Today’s News 13th July 2021

• Pandemic-Driven Hunger Hits 15-Year High As Global Crisis Unfolds 
  Pandemic-Driven Hunger Hits 15-Year High As Global Crisis Unfolds 

  The State of Food Security and Nutrition in the World 2021 (SOFI 2021) report warns food insecurity and malnutrition have hit 15-year highs and are likely to worsen. 

  Well before the COVID-19 pandemic, the world was on track to minimize hunger and malnutrition by 2030. But the virus pandemic disrupted economic flows around the globe, unleashing supply chain hell, compounded by disruptive weather, along with overstimulation by central banks and governments, helping to induce inflation, which has put the world at a critical juncture. 

  A staggering 811 million people went hungry in 2020, or about 10% of the entire world population. The decade ending in 2014 saw the number of undernourished people fall to 607 million and base through 2019 around 650 million. But as soon as the pandemic hit, food insecurity soared by more than 150 million people to 811 million. 

  

  “The report indicates that progress has been made for some forms of malnutrition, but the world is not on track to achieve any global nutrition targets by 2030,” the report said. 

  Globally, 44 percent of infants under 6 months of age were exclusively breastfed in 2019 – up from 37 percent in 2012 but the practice varies considerably among regions. Child malnutrition still persists at an alarming rate –an estimated 149 million children were stunted, 45 million were wasted and 39 million were overweight in 2020. The report presents new projections of potential additional cases of child stunting and wasting due to COVID-19. Based on a conservative scenario, it is projected that an additional 22 million children in low- and middle-income countries will be stunted, an additional 40 million will be wasted between 2020 and 2030 due to the pandemic. -SOFI

  “This is a wake-up call to the entire world,” David Beasley, executive director of the World Food Programme, told an audience of a webcast Monday. 

  Beasley said: “We’re heading in the wrong direction. To think that we’re going to end hunger by 2030, that’s not even possible given the direction, trajectory we’re on now.”

  None of this should come as a surprise to readers as the Food and Agriculture Organization of the United Nations (FAO) global food price index recently hit a new high. The non-governmental organization warned surging food prices may induce a “potential crisis” in lower-income countries: “Rising food imports as a share of all imports can be an early warning indicator for potential crises in some areas.”  

  As a reminder, ahead of the rapid rise in food prices, SocGen’s market skeptic Albert Edwards in December shared his thoughts about why he started to panic about soaring food prices. And since then, food supply chains remain broken, trillions in fiscal stimulus spent, and exploding commodity costs, we can only imagine the situation is getting worse by the month. 

  More recently, Deutsche Bank’s Jim Reid reminds us that emerging markets are more vulnerable to food insecurity since their consumers spend a far greater share of their income on food than those in the developed world.

  Other highlights from the SOFI report show Asia is home to most of the undernourished people post-COVID. 

  

  Analysts Michael Every and Michael Magdovitz of Rabobank warn that surging food prices could exacerbate global food insecurity. 

  Pandemic-driven hunger may already trigger social unrest as destabilization erupts in impoverished countries such as Haiti, Cuba, and South Africa. 

  Tyler Durden
  Tue, 07/13/2021 – 02:45

• Ukraine Reprised: Victoria Nuland Eyes Belarus In Talks With Ukrainian Official
  Ukraine Reprised: Victoria Nuland Eyes Belarus In Talks With Ukrainian Official

  Authored by Rick Rozoff via AntiWar.com,

  Under Secretary of State for Political Affairs Victoria Nuland held a phone conversation with the Head of the Ukrainian President’s Office Andriy Yermak to discuss what the National News Agency of Ukraine reported was the situation in Belarus. The two were described as having “expressed concern” over developments in Ukraine’s northern neighbor. A nation doesn’t want Nuland to be concerned, much less gravely concerned over its internal affairs given her political track record.

  Unlike her telephone conversation with then US ambassador to Ukraine Geoffrey Pyatt in 2014 in which she dictated the composition of a post-coup government in that nation weeks before the event, the above conversation has not been recorded and placed on YouTube yet, so its exact contents remain unknown.

  

  It is to be hoped that Yermak was duly deferential to the highest-ranking member of the US Foreign Service, as he would never have been granted the position he currently holds by his personal friend President Volodymyr Zelensky but for Nuland’s deft coup plotting of seven years ago. Before nepotism gained him his current position, he had been appointed Presidential Aide for Foreign Policy Issues shortly after Zelensky took office. Yermak, also an attorney, had been a film producer when he met Zelensky, at the time general producer of the TV channel Inter. Somehow one imagines the prospect of a Ukrainian television miniseries with a title like “The Battle for the Soul of Belarus” or “Free at Last, Released from the Bonds of Despotism” or, better yet, “Rock ‘n Roll Revolution” with a soundtrack by U2, Rage Against the Machine and Nicki Minaj.

  What is known of his conversation with Nuland, the pastry peddler of Maidan Square and patron saint of the seven-year war in the Donbass, is a brief account of it related by Ukraine’s presidential press secretary, Serhiy Nykyforov:

  “Andriy Yermak and Ms. Victoria Nuland discussed the situation in Belarus and expressed concern about what is happening there now. They also discussed some security issues related to Russia’s West-2021 exercises and moved on to the topic of Ukraine.”

  The joint Belrusian-Russian exercise (Zapad in Russian) is a routine one and Ukraine has no reason to fear anything from it; but Ukrainian officials, including Zelensky, for months have been prophesying, like a blind Greek soothsayer of the time of Sophocles, a threat to the very existence of Ukraine emanating from Belarus. Ukraine has a population almost five times the size of Belarus’ and armed forces trained to meet NATO standards in addition to military equipment provided by the US and other alliance members.

  The government of Belarus recently closed its border with Ukraine, accusing the latter of allowing arms to be smuggled into the country for Western-backed “protesters.” The sort of peaceful protesters that set over a hundred Ukrainian policemen on fire with gas bombs in Kiev in 2014, burning several to death. Their efforts were noted, appreciated and rewarded by Nuland and John McCain, who dispensed snacks to the CANVAS-trained perpetrators between bouts of hurling Molotov cocktails at unarmed law enforcement personnel.

  

  By the way, the government of President Viktor Yanukoych was overthrown only thirteen months before a scheduled presidential election. Surely Nuland, McCain and their friends in the National Endowment for Democracy and other “democracy enhancement” organizations could have delivered the desired result short of setting much of the Ukrainian capital on fire, overthrowing an internationally-recognized head of state and plunging the nation into endless war; with the indispensable assistance of bomb-wielding “youth activists” as in 2004 and 2014, of course.

  But a standard color revolution would have had disadvantages. Campaign slogans from approved candidates like Vote for Me and Join NATO or Support Us or We’ll Burn Your Country to the Ground don’t always appeal to targeted demographics. At least not sufficiently to motivate them to walk to the polling station on a rainy afternoon. Besides, rigging an election in 2015 might not have guaranteed a festering war with ethnic Russians in the Donbass and an excuse for further NATO buildup in the Black Sea – much less the opportunity of war with Belarus.

  For the likes of Nuland with her Bachelor of Arts in Something or Other (BASOO), film producer Yermak and his boss, comedian Zelensky (Did you hear the one about the hooker and the mushroom cloud?), politics and war are just so, like, boring without a little panache. A little flair. Éclat. Some fireworks. Taunting a neighbor with the world’s second-largest nuclear arsenal by overthrowing the government of its only ally in Europe would do the trick. Now you’re talking. F*ck the world!

  Tyler Durden
  Tue, 07/13/2021 – 02:00

• How Google And Wikipedia Brainwash You
  How Google And Wikipedia Brainwash You

  Authored by Ryan Matters via Off-Guardian.org,

  Internet giants cover-up for Big Pharma, suppress alternative medicine and bury inconvenient facts…

  

  According to research done by We Are Social, the average internet user spends over 6 and half hours online every day.

  The internet is both a blessing as a curse.

  On the one hand, it gives us access to knowledge and technology that improves our lives, but on the other hand, it’s an addictive and dangerous mind-control tool that can be exploited to influence your choices and manipulate your thinking.

  The COVID pseudopandemic has seen internet censorship rise to an unprecedented level. The controllers and their minions are scrambling to silence anyone who dares to question the efficacy of vaccines or the existence of Sars-Cov-2.

  Let’s recap:

  In the space of a few months, thousands of YouTube channels and millions of Facebook posts have been deleted.

  The former president of the United States’ Twitter account was removed, and, Greenmedinfo, a site that aggregates research on natural remedies, had both their Facebook and Instagram accounts deleted losing over half a million followers.

  LinkedIn also joined in on the action by deleting the account of Dr. Robert Malone after he questioned the safety of the mRNA vaccines, the technology for which he himself played a huge part in creating.

  Parler was removed from the internet and so was the website of America’s Frontline Doctors after they endorsed non-agenda-approved treatments to combat COVID-19.

  More recently, in a move that’s disturbing yet predictable, Facebook has begun sending users creepy messages relating to “extremist content”.

  So content that goes against the mainstream agenda is either censored or outright deleted. We know that. But what about the content that goes against corporate interests but isn’t quite insidious enough to be removed? What does Google, the largest search engine in the world, processing over 40,000 search requests per second, do about such content?

  The first thing to understand about Google is that it’s more than just a search engine. Google develops and maintains a network of applications that all work together to collect, analyze, and leverage your data. Each application feeds data into the next, forming a global chain of information exchange.

  For example, Google’s driverless car initiative powers Google Maps, which in turn powers Google’s local listings. It is this network effect that has made Google such a powerful and unrivaled force in the search engine space.

  As a search engine, Google decides what information you see and what information you don’t. It goes without saying, but any tool with such power needs to be responsibly managed and repeatedly scrutinized.

  Anyone who chooses to use such a tool should also be aware that they are seeing the internet through a lens created by Google’s mysterious algorithms and the information they’re receiving doesn’t necessarily come from an objective or neutral source.

  Google’s ability to affect people’s thinking was demonstrated by the work of Dr. Robert Epstein when his team found that Google was profoundly influencing the results of elections. Epstein writes that:

  Our research leaves a little doubt about whether Google has the ability to control voters. In laboratory and online experiments conducted in the United States, we were able to boost the proportion of people who favored any candidates by between 37 and 63 percent after just one search session. […] Whether or not Google executive see it this way, the employees who constantly adjust the search giants algorithms are manipulating people every minute of every day.”

  It would also appear that Google is inherently biased towards pro-drug, pro-vaccine, Big Pharma medicine. In 2019, the search engine made an update to its algorithm that just so happened to shadow-ban health websites not affiliated with billion-dollar corporates.

  The websites affected included GreenMedInfo, SelfHacked, and Mercola.com. Some of these sites lost over 90% of their organic traffic, overnight.

  When searching for most health-related topics on Google, the first page is almost always filled with content from websites like WebMD, whose history is filled with conflicts of interest and open collaborations with Monsanto, Merck, and other corporates.

  In 2017, the search engine blacklisted naturalnews.com, a natural health advocacy organization that reports on controversial health topics including vaccine safety, GMOs, and pharmaceutical experiments, de-indexing over 140,000 of their webpages.

  In a 2019 article, the founder of NaturalNews, Mike Adams, had this to say about Google (emphasis in original):

  Make no mistake: Google is pro-pharma, pro-Monsanto, pro-glyphosate, pro-pesticides, pro-chemotherapy, pro-fluoride, pro-5G, pro-geoengineering and fully supports every other toxic poison that endangers humankind.”

  Google’s ties to Big Pharma are well-known. In 2016, Google’s parent company, Alphabet, partnered with GlaxoSmithKline to create a new company focused on research into bioelectronics – a branch of medical science aimed at fighting diseases by targeting electrical signals in the body. GSK also works directly with Google thanks to a deal between the two companies that allows GSK full control over the data that they use. What data? Whose data? That isn’t disclosed.

  Alphabet is also heavily invested in Vaccitech, a UK-based vaccine company founded by researchers at Oxford University’s Jenner Institute, the Vatican (vaxxican?) of vaccine research.

  Finally, it has recently come to light that Google’s charity arm, Google.org, provided funding for research and studies carried out by Peter Daszak and his charity, EcoHealth Alliance – the same charity that previously worked with the Wuhan lab involved in so-called ‘gain of function’ research.

  These conflicts of interest alone should call into question the search engine’s ability to provide an unbiased view of health content on the internet.

  Google’s “autocomplete” algorithm is another source of manipulation that works to affect people’s perceptions about the danger of vaccines and the efficacy of natural treatments.

  For example, if you type “vaccines cause” into Google, the top suggestion is “vaccines cause adults”. I mean, seriously? In contrast, if you search “Chiropractic is”, the top suggestions are “quackery”, “pseudoscience” and “dangerous”.

  Autocomplete is supposedly based on data collected from real Google searches, especially common and trending ones. However, data from Google trends clearly show that ever since 2004, “vaccines cause autism” has been searched far more times than “vaccines cause adults”, and “Chiropractic is good” has received a far higher popularity score than “Chiropractic is quackery”, the top suggestion.

  A similar trend can be observed for terms such as “supplements are”, “GMOs are”, “glyphosate is”, “organic is”, “homeopathy is”, and “holistic medicine is”.

  Looking at the way Google favours Big Pharma content, it’s reasonable to suspect that their “data lakes” are being poisoned. In fact, this was confirmed in 2019 when former Google software engineer, Zack Vorheis, leaked 950 pages of internal company documents providing evidence that Google was shaping election results, implementing stealth censorship programmes, and maintaining undisclosed blacklists.

  Google’s algorithms are shrouded in mystery, based on black-box machine learning models that few people understand.

  Machine learning models must be “trained” and as long as Google feeds them data to say “non-drug medicine is bad, Big Pharma is good”, the algorithms will continue to re-bias the internet in that direction, altering people’s perceptions of natural health and presenting drug-based medicine as the shining light in a dark world filled with invisible enemies.

  When it comes to psychological manipulation, Google’s “partner in crime” is Wikipedia. Wikipedia is a free, online encyclopedia operated by the Wikimedia Foundation.

  If you’ve ever searched for anything on the internet, you’ve likely seen Wikipedia show up towards the top of the search results. When it comes to questions without any commercial impact, such as “What’s the capital of Turkey?”, Wikipedia does a pretty good job.

  But when it comes to multibillion-dollar industries, things get a little murky. Big corporates have big pockets and they aren’t opposed to the concept of “pay-to-play”. This was highlighted in 2012 when British PR firm, Bell Pottinger, was exposed for its involvement in manipulating Wikipedia entries for paying clients.

  The founder of Wikipedia, Jimmy Wales, is no saint, either. In 2008 he used the platform as his personal relationship break-up tool by updating his relationship status on his Wiki entry before telling his girlfriend. And in 2010, he was embroiled in a Wikipedia pornography-removal scandal that saw him “voluntarily” relinquish certain editing and admin privileges.

  One of the industries where Wikipedia’s bias is most noticeable is healthcare. In an article for the Orthomolecular News Service, Howard Strauss, Grandson of Max Gerson, MD (the creator of the Gerson cancer therapy) states that:

  This writer and many others in the field of alternative medicine and natural healing have experienced Wikipedia bias personally when contributing well-documented, carefully researched articles to the site, only to have them be radically altered and deleted, by anonymous “editors,” then being banned from further editing or contributions. This is impossible to reconcile with a free flow of information.”

  And this can be verified as Wikipedia keeps a public record of all edits made to an article over time. He goes on to comment on the history of Wikipedia and states that:

  At first, it was interesting to see uncensored information flow through the site, and even contribute to it. Then corporate America realized that Wikipedia, and similar sites, were distributing information they had carefully and thoroughly suppressed in the media, and set about correcting that omission. Soon, Wikipedia entries about natural healing, holistic medicine, and other subjects began to resemble publicity blurbs from Monsanto, or Merck, or the NIH. Contributors are supposed to be anonymous, “volunteer” editors were supposed to be both anonymous and neutral. But it was clear that for certain sensitive subjects, this was far from the case.”

  If you want to see Wikipedia’s bias for yourself, just search for any medical discipline that isn’t drug-based. And if you want to make things really fun, take a shot of whiskey every time you see the word ‘pseudoscience’.

  Here are real snippets from Wikipedia entries on alternative forms of medicine and natural healing, taken from the first few sentences of the entry…

  • Chiropractic: “Chiropractic is a pseudoscientific alternative medicine…”

  • Chinese medicine: “Traditional Chinese medicine (TCM) is a branch of traditional medicine in China. It has been described as “fraught with pseudoscience.“

  • Homeopathy: “Homeopathy or homoeopathy is a pseudoscientific system of alternative medicine.”

  • Ayurveda: “The theory and practice of Ayurveda is pseudoscientific.”

  • Acupuncture: “Acupuncture is a pseudoscience.”

  • German New Medicine: “Germanic New Medicine (GNM), also formerly known as German New Medicine and New Medicine, a system of pseudo-medicine.“

  • Functional Medicine: “Functional medicine is a form of alternative medicine that encompasses a number of unproven and disproven methods and treatments.“

  The editors display a shocking level of bias by cherry-picking references, many of which are not peer-reviewed or scientific, and make hollow claims which they portray as facts.

  The entry on Functional Medicine is particularly difficult to get through. Functional Medicine is a form of medicine focused on identifying and addressing the root cause of disease. It often involves treatments to correct nutritional imbalances and gut dysbiosis.

  However, the author claims that functional medicine encompasses a number of ‘unproven’ and ‘disproven’ treatments and cites two articles on sciencebasedmedicine.org, a notorious ‘Skeptic’ publication, both written by the same author.

  The articles, far from scientific or scholarly, read as opinion pieces written by an MD with a chip on his shoulder, who clearly has no understanding of what functional medicine really is. The author, Dr. Wallace Sampson, passed away in 2015. Here’s his author bio:

  Retired hematologist/oncologist, presumptive analyzer of ideological and fraudulent medical claims, claimant to being founding editor of the Scientific Review of Alternative Medicine, and to detecting quackery by smell.”

  Incidentally, the Wikipedia entry for the Scientific Review of Alternative Medicine, says that it is a discontinued medical journal and that it was evaluated at least three times by the National Library of Medicine (NLM) for indexing in MEDLINE, but rejected each time. What a shame.

  Furthermore, in 2003, a California Appeals Court found Dr. Sampson “to be biased and unworthy of credibility.” Yet these are the kind of charlatans that Wikipedia endorses as “experts”.

  Instead of citing ‘quackbuster’ publications written by biased, outdated, and nutritionally uneducated MDs, the editors would do well to dive into Alan Gaby’s Nutritional Medicine (over 16,000 scientific references), or Dr. Alex Vasquez’s Inflammation Mastery. That’s presuming they have the intelligence to read high-level, academic texts, based on real, unbiased science (not opinions).

  If I were an editor at Wikipedia, I may choose to rewrite the article on chemotherapy, claiming it is a pseudoscience by citing this 2004 study which found the overall contribution of chemotherapy to cancer survival to be barely over 2%, or this study in Nature Medicine that found chemotherapy to increase tumour growth and survival.

  Wikipedia made its stance on alternative health quite clear in 2014 when founder Jimmy Wales ridiculed an 8,000-signature petition on Change.org calling for a fairer discussion of alternative and complementary medicine on the encyclopedia. The petition stated that:

  As gatekeepers for the status quo, they [Wikipedia] refuse discourse with leading-edge research scientists and clinicians or, for that matter, anyone with a different point of view”

  Instead of recognizing his lack of expertise in the area of healthcare and re-evaluating the fraudulent and dubious wiki entries, Wales demonstrated his lack of awareness by stating that:

  What we won’t do is pretend that the work of lunatic charlatans is the equivalent of ‘true scientific discourse’. It isn’t.”

  Quite frankly, it’s not surprising to hear such a response from the man who heads an organization that serves the interests of the Big Money Machine and its quest to dumb down the populace. As Dr. Vasquez puts it, in a recent critique of a New York Times propaganda piece on the “danger” of nutritional supplements to fight coronavirus:

  The scaffolding of our institutionalized ignorance requires structural support from publications and organizations that pretend to inform and empower us while simply leaving us dumber and weaker than before.”

  So when did Wikipedia become an extension of Big Pharma? The truth is that the health section of Wikipedia was commandeered by a bitter group of skeptics who live within their own, egoic constructs of reality and health.

  This anti-health movement ramped up in 2006 when Paul Lee, then the listmaster of Quackwatch, made a forum post inviting skeptics to come forward and begin writing content on Wikipedia about natural and complementary health topics.

  Quackwatch, a “Skeptic” website aimed at “debunking” and smearing non-drug medicine, was founded by Steven Barrett, an unlicensed MD who failed his psychiatric board exam, and has authored zero published research (at least I haven’t been able to find any). During a court proceeding, he admitted ties to the AMA, the Federal Trade Commission, and the FDA (though his sources of funding are likely far more expansive).

  Lee was in full violation of Wikipedia’s neutrality policy and knowing this, he stated:

  Any coordination of efforts should be done by private email, since Wikipedia keeps a very public history of every little edit, and you can’t get them removed. We don’t need any accusations of a conspiracy.”

  Needless to say, a coordinated effort over private email IS a conspiracy. And not a very sophisticated one at that.

  Then, in a move demonstrating both the organization’s ethical and moral standards, Wikipedia made Paul Lee a senior editor with special rights and privileges.

  The influence that both Google and Wikipedia have is astonishing when you consider that Google receives more than 1 billion health-related questions per day. How many of those people have turned away from effective treatments due to the information Google fed them? How many people wrongly believe that COVID vaccines are safe effective?

  But who do we blame for the increasing power and influence that Google and Wikipedia hold? Perhaps we are to blame. Blindly trusting in “authorities” to have our best interests at heart is the kind of infantile thinking that got us into this mess.

  As the number one visited website in the world, Google controls ~90% of global search traffic. Our minds, health beliefs, political stances, and world views are inseparably linked to information we read on the internet and neither Google nor Wikipedia is an objective source for this information.

  It is time that we take responsibility for our own health. We have to develop the ability to read and assess health knowledge objectively and intuitively.

  Do you suffer from depression? Maybe you need to get your vitamin B12 or vitamin D levels checked, maybe you need to cut out processed and neuroinflammatory foods from your diet.

  The internet is not a miracle worker, The internet doesn’t know what’s best for you, no one does. Your body is different from mine. Treatments that work for you may not work for me. But as long as we learn to listen to our bodies, to understand our own, unique inner landscape, we can begin to seek treatments and practitioners that truly make a difference.

  The lesson is this:

  You are the authority. Read, learn, understand, and don’t take anything at face value. We need to learn to develop our intuition in parallel with our critical thinking skills.

  Discernment is our secret weapon.

  We’re fighting an information war. Arm yourself with knowledge and be free.

  Tyler Durden
  Tue, 07/13/2021 – 00:00

• Lawsuit Centered On Saudi Ex-Spymaster Threatens To Make US Covert Ops Public
  Lawsuit Centered On Saudi Ex-Spymaster Threatens To Make US Covert Ops Public

  A former top Saudi spymaster now living in exile with extensive assets in Canada and the United States is embroiled in a long-running legal fight with Crown Prince Prince Mohammed bin Salman (MbS) which threatens to expose US state secrets. He was previously a spy chief seen as fiercely loyal to Prince Mohammed bin Nayef (MBN), who is now in Saudi detention after being deposed, facilitating the rise of his rival MbS. 

  Ex-Saudi intelligence officer Saad al-Jabri already years ago (in 2018) alleged MbS ordered a hit squad to assassinate him while in Canada – an attempted said to have been thwarted by Canadian authorities, but now a complex pair of civil cases has seen the US government intervene to argue it can’t be compelled to divulge sensitive or possibly classified information as part of the suits. 

  

  What al-Jabri knowns, or what he’s willing to use to fight the kingdom as it goes after his assets abroad, could prove deeply embarrassing for both the Saudis and Americans, and potentially touches on covert operations the two allies have cooperated on. 

  Amid the ongoing feud with the Saudi government, two Saudi state-run companies recently joined the fight against Aljabri, described by AFP this week as follows: 

  The feud took a new turn this March when state-run company Sakab Saudi Holding accused Aljabri of embezzling $3.47 billion while working at the Ministry of Interior under MBN. It urged the Massachusetts court to freeze his $29 million Boston property assets.

  This came weeks after multiple state-owned companies sued Aljabri in Toronto on similar allegations. A Canadian court subsequently announced a worldwide freeze of Aljabri’s assets.

  The Massachusetts case has witnessed the US Justice Department get involved in a rare intervention, with an April filing telling of Aljabri’s intention to “describe information concerning alleged national security activities”.

  

  Washington could go so far as the invoke the “states secrets privilege” in a case that’s essentially a spat between two foreign entities. According to further details from court filings cited in AFP: 

  “The (US) government is considering whether and how to participate in this action, including if necessary and applicable, through an assertion of appropriate governmental privileges,” the filing said, without elaborating.

  In a second filing a month later, the Justice Department asked the court for more time as national security matters require “‘delicate’ and ‘complex’ judgements by senior officials”.

  The filing said the government was prepared to “provide further information” to the court in secret.

  Crucially, state-run Sakab – which is at center of the Massachusetts lawsuit – is widely known to be a front company for Saudi intelligence through which it can conduct covert operations with allied agencies abroad, particularly in the US with the CIA. 

  Middle East Eye has additionally in the past described Jabri as having had “deep ties with the CIA and had been a key go-between for western intelligence agencies and the Saudi intelligence apparatus, worked closely under bin Nayef, who in 2017 was ousted, put under house arrest, and replaced by his cousin, Mohammed bin Salman, as the country’s crown prince.” 

  Previously in the long-running saga, this US summons actually happened…

  US court issues summons for #Saudi Crown Prince Mohammed bin Salman

  District court calls on crown prince to appear in court for the lawsuit filed by ex-Saudi intel official Saad al-Jabri.#SaudiArabia #MBS https://t.co/KndrGiqCmC

  — Robert Carter (@Bob_cart124) August 10, 2020

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

  Thus clearly the former spymaster possesses many secrets, but the kicker as noted in AFP this week is what follows: 

  In order to prove his innocence, the court would need to probe Sakab’s finances, including how they were used to “finance sensitive programs” operated in partnership with the CIA, the US National Security Agency and the US Defense Department, said a filing by Aljabri.

  While the US government has in the past often been successful in blocking court proceedings from making sensitive national security matters public, neither the DOJ or CIA have any legal standing or direct sway to do so on the Canada side of the proceedings – meaning secret information could come to light via the Toronto court. 

  Tyler Durden
  Mon, 07/12/2021 – 23:40

• The Deepest Motivation Behind China's 'Reform' Agenda Revealed As Very Simple
  The Deepest Motivation Behind China’s ‘Reform’ Agenda Revealed As Very Simple

  Authored by Anne Stevenson-Yang via themarket.ch,

  The Lobster in Beijing’s Pot

  The fiasco surrounding the IPO of the Chinese ride-hailing service Didi is a warning signal: Beijing is taking increasingly tough action against capital outflows from the People’s Republic. This is a red flag for investors in Chinese internet giants such as Alibaba, Tencent and Baidu.

  

  Bright-orange splotches appear on Gila monsters when they want to show that they can spew poison if predators mess with them. Male dogs hump females. And when Chinese companies make billions in portable, hard currency by listing overseas, as Didi Global Inc. (DIDI) did in its IPO on June 30, Chinese regulators flex their muscles.

  The wishful among the investment community see this as a one-off. It is a tectonic shift.

  China’s July 4 order to halt new downloads of the Didi app on the excuse that user data security was being compromised tanked the new listing and led to comments by Chinese officials about how companies really need to get their approval before an IPO.

  The «Wall Street Journal» explained the move as a way of fixing a lack of inter-agency coordination, claiming that China’s data watchdog is miffed that it could not stop an IPO. That does not add up: the IPO in no way made the data vulnerable to American snooping. The issue here is not data but power.

  One need only to look back to 2017, as the wrath of the central government came down on private conglomerates like the Dalian Wanda Group, Anbang Insurance, and HNA Group, all of which had committed the cardinal sin of buying offshore assets with their cash. China had grown preoccupied with regulatory capture of privately controlled assets that are held in hard currency rather than in the Monopoly money that is the Chinese Renminbi. Beijing promptly dismantled the vast empires held by these companies – including Wanda’s controlling share of AMC, HNA’s stake in Hilton, Anbang’s 15 U.S. hotels – and engineered the sale of many of the assets to military-controlled companies

  The Temperature Rises

  While the key motivation is control, there is also an element of tit-for-tat. After many years of acceding to Chinese belligerence on issues like Taiwan, Falun Gong, and the jailing of Liu Xiaobo, Western nations have begun to voice objections. There have been successive U.S. bans on purchasing from Chinese companies suspected of being connected with the military. There was the Holding Foreign Companies Accountable Act, enacted last December, which implicitly targets Chinese companies listed in the United States for delisting. In March, there were sanctions on Chinese officials for human rights abuses in Xinjiang – measures against which Beijing immediately retaliated. In June, President Biden issued an executive order banning investments in 59 entities. China has struck back with a number of measures, the most recent being the «Anti-Foreign Sanctions Law,» which tries to keep companies from following the laws of their own countries.

  The next step in the muscle-flexing exercise will be to curtail the use of Variable Interest Entities (VIEs).

  The most valuable portions of China’s Internet, such as search algorithms, news reporting, and video rights, are by law owned by Chinese nationals. Public-market investors participate in the companies’ profit by proxy: they own offshore holding companies – VIEs – that have contractual rights to profit streams from the onshore businesses. But the contracts are legally iffy.

  Directionally, it is clear that the VIE goose is cooked. In 2015, a new Foreign Investment Law made ownership synonymous with control. This was the equivalent of putting a lobster in a pot of cold water and starting the flame. Now authorities say they need to approve Chinese companies for IPOs even when the companies are VIEs established in tax havens.

  A Taste From the Nineties

  Because of the go-go years in public markets, many have conveniently forgotten about 1998. That was the year when the telecom company Unicom decided to list in Hong Kong. Because foreign ownership was not permitted in telecoms, Unicom developed a work-around called «Chinese-Chinese-Foreign» or «CCF,» which mirrored the current VIE structure of the Internet. Companies like Siemens and Bell South would nominate employees to be the titular owners of fully domestic companies, which would joint venture with China Unicom. The domestic nominee companies, via contract, conveyed some of the economic benefit of the joint venture to the foreign telco.

  In summer of 1998, all this changed. Premier Zhu – who had previously publicly praised the arrangement – signed a decree requiring that all the foreign partners exit the trilateral arrangements and the joint ventures be unwound.

  International companies had firmly believed in China’s intention to «reform and open» its telecom sector and believed that the CCF arrangements were the start of a process. It turned out that the ventures in the end were mechanisms through which to capture needed capital and technology. Once that goal had been accomplished, the foreign ownership by proxy was ruled illegal.

  This is likely to be ultimately the fate of Chinese VIEs in general and the Internet companies in particular.

  Who Foots the Bill?

  There is still a way to make money from the rich valuations that are still being awarded to Chinese companies: let them buy you. In that regard, the Didi case is instructive: the real winner is Uber.

  Squeezed out of China by dozens of discriminatory rules, Uber threw in the towel and sold its business to Didi in 2016 for $7 bln and a 12.8% stake. Even with the share decline, that should be worth around $7.4 bln. That is more than two-thirds of Uber’s total 2020 revenue. That’s an easier way to make a living than humping rides.

  Selling to over-valued Chinese companies turns out to be the smart move. Whether Yahoo and Alibaba, Walmart and JD.com, or Tesla and Tencent, the easier path than building a Chinese business is to sell to a Chinese company for shares. Who even remembers Yahoo? Here’s a bet: Tesla will sell its troubled Chinese operations to a Chinese grandee for shares.

  But as for investing in listed Chinese companies, after the continuing house arrest of China’s most visible and successful billionaire, Jack Ma, founder of the company with the biggest IPO in history, one wonders what it will take for the U.S. market to understand that Chinese companies are simply not investable.

  Deng Xiaoping cautioned that flies would come in through China’s «open door,» so the door has been carefully watched, cracked open when it suits and shut more tightly when undesirables pass through. Currently, China’s door is closing to inbound traffic – Internet content and other forms of media, other channels of cultural influence, many kinds of inbound travelers, and many imports. In this regard, Covid-19 was a boon to regulators looking for an excuse to limit who comes into China. For capital, the inbound door remains wide open, but the way out is increasingly shut. Policies around IPO approval, VIEs, Internet control, anti-monopoly regulation, and investment policy have everything to do with capturing and holding onto hard currency.

  Thus, in the waning days of the Chinese growth story, the deepest motivation behind China’s reform agenda is revealed as very simple: capturing dollars and then leveraging up foreign reserves by printing up a massive money supply in RMB. And directing a portion of the dollars, of course, into leadership pockets.

  Tyler Durden
  Mon, 07/12/2021 – 23:20

• Lumber Futures Wipe Out 2021 Gains As Supply Builds 
  Lumber Futures Wipe Out 2021 Gains As Supply Builds 

  Lumber futures on Chicago Mercantile Exchange have officially wiped out all gains for the year on Monday. Prices have been sliding for 44 days, down at least 60% from the record high of $1,711 per thousand board feet from late April/early May. As we’ve noted multiple times, the great lumber bubble has popped. 

  

  The drop in lumber prices has been quite dramatic and is a classic commodity blowoff top. The quadrupling of prices over the last year has been bad news bears for builders and do-it-yourselfers. Even with prices around $685, prices are still more than double pre-COVID prices. 

  Since the early 1990s, lumber futures have been range-bound between $200 to $400, with some minor exceptions when prices jumped above $600 in 2018. 

  The latest free fall in prices suggests the physical market is resetting after a historic lumber shortage was spurred by a perfect storm of factors during the virus pandemic. 

  Lumber futures’ term structure reminds us of a rollercoaster – also prices are very seasonal so this is priced in as well. 

  

  Chief Executive Officer Greg Kuta, whose Ohio-based firm focuses on lumber markets, told Bloomberg in an email that lumber futures will see “volatility” with price swings between “$550 to $1,200 for the remainder of 2021.” 

  Paul Quinn, an analyst for RBC Capital Markets, said prices could still drift lower this summer and rally in September, then drop again in November. 

  “We think 2022 spring prices will see a similar run as 2021, though likely not as high given the incremental capacity adds,” Quinn said, noting that new home construction continues to flourish.

  “We still expect prices will be higher than long-term averages going forward.”

  Readers may recall we’ve been closely following the lumber bubble: 

  • Lumber Hasn’t Had A Down Day Since March 26… And It’s Sending Home Prices Soaring Even Higher
  • “There Is No Shortage?” Train Loads Of Lumber Stacked As Far As The Eye Can See
  • Lumber Industry Has No Interest In New Mills As They Reap Rewards Of Record Prices
  • Lumber Prices Slump As Historic Boom Hits A Wall
  • Lumber Prices Record Biggest Weekly Drop Ever As Supply Increases
  • Lumber Prices Suffer Biggest Monthly Drop On Record

  More or less, BMO Capital Markets’ commodity desk noted earlier this month that lumber prices may not return to pre-pandemic levels any time soon. 

  Tyler Durden
  Mon, 07/12/2021 – 23:00

• White House Backs Teachers Unions, CRT Curricula
  White House Backs Teachers Unions, CRT Curricula

  Authored by Philip Wegmann via RealClear Politics (emphasis ours),

  The Biden administration signaled its support for the teaching of “anti-racism” curriculum in public schools Friday, wading into an ongoing culture war over critical race theory playing out on cable news and in school board meetings across the nation.

  

  Asked about a recent decision by the National Education Association to throw its weight behind controversial progressive teachings about race, White House Press Secretary Jen Psaki told RealClearPolitics that President Biden believes “kids should learn about our history” including the view that “there is systemic racism that is still impacting society today.”

  Psaki continued that the president and the First Lady, who is also a life-long educator, believe that “there are many dark moments, and there is not just slavery and racism in our history.”

  “And he believes, as I believe, as a parent of children, that kids should learn about our history. So as a spouse of an educator,” the press secretary added, “he continues to believe that children should learn not just the good, but also the challenging parts of our history, and that’s part of what we’re talking about here, even as it’s become politically charged.”

  Almost underscoring Psaki’s point that the issue has become politically charged, an account run by the House Republicans responded on Twitter, “critical race theory is NOT history. It’s an ideological agenda meant to divide us.”

  The press secretary’s answer was the clearest expression to date of where the White House comes down in a larger ideological battle over the soul of the nation. Progressives who espouse critical race theory argue that white people should own up to the benefits afforded to them by the systemic racism woven into the fabric of this country’s past and present. Conservatives reject that characterization. While agreeing that schoolchildren should learn about slavery and racism, they say that the current approach being pushed by progressive educators goes too far.

  In that same vein, Russ Vought, president of Center for Renewing America, told RCP that the White House “can continue to sow confusion,” but that people already know that teaching the theory “is not about learning history, it is indoctrination that America is systemically racist and people should be judged based on the color of their skin, instead of the content of their character.”

  Vought, who authored former President Trump’s executive order banning CRT in the federal government, argued that Biden had made the theory “the governing paradigm of his administration, insisting on dividing the country based on race.”

  The back-and-forth comes as schools across the country prepare to welcome students back to the classroom in person later this summer, and as the nation’s two largest teachers unions vow to support their members teaching of the theory.

  At its annual meeting, the National Association of Educators adopted an agenda item stating, “it is reasonable and appropriate for curriculum to be informed by academic frameworks for understanding and interpreting the impact of the past on current society, including critical race theory.”

  NEA President Becky Pringle urged teachers to adopt similar teachings in their lesson plans, saying, “If this grand experiment in democracy is to succeed, if the inhabitants of our nation are to prosper, we must continuously do the work to challenge ourselves and others to dismantle the racist interconnected systems and the economic injustices that have perpetuated systemic inequities.”

  The NEA along with the American Teachers Federation are preparing legal challenges to state laws stripping such lessons from curricula. At least six states have passed new laws limiting how race can be taught in the classroom, the Associated Press reported, and similar proposals are being considered in more than a dozen others.

  Texas Gov. Greg Abbott signed a bill into law last month that bars schools from teaching students that anyone “should feel discomfort, guilt, anguish or any other form of psychological distress” because of their race or sex. Liberty and equality, the law states, should be taught as “authentic founding principles,” not slavery or racism, according to a majority of Texas lawmakers.

  It comes as no surprise that the White House stands with the teachers’ unions. On the first full day of the new administration, Dr. Jill Biden hosted a summit to celebrate educators, and just two guests were invited to the White House: the heads of the two largest public teachers unions in the country. “I’m so proud that you are leading the NEA, which as you probably know is my union,” the first lady told Pringle. Weingarten, the leader of the AFT, was described the first lady as “the kind of general who is never far from the front lines.”

  She promised that with her husband as president, the unions “will always have a seat at the table.”

  “Together, we are going to transform our nation’s education system. And when we do that, we will change the course of our future forever,” she added. “And if you ever wonder if it’s possible, just remember that the First Lady of the United States is one of your own.”

  Tyler Durden
  Mon, 07/12/2021 – 22:40

• Capitol Police To Use Military Surveillance Equipment In Role As 'Intelligence-Based Protective Agency'
  Capitol Police To Use Military Surveillance Equipment In Role As ‘Intelligence-Based Protective Agency’

  In response to the January 6 Capitol riot, US Capitol Police will begin employing military surveillance equipment used by the Army in what the Washington Times described as part of “sweeping security upgrades” as the force transforms into “an intelligence-based protective agency.” 

  

  Upgrades will include eight ‘Persistent Surveillance Systems Ground – Medium’ (PSSG-M) units, which provide HD surveillance video and includes night vision. According to the Pentagon, it does not include facial recognition.

  “This technology will be integrated with existing USCP camera infrastructure, providing greater high definition surveillance capacity to meet steady-state mission requirements and help identify emerging threats,” said the Pentagon.

  The technology allowed U.S. troops fighting wars in Iraq and Afghanistan to monitor large areas 24/7 through extremely high-resolution cameras.

  Some privacy rights advocates have raised concern that Capitol Police are getting into the business of spying on Americans.

  In a wartime application, the persistent surveillance units were mounted on tethered blimps. The data could be stored, combined with sensor data from other platforms, and later referenced or rewound to track individuals or groups.

  The military could use the system to develop “pattern of life” analyses on suspected enemy combatants or intelligence targets in war zones. It could determine, for example, who was responsible for placing an improvised explosive device. –Washington Times

  According to a 2016 Government Accountability Office report, the Department of Homeland Security leased the same, or similar technology through the Department of Defense.

  Few details were provided to the Times about the new system – such as how and where it will be deployed, or whether collected data will be stored or disseminated – or whether it will be shared with other agencies.

  

  “Hopefully, you can understand it wouldn’t be smart of us tell the world all our capabilities,” a Capitol Police official told the Times.

  The Pentagon says the Army will install the units and provide training to the Capitol Police to operate and maintain the system. Once installed, the Army won’t have any role in operation.

  Read the rest of the report here.

  Tyler Durden
  Mon, 07/12/2021 – 22:20

• Where The Divide In Star Wars Mirrors The Culture War
  Where The Divide In Star Wars Mirrors The Culture War

  Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

  For nearly four years now I’ve struggled with putting my finger on why so many Star Wars fans hate Rian Johnson’s Episode VIII: The Last Jedi. For me it is one of the very best the franchise has ever produced because of its willingness to challenge our assumptions about how the mythology in Star Wars actually works.

  I know many out there feel very differently. And that’s fine, as long as you are honest about why you feel that way.

  And that mythology is an important thing to challenge in a time where the Myth of America is fading. The Myth of Democracy, Socialism, Equality are failing. Gender Roles and and all other societal norms are under assault. In fact, challenging dogma and narratives is what this blog and all of my content is geared towards, even if I don’t get things right all the time.

  

  No one does. Everyone fails. Even our childhood heroes.

  And I know that is difficult, if not downright disturbing, to deal with. But, we’re all going through it, even the people making these movies.

  Look at the radical shift in traditional American conservatives since the 2020 election. They’ve lost something vital, something which had previously animated them; their belief that the institutions of America were redeemable. We didn’t want to believe our courts, our votes were beyond contempt; that our leaders were more than just cowards and traitors. That when it came to a national election for President, no one would be brazen enough to systemically cheat enough to change the outcome of it.

  Don’t believe me? A simple twitter thread became the biggest news story in the U.S. over the past two days.

  You know the one.

  I think I’ve had discussions w/enough Boomer-tier Trump supporters who believe the 2020 election was fraudulent to extract a general theory about their perspective. It is also the perspective of most of the people at the Capitol on 1/6, and probably even Trump himself. 1/x

  — MartyrMade (@martyrmade) July 8, 2021

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

  But back to The Last Jedi. It is the exploration and inquisition of our reactions to events/movies/art that matters. Without intense examination of our own motivations and our own reactions to things there can be no growth.

  The Last Jedi, like Zack Snyder’s Man of Steel and Batman v. Superman: Dawn of Justice provoked people to visceral, all-consuming anger in a portion of their respective fanbases. These stories are our modern mythologies.

  You can dismiss that as the rantings of half-formed man-children or you can show a little empathy and realize that they, like those that have had their illusions ripped from them by the election, are reflecting a part of the same anxiety and fear of the future that exists all across the political divide, in all of us.

  In many ways having Batman murder bad guys is akin to Jesus rising again with an AK-47 and mowing down the Pharisees. These characters and stories are that important to them, even if they are derivatives of the more abiding, universal texts.

  That said, while I’m happy to engage that anger I’m not sympathetic to those still holding onto it after four freaking years. There comes a point where you have to face that thing you reject: that person, movie, poem, etc., go into its cave and overcome it.

  Otherwise, did you not actually listen to the stories you thought you loved so much?

  After a long time of dealing with this, privately taking more than ten thousand words of notes on this subject, I finally just put them all together into one place. One measured monologue.

  What can #StarWars Teach Us About the Culture War?https://t.co/wXHCY7k0ec

  — Tom Luongo (@TFL1728) July 11, 2021

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

  Because what’s the point of pointing out all of the things wrong with the world if I don’t also try to equip you with the tools you need to face what it’s going to throw at you? This isn’t about The Last Jedi or Man of Steel. It’s about all of us, all the time, having to do the hard work of self-examination to build a version of ourselves capable of withstanding the pressures of the day.

  That Batman so many hated watching on screen in BvS, the one obsessed with murdering Superman, is the end game of toxic fan culture. He’s fully objectified his target… “You were never a god…. you weren’t even a man,” he growls at Clark in rage. The same thing happened to Zack Snyder. Only empathy brings him back. His daughter committing suicide brought many back from the brink.

  Well, today, only empathy with people like Rian Johnson and Lucasfilm CEO Kathleen Kennedy can bring many Star Wars fans back from their anger. And if you can do this with something as innocuous as a movie franchise then you can maybe begin to do it in your real life as well.

  Because, the flip side to that is even more true. If you can’t ever forgive the sin of The Last Jedi then how can you ever forgive something or someone even more important to you?

  This is the essence of storytelling. This is why we create stories. Why we tell them to each other. It’s why the Bible and other religious texts are the collected wisdom of hundreds of generations of humans. They are practice runs and training manuals for how we deal with each other in real life.

  YouTube has empowered an entire sub-culture of MGTOW’s, itself the ultimate expression of male weakness in the face of toxic femininity, to obsess about these things and drive ad revenue to them.

  Their hate has made them powerful. They hold sway over a whole rotten sub-culture wallowing in their hate.

  And I believe very strongly they have been helped along by those very people intent on destroying all positive aspects of culture and community. Maybe that’s a little too tin foil hat for you.

  But how else do you account for the theatrical cut of BvS? A cut designed to make the movie and its hero, Superman, as unlikeable and unwatchable as possible?

  If you want proof many executives in Hollywood hate us, I give you that cut and Joss Whedon’s abortion of Justice League as living proof. There was something willful at play there.

  Star Wars, as much as you personally may dismiss is as silly, was and is important to millions of people. And if you were someone trying to destroy a culture wouldn’t you help something so important to entire generations of Americans as Star Wars to destroy itself? Wouldn’t you encourage the fans to fight among themselves, to nurture that anxiety in the real world spilling into their ‘safe space?’

  It’s not like we haven’t seen this playbook before either.

  I know that those same commies worked really hard to separate my generation from the religion of our parents. Star Wars came out at the exact right time in 1977 to have the biggest possible cultural impact it could. And the brunt of that impact, because of the malaise of that decade where myths about America first started failing rapidly, was felt most strongly in my generation of American boys.

  So, doesn’t it only makes sense for them to destroy Star Wars, or even better, encourage it to destroy itself rather than let it thrive during the apotheosis of Great Reset?

  Or are Millennial soy-boys going to try and tell me today’s communists are okay with Christianity now?

  I believe this is true because it is these men they are trying so hard to bankrupt, marginalize, discourage and prevent from having any voice or political power in society today. That’s why they hated Trump so much. They knew the power of our resolve. That’s why he had to go and that’s why they had to do it in the most dishonest and discouraging way imaginable.

  And The Last Jedi gave us a Luke Skywalker that saw this coming and hid from it only to come back out and become an even bigger legend than ever before by saying he was sorry and admitting his failure.

  The sad truth is that all that is good, precious and dear to us is under assault by people who are committed to depravity and control. We do ourselves zero favors thinking of people as enemies those who we share a common love but different opinions about. We can only repair this breaking world if we realize that. Otherwise, the suffering will only continue.

  If we can get back to that empathy with those we disagree with, then maybe, just maybe, Star Wars, like the Myth of America, will have validated itself as something still worth considering.

  *  *  *

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  Tyler Durden
  Mon, 07/12/2021 – 22:00

• Just 5% Of All Bitcoins In Circulation Have Traded In The Past Year
  Just 5% Of All Bitcoins In Circulation Have Traded In The Past Year

  In JPMorgan’s latest weekly bitcoin hit piece (because for some “inexplicable” reason, JPMorgan executive have instructed most of the bank’s strategists, including those covering equity and rates, to slam the cryptocurrency on a weekly if not daily basis while the bank quietly builds out its own proprietary crypto fund, almost as if it is desperate to scare its clients into selling), the bank makes an interesting argument: bitcoin is not liquid enough to be successfully implemented as a legal tender in El Salvador.

  We won’t speak to the validity of JPM’s argument – we will soon find out first hand whether or not El Salvador made a mistake in adopting bitcoin as legal tender – although it certainly is simple enough: “daily payment activity in El Salvador would represent ~4% of recent on-chain transaction volume and more than 1% of the total value of tokens which have been transferred between wallets in the past year,” the report said, with the illiquidity and nature of the volume “potentially a significant limitation on its potential as a medium of exchange.”

  Perhaps, then again in its brief history bitcoin has certainly demonstrated that it is remarkably scalable and viable even without a central bank propping it up every time there is even a modest risk-flaring hiccup, which is much more than we could ever say about the global stock market or currencies such as Europe’s “whatever it takes” euro.

  Of course, JPMorgan – a bank that directly benefited form more than one multibilion bailout – will be the last to admit just how much sustainable the cryptocurrency has become, which is why we will ignore the bank’s latest round of propaganda, but will point out an interesting fact unearthed by JPMorgan: it goes straight to the heart of the recurring argument why bitcoin is so volatile.

  The reason, as JPM has discovered, is that bitcoin’s float may be as little as 5%, if not less. Discussing the daily trading volumes of bitcoin, JPM notes that a large fraction of Bitcoin are locked up in illiquid entities (liquidity sinks), “with more than 90% not changing hands in more than a year” while roughly 80% – and rising – are held by wallets with light turnover.  This means that a paltry 5-10% of all bitcoin in circulation has traded in the past year.

  

  Another way of putting it: an asset with a $600 billion market cap has a float of just $30 billion. Which is remarkable as it means that no whales sold bitcoin when it hit its all time high of $65,000. And if they didn’t sell then, they certainly won’t sell now when it’s half that price.

  This, more than anything else, explains why bitcoin – an asset whose market cap was more than a $1 trillion as recently as April – is so extremely volatile: with the vast majority of bitcoin locked up or held by whale accounts who rarely if ever trade, the marginal price setter of bitcoin are odd lots – a burst of trading in fractions of a bitcoin, where the momentum in many cases is ignited and magnified by HFTs who then shape the movement of the crypto in hopes of hitting the max pain stop loss positions for other cryptos, and where as a result of such a unique trading environment, the price of bitcoin can swing 10%, 15% , or even 20% or more every day.

  The question we have is during liquidation pukes like the one observed recently, how much of the newly released bitcoin are gobbled up by existing or new whales. Judging by the gray line in the chart above, the answer is a record amount.

  Which means that we are now in the “weak hands” shake out and whale accumulation phase. And once the new generation of whales has bought enough, that’s when the next squeeze higher will take place, sending the crypto currency and its peers to fresh all time highs. Because if there is one thing that is very easy to do with an asset whose float is as low as bitcoin’s, it is to manipulate it as a handful of big players want.

  Tyler Durden
  Mon, 07/12/2021 – 21:40

• WHO Is Working On "Digital Wallet" To Store Vaccination Certification: Official
  WHO Is Working On “Digital Wallet” To Store Vaccination Certification: Official

  Authored by Jack Phillips via The Epoch Times,

  A World Health Organization (WHO) official said that the organization is working to develop a COVID-19 vaccine “digital wallet” and is also seeking to “increase the distribution” of an international certificate for those who’ve been vaccinated.

  

  Dr. Michael Ryan, an Irish epidemiologist who is head of the WHO health emergencies program dealing with COVID-19, made the remarks during a daily news briefing on July 12 in Geneva.

  “We have encouraged countries that want to, they may use the international certificate for vaccination and prophylaxis … that requires other countries to recognize that certificate of vaccination,” Ryan said, adding that WHO is “working to increase the distribution of the paper versions of her international certificate of vaccination prophylaxis, and also developing a digital wallet that could be used for the same purpose.”

  The organization, he said, will provide more “detailed data standards” for individual countries “to generate their own digital vaccination certificate, but that does not get around the policy issues around which vaccines are recognized within that system that that is essentially an international policy issue between countries.”

  Ryan didn’t provide details about the digital wallet, which sparked concern and criticism on social media on July 12 about whether such an international vaccine passport-style system could be implemented by WHO for travel.

  WHO officials didn’t immediately respond to a request by The Epoch Times for comment.

  Vaccine passports have been panned by civil liberties and human rights groups, who have said such centralized systems could violate individuals’ privacy. Some Republican lawmakers said passports would create a two-tier society, of unvaccinated and vaccinated individuals—with unvaccinated individuals being denied services or even their rights.

  Among those critics include the left-leaning American Civil Liberties Union (ACLU), which wrote a blog post saying there is “a lot that can go wrong” with vaccine passports.

  “It’s likely that such requests will become over-used as people get asked for credentials at every turn,” the group wrote in late March.

  “While there are legitimate circumstances in which people can be asked for proof of vaccination, we don’t want to turn into a checkpoint society that outlasts the danger of COVID and that casually excludes people without credentials from facilities where vaccine mandates are not highly justified.”

  Several Republican-led states have either passed laws or implemented executive orders barring the use of vaccine passports by local or state government offices, while places including Florida have implemented bans on private businesses from doing so.

  Officials in the Biden administration said several months ago that they aren’t pushing for a federal vaccine passport mandate. Last week, however, White House press secretary Jen Psaki said the administration wouldn’t intervene if businesses use them.

  “That’s not currently the role of the federal government,” Psaki told reporters. “There are a number of private sector entities, universities, institutions, that are starting to mandate, and that’s an innovative step that they will take and they should take. That’s not—and we’re not taking issue with that.”

  Tyler Durden
  Mon, 07/12/2021 – 21:20

• Australia's COVID Outbreak Worsens Despite Economy-Crippling Lockdowns
  Australia’s COVID Outbreak Worsens Despite Economy-Crippling Lockdowns

  By some inexplicable phenomenon, Sydney’s COVID outbreak has continued to worsen (albeit by margins that most cities would consider negligible) despite the lockdown measures that have been in place for nearly three weeks at this point.

  Now, the prospect for another lockdown extension looms as Australia’s largest city and the surrounding state – New South Wales, Australia’s largest by population – reports 112 new locally transmitted COVID-19 cases, almost all of which were linked to Sydney. However, there was a silver lining: the number of newly infected out in the community declined to 34 from 45.

  But fears about the delta variant, which has been driving the spread, might lead to even more draconian measures.

  

  State Premier Gladys Berejiklian said it was this last figure that would, in the coming days, determine whether Sydney’s lockdown, due to end on Friday, would be extended.

  “That’s the number we need to get as close to zero as possible,” Berejiklian said during her daily televised briefing. “It is really up to us. The health expert advice will be based on what those numbers look like. I can’t be clearer than that.”

  Sydney is bracing for a longer and stricter lockdown after continued increases in COVID-19 cases, while the New South Wales Premier stated things are going to get worse before they get better.

  The outbreak has prompted the Australia-Singapore travel bubble to be delayed until at least the end of the year, according to Australian press reports, despite the fact that nearly all of the new cases reported on Monday involved family members or friends of previously diagnosed patients.

  Meanwhile, a new report from Deloitte showed that consumer movement-related activity in the city’s central business district has plunged by nearly 90% in the two weeks since the Sydney lockdown started compared to its levels from two years ago. Even in Melbourne, where restrictions were just lifted, movement remained off 80% from the levels a year ago.

  The drop in activity is placing small businesses and restaurants in a difficult position. The iconic Melbourne rooftop bar Madame Brussels announced Monday that it would become the latest victim of the pandemic when it closes its doors next week after 15 years. “The city’s just not coming back,” co-owner Paula Scholes said.

  

  Andrew’s Bird & Pet Palace, which has been operated for nearly 40 years by the same couple, took in just A$150 in sales on Sunday, vs. an average of more than A$3,000 ($2,245).

  With a total of around 31.2K cases and 911 deaths tallied since the start of the pandemic, Australia has fared far better than many of its rivals. The country’s vaccine rollout.

  Tyler Durden
  Mon, 07/12/2021 – 21:00

• DOJ Retracts Claim It Seized "Fully Constructed" Lego Set From Accused Capitol Rioter
  DOJ Retracts Claim It Seized “Fully Constructed” Lego Set From Accused Capitol Rioter

  Authored by Zachary Stieber via The Epoch Times,

  The Department of Justice has retracted its claim that it seized a “fully constructed U.S. Capitol Lego set” from an accused Capitol rioter.

  

  A U.S. Capitol Lego set seized by FBI agents from Robert Morss, an accused U.S. Capitol rioter. (DOJ)

  In an memorandum asking a court to order Robert Morss be held pending trial, prosecutors claimed that law enforcement officials “recover[e]d a fully constructed U.S. Capitol Lego set” while arresting the defendant.

  But in a supplemental motion, authorities said they erred in conveying that claim.

  “Please note that after a review of the photographs from the search, there appears to have been a miscommunication and that statement appears to be inaccurate. The Lego set was in a box and not fully constructed at the time of the search, as pictured below,” they wrote.

  So the fully constructed Lego set was a lie? pic.twitter.com/hbERXxsPcu

  — THOR the Deplorable 🇺🇸🇺🇸🇺🇸 (@ThorDeplorable) July 12, 2021

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  A lawyer representing Morss did not immediately respond to a request for comment.

  

  Morss is in custody on charges including civil disorder and violent entry of a building on Capitol grounds.

  Surveillance footage showed Morss on Jan. 6 push his way toward a line of officers guarding the Lower West Terrace doors of the Capitol, prosecutors say. He then allegedly grabbed an officer’s shield and passed it back to other members of the crowd.

  Morss and other rioters ultimately entered the Capitol through a broken window, footage showed.

  Prosecutors allege he would pose a danger to the community and present a flight risk if released.

  A hearing on whether to allow Morss’s release is scheduled for July 13.

  Tyler Durden
  Mon, 07/12/2021 – 20:40

• Pfizer Sells "Booster" Jabs To Israel As COVID Cases Rebound
  Pfizer Sells “Booster” Jabs To Israel As COVID Cases Rebound

  Despite boasting higher adult vaccination rates than any other developed nation, Israel is scrambling to stanch a resurgence of new COVID infections after the country’s top scientists revealed that they believed the Pfizer vaccine is only 64% effective at preventing infections involving the Delta variant currently stoking problems across the globe.

  Just last week, Pfizer and its partner BioNTech announced plans to seek approval for a “booster” dose, provoking a rare, and surprisingly adversarial, response from the CDC and FDA. The two government agencies warned that there was presently no reason to believe that a “booster dose” will be necessary.

  

  If nothing else, this simply demonstrates that “the science” is no longer the priority for either Big Pharma, nor the federal government, since Big Pharma is now focused on maximizing profits from its new cash cow, while the federal government is calibrating everything it says and does with an eye toward encouraging as many American adults as possible to get vaccinated.

  And if people read that they’re going to need a booster shot in a few months anyway, why would they bother getting vaccinated now?

  Anyway, having been stymied in the US, Pfizer is trudging ahead with its “booster shot” plans by striking a deal to expedite resupply to Israel, which is planning to administer a third “booster” jab to patients with certain high-risk comorbidities starting Aug. 1.

  The Jerusalem Post reports that the next shipment of Pfizer jabs will arrive on Aug. 1 instead of in September (Israel also has 200K doses of Moderna on hand, but those can only be used on adult patients).

  Israeli PM Naftali Bennett said Sunday: “We have been working on the issue of vaccines for several weeks,” Bennett said. “This morning, I am pleased to announce that after a series of discussions with Pfizer CEO Albert Bourla, we closed a deal last night to move up the next vaccination delivery to August 1.” “There are vaccines for everyone.”

  Last week, Israel announced it had agreed on a vaccine-exchange deal with South Korea. Under the terms of the deal, Israel delivered some 700K doses to South Korea, which it will return when it receives its next vaccine delivery.

  And as we noted earlier, immuno-compromised patients will be able to receive their third shot starting immediately, said Health Minister Nitzan Horowitz.

  In the meantime, Israel continues to register a higher number of daily cases. At the beginning of June, some 10-20 people were found to be new virus carriers every day. Currently, several hundred are testing positive on a daily basis. The number of active cases (which had shrunk to 200 recently) has rebounded to 4,000.

  

  Pfizer will meet with top US health officials on Monday to discuss Pfizer’s push to receive federal authorization for its booster shot, according to the Associated Press.

  “Certainly, immunity decreases over time…the question is how much time,” one doctor told CNBC during an interview Monday morning.

  Before Delta arrived in Israel, some believed the country had reached “herd immunity”. But as Dr. Scott Gottlieb and others have pointed out, COVID is now endemic in the human population, and reaching “COVID zero”, a standard that Israel is aiming at, simply might not be possible. Israeli officials have already acknowledged that with the large percentage of Israeli’s vaccinated, deaths and hospitalizations associated with COVID will likely continue to decline, even if the number of new cases does rise.

  Tyler Durden
  Mon, 07/12/2021 – 20:20

• The ESG Case For Crypto
  The ESG Case For Crypto

  Authored by Omid Malekan via Medium.com, (emphasis ours)

  First, let’s state the obvious: Bitcoin mining uses a lot of electricity, so it’s bad for the environment. Anyone who claims otherwise is either a salesperson or a fool. Arguing that mining is good for the environment because it encourages investment in renewables is like arguing that smoking saves lives by driving cancer research. All of the energy comparisons to the traditional banking system are also foolish.

  There are various nuances to this debate, but none change the fact that Bitcoin has a significant carbon footprint.

  

  But so do a lot of things.

  Tellingly, none are as controversial.

  What’s the carbon footprint of people cranking the AC, ordering takeout and watching Netflix? Significant, but seldom debated. Every kind of human activity impacts the environment, and plenty of mundane activities use “more power than some countries” when measured in aggregate. Deciding which ones are worthwhile requires an objective cost-benefit analysis and comparison to similar activities. Bitcoin mining is rather unique, but for the sake of argument, let’s compare it to the US military.

  Like Bitcoin, the US military uses more energy than some countries. Also like Bitcoin, a big reason why is to secure the purchasing power of a currency. But unlike Bitcoin, the military does this in a roundabout way, protecting unsavory regimes who price their exports in dollars and dropping the occasional bomb. The relationship between money and power is almost as old as money itself, with those issuing the former often utilizing the latter to keep their currency on top. Bitcoin’s clever contribution is to make this previously implicit relationship explicit. People trust its coins because they require a lot of power to produce.

  The ESG case for crypto starts with the recognition that the power consumption of coins like Bitocin and Ether is a feature and not a bug, the most important component of a novel security mechanism that achieves something remarkable: a global monetary system that is independent of any corporation or government, and strictly opt-in.

  There are no exclusive legal tender laws, capital controls or naval fleets that force people to trust Bitcoin. And yet, hundreds of millions do, perhaps for that very reason.

  

  Crypto has no coercion. It uses transparency, math and economic incentives to build trust where it wouldn’t otherwise exist. Crypto is meritocratic. Anyone can do anything — from mining to using to saving — and lots of people all over the world do. Like Lady Justice herself, crypto is blind. It doesn’t care (or even know about) anyone’s nationality, race, age, gender or sexual orientation. It’s the first electronic payment system that is accessible to anyone anywhere, from undcoumented workers in Western countries to women in Islamists ones to dissidents fighting dictators. The environmental impact is therefore offset by the social benefits, a negative E in exchange for a positive S.

  That tradeoff is worth it, thanks to the increasingly tragic failures of the traditional monetary system. Not in terms of devaluation and inflation — though that may come later — but in terms of access. Over one and a half billion global unbanked, most of them poor, undocumented, minority and innocent. That last adjective is important, because the exclusionary nature of our existing financial system is no accident. It’s a direct consequence of a system built on a presumption of guilt.

  As proof, consider the simple fact that opening up a bank account is often more intrusive than having open-heart surgery. Your doctor doesn’t have to collect a bunch of legal documents and perform a background check before doing her job, but your banker does. Most industries operate on a presumption of innocence. They accept anyone as a customer until individual behavior or law enforcement gives them a reason not to. Banking works on the opposite principle. Everyone is a potential terrorist or money launderer until they prove otherwise.

  This presumption of guilt is a minor nuisance for the affluent, but an existential threat to the underprivileged. It’s one reason why poor neighborhoods feature more pseudo-financial services like check cashers and pawn chops than bank branches, even in rich countries. It’s also a contributor to the growing wealth gap. Those who have the least amount of money pay the highest fees, keeping them ensconced in poverty. It’s not that banks don’t want to serve these communities. It’s that so-called anti-money laundering (AML) know-your-client (KYC) & sanctions regulations make it too hard or too expensive for them to do so.

  Bitcoin itself may not be the solution to this problem, but the tokenized financial system that it represents can, because it’s built on a presumption of innocence. Unlike banks and Fintechs who have no choice but to rely on legal identity — the kind that 10 million undocumented workers in America don’t have — tokens rely on cryptographic identity. Math doesn’t discriminate, so anyone who wants to access a blockchain network — to transfer Bitcoins, dollars or any other store of value — is able to. It goes without saying that the vast majority won’t be doing anything illegal. They’ll order goods online or send money back home, without having to pay exorbitant fees.

  Here the crypto critics chime in with the now-cliched canard about illicit use. They claim that a financial system as open to undcoumented Mexicans as it is to affluent Americans will be rife with criminal activity. The inherent racism and classism of this argument aside, it fails a basic smell test. It would be one thing if the existing financial system, for all of its exclusionary tendencies, actually prevented crime. But the numbers indicate otherwise.

  According to the World Economic Forum, an estimated 2 to 5 percent of global GDP — some two trillion dollars per year — is laundered through the banking system. There is $30b a year in credit card fraud, and according to acclaimed economist Kenneth Rogoff, up to a third of all hundred dollar bills are used in illegal activity. The most reliable estimate for the amount of Bitcoins used in illicit activity in 2020 — as published by Chainalysis, the leading government contractor in this domain — is only ten billion dollars, equal to the amount of money-laundering related fines global banks paid in the same period.

  If the existing approach was remotely successful at keeping out the bad guys, then we could have a debate about whether the social costs were worth it. But guilty until proven innocent has failed on both fronts, so it’s time for a new approach, one that shifts the focus from keeping out bad actors to isolating bad money — know your token as opposed to know your client. Here the transparency and immutability of blockchain networks come in handy. Unlike duffel bags full of cash or structured wire transfers, tokens leave a perfect audit trail, one that is increasingly used to solve crimes.

  

  source: Chainalysis

  The social benefits of crypto don’t end there. Tempting as it might be to shift the ESG debate away from speculative bitcoin to less power hungry platforms or central bank digital currencies, we should not shortchange what Bitcoin itself has achieved, which is to appreciate significantly. Skeptics love to complain about its volatility, despite the fact that it has always resolved to the upside. This critique can even be heard on Wall Street, where lots of things — including credit default swaps, Tesla stock and negatively priced oil futures — are also volatile. The inconsistency might have something to do with who has benefited.

  Bitcoin has made a lot of poor, foreign, minority and young people rich, even when factoring in the recent decline. This is in stark contrast to other high flying investments such as venture capital, private equity or real estate, access to which is restricted. Before Bitcoin, a majority of people had no access to the majority of assets — a socioeconomic failure so astonishing that it’s worth repeating: poor people don’t get to invest in most things, due to a nasty combination of misguided laws, high minimum entry prices, lack of infrastructure in poor countries and KYC regulations in rich ones. According to the FDIC, up to a third of all African Americans remain underbanked, and people who have a hard time getting bank accounts have an even harder time opening brokerage ones. But anyone could have bought bitcoin at any time, and even a few dollars invested five years ago would be worth thousands today.

  

  But that’s not how crypto investing is presented. Tellingly, the only time when investment luminaries like Warren Buffet or central bankers like Neel Kashkari comment on the investment potential of Bitcoin is to criticize it — “rat poison squared” according to Buffett and “burning garbage” per Kashkari. Their ignorance of what Bitcoin has achieved for ordinary people brings us to the final ESG argument for crypto, its superior governance.

  Crypto governance is egalitarian. Anyone can contribute, and lots of people all over the world do, by holding tokens, validating transactions, hosting nodes or submitting code. Crypto governance is also meritocratic. There are no politically appointed positions, entrenched incumbents or captured regulators. Some of the most important participants are pseudonymous, because the community doesn’t care where someone comes from or what school they attended.

  All that matters is their contribution, the ultimate embodiment of Emerson’s “doing well as a result of doing good.”

  This is in stark contrast to traditional governance, where power is usually shared by a small group of people who attend the same schools, work at the same companies and exist in the same power circles. No wonder then that Mr. Kashkari (Republican, Wharton MBA, former Goldman banker) and Mr Buffett (Democrat, Wharton MBA, former Goldman shareholder) share a disdain for crypto. If traditional governance was more like crypto governance, then Mr. Kahkari, chief architect of the U.S. government’s TARP program, would have never been able to engineer the taxpayer funded bailouts that disproportionately benefited Warren Buffet’s investment portfolio, almost half of which was in financial stocks at the dawn of the 2008 crisis. Despite his poor judgement at that time, Mr. Buffett is now only richer for the experience. The countless people who lost their home or their job in the same crisis are not.

  Perhaps more than anything, the ESG case for crypto begins and ends with what it isn’t, which is the old way of doing things.

  Tyler Durden
  Mon, 07/12/2021 – 20:00

• Mike Wilson Re-Emerges As Wall Street's Biggest Bear: Here's Why He Expects A 20% Drop In Stocks
  Mike Wilson Re-Emerges As Wall Street’s Biggest Bear: Here’s Why He Expects A 20% Drop In Stocks

  Back in the summer of 2018, when stocks were surging at least until the fourth quarter when the Fed made the policy error of hiking too hard and unleashing the first mini bear market since the financial crisis, and when virtually all sellside analysts were euphorically bullish, Morgan Stanley’s Mike Wilson emerged as the street’s lonesome bear (in addition to SocGen’s permabear Albert Edwards of course), and it was then that Wilson first popularized the concept of the “rolling bear market.” Speaking in May of 2018, Wilson said that “every sector has gone down at least 11 or 12 percent at least once this year. Some were down 18, 19, 20 percent. It’s fooling everybody at the index level, but there’s a lot of pain out there: Staples, homebuilders, some of these semiconductor stocks that are more cyclical are having problems.”

  Fast forward a little over three years, when Wilson has just reincarnated the “rolling” drop concept, only this time it has yet to grow to a fully mature “rolling bear market” and instead in his Monday Weekly Warmup note, Wilson defines what is plaguing thebroader market as a series of “rolling corrections”, which like 2018 has meant that while 2021 has “produced another year of above average returns for major indices, under the surface it has been far from easy to navigate.” This, to Wilson, is a classic mid-cycle transition price action (as a reminder Wilson has been pounding the table on his assertion that the market is now mid-cycle”) resulting in “rotations away from higher risk with deteriorating breadth.” The ultimate outcome of such rolling corrections will be a 20% “de-rating” in the broader market, i.e., an aggressive selloff.

  Here is how Wilson defines his own descent into bearishness:

  Over the past several months we have taken a less optimistic view of the markets than most based on our “mid cycle transition” narrative. During such periods, it’s common for the market to rotate away from early cycle winners toward larger cap, higher quality stocks. This rotation away from early cycle leadership and small caps is now well established and underway (Exhibit 1). There is also a de-rating process for the broader market of approximately 20% that usually occurs (Exhibit 2).

  

  So far, Wilson calculates, that derating process is only about 25% of the way done but he “fully expects it” to complete before year end. That means a forward P/E that is about 18x versus today’s 21.3x, which using simple math means a drop of just under 700 S&P points (assuming flat fwd earnings). And while Wilson notes that “push back to that view has been strong” he reiterates that his bearish conviction “remains high based on other moves we have observed in the markets.”

  Going back to his trademark concept of “rolling bear markets corrections“, Wilson writes that while “the S&P 500 has grinded higher and even exceeded our year end price target thanks to very positive earnings revisions, many sectors and stocks have corrected by 20%+. In fact, one could say we have experienced a rolling correction even as the index has remained in an strong uptrend.”

  Furthermore, and this validates our own recent observations on the technical cracks underneath the market surface, the Morgan Stanley strategist warns that financial markets “have taken on a much more defensive posture which is in-line with his midcycle transition narrative. Nowhere has this defensiveness been more visible than the Treasury market where 10 year yields have plummeted along with the yield curve.”

  

  While most have blamed extreme positioning and short covering on the back of the Fed’s modest hawkishness after its June meeting, Wilson disagrees and argues that rates, and the yield curve topped in March, long before the Fed pivoted in June: “As such, we have taken a different view than the consensus citing the potential for a slow down in the second half of the year due to monetary aggregates’ growth decelerating and peak rate of change on economic and earnings revisions.”

  There’s more behind Wilson’s growing bearish sentiment, and it has to do with the economy’s deteriorating fundamentals.

  In addition to the very difficult comps from last year’s pull forward of demand for many consumer and technology goods, Morgan Stanley’s chief equity strategist also thinks the consensus underappreciates the magnitude of the fiscal stimulus that was distributed in 1Q, or as he puts it, “The effect on personal disposal income, and spending, cannot be over-stated.” And so, given the sharp decline in personal income since the last stimulus checks went out in March, retail sales and consumer spending more generally will likely follow soon, he argues.

  

  Here Wilson notes that while some have countered that the child care tax credit checks will maintain the momentum in consumer spending, he disagrees stating that it doesn’t really compare: “we’re talking about $18B per month versus trillions over the past year from other programs that are fading fast. For example, the expiration of the supplemental unemployment benefits in August which will essentially offset the child care tax credits. Net net, when we include all these programs, our economics team forecasts a trajectory that moves more in line with GDP from here.” Based on the impossible comparisons, Wilson warns that the US economy is headed for a big deceleration in y/y growth from the 22% surge in 1Q21 that troughs at -9% y/y decline in 1Q2022. Unless, of course, a new mega-crisis “unexpectedly emerges” greenlighting the injection of several trillions more in fiscal stimulus – one wonder if said crisis will be the “delta”, “lmabda” variant, or something yet undefined…

  

  Still looking back at the recent economic performance, Wilson notes that the trillions in Q1 stimulus translated into much better than expected GDP, sales growth and operating leverage, which he notes was “part of our bullish view a year ago but now it’s played out and more importantly, it has been embedded into earnings expectations.” Paradoxically, earnings revision breadth has never been higher even though the underlying causes behind the growth bump are now long gone.

  

  Furthermore, absolute increases to 2Q estimates for the S&P 500 since the end of 1Q have amounted to +7.5% or 2x the typical revision during a normal quarter. In some sectors, it’s much more extreme. In particular, we would cite consumer durables and tech hardware as outliers where a payback in demand seems likely.

  Stepping away from economic fundamentals and turning back to recent market performance, Wilson says that he believes “the recent decline in rates, commodities, and cyclical stocks geared to economic growth is indicative of a market that is getting worried about the sustainability of the pace of recovery, especially relative to expectations.”

  He adds that perhaps the greatest warning sign coming from the market is “the increasing deterioration in breadth as the index makes new highs every week”, something we highlighted last week when we showed the collapse in new 52-week highs on the NYSE.

  

  And while the decline in long end rates has appropriately benefited large cap growth stocks over the past month, with the likes of AAPL, MSFT and AMZN all hitting record highs in recent days, Wilson argues that lower rates from here will no longer prove to be beneficial to stocks “as it will signal these growth fears are coming true.”

  We then get to one of Wilson’s favorite topics: The equity risk premium.

  We have long argued that the Equity Risk Premium (ERP) is unlikely to break 275bps on the downside as long as we are in a world of financial repression (Exhibit 9). Indeed, the ERP bottomed once again at that level in April just as rates were topping. Since then, rates have backed up 50bps as ERP has risen by slightly more, thereby keeping PEs the same. From here, our view is that ERP will rise further as rates drift lower, particular as the market starts to interpret these lower rates as bad for economic growth. Furthermore, whenever real 10 year yields have been this low in the context of decelerating growth, the ERP has been materially higher (Exhibit 10).

  

  Conversely, should rates begin to recover and move higher later this year as the growth scare comes to an end, the ERP is unlikely to offset on the downside as it will begin to price in the continued recovery and inevitable move higher in rates as the Fed tapers asset purchases and raises the front end.

  Wilson’s bottom – and bearish – line is that valuations are coming down further as they typically do during all mid cycle transitions; the coming correction also fits with Wilson’s 1940s analog (which he first detailed back in March), in which the MS strategist showed how ERPs bottomed around the same levels about a year after WWII ended and the economy reopened. In other words, “similar to today, the market anticipated the end of the war and appropriately priced the recovery to come. PEs fell sharply once the recovery was in full bloom in 1946 and the Fed began its long move away from the zero bound“

  

  The only difference between the 1940s and now, is that back then the US was coming out of a war; well, according to many the only thing that can keep the US economy – and stocks – growing at the current nosebleed pace, is entrance into a war, either a regional, container conflict or something much bigger: think China.

  Tyler Durden
  Mon, 07/12/2021 – 19:44

• Top US General In Afghanistan Steps Down In "Symbolic End" To America's Longest War
  Top US General In Afghanistan Steps Down In “Symbolic End” To America’s Longest War

  The top US commander in Afghanistan, Army Gen. Austin “Scott” Miller, has stepped down on Monday in what’s being dubbed a symbolic end to to two decades of war. Miller has overseen American military forces in Afghanistan for almost three years, and formally relinquished responsibility in a ceremony in Kabul.

  He’s considered the longest serving commander in Afghanistan and has recently consistently raised the alarm of the pace of Taliban gains amid the US withdrawal effort. According to The Hill, ahead of Biden’s expected August 31 ‘completion’ of the mission date issued last week, “Virtually all other troops, contractors and equipment already have exited, defense officials said on the condition of anonymity because of the issue’s sensitivity.”

  

  Monday’s “Transfer of Authority ceremony” in Kabul handed over the reigns to CENTCOM chief Kenneth “Frank” McKenzie, who will oversee the final exit and deployment of the planned-for approximately 650 troops to guard the large US embassy compound in Kabul.

  McKenzie will manage the final logistics and winding down of the military mission from his headquarters in Tampa. CNN has meanwhile reported that “Rear Adm. Peter Vasely will reportedly lead approximately 650 troops that are responsible for protecting the US Embassy.”

  President Biden in his big Afghan exit speech days ago said it’s “highly unlikely” that “there’s going to be the Taliban overrunning everything and owning the whole country.”

  However, the terror group has continued advancing at lightning pace, particularly in the north, where multiple districts were recently overrun and Afghan forces abandoned their posts in droves. The Taliban has also lately overrun prisons where they’ve freed hundreds or possibly thousands of detained jihadists which have rejoined Taliban ranks.

  An American soldier is speaking truth.#Afghanistan #911 #Taliban pic.twitter.com/iRhKIhbvof

  — Retainer (@againkhilafat) July 9, 2021

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  Hundreds of Afghan national forces have reportedly sought refuge in neighboring Tajikistan, with this episode providing a perhaps early answer to Biden’s rhetorical question last week…

  “They have the capacity. They have the forces. They have the equipment. The question is: Will they do it?,” the US president said of the Afghan government. Based on early clashes (or lack thereof) between national forces and the Taliban, the final answer to this is not looking good.

  Tyler Durden
  Mon, 07/12/2021 – 19:40

• The Illusion Of Action: Cuomo's New Gun Manufacturer Liability Law Is A Colossal Misfire
  The Illusion Of Action: Cuomo’s New Gun Manufacturer Liability Law Is A Colossal Misfire

  Authored by Jonathan Turley,

  Below is my column in the Hill newspaper on the declaration of a gun violence emergency by New York Gov. Andrew Cuomo.  The centerpiece of Cuomo’s plan is a new law to allow victims of gun violence to sue gun manufacturers under a nuisance theory.

  If it sounds familiar that is because it is painfully familiar.  It has failed repeatedly in various states, including New York. It is doubtful that Cuomo truly believes that the law will make a significant, if any, impact on gun violence. However, that is not the point.

  The point is the appearance of action, not the ultimate result of such action.

  

  Here is the column:

  Much of politics is based on what behavioral economists call “action bias,” the compulsion “to act even if there’s no evidence that it will lead to a better outcome.” That bias was evident this week when New York Gov. Andrew Cuomo declared a gun-violence emergency, explaining that “we went from one epidemic to another epidemic.”

  Cuomo’s declaration will do little beyond satisfying a need to act. Indeed, its main component — a law allowing citizens to sue gun manufacturers — will be as productive as trying to win the New York Marathon by running furiously in place. Yet Cuomo noted that crime fears have drained New York City of people and “they’re not coming back unless they feel safe.” That demands action, even when it is purely illusory.

  To be fair, politicians are not alone in action bias. A 2007 study showed the same bias among soccer goaltenders who instinctively jump to the right (44.4 percent) or the left (49.3 percent) without knowing where a penalty kick will land, even though staying in the center (6.3 percent) is the optimal choice. But politics is about perception so “doing something is better than nothing,” even when nothing will likely be achieved.

  Cuomo’s gun emergency package does include some concrete benefits not directly tied to gun violence. Of the $138.7 million in funding, for example, $58 million will go to summer youth programs.

  The highlight of the package, though, is a new law allowing people harmed by firearms to sue the manufacturers. Not only does that law face serious constitutional challenges but similar lawsuits brought on similar grounds have failed miserably in the courts.

  The new law is written to get around a federal ban on such lawsuits. After a slew of lawsuits against the gun industry on a variety of different claims, Congress passed the Protection of Lawful Commerce in Arms Act of 2005, giving gun sellers and manufacturers immunity from liability arising out of the criminal misuse of firearms. The New York law focuses on an exception under the law if a company “knowingly violated a state or federal statute applicable to the sale or marketing” of firearms.

  However, the New York law is precisely what Congress sought to deter in lawsuits designed to curtail Second Amendment rights by seeking “damages and other relief for the harm caused by the misuse of firearms by third parties, including criminals.” The exception under the law expressly refers to knowing or reckless violations of state reporting and qualification rules.

  Cuomo himself may have undermined the law at its signing, declaring that it was designed “to reinstate public nuisance liability for gun manufacturers.” He hailed the law as effectively reversing the federal legislation: “The only industry in the United States of America immune from lawsuits are the gun manufacturers, but we will not stand for that any longer.” Sponsors and supporters specifically referred to the continuing effort to repeal the federal law by using this law to effectively negate it — but states are not allowed to simply negate or nullify federal laws under the Supremacy Clause of the Constitution.

  The law itself does not help much. It advances a vague standard to hold gun manufacturers and sellers responsible for the public nuisance of illegal gun use if they fail to implement “reasonable controls” to prevent the unlawful sale, possession or use of firearms within the state. It only references the federal exception in defining “reasonable controls” to include implementing programs to secure inventory from theft and prevent illegal retail sales. If the law is narrowly confined to such reporting and qualification violations, it is unlikely to have much of an impact on gun manufacturers. If it is used more broadly, it is unlikely to be upheld by the courts. Either way, it is not the law being pitched to the public.

  New York City previously tried to use nuisance law to hold gun manufacturers liable and even challenged the federal law as unconstitutional. It failed on both grounds in 2013 before the U.S. Court of Appeals for the Second Circuit. In City of New York v. Beretta, the Second Circuit left open what a “predicate statute” might look like for the exception, but it rejected the prior nuisance statute. New York responded by simply taking the same nuisance tactic and putting it into a gun law. It is the type of argument that a number of judges (and Supreme Court justices) would find too clever by half.

  Even if the law passes constitutional review, there remains its ambiguous standard. For decades, states and cities have tried to curtail gun sales through nuisance litigation; they have uniformly failed because the effort is transparently an effort to achieve gun control through litigation. They also have sought to hold companies liable vicariously for the crimes of third parties. Yet the Second Amendment is an individually-held right that the Supreme Court has repeatedly protected from such clever legislative measures. Each law was popular when enacted and then bemoaned when it became the vehicle for even greater gun-rights decisions.

  New York has a history of reckless legislation on gun control, and it previously earned the ire of some Supreme Court justices by abandoning litigation. Last year, the court was faced with a challenge to a New York law that imposed what some of us viewed as clearly unconstitutional limits on the transport of lawful firearms (even after it was upheld by lower courts). In passing the law, New York officials publicly promised they were certain of the constitutionality of the law and would litigate it all the way to the Supreme Court. When the court accepted the case for review, however, the same officials bolted like a flock of seagulls to avoid a decision, amending the law to moot the issue before the court could strike it down. The court ultimately dismissed the case, over three dissenting justices. It was a rare instance in which the court resisted such a mootness ruling after a party sought to withdraw — but, then, few litigants were as open about evading a contrary decision. Justices Neil Gorsuch and Clarence Thomas specifically called out New York for “manipulating” the docket by withdrawing an unconstitutional law just before a final opinion.

  Politicians have “action bias” because they know the public favors leaders of action and rarely blame them when their actions prove to be costly failures. The question is whether New York officials will keep this renewed pledge to litigate the law all the way to the Supreme Court. There are at least three justices who likely are eager to see them fulfill that pledge.

  Tyler Durden
  Mon, 07/12/2021 – 19:20

• "I'm Not Seeing This As Transitory": Paint Supplier PPG Raises Prices For Second Time This Year Due To "Obvious" Inflation
  “I’m Not Seeing This As Transitory”: Paint Supplier PPG Raises Prices For Second Time This Year Due To “Obvious” Inflation

  Paint supplier PPG knows that inflation isn’t just “transitory”.

  In fact, the company, who supplies to major manufacturers like Ford and Boeing, is raising the prices of its paint and coatings solely as a result of “inflation in raw material and logistics costs”, according to a new Bloomberg article. 

  Chief Executive Officer Michael McGarry made sure PPG was one of the first to raise prices earlier this year, as the company anticipated an inflationary environment. Now, they’re raising prices again. 

  McGarry said: “What we’re obviously studying now is the need to be out with a third set of price increases. Inflation is across-the-board, it’s obvious and customers don’t have a lot of good ways to counter the argument that we need to have price relief.”

  

  And it isn’t like PPG is just a localized business experiencing a one-off in costs: the company is in more than 70 countries and is still “feeling the pinch from the prices of oil, freight and distribution going up and raw materials running scarce”. 

  “I’m not seeing this as transitory. This work-from-home phenomenon is going to lead to additional wage inflation, because people are going to have the opportunities to figure out where they want to work,” McGarry continued. 

  McGarry says the trend is visible in the U.S. and he expects to see it “spread to other regions”. 

  Meanwhile, one man’s finished product is another man’s raw material: the price of paint and coatings going up will add to raw material supply costs for companies like Stellantis, who is one of PPG’s biggest customers. This comes as other raw materials for automakers, like copper, aluminum and steel, are all rising in price as well. 

  PPG generates about 40% of its revenue in the U.S., Bloomberg notes. It has boosted pricing for 17 consecutive quarters and McGarry says the steak should continue through the rest of this year.

  Tyler Durden
  Mon, 07/12/2021 – 19:00

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