Nov 24

Today’s News 24th November 2021

  • Democrats To Introduce Law That Allowing Cops To Confiscate Guns From US Troops; Report
    Democrats To Introduce Law That Allowing Cops To Confiscate Guns From US Troops; Report

    Authored by Steve Watson via Summit News,

    A report out of Military.com notes that House Democrats are aiming to pass legislation that would allow police to confiscate firearms from active duty troops.

    The report notes that the legislation would permit civilian police to take the action against any military service members if they are accused of ‘domestic violence.’

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    California Democratic Rep. Jackie Speier, who chairs the House Armed Services Committee’s subcommittee dedicated to personnel said “Domestic violence is a forgotten crisis in the military, and that’s why I offered an NDAA [National Defense Authorization Act] amendment to ensure that service members have access to military court protective orders that are as strong and enforceable as protective orders issued by civilian courts.”

    The report explains that the law as it currently stands means that civilian law enforcement does not enforce military court orders, and commanders have no authority to seize guns from troops if they are kept off base.

    The Democrat legislation would “create a system for military courts to issue protective orders,” the report notes, adding that “Military court protective orders would be fully recognized by state and local law enforcement under the proposed law.”

    Critics of the proposal point out that it is similar to so called ‘red flag’ gun confiscation laws that allow police or family members to petition a court to remove firearms from anyone deemed to be a danger to themselves or others.

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    Republicans are opposing the move, calling on the leaders of the House and Senate armed services committees to remove the provision from the NDAA, arguing that it “would violate the Second Amendment rights of our nation’s brave service members by allowing military judges and magistrates to issue military court gun confiscation orders.”

    Rep. Chip Roy, R-Texas further urged that “Congress should not allow servicemen who are faced with allegations to have their firearms taken away first, and face due process later.”

    Last year an almost identical provision in the House version of the NDAA was removed as it progressed to the Senate, which at the time was controlled by Republicans.

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    Tyler Durden
    Tue, 11/23/2021 – 23:40

  • US, Russia Military Chiefs Hold Urgent "Deconfliction" Call As Ukraine Crisis 2.0 Looms
    US, Russia Military Chiefs Hold Urgent “Deconfliction” Call As Ukraine Crisis 2.0 Looms

    The heads of the Russian and United States militaries held a rare and urgent phone call on Tuesday in efforts to deescalate soaring tensions in eastern Europe, with both sides cryptically confirming it was to discuss “current” international security issues. 

    Russia’s most senior military general, Valery Gerasimov, held the call with US Chairman of the Joint Chiefs of Staff Mark Milley, in which the two top generals talked about “pressing issues of international security”. The past days have witnessed heightening rhetoric and threats being exchanged between Moscow and Washington over tensions in Ukraine and Belarus, especially given recent reports from US media over a Russian force build-up and planned “invasion” of eastern Ukraine, reports which the Kremlin has vehemently denied. 

    The US side’s readout of the call acknowledged it was for the purpose of rapid “de-confliction” between the two superpowers, also coming the same day CNN reported the Biden administration is now mulling additional weapons and military trainers for Ukraine. 

    Image via AFP

    No additional details or specifics of the military-to-military call were revealed; however, it was without doubt related to a building new Ukraine crisis, following the US allegations of a massive Russian troop build-up near Ukraine for a potential imminent invasion. 

    At the start of this week it was revealed that the Biden administration was reported to have briefed the European partners that Russia on the supposed planned invasion of eastern Ukraine. The Kremlin has been fierce in its response rejecting the accusations, with some thinly-sourced Western reports suggesting as many as 100,000 active duty Russian troops and reservists were being mustered for a major offensive operation. 

    A report in US News and World Report that tensions are fast approaching a breaking point, leading to the potential for a ‘Ukraine crisis 2.0’ amid the tit-for-tat accusations: 

    Through a series of public statements and posts through its state news services, leaders in Russia on Monday presented the unified case that Ukraine was needlessly deploying its military forces to challenge Russia’s sovereignty and its nearby interests, that rising concern in the West of military action by Moscow represents only an attempt by Kyiv to mask its own intentions to do so, that the Western-backed peace process for the conflict in Ukraine is broken and that Kyiv’s allies in Europe and North America are not prepared to back up their pledges of support.

    Just prior to the Tuesday military deconfliction phone call between the US and Russia being revealed, on Tuesday Russian Defense Minister Sergey Shoigu said that US nuclear-capable bombers had drastically ramped up their flights across Eastern Europe, close to Russia’s border. 

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    Earlier this month, on Nov.10, Russia had sent its own strong message by flying a pair of Tu-22M3 bombers along Belarus’ border with the EU, amid the ongoing migrant crisis standoff between Belarus and Poland. This was combined with verbal warnings from Putin and Kremlin officials that NATO must not cross Russia’s “red lines” in Ukraine. 

    Tyler Durden
    Tue, 11/23/2021 – 23:20

  • Pride Goeth Before The Bitcoin Fall
    Pride Goeth Before The Bitcoin Fall

    Submitted by QTR’s Fringe Finance

    Pride goeth before destruction, and an haughty spirit before a fall.

    – Proverbs 16:18

    Many people already know some of my controversial takes on bitcoin, not the least of which is the idea that I believe a crypto cataclysm could be coming, and that China could be side-stepping a global economic crisis by bowing out of the crypto world.

    You can read those thoughts here: Is China Sidestepping A Crypto Cataclysm No One Else Sees Coming?

    So I was very interested when, last week, Kitco posted a debate between Peter Schiff and Alex Mashinsky on the merits of bitcoin versus gold.

    Schiff is CEO and chief global strategist of Euro Pacific Capital and a large proponent for buying gold as a safe heaven to preserve wealth.

    Mashinsky is the CEO of Celsius, a CeFi lending platform operated by use of blockchain technologies, and a proponent for bitcoin and cryptos as assets.

    I want to start this piece off by saying two things.

    First, just know I’m going to get a lot of shit from bitcoin bulls about it. If you’re one of those bulls already thinking about giving me shit, I encourage you to read some of the points I’m going to make here and not immediately try and throw a wet blanket over this entire article.

    Second, I want to make the points that (i) there are some things about bitcoin that I like and (ii) that I have exposure to some crypto related names. I like the idea of bitcoin, I just don’t know if it is going to stand up, long-term, in practice. Like many people, for a preservation of wealth and store of value, I am much more comfortable holding gold.

    Furthermore, I agree with the problem that a lot of bitcoiners are trying to solve: that the central banks are completely out of control and are doing more harm than good. So hopefully, if you are a crypto advocate, you don’t see this article as me widening the gap between us, but rather trying to identify some nonsense in the space that I think can help inform both bitcoin skeptics and those who are bullish.

    Source: Kitco

    When I first saw that Peter Schiff was debating Alex Mashinsky on Kitco news, I knew it was a debate that I wanted to watch. Before I even started watching the interview, I saw a disclaimer on Twitter written by Peter himself, where he apologized for losing his temper.

    I couldn’t help but wonder what, exactly, took place during the interview, as I have watched hundreds of Schiff interviews and have never seen him lose his temper. In fact, sometimes, I lose my temper watching the videos and get mad at Peter for not losing his temper because of how stupid some of the guests are that he is routinely pinned against when discussing things like the merits of capitalism versus socialism.

    But it wasn’t more than a couple of minutes into Kitco’s debate that I started to understand exactly why Peter was getting frustrated. The guy that he was “debating” against was throwing a slew of logical fallacies against the wall and just seeing what stuck.

    Mashinsky led the debate by suggesting a classic fallacy: that bitcoin’s past performance was going to always be indicative of its future results. This is akin to betting “black” at the roulette table after “red” comes out fifty times in a row because it is “due” to come out when, in fact, “black” still has the same 50% chance of coming out as it did on all of the prior spins.

    I give kudos to the Kitco moderator for trying to put a stop to this argument before it started, but this is always the first arrow in the quiver for bitcoin bulls. I have pointed out over and over, there is a reason that the first disclaimer you always see when buying a financial product is: “past performance is not indicative of future results.”

    Because it isn’t.

    Mashinsky then continues hopping from one logical fallacy and inaccuracy to the next. During a discussion about whether or not all bitcoin margin debt (key word: all) was liquidated during the last bitcoin crash, Peter Schiff points out that the amount of leverage people are using to buy bitcoin is likely still significant and dangerous. Mashinsky argues that he believes all margin debt had been liquidated during the last bitcoin plunge, a ridiculous assertion that had Peter fuming.

    Mashinsky

    The absolute worst and most irresponsible of all of the arguments from Mashinsky came when he suggested to viewers of the debate – many of whom likely lack financial sophistication – that both bitcoin and gold pay a yield.

    Of course, what he meant was that they pay a yield on his Celsius platform, but he failed to qualify his statements to make that clear. Neither asset pays a yield in general and Mashinsky knows that.

    As Peter noted, the capital to pay a yield has to come from somewhere. In dividend paying companies, it comes from their retained earnings. Bitcoin and gold don’t earn anything on their own, so there’s nowhere to draw from to pay a yield, let alone an astronomical 5% yield that Mashinsky claims during this debate.

    When Mashinsky claims bitcoin pays 5%, Peter hones in on the fallacy and immediately asks him repeatedly where the yield comes from. Mashinsky has no answer. Peter then takes a guess and asks if Celsius trades the crypto in order to come up with the proceeds to be able to pay the yield, but Mashinsky never gives him a clear answer. This is an extremely dangerous thing to suggest by Mashinsky without explaining in full – and I think even bitcoin bulls can understand why this is dangerous. You can’t get a 5% yield anywhere, let alone from a speculative new asset class. And if you are getting 5% somewhere, chances are you may not be getting it consistently or for a long period of time.

    Understanding how a yield is paid is one of the most important concepts in value investing, which is of course why Peter honed right in on the Achilles’ Heel and why Mashinsky refused to answer questions about it.

    Hilariously, there are also several times during the debate where Mashinsky refers to bitcoin as “gold” or the “gold standard”. Perhaps Mashinsky should take a step back and understand why things are labeled the gold standard to begin with.

    In the words of Peter Schiff: “Gold mines are literally gold mines!”

    Schiff

    Mashinsky spends parts of the debate trying to juxtapose bitcoin and gold, like many others have done while advocating for bitcoin. But at some point, it’s going to become very apparent that the two are not the same and bitcoin bulls will one day wonder why they hadn’t made the distinction clearer to begin with.

    Mashinsky then contradicts himself several times when speaking about where the price of bitcoin is going to go. When questioned about where the price of both gold and bitcoin are going, he predicts that gold will go to between $2300 and $2500 over the next year. He then predicts that bitcoin will reach $150,000 next year. That prediction comes just moments after Mashinsky himself says that we have no idea where the price of either asset is going to go. The fact that he is replete with double talk like this should alarm prospective investors in bitcoin.

    There’s also a point in the middle of the debate where Mashinsky admits that psychological buy-in is the one thing that’s driving the price of bitcoin. Schiff then tries to ask several times what happens if people stop believing in it. Mashinsky admits that if people stop believing in it, it means that they have started believing in something else. This point should be fleshed out as a major risk factor and not just dashed over quickly after being avoided, as it was done in this interview.

    Showing off pure ignorance of where value comes from, Mashinsky even claims gold “has no value” during the interview, telling Peter:

    “Gold has zero value. Yes you can use it in jewelry and you can use it to build high fidelity electronic equipment, but that doesn’t mean it has any value.”

    Mashinsky also advocates for “borrowing against your fiat” to buy bitcoin. Make no doubt about it, this is asking people to borrow against their houses, credit cards and everything they own to pour money into bitcoin. It’s an idea that’s as irresponsible to suggest as it inverse to the idea of “protecting” your wealth.

    Mashinsky’s debate tactics also included ad hominem attacks, like when attempts to make fun of Peter for being a dinosaur, suggesting he is using a dial-up modem after his connection drops during the debate. These jokes, especially about Peter, often come up in the bitcoin community and while they are relatively harmless, it is important to understand that they are creating a climate of cognitive dissonance and confirmation bias that reaffirms the notion that bitcoin bulls have some super tech-savvy understanding of bitcoin that guys like Schiff and myself do not.

    Bitcoiners better hope they’re right.

    As I’ve argued several times before, sometimes it isn’t the fact that people don’t understand bitcoin that makes them skeptical, it’s the fact that they do.

    Finally, later in the debate, Mashinsky is also challenged on bitcoin’s need for a power source and the threat of quantum computing, both of which he doesn’t really seem to have a great answer for.

    People laugh at me when I bring up the idea of solar flares and coronal mass ejections rendering their bitcoin temporarily useless, but it is a real world scenario that could happen. In fact, we had solar storms just over the last week. When asked about the need for power, Mashinsky is forced to reply that all bitcoiners will be able to do in that instance is “wait for the power to come back on”.

    Since I have been paying attention to bitcoin over the last couple years, no one has been able to give a good answer for what to do when the power goes out. It looks like your bitcoin is simply rendered useless in that case. Yes, you could say the same thing about the banking system because a lot of it is digital, but people that own gold own it as a hedge against those systems.

    Wouldn’t it be safe to say that gold could be a hedge against bitcoin, too?

    When talking about quantum computing, Mashinsky admits that bitcoin is going to have to be modified over the next decade as quantum computing advances. No one knows what those advancements or changes will look like and who is to say whether the bitcoin you buy today will adhere to the same rules and same mathematical certainties it will after such a modification is made.

    Gold, on the other hand, has had the exact same properties and has been the exact same metal for thousands of years, which is specifically why people like it and why it works as a store of value.

    What are the two key points I’m trying to make in this article?

    First, bitcoin bulls can do better than Alex Mashinsky. The guy obviously spent a majority of the debate pitching his own service and not trying to legitimately deconstruct counter-arguments against bitcoin. I’ve met too many people who are too smart in the bitcoin community to let this guy be the person that represents you as a whole. Personally, I wouldn’t wanna do business with the guy either, but that’s just me.

    The second key point is to always remember that hubris comes before the fall. This is an old saying, but Mashinsky’s tone of arrogance and bragging about his business while not being able to answer key questions about how it functions, to me, looks like a great deal of hubris.

    The more interviews I watch like this, the more the hubris ramps up towards a fever pitch. Over time, nature and karma have a way of correcting these things. Admittedly, I’ve been saying the same thing about Tesla for years and its reckoning hasn’t happened yet, but that doesn’t mean that it won’t.

    Past performance is not indicative of future results.

    You can watch the entire hour long debate here.

    —

    Read more from QTR:

    1. Covid Is Over (If You Want It)

    2. Two Reasons The Market Could Collapse Heading Into The Holidays

    3. When The Global Monetary Reset Happens, Don’t Forget Who To Blame

    —

    Zerohedge readers always get 10% off a subscription to my blog for life by using this link.

    Tyler Durden
    Tue, 11/23/2021 – 23:00

  • "This Is Literally Going To Kill Me": Five Texas Chipotle Employees Quit Over Short-Staffing, Burnout
    “This Is Literally Going To Kill Me”: Five Texas Chipotle Employees Quit Over Short-Staffing, Burnout

    A group of five employees at an Austin, Texas Chipotle quit their jobs earlier this month over “impossible” work conditions and staffing shortages, according to Insider. The group included a general manager who had worked there for five years.

    “My store was severely understaffed, we struggled just to keep our heads above water,” said one of the employees, Peter Guerra, who added that he was regularly scheduled to work 80 hours a week and often had to do more in order to cover for other employees who quit.

    “I thought, ‘this is literally going to kill me if I keep it up,'” said Guerra, who added that the constant pressure to serve so many customers at once made him feel like he had been set up to fail. He hit his breaking point on November 13, when online orders began stacking up as a line of customers stretched to the door.

    Chipotle stores operate with two food-prep lines: one for customers who order on-site and another for digital orders. Some Chipotle workers have previously told Insider that it’s hard to keep up with the rapid rate at which digital orders stack up.

    Without enough workers to serve everyone, Guerra closed the dining room to focus only on digital orders.

    The next day, he quit – along with kitchen manager James Williams who was “stretched infinitely too thin.”

    According to Guerra, customers were sympathetic.

    “They could see the burnout on our faces,” he said.

    A total of five employees confirmed with Insider that they had walked out. Meanwhile Chipotle said that the location had been reopened.

    “The Parmer Lane location was temporarily closed on Monday due to available labor, but reopened Tuesday with normal business hours,” according to a spokesperson, who added: “In a few minor instances, there have been challenges with available labor, so we made adjustments in these restaurants to temporarily accommodate the needs of the business.”

    Tyler Durden
    Tue, 11/23/2021 – 22:40

  • Now That Rittenhouse Is Acquitted, Can Officer Kelly Have His Job Back?
    Now That Rittenhouse Is Acquitted, Can Officer Kelly Have His Job Back?

    Authored by Jonathan Turley,

    The acquittal of Kyle Rittenhouse produced a number of immediate changes beyond the custodial status of the 18-year-old himself.

    GoFundMe lifted its ban on people contributing to his defense . . . after his defense was over and the verdict was in. Some media outlets finally reported on evidence that supported his self-defense claims and one critic called for “revisiting” the clearly biased reporting in the case.

    However, there is one person whose status has not changed: Norfolk Police Officer William Kelly who was fired for simply donating to the Rittenhouse defense fund and writing a supportive note as a private citizen.

    He made the comment and donation anonymously.

    The only thing more shocking than Kelly’s loss of his job is that Norfolk City Manager Chip Filer and Police Chief Larry Boone have retained theirs.

    I criticized the firing of Kelly last April as a blatant attack on free speech. The termination occurred after Kelly made a $25 donation to the defense of Kyle Rittenhouse. He made the donation anonymously and added the comment “God Bless. Thank you for your courage. Keep your head up. You’ve done nothing wrong. Every rank-and-file police officer supports you.”

    Early in the Rittenhouse case, activists sought to cut off Rittenhouse’s ability to raise money for his defense by harassing donors and (successfully) pressuring companies like GoFundMe to block contributions. A criminal defense in any case (let alone a high-profile case with ramped up prosecution teams) is hugely expensive. That financial threat can prompt some to plead guilty. That is why people want to help fund such defenses to guarantee true access to a fair trial. Activists and GoFundMe did everything it could to block such efforts and increase the pressure on this teenager to just plead guilty.

    Back to Kelly. This is an officer who had served for almost 20 years when he decided to contribute to the defense. As a police officer, Kelly likely saw the defense grounds more clearly than most people. The jury ultimately agreed with his view that Rittenhouse acted in self-defense. Nevertheless, activists learned his identity and demanded his termination. Filer rushed to satisfy the mob. He fired Kelly with the support of Boone and declared “his egregious comments erode the trust between the Norfolk Police Department and those they are sworn to serve.”

    The “egregious comments” were to say anonymously that there are officers who support Rittenhouse and believe in his defense. Kelly has pointed out that Boone was allowed in uniform to march with Black Lives Matter protesters. Yet, he was fired for anonymously making the supportive donation and statement to a legal defense fund.

    Various public officials, including Vice President Kamala Harris, have contributed to the The Minnesota Freedom Fund, which “pays criminal bail and immigration bonds for those who cannot otherwise afford to as we seek to end discriminatory, coercive, and oppressive jailing.”  They have the right to support such legal defense funds, which serve to assure that litigants have the means to defend themselves. So does Kelly.

    When Kelly was fired, many on the left celebrated despite the fact that he was being denied his right to free speech and free association. It is a pattern that I have written about in the past as public employees are fired for statements on social media or associations in their private lives.  This includes a New Jersey police officer fired for calling BLM protesters “terrorists” on her personal Facebook account. Most recently, a court reinstated Loudon teacher Byron “Tanner” Cross, who was fired for speaking publicly against gender identification policies.

    As it stands, Kelly was fired for supporting (again anonymously) a teenager who was ultimately acquitted of all charges by a jury. He was fired for contributing to a legal fund that would guarantee that the accused would be allowed to put on a full defense. That is in the interest of justice.

    Yet, Filer and Boone remain employed despite using their official positions to retaliate for the use of free speech. Kelly and his family continue to appeal his firing as they struggle to survive on the teacher’s salary of his wife.  The dictator Idi Amin once proclaimed “There is freedom of speech, but I cannot guarantee freedom after speech.”

    That seems the standard applied in Norfolk where even anonymous support for a legal defense is grounds for termination.

    Tyler Durden
    Tue, 11/23/2021 – 22:20

  • Kremlin Informs China: 10 US Strategic Bombers Trained To Use Nukes Against Russia This Month
    Kremlin Informs China: 10 US Strategic Bombers Trained To Use Nukes Against Russia This Month

    Russia’s Defense Ministry informed China on Tuesday that US strategic bombers recently conducted training exercises which envisioned Russia as a target for nuclear strikes.

    Speaking to Chinese Defense Minister and top PLA General Wei Fenghe, Russia’s defense chief Sergey Shoigu described that “this month, during US strategic forces exercise Global Thunder, ten strategic bombers practiced the option of using nuclear weapons against Russia almost simultaneously from the Western and Eastern directions.”

    China and Russia defense chiefs during prior “routine” joint war games, via AP

    Crucially he emphasized the threat is ultimately aimed at China too, as “such actions of the US strategic bomber aviation pose a threat not only to Russia but also to China,” according to the remarks cited in state media. 

    He also informed the PLA chief that “We are witnessing a considerable increase in the US strategic bombers’ activity near the Russian borders. Over the past month, they conducted about 30 flights to the borders of the Russian Federation, or 2.5 times more compared to the same period of last year.”

    The virtual meeting among the defense chiefs came as Washington and some European allies, including officials in Kiev, have charged the Kremlin with a threatening build-up of forces near Ukraine, and after the Biden administration was reported to have briefed the European partners that Russia is “planning an invasion” of eastern Ukraine. 

    The militaristic rhetoric has only grown as a result, with US News and World Report describing that tensions are dangerously approaching a breaking point:

    Through a series of public statements and posts through its state news services, leaders in Russia on Monday presented the unified case that Ukraine was needlessly deploying its military forces to challenge Russia’s sovereignty and its nearby interests, that rising concern in the West of military action by Moscow represents only an attempt by Kyiv to mask its own intentions to do so, that the Western-backed peace process for the conflict in Ukraine is broken and that Kyiv’s allies in Europe and North America are not prepared to back up their pledges of support.

    So it appears Moscow is ready to call what it sees as the West’s bluff over Ukraine. For now both sides continue “playing chicken” with their growing and threatening rhetoric. 

    The Kremlin has blasted the Western reports as a disinformation campaign, and it’s likely that Shoigu’s very bold public statements to his Chinese counterpart are meant as a warning related to the rising tensions with NATO over Ukraine as well as the Belarus-Poland migrant crisis. 

    Shoigu had further emphasized that Russian and Chinese troops are increasingly “interacting on land, sea, and air” – noting the fact that as both countries have come under Washington pressure in recent years, their “trusting and friendly” strategic cooperation has only deepened, now with routine military cooperation and drills.

    Gen. Fenghe appeared in full agreement, according to the meeting summary in Russian press reports, saying, “I also support your vision of the military threat to our countries coming from the United States of America.”

    Tyler Durden
    Tue, 11/23/2021 – 22:00

  • DOJ Intervenes To Defend Section 230 In Trump's Facebook Lawsuit
    DOJ Intervenes To Defend Section 230 In Trump’s Facebook Lawsuit

    Authored by Ivan Pentchoukov via The Epoch Times,

    The Department of Justice (DOJ) on Monday intervened in former President Donald Trump’s lawsuit against Facebook in order to defend the constitutionality of Section 230, a federal statute derided by both Trump and President Joe Biden.

    The plaintiffs in Trump’s lawsuit filed a constitutional question in July as to the legality of Section 230. The federal court handling the case in Florida certified the question to Attorney General Merrick Garland and in late August ordered the DOJ to decide whether to intervene to defend the legality of the statute.

    In its filing on Nov. 22, the government noted that the Justice Department “has an unconditional right to intervene to defend the statute” and is intervening “for the limited purpose of defending the constitutionality of Section 230.”

    The counsel for Facebook and Trump agreed to the DOJ’s intervention, according to the filing (pdf).

    Section 230 of the Communications Decency Act shields internet companies from liability for good faith removal of “objectionable” content.

    On the campaign trail in 2019, Biden told The New York Times that Section 230 should be repealed.

    “The idea that it’s a tech company is that Section 230 should be revoked, immediately should be revoked, number one. For Zuckerberg and other platforms,” Biden said in an interview with the Times’ editorial board on Dec. 16, 2019.

    “It should be revoked because it is not merely an internet company. It is propagating falsehoods they know to be false.”

    In May this year, Biden revoked a Trump order that had targeted Section 230.

    Former President Donald Trump prepares to speak during the Conservative Political Action Conference CPAC held at the Hilton Anatole in Dallas, Texas, on July 11, 2021. (Brandon Bell/Getty Images)

    In his class-action lawsuit against Facebook, Trump is seeking the reinstatement of his account, punitive damages for being banned from the platform, and for Section 230 to be declared unconstitutional.

    Facebook banned Trump indefinitely from its platform on Jan. 7, 2021, the day after the riot at the Capitol.

    Trump’s attorneys had argued in October that Section 230 violates the First Amendment when applied in his case.

    “Coerced by members of the United States Congress, operating under an unconstitutional immunity granted by a permissive federal statute, and acting directly with federal officials, [Facebook] is censoring plaintiff, a former President of the United States,” Trump’s attorneys said in a motion for a preliminary injunction.

    “[Facebook] exercises a degree of power and control over political discourse in this country that is immeasurable, historically unprecedented, and profoundly dangerous to open democratic debate. Defendant not only banned Plaintiff from its platform, but also extended its prior restraint to innumerable Users who post comments about Plaintiff.”

    Facebook, in prior filings, called the case “meritless.” The company’s counsel attorney had successfully motioned to move the case to a California court, pointing out that users who accept its terms of service agree to litigate their claims in California.

    Trump had tens of millions of users on Facebook, Twitter, and YouTube before the three social media giants banned his accounts in the wake of the Jan. 6 riot. Trump was subsequently exonerated by the Senate from Capitol-riot-related charges against him brought by House Democrats as part of the second impeachment.

    Tyler Durden
    Tue, 11/23/2021 – 21:40

  • "A Drop In The Ocean": Goldman Mocks Biden's Tiny SPR Release
    “A Drop In The Ocean”: Goldman Mocks Biden’s Tiny SPR Release

    Goldman’s commodities team, which for most of 2021 has been extremely bullish on the price of oil which it sees rising to $90 by year end and remaining higher for years to come, has not been exactly timid in its view on what Biden’s SPR release will do to the price of oil: two months ago, when the idea was first floated, Goldman said that an “SPR Sale Would Release Only 60MM Barrels; Will Bring Even Higher Oil Prices“, and then, less than a week ago when oil prices tumbled, the bank said that with Brent below $80, “A Biden SPR Release Is Now Fully Priced In And Will Send Oil Price Even Higher In 2022.”

    Well, Goldman was right, and as we showed today, Brent exploded higher after news of the smaller than expected SPR exchange (not release) finally hit turning sell the rumor into a “buy the news” frenzy.

    Not surprisingly, after the dust finally settled, it was time for Goldman’s commodity guru Damien Courvalin to take a victory lap and in a note titled “A Drop in the Ocean” (it’s all too clear what the title was referencing)…

    … he writes that as details of government crude reserve releases started being released today, with 50 million barrels (mb) from the US and as much as 30 mb from Korea, Japan, China, India and the UK, “the aggregate size of the release of c. 70-80 mb was both smaller than the 100+ mb the market had been pricing in, with the swap nature of most of these barrels implying an even smaller c. 40 mb net increase in oil supplies over 2022-23.” That, as Courvalin points out, is in the context of a market drawing up to 2mb/d at present!

    Translation: enjoy the low oil and gas prices while you can… we are going much higher.

    How much higher? As Courvalin explain, on his pricing model, such a release would be worth less than $2/bbl, significantly less than the $8/bbl sell-off that occurred since late October. So at $82/bbl currently, Brent prices are in fact not only pricing in today’s  announced release, but an additional hit to global oil demand of 1.5 mb/d for the next three months. That is equivalent to pricing in both a repeat of last winter’s 1 mb/d hit to EU oil demand due to the COVID wave (which occurred in the absence of vaccinations) as well as a repeat of this summer’s 0.5 mb/d hit to Chinese demand from lockdowns.

    Needless to say, the Goldman strategist views these as “excessive concerns over the next three months, leaving the recent sell-off overshooting fundamentals due to the year-end decline in trading activity.”

    Separately, while Goldman concedes that on their own, the coordinated government stock releases would warrant a $2/bbl downgrade to the bank’s $90 year-end Brent price forecast, it sees offsetting risks from the lack of progress on negotiations with Iran. To be sure, the restart of negotiations next Monday, November 29, will provide some sense of potential timeline to an agreement, with clear risks that Goldman’s assumption for an April lift of sanctions (and February onward unwind of 60mb Iranian floating storage) could prove too optimistic. In addition, and in retaliation for the SPR release, OPEC could easily consider halting its production hikes to offset the detrimental SPR impact of lower oil prices on the needed recovery in global oil capex, likely justifying such action as prudent in the face of COVID demand risks.

    In conclusion, Courvalin reiterates his view that such government intervention is not the solution to higher oil prices that are required to overcome the slow supply response of producers, something he discussed earlier this week. This instead has been driven by:

    1. the damage to investors caused by oil producers’ capital destruction over the last seven years, now compounded by ESG allocation inefficiencies, and
    2. the demand uncertainties of COVID, China and energy transition.

    One thing is certain: neither of these two will be resolved by palliative measures such as an SPR release, or potentially counter-productive measures, such a US export ban.

    One final point: while not even the Biden admin is dumb enough to consider it, some have speculated that once the SPR release is shown to be a total disaster, Biden may implement an oil export ban. The problem: this would have catastrophic consequences. As Goldman explains, a US export ban would significantly disrupt the US and global oil markets, and potentially be a counterproductive tool to attempt to lower oil prices.

    The US exports 3 mb/d of crude and domestic pipelines would not be able to reroute these volumes to US refiners, which further don’t have enough capacity to process this much crude. This would leave excess US crude supply quickly reaching tank tops and forcing shut-in production, with investment and production soon to enter significant declines. At the same time, the global market would be deprived of 3 mb/d of US supply (light sweet crude that is Brent like in quality). Brent prices would therefore need to spike to push demand lower as there is simply not enough spare capacity (nor suitable crude) to replace US lost exports.

    Finally, with the US an importer of gasoline from Europe, US gasoline prices would spike to curtail domestic demand, creating a negative hit to US economic activity.

    Come to think of it, this is precisely what Biden will do next.

    Tyler Durden
    Tue, 11/23/2021 – 21:20

  • Here's One Simple Example Of How Absurd Build Back Better' Is
    Here’s One Simple Example Of How Absurd Build Back Better’ Is

    Authored by Simon Black via SovereignMan.com,

    In early January 1964, barely six weeks after the assassination of John F. Kennedy, US President Lyndon Johnson delivered a speech to the American people in which he declared an “unconditional war.”

    But he didn’t declare war on Vietnam. Or Cuba. Or the Soviet Union.

    Johnson declared war on poverty.

    And in his State of the Union address he told his fellow Americans that it would take more than “a single piece of legislation” to eradicate poverty.

    So they got to work preparing a series of expensive programs to create jobs, build affordable housing, establish new entitlement programs, and invest in vocational training.

    It goes without saying that this spending bonanza kicked off a steep increase in inflation. But more importantly it turns out that most of these programs were utter failures.

    One of the best examples is the Job Corps, an initiative established in 1964 to provide free vocational training to young people.

    The Job Corps was something of a pet project for Lyndon Johnson; he believed that “one thousand dollars invested in salvaging an unemployable youth today can return $40,000 or more in his lifetime.”

    This is a long-standing argument for increased public investment in education.

    And yet according to a long-term study of the Job Corps published in 2018 by the agency’s own Inspector General, the program has been a terrible investment for the American taxpayer.

    The Job Corps spends $1.7 billion of taxpayers’ money each year to train around 66,000 people; this works out to be $25,000 per student per year, which is already more expensive than many public universities.

    Yet Job Corps’ own Inspector General found that “more than half” of the participants in his study “did not have a beneficial outcome.”

    A later report by the US Department of Labor determined that a small group of Job Corps graduates could earn, on average, $275 more per year than non-graduates who work in similar jobs.

    Wonderful. But given that these jobs are at the lowest possible tax bracket, the additional tax revenue per Job Corps graduate is less than $30 per person.

    That makes the Job Corps’ annual Return on Investment about 0.1%, at best. More likely it loses money and provides no real benefit to graduates.

    So why would any sane individual continue investing in this program? Even the New York Times called it a complete failure and “a little bit like prison”.

    And yet the Job Corps is set to be the proud beneficiary of $1.5 billion, courtesy of the Build Back Better Act that passed the US House of Representatives on Friday.

    This new funding will roughly double the program’s budget.

    Now, if you’re spending money and you’re getting a fantastic return on investment, then cost shouldn’t be an issue.

    The problem is spending money and failing to achieve any meaningful outcome. And that tends to be the government’s track record.

    LBJ believed in 1964 that investing in job training would generate a huge return on investment. But six decades of Job Corps data show that they completely failed to achieve this vision.

    Instead they created a job training program that is more expensive than most public universities, yet generates no real benefit for its graduates or for taxpayers.

    But politicians only think about money. If they increase an agency’s budget and throw money at an issue, they feel like they’ve done their job. They never look at performance or execution.

    And this is the real problem with Build Back Better. Much has been said about the cost of the legislation, including those who say it will “cost nothing”.

    (The initial cost is actually $1.7 trillion, and the long term costs look like they’ll probably top $4 trillion.)

    But focusing on cost really misses the point. The real question is– will there be any return on investment?

    The failure of Job Corps provides a pretty clear answer.

    Build Back Better is a whopping 2,468 pages. Buried in that text, they’re creating thousands of new programs, just like Job Corps.

    The politicians keep insisting that these are all “investments”. But they never conduct a honest assessment of investment performance.

    They just keep writing checks and spending other people’s money with a dangerous fanaticism, and absolutely no consideration of execution and performance.

    And just like LBJ’s War on Poverty, Build Back Better will likely lead to much higher inflation.

    After all, it’s not difficult to predict what might happen when they spend money endlessly and generate zero return on investment.

    LBJ at least got one thing right.

    In his original State of the Union address in 1964, he acknowledged that the private sector (NOT the government) had the real power to create jobs, enhance prosperity, and alleviate poverty.

    He argued that cutting taxes, for example, would “create new jobs and new markets in every area of this land”, and he told Congress, “We need a tax cut now to keep this country moving. . . Our taxpayers surely deserve it.”

    Further, he stated, “the most damaging and devastating thing you can do to any businessman in America is to keep him in doubt and to keep him guessing on what our tax policy is.”

    Today, however, politicians hold the opposite view. They believe that tax increases are the path to prosperity. They believe jobs are created through more rules, more laws, and more money in the hands of the government.

    And they’re delighted to keep people guessing about tax policy, including threatening retroactive tax changes.

    This entire ethos is completely destructive… not to mention highly inflationary. But we’ll tackle that issue another time.

    *  *  *

    We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

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

  • Lawsuit Imminent? Psaki Deflects After Kyle Rittenhouse Says Biden Defamed His Character
    Lawsuit Imminent? Psaki Deflects After Kyle Rittenhouse Says Biden Defamed His Character

    White House press secretary Jen Psaki issued a carefully worded answer on Tuesday after Fox News‘ Peter Doocy asked if President Biden would “ever apologize to Kyle Rittenhouse for calling him a white supremacist.”

    Psaki deflected, saying “let’s be clear what we are talking about here. This is about a campaign video, released last year, that used President Trump’s own words, during a debate, as he refused to condemn white supremacists and militia groups.”

    So Biden called Rittenhouse a white supremacist because of Trump? That’s a new one. Let’s review the defamatory campaign ad:

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

    Now watch Psaki spin in circles trying to explain why Biden doesn’t need to apologize.

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

    Doocy’s questioning follows comments Rittenhouse made during a Monday night appearance on Fox News‘ “Tucker Carlson Tonight,” where he used oddly specific legal language to describe his side of what happened.

    “Mr President, if I can say one thing to you, I would urge you to go back and watch the trial and understand the facts before you make a statement,” said Rittenhouse. “It is an actual malice and defaming my character for him to say something like that.“

    Watch:

    Rittenhouse also told Carlson that he thought the jury reached the right decision.

    “I thought they came to the right verdict. It was not Kyle Rittenhouse on trial in Wisconsin, it was the right to self- defense on trial.”

    The only question now is whether Rittenhouse is going to sue the MSM or the Biden campaign first?

    Tyler Durden
    Tue, 11/23/2021 – 20:40

  • 34% Of White College Applicants Lied About Race To Improve Chances Of Getting Accepted, Survey Finds
    34% Of White College Applicants Lied About Race To Improve Chances Of Getting Accepted, Survey Finds

    Authored by Charloitte McKinley via TheCollegeFix.com,

    Thirty-four percent of white college student applicants have lied about their race to admissions officials to better their chances of getting accepted into their desired university or receive better financial aid, according to a survey from Intelligent.

    The survey of 1,250 white college applicants ages 16 and older found that the most popular racial claim was Native American. Out of the 34 percent of white college applicants who lied about their race, 77 percent were accepted.

    “It’s the easiest lie to tell because you can’t get caught in it,” said Vijay Jojo Chokal-Ingam, an admissions consultant at SOSAdmissions.com and author of “Almost Black: The True Story of How I Got Into Medical School By Pretending to Be Black.”

    “A lot of people, based on very flimsy reasons, claim to be either African-American, Hispanic or Native American because they know it’s going to improve their chances,” Chokal-Ingam said in an interview with The College Fix.

    Though lying on college applications is frowned upon, universities typically do not push back on students about their race. Instead, they accept it regardless of what they look like, he said.

    “It’s become a joke,” Chokal-Ingam said.

    He cited Senator Elizabeth Warren, who famously “lied about her race to get a faculty position at Harvard.”

    “If there was a degree to which people felt guilt about doing that, it died with Warren because the Boston Globe, the New York Times, the Washington Post—they all ran to her defense,” he said. “This prompted an ‘if she can do it, I can do it too’ ideology.”

    “When President Trump called Senator Elizabeth Warren ‘Pocahontas,’ [the media] called him a racist. They said it was a racist thing. On the contrary, I think that he was bringing to attention a very important issue in the field of racial-race relations,” Chokal-Ingam said.

    “He was making people aware of the fact that people routinely, on a massive scale, lie about their race.”

    When Chokal-Ingam was faced with the prospect of getting caught in his lie, he said he knew exactly what he needed to say to shut them down: “I don’t want to talk about my ethnic background because I think it is very racist for you to ask me these highly inappropriate questions.”

    Colleges are not solely looking at a person’s race when choosing people to go to their universities. For instance, Harvard scores on three sections: academics, extracurriculars and personality, said Kenny Xu, author of “An Inconvenient Minority: The Attack on Asian American Excellence and the Fight for Meritocracy.”

    Whereas white college applicants are more likely to lie about their race to gain acceptance into the university of their choice, many universities are deliberately controlling which races will join their classrooms through affirmative action clauses, he said in an interview with The College Fix.

    “In academics, Asians score the highest of all races, in extracurriculars Asians score the highest level of the races, and in personality, Asians get the lowest score,” Xu said.

    “Out of all the reasons, despite the fact that they would score highest on alumni interviews and second highest teacher recommendations … It’s pretty much the personality score that is used to discriminate against Asians in the college admissions process.”

    Unlike their white counterparts, Asians are unable to “cheat” their way out of it, he said.

    “For various reasons, white people are more mixed in their orientation. They can get away with it more than Asians can,” he said.

    Ultimately, meritocracy is the best strategy for college admissions, Xu said.

    “Merit should be the only criteria to which a student should get into a university,” Xu said.

    “You shouldn’t have to worry about things like race or admitting people beyond their scope of qualifications.”

    Instead of lying to get into certain elite colleges, Xu also suggested students expand their horizons.

    “If you don’t get into the one you’re qualified for, guess what? You can go to a university that you are qualified for and you will achieve and be a big fish in a smaller pond,” he said.

    Chokal-Ingam said the special treatment given to blacks and Hispanics is damaging.

    “It is a stigma they will carry on the rest of their lives,” he said.

    Tyler Durden
    Tue, 11/23/2021 – 20:20

  • Chinese Doctors Urge Beijing To Abandon "Zero-COVID" Strategy As Infections Rise, Government Doubles Down
    Chinese Doctors Urge Beijing To Abandon “Zero-COVID” Strategy As Infections Rise, Government Doubles Down

    As the world approaches the second anniversary of Beijing’s New Years’ Eve (at least, for Americans) report to the WHO about a mysterious new virus circulating in Wuhan, Bloomberg reports that China is officially facing its toughest battle with COVID since the early days of the outbreak, and in response, is doubling down on its “COVID Zero” pledge, just as Australia calls in its military to help forcibly remove people in the northern territories to quarantine camps.

    The decision to “double down” comes “despite rising costs to Australia’s people and economy”, Bloomberg reports. Additionally, as the FT reports, at least three leading Chinese health scholars have challenged the government’s policy of monitoring of mobile phone location data to help identify close contacts of COVID-19 cases, “in a rare instance of public opposition to the nation’s draconian pandemic prevention strategy.”

    Per the FT, whose reporting embraces the notion that Beijing has an obligation to accept that COVID will inevitably become “endemic”, China’s top public-health officials, led by Chen Fujun at Huaxi No 4 Hospital in the southwestern city of Chengdu (which imposes travel restrictions and mandatory tests for mobile phone users who strayed within 800 meters of a confirmed case for more than 10 minutes), believe that the program results in “an overuse of medical resources, growing public panic and the disruptions of people’s normal life and work”. “We should consider the sustainability of these measures,” the doctors said.

    Source: BBG

    The doctors’ criticism highlights the “growing challenges” faced by the Chinese government as it attempts to stick with its “zero COVID” containment strategy despite repeated outbreaks of the delta variant and other variants that have been repeatedly covered up by Beijing’s increasing restrictions on reporting.

    Despite early resistance to the notion, the US and European mainstream media have apparently decided that a commitment to complete eradication of the virus is now “excessive” – at least when China does it.

    Yanzhong Huang, a public health policy expert at the Council on Foreign Relations in New York, said Chengdu’s measures were “excessive” and reflected ‘poor risk assessments by the authorities’.

    The Chinese government, Huang added, seems to believe that the country’s only two options are “zero cases or… [a] worst-case scenario where the entire healthcare system is overwhelmed and social stability is undermined.”

    Does that sound familiar?

    For context, Singapore, one of the world’s most active adopters of contact tracing, considers people “close contacts” of the infected only if they come within two meters of a confirmed case, a much smaller margin than Beijing’s 800M.

    Although, before Beijing doubles down (publicly, at least) on its insistence that COVID cases can be brought completely to heel, perhaps they should tell their lab-hands in Wuhan to stop tinkering first.

    Tyler Durden
    Tue, 11/23/2021 – 20:00

  • Biden's Oil Price Smoke And Mirrors
    Biden’s Oil Price Smoke And Mirrors

    By Ryan Fitzmaurice, Senior Commodity Strategist at Rabobank

    Summary

    • The White House is playing the political blame game with respect to high gasoline prices

    • Several key agencies, including OPEC, are now forecasting oversupplied oil markets in 2022, but don’t assume oil prices will fall even if this is the case

    • We are expecting a surge of new capital into commodity markets in 1H22, following a stellar year for the alternative asset class as well as the CTA trading community

    The blame game

    Oil prices fell on the week as the rally appears to be losing steam, but not for the reasons being discussed by the White House. In fact, oil prices have been trading mostly range bound to lower ever since late October, when the year-to-date highs were set, as a combination of bearish seasonal patterns and speculative liquidation take hold.

    However, even though oil futures have been falling recently, the rhetoric out of the White House has only increased, highlighting the political vulnerabilities arising from high gasoline prices.

    First, President Biden put the blame squarely on OPEC and Russia, who according to him were not increasing oil production fast enough to calm prices. In our view, this statement was largely unfounded and meant to distract voters given OPEC+ is in fact increasing production every month by 400kb/d until pre-pandemic levels are achieved next year.

    At the same time, US crude oil production remains significantly below (-1.6mb/d) the pre-pandemic high watermark with little growth pencilled in for the shale industry next year. Unsurprisingly, OPEC+ did not heed Biden’s call for more oil at the last supply meeting and, as a result, the White House moved on to consider a new release of oil from the strategic reserve (SPR) and even a temporary crude oil export ban, both of which could backfire and lead to a surge in global oil prices rather than reduce them. Biden even reportedly floated a coordinated SPR release with China during his virtual meeting with Xi, but prospects for joint action remain low. Not to mention, the US and China have already been quietly releasing oil from reserves but that has had no discernible impact on prices to date as discussed here and here.

    To top it off, the Biden administration is now diverting the blame for high gasoline prices away from domestic policies and towards shale drillers, ordering an official investigation into oil and gas companies for potential illegal gouging despite no evidence whatsoever to support these claims.

    Flows vs fundamentals

    As just discussed, oil fundamentals have been in the spotlight recently given mounting inflation concerns and the political sensitivities at play. Interestingly, several key agencies including OPEC are now calling for an oversupplied oil market in 2022, suggesting relief at the pump and at the ballot box is just around the corner. This is not how we see it, however, and our disagreement has less to do with the fundamental outlook and more to do with the idea that looser balances will result in lower oil prices as the consensus has suggested. For starters, and as we often point out on these pages, the spot price of oil is extremely flow driven and prices do not simply fall because the market is slightly oversupplied, rather a trader or algorithm, as is increasingly the case, must sell oil futures to make the price go down or vice versa on the upside.

    Moreover, commodities markets and oil, have a deep and wide cross-section of market participants including commercial traders and speculators. Over time, the speculative interest has become more and more systematic in nature, relying heavily on quantitative market signals such as trend, momentum, and carry to make trading decisions rather than market fundamentals. In addition to systematic commodity funds, a once dormant group of commodity traders known as index investors have reappeared in impressive fashion this year due to soaring inflation. So, between these two groups of influential speculators, fundamentals rarely enter the equation directly. For example, a large multi-asset money manager is little concerned with OPEC signalling a modest oversupply of crude oil next year and is more interested in getting broad-based commodity exposure to diversify holdings and mitigate the impact of inflation on the portfolio level.

    To understand the importance of these money flows, all one must do is look back at the first half of this year to see the impact they had on oil prices (Fig. 2). To our minds, these flows were the most important price driver at the time. Further to that end, both groups of speculators are now directionally “long” oil and, importantly, have had a stellar year for returns. As a result, we are expecting another surge of capital into commodities markets in 1H22 as intuitional money chases strong returns, thereby driving spot oil prices even higher, holding all else equal. That is not to say that fundamentals don’t matter, far from it. On the contrary, we believe strongly in fundamentals, however, the price impact is much more likely to play out on the curve structure rather than spot prices.

    As such, it would not surprise us to see the oil curve structure weaken next year on the back of a build-up in inventories should the calls for a modestly oversupplied market be realized.

    Looking forward

    Looking forward, we are viewing the current oil market weakness as a function of speculative liquidation in response to bearish seasonal patterns, an increase in market volatility, and a much stronger US Dollar. Furthermore, we expect the oil rally to resume in earnest early next year as institutional capital pours into commodities following a stellar year for the alternative asset class

    Tyler Durden
    Tue, 11/23/2021 – 19:40

  • Tech Hubs Draw Fewer Out-Of-Town Renters While 'Peripheral' Markets Get More Attention
    Tech Hubs Draw Fewer Out-Of-Town Renters While ‘Peripheral’ Markets Get More Attention

    Yet another report on shifts in renter preferences across America’s vast housing market (where roughly half of Americans are still renters) is showing once again that renters continue to abandon over-priced “hubs” like San Francisco and Seattle while the number of out-of-towners moving to “peripheral” markets like Sacramento, Richmond and Raleigh is on the rise.

    Stock photo: Richmond VA.

    According to Apartment List, the ongoing pandemic has forced many renters to rethink their situation, as increasing shifts to remote work, and other disruptions some related to the pandemic, others not, change the landscape for remote work.

    Of the 50 largest metros, 37 saw a YoY decline in relative inbound migration, while 26 of the 50 largest saw a YoY decline in relative outbound migration. Meanwhile, for both inbound and outbound shifts, the largest declines occurred in the places where the level of the given metric was highest in 2019. For example, from April through August of last year, the San Francisco metro area saw the second-highest relative inbound migration rate. But ever since, it has experienced the largest decrease in that share.

    As a result, many of the hot markets that had been attracting significant interest from out-of-towners have cooled, while some less-popular destinations are now attracting more inbound interest. Because of this, San Francisco has seen the nation’s fastest decline in rents since the start of the pandemic, with prices down by 3.3% from March through July. Although San Francisco remains the nation’s most expensive rental market, local renters are likely finding better deals now than they have in some time, which may encourage them to stick around.

    As inbound interest to San Francisco cools, another NorCal metro has seen inbound interest increase: Sacramento. In 2020, relative inbound migration to Sacramento increased by 3.8% compared to last year; this is the second largest increase among the nation’s 50 largest metros. San Francisco is the most popular source of inbound searches to Sacramento, and this migration flow has strengthened from 2019 to 2020. As more flexible working arrangements gain popularity, affordable metros on the peripheries of major job centers may become increasingly attractive, and Sacramento appears to be showing early signs of this trend.

    A similar dynamic appears to be at play in a few of other major metros that renters consider more-affordable alternatives to some of the nation’s most expensive markets. Richmond, VA, which sits about 100 miles south of Washington, DC saw relative inbound migration increase from 31.4% last year to 34.6% this year.

    However, this trend isn’t universal – some tech hubs are still seeing intense interest from out-of-towners. For example, Boston saw the biggest increase in the share of renters looking to leave the metro, with relative outbound migration increasing from 21.1% to 28.7%. The combination of these changes could mean that Boston is poised for more turnover in its renter population in the near future. This might in part be driven by the fact that Boston has always been a popular city among college students, who have increasingly shifted to remote learning over the past few years.

    Tyler Durden
    Tue, 11/23/2021 – 19:20

  • It's Official: Samsung To Build $17bln Chip Factory In Taylor, Texas
    It’s Official: Samsung To Build $17bln Chip Factory In Taylor, Texas

    Update (1912ET): At a press conference in Austin, Texas, Gov. Greg Abbott announced that Samsung Electronics Co. would construct a new semiconductor manufacturing facility in Taylor, a small town outside Austin. 

    Samsung will invest $17 billion into the plant, including buildings, property improvements, machinery, and equipment. The investment is the most significant foreign direct investment in Texas history. 

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

    The plant will begin construction in early 2022 and start producing advanced logic chips that will power devices for applications such as mobile, 5G, high-performance computing, and artificial intelligence in the second half of 2024.

    “Companies like Samsung continue to invest in Texas because of our world-class business climate and exceptional workforce,” said Abbott.

    “Samsung’s new semiconductor manufacturing facility in Taylor will bring countless opportunities for hardworking Central Texans and their families and will play a major role in our state’s continued exceptionalism in the semiconductor industry. I look forward to expanding our partnership to keep the Lone Star State a leader in advanced technology and a dynamic economic powerhouse,” he continued.

    Abbott will set up a $27,000,000 grant via the Texas Enterprise Fund awarded to Samsung for job creation. 

    “As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future,” said Dr. Kinam Kim, Vice Chairman and CEO of Samsung Electronics Device Solutions Division.

    “With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain. We are also proud to be bringing more jobs and supporting the training and talent development for local communities, as Samsung celebrates 25 years of semiconductor manufacturing in the United States,” said Kim. 

    The mayor of the small Texas town was ecstatic on Samsung’s decision:

    “Samsung’s decision to locate its cutting-edge semiconductor fabrication plant in Taylor is the single most significant and consequential development for the local economy since the International & Great Northern Railroad laid tracks here in the 1870s,” said Taylor Mayor Brandt Rydell.

    “The City of Taylor is honored to have been selected by Samsung as the site for this critically important project, and we look forward to a long-lasting and mutually-beneficial relationship between our community and the company,” Rydell said. 

    Great news for President Biden’s “Build Back Better” plan, but economic benefits won’t start materializing years from now. 

    * * * 

    WSJ reports Texas Gov. Greg Abbott is scheduled to make a major “economic announcement” on Tuesday at 5 pm local time concerning new plans for a massive semiconductor plant in Taylor, Texas. 

    South Korean tech giant, Samsung Electronics Co., is doubling down in Texas with another facility, about 30 miles from its manufacturing hub in Austin. The new Taylor facility will cost a whopping $17 billion and create 1,800 jobs. Chip production wouldn’t start until the second half of 2024.

    WSJ said officials in Taylor incentivized Samsung by giving them “property-tax breaks of up to 92.5% for the first ten years, with the write-offs gradually declining over the next several decades.”

    “A final decision has not yet been made regarding the location,” a Samsung spokeswoman said.

    Samsung is taking advantage of the Biden administration’s effort to lure advanced manufacturing back to the U.S., especially semiconductor production, as global supply chains are being reworked around China. 

    In February, President Biden signed an executive order to address the global semiconductor chip shortage. “Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them,” an administration official said at the time.

    Then in July, the Biden administration announced a “supply-chain disruptions task force” to identify bottlenecks. Secretary of Commerce Gina Raimondo has headed up the task force with the help of “Mayor Pete,” focused on semiconductors and other areas, including homebuilding and construction. 

    This year’s semiconductor shortage has been very disruptive to domestic manufacturing firms. The problem is that while U.S. semiconductor firms account for 47% of global chip sales, only 12% of production is domestic. In the 1990s, the U.S. accounted for 37% of the global output. 

    Is this move the beginning of Biden’s “Build Back Better” strategy working? Or is this reflective of a red state’s more-open and less-taxed status as being attractive for global competition? The U.S. is also seeking independence from China on large-capacity batteries for electric vehicles, rare earth minerals, and pharmaceuticals. 

    Tyler Durden
    Tue, 11/23/2021 – 19:12

  • Food Inflation Is the 2022 Crisis, Not Supply Chains
    Food Inflation Is the 2022 Crisis, Not Supply Chains

    By Mark Cudmore, Bloomberg Markets Live commentator and analyst

    The real trouble will start when this year’s energy crisis morphs into next year’s food inflation problem.

    We’ve all become armchair inflation experts. And why not? It’s almost impossible for anyone to keep getting it as systematically incorrect as professional economists have done this year.

    It’s time for the conversation to move beyond the current obsession with eye-catching headline numbers. That we’re in a global inflation regime of a kind not seen for decades, is beyond doubt.

    Interest in supply chains is at a 17-year high, according to Google Trends, but it has become a red herring when it comes to forecasting the persistence of inflation.

    Supply-side constraints are usually a key initial catalyst in any price spiral. And it’s intuitive that the vast majority of supply-side issues are “transitory” in nature as supply eventually responds to higher prices. So, while it’s good to know when supply-side pressures will ease, that knowledge isn’t sufficient to conclude when the broader inflation threat will pass.

    What we need to establish is whether demand will take over in leading the inflation charge. And, for that purpose, inflation expectations are critical. As measured by breakeven rates, U.S. 5-year expectations have breached 3% for the first time in at least 19 years. The U.K. equivalent is well above 4% for the first time in records going back more than 25 years.

    Expectations of higher inflation have the double impact of encouraging people to front-load spending, further pushing up prices, as well as the more important effect of laborers demanding higher wages, thereby both directly increasing costs and the future pool of capital allocated to demand.

    This latter point is crucial to dwell on: CPI gets boosted as equality increases and labor takes a larger share of profits from capital. This is because lower-income individuals have a higher marginal propensity to consume, whereas wealthier people just add to investments. An extra $1 billion to Warren Buffett won’t change his spending habits, whereas an extra $100 to a low-income single parent likely gets recycled into the real economy within days.

    Inflation becomes a material economic problem when it significantly affects the person on the street, squeezing their disposable income and compelling central bank reactions.

    And the various themes of 2021 are coalescing into a perfect storm for one of the few unavoidable items in every CPI basket: food. Climate disruption has been a primary catalyst, but the price impacts have been exaggerated by supply-chain issues and labor shortages driving up wages. Now, the energy crisis is exacerbating the problem directly through costs.

    But it’s the issue of fertilizer becoming too expensive and industrial greenhouses getting turned off that is sowing the seeds (inappropriate pun intended) of the 2022 crisis. The UN Food and Agriculture Organisation’s food price index is up more than 30% over the past year as of the end of October, and not slowing down this month.

    Coffee, a daily staple for many of us, provides one great example where there’s been such damage to crops that it’ll take several years to see the damage repaired. Arabica coffee beans, the main type, have doubled in price over the past year.

    Wheat is surging globally with negative supply stories mounting by the day. Milling-wheat reached another record in Paris and the International Grains Council warned last week that inventories across major exporters could fall to a nine-year low. That’s something to bear in mind as tensions mount on the Russia/Ukraine border — two of the world’s largest wheat producers.

    The Bloomberg Commodity Agriculture Subindex is up more than 80% from last year’s lows. The last such extreme surge, in 2010-11, was partially blamed as a catalyst for the Arab Spring, a series of social uprisings across much of the Arab world.

    That is an index measured in dollars, and back then the greenback was weakening steadily. This year, the dollar is on a tear, meaning the true effect of these commodity price rises is even greater on consumers through much of the rest of the world.

    A squeezed consumer is bad for stability in both politics and markets, and a negative for stocks. And few things motivate laborers to demand higher wages more than being unable to afford putting dinner on the table for their families.

    It is this food crisis that will sustain the inflation problem well into 2022 and wreak havoc on a humanitarian level as well as for markets.

    Something to ponder as we celebrate the food-focused holiday of Thanksgiving.

    Tyler Durden
    Tue, 11/23/2021 – 19:00

  • Iron Ore Prices Jump On China Property Optimism
    Iron Ore Prices Jump On China Property Optimism

    Iron ore futures trading in Singapore have bounced back above $100/ton after a series of positive announcements over the last week, from potential loosening of monetary policy to easing of regulations for China’s property sector. This has sparked optimism that China’s troubled property sector could soon boost steel demand. 

    Prices in Singapore have soared as high as 22% to $104 handle in just four sessions. As of Tuesday, prices faded and hovered around the $100 mark as a turnaround in the demand outlook is being priced in.

    The surge in price is being led by increasing optimism that easing property-market curbs could soon lift steel demand and improve profitability for steelmakers. There’s also chatter the People’s Bank of China could unleash stimulus amid the economic growth slowdown in the world’s second-largest economy after this year’s vicious regulatory crackdown by Beijing. 

    “The market has higher expectations for steel production to resume,” Huatai Futures Co. wrote in a note. Property is a leading source of steel demand in the country. 

    Iron ore prices have been on a rollercoaster this year after surging to a record in May as Beijing unleashed steel output limits to curb pollution and emissions for smelters. The rally then faltered by late summer as Beijing unleashed a crackdown on the property sector — a key source of steel demand, in return, hurt the outlook for consumption.

    On the macro front, positive developments are appearing as the PBoC could be close to easing and Beijing dials back on regulatory crackdowns. Institutional investors are also getting in on the action as China’s high-yield bonds have had a bid this month. 

    It appears the Chinese government would prefer to have a healthy property market and economy (or at least one that isn’t imploding) ahead of the upcoming Beijing 2022 Olympics. 

    Tyler Durden
    Tue, 11/23/2021 – 18:40

  • Canadian Pacific To Resume Vancouver Rail Service Tuesday
    Canadian Pacific To Resume Vancouver Rail Service Tuesday

    By Nate Tabak of FreightWaves,

    Canadian Pacific plans to restore service in British Columbia on Tuesday in a reprieve for the backlogged Port of Vancouver, which has been cut off from the rails for over a week following floods and landslides that devastated the province. 

    CP said Monday that it expects to reopen its railway from Kamloops to Vancouver by midday and will be working to “clear the backlogs as quickly and efficiently as possible.” 

    “The following 10 days will be critical,” Keith Creel, CP president and CEO, said in a statement.

    “As we move from response to recovery to full-service resumption, our focus will be on working with customers to get the supply chain back in sync.”

    The backlog of vessels has mounted at the Port of Vancouver, with 43 ships waiting to dock as of Monday afternoon. It included 17 grain, 12 coal and six container ships. 

    It’s unclear, however, when exactly CN’s rail lines will be running again. The company said on Friday that it expected to have repairs completed this week. Both railways’ lines between Kamloops and Vancouver have been shut down since Nov. 15 after heavy rain brought floods and landslides. This week is expected to bring more storms to the region. 

    It will likely take weeks for the backlogs to be cleared. Meanwhile, shippers have been looking for alternates to get freight in and out of Vancouver – compounded by road closures. Air Canada said Monday that it was boosting cargo capacity for Vancouver, adding cargo-only flights and using larger passenger aircraft.

    Meanwhile, trucking companies have reported an increase in demand for expedited truckload service from Vancouver to Toronto. But reaching Vancouver via truck remains a challenge as highways have been only partially reopened. 

    “Black Friday is this Friday, so every merchant that has a Black Friday deal and has freight that’s been on the water or is in the warehouse is trying to get it moved as fast as possible,” said Corey Darbyson, director of Montreal-based Transport DSquare.

    Tyler Durden
    Tue, 11/23/2021 – 18:20

  • US COVID Deaths In 2021 Have Surpassed 2020's Total… Despite Vaccines, Treatments
    US COVID Deaths In 2021 Have Surpassed 2020’s Total… Despite Vaccines, Treatments

    COVID-19 has killed more people in 2021 than 2020.

    The virus was reported as the underlying cause of death (or a contributing cause of death) for an estimated 377,883 people in 2020, accounting for 11.3% of deaths, according to the CDC. As of Monday, more than 770,000 people have died from the coronavirus, according to Johns Hopkins University data. That means over 15,000 more people have died in 2021 than last year from COVID-19 – and there’s still more than a month left.

    This has happened despite the fact that last year no Americans were vaccinated (now 59% of all eligible Americans have had the “life-saving” jab) and some 17% have received booster shots…

    The 2021 U.S. death toll caught some doctors by surprise. They had expected vaccinations and precautionary measures like social distancing and scaled-down public events to curb the spread of infections and minimize severe cases. But, The Wall Street Journal has its own explanation, suggesting lower-than-expected immunization rates as well as fatigue with precautionary measures like masks allowed the highly contagious Delta variant to spread, largely among the unvaccinated, epidemiologists say.

    Among missteps, Dr. Abraar Karan, an infectious-diseases doctor at Stanford University, said, public-health officials failed to effectively communicate that the purpose of vaccines is to protect against severe cases of Covid-19 rather than to prevent the spread of infection entirely, which may have led some to doubt the effectiveness of the shots.

    CDC has an excuse too, claiming that there was a larger undercount of Covid-19 deaths in 2020, when the disease was newer and a scarcity of tests made confirming some infections difficult.

    Deaths remain concentrated in older people (81% of 2020 deaths were among people aged 65 and above, and 69% of the same cohort in 2021).

    Still could be worse (and still could be if this latest trend continues in the US)…

    “The vaccine is not a panacea,” said Ana Bento, an epidemiologist at Indiana University-Bloomington.

    Well that’s pretty clear now, eh!?

    This wasn’t supposed to happen…

    Tyler Durden
    Tue, 11/23/2021 – 18:00

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