Today’s News 17th March 2022

• 'Overwhelming' Need To Investigate COVID-19 Vaccine Tinnitus: Researchers
  ‘Overwhelming’ Need To Investigate COVID-19 Vaccine Tinnitus: Researchers

  Authored by Jack Phillips via The Epoch Times (emphasis ours),

  

  A group of researchers who evaluated the Vaccine Adverse Event Reporting System (VAERS) found there is a need to carry out more studies on COVID-19 vaccine-related tinnitus.

  In an article published for the March edition in the “Annals of Medicine and Surgery,” about 12,247 cases of COVID-19 post-vaccination tinnitus were reported until Sept. 14, 2021. Tinnitus is when one experiences ringing or other noises—that are not external sounds—in one or both ears, affecting between 15 and 20 percent of all people, says the Mayo Clinic.

  “To the best of our knowledge, this is the first review evaluating any otologic manifestation following vaccine administration and aims to evaluate the potential pathophysiology, clinical approach, and treatment. Although the incidence is infrequent, there is a need to understand the precise mechanisms and treatment for vaccine-associated-tinnitus,” said the researchers.”

  Because of the relatively high number of cases, they argued that “there is an overwhelming need to discern the precise pathophysiology and clinical management” of vaccine-associated-tinnitus because “despite several cases of tinnitus being reported following SARS-CoV-2 vaccination, the precise pathophysiology is still not clear.”

  The researchers, led by Syed Hassan Ahmed with the Dow University of Health Sciences, noted that stress and anxiety following COVID-19 vaccination could also play a role. Whether vaccine-related anxiety, they said, plays a role in the cause of tinnitus should be evaluated.

  Ahmed and the other researchers asserted that they believe the benefits of COVID-19 vaccines outweigh the side effects.

  Dr. Gregory Poland, the head of the Mayo Clinic’s Vaccine Research Group in Minnesota, told Medpage Today that he developed tinnitus soon after receiving his first COVID-19 vaccine shot.

  “It was like someone suddenly blew a dog whistle in my ear,” Poland told MedPage Today, adding that the tinnitus symptoms have been life-altering. “It has been pretty much unrelenting.”

  Poland continued to say that he “can only begin to estimate the number of times I just want to scream because I can’t get rid of the noise or how many hours of sleep I’ve lost.”

  The noise that he hears can be “particularly loud at night when there are no masking sounds.”

  Despite the tinnitus, Poland—who said he’s received numerous emails about individuals who developed tinnitus after getting the COVID-19 shot—told the outlet that he is still a proponent of the COVID-19 vaccine and received a booster dose.

  The tinnitus, he added, occurs in both ears, noting that it is worse in the left than in the right ear.

  “What has been heartbreaking about this, as a seasoned physician, are the emails I get from people that, this has affected their life so badly, they have told me they are going to take their own life,” Poland said.

  A spokesperson for the Centers for Disease Control and Prevention (CDC), which runs VAERS, noted that “tinnitus is a common condition, heterogenous in nature, and has many causes and risk factors,” adding that “hundreds of millions of people have received mRNA COVID-19 vaccination under the most intensive monitoring in U.S. history.”

  The Epoch Times has contacted the CDC for comment.

  Tyler Durden
  Thu, 03/17/2022 – 03:00

• Ukraine War Is Leading To Massive US Military Buildup In Europe
  Ukraine War Is Leading To Massive US Military Buildup In Europe

  Authored by Dave DeCamp via AntiWar.com,

  The fighting in Ukraine may lead to a rethinking of the US’s military posture in Europe that could lead to a buildup of US forces in the region not seen since the end of the Cold War.

  According to Stars and Stripes, the US currently has 100,000 troops operating in Europe, the highest number since 2005. Troop numbers spiked recently as President Biden ordered more deployments amid heightened tensions and since Russia invaded Ukraine. In January, there were 80,000 US troops on the continent.

  

  Germany still hosts the most US troops in Europe, but US military leaders are looking to send more forces further east. Secretary of Defense Lloyd Austin is due to meet with other NATO military leaders in Brussels on Wednesday to discuss reinforcing the military alliance’s so-called “eastern flank.”

  Ahead of the meeting, NATO Secretary-General Jens Stoltenberg said allies should be prepared for a “major increase” in military spending. “On land, this could include substantially more forces on the eastern part of the alliance,” he said.

  Stoltenberg said the alliance will also “consider major increases to our air and naval deployments, strengthening our integrated air and missile defense, reinforcing our cyber defenses, and holding more and larger exercises.” Later this month, President Biden will attend an “extraordinary summit” with NATO leaders in Brussels, which is scheduled for March 24.

  In recent months, the US has sent more troops to countries bordering Russia and Ukraine, including Poland, Romania, and the Baltic states of Latvia, Estonia, and Lithuania. According to numbers from US European Command, Poland currently has 10,000 US troops, Romania has 2,400, and 2,500 are spread out across the Baltics.

  The U.S. is moving more than weapons — there are now 100,000 U.S. troops operating in Europe for the first time since 2005, including those at the site of the Patriot batteries we visited. https://t.co/PB0lTJKruV

  — Norah O’Donnell 🇺🇸 (@NorahODonnell) March 16, 2022

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

  The US and NATO are reinforcing these countries in the name of deterring Russia. But NATO’s eastward expansion since the end of the Cold War and its presence near Russia’s borders has significantly escalated tensions in the region and is one of Russian President Vladimir Putin’s main justifications for attacking Ukraine.

  Tyler Durden
  Thu, 03/17/2022 – 02:00

• People Are Seeing Through Holes In Woke Ideology: Critical Theory Expert
  People Are Seeing Through Holes In Woke Ideology: Critical Theory Expert

  Authored by Masooma Haq and Jan Jekielek via The Epoch Times,

  

  Wokal Distance, an expert in postmodernism and critical theory and a visiting fellow at the Center for Renewing America, believes that woke ideology will destroy itself because it is not grounded in truth, but rather seeks power.

  The man who posts explanatory threads on social media under the pseudonym Wokal Distance sat down for an interview with Jan Jekeilek, host of EpochTV’s American Thought Leaders program, on March 5.

  Distance said a sign that people are starting to see the flaws in woke ideology is that mainstream comedians are making jokes about their ideas.

  “Humor exposes it, making fun of it exposes it. … The reason why the left made fun of Bush so much is because the best way to take the social power out of something is to mock it,” he said, referring to former President George W. Bush.

  “The social justice, branding, and packaging of ‘We just want to be tolerant and kind and caring,’ that held for a long time,” Distance said. “But now that people are getting to have a look at what’s inside the social justice box and what they actually believe, people are beginning to see it for what it is.”

  Distance said that inside the “social justice box,” there is a cynical attempt to guilt people into giving revolutionists and critical theorists power and clout, and that “they now realize that they were browbeaten and morally scolded and shamed into giving people the benefit of the doubt.”

  He cited comedian Bill Maher questioning the sanity of woke ideas such as defunding the police, gender surgery for 13-year-olds, and the idea that men can become pregnant.

  Distance was referring to the fact that Maher has repeatedly called out the elite left for their restrictions and regulations, saying they are providing a lot of material for his jokes.

  “People sometimes say to me, ‘You didn’t use to make fun of the left as much.’ Yeah, because they didn’t give me so much to work with,” Maher said during a January 2022 episode of his show HBO talk show, Real Time with Bill Maher.

  “Members of Congress tweeting things like ‘cancel rent,’ ‘cancel mortgage,’ and ‘no more policing or incarceration,’ declaring that ‘capitalism is slavery,’ canceling Lincoln and Dr. Seuss, teaching children they’re oppressors and math is racist, making Mr. Potato head gender-neutral, and now an emoji for pregnant men,” Maher said. “Real—I’m not making it up.”

  

  Maher isn’t the only comedian calling attention to the radical left’s new ideas.

  Joe Rogan, a comedian and podcaster who has been attacked by the left for hosting guests who disagree with mainstream narratives, has said that woke culture will eventually completely cancel white men.

  “That’s the problem. It keeps going. It keeps going further and further and further down the line. And if you get to the point where you capitulate, where you agree to all these demands, it will eventually get to, ‘straight white men are not allowed to talk,’” Rogan said in a May 2021 episode of his podcast, The Joe Rogan Experience.

  Distance said Republicans are now more in line with average people. Even though the left calls conservatives “crazy” and “transphobic,” people are starting to see through the irrationality of the left’s ideology, he said, from children being allowed to change their gender to defunding police in urban areas.

  “That’s not a crazy position. That’s the position that everyone in America agreed on until three minutes ago, and a very small group of radical lefties have brought an entirely different conception of the world and are trying to make that the center, and they’re trying to act as though all of this new stuff that they invented last week is normal, correct, true, good, right, proper,” Distance said. “It’s absurd, and they can’t see the absurdities.”

  

  The left’s concept of intersectionality is at the heart of woke ideology. Intersectionality links two ideas together: The first, that society is made up of many systems such as the education system and economic system, and the second, that each person has multiple identities, such as man, gay, white, black, woman, and mother, added Distance.

  “All of these systems oppress people, according to these various identities. And so, intersectionality is the idea that we’re going to study the way these various identities intersect with power,” Distance said. “It’s the theory that says, ‘Look, your role in society, your position in the social hierarchy … is in part determined by, limited by, controlled by these various identities.’”

  According to the left, there is a hierarchy of oppression and privilege with heterosexual white males having the greatest privilege and a transgender black female being a person who faces some of the greatest levels of oppression in society.

  “All of it has been built for the interests of, and to the benefit of, straight white males,” Distance said about how the ideology sees American society.

  

  “It’s something that [white men] invented for ourselves, and that it needs to be challenged because that system was invented by white males, and therefore the interests and the benefit of white males have been centered in that system, and therefore needs to be deconstructed,” said Distance, explaining the intersectionality argument. “Because there is no absolute, objective, universal, eternal truths that can be stated. Because there is no God’s eye view … to get these absolute truths. You’re a finite, limited, biased, self-interested person who’s been warped by power.”

  Distance said when white men speak, Marxists and those on the left are not asking whether or not what the white men are saying is true. What they’re doing is focusing on who gets power, whose interests are served, and who benefits, rather than whether or not the statements are true, said Distance.

  “The truth of those questions is thrown away because [they] don’t care about the truth. It’s expressions of power to control people, and that’s how they view everything. So, you always end up with this endless back and forth, where people are arguing about ‘Well, who benefits?’” said Distance.

  Distance said it’s useful to turn this process around and ask critical theorists and Marxists to explain their definition of justice, who benefits from their work, and their motivations for pursing Marxist ends.

  “This dissolves everything it touches because it gets rid of truth and replaces it with an analysis of interests,” he said.

  Distance cited the many communist dictators who proclaimed to be on the side of justice, including Joseph Stalin in the former Soviet Union, Pol Pot in the Khmer Rouge regime in Cambodia, and Mao Zedong in the Cultural Revolution in China. Once they established their power, these dictators killed millions of working people.

  

  Distance said anyone who challenges critical theorists or the left will be branded as having privilege, wanting power, or suffering from “white fragility.”

  “There’s nothing I can say because no matter what I say, it does not get viewed for its content. It does not get viewed for its truth. It doesn’t get viewed for its argument. … The only question that they’re asking is, does that agree with us,” Distance said.

  He believes the left’s woke culture will disintegrate because its proponents are already having to use force and coercion to make people listen to them.

  “Truth doesn’t care, reality doesn’t care about your ideology. Truth is unconcerned by whatever you think someone else’s interests are. It persists,” said Distance.

  Radical leftists have “sacrificed the truth in order to get power so they can enact their vision of justice,” Distance said.

  He said woke ideology is disconnected from reality and truth, and it will meet with the same fate as the oppressive communist regimes of the past.

  “When the Soviet Union came down, it didn’t crumble because of bombs and guns,” he said. “It collapsed under the weight of the lies that were propping it up.”

  Tyler Durden
  Wed, 03/16/2022 – 22:30

• CEO Of Top Consumer Investment Firm Warns 1970s-Style Stagflation To Return
  CEO Of Top Consumer Investment Firm Warns 1970s-Style Stagflation To Return

  The invasion of Ukraine and the events that have followed, especially in commodity markets, have triggered a downward revision in growth expectations amid an inflationary shock. It appears the reflation narrative has quickly shifted to stagflation as one of the most recognizable consumer-goods brands warned how the dark days of 1970s-style inflation could be imminent. 

  Following the far-hotter-than-expected CPI print last week, soaring to levels in February not seen since January 1982, along with Tuesday’s Producer Prices last month hitting double-digits for the first time since Bloomberg data began, JAB Holding Company, a German conglomerate that includes investments in companies operating in the areas of consumer goods, forestry, coffee, luxury fashion, animal health, and fast food, among others, published an investor letter on Wednesday warning about continuing inflation. 

  JAB might know a thing or two about inflationary pressure better than anyone else because they’re a consumer-centric investment firm with a portfolio of companies that includes Coty Inc., Panera Brands (Caribou Coffee Company, Panera Bread, Einstein Bros. Bagels), Keurig Green Mountain, and Krispy Kreme, Inc., among other brands. 

  

  “We believe we are now seeing a tectonic shift to a completely different macroeconomic and investment environment that most leaders and investors of today have not seen or experienced in their professional lives. We see the rise of inflation which, in our view, is not transitory as a major threat to the economy and the returns of global equities,” Olivier Goudet, the chief executive officer of JAB, told investors in the letter. 

  He said, “We saw this phenomenon early on across our supply chain and inside our companies with rising input costs and salaries upon re-opening post-pandemic. Furthermore, major energy and labor shortages will drive longer-term inflation trends, accentuated by the serious geopolitical turmoil such as war and threats.”

  “The world where the cost of capital is zero is rapidly fading, and we believe the next decade will prove substantially more challenging from a return standpoint, but also from a credit and liquidity risk standpoint. Successful equity investments will be in resilient companies able to sustain their financing with quality growth,” Goudet continued. 

  And warned: “We expect the inflation trend to continue, reaching levels not seen since the 1970s, fueled by structurally rising energy and commodity prices, as well as labor cost increases. We believe our resilient growth investment strategy is well suited for periods like these, which unfortunately tend to be forgotten during long bullish markets.”

  Jab’s assets under management are $34 billion and could be poised for outperformance even in times of turmoil as the consumer-centric portfolio was designed with an “all-weather” approach. 

  

  Confirming Goudet’s warning is Goldman’s Alex Fidanza, who recently told clients, “Global financial conditions have tightened materially, shifting the growth narrative from reflation to stagflation.” 

  * * * 

  Here’s Jab Holding’s complete investment letter: 

   

   

   

   

   

  Tyler Durden
  Wed, 03/16/2022 – 22:00

• Xi Jinping's Stock-Market "Put" Is Alive And Well
  Xi Jinping’s Stock-Market “Put” Is Alive And Well

  By Ye Xie, Bloomberg Markets Live analyst and commentator

  Calming words from Chinese President Xi Jinping’s right-hand man Liu He helped spur one of the most-dramatic turnarounds of Chinese and Hong Kong stock markets in history. The verbal intervention, coupled with possible follow-up policy support, may mark a market bottom, if history is any guide. Beijing’s policy put is still alive.  

  Meanwhile, Wednesday’s Federal Reserve meeting showed that the central bank is even more hawkish than what was already priced in. The median dot-plot projection shows policy makers expect to raise the federal funds rate to 2.75% next year, above the neutral level. And the Fed still doesn’t see inflation falling back to 2% through 2024.

  What’s more, a record number of Fed officials still see risks to their inflation projection as titled to the upside. The equity market took the hawkishness in stride. Ironically, that should give more leeway for the Fed to tighten financial conditions. The “Fed put” hasn’t passed its expiration date, but the strike price is a lot lower than it used to be.

  

  In China, the type of market volatility witnessed over the past week only occurs during times of crisis. The Nasdaq Golden Dragon China Index jumped a record 33% Wednesday after falling the most ever last week. (The Financial Times reported Wednesday that China is preparing to make a concession on disclosing Chinese audit information to resolve an impasse threatening U.S.-listed Chinese firms.)

  In the Hang Seng Index’s half-century history, volatility similar to the moves seen over the past two days (up 9% after tumbling 6% on Tuesday) only occurred five times, all in 2008, 1997 and 1989. Part of Wednesday’s bounce stemmed from oversold conditions. For instance, prior to this week, the relative strength index of the Hang Seng benchmark fell below 20 only 12 times over the past 25 years. In 11 of those occasions, the benchmark jumped over the next 20 days, with an average return of 8.5%.

  

  More importantly, Vice Premier Liu He came out with reassuring words on some of the hot-button issues that contributed to the recent market selloff, including overseas listings, housing and credit growth. In a coordinated move, the finance ministry, the central bank and regulators of FX, securities, banking and insurance all promised to do their fair share to stabilize markets and support the economy.

  A Bloomberg search of Liu’s comments about “capital markets” at financial stability meetings yielded seven results, including the latest. Three occurred during the trade war in 2018 when Chinese stock and currency markets were hammered. The remaining were during the onset of the Covid pandemic in 2020. While there were mixed results in the near term after Liu’s comments, the CSI 300 typically stabilized over the subsequent six-month periods, with a median return of 19%.

  

  The verbal intervention marks the first step in restoring market confidence. What remains to be seen are actions to back up the words, including addressing the geopolitical uncertainties and China’s Covid policies. On the later, Beijing has signaled some relaxation of its pandemic restrictions, with officials on Tuesday cutting short the mandatory home isolation for discharged Covid patients.

  All in all, Wednesday’s rally shows that Xi’s put is in the money now.

  Tyler Durden
  Wed, 03/16/2022 – 21:30

• Western Europe Sees Alarming Uptick In COVID Cases
  Western Europe Sees Alarming Uptick In COVID Cases

  The other day we noted that the US had encountered signs gleaned from wastewater samples taken across the country that COVID cases might be on the rise after weeks of steady declines that recently prompted authorities to start dialing back pandemic-era requirements. 

  But China and the US aren’t the only places where case numbers have started to rise. A surge in coronavirus infections in western Europe has experts and health authorities on alert for another wave of the pandemic in the US even as most of the country has done away with restrictions after a sharp decline in cases. 

  Experts in Europe claim that the strain they’re seeing is a mutated form of omicron. It’s a subvariant known as BA. 2, which appears to be more transmissible than the original strain, BA. 1, and is fueling the outbreak overseas.

  Germany, a nation of 83 million people, recorded roughly 250,000 new cases and 249 deaths last Friday, prompting Health Minister Karl Lauterbach to call the nation’s situation “critical.”

  But despite this, Germany is still allowing most coronavirus restrictions to end Sunday. The UK had a seven-day average of 65,894 cases and 79 deaths as of Sunday, according to the Johns Hopkins University Coronavirus Research Center. The Netherlands, home to fewer than 18 million people, was averaging more than 60,000 cases the same day.

  All told, roughly a dozen nations are seeing spikes in coronavirus infections caused by BA. 2, a cousin of omicron, which is known as BA. 1. Over the past two years, outbreaks in Europe have typically been followed by outbreaks in the US. 

  

  So far, BA. 2 appears to be spreading more slowly in the US than it has overseas, for reasons that aren’t entirely clear, Debbie Dowell, chief medical officer for the CDC’s COVID response, said in a briefing for clinicians sponsored by the Infectious Diseases Society of America Saturday.

  But as far as Europe is concerned, if cases continue to rise, how long before the ECB considers reversing course on its tightening of monetary policy?

  Tyler Durden
  Wed, 03/16/2022 – 21:00

• All Hiking Cycles That Invert The Curve Lead To Recessions Within 1 To 3 Years
  All Hiking Cycles That Invert The Curve Lead To Recessions Within 1 To 3 Years

  Echoing our earlier thoughts that the Fed officially started the countdown to the next recession (and rate cuts) when it inverted the 5s10s moments after Powell starting speaking, DB’s Jim Reid writes that while not every Fed hiking cycle leads to a recession, all hiking cycles that invert the curve have led to recessions within 1 to 3 years. And the problem with the Fed hiking cycle that starts today, he adds with a ZH-esque does of skepticism, is that “there is a decent likelihood that the curve inverts relatively early on. 2s10s peaked at +157.6bps last March and traded as low as +21.9bps last week before settling at around +30bps as we go to print.”

  

  As a reminder, while not as popular as the 2s10s, the 5s10s is also a harbinger of recessions, and usually precedes the 2s10s inversion by weeks. It is this curve that inverted today.

  

  Piling on, CPI is much higher today than it was in any of those instances, and indeed the second highest at the start of any post-war hiking cycle. Thus, according to Reid “there is not only a strong risk that the curve inverts relatively early, but that the Fed will need to continue hiking anyway.” A few days ago, we phrased it differently: the Fed wants to push the US economy into a modest recession. The only problem is that the Fed has never been able to achieve such a delicate achievement, and the most likely outcome is a violent slowdown coupled with a quick easing of monetary policy, i.e., a policy error… precisely why risk assets soared later in the day.

  That said, the table from DB below shows the details of every Fed hiking cycle over the last 70 years alongside the time to recession, yield curve shape, and inflation at the first hike. Reid has ordered this by length of time from first hike to recession to demonstrate that the quickest recessions following hikes were associated with an inverted curve by the time the Fed stopped hiking.

  

  As shown, on average it takes around three years from the first Fed hike to recession. However all but one of the recessions inside 37 months (essentially three years) occurred when the 2s10s curve inverted before the hiking cycle ended. With all the recessions that started later than that, none of them had an inverted curve when the hiking cycle ended. In fact, hiking cycles that ended with the curve in positive territory saw the next recession hit 53 months on average after the first rate hike, whereas the next recession for hiking cycles that ended with an inverted curve started on average in 23 months, just under two years. All these cycles eventually saw an inverted curve but this happened after the Fed stopped hiking.

  As a reminder, none of the US recessions in the last 70 years have occurred until the 2s10s has inverted. On average it takes 12-18 months from inversion to recession. Then again, the Fed has never before started a rate hiking cycle when inflation was already 7.9%.

  Reid concludes that, “this all fits in with my view in “Roadmap to the next Recession” that 2022 is unlikely to be a US recession year but that late 2023 or early 2024 are high risk.” While we agree that a recession is inevitable, we would add that it will come well before “late 2023”, not only because the 2s10s will invert in a few days at this rate, but because as the record collapse in the fwd OIS curve – which was trading at -49bps as of late Wednesday – signals, the market is now pricing in almost two full rate cut in the fwd 1-3 year window, a number which will only grow with every incremental rate hike by the Fed.

  

  Tyler Durden
  Wed, 03/16/2022 – 20:30

• 'Russia–Ukraine War Would Have Never Happened Under Trump': Rep. Hice
  ‘Russia–Ukraine War Would Have Never Happened Under Trump’: Rep. Hice

  Authored by Katabella Roberts and Steve Lance via The Epoch Times (emphasis ours),

  

  Russia’s war invasion of Ukraine would never have happened if former U.S. President Donald Trump were still in office, according to Rep. Jody Hice, (R-Ga.)

  In an interview with NTD, the Georgia congressman pointed towards what he called the current “weak leadership” in the White House which he said was in part to blame for the conflict.

  Hice, who is a candidate in the 2022 Georgia secretary of state election, also said he believes that Russian President Vladimir Putin may well use this time of war to “take advantage” of the United States and other western nations.

  

  “I’m not surprised from the perspective that the only reason this is happening is because we have such enormously weak leadership in the White House,” Hice said.

  “This would never ever, ever be happening if Trump were in the White House. And I think we all know that,” he said.

  Hice’s comments come shortly after Trump himself told Fox News that Russia’s invasion of Ukraine is “truly is a crime against humanity” that “never would have happened” if he were still in office.

  Trump took aim at Putin, who he said has “got a very big ego,” adding that if the Russian president were to end his military invasion of Ukraine now, “it’s going to look like a big loss for him. Even if he takes a little extra territory.”

  “I know him well [Putin] and this is not something that was going to happen but let’s see what happens, let’s watch,” Trump said of Putin.

  Tyler Durden
  Wed, 03/16/2022 – 20:00

• Stocks, Gold, Cryptos Soar As Fed Hawkish Surprise Triggers Inversion, Countdown To Policy Error And Next Recesssion
  Stocks, Gold, Cryptos Soar As Fed Hawkish Surprise Triggers Inversion, Countdown To Policy Error And Next Recesssion

  What a mess.

  After some early volatility, when stocks moved with every fake news headline either out of the FT, Ukraine or Russia, traders put World War III on the backburner to read the FOMC statement and listen to Powell. Initially there were no surprises when the Fed announce a 25bps rate hike, just as expected, a move which is woefully behind the curve as the last time CPI was 7.9%, the Fed funds was 13%…

  

  … but the Fed also boosted its dots so high it effectively confirmed what the market had been saying all along: the Fed now expects 6 more rate hikes in 2022, or one rate hike at every meeting!

  

  As a result, risk assets, gold, oil and all risk assets tumble as did yields.

  

  Hilariously, seven hikes is precisely what the market had been saying all along. However, once the Fed confirmed that the market was right, guess what happened? Rate hike odds tumbled .

  

  Why? Because with even the Fed now forecasting a big slowdown to growth coupled with a surge in inflation…

  

  … the most likely outcome now is stagflation. This immediately manifested itself in a plunge in 30Y yields…

  

  … as the entire yield curve pancaked…

  

  … culminating with the 5s10s inverting, a clear sign that a recession – the same recession which the Fed hopes to induce to crush commodity demand – is now coming.

  

  And while the 2s10s curve still has about 20bps before it too inverts and begins the countdown to the next recession…

  

  … one look at the 3Y1Y – 1Y1Y OIS fwd shows that markets are now pricing in almost two rate cuts in the next 3 years…

  

  … confirming that the Fed, which was trapped long before today’s rate hike, will be forced to ease and/or resume QE in the not too distant future even as inflation continues to rage. Translation: policy error.

  And while oil did indeed drop (not for long – just wait for the market to remember that 3MM bbls of Russian oil are now gone from circulation) on the Fed’s policy error as economic slowdowns traditionally lead to less demand, the policy error was not lost on either gold, which after dropping in kneejerk reaction to the hawkish FOMC statement, has since bounced to session highs in anticipation of the coming easing…

  

  … or cryptos which similarly rebounded strongly after tumbling after the FOMC.

  

  It certainly wasn’t lost on stocks, which after tumbling initially, reversed sharply once it emerged that the market is now pricing in rate cuts, and recovered more than 100 points from session lows…

  

  … led by – what else – the growth, deflation and slowdown sectors: IT and Comms.

  

  … in no small part thanks to the total chaos that was Powell’s presser…

  

  What happens next? Well, as we said earlier, the Fed is trapped, and while Powell really has no choice but to keep hiking in the coming months in hopes he will induce a modest recession to crush commodity demand, every incremental rate hike will invert the curve that much more (unless the Fed actively start selling 10 and 30Y TSYs, at which point all VaR hell will break loose), and the market will price in even more rate cuts.

  In short, the more hawkish Powell gets, the bigger the liquidity firehose he will have to unleash in a few months when the economy plummets into an all out recession, if not depression.

  Tyler Durden
  Wed, 03/16/2022 – 19:44

• Soros Worries About Putin-Xi Partnership, Hopes They Can Be Stopped "Before They Destroy Our Civilization"
  Soros Worries About Putin-Xi Partnership, Hopes They Can Be Stopped “Before They Destroy Our Civilization”

  Authored by Michael Washburn via The Epoch Times,

  Chinese leader Xi Jinping gave explicit signals that he was a friend and partner of Russian President Vladimir Putin in the weeks leading up to Moscow’s Feb. 24 invasion of Ukraine. Now, with the invasion bogged down amid stiff Ukrainian resistance and much of the world on edge over the conflict, Xi has backtracked somewhat and contradicted his earlier stance by endorsing the efforts of European heads of states to make peace.

  

  That’s according to billionaire philanthropist George Soros, 91, who set forth his views on the crisis in an op-ed piece on March 11.

  “Russia’s invasion of Ukraine on February 24 was the beginning of a third world war that has the potential to destroy our civilization,” Soros wrote.

  In his editorial, Soros contrasts Xi’s current stance with the extensive and cordial meeting between Xi and Putin on Feb. 4 on the opening day of the Winter Olympics in Beijing.

  The upshot of that meeting was the issuance of a 5,000-word text announcing a “no limits” partnership between Russia and China.

  “The document is stronger than any treaty and must have required detailed negotiation in advance,” Soros stated, expressing his surprise that Xi could have been willing to grant such unconditional support for Russia’s designs on Ukraine, or, as Soros put it, “carte blanche” to invade and occupy the country.

  Soros viewed this support as having emboldened Putin, a ruler who, as he approaches age 70, feels increasing pressure to make his mark on history, Soros states.

  “Having obtained Xi’s backing, Putin set about realizing his life’s dream with incredible brutality,” wrote Soros.

  More recent developments in Ukraine, where resistance to the invasion is fiercer and more determined than some expected, and support for Russia noticeably lower than Putin presumed, have prompted Xi to reassess his stance.

  “Xi seems to have realized that Putin has gone rogue,” Soros observed.

  On March 7, Chinese Foreign Minister Wang Yi said the friendship between Russia and China was still “rock solid,” but then the next day Xi called French President Emmanuel Macron and German Chancellor Olaf Scholz to voice his support for their efforts to make peace and to advocate restraint, Soros noted. Since the invasion, both Macron and Scholz have spent many hours on the phone with Putin in an effort to work toward a resolution of the conflict.

  “It is far from certain that Putin will accede to Xi’s wishes. We can only hope that Putin and Xi will be removed from power before they can destroy our civilization,” Soros concluded.

  Earlier this year, Soros articulated his view that the year 2022 would be a “turning point” during which the world would pivot decisively either in the direction of openness and freedom or of dictatorship and repression. He pointed particularly to the Chinese Communist Party’s growing aggression on the world stage, coupled with domestic problems faced by the regime.

  Tyler Durden
  Wed, 03/16/2022 – 19:20

• Australia Invests $360 Million In Rare Earth Projects To Combat China's Dominance
  Australia Invests $360 Million In Rare Earth Projects To Combat China’s Dominance

  Just over one month ago, we posited that China’s virtual monopoly on mining rare earth metals would soon come to an end as competitors ramped up production. Well, just a few weeks later, Australia is taking steps to do exactly that. To wit, Aussie PM Scott Morrison announced Wednesday that he would introduce new funding for the refining of rare earths refining on Wednesday.

  

  The move makes sense. Australia has large deposits of rare earth metals, coming in right behind Russia and India. Now, it will invest in projects to not just mine but also refine the metals – something that has previously been left to China, which has processed the metals cheaply, according to the Australian Broadcasting Corporation.

  

  Ultimately, Australia’s decision is bad news for Beijing, which has seen its dominance in the rare earths space diminish in recent years.

  

  Source: Statista

  And while the US has 1.5 million million tons of rare earth elements (or REEs) in reserve, the dawn of the war in Ukraine has left the European Powers searching for new sources after sanctions have dramatically restricted what they can and can’t buy from Russia, another major producer and exporter.

  Australia has a number of REE deposits that are distributed across the country.

  

  Rare earth elements are a group of seventeen chemical elements that occur together in the periodic table. The group consists of yttrium and the 15 lanthanide elements (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium). Scandium is found in most rare earth element deposits and is sometimes classified as a rare earth element.

  

  Given their important role in electric vehicle production, it has been posited that cobalt, lithium and the REEs would become the most sought-after resource following crude oil and natural gas.

  They’re also part of the great irony of “renewable” energy: while the sun and wind are indeed infinitely renewable, the materials needed to convert those resources into electricity – that is, minerals like cobalt, copper, lithium, nickel, and the rare-earth elements – are anything but.

  To try and bolster its production, the Australians will invest a total of $500 Australian dollars ($360 million) in various REE and mineral-related projects, according to the SCMP.

  Australia announced almost A$500 million (US$360 million) in funding to boost output of critical minerals, aiming to diversify supply for its allies and counter China’s dominance of the global market.

  Prime Minister Scott Morrison unveiled the funding for a slew of projects in Western Australia on Wednesday and said the state would become a powerhouse for Canberra’s allies.

  “Recent events have underlined that Australia faces its most difficult and dangerous security environment that we have seen in 80 years. The events unfolding in Europe are a reminder of the close relationship between energy security, economic security and national security,” he told reporters.

  As Bloomberg reminds us, the US and its allies have long worried about China’s efforts to dominate the market for REEs. They worry that it could use this dominance to restrict flows of these minerals to the West, which would cripple high-tech manufacturing.

  Rare Earths might seem like a misnomer. While they’re not as rare as gold or silver, the elements aren’t often found in large volumes and require intensive processing to produce materials for end users.

  The move by Australia isn’t exactly a surprise. They agreed back in September during a meeting of “the Quad” – a the Pacific focused security alliance that China has obliquely denounced as a “Pacific NATO” –  in Washington to bolster rare earth mining and refining to try and combat China’s dominance.

  Tyler Durden
  Wed, 03/16/2022 – 19:00

• Ukraine's Corn Harvest May Plunge By A Third, Estimates Show 
  Ukraine’s Corn Harvest May Plunge By A Third, Estimates Show 

  Black Sea research firm SovEcon reports that Ukraine, one of the world’s top grains exporters, will experience dramatic output declines in the 2022 harvest year due to the Russian invasion. 

  Ukraine’s main agricultural export products are corn and wheat. Before the invasion, Ukraine was the second-largest supplier of grains for the European Union and one of the largest suppliers for emerging markets in Asia and Africa. Breaking down the numbers, Ukraine produced 49.6% of global sunflower oil, 10% of global wheat, 12.6% of global barley, and 15.3% of global maize.

  

  SovEcon expects Ukraine’s 2022 corn harvest to plunge 35% from 41.9 million tons last year to 27.7 million tons this year. This year’s estimated wheat harvest has been cut to 26 million tons from an earlier outlook of 28.3 million tons, compared with 32.1 million tons last year. 

  SovEcon, which specializes in agricultural markets, said the regions affected by conflict account for 40% of the country’s corn and wheat production. They said plantings and yields would be impacted by fuel shortages, lack of workers and fertilizer, and fieldwork challenges due to the conflict. Also, a weather component of drought could affect wheat-producing areas. 

  However, the research firm says estimates are based on Russia reaching a ceasefire deal with Ukraine, allowing farmers to begin fieldwork in April as spring is around the corner. 

  

  What if the conflict continues to rage on and or for whatever reason, fieldwork in some areas cannot be completed due to shortages of equipment, fuel, seeds, fertilizer, and labor? Then wait? 

  Harvests could be even lower than SovEcon’s current estimates and may propel global food prices even higher. The UN projects global food prices could rise another 8-20% from current levels. 

  

  Meanwhile, Ukraine has enforced protectionist measures to ensure domestic stability of its food supply by banning wheat and other commodities exports. This move will result in higher global food prices, and countries that depend on Ukraine for their food needs may experience shortages. We explain what happens next in the ag note “Soaring Wheat Prices Leave These Countries Susceptible To Uprisings.” 

  … and then there’s this tweet: 

  Cannot stress this enough. There’s credible estimates that suggest that Ukraine’s yields in 2022 might be reduced by half. Even a 10% decline in production would have massive implications to world hunger and global stability.

  Food security is national security. https://t.co/zOnyDU65n3

  — Nathan Carson (@ndcarson) March 16, 2022

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

  Tyler Durden
  Wed, 03/16/2022 – 18:40

• DoD To Cut F-35 Stealth Orders In Upcoming Budget 
  DoD To Cut F-35 Stealth Orders In Upcoming Budget 

  The most expensive weapons program in the world is about to experience cuts in the upcoming U.S. Defense of Department (DoD) budget. 

  The F-35 Joint Strike Fighter, a trillion-dollar program to swap out nearly every fighter jet in the Air Force, Navy, and Marine Corps, will experience procurement cuts under DoD’s upcoming “Selected Acquisition Report” (SAR), according to Bloomberg, citing people familiar with information about the weapon’s program cost. 

  

  DoD is expected to order 61 F-35s in the next budget, 33 less than what was planned. The reduction comes as the F-35 program is expected to exceed $770 billion since its inception later this year, when the federal government’s fiscal year begins on Oct. 1. 

  But the proposed slowdown in purchases may raise questions among lawmakers, Lockheed investors and overseas customers about a lessening of the U.S. commitment to a program projected to cost $398 billion in development and acquisition plus an additional $1.2 trillion to operate and maintain the fleet over 66 years. The people familiar with the budget plan asked not to be identified in advance of the budget release in the coming weeks. -Bloomberg 

  Once the SAR is made public, the DoD will explain the reduction in F-35 orders. 

  The rationale for the reduction won’t be officially explained until the proposed Pentagon budget is made public. But the request comes as negotiations with Bethesda, Maryland-based Lockheed over the next F-35 contract — for about 400 planes — are going slower than anticipated. And F-35s remain hobbled by flawed execution of a crucial upgrade of their software and hardware capabilities that’s estimated to cost $14 billion. – Bloomberg 

  Lockheed shares tumbled 6.1% on today’s news, reversing some of the gains after Russia invaded Ukraine last month. 

  

  The stealth fighter has been plagued with mounting costs after all sorts of flaws have been discovered. Robert Behler, the Pentagon’s independent weapons tester, told Bloomberg in early 2021 the jet has 871 software and hardware flaws that could affect combat operations. It could cost billions to fix these flaws. 

  The people said the DoD would increase orders for non-stealthy F-15EX Eagle II fighter jets. The F-15s were initially introduced in 1976 but have since been completely upgraded, with the possible capabilities of carrying hypersonic missiles. 

  A person familiar with the SAR said the rationale for purchasing fewer F-35s shouldn’t be viewed negatively as flaws are being worked out. The U.S. is expected to field 1,763 F-35s by the operational peak in 2036.

  Tyler Durden
  Wed, 03/16/2022 – 18:20

• Flotilla Of 12 Tankers Carrying Russian Oil Approaching The US
  Flotilla Of 12 Tankers Carrying Russian Oil Approaching The US

  At a time when the mere thought of Russian vodka or caviar, let alone oil or gas, prompts uncontrollable shaking and revulsion, Reuters reports that no less than 12 tankers carrying Russia-linked cargoes of crude and refined products were approaching the United States on Wednesday, as suppliers rushed to deliver ahead of the U.S. government’s deadline to wind down Russian energy purchases, data from traders and Refinitiv Eikon showed.

  While the US recently banned Russian energy product imports due to the invasion of Ukraine, Washington’s ban gives importers a 45-day window until April 22 to discharge cargoes moving under pre-ban contracts. At least one tanker heading to the United States and carrying fuel oil has diverted, and at least two others that stopped at Russian terminals are awaiting discharge at U.S. ports.

  Despite the ban, Vortexa data analyzed by energy strategist Clay Seigle showed that U.S. crude and products arrivals from Russia are provisionally forecast at 18 million barrels, or 597,000 barrels per day (bpd) on average this month. That compared with an average of 672,000 bpd last year. “U.S. importers need to consider not only the legal risk, but also the reputational risk for dealing in sanctioned or stigmatized oil products,” Seigle added.

  Yes, but that is the case only after the 45-day window expires in more than a month. Meanwhile, oil tanker Elli, which was bound for the United States after docking at a Russian port, is now anchored near toward Ceuta on Morocco’s northern coast. Beijing Spirit, carrying Russian crude, was bound for the United States, diverted to France, and now signals a March 26 arrival in Philadelphia, Refinitiv showed.

  Then again, not all tankers will likely make it. Halkidon Shipping which manages the Elli, said the vessel “was instructed by her charterers to remain and await orders off Gibraltar, while en-route from Novorossiisk, Russia, to the U.S. Gulf Coast.”

  On Wednesday, tanker Confidence that had docked at a Russian port and was chartered by U.S. refiner Phillips 66 was anchored near New York harbor with a cargo of vacuum gas oil. The Confidence is not encumbered by sanctions, an official at vessel manager Dynacom Tanker said on Wednesday.

  “If it does (in the future), it will certainly not sail to the United States,” the Dynacom official said on condition of anonymity.

  Meanwhile, according to American Shipper, at least two tankers were loaded with Russian oil and departed for U.S. destinations, according to information obtained by American Shipper. MarineTraffic data shows the two tankers as the Vinjerac, which departed Thursday and is headed for the Port of New York & New Jersey for a March 25 arrival, and the Gazpromneft NORD, which loaded on Friday. Its anticipated arrival in the U.S. (port unidentified) is May 16, which is after the window closes and thus could not legally discharge its oil.

  

  MarineTraffic identified 12 tankers in total as part of the “flotilla” traveling with Russian oil to the U.S.

  “We can see these tankers are currently traveling at 11-12 knots on average — which is, in general, a normal speed for a commercial tanker on this journey,” said Fotini Tseroni, spokesperson at MarineTraffic.

  

  Two of the tankers have already arrived in the U.S. and were discharging oil — the Tom Louise at the Port of New York & New Jersey, and the Seoul Spirit in Delaware. Maritime sources told American Shipper that some of the buyers include Phillips 66; Total’s trading organization, Atlantic Trading and Marketing Inc; oil trading company Vitol; PBF Energy; and Valero.

  While these oil contracts were made prior to Russia’s invasion of Ukraine, they could have been canceled. Also, tanker cargoes can be traded en route, so there is a possibility the Russian oil may not end up in the U.S. Even after the ships reach the U.S., there is no guarantee they will be able to discharge the Russian oil. The International Longshore and Warehouse Union (ILWU) announced last week that its dockworkers “will not load or unload any Russian cargo coming into or going out of all 29 U.S. West Coast ports.”

  “With this action in solidarity with the people of #Ukraine, we send a strong message that we unequivocally condemn the Russian invasion,” said ILWU International President Willie Adams in a Twitter thread.

  The tanker ship Balla left Russia on Feb. 21 and is scheduled to arrive at the Port of Los Angeles on April 8.

  Still, the possibility of keeping the contracts and taking on Russian oil may force buyers into a potential profits-or-people dilemma. Do companies take on the oil … or do they cancel their contracts and damage their bottom lines? The 45-day window now accelerates the decision-making process.

  Recently, Shell faced a backlash after purchasing Russian oil and announced afterward that it would donate profits to humanitarian groups working to help the Ukrainian people.

  A Ukrainian official on Tuesday called on western oil companies to completely boycott Russian ports and oil, asking U.S. based Chevron, which ships oil from Kazakhstan oilfields through the CPC, to halt the shipments. Chevron said it complies with U.S. laws and its share of oil put into the pipeline is certified as of Kazakhstan origin. It did not comment on the request to halt loadings at the Russian port.

  Tyler Durden
  Wed, 03/16/2022 – 18:00

• DHS Collected Americans’ Financial Records In Bulk: Sen. Wyden
  DHS Collected Americans’ Financial Records In Bulk: Sen. Wyden

  Authored by Ken Silva via The Epoch Times (emphasis ours),

  

  The Department of Homeland Security (DHS) has collected Americans’ financial records in bulk, according to Sen. Ron Wyden (D-Ore.).

  Wyden revealed the existence of a DHS financial surveillance program in a March 8 letter to the department’s inspector general, calling for an investigation into the previously unknown activities.

  Wyden said he has recently learned that Homeland Security Investigations (HSI)—a law enforcement component of DHS—was operating an “indiscriminate and bulk surveillance program that swept up millions of financial records about Americans.”

  “After my staff contacted HSI about the program in January 2022, HSI immediately terminated the program,” Wyden wrote to DHS Inspector General Joseph Cuffari.

  The senator said his office was briefed by HSI on Feb. 18—the first time Congress had been told about the program.

  “HSI told my staff that it used custom summonses to obtain approximately six million records about money transfers above $500, to or from Arizona, California, New Mexico, Texas, and Mexico,” Wyden wrote. “HSI obtained these records using a total of eight customs summonses, which it sent to Western Union and Maxitransfers Corporation (Maxi), demanding records for a six-month period following the order.”

  Wyden said the HSI financial surveillance activities are highly problematic for numerous reasons, including the fact that only eight summonses were used to obtain more than 6 million records.

  “The customs summonses authority only permits the government to seek records that are ‘relevant’ to an investigation,” he said.

  “HSI should have known that this authority could not be used to conduct bulk surveillance, particularly after the Department of Justice inspector general harshly criticized the Drug Enforcement Administration in 2019 for using subpoenas to conduct a bulk surveillance program involving records of international phone calls.”

  Wyden also said the HSI database allows hundreds of law enforcement agencies “unfettered access” to the financial records without any court supervision.

  The fact that DHS immediately shuttered the program after being contacted by the senator further suggests a lack of internal oversight, he said.

  “I write to request that you thoroughly investigate the program to determine whether HSI’s surveillance of Americans was consistent with DHS policy, statutory law, and the United States Constitution,” the letter reads.

  Reacting to Wyden’s revelations, the Electronic Frontier Foundation (EFF) called the HSI program “blatantly illegal.”

  “This practice presents real-world harms to people who, for good reason, would like to keep private the transfer of money and the identifying information that goes with it,” EFF, an international nonprofit digital rights group, said in a March 10 statement.

  “Sharing financial and other personally identifying records of domestic violence survivors, asylum seekers, and human rights activists could expose them to danger, particularly given that TRAC allows hundreds of law enforcement agencies unfettered access to these records.”

  EFF agreed with Wyden’s call for an investigation into the program, noting that the 6 million-plus records should be immediately purged. It also said companies such as Western Union and Maxi should stand up to the government and protect consumer privacy.

  “Companies like Western Union and Maxi should stop caving to these overbroad administrative subpoenas for sensitive customer information by filing motions to quash. These administrative subpoenas are government requests—not official warrants, signed by a judge, that legally compel the company to hand over all of this data,” EFF stated.

  “Companies should answer only when compelled by law to do so. Until then, they have an obligation to protect their customers’ information, and that obligation should extend to protections from overly-broad and easily rebuttable government fishing expeditions.”

  Western Union offered the following statement when contacted by The Epoch Times: “Western Union is committed to protecting the personal data of our customers, as well as combatting serious criminal activity such as money laundering, human trafficking, and human smuggling.

  “We also actively work with law enforcement agencies globally to promote privacy principles while enabling law enforcement to combat crime. We are unable to comment further on law enforcement investigations.”

  Maxi didn’t respond by press time to an email from The Epoch Times seeking comment.

  Tyler Durden
  Wed, 03/16/2022 – 17:40

• 'Benghazi All Over Again': Fauci Braces For House GOP Investigations
  ‘Benghazi All Over Again’: Fauci Braces For House GOP Investigations

  Authored by Jack Phillips via The Epoch Times (emphasis ours),

  

  White House COVID-19 advisor Anthony Fauci said he expects to be investigated by Republicans if they take back control of the House during the 2022 midterm elections.

  “It’s Benghazi hearings all over again,” Fauci told The Washington Post on Tuesday in reference to numerous GOP lawmakers saying they will look into alleged gain-of-function research at the Wuhan Institute of Virology in China, located near where the first COVID-19 cases were officially reported in late 2019.

  Fauci, an unelected federal official who has headed the National Institute of Allergy and Infectious Diseases (NIAID) since 1984, claimed that potential hearings “will distract me from doing my job, the way it’s doing right now.” Should there be hearings and an investigation, Fauci asserted that “there will be nothing there.”

  His reference to the Benghazi hearings was an apparent comparison to former Secretary of State Hillary Clinton, who was the focal point of Republicans investigating the 2012 attacks on a consulate in Benghazi, Libya, that left several Americans dead.

  Several prominent House Republicans have gone on the record to say that they will probe Fauci’s agency and its ties to research in Wuhan.

  “And if you’re watching this, Dr. Fauci, look out because when the Americans give us control in the House of Representatives, God willing, we’re going to get some answers on behalf of the American people,” Rep. Chip Roy (R-Texas) told Fox News last week.

  The Texas lawmaker’s comment came just a few days after Rep. Jim Jordan (R-Ohio), the ranking Republican member of the House Judiciary Committee, told Just The News that the GOP investigate the NIAID chief over how they responded to the COVID-19 pandemic. Whether or not tax dollars were used to fund research into “gain-of-function,” a controversial form of research, will be probed as well, Jordan said.

  In October 2021, Fauci told ABC News that he stood by a previous assertion during a Senate hearing that neither NIAID nor the National Institutes of Health, which oversees NIAID, funded gain-of-function research in China.

  “The framework under which we have guidance about the conduct of research that we fund, the funding at the Wuhan Institute was to be able to determine what is out there in the environment, in bat viruses in China,” Fauci commented. “And the research was very strictly under what we call a framework of oversight of the type of research. And under those conditions which we have explained very, very clearly, does not constitute research of gain of function of concern.”

  Historically, the party of the president tends to lose seats in the House or Senate during the midterm elections. Public statements made by prominent democrats, including Rep. Sean Patrick Maloney (D-N.Y.), who chairs the Democrats’ midterm election apparatus, appear to suggest that Democrats are trying to realign their messaging ahead of the November elections.

  “The problem is not the voters. … The problem is us,” Maloney reportedly told fellow Democrats at a conference over the past weekend. “They think that we’re divisive and too focused on cultural issues. They think that we’re preachy. They think that we act like we know better than parents when it comes to their kids in schools,” he added.

  Tyler Durden
  Wed, 03/16/2022 – 17:20

• "Soviet-Like Inflation" Returns As Sanctions Shock Russia Into Crisis 
  “Soviet-Like Inflation” Returns As Sanctions Shock Russia Into Crisis 

  Russians are feeling the economic pain of sanctions by the US and other Western countries, as inflation has sharply accelerated amid a collapsing ruble.

  Annual inflation soared to 12.54% as of March 11, its highest since the second half of 2015 and up from 10.42% a week earlier, the Rosstat statistics agency announced Wednesday. Prices in Russia have increased over the last several weeks, and the economy is headed for a deep recession as there is more turmoil ahead. 

  

  Between March 5-11, inflation data came in at 2.1%, the second-highest weekly print in more than two decades, down from a 2.2% rise in prices a week earlier. 

  Alexander Abramov, a market analyst at RANEPA, a state-run university in Moscow, told Bloomberg that “Soviet-like inflation” could return as it manifests through a deficit of goods that pushes prices higher. 

  

  “The main risk now is the emergence of a shortage of basic imported everyday goods, as well as durable goods,” Abramov said. “Many are no longer available in stores, and prices in online stores have risen sharply.”

  

  Deteriorating financial conditions and inflation over the Central Bank of Russia’s 4% annual inflation target means households and businesses are distressed. 

  Following the invasion of Ukraine, Western sanctions have plunged the Russian economy into a crisis that could be on par with the fall of the Soviet Union. 

  Sanctions targeting the central bank’s ability to use a majority of its reserves to stabilize the ruble have sent the currency to an all-time low, forcing the bank to raise interest rates to a shocking 20%. Cutting some Russian banks off SWIFT and not allowing them to transact in dollars and euros has amplified the financial crisis. 

  

  Rosstat said consumers in many cities reported shortages of staple foods, and prices have soared 15% over the last two weeks. Moscow has chosen to ban certain agricultural exports to stabilize domestic food prices. 

  Prices for over-the-counter medicines have sharply risen. Imported goods and products with foreign components have seen price increases of at least 10% in the last two weeks. 

  “Definitely households will be very severely hit and will pay a big price,” Mario Bikarski, an analyst at the Economist Intelligence Unit told The Moscow Times. “Corporates are also suffering greatly … It will be Russia’s private sector and households, especially lower-income households, that will take the biggest hits.”

  The central bank will reconvene on Friday to decide the following steps to prevent a systemic meltdown.

  “Tight monetary conditions are helping inflation ease, but it won’t save it from reaching 20% this year in the conditions of deficit of certain goods and a considerable ruble drop,” Raiffeisen Bank analysts wrote in a note. 

  The Moscow Times said economists surveyed by the central bank expect inflation to jump to 20% this year, with interest rates in the double-digit range through the end of 2023. 

  Tyler Durden
  Wed, 03/16/2022 – 17:20

• Russia Demands US Stop Arms Flow To Ukraine In Call; Sullivan Warns Against Chemical Weapons Use
  Russia Demands US Stop Arms Flow To Ukraine In Call; Sullivan Warns Against Chemical Weapons Use

  Interfax is reporting that Russian Security Council Secretary Nikolai Patrushev asked his US counterpart Jake Sullivan in a Wednesday phone call to stop the US and Western supply of weapons going to Ukraine’s military.

  This after for many days now the Kremlin has put NATO countries on notice, saying that any inbound military shipment from external allies of Kiev will be deemed a “legitimate target”. The call also focused on pushing for a ceasefire after a lot of prior back-and-forth over the potential for a concrete ceasefire plan based on Ukraine’s neutrality regarding the NATO question.

  

  “Mr. Sullivan clearly laid out the United States’ commitment to continue imposing costs on Russia, to support the defense of Ukraine’s sovereignty and territorial integrity and to reinforce NATO’s eastern flank, in continued full coordination with our Allies and partners,” the White House said in a statement.

  So far these “costs” have remained in the realm of sanctions and international isolation. The call was tense, given also that Sullivan warned his Russian counterpart against deployment of any chemical weapons – though it’s unclear why the US thinks Russia’s military is readying this as an option: 

  U.S. National Security Advisor Jake Sullivan warned General Nikolay Patrushev, Secretary of the Russian Security Council, of the consequences in response to any Russian chemical or biological weapon attack in Ukraine.

  Sullivan spoke with Patrushev in a phone call Wednesday, according to the White House. Sullivan also said Russian attacks on Ukrainian cities and towns should stop if Russia is “serious about diplomacy.”

  Biden on Tuesday signed a spending bill which allocates billions more in funding weapons and defense and humanitarian assistance for Ukraine. 

  Putin responds after Zelensky’s address to Canadian parliament on Tuesday and US lawmakers Wednesday…

  1/2

  “I want ordinary citizens of Western states to hear me too. They are now trying to convince you that all your difficulties are the result of some hostile actions of Russia. That from your wallet you need to pay for the fight against the mythical Russian threat. It’s a lie.” pic.twitter.com/Q0VNbiOfrA

  — Pepe Escobar (@RealPepeEscobar) March 16, 2022

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

  On Wednesday morning President Zelensky made a case before Congress in a virtual address for a West-backed No Fly Zone. He also urged that the US give Kiev more “powerful aircraft” – as well additional weapons to stave off the Russian attack. 

  Tyler Durden
  Wed, 03/16/2022 – 16:40

• Blinken Planning Trip To Saudi Arabia Amid Ukraine-Induced Scramble For More Oil
  Blinken Planning Trip To Saudi Arabia Amid Ukraine-Induced Scramble For More Oil

  Starting last month there were unconfirmed reports that the White House could be mulling a high level admin trip to Riyadh – possibly even President Biden himself – in order to beg the Saudis to pump more oil, as the Russian invasion of Ukraine and resulting sanctions have put the question of sufficient energy supplies to Europe in peril. 

  Axios reports Wednesday the White House is looking to send Secretary of State Antony Blinken on a “possible trip to Saudi Arabia, the United Arab Emirates, Israel and the occupied West Bank later this month, according to five U.S., Israeli and Palestinian sources” cited in the report.

  

  If confirmed, this would mark the first time Blinken travels to visit directly with Washington’s two close oil producing Mideast allies. Apparently this will include stopovers to meet with the Israelis and Palestinians, following closer official relations between Tel Aviv and Gulf Cooperation Council countries in the wake of the Trump-brokered Abraham Accords. 

  As for Biden’s push to ramp up production so that energy prices can find some relief on tapping greater supplies, so far the Saudis have rejected Washington’s plea. According to details in Axios:

  • Blinken updated Lapid about the planned visit when they met in Riga, Latvia, 10 days ago, a senior Israeli official told me, but the schedule has changed several times since then.
  • The trip could happen either immediately before or after Blinken joins Biden at the NATO leaders summit in Brussels on March 24.
  • Yes, but: The U.S. and Israeli sources cautioned that events in Ukraine could influence the timing of the trip or lead to its cancellation.

  More importantly, Sullivan may have to navigate the behind the scenes drama involving crown prince Mohammed bin Salman who has lately expressed frustration at being snubbed by Biden over human rights abuses, going back especially to the 2018 murder of journalist Jamal Khashoggi – a hit widely believed ordered by MbS himself. 

  According to more from Axios: 

  A former U.S. official briefed on the situation tells Axios that MBS passed a message to the White House referencing the fact that Biden had previously said his counterpart was not the crown prince but the king, and suggested he, therefore, call him.

  This led to, as Axios recounts, “When King Salman took the call from Biden, MBS made sure his talking points didn’t include an agreement to increase oil production, according to the former official.”

  Tyler Durden
  Wed, 03/16/2022 – 16:20

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