- Watchdog Group Launches Investigation Into Biden’s 'Woke Army'
Watchdog Group Launches Investigation Into Biden’s ‘Woke Army’
Authored by Savannah Hulsey Pointer via The Epoch Times (emphasis ours),
The Foundation for Government Accountability (FGA) is launching an investigation into a recent executive order the group called an “unprecedented scheme” they believe violates the democratic process.
US President Joe Biden discusses his efforts to reduce gun violence at The Boys & Girls Club of West San Gabriel Valley, in Monterey Park, Calif. on Mar. 14, 2023. (JIM WATSON/AFP via Getty Images) In a press release, FGA said they are “sounding the alarm” on the “‘woke army’ being assembled inside the federal government,” through Executive Order 14091 (EO), titled “Executive Order Further Advancing Racial Equity and Support for Underserved Communities Through The Federal Government.”
FGA announced that their investigation will include filing Freedom of Information Act (FOIA) requests targeting the 23 agencies addressed in the Equity EO, including the Departments of State, Justice, Defense, Labor, Transportation, Social Security, Education, and Health and Human Services.
The group will share the information they gather with Congress, the states, and the American people, according to their press release.
FGA asserted that the plan (pdf) was developed by a left-wing activist group, and said it was “designed to circumvent the normal, democratic process and instead force their ideology onto Americans.”
Tarren Bragdon, FGA President and CEO said of the executive order, “These equity teams are a Trojan horse planted in the heart of every federal agency to fundamentally change decision-making across the bureaucracy. Their goal is to continuously and permanently embed Left-wing ideology into every agency action.
“We cannot allow this new ‘woke army’ to force un-American philosophy into all corners of our federal government. They will degrade our nation’s capabilities and effectiveness, while undermining our liberty and security.”
“We’ve seen the economic devastation over the first two years of the Biden presidency. If radical ideology is ingrained into every policy and regulatory decision at all agencies, the impact on the American people and economy will be widespread, devastating, and impossible to reverse,” Bragdon added.
Bragdon referenced part of Section 2 of the order, which outlines the requirement that agency heads across the administration ensure they place an “Agency Equity Team” within their agencies to “coordinate the implementation of equity initiatives,” in order to deliver “equitable outcomes” to the American people.
Stewart Whitson, FGA legal director spoke to the issue, saying “The clock is ticking on President Biden’s term. And the radical forces inside his administration and their partners on the outside know they have limited time to embed their ‘leaders and practitioners’ into every federal agency before they lose power. If successful, this ‘woke army’ will outlast the Biden presidency and become a permanent fixture deeply entrenched in our government.”
“Through this investigation, FGA is fighting to expose this attempted ideological takeover of our federal agencies, and we won’t stop until we’ve uncovered the truth. We will share the information we uncover with Congress, the states, and the American people so that, together, we can help stop this unconstitutional effort before it’s too late.”
The White House did not immediately respond to The Epoch Times’s request for comment.
Tyler Durden
Sat, 03/18/2023 – 23:30 - Visualizing The Largest Cities Throughout History
Visualizing The Largest Cities Throughout History
For much of human history, most people did not live in cities.
As Visual Capitalist’s Pallavi Rao details below, cities – settlements that are densely populated and self-administered – require many specific prerequisites to come into existence. The most crucial, especially for much of human history, is an abundance of food.
Surplus food production leads to denser populations and allows for people to specialize in other skills that are not associated with basic human survival.
But that also means that cities usually consume more primary goods than they produce. And their size requires a host of many other services – such as transport and sanitation – that are traditionally expensive to maintain. So maintaining large urban centers, and especially the world’s largest cities, was a monumental task.
Mapper and history YouTuber Ollie Bye has visualized the seven largest cities in the world since 3,000 BCE. His video covers cities with a minimum population of 10,000 and hints at historical events which led to the establishment, growth, and eventual fall of cities.
The World’s Largest City Throughout History
With any historical data, accuracy is always a concern, and urban populations were rough and infrequent estimates up until the Industrial Revolution.
Bye has used a variety of data sources—including the UN and many research papers—to create the dataset used in the video.
In some places he also had to rely on his own estimates and criteria to keep the data reasonable and consistent:
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In early history, some cities didn’t have given population estimates for long periods of time, and had to be equalized or estimated through other sources. For example, Babylon had a population estimate at 1,600 BCE (60,000) and at 1,200 BCE (75,000) but none in the 400 years between.
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Cities that only briefly climbed above a population of 10,000, or that would have made the largest cities ranking for only a couple of years (and based on uncertain estimates), were not included.
Here’s a look at the largest city starting from the year 3,000 BCE, with populations listed in millions during the last year of each city’s “reign.” Cities are also listed with the flags of current-day countries in the same location.
Time Period Largest City Population (Millions) Country 3000-2501 BCE Uruk 0.08 Iraq 🇮🇶 2500-2251 BCE Lagash 0.06 Iraq 🇮🇶 2250-2001 BCE Girsu 0.08 Iraq 🇮🇶 2000-1751 BCE Isin 0.04 Iraq 🇮🇶 1750-1251 BCE Babylon 0.06 Iraq 🇮🇶 1250-1001 BCE Pi-Ramesses 0.16 Egypt 🇪🇬 1000-601 BCE Thebes 0.12 Egypt 🇪🇬 600-301 BCE Babylon 0.20 Iraq 🇮🇶 300-201 BCE Carthage 0.40 Tunisia 🇹🇳 200 BCE-270 CE Alexandria 0.60 Egypt 🇪🇬 271-350 CE Rome 0.39 Italy 🇮🇹 351-500 CE Constantinople 0.49 Turkey 🇹🇷 501-640 CE Ctesiphon 0.50 Iraq 🇮🇶 641-644 CE Constantinople 0.40 Turkey 🇹🇷 645-795 CE Chang’an 0.59 China 🇨🇳 796-963 CE Baghdad 1.10 Iraq 🇮🇶 964-975 CE Constantinople 0.32 Turkey 🇹🇷 976-984 CE Córdoba 0.33 Spain 🇪🇸 985-1144 CE Bian 0.44 China 🇨🇳 1145-1199 CE Constantinople 0.24 Turkey 🇹🇷 1200-1275 CE Lin’an 0.36 China 🇨🇳 1276-1278 CE Cairo 0.37 Egypt 🇪🇬 1279-1315 CE Hangzhou 0.43 China 🇨🇳 1316-1348 CE Cairo 0.50 Egypt 🇪🇬 1349-1353 CE Hangzhou 0.43 China 🇨🇳 1344-1380 CE Cairo 0.35 Egypt 🇪🇬 1381-1394 CE Vijayanagara 0.36 India 🇮🇳 1395-1426 CE Yingtian 0.50 China 🇨🇳 1427-1441 CE Vijayanagara 0.44 India 🇮🇳 1442-1612 CE Beijing 0.70 China 🇨🇳 1613-1678 CE Constatinople 0.74 Turkey 🇹🇷 1679-1720 CE Dhaka 0.78 Bangladesh 🇧🇩 1721-1826 CE Beijing 1.30 China 🇨🇳 1827-1918 CE London 7.40 UK 🇬🇧 1919-1954 CE New York 13.20 U.S. 🇺🇸 1955-Present Tokyo 37.30 Japan 🇯🇵 Ancient Cities in the Fertile Crescent
Considered the “cradle of civilization,” the Fertile Crescent in the Middle East was home to all seven of the largest cities in the world in 3,000 BCE.
The Sumerian city of Uruk (modern-day Iraq), allegedly home to the legendary king Gilgamesh, topped the list with 40,000 people. It was followed by Memphis (Egypt) with 20,000 inhabitants.
For the next 1,700 years, other Mesopotamian cities in modern-day Iraq and Syria held pole positions, growing steadily and shuffling between themselves as the largest.
2,250 BCE marked the first time a different Asian city—Mohenjo-Daro (modern-day Pakistan) from the Indus Valley Civilization—found a spot at #4 with 40,000 people.
The table below is a quick snapshot of the seven largest cities in the world for from 3,000 BCE to 200 CE. Again, populations are listed in millions.
Rank 3000 BCE 2250 BCE 1250 BCE 200 CE 1 Uruk (0.04) 🇮🇶 Girsu (0.08) 🇮🇶 Pi-Ramesses (0.16) 🇪🇬 Alexandria (0.60) 🇪🇬 2 Memphis (0.02) 🇪🇬 Mari (0.05) 🇸🇾 Yin (0.12) 🇨🇳 Pataliputra (0.35) 🇮🇳 3 Umma (0.02) 🇮🇶 Umma (0.04) 🇮🇶 Thebes (0.08) 🇪🇬 Carthage (0.20) 🇹🇳 4 Nagar (0.02) 🇸🇾 Mohenjo-daro (0.04) 🇵🇰 Sapinuwa (0.07) 🇹🇷 Luoyang (0.20) 🇨🇳 5 Lagash (0.02) 🇮🇶 Akkad (0.03) 🇮🇶 Babylon (0.07) 🇮🇶 Seleucia (0.20) 🇮🇶 6 Larak (0.01) 🇮🇶 Uruk (0.03) 🇮🇶 Hattusa (0.06) 🇹🇷 Pergamon (0.20) 🇹🇷 7 Eridu (0.01) 🇮🇶 Memphis (0.03) 🇪🇬 Uruk (0.03) 🇮🇶 Taxila (0.10) 🇮🇳 It wasn’t until 1,250 BCE that the top two spots were taken by cities in different regions: Pi-Ramesses (Egypt) and Yin (China), both with more than 100,000 residents.
Egyptian cities would continue to be the most populous for the next millennium—briefly interrupted by Carthage and Babylon—until the start of the Common Era. By 30 CE, Alexandria was the largest city in the world, but the top 10 had representatives from the Middle East, Northern Africa, and Asia.
All Roads Lead to Rome
One city in Europe meanwhile, was also beginning to see steady growth—Rome.
It took until halfway through the 3rd century C.E. for Rome to become the most populous city, followed closely still by Alexandria (Egypt). Meanwhile in Iraq, Ctesiphon, the capital of the Sasanian empire was growing rapidly.
Rank 271 CE 351 CE 501 CE 645 CE 1 Rome (0.39) 🇮🇹 Constantinople (0.29) 🇹🇷 Ctesiphon (0.41) 🇮🇶 Chang’an (0.38) 🇨🇳 2 Alexandria (0.37) 🇪🇬 Ctesiphon (0.25) 🇮🇶 Constantinople (0.40) 🇹🇷 Constantinople (0.32) 🇹🇷 3 Luoyang (0.20) 🇨🇳 Rome (0.24) 🇮🇹 Luoyang (0.20) 🇨🇳 Kanyakubja (0.24) 🇮🇳 4 Vaishali (0.17) 🇮🇳 Pataliputra (0.22) 🇮🇳 Teotihuacan (0.15) 🇲🇽 Luoyang (0.21) 🇨🇳 5 Carthage (0.16) 🇹🇳 Luoyang (0.20) 🇨🇳 Jiankang (0.15) 🇨🇳 El Pilar (0.17) 🇧🇿 6 Teotihuacan (0.14) 🇲🇽 Vaishali (0.16) 🇮🇳 Caracol (0.14) 🇧🇿 Ctesiphon (0.41) 🇮🇶 7 Antioch (0.12) 🇹🇷 Teotihuacan (0.15) 🇲🇽 Chang’an (0.10) 🇨🇳 Teotihuacan (0.15) 🇲🇽 Towards the end of the 3rd century, the Roman empire was divided into two, with Constantinople becoming the new capital for the Eastern half. Consequently, it had outgrown Rome by 353 and become the world’s most populous city, and for the next few centuries would reclaim this title time and time again.
The Largest Cities Reach 1 Million
In the 9th century, Baghdad became the first city to have 1 million residents (though historians also estimate Rome and the Chinese city of Chang’an may have achieved that figure earlier).
It would be nearly nine centuries until a city had one million inhabitants again, and Baghdad’s reign didn’t last long. By the 10th century, Bian, the capital of the Northern Song dynasty in China, had become the largest city in the world, with Baghdad suffering from relocations and shifting political power to other cities in the region.
Rank 850 CE 985 CE 1316 CE 1381 CE 1 Baghdad (1.00) 🇮🇶 Bian (0.35) 🇨🇳 Cairo (0.44) 🇪🇬 Vijayanagara (0.36) 🇮🇳 2 Chang’an (0.60) 🇨🇳 Cordoba (0.33) 🇲🇽 Hangzhou (0.43) 🇨🇳 Cairo (0.35) 🇪🇬 3 Constantinople (0.27) 🇹🇷 Constantinople (0.32) 🇹🇷 Dadu (0.40) 🇨🇳 Paris (0.29) 🇫🇷 4 Kanyakubja (0.21) 🇮🇳 Angkor (0.18) 🇰🇭 Paris (0.25) 🇫🇷 Yingtian (0.27) 🇨🇳 5 Luoyang (0.20) 🇨🇳 Baghdad (0.17) 🇮🇶 Kamakura (0.20) 🇯🇵 Hangzhou (0.23) 🇨🇳 6 Bian (0.17) 🇨🇳 Kyoto (0.15) 🇯🇵 Guangzhou (0.15) 🇨🇳 Beiping (0.15) 🇨🇳 7 Cordoba (0.16) 🇲🇽 Cairo (0.12) 🇪🇬 Fez (0.14) 🇲🇦 Tabriz (0.14) 🇮🇷 From the 12th century onwards, Mongol invasions in the Middle East and Central Asia severely limited population growth in the region. European cities too were ravaged in the 14th century, but by plagues instead of marauders.
For the next few hundred years, Cairo (Egypt), Hangzhou (China), and Vijayanagara (India) would top the list until Beijing took (and mostly held onto) the top spot through the 19th century.
Industrial Revolution and Rapid Urbanization
The start of the Industrial Revolution in the UK—spreading to the rest of Europe and later on the U.S.—led to hitherto unseen levels of urban population growth.
Factories needed labor, which caused mass emigration from the rural countryside to urban centers of growth.
In 1827, London passed Beijing to become the largest city in the world with 1.3 million residents. Over the next 100 years, its population increased nearly 7 times, remaining the most populous city until the end of World War I, by which time it was overtaken by New York.
Rank 1442 1851 1919 1955 1 Beijing (0.51) 🇨🇳 London (2.2) 🇬🇧 New York (7.6) 🇺🇸 Tokyo (13.7) 🇯🇵 2 Vijayanagara (0.44) 🇮🇳 Beijing (1.6) 🇨🇳 London (7.4) 🇬🇧 New York (13.2) 🇺🇸 3 Cairo (0.37) 🇪🇬 Paris (1.3) 🇫🇷 Paris (4.7) 🇫🇷 Osaka (8.6) 🇯🇵 4 Hangzhou (0.24) 🇨🇳 Guangzhou (0.87) 🇨🇳 Tokyo (4.3) 🇯🇵 London (8.2) 🇬🇧 5 Tabriz (0.21) 🇮🇷 Constantinople (0.71) 🇹🇷 Berlin (3.7) 🇩🇪 Paris (6.7) 🇫🇷 6 Nanjing (0.18) 🇨🇳 Edo (0.78) 🇯🇵 Chicago (2.9) 🇺🇸 Buenos Aires (5.9) 🇦🇷 7 Granada (0.15) 🇪🇸 New York (0.56) 🇺🇸 Vienna (1.9) 🇦🇹 Moscow (5.7) 🇷🇺 From 1920 to 2022, the world population quadrupled thanks to improvements in farming and healthcare, and cities saw rapid growth as well. The beginning of the 20st century saw the top 10 largest cities in the world in the U.S., Europe, and Japan.
By the 21st century however, growth shifted away to other parts of the world and by 2021, the top seven had cities only from Asia and the Americas.
Rank 1970 1990 2000 2021 1 Tokyo (23.2) 🇯🇵 Tokyo (32.7) 🇯🇵 Tokyo (34.3) 🇯🇵 Tokyo (37.3) 🇯🇵 2 New York (16.1) 🇺🇸 Osaka (18.5) 🇯🇵 Osaka (18.6) 🇯🇵 New Delhi (31.1) 🇮🇳 3 Osaka (15.2) 🇯🇵 New York (16.2) 🇺🇸 Mexico City (18.4) 🇲🇽 Shanghai (27.7) 🇨🇳 4 Mexico City (8.8) 🇲🇽 Mexico City (15.9) 🇲🇽 New York (17.8) 🇺🇸 Sao Paulo (22.2) 🇧🇷 5 Buenos Aires (8.4) 🇦🇷 Sao Paulo (15.0) 🇧🇷 Sao Paulo (17.0) 🇧🇷 Mexico City (21.9) 🇲🇽 6 Los Angeles (8.3) 🇺🇸 Bombay (12.7) 🇮🇳 Mumbai (16.1) 🇮🇳 Dhaka (21.7) 🇧🇩 7 Paris (8.2) 🇫🇷 Buenos Aires (11.2) 🇦🇷 New Delhi (15.6) 🇮🇳 Beijing (20.8) 🇨🇳 Tokyo, which took the top spot in 1954, is the largest city in the world today with a population of 37 million (including the entire metropolitan area).
It is followed by New Delhi with 31 million, but by 2028, the UN estimates that positions will switch on the leaderboard and New Delhi will overtake Tokyo.
What Does Population Growth Say About the Past (and Future)?
The rise and fall of cities through the sands of time can give us insight into the trajectory of civilization growth. As civilizations grow, become richer, and reach their zenith, so too do their cities blossom in tandem.
For example, of the modern-day seven largest cities in the world, four of them belong to countries with the 10 largest economies in the world.
Meanwhile, sudden falls in urban population point to turbulence—political instability, wars, natural disasters, or disease.
Most recently Ukraine’s cities are seeing depopulation as residents flee conflict zones, raising the specter of a demographic crisis for the country should the war continue.
Thus, tracking the size of urban population can help policymakers forecast future roadblocks to growth, especially when prioritizing sustainable growth for a country.
Tyler Durden
Sat, 03/18/2023 – 23:00 -
- 'Conspiracy At Its Height': Fauci Responds To Message Saying He 'Prompted' Anti-Lab Leak Paper
‘Conspiracy At Its Height’: Fauci Responds To Message Saying He ‘Prompted’ Anti-Lab Leak Paper
Authored by Zachary Stieber via The Epoch Times (emphasis ours),
Dr. Anthony Fauci responded on March 15 to a newly released email that said he was among those who “prompted” work on analyzing how COVID-19 came about, which resulted in a paper that claimed the laboratory origin theory was not credible.
Dr. Anthony Fauci, former director of the National Institute of Allergy and Infectious Diseases, on Capitol Hill in Washington on Sept. 14, 2022. (Drew Angerer/Getty Images) A special U.S. House of Representatives panel on March 5 released the email, sent by scientist Kristian Andersen in February 2020 to the journal Nature.
“There has been a lot of speculation, fear mongering, and conspiracies put forward in this space and we thought that bringing some clarity to this discussion might be of interest to Nature,” Andersen wrote at the time. “Prompted by Jeremy Farra[r], Tony Fauci, and Francis Collins, Eddie Holmes, Andrew Rambaut, Bob Garry, Ian Lipkin, and myself have been working through much of the (primarily) genetic data to provide agnostic and scientifically informed hypothesis around the origins of the virus,” Andersen added.
In another message that had previously been made public, Andersen said the work was “focused on trying to disprove any type of lab theory.”
Anderson was one of the co-authors of a paper published without peer review in February 2020. Both that version and one later published by Nature Medicine said the analysis shows that “SARS-CoV-2 is not a laboratory construct nor a purposefully manipulated virus.” SARS-CoV-2 causes COVID-19.
Fauci was asked about the emails on Wednesday during an appearance on NewsNation.
“Absolutely not,” he said when host Chris Cuomo inquired whether the paper was drafted to disprove the lab origin theory.
Fauci referenced the secret phone call involving himself, Andersen, and others that took place on Feb. 1, 2020, and involved several experts—including Andersen—saying characteristics of COVID-19 pointed to it being engineered.
“During the phone call on Feb. 1, where very competent evolutionary biologists were going back and forth, and they decided on the phone call, listen, let’s take a little time and go back and really carefully examine those sequences and see if, in fact, there’s anything to that,” Fauci said.
“They did that and they came to the conclusion that, in fact, it is more likely that it was not something that was engineered, but something that actually escaped from a wet market [in Wuhan, China]. And in order to get it peer reviewed, they wrote a paper to let the peer review system evaluate whether it was valid, and it did and that’s how the paper came about,” Fauci added. “So this idea of saying, write the paper to definitively disprove something is conspiracy at its height. It’s really ridiculous.”
Grateful for ‘Advice and Leadership’
According to other emails made public after being acquired through the Freedom of Information Act, Fauci was involved in looking over drafts of the paper before it was published. In one email, Andersen thanked Fauci and several others “for your advice and leadership as we have been working through the SARS-CoV-2 ‘origins’ paper.”
“Thanks for your note. Nice job on the paper,” Fauci responded.
Fauci’s boss, Dr. Francis Collins, was also thanked. In a later email to Fauci, he said that the lab origin theory was “very destructive” and that he had hoped the paper “would settle this” but that it “probably didn’t get much visibility.”
“I would not do anything about this right now. It is a shiny object that will go away in times,” Fauci wrote. In April 2020, Fauci cited the paper during an official White House press conference without mentioning his involvement, telling reporters that “a group of highly qualified evolutionary virologists looked at the sequences there and the sequences in bats as they evolve and the mutations that it took to get to the point where it is now is totally consistent with a jump of a species from an animal to a human.”
For the natural origin theory to be true, a host animal must have passed the virus on to humans. No such animal has been identified.
Fauci has maintained during recent interviews that he’s kept an open mind as to the origin of COVID-19.
“If that is true, why did Dr. Fauci tell the American people at a White House briefing televised on April 17, 2020, that COVID-19 was ‘totally consistent’ with a natural origin and never mentioned that half the scientists on a February 1, 2020, conference call thought it was a lab leak,” Rep. Debbie Lesko (R-Ariz.), a member of the special U.S. House panel, the Select Subcommittee on the Coronavirus Pandemic, told The Epoch Times via email.
“That doesn’t sound like someone with an open mind. That sounds like someone misleading the American public,” Lesko added.
Read more here…
Tyler Durden
Sat, 03/18/2023 – 22:30 - Air Pollution: A Global Health Threat
Air Pollution: A Global Health Threat
Air pollution is the greatest environmental health hazard to humankind, leading to over six million deaths a year and an economic cost that equates to over $8 trillion dollars.
That’s according to the World Air Quality Report 2022 released Tuesday by Swiss air quality technology company IQAir.
Statista’s Anna Fleck reports that the analysis found that out of a surveyed 131 countries, regions and territories, only 13 met World Health Organization air guidelines of annual PM2.5 concentrations at or below 5 μg/m3 in 2022, many of which were in Oceania.
The following chart shows how greatly air quality varies globally, with cities such as Pakistan’s Lahore (97.4 μg of PM2.5 particles per m3) and India’s Delhi (92.6) both exceeded WHO guidelines more than 10 times. At the other end of the spectrum lie cities such as Reykjavik in Iceland (3.3) and Tallinn in Estonia (4.8) which are among the few that meet guidelines.
You will find more infographics at Statista
Air pollution impacts already vulnerable communities particularly hard, with more than 90 percent of pollution related deaths occurring in low-income and middle-income countries, according to the report. Africa, as well as Central and South Asia were overrepresented for having the highest annual average PM2.5 concentrations weighted by population. This is even including the huge disparities in data availability between countries, with only 19 out of 54 African countries having had sufficient data to be usable in the paper.
IQAir defines PM2.5 concentration as the amount of fine particulate aerosol particles up to 2.5 microns in diameter. It is one of six major air pollutants commonly used in the classification of air quality and widely considered as the most harmful, in terms of its prevalence in the environment and the impacts it has on health. The latter includes causing and aggravating health conditions such as asthma, cancer, lung illness, heart disease and premature mortality.
Tyler Durden
Sat, 03/18/2023 – 22:00 - FBI Is Now A 'Weaponized Apparatchik' Of The Presidential Administration: Whistleblower
FBI Is Now A ‘Weaponized Apparatchik’ Of The Presidential Administration: Whistleblower
Authored by Samantha Flom and Steve Lance via The Epoch Times (emphasis ours),
There’s a growing divide between the rank-and-file officers of the FBI and upper management, according to FBI agent-turned-whistleblower Steve Friend, and it’s those at the top who are pushing a political agenda.
“I spent close to nine years in the FBI, spent a good chunk of my time just keeping my head down and working the cases in front of me,” Friend noted in a March 14 interview with NTD News, The Epoch Times’ sister outlet.
“There are a lot of agents that sort of share that sentiment and just want to drive the mission forward. Unfortunately, there’s a big disconnect between the rank-and-file and the management class, and as you climb that ladder, it’s tending to become more and more political.”
The evidence, Friend said, could be seen in the bureau’s disparate treatment of pro-life activists—like Mark Houck, whose home was raided by the FBI over an altercation outside of a Planned Parenthood—and pro-abortion activists, like those who protested outside of Supreme Court justices’ homes and were never investigated.
“I think there’s an argument to be made that the FBI has now just become a weaponized apparatchik of the presidential administration,” he added, holding that public trust in the agency has diminished largely as a result of the perception of political bias.
FBI special agent Steve Friend in a file image. (Courtesy of Steve Friend) Blowing the Whistle
Friend—now a senior fellow at the Center for Renewing America—previously worked as a special agent in the FBI’s Jacksonville, Florida, office, but was suspended from the agency after he came forward last September with concerns about how the bureau was handling child sexual abuse cases and allegations that cases were being inappropriately assigned.
Friend had also objected to the FBI’s use of SWAT teams to arrest individuals suspected of committing misdemeanors during the Jan. 6 Capitol breach.
According to a March 6 letter (pdf) written by whistleblower organization Empower Oversight, Friend was informed in December by the Department of Justice (DOJ) Office of the Inspector General (OIG) that, “after careful consideration,” the OIG had decided against opening an investigation into his allegations.
However, on March 16, DOJ Assistant Inspector General Sean O’Neill responded that DOJ Inspector General Michael Horowitz “still intends to schedule an interview with Mr. Friend regarding his disclosures.”
Views on Jan. 6
Prior to his suspension, Friend was involved in investigations relating to the Jan. 6 Capitol breach—an incident he said could only be fully understood through “radical transparency.”
“I’m hoping that this slow drip of surveillance footage is just eventually abandoned, and we just get the whole amount of it,” he said, alluding to the recent exposés aired by Fox News’ Tucker Carlson.
“There’s no reason why it should be leaked out slowly because that just gives cannon fodder to both sides to accuse the other of cherry-picking their information.”
As for his views on the events of that day, Friend said he thought the incident involved a “mixed bag” of people who did some “deplorable and abhorrent” things and should be held accountable and those who were just there to exercise their First Amendment rights.
Read more here…
Tyler Durden
Sat, 03/18/2023 – 21:30 - Biden In Touch With Buffett On Bank Crisis
Biden In Touch With Buffett On Bank Crisis
What do you call it when an 80-year-old seeks the advice of a 92-year-old?
Answer: the worst financial crisis since Lehman.TM
Realizing that Berkshire Hathaway had a near-record $128 billion in cash at the start of the year, more than most countries…
… Joe Biden, who on Monday lied to the American people that the “our banking system is safe“…
The bottom line is this: Americans can rest assured that our banking system is safe, and your deposits are safe. pic.twitter.com/hM36ZmZ22x
— Joe Biden (@JoeBiden) March 13, 2023
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… appears to have changed his mind and is urgently hoping to recreate the zeitgeist surrounding the infamous Oct 16 “Buy American” NYT op-ed by Warren Buffett.
… which ended up being memorable but only after the biggest bailout of US banks and capital markets in history and the start of the neverending QR/ZIRP->bust->QE/ZIRP cycle.
According to Bloomberg, Berkshire’s Warren Buffett has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis goes from bad to worse to Savings And Loan 2.0 (if only America had any savings left).
The buzz of private jet activity centering on Omaha was first reported by Fuzzy Panda who noted that “a large number (>20) of Private Jets landed in Omaha yesterday afternoon” with jets flying from HQs of Regional Banks, Ski Resorts & DC, and prompting the question “Did Buffett just fly all the regional bank CEOs into Omaha & offer a deal to SAVE the banks?”
The Private Jets arrived in Omaha in multiple groups. Sometimes landing at almost the same exact time.
Did Buffett schedule some meetings with different groups of CEOs every hour?
Number of Jets arriving:
5 ~10am (est)
3 ~2pm
5 ~3:30pm
5 ~5pm
6 ~6:15pm
3 ~7:30pm pic.twitter.com/68Ok6zl8cA— FuzzyPanda 🇺🇦 (@FuzzyPandaShort) March 17, 2023
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For now the answer is unclear, nor is it clear what role, if any, the billionaire investor may play to contain the crisis after the cascading failures of Silicon Valley Bank, Signature Bank and Silvergate.
Buffett, who will be 100 years old in 2031, has a long history of stepping in to aid banks in crisis, providing funding at daylight robbery terms (10% prefs + warrants), and leveraging his cult investing status to restore confidence in ailing firms. Bank of America won a capital injection from Buffett in 2011 after its stock plunged amid losses tied to subprime mortgages. Buffett also tossed a $5 billion lifeline to Goldman in 2008 to shore up the bank following the Lehman Brothers collapse.
Meanwhile, Biden’s team, wary of political blowback among progressives, has sought to implement bailouts that are spun as magically not being bailouts and which don’t require direct government spending from taxpayers, including the Federal Reserve’s actions (narrator: of course they require taxpayer backing). Alas, so far Biden’s plan has been a disaster: on Thursday, big US banks voluntarily deposited $30 billion to stabilize First Republic Bank this week, a move regulators described as “most welcome.” On Friday, the stock collapsed another 50%.
Any investment or intervention from Buffett or other figures would continue that playbook, looking to stem the crisis without direct bailouts…. until of course direct bailouts, rate cuts and QE are inevitable since a cascading wave of defaults among the regional banks would lead to another great depression as small/medium banks account for 50% of US commercial and industrial lending, 60% of residential real estate lending, 80% of commercial real estate lending, and 45% of consumer lending.
This is a serious risk
— Elon Musk (@elonmusk) March 18, 2023
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But before we get there, and since we are now following the playbook of the 2008 crisis, expect the SEC to “halt short selling of financial stocks to protect investors and markets”, just like it did 3 days after Lehman collapse sparking the worst banking crisis… until now.
Tyler Durden
Sat, 03/18/2023 – 21:00 - GOP Compromise Unintentionally Creates Universal Firearm Background Checks
GOP Compromise Unintentionally Creates Universal Firearm Background Checks
Submitted by Gun Owners of America,
Remember the Cornyn-Murphy Compromise that Gun Owners of America and our members warned Congress about? We were loud and clear about how this legislation did nothing to end mass public murders and only infringed on gun owners’ rights.
We attempted to warn elected officials. Nevertheless, Congress rushed to sign gun rights away, including 15 Republican Senators who enabled the passage of the “Bipartisan Safer Communities Act.”
Well, President Biden just announced that he’ll be using his “regulatory authority” to implement Universal Background Checks thanks to that bill.
When we told the anti-gunners in Congress how this bill was poison and would just add fuel to the fire for President Biden to go beyond what was written, compromise-hungry swamp monsters didn’t believe us.
Well, we hate to say, “I told you so,” but that’s exactly what happened. The Biden Administration, by their own admission, is going around Congress to infringe on your rights.
President Biden wants to use the expanded definition of “engaged in the business” to force you to file a background check for every single time you purchase a firearm.
According to the White House, the President is directing the Attorney General to move the U.S. as close to universal background checks as possible without additional legislation by supposedly clarifying the statutory definition of who is “engaged in the business” of dealing in firearms, as updated by the Bipartisan Safer Communities Act.
It seems that Biden would rather harass law-abiding gun owners who sell as few as just one firearm per year than lock up the criminals who are responsible for gun violence.
For those who are unfamiliar with this fight, President Obama attempted a similar executive order towards the end of his term in 2016. Obama attempted to expand the definition of gun “dealer” to:
– Restrict private transfers of firearms under the guise of the so-called loopholes “online and at gun shows.”
– Prosecute those who sell even as many as one firearm unless they obtain a Federal Firearms License.
– Punishing this otherwise lawful behavior with “up to five years in prison and fines up to $250,000.”
While Biden has just announced his executive order, we currently have no specifics on what that will entail. Obama’s executive order gives us a look into the future of what this rulemaking could potentially look like.
While the Biden administration may think this move is popular, the support for Universal Background Checks is fake.
The fact is, most people who are polled in these anti-gun surveys don’t fully understand what a Universal Background Check is, or that they’re actually Universal Registration Checks.
According to a survey of 1,000 people done by the Crime Prevention Research Center, 86% say they support background checks on all gun sales or transfers, but as soon as they’re asked follow-up questions which explain how this would look as policy, support starts to drop.
For example, when survey participants were asked a question with context on how the law would affect them, 44% now say they oppose Universal Background Checks, and only 42% say they support them.
Universal Background Checks don’t stop crime or criminals, instead they limit the ability of law-abiding citizens from being able to innocently transfer firearms to each other.
The goal of President Biden’s new backdoor universal background check scheme is to turn as many private citizens as possible who sell their guns into FFLs, restricting their ability to conduct private gun transfers without being recorded in the ATF’s illegal national federal registry.
Remember, the ATF already has a database of nearly one billion gun and gun owner records in their West Virginia facility.
GOA will do everything in our power to defend your gun rights from this infringement. We’ll lobby Congress, participate in any rulemaking, and challenge it in court when it is published and becomes possible.
* * *
We’ll hold the line for you in Washington. We are No Compromise. Join the Fight Now.
Tyler Durden
Sat, 03/18/2023 – 20:30 - Arab Leaders Offer Syria Billions In Aid, Sanctions Relief If Assad Pushes Back Against Iran
Arab Leaders Offer Syria Billions In Aid, Sanctions Relief If Assad Pushes Back Against Iran
Arab leaders are offering Syrian President Bashar al-Assad a deal that includes billions of dollars for reconstruction efforts and a pledge to lobby the west to lift sanctions in exchange for “[asking] Iran to stop expanding its footprint in the nation,” according to Arab and European officials that spoke with the Wall Street Journal.
Other conditions set by the leaders of the unnamed Arab nations include a pledge from Damascus to engage with opposition and rebel groups, accept Arab troops to “protect returning refugees,” and crack down on the captagon drug trade.
Image: SANA via AP The secret talks reportedly gained momentum following the devastating earthquakes that struck Turkiye and Syria last month, killing 6,000 in the Levantine nation alone.
Nonetheless, a Syrian government adviser told the WSJ that Assad “has shown no interest in political reform or a willingness to welcome Arab troops.” Western powers have also made little effort to lift crushing sanctions or stop politicizing humanitarian aid deliveries.
Last month, US State Department spokesman Ned Price urged the international community not to let humanitarian assistance to Syria be accompanied by normalization, stressing: “[Washington’s] position on the Assad regime has not changed.”
The talks between Damascus and Arab leaders are reportedly backed by Saudi Arabia, which recently agreed to restore ties with Iran in a China-brokered deal. In recent weeks, Saudi officials have called for an end to the isolation of Syria to allow a response to its dire humanitarian crisis.
“There is a consensus building in the Arab world that the status quo is not tenable. And that means we have to find a way to move beyond that status quo,” Saudi Foreign Minister Prince Faisal bin Farhan Al Saud said earlier this month.
European and Arab officials also confirmed to the WSJ that Syria’s regional reintegration would be high on the agenda at the next Arab League summit, set to be held later this year in Saudi Arabia. In recent weeks, Jordan and Egypt sent their foreign ministers to Damascus for their first diplomatic visits since the war erupted in 2011.
Cairo in particular is spearheading a reconciliation plan which proposes restoring relations between Syria and Arab states to pre-2011 levels, returning Syria to the League of Arab States, and negotiating the deployment of joint “Arab forces” on the Syrian-Iraqi border, according to exclusive information made available to The Cradle.
Dana Stroul, who spoke as co-chair of the Syria Study Group in 2019, acknowledged that the U.S. voted to keep its troops in Syria to secure “resource-rich” areas and to achieve an outcome that would “advance and protect” U.S. interests. pic.twitter.com/pcFOF8fvdY
— In Context (@incontextmedia) March 12, 2023
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Other Arab nations responsible for fueling the war in its early stages, such as Tunisia, have announced plans to restore diplomatic ties.
Even before the earthquake hit, Arab nations had slowly started to rebuild ties with Syria after more than a decade of war and isolation, citing the failure of the US-sponsored war and concerns about Iran’s growing presence in the country.
Despite these concerns, Iran has welcomed progress between Syria and the Arab world. Iranian Foreign Ministry spokesman Nasser Kanaani called it “a realistic approach” and “a positive step toward Islamic solidarity.”
Damascus has repeatedly denied “inaccurate reports about Iranian military forces in Syria” and asserts that “the number of Iranian advisors in Syria does not exceed 100.”
Tyler Durden
Sat, 03/18/2023 – 19:30 - Stockman On Washington's Panicked Bailout Of Bank Deposits… Here's What Comes Next
Stockman On Washington’s Panicked Bailout Of Bank Deposits… Here’s What Comes Next
Authored by David Stockman via InternationalMan.com,
Why would you throw-in the towel now? We are referring to the Fed’s belated battle against inflation, which evidences few signs of having been successful.
Yet that’s what the entitled herd on Wall Street is loudly demanding. As usual, they want the stock indexes to start going back up after an extended drought and are using the purported “financial crisis” among smaller banks as the pretext.
Well, no, there isn’t any preventable crisis in the small banking sector. As we have demonstrated with respect to SVB and Signature Bank, and these are only the tip of the iceberg, the reckless cowboys who were running these institutions put their uninsured depositors at risk, and both should now be getting their just deserts.
To wit, executive stock options in the sector have plunged or become worthless, and that’s exactly the way capitalism is supposed to work. Likewise, on an honest free market their negligent large depositors should be losing their shirts, too.
After all, who ever told the latter that they were guaranteed 100 cents on the dollar by Uncle Sam? So it was their job, not the responsibility of the state, to look out for the safety of their money.
If the American people actually wanted the big boys bailed out, the Congress has had decades since at least the savings and loan crisis back in the 1980s to legislate a safety net for all depositors. But it didn’t for the good reason that 100% deposit guarantees would be a sure-fire recipe for reckless speculation by bankers on the asset-side of their balance sheets; and also because there was no consensus to put taxpayers in harms’ way in behalf of the working cash of Fortune 500 companies, smaller businesses, hedge funds, affluent depositors and an assortment of Silicon Valley VCs, founders, start-ups and billionaires, among countless others of the undeserving.
And for crying out loud, forget this baloney about the bailouts aren’t costing taxpayers a dime because they are being paid for by the banks via insurance premium payments to the FDIC fund. Well, yes, when the Congress wants to disguise a tax they call it an “insurance premium”, as if its victims had the choice to elect coverage or not. But when $18 trillion of deposits are being assessed in order to bailout careless large depositors who paid no attention to what was happening to their money, then that’s an onerous tax by any other name.
Accordingly, Washington’s panicked bailout of $9 trillion of uninsured deposits held by big and small companies, hedge funds and affluent customers over the weekend was therefore nothing less than a gift to the undeserving. And now we find out the two banks that have been explicitly funded 100% by Uncle Sam—SVB and Signature Bank—were deep into woke investing and conduct. That makes the bailout by Janet Yellen & Co. especially galling.
For crying out loud, this is how the poison of wokeness and ESG spread like wild-fire among American businesses in the first place. The latter should have ordinarily been a bulwark of conservative values and common sense, but years of ultra-easy money from the Fed and the precedent of bailout-after-bailout since the 1980s allowed top executives to take their noses off the grindstone of safe and sustainable profitability in favor of a purely political agenda.
In any event, inflation is still raging and wage workers are still taking it on the chin. During February real wages dropped for the 23rd consecutive month. So the Fed needs to stay on its anti-inflation playbook, come hell or high water. That means it needs to keep raising rates until their after-inflation level is meaningfully positive, which is not yet remotely the case.
Indeed, unlike Tall Paul Volcker back in the late 1970s, who inherited 10-year Treasury yields at -2.0% and raised them to +10% over the next several years, real interest rates are still deeply underwater as we show below. The cries to stop the rate increases, therefore, are just damn nonsense.
In fact, in any sane world these are not even “increases”. They are long overdue normalization of interest rates that have been absurdly pinned to the zero bound for upwards of a decade.
And the Fed most certainly should not throw in the rate increase towel owing to a Wall Street proclaimed “crisis” in the small banking sector. That’s the long-standing wolf cry of the entitled class of speculators decamped in the digital canyons of Wall Street.
Yes, regional banks were playing fast and loose with depositor money, but even the biggest of these did not amount to a hill of beans in the great scheme of the nation’s $25 trillion GDP. As we showed a few days ago, both the recently departed SVB and Signature Bank each accounted for barely one-half of one percent of the nation’s $30 trillion of banking system assets.
If a few more local and regional banks need to be closed, therefore, so be it. Sooner or later the piper has to be paid.
Y/Y Change In Real Hourly Earnings, March 2021 to February 2023
For want of doubt, here is the pattern of the annual rate of change in the two-year stacked CPI. During the 18 months after January 2021 it soared from 1.9% to 7.1%. Yet notwithstanding the Fed’s purported anti-inflation campaign since March 2022, there has been no meaningful retreat from the June 2022 peak. That is, when you take the “base effects” out if the equation, it is clear that the CPI has been stranded at 40-year high levels at 7.0% ever since.
Annual Change, Two-Year Stacked CPI:
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January 2021: 1.9%;
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June 2021: 2.9%;
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January 2022: 4.5%;
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June 2022: 7.1%;
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July 2022: 6.8%;
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August 2022: 6.7%;
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September 2022: 6.8%;
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October 2022: 7.0%;
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November 2022:7.0%;
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December 2022: 6.8%;
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January 2023: 7.0%;
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February 2023: 7.0%
Nor is that the extent of the inflationary warning signs in the February CPI report. For example, plunging used car prices and the rollover of asking rents were supposed to be saving the day, bringing the headline CPI rate rapidly back toward the Fed’s 2.00% target.
But it’s not happening—-at least in the real world. On the matter of used vehicles there is nothing more authoritative than the Manheim used car auction index. But this real world index is going back up again, even as the green eyershades at the BLS insist that used vehicle prices are still going down.
Manheim Used Vehicle Index Change Versus CPI Used Vehicle Index
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One Month (February): +4.3% vs. -2.8%;
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Three Months: +7.8% vs. -5.3%;
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Six Months: +2.0% vs. -11.0%
Eventually, of course, the BLS will make revisions and adjustments to catch-up with the real world, meaning that the purported anti-inflation impact of used car prices will soon turn into a booster shot.
Likewise, the CPI shelter index for February was up at a near record 0.8% on a M/M basis and 8.1% from last February. As is evident from the chart, this component—which accounts for 24% of the weight in the headline CPI and 40% of the core CPI—is still accelerating, not cooling.
Change In CPI Shelter Index, Month/Month (Purple) and Year/Year (Black), 2021 to 2023
As we have previously noted, the argument that “asking rents” fell sharply during the back half of 2022 and that the CPI is therefore mis-reporting rent increases doesn’t wash. That because “asking rents” on new contracts account for just 1/12 of the rental market at best, and the reported numbers from private real estate companies are not seasonally adjusted.
As is evident in the chart below, rental rates always go down during the fall, and then come roaring back in the spring and early summer. In fact, right on schedule the February report by the Apartment List was back in positive territory.
In any event, what the CPI shelter index captures is the rolling increase in the total rent roll, not just the new contracts executed during the current month. And that means for the balance of this year at least—even if the overall housing market continues to weaken– average rents will be significantly higher on a year-over-year basis.
Finally, there was one further component in the February report that makes a mockery of the claim that the CPI is fixing to cliff-dive and that the Fed can therefore take its foot off the neck of the Wall Street gamblers. To wit, upwards of 60% of the CPI is accounted for by services less energy services, and this component was up 7.3% on a Y/Y basis, marking the largest such gain in 41 years!
So the Fed needs to keep its nose to the anti-inflation grindstone. It is not yet even close to turning the tide.
Y/Y Change In CPI For Services Less Energy, 2000 to 2023
As to the matter of imprudently managed banks, isn’t it finally time that all parties concerned – including large depositors – are made to pay the price for their feckless and reckless indifference to financial risk?
As a reminder, the unfolding of financial markets during 2022 was a screaming wake-up call that mis-matched bank portfolios were a train wreck waiting to happen. After all, last year the 30–year UST tanked by 39.2%, marking the greatest one-year decline since, well, 1754!
Likewise, the 10–year UST fell by 17.8%, another record vaporization of value. That’s why, of course, unrealized bank portfolio losses went from $15 billion in Q4 2021 to a staggering $650 billion in Q4 2022. And no one was hiding the ball—every dime of these potential losses were reported in the quarterly SEC filings.
Yet, and yet, bank executives and uninsured depositors sat on their hands because these soaring risks were not running through the income statement and thereby causing bank stock prices to fall even further. The whole theory behind this greatest ever outbreak of benign neglect was that all of the impacted Treasury and Agency securities generating these potential losses would be held to maturity and repaid in full.
Alas, that predicate was valid only to the extent that uninsured depositors sat on their hands permanently, and that imprudent folks like Peter Thiel and Ken Griffin would never yell “fire in the theater”.
They did, of course, and then the even greater fools in Washington enacted a $9 trillion deposit guarantee during the course of panicked deliberations in the White House Sunday afternoon.
So now that $18 trillion worth of US bank deposits have been totally euthanized economically by the geniuses in Washington, how do you stop bank managements from running wild on the asset-side of their balance sheet?
After all, they have already been making ungodly sums of money by mismatching their balance sheets, and now its Katie-bar-the-door.
Indeed, the Signature Bank fiasco is a poster boy for the art of minting fake profits off dangerous balance sheets. Not far below the surface we find the same old bank failure culprit: Namely, dirt cheap deposits thanks to the Fed, mismatched with substantially higher yielding but problematic assets.
Thus, in 2022 Signature Bank earned an average of 3.11% on its $114.3 billion of earning assets, while its cost of funding was just 0.88% on its $103.4 billion of deposits. In dollar terms, the assets generated $3.56 billion of gross income, while the bank paid out just $0.913 billion on its deposits.
Alas, if this were the widget business the above figures would amount to a sterling gross margin of 74%. And the resulting $2.54 billion of net interest margin wasn’t eaten up by SG&A, either. Net operating expense/fee income amounted to just $700 million, making Signature Bank an apparent goldmine in 2022
Yet just like that it was gone!
The reason is that its income statement was way too good to be true. The bank primarily catered to business operations in law, real estate and other professional services. Accordingly, like the case of SVB, fully 90% of its deposits base was not FDIC insured mom and pop savings accounts, but consisted of the working cash balances of its client firms.
At the same time, $70.2 billion of its $114.3 billion of earning assets were in commercial loans, mortgages and leases, which accounted for $2.80 billion of its $3.56 billion in gross income, owing to an average 4.0% yield on this part of the portfolio.
So at the heart of the operation was a 4% asset yield matched with a 0.88% deposit cost. And also a highly illiquid, sticky asset book (e.g. taxi medallion loans and low income housing mortgages) matched with deposits which were potentially hot and mobile, should its uninsured depositors ever get nervous and take flight.
They did, and in a New York minute the Signature Bank profits machine vaporized. And that’s to say nothing of its fixed income book which was drastically underwater owing to last year’s fixed income market bloodbath.
The only thing missing from Signature Bank’s financial picture is that it was not one of the 30 too-big-to-fail SIFIs (systemically important financial institutions), which were given a backdoor guarantee of uninsured depositors by Dodd-Frank. Then, like JP Morgan, its deposit costs would have been even cheaper and its fake profits even more fulsome.
As of 6:15 Pm Sunday night, of course, every bank now has the 100% safety net for uninsured deposits. This means that the 5,000 still living banks will have every opportunity to ignore their depositors and play even more artificial and remunerative games by mismatching their assets and liabilities.
Stated differently, banks have been way the hell too profitable thanks to the Fed’s insane financial repression and the rampant moral hazard of the bank regulatory and deposit insurance schemes. The top half dozen or so SIFI banks have actually booked more than $1 trillion of net income in the last eight years exactly because the geniuses in Washington have back-stopped and drastically cheapened their deposit carry costs.
The stock answer to all this from Washington and Wall Street alike is not to worry because new powers to the bank regulators will keep the cowboys from gestating more SVBs and Signature Banks.
Well, here is what Michael Barr, the top bank regulator on the Federal Reserve Board, had to say last Thursday morning when the fire at SVB was already raging:
“The banks we regulate, in contrast, are well protected from bank runs through a robust array of supervisory requirements.”
Or, as Elon Musk might have said, funding secured!
So at the end of the day there is no preventable financial crisis. What there is amounts to a systematic financial travesty that goes back to the hideously low money market regime that the Fed maintained since the eve of the financial crisis back in 2008, coupled with the evil of deposit insurance, both de jure and de facto.
The implicit policy of the Federal Reserve, as measured by the inflation-adjusted level of its target Fed funds rate, has been to blow-up the banking system by flooding it with dirt cheap deposit costs.
In fact, during the 180 months since Lehman there have been only seven months when the real rate was positive; and even then it was positive by just a hair as depicted by the blue bars peeking above the zero line in the chart below during early 2019.
Inflation-Adjusted Federal Funds Rate, 2008-2023
Likewise, it should be evident by now that deposit insurance has nothing to do with either sound money or a prudent banking industry.
It has remained in place for decades because it is a social policy-–protection of the little guy—parading as a financial stabilization measure.
But it doesn’t stabilize—it inherently and egregiously de-stabilizes, as has been implicit in every financial crisis during the last half century.
So if they want “social policy” for the little guy and the blue-haired ladies, give these folks access to a $250,000 government savings account paying 50 basis points of interest as far as the eye can see. For every one else, let them be the watch-dogs of their own money in the commercial banking system.
That’s the very predicate of a stable banking system and sustainable free market prosperity.
* * *
The truth is, we’re on the cusp of an economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.
Tyler Durden
Sat, 03/18/2023 – 19:00 -
- Living In Memphis Might Break Paycheck To Paycheck Cycle
Living In Memphis Might Break Paycheck To Paycheck Cycle
Americans have been battered by two years of negative real wage growth as personal savings are depleted while credit card debts jump to record highs. Shelter inflation continues to soar while housing affordability is at its lowest in decades.
Homeownership has become unattainable for folks who earn below $100k due to elevated mortgage rates and high home prices, forcing many buyers to stay on the sidelines this spring season.
For those with economic mobility and remote work capabilities, a new report via the fintech website SmartAsset shows the top cities where a $100k household income no longer means living from paycheck to paycheck.
SmartAsset analyzed the after-tax income of 76 major cities and then adjusted those figures for the cost of living in each place. What they found is $100k might go the furthest in Memphis.
Here are the key findings from the report:
$100K goes furthest in Memphis. The city may be known as the “Home of the Blues,” but Memphis’ low cost of living surely won’t make you sing them. A $100,000 salary is worth more here ($86,444) than in any other city in our study after subtracting taxes and adjusting for the cost of living.
Texas cities dominate the top 10. Thanks to no state income tax and the low cost of living, the Lone Star State looms large in our study. Seven out of the 10 cities in our top 10 are located in Texas. After deducting taxes and adjusting for the cost of living, a $100,000 salary on average is worth $77,885 across the 10 Texas cities that we analyzed in our study.
Oklahoma City has the lowest cost of living. A $100,000 goes a long way in the Sooner State’s largest city, considering that the cost of living is only 83.2% of the national average – the lowest out of all 76 cities in our study. A $100,000 salary is worth $84,498 in Oklahoma City after adjusting for the cost of living.
In New York City, $100K amounts to just $35,791 when you consider taxes and the cost of living. Taxes and cost of living take a big bite out of a $100,000 income in the Big Apple, which ranked last in our analysis. After adjusting for those factors, $100,000 is worth just $35,791.
And the top ten places in the US where $100k goes the furthest:
1. Memphis, TN
A person earning $100,000 per year in Memphis takes home $74,515 after federal and local taxes (the state of Tennessee doesn’t tax earned income). Considering the city has a cost of living that’s almost 14% lower than the national average, those after-tax earnings are actually worth $86,444 when adjusting for the cost of living.
2. El Paso, TX
A $100,000 salary in El Paso is worth $84,966 after subtracting taxes and adjusting for the local cost of living. A person who makes $100,000 a year in this West Texas city of over 678,000 residents takes home $74,515 after taxes. El Paso’s cost of living is just 87.7% of the national average.
3. Oklahoma City, OK
Someone making $100,000 in Oklahoma City will take home $70,302 after taxes. But thanks to the lowest cost of living in our study, those after-tax earnings are worth considerably more: $84,498.
4. Corpus Christi, TX
A $100,00 annual salary is worth $83,443 in Corpus Christi after deducting taxes and adjusting for the local cost of living. Located on the Gulf Coast of Texas, Corpus Christi’s cost of living is 10.7% lower than the national average.
5. Lubbock, TX
A person who earns $100,000 per year in Lubbock can expect to take home $74,515 after taxes are deducted from their paychecks. Since the cost of living in Lubbock is just 89.4% of the national average, that person’s take-home pay is actually worth $83,350 after adjusting for the cost of living.
6. Houston, TX
Like the other Texas cities in the top 10, a $100,000 salary in Houston is reduced to $74,515 after taxes. Those earnings, however, are worth $81,350 when adjusting for Houston’s cost of living, which is 91.8% of the national average.
7 (tie). San Antonio, Fort Worth and Arlington, TX
A $100,000 salary is worth the same amount of money in three Texas cities: San Antonio, Fort Worth and Arlington. Thanks to identical tax treatment and no state income tax, a person earning $100,000 takes home $74,515 in each city. That money is worth $80,124 when you adjust for the cost of living in all three cities, which is 7% lower than the national average.
10. St. Louis, MO
St. Louis rounds out the top 10. While taxes reduce a $100,000 salary to $69,531, the city’s low cost of living (87% of the national average) makes those after-tax dollars go even further. As a result, a $100,000 salary in St. Louis is worth $79,921 after subtracting taxes and adjusting for the cost of living.
One potential solution for those aiming for financial independence and reduced reliance on the government could be a move to one of the ten cities SmartAsset listed.
Tyler Durden
Sat, 03/18/2023 – 18:30 - Stanford Students Demand Journalist Remove Their Names From Stories… After Targeting Other Students By Name
Stanford Students Demand Journalist Remove Their Names From Stories… After Targeting Other Students By Name
There is an interesting development in the controversy at Stanford Law School where U.S. Circuit Court Judge Kyle Duncan was shouted down by law students and condemned by a law school dean for discussing his conservative judicial views.
Student protesters reportedly published the names of students in the Federalist Society online as part of their cancel campaign.
However, Aaron Sibarium, a journalist for the Washington Free Beacon has said that a board member of the Stanford National Lawyers Guild, sent an email demanding the Free Beacon remove her name and those of other students from their reporting because it is threatening and dangerous.
Sibarium tweeted that “On Sunday, I identified board members of the Stanford National Lawyers Guild–one of the groups responsible for the posters–who in a public statement described the protest as ‘Stanford Law School at its best.’ A few hours later, the board demanded I redact their names.”
It was a highly ironic moment to be sure. However, I am more interested in another aspect of the controversy. I wrote earlier about the joint apology letter of Stanford President Marc Tessier-Lavigne and Law School Dean Jenny Martinez. Neither Tessier-Lavigne nor Martinez promise to hold these students accountable or to sanction Steinbach. They merely express regret that “staff members who should have enforced university policies failed to do so, and instead intervened in inappropriate ways that are not aligned with the university’s commitment to free speech.”
This latest controversy highlights the fact that the identity of some of these students (including those on videotape) who disrupted a speaker at the law school are known to the school.
In this case, it was a federal appellate judge but we have seen this type of “deplatforming” at other schools.
These students — and many faculty — voice a twisted view that silencing the free speech of others is a form of free speech.
A chilling poll was released by 2021 College Free Speech Rankings after questioning a huge body of 37,000 students at 159 top-ranked U.S. colleges and universities. It found that sixty-six percent of college students think shouting down a speaker to stop them from speaking is a legitimate form of free speech. Another 23 percent believe violence can be used to cancel a speech. That is roughly one out of four supporting violence.
They are getting these values from faculty members. Many schools have largely purged their ranks of conservative and libertarian faculty. This trend is supported by anti-free speech websites like Above the Law where Editor Joe Patrice defended “predominantly liberal faculties” and argued that hiring a conservative professor is akin to allowing a believer in geocentrism to teach. He also mocked surveys showing that conservative students are fearful of speaking freely in class, dismissing these students as “just… conservatives being sad that everyone else makes fun of them.”
What is notable is that Martinez did not even pledge to hold students accountable for stopping the speech by Judge Duncan. Yet, that is still more than other law deans. When Professor Josh Blackman was stopped from speaking about “the importance of free speech” at CUNY law school, CUNY Law Dean Mary Lu Bilek insisted that disrupting the speech on free speech was free speech. (Bilek later cancelled herself after using a controversial term in a meeting and resigned).
At the University of California, Santa Barbara, professors actually rallied around a professor who physically assaulted pro-life advocates and tore down their display.
These students have been raised from elementary schools to law school in a speech phobic environment where free speech is treated as harmful. That was evident in the disgraceful Stanford event.
Now, however, they want to be able to target others while objecting to being named themselves. Much like the Yale law students who cancelled an event and then objected to campus police being present, this objection from Stanford law students illustrates the sense of privilege and exceptionalism by many in the anti-free speech movement.
The focus, however, should not be on the hypocrisy of these students but the passivity of the faculty. Unless students are held accountable for preventing free speech on campus, the apologies from the President and Dean are meaningless.
Tyler Durden
Sat, 03/18/2023 – 18:00 - CNN Reporter Robbed While Covering "Rampant Street Crime" In San Francisco
CNN Reporter Robbed While Covering “Rampant Street Crime” In San Francisco
A CNN reporter fell victim to a ‘smash-and-grab‘ robbery while reporting on San Francisco’s “rampant street crime.”
In a series of tweets on Friday, CNN correspondent Kyung Lah described how her rental car’s rear window was smashed within seconds by thieves who then made off with her bags.
“Got robbed. Again,” Lah wrote. “[CNN producer Jason Kravarik] & I were at city hall in San Francisco to do an interview for @CNN. We had security to watch our rental car + crew car. Thieves did this in under 4 seconds. Security stopped the jerks from stealing other bags. But seriously- this is ridiculous.”
Got robbed. Again. @jasonkCNN & I were at city hall in San Francisco to do an interview for @CNN. We had security to watch our rental car + crew car. Thieves did this in under 4 seconds. Security stopped the jerks from stealing other bags. But seriously- this is ridiculous pic.twitter.com/3zcCzckavW
— Kyung Lah (@KyungLahCNN) March 17, 2023
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Even though Lah hired ‘private security,’ the crooks were able to flee the scene.
Our hired security guard tried to grab the crooks (I’m glad he didn’t get hurt!) but he got this picture of the getaway car.
To the jerks who stole our stuff— I hope someone on this site sees your plate and you get caught pic.twitter.com/k7VL0J9JHJ— Kyung Lah (@KyungLahCNN) March 17, 2023
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The irony is that the reporter at the left-leaning news outlet was filming a segment on “rampant street crime” in San Francisco, now considered the “shoplifting capital of America” because of progressive prosecutors who refuse to enforce criminal laws.
Surging crime, open-air drug dealing, and robberies are a byproduct of failed social justice reforms by progressive politicians, such as George Soros-backed District Attorney Chesa Boudin, who was booted out of office last June by angry voters.
Twitter users had fun with this:
defund the police is going great
— Shibetoshi Nakamoto (@BillyM2k) March 18, 2023
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Looks smashy but mostly peaceful
— Sam Ikin (@sam_ikin) March 18, 2023
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You sure this wasn’t climate change?
— Chris Walkey (@ChrisWalkey) March 18, 2023
Too bad you work for an organization that spends 24/7 shilling for the very people whose policies have made this possible.
— Jesus = Answer (@hollis4congress) March 18, 2023
Tyler Durden
Sat, 03/18/2023 – 17:30 - Rogoff Warns 'Things Are Only Getting Harder For The Fed'
Rogoff Warns ‘Things Are Only Getting Harder For The Fed’
Authored by Kenneth Rogoff, op-ed via The Financial Times,
The Fed’s expansive actions to prevent the Silicon Valley Bank collapse from becoming systemic, followed by the Swiss National Bank’s massive lifeline to troubled Credit Suisse, left little doubt this week that financial leaders are determined to act decisively when fear starts to set in. Let us leave moral hazard for another day.
But even if risks of a 2023 financial Armageddon have been contained, not all the differences with 2008 are quite so reassuring.
Back then, inflation was a non-issue and deflation — falling prices — quickly became one. Today, core inflation in the US and Europe is still running hot, and one really has to strain the definition of “transitory” to argue that it is not a problem. Global debt, both public and private, has also skyrocketed. This would not be such an issue if forward looking, long-term real interest rates were to take a deep dive, as they did in the secular stagnation years prior to 2022.
Unfortunately, however, ultra-low borrowing rates are not something that can be counted on this time around.
First and foremost, I would argue that if one looks at long-term historical patterns in real interest rates (as Paul Schmelzing, Barbara Rossi and I have), major shocks — for example, the big drop after the 2008 financial crisis — tend to fade over time. There are also structural reasons: for one thing, global debt (public and private) exploded after 2008, partly as an endogenous response to the low rates, partly as a necessary response to the pandemic. Other factors that are pushing up long-term real rates include the massive costs of the green transition and the coming increase in defence expenditure around the world. The rise of populism will presumably help alleviate inequality, but higher taxes will lower trend growth even as higher spending adds to upwards pressure on rates.
What this means is that even after inflation abates, central banks may need to keep the general level of interest rates higher over the next decade than they did in the last one, just to keep inflation stable.
Another significant difference between now and post-2008 is the far weaker position of China. Beijing’s fiscal stimulus after the financial crisis played a key role in maintaining global demand, particularly for commodities but also for German manufacturing and European luxury goods. Much of it went into real estate and infrastructure, the country’s massive go-to growth sector.
Today, however, after years of building at breakneck speed, China is running into the same kinds of diminishing returns as Japan began to experience in the late 1980s (the famous “bridges to nowhere”) and the former Soviet Union saw in the late 1960s. Combine that with over-centralisation of decision-making, extraordinarily adverse demographics, and creeping deglobalisation, and it becomes clear that China will not be able to play such an outsized role in holding up global growth during the next global recession.
Last, but not least, the 2008 crisis came during a period of relative global peace, which is hardly the case now. The Russian war in Ukraine has been a continuing supply shock that accounts for a significant part of the inflation problem that central banks are now trying to deal with.
Looking back on the past two weeks of banking stress, we should be thankful that this did not happen sooner. With sharply rising central bank rates, and a troubled underlying economic backdrop, it is inevitable that there will be many business casualties and normally emerging market debtors as well. So far, several low-middle income countries have defaulted, but there are likely to be more to come. Surely there will be other problems besides tech, for example the commercial real estate sector in the US, which is hit by rising interest rates even as major city office occupancy remains only about 50 per cent. Of course the financial system, including lightly regulated “shadow banks,” must be housing some of the losses.
Advanced economy governments are not all necessarily immune.
They may have long since “graduated” from sovereign debt crises, but not from partial default through surprise high inflation.
How should the Federal Reserve weigh all these issues in deciding on its rate policy next week?
After the banking tremors, it is certainly not going to forge ahead with a 50 basis point (half a per cent) increase as the European Central Bank did on Thursday, surprising markets. But then the ECB is playing catchup to the Fed.
If nothing else, the optics of once again bailing out the financial sector while tightening the screws on Main Street are not good. Yet, like the ECB, the Fed cannot lightly dismiss persistent core inflation over 5 per cent. Probably, it will opt for a 25 basis point increase if the banking sector seems calm again, but if there are still some jitters it could perfectly well say the direction of travel is still up, but it needs to take a pause.
It is far easier to hold off political pressures in an era where global interest rate and price pressures are pushing downwards. Not anymore. Those days are over and things are going to get harder for the Fed. The trade-offs it faces next week might only be the start.
Tyler Durden
Sat, 03/18/2023 – 17:00 - Please Stop With The Raccoon Dogs
Please Stop With The Raccoon Dogs
Authored by Alex Berenson via Unreported Truths,
Last night, The Atlantic – of course it was The Atlantic – had BREAKING NEWS!
And by BREAKING NEWS I mean yet another migraine-inducing story purporting to show that Sars-Cov-2 emerged naturally, rather than leaking from a lab.
Before we get to the story, which takes about two seconds to debunk, it’s worth nothing that even Dr. Anthony S. Fauci is in the process of giving up on the natural origins theory. On CNN on Sunday, he claimed that even if Sars-COV-2 escaped from a lab after scientists found it in a cave and transported it for research, he would consider that a naturally occurring outbreak.
Screenshot What?
I say again, what?
Assume this version of events is true. It’s not. Chinese scientists were definitely performing “gain-of-function” research on coronaviruses in Wuhan, and the odds are overwhelming that it was one of those viruses that leaked. We know this for several reasons, including that Sars-Cov-2 has certain features that largely do not exist in wild bat coronaviruses but are common in engineered coronaviruses.
Further, Fauci’s theory makes no sense because if the Chinese had found Sars-COV-2 in a wild bat and transported it, they would have had every reason to go back to the cave where they’d found it the first time and get it again, thus PROVING it was naturally occurring. They’d know exactly where to get it! They wouldn’t have to look. They could have done so immediately (or after a couple of months had passed and they’d destroyed all the evidence that they’d ever found it before).
But let’s pretend Fauci’s theory makes sense. Let’s say that researchers found Sars-COV-2 in a wild bat, and brought it to a lab, where it leaked.
How can he, or anyone, call that a “natural occurrence”? The virus was stuck in a cave in a bat, like innumerable other coronaviruses since time immemorial. Where is the evidence it ever would have infected a human, much less caused a worldwide epidemic, had virologists not given it every possible opportunity to do so, by bringing it to the middle of a 10-million-person city and then trying to grow it?
If SARS-Cov-2 leaked from a lab, that’s a lab leak. Even Tony Fauci can’t spin that reality away.
But back to the Atlantic. Which breathlessly reported yesterday that we now have genetic evidence that raccoon dogs and the coronavirus were both at the “Huanan Seafood Market” – the live animal market in the middle of Wuhan where some early coronavirus cases were reported – in December 2019.
“The Strongest Evidence Yet That an Animal Started the Pandemic,” the Atlantic proclaimed.
Except.
Hold up.
WE ALREADY KNEW THAT RACCOON DOGS WERE KEPT AT THE HUANAN SEAFOOD MARKET. We’ve known that for years. And of course we already knew that infected people came to the market; that’s why the people who don’t want to admit that Sars-Cov-2 leaked from a lab keeps proposing it as a source.
In fact, we went through this very nonsense MORE THAN A YEAR AGO.
Screenshot As The Scientist (who better to tell you about The Science?) wrote about an earlier round of nonsense in February 2022, “one of the studies shows that raccoon dogs were sold in a section of the market where coronavirus samples were detected.”
Which is more or less precisely what yesterday’s “scoop” said.
I’ll leave you with this from The New York Times.
The Times has not exactly been aggressive about covering the potential lab leak, and it followed up on the Atlantic’s piece today with one of its own. But even the Times couldn’t avoid telling the truth, four paragraphs in:
The jumbling together of genetic material from the virus and the animal does not prove that a raccoon dog itself was infected. And even if a raccoon dog had been infected, it would not be clear that the animal had spread the virus to people. Another animal could have passed the virus to people, or someone infected with the virus could have spread the virus to a raccoon dog.
Someone infected with a virus?
Gee, I wonder where they got it? Maybe the giant lab working with bat coronaviruses a couple miles away –
Tyler Durden
Sat, 03/18/2023 – 16:30 - How The "Most Anticipated Recession" Is Still Unanticipated
How The “Most Anticipated Recession” Is Still Unanticipated
By Dhaval Joshi, chief strategist at BCA Research
Exactly one year ago today, the US Federal Reserve embarked on the most aggressive tightening cycle in modern history. It comes as no surprise then that the US has just passed two of the three staging posts to recession.
The first staging post is a housing recession. US residential fixed investment (home building) has slumped by a fifth. This is significant because post-1970 housing recessions have predicted economic recessions with a perfect four out of four success rate: 1974; 1980; 1990; and 2007 (Chart 1).
The second staging post is bank failures. Banks tend to fail just before recessions begin. Ahead of the recession that began in December 2007, no US bank failed in 2005 or 2006. The first three bank failures happened in February, September, and October of 2007, just before the recession onset.
Fast forward, and no US bank failed in 2021 or 2022. The first bank failures of this cycle – Silicon Valley Bank and Signature Bank – have just happened. If history is any guide, the start of bank failures presages an economic recession that is more imminent than many people anticipate (Chart 2).
To be clear, it is not the direct impact of the housing recession or the bank failures that causes the economic recession. The housing recession and bank failures are simply the early warning signs – the ‘canaries in the coal mine’ – that tell us that high interest rates are killing the economy.
The US Economy Has Passed Two Staging Posts To Recession. Here’s The Third
Many economists argue that once a recession is staring you in the face, you can promptly cut interest rates to stop it in its
tracks. Good luck with that. This is like arguing that once the iceberg was staring you in the face, you could promptly reverse the engines to save the Titanic.Interest rates work with a lag. The impact of tightening takes time to be felt. To repeat, the first US rate hike happened exactly a year ago today, but we are seeing the first bank failures now.
In a downturn, the ‘corrective’ impact of loosening also takes time to be felt. Conversely, the ‘self-reinforcing’ feedback that accelerates the downturn – like a bank run, or households increasing their precautionary saving in response to higher unemployment – is immediate.
This makes a recession a non-linear system. Once you’ve passed the point of no return, it is too late to reverse the engines. You cannot avoid the iceberg. In the case of the US economy, once the unemployment rate has increased by 0.5 percent, it has always gone on to increase by well over 2 percent (Chart 3).
So, the third and final staging post to recession is the US unemployment rate increasing by 0.5 percent. So far, it is up by 0.2 percent.
How The ‘Most Anticipated Recession Ever’ Is Still Unanticipated
Is the coming recession the most anticipated ever? The Philly Fed’s latest so-called ‘anxious index’, showed that the proportion of economists expecting the US economy to contract in the second, third, and fourth quarters of 2023 stood at 42 percent, 45 percent, and 41 percent respectively. These are among the most pessimistic readings for any time that a recession hasn’t already begun (Chart 4).
Still, the proportion of economists predicting a recession is a minority. This is confirmed by the survey’s overall forecast for US GDP that shows no decline through the next four quarters – though admittedly, that was in mid-February before the recent bank failures (Chart 5).
The absence of a forecasted recession might reflect the bias of economists to sugar-coat their predictions, given their asymmetric incentive structure. For an economist’s standing, the best thing is to be right. But if you are wrong, it is better to miss a recession, than to forecast a recession that does not happen. On this basis, peak pessimism should never increase above the high 40s. Yet it does.
Once a recession begins, it is no longer taboo to forecast a contraction in the economy. As the sugar-coating of economists’ forecasts ends, the anxious index can surge to above 70 percent, and forecasts for the economy can collapse. In this important regard, the most anticipated recession is still very unanticipated.
Interest Rates, Profits, And Crude Oil Are Not Fully Anticipating A Recession
In the financial markets, the deeply inverted US yield curve means that the bond market is forecasting aggressive rate cuts – around 200 basis points through the next two years. As the Fed only cuts aggressively in a recession, the bond market is anticipating a recession.
That said, the forecasted pace of cutting, at 25 basis points per quarter, is too low – given that in previous recessions the pace of cutting has been 80-150 basis points per quarter. Meaning, the bond market is not fully anticipating a recession (Chart 6).
Our February 8th recommendation to buy the December 2024 Fed funds future FFZ24 is panning out very well. The position is in huge profit and a big part of the expected gains have been made. Traders may wish to crystallize those gains, but the rally will end only when the rates curve fully anticipates a recession. Meanwhile, long bonds (10-year and longer maturity) have at least 10 percent price upside.
What about the stock market? Many people argue that the bear market since early 2022 indicates that the stock market is anticipating a recession. This is wrong. The slump in stocks is mostly due to a slump in valuations, caused by the bear market in bonds. Profit forecasts have not slumped (Chart 7).
Based on previous recessions, these profit forecasts are vulnerable to at least a 20 percent downgrade. Mitigating this somewhat, an uplift to bond valuations will boost stock valuations, and limit further downside in the stock market to around 10 percent.
Bonds have outperformed stocks in every recession of the past 75 years, including the recessions of the inflationary 1970s. But with bonds only now starting to outperform stocks, bonds versus stocks is not yet anticipating a recession.
Turning to commodities, the oil market is not anticipating a recession either. Crude oil demand tracks world GDP, albeit deflated by 1.6 percent a year due to steady gains in energy efficiency. This means that the 2 percent annual growth forecast for world oil demand through 2023-24 would require world GDP to grow at a 3.6 percent clip through the next two years (Chart 8).
Yet even a “soft landing” in the US and Europe would cause growth in developed economies to slow to around 1 percent. Meanwhile, China’s outgoing Premier Li Keqiang recently announced China’s GDP target for 2023 at “about 5 percent.” This makes the oil market’s implied forecast for demand growth far too rosy, and in a recession the destruction of oil demand always outweighs any cutbacks to supply.
Hence, as I explained in Why Oil Is Headed To $55, the crude oil price has a further 25 percent downside.
To summarise for a 6-12 month investment horizon, bonds have a 10 percent upside, stocks have a 10 percent downside, and crude oil has a 25 percent downside.
Tyler Durden
Sat, 03/18/2023 – 16:00 - SVB's London Bankers Received Up To $36 Million In Bonuses Days After BoE-Orchestrated Bailout
SVB’s London Bankers Received Up To $36 Million In Bonuses Days After BoE-Orchestrated Bailout
Bankers at the London branch of Silicon Valley Bank reportedly received tens of millions of dollars in bonuses just days after the Bank of England orchestrated a rescue package that led to Europe’s largest lender, HSBC, buying the failed bank’s subsidary for just £1, Sky News reports.
Sources described the bonus pool as “modest”, and said it totalled between £15m and £20m.
It was unclear on Saturday how much had been awarded to Erin Platts, the UK bank’s chief executive or her senior colleagues.
One insider said the bonus payments were a signal of HSBC’s confidence in the talent base at its new subsidiary and that the buyer had been keen to honour previously agreed payments in order to help retain key staff. –Sky
What’s more, bonuses were reportedly doled out to US staff just hours before the Santa Clara, California-based bank collapsed. The bank was taken into FDIC ownership, while SVB Financial Group has filed for Chapter 11 bankruptcy protection as it looks to find buyers for their remaining assets.
The UK arm of (formerly) SVB employs around 700 people. The London branch’s ‘guided demolition’ was coordinated with UK Prime Minister Rishi Sunak, who played a pivotal role in an emergency auction that drew interest from several challenger banks, including the Bank of London and Oaknorth.
According to insiders, if HSBC hadn’t stepped up, the bonuses wouldn’t have been paid, while another insider pointed out that stock held by senior executives and other employees had been rendered worthless amid the implosion.
“The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs,” said chancellor Jeremy Hunt. “We have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.”
“[This] ensures customer deposits are protected and can bank as normal, with no taxpayer support.”
The government had been lobbied intensively last weekend by hundreds of tech entrepreneurs about the parlous state of SVB UK.
They warned of “an existential threat to the UK tech sector”, adding: “The Bank of England’s assessment that SVB going into administration would have limited impact on the UK economy displays a dangerous lack of understanding of the sector and the role it plays in the wider economy, both today and in the future.”
The founders warned Mr Hunt that the collapse of SVB UK would “cripple the sector and set the ecosystem back 20 years”. -Sky
“Many businesses will be sent into involuntary liquidation overnight,” were SVB UK not rescued, wrote the entrepreneurs.
Tyler Durden
Sat, 03/18/2023 – 15:30 - Oil Majors Juggle Cheaper Crude With Lower Emissions
Oil Majors Juggle Cheaper Crude With Lower Emissions
By Tsvetana Paraskova of OilPrice.com
The world’s biggest international oil and gas firms continue to pledge lower-emission operations to supply the world with the hydrocarbons it needs and will need in the future. Unfortunately for Big Oil, not all basins and areas of production are equal, so companies have focused in recent years on investing in the most prolific operations that yield the most profitable oil with relatively lower emissions than in other locations.
To keep investors in the sector, the largest oil firms continue to tout their progress in reducing emissions. But to create additional value for shareholders via higher returns, companies are prioritizing specific basins and resources they believe will yield the cheapest-to-extract oil and natural gas in their portfolios.
In the era of ESG investment and the energy crisis following the Russian invasion of Ukraine, Big Oil is now juggling the need to keep producing oil and gas with the imperative to cut emissions if they want to continue to have a license to operate.
Despite the surge in renewable energy in recent years, the world still relies on fossil fuels for more than 80% of its energy needs.
“Strike The Right Balance”
Policies and companies need to strike the right balance between energy security and ways to cut emissions from oil and gas, ExxonMobil’s chief executive Darren Woods said at the CERAWeek by S&P Global conference last week.
“It would be a mistake to abandon any one of those objectives,” Woods added.
ExxonMobil targets to grow its Permian production to 1 million barrels per day (bpd) and, at the same time, reach net-zero emissions at its operated unconventional assets in the Permian by 2030.
“One of the points in doing that is to demonstrate to the world that we can do both,” Woods at CERAWeek.
Exxon is also one the least emission-intensive refiners in the world, the executive added.
If Exxon doesn’t make the diesel and gasoline the world needs, someone else – with higher emission intensity operations – will, and there wouldn’t be a net benefit for the world in terms of emissions abatement, Woods noted.
There is a recognition of how urgent the issue is and “how enormous the lift is,” he said. The solutions will vary according to the circumstances around the world, Woods said.
The other U.S. supermajor, Chevron, said on its Investor Day 2023 last month, “We’re making progress toward our upstream CO2 intensity reduction targets. We continue to prioritize the projects expected to return the largest reduction in carbon emissions cost efficiently.”
Chevron looks to advance more than 100 projects this year to lower the carbon intensity of its operations, focusing on energy management, flaring reduction, and methane management, among others.
“Our goal on methane is simple – keep it in the pipe.”
The New Advantaged Resources
Very productive fields and newer basins tend to be less emission-intensive per barrel due to the sheer volumes of production and new designs to make extraction in newer fields less carbon-intensive, by electrifying operations, for example, analysts tell The Wall Street Journal.
In the deepwater U.S. Gulf of Mexico and onshore Saudi Arabia, per-barrel production is among the cheapest and cleanest at the same time because the wells there are very productive, Julie Wilson, research director of global exploration at Wood Mackenzie, told the Journal.
Norway also boasts some of the lowest-emission barrels globally.
Operators offshore Norway have started to replace gas turbines with electricity from onshore – Norway’s electricity comes predominantly from hydropower – bringing down emissions from the newer oilfields.
For example, Phase 2 of the giant Johan Sverdrup oilfield will emit 0.67 kilograms (kg) of CO2 per barrel of produced oil, thanks to power from shore, operator Equinor says. The global average is 15 kg/barrel, according to the Norwegian major.
However, “truly advantaged resources, with low breakeven (resilience to low prices) and emissions (sustainability in scope 1 and 2 terms) are anything but plentiful,” Andrew Latham, Vice President, Energy Research at Wood Mackenzie, said in a recent report.
“The world is far from the end of the hydrocarbon era,” Latham said.
According to WoodMac’s base-case Energy Transition Outlook (ETO), oil demand peaks in 2030, before declining slowly to 94 million barrels per day (bpd) in 2050. Even in the Accelerated Energy Transition (AET) outlook of global net zero by 2050 and achieving the most ambitious targets in the Paris Agreement, oil demand will still be 33 million bpd by 2050.
“As things stand, we see enough to satisfy only about half of our base-case oil and gas demand forecast to 2050,” WoodMac’s Latham says.
“This problem of ‘peak advantage’ looms ever larger and presents a huge and urgent call to action. As recent supply interruptions serve to remind us, we neglect the upstream at our peril. Both oil and, in particular, gas will continue to need huge and sustained investment.”
Tyler Durden
Sat, 03/18/2023 – 15:00 - The Growing Auto Loan Problem Facing Young Americans
The Growing Auto Loan Problem Facing Young Americans
Since the COVID-19 pandemic, Americans have taken on significantly more debt to buy vehicles. This is especially true for Gen Z and Millennials, who the Federal Reserve believes may have borrowed beyond their means.
In this infographic, Visual Capitalist’s Marcu Lu visualizes data from the Fed’s most recent consumer debt update.
Aggressive Borrowing
The first chart in this graphic shows the growth in outstanding car loans between Q2 2020 (start of the pandemic) to Q4 2022 (latest available).
We can see that Americans under the age of 40 have grown their vehicle-related debt the most. It’s natural for Gen Z (ages 11-26) to have higher growth figures because many of them are buying their first car, but 31% is quite high relatively speaking.
Part of this can be attributed to today’s inflationary environment, which has pushed used car prices to new highs. Supply chain issues have also resulted in over 30% of new cars being sold above MSRP.
Because of these rising prices, the Fed reports that the average auto loan is now $24,000, up 41% from 2019’s value of $17,000.
Spiking Delinquencies
Interest rates on auto loans are typically fixed, meaning many young Americans were able to take advantage of the low rates seen during the pandemic.
Despite this, one in five Gen Zs say that their car payments account for over 20% of their after-tax income.
Shown in the second chart of this infographic, the amount of auto debt transitioning into serious delinquency is much higher for Gen Z and Millennials. Throughout 2022, these generations saw $20 billion in auto debt fall 90+ days behind.
The outlook for these struggling borrowers is bleak. First there’s inflation, which has pushed up the prices of most consumer goods. This eats into their ability to make car payments.
Second is rising interest rates, which make credit card debt—another pain point for young borrowers—even more costly. Finally, there’s student loans, which are expected to resume in summer 2023. Payments on student debt have been suspended since the beginning of the COVID-19 pandemic.
Tyler Durden
Sat, 03/18/2023 – 14:30 - Is Your Bank "Important" Enough To Save? Don't Count On It…
Is Your Bank “Important” Enough To Save? Don’t Count On It…
Authored by Mark Jeftovic via BombThrower.com,
The Elites are bailing out their own banks, not yours
The systemic banking and financial crisis I’ve been warning about for years has arrived. (In fact, the report I put out in January seems to be playing out in spades).
The printing of 37 trillion dollars out of thin air over the pandemic widened the wealth inequality gap – and they followed that up with the most drastic and rapid interest rate hiking cycle in Fed history.
What did they think was going to happen?
Now the banks are failing – Silicon Valley Bank went from passing its KPMG audit with flying colours and getting their debt rated “A” by Moody’s mere weeks ago, to the executives frantically paying themselves bonuses and selling their shares in the hours and days before the bank failed and was taken over by the FDIC.
98% of the deposits in SVB were uninsured, meaning that those deposits
wouldn’tshouldn’t have been covered by FDIC insurance. That means any accounts with balances above $250K were facing the loss of their funds.But this is Silicon Valley Bank – this is where the elites place their bets on Silicon Valley unicorns. So we can’t have that.
In a hastily convened meeting between the FDIC, the Fed and the US Treasury, it was decided that all deposits would be covered, insured or not.
Crisis averted, right?
Wrong. It turns out that only SVB and Signature banks would be covered; if any other banks fail, like your bank, your community co-op in your hometown or state, or any other bank in flyover America far away from the Coastal elites – if they get into trouble (because people are moving their money into “protected” banks), then that’s not covered.
… That’s tough titties for you.
Here it is folks – from the mouth of the US Treasury Secretary herself:
Silicon Valley (mostly profitless unicorns incubated with printed money) are anointed and protected.
But your community bank can go fuck itself, and so can you.
Eat cake pleb. pic.twitter.com/o6rBFGghFi
— Mark Jeftovic, The ₿itcoin Capitalist (@StuntPope) March 17, 2023
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In a stunning admission, when asked point blank by Rep. James Lankford (R-OK) whether a community bank in his home state of Oklahoma would have uninsured depositors made whole the same way the Silicon Valley Unicorns did, Yellen had to come clean:
“A bank only gets that treatment if a super-majority of the Fed board, and I, in consultation with the President conclude that failure to protect uninsured depositors would create systemic risk to the banking system”
In short “not necessarily”.
While Yellen was bobbing and weaving around the question, Lankford stated it clearly:
“If you’re a depositor with a Big Bank, preferred by the Fed, you’re fully insured no matter what. If you’re a depositor with a small bank, you aren’t”.
Once again, the government is picking winners and losers; just like under lockdowns, when they shut down small businesses and forced everybody into Costco and Wal-Mart.
“It’s called stakeholder capitalism”, I’ve mused, “and you’re not a stakeholder”.
Well, this time they’ve blown up the banking system real good – and this time they may not be able to kick the can down the road.
They may not even be able to save the “Too Big To Fail” banks by the time this is all over.
This could be the early innings of the final breakdown of the financial system I’ve been warning about for almost two years, when I released The Crypto Capitalist Manifesto.
Since then, we’ve been in a crypto-winter, and starting a few months ago I started to sense a thaw.
In fact, the way things are playing out right now are so closely resembles what I put out in my most recent report, that it’s downright eerie.
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What to look for in the breakdown of the financial system
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Why Bitcoin was poised to break out of its slumber (written before it exploded 65% higher year-to-date and became the best performing asset of 2023)
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What the narrative would be from the establishment shills when it all came unglued, and
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Which stocks would be the leading sector in the next Bitcoin super-cycle
It was written in early January and when I compare it to what’s happening now, I kinda scare myself…Read The Bitcoin Bottom Report here.
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P.S I’ve mentioned previously that after the crypto winter was over, I would be doubling the price of The Bitcoin Capitalist Letter. With Bitcoin up 65% YTD, I think we’re there. When I get back from Costa Rica, I’ll be plugging in the new website and that’s when the price doubles. But you can still lock in the old rate, for life – right here.
Tyler Durden
Sat, 03/18/2023 – 14:00 -
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