Today’s News 22nd March 2023

• NATO Shouldn't Trust Hungary And Turkey, Claims German Newspaper Die Welt
  NATO Shouldn’t Trust Hungary And Turkey, Claims German Newspaper Die Welt

  Authored by Denes Albert and John Cody via Remix News,

  Hungary is “authoritarian” and NATO should consider withholding sensitive information from Turkey and Hungary, Die Welt foreign policy commentator Clemens Wergin writes

  

  German newspaper Die Welt claims in an opinion piece that Turkey and Hungary should not be trusted within the NATO alliance. The paper writes that Turkish President Recep Tayyip Erdoğan continues to block Sweden’s NATO accession, and Hungary wants EU money in exchange for approving the membership of both nations.

  The author of the piece, Clemens Wergin, also claims that both nations have developed “unseemly” ties to Russia and then asks whether NATO should even share sensitive data with both countries.

  “And in their turn toward authoritarianism, Ankara and Budapest have also distanced themselves significantly from the community of values ​​for which NATO stands. The alliance is therefore well advised to treat both as partners with reservation. This should include, for example, no longer necessarily sharing certain sensitive data with Turkey and Hungary within NATO,” Wergin writes.

  When Wergin, the chief foreign policy correspondent for Die Welt, refers to “authoritarianism,” he makes no mention of the fact that French President Emmanuel Macron is facing mass protests in his country after ramming through pension reform without even a vote in parliament, or that he then banned protests in certain areas of Paris following the decree. In Germany itself, the current government is looking to ban one of the country’s top opposition parties, Alternative for Germany (AfD), even as the party soars in popularity. Such an authoritarian move would be met with an outcry from Brussels and Berlin if Orbán were to even consider banning opposition parties in Hungary.

  Regarding the “blackmail” Wergin claims Hungary is subjecting NATO to, it should be noted that the EU first “blackmailed” Hungary, demanding the country make rule-of-law changes in order to unlock billions in EU funds. Arguably, the Hungarian government has more of a democratic mandate than the German government, with Orbán’s Fidesz party receiving such high levels of support that it resulted in yet another landslide victory last year and a two-thirds majority in parliament.

  Wergin argues that Finland is likely to join NATO soon, as Erdoğan has given up his opposition to that country’s NATO membership. That means Finland is likely to join NATO without Sweden. He posits that this is because the Turkish decision is putting considerable pressure on the Hungarian government, which is also blocking membership, to agree to at least Finnish membership as well.

  “As a result, it has now become more likely that at least Finland, which is particularly vulnerable due to its long land border with Russia, will be able to join NATO in the near future. Sweden, on the other hand, will probably have to wait at least until after the elections in Turkey. Northeastern Europe would thus become an area of divided security for the time being, with the Finns inside the NATO umbrella and the Swedes on the outside,” he argues.

  He continues by writing that both states had turned the Nordic countries’ urgent application for membership, triggered by the Russian war, into a “farce” and prevented admission for extraneous reasons. Erdoğan wanted Sweden to impose a tougher policy on Turkish opposition groups and had also been outraged by an anti-Islam action by right-wing provocateur Rasmus Paulson, who had burned a Quran in Stockholm. He claims Paulson was funded by Russia but offers no evidence in support of his claim.

  On his recent trip to Turkey, Hungarian Prime Minister Viktor Orbán repeated his country’s stance for immediate peace talks to end the war in Ukraine, saying that Europe was suffering from “war psychosis,” with the continent drifting further into war day by day.

  Tyler Durden
  Wed, 03/22/2023 – 02:00

• The People Vs. The Fed: What Political Movement Will Silicon Valley Bank’s Failure Spark?
  The People Vs. The Fed: What Political Movement Will Silicon Valley Bank’s Failure Spark?

  Authored by  Athan Koutsiouroumbas via RealClear Wire,

  In bucolic Indiana, Pennsylvania, residents have started an “It’s a Wonderful Life Festival.”

  The town’s Christmas celebration commemorates both favorite son Jimmy Stewart, who starred in the iconic movie, and the story’s message of redemption and hope.

  In the film, a bank run threatens to devastate an affordable-housing business run by George Bailey, Stewart’s character. The Great Depression has come to Bedford Falls. With over 9,000 banks failing during that period, bank runs were common.

  For nearly 100 years since that fictional Beaver Falls bank run, the federal government has insured bank depositors for the purpose of stopping bank runs, which have historically triggered economic depressions. That decision was part of a sweeping political movement in response to the financial crisis of the 1930s: the New Deal.

  Could a political movement arise from the recent failure of Silicon Valley Bank, which collapsed in mere hours? That question may be best answered by looking to the distant past.

  

  In what came to be known as the “Bank War,” President Andrew Jackson made it his mission to dismantle the U.S. National Bank, which many blamed for triggering the Panic of 1819. Elected in 1828, just forty years after George Washington was inaugurated, the nation’s first populist president consolidated a political base against federal overreach. He succeeded by stopping the bank from being rechartered.

  Near the end of the nineteenth century, the Panic of 1893 catapulted an unknown congressman from Nebraska to the Democratic Party’s 1896 presidential nomination. Comparing the economic plight of common Americans to a crucifixion, William Jennings Bryan heralded the arrival of the Progressive Era, which would legislate against the excesses of the Gilded Age.

  A decade and a half later, the Panic of 1907 gave Democrats momentum to seize unified control of Congress and the White House. Signed into law in 1913 by President Woodrow Wilson, the Federal Reserve Bank created a nationalized system to regulate banking. Wilson’s presidency would be the pinnacle of the Progressive Era.

  In 1929, the stock market’s Black Tuesday triggered a series of bank runs that cratered the American economy. The ensuing destitution deeply scarred a generation of Americans and realigned the electorate, which chose Franklin D. Roosevelt to implement the New Deal – the largest expansion of the federal government in American history.  

  A half-century later, stagflation – inflation without economic growth – during the Carter administration culminated with a run on First Pennsylvania Bank in 1980, resulting in the third-largest bank bailout in American history. Voters’ response was to launch the Reagan Revolution, which would attempt to pare back some of the New Deal. A former New Dealer himself, Reagan advocated for the restoration of federalism as the key to economic stability and growth.

  The Great Recession of 2008 was triggered by a banking failure totaling trillions of dollars. The federal response, the Troubled Assets Relief Program, sought to backstop the failing financial system – but its massiveness also helped give rise to the Tea Party, which preached a small-government ethos. In 2016, that conservative political movement would help elect Donald Trump, who campaigned against the excesses of a federal government in which millions of Americans had lost faith.

  Each of these six major financial panics launched a political movement. Americans were evenly split on choosing conservative and liberal solutions to the financial challenges they faced. The response to the Panic of 2023 will be the tiebreaker.

  One thing is clear. At $319 billion and counting, the failures of Silicon Valley Bank and Signature Bank alone in the last two weeks are already on par with the entire 2008 financial crisis, which saw 25 banks failing, with $373 billion in combined assets. And with $620 billion of unrealized losses that triggered this crisis still pending, we may be just getting started.

  What path policymakers will choose this time around is unclear. The country has never been more evenly split politically. Meanwhile, the regulatory system has attempted to stem the tide without the involvement of Congress or the White House. A political reconciliation, in other words, has been deferred.

  Political issues come and go, but financial panics create political movements because they hit Americans directly, in their bank accounts. Voters pay attention.

  The movement that results from this panic will depend ultimately on whom voters blame for it. That scapegoat, whether real or imagined, will determine where on the political spectrum the movement leans.

  Many Americans continue to identify government itself as the top non-economic issue they face. Inflation, a problem created by government, is their top economic problem. Most Americans believe the federal government is too big and doing too much. In places like real-life Indiana, Pennsylvania or fictional Beaver Falls, it is abundantly clear that Americans have lost faith in their leading institutions.

  “You sit around here and you spin your little webs and you think the whole world revolves around you and your money,” George Bailey tells his antagonist in “It’s a Wonderful Life.”

  Bailey was referring to the machinations of a powerful banker, but his words are fitting in an unintended sense, too: in American politics, realignments begin because the world revolves around voters and their money.

  Tyler Durden
  Wed, 03/22/2023 – 00:05

• Bill Gates Says "The Age Of AI Has Begun"
  Bill Gates Says “The Age Of AI Has Begun”

  In an op-ed titled “The Age of AI has begun” on “The Blog of Bill Gates,” Microsoft co-founder Bill Gates discussed the upcoming paradigm shift in technology. Having been instrumental in developing personal computers several decades ago, the billionaire seems to know a thing or two about technological innovation. He believes that OpenAI’s language generation artificial intelligence tools will be at the forefront of the next technological revolution. 

  Gates wrote, “I’ve seen two demonstrations of technology that struck me as revolutionary.” 

  “The first time was in 1980, when I was introduced to a graphical user interface—the forerunner of every modern operating system, including Windows,” he said. 

  Gates said the second big surprise came last year with the impressive advancement in OpenAI’s ChatGPT.

  “The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone,” he said. “It will change the way people work, learn, travel, get health care, and communicate with each other.”

  Gates said he’s been in contact with OpenAI since 2016 and last year challenged the team to train the chatbot to pass the Advanced Placement biology exam. A few months later, he said the bot could pass a college-level biology course. 

  After seeing the results, Gates began to contemplate the future and how AI will be intertwined with humans on a day-to-day basis, just like computers and smartphones.

  “This inspired me to think about all the things that AI can achieve in the next five to 10 years.”

  Gates has emerged as a significant player in the AI arms race, as Microsoft, the company he founded, has pledged over $10 billion in funding to OpenAI.

  

  However, like any new technology, there’s always a concern. Gates addressed some of those issues:

  “Any new technology that’s so disruptive is bound to make people uneasy, and that’s certainly true with artificial intelligence. I understand why—it raises hard questions about the workforce, the legal system, privacy, bias, and more.”

  On the bias issue, there have been numerous complaints about AI trainers skewing ChatGPT toward answering questions with a left-leaning spin. This has been such a significant problem that Elon Musk is allegedly taking on — in a new project to develop a ‘non-woke’ alternative chatbot. 

  Even the co-creator of ChatGPT warned that the world might not be “that far away from potentially scary” AI. 

  … and what’s disturbing — is if AI is programmed to enforce the truths determined by figures like Gates, Pfizer CEO Albert Bourla, and the federal government. 

  While Gates expresses enthusiasm about the potential of AI to be game-changing for humans, there is a flip side to it. The technology could become a tool for extreme censorship, which could make the Twitter censorship program seem trivial in comparison.

  Tyler Durden
  Tue, 03/21/2023 – 23:45

• Deficit Hawk Hypocrites And Warmongers Unite, Apparently Hoping To Start WWIII
  Deficit Hawk Hypocrites And Warmongers Unite, Apparently Hoping To Start WWIII

  Authored by Mike Shedlock via MishTalk.com,

  The WSJ wants to send long-range missiles to Ukraine, Lindsey Graham discusses WWIII, and Republicans want defense spending to rise 5 percent more than inflation…

  

  Long-Range Missiles 

  The WSJ editorial board says the best response Russian drones is to Send Long-Range Missiles to Ukraine.

  The Pentagon on Thursday released footage of a Russian fighter jet that harassed, dumped fuel on and then collided this week with an American reconnaissance drone. The provocation warrants a U.S. response, and the right one is giving the Ukrainians the sophisticated and long-range weapons they need to defeat Vladimir Putin’s military.

  President Biden now has more reason to do what he could have done long ago: Give Ukraine the weapons needed to win. Priority No. 1 is the Army tactical missile system, which would allow strikes deeper into Russian positions in Ukraine to gain momentum on the ground.

  Question One: Oh, I suppose Russia will sit back and let that happen in its backyard just like the US allowed Russian missiles in Cuba. Right? 

  Lindsey Graham: The Only Way to Avoid World War III Is to Start It

  The American Conservative reports Lindsey Graham: The Only Way to Avoid World War III Is to Start It

  It’s not atypical for Russian jets to intercept U.S. aircraft flying so close to its airspace. Russian aircraft have intercepted U.S. and allied aircraft over the Black Sea and off the coast of Alaska in years past. These interceptions have become more common as the U.S. and its allies continue to provide Ukraine with military and security assistance in the war against Russia, according to National Security Council spokesman John Kirby. Kirby said that almost all of these common interceptions have occurred without incident. The Tuesday incident, however, is drawing the eyes of the Biden administration and others in Washington not only because it resulted in the downing of an unmanned drone but because of the bizarre tactics employed by the Russian pilots, which Kirby called “unsafe and unprofessional.”

  Russia’s Ministry of Defense has denied any wrongdoing on the part of its pilots. In a statement, the Ministry said the Russian Air Force scrambled fighter jets to identify the drone, which allegedly had its identifying transponder off. 

  South Carolina Sen. Lindsey Graham appeared on Sean Hannity’s Fox News show last night and said the U.S. should shoot down Russian jets that intercept U.S. aircraft, manned or not.

  “We should hold them accountable and say that, ‘If you ever get near another U.S. asset flying in international waters, your airplane will be shot down,’” Graham claimed. Graham went on to employ the tactic that every Republican uses when trying to make a bad idea sound like a good idea: invoking the name of Ronald Reagan. “What would Ronald Reagan do right now? He would start shooting Russian planes down if they were threatening our assets.” Later, addressing Biden, Graham said, “If you don’t change your game and up your game, we’re going to have World War III.”

  Graham’s big-brained idea is that the only way to avoid World War III is to start it? To state the obvious, killing Russian pilots would bring the U.S. into direct confrontation with Russia. The United States would effectively be at war with Russia, and when Russia responds, the U.S. will feign surprise and drag the rest of NATO into the conflict. Entangling alliances are back, and so would the great war that follows them.

  Graham, the neocons, and the liberal interventionists may claim the foreign policy mantle of Reagan, but their knowledge only goes so far as “peace through strength” and the USSR is an “evil empire.” In reality, Reagan responded to acts much more reckless and violent than the downing of an unmanned drone with restraint. When the Soviet Union shot down Korean Air Lines Flight 007 on September 1, 1983, killing all 269 people, including sixty-one Americans and one member of Congress, Reagan did not start striking Russian assets or shooting down Russian military planes. Rather, Reagan’s first instinct was, in his own words from a National Security Meeting, “to protect against overreaction. Vengeance isn’t the name of the game.”

   “If you don’t change your game and up your game, we’re going to have World War III,” graham said addressing Biden.

  Question Two: Would shooting down manned Russian aircraft near the Russian border stop WWIII or help start it?

  Deficit Hawk Hypocrites 

  If you think Republicans really want fiscal constraint, you aren’t thinking. 

  Biden proposes a defense department increase of 3.2 percent, but the Budget Draws GOP Criticism, Sets Up Spending Clash.

  “The president’s defense budget is woefully inadequate and disappointing,” said Sen. Roger Wicker (R., Miss.), the top Republican on the Senate Armed Services Committee. He and other Republican leaders are advocating for military spending to increase at a minimum rate of 5% above inflation.

  Fancy that. Republicans want spending 5% above inflation. 

  Of course, Democrats are ready, willing and able to go along.

  Democratic leaders welcomed Mr. Biden’s proposal Thursday as a good starting point, but they said they would insist that any military-budget boost require a corresponding bump in domestic spending.

  Question Three: Has everyone gone mad?

  *  *  *

  Please Subscribe to MishTalk Email Alerts.

  Tyler Durden
  Tue, 03/21/2023 – 23:25

• Where Biden Stands Vs. Trump, Obama On 6 Major Issues: Gallup
  Where Biden Stands Vs. Trump, Obama On 6 Major Issues: Gallup

  The latest Gallup poll reveals that President Biden’s standing on six major issues vs. his two predecessors is not great. See below for his Biden scores when it comes to; the economy, immigration, foreign affairs in general, and relations with Russia and China. A sixth chart compares Biden and Trump on the pandemic response.

  

  Via Gallup:

  1. The Economy: Not Biden’s Strongest Suit

  

  Biden’s latest job approval rating on the economy is about halfway between the worst ratings Trump and Obama each received. Both of his predecessors’ low points on the economy came toward the beginning of their presidencies, after which they saw strong improvement. This holds out some hope for Biden that he could follow a similar trajectory. Indeed, his 34% rating in February is slightly improved from his own low point of 31% in August 2022.

  2. Foreign Affairs: A Quick Decline

  

  Like Obama, Biden began his term in office with a majority of Americans approving of the job he was doing on foreign affairs in general. Yet, Biden’s approval ratings for handling foreign affairs have been 43% or lower since late 2021, including 41% now. However, Biden remains above the lowest points for both of his predecessors on the issue — 31% for Obama and 33% for Trump.

  3. Immigration: Lower Than Trump

  

  As recently highlighted in our weekly newsletter, Biden has mostly fared worse than his recent predecessors on the issue of immigration. Fewer Americans approve of the job he is doing on immigration than ever did for Trump. Obama received low approval on immigration at points in his first and second terms but saw some improvement by the end of his presidency.

  4. Handling Russia: Similar to Obama and Trump

  

  With the Russia-Ukraine war, which started over a year ago, being a major foreign policy focus of his presidency, Biden has spent a lot of time communicating to the American public about Russia. Today, Biden stands virtually tied with Trump’s last reading on handling U.S.-Russia relations, and his 37% approval rating on Russia matches Gallup’s only rating of Obama on the matter, from 2014.

  5. Relations With China: Room for Improvement

  

  For the third year in a row, Americans see China, more than any other country, as the United States’ greatest enemy in the world. As relations with China have soured, Biden’s marks on how he is handling it have worsened. Rising tensions between the nations in the past two years may also be a factor in the decline of Biden’s marks.

  Gallup measured Obama’s approval on relations with China (39%) just once, in 2012, while it did so on three occasions for Trump, ranging from 40% to 47%.

  6. Response to COVID: A Strong Point

  

  COVID-19 emerged as a global pandemic in 2020 and thus has only been an issue of concern for Biden and Trump. This is one area Biden has generally outperformed his predecessor, with approval ratings ranging between 47% and 67%. After an initial high of 60% for Trump at the beginning of the pandemic, his ratings were between 36% and 44% in the summer and fall of 2020.

  To stay up to date with the latest Gallup News insights and updates, follow us on Twitter.

  Explore President Trump’s approval ratings and compare them with those of past presidents in the Gallup Presidential Job Approval Center.

  Learn more about how the Gallup Poll Social Series works.

  Tyler Durden
  Tue, 03/21/2023 – 23:05

• Alan Dershowitz: Trump Can Serve As President "From Prison"
  Alan Dershowitz: Trump Can Serve As President “From Prison”

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

  Retired Harvard Law professor Alan Dershowitz suggested that former President Donald Trump could run for office or even serve as president if he is convicted in connection to the Manhattan District Attorney’s office investigation.

  

  Trump announced on social media this past weekend saying he believes he’ll be arrested soon in connection to District Attorney Alvin Bragg’s probe into whether he was involved in allegedly making hush money payments to during the 2016 campaign. Unnamed sources have also told news outlets that the former president may be indicted, but Trump has denied any wrongdoing.

  Dershowitz, an attorney who has represented controversial clients including O.J. Simpson and Jim Bakker, told Newsmax that he believes Trump will be indicted in New York City because of what he described as an unfair legal system in the Democrat-dominated city. But if Trump is convicted and sentenced to a prison term, the U.S. Constitution will allow him to serve in that capacity.

  “He will be indicted,” Dershowitz, who also provided legal counsel to Trump during his first impeachment trial, told Newsmax. “In New York, you can indict a ham sandwich. In New York City, you can convict a ham sandwich because the jury pool is so unfair. Even if he’s convicted, he can run for president. He can run for president from prison; he can even serve as president from prison.”

  The U.S. Constitution doesn’t bar felons from holding elected office, including the presidency. The Constitution’s text only lists three criteria to run for president: a candidate has to be age 35 or older, be a natural born citizen, and they must have lived in the United States for at least 14 years.

  In a separate interview with Chris Cuomo, Dershowitz asserted that “Trump can run from prison, the way [Boston] Mayor [James] Curley did, and he could win, and he can govern from prison.” Curley, a Democrat who served as mayor of Boston four times in the early part of the 20th century, was convicted twice and notably served time in prison during his fourth term in office.

  

  Trump has previously stated that he will continue to run for president in 2024 even if he is charged. Later this month, Trump is slated to hold his first 2024 rally in Waco, Texas.

  There has been no public announcement of any time frame for the Manhattan grand jury’s secret work in the case. At least one additional witness is expected to testify, further indicating that no vote to indict has yet been taken, according to a person familiar with the investigation who was not authorized to publicly discuss the case and spoke on condition of anonymity.

  A Trump-affiliated lawyer, Robert Castello, told media outlets on Monday that he testified in front of a Manhattan grand jury and sought to denigrate testimony put forth by Michael Cohen, a former Trump attorney who has been described as a key witness in the case. Castello said that Cohen, who was sentenced to federal prison on a range of charges, is an unreliable witness.

  Meanwhile, Bragg’s office has issued few public statements in connection to the investigation. A spokesperson for the district attorney issued a response to the Washington Post regarding a House Republican demand for information and testimony in connection to the Trump probe, merely saying that claims that New York City is dealing with a surge in violent crime is not true.

  A Trump lawyer, Susan Necheles, told The Associated Press that Trump’s weekend Truth Social post was “based on the media reports,” and another Trump spokesperson said there had been “no notification” from Bragg’s office, though the origin of Trump’s Tuesday reference was unclear. The Epoch Times has contacted Bragg’s office for comment.

  Trump’s aides and legal team have been reportedly preparing for the possibility of an indictment. Should that happen, he would be arrested only if he refused to surrender. Trump’s lawyers have previously said he would follow normal procedure, meaning he would likely agree to surrender at a New York Police Department precinct or directly to Bragg’s office.

  The indictment of Trump, 76, would be an extraordinary development after years of investigations that yielded essentially nothing. It would also be the first time a current or former president was indicted.

  Tyler Durden
  Tue, 03/21/2023 – 22:45

• SCOTUS Overturns Appeals Court Upholding Abortion Without Parental Consent
  SCOTUS Overturns Appeals Court Upholding Abortion Without Parental Consent

  Authored by Matthew Vadum via The Epoch Times (emphasis ours),

  The Supreme Court threw out a federal appeals court decision on March 20 that upheld the right of a minor to go to court for permission to pursue an abortion without notifying her parents.

  

  Justice Ketanji Brown Jackson was the sole member of the Supreme Court to file a dissenting opinion in the case, Chapman v. Doe, court file 22-312.

  In the case, the court vacated the ruling of the U.S. Court of Appeals for the 8th Circuit and remanded the case to that court with instructions to dismiss the proceeding as moot. Jackson objected to the specific manner in which this was done because it erased any precedential value the circuit court ruling may have had.

  In the case, a pregnant minor, Jane Doe, visited her local courthouse to apply for a dispensation allowing her to bypass parental consent for the planned abortion. The office of the petitioner, Michelle Chapman, circuit clerk for Randolph County, Missouri, told her she couldn’t file a bypass petition without notifying a parent.

  Doe got an abortion in Illinois after a court there authorized it, absent parental notification.

  Doe filed a civil rights lawsuit in federal district court for damages, claiming that Chapman violated her 14th Amendment rights. Chapman took the position that she was immune to lawsuits because she followed a Missouri statute and a judge’s directions.

  Chapman also claimed that Doe’s right to a bypass hearing wasn’t clearly established and that she therefore couldn’t have violated Doe’s rights.

  In what was perceived as a victory for the pro-abortion movement, the district court ruled against Chapman, finding that the statute didn’t require prehearing notification of the minor’s parents to obtain judicial authorization for an abortion.

  The 8th Circuit later determined that Doe’s claim must be allowed to proceed, finding that the right to bypass the parents was clearly established under the 14th Amendment.

  But in September 2022, Chapman asked the Supreme Court to review the case after the Supreme Court overturned Roe v. Wade, finding there was no right to abortion in the U.S. Constitution and returning the regulation of abortion to the states.

  In its June 24, 2022, ruling in Dobbs v. Jackson Women’s Health Organization, the high court also reversed a related 1992 precedent, Planned Parenthood of Southeastern Pennsylvania v. Casey, which affirmed Roe and declared that a woman had a right to obtain an abortion before fetal viability without undue interference from the state.

  “Doe’s claims rely on the proposition” that requiring parental notification of a judicial bypass proceeding must satisfy the undue burden test announced in Casey, Chapman said.

  Read more here…

  Tyler Durden
  Tue, 03/21/2023 – 21:25

• Rent Inflation Approaches Two-Year Low Amid Cooling Market
  Rent Inflation Approaches Two-Year Low Amid Cooling Market

  Federal Reserve Chair Jerome Powell and his entire team should be cognizant of the fact that rents have been declining for many months. Despite this, Powell has been examining laggard data that persistently appears inflated. 

  The latest CoreLogic report adds to the mounting evidence of leading rental market indicators showing rent inflation has been cooling for the ninth consecutive month in January, as the yearly growth rate slid to the lowest point since 2021. 

  Single-family homes across the US experienced a 5.7% increase in value compared to the previous year. Each of the 20 major metropolitan regions monitored by CoreLogic saw annual rent growth in the single-digit range for the first time since the end of 2020.

  

  Despite the high-frequency rent data from CoreLogic and other research firms indicating a clear deceleration, this slowdown has not yet been reflected in the Fed’s consumer-price data due to delays in the calculation process. 

  Back in September, when looking at various leading rental market indicators, we reported that “Manhattan Apartment Rents Finally “Plateau” After Red-Hot Summer” a trend reversal that was also observed at the national level as we observed in “Nationwide Rents Drop For First Time In Two Years.” With rents peaking in August, two months later, the rental drop accelerated, as we discussed in “Just Tumbled The Most On Record As Economy Craters.” 

  Last month we penned a note, “Apartment Rents Slide Across All US Cities Amid “Crush” Of New Supply,” but outlined the Fed’s shelter inflation data is well behind the curve (as usual). 

  

  The good news is that with a long delay, the coming supply of new apartments – especially in places where housing inventory remains unusually low to the benefit of home sellers – will give renters more choices, making it not only more difficult for landlords to hike rents at rates seen last year. 

  Tyler Durden
  Tue, 03/21/2023 – 21:05

• Gasoline Prices Buck The Trend Ahead Of Driving Season
  Gasoline Prices Buck The Trend Ahead Of Driving Season

  By Charles Kennedy of OilPrice.com

  With U.S. gasoline prices trending about 3 cents lower than the same time last week, analysts are now speculating that the banking crisis and broader financial markets concerns may prevent prices at the pump from ticking upwards as they would normally do ahead of the summer driving season.

  “The broad concern over recent failures of the U.S. and global banking system has put enough downward pressure on oil prices that we saw a reprieve in rising gasoline prices in the national average last week,” said Patrick DeHaan, the senior petroleum analyst for Chicago-based GasBuddy.

  

  DeHaan said that while markets are volatile, and we will see some differentiation in prices as certain states switch to the more expensive summer blend of gasoline, much going forward in the immediate future depends on how the banking crisis plays out.

  “Should the outlook for the banking sector improve, we could again see gasoline prices race higher, while continued or additional distress could raise the possibility of a broader economic slowdown, keeping gasoline prices in check,” he said. “Overall, there are a lot of possibilities.”

  Shares of Credit Suisse plunged some 60% early on Monday after its rival, UBS, announced it would take over the bank for $3 billion to shore up global markets. The plunge in Credit Suisse shares last week followed the failures of U.S regional banks Silicon Valley Bank (SVB) and Signature Bank.

  

  According to AAA, Monday’s natural average per gallon of gasoline is $3.443, compared to $3.446 on Sunday, and $3.473 a week ago. Monday was the first time in two weeks that gasoline prices in the U.S. had declined.

  Last week, gasoline inventories fell 2.1 million barrels amid maintenance and the usual transition to summer gasoline began to replace less expensive winter fuel. Implied gasoline demand rose by 32,000 bpd. 

  Tyler Durden
  Tue, 03/21/2023 – 20:45

• Zelensky Invites China To Discuss Peace After 'No Breakthrough' In Xi-Putin Meeting
  Zelensky Invites China To Discuss Peace After ‘No Breakthrough’ In Xi-Putin Meeting

  Ukraine appears willing to engage China in mediation efforts to end the war, at a moment China’s Xi Jinping is in Moscow discussing Beijing’s own 12-point peace plan. With the main part of talks with Putin having been concluded as of Tuesday night, there’s been no breakthrough among the “friends” to come of it thus far.

  “We believe that many of the provisions of the peace plan put forward by China are consonant with Russian approaches and can be taken as the basis for a peaceful settlement when they are ready for that in the West and in Kyiv. However, so far we see no such readiness from their side,” Putin said, laying blame on the Ukrainians.

  

  But Ukraine’s President Volodymyr Zelensky said Tuesday his government has reached out to Beijing. Zelensky said he has invited China to engage in talks on implementation of Kyiv’s own peace formula, and that he’s waiting for an answer.

  “We offered China to become a partner in the implementation of the peace formula. We passed over our formula across all channels. We invite you to dialogue. We are waiting for your answer,” Zelensky announced at a Tuesday a press conference. He added: “We are receiving some signals, but there are no specifics yet”.

  This comes after last month Zelensky issued an unexpectedly positive response to Xi’s offering China’s 12-point peace plan, in an effort to jumpstart negotiations. “I think the fact that China started talking about Ukraine is not bad. But the question is what follows the words,” Zelensky said at the time. “I think some of the Chinese proposals respect international law, and I think we can work on it with China. Why not? Our goal is to gather many around us to isolate one [Russia],” he had added.

  “It is clear that in Beijing’s view the conflict in Ukraine will continue, that the West has no plan to solve it, and that China expects its role as mediator will only grow.”https://t.co/TL5FX8QsyG

  — Trita Parsi (@tparsi) March 21, 2023

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

  The reality is that since China first unveiled the broad peace plan weeks ago, its role as a mediator does appear to be taking shape.

  But all the while this has resulted in cynicism and condemnation from Washington as the US watches helplessly while Beijing and Moscow embark on an unprecedented level of cooperation.

  Xi Jinping: Change is coming that hasn’t happened in 100 years. And we are driving this change together.

  Putin: I agree.

  Xi Jinping: Please, take care, dear friend.

  Putin: Have a safe journey! pic.twitter.com/eYdKFkl2PL

  — Russians With Attitude (@RWApodcast) March 21, 2023

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

  Likely pressure is also growing on Zelensky to reject any Chinese hand of friendship and mediation – seeing in it a ploy to keep Russia strong and on the offensive in Ukraine. If China-Ukraine talks do come together with an eye toward bringing in Moscow, the US certainly won’t be happy.

  Tyler Durden
  Tue, 03/21/2023 – 20:25

• …And Just Like That, The 'Tight Money' Era Is Over
  …And Just Like That, The ‘Tight Money’ Era Is Over

  Authored by John Rubino via Substack,

  At the beginning of last week, everyone expected central banks to “tighten until something breaks”. By the end of the week it was clear that they’d already broken everything.

  Two middling US banks imploded, European mega-bank Credit Suisse finally died a well-justified death, and “who’s next?” speculation ran wild. And just like that, the era of tight money ended.

  Now the world’s monetary authorities have broadened the definition of “systemic risk” to cover pretty much anything. FDIC insurance has been extended to every bank account of any size. Credit Suisse is being bought for pennies on the dollar by rival Swiss giant UBS. And according to Bloomberg,

  The Federal Reserve and five other central banks announced coordinated action on Sunday to boost liquidity in U.S. dollar swap arrangements, the latest effort by policymakers to ease growing strains in the global financial system.

  Central banks involved in the dollar swaps will “increase the frequency of seven-day maturity operations from weekly to daily,” the Fed said in a statement coordinated with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank. 

  The Fed’s balance sheet — a measure of how much currency it creates and dumps into the economy — had been shrinking, which is to say the US money supply had been contracting. Now it’s soaring, up $300 billion in a matter of days.

  

  The piecemeal, fingers-in-the-dike character of this response can be explained in one of two ways: Either the morons running the global financial system were completely blindsided because they actually thought rising interest rates and a falling money supply would slow inflation without unintended consequences, despite a century of contrary experience. Or the evil geniuses running the global financial system have engineered a multi-faceted crisis as an excuse to assume total control.

  I’m agnostic on the above, but in either case, it seems clear that the world’s governments won’t be able to stop conditions from deteriorating. Consider:

  Lenders were already scared. Now they’re terrified

  Banks were already tightening credit standards before last week’s flash crisis. Now virtually all of them will stop lending to any but their strongest clients. A year from now the updated version of this chart will show a spike to record high tightening levels.

  

  Autos are a bursting bubble

  The number of underwater car loans, where the loan balance exceeds the value of the car, has been rising for months. Interest rates on used car loans had jumped from an average of 8% to over 10% in the past year. And auto loan delinquency rates have climbed to their highest levels in over 15 years, with an especially big jump among subprime borrowers. Now panicked banks will make car loans even harder to get while a growing number of borrowers will default on their existing loans. Typical recession behavior, but this time against a crisis backdrop.

  

  Commercial real estate was toast in any event, but now it’s burnt toast

  Office buildings, warehouses and such never fully recovered from the pandemic lockdowns, and by the 4th quarter of 2022 delinquencies on commercial real estate loans were rising sharply. Building prices were beginning to fall, and the specter of a commercial real estate crash was looming. And that was before banks and regulators went into their current panic mode.

  

  Now just try refinancing an underperforming office complex and see how it goes.

  And there’s more…

  Stephanie Pomboy, an analyst whose work has been spot-on lately, tweeted this 12 hours ago:

  ya know what’s keeping me up at night? Thinking about the unseen exposure by NONbank finl institutions to things far riskier than the stuff bringing down the banks. Esp, the prospect that some insurer (&counterparty in the giant mkt of credit derivatives) is about to go toes up

  And don’t even get me started on pensions. I’ve ranted breathlessly on that. They will be the subject of a bailout the likes of which we have never before witnessed. If you think the bank bailout is gonna be massive…stay tuned. You ain’t seen nothing.

  In other words, a lot can still go wrong, because excessive leverage is hidden all over the place. A pension bust would mean a multi-trillion dollar bailout, for instance, and that was probably coming even in “normal” times. As for derivatives, well, they’ll destroy the world eventually, so why not now?

  The take-away? In the midst of all the various credit crises, controlling inflation will be moved to the back burner. And the world will realize that the central banks are out of ammo, with no choice but to let their currencies burn.

  *  *  *

  Subscribe to John Rubino

  Tyler Durden
  Tue, 03/21/2023 – 20:05

• First Signs Of A Notable Low-Income Slowdown
  First Signs Of A Notable Low-Income Slowdown

  The bank crisis, Fed and macro continue to lead the market in a daily rollercoaster, and while that won’t change for at least a few days, Goldman’s consumer retail trader Scott Feiler notes in his trading note today, there are some notable things to highlight in consumer…

  1. First signs of a notable low-income slowdown?:

  Feiler notes that investors have been bearish consumers for much of the year, even before the issues with the banks: he writes that “we had heard COST and VISA talk to modest deceleration in February (100-200 bps), but nothing precipitous. The big question has been whether anyone has seen a more worrisome slowdown with tax refunds (down double-digits y/y) and SNAP reductions (end of February) more front and center.”

  

  Well, according to the Goldman trader, we got that answer this morning from CTRN (Citi trends): it is an apparel store that caters to the low-income consumer. They guided 1Q sales to be down low double-digits vs Consensus +2%. This does not seem like conservatism like some other below consensus 1Q guides, as they explicitly said 1Q is off to a slow start. They said that given the macro-economic environment, they expect low income families, the bulk of their customer base, to remain under pressure in 1H.

  2. Is this a read-across though or idiosyncratic?

  CTRN is not getting a pass on that guide/commentary, with the stock -14%. The Goldman trader notes that “some of the feedback this morning from investors was that many consumer companies were at competitor conferences last week and the majority of companies continued to sound “fine” still.” While some of the other low-income names are underperforming, including WMT/BIG/DG/DLTR/FIVE/MCD, it’s still not clear that is just due to their low-income exposure, but potentially also from the rotation into beta today (IWM > SPY by over 100 bps today).

  

  Bottom line: “investors are taking the comments from CTRN at least somewhat seriously, but are skeptical it’s a true read-across.”

  Tyler Durden
  Tue, 03/21/2023 – 19:45

• Victor Davis Hanson: What Happened To Stanford?
  Victor Davis Hanson: What Happened To Stanford?

  Authored by Victor Davis Hanson via AmGreatness.com,

  The list of serial embarrassments at Stanford reads like the suicides of Greek tragedy, where divine nemesis follows hubris…

  

  Stanford was once one of the world’s great universities.

  It birthed Silicon Valley in its prime. And along with its nearby twin and rival, UC Berkeley, its brilliant researchers, and teachers helped fuel the mid-20th-century California miracle.

  That was then.

  But like the descent of California, now something has gone terribly wrong with the university.

  Students at Stanford Law School recently shouted down visiting Fifth Circuit Court of Appeals Judge Kyle Duncan. He had been invited to give a lecture by the school’s Federalist Society. 

  The judge never even got the chance. The law school students drowned him out. They flashed obscene placards. They screamed that he was “scum.” One yelled he hoped the judge’s own daughters would be raped.

  Others bellowed, “You’re not welcome here, we hate you!” “Leave and never come back!” “We hate FedSoc [Federal Society] students, f–k them, they don’t belong here either!” and “We do not respect you and you have no right to speak here! This is our jurisdiction!”

  When the judge tried to reply, they drowned him out with “liar” and “scumbag.” Then, mission accomplished, they smugly stomped out.

  Note these were ostensibly not teenaged undergraduates. Instead, they were wannabe adult professionals, in law school to learn jurisprudence and to enter the elite American legal system that is supposed to have protocols separating it from the mobocracies prevailing abroad.

  One of those foundational principles is to honor the Constitution’s protection of free speech and expression—not to mention the ancient idea of respecting an invited guest, or the custom to treat with deference a federal judge, to say nothing of the duty to honor the codes and laws of the institution that they have chosen to join which prohibit disruption of lectures and any effort to drive out public speakers.

  When an exasperated Justice Duncan called out for a university administrator to restore calm, his podium was instead hijacked by Associate Dean for Diversity, Equity, and Inclusion Tirien Steinbach. She then gave her own preplanned, scripted lecture that sided with the disruptive protesters! Quis custodiet ipsos custodes?

  The diversity dean then turned on the speaker. She asked the startled judge whether it was even worth supporting his free speech rights, given he and his views were deemed abhorrent to the new absolutist Stanford.

  Note well: DEI Deans normally do not attend law school lectures. She showed up because she apparently knew in advance that the law students would violate their own university’s codes of conduct and disrupt a speaker.

  So she had planned, again in advance, to do nothing to stop them. Instead, she would prepare a performance-art speech for such a certainty, to chastise the speaker and defend the disrupters. She assumed correctly that none of the other administrators, who also strangely attended, would admonish her or the students for violating the laws of their own university. She apparently assumed, once more rightly, that her own leftist fides on campus would be enhanced.

  So far neither the diversity dean nor the students have been disciplined by the university. When the dean of the law school, Jenny Martinez, offered an apology (but did not punish the students), most of her own class walked out on her. And dozens of Stanford’s law school students lined the corridor in attempts to intimidate her as if she was some sort of toxic pariah.

  In a Soviet-style finale, the Acting Associate Dean of Students Jeanne Merino advised the Federalist Society students who were targeted by fellow law students that there were “resources that you can use right now to support your safety and mental health.” Then Merino directed them, inter alia, to none other than Diversity, Equity, and Inclusion Dean Tirien Steinbach herself, the very dean who had taken over the podium to lecture Judge Duncan!

  The debacle revealed three disturbing characteristics about the Stanford law students:

  One, they acted as if they were bullies and cowards. Videos of the mess showed how they turned mob-like in their chanting, flashing creepy placards, and, like Maoists, walking out on cue. Yet, when the judge fired back at their rudeness, like wounded fawns they took offense and pouted. And later, when there was mention that the names or photos of the protestors might be published, tit-for-tat, in the manner they themselves had put up posters of the Federalist Society members, they screamed that such exposure was unfair.

  Two, they seem incompetent. To the degree there were any questions and answers, few knew how or even attempted to engage the judge on matters of the law and judicial theory. In other words, any grammar-school students could have matched their performance since it required no knowledge of the law, just an ability to chant and—in groupthink style—cry, scream, and mimic the majority.

  Three, they were arrogant. One protestor blurted out that Justice Duncan probably could not have gotten into Stanford, as if their own puerile performance was proof of the school’s high standards of admission. That was obnoxious in addition to the fact that, as of recently, it may have become not so true. In July 2022, Stanford Law School announced that an uncharacteristic 14 percent of its graduates had flunked the California bar exam on their first attempt, a radical increase from past years. Four other California law schools—UC Berkeley, UCLA, UC Irvine, and USC—had a higher bar pass rate.

  After watching the sad performance, one wonders who taught such rude and unimpressive people.

  Ethics complaints were lodged last year against Stanford Law Professor Michele Dauber for tweeting a series of gross attacks on Camille Vasquez (“some Pick Me Girl lawyer”), the widely regarded attorney of Johnny Depp. Law professor Dauber also tweeted sick fantasies about Depp’s death—and imagined the actor’s corpse would “end up in a trash can eaten by rats.” Was she the sort of model that the law students had emulated?

  Then there was Professor Pamela Karlan’s 2019 testimony before the House Judiciary Committee’s hearing on the impeachment of President Trump. Off-topic and gratuitously, Karlan weirdly attacked the name of the president’s youngest son, Barron Trump: “While the president can name his son Barron, he can’t make him a baron.” Was that the sort of puerility that the law students sought to embrace?

  In 2021, a graduating Stanford law student sent the law school student body a bogus call to violence as if it was authored by the school’s small conservative Federalist Society. The fake call to arms read in part: “The Stanford Federalist Society presents: The Originalist Case for Inciting Insurrection . . . Riot information will be emailed the morning of the event . . . ” Was that the sort of smear that the law students learned?

  

  TIMOTHY A. CLARY/AFP via Getty Images

  Sam Bankman-Fried, the architect of the $26 billion FTX cryptocurrency meltdown that destroyed the livelihoods of thousands, is the son of two other Stanford Law School professors. Somehow they were involved in the Bankman-Fried family’s acquisition of a $16.4 million vacation home gifted to them from FTX shortly before it imploded.

  According to the New York Times, both parent professors were intimately involved in their son’s multibillion-dollar business, either directly or through gifts to one parent’s political donor network:

  He [Professor Bankman] and his wife, the Stanford Law professor Barbara Fried, were more than just supportive parents backing their child’s business. Mr. Bankman was a paid FTX employee who traveled frequently to the Bahamas, where the exchange was based. Ms. Fried did not work for the company, but her son was among the donors in a political advocacy network that she orchestrated.

  Were these the ethical models that had influenced the law students?

  Bankman-Fried is currently out on a $250 million bond and living under bond on the Stanford campus. He is out, in part, because two Stanfordites, former law school dean Larry Kramer and Andreas Paepcke, a Stanford senior research scientist, put up a $500,000 guarantee. Former Stanford student Caroline Ellison, a partner with Sam Bankman-Fried in his various financial collapses, has pled guilty to conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering, and is now working with prosecutors. 

  Perhaps the law school should not be singled out since it simply reflects what appears to be symptomatic of a once-great university’s freefall.

  

  Philip Pacheco/Getty Images

  A former Stanford student Elizabeth Holmes was recently sentenced to a long prison term for defrauding investors in connection with her company Theranos. She had fraudulently claimed to have invented a “revolutionary” miniaturized blood testing device. Many of her corporation’s oversight board members were drawn from the Stanford community.

  The Wall Street Journal recently ridiculed a Stanford university group’s publication of a taboo vocabulary list (“Elimination of Harmful Language Initiative”). “Harmful” words supposedly unwelcome at Stanford included inflammatory expressions such as “American” and “immigrant.”

  The Journal also noted that perhaps the cause of such Orwellianism was too many idle administrators chasing too few students: “For 16,937 students, Stanford lists 2,288 faculty and 15,750 administrative staff.”

  More disturbing was the revelation of a “snitch list.” The harmful language initiative apparently is tangential to another new idea of rewarding Stanford snitches who feel offended by hurtful expression. Or, as the so-called “The Protected Identity Harm (PIH) Reporting” system put it, software will monitor campus speech and even offer “financial rewards for finding/reporting” any who supposedly violate approved language usage.

  Was this the sort of campus experience that the parents of Stanford students pay for at about $90,000 per year?

  Stanford was also plagued by a recent admissions scandal when a former head sailing coach accepted donations to his Stanford sailing program in exchange for trying to help two students’ admission applications. 

  

  Tom Williams/CQ Roll Call

  Then there were campus attacks on a pair of eminent Stanford public health experts, Drs. Scott Atlas and Jay Bhattacharya. Both were pilloried mercilessly by some of the Stanford faculty and administration for daring to doubt the efficacy of what has proved to be disastrous government-enforced COVID quarantines and school shutdowns.

  Yet the arguments of Atlas and Bhattacharya—the science does not support the mandatory use of masks to halt the pandemic, natural immunity was as efficacious as or superior to vaccine-induced immunity, the vaccinations would not offer lasting protection against either being infected or infecting someone else, and the quarantine lockdowns would cause more damage and death (familial abuse, suicides, substance abuse, mental depression, uneducated children, economic catastrophe, millions of missed surgeries, screenings, tests, and doctor’s appointments) than the virus itself—were all eventually substantiated.

  Neither doctor received apologies from the administrators, faculty, or students who attacked them.

  Currently Stanford’s long-serving president Marc Tessier-Lavigne—an accomplished neuroscientist—has been attacked serially by the Stanford Daily campus newspaper, which has called for his resignation. It alleges the president was culpable of scholarly misconduct concerning the publication of a joint research paper decades ago. The charges are not proven and remain under investigation. But they make it difficult for a president to weigh in on the above controversies when some faculty and the student newspaper are serially calling for him to step down for ethics violations. 

  In July 2020, a Stanford visiting neurology researcher, Chen Song, was arrested for not disclosing that she had apparently been an agent of China’s People’s Liberation Army. Stanford had also been investigated by the Department of Education for some $64 million in alleged Chinese-affiliated donations over a decade, all from previously unnamed, unidentified, and anonymous Chinese donors, most of them believed to be government associated.

  The list of serial embarrassments reads like the suicides of Greek tragedy, where divine nemesis follows hubris. In this case, overweening intolerant ideology has sabotaged disinterested inquiry and meritocracy. Arrogance and sanctimoniousness lead Stanford to continue down this spiral—rather than pause, reflect, and redirect—and thereby only compound the public ridicule.

  Stanford’s once-justified reputation for civility, transparency, tolerance, and professional ethics has been shredded before a global audience.

  Given its hallowed history, and the university’s vital global role in cutting-edge research, medicine, and professional training, something has to change—before it is too late.

  The university requires an array of compulsory workshops that faculty and many students must undergo. But given these recent debacles, perhaps two additional new training sessions are needed: required ethics instruction and a mandatory anger-management seminar.

  Tyler Durden
  Tue, 03/21/2023 – 19:25

• US Secretary Of State Rebuffs China – No Diplomatic Solution Without Total Russian Pullback
  US Secretary Of State Rebuffs China – No Diplomatic Solution Without Total Russian Pullback

  Is the Ukraine war meant to go on forever?  For NATO officials and the Biden Administration, it seems as if this is the intention.  Secretary of State Antony Blinken made statements directed specifically to China during a press conference on the 2022 Human Rights Report, citing President Xi’s recent four hour meeting with Vladimir Putin in Moscow and China’s calls for diplomacy.  Blinken, not surprisingly, rebuffed China’s proposal because it does not include a total retreat of Russian forces from the Donbas regions of Ukraine.  He went on to accuse China of giving “diplomatic cover” to Putin. 

  .@SecBlinken on Chinese President Xi visit to Moscow: “The world should not be fooled by any tactical move by Russia supported by China, or any other country, to freeze the war on its own terms…” pic.twitter.com/vOWxBawsRz

  — CSPAN (@cspan) March 20, 2023

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

  Four areas making up Eastern Ukraine passed referendums to join Russia in September of last year, though NATO claims the votes were “rigged” in favor of the Kremlin.  Donbas citizens have been engaged in a rebellion against the Ukrainian government ever since the 2014 Maidan Revolution. 

  NATO leadership continues to argue that peace talks with Russia would only be a stalling tactic and that Russia cannot be allowed to keep hold of Eastern Ukraine because of the “domino effect” – The belief that Russia intends to invade other nations if it succeeds in Ukraine.  There is no evidence so far to support this theory.     

  With a Russian pullback highly unlikely and Ukraine with limited means to take back the Donbas, Blinken’s comments merely reaffirm what everyone already knew: NATO intends for the war to continue perpetually.  Take note that Blinken, like other Biden Administration officials, acts as if NATO is the arbiter of when and how diplomatic solutions might be pursued.  He does not suggest asking the Ukrainian people if they are open to China’s proposal.  This is because NATO, according to the evidence available, is in fact running the war.  Ukraine might be the ground on which the battles are fought, but the conflict is actually between the US, Europe and Russia.  

  Given this reality, one has to wonder what will happen if Ukraine fails to generate any forward momentum, or if Russia engages in another offensive?  How long before the situation escalates?  

  Tyler Durden
  Tue, 03/21/2023 – 19:05

• First Republic Shares Plunge After-Hours As Restructuring Plans Fizzle
  First Republic Shares Plunge After-Hours As Restructuring Plans Fizzle

  At one point today, First Republic Bank (FRC) shares were up over 50% (based on the narrative that Yellen said the Biden admin was prepared to offer more support to banks).

  That is no longer the case as most of those gains have been erased following a number of reports late in the day on the state of the bank’s restructuring efforts, as no buyer has emerged.

  

  While investors have reportedly expressed interest in helping, the firm’s unrealized losses have been a sticking point, and The Wall Street Journal reports that FRC is adding Lazard and McKinsey to help review strategic options alongside JPMorgan, which had already been hired to advise on moves the bank could make to regain its footing.

  The addition of Lazard and McKinsey underscores what a complicated situation First Republic is in – one that defies an easy fix.

  Finding a willing buyer for the bank, whose customers had withdrawn some $70 billion since Silicon Valley Bank’s collapse (and has been downgraded deeper into junk), selling stock at these depressed levels and other alternatives all face their own substantial hurdles.

  Additionally, Bloomberg reports that US officials are exploring the possibility of government backing to encourage a deal that would shore up the lender, people with knowledge of the situation said.

  Among options being discussed, the government could play a role in lifting assets out of First Republic that have eroded its balance sheet.

  Additional ideas have included offering liability protection, applying capital rules more flexibly or easing limits on ownership stakes, the people said.

  

  Finally, we note that the bank itself issued a statement to its clients late in the day:

  To Our Valued Clients,

  The events of the past two weeks have been unprecedented, and we want to take a moment to provide an update.

  Our commitment to client service is unchanged, and we remain well-positioned to continue to manage deposit activity. Today, as every day, we are processing transactions, opening accounts, funding loans, answering questions, and serving clients’ overall banking and wealth management needs.

  We are grateful for your ongoing advocacy for the value of our relationship-based, exceptional service. We keep hearing from you, and the overwhelming theme is this: “We love our bank.” We want to extend our sincerest thanks for your continued and unwavering support.

  If you have any questions, please don’t hesitate to reach out to your banker or wealth manager.

  “processing transactions” and “opening accounts”?

  As S&P Global warned on Sunday, last week’s deposit infusion may not be enough to overcome the bank’s “substantial business, liquidity, funding, and profitability challenges.”

  Tyler Durden
  Tue, 03/21/2023 – 19:02

• Judge OKs Lawsuits Against JPMorgan, Deutsche Bank For Epstein Connections
  Judge OKs Lawsuits Against JPMorgan, Deutsche Bank For Epstein Connections

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

  JPMorgan Chase & Co. and Deutsche Bank will face lawsuits over claims they enabled disgraced financier and convicted sex offender Jeffrey Epstein to traffic his victims, a New York federal judge ruled on March 20.

  

  Two women referred to as “Jane Doe” filed federal class-action lawsuits against the banks in November last year, and the U.S. Virgin Islands filed its lawsuit against JPMorgan Chase & Co. in December.

  In his four-page order (pdf), U.S. District Judge Jed Rakoff said the women can try to make a case on claims that the defendants “knowingly benefited from participating in a sex-trafficking venture,” “obstructed enforcement of the Trafficking Victims Protection Act,” and “negligently failed to exercise reasonable care to prevent physical harm.”

  They can also pursue a claim that the banks “negligently failed to exercise reasonable care as a banking institution providing non-routine banking,” the judge said. However, all other claims are dismissed from the lawsuits.

  With regard to the lawsuit against JPMorgan Chase & Co. by the U.S. Virgin Islands, the judge ruled that the defendants can pursue the claim that the bank “knowingly benefited from participating in a sex-trafficking venture.”

  Some of the other claims were dismissed.

  

  The judge’s opinion explaining the reasons for his rulings is set to be published soon.

  In their lawsuits, the two women had claimed that Epstein sexually abused them, and also accused the banks of aiding his sex trafficking operation by maintaining a financial relationship with him because he was a high-profile client.

  They also claim that multiple cash payments came from the banks to pay Epstein’s victims.

  Virgin Islands Accuses Bank of Enabling

  The lawsuit brought by the U.S. Virgin Islands accused JPMorgan of enabling Epstein’s sex trafficking by providing banking services to the financier after he had been convicted of sex charges and concealing suspicious wire and cash transactions, despite the fact that employees at the bank had raised concerns over the institution’s relationship with Epstein.

  It also suggests that JPMorgan senior officials at the bank were aware of Epstein’s crimes on the private and secluded island of Little St. James in the territory, and of the bank’s role in advancing them.

  The banks denied being aware of Epstein’s abuses and sought to have the lawsuits dismissed.

  Rakoff’s decision means the banks may be held financially liable for their relationships with Epstein if the plaintiffs succeed with their lawsuits in court.

  Epstein, 66, died in a New York City jail in August 2019 while awaiting trial on sex trafficking charges. He had been a client of JPMorgan from 2000 to 2013 and Deutsche Bank from 2013 to 2018.

  Following Rakoff’s ruling, Carol Thomas-Jacobs, the acting attorney general for the U.S. Virgin Islands, said the government looked forward to “ultimately proving our case in court.”

  ‘This Case Is Critically Important’

  “We are pleased that the U.S. Virgin Islands will continue to work alongside survivors to hold JPMorgan Chase accountable for enabling Jeffrey Epstein’s heinous sex-trafficking venture,” Thomas-Jacobs said in a statement.

  “This case is critically important to ensuring that financial institutions do their jobs, with the detailed, real-time information available to them, as a first line of defense in identifying and reporting potential human trafficking, as the law expects.”

  

  Elsewhere, Brad Edwards, the attorney representing Epstein’s accusers, called the rulings Monday “a monumental victory for the hundreds of survivors of Jeffrey Epstein’s sex-trafficking scheme and survivors of sexual abuse in general, all of whom can rest easier knowing no individual or institution is above accountability.”

  “Epstein’s sex-trafficking operation was impossible without the assistance of JPMorgan Chase, and later Deutsche Bank,” Edwards said, according to CNBC. “And we assure the public that we will leave no stone unturned in our quest for justice for the many victims who deserved better from one of America’s largest financial institutions.”

  The Epoch Times has contacted JPMorgan and Deutsche Bank for comment.

  Monday’s ruling comes after JPMorgan filed a lawsuit against its former investment banking chief Jes Staley earlier this month, alleging that Staley protected Epstein and demanding that he return all of his compensation from 2006 through 2013 while employed at the bank, totaling more than $80 million.

  Staley has claimed that he was unaware of Epstein’s sex crimes despite maintaining a friendly relationship with him while he worked as a top executive for the bank.

  “I thought I knew him well, and I didn’t,” he told The Wall Street Journal in early 2020. “For sure, with hindsight, with what we all know now, I deeply regret having had any relationship with Jeffrey Epstein.”

  Tyler Durden
  Tue, 03/21/2023 – 18:45

• Auto-Loan Denials Hit Six-Year High As Distress Cycle Shifts Into Gear
  Auto-Loan Denials Hit Six-Year High As Distress Cycle Shifts Into Gear

  The Federal Reserve has managed to aggressively raise interest rates and tighten financial conditions so much that it sparked a regional banking crisis and unleashed contagion in European banks. Even before the banking meltdown, financial conditions were tight, pressuring subprime consumers the most. 

  A new Federal Reserve Bank of New York survey shows the auto loan denial rate rose to 9.1%, a six-year high in February — and up from 5.8% in October. 

  

  “The findings show how higher interest rates are squeezing consumer credit in some key areas, in line with the Fed’s goal of cooling inflation. But in recent days, the collapse of three US banks has spurred fears of a sharper credit crunch that risks tipping the economy into a recession,” Bloomberg said. 

  We suspect denial rates will continue increasing as banks lose faith in subprime consumers. Earlier this year, when discussing the “perfect storm” hitting the US auto market, we showed that according to Fitch, “More Americans Can’t Afford Their Car Payments Than During The Peak Of Financial Crisis“…

  

  Since 1H21, the average rate on a new-car loan has nearly doubled, making vehicles much less affordable. 

  

  And the number of folks with $1,000 monthly car payments has soared in recent years, with the average loan amount financed hitting a record high of $40,000 — a disaster in the making… 

  

  The good news for the auto market is that tighter financial conditions have reduced the number of people buying new cars. However, that could only shift more consumers to the used car market in search of deals. As we noted in recent weeks, used car prices are reaccelerating. 

  Tyler Durden
  Tue, 03/21/2023 – 18:35

• SVB's Loans To 'Insiders' Exploded Ahead Of Its Collapse
  SVB’s Loans To ‘Insiders’ Exploded Ahead Of Its Collapse

  By now, we’ve all seen the losses that SVB faced on its unhedged book of Treasuries and MBS. We’ve all read about the gargantuan deposit run that occurred on the eve of its demise. We’ve all scratched the back of our heads at the percentage (and size) of uninsured depositors that were bailed out by the Biden administration.

  We have also all seen the relatively huge amount of share-selling by insiders in the month leading up to the bank’s inevitable collapse.

  But, this next chart is a doozy…

  Courtesy of Bloomberg’s reporting, it appears that not only were insiders dumping their shares faster than syphilitic hooker, there were loading up on loans from the bank at a scale that makes a mockery of any regulatory oversight…

  

  Yes, that’s real.

  Loans to officers, directors and principal shareholders, and their related interests, more than tripled from the third quarter last year to $219 million in the final three months of 2022 – a record dollar amount of loans going back over 20 years.

  Many questions come to mind – what were the terms, who were the recipients, what was the collateral?

  But, sadly, we will likely never know.

  However, we do note that the banking execs may be facing a serious shortfall (like their bank): if the loans were collateralized by SVB shares for example, those shares are now worthless, leaving the loan-heavy C-suite left to come up with the cash to repay the loans (and no, these loans don’t disappear with the bank’s liquidation).

  While there is no evidence of wrongdoing, and no personal details of the loans (names, purposes, collateral) are disclosed in the government filings, this headline dollar data is part of the regulatory oversight panel demanded to guard against banking executives getting preferential treatment.

  “Our loan portfolio has a credit profile different from that of most other banking companies,” the banks aid in its 2022 annual report.

  The firm added that “a significant portion of our loan portfolio is comprised of larger loans, which could increase the impact on us of any single borrower default.”

  With DOJ and SEC eyes already probing the stock-sales ahead of the collapse, we can only imagine what this chart will do to stoke some more WTF-isms from Washington’s elites.

  Tyler Durden
  Tue, 03/21/2023 – 18:25

• Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis
  Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis

  Authored by Jordan Schachtel via ‘The Dossier’ Substack,

  Last Thursday marked the three year anniversary of the infamous “15 Days To Slow The Spread” campaign.

  

  By March 16, yours truly was already pretty fed up with both the governmental and societal “response” to what was being baselessly categorized as the worst pandemic in 100 years, despite zero statistical data supporting such a serious claim.

  The Moment That Shook the World: “15 Days to Slow the Spread” (March 16, 2020)

  Fauci: “In states with evidence of community transmission, bars, restaurants, food courts, gyms, and other indoor and outdoor venues where groups of people congregate should be https://t.co/T9CGrYFNjv… https://t.co/SwDYBgN438 pic.twitter.com/k5oaU36YAR

  — The Vigilant Fox 🦊 (@VigilantFox) March 16, 2023

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  I was living in the Washington, D.C. Beltway at the time, and it was pretty much impossible to find a like-minded person within 50 miles who also wasn’t taking the bait. After I read about the news coming out of Wuhan in January, I spent much of the next couple weeks catching up to speed and reading about what a modern pandemic response was supposed to look like.

  What surprised me most was that none of “the measures” were mentioned, and that these designated “experts” were nothing more than failed mathematicians, government doctors, and college professors who were more interested in policy via shoddy academic forecasting than observing reality.

  Within days of continually hearing their yapping at White House pressers, It quickly became clear that the Deborah Birx’s and Anthony Fauci’s of the world were engaging in nothing more than a giant experiment. There was no an evidence-based approach to managing Covid whatsoever. These figures were leaning into the collective hysteria, and brandishing their credentials as Public Health Experts to demand top-down approaches to stamping out the WuFlu.

  DeSantis on Covid lockdowns: “So I call and say, ‘Deborah [Birx], tell me: when in American history has this been done?’ And she says, ‘It’s kind of our own science experiment that we’re doing in real time.’”

  Lockdowns were Fauci’s “science experiment”🤯pic.twitter.com/K7H8NIBPaV

  — Dr. Eli David (@DrEliDavid) March 14, 2023

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  To put it bluntly, these longtime government bureaucrats had no idea what the f—k they were doing. Fauci and his cohorts were not established or reputable scientists, but authoritarians, charlatans, who had a decades-long track record of hackery and corruption. This Coronavirus Task Force did not have the collective intellect nor the wisdom to be making these broad brush decisions.

  Back then, there were only literally a handful of people who attempted to raise awareness about the wave of tyranny, hysteria, and anti-science policies that were coming our way. There were so few of us back in March in 2020 that it was impossible to form any kind of significant structured resistance to the madness that was unfolding before us. These structures would later form, but not until the infrastructure for the highway to Covid hysteria hell had already been cemented.

  Making matters worse was the reality that the vast majority of the population — friends, colleagues, peers and family included — agreed that dissenters were nothing more than reckless extremists, bioterrorists, Covid deniers, anti-science rabble rousers, and the like.

  Yet we were right, and we had the evidence and data to prove it. There was no evidence to ever support such a heavy-handed series of government initiatives to “slow the spread.”

  By March 16, 2020, data had already accumulated indicating that this contagion would be no more lethal than an influenza outbreak.

  The February, 2020 outbreak on the Diamond Princess cruise ship provided a clear signal that the hysteria models provided by Bill Gates-funded and managed organizations were incredibly off base. Of the 3,711 people aboard the Diamond Princess, about 20% tested positive with Covid. The majority of those who tested positive had zero symptoms. By the time all passengers had disembarked from the vessel, there were 7 reported deaths on the ship, with the average age of this cohort being in the mid 80s, and it wasn’t even clear if these passengers died from or with Covid.

  Despite the strange photos and videos coming out of Wuhan, China, there was no objective evidence of a once in a century disease approaching America’s shores, and the Diamond Princess outbreak made that clear.

  Of course, it wasn’t the viral contagion that became the problem.

  It was the hysteria contagion that brought out the worst qualities of much of the global ruling class, letting world leaders take off their proverbial masks in unison and reveal their true nature as power drunk madmen.

  And even the more decent world leaders were swept up in the fear and mayhem, turning over the keys of government control to the supposed all-knowing Public Health Experts.

  They quickly shuttered billions of lives and livelihoods, wreaking exponentially more havoc than a novel coronavirus ever could.

  In the United States, 15 Days to Slow The Spread quickly became 30 Days To Slow The Spread. Somewhere along the way, the end date for “the measures” was removed from the equation entirely.

  

  3 years later, there still isn’t an end date…

  Anthony Fauci appeared on MSNBC Thursday morning and declared that Americans would need annual Covid boosters to compliment their Flu shots.

  NEW – Fauci: Americans will likely need “a booster shot once a year.”pic.twitter.com/Ec0zSWhV2b

  — Disclose.tv (@disclosetv) March 16, 2023

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  So much of the Covid hysteria era was driven by pseudoscience and outright nonsense, and yet, very few if any world leaders took it upon themselves to restore sanity in their domains. Now, unsurprisingly, so many elected officials who were complicit in this multi-billion person human tragedy won’t dare to reflect upon it.

  In a 1775 letter from John Adams to his wife, Abigail, the American Founding Father wrote:

  “Liberty once lost is lost forever. When the People once surrender their share in the Legislature, and their Right of defending the Limitations upon the Government, and of resisting every Encroachment upon them, they can never regain it.”

  Covid hysteria and the 3 year anniversary of 15 Days To Slow The Spread serves as the beginning period of a permanent scar resulting from government power grabs and federal overreach.

  While life is back to normal in most of the country, the Overton window of acceptable policy has slid even further in the direction of push-button tyranny. Hopefully, much of the world has awakened to the reality that most of the people in charge aren’t actually doing what’s best for their respective populations.

  Tyler Durden
  Tue, 03/21/2023 – 18:05

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