- Here's Where Afghani Refugees Were Located (Until This Week)
Here’s Where Afghani Refugees Were Located (Until This Week)
According to the UNHCR, there were around 2.6 million Afghani refugees abroad at the end of 2020 that hadn’t entered or completed asylum processes.
A rundown of their locations by Statista’s Katharina Buchholz gives an overview of where Afghans typically seek refuge. 85 percent of Afghani refugees can be found in Afghanistan’s neighboring countries Iran and Pakistan, while Germany comes third with 148,000 – or around 5.5 percent – of Afghani refugees counted in late 2020.
You will find more infographics at Statista
Austria, France and Sweden are other major destinations for Afghani refugees in Europe. According to the latest report by the European Union, around 7,000 Afghans were granted permanent or temporary legal status in the EU in Q1 of 2021. At least 2,200 of them were located in Greece, 1,800 in France, 1,000 in Germany and around 700 in Italy, leaving smaller contingents for other EU states.
Overall, Afghani refugees had a 62 percent chance of gaining recognition in the EU, even though many are only granted the temporary right to remain. Conversely, France and Germany are also the countries rejecting the most Afghani asylum-seekers, but European countries have now suspended deportations in the light of the developments in the country.
11,000 Afghani refugees were located in Australia, surpassing the number found in the UK, India and the U.S. The latter country has expanded its program for Afghans who worked with the U.S. government and other entities during the military mission in the country. The Associated Press reports that around 20,000 could be expected to apply. With two months to go in the fiscal year, the U.S. has admitted close to 500 Afghani refugees in 2021, compared with 600 in FY2020 and 1,200 in FY2019.
Tyler Durden
Thu, 08/19/2021 – 02:45 - The Soviet Union Is Gone, But The Young Yearn For Socialism
The Soviet Union Is Gone, But The Young Yearn For Socialism
Authored by Richard Ebeling via The American Institute for Economic Research,
This August marks the 30th anniversary of the beginning of the end to the Soviet Union. During August 19-21, 1991, hardline members of the Soviet Communist Party and the KGB attempted a coup d’état in Moscow to prevent the political and economic reforms introduced over the prior five years from going any further. The coup failed, and on Christmas Eve, 1991, the Soviet Union was dissolved and disappeared from the political map of the world.
The events of those days are especially imprinted on my mind because I was in Moscow at the time, watching and, indeed, even participating in those August 1991 events. Frequently traveling to the Soviet Union on privatization and market reform consulting work, especially in the, now, former Soviet republic of Lithuania and in Moscow, I witnessed the failed coup attempt and its immediate aftermath.
The Soviet regime had ruled Russia and the other 14 component republics of the U.S.S.R. for nearly 75 years, since the Bolshevik Revolution in November 1917 led by Vladimir Lenin and his communist cadre of Marxist followers. During that almost three-quarters of a century, first under Lenin and especially Joseph Stalin and then their successors, historians have estimated that upwards of 64 million people – innocent, unarmed men, women and children – died at the hands of the Soviet regime in the name of building the “bright, beautiful future” of socialism.
Mass Murder and Slave Labor Under Soviet Socialism
The forced collectivization of the land under Stalin in the early 1930s, alone, is calculated to have cost the lives of nine to twelve million Russian and Ukrainian peasants and their families who resisted the loss of their private farms and being forced into state collective farms that replaced them. Some were simply shot; others were tortured to death or sent to die as slave laborers in the concentration and labor camps in Siberia or Soviet Central Asia known as the GULAG. Millions were slowly starved to death by a government-created famine designed to force submission to the central planning dictates of Stalin and his henchmen.
Millions of others were rounded up and sent off to those prison and labor camps as part of the central plan for forced industrial and mineral mining development of the far reaches of the Soviet Union. In the 1930s and 1940s, Stalin’s central plans would include quotas for how many of the “enemies of the people” were to be arrested and executed in every city, town and district in the Soviet Union. In addition, there were quotas for how many were to be rounded up as replacements for those who had already died in the GULAG working in the vast wastelands of Siberia, northern European Russia and Central Asia. (See my article, “The Human Cost of Socialism in Power.”)
By the 1960s, 1970s, and early 1980s the Soviet system had become increasingly corrupt, stagnant, and decrepit under a succession of aging Communist Party leaders whose only purpose was to hold on to power and their special privileges. In 1986 a much younger man, Mikhail Gorbachev, who had worked his way up in the Party hierarchy, was appointed to the leading position of General Secretary of the Communist Party of the U.S.S.R.
Gorbachev’s Attempt to Save Socialism
Gorbachev believed that the Soviet Union had taken several serious wrong turns in the past. But he was not an opponent of socialism or its Marxist-Leninist foundations. He wanted a new “socialism-with-a-human-face.” His goal was a “kinder and gentler” communist ideology, so to speak. He truly believed that the Soviet Union could be saved, and with it a more humane collectivist alternative to Western capitalism.
To achieve this end, Gorbachev had introduced two reform agendas: First, perestroika, a series of economic changes meant to admit the mistakes of heavy-handed central planning. State enterprise managers were to be more accountable, small private businesses would be permitted and fostered, and Soviet companies would be allowed to form joint ventures with selected Western corporations. Flexibility and adaptability would create a new and better socialist economy.
Second, glasnost, political “openness,” under which the political follies of the past would be admitted and the formerly “blank pages” of Soviet history – especially about the “crimes of Stalin” – would be filled in. Greater historical and political honesty, it was said, would revive the moribund Soviet ideology and renew the Soviet people’s enthusiastic support for the reformed and redesigned bright socialist future.
However, over time the more hardline and “conservative” members of the Soviet leadership considered all such reforms as opening a Pandora’s Box of uncontrollable forces that would undermine the Soviet system. They had already seen this happen in the outer ring of the Soviet Empire in Eastern Europe.
The Beginning of the End in Eastern Europe
In 1989 Gorbachev had stood by as the Berlin Wall, the symbol of Soviet imperial power in the heart of Europe, had come tumbling down, and the Soviet “captive nations” of Eastern Europe – East Germany, Poland, Czechoslovakia, Hungary, Romania and Bulgaria – that Stalin had claimed as conquered booty at the end of the Second World War, began to free themselves from communist control and Soviet domination. (See my article, “The History and Meaning of the Berlin Wall”.)
The Soviet hardliners were now convinced that a new political treaty that Gorbachev was planning to sign with Boris Yeltsin, president of the Russian Soviet Federative Republic and Nursultan Nazarbayev, president of the Soviet republic of Kazakhstan, would mean the end of the Soviet Union itself.
Already, the small Baltic republics of Estonia, Latvia, and Lithuania were reasserting the national independence they had lost in 1939-1940, as a result of Stalin and Hitler’s division of Eastern Europe. Violent, and murderous Soviet military crackdowns in Lithuania and in Latvia in January 1991 had failed to crush the budding democratic movements in those countries. Military methods had also been employed, to no avail, to keep in line the Soviet republics of Georgia and Azerbaijan. (See my article, “Witnessing Lithuania’s 1991 Fight for Freedom from Soviet Power”.)
Communist Conspirators for Soviet Power
On August 18, 1991, the hardline conspirators tried to persuade Gorbachev to reverse his planned political arrangements with the Russian Federation and Soviet Kazakhstan. When he refused he was held by force in a summer home he was vacationing at in the Crimea on the Black Sea.
Early on the morning of August 19, the conspirators issued a declaration announcing their takeover of the Soviet government. A plan to capture and possibly kill Boris Yeltsin failed. Yeltsin eluded the kidnappers and made his way to the Russian parliament building from his home outside Moscow. Military units loyal to the conspirators ringed the city with tanks on every bridge leading into the city and along every main thoroughfare in the center of Moscow. Tank units had surrounded the Russian parliament, as well.
But Yeltsin soon was rallying the people of Moscow and the Russian population in general to defend Russia’s own emerging democracy. People all around the world saw Yeltsin stand atop an army tank outside the parliament building asking Muscovites to resist this attempt to return to the dark days of communist rule.
The Western media made much at the time of the apparent poor planning during the seventy-two-hour coup attempt during August 19th to the 21st. The world press focused on and mocked the nervousness and confusion shown by some of the coup leaders during a press conference. The conspirators were ridiculed for their Keystone Cop-like behavior in missing their chance to kidnap Yeltsin or delaying their seizure of the Russian parliament building; or leaving international telephone lines open and not even jamming foreign news broadcasts that were reporting the events as they happened to the entire Soviet Union.
The Dangers If the Hardliners had Won
Regardless of the poor planning on the part of the coup leaders, however, the fact remains that if they had succeeded the consequences might have been catastrophic. I have a photocopy of the arrest warrant form that had been prepared for the Moscow region and signed by the Moscow military commander, Marshal Kalinin.
It gave the military and the KGB, the Soviet secret police, the authority to arrest anyone. It had a “fill-in-the-blank,” where the victim’s name would be written in. Almost 500,000 of these arrest warrant forms had been prepared. In other words, upwards of a half-million people might have been imprisoned in Moscow, alone. The day before the coup began, the KGB had received a consignment of 250,000 pairs of handcuffs. And the Russian press later reported that some of the prison camps in Siberia had been clandestinely reopened. If the coup had succeeded possibly as many as three to four million people in the Soviet Union would have been sent to the GULAG, the notorious Soviet labor camp system.
Another document published in the Russian press after the coup failed had the instructions for the military authorities in various regions around the country. They were to begin tighter surveillance of the people in the areas under their jurisdiction. They were to keep watch on the words and actions of everyone. Foreigners were to be even more carefully followed and surveilled. And their reports to the coup leaders in Moscow were to be filed every four hours. Indeed, when the coup was in progress, the KGB began to close down commercial joint ventures with Western companies in Moscow, accusing them of being “nests of spies,” and arrested some of the Russian participants in these enterprises.
Fear Underneath the Surrealism of Calm
During the coup attempt Moscow had a surrealistic quality, as I walked through various parts of the center of the city. On the streets around the city it seemed as if nothing were happening – except for the clusters of Soviet tank units strategically positioned at central intersections and at the bridges crossing the Moscow River. Taxi cabs patrolled the avenues looking for passengers; the population seemed to go about its business walking to and from work, or waiting in long lines for the meager supplies of everyday essentials at the government retail stores; and motorists were as usual also lined up at the government-owned gasoline stations. Even with the clearly marked foreign license plates on my rented car, I was never stopped as I drove around the center of Moscow.
The only signs that these were extraordinary days were the grimmer than usual looks on the faces of many; and that in the food stores many people would silently huddle around radios after completing their purchases. However, the appearance of near normality could not hide the fact that the future of the country was hanging in the balance. (See my article about everyday life under Soviet socialism, “Socialism-in-Practice was a Nightmare, Not Utopia”.)
Russians Run the Risk for Freedom
During the three days of that fateful week, Russians of various walks of life had to ask themselves what price they put on freedom. And thousands concluded that risking their lives to prevent a return to communist despotism was a price they were willing to pay. Those thousands appeared at the Russian parliament in response to Boris Yeltsin’s appeal to the people. They built makeshift barricades, and prepared to offer themselves as unarmed human shields against Soviet tanks and troops, if they had attacked. My future wife, Anna, and I were among those friends of freedom who stood vigil during most of those three days facing the barrels of Soviet tanks.
Among those thousands, three groups were most noticeable in having chosen to fight for freedom: First, young people in their teens and twenties who had been living in a freer environment during the previous six years since Gorbachev had come to power, and who did not want to live under the terror and tyranny their parents had known in the past. Second, new Russian businessmen, who realized that without a free political order the emerging economic liberties would be crushed that were enabling them to establish private enterprises. And, third, veterans of the Soviet war in Afghanistan, who had been conscripted into the service of Soviet imperialism and were now determined to prevent its return.
The bankruptcy of the Soviet system was demonstrated not only by the courage of those thousands defending the Russian parliament, but also by the unwillingness of the Soviet military to obey the orders of the coup leaders. It is true that only a handful of military units actually went over immediately to Yeltsin’s side in Moscow. But hundreds of Russian babushkas – grandmothers – went up to the young soldiers and officers manning the Soviet tanks, and asked them, “Are you going to shoot your mother, your father, your grandmother? We are your own people.” The final act of the coup came when these military units refused to obey orders and seize the Russian parliament building, at the possible cost of hundreds or thousands of lives.
Freedom! Freedom! Freedom!
On the clear, warm Thursday of August 22, the day after the coup attempt collapsed, thousands of Muscovites assembled in a large plaza behind the Russian parliament stood and listened as Boris Yeltsin told them that that area would now be known as the Square of Russian Freedom. The multitude replied in unison: Svaboda! Svaboda! Svaboda! – “Freedom! Freedom, Freedom!”
A huge flag of pre-communist Russia, with its colors of white, blue and red, draped the entire length of the parliament building. The crowd looked up and watched as the Soviet red flag, with its yellow hammer and sickle in the upper left corner, was lowered from the flagpole atop the parliament, and the Russian colors were raised for the first time in its place. And, again, the people chanted: “Freedom! Freedom! Freedom!”
Not too far away from the parliament building in Moscow, that same day, a large crowd had formed at Lubyanka Square at the headquarters of the KGB. With the help of a crane, these Muscovites pulled down a large statue of Felix Dzerzhinsky, the founder of the Soviet secret police that stood near the entrance to the KGB building. In a small park across from the KGB headquarters, in a corner of which rests a small monument to the victims of the Soviet prison and labor camps, an anti-communist rally was held. A young man in an old Czarist Russian military uniform burned a Soviet flag and played pre-revolutionary patriotic songs on an accordion while the crowd cheered him on.
The seventy-five-year nightmare of communist tyranny and terror was coming to an end. The people of Russia were hoping for freedom, and they were basking in the imagined joy of it. Russia’s history since then has not met any of those euphoric hopes of August 1991, yet, it nonetheless stands as an important moment marking a symbolic end to the collectivist nightmare of the 20th century.
American and British Young Know No History and Want Socialism
Fast forward to today, thirty years later. It is as if the last hundred years of the socialist chamber of horrors, not only in the Soviet Union but in all other places around the world in which governments have widely nationalized the means of production and imposed forms of centralized planning, has practically never happened. The brutality and barbarity of the National Socialist (Nazi) regime in Hitler’s Germany has been rightly highlighted in many movies and documentaries in the decades since the end of the Second World War. But compare these with the paucity of similar films and documentaries about the Soviet Union and similar socialist regimes and their disastrous central planning systems, with all their tyranny, cruelty, mass murder, corruption and gradations of privileges and perks for the huge network of Party members and elite bureaucrats who ran all facets of the command and control economy.
Recent opinion surveys by the Victims of Communism Memorial Foundation in the United States on, “U.S. Attitudes Toward Socialism, Communism, and Collectivism,” (October 2020) and by the Institute of Economic Affairs in the United Kingdom in a report, Left Turn Ahead? Surveying Attitudes of Young People Towards Capitalism and Socialism (July 2021) about people’s views about the socialist and capitalist systems, especially among the younger segments of the population, make it clear that knowledge and understanding about what socialist reality has been like has gone down an Orwellian memory hole.
In the United States, a quarter of those surveyed, 26 percent, said that they would like to see the end of the capitalist system and its replacement with a socialist economy. Among those under 40 years of age, the number preferring a socialist society rose to between 31 and 35 percent. Ten percent in this age group consider the ideas in Marx’s Communist Manifesto to be a better guarantor of a free and equitable society than the ideas in the Declaration of Independence. About 30 percent of those below 40 said that Marxism is a “positive” movement against injustice and for management of the economy for the good of all.
When asked, “What is a socialist system?” 31 percent said it involves government ownership of the means of production, while another 32 percent said private enterprise plus government regulation and the welfare state. Six percent said that socialism is a “new system” that has never been tried.
In the United Kingdom, 67 percent of those in the younger categories of the British population said they would like to live under a socialist economic system, and identified socialism with the words, “workers,” “public,” “equal,” and “fair.” Capitalism was identified by 75 percent in the survey with global warming, destruction of the planet, and racism, and 73 percent said that capitalism fosters “greed,” “selfishness,” and “materialism,” compared to socialism, which cultivates “compassion, cooperation, and solidarity.” A large majority said that socialism had never really been tried and that places like Venezuela have been instances in which the socialist idea was simply poorly implemented and therefore not a real test of a socialist system.
These attitudes and beliefs among the younger generations on both sides of the Atlantic do not bode well for the future of freedom. The ideas of one generation often become the implemented policies of the next one. If neither knowledge of, nor appropriate lessons from the reality of socialism-in-practice over the last one hundred years are learned, we may very well be condemned to repeat the past with all of its social, economic, and politically damaging consequences. (See my article, “Socialism: Marking a Century of Death and Destruction”.)
Tyler Durden
Thu, 08/19/2021 – 02:00 - Escobar: How Russia-China Are Stage-Managing The Taliban
Escobar: How Russia-China Are Stage-Managing The Taliban
The first Taliban press conference after this weekend’s Saigon moment geopolitical earthquake, conducted by spokesman Zabihullah Mujahid, was in itself a game-changer.
The contrast could not be starker with those rambling pressers at the Taliban embassy in Islamabad after 9/11 and before the start of the American bombing – proving this is an entirely new political animal.
Yet some things never change. English translations remain atrocious.
Here is a good summary of the key Taliban statements, and here (in Russian) is a very detailed roundup.
These are the key takeaways.
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No problem for women to get education all the way to college, and to continue to work. They just need to wear the hijab (like in Qatar or Iran). No need to wear a burqa. The Taliban insist, “all women’s rights will be guaranteed within the limits of Islamic law.”
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The Islamic Emirate “does not threaten anyone” and will not treat anyone as enemies. Crucially, revenge – an essential plank of the Pashtunwali code – will be abandoned, and that’s unprecedented. There will be a general amnesty – including people who worked for the former NATO-aligned system. Translators, for instance, won’t be harassed, and don’t need to leave the country.
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Security of foreign embassies and international organizations “is a priority.” Taliban special security forces will protect both those leaving Afghanistan and those who remain.
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A strong inclusive Islamic government will be formed. “Inclusive” is code for the participation of women and Shi’ites.
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Foreign media will continue to work undisturbed. The Taliban government will allow public criticism and debate. But “freedom of speech in Afghanistan must be in line with Islamic values.”
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The Islamic Emirate of Taliban wants recognition from the “international community” – code for NATO. The overwhelming majority of Eurasia and the Global South will recognize it anyway. It’s essential to note, for example, the closer integration of the expanding SCO – Iran is about to become a full member, Afghanistan is an observer – with ASEAN: the absolute majority of Asia will not shun the Taliban.
For the record, they also stated that the Taliban took all of Afghanistan in only 11 days: that’s pretty accurate. They stressed “very good relations with Pakistan, Russia and China.” Yet the Taliban don’t have formal allies and are not part of any military-political bloc. They definitely “won’t allow Afghanistan to become a safe haven for international terrorists”. That’s code for ISIS/Daesh.
On the key issue of opium/heroin: the Taliban will ban their production. So, for all practical purposes, the CIA heroin rat line is dead.
As eyebrow raising as these statements may be, the Taliban did not even get into detail on economic/infrastructure development deals – as they will need a lot of new industries, new jobs and improved Eurasian-wide trade relations. That will be announced later.
The go-to Russian guy
Sharp US observers are remarking, half in jest, that the Taliban in only one sitting answered more real questions from US media than POTUS since January.
What this first press conference reveals is how the Taliban are fast absorbing essential P.R. and media lessons from Moscow and Beijing, emphasizing ethnic harmony, the role of women, the role of diplomacy, and deftly defusing in a single move all the hysteria raging across NATOstan.
The next bombshell step in the P.R. wars will be to cut off the lethal, evidence-free Taliban-9/11 connection; afterwards the “terrorist organization” label will disappear, and the Taliban as a political movement will be fully legitimized.
Moscow and Beijing are meticulously stage-managing the Taliban reinsertion in regional and global geopolitics. This means that ultimately the SCO is stage-managing the whole process, applying a consensus reached after a series of ministerial and leaders meetings, leading to a very important summit next month in Dushanbe.
The key player the Taliban are talking to is Zamir Kabulov, Russia’s special presidential envoy for Afghanistan. In yet another debunking of NATOstan narrative, Kabulov confirmed, for instance, “we see no direct threat to our allies in Central Asia. There are no facts proving otherwise.”
The Beltway will be stunned to learn that Zabulov has also revealed, “we have long been in talks with the Taliban on the prospects for development after their capture of power and they have repeatedly confirmed that they have no extraterritorial ambition, they learned the lessons of 2000.” These contacts were established “over the past 7 years.”
Zabulov reveals plenty of nuggets when it comes to Taliban diplomacy: “If we compare the negotiability of colleagues and partners, the Taliban have long seemed to me much more negotiable than the puppet Kabul government. We proceed from the premise that the agreements must be implemented. So far, with regard to the security of the embassy and the security of our allies in Central Asia, the Taliban have respected the agreements.”
Faithful to its adherence to international law, and not the “rules-based international order”, Moscow is always keen to emphasize the responsibility of the UN Security Council: “We must make sure that the new government is ready to behave conditionally, as we say, in a civilized manner. That’s when this point of view becomes common to all, then the procedure [of removing the qualification of the Taliban as a terrorist organization] will begin.”
So while the US/EU/NATO flee Kabul in spasms of self-inflicted panic, Moscow practices – what else – diplomacy. Zabulov: “That we have prepared the ground for a conversation with the new government in Afghanistan in advance is an asset of Russian foreign policy.”
Dmitry Zhirnov, Russia’s ambassador to Afghanistan, is working overtime with the Taliban. He met a senior Taliban security official yesterday. The meeting was “positive, constructive…The Taliban movement has the most friendly; the best policy towards Russia… He arrived alone in one vehicle, with no guards.”
Both Moscow and Beijing have no illusions that the West is already deploying Hybrid War tactics to discredit and destabilize a government that isn’t even formed and hasn’t even started working. No wonder Chinese media is describing Washington as a “strategic rogue.”
What matters is that Russia-China are way ahead of the curve, cultivating parallel inside tracks of diplomatic dialogue with the Taliban. It’s always crucial to remember that Russia harbors 20 million Muslims, and China at least 35 million. These will be called to support the immense project of Afghan reconstruction – and full Eurasia reintegration.
The Chinese saw it coming
Chinese Foreign Minister Wang Yi saw it coming weeks ago. And that explains the meeting in Tianjin in late July, when he hosted a high-level Taliban delegation, led by Mullah Baradar, de facto conferring them total political legitimacy. Beijing already knew the Saigon moment was inevitable. Thus the statement stressing China expected to “play an important role in the process of peaceful reconciliation and reconstruction in Afghanistan”.
What this means in practice is China will be a partner of Afghanistan on infrastructure investment, via Pakistan, incorporating it into an expanded China-Pakistan Economic Corridor (CPEC) bound to diversify connectivity channels with Central Asia. The New Silk Road corridor from Xinjiang to the port of Gwadar in the Arabian Sea will branch out: the first graphic illustration is Chinese construction of the ultra-strategic Peshawar-Kabul highway.
The Chinese are also building a major road across the geologically spectacular, deserted Wakhan corridor from western Xinjiang all the way to Badakhshan province, which incidentally, is now under total Taliban control.
The trade off is quite straightforward: the Taliban should allow no safe haven for the East Turkestan Islamic Movement (ETIM), and no interference in Xinjiang.
The overall trade/security combo looks like a certified win-win. And we’re not even talking about future deals allowing China to exploit Afghanistan’s immense mineral wealth.
Once again, the Big Picture reads like the Russia-China double helix, connected to all the “stans” as well as Pakistan, drawing a comprehensive game plan/road map for Afghanistan. In their multiple contacts with both Russians and Chinese, the Taliban seem to have totally understood how to profit from their role in the New Great Game.
The extended New Axis of Evil
Imperial Hybrid War tactics to counteract the scenario are inevitable. Take the first proclamation of a Northern Alliance “resistance”, in theory led by Ahmad Masoud, the son of the legendary Lion of the Panjshir killed by al-Qaeda two days before 9/11.
I met Masoud father – an icon. Afghan insider info on Masoud son is not exactly flattering. Yet he’s already a darling of woke Europeans, complete with a glamour pose for AFP, an impromptu visit in the Panjshir by professional philosopher swindler Bernard-Henri Levy, and the release of a manifesto of sorts published in several European newspapers, exhibiting all the catchphrases: “tyranny”, “slavery”, “vendetta”, “martyred nation”, “Kabul screams”, “nation in chains”, etc.
The whole set up smells like a “son of Shah” [of Iran] gambit. Masoud son and his mini-militia are completely surrounded in the Panjshir mountains and can’t be de facto effective even when it comes to regimenting the under 25s, two-thirds of the Afghan population, whose main worry is to find real jobs in a nascent real economy.
Woke NATOstan “analyses” of Taliban Afghanistan don’t even qualify as irrelevant, insisting that Afghanistan is not strategic and even lost its tactical importance for NATO. It’s a sorry spectacle illustrating how Europe is hopelessly behind the curve, drenched in trademark neo-colonialism of the White Man’s Burden variety as it dismisses a land dominated by clans and tribes.
Expect China to be one of the first powers to formally recognize the Islamic Emirate of Afghanistan, alongside Turkey and, later on, Russia. I have already alluded to the coming of a New Axis of Evil: Pakistan-Taliban-China. The axis will inevitably be extended to Russia-Iran. So what? Ask Mullah Baradar: he couldn’t care less.
Tyler Durden
Thu, 08/19/2021 – 00:10 -
- Feds Offer Cryptocurrency Rewards On Dark Web For Information On Hackers And Terrorists
Feds Offer Cryptocurrency Rewards On Dark Web For Information On Hackers And Terrorists
The US State Department has launched a new initiative to pay anonymous informants in cryptocurrency for information on enemy state-backed hackers or suspected terrorists, according to CNN.
The agency, for the first time, via its “Rewards for Justice” (RFJ) program, will be paying informants cryptocurrency on a secure portal on the Dark Web for information about enemy state-backed hackers involved in attacking US infrastructure or businesses and or terrorists who want to harm other American interests.
On RFJ’s website, the State Department is offering “rewards of up to $10 million for information leading to the identification or location of any person who, while acting at the direction or under the control of a foreign government, participates in malicious cyber activities against US critical infrastructure.” Informants who provide credible information will remain anonymous and elect to receive compensation in the form of crypto assets.
Here’s RFJ’s website.
RFJ’s submit a tip section.
The RFJ platform can be accessed using Tor, one of the most common browsers for the Dark Web that protects a user’s privacy. Officials told CNN they have begun receiving tips.
“Within our program, there’s a tremendous amount of enthusiasm because we’re really pushing the envelope every chance we get to try and reach audiences, sources, people who may have information that helps improve our national security,” a State Department source told CNN. “It’s been edgy for some government agencies, perhaps, but we’re going to keep pushing forward in many different ways.”
The source declined to elaborate on the tips already received through the Dark Web due to the sensitive nature of the information and sources.
“Something on the Dark Web that allows total anonymity and an initial level of security is probably more appropriate for those folks,” a second State Department source said. “So just finding people where they are and reaching them with the technology on which they are most comfortable, I think, is the name of the game for Rewards for Justice.”
Bill Evanina, CEO of The Evanina Group, who recently retired as Director of the National Counterintelligence and Security Center at the FBI and CIA, said this initiative is the federal government’s most public use of crypto assets so far.
Contrary to the State Department’s use-case, Minneapolis Federal Reserve President Neel Kashkari said Tuesday at an event in Montana that crypto is trash and hasn’t “seen any use case that Bitcoin solves other than funding illicit activities like drugs and prostitution.”
Kashkari’s poisonous remarks about crypto are more of the same from the central banker who also said crypto “is 95% fraud, hype, noise, and confusion.”
While the State Department is using crypto and the dark web to catch bad guys, Kashkari is living in an alternate reality and should realize that real uses of crypto are already observed in parts of the federal government.
But again, Kashkari has to defend the dollar, so naturally, any alternative form of payment he is against.
Tyler Durden
Wed, 08/18/2021 – 23:50 - The Right To Bodily Integrity: Nobody Wins And We All Lose In The COVID-19 Showdown
The Right To Bodily Integrity: Nobody Wins And We All Lose In The COVID-19 Showdown
Authored by John W. Whitehead & Nisha Whitehead via The Rutherford Institute,
“We’ve reached the point where state actors can penetrate rectums and vaginas, where judges can order forced catheterizations, and where police and medical personnel can perform scans, enemas and colonoscopies without the suspect’s consent. And these procedures aren’t to nab kingpins or cartels, but people who at worst are hiding an amount of drugs that can fit into a body cavity. In most of these cases, they were suspected only of possession or ingestion. Many of them were innocent… But these tactics aren’t about getting drugs off the street… These tactics are instead about degrading and humiliating a class of people that politicians and law enforcement have deemed the enemy.”
– Radley Balko, The Washington Post
Freedom is never free.
There is always a price—always a sacrifice—that must be made in order to safeguard one’s freedoms.
Where that transaction becomes more complicated is when one has to balance the rights of the individual with the needs of the community.
Philosophers such as Thomas Hobbes, John Locke and Jean-Jacques Rousseau envisioned the social contract between the individual and a nation’s rulers as a means of finding that balance. Invariably, however, those in power grow greedy, and what was intended to be a symbiotic relationship with both sides benefitting inevitably turns into a parasitic one, with a clear winner and a clear loser.
We have seen this vicious cycle play out over and over again throughout the nation’s history.
Just look at this COVID-19 pandemic: the whole sorry mess has been so overtly politicized, propagandized, and used to expand the government’s powers (and Corporate America’s bank balance) that it’s difficult at times to distinguish between what may be legitimate health concerns and government power grabs.
After all, the government has a history of shamelessly exploiting national emergencies for its own nefarious purposes. Terrorist attacks, mass shootings, civil unrest, economic instability, pandemics, natural disasters: the government has been taking advantage of such crises for years now in order to gain greater power over an unsuspecting and largely gullible populace.
This COVID-19 pandemic is no different.
Yet be warned: we will all lose if this pandemic becomes a showdown between COVID-19 vaccine mandates and the right to bodily integrity.
It doesn’t matter what your trigger issue is—whether it’s vaccines, abortion, crime, religion, immigration, terrorism or some other overtly politicized touchstone used by politicians as a rallying cry for votes—we should all be concerned when governments and businesses (i.e., the Corporate State) join forces to compel individuals to sacrifice their right to bodily integrity (which goes hand in hand with the right to conscience and religious freedom) on the altar of so-called safety and national security.
That’s exactly what’s unfolding right now, with public and private employers using the threat of termination to force employees to be vaccinated against COVID-19.
Unfortunately, legal protections in this area are limited.
While the Americans with Disabilities Act protects those who can prove they have medical conditions that make receiving a vaccination dangerous, employees must be able to prove they have a sensitivity to vaccines.
Beyond that, employees with a religious objection to the vaccine mandate can try to request an exemption, but even those who succeed in gaining an exemption to a vaccine mandate may have to submit to routine COVID testing and mask requirements, especially if their job involves contact with other individuals.
Under the First Amendment and Title VII of the Civil Rights Act of 1964, individuals have a right of conscience and/or religious freedom to ask that their sincere religious beliefs against receiving vaccinations be accommodated. To this end, The Rutherford Institute has issued guidance and an in-depth fact sheet and model letter for those seeking a religious exemption to a COVID-19 vaccine mandate in the workplace. The Rutherford Institute’s policy paper, “Know Your Rights: How To Request a Religious Accommodation for COVID-19 Vaccine Mandates in the Workplace,” goes into the details of how and why and in which forums one can request such accommodation, but there is no win-win scenario.
As with all power plays of this kind, the ramifications of empowering the government and its corporate partners to force individuals to choose between individual liberty and economic survival during a so-called state of “emergency” can lead to terrifying results.
At a minimum, it’s a slippery slope that justifies all manner of violations in the name of national security, the interest of the state and the so-called greater good.
If the government—be it the President, Congress, the courts or any federal, state or local agent or agency—can willfully disregard the rights of any particular person or group of persons, then that person becomes less than a citizen, less than human, less than deserving of respect, dignity, civility and bodily integrity. He or she becomes an “it,” a faceless number that can be tallied and tracked, a quantifiable mass of cells that can be discarded without conscience, an expendable cost that can be written off without a second thought, or an animal that can be bought, sold, branded, chained, caged, bred, neutered and euthanized at will.
That’s exactly where we find ourselves now: caught in the crosshairs of a showdown between the rights of the individual and the so-called “emergency” state.
All of those freedoms we cherish—the ones enshrined in the Constitution, the ones that affirm our right to free speech and assembly, due process, privacy, bodily integrity, the right to not have police seize our property without a warrant, or search and detain us without probable cause—amount to nothing when the government and its agents are allowed to disregard those prohibitions on government overreach at will.
This is the grim reality of life in the American police state.
Our so-called rights have been reduced to technicalities in the face of the government’s ongoing power grabs.
Yet those who founded this country believed that what we conceive of as our rights were given to us by God—we are created equal, according to the nation’s founding document, the Declaration of Independence—and that government cannot create nor can it extinguish our God-given rights. To do so would be to anoint the government with god-like powers and elevate it above the citizenry.
And that, in a nutshell, is what happens when government officials are allowed to determine who is deserving of constitutional rights and who should be stripped of those rights for whatever reason may be justified by the courts and the legislatures.
In this way, concerns about COVID-19 mandates and bodily integrity are part of a much larger debate over the ongoing power struggle between the citizenry and the government over our property “interest” in our bodies. For instance, who should get to decide how “we the people” care for our bodies? Are we masters over our most private of domains, our bodies? Or are we merely serfs who must answer to an overlord that gets the final say over whether and how we live or die?
This debate over bodily integrity covers broad territory, ranging from abortion and euthanasia to forced blood draws, biometric surveillance and basic healthcare.
Forced vaccinations are just the tip of the iceberg.
Forced vaccinations, forced cavity searches, forced colonoscopies, forced blood draws, forced breath-alcohol tests, forced DNA extractions, forced eye scans, forced inclusion in biometric databases: these are just a few ways in which Americans continue to be reminded that we have no control over what happens to our bodies during an encounter with government officials.
Consider the case of Mitchell vs. Wisconsin in which the U.S. Supreme Court in a 5-4 decision found nothing wrong when police officers read an unconscious man his rights and then proceeded to forcibly and warrantlessly draw his blood while he was still unconscious in order to determine if he could be charged with a DUI.
To sanction this forced blood draw, the cops and the courts hitched their wagon to state “implied consent” laws (all of the states have them), which suggest that merely driving on a state-owned road implies that a person has consented to police sobriety tests, breathalyzers and blood draws.
More than half of the states (29 states) allow police to do warrantless, forced blood draws on unconscious individuals whom they suspect of driving while intoxicated.
Seven state appeals courts have declared these warrantless blood draws when carried out on unconscious suspects are unconstitutional. Courts in seven other states have found that implied consent laws run afoul of the Fourth Amendment. And yet seven other states (including Wisconsin) have ruled that implied consent laws provide police with a free pass when it comes to the Fourth Amendment and forced blood draws.
Read the writing on the wall, and you’ll see how little remains of our right to bodily integrity in the face of the government’s steady assaults on the Fourth Amendment.
Our freedoms—especially the Fourth Amendment—continue to be strangulated by a prevailing view among government bureaucrats that they have the right to search, seize, strip, scan, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation.
Worse, on a daily basis, Americans are being made to relinquish the most intimate details of who we are—our biological makeup, our genetic blueprints, and our biometrics (facial characteristics and structure, fingerprints, iris scans, etc.)—in order to clear the nearly insurmountable hurdle that increasingly defines life in the United States: we are now guilty until proven innocent.
Such is life in America today that individuals are being threatened with arrest and carted off to jail for the least hint of noncompliance, homes are being raided by militarized SWAT teams under the slightest pretext, property is being seized on the slightest hint of suspicious activity, and roadside police stops have devolved into government-sanctioned exercises in humiliation and degradation with a complete disregard for privacy and human dignity.
While forced searches—of one’s person and property—may span a broad spectrum of methods and scenarios, the common denominator remains the same: a complete disregard for the dignity and rights of the citizenry.
Unfortunately, the indignities being heaped upon us by the architects and agents of the American police state—whether or not we’ve done anything wrong—are just a foretaste of what is to come.
The government doesn’t need to tie you to a gurney and forcibly take your blood or strip you naked by the side of the road in order to render you helpless. As this showdown over COVID-19 vaccine mandates makes clear, the government has other methods—less subtle perhaps but equally devastating—of stripping you of your independence, robbing you of your dignity, and undermining your rights.
With every court ruling that allows the government to operate above the rule of law, every piece of legislation that limits our freedoms, and every act of government wrongdoing that goes unpunished, we’re slowly being conditioned to a society in which we have little real control over our bodies or our lives.
You may not realize it yet, but you are not free.
If you believe otherwise, it is only because you have made no real attempt to exercise your freedoms.
Had you attempted to exercise your freedoms before now by questioning a police officer’s authority, challenging an unjust tax or fine, protesting the government’s endless wars, defending your right to privacy against the intrusion of surveillance cameras, or any other effort that challenges the government’s power grabs and the generally lopsided status quo, you would have already learned the hard way that the American Police State has no appetite for freedom and it does not tolerate resistance.
This is called authoritarianism, a.k.a. totalitarianism, a.k.a. oppression.
As Glenn Greenwald notes for the Guardian:
Oppression is designed to compel obedience and submission to authority. Those who voluntarily put themselves in that state – by believing that their institutions of authority are just and good and should be followed rather than subverted – render oppression redundant, unnecessary. Of course people who think and behave this way encounter no oppression. That’s their reward for good, submissive behavior. They are left alone by institutions of power because they comport with the desired behavior of complacency and obedience without further compulsion. But the fact that good, obedient citizens do not themselves perceive oppression does not mean that oppression does not exist.
Get ready to stand your ground or run for your life.
As I make clear in my book Battlefield America: The War on the American People, our government “of the people, by the people and for the people” has been transformed into a greedy pack of wolves that is on the hunt.
“We the people” are the prey.
Tyler Durden
Wed, 08/18/2021 – 23:30 - New Zealand's Tyrannical PM Tells Kiwis To 'Blame Australia' For COVID Lockdowns
New Zealand’s Tyrannical PM Tells Kiwis To ‘Blame Australia’ For COVID Lockdowns
New Zealand’s PM Jacinda Ardern decided to place the entire country on lockdown after finding a single case believed to be (but not proven to be) caused by the delta variant. And she wants desperate Kiwis eager to avoid the two-month horrorshow of lockdowns currently plaguing Australia (which has failed to stop the spread of the virus) to know that the real culprit responsible for their current situation is: Australia.
Specifically, New South Wales, which according to Ardern didn’t lock down “hard and fast” enough to stop the virus from leapfrogging to neighboring New Zealand, which hasn’t seen a case of COVID in months.
New Zealand Prime Minister Jacinda Ardern
And anybody who questions whether New Zealand’s decision to enter a “Level 4” lockdown over a single COVID case (although the number of new cases climbed to 10 on Wednesday) should remember that if New Zealand doesn’t act decisively now, they will need to deal with endlessly frustrating extensions later.
Jacinda Ardern was today asked her response to those that question the need for such a quick and harsh lockdown…
Her answer: Australia
— Charles Croucher (@ccroucher9) August 18, 2021
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Here’s more according to News.Au:
Ms Ardern did not hide the fact that she blames NSW’s “light and long” lockdown for the spread of covid across the Tasman.
“Our ability to narrow down that this is a case that is linked to New South Wales outbreak, gives us a lot of leads to chase down as quickly as we can,” she said.
Asked by a reporter “what is your message to people who questioned the need for an alert level four lockdown?”
“Australia,” Ms Ardern replied bluntly. “We’ve seen the dire consequences of taking too long to act in other countries, not least our neighbours.”
“We have seen what can happen elsewhere if we fail to get on top of it. We only get one chance,” she said.
In response to Ardern’s testy accusation, NSW Premier Gladys Berejiklian defended her decision-making in the press, claiming that Greater Sydney’s lockdown was undertaken quickly enough, even as she counted a record 633 local cases.
Instead, she blamed “too many people” who have been breaking the rules for the rise in cases.
“We know the settings we have in place are some of the harshest that Australia has ever seen.”
“Unfortunately it only takes a small number of people to do the wrong thing, to cause this amount of spread.”
“We have the right settings in place. But unfortunately too many people continue to do the wrong thing,” she said.
New Zealand has made mask-use mandatory for people over 12, if they are visiting supermarkets, pharmacies or other locations open for essential services. Mask use is already mandatory on public transport.
The country’s vaccine rollout will continue Wednesday following a brief pause. Presently, only 24% of the country’s adult population is vaccinated. New Zealand’s lockdown has already killed the country’s chance to become the first G-10 nation to hike interest rates.
And ultimately Ardern’s criticism of Australia shows that the proponents of the already discredited “ZeroCOVID” approach will increasingly look for people to blame when their lockdowns are unsuccessful at eliminating a virus that’s become endemic to the human population.
Apparently, it seems like a better option than admitting the truth to a weary public.
Tyler Durden
Wed, 08/18/2021 – 23:10 - New US Air Force Secretary Wants To "Scare" China
New US Air Force Secretary Wants To “Scare” China
Authored by Dave DeCamp via AntiWar.com,
Researching and developing new weapons technologies is a key part of the Pentagon’s strategy to counter China. In an interview with Defense News, President Biden’s new Air Force secretary said he’d like to see the US military field the type of new technologies that “scare China.”
Frank Kendall, who was sworn in as Air Force secretary on July 28th, made it clear in the interview that he is focused on China. “I’ve been obsessed, if you will, with China for quite a long time now — and its military modernization, what that implies for the US and for security,” he said.
Secretary of the Air Force Frank Kendall III. Image: US Air Force Hyping up the threat of China’s military serves the Pentagon to justify more spending, and Kendall hinted that he believes the Air Force doesn’t have a sufficient budget. “The Air Force has been overly constrained,” he said.
“I think we’ve not been allowed to do things we really need to do to free up resources for things that are higher priority. We’ve had a very hard time getting the Congress to allow us to retire older aircraft.”
One project that Kendall discussed is the B-21 bomber, which is currently being developed. “I think that’s going to be something that will be intimidating, it’s going to be very capable. And there are a few others like that that are coming down the pipeline. … But I think we have to be continuously thinking about other things that will be intimidating to our future enemies.”
The Pentagon budget requested by President Biden prioritized spending on new weapons technology. The budget request asked for over $112 billion for research, development, testing, and evaluation, known as RDT&E. Besides new long-range bombers, US military leaders are calling for investment in technology like artificial intelligence, robotics, space and cyber capabilities, and hypersonic missiles.
Air Force artist-rendered image of the futuristic B-21 Raider Comments like Kendall’s concerning China are now commonplace from military leaders in Washington. Biden’s new Navy Secretary Carlos Del Toro said during his Senate confirmation hearing in July that he would focus “exclusively” on China in his new position.
Tyler Durden
Wed, 08/18/2021 – 22:50 - Erdogan Welcomes "Cooperation" With Taliban As Turkey Builds Border Wall To Stop Refugee Influx
Erdogan Welcomes “Cooperation” With Taliban As Turkey Builds Border Wall To Stop Refugee Influx
In televised statements Wednesday Turkish President Recep Tayyip Erdoğan gave a speech reacting to fast-moving events in Afghanistan and the newly entrenched Taliban rule in Kabul. His main message was to emphasize Turkey is “open” to “cooperation” with the new Taliban leadership in Kabul, further saying that he appreciates their “moderate statements”.
This comes after Taliban spokesmen Zabihullah Mujahid the day prior claimed that Afghani women would still be allowed to work and study, even suggesting the possibility of government roles but “in accord with Islamic law”. But the reality on the ground already is pointing in another direction.
“We are open to cooperation. They have been very sensitive towards relations with Turkey and we hope their sensitivity will continue,” Erdoğan said in the televised speech.
He further indicated Turkey stands ready to to cooperate in “every possible way” with Afghanistan based shared history and cultural ties, presumably a reference to Islam.
Erdogan also for the first time declared Turkey’s willingness to remain in Kabul airport for the time being in order to ensure security and stabilization. This a day after Turkish Foreign Minister Mevlüt Cavuşoglu confirmed that Ankara is engaged in formal talks with Taliban representatives, nothing “positive” intentions and messages.
Meanwhile, likely Turkey’s top priority is the prevention of a mass and sustained refugee exodus, as happened in prior years putting extreme strain on its economy.
VIDEO: Turkey is building a wall along its border with Iran to prevent a new influx of refugees, mainly from Afghanistan as the Taliban take over the country.
For now, a 5km section is under construction but Turkey is aiming to build a 295km-long wall on its Iranian border pic.twitter.com/YJAZgUOEGa
— AFP News Agency (@AFP) August 17, 2021
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Turkey is expected to feel the shock first of the beginning refugee wave coming out of Afghanistan, given it’s already long been for years a jumping-off point for Afghans making the arduous trip to Europe. The past decade alone has seen some 600,000 Afghans settle in Turkey – all the while a mass wave of Syrian refugees exited there as well, many which are still along Turkey’s southern border (over 3 million).
Turkey is reportedly now constructing a nearly 300km wall along the Iranian border to physically block the exodus coming from central Asia, according to the AFP.
Turkey deploys soldiers to Iran border to stop possible Afghan migrant surge https://t.co/XWEwTAog06 #Iran #Turkey #Afghanistan
— Reza H. Akbari (@rezahakbari) August 18, 2021
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Ankara has also reportedly sent an emergency troop deployment to bolster its security force along the Iranian border in the far southeast.
Tyler Durden
Wed, 08/18/2021 – 22:30 - US Software Firm Accuses Huawei Of Installing "Back Door" To Spy On Pakistan
US Software Firm Accuses Huawei Of Installing “Back Door” To Spy On Pakistan
Authored by Frank Fang via The Epoch Times,
A U.S. software company is accusing Chinese tech giant Huawei of pressuring it to build a data “back door” into a government security project in Pakistan, according to a recent legal filing submitted at the Central District Court in California.
California-based Business Efficiency Solutions (BES), in a lawsuit filed on Aug. 11, also accused Huawei of stealing its trade secrets, while the software company worked as Huawei’s contractor to a safe-city project in Lahore, the capital of Pakistan’s Punjab province.
BES said in its lawsuit that Huawei used “one of BES’s software systems to establish a ‘backdoor’ from China into Pakistan that allowed Huawei to collect and view data important to Pakistan’s national security and other private, personal data on Pakistani citizens.”
The current legal dispute was born out of a partnership between the two firms starting in 2016. That year, Huawei and Punjab Safe Cities Authority (PSCA), a provincial government body, inked an agreement for the Chinese company to implement a high-tech surveillance system, including more than 8,000 cameras, in Lahore, according to Pakistani media.
At that time, Shehbaz Sharif, former chief minister of Punjab, said that the safe-city project would turn Lahore into crime-free city.
The system would be available to the Punjab Police Integrated Command, Control, and Communication Center (PPIC3) of Lahore.
Huawei has heavily promoted its surveillance technology worldwide, sometimes under its “Safe City” or “Smart City” solutions promising to make cities more secure. In 2019, U.S. Sens. Marco Rubio (R-Fla.) and Ron Wyden (D-Ore.) wrote a letter to then-Secretary of State Mike Pompeo, urging him to update U.S. travel advisories to warn Americans about traveling to countries with Huawei’s surveillance solutions.
“These technologies could expose their personal data to foreign governments, including potentially China,” the senators wrote.
In Pakistan, at least nine cities have signed up for Huawei’s Safe City systems since 2015. However, some cities including Islamabad had reported increased crime rates after adopting the systems.
The agreement between PSCA and Huawei was signed after a bidding process. According to the complaint, Huawei beat out competitors including Nokia and Motorola with a bid of $150 million.
The logo of Chinese telecom giant Huawei is pictured during the Web Summit in Lisbon on Nov. 6, 2019. (Patricia De Melo Moreira/AFP via Getty Images)
Additionally, BES stated in the filings that it was courted “aggressively” by Huawei to be the latter’s contractor because the Chinese firm “lacked the capacity to undertake such a technically advanced project on its own.”
BES said it created eight different software systems for the safe-city project, including a system to monitor buildings and another to monitor social media, the complaint said. Another system, formally called the data exchange system (DES), could collect data from different Pakistani government agencies, including customs, taxation, immigration, and registration.
In 2016, Huawei “threatened to terminate all agreements” with BES if the U.S. software company did not comply with its demand to have all eight systems tested in China.
“As of the filing of this complaint, Huawei-China has yet to return BES’s LLDs for the eight systems, or allow BES to uninstall any software, including the DES system, from Huawei’s facility in China,” the complaint said, referring to BES’s proprietary “low-level designs” (LLDs) for systems.
Low-level design is a general terminology used to describe the component-level design process, often involving designers and developers. In contrast, high-level design means the overall design architecture.
A year later, in 2017, Huawei allegedly demanded that BES install DES in Huawei’s laboratory in China—”this time not merely for testing purposes but with full access to data at the Lahore Safe City project.”
“We want to insure [sic] that PPIC3 has no objection in [the] transfer of this technology outside of PPIC3 for security reasons,” BES CEO and founder Javed Nawaz responded in an email, which is attached to the lawsuit, to Huawei officials.
“Please get an approval from PPIC3, in writing, prior to us performing this function.”
According to the complaint, Huawei initially said there was no need to get such approval while “threaten[ing] to withhold payments owed to BES.” Later, Huawei said it had received “approval from the Pakistani government,” BES alleged.
“In light of Huawei’s affirmative representations that they had the approval of the Pakistani government, the duplicate DES system was installed in China,” the complaint stated.
BES argued that PPIC3’s network could be compromised by Huawei.
“On information and belief, Huawei-China uses the proprietary DES system as a backdoor from China into Lahore to gain access, manipulate, and extract sensitive data important to Pakistan’s national security,” according to the complaint.
BES also alleged that Huawei “has used and will continue to use” the stolen trade secrets for other similar “Safe City” projects in at least seven other Pakistani cities, as well as those in other countries including Qatar, Dubai, the United Arab Emirates, and Saudi Arabia.
The U.S. software company is seeking damages and permanent injunctive relief against Huawei.
To bolster its claims, BES cited two U.S. court cases—both indictments against Huawei for trade secrets theft in 2019 and 2020—in its complaint.
Huawei, PSCA, BES, and BES’s attorneys did not respond to requests for comment. According to The Wall Street Journal, BES is not operating or generating revenue at the moment.
Tyler Durden
Wed, 08/18/2021 – 22:10 - China & Russia Poised For Cooperation In Afghan 'Reconstruction' Under Taliban
China & Russia Poised For Cooperation In Afghan ‘Reconstruction’ Under Taliban
Currently there’s an abundance of speculation over how China and Russia are poised to “step into the Afghan gap” – as one analyst in FT has put it. Already in July, less than a month before the ‘shockingly’ fast Taliban blitz across all provinces and into Kabul, the West was perhaps surprised to see a Taliban delegation received so warmly by China’s foreign minister Wang Yi in Tianjin.
It’s now expected that China could be among the first countries to formally recognize the Taliban government, with the latter currently claiming it’s newly “reformed” – the latest evidence of the hardline Islamist group’s old school brutality fully on display notwithstanding.
Via AP: Russia’s presidential envoy to Afghanistan, Zamir Kabulov with a Taliban delegation in 2019. As America’s military might and trillions of dollars sunk into the failed 20-year long “nation building” bloody conflict and occupation is in retreat, it’s expected that both China and Russia will cautiously bring their diplomatic and financial influence to bear to steer the central Asian country away from terrorism and toward “peaceable reconstruction”.
A new report in Financial Times presents a series of key insights on China and Russia’s possible next moves… “We hope that the Taliban of Afghanistan has united all events and is establishing a political framework that meets the nationwide circumstances of Afghanistan and lays a basis for long-lasting peace in Afghanistan,” Geng Shuang, China’s Deputy Permanent Representative to the United Nations was cited in FT as saying.
And a Chinese government advisor and professor at Lanzhou College Zhu Yongbiao, had this to say: “China has benefited from the irresponsible behavior of [the US] which has deeply undermined the worldwide picture of the US and the connection between Washington and its allies.” Indeed a quick look at the gleeful and mocking tone out of English language Chinese state-run media this week, particularly Global Times, confirms as much.
China, US, Russia share consensus in Afghanistan, but Washington ‘should correct its mistake to exchange cooperation’
https://t.co/wsbA4gJoAK pic.twitter.com/vkiYTI8Ubn— Lin Jing 林静 (@CGCHINA_CPT) August 17, 2021
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Wang Yi, China’s overseas minister, also issued this public message:
“The Afghan Taliban has the utmost sincerity to work towards and realize peace,” a Chinese language assertion that adopted the assembly mentioned. “The Afghan Taliban won’t ever permit any drive to make use of the Afghan territory to interact in acts detrimental to China. The Afghan Taliban believes that Afghanistan ought to develop pleasant relations with neighboring nations and the worldwide group.”
And this additionally from the Chinese Foreign Ministry earlier in the week: “The Afghan Taliban said on multiple occasions that it hopes to grow sound relations with China, looks forward to China’s participation in Afghanistan’s reconstruction and development and will never allow any force to use the Afghan territory to engage in acts detrimental to China.”
If you are going to criticise the Taliban, criticise them on our terms. Let’s start with its relationship with China – opening the doors to Chinese state-owned companies to exploit Afghanistan’s untouched rare-earths & calling the Uighur genocide an ‘internal matter for China’. pic.twitter.com/cZMN7gA1jX
— Muhammad Jalal (@jalalayn) August 18, 2021
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Furthermore, Moscow based political analyst Arkady Dubnov had this to say of the perspective from Russia:
“We are able to align our pursuits [with China] in opposing the US,” he mentioned. “What is sweet for us is unhealthy for Individuals, what’s unhealthy for us is sweet for Individuals. Immediately the state of affairs is unhealthy for Individuals and so it’s good for us.”
Already the past years have seen closer and closer China-Russia economic and military cooperation. With the US in retreat, Afghanistan apparently presents another front – albeit high risk – for Moscow and Beijing to find common cause.
Tyler Durden
Wed, 08/18/2021 – 21:50 - Texas Democrat Admits She Went To Portugal After Fleeing State
Texas Democrat Admits She Went To Portugal After Fleeing State
Authored by Zachary Stieber via The Epoch Times,
A Texas Democrat has confirmed she went to Portugal while colleagues were either trying to pass election reform bills or in Washington publicly opposing that effort.
Most Texas House Democrats fled the state last month to deny Republicans in the state’s lower chamber quorum. They did so to try to stop election reform bills from being passed.
Virtually all of the Democrats went to Washington, including state Rep. Jessica Gonzalez. But she later traveled to Portugal, she confirmed for the first time on Tuesday.
Gonzalez said she went overseas to get married.
“We all say family comes first. That value should apply to all families, including mine. I made the decision not to share where I was so that my wife and I could get married in privacy,” Gonzalez told the Dallas Morning News.
“I wanted us to have this special day, surrounded by a few of our friends and loved ones.”
Her wife, Angela Hale, is a registered lobbyist for Equality Texas, an organization that advocates for the LGBT.
Reports of Gonzalez and another Texas House Democrat, state Rep. Julie Johnson, going to Portugal emerged earlier this month, but neither lawmaker would confirm or deny the trip.
“No one has shown proof,” Gonzalez said at the time.
The offices of Gonzalez and Johnson did not pick up the phone on Wednesday or immediately return voicemails.
State Rep. Victoria Neave, another Democrat, also left Washington in early August to get married. It’s not clear where she went.
Texas House Democrats are still largely refusing to appear at the state Capitol in Austin, preventing Republicans from passing election reform bills.
The Texas Supreme Court on Tuesday ruled that the lawmakers can be arrested, clarifying an ongoing situation that has yet to be resolved.
“The Texas Constitution empowers the House to ‘compel the attendance of absent members’ and authorizes the House to do so ‘in such manner and under such penalties as [the] House may provide,’” the state’s highest court said.
“Neither the passage of time nor the passions of a hotly contested legislative dispute can change what it means.”
Tyler Durden
Wed, 08/18/2021 – 21:30 - Delta And Soaring Beef Prices Fry US Steakhouses
Delta And Soaring Beef Prices Fry US Steakhouses
Steakhouses are an iconic part of the American dining out culture, but the resurgence of the virus pandemic and soaring beef prices could diminish the appetite of steakhouse chains.
The $5 billion US premium steakhouse sector serves up $60 ribeyes and is usually frequented by business account-wielding executives, corporate events, and tourists in popular metro areas.
But as the Delta infections and deaths increase, businesses are delaying employees returning to the office, and travelers are canceling trips – threatening in-person dining at high-end steakhouses.
Reuters says, “steakhouses are especially vulnerable to the spread of the virus because their traditions – such as lengthy, indoor, three-course dinners – may scare off apprehensive customers.”
Besides the emergence of the virus pandemic scaring patrons from eating indoors, high-end steakhouses are also battling surging beef prices, with wholesale prices rising more than 40% in July than a year ago. It’s not just steak. All other sorts of wholesale prices for food essential for steakhouses have increased in the last year. Higher wholesale costs are particularly damaging to steakhouses because it erodes profit margins.
Restaurant chains like Ruth’s Chris Steak House are locking in beef prices because there’s a risk food inflation may worsen into 2022.
San Francisco-based reservation service OpenTable Inc. showed seated diners at steakhouses had doubled by midyear compared with January, mainly because infection cases waned as people felt more comfortable dining indoors with at least half the country vaccinated. Now there are risks seated diners at steakhouses could slump ahead of October, which is the starting point of the flu season in the US, when immune systems are usually weakened.
Malcolm Knapp, a research firm that tracks steakhouse data, said sales at high-end steakhouses peaked in early July and have fallen in the first week of August. If the trend continues, there’s a risk that sales could flatline or go negative in the coming months.
“We won’t get the lift we had expected before the magnitude of the Delta variant came through,” said Knapp.
New York City Open Table for the number of seated diners has slumped in the past 30 days.
Fleming’s Prime Steakhouse & Wine Bar has had to adapt to more carryout orders than ever before because people are still afraid to eat an entire three-course meal indoors. During the 2020 pandemic, carryout soared to 47% of sales. The figure is now around 8%.
Another famous steakhouse is Ruth’s Chris Steak House who closed some of its restaurants during the virus pandemic because they couldn’t instantly conform to a delivery and takeout model.
Ruth’s Chris has trimmed the fat and shrunk its corporate footprint, and added takeout this summer. Chief Executive Officer Cheryl Henry said the move had attracted new customers: “We started to see younger, more affluent guests trying Ruth’s for the first time through our takeout and delivery program.”
The emergence of the virus has companies scrambling to delay office reopenings and canceled travel plans. If the virus worsens ahead of the flu season, steakhouses across the US could be widely impacted. To survive, they will need to have a robust delivery and takeout model.
And making matters worse, soaring food inflation is crushing steakhouses’ margins which will ultimately be passed along to patrons.
Tyler Durden
Wed, 08/18/2021 – 21:10 - US Hemorrhaging Money From Entitlement Fraud & Waste
US Hemorrhaging Money From Entitlement Fraud & Waste
Commentary by Rep. James Comer via RealClearPolitics,
Under the Biden administration, the United States is on the path toward becoming a welfare state fully entrenched in waste, fraud, abuse, and mismanagement. President Biden plans to expand welfare to almost half of the country’s working adults through the deceptively named American Families Plan. If passed, it will allow the federal government to meddle in Americans’ everyday lives from birth to death. Meanwhile, every year, entitlement programs are spending tens of billions of taxpayer dollars improperly—either through inaccuracies, incompetence, or fraud.
Government is already too big with too much waste. Current entitlement programs are rife with abuse. Their size and lack of guardrails to protect taxpayer dollars open the door for bad actors to take advantage of the system. But rather than acknowledging and addressing these issues, the Biden administration wants to dramatically expand the welfare state, which will undoubtedly result in even more waste, fraud, and abuse.
Since 2003, when agencies were required to report these payments, the Government Accountability Office estimates $1.9 trillion in improper payments have been made. But that might just be the tip of the iceberg because the GAO maintains it is unable to “determine the full extent to which improper payments occur.”
In fiscal year 2020, more than 21% of Medicaid’s federal program spending was the result of improper spending, which means one-fifth of taxpayer dollars, intended to help roughly 77 million low-income and medically needy individuals, has been lost without helping those Americans. Medicare was similarly disastrous, with $43 billion in improper payments—money that should have helped provide health care for the 63 million elderly and disabled currently receiving Medicare benefits.
Outside of Medicare and Medicaid, three other significant sources of improper payments are for the earned income tax credit, unemployment insurance, and supplemental security income. Almost a quarter of the payments made for the earned income tax credit in FY2020 were improper—this amounted to $16 billion. Of the benefits paid by the Department of Labor for the unemployment insurance program, 10% were improper payments, which accounted for $8 billion. The Social Security Administration similarly spent almost 10% of the Supplemental Security Income funds on improper payments during FY2020—amounting to $5.3 billion.
The federal government wasted tens of billions in improper payments last fiscal year alone—and that does not include any improper payments related to COVID-19 relief programs. We already know substantial fraud occurred within pandemic unemployment benefit programs. It’s simply a matter of time before we know how severe the damage was in improper payments.
Congress is responsible for government oversight, and it is urgent we address these abuses now. The American people pay for these entitlement programs, believing the money will be there if they are ever in need of it, but with so many improper payments wasting away taxpayer dollars, that belief may be misguided.
Toward that end, I’ve called on the Centers for Medicare and Medicaid Services to provide a breakdown of all state specific Medicaid improper payments from 2015 to 2020. This will provide a better picture of the types and amounts of improper payments. These details will help us eliminate incentives for fraud and reduce waste.
No matter what the data says, however, one thing is crystal clear: We can’t fix the social safety net by making it bigger and expanding the government’s reach. That’s like taking a leaky bucket and adding more water to it thinking the hole will fix itself. It’s unrealistic and irresponsible. Sadly, that’s President Biden’s plan.
He is planning to expand existing entitlement programs and create new ones. He is doing so knowing the federal government is incapable of tracking the waste in existing programs, opening the door for more abuse. Why? Because he and the Democrats are anxious to reshape America. To make Americans dependent on the government rather than encourage self-reliance and promote the American dream.
But if the president continues down this path, America will deteriorate into a socialist welfare state, constantly on the edge of fiscal collapse and where the American dream will no longer be a reality. Republicans stand ready to stop the rise of the socialist state, and while we wage that battle, we must simultaneously fix the massive flaws in our existing welfare system. If we fail or the administration stops us, American families will pay the price.
Tyler Durden
Wed, 08/18/2021 – 20:50 - Macau Casino Stocks Plunge To Five Year Low Amid COVID Travel Restrictions
Macau Casino Stocks Plunge To Five Year Low Amid COVID Travel Restrictions
Travel restrictions across mainland China following the latest COVID-19 outbreak have likely dented Macau’s gross gaming revenues (GGR) in August.
According to brokerage Bernstein, daily GGR plunged from an average of $16 million from Aug. 1-8 to $10 million over the past seven days, the lowest daily figure since September 2020.
Even though Macau, an autonomous region on the south coast of China, known for giant casinos, is reopened, visitation to the popular destination area from 6 to 12 August was 78% lower than in July.
The estimated GGR for the first 15 days of August combined is 87% lower than August 2019 and 62% below July 2021 at $193 million.
Bernstein analysts Vitaly Umansky, Louis Li and Kelsey Zhu, told clients in a note on Monday that “travel ability and demand worsened over the past week due to the COVID contagion.”
“Macau now has 14-day mandatory quarantine or ‘health management’ on travelers from districts in more than 30 cities of 11 provinces in China (but seven cities of four provinces were removed from the list over the past week). “The current COVID situation in China will last at least a month with disrupted travel to Macau.”
Both analysts expect August GGR to print 80% below August 2019 and 50% below July 2021. They expect visitations to casinos in the coming months to remain soft due to the emergence of the virus.
Macau’s casino stocks have plunged to a 5-year low on the prospects of declining GGR in August.
Source: Bloomberg “The whole environment looks unfavorable for Macau and other travel-related industries,” said Bloomberg Intelligence analyst Angela Hanlee.
A separate report by Dutch bank ING outlines a growing concern of slower economic growth for China in August and beyond.
“Strict social distancing measures also limit people flows around the Mainland, which limits domestic leisure travel and spending during the summer holidays.”
The critical understanding is the emergence of the virus is slowing the global economy once more. China is doing everything in its power, especially cutting rates, to prop up a sagging economy.
Tyler Durden
Wed, 08/18/2021 – 20:30 - Los Angeles County Sheriff Again Calls For State Of Emergency To Address Homelessness
Los Angeles County Sheriff Again Calls For State Of Emergency To Address Homelessness
Authored by Micaela Ricaforte via The Epoch Times,
Los Angeles County Sheriff Alex Villanueva has again called for the county to declare a local state of emergency to address homelessness.
Villanueva held a public community meeting in Granada Hills on Aug. 12, where he and others from the department’s Homeless Outreach and Mental Evaluation teams and the Narcotics Bureau spoke about homelessness and public safety.
Currently, there are more than 66,000 unhoused people in Los Angeles County, according to the Los Angeles Homeless Services Authority (LAHSA) in 2020. LAHSA recorded a 12.7 percent increase in homeless numbers in 2020.
Some say that the solution to homelessness in the county is to enforce regulation of public space; to others, the solution is to provide resources and temporary or permanent housing.
Los Angeles Sheriff’s Department deputies walk along the boardwalk in Venice Beach, Calif., on June 8, 2021. (John Fredricks/The Epoch Times)
Villanueva said during the meeting that it is the responsibility of the government to regulate public space.
“What we’re learning is that our political institutions are responsible for the homeless crisis as we see it today,” Villanueva said.
Villanueva said he identified Gov. Gavin Newsom, Mayor Eric Garcetti, the Los Angeles City Council, and the five members of the Los Angeles Board of Supervisors as “architects of failure.”
Earlier this month, the Los Angeles city council voted 13-2 to ban homeless encampments in public areas after a lack of regulation caused an outcry among residents who said they saw an increase in trash, pollution, and violence, particularly in Venice Beach. Councilmembers Mike Bonin and Nithya Raman, the two dissenting votes, argued that the approach to homelessness should be centered on providing resources and housing rather than regulation.
Villanueva, however, denounced the idea of “permanent housing” as a solution to homelessness.
“The only thing you’re doing when you declare we’re going to house the unhoused with permanent housing is two things—one, enabling dependency, and two, normalizing deviancy,” he said.
Skid Row in Los Angeles, Calif., on June 9, 2021. (John Fredricks/The Epoch Times)
Since the governor is responsible for the California Department of Transportation (CalTrans) and the California Highway Patrol (CPH), Villanueva said, the encampments surrounding the freeway must be a result of the governor’s instructions to those institutions.
“The two bodies singularly responsible for addressing homeless encampments on the freeways, they’re under [Newsom’s] control,” Villanueva said.
“So what direction do you think he gave them? ‘Don’t do anything, don’t touch them, you don’t want to offend anybody, we want to pat ourselves on the back for how woke we are and definitely don’t want to do anything to defend their sensibilities.’ Meanwhile, you pay the price for that.”
On June 10, the Venice Family Clinic, along with several other organizations including Grass Roots Neighbors and Venice Justice Committee, released a statement criticizing Villanueva for his call to “clean up” encampments on the Venice Boardwalk by July 4.
“Time and time again, this approach has proven to fail in Los Angeles, and cause harm to people already dealing with crisis, trauma, and the extreme lack of affordable housing across our region and especially on the Westside,” the statement reads.
“Everyone can see the housing and humanitarian crisis in our neighborhood and in our region…it is the result of decades of disinvestment in affordable housing and other critical resources, systemic racism in land use policies, housing, employment and mass incarceration policies, and growing income and wealth inequality.
“Not one politician, one law enforcement official, one non-profit, one neighborhood group is going to suddenly have the ability to solve this crisis.
“We actually can share the space, be kind to unhoused neighbors, continue the local outreach and street medicine efforts that support people until they are housed, and put more resources into permanent housing solutions for folks on our streets.”
Michelle Stuffmann of Venice Family Clinic and the Los Angeles County Sheriff’s Department did not respond to a request to comment by press deadline.
Tyler Durden
Wed, 08/18/2021 – 20:10 - President Xi Calls For "Redistribution Of Wealth" To Help "Expand The Middle Class"
President Xi Calls For “Redistribution Of Wealth” To Help “Expand The Middle Class”
Since ascending to the position of most powerful man in China back in 2012, President Xi Jinping has demanded that Communist Party members and non-members alike study the Communist Manifesto and other Marxist texts. Now, he’s reintroducing some good ol’ fashioned communism into his ruling policies. On Tuesday, Chinese media reported that President Xi had put the country’s wealthiest citizens “on notice” that he was planning some redistributive policies to aid in the “common prosperity”. These policies will include income “regulation and redistribution”, according to Xinhua.
During a Tuesday meeting of the Communist Party’s Central Committee for Financial and Economic Affairs, President Xi and others detailed new strategies to target the upper echelons of Chinese society. Officials vowed to “strengthen the regulation and adjustment of high income, protect legal income, reasonably adjust excessive income, and encourage high-income groups and enterprises to give back to society more,” according to a summary of the meeting published by Xinhua, one of the biggest newswire services based in.
According to Reuters, a readout from the meeting suggests President Xi wants to “restrain ‘unreasonable income’, hike wages and expand the middle class.”
At the same time, officials also pledged to expand the size of China’s middle-income group, grow the earnings for low-income group and prohibit illicit income to promote social fairness and justice. Finally, they also reaffirmed Deng Xiaoping’s famous words: to “let some people get rich first,” because allowing this to happen will help foster conditions for others to grow wealthy as well.
Like in the US, the pandemic saw wealth inequality expand in China. And right now, the wealthiest 1% of Chinese people now hold 31% of the country’s wealth, up from 21% two decades ago, according to a report from Credit Suisse.
As Beijing struggles to stamp out the country’s most broad-based COVID outbreak since the original outbreak in Wuhan, China’s leadership pledged to create conditions for people to “enhance their education and move up the income ladder.” They also called for promoting the equal access to public services by improving housing supply, care for the elderly and enhancing the medical system. The leadership also highlighted the need to curb financial risks.
Interestingly, the government singled out the eastern province of Zhejiang, home to Alibaba and known for its robust private sector, as a pilot zone for the new initiatives. The decision comes after the province released new targets for disposable income growth that would see the per capita rate raised by 45% within 5 years. It’s just the latest sign that Alibaba’s troubles may not be over.
As one Indian TV station noted in its coverage of Xi’s remarks, income inequality in China remains wide – the richest 20% earn more than 10 times poorest 20% — and hasn’t budged since 2015.
The TV station also noted that Beijing has already started terrorizing many of the country’s wealthiest men, including Alibaba founder Jack Ma, during its crackdown on China’s largest tech companies. China’s crackdown on tech companies has hammered shares of US-traded Chinese firms, and recently led the head of the SEC to issue a warning to American shareholders to approach investing in Chinese stocks with caution because of the shady structure underpinning the shares. Investors in Chinese firms own shares in a shell company based in the Caymans, not the firm itself.
After China’s unique brand of state-directed Communism helped drive robust growth using, among other tools, an explosion of debt, President Xi has decided that it’s time that the wealthy chip in more to the general trust. After all, with new resources to exploit in Afghanistan and a potential invasion of Taiwan on the horizon, the CCP is probably going to need the money.
Reuters also pointed out that recently, President Xi has mostly succeeded at making Chinese investors less rich, by wiping more than $1 trillion off the value of US-listed Chinese stocks since February (and China’s domestic markets have also experienced some turbulence as of late).
And his latest words caused even more market turbulence, as European-traded luxury brands including LVHM, Burberry, Kering, Hermes, Richemont and others took a hit.
“This is a rather nervous market reaction to leadership statements in China about the ‘third wealth redistribution,'” Bernstein analyst Luca Solca says in an email. “I am not sure there is necessarily a lot to fear from that,” he adds. “Time will tell.”
Whether he can actually succeed in driving up disposable incomes will be much trickier.
Tyler Durden
Wed, 08/18/2021 – 19:50 - Here Comes Stagflation: Goldman Slashes GDP Estimate For Second Time In 3 Weeks, Sees "Bigger Inflation Surge"
Here Comes Stagflation: Goldman Slashes GDP Estimate For Second Time In 3 Weeks, Sees “Bigger Inflation Surge”
It was good while it lasted, but the party is well and truly ending.
Just three weeks ago, Goldman Sachs – which last year was the first bank to unveil materially above consensus GDP projections – cut its 2021 second half consumption growth forecast, resulting in 1% downgrade to its GDP growth forecasts for Q3 and Q4 to +8.5% and +5.0%, respectively, “as it is becoming apparent that the service sector recovery in the US is unlikely to be as robust” as the bank had expected. Which is odd considering the trillions in monetary and fiscal stimulus that have entered into the economy. One wonder how many more trillions would be needed for Goldman to be happy.
But while Goldman’s expected 2021 slowdown was manageable, it got far worse in 2022, when the sluggishness is expected to truly hammer the growth rate, which Goldman now expected to shrink to a trend-like 1.5% – 2% by the second half of 2022, a far “sharper deceleration than consensus expects.”
In retrospect, the bad news was just starting.
As frequent readers recall, just yesterday we pointed out that US economic growth “suddenly collapsed” as the latest dismal retail sales print showed, validating the latest BofA Fund Manager Survey which saw a collapse in expectations for everything from growth, to profits and inflation.
In response, Bank of America’s chief economist Michelle Meyer wrotes that “after adjusting for higher prices (PCE deflator of 4.4% qoq saar), the softening in nominal spending leads us to track only 1.5% qoq saar for real consumer spending in 3Q. This follows 2Q real consumption tracking of 12.3%.” Plugging that number into the bigger GDP model, and BofA now finds that “the economy is running at a slower pace in 3Q,” and currently tracking just 4.5% following the retail sales report, down from the bank’s official forecast of 7% qoq saa, which is about to come down significantly.
Just hours later, Goldman strategist Chris Hussey chimed in with a preview of what was coming writing that “the combination of lower-than-expected retail sales and auto production in July, and given an increasingly likely drag on services consumption from the Delta variant, our economists are will likely revise our second-half growth assumptions even as we still do not expect material economic impact from the Delta variant in the US amidst abundant vaccine supply and relatively permissive COVID policies.”
Well, he was right, and moments ago – for the second time in under a month – Goldman has slashed its Q3 GDP forecast to just 5.5% from 8.5% as of late July (and 9.5% previously), as Goldman’s chief economist now warns that “the impact of the Delta variant on growth and inflation is proving to be somewhat larger than we expected.”
We have lowered our Q3 GDP forecast to +5.5%, reflecting hits to both consumer spending and production. Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief. Production is still suffering from supply chain disruptions, especially in the auto industry, and this is likely to mean less inventory rebuild in Q3.
The bank’s revised forecast also trims its full year 2021 GDP forecast to below consensus 6% (vs. 6.4% previously and 6.2% consensus) and leads to 2022 growth of 4.5%, a number which at this rate will soon be slashed to 0 or negative.
Here are some more details from Goldman behind the sharp cut to GDP, which it blames on – what else – the convenient Delta variant, and not t – say – that US consumers were once again tapped out, and with no more stimmy cash and savings all spent, was instead borrowing literally record amounts on their credit cards.
Anyway, here is how Goldman feeds the “but Delta” fiction:
The Delta variant is weighing on both consumer spending and production in Q3.
On the consumption side, we cut our 2021H2 forecast slightly last month, anticipating that renewed virus spread would delay a full recovery of the office-adjacent economy and the most virus-sensitive services, such as entertainment events. But the decline in retail sales in July and the drop-off in our consumer spending tracker through early August, shown in Exhibit 1, suggest a larger slowdown in spending than we expected.
Forward-looking indicators also point to a further pullback in services spending. OpenTable data show a roughly 7% decline in restaurant reservations since the end of July, travel companies report an increase in cancellations and a modest decline in bookings, and press reports note that some hospitals are again delaying elective surgeries to clear capacity for Covid patients.
Goldman also decided to blame supply-chain bottlenecks – the same bottlenecks that were patently obvious last month yet when countless penguins, like Goldman, expected them to be “transitory.” Well, they aren’t looking so transitory now, eh?
On the production side, the Delta variant is prolonging supply chain disruptions and delaying a full rebound of factory activity. Production holdups in Q2 led to a larger-than-expected inventory drawdown and widening of the trade deficit as US producers struggled to meet strong consumer demand. This accounted for much of the eventual disappointment on Q2 GDP growth, but a rebound in production and the rebuild of depleted inventories—especially at automakers—appeared likely to boost Q3 growth.
Unfortunately, that expectation has proven premature. Earlier this month we highlighted the risk of global supply chain spillovers from the impact of the Delta variant in the Asia Pacific region, where new Covid restrictions are much more stringent than in the US. Since then more setbacks have emerged, including problems for semiconductor producers in Malaysia and a major port closure in China.
Our autos analysts note that automakers now expect that the disruption from the semiconductor supply shortage to global auto production will be nearly as large in Q3 as in Q2 and that supply will not increase until late Q3 or Q4. As Exhibit 2 shows, initial US auto production schedules for Q3 have proven much too optimistic. We have therefore cut our Q3 inventory accumulation forecast from $82bn to $32bn, though the turnaround from the sharp inventory drawdown in Q2 is still worth 4pp for Q3 GDP growth.
If that was the extent of it, we would probably not even bother with this note: after all it’s just another example of Goldman just being wrong and failing to actually observe what is going on in the economy (something we described in detail in ““A Sudden Negative Change In The Economy”: Consumer Spending Slides As Majority Now Expect A New Slowdown“).
But sadly it gets worse. So much so that Goldman’s note is not so much about the bank’s latest me culpa on its GDP forecast (it will be slashed many more times in the coming months, that much we can guarantee) but that it was the first overt admission from Goldman that the US is heading for stagflation, because while Goldman is busy cutting its GDP forecast, it was also hiking its surging inflation forecast… and to those who don’t know what stagflation is, now is a good time to look it up. Here again is Kostin:
A Bigger Inflation Surge in 2021: The impact of the Delta variant on supply chains is also likely to push prices even higher in the short run on some of the durable goods categories that have contributed to the inflation surge this year.
The left side of Exhibit 4 shows that, as a result of ongoing auto production problems, new car inventories are likely to fall to around 1 million, down more than 70% from pre-pandemic levels. This has led to much larger increases in new car prices in recent months than seen in many years. Our auto sector analysts expect further price increases over the next few months and then a partial return of promotional pricing at year-end as production normalizes, and we have revised our forecast accordingly.
Other durable goods that are downstream from the semiconductor shortage—such as consumer electronics and household appliances, shown in Exhibit 5—have also seen much higher than usual inflation this year, reflecting both supply constraints and strong demand. Our sector analysts expect that many consumer electronics companies will announce price increases in the upcoming earnings season and that most major household appliance producers will also raise prices significantly further this year. We have therefore bumped up our forecasts for these categories too.
But while one can, in theory, get away without spending on appliances, cars and video products, one has to eat. And sadly here the inflation is about to surge even higher.
We also raised our short-term expectations for food services inflation. In June we noted that higher wage growth for low-paid workers should flow through to higher consumer prices in sectors such as restaurants that rely heavily on low-paid labor. That has happened to an even greater extent than we anticipated in the last two CPI prints, and there is probably still a couple months of upward pressure left in the pipeline before the end of federal unemployment benefits cools wage and price pressures.
The punchline: “We now expect year-on-year core PCE inflation to reach 3.75% at the end of 2021.“
So putting it all together: a drop in GDP + “a bigger surge in inflation” = stagflation. We said as much in May “This Is All About Stagflation… The U.S. Is Walking Into The Early Stages Of The Fourth Turning” and we are surprised it only took Goldman 3 months to catch up.
Tyler Durden
Wed, 08/18/2021 – 19:35 - China's Bad Debt Giant Reports Record 103 Billion Yuan Loss, Gets State Bailout
China’s Bad Debt Giant Reports Record 103 Billion Yuan Loss, Gets State Bailout
The dread and uncertainty over the fate of China’s largest legacy bad bank, Huarong Group, is over and the outcome is as most had expected: another state bailout.
This morning, after a four-month saga that had sparked speculation over the fate of the nation’s largest bad bank and roiled Asian credit markets, China Huarong Asset Management revealed a record loss for last year and also said said the badly undercapitalized conglomerate would issue new shares to a consortium of strategic investors led by Citic Group, which is owned by the Chinese government and which has $1.25 trillion of assets with stakes in firms including China Citic Bank Corp. and Citic Securities.
Earlier in the day, Bloomberg reported that Huarong would receive about 50 billion yuan ($7.7 billion) of fresh capital as part of an overhaul plan that would shift control of the embattled company to state-owned conglomerate Citic Group. The number is roughly half of the $15 billion number thrown around back in April.
Huarong said a group of state-owned investors including Citic, China Insurance Investment and China Life Asset Management will “replenish” the capital (an “investment” sounds so much better than a “bail out” especially in China which has been posturing so hard that it will be far more selective which companies it rescues and/or nationalizes) of the troubled firm by buying new shares, according to a filing to the Hong Kong stock exchange. In separate statements, Huarong reported a giant loss of 102.9 billion yuan ($15.9 billion) for 2020 after initially delaying its results, and said the board will approve the results for last year as well as interim 2021 results on Aug. 28.
Rumors of the bailout helped push Huarong bond higher by 6 points to 92 cents on the dollar earlier today, the highest level since April. We expect more upside tomorrow when markets digest the news.
The bailout marks the government’s first major attempt to resolve a crisis at Huarong that has roiled the world’s second-largest credit market since April. The financial giant’s plight has become the biggest test in decades of Chinese authorities’ willingness to support troubled state-owned borrowers amid a record wave of defaults.
As Bloomberg adds, existing Huarong shareholders will likely see the value of their stakes plunge as the company recognizes losses on non-performing assets. This would include the likes of Warburg Pincus and Goldman Sachs, which were among a group of investors that bought a $2.4 billion stake in Huarong before it went public in 2015.
Ahead of the news, concerns have been swirling among investors over Huarong’s financial health and the lack of clarity on government support after the long delay in earnings. As Bloomberg notes, Beijing’s silence over the future of a company that’s majority owned by the Finance Ministry has stoked debate over whether state-backed firms are no longer granted immunity from market forces as President Xi Jinping has revived an old campaign to reduce leverage in the financial system. Persistent concerns about Huarong’s fate had led to recurring selling in China’s bond market, and were one of the reasons why bonds of Evergrande are now trading at all time lows.
While missed payments at state-owned Chinese companies have become more common in recent years, none of the defaulters have been as systemically important as Huarong. In addition to its close link to China’s central government and complex web of connections to other financial institutions, Huarong is also one of the country’s biggest issuers of offshore bonds that sit in portfolios from Hong Kong to London and New York.
Huarong has so far repaid all its bonds on time and said last month it would redeem a $500 million perpetual note in September, helping to boost market confidence. The company has also reached agreements with state-owned banks to ensure it can meet obligations through at least the end of August, Bloomberg reported in May. Citic faces $4 billion in maturing bonds this year which the new capital should be sufficient to cover.
Despite the euphoric burst higher earlier in the day, the implications for Huarong bondholders are less straightforward. While the capital injection would help shore up Huarong’s balance sheet, the stake transfer to Citic would leave the company one step removed from government control — a change that may unnerve some creditors Bloomberg notes. Huarong plans to continue honoring local and offshore debt obligations, but its ability to do so over the longer term will depend on how much cash it can raise from asset disposals. Huarong aims to raise about 50 billion yuan from asset sales.
Tyler Durden
Wed, 08/18/2021 – 19:10 - Larry Elder Vows To Reverse Vaccine, Mask Mandates If He Replaces Newsom As California Governor
Larry Elder Vows To Reverse Vaccine, Mask Mandates If He Replaces Newsom As California Governor
Authored by Zachary Stieber via The Epoch Times,
California gubernatorial candidate Larry Elder is vowing to reverse any COVID-19 vaccine and mask mandates Gov. Gavin Newsom has put in place if he’s chosen to replace the Democrat.
Elder told reporters on Aug. 13 that he saw the possibility of fresh mandates being issued by Newsom and other officials in California.
“If I become governor, when I become governor, assuming there are mandates for masks and statewide mandates for vaccines, they will be suspended right away. This is America. We have freedom in America. Virtually anyone in California who wants to be vaccinated can do so,” Elder said during a press conference, local media reported.
Newsom, in his first term, is facing a recall election.
Voters are slated to head to the polls on Sept. 14. Some have already received mail-in ballots.
Voters can choose to recall Newsom. If they do, they’ll also select who would replace him.
Elder, an EpochTV host, is the leading GOP candidate in the recall race, according to several polls.
Newsom last week ordered teachers and other school employees to either get a COVID-19 vaccine or get tested regularly for COVID-19, several weeks after he issued a similar order for state and health care workers.
Elder said he believes vaccines work and that he’s gotten a shot, but has throughout the campaign emphasized his belief that freedom is important.
Former San Diego Mayor Kevin Faulconer (C) greets a supporter after a news conference in the San Pedro section of Los Angeles on Feb. 2, 2021. (Jae C. Hong/AP Photo)
Other Republican candidates also oppose mandates.
Businessman John Cox said after the latest one was imposed that the governor is a “power-hungry politician who wants to control every aspect of people’s lives.”
“Gavin Newsom was the slowest governor to make the vaccine available and is now the quickest to make it mandatory. This mix of incompetence and overreach is the hallmark of California government. As governor, I would immediately end the State of Emergency and reverse Newsom’s outrageous mandates. State control will give way to liberty and citizen service,” state Rep. Kevin Kiley said in a statement.
Kevin Faulconer, the former San Diego mayor, said last month that Los Angeles County officials shouldn’t have reinstated an indoor mask mandate.
“Vaccinated individuals don’t need to wear masks, medical experts have made that clear. We need to be reopening our state, not reimposing unnecessary restrictions. If Gavin Newsom had any common sense, he’d step up and oppose this, that’s what I’ll do as governor,” he wrote at the time.
Newsom responded last week to Elder’s pledge during a recent press conference.
“Day one, he proudly states, as do all the other Republican candidates, day one, they proudly state, day one, that they would eliminate any mask requirements in our public schools to keep our kids safe and healthy and in-person to get the social, emotional support they deserve. Day one he would repeal that as he would repeal any requirement for vaccine verifications, including [for] health care workers,” he told reporters.
“The stakes are profound,” he said, urging Democrats to make sure to vote in the recall election.
Tyler Durden
Wed, 08/18/2021 – 18:50
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