Sep 14

Today’s News 14th September 2022

  • Escobar: Asia's Future Takes Shape In Vladivostok, The Russian Pacific
    Escobar: Asia’s Future Takes Shape In Vladivostok, The Russian Pacific

    Authored by Pepe Escobar,

    Sixty-eight countries gathered on Russia’s far eastern coast to listen to Moscow’s economic and political vision for the Asia-Pacific…

    The Eastern Economic Forum (EEF) in Vladivostok is one of the indispensable annual milestones for keeping up not only with the complex development process of the Russian Far East but major plays for Eurasia integration.

    Mirroring an immensely turbulent 2022, the current theme in Vladivostok is ‘On the Path to a Multipolar World.’ Russian President Vladimir Putin himself, in a short message to business and government participants from 68 nations, set the stage:

    “The obsolete unipolar model is being replaced by a new world order based on the fundamental principles of justice and equality, as well as the recognition of the right of each state and people to their own sovereign path of development. Powerful political and economic centers are taking shape right here in the Asia-Pacific region, acting as a driving force in this irreversible process.”

    In his speech to the EEF plenary session, Ukraine was barely mentioned. Putin’s response when asked about it: “Is this country part of Asia-Pacific?”

    The speech was largely structured as a serious message to the collective west, as well as to what top analyst Sergey Karaganov calls the “global majority.” Among several takeaways, these may be the most relevant:

    • Russia as a sovereign state will defend its interests.

    • Western sanctions ‘fever’ is threatening the world – and economic crises are not going away after the pandemic.

    • The entire system of international relations has changed. There is an attempt to maintain world order by changing the rules.

    • Sanctions on Russia are closing down businesses in Europe. Russia is coping with economic and tech aggression from the west.

    • Inflation is breaking records in developed countries. Russia is looking at around 12 percent.

    • Russia has played its part in grain exports leaving Ukraine, but most shipments went to EU nations and not developing countries.

    • The “welfare of the ‘Golden Billion’ is being ignored.”

    • The west is in no position to dictate energy prices to Russia.

    • Ruble and yuan will be used for gas payments.

    • The role of Asia-Pacific has significantly increased.

    In a nutshell: Asia is the new epicenter of technological progress and productivity.

    No more an ‘object of colonization’ 

    Taking place only two weeks before another essential annual gathering – the Shanghai Cooperation Organization (SCO) summit in Samarkand – it is no wonder some of the top discussions at the EEF revolve around the increasing economic interpolation between the SCO and the Association of Southeast Asian Nations (ASEAN).

    This theme is as crucial as the development of the Russian Arctic: at 41 percent of total territory, that’s the largest resource base in the federation, spread out over nine regions, and encompassing the largest Special Economic Zone (SEZ) on the planet, linked to the free port of Vladivostok. The Arctic is being developed via several strategically important projects processing mineral, energy, water and biological natural resources.

    So it’s perfectly fitting that Austria’s former foreign minister Karin Kneissel, self-described as “a passionate historian,” quipped about her fascination at how Russia and its Asian partners are tackling the development of the Northern Sea Route: “One of my favorite expressions is that airlines and pipelines are moving east. And I keep saying this for twenty years.”

    Amidst a wealth of roundtables exploring everything from the power of territory, supply chains and global education to “the three whales” (science, nature, human), arguably the top discussion this Tuesday at the forum was centered on the role of the SCO.

    Apart from the current full members – Russia, China, India, Pakistan, four Central Asians (Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan), plus the recent accession of Iran – no less than 11 further nations want to join, from observer Afghanistan to dialogue partner Turkey.

    Grigory Logvinov, the SCO’s deputy secretary general, stressed how the economic, political and scientific potential of players comprising “the center of gravity” for Asia – over a quarter of the world’s GDP, 50 percent of the world’s population – has not been fully harvested yet.

    Kirill Barsky, from the Moscow State Institute of International Relations, explained how the SCO is actually the model of multipolarity, according to its charter, compared to the backdrop of “destructive processes” launched by the west.

    And that leads to the economic agenda in the Eurasian integration progress, with the Russian-led Eurasia Economic Union (EAEU) configured as the SCO’s most important partner.

    Barsky identifies the SCO as “the core Eurasian structure, forming the agenda of Greater Eurasia within a network of partnership organizations.” That’s where the importance of the cooperation with ASEAN comes in.

    Barsky could not but evoke Mackinder, Spykman and Brzezinski – who regarded Eurasia “as an object to be acted upon the wishes of western states, confined within the continent, away from the ocean shores, so the western world could dominate in a global confrontation of land and sea. The SCO as it developed can triumph over these negative concepts.”

    And here we hit a notion widely shared from Tehran to Vladivostok:

    Eurasia no longer as “an object of colonization by ‘civilized Europe’ but again an agent of global policy.”

    ‘India wants a 21st Asian century’

    Sun Zuangnzhi from the Chinese Academy of Social Sciences (CASS) elaborated on China’s interest in the SCO. He focused on achievements: In the 21 years since its founding, a mechanism to establish security between China, Russia and Central Asian states evolved into “multi-tiered, multi-sector cooperation mechanisms.”

    Instead of “turning into a political instrument,” the SCO should capitalize on its role of dialogue forum for states with a difficult history of conflicts – “interactions are sometimes difficult” – and focus on economic cooperation “on health, energy, food security, reduction of poverty.”

    Rashid Alimov, a former SCO secretary general, now a professor at the Taihe Institute, stressed the “high expectations” from Central Asian nations, the core of the organization. The original idea remains – based on the indivisibility of security on a trans-regional level in Eurasia.

    Well, we all know how the US and NATO reacted when Russia late last year proposed a serious dialogue on “indivisibility of security.”

    As Central Asia does not have an outlet to the sea, it is inevitable, as Alimov stressed, that Uzbekistan’s foreign policy privileges involvement in accelerated intra-SCO trade. Russia and China may be the leading investors, and now “Iran also plays an important role. Over 1,200 Iranian companies are working in Central Asia.”

    Connectivity, once again, must increase: “The World Bank rates Central Asia as one of the least connected economies in the world.”

    Sergey Storchak of Russian bank VEB explained the workings of the “SCO interbank consortium.” Partners have used “a credit line from the Bank of China” and want to sign a deal with Uzbekistan. The SCO interbank consortium will be led by the Indians on a rotation basis – and they want to step up its game. At the upcoming summit in Samarkand, Storchak expects a road map for the transition towards the use of national currencies in regional trade.

    Kumar Rajan from the School of International Studies of the Jawaharlal Nehru University articulated the Indian position. He went straight to the point: “India wants a 21st Asian century. Close cooperation between India and China is necessary. They can make the Asian century happen.”

    Rajan remarked how India does not see the SCO as an alliance, but committed to the development and political stability of Eurasia.

    He made the crucial point about connectivity revolving around India “working with Russia and Central Asia with the INSTC” – the International North South Transportation Corridor, and one of its key hubs, the Chabahar port in Iran: “India does not have direct physical connectivity with Central Asia. The INSTC has the participation of an Iranian shipping line with 300 vessels, connecting to Mumbai. President Putin, in the [recent] Caspian meeting, referred directly to the INSTC.”

    Crucially, India not only supports the Russian concept of Greater Eurasia Partnership but is engaged in setting up a free trade agreement with the EAEU: Prime Minister Narendra Modi, incidentally, came to the Vladivostok forum last year.

    In all of the above nuanced interventions, some themes are constant. After the Afghanistan disaster and the end of the US occupation there, the stabilizing role of the SCO cannot be overstated enough. An ambitious road map for cooperation is a must – probably to be approved at the Samarkand summit. All players will be gradually changing to trade in bilateral currencies. And creation of transit corridors is leading to the progressive integration of national transit systems.

    Let there be light

    A key roundtable on the ‘Gateway to a Multipolar World’ expanded on the SCO role, outlining how most Asian nations are “friendly” or “benevolently neutral” when it comes to Russia after the start of the Special Military Operation (SMO) in Ukraine.

    So the possibilities for expanding cooperation across Eurasia remain practically unlimited. Complementarity of economies is the main factor. That would lead, among other developments, to the Russian Far East, as a multipolar hub, turning into “Russia’s gateway to Asia” by the 2030s.

    Wang Wen from the Chongyang Institute for Financial Studies stressed the need for Russia to rediscover China – finding “mutual trust in the middle level and elites level”. At the same time, there’s a sort of global rush to join BRICS, from Saudi Arabia and Iran to Afghanistan and Argentina:

    “That means a new civilization model for emerging economies like China and Argentina because they want to rise up peacefully (…) I think we are in the new civilization age.”

    B. K. Sharma from the United Service Institution of India got back to Spykman pigeonholing the nation as a rimland state. Not anymore: India now has multiple strategies, from connecting to Central Asia to the ‘Act East’ policy. Overall, it’s an outreach to Eurasia, as India “is not competitive and needs to diversify to get better access to Eurasia, with logistical help from Russia.“

    Sharma stresses how India takes SCO, BRICS and RICs very seriously while seeing Russia playing “an important role in the Indian Ocean.” He nuances the Indo-Pacific outlook: India does not want Quad as a military alliance, privileging instead “interdependence and complementarity between India, Russia and China.”

    All of these discussions interconnect with the two overarching themes in several Vladivostok roundtables: energy and the development of the Arctic’s natural resources.

    Pavel Sorokin, Russian First Deputy Minister of Energy, dismissed the notion of a storm or typhoon in the energy markets: “It’s a far cry from a natural process. It’s a man-made situation.” The Russian economy, in contrast, is seen by most analysts as slowly but surely designing its Arctic/Asian cooperation future – including, for instance, the creation of a sophisticated trans-shipment infrastructure for Liquified Natural Gas (LNG).

    Energy Minister Nikolay Shulginov made sure that Russia will actually increase its gas production, considering the rise of LNG deliveries and the construction of Power of Siberia-2 to China: “We will not merely scale up the pipeline capacity but we will also expand LNG production: it has mobility and excellent purchases on the global market.”

    On the Northern Sea Route, the emphasis is on building a powerful, modern icebreaker fleet – including nuclear. Gadzhimagomed Guseynov, First Deputy Minister for the Development of the Far East and the Arctic, is adamant: “What Russia has to do is to make the Northern Sea Route a sustainable and important transit route.”

    There is a long-term plan up to 2035 to create infrastructure for safe shipping navigation, following an ‘Arctic best practices’ of learning step by step. NOVATEK, according to its deputy chairman Evgeniy Ambrosov, has been conducting no less than a revolution in terms of Arctic navigation and shipbuilding in the last few years.

    Kniessel, the former Austrian minister, recalled that she always missed the larger geopolitical picture in her discussions when she was active in European politics (she now lives in Lebanon): “I wrote about the passing of the torch from Atlanticism to the Pacific. Airlines, pipelines and waterways are moving East. The Far East is actually Pacific Russia.”

    Whatever Atlanticists may think of it, the last word for the moment might belong to Vitaly Markelov, from the board of directors of Gazprom: Russia is ready for winter. There will be warmth and light everywhere.”

    Tyler Durden
    Tue, 09/13/2022 – 23:30

  • "No More Naivety": Germany Working On New Trade Policy Reducing Dependence On Chinese Raw Materials
    “No More Naivety”: Germany Working On New Trade Policy Reducing Dependence On Chinese Raw Materials

    It appears that beggars can be choosers.

    The beggar in this case is Germany – whose economic prosperity over the past two decades has been largely a function of its close mercantilist relationship with China (and, of course, the PIIGS-crippling euro which allowed Germany to benefit from a cheap, distributed and very much artificial currency instead of the always overvalued DEM) – which according to Reuters has chosen it no longer needs said prosperity, and on Tuesday Germany’s economy minister, Robert Habeck, said the government was working on a new trade policy with China to reduce dependence on Chinese raw materials, batteries and semiconductors, promising “no more naivety” in trade dealings with Beijing.

    Sources told Reuters last week the economy ministry was considering a raft of new measures to make business with China less attractive. And today was the first time the minister confirmed the tougher line was being translated into policy measures

    Habeck told Reuters that China was a welcome trading partner, but Germany could not allow Beijing’s protectionism to distort competition and would not hold back criticism of human rights violations under threat of losing business.

    “We cannot allow ourselves to be blackmailed,” he said in an interview, clearly forgetting that since Germany already lost Russian commodities, it clearly can be blackmailed by China, which together with its sphere of influence – i.e., LatAm and Africa – which remains its last chance at having access to any commodities.

    Habeck did not outline new measures in full – for the simple reason that they don’t exist nor will they ever be implemented unless Germany wants an overnight depression – but said they would include closer examination of Chinese investments in Europe, such as infrastructure.

    While there are many things about Germany’s tantrum that are delightfully idiotic, what is most laughable is that China has been Germany’s biggest trade partner for the past six years, with volumes reaching over 245 billion euros ($246 billion) in 2021. And guess what happens when you tell your biggest trade partner you will no longer tolerate anything they want you to tolerate?

    But the centre-left government – the same geniuses who laughed at Trump, took their energy policies from a Scandinavian teenager, left Germany with almost no nuclear power plants and hostage to Putin’s geopolitical ambitions – is taking a tougher line towards Beijing than its centre-right predecessor, clearly pressured by woke German twitterers and “worried about Germany’s dependence on Asia’s economic superpower” (odd they were not worried about Germany’s dependent on Russia’s energy superpower).

    Last Thursday, Reuters reported the economy ministry was considering measures including reducing or even scrapping investment and export guarantees for China and no longer promoting trade fairs. Habeck said Germany must open up to new trading partners and regions as many sectors were heavily dependent on selling to China.

    Of course, if Germany is dumb enough to do another huge mistake and extends its blockade of Russia to China, the results will be beyond catastrophic.

    “If it (the Chinese market) were to close, which is not likely at the moment … we would have extreme sales problems,” Habeck said, adding the economy ministry was contributing to the new German-China policy, much of which is already in place. “And from this you will see that there is no more naivety,” he added.

    Berlin also wants to examine Chinese investments in Europe more critically, he said, adding Europe should not support China’s Silk Road Initiative, which aims to buy up strategic infrastructure in Europe and influence trade policy.

    As an example, Habeck signalled he was opposed to plans by China’s Cosco to buy a stake in a container operator at Germany’s Hafen Hamburg port, signalling concerns about Chinese takeover deals are spreading out from the technology arena into other industry sectors, such as logistics.

    “I’m leaning towards the fact that we don’t allow that,” he said.

    China has not joined the West in imposing sweeping sanctions on Moscow following Russia’s invasion of Ukraine, but has also not endorsed Moscow’s actions as Beijing needs to maintain trade relations with Europe. Of course, the more Europe in general, and Germany in particular, pushes against its biggest trading partner, the faster it will ensure that the strategic union between Russia and China is unbreakable, and leave the west with soaring inflation in everything from commodities to raw materials and all those formerly cheap things people could buy at Walmart.

    Tyler Durden
    Tue, 09/13/2022 – 23:10

  • Post-Fukushima Shift: Political And Public Support Rises In Japan For More Nuclear Plants
    Post-Fukushima Shift: Political And Public Support Rises In Japan For More Nuclear Plants

    In Japan, a major reversal last month, the government now wants to restart more nuclear power plants that were idled after the 2011 Fukushima disaster and is interested in expanding investments in next-generation plants. Weeks after the announcement, Japanese broadcaster NHK commissioned a new survey that revealed half of the population supports the government’s initiative to expand nuclear power. 

    NHK found that 48% of the respondents supported Japanese Prime Minister Fumio Kishida’s plan of developing next-generation nuclear reactors as a reliable, clean energy power source in the country. About 32% opposed the plan, and another 20% were undecided. 

    The survey was conducted between Sept. 9-11 via random telephone conversations among 1,255 adults and came two weeks after Kishida announced plans to examine the construction of new plants that would break more than a decade of energy policy following the Fukushima disaster, which led to a decade-long effort to eliminate nuclear. 

    Japan’s energy policy is coming out of a decade of paralysis with increasing political and public support. The prime minister announced the restart of seven nuclear reactors across the country by the summer of 2023, bringing the total number of operating power units to 17.

    Kishida’s reasoning behind revisiting nuclear comes as Japan could face electricity supply problems due to soaring prices of natural gas and other energy products. 

    Uranium bulls should be jumping for joy at the prime minister’s statement last month: 

    “Nuclear power and renewables are essential to proceed with a green transformation,” Kishida said. “Russia’s invasion changed the global energy situation.”

    Besides Japan, California and Germany have recently announced plans to extend the life of nuclear power plants beyond the end of this year as the world faces a very dark winter amid a global energy crisis.

    “Germany and California have been two of the most negative jurisdictions in the world on nuclear and both of them are coming around. I would say hell would freeze over before that would happen,” Per Jander, director of nuclear and renewables at WMC Energy, a commodity merchant, told Financial Times. “It will have an immediate impact on the market.”

    The world appears to be more receptive to nuclear following the invasion of Ukraine. We should revisit our recommendation on Uranium from December 2020. 

    Nuclear will sooner or later be accepted as one of the most stable “clean energy” sources of power in the green energy transition. Unlike solar, wind, and hydro, the world has figured out those renewable energy sources aren’t as reliable as previously thought. Nuclear will be a big winner as the world races to decarbonize power grids. 

    Tyler Durden
    Tue, 09/13/2022 – 22:30

  • Virginia AG Forming 'Election Integrity Unit' To Make It "Easy To Vote And Hard To Cheat"
    Virginia AG Forming ‘Election Integrity Unit’ To Make It “Easy To Vote And Hard To Cheat”

    Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

    Virginia’s Republican attorney general, Jason Miyares, announced on Sept. 9 the formation of an “Election Integrity Unit” within his office that will ensure “legality and purity” in the election process by working with law enforcement, the Department of Elections, the State Board, and the broader community.

    “I pledged during the 2021 campaign to work to increase transparency and strengthen confidence in our state elections,” said Miyares in a press release on Friday. “It should be easy to vote, and hard to cheat. The Election Integrity Unit will work to help to restore confidence in our democratic process in the Commonwealth.”

    Jason Miyares, who later won the election for Virginia attorney general and was sworn into office, speaks to a rally in a file photograph. (Anna Moneymaker/Getty Images)

    Headed by Miyares, the unit will have more than 20 attorneys, investigators, and paralegals from across the various divisions of the AG’s office. They are expected to monitor processes across Virginia’s 133 local electoral boards and general registrars and the bipartisan State Board of Elections starting with the upcoming midterms. Early voting begins in the state on Sept. 17, 2022.

    The Republican Party of Virginia voiced its support for the unit, and said that the AG’s “bold initiative will increase transparency in our elections, restore confidence in our democratic process, and better ensure that every vote is counted in accordance with the law.”

    “At the same time, Democrats in the state senate have blocked common-sense election integrity measures like voter ID,” it added.

    The Epoch Times has reached out to the office of Virginia Democrats.

    “With the creation of this unit, Attorney General Miyares has fully embraced Trump’s ‘Big Lie’ and the far-right fringes of the Republican party,” said Democratic Party of Virginia spokesman Gianni Snidle, according to Virginia Mercury.

    Voter Fraud in Virginia

    The statement from the Virginia GOP included the news of a former election official who has been prosecuted by Miyares for election fraud. “Just this week, we saw the need for stronger protections for our elections system when a former top Prince William County election official was indicted on fraud charges related to the 2020 election,” said the GOP.

    The official, Michele White, was indicted last week for three felonies, according to documents reviewed by The Epoch Times. Based on the grand jury charge, White engaged in corrupt conduct between Aug. 1 and Dec. 31, 2020, and is accused of making a false statement regarding the election and neglecting her duty as an election officer. She faces 21 years in prison if convicted of all charges.

    Media companies like Democracy Docket and the Washington Post discounted the formation of the unit, and wrote similar tweets voicing their opinions on the 2020 election.

    “Virginia Attorney General Jason Miyares (R) announces new Election Integrity Unit to investigate and prosecute election law violations. Election crimes are not a widespread problem in Virginia, or anywhere in the U.S.,” said Democracy Docket in a tweet on Friday.

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

    Meanwhile, the Washington Post said, “Virginia’s Republican Attorney General Jason Miyares announced the creation of an ‘Election Integrity Unit’ that will provide legal advice and prosecute election law violations. The state, however, has not seen significant issues with voter fraud.”

    Read more here…

    Tyler Durden
    Tue, 09/13/2022 – 22:10

  • NY Fed Guru Says Powell Will "Overdo It" And Cause A Recession
    NY Fed Guru Says Powell Will “Overdo It” And Cause A Recession

    When BofA’s top Rates strategist, and former NY Fed analyst, Marc Cabana speaks, investors, the Fed – and even his former Fed co-worker and repo guru, Zoltan Pozsar – listen. And what Cabana has to say is always extremely important.

    Two months after Cabana’s rates team published a must read note in which it predicted that the Fed will be forced to end QT much sooner than expected…

    “Fed QT that is stopped in Sept ’23 will result in $1tn less balance sheet reduction vs our prior estimates through end ’24. Over a similar period, early QT end would result in $780b less UST financing need + $350b of additional Fed UST demand (from Fed MBS paydowns reinvested into USTs).”

    … today the former NY Fed guru warned of precisely the same thing that we have been saying for years, namely that the Fed won’t stop – and probably can’t stop – until it breaks something. Or some things.

    Speaking to Bloomberg TV just one hour before today’s CPI print came in far hotter than expected and convinced markets that a 100bps hike is likely on deck next week, Cabana said the Fed is so intent on stopping inflation it will likely raise rates until the US economy is in a recession.

    “The Fed is probably going to overdo it,” the global head of US rates strategy at BofA, told Bloomberg TV. “We have seen them turn very hawkish with the labor-market strength. We think that the Fed will try and stick to this higher-for-longer mantra. That’s probably going to result in a recession.”

    Shortly after Cabana’s interview, the CPI print sent stocks plunging to their worst daily loss since the summer of 2020, as Treasury yields soared across the curve, with the two-year rate soaring as much as 18 basis points to about 3.75% — the highest since 2007 — while the terminal rate, or the implied rate for where the tightening cycle will top out next year, leaped to about 4.3%.

    And since by then the Fed will have broken more than just the economy (last week we had our first major credit event as Mike Hartnett noted), expectations that the Fed will have to cut even faster than before in 2023 also jumped.

    Cabana also picked up on a point we made over the weekend, namely that “the Fed probably won’t trust that until they see the labor market soften more meaningfully. It certainly seems like the Fed is dead-set on ensuring that they get that labor market slowdown.”

    Translation: as Jason Furman wrote late last week, for the Fed to lower inflation to ~2% by the 2024 presidential election, unemployment will have to rise to 6.5% from 3.7% currently…

    … resulting in a tidal wave of job less equal to at least an additional 4.8 million unemployed.

    Fed Chair Jerome Powell and other officials have said the bank is committed to its goal of cutting inflation down to 2% over time. Cabana provided a warning to investors on that point.

    “I do worry that this is a Fed that wants to see even more tightening of financial conditions in order to have faith that they will be able to achieve their 2% inflation target,” he said. The risks are skewed in the Fed continuing to sound hawkish, with that being be “a headwind for risk assets,” Cabana added.

    And of course, he is right… to a point, the point being when enough Democrats scream bloody murder at the coming unemployment tsunami and force Powell to reverse. What happens then? Why the exact thing we have been saying for over a year: the Fed’s only option will be to raise its “inflation target” from 2% to 3%, something even Fuhrman agrees is coming…

    Fed Chair Jerome Powell and other officials have said the bank is committed to its goal of cutting inflation down to 2% over time. Cabana provided a warning to investors on that point. “I do worry that this is a Fed that wants to see even more tightening of financial conditions in order to have faith that they will be able to achieve their 2% inflation target,” he said. The risks are skewed in the Fed continuing to sound hawkish, with that being be “a headwind for risk assets,” Cabana added.

    … and an event which will send all assets to fresh all time highs, which may explain why so many stubbornly refuse to sell stocks, well aware that when the Fed pivot comes, all markets will reprice exponentially higher within nanoseconds.

    Tyler Durden
    Tue, 09/13/2022 – 21:50

  • Peter Thiel: 'Wokeness' Is Like Wahhabism
    Peter Thiel: ‘Wokeness’ Is Like Wahhabism

    Authored by Park MacDougald via UnHerd.com,

    The third annual National Conservatism conference kicked off Sunday in Miami, Florida, bringing together a who’s who of figures associated with the so-called “New Right.” Topics of discussion included how to combat the rise of China, how to fight back against gender ideology, and, courtesy of the Heritage Foundation’s David Azerrad, how to resist the “blackpill” of living in a country in which “the elite is corrupt and so are the people”.  

    But the headliners were names that will be familiar to anyone with even a passing familiarity with current events – billionaire investor Peter Thiel and Florida Governor Ron DeSantis, whose 2024 presidential ambitions are the worst-kept secret in American politics.

    The billionaire warned that California is starting to seem like Saudi Arabia…

    Peter Thiel delivered a typically contrarian speech at the NatCon conference

    Thiel opened the conference with what, considering the circumstances, amounted to a contrarian speech.

    The topic of his address was California, which in recent years has become a standard conservative punching bag.

    But Thiel’s diagnosis of the problem was different.

    In his view, the main problem with California is that, like Saudi Arabia or Venezuela, it is the victim of a “resource curse”.

    That is, the wealth generated from California’s tech sector is so tremendous that it ends up distorting the state’s entire political economy.

    “Wokeness”, he posited, plays the same role as Wahabbism in the similarly afflicted Saudi Arabia.

    There is, of course, a minority — “maybe 20%” of true believers — but mostly it is a sort of lip service that Machiavellian elites pay to a system of values that allows them to keep the whole corrupt machine running. 

    The problem with the Democratic Party, Thiel argued, is that it is effectively trapped in the California model – a fabulously wealthy and productive oligarchy on top, public-sector bureacurats in the middle, and a feral underclass dependent on government transfers on the bottom.

    But that model can’t go national — there isn’t enough money in the tech sector to go around. 

    Thiel also issued a word of warning to Republicans.

    The current GOP, he said, is stuck in a pure “nihilistic negation” of the Democrats’ California model – railing against wokeness, urban crime, and feces on the streets of San Francisco, without even attempting to offer a positive model to counter it.

    “The temptation on our side is always going to be that all we have to do is say that we’re not California,” he said.

    “It is just such an ugly picture, the homeless poop, people pooping all over the place, it’s the ridiculous rat-infested apartments that don’t work anymore, it’s the woke insanities, there’s so much that it feels like shooting fish in a barrel. It’s so easy, so ridiculous to denounce.”

    The question Republicans should be asking, he said, was: “How can we concretely offer a vision for the 21st century that’s better than California?”

    Bashing California “might be enough to win in the midterms in ’22,” Thiel said, “It might be enough to win in ’24. But we want to have more of a program positive vision, something like that to be credible.”

    Even red state success stories like Texas and Florida, he noted, have seen speculative bonanzas in real estate and permanently rising housing prices in cities like Austin and Miami, suggesting that neither Greg Abbott nor Ron DeSantis have figured out a truly sustainable model for middle class prosperity. 

    “The fact that real estate in Florida or Texas has melted up over the last two or three years is not evidence that you’re succeeding and building a better model than California,” he said.

    “I’m worried that that’s evidence that you’re becoming like California.”

    Watch the full Thiel keynote below:

    The billionaire’s remarks were a bit cryptic, and hung over the remainder of Day 1, which in other respects felt like a full-on rally for DeSantis’s expected 2024 presidential campaign. Indeed, DeSantis’s speech, which closed proceedings on Sunday evening, brought the house down. 

    The governor, looking confident behind the lectern, spent nearly an hour running through his big themes of the last two years – fighting the public health bureaucrats over lockdowns and school shutdowns, passing laws against woke indoctrination in schools and workplaces, and going to war with Disney over what he described as the company’s plans to push gender ideology on Florida’s children. When he reached the climax of his speech – “Disney is no longer going to have its own government – the room erupted in a standing ovation.  

    DeSantis, if today is any indication, has won over the nationalist-populist intellectual sorts that have flocked to today’s conference. But if Thiel’s remarks are any indication, America’s most interesting billionaire is after bigger game.

    Tyler Durden
    Tue, 09/13/2022 – 21:30

  • Another Russian Energy Exec Found Dead, 'Fell Overboard' Boat At Full Speed
    Another Russian Energy Exec Found Dead, ‘Fell Overboard’ Boat At Full Speed

    Another one bites the dust…

    Less than two weeks since Ravil Maganov, the vice president and chair of the board of directors of Russian oil giant Lukoil, died after falling out of a sixth floor hospital window in Moscow, another Russian energy executive has been found dead in mysterious circumstances.

    39-year-old Ivan Pechorin, managing director of Putin’s Far East and Arctic Development Corporation, fell off the side of a boat while sailing in the waters close to Russky Island near Cape Ignatiev, according to Russian daily Komsomolskaya Pravda.

    For two days, rescuers searched for a man at sea near the coastline – unfortunately, he was found dead.

    “On September 12, 2022, it became known about the tragic death of our colleague, Managing Director for the Aviation Industry of the Far East and Arctic Development Corporation Ivan Pechorin. Ivan’s death is an irreparable loss for friends and colleagues, a great loss for the corporation,” representatives of the Development Corporation said.

    According to The Mirror’s Russia correspondent, he was personally selected by Putin for his role, and was described by Newsweek as Putin’s “key man” in the region. 

    Interestingly, Pechorin’s death comes just months after the corporation’s former CEO Igor Nosov, 43, also died suddenly in February, reportedly from a stroke.

    Pechorin’s death is the latest in a string of unexplained or untimely deaths of Russian magnates connected to the energy industry in the last months.

    Tyler Durden
    Tue, 09/13/2022 – 21:10

  • Biden Admin Reportedly Ready To Refill Strategic Petroleum Reserve At $80/BBL
    Biden Admin Reportedly Ready To Refill Strategic Petroleum Reserve At $80/BBL

    A day after we reported that the Biden administration withdrew a record amount from the US Strategic Petroleum Reserve plunging it to its lowest since 1982, Bloomberg reports that, according to people familiar with the matter, the US may begin refilling its emergency oil reserve when crude prices fall to around $80 a barrel.

    The sources said that Biden administration officials are weighing the timing of such a move, with an eye toward protecting US oil-production growth and preventing crude prices from plummeting (in an effort to reassure oil producers that the administration won’t let prices collapse).

    The reaction in WTI was immediate with the front-month bid (well above $80)…

    “It may not be a catalyst for $100 crude but does offer a buffer to the downside risk that the market is worrying about,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.

    And as we have noted previously, while gas prices have dropped for 90 straight days now, they are already decoupled to the downside (thanks to the SPR releases) relative to crude and wholesale prices.

    But, as we noted yesterday, this is likely to be problem for after the Midterms – so really, Biden doesn’t care if it raises gas prices, it will be Republican House’s problem?

    So – to sum up – President Biden is fighting inflation by pre-announcing there is now a hard floor on oil prices, ensuring they never drop below it and gasoline surges now that OPEC has all the leverage.

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

    Trade accordingly.

    Tyler Durden
    Tue, 09/13/2022 – 20:58

  • These US Cities Are Seeing Largest Increase In Rent Prices
    These US Cities Are Seeing Largest Increase In Rent Prices

    Authored by Mary Prenon via The Epoch Times (emphasis ours),

    While New York, California, and Boston continue to be the most expensive rental markets in the country, some unexpected locales have actually experienced the largest increases in one-bedroom apartment prices year-over-year.

    A “For Rent” sign posted in front of an apartment building in San Francisco, Calif., on June 2, 2021. (Justin Sullivan/Getty Images)

    Greensboro, North Carolina, sits atop the list with rent increases of 74.2 percent, followed by Newport News, Virginia, at 60.7 percent, and Tulsa, Oklahoma, at 59.8 percent, according to  Rent.com’s August report. Jon Leckie, a researcher with Rent.com, told The Epoch Times that such increases aren’t unusual, given the amount of people who have been flocking to these areas.

    “We’re seeing a pattern where the markets around the larger metro areas are attracting more people because they’re less expensive, but still within an hour’s commute to a city,” he said. “People want to get out of the crowded, expensive core metros, and the trend toward more remote working means they may not have to commute every day.”

    With one-bedroom apartment monthly rentals averaging $1,289, Greensboro’s rental market falls far below the national average of $1,770.

    “Currently, Charlotte [North Carolina] has the most outbound migration than any other city in the county,” Leckie said. “People are leaving the bigger cities, and we’ve found that much of inbound traffic to Greensboro and the other smaller markets is from New York City, Philadelphia, Chicago, Raleigh, Atlanta, Nashville, and [Washington] D.C.”

    Little Rock, Arkansas; Oklahoma City; Lexington, Kentucky; Rochester, New York; and other communities with populations below 300,000 people are also experiencing rental booms.

    On the other hand, St. Louis; Fort Lauderdale, Florida; and Baltimore are the top three locations that have seen the biggest decrease in one-bedroom apartment rents. St. Louis leads with a 39.4 percent decline, followed by Fort Lauderdale at 34.9 percent and Baltimore at 26.9 percent. Miami, Cleveland, and Reno, Nevada, also made the list of rent reductions.

    “St. Louis saw a huge decline, especially when downtown prices are so high for small spaces,” Leckie said. “The general trends we see, as the big coastal cities continue blowing up with high prices, are that renters will seek out cheaper areas in the Midwest and South. The Northeast and the West are still losing people.”

    Not surprisingly, the report lists New York as the most expensive rental area, with the average one-bedroom rental at $5,760 per month. In the cities of Glendale and Oakland, California, monthly rents average $4,014 and $3,916, respectively. Boston apartment renters pay an average of $3,080, while San Francisco’s average is $3,701 per month.

    Some of the nation’s most affordable one-bedroom rentals can be found in Oklahoma City, at an average of $945; Wichita, Kansas, at $840; and Sioux Falls, South Dakota, with the lowest average of just $796.

    For two-bedroom rentals, the report lists Seattle, Little Rock, and Durham, North Carolina, as the top three cities experiencing the biggest rent increases. Seattle’s rent is up by almost 60 percent, followed by 54.7 percent for Little Rock and 54.2 percent for Durham.

    Conversely, the largest two-bedroom rental decreases were found in Fort Lauderdale, down by almost 43 percent, and St. Louis and Des Moines, Iowa, down by 28.2 percent and 20.6 percent, respectively.

    As with one-bedroom apartments, New York leads the way with the priciest options; the average two-bedroom apartment in the city rents for $8,346 per month. Boston, at $5,795  per month, is the second-most expensive two-bedroom rental market, followed by Oakland, San Francisco, and Los Angeles.

    Read more here…

    Tyler Durden
    Tue, 09/13/2022 – 20:50

  • FBI Tracks Down Mike Lindell On Hunting Trip, Surrounds His Car And Seizes Cell Phone
    FBI Tracks Down Mike Lindell On Hunting Trip, Surrounds His Car And Seizes Cell Phone

    Prominent Trump supporter and 2020 election integrity skeptic Mike Lindell says he was stopped by the FBI Tuesday and had his cell phone seized.

    While heading home from a hunting trip with a friend, Lindell said he was at a Hardees in Minnesota when “cars pulled up in front of us, to the side of us and behind us, and I said ‘they’re either bad guys or the FBI,'” he said. “Well, it turns out they were the FBI.

    More: 

    “I can’t even imagine that you can take someone’s phone because they want me to be a witness in the Tina Peters case. But I’m not a witness, they just want my phone.”

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

    Lindell is the latest Trump ally to receive a warrant or subpoena by the FBI. Last week, the Biden DOJ hit dozens of Trump aides and allies with subpoenas as part of their investigation into efforts to overturn the results of the 2020 US election over claims of fraud that handed Joe Biden the White House, as well as the run up to the January 6, 2021 Capitol riot.

    Interesting how the Biden DOJ waited more tha 18 months – right before midterms – to initiate legal action against Trumpworld. And Biden said he wouldn’t weaponize the Justice Department.

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

    Tyler Durden
    Tue, 09/13/2022 – 20:30

  • China Is Not Rebalancing, Its Flawed Dependence On Huge Exports Continues
    China Is Not Rebalancing, Its Flawed Dependence On Huge Exports Continues

    Authored by Mike Shedlock via MishTalk.com,

    China talks a game of trade reform but actions speak louder than words…

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

    1. China’s export growth may have slowed compared to recent months, but it is nonetheless up 7.1% year on year in August. I don’t know what the global figures are, but I suspect that China continues to grow its share of total exports.

    2. This should seem pretty remarkable given the problems the Chinese economy faced, but it isn’t. The government continues to release measure after measure aimed – almost desperately – at keeping total production rising. And production has risen, even if only slowly.

    3. The real problem, which Beijing still seems unable to address, continues to be very weak domestic demand. Imports were barely up year on year, rising nominally by 0.3% and almost certainly falling in real terms. This is the third month of surging exports and flat imports.

    4. This shows just how terribly weak domestic demand continues to be. Between rising uncertainty, high unemployment and downward pressure on wages, Chinese households are completely unable to increase their consumption and, with it, their imports.

    5. The trade surplus for August was $79.4 billion, the sixth highest monthly trade surplus on record. This may no longer seem a big number, but it is 35% higher than the record-breaking August surpluses of 2020 and 2021, and it is 129% higher than in 2019.

    6. Year to date China’s trade surplus is $571 billion, or 54% higher than it was last year at this time. This is equal to roughly 4.8% of China’s GDP.

    Nixon Shock, the Reserve Currency Curse, and a Pending Currency Crisis

    It’s important to understand that the US dollar as a global reserve currency and the end of Bretton Woods II is what makes this possible.

    The US is the world’s consumer of last resort. Things have become increasingly unbalanced ever since Nixon closed the gold convertibility window. 

    Now, nations can inflate at will and they do. The result is soaring deficits and massive trade imbalances that were self-correcting under a gold standard. 

    For discussion, please see Nixon Shock, the Reserve Currency Curse, and a Pending Currency Crisis

    *  *  *

    Please Subscribe to MishTalk Email Alerts.

    Tyler Durden
    Tue, 09/13/2022 – 20:10

  • Kremlin Denies Plans For War Declaration & National Draft: "Not Under Discussion"
    Kremlin Denies Plans For War Declaration & National Draft: “Not Under Discussion”

    On Tuesday the Kremlin addressed widespread speculation and rumors that President Vladimir Putin is planning to issue a full declaration of war as Russian forces pull back from Kharkiv, in a Ukraine counteroffensive that Kiev leaders and their Western allies are hailing as a major success. A war declaration would trigger mass mobilization and a draft.

    “Russia is not planning to declare a mass national draft for the war in Ukraine,” the Kremlin stated, amid reports its forces are suffering fatigue, low moral and manpower shortages. Kremlin spokesman Dmitry Peskov emphasized this is not under discussion at this point: “Not at this point. No, we are not discussing that,” he said when asked about widespread reports, as quoted in TASS news.

    Kremlin spokesman Dmitry Peskov, via Reuters

    Peskov was then pressed about the degree to which Ukrainian forces had advanced into Russian lines in the northeast, amid ongoing heavy fighting, but he declined to address the ground situation. “This is for the Defense Ministry. I simply do not have accurate information,” he said.

    There does appear to be growing pressure from inside Russia to act, according to The Moscow Times: 

    Lawmaker Mikhail Sheremet, a member of the State Duma’s Security Committee and the ruling United Russia party, spoke out in favor of general mobilization on Monday, according to the URA.ru news agency. 

    “Without full mobilization, [without] switching to the war mode, including the economy, we will not achieve the desired results,” the agency quoted Sheremet as saying. 

    “I am talking about the fact that today society should be consolidated as much as possible and aim for victory,” said the deputy.

    There have meanwhile also been signs in Russian domestic media and among popular pundits of a narrative shift that is increasingly recognizing recent Russian losses and setbacks, and the need for a strategy overhaul, as well as growing criticism of how the “special operation” is being managed. Very likely there’s under-the-surface ratcheting tensions across the population due to mounting casualties among the country’s young men who’ve been thrust into battle these past seven months.

    For example Al Jazeera chronicles some recent reactions going back to last week as Ukraine forces began taking key towns in the northeast: 

    “There is no panic in Balakliya,” the Telegram channel Veteran’s Notes, which boasts 192,000 subscribers, wrote on September 6. A number of pro-Russian feeds, including that of famous talkshow host Vladimir Solovyov, reposted that message.

    By the following day, however, there was a more sullen tone. “Don’t expect good news today,” Veteran’s Notes warned.

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

    Days later, a Russian defense ministry statement called the withdrawal of Russian forces in Kharkiv Oblast a “regrouping”. Other examples from Russian media of a changing tone on the war include: 

    Speaking on the loss of Izyum, the host of a political talk show on Match TV, a sports channel, urged his viewers to “pray for our guys”.

    The government and its friendly voices in the media have acknowledged that Russian forces have withdrawn from previously held positions, but have avoided outwardly calling it a loss.

    Related to the question of a formal war declaration, looming large in the background is the continued unprecedented in size weapons pipeline coming from the US and NATO countries to Ukraine forces. There’s been widespread acknowledgement that US assistance, which has included intelligence-sharing, has greatly helped the recent Ukraine counteroffensive and territorial gains. This has led to the speculation that Putin could be getting ready to say “enough is enough” and expand the war.

    Tyler Durden
    Tue, 09/13/2022 – 19:50

  • 'You Have To Get More Bearish' – Jeff Gundlach Says Buy Bonds, Sees S&P Hitting 3,000 On Over-Zealous Fed
    ‘You Have To Get More Bearish’ – Jeff Gundlach Says Buy Bonds, Sees S&P Hitting 3,000 On Over-Zealous Fed

    Billionaire investor Jeff Gundlach expects the S&P 500 Index to fall to 3,000 or about a 20%-25% drop from its current level, agreeing with comments made by Guggenheim’s Scott Minerd last week, citing a historical connection between price-to-earnings ratios for stocks and inflation.

    “The action of the credit market is consistent with economic weakness and stock market trouble,” Gundlach said in a CNBC interview.

    “I think you have to start becoming more bearish” in stocks.

    Despite the hotter-than-expected CPI print today – and the market’s surge in rate-hike expectations to a coin-flip between 75bps and 100bps, Gundlach said he believes the Fed should do a 25bps rate increase (though he expects the Fed will institute a 75 bps increase when it meets next week).

    “I would do 25 basis points,” Gundlach told the business network, because he is concerned the Fed might oversteer the economy and hasn’t paused long enough to see what affect the previous hikes have already had.

    Even as inflation continued to surprise to the upside, the so-called bond king believes deflation is now the bigger threat and suggested that long-term Treasuries will outperform next year as the overly aggressive Fed will slow down the economy.

    “Buy long-term Treasuries,” Gundlach told CNBC’s Scott Wapner at the Future Proof Festival.

    Notably, rate-cut expectations starting next year soared today (implying recessionary forces will push Powell back)…

    If inflation turns into deflation, the Fed will be forced to reverse its monetary policy, which could drive bond yields down.

    “In spite of the fact that the narrative today is exactly the opposite, the deflation risk is much higher today than it’s been for the past two years. I’m not talking about next month. I’m talking about sometime later next year, certainly in 2023.”

    In terms of other asset classes, the DoubleLine CEO had some advice for crypto-enthusiasts.

    “I’d certainly not be a buyer [of bitcoin] today,” he said, following today’s carnage. But he added that “you buy crypto when they do free money again,” Gundlach said, referring to The Fed.

    Finally, Gundlach said he owns European stocks and sees the biggest opportunity coming in emerging markets.

    He added that he will not buy EM assets until the dollar breaks below its 200 moving avg…

    …adding that “When it does, you want to be in big.”

    Tyler Durden
    Tue, 09/13/2022 – 19:10

  • Arizona Can't Enforce New Election Law In 2022 Election: Clinton-Appointed Judge
    Arizona Can’t Enforce New Election Law In 2022 Election: Clinton-Appointed Judge

    Authored by Zachary Stieber via The Epoch Times (emphasis ours),

    Arizona officials can’t enforce a new election measure in the upcoming midterm elections, according to a federal judge.

    Arizona Secretary of State and candidate for governor Katie Hobbs speaks to reporters in Tolleson, Ariz., on Aug. 2, 2022. (Brandon Bell/Getty Images)

    Arizona Secretary of State Katie Hobbs and other officials shall not “take any action to implement or enforce H.B. 2243 in a manner that would remove any voter’s eligibility to vote in the 2022 general election or disqualify any otherwise-valid ballot on the basis of H.B. 2243,” U.S. District Judge Susan Bolton, a Clinton appointee, said in the Sept. 8 order.

    Bolton accepted a joint agreement and proposed order outlined by the Arizona Asian American Native Hawaiian and Pacific Islander for Equity Coalition and state officials, including Hobbs and Arizona Attorney General Mark Brnovich, presented to the court earlier on Sept. 8.

    The officials and the coalition, which sued over the legislation in August, agreed that “the provisions of H.B. 2243 should not operate in a manner that would prevent any voter from (1) voting in the upcoming November 2022 general election or (2) having their vote be counted.” Hobbs and Brnovich also decided that the changes to the state election code shouldn’t take effect until Jan. 1, 2023, because one of the laws that the legislation is amending isn’t effective itself until then.

    “While we are pleased with this early agreement that protects the right to vote in the next election, we remain steadfast in our commitment to continue to fight both of these voter suppression laws for the long term,” May Tiwamangkala, an official with the coalition, said in a statement. “We are in this fight to protect the rights of all voters in our state, including those from the AANHPI communities.”

    The offices of Hobbs, a Democrat who’s running for Arizona governor, and Brnovich, a Republican who lost in the state’s Republican primary for U.S. Senate, didn’t respond to requests for comment.

    “Democrats have stooped to a new level of shamefulness and depravity with their latest round of lies about Arizona’s common sense laws to ensure that our elections are accessible, secure, and trustworthy,” state Rep. Jake Hoffman, a Republican who sponsored the legislation, told The Epoch Times in an email.

    “Democrats’ cries of racism are laughable on their face and serve only to shine a spotlight on the Democrat Party’s long history of institutionalized racism and repeated attempts to disenfranchise millions of Americans throughout the last century and a half. Make no mistake about it, ensuring clean voter rolls and protecting the sanctity of Arizonans’ votes by prohibiting non-citizens and non-residents from casting illegal ballots benefits every single legal voter regardless of race, gender, income, and party.”

    Legislation

    The legislation amends a law concerning voter registration. It states that the registration will be canceled for a voter who moves to another state.

    Read more here…

    Tyler Durden
    Tue, 09/13/2022 – 18:50

  • Disney Employee, School Teacher Among 160 Arrested In Florida Human Trafficking Sting
    Disney Employee, School Teacher Among 160 Arrested In Florida Human Trafficking Sting

    A Disney employee, a corrections officer, and several school teachers were among 160 people arrested in a seven-day long undercover human trafficking sting in Polk County, Florida.

    According to WAFB9, the operation – “Fall Haul 2” – resulted in 52 felonies and 216 misdemeanor charges. One of the more notable arrests was that of 41-year-old computer technician for Oak Ridge High School, Cameron Burke, who was out on bond for having a sexual relationship with a 15-year-old student that began in 2020.

    Other notables include a deputy Georgia police chief, a high school math teacher, a bellhop employed by Disney, and a freelance photographer often contacted by Disney.

    The bellhop, Guillermo Perez, 57, was arrested after trying to have sex with an undercover detective for $80, while the freelance photographer, 26-year-old Samy Claude, reportedly offered an undercover cop a bag of sour Skittles.

    The correctional officer, Keith Nieves, 24, was arrested on two counts of soliciting a prostitute.

    The Georgia Deputy Police Chief, Jason DiPrima, 49, allegedly gave an undercover detective $180 and a multi-pack of White Claws.

    “He is no longer a police officer in Cartersville, Georgia, and he needs to work on reconstructing his life with his family. He did a very mean, nasty thing to his family and he certainly embarrassed all the people of Cartersville,” said Polk County Sheriff Grady Judd during a press conference. “The Cartersville Police Department is a very professional police department in Georgia and they didn’t deserve what Jason (DiPrima) did.”

    The oldest of the arrests is 64, while the youngest is 19 years old, according to officials.

    Out of the 160 arrests, 15 people were from states other than Florida, and one was from Puerto Rico.

    Of the people who were arrested, police say 26 of them said they were married.

    Detectives also said they seized cocaine, heroin, meth, MDMA and marijuana from those they arrested as well. –WAFB9

    “Where would we be with an undercover operation and no Disney employees? Oh yes, we always have Disney employees,” joked Judd.

    Tyler Durden
    Tue, 09/13/2022 – 18:30

  • Airline Chaos Could Persist Until 2024, Despite Efforts To Cure Woes
    Airline Chaos Could Persist Until 2024, Despite Efforts To Cure Woes

    Authored by Janice Hisle via The Epoch Times (emphasis ours),

    After a record-breaking summer of angst, aggravation, and anger at America’s airports, little relief may be in sight.

    The problem came into sharper focus during the past few weeks with airline complaints in May and June soaring 270 percent above pre-pandemic levels.

    Passengers make their way through a security line Thursday, June 30, 2022, at the Pittsburgh International Airport in Moon Township, Pa. The airport saw an influx of travelers departing Pittsburgh before the Fourth of July holiday weekend. (Morgan Timms/Pittsburgh Post-Gazette via AP)

    While airlines and federal officials recently announced improved customer service and information-sharing practices with travelers, critics say those measures amount to baby steps. They advocate bigger, more meaningful strides to alleviate the chaos and restore order.

    “When we look at the misery that we’ve seen this last summer, the thought is: How long could it last?” Jay Ratliff, an aviation expert, told The Epoch Times on Sept. 9.

    Ratliff said that the problems predate the COVID-19 pandemic, are more complex than many people realize, and may persist until 2024.

    A sign alerts travelers to the danger of COVID-19 at LaGuardia Airport, during the outbreak of the coronavirus disease (COVID-19), in New York, on June 29, 2020. (Brendan McDermid/Reuters)

    Pandemic Exposed Flaws In System

    While the COVID-19 pandemic was in full swing and air travel slowed to a trickle, consumer complaints and demands for refunds and other compensation burgeoned.

    From January 2020 to June 2021, the the Department of Transportation received 124,823 airline complaints; 83 percent involved refunds. In contrast, the agency received just 15,324 airline complaints in 2019, a DOT analysis says; only about 10 percent of that year’s disputes focused on refunds.

    The number of DOT complaints is especially remarkable because, airline passengers would customarily lodge complaints directly with airlines and were unaware that they could escalate their concerns to the DOT, Ratliff said.

    However, the federal agency’s ability to intervene is somewhat limited because there currently is “no requirement for an airline or a ticket agent to compensate passengers holding non-refundable tickets if they cancel air travel,” the DOT says.

    When the pandemic hit, airlines’ systems were overwhelmed with an unprecedented influx of refund requests. The air carriers also didn’t have enough money to make good on those requests quickly.

    “Passengers entitled to refunds who normally would have received them promptly were left waiting or, in other cases, denied refunds and offered vouchers or travel credits instead,” the DOT said. Some customers faced circumstances that prevented them from taking advantage of the vouchers or travel credits. They ended up with “no compensation at all,” the DOT said.

    Ripple effects of the refund requests spread as the federal government, ticket agents, and credit card companies mediated disputes with disgruntled airline customers.

    Pilots talk after exiting a Delta Airlines flight at the Ronald Reagan National Airport, in Arlington, Va., on July 22, 2020. (Michael A. McCoy/Getty Images)

    Staff Shortage Woes

    Meanwhile, even though the federal government provided emergency funding to keep airlines afloat, the companies were forced to cut costs. They furloughed and laid off tens of thousands of employees. As of last year, U.S. airlines employed 4.8 million full-time employees, compared to the pre-pandemic staffing level of almost 5.4 million employees.

    Many highly-compensated employees fell off the rosters because they were offered early retirement packages or quit due to stressful conditions.

    Airline professionals such as pilots and flight attendants require extensive training; replacing them is therefore time-consuming and challenging, Ratliff said.

    Some people theorize that airlines fired large numbers of pilots for refusing to take the government- and airline-mandated COVID-19 inoculations.

    But industry sources doubt that. They say solid statistics are hard to come by. But they told The Epoch Times that many pilots remained employed because they either got the jab or avoided it via a religious exemption.

    Medical conditions are probably responsible for grounding more pilots than vaccine-mandate firings ever did, the sources said. They blame long-term illnesses, some possibly caused by side effects of the shots or consequences of COVID-19.

    In addition, the commercial aviation industry was already facing a pilot shortage several years before the pandemic. That’s because recruiting of pilots from the military, a primary feeder system for commercial airlines, has declined.

    Read more here…

    Tyler Durden
    Tue, 09/13/2022 – 18:10

  • "An Ocean Of Red…"
    “An Ocean Of Red…”

    What a shitshow!

    Everyone was so sure, so confident, and then boom, CPI printed way hotter than expected…

    …and the soft-landing dream was over…

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

    While markets turmoiled dramatically, it was the STIRs that highlight the major shift.

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

    The odds of a 100bps next week soared to 47%, the odds of a 75bps hike in November jumped to 60%, and the odds of a 100bps hike in December spike to 50%…

    Source: Bloomberg

    All of this sent rate-hike expectations for year-end massively higher (actually the biggest jump in history)… and at the same time saw the implied odds of that sparking a recession surge as expectations for subsequent rate-cuts jumped dramatically too…

    Source: Bloomberg

    The terminal rate for Fed rates is now just below 4.33% in April 2023…

    Source: Bloomberg

    All of which erased much of the last week’s squeeze-driven surge higher in stocks…The Dow has lost ALL of its gains from the last week’s squeeze…

    “Aaand it’s gone!”

    Nasdaq was the day’s biggest loser, down over 5% – its worst day since March 2020… The Dow’s 1200 point loss was the worst day since June 2020…

    For the first time since March 2020, every Nasdaq 100 stock closed red…

    One day after AAPL’s best day since May, it suffered its worst day since May…

    As the short squeeze of the last few days abruptly ended…

    Source: Bloomberg

    And all the US Majors crashed back below key technical levels (50DMAs)…

    Bonds were a bloodbath today with the short-end monkeyhammered most…

    Source: Bloomberg

    Which sent the yield curve dramatically flatter – with the infamous ‘last hope standing’ 3M10Y spread plunging towards inversion…

    Source: Bloomberg

    The dollar ripped higher, erasing much of the last few days’ ‘dovish’-hope weakness…

    Source: Bloomberg

    Cryptos were clubbed like a baby seal with Bitcoin puking from over $22500 to almost $20000 (down over 10% – its worst drop since the June collapse)…

    Source: Bloomberg

    Spot gold puked back below $1700 but found support there again…

    Source: Bloomberg

    But, after the Biden admin said it was mulling refilling the SPR, oil prices rallied and almost made it into positive territory on the day…

    Finally, it’s catch-down time for stocks once again as tightening expectations slam reality back into the hope-filled face of stocks…

    Source: Bloomberg

    And bear in mind that we have a $3.2 trillion options expiration on Friday just as the buyback blackout window is closing – brace!

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

    Tyler Durden
    Tue, 09/13/2022 – 18:00

  • Not Just Nancy: Lawmakers Have Been Trading Like Drunken Insider Sailors
    Not Just Nancy: Lawmakers Have Been Trading Like Drunken Insider Sailors

    Approximately 3,700 stock trades reported by 97 current lawmakers posed potential conflicts of interest, as their financial dealings intersected with the work of committees on which they serve, according to an extensive analysis by the New York Times of trades spanning a two year period (2019 – 2021).

    To examine the potential for conflicts, The Times used a comprehensive database called Capitol Trades, which was compiled from congressional trading disclosures by the German financial data firm 2iQ Research.

    The Times then matched the trades against committee assignments, hearings and investigations to construct a picture of how members’ congressional work and their personal financial transactions could potentially intersect. -NYT

    In just one example, Rep. Alan Lowenthal (D-CA) reported that his wife sold shares in Boeing on March 5, 2020, the day before a House committee on which he sits released a scathing report on the company’s handling of its 737 Max jet, which had been involved in two fatal crashes.

    Rep. Alan Lowenthal (D-Calif.), whose wife sold Boeing shares in March 2020 — just a day before a committee her husband sat on released a bombshell report.

    In another case, Ohio Republican Bob Gibbs, who sits on the House Oversight Committee, bought shares in pharmaceutical company AbbVie in 2020 and 2021 while the committee was investigating the company and five rivals over high drug prices.

    Outgoing GOP Rep. Bob Gibbs

    Democratic Rep. Ro Khanna of California’s filings show that his family members bought or sold shares in AbbVie during the committee’s review, as well as seven other companies under scrutiny by the oversight panel on which Khanna sat.

    According to the report, “many instances show how legislative work and investment decisions can overlap in ways that at a minimum can leave the appearance of a conflict and that sometimes form a troubling pattern — even if they technically fall within the rules.

    13 lawmakers were found to have traded in companies that were under investigation by committees they werved on.

    “The American people don’t want us day trading for profit, and engaging in active trading of the very equities that are connected to the policies that we are deciding on and voting on every day,” said Rep. Chip Roy (R-TX), who is co-sponsoring a bill in the House that would require members to put investments in a blind trust – a portfolio managed by an outside adviser who takes no input from the owner.

    The 3,700 potentially conflicted trades constitute over 10% of transactions by members of Congress over the period in question.

    44 of the 50 members of Congress who were most active in the markets bought or sold securities in companies over which their committee assignments could give them some degree of knowledge or influence. –NYT

    Under the 2012 STOCK Act – the sole piece of legislation designed to rein in lawmakers’ trades, most members of Congress are still allowed to make trades that could conflict with their legislative duties – as long as a disclosure is made within 45 days.

    “You’re not getting members of Congress to self-regulate the money they can or can’t make,” one DC insider told the NY Post. “Why would they do something that doesn’t benefit them?”

    Hilariously, Nancy Pelosi isn’t mentioned in the report, because she does not sit on any legislative committees.

    It’s good to be queen…

    Tyler Durden
    Tue, 09/13/2022 – 17:50

  • The Only Potential Benefit Of Central Bank Digital Currencies: Bitcoin Adoption
    The Only Potential Benefit Of Central Bank Digital Currencies: Bitcoin Adoption

    Authored by Pierre Gildenhuys via BitcoinMagazine.com,

    Central Bank Digital Currencies are a dystopian implementation of money and will only benefit society by encouraging people to adopt bitcoin…

    Central bank digital currencies (CBDCs) are being actively developed and discussed in many major nations in the world including 19 of the G20 countries, and around 105 others worldwide, as shown by Atlantic Council statistics in 2022. They are being advanced rapidly and it is expected that some nations such as Australia, South Korea and the U.S. will start implementing CBDCs in the near future, following the lead of China, who recently began launching theirs in early 2022.

    This is not recent news, but it is something which should be periodically mentioned, as it should scare all of us or at least be of some concern to anyone that utilizes any form of money in their daily lives. There is only one potential benefit to CBDCs: Essentially, governments causing the collapse of their own currencies by removing as many properties of money as they can before people realize that it is no longer salable to anyone else in their nation or around the world.

    CBDCs are said to be inspired by bitcoin — of course, these countries that are rolling these out are likely building them to be the perfect antithesis to the beautifully built bitcoin — with the only potential similarity being a distributed public ledger. However, I postulate that in many governments’ eyes, “a public ledger” denotes being owned, and therefore only accessible by the State because they are the voice of the people (in theory).

    The expected horrors of CBDCs are discussed at length by many Bitcoiners on Twitter and elsewhere, but very few that I have found have had anything good to say, which I would like to change.

    CBDCs will most likely implement primarily Keynesian principles, as it seems to be the prevailing school of economics in most of the western world. Whichever principles a United States CBDC adopts will likely serve as the blueprint for all others. Some of these principles could be money that can expire, be automatically taxed, only be spent in certain sectors and be a fully permission-based form of transaction, meaning that people will be forced to make specific transactions that they may not want, forcing a heightened time preference or being forced to forego investments in sectors of their choosing. Purchases of bitcoin using CBDCs will very likely become impossible or at least increasingly difficult, as no government wants a money competing with the one that they control.

    This is a terrifying prospect. How will Bitcoiners and new adopters acquire more bitcoin before the fiat system inflates itself into collapse? Well, this will possibly create a more circular economy, as fewer people will want to hold their transactional power in the form of a fully centralized and supervised system. They will very likely make the decision to start paying and accepting bitcoin for each and every transaction. This way, they are not forced to spend their money to attempt to “stimulate economic growth” by spending their expiring CBDCs that they would have otherwise saved for a rainy day, or to avoid additional unjust taxes. This is very similar to the exceedingly common practice of many businesses around the world providing their services at a discount for cash payments to avoid paying taxes on those services.

    This was particularly prevalent in places such as Greece, where the practice allegedly started because Greeks did not want to pay taxes to the “foreign” Ottomans who controlled the region at the time. The practice has evidently continued because people feel that an additional taxation on everyday transactions from any power, be it local or foreign, is unjust and excessive. In the eyes of some, this is a form of corruption; however, it should not be labeled as such because corruption implies that the people who are hiding these transactions are in positions of power that they are exploiting, as opposed to being the ones who are exploited by unnecessary taxation by their government.

    It is likely that CBDCs are likely going to phase out the small amount of paper currency that still forms part of world economies today. This means that these countries will rely on technological education and word of mouth explanations as to how it works. This will cause a rise in technological know-how in these nations, meaning it should be ever easier to onboard otherwise unwilling members of society to bitcoin once they realize the false value they are holding instead of a hard money.

    In other words, CBDCs will possibly be the perfect trigger to cause mass adoption and spark a bitcoin circular economy. At the end of the day, it does not matter how much one loves their government or opposes its very existence, the sheer inconvenience of having everyone’s transactions moderated and limited based on arbitrary metrics, such as carbon emission scores or nutritive value scores is enough to turn anyone away from that monetary medium.

    With peoples’ savings potentially being eaten away to promote faster and more spending overall — as has been done with the inflationary practices of the past several decades — people will realize how bad specific Keynesian principles are. These principles are promoted and considered true by many modern economists today. The average people in the modern world using those principles practically have to invest all of their wealth to ensure they are not bankrupted by inflation, while running the risk of potential malinvestments. Many people would be significantly more productive to society by developing their own businesses and would also be happier overall if they could just store their wealth in hard money that consistently appreciates in value with economic growth, instead of being forced to create the meme economy that we have experienced in the past few years. This would likely worsen with the implementation of CBDCs.

    CBDC implementation and adoption will likely not be an overnight change. The time that it would probably take for bitcoin adoption to occur would be heavily dependent on which terrifying features the specific CBDCs implement. These CBDCs will cause a great deal of pain and suffering over the time which they are actively used. The pain that they will bring and the practices they will implement aren’t anything new, but are simply a furthering of currently used practices. This will continue until people begin interacting pseudonymously using bitcoin for their store of wealth and move entirely away from any form of fiat currencies.

    Creating a vibrant, successful circular economy will hasten the adoption and incentive for usage of bitcoin. Harder money with higher salability needs to offer no better incentive for adoption than a rapidly failing currency due to a decline in salability and an increase in inflation. If no one wants your money, why do you keep it? Today, Zimbabwean dollars hold value only as collectors’ items, but have no use for goods and services. In turn, this allowed multiple competing currencies to take its place (primarily the South African rand and the U.S. dollar) until the dollar inevitably won and all of Zimbabwe became dollarized. The same will likely happen to the dollar, and bitcoin will take its place due to inflation and a likely CBDC which will detract all that is good from the dollar.

    There are many other steps that Bitcoin will need to take to allow simplistic adoption for the greater world population. More platforms and wallets will need to begin offering Lightning payments and the use of SMS (text message) transactions, such as the recent development in South Africa. The outlook is somewhat hopeful on the front of CBDCs and their ability to push more people out of fiat and into the world of Bitcoin.

    Tyler Durden
    Tue, 09/13/2022 – 17:30

Digest powered by RSS Digest