Jun 17

Today’s News 17th June 2024

  • "Don't Buy Into This Crap", Catherine Austin Fitts Warns "AI Is Digital Control"
    “Don’t Buy Into This Crap”, Catherine Austin Fitts Warns “AI Is Digital Control”

    Via Greg Hunter’s USAWatchdog.com,

    Catherine Austin Fitts (CAF), Publisher of The Solari Report, financial expert and former Assistant Secretary of Housing (Bush 41 Admin.) is sounding the alarm about Artificial Intelligence (AI) and how it will impact your world in very negative ways. 

    It’s all in a new report called “The AI Revolution: The Final Coup d’Etat.”  CAF explains, “This is a very serious look at Artificial Intelligence and how it’s going to be used to implement control…”

    “This past week, there was this huge open board meeting at OpenAI.  There were board members put there to make sure OpenAI and its products were in alignment with the best interests of the human race.  Some of them got booted out. Now, we see the former head of the NSA (National Security Agency) get put on the board. 

    I just realized it today, and I had not realized it before. 

    Edward Snowden just tweeted out and said you should never use any of these products, which include ChatGPT.  Snowden also said, ‘You have to understand where this is going.  You have been warned.’

    “The AI Revolution” also warns that:

    AI “. . . will alter the prospects for a free society, even free will. . . and . . . attempt to seed the idea human-only decision-making will become a rarity and, in time, cease to exist.”

    Don’t think sophisticated AI is some idea that is far into the future.  AI is here now, and CAF points out:

    “I just see more and more companies using this type of technology to institute financial fraud and make money from financial fraud in their pricing. . . . You also have thousands of companies to track you for their benefit…

    It is trying to extract data from you to accomplish whatever its goal is. . . . It’s like a swarm of invisible locusts that are all trying to surveil and track, and none of them are trying to optimize your life and give you a free and inspired life. 

    They are just trying to get their piece.”

    AI will also be used to ignore and break all laws.  After all, it’s robotic and can’t be held accountable.  CAF says,

    “By removing moral obligations and legal and obedient respect for laws, the speed at which you can do evil is extraordinary…

    One of my concerns, and I have said this for many years, I think this kind of technology allows interdimensional intelligence to act as material reality so that, literally, demonic intelligence can have far more influence and impact in our world.  

    It operates at such high speed, and then you combine that with the payment systems in the financial system. . . the things that can go wrong are phenomenal.  One of the main problems that we have seen in the past year is artificial intelligence takes off on its own, and it starts functioning in a way it makes no sense. . . . and it’s just lying.  It’s just making stuff up and lying.  

    It’s literally like it’s under demonic possession.”

    CAF says, no matter what, “AI can’t beat God.”  

    And instead of worshiping Jehovah and Jesus (like you should), the creators of AI want you to trust whatever this tech tells you to do.  CAF says, “They want an AI Religion Revolution.” 

    Don’t buy into this crap because AI is a disaster for humanity and your freedom.

    CAF thinks the Democrats will be forced to replace Joe Biden come November, and she explains why. 

    Now, more than ever, CAF thinks physical gold and silver are good investments.  She encourages people to expand the use of cash.  CAF thinks two of the best weapons against this sort of artificial intelligence used for control and tyranny is to enforce the US Constitution and, above all, do not lose your faith in God the Father and Christ Jesus.

    There is much more in the 61-minute riveting in-depth interview.

    Join Greg Hunter of USAWatchdog.com as he goes One-on-One with the Publisher of The Solari Report, Catherine Austin Fitts, for 6.15.24.

    *  *  *

    To Donate to USAWatchdog.com Click Here

    There is a lot of free information on Solari.com. You can get way more cutting-edge analysis from Catherine Austin Fitts and “The Solari Report” by taking advantage of the “special offer” featuring the “The AI Revolution.”  You can click here, or call 1-731-764-2515 and talk to a real human.

    Tyler Durden
    Sun, 06/16/2024 – 23:20

  • The Changing Nature Of Nuclear Deterrence
    The Changing Nature Of Nuclear Deterrence

    Submitted by Tuomas Malinen of GnS Economics

    Issues discussed:

    • Tactical vs. strategical nuclear weapons.
    • Mutually asserted destruction (MAD) as the foundation of nuclear deterrence.
    • The shaky foundations of modern nuclear deterrence, and growing risk of a tactical nuclear strike.

    When I was around eight years old, my baby-sitter let me watch a documentary on nuclear war. Unsurprisingly, it shook me to the core. It’s kind of hard to know what went on in her head, but those images of nuclear detonations never left my head. Looking back at it now, this ‘incident’ starts to make sense, kind of. This is because over the decades I’ve read a lot on nuclear deterrence and on nuclear war simulations. I have had this graving to understand nuclear warfare and deterrence basically throughout my adult-life.

    Cuban Missile Crisis in October 1962 became something of a case study on nuclear deterrence to me. This was in no small part because of the magnificent movie, Thirteen Days (published in 2000), documenting the crisis through the eyes of President Kennedy and the White House. I have also had the privilege to grow with a highly objective lecturer of history, my mother, who has always questioned the current knowledge on history. One of her best quotes is, “According to how history is currently written”. It summarizes all you need to understand about research of history. We simply do not know all the facts and politics plays a major role on how history is being written.

    In the movie Thirteen Days, there’s a scene where Bobby Kennedy (played memorably by Steven Culp) and Special Advisor Kenneth O. Donnell (always great Kevin Costner) arrive to Russian (Soviet) embassy, where they are burning secret documents in preparation for an evacuation. I vaguely remember that I would have talked with my mom about this scene and that she would have confirmed that such a thing (burning of documents) actually happened, but I cannot vouch for that. In any case, it was a beautiful movie trick, intensifying and underlining the gravity of the situation the world faced. Unfortunately, we are very close of such a situation, again.

    During the Cuban crisis, the ‘Doomsday Clock’, kept by the Bulletin of Atomic Scientists, was set to seven minutes to midnight. Currently, it stands at 90 seconds to midnight, closest to midnight it ever has, and I am expecting that it will be moved to 60 seconds to midnight during the next 12 months. While the Bulletin, quite unnecessarily, recently mixed “climate change” to the setting of the clock, the unprecedented warning on the close proximity of a nuclear holocaust should be taken extremely seriously.

    I have been pondering the growing nuclear threat since basically the onset of Ukrainian conflict in early 2014. It has become very pervasive in my thinking during the past few weeks mostly due to strikes of Ukraine to Russian early-warning system.

    During my academic studies, I have taken two courses in game theory. One during graduate and the other during post-graduate studies. During those courses, I read also on game theoretical simulations of nuclear warfare. I cannot help to think that I did this, because of the misjudgement of my baby-sitter all those years ago. Past week, I started to build game theoretical model on a tactical nuclear first strike to understand the situation better.

    In this entry, which is likely to start a short series on nuclear deterrence and war, I go through the basic building blocks of modern nuclear deterrence starting from tactical nuclear weapons. Then I explain the foundational principle of nuclear deterrence, mutually asserted destruction, or MAD, and lastly I go through the weak spots of modern nuclear deterrence. All detailed information on nuclear weapons and deterrence is based on recent research by several scholars, only few of which I will detail (link) here. My model describes in more detail, why deterrence is so close of failing, and I return to that later. In the conclusions I also comment the recent steps of escalation, i.e., the Russian flotilla just off the Floridan coast and fresh U.S. sanctions to Russian financial sector.

    Tactical nuclear weapons

    I have to start with a notion that there actually is no universally accepted definition for a ‘tactical nuclear weapon’. Some scholars of nuclear deterrence, and some military leaders, even argue that such distinction makes no sense. For example, both “strategical” and “tactical” nuclear weapons can have either a low or a high yield, measured in kilo- and megatons. Low yield nuclear devices are generally thought to produce an explosion between one to 10 kilotons, while high yield nuclear weapons, and especially so called hydrogen bombs, yield an explosive power of dozens of megatons.1 To note, the biggest ever created nuclear explosion occurred on 30 October, 1961, when the Soviet Union tested ‘Tsar Bomba’ yielding an explosive power of 50-58 megatons (difference between U.S. and Russian measurements). Reportedly, the test implied a new construction of a hydrogen bomb able to produce “practically unlimited power”.

    The arms control definition has been to disentangle weapons according to their range, where strategic nuclear weapons have intercontinental range, while tactical have short- to medium-range. This is questionable, because some nuclear powers do not even have intercontinental-range weapons, but it would be hard to argue that they would not be able to conduct “strategical” nuclear strikes. Moreover, strategical nuclear weapons can be used in a tactical manner, i.e., strikes to military or critical infrastructure targets. Thus, the distinction between strategical and tactical nuclear weapons, and strikes, is fuzzy, to say the least.

    In the model I am building, I classify tactical nuclear weapons as short- to medium-range nuclear weapons with relatively low yield used for surgical strikes to military installations or critical infrastructure. I classify strategical nuclear weapons having an intercontinental range with a high yield used to inflict wide-spread damage to military and civilian infrastructure. I think this is a proper description of the weapons based on their strategical capabilities, for modelling purposes at least.

    Mutually asserted destruction, MAD

    If we assume the worst-case view to nuclear warfare, we have been on a road towards a nuclear conflict since the U.S. conducted her first nuclear bomb test, the Trinity test, on July 16, 1945. Just two months later, the world witnessed first nuclear strikes with the U.S. dropping nukes on cities of Hiroshima and Nagasaki on 6 and 9 August. These strikes effectively ended the Second World War, but started the nuclear armament race.

    Right after the first nuclear strikes, nuclear weapons were seen, by the military planners, only as a new means of warfare, but with unprecedented destructive power. For example, General MacArthur advocated for using nuclear weapons, in tactical capacity, in the Korean conflict fought between 1950-1953. President Truman fortunately refrained from this, but the idea was floated. The idea of nuclear deterrence started to develop only after the Soviet Union created her own nuclear weapons, with the first Soviet nuclear bomb test conducted on August 29, 1949. Yet, only the arrival of intercontinental bombers and intercontinental ballistic missiles, or ICBMs, led to the creation of the concept and policies of nuclear deterrence, by removing distance as a factor shielding from a nuclear attack.

    The grounding idea of MAD, and thus nuclear deterrence, has rested on the assumption that using nuclear weapons in a conflict against a nuclear power would automatically lead to a nuclear war and thus mutual destruction in a nuclear holocaust. However, developments in nuclear weapons and their interception capabilities has changed the terms and possibility of nuclear conflicts, and thus nuclear deterrence.

    The shaky foundations of modern nuclear deterrence

    Some scholars argue that nuclear deterrence is a moot point, because no weapon system is created for deterrence.2 I would argue that recent developments imply that nuclear deterrence plays a definite role still. This is one conclusion that can be drawn from the response to recent drills of the Russian fleet, including a nuclear submarine, in the Atlantic reportedly at times just some 25 miles off the Floridan coast. It also looks that the two strikes to Russian early-warning system have yielded a strong back-room response to Ukrainian leadership from the Biden administration. When the U.S. administration is publicly “concerned”, it usually implies that behind closed doors, there has been hell to pay (see also this). In any case, this is good news. We at GnS Economics have not yet lifted the warning of a nuclear strike in Europe, but I would argue that it’s likelihood has diminished, for now at least.

    When we look at general developments, a worrying picture starts to emerge. Even Hellan Larsen has published an interesting study entitled: Deliberate nuclear first use in an era of asymmetry: A game theoretical approach. Asymmetry, between two or more nuclear powers, in Larsen’s study arises from two factors:

    1. Asymmetry in damage limitation and secure-second-strike capability, and
    2. Asymmetry in conventional warfare.

    The former implies imbalances in the capacity of nuclear forces to counter nuclear strikes, essentially to repel strategic bombers and ICBM’s, and in the capacity to deliver a secondary strike after the first strike by the enemy. The latter implies inferiority in non-nuclear forces with the prospect of sustaining catastrophic losses in a conventional warfare. In this case, the weaker party uses nuclear weapon as a coercion tool. In the former, the stonger party may see it “rational” to issue a deliberate nuclear first use (DFNU), in certain conditions, because it assumes it can repel most of the secondary strike of the weaker party. In the latter, the weaker party launches a nuclear strike to compensate her weakness in the battleground (with her troops in a possible risk of being over-run). Currently, there are clear asymmetry in tactical nuclear weapons between the two leading nuclear powers: the U.S. and Russia.

    Previously, there was symmetry. In the late 1980s the U.S. held approximately 9000 tactical nuclear weapons, while the Soviet Union (Russia) was estimated to have held anything between 13000 and 22000 tactical nuclear weapons. In 2019, these numbers were around 230 for the U.S. and some 2000 for Russia. Moreover, the capacity of remaining arsenal differs greatly. Russia has developed and modernized a wide variety of platforms capable of launching both conventional and nuclear warheads. Russia has bombers, missiles in ships, subs, aicrafts and helicopters, hypersonic missiles and possibly even artillery capable of delivering tactical nuclear strikes. The U.S. has mostly just aircrafts and guided bombs to do the same. France and Britain have all but eliminated their arsenal of tactical nuclear weapons. So, between NATO and Russia, the symmetry in tactical nuclear weapons has turned into a clear asymmetry to the benefit of Russia.

    It has been a long-standing concern of Russia whether her nuclear forces would be able to survive from an (strategical) U.S. first strike in sufficient quantaties to deliver a “deep second strike” due to the counterforce capabilities and missile defenses of the U.S. It has even been simulated that if the U.S. would launch an all-out nuclear first strike during a peace time, it could achieve a pyrrhic victory with Russian second strike capabilities seriously hampered. In a crisis, the likelihood of a succesful U.S. first strike would diminish, because of the grown readiness of Russian nuclear forces. As a response to all this, Russia has been pouring money into developing hypersonic missiles and missile defense systems.

    The collapse of Intermediate-Range Nuclear Forces (INF) Treaty in February 2019, has created a new threat to Russia, because it creates the possibility to place short- to medium-range nuclear missiles to Europe. Their short fly-time effectively dismantles the nuclear deterrence policy of Russia, which is based on the concept of launch-on-warning, which relies on the missile early-warning system, i.e., the very system Ukraine struck late-May. The system is aimed at providing a warning to Russian leadership of an ICBM launch anywhere in the world, towards Russia, after which Russia would launch a counter-strike (or a second-strike) even before missiles of the first-strike would have struck to Russia and her allies.

    Questions have been raised is the U.S. missile defense system effective against hypersonic missiles. Reports, e.g., from Iranian hypersonic strikes to Israel are conflicting, but we know that at least some hypersonic missiles penetrated the ‘Iron Dome’. This is likely to lead to development of more effective, and more pervasive, missile defense system, a “defense race” of sort, as well as to rapid development of U.S. hypersonic missile capacity. These developments would alter nuclear deterrence, yet again.

    Conclusions

    The problem I see in the Ukrainian conflict is that it’s being waged, by NATO currently, possible to serve the similar aims, like Russia’s Afghanistan campaign in the 1980s. It has been argued that the failed military campaign in the remote Soviet-controlled country, delivered a fatal blow to the Russian economy eventually leading to the collapse of the whole Soviet Union. The difference between Afghanistan and Ukraine is that Afghanistan was like Vietnam, that is, a proxy-war between the U.S. and Russia fought over a strategically relatively unimportant country. Like explained by several notable scholars, including “NATO-hawk” Dr. Zbigniew Brzezinski and U.S. professor John Mearsheimer, Ukraine has been a definite red line for Moscow for a long time. This brings us to the cross-hairs of modern nuclear deterrence over her territory.

    As I am writing these lines, the U.S. has issued another round of sanctions, now aimed at the financial sector of Russia. I don’t think that the timing was a coincidence. The Russian ‘floatilla’ practicing off the coast of Florida was a likely trigger. This, like the flotilla, is just another step of escalation.

    The world keeps on moving into two blocks, which is a likely to be the aim, because one needs competing factions to establish deeper escalation. As you notice, I have gone rather deep into the ‘Rabbit Hole’, and I am currently watching these major developments as plays in a global chess game, which are likely to lead us to deeper escalation and towards the scenarios I described in the Horsemen of the Apocalypse. I am simply starting to lack any other models to explain this global madness than a some powerful force pushing us deeper into geopolitical chaos. It’s quite possible that I will end this mini-series on nuclear deterrence on a piece in the Apocalypse Scenario (it would be fitting, I guess).

    What makes the current situation so daunting is that we are breaking most of the established international rules. This ranges from starting a war to breaking of global financial order through sanctions and confiscation of international assets. If we know one thing from history, it’s that when a rule-based order breaks, destructive wars follow.

    What I hope to have established here is a first look on the changing nature of nuclear deterrence and on the risks it entails. Building an understanding through some actual modeling work, even when the model is relative simple, always gives a much wider perspective than simply just reading research. I will keep working with the model, and the academic paper, and I publish updates here on the things I discover. I just hope we (humanity) have the strength to stop this cycle of escalation, before something irreversible happens.

    I end this to some notions for paid subscribers on the effects of new Russian sanctions.

    Tyler Durden
    Sun, 06/16/2024 – 22:10

  • Japan Grants Asylum To Just 303 People In 2023 As It Rejected 98% Of Applicants
    Japan Grants Asylum To Just 303 People In 2023 As It Rejected 98% Of Applicants

    Japan granted refugee status to a ‘record’ 303 asylum-seekers in 2023, an increase from the previous record of 202 people set in 2022, the Justice Ministry announced last week.

    Ukrainian refugees arrive at Haneda airport in Tokyo on April 5, 2022 (Reuters)

    Beyond this, two foreign nationals were granted quasi-refugee status for ‘fleeing from countries in conflict,’ while another 1,005 – mostly from Ukraine – were granted permission to reside in Japan on humanitarian grounds, though they do not qualify for refugee status, the Japan Times reports. 

    According to a Tuesday report from the Justice Ministry, there were 13,823 asylum-seekers who applied for refugee status last year, a more than 3x increase from 2022 – though far short of the record set in 2017 of 19,629 applicants. The 303 who were granted refugee status were recognized by the Japanese government as having had to flee their home countries over threats of persecution. 

    As in 2022, the majority of those recognized as being refugees last year — 237 people — were from Afghanistan, where the return of the Taliban regime to power in 2021 has led to continued instability. Refugees from Myanmar and Ethiopia made up the next biggest groups.

    Last year’s applicants for refugee status made up the second-largest number that Japan has ever received in a single year, with those from Sri Lanka (3,778), Turkey (2,406) and Pakistan (1,062) accounting for the largest nationality groups.

    As for the new categories – Japan revised its Immigration Control and Refugee Recognition Law in 2023, introducing a new status of “subsidiary protection” that grants asylum to those fleeing from areas experiencing active, ongoing conflict – even if they do not qualify under Japan’s narrow definition of refugee.

    Since December 1st, 1,110 applications have been made for special status – most of whom (1,101) were from Ukraine. By the end of February, 647 applicants had been granted quasi-refugee status, with 644 of them being Ukrainian.

    If an application is denied in Japan, there is an appeal process that can take several years – on top of the initial application process that takes several months to begin with.

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    Tyler Durden
    Sun, 06/16/2024 – 21:35

  • Biden Campaign Claims Trump Said He Will "Throw Women With Beautiful Children In Mass Detention Camps"
    Biden Campaign Claims Trump Said He Will “Throw Women With Beautiful Children In Mass Detention Camps”

    Authored by Steve Watson via Modernity.news,

    The Biden campaign has used a deceptively edited clip from a speech Donald Trump made Saturday at Turning Point USA’s Detroit conference, claiming that he said he wants to “throw women with beautiful children in mass detention camps.”

    Here is what the Biden campaign posted on X:

    Firstly, he didn’t even say that.

    Secondly, watch the full clip.

    They edited out the beginning where Trump is specifically saying that leftists will twist him saying he’s going to incarcerate “terrorists” before deporting them, and instead claim that he’s doing it to women and children.

    They just proved his point.

    He then went on to describe some of the despicable actions of illegal immigrant gang member murderers.

    The Biden camp doesn’t realise that people are not buying this crap anymore, that Trump is a dictatorial Third Reich loving racist who is going to round people up and put them in camps.

    It’s utterly stupid and betrays how desperate they are.

    *  *  *

    Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

    Tyler Durden
    Sun, 06/16/2024 – 21:00

  • Swiss Summit Says Ukraine's 'Territorial Integrity' Must Be Basis Of Any Peace
    Swiss Summit Says Ukraine’s ‘Territorial Integrity’ Must Be Basis Of Any Peace

    Sunday’s major Ukraine peace conference in Switzerland, where some 100 countries were represented, has rejected the conditions named by Russia’s Vladimir Putin for immediately ending the war.

    A final document produced by the summit, which 78 of the countries signed off on, asserted that the basis of any future Ukraine-Russia peace deal to end the war must preserve the “territory integrity” of Ukraine.

    Via AFP

    Referencing the UN charter, the document lays out that “respect for territorial integrity and sovereignty … can and will serve as a basis for achieving a comprehensive, just and lasting peace in Ukraine.”

    “We believe that reaching peace requires the involvement of and dialogue between all parties,” it additionally said.

    While the vast majority of countries agreed to the document, the representatives of India, Mexico, Saudi Arabia, South Africa, Thailand and the United Arab Emirates did not sign it, according to The Associated Press.

    European Commission President Ursula von der Leyen addressed the conditions for peace that Putin spelled out at the end of last week, saying:

    “It was not a peace negotiation because Putin is not serious about ending the war. He is insisting on capitulation. He is insisting on ceding Ukrainian territory — even territory that today is not occupied by him,” she said.

    “He is insisting on disarming Ukraine, leaving it vulnerable to future aggression. No country would ever accept these outrageous terms.”

    She was referencing his Friday televised address wherein the Russian leader said, “Ukrainian troops must be completely withdrawn from the Donetsk People’s Republic, the Luhansk People’s Republic, Kherson and Zaporizhzhia regions.” Putin also stipulated a second main condition for ending the war: Ukraine must reject ambitions to join the NATO alliance. 

    “As soon as Kyiv says it is ready to do this and begins really withdrawing troops and officially renounces plans to join NATO, we will immediately — literally that very minute — cease-fire and begin talks,” Putin said in the talk given to a gathering of his foreign ministry officials. But leaders gathered in Switzerland over the weekend, including Italy’s PM Giorgia Meloni, rejected Putin’s overture as but “propaganda”.

    Both Russia and China have suggested that the two-day peace conference being held in Burgenstock is futile without Russia’s presence and participation, and is ultimately but a PR stunt.

    Meanwhile an interesting and awkward moment last week at the G7 summit in Italy…

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    But Ukrainian President Volodymyr Zelensky hailed the outcome of the summit on Sunday. He said, “We’ll prove to everyone in the world that the UN Charter can be restored to full effectiveness.” He said of countries which have yet to sign on to the final document may still do so as it is ‘open’… “Even countries that are now thinking to join it have consultations ongoing in their respective countries,” Zelensky announced.

    Given that G7 leaders have also this weekend agreed to more long term funding for Ukraine, to the tune of $50 billion and while using some $280 billion in frozen Russian assets to do it, the prospect of legitimate peace negotiations now seem as far away as ever.

    Tyler Durden
    Sun, 06/16/2024 – 20:25

  • 20% Of California Lives In Poverty; What's Going On?
    20% Of California Lives In Poverty; What’s Going On?

    Authored by Mike Shedlock via MishTalk.com,

    On a cost-adjusted basis, California leads the nation in percentage living in poverty.

    Blame the Progressive oligarchs like Governor Newsom.

    Unemployment rates from the BLS through April. State level data lags by one month. Chart by Mish.

    Warning to the World

    Spiked makes a strong case that a dominant class of oligarchs and woke bureaucrats has bled the Golden State dry. It’s a Warning to the World.

    Many still see California as the home of a ‘new progressive era’. It is often viewed as an exemplar of social equity, one that reflects, as a New York Times column put it, ‘the shared values of our increasingly tolerant and pluralistic society’. In truth, far from embodying an egalitarian ethos, it is pioneering a new kind of almost feudal society. A relative handful of oligarchs and a vast bureaucratic ‘clerisy’ lord it over a massive class of what are essentially serfs.

    California is not only home to by far the highest number of billionaires in the US. But it also suffers the highest proportion of Americans living in poverty and the widest gap between middle- and upper-middle-income earners of any state. It endures among the US’ highest rates of unemployment, as well as massive net outmigration, an exodus that has increased sharply since 2019. It also has 30 per cent of the nation’s homeless population, with some now living in ‘furnished’ caves.

    Even without adjusting for costs, no Californian metro area ranks in the US top 10 in terms of well-paying, blue-collar jobs. But four – Ventura, Los Angeles, San Jose and San Diego – sit among the bottom 10.

    Gavin Newsom, California’s governor and prince of the oligarchic elite, seems determined to double down on his attempt to shape California as the model for the ‘progressive’ future. ‘Unlike the Washington plutocracy’, he proclaims, ‘California isn’t satisfied serving a powerful few on one side of the velvet rope’.

    Such rhetoric crashes against reality. Newsom’s high-tax, regulation-heavy regime is driving enormous poverty. The state’s ethnic-minority communities are suffering most. Ignoring the interests of these people, California legislators and regulators enact proposals for the almost total elimination of fossil fuels. 

    This, as attorney Jennifer Hernandez explains, has created a kind of ‘green Jim Crow’ that disproportionately hurts working-class, ethnic-minority families. Californians have the highest energy prices in the continental US and energy poverty is particularly rife among the heavily Latino inland areas. Recently, the California Air Resources Board, the primary executor of California’s climate policies, projected that these policies will result in significant income declines for individuals earning less than $100,000 annually, while boosting incomes for those above this threshold.

    Rather than address class issues, California’s progressive project focusses on issues like gender, abortion and race. All provide excellent ways to virtue-signal without threatening the ruling cabal of the oligarchical elite, the government bureaucracy and the political class. This has led California to pass such measures as mandates for stores to have gender-neutral toy sections and allowing children to change genders without parental approval.

    But it is the race card that California’s feudalists rely on most to appeal to both the guilt-ridden white progressives, as well as the non-white majority. Their regulatory and tax policies may undermine the aspirations of minorities, notably Latinos and African Americans, but they offer support for race-based affirmative-action measures. This is despite the fact that Californian voters have twice rejected such efforts by wide margins.

    This hasn’t stopped the state’s nine-member Reparations Task Force. Last month, it recommended state payments of $223,200 to black descendants of slaves living in California. The bill for this could top $569 billion. Equally terrifying, the Racial Justice Act 2020 came into effect in California this year, allowing anyone serving time for a felony to retroactively challenge their conviction and sentencing, on the basis of systemic racial bias. This will essentially allow race to become a major deciding factor in convicting and sentencing criminals in California.

    Today, even in face of a record $68 billion deficit and a weak economy, the state’s political establishment seems reluctant to curb its spending or regulatory impulses.

    Rather than change course, Newsom and his allies employ budget tricks to deal with the deficit. The governor has even blamed climate change for much of the problem. California’s Democrats are not remotely serious about fixing the budget. Redistribution continues to ace out wealth creation, as epitomised by a pledge to provide undocumented immigrants, hard-working or not, with free healthcare. Meanwhile, middle- and working-class Californians pay ever higher premiums.

    These new costs are being imposed even as the high-tech industries keeping California’s economy afloat are beginning to erode. 

    Dissatisfaction with these and other state policies is becoming more widespread. In one recent survey of California opinion, some 57 per cent said the state was headed in the wrong direction, up from 37 per cent in 2020. Residents of most states hold positive feelings for their state, but not in California, where four in 10 people are considering an exit.

    As for the Republicans, the road to resurgence is filled with boulders, many of which are of the party’s own making. The potential is there. Barely 40 per cent of Latinos surveyed recently thought the Democrats were best suited to meeting the state’s challenges.

    Such multi-racial coalitions will be critical. California’s future preeminence can only be assured if we return to the kind of common sense, growth-oriented politics that served it so well in the past. The Golden State was once the world’s epicentre of human aspiration. We can’t just surrender it to the neo-feudalists.

    The Path to National Ruin

    If you live in California and vote for Progressives, you deserve what’s happening. The problem, of course, is the rest of the state does not deserve the madness you impose.

    Going one step further, if you are also for slave reparations in a state that never had slaves, then you deserve to lose your house to someone clearly more deserving than you. At a cost of $569 billion, the only way to pay these reparations is for people to be taxed out of their homes.

    What’s happening in California is also playing out in Illinois led by Progressive governor J. B. Pritzker.

    At the city level look at policies by Chicago by mayor Brandon Johnson, New York City mayor Eric Adams, Boston mayor Michelle Wu, and San Francisco mayor London Breed.

    “Wu has argued for charges including shoplifting and disorderly conduct to be beyond the reach of prosecutors along with other serious crimes including the receiving of stolen property and even driving with a suspended license.”

    There are too many Progressive idiots to name them all.

    February 4, 2024: Cost of Running a McDonalds Jumps $250,000 in CA Due to Minimum Wage Hikes

    March 26,2024: California Restaurants Cut Jobs as Fast-Food Wages Set to Rise

    March 30, 2024: California’s Deficit Is $222 Billion and the State is $1.6 Trillion in Debt

    April 6, 2024: California Bill Would Create a Legal Right to Ignore Boss’s Emails After hours

    Congratulations Overdue

    Apologies offered. I failed to congratulate California when it passed Washington D.C. to take the highest unemployment rate in the nation.

    California Leads the Nation in New Unemployment Claims

    Also note the surge in unemployment claims is led by California.

    On June 13, 2024 I noted Initial Unemployment Claims Jump the Most Since August 2023

    Congratulations to Newsom

    Rubio’s went bankrupt in 2020 thanks to Newsom’s covid lockdowns.

    Then in 2024, Newsom bankrupted the chain again.

    What other governors can make such a claim?

    What Happened to the Biden Surge After Trump Was Convicted?

    For those who missed it, please see What Happened to the Biden Surge After Trump Was Convicted?

    If Biden were to win, promotion of economically insane policies, reparations, and bailouts of states like California and Illinois would be in the cards. That is what’s at stake in the election, but few see it.

    If that isn’t the future you would like for the US, then think about how you vote.

    Tyler Durden
    Sun, 06/16/2024 – 19:50

  • "No Place In The Public Discourse": The Connecticut Bar Association Warns Critics Of Trump Prosecutions
    “No Place In The Public Discourse”: The Connecticut Bar Association Warns Critics Of Trump Prosecutions

    Authored by Jonathan Turley,

    This week, I have received emails from Connecticut bar members over a message posted by President Maggie Castinado, President-Elect James T. (Tim) Shearin, and Vice President Emily A. Gianquinto warning them about criticizing the prosecutions of former President Donald Trump. The message from the bar leadership is chilling for those lawyers who view cases like the one in Manhattan as a raw political prosecution. While the letter does not outright state that such criticism will be considered unethical conduct, it states that the criticism has “no place in the public discourse” and calls on members to speak publicly in support of the integrity of these legal proceedings.

    The statement begins by warning members that “words matter” but then leaves the ramifications for bar members dangling on how it might matter to them. They simply note that some comments will be viewed as “cross[ing] the line from criticism to dangerous rhetoric.”

    According to the Connecticut Bar, it is now considered reckless and unprofessional to make analogies to show trials or to question the integrity of the legal system or the judges in such cases.

    For example, criticizing Judge Juan Merchan for refusing to recuse from the case is considered beyond the pale. Many lawyers believe that his political contributions to Biden and his daughter’s major role as a Democratic fundraiser and activist should have prompted Merchan to remove himself (and any appearance of a conflict). I have been more critical of his rulings, which I believe were both biased and wrong.

    Yet, the Bar is warning lawyers that such comments can cross the line. The letter assures members that they are free to criticize but warn that attacking the ethics of a judge or the motivations behind these cases is dangerous and could spark violence.

    I have previously denounced overheated rhetoric and share the concern over how such rage rhetoric can encourage violence. After the verdict, I immediately encouraged people not to yield to their anger, but to trust our legal system. I believe that the verdict in New York may ultimately be overturned. I also noted that I do not blame the jury but rather the judge and the prosecutors for an unfounded and unfair trial.

    Of course, the concern over rage rhetoric runs across our political spectrum. While rarely criticized in the media, we have seen an escalation of reckless rhetoric from the left. For example,  Georgetown Law Professor Josh Chafetz declared that “when the mob is right, some (but not all!) more aggressive tactics are justified.”

    My concern is not with the plea for lawyers to take care that their comments do not encourage such “aggressive tactics.” The problem is the suggestion that lawyers are acting somehow unprofessionally in denouncing what many view as a two-tier system of justice and the politicalization of our legal system.

    Like many, I believe that the Manhattan case was a flagrant example of such weaponization of the legal system and should be denounced by all lawyers. It is a return, in my view, to the type of political prosecution once common in this country.

    For those lawyers who view such prosecutions as political, they are speaking out in defense of what they believe is the essence of blind justice in America. What is “reckless” to the Connecticut Bar is righteous to others. Notably, the Bar officials did not write to denounce attacks on figures like Bill Barr or claims that the Justice Department was rigging justice during the Trump years.

    Likewise, the letter focuses on critics of the Trump prosecutions and not the continued attacks on conservative jurists like Justice Samuel Alito. It has never published warnings about those calling conservative justices profanities, attacking their religion, or labeling them “partisan hacks” or other even “insurrectionist sympathizers.” Liberal activists have been calling for stopping conservative jurists “by any means necessary.”

    In Connecticut, Sen. Richard Blumenthal has warned conservative justices to rule correctly or face “seismic changes.” That did not appear to worry the bar. Likewise, Senate Majority Leader Chuck Schumer also declared in front of the Supreme Court “I want to tell you, Gorsuch, I want to tell you, Kavanaugh, you have released the whirlwind, and you will pay the price.”

    The letter goes further and suggests that lawyers should speak publicly in support of trials like the one in Manhattan, a view that ignores the deep misgivings over the motivations and means used in New York to target an unpopular figure in this city. You have the top Bar officials calling on lawyers to take a public position that is opposed by many lawyers and citizens in defending the integrity of these prosecutions. Imagine the response if the Idaho Bar called on its lawyers to speak out against these cases and declared that it is reckless or unprofessional to defend them.

    I expect that, in the very liberal Bar of Connecticut, the letter is hardly needed. Indeed, this letter is likely to be quite popular.  Yet, I would have thought that Bar officials would have taken greater care to respect the divergent opinions on these trials and the need to avoid any statements that might chill the exercise of free speech.

    Ironically, the letter only reinforced the view of a legal system that is maintaining a political orthodoxy and agenda. These officials declare that it is now unprofessional or reckless for lawyers to draw historical comparisons to show trials or to question the motives or ethics underlying these cases. They warn lawyers not to “sow distrust in the public for the courts where it does not belong.” Yet, many believe that there is an alarming threat to our legal system and that distrust is warranted in light of prosecution like the one in Manhattan.

    As discussed in my new book, The Indispensable Right: Free Speech in an Age of Rage, critics of political prosecutions under the Crown and during the Adams Administrations were often threatened with disbarment or other legal actions for questioning the integrity or motives of judges or prosecutors.

    It is not enough to say “well that was then and this is now.” The point is that the Bar Association also has a duty to protect the core rights that define our legal system, particularly the right of free speech.

    Again, these officials are not threatening Bar action against critics of these cases. However, as evidenced by the emails in my inbox, it is being taken as a warning by many who hold misgivings over these prosecutions.

    Our legal system has nothing to fear from criticism. Indeed, free speech strengthens our system by exposing divisions and encouraging dialogue. It is orthodoxy and speech intolerance that represent the most serious threats to that system.

    Here is the message in its entirety:

    Dear Members,

    Words matter. Reckless words attacking the integrity of our judicial system matter even more.

    In the wake of the recent trial and conviction of former President Donald Trump, public officials have issued statements claiming that the trial was a “sham,” a “hoax,” and “rigged”; our justice system is “corrupt and rigged”; the judge was “corrupt” and “highly unethical”; and, that the jury was “partisan” and “precooked.” Others claimed the trial was “America’s first communist show trial”—a reference to historic purges of high-ranking communist officials that were used to eliminate political threats.

    These claims are unsubstantiated and reckless. Such statements can provoke acts of violence against those serving the public as employees of the judicial branch. Indeed, such statements have resulted in threats to those fulfilling their civic obligations by sitting on the jury, as evidenced by social media postings seeking to identify the names and addresses of the anonymous jurors and worse, in several cases urging that the jurors be shot or hanged. As importantly, such statements strike at the very integrity of the third branch of government and sow distrust in the public for the courts where it does not belong.

    To be clear, free speech includes criticism. There is and should be no prohibition on commenting on the decision to bring the prosecution, the prosecution’s legal theory, the judge’s rulings, or the verdict itself. But headlines’ grabbing, baseless allegations made by public officials cross the line from criticism to dangerous rhetoric. They have no place in the public discourse.

    It is up to us, as lawyers, to defend the courts and our judges. As individuals, and as an Association, we cannot let the charged political climate in which we live dismantle the third branch of government. To remain silent renders us complicit in that effort.

    Respect for the judicial system is essential to our democracy. The CBA condemns unsupported attacks on the integrity of that system.

    Sincerely,

    Maggie Castinado

    President,

    Connecticut Bar Association

    James T. (Tim) Shearin

    President-Elect,

    Connecticut Bar Association

    Emily A. Gianquinto

    Vice President,

    Connecticut Bar Association

    *  *  *

    Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of “The Indispensable Right: Free Speech in an Age of Rage” (Simon and Schuster, 2024).

    Tyler Durden
    Sun, 06/16/2024 – 18:40

  • Obama And Kimmel Puppet Biden Through $30 Million LA Fundraiser As Trump Dazzles Detroit
    Obama And Kimmel Puppet Biden Through $30 Million LA Fundraiser As Trump Dazzles Detroit

    President Joe Biden was flanked by Barack Obama and Jimmy Kimmel Saturday night for what turned out to be a record-setting $30 million fundraising haul headlined by Obama, George Clooney and Julia Roberts. 

    Following the Alex Soros blueprint, instead of talking up their accomplishments and future plans (oh, right), the trio laid into Trump over his conviction on 34 counts in his ‘hush-money’ trial (that was so absurd that top Democrats advised not bragging about it).

    “Look, part of what has happened in the last several years is we’ve normalized behavior that used to be disqualified,” said Obama. “The other spectacle of the nominee of one of the two major parties is sitting in court and being convicted by a jury of his peers on 34 counts. You have his foundation, it’s not allowed to operate because it was engaging in monkey business and not actually philanthropic.”

    At one point Obama had to guide a confused Biden offstage.

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    The event comes one week after Trump hauled in roughly $27.5 million from three fundraisers in California and one in Las Vegas – where he pledged to defeat “crooked Joe Biden” in November, and return to the White House to pursue an “America First” policy that will minimize foreign intervention and secure the US border.

    And while the Democrats partied for Biden, Trump was able to rock a Detroit crowd without the aid of a former president.

    Though it seems like security at the Detroit Convention Center didn’t do their job, so the Secret Service had to shut the place down and re-wand everyone.

    Once things got going, the event went off without a hitch.

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    https://platform.twitter.com/widgets.jsEarlier in the day, Trump visited with the black community.

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    Tyler Durden
    Sun, 06/16/2024 – 18:05

  • An Army Special Forces Veteran Creates American Flags That Don't Burn
    An Army Special Forces Veteran Creates American Flags That Don’t Burn

    By Blake Stilwell if Military.com

    In many ways, Kyle Daniels is your typical Midwestern American. He grew up in a patriotic household, many of his family members joined the military, and his father was very meticulous about flag etiquette — probably more so than your average American.

    “Every morning we put it out at sunrise, we’d go out every night after work, bring it in and fold it the right way. It was very ceremonious,” Daniels recently told Military.com. “It was instilled in me very early that this flag represents the freedoms we enjoy today. It’s not just about the Fourth of July, it’s not just about the special days; it’s about every day. And that was something that I held near and dear to my heart.”

    That patriotism was never lost on him. Daniels would grow up to join the ranks of Army Special Forces. When he left the service, he was looking for what to do in the next phase of his life. He found the opportunity to combine his love of country with his post-military career — a way to defend Old Glory itself, even if he’s not there to do it personally.

    “I walked right out of a college class in 2003 and directly to a recruiter‘s office to sign [on] the dotted line,” Daniels said. “Within three months, I was in boot camp. I was a lost soul and just did not feel any compelling purpose for college. This was around the time that the war in Iraq kicked off, and I just knew I could do more there.”

    Daniels joined the Army’s 18X program, which allowed him to go directly into Special Forces training. After boot camp, he went through Airborne School and the Special Forces Q-Course; by 2005, he was assigned to the 10th Special Forces Group. A year later, he finally made it to Iraq for the first of two deployments there. He stepped off a C-17 Globemaster III the night he arrived to see the American flag flying on the airfield.

    “I remember not knowing what to expect going into combat,” Daniels recalled. “I was 22, and it was my first time actually going to war. I remember being at peace with it, but still not knowing what to expect. I’ll never forget coming off of a C-17 and seeing, very distinctly, the flag flying right on the airfield in Baghdad.  

    “Something about seeing that, knowing where I was, brought me a sense of comfort, and that’s a lot of what the flag really, really instills in me. No matter where I am in the world, if I see that flag, there’s going to be some sense of comfort or reassurance.”

    When Daniels left the U.S. military in 2010, he fulfilled a promise to his dad to finish college, but he struggled to figure out what he would do next. Like many veterans, he sought the help of friends who had already transitioned. A former teammate, Jason Van Camp, connected him with Warrior Rising, a nonprofit that helps veterans get their business ideas off the ground. Daniels and Van Camp talked at length about the politics of the country, and didn’t like what they saw. 

    At the time, tensions were high in the United States, especially around the flag. Daniels saw protests around the 2016 presidential election and protests against American activities all over the world in which flags were being burned. He naturally felt the discourse didn’t represent the values that were instilled in him — with flags being burned.

    “That really resonated with me,” he said. “I’ve seen the sacrifice people make for that flag and for the freedoms that it represents. I didn’t really know what to do at the time, but the idea came about. I was like, ‘I wish there was a flag that didn’t burn.’ And then we had the idea: Let’s make one.”

    So they did, and by 2020, Firebrand Flags was born.

    The material used to create these flags uses the same Kevlar-based fire retardant and manufacturing processes used to create U.S. military combat uniforms. They’re also engineered for durability. Anyone who’s flown a flag from their front porch knows that after even just a year of exposure to the elements, flags become frayed and discolored. Firebrand’s classic flag also prevents both. They are also, of course, made in the United States, with each star hand-sewn onto the blue field.

    “We wanted a flag that not just embodied the fighting spirit that our men and women have but could actually defend itself from people who wanted to do it harm, people who wanted to disparage the flag or burn the flag,” Daniels said. “It was important for me that the stars were hand-sewn, and everything else is made in America.”

    For a limited time, the company is offering a special, World War II-era vintage 48-star flag that was airdropped into Normandy, France, with the cast of the HBO series “Band of Brothers” to commemorate the 80th anniversary of the D-Day invasion. To learn more about the process of making flags that won’t burn, Kyle Daniels or more about Firebrand’s “Old Glory” classic flag, visit the Firebrand Flags website.

     

    Tyler Durden
    Sun, 06/16/2024 – 17:30

  • "Possible Chemical Agent" Released At Pride Event In Baltimore
    “Possible Chemical Agent” Released At Pride Event In Baltimore

    The Baltimore City Police Department is investigating a “possible chemical agent” released at a Pride event Saturday evening in the downtown area that sparked a “mass exodus.” 

    Local media outlet Capital Gazette said a “possible chemical agent” and fireworks were released during the Baltimore Pride parade around 830 pm local time. 

    Baltimore Police has yet to confirm the type of chemical agent that was released. The combination of the chemical agent and fireworks caused the large crowd to panic, scattering in different directions and resulting in several injuries. 

    “Our officers are diligently reviewing the surveillance video to gather all the necessary information and determine the sequence of events,” said a Baltimore Police public information officer, Freddie Talbert.

    Here’s a video of the chaos. 

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    In mid-May, the State Department renewed a global security warning for Americans overseas, adding LGBTQ folks face an “increased potential for foreign terrorist organization-inspired violence.” 

    Domestically, FBI Director Chris Wray warned of the threat of a ‘coordinated attack’ in the US thanks to President Biden’s disastrous open southern borders.

    Tyler Durden
    Sun, 06/16/2024 – 16:55

  • "There Seems To Be A Sense Of Incredulousness Around What Is Going On In The Markets"
    “There Seems To Be A Sense Of Incredulousness Around What Is Going On In The Markets”

    By Peter Tchir of Academy Securities

    Same but different

    A few topics that we have touched on over the past few months continue to be relevant. What is interesting is that a few of those topics now seem to have garnered far more attention than in the past.

    • Discrepancies and “weirdness” in the jobs report. Best of Times, Worst of Times picked up on many of these, and not only have they been topics of discussion, but the Fed Chair was also specifically asked about them. I still think that the extremely high percentage of jobs “created” by the birth/death model and the shocking number of part-time vs. full-time jobs need to be better addressed (Who Needs Enemies?). At the very least, everyone finally seems to be trying to figure out the “real” state of the job market, and not just cherry picking the data that suits their needs.

    • Is 10% the new normal? While it took Apple 2 days to achieve a roughly 10% move, other large- cap companies are also jumping 10% or more in a single day. However, some others are losing that much in a day. As discussed in Is 10% the New 1% that is likely a sign that the market is more controlled by options, day traders, and “machines” rather than “traditional” investors. Probably a sign that liquidity has very little depth. This topic came up a LOT last week. Not sure what caused the spike in this topic, but even some “believers” in some stocks seemed to question what the heck is going on. I don’t think I’ve once said or written about stocks being in a bubble, and I am not doing that today, but for the first time, there seems to be a sense of “incredulousness” around what is going on in the markets. That could mean that we have another big leg higher as everyone gets “sucked in” to the market, but the discussions felt more disturbing than healthy.

    • How Tight Can Credit Spreads Go? Last weekend’s report generated a lot of back and forth on the subjects that we delved into. The “private credit” and “return of bank lending” probably generated the widest range of comments, though I did find out several people still have their IG 200 hats from 2008! If you missed this one, I think it is worth a read, even though credit spreads weakened a touch on the week.

    • “Extreme” Politics and Elections. It has been impossible not to notice how “polarized” so many things have become on the political front. While we are still at the “presumptive” nominee stage in the U.S., it feels like we are in the heart of the campaign already. But that we already knew. What I have to admit is that I didn’t realize this is apparently a global phenomenon. Markets were actually impacted by elections in France.

    • I, for one, did not have European Debt Crisis on my bingo card, and we are a far away from that, but maybe I should have? At first, the move was attributed to the fact that the right wing in France had done well. That those pushing a more “domestic” focused agenda had won. A trend that we have been seeing across the globe. It goes hand in hand with deglobalization. I am not particularly knowledgeable about French politics, so I went to those who are. What I found interesting is the real concern that the far left AND far right will do very well in upcoming elections. That would leave a “centrist” like Macron potentially short of support. I had not been thinking in terms of a bipolar world with respect to European elections. Now, maybe we have to? Will that be disruptive? Will it turn out that Brexit was merely the beginning of a trend towards countries “re-thinking” the EU? Probably far too early to say anything like that, but this issue, which was below my radar screen, has suddenly popped up and needs to be thought about more. This of course already comes on the heels of some interesting elections in Taiwan (pro-independence), India (Modi losing his grip?), and Mexico (a change in leadership as the border has become a vital part of the U.S. election). I’ve been so focused on U.S. politics and thinking about how the election is likely to play out here that I paid short shrift to Europe and that has to change.

    Breadth.

    • Every day I read some new reports highlighting how few stocks are at their 52-week highs, while the index is setting records, or some other “anomaly.” I chose the Nasdaq 100, but the chart isn’t too dissimilar if you go with the S&P 500 vs the equal weighted S&P 500. The fact that the equal weight index isn’t at its highs and has barely budged in the past few weeks as the market cap weighted index soared tells you just how narrow this rally has been. It has been extremely AI driven and continues to be AI driven. That is the main reason I included ARKK. It is my proxy for “innovation” and continues to meander, while the Nasdaq 100 soars! So much of the return is being generated by a handful of large companies with great stories. But that leaves me (and I think a lot of others) wondering how long this bifurcated market can last? I am not sure, and the answer to that question might be “longer than we think” as many investors are staring nervously at Europe, given the political backdrop and tricky economic situation (the ECB cut, but raised their inflation expectation, while overall growth seems to remain behind that of the U.S.). Presumably, money coming from Europe to the U.S. will go into index funds, creating more demand for the most heavily weighted stocks. Personally, I had much more “fun” late last year when I was pounding the table for the “laggards” to outperform (and even more “fun” when that proceeded to occur). But, right now, I’m not sure that outperformance will play out, unless it is in a down market. The “catch-up” scenario would make a lot of sense if the economy was firing on all cylinders, but that isn’t my outlook for the coming months. In the meantime, we can watch VIX drop, and wait for it to cross 10, like it did back in early 2018/late 2017.

    We will continue to focus on these issues, and it is interesting that they seem to be bubbling to the top (though off-hand, I’m not sure if that is good or bad for markets). The fact that the 10-year Treasury traded as high as 4.48% (the high end of our 4.3% to 4.5% range) and traded as low as 4.19% on the week (below the low end of our range) doesn’t give me a lot of comfort about the depth of liquidity. The CPI data and the Fed data helped, but the real boost seemed to come from concerns about Europe.

    Hopefully, you can enjoy Father’s Day with family and friends and brace yourself for what is likely to be another round of corporate bond issuance as borrowers benefit from the reprieve in yields.

    Tyler Durden
    Sun, 06/16/2024 – 16:20

  • Eight Israeli Soldiers Killed In One Of Single Deadliest Incidents Since Oct 7
    Eight Israeli Soldiers Killed In One Of Single Deadliest Incidents Since Oct 7

    The Israel Defense Forces (IDF) on Saturday suffered a mass casualty event in southern Gaza after a Hamas attack scored a direct hit on an armored vehicle which was carrying a group of soldiers.

    Eight Israeli solders were killed after the infantry transport vehicle was hit by an anti-tank missile, the IDF said, in what’s being widely called one of the single deadliest single incidents involving Israeli soldier casualties since October 7. The military said it may have also been the result of an explosive device planted in the area.

    IDF file image, AFP/Getty

    The IDF said the troops were engaged in an offensive against “terrorist infrastructure” shortly after 5am Sunday in the northwestern part of the Tal al-Sultan refugee camp, which lies just west of Rafah. They were part of the Combat Engineering Corps’ 601st Battalion and all ranged in age from 19 to 23.

    “According to the information we have at this point one of the engineering vehicles in the convoy was involved in an explosion that was apparently caused by explosive devices planted in the area or as a result of anti-tank missile fire,” IDF Spokesperson Daniel Hagari described in a press briefing.

    While the findings are still preliminary, military investigators believe there’s a possibility that the explosion was so devastating because the anti-tank found ignited explosive material aboard the armored vehicle.

    “The current assessment is that the ‘Nemera’ armored vehicle got hit as a result of an explosion of a side bomb. In addition, on the vehicle there were engineering tools that include explosive materiel,” the IDF statement said.

    “The explosion was significant and may have been caused by the ignition of the explosive materiel on the vehicle. All this is not supposed to happen and therefore the incident is being examined,” Hagari continued.

    He further explained that the blast and fire was so expansive that it was difficult to identify and locate the bodies of those killed.

    “Today we received another painful reminder of the price of war and that brave warriors and heroes were willing to sacrifice their lives for the state of Israel, which is the common home of all of us: Druze, Jews, Bedouin, Muslims and Christians. All citizens of Israel, our hearts and thoughts are with the families at this difficult time,” Hagari added, it what appeared wording geared toward pushing back against international criticism of a Jewish ethno-religious state.

    Al Jazeera has aired footage of the destroyed “Namer” Israeli personnel carrier being towed out of southern Gaza…

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    Meanwhile, Hamas and its supporters appeared to positively celebrate the mass troops casualties. The group issued a statement saying “Our painful strikes against the enemy will continue everywhere they are present, and the occupying army will find nothing but death traps.”

    Hamas’ al Qassam Brigades confirmed it had “carried out a complex ambush against enemy vehicles” operating in Tal al-Sultan. According to its account, the attack started by successfully hitting a military bulldozer which caught fire. The initial rescue troops on the scene were then struck by the anti-tank missile.

    Tyler Durden
    Sun, 06/16/2024 – 15:45

  • Musk Says "Eliminate Electronic Voting Machines" After Dominion's Puerto Rican Imbroglio
    Musk Says “Eliminate Electronic Voting Machines” After Dominion’s Puerto Rican Imbroglio

    Elon Musk on Saturday suggested that electronic voting machines should not be used in elections, as “The risk of being hacked by humans or AI, while small, is still too high.”

    Musk was responding to the recent news that Puerto Rico is ‘reviewing’ their contract with Dominion Voting Systems after a ‘software issue’ caused machines supplied by the company to miscalculate vote totals, according to the country’s elections commission.

    According to AP, vote counts reported by Dominion machines were lower than paper counts in some cases, and some machines reversed totals or reported zero votes for some candidates.

    “The concern is that we obviously have elections in November, and we must provide the (island) not only with the assurance that the machine produces a correct result, but also that the result it produces is the same one that is reported,” said Padilla.

    The island nation used more than 6,000 Dominion voting machines in their June 2 primary.

    The company claims that the software issues stemmed from the digital files used to export the results from the primaries.

    The President of Puerto Rico’s House of Representatives, José Varela, has Dominion’s back – calling for Padilla to appear at a public hearing on Thursday to address the issues.

    “We cannot allow the public’s confidence in the voting process to continue to be undermined as we approach the general elections,” he said.

    The problems called to mind the island’s botched 2020 primaries, when a lack of ballots at some centers forced the government to reschedule voting in a first for the U.S. territory.

    On June 2, Puerto Rico held primary elections to select gubernatorial candidates for the pro-statehood New Progressive Party and the Popular Democratic Party, which supports the island’s territorial status.

    In a surprise upset, Jenniffer González, Puerto Rico’s congressional representative, beat Gov. Pedro Pierluisi in the primary held by the New Progressive Party. Meanwhile, Puerto Rico Rep. Jesús Manuel Ortiz defeated Sen. Juan Zaragoza in the primary held by their Popular Democratic Party.

    Both parties reported hundreds of ballots showing inaccurate results, with the PNP reporting over 700 errors and the PPD pointing to some 350 discrepancies. These inaccuracies affected ballots for positions including governor, mayor and resident commissioner. -AP

    Following the discrepancies, the elections commission conducted a full vote tally and audited paper receipts from hundreds of ballot-counting machines – after which Ombudsman Edwin García Feliciano called the incident a “threat” to the island’s electoral system, and called on the governor and the island’s federal control board that oversees the island’s finances to establish a plan to improve election security.

    “All planning is based on resolving emergencies, including unlikely ones,” said García Feliciano, adding “But predictable circumstances, which are well known to the public, cannot be addressed by improvisation and in a rush.”

    The island’s general election will be held in November, where citizens will choose a new governor and local representatives.

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    Meanwhile in Georgia, a federal judge ruled in February that Georgia’s electronic voting machines had issues related to security and transparency – yet she declined to immediately halt the use of said machines.

    Despite identifying several problems with the state’s election system, US District Judge Amy Totenberg allowed Georgia to continue using the current electronic voting system while acknowledging the plaintiffs’ concerns about the risks to the integrity of the voting process.

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    Also meanwhile;

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    In March, Headline USA reported that during defamation lawsuit between Dominion Voting Systems and former Overstock.com CEO and Donald Trump supporter Patrick Byrne, one of Byrne’s attorneys, Stephanie Lambert, who was later arrested, leaked evidence that foreign nationals remotely accessed voting machines used in Michigan in the 2020 elections.

    In February of 2022, top officials at a U.S. federal cybersecurity agency are urging a judge not to authorize at this time the release of a report that analyzes Dominion Voting Systems equipment in Georgia, arguing doing so could assist hackers trying to “undermine election security.”

    Meanwhile, officials in Fulton County, Pennsylvania sued Dominion in September of 2022, claiming that the county had  allegedly discovered that a “python script” had been installed on one device, which was “connected to an external device on an external network” reportedly located in Canada.

    The script “can exploit and create any number of vulnerabilities including, external access to the system, data export of the tabulations, or introduction of other metrics not part of or allowed by the certification process,” according to the filing.

    Officials also claimed that the machines were running a July, 2016 version of Windows Defender, which would have left the machine vulnerable to “viruses or malicious software” created after that date.

    That civil breach of contract case was tossed by 88-year-old federal Judge Sylvia Rambo (Carter appointee), who wrote that the “voting system functioned substantially as intended, and by all appearances, those actual errors which did occur were minuscule and had no material impact on the functioning of the devices.” Meanwhile, the State Supreme Court found Fulton in contempt for allowing multiple third-party inspections of Dominion machines used in the 2020 election, and a contractor, Yaacov Apelbaum, has accused county attorney Stefanie Lambert (also of the Byrne case), of asking him to falsify a report alleging that Dominion machines had been hacked.

    Last April, Dominion walked away with a $787M settlement from Fox News over reports that its equipment switched votes in the 2020 US election. Days later, host Tucker Carlson was out (which Carlson says a board member told him was part of the settlement).

    Amazing.

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    Tyler Durden
    Sun, 06/16/2024 – 14:35

  • "Worst He's Ever Been" – G7 Dignitaries Admit Biden Was "Losing Focus"
    “Worst He’s Ever Been” – G7 Dignitaries Admit Biden Was “Losing Focus”

    Authored by Steve Watson via modernity.news,

    A report quoting insiders at the G7 summit this past week has warned that Joe Biden struggled to focus at the meeting of world leaders in Puglia, Italy. 

    According to one source, Biden is “the worst he’s ever been,” with attendees from other delegations saying it was “embarrassing.”

    As we highlighted, Biden was seen wandering off like a dementia patient and looking perpetually confused.

    Watch: Biden Wanders Off On His Own At G7 Meeting Like A Dementia Patient 

    The footage of Biden prompted mocking headlines. 

    Biden also skipped the dinner later in the evening, before returning to the US.

    Of course, the Biden campaign claims it’s all “lies” and the footage of him was “taken out of context.”

    Biden’s campaign spokesperson Adrienne Elrod described the headlines and reports as “disinformation” and suggested that social media platforms should prevent it from being shared.

    It has also been reported that the debate between Biden and Trump scheduled for June 27 will see the pair seated at tables at the request of Biden’s campaign.

    Trump told the hosts of the Cats & Cosby Show last month “I hear now we’re sitting at tables. I don’t want to sit at a table.”

    “I said, ‘No, let’s stand.’ But they want to sit at a table,” Trump further remarked, adding “So we’ll be sitting at a table as opposed to doing it the way you should be, in my opinion, in a debate.”

    Meanwhile back at the ranch…

    Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

    Tyler Durden
    Sun, 06/16/2024 – 14:00

  • 'Annexation & Elimination' Of Taiwan Is China's Great National Cause, President Lai Says
    ‘Annexation & Elimination’ Of Taiwan Is China’s Great National Cause, President Lai Says

    Taiwan’s recently installed new President William Lai Ching-te issued a blistering critique of China in a speech on Sunday while calling on Taiwan’s people to resolutely determine their own fate.

    He addressed cadets and officers at the Whampoa Military Academy in Kaohsiung, located in the self-ruled island’s south. Lai, who has repeatedly been denounced as an extremist by Beijing since entering office last month, warned his armed forces that China holds as its top priority the “annexation” and “elimination” of Taiwan.

    Image source: CNA

    His theme was that the cadets must recognize the challenges of the “new era” – which has included Taipei offering talks but which have been frequently rebuffed by China, according to Lai’s remarks. China’s military has also continued intermittent drills which threaten the island.

    “The biggest challenge is to face the powerful rise of China, [which is] destroying the status quo in the Taiwan Strait and regards Taiwan’s annexation and the elimination of the Republic of China as the great rejuvenating cause of its people,” he said.

    “The highest mission is to bravely take up the heavy responsibility and grand task of protecting Taiwan, and safeguarding the peace and stability in the Taiwan Strait,” he added.

    Shortly after Lai’s inauguration last month, the Chinese PLA military staged large drills around the island, which included naval ships and warplanes crossing the Taiwan Strait median line.

    As for what Taiwan’s president is offering in terms of talks to deescalate tensions with Beijing, he told Time magazine days ago in an interview:

    • First, the PRC should recognize that the Republic of China exists. They should be sincere in building exchanges and cooperation with the popularly-elected legitimate government of Taiwan.
    • Second, each issue should be mutually beneficial and reciprocal. For example, if Taiwan allows tourists to go to China, they should allow tourists to visit Taiwan. And if we let our students go to China, their students should be allowed to come.
    • Third, as we conduct exchanges and cooperate with one another, we should share a common conviction to enhance the well-being of people on both sides of the Taiwan Strait, working toward an objective of peace and mutual prosperity.

    During his inauguration speech last month, the newly sworn in Lai had also laid out, “So long as China refuses to renounce the use of force against Taiwan, all of us in Taiwan ought to understand that even if we accept the entirety of China’s position and give up our sovereignty, China’s ambition to annex Taiwan will not simply disappear.”

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    He vowed that his administration aims to “further entrench Taiwan’s democracy” and “maintain peace in the Indo-Pacific.” Meanwhile, Taipei continues to receive hundreds of millions of dollars in military equipment from the United States toward that end, and recently there have been reports of US Marines deployed to Taiwan-controlled outer islands which are close to the Chinese mainland.

    Tyler Durden
    Sun, 06/16/2024 – 13:25

  • One In Three People Are Boycotting Brands Over Gaza War, Poll Finds
    One In Three People Are Boycotting Brands Over Gaza War, Poll Finds

    Via Middle East Eye

    More than one in three people say they are boycotting a brand viewed as supporting a side in Israel’s war on Gaza, with oil-rich Gulf states and large Muslim-majority countries leading the way. 

    The latest edition of an annual Trust Barometer report from public relations firm Edelman underscored how sharp divides over the war are causing consumers across the globe to take a stance with their wallets. The survey polled 15,000 consumers across 15 countries, including France, Saudi Arabia, the UK and the US.

    The poll didn’t say who respondents sided with in the war, but out of the top five countries listed as engaged on boycotting brands over Gaza, three are Muslim-majority nations: Saudi Arabia, the UAE and Indonesia. India also has a sizeable Muslim minority. Germany was the fifth country. 

    via Bloomberg

    The Boycott, Divestment and Sanctions (BDS) movement has gained traction across the world as it aims to put pressure on Israel over its violations of international law and repression of Palestinians. However, it has also faced stiff opposition in the US and other western states where sizeable numbers of the population are sympathetic to Israel. 

    Saudi Arabia saw the highest number of respondents, 71 percent, saying that they were boycotting brands over their perceived support for one side. Saudi Arabia’s population is overwhelmingly pro-Palestine.

    A poll conducted in December by the Washington Institute for Near Eastern Affairs, a pro-Israel think tank, found that 96 percent of Saudi nationals believe Arab countries should cut ties with Israel in response to its war on Gaza.

    Before the war, the US was actively working towards an agreement that would see Israel and Saudi Arabia normalise relations. In the UAE, 57 percent of respondents said they were boycotting brands over the war.

    In Indonesia, the world’s largest Muslim-majority country, more than one in two people also said they were boycotting brands.

    The number of respondents from Arab and Muslim countries who are boycotting products over the war on Gaza is substantially higher than the global average of 37 percent, slightly more than one in three respondents.

    ‘Consumer nationalism’ soars in the Gulf

    The boycotts are being felt in Western corporate boardrooms.

    In March, retail giant Alshaya Group, which owns the rights to Starbucks in the Middle East, decided to begin laying off over 2,000 staff in the region and North Africa, or four percent of its total workforce, as a result of consumer boycotts linked to Gaza.

    McDonald’s CEO Chris Kempczinski also said earlier this year that sales had been weaker in Muslim-majority countries – such as Malaysia and Indonesia – as well as across the Middle East.

    McDonald’s sparked outrage among pro-Palestine activists in October when its Israel franchise announced it was giving free meals to Israeli soldiers in its branches in the country. In Pakistan, the franchise dropped its prices and was forced to put out a statement distancing themselves from McDonald’s in Israel.

    “The ongoing impact of the war on these franchisees’ local business is disheartening and ill-founded,” Kempczinski said on Monday, speaking to analysts on the company’s conference call.

    Consumers in the Gulf region have long been a prize for Western corporations because their young populations have relatively high purchasing power. Their oil and gas-producing economies have not been hit by wars and crises like other Arab states since the Arab Spring.

    Middle East Eye has reported how consumers in Oman, a key Western partner, have been boycotting western goods over the support the US and its allies have provided Israel. They have switched from drinks like Mountain Dew to Kinsa, a Saudi drink brand. In Pakistan, local brands have started producing local products to replace western soft drinks and cosmetics. 

    The poll also picked up on rising consumer nationalism in Gulf states. The number of respondents in Saudi Arabia and the UAE saying they are buying their country’s brands over foreign ones jumped 13 and 10 points, respectively.

    Tyler Durden
    Sun, 06/16/2024 – 12:50

  • Watch: Badly Wounded Gordon Ramsay Shows Off Massive Bruise, Says Bike Helmet Saved His Life
    Watch: Badly Wounded Gordon Ramsay Shows Off Massive Bruise, Says Bike Helmet Saved His Life

    Gordon Ramsay has taken to social media to tell “all the dads out there” that they need to wear a helmet, after the 57-year-old celebrity chef was involved in a massive cycling accident in Connecticut.

    “I don’t care how short the journey is,” Ramsay said, shaking. “they’ve got to wear a helmet.”

    “I want to wish you all a happy Father’s Day, but please, please, please wear a helmet. If I didn’t, honestly, I wouldn’t be here now.“

    He then showed the camera a massive bruise.

    Watch:

    Ramsey said the accident took place earlier this week in Connecticut. He was rushed to the ER at Lawrence and Memorial Hospital, but clarified that the did not “break any bones or suffer any major injuries,” but was “a bit bruised up looking like a purple potato.”

    “I’m in pain. It’s been a brutal week. And I’m sort of getting through it.”

    Ramsay shared a photo of his damaged helmet on Instagram:

    So to all the cyclists out there, don’t be an idiot sandwich.

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

    Tyler Durden
    Sun, 06/16/2024 – 12:15

  • Prepare For The Repricing Of Risk Globally
    Prepare For The Repricing Of Risk Globally

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    There are no more “saves” available for the next market meltdown.

    The past 24 years can be viewed as an era in which risk declined due to the dynamics of globalization and financialization.

    The ascent of China as “workshop of the world” generated a deflationary wave of lower prices for products (due to lower labor costs and lower quality components) that blunted the inflationary impact of the global economies adding $150 trillion in debt since 2000. Global debt, public and private, now tops $315 trillion, 333% of global GDP.

    Absent the deflationary impact of globalization, this vast increase in money sloshing around would have sparked inflation. Absent the vast expansion of money via financialization, the expansion of production and consumption enabled by globalization could not have occurred.

    At the same time, central banks coordinated policies to steadily reduce interest rates, reaching effectively zero or negative rates (when adjusted for inflation) in 2009 and beyond. This reduction of rates far below historic norms enabled creditors to borrow more even as their debt service costs fell.

    Financialization vastly increased leverage and the commodification of credit/debt, enabling emerging-market nations and enterprises and consumers globally to increase their borrowing/spending.

    Globalization generated incentives for nations and their central banks to “play nice” and cooperate with other governments and banks to spur profitable (and happily deflationary) trade. These coordinated efforts enabled the global economy to avoid the potentially fatal disruptions of the Global Financial Crisis (GFC) in 2008-09.

    Despite localized droughts and extreme weather, global food production increased by expanding land in production and intensifying agricultural methods.

    All of these risk-reducing trends are reversing or reaching diminishing returns.

    Extreme weather events are increasing, leading to massive losses by insurers, a trend described in As Insurers Around the U.S. Bleed Cash From Climate Shocks, Homeowners Lose (New York Times)(seechart below):

    “In 2023, insurers lost money on homeowners coverage in 18 states, more than a third of the country, according to a New York Times analysis of newly available financial data. That’s up from 12 states five years ago, and eight states in 2013. The result is that insurance companies are raising premiums by as much as 50 percent or more, cutting back on coverage or leaving entire states altogether. Nationally, over the last decade, insurers paid out more in claims than they received in premiums, according to the ratings firm Moody’s, and those losses are increasing.

    The growing tumult is affecting people whose homes have never been damaged and who have dutifully paid their premiums, year after year. Cancellation notices have left them scrambling to find coverage to protect what is often their single biggest investment. As a last resort, many are ending up in high-risk insurance pools created by states that are backed by the public and offer less coverage than standard policies. By and large, state regulators lack strategies to restore stability to the market.”

    Much of the rising cost is a result of global insurance losses, which boost the reinsurance rates insurers must pay to cover the risks of extreme events generating extreme losses that push insurers into bankruptcy. Hawaii insurance chief doesn’t see carrier exit as costs rise:

    Reinsurance is something insurance companies buy to cover extraordinary losses, and it is part of a policy’s price. This reinsurance cost, which is tied to the global insurance industry, has increased 20% to 50% annually during the past several years, according to Ito.

    “The cost to insure homes or condos is going up because of this tremendous surge in the reinsurance costs,” he said.

    Ito said there were 23 climate-related disasters in the United States in 2023 that caused at least $1 billion in losses, and that in five of the past six years, the reinsurance industry incurred losses of over $100 billion worldwide.

    “Reinsurance is worldwide,” he said. “Events that happen in Europe, or in Asia, or in Kansas, or in Florida, all impact the cost of reinsurance that insurers pay regardless of where they write business.”

    The rising costs of insurance reflect a critical dynamic of risk: in a tightly bound, interconnected global system of finance and trade, risks arising anywhere in the system increase costs and risks throughout the system.

    This is the downside of increasing our dependence on tightly bound global systems to lower prices: disruptions and risk now spread rapidly to every node and participant in the global system: events far away trigger the cancellation of your insurance policy or an astounding increase in its cost.

    What were beneficial in the low-risk growth phase–increasing dependence on global capital and trade flows to lower prices and boost borrowing–are now sources of rising risk–risk that cannot be fully hedged even as the cost of hedges such as insurance rise sharply.

    Let’s consider the other dynamics turning a low-risk era into an unstable, high-risk era.

    Our starting point in an examination of risk is the nature of the global system we are dependent on / embedded in. The dominant economic model in this system is “the market,” an idealized construct in which buyers and sellers “discover the price” of everything from currencies, risk, goods, services, labor and capital, and any scarcities are filled by new production (as people rush to reap higher profits by expanding production) or substitution (beef too expensive? Replace it with chicken).

    This construct creates a happy illusion: the system operates as a closed system in which all the moving parts are visible and measurable. This creates the illusion that the system is inherently self-correcting and therefore stable, as buyers, sellers, producers and consumers all pursuing their own self-interests will maintain what’s known as dynamic equilibrium: prices may spike or collapse for a short time, but the system will quickly adapt and equilibrium will be restored.

    The real world is not a closed system in which all the moving parts are visible and measurable. The real world is an open system operating not solely by the pursuit of self-interest but by natural selection unguided by any goal or destination.

    We presume “Progress” has an inherently upward trajectory: everything inevitably gets better as technology advances. In other words, we view the dynamics of history and Nature as teleological: they are on a path heading toward a goal.

    This is a misunderstanding of Nature. Natural selection has no goal. If external changes disrupt an ecosystem, some species may be wiped out. From their point of view, this was not inevitable progress toward a goal.

    The tightly interconnected global system is akin to an ecosystem. It is an unpredictable, unstable open system, not a predictable, stable market. External events can lead to scarcities for which there are no substitutes or increases in production, and irreplaceable links can be broken, collapsing the system beyond repair.

    When the Vandals wrested the North African wheat production away from Roman control, the Roman Empire lost the primary food source feeding the half-million residents of Rome, many of whom were granted a free bread stipend–hence the term “bread and circuses.”

    Since there was no substitute for this lost wheat, and the residents grew little or no food themselves, the result was the collapse of the entire structure. (There were other factors, of course, such as the unaffordable cost of maintaining a paid mercenary military, pandemics, etc.–what we now call a polycrisis.)

    The point here is risk is often hidden in systems that are stable for long periods of time. It isn’t non-existent; it is simply out of sight. This conditions us to believe that the system is self-correcting, and so we become complacent.

    A recent example of this is the way the Federal Reserve and other central banks have “saved” the stock market every time it stumbled for the past 15 years, since the Global Financial Crisis of 2008-09. We’re now conditioned to “buy the dip” because every time the market dips, the banks leap into action and markets soar to new highs. This is like clockwork, and so only fools doubt that the next dip will also be “saved” and markets will once again soar to new heights.

    In the context of global risk, “buying the dip” appears to be low risk. But this conditioning / complacency overlooks the fact that China “saved the global financial system” by rapidly expanding its own debt load, what we call “leveraging up” debt, much like a homeowner with a modest mortgage and plenty of home equity can borrow against that equity, leveraging the collateral into much higher debt loads.

    China is now mired in the same slow-growth, over-indebted, property-bubble, rising inflation, decaying global trade environment as every other nation which precludes it “saving the world” again.

    Now that the deflationary impulse of rising global trade has reversed, there’s nothing to counter the inflationary pressures generated by the decay of globalization and financialization: interest rates cannot be pushed back down to zero, as that will only boost inflationary forces. Since collateral has already been “levered up,” there’s no more pool of collateral to support a new credit bubble.

    Should central banks attempt to “save the market” by dropping interest rates to zero, that won’t boost borrowing and spending because the system is already over-levered: staggeringly large sums of debt are already unsupported by collateral, for example, commercial real estate in the U.S.: buildings that sold for $200 million a few years ago are now entering foreclosure and being auctioned off for $10 million or less. The underlying value of the property–the collateral supporting the loan–has collapsed.

    In other words, there are no more “saves” available for the next market meltdown.

    Another systemic source of risk was described by Benoit Mandelbrot in his book The (Mis)Behavior of Markets. (The book’s original 2004 subtitle was “a fractal view of risk, ruin, and reward.” The current edition’s subtitle is “A Fractal View of Financial Turbulence.” I prefer the original subtitle, which is more to the point: risk and ruin.)

    In the conventional view of risk / portfolio management, “100-year floods” occur, well, every 100 years or so. This risk of such a devastating disaster occurring in any one year is thus low.

    But as Mandelbrot explained, these catastrophic floods don’t occur every 100 years–they occur every 5 years or so, as the mathematical models used to ascribe risk are deeply flawed. Nature is fractal, and thus prone to sudden instability.

    Nassim Taleb explored the nature of unpredictable/improbable risk in his book The Black Swan: The Impact of the Highly Improbable.

    The decades of relative stability between 2000 and 2020 conditioned us to complacently believe the global system was now so robust and our stabilizing institutions (central banks) so powerful that risk was if not banished, manageable and could be readily hedged.

    This is not realistic, and so we’re ill-prepared for shocks to the system that fatally destabilize trade and capital flows we assume are permanently dynamically stable, i.e. any spot of bother will be corrected by one institution or another.

    Another systemic source of risk is the thinning of systemic buffers is not visible. In other words, the rising risk of instability is invisible to us as long as the system appears to be functioning normally. So we’re surprised when fisheries collapse, ground water dries up, financial systems implode, and so on, because everything appeared to be more or less the same.

    We can view the human body as a metaphor for the way a system attempts to maintain homeostasis / equilibrium, but the effort required overtaxes the systems tasked with correcting / rebalancing the entire system. The individual feels “normal” and has no awareness of rising risk until they experience a cardiac arrest or their metabolic disorder strikes them down.

    Risk is slowly being repriced globally, as costs rise and trade and capital dependencies undercut stability. What we currently view as predictable closed systems will be revealed as unpredictable and potentially destabilized open systems that cannot be restored to previous forms of stability.

    How do we operate in a world in which risk cannot be fully hedged, and apparently small events can collapse critical systems on which we’re dependent? The first step is to set aside conditioning that leads to complacency and false assumptions of safety / stability. The second step is to mitigate risk before it rises up like a tsunami: reduce debt, exposure to financial risks, reduce our dependency on global, tightly bound interconnected systems, move to places with a diversity of essentials, and invest in our own self-reliance. I wrote my book Self-Reliance in the 21st Century as a general guide to this de-risking process

    *  *  *

    This is a sample essay from my Weekly Musings Reports sent exclusively to subscribers, patrons and Substack subscribers. Thank you very much for supporting my work.

    Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free

    Tyler Durden
    Sun, 06/16/2024 – 11:40

  • North Korea Reportedly Sending Shipments Of 5 Million Artillery Shells To Russia
    North Korea Reportedly Sending Shipments Of 5 Million Artillery Shells To Russia

    North Korea has recently sent containers to Russia that could hold as many as 4.8 million artillery shells, South Korean Defense Minister Shin Won-sik said in an interview with Bloomberg published on June 14th.  Seoul spotted at least 10,000 containers being shipped from North Korea to Russia, according to Won-sik. Pyongyang has also sent dozens of ballistic missiles that Moscow troops have launched against Ukraine.

    To put this in perspective, the US has sent only 300,000 artillery shells to Ukraine (most of them maintained since the 1980s in a reserve stockpile meant for Israel) and is straining to meet a manufacturing quota of 100,000 shells per month by 2025.  The disparity between the production of armaments between NATO and Russia (and its allies) has proven to be immense.  From artillery to armor to ammunition, NATO simply cannot keep up.

    In exchange for the ordnance Russia is allegedly giving North Korea oil, satellite technology as well as tech to improve their tanks and aircraft.  North Korea’s cheap labor, while ethically abhorrent in nature, is proving useful in the fast manufacture of weapons.

    Critics argue that artillery coming from North Korea is “substandard” and far less advanced than western produced artillery, leading to a decrease in effect on target.  However, 5 million rounds is an incredible arsenal regardless of technology – That’s more than enough boom to support a large scale offensive. 

    Beyond the typical and completely unsupported claims by Ukrainian officials that Russia plans to invade Europe should Ukraine fall, they have been surprisingly honest about the dire situation they face.  Ukrainian ordnance is running out fast while Russia’s production increases exponentially.  It’s a recipe for defeat, but Ukraine seems to be under the impression that this weaponry is simply waiting to be shipped from the US or EU – It’s not.  Supplies are slim and manufacturing is slow.

    The new information comes nine months after Kim Jong Un reportedly traveled to Russia to meet with Vladimir Putin, and Putin is expected to travel to Pyongyang in the next few days.  Agreements with North Korea for armaments are in violation of UN sanctions, though it’s easy to understand why Putin would care little about the UN’s position.

    It’s not clear if South Korea believes all the artillery has already arrived in Russia, but the timing of the report coincides with rumors that Russia is preparing for a major offensive action sometime this summer.  Russia has been engaging in an “attrition warfare” strategy in Ukraine, something which the US and Europe have not dealt with since the Vietnam War over 60 years ago.  It’s a method that most NATO military experts, accustomed to maneuver warfare against low-tech insurgent targets, have never encountered outside of a classroom.

    A key element of Russia’s strategy involves the use of artillery as a shield to protect offensive units as they advance against Ukrainian bunkers and trenches.  With Russia already breaking through Ukraine’s defenses in several regions there may be a major push in the next two months designed to exploit their artillery advantage.       

    Tyler Durden
    Sun, 06/16/2024 – 11:05

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