- Vilches: Europe Hypnotized Into War Economy
Vilches: Europe Hypnotized Into War Economy
Authored by Jorge Viclhes via The Saker blog,
Thirty two years ago Germans enthusiastically took down the Berlin wall. Now, captured by cunning Anglo-Saxon global elites, Germans are helping other European “useful idiots” to erect a much higher and thicker wall to cut themselves off from Russia leading them into a war economy. But as Hungarian Prime Minister Viktor Orbán has warned… “the approach has clearly failed — sanctions have backfired — and our car now has 4 four flat tires” … Question: vehicles don´t carry more than 2 spare tires on them, do they? So, one quick and innocent way to explain such unfathomable European miscalculation is to assume the EU leadership is immersed in a deep hypnotic trance and just blindly following US-UK instructions under Stoltenberg-Johnson war-mongering policies. Per “The Telegraph”
Ref #1 https://www.rt.com/news/559682-johnson-uk-nato-ukriaine
Ref #2 https://www.rt.com/news/559785-orban-eu-gas-war-economy/
suicidal non-supply
The supply lines that up to 2022 successfully linked Europe and Russia took decades of very hard work to develop. This now means that almost all of such over-abundant contracts necessarily have no effective substitute because (a) no other vendors have such high quality at low price plus decades of vetting and proven experience + (b) the un-replaceable short freight distance and shipping time from nearby Russia. So, by definition, both (a) + (b) mean that today no equivalent supply lines could ever be found no matter how much Europe tried simply because it would be either too soon or too far …and always too hard and too pricey. So short cuts will be taken and corners rounded-off…. Been there, done that, got the T-shirt. The impact of the above cannot be overstated though as the now-broken Euro-Russian supply lines were essential for the Just-In-Time strategy that Europe and world markets still require and cannot wait years to develop and iron out. Logistics 101: proven experience and performance with excellent price plus quick delivery from nearby sources cannot be substituted fast enough, or possibly ever. On purpose, Europe´s worst enemies couldn´t have inflicted worse harm than what a US-UK mesmerized Europe (what else ?) is doing to itself.
So EU sanctions are now cutting off dozens of key and highly varied Russian produce without which Europe as we know it will cease to exist. This involves foodstuffs, minerals of every sort, energy re oil & gas & coal & refined products thereof, etc., etc., plus key technologies and products from space rocket engines to nuclear fuels. Even Roscosmos announced that Russia will withdraw from the International Space Station (ISS) project with the West after 2024 while by that time with an orbital station of its own. At any rate, the new European vendor problems for hundreds of products include each and every aspect of sales & procurement, sourcing & logistics, negotiations, pricing, contract terms, payment, banking procedures, sampling and testing, delivery pathway coordination, additional trucking, roads, vessels and inland waterways for shut down pipeline delivery, on-the-fly solutions for new problems, railroads, loading and unloading yards, ports, process alignment & upgrade, synchronization, scheduling, building and adapting key infrastructure, insurance, guarantees, new administrative matters, buffer storage, vendor vetting, multiple regulatory compliance, etc., etc. So the most efficient and swift Euro-Russian trade routines have today turned into logistical and management nightmares. Europe now and for the near future — in most unfavorable circumstances — needs to run unexpected risks to re-do all such hard work in a hurry and for every banned Russian product, not just coal & oil & nat-gas. And it is not a “plug & play” process either. It takes time. Tons of changes have to be made even after finding a trustworthy vendor. It is costly, cumbersome, and prone to project creep & fatigue. All fully unnecessary and chaotic.
No country in the EU is anywhere ready for any of the above, let alone all of Europe at the very same time with the very same deadline. Furthermore, an impaired Germany would mean a very different Europe something which at this late stage cannot be avoided even if Germans wanted to get their feet wet in a hurry. Jim Rickards now says that “Almost everything you heard about the war in Ukraine from U.S. media over the course of March, April, and May was a lie.” Furthermore, the Western news regarding the impact of the Ukraine war contained very few truths that can confuse just as much. Per Rickards “The economies of the U.S. and the EU are in or very near to recession. Inflation is out of control in the West and commodity shortages will lead quickly to food shortages and more empty shelves in supermarkets… as economic sanctions have backfired ”. And now labor unions add fuel to the fire fully knowing they have the leverage to worsen inflation which is the hottest political topic nowadays. So they now demand better working conditions “with protests turning up at all spots in the global supply chain, including railways, trucking, warehouses, and ports…” At any rate, today Russia is taking full control and will probably retain for itself what up until 2022 were Ukraine´s best assets. That includes its industrial core, its enormously large and specialized natural resources, a most fertile land reminiscent of the Argentine Pampas, and all the ports and the major rivers with Russian territory unscathed. No wonder Hungarian Prime Minister Viktor Orbán wants plain “out” of the current European non-strategy despite that Euroclear is raking in dozens of millions in profits from seized Russian bank accounts.
Ref #3 https://www.rt.com/russia/558846-us-uk-eu-sanctions/
Ref #5 https://dailyreckoning.com/needless-death-and-misery/
Ref #8 https://www.rt.com/business/559647-eurozone-profits-frozen-russian-assets/
Ref #9 https://www.rt.com/russia/559598-jens-stoltenberg-calls-allies-pay/
add a low Rhine…
The Rhine River directly affects trade and industrial logistics of several key European countries namely, Austria, Switzerland, Germany, France, and the Netherlands while indirectly affecting many others or, in some cases, all the others. In particular, the über-important German inland transportation system – and therefore its entire supply chains network – depends upon normal levels of Rhine River waters. Because it´s not only a matter of sourcing the right quality, quantity and price of any produce. It is just as important to receive it Just-In-Time at process destinations such as refineries or power plants as explained later. Simultaneously, all European stakeholders are competing with each other tooth and nail struggling to find, contract and retain exactly the same resources in order to solve the same unexpected problems all at once and by the same date. And it´s not only coal or oil or natural gas — and many other raw materials in and of themselves — but also for the means required to transport, deliver and process all of them.
So everybody and his sister would now in Europe be modifying the same things at the same time with the same resources by the same date. For example, looking for the very first – and certainly bad – resource, namely trucking fleets of every size and type and humongous amounts of EU-certified drivers thereof. This additional heavy truck traffic would require upgrading newer roads and building new ones. Also, the different processes required for these different commodities also require all-around modifications at refineries, new-feedstock power plants, petrochemical plants, etc., etc., etc. Furthermore, there were no plans for any of this nor for the abundant technical human resources required and/or vetted management staff. Managerially speaking, this is not a contingency. It is a fully unexpected European-wide revolution with a terribly demanding time frame and critical failures as the most probable result. This involves strategic value-chain upstream items with EU captive consumers cascading into multiple supply chain failures thru lack of nat-gas, rare earths, inert gases, potash, sulfur, uranium, palladium, vanadium, cobalt, coke, titanium, nickel, lithium, plastics, glass, ceramics, pharmaceuticals, ships, inks, airplanes, polymers, medical and industrial gases, sealing rings & membranes, power transmission, transformer and lube oils, neon gas for microchip etching, etc., etc.
Thousands of yet unknown people are needed to execute all of these projects with yet to be defined job descriptions, yet to be interviewed, hired, trained, teams put together, deployed, etc. Many oldies will be called back from retirement
For many good reasons – mostly obvious — roads & trucks many times cannot compete with seaborne or internal water-ways freight either by volumes shipped or final destination delivery requirements. Furthermore, the supply lines/production system is already set up in a given way and any change introduced to previous logistics is fully unforeseen. For instance, high-load storage facilities and high-consuming processing plants, refineries, power stations and the like are conveniently located for vessel access or pipelines or railways, not trucks. So, now with everyone scrambling for ultra-hard-to-find solutions, EU products will require higher transportation costs by, for instance, having to replace sintering ores with concentrates or pellets. And it is unlikely for higher costs to be absorbed by the market under current conditions of falling demand. So profit margins will get yet narrower – or negative – as already under heavy pressure from high energy prices and labor costs in an inflationary vicious cycle. Sooner or later this leads to either very high inflation, or recession… or even depression. Also, a tremendous food problem has arisen as a consequence of the EU sanctions, involving final produce and intermediate outcomes such as fertilizers which in turn affect yields.
hypnotized food
EU sanctions have prevented operations with Russian grain, including insurance and the admission of Russian ships to foreign ports and entry of foreign ships to Russian ports. Russia cannot solve that nor contribute to solving that in any way, shape, or form. Only the EU can solve that problem. What Russia can and will do is to develop its economy by counting on reliable partners instead of Western countries not willing or able to comply with the agreed terms of trade. No (Russian) gas no fertilizers, less (Russian) gas less fertilizers for everyone including Third World economies.
Higher oil prices – or no oil – mean more expensive distillates such as diesel oil required for farming food produce.
In view of less Russian gas, BASF has slashed ammonia production which is an essential component for fertilizers.
hypnotized energy
Up until Jan. 2022, coal (“brown” coal, the dirtiest of them all) was only responsible for 33% of power generation in Germany… but not anymore (more on that later). Let alone the case of oil & gas with ultra simplified door-to-door delivery of excellent, cheap products through quick and clean pipelines. BTW, the case of now badly-needed coal is probably the worst of all, as its complete phase-out was planned for 2030 but now fully reverted with de-commissioned coal-fired power stations most probably returning as Germany´s first line energy suppliers. Less Russian natural gas means less heating, less hot water, less power and less fertilizer among other important things. And the EU cannot print natural gas or Rubles.
“ Despite the aggressive Western sanctions… Russia has been very restrained as far as counter-measures are concerned. So after loudly saying that the EU wants nothing to do with Russian energy or Russian pipelines, the EU should hardly be upset if Russia is tired of laboring not to give them what they asked for, an economic divorce. The problem is Europe is now upset that it’s getting what it acted like it wanted.” – Yves Smith – “Naked Capitalism”
On a recent press conference Russia´s President Vladimir Putin explained that the EU energy security problem is definetly not Russia nor Gazprom. Very simply put: with long winters, less sun, low winds, and EU banks that will not finance fossil fuels investments, plus insurance companies that do not insure them, and local governments that do not allocate land plots for new projects, so then pipelines are not built… while demand keeps growing. Then for political reasons the Ukraine government shuts down a pipeline station. Then the Siemens-Canada problem as, by contract, turbines require regular maintenance and repairs. In sum, the EU has shut-down — on its own — two Russian pipeline routes as Ukraine and Poland effectively cut off the Yamal-Europe pipeline.
Ukraine overtly, Poland by refusing to pay under the new gas for roubles scheme. The EU has also sanctioned one turbine while not commissioning North Stream 2, thus completely tying down Gazprom´s hands. Furthermore, the documentation that Gazprom received from Canada and Siemens did not respond to the turbine sanctions-waiver questions. Also, Gazprom is unable to fully use another route as Ukraine has been rejecting its transit applications. In sum, Europe does not have a strategy. Add to that the shut-down of nuclear power stations. And as Foreign Minister Sergey Lavrov has said, Russia no longer cares to relate to Europe – or the West at large — as it is not “agreement-capable”.
As if all of the above were not enough, many EU members now have to deploy the DE-conversion from natural gas and the RE-conversion into polluting coal. This back-to-coal ´solution´ is (a) very dirty and against Europe´s Green Plan plus other climate pledges and regulations (b) ultra-expensive (c) a major industrial, logistical and social upheaval that would not make it by this coming winter soon knocking on the European doors, and probably not even for next winter 2023-2024. This separate – yet overlapping – set of major madhouse back-to-coal projects also imply enormous logistics risks and major modifications and tight schedules all around, bids, bidders, contract oversight, certification, commissioning, etc., etc., etc for which nobody involved is prepared, neither regulators, nor vendors, nor consultants or engineering firms, nor end users, nor households, nor labor unions, nor the industry at large.
hypnotized renewables
Renewables have various serious problems including their variable power generation limitations. For example, in low wind or low sun seasons such as 2021-2022 which Europe suffers today. Renewables also have very poor optics – “not in my back yard” — plus impact upon bird life with unavoidable and undesirable consequences. And although there is more to be said, let´s conclude with the all-important de-commissioning problem in view of their rather shortish life-span. Furthermore — in order to see the light of day — manufacture of renewables requires humongous loads of nat-gas, oil, coal, minerals and commodities, all of them necessarily sourced in Russia not anywhere else. Unless the problem were to be compounded and worsened on purpose something quite in fashion today in Europe. For instance, manufacturing of wind turbines requires thousands of tons of nickel and rare earth minerals. Also, any such large structures and components thereof are to be transported to temporary and final destinations — and erected — with Russian fossil-powered equipment. Such is also required for the inevitable regular maintenance and end-of-life decommissioning. Solar photovoltaic energy requires humongous amounts of silver beyond belief, a process which also consumes (Russian) fossil fuels in enormous quantities, including the manufacture of the mining equipment required. Furthermore, as soon as renewables in large quantities are added to any electrical grid, costs go up – not down — as they have to be backstopped by fossil-fueled thermal plants that today should also run on Russian fuels. Please understand and accept that the more renewables added, the more natural gas that is needed. People do not accept rolling brown-outs let alone black-outs, so fossil fuel backstops are mandatory. With current existing technologies, promoting fully counter-productive and subsidized renewables expansion as Germany has and continues to do is reckless. EV lithium batteries require lithium mining which in turn has a whole new set of problems to be resolved
hypnotized toilet paper
Per “Zeit On-Line” the new European hygiene status is now ready to deploy forces into rolling brown-out territory.
Is this another bad result of the hypnotic spell ? Ref #13 https://www.rt.com/business/559698-germans-warned-toilet-paper-shortage/
hypnotized fish´n´chips
Russian sanctions would leave British pubs without fish’n’chips.
Ref # 14 https://www.rt.com/news/559748-fish-chips-uk-sanctions/
bottom line
Rachel Marsden at RT has summarized it very precisely as follows: “The conflict in Ukraine risks creating the ultimate nightmare for Western elites: an alternative group of allies over which the West has no control, but with the capacity to offer opportunities that are competitive with what their own governments or countries are offering… Western elites are doubling down in Ukraine to save the world order that protects their own selfish interests, thinking that it’s the way to prevent a parallel option from emerging. It’s as simple as that. And they don’t care if it’s the average citizen who has to pay the price”. Ref #15 https://www.rt.com/russia/558490-liberal-world-order-explained/
By banning Russian produce, the EU will bring the European sourcing matrix down on its knees, something which by now has already dawned on the average European also realizing that – at the very best and if not corrupted — their political class is just a bunch of ignorant fools. With these ´Russian sanctions´ EU politicians have unnecessarily set Europe up for hundreds of overlapping, cross-borders, gargantuan projects impossible to fulfill simultaneously, with absurd sequencing and scheduling coordination, plus peremptory timing limitations and deadlines, with countless of well- synchronized engineering specialties and very risky, highly demanding logistics, plus overwhelming legal, political, and environmental aspects. Accordingly, this glorious mismanagement in a decisive decade has the whole EU economy fully at risk with the obvious additional pain of potentially making non-performing rushed and poorly designed modifications everywhere.
Furthermore, Europe will spend a fortune it cannot afford while probably deploying soon-to-fail and trouble full reconversion projects ending up with many half-finished facilities that will not be anywhere ready on time, or ever.
The EU strategy regarding Russian sanctions and arming Ukraine has failed miserably as Europeans are being un-relentlessly ashamed with EU leaders despicably cheating on them and everyone else among other things per non-compliance of the Minsk Accords. Ukraine cannot ever come anywhere close to winning this war, corruption is everywhere rampant and the more weapons Ukraine receives from the West the longer their war will last and the larger territory that Ukraine will lose.
Massive migrations to Club Med countries (mostly PIGS) are highly probable even starting during 2022
Per The Guardian, “…Come October, it’s going to get horrific, truly horrific…a scale beyond what we can deal with”.
Tyler Durden
Mon, 08/01/2022 – 02:00 - "Give Up Your Yacht Before Lecturing": Bolsonaro Sinks DiCaprio In Titanic Twitter Thread
“Give Up Your Yacht Before Lecturing”: Bolsonaro Sinks DiCaprio In Titanic Twitter Thread
Brazilian President Jair Bonsonaro gave Leonardo DiCaprio a lecture in hypocrisy, telling the virtue-signaling actor that he should ‘give up his yacht before lecturing the world‘ about the environment.
Of note, in January DiCaprio was pictured vacationing with friends on the $150 miullion “Vava II,” the largest yacht manufactured in Britain, which is estimated to produce 238kg of carbon dioxide per mile – as much as the average British car emits in two months.
@LeoDiCaprio climate around your fakeness is changing rapidly..
😂😂 https://t.co/DZHKpXy86m— Civilizedbeast (@Footyfied) January 10, 2022
https://platform.twitter.com/widgets.js
Bolsonaro was responding to DiCaprio, who tweeted that the Amazon rainforest has “faced an onslaught of illegal deforestation at the hands of extractive industry over the last 3 years.”
“You again, Leo?” Tweeted Bolsonaro. “I could tell you, again, to give up your yacht before lecturing the world, but I know progressives: you want to change the entire world but never yourselves, so I will let you off the hook.“
“Between us, it’s weird to see a dude who pretends to love the Planet paying more attention to Brazil than to the fires harming Europe and his own country,” he continued.
– You again, Leo? This way, you will become my best electoral cable, as we say in Brazil! I could tell you, again, to give up your yacht before lecturing the world, but I know progressives: you want to change the entire world but never yourselves, so I will let you off the hook. https://t.co/FxCnqhFv6D
— Jair M. Bolsonaro (@jairbolsonaro) July 28, 2022
https://platform.twitter.com/widgets.jsThe trouncing continues (emphasis ours):
But don’t worry, Leo, unlike the places you are pretending not to see by brilliantly playing the role of a blind man, Brazil is and will carry on being the nation that most preserves. You can carry on playing with your Hollywood star toys as we do our job.
Actually, in my government average deforestation is way lower than it was in the past, when the crook turned candidate that your Brazilian buddy supports was in power.
It’s clear that everyone who attacks Brazil and its sovereignty for the sake of virtue signaling doesn’t have a clue about the matter. They don’t know, for instance, that we preserve more than 80% of our native vegetation or that we have the cleanest energy among G20 nations.
It’s also clear that you don’t know that my government announced a new commitment to eradicate illegal deforestation by 2028, and not by 2030 as most countries. Or maybe you do know that, but for some reason pretend to be ignorant. I hope you not getting too much for this role.
If its within your reach, we would love to see you stop spreading missinformation. In the recent past, you used a 2003 image to talk about the Amazon wildfires allegedly happening in 2019 and was exposed, but I have forgiven you. So please go and sin no more.
By the way, what do you think about the hitting coal market in Europe? And what about Greta Timberlake, do you know what she has been up to lately and what she has to say about it? If I was hosting a barbecue in my house, I’m sure she would be yelling “How dare you?”.
* * *
When being a hypocrite, remember – don’t look up!
Tyler Durden
Mon, 08/01/2022 – 00:05 - Escobar: How Comfortable Are You With The US Dollar?
Escobar: How Comfortable Are You With The US Dollar?
Authored by Pepe Escobar,
Going To Samarkand
The SCO and other pan-Eurasian organizations play a completely different – respectful, consensual – ball game. And that’s why they are catching the full attention of most of the Global South.
The meeting of the SCO Ministerial Council in Tashkent this past Friday involved some very serious business. That was the key preparatory reunion previous to the SCO summit in mid-September in fabled Samarkand, where the SCO will release a much-awaited “Declaration of Samarkand”.
What happened in Tashkent was predictably unreported across the collective West and still not digested across great swathes of the East.
So once again it’s up to Russian Foreign Minister Sergei Lavrov to cut to the chase. The world’s foremost diplomat – amidst the tragic drama of the American-concocted Era of Non-Diplomacy, Threats and Sanctions – has singled out the two overlapping main themes propelling the SCO as one of the key organizations on the path towards Eurasia integration.
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Interconnectivity and “the creation of efficient transport corridors”. The War of Economic Corridors is one of the key features of the 21st
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Drawing “the roadmap for the gradual increase in the share of national currencies in mutual settlements.”
Yet it was in the Q@A session that Lavrov for all practical purposes detailed all the major trends in the current, incandescent state of international relations. These are the key takeaways.
How comfortable are you with the US dollar?
Africa:
“We agreed that we will submit to the leaders for consideration proposals on specific actions to switch to settlements in national currencies. I think that everyone will now think about it. Africa already has a similar experience: common currencies in some sub-regional structures, which, nevertheless, by and large, are pegged to Western ones. From 2023, a continental free trade zone will start functioning on the African continent. A logical step would be to reinforce it with currency agreements.”
Belarus – and many others – eager to join the SCO:
“There is a broad consensus on the Belarusian candidacy (…) I felt it today. There are a number of contenders for the status of observer, dialogue partner. Some Arab countries show such interest, as do Armenia, Azerbaijan and a number of Asian states.”
Grain diplomacy:
“In regard to the issue of Russian grain, it was the American sanctions that did not allow the full implementation of the signed contracts due to the restrictions imposed: Russian ships are prohibited from entering a number of ports, there is a ban on foreign ships entering Russian ports to pick up export cargo, and insurance rates have gone up (…) Financial chains are also interrupted by illegitimate US and EU sanctions. In particular, Rosselkhozbank, through which all the main settlements for food exports pass, was one of the first to be included in the sanctions list. UN Secretary General A. Guterres has committed to removing these barriers to addressing the global food crisis. Let’s see.”
Taiwan:
“We do not discuss this with our Chinese colleague. Russia’s position on having only one China remains unchanged. The United States periodically confirms the same line in words, but in practice their ‘deeds’ do not always coincide with words. We have no problem upholding the principle of Chinese sovereignty.”
Should the SCO abandon the US dollar?
“Each SCO country must decide for itself how comfortable it feels to rely on the dollar, taking into account the absolute unreliability of this currency for possible abuses. The Americans have used this more than once in relation to a number of states.”
Why the SCO matters:
“There are no leaders and followers in the SCO. There are no situations in the organization like in NATO, when the US and its closest allies impose one line or another on all other members of the alliance. In the Shanghai Cooperation Organization, the situation that we are currently seeing in the EU does not arise: sovereign countries are literally being ‘knocked out’, demanding that they either stop buying gas or reduce its consumption in violation of national plans and interests.”
Lavrov was also keen to stress how “other structures in the Eurasian space, for example, the EAEU and BRICS, are based and operate on the same principles” of the SCO. And he referred to the crucial cooperation with the 10 member-nations of ASEAN.
Thus he set the stage for the clincher:
“All these processes, in interconnection, help to form the Greater Eurasian Partnership, which President Vladimir Putin has repeatedly spoken about. We see in them a benefit for the entire population of the Eurasian continent.”
Those Afghan and Arab lives
The real big story of the Raging Twenties is how the special military operation (SMO) in Ukraine de facto kick-started “all these processes”, as Lavrov mentioned, simultaneously leading towards inexorable Eurasia integration.
Once again he had to recall two basic facts that continue to escape any serious analysis across the collective West:
Fact 1: “All our proposals for their removal [referring to NATO-expansion assets] on the basis of the principle of mutual respect for security interests were ignored by the US, the EU, and NATO.”
Fact 2: “When the Russian language was banned in Ukraine, and the Ukrainian government promoted neo-Nazi theories and practices, the West did not oppose, but, on the contrary, encouraged the actions of the Kyiv regime and admired Ukraine as a ‘stronghold of democracy.’ Western countries supplied the Kyiv regime with weapons and planned the construction of naval bases on Ukrainian territory. All these actions were openly aimed at containing the Russian Federation. We have been warning for 10 years that this is unacceptable.”
It’s also fitting that Lavrov would once again put Afghanistan, Iraq and Libya in context: “Let us recall the example of Afghanistan, when even wedding ceremonies were subjected to air strikes, or Iraq and Libya, where statehood was completely destroyed, and many human lives were sacrificed. When states that easily pursued such a policy are now making a fuss about Ukraine, I can conclude that the lives of Afghans and Arabs mean nothing to Western governments. It’s unfortunate. Double standards, these racist and colonial instincts must be eliminated.”
Putin, Lavrov, Patrushev, Madvedev have all been stressing lately the racist, neocolonial character of the NATOstan matrix. The SCO and other pan-Eurasian organizations play a completely different – respectful, consensual – ball game. And that’s why they are catching the full attention of most of the Global South. Next stop: Samarkand.
Tyler Durden
Mon, 08/01/2022 – 00:00 -
- How Much Land Does The US Military Control In Each State
How Much Land Does The US Military Control In Each State
The United States spends an unparalleled amount of money on its military – about $778 billion each year to be precise.
Additionally, as Visual Capitalist’s Avery Koop details below, the U.S. military also owns, leases, or operates an impressive real estate portfolio with buildings valued at $749 billion and a land area of 26.9 million acres, of which around 98% is located within the United States.
This visual, using data from the Department of Defense (DoD) reveals how much of each state the U.S. military owns, leases, or operates on.
This map visualizes the share of a state comprised by military sites, which the Department of Defense defines as a specific geographic location that has individual land parcels or facilities assigned to it. The geographical location is leased to, owned by, or otherwise under the jurisdiction of the DoD.
What is Military Land Used For?
The DoD is the larger government umbrella under which the military falls and the department operates on over 26 million acres of land stateside.
To further break it down the U.S. military is divided into four main branches:
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Army
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Navy
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Air Force
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Marine Corps
There is also the Space Force, the Coast Guard, and the National Guard. However, most of the land is dedicated to the Army, which is the military’s largest branch.
Military bases are used for training and housing soldiers, testing weapons and equipment, conducting research, and running active operations, among other things. A large majority of the square footage is actually designated for family housing.
For example, Fort Bragg, North Carolina, which is one of the most famous U.S. Army bases, is home to more than 260,000 people including the families of soldiers. The base, which is virtually its own city, is the largest U.S. Army installation with 53,700 troops—nearly 10% of the Army—and over 14,000 civilian employees.
Which States Have the Biggest Military Presence?
Looking at the largest total sites, the top 10 combined cover an astonishing 13,927,470 acres, larger than 10 individual states including New Jersey, Massachusetts, and Hawaii.
Here’s a look at the size of the military’s sites in the top 10 states and how much of that state’s land the sites take up:
In Hawaii, 5.6% of the state belongs to the military. The historic Pearl Harbor on the island of Oahu is still an active base, housing both the Navy and the Air Force.
In the nation’s capital, Washington D.C., 3.9% of the small district is owned or operated on by the military—there are approximately 18 independent sites in the city.
Most of the DoD’s land is in the southwestern United States. One major benefit is that there are areas large enough in these states to test hugely destructive weapons without harming anyone. The atomic bomb was first detonated in the middle of nowhere in New Mexico at the White Sands Missile Range, the biggest military site in the country.
Almost all of the largest military sites fall under the Army branch, which has over 415,000 active personnel. Here’s a look at the U.S. military breakdown in terms of population:
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Active Duty:
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Army: 415,967
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Navy: 304,118
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Marine Corps: 146,728
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Air Force (also includes Space Force): 273,983
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Coast Guard: 38,829
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Reserves: 438,645
Beyond just the presence of soldiers across the states, the military also represents a lot of jobs. In total, both on U.S. soil and globally the DoD provides nearly 2.9 million jobs from active duty troops to civilian positions within the military. In California, for example, the military provides over 62,000 civilian jobs.
U.S. Military Presence Beyond its Borders
When it comes to all the land that the military both owns and leases globally, the figure is huge, coming out to 26.9 million acres. The Army controls 51% of the DoD’s land, followed by the Air Force’s 32%.
Military land owned by the DoD can be found outside the U.S. in 8 territories and 45 foreign countries. Here’s a breakdown of where the majority of the U.S.’ foreign bases are:
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Germany: 194 sites
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Japan: 121 sites
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South Korea: 83 sites
In places where there are ongoing conflicts, the U.S. has a few permanent forces. In regular times in Ukraine, there are 23 active duty soldiers permanently stationed. In Russia there are 41 active duty U.S. troops. However, President Joe Biden has recently announced that he will increase the U.S.’ military presence across Europe because of the war in Ukraine.
Tyler Durden
Sun, 07/31/2022 – 23:30 -
- China To Pelosi: You Will 'Perish' Over Taiwan
China To Pelosi: You Will ‘Perish’ Over Taiwan
Authored by Gordon Chang via 19fortyfive.com,
“The position of the Chinese government and people on the Taiwan question is consistent, and resolutely safeguarding China’s national sovereignty and territorial integrity is the firm will of the more than 1.4 billion Chinese people,” Chinese ruler Xi Jinping told President Joe Biden during their phone call on July 28, according to the Chinese foreign ministry. “The public opinion cannot be defied. Those who play with fire will perish by it.”
“Perish”?
Xi’s dire-sounding warning, issued in connection with reports that House Speaker Nancy Pelosi plans to go to Taiwan, suggests either that Xi Jinping perceives Biden to be so weak that he can push him around or that China’s internal problems are so severe that the Communist Party must create an external crisis to distract the Chinese people. In the worst case, both are true.
For about a decade, Chinese leaders have believed the United States has been in terminal decline, and their regime will soon ascend to global dominance.
Biden, at least in their minds, has confirmed this view.
His calamitous withdrawal from Afghanistan and his failure to stop Russia’s invasion of Ukraine left Beijing thinking that it can now do what it wants to Taiwan.
At the same time, Xi’s threat could be the result of regime insecurity. He needs an external crisis so that the Chinese people won’t think too much about the internal ones. Inside China, coronavirus continues to infect the population, and Xi’s “dynamic zero-COVID” policy is causing widespread resentment as well as undermining the ailing economy.
China’s economy, despite the report of 0.4% year-to-year growth in the second quarter, is almost certainly contracting.
At the same time, the debt crisis, delayed for more than a decade, has been hitting the country. Evergrande Group and other large property developers are defaulting on bond and other obligations, apartment projects remain unfinished, buyers of flats are participating in a nationwide “mortgage boycott” by not paying banks, the boycott has spread to suppliers of the developers, and financial institutions across the country are tight on cash. There are bank runs, especially in Henan province, but banks in the financial capital of Shanghai are also in poor condition.
Because property sales have plunged—the sales of the top 100 developers fell 50.3% in the first half of this year—local governments, dependent on property revenue, cannot meet obligations.
A Chinese entrepreneur this month told me that local cadres are trying to extort tens of millions of dollars from his firm. The fiscal problems at lower levels mirror those at the central government. Xi, under the banner of his “Common Prosperity” program, has been extracting tens of billions of dollars from tech giants such as Tencent and Alibaba.
Xi is also leading a nationwide mobilization effort, something signaled by the amendment of China’s National Defense Law, effective the beginning of last year, to transfer power from civilian to military officials, specifically from the central government’s State Council to the Communist Party’s Central Military Commission. The State Council will no longer supervise the mobilization of the People’s Liberation Army, which reports to the Party.
Although the Party has always been in control, the amendment contemplates the mass mobilization of society for war. Owners of private businesses are now being told to manufacture what the Party dictates, a move seen as building up stockpiles for conflict.
Many American analysts say that Speaker Pelosi is provoking a crisis with her reported plans to visit self-governing and democratic Taiwan, which Beijing claims is sovereign Chinese territory. That view is incorrect.
Xi Jinping needs no “provocation” from the Speaker to lash out. Currently, Chinese forces, already below the Line of Actual Control in Ladakh, are preparing to take more Indian territory in the Himalayas. In June, Beijing renewed attempts to block resupply of a Philippine outpost at Second Thomas Shoal, in the South China Sea. In the East China Sea on July 29, four Chinese warships entered Japanese sovereign water around the disputed but Japanese-controlled Senkaku Islands.
Furthermore, as Chairman of the Joint Chiefs of Staff General Mark Milley pointed out while in Sydney, “Chinese military activity is noticeably and statistically more aggressive than in previous years.” On May 26, for instance, a high-performance Chinese fighter jet accelerated and flew close to an Australian Royal Air Force P-8 reconnaissance aircraft in international airspace in the South China Sea region and released chaff, which was ingested into one of the P-8’s two engines. The Chinese jet also fired flares. This is believed to be the first time any military has used chaff and flares in this manner.
The Chinese defense ministry on July 28, in connection with Pelosi’s reported trip to Taiwan, stated “action is the most powerful language.” Chinese journalist Hu Xijin, who is often used to signal regime positions, on July 29 detailed the circumstances in which China’s military is prepared to bring down the Speaker’s plane.
There are no longer any safe options.
The most dangerous, at least in the long run, is for Speaker Pelosi to back down. By backing down, she will legitimize the most belligerent elements in the Chinese capital by showing everyone else that threats work.
This is now more than just a test of will.
Tyler Durden
Sun, 07/31/2022 – 23:00 - "I Don’t Care, I Love It!"
“I Don’t Care, I Love It!”
By Peter Tchir of Academy Securities
I Don’t Care, I Love It!
This market took everything that was thrown at it and just ran with it! “Bad” news helped markets rally and “good” news helped even more. Whatever was thrown at the market after Tuesday was absorbed and turned into a reason to celebrate. Trading with “Icona Pop” playing in the background set the right tone for this market!
The Fed
There still seems to be a lot of contention about what the Fed said (or more accurately, meant to say). That is important as the Fed will try and fine tune their message in the coming days and this highlights what we discussed in Did He, Or Didn’t He?
- Did we reach the Neutral Rate? I have seen some long diatribes about why we haven’t reached the neutral rate, at least not in this inflation environment, but we are closer to a long-run neutral rate than not. Parts of the economy have the risk of rolling over, so I suspect that we are done (or almost done) with tightening. I was a bit surprised that the Fed seemed to indicate that too, but it fits with my view on the path of rates so I’m not going to fight against what the “correct” neutral rate is and “around here” seems plausible.
- Balancing Inflation versus Recession risks. I keep coming back to this “disconnect.” What was actually said seemed to tilt slightly to the inflation fighting side. He said multiple things, including (specifically) that we might need unemployment to rise and the economy to slow to achieve reduced inflation. I cannot see any way to read the transcript and not come up with Powell leaning to the inflation fighting side at the expense of the economy. But it was more believable (or even natural) when he sounded dovish. There was a je ne sais quoi about how he delivered dovish versus hawkish messages. Maybe I’m imagining it, but the “inflation fighting” comments sounded more forced than the “data dependent” and “balanced” comments. Additionally, and rightfully so, the market seems to be expecting worse future data than the Fed. So, for the Fed, data dependency means they will examine the data and react to it, but the market decided it means that we will get weaker than expected data, so the Fed reaction function will be to take their foot off the brake.
- Fed Speak. A few members of the Fed have already commented, and overall, their message struck me as trying to put the hawkish message front and center (market reaction was – I Don’t Care – I Love It!)
The market has likely interpreted the Fed as too dovish relative to what they are trying to achieve, but that is difficult to fight given that the central bank has been a friend of the markets far more often than not for the past 25 years or so!
Inflation expectations. One thing to watch is inflation expectations. The St. Louis Fed 5-year, 5-year forward finished the week back at 2.33% (up from 2.1% where it was during July and higher than where it was for most of 2021). University of Michigan 5–10-year inflation expectations missed estimates and stopped their recent decline. That measure was taken before the Fed spoke, so there could be upward pressure on that.
Both market and survey measures of inflation have been moving in the right direction for the Fed, but if those metrics reverse, the Fed may have to adjust their message. This isn’t a “tomorrow” risk, but something to watch closely for in the coming weeks.
Losing Money with Inside Information
If I knew the Q2 GDP number in advance, I would have lost money. I thought that for a small negative, we could rally. I would have bet that a larger negative number, coupled with further downward revisions to Q1, would have caused some selling pressure. That may have even been briefly correct as markets initially embraced the weakness. However, the markets once again latched on to the “lower yields are great for stocks” concept, which I don’t think will work out as well this time as it did in 2020 (Celsius 233).
The Yield Curve
As previously mentioned, we have gone back to the trade where high beta/future potential growth gets rewarded with every tick lower in bond yields.
Heck, the 2s versus 10s finished the most negative it has been, but “I don’t care, I love it” seems to apply here as well. I struggle to embrace the bad news is good news trade and am skeptical that a recession will be moderate enough that dovish Fed policy will outweigh economic or earnings risks, but here we are.
The Return of TINA
I did hear a lot of chatter that There Is No Alternative (TINA) is back in play. It seems likely that investors, collectively, but especially total return/alpha generators are too underweight risk. There were certainly enough examples of companies popping on earnings to support that.
On the flip side, aggressive funds have continued to get inflows all the way down and I saw as many or more indicators pointing to overbought rather than oversold (especially by the end of last week).
On the earnings front, the messaging has been better than I feared, so that is good, but to the extent problems really accelerated this quarter (it was only Tuesday when some warnings linked to the consumer pushed markets down), the entire story isn’t over.I Crashed my Car into the Bridge. I Don’t Care, I Love It!
Some of the most shorted stocks and assets performed the best last week.
I just want to highlight Ethereum. Yes, there is a “merge” that some think will help a lot, but it jumped 66% in the last two weeks of July. Yes, 66% doesn’t look like a lot on the chart since Ethereum has been pummeled, but in the real world, 66% in a couple of weeks is a lot.
Charts like this scare me because it seems to indicate the “get rich quick” mentality is getting traction again. I don’t like that mentality, but if it has momentum, you don’t want to fight it!
I think what I like so much about this song is how the lyrics seem bad, but the music and singing are so upbeat, it is impossible not to get enthusiastic.
“I crashed my car into the bridge. I watched, I let it burn…I don’t care, I love it!”
Watching so many altcoins do so well for example, after having seemingly been left for dead, is either an opportunity, an indication that animal spirits are fully back in control, or is something to be watched very nervously (while not stepping in the way).
“I Threw your Stuff into a Bag and Pushed it Down the Stairs”
There is so much I could say about this line, but even the T-Report has some self-preservation mechanisms.
Sustainability is Inflationary Near-Term
Senators Schumer and Manchin announced a reconciliation deal that will raise taxes (mostly for corporations if their calculations are correct) and will fuel spending on energy production. There is no guarantee that the bill passes, but if it does, I don’t see how the spending on energy isn’t inflationary at this moment in time. Any new production will take time to come on-line. Sustainable energy eventually can be deflationary, but for now there will be a rush to buy concrete, steel, lithium, etc.
I keep reading headlines that the bill would address inflation, but I haven’t come across an argument about why it helps inflation in the next year? Maybe I’m reading the wrong sources, but I think this bill could spur another round of commodity inflation.
Some “Nagging” Credit Concerns
We’ve seen the housing data continue to deteriorate. Yes, I sound like a broken record, but markets didn’t care about that this week. I’m also hearing that “real-time” data, which I have limited access to, is indicating an uptick in delinquencies on credit cards and auto loans. When I look at the data I have available, I see a slight upturn, but not enough to set off the alarm bells. Just something to watch.
Similarly, it has been difficult to watch what has been happening in European credit markets and not experience a modicum of concern.
The pressure on Italian debt relative to German debt eased a bit. Europe outperformed the U.S. recently on credit spreads as both markets rallied.
That is comforting, but bears scrutiny.
It looks like Germany in particular will be hit by energy restrictions this year. That will affect their economy and their industry. Some of that slack could be picked up globally (including in the U.S.) which may explain why this is trading a bit like a zero-sum game (what Europe loses, someone else gains), but there is a risk that Europe gets bad enough that it drags down the global economy and global markets.
Bottom Line
There has been just enough good news on earnings that I have to respect that companies may be very resilient and if the Fed is easing off the brake, then we could avert the spiral about which I am concerned. Certainly, the wealth effect is back to moving in the right direction, though I’m dubious in the underpinnings of that rally.
I really don’t like the days where “bad news” turns out to be good, but it is difficult to step in front of that freight train which has worked quite well for much of the past few years (like many other things, it seems to work well most of the time, with a few abrupt and severe reversals).
I like buying one-month puts and calls on equities. I think we are at an inflection point.
- I can paint a story about why stocks will give up last week’s gains and head towards new lows (layoffs just starting, earning warnings yet to come, tapped out consumer, excess inventories, resurgence in commodity prices coupled with Fed hawkish leanings, etc.). That scenario feels more “real” to me.
- But, the “everything is good” scenario could play out. First comes TINA then comes FOMO. The Fed lets the economy run hot. We get some stimulus. China sorts itself out. Housing reaches a level where buying resumes across the board. More people get forced into the market. The market bounce lets companies spend again. The virtuous cycle starts again. I find this one less believable, but am reluctant to fight it.
So, with VIX back to 21, trying to capture a big move in either direction is compelling to me.
Overweight commodities again! If the stimulus is going to go through, I want to own the commodity complex. Emerging Markets (particularly Latin America) should also benefit.
Companies of the “past” will be the companies of the “future.” With EV incentives a part of any stimulus plan, we could see a surge in purchases there (though a chunk of that will be pulling forward demand rather than creating new demand, but that is a story for another day). With the ever-increasing number of EV offerings, there is room for growth both at the “new” EV centric companies, but also for the traditional autos. I own some of them and will be adding more. The same theory fits across energy and other areas, but they are already picked up in my “commodity resurgence” theme.
I still like yield products, though with the 10-year Treasury back to 2.65%, I’d lean towards credit and structured products. Credit has room to tighten and will benefit from stable yields. If yields rise a little, which seems likely given where they are, credit spreads could offset that.
Markets and even the economy continue to be volatile, illiquid, and reactionary. I wish things would get easier sooner than later, but I expect the next few weeks to be more of the same.
Tyler Durden
Sun, 07/31/2022 – 22:30 - The New Age Of Orwellianism
The New Age Of Orwellianism
Authored by Josh Hammer via The Epoch Times,
Community organizer and left-wing social activist Saul Alinsky wrote, in his 1971 book “Rules for Radicals,” that “he who controls the language controls the masses.”
Alinsky, whose work profoundly influenced at least one notable fellow Chicagoan, Barack Obama, was in that quip channeling George Orwell’s famous dystopian novel, “1984.”
“Newspeak,” the language of Orwell’s fictional single-political party superstate, was a tool devised for monitoring the people’s communications, prosecuting “thoughtcrimes,” and ultimately controlling and dictating the people’s very beliefs.
Conservatives have taken pleasure in poking fun at the modern Left’s “Orwellian” tendencies—perhaps too much, actually, as overuse of the accusation has had the effect of limiting its potency. But as the woke ideology metastasizes within the American Left like the cancer it is, and as censors increasingly clamp down on anything sniffing of dissent to the regime’s orthodoxy, it is now clear that we are in a new age of Orwellianism.
In this new age, the regime and its enforcers pursue the suffusion of its orthodoxy at any cost, gaslighting dissenters into not believing their own lying eyes.
Last week, new governmental data revealed that the American economy, measured by gross domestic product, contracted for the second straight quarter.
That was, up until perhaps two weeks ago, the universally accepted definition of what constitutes a “recession.” This was not a partisan issue; indeed, well-known liberal, Democratic Party economists have frequently defined recession in precisely these terms. Back in 2008, President Joe Biden’s current National Economic Council director, Brian Deese, stated: “Of course economists have a technical definition of recession, which is two consecutive quarters of negative growth.” And in 2019, top Biden economic adviser Jared Bernstein said that a “recession” is “defined as two consecutive quarters of declining growth.”
Democrats are now singing a different tune.
White House press secretary Karine Jean-Pierre has stubbornly refused to concede that America is now in an economic recession. Deese apparently also disagrees with his old self of 2008: Following the release of the data evincing the second straight quarter of economic contraction, Deese stipulated that we are “certainly in a transition,” but also added that “virtually nothing signals that this period … is recessionary.” The ruse is transparent and obvious to the point of comedy. As famed investor David Sacks tweeted: “A lot of people are wondering about the definition of recession. A recession is defined as two consecutive quarters of negative GDP growth if a Republican is president. The definition is far more complicated and unknowable if a Democrat is president.”
Democrats similarly seem interested in changing the definition of “inflation,” which currently sits at four-decade highs and is disproportionately responsible for Biden’s dismal job approval ratings and Democrats’ unfavorable political outlook this fall. The widely accepted economic definition of inflation is when there is too much money chasing too few goods. The way to tamp down inflation is thus to limit the money supply and/or increase the production of goods.
Just last week, around the same time as when the United States formally entered a recession, Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) finally reached an agreement on a version of the White House’s long-sought after Build Back Better domestic initiative. But Democrats renamed the bill: It is now not called Build Back Better but the Inflation Reduction Act.
And the revised bill includes new government expenditures to the tune of nearly $400 billion in energy- and climate-related spending. Authorizing such a fiscal boondoggle is the precise opposite of limiting the money supply. It is the logical equivalent of trying to put out a fire with a blowtorch.
Remarkably, it is the same ideologues who are eager to change the well-accepted definitions of “recession” and “inflation” who remain perplexed as to what exactly a “woman” is. In March, then-Judge Ketanji Brown Jackson, during her Senate Judiciary Committee confirmation hearing to replace the retiring Justice Stephen Breyer on the Supreme Court, pointedly refused to define what a “woman” is. Her excuse was that she is “not a biologist.” Related, in Matt Walsh’s excellent new documentary, “What Is a Woman?,” the myriad “gender studies” professors and gender ideology-bewitched “doctors” interviewed by Walsh invariably define a “woman,” in circular fashion, as being “someone who identifies as a woman.”
Whether it is a Supreme Court justice herself or the vogue flatulence that now constitutes “gender studies” in the American academy, then, the Left is incapable of defining what a “woman” is. That confusion appears to be ubiquitous: Lia Thomas, the biological man who has been wreaking havoc in women’s collegiate swimming, was even nominated for the 2022 NCAA Woman of the Year award. Alinsky would be proud of such an imperious enforcement of regime-approved orthodoxy; “he who controls the language controls the masses,” after all.
The Left’s fundamental problem is that its haughtiness, fervor and zeal for gaslighting us sane Americans is belied by its unpopularity. It is curious that the Left can talk and act this way when its most notable avatar, Biden, is as severely unpopular as he currently is. Perhaps the Left will be chastened by its impending November defeats at the ballot box. But don’t bet on it.
Tyler Durden
Sun, 07/31/2022 – 22:00 - LA Landlords Call For End To Eviction Moratorium
LA Landlords Call For End To Eviction Moratorium
By Jazz Shaw of Hotair.com
There are more protests taking place in Los Angeles this month, but for once they don’t have anything to do with racism, high gas prices, or any other common complaints coming from the public these days. The people doing the protesting are landlords who are facing bankruptcy and the loss of their properties because tenants are still not paying their rent. They’re getting away with this because the city of Los Angeles extended its eviction moratorium for another full year until August of 2023, despite the state’s moratorium having expired in June. And the landlords are placing the blame on the City Council and Mayor Garcetti rather than the delinquent renters. (CBS News)
At a news conference at City Hall, landlords say the moratorium could push some of them into bankruptcy and foreclosure because it doesn’t allow them to collect rent and some of their tenants are taking advantage of the situation.
“Our home has been stolen from us so that tenants, one of whom owns a DeLorean, can go to Burning Man and rent yachts for birthday parties and sail up in hot air balloons,” property owner Liz Reckart said. “Our home has been stolen from us, not by our tenants, but by the overly broad policies created under Mayor Eric Garcetti and upheld by the majority of our City Council.”
I’m sure that not all of the delinquent tenants fall into the same category as Liz Reckart’s renter who drives a DeLorean to Burning Man so they can go on hot air balloon rides. But the majority of them really should have started paying their rent again long before now.
I’ve been writing about the coming eviction crisis since 2020 because everyone who studies these situations knew this was on the horizon. Now it’s here. The economic restrictions associated with the pandemic are almost entirely over in Los Angeles, just as they are in the rest of the nation. Businesses have reopened, the schools are open, and people are out and about largely as they were before the virus arrived in America. Los Angeles even backed down on imposing a renewed mask mandate recently.
The federal aid for housing during the pandemic is largely gone. And that aid was supposed to benefit landlords as well as tenants so they wouldn’t lose their property. In other words, all of those tenants should, by now, have been able to start making regular rent payments and begin paying back what they owe in back rent. But it’s an unfortunate reality that there will always be a certain percentage of people who will take advantage of a situation if they can. With the city extending the moratorium for another year, some people are clearly just viewing this as another year of “free rent” before they wind up having to move out and look for a new apartment.
This is likely just another example of the typical thinking of liberal politicians. They love giving away “free money” and “free stuff.” They believe it makes voters more eager to reelect them, and in some cases, they are probably right. But now they are crushing the ability of landlords, many of whom are of the “mom and pop” type with only one or two properties, to continue to do business. It was the government that shut the state and the country down and it was the government that had to be responsible for cleaning up the mess that was caused. But Los Angeles isn’t supposed to be shut down now. It’s supposed to be back to business. And business includes having people pay their rent or risk being removed from their rental property.
Tyler Durden
Sun, 07/31/2022 – 21:00 - Pelosi Is Irrelevant: China Was Already Planning An Invasion Of Taiwan
Pelosi Is Irrelevant: China Was Already Planning An Invasion Of Taiwan
Would China really commit to an impromptu war with Taiwan over Nancy Pelosi, a person who amounts to nothing more than a political smudge in the history books? No, they wouldn’t, but they would be happy to use her diplomatic visit to Taiwan as a pretense for invasion.
The timing for Pelosi’s visit to Taiwan has not been released and will likely remain classified until the event. China has announced live fire drills this week in the Taiwan Strait as a show of force and a state run newspaper has even suggested that the CCP has the right to shoot Pelosi’s plane down (If the CCP is hoping this will scare the American public, they might want to consider again that it’s Pelosi on the plane; i.e. no one cares). China has also insinuated that direct invasion will take place if the visit occurs.
A US carrier strike group is moving near Taiwan after being deployed from Singapore and tensions are high. Ironically, Democrats chastised Donald Trump for “upsetting” Chinese/US relations over Taiwan only a couple years ago, and now they are one-upping him.
According to an alleged Russian intel leak in 2021, the CCP was already planning a forced annex of the island nation (that the Chinese claim is not a nation) for the fall. The leak from Russia’s FSB has not been verified, but it does parallel the increase in Chinese naval activity in the region, along with even more aggressive rhetoric than usual against Taiwan.
The Russian invasion of Ukraine perhaps triggered a pause in China’s plans, but not a complete reversal. The increase in joint Russian and Chinese naval drills around Japan and Taiwan suggest that a Taiwan event will not be limited. It could spread north to the Sea of Japan, where China and Russia would seek to nullify a response from US bases.
Yes, this would be quite an escalation and it’s far more likely that China would play the long game by waiting for US and European economic turmoil to degrade their ability to respond to a regional conflict. Of course, there is something to be said for the element of surprise.
Timing is also a major consideration for China. Weather cycles in the Taiwan Strait make a naval invasion difficult to maintain as dangerous storms rip through the area for a large part of the year. September and October are the key months when the weather is most advantageous for Chinese naval operations. Extreme weather fronts can disrupt radar, communications, thermal vision, night vision, drones, air support and obviously normal visibility, making intricate offensive actions very risky.
It’s interesting that Pelosi appears to be scheduling her visit sometime in the next month, so close to when weather conditions are the most ripe for a Chinese attack. Typhoons are expected to strike Taiwan through August and then dissipate in September/October when invasion is preferable.
The bottom line is that China WILL invade Taiwan in the near future. Once communists decide that a group or nation stands as a symbol of opposition to their power, they will stop at nothing to erase that symbol. Whether or not western interests are taking advantage of the situation is something to consider as well.
A regional war involving Taiwan as a proxy for conflict between the US and China would probably progress much like the war in Ukraine – Lots of big talk and propaganda in the media about how China is being crushed economically and militarily. But, in the end China sits right across the water from Taiwan, just as Russia sits right across the border from the Donbass. Logistically, they have the advantage and they have the time. Wearing the west down financially and through attrition would be their strategy and it would likely succeed given the mental weakness within the White House and among the current military brass.
This is not to say China is justified. Not in the slightest. China is one of the most Orwellian nightmare states on the planet and their obsession with Taiwan is a product of communist zealotry rather than any sort of logic or reason. This doesn’t change the fact that they have the strategic advantage if they manage to lure the US into a quagmire across the pacific, and Japan’s ability to help defend Taiwan is questionable.
In terms of the bigger picture, certain interests (globalists) within organizations like the WEF might welcome such chaos and conflict. It could be used as cover for the ongoing global economic decline that they helped create, and give them yet another shot at reducing our freedoms in the name of “security.” One really needs to ask, why would Pelosi go to Taiwan right now? And, who has asked her to go? Is this Biden’s idea, or are other beneficiaries involved?
Tyler Durden
Sun, 07/31/2022 – 20:30 - Pelosi Confirms Start Of Asia Trip, Makes No Mention Of Taiwan As Chinese Anger Grows
Pelosi Confirms Start Of Asia Trip, Makes No Mention Of Taiwan As Chinese Anger Grows
The budding army of amateur flight-trackings sleuths on twitter was proven correct again when less than a day after a barrage of unconfirmed reports that the world’s greatest investor, Nancy Pelosi, was on her way to Asia – where he supposedly is planning to visit Taiwan, a move which some say could spark World War 3 – on Sunday morning her office confirmed that the House Speaker has begun her anticipated trip to Asia, with her office naming four destinations but making no mention of Taiwan.
The official release of her itinerary comes amid more warnings from Beijing over her possible visit to the island.
Pelosi, the third in line of US presidential succession, is leading a six-member congressional delegation to Singapore, Malaysia, South Korea and Japan, according to a statement released by her office early on Sunday which however skipped any mention of Taiwan, after days of intense speculation about a likely stop there fuelled tensions, with Beijing calling it a “provocation” and warning Washington against “playing with fire”.
But the careful wording of the statement did not rule out the possibility of a visit either.
“In Singapore, Malaysia, South Korea and Japan, our delegation will hold high-level meetings to discuss how we can further advance our shared interests and values, including peace and security, economic growth and trade, the Covid-19 pandemic, the climate crisis, human rights and democratic governance,” the statement said.
“America is firmly committed to smart, strategic engagement in the region, understanding that a free and flourishing Indo-Pacific is crucial to prosperity in our nation and around the globe.”
Singapore’s foreign ministry confirmed on Sunday that Pelosi would be visiting for two days starting on Monday.
The delegation led by Pelosi includes Gregory Meeks, chairman of the US House foreign affairs committee, Mark Takano, chairman of the veterans’ affairs committee, and Suzan DelBene, vice chairwoman of the ways and means committee. Two other Democratic congressmen, Raja Krishnamoorthi and Andy Kim, are also travelling with her.
To be sure, Beijing will be following every move of the delegation extremely closely as it regards Taiwan as a breakaway province, to be reunited by force if necessary, and has repeatedly warned against any official exchanges with the self-governed island, going so far as hinting it would shoot down her plan and start a war if Pelosi were to visit the island.
It earlier described the possible trip to Taiwan as a move to support “Taiwan independence”, in violation of the one-China policy.
Meanwhile, the possibility for a stopover in Taiwan has not been ruled out completely.
“The statement is very carefully written. It only says that Pelosi is going for a trip to the Indo-Pacific region, including four nations while making no mention of Taiwan. So, in the case of Pelosi making a surprise visit to Taiwan, the press release still holds as she has never formally acknowledged or denied that Taiwan is a stop in her trip,” said Wu Junfei, a researcher at the Hong Kong-China Economic and Cultural Development Association think tank.
“For now, Pelosi still has ample room to manoeuvre. The final result will still depend on how China and the US continue with the negotiations.”
In recent day, China doubled down on its warning rhetoric to the US. On Saturday the state broadcaster CCTV published for the first time a video showing the launch of DF-17 hypersonic missile – a clip that was later deleted. The move has been widely seen as a clear warning, even though the video, which was subtitled “the target: win”, was ostensibly celebrating the anniversary of the founding of the army.
Also on Friday, in another signal of Beijing’s displeasure with Pelosi’s trip, the Chinese military started a series of exercises, including live-fire drills in the waters off Fujian, the province adjacent to Taiwan Island. Air force spokesman Shen Jinke said on Sunday: “The air force has a strong will, full confidence and sufficient capability to defend the national sovereignty and territorial integrity.”
Xiaoyu Pu, associate professor of political science at the University of Nevada in Reno, said one possibility was that Pelosi could touch down on Taiwan “just for a short while” before proceeding to Japan and South Korea. If that happens, he predicted a strong military response from Beijing but not to the point of no return.
“You have to bear in mind that while China is putting tremendous pressure on the Biden administration to stop the trip, it is also hard for her to back down from this trip after the hype. There will be lots of domestic political pressures if the trip is cancelled, given the current anti-China atmosphere in the US,” Pu said.
“Xi [Jinping] and [Joe] Biden had certainly spoken on this issue on their recent call. Both sides must have talked about potential responses and consequences … Both sides shall leave some rooms for the preparation of their face-to-face meeting in November.”
In other words…
On Saturday, we reported that online flight trackers showed that a plane believed to be carrying Pelosi’s party had landed in Hawaii in the early hours of Saturday and stayed there for 16 hours. The plane then took off at 7pm local time (5am on Sunday GMT) heading towards Asia, about an hour before Pelosi’s statement was released.
Pelosi said they had a fuel stop in Hawaii where they also had a briefing from US Indo-Pacific Command leadership, as well as a visit to the Pearl Harbor Memorial and the USS Arizona.
Hu Xijin, the outspoken former state media editor of state-owned tabloid Global Times, posted on Weibo that Pelosi’s latest statement may have been an attempt to “reduce the provocative meaning of her visit to Taiwan”, but “as long as she lands in Taiwan, the Chinese side will not accept it”. He added: “Now we must not be careless, and must continue to warn her loudly: do not go to Taiwan, there will be serious consequences.”
Earlier on Saturday, Hu said “it is OK [for the People’s Liberation Army] to shoot down Pelosi’s plane” if it was escorted to Taiwan by US fighter jets. In an earlier post on Twitter, the former head of a tabloid published by the Chinese Communist party’s flagship newspaper group said that China should “punish” Pelosi if she did not cancel her planned visit to Taiwan. “[The] PLA Air Force will surely make her visit a disgrace to herself and to the US,” Hu added.
“Pelosi is one of the most important national leaders in the US,” said Lu Xiang, a US expert at the Chinese Academy of Social Sciences in Beijing. “For people in her position, every move comes with consequences. If she visits Taiwan without the consent of China there would be serious consequences, including military consequences.”
Biden last week said the Pentagon believes it is “not a good idea” for Pelosi to visit Taiwan at the moment.
In response to the latest developments, the South China Morning Post, Hong Kong’s newspaper of record since British colonial rule and currently controlled by Alibaba published an op-ed slamming Taiwan president Tsai Ing-wen, titled “Cowardly silence in Taipei as Pelosi plans trip“, in which the author slams the president writing that “aAt a moment of real danger, by staying quiet and letting Washington decide whether the US House speaker should visit as if the island has no say in the matter, President Tsai Ing-wen is turning Taiwan into America’s 51st state.”
“For Beijing, it’s sheer provocation. For Washington, it’s showing support to a friend. Of course, both countries have agendas quite at odds with the best interests of the Taiwanese.”
Still, when all is said and done, we still remain confident that World War 3 will not begin over the itinerary of the most infamous Congressional insider-trader. Still, US Congress is best known for its unfathomable stupidity and hubris, so keep a close eye on the plane’s current flight path which is available below:
Tyler Durden
Sun, 07/31/2022 – 20:11 - The Pentagon Owns Its Recruiting Crisis
The Pentagon Owns Its Recruiting Crisis
Authored by P. Michael Phillips via The Brownstone Institute,
Replenishing the military ranks with qualified personnel is a perennial challenge. It’s no secret, though, that this year our armed forces are fighting uphill to recruit and retain talent.
Most of the services are well behind their quotas.
But the Army, our largest service, is having the hardest time enticing young Americans. That service will fall short, nearly 20,000 troops from its original target end strength of 485,000 for FY ’22, and next year could be worse.
To manage, Army officials have slashed end strength and enlistment goals, while recruiters are offering fat stacks of cash and generous service terms as inducements.
So far, nothing is working.
The Army’s Chief of Staff, General James McConville, blames the shortfall on competition with the private sector. Others blame upwardly mobile families who would rather their children attend college than wear a uniform.
Both are old saws. And this year, they ring hollow.
Some civilian jobs do pay more. But for an 18-year-old with only a high school diploma, military compensation is nothing to sneeze at. Indeed, recruits most often cite generous pay and benefits as the reason for signing papers.
Meanwhile, undergraduate enrollments are down over 600,000 from last year. So, it appears our missing recruits aren’t trading rifles for books, either.
Instead of blaming their competition, the Pentagon brass might dwell on their tarnished image as the reason fewer young Americans want to join up.
Public trust in the military institution has plunged steeply since 2018, according to one poll. Respondents cite politicized leaders, scandals, and the bungled withdrawal from Afghanistan for their loss in confidence.
We might add to that list suicides, sexual assaults, social justice indoctrination, and Covid vaccination policies as dulling the shine of military service.
Of the lot, the Pentagon’s vaccine mandate may prove its deepest self-inflicted wound.
While the service chiefs are begging Congress to fund more generous recruiting incentives, they have forcibly discharged thousands of vaccine dissenters – including most of those objecting on religious grounds. A similar fate awaits tens of thousands more of the unjabbed in the National Guard and Reserve. Never mind that our military increasingly relies on these part-time troops for routine mission support.
And the Pentagon has doubled down. Submission to the vaccine is now a condition of enlistment, despite evidence the therapy is at best ineffective, and at worst dangerous for younger, healthier people.
It’s a policy gravely alienating to the families of Middle America whose children disproportionately serve in our all-volunteer force.
Before going further, consider that fewer than one quarter of Americans in the prime recruitment age of 17-24 years can meet our military’s physical, moral, or educational entry requirements, and that figure continues to decline.
Of those, only about 9% of young Americans have any desire to serve. Perhaps only 1% ever do.
High standards have produced something of an embarrassment of riches. Our service members are amongst the healthiest, most disciplined, and best educated of their cohort nationally. But to maintain this quality, recruiters have come to count on solidly middle-class families inhabiting our Mid-American towns, suburbs, and rural counties to fill their quotas.
Recruiters bank on small-town America because for a variety of reasons our populous cities produce few qualified volunteers. Even the New Yorkers and Californians in the ranks are more likely to hail from upstate or inland counties. In fact, a once-reliable third of all new recruits enter from just five southern states: Texas, Florida, Georgia, North Carolina, and Virginia.
The prepossessed term for these rich recruiting grounds is ‘flyover country.’
Instead, we might think of them as communities celebrating life on a smaller and more intimate scale, and where patriotism, faith, family, and public service remain in fashion.
And yet their young people are not signing up like they used to.
The belief by some that vaccine mandates are meant to purge conservative Christians from the armed forces may be one reason recruiting offices are empty. After all, young people living in these prime recruitment areas are somewhat more religious and tend to be more conservative in outlook than many Americans.
They also are less likely to be vaccinated against Covid.
A more charitable account, though, is that the brass authored their own Catch-22 in the rush to prove their obedience to President Biden. As such, they have taken a position purported to improve readiness that has done quite the opposite. And now that they’ve become so thoroughly entrenched, they cannot easily retreat.
No matter. It should trouble the Pentagon more that their reluctant recruits are most likely military legacies.
Like many professions, the military is a family business. Roughly 80% of recruits either grew up in a military family or have a close relative who served. General McConville’s own clan is actually something of a poster family in career following, with three children and a son-in-law in uniform. Even the general’s wife once served.
Career following in military families is nothing new. It’s been going on since our country’s founding. The children of veterans, like those of bankers or physicians, often emulate their parents’ professional ethos early on. For soldiers, this includes a respect for duty and honorable, selfless service. The generational transmission of such virtues has played a critical role not only in reproducing our service cultures, but by extension our national values.
But it’s also a fragile chain.
While research indicates that military children are 5 times more likely to follow a parent into the service, only 1 in 4 do. And their desire to serve drops sharply every year over the age of 18.
In short, the Pentagon’s stubborn adherence to its Covid protocol is breaking faith with its once loyal base. And the longer they dig in, the smaller that base will become.
It’s a high price our nation may pay for unimaginative leadership.
Tyler Durden
Sun, 07/31/2022 – 20:00 - San Francisco Real Estate Magnate Robbed At Gunpoint, Fears City 'On Path Of Decline We May Never Recover From'
San Francisco Real Estate Magnate Robbed At Gunpoint, Fears City ‘On Path Of Decline We May Never Recover From’
The chief executive of the world’s largest industrial landlord was robbed outside his San Francisco mansion last month and called on the mayor to address the “absolutely unacceptable” rise in violent crime in the city.
Hamid Moghadam, CEO of San Francisco-based Prologis, told the San Francisco Business Times that several men robbed him at gunpoint outside his home on June 26, taking his Patek Philippe watch. The robbery happened in the Pacific Heights neighborhood where tech investor Peter Thiel, Oracle’s Larry Ellison, and House Speaker Nancy Pelosi have homes.
“I recognize we live in an urban environment, but the level of crime, including violent behavior, has become absolutely unacceptable,” Moghadam wrote in a letter to San Francisco Mayor London Breed, the city’s Board of Supervisors, and Governor Gavin Newsom, demanding them to concentrate efforts on improving public safety.
“We pay some of the highest taxes, local and state, in the nation, yet we have no sense of security. Protecting public safety should be the government’s top priority — that is the foundation to a successful city,” he said.
Moghadam warned: “I am deeply concerned that our city may be so far down the path toward decline that we may never recover — or at least not for a long, long time.”
He also called Mayor Breed to say if the Bay Area continues stumbling down a path of violent crime, it wouldn’t take much for Prologis or other San Francisco-based companies to leave town.
“I told the mayor very, very directly, ‘Look, I’m sure in the early ’60s, Cleveland and Detroit were wonderful communities with the auto and steel industries going strong, and they were the center of the universe. Obviously, something happened.'” he said.
“I would say, right this second, San Francisco is probably the most dysfunctional city in America,” he added. “And we have offices in places like Mexico City and Sao Paulo that are dangerous places.”
It’s unfortunate that Moghadam was a victim of an armed robbery to realize the Bay Area has transformed into a wasteland of surging violent crime thanks to failed progressive leadership. The town may never recover as companies are already exiting. We noted a few months ago:
The streets are dirty. Homeless encampments, trash, and excrement can be found all over. Car break-ins are so frequent that it has basically become a non-government-imposed tax for people who come here. Of course, some areas are much worse than others, but almost all areas of the city suffer from this decay, and it is appalling.
In June, we wrote how the city’s Tenderloin district had become a criminal playground.
Companies like Walgreens have had enough of crime and closed dozens of stores around the metro area. Salesforce is one of the largest companies to reduce exposure to the city by subleasing 40% of the building at 50 Fremont St.
There is some good news: Chesa Boudin, former San Francisco’s chief prosecutor, backed by leftwing billionaire George Soros, has been booted from office in a recall vote following his leadership that helped turn the metro area into a dangerous place.
But the damage has been done, and it wouldn’t shock us if Moghadam pulls a Ken Griffin-style exit (read here) for another state that is business-friendly and has law and order.
Tyler Durden
Sun, 07/31/2022 – 19:30 - Harvard Study: J6 Rioters Were Motivated By Loyalty To Trump, Not QAnon-Belief Or Insurrection Against The Constitution
Harvard Study: J6 Rioters Were Motivated By Loyalty To Trump, Not QAnon-Belief Or Insurrection Against The Constitution
According to The Crimson, Harvard has completed what it calls the most comprehensive study of the motivations of those involved in the January 6, 2021 Capitol riot.
Many will not be surprised to learn that most participated out of loyalty to former President Donald Trump.
However, the study also found that only eight percent harbored “a desire to start a civil war.”
That is inconsistent with the virtual mantra out of the J6 Committee and many in Congress that this was an insurrection rather than a riot.
Some of us (including many in the public) have previously questioned that characterization. Yet, it reflects the relatively small number of seditious conspiracy charges brought by the Justice Department.
The study found that a plurality of the 417 federally charged defendants were motivated by the “lies about election fraud and enthusiasm for his re-election.” It concluded that “[t]he documents show that Trump and his allies convinced an unquantifiable number of Americans that representative democracy in the United States was not only in decline, but in imminent, existential danger.”
The study also found that belief in QAnon “was one of the [defendants’] lesser motives.”
The study was hardly pro-Trump and one author even expressed surprise with the results since conspiracy theories “were so prominently displayed in much of the [riot’s] visual imagery.”
Once again, none of this exonerates or excuses those who rioted on January 6th or those who fueled the riot. However, the use of “insurrection” by the politicians, pundits, and the press is not an accurate characterization of the motivation of most of the people who went to the Capitol on that day. It was clear that this was a protest that became a riot.
There is no question that there were people who came prepared for such a riot, including some who are extremists who likely would have welcomed a civil war.
Yet, the vast majority of people on that day were clearly present to protest the certification and wanted Republicans to join those planning to challenge the election.
One of the key reasons for the resulting damage was the collapse of security at the Hill. The J6 Committee steadfastly refused to address the myriad of questions of why the Congress was not better prepared despite the obvious dangers of a riot (including warnings before January 6th).
The scenes of that day are seared in the memory of many of us. I publicly condemned Trump’s speech while it was being given and I called for a bipartisan vote of censure over his responsibility in the riots.
However, there has been an unrelenting effort to make “insurrection” a litmus test for anyone speaking about January 6th. If one does not use that term (and, worse yet, expresses doubts about its accuracy), you run the risk of immediate condemnation as someone excusing or supporting insurrection. This framing also reduces the need to address the question of how this riot was allowed to spiral out of control.
It is possible to express revulsion about what happened on Jan. 6th without claiming that this was an insurrection and attempt to overthrow the nation.
This was a collective tragedy for the entire nation, a desecration of our constitutional process.
The effort to mandate “insurrection” as the only acceptable description prevents the country from speaking with a unified voice. It clearly serves political purposes but only makes a national resolution more difficult as we approach a new presidential election.
Tyler Durden
Sun, 07/31/2022 – 19:00 - All Eyes On 'Silent' Sinema After Dems Bag Manchin
All Eyes On ‘Silent’ Sinema After Dems Bag Manchin
Now that the Democrats have gotten Joe Manchin (D-WV) to bend the knee on a reconciliation package called the “Inflation Reduction Act” – which doesn’t actually reduce inflation to any meaningful degree, all eyes are on Sen. Kyrsten Sinema (D-AZ), whose vote will be crucial to passing the bill in the Senate.
Thus far, she’s been silent regarding her position on the bill after Senate Majority Leader Chuck Schumer (D-NY) kept her in the dark as he worked out a secret deal with Manchin in isolation, which according to Mish Talk, “was a purposeful gamble and perhaps a bad one.”
On Sunday, Machin made the rounds on the political talk circuit where he defended the reconciliation package – claiming it would halt price increases, which Bloomberg notes, comes “despite a study by the University of Pennsylvania’s Wharton School showing it would have little impact or could increase inflation slightly in the near term.”
Democrats are seeking to pass the bill this week in the Senate and in the House next week. Doing so would require all 50 members of the Senate Democratic caucus to vote yes on the bill and defeat a slew of Republican attempts to amend it. It would also require all 50 to remain Covid-free and able to endure a long vote series.
Sinema’s office has said the Arizona Democrat won’t make her position known until later in the week at the earliest, after the top Senate rules official has scrubbed the bill of any non-budgetary items. -Bloomberg
“I respectfully disagree with the people from Penn Wharton,” Manchin said on CNN, claiming that the study doesn’t properly credit the effects of $300 billion in lower budget deficits in the bill, the report continues.
Meanwhile, the West Virginia Senator said Sinema has nothing to complain about.
“She has so much in this legislation,” Manchin told CNN regarding Sinema, adding that the tax changes in the bill don’t amount to tax rate increases, which Sinema staunchly opposed during previous negotiations, citing the economy.
The bill would slap large corporations with a 15% minimum tax, as well as make changes to how carried interest is taxed – which will hit hedge fund managers at their individual rates. The bill will also beef up IRS tax audits by increasing the agency’s head count.
“I agree with her 100% in that we are not going to raise taxes and we won’t,” said Manchin.
All of that said, Sinema may want to change the Schumer-Manchin deal, according to Axios.
Sinema has leverage and she knows it. Any potential modification to the Democrat’s climate and deficit reduction package — like knocking out the $14 billion provision on carried interest — could cause the fragile deal to collapse.
- Her posture is causing something between angst and fear in the Democratic caucus as senators wait for her to render a verdict on the secret deal announced by Senate Majority Leader Chuck Schumer and Sen. Joe Manchin last Thursday.
Sinema has given no assurances to colleagues that she’ll vote along party lines in the so-called “vote-a-rama” for the $740 billion bill next week, according to people familiar with the matter.
- The vote-a-rama process allows lawmakers to offer an unlimited number of amendments, as long as they are ruled germane by the Senate parliamentarian. Senators — and reporters — expect a late night.
The big picture: Schumer made a calculated decision to negotiate a package with Manchin in secrecy. He assumed that all of his other members, including Sinema, would fall into line and support the deal.
According to Minneapolis Fed President Neel Kashkari, the bill “may have some effect” in the long run.
“My guess is over the next couple of years, it’s not going to have much of an impact on inflation,” he told CBS‘s “Face the Nation,” adding that there’s “an acute mismatch between demand and supply” that the Federal Reserve can resolve by reducing demand.
As Mish Talk notes further, there are four ways the bill could die.
- The Senate parliamentarian can rule against permit reform. That would likely kill everything right there.
- The Republican poison pill kill method could work, but I suspect there are ways for that to backfire as well.
- Sinema can easily kill this bill herself, but I suspect she would rather have Manchin on board or hopes Manchin kills it himself after an adverse parliamentarian ruling.
- Poison pills aside, many specifics are still missing. How is this Medicare cost reduction idea going to work? Bickering over missing details could kill this.
Saga Continues
If the bill dies, the most likely way is via the Senate parliamentarian. Joe Manchin can then say he tried, and Sinema might escape without having to take an actual position.
The saga continues.
I will not be surprised by any outcome including an even bigger boondoggle that is currently on the table.
Tyler Durden
Sun, 07/31/2022 – 18:30 - Chinese Stocks Underperform S&P 500 Most Since 2016
Chinese Stocks Underperform S&P 500 Most Since 2016
By George Lei, Bloomberg Markets Live commentator and analyst
Three things we learned last week:
1. Optimism toward China’s growth recovery got a reality check last week, when the Politburo meeting made two things clear: the Covid Zero policy is here to stay and large stimulus is unlikely. On Sunday, a report showed China’s factory activity unexpectedly contracted in July. The benchmark CSI 300 index retreated for a fourth week and tumbled 7% in July, its biggest monthly loss since March. It trailed the S&P 500 by 16 percentage points, giving up all of its outperformance in June when reopening euphoria swept the markets. Foreign investors sold 21 billion yuan ($3 billion) worth of stocks via the stock connect programs during the month, the most since March.
In addition to the Covid policies, the real-estate market remains a source of tension. Reports of several rescue proposals — including to seize undeveloped land from distressed real estate-companies and to provide loans to support stalled property projects — have floated around. Details may differ, but the underlying theme for all these plans is the same: saving unfinished projects to protect homeowners, instead of developers. Struggling developers such as Evergrande are left hanging.
2. To be, or not to be (in Taiwan), that is the question. US House Speaker Nancy Pelosi left for her Asia trip on Friday. Whether she’ll land in Taipei remains a mystery, even as her itinerary skipped any mention of a possible stopover in Taiwan. The talk between President Xi and Biden centered on Taiwan, but neither side described the discussion as “constructive.” One thing is crystal clear: Taiwanese stocks rose on the week and month, handily beating peers in Hong Kong and China. Investors appear to have largely dismissed the simmering geopolitical tension.
3. While bad news is bad news for markets in China, it apparently is good news for US investors. The US economy contracted for a second quarter. Whether it’s truly a recession or not, growth clearly has lost momentum. The Fed signaled it could slow down the pace of tightening after it delivered another 75bp rate hike to put the benchmark rate at 2.5%. It’s hardly as pivotal as some market observers claimed, because the markets’ pricing of the Fed’s policy rates for the remaining of the year barely changed, and is in line with what’s prescribed on the Fed’s dot plot. With financial conditions easing, the risk now is that inflation doesn’t come down as quickly as markets expect.
Tyler Durden
Sun, 07/31/2022 – 18:00 - US Frack Growth Constrained In "Perfect Storm"
US Frack Growth Constrained In “Perfect Storm”
Last week, Halliburton Co.’s CEO Jeff Miller warned hydraulic fracturing equipment is in short supply and could hamper fracking growth. Another oil/gas executive echoed the same warning this week and said bottlenecks could persist through 2023.
“Availability of frac fleets is one of main bottlenecks impeding oil and natural as production growth for the next 18 months,” Robert Drummond, chief executive officer of fracking firm NexTier Oilfield Solutions, told Reuters.
Besides supply chain snarls, Drummond warned that capital constraints would make adding equipment to fields challenging. He said this imbalance could take several years to correct, adding that NexTier has no plans to expand fracking capacity this year.
This development is another setback for the Biden administration’s efforts to increase US oil production to ease the worst inflation in forty years ahead of the midterm elections in November.
US crude production is around 11.6 million barrels per day, below the pre-pandemic 12.3 million bpd in 2019, the latest data from the Energy Information Administration show.
Matt Hagerty, a senior analyst at BTU Analytics, pointed out that “frac crew bottlenecks” are a “significant headwind for US producers headed into 2023.” He said frac sand and labor shortages, elevated inflation, and limited frac fleets are a “perfect storm.”
Halliburton’s Miller said oil companies didn’t have enough fracking equipment for newly leased wells. He said diesel-powered and electric equipment are in short supply, “making it almost impossible to add incremental capacity this year.”
A similar message was conveyed by Exxon Mobil, whose CEO said that global oil markets might remain tight for three to five years primarily because of a lack of investment since the pandemic began.
Exxon CEO Darren Woods said it’ll take time for oil firms to “catch up” on the investments needed to ensure enough supply.
In response to shale’s dismal ramp-up in production, the Biden administration has panic sold millions and millions of barrels of oil from the Strategic Petroleum Reserve, which has been drained by 125 million barrels so far in 2022 — all in hopes of lowering gasoline prices at the pump ahead of the midterm elections in November.
The good news is the recession, and high inflation appears to have sparked the weakest gasoline demand since 2013.
The Shale patch has a structural bottleneck that won’t be resolved this year. Blame years of divestment and decarbonization for the mess.
Tyler Durden
Sun, 07/31/2022 – 17:30 - Rivian Laying Off Approximately 840 Employees
Rivian Laying Off Approximately 840 Employees
By John Gallagher of FreightWaves
Electric vehicle startup Rivian is laying off 6% of its 14,000-employee workforce, or roughly 840 positions, according to reports.
“This decision will help align our workforce to our key business priorities, including ramping up the consumer and commercial vehicle programs, accelerating the development of R2 and other future models, deploying our go-to-market programs and optimizing spend across the business,” according to news organizations citing a company statement.
“We’re deeply grateful for each departing team member’s contribution in helping build Rivian into what it is today. They will always be part of the Rivian story and community.”
Rivian did not immediately respond to a request for comment.
The cost-cutting move is aimed at ensuring the company can continue to grow its manufacturing operations without raising additional funds, according to Rivian CEO Robert Scaringe, in an email to the Wall Street Journal. It reported that the company’s sole manufacturing plant in Normal, Illinois, will not be affected by the layoffs.
“Over the last six months, the world has dramatically changed with inflation reaching record highs, interest rates rapidly rising and commodity prices continuing to climb — all of which have contributed to the global capital markets tightening,” Scaringe wrote.
Rivian’s stock has steadily lost ground since its first day of trading in November. On Friday, Rivian closed at $34.30 a share, down more than 80% from its high on Nov. 16 of $179.47.
Amazon, Rivian’s largest customer and backer, lost $11.5 billion on its Rivian stock investment over the first six months of 2022. That includes $3.9 billion lost on the investment in the second quarter, recorded as a non-operating expense.
The cuts at Rivian follow reports of Xos Trucks cutting 8% of its workforce and layoffs at Canoo, as competition intensifies in the EV market amid signs of a looming recession.
Amazon has started deliveries with Rivian electric delivery vehicles (EDVs), a rollout that “is the start of what Amazon plans to be thousands of EDVs in more than 100 cities by the end of 2022 — and 100,000 EDVs across the U.S. by 2030,” Amazon stated in its second-quarter results.
Tyler Durden
Sun, 07/31/2022 – 17:00 - Teen Who Assaulted Cop In Harlem Subway Station Released Without Bail And Remanded To Family Court
Teen Who Assaulted Cop In Harlem Subway Station Released Without Bail And Remanded To Family Court
It’ll probably come as zero surprise at this point, but New York City’s DA has decided to take it easy on a 16 year old that was caught on film last week attacking and assaulting a police officer.
The juvenile was stopped by the officer after he hopped a subway turnstile. The altercation then turned physical, with the youth engaging in a prolonged physical altercation with the officer before finally being controlled.
And of course, New York City prosecutor Alvin Bragg is defending his office’s decision to release the youth – who has three felony arrests in less than four months – and try his case in family court instead of Manhattan Criminal Court, according to Fox News.
In family court, the youth will face rehabilitation instead of jailtime – and the DA’s office will no longer have any jurisdiction over the crime.
As Fox notes, this is all despite the fact that the teen had just been arrested and released without bail for allegedly beating and robbing a stranger near Madison Avenue on June 21.
“Our system must respond to children as children,” a representative from Bragg’s office said.
Photo: Fox News They continued: “Violence against our police officers is unacceptable, and given his age at the time of arrest, we consented to send the second case to family court as soon as possible, where he would receive the age-appropriate interventions and supports he needs while being held accountable.”
And even better, the DA said they weren’t aware of another arrest on April 12 for possessing a .40 caliber handgun and crossbow in Brooklyn that the teen faced.
While 16-and 17-year-olds charged with misdemeanors and many nonviolent felonies are automatically remanded to family court under the city’s “criminal justice reforms”, the DA still has the option of exercising discretion and keeping a case in criminal court for any type of extraordinary circumstances.
Apparently, assaulting a cop is no longer “extraordinary” in New York – a sad commentary on the state of the city’s criminal justice system, and its DA.
“The DA clearly knew that they were prosecuting the same offender for a violent robbery,” he said. “If that is not an extraordinary circumstance, what is? If violence against police officers is unacceptable, why ignore the violent robbery arrest. This isn’t accountability. This is lunacy,” criminal defense lawyer Mark Bederow concluded.
Tyler Durden
Sun, 07/31/2022 – 16:30 - Trump Slams DC Mayor Requesting Deployment Of National Guard Over Influx Of Illegal Immigrants
Trump Slams DC Mayor Requesting Deployment Of National Guard Over Influx Of Illegal Immigrants
By Frank Fang of The Epoch Times
Former President Donald Trump chided Washington, D.C. Mayor Muriel Bowser after she requested that the National Guard be mobilized to deal with the influx of illegal immigrants being transported from southern states.
“The Mayor of Washington, D.C., wants the National Guard to help with the thousands of Illegal Immigrants, coming from the insane Open Border, that are flooding the City, but refused National Guard help when it came to providing Security at the Capitol Building for a far larger crowd on January 6th,” Trump wrote on his Truth Social account on July 29.
“Figure that one out?” Trump asked.
Bowser’s government has sent two separate letters to the White House and the Pentagon seeking federal help, describing the situation at the nation’s capital as a “humanitarian crisis.” In one of the letters, Bowser added that the arriving immigrants had brought her city to a “tipping point.”
Bowser, a Democrat, blamed Arizona and Texas in the other letter, saying the migrant crisis is “cruel political gamesmanship from the Governors of Texas and Arizona.”
The D.C. mayor has also claimed that immigrants are “being tricked” into opting to take buses to the nation’s capital.
Texas Gov. Greg Abbott and Arizona Gov. Doug Ducey, both Republicans, announced transportation programs to send illegal immigrants on free rides to Washington, D.C., following President Joe Biden’s decision to lift a pandemic-era immigration policy to expel illegal aliens. The first bus carrying immigrants from Texas arrived in D.C. in April, with Arizona sending its first bus in May.
Since then, Washington has received some 6,100 immigrants on 155 buses, Stars and Stripes reported on July 28, citing data from Abbott’s office.
Responding to Bowser’s request for the National Guard, Abbott wrote on Twitter that the problem that D.C. is experiencing is small compared to what Texas has been dealing with.
“D.C. is experiencing a fraction of the disastrous impact the border crisis has caused Texas,” Abbot stated. “Mayor Bowser should stop attacking Texas for securing the border & demand Joe Biden do his job.”
Two GOP lawmakers also suggested that Bowser should take up her troubles with Biden.
“Mayor Bowser now understands what it feels like to be a border state. How do you think folks in Texas feel?” Rep. Randy Weber (R-Texas) wrote in a post.
Weber added, “She should knock on Biden’s door and tell him that there is a crisis at our southern border and every state is a border state.”
“Mayor Bowser should call the White House instead and tell them to secure the southern border,” Rep. Fred Keller (R-Pa.) wrote on Twitter.
Washington Mayor Muriel Bowser attends March for Our Lives 2022 in Washington on June 11, 2022 On July 29, Abbott’s office released a press release detailing what it had accomplished with the state’s Operation Lone Star, a program launched in March 2021 to prevent criminal activity along the border, including drug smuggling and human trafficking.
continue reading at Epoch Times
Tyler Durden
Sun, 07/31/2022 – 16:00
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