May 16

Today’s News 16th May 2022

  • European Natural Gas Prices To Triple In "Perfect Storm" 
    European Natural Gas Prices To Triple In “Perfect Storm” 

    A top commodity research firm in Norway warns a “perfect storm” is brewing as European energy security worsens following Russia’s invasion of Ukraine, which could result in the tripling of natural gas prices. 

    “There simply is not enough LNG around to meet demand. In the short term, this will make for a hard winter in Europe. 

    “For producers, it suggests the next LNG boom is here, but it will arrive too late to meet the sharp spike in demand. The stage is set for a sustained supply deficit, high prices, extreme volatility, bullish markets, and heightened LNG geopolitics,” Kaushal Ramesh, a senior analyst for Gas and LNG at Rystad Energy, wrote. 

    Rystad Energy said the EU has an “ambitious target to reduce dependence on Russian gas by 66% within this year – an aim that will clash with the EU’s goal of replenishing gas storage to 80% of capacity by 1 November.” 

    The firm said shunning Russian natgas from the continent destabilizes the entire global natgas market, which had a turbulent 2021 year-end with prices skyrocketing across Europe because of the lack of supplies. EU is currently reducing reliance on Russian natgas and has unveiled the possibility of banning Russian fossil fuels. This will only lead to more trouble for the EU, where prices could rise even higher.

    Learn more with Rystad Energy’s GasMarketCube.

    According to the report, 155 billion cubic meters of Russian natgas flowed into Europe in 2021, representing about 31% of the continent’s natgas supply. 

    “Replacing a significant portion of this will be exceedingly difficult, with far-reaching consequences for Europe’s population, economy, and for the role of gas in the region’s energy transition,” Rystad Energy noted.

    In one apocalyptic scenario, the energy firm cautioned about the severe economic implications if Russian natgas flows were immediately halted. They said it would come at a time when natgas stocks (only 35% full) would be depleted by the end of the year, resulting in a tripling of natgas prices from current levels to $100 per million British thermal units (MMBtu).

    Such a dramatic price move in natgas would have tremendous implications on the economy, such as “industrial curtailments,” Rystad Energy said, adding, “in an extreme scenario of a severely cold winter, not even the residential sector would be safe.” 

    EU officials have discussed for weeks a potential fossil fuels embargo on Russia. The eurozone is searching for alternative suppliers of both crude oil and natgas to wean itself off Russian energy. 

    Weaning Europe off Russian energy will only mean elevated energy prices are here to stay. Europe’s largest manufacturing hub, Germany, has warned of stagflation risks due to the conflict in Ukraine and resulting Western sanctions on Russian fossil fuels.

    EU’s ambitions to replace Russian fossil fuel dependence with another source will come at a cost that Rystad Energy warns could jeopardize the continent’s energy security. 

    Tyler Durden
    Mon, 05/16/2022 – 02:45

  • Russian Lawmaker Says Poland Next In Line For 'De-Nazification'
    Russian Lawmaker Says Poland Next In Line For ‘De-Nazification’

    Authored by Tom Ozimek via The Epoch Times,

    A Russian lawmaker has issued a fiery warning that Warsaw is next in line for “de-nazification” after Poland’s Prime Minister penned an op-ed calling Russia’s imperialist “Russkiy Mir” ideology a “cancer” consuming Russian society and a “deadly threat” to other countries.

    Oleg Morozov, chairman of Russia’s State Duma Committee on Control, wrote in a message on Telegram on Friday that the Polish leader’s comments have essentially made Poland a target.

    In his remarks, Morozov resorted to the Kremlin’s rhetoric in its military operation in Ukraine of so-called “de-Nazification,” a label Moscow has used to vilify its geopolitical adversaries and justify the war.

    “With its statements about Russia as a ‘cancer’ and about the ‘indemnity’ that we must pay to Ukraine, Poland encourages us to put it in first place in the queue for de-Nazification after Ukraine,” Morozov wrote, according to a translation of his statement.

    Morozov’s remarks were prompted by statements made by Polish Prime Minister Mateusz Morawiecki and Polish President Andrzej Duda, who have both been highly critical of Russia’s invasion of Ukraine.

    Duda has said Russia should be forced to pay compensation to Ukraine for war damages while Morawiecki said Russian President Vladimir Putin is “more dangerous” than both Adolf Hitler and Joseph Stalin because he has nuclear weapons and a massive propaganda machine at his disposal.

    Morawiecki wrote in a column in the British newspaper The Telegraph that “the cursed phantoms of the 20th century have risen again over Ukraine,” alleging that Russia’s invasion of its neighbor bears the hallmarks of fascism, “has already opened the gates to genocide,” and is driven by a “monstrous new ideology” that he called “Russkiy Mir.”

    Morawiecki alleged that in the name of this ideology, Putin and his military entourage have ordered Russian forces into war, “convinced them of their superiority, and encouraged them to commit inhuman war crimes—the murder, rape, and torture of innocent civilians.”

    “Putin’s ‘Russkiy Mir’ ideology is the equivalent of 20th-century communism and Nazism,” Morawiecki wrote, calling it a “cancer which is consuming not only the majority of Russian society, but also poses a deadly threat to the whole of Europe.”

    It’s not enough to help Ukraine fend off Russia’s attack, Morawiecki argued, “we must root out this monstrous new ideology entirely.”

    “Just as Germany was once subject to denazification, today the only chance for Russia and the civilised world is ‘deputinisation.’ If we do not engage in this task immediately, we will not only lose Ukraine, we will lose our soul and our freedom and sovereignty,” the Polish leader wrote.

    Morawiecki argued that, unless it is opposed, Russia will not stop at Kyiv but will continue on a “long march towards the West.”

    The Kremlin has denied it has any intentions of invading other countries. Putin has claimed that what he describes as a “special military operation” in Ukraine comes in response to attempts by Western powers to establish a bulwark in Ukraine that threatens Moscow’s security.

    In particular, Putin has long said that NATO is trying to expand its borders to pressure Russia militarily, claims the defensive alliance has rejected as unfounded.

    Another of the Kremlin’s key justifications for its operation in Ukraine has been to allege that the Russian-speaking population in the separatist-controlled Donbass and Luhansk region were being subjected to repression and what Putin has described as “genocide.”

    A long list of scholars and academics has denounced Russia’s claims of genocide and “de-Nazification” of Ukraine as a false pretext meant to justify “unprovoked aggression” against its southern neighbor.

    Tyler Durden
    Mon, 05/16/2022 – 02:00

  • Biden Push To Turn 'Ultra MAGA' Into Disparaging Epithet Came From 6-Month Study, Was Not 'Organic'
    Biden Push To Turn ‘Ultra MAGA’ Into Disparaging Epithet Came From 6-Month Study, Was Not ‘Organic’

    Authored by Sundance via The Conservative Treehouse,

    The Washington Post is reporting the shift from the White House to disparage their political opposition with the terms “MAGA”, “Ultra-MAGA” and President Trump as the “Great MAGA King,” came from a six-month poll study led by Anita Dunn, the latest senior advisor in the White House.

    Keep in mind, a few days ago White House spokesperson Jen Psaki said the terminology “ultra-MAGA” was an “organic utterance” from Joe Biden.  Whoops.

    WASHINGTON DC – […] Biden’s attempt to appropriate the “MAGA” brand as a political attack was hardly accidental.

    It arose from a six-month research project to find the best way to target Republicans, helmed by Biden adviser Anita Dunn and by the Center for American Progress Action Fund, a liberal group.

    The polling and focus group research by Hart Research and the Global Strategy Group found that “MAGA” was already viewed negatively by voters — more negatively than other phrases like “Trump Republicans.”

    In battleground areas, more than twice as many voters said they would be less likely to vote for someone called a “MAGA Republican” than would be more likely. The research also found that the description tapped into the broad agreement among voters that the Republican Party had become more extreme and power-hungry in recent years. (read more)

    On May 5th the White House announced Anita Dunn would return to the JoeBama administration as senior advisor.  Dunn’s specific expertise is using pressure, blackmail and political leverage to control information distribution by media organizations.  Apparently “ultra-MAGA” was Dunn’s first branding effort for the White House.

    The reappearance of Anita Dunn aligns with the expressed intent of the DHS ‘disinformation’ board.  Dunn’s professional political skillset surrounds being a paid media fixer.   She has done this for multiple democrat politicians including Obama.  It was Anita Dunn who used her position in the Biden campaign to demand that media stop allowing Rudy Guiliani to explain the Biden family ‘pay to play’ financial system of selling influence.

    Anita Dunn also advised Harvey Weinstein how to remove media stories of his Hollywood rape issues.  Dunn reappearing makes sense, as the U.S. government objective to control information is now in full swing.

    Last point.  The group that spearheaded the six month study, Hart Research, is the same outfit who does all the polling for NBC and CNBC. 

    Partisan much?  lol

    Ultra-MAGA

    Tyler Durden
    Sun, 05/15/2022 – 23:30

  • Visualizing The Science Behind Cultured Meat
    Visualizing The Science Behind Cultured Meat

    Cultured foods – also known as cell-based foods – are expected to turn our global food system as we know it on its head.

    In fact, the cultured meat market is estimated to reach an eye-watering $25 billion by 2030 according to McKinsey, but only if it can overcome hurdles such as price parity and consumer acceptance.

    To do so, significant innovation in the science behind these products will be crucial for the industry’s growth.

    In the graphic below from CULT Food Science, Visual Capitalist’s Katie Jones and Sabrina Lam provide a visual overview of some of the technologies behind the creation of cultured meat products.

    What is Cultured Meat?

    To start, cultured meat is defined as a genuine animal meat product that is created by cultivating animal cells in a controlled lab environment—eliminating the need to farm animals for food almost entirely.

    “Cultured meat has all the same fat, muscles, and tendons as any animal…All this can be done with little or no greenhouse gas emissions, aside from the electricity you need to power the land where the process is done.”

    – BILL GATES

    Because cultured meat is made of the same cell types and structure found in animal tissue, the sensory and nutritional profiles are like-for-like. Let’s dive into how these products are made.

    The Science and Technology Behind Cultured Meat

    The main challenge facing the cultured meat market is producing products at scale. But thanks to the vast amount of research in the stem cell biology space, the science behind cultured foods is not entirely new.

    Given that we are in the very early days of applying these learnings to producing food products, those looking to invest in companies contributing to the industry’s growth stand to benefit. Here is an overview of some of the technologies that underpin the industry that you should know:

    1. Bioprocess Design

    This is the process of using living cells and their components to create new products. According to experts like the Good Food Institute, bioprocess design holds the key to unlocking cultured meat production at scale.

    Specifically, innovation in bioreactor (where the cells grow) design represents a massive opportunity for companies and investors alike.

    2. Tissue Engineering

    Tissue engineering techniques are used to produce cultured meat that resembles real meat textures and flavors. The first step is taking tissue from the animal for the purpose of extracting stem cells and creating cell lines.

    The extracted stem cell lines are then cultivated in a nutrient rich environment, mimicking in-animal tissue growth and producing muscle fibers inside a bioreactor. The muscle fibers are processed and mixed with additional fats and ingredients to assemble the finished meat product.

    3. Cell Lines

    Cell lines refer to the different types of cells that can be propagated repeatedly and sometimes indefinitely.

    Access to cell lines is a major challenge facing the industry today and is an area that requires significantly more research. This is because there is not just one cell type that can be used in cellular agriculture to produce cultured food products.

    4. Cell Culture Media

    Cells (or cell cultures) require very specific environmental conditions. Cell culture media is a gel or liquid that contains the nutrients needed to support growth outside of the body.

    More research in this space is needed to determine optimized formulations and make these products more affordable.

    5. Scaffolding

    Scaffolds are 3D cell culture platforms that mimic the structure of complex biological tissues, such as skeletal muscle. This platforms can be created through the use of 3D Bioprinting.

    Scaffolds are predominantly made up of collagen and gelatin. The problem is these are both animal-derived ingredients which defeats the purpose of cell-based products. Therefore, more sustainable plant-derived options are also being explored.

    *  *  *

    Soylent Green, here we come?

    Tyler Durden
    Sun, 05/15/2022 – 23:00

  • China Economy Crashes Worse Than Expected Amid Covid Lockdowns
    China Economy Crashes Worse Than Expected Amid Covid Lockdowns

    Following Friday’s catastrophic new credit data, which saw the fewest new loans in half a decade, and after this morning’s report that Chinese authorities allowed a further cut in mortgage loan interest rates for first-time homebuyers in another push to prop up its property market and revive a flagging engine of the world’s second-largest economy, few expected any upside surprises from Monday’s economic data dump out of China, but even fewer expected anything quite as bad as what Beijing just reported.

    With Europe, UK and the US all on the verge of recession, China just boldly took the step to get there ahead of everyone, with Beijing reporting that China’s economy contracted sharply in April, as Covid outbreaks and lockdowns dragging the industrial and consumer sectors down to the weakest levels since early 2020 as millions of residents were confined to their homes and factories were forced to halt production, while the local unemployment rate soared to the 2nd highest level in modern history.

    Here are the details:

    • Industrial output fell 2.9% in April Y/Y, far worse than the median consensus estimate of a 0.5% increase, only the second monthly contraction since 1990 and the biggest drop on record!

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

    • Retail sales tumbled 11.1% , almost twice as worse as the consensus estimate 6.6% drop.
    • The unemployment rate climbed to 6.1%, higher than the forecast of 6%, and just shy of the 6.2% unemployment rate hit in Feb 2020 during the peak of the covid crisis.
    • Fixed Investment for the YTD period was the only silver lining, rising 6.8%, and while also missing the estimate of a 7.0%, it could have been far worse; the number was supported by the government’s push to expand infrastructure spending.

    If that wasn’t bad enough, here’s some even uglier data which confirms that the biggest driver of household wealth in China – housing – remains in a state of shock:

    • Home sales value -32.2% ytd y/y to 3.32 tln yuan
    • Home sales area falls 25.4% ytd y/y to 337m sqm
    • Property sales value -29.5% ytd y/y to 3.78 tln yuan
    • Property sales area falls 20.9% ytd y/y to 398m sqm
    • New property construction falls 26.3% ytd y/y to 397m sqm

    The good news is that the shockingly bad economic data is the direct result of Beijing’s Zero Covid policy, which has taken a huge economic toll from the government’s efforts to keep the virus at bay. Despite growing social outrage and anger, Beijing has insisted on sticking with its Covid Zero strategy to curb infections, even though the high transmissibility of omicron puts cities at greater risk of repeatedly locking down and reopening compared to earlier strains. We say “good” news because as the following chart shows, at this rate, Covid will soon no longer be a factor in China.

    “Covid outbreaks in April had a big impact on the economy, but the impact is short-term,” the National Bureau of Statistics said in a statement. “With progress in Covid controls and policies to stabilize the economy taking effect, the economy is likely to recover gradually.”

    While the latest collapse in credit was viewed by many as the trigger for more easing and rate cuts, monetary stimulus has proven less effective because of the stringent virus restrictions. Meanwhile, the PBOC left the interest rate on one-year policy loans unchanged on Monday, despite expectations by a growing number of economists that Beijing has no choice but to cut rates more, as inflation pressure and worries about capital outflows reduce the scope for more easing. 

    In kneejerk reaction to the latest dismal news out of China, US futures slumped to session lows, dropping below 3,990 after earlier rising as high as 4,042 with China’s benchmark CSI 300 stock index down 0.3% after earlier rising as much as 0.7%…

    … although the data was so bad it was actually good: after all, if China is indeed sliding into contraction, there is no way the Fed will be hiking 5, 6, 7 or more times in a time when the rest of the global economy is about to fall off a cliff, no matter how many times an angry, senile Joe Biden calls Powell.

    There was some more good news: as we hinted above, in the midst of all this terrible economic data out of China, Bloomberg blasted news that suggests China’s Covid plague may be on its way out:

    • Shanghai aims to fully resume normal orders of production and life by mid to late June by normalizing Covid control measures, Vice Mayor Zong Ming says at a briefing.
    • Shanghai will gradually resume rail transit and bus services from May 22, Zong says
    • There have been no community Covid spread in 15 of 16 districts in the city: Zong
    • Around 980,000 of the city’s total population of about 25 million remained under strictest lockdown, says Wu Jinglei, head of the city’s health commission

    Expect a full reversal of the session’s losses by the time US traders get to their desks in a few hours.

    Tyler Durden
    Sun, 05/15/2022 – 22:39

  • "The Price Is Wrong": Morgan Stanley Says Bear Market Won't Be Over Until One Of Two Things Happens
    “The Price Is Wrong”: Morgan Stanley Says Bear Market Won’t Be Over Until One Of Two Things Happens

    By Michael Wilson, Morgan Stanley’s head of US equity strategy

    In our 2022 year-ahead outlook for US equities, the primary out-of-consensus call centered on valuation. When we published it in mid-November, the price/earnings (P/E) multiple for the S&P 500 was 21.5x, a historical high ex the TMT bubble. However, the median P/E was actually higher than in the late 1990s. Furthermore, we believed at the time that earnings were well above trend and likely to revert over the next several years. If we were right, then valuations looked even more egregious. We argued that P/Es would fall toward 18x in our base case and 17x in our bear case as the Fed responded to 40-year highs in inflation – the “fire” in our scenario – while growth slowed from unsustainable levels – the “ice.”

    Fast forward to today, and it’s fair to say we have achieved our de-rating targets, with the S&P 500 now trading at 17x. However, all of the multiple contraction to date has resulted from the Fed’s very aggressive path on tightening and the subsequent rise in 10-year yields. So, while the P/E is now close to our original bear case and our current base case, the equity risk premium (ERP) is very close to where it was in November. In short, we believe the rates market fully reflects the fire part of our narrative. In fact, rates could have overshot to the upside by incorporating more hikes than the Fed may be able to deliver in this cycle, based on the significant damage to financial asset prices and the approaching slowdown that looks much worse than just a few months ago. This sharper downturn stems from the conflict in Ukraine, the Covid-zero policy in China, and the Fed’s action itself, which has led to a significant rise in the cost of capital, including a 65% increase in 30-year fixed mortgage rates.

    Turning back to the ERP, it has recently made some upward progress after the nearly inexplicable move to post-financial crisis lows over the past few months. We attribute that overshoot on the downside to Russia’s unexpected invasion of Ukraine and the extension of China’s Covid-zero policy, both of which accelerated the flight to safety by global equity investors and asset allocators. With the S&P 500 viewed as the most defensive and liquid equity market in the world, it attracted flows like a magnet.

    But over the last few weeks, it’s become clearer that our ice scenario is now playing out as well. For most of this year we have received strong pushback on our less bullish view on growth, until now. The change is due in part to the events noted above, but the real driver is 1Q earnings season.

    • First, while most companies handily beat consensus EPS forecasts, the bar had been lowered during the quarter more than usual.
    • Second, the ratio of negative to positive earnings revisions spiked.
    • Third, the quality of the earnings deteriorated as incremental operating margins rolled over for many companies and sectors, including many important large-cap technology stocks.
    • Finally, 2Q estimates for the S&P 500 came down while full-year estimates were unchanged.

    This effectively raises the bar for the second half of the year, which is about the time the economy will be feeling the effects of higher rates and other headwinds.

    Needless to say, earnings season raised some eyebrows among investors, and stocks sold off sharply in April – a seasonally strong month for equities. In the last week, P/Es contracted even further but this time due to the sharp rise in the ERP, while Treasury yields fell by less. This combination suggests the market’s focus has shifted to growth concerns – the ice – and quite frankly, it’s what we’ve been waiting for to call an end to this bear market.

    Unfortunately, while we think the equity market has adjusted for higher interest rates, we’re just not there yet with the ERP. At 300bp, ERP is well below our year-end 340bp target, and is underestimating earnings risk ahead. The question is will the equity market go ahead and discount the earnings cuts we think are coming or will it require companies to formally cut guidance? Given the pervasive bearishness now and extreme oversold conditions, we could see it play out either way.

    The bottom line is that this bear market will not be over until either valuations fall to levels (14-15x) that discount the kind of earnings cuts we envision, or earnings estimates get cut. However, with valuations now more attractive, equity markets so oversold and rates potentially stabilizing below 3%, stocks appear to have begun another material bear market rally. After that, we remain confident that lower prices are still ahead. In S&P 500 terms we think that level is close to 3,400, which is where both valuation and technical support lie.

    Full note available to professional subscribers.

    Tyler Durden
    Sun, 05/15/2022 – 22:30

  • The Pandemic-Fueled Bicycle Boom Is Losing Speed
    The Pandemic-Fueled Bicycle Boom Is Losing Speed

    When the COVID-19 pandemic hit the United States in March 2020, forcing gyms to shutter and public transportation to suspend operation, millions of Americans re-discovered bicycles as a safe, socially-distanced form of physical exercise and transportation. As Statista’s Felix Richter notes, the bike boom hit retailers unprepared, causing new bicycles to become a scarce commodity, exacerbated by the fact that global bicycle supply was also constrained due to Covid-19.

    According to inflation-adjusted figures published by the U.S. Bureau of Economic Analysis, Americans spent $7.0 billion on bicycles and accessories in 2020, up from $6.1 billion the year before. The trend continued in 2021, when consumer spending on bicycles and accessories reached almost $8 billion. Looking at seasonally adjusted quarterly figures, bicycle spending peaked in Q2 2021, when consumers bought bikes and equipment at an annual rate of $8.3 billion compared to pre-pandemic spending of around $6 billion per quarter.

    Starting in Q3 2021, when warmer weather and rising vaccination rates helped lower case counts and enable a return to normal life, bicycle spending started to decrease.

    Infographic: Pandemic-Fueled Bicycle Boom Is Losing Speed | Statista

    You will find more infographics at Statista

    However, at an annual rate of $7.5 billion, spending remains above pre-pandemic levels; fueling hopes that the industry could remain in a higher gear compared to pre-Covid days.

    Tyler Durden
    Sun, 05/15/2022 – 22:00

  • If You Thought The Coinbase Bankruptcy Disclosures Were Bad…
    If You Thought The Coinbase Bankruptcy Disclosures Were Bad…

    Authored by Mark Jeftovic via BombThrower.com,

    Just wait ’til you see your government’s bail-in rules

    One of the subplots that made for a bad week in crypto included a largely manufactured crisis around “The Coinbase bankruptcy disclosure”.  After posting an earnings miss, the next shoe to drop was the discovery in the latest version of the Coinbase Terms of Service, the addition of text that included the following:

    “Custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors”

    This verbiage became a big deal with every corporate media outlet dumping all over it. It trended on Twitter and quickly went viral, almost as if this was some sort of revelation.

    It’s not. It’s basically the oldest adage in crypto, “not your keys, not your coins” spelled out in writing.

    Do you really think if you’re holding your crypto on some exchange that suddenly becomes insolvent it’s going to make a difference if a paragraph to that effect appears in the ToS or not? Good thing Mt Gox or QuadrigaCX didn’t have a paragraph like that in their ToS otherwise everybody with assets in either exchange would have been really fscked, right?

    You’re fscked no matter what. At least Coinbase is calling your attention to it.

    Don’t hold your crypto on the exchange, any exchange, full stop. Even the largest crypto exchange CEOs will tell you that.

    But if you’re one of those people for whom this is something to be up in arms about, I’ve got news for you:

    Your governments have already laid claims to your savings

    If you’re reading this it means you’re probably living in a country where the same exact thing is written into your governing legislation with respect to all the money you have on deposit within the banking system (as covered in The Crypto Capitalist Manifesto)

    Remember back to 2013 with the Cyprus bail-in, which I always maintained was what put Bitcoin above $100 USD for the first time:

    The Cypriots had a portion of their savings accounts confiscated to re-capitalize their failing banking system. In March 2013 Eurogroup president Jeroen Dijsselbloem told interviewers that Cyprus would serve as a template for future bank restructurings in the euro zone.

    By April, the framework showed up in Canada, under then-Prime Minister Stephen Harper’s budget:

    “The Government proposes to implement a bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital”

    If you haven’t figured it out by now, “certain bank liabilities” are your savings.

    The language was preserved in subsequent budgets, even after 2015 when Justin Trudeau came to power. His government made it permanent in 2018 with The Bank Recapitalization (Bail-in) Conversion Regulations.

    This wasn’t unique to Canada.

    In 2017 Australia did it with the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill:

    “The TLAC standard builds on a significant body of international regulatory reform already undertaken by the Financial Stability Board to improve resolution frameworks for globally significant financial institutions. In particular, it builds on the Key Attributes which specifies that Financial Stability Board jurisdictions should have in place legally enforceable mechanisms to implement a ‘bail-in’. (emphasis in original)”

    In the US, provisions for depositor bail-ins existed even before Cyprus, with the “Statutory Bail-Ins” provisions in the 2010 Dodd-Frank bill.

    The fact is, if you’re living in any of the largest economies globally, then your country is party to a supra-national agreement on “flexible bank bail-in bonds” put in place at the G-20 Brisbane Summit in 2014.

    So while you have the ability to choose not to do business with Coinbase (or better, properly custody your digital assets), your country has already granted itself the same ability to bail-in your fiat savings a long time ago, and it isn’t voluntary.

    It’s the one issue that is completely bipartisan and duly ossified into the law of the land. From loose canon populists to far-left Marxist ideologues,  nobody within the corridors or power is talking about getting rid of the government’s authority to confiscate your savings to recapitalize a failing banking system. When this thing blows up subject to the inexorable outcome of their own failed policies and under its own warped incentives, there won’t be any quibbling over it, it’s the law.

    “Hell yeah, we’ll take your savings.”

    Given the behaviour of  governments just this year alone, where

    Two things become apparent:

    • First, we’re in an age where your assets and savings are considered fair game for everybody else, either as guilt-by-association with somebody else’s political ideology, or as retaliation for government actions you had no involvement with.

    • Second,  seen from this perspective, it’s either ironic or (more likely) disingenuous that the corporate media is feigning shock over Coinbase.

    Holding a portion of your wealth in Bitcoin and properly custodying it solves both problems.

    *  *  *

    Disclosure: Long COIN (screaming buy at these levels).

    Today’s post was an excerpt from the The Crypto-Capitalist Mid-Month Portfolio Review, were we cover the global  transition to decentralization, the inevitability of hyper-Bitcoinization with a tactical focus on publicly traded crypto stocks: currently one of the fattest pitches in value investing going. 

    Get the overall investment thesis free here, follow me on Getter or on Twitter.

    Tyler Durden
    Sun, 05/15/2022 – 21:30

  • The 10 Largest Nuclear Explosions Ever, Visualized
    The 10 Largest Nuclear Explosions Ever, Visualized

    Just how powerful are nuclear explosions?

    The U.S.’ Trinity test in 1945, the first-ever nuclear detonation, released around 19 kilotons of explosive energy. The explosion instantly vaporized the tower it stood on and turned the surrounding sand into green glass, before sending a powerful heatwave across the desert.

    As the Cold War escalated in the years after WWII, the U.S. and the Soviet Union tested bombs that were at least 500 times greater in explosive power. In the infographic below, Visual Capitalist’s Mark Belan and Govind Bhutada compare the 10 largest nuclear explosions in history.

    The Anatomy of a Nuclear Explosion

    After exploding, nuclear bombs create giant fireballs that generate a blinding flash and a searing heatwave. The fireball engulfs the surrounding air, getting larger as it rises like a hot air balloon.

    As the fireball and heated air rise, they are flattened by cooler, denser air high up in the atmosphere, creating the mushroom “cap” structure. At the base of the cloud, the fireball causes physical destruction by sending a shockwave moving outwards at thousands of miles an hour.

    A strong updraft of air and dirt particles through the center of the cloud forms the “stem” of the mushroom cloud. In most atomic explosions, changing atmospheric pressure and water condensation create rings that surround the cloud, also known as Wilson clouds.

    Over time, the mushroom cloud dissipates. However, it leaves behind radioactive fallout in the form of nuclear particles, debris, dust, and ash, causing lasting damage to the local environment. Because the particles are lightweight, global wind patterns often distribute them far beyond the place of detonation.

    With this context in mind, here’s a look at the 10 largest nuclear explosions.

    #10: Ivy Mike (1952)

    In 1952, the U.S. detonated the Mike device—the first-ever hydrogen bomb—as part of Operation Ivy. Hydrogen bombs rely on nuclear fusion to amplify their explosions, producing much more explosive energy than atomic bombs that use nuclear fission.

    Weighing 140,000 pounds (63,500kg), the Ivy Mike test generated a yield of 10,400 kilotons, equivalent to the explosive power of 10.4 million tons of TNT. The explosion was 700 times more powerful than Little Boy, the bomb dropped on Hiroshima in 1945.

    #9: Castle Romeo (1954)

    Castle Romeo was part of the Operation Castle series of U.S. nuclear tests taking place on the Marshall Islands. Shockingly, the U.S. was running out of islands to conduct tests, making Romeo the first-ever test conducted on a barge in the ocean.

    At 11,000 kilotons, the test produced more than double its predicted explosive energy of 4,000 kilotons. Its fireball, as seen below, is one of the most iconic images ever captured of a nuclear explosion.

    #8: Soviet Test #123 (1961)

    Test #123 was one of the 57 tests conducted by the Soviet Union in 1961. Most of these tests were conducted on the Novaya Zemlya archipelago in Northwestern Russia. The bomb yielded 12,500 kilotons of explosive energy, enough to vaporize everything within a 2.1 mile (3.5km) radius.

    #7: Castle Yankee (1954)

    Castle Yankee was the fifth test in Operation Castle. The explosion marked the second-most powerful nuclear test by the U.S.

    It yielded 13,500 kilotons, much higher than the predicted yield of up to 10,000 kilotons. Within four days of the blast, its fallout reached Mexico City, roughly 7,100 miles (11,400km) away.

    #6: Castle Bravo (1954)

    Castle Bravo, the first of the Castle Operation series, accidentally became the most powerful nuclear bomb tested by the U.S.

    Due to a design error, the explosive energy from the bomb reached 15,000 kilotons, two and a half times what was expected. The mushroom cloud climbed up to roughly 25 miles (40km).

    As a result of the test, an area of 7,000 square miles was contaminated, and inhabitants of nearby atolls were exposed to high levels of radioactive fallout. Traces of the blast were found in Australia, India, Japan, and Europe.

    #5, #4, #3: Soviet Tests #173, #174, #147 (1962)

    In 1962, the Soviet Union conducted 78 nuclear tests, three of which produced the fifth, fourth, and third-most powerful explosions in history. Tests #173, #174, and #147 each yielded around 20,000 kilotons. Due to the absolute secrecy of these tests, no photos or videos have been released.

    #2: Soviet Test #219 (1962)

    Test #219 was an atmospheric nuclear test carried out using an intercontinental ballistic missile (ICBM), with the bomb exploding at a height of 2.3 miles (3.8km) above sea level. It was the second-most powerful nuclear explosion, with a yield of 24,200 kilotons and a destructive radius of ~25 miles (41km).

    #1: Tsar Bomba (1961)

    Tsar Bomba, also called Big Ivan, needed a specially designed plane because it was too heavy to carry on conventional aircraft. The bomb was attached to a giant parachute to give the plane time to fly away.

    The explosion, yielding 50,000 kilotons, obliterated an abandoned village 34 miles (55km) away and generated a 5.0-5.25 magnitude earthquake in the surrounding region. Initially, it was designed as a 100,000 kiloton bomb, but its yield was cut to half its potential by the Soviet Union. Tsar Bomba’s mushroom cloud breached through the stratosphere to reach a height of over 37 miles (60km), roughly six times the flying height of commercial aircraft.

    The two bombs dropped on Hiroshima and Nagasaki had devastating consequences, and their explosive yields were only a fraction of the 10 largest explosions. The power of modern nuclear weapons makes their scale of destruction truly unfathomable, and as history suggests, the outcomes can be unpredictable.

    Tyler Durden
    Sun, 05/15/2022 – 21:00

  • Buffalo Mass Shooter Cites "Great Replacement Theory" & NY's "Heavy Gun Laws" In Manifesto
    Buffalo Mass Shooter Cites “Great Replacement Theory” & NY’s “Heavy Gun Laws” In Manifesto

    Payton S. Gendron, 18, was arraigned before Buffalo City Court Judge Craig Hannah on a first-degree murder charge on Saturday evening for killing ten people at a Buffalo, New York, supermarket, according to The Buffalo News. 

    Gendron pleaded not guilty and was revoked bail while awaiting the next court appearance at 0930 ET Thursday. The 18yo white male told the judge, “I understand my charges.”

    Local, state, and federal authorities say they’re investigating the mass shooting as a racially motivated hate crime. Police said eleven of the 13 shooting victims at the Tops Friendly Market are Black. 

    Erie County Sheriff John Garcia said Gendron’s attack on the supermarket was “pure evil.” Erie County District Attorney John J. Flynn said investigators had found evidence showing “racial animosity” was behind the shooting. The FBI is also investigating the incident as an act of racially-motivated violent extremism. 

    According to NYTimes, investigators were examining a “manifesto” believed to have been written by Gendron that was posted online.  

    The front page of Gendron’s 180-page manifesto.  

    Searching through the 180-page hate-filled manifesto, the 18yo writes about the risk of white Americans being replaced by people of color, also known as the “replacement theory.” 

    A senior law enforcement official told NBC News they are aware of the manifesto allegedly written by the suspect, and we’re working to confirm that he is the author.

    In the uncorroborated manifesto (circulating the internet), Gendron says he was radicalized on 4chan at the beginning of the virus pandemic in early 2020. The document’s layout is similar to Brenton Tarrant, the white supremacist mass shooter who killed 51 people and injured 40 others in a New Zealand mosque in 2019. 

    Gendron appears to have copy and pasted Tarrant’s manifesto. 

    Here’s another example of the copy and pasting. 

    Within the text, Gendron purportedly describes himself as “… a populist. But you can call me an ethno-nationalist eco-fascist national socialist if you want.” 

    Gendron says he planned the shooting based on the “highest percentage and high density of blacks” that can be found near him. 

    Additionally, as The Epoch Times’ Jack Phillips notes, the alleged manifesto suggests that the shooter chose Buffalo, NY because of its stringent gun laws:

    New York state, the author said, “has heavy gun laws so it would ease me if I knew that any legally armed civilian was limited to 10 round magazines or cucked firearms,” likely referring to New York laws restricting magazines to only 10 rounds and laws that limit the purchase of certain types of semi-automatic rifles. New York state residents also need to obtain a permit, which can take months if not years, to buy a pistol under the provisions of the SAFE Act.

    “Won’t your attack result in calls for the removal of gun rights in the United States?” the author rhetorically asked himself.

    “Yes, that is the plan all along, you said you would fight to protect your rights and the constitution, soon will come the time.”

    “NY has cucked gun laws. Assault style weapons and high capacity magazines are illegal for civilians to own, thus lowering threats from law-abiding civilians,” the individual wrote, adding that he obtained a Bushmaster XM-15.

    “Since I live in New York, I had to buy a cucked version of this before illegally modifying it,” he said.

    Aside from the manifesto that investigators are still combing through to confirm authenticity, The Buffalo News said police in 2021 were notified when Gendron threatened violence to others at his local high school. 

    “A school official reported that this very troubled young man had made statements indicating that he wanted to do a shooting, either at a graduation ceremony, or sometime after,” a law enforcement official familiar with the case told the local paper. 

    At the time, NY State Police investigated Gendron under the section of state mental health laws, and he was referred for a mental health evaluation. 

    The Biden administration responded to the mass shooting, saying, “A racially motivated hate crime is abhorrent to the very fabric of this nation. Any act of domestic terrorism, including an act perpetrated in the name of a repugnant white nationalist ideology, is antithetical to everything we stand for in America. Hate must have no safe harbor. We must do everything in our power to end hate-fueled domestic terrorism.” 

    Investigators told the NYPost they believe the manifesto is “authentic,” though police are still waiting to analyze Gendron’s computer for confirmation. 

    Tyler Durden
    Sun, 05/15/2022 – 20:55

  • Wheat Prices Soar As India Restricts Exports
    Wheat Prices Soar As India Restricts Exports

    Update (Sunday): Wheat futures in Chicago jumped 5.9% to $12.47 a bushel Sunday evening after India restricted wheat exports to preserve its food security. Since the beginning of May, prices have skyrocketed nearly 20%. 

    India’s decision to halt wheat exports was announced on Friday. The government said it must safeguard domestic supplies amid heat waves that threaten crop yields. 

    “Directing the wheat exports through government channels would not only ensure fulfilling the genuine needs of our neighbors and food-deficit countries, but also control inflationary expectations,” India’s food ministry said in a statement. 

    A grains analyst at Melbourne-based Thomas Elder Markets, Andrew Whitelaw, told Bloomberg, “if this ban occurred in a normal year, the impact would be minimal, but the loss of Ukraine volumes exacerbates the issues.” 

    The jump in wheat futures underlines just how tight global supplies are following top-producer Ukraine being knocked offline because of the war. Higher wheat prices will continue to drive food inflation. 

    * * *

    India prohibited wheat exports effective immediately, saying the nation’s food security was under threat, partly due to heatwaves that damaged yields in the country and disruptions to global grain markets in the Black Sea breadbasket region. 

    The notice was published in the government gazette by the Directorate of Foreign Trade on Friday. It read, “there is a sudden spike in the global food prices of wheat arising out of many factors, as a result of which the food security of India, neighboring and other vulnerable countries is at risk.”

    India said it was still committed to exporting wheat to “neighboring and other vulnerable developing countries which are adversely affected by the sudden changes in the global market for wheat and are unable to access adequate wheat supplies.”

    The move by the world’s second-largest wheat producer comes as food protectionism runs rampant worldwide as countries limit or restrict exports of food staples to rein in domestic prices. 

    Wheat futures are expected to jump Sunday evening and add to record-high food inflation, crushing emerging market economies the hardest. High food prices have already resulted in inflation riots in several countries, one being the ongoing social instability unfolding in Sir Lanka. 

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

    The ban comes as no surprise considering India has been mulling trade restrictions this month as heatwaves have damaged wheat yields.

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

    Wheat production this year in the South Asian nation is expected to decline after rising for a half-decade. Other top-producing wheat countries will experience production drops by the end of the growing season and may exacerbate the fall in global wheat production. 

    “We now have an environment with another supplier removed from contention in global trade flows,” Andrew Whitelaw, a grains analyst at Melbourne-based Thomas Elder Markets, told Bloomberg. “The world is starting to get very short of wheat,” he added. 

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

    A Mumbai-based commodity dealer with a global trading firm told Reuters the ban is “shocking.” The trader added: “We were expecting curbs on exports after 2-3 months, but seems inflation numbers changed the government’s mind.”

    Add protectionism to the list of what could spark even more chaos for global food markets. If countries continue to place export restrictions on food, the crisis could deepen.

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

    Tyler Durden
    Sun, 05/15/2022 – 20:46

  • Musk Warns Twitter Users Are "Being Manipulated", Company's Legal Team Reaches Out
    Musk Warns Twitter Users Are “Being Manipulated”, Company’s Legal Team Reaches Out

    Authored by Jack Phillips via The Epoch Times,

    Elon Musk warned Twitter users that they are “being manipulated” and told them to turn off the platform’s algorithmic newsfeed, coming as the firm’s legal department apparently said he committed a violation of a non-disclosure agreement.

    “You are being manipulated by the algorithm in ways you do not realize … Easy to switch back and forth to see the difference,” Musk wrote on Twitter. The Tesla CEO advised other users to switch to seeing the latest Twitter posts immediately by tapping the Twitter home button, tapping the stars button on the upper right of the screen, and selecting “latest tweets.”

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

    “I am not suggesting malice in the algorithm, but rather that it is trying to guess what you might want to read and, in doing so, inadvertently manipulate/ amplify your viewpoints without you realizing this is happening,” Musk continued in another post.

    Musk announced his intentions to purchase Twitter on April 25 as he criticized the firm’s content moderation policies. Both he and Twitter said that Musk would attempt to purchase the firm for $44 billion, allowing him to take the platform private after the purchase.

    But on May 13, the deal appeared to be on thin ice after Musk posted that the agreement was “on hold” after reports said that bots and automated accounts make up fewer than 5 percent of the overall users. Hours later, Musk confirmed that he is still committed to the purchase.

    “Twitter (TWTR) legal just called to complain that I violated their NDA by revealing the bot check sample size is 100!” the billionaire wrote on Saturday, referring to a study on bots.

    Musk posted early Sunday that he’s not seen any analysis that suggests that bots comprise fewer than 5 percent of Twitter accounts.

    He later said that “there is some chance it might be over 90 percent of daily active users.”

    Meanwhile, Musk confirmed last week that he would allow President Donald Trump to return to Twitter after the deal is finished, although Trump has said he wouldn’t return to Twitter because he wants to stay on his Truth Social venture.

    “I am not going on Twitter, I am going to stay on Truth,” Trump told Fox News in April. “I hope Elon buys Twitter because he’ll make improvements to it, and he is a good man, but I am going to be staying on Truth.”

    Tyler Durden
    Sun, 05/15/2022 – 20:35

  • One Step Closer To Recession: Goldman Cuts S&P Price Target To 4,300; Slashes GDP Forecast
    One Step Closer To Recession: Goldman Cuts S&P Price Target To 4,300; Slashes GDP Forecast

    It took Goldman three months to slash its (widely mocked) 2022 year-end S&P price target of 5,100 published in mid-November (at the time we said it would take just a few months for the target to be cut and we were right) to 4,900 in mid-February. Back then Goldman’s chief strategist David Kostin listed three scenarios, the third and most bearish of which was that if the US economy tips into a recession, “the typical 24% recession peak-to-trough price decline would reduce the S&P 500 to 3600″ to which we said that’s what would happen “but before we get there expect another 200 point S&P target in one month, and then another, and then another.”

    One month later, this is precisely what happened, when in mid-March Goldman’s David Kostin again cut his year-end price target to 4,700 (from 4.900), but more importantly, Kostin grudgingly raised the odds of a recession writing that “the current S&P 500 index level of 4260 suggests roughly a 40% likelihood of a downside recessionary case.” He then noted that in such a “recession” scenario, the bank expects reduced earnings and valuation multiples would cause the S&P 500 to decline by 15% to 3600, similar to the 24% drop he had warned previously (Goldman also noted that this represents a 15% drop from current levels and is probably sufficient to trigger the Fed’s put).

    So fast forward another two months, when our prediction that Goldman would continue to slash its S&P price target by 200 points every month or so was spot on again, because as of this weekend, two months after Goldman cut its S&P target to 4,700, the bank’s chief equity strategist has just published his latest forecast (full note available to professional subscribers), taking down the bank’s price target to 4,300 (or 200 points per month for two months); as a reminder this was 5,100 just three months ago!

    How does Kostin explain this dramatic reversal in his original cheerful forecast, which apparently could not anticipate any of the things that took place in the past few months? Here’s how:

    We revise our forecasts for earnings, interest rates, and the yield gap. We lower our S&P 500 year-end 2022 price target to 4300 (from 4700). Our new price target represents a 7% return from today. Our 3-month forecast equals 4000, with expected gains likely coming later in the year.

    Finally admitting what we have been saying all along, Kostin concedes that “much higher equity prices in the near-term would ease financial conditions and be antithetical to the Fed’s goal of slowing economic growth”, in other words, every time stocks jumped it would only prompt Powell to come out with even stronger hawkish jawboning .

    That said, while Goldman expects an overshoot to 4,000 in the near-term (or undershoot since the S&P dropped as low as 3,855 on Thursday, touching the edge of a bear market), the bank remains somewhat hopeful that the worst is now behind us and “a contraction in economic growth is priced in equities and our baseline forecast suggests the worst of the decline is likely behind us assuming a recession is averted.” Kostin also assumes that as the year progresses “investors will gain confidence about decelerating inflation, the path of Fed tightening, and recession risk, and equities will rise modestly driven by EPS growth.”

    Kostin then breaks down the revision in his forecast by factoring in for a stronger than expected Q1 earnings, offset by everything else deteriorating:

    1Q earnings season was better-than-feared. Consensus expected +5% year/year growth in S&P 500 EPS, but firms realized +11%. Both sales and margins posted positive surprises. Analyst revisions to 2022 and 2023 have been slightly positive, mostly driven by Energy. We raise our 2022 S&P 500 top-down EPS growth forecast to +8% (vs. +5% previously). We maintain our 2023 EPS growth forecast of +6%. Our revised S&P 500 EPS estimates equal $226 and $239. Faster sales growth and better-than-feared Financials earnings are the primary drivers of our revision. Our net margin forecast remains unchanged. We expect margins will rise by 11 bp to 12.3% in 2022. However, excluding Energy, we forecast net profit margins will contract by 22 bp as input cost pressures weigh on companies.

    Our sales, margin, and earnings forecasts remain below bottom-up consensus. Our economists’ 2022 real US GDP growth forecast is below-consensus and China’s zero COVID policy poses a clear downside risk to EPS growth. From a revenue perspective, we expect the headwind from a stronger trade-weighted dollar will need to be incorporated into analyst models. Investors have already started to reflect this risk; our domestic sales basket (GSTHAINT) has outperformed our international sales basket (GSTHINTL) by 10 pp YTD. While quarterly net profit margins have slipped modestly from their peak in 2Q 2021 to 12.1% in 1Q 2022, consensus expects an expansion during in 2H 2022, which appears too optimistic in our view. However, we believe it will take time for analysts to trim their forecasts closer to our top-down estimate. Our S&P 500 valuation and index forecasts assume that market participants price the index at year-end 2022 based on the consensus 2023E estimate of $250.

    Higher interest rates. Our Rates strategists now expect the nominal 10-year US Treasury yield to rise to 3.3% at year-end 2022 (vs. 2.7% previously) driven by real yields. We assume real yields will end 2022 at 0.5% (vs. 0% previously).

    Our forecast is that the P/E remains unchanged from today at 17x. Previously, we assumed the low real rate environment would support a P/E of 20x, 10% below the valuation at start of the year. But YTD the market has priced the equivalent of 8 additional 25 bp Fed hikes and real rates have risen sharply. During the last 8 weeks real rates have surged from -1.0% to +0.2%. Our revised outlook of lower growth and higher rates no longer supports meaningful P/E expansion. Our new P/E multiple forecast ranks in the 70th historical percentile and is consistent with pre-pandemic multiples, but below the past cycle’s peak of 18x in 2018. In our baseline, the relative valuation of stocks vs. real rates would rank in the 46th percentile vs history.

    Lower yield gap. We expect the gap between the S&P 500 EPS yield and real 10-year US Treasury yield will narrow modestly to 530 bp (vs. 560 bp today). This yield gap would match the level experienced in April 2021 but remain above the average since 1990. We model the yield gap as a function of economic growth, policy uncertainty, the size of the Fed balance sheet, and consumer confidence. By the end of the year, our baseline assumes a slight improvement in growth expectations relative to the pessimistic outlook currently priced by cyclical vs. defensive industries. Valuation will benefit from reduced policy uncertainty and higher consumer confidence. These positive dynamics should more than offset the headwind from tightening financial conditions and allow the earnings yield gap to compress.

    While Kostin tries to sound hopeful, the reality is that for the third time in a row the Goldman chief strategist not accidentally brings up that in a “downside” scenario, “a recession would push the S&P 500 11% lower to 3600”, which is just slightly above the level Morgan Stanley expects stocks drop to in this bear market before they reverse. However, in a novel twist, today for the first time Kostin admits that if by year-end the economy is poised to enter a recession in 2023, “a combination of reduced EPS estimates and a wider yield gap would drive a lower index level” suggesting that the S&P may slide well below 3,600:

    Earnings typically fall by 13% from peak-to-trough during recessions. However, equity prices move ahead of earnings. We assume by year-end the current 2023 EPS estimate of $250 would be cut by 7%, consistent with history. Our macro model implies the yield gap widens to 700 bp and the P/E multiple narrows to 15x.

    Translation: just above 3,400.

    In another downside scenario, Kostin writes that while the economy may avoid recession, real rates could continue to march higher, which would lead to a lower valuation multiple pushing the S&P 500 index down by 6% to 3800. In this scenario, if the Fed is forced to hike by more than Goldman economists expect and real rates rise to 1% – similar to the peak reached during the last cycle in 2018 – Goldman’s macro model suggests that higher rates will more than offset the lower yield gap. In this scenario, the forward P/E would equal 16x, the lowest level since 2020.

    Bottom line: Goldman has thrown in the towel and the bank which in early February expected stocks to hit 5,100 now says don’t be surprise if they drop to 3,400. And that’s why the David Kostins of the world get paid the big bucks.

    But wait, there more…

    In another confirmation of our skepticism, Goldman’s chief economist Jan Hatzius published a note on Sunday in which he again cut his overly optimistic GDP forecast (having done so most recently in March), and now expects GDP growth as follows:

    • Q2 ’22 to 2.5% from 1.5%
    • Q3 ’22 to 2.25% from 2.5%
    • Q4 ’22 to 1.5% from 2.5%
    • Q1 ’23 to 1.25%
    • Q2 ’23 to 1.5%
    • Q3 ’23 to 1.5%
    • Q4 ’23 to 1.5%

    And visually:

    These changes imply a downgrade in 2022 GDP growth to +2.4% on an annual basis (vs. +2.6% previously) and to +1¼% on a Q4/Q4 basis (vs. 1.6%), and a downgrade in 2023 growth to +1.6% on an annual basis (vs. +2.2%) and to +1½% on a Q4/Q4 basis (vs. +2.0%). In other words, just as we said in March, the hockeystick forecast that Goldman laughably presented two months ago has not only flattened but has inverted.

    Of course, Goldman has refused to forecast a recession (yet), and instead frames the continuing slowdown (as a reminder Goldman was nowhere near the -1.4% Q1 GDP print), as a “necessary growth slowdown.” According to Goldman, the slowdown is a byproduct of the Fed’s tightening in financial conditions, and the bank thinks the rate hikes that are currently priced into financial  conditions “are in the ballpark of what is ultimately needed to restore balance to the labor market and cool wage and price pressures. We therefore expect that the recent tightening in financial conditions will persist, in part because we think the Fed will deliver on what is priced.”

    That said, not even Goldman is confident that a slowdown won’t push the economy into recession, and cautions that job openings remains “extremely high (+4.5mn vs. pre-pandemic level; right chart, Exhibit 1) and less likely to moderate on their own. And the jobs-workers gap probably cannot meaningfully narrow without a moderation in job openings, and wage growth probably cannot settle back to a sustainable level while the jobs-workers gap remains very elevated. Therefore, the main challenge for the FOMC as it attempts to lower inflation is to convince companies to shelve some of their expansion plans and close enough job openings to restore balance to the labor market, a view Chair Powell endorsed at the May FOMC press conference.”

    It’s not just GDP that will get hit: the labor market will too. As the bank concludes in its downward revision, while the slowdown in growth should help lower job openings, “it is also likely to raise the unemployment rate a bit, particularly since the job openings rate
    typically only falls when unemployment spikes in recessions.” Of course, Goldman remains optimistic “that a sharp rise in the unemployment rate can be avoided, especially since typically the job openings rate declines more and the unemployment rate increases less when the job openings rate is very elevated, like it is today.”

    Although we continue to expect that momentum in job gains will push then unemployment rate to a low of 3.4% in the next few months, we now expect that the unemployment rate will subsequently rise back to 3.5% at end-2022, and rise further to 3.7% at end-2023.

    And since Goldman has been always wrong in its economic forecasts in the past year (just see the bank’s horrific CPI predictions) here is our translation of the above: expect the labor market to soon enter freefall, one which will force the Fed to not only reverse its tightening and QT plans, but to go straight from rate cuts to NIRP and back to QE again.

    And just to confirm that a recession is now inevitable (as is the obvious Fed response) none other than the former boss of both Kostin and Hatzius, former Goldman CEO Lloyd Blankfein, spoke on CBS’s “Face the Nation” on Sunday, and urged companies and consumers to gird for a US recession, saying it’s a “very, very high risk.”  

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

    “If I were running a big company, I would be very prepared for it. If I was a consumer, I’d be prepared for it.” A recession is “not baked in the cake” and there’s a “narrow path” to avoid it, said the CEO who lost his job after infamously enabling Obama golfing buddy, former Malaysia PM Najib Razak, to loot billions from 1MDB.

    Blankfein noted that while some of the inflation “will go away” as supply chains unsnarl and Covid-19 lockdowns in China ease, “some of these things are a little bit stickier, like energy prices.”

    “How comfortable are we now to rely on those supply chains that are not within the borders of the United States and we can’t control?” Blankfein said. “Do we feel good about getting all our semiconductors from Taiwan, which is again, an object of China.”

    Bottom line: the question is not if but when the next recession hits, and not if but when the Fed responds with aggressive rates cuts and QE.

    The full Goldman notes are available to professional subs in the usual place.

    Tyler Durden
    Sun, 05/15/2022 – 20:10

  • Hedge Fund CIO: In Markets, The Strongest Gravitational Force Is Produced By Stop-Losses Imposed By Leverage
    Hedge Fund CIO: In Markets, The Strongest Gravitational Force Is Produced By Stop-Losses Imposed By Leverage

    By Eric Peters, CIO of One River Asset Management

    “We are peering into the curved spacetime near a supermassive black hole,” said Michael Johnson, researcher at the Harvard-Smithsonian Center for Astrophysics, marveling at the image. “And it is teeming with activity, always burbling with turbulent energy and occasionally erupting into bright flares of emission,” added Johnson, standing tall on our little planet, 27,000 light years (159,300 trillion miles) from Sagittarius A*.

    At this vast distance, we travel through space at 140 miles per second, rotating around the supermassive black hole at our Milky Way’s center. Nearer objects move faster. Stars closest to Sagittarius A* travel at 141,000 miles per second. The plasma surrounding the black hole’s event horizon orbits at 190,000 miles per second, superheats to a trillion degrees, then disappears. Within our galaxy, gravity wins, eventually, always. Or so it seems. Time will tell.

    Unlike heavenly bodies, financial markets are our creation, and as such, they are just as much a part of nature as are we, which is to say indistinguishable. In financial markets, the strongest known gravitational force is produced by the presence of stop-losses imposed by leverage. The larger the stop, the greater the pull.

    The natural force at play is easy to understand. As the aggregate position size grows too large relative to its ability to withstand a capital loss, the market is drawn toward the price that forces liquidation. As prices approach that level, the process accelerates, the temperature rises.

    Along that path, the combination of counterparties demanding more margin, nervous longs liquidating, and short sellers pressing positions produces an outcome all but inevitable. We see this repeatedly. Long Term Capital Management was a victim of gravity. So too were VIX ETP volatility-sellers in Feb 2018.

    The Archegos unwind took two days in Apr 2021. This week a US dollar stablecoin called UST succumbed to gravity. A shockwave rippled across digital asset markets. And with temperatures this elevated, time accelerating, we are left to carefully examine the numerous large stops across the $200 trillion universe of traditional assets.

    * * *

    Stop: As a young pit trader in 1989, I was taught to understand where the big stop-loss orders were likely to be found. Markets in rough balance tend to oscillate, wander. But when there are traders with big leveraged positions, and they do not have the capital to sustain a large move against their exposures, they will eventually be forced to stop out either by choice or by creditors. As prices approach that stop-loss level, the trend accelerates. Sometimes such markets move as much in a minute as they otherwise do in a decade. Spacetime is bent around such stops.

    Stop II: Markets are mostly mean reverting. Their ups and downs are nature’s search for equilibrium. The damage to those on the wrong side of stops in such markets goes largely unnoticed in the broader financial system. But sometimes stops are existential. Hitting them precipitates a self-perpetuating move that is never reversed. Companies, currencies, and sovereigns – sometimes all at the same time – experience permanent shifts. And in times of great change, such as this turbulent decade, these are the stops to watch most carefully. Here are some:

    • Putin: Russia is approaching a stop. Its slow-moving demographic collapse has been known for decades. Its weak economic engine will collapse beneath sanctions, depriving Russia of the capital to sustain itself and defend against domestic and foreign adversaries. NATO membership of Finland and Sweden is the kind of price action you see when nearing a stop. So too the accelerating pace of Kyiv visits by world leaders and nuclear saber rattling by Russian defense ministers. Were Russia not a great nuclear power, a stop would be hit imminently. But it has 1,500 nuclear warheads currently deployed. This is clearly the world’s greatest near-term risk.
    • Famine: What appeared to be a trend of ever-expanding globalization allowed world governments and their respective economic systems to optimize for efficiency. But efficiency came at the cost of fragility, dependency. The current commodity price shock, and unfolding food shortage, will devastate most poor nations. This is only just getting started. Indonesia’s plan to limit palm oil exports, and India’s extraordinary decision to ban wheat exports, is what you see as governments approach stops. Hoarding has begun. This is the world’s greatest 2-3yr risk.
    • Union: Europe is a project that exchanges the constraints of political union for the promise of an end to senseless war. It was not designed for economic efficiency, and it has so far avoided a complete monetary integration. It made an energy deal with Russia that left its economy dependent, vulnerable. It must now overcome an energy crisis, risking direct conflict with Russia. While common enemies tend to draw nations together, the continent has a long history of fracture, infighting. It has also tended to make moves toward greater integration only in times of acute market stress. The market hunts for such stops. The 10yr Germany/Italy spread is 190bps.
    • America: There is no nation better positioned for a world that is deglobalizing than the US. It is the largest food producer, has enormous energy resources, innovators, capital markets, etc. Such advantages have been sold forward. Foreigners own $53.3trln US assets and the US owns $35.2trln foreign assets. The net external deficit has quietly increased nearly 10x since the start of the 2008 crisis. Our politicians have made entitlement promises that project government debt of more than 200% of GDP in the next thirty years, almost double the current share of GDP. Such vast imbalances will need to be resolved through default or devaluation (inflation). The latter is more likely. Unless the Fed contains inflation aggressively, the market will sniff the stop.  

    Anecdote: The Sun fuses 600 million tons of hydrogen into helium each second to produce the outward pressure required to offset its gravity. All stable stars live in this state of hydrostatic equilibrium. When their fuel is eventually expended, gravity prevails, and they collapse into themselves, achieving new equilibriums governed by quantum law. Small stars like our Sun become white dwarfs. Larger ones become neutron stars, the densest objects in the visible universe. The most massive stars overcome all know forces and disappear entirely – this collapse to a black hole occurs in less than a second. Spinning here on a little blue planet, 27,000 light years away from the invisible center of our galaxy, the scale and speed of such forces appears less extreme. Yet still, we observe all things around us struggling endlessly, mercilessly, for equilibrium. The weather constantly reminds us that complex systems move in volatile ways as they search for balance. This extends to all natural systems, creatures, companies, nations too.

    Throughout history our kingdoms, countries, and empires have had to produce sufficient outward pressure to maintain equilibrium and forestall collapse. The most prosperous ones have sustained balance through building vibrant economic systems. Such economies generate surpluses sufficient to sustain investment and finance a robust defense against those who threaten its existence. Some nations succeeded through conquest, confiscation, slavery, savagery. Others through capitalism. There are many models in between.

    When nations are growing more prosperous, their governments have relatively easy work. But when the economic engine falters, they must make difficult choices to sustain the outward pressure required to avoid collapse. Many governments fail; sustaining a healthy economic system is hard work, requiring foresight, investment, ingenuity, risk-taking. In their failure, such governments resort to coercion, confiscation, crackdowns. They pay their bills and bribe the citizenry with money borrowed against their nation’s future, leaving it diminished, eventually depleted.

    In a final attempt to defy gravity, and approaching their stop loss, governments print money. And this is why failing nations suffer currency collapse. 

    Tyler Durden
    Sun, 05/15/2022 – 19:45

  • 1 Dead, 5 Injured In Shooting At Southern California Church
    1 Dead, 5 Injured In Shooting At Southern California Church

    Multiple people have been shot and at least one person has died at a church in Laguna Woods, according to the Orange County Sheriff’s Department (OCSD).

    Vanessa Serna reports at The Epoch Times that deputies received a call about a shooting at Geneva Presbyterian Church on the 24000 block of El Toro Road at 1:26 p.m. on May 15.

    One deceased victim, four critically wounded victims, and another with minor injuries were found. All victims are adults and have been sent to an area hospital.

    Police said they detained a suspect quickly at the scene and recovered a weapon that was believed to have been used in the shooting.

    Police tape at Geneva Presbyterian Church after a shooting left one dead and four critically injured in Laguna Woods, Calif., on May 15, 2022. (Vanessa Serna/The Epoch Times)

    About 35 to 40 people witnessed the shooting at the church and are being interviewed by police.

    “El Toro Road is closed between Calle Sonora and Canyon Wren, please avoid the area. We are in Unified Command with @OCFireAuthority,” said OCSD on Twitter.

    California Governor Gavin Newsom took to Twitter following news of the shooting releasing a statement that read:

    “We are actively monitoring the shooting at a church in Laguna Woods and working closely with local law enforcement.

    No one should have to fear going to their place of worship. Our thoughts are with the victims, community, and all those impacted by this tragic event.”

    Congresswoman Katie Porter, who represents the 45th Congressional District which oversees the area also released a statement to the public:

    “A shooting at a church in Laguna Woods has left multiple people injured and one deceased. This is upsetting and disturbing news, especially less than a day after a mass shooting in Buffalo. This should not be our new normal. I will work hard to support the victims and their families.”

    Laguna Woods is a community comprised primarily of persons considered to be senior citizens, with 82% of residents reportedly over the age of 65

    According to reports on Twitter, Geneva Presbyterian hosts a Taiwanese church, and the shooting took place during a lunch meeting of the Taiwanese congregation.

    The victims were described as mostly Asian and mostly of Taiwanese descent, authorities said.

    The LA Times reports that a law enforcement source said officials believe the suspect was a 68-year-old Asian man who is originally from Las Vegas.

    “Things are just breaking down in society right now,” said Patricia Wallace, 61, was inside her apartment when she heard the whirl of helicopters hovering above her complex across the street from the church. “It’s just so sad.”

    As of writing, there has been no discussion of this being investigated as a hate crime.

    Developing…

    Tyler Durden
    Sun, 05/15/2022 – 19:21

  • Oh, Kamala!
    Oh, Kamala!

    Presented with no comment… aside from to note that the word “together” must have tested well in Democrats’ focus-groups…

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

    2024 is going to be so fun!

    Tyler Durden
    Sun, 05/15/2022 – 19:01

  • Greenwald: The Demented – And Selective – Game Of Instantly Blaming Political Opponents For Mass Shootings
    Greenwald: The Demented – And Selective – Game Of Instantly Blaming Political Opponents For Mass Shootings

    Authored by Glenn Greenwald via greenwald.substack.com,

    At a softball field in a Washington, DC suburb on June 14, 2017, a lone gunman used a rifle to indiscriminately spray bullets at members of the House GOP who had gathered for their usual Saturday morning practice for an upcoming charity game. The then-House Majority Whip, Rep. Steven Scalise (R-LA), was shot in the hip while standing on second base and almost died, spending six weeks in the hospital and undergoing multiple surgeries. Four other people were shot, including two members of the Capitol Police who were part of Scalise’s security detail, a GOP staffer, and a Tyson Foods lobbyist. “He was hunting us at that point,” Rep. Mike Bishop (R-MI) said of the shooter, who attempted to murder as many people as he could while standing with his rifle behind the dugout.

    Buffalo Police on scene at a Tops Friendly Market on May 14, 2022 in Buffalo, New York. At least 10 people were killed after a mass shooting at the store with the shooter in police custody. (Photo by John Normile/Getty Images)

    The shooter died after engaging the police in a shootout. He was James T. Hodgkinson, a 66-year-old hard-core Democrat who — less than six months into the Trump presidency — had sought to kill GOP lawmakers based on his belief that Republicans were corrupt traitors, fascists, and Kremlin agents. The writings he left behind permitted little doubt that he was driven to kill by the relentless messaging he heard from his favorite cable host, MSNBC’s Rachel Maddow, and other virulently anti-Trump pundits, about the evils of the GOP. Indeed, immediately after arriving at the softball field, he asked several witnesses whether the people gathered “were Republicans or Democrats.”

    A CNN examination of his life revealed that “Hodgkinson’s online presence was largely defined by his politics.” In particular, “his public Facebook posts date back to 2012 and are nearly all about his support for liberal politics.” He was particularly “passionate about tax hikes on the rich and universal health care.” NBC News explained that “when he got angry about politics, it was often directed against Republicans,” and acknowledged that “Hodgkinson said his favorite TV program was ‘The Rachel Maddow Show’ on MSNBC.”

    Indeed, his media diet was a non-stop barrage of vehement animosity toward Republicans: “His favorite television shows were listed as ‘Real Time with Bill Maher;’ ‘The Rachel Maddow Show;’ ‘Democracy Now!’ and other left-leaning programs.” On the Senate floor, Sen. Bernie Sanders (I-VT) divulged that Hodgkinson was an ardent supporter of his and had even “apparently volunteered” for his campaign. A Sanders supporter told The Washington Post that “he campaigned for Bernie Sanders with Hodgkinson in Iowa.”

    The mass-shooter had a particular fondness for Maddow’s nightly MSNBC show. In his many Letters to the Editor sent to the Belleville News-Democrat, reported New York Magazine, he “expressed support for President Obama, and declared his love for The Rachel Maddow Show”. In one letter he heralded Maddow’s nightly program as “one of my favorite TV shows.”

    While consuming this strident and increasingly rage-driven Trump-era, anti-GOP media diet, Hodgkinson “joined several anti-GOP Facebook groups, including ‘Terminate The Republican Party’; ‘The Road to Hell Is Paved With Republicans’;, and ‘Join The Resistance Worldwide!!'” Two of his consuming beliefs were that Trump-era Republicans were traitors to the United States and fascist white nationalists. In 2015, he had posted a cartoon depicting Scalise — the man he came very close to murdering — as speaking at a gathering of the KKK.

    Once Trump was inaugurated in early 2017, the mass shooter’s online messaging began increasingly mirroring the more extreme anti-Trump and anti-GOP voices that did not just condemn the GOP’s ideology but depicted them as grave threats to the Republic. In a March 22 Facebook post, Hodgkinson wrote: “Trump is a Traitor. Trump Has Destroyed Our Democracy. It’s Time to Destroy Trump & Co.” In February, he posted: “Republicans are the Taliban of the USA.” In one Facebook post just days before his shooting spree, Hodgkinson wrote: “I Want to Say Mr. President, for being an ass hole you are Truly the Biggest Ass Hole We Have Ever Had in the Oval Office.” As NBC News put it: “Hodgkinson’s Facebook postings portray him as stridently anti-Republican and anti-Trump.”

    Despite the fact that Hodgkinson was a fanatical fan of Maddow, Democracy Now host Amy Goodman, and Sanders, that the ideas and ideology motivating his shooting spree perfectly matched — and were likely shaped by — liberals of that cohort, and that the enemies whom he sought to kill were also the enemies of Maddow and her liberal comrades, nobody rational or decent sought to blame the MSNBC host, the Vermont Senator or anyone else whose political views matched Hodgkinson’s for the grotesque violence he unleashed. The reason for that is clear and indisputable: as strident and extremist as she is, Maddow has never once encouraged any of her followers to engage in violence to advance her ideology, nor has she even hinted that a mass murder of the Republican traitors, fascists and Kremlin agents about whom she rants on a nightly basis to millions of people is a just solution.

    It would be madness to try to assign moral or political blame to them. If we were to create a framework in which prominent people were held responsible for any violence carried out in the name of an ideology they advocate, then nobody would be safe, given that all ideologies have their misfits, psychopaths, unhinged personality types, and extremists. And thus there was little to no attempt to hold Maddow or Sanders responsible for the violent acts of one of their most loyal adherents.

    The same is true of the spate of mass shootings and killings by self-described black nationalists over the last several years. Back in 2017, the left-wing group Southern Poverty Law Center (SPLC) warned of the “Return of the Violent Black Nationalist.” In one incident, “Micah Xavier Johnson ambushed Dallas police officers during a peaceful protest against police brutality, killing five officers and wounding nine others.” Then, “ten days later, Gavin Eugene Long shot six officers, killing three, in Baton Rouge, Louisiana.” They shared the same ideology, one which drove their murderous spree:

    Both Johnson and Long were reportedly motivated by their strong dislike of law enforcement, grievances against perceived white dominance, and the recent fatal police shootings of unarmed black men under questionable circumstances, specifically the shooting deaths of Alton Sterling of Baton Rouge and Philando Castile in Falcon Heights, Minnesota . . .

    Needless to say, the ideas that motivated these two black nationalists to murder multiple people, including police officers, is part of a core ideology that is commonly heard in mainstream media venues, expressed by many if not most of the nation’s most prominent liberals. Depicting the police as a white supremacist force eager to kill black people, “grievances against perceived white dominance,” and anger over “the white supremacism endemic in America’s system of governance from the country’s founding” are views that one routinely hears on MSNBC, CNN, from Democratic Party politicians, and in the op-ed pages of The New York Times and The Washington Post.

    Yet virtually nobody sought to blame Chris Hayes, Joy Reid, Nancy Pelosi, Jamelle Bouie or New York Times op-ed writers for these shooting sprees. Indeed, no blame was assigned to anti-police liberal pundits whose view of American history is exactly the same as that of these two killers — even though they purposely sought to murder the same enemies whom those prominent liberals target. Nobody blamed those anti-police liberals for the same reason they did not blame Maddow and Sanders for Hodgkinson’s shooting spree: there is a fundamental and necessary distinction between people who use words to express ideas and demonize perceived enemies, and those who decide to go randomly and indiscriminately murder in the name of that ideology.

    Since that 2017 warning from the SPLC, there have been many more murders in the name of this anti-police and anti-white-supremacist ideology of black nationalism. In June of last year, the ADL said it had “linked Othal Toreyanne Resheen Wallace, the man arrested and accused of fatally shooting Daytona Beach Officer Jason Raynor on June 23, to several extremist groups preaching Black nationalism.” He had “participated in several events organized by the NFAC…best known for holding armed marches protesting racial inequality and police brutality.” He had a long history of citing and following prominent radical Black anti-police and anti-White ideologues.” Also in June of last year, a 25-year-old man named Noah Green drove a car into a Capitol Hill Police Officer, killing him instantly. The New York Times reported that he follows black nationalist groups, while a former college teammate “recalled that Mr. Green would often talk to fellow players about strategies to save and invest, emphasizing the need to close the wealth gap between white and Black America.”

    Just last month, a self-identified black nationalist named Frank James went on a terrifying shooting spree in the New York City subway system that injured dozens. He had “posted material on social media linked to black identity extremist ideologies, including the Nation of Islam, Black Panthers, Black Liberation Army, BLM and an image of black nationalist cop-killer Micah Johnson.” Angie Speaks, the brilliant writer who voices the audio version of the articles for this Substack, reported in Newsweek that James had “posted prolifically on social media and hosted a YouTube channel where he expressed Black Nationalist leanings and racial grievances.” In 2019, The New York Times reported that “an assailant involved in the prolonged firefight in Jersey City, N.J., that left six people dead, including one police officer, was linked on Wednesday to the Black Hebrew Israelite movement,” and had written “anti-police posts.”

    Most media outlets and liberal politicians correctly refused to assign blame to pundits and politicians who spew anti-police rhetoric, or who insist that the U.S. is a nation of white supremacy: the animating ideas of these murders. Yet in these cases, they go much further with their denialism: many deny that this ideology even exists at all.

    “The made-up ‘Black Identity Extremist’ label is the latest example in a history of harassing and discrediting Black activists who dare to use their voices to call out white supremacy,” claimed the ACLU in 2019. PBS quoted a lawyer for an advocacy group as saying: “We’re deeply concerned about the FBI’s ‘black identity extremist’ designation. This is mere distraction from the very real threat of white supremacy…There is no such thing as black identity extremism.” The same year, The Intercept published an article headlined “The Strange Tale of the FBI’s Fictional ‘Black Identity Extremism’ Movement,” which claimed over and over that there is no such thing as black extremism and that any attempt to ascribe violence to this ideology is a lie invented by those seeking to hide the dangers of white supremacy.

    It is virtually impossible to find any ideology on any part of the political spectrum that has not spawned senseless violence and mass murder by adherents. “The suspected killer of Dutch maverick politician Pim Fortuyn had environmentalist propaganda and ammunition at his home,” reported CBS News about the assassin, Volkert van der Graaf. Van der Graaf was a passionate animal rights and environmental activist who admitted “he killed the controversial right-wing leader because he considered him a danger to society.” Van der Graaf was particularly angry about what he believed was Fortuyn’s anti-Muslim rhetoric. As a result, “some supporters of Fortuyn had blamed Green party leader Paul Rosenmoeller for “demonizing Fortuyn before he was gunned down in May just before general elections.” In other words, simply because the Green Party leader was highly critical of Fortuyn’s ideology, some opportunistic Dutch politicians sought absurdly to blame him for Fortuyn’s murder by Van der Graaf. Sound familiar?

    During the BLM and Antifa protests and riots of 2020, an Antifa supporter, Michael Reinoehl, was the leading suspect in the murder of a Trump supporter, Aaron J. Danielson, as he rode in a truck (Reinoehl himself was then killed by federal agents before being arrested in what appeared to be a deliberate extra-judicial execution, though an investigation cleared them of wrongdoing, as typically happens when federal agents are involved). In 2016, The New York Times reported that “the heavily armed sniper who gunned down police officers in downtown Dallas, leaving five of them dead, specifically set out to kill as many white officers as he could, officials said Friday.” The Paper of Record noted that many believed that anti-police protests would eventually lead to violent attacks on police officers: it “was the kind of retaliatory violence that people have feared through two years of protests around the country against deaths in police custody.”

    Then there are the murders carried out in the name of various religions. For the last three decades at least, debates have been raging about what level of responsibility, if any, should be assigned to radical Muslim preachers or Muslim politicians when individuals carry out atrocities and murders in the name of Islam. Liberals insist — correctly, in my view — that it is irresponsible and unfair to blame non-violent Muslims who preach radical versions of religious or political Islam for those who carry out violence in the name of those doctrines. Similar debates are heard with regard to Jewish extremists, such as the Israeli-American doctor Baruch Goldstein who “opened fire in the Cave of the Patriarchs in Hebron, killing 29 Muslim worshippers.” Many insist that the radical anti-Muslim speech of Israeli extremists is to blame, while others deny that there is any such thing as “Jewish terrorism” and that all blames lies solely with the individual who decided to resort to violence.

    To be sure, there have been a large number of murders and other atrocities carried out in U.S. and the West generally in the name of right-wing ideologies, in the name of white supremacy, in the name of white nationalism. The difference, though, is glaring: when murders are carried out in the name of liberal ideology, there is a rational and restrained refusal to blame liberal pundits and politicians who advocate the ideology that animated those killings. Yet when killings are carried out in the name of right-wing ideologies despised by the corporate press and mainstream pundits (or ideologies that they falsely associate with conservatism), they instantly leap to lay blame at the feet of their conservative political opponents who, despite never having advocated or even implied the need for violence, are nonetheless accused of bearing guilt for the violence — often before anything is known about the killers or their motives.

    In general, it is widely understood that liberal pundits and politicians are not to blame, at all, when murders are carried out in the name of the causes they support or against the enemies they routinely condemn. That is because, in such cases, we apply the rational framework that someone who does not advocate violence is not responsible for the violent acts of one’s followers and fans who kill in the name of that person’s ideas.

    Indeed, this perfectly sensible principle was enshrined by the U.S. Supreme Court in the landmark 1982 unanimous free speech ruling in Claiborne v. NAACP. That case arose out of efforts by the State of Mississippi to hold leaders of the local NAACP chapter legally liable for violence carried out by NAACP members on the ground that the leaders’ inflammatory and rage-driven speeches had “incited” and “provoked” their followers to burn white-owned stores and other stores ignoring their boycott to the ground. In ruling in favor of the NAACP, the Court stressed the crucial difference between those who peacefully advocate ideas and ideologies, even if they do so with virulence and anger (such as NAACP leaders), and those who are “inspired” by those speeches to commit violence to advance that cause. “To impose liability without a finding that the NAACP authorized — either actually or apparently — or ratified unlawful conduct would impermissibly burden the rights of political association that are protected by the First Amendment,” ruled the Court.

    This principle is not only a jurisprudential or constitutional one. It is also a rational one. Those who express ideas without advocating violence are not and cannot fairly be held responsible for those who decide to pick up arms in the name of those ideas, even if — as in the case of James Hodgkinson — we know for certain that the murderer listened closely to and was influenced by people like Rachel Maddow and Bernie Sanders. In such cases, we understand that it is madness, and deeply unfair, to exploit heinous murders to lay blame for the violence and killings on the doorsteps of our political adversaries.

    But when a revolting murder spree is carried out in the name of right-wing ideas (or ideas perceived by the corporate press to be right-wing), everything changes — instantly and completely. In such cases, often before anything is known about the murderer — indeed, literally before the corpses are even removed from the ground where they lie — there is a coordinated effort to declare that anyone who holds any views in common with the murderer has “blood on their hands” and is essentially a co-conspirator in the massacre.

    A very vivid and particularly gruesome display of this demented game was on display on Saturday night after a white 18-year-old, Payton Gendron, purposely targeted a part of Buffalo with a substantial black population. He entered a supermarket he knew was frequented largely by black customers and shot everyone he found, killing 10 people, most of them black. A lengthy, 180-page manifesto he left behind was filled with a wide variety of eclectic political views and ideologies.

    In that manifesto, Gendron described himself as a “left-wing authoritarian” and “populist” (“On the political compass I fall in the mild-moderate authoritarian left category, and I would prefer to be called a populist”). He heaped praise on an article in the socialist magazine Jacobin for its view that cryptocurrency and Bitcoin are fraudulent scams. He spoke passionately of the centrality and necessity of environmentalism, and lamented that “the state [has] long since heavily lost to its corporate backers.” He ranted against “corporate profits and the ever increasing wealth of the 1% that exploit the people for their own benefit.” And he not only vehemently rejected any admiration for political conservatism but made clear that he viewed it as an enemy to his agenda: “conservatism is corporatism in disguise, I want no part of it.”

    But by far the overarching and dominant theme of his worldview — the ideology that he repeatedly emphasized was the animating cause of his murder spree — was his anger and fear that white people, which he defines as those of European descent, were being eradicated by a combination of low birth rates and mass immigration. He repeatedly self-identified as a “racist” and expressed admiration for fascism as a solution. His treatise borrowed heavily from, and at times outright plagiarized, large sections of the manifesto left behind by Brenton Tarrant, the 29-year-old Australian who in 2019 murdered 51 people, mostly Muslims, at two mosques in New Zealand. Gendron’s manifesto included a long list of websites and individuals who influenced his thinking, but made clear that it was Tarrant who was his primary inspiration. Other than extensive anti-Semitic sections which insisted that Jews are behind most of the world’s powerful institutions and accompanying problems, it was Tarrant’s deep concern about what he perceived is the disappearance of white people that was also Gendron’s principal cause:

    If there’s one thing I want you to get from these writings, it’s that White birth rates must change. Everyday the White population becomes fewer in number. To maintain a population the people must achieve a birth rate that reaches replacement fertility levels, in the western world that is about 2.06 births per woman….

    In 2050, despite the ongoing effect of sub-replacement fertility, the population figures show that the population does not decrease inline with the sub-replacement fertility levels, but actually maintains and, even in many White nations, rapidly increases. All through immigration. This is ethnic replacement. This is cultural replacement. This is racial replacement. This is WHITE GENOCIDE.

    Within literally an hour of the news of this murder spree in Buffalo — far too little time for anyone to have even carefully read all or most of Gendron’s manifesto, and with very little known about his life or activities — much of the corporate press and liberal pundit class united to reveal the real culprit, the actual guilty party, behind this murder spree: Fox News host Tucker Carlson. So immediate and unified was this guilty verdict of mob justice that Carlson’s name trended all night on Twitter along with Buffalo and Gendron.

    Twitter trending topics, May 14, 2022

    The examples of liberal pundits instantly blaming Carlson for this murder are far too numerous to comprehensively cite. “Literally everyone warned Fox News and Tucker Carlson that this would happen and they fucking laughed and went harder,” decreed Andrew Lawrence of the incomparably sleazy and dishonest group Media Matters, spawned by ultimate sleaze-merchant David Brock. “The Buffalo shooter… subscribed to the Great Replacement theory touted by conservative elites like Tucker Carlson and believed by nearly half of GOP voters,” claimed The Washington Post‘s Emmanuel Felton. “See if you can tell the difference between [Gerdon’s manifesto on ‘white Replacement’] and standard fare on the Tucker Carlson show,” said Georgetown Professor Don Moynihan. “The racist massacre in Buffalo rest [sic] at the feet of Donald Trump, Tucker Carlson, and the GOP,” decreed Hollywood’s nepotism prince Rob Reiner. The shooter was inspired by “a white nationalist conspiracy theory that Tucker Carlson has defended on his show,” was the verdict of The Huffington Post‘s Philip Lewis less than six hours after the shooting spree began. And on and on.

    That Carlson was primarily responsible for the ten dead people in Buffalo was asserted despite the fact that there was no indication that Gendron even knew who Carlson was, that he had ever watched his show, that he was influenced by him in any way, or that he admired or even liked the Fox host. Indeed, in the long list of people and places which Gendron cited as important influences on him — “Brenton Tarrant, [El Paso shooter] Patrick Crusius, [California Jewish community center killer], John Earnest, [Norwegian mass murderer] Anders Breivik, [Charleston black church murderer] Dylann Roof, etc.” — nowhere does he even allude to let alone mention any Fox News host or Carlson.

    To the contrary, Gendron explicitly describes his contempt for political conservatism. In a section entitled “CONSERVATISM IS DEAD, THANK GOD,” he wrote: “Not a thing has been conserved other than corporate profits and the ever increasing wealth of the 1% that exploit the people for their own benefit. Conservatism is dead. Thank god. Now let us bury it and move on to something of worth.” In this hated of conservatism, he copied his hero Brenton Tarrant, who also wrote that “conservatism is corporatism in disguise, I want no part of it,” adding about conservatives:

    They don’t even BELIEVE in the race, they don’t even have the gall to say race exists. And above all they don’t even care if it does. It’s profit, and profit alone that drives them, all else is secondary. The notion of a racial future or destiny is as foreign to them as social responsibilities.

    So desperate and uncontrolled was this ghoulish attempt to blame Carlson for the Buffalo shootings that my email inbox and social media feeds were festering with various liberal pundits demanding to know why I had not yet manifested my views of this shooting — as though it is advisable or even possible to formulate definitive opinions about a complex mass murder spree that had just taken place less than five hours before. “Still working on your talking points to defend your buddy Tucker or are you holding off on trying out your deflections until the bodies get cold?,” wrote a pundit named Jonathan Katz at 6:46 pm ET on Saturday night in a highly representative demand — just four hours after the shooter fired his first shot. Demands to assert definitive opinions about who — other than the killer — is to blame for a mass murder spree just hours after it happened can be called many things; “journalistic” and “responsible” are not among them.

    As it happened, I was on an overnight international flight on Saturday and into Sunday morning; I deeply apologize for my failure to monitor and speak on Twitter twenty-four hours a day. But even if I had not been 40,000 feet in the air, what kind of primitive and despicably opportunistic mindset is required not only to opine so definitively about how your political opponents are guilty of a heinous crime before the corpses are even taken away, but to demand that everyone else do so as well? In fact, Katz was particularly adamant that I opine not just on the killings but on the list of pundits I thought should be declared guilty before, in his soulless words, “the bodies get cold” — meaning that I must speak out without bothering to take the time to try to understand the basic facts about the killer and the shootings before heaping blame on a wide range of people who had no apparent involvement.

    But this is exactly the morally sick and exploitative liberal mentality that drives the discourse each time one of these shooting sprees happen. Rachel Maddow had far more known connections to Scalise’s shooter James Hodgkinson than Carlson has to Gendron. After all, as Maddow herself acknowledged, Hodgkinson was a fan of her show and had expressed his love and admiration for her. His animating views and ideology tracked hers perfectly, with essentially no deviation. And yet — despite this ample evidence that he was influenced by her — it would never occur to me to blame Maddow for Hodgkinson’s shooting spree because doing so would be completely demented, since Maddow never told or suggested to anyone that they go out and shoot the political enemies she was depicting as traitors, Kremlin agents, plotters to overthrow American democracy and replace it with a fascist dictatorship, and grave menaces to civil rights and basic freedom.

    The attempt to blame Carlson for the Buffalo shootings depended entirely on one claim: Carlson has previously talked about and defended the view that immigration is a scheme to “replace” Americans, and this same view was central to Gendron’s ideology. Again, even if this were true, it would amount to nothing more than a claim than the shooter shared key views with Carlson and other conservative pundits — exactly as Hodgkinson shared core views with Maddow and Sanders, or the numerous murderers who killed in the name of black nationalism shared the same views on the police and American history as any number of MSNBC hosts and Democratic Party politicians, or as Pim Fortuyn’s killer shared core views with animal rights activists and defenders of Muslim equality (including me). But nobody is willing to apply such a framework consistently because it converts everyone with strong political views into murderers, or at least being guilty of inciting murder.

    But all bets are off — all such principles or moral and logical reasoning are dispensed with — when an act of violence can be pinned on the political enemies of liberals. If a homicidal maniac kills an abortion doctor, then all peaceful pro-life activists are blamed. If an LGBT citizen is killed, then anyone who shares the views that Barack Obama and Hillary Clinton had until 2012 about marriage equality is blamed. If a police officer unjustifiably kills a black citizen, all police supporters or those who dissent from liberal orthodoxy on racial politics are decreed guilty. But liberals are never at fault when right-wing politicians are murdered, or police officers are hunted and gunned down by police opponents, or an anti-abortion group is targeted with firebombing and arson, as just happened in Wisconsin, or radical Muslims engage in random acts of violence. By definition, “moral reasoning” that is applied only in one direction has nothing to do with morality and everything to do with crass, exploitative opportunism.

    Though it does not actually matter for purposes of assigning blame, it is utterly false to claim that Carlson’s ideology — including on “replacement” — is the same as or even related to the views expressed by the killers in Buffalo or New Zealand. Indeed, in key respects, they are opposites. Both Tarrant and Gendron targeted citizens of the countries in which they carried out their murder spree. They justified doing so on the ground that any non-white citizen is automatically an “invader,” regardless of how long they have been in the country or how much legal status they have. “It would have eased me if I knew all the blacks I would be killing were criminals or future criminals, but then I realized all black people are replacers just by existing in White countries,” Gendron wrote.

    To claim that Carlson ever said anything remotely like this or believes it is just an outright lie. Indeed, with great frequency, Carlson says that the priority of the U.S. Government should be protection of and concern for American citizens of all races. Tarrant and Gendron believe and explicitly say that any non-white citizen of a European country is automatically an “invader” who must be killed and/or deported to turn the country all-white. Carlson believes the exact opposite: that the proper citizenry of the United States is multi-racial and that Black Americans and Latin Americans and Asian-Americans are every bit as much U.S. citizens, with all of the same claims to rights and protections, as every other American citizen. His anti-immigration and “replacement” argument is aimed at the idea — one that had been long mainstream on the left until about a decade ago — that large, uncontrolled immigration harms American citizens who are already here. There is no racial hierarchy in Carlson’s view of American citizenship and to claim that there is is nothing short of a defamatory lie.

    But even if these liberal smear artists were telling the truth, and Carlson’s view of immigration and “replacement” were similar or even precisely identical to Gendron’s, one could certainly say that Carlson holds immoral and despicable views. But he would still no more carry blame for the Buffalo murders than liberal pundits have blood on their hands for countless massacres carried out in the name of political causes they support and theories they espouse, whether it be animus toward the police or anti-imperialism or opposition to Israeli occupation of the West Bank or the belief that the United States is a fundamentally racist country or the view that the GOP is a fascist menace to all things decent.

    The distinction between peaceful advocacy even of noxious ideas and those who engage in violence in the name of such ideas is fundamental to notions of fairness, justice and the ability to speak freely. But if you really want to claim that a public figure has “blood on their hands” every time someone murders in the name of ideas and ideologies they support, then the list of people you should be accusing of murder is a very, very long one indeed.

    To support the independent journalism we are doing here, please subscribe, obtain a gift subscription for others and/or share the article

    Tyler Durden
    Sun, 05/15/2022 – 18:30

  • Navy Remains Silent About Secret Boat's Sinking
    Navy Remains Silent About Secret Boat’s Sinking

    The US Navy remains hush-hush about the sinking of a small secretive vessel testing high-tech equipment.

    “Due to the experimental nature of the technology coupled with OSPEC concerns, we are unable to provide any further details nor specifics of the incident,” Naval Safety Command spokeswoman Priscilla Kirsch said in an email to Navy Times. 

    The sinking occurred on Dec. 7, 2021. Information about the vessel’s name and what type of technology was outfitted on the boat has been shielded from the public. The service noted that the incident occurred while the boat was moored at an undisclosed area. It gave no reason why the vessel sunk, though it said damages amounted to $2.5 million. 

    Kirsch said the vessel was “immediately recovered and restored” following the incident, adding it’s awaiting further evaluation. 

    Even though the Navy released limited, months before the incident, a small mysterious stealth boat was spotted in a boatyard in Gulfport, Mississippi, known for the high-tech manufacturing of vessels for US Special Forces. 

    Could this be the vessel?

    Still, the type of vessel that sunk is shrouded in secrecy by the service.  

    Tyler Durden
    Sun, 05/15/2022 – 18:00

  • Clarence Thomas Has New Message Over "Tremendously Bad" Roe V. Wade Leak
    Clarence Thomas Has New Message Over “Tremendously Bad” Roe V. Wade Leak

    Authored by Tom Ozimek via The Epoch Times,

    U.S. Supreme Court Justice Clarence Thomas has called the shocking leak of the draft Roe v. Wade opinion a major violation of trust that has “fundamentally” changed the high court.

    Thomas made the remarks at a May 13 conference in Dallas, Texas, in which he decried the leak of a draft Supreme Court opinion suggesting that the court is poised to overturn Roe v. Wade, with major implications for access to abortion.

    “I do think that what happened at the court is tremendously bad,” he said, referring to the May 2 leak of the opinion to Politico, adding that some time ago it would have been unthinkable for even “one line of one opinion” to have been disclosed without authorization.

    The Supreme Court has confirmed the authenticity of the draft opinion, but has called it preliminary. A ruling in the case is expected in June.

    Chief Justice John Roberts has ordered a probe into the leak. Thomas said its unauthorized disclosure undercut confidence in the Supreme Court and its internal processes.

    “When you lose that trust, especially in the institution that I’m in, it changes the institution fundamentally,” he said.

    “You begin to look over your shoulder. It’s like kind of an infidelity that you can explain it, but you can’t undo it.”

    “I wonder how long we’re going to have these institutions at the rate we’re undermining them,” Thomas said, echoing earlier remarks in which he expressed concern about a “different attitude of the young” toward respect for institutions and the law, suggesting that this is on the decline relative to past generations.

    Thomas was also critical of liberal protests outside the homes of conservative Supreme Court justices.

    “You would never visit Supreme Court justices’ houses when things didn’t go our way. We didn’t throw temper tantrums. I think it is … incumbent on us to always act appropriately and not to repay tit for tat,” he said.

    Besides pickets in front of the homes of several conservative justices, a flurry of protests and counterprotests broke out outside the Supreme Court after Politico obtained and published the draft opinion that would uphold a Mississippi law banning abortions after 15 weeks of pregnancy and overturn the Roe v. Wade decision that legalized abortion nationwide.

    The protests have been loud, but mostly peaceful, though there have been reports that pro-abortion activists have attacked pro-life pastors.

    In a bid to prevent violence, police have surrounded the Supreme Court with a set of 9-foot-high metal barricades, with an officer telling an Epoch Times reporter that the move was made “just in case.”

    Speaking at a May 6 judicial conference in Atlanta, Thomas said that government institutions must not allow themselves to be strong-armed into delivering outcomes that people demand.

    “We are becoming addicted to wanting particular outcomes, not living with the outcomes we don’t like,” he said, according to Reuters.

    “We can’t be an institution that can be bullied into giving you just the outcomes you want.”

    Tyler Durden
    Sun, 05/15/2022 – 17:30

Digest powered by RSS Digest