Nov 22

Today’s News 22nd November 2021

  • Will The CIA's JFK Assassinated-Related Records Ever Get Released?
    Will The CIA’s JFK Assassinated-Related Records Ever Get Released?

    Authored by Jacob Hornberger via The Future of Freedom Foundation,

    By this time, it should be sinking into everyone’s consciousness that the American people are never going to be permitted to see the rest of the CIA’s 60-year-old secret records relating to the JFK assassination…

    Yes, I know, President Biden says that the new deadline for disclosure is December 22, 2022, which just happens to fall after the November 2022 congressional elections. But that’s just like the mechanical rabbit that is used in dog races — the dogs are never going to catch that rabbit. And the American people are never going to see those records.

    Don’t forget, after all, that this isn’t the first deadline that has been set for disclosure. There was the 25-year deadline that was set back in the 1990s. That deadline came due during the Trump administration. 

    What happened when that deadline came? It got extended of course. Trump surrendered to the CIA’s demands for continued secrecy, just as Biden now has. Every president will do so. The CIA will demand it. National security depends on it!

    Ever since Kennedy was assassinated, there has been a segment of society that has fallen for the official story — that a lone nut communist former U.S. Marine shot and killed the president. This segment has also bought into what has become known as the magic-bullet theory, which holds that a bullet hit Kennedy in the back of the neck, exited his throat, broke ribs and a wrist bone in Governor Connally, lodged in Connally’s thigh, and ended up in virtually pristine, never-been-shot condition. 

    What this segment of society has never been able to explain is why it was therefore necessary to shroud the investigation of the assassination in national-security-state secrecy. In other words, if the assassination really happened because a lone-nut communist former U.S. Marine suddenly, without any motive, decided to kill the president, what in the world would that have to do with “national security,” no matter was definition is put to that nebulous, meaningless term?

    Let’s consider the other alternative, the one set forth in the best book that has ever been written about the assassination: JFK and the Unspeakable: Why He Died and Why It Matters by James W. Douglass. Let’s assume that the assassination was a highly sophisticated regime-change operation to oust a president from office whose policies, it had been determined, posed a grave threat to national security. 

    In other words, consider the principles that led to the U.S. regime-change operations on both sides of the Kennedy assassination: Iraq (1953), Guatemala (1954), Cuba (1959-2021), and Chile (1973), and simply apply them to Kennedy. Ousting the leaders of those countries was necessary, we are told, because such leaders posed a grave threat to national security. Let’s assume that that was the case with Kennedy. (See my article “What If a President Is a Threat to National Security?)

    Such being the case, wouldn’t the malefactors want to hide any semblance of incriminating evidence? That just makes sense.

    Now, I’m not suggesting that anyone would ever find a written confession within those still-secret CIA records. Including such a confession would have been stupid, and the people within the CIA in 1963 were not only not stupid, they were actually very brilliant people. Many of them were Ivy League graduates who were putting their brilliant minds toward the study of assassination and cover-up.

    Moreover, from the very beginning of the CIA, when it adopted the power of assassination, there was a strict rule against ever putting anything about an assassination into writing. That rule would especially apply to the assassination of a president or prime minister.

    But there are so many moving parts to an assassination and its cover up that it becomes imperative to keep all records secret so that sharp-minded researchers and investigative reporters are unable to put individual pieces of the puzzle together. 

    That’s why national-security state secrecy on what was purported to be a lone-nut assassination was imperative from the very moment of the JFK assassination.  

    The Kennedy assassination took place in November 1963. In 1991 — almost 30 years later — Oliver Stone came out with his movie JFK, which, not surprisingly, created all sorts of controversy. The movie rejected the official lone-nut/magic-bullet theories of the assassination and instead posited that the assassination was a highly sophisticated regime-change operation on the part of the U.S. national-security establishment.

    What shocked — and actually outraged — a large segment of the American people was Stone’s disclosure that the national-security establishment was still keeping its assassination-related records secret. 

    Why would they do that? It had been 30 years — 3 decades! — since the assassination.  That’s a long time for secrecy in what is purported to be a lone-nut assassination. 

    So, a large number of Americans were naturally suspicious. They demanded that Congress mandate a release of those records. It was one of those rare instances where the public is able to force Congress to do something that Congress doesn’t want to do. 

    The fact that the national-security establishment fiercely opposed disclosing their assassination-related records to the public makes it even more remarkable that the JFK Records Act of 1992 was enacted. 

    Why did President George H.W. Bush, who had served as CIA director, sign the bill into law? Because Bill Clinton, against whom he was running for president, came out publicly in favor of the law. Bush was trapped, politically. He decided he’d better sign the bill into law to avoid letting Clinton turn it into a campaign issue.

    Thousands of records were released, some over the fierce objections of the Pentagon and the CIA. No, there were no confessions. But there was a mountain of evidence establishing that the national-security establishment had conducted a fraudulent autopsy on the president’s body on the very evening of the assassination. See my two books The Kennedy Autopsy and The Kennedy Autopsy 2. 

    There were three unusual aspects of the JFK Records Act. 

    One was that the Assassination Records Review Board, which was called into existence to enforce the law, was absolutely prohibited from investigating any aspect of the Kennedy assassination.

    Thus, when the ARRB uncovered the evidence establishing the fraudulent autopsy, it was not permitted to conduct an extensive investigation into what it had uncovered. 

    The other unusual provision was that the CIA and other federal agencies had the prerogative of keeping some of their records secret for another 25 years, on grounds of “national security.” 

    Now, I ask you: If you have committed a criminal act and you know that the ARRB has already uncovered what you did to commit a fraudulent autopsy, what evidence are you going to keep secret for another 25 years? Aren’t you going to keep the most incriminating evidence secret for as long as you can, hopefully forever? Isn’t that just logical?

    No, not a confession, but other pieces to the assassination puzzle that fill in more portions of the regime-change mosaic, such as Lee Harvey Oswald’s purported trip to Mexico City just before the assassination, which is still shrouded in mystery and cover-up almost 60 years later.

    Another unusual aspect of the JFK Records Act was that it failed to automatically call the ARRB back into existence when that 25-year deadline came due. That’s what has enabled the national-security establishment, especially the CIA, to secure forever extensions for secrecy.

    What are the chances the balance of the records will ever be released to the American people. Nil. That’s because there is virtually no chance that Congress will call the ARRB back into existence to enforce the JFK Records Act. And even if it did, it is a virtual certainty that the CIA would require any president to veto it. 

    Only a large public outcry against continued secrecy, similar to what happened after Oliver Stone’s movie, could change that. Unfortunately, there is little indication that that is going to happen. 

    One thing is clear though — the CIA’s need for continued secrecy of its assassination-related records on the ridiculous ground of “national security” is about as close to an implicit admission of guilt as one can get. After all, there is no Fifth Amendment right to remain silent for the CIA and the rest of the national-security establishment. 

    Tyler Durden
    Sun, 11/21/2021 – 23:30

  • Space Force General: US "Not As Advanced" As China Or Russia With Hypersonic Missiles
    Space Force General: US “Not As Advanced” As China Or Russia With Hypersonic Missiles

    A top ranking general within the recently established US Space Force has voiced dire public concern that America’s hypersonic missile capabilities are significantly behind those of Russia and China, coming days after Russia successfully test-fired another Tsirkon Hypersonic missile from a warship in the Arctic, and months after China caught US intelligence off guard by its own impressive hypersonic test.

    General David Thompson, the Space Force’s Vice Chief of Space Operations, which is number two post over the command, said in a Saturday interview that the US is simply “not as advanced” in this are compared to China or Russia. He described this lagging behind in this crucial cutting-edge weaponry as implicitly presenting a threat to national security. 

    Gen. David Thompson, source: Air Force Mag

    “We have catching up to do very quickly, the Chinese have an incredible hypersonic program,” he said. “It’s a very concerning development … it greatly complicates the strategic warning problem.”

    As The Hill writes of his words, they are consistent with a recently Congressional Research Service report which highlighted the two US rivals’ ability to launch hypersonics that are nuclear-capable:

    The U.S. failed its own hypersonic missile tests in October, according to CNN.

    According to a memo the Congressional Research Service (CRS) provided for U.S. Congress on Oct. 19, the U.S. is lagging behind China and Russia because “most U.S. hypersonic weapons, in contrast to those in Russia and China, are not being designed for use with a nuclear warhead.”

    That report concluded that “As a result, U.S. hypersonic weapons will likely require greater accuracy and will be more technically challenging to develop than nuclear-armed Chinese and Russian systems,” the CRS wrote.

    And further, the US general included the following explanation about the new type of game-changing threat that hypersonics in the hands of enemies poses:

    During his interview, Thompson said hypersonic missiles are “changing the game” for national defense and security, comparing their use to a snowball fight. Typically, you can predict where a snowball is when it’s thrown. Yet, if the projectile is thrown in another direction, it’s harder to detect — but it’s still going to hit you.

    “That’s what a hyperglide vehicle does,” he said, referring to another type of hypersonic missile. “You no longer have that predictability. So every launch of a certain type, regardless of where it’s headed, now has the potential to be a threat.”

    Gen. Thompson’s remarks were given Saturday, just two days prior Russia’s Ministry of Defense publicly released video hailing another successful hypersonic missile launch in the country’s far north. 

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    “Russia has fired its Tsirkon hypersonic cruise missile from a warship in the north of the country, the military said Thursday,” according to The Moscow Times. “The Admiral Gorshkov frigate has test-launched the Tsirkon several times in recent years.”

    Russia’s Vladimir Putin has frequently described the Zircon missile as “invincible” as its touted as reaching Mach 9, making it virtually impossible for conventional anti-air missile systems to shoot down. 

    Tyler Durden
    Sun, 11/21/2021 – 23:00

  • Lawmakers Question Biden's 'Dangerous' & 'Unconstitutional' Ongoing Occupation Of Syria
    Lawmakers Question Biden’s ‘Dangerous’ & ‘Unconstitutional’ Ongoing Occupation Of Syria

    Authored by Dave DeCamp via AntiWar.com,

    On Thursday, a bipartisan group of 30 House representatives penned a letter to President Biden questioning US airstrikes and the US military presence in Syria.

    In February and June of this year, the US bombed Shia militia targets in Syria and cited Article II of the Constitution as justification for the strikes. In the letter led by Reps Jamaal Bowman (D-NY), Peter DeFazio, and Nancy Mace (R-SC), the lawmakers call the idea that the Constitution justifies such strikes a “dangerous claim.”

    Image: Associated Press

    “We are deeply troubled by your administration’s dangerous claim that Article II of the Constitution permits you to bypass Congressional authorization to perform strikes inside Syria,” the letter reads.

    There is wide support in Congress to reign in the president’s war powers by repealing authorizations for the use of military force (AUMFs) that were passed in 1991 and 2002 to wage wars against Iraq.

    Some lawmakers also favor repealing and replacing the 2001 AUMF that is used to justify the wars against groups like ISIS and al-Shabaab, even though they didn’t exist when the AUMF was passed. But the fact that the Biden administration used the Constitution as justification for airstrikes sets a dangerous precedent and suggests that no matter what AUMF is repealed, the Executive Branch will still have unilateral power to bomb other countries.

    The letter also questioned the US occupation of eastern Syria. There are currently about 900 US troops stationed in Syria under the 2001 AUMF. But since ISIS no longer has a significant foothold in Syria, the lawmakers are questioning this authorization.

    “Virtually all observers, including your administration, acknowledge that ISIS no longer holds territory in Syria. This casts serious doubt on the applicability of the 2001 Authorization for Use of Military Force (AUMF), which some claim authorizes the entire US military presence in Syria,” the letter reads.

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    The letter represents a small but growing opposition in Congress to the US war in Syria. Rep. Bowman introduced an amendment to the 2021 National Defense Authorization Act (NDAA) that would have required the Biden administration to get authorization to stay in Syria from Congress or leave the country.

    The amendment was shot down in a vote of 118 to 286, but the majority of House Democrats voted in favor of the measure.

    Tyler Durden
    Sun, 11/21/2021 – 22:30

  • "Cancerous To The West": Kyle Bass On The Risks Of China's Digital Currency Rollout
    “Cancerous To The West”: Kyle Bass On The Risks Of China’s Digital Currency Rollout

    EpochTV’s Tiffany Meier sat down with Kyle Bass, founder and principal of Hayman Capital Management, and John Mac Ghlionn, journalist and researcher. They touch on President Joe Biden and Chinese leader Xi Jinping’s summit, the U.S.–China Economic and Security Review Commission, and what it means going forward.

    When asked about actionable steps following the commission review, Bass said, “If we actually did one thing as a government, my preference would be to start harmonizing the lists between the Commerce Department’s Bureau of Industry and Security, the Treasury Department’s OFAC list, and the Pentagon’s DOD procurement list…”

    “Here’s a great example. Today there are 257 companies on the BIS Entity List at Commerce. There are only seven entities on Treasury’s list that overlap. So there are 250 entities that are still ‘investable’ by U.S. individuals and institutions that the Commerce Department has flagged as a risk to U.S. national security.

    That makes no sense. And so if we start harmonizing the work that we’ve done in the various presidential Cabinet departments, I think we could go a long way to at least, if we don’t ban all investment in China, but we ban the companies that are state-owned and military-run or a risk to U.S. national security, that would be a quantum leap from where we are today.”

    He also had a warning about China’s digital currency ambitions, saying:

    “I believe that the adoption of their central bank digital currency is cancerous to the West.

    It’s the adoption of the Chinese tech stack. It has a mind of its own.

    Their human data project is interfaced with their rollout of CBDC and they’ll be able to effectuate bribes to individuals outside of the purview of banking regulators or sovereign regulatory oversight. And so it’ll be a brave new world for a Chinese Communist Party who’s known to bribe, steal, coerce, to do everything they do as they move through the world.

    This gives them the ability to reach people directly, which is a real problem. So I don’t believe we can allow a little bit of it. I believe it to be cancerous.

    You can’t have a little bit of cancer. You either have cancer, or you don’t. And so we all need to be talking about the rollout of the CBDC and why it’s so vitally important to understand this in the context of China’s grand strategy.”

    And as for the virtual summit between Biden and Xi, Mac Ghlionn said, “The reason why no progress has been made is because Taiwan is the main talking point…”

    “And essentially, China and the U.S. are speaking two very different languages, politically anyway. And I think that’s why no progress was really made. And I think it was all for show, all for show I don’t think there was any real significance to it.

    “China has to look like that it’s coming to the table. We saw it at the Glasgow, at the recent climate summit…”

    “Well, the CCP didn’t even come to the table. Xi didn’t even come to Beijing, but you know, he sent a sent a strongly worded statement, if you would, about committing to a climate goal.

    And I think it’s a little bit similar with the meeting with Biden.

    China needs to look like that it’s playing ball. Biden needs to look … he has to look somewhat competent, especially after falling asleep in Glasgow. He had to redeem himself. So this is what I mean by it all for show. I think Joe Biden knows and the Biden administration knows, especially when it comes to Taiwan, that you can meet for three hours, 33 hours, 33 days, 33 weeks, it doesn’t really matter, because China’s obsessed with the reunification issue, and it’s not going to budge. And this is why I think it’s for show. Xi knew coming in where he stood, Biden knew and knows where Xi stands. But they have to meet because they’re two superpowers. And I suppose it’s like a geopolitical game of chess, you know, they need to sit down and figure each other out.”

    Watch the full episode on EpochTV.

    Subscribe to EpochTV’s YouTube channel for more first-hand news from China.

    Tyler Durden
    Sun, 11/21/2021 – 22:00

  • University Of California To Permanently Remove Standardized Testing For Admission
    University Of California To Permanently Remove Standardized Testing For Admission

    Authored by Alice Sun via The Epoch Times,

    The University of California (UC) Board of Regents announced Nov. 18 to eliminate standardized tests from the admission process, without any alternative exam to be adopted in the foreseeable future.

    The board originally approved in May 2020 the removal of standardized testing—for applications for admission to the nine UC colleges—and planned to put an alternative test in place of ACT and SAT by 2024.

    During the board’s meeting on Thursday, the regents reached a consensus to keep exams out of admission requirements for a longer time, in favor of practices promoting educational equity and quality.

    “UC will continue to practice test-free admissions now and into the future,” Michael Brown, UC provost and executive vice president for academic affairs, said in a statement.

    Also, to help students build a successful college path, the UC will strengthen its relationship with K-12 schools, Brown said.

    Cecilia Estolano, chair of the board, said the regents are not feeling comfortable using any assessment in the admission process. She added that the decision to removed standardized test is “significant” because it has set a standard that made a difference nationally.

    Bob Schaeffer, executive director of FairTest: The National Center for Fair & Open Testing, told the Los Angeles Times that the UC is becoming “a national model for test-free admissions.”

    He said many more schools are going test-free in their admission in the past two years.

    Alvin Lyu, a fourth-year chemical biology student at the University of California—Berkeley, told The Epoch Times the board’s decision is “a fair move” as students have many more challenges due to the pandemic.

    He added that it is best to have the ACT and SAT scores optional so that high school students with lower grade point averages can use it as a booster in the admission process.

    Helen Tan, an international student studying statistics at the University of California—Los Angeles, said removing the SAT and ACT can affect the number of applicants.

    “If [the UC schools] don’t require [standardized tests], [they] will definitely attract more students who really like the UCs. But there will be more people taking AP and honor classes to make them a more competitive candidate,” Tan told The Epoch Times.

    Bardia Kaseb, a first-year transfer student from Santa Monica College, now studying history at the University California—Irvine (UCI), said the admission process is fairer to the incoming freshmen without considering testing scores. He did not need to submit an SAT or ACT score when he transferred to UCI.

    “It’s a good thing. It makes it equal between freshmen and transfer students,” Kaseb told The Epoch Times.

    Hannah Duong, a freshman studying business administration at UCI, said standardized testing is a necessary way of measuring everyone.

    However, she said the SAT and ACT are not representative of students intellect, but only of “what they know.”

    “There might be really smart people but they go to schools that aren’t very good.” Duong told The Epoch Times.

    “There should be a different way to measure that kind of thing.”

    Benjia Zhang, a first-year electrical engineer student at the University of California—San Diego, said the UC should keep the SAT and ACT standardized tests.

    “Even [though] it is not a hundred percent fair to all students, it is the closest thing we can get,” Zhang told The Epoch Times.

    Tyler Durden
    Sun, 11/21/2021 – 21:30

  • Multiple Fatalities, 23 Hospitalized After SUV Plows Into Waukesha Parade; Person In Custody
    Multiple Fatalities, 23 Hospitalized After SUV Plows Into Waukesha Parade; Person In Custody

    Update (2015ET): A person of interest has been taken into custody following today’s horrific attack at the Waukesha Christmas parade according to VOA News‘ Steve Herman.

    In addition to several fatalities, eleven adults and twelve ‘pediatric patients’ have been transported to local hospitals according to the fire chief.

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    Update (1940ET): Footage of the moment the SUV began plowing into parade participants has emerged.

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    A reported mass casualty event has been reported at the Waukesha, WI Christmas parade, after a red SUV allegedly broke through the police line, plowed through pedestrians, and began firing round out of the window. It is unclear at this time how many people have been injured or killed, however at least four people have been reported as having been hit and ‘not moving.’

    The driver has not been identified as of this writing.

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    According to WISN‘s Courtney Sisk, the SUV hit the “dancing grannies” before speeding off, leaving “at least four members” on the ground and were not moving. One of the group’s members reportedly flew ‘over the hood’ of the SUV.

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    “At the Waukesha Holiday parade and a car just broke through the police line, plowing through pedestrians and firing rounds out the window. Family and I are safe. Happened 20 feet in front of us,” wrote Twitter user Zach Heisler (@zrheisler).

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    Tyler Durden
    Sun, 11/21/2021 – 21:16

  • JPMorgan Warns S&P Fair Value Is 2,500 If Inflation Shocks Do Not Fade Away
    JPMorgan Warns S&P Fair Value Is 2,500 If Inflation Shocks Do Not Fade Away

    Last week, when discussing the latest Bank of America Fund Manager Survey, we pointed out that yet another paradox had emerged: on one hand, Wall Street professionals were the most overweight stocks since 2013, while on the other virtually nobody was expecting a stronger global economy in the future, an unprecedented divergence between these two data sets the likes of which has never once been seen in survey history.

    How does one make sense of this historic gap? Well, one doesn’t – this is just Wall Street goalseeking any and all scenarios to make it seems that being all in risk is the only possible trade, and the only way this particular goalseek does not blow up is if the finance bros also “believe” that inflation is transitory (something not even the Fed is doing anymore), as a persistent inflation would lead to a painful repricing of all asset classes sharply lower. That’s why despite sharply higher than expected October inflation data, a majority of FMS investors acknowledge that inflation is a risk but only 35% think it is permanent while 61% think it is transitory…

    …while a net 14% of investors now expect global inflation will be lower, the lowest level since the onslaught of COVID-19 in Mar’20. In other words, 51% of investors expect lower inflation while 37% expect higher inflation.

    Setting aside how laughable Wall Street’s delusion with “transitory” inflation has become when it is by now painfully obvious that prices will not revert to previous levels and at best will see the pace of galloping increase moderate somewhat, although in light of persistent wage growth one can just as easily argue that inflation will keep surging for years, the bigger question is what happens when the day of reckoning comes and Wall Street’s conviction of transitory inflation comes crashing down – say we get another 2-3 outlier CPI prints; forcing Wall Street to stop ignoring the imminent threat posed by surging inflation.

    Trying to answer this question is JPMorgan quant Nick Panigirtzoglou, who in his latest Flows and Liquidity note titled “What if the rise in inflation volatility persists?” note (available to pro subs in the usual place) looks at what would happen to stocks if inflation volatility surges.

    The reason why is because as the Greek strategist explains, in his longer-term fair value framework for 10y real yields and the S&P 500, “inflation volatility is an important input as a proxy for term premia in the former and for risk premia in the latter.”  And with upside inflation shocks in the US and UK in the last week, JPMorgan notes that “the question of the persistence of inflation has again featured heavily in our discussions with clients” while the steep rise in inflation readings “has also raised questions over inflation volatility.”

    In other words, what does a rise in inflation vol imply for real rates and equities? To answer this question JPM updates its long-term fair value model for 10y UST yields and the S&P 500.

    First, some background: Turning first to the former, the JPM model values the 10y real yield as a function of the real Fed funds rate, inflation volatility as a proxy for term premia, and three major components of net demand for dollar capital: from government, corporate and emerging market issuers. The bank measures these as the government deficit, the corporate financing gap (the difference between capex and corporate cash flow), and the EM current account balance, all as a % of US GDP.

    In theory, higher deficits by governments and corporates (ought to) exert upward pressure on yields as overall demand for capital rises, while external surpluses of EM countries ought to push US yields lower due to repayments of dollar-denominated debt and/or dollar asset accumulation by their central banks.

    In the JPM model, inflation volatility has a significant influence given a coefficient of 0.75. In other words, a 100bp increase in inflation volatility would put 75bp of upward pressure on 10y real yields. The next chart shows the 5y moving average of US CPI volatility over time, which shows that inflation volatility has already risen markedly, from around 0.6% in 1Q21 to 1.6% after the October CPI release. According to JPM, this metric looks likely to rise further, potentially to around 2.2% during 1H22 based on the bank’s economists’ inflation forecasts before starting to drift lower.

    Based on JPM calculations, the increase in inflation volatility that has already taken place would push up 10y real rates by 75bp. And if inflation vol drifts further to 2.2% it could put an additional 40bp of upward pressure on real rates. In this risk scenario where inflation vol proves persistent and is fully incorporated into term premia in rate markets, it would suggest a fair value for the 10y UST real yield of +40bp.

    As a quick aside, JPM here asks why do real yields remain so low, which as a reminder is the market’s $64 trillion question as we discussed in “The Most Important Question For The Market Is Identifying The Driver Behind Record Low Negative Real Rates”? JPMorgan’s response is that this is partly because markets price in negative real policy rates even a decade out. This is shown in the next chart which depicts 1m forward USD OIS rates starting in mid-December of each year and the 5-10y ahead inflation forecast from Consensus expectations.

    This pricing also stands in contrast with JPM economists’ own revised Fed forecast of a start of the hiking cycle in September 2022 and quarterly 25bp hikes thereafter at least until real policy rates reach zero (2022 US economic outlook, Feroli et al, Nov 17th). This would
    suggest policy rates reaching 2% by mid-2024 and potentially 2.5% by end-2024.

    Meanwhile, the broader bond market has – similar to the BofA Fund Manager Survey respondents –  looked through the rise in inflation volatility thus far, “treating it as a transitory shock.” However, as Panigirtzoglou warns, “if inflation volatility remains elevated, say fluctuating around 1.5-2% for a prolonged period, this could start to put more meaningful upward pressure on term premia.” This could further be compounded by the Fed’s taper, given that one of the channels that QE operates through is via suppressing term premia.

    Bonds aside, what about the implications of a rise in inflation vol for equities, the one asset class which seems impervious to absolutely all negative newsflow and is only dependent on how much liquidity central banks will inject at any one moment?

    Well, as the JPM strategist notes, he had argued previously that equity markets have effectively looked through not only the surge in inflation vol but also the the rise in real GDP volatility, given the significant policy support from fiscal and monetary authorities. Effectively,
    following policy measures to smooth the impact of the pandemic on incomes and avoid a situation where disorderly markets, particularly credit markets, amplify the shock, equity markets focused more on the eventual recovery in earnings than on the near term vol shock. Indeed, after the Q2 2020 real GDP contraction in excess of 30% and the Q3 2020 expansion of a similar magnitude, the volatility of GDP readings has been markedly more modest – this is shown in Figure 6 with the red line, which excludes 2Q20 and 3Q20 from the exponentially weighted real GDP volatility calculation. In other words, the run rate of real GDP volatility, while still above pre-pandemic levels, has already shown signs of normalizing.

    So how have equity markets processed the other vol shock, that of inflation? The next chart shows how JPM’s fair value model would look like with three different scenarios applying after 1Q20.

    • The first, shown in as the grey dotted line, mechanically applies the headline increase in both real GDP and inflation vol.
    • The second scenario looks through the shock in real GDP vol but incorporates the headline increase in inflation vol, shown as the black dotted line.
    • The third and final scenario (red dotted line) assumes markets look through both the real GDP vol shock as well as the rise in inflation vol.

    Since the blue line – which is the actual S&P500-  has been tracking the red dotted line, it suggests that equity markets have looked through both volatility shocks, effectively assuming both will prove to be temporary.

    As noted above, the run-rate of real GDP vol excluding the 2Q20 and 3Q20 swings around the trough of the pandemic-induced recession has already shown signs of normalizing, which suggests that markets looking through the real GDP vol shock has been a reasonable approach.

    And while it is clear that consensus is, as in the case of the FMS, that any kind of economic shock will be transitory, is it equally reasonable for both equity and bond markets to look through the inflation volatility shock? 

    According to JPM, this ultimately depends on the nature of the current inflation shock. As the bank recent argued in last week’s J.P. Morgan View last week, a big reason behind the inflation vol has come from energy prices and re-opening components, such as used and rental cars, vehicle insurance, lodging, airfares and food away from home, undoubtedly more affected by the Delta variant waves, and the fading of these drags has generated a rebound in services activity that is sparking a normalization in prices (at least until the current spike in cases leads to another round of lockdowns as we have already seen in Austria).

    According to Panigirtzoglou, who like his quant colleague Marko Kolanovic has traditionally been extremely bullish on stocks and bearish on cryptos – because any agent of the establishment system can not possibly support both fiat-driven and digital gold-based assets –  these volatile components “should ultimately stabilize and the accompanying volatility they have induced should fade.” Of course, this is almost completely wrong, just as wrong as Goldman’s monthly inflation forecasts for all of 2021, and JPM does in fact admit that it could be wrong conceding that “there has been some upward pressure on inflation readings beyond these components, pointing to some persistence in inflation risks.” Then again, in keeping with the bank’s bullish mandate, Panigirtzoglou concldues that “provided these persistent pressures do not also become more volatile, or provided market participants have confidence that central banks will respond to contain these pressures, markets can still look through inflation volatility.”

    However, in a surprising reversal from the bank’s uniform and stbborn bullishness, the JPM quant acknowledges there is risk that inflation volatility could stay elevated for a longer period, which could eventually feed through to markets pricing in higher term premia and risk premia that would put upward pressure on real yields and downward pressure on equities.

    The outcome for stocks? An S&P500 which collapses to its “fair value” of 2,500 as all those inflation and GDP shocks that the market has so eagerly ignored so far, turn out to be persistent, and crush risk assets.

    However, before anyone goes and accuses JPMorgan of being bearish, Panigirtzoglou emphasizes “that this is a risk scenario, not a  baseline view.” Translation: “this is what will happen, we just don’t want to tell our bullish clients just yet.”

    Tyler Durden
    Sun, 11/21/2021 – 21:00

  • Democrats' Tax Cuts For The Wealthy In NY, NJ Spotlights Build Back Better Hypocrisy
    Democrats’ Tax Cuts For The Wealthy In NY, NJ Spotlights Build Back Better Hypocrisy

    Authored by Mike Shedlock via MishTalk.com,

    State and Local Tax (SALT) deductions have made hypocrites out of the entire group of House Democrats.

    Tax Plan Inflames Democratic Debate

    House Democrats are in a fresh revolt over SALT. 

    It’s a fine (hypocritic) time for it given they all voted for the Build Back Better build. 

    BBB is now in the hands of the Senate where an Inflamed Discussion is taking place. 

    House passage of Democrats’ $2 trillion education, healthcare and climate package has inflamed an intraparty debate about whether the bill gives overly-generous tax benefits to high-income Americans.

    At the center of the dispute is the House plan to raise the $10,000 cap on the deduction for state and local taxes to $80,000 through 2030. A small but committed group of lawmakers from high-tax states like New York and New Jersey have for years insisted on repealing the $10,000 cap, which Republicans put into place as part of the 2017 tax law.

    “I think it’s bad politics, it’s bad policy,” Sen. Bernie Sanders (I., Vt.) said to reporters. “The Democrats correctly have campaigned on the understanding that amidst massive income and wealth inequality, we’ve got to demand that the wealthy start paying their fair share of taxes, not give them more tax breaks.”

    Setting the tax-deduction cap at $80,000 without an income limit means that its benefit goes to even the highest-income households, who all would save $25,900 more in taxes than they do under current law. Nearly one-third of the benefit of that $80,000 cap would go to the top 1% of households, according to the Tax Policy Center.

    The inclusion of the higher state and local tax deduction, or SALT, cap means the bill overall would provide a net tax cut to many wealthy households. According to the congressional Joint Committee on Taxation, more than two-thirds of households with income over $1 million would get a tax cut in 2022.

    One Non-Hypocrite

    The only Democrat non-hypocrite in the House (on this issue) is Rep. Jared Golden of Maine.

    Golden voted against BBB, criticizing its “tax giveaways to millionaires.”

    Lie of the Day

    In the lie of the day, Pelosi presented this feeble excuse “This isn’t about who gets a tax cut, it’s about which states get the revenue that they need in order to meet the needs of the people, and that is a fight that I will continue to make.”

    Pelosi was a late supporter of the break for millionaires when she discovered she needed votes of Democrats in NY and NJ to pass BBB. 

    Senator Michael Bennett Chimes In

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

    Senator Bennett is a Democrat from Colorado. 

    Question of the Day

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

    Ok Bernie where do you stand? 

    There is no way he will vote against BBB but he will likely lower the deduction to a number that gives something like 50% of the benefit to the wealthy instead of 70%.

    Meanwhile, the House Progressive Caucus Group of about 100 hypocrites silently hopes the Senate does their dirty work for them (raise taxes on the wealthy in NY and NJ).

    No matter what amendments pass the Senate, it is nearly certain the House will approve them. 

    Four Changes to Expect

    • Reduction but not elimination of SALT change.

    • Immigration reform goes out the Window. It’s a nonbudget item and against Reconciliation rules.

    • Manchin will remove the provision that Electric Vehicle credits go to unions only (assuming the Senate parliamentarian does not remove that provision first as a non-budget item).

    • Manchin wants any extension of the Child Tax Credit (CTC) to include a “firm” work requirement and be limited to parents with “family income” of about $60,000 or less. 

    There will be other changes too, but I have no idea what they will be. Something always comes up.  

    Manchin could easily kill the whole thing. Sensible people hope he does. 

    Instead, expect some tinkering around the edges. That tinkering is likely to reduce the CBO cost estimate to a fully paid $1.5 trillion package. 

    But at least credit Manchin that we do not see an immediate $4 trillion monstrosity. It will now only be an immediate $1.5 trillion monstrosity.

    Who Has the Courage?

    The lower monstrosity only sticks if Republicans get control of at least one branch of government and they then really do let the temporary entitlement programs expire.

    In practice, entitlement programs have never before been cut. Perhaps it’s different this time. 

    For related discussion, please consider Profiles in Non-Courage

    *  *  *

    Like these reports? If so, please Subscribe to MishTalk Email Alerts.

    Tyler Durden
    Sun, 11/21/2021 – 20:30

  • Hundai? Lambogini? These Are The World's Most Commonly Misspelled Brands
    Hundai? Lambogini? These Are The World’s Most Commonly Misspelled Brands

    We’ve all been there: you’re trying to search for something on Google and suddenly you’re not so sure how to spell whatever you’re looking for.

    “There’s no h in Lamborgini, is there? And if so: where does it fit?”

    Turns out there is an h in Lamborghini and, as Statista’s Felix Richter notes, while search engines are thankfully smart enough to ignore minor spelling problems, some brands are so hard to spell correctly that it can become a bit of a nuisance.

    The research department at Money.co.uk had a closer look at the issue, conducting an analysis to find out which are the most misspelled brands in the world.

    Infographic: Hundai? Lambogini? The Most Commonly Misspelled Brands | Statista

    You will find more infographics at Statista

    Turns out car manufacturers have a knack for hard-to-spell names with four of the ten most misspelled brands being car brands, including the entire top three.

    Hyundai, often misspelled as Hiundai or Hundai, is the most misspelled brand in the world, followed by the aforementioned Lamborghini and Ferrari. Did I get all these right? I better google it.

    Tyler Durden
    Sun, 11/21/2021 – 20:00

  • "Those Of Us Who Are Being Honest Truly Don't Know What Happens Next… Nor Does Anyone Else"
    “Those Of Us Who Are Being Honest Truly Don’t Know What Happens Next… Nor Does Anyone Else”

    By Eric Peters, CIO of One River Asset Management

    Swipe

    “The past year has seen many countries promise to achieve net-zero emissions by mid-century. The next must focus on curtailing emissions in the coming decade. The 17bln-20bln tons of greenhouse gases that need to be cut by 2030 correspond to a 45% drop from 2010 levels. Even then, there would be only a 50% chance of limiting global warming to 1.5°C says the Intergovernmental Panel on Climate Change. Yet current nationally determined contributions (NDCS) will result in a rise in emissions, not a drop, by 2030,” reported The Economist.

    It should be rather obvious to everyone at this stage that global governments, in aggregate, have no intention of meeting the emission reduction goals they set for themselves. That is in no way due to a lack of desire. But rather an unwillingness to pay the price required to meet the deadline. For the first time in decades, we are confronting problems that cannot be solved with the swipe of a pen. For as long as anyone can recall, each problem that appeared intractable was solved by kicking the proverbial can down the road and accruing more debt.

    How will national and geopolitics be altered by a problem that cannot be solved solely with a swipe? The global pandemic will be a helpful guide. Although a far smaller problem than climate change, Covid also affected all and defied a strictly monetary solution. Wealthy nations prioritized their interests over others. China deflected blame, intimidating any nation that dared press for answers. The most vulnerable suffered disproportionately. No globally coordinated effort was made to marshal every possible resource to tackle the problem. And to soothe the stresses, unprecedented sums of money were created at the swipe of a pen.

    Don’t Know

    I don’t know why 10-year US gov’t bonds yield 1.55% when CPI is 6.2% and inflation appears increasingly persistent. I have some theories to be sure. But I don’t definitively know. Nor does anyone else. And I don’t know what the Fed will do if inflation stays high, but interest rates remain low. It might be that it does little, or nothing. And if that’s what happens, I don’t know why stocks and housing wouldn’t keep surging. But if that started happening, I’m not sure what would stop everyone from borrowing more and more to leverage up.  

    And I don’t know what the Fed would do if everyone started leveraging up, while inflation remained firm, but interest rates remained low. If they hiked as gradually as markets now price, I’m not sure why that such an incremental rise would dampen speculative demand. If the Fed hiked to curb speculation in the name of promoting financial stability and this caused a sharp stock market decline, even as inflation remained high, I’m not sure the Fed could quickly reverse those hikes without sparking a run on the dollar, which would then lift inflation.

    But what I really don’t know is how markets start to behave when there are so many things that people don’t know. Naturally, there are always many uncertainties when it comes to such things. But the new set of unknowns we face today arise from the reappearance of inflation after many decades of dormancy. And because the economy is vastly different from when we last endured an inflation, while our financial markets are wildly more complex and interconnected, those of us who are being honest truly don’t know. Nor does anyone else. 

    Tyler Durden
    Sun, 11/21/2021 – 19:30

  • NYC Passes Bill To Restrict 'Racist, Sexist' Hiring Software
    NYC Passes Bill To Restrict ‘Racist, Sexist’ Hiring Software

    New York City is on track to become the first city in the nation to ban automated hiring tools unless a yearly bias audit can prove that the software won’t discriminate based on an applicant’s race or gender, and would force makers of said AI tools to open up their black box algos to scrutiny.

    The bill, passed by the city council in early November and would go into effect January 2023 if signed into law, would also give candidates the option of choosing an alternative process (a human) to review their job applications, according to the Associated Press.

    “I believe this technology is incredibly positive but it can produce a lot of harms if there isn’t more transparency,” said Frida Polli, co-founder and CEO of New York startup Pymetrics, which has lobbied for the legislation that favors firms such as hers which publish ‘fairness audits.’

    Advocates point to a 2018 Reuters report that Amazon scrapped a similar AI recruiting tool because it favored men over women.

    Pymetrics, whose core product is a suite of 12 games that are based on cognitive science experiments, paid a third party company to audit their software for bias, and to see if it passed what’s colloquially known as the ‘four-fifths’ rule – an informal hiring standard in the United States according to Technology Review.

    Pymetrics and Wilson decided that the auditors would focus narrowly on one specific question: Are the company’s models fair?

    They based the definition of fairness on what’s colloquially known as the four-fifths rule, which has become an informal hiring standard in the United States. The Equal Employment Opportunity Commission (EEOC) released guidelines in 1978 stating that hiring procedures should select roughly the same proportion of men and women, and of people from different racial groups. Under the four-fifths rule, Kim explains, “if men were passing 100% of the time to the next step in the hiring process, women need to pass at least 80% of the time.”

    If a company’s hiring tools violate the four-fifths rule, the EEOC might take a closer look at its practices. “For an employer, it’s not a bad check,” Kim says. “If employers make sure these tools are not grossly discriminatory, in all likelihood they will not draw the attention of federal regulators.”

    In theory, if Pymetrics’ suite was selecting white men for jobs, the software can correct for bias by comparing game data from those men with the results of women and people from other racial groups in order to eliminate data points which don’t correlate with race or gender, but do distinguish successful employees, according to the report, which notes that Pymetrics’s system satisfies the four-fifths rule.

    More problems

    Despite Pymetrics meeting the four-fifths rule, Technology Review points out that the audit didn’t actually prove that the tool is free of any bias whatsoever, nor that it picks the most qualified candidate for the job.

    For example, the four-fifths rule only requires people from different genders and racial groups to pass to the next round of the hiring process at roughly the same rates. An AI hiring tool could satisfy that requirement and still be wildly inconsistent at predicting how well people from different groups actually succeed in the job once they’re hired. And if a tool predicts success more accurately for men than women, for example, that would mean it isn’t actually identifying the best qualified women, so the women who are hired “may not be as successful on the job,” says Kim.

    Another issue that neither the four-fifths rule nor Pymetrics’s audit addresses is intersectionality. The rule compares men with women and one racial group with another to see if they pass at the same rates, but it doesn’t compare, say, white men with Asian men or Black women. “You could have something that satisfied the four-fifths rule [for] men versus women, Blacks versus whites, but it might disguise a bias against Black women,” Kim says. -Technology Review

    We have a feeling that there’s no AI in the world that will satisfy various identity groups given how many genders, races, and species are now recognized for preferential treatment in the name of nondiscrimination.

    Tyler Durden
    Sun, 11/21/2021 – 19:00

  • Rittenhouse 2.0: Threats Of New Litigation Fly In Aftermath Of Verdict
    Rittenhouse 2.0: Threats Of New Litigation Fly In Aftermath Of Verdict

    Authored by Jonathan Turley,

    In the aftermath of the Rittenhouse verdict, figures on both sides of the case threatened new filings and investigations. It seems likely that the case will move into a new stage of litigation, particularly civil litigation. However, advocates on both sides may be overstating the basis for a Rittenhouse 2.0.  These lawsuits can come with risks and considerable costs. That is why Voltaire once lamented “I was never ruined but twice: once when I lost a lawsuit, and once when I won one.”

    RITTENHOUSE AS A FUTURE DEFENDANT

    Federal Action

    Immediately following the verdict, House Judiciary Committee Chairman Jerry Nadler called for the Justice Department to investigate the “miscarriage of justice.” Others have called for a federal civil rights case against Rittenhouse.

    The Justice Department does not have an office for the prosecution of “miscarriages of justice” due to errant jury decisions. Rittenhouse was acquitted on state charges by a state jury. Moreover, while some have called for reducing self-defense protections, the jury applied the law on the books. It is not allowed to simply ignore the law to seek its own criminal justice rules. The Rittenhouse jury faithfully applied the Wisconsin law and came to a well-founded verdict of acquittal. It is a dangerous precedent to investigate jury decisions simply because you disagree with their decisions.

    There is also no clear basis for a civil rights prosecution. Rittenhouse is white and shot three white men. He was not accused of a hate crime. Moreover, he is not a member of law enforcement or government agency, so he did not deprive anyone of their civil rights under federal law.

    Civil Liability

    Rittenhouse could face lawsuits from the families of the deceased or Gaige Grosskreutz, who survived being shot in the arm. That includes wrongful death actions much like the litigation against O.J. Simpson after he was acquitted for the killings of his ex-wife, Nicole Brown Simpson, and her friend Ronald Goldman.  However, he was then found guilty in a torts lawsuit brought by the Goldman family and ordered to pay $33.5 million. Those damages later rose to $58 million.

    The risk of such torts actions is that they proceed under a lower standard of proof. Rather than shouldering the “beyond a reasonable doubt” standard of the prosecution, the plaintiffs would have to only prove responsibility by a “preponderance of the evidence.”  However, that is no guarantee of conviction. All three men attacked or threatened Rittenhouse before he used his weapon. The common law protects not just self-defense but mistaken self-defense where a person may have erroneously (but reasonably) thought that he was under attack. When attacked, Rittenhouse is authorized under common law to use commensurate force.  While Wisconsin does not have a “Stand Your Ground” law, the common law has always recognized such a right and did not require a person to retreat before using force.

    There is also more leeway in the admission of evidence in civil cases on both sides. That could further complicate any recovery by these plaintiffs. Finally, Wisconsin is a “modified comparative negligence” state. Accordingly, any plaintiff (or his estate) is barred if he is 51 percent or more at fault.

    RITTENHOUSE AS A FUTURE PLAINTIFF

    Defamation

    Rittenhouse does not have a viable claim for wrongful arrest or prosecution given the fatalities in the case and the reasonable disagreement of the need to use lethal force.

    However, many commentators have suggested that he has a strong case for defamation against President Joe Biden and many in the media for calling him a “white supremacist,” “domestic terrorist,” and “murderer.”  There is no question that Rittenhouse has been subject to false and harmful claims in the media. Indeed, many watching the trial were surprised by the sharp disconnect between what they had seen on the case in the media and what was being presented in court.

    Such defamation cases however are notoriously difficult and the odds are against Rittenhouse in prevailing on these characterizations of prejudice or guilt. It is likely that Rittenhouse will be considered a limited public figure or public figure given the notoriety of the case and his public defenses. The Supreme Court has held that public figure status applies when  someone “thrust[s] himself into the vortex of [the] public issue [and] engage[s] the public’s attention in an attempt to influence its outcome.” A limited-purpose public figure status applies if someone voluntarily “draw[s] attention to himself” or allows himself to become part of a controversy “as a fulcrum to create public discussion.” Wolston v. Reader’s Digest Association, 443 U.S. 157, 168 (1979).

    If a court finds such a status, he would be subject to a higher standard of proof under New York Times v. Sullivan. This is precisely the environment in which the opinion was written and he is precisely the type of plaintiff that the opinion was meant to deter. The Supreme Court ruled that tort law could not be used to overcome First Amendment protections for free speech or the free press. The Court sought to create “breathing space” for the media by articulating that standard that now applies to both public officials and public figures.

    Moreover, courts are highly protective of “opinion” statements. People are allowed to reach a different conclusion from the jury in calling Rittenhouse a murderer or to characterize his actions as racist given the subject of the underlying protests. That does not mean that they are right or fair. There is no evidence that Rittenhouse is a white supremacist. However, courts give a wide berth to free speech in such public controversies.

    Many cite the litigation by Nicholas Sandmann, a former high school student who was widely and unfairly accused of abusing a Native American at a pro-life event at the Lincoln Memorial. Reporters latched on to the fact that he was wearing a MAGA hat and called a racist and falsely accused of starting the confrontation.  He sued and settled with some media outfits.  However, courts rejected his claims based on being labeled a racist. Where he prevailed was on statements that he “blocked” the activist at the scene.

    There may be more specific false statements like those in Sandmann’s case but the characterizations of his motivations or beliefs will be the most challenging to litigate.

    Bond claims

    Finally, there is likely to be litigation over who receives the $2 million bond posted in the Kyle Rittenhouse case. Now that he has been acquitted, the bond ordinarily goes to the defendant. However, his previous lawyer, Lin Wood, and his organization Fightback Foundation claim the money.

    In a letter sent to Kenosha County Circuit Court Judge Bruce Schroeder, Kenosha attorney Xavier Solis wrote that the money should be returned to Fightback:

    “These funds were transferred by the Fightback Foundation to the Pierce Bainbridge Law Firm’s trust account and paid by attorney John Pierce on behalf of, and as an agent for, the Fightback Foundation. Accordingly, the $2 million shall be returned to the Fightback Foundation, if and when such funds are released consistent with Wisconsin law and pursuant to court rulings releasing the bail money back to the individual or entity that posted the cash bail.”

    That presents a novel question. The court received the money on behalf of Rittenhouse. The family also claims that his mother raised a fair amount of the bail money. This could come down to a contractual dispute if Rittenhouse expressly agreed that this was a loan to be returned to the foundation. If not, the court could just return the money to Rittenhouse and have the lawyers sue the family for recovery of owed funds.

    What is clear is that the Rittenhouse case (like the Simpson and Sandmann cases) will continue for years. Indeed, Sandmann is still awaiting trial on some of his defamation claims. This is why Thomas Edison once remarked that “a lawsuit is the suicide of time.”

    Tyler Durden
    Sun, 11/21/2021 – 18:15

  • Hunter Biden's Private Equity Firm Facilitated $3.8 Billion Chinese Purchase Of American-Owned Cobalt Mine
    Hunter Biden’s Private Equity Firm Facilitated $3.8 Billion Chinese Purchase Of American-Owned Cobalt Mine

    An investment firm founded by Hunter Biden facilitated a $3.8 billion purchase of an American-owned cobalt mine by a Chinese conglomerate, placing a key resource used in the manufacture of electric car batteries under foreign control, according to the New York Times.

    The mine, formerly owned by Freeport-McMoRan and located in the Democratic Republic of Congo, was purchased in 2016 after Chinese mining outfit China Molybdenum announced a partnership with the Biden-founded Bohai Harvest RST (BHR) – with the Chinese contributing $2.65 billion and BHR contributing $1.14 billion to buy out a minority stakeholder, Lundin Mining of Canada. The money for Bohai’s share came “entirely from Chinese state-backed companies,” according to the report.

    China Molybdenum lined up about $700 million of that total as loans from Chinese state-backed banks, including China Construction Bank. BHR raised the remaining amount from obscure entities with names like Design Time Limited, an offshore company controlled by China Construction’s investment bank, according to the Hong Kong filings.

    Before the deal was done, BHR also signed an agreement that allowed China Molybdenum to buy BHR’s share of the mine, which the company did two years later, the filings show. That purchase gave China Molybdenum 80 percent ownership of the mine. (Congo’s state mining enterprise kept a stake for itself.) -NYT

    In 2019, when Hunter controlled 10% of the firm through Washington-based Skaneateles, LLC, BHR sold its stake. As the Times notes, Chinese corporate records show Skaneateles is still part owner of BHR, however Biden attorney Chris Clark said that Hunter “no longer holds any interest, directly or indirectly, in either BHR or Skaneateles.”

    According to a former BHR board member, Hunter and the other American founders were not involved in the mine deal, and the firm only earned a ‘nominal’ fee on the deal. The proceeds allegedly went towards the firm’s operating expenses, and was not distributed to its owners.

    That said, the Times does raise a good point: “It is unclear how the firm was chosen by China Molybdenum.”

    A dozen executives from companies involved in the deal, including Freeport-McMoRan and Lundin, said in interviews that they were not given a reason for BHR’s participation. Most of the executives also said they were unaware during the deal of Mr. Biden’s connection to the firm.

    Paul Conibear, Lundin’s chief executive at the time, said it was made clear that China Molybdenum was leading the transaction even though the buyer of Lundin’s stake was BHR.

    “I never really understood who they were,” Mr. Conibear said of BHR. -NYT

    So – Hunter Biden’s investment firm shows up to funnel money from Chinese state-owned firms into the cobalt deal, and nobody involved knows why. 

    Tyler Durden
    Sun, 11/21/2021 – 18:00

  • Hedge Fund CIO: The Only Thing That Matters To Biden Now Is Whether To Fire Powell Before Or After The Democrats Lose The Mid-terms
    Hedge Fund CIO: The Only Thing That Matters To Biden Now Is Whether To Fire Powell Before Or After The Democrats Lose The Mid-terms

    By Eric Peters, CIO of One River Asset Management

    “I need to decide,” whispered Biden to himself, struggling, unsure.

    “Lael is just terrific, no doubt, and her Fed wouldn’t dare cut off my funding,” thought the President, old enough to remember bond vigilantes. 

    “But you can’t help but like Jay, a fine gentleman, a decent human being, and face it, he’s still buying over $100bln of bonds a month with CPI humming hotter than 6%,” thought Joe, having lived through the 1970s inflation. Heck, he was born during WWII and grew up during the post-war financial repression.

    “Hard to say we need someone more dovish than Powell,” whispered Biden. But of course, all such considerations were beside the point and Joe knew it deep down.

    The only thing that mattered now, was whether it would be better to fire Powell before or after the Democrats lose mid-terms. Because at this point in the cycle, Jay’s greatest political value is in being a scapegoat.

    Overall:

    “Climate chaos is an urgent threat to our health, communities and economy,” tweeted Senators Merkley and Whitehouse.

    “We need a Fed Chair who recognizes the urgent need for bold climate action. That person is not Jerome Powell,” they added, the scent of mission creep thick in the air.

    In 1977, following a horrendous run, Congress tasked the Federal Reserve with an oxymoron – a dual mandate with three objectives: maximum employment, stable prices, and moderate long-term interest rates. And having been born of original sin, into a world where 1+1=3, the central bank’s mandate quite naturally propagated. Slowly at first. Then faster. Until there appeared almost nothing in economics and politics that resided outside the Federal Reserve’s mandate.

    In 1998 it added to its mission the necessity of bailing out wildly overleveraged hedge funds managed by PhDs with more Nobel prizes than imagination. Blinded by math, they failed to conceive of the possibility that historically stable correlations could break for no reason but for the fact that markets inevitably find a way to inflict the greatest possible pain on those who lack humility. Ever since, in each downturn, the Fed bailed out such characters, always in greater size.

    It takes an active imagination to envision a world where the Fed is unwilling or unable to fulfill this mandate. Which makes this a real risk. But the central bank’s mandate expanded in far wider ways. In pandemics, the Fed funds the government and buys mortgage bonds, even as house prices surge.

    Some Senators now call on the Fed to “recognize the urgent need for bold climate action.” It is neither right nor wrong that the Fed does so, it is simply a mandate choice.

    And the central bank can do anything, everything, just so long as we continue to believe that money is real. Which of course it is not. And inflation is the one thing that can pierce the illusion.

    Tyler Durden
    Sun, 11/21/2021 – 17:30

  • Biological Female Prisoners Sue California After Officials Altered Complaints Over Trans 'Male' Sex-Offenders
    Biological Female Prisoners Sue California After Officials Altered Complaints Over Trans ‘Male’ Sex-Offenders

    A group of biological female inmates incarcerated in California are suing the state’s Department of Corrections (CDCR) for allegedly violating their First Amendment rights by altering their official complaints about transgender sex offenders to remove references to ‘males.’

    According to Just the News, “It’s the most unusual claim in the federal lawsuit filed this week by the Women’s Liberation Front (WoLF) on behalf of inmates Janine Chandler, Krystal Gonzalez, Tomiekia Johnson and Nadia Romero, who allege they are victims of either sexual or domestic violence.”

    The women are challenging California Senate Bill 132, which they claim is unconstitutional because it allows prisoners choose their gender identity for the purposes of placement and bodily searches, and requires no actual sex reassignment surgery or hormone therapy.

    When Romero filed a complaint about being “grabbed by a man in her unit,” and Gonzalez requested single-sex housing after a transgender inmate sexually assaulted her, prison officials described their attackers as transgender women or females.

    Being housed with self-identified transgender prisoners who are anatomically male also constitutes cruel and unusual punishment in violation of the 8th Amendment, and violates their 14th Amendment equal protection rights, the suit claims. -Just the News

    According to the lawsuit, the SB 132 puts biological women at “substantially increased risk of sexual harassment, sexual assault, rape, and physical violence,” not to mention STDs and psychological fear, and functionally “transform[s] the California prison system from being sex-separated … to a system comprised of men’s facilities, and mixed-sex facilities.”

    Read the rest of the report here.

    Tyler Durden
    Sun, 11/21/2021 – 17:00

  • Fauci Says Babies, Toddlers Eligible For COVID Jabs In Q1 2022
    Fauci Says Babies, Toddlers Eligible For COVID Jabs In Q1 2022

    Since the start of the pandemic – edging ever closer to two years now – 428 children aged 4 and under have died ‘with COVID’, according to the Centers for Disease Control and Prevention. Putting that number in context, there are around 73 million children in America.

    Dr. Daniel Rauch, chief of pediatric hospital medicine at Tufts Children’s Hospital in Boston, summed things up rather succinctly:

    “The good news continues to be that this is not a common problem for kids.”

    Source: CDC

    So why oh why is all-knowing and unquestionable ‘science’-soothsayer Dr. Anthony Fauci now openly discussing that, even though he “can’t guarantee it,” babies and toddlers aged 6 months to 5 years could be eligible for COVID-19 vaccination by spring.

    “Hopefully within a reasonably short period of time, likely the beginning of next year in 2022, in the first quarter of 2022, it will be available to them,” Fauci told Insider in an interview, though he cautioned that he was speculating, adding, “you’ve got to do the clinical trial.” 

    According to CNN, Pfizer is the furthest along in trials for those aged 6 months to 5 years, but Moderna is also conducting studies in very young children.

    “We don’t have enough data now to present it for a regulatory approach, but right now, the data are being collected and analyzed,” Fauci said when speaking to CNN earlier this month.

    “So we will be able to answer the question, I believe, within a reasonable period of time regarding the safety and the immunogenicity among those lower than 5 years old.”

    Frankly, we have no words for this idea. It appears Big Pharma is running out of cohorts to jab and make money from? In Utero next? What about pets? Better safe than sorry, right?

    Some context…

    “Think about it in terms of football stadiums,” Dr. Rauch said.

    “In 100,000 kids, one of them is not going to make it with COVID. Everyone else who walked in is going to walk out.”

    As USAToday.com reports, in August and September, shortly after cases began to rise, hospitalizations of children with COVID-19 increased across the U.S. Weekly pediatric admissions reached a peak of more than three kids per 100,000 the week ending Sept. 5 and have since declined in most states along with adult COVID-19 admissions.

    Source: Department of Health & Human Services

    And as far as deaths are concerned, things get even more extreme on the outlier scale.

    Here is the official CDC data for the toddler and baby cohort (total deaths vs COVID-19 deaths)…

    Source: CDC

    In fact, the relative scale of COVID deaths among America’s 0-4 year-olds is so tiny that it doesn’t even show up on a chart…

    Source: CDC

    Given all of the above, what parent will willingly take the risk of vaccinating their baby against a virus that barely registers on the risk of hospitalization scale and is practically non-existent on the risk of death meter? And why is the scientist-uber-alles even suggesting this?

    Tyler Durden
    Sun, 11/21/2021 – 16:00

  • Morgan Stanley: Here's Why We See No Rate Hikes In 2022 And What That Means For Markets
    Morgan Stanley: Here’s Why We See No Rate Hikes In 2022 And What That Means For Markets

    By Vishwanath Tirupattur, global head of Quantitative Research at Morgan Stanley

    This has been our outlook week. We published our year-ahead global economics and strategy outlooks last Sunday, and more detailed asset class and country-specific outlooks have been streaming out during the week. At Morgan Stanley Research, our outlooks are the culmination of weeks of deliberation and spirited debate among economists and strategists across all the regions and asset classes we cover. In our highly inter-related world, where everything effectively affects everything else, I am convinced that such a collaborative exercise is necessary. In last week’s Start, my colleague Andrew Sheets summarized the outcome of the process – our outlook for 2022 across markets and economies. This week, I will focus on the key debates we engaged in during the process.

    Our economists’ view that the Fed will wait until 1Q23 to make its first interest rate hike, despite their projection that US unemployment will fall to 3.6% by end-2022, was hotly debated. Considering that the current market pricing implies about two full hikes next year, we focused on two key questions:

    1. why does the Fed wait, and

    2. when does the market reflect that delay?

    For interest rates and FX markets, this was the crux of the matter, especially in the context of potential changes to the composition of the FOMC. Our economists see two drivers for no hikes in 2022 – falling core PCE inflation and rising labor force participation. The market could see more support for these expectations as soon as March and no later than June next year. Furthermore, they do not see material changes to policy outcomes as a consequence of potential changes in the composition of the FOMC. This is key to our narrative on interest rates and FX: markets first price in a more hawkish Fed outcome (bear-flattening, higher real yields, strong DXY) before shifting to concern that the Fed may be too dovish (bear-steepening, higher breakevens, weaker DXY).

    The forecasts our strategists presented were more cautious than our economists’ expectations of strong growth, moderating inflation, and patient central banks, leading us to debate whether this is a set-up for ‘Goldilocks’. Didn’t our economic forecasts imply the best of all possible worlds and, as such, a better environment for markets? As it turned out, in some instances (Europe and Japan equities, for example), this is what our strategists forecast. But across several other markets – US equities, US and European corporate credit, agency mortgages, to name a few – our strategists saw more challenges, especially early in the year.

    Central banks may ultimately prove dovish, but that may not be immediately apparent, an uncertain dynamic that could push yields and USD higher. US earnings are already elevated relative to the economy and face a potential tax headwind. In credit, current valuations leave little margin for error, and even modest or idiosyncratic stresses can weigh on returns. Agency mortgages have to contend with the two largest buyers, the Fed and banks, slowing their purchases next year, while other investors will need to digest about US$200 billion more mortgages in 2022 than in 2021.

    We also debated whether we should be more constructive on emerging markets. The case seemed reasonable: EM assets underperformed materially in 2021. With better valuations, better growth, and no Fed hike until 2023, shouldn’t we join the chorus calling for improvement? The debate around this point was robust, but we settled on ‘not yet’. We think that the market will be slow to price in our ‘later-than-expected’ Fed lift-off, leading to initial USD strength. The one exception is China high yield credit, where we think that the market is underestimating the resolve and ability of policy-makers to control disruption in the property sector, leading our credit strategists to turn bullish on China high yield.

    Another topic of debate was the divergence between US and European equity markets. In their base cases, our equity strategists forecast a 5% decline in the S&P 500 versus an 8% rise in MSCI Europe. After all, for more than a decade, US stocks have outperformed European equities meaningfully.

    Part of the rationale is idiosyncratic: US equities face a potential tax headwind to earnings and a much larger rise in real rates than other developed market regions. Those factors alone could equate to a double-digit adjustment, before considering valuation differences. Our equity strategists expect to see the best earnings growth next year across different regions in Europe and greater uncertainty about earnings in the US. Furthermore, thanks to lower inflationary pressures, the ECB can afford to be more patient than the Fed. Even though US equity underperformance has been rare since the global financial crisis (GFC), it is worth noting that such occurrences were less uncommon before the GFC.

    Enjoy your Sunday.

    Tyler Durden
    Sun, 11/21/2021 – 15:30

  • "Nobody Likes A Snob": Bill Maher Slams AOC, Other 'Woke' Democrats For Being Out Of Touch With 'Most Of America'
    “Nobody Likes A Snob”: Bill Maher Slams AOC, Other ‘Woke’ Democrats For Being Out Of Touch With ‘Most Of America’

    Self-proclaimed “old school” Democrat Bill Maher has a message for his party: stop being snobs.

    During Friday night’s “Real Time,” the 65-year-old comedian slammed the left over wokeness and cancel culture, and said that Democrats are losing elections because “liberals think this country is full of dumb white people.”

    “Vote Democrat because white people suck,” should be a 2024 Democrat campaign slogan, the HBO host joked, noting that 62% of Americans think the ruling party is “out of touch.”

    “In plain English, nobody likes a snob. … Your micro aggression culture doesn’t play in the Rust Belt,” said Maher. “If a staffer hands you a speech that says ‘menstruating people’ instead of women, don’t say that, say women.”

    The host also took aim at Rep. Alexandria Ocasio-Cortez (D-NY) and technocrats for embracing “woke” culture, according to PJ Media.

    “It’s [wokeness] a joke, because it makes you think of people who wake up offended and take orders from Twitter and their over-sensitivity has grown tiresome,” he said, adding that Democrats shouldn’t alienate white voters without college degrees.

    As PJ Media’s  A.J. Kaufman notes:

    In his surprising gubernatorial triumph in Virginia, Glenn Youngkin received more than 70% of the vote in the commonwealth’s 45 rural counties.

    And it’s not like Youngkin is a populist or a candidate who electrifies voters; the governor-elect basically is Mitt Romney in a fleece vest. But blue-collar white voters increasingly realize Democrats are smug and hostile to them.

    Recall that an old white guy with, rightly or wrongly, a moderate reputation was the only Democrat last year who didn’t shed working-class whites — both in the primaries and general election.

    On Wednesday night, Maher told CNN‘s Chris Cuomo that critical race theory is “just virtue signaling,” and accused liberals of being “afraid to acknowledge progress.”

    “It’s just something going on in the schools that never went on before,” said Maher.

    “I think, I remember what my education was with American history. We learned about the Civil War. I mean, they mentioned racism. We understood slavery and Lincoln … But they didn’t really go into it any more than ‘Gone with the Wind’ goes into it. It was there but you didn’t feel it, this really. Now we’re doing that, and I think that’s a good thing. People should understand that,” said Maher, adding “That’s different than teaching that racism is the essence of America. That’s what people get upset about, or involving children, who are probably not old enough, or sophisticated enough, to understand this very complicated issue, with a very complicated history.”

    Watch:

     

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

    Tyler Durden
    Sun, 11/21/2021 – 15:00

  • We Are In Mass 'Jonestown' Delusion Territory
    We Are In Mass ‘Jonestown’ Delusion Territory

    Submitted by Larry McDonalds, author of The Bear Traps Report

    In April, Goldman Sachs was looking for tame CPI inflation by December 2021. That’s right, the best and brightest told us core would be 2.20% and headline data of 2.77% was coming. Today, they brought out the eraser with a forecast of 5.19% and 6.31%.

    Over the last 30 years looking at markets, there are periods when things happen so fast millions are left in a previous mindset, not fully comprehending the world has changed in a secular fashion, NOT cyclically.

    “There are decades where nothing happens, and there are weeks where decades happen” Vladimir Ilyich Lenin reminds us. Years and years of inflation without a pulse has changed human behavior in such a profound way, a true complacency overdose took over.

    Over the last 18 months, from Beijing to Tokyo, to Berlin to Washington no amount of fiscal spending has been unacceptable. Debt monetization via central banks, MMT (modern monetary theory) has moved from “taboo” to “bring it on” territory.

    Looking forward, every hour, minute and second of each day more and more market participants are waking up to the new reality of sustained inflation. On the Sunday talk shows, U.S. Treasury Secretary Janet Yellen threw the inflation blame on the pandemic and is essentially making the point that rate hikes are NOT needed once the pandemic is over inflation will disappear is the argument.

    This is HIGHLY BULLISH gold and silver miners. In our view, Yellen is using public forums to lay out the future Fed policy path. There is NO QUESTION Yellen has President Biden’s ear and if Fed Chair Powell wants the job, he must fall in line.

    Interest costs to taxpayers have nearly doubled ($562B) since 2000 with interest rates/bond yields falling from near 7.0 % to 1.5%. How much pressure is on the Fed to further monetize debt 2022-2030??

    Extreme measures. CPI is normalizing at a much higher trajectory, that’s all that matters for consumers.

    We are in mass “Jonestown” delusion territory. Over $100T of the planet’s wealth is positioned in bonds sub 2% in yield with inflation normalizing this cycle at 3-4% vs 1-2% post Lehman.

    It’s mind boggling that people are focused on YoY inflation coming down, of course, it will, that’s irrelevant . All that matters is when does inflation come back to the 2010-2020 norm? If that is 5 years from now, trillions of dollars of assets are in the wrong place.

    Corporations are making more money than ever while inflation is at multi decade highs which in turn is causing a sharp decline in real wages. Hard to imagine a better recipe for coast to coast labor strikes.

    The Fourth Turning will be characterized by open conflict between the management class and labor. Unions will grow their ranks. The strike at Deere has farmers scrambling for used tractors and tractor parts.

    Prices increased by 9.5% in the 3rd quarter, as per The Machinery Pete Used Values Index, the keepers of which predict higher increases 4th quarter. As a result the planting season will be more expensive. Those increased costs will be passed on to the consumer. This will cause the price of food to be higher.

    There is no greater exercise of the power of labor than a work strike. And we see here how it causes inflation. Worse than 2008-2009, UMich Buying Conditions for large Household Durables , “furniture, a refrigerator, stove, television, and things like that “ printed at 78 last week vs. 112 last year and as low as 98 during the 2008 financial crisis. U.S. demand destruction from inflation is near unprecedented levels.

    Bullish gold and silver yields on 10 year inflation indexed Treasuries are at their most negative in twenty+ years as investors expect the economy to continue shrinking in real terms. The last time the Fed hiked rates 2015-2018, these yields ranged from a positive +0.05% to +1.2% vs today at -1.2%.

    S&P 500 earnings growth expectations do not jive with real evidence of demand destruction; discussing the record PEG level, BofA says that “today’s level would suggest losses of -20% over the next 12 months based on the historical relationship.”

    It is a “deer in the headlights” moment for the Street. After buying the Fed’s “transitory” narrative for nine months, the Street still has 2021, 2022, and 2023 S&P 500 earnings growth per share up in the clouds. Bonds are screaming growth is plunging as demand destruction is taxing consumers and profits, but the Street just took up their numbers bigly! They missed 2020 by a country mile on covid (understandable), and then lowballed their 2021 outlook in Q1 this year, then they took 2021, 2022, and 2023 numbers UP 20% 25% higher over the summer. Then inflation becomes NOT transitory.

    This is a screaming sell signal.

    As inflation has proved more sustainable, U.S. tech stocks have a near term date with an elevator shaft. Hard assets > financial assets 2020-2030.

    Tyler Durden
    Sun, 11/21/2021 – 14:45

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