Sep 14

Today’s News 14th September 2021

  • Watch: Latvian Army Conducts Shooting Drills In Busy Streets
    Watch: Latvian Army Conducts Shooting Drills In Busy Streets

    Footage of a war exercise in the busy streets of Latvia’s capital, Riga, shows heavily armed soldiers firing assault rifles among frightened residents.  

    According to RT News, videos of a field training exercise in Riga were first published online on Saturday morning, have since gone viral. Dozens of heavily armed soldiers conducted what appears to be urban warfare training, firing weapons with blank rounds. 

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    In one scene, a soldier fired his assault rifle as a young woman walked by, causing her baby to cry. 

    The incident prompted a backlash among residents who complained the capital was transformed into a warzone without notice. This forced the military to issue an apology:

    “During such drills, we only use blank cartridges, which make noise but do not pose any danger to the health and life of others. In this case, blank cartridges were also used, and this situation was a bitter misunderstanding, for which we apologize. The Defense Ministry calls on the public to show understanding for the exercises,” the ministry said in a statement cited by the TVnet website.

    The exercise in Riga was part of the Namejs 2021 simulated warfare drills that are being held across the region through October. Latvia is a NATO member that is located between Lithuania and Estonia and also borders Russia. 

    Last week, Soviet satellite ally Belarus kicked off war games, which were some of the largest in decades. 

    Tyler Durden
    Tue, 09/14/2021 – 02:45

  • UK Government Says Vaccine Passports Integral To COVID Winter Plan Day After They Were Supposedly Scrapped
    UK Government Says Vaccine Passports Integral To COVID Winter Plan Day After They Were Supposedly Scrapped

    Authored by Paul Joseph Watson via Summit News,

    The UK government has insisted that vaccine passports will remain an integral tool in fighting the spread of COVID just a day after health secretary Sajid Javid asserted that they had been completely scrapped.

    Well, that didn’t take long.

    During his media rounds yesterday morning, Javid said that vaccine passports represented a “huge intrusion into people’s lives,” adding, “I am pleased to say that we will not be going ahead.”

    However, within 24 hours, the government has indicated that the system will in fact form a “first-line defence” against a winter wave of coronavirus.

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    “No 10 said checks on the vaccine status of people going to nightclubs and other crowded events remained a crucial part of the government’s winter Covid plan due to be unveiled by the prime minister tomorrow,” reports the Times.

    It appears as though the only change is that the passports won’t be introduced at the end of this month, appearing instead during early winter when COVID cases will inevitably and conveniently begin to rise again.

    Mark Harper, chairman of the Covid Recovery Group, said of vaccine passports: “They shouldn’t be kept in reserve — they are pointless, damaging and discriminatory.”

    Trusting government pronouncements on vaccine passports is a fool’s game.

    At the end of last year, the British public were assured that they would never come into force, even as the government was paying millions of pounds to private contractors to set up the system.

    As we previously highlighted, vaccine passports will put nightclubs out of business because they operate at a net profit margin of 15 per cent, while one third of under 40’s in the UK haven’t had a single dose of the vaccine.

    Boris Johnson will also signal that he won’t hesitate to re-introduce mask mandates in winter if cases numbers significantly increase, which they are sure to do given that the UK counts ‘COVID deaths’ as any that occurred within a 28 day COVID diagnosis no matter what the cause of the death.

    As we have repeatedly highlighted, vaccine passports represent a digital ID, which represents the implementation of an onerous social credit score system in the west.

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    Tyler Durden
    Tue, 09/14/2021 – 02:00

  • US Pledges "Ironclad" Commitment To Asian Allies After N.Korean 'Strategic' Long-Range Missile Test
    US Pledges “Ironclad” Commitment To Asian Allies After N.Korean ‘Strategic’ Long-Range Missile Test

    The Pentagon has expressed “ironclad” support to regional US allies Japan and South Korea after weekend long-range cruise missile launches by North Korea – the first in six months.

    State media described the launches as testing “newly-developed long-range cruise missiles” which flew 1,500 kilometers over North Korean territory and were successful in hitting their targets, according to Monday statements. The missiles were further described as capable of evading anti-air defenses, though it was left unspecified how many were actually launched. 

    Combination of photos issued by the North Korean government on Monday.

    US official VOA News noted that “Pictures posted in North Korean state media showed one of the cruise missiles being fired from a five-canister, road-mobile launcher that appeared to be parked on a highway.”

    It was the first significant missile test since last March, prompting US Indo-Pacific Command to put out a statement saying the Pentagon is “consulting closely with our allies and partners.”

    “This activity highlights DPRK’s continuing focus on developing its military program and the threats that it poses to its neighbors and the international community,” the US military statement said. “The US commitment to the defense of the Republic of Korea and Japan remains ironclad.”

    It’s unclear if the weekend’s test included nuclear-capable missiles, given North Korean state media had dubbed the missiles as a “strategic” launch, leaving some ambiguity over whether they may have been nuclear capable. 

    One analyst of nuclear nonproliferation at the Middlebury Institute of International Studies, Jeffrey Lewis, at Monterey was quoted as saying in VOA, “This is another system that is designed to fly under missile defense radars or around them.”

    Nuclear and ballistic weapons talks between North Korea and the US have been stalled for two years, since the latter part of the Trump administration; however, it’s been years since the north openly tested a nuclear weapons, with the last known one being at the Punggye-ri test site in 2017.

    Tyler Durden
    Tue, 09/14/2021 – 01:00

  • China Reports First 'School-Centered' COVID Outbreak
    China Reports First ‘School-Centered’ COVID Outbreak

    Weeks have passed since China finally managed to suppress the broad-based delta-driven COVID outbreak centered around Nanjiang which prompted lockdowns, restrictions on movement and mass testing after the virus spread to nearly two dozen provinces.

    But unsurprisingly (since COVID is now endemic to the global human population), a new outbreak has already flared up in Putian, a city of roughly 3MM people in the East Chinese province of Fujian. There’s one interesting detail that sets this outbreak apart from earlier ones: the outbreak has centered around a school, with dozens of school-age children number among the 90 cases that have been confirmed in recent days.

    Since September 10, the infections linked to Putian’s epidemic outbreak have soared to 96 in just three days: 79 in Putian, 10 in Xiamen and seven in Quanzhou. The outbreak, which has been deemed “locally transmitted” despite the alleged link to Singapore. Around 20 of these cases have involved children younger than 12.

    Because of this, Chinese health experts quoted in the Global Times, a Chinese state-run newspaper, warned that this latest outbreak is unlikely to be tamed by the upcoming Autumn Festival, but should be stamped out before the National Day holidays (which take place in October).

    Chinese authorities claimed to have identified the recent traveler as the source of the outbreaks, although the authorities claimed that this patient didn’t test positive until after the quarantine period. The outbreak is said to have two “chains” of transmission: one related to Putou Primary School and one to the Xiesheng shoe factory. The total infections from the school increased to at least 15, along with 10 other infections from the factory. Xianyou county where the school and shoe factory are located started county-wide testing on Monday, testing more than 900,000 people.

    What’s more, the city has since asked residents to stay in the city and all schools and kindergartens, excluding grade three senior high students and boarding schools, were asked to go to online classes starting Monday.

    Although fewer vehicles were seen in the city’s streets on Monday, the city isn’t on lockdown, according to the GT.

    The local health authority has confirmed that the infections were caused by the delta variant. The NHC has warned that there’s still a risk this outbreak could spread to other provinces, and has advised the entire country to be on alert. Right now, the worst-case projections shared with the public suggest the outbreak could continue until early October. The big question now is whether the outbreak will spread to other surrounding provinces.

    Tyler Durden
    Tue, 09/14/2021 – 00:20

  • Science Denied: The Biden Vaccine Mandate
    Science Denied: The Biden Vaccine Mandate

    Authored by Jeffrey Tucker via Brownstone.org,

    President Biden has decided to go hard on the virus. No more Mr. Nice Guy.

    Sadly for him, those tiny little pathogens don’t pay taxes, don’t vote, don’t have Social Security numbers, can’t be drafted, and don’t answer phone calls from poll takers, which is to say that he and his agencies cannot really control them. That must be frustrating, poor man. 

    Instead his plan is to control what he can control: people, and, most immediately, federal workers and the employees of large regulated companies. For him, the key to crushing the virus is the vaccine. Not enough people are obeying his demand for near-universal vaccination. 

    In a maniacal move of wild desperation – or as an excuse to try out the most extreme powers of his office – he is using every weapon that he believes he has to assure compliance with his dream of injecting as many arms as possible. Only then will we crush the virus, all thanks to his leadership, all the complaints about “freedom” be damned – and never mind that the realization of his dream did not work in Israel or the UK. 

    What are the immediate problems here? At least five:

    1. The Biden mandate pretends that the only immunity is injected, not natural. And so it has been from the beginning of this pandemic, even though all science for at least a year – actually you can say centuries – contradicts that. Indeed, we’ve known about natural immunity since 400 B.C when Thucydides first wrote of the great Athens plague that revealed that “they knew the course of the disease and were themselves free from apprehension.” Biden’s mandate could affect 80 million people but far more than that have likely been exposed and gained robust immunity regardless of vaccination status. 

    2. This natural immunity is long-lasting and broad, and we’ve known that since last year when the first studies revealed it. You can say that the addition of a vaccine provides even more but it’s new and untested relative to most drugs approved by regulators, and many people are concerned about possible side effects of this vaccine that was approved much faster than any drug in my lifetime – and there is not one living human being in a position to say with certainty that these skeptics are wrong. 

    3. The mandate presumes that everyone is equally susceptible to severe outcomes from getting exposed to the virus, which we’ve known is not true since at least February 2020. In this entire 18-month fiasco, we’ve not seen any serious high-level communication about the huge range of demographic gradients in infection based on both age and overall health. This ignorance is a consequence of poor public-health messaging, and is grossly irresponsible. The aggregated mandate from the Biden administration ignores this completely, as did the models that suggested lockdowns in the event of a virus from the Spring of 2020. 

    4. Biden seems still of the belief that vaccines stop infection (he claimed this many times) and spread but we know with certainty that this is not the case, and even the CDC admits it. The best guess at this point is that it can help in preventing hospitalization and death but this experiment is still in its early stages, and the relationship between cause and effect in human affairs is not as easy as throwing around two data sets and saying one caused the other. Most cases in the developed world now are occurring among the vaccinated – and we all know this because we have vaccinated friends who got Covid anyway. Some have died. We are not idiots, contrary to what the Biden administration believes. Nor do any of us have all the knowledge and answers. And it is precisely because science is uncertain that the decisions surrounding it need to be decentralized, depoliticized, and open to correction rather than being imposed by top-down mandates. 

    5. Biden’s order flies in the face of basic human freedoms and rights. There is no other way to put it. And it is this fact that is the most prescient for the multitudes who are right now seething in anger that one man who happens to hold power can make health decisions for the whole population regardless of their perfectly rational judgements. When the needle filled with liquid is forced into the arms of people who either have natural immunities or do not fear exposure to the pathogen, it gets personal, and people get really mad, especially after they are still forced into masks and denied other essential rights. 

    Truth is that my phone has been blowing up all evening since Biden’s speech. People are demoralized, panicked, furious, and even at the point of losing it completely over this despotic moment in which we are living. Most of us believed that we live in a scientific age in which information would be broadly disseminated to the world and this technology would somehow prevent us as a society from falling prey to charlatans, mob mysticism, and brutal methods of population control, not to mention to the deployment of superstitious talismans and quackery. That turns out not to be true, and this is perhaps the greatest shock of all. 

    Scientists worked for many hundreds of years to understand pathogens. They worked to understand their effect on the body, the range of susceptibility to both infection and severe outcomes, the demographics of vulnerability, the means by which we come to be protected from them, and the opportunities and limits available to people to protect themselves and others. After all this, humanity put together institutions that protected human freedom, individual rights, and public health, while preserving peace and prosperity in the best of times. 

    In the last 18 months, all that hard work and knowledge seems to have been shredded, replaced by superstition masquerading as some kind of new science of social and pathogenic control. In this year and a half, we’ve observed no clear successes and unrelenting flops. One year ago, humanity had the opportunity to embrace the wisdom of the Great Barrington Declaration to protect the vulnerable while letting society otherwise function. Governments instead chose the path of ignorance and violence. The list is long but it includes: travel restrictions, capacity limits, business closures, school shutdowns, mask mandates, forced human separation (“social distancing”), and now mandates of vaccination that, quite apparently, vast numbers do not want. 

    It’s all designed so that governments can prove to the world that they are powerful enough, smart enough, educated enough to outsmart and manage any living organism, even an invisible one that has been part of the human experience since humans had experiences. In this, they have completely failed – in more ways than it is possible to count. 

    We keep thinking that surely, surely, we will come to the end of this madness. I personally believed it would end the second week of March 2020. Instead, it gets worse and worse, the illusion of control having seized the barely functioning brains of the ruling classes of the world’s richest nations. If this doesn’t prove the astonishing stupidity of the world’s most powerful and educated, nothing else in history does. 

    The great myth that has clouded our vision and our expectations has been that we as a people had progressed beyond the kind of statist shibboleths and fanatic brutality that define our age. The truth is that we are not. 

    This very day, a Karen attacked me for being maskless. I looked at her and thought only of the poor people in Colonial America who dared being caught wearing buckled shoes and therefore running afoul of the sumptuary laws, or of the religious minorities in Medieval Europe who were scapegoated for every plague (look up the origins of the the phrase “poisoning the well”), or the demonization of rebels in the ancient Roman empire or the disapprobation of heretics in the hundreds of years that followed the fall of Rome.

    It is a mark of a primitive society to attribute to political compliance or noncompliance what rational science shows is a feature of the natural world. Why? Ignorance, maybe. Power ambitions, more likely. Scapegoating is apparently an eternal feature of the human experience. Governments seem particularly good at it, even when it is less believable than ever. 

    Tyler Durden
    Tue, 09/14/2021 – 00:00

  • Maskless AOC Attends Elite $50k Per Ticket Met Gala In 'Tax The Rich' Dress
    Maskless AOC Attends Elite $50k Per Ticket Met Gala In ‘Tax The Rich’ Dress

    Rep. Alexandria Ocasio-Cortez (D-NY) spent Monday night at the lavish Met Gala in New York wearing a “tax the rich” dress.

    The maskless AOC (who vowed to continue masking up despite being vaccinated – around poor people, we guess?) drew sharp criticism over social media for what many perceived as rank hypocrisy under the guise of a ‘bold’ political statement.

    Tickets for the event range from $30,000 – $50,000, with tables reportedly going between $300,000 – $500,000 (h/t Sara Eisen)

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    When interviewed, she spat out word salad.

    “And we said, we can’t just play along, but we need to break the fourth wall and challenge some of the institutions, and while the Met is known for its spectacle, we should have a conversation about it.”

    Virtue status: signaled

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    Tyler Durden
    Mon, 09/13/2021 – 23:40

  • Facebook's Invisible Elite Rules Highlight Zuckerberg's Blatant Lies
    Facebook’s Invisible Elite Rules Highlight Zuckerberg’s Blatant Lies

    Authored by Mike Shedlock via MishTalk.com,

    Facebook’s XCheck gives millions of celebrities, politicians and other high-profile users special treatment (but not Trump), a privilege many abuse…

    Equal Footing Lie

    I have little use for Facebook. I don’t trust it and never did. Today the WSJ has an article on Facebook that is hardly surprising. 

    Please note Facebook Says Its Rules Apply to All. Company Documents Reveal a Secret Elite That’s Exempt.

    Mark Zuckerberg has publicly said Facebook Inc. allows its more than three billion users to speak on equal footing with the elites of politics, culture and journalism, and that its standards of behavior apply to everyone, no matter their status or fame.

    In private, the company has built a system that has exempted high-profile users from some or all of its rules, according to company documents reviewed by The Wall Street Journal.

    The program, known as “cross check” or “XCheck,” was initially intended as a quality-control measure for actions taken against high-profile accounts, including celebrities, politicians and journalists. Today, it shields millions of VIP users from the company’s normal enforcement process, the documents show. Some users are “whitelisted”—rendered immune from enforcement actions—while others are allowed to post rule-violating material pending Facebook employee reviews that often never come.

    In 2019, it allowed international soccer star Neymar to show nude photos of a woman, who had accused him of rape, to tens of millions of his fans before the content was removed by Facebook. Whitelisted accounts shared inflammatory claims that Facebook’s fact checkers deemed false, including that vaccines are deadly, that Hillary Clinton had covered up “pedophile rings,” and that then-President Donald Trump had called all refugees seeking asylum “animals,” according to the documents.

    Lies After Lies After Lies

    The documents that describe XCheck are part of an extensive array of internal Facebook communications reviewed by The Wall Street Journal. They show that Facebook knows, in acute detail, that its platforms are riddled with flaws that cause harm, often in ways only the company fully understands.

    Moreover, the documents show, Facebook often lacks the will or the ability to address them.

    At least some of the documents have been turned over to the Securities and Exchange Commission and to Congress by a person seeking federal whistleblower protection, according to people familiar with the matter.

    Time and again, the documents show, in the U.S. and overseas, Facebook’s own researchers have identified the platform’s ill effects, in areas including teen mental health, political discourse and human trafficking. Time and again, despite Congressional hearings, its own pledges and numerous media exposés, the company didn’t fix them.

    Pervasive Problem

    “This problem is pervasive, touching almost every area of the company. Whitelists “pose numerous legal, compliance, and legitimacy risks for the company and harm to our community.”

    The Solution?

    The WSJ comments “One potential solution remains off the table: holding high-profile users to the same standards as everyone else.”

    Lies and Perjury

    Facebook’s treatment of Trump raises howls, but It is within bounds of the law for Facebook to have rules and to claim Trump violated them.

    It is not within the bounds of the law to lie to Congress.

    Please consider False Statements to the Government Can Land You in Jail written in 2010 and the examples are dated.

    With the recent indictment of baseball great Roger Clemens, federal perjury and false statement charges are back in the news. While these charges tend to create press attention when they target celebrities—think Martha Stewart and rap star Lil’ Kim—they are powerful, and common, tools that federal prosecutors also use against ordinary individuals every day. And while these tactics may be common, the penalties are serious: a maximum penalty of five years imprisonment and a fine of $250,000, for either charge.

    Perjury vs. False Statement

    You probably already know what perjury is—lying under oath. For example, if you lie to a grand jury, the Securities and Exchange Commission or any other federal or state agency about an important fact while giving testimony under oath, that’s perjury. If you lie to an FBI agent or other government agent who has knocked on your door, or when you sign a document making a certification you know is false, you haven’t committed perjury because you weren’t under oath. But you may have violated the federal law prohibiting making false statements, and the penalties are just as severe. 

    Consequences of Lies and Perjury

    There should be consequences to lies and perjury. 

    If Zuckerberg lied to Congress, and I believe he repeatedly did, the way to stop the lies is to hold CEOs accountable. 

    Fine Zuckerberg $250,000 (that won’t matter at all to him), and send him to prison for 5 years (that will).

    Then we can address rules and how to enforce them.

    *  *  *

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    Tyler Durden
    Mon, 09/13/2021 – 23:20

  • Endgame Begins: Evergrande Hires Bankruptcy Advisors As Furious Investors Protest Imminent Default
    Endgame Begins: Evergrande Hires Bankruptcy Advisors As Furious Investors Protest Imminent Default

    It took Evergrande less than a day to go from denying “rumors” of bankruptcy (as per a statement posted on its website earlier today), to confirming that a bankruptcy is imminent.

    In a filing on the Hong Kong stock exchange on Tuesday, Evergrande which was busy trying to convince angry Chinese mobs that they will get their money and/or apartments and that it has no plans of default, the company all but conceded that a bankruptcy is imminent when it said it has hired notable bankruptcy advisors Houlihan Lokey and Admiralty Harbour Capital as joint FAs to “assess the firm’s capital structure”, a well-known euphemism of “prepare to file for bankruptcy.” And just so there was no doubt as to what is coming next, the company said if it’s unable to repay debts on time or get creditors to agree to extensions or alternative arrangements, it may lead to cross-default.

    It quickly went downhill from there, with the company saying that it expects “significant continuing decline” in contract sales in September, resulting in “continuous deterioration” of cash collection, according to the statement. That will place “tremendous pressure” on the group’s cashflow and liquidity.

    Finally, guaranteeing that a default is just a matter of days if not less, the company admitted that it has failed to make “material progress” on the sale of stakes in China Evergrande New Energy Vehicle Group Ltd. and Evergrande Property Services Group Ltd., while the sale of its office building in Hong Kong hasn’t been completed within the expected timetable.

    In short a total disaster, and all this is happening a tens of thousands of Chinese are starting to feel insurrectiony – the real thing, not that January 6 tourist trap – and if they suffer losses, and in a company with $300BN in debt they will suffer major losses, their protests which have been largely peaceful to date will turn quite violent.

    As we reported this morning, police descended on Evergrande’s Shenzhen headquarters late Monday after dozens of people gathered to demand repayments on overdue wealth management products. Protesters numbered in the hundreds on Sunday, Caixin reported. In addition to equity investors who are about to lose everything, the company is also facing angry homebuyers, creditors and even its own employees… who are also about to lose everything.

    “It looks like they are working on debt restructuring after no concrete results on asset disposals, and the first task is to stabilize the holders of wealth management products which could be a social issue,” said Daniel Fan, a credit analyst at Bloomberg Intelligence. “It seems the developer is working on rescheduling pretty much all onshore debt, and the next step is to do the same for offshore investors.

    Translation: a bond default is imminent, and the only question is what will creditors get in return.

    How imminent? According to Bloomberg, two units failed to discharge their guarantee obligations on time for wealth management products worth 934 million yuan ($145 million), the company said, adding it’s in talks with issuers and investors on a repayment arrangement. If the company fails to reach a resolution, it’s all over and the bankruptcy process begins.

    And while distressed investors are already circling the company’s dollar bonds which are trading around 25-30 cents on the dollar, with the market pricing in a potential restructuring, this is an especially risky proposition according to Citigroup.  According to the bank, the insolvent developer’s bonds are trading at levels that attract the type of investors who place bets on the hardest-hit companies, but dollar bond holders may not be prioritized in a debt restructuring and a resolution could take years, Citi warned. 

    “We caution that offshore holdco debt is deeply subordinated to onshore secured bank debt and opco debt, and recovery values in any restructuring could be low,” wrote Citi strategist W.R. Eric Ollom.

    “Disposition of Evergrande’s substantial land bank to meet creditor claims could be lengthy, resulting in stretched out legal proceedings.”

    Citi also speculated that a solution for Evergrande may include forced core asset sales as well as haircuts for some classes of debt – notably dollar-denominated ones – the Citi strategists wrote, noting that Evergrande’s offshore bonds may be treated as subordinated to bank and opco borrowings in an onshore restructuring. Meanwhile, Nomura credit analyst Iris Chen said a debt restructuring is “almost unavoidable,” predicting a base-case scenario where bondholders would recover 25% of their money.

    And while Evergrande’s bonds can’t really fall much more from here, and in fact are prone to short squeezes, the same can not be said for its peers, and as Evergrande stock plunged again, dropping as much as 8.6% to a the lowest since 2014, it also dragged fown lenders and companies that previously disclosed large revenue exposure to the developer after the news that bankruptcy advisors had been hired. Among them, China Minsheng Bank fell 1.2% in Hong Kong; Industrial and Commercial Bank of China fells at least 0.6%, Suning.com was down -0.4%,  Beijing Jiayu Door Window and Curtain Wall Joint-Stock -1.7%, Shenzhen Grandland -1.4%, Skshu Paint -3.5%.

    Expect much more pain once the company finally pulls the plug, and China’s Lehman moment arrives.

     

    Tyler Durden
    Mon, 09/13/2021 – 23:00

  • Prepare For A Bad Decade At The Border
    Prepare For A Bad Decade At The Border

    Submitted by Princeton Policy Advisors

    Apprehensions at the US southwest border track US job openings. And that means trouble is brewing.

    Jobs and Apprehensions

    As readers know, Customs and Border Protection reports southwest border apprehensions monthly. Readers may be less familiar with JOLTS, the Job Openings and Labor Turnover Survey, a monthly assessment of the US job market published since late 1999 by the Bureau of Labor Statistics of the Department of Labor.

    Border apprehensions closely track JOLTS job openings. A quick tour through the historical data is enlightening.

    The previous peak for border apprehensions occurred during the hot economy of the dot-com boom in 2000, and apprehensions thereafter followed job openings down, bottoming in 2002 with the subsequent recession. The recovery from the dot-com bust brought more jobs and more migrants, with apprehensions interestingly peaking in 2005 with the US real estate market and declining precipitously thereafter. Indeed, border apprehensions were an earlier indicator than US job openings of the severe recession which took hold in late 2007.

    With the onset of the Great Recession in 2008, apprehensions continued to decline and collapsed to levels not seen since the late 1970s. They remained depressed until 2018.

    The Obama administration faced a small surge at the border in 2014, but managed to regain control over illegal entries by the end of that year. The border saw yet another surge in the months prior to Trump’s inauguration, with migrants accelerating their US crossings for fear of more difficult border conditions once Trump took office. Trump’s harsh rhetoric did in fact intimidate migrants into delaying their journeys north, with the result that 2017 border apprehensions were the lowest since the early 1970s. Action did not match words, however, and migrants soon came to appreciate the Trump administration as something of a paper tiger. Border traffic rebounded, culminating in another crisis starting in July 2018 and peaking in May 2019. During this period, the Trump administration undertook a series of measures to induce Mexican and Northern Triangle governments to curtail migrant movement and implemented the much-loathed Migrant Protection Protocols. These reduced apprehensions to more typical levels by the end of 2019, even though the US job market remained strong.

    The covid pandemic saw both job openings and border traffic crater. By this past spring, however, US job openings were headed into record territory and border apprehensions were keeping pace, likely to reach all-time highs this calendar year.

    The history of the last twenty years strongly suggests that migrants respond to US labor market conditions, both good and bad. Migrants are not driven principally by domestic hardship, as both CIS and I have shown. Rather, when US wages are strong and jobs are plenty, Central Americans head north. The strange and yet inescapable conclusion is that US and Latin American labor markets are to an extent integrated. Guatemala and Honduras may be exotic places in the American imagination, but Central Americans are no strangers to working in the US. The US is not exotic, it’s where the jobs are. Therefore, illegal Central Americans and Mexicans may be considered an integral part of the US labor force, a ‘subprime’ part perhaps, but nevertheless a part of it. This is quite remarkable given that crossing the border is ostensibly illegal. The migrant response to US job openings should not be so dynamic. But it is, and we see a healthy market as though the border were mostly an inconvenience, that is, we see a robust black market in migrant labor finding its way around border enforcement with comparative ease.

    Of course, US administrations have successfully limited illegal border crossings in recent years. As noted above, the Obama administration suppressed a smaller surge during 2014; the ‘Trump intimidation’ brought near record low crossings in 2017; and the various harsh Trump policies from July 2018 managed to restore order by the end of 2019. While all of these worked for a time and to an extent, traffic inevitably picked up if jobs were waiting.

    The Biden administration has managed to be both unlucky and inept, a combination not limited to border policy. The administration relaxed border enforcement straight into the teeth of the hottest job market in at least twenty years, with the likely result a record in border apprehensions for the year. The high number of border crossings is partly, but not entirely, due to administration policy. Be that as it may, the Biden administration will carry the blame, in this as in other matters.

    The Outlook for Illegal Immigration

    In some ways, the more pressing issue is the outlook for future border crossings. Just a few years ago, our friends at some of the think tanks assured us that the threat of massive surges in illegal immigration were over. By this line of thinking, granting amnesty to undocumented residents represented no risk of a new surge in illegal immigration, as had been the case in 1986 following the passage of IRCA, legislation which extended amnesty to undocumented Mexicans in the US. Clearly, the risk of a massive illegal immigration is not over.

    What should we expect in the future? Is the current surge an anomaly which will pass, or does it represent a return to earlier historical patterns? As it happens, this depends principally on the interpretation of the decade from 2008 to 2018, which in turn depends upon whether the Great Recession was only a recession, or in fact, a depression.

    A short digression on economics

    There is no agreed definition of the difference between a recession and a depression. However, if one cares to dig a bit, they can be distinguished, and if one works with a variety of time series data as I do, the hallmarks of a depression are evident after 2008. For example, on the graph below we can see US vehicle miles traveled (VMT) on US roads and highways, generally a good indicator of the country’s economic health. During the first oil shock of 1974 and the subsequent oil shocks of 1979-1982, vehicle miles traveled initially fell, but achieved new highs immediately after the recession officially ended. In the 1991 Gulf War recession and the 2001 dot-com bust, VMT barely flinched. By contrast, during the Great Recession, vehicle miles traveled fell steeply and did not regain their 2007 peak until 2014, seven years later. (And for that, thank you, US shales.) And further, VMT was not back on trend until mid-2017, ten years after the beginning of the downturn. Clearly, the Great Recession was qualitatively different from a normal recession, different even from the brutal and prolonged oil shocks of the late 1970s.

    These effects are also visible in housing and consumer credit, more relevant indicators for our discussion. Some analysts feel that the business cycle is essentially the housing cycle, and indeed, housing starts largely track recessions and recoveries. However, on only two occasions in modern history have house values fallen and remained depressed: the Great Depression of the 1930s and the Great Recession of 2008. Much like vehicle miles traveled, US house values did not recover their 2007 peak until late 2016, almost a decade later. This matters because homes are the primary collateral of consumers, and homeowners were thus compelled to spend the better part of a decade paying down mortgages and other loans, with consumer credit not recovering its 2008 peak until 2017. In the interim, borrowing remained depressed, employment and GDP growth were tepid, and the public mood remained sour. Establishment politicians struggled for credibility, and voters across the globe regularly turned to outsiders, including television personalities and a few comedians, hoping for a better approach to governance.

    So why does all this matter for illegal immigration? Because the patterns of depression are visible there as well. As with housing, vehicle miles traveled and consumer credit, remittances to Mexico from the US peaked in 2007 and did not regain that level until May 2018. Similarly, the undocumented Mexican population, according to estimates by Pew Research, peaked in 2008 and declined through 2018. Clearly, the undocumented immigrant population was under financial stress, as were US homeowners, and this stress may have contributed to some undocumented residents returning to Mexico, on the one hand, and likely acted as an impediment to new border crossers, on the other. A depression from 2008 to 2018 would explain the decline in the undocumented immigrant population.

    Remittances recovered their previous highs in May of 2018, and the Trump border surge began two months later, in July. This recovery in border traffic was interrupted by covid, but as the pandemic has eased, apprehensions have soared to what promises to be historic levels. One is left with the impression that the recent, elevated levels of apprehensions are not entirely one-off surges, but rather the restoration of patterns which persisted for decades before the Great Recession. It would appear that the Great Recession was the anomaly, and the Trump and now Biden surges constitute a return to business as usual.

    Demographic trends to 2030 — an aging US society coupled with a shortage of low wage workers — will make illegal border crossing attractive. Migrants may well be incentivized to jump the border for the balance of the decade. The future may therefore look like the pre-2007 era; indeed, from the migrant perspective, the 2020s may prove the best decade for illegal immigration since the current border regime was established in 1965.

    The numbers can be estimated. In the twenty years to 2007, border apprehensions averaged 1.2 million per year, and the undocumented population grew by 0.5 million per year. Therefore, if the Great Recession is the anomaly and the post-2018 period represents a return to normal patterns of illegal immigration across the southwest border, expect the undocumented population in the US to rise from its current level around 10 million to approximately 15 million by 2030.

    Everyone Loses

    For both the left and the right, a large increase in undocumented immigrants would be a disaster. For the Heritage Foundation, CIS and FAIR, an increase in the undocumented population of 50% is a catastrophic failure of their policy goals. But life is no better for amnesty advocates like fwd.us, the NILC or the Immigration Hub (the prior home of the President’s new immigration advisor, Tyler Moran). The emerging equilibrium may well mirror that of the 1987-2007 period, when high levels of illegal immigration made any talk of amnesty moot. Thus, a reversion to historical patterns portends disaster for literally every major stakeholder group dealing with illegal immigration: the border will be in chaos, illegal immigration will soar, and yet long-term undocumented residents will be no closer to legal status in 2030 than they are today. Even DACA may become trapped in the wash. That is what prohibitions and resulting enforcement regimes produce: wretched outcomes for everyone involved.

    As I have said many times, ending prohibitions — including the prohibition in migrant labor — is not hard. A legalize-and-tax approach ends the related pathologies in short order. We can fix the border and provide legal status for long-time undocumented residents, but we have to use the standard and proven market-based approach. It is the only one which works.

    Tyler Durden
    Mon, 09/13/2021 – 22:40

  • 'You Can't Print Electricity' – Zimbabwe Begins Daily 12-Hour Power Cuts Amid Shortage
    ‘You Can’t Print Electricity’ – Zimbabwe Begins Daily 12-Hour Power Cuts Amid Shortage

    Zimbabwe finds itself in dire economic straits. Again. 

    The South African nation, which has a knack for money printing, began rationing power Sunday. With all the money printing, one would expect the country could afford additional power generation plants or at least import energy while conducting maintenance work at its largest power stations. 

    But that’s not the case whatsoever. Zimbabwe Electricity Transmission and Distribution Co. (ZETDC) has cut power to customers for 12 hours per day during upgrades at Zimbabwe Power Company Hwange Power Station and Kariba Hydro Power Station. 

    ZETDC told Bloomberg that it “is experiencing a power shortfall due to generation” and “limited imports.” 

    The power company conducted load shedding to “balance the power supply available and the connected load.” This involves widespread cuts to industrial and agricultural areas. Hospitals, water, sewer installations, and oxygen-producing plants are going to be spared during the blackouts. 

    Reports indicate communication disruptions could be seen. Traffic disruptions are expected. Trains might experience delays. And there’s a severe risk that ATMs and petrol stations could go dark. 

    With the economy in shambles, the Zimbabwe government is learning the hard way it simply can’t print electricity. 

    Meanwhile, as the country struggles with its usual hyperinflation demons, its finance minister, Mthuli Ncube, urged citizens to “invest in understanding emerging innovations like bitcoin,” which ironically will be impossible to mine given the power outages” 

    Tyler Durden
    Mon, 09/13/2021 – 22:20

  • US Quietly Removes Patriot Missile Air Defenses From Saudi Base
    US Quietly Removes Patriot Missile Air Defenses From Saudi Base

    Authored by Jason Ditz via AntiWar.com, 

    Satellite images show that several missile batteries previously deployed to Saudi Arabia, including THAAD batteries and Patriot missiles, have been removed from the area. The images show that the removal happened sometime near the end of August.

    Pentagon press secretary John Kirby later confirmed that the air defense assets were “redeployed,” but did not provide details. The missiles were at Prince Sultan Air Base, near Riyadh.

    Patriot missile file, via Breaking Defense

    Saudi Prince Turki al-Faisal was critical of the move, saying the US must not move Patriot missiles out of the kingdom, and saying that the nation needs reassurance of US military commitment.

    Faisal said this was a bad time for the US to withdraw missiles, “when Saudi Arabia is the victim of missile attacks and drone attacks, not just from Yemen, but from Iran.”

    With the Saudi invasion of Yemen ongoing, the Houthis have launched missiles and drones in retaliation, though these are mostly in southern Saudi Arabia, a fair distance from the US deployment. Iran’s only relation is that the Saudis tend to blame Iran for what the Houthis do, on the grounds that they are both Shi’ite.

    The timing of the redeployments may also be significant, coming ahead of new releases of 9/11 documents related to Saudi involvement. The documents, as usual, are trying not to directly implicate the Saudi government in the conclusion, but with Saudis so heavily involved in every stage of the plot, the administration may have decided this was a good time to be less conspicuously providing the Saudis with military support.

    Tyler Durden
    Mon, 09/13/2021 – 22:00

  • "Like It's Loose Change": Taliban Says Former Afghan VP Left Behind $6 Million Cash & Gold Bars At Residence
    “Like It’s Loose Change”: Taliban Says Former Afghan VP Left Behind $6 Million Cash & Gold Bars At Residence

    The Taliban says it found over $6 million in cash and at least 15 gold bars after it raided the home of a longtime Afghan national politician, Amrullah Saleh.

    Saleh had been vice president since February 2020 until the collapse of the Afghan government when the Taliban overran Kabul in August. As soon as President Ashraf Ghani fled the country, reportedly with millions in cash, VP Saleh declared himself acting president of the country, which happened on Aug.17. The home where the cash was reportedly found was in the Panjshir Valley – recently taken by the Taliban. The Taliban released video of militants rummaging through the treasure that had been left behind…

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    Saleh has since the Taliban takeover been a prime opposition figure in the country fighting against the hardline Islamists’ rule – efforts which have been centered in recent weeks on contested Panjshir province, where it’s said the country’s last resistance leaders remain. 

    Saleh’s own brother was reportedly killed days ago at a Taliban checkpoint. The brother, “Rohullah Azizi was traveling with his driver on Thursday when Taliban fighters stopped them at a checkpoint in Khanez village in the province of Panjshir, the relatives said,” according to Germany’s Deutsche Welle. “As we hear at the moment [the] Taliban shot him and his driver at the checkpoint,” relatives of the family were cited as saying.

    Saleh had a long history with the US-backed national government, from 2018 to 2019 serving as interior minister, and from 2004 to 2010 being the head of the National Directorate of Security. It’s during his long career that he’s believed to have amassed his fortune, suggesting corruption.

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    However, some observers have questioned the video as possibly fake. In releasing it, the Taliban is hoping to publicize allegations of just how deep corruption went among former US-backed Afghan politicians.

    It’s being generally acknowledged as the Taliban’s biggest haul in terms of cash recovered from a single politician’s house. There’s long been reports and confirmation out of the Pentagon and US officials who’ve admitted to flying entire crates and bricks of cash into the country over the past couple decades of war.

    Often this was with the aim of “paying off” tribal warlords and even local politicians in order to ensure some degree of stability and peace for the US occupation. Often large quantities of cash would simply disappear. Likely the Taliban will continue to release videos of uncovering piles of cash, jewelry, and gold at former Afghan officials’ residence, in order to underscore the self-serving nature of the prior corrupt US propped-up government.

    Tyler Durden
    Mon, 09/13/2021 – 21:40

  • One Of The Largest US Supermarket Chains Warns Inflation Is About To Impact More Americans
    One Of The Largest US Supermarket Chains Warns Inflation Is About To Impact More Americans

    By Jack Phillips of Epoch Times,

    An executive of Kroger, one of the largest supermarket chains in the United States, warned grocery prices are about to become even higher this year as inflation sets in.

    Inflation is running hotter than previously anticipated, and prices are slated to rise an additional 2 to 3 percent over the second half of 2021, Kroger CFO Gary Millerchip said during a call with reporters.

    Kroger will be “passing along higher cost to the customer where it makes sense to do so,” he said on Sept. 10.

    The comment comes as the price for beef, poultry, and pork have risen at grocery stores in recent months, leading White House officials to blame meat processing companies.

    “Just four large conglomerates control the majority of the market for each of these three products [beef, pork and poultry], and the data show that these companies have been raising prices while generating record profits during the pandemic,” said National Economic Council Director Brian Deese at a press briefing on Sept. 8.

    “Those companies have seen record or near-record profits in the first half of this year,” Deese said, taking aim at JBS, Tyson Foods, Cargill Meat Solutions Corp., and the National Beef Packing Company. “And that has coincided with a period where we’ve seen disproportionate increase in prices in those segments.”

    Secretary of Agriculture Tom Vilsack claimed that some food companies may be price-gouging, although he noted that labor and transportation costs have risen since the start of the COVID-19 pandemic.

    “Our job is to make sure that that farmer gets a fair price and that the producer … when I go to the grocery store, and I’m in the checkout line, I’m paying a fair price,” Vilsack said.

    Neither official signaled that inflation may be the cause despite the producer price index increasing by 0.7 percent in August 2021 over the previous month. Final demand prices have also risen 8.3 percent from a year ago, which is the biggest increase since 2010, according to a Department of Labor report issued on Sept. 10.

    Other than Kroger’s warning, food giant Nestle’s Chief Financial Officer, Francois-Xavier Roger, acknowledged a higher input cost inflation in 2022 than this year.

    “If we talk of 2022, it is likely that input cost inflation will be higher next year than this year,” Roger said at a Barclays consumer staples conference, reported the Reuters news agency. 

    “Our strategy is to offset anything we receive through pricing. The idea is to pass it on to the trade and to consumers whenever we receive it,” he said.

    Earlier this year, CEO of supermarket chain Albertsons, Vivek Sankaran, said that regarding inflation, “It could go a little bit higher, but … we have a strong consumer” base in the United States.

    Tyler Durden
    Mon, 09/13/2021 – 21:20

  • Google Has Been Underpaying A "Shadow Workforce" Of Contract And Temp Workers For Years, Report Reveals
    Google Has Been Underpaying A “Shadow Workforce” Of Contract And Temp Workers For Years, Report Reveals

    Google, who hilariously is included in many “ESG” funds, underpaid “thousands” of international contract workers across several countries, a new report by the New York Times revealed on Friday.

    Even better is the fact that the big tech company reportedly discovered it was violating pay-parity laws in numerous countries and then chose “not to immediately compensate the underpaid temporary staff,” according to follow up reporting by Insider.

    In Europe and Asia, pay-parity laws require companies to pay similar wages to full-time and temp workers who perform similar jobs. The U.S. has no such laws.

    Google employs over 900 temporary workers in countries like the UK, Ireland, India, Germany, the Netherlands, France, and Poland. The company’s temp and contract workers outnumber its full time staff, the report says, creating a “shadow workforce”. 

    Google chose only to correct its rate of pay for new employees after finding the error.

    The company also reportedly banned contractors from talking to full time employees and made temps “wear red badges” that led to a “sense of shame”, one employee told Insider.

    Google manager Alan Barry, who is based in Ireland, wrote in e-mails that the rise in pay would “give rise to a flurry of noise/frustration”. He also wrote: “I’m also not keen to invite the charge that we’ve allowed this situation to persist for so long that the correction required is significant.”

    Spyro Karetsos, Google’s chief compliance officer, told Insider: “While the team hasn’t increased the comparator rate benchmarks for some years, actual pay rates for temporary staff have increased numerous times in that period. Most temporary staff are paid significantly more than the comparator rates.”

    Karetsos continued: “Nevertheless, it’s clear that this process has not been handled consistently with the high standards to which we hold ourselves as a company. We’re doing a thorough review, and we’re committed to identifying and addressing any pay discrepancies that the team has not already addressed. And we’ll be conducting a review of our compliance practices in this area. In short, we’re going to figure out what went wrong here, why it happened, and we’re going to make it right.”

    Tyler Durden
    Mon, 09/13/2021 – 21:00

  • Chinese State Media Slams Soros As "The Most Evil Person In The World" And "The Son Of Satan"
    Chinese State Media Slams Soros As “The Most Evil Person In The World” And “The Son Of Satan”

    It didn’t take China long to respond to George Soros after he went nuclear on Beijing and US investment titans abandoning their “ESG ideals” to capitalize on China’s massive market.

    Over the weekend, China’s state-run tabloid Global Times labeled George Soros a “global economic terrorist” in a tit for tat exchange playing out in dueling op-eds that underscore the rising temperature in US-China relations, the Standard and Asia Times reported.

    The article, published on September 4, accused the billionaire hedge fund manager and liberal donor and Democrat supporter of providing finance to Hong Kong’s jailed newspaper owner Jimmy Lai to support the city’s anti-Beijing protests in 2019.

    Soon thereafter, Soros penned an op-ed for the Wall Street Journal that said New York-based BlackRock’s recent $1 billion mutual fund investment in China was a “tragic mistake” and would lose money for the asset manager’s clients. Soros wrote the BlackRock investment “imperils the national security interests of the US.” That followed an August 30 op-ed Soros published in the Financial Times that said Chinese President Xi Jinping’s crackdown on private enterprise has been “a significant drag on the Chinese economy” and “could lead to a crash.”

    Soros said indices such as MSCI’s ACWI, ESG Leaders Index and BlackRock’s ESG Aware, have “effectively forced hundreds of billions of dollars belonging to US investors into Chinese companies whose corporate governance does not meet the required standard — power and accountability is now exercised by one man (Xi) who is not accountable to any international authority.”

    The billionaire urged the US Congress to pass legislation limiting asset managers’ investments to “companies where actual governance structures are both transparent and aligned with stakeholders.” Previous reports said that Soros’ hedge fund had disposed all of its exposure to Chinese assets earlier this year.

    Having made a name (and $1.1 billion ) for breaking the Bank of England in 1992, during the Asian financial crisis in 1997, Soros also tried to break the Hong Kong dollar’s peg to the US dollar but was ultimately defeated by the Hong Kong government, which intervened heavily in markets to protect the peg. Soros was given the nickname “financial crocodile” by local media at the time.

    In September 2001, Soros was invited to visit China and met then Chinese Premier Zhu Rongji in Beijing. But after the 2008 global financial crisis, Soros told media in October 2009 that China should step up to the plate as the leader of a new global economic order.

    Then, in January 2016, Soros told a dinner audience at the World Economic Forum in Davos that “a hard landing is practically unavoidable” for the Chinese economy. A few days later, the People’s Daily, China’s Communist Party mouthpiece, warned that “Soros’s war on the renminbi and the Hong Kong dollar cannot possibly succeed – about this there can be no doubt.”

    In January 2019, Soros said Chinese President Xi Jinping was “the most dangerous enemy” of free societies for presiding over a high-tech surveillance regime. He said, “China is not the only authoritarian regime in the world but it is the wealthiest, strongest and technologically most advanced.”  He also said China’s ZTE and Huawei telecom giants should not be allowed to dominate the world’s 5G infrastructure rollout.

    But the Global Times’ “economic terrorist” label is a new escalation in the feud between the two.

    The Global Times’ commentary, titled “This global economic terrorist is staring at China!”, claimed Soros only started to criticize China because he felt regret after disposing all his investments in Tencent Music, Baidu and Vishop earlier this year.

    The article added that his Open Society Foundations financed Human Rights Watch, which it claimed spreads “rumors” against China over recent matters in Hong Kong and Xinjiang as well as the origin of the Covid-19 pandemic. The Global Times commentary also claimed Soros had colluded with Apple Daily founder Jimmy Lai to try to start a “color revolution” in Hong Kong in 2019. It also described Soros as “the most evil person in the world” and “the son of Satan.”

    This is not the first time a sovereign country has slammed Soros as “satan”: several years ago his native Hungary said George Soros is “Satan” and his agenda is one that “from its heart hates Christian Europe’s traditions and civilization.”

    In a speech entititled “The Christian duty to fight against the Satan/Soros Plan,” András Aradszki, the government’s secretary of state for energy, framed his ruling party’s long running campaign against Soros for the first time in explicitly theological terms.

    Linking Soros to “abortion, euthanasia, same-sex marriage, and the forced politicization of gender theory,” Aradszki declared from the floor of Hungary’s parliament Sunday, “The Soros mercenaries do not cite the Holy Father’s thoughts on this.”

    He added: “Soros and his comrades want to destroy the independence and values of nation states for the purpose of watering down the Christian spirit of Europe.”

    Citing an alleged plan by Soros for to forcibly settle “tens of millions of migrants” in Europe, Aradszki declared, “The fight against Satan is a Christian duty. Yes, I speak of an attack by Satan, who is also the angel of denial, because they are denying what they are preparing to do — even when it is completely obvious.”

    Going back to China, AsiaTimes reports that the Global Times article was widely republished by mainland websites and cited by Hong Kong and Taiwanese media over the past few days.

    The Global Times was not finished, and in a separate op-ed, the Global Times wrote that:

    “George Soros, who is despised by many around the world for triggering and profiting from crises, started a fresh campaign against China’s economy over the country’s recent regulatory actions. But like his repeatedly failures and massive losses in betting against the world’s second-largest economy before, Soros’ latest attempt is not only doomed to fail but will also erase any credibility he still has when it comes to China.”

    The Global Times was also concerned by Soros’ criticism of BlackRock’s massive new investment in China and Xi’s regulatory clampdown, however it had little to worry about: when it comes to China, Larry Fink’s ideals are just as flexible as the Fed’s mandate for how many bonds and ETFs the asset management giant should buy on its behalf.

    In April 2021, BlackRock Chairman Larry Fink wrote in a letter to shareholders that “the Chinese market represents a significant opportunity to help meet the long-term goals of investors in China and internationally” and provides the company an opportunity to help address the challenge of retirement for millions of people in China.

    “As China’s capital markets continue to open to foreign firms, BlackRock has taken meaningful actions to expand our onshore presence and respond to the needs of our clients,” Fink said. Last August, China approved a wealth management joint venture between BlackRock, Singapore state investor Temasek Holdings and China Construction Bank. In May this year, the joint venture, which is 50.1% owned by Blackrock, 40% by CCB and 9.9% by Temasek, was granted a license by Chinese regulators.

    So far Soros’ attempts to hinder US investments in China by asset management giants have been met with scorn and mockery.

    Tyler Durden
    Mon, 09/13/2021 – 20:40

  • 177 Stanford Faculty Members Urge DOJ To Stop Looking For Chinese Spies In Academia Because It Causes "Racial Profiling"
    177 Stanford Faculty Members Urge DOJ To Stop Looking For Chinese Spies In Academia Because It Causes “Racial Profiling”

    A group of Stanford professors have come together to urge the Justice Department to stop looking for Chinese spies at U.S. universities, a September 8 letter from the group reads.

    Arguing that such programs cause “racial profiling”, the  professors claim the “China Initiative”, which was set up to prevent U.S. technology theft, is “harming the United States’ research and technology competitiveness and “is fueling biases”, Reuters reported.

    The Justice Department brought 27 cases as a result of the initiative. While some have been dropped, others are ongoing. Peter Michelson, Stanford’s senior associate dean for the natural sciences told Reuters: “I think what the FBI’s done in most cases is to scare people – investigating people and interrogating them. And it’s harmful to the country.”

    What country, Peter?

    177 faculty members signed the letter, which was posted on a site they called “Winds of Freedom”. 

    “We, a group of 177 Stanford faculty members from more than 40 departments, have sent the following open letter to the U.S. Attorney General Merrick B. Garland, requesting that he terminates the Department of Justice’s China Initiative. The China Initiative was introduced by then Attorney General Jeff Sessions in 2018, with the objective of combating economic espionage, intellectual property theft and other threats associated with the government of China,” the site reads.

    It continues: “However, we believe the China Initiative raises concerns of racial profiling and is harming the United States’ research and technology competitiveness. This initiative has led to a significant increase of investigations and prosecutions to researchers in academia, with most cases unrelated to intellectual property theft or scientific/economic espionage. The investigations have been disproportionately targeting researchers of Chinese origin. The chilling effect of the China Initiative is discouraging many scholars from coming to or staying in the U.S. We believe that the China Initiative should be terminated.”

    You can read the full letter here:

     

    Tyler Durden
    Mon, 09/13/2021 – 20:20

  • Aluminum Tops $3,000 For First Time Since 2008 On Supply Woes
    Aluminum Tops $3,000 For First Time Since 2008 On Supply Woes

    Aluminum prices on the London Metal Exchange hit a 13-year high Monday, extending a year-long vertical ramp amid supply risks in Guinea and alumina refining woes in China and Europe. 

    The benchmark contract on the LME climbed nearly 1%, touching its highest level since 2008 at $3,000 per ton. Prices have jumped 50% this year and 15% in the last three weeks. 

    Aluminum prices have been supported by production curbs in Chinese smelting regions, often to alleviate the strain on the power grid. The latest price surge comes from a military coup in Guinea last Monday sparked concerns over the supply of bauxite, a sedimentary rock with high aluminum content.

    A stream of announcements from China has been about challenges faced by smelters. On Monday, Steelhome reported that Yunnan would limit smelter capacity to reduce energy. Smelters in the European Union are also facing pressure with record-high power costs.  

    “In China and increasingly in the EU, policy risk to aluminum supply is growing,” Goldman Sachs’ analysts Jeff Curri told clients in a note Monday. He is not worried about the coup in Guinea affecting the bauxite supply just yet and says upside risks persist due to further logistical bottlenecks. 

    Another factor boosting prices is dwindling exchange stockpiles and strong demand. LME warehouses report aluminum inventories have plunged 33% since March to 1.3 million tons, and stocks in Shanghai Futures Exchange plummeted 42% to 228,529 tons since April. 

    The metal has wide applications in everything from car pates, appliances, defense weapons, airplanes, and even the soda can, has faced strong demand since the pandemic after global central banks and governments unleashed trillions of dollars in stimulus. Goldman Curri recently told clients:

    “As demand improves seasonally from September, aided by reduced lockdown effects and some probable supportive policy adjustments, we expect continued tightness onshore into Q4 and support for higher import volumes of refined metal. This fundamental setup will offer support for a trend higher in both copper and aluminum prices in particular.”

    Another tailwind for Bloomberg Industrial Metals Index, already at a decade high, could be the troughing of China’s credit impulse. 

    Tyler Durden
    Mon, 09/13/2021 – 20:00

  • High School Barred Students From Commemorating 9/11 Over 'Racial Insensitivity'
    High School Barred Students From Commemorating 9/11 Over ‘Racial Insensitivity’

    Controversy erupted this past weekend at a Washington State high school over plans to commemorate the 20th year anniversary since the September 11 terror attacks. Students at Eastlake High School in the city of Sammamish had organized and planned to simply wear red, white and blue clothing to a patriotic-themed football game, but were told by school administrators that it would be “racially insensitive”. 

    A local media report said the patriotic commemoration was shut down because American flag colors might “unintentionally cause offense to some who see it differently” – and that specifically it could be could be “racially insensitive and offend some people.”

    Illustrative image: patriotic and military appreciation themed high school games have become common across the country.

    It was described as a last minute cancelation and caused outrage among students and parents, particularly given the school has no basis on which to ban clothing that doesn’t fit the category of crude or offensive. Instead the school literally told students not to wear red, white and blue to the game.

    A school principal had reportedly sent an email to parents explaining that while the school understands “sacrifice and values our flag represents,” but ultimately that school leadership “just did not want to unintentionally cause offense to some who see it differently.”

    The school never explained just what about red, white and blue coloring would be “offensive” to anyone. Later the school district’s communications director claimed there wasn’t enough time before the game to let everyone know about the patriotic-themed event. The school also at one point suggested the display could cause offense to the other team without enough advanced warning. 

    “Since it was not a home game, there was no opportunity to have an announcement about Patriots Day and to share why students were dressed in red, white and blue,” communication director Shannon Parthemer was cited in local reports as saying. 

    Absurdly, the school is essentially saying that display of American flag and its colors must come with an advanced “trigger warning”.

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    One angry parent speculated as to the assumptions driving the school’s bizarre decision-making “The leadership and equity team decided that since it was against a predominantly Black team they did not want to ‘unintentionally cause offense to some who see (our flag) differently,’” the parent said.

    A local conservative talk radio show further captured the fierce pushback among much of the student body as follows: 

    Ryan Ware is the Eastlake senior class president and member of the football team. He said students were eager to wear red, white, and blue clothes and were disappointed by the school administration’s decision.

    “We disagreed and were extremely disappointed. I couldn’t believe their reasoning,” Ware explained to the Jason Rantz Show on KTTH.

    One other student noted the hypocrisy on display. The school is about inclusivity — just not when it comes to representing the country?

    “I was instantly upset, and frustrated,” one student emailed. “If Eastlake is all about including everyone’s beliefs and being together as a ‘family,’ then why are we being told we can’t represent the country we live in? I have seen other [Lake Washington School District] football teams that held a flag or did some sort of memorial recognition towards 9/11, but apparently we weren’t allowed to even wear USA colors.”

    The frustrations expressed tended to point to the school’s hypocrisy, given in past years it’s talked up and emphasized “inclusivity” – yet this apparently excludes public displays showing a minimal level respect to the United States and past Americans who have paid the ultimate sacrifice. 

    Tyler Durden
    Mon, 09/13/2021 – 19:40

  • Top Tax Rate In NYC Would Be 61.2%, 59.7% In California Under House Dems' New Tax Plan
    Top Tax Rate In NYC Would Be 61.2%, 59.7% In California Under House Dems’ New Tax Plan

    Update (1130ET): At least one influential Democratic lawmaker is claiming that the leadership has promised to kill the SALT deduction cap as part of Biden’s newly revised budget plan.

    Despite it not being included in the outline released by House Ways and Means earlier today, New York Rep. Tom Suozzi has just released a statement claiming that the leadership have committed to removing the cap for SALT deductions.

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    To be sure, it’s not exactly clear what this ‘meaningful change’ will be.

    * * *

    Update (1100ET): CNBC has just produced the first analysis of what the Dems’ new tax proposal would do to the overall tax rate of the wealthiest class of taxpayers.

    Top earners in NYC would face a combined city, state and federal income tax rate of 61.2%. For the top marginal federal income tax rate – which is the rate that taxpayers pay on every dollar of earned income above the threshold – would be 46.6%

    In NYC, the combined top marginal state and city tax rate is 14.8%. So, city taxpayers who earn more than $5MM a year would face a combined city, state and federal marginal rate of 61.2% if the House plan becomes law. These would be among the highest tax rates seen in the last 40 years.

    Things aren’t much better on the west coast. Top-earning Californians would face a combined marginal rate of 59.7%, while those in New Jersey would face a combined rate of 57.2%. Hawaii could face a combined rate of up to 57.4%. Meanwhile, there are no signs that the House will roll back any of the less popular tax hikes from the Trump plan, the SALT deduction cap, which has been a target of Democratic lawmakers since it was passed.

    However, some sources close to CNBC said it’s possible the House might seek to scrap the SALT deduction cap at a later time.

    * * *

    Update (0915ET): The House Ways and Means Committee has just released the new Democratic package of proposed tax hikes (which we previewed below, courtesy of BBG) as Dems take the first step toward revising their budget, now that Sen. Joe Manchin has made clear the $3.5 trillion pricetag wouldn’t work.

    The plan focuses on trying to lower taxes for the smallest businesses. In addition to an increase in the corporate tax rate to 26.5%, the Dems also want to impose a 3% wealth surtax on taxpayers with income above $5MM (or in excess of $2.5 million for a married individual filing separately), while increasing the top capital gains rate to 25%. Dems are also calling for a top personal rate of 39.6%, up from 37%.

    As Republicans and Moderate Dems expressed resistance to the $3.5 trillion figure in Biden’s budget plan, odds of a major hike have fallen, while the market’s expectation for a modest hike in corporate taxes, and in taxes for the wealthy, have emerged. And while there are plenty of other factors to blame for the recent market turbulence, tax hikes are certainly looming on the horizon with Dems in control of both houses of Congress.

    A team of Goldman Sachs strategists led by David Kostin, their top equity strategist, warned clients in a report that they probably aren’t taking the market risks of a tax hike seriously enough.

    “Tax reform, not reduced economic growth forecasts, is the key risk to US equities through year-end 2021,” they add, refering to increasing concerns among clients about what softer growth outlook means for equities. “The market appears to be only partially pricing an increased tax rate in 2022,” the strategists wrote.

    The Ways and Means Committee is planning a vote later this week.

    * * *

    Now that Sen. Joe Manchin has officially come out against President Biden’s $3.5 trillion spending package, the Democrats are being forced to rethink their budget plans – starting with the ‘income’ side, since President Biden has promised to offset additional spending with tax hikes. And so, just hours after Manchin confirmed his opposition to the budget in a series of interviews, Bloomberg reports that the Dems have drafted a new package of tax increases that falls well short of Biden’s ambitious targets.

    The new proposal would raise the top corporate rate from 21% to 26.5%, less than the 28% Biden had sought, people familiar with the matter said Sunday night. Meanwhile, the top rate on capital gains would rise from 20% to 25%, instead of the 39.6% Biden had originally proposed, per Bloomberg.

    The new set of “business minded” tax increases is estimated to raise more than $2 trillion, which still might not be low enough to appeal to moderate Democrats like Manchin.

    Still, the plan was criticized by conservatives, a preview of the fight ahead as the House Ways and Means Committee prepares to meet Tuesday to debate the tax portion of the economic package.

    Americans for Tax Reform, a conservative group that fights for lower taxes, said the proposed tax hikes would lead to an immediate increase in consumer utility bills and make the US less competitive on the world stage.

    “Democrats want to take the current rate of 21% and raise it to 26.5%, higher than communist China’s 25% and higher than the developed world average of 23.5%. This does not even include state corporate income taxes, which average another 4 – 5% nationwide,” the group said.

    The tax increases described in the document, which is circulating among lawmakers of both parties, would raise $2.9 trillion in revenue when combined with $700 billion in revenue and cost savings from Medicare drug price changes. To fully pay for the president’s plan, the proposal factors in $600 billion from the estimated economic growth effects of the spending increase.

    What’s more, the proposal would raise an estimated $16 billion by limiting deductions for executive compensation and $96 billion by higher taxes on tobacco and nicotine products, including e-cigarettes.

    Despite pushback from the crypto community, Dems are still planning to include cryptocurrency in general tax rules allowing for cryptocurrencies to be treated the same as other financial instruments and to prevent taxpayer abuse of the rules.

    Other new taxes in the new plan include: a proposal to cut in half the $24,000 estate and gift tax exemption for married filers on Dec. 31, 2021, four years earlier than set in the tax cuts passed under former President Donald Trump.

    Notably absent from the document is any discussion of lifting the $10,000 cap on the state and local tax deduction, raising questions about the fate of that costly proposal.

    The Ways and Means proposal “meets two core goals the President laid out at the beginning of this process – it does not raise taxes on Americans earning under $400K and it repeals the core elements of the Trump tax giveaways for the wealthy and corporations that have done nothing to strengthen our country’s economic health,” White House spokesman Andrew Bates said in a statement.

    While the numbers are still subject to change before the proposal is officially released, such scaled-back plans would amount to an acknowledgment that even higher rates would have a tough time getting through Congress after some moderate Democrats expressed objections.

    With thin majorities in both chambers, Democrats can afford just three defections in the House and none in the Senate as they try to use a process called “reconciliation” to get their budget passed.

    Tyler Durden
    Mon, 09/13/2021 – 19:25

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