Mar 19

Today’s News 19th March 2021

  • Mapping The World's Youngest And Oldest Countries
    Mapping The World’s Youngest And Oldest Countries

    Country age demographics are determined by two key factors: fertility and mortality.

    Throughout history, it was typical to see both birth and death rates at higher levels. But today, as Visual Capitalist’s Avery Koop details below, in most parts of the world, women are having fewer children, and innovations in healthcare and technology mean we are all living longer. The average person today lives to 72.6 years old, while the rate of births per woman has fallen to 2.5.

    These trends have drastically altered the demographics of mature economies, resulting in a much older population. In many developing countries, however, births still outweigh deaths, resulting in populations that skew younger.

    This visualization uses data from the World Bank to examine the countries with the highest shares of old and young people.

    The Fountain of Youth

    By 2030, the United Nations estimates there will be 1.3 billion people on the planet between the ages of 15-24. Proving to be a fountain of youth globally, the continent of Africa boasts the top 10 countries with the largest shares of young people in the world.

    Somalia, Zambia, and the DRC are just a few to crack the top 10 list. The youngest country in the world is Niger, where almost 50% of the population is below the age of 15.

    Here’s a full list of global countries, sorted by percentage of population under 15 years old:

    Young countries have significant opportunities ahead of them. A younger population means a larger upcoming workforce and more opportunities for innovation and economic growth.

    While domestic markets in Africa grow in terms of labor supply, innovation, and potential consumers, there are also challenges that arise in these countries. Corruption, political instability and unemployment, particularly in Africa, are all potential barriers to prosperity for the continent’s Gen Z population.

    Populations Skewing Older

    The world’s oldest country is Japan, where 28% of the population is older than 65. However, it’s an anomaly – the rest of the oldest countries in the top 10 are all in Europe.

    Globally, it’s the 65+ age group that is growing the fastest. According to the same UN estimates, it is predicted that by 2050 that one in six people will be over 65 years old.

    Here’s a full list of global countries, sorted by percentage of population over 65 years old:

    Fewer births, and a resulting older population, is a trend attributed to the changing lifestyles of women. For example, Japan’s fertility rate has fallen to less than 1.5 children per woman due to modern access to contraceptives and the prioritization of work over marriage and family life.

    However, fewer young people also means a smaller workforce on the horizon and a shrinking domestic market. There is also a rising social cost of caring for the elderly, as longer lifespans have resulted in a higher prevalence of chronic diseases and an increasing inability to care for oneself. This can result in an increased tax burden on the diminishing younger, working population.

    Another Perspective on the Data

    Looking at the data from the opposite angle also reveals information about our world. Here’s a look at the countries with the lowest proportions of younger or older people.

    Hong Kong and Singapore have some of the lowest fertility rates in the world (1.1), so it’s no surprise to see low numbers of children in their demographic data.

    In a country like the United Arab Emirates, the majority of the population is made up of foreign workers, so the number of people in the 65+ age group is extremely low. In the coming decades though, the situation is expected to shift dramatically with one in every five Emiratis residing that age group by 2050.

    The Big Picture

    While each country has its own unique demographic make up, one thing is clear. As education and wealth levels rise around the world, fertility rates are dropping almost everywhere.

    The trend of long life expectancies and fewer births is likely to continue, but young outliers will remain and they present immense economic potential.

    Tyler Durden
    Fri, 03/19/2021 – 02:45

  • Is Turkey Pursuing Nuclear Weapons Or Not?
    Is Turkey Pursuing Nuclear Weapons Or Not?

    Authored by ThomasSt exclusively for SouthFront,

    It is very likely that some analysts will answer in the negative to the above question.

    Their negative answer is mainly based on the following:

    1. Turkey is a NATO member, and there are 50 US B-61 nuclear bombs stored on its territory, at Incirlik Air Base.

    2. Turkey is a party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and has ratified the Treaty on the Complete Prohibition of Nuclear Testing.

    Photo Source: fas.org

    However, Turkish President Recep Tayyip Erdogan is “very close” to nuclear Pakistan, which likes to share nuclear technology. Turkish environmentalists also point to the paradox that Erdogan’s nuclear program is wasteful and largely unnecessary.

    At the same time, there are four very important indications, which may lead us to the conclusion that Turkey is advancing day and night its ultimate goal of becoming a nuclear power. These are:

    President Erdogan openly says he wants the bomb.

    In the autumn of 2019, Turkey complained to the UN General Assembly that the NPT prohibits countries like Turkey from developing nuclear weapons, but is unaware that other states have. He went on to say that nuclear weapons are a huge source of strength for Israel.

    Earlier, he told members of the Justice and Development Party that “some countries have nuclear warheads, not one or two, but they tell us we can’t have them. I cannot accept that.”

    Turkey’s Nuclear Energy Program does not make its energy independent.

    Under the plan, along the Turkish Mediterranean coast, the Russians are building four large civilian nuclear reactors at the Akkuyu nuclear facility. Erdogan hopes the Russians will complete the first reactor by 2023, in time for the centennial celebration of modern Turkey foundation. Ankara says it needs nuclear energy to reduce its dependence on gas imports from unreliable partners – Russia and Iran – and to meet electricity demand. This demand has grown at the highest rate of all OECD countries since 2005.

    The following is an indication of Turkey’s energy demand:

    • Turkey’s daily electricity consumption rose 16% to record 908,395 megawatt-hours (MWh) in early July, according to official data from the Turkish Electricity Transmission Company (TEIAŞ).

    • The majority of production came from natural gas units at 216,331 MWh. Hydroelectric power stations and imported coal followed with 199,943 MWh and 188,980 MWh, respectively.

    • President Recep Tayyip Erdogan said Turkey has nearly tripled its installed capacity from about 31,000 MW to more than 91,000 MW by 2020.

    • The country has an annual increase in installed capacity of more than 6% among the OECD countries.

    • Turkey ranks first among all OECD countries with this increase in production capacity, according to Energy and Natural Resources Minister Fatih Dönmez.

    • In the first five months of 2020, Turkey increased electricity production from domestic and renewable sources to 66%. The country ranks second in Europe in the production of electricity based on renewable resources.

    Launch of construction of the third block of Akkuyu. Photo Source: Sputnik

    Nevertheless, the Akkuyu nuclear plant does not make Turkey any less dependent on external powers. Russia will own and operate the facility and, in fact, the Akkuyu plant is not a so good investment.

    While ROSATOM, Russia’s state-owned nuclear power plant, “pays the bill” for the first reactor, it will not do the same for the other three Akkuyu reactors. Despite many years of searching for private investors, no one was found for this project. To complete Akkuyu, the Turkish government will have to finance it through foreign investment which are constantly decreasing or through public debt.

    If President Erdogan had seen the energy market, he would have known that gas and renewable energy were hitting nuclear power. Even before the COVID-19 pandemic, Turkey imported gas for a fragment of the price of electricity of the Akkuyu plant – an unprofitable price of 12.35 cents per kilowatt hour.

    But Erdogan wants both. He also wants the natural gas, which he is trying to steal from Cyprus-Greece-Libya with the well-known accusations and completely illegal actions, such as the completely non-existent Turkish-Libyan pact, but also the foolish things he guesses in relation to International Law, that islands do not have an Exclusive Economic Zone (EEZ). He also wants nuclear weapons, since an objective observer must wonder why the country’s poor economies did not weaken Erdogan’s nuclear ambitions.

    Acquiring more gas will allow Turkey to meet its electricity demand today, as it stands, 10% of Turkish electricity comes from solar and wind energy sources. One of Turkey’s leading universities recently stated that these sources could cover 30% of Turkey’s electricity demand by 2026, given the appropriate investment.

    The coverage of nuclear energy for the acquisition of nuclear weapons.

    What is particularly worrying is that Turkey could use nuclear energy as a cover for the supply of technology and material related to the construction of nuclear weapons. The transfer of technology is already taking place.

    Since the Akkuyu project began, Turkish engineering students have become the second largest national nuclear science team in Russia. Let’s see something similar. As Russia builds an Iranian civilian power plant in Bushehr, side deals have led to the transfer of equipment and the exchange of scientists who helped Iran acquire its nuclear weapons program.

    Many experts argue that the case of Turkey is not the same as that of Iran, as the former has signed an additional protocol agreement with the International Atomic Energy Agency, opening the country to closer inspections than Iran to prevent military nuclear of fissile materials into weapons.

    However, we must point out that fuel is not the only problem, as UN inspectors cannot go into detail about “monitoring intangible technology and dual-use transport” that is critical to the development of nuclear weapons.

    Close cooperation between Turkey and Pakistan.

    Erdogan is militarily cooperating with a nuclear-armed Pakistan, a country not close to the Turkish border. For decades, Turkish-Pakistani relations have been warm but superficial.

    ANKARA, TURKEY – JANUARY 04: Turkish President Recep Tayyip Erdogan (R) shakes hands with Pakistani Prime Minister Imran Khan (L) as they pose for a photo following their joint press conference at the Presidential Complex in Ankara, Turkey on January 04, 2019. ( Halil Sağırkaya – Anadolu Agency )

    Since 2018, Erdogan has significantly strengthened these ties. Last year, he addressed a joint session of the Pakistani parliament for the fourth time, passionately supporting Pakistan’s position in the Kashmir dispute. Not only has Erdogan suddenly become keenly interested in Kashmir, but he is providing the Pakistani military with sophisticated weapons.

    Just two years ago, Turkey won its largest defense contract ever, a multi-billion dollar contract to build four large naval vessels for the Pakistan Navy. In addition, a Turkish company is building Pakistan’s largest domestic warship in Karachi.

    Turkey is also upgrading Pakistani Agosta 90B Class submarines, selling T129 attack helicopters and maintenance and modernization of the PAF’s F-16s. Overall, only China is Pakistan’s largest military supplier.

    Erdogan’s current influence in Islamabad exceeds that of North Korea, Iran and Libya, which have received nuclear aid from Pakistan.

    The Turkish plan.

    Turkey thirsts for energy. Its moves regarding the Cyprus-Greek and Libyan EEZ are aimed at embezzling the gas and oil it needs in order to meet its energy needs and its goal to become a major regional power.

    The acquisition of nuclear weapons is one of its goals and it is trying to achieve it day and night under the tolerance-weakness of the previous Trump administration, the always opportunistic Putin and the weak military and politically reluctant EU.

    The future of Greek-Turkish relations is one-way and leads to war, since the interests of Turkey, as I mentioned above, demand illegal actions on Greek and Cyprus’ EEZs and the natural gas and oil fields that are within it.

    The purpose of the exploratory contacts on the part of Turkey is to give it the time it needs to secure its backs militarily from Greece and in fact with the intervention of the EU, while claiming that it can gain through dialogue.

    At the same time, it will deploy a large part of its naval forces and a significant part of its air force in Libya in order to equip its air and naval base there, making it a protectorate and exploiting its oil and gas, but also conducting research for possible offshore deposits, within the Libyan and Greek EEZ, implementing the completely unacceptable Turkish-Libyan memorandum.

    One hopes that the US-EU will block Turkey’s path to acquiring nuclear weapons and the rest of its plans that were mentioned above.

    Tyler Durden
    Fri, 03/19/2021 – 02:00

  • The Inside Story Of How Pentagon Leaders Sabotaged Trump's Afghan Withdrawal
    The Inside Story Of How Pentagon Leaders Sabotaged Trump’s Afghan Withdrawal

    Authored by Gareth Porter via TheGrayZone.com,

    In an exclusive interview with The Grayzone Col. Douglas Macgregor, a former senior advisor to the Acting Secretary of Defense, revealed that President Donald Trump shocked the US military only days after the election last November by signing a presidential order calling for the withdrawal of all remaining US troops from Afghanistan by the end of the year.

    As Macgregor explained to The Grayzone, the order to withdraw was met with intense pressure from the Chairman of the Joint Chiefs of Staff, Gen. Mark M. Milley, which caused the president to capitulate. Trump agreed to withdraw only half of the 5,000 remaining troops in the country. Neither Trump’s order nor the pressure from the JCS Chairman was reported by the national media at the time.

    The president’s surrender represented the Pentagon’s latest victory in a year-long campaign to sabotage the US-Taliban peace agreement signed in February 2020. Military and DOD leaders thus extended the disastrous and unpopular 20-year US war in Afghanistan into the administration of President Joseph Biden. 

    A peace agreement the Pentagon was determined to subvert

    The subversion of the peace agreement with the Taliban initiated by the US military leadership in Washington and Afghanistan began almost as soon as Trump’s personal envoy Zalmay Khalilzad negotiated a tentative deal in November 2019. The campaign to undermine presidential authority was actively supported by then-Secretary of Defense Mark Esper.

    In February 2020, under heavy pressure to amend the agreement, Trump ordered Khalilzad to deliver the Taliban an ultimatum: agree to a full ceasefire as a prelude to a broader peace deal, including peace negotiations with the Afghan government, or the deal was off. The Taliban refused the immediate ceasefire with Kabul, however, offering instead a “reduction in violence” for seven days to establish a conducive atmosphere for implementing the peace agreement that had already been fleshed out in detail. It then gave the US its own ultimatum: if the US refused the offer, its negotiators would walk away from the table.

    To salvage the deal, Khalilzad agreed to the Taliban proposal for a one-week “reduction of violence” by both sides. The adversaries reached further understandings on what such a “reduction in violence” would mean: the Taliban agreed there would be no attacks on population centers and Afghan stationary military targets, but reserved the right to attack government convoys if they exploited the reduction to seize control of new areas.

    The US-Taliban peace agreement signed on February 29 called for a withdrawal of US troops from the country in two stages. First, the US agreed to reduce its troop levels to 8600 within 4.5 months and remove forces from five military bases ahead of a final withdrawal that would take place in May 2021. Second, the US and its allies pledged to “refrain from the threat or use of force against the territorial integrity or political independence of Afghanistan or intervening in its domestic affairs.”

    The Taliban promised in turn that it would “not allow any of its members, other individuals or groups, including al-Qaeda, to use the soil of Afghanistan to threaten the security of the United States and its allies.”

    Those two commitments obliged US and Taliban forces not to attack each other. The agreement also specified that the Taliban would enter into “intra-Afghan negotiations on March 10, 2020, after the two Afghan parties were to have exchanged prisoners.”

    They also required the Taliban to keep al-Qaeda personnel out of Afghanistan – a pledge the Taliban Military Commission appeared to implement last month when it issued an order to all commanders forbidding them from “bringing foreign nationals into their ranks or giving them shelter.”

    But the pact did not provide for the immediate ceasefire between Taliban and Afghan government forces which the U.S. military and Pentagon demanded. Instead “a permanent and comprehensive ceasefire” was to be negotiated between the two Afghan parties.

    With startling swiftness and determination, Pentagon officials and military leadership exploited the open-ended terms of the ceasefire to derail the implementation of the agreement.

    Secretary of Defense Esper claimed the peace deal allowed the US military to defend Afghan forces, blatantly contradicting the agreement’s text. He then pledged to come to the defense of the Afghan government if the Taliban began mounting attacks on its forces, setting the stage for American violations on the ground.

    Esper’s promise of continued US military support, made public in Congressional testimony days later, gave the Afghan government a clear incentive to refuse any concessions to the Taliban. Afghan President Ashraf Ghani promptly refused to go ahead with a promised prisoner exchange until formal negotiations with the Taliban had begun.

    The Taliban responded by initiating a series of attacks on government troops at checkpoints in contested areas. The US military command in Afghanistan responded with an airstrike against Taliban forces engaged in one of those operations in Helmand province. US officials said privately that the airstrike was “a message to the Taliban” to continue what they described as the “reduction in violence commitment they had agreed…”

    The combination of Esper’s assurance to the Afghan government and the US airstrike showed the hand of the Pentagon and military leadership. It was clear they had no intention of passively accepting a deal to withdraw the remaining US personnel from Afghanistan, and would do whatever they could to unravel it.

    Gen. Kenneth McKenzie, the commander of the Central Command, further highlighted the Pentagon’s opposition to the deal when he declared in congressional testimony that troop withdrawals would be determined by “conditions on the ground.” In other words, it was up to the judgment of military commanders, rather than the terms of the agreement, to determine when US troops would be withdrawn.

    Shaping a false narrative on the agreement

    The military’s plan to sabotage the agreement hinged on creating the false impression that the Taliban had reneged on its commitments. This ruse was advanced mostly publicly by Secretary of State Mike Pompeo and Defense Secretary Esper.

    In an interview with CBS News, Pompeo mentioned “a detailed set of commitments that the Taliban have made about the levels of violence that can occur…” But that was a deliberate obfuscation. Though the Taliban had agreed to the seven-day “reduction in violence,” it did not apply to the peace agreement signed on February 29, 2020.

    On March 2, Esper told reporters, “This is a conditions-based agreement…. We’re watching the Taliban’s actions closely to assess whether they are upholding their commitments.” That same day, US commander in Afghanistan Gen. Scott Miller stated through a spokesman on Twitter, “The United States has been very clear about our expectations — the violence must remain low.”

    Once again, the Pentagon and the US command were dictating conditions to the Taliban outside the actual written terms of the peace agreement.

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

    The Pentagon and military command’s ploy was advanced through a story leaked to the New York Times and published on March 8. Below the headline, “A Secret Accord With the Taliban: When and How the US Would Leave Afghanistan,” the story referred to two “secret annexes” to deceptively suggest that the agreements reached with the Taliban were not fully reflected in the publicly available text.

    The Times’ ploy recalled the national hysteria the paper triggered last summer when it legitimized an Afghan intelligence fraud by publishing a series of lengthy articles claiming Russia had paid Taliban fighters bounties for dead American service members. Indeed, the “secret annexes” story was simply the latest political deception deployed by the Pentagon to torpedo plans for a US withdrawal.

    Despite the article’s assertion that the two documents “lay out the specific understandings between the United States and the Taliban,” the only specific reference in the story to any such understanding mentioned “commitments from the Taliban not to attack American forces during a withdrawal.” However, that explicit commitment was missing from the actual terms of the published accord.

    As the Times acknowledged in its article, when Esper and Joint Chiefs Chairman Gen. Mark Milley appeared before the House Armed Services Committee just three days before the agreement was signed, both were asked about any “side deals with the Taliban.” Neither said they were aware of any unpublished agreements. Pompeo, who also denied the existence of any “side deals” with the Taliban, referred to them as “military implementation documents.”

    The evidence clearly indicated that the so-called “secret annexes” were, in fact, internal US documents on US policy related to the agreement.

    In April 2020, the Taliban accused the United States of flagrantly violating the deal, citing 50 attacks by US and Afghan forces between March 9 and April 10, including 33 drone attacks and 8 night raids by Special Operations forces. By the summer, as the Taliban stepped up attacks on government checkpoints in areas bordering territory under their control, US forces in Afghanistan and the Defense Department informed the Special Inspector General for Afghanistan Reconstruction (SIGAR) that the orders to Afghan government forces allowed them to preemptively strike Taliban positions.

    The war thus returned to the situation that prevailed before the agreement was signed and the peace deal was effectively shattered.

    Meanwhile, the US military continued to accuse the Taliban of failing to adhere to the agreement. In July, the US government-run Voice of America reported that McKenzie had “told VOA the Taliban has not kept up their commitments agreed to in the U.S.-Taliban peace deal, leading to one of the ‘most violent’ periods of the war in Afghanistan.”

    Reversing a presidential order for withdrawal

    Following Trump’s defeat in the November 2020 presidential election, and after fashioning the strategy to sabotage the Afghan peace agreement, Esper, McKenzie and Miller agreed on a memorandum from the “chain of command” warning Trump against further withdrawal from Afghanistan until “conditions” had been met. These terms included a “reduction in violence” and “progress at the negotiating table.”

    Trump reacted to the memo with outrage, swiftly firing Esper on November 9. He replaced him with Christopher Miller, the former head of the US counter-terrorism center who agreed with Trump on withdrawal from Afghanistan.

    That same day, Trump asked Col. Douglas Macgregor to serve as Miller’s “senior adviser.” Macgregor was an outspoken advocate of withdrawal from Afghanistan and a harsh critic of other US wars in the Middle East, from Iraq to Syria. During a January 2020 interview with Tucker Carlson on Fox News, Macgregor blasted Pentagon leadership for its failure to find a path out of Afghanistan.

    Once inside the Pentagon, Macgregor immediately took on the task of enabling a rapid and complete withdrawal from Afghanistan. Just how close Trump came to withdrawing all US troops before leaving office had not been reported until now. Macgregor recounted the episode to The Grayzone.

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

    According to Macgregor, he met Miller on November 10 and told him that a pullout from Afghanistan could only be accomplished by a formal presidential order. Later that day, Macgregor dictated the language of such an order to the White House by phone.

    The draft order stated that all uniformed military personnel would be withdrawn from Afghanistan no later than December 31, 2020. Macgregor told the staffer to get a National Security Presidential Memorandum from the White House files to ensure that it was published in the correct format.

    Macgregor’s White House contact informed him in the morning of November 11 that Trump had read the memorandum and immediately signed it. On November 12, however, he learned that Trump had met with Chairman of the Joint Chiefs Mark Milley, national security adviser Robert O’Brien and Acting Secretary Miller. Trump was told that the orders he placed in the memorandum could not be executed, according to Macgregor’s White House contact.

    Milley argued that a withdrawal would harm the chances of negotiating a final peace settlement and that continued US presence in Afghanistan had “bipartisan support,” Macgregor was informed. Later that night, Macgregor learned that Trump had agreed to withdraw only half the total, 2500 troops. Trump had once again given in to military pressure, as he did repeatedly on Syria.

    The maneuvering by the Pentagon to obstruct the Trump administration’s initiative to end an extremely unpopular war in Afghanistan was just one example in a long-established pattern of undermining presidential authority over matters of war and peace.

    When he was Vice-President, Joe Biden witnessed firsthand the pressures the Pentagon brass imposed on Barack Obama to escalate the war in Afghanistan. With the peace agreement’s May 1 deadline for final US withdrawal just weeks away, Biden is certain to face another round of maximum pressure to keep US troops in the quagmire of Afghanistan, supposedly as “leverage” on the Taliban.

    Tyler Durden
    Fri, 03/19/2021 – 00:00

  • These Are The Most And Least Expensive Cities For American Homebuyers
    These Are The Most And Least Expensive Cities For American Homebuyers

    With interest rates expected to remain low for the foreseeable future (as Fed Chairman Jerome Powell re-affirmed Wednesday), and millions of people adjusting to the prospect of working from home permanently, Americans are eager to compare various housing markets, as ‘Zoom Towns’ pop up across the US, and prospective homebuyers reassess where they might consider settling down.

    In a recent study, AdvisorSmith used census data to create a weighted average housing price for each city, then adjusted it to relative to average local incomes to determine which cities are the most “affordable” in the US, or as AdvisorSmith explains: “This factor for each city provides insight into the ability of home buyers to earn income that will allow them to afford their homes.”

    Using data from more than 590 metropolitan statistical areas, AdvisorSmith ranked cities by affordability, then separated them by home size.

    They segmented the cities into small (population less than 100,000), midsize (population 100,000 to 350,000), and large (population above 350,000) cities to provide a comparison of cities with more similar characteristics.

    In addition to the most affordable cities, they also found the least affordable cities, and segmented those by size.

    Unsurprisingly, many of the most “affordable” cities were situated in the Midwest. Notably, Flint, Mich., which is still recovering from a deadly water crisis, was one of the highest on the list of most affordable.

    Meanwhile, California dominated the rankings for least-affordable cities.

    This raises some interesting questions, like: could the work-from-home boom help revive old rust-belt cities? As more businesses inform employees of their plans, it’s a trend that will be closely watched.

    Tyler Durden
    Thu, 03/18/2021 – 23:40

  • Making Sense Of China's Two Sessions
    Making Sense Of China’s Two Sessions

    By Raphie Hayat of Rabobank

    Summary:

    • The Two Sessions meetings in China have recently concluded and the outline of the 14th Five Year Plan has been approved. 

    • The overarching aim of China’s plans, in our view, is self-reliance.

    • Essentially, China wants to become less dependent on other countries, while keeping countries dependent on China (using its huge domestic market as leverage).

    • China sees that its previous credit and investment driven growth model is cracking and that the external environment is getting more hostile.

    • Technological advancement is viewed as a sort of master key that will unlock the door to sustained economic growth, as well as the door to being less dependent on foreign technologies in strategic areas, such as semiconductor production.

    • Unlocking both doors might prove to be quite challenging, however, as (i) achieving technological advancement is easier said than done and (ii) China’s policies to achieve economic growth that is less credit-driven and more technology-driven, while also reducing debt and maintaining financial and domestic stability, has inherent trade-offs.

    • China’s attempt to have it all could ultimately backfire, forcing the country to return to some of its old growth model, with even higher debt levels as a result.

    • When push comes to shove, we believe China will sacrifice growth for resilience and deleveraging for domestic stability.

    The Two Sessions conclude

    China’s annual Two Sessions meetings, during which the government budget and an outline of China’s 14th Five Year Plan (FYP) was approved, concluded on 12 March. In this report, we catch our readers up on what the main short and long-term goals of China are, whether we believe it will be able to achieve them and what practical ramifications this might have.

    The outline of the FYP indicates that China’s has a clear desire to become more self-reliant, in areas ranging from food to technology, albeit with a focus on the latter. It has defined various targets to increase spending on R&D and basic research. In addition, key manufacturing areas and technologies in which China wants to excel have been identified.

    Economic growth remains important, but high economic growth does not seem to be as important as it once was. An indication of this reduced importance is the observation that there is no explicit GDP growth target for the coming five years (although there is one for this year, namely “more than 6%”).

    Financial stability and reducing public and private debt have become more prominent goals, and monetary and fiscal stimulus look set to be scaled back somewhat. However, scaling back stimulus may not rhyme with maintaining financial stability. China’s corporate and real estate sector are very indebted, so there is a significant risk in our view of tightening too much, thereby initiating a debt crisis. Although this is not our base case, Chinese policy makers may have to tread a fine line.

    Reducing public debt also contrasts with China’s plans of investing in key manufacturing areas and “frontline technologies”, or its social plans. Of course, part of that is included in the fiscal budget, but given the modesty of the targeted budget (3.2% of GDP) we think the risk of exceeding it is high, especially since achieving the level of excellence required in the key technological areas is no easy feat. China has not been able to pull that off in, for example, semiconductors despite years of R&D expenditures of more than 2% of GDP. In addition, China’s plans to increase efficiency and productivity while also increasing domestic manufacturing in strategic areas will likely prove contradictory. Also, China ambitions to reduce CO2 output will likely contrast with economic growth in provinces dependent on coal production. Finally, China’s stance on sovereignty issues (Hong Kong and Taiwan) will not help China’s desire to maintaining cordial international trade relations.

    In short, like any other economy, China faces a number of trade-offs, although we believe some of these tangents can become quite pressing. In the next chapters, we delve more deeply into various aspects of China’s economy and how they relate to its short and long-term plans.

    Government debt

    The coronavirus has not let China off the hook in terms of increasing debt. Despite the headlines about China’s modest fiscal stimulus during the corona crisis, government debt in China has increased pretty much in line with the G10 since 2020 (figure 1), from 53% of GDP to 65% in 2020. To an extent, this could be because government stimulus was not branded as specific stimulus to fight the economic effects of the coronavirus while it likely was used for that purpose.

    Together with public, household, non-financial corporate and financial corporate debt, that brings China’s total debt load to 335% of GDP in 2020, up from 301% in 2019 (figure 2). Thus, China, just like other major economies in the world, is walking away from the corona crisis with a sizable increase in its debt-load, which was already high in comparison to other countries to start with.

    That means China’s economy is more vulnerable to downturns in future. For the government it also means that fewer of its revenues can be used to finance social expenditures and investments as the share of revenues taken up by interest payments has increased as well.

    Interest costs are not a big part of the government’s revenue, but they have doubled in the past five years, from 1.8% in 2015 to 4% in 2020, even though the yield on 10 year Chinese government bonds was (om average) higher in 2015 than in 2020 (3.4% vs 2.9%). Admittedly, this is not necessarily a big problem for China. However, the problem will more likely grow than it will shrink, unless Chinese government bond yields or debt decline over the coming years.

    Another important implication here is that the Chinese government might choose to finance public expenditure more via channels that are not officially counted as public debt, such as Local Government Financing Vehicles (see the next chapter for a discussion). The consequence could be that China’s meets its official fiscal deficit target of 3.2% of GDP, while its actual fiscal deficit (and with it public debt) might still increase.

    Moreover, foreign investors have significantly increased their purchases of Chinese government and corporate bonds in recent years. Although it is still modest in overall terms (15% of GDP), one can argue that it does make it more vulnerable to any swings in global market sentiment.

    Corporate debt

    The biggest contributor to China’s overall debt load is corporate debt. Corporate debt has jumped from an already staggering 149% of GDP in 2019 to 165% in 2020 (figure 6). Moreover, corporate defaults are on the rise. Chinese corporate bond defaults have almost doubled between January 2019 and February 2021, from 1.1% of their outstanding par value to 2%3.

    Unsurprisingly, the spread between AAA and BBB corporate bonds has risen as well and now stands at 14.9%, the highest level since our data goes back (figure 7). So clearly, financial markets are expecting more defaults for weakly rated corporates in China, a development we previously highlighted here.

    Rising default risks for the corporate sector have important implications for government debt as well. The distinction between corporate and government debt in China is much less clear cut than in most developed countries.

    Specifically, part of corporate debt could be considered public debt if implicit government guarantees are included. A big part of local government financing for example, is done via so called Local Government Financing Vehicles (LGFVs). LGFVs are used to issue bonds by local governments to finance specific projects (such as a real estate or infrastructure project). LGFVs are not counted as public debt, but are believed to have a strong implicit government backing, and as such should be counted as public debt according to the IMF.

    That means China’s public debt is potentially much higher (92% of GDP according the IMF) than the official figure. However, we note China’s the overall debt figure does not change despite the reclassification because overall debt figures (such as those compiled by the Institute of International Finance, IIF) include corporate as well as government debt. IIF currently includes LGFV financing as corporate debt, while the IMF counts it as government debt. Although financial markets know, to a certain extent, that China’s government debt might be higher than official figures suggest, an official reclassification of corporate debt as government debt could have implications for China’s perceived sovereign risk.

    More generally, China’s high overall debt load makes its corporates as well its government more vulnerable to economic shocks, government finances become less flexible as a larger part of the governments revenues are used for debt service. Moreover, the taxes that will have to be raised in the future to repay the government debt create inefficiencies (welfare losses).

    Finally, since capital is limited, government borrowing can crowd out private borrowing (they both compete for the same limited amount of capital), this can leave firms investing less. Given that private investments are more likely to be in productive assets than government investments, this would hurt productivity and economic growth. For the interested reader, here is an overview of studies that show how high debt levels negatively affect economic growth.

    Real estate

    Against the backdrop of high debt levels, the real estate sector warrants a special mention because of its importance to the Chinese economy. China’s top banking regulator (Guo Shuqing) has openly stated that he is worried about risk of a bubble in the Chinese property market. Moreover, the Work Report presented during the Two Sessions mentions that China wants to “keep the prices of land and housing as well as market expectations stable”. So it is clear that the government wants to do so something about excessive house price rises in China.

    However, reigning in house price rises without sparking a debt crisis will be a very delicate balance act. There is a decent chance that the government might be forced to ease constraints again further down the line. Because the real estate market in China is (i) very debt laden (figure 8) and (ii) very important for the Chinese economy. To corroborate the latter:

    • About 30% of bank loans are to the real estate sector (figure 9).

    • 11% of the disposable income of Urban residents is generated through property income

    • Real estate accounts for 70% of the wealth for Chinese people, according to some estimates.

    • Construction and Real Estate services are about 15% of the economy, which is higher than in many developed countries (the Eurozone average is 11.5% according to Eurostat). This is likely an underestimation given that large parts of the manufacturing sector (for example cement and steel production) are also closely related to the real estate sector.

    • Almost one in five people in China (18%) work in construction or real estate.

    Unusual house price rises tend to be followed by banking crises (Reinhardt and Rogoff, 2008) and two of China’s biggest real estate companies, Evergrande and China Fortune Land Development, have already ran into trouble with repaying high debt loads. The potential for such type of debt repayment problems to destabilize China’s economy should not be underestimated. Although a real estate crisis in China is not our base case assumption, we do see it as a major source of risk in the medium to long term future.

    With that in mind, we think a decline in the real estate sector is not something the Chinese government can or is willing to afford. Easing house price pressures without sparking a debt crisis in the real estate sector (and via that for the whole economy) will be one of the most delicate balancing acts China will have to do, and as such we think it will likely have to peddle back from this goal.

    Monetary policy

    Monetary policy in China looks set to tighten. Beijing’s target to let credit (Total Social Financing, TSF) grow in line with the economy is a clear indication of that. TSF growth is normally well above GDP growth (figure 10).

    We think monetary tightening will take place via targeted policies for specific sectors. For example restricted lending to the real estate sector. We have seen a glimpse of this in 2020, when the China Banking and Insurance Regulatory Commission announced limits on property loans for Chinese banks in December last year. The regulator, for example, has capped this to 32.5% for mortgages and 40% to overall real estate for large commercial banks.

    We believe it is less likely that the PBoC will tighten via its interest rate toolkit given China’s higher debt load and since the PBoC has not used that instrument aggressively after the outbreak of the coronavirus. After an initial cut in the 1 and 5 year Loan Prime Rate (the benchmark rate against which new loans and floating rate loans are priced), the PBoC has not stimulated the economy via its interest rate tools, despite occasional spikes in interbank rates (figure 11).

    In any case, the risk of tightening too much, is very high, especially as it poses a great risk to the overheated and debt laden real estate sector in China (see chapter Real Estate). If reduced liquidity leads to unforeseen effects in China’s real estate or banking sector, the PBoC might have to reverse course and loosen monetary policy again. The outcomes would be that China’s debt load increases even further.

    Productivity and long term growth

    An ambitious, albeit implied, growth rate

    China’s 2021 growth target of “more than 6%” has been widely covered in the press, but it one of the less ambitious targets on the bigger scale of things. What is more interesting is that there is no explicitly defined growth target in the 14th Five Year Plan for the medium to long term future. That said, there seems to be an implicit one. President Xi Jingping has previously indicated that China’s GDP per capita will double by 2035. A doubling of the current real GDP per capita (CNY 65K) by 2035 implies an annual compounded growth rate of 4.7% (figure 12). We think that is optimistic, and we will explain why below.

    Raising productivity

    China’s economic growth has historically been driven to a large extent by capital deepening (adding more capital per worker), as exemplified by its large investment-to-GDP ratio (43% in 2019). In fact, as figure 13 shows, more than half of the economic growth of China has been driven by capital deepening, while a smaller (and declining) percentage (c. 40%) has been due to Total Factor Productivity (TFP) growth. A big part of this was due to urbanisation. Much of urbanisation, however, has run its course, 61% of Chinese now live in cities, while this was 39% in 2002 (figure 14). And although there is potential for this to continue (the G7 average urbanization rate is 81%), the actual increase of people moving to cities might not be as high as it has been before. A part of China’s urbanization efforts will simply be a reclassification of migrant workers that live and work in urban areas but are not counted as being part of the urban population.

    More capital deepening will not likely add as much growth as it used to. Standard economic textbooks teach us that capital deepening improves labour productivity (since the capital per worker increases) but does generally not add to technological progress (so no growth in TFP).

    To keep using macroeconomic textbook terms, capital-deepening leads to a move on the production function of a country, not of the production function. For the latter, TFP has to increase, which in practice means either human capital or IT-capital has to increase. Figure 13 shows that China’s contribution from human and IT-capital have been much smaller and as a result, its TFP has steadily declined over the years.

    In order to increase TFP, therefore, China needs to invest more in IT-capital and human capital. Beijing’s focus seems to be more on IT-capital, given its R&D spending targets (see Table 1 in the Appendix). However, R&D investments take time to translate into innovations and simply spending more on R&D does not necessarily increase innovations (and thus technological progress). We have seen an example of the latter in China’s recent past in terms of TFP improvement.

    Figure 15 shows that R&D investments in China have already been quite decent in the past 10 years, compared to the OECD average. That has helped China move up the Global Innovation Index to the top 14th spot in 2020 (35 in 2013). However, despite years of relatively high R&D investments and efforts to innovate, TFP growth has still declined over the past 10 years (figure 16). This demonstrates that turning R&D and innovation efforts into actual TFP growth is easier said than done. One explanation for this issue is that the absorption of technology in an economy depends on institutional quality, a feature on which China does not score particularly high.

    Moreover, at least part of China’s technological progress until now has relied on mandatory technology transfers from foreign firms. This, however, looks set to become increasingly difficult for China given the recent tensions with for example the US, Australia and Japan. Even in the recent (CAI) investment deal with Europe, which we discussed here, there are provisions regarding this subject.

    Beijing’s plans to raise productivity focus relatively little on improving human capital, which arguably has the bigger potential to improve TFP. Human capital has contributed very little to economic growth in China, as we showed in figure 13.

    Education is key, but the government seems to be targeting quantity over quality here with an emphasis on years of education (11.3 years per person, see Table 1 in the Appendix), without combining this with improving the quality of schools. The latter is essential. Chinese children do well on PISA test scores, but that mainly reflects urban children in the richer cities, not the poor ones in rural areas. The children of rural migrants are not allowed to go to such schools since they are a public service to which people without Hukou have no access.

    We should also note that economic growth will not likely come from an increase in China’s labour force either. China’s population is projected to decline from 2030 onwards (figure 17) and its participation rate (the percentage of the working-age population that wants or has a job) is already relatively high (Figure 18).

    All in all, we think China will struggle to increase TFP growth, despite increased R&D investments. China has not been able to turn around its structural decline in TFP in the past years and its emphasis on physical rather than human capital suggests it may be missing out on low hanging fruit. Moreover, China’s strategy of increased self-reliance (which implies producing more goods domestically, especially in the technology sector) will likely hurt rather than help productivity, since it implies less trade and FDI, key factors that are known to benefit TFP growth. This is a good example where some of its goals become contradictory.

    SOE reform

    Another one is SOE reform. Beijing plans to maintain an important role for SOEs in its economy stating that it wants to “enhance the strength, quality, and size of SOEs”. There have been efforts to increase efficiency and reduce debt among SOEs. However, until now that has been done mostly through mergers rather than bankruptcies, which has led to fewer but larger SOEs, according to the Peterson Institute for International Economics. Chinese SOEs are indeed notoriously inefficient, almost a quarter of them are loss-making (figure 19). Still, inviting more efficiency might prove tougher than Beijing imagines, for two main reasons.

    First, if further consolidation of SOEs were to occur via bankruptcies it could have a big impact on employment in China. About 14% of the Chinese urban labour force works for SOEs (figure 20) and SOEs make up about 20% of GDP. Given this difficulty, it seems likely that SOEs will continue to be drag on TFP given their weak productivity. Any consolidation, we think, will happen in non-strategic areas, so outside high-tech, biotech and the key manufacturing and technology areas targeted in the 14th Five Year Plan (see the last chapter for which these are).

    Second, one of the ways Beijing wants to improve efficiency is by increasing the share of private ownership in SOEs. However, having partial private ownership in an SOE (say 20%) does not mean you can influence decision-making. The decision-making still often rests with the SOE. That implies that market discipline (and thus efficiency gains) might not be as big as Beijing imagines.

    Geopolitics

    As we already touched upon in the previous paragraph, tensions between the China and the US and between China and India, Australia and Japan are here to stay. The US, from its side, is not backing down, despite its new leadership. Together with these other three countries it has formed a strategic alliance (the Quad) specifically to act as a counterweight to China.

    Beijing realizes very well that even if the US’ stance on China (or at least its way of communicating) changes every four years, the US structurally now sees China as a strategic rival and its population’s views toward China are becoming increasingly negative, as they have in other countries as well (figure 21). That corroborates what we have previously argued; being tough on China is one of the few things both Democrats and Republicans agree on, and US presidents will be mindful of that. Thus, the US will continue to keep pressure on China.

    Beijing is also well aware that China’s external environment is getting more hostile and unpredictable and it does not want to wait and see what the result of that environment will be. Becoming less dependent on the external environment in strategic areas is China’s answer to that problem. Indeed, one of the ideas behind its Dual Circulation strategy is that China wants to be less dependent on other countries, while keeping countries dependent on China (using its big domestic market as leverage). That strategy, by the way, has inherent-trade-offs as well since it implies more domestic consumption, which will likely require higher wages. Those could hurt China’s competitiveness, leading to lower exports.

    Beijing is likely to maintain its stance on Hong Kong. The Work Report, for example, mentions that China will “guard against and deter external forces’ interference in the affairs of Hong Kong and Macau”. Another example is that the Chinese government has recently passed a law that reduces the share of democratically elected lawmakers in Hong Kong. In essence, this means China has a growing direct influence on Hong Kong’s politics.

    Taiwan is likely to remain of key strategic importance to the mainland as well. The Work Report released during the Two Sessions mentions that China “will remain highly vigilant against and resolutely deter any separatist activity seeking Taiwan Independence”. Taiwan has become especially important because one of the three leading global semiconductor firms (TSCMC) is based there. Given the extreme concentration of top-of-the-line semi-conductor manufacturers, this sector (and Taiwan with it) will likely be caught between China and US tensions.

    More generally, China will not likely become less assertive globally. It plans to increase its military budget by 6.8% to 1.355 CNY trillion.

    Green ambitions

    As a final issue we would like to highlight that China’s target is to achieve a greener economy, but that it comes with higher costs. Especially the target to generate 20% of its energy from non-fossil fuels by 2025 could hurt GDP growth in regions that are dependent on coal production. Most notable are Shanxi, Inner Mongolia, Shaanxi and Xinjian, which together account for 78% of China’s coal production (Figure 22). The economies of these provinces could be hit hard if coal production goes down substantially. Indeed, that might be the reason that the green energy target for the coming year is not that ambitious.

    After all, the target of 18% CO2 emission per unit of GDP is the same as the target of the previous Five Year Plan, and according to some calculations imply that CO2 emissions will actually increase by 1% per year until 2025. The more likely avenue through which China will try to cut its carbon footprint is reduced support for fossil fuel related projects in other countries, as it has done recently in Bangladesh. The question this raises is whether China can maintain its assertion of being at the forefront of global leadership in turning around climate change. Or would it be one of the first goals to be ditched at the expense of higher economic growth if needed?

    What will this mean in practice?

    China’s plans for the coming five to fifteen years are ambitious. We have argued in this report that some of these plans will be difficult to achieve and some contain inherent trade-offs. In our view, China cannot have its cake and eat it too. It will have to make some tough choices along the way and, if pressed, renege on some of its stated plans. That obviously has implications for businesses operating in China or for those who are otherwise dependent on its economy.

    First of all from a broad economic perspective. Despite high economic growth in the short term, the years of high growth in China are over, as are the years of high and consistent rises in house prices. That has implications for investors and firms dependent on the real estate sector. Debt levels in general will not likely decline in China, rather we believe there is a good chance that they will increase further, which implies higher credit risk, all else equal. Meanwhile, China seems to have shifted back from focussing on services to manufacturing, implied by its emphasis on eight key manufacturing areas (see Table 1 in the Appendix for a list). That could go against growth in the services sector and, as such, may also be at odds with its goal of nurturing domestic consumption. But also on a more detailed level will China’s plans and the issues that come with it have implications:

    • Although China is actually saying that it is opening up its economy and its financial system, how this operates in practice is something that still needs to be demonstrated. Foreign firms trying to access the Chinese market in key strategic areas might still find it difficult to gain a foothold, unless they are willing to share their knowledge with local parties.

    • In any case, multinational corporations might find themselves caught between geopolitical tensions between China and the US, Australia and Japan. The semiconductor industry specifically might be targeted because of such tensions as well.

    • There are upsides for Chinese firms operating in the manufacturing and technology areas Beijing has identified as key. Firms operating in these areas (e.g. semiconductors, electrics cars, 5G, AI and biotechnology) will likely benefit from one form of government support or another.

    • For fintech firms and e-commerce giants, there could be major downsides. The government’s recent crackdown on large internet companies suggest Beijing is serious about breaking the monopolies of internet giants in China. There is a another contradiction here with Beijing’s wish to raise the digital part of economy to 10% of GDP. The digital economy is dominated by a handful of big players. Tmall (owned by Alibaba), JD.com and Pinduodo for example, control 89% of retail e-commerce sales in China. If broken up, it remains to be seen how quickly they will be replaced by smaller firms. Moreover, aggressively cracking down on big internet companies could destabilize financial markets in China, which are also dominated (in terms of market capitalization) by the same firms.

    • Finally, China’s demand for coal might not decrease as much as news headlines suggest.

    As a final takeaway, we note that China’s implicit long-term growth goal remains ambitious (see the chart below with our medium and long-term growth projections) and that several policy goals contain inherent trade-offs. Achieving a reduction debt and maintaining financial and domestic stability could be at odds with its aim to become more technology-driven. When push comes to shove, we believe China will sacrifice growth for resilience and deleveraging for domestic stability.

    Tyler Durden
    Thu, 03/18/2021 – 23:20

  • Hundreds In Taiwan Change Name To "Salmon" As Restaurant Promotion Spirals Out Of Control
    Hundreds In Taiwan Change Name To “Salmon” As Restaurant Promotion Spirals Out Of Control

    As senior diplomats from Beijing and Washington meet in Alaska, the Taiwanese government is issuing an advisory urging its citizens to stop changing their names to “Salmon” after a sushi chain’s promotion reaffirmed just how far people will go for free stuff.

    It all started when Japanese sushi chain Sushiro launched a promotion offering a free meal to customers with names that included the traditional Chinese character for salmon “guiyu”. Customers with names that sounded similar to the word could also enjoy a meal for half price.

    The offer sparked what the local media characterized as “salmon madness”, per WaPo.

    Dory Wang, a Sushiro marketing manager, said about 200 customers with the name “Salmon” on their identity card had visited one of the chain’s restaurants on Wednesday, adding that the response of seafood-loving Taiwanese had exceeded expectations. “We appreciated those who are willing to change their names for our sushi,” Wang said.

    “Five people requested a name change today and another six yesterday,” said Ou Minxin, an official at a local household registration office in Kaohsiung, Taiwan’s second-largest city. “We have seen changed names such as ‘Hotness Salmon,’ ‘Dip Wasabi and Eat Salmon,’ and ‘Can’t Help but Want to Eat Free Salmon.'” Ou said most of them changed their names back after having a meal. “It has indeed added to our workload, but it is quite interesting,” he said.

    One resident decided to add 36 characters to his name, including seafood-themed emojis for “crab” and “lobster.”

    However, for the young people who changed their name for the promotion with the expectation of changing it back, the government has issued a reminder that Taiwanese citizens are only allowed to change their names three times during their lifetimes.

    But there’s a catch – and some diners may have bitten off more than they can chew.

    Taiwan’s Ministry of the Interior posted a reminder on Facebook that a person can only change their name three times in a lifetime, explaining that two of those will be wasted if a person changed their name to “Salmon” and back.

    But some young people insist they have no regrets, and say they are planning to keep their “salmon” names as a sign of their adventurousness and creativity. One 19-year-old student said he changed his given name to “Salmon” and invited users to join him for a meal, with eight slots on offer. He said the name represents his courage to do “whatever he wants,” and hasn’t decided whether to change his name back yet.

    Tyler Durden
    Thu, 03/18/2021 – 23:00

  • Murders And Shootings Skyrocketed In Portland After George Floyd's Death & The Defunding Of Police
    Murders And Shootings Skyrocketed In Portland After George Floyd’s Death & The Defunding Of Police

    Authored by Jeff Reynolds via PJMedia.com,

    A staggering number of murders and shootings took place in Portland, Oregon, after the death of George Floyd in Minneapolis touched off violent riots across America. Many of the most violent riots occurred in Portland, and with police resources stretched thin, lawlessness increased exponentially across the city. The correlation could not be more clear—after Floyd’s death, the “defund the police” movement sprung up under misplaced motivations of social justice, and many people died unnecessarily. Floyd’s death, over Memorial Day weekend in 2020, created a clear demarcation after which murders and shootings skyrocketed in Portland.

    Crime policy expert Sean Kennedy, a fellow at Maryland Public Policy Institute, crunched the numbers, based on Portland Police Bureau stats and media reports:

    • Since June 2020, there has been a 255% increase in murder in Portland through February 2021;

    • Shootings up 173% – by 551;

    • Shootings increased 126% in 2020, and Year to Date have increased 93%.

    The numbers are truly alarming. From January through April 2020, there were a total of three murders in Portland. Just in January and February 2021, we’ve already seen 20 murders. For the period of June 2020 through February 2021, 71 murders have occurred in Portland. That’s a staggering 255% increase over the same period one year prior.

    Shooting statistics tell another grim tale. In the period of June 2020 through February 2021, 870 shootings occurred in Portland. For the same period one year prior, Portland saw 319 shootings. That’s a 173% increase.

    This is a crisis that the city of Portland and Multnomah County are not taking seriously.

    Kennedy notes that 53 people were murdered through the end of 2020, after Floyd’s death and the subsequent push to defund the police. He told PJ Media, after compiling the numbers:

    The lawlessness that Portland experienced this summer directly contributed to the subsequent and dramatic increase in violence—especially homicides. Portland’s political leaders, including Mayor Wheeler and Multnomah County DA Mike Schmidt’s contempt for law and order, disempowered and demoralized the police. The result is chaos and death. Over 50 Portlanders did not have to die but for the rhetoric and actions of local officials caving to the mob and attacking the police.

    Law enforcement sources in Portland have repeatedly reported that they cannot respond to all violent crimes when the dual forces of defunding the police force and responding to nightly riots handcuff them. This crisis in police response times was highlighted in September when a home intruder locked a single father out of his home and held his 12-year old son hostage. The father called 911 and did not receive a response for over an hour and a half:

    Henry Kirim had ducked out of his Southeast Portland apartment to search his car for a missing bank card when a strange man rushed into his ground-floor unit, closed the door and locked it.

    Kirim’s 12-year-old son remained inside.

    Kirim fumbled for his house key, thankful he had it on the same ring as his car key, and raced to open his apartment door.

    “I was so scared,” he said.

    The next 10 minutes unfolded in a blur on Aug. 22. The stranger grabbed a kitchen knife. Kirim’s petrified son managed to dart out of the apartment. Kirim followed and started yelling for neighbors to help. When the man eventually fled, several residents gave chase and cornered him nearby.

    It took police more than 90 minutes to arrive. Just before an officer finally appeared, the suspect ran off. More than a half-dozen calls had come into 911 over the course of the bizarre ordeal. But that apparently didn’t speed the response.

    Maybe that has spurred Mayor Wheeler into action. He asked for a partial restoration of police funding last week, to the tune of $2 million:

    The mayor of Portland, Oregon, announced Thursday he would seek $2 million in one-time funding for police, other agencies and outreach programs to try to stem rampant gun violence in the city.

    The move by Mayor Ted Wheeler represents an about-face after city leaders in June voted to cut nearly $16 million from the police budget, reductions that included the elimination of a gun violence reduction unit. The cuts came amid racial justice protests following the police killing of George Floyd in Minneapolis.

    It remains uncertain if the activists on the city council, such as Jo Ann Hardesty, will go along with the plan to try to rein in the violence in Portland.

    Tyler Durden
    Thu, 03/18/2021 – 22:40

  • Starbucks Founder Says China "Is An Adversary Not An Enemy" & US "Must Find A Way To Cooperate"
    Starbucks Founder Says China “Is An Adversary Not An Enemy” & US “Must Find A Way To Cooperate”

    Former Starbucks CEO and one-time Independent presidential wannabe Howard Schultz made an appearance at Bloomberg’s Equality Summit on Thursday to try and remind President Biden – whose administration has maintained many, but not all, of the tough on China policies adopted by his predecessor – that the US and China must cooperate.

    In a seemingly contradictory quote, Schultz told his audience that China is “an adversary but not an enemy” and that America and the Chinese “must figure out a way to cooperate.”

    Schultz added: with the “rhetoric of the last four years” being unhelpful to finding common ground, if relations aren’t improved, “there will be significant problems,” he said, though he is “confident that we will find a way to cooperate to benefit the rest of world”.

    “I have great respect for the Chinese people and the relationships we have built as a company there,” Schultz said. “China is not going to conform to everything America wants in the same context that America is not going to conform to everything China wants.”

    Switching topics to economic inequality, an issue that Starbucks has long claimed to lead on, regarding domestic US issues, Schultz said the “underbelly” of inequality in American society can be seen in broadband Internet access, which he said is lacking in more than half of low-income households.

    “That alone demonstrates the significant divide in America,” Schultz proclaimed.

    But to improve racial harmony, “we need to do better at teaching sensitivity and compassion,” he said. “We have to have a society with respect and dignity for all”. And finally, Schultz turned his attention to small business owners, whom he said have been among the hardest-hit during the pandemic.

    A “large majority” of those affected “have been Black- and brown- owned businesses” which threatens the “social fabric in neighborhoods and communities”.

    Whatever you might think of Schultz and his virtue-signaling, it’s important to remember that China has played an increasingly critical role to Starbucks’ bottom line over the last year (while he no longer runs the company, he’s still the founder, and a board member). Even though Chinese consumers haven’t taken to coffee like American executives had hoped (who can forget the demise of Starbucks’ domestic competitor Luckin Coffee?), Starbucks’ stores comprised a larger portion of its international revenue in 2020. What’s more, Starbucks’ stores in China were largely open for most of last year, unlike the company’s stores in the US.

    With senior diplomats from the US and China meeting in Alaska today and tomorrow, expect to hear more of this from American captains of industry as we head into the weekend.

    Tyler Durden
    Thu, 03/18/2021 – 22:20

  • Dan Bongino To Fill Rush Limbaugh's Airtime In Major Markets
    Dan Bongino To Fill Rush Limbaugh’s Airtime In Major Markets

    Conservative pundit Dan Bongino will take over the late Rush Limbaugh’s coveted three-hour airtime slot across several major markets, according to Cumulus Media Inc’s Westwood One.

    Following Limbaugh’s death last month, most stations have been filling the void by playing reruns of old episodes. Limbaugh, the most listened to radio host in the United States, reached over 20 million monthly listeners across over 650 affiliates, according to the Wall Street Journal.

    Bongino, a former Secret Service agent and NYPD officer who has his own popular podcast, has become a rising star in conservative media. He will fill the three-hour slot in New York, Los Angeles, Chicago, Dallas, San Francisco, and Washington, DC, while most other stations will continue to air old tapes of the show.

    Mr. Bongino lost three Congressional races—two in Maryland and one in Florida—running as a Republican, but his success in punditry has exploded. A vocal supporter of conservative candidates who once declared, “my entire life right now is about owning the libs,” his views often echo Mr. Limbaugh’s. He is also a man of many media: He has written several bestselling books, appeared regularly on Fox News, and commands a Facebook page with more than four million highly engaged followers.

    The move by Westwood One, which syndicated Mr. Limbaugh’s show across about 30 stations, signals that the revered and controversial host’s void may be filled piecemeal, instead of by a single successor. The radio network didn’t specify exactly how many stations Mr. Bongino’s show would appear on. Already some individual markets have chosen local hosts to take over the airwaves. –Wall Street Journal

    In other markets, different hosts such as right-wing Evangelical commentator Erick Erickson has taken over Limbaugh’s slot, while Jacksonville’s WOKV has given the slot to radio host Mark Kaye. In Baltimore, radio and podcast host Derek Hunter has taken over the slot.

    While iHeartMedia admits that “No one can replace Rush Limbaugh,” the company’s Premiere Networks have continued to air a hybrid of Rush reruns on topics currently being discussed, using guest hosts in between clips. So far it’s attracted roughly 75% to 80% of Rush’s regular audience, according to a person familiar with the matter.

    Tyler Durden
    Thu, 03/18/2021 – 22:00

  • New Document Exposes How This Company Tracks Car Locations In Real-Time
    New Document Exposes How This Company Tracks Car Locations In Real-Time

    According to a document obtained by Motherboard, a tiny surveillance contractor based in Charleston, South Carolina, can locate and track newer model cars in any country. This data is being packaged up into a new service and pitched to the US government as a powerful surveillance technology.

    “Ulysses can provide our clients with the ability to remotely geo-locate vehicles in nearly every country except for North Korea and Cuba on a near real-time basis,” the document written by The Ulysses Group, reads. “Currently, we can access over 15 billion vehicle locations around the world every month,” the document adds.

    In new automobiles, intelligent sensors transmit an array of data (even including location) to the automaker or third parties. Aggregator companies then take this data and integrate them into packages based on the needs of their clients. 

    “Vehicle telematics is data transmitted from the vehicle to the automaker or OEM through embedded communications systems in the car,” the Ulysses document continues. “Among the thousands of other data points, vehicle location data is transmitted on a constant and near real-time basis while the vehicle is operating.”

    The document suggests Ulysses’ tracking service could be used for military surveillance operations: 

    “We believe that this one attribute will dramatically enhance military intelligence and operational capabilities, as well as reduce the costs and risk footprint of ISR [intelligence, surveillance, reconnaissance] assets currently used to search for and acquire mobile targets of interest.” 

     “Whether you want to geo-locate one vehicle or 25.000.000 as shown here. Currently, we can access over 15 billion vehicle locations around the world every month,” the document concludes. 

    Motherboard sent the document to Senator Ron Wyden (D-Oregon). Wyden spokesperson Keith Chu responded in an email statement:

    “Far too little is known about how private information is being bought and sold. Senator Wyden is conducting an ongoing investigation into the sale of personal data, particularly via data brokers, to put some sunlight on this shady industry. Our office is continuing to perform oversight into where data brokers are acquiring Americans’ information, and who they’re selling it to.”

    Motherboard noted Ulysses previously worked with US Special Operations Command on a different piece of technology to “analyze how peer and near-peer competitor countries were making economic and financial investments in Africa and Central and South America.” 

    President of The Ulysses Group, Andrew Lewis, told Motherboard in an email that “any proprietary promotional material we may have produced is aspirational and developed based on publicly available information about modern telematics equipment.”

    “We do not have any contracts with the government or any of its agencies related to our work in the field and we have never received any funding whatsoever from the government related to telematics,” Lewis added.

    Here’s the full document: 

    While the document does not specify how the surveillance firm procures its data, the luxuries of owning a modern car tied to the “internet of things” appear to have their downfalls as car companies or third parties, or even the government can track these vehicles in real-time. 

    In a world where COVID has accelerated the surveillance state, many people are wondering how to escape the Orwellian grid of surveillance and social control, well, first, own a car with limited technology embedded within – also we offer some simple steps to disappear from the surveillance matrix. 

    Tyler Durden
    Thu, 03/18/2021 – 21:40

  • What Is The Shipping Container Shortage Telling Us About The Economy?
    What Is The Shipping Container Shortage Telling Us About The Economy?

    Via SchiffGold.com,

    As Peter Schiff pointed out during a recent interview with NTD News, America has never done worse on trade. He called it a sign that we don’t have a recovering economy. In fact, we have a phony economy in danger of collapse.

    The annual trade deficit for goods came in at an all-time high in January, increasing $3.4 billion to a record $221.1 billion. In another sign of the massive trade imbalance, there is a shortage of shipping containers to bring things into the US.

    In a nutshell, the Federal Reserve is printing money and the US government is giving it to unemployed people who aren’t producing anything. As Peter pointed out, “They’re buying the stuff that people in other countries are employed making.”

    So, it’s the productivity of the rest of the world that Americans are living off of, and the trade deficit evidences that and shows you that our whole economy, our whole recovery, is a fraud.”

    Economic research assistant Weimin Chen says stresses on the world’s shipping infrastructure uncover additional clues about the economic outlook in the US.

    The following article by Weimin Chen was originally published by the Austrian Economics Center and reprinted by the Mises Wire.

    Despite the record unemployment rate, widespread hardship to businesses, strains on the healthcare system, political turmoil, and general disruption to daily life in 2020, US consumers have managed to ramp up their habit of buying things. Demand for physical goods replaced some of the previous demand for in-person service-related experiences and much of that demand was met with a surge of imports from China as domestic production slowed down due to lockdown measures. Up until recently, global supply chains managed to find their footing and could meet demand, but news has emerged that reveals stresses on the world’s shipping infrastructure and uncovers clues about the economic outlook.

    Container Shortage and Chinese Exports

    Global logistical networks recently began to suffer from a shortage of shipping containers as demand has suddenly risen. Freight rates from China to the US have jumped by 300%. The container situation has become so extreme that hundreds of thousands of containers have been sent off empty from US ports, mostly to China as exporters demand empty containers with increasing urgency. An estimated 177,938 containers, were rejected from loading US export items at the ports of Los Angeles and New York/New Jersey alone and then sent across the Pacific.

    The recent imbalance of shipping containers illustrates the latest state of affairs surrounding the US and Chinese economies. As exports of consumer goods from Asia eclipse exports of mostly commodity and raw materials from the US—in this case, even blocking US agricultural exports from having shipping containers to reach foreign markets—the trade deficit between the two countries may become more important to these highly competitive economies.

    When Trade Deficits Matter

    The Austrian perspective on the US trade deficit has long been that given the continued relative productivity of the US economy, foreign desires to invest in the US, and demand for the dollar abroad, the trade deficit is a ‘pseudo-problem.’ The US competitive advantage vis-à-vis other countries in recent decades has made running a trade deficit highly probable and even favorable for Americans as they enjoy the consumption of cheaper imports.

    Thus far, the parties involved have been satisfied with this arrangement as US consumers bring in goods at favorable prices and producers receive a reliably stable world reserve currency: the US dollar. However, the underlying conditions particular to the US economy in relation to China may be changing. There are two aspects of the US-China trade deficit that merit attention. The first is the effect of net consumption by the US coupled with dovish monetary and fiscal policies whereas the second is what China plans to do with US dollars accumulated through exports.

    On the US side of the equation, easy money from the central bank coupled with fiscal stimulus extended to consumers has juiced buying activity as the lockdowns have forced people to stay home and spend. It’s no wonder that shipping containers are rushing to get back to China. With the US taking big hits to production and foreign investment in 2020, along with explosive increases in the money supply, critical questions arise regarding the nature of this trade deficit and how long the status quo can continue as the country pushes the boundaries of its exorbitant privilege. Indeed, the health of the dollar itself as it relates to trade deficits would be an indicator to watch in coming years.

    In running a trade surplus with the US, China has traditionally exchanged its US dollars for US Treasuries to add to its balance sheet and to maintain its export advantage. In recent years, however, China has reduced its holdings in Treasuries. This trend has also coincided with massive spending on the part of China in the last decade on the Belt and Road Initiative (BRI) infrastructure and trade corridor project which involves 71 countries across Eurasia and Africa that encompass two-thirds of the global population and one-third of world GDP.

    Given the continued global dollar demand, it would be shrewd for China to use accumulated dollars to acquire foreign assets and invest in projects that have the potential to generate future income. The trade war with the US in recent years has driven China to deepen its flow of trade toward surpluses with other emerging markets and forge strategic global relations.

    As containers carry goods from China to the US and rush to return empty to bring more, the moment provides a glimpse into a potentially precarious arrangement between the two countries. While the US presently consumes itself into debt and liabilities, China has leveraged its productive surpluses from this relationship into increasingly influential assets that may strengthen its position and further challenge the US, and perhaps even the dollar itself.

    Tyler Durden
    Thu, 03/18/2021 – 21:20

  • Samsung Joins Chorus Of Companies Stung By Semi Shortage
    Samsung Joins Chorus Of Companies Stung By Semi Shortage

    By now, the world knows we are in the midst of a massive semiconductor shortage.

    We have written about how this has wreaked chaos on the auto industry and we have also noted how industry giants like Taiwan Semiconductor are making vast infrastructure investments to try and solve the current shortage and prevent it from happening again in the future. 

    Now, Samsung is the latest to confirm what we already know: that the current crisis is “very serious” and that it “poses a slight problem” for the electronics company heading into the second quarter. The company continues to try and address supply issues, Reuters reported that CEO and mobile chief Koh Dong-jin said at Samsung’s recent annual general meeting.

    In fact, there are also rumors that Samsung is considering skipping its usual Galaxy Note launch this year due to the ongoing chip shortage, according to 9 to 5 Google. Koh is quoted as saying:

    Note series is positioned as a high-end model in our business portfolio. It could be a burden to unveil two flagship models in a year so it might be difficult to release Note model in 2H. The timing of Note model launch can be changed but we seek to release a Note model next year.

    “Right now, it’s unclear if this would also affect Samsung’s other planned releases for 2021,” 9 to 5 Google adds. And regardless of whether or not Samsung does decide to delay its hardware, the point has already been made: the chip shortage remains dire for the time being, is having a profound effect on some of the world’s largest companies, and shows no signs of respite just yet. 

    Most recently, we wrote about how difficult it was becoming for U.S. companies to export chipmaking hardware to China due to trade restrictions. We also documented weeks ago how critical Taiwan would be in getting the semiconductor industry back up and running. We noted that Taiwan Semiconductor Manufacturing was rushing to try and build new facilities through the Chinese New Year in order to meet demand. 

    TSMC is one of the biggest suppliers of chips to company like Apple, Google and Qualcomm. As a result of a worldwide shortage in chips that was brought on due to the pandemic, they are now rushing to try and get a new factory in the southern Taiwanese city of Tainan built. Construction the new facility will take place throughout 2021, with completion expected in 2022. 

    Earlier in 2021 we noted that the semi situation had been turning dire and was now being referred to as the “most serious shortage in years”. Qualcomm’s CEO said last month that there were now shortages “across the board”. 

    And it wasn’t just Qualcomm executives speaking out: other industry leaders warned in recent weeks that they are susceptible to the shortages. Apple said recently that its new high end iPhones were on hold due to a shortage of components. NXP Semiconductors has also warned that the problems are no longer just confined to the auto industry. Sony also said last week it may not be able to to fully meet demand for its new gaming console in 2021 due to the shortage. Companies like Lenovo have also been feeling the crunch.

    Tyler Durden
    Thu, 03/18/2021 – 21:00

  • "My University Said No To Cancel Culture And It Was the Right Call"
    “My University Said No To Cancel Culture And It Was the Right Call”

    By Daniel Samet, is a Ph.D. student in History at the University of Texas at Austin, submitted by the National Interest,

    Renaming schools, disinviting speakers, and canceling professors is all the rage on campus these days. At the University of Texas at Austin (UT), it seemed only a matter of time before our allegedly racist school song would be the next casualty of this woke crusade.

    An uplifting number written in 1903, “The Eyes of Texas,” is traditionally sung at Longhorn football games and other events. But following last summer’s social justice protests, many called for it to be expunged due to supposed associations with slavery. The pressure from students, faculty members, and the media on the UT administration was immense.    

    This time, though, sanity prevailed. According to a just-released report by The Eyes of Texas History Committee, archival research found no evidence of racism in the song’s intent. Its lyrics do not long for slavery. Nor were they inspired by something Robert E. Lee may have said. The message of the song is accountability, not racism. Though acknowledging that “The Eyes of Texas” was born at a time of racial prejudice, the committee noted in its key takeaways that “The History of the Song Reflects the History of America” and “Facts and Historical Context Matter.”   

    President Jay Hartzell agrees. In a March 9 email to the UT community announcing the report’s release, he said that the song will be kept in its current form while rejecting two of the arguments often trotted out in support of cancel culture. First, Hartzell challenged the uniformly negative view of American history peddled with growing regularity on college campuses. “But while the American story is imperfect, I believe it is positive overall,” he wrote. Second, Hartzell defended free speech, arguing that “no one should shout down those who wish to continue in the tradition of singing.”  

    Those statements would not have raised any eyebrows just a short while ago. Yet they are most controversial now. To assert that America’s past is commendable rather than contemptible runs counter to the woke narrative that now dominates academia. Liberal orthodoxy, which counsels reform, not revolution, as the remedy for America’s problems, has been cast aside for a progressive offshoot that sees in this country only irredeemable wrongs to be extirpated. The new dogma also equates speech one doesn’t like with violence.        

    In this illiberal climate, releasing the report took courage. The committee members, which include students, alumni, faculty, and staff, are mostly, if not entirely, on the Left. But they did not let ideological prejudgments blind them to the historical record. For being upfront about the evidence they deserve great credit.     

    Hartzell also deserves credit for deciding the song will stay. That won’t win him any plaudits with our woke betters in faculty lounges, newsrooms, or left-wing Twitter feeds. Yet it will win the respect of those who hope there is still a small measure of common sense left on campuses that seem to produce everything but it.

    At a time when our elite institutions capitulate left, right, and center to cancel-crazed mobs, it is encouraging to see that at least one still has backbone. May others follow UT’s example.

    Tyler Durden
    Thu, 03/18/2021 – 20:40

  • Prison Guards Across Country Refusing COVID Vaccine Despite Outbreaks
    Prison Guards Across Country Refusing COVID Vaccine Despite Outbreaks

    Correctional officers across the country are shunning the COVID-19 vaccine over fears of both short-term and long-term side effects of the most rapidly-developed immunization in US history.

    Kareen Troitino stands outside the Federal Corrections Institution, Friday, March 12, 2021, in Miami. (AP Photo/Marta Lavandier)

    According to an investigation by the Associated Press and the Marshall Project, while over 106,000 prison employees across 29 systems have received at least one dose of a COVID-19 vaccine, many won’t take it – joining countless health care workers, nursing home employees and police officers who refuse to become vaccinated despite regular exposure to the public.

    Prisons are coronavirus hot spots, so when staff move between the prisons and their home communities after work, they create a pathway for the virus to spread. More than 388,000 incarcerated people and 105,000 staff members have contracted the coronavirus over the last year. In states like Michigan, Kansas and Arizona, that’s meant 1 in 3 staff members have been infected. In Maine, the state with the lowest infection rate, 1 in 20 staff members tested positive for COVID-19. Nationwide, those infections proved fatal for 2,474 prisoners and at least 193 staff members. –AP via Komo News

    In one Florida federal prison, FCI Miami, “fewer than half of the facility’s 240 employees have been fully vaccinated as of March 11,” according to corrections officer union president Kareen Troitino, who said that many of the workers who refused were concerned over the vaccine’s efficacy and side effects.

    In January, Troitino and FCI Miami warden Sylvester Jenkins invited employees to join them in getting vaccinated “in an act of solidarity,” writing “Even though we recognize and respect that this motion is not mandatory; nevertheless, with the intent of promoting staff safety, we encourage all staff to join us.”

    Just 25 employees signed up despite the facility having had two major COVID-19 outbreaks; one last July, when 400 prisoners out of 852 were suspected of having the disease, and a second wave in December which struck approximately 100 people housed in the prison’s minimum-security camp.

    The trend is nationwide:

    In Massachusetts, more than half the people employed by the Department of Correction declined to be immunized. A statewide survey in California showed that half of all correction employees will wait to be vaccinated. In Rhode Island, prison staff have refused the vaccine at higher rates than the incarcerated, according to medical director Dr. Justin Berk. And in Iowa, early polling among employees showed a little more than half the staff said they’d get vaccinated.

    As states have begun COVID-19 inoculations at prisons across the country, corrections employees are refusing vaccines at alarming rates, causing some public health experts to worry about the prospect of controlling the pandemic both inside and outside. Infection rates in prisons are more than three times as high as in the general public. Prison staff helped accelerate outbreaks by refusing to wear masks, downplaying people’s symptoms, and haphazardly enforcing social distancing and hygiene protocols in confined, poorly ventilated spaces ripe for viral spread. -AP

    “Everybody is on edge” says Troitino, who’s worried that so many correctional officers and prisoners haven’t been vaccinated – adding that officers are “constantly shuttling sick and elderly prisoners to the hospital,” leaving a skeleton crew to operate the facility.

    Explanations for why prison employees are refusing the jab essentially revolve around ‘right wing misinformation’ and ‘debunked conspiracy theories,’ according to the report.

    Or, perhaps they’re leery of taking what is essentially still an experimental vaccine for a disease which kills mostly old, obese, and medically compromised people, and which doesn’t prevent one from contracting or transmitting it.

    Read the rest of the report here.

    Tyler Durden
    Thu, 03/18/2021 – 20:20

  • The Ghislaine Maxwell Case And The Ongoing(?) Investigations Of Epstein's Co-Conspirators
    The Ghislaine Maxwell Case And The Ongoing(?) Investigations Of Epstein’s Co-Conspirators

    Authored by Techno Fog via The Reactionary

    Background

    Ghislaine Maxwell remains in jail, awaiting trial for charges including (1) conspiracy to entice/transport minors to engage in illegal sexual acts; (2) transportation of a minor to engage in illegal sex acts; and (3) perjury. She doesn’t yet have a trial date and sits (or, as Maxwell would say, suffers) in jail as the the case continues.

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

    Maxwell is currently fighting this war on multiple fronts. The first has to do with dismissal. As we previously reported, she is trying to get the charges dropped. One of her best arguments (read her motion to dismiss on Scribd) is that the Epstein plea deal precludes her prosecution:

    The US has responded to this motion to dismiss. Per a March 16, 2021 letter to the court from Maxwell’s attorneys, it appears that the government’s motions and supporting exhibits are currently under seal.

    Second, Maxwell seeks more evidence. Here is where it gets interesting.

    On February 4, 2021, Maxwell filed her memorandum in support of her motion for a bill of particulars and pretrial disclosures. (Full document is available here.) In layman’s terms, this means she wants the immediate disclosure of exculpatory and impeachment material; a government witness/evidence list; and more general information of the alleged charges.

    Interestingly, Maxwell alleges the government still “has not disclosed” the identities of the victims. Maxwell was arrested on July 2, 2020. This puts her at 8 months from the date of arrest to the filing of the motion where she didn’t have this information.

    She further claims that she has been provided “almost no information” about the details of the her criminal conduct.

    What else wasn’t produced to Maxwell? The dates the criminal conduct occurred.

    Maxwell’s also seeks FBI 302 summaries of witness interviews. At least one interview is alleged to contain (details redacted) “exculpatory” material that must be produced to the defense.

    Accompanying the motion was a List of Particulars, which requests information on 29 different topics. You can read the List of Particulars here.

    More to Come: Motions (and Exhibits?) to be Unsealed

    In the next few weeks we expect the unsealing of the government’s response to Maxwell’s motion to dismiss and their response to her request for more information on her charges and accusers. We should also be seeing the following motions from Maxwell – which includes the issues of dismissal, breach of the Epstein non-prosecution agreement, and her request for more documents and information relating to her charges – put on the public docket. (We’ll provide updates as soon as the court provides public access.)

    Also pending: Maxwell’s third try to get out on bail.

    In July 2020, the court concluded she was a serious flight risk. On December 28, 2020, Maxwell proposed to the court a more significant bail package, which included armed guards and a $28.5 million bond. This was again denied, with the court noting Maxwell “plainly poses a risk of flight.” In February 2021, Maxwell proposed two additional conditions to her prior bail package: (1) renunciation of her French and British citizenship; and (2) placement of some of her and her husband’s assets in a new account overseen by an asset monitor. The court has yet to rule on Maxwell’s latest bail proposal.

    Finally, one important question is still unanswered. Will any more of Epstein’s co-conspirator’s be prosecuted?

    We can understand (but can’t fully answer) this question by looking to Epstein’s non-prosecution agreement.

    This agreement, or plea deal, was unique. Not just because it was favorable and done in secret and kept secret from his victims and the public, but because it released Epstein’s known and unknown co-conspirators. From the non-prosecution agreement:

    [T]he United States also agrees that it will not institute any criminal charges against any potential co-conspirators of Epstein, including but not limited to Sarah Kellen, Adriana Ross, Lesley Groff, or Nadia Marcinkova.

    Last August, the government informed the court that their investigation into Epstein’s possible co-conspirators “remains active” and was before the grand jury.

    The identity of Epstein’s unknown co-conspirators has always been intriguing. He ran in powerful circles. One name that always comes up is Bill Clinton. This summer, unsealed records from Maxwell’s civil case implicated Bill Clinton being around “2 young girls” at Epstein’s island.

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

    This allegation was denied by Bill Clinton’s spokesman.

    I’m pretty certain that Maxwell’s lawyers know much more than we do. Maxwell’s February 2021 motion to dismiss also included this redacted passage that identifies the unnamed “co-conspirators.”

    To close, and to address our final question – “Will any more of Epstein’s co-conspirator’s be prosecuted?” – we suspect that passage above might have the answer. With the DOJ’s potentially ongoing investigation of the co-conspirators, and pursuant to DOJ policy, don’t expect the passage to be unredacted anytime soon.

    Your support makes this possible. You can contribute- and help offset our expenses of obtaining court records and transcripts – by sharing and subscribing.

    Tyler Durden
    Thu, 03/18/2021 – 20:00

  • "Don't Lecture Us": Alaska Summit Opens With Dueling Barbs & Epic Anti-US Tirade
    “Don’t Lecture Us”: Alaska Summit Opens With Dueling Barbs & Epic Anti-US Tirade

    As predicted things are icier than ever by the end of day one of the Alaska summit in which for the first time in the Biden administration high-level in-person talks were held between China and the US, including Secretary of State Antony Blinken, China’s top diplomat, Yang Jiechi, as well as State Councilor Wang Yi. By the close tomorrow it promises to border on comic shitshow levels given the public haranguing that’s already taken place.

    US national security adviser Jake Sullivan reportedly began the talks by telling his Chinese counterparts that “We do not seek conflict, but we welcome stiff competition, and we will always stand up for our principles, for our people, and for our friends” — noting that on the agenda for the summit is China’s crackdowns in Xinjiang province, Hong Kong and Taiwan, as well as state-sponsored cyber attacks and “economic coercion” of allies. “Each of these actions threaten the rules-based order that maintains global stability,” Sullivan underscored. He added that the “alternative” is a winner-take-all world that would be inevitably more “violent and unstable”. 

    As many commentators have been pointing out given the increased obviousness, there’s no daylight whatsoever between Trump’s prior China policies so heavily criticized by the Democrats and the hard-line on Beijing now clearly being pursued by Biden. For example, Bloomberg writes, “Coming into the meeting, it was increasingly clear that despite Biden’s criticism of former President Donald Trump, he’s unlikely to make major changes to his predecessor’s hard-line approach to China. On human rights in Xinjiang , on Hong Kong’s and even on tariffs, Trump-era policies remain in place.”

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

    Chinese Communist Party foreign affairs chief Yang Jiechi wasn’t impressed, going on an epic tirade filled with a litany of American “abuses” meant to answer every one of Washington’s recent criticisms of Beijing and then some. He ran with Blinken and Sullivan’s “human rights” theme and turned it around, seeking to call out Washington ‘hypocrisy’ on every point, even down to treatment of Black Americans (which presumably was Yang’s intended parallel to ethnic Uighurs).

    Here’s a recap of his introductory remarks:

    …Yang hit back, accusing the United States of using its military might and financial supremacy to pressure countries and of abusing national security to threaten the future of international trade.

    He said Xinjiang, Hong Kong and Taiwan were all inseparable parts of Chinese territory and China firmly opposed US interference in its internal affairs.

    Yang said human rights in the United States were at a low point with Black Americans being “slaughtered” and added that the United States should handle its own affairs and China its own.

    Yang said it was necessary to abandon a “Cold War mentality,” and confrontation and added:

    “The way we see the relationship with the United States is as President Xi Jinping has said, that is we hope to see no confrontation, no conflict, mutual respect and win-win cooperation with the United States.”

    So there was at least a brief positive included by the end of his intro. Yang had further fired back at Washington’s charges that in reality “the US is the champion of cyberattacks”.

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

    And as predicted it was the Biden administration’s last minute sanctions a mere hours before the Chinese delegation was due to touch down in Anchorage which ensured there would be sparks from the very start. Wednesday evening new sanctions were slapped on 24 Chinese and Hong Kong officials over the anti-democratic crackdown and election overhaul of last week. State Councilor Wang Yi had lashed out in remarks from Alaska saying the new sanctions are “not the way to welcome guests”. 

    Unfazed, Secretary of State Antony Blinken batted down the litany of Chinese counter-complaints, quipping that US-China talks “should be filled with lecture”. Yang, however, asserted that the United States “doesn’t speak to China from a position of strength” while also somewhat dramatically positing that it’s “impossible to strangle the Chinese people”.

    Ultimately, no one expected too much to come out of these talks, with China’s ambassador to the United States Cui Tiankai earlier posting a statement to the web saying as much: “Naturally, we don’t expect one round of dialogue will resolve all the issues between China and the U.S. and we don’t hold overly high hopes,” according to the Chinese embassy in Washington’s website.

    “My wish is that this can be a start and that the two sides can begin a dialogue process that is candid, constructive and realistic,” Cui said. “If we can achieve that, I think this exchange will be successful.”

    But at this point on day-one… “constructive” is looking like it already went out the window.

    Tyler Durden
    Thu, 03/18/2021 – 19:39

  • Greenwald: Journalists, Illustrating How They Operate, Spread A Significant Lie All Over Twitter
    Greenwald: Journalists, Illustrating How They Operate, Spread A Significant Lie All Over Twitter

    Authored by Glenn Greenwald via greenwald.substack.com

    Hunter Biden (L) and then-Vice President Joe Biden speak on stage at Organization of American States on April 12, 2016 in Washington, DC. (Photo by Teresa Kroeger/Getty Images for World Food Program USA)

    Journalists with the largest and most influential media outlets disseminated an outright and quite significant lie on Tuesday to hundreds of thousands of people, if not millions, on Twitter. While some of them were shamed into acknowledging the falsity of their claim, many refused to, causing it to continue to spread up until this very moment. It is well worth examining how they function because this is how they deceive the public again and again, and it is why public trust in their pronouncements has justifiably plummeted.

    The lie they told involved claims of Russian involvement in the procurement of Hunter Biden’s laptop. In the weeks leading up to the 2020 election, The New York Post obtained that laptop and published a series of articles about the Biden family’s business dealings in Ukraine, China and elsewhere. In response, Twitter banned the posting of any links to that reporting and locked The Post out of its Twitter account for close to two weeks, while Facebook, through a long-time Democratic operative, announced that it would algorithmically suppress the reporting.

    The excuse used by those social media companies for censoring this reporting was the same invoked by media outlets to justify their refusal to report the contents of these documents: namely, that the materials were “Russian disinformation.” That claim of “Russian disinformation” was concocted by a group of several dozen former CIA officials and other operatives of the intelligence community devoted to defeating Trump. Immediately after The Post published its first story about Hunter Biden’s business dealings in Ukraine that traded on his influence with his father, these career spies and propagandists, led by Obama CIA Director and serial liar John Brennan, published a letter asserting that the appearance of these Biden documents “has all the classic earmarks of a Russian information operation.”

    News outlets uncritically hyped this claim as fact even though these security state operatives themselves admitted: “We want to emphasize that we do not know if the emails…are genuine or not and that we do not have evidence of Russian involvement — just that our experience makes us deeply suspicious that the Russian government played a significant role in this case.” Even though this claim came from trained liars who, with uncharacteristic candor, acknowledged that they did not “have evidence” for their claim, media outlets uncritically ratified this assertion.

    This was a topic I discussed extensively in October when I announced my resignation from The Intercept after senior editors — for the first time in seven years — violated the contractual prohibition on editorial interference in my journalism by demanding I significantly alter my reporting about these documents by removing the sections that reflected negatively on Biden. What I found particularly galling about their pretense that they have such high-level and rigorous editorial standards — standards they claimed, for the first time ever, that my article failed to meet — was that a mere week prior to their censorship of my article, they published an article by a different journalist which, at a media outlet we created with the explicit purpose of treating government claims with skepticism, instead treated the CIA’s claims of “Russian disinformation” as fact. Even worse, when they quoted the CIA’s letter, they omitted the part where even those intelligence agents acknowledged that they had no evidence for their assertion. From The Intercept on October 21:

    Their latest falsehood once again involves Biden, Ukraine, and a laptop mysteriously discovered in a computer repair shop and passed to the New York Post, thanks to Trump crony Rudy Giuliani….. The U.S. intelligence community had previously warned the White House that Giuliani has been the target of a Russian intelligence operation to disseminate disinformation about Biden, and the FBI has been investigating whether the strange story about the Biden laptop is part of a Russian disinformation campaign. This week, a group of former intelligence officials issued a letter saying that the Giuliani laptop story has the classic trademarks of Russian disinformation.

    Oh my, marvel at those extremely rigorous editorial standards: regurgitating serious accusations from ex-CIA operatives without bothering to note that they were unaccompanied by evidence and that even those agents admitted they had none. But, as they usually do these days, The Intercept had plenty of company in the corporate media.

    That those materials were “Russian disinformation” became so reflexively accepted by the U.S. media that it became the principal excuse to ignore and even censor the reporting, and it also helpfully handed the Biden campaign an easy excuse to avoid answering any questions about what the documents revealed. “I think we need to be very, very clear that what he’s doing here is amplifying Russian misinformation,” said Biden Deputy Campaign Manager Kate Bedingfield when asked about the prospect that Trump would raise the Biden emails at the debate. From the CIA’s lips to the mouths of corporate journalists into the hands of the Biden campaign.

    As the U.S. media disseminated this “disinformation” tale, nobody — including the Bidens — has ever claimed let alone demonstrated that a single document was anything other than genuine — something that would be exceedingly easy to do if the documents were fraudulent. “The Biden team has rejected some of the claims made in the NY Post articles, but has not disputed the authenticity of the [laptop] files upon which they were based,” acknowledged The New York Times. Ample evidence corroborates that the documents are genuine.

    As for the claims of Russian involvement in the laptop story, there was never any evidence for it: none. The CIA operatives who invented that storyline acknowledged that. The week that tale emerged, The New York Times reported that “no concrete evidence has emerged that the laptop contains Russian disinformation” and the paper said even the FBI has “acknowledged that it had not found any Russian disinformation on the laptop.” The Washington Post published an op-ed by Russia fanatic Thomas Rid who candidly pronounced: “We must treat the Hunter Biden leaks as if they were a foreign intelligence operation — even if they probably aren’t.” And the only time the U.S. Government has ever spoken on this question was when the Director of National Intelligence stated: “Hunter Biden’s laptop is not part of some Russian disinformation campaign.”

    These documents raised important questions about the presidential frontrunner’s knowledge of or participation in his family members’ attempt to profit off of their association with him, questions implicating his integrity, ethics and honesty. Yet those documents were suppressed by a gigantic fraud, perpetrated by the CIA and their media allies, which claimed that the documents were forged and that they came from Russia.

    That is the critical context for the lie spread yesterday by numerous mainstream journalists. On Tuesday morning, the Office of the Director of National Intelligence declassified a short 12-page report entitled “Foreign Threats to the U.S. 2020 Elections.”

    It reviewed the actions of numerous countries with regard to the 2020 election. The intelligence community claimed — without presenting any evidence whatsoever — that “Russian President Putin authorized…influence operations aimed at denigrating President Biden’s candidacy and the Democratic Party, supporting former President Trump, undermining public confidence in the electoral process, and exacerbating sociopolitical divisions in the U.S.” The New York Times’ largely credulous article about this report contained this admission, one you would think (or, rather, hope) would matter to journalists: “The declassified report did not explain how the intelligence community had reached its conclusions about Russian operations during the 2020 election.”

    Despite that glaring omission, media outlets predictably treated the evidence-free assertions from the security state as fact. “Vladimir Putin did it again,” trumpeted Mother Jones’ David Corn without an iota of skepticism. CNN’s Marshall Cohen actually said this:

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

    Think about that: to a CNN reporter, evidence-free assertions from the U.S. security state are tantamount to “confirmation.” That they really do think this way is nothing short of chilling. But that is the standard liberal media posture of harboring reverence for the U.S. intelligence community and treating its every utterance as Truth without the need for any corroborating evidence. It is one of their defining attributes.

    But in this case, many of them went far beyond mere regurgitation of CIA claims. Well beyond it: here, they fabricated a claim that report also demonstrated that the Hunter Biden laptop materials were — as they claimed before the election — engineered by Russia. In reality, the report did not even mention the Hunter Biden laptop materials or allude to it, let alone claim that it was produced by the Kremlin, let alone supply evidence that it constituted “Russian disinformation.” But no matter: numerous journalists united to spread the false claim far and wide that the report confirmed this storyline.

    The first journalist to publish the falsehood was Patrick Tucker, an editor at the journal Defense One. The tweet quickly went viral as liberals clicked “retweet” and “like” so fast that at least several of them likely suffered digital cartilage damage or at least a mild sprain:

    The claim that this report corroborated Russian involvement in the Hunter laptop story picked up significant steam when MSNBC host Chris Hayes endorsed it to his 2.3 million followers:

    From there, the claim was further spread by Hayes’ NBC News colleague Ben Collins, who — ironically — works in what the network calls the “disinformation unit,” combatting the spread of disinformation (by which Collins means tattling on 4Chan teenagers and Facebook boomers, while never challenging the lies of real power centers such as those from the intelligence community; those lies are ones he amplifies):

    With this MSNBC host and the NBC disinformation agent on board, it was off to the races. Journalists from across the corporate media sphere spread this lie over and over. Here was CNN’s Asha Rangappa:

    Perhaps the most embarrassing example was from S.V. Daté, the White House correspondent of HuffPost which, just last week, had dozens of its reporters laid off perhaps because, while they have numerous talented reporters, this is the sort of thing they routinely do, causing them to lose trust among the public. Daté did not just repeat the lie but used it to mock those who actually did the reporting on these documents (note that the section he underlined in red says nothing about the Hunter Biden documents, nor does it say anything about Russia other than it “amplified” various news stories):

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

    As this false claim went massively viral, conservative journalists — and only they — began vocally objecting that the report made no mention whatsoever of the Hunter Biden laptop, let alone supplied proof for this claim. That is because, with a few noble exceptions (such as The Washington Post’s media critic Erik Wemple), liberal journalists at corporate outlets will eagerly endorse but never denounce or correct each other’s falsehoods. For that reason, if you confine yourself to the liberal corporate media bubble, and refuse to follow conservative journalists as well, you will be propagandized and deceived.

    Hayes, to his credit, was one of the only journalists who helped spread this falsehood and then quickly retracted it. He first acknowledged that, upon reading the report, it did not appear that it actually made any reference to the Hunter laptop, and then announced he would delete his original tweet, conceding that the original claim was false. Note how the original false claims go mega-viral, while the tweets which subsequently acknowledge their falsity are seen by very few people:

    With one of his earliest boosters having jumped ship, Tucker himself, the originator of this lie, first began backtracking while vowing he would never delete the tweet, only to then relent and delete it, acknowledging its falsity. Again compare the meager audience that learns of the backtracking and acknowledgment of falsity compared to the huge number exposed to the original false claim:

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

    Thanks to multiple journalists with large platforms spreading Tucker’s original false tweet, it received thousands upon thousands of likes and re-tweets. So, too, did the tweets of other journalists promoting that false claim, such as the one from HuffPost’s White House Correspondent, and this one from one of David Brock’s goons specifically claiming that the security state’s evidence-free report somehow proves that my pre-election reporting on it was wrong. Yet Tucker’s announcement that he was deleting his tweet on the ground that the report does not make “explicit reference to the Hunter Biden laptop story” has a grand total of three retweets.

    Indeed, other than Hayes, it is difficult to find a journalist who acknowledged that what they spread was a lie. Both CNN’s Rangappa and NBC News’ Collins simply allowed the tweet to quietly disappear from their timeline when Tucker finally deleted his, saying nothing to the thousands or tens of thousands of people they misled. Meanwhile, the tweet from HuffPost’s Daté is still up a full twenty-four hours after the key journalists who spread this have acknowledged it was false.

    Do you see how they behave? Take a look. Prior to the election, out of desperation to ensure that Biden won, they censored and maligned this reporting by mindlessly endorsing an assertion from life-long CIA operatives that never had any evidence: ignore these documents; they are Russian disinformation. They not only invoked that claim to justify ignoring the story but also to successfully agitate for its censorship by Twitter and Facebook. So they spent weeks spreading an utter lie in order to help the candidate that they favored win the election. Remember, these are journalists doing that.

    Then, yesterday, the intelligence community issued a report that does not even purport to contain any evidence: just assertions. And they all jumped to treat it as gospel: no questioning of it, no skepticism, no demands to see evidence for it, not even any notation that no evidence was provided. They just instantly enshrined claims from the CIA and NSA as Truth. How can you possibly be a journalist with even minimal knowledge of what these agencies do and look in the mirror as you do this?

    But so much worse, in this case, they just outright lied about what the report said — just fabricated assertions that the report did not even allude to, in order to declare their lies from last October to be vindicated. Even if this report had asserted that the Hunter Biden laptop materials were manufactured by the Kremlin, that would prove nothing. Evidence-free assertions from the U.S. intelligence community merit skepticism, not blind faith — especially from people calling themselves journalists.

    But the report did not even claim that. And when some of them realized this, they did virtually nothing to rectify the severe disinformation they had spent the day spreading. These are the people who claim to be so profoundly opposed to conspiracy theories and devoted to combating “disinformation”; as usual, they are the ones who spread disinformation most recklessly and frequently.

    The fact that the false tweet from HuffPost’s White House correspondent is still up is quite revealing, given that that outlet just had to lay off a significant portion of its staff. As newly arrived Substack writer Michael Tracey wrote in his first article on this platform (headlined: “Why Journalists Hate Substack”), journalists are very good at lamenting when their outlets are forced to lay off journalists but very poor at examining whether the content their outlet is producing may be part of why it is failing:

    So when you see another round of layoffs, followed by another round of exasperated Twitter lamentation about how horrible the industry is, you have to wonder if these rituals ultimately function as an excuse for journalists to forgo any kind of real self-examination. For instance, why it is that the media organizations they inhabit always seem to be in a constant state of free-fall? Sure, there are economic factors at play that the journalists themselves cannot control. But it would seem to behoove these journalists to maybe spend a little bit less time complaining in the abstract about the depredations of “the industry”—as though they are its hapless, beleaguered casualties—and a little bit more time analyzing whether they have contributed to the indisputable reality that huge cross-sections of the public distrust and despise the media.

    There are multiple potential explanations for this dynamic worth considering. Maybe it’s the tedious hyper-partisanship and weirdly outdated content aggregation tactics that much of the online media still employs. Maybe it’s the constant five-alarm-fire tone and incessant hyping of overblown threats that was characteristic of the Trump years. Maybe it’s some combination of all these and more—but you won’t see many axed journalists offering up any kind of critical introspection, because when the layoffs arrive it can never have anything to do with their own ideological myopia or other shortcomings.

    Indeed, when anyone, including journalists, loses their job, it is lamentable. But when one witnesses behavior like what these journalists did yesterday, the only confounding part of the collapse of this part of the media industry is that it is not happening even more quickly and severely.

    Tyler Durden
    Thu, 03/18/2021 – 19:20

  • These US Cities Have The Most (And Fewest) Homes For Sale
    These US Cities Have The Most (And Fewest) Homes For Sale

    2020 was a wild year for the American real-estate market. Markets like NYC and San Francisco, which had formerly been among the hottest in the world, saw valuations crater as millions fled to the suburbs, or otherwise left urban markets, seeking space and solitude during a pandemic that made people anxious about their neighbors.

    An initial halt in transactions during the first week or two of the lockdown last March gave way to a frenzied market, as stimulus money and the Fed’s decision to slash rates to zero while increasing its purchases of MBS and Treasury bonds drove prices higher in smaller cities and towns across the country.

    But despite strong demand from buyers, the market hasn’t seen supply keep pace. The ripple effect of the pandemic has made many would-be sellers wary. This decline in inventories just as demand appears to peak is helping to drive prices even higher.

    In a study, the Inspection Support Network has published a study of which metropolitan markets have the most homes for sale.

    Another symptom of this dynamic is that homes sell faster, often within days of hitting the market.

    Unsurprisingly given the never-ending development boom in the Sunshine State, Florida has more available inventory than any other state in the union. That will come in handy as tax hikes in deep-blue states send more snowbirds scurrying for the sunny weather and low tax rates.

    In fact, many of the metropolitan areas with the most homes for sale are spread across Florida, and elsewhere in the Southeastern US. Panama City, a popular spring-break destination, ranked No. 1 on ISN’s list of small metros with the most and least homes for sale.

    Naples, situated on Florida’s southern Gulf Coast, ranked No. 1 for medium-sized cities.

     

    Miami and Atlanta topped the list for large metros, followed by

    • NYC
    • Las Vegas
    • Jacksonville
    • Houston
    • San Antonio
    • Orlando
    • Virginia Beach
    • Tampa

    With all this inventory, states like South Carolina, Georgia, Texas, Las Vegas and Florida are beckoning to Midwesterners and New Englanders who are tired of high taxes and lingering COVID restrictions.

    Tyler Durden
    Thu, 03/18/2021 – 19:00

  • A "Vicious, Brutal Day": Four Traders Respond To Today's Market Chaos
    A “Vicious, Brutal Day”: Four Traders Respond To Today’s Market Chaos

    It wasn’t supposed to be like this.

    One day after Powell basically told markets that the Fed will not get in the way of the biggest asset bubble every blown for the next two years, stocks initially opened higher near all time highs only to drift all day as hapless traders watched as the SPX shed 1.5% – its worst drop in three weeks and the Nasdaq 100 fell 3.1%, erasing its gain for the year. 

    This, as SpotGamma writes, was a very atypical high gamma day, and as we have repeatedly cautioned, the negative gamma QQQ trade and weakness in tech is really dragging the S&P.

    Making matters worse, tomorrow’s quad-witch will only lead to an even more volatile market: on one hand, the S&P was on the zero gamma threshold which still implies a 3900-3950 pin is in play, but the larger issue is that due to the QQQs closing in negative gamma territory again, the Nasdaq is “poised for a lot of volatility tomorrow due to that large negative gamma position. Because tech is such a large piece of the S&P there is a lot of overlap here and we need to mentally “blend” these crosscurrents” according to SpotGamma.

    Finally, as shown in spotgamma’s QQQ vanna chart below, the “slope” of hedging is quite high, which suggests that dealers have a lot to sell if markets drop, and a lot to buy back if markets rip.

    Today’s bloodbath wasn’t contained to stocks however, and the violent drop came as bond yields rose – leading to even more risk parity pain – while oil prices plunged on concern about the impact of European lockdowns on demand. In short, as Bloomberg summarizes, it was a “brutal day”:

    So as traders prepare for what may be another painful quad-witching, one where the amount of expirations will be lower than usual…

    but where liquidity will be dismal…

    … here is what four of them are saying, courtesy of Bloomberg:

    Larry Weiss, head of equity trading at Instinet LLC in New York:

    It’s a bit of everything, rotation continues out of the crowded tech sector and small caps giving up some recent gains. Ahead of major index rebalance activity tomorrow, volumes are a bit light, exacerbating the moves. Oil is a factor, and inflation fears — despite the Fed Chair’s calls for rate stability through 2023 — remain a concern.

    Adam Phillips, director of portfolio strategy at EP Wealth Advisors:

    This appears to be a delayed response to yesterday’s FOMC meeting. Jay Powell has made it clear that investors are on their own for now when it comes to higher yields, so even if bonds appear oversold, yields may still have further to go. That being said, the pressure on the Fed will only grow as economic data strengthens in the months ahead.

    Chris Grisanti, chief equity strategist at MAI Capital Management:

    The market is voting right now that we are out of tech and into cyclical, energy and financials.The viciousness and the rapidity of it surprises me but the direction of it doesn’t. It really did seem to grow on itself today. Bonds yields just kind of leaped. Inflation is spooking the market. Companies that would do well with higher rates are clearly out-performing. Powell is saying, take me at face value, we’re going to keep rates low — that’s terrific for economic growth but it scares the bond vigilantes that there will be too much and it will turn into inflation.

    Mike Bailey, director of research at FBB Capital Partners:

    It’s as simple as yields up, growth bad. We’re seeing a pattern where an uncomfortable spike in the 10-year Treasury reminds equity investors that their tech stocks are trading well above average, with cyclicals looking more attractive. This spurt in Treasury yields will settle down and equity investors will come back to tech and growth, but it may take a few trading days.

    Finally, for those who missed it, here is our preview of Quad-Witch: Here Are The Stocks With The Biggest Call And Put Gamma Imbalance

    Tyler Durden
    Thu, 03/18/2021 – 18:40

Digest powered by RSS Digest