- China's "National Team" Has Small Cash Pile To Rescue Tumbling Stocks
China’s “National Team” Has Small Cash Pile To Rescue Tumbling Stocks
By Ye Xie and Amy Li, Bloomberg Markets Live reporter and strategists
The sovereign wealth fund’s investment in the big banks shows that Beijing is committed to putting a floor under the stock market.
The purchase is limited in size, but the signaling effect could be more important. Unfortunately, the signaling effect works only if investors believe that the National Team has deep pockets to keep buying the dip. The reality is that the cash pile at Central Huijin Investment Ltd. is dwindling fast.
Chinese equity markets responded positively to the news that Huijin bought about $65 million of shares in the four largest Chinese banks, and pledged to increase holdings over the next six months.
It fits the historical pattern where intervention by the state fund tended to support the market in the short term, as this column noted yesterday. But history also shows these actions alone won’t be able to sustain the market over time.
The sovereign wealth fund could be formidable if it has unlimited fire power. That’s not the case, though. Huijin has been burning through its cash over the past two years. Cash and cash equivalents have declined to 30 billion yuan ($4.1 billion) as of June, from a peak of 301 billion in 2021.
The cash has been used to pay dividends and interest to the fund’s shareholders — i.e. the government. Presumably, it was to help fund the cash-pinched government as the economy slowed.
Ultimately, to rejuvenate the market, the economy and corporate earnings growth need to pick up. And there’s not much the National Team can do to help with that.
Tyler Durden
Thu, 10/12/2023 – 23:20 - Map Explainer: The Gaza Strip
Map Explainer: The Gaza Strip
Recent attacks on Israel by Hamas have placed the Gaza Strip firmly in the spotlight of the global news cycle.
While conflict in that part of the world is thoroughly covered in headlines and news stories, more basic facts about Gaza receive less attention.
With this infographic, Visual Capitalist’s Nick Routley fills in some of those gaps, including demographics, infrastructure, and more.
Below, we outline three key facts to know about the Gaza Strip and the people who live there:
1. Gaza is Young and Increasingly Crowded
Gaza has a high fertility rate (3.9), and as a result, nearly half of the people living there are children. Much of this rapidly growing population lives in crowded cities and camps that are some of the most densely populated areas in the world.
The majority of people in the Gaza Strip are officially considered refugees by the UN. Over many decades, refugee camps have become permanent settlements, blending with the surrounding urban areas. Upwards of 80% of the population relies on international aid for basic services and sustenance.
In terms of religion, Gaza is very uniform. 99% of the population are Sunni Muslims. This is similar to Egypt and other North African nations.
2. The Territory is Tightly Controlled
Israel has enforced a land, air, and sea blockade since 2007, when Hamas took control of the Gaza Strip and Israel’s Security Cabinet labeled region a “hostile entity”. The land border of Gaza Strip is heavily fortified consisting of double-wired fencing and concrete barriers. These borders follow the “Green Line”, a demarcation set after the end of the Arab–Israeli War. There is also a 100-300 meter buffer zone inside the territory’s border where access is restricted.
There are two border crossings—one into Egypt in the south and one into Israel in the north—that a limited number of civilians can cross. Over the years, border crossings on the east side of the territory have been closed down. There is an additional large scale crossing on the bottom corner of the territory that serves as a checkpoint for goods entering from Egypt.
The region’s airspace is controlled by Israel. Even its electro-magnetic space is restricted, meaning many Palestinians rely on 2G and 3G.
3. Infrastructure is Patchy
Multiple years of conflict and underinvestment have left infrastructure in shambles in much of the Gaza Strip.
For example, there is a just single diesel power plant servicing the entire region. Power lines run into Gaza from neighboring Israel, but even in non-conflict periods, the region runs a large electricity deficit.
Gaza accesses fresh water via the Coastal Aquifer—an underground water supply that is dwindling due to over-extraction—and from desalination plants. International aid efforts are improving the situation, but infrastructure remains damaged by neglect and intermittent air strikes.
Water treatment infrastructure has slowly been improving due to foreign aid, and less raw sewage is now entering the Mediterranean Sea. This clean-up effort has helped create more recreation opportunities along the territory’s beaches.
Tyler Durden
Thu, 10/12/2023 – 23:00 - Banks Need More Than Profits For Wary Investors
Banks Need More Than Profits For Wary Investors
By Bre Bradham, Bloomberg markets live reporter and analyst
When US banks kick off the third-quarter earnings season Friday, it will mark the first in a long line of hurdles the group needs to clear in order to assuage investor fears.
Bank stocks are hovering near the lowest level of the year, a mark hit in May following First Republic Bank’s collapse. The KBW Bank Index has tumbled 24% this year, a sharp underperformance to the S&P 500 Index’s 13% gain. Five of the largest US banks, excluding JPMorgan Chase & Co., have combined to lose about $100 billion in market capitalization this year.
“Investors in the bank space just have about a half-dozen issues that are out there that need to get resolved to their better satisfaction,” Piper Sandler analyst R. Scott Siefers said.
Among the challenges are new regulatory proposals that would impose higher capital requirements on banks, unrealized losses in their securities’ portfolios and rising bad loan write-offs. The demise of three banks in the S&P 500 earlier this year is also still fresh in investors’ minds.
The sector fell 1% on Thursday, underperforming the broader market as yields climbed.
“Investors are sort of looking at things and saying, the spring was an actual crisis with three large bank failures. The summer was downward estimates revisions due to interest rates and funding pressures, and now you’re telling me we’re on the cusp of a potential credit cycle,” Siefers said. “The industry is in sort of a show-me phase right now.”
The weakness in recent weeks has been driven in part by concerns over unrealized losses due to rising bond yields. With the Federal Reserve’s path of interest-rate hikes remaining uncertain and instances of bank charge-offs due to borrower distress emerging, investors will likely remain bolted to the sidelines.
“Third-quarter is not likely to flip a switch from good to bad, but it is likely to affirm an upward progression of loan losses from what’s been unusually favorable levels,” Wells Fargo analyst Mike Mayo said about credit.
For Keefe, Bruyette & Woods analyst Christopher McGratty, it’s going to take time to get more constructive on bank stocks. The market can’t account for credit weakness until it can get a sense of just how deep it will run.
“There’s a high degree of unpredictability,” said McGratty. His firm has a market-weight stance on the sector.
Meanwhile, banks’ net interest income results will be in focus amid the higher deposit costs, as firms continue to compete for business amid the tumult sparked by the collapses of regional lenders like Silicon Valley Bank in March. JPMorgan, one of the first firms scheduled to report third-quarter results on Friday, is expected to be an NII outlier among its biggest peers because of its acquisition of First Republic.
Shares of the nation’s biggest bank gained more than 8% this year, adding $30 billion in market capitalization. That’s made JPMorgan roughly twice as big as the second-largest US bank by market value, Bank of America Corp.
Analysts expect guidance to reflect relative stability, following downward revisions from many banks over the summer.
Of course, the uncertainties could be resolved in a favorable way to banks. The Fed could engineer a soft landing, rate cuts could alleviate deposit costs and final versions of regulatory proposals may be tempered.
Given that the sector’s trading at such cheap valuations, some analysts have argued for investors to take a stock-picking approach. Others warn the group has become woefully undervalued and poised for a bounce. Earnings season will bring “micro” factors to “center stage” and banks could outperform, according to Citi analysts.
“Large-cap banks appear materially oversold,” UBS analyst Erika Najarian wrote in a note recently. “Once again, stocks are reflecting what we think are unwarranted existential concerns, rather than the fundamental issues.”
Tyler Durden
Thu, 10/12/2023 – 22:40 - Arnold Schwarzenegger Says Democrats Want To "Ruin" US Cities
Arnold Schwarzenegger Says Democrats Want To “Ruin” US Cities
Authored by Jack Phillips via The Epoch Times (Emphasis ours),
Former California Gov. Arnold Schwarzenegger said in a recent interview that Democrats want to “ruin” American cities.
During an interview with actor Rob Lowe on his podcast, the former bodybuilder and “Terminator” star responded to a statement that the Republican Party wants “strong military, low taxes, less government, [and] more personal freedoms.”
Mr. Schwarzenegger, 76, chimed in by adding “strong law enforcement.”
When he was asked by Mr. Lowe what it means to be a Democrat, he responded: “Ruin your cities. That’s what the Democrats would say. We are about ruining the cities. We want to [expletive] up every city in America. That seems to be the theme right now.”
“Why is that?” Mr. Lowe asked.
“I have no idea,” he replied.
Although Mr. Schwarzenegger served as California governor as a Republican between 2003 and 2011, he became increasingly critical of GOP policies during former President Donald Trump’s tenure and also made a number of controversial statements during the COVID-19 pandemic. Notably, he criticized people for not wearing masks or getting COVID-19 vaccines, drawing pushback from conservative media and via social media.
“There is a virus here. It kills people. And the only way we prevent it is to get vaccinated, to wear masks, to do social distancing, washing your hands all the time, and not just to think about, ‘Well, my freedom is being disturbed here,'” he said in 2021, drawing condemnation. “No. Screw your freedom. With freedom comes obligations and responsibilities.”
Despite the comments, in a September interview with the New York Times, the former California governor insisted that believes he still has a home in the Republican Party.
“There is a home for me in the Republican Party. In the state of California, the Republican Party has done a horrible job to represent the people,” he claimed. “When you’re in the Legislature, you’re not supposed to represent only your district; you’re also supposed to represent the state and move the state forward and work with everyone in order to make life better.”
He then claimed that the “majority of Californians … want to get rid of fossil fuels,” which Republicans do not support. He did not cite evidence for his assertion.
But in a recent “View” appearance, he stated that the current U.S. immigration system is “set up to commit a crime,” while appearing to suggest that more work visas should be issued. He also cited concerns about drug cartels and terrorism for better border security.
“You have to really have comprehensive immigration reform, and you have to look at this immigration problem in a comprehensive way. You can, first of all, I believe very strongly in having a border that no one can get through. That’s number one for me,” he stated on “The View” earlier this year.
He added: “Number two, what is important is that we have visas available for people that want to work in the United States, so they don’t have to work illegally. It is bogus, we need the workers here,” he said, responding to co-host Ana Navarro.
Tyler Durden
Thu, 10/12/2023 – 22:20 - Victor Davis Hanson: Hamas And Amoral Clarity
Victor Davis Hanson: Hamas And Amoral Clarity
Authored by Victor Davis Hanson via American Greatness,
One unexpected blowback from the medieval Hamas’s barbaric murdering of hundreds of Israeli civilians is the revelation of current global amorality.
More than 20 Harvard university identity politics groups pledged their support to the Hamas murderers—to the utter silence for days of Harvard President Claudine Gay.
Americans knew higher education practiced racist admission policies. It has long promoted racially segregated dorms and graduations. And de facto it has destroyed the First Amendment.
But the overt support for Hamas killers by the diversity, equity, and inclusion crowd on a lot of campuses exposes to Americans the real moral and intellectual rot in higher education.
Democratic Socialist members of the new woke Democrat Party openly expressed ecstatic support for Hamas’s bloodwork.
Their biggest fears were not dead fellow Americans or hostages, or some 1,000 butchered Jewish civilians. Instead they were fearful that righteous Israeli retaliation might destroy the Hamas death machine.
Palestinians for years fooled naïfs in Europe and the Obama and Biden administrations into sending billions of dollars into Gaza.
These monies were channeled to tunnel into Israel, to obtain a huge rocket arsenal, and to craft plans to wipe out Jews.
The Biden administration has blood on its hands.
As soon as Biden took power, he resumed massive subsidies to radical Palestinians, canceled by the prior Trump administration.
He ignored warnings from his own state Department that such fungible moneys would soon fuel Hamas terrorism.
His administration dropped sanctions against Iran, ensuring that Tehran would enjoy a multi-billion-dollar windfall to be distributed to Israel’s existential enemies—another fact well known to the Biden administration.
If the Biden administration had announced overtly that it was rabidly anti-Israel, it would be hard to imagine anything it could have done differently from its present nihilist behavior.
Biden and company quickly restarted the defunct Iran appeasement deal—a leftover from the anti-Israeli Obama administration. No surprise, they appointed radical pro-Iranian activist Robert Malley to head the negotiations.
Malley allegedly has leaked American classified documents to Iranian officials and is under investigation by the FBI. He did his best to place pro-Iranian, anti-American activists into the high echelons of the U.S. government.
Biden was intent on forcing South Korea to release to Iran $6 billion in sanctioned frozen money.
That expectation of cash ensured Iran would be reimbursed for its present terrorist arming spree.
Secretary of State Antony Blinken shamefully tweeted that Israel should settle for an immediate ceasefire. No wonder he soon withdrew his unhinged posting.
That idiocy would be the moral equivalent of an American ally in December1941 urging the U.S. to seek negotiations with imperial Japan after its surprise bombing of Pearl Harbor—to avoid a “cycle of violence.”
The Biden team has drained strategic arms stockpiles in Israel, designed to help the Jewish state in extremis.
It recklessly abandoned a multibillion-dollar arms trove in Kabul, some of which reportedly made its way from Taliban killers to the Hamas murderers.
Once the mass murdering started, the amoral clarity of our “allies” was stunning.
NATO partner Turkey openly sided with the killers. It —along with Blinken—called for a cease fire—at the moment the Hamas death squads had finished, and Israel was ready to hold Hamas to account.
Qatar, where the U.S. Central Command is based, proved little more than a Hamas front.
It offers sanctuary to the architects of Hamas killing. And Qatar ensures a safe financial pipeline to Hamas from Iran and the radical Arab world.
Some of the most vehement current supporters of the Hamas death squads were immigrants to America from the Middle East.
Oddly, they apparently had fled just such illiberal Middle East regimes to reach a tolerant, democratic, and secure United States.
Yet they now endorse the Hamas butchering of Jewish civilians. Its savagery is aimed at executing, raping, and beheading Jews, and then mutilating their bodies.
Hamas apparently hopes to shock the Israeli government into voluntarily committing suicide—in line with the ancient Hamas agenda to destroy the Jewish state.
In a strange way, this reign of death has become a touchstone, an acid test of sorts that has revealed the utter amorality of enemies abroad and quite dangerous people at home.
It is past time that Americans deal with the medieval world that was revealed this week rather than keep dreaming in the fantasy world of our government.
Americans need to stop illegal immigration and restore their southern border, while ceasing all immigration from unhinged, hostile nations.
The military must return to its deterrent role and fire its woke commissariat.
Our leaders must accept that in the last three years of the Biden administration, serial American appeasement abroad, disunity at home, and social chaos have encouraged an entire host of enemies —China, Russia, Iran, North Korea, Middle East illiberal regimes, and former friends like Turkey and Qatar.
And our enemies dream of doing to us what we just saw in Israel.
Tyler Durden
Thu, 10/12/2023 – 21:40 - Visualizing The R&D Investment Of The 10 Biggest Nasdaq Companies
Visualizing The R&D Investment Of The 10 Biggest Nasdaq Companies
Over the last decade, Apple’s research and development (R&D) spending has jumped from about $3 billion to over $26 billion.
The world’s largest company, like other tech giants, is investing heavily in R&D on the heels of AI disruption and the rapid speed of innovation. As these technologies become more pervasive in our daily lives, so too has investment in R&D across major companies.
As Visual Capitalist’s Dorothy Neufeld shows in the following graphic, using data from Trendline, the scale of spending at the 10 biggest companies listed on the Nasdaq is significant…
R&D Investment by the 10 Biggest Nasdaq Firms
In 2022, the 10 largest Nasdaq companies by market cap spent roughly $222 billion on R&D—a figure that has risen considerably in recent years.
*Trailing 12 months, ending December 31, 2022. Nvidia and Broadcom data is as of January 29, 2023.
Amazon invested over $73 billion in R&D last year, more than double the levels seen at Meta or Apple. R&D spending increased 30% over the year for the retail heavyweight, as it invested in technology infrastructure that underlies everything from software to autonomous vehicles.
Facebook parent Meta spent almost a third of its annual revenues on R&D in 2022, the highest proportion across the 10 largest Nasdaq companies. The majority of these investments were through its research arm, Reality Labs, which is focused on building a metaverse. However, the company has since pivoted away from its work on the metaverse due to a lackluster response—instead focusing on generative AI.
Chipmaker Nvidia, which has seen its market capitalization skyrocket in 2023, spent over $7 billion on R&D across generative AI, deep learning, robotics, and a number of other research areas. Between 2021 and 2022, investments in R&D grew by 34%.
Fastest Rising R&D Spenders, Globally
Beyond big tech names in the Nasdaq, many companies are accelerating their investment in R&D as the complexity of technology increases.
The table below shows the top 10 companies globally with the highest increase in R&D spend, based on analysis by fDi Intelligence.
China’s largest electric vehicle maker, BYD, increased R&D investment by 133%, the most across companies analyzed. Among its primary research areas is the “Blade Battery”, which is a prismatic battery designed to hold as much as 50% more energy than comparable models.
Two chipmakers, AMD and TSMC also made the list, while three healthcare companies Moderna, Novo Nordisk, and Vertex Pharmaceuticals made significant R&D investments.
The Future of Innovation Spending
Even as many big tech names saw their stock prices fall in 2022, many dramatically increased their R&D investment.
This came as tech firms laid off thousands of employees. Together, Amazon, Microsoft, and Google’s parent company Alphabet laid of 40,000 employees as of early 2023.
Despite challenging environments, the focus on R&D is evident. Large companies can apply innovation across numerous areas of their business, improve efficiencies, with the goal of making the most out of research dollars spent.
At the same time, the complexity of technology is accelerating, requiring companies to spend more to keep with the pace of innovation. This involves investment in engineers, research facilities, along with the cost of running more advanced technological infrastructure.
Between 2000 and 2020, global R&D spending increased more than threefold to $2.4 trillion, a trend that shows minimal signs of slowing.
Tyler Durden
Thu, 10/12/2023 – 21:20 - The Incredibles: Roughly 80% Of Grades Given At Harvard Are In The 'A' Range
The Incredibles: Roughly 80% Of Grades Given At Harvard Are In The ‘A’ Range
The Harvard Crimson on Thursday reported that 79 percent of grades given to Harvard students in 2020-21 were in the A range.
That is an increase of 20 percent over the last decade.
It leaves the question of not how difficult it is to flunk out of Harvard but how difficult it is not to excel. Faculty have apparently solved any equity issues by making everyone a top student.
The problem was raised in the movie “The Incredibles,” when the villainous character “Syndrome” reveals a plan to make everyone a superhero.
Syndrome’s motive is hardly altruistic: He hated superheroes and “with everyone super, no one will be.”
In 2010, 60 percent of Harvard students were given grades in the A range and that was viewed at the time as rather scandalous.
Now, to not get an A, is apparently a shocker.
Dean of Undergraduate Education Amanda Claybaugh and Dean of Harvard College Rakesh Khurana reportedly presented the data at the first meeting this year of the Faculty of Arts and Sciences.
Claybaugh admitted that the “report establishes we have a problem — or rather, we have two: the intertwined problems of grade inflation and compression.”
She noted that the effort to secure better teaching evaluations may be driving the upward shift.
She also noted that it obviously “complicates selection processes for prizes, fellowships, or induction into Phi Beta Kappa, which rely heavily on students’ grade point averages.”
In other words, to paraphrase Syndrome: “With everyone an A student, no one will be.”
Yet, the suggestions on how to deal with the problem were even more bizarre. Romance languages and literatures Professor Annabel Kim suggested the “abolition of grading” and the institution of “narrative-based” evaluations.It is not clear how employers would be informed of the narrative-based performance of students in school.
On this trajectory, Harvard will be at 100 percent ‘A’s in year 2033. It may seem the perfect grading system for a trophy generation. However, my students have long objected that they never wanted the trophies. It is not their generational problem, it is ours. We resolved the struggle over tough decisions by not making them.
What is interesting is that Harvard is creating an effective three-grade system where the curve runs from A+ to A-.
The new report seems to vindicate William F. Buckley, Jr. when he declared “I’d rather entrust the government of the United States to the first 400 people listed in the Boston telephone directory than to the faculty of Harvard University.”
Tyler Durden
Thu, 10/12/2023 – 21:00 - A "Sh*t Thing" To Say: Explosive Kerfuffle Erupts Between House Dems After Jewish Rep. Accused Of Slamming Muslims
A “Sh*t Thing” To Say: Explosive Kerfuffle Erupts Between House Dems After Jewish Rep. Accused Of Slamming Muslims
House Democrats had a tense closed-door caucus meeting on Wednesday, after one lawmaker accused another of saying a “shit thing” about Muslims.
The kerfuffle erupted after Rep. Susan Wild (D-PA) described a virtual vigil she attended in the wake of this weekend’s Hamas attack, Politico reports. Wild explained that she didn’t want any religious community to feel ostracized, and noted that Muslim leaders weren’t present at the event to condemn the attack, when Rep. Josh Gottheimer (D-NJ) – a prominent Jewish Democrat and Israel hawk, loudly interjected.
Accounts differ, however, on whether Gottheimer was referring to Muslims or made an ill-timed remark in an unrelated conversation, with some attendees overhearing him saying “because they’re all guilty” and others saying he stated “because they should feel guilty.” A spokesperson for Gottheimer strongly denied that he was talking about Muslims.
“Congressman Gottheimer never said anything about Muslims in today’s caucus meeting, a community he cares deeply about. Congressman Gottheimer said that the members of Congress who have not yet condemned Hamas terrorists should feel guilty,” said his spokesperson Chris D’Aloia.
“Joshua!” one Democratic lawmaker shouted out in response to his remarks.
Gottheimer insisted later that his comments were taken out of context, and made as part of a separate conversation about condemning Hamas. He has notably complained in recent days that there’s been insufficient criticism of Hamas for the attack.
Rep. Greg Casar (D-TX), a first term progressive lawmaker, then confronted Gottheimer – with Cesar telling Gottheimer that his remarks were a “shit thing to say,” and were “shameful,” after the two argued back and forth, according to six witnesses.
Amid the spat, Reps. Rashida Tlaib (D-Mich.), Ilhan Omar (D-Minn.), Alexandria Ocasio-Cortez (D-N.Y.) and other progressive lawmakers were spotted leaving the party meeting together.
The dustup shined a bright light on the longtime fracture within the Democratic Party over the Israeli-Palestinian conflict. It’s a divide that the party had largely skirted following the bloody surprise terrorist attack this weekend — but one that threatens to roil Democrats further as the war in the Middle East progresses in the weeks ahead. -Politico
Gottheimer’s spokesman then peddled in unconfirmed reports that Hamas beheaded babies.
“Congressman Gottheimer is furious and deeply disappointed with Members of Congress who have yet to condemn Hamas terrorists for brutally murdering, raping, burning alive, kidnapping, torturing, and beheading innocent babies, children, women, men, and grandparents — including Americans,” said D’Aloia, adding “Congressman Gottheimer said that those members who have not condemned Hamas terrorists should indeed feel guilty. Of course, Congressman Gottheimer doesn’t blame innocent Palestinian civilians — he blames the terrorists.”
The White House has been casting a ‘very public shadow’ of support for Israel – with President Biden on Tuesday forcefully denouncing Hamas’ attack as “pure, unadulterated evil,” and pledging that the United States “has Israel’s back.”
While a handful of progressive lawmakers have publicly pushed for a cease-fire, de-escalation and even stripping government support from Israel, most Democrats in Congress have largely stayed behind the president as he sidestepped those calls.
Biden also has urged lawmakers in both parties to provide emergency funding for Israel and condemned Hamas for the killing of more than 1,000 Israelis and the kidnapping of hundreds more.
Several progressive and more establishment-minded Democrats said that party unity has been palpable so far due in part to the gruesome nature of the attacks on Israel that took place. -Politico
“It was so grotesque that it ended up uniting people even if they have different views on the Israeli-Palestinian conflict. With the exception of a few of the [Democratic Socialists of America] chapters, you really haven’t seen any difference of opinion when it comes to this,” one House Democrat told the outlet.
“There are a couple of people, a handful of people, who are not part of the present, unanimous posture of progressives and Democrats,” said Jeremy Ben-Ami, president of liberal Jewish advocacy group J Street. “That’s where we are today in the immediate aftermath of this attack. I’m not going to say that’s where things will be in a week, two weeks, three weeks, but that’s where we are today.”
DSA Defection
Rep. Shri Thanedar (D-MI) declared in a Wednesday statement that the Democratic Socialists of America’s “inability to look at what has happened as terrorism is very upsetting and shocking,” and that he would be leaving the DSA over their stance on Israel.
I renounce my membership in the DSA pic.twitter.com/rtpxStKW2Q
— Congressman Shri Thanedar (@RepShriThanedar) October 11, 2023
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Tyler Durden
Thu, 10/12/2023 – 20:50 - Remember, Disinflation Doesn't Equal Falling Prices
Remember, Disinflation Doesn’t Equal Falling Prices
While progress in the fight against inflation has been stalling in the past three months, the inflation rate has come down significantly since peaking in June 2022.
However, as Statista’s Felix Richter notes, looking at the steep decline of the inflation rate since then, some people are probably thinking: “Great, inflation is cooling. But then why is everything still so expensive?”
Whenever we’re discussing inflation coming down, it’s important to distinguish between disinflation and deflation.
What we’ve seen over the past year and hope to see more of is disinflation, i.e. a deceleration of price increases (yes, increases).
For the overall price level to actually come down, the inflation rate would have to drop below zero, which would signify deflation.
While the Fed desperately wants inflation to come back down, it is aiming for 2 percent inflation, not deflation, because the latter creates a whole set of problems on its own.
As the following chart shows, the rate of inflation (yellow line) has come down quite a bit from its June 2022 peak of 8.9 percent. Consumer prices (blue line) continue to climb, however, and are now 18.6 percent higher than they were in February 2020, just before the pandemic hit.
You will find more infographics at Statista
So while some prices will or have already come back down from their peaks as supply chain disruptions and global crises recede – see gas prices for example – prices will continue to rise at the aggregate level, albeit hopefully at a slower rate.
Tyler Durden
Thu, 10/12/2023 – 20:40 - Iran's Raisi & Saudi Crown Prince Hold 1st Ever Phone Call Amid Israel-Gaza War
Iran’s Raisi & Saudi Crown Prince Hold 1st Ever Phone Call Amid Israel-Gaza War
Iranian President Ebrahim Raisi and Saudi Crown Prince Mohammed bin Salman (MbS) held their first-ever telephone conversation late on Wednesday to discuss “the need to end war crimes against Palestine.”
State-run news agency Saudi Press Agency (SPA) said MBS stressed the “necessity of adhering to the principles of international humanitarian law and expressed deep concern for the dire humanitarian situation in Gaza and its impact on civilians” and “reaffirmed the kingdom’s stance against targeting civilians in any way and the loss of innocent lives.”
MbS doubled down on his support for the Palestinian cause and his support for “efforts aimed at achieving comprehensive and fair peace that ensures the Palestinian people’s legitimate rights.”
According to Mohammad Jamshidi, political advisor to the Iranian president, the crown prince warned that failing to recognize Palestinian rights would further inflame the situation, adding that “cooperation between Riyadh and Tehran can contribute effectively and quickly to putting an end to the conflict inside Palestine.”
Raisi emphasized that the issue of Palestine “cannot be solved” without giving the Palestinians full rights.
This is pretty stunning. That MBS would agree to have his first conversation with Iranian president Raisi IN THE MIDST of this crisis, let alone what was said on that call regarding stopping the bombing of Gaza… https://t.co/CkvnaozlKK
— Trita Parsi (@tparsi) October 11, 2023
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The current situation in Palestine results from “repeated miscalculations by Western countries, led by the US,” Raisi said.
“Iran and Saudi Arabia, as major players in the region, can support the oppressed Palestinian people in the current circumstances, which are sensitive circumstances,” Raisi added.
Raisi also warned, “the crimes of the occupation and the American green light will cause devastating insecurity for [Israel] and its supporters.”
Iran and Saudi Arabia signed a historic Chinese-brokered reconciliation agreement in March this year to end years of regional tension between the two countries.
Several months later, Saudi Arabia entered US-sponsored talks to normalize ties with Israel. While publicly holding on to the Palestinian issue as a condition, Riyadh made major demands in exchange for a deal, including a firm defense treaty with Washington, help developing a nuclear program, and access to more advanced weaponry.
Saudi state media reports that Saudi leader Mohammed bin Salman and Iran’s President Ebrahim Raisi — bitter rivals — spoke yesterday about “the ongoing military escalation in Gaza” and “unwavering stance in standing up for the Palestinian Cause.”https://t.co/3POsYIsF74 pic.twitter.com/CVCjmKiNr5
— Glenn Greenwald (@ggreenwald) October 12, 2023
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But Hamas “Operation Al-Aqsa Flood” and the devastating Israeli response against civilians in the Gaza Strip have seemingly eroded any hope of the deal being reached.
According to The Cradle columnist Mohammad Sweidan, Riyadh will now “find it nigh near impossible to abandon the request for Israeli concessions, particularly with Tel Aviv’s aggressive bombardment of civilians in the Gaza Strip now a daily occurrence.”
Tyler Durden
Thu, 10/12/2023 – 20:20 - Scalise Drops Out Of Speaker's Race After Failing To Win Over GOP Holdouts
Scalise Drops Out Of Speaker’s Race After Failing To Win Over GOP Holdouts
Update (2005ET): Despite winning his party’s nomination by a margin of 113-99, Rep. Steve Scalise (R-LA) has dropped out of the Speaker race, after a group of GOP holdouts refused to vote for him.
Majority Leader Steve Scalise, R-La., speaks to reporters after a closed-door meeting of House Republicans during which he was nominated as their candidate for Speaker of the House, on Capitol Hill, Wednesday, Oct. 11, 2023 (AP Photo/Mariam Zuhaib) The move leaves Republicans without a GOP nominee for the role, just nine days after former Speaker Kevin McCarthy (R-CA) was ousted.
“I was very clear we have to have everybody put their agendas on the side and focus on what this country needs this country is counting on us,” Scalise told reporters on Thursday, Axios reports. “But there’s some folks that really need to look in the mirror over the next couple of days and decide are we going to get it back on track, or they’re going to try to pursue their own agenda.”
NEW: Scalise is dropping out of the speaker race, per a member in the GOP conference meeting.
— Andrew Solender (@AndrewSolender) October 12, 2023
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As Axios further notes:
Zoom in: Scalise won the nomination on Wednesday by a 113-99 margin, but on Thursday it became clear he wasn’t making the progress needed to risk a vote on the House floor.
- The House GOP is in a tight spot, with any combination of five Republicans being enough to sink a speaker bid — at least without help from Democrats.
What’s next: House Judiciary Chair Jim Jordan (R-Ohio) narrowly lost the nomination to Scalise, and could now contest the nomination again.
* * *
After House Republicans narrowly nominated Majority Leader Steve Scalise (R-LA) to be the next speaker over Rep. Jim Jordan (R-OH) by a vote of 113 to 99, several GOP lawmakers publicly announced they wouldn’t support him in a chamber-wide vote.
“They knew I was with [Judiciary Chairman Jim Jordan, R-Ohio] in the room, and I thought I might go with Scalise if everybody was gonna get behind Scalise, that was fine, but it’s just not that way,” said Rep. Barry Moore (R-AL) following a meeting with the House Freedom Caucus. “There’s just people that are not on his team.”
At least six GOP lawmakers said they wouldn’t vote for Scalise, all but guaranteeing a repeat of January’s drawn out Speaker vote when Rep. Kevin McCarthy (R-CA) took 15 ballots to secure the position.
“I just don’t think Steve’s got the votes,” Moore added.
Scalise, 58, is a longtime member of House leadership favored by centrists and neocons. He needs at least 217 lawmakers to support his candidacy. Given the slim GOP majority in the chamber, and Democrats expected to nominate Minority Leader Hakeem Jeffries (D-NY) to the post as they did during January’s Speakership elections, Scalise faces an uphill battle.
The big money donors and lobbyists want Steve Scalise as Speaker.
The voters want Jim Jordan as Speaker.
So naturally, the Republican Congress goes behind closed doors on a secret ballot and screws their voters over again, AS USUAL.
— Catturd ™ (@catturd2) October 12, 2023
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House Republicans are likely to meet behind closed doors today to try and hash out their differences before the next chamber-wide vote.
Rep. Chip Roy (R-TX) Scalise can only afford to lose four votes on the floor.
Some members said they were frustrated by Scalise allies voting down an earlier measure aimed at raising the threshold to elect a speaker candidate to 217 — a majority of the House.
“I put the amendment forward this morning to say, let’s figure this out, because I can count votes. I’m not a whip, but I can count votes,” said Rep. Chip Roy, R-Texas, who led the amendment that was backed by a significant number of GOP lawmakers.
“I was just making it very clear that if you rush this to the floor, I’m a hard no. So we’ll go now have some conversations and go figure out where we’re gonna go.” -Fox News
Following a meeting with GOP leaders, Rep. Dusty Johnson (R-SD) who leads the Main Street Caucus, said the division within the GOP “does not look good for the House or for the country.”
“Frankly, I think it would be easier in a political environment where people understood that governing requires some give and take,” he added. “I never get everything I want in any negotiation. There are a lot of people around here who don’t understand that, and it makes it hard to govern. It is not a problem unique to the Republican Party, but it is on full display in our party today.”
When asked if Republicans simply need to huddle in a room to settle their differences, Johnson replied: “I would like to be able to have the power to lock some people in some places, for sure.”
As The Hill notes:
IF HE GETS THE JOB, SCALISE INHERITS a race against the shutdown clock from his predecessor. Lawmakers have until Nov. 17 to fund the government or risk another shutdown, and multiple members, including Scalise, have said in recent days that Congress may need to once again rely on a stopgap spending bill to keep the lights on.
The House will come into session at Noon.
Tyler Durden
Thu, 10/12/2023 – 20:03 - Dumbocracy Achieved: ACT Test Scores For US Students Drop To 30-Year Low
Dumbocracy Achieved: ACT Test Scores For US Students Drop To 30-Year Low
The government-enforced lockdown of schools and months of forced remote learning during Covid have devastated the education of America’s future leaders. New data on ACT college admissions tests shows high school students’ scores have plunged to the lowest in over three decades.
According to data published by ACT, the nonprofit organization that administers the college readiness exam, the average composite score on the ACT test fell to 19.5 for the class of 2023, a decline of .3 points from 2022. The average scores in mathematics, reading, and science subjects were below ACT College Readiness Benchmarks, indicating fewer seniors than ever are ready for college.
Source: AXIOS “We are also continuing to see a rise in the number of seniors leaving high school without meeting any of the college readiness benchmarks, even as student GPAs continue to rise and students report that they feel prepared to be successful in college,” ACT CEO Janet Godwin wrote in a statement.
One of the best examples of a school system caught in a grading scandal is the Baltimore City Public Schools system. Investigative journalist Chris Papst of Fox45 News’ Project Baltimore has found dozens of schools with very few kids proficient in critical subjects on state exams despite some earning satisfactory grades.
Godwin continued, “The hard truth is that we are not doing enough to ensure that graduates are truly ready for postsecondary success in college and career. These systemic problems require sustained action and support at the policy level. This is not up to teachers and principals alone – it is a shared national priority and imperative.”
About 1.4 million high school seniors took the ACT test, about 21% of them met benchmarks for college subjects. And a shocking 43% met none of these benchmarks.
Readers have well-understood the Covid crisis and government lockdowns unleashed a ‘learning poverty.’
Last fall, Anthony Fauci told corporate media he had “nothing to do” with school lockdowns and the resulting learning loss among public school students.
But history shows Facui is a liar.
Fauci does it again. Claims he had NOTHING to do with the shutdowns. Do we have to play this compilation again? Apparently so. pic.twitter.com/73L2pDpABS
— Justin Hart (@justin_hart) October 16, 2022
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Meanwhile, some universities and colleges no longer require applicants to submit ACT and SAT standardized tests. This may be because the education-industrial complex understands the dumbing down of the youth – plus, the continuation of the EDU bubble is only made possible by giving false promises of future success to the younger generation while strapping them with $100,000 in student debt.
Also, there needs to be a nationwide discussion on ‘woke’ math, and gender pronoun studies – and how these subjects will produce tomorrow’s rocket scientists.
The worsening implosion of the public school system is more free advertisement for parents to consider homeschooling.
Tyler Durden
Thu, 10/12/2023 – 20:00 - RFK Jr. Sees Surge In Fundraising After Declaring Independent Run
RFK Jr. Sees Surge In Fundraising After Declaring Independent Run
Authored by Jeff Louderback via The Epoch Times (emphasis ours),
Within hours of Robert F. Kennedy Jr.’s announcement that he will run for president as an independent and not a Democrat, the super PAC supporting his candidacy raised more than $11 million.
Presidential candidate Robert F. Kennedy Jr. makes a campaign announcement at a press conference in Philadelphia, Pa. on Oct. 9, 2023. Mr. Kennedy announced he will end his Democratic primary bid and will run for president as an independent. (Jessica Kourkounis/Getty Images) American Values 2024 disclosed on Oct. 10 that it has generated $11.28 million since Mr. Kennedy told an audience in front of the National Constitution Center in Philadelphia, “I’m here to declare myself an independent candidate for president of the United States.”
Individual events have spurred bountiful fundraising for Mr. Kennedy. In September, a private fundraiser performance by musician Eric Clapton generated more than $2 million that was split between the campaign and American Values 2024.
The organization tallied about $6.47 million in July from a mix of donors who are registered Democrats and Republicans, according to American Values 2024. That number included about $5 million collected during Mr. Kennedy’s testimony in a hearing about censorship before the House Judiciary Select Subcommittee on the Weaponization of the Federal Government.
Individuals can give as much as $3,300 to a political candidate’s campaign, according to the Federal Election Commission.
Super political action committees (PACs) are allowed to raise unlimited sums of money from corporations, unions, associations, and individuals and “spend unlimited sums to overtly advocate for or against political candidates,” according to OpenSecrets, an organization that tracks money in U.S. politics and its impact on elections and public policy.
Unlike traditional PACs, super PACS may not contribute money directly to political candidates.
Prominent Democratic Party donors like Abby Rockefeller have contributed to American Values 2024, but Republican donors have given a majority of the money the super PAC has received, including former President Donald Trump donor Tim Mellon, according to American Values 2024 reports.
Tony Lyons, co-chair of American Values 2024, spoke to The Epoch Times about the influx of support.
“People feel that the Democratic National Committee was disenfranchising them and that Bobby would not get the nomination based on the rules the DNC was putting into place and the inflammatory statements they have made about him time after time,” he said.
“They feel that their vote wouldn’t count, and that their donation wouldn’t be helpful because the primary would be rigged. Just as Bobby Kennedy sees a path to victory as an independent, so do the donors that were reluctant to contribute with him running as a Democrat,” Mr. Lyons explained.
Robert F. Kennedy Jr. speaks at a campaign event in Philadelphia on Oct. 9, 2023. (NTD/Screenshot via NTD) George Washington, America’s first president, is the only independent candidate to win election to the nation’s highest office. No independent candidate has won an electoral vote in the past 50 years. America, Mr. Kennedy believes, is ready for “a new page in American politics.”
“There have been independent candidates before. But this time is different. This time, the independent is going to win,” Mr. Kennedy said.
During his Oct. 9 announcement in Philadelphia, Mr. Kennedy noted that “three-fourths of Americans believe President (Joe) Biden is too old to govern effectively. President Trump faces multiple civil and criminal trials. Both have favorability ratings deep in negative territory.”
He also referenced a recent Gallup poll showing that 63 percent of U.S. adults agree with the statement that the Republican and Democrat parties do “such a poor job” of representing Americans that “a third major party is needed.”
A Reuters/Ipsos poll released last week indicated that Mr. Kennedy could draw support from around one in seven U.S. voters in the 2024 presidential election. In a three-way race, President Trump received 33 percent support compared to 31 percent for President Biden and 14 percent for Mr. Kennedy.
Ahead of Mr. Kennedy’s Oct. 9 announcement, a poll commissioned by American Values 2024 and conducted by John Zogby Strategies showed that, in a three-way matchup, President Trump and President Biden were tied at 38 percent each, and Mr. Kennedy generated 19 percent support.
“The media pundits will tell you we have no chance. They say my only impact will be to draw votes from other candidates,” Mr. Kennedy said on Oct. 9 in Philadelphia.
“The Democrats are terrified I’ll spoil the election for President Biden. The Republicans fear I’ll spoil it for President Trump. The truth is—they’re both right! But only their inside-the-beltway myopia deludes them into thinking we have no chance to win.”
American Values 2024 will hire surrogates to go out in public and amplify his message.
“He [Mr. Kennedy] thinks this election will be won by reaching voters through podcasts and alternative media outlets that have more readers and viewers than legacy media,” Mr. Lyons said.
American Values 2024 has raised around $28 million since its inception in fall 2022, according to Mr. Lyons. The organization believes it can raise $100 million by the end of December.
Supporters of Robert F. Kennedy Jr. listen to the announcement that he will run as an independent for president, in Philadelphia, on Oct. 9, 2023. (Jeff Louderback/The Epoch Times) The super PAC is also building a volunteer network, launching a Robert F. Kennedy Jr. fitness program, and organizing car caravans to travel across the country. Some of the money will be used for targeted advertisements in newspapers and on billboards and social media.
Since announcing his candidacy in April to challenge President Joe Biden for the 2024 Democrat party nomination, Mr. Kennedy has gained widespread support from conservative and moderate Republicans, independents, Libertarians, and moderate Democrats.
Last week, the Conservative Political Action Conference (CPAC) said that Mr. Kennedy would address the organization’s Investor Summit to Save America in Las Vegas later this month. Republican presidential candidate Vivek Ramaswamy and Kari Lake, who narrowly lost a gubernatorial bid in Arizona last year and is now running for U.S. Senate, will also speak.
“Robert F. Kennedy Jr. has a unique voice in advocating for the defunding of the weaponized bureaucracy and ensuring the constitutional right of medical freedom,” CPAC Chairman Matt Schlapp said in a statement. “Kennedy joining such an important event is a reflection of the splintering of the left-wing coalition that has gone full woke Marxist to the point that traditional liberals don’t feel welcome anymore.”
Mr. Kennedy said that “declaring independence from the Democratic party” was a “painful” decision that he did not take lightly because of his family’s history with the party.
During an August interview with The Epoch Times in Columbia, South Carolina, he said, “I’m a Democrat. The Democrat party has lost its way, and I want to return it to its traditional ideals.”
Mr. Kennedy faced what he deemed multiple roadblocks to “fair primary elections” from the DNC. Earlier this year, the organization voted to give President Biden its full support. At the same meeting, the DNC voted to replace New Hampshire with South Carolina as the first-in-the-nation primary state. The organization has warned that New Hampshire will face potential penalties if that state’s Democrat primary does not comply with new primary calendar plans.
Mr. Kennedy told supporters in New Hampshire that he would have to make a decision before Oct. 15 to run as an independent and that it would require about $15 million in funds to get on the ballot in all 50 states.
Tyler Durden
Thu, 10/12/2023 – 19:40 - Ellison Testifies Bankman-Fried Was "Freaking Out" About Inability To Raise Capital From Saudis
Ellison Testifies Bankman-Fried Was “Freaking Out” About Inability To Raise Capital From Saudis
On her third day of testimony former Alameda Research Chief Executive Officer Caroline Ellison detailed more interactions with Alameda employees and how SBF was “freaking out” over not being able to raise cash from the Saudis. Her testimony also expounded on the hole in FTX’s balance sheet and the internal stress constantly shuffling loans caused at FTX and Alameda.
Bloomberg said Thursday that Ellison looked “more relaxed than in previous days” of testimony. We guess once you’ve detailed how you used the IDs of Thai hookers to set up fake crypto accounts to bribe the Chinese government, the rest of the fraud admissions just seem like easy work and just kinda roll off the tongue.
Among the items brought to light on day 3 of her testimony was the claim that SBF wouldn’t let her quit when she wanted to. Ellison said in court: “He said I couldn’t I was too important to Alameda and I should stay at Alameda.”
On Thursday Ellison said she admitted to Alameda employees that the company likely wasn’t going to make it: “A lot of employees had been asking me about what was going on or what the implications was for them. I was hoping that some might stay, but if my goal was to get them to stay, I would have asked them to stay. My goal was to inform Alameda employees what had been going on and what the implications were.”
She said the employees were grateful she was “open and honest with them.”
She detailed more on Thursday about how SBF was “freaking out” about not being able to raise money from Mohammed bin Salman: “He told me he went to the Middle East and tried to raise funds there but it didn’t sound like he had success.” We had detailed in yesterday’s testimony that MBS was one place where FTX was potentially looking to raise capital.
Ellison again talked about how she was worried about Alameda’s lenders recalling loans in summer 2022. Talking about the 7 alternate balance sheets she used with FTX to lie about the company’s financial position, Ellison said Thursday: “I don’t recall if we discussed all of them, I know we discussed some.”
She also told the jury how she wasn’t “as good a manager as she could be”, Bloomberg wrote. Ellison said in court: “By limiting factors in scaling I meant those were things that were preventing Alameda from doing as well and making as much money as we could. I thought the biggest factor was that [Sam] Trabucco and I weren’t as good managers or leaders as we could be and we weren’t pushing employees to you know make new things or do better in the way that I wished we were.”
Ellison also admitted that Alameda had an “improper advantage” from being so close to FTX and having access to customer funds. In 2022, she had told Bloomberg that the entities were walled off from each other: “We definitely have a Chinese wall in terms of information sharing to ensure that no one in Alameda would get customer information from FTX or anything like that, or any sort of special treatment from FTX. It’s very important for FTX to be perceived as a fair, neutral marketplace where everyone gets an equal shot.”
She said that communication broke down between her and SBF after their breakup, stating in court Thursday: “I tried to avoid [one on one conversations] and avoid spending much time in social settings. We talked sometimes outside of work. He still lived in the same apartment, so it’s hard to avoid that entirely.”
“There were periods of time when he wasn’t paying attention to Alameda,” she also testified, helping make the point from the defense that SBF was not always aware of Alameda’s daily operations.
Ellison claimed she was unaware of government probes into FTX and Alameda until after a November meeting. She testified that the FBI confiscated her mother’s and boyfriend’s computers, both of whom were also involved with Alameda and FTX. Ellison pleaded guilty and agreed to cooperate with prosecutors in December after multiple meetings, including a lengthy one this Monday.
Recall, we detailed Ellison’s sordid second day of testimony earlier, wherein she talked about falsely using the IDs of Thai hookers to bribe Chinese officials and how even FTX’s fabricated balance sheets, laden with FTX’s FTT token and other tokens closely affiliated with Bankman-Fried, were concerning.
On Wednesday, @teddyschleifer reported on X that “Caroline Ellison testified that Sam Bankman-Fried ordered her to lie in mid 2022 to Genesis, one of FTX’s lenders, about Alameda’s balance sheet,” he wrote. “Caroline prepared a bunch of bullshit balance-sheets that they could send, and Sam chose ‘Alternative 7’ as the best lie of the bunch.”
Tyler Durden
Thu, 10/12/2023 – 19:20 - The Welfare State's Destruction Of Faith In Freedom
The Welfare State’s Destruction Of Faith In Freedom
Authored by Jacob Hornberger via The Future of Freedom Foundation,
As I read about the life and death of billionaire Charles Feeney, I could not help but think what America’s welfare-state way of life has done to destroy many people’s faith in freedom.
According to an article in the New York Times, Feeney was “a pioneer of duty-free shops and and investor in technology start-ups.” He became a billionaire. And then he donated all of his $8 billion fortune to charity. He left himself around $2 million.
America’s welfare state way of life is based on the notion that the federal government is needed to force people to be good and caring to others.
That’s the idea, for example, behind Social Security.
If there was no Social Security, it is said, there would be seniors dying in the streets.
That’s because, they say, people, including children and grandchildren, cannot be trusted with the freedom to decide whether to honor their mother and father or grandparents on a voluntary basis. They must be forced to do so through the coercive apparatus of the Internal Revenue Service and the faceless bureaucracy of the Social Security Administration.
It’s the same, for example, with public schooling.
If the state didn’t force parents to herd their children into these governmental institutions, the poor would have no way to have their children educated.
The notion that there would be people with money to help out others in need is considered ludicrous.
And then along come people like Charles Feeney, who are more than willing to help out others with money they have accumulated.
Of course, there are countless instances of people helping others on a purely voluntary basis, but welfare-statists give them short shrift.
Consider, for examples, local drives to raise money for college scholarships for poorer students. Or food drives that are sometimes conducted at churches in America. People are more than willing to contribute to such drives.
In fact, guess who funds the churches themselves. No, not the government. The members of the church do that, on a purely voluntary basis, simply because they consider it an important thing that they wish to do.
Imagine if the government had been funding churches for the past 225 years. Imagine if a libertarian came along and suggested that such funding be immediately terminated. Imagine the response: “If we did that, the churches would cease to exist. Do you libertarians honestly believe that people would fund churches all on their own? And where would the poor go to church? Only the rich would have churches.”
Some would say that people don’t have enough money to donate to worthy causes. There is a good reason for that — the federal government’s income tax, which deprives people of an enormously large amount of money that could be saved, donated, invested, or spent. The more people are able to earn and keep, the more they are able to help out others. A society in which people are on the verge of starvation is a society where there is not going to be a large amount of donations to help out others.
Finally, there is something important to note about America’s welfare-state way of life: It does not reflect care and compassion, as welfare-warfare state proponents claim. That’s because care and compassion do not come from the coercive apparatus of the IRS and the faceless bureaucracy of the welfare state. They come only from the willing heart of the individual, who demonstrates such care and compassion by voluntarily helping others.
What we need in America is a revival of faith in freedom, ourselves, others, and God. When that revival comes, the welfare-state way of life will be finished.
Tyler Durden
Thu, 10/12/2023 – 19:00 - Menendez Charged With Conspiracy To Act As Foreign Agent Of Egypt
Menendez Charged With Conspiracy To Act As Foreign Agent Of Egypt
US Sen. Bob Menendez (D-NJ) was hit with a new charge Thursday that he conspired to act as an agent of the Egyptian government while he was head of the Senate’s Foreign Relations Committee.
In a superseding indictment filed in Manhattan federal court, Menendez was accused of violating the Foreign Agents Registration Act (FARA), which requires anyone acting as “an agent of a foreign principal” to register with the US government. Menendez was prohibited from doing so either way as a member of Congress.
The new charge comes weeks after Menendez and his wife Nadine were indicted for allegedly accepting bribes, as well as having “promised to take and took a series of acts on behalf of Egypt, including on behalf of Egyptian military and intelligence officials.”
According to the indictment, Menendez and his wife, along with business associate Wael Hana, met with an Egyptian intelligence official in Menendez’s Senate office in Washington DC, during which they discussed a US citizen who was injured in a 2015 airstrike by the Egyptian military – an incident which some members of Congress cited as a reason to withhold certain military aid to Egypt.
Shortly after the meeting, the Egyptian official texted Hana that if Menendez took care of the matter, “he will sit very comfortably.”
Hana texted back, “Orders, consider it done.”
In an email, Hana’s attorney, Lawrence Lustberg, said the “new allegation that Wael Hana was part of a plot concocted over dinner to enlist Senator Menendez as an agent of the Egyptian Government is as absurd as it is false.”
“As with the other charges in this indictment, Mr. Hana will vigorously defend against this new and baseless allegation,” he wrote.
Menendez and his wife have pleaded not guilty to the charges lodged against them last month. Hana pleaded not guilty last month to charges including conspiracy to commit bribery.
After Hana’s company was granted a lucrative monopoly by the Egyptian government to certify that all meat imported into that country met religious requirements, prosecutors said, Menendez urged U.S. agriculture officials to stop questioning the deal. –AP
Menendez was also accused of accepting “cash, gold, payments toward a home mortgage, compensation for a low-or-no-show job, a luxury vehicle, and other things of value” as part of a “corrupt relationship” with businessman Fred Daibes.
Daibes, a developer and former bank chairman, allegedly gave Menendez gold bars valued at approximately $400,000, in exchange for assistance in a case in which he faced federal bank charges.
Instead of facing over 10 years in prison, Daibes, a felon, only ended up serving probation after striking an agreement with the US Attorney’s Office in New Jersey.
“For purposes of the Federal Extortion Act, it makes no difference if the senator took an official act so long as he accepted the money and there was knowledge the money was in exchange for that official influence, even if he never carried out what he had promised he would do,” according to NBC Legal Analyst Danny Cevallos.
Menendez disclosed that his family had accepted gold bars in 2020. Daibes encountered bank fraud charges that could have netted him up to a decade in prison for lying about a nearly $2 million loan from Mariner’s Bank, where Daibes served as chairman.
Last year, however, New Jersey’s U.S. Attorney’s Office agreed to let Daibes plead guilty to one count and serve probation. They said Daibes had repaid the loan. -Fox News
According to the report, Menendez, 69, is ‘close’ with US Attorney Philip Sellinger – having supported him for the position, while Sellinger had previously raised funds for Menendez’s campaign.
Menendez also allegedly pushed prosecutors to grant leniency to friends of his associates.
One businessman, Jose Uribe, bought Nadine Menendez a $60,000 Mercedes Benz after she killed a man in a 2018 crash.
You know it’s bad when…
Tyler Durden
Thu, 10/12/2023 – 18:40 - Beyond Crypto: Zero-Knowledge Proofs Show Potential From Voting To Finance
Beyond Crypto: Zero-Knowledge Proofs Show Potential From Voting To Finance
Authored by Andrew Singer via CoinTelegraph.com,
In a world increasingly anxious about privacy and exploitation of one’s personal data by governments, corporations, social media platforms and banks, zero-knowledge proofs may offer some relief.
Indeed, this emerging cryptographic protocol could partially remedy two rapidly growing global deficits: privacy and truth.
ZK-proofs have already found a home within the cryptocurrency and blockchain sector — enabling scaling protocols to make Ethereum transactions faster and cheaper, for example. But this may just be the beginning.
One day, ZK-proofs could help convince your bank that your income is above a certain threshold — to qualify for a mortgage, for example — without revealing your actual income. Or prove to the election authorities that you are a resident or citizen without giving them your name, driver’s license or passport.
ZK-proofs open up a new world of potential applications, including “anonymous voting, decentralized games, proving personal information without fully disclosing your personal information, and fighting against fake news by proving the source of the news,” Polygon co-founder Jordi Baylina tells Magazine.
To this point, some in the cryptographic community already view ZK-proofs as a potential weapon in the looming struggle against false information, including AI-altered documents, images and identities.
“We may have a technological battle for truth coming up where ZK can play a critical part,” prize-winning cryptographer Jens Groth tells Magazine. “There is this idea of proof-carrying data,” i.e., data that carries within itself proofs of correctness including origin and provenance data, “so nirvana would be that all data we get are verified data.”
In some industry sectors like finance, ZK-proofs may profoundly alter how business is conducted. “We see this revolutionizing the audit industry,” Proven co-founder and CEO Rich Dewey tells Magazine in connection with ZK-enabled proof-of-solvency protocols, like the one his tech firm has developed. “The only question is the timeline.”
Requiring fewer resources
Even though ZK-proofs were first presented back in the 1980s by researchers Shafi Goldwasser, Silvio Micali and Charles Rackoff, only in the past decade have they had their “big breakthrough,” according to Baylina.
“Now it’s possible to prove any generic statement.” This statement — sometimes called a circuit — “can be programmed with a specific language and can be anything,” Baylina says.
ZK-proofs are computationally complex, which has arguably slowed their development, but their core intuition seems simple enough. As described in a forthcoming paper by the Federal Reserve Bank of St. Louis:
By using a zero-knowledge proof (ZKP), a party can prove to other parties that a computation was executed correctly. There is no need to replicate the computation—only the proof needs to be verified. Ideally, verifying a ZKP needs significantly less resources than re-executing the computation.”
What follows are some of the promising ZK-proof use cases on the table today — beyond the strict confines of the crypto sector — that may or may not involve the use of blockchains.
ZK-proofs require fewer resources when re-executing a computation. (Federal Reserve Bank of St. Louis)
Verifying digital voting
Electronic voting has been slow to catch on globally, but if and when it does, the odds are that ZK-proofs will play a prominent part. ZK-proofs are already being used in e-voting systems in trials in a number of Swiss towns and cantons, Dahlia Malkhi, distinguished scientist of Chainlink Labs, tells Magazine.
“ZK-proofs can add verifiability to an online election, allowing anyone to check that the votes were counted correctly,” explains Malkhi, without revealing how individuals voted — a key concern with electronic voting, she says.
Cryptographic electronic voting systems have been around for decades, Malkhi adds, but their adoption has been moderate. On the technical side, one of the challenges has been “the compromise of end-user devices, which ZK-proofs don’t protect against.”
There are other obstacles, too, that are beyond ZK-proofs purview or ability to control — which also may suggest their limitations.
Electronic voting requires a credible “digital identity” system, i.e., a link to “real world” information that isn’t always easy to secure. (Think of all those voting rolls on aged paper ledgers.) “ZK by itself cannot bootstrap e-voting,” Malkhi says.
Cryptographer Groth, like Malkhi, cites the need for some sort of “trust anchor” to make ZK-proofs impactful in everyday life. “Zero-knowledge proofs often need a hook to reality.”
Electronic “ballot boxes” like this could benefit from the added security of ZK-proofs. (Fred Miller)
Maybe one day, thanks to ZK-proofs, someone will be able to prove that they are older than 18 years of age or a United Kingdom citizen without having to pull out a driver’s license or passport, Groth tells Magazine, but “you cannot prove you’re over 18 out of thin air. You need the trust anchor that establishes your age,” he says, i.e., some authority that verifies your citizenship or birth year, adding:
In the future, organizations may issue ZK-friendly trust anchors, but right now, it is not common practice, so you have a bit of a chicken-and-egg problem.”
Privacy safeguards for CBDCs
Today, the world seems awash with central bank digital currency projects. According to the Atlantic Council, 130 countries representing 98% of global GDP are now exploring state-issued digital money.
But CBDCs come freighted with privacy questions, and some fear they could be misused by governments to surveil their own populations, for instance.
That is why high privacy guarantees are “at the core of most CBDC projects today,” Jonas Gross, chairman of the Digital Euro Association, tells Magazine.
ZK-proofs can be part of the solution, he adds, and it is for this reason that “various central banks are studying [ZK-proof] applications — for example, in the U.K., Japan and South Korea.”
“If privacy is a top priority, ZK-proofs should be considered,” Remo Nyffenegger, a co-author of the St. Louis Fed paper cited above and research assistant at the Center for Innovative Finance at the University of Basel, tells Magazine.
Indeed, the European Central Bank published a regulatory proposal for the digital euro in late June “and states therein that zero-knowledge proofs should be considered in the CBDC tech stack,” he adds.
Again, there may be limits on what exactly ZK-proofs can do by themselves. “I don’t see using ZK-proofs [alone] as sufficient because ongoing political discussions show that not all CBDC-related data will be obfuscated if ZK-proofs are used,” Gross comments. “High privacy also needs to be supported by regulation and educational efforts around the actual degree of privacy of a CBDC.”
Exposing an altered photo
AI apps are now so powerful that distinguishing between machine-generated images or documents and those created by human beings is already problematic. Things will only get worse, but ZK-proofs may offer at least a partial remedy.
“Blockchain tech and ZK-proofs could be used as built-in safeguards in these systems to verify the origin, authenticity, and ownership of AI-generated files and manage some of the risks associated with AI-generated content,” says Malkhi, while Groth adds:
There is interesting new research showing applications of ZK-proofs to demonstrate, for example, you’ve not altered a photo too much — i.e., combating fake news.”
High-end cameras that digitally sign photos along with metadata like location and timestamp are already on the market and can establish authenticity, continues Malkhi. The current problem is that these digital files are often enormous — much too large to post on a news service’s website, for instance.
But with ZK-proofs, their file size can be substantially reduced, making them practical to use online while preserving critical verification elements. “It could prove that the recording or image has not been altered, maybe [including] even the date, without revealing identity or location or whatever,” adds Baylina.
Proof-of-solvency with ZK-proofs?
Many believe that finance will be the first major business sector to be impacted by ZK-proofs. Indeed, 41% of respondents in Mina Foundation’s “State of Zero-knowledge Report 2022” agreed that finance was the industry “most in need of ZKPs,” far ahead of healthcare (12%), social media (5%) and e-commerce (3%).
In March, Mexican cryptocurrency exchange Bitso announced a partnership with tech firm Proven to implement a “proof of solvency” solution that relies on ZK-proofs. This protocol will soon enable investors, regulators and others to know whether the exchange is solvent — i.e., its obligations are less than its assets — based on daily reports.
One of the more ingenious aspects of Proven’s protocol is that it involves the exchange’s customers in the process of keeping the exchange honest. It’s a sort of crowd-sourcing version of auditing.
Co-founders Dewey and Agustin Lebron tell Magazine that every day, an exchange (e.g., Bitso) publishes a cryptographic proof-of-solvency attestation. And when it does, each individual client/user of the exchange is issued a “receipt” that reflects that individual’s unique holdings. Millions of digital receipts might be issued on a daily basis.
What if one day a customer doesn’t receive a daily receipt, or it’s wrong? That user might take to Twitter or some other social media venue and complain or ask questions. Have others experienced something similar? A thread might grow.
This protocol relies on the law of big numbers. Bitso, for instance, has some five million users, and the presumption is that a critical mass of complainants might surface quickly, collectively waving a red flag that might prompt further investigation.
This ZK-proofs-based protocol has another advantage, too, according to Bitso. It provides “a proof-of-solvency that can be confirmed without revealing all of that information to a third party. All an auditor needs to do is run the zk-SNARK protocol to come to the conclusion that the proof is true.”
According to Groth, the use of ZK-proofs to demonstrate financial solvency “gained more traction after the FTX implosion.” Indeed, if such a protocol had been available last year, the Bahamas-based exchange’s meltdown might have been avoided, some say — or at least its wrongdoing would have come to light sooner.
Interestingly, FTX Japan, now rebranded as Liquid Japan, has been using Proven’s proof-of-solvency technology since its recent re-launch in early September. “With the adoption of Proof of Solvency, we can now prove it [solvency] in a cryptographic manner that is verifiable by 3rd parties,” notes the company, adding:
We are starting to work on increasing the frequency of publishing the Proof of Solvency to 1x day by the end of 2023.”
A snapshot of Liquid’s proof-of-solvency widget. (Liquid)
“Immutable” tracking of goods
“ZK-proofs can become very relevant in the context of digital identities, whether they are issued by the government or private entities,” adds Nyffenegger. They could prove that you are not included on some government sanctions list without revealing who you are, for instance.
ZK-proofs potential use in supply chains is also frequently cited. But the difficulty here, as with e-voting, is that this requires connecting to a trustworthy “real-world information” source, which can authenticate the date an order was shipped from the factory, for instance.
“ZK-proof-based supply chain tracking systems haven’t been battle-tested long enough in live environments,” notes Malkhi, adding that that could soon change:
The potential of ZK-proofs here is vast — helping to improve transparency and reduce the potential impact of fraud by enabling the immutable, real-time tracking of goods.”
It should be added that while blockchains provide some of ZK-proof’s first exciting use cases, the technology does not require blockchain technology to work — but they are surely helpful.
“They are just a very suitable tool for blockchains because they provide proofs of correct computation — which aligns well with the need for verifiability on blockchains — while hiding as much information as possible,” Johannes Sedlmeir, a researcher at the University of Luxembourg’s Interdisciplinary Centre for Security, Reliability and Trust, tells Magazine.
With a blockchain platform, a verifier can check if a certain “hash” appears somewhere on the blockchain “and hence binds me as a prover,” he adds.
Blockchains aren’t required for Proven’s proof-of-solvency protocol to work, Lebron tells Magazine, though it’s always useful to have validators on-chain. It appears to be more of a “like to have” than a “need to have” circumstance.
Obstacles remain
What obstacles still need to be overcome before ZK-proofs become commonplace? Malkhi has already cited the challenges with “bridging to the real world,” and this would well prove the biggest hurdle to surmount before ZK technology becomes mainstream, in her view.
However, other barriers remain that might require laws and regulations to overcome. Will ZK claims be accepted in court, for instance?
Scaling also remains a challenge in many use cases given that there is, at present, no “standardized way to ‘program,’” says Malkhi, making it difficult for developers to integrate proofs into their apps.
To this last point, Proven’s protocol with Bitso requires some five million unique “receipts” to be issued monthly (though soon daily) to Bitso users, but Proven says this isn’t an issue. “We figured out how to scale,” co-founder Lebron says.
Complexity is another potential sticking point. “For small- to medium-size assertions, we already have a good ZK system,” cryptographer Groth tells Magazine. “For large assertions, we still need to improve efficiency.” ZK-proofs like SNARKs can be cheap to verify, “but the prover pays a large performance overhead compared to native computation,” he adds.
Becoming “magnitudes cheaper”
The user experience needs to improve, too. “Using a technology secured by ZK-proofs for an everyday activity like buying groceries should be so seamless that the user doesn’t even know,” says Baylina.
“The other thing we need is time,” Baylina says. Protocols like Polygon’s zk-Ethereum Virtual Machine are still new but are becoming more usable all the time. “As Polygon zkEVM matures, over the next year, we anticipate it will become orders of magnitudes cheaper.”
Given these potential roadblocks, how long might it take before the technology becomes commonplace?
“I believe five years is too short of a time frame owing to the current TRLs [technology readiness levels] of ZK-proofs,” says Sedlmeir, referencing the finance sector specifically. While ZK-proofs have matured rapidly in recent years, they “are still complex to implement and prover performance is still a significant bottleneck.”
There might be a transition period as ZK-proof works in tandem with traditional protocols, as in financial auditing. Proven’s Dewey envisioned working “hand in glove” with traditional Big Four audit firms for a time.
Vast potential
In sum, ZK-proofs still face challenges. They can’t work in isolation. They still need to be attached to a truth source or “oracle.” Doubts about computational complexity, usability and scalability remain as well.
But if these hurdles are surmounted, ZK-proofs could offer a 21st-century solution to not only the “fake news” challenge but also the privacy quandary as with CBDCs, providing just enough anonymity for users to comfortably use state-issued digital money but enough accountability so governments can be assured fraudsters or money launderers aren’t infiltrating their networks.
As the technology and the underlying infrastructure improve, summarizes Malkhi, “ZK-proofs have vast potential to enable an internet where the majority of contracts are underpinned by cryptographic guarantees.”
Tyler Durden
Thu, 10/12/2023 – 18:20 - Kirby Bluntly Says Ukraine Aid "Near End Of The Rope" & Won't Be "Indefinite"
Kirby Bluntly Says Ukraine Aid “Near End Of The Rope” & Won’t Be “Indefinite”
In a surprise and stunning admission, given only a week ago these words might have been unthinkable coming straight from the White House, Biden’s national security council spokesman John Kirby bluntly admitted that funding for Ukraine is “coming near the end of the rope” and is “not going to be indefinite.“
He had said the words in a Wednesday afternoon press briefing wherein he unveiled a new $200 million arms package for Ukraine, which is drawn from previously Congressionally approved funds.
WATCH: White House spokesperson John Kirby announces that funding for Ukraine is “coming near to the end of the rope” and is “not going to be indefinite.”
— Insider Paper (@TheInsiderPaper) October 12, 2023
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Kirby detailed that this latest package includes HIMARS ammunition, artillery shells, anti-tank weapons, and other equipment. Here’s what he said:
“In the near term, we’ve got appropriations and authorities…for Ukraine and for Israel, but you don’t wanna be trying to bake in long-term support when you’re at the end of the rope.”
But interestingly this new $200 million was apparently surplus from the infamous “accounting error”:
According to the Pentagon, the $200 million package for Ukraine used funds made available by a Pentagon “accounting error” that overvalued previous arms shipped into the conflict. As the White House has been struggling to get Congress to authorize more Ukraine spending, the Pentagon has said it has about $5 billion in Presidential Drawdown Authority, which allows the US to ship weapons straight from its own military stockpiles.
According to more details of the package, the $200 million will purchase:
- AIM-9M missiles for air defense
- Counter-Unmanned Aerial Systems (c-UAS) equipment
- Additional ammunition for High Mobility Artillery Rocket Systems (HIMARS)
- 155mm and 105mm artillery rounds
- Precision aerial munitions
- Electronic warfare equipment
- Tube-Launched, Optically-Tracked, Wire-Guided (TOW) missiles
- AT-4 anti-armor systems
- Small arms and more than 16 million rounds of small arms ammunition
- Demolitions munitions for obstacle clearing
- Spare parts, training munitions, maintenance, and other field equipment
In more “normal” times we might expect Kirby’s bluntly asserting that Ukraine funding is “not going to be indefinite” to result in a massive D.C. beltway and mainstream media uproar, but those same MSM politicians pundits are now consumed with Israel-Gaza developments.
John Kirby says Ukraine aid is “coming to the end of the rope.” An odd idiom for the occasion, similar to being “at the end of one’s rope,” which is generally interpreted to mean running out of patience and/or the inability to deal with a problem. Was Kirby being accidentally… pic.twitter.com/fiw16RnFm4
— Chebureki Man (@CheburekiMan) October 12, 2023
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The spotlight has certainly moved away from Ukraine. Instead, the administration is preparing to bolster urgent defense aid to Israel as it continues anti-Hamas operations in Gaza. The Pentagon has said it is committed to doing “both” – that is providing defense aid and weapons to Israel and Kiev. Military assets are now being moved to the eastern Mediterranean region.
Tyler Durden
Thu, 10/12/2023 – 18:00 - NBC News Instantly Exposed As Liars After Claiming They "Gained Access" To X Community Notes System
NBC News Instantly Exposed As Liars After Claiming They “Gained Access” To X Community Notes System
Authored by Steve Watson via Summit News,
When NBC News published a hit piece claiming that Twitter/X’s Community Notes fact checking system rarely corrects posts and asserting that they “gained access” to the system, both claims were instantly revealed to be untrue… by Community Notes itself.
“Elon Musk has touted Community Notes as a way to fight false and misleading information on X,” NBC News tweeted.
The outlet then declared”@NBCNews gained access to the system, and found that on posts containing known misinformation, few posts were ever corrected. Many fact-checks were delayed.”
The claims were quickly revealed to be complete BS, hilariously by Community Notes:
OMG I gained access too!!! pic.twitter.com/0PtZnUNwcL
— PhotographicFloridian (@JackLinFLL) October 11, 2023
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NBC just got hit with a community note for spreading misinformation about community notes. pic.twitter.com/omYJCfTb08
— Seth Dillon (@SethDillon) October 11, 2023
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One note reads, “NBC did not ‘gain access’ to any special Twitter system they merely had one of the many thousands of community notes contributors show them that some misleading posts had yet to have any notes added.”
It adds that “Any 6 month old account with a verified phone number can join the program.”
Another points out that it is completely erroneous to suggest some back room employee is approving notes, as implied by NBC.
NBC News set out to make people think Community Notes doesn’t work and ended up proving the exact opposite:
NBC post about Community Notes gets Community Noted pic.twitter.com/6bSXZQH8hg
— End Wokeness (@EndWokeness) October 11, 2023
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Exactly
— Elon Musk (@elonmusk) October 11, 2023
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Community notes strikes again.
NBC is desperately trying to maintain their fake narrative. pic.twitter.com/wCIo0VgDJz
— iamyesyouareno (@iamyesyouareno) October 6, 2023
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Community notes have more journalistic credibility than news organizations now… especially NBC.
— Tim Young (@TimRunsHisMouth) October 11, 2023
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As we highlighted yesterday, The EU is threatening to block X in its member states, claiming that Musk is allowing ‘disinformation’ to be spread, but without citing any specific examples:
I still don’t know what they’re talking about!
Maybe it’s in the mail or something.
— Elon Musk (@elonmusk) October 11, 2023
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Tyler Durden
Thu, 10/12/2023 – 17:40
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