Today’s News 13th October 2022

• The Left Calls For A Ban On Germany's AfD Party Just As The Party Surges In Popularity
  The Left Calls For A Ban On Germany’s AfD Party Just As The Party Surges In Popularity

  Authored by John Cody via Remix News,

  Despite Germany’s claims of democracy, politicians are calling to ban the AfD party…

  

  Members of the Social Democrats (SPD) and the Left party (Die Linke) are calling for a ban on the conservative Alternative for Germany (AfD) party just as it surges in the polls, raising fears that Germany, which prides itself on being democratic, will attempt to completely ban one of the largest parties in the country.

  Dorothea Marx (SPD), a member of the Thuringian state parliament, is one of the politicians calling for the AfD party to be banned.

  “The time is ripe,” Marx told the dpa news agency. Above all, she said, the Thuringian state assembly must act quickly.

  She said that although numerous state branches of the Office for the Protection of the Constitution were monitoring the party, it was only logical for the state to take further measures and exclude it from party funding.

  “The next logical thing then is a ban procedure,” the SPD politician stressed. According to Marx, it would also be possible to ban individual state associations.

  “AfD’s hatred and agitation must no longer be equated with democratic freedom of expression.”

  As Remix News has previously reported, AfD is currently facing extreme surveillance and monitoring, which interferes with the party’s ability to operate. The powerful Office for the Protection of the Constitution domestic intelligence agency has deemed AfD a “suspected threat” to democracy, which enables agents to read emails and listen to phone calls of members without a warrant. It would be the equivalent of the FBI in the United States deeming the Republican Party a “suspected threat” to the constitution and having the power to surveil any party member merely on the basis that they belong to the party.

  AfD’s leadership has long warned that the country’s left-liberal ruling bloc would move to ban the party entirely. Given AfD’s surging popularity, with the party rising to 16 percent in the polls, its highest level ever, many of these rival parties would like to see the opposition party removed entirely from the democratic system.

  SPD”s Marx received support from Thuringia’s Left party politician Katharina König-Preuss, who is known for her connections to Antifa.

  “A ban can help deprive AfD of state funding,” said the state parliament member.

  “A ban can also help to disarm AfD members more quickly. We know of demonstrably around 50 AfD actors armed with live firearms in the state.” The party, she said, is no less “fighting against human dignity, the principle of democracy, and the rule of law than NPD.”

  The idea that banning a party to save democracy is widespread in Germany’s left-wing circles; however, AfD has argued that nobody in the party has ever advocated anti-democratic principles. In fact, there is evidence the party wants to strengthen it by introducing Swiss-style citizen referendums, which would allow citizens to vote on specific issues, which is currently only allowed in some states such as Berlin.

  As Germany’s entire political leadership has moved to slap sanctions on Russia over the war in Ukraine, AfD has pushed for Germany to reopen the Nord Stream 2 pipeline and repair any damage. Germany’s industrial sector is highly reliant on cheap Russian energy, and surging inflation is threatening political unrest. As a result, politicians may be seeking to head off the party before it grows in popularity, as the economic crisis is only expected to worsen.

  Can AfD be banned?

  The far-left is not the only political force seeking to ban AfD, with the center-left Christian Democratic Union (CDU) also calling for a ban on the party in the past. However, despite many of these parties looking to eliminate their rival, there is only one institution, the Federal Constitutional Court, that can truly ban the party.

  In the past, only the Socialist Reich Party (1952) and the Communist Party of Germany (KPD, 1956) were banned. Corresponding proceedings against the ultra-nationalist NPD failed after Germany’s highest court was unable to clarify in the first attempt how great the influence of informers from the Office for the Protection of the Constitution was. In the second attempt, the Karlsruhe body ruled that although NPD wanted to abolish the free democratic state order, it was ultimately too insignificant.

  AfD has never promoted any of the ultra-nationalist policies of NPD, but given its recent success, the party is certainly not insignificant.

  Tyler Durden
  Thu, 10/13/2022 – 02:00

• Escobar: Terror On Crimea Bridge Forces Russia To Unleash Shock'n'Awe
  Escobar: Terror On Crimea Bridge Forces Russia To Unleash Shock’n’Awe

  Authored by Pepe Escobar via The Cradle,

  The western narrative of a ‘losing Russia’ has just been decimated by Moscow’s blitzkrieg against Ukraine and its foreign-backed terror operations…

  

  The terror attack on Krymskiy Most – the Crimea Bridge – was the proverbial straw that broke the Eurasian camel’s back.

  Russian President Vladimir Putin neatly summarized it: “This is a terrorist attack aimed at destroying the critical civilian infrastructure of the Russian Federation.”

  The head of the Russian Investigative Committee, Alexander Bastrykin, confirmed face-to-face with Putin that Terror on the Bridge was carried out by the SBU – Ukrainian special services.

  Bastrykin told Putin, “we have already established the route of the truck, where the explosion took place. Bulgaria, Georgia, Armenia, North Ossetia, Krasnodar… The carriers have been identified. With the help of operatives of the FSB, we managed to identify suspects.”

  Russian intel leaked crucial info to military correspondent Alexander Kots. The cargo was ordered by a Ukrainian citizen: explosives packed in 22 pallets, in rolls of film under plastic wrap, were shipped from Bulgaria to the Georgian port of Poti. Afterwards, the cargo was loaded onto a truck with foreign license plates and proceeded overland to Armenia.

  Clearance at the Armenia-Russia border was smooth – according to the rules of the Eurasian Customs Union (both Russia and Armenia are members of the Eurasian Economic Union, or EAEU). The cargo evidently avoided detection through X-rays. This route is standard for truckers traveling to Russia.

  The truck then re-entered Georgia and crossed the border into Russia again, but this time through the Upper Lars checkpoint. That’s the same one used by thousands of Russians fleeing partial mobilization. The truck ended up in Armavir, where the cargo was transferred to another truck, under the responsibility of Mahir Yusubov: the one that entered the Crimean bridge coming from the Russian mainland.

  Very important: the transport from Armavir to a delivery address in Simferopol should have happened on October 6-7: that is, timed to the birthday of President Putin on Friday the 7th. For some unexplained reason, that was postponed for a day.

  The driver of the first truck is already testifying. Yusubov, the driver of the second truck – which exploded on the bridge – was “blind:” he had no idea what he was carrying, and is dead.

  At this stage, two conclusions are paramount.

  • First: This was not a standard ISIS-style truck suicide bombing – the preferred interpretation in the aftermath of the terror attack.

  • Second: The packaging most certainly took place in Bulgaria. That, as Russian intel has cryptically implied, indicates the involvement of “foreign special services.”

  ‘A mirage of cause and effect’

  What has been revealed in public by Russian intelligence tells only part of the story. An incandescent assessment received by The Cradle from another Russian intel source is way more intriguing.

  At least 450 kg of explosives were employed in the blast. Not on the truck, but mounted inside the Crimea Bridge span itself. The white truck was just a decoy by the terrorists “to create a mirage of cause and effect.” When the truck reached the point on the bridge where the explosives were mounted, the explosion took place.

  According to the source, railroad employees told investigators that there was a form of electronic hijacking; the terror operators took control of the railway so the train carrying fuel received a command to stop because of a false signal that the road ahead was busy.

  Bombs mounted on the bridge spans were a working hypothesis largely debated in Russian military channels over the weekend, as well as the use of underwater drones.  

  In the end, the quite sophisticated plan could not follow the necessarily rigid timing. There was no alignment by the millimeter between the mounted explosive charges, the passing truck and the fuel train stopped in its tracks. Damage was limited, and easily contained. The charges/truck combo exploded on the outer right lane of the road. Damage was only on two sections of the outer lane, and not much on the railway bridge.

  In the end, Terror on the Bridge yielded a short, Pyrrhic PR victory – duly celebrated across the collective West – with negligible practical success: transfer of Russian military cargo by railway resumed in roughly 14 hours.

  And that brings us to the key information in the Russian intel source assessment: the whodunnit.

  It was a plan by the British MI6, says this source, without offering further details. Which, he elaborates, Russian intel, for a number of reasons, is shadow-playing as “foreign special services.”

  It’s quite telling that the Americans rushed to establish plausible deniability. The proverbial “Ukrainian government official” told CIA mouthpiece The Washington Post that the SBU did it. That was a straight confirmation of an Ukrainska Pravda report based on an “unidentified law enforcement official.”

  The perfect red line trifecta

  Already, over the weekend, it was clear the ultimate red line had been crossed. Russian public opinion and media were furious. For all its status as an engineering marvel, Krymsky Most represents not only critical infrastructure; it is the visual symbol of the return of Crimea to Russia.

  Moreover, this was a personal terror attack on Putin and the whole Russian security apparatus.

  So we had, in sequence, Ukrainian terrorists blowing up Darya Dugina’s car in a Moscow suburb (they admitted it); US/UK special forces (partially) blowing Nord Stream and Nord Stream 2 (they admitted and then retracted); and the terror attack on Krymsky Most  (once again: admitted then retracted).

  Not to mention the shelling of Russian villages in Belgorod, NATO supplying long-range weapons to Kiev, and the routine execution of Russian soldiers.

  Darya Dugina, Nord Streams and Crimea Bridge make it an Act of War trifecta. So this time the response was inevitable – not even waiting for the first meeting since February of the Russian Security Council scheduled for the afternoon of 10 October.

  Moscow launched the first wave of a Russian Shock’n Awe without even changing the status of the Special Military Operation (SMO) to Counter-Terrorist Operation (CTO), with all its serious military/legal implications.

  After all, even before the UN Security Council meeting, Russian public opinion was massively behind taking the gloves off. Putin had not even scheduled bilateral meetings with any of the members. Diplomatic sources hint that the decision to let the hammer come down had already been taken over the weekend.

  Shock’n Awe did not wait for the announcement of an ultimatum to Ukraine (that may come in a few days); an official declaration of war (not necessary); or even announcing which ‘”decision-making centers” in Ukraine would be hit.

  The lightning strike de facto metastasizing of SMO into CTO means that the regime in Kiev and those supporting it are now considered as legitimate targets, just like ISIS and Jabhat al-Nusra during the Anti-Terror Operation (ATO) in Syria.

  And the change of status – now this is a real war on terror – means that terminating all strands of terrorism, physical, cultural, ideological, are the absolute priority, and not the safety of Ukrainian civilians. During the SMO, safety of civilians was paramount. Even the UN has been forced to admit that in over seven months of SMO the number of civilian casualties in Ukraine has been relatively low.

  Enter ‘Commander Armageddon’

  The face of Russian Shock’n Awe is Russian Commander of the Aerospace Forces, Army General Sergey Surovikin: the new commander-in-chief of the now totally centralized SMO/CTO.

  Questions were being asked non-stop: why didn’t Moscow take this decision way back in February? Well, better late than never. Kiev is now learning they messed with the wrong guy. Surovikin is widely respected – and feared: his nickname is “General Armageddon.” Others call him “Cannibal.” Legendary Chechen President Ramzan Kadyrov – also a colonel general in the Russian military – lavishly praises Surovikin as “a real general and warrior, an experienced, strong-willed and far-sighted commander.”

  Surovikin has been commander of the Russian Aerospace Forces since 2017; was awarded the title of Hero of Russia for his no-nonsense leadership of the military operation in Syria; and had on the ground experience in Chechnya in the 1990s.

  Surovikin is Dr. Shock’n Awe with full carte blanche. That even rendered idle speculations that Defense Minister Sergei Shoigu and Chief of the General Staff Valery Gerasimov were removed or forced to resign, as speculated by the Wagner group Telegram channel Grey Zone.

  It is still possible that Shoigu – widely criticized for recent Russian military setbacks – could be eventually replaced by Tula Governor Alexei Dyumin, and Gerasimov by the Deputy Commander-in-Chief of the Ground Forces, Lieutenant General Alexander Matovnikov.

  That’s almost irrevelant: all eyes are on Surovikin.  

  MI6 does have some well-placed moles in Moscow, relatively speaking. The Brits had warned Ukrainian President Volodymyr Zelensky and the General Staff that the Russians would be launching a “warning strike” this Monday.

  What happened was no “warning strike,” but a massive offensive of over 100 cruise missiles launched “from the air, sea and land,” as Putin noted, against Ukrainian “energy, military command and communications facilities.” 

  MI6 also noted “the next step” will be the complete destruction of Ukraine’s energy infrastructure. That’s not a “next step:” it’s already happening. Power supply is completely gone in five regions, including Lviv and Kharkov, and there are serious interruptions in other five, including Kiev.

  Over 60 percent of Ukrainian power grids are already knocked out. Over 75 percent of internet traffic is gone. Elon Musk’s Starlink netcentric warfare has been “disconnected” by the Ministry of Defense.

  Shock’n Awe will likely progress in three stages.

  • First: Overload of the Ukrainian air defense system (already on).

  • Second: Plunging Ukraine into the Dark Ages (already in progress).

  • Third: Destruction of all major military installations (the next wave).

  Ukraine is about to embrace nearly total darkness in the next few days. Politically, that opens a completely new ball game. Considering Moscow’s trademark “strategic ambiguity,” this could be a sort of Desert Storm remixed (massive air strikes preparing a ground offensive); or, more likely, an ‘incentive’ to force NATO to negotiate; or just a relentless, systematic missile offensive mixed with Electronic Warfare (EW) to shatter for good Kiev’s capacity to wage war.

  Or it could be all of the above.

  How a humiliated western Empire can possibly raise the stakes now, short of going nuclear, remains a key question. Moscow has shown admirable restraint for too long. No one should ever forget that in the real Great Game – how to coordinate the emergence of the multipolar world – Ukraine is just a mere sideshow. But now the sideshow runners better run for cover, because General Armageddon is on the loose.

  Tyler Durden
  Wed, 10/12/2022 – 23:25

• Watch: Boeing Dreamlifter's Wheel Falls Off After Takeoff
  Watch: Boeing Dreamlifter’s Wheel Falls Off After Takeoff

  Aviation blog FlightGlobal posted a video of a Boeing 747-400 Large Cargo Freighter, known as the Dreamlifter, experiencing a landing-gear malfunction that resulted in the loss of a wheel. 

  

  The Dreamlifter took off from Taranto-Grottaglie Airport in Italy on Tuesday when trailing black smoke poured from the plane’s main landing gear. This happened in a split second as one of the wheels fell off and plunged to the ground. 

  Un Boeing 747 Dreamlifter operat de Atlas Air (N718BA) care a decolat marți dimineață (11OCT22) din Taranto (IT) spre Charleston (SUA) a pierdut o roată a trenului principal de aterizare în timpul decolării.

  Avionul operează zborul #5Y4231 și transportă componente de Dreamliner. pic.twitter.com/R95UHkLD7V

  — BoardingPass (@BoardingPassRO) October 11, 2022

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

  The world’s longest cargo aircraft is operated by Atlas Air Worldwide Holdings Inc. Flightradar24 data showed the cargo plane continued with its planned flight path and landed safely eleven hours later at a Boeing production facility in Charleston, South Carolina.

  #5Y4231 on the ground safely in Charleston. https://t.co/QpORCsXV4l pic.twitter.com/q7w9yEH1Zp

  — Flightradar24 (@flightradar24) October 11, 2022

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

  After the wheel hit the runway, it bounced to a nearby vineyard. It was found shortly after the incident. 

  

  In a statement to the British online newspaper The Independent, a Boeing spokesperson confirmed the plane landed safely after encountering a landing gear issue: 

  “A Dreamlifter cargo flight operated by Atlas Air landed safely earlier today at Charleston International Airport, after losing a wheel assembly from its landing gear on takeoff from the Taranto-Grottaglie Airport in Italy this morning.

  “We will support our operator’s investigation.”

  The cause of the incident isn’t yet clear… 

  Tyler Durden
  Wed, 10/12/2022 – 23:05

• Will The Supreme Court End Affirmative Action?
  Will The Supreme Court End Affirmative Action?

  Authored by Peter Van Buren via TheAmericanConservative.com,

  If you thought the Supreme Court threw up some dust overturning Roe v. Wade, watch this current term as the Court considers overturning Grutter v. Bollinger and decides whether “race-conscious” admissions programs at Harvard and the University of North Carolina are lawful.

  

  The two cases the Court might use to overturn Grutter, Students for Fair Admissions Inc. v. President & Fellows of Harvard College and Students for Fair Admissions, Inc. v. University of North Carolina, pose three questions. First, can race be a factor in admissions? Second, has Harvard violated Title VI of the Civil Rights Act by penalizing Asian-American applicants? And third, quoting the Court, can a university “reject a race-neutral alternative because it would change the composition of the student body, without proving that the alternative would cause a dramatic sacrifice in academic quality or the educational benefits of overall student-body diversity?”

  The essential question, then, is this: can race continue to be a factor in university admissions?

  In 2003, the Court in Grutter upheld affirmative action in academic admissions, saying race can indeed be considered in admissions decisions alongside things like tests and grades. After being denied admission to University of Michigan Law School, white student Barbara Grutter sued the school, alleging it discriminated against her on the basis of race in violation of the Fourteenth Amendment’s right to equal protection, as well as Title VI of the Civil Rights Act of 1964. She claimed, in the words of the Court, that she was rejected because the law school “used race as a ‘predominant’ factor, giving applicants belonging to certain minority groups a significantly greater chance of admission than students with similar credentials” from disfavored racial groups such as whites and Asians.

  Precedent was not on her side. The earlier Bakke case was seen as binding precedent establishing that fostering diversity was a “compelling state interest.” The Grutter Court similarly claimed that, in light of Bakke, the “Law School’s use of race was narrowly tailored because race was merely a potential ‘plus’ factor.” Viewing a candidate’s race as a “bonus” was allowed, but using race as the predominant criteria for admission was not.

  The Court found the Law School’s “narrowly tailored use of race” in admissions decisions furthered “a compelling interest in the educational benefits that flow from a diverse student body and is not prohibited by the Equal Protection Clause.” What some came to call “reverse discrimination” was allowed within certain boundaries because it furthered the “compelling interests” of a more diverse student body and broader access to higher education.

  The premise behind the Grutter decision is that disparities between groups in things such as admissions are always the result of discrimination. In this view, the focus on individual rights (such as Barbara Grutter’s) distracts from the more important struggle against systemic racism.

  The problems with this idea are manifold. Space at all academic institutions, and especially at the top tier ones, is limited. To explicitly favor one group necessarily means excluding other groups. That is why Students for Fair Admissions Inc. v. President & Fellows of Harvard College has amici groups that believe Harvard is violating the Civil Rights Act by penalizing Asian American applicants in favor of blacks. These groups include Chinese American Citizens Alliance, the Jewish Coalition for Religious Liberty, the Asian American Coalition For Education, and the Asian American Legal Foundation. Also included is the Coalition for TJ, a group representing Northern Virginia’s super magnet school Thomas Jefferson High, which won a suit recently that deemed the school’s race-based admissions policy illegal.

  The tide is turning around the nation. In addition to the win for a return to merit-based admissions at Thomas Jefferson High, the San Francisco School Board returned the admissions policy at Lowell, the city’s most prestigious public high school, to the merit-based system it had used for more than a century. New York City’s most sought-after high schools, including Stuyvesant, held on to their merit-based system even as other high schools switched to a lottery system.

  If Grutter is overturned, that would end 45 years of precedent holding that race could be used as one factor among many in evaluating applicants. The universities argue race-based decisions are lawful, and serve an important national interest.

  Colleges have a long, sordid history of discriminatory admissions policies. Kenneth Marcus, assistant secretary for civil rights at the Trump administration’s education department, said Harvard’s treatment of Asian students was reminiscent of its efforts to limit Jewish enrollment. 

  “Just as Harvard in the 1930s thought that Jewish students lacked the character to make them good Harvard men,” he said, “so today they often view Asian students as lacking the appropriate character.” 

  One defender of affirmative action in admissions almost seemed to confirm the opposition’s point, telling the New York Times that “Race-conscious admissions policies are a critical tool that ensures students of color are not overlooked in a process that does not typically value their determination, accomplishments and immense talents.”

  Like Roe, Grutter and Bakke represent efforts by the Supreme Court to remake society through judicial fiat. With Grutter, the Court took it upon itself to endorse the use of race in admissions by claiming the nation had a “compelling interest” in a racially diverse higher-education system. 

  And the potential fallout from overruling Grutter is huge. According to documents filed with the Supreme Court, a reversal of the current race-conscious standard could shrink the percentage of black students admitted to Harvard by more than two-thirds.

  While they are significantly more likely on a proportional basis to be enrolled at Harvard than whites, black applicants’ SAT scores were significantly lower than those of whites. Harvard’s existing policies roughly quadruple the likelihood an African-American applicant would be accepted relative to a white student with similar academic qualifications. Most African Americans fell into the bottom 20 percent of all applicants to both Harvard and UNC, but were admitted at the highest rate in almost every performance decile.

  In the two upcoming cases, the Court has a chance to realign itself and college admissions with popular opinion. A 2019 survey found 73 percent of Americans said colleges and universities should not consider race or ethnicity when making decisions about student admissions. Justice Kentaji Brown Jackson will not recuse herself from these cases despite having been involved with one of them in the lower courts. She will join liberals Kagan and Sotomayor in likely support of affirmative action. Those justices will be largely unsupported by the public and their Court colleagues. The next class at Harvard and other sought-after schools may look very different from the one that starts this fall ahead of the Court’s decision.

  *  *  *

  Peter Van Buren is the author of We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People, Hooper’s War: A Novel of WWII Japan, and Ghosts of Tom Joad: A Story of the 99 Percent.

  Tyler Durden
  Wed, 10/12/2022 – 22:45

• CPI Preview: Another Market Freakout On Deck?
  CPI Preview: Another Market Freakout On Deck?

  The most important day of the week – and month – is finally here. After a stronger than expected employment print, and a stronger than expected PPI report today both hammered stocks sending them tumbling to fresh 2022 lows after falling for 6 consecutive days, we finally get the September CPI report, a number which as we reported previously could send stocks soaring as much as 3% or tumbling more than 5%. One thing is certain: if we are going by recent historical precedent, expect lots of digital red ink tomorrow (see below).

  For those who missed our market matrix, here it is again courtesy of JPM’s Andrew Tyler: 

  •  CPI prints above 8.3% ->  this will be another -5% day. The Sep 13 CPI print, when the whisper number was a miss but got a beat instead (8.3% vs. 8.1% consensus; 8.5% prior) triggered a 4.3% decline in the SPX as Credit outperformed.
  • CPI prints 8.1% – 8.3% -> also a negative outcome, with SPX -1.5% – 2%, potentially characterized by a buyers strike. The bigger concern here, according to JPM, is the bond market repricing to increase the probability of a 75bps hike in December.
  • CPI prints 7.9% – 8.0% -> this is likely enough to stage a rally, perhaps +75bps – 100bps. Currently, Bloomberg’s mash up of economic forecasts show 2022 Q4 averaging 7.2%, meaning that if we see an 8.0% print this week, then the next two prints need to average 6.9%.
  • CPI prints below 7.9% -> should this come to fruition, JPM thinks a +2-3% day is most likely, though if we see CPI gap down more than 60bps (largest is the move from 9.1% to 8.5%) the move could be larger; then calls for a Fed pause/pivot may become deafening.

  Now that we know how the market should react, here is what Wall Street expects: 

  • Headline YoY, 8.1% for October, vs 8.3% in September
  • Headline MoM, 0.2% for October, vs 0.1% in September
  • Core YoY, 6.5% for October, vs 6.3% in September
  • Core MoM, 0.4% for October, vs 0.6% in September

  What about the banks? Here are the big ones, starting with Goldman:

  “We expect a 0.41% increase in the core CPI in September, corresponding to a 0.2pp increase in the year-over-year rate to 6.50%, and expect a 0.26% increase in headline CPI, corresponding to a 0.2pp decline in the year-over-year rate to 8.10%”

  … Deutsche Bank:

  Our US economists expect the headline to show a +0.3% MoM gain (+0.1% in August) and core to gain +0.5% (+0.6% in August). They also recently published a note on inflation here, pointing to an array of metrics indicating that pressures remain elevated and broad-based. Our economics team forecasts a +0.4% print for core (+0.4% in August).

  … and JPM:

  • Headline YoY, 8.1% for October, 7.1% for November, and 6.4% for December.
  • Headline MoM, 0.3% for October, 0.0% for November, and 0.0% for December.
  • Core YoY, 6.5% for October, 5.9% for November, and 5.5% for December.
  • Core MoM, 0.45% for October, 0.2% for November, and 0.2% for December

  A detailed breakdown by Bank reveals that most expect a core CPI print between 0.3% and 0.5% (which probably means a print either below or above this range).

  • Wrightson ICAP: 0.5%
  • Morgan Stanley: 0.5%
  • HSBC: 0.5%
  • Societe Generale: 0.5%
  • TD Securities: 0.5%
  • Wells Fargo: 0.5%
  • UniCredit: 0.5%
  • Jefferies: 0.5%
  • Bank of Montreal: 0.5%
  • JP Morgan: 0.5%
  • Citigroup: 0.5%
  • Credit Suisse: 0.5%
  • BofA: 0.4%
  • Deutsche Bank: 0.4%
  • Barclays: 0.4%
  • Nomura Securities: 0.4%
  • BNP Paribas: 0.4%
  • Goldman Sachs: 0.4%
  • Pantheon Macroeconomics: 0.4%
  • Capital Economics: 0.3%
  • UBS Securities: 0.3%
  • Evercore ISI: 0.3%

  A relatively tame distribution across an average estimate of 0.43% and a 0.4% median.

  

  Not surprisingly, most traders are bearishly biased ahead of the CPI print (we will note some more on this in a subsequent post) because with only one exception – the CPI report for July –  the S&P 500’s response has been to slide every time the data was released as inflation came in mostly hotter than expected. Another reason: the S&P has fallen on 7 out of 9 CPI release days in 2022, which is likely the result of core CPI prints that have been almost uniformly higher than estimates. In fact, as shown in the chart below, core CPI has come in at or above expectations on 9 of the past 11 occasions.

  

  Confirming that at a time when the “data-dependent” Fed only cares about taming inflation, the CPI has become the most important driver of short-term returns, Barclays strategists plotted the S&P 500 performance against top 10 economic indicators such as monthly payrolls and quarterly GDP; they found that over the past decade never have stocks been so negatively reactive to an economic indicator as they are now to CPI.

  

  From a purely fundamental perspective, JPM chief economist Michael Feroli laid out the following reasons for his CPI forecast:

  “We estimate that the consumer price index (CPI) rose 0.3% in September. This would be the firmest print since June, in part because we think that the September decline in the energy CPI (forecast: -2.4%) will be more modest than the drops that were reported for July and August. We believe headline inflation will remain strong on an over-year-ago basis, but we do expect some cooling relative to recent prints, with the headline CPI up 8.1%oya in September. We believe that food price inflation remained strong in September, but we do expect some softening relative to recent gains with the food CPI up 0.7% in September. Away from food and energy, we forecast another solid print for the core CPI index (0.5%), with this measure up 6.5%oya in September (up from 6.4% in August).

  For the core index, we think the September monthly change will be right on the cusp between rounding to 0.4% and 0.5% with a 0.45% reading expected. We think the firmness in this index will continue to be tied to strength in the rent measures, and we forecast that tenants’ rent rose 0.72% in September while owners’ equivalent rent increased 0.69%. But we do expect declines in prices for a few other categories to help the monthly change in core inflation to step down between August and September. Industry data signal cooling in vehicle prices and we forecast that new vehicle prices edged down 0.1% in September while used vehicle prices fell 1.2%. We also look for a 0.7% decline in lodging prices as the jump in prices reported earlier in the year continues to come undone. Communication prices have been trending lower lately and we forecast a 0.1% decline for this CPI measure for September.

  Rent isn’t the only area for which we expect firmness in September and we estimate that medical care prices in the CPI rose 0.5%, continuing their solid upward trend. We also believe that public transportation prices rose 0.8% in September, undoing a portion of the 3.2% drop reported for August.”

  

  What about Goldman? Well, as the bank writes in its CPI preview note (available to pro subs here), Goldman expects a 0.41% increase in the core CPI in September (just below that of JPM), corresponding to a 0.2% increase in the year-over-year rate to 6.50% (in line with consensus), and expects a 0.26% increase in headline CPI, corresponding to a 0.2% decline in the year-over-year rate to 8.10%, also on top of expectations.

  The bank’s sellside researchers are looking for strength in new car prices & services inflation (due to wage pressures, labor shortages, and elevated short-term inflation expectations). Specifically, they also look for a strong set of shelter readings (rent +0.70% and OER +0.64%), a 2% rebound in airfares, and a 0.5% rise in education prices; they also expect more gains in the car insurance category, as carriers push through price increases to offset higher repair and replacement costs. The bank highlights three key component-level trends this month.

  1. Timely auction data suggests that used car prices likely fell about 2.5% in September, while reduced dealer incentives suggest new car prices likely rose about 1%.
  2. Education prices are expected to increase 0.5% this month, as schools pass through higher costs to consumer prices at the start of the new school year.
  3. Rent inflation will increase by 0.7% as the official index continues to catch up to the price levels implied by alternative web-based measures of asking rents on new leases.”

  

  Curiously, contrary to prevailing consensus, Goldman notes that “whispers are for a softer than consensus print hence some asymmetry to the downside for stocks.“

  Finally, in yesterday’s market wrap note from Goldman’s John Flood (also available to pro subscribers), he lays out his own market reaction matrix which is not that far off from what JPMorgan expects: here is his framework:

  • Above 8.2%, S&P loses 3+%
  • 8 – 8.2%, S&P loses 1 – 2%
  • 7.8 – 7.9%, S&P gains 1 – 2%
  • Below 7.8%, S&P gains 3+% (which should be faded as fed is going 75bps in Nov regardless)

  Another somewhat bullish take comes from Goldman flow trader, Nohshad Shah:

  MARKETS ARE AT A PIVOTAL JUNCTURE…if CPI misses, then we can easily take out a rate hike from 2023 pricing…and the FOMC may be more inclined to signal the end is in sight. Stocks would rally hard as we approach the peak of the cycle, and we would see a drop in implied vols across the rates, fx and equity complex. If we transition into a “post peak-hawkishness” world whereby the Fed delivers the forwards but doesn’t continue to out-hawk the market, then I think two key things happen to rates…firstly, the front-end gets pinned and the 10y leads the move in either direction. This is a marked shift from the year-to-date dynamics whereby the curve traded with an inverse beta to rate level…relatedly, if central banks do indeed signal the end of the hiking cycle in Q1 23, then the market moves to trade “inflation tolerance” – the idea that a somewhat higher level of inflation is accepted. This means steeper rate curves and higher inflation breakevens. NEVERTHELESS…a big beat in core inflation will set the market loose again…and one should be prepared to re-engage in this year’s dominant market themes: higher US rates, stronger $, lower stocks…

  Finally, perhaps the most dovish take comes from JPM economist Michael Hanson who says that inflation (away from Europe) appears to have peaked:

  From a global perspective, headline inflation looks to have peaked outside of Europe and is now slowing as we have anticipated. We also forecast a gradual deceleration in core inflation as well, although September releases thus far look to be running slightly above expectations on net. Based on a combination of available September CPI data and our forecasts, the %3m rate in global core inflation ticked up to a 4.9%ar in September from a 4.8%ar in August. Monthly gains in core prices are still strong by historical standards and are expected to remain above central bank comfort zones into early next year.

  

  Tyler Durden
  Wed, 10/12/2022 – 22:25

• Joe Biden Defends Hunter On Possible Criminal Charges
  Joe Biden Defends Hunter On Possible Criminal Charges

  Authored by Frank Fang via The Epoch Times (emphasis ours),

  President Joe Biden on Tuesday said he has “great confidence” in his son, downplaying reports that federal investigators have enough evidence to charge the first son with tax crimes and a false statement on a gun purchase.

  

  Biden made the remark during an interview with CNN, when the president was asked to comment about an Oct. 6 article by The Washington Post, which cited anonymous sources who said that federal agents had “determined months ago” that they had put together a viable criminal case against Hunter Biden.

  “Personally and politically, how do you react to that?” CNN host Jake Tapper asked Biden.

  “Well, first of all, I’m proud of my son,” Biden said in response. “This is a kid who got, not a kid—he’s a grown man. He got hooked on—like many families have had happen, hooked on drugs. He’s overcome that. He’s established a new life.”

  BIDEN: “I’m proud of my son. This is a kid who got, not a kid, he’s a grown man. He got hooked on, like many families have had happen, hooked on drugs.”

  pic.twitter.com/x2dFPoMRT2

  — Benny Johnson (@bennyjohnson) October 12, 2022

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

  Biden added that he is “confident” that what his son “says and does are consistent with what happens.” To provide an example, he pointed to his son’s memoir “Beautiful Things” and said Hunter Biden was “straightforward” in his book.

  

  The president defended his son over allegations that Hunter Biden lied on a background check before buying a handgun in October 2018.

  “This thing about a gun—I didn’t know anything about it,” Biden said. “But turns out that when he made application to purchase a gun, what happened was … you get asked a question, are you on drugs, or do use drugs? He said no. And he wrote about saying no in his book.”

  According to the Post, Biden answered “no” to the question of whether he was “an unlawful user of, or addicted to, marijuana or any depressant, stimulant, narcotic drug, or any other controlled substance?” The question appears on the Firearms Transaction Record (Form 4473), a six-page form (pdf) prescribed by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives that needs to be filled out when people buy a firearm.

  Lying on Form 4473 is a federal violation punishable by up to 10 years in prison and a $250,000 fine.

  Hunter Biden wrote in his memoir that he was battling with addiction in 2018.

  “So, I have great confidence in my son,” Biden continued. “I love him and he’s on the straight and narrow, and he has been for a couple years now. And I’m just so proud of him.”

  In response to the Post’s report, Hunter Biden’s lawyer, Chris Clark, did not say whether he believes his client will be charged. In a statement, Clark said, “That is the job of the prosecutors. They should not be pressured, rushed, or criticized for doing their job.”

  The decision of whether to charge Hunter Biden rests with U.S. Attorney David Weiss,  a holdover from the Trump administration who is overseeing the investigation of the president’s son.

  ‘Tip of the Iceberg’ 

  Republicans on the House Oversight Committee took to Twitter on Oct. 6 to say that Hunter Biden’s alleged tax and gun-purchase crimes as reported by the Post are “just the tip of the iceberg.”

  “Hunter & the Biden family have peddled access to enrich themselves, racking up 150 SARs for shady deals,” the GOP lawmakers wrote. “Even worse, we know Joe was involved in selling U.S. natural gas to China. We’ll keep pushing for transparency & accountability.”

  U.S. banks are required by law to flag cash transactions exceeding $10,000 per day and automatically file Suspicious Activity Reports (SARs) in an effort to prevent criminal activities, such as money laundering and tax evasion.

  

  “Text messages show that Hunter Biden was aware of these SARs and took steps to avoid detection in his financial dealings,” Rep. James Comer (R-Ky.), wrote in a letter to Hunter Biden’s financial adviser in July, pointing to 150 SARS flagged by 13 banks including Bank of America, Citi Bank, and Bank of China.

  Comer, the top Republican on the House Oversight Committee, revealed in September that the Biden family was selling U.S. natural gas to China in 2017. At the time, Biden was aware of how his son was making the sale possible.

  On Oct. 8, GOP House leader Kevin McCarthy (R-Calif.) took to Twitter to list off what he said are facts about the Biden family.

  “Joe Biden’s family members profited in foreign regions where he had influence as vice president. Hunter Biden sat on the board of a Ukrainian company in an industry in which he had no experience,” McCarthy wrote. “The Biden family targeted foreign ventures—including deals with the Chinese Communist Party.”

  “Contrary to Joe Biden’s statement that he never spoke to Hunter about his foreign business dealings, there is evidence of a direct sum of money set aside for ‘the Big Guy’—who witnesses have identified as Joe Biden—from foreign nationals,” McCarthy added.

  House Republicans have said that they’ll launch an investigation into Hunter Biden if they regain a majority in the chamber in November.

  “Hunter Biden has gotten away with too much for too long,” Rep. Ronny Jackson (R-Texas), who sits on the House Foreign Affairs Committee, wrote on Twitter on Oct. 6. “It’s time for him to be CHARGED! No more delays!!”

  Tyler Durden
  Wed, 10/12/2022 – 22:05

• Thousands Of US Officials Trade Shares Of Companies They Regulate: WSJ
  Thousands Of US Officials Trade Shares Of Companies They Regulate: WSJ

  More than 2,600 executive branch officials have bought and sold shares of companies whose fortunes rise and fall on the policies their agencies enact, a Wall Street Journal investigation has found. 

  While controversy about insider trading by members of Congress has occasionally stirred major headlines, this phenomenon has quietly endured across Democratic and Republican administrations alike — and it involves more than 20% of senior officials among the 50 agencies covered by the Journal’s research so far.

  The findings are based on the Journal‘s study of more than 31,000 disclosure forms filed between 2016 and 2021 by 12,000 senior career employees, presidential appointees and political staffers. 

  Some riskier trades — involving options and short sales, for example — were valued between $5 million and $25 million. 

  Though it’s illegal for officials to work on issues in which they have a direct financial interest — and though regulations even prohibit the mere appearance of conflicts of interest — the Journal found many such instances. For example: 

  “A top official at the Environmental Protection Agency reported purchases of oil and gas stocks. The Food and Drug Administration improperly let an official own dozens of food and drug stocks on its no-buy list. A Defense Department official bought stock in a defense company five times before it won new business from the Pentagon.”

  Often, ethics officials have simply waived the rules, or certified that an official’s trade qualifies for an exception.  

  More than 40% of the Treasury Department’s senior officials traded in companies touched by their agency — the highest among the 50 agencies studies by the Journal. Treasury was followed by the Environmental Protection Agency, the Department of Defense, the IRS, SEC and the Fed — each of which had an above-average percentage of officials implicated.  

  Some agencies sought to thwart the Journal‘s scrutiny, and at least one is still stonewalling completely: 

  “Some [agencies] made it difficult to obtain the forms, and several agencies haven’t turned over all of them. The Department of Homeland Security hasn’t provided any financial records,” the Journal reports.

  The Journal has indicated these initial revelations are just the start of an investigative series. For a deep dive into several examples of questionable trading by federal officials, read the Journal‘s first installment here.   

  Tyler Durden
  Wed, 10/12/2022 – 21:45

• Alberta's New Premier Says Unvaxx'd Are The "Most Discriminated-Against Group" She Has Seen
  Alberta’s New Premier Says Unvaxx’d Are The “Most Discriminated-Against Group” She Has Seen

  Via The Epoch Times,

  Alberta’s new premier Danielle Smith says those who chose not to get a COVID-19 vaccine are the “most discriminated-against group” she has seen in her lifetime.

  “The community that faced the most restrictions on their freedoms in the last year were those who made a choice not to be vaccinated,” Smith said at her first press conference as premier on Oct. 11.

  “I don’t think I’ve ever experienced a situation in my lifetime where a person was fired from their job, or not allowed to watch their kids play hockey, or not allowed to go visit a loved one in long-term care or hospital, or not allowed to go get on a plane to either go across the country to see family or even travel across the border.

  “They have been the most-discriminated group that I’ve ever witnessed in my lifetime.”

  

  Smith made the remarks shortly after being sworn in as premier in Edmonton.

  During the leadership race, Smith had promised to bring fundamental changes to Alberta Health Services and to strengthen laws to avoid “discrimination” based on medical decisions.

  “This has been an extraordinary time in the last year in particular, and I want people to know that I find that unacceptable,” she said told reporters. “We are not going to create a segregated society on the basis of a medical choice.”

  Similar to other provinces, Alberta brought in a vaccine passport system during the pandemic, and closed down businesses and places of worship.

  

  Smith also said she won’t be seeking advice from Chief Medical Health Officer Dr. Deena Hinshaw, and will instead form a new team of public health advisers.

  When asked for further details including whether she is firing Hinshaw, a spokesperson for the premier said details haven’t been determined yet, repeating that Smith will be seeking to form a new team of public health advisers.

  Rachel Emmanuel contributed to this report. 

  Tyler Durden
  Wed, 10/12/2022 – 21:25

• Chinese Job Prospects 'Worst On Record' As Economy Slows
  Chinese Job Prospects ‘Worst On Record’ As Economy Slows

  Chinese workers are experiencing the worst job market prospects on record amid an economic slowdown that will give CCP policymakers much to talk about during a key political meeting next week, Bloomberg reports.

  

  The Chinese central bank’s Employment Sentiment Index – a survey of 20,000 households’ employment outlook – plummeted to 35.4 in the third quarter – its lowest level since the index was launched in 2010, according to a Sunday report published by the People’s Bank of China.

  Around 42% of households reported that finding a job had been “tough” or “hard to judge,” while just 9.7% of those asked said it was ‘easy’ to find work.

  

  According to economist Tommy Xie of Singapore-based Oversea-Chinese Banking Corp, the deteriorating confidence will likely delay an economic recovery, as weak sentiment is the result of several factors which include regulatory crackdowns, Covid restrictions and a softened real estate market.

  “The continually weakening household sector is the biggest challenge in the economy,” said Xie, adding “A comprehensive policy package that takes both Covid and industry regulation into considerations will be needed to boost people’s confidence.”

  The survey underlines dwindling confidence as growth is dragged down by repeated Covid flare-ups and a property market slump that has lasted for more than a year. Job prospects for young people are especially bleak, with the unemployment rate for those aged 16-24 at nearly 19%, almost four times the official urban jobless rate of 5.3%. Separate data from the purchasing managers surveys last week showed ongoing job losses in the services sector, a major employer.

  Top officials have highlighted the importance of employment as a key focus for the government as they downplay growth targets. Economists surveyed by Bloomberg predict gross domestic product will grow just 3.3% this year, well below the official goal of around 5.5%. -Bloomberg

  Meanwhile, private investment in fixed assets only expanded 2.3% in the first 8 months of 2022, the slowest pace since the end of 2020, while retail sales posted month-on-month declines for two straight months – only the second time since 2011 this has happened. Holiday spending over last week’s National Day break was also lower than a year ago.

  

  Adding to the sour outlook, the PBOC survey revealed that just 14.8% of respondents think home prices will rise in the next quarter – the lowest since 2010, while 16.3% said they expect home prices to fall – the highest percentage since the first quarter of 2015. 56.6% of those surveyed forecast no change.

  “The property sector may be nearing an inflection point,” said Liu Peiqian, chief China economist at NatWest Group Plc. “The industry may be bottoming out in terms of policies, and once that happens, the sector may start to stabilize and gradually improve.”

  Tyler Durden
  Wed, 10/12/2022 – 21:05

• How Winners Are Losing In American Elections
  How Winners Are Losing In American Elections

  Authored by Madeline Malisa via RealClear Wire (emphasis ours),

  Who exactly are the winners of this new and confusing electoral system called ranked-choice voting (RCV)? It’s not the thousands of voters that show up to the polls in RCV elections only to have their votes thrown out. The winners of RCV are partisans and special interests who use the system’s design to manipulate election outcomes and undermine states’ efforts to safeguard election integrity. 

  

  Take Maine, for example. In the 2018 2nd Congressional District election, Jared Golden, the Democrat, was declared the winner despite losing in the first round of tabulation with 45.58 percent to the Republican Bruce Poliquin’s 46.33 percent. To declare Golden the winner, more than 8,000 votes were systematically thrown out.  

  Take also Alaska, the most recent example. In the 2022 special election to fill the seat of the late Congressman Don Young, nearly 15,000 Alaskan votes were tossed out before the Democrat Mary Peltola was declared the winner. In fact, 60 percent of voters voted Republican in the first round, but by the last tally, Peltola came out ahead by just 5,129 votes. Conveniently for the Democrats, more than 11,000 ballots were exhausted – or tossed – by the second round simply because they only voted for the other Republican candidate instead of ranking all of the candidates.  

  If this sounds unfair, it’s because it is. 

  For all of our electoral history, candidates have been elected by a plurality of votes. Yet, RCV now requires a candidate to receive a majority of votes in order to be declared the winner. But the only way to create that majority is by systematically removing ballots from the final tally. If voters don’t rank every candidate — even those they would absolutely never support — they risk having their vote being removed from the final vote count. This is because even if a voter’s first choice earned the most votes in the first round, by the second, third, fourth, and subsequent rounds, that candidate — and the voter’s ballot — could be eliminated, as if the voter never showed up to the polls. Even in a runoff election, which is what RCV seeks to prevent, voters are given another chance to choose between candidates. 

  RCV therefore creates a fake majority, not a true majority. Not only does this fly in the face of our American principles of “one-person, one-vote,” it allows candidates to effectively “fail-up” to beat the candidate that had the most votes in the first round.  

  If this sounds complicated, it’s because it is.  

  Is it reasonable to think that voters will be adequately educated on every single candidate to rank each of them? Yet this is the burden placed on voters under the RCV system. And voters must comply with it, or risk having their vote thrown out.  

  To make matters worse, RCV threatens fast and accurate ballot counting. The results of Alaska’s special election weren’t officially announced for more than two weeks, leaving Alaskans without its at-large representation in Congress even longer than necessary. Complicated and delayed results further diminish voter confidence and lend themselves to accusations of voter fraud. And when the system itself promotes delayed results, as RCV does, it should be rejected. Florida and Tennessee have become the first states to pass legislation banning RCV for all state and local elections, and more states should follow suit. 

  RCV isn’t just a solution in search of a problem. It’s a confusing and unfair problem in and of itself. And our historic, simpler system of plurality voting works extremely well. Just look at our history. Our plurality system has given us leaders like President Abraham Lincoln, who received just 39.8 percent of the popular vote in the 1860 presidential election. And as others have rightly pointed out, under an RCV system, Lincoln likely would have lost.

  Americans win when their votes count. One-person, one-vote, and we should keep it that way.  

  Madeline Malisa is a senior fellow at the Foundation for Government Accountability.

  Tyler Durden
  Wed, 10/12/2022 – 20:45

• All Global Energy Infrastructure At Risk After This "Most Dangerous Precedent": Putin
  All Global Energy Infrastructure At Risk After This “Most Dangerous Precedent”: Putin

  Russia’s President Vladimir Putin addressed a Moscow energy forum on Wednesday and issued a grim forecast following last month’s sabotage attack on the Nord Stream 1 and 2 pipelines under the Baltic Sea on September 26. 

  Putin in the fresh comments warned that this “most dangerous precedent” means any and all energy infrastructure in the world is now at risk. Describing acts of state-sponsored terror and sabotage, the Russian leader explained, “It shows that any critically important object of transport, energy or utilities infrastructure is under threat irrespective of where it is located or by whom it is managed.”

  

  He pointed the finger at “beneficiaries of the blasts” – which Putin named specifically as the United States, Poland, and Ukraine, though which entity or entities were behind it remains a mystery, and with little in the way of conclusive known evidence at this point.

  The Wednesday remarks by Putin follow his assessment in the days after the sabotage incident which grabbed the world’s attention and shook global energy. He said at that time, “It’s obvious to everyone who benefits from it… Those who benefit are the ones who have done it.”

  But US and Western officials, as well as the media, has blamed Russia for sabotaging its own pipelines in a bit of ‘conspiracy tit-for-tat’ speculation. An American military news outlet reviews, “The culprit behind the attacks on Nord Stream 2 has been widely speculated, with Western sources near unanimously blaming Russia while others have highlighted that the U.S. and possibly Britain or Poland are likely culprits.”

  But then US Secretary of State Antony Blinken raised eyebrows when he called the sabotage attacks “a tremendous opportunity”…

  According to @SecBlinken, the Nord Stream pipeline bombing “offers tremendous strategic opportunity for the years to come.” Too bad that this tremendous opportunity for DC bureaucrats will come at the expense of everyone else, especially this coming winter. pic.twitter.com/T2eacQUuBF

  — Aaron Maté (@aaronjmate) October 1, 2022

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

  He said in the surprisingly blunt Sept.30 press briefing while alongside Canada’s foreign minister that “ultimately this is also a tremendous opportunity. It’s a tremendous opportunity to once and for all remove the dependence on Russian energy and thus to take away from Vladimir Putin the weaponization of energy as a means of advancing his imperial designs.”

  He at the same time touted that the Untied States has now become “the leading supplier of LNG [liquefied natural gas] to Europe,” stressing too that the Biden administration is helping to enable European leaders to “decrease demand” and “speed up the transition to renewables.”

  Many pundits have said this shows who most stands to benefit by the Nord Stream pipelines’ destruction and disruption; however, again there’s as yet no clear “smoking gun” evidence as to who was behind it.

  Tyler Durden
  Wed, 10/12/2022 – 20:25

• US Imports Sink In September, Suffer Steepest Drop Since 2020 Lockdowns
  US Imports Sink In September, Suffer Steepest Drop Since 2020 Lockdowns

  By Greg Miller of FreightWaves

  First came the pullback in spot shipping rates from their historic peak. Then came reports of plunging Asian bookings and mass retail order cancellations, with spot rates falling even faster. Now, all of this is finally showing up at America’s ports.

  

  According to Descartes, which aggregates U.S. Customs data, inbound volumes to all U.S. ports totaled 2,215,731 twenty-foot equivalent units in September. That’s down 11% year on year and 12.4% from August.

  

  Last month’s imports came in below September 2020 levels, albeit still up 9% from September 2019, pre-COVID. Imports this September were down 15.5% versus May, the month inbound volumes hit an all-time high, according to Descartes data.

  September’s 313,311-TEU decline versus August was the steepest month-to-month drop recorded by Descartes since the 364,454-TEU plunge in February 2020 versus the month before, back when Chinese authorities first locked down Wuhan.

  “We’ve had a pretty significant correction here,” said Chris Jones, executive vice president of industry and services at Descartes Systems Group, in an interview with American Shipper on Monday.

  This is normally the time of year when imports seasonally decline — but not by this much. “There was an inflection, and it was a big one,” he said. “In some respects, this is not inconsistent with other years [pre-COVID]. It’s just more severe.”

  If the usual seasonal pattern holds true from here, Jones added, imports “should slow down for the rest of the year.”

  Descartes: Imports decline on all three coasts

  This summer, overall U.S. imports remained stubbornly high, hovering near record levels even as West Coast volumes declined. West Coast losses were offset by East and Gulf Coast gains, reportedly due to shippers shifting cargoes eastward due to fears of West Coast peak season congestion and labor unrest.

  Ports on all three coasts saw volumes drop versus August, according to Descartes. Most surprisingly, it found that imports fell 21.5% in Savannah, Georgia, from 285,341 TEUs to 223,966 TEUs.

  Savannah, along with New York/New Jersey, has been one of the big winners of the eastward shift. Savannah posted record imports in August. It has had the country’s longest queue of waiting ships for months. As of Monday, ship-position data showed 35 ships still waiting. The presence of so many vessels offshore confirms there is no shortage of cargo waiting to be unloaded in Savannah, so how could its import numbers fall so steeply in September?

  

  The answer appears to be: Hurricane Ian. Official Savannah numbers have yet to be released. A spokesperson for the Georgia Ports Authority (GPA) told American Shipper: “September volume was impacted due to Hurricane Ian and the suspension of vessel service for roughly three days. GPA has since been accommodating that volume, which will be reflected in October numbers.”

  Meanwhile, official data released Tuesday by South Carolina Ports conflicts with Descartes data. South Carolina Ports said loaded imports were up 16% year on year in September, implying that Charleston import volumes were flat versus August, whereas Descartes said they fell 6.5% month on month.

  Data from PIERS also conflicts with Descartes. PIERS data shows only a 0.8% year-on-year decline in U.S. imports in September, and an 8.2% sequential drop in September versus August.

  Supply chain crunch not over yet

  According to Descartes, U.S. imports from China totaled 820,329 TEUs in September, down 22.7% year on year and 18.3% versus August. Declines from China accounted for 61.5% of last month’s drop compared to the month before.

  “If you think about the lockdowns in China, some of those things have now had a chance to flush themselves out and you now see that in the numbers,” said Jones, noting the lag effect between the lockdowns and the import decline. “These Chinese numbers are way down.”

  Commenting on the timing of the September plunge, Jones pointed to multiple lag effects between initial demand weakness and import data weakness, ranging from lags on the origin side to those at America’s ship queues. “Imports are a completely lagging indicator because of the lead times,” he emphasized. “These supply chains are so extended.”

  

  Supply chain crunch not over yet

  Declining import volumes should give terminals breathing room to clear out more containers from their yards in the months ahead. Even so, Jones agreed that “it’s too soon to declare victory” when it comes to the supply chain crunch.

  Imports and consumer spending are still above pre-pandemic levels. Rail congestion remains high. Both import and empty container levels at terminals remain elevated.

  As of Monday morning, there were still 103 container ships waiting offshore of North American ports. Waiting times off East and Gulf Coast ports remained over 10 days in September, according to Descartes. Meanwhile, there has yet to be a breakthrough in the West Coast port labor negotiations and the new rail labor contract still requires approval. (One union has just rejected the proposal.)

  The complexity of the situation makes it very difficult for U.S. retailers and importers to plan ahead. “There’s too much and not enough,” said Jones. “Things like personal gaming systems come in the door and they’re out the door, while you have seasonal [goods] where you just get crushed.”

  Overall, “consumption has not slowed down as much as people thought,” he continued. Importers “have to make bets and the longer the lead time [due to supply chain delays] the less accurate” those bets turn out. As a result, he said, “we’ll see some cases where too much inventory shows up and others where you can’t get enough of what you need.”

  Tyler Durden
  Wed, 10/12/2022 – 20:05

• Biden "Actively Pushing Us To Brink Of A Nuclear Holocaust": Tulsi Gabbard Goes Off In Tucker Interview
  Biden “Actively Pushing Us To Brink Of A Nuclear Holocaust”: Tulsi Gabbard Goes Off In Tucker Interview

  Former presidential candidate and recent Democratic Rep from Hawaii Tulsi Gabbard appeared on Fox’s Tucker Carlson Tonight on Tuesday to discuss her decision to leave the Democratic Party. Gabbard, who has proudly served her country in uniform (and still is with the Army National Guard), announced the very morning of her appearance on Tucker’s show that she’s exiting the Democratic Party after serving in Congress (Hawaii) from 2013 to 2021. 

  At a moment Gabbard was already subject of intense pushback and online hate for her contrarian stance on the Russia-Ukraine war, she blasted the Democratic Party as “an elitist cabal of warmongers driven by cowardly wokeness” in a prior Twitter video post. She went on to tell Carlson in the evening appearance that these same leaders are “actively pushing us to the brink of a nuclear holocaust.”

  Hitting on the familiar “Chicken hawks” theme that Ron Paul has long emphasized, she continued “they may have their bunkers where they’ll be safe…“

  “But we the American people will have no shelter, no place to go, no place to hide and face the consequences that could destroy all of humanity and the world as we know it.”

  That’s when she detailed reasons for being fed up with the Democratic party, explaining she’s seen first-hand that Dem leadership despises the Constitution and is essentially at war with the Bill of Rights-enshrined concept of freedom of speech. 

  “It speaks to the whole environment of fear that those in power, these elitists in power, have fomented to where people are afraid to speak the truth,” Gabbard continued.

  “[People are] afraid to exercise their right to free speech because, hey, you might lose your job, you might be canceled, you might get trashed, and God forbid in Washington, you might not be invited to the cool kids’ party.”

  Gabbard herself has long been subject to repeat smears of being “pro-Kremlin” or also an “Assadist” (given she met with Syria’s President Bashar al-Assad in a controversial 2017 trip at the height of the war) for her principled stance of ‘non-interventionism’ and longtime criticism of the post-9/11 Global War on Terror.

  This shit has been going on for years. DC neoliberal elites have assigned themselves license to lie and defame anyone who dissents from neoliberal orthodoxy as “Russian agents” or “Kremlin assets.”

  At least McCarthy and Hoover would hold hearings to do this. They just assert it. pic.twitter.com/rwrRtPLWMA

  — Glenn Greenwald (@ggreenwald) October 11, 2022

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  Without doubt, her latest words to Tucker Carlson in affirmation of her formal exit from Democratic Party membership will only heighten the intensity of the ongoing Left-Centrist outrage targeting her. Many within Republican Party leadership also have mounted political attacks against her.

  Tyler Durden
  Wed, 10/12/2022 – 19:45

• IMF Draws Up Nightmare Scenario Of Housing Crisis
  IMF Draws Up Nightmare Scenario Of Housing Crisis

  By Ye Xie, Bloomberg Markets reporter and analyst

  China’s housing market has a reputation as the most-important sector in the universe (in late 2021, Goldman estimated it as the world’s largest asset class at over $60 trillion)

  

  So its continued slump naturally raises concerns among officials, even those beyond China’s borders. The International Monetary Fund, for instance, this week painted a bleak picture of how China’s housing slump may morph into a banking crisis. In one scenario, 15% of small banks may go under.

  Such a scenario remains a left-tail risk, but it underscores what’s at stake as President Xi Jinping attempts to keep the economy afloat.

  Recent lending data showed that long-term household loan demand, a proxy for home mortgages, remains fairly weak, even as broad credit growth shows signs of improvement. In the debt market, the struggles of a Chinese developer that until recently was able to access state-backed funding shows there’s no light at the end of the tunnel of the crisis.

  

  In its global financial-stability report, the IMF devoted one section to a discussion of China’s housing woes. The underlying problem is well-documented. Declining home sales and a lack of access to financing are worsening the credit crunch among developers. That reduces their ability to complete the construction of apartments. The stalled projects lead home buyers to boycott mortgage payments, which puts pressure on banks, which causes them to turn more cautious in lending to the sector.

  In such a vicious cycle, many developers are on the brink of collapsing. The IMF’s analysis showed that 45% of developers might not be able to cover their debt obligations with earnings, and 20% of them could become insolvent if their inventory value is marked to current property prices.

  It’s small wonder, then, why about 70% of offshore bonds of developers trade at 40 cents on the dollar or less, suggesting that debt restructuring may be inevitable for a large share of the sector.

  

  More importantly, property developers’ failures could spill over into the banking sector, particularly small banks. If 10% of banks’ exposure to distressed developers and 10% of the mortgages related to unfinished homes become non-performing loans, the IMF estimates that 15% of the banks in its study, which represents 10% of China’s total banking assets, would fail to meet minimum capital requirements and require bailouts. (The 15% estimate is close to what other economists are saying.)

  

  The chain reaction doesn’t end here. Constrained by falling revenue from land sales, local governments have limited resources to support the real-estate sector. If so, “there could be adverse spillovers to the broader corporate sector, where vulnerabilities are already high,” the IMF warned.

  As a watchdog, the IMF’s job is to be the Cassandra who sounds the alarm. Understanding the risk, Beijing has already stepped up its support for the market. But so far, there are few signs of a meaningful turnaround in the market, with consumer confidence stuck at rock bottom. The longer the crisis drags on, the more likely the nightmare scenario becomes a reality.

  Tyler Durden
  Wed, 10/12/2022 – 19:25

• Mexico's Oil Hedging Program Begins, Expected To Protect Against 2023 Downside
  Mexico’s Oil Hedging Program Begins, Expected To Protect Against 2023 Downside

  Mexico has started hedging its 2023 oil production in the world’s most secretive and largest oil hedge, Bloomberg reported, citing people familiar with the matter.

  The source told Bloomberg that the Mexican government is hedging for the downside in crude oil markets. The hedge covers production (between 200 million and 300 million barrels) in the first half of 2023 and would shield any losses if crude tumbles below $75 a barrel. 

  As one of the most secretive hedging transactions typically costs around $1 billion, the sources provided no information on hedging products Mexico is using. Though the source said trading desks via oil majors are executing the hedge. Usually, Mexico has bought put options from Goldman Sachs, JPMorgan & Chase Co., and Citigroup Inc., but in recent years, oil majors have increasingly done the hedging. 

  For some years, Mexico has scored big on its oil hedge. In 2020, the hedge earned $2.38 billion when crude prices crashed and $6 billion in 2015. 

  The $75-a-barrel level would mean Brent prices would need to fall 20% from current levels of $93. 

  

  Future and forward contracts point to increasing downside risks in crude markets through next year. 

  

  A souring macroeconomic outlook could drive crude prices down next year, according to a note via RBC Capital Markets, which warned about the rising global recession risks. 

  RBC’s Michael Tran said there’s a 15% chance that a significant slowdown in economic growth could result in Brent prices falling 37% from the $94 handle down to the $60 level. 

  Macroeconomic drivers include “stickier than expected inflation wreaking havoc on consumer demand, to China’s reluctance to pivot from consumption hindering COVID policies, to a Fed overreach by moving fast and breaking things,” Tran said.

  “Such macro threats are realized and lead to a recession-like backdrop where correlations between risk asset classes move sharply together as investors seek safe havens,” he added.

  If Tran’s bear case is correct, this would mean Mexico is well hedged for the coming crude plunge. He also noted a bull case scenario where prices could jump 25% to $115-$120 as Russia continues to reduce crude supply to Europe. 

  Meanwhile, OPEC Plus, the coalition of oil-producing nations led by Saudi Arabia and Russia, slashed production by 2 million barrels per day last week due to fears of a global economic downturn. OPEC+ has also warned of limited spare production capacity. 

  In any case, Mexico is preparing for the downside. 

  Tyler Durden
  Wed, 10/12/2022 – 19:05

• 'Lies The FBI Should Have Uncovered': Day 1 Of The Igor Danchenko Trial
  ‘Lies The FBI Should Have Uncovered’: Day 1 Of The Igor Danchenko Trial

  Authored by Techno Fog via The Reactionary,

  We have the transcripts from day 1 of the Igor Danchenko trial. Pretrial matters and jury selection took up all of yesterday morning; openings and the prosecution’s case-in-chief, led by Special Counsel Durham, started in the afternoon.

  

  Let’s dig in and start with the opening statements.

  Special Counsel Prosecutor Michael Keilty opened with explanations of Danchenko’s lies to the FBI and discussed some FBI misconduct:

  

  In fact, he went so far as to accuse the FBI of engaging in “troubling conduct” based on the Steele dossier and, as an extension, Danchenko’s misrepresentations:

  

  Special Counsel Keilty also provided context as to why Danchenko was opened as a confidential human source:

  

  How will the government prove part of its case against Danchenko? Keilty lays it out:

  1. Danchenko’s e-mails “The defendant’s very own words will show that there was never a call to say nothing of a meeting in New York which Millian supposedly skipped out on.”

  2. “The defendant’s own phone records will make it abundantly clear to you that he never received a call from somebody he claimed to believe was Sergei Millian.”

  Being a false statement case, the Special Counsel must prove that the lies were material. The Special Counsel provides insight into how it will meet that burden:

  • “You will learn that lies can cause the FBI to wield their powers too aggressively, and you will also learn that lies can cause the FBI to not act aggressively enough. And you will see examples of both — both of those situations here in this trial.”

  • If Danchenko had been truthful, the FBI would have been under an obligation to correct its own misrepresentations to the FISA court.

  Danchenko’s Opening

  Opening statements also provided insight into Danchenko’s defenses. To summarize, they will argue Danchenko was being truthful and that his purported lies – if they were lies – were immaterial.

  In doing so, they provided some new information on FBI malfeasance:

  Steven Somma (who was “primarily responsible for some of the most significant errors and omissions in the FISA applications”) told Agent Auten “not to probe or ask a lot of follow-up questions with Mr. Danchenko” in order to get him to cooperate.

  They also stated that Danchenko provided “critical intelligence to the Russian government’s efforts to conduct influence operations in the U.S. . . He provided the FBI [] insight into individuals, into areas it was otherwise lacking.” (We suspect this might have to do with Maria Butina.)

  Direct Examination of FBI Supervisory Intelligence Analyst Brian Auten

  Auten was the first witness to testify, and his direct examination was conducted by Special Counsel Durham. Here are the highlights.

  Auten became aware of Crossfire Hurricane in early August 2016, after a conversation with section chief Jonathan Moffa. 144. Within days he was assigned to the Crossfire Hurricane, where he helped lead the analysts involved in that investigation. Here’s his description of how it worked:

  “So the Crossfire Hurricane team was structured — it was an integrated combination of analysts and agents. It was structured whereby the — the authority structure was done both on the agent side and the analyst side, or one might say the operational side and the analytical side.

  The analysts — the line analysts reported to me. I reported to, again, Jonathan Moffa was his name, who was a section chief at the time, and then Jonathan Moffa reported up to, at that point, it was Deputy Assistant Director Bill Priestap.

  And on the agent side, it was my operational counterpart by the name of Joe Pientka. Joe reported up through Peter Strzok, who was DAD, and then up to Assistant Director Priestap.”

  He explained that the investigation was run from FBI headquarters. Here’s is Auten’s description of the chain of reporting:

  1. Section Chief Moffa and Peter Strzok both reported to Deputy Assistant Director Bill Priestap.

  2. Priestap reported directly to Deputy Director Andrew McCabe.

  3. McCabe reported to FBI Director James Comey.

  Durham asks a pointed question about Comey:

  

  Durham also asks about Crossfire Hurricane, his questions critical of the FBI’s opening of a “full investigation” based on “suggestions of some kind of suggestion” (the George Papadopoulos allegations):

  

  Durham asked about the significance of opening full investigations, to which Auten responded: “There are investigative tools that are allowed at the full investigation that aren’t allowed at the preliminary investigation.”

  Auten also discussed his involvement in the Carter Page investigation – and the Carter Page FISA applications.

  • He was “involved with providing information that went into the [FISA] application.”

  • He supervised the analysts in the Carter Page investigation and reviewed the application’s footnotes and did “a bit of ad hoc review of the application itself.”

  • His analysts helped to gather material and assisted “with providing language for the application.”

  The Crossfire Hurricane team decided “fairly early on” – at the end of July 2016, if not soon after – that they would try to put together a FISA warrant on Carter Page. According to Auten, “There was talk about a FISA on Mr. Papadopoulos as well.”

  Auten described September 19, 2016 as being a significant date for the Carter Page investigation because that is when the Crossfire Hurricane team received what was “collectively known as the Steele dossier.” Before that, the FBI had put together material on Carter Page but didn’t have enough to “secure” a FISA warrant. (Auten acknowledged that FBI Agent Mike Gaeta, located in Rome, was the first to get the Steele dossier.)

  Auten was asked about the FBI’s efforts to corroborate the Steele allegations just before the first FISA application was submitted. He stated they looked through “FBI systems to determine whether or not we could verify, corroborate, confirm, or disconfirm the information in those reports.”

  Durham then asked about corroboration:

  Q:       And between September 19th of 2016 and October 21st, when the FBI submitted the FISA application, were you able to confirm or corroborate in any of the FBI system the very serious allegations that were contained in the dossier reports?

  A:        No.

  The FBI also made inquiries with other members of the intelligence community to find corroborative information. They came up empty.

  Q:        And what can you tell the jurors about whether or not any of the intelligence agencies that the FBI contacted for corroborative information produced any corroborative information?

  A:        We did receive information back from a number of different agencies.

  Q:        Then, as to the information that you received back from the agencies, did they corroborate the specificity of specific allegations that were contained in the dossier reports?

  A:        Not corroborating the specific allegations, no.

  Auten was also present for the FBI’s interview of Steele in October 2016, just weeks before the first FISA application was submitted.’

  Q:        When you and Mr. Varacalli, and Mr. Gaeta, and Mr. Guessford met with Christopher Steele in early October of 2016, did Christopher Steele provide any corroborative information for the information that was contained in his reports, in the dossier reports?

  A:        Not for the allegations, no.

  Then Durham asked about the FBI offer to pay Steele to corroborate his information – what we might call the “million dollar” question. Here is Auten’s testimony on that matter:

  

  As to Steele’s sources, Auten admitted Steele didn’t provide the FBI with the names of any sources back in October 2016.

  Q:        So you talked to Mr. Steele about sourcing. Do you recall whether or not Mr. Steele, in early October of 2016 provided you or your colleagues with the names of any of the sources?

  A:        Sources, no.

  Months later, in “late December of 2016”, the FBI finally learned that there was one primary source of Steele’s allegations. That person was Igor Danchenko. (Auten would go on to interview him in January 2017.)

  Before getting to that January 2017 interview of Danchenko, Durham walked Auten through the first FISA application against Carter Page. He specifically asked about whether the information was corroborated. Auten conceded that it was not.

  

  Durham also asked Auten about Sergei Millian, whose name had been discussed in the October 2016 Steele interview. Auten stated that Millian had previously been a confidential human source (CHS) for the FBI’s Atlanta Field Office.

  Q:        And what was that relationship?

  A:        Mr. Millian, at one time, had been a source.

  Q:        When you say “source,” that’s the same thing as confidential human source, correct?

  A:        That is correct.

  Q:        In common parlance, might be known as an informant?

  A:        In common parlance, yes.

  Q:        And do you remember for how long Mr. Millian had been a confidential human source for the FBI?

  A:        I don’t recall that.

  Q:        Do you recall or do you know in German what the nature of the assistance was that Millian provided?

  A:        I know where he had provided the assistance. I don’t know exactly what type of assistance it had been.

  Q:        Okay. So you know that he has helped as a CHS?

  A:        Correct.

  Q:        For a period of time?

  A:        Correct.

  Q:        And you said you knew where he was providing that information?

  A:        Correct.

  Q:        And where was that?

  A:        I believe it was the Atlanta — the Atlanta field office.

  Q:        Okay. Do you know, again, personal knowledge, do you know whether or not at some point in time Millian’s status as a CHS ended, he was closed?

  A:        Yes.

  Q:        And why was it closed, if you know?

  A:        I believe it was closed because he moved out of the area of responsibility for the Atlanta field office.

  Q:        Now, with respect to Mr. Millian, you heard about Millian from Steele, you knew he had a relationship with the bureau, correct?

  A:        Correct.

  As an aside, let’s briefly discuss the importance of Millian’s prior relationship with the FBI. Most significantly, it put the FBI on notice that Millian would be willing to corroborate any Steele/Danchenko allegations. The FBI never took advantage of that prior relationship. Again, here we have the FBI failing to follow-up on leads because it knew such steps would blow-up its investigation.

  As an aside, let’s briefly discuss the importance of Millian’s prior relationship with the FBI. Most significantly, it put the FBI on notice that Millian would be willing to corroborate any Steele/Danchenko allegations. The FBI never took advantage of that prior relationship. Again, here we have the FBI failing to follow-up on leads because it knew such steps would blow-up its investigation.

  Back to the transcript. Auten said the FBI opened an investigation on Millian after the October 2016 interview of Christopher Steele. He admitted the FBI found no evidence Millian had “assisted in the interference” of the 2016 presidential election.

  Q:        Would you tell the ladies and gentlemen of the jury whether or not — again, to your personal knowledge – whether or not the bureau opened some file on Mr. Millian?

  A:        Yes.

  Q:        And was that a matter investigated by the Bureau?

  A:        Yes.

  Q:        And to your personal knowledge, was it at some point closed?

  A:        Yes.

  Q:        Were any charges brought against Millian?

  A:        No.

  Q:        Was there any wrongdoing in terms of him assisting in the interference in some way with the 2016 presidential election?

  A:        No.

  However, the Millian allegations – which arose from Danchenko’s claims to Steele – were still included in original FISA application and all subsequent renewals:

  

  From there, Durham spent a good deal of time asking about the specific allegations in the FISA applications. The purpose of this line of questioning is materiality of Danchenko’s lies: to lay the foundation the FISA applications relied on uncorroborated information from the Steele Dossier, and to later argue the FBI had the duty to correct this false information.

  In fact, by the fourth FISA application (the Mueller application), the FBI was still trying to corroborate the allegations. And it still couldn’t.

  Q:        Between October 21 of 2016 and when the FBI submitted its fourth FISA applications on a United States citizen, did the FBI continue to try to corroborate information?

  A:        Yes, it did.

  Q:        It was never able to — it didn’t corroborate. That information came from that dossier report, correct?

  A:        Correct.

  In fact, Auten and others from the FBI made additional trips overseas to try to talk to Steele and others to try to get corroborative information. Auten said he was not able to get such corroborative information through these efforts.

  Auten also testified that he identified Igor Danchenko as Steele’s primary subsource in December 2016. He made the connection “Through a number of searches through databases, a number of making connections of existing material that we had.” Some of this relates to the prior counterintelligence investigation of Danchenko – something Durham can’t get into, yet.

  What followed was Danchenko’s January 24-26 interviews in 2017. From the FBI side, Deputy Assistant Director Jennifer Boone was involved in helping set up the interview. So was Jonathan Moffa, Stephen Somma, and Auten. (Author note: also involved was the DOJ National Security Division’s David Laufman.)

  Auten described the purpose of the Danchenko interviews, which were handled by himself and Stephen Somma:

  “We were there to go through to determine, you know, who the sub-sources were in these reports and what he could tell us about the reports in general.”

  After walking Auten through the immunity agreement provided to Danchenko, Durham admitted a LinkedIn message from Danchenko to an associate, where he took credit for much of the allegations in the Steele dossier:

  “Yes, I collected some 80 percent of raw Intel and half the analysis for the Chris Steele dossier and went through debriefings with the FBI on the collusion matters, period.”

  Then there was a discussion about the FBI’s plans to bring Danchenko into the fold as a confidential human source. According to Auten, this was the FBI’s plan prior to the January 2017 interviews.

  Q:        Even prior to actually approaching Mr. Danchenko in January of 2017, that was the FBI’s plan, wasn’t it, to see if they could get him — bring him on as CHS?

  A:        Yes, that was part of the thinking.

  Q:        And you wanted to bring him on — the bureau wanted to bring him on for what purpose?

  A:        To get as much information as we could to corroborate or understand the sourcing of this material.

  Here’s how the process worked.

  Q:        Okay. And tell the jurors what happened with respect to the handling of Mr. Danchenko as a confidential human source for the Federal Bureau of Investigation?

  A:        Mr. Danchenko was subsequently a confidential human source out of the Washington Field Office. Mr. Somma had gone back to New York.

  Q:        Tell the — he left — Somma left Washington, went back to New York, somebody else took over?

  A:        Correct.

  Q:        And that person who took over, do you recall who that person was?

  A:        That was Special Agent Kevin Helson.

  Q:        Okay. So Kevin Helson was assigned to the Washington field office, correct?

  A:        Yes.

  Q:        And did he have a particular expertise or area in which he worked?

  A:        Yes.

  Q:        And what was that?

  A:        Russian counterintelligence.

  Q:        Okay. So Helson comes on. He’s going to be the handler. When he did take over — he, Mr. Helson, did take over, was the Crossfire Hurricane personnel — were they cut out of this or what was the relationship between Crossfire Hurricane, you, Somma and company, and then Special Agent Helson?

  A:        No, there was back-and-forth between Mr. Helson and Mr. Helson’s embedded analyst as well as the analyst on my team.

  Q:        And, indeed, when this — this arrangement was initially set up, do you recall, sir, whether or not Helson was to pose questions for Mr. Danchenko on behalf of the Crossfire Hurricane people?

  A: In some cases, yes.

  The use of Danchenko as a CHS – with Agent Helson being the go-between by the Crossfire Hurricane team – overlapped into the Mueller investigation. (At that time, FBI Special Agent Amy Anderson was assisting with corroborating the Dossier information.) What a convenient arrangement. The Mueller Special Counsel could make use of Danchenko while he was protected on other matters.

  Before the first day wrapped-up, Auten discussed the January 2017 interviews with Danchenko and Danchenko’s claim he spoke with Millian over the phone. Auten was curious about that phone call and about the information relayed in that phone call, calling it a “very strange part of the interview.” Specifically, Auten wondered how the information that came from the Steele dossier “had come out of the very short phone call like this.”

  From there, the first day of trial saw a close. We’ll be providing daily updates with transcript excerpts. Thank you for the support – transcripts aren’t cheap.

  Techno.

  Tyler Durden
  Wed, 10/12/2022 – 18:45

• Is Dementia Contagious?
  Is Dementia Contagious?

  It appears US Treasury Secretary Janet Yellen has some very concerning short-term memory problems, just like her boss.

  

  Yesterday, during an interview with CNBC, she offered the following reassuring comments about the state of US financial markets… “… we really haven’t seen any of these signs of financial instability in the United States financial markets…”

  Today, answering questions following a speech in Washington, she said:

  “We are worried about a loss of adequate liquidity in the market,” adding that the balance-sheet capacity of broker-dealers to engage in Treasuries market-making hasn’t expanded much, while the overall supply of Treasuries has climbed.

  So just to summarize (via Bloomberg headlines):

  

  • 1638ET Today: YELLEN: WORRIED ABOUT LOSS OF ADEQUATE LIQUIDITY IN TREASURIES

  • 1623ET Yesterday: YELLEN: NOT CONCERNED ABOUT LIQUIDITY IN MARKETS

  And in case you were wondering which Janet Yellen is right, it’s simple…

  Bloomberg’s measure of prevailing liquidity conditions in the US Treasury market is at its most stressed since the peak of the COVID lockdown crisis.

  

  The last time Treasury liquidity was this bad, The Fed injected $1 trillion every day to unlock the bond market and launched $120BN in QE to short circuit a catastrophic USD short squeeze.

  Tyler Durden
  Wed, 10/12/2022 – 18:25

• Tulsi Gabbard To Stump For GOP Candidate A Day After Leaving Democratic Party
  Tulsi Gabbard To Stump For GOP Candidate A Day After Leaving Democratic Party

  Authored by Jack Phillips via The Epoch Times (emphasis ours),

  Former 2020 presidential candidate Tulsi Gabbard, who left the Democratic Party this week, will campaign for a Republican Senate candidate ahead of the 2022 midterms.

  

  Retired Army Gen. Don Bolduc, who won the Republican primary and is campaigning against Sen. Maggie Hassan (D-N.H.), confirmed in a statement Wednesday that Gabbard will be stumping for him.

  “We don’t agree on every issue, but I am honored to have the support of Tulsi Gabbard who shares my view that the status quo is broken, and we need a change of direction,” Bolduc said in a statement. 

  “Tulsi is a fellow change agent and independent-minded outsider willing to speak truth to power.”

  Bolduc, notably, was endorsed by former President Donald Trump earlier this year.

  He added, “I am going to spend every day between now and election day building a wide coalition of supporters that includes Republicans, independents, and even disaffected Democrats who know that Senator Hassan is a career politician and must be retired.”

  Gabbard drew headlines on Tuesday when she announced she was leaving the Democratic Party. The former Hawaii congresswoman was a candidate for the Democrats in the 2020 presidential election after having served multiple terms in the House of Representatives.

  “If you can no longer stomach the direction that the so-called woke Democratic Party ideologues are taking our country, then I invite you to join me,” she in a video posted on Twitter. Democrats, Gabbard added, “divide us by racializing every issue & stoking anti-white racism, who actively work to undermine our God-given freedoms enshrined in our Constitution.”

  Although Gabbard ultimately endorsed Joe Biden for president in 2020, she’s later been critical of his administration. The former lawmaker continued to target Biden in Tuesday’s video message.

  “President [Joe] Biden campaigned on a message of unity, healing the partisan divide bringing the country together. He just gave a big speech saying supporters of President Trump are the most extremist group in our country and a threat to our democracy. That’s half the country,” Gabbard remarked.

  Read more here…

  Tyler Durden
  Wed, 10/12/2022 – 18:05

• "What Hell's Like" – Jury Orders Alex Jones To Pay Sandy Hook Families, FBI Agent $1 Billion
  “What Hell’s Like” – Jury Orders Alex Jones To Pay Sandy Hook Families, FBI Agent $1 Billion

  Late this afternoon, the jury in Alex Jones’ second defamation trial awarded the families of eight victims in the Sandy Hook Elementary School shooting, and one FBI agent, $965 million.

  “Today, a jury representing our community rendered a historic verdict, a verdict against Alex Jones’ lies and their poisonous spread, and a verdict for truth and our common humanity,” Chris Mattei, the families’ lead attorney said outside the courthouse.

  The plaintiffs sought a sum of $550 million to match the total views his claims received, per CNN Business.

  Ultimately, the jury awarded the plaintiffs nearly double the already enormous sum.

  In the first trial earlier this year, Jones was ordered to pay nearly $50 million in punitive and compensatory damages to the families of one victim.

  This brings the total award above $1 billion as Jones awaits to hear damages in a third defamation trial he lost to the parents of another victim.

  Testimony from an employee of Jones pegged his total earnings from the sale of dietary supplements, books and survival gear at $100 million to $1 billion since the shooting, with $810,000 in sales on a single day in 2020.

  

  Jones, primarily through his website and radio show Infowars, has claimed the shooting was a “false flag” operation using “crisis actors” to undermine gun rights. He admitted during the Texas trial in August that he believes it was “100% real.”

  Speaking on his website InfoWars, Jones said:

  “This must be what Hell’s like, they just read out the damages even though you don’t got the money,” adding “why not make it trillions?”

  During another sidewalk press conference Jones denounced the judge and jury as “rigged” and mocked the trial as a “kangaroo court,” adding that:

  “they could get a $1 billion verdict, and they wouldn’t get a dime.”

  Jones’ attorney, Norm Pattis, said outside the courthouse on Wednesday: “We very, very, very much look forward to an appeal.”

  “We disagree with the basis of the default, we disagree with the court’s evidentiary rulings. In more than 200 trials in the course of my career I have never seen a trial like this,” Pattis added.

  “Today is a very, very dark day for freedom of speech.”

  Free Speech Systems, the parent company of Infowars, declared bankruptcy in August for a second time this year in a bid to limit the cost of litigation damages.

  Tyler Durden
  Wed, 10/12/2022 – 17:25

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