merely obediently following Washington’s lead: 

  Leonid Slutsky, head of the International Affairs Committee of Russia’s lower house of parliament, said the resolution was not legally binding and that it merely repeated what he called the United States’ Russophobic views.

  He said the resolution was part of an “anti-Russia project” and biased actions against Russia that “have nothing to do with reality,” the TASS news agency cited him as saying.

  A month ago Ukraine’s President Zelensky spoke virtually to Lithuanian parliament, which is in the capital of Vilnius, and declared that the country had been the “first” in Europe to come to Ukraine’s aid.

  “Dear Lithuanians, I am grateful to address you on behalf of the Ukrainian people today. You have been among the first to come to Ukraine’s aid. You remain among those who care most about peace and security in Europe,” he told the lawmakers. His message to various bodies of friendly countries’ lawmakers worldwide has focused heavily on allegations of Russian war crimes, claiming also that Russian forces actively target Ukrainian civilians – a charge the Kremlin has consistently denied.

  Tyler Durden
  Wed, 05/11/2022 – 02:45

• US Sanctions ISIS Financial Facilitators Accused Of Child Trafficking
  US Sanctions ISIS Financial Facilitators Accused Of Child Trafficking

  Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

  The United States on Monday sanctioned a network of five ISIS financial facilitators accused of assisting the terrorist group in the smuggling of children out of displaced person camps for recruitment as fighters.

  

  In a statement, the U.S. Treasury Department said the five individuals—Dwi Dahlia Susanti, Rudi Heryadi, Ari Kardian, Muhammad Dandi Adhiguna, and Dini Ramadhani—worked across Indonesia, Syria, and Turkey.

  All of their property and assets in the United States will be blocked as a result of the sanctions.

  They were accused of “facilitating the travel of extremists to Syria and other areas where ISIS operates” and conducting financial transfers to support the group’s efforts in Syria-based displaced person camps.

  It stated that the network collected funds in Indonesia and Turkey for the group, “some of which were used to pay for smuggling children out of the camps and delivering them to ISIS foreign fighters as potential recruits.”

  “By designating them, we aim to expose and disrupt an international ISIS facilitation network that has financed ISIS recruitment, including [the recruitment] of vulnerable children in Syria,” Secretary of State Antony Blinken said in a statement.

  According to the Treasury Department, residents of displaced person camps in Syria include those who have been displaced by ISIS, as well as ISIS members, supporters, and their families.

  “ISIS sympathizers in over 40 countries have sent money to ISIS-linked individuals in these camps in support of ISIS’s future resurgence,” it said.

  The Al-Hawl camp has been recognized as “the largest displaced person camp in northeast Syria,” housing up to 70,000 people, most of whom are women and children.

  “In Al-Hawl alone, ISIS supporters have received up to $20,000 per month via hawala, an informal transfer mechanism; the majority of those funds transfers have originated outside Syria or passed through neighboring countries such as Turkey,” it added.

  The sanctions followed the 16th meeting of the Counter ISIS Finance Group of the Global Coalition to Defeat ISIS, on May 9. The CIFG is co-led by the United States, Italy, and Saudi Arabia and comprises nearly 70 countries and international organizations.

  “The United States, as part of the Global Coalition to Defeat ISIS, is committed to denying ISIS the ability to raise and move funds across multiple jurisdictions,” said Brian E. Nelson, the Treasury’s undersecretary for terrorism and financial intelligence.

  Tyler Durden
  Wed, 05/11/2022 – 02:00

• Leftists Hate Free Speech Because They Fear Dissent, Not "Disinformation"
  Leftists Hate Free Speech Because They Fear Dissent, Not “Disinformation”

  Authored by Brandon Smith via Alt-Market.us,

  I think one of the most bizarre social developments of the past 10 years in the US has been the slow but steady shift of the political left as supposed defenders of free speech to enemies of free speech. The level of mental gymnastics on display by leftists to justify their attacks on freedom and the 1st Amendment is bewildering. So much so that I begin to question if liberals and leftists ever actually had any respect for 1st Amendment rights to begin with? Or, maybe the only freedom they cared about all along was the freedom to watch pornography…

  

  One can see the steady progression of this war on speech and ideas, and the end game is predictable: Is anyone really that surprised that the Biden Administration is implementing a Ministry of Truth in the form of the DHS Disinformation Governance Board? Can we just accept the reality at this point that leftists are evil and their efforts feed into an agenda of authoritarianism? Is there any evidence to the contrary?

  Before I get into this issue, I think it’s important to point out that it’s becoming tiresome to hear arguments these days suggesting that meeting leftists “somewhere in the middle” is the best and most desirable option. I see this attitude all over the place and I think it comes from a certain naivety about the situation we are facing as a country. Moderates and “normies” along with people like Bill Maher and Russell Brand are FINALLY starting to realize how bag-lady-crazy leftists are and the pendulum is swinging back slightly. But, it was conservatives that were calling out the social justice cult and their highway to hell for years.

  While everyone else was blissfully ignorant, we were fighting the battles that stalled the leftist advance. This is not to say I’m not happy to have moderates and reformed liberals on board, it’s a great thing. However, the time for diplomacy and meeting leftists halfway is long dead.

  There is no such thing as a “center” in our society anymore, either you lean conservative and you support freedom, or you lean left and support authoritarianism. There is no magical and Utopian in-between that we need to achieve to make things right. We are not required to tolerate leftist authoritarianism because of “democracy.” Sometimes certain ideologies and certain groups are mutually exclusive to freedom; meaning, they cannot coexist within a society that values liberty.

  We need to be clear about where the lines are drawn, because sitting on the fence is not an option. Walk in middle of road? Get squished like grape.

  To understand how leftists got to the point of enthusiastic hatred of free speech rights there are some psychological and philosophical factors that need to be addressed. These include specific ideals that leftists value that are disjointed or simply irrational:

  Hate Speech Is Real And Must Be Censored?

  First, as I have argued for many years, there is no such thing as “hate speech.” There is speech that some people don’t like and speech they are offended by. That is all.

  Constitutionally, there is no hate speech. People are allowed to say any offensive thing they wish and believe however they wish as long as they are not slandering a person’s reputation with lies or threatening them with direct bodily harm. If you are offended by criticism, that is your problem.

  Leftists believe the opposite. Instead of growing a thicker skin they think that “hate speech” should be illegal and that they should be the people that determine what hate speech is. This is a kind of magical door to power, because if you can declare yourself the arbiter of hate speech you give yourself the authority to control ALL speech. That is to say, as the thought police all you have to do is label everything you don’t like as hate speech, no matter how factual, and you now dictate the course of society.

  No one is capable of this kind of objectivity or benevolence. No person alive has the ability to determine what speech is acceptable without bias. Like the One Ring in the Lord of The Rings, there is no individual or group capable of wielding such power without being corrupted by it. Either there is no hate speech, or everything becomes hate speech.

  Free Speech Is Negated By Property Rights?

  This is in direct reference to social media websites and it’s an oversimplification of the issue of free speech and large social media platforms. Here is the conundrum or “false paradigm” if you will:

  Leftists argue for private property rights, but only when it comes to vast corporate big tech platforms like Twitter, Facebook, YouTube, etc. They like private property rights for companies that they think are on their side politically; they hate private property rights for everyone else. Just look at their response to Elon Musk’s recent Twitter buyout; the leftists are demanding that Musk be stopped at all costs, and they demand that the SEC and FCC step in to disrupt the sale because they claim Musk’s purchase is a “threat to democracy.”

  The media itself is clamoring to disrupt Musk’s takeover of Twitter. Whether or not you trust him, Musk’s acquisition of the platform has at least exposed the totalitarian attitudes of mainstream journalists for everyone to see. They are now even admitting on air that THEY control public discussion; that it is “their job,” and they see Musk as a threat to that monopoly.

  Why are Elon Musk’s private property rights less important or protected than the original shareholders of Twitter (Vangaurd, BlackRock, Morgan Stanley and a Saudi Prince)? Because Musk does not claim to represent leftist designs and interests? Leftists have no principles, they only care about manufacturing consent. Their method of winning requires that they never restrict themselves within the boundaries of values or morals. Again, this is the epitome of pure evil.

  Beyond that irony, though, is the deeper issue of government intervention vs business rights. Many people seem to think that government power is supposed to balance out corporate power when the truth is that governments and corporations work hand in hand; they are often one in the same entity.

  Twitter and other Big Tech platforms receive billions upon billions of dollars in government stimulus and tax incentives every year. Corporations as a concept are essentially a socialist creation. They enjoy limited liability and corporate personhood along with other special protections under government charter. With all these protections, incentives, bailouts and stimulus measures it is almost impossible for small and new businesses to compete with them. They represent a monopoly through cartel; they control the marketplace by colluding with each other and colluding with the government.

  A perfect example of this would be the coordination between multiple Big Tech companies to bring down Parler, a conservative leaning competitor to Twitter. This required some of the biggest companies in the world working in unison along with the blessing of government officials to disrupt the ability of a new company to offer an alternative, and all because Parler was getting too big.

  In the case of a private person’s home or their small business or small website, it’s true that there are no free speech rights. They can kick you out and they don’t have to give a reason. But when it comes to massive conglomerates that receive billions in OUR tax dollars in order to stay alive, no, they do not deserve private property rights. They have now made themselves into a public utility, and that means they are subject to constitutional limitations just as public schools and universities are.

  This is a concept that leftists just don’t grasp. They view corporate power as sacrosanct…as long as it serves their interests.

  Consider global corporations like Disney and their open intention to undermine the passage of Florida’s anti-grooming bill; this represents Disney’s vocal support for the sexualization and indoctrination of children in Florida schools. Leftists cheered the announcement and claimed that without Disney, Florida’s economy would be wrecked. Instead, the state turned the tables and took away incentives they had been giving to Disney for decades. Leftists responded by accusing Governor DeSantis of being a “fascist” and attacking free speech.

  But let’s break this down: Leftists happily supported Disney, a massive conglomerate, and their efforts to undermine the will of the voters in Florida. The state government stops them from undermining the voters by taking away the money and special incentives that belong to the voters. In turn, leftists claim this is a violation of Disney’s rights?

  The disparity between leftist arguments on Elon Musk’s takeover of Twitter vs. Disney’s attempted sabotage of Florida law could not be more confused. When it comes to Twitter they love the idea of censorship and react with panic when the mere prospect of free speech (within the confines of US law) is presented. When it comes to Disney, they say they love the idea of free speech, and anyone that wants to limit the corporation’s influence within Florida, no matter how criminal, is accused of fascism.

  The difference is obvious – Musk appears to be an uncontrolled element, while Disney is an “ally.” Free speech and property rights are only allowed for one side of the cultural divide. Leftists attacking freedom is free speech; defending ourselves against those attacks is a threat to democracy. It’s absurd.

  Disinformation Is A Threat And Censorship Is The Solution?

  The holy grail of censorship is not website filters and algorithms, because as we have seen with Twitter, those platforms could be built or purchased by someone that does not share in the leftist agenda. Instead, government intervention and the ability to define what is proper and improper discourse is the ultimate goal. The end game of authoritarians is always to write mass censorship into law, as if it is justified once it is codified.

  Corporate elites and political puppets like Biden pontificating about the threat of “disinformation” is hilarious for a number of reasons, but mainly because it is the power brokers and the media that have been the main purveyors of disinformation for a long time. Suddenly today they care about the spread of lies?

  I think it is obvious that such people are far more worried about the spread of facts, evidence and truth. They cannot debate on fair ground because they will lose, so, the only other option is to silence us. The institution of the Disinformation Governance Board is a clear indication that the establishment and the useful idiots on the political left are becoming DESPERATE.

  Their grip on the public mind is slipping, and we saw this during their recent attempts to enforce medical tyranny across the country in the name of covid. Luckily, conservatives in at least 20 red states fought against the implementation of covid lockdowns, mandates and vaccine passports which would have annihilated our constitutional rights forever.

  For years I heard the argument that when the jackboots arrived conservatives would do nothing, and now we know this is nonsense. Some of the few free places in the world during two years of pandemic fear mongering were red states in America, which coincidentally also have the highest concentration of conservatives.

  If you want to know what our country would look like had conservatives not stopped the tide of tyranny, just take a gander at China today. They have some of the strictest covid mandates on the planet and yet they are once again locking down millions of citizens due to “high infection rates.” Not only that, but they are starving their own people in the process.

  It’s madness, and it’s exactly what leftists were arguing in favor of just a few months ago. The US is mostly open today, just as red states like mine have been free for almost the entirety of the pandemic, and what has changed? Half the country is still unvaccinated – Is there mass death in the streets? Nope. Nothing has changed in terms of covid. The mandates made no difference whatsoever, other than to disrupt the economy and reduce people’s freedoms.

  Not long ago, pointing out this fact was considered “disinformation” that needed to be silenced in order to “save lives.” The Hunter Biden laptop story was called disinformation. The Wuhan Lab story was called disinformation. Fauci’s gain of function research on covid at the Wuhan lab was called disinformation. The fact that vaccinated people still contract and die from covid was called disinformation. In other words, what the government and corporate oligarchs call “disinformation” today is eventually called reality tomorrow.

  I would be happy to enter into a fair debate with White House Press Secretary Jen Psaki on any of the above issues and her views of what constitutes “disinformation,” but she would never do such a thing because she knows she would be crushed like a bug. It is not the government’s job to protect the public from information, whether real or fake. It is not their job to filter or censor data or ideas. They are not qualified to do this. No one is.

  Leftists operate from a collectivist mentality and this makes them believe that society is a singular entity that needs to be managed and manipulated to achieve a desired outcome. They have no concept of individual responsibility and discernment, but that is a side note to the real problem. They support information control because facts and ideas outside of their narrative could possibly damage that narrative. And, if the narrative is damaged they lose their feeling of power, which is all they really care about.

  If your narrative is so fragile that it does not hold up to scrutiny or alternative viewpoints then it must not be worth much of a damn. If you have to force people or manipulate people into believing the way you do, then your ideology must be fundamentally flawed. The truth speaks volumes for itself and eventually wins without force. Only lies need to be forced into the collective consciousness. Only lies require tyranny.

  Eventually reality wins over propaganda, unless total censorship and totalitarianism can be achieved. Nothing has changed in the 200+ years since the creation of the Bill of Rights. Free speech is still integral to a functioning society. Without it, society crumbles. They will claim that today things are different and that society needs to be “protected from itself.” This is what tyrants always say when trying to steal power.

  Most people reading this know by now that this is a war. It’s not a political debate that requires give-and-take, but a full-bore winner-take-all conflict. A DHS faction which is mandated to monitor our speech and propagandize the public is unacceptable and must be eliminated. Leftist and globalist monopoly of social media communications platforms is unacceptable and must be eliminated. The imposition of leftist and globalist ideology into the media narrative while censoring any contrary information is unacceptable and must be eliminated. This is about saving the remaining embers of American culture. If we do not take an aggressive stand now, the next generation may never know liberty. Everything we hold dear is at stake.

  *  *  *

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  Tyler Durden
  Wed, 05/11/2022 – 00:05

• 'War Is A Racket': Visualizing US And Russia's Biggest Arms-Trading Partners
  ‘War Is A Racket’: Visualizing US And Russia’s Biggest Arms-Trading Partners

  The increase in conflicts worldwide, including in Ukraine and the Middle East, has shifted global focus back onto arms transfers between countries.

  For decades, countries proficient in arms manufacturing have supplied weapons to other countries in demand of them; and at the helm of these trades are the U.S. and Russia, which, as Visual Capitalist’s Anshool Deshmukh details below, have accounted for 57% of all international arms trades in the last 10 years.

  So who are the largest importers of arms from these two countries, and what is the military value of these trades?

  With the help of data from the Stockholm International Peace Research Institute (SIPRI) arms transfer database, the above infographic by Ruben Berge Mathisen visualizes the top 50 biggest arms recipients by value for both the U.S. and Russia in the last decade.

  

  The Military Valuation of Arms Transfers

  The military valuation of arms is measured in terms of trend-indicator values (TIV). This valuation reflects the military capability of a particular item rather than its financial value.

  Every weapon that falls under the conventional definition of major arms is allotted a TIV. The following are the most common weapons and components to be assigned a TIV.

  • Aircraft and armored vehicles

  • Artillery (>100mm in caliber)

  • Sensors and guided missiles, large air defense guns, torpedoes, and bombs

  • 100mm caliber artillery-armed ships (>100-tonne displacement)

  • Reconnaissance satellites and air refueling systems

  Instead of focusing on budget, examining TIV makes it easier to measure trends in the flow of arms between particular countries and regions over time, essentially creating a military capability price index.

  Biggest Recipients of U.S. Armaments

  The United States is the largest exporter of arms globally, responsible for 35% of global exports over the last 10 years to about 130 nations.

  Most recently, the biggest market for U.S. arms sales has been in the Middle East, with Saudi Arabia being the most prominent recipient of weapons. Over the last decade, the country has purchased 24% of total U.S. arms exports, with components worth over 18 billion TIVs.

  Here is a look at the top 10 recipients of arms from the United States:

  

  The U.S. remains the biggest global exporter of weapons globally, however, sales of military equipment to foreign countries dipped by 21% over the previous fiscal year, dropping from $175 billion in 2020 to $138 billion in 2021.

  Biggest Recipients of Russian Armaments

  Russia, the world’s second-largest arms dealer, was responsible for 22% of global arms exports between 2011 and 2021.

  In terms of TIVs, India remains the biggest importer of Russian weapons by a wide margin. India’s dependency on Russian-made arms is driven by its fight to quell the military assertiveness of China on one side and its constant skirmishes along the Pakistani border on the other.

  But despite the continued support of Russia and its President by the Indian Prime Minister, even in the wake of Russia’s war on Ukraine, some reports have shown that India has been looking elsewhere for arms in the last few years.

  Let’s take a look at some of the other biggest importers of Russian arms around the world:

  

  One relationship of significance is Russia’s provided weapons to Pro-Russia Ukrainian Rebels. Since 2014, Russia has offered arms and training to these rebels in their fight. These have included weapons of all sorts, from pistols and mines to tanks and missile launchers.

  Effect of the War on Ukraine on Arms Trades

  According to the latest data from SIPRI, the international arms trade fell by 4.6% in the last five-year period. Despite this, Europe has become a new hotspot for arms imports, seeing a 19% increase in arms transfers over the same time period.

  Countries like the U.K., Netherlands, and Norway were the largest importers, and other countries might follow suit.

  Experts claim that this upsurge is attributed to the crumbling relationship between Russia and Europe. Alarmed by Russia’s invasion of Ukraine, European countries have been reevaluating their defense budgets—as exemplified by Germany’s recent €100 billion commitment to boost its military strength.

  In the coming years, the U.S. and Russia’s biggest arms transfer partners are likely to shift. But which way will arms transfers trend?

  Tyler Durden
  Tue, 05/10/2022 – 23:45

• China Accelerates Nuclear Buildup, Military Modernization; Biden Speeding US To Defeat
  China Accelerates Nuclear Buildup, Military Modernization; Biden Speeding US To Defeat

  By Judith Bergman of The Gatestone Institute

  • “The PRC likely intends to have at least 1,000 warheads by 2030, exceeding the pace and size the DoD projected in 2020.” — Military and Security Developments Involving the People’s Republic of China 2021, US Dept. of Defense.

  • “In space, China is putting up satellites at twice the rate of the United States and “fielding operational systems at an incredible rate.” — General David Thompson, the Space Force’s first vice chief of space operations, quoted in The Washington Post, November 30, 2021.

  • “Look at what they [CCP) have today…. We’re witnessing one of the largest shifts in global geostrategic power that the world has witnessed.” — General Mark Milley, Chairman of the US Joint Chiefs of Staff, breakingdefense.com, November 4, 2021.

  • “[T]he Chinese are building up their military capabilities in space, cyberspace, and in the conventional force. It’s all happening at the same time.” — Timothy Heath, senior international and defense researcher at Rand Corporation, Business Insider, January 4, 2022.

  • “To fully assess the China threat, it is also necessary to consider the capability of the associated delivery system, command and control, readiness, posture, doctrine and training. By these measures, China is already capable of executing any plausible nuclear employment strategy within their region and will soon be able to do so at intercontinental ranges as well.” ­­ — Admiral Charles Richard, Commander of U.S. Strategic Command, Senate Committee on Armed Services, April 20, 2021.

  • There is now as well the added probability of China and Russia engaging in military coordination…. a strategic partnership of “no limits” and with “no forbidden areas” in an agreement that they said was aimed at countering the influence of the United States.

  • This cooperation has already seen China undermining Western sanctions on Russia and supplying Russian President Vladimir Putin with the lifeline he needs to continue his war in Ukraine.

  • “The friendship between the two peoples is iron clad.” — Chinese Foreign Minister Wang Yi, Associated Press, March 7, 2022.

  • “For the first time in our history, the nation is on a trajectory to face two nuclear-capable, strategic peer adversaries at the same time, who must be deterred differently.” ­­ — Admiral Charles Richard, Senate Committee on Armed Services, April 20, 2021.

  • [T]his is NOT the time for the US to cancel the sea-launched nuclear cruise missile (SLCM-N), as President Joe Biden plans to do.

  • Meanwhile, Biden’s proposed defense budget risks speeding the US to defeat by insufficiently taking into account the current skyrocketing inflation, as acknowledged in early April by Chairman of the Joint Chiefs of Staff Gen. Mark Milley, Defense Secretary Lloyd Austin and Pentagon comptroller Mike McCord. “This budget assumes an inflation rate of 2.2%, which is obviously incorrect because it’s almost 8%,” said Milley. “Because the budget was produced quite a while ago, those calculations were made prior to the current inflation rate.”

  • “Nearly every dollar of increase in this budget will be eaten by inflation. Very little, if anything, will be left over to modernize and grow capability.” — Representative Mike Rogers, (R-Ala.) House Armed Services Committee, Defense News, April 5, 2022.

  

  When the Pentagon assessed China’s nuclear arsenal in its annual report to Congress on China’s military power in November 2020, it projected that China’s nuclear warhead stockpile, which the Pentagon then estimated to be in the low 200s, would “at least double in size” over the next decade. The Pentagon also estimated that China was “pursuing” a “nuclear triad”, meaning a combination of land-, sea- and air-based nuclear capabilities.

  Just one year later, in November 2021, the Pentagon found itself acknowledging that China’s nuclear buildup was taking place at an astonishing speed, with the nuclear warhead stockpile now possibly quadrupling from the estimated low 200s in 2020 over the next decade:

  “The accelerating pace of the PRC’s nuclear expansion may enable the PRC to have up to 700 deliverable nuclear warheads by 2027. The PRC likely intends to have at least 1,000 warheads by 2030, exceeding the pace and size the DoD projected in 2020.”

  In addition, China is no longer merely “pursuing” a nuclear triad but appears to have already achieved the basics of it:

  “The PRC has possibly already established a nascent ‘nuclear triad’ with the development of a nuclear-capable air-launched ballistic missile (ALBM) and improvement of its ground and sea-based nuclear capabilities.”

  China, according to the report, is also “constructing the infrastructure necessary to support this force expansion, including increasing its capacity to produce and separate plutonium by constructing fast breeder reactors and reprocessing facilities,” while “building hundreds of new ICBM silos, and is on the cusp of a large silo-based ICBM force expansion comparable to those undertaken by other major powers.”

  The accelerating pace of China’s nuclear buildup is concerning in itself, but even more so given that the military buildup constitutes just one, but significant, part of China’s general military buildup and modernization. Last summer, for instance, China tested its first hypersonic weapon. In space, China is putting up satellites at twice the rate of the United States and “fielding operational systems at an incredible rate,” according to General David Thompson, the Space Force’s first vice chief of space operations. China and Russia’s combined in-orbit space assets grew approximately 70% in just two years, following a more than 200% increase between 2015 and 2018 according to Kevin Ryder, Defense Intelligence Agency senior analyst for space and counterspace in the U.S.

  According to General Mark Milley, chairman of the U.S. Joint Chiefs of Staff:

  “If you look at, again, 40 years ago, they had zero satellites…They had no ICBMs…They had no nuclear weapons… They had no fourth or fifth-generation fighters or even more advanced fighters, back then… They had no navy…They had no sub-force. Look at what they have today… So if you look at the totality, this test [of a hypersonic weapon] that occurred a couple weeks ago, is only one of a much, much broader picture of a military capability with respect to the Chinese. That is very, very significant. We’re witnessing one of the largest shifts in global geostrategic power that the world has witnessed.”

  According to Timothy Heath, a senior international and defense researcher at the Rand Corporation think tank:

  “It’s important to see the modernizing nuclear arsenal as part of the bigger picture, in which the Chinese are building up their military capabilities in space, cyberspace, and in the conventional force. It’s all happening at the same time.”

  On April 20, 2021, U.S. Strategic Command’s chief Admiral Charles Richard made it clear in testimony to the Senate Armed Services Committee that China is no longer a lesser nuclear threat than Russia:

  “While China’s nuclear stockpile is currently smaller (but undergoing an unprecedented expansion) than those fielded by Russia and the United States, the size of a nation’s weapons stockpile is a crude measure of its overall strategic capability. To fully assess the China threat, it is also necessary to consider the capability of the associated delivery system, command and control, readiness, posture, doctrine and training. By these measures, China is already capable of executing any plausible nuclear employment strategy within their region and will soon be able to do so at intercontinental ranges as well. They are no longer a ‘lesser included case of the pacing nuclear threat, Russia.” (Emphasis in original).

  China’s nuclear acceleration is not all, however. There is now as well the added probability of China and Russia engaging in military coordination: In February, the two powers declared that they were entering into a strategic partnership of “no limits” and with “no forbidden areas” in an agreement that they said was aimed at countering the influence of the United States.

  This cooperation has already seen China undermining Western sanctions on Russia and supplying Russian President Vladimir Putin with the lifeline he needs to continue his war in Ukraine. China has not only supplied material support through a variety of deals with Russia, it has also refrained from condemning Russia’s invasion and has criticized the sanctions.

  In March, Chinese Foreign Minister Wang Yi called Russia the “most important strategic partner” for China.

  “No matter how perilous the international landscape, we will maintain our strategic focus and promote the development of a comprehensive China-Russia partnership in the new era… The friendship between the two peoples is iron clad.”

  On April 19, China reassured Russia that it will continue to increase “strategic coordination.”

  China-Russia cooperation is going to affect US strategic deterrence. Admiral Richard told the Senate Armed Services Committee in early March that the US needs to have plans for scenarios in which the two powers cooperate militarily, adding:

  “I’m very concerned about what opportunistic aggression looks like. I’m worried about what cooperative aggression looks like… We do not know the endpoints of where either of those other two are going either in capability or capacity. We’re just now starting to work out what three-party stability looks like, what three-party deterrence dynamic works out.”

  In his April 20, 2021 testimony to the Senate Armed Services Committee, Richard said:

  “For the first time in our history, the nation is on a trajectory to face two nuclear-capable, strategic peer adversaries at the same time, who must be deterred differently. We can no longer assume the risk of strategic deterrence failure in conflict will always remain low.”

  In the light of China’s accelerating nuclear buildup — and the nuclear threat that Russia poses with its thousands of tactical nuclear weapons — this is NOT the time for the US to cancel the sea-launched nuclear cruise missile (SLCM-N), as President Joe Biden plans to do.

  The missile, according to the Wall Street Journal, “is considered a ‘tactical’ nuclear weapon that has a lower yield than ‘strategic’ options and might be used on battlefield targets. The missile could be launched from submarines or destroyers” and “is needed to deter Russia and others” and, according to the article, would also be useful “in dissuading China from using a nuke on Taiwan, without the longer and fraught debate of, say, putting American nuclear weapons on Japanese soil… [and] reduce proliferation at a volatile moment.”

  The acceleration of China’s nuclear and military modernization, and the new situation of tri-polar deterrence that the U.S. finds itself in for the first time, necessitate increases in US military research and development, acquisition and procurement. Meanwhile, Biden’s proposed defense budget risks speeding the US to defeat by insufficiently taking into account the current skyrocketing inflation, as acknowledged in early April by Gen. Milley, Defense Secretary Lloyd Austin and Pentagon comptroller Mike McCord. “This budget assumes an inflation rate of 2.2%, which is obviously incorrect because it’s almost 8%,” Milley noted. “Because the budget was produced quite a while ago, those calculations were made prior to the current inflation rate.”

  “Nearly every dollar of increase in this budget will be eaten by inflation,” Representative Mike Rogers (R-Ala), a member of the House Armed Services Committee, said. “Very little, if anything, will be left over to modernize and grow capability.”

  Tyler Durden
  Tue, 05/10/2022 – 23:25

• US Consumer Debt Accelerates Towards $16 Trillion
  US Consumer Debt Accelerates Towards $16 Trillion

  According to the Federal Reserve (Fed), U.S. consumer debt is approaching a record-breaking $16 trillion. Critically, as Visual Capitalist’s Marcus Lu details below, the rate of increase in consumer debt for the fourth quarter of 2021 was also the highest seen since 2007.

  This graphic provides context into the consumer debt situation using data from the end of 2021.

  

  Housing Vs. Non-Housing Debt

  The following table includes the data used in the above graphic. Housing debt covers mortgages, while non-housing debt covers auto loans, student loans, and credit card balances.

  

  Trends in Housing Debt

  Home prices have experienced upward pressure since the beginning of the COVID-19 pandemic. This is evidenced by the Case-Shiller U.S. National Home Price Index, which has increased by 34% since the start of the pandemic.

  Driving this growth are various pandemic-related impacts. For example, the cost of materials such as lumber have seen enormous spikes. We’ve covered this story in a previous graphic, which showed how many homes could be built with $50,000 worth of lumber. In most cases, these higher costs are passed on to the consumer.

  Another key factor here is mortgage rates, which fell to all-time lows in 2020. When rates are low, consumers are able to borrow in larger quantities. This increases the demand for homes, which in turn inflates prices.

  Ultimately, higher home prices translate to more mortgage debt being incurred by families.

  No Need to Worry, Though

  Economists believe that today’s housing debt isn’t a cause for concern. This is because the quality of borrowers is much stronger than it was between 2003 and 2007, in the years leading up to the financial crisis and subsequent housing crash.

  In the chart below, subprime borrowers (those with a credit score of 620 and below) are represented by the red-shaded bars:

  

  We can see that subprime borrowers represent very little (2%) of today’s total originations compared to the period between 2003 to 2007 (12%). This suggests that American homeowners are, on average, less likely to default on their mortgage.

  Economists have also noted a decline in the household debt service ratio, which measures the percentage of disposable income that goes towards a mortgage. This is shown in the table below, along with the average 30-year fixed mortgage rate.

  

  While it’s true that Americans are less burdened by their mortgages, we must acknowledge the decrease in mortgage rates that took place over the same period.

  With the Fed now increasing rates to calm inflation, Americans could see their mortgages begin to eat up a larger chunk of their paycheck. In fact, mortgage rates have already risen for seven consecutive weeks.

  Trends in Non-Housing Consumer Debt

  The key stories in non-housing consumer debt are student loans and auto loans.

  The former category of debt has grown substantially over the past two decades, with growth tapering off during the pandemic. This can be attributed to COVID relief measures which have temporarily lowered the interest rate on direct federal student loans to 0%.

  Additionally, these loans were placed into forbearance, meaning 37 million borrowers have not been required to make payments. As of April 2022, the value of these waived payments has reached $195 billion.

  Over the course of the pandemic, very few direct federal borrowers have made voluntary payments to reduce their loan principal. When payments eventually resume, and the 0% interest rate is reverted, economists believe that delinquencies could rise significantly.

  Auto loans, on the other hand, are following a similar trajectory as mortgages. Both new and used car prices have risen due to the global chip shortage, which is hampering production across the entire industry.

  To put this in numbers, the average price of a new car has climbed from $35,600 in 2019, to over $47,000 today. Over a similar timeframe, the average price of a used car has grown from $19,800, to over $28,000.

  Tyler Durden
  Tue, 05/10/2022 – 23:05

• More Direct Links Confirmed Between Saudi Arabia & 9/11 Hijackers In Latest FBI Document Dump
  More Direct Links Confirmed Between Saudi Arabia & 9/11 Hijackers In Latest FBI Document Dump

  Authored by Brian McGlinchey via Stark Realities,

  Over the past several months, the FBI released thousands of pages of material relating to its investigation of Saudi government links to the 9/11 attacks. This wave of declassifications was pursuant to Executive Order 14040, which President Biden issued on Sept. 3 under pressure from more than 1,800 survivors, family members and first responders who threatened to protest his presence at memorial events if he didn’t make good on a 2020 campaign promise to boost 9/11 transparency.

  The published documents are riddled with redactions, but a Stark Realities review of the trove has uncovered two instances in which the FBI neglected to redact names of interest to FBI investigators—and to attorneys representing 9/11 victims and insurers in their civil suit against the Kingdom of Saudi Arabia.

  The first inadvertently-published name is “Mana.” A sworn declaration from a former FBI agent suggests the full name is of this individual is Ismail “Smail” Mana, who worked at the Saudi consulate in Los Angeles at the time the first two 9/11 hijackers arrived in the city.

  The FBI concluded that, on February 1, 2000, Mana met at the consulate with a Saudi man, Omar al-Bayoumi, who would—later that same day—meet Khalid al-Mihdhar and Nawaf al-Hazmi, the first two hijackers to arrive in the United States, take them under his wing and facilitate their transition into American residency in San Diego.

  The second mistakenly-published name is “Johar,” who’s described as having been “tasked” by Saudi consulate official Fahad al-Thumairy to pick up the same two hijackers at the airport and “take care of them during their time in Los Angeles.” The same former FBI agent’s declaration suggests the full name of this person is Mohammed Johar.

  There’s a lot about 9/11 that we still don’t know. Consider Omar al-Bayoumi, a Saudi national who got two of the hijackers situated in San Diego. Was he working for Saudi intelligence? Yes he was, according to newly declassified FBI docs… 🧵/1 https://t.co/9p0msHyyHw

  — Mattathias Schwartz (@Schwartzesque) May 5, 2022

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

  Each name is concealed on the first reference in a paragraph about them, but then left unredacted on a single subsequent reference.

  According to the redaction key that accompanies the released documents, both names were to be withheld as “information restricted from public release under the Privacy Act of 1974.” The names were, however, to be produced in the 9/11 civil suit, with attorneys bound to maintain their secrecy. The Department of Justice has yet to respond to a request for comment; this story will be updated if it does.

  Note: FBI documents are not evidence; assertions in FBI documents may prove false; behavior that appears suspicious may have a benign explanation; and association with the hijackers doesn’t equate to foreknowledge of their intentions.

  Saudi Consulate Employee Smail Mana Said to Have “Extremist Views” 

  Mana’s name appears in a March 20, 2014 document summarizing the status of Operation Encore, a once-secret investigation into Saudi government links to the 9/11 attacks launched in 2007.

  Mana is described as “an individual who was known to have extremist views” and who “has never provided adequate explanation…of his role aiding Bayoumi in facilitating the hijacker’s arrival and settlement in California.” The paragraph where his name is revealed appears elsewhere in the trove of documents—but the same reference is redacted.

  

  “Mana” is thoroughly redacted in this document

  

  Former FBI Special Agent Catherine Hunt referenced this paragraph—which had already been released with Mana’s name redacted—in a 2018 sworn declaration on behalf of the 9/11 plaintiffs.

  “I believe Smail Mana is the individual referenced in the paragraph and that the FBI has evidence that he met with al-Bayoumi at Saudi Arabia’s Los Angeles Consulate on February 1, 2000, just prior to the meeting of al-Bayoumi with the hijackers at the Mediterranean restaurant,” she wrote.

  Hunt interviewed Johar as part of her post-FBI work as a consultant for Kreindler & Kreindler LLP, one of the law firms representing 9/11 victims against Saudi Arabia. “Mr. Johar told me that he had been subpoenaed by a New York Grand Jury….the Grand Jury subpoena involved the 9/11-related investigation of an employee of Saudi Arabia working at its Los Angeles Consulate named Smail Mana aka Ismail Mana,” she wrote.

  In the trove of more than 900 documents spanning over 4,000 pages released under Executive Order 14040, there are undoubtedly other passages about Mana, but with his name properly redacted. A passage in a 2021 document describes an individual in a way that’s similar to the paragraph where Mana’s name is revealed. The redacted individual is said to be a local hire to the consulate “who may have met with al Bayoumi before his supposed chance encounter with al-Hazmi and al-Mihdhar.”

  The memorandum quotes a source who seems to describe that same individual as enthusiastically reacting to the 9/11 attacks by saying, “Isn’t it great that our brothers are fighting?” The same passage says “a phone associated with [redacted] later had contact with the support network of the hijackers in Virginia.”

  According to another document with a similarly-described, redacted investigation subject (a consulate employee questioned about meeting Bayoumi on or about February 1, 2000), a witness said the redacted individual was “very vocal against Christians, Jews and the enemies of Islam.”

  Another source referenced in that same 2016 document “stated the Saudi Consul General in LA wanted to fire [redacted] for storage and distribution of extremist Muslim literature at the consulate but Thumairy and [Mohammed] Muhanna used their influence with the Saudi government to keep [redacted] in place.” Thumairy “was part of a Saudi-based network operating out of the Embassy and Consulates that distributed funds and support to extremists, and, it appears in some case[s], terrorist organizations,” a 2009 document says.

  Muhanna, who was a diplomat at the Los Angeles consulate, is described in various other records as an “Islamic extremist associated with a radical form of Salafi ideology” who is “heavily connected/linked to Saudi Sunni extremists operating inside the U.S.”

  Thumairy and Muhanna were later removed “at the behest of the Saudi Ministry of the Interior,” according to another memorandum.

  Beyond Mana’s single named appearance in the recently-released FBI files, there are very few references to him anywhere else on the internet. One is found in a 9/11 Commission memorandum summarizing a 2003 interview of Bayoumi in Saudi Arabia. It says only that Bayoumi denied recognizing the name “Ismael Mana.” The memorandum does not explain who Mana is or why the question was asked.

  Another reference is found in a 2020 discovery ruling in the 9/11 suit against Saudi Arabia. Judge Sarah Netburn said the kingdom’s searches for documents relating to Mana’s duties and responsibilities at the consulate “were likely insufficient.”

  Bayoumi: A Linchpin in the Saudi-9/11 Investigation

  The alleged meeting between Bayoumi and Mana is of intense interest because it came within a few hours of a central event in the 9/11 plaintiffs’ case against Saudi Arabia: Bayoumi’s Feb. 1, 2000 encounter with hijackers Mihdhar and Hazmi at the Mediterranean Gourmet restaurant near the King Fahad Mosque in Los Angeles, about two weeks after their Jan. 15, 2000 arrival in the United States.

  On that day, Bayoumi traveled to Los Angeles from his home in San Diego, ostensibly to renew his visa at the Saudi consulate. FBI files say he met privately with a consulate employee—Mana, apparently—before visiting the King Fahad mosque and then the Mediterranean restaurant where he met the two men who would serve as “muscle” hijackers on American Airlines Flight 77, which struck the Pentagon.

  Soon after meeting Bayoumi, the hijackers moved to the same San Diego apartment complex where Bayoumi lived. Bayoumi co-signed the lease and secured a cashier’s check for their security deposit, for which they immediately reimbursed him in cash. Two individuals, Mohdar Abdullah and another whose name is redacted, say Bayoumi instructed them to assist Hazmi and Mihdhar during their time in San Diego. One of them told the FBI that Bayoumi said he—Bayoumi—was “responsible” for Hazmi and Mihdhar.

  Bayoumi maintains that his initial encounter with the hijackers was coincidental, and that he struck up conversation because he heard them speaking in Gulf region accents. However, key details in his version of events conflict with witness accounts; his own statements have also been inconsistent.

  At the time, Bayoumi was a “ghost employee” of a Saudi aviation company—salaried without reporting to work. A 2017 document decisively confirms a long-running suspicion about Bayoumi: “Recent source information confirmed that al Bayoumi was, at the time of the 9/11 attacks, employed as a paid cooptee of Saudi Arabian intelligence services.”

  Some, including 9/11 Commission executive director Phillip Zelikow, speculate that Bayoumi wasn’t in league with the hijackers so much as he was monitoring them on behalf of Saudi intelligence. “The information that Bayoumi might have been a paid informant…if it is true, actually tends to cut the other way,” Zelikow told Business Insider in an article published last week.

  Informed speculation about Bayoumi’s potential motivations requires an examination of his ideology. Regarding his propensity to promote extremism, the 9/11 Commission Report stated, “We have seen no credible evidence that [Bayoumi] believed in violent extremism or knowingly aided extremist groups.”

  However, a recently-released 2006 document contains a jolting characterization that’s first being reported here: The document calls Bayoumi a “9/11 financier” who provided “substantial financial support” to Sheikh Abdel Rahman Barzanjee, “the new leader of Ansar Al-Islam in Europe,” as well as to Ansar al-Islam itself.

  

  Ansar al-Islam was a Kurdish, Salafist group formed in northern Iraq by former al Qaeda and Taliban members who’d fought in Afghanistan. The group was designated as a terrorist organization by the U.S. government in 2004, and merged into ISIS in 2014.

  During his time in southern California, Bayoumi was in frequent contact with Osama Bassnan, a Saudi who was reported to have hosted a party for Sheikh Omar Abdul Rahman—aka “The Blind Sheikh”—prior to the 1993 World Trade Center bombing which led to conviction on various conspiracy charges.

  Another FBI report says Bassnan asked someone pointed questions about how anthrax and small pox are transmitted. In 2001, Bassnan asked someone if it was “true that, just prior to dying, a small pox victim suffers extreme abdominal pain.” Also in 2001, Bassnan’s wife had a book titled, “Chemical and Biological Weapons: Anthrax and Sarin.” She had tabbed a section “that showed skin coming off the body.”

  

  While living in southern California, Bassnan and his wife received checks totaling some $74,000 from Princess Haifa, the wife of Prince Bandar, a close confidant of President George W. Bush who was at the time the Saudi ambassador to the United States. Bayoumi’s wife was reported to have received money from Bandar’s wife too.

  Bassnan also received more than $10,000 from a member of the Saudi royal family who was in Houston along with a Saudi delegation for a summit meeting with Bush. Some speculate that Bassnan was in line to succeed Bayoumi in a Saudi intelligence role in California.

  In late September 2001, Bayoumi was arrested in London by New Scotland Yard and held for a few days of questioning about his assistance to Hazmi and Mihdhar. He was released without charge. A search of Bayoumi’s papers, however, yielded a page of handwritten mathematical calculations and a diagram of an airplane in flight. According to last week’s reporting by Mattathias Schwartz at Business Insider, “its existence wasn’t noted until 2007—three years after the 9/11 commission issued its final report.”

  

  A 2012 FBI analysis of the diagram—by two special agents with engineering degrees who tapped the expertise of an experienced commercial airline pilot—comes to an ominous conclusion.

  “Given a distance from a target, the altitude at that location, and the current airspeed, one could calculate the rate of descent and plug it into the computer on a plane to initiate a descent to that target,” the report says. The pilot couldn’t conceive another use for the equation.

  Entertaining a possible benign explanation, the 9/11 Commission’s Zelikow told Schwartz, “It is possible that someone working in civil aviation might have worked on such equations, for various reasons.”

  However, according to FBI files, Bayoumi’s roles in the aviation industry—outside of his no-show job in southern California—were financial in nature, with job titles like aviation fees checker, budget clerk, accounts checker and accountant. His educational background was likewise focused on finance.

  [I’m compelled to note that, outside of major media, Zelikow has been the subject of sharp criticism of his leadership of the 9/11 Commission, including from me. Zelikow’s detractors cite conflicts of interest from his close association with the exceedingly Saudi-friendly Bush administration, and a host of indications that he steered the commission away from an earnest investigation of Saudi government links to the attacks.]

  FBI Source: Johar “Tasked” with Helping Two Hijackers

  According to the FBI document in which it’s revealed, Johar “never admitted to directly being tasked by al-Thumairy” with helping the hijackers “but he did admit to spending time with and assisting al-Mihdhar and al-Hazmi with various things during their time in Los Angeles.”

  

  In her sworn declaration, former FBI Special Agent Hunt shared some of what she learned in her interview with Johar.

  “Johar assisted the hijackers with regard to their lodging during the first two weeks they were in Los Angeles,” she wrote. “Johar admitted that he took the hijackers to the Mediterranean restaurant…where the hijackers had their ‘chance meeting’ with al-Bayoumi.”

  Separately, an FBI document describes a person who “was tasked by Thumairy to assist Hazmi and Mihdhar while they were in Los Angeles.” The same paragraph quotes a redacted person as having called the hijackers “two very significant people.” It’s not clear whether the speaker was the person tasked to assist them or someone else. Continuing in that document, that same person tasked to help the hijackers— presumably Johar—reportedly told someone he was going to be taking Hazmi and Mihdhar to the Mediterranean restaurant.

  When someone asked why he’d take them there—given the poor food and service—the person “stated he just needed to take them there.” Another source noted that “people would go to that restaurant to have private meetings.”

  These two unintended public disclosures aren’t the first in the case. In May 2020, Yahoo’s Michael Isikoff was first to report the FBI accidentally revealed the name of Mussaed al-Jarrah, a mid-level official at the Saudi embassy in Washington suspected of directing support to the same two hijackers.

  Mana’s and Johar’s ultimate significance remains to be seen as the mammoth 9/11 civil suit grinds along its glacial path toward trial. However, the FBI’s inadvertent publishing of their names brings one more measure of clarity to a case shielded from public scrutiny by the U.S. government since the attacks that killed 2,977 people and changed much of the world for the worse.

  Stark Realities undermines official narratives, demolishes conventional wisdom and exposes fundamental myths across the political spectrum. Read more and subscribe at starkrealities.substack.com

  Tyler Durden
  Tue, 05/10/2022 – 22:45

• CCP Smart Satellite "Live Streamed" US Nimitz-Class Aircraft Carrier Off New York 
  CCP Smart Satellite “Live Streamed” US Nimitz-Class Aircraft Carrier Off New York 

  The Chinese Communist Party (CCP) is using an advanced intelligence-gathering satellite for hunting US aircraft carriers and other military assets worldwide, according to South China Morning Post.

  Space researcher Yang Fang and her team at DFH Satellite Co., Ltd in Hong Kong published a report in the domestic peer-reviewed journal Spacecraft Engineering that reveals China’s People’s Liberation Army (PLA) used an AI-powered satellite to detect and “live stream” the USS Harry S. Truman. 

  A remote sensing satellite, powered by artificial intelligence technology, lurked in low Earth orbit above North America on June 17 of last year and automatically detected the Nimitz-class aircraft carrier off the coast of Long Island, New York. It captured footage of the vessel conducting naval maneuvers, such as adjusting formation and making emergency maneuvers. 

  

  Fang said the satellite is incredibly powerful and can analyze hundreds of frames of high-definition images per second for strategic targets — something that would take ground-based computers much longer. And humans would struggle at this very intel-gathering task. 

  Yang’s team determined Beijing has made a breakthrough in “weight reduction” and image recognition with the algorithm that only needs about 3% of the calculation power used by traditional algorithms when conducting similar tasks. 

  The satellite is equipped with a family of AI chipsets that can perform multiple tasks, and if one chip fails, another would come online as backup and immediately take over tasks. 

  Researchers didn’t name the satellite but said it also detected and obtained positions of military assets in northeastern Australia. 

  This new type of intelligence gathering via AI-powered satellites could one day have a more significant role in decision-making for PLA commanders. Beijing believes that future warfare is through high-tech weapons aided by supercomputers. 

  The revolution in AI is crucial for PLA to enhance its weapons race with the West as a global power struggle is well underway with Washington. CCP wants to retake Taiwan, dominate the South China Sea and the East China Sea, and even become more prevalent in the Pacific. 

  Tyler Durden
  Tue, 05/10/2022 – 22:25

• "Inflation Has Peaked": Here's What To Expect In Tomorrow's CPI Report
  “Inflation Has Peaked”: Here’s What To Expect In Tomorrow’s CPI Report

  With the massively illiquid market poised on the edge of the negative gamma abyss, tomorrow’s CPI print could easily crash stocks if the number is above the consensus estimate of 8.1% (for headline, 6.0% for core), or alternatively could spark a huge bear market short squeeze. The extremely binary outcome is why there has been so little conviction and liquidity in stocks in recent days, as few traders were willing to put on material risk ahead of the print.

  So what to expect? Here, opinions differ with most forecasting that inflation will have peaked in March largely due to base effects, however, the rate of its decline from here on out is unclear.

  

  Starting first with the skeptics, surprisingly we find JPM economist Michael Feroli with one of the highest estimates – at 0.4% M/M and 8.3%Y/Y, he is above Street consensus (if below last month’s prints of 1.2% and 8.5%). In Feroli’s view that we may have one or more elevated prints before we start to see a significant decline in official measures of inflation.

  According to JPM economists, energy prices look to have come off somewhat in April following their March surge, and he believes that the energy CPI declined 0.2% in April. But this decline could be offset by another strong increase in food prices (forecast: 0.8%) and another solid gain for the ex.-food and energy core index (forecast: 0.39%).

  While JPM’s headline forecast is above consensus, its core view is below: in April, JPM expects core CPI to drop from 6.5% to a still-strong 5.9%. Here, Feroli says that while “price increases for the rent measures have been solid lately, helping push headline and core inflation higher” he thinks April increases were similar to the rent trends, with tenants’ rent up 0.47% and owners’ equivalent rent rising 0.43%. While that may be true, it is now clearly the case that asking rents have peaked and are declining on a Y/Y basis as the following chart of data from Apartment List shows. However, since the BLS owner’s equivalent rent series lags about 5-6 months, we may still see some residual increases in April and/or May. In any case, those seeking real-time trends, we have clearly hit an inflection point and the coming sharp slowdown in US consumption and/or recession, assures that within a few months, rents will stop growing on a Y/Y basis.

  

  Besides rents, vehicle prices have also cooled after an earlier surge, with price increases for new vehicles moderating in recent months and used vehicle prices turning lower.

  

  In the April CPI, JPM expects more of the same with new vehicle prices edging up 0.1% and used vehicle prices declining 2.0%. (BLS is changing its methodology starting with the April data to estimate new vehicle prices directly from transaction data from J.D. Power.)

  Compared to JPM, Bank of America is somewhat more cheerful, and looks for core CPI to rise 0.3% mom in April, which would reflect a similar increase as in March and would come in below consensus expectations of 0.4%.  Due to significantly unfavorable base effects, this would result in a sizeable cooling off in yoy inflation to 5.9% from 6.4% in March.

  Headline inflation should come in softer than core, edging up only 0.1% (0.07% unrounded) according to BofA. That’s because after boosting headline in March, energy prices are set to be a sizeable drag reflecting a decline in retail gasoline prices coupled with unfavorable seasonal factors. Meanwhile, food prices should remain hot. If BofA’s forecast proves correct, Y/Y headline inflation would drop to 7.9% from 8.5%, confirming March as the peak for Y/Y inflation.

  Next, BofA notes that the composition of core inflation is likely to look close to March, with autos inflation a drag and underlying inflation stronger. Within autos, used cars should see another sizable contraction given the signal from wholesale metrics, while new car prices may accelerate. Both JDPower forecasts and Truecar data on average transaction prices showed a strong rebound in April after price cuts for three consecutive months. Note that new car prices will receive a methodology source update that will rely on JDpower transactions data. Meanwhile, BofA expects broad price gains across goods categories amid congested supply chains and rising commodity prices.

  

  Like JPM, BofA expects continued strength in owners’ equivalent rent (OER) and rent of primary residence amid tight rental markets, with both gauges increasing 0.45% mom. Lodging prices are likely to post a modest increase after the past two months of strength. Airline fares are also expected to cool, as are broader transportation services. The latter will be underpinned by further price hikes in motor vehicle insurance. Medical care services may slow to a 0.3% clip as sequestration-related Medicare cuts are being phased in —1% in April, another 1% in July. Other major services categories should see steady gains amid tightening labor markets and rising wages.

  Next, we hear from Goldman (whose CPI forecasts were absolutely catastrophic in 2021 so take anything here with a ton of salt). The vampire squid writes that core PCE inflation has run at a 3½% annualized pace over the last two months, a substantial deceleration from the 6% pace over the prior four months. The bank expects the annualized pace to reaccelerate to 4¼% on average in Q2 before falling back to 3½% in Q3 and 3¼% in Q4.

  Here Goldman takes a quick detour to discuss the “three pillars” of its 2022 inflation forecast.

  • First, it expects inflation in supply-constrained durable goods categories to fall sharply to roughly zero on net. This accounts for the entirety of the decline in the bank’s 2022 forecast, even though it is not assuming payback for recent price spikes in these categories on net until after this year.
  • Second, Goldman thinks shelter inflation has peaked on a sequential basis but will rise above 5% on a year-on-year basis.
  • Third, Goldman expects inflation in the rest of the service sector to remain steady at just over 4% because labor market overheating is likely to keep wage pressures firm for a while (this form the same bank that in January and February said no risk of a wage price spiral).

  

  Some more details (from the bank which has a proven track record of being terrible at forecasting inflation):

  Our base case is that inflation will reaccelerate from the 3½% annualized pace of the past two months to 4¼% on average in Q2, before falling back to 3½% in Q3 and 3¼% in Q4. The left panel of Exhibit 4 shows the contributions to month-on-month (not annualized) core PCE inflation by category under our forecasts. As described earlier, declining used car prices weighed on the February and March prints, but the slowdown also reflected softer financial, health care, and food services inflation—all three of which are included in the red bars for “Other Services” in Exhibit 4. We expect financial services inflation—which saw outright declines in February and March—to increase steadily over the rest of this year as intermediation spreads rise with higher interest rates. Health care and food services inflation are also likely to reaccelerate over the next few months in response to continued wage pressures and higher agricultural commodity prices, before moderating in the back half of the year as wage growth slows modestly.

  The right panel of Exhibit 4 shows the contributions to year-on-year core PCE inflation. The lapping of last year’s large durable goods price increases means that the contribution to inflation from supply-constrained categories will shrink rapidly even in the absence of goods price deflation on a sequential basis and contribute to substantially lower core PCE inflation at year-end (we estimate 3.9% on a year-on-year basis).

  And visually

  

  Most other banks fall somewhere inbetween these observations.

  Turning to markets, it is worth noting – as the Leuthold Group has done – that after freaking out in March following the Russian invasion of Ukraine, markets have calmed down and the bond market’s one-year forward inflation expectation have fallen fall below 5% and the two-year expectation drop slightly below 4%. “Those declines are some of the strongest evidence that overall inflation has peaked”, Leuthold writes.

  

  One reason for Leuthold’s optimism is that industrial commodity prices have tumbled in the past 4 weeks (largely on the back of the latest Chinese lockdowns), and investors haven’t discounted the meanting of this shift.

  

  Of course, all of the above data does not exist in a vacuum and readers should recall that we will surely see headwinds from a monetary policy path that is intent not only on reining in inflation from here, but sparking a gentle recession in the US.

  Sure enough, there was a distinct flip in the market today, because while bond proxies (such as financials, utilities and real estate) got hammered, bond yields tumbled. Meanwhile, industrials and Consumer Discretionary stocks are also lagging behind, which according to Goldman suggests that “the market narrative may be slowly shifting towards concerns of just a recession, not the stagflation (a recession plus inflation) concerns that have dominated market direction lately.”

  That last sentence is key, because if indeed the Fed succeeds in sparking a recession in the near future, then all of the above is irrelevant and inflation will soon transform into deflation, unleashing the next easing cycle and QE.

  Tyler Durden
  Tue, 05/10/2022 – 22:05

• Watch: "Terrifying" Chinese Super Drones That Can "Hunt Humans In Packs" Are Here
  Watch: “Terrifying” Chinese Super Drones That Can “Hunt Humans In Packs” Are Here

  Video of what are being called “Chinese super drones” has emerged over the past week, and the footage is being described as “terrifying”.

  Footage of 10 lightweight drones made its way into the ether this past week thanks to a team at Zhejiang University, who released the video. It shows the drones bobbing and weaving through heavily wooded areas, moving swiftly amidst foliage. 

  The drones take direction from an algorithm that helps them chart their surroundings in real time, The Sun wrote in an article about the video. Their internal software updates “every few milliseconds”, which helps them avoid colliding with other objects.

  

  The article also notes that since they don’t run on GPS, they can be deployed in areas with poor satellite coverage. 

  That’s all good and well – but the “terrifying” response to the video came when the same team at Zhejiang University released video of the drones chasing a man through a forest of trees. After being instructed to keep focus on the man, they are able to follow him – even after he hides behind objects. 

  “The swarms’ capability of navigation and coordination in these films has attracted and inspired numerous researchers. Here, we take a step forward to such a future,” researchers in the journal Science Robotics commented. Dr Jonathan Aitken from Sheffield University praised the progress as an “excellent achievement”. 

  

  He added: “To achieve a quality map, built from a distributed collection of robots, of the detail demonstrated is an excellent piece of engineering. To couple this with the additional successful navigation and avoidance of obstacles, and critically other members of the swarm, is an excellent achievement.”

  Paul Scharre, former senior Pentagon official and expert on drone warfare, concluded by noting how well China’s drone programs were coming along. 

  “We can’t see from the Chinese video whether the drones are communicating and co-ordinating with each other,” he said. “It could just be a launch of drones like the launch of missiles from a multiple-launch rocket system. However, the test shows that China is developing swarm drone systems and they could be operational in a few years.”

  You can watch video of the drones, via The Telegraph, here:

  Tyler Durden
  Tue, 05/10/2022 – 21:45

• House Conservatives Ready Law-And-Order Agenda Ahead Of Midterms
  House Conservatives Ready Law-And-Order Agenda Ahead Of Midterms

  Authored by Philip Wegmann via RealClear Politics,

  Crime is on the rise around the country, the midterm elections are fast approaching, and the largest bloc of House conservatives is preparing a comprehensive package of law-and-order legislation.

  

  The Republican Study Committee, led by Indiana Rep. Jim Banks, has catalogued every GOP argument about crime in the last two years and distilled it into a single memo to lay at the feet of President Biden. The murder rate is up. So are violence against law enforcement, drug seizures, aggravated assault, grand theft auto, and domestic violence.

  All of it, as the RSC sees it, is the result of “the left’s crime wave.” The solution then, according to a memo obtained exclusively by RealClearPolitics, is to make federal funding conditional on states’ adoption of “certain pro-law enforcement measures,” or what Banks calls the “Concerned Citizens Bill of Rights.”

  The document comes just six months before the midterms, and crime was always going to play a significant role in those contests. Voters fed up with lawlessness made Eric Adams mayor of New York City, and crime continues to upstage more progressive priorities in traditionally liberal contests, like the Los Angeles mayoral race. Even outside of major metropolises, Americans believe crime is getting worse. According to Gallup, a majority (53%) say they personally worry a “great deal” about crime. It now ranks third in their top concerns, behind only inflation and the economy.

  Banks and House Republicans argue that the uptick stems from a spate of progressive prosecutors who’ve been bankrolled by liberal money and the Defund the Police movement, which call it “one of the greatest dangers to public safety in our nation’s history.” Despite Biden’s condemnation of the “defund” rhetoric from his left flank, they still say the president and his party own the carnage that comes from adhering to that philosophy.

  “From the White House to liberal state and local governments, there has been a systemic failure to contain crime in America. It stems from the dangerous belief that enforcing the law is somehow morally wrong or even racist. It has paralyzed law enforcement agencies at all levels and created prosecutors who would rather let a dangerous criminal walk out of jail than enforce the law,” the memo reads.

  None of this is new. Republicans are always eager to lean into their traditional branding as the party of law and order. For instance, the memo states that “once, again, Democrats have broken a part of our civil society.” But unlike Senate Minority Leader Mitch McConnell, the RSC led by Banks has rejected the idea of just playing the opposition until November. “Crime is at an unacceptable level and Americans are desperate for solutions,” the memo states. “They need to know that Conservatives have a plan to make them safe.”

  This time, those plans go beyond anti-liberal rhetoric. Republicans are laying a legislative agenda. And the plan in the RSC memo is the most comprehensive picture voters have to date for how Republicans will seek to tackle crime if they retake the majority. First and foremost, the “Concerned Citizens Bill of Rights” is fiduciary in nature. Conservatives would use congressional purse strings to close the net on states and local authorities they believe “promote the left’s pro-criminal agenda.”

  Among other things, this means withholding money from states “when their district attorneys’ offices systematically decline to prosecute types of cases or charge certain crimes,” and also cutting off federal dollars “to states that have ‘no-cash bail’ laws on the books.” The RSC would also tie strings to federal funding, perhaps largest among them the condition that state and local police departments open their books and report all crimes to the FBI’s Uniform Crime Reporting Program.

  The memo also details 10 other proposed reforms, each of them almost certain to trigger a showdown with the White House.

  A Republican majority would pressure the DOJ to reinstate the Trump administration policy of federal prosecutors charging offenders with the highest offense rather than lesser ones, reversing a tactic they say the current administration is using to “skirt mandatory minimums.” At the same time, lawmakers would press Attorney General Merrick Garland to reverse course and limit the use of consent decrees.

  Another top priority if the GOP retakes control and if the RSC gets its way: codifying qualified immunity for police officers. The memo also calls for new legislation that would create new criminal offenses for killing or assaulting law enforcement officers.

  Other priorities include traditional calls for “enhancing penalties against violent, repeat offenders,” specifically when it comes to drug traffickers. They call for Fentanyl to be permanently listed as a Schedule I drug and for consideration of “stronger penalties for this particularly deadly drug, even life in prison.”

  There are also new reforms tailored to current conservative passions such as “holding Big Tech accountable when it facilitates or is complicit in criminal activity,” and seeking to stem the flow of tax dollars to any public schools that advance “anti-police education.”

  While House conservatives pay lip service to the idea that Congress “should be constrained by the principles of federalism” when pursuing their anti-crime agenda, they are eager to flex federal muscles. At least, that is, when it comes to governing Washington, D.C.

  Citing the city’s 226 homicides and sharp uptick in overall crime, they believe Congress should take an increased role in how D.C. polices its streets. They hold out as a tantalizing possibility using the federal city as an example for the nation of “how abandoning pro-criminal policies can increase public safety.”

  Again, all of this is aspirational. None of it stands any chance of becoming law unless Republicans retake both chambers of Congress. Even then, it almost certainly means a showdown with the White House. But the conflict of visions is precisely the point. The RSC wants voters to see what the GOP plans to do if they return to power, and here conservatives are leading.

  The Republican Study Committee under Banks has returned to its role serving as the in-house think tank for the GOP. The conservative group has also thrown its weight around. The RSC, which counts more than 150 lawmakers as members, has spent its time in the minority pushing Republican brass to the right. Banks lobbied Minority Leader Kevin McCarthy to make the GOP more of a “working class party.” Now the group has put pen to paper outlining how they’d tackle crime.

  Tyler Durden
  Tue, 05/10/2022 – 21:25

• Landlords And Corporations Are Renovating Their Office Spaces For "Hybrid" Work
  Landlords And Corporations Are Renovating Their Office Spaces For “Hybrid” Work

  After years of employees working from home thanks to the pandemic, some companies and commercial landlords are finding it difficult – and even unnecessary – to bring workers and new tenants “back to the office” the way they were prior to Covid.

  This has resulted in landlords modifying workspaces and some corporations renovating their already existing office space to become “hybrid” workspace, according to a new article by Bisnow. The publication reported this week that supply chain issues and rising rates are likely also helping fuel the move. 

  Even architects are paying attention to the new changes. American Institute of Architects Chief Economist Kermit Baker said this week that firms are making more income from renovating existing workspaces than from building new ones. “Architecture firms are drowning in work,” he said. 

  CBRE Global Head of Occupier Thought Leadership Julie Whelan noted that there is an “onslaught” of renovations taking place, as landlords look to change their properties to appeal to future tenants and existing tenants modify their workspaces.

  

  767 Third Avenue, for example, is about to be in the midst of a “wholesale demo”, led by Sage Realty, and costing $53 million. This renovation will allow for “a new lobby space and a reworked amenities program for tenants, including a library, terrace garden, cafés and communal spaces,” according to the report. The hope is to attract boutique companies and maximize space for amenities for tenants. 

  CEO Jonathan Iger commented: “The mindset right now is that you have to be reinvesting in your property. It’s about how you define quality.”

  Another major renovation is being led by Brookfield and WatermanClark, who are investing $100 million into renovating the midcentury Lever House in Manhattan. Chicago’s Merchandise Mart and Boston’s One Post Office Square are also getting multi-million dollar renovations. 

  Baker continued, stating of the demand for work: “They’re so busy they’re having trouble finding staff, and there are project backlogs. The pipeline for new architects isn’t as quick and easy to expand as other professions.”

  Whelan concluded: “Office construction is falling off a cliff. All that work going into a new build is going into renovating space now. Very few will take a risk with the way the debt market is now.”

  “Real estate has never moved quickly. That’s the nature of the beast. Frankly, it never had to, with long-term leases. And the pandemic turned that on its head. It’s an inflection point, and you need to do it or buildings will just become obsolete.” 

  Tyler Durden
  Tue, 05/10/2022 – 21:05

• These 20 States Threaten Legal Action Over Biden's 'Ministry Of Truth'
  These 20 States Threaten Legal Action Over Biden’s ‘Ministry Of Truth’

  Via Organic Prepper’s Daisy Luther – author of Prepper’s Pantry and The Blackout Book,

  The attorneys general of 20 states have threatened legal action against the US government unless they disband the newly formed Disinformation Governance Board.

  We shared with you recently an article about the people behind the DGB, who have a history of trying to curb dissenting speech by calling it “disinformation.” We here at the OP have been the targets of censorship before and would not be surprised to see more of the same. (Here’s how we’re meeting the possibility of further oppression head-on.)

  It turns out that we’re not the only ones concerned about this.

  

  What’s being done?

  In a letter addressed to DHS Secretary Alejandro Mayorkas, the Attorney General of Virginia, Jason Miyares, spoke for the AGs of 19 other states and shared his concerns about the overreach.

  The letter was acquired by ReclaimtheNet.org.

  As the chief legal officers of our respective States, we, the undersigned Attorneys General, are tasked not just with enforcing the laws but with protecting the constitutional rights of all our citizens. Today we write you to insist that you immediately cease taking action that appears designed exclusively for the purpose of suppressing the exercise of constitutional rights.

  Every American knows that the Constitution forbids the government to “abridg[e] the freedom of speech.” US Const. Amend. I. As Justice Robert Jackson wrote nearly eighty years ago, “[i]f there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion.” West Virginia State Bd. of Educ. v. Barnette, 319 US 624, 642 (1943).

  Your recent testimony before the US House Appropriations Subcommittee on Homeland Security, however, indicated that the Department of Homeland Security, under your leadership, is doing exactly that: prescribing orthodoxy by slapping a federal-government label of “disinformation” or “misinformation” on speech that government bureaucrats, operating behind closed doors, decree to be improper. This is an unacceptable and downright alarming encroachment on every citizen’s right to express his or her opinions, engage in political debate, and disagree with the government. The Biden Administration’s latest effort to decide what speech is “acceptable” and “orthodox” combines McCarthyite speech policing with the secrecy of the English Star Chamber.

  In short, you seem to have misunderstood George Orwell: the “Ministry of Truth” described in 1984 was intended as a warning against the dangers of socialism, not as a model government agency. “MiniTru” and its thuggish apparatchiks are the villains in that story, not the heroes. For the sake of our democracy, you must immediately disband the “Disinformation Governance Board” and cease all efforts to police Americans’ protected speech. The existence of the Disinformation Governance Board will inevitably have a chilling effect on free speech. Americans will hesitate before they voice their constitutionally protected opinions, knowing that the government’s censors may be watching, and some will decide it is safer to keep their opinions to themselves.

  The resulting damage to our political system and our culture will be incalculable: as a democracy, our political debates and decisions are supposed to take place in the public square, where every citizen can participate, rather than in government office buildings where hand-picked and unaccountable partisan committees are insulated from public supervision and criticism.

  (Read the rest of the letter here.)

  The letter goes on to question the timing of the new Ministry of Truth (just as Elon Musk completes the purchase of Twitter with the stated goal of restoring free speech on the platform). It also calls into question the dubious qualifications of head honcho, Nina Jancowiz, who AG Miyares describes as “often in error but never in doubt.”

  How will the AGs enforce this?

  In a firmly worded promise, Miyares concludes:

  Unless you turn back now and disband this Orwellian Disinformation Governance Board immediately, the undersigned will have no choice but to consider judicial remedies to protect the rights of their citizens.

  We sincerely hope this puts a halt to the censorship efforts of the Biden administration.

  Who signed the letter?

  The letter was signed by the attorneys general of 20 states. We hope that other states follow in their footsteps to protect this vital constitutional right. (Contact your state’s AG and let them know you support them or want them to get on board, too!)

  The following AGs signed the letter.

  1. Jason S. Miyares, Virginia (the author of the letter)

  2. Steve Marshall, Alabama

  3. Mark Brnovich, Arizona

  4. Leslie Rutledge, Arkansas

  5. Ashley Moody, Florida

  6. Christopher M. Carr, Georgia

  7. Todd Rokita, Indiana

  8. Derek Schmidt, Kansas

  9. Daniel Cameron, Kentucky

  10. Jeff Landry, Louisiana

  11. Lynn Fitch, Mississippi

  12. Eric Schmitt, Missouri

  13. Austin Knudson, Montana

  14. Douglas J. Peterson, Nebraska

  15. David Yost, Ohio

  16. John M. O’Connor, Oklahoma

  17. Alan Wilson, South Carolina

  18. Ken Paxton, Texas

  19. Sean D. Reyes, Utah

  20. Patrick Morrisey, West Virginia

  Will this effort gain any traction with the DHS and the current administration? We are not holding our breath.

  *  *  *

  Want uninterrupted access to The Organic Prepper? Check out our paid subscription newsletter.

  Tyler Durden
  Tue, 05/10/2022 – 20:45

• IRS Paying Billions In Interest On Millions Of Delayed Tax Returns
  IRS Paying Billions In Interest On Millions Of Delayed Tax Returns

  The IRS is paying interest on overdue refunds to the tune of 4%, up 1% from the prior quarter, according to the Wall Street Journal, which notes that’s more than half of what a money-market or a savings account is currently paying.

  

  The backlogged agency has 45 days to process a tax return and issue a refund, after which interest begins accumulating. In 2021, they paid $3.3 billion in interest, which was 3x the amount paid in 2015, according to the Government Accountability Office.

  “It’s not a small amount of money,” said Jessica Lucas-Judy, director of tax issues at GAO. “If there’s some way to avoid some of these payments, that’s probably a good thing.”

  The IRS has been moving slower than usual to process tax returns. Administration officials say that is the result of years of Republican-backed budget cuts. Republicans say the agency hasn’t given priority to taxpayer service. Some recent years have been particularly difficult. In fiscal 2019, the aftermath of a government shutdown caused a backlog. The IRS slowed again when the coronavirus pandemic began in 2020 and is still months behind schedule in processing paper returns.

  As of April 29, the IRS has 9.6 million unprocessed individual tax returns, some from tax year 2020 and some from 2021. The agency says it is taking more than 20 weeks to handle amended tax returns and hopes to catch up on all of its processing backlogs by the end of 2022. -WSJ

  The $3.3 billion in 2001 interest payments works out to around 1/4 of the cost to run the IRS, however the interest payments don’t come out of the tax agency’s budget.

  According to the GAO, the IRS isn’t being proactive enough about excessive interest payments.

  “IRS does not fully understand the causes for refund interest payments—both within and outside of its control—and therefore cannot communicate this information to Treasury and Congress,” the GAO wrote.

  The IRS’s answer? ‘it’s complicated.’

  The agency notes that interest rates vary over time, and that payments can’t be analyzed in a vacuum. In other cases, costs aren’t the agency’s fault, but are instead required by law.

  “Our role is to administer the Tax Code as it is enacted,” said Douglas O’Donnell, deputy commissioner for services and enforcement. “We do not believe the amount of interest paid is a reliable or meaningful business measure.”

  According to Nina Olson, the government needs a technology upgrade that would allow for more automated processing of returns prepared with tax software, but are printed out on paper for a physical submission.

  “I don’t think the IRS shrugs it off,” said Olson, adding “It’s just that we have had two and now three filing seasons that have been abnormal.”

  Tyler Durden
  Tue, 05/10/2022 – 20:25

• How Federal Student-Loans Create College-Rankings Scandals
  How Federal Student-Loans Create College-Rankings Scandals

  Authored by Preston Cooper via RealClear Education (emphasis ours),

  A whistleblower lawsuit filed last month alleges that Rutgers University’s business school artificially boosted its rankings by using a temp agency to hire MBA graduates and place them into “sham positions at the university itself,” according to NJ.com, which first reported the news. Though shocking, the scandal is the natural result of the incentives the federal government has set up for schools through uncapped student loan subsidies for graduate programs.

  

  Rutgers has denied the charges. But the allegations are credible when considering the source: the lawsuit was filed by Deidre White, the human resources manager at Rutgers’ business school. Days later, a separate class-action lawsuit was filed by one of Rutgers’ MBA students.

  Last year Rutgers was ranked first among public business schools in the northeast by Bloomberg Businessweek. One wonders how many students, hoping for a degree that would boost their employability, may have been deceived by that rosy statistic.

  The scandal follows similar incidents at other universities. The University of Southern California withdrew from the U.S. News & World Report graduate education school rankings due to “inaccuracies” in its reported data stretching back for years. And earlier this year, the dean of Temple University’s business school was sentenced to more than a year in prison for submitting false data to U.S. News.

  Why would university officials risk prison time to manipulate their rankings? The answer is that graduate degrees—especially master’s degrees—are increasingly becoming a cash cow for universities. Though federal loans to dependent undergraduate students are capped at $31,000, loans to graduate students are effectively unlimited.

  Many schools have vastly expanded their graduate school offerings to soak up this stream of cash. The number of master’s degrees conferred annually has risen 41% since 2006, when unlimited loans for graduate students were introduced. Over the past decade, universities have added more than 9,000 new master’s degree programs.

  The master’s-degree bonanza shows no sign of tapering off. While the number of students pursuing higher education has dropped 6% overall since the beginning of the pandemic, enrollment in master’s degree programs has moved in the opposite direction, surging by nearly 6%.

  Predictably, this has led to a surge in graduate student debt. In 2019-20, 43% of all federal student loans issued were for graduate education, up from 33% at the beginning of the decade. Rutgers itself gets over half of its federal student loan funding from graduate programs. For many prominent universities, undergraduate education is old news—graduate programs are where the real money is.

  Unfortunately, much of this federal largesse finances programs of questionable financial value. According to my estimates of return on investment, 40% of master’s degrees do not provide their students with an increase in earnings large enough to justify their costs. Among MBAs and other business-related master’s degrees, the share of nonperforming programs rises to 62%. Perhaps that reality is a reason that so many graduate schools feel the need to fudge rankings data.

  Many graduate borrowers will strain under the weight of debt that the federal government so freely gave out. But taxpayers will pick up a large share of the burden as well. Most graduate borrowers are eligible for income-based repayment programs which limit their monthly payments and grant loan cancelations after a set period of time. The Congressional Budget Office estimates that more than half of graduate loans issued in 2022 and repaid on income-based plans will eventually be discharged.

  The student loan payment pause has also transferred many of the costs of graduate school from borrowers to taxpayers. The Committee for a Responsible Federal Budget estimates that the average master’s degree holder has already received over $13,000 of effective loan forgiveness through canceled interest payments and excess inflation during the pause. These factors, plus the possibility of additional loan forgiveness in the future, allow universities to hint that students might not have to pay the full cost of their education—and makes it easier to sell them on expensive master’s degrees.

  The Education Department has the tools to put a stop to this racket. A regulation known as borrower defense to repayment allows students defrauded by their institutions to have their federal student loans canceled; the institution must make taxpayers whole in the event of a successful loan discharge. Initially developed by the Obama administration, the rule was aimed at for-profit colleges, but there’s no reason it couldn’t be used against a public flagship university like Rutgers. If the Education Department forced a school with provably falsified rankings data to pay off the loans of defrauded students, it would send a firm signal that this sort of behavior will not be tolerated.

  But borrower defense to repayment isn’t enough. There are plenty of federally funded master’s degree programs where institutions are not guilty of fraud, but outcomes are abysmal nonetheless. Therefore, it is also necessary for Congress to remove the incentive for universities to market bad master’s degrees in the first place: their unlimited federal funding.

  The prevalence of master’s degrees that offer little to no return on investment can be chalked up to uncapped federal student loans, which are handed out in an undiscriminating fashion, and the repayment regime that forces taxpayers to pick up the tab for unpaid loans. Universities push low-quality master’s degrees to capture the federal dollars, while students are willing to borrow thanks to the federal government’s implicit stamp of approval. End federal loans for graduate school, and most low-quality master’s degrees will vanish.

  Private lenders would be able to meet demand for the financing of quality graduate degrees, such as medicine. Reliable financial returns for these degrees mean that private lenders will jump at the chance to lend to medical students attending reputable institutions, but will be far more hesitant to pony up $180,000 for a master’s degree in film. A thriving private market for graduate student loans existed before Congress uncapped federal loans in 2006. There is no need for a federal graduate loan program when the private sector can adequately fill the role.

  The brewing scandal at Rutgers is a sign that many universities will do anything for a piece of the federal government’s unlimited graduate loan offerings. By ending federal loan subsidies for graduate programs, Congress can fix the bad incentives that led to this mess, protect students from low-quality master’s degrees, and save taxpayers a heap of money along the way.

  Preston Cooper is a research fellow in higher education at the Foundation for Research on Equal Opportunity.

  Tyler Durden
  Tue, 05/10/2022 – 20:05

• Russian Forces Unlikely To Stop After Capturing Donbas – Expect Prolonged War: Top US Intel Chief
  Russian Forces Unlikely To Stop After Capturing Donbas – Expect Prolonged War: Top US Intel Chief

  At a moment that top US intelligence officials are holding intense discussions over what “victory” might look like for Russian President Vladimir Putin – or whether or not he’s contemplating an exit from the conflict in Ukraine and under what conditions – senior Pentagon officials assess there’s been little significant progress by Russian forces in the Donbas. 

  During a Monday briefing one senior official told reporters this is due partly to low morale and “refusing to obey orders” – which is even impacting the officer corps. The officials described, “We still see anecdotal reports of poor morale of troops, indeed officers, refusing to obey orders and move and not really sound command and control from a leadership perspective.”

  

  Further the officials said that “midgrade officers at various levels, even up to the battalion level” are either refusing to follow orders or are not obeying them with the same measure of alacrity that you would expect an officer to obey,” according to The Hill.

  Given Putin’s more restrained than expected ‘Victory Day’ speech in Moscow on Monday, some Western observers have speculated that lack of any verbal assessment of how his forces are doing on the ground could be a sign of frustration. Prior to this, some thought the Russian leader aimed to declare full victory over the Donbas by the time of the May 9 commemoration events on Red Square.

  Putin had given as one of the justifications for the Feb.24 invasion during the speech that the West was “preparing for the invasion of our land, including Crimea.” This following last month his commanders appearing to narrow the operation’s objectives to liberating Ukraine’s east in particular, also as heavy fighting is now taking place in the south, increasingly focused on the port city of Odesa, where Ukraine’s navy is headquartered.

  

  On Tuesday Director of National Intelligence Avril Haines in testimony before lawmakers in the Senate said that a Russian military victory over the Donbas might not actually end the war.

  “We assess President Putin is preparing for prolonged conflict in Ukraine during which he still intends to achieve goals beyond the Donbas,” she said. “Both Russia and Ukraine believe they can continue to make progress militarily,” Haines said, adding, “we do not see a viable negotiating path forward, at least in the short term.” Additionally she testified the US intel community’s assessment that…

  • U.S. DOES NOT SEE RUSSIA USING TACTICAL NUCLEAR WEAPONS AT THIS TIME -INTELLIGENCE CHIEFS
  • RUSSIA MAY STEP UP EFFORTS TO BLOCK WESTERN WEAPONS: HAINES
  • PUTIN WOULD USE NUCLEAR ARMS ONLY IN EXISTENTIAL THREAT: HAINES
  • RUSSIA’S PUTIN LIKELY COUNTING ON U.S., EU RESOLVE IN UKRAINE TO WEAKEN -HAINES

  DNI Avril Haines tells Senate Armed Services that Russia still has maximalist goals in Ukraine, and sees the Battle of Donbas as a way to regain initiative, not merely to capture territory in the east and stop.
  Uncertain, and could change, but that signals a long, protracted war. https://t.co/B9Pgw7bcJw

  — Nicholas Grossman (@NGrossman81) May 10, 2022

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

  But one might argue that the Biden administration has from the beginning of the invasion shown little to no strategy of engaging diplomatically on any serious level to end the war. In fact, an opposite picture has emerged: while pumping billions in weapons and military aid into Ukraine, Defense Secretary Lloyd Austin said it’s America’s desire to see a “weakened” Russia due to its Ukraine offensive.

  Tyler Durden
  Tue, 05/10/2022 – 19:45

• Destroying Democracy To Save It: Democrats Lose Another Effort To Disqualify A GOP Member
  Destroying Democracy To Save It: Democrats Lose Another Effort To Disqualify A GOP Member

  Authored by Jonathan Turley,

  For two years, Democrats have been trying to disqualify dozens of Republicans from appearing on ballots for supporting the challenge to the certification of the 2020 election or declaring the election to be stolen.

  It is premised on a deeply flawed historical and legal view of a provision under the Fourteenth Amendment. In the name of democracy, these Democrats have demanded that courts prevent voters from being able to vote for incumbent members. Yet, scholars like Harvard Professor Laurence Tribe have endorsed this sweeping interpretation. It has been rejected repeatedly in the courts.

  The latest such ruling comes from the Arizona Supreme Court which ruled that Democrats could not prevent Rep. Paul Gosar (R-AZ) from appearing on the ballot in 2022.

  In the age of rage, nothing says democracy like preventing people from running for office.

  

  Last year, Democratic members called for the disqualification of dozens of Republicans. One, Rep. Bill Pascrell (D-N.J.) demanded the disqualification of the 120 House Republicans — including House Minority Leader Kevin McCarthy(R-Calif.) — for simply signing a “Friend of the Court brief” (or amicus brief) in support of an election challenge from Texas.

  These members and activists have latched upon the long-dormant provision in Section 3 of the 14th Amendment — the “disqualification clause” — which was written after the 39th Congress convened in December 1865 and many members were shocked to see Alexander Stephens, the Confederate vice president, waiting to take a seat with an array of other former Confederate senators and military officers.

  Justice Edwin Reade of the North Carolina Supreme Court later explained, “[t]he idea [was] that one who had taken an oath to support the Constitution and violated it, ought to be excluded from taking it again.” So, members drafted a provision that declared that “No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any state, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof.”

  By declaring the Jan. 6th riot an “insurrection,” some Democratic members of Congress and liberal activists hope to bar incumbent Republicans from running. Even support for court filings is now being declared an act of rebellion. House Speaker Nancy Pelosi (D-Calif.) helped fuel this movement — before Jan. 6 even occurred — by declaring that the Republicans supporting election challenges were “subverting the Constitution by their reckless and fruitless assault on our democracy which threatens to seriously erode public trust in our most sacred democratic institutions, and to set back our progress on the urgent challenges ahead.”

  This effort failed on legal grounds in seeking o bar Rep. Madison Cawthorn (R-N.C.) from running for office due to his actions related to the Jan. 6, 2021. It failed on factual grounds in seeking to bar Rep. Marjorie Taylor Greene (R., Ga.), even after a federal district court wrongly allowed a hearing to be held.

  Now the Arizona Supreme Court has ruled that not only did the challengers lack the standing to bring the case but Arizona Supreme Court Chief Justice Robert Brutinel reaffirmed that this is a power left to Congress:

  “Qualifications of its own Members,” appears to vest Congress with exclusive authority to determine whether to enforce the Disqualification Clause against its prospective members. However, we need not decide these issues because we hold that A.R.S. § 16-351(B), which authorizes an elector to challenge a candidate “for any reason relating to qualifications for the office sought as prescribed by law, including age, residency, professional requirements or failure to fully pay fines . . . ,” is not the proper proceeding to initiate a Disqualification Clause challenge. By its terms, the statute’s scope is limited to challenges based upon “qualifications . . . as prescribed by law,” and does not include the Disqualification Clause, a legal proscription from holding office. 

  The court case is Thomas Hansen v. Mark Finchem, No. cv-22-0099.

  Tyler Durden
  Tue, 05/10/2022 – 19:25

• Taco Bell Goes Woke: Launches 'Drag Brunch' Events At US Locations 
  Taco Bell Goes Woke: Launches ‘Drag Brunch’ Events At US Locations 

  Taco Bell is the latest company to embrace woke activism by rolling out “Taco Bell Drag Brunch” at select Taco Bell Cantinas across the US. 

  “Each show will be hosted by the fabulous drag performer and taco extraordinaire, Kay Sedia, and feature performances from local queens and kings that will transform any morning from Mild to Fire!” according to a recent press release from the largest fast-food Tex-Mex restaurant chain. 

  “As a brand that brings people together, the Taco Bell Drag Brunch experience is rooted in celebrating the LGBTQIA+ community and creating safe and welcoming spaces for all,” the press release continued. 

  

  The first drag event was held at a Taco Bell Cantinas in Las Vegas on May 1. Here are the upcoming events:

  • Chicago, Wrigleyville Cantina: Sunday, May 22

  • Nashville Cantina: Sunday, May 29

  • New York, Times Square Cantina: Sunday, June 12

  • Fort Lauderdale Cantina: Sunday, June 26

  Here’s a short clip of the drag bunch in Vegas. 

  Taco Bell kicked off the new drag brunch at the firm’s flagship cantina in Las Vegas. “We understand the importance of creating safe spaces for the LGBTQIA+ community.” https://t.co/ISHRgrxdCF pic.twitter.com/vl6AK2jKrz

  — USA TODAY (@USATODAY) May 6, 2022

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

  “We understand the importance of creating safe spaces for the LGBTQIA+ community and are thrilled to provide a unique experience that spotlights and celebrates the wonderful artform of drag and its influence in culture with their chosen families,” Taco Bell global chief brand officer Sean Tresvant said in a statement. 

  “Taco Bell Drag Brunch was concepted by Live Más Pride, Taco Bell’s LGBTQIA+ Employee Resource Group, which has played a major role in driving awareness of and meaningfully supporting LGBTQIA+ communities both within Taco Bell and the communities we serve and operate in,” Tresvant added. 

  Taco Bell’s drive to create “spaces for the LGBTQIA+ community” is another example of woke corporations meddling in divisive political issues and risk sparking a backlash. 

  If CEOs learned anything so far in 2022, it’s that woke corporate America is finally getting push-back. The latest example was Gov. Ron DeSantis (R-Fla.) signed a bill that strips Disney of its special tax status in Florida after defaming the governor’s “Don’t Say Gay” bill. 

  Corporations diving into woke activism can result in severe consequences — if that’s losing special tax status or even a customer base. Some Taco Bell customers lost their appetite over the announcement of taco drag brunches. 

  Just lost my appetite.

  — Tina Lawson (@TinaLaw77543903) May 8, 2022

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

  Well, did not know this until now. Another customer lost due to WOKE policies.

  — Mike O’Conner (@MikeOConner1776) May 9, 2022

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

  No thanks. I’m skipping my weekly taco bell lunch that week.

  — A Davis (@Rockvegas698) April 26, 2022

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

  Yes, since this represents around .3% of the population, this is an awesome Business model which could exclude over half of your potential current/future customers.

  — Phil_Am_Patriot (@PhilAmPatriot1) May 8, 2022

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

  Another corporate “get woke, go broke” example? 

  Tyler Durden
  Tue, 05/10/2022 – 19:05

• The Six Most Common Financial Myths People Believe
  The Six Most Common Financial Myths People Believe

  Authored by Bruce Wilds via Advancing Time blog,

  It is time to revisit six of the most common financial myths we have come to believe. Accepting any of these as a reflection of reality could lead us down the path to ruin. Unfortunately, belief in them is so widespread most people no longer even question them and are putting their economic future in peril. A myth is often defined as any invented story, idea, concept, or false collective belief that is used to justify a social institution. With this in mind, it is understandable those in the government and financial systems would crank out such yarns to keep us docile.

  The six favorite financial myths are easier to believe when financial fears are low and times are good. 

  Over the last few years, a slug of freshly printed liquidity being pumped into the global financial system and stock markets has caused many asset bubbles to expand sending the wealth effect into overdrive. An increase in liquidity results in people feeling comfortable to take on more risk and this tends to cause people to “leverage up.” During such a time true price discovery has a way of being greatly diminished.

  

  Changes made to the rules and financial engineering have made many comparisons to the past obsolete. Sometimes, it is a question of people just being too lazy to question what they see, at other times, it is because they simply can’t face the truth. It should be noted that the entertainment industry has flourished as society seeks any diversion to pull our attention away from the sharp edges of reality and into the soft comfort of escape. In some ways, it could be said that our culture has become obsessed with avoiding what is real. Regardless of the reason why people fail to view the myths below as lies the point is they will result in the financial ruin of those counting on them in time of need.

  

  Over the years, extraordinary efforts have been made to keep the economy afloat. The most noticeable is the massive amount of new money and credit released into the financial system by central banks. This has been interpreted by many people as confirmation the current trend of never-ending growth will continue. Rather than considering it is time for a reality check it is both easier and more comforting to adopt an “all is well” attitude and ignore the signs of danger lurking around the corner.

  The crux of this article is about some of society’s favorite myths. These feed directly into the economy and our feelings about our financial security. While it could be argued the myths below have more to do with how we feel about life than about money, it cannot be denied that most people make many of their financial decisions based on the assumption the below statements are true. As a society, we rapidly choose to embrace and often choose not to question them because of the discomfort it would undoubtedly create. The six below permeate society and should be enough to remind you and even shed a bit of light upon the fact we as  individuals are vulnerable at any time if reality raises its’ ugly head.

  

  Believing Myths Is A Head In Sand Approach

  #1 Government is for the people and by the people – Seriously? After the dog and pony show, we experienced during the last presidential primary all illusions of that should have been erased. After often being forced to choose between the least of two evils it is difficult to praise our political system. After all the talk about “we the people,” the fact is the average “person” is far removed from the power to decide important issues.

  #2 Financial planning means you only have to start saving a little money each year to guarantee an easy retirement.  – The fact is life is a casino where our future is tenuous at best. Much of our circumstances and lives revolve around money and the number of options it gives us when we possess it. I intentionally used the term “casino” to conjure up the image of financial fortune. Which you can lose in a blink of an eye if things go against you. This myth extends deeply into the promises made by the government and others such as pension plans and financial institutions. Many of these promises will not be honored.

  #3 You have rights and that we are not slaves – I defer to a few lines from a blog by Gerry Spence who has spent his lifetime representing and protecting victims of the legal system from what he calls The New Slave Master: big corporations and big government. In his blog, Spence wrote; The Moneyed Master has closed its doors against the people and sits on its money like an old hen on rotten eggs. The people will not prevail. With its endless propaganda, the Moneyed Master has caused its slaves to believe they are free.

  #4 Your life will progress and move along pretty much as you have planned – When you think back over the years of your life if you are like most people things have not unfolded as you had planned. You may not be in the occupation you trained for or with your true love. Throughout our life watershed events occur that we have little control over, this holds true when it comes to your finances as well. Having an investment or pension plan go south can completely alter your life.

  #5 Those in charge or above you care about you and will make an effort to protect you – Sadly, more than one person has been sliced and diced by the people and institutions he or she trusted most. History shows when push comes to shove it is not uncommon for a person to look out for the person they treasure the most and that is often him or herself. Politicians and those in power have a long history of throwing the populace under the bus rather than taking responsibility for the problems they create.

  #6 It could be argued the biggest myth of all is the idea that inflation is reflected in the Consumer Price Index. Those making financial decisions have masked their failings. This is done by heavily skewing the CPI to give the impression there is little inflation. This dovetails with a theory I continue to expound on, that inflation would be much higher if people were not willing to invest in intangible assets such as stocks and Bitcoin. This removes a lot of demand for tangible items people use in their everyday life. 

  The fact is inflation is soaring and acts as a wealth transfer mechanism that hurts far more people than it helps. My apologies if this post has been a downer or seems overly negative, however, it is what it is and it was written for a reason. Best stated by a comment I read on another site; These myths add up to where “This is not a can of worms but a warehouse stacked with pallets of cans of worms.” 

  Believing the above myths will impact your life, that is why it is important to recognize them for what they are, lies. This is not to say that by making good and reasonable choices we cannot eliminate some of the risks we encounter when we get out of bed each morning. Developing the habit of being skeptical while pressing on to reach solid and reasonable goals is the best medicine to combat a deck that is often stacked against us. Be careful out there!

  *  *  *

  Mentioned above is the fact economists and analysts seem oblivious to the point that so many people willing to invest in intangible assets have helped to minimize inflation. This is a very important part of the inflation puzzle. This is a very important part of the inflation puzzle. The link below is to an article that delves deeper into why this is true.

  Tyler Durden
  Tue, 05/10/2022 – 18:45

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