Today’s News 26th July 2022

• How Mario Draghi Broke Italy
  How Mario Draghi Broke Italy

  Authored by Thomas Fazi via UnHerd.com,

  Mario Draghi’s defenestration has left the Italian — and indeed international — establishment reeling in horror. This is not surprising. When he was nominated as Italy’s prime minister at the beginning of last year, Europe’s political and economic elites welcomed his arrival as a miracle. Virtually every party in the Italian parliament — including the two formerly “populist” parties that won the elections in 2018, the Five Star Movement and the League — offered their support. The tone of the discussion was captured well by the powerful governor of the Campania region, Vincenzo De Luca (PD), who compared Draghi to “Christ” himself.

  

  Everyone agreed: a Draghi government would be a blessing for the country, a final opportunity to redeem its sins and “make Italy great again”. Draghi, they said, simply by virtue of his “charisma”, “competence”, “intelligence” and “international clout”, would keep bond markets at bay, enact much-needed reforms, and relaunch Italy’s stagnant economy.

  Alas, reality hasn’t exactly lived up to expectations: Draghi leaves behind a country in tatters. The latest European Commission macroeconomic forecast predicted that Italy will experience the slowest economic growth in the bloc next year, at just 0.9%, owing to a decline in consumer spending due to rising prices and lower business investment — a result of rising borrowing and energy costs, as well as disruptions in the supply of Russian gas.

  Italy is also experiencing one of the fastest-growing inflation rates in Europe — which is currently at 8.6%, the highest level in more than three decades. Interest rates on Italian government bonds have also been steadily climbing ever since Draghi came to power, rising four-fold under his watch; today they stand at the highest level in almost a decade.

  And this “polycrisis” has taken its toll on Italian society: 5.6 million Italians — almost 10% of the population, including 1.4 million minors — currently live in absolute poverty, the highest level on record. Many of these are in work, and that number is bound to increase as real wages in Italy continue to fall at the highest pace in the bloc. Meanwhile, almost 100,000 small and medium enterprises (SMEs) are at risk of insolvency — a 2% increase compared to last year.

  So much for “Super Mario”, then. Of course, one could argue that other countries are experiencing similar problems, but it would be a mistake to let Draghi off the hook. He has been one of the staunchest supporters of the measures that led to this situation, having been a driving force in pushing for tough EU sanctions against Moscow — sanctions that are crippling Europe’s economies, while leaving Russia largely unscathed.

  Draghi even boasted about the bold measures adopted by Italy to wean the country off Russian gas — the result being that Italy is now the country that pays the highest wholesale electricity prices in the entire EU. The absurdity of these policies becomes apparent when we consider his attempt to reduce Italy’s dependence on Russian gas by reviving several coal-fired power plants — coal that Italy largely imports from Russia.

  Worse still, Draghi did little or nothing to shield wage-earners, households and small businesses from the impact of these policies. Indeed, the few “structural” measures enacted by his government have all been aimed at promoting privatisation, liberalisation, deregulation and fiscal consolidation — such as opening up for privatisation those few public services that had remained outside of the scope of the market, further “flexibilising” labour, putting private beaches up for public tender for the first time in decades, or attempting to expand taxi services to include ride-sharing operators like Uber, sparking massive protests.

  For anyone who has an inkling of Draghi’s ideology, this is hardly surprising. As I’ve argued before, Mario Draghi is the bodily incarnation of “neoliberalism”. Neither is it surprising that those policies haven’t delivered, given that the EU’s neoliberal logic, based upon privatisation, fiscal austerity and wage compression — which Draghi has played a crucial role in implementing since the early Nineties — is the main reason Italy is in such a mess to begin with. Draghi also further strengthened the EU’s stranglehold over the Italian economy by relentlessly peddling the narrative that Italy desperately needed the European Covid recovery funds to kickstart its economy, and that in order to access those funds it needed to diligently implement the reforms demanded by Brussels.

  Yet in macroeconomic terms, the funds in question are a pittance, and nowhere close to what would be needed to have a meaningful impact on Italy’s economy. But they come with very strict conditionalities. This is ultimately what the EU’s Next Generation EU “recovery fund” is all about: increasing Brussels’s control over the budgetary policies of member states and strengthening the EU’s regime of technocratic and authoritarian control. And who better than Draghi could be trusted with locking such measures in place? As he himself noted, the “reform path” laid down by his government meant that “we have created the conditions for the [EU recovery] work to continue, regardless of who is [in government]” — thus ensuring that future governments wouldn’t stray from the path of righteousness.

  Draghi, however, doesn’t just leave behind him a scorched economy but also a deeply fractured and divided society. He is the man responsible for devising the most punitive, discriminatory and segregational mass vaccination policies in the West, which not only excluded millions of unvaccinated people — including children — from social life, by extending vaccine passports to practically all public spaces, but also restricted many people from working. He also helped make the unvaccinated the target of institutionally sanctioned hate speech, such as when he infamously claimed: “You don’t get vaccinated, you get sick, you die. Or you kill.”

  All this might offer an indication of why a recent poll showed that 50% of Italians weren’t happy with the government’s work. And yet, in spite of these rather unimpressive results, when Draghi initially announced his intention to resign, the Italian establishment went into an apoplectic fit. In what will go down in history as one of the most pathetic demonstrations of the sycophantic conformism of Italian society, almost every professional category you can think of rushed to launch their own appeal begging Draghi to stay on — not only wealthy businessmen, as was to be expected, but also doctors, pharmacists, nurses, mayors, university deans, NGOs, progressive intellectuals and even the CGIL, the country’s largest union.

  Even more pitiably, the Italian media gave massive coverage to several “pro-Draghi demonstrations” — numbering not more than a few dozen people. Perhaps most comically, one of the country’s largest news agencies, Adnkronos, even spoke of how several homeless people had come out to show their support for Draghi. One of these was quoted saying: “Draghi is making the difference. Italy has regained prestige and credibility thanks to him. As a homeless person I can testify to the fact that there’s a greater attention to us now and that’s thanks to Draghi.”

  The Western international establishment also threw all its weight behind Draghi. Everyone from the Financial Times to the Guardian to the EU Commissioner for Economy Paolo Gentiloni came out to explain what a tragedy losing Draghi would be for Italy — and indeed for Europe as a whole. Gentiloni went so far as saying that “a perfect storm” would sweep over the country if Draghi were to leave; while the Guardian limited itself to instructing Italy’s MPs that Draghi “should stay for now”. The New York Times unironically claimed that Draghi’s departure would put an end to the “brief golden period” he ushered in for Italy. Talk of foreign actors meddling in Italy’s affairs.

  So why, in spite of such massive pressures, did three parties effectively pull the plug on his government last week? Part of the explanation lies in the extent to which Draghi had managed to alienate parties such as the Five Star Movement and the League — refusing to engage with them on hardly any of his government’s policies, or to acknowledge even the most timid criticism. On more than one occasion, Draghi made very clear what he considered to be parliament’s role: that of rubber-stamping the decisions taken by government. This is evident also in Draghi’s abuse of the instrument of the confidence vote.

  In his Senate speech last week, Draghi was even more explicit: after saying that he had decided to reconsider his resignation because “that is what the people want”, he essentially told Parliament that he was willing to stay on as premier only so long as the parties would agree not to interfere with any of the government’s future decisions. For many of those present in Parliament, the arrogance and megalomania of Draghi’s speech went a step too far — and moreover some say that Berlusconi was waiting for the right moment to avenge the time he was unseated by Draghi, in 2011, when the latter was president of the ECB.

  However, one shouldn’t overstate the importance of Parliament’s anti-Draghi revolt. Ultimately, Draghi did little more than spell out an uncomfortable truth to the parties: “You have no real power, just accept it.” But that is a truth the political parties aren’t ready to accept. Ultimately, they are unwilling to face the fundamental contradiction between the country’s formal institutional architecture — that of a parliamentary democracy — and what we may call its “actually existing” institutional architecture, in which Parliament and by definition the political parties have almost no power whatsoever, because government itself, in the context of the eurozone, has little if any economic autonomy. The parties know this but are unwilling to admit it (to themselves but most importantly to voters).

  This leaves them in a state of permanent cognitive dissonance, leading to what we may call “the political cycle of the external constraint”. As in “normal” countries, parties vie for consensus on the basis of different electoral platforms — and as often happens, the parties promising “change” happen to win. However, unlike in “normal” countries, the parties that get into government soon find out that they lack the “normal” instruments of economic policy necessary to really change anything in socio-economic terms. In fact, they have little choice but to go along with what Brussels and Frankfurt say, and if they don’t play ball the ECB is always ready to turn up the heat. At that point, if the government doesn’t back down, the ECB will engineer a full-blown financial crisis (think Italy in 2011 or Greece in 2015) — which usually leads the political parties to turn to EU-backed technocrats to fix a problem the EU created in the first place.

  Yet even if the government yields, the growing tension between the requirements of the external constraint and the demands of citizens, which the parties lack the tools to remedy, leads them to turn to technocrats to resolve the impasse, by having them implement the measures the parties don’t want to take responsibility for. Then, at a certain point, usually as new elections approach, political parties feel the need to re-legitimise themselves in the eyes of voters and thus  put the technocratic genie back into the lamp — until the next crisis, which sets a new cycle in motion.

  This is largely the story of what happened between 2018 and Draghi’s ouster, as the Five Star Movement and League went from anti-EU populism to Draghi over the course of just a few years. And the next elections will set in motion a new cycle, possibly hailed by a centre-right Giorgia Meloni-led government. But as the social and economic situation continues to worsen, these cycles are also bound to grow shorter and shorter. A future centre-right government — “populist” or not — would have little or no ability to resolve the crises left behind by Draghi. As always, the shots will be called in Brussels and Frankfurt.

  With the launch of its recent Transmission Protection Instrument (TPI), the ECB has provided itself with a tool that technically allows it to do “whatever it takes” to close euro spreads, thus potentially averting future financial crises. Such intervention, however, is conditional on compliance with the EU’s fiscal framework and with the “reforms” outlined in each country’s “recovery fund” plans — already locked in place by Draghi. But these will do nothing to end the unfolding social and economic crisis; in fact, they are certain to worsen it. In other words, the next Italian government, if it wants to stay financially afloat, will have little choice but to follow the economic diktats of the EU — or else. In such a context, how long before the last remnants of democratic legitimacy in countries such as Italy break down? And what then?

  Ultimately, the next euro crisis is much more likely to break out on the streets of Europe than on financial markets.

  Tyler Durden
  Tue, 07/26/2022 – 02:00

• CIA Director "Very Proud" Of Afghanistan Analysis That Led To Disastrous Withdrawal
  CIA Director “Very Proud” Of Afghanistan Analysis That Led To Disastrous Withdrawal

  Authored by Thomas Lifson via AmericanThinker.com,

  Close enough for government work’ has taken on a whole new dimension in the Biden era with the remarks reportedly delivered by CIA Director William Burns Wednesday at an Aspen Security Forum discussion. Jerry Dunleavy of the Washington Examiner has the story.

  CIA Director William Burns said he is “very proud” of the agency’s analysis in Afghanistan in 2021 despite being blindsided by the swift collapse of the Afghan government and failing to predict how quickly the Taliban would take Kabul. (snip)

  Burns said Wednesday during an Aspen Security Forum discussion that he was “very proud … of the analysis, with all of its imperfections, that we tried to provide to policymakers over the six months leading up to the withdrawal.”

  The CIA director prefaced this by admitting the agency had not predicted the Taliban would take over the country as fast as they did and that “all of us have lessons to learn from experiences like that.” He suggested that the CIA had at least gotten it less wrong than other parts of the U.S. government.

  “As the president has said publicly, none of us anticipated that the Afghan government was going to flee as quickly as it did, that the Afghan military was going to collapse as fast as it did,” Burns said.

  “Having said that, I think CIA at least was always on the more pessimistic end of the spectrum in terms of highlighting, you know, over the course of the spring and the summer, the obvious ways in which the Taliban were advancing rapidly and how this was hollowing out in many ways, not just the political leadership but also the military.”

  Burns shared the CIA’s assessment in July 2021, when he did not say he believed the country would fall in half a year, let alone in less than a month.

  “Less wrong” than other parts of the government is not exactly a standard of excellence.

  How can one be very proud of being “less wrong”?

  

  Official Portrait of William Burns

  In order to learn from failures – and the withdrawal from Afghanistan was a gigantic failure, resulting in American and Afghani deaths and the abandonment of scores of billions of dollars of military equipment making the Taliban the best-armed terrorists in the world – one first must admit failure.

  Then, analyze what were the sources of error and take steps to change practices so as to avoid the same errors in the future.

  It doesn’t sound like any of that is in prospect.

  Tyler Durden
  Mon, 07/25/2022 – 23:25

• China June FX Outflows Are The 2nd Highest Since The Covid Crash
  China June FX Outflows Are The 2nd Highest Since The Covid Crash

  With China’s economy slowing to levels not seen this century…

  

  … and its financial system in danger of disintegration should the housing crash escalate further (which is why in a sharp reversal to months of non-action, overnight Beijing launched a multi-billion fund to support struggling developers), many have been wondering how long will local oligarchs wait before (quietly) pulling their money out of the country.

  Well, according to the most accurate gauge of FX flows, June saw another month of net outflows of around US$9BN, in comparison to inflows of US$2bn in May, the biggest outflow since February and the second biggest outflow in two years going back to the Covid crash.

  

  Cross-border RMB flows suggest net payments of RMB from onshore to offshore, which was consistent with the continued bond outflows.

  

  Here are the main highlights:

  1. In June, there were US $4BN in net inflows via onshore outright spot transactions, and US $2BN inflow via freshly entered and canceled forward transactions. Another SAFE dataset on “cross-border RMB flows” shows that domestic banks made net RMB payments of $15BN from onshore to offshore. A preferred FX flow measure therefore suggests in total $9BN outflows in June, in comparison with $2BN inflows in May.

  2. Current account saw small net inflows: Goods trade surplus translated into $25BN inflows in June, vs $8BN in May. Here Goldman notes that while goods trade surplus rose to a record-high level of $98BN in June, the conversion ratio of goods trade surplus remained low at 26%, vs an average of 39% in the prior six months. Previous analyses suggested the conversion rate tends to decline when CNY weakens and interest rate spreads narrow. According to SAFE, corporates’ FX hedging ratio increased to 26% in 1H 2022, 4% higher than the same period last year. Services trade deficit remained muted at $6BN. Income and transfers account showed an outflow of $16BN in June, partially on seasonality.

  3. Portfolio investment showed outflows in June. Stock Connect data suggests more northbound buying of equities (relative to southbound buying) in the month, and thus on a net basis, translates into around $4BN inflows through Stock Connect in June. China Central Depository & Clearing and Shanghai Clearing House data suggest foreigners continued to reduce their holding of RMB bonds by US$13.9bn in June, vs US$16.3bn outflows in May.

  4. Official FX reserves (released earlier in the month) fell to US$3,071bn in June from US$3,128bn in May. Estimating for FX valuation effects would have lowered FX reserves by $34BN in June, so after adjusting for FX valuation effects, FX reserves declined by US$23bn in June. Note that decline in bond and equity prices might have also contributed to the overall decline in reported FX reserves through asset price valuation effect, although SAFE does not release the exact decomposition of China’s FX reserves.

  Tyler Durden
  Mon, 07/25/2022 – 23:05

• Chinese Investors Shouldn't Be Allowed To Buy US Properties: DeSantis
  Chinese Investors Shouldn’t Be Allowed To Buy US Properties: DeSantis

  Authored by Frank Fang via The Epoch Times (emphasis ours),

  Florida Gov. Ron DeSantis warned about China’s malign influence in the Sunshine State after reports showed that Chinese investors have spent billions of dollars buying U.S. farmland and other real estate.

  

  Calling China the United States’s “No. 1 adversary,” DeSantis told Fox News on July 23 that companies linked to the Chinese Communist Party (CCP) shouldn’t be allowed to buy U.S. properties.

  “I don’t think they should be able to do it. I think the problem is these companies have ties to the CCP, and it’s not always apparent on the face of whatever a company is doing—but I think it’s a huge problem,” he said.

  Foreign buyers from China spent $6.1 billion, more than from any other foreign country, on U.S. homes from April 2021 to March,  according to a recent report from the National Association of Realtors (pdf).

  Chinese buyers spent an average of more than $1 million per transaction—the highest average among foreign purchases—and up from the $710,400 average from the year before. California was the top destination for their purchases with 31 percent, followed by New York (10 percent), Indiana (7 percent), Florida (7 percent), Oklahoma (5 percent), and Missouri (5 percent).

  The report also pointed out that 58 percent of Chinese buyers made all-cash purchases, the third highest behind Canadians (69 percent) and Colombians (65 percent).

  An increasing amount of U.S. farmland is controlled by Chinese buyers. According to data from the U.S. Department of Agriculture, Chinese investors controlled 13,720 acres in the United States as of the end of 2010. That amount increased to 194,179 acres through Dec. 31, 2020.

  DeSantis also said he has taken steps to address some of China’s influence in Florida.

  “I’ve signed legislation to crack down on undue influence from rogue states, including the CCP,” he said. “So for example, we ban Confucius Institutes in the state of Florida—they try to go in higher education, and they try to spread the propaganda.”

  The legislation banning China’s Beijing-funded Confucius Institutes was signed by DeSantis in June 2021, along with other legislation that made stealing trade secrets a third-degree felony punishable by up to five years in prison.

  Florida has “the most robust protections against CCP influence that any state’s done so far,” DeSantis told The Epoch Times at the time.

  The two pieces of legislation went into effect on July 1, 2021.

  Florida last closed a Confucius Institute in September 2019. According to the National Association of Scholars, an education advocacy group, there were a total of 18 Confucius Institutes in the United States as of June 21.

  

  In January, DeSantis took another step to counter the CCP when he announced the Florida Job Growth Grand Fund had awarded nearly $10 million to Osceola County and Valencia College to support semiconductor and other advanced technology manufacturing.

  “The strategic investments we are making today will help bring microchip and semiconductor manufacturing back to our state at a time when the supply chains are more fragile than ever,” he said in a statement announcing the investment. “Certainly, we cannot allow this important industry to become captive by the Chinese Communist Party.”

  In March, DeSantis also unveiled proposed legislation to push back against China. One of the proposals would require state agencies, political subdivisions, and public institutions of higher education to report any gift of $50,000 or more from a foreign government.

  He told Fox News that he aimed to address the problem of his state’s pension funds next.

  “We’re also probably going to do legislation next legislative session about our pension investments, with things that may be linked to the CCP,” he said. “We don’t necessarily have a lot of it, but we want to make sure that we’re cutting ties so that we’re not funding our No. 1 adversary.”

  Tyler Durden
  Mon, 07/25/2022 – 22:45

• US Navy Cancels Participation In "Essential" Annual Black Sea Drills, Citing Ukraine War
  US Navy Cancels Participation In “Essential” Annual Black Sea Drills, Citing Ukraine War

  The United States has canceled its participation in major annual naval drills which were set to take place on the Black Sea, citing the dangerous regional situation amid the ongoing Russian invasion of Ukraine.

  The Sea Breeze 2022 exercise which takes place in July every year was “canceled due to Russia’s ongoing invasion of Ukraine,” according to a US Navy statement given to Newsweek Monday. However, in reality it is only the US military’s full participation in Sea Breeze that was suspended – not the entirety of the exercise itself.

  

  The Navy had previously called the war games “essential” during last year’s drills involving 32 warships, including a large US missile destroyer. Ironically the US Navy cast last year’s drill as crucial for deterring potential Russian aggression against Ukraine. 

  But at the time Moscow had cited as part of its war justification NATO’s military infrastructure expansion into Ukraine. It offered as evidence the increase in military exercises involving Ukraine’s navy and its more powerful Western allies.

  While Washington clearly suspended its participation out of concern that it could create a scenario of inadvertent hostile military exchange with Russia, the Sea Breeze 2022 drills are actually still happening but in smaller, scaled-down form, and also geographically further away from Ukraine’s coast.

  Identifying the Bulgarian Black Sea port cities of Varna and Burgas as playing host to the games, Newsweek describes:

  The drills will include 24 vessels, five planes, and two helicopters, according to the Bulgarian News Agency. Breeze 2022 is the first large-scale NATO exercise since Russia’s latest invasion of Ukraine began.

  No U.S. ships will be involved; though U.S. personnel and aircraft will. Navy P-8A Poseidon reconnaissance planes from Task Force 67 based in Sicily, Italy, and personnel from Task Force 68 in Spain, will take part, the 6th Fleet said last week.

  Breeze will involve 1,390 personnel from 10 NATO nations—including Albania, Belgium, Greece, Italy, Latvia, Poland, Romania and Turkey.

  So while having officially pulled out of the drills that it typically leads, the US is still giving reconnaissance support from a base in Italy during what Newsweek called “a slimmed-down alternative” of the drills.

  Sea Breeze 2022 drills have been scrapped and replaced with a slimmed-down alternative. https://t.co/82f6nFZAij

  — Newsweek (@Newsweek) July 25, 2022

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

  Meanwhile, another source of tension between Russia and the aforementioned Western military allies remains transit into the Black Sea, after during the opening months of the war Turkey warned against the West or any country sending military vessels through the Bosporus and Dardanelles Straits, citing that it would enforce the Montreux Convention of 1936.

  Last week, a shaky deal was finalized that will theoretically allow Ukraine to export its blocked grain exports; however, it’s unclear how soon or even if it will materialize. Some NATO countries have mulled putting in place an international naval coalition to open up a ‘humanitarian’ shipping corridor on the Black Sea – a plan which has thus far been shelved as it would likely ensure head-on conflict with Russia.

  Tyler Durden
  Mon, 07/25/2022 – 22:25

• What To Watch For As China's Politburo Meets
  What To Watch For As China’s Politburo Meets

  By Ye Xie Bloomberg Markets Live commentator and reporter

  China’s Politburo meeting for July, which usually takes place at the end of the month, sets the agenda for the rest of the year.

  While the meeting of the top 25 policy makers rarely delves into specifics, it could provide some guidance on a more-realistic growth target, a continuation of Covid policies and limited support for the struggling housing market. The bottom line is that no major policy overhaul is expected.

  Here are some key areas to look for.  

  • GDP target. The 5.5% GDP target, which was set in March before the latest Covid outbreaks, has long been viewed as unreachable. After the economy grew only 2.5% in the first half, China needs to deliver a growth rate of more than 8% for the second half to hit the target. Earlier this month, Premier Li Keqiang hinted that a lower growth rate is “acceptable” as long as employment and prices are stable. A number of economists, including Bloomberg Economics, have penciled in a growth rate of about 3%. An official nod from the Politburo of a more realistic target won’t be a total surprise.

  • Stimulus plans. A lower GDP target means any large-scale stimulus is not in the cards. Standard Chartered’s economists, including Ding Shuang, expect Beijing to bring forward 1.5 trillion yuan of next year’s local special-bond quota to support investment. Citigroup’s economist Xiangrong Xu and Xiaowen Jin said the Politburo could give hints about other options, including special bonds from the central government, more profit transfer from the PBOC to the Ministry of Finance, or a general budget revision.

  

  • Covid policies. Few expect Beijing to shift away from the Zero Covid policy before President Xi seeks a third term later this year. Still, Beijing may be laying some groundwork for the eventual exit. Over the weekend, China made a rare revelation that all of its leaders received locally-made Covid-19 shots. The move aims to demonstrate the safety and effectiveness of domestic vaccines. The disclosure and renewed campaigns to vaccinate the elderly in multiple cities suggest that “the government may have decided to put in place the conditions required for an eventual exit from COVID-zero,” wrote Standard Chartered’s Ding.

  • Housing market. Property investment fell by 5.4% in the first half of the year, on track for the first annual decline. While the Politburo meeting will most likely reiterate the mantra of “housing is for living, not for speculation,” it could soften that stance by mentioning plans to stabilize property prices and support reasonable home demand, according to Larry Hu from Macquarie.

  Tyler Durden
  Mon, 07/25/2022 – 22:05

• FBI Sabotaged Hunter Biden Evidence To Derail Investigation: Whistleblowers
  FBI Sabotaged Hunter Biden Evidence To Derail Investigation: Whistleblowers

  Several FBI whistleblowers say that the agency’s probe into Hunter Biden was internally sabotaged during the 2020 election in order to derail the investigation, after agents wrongfully deemed verified evidence as “disinformation” to ignore.

  

  According to Sen. Chuck Grassley (R-IA), agents investigating Hunter “opened an assessment which was used by an FBI headquarters team to improperly discredit negative Hunter Biden information as disinformation and caused investigative activity to cease,” adding that his office received “a significant number of protected communications from highly credible whistleblowers” regarding the investigation.

  Grassley added that “verified and verifiable derogatory information on Hunter Biden was falsely labeled as disinformation,” according to the Washington Examiner.

  FBI supervisory intelligence agent Brian Auten opened in August 2020 the assessment that was later used by the agency, according to the disclosures. One of the whistleblowers claimed the FBI assistant special agent in charge of the Washington field office, Timothy Thibault, shut down a line of inquiry into Hunter Biden in October 2020 despite some of the details being known to be true at the time.

  A whistleblower also said Thibault “ordered closed” an “avenue of additional derogatory Hunter Biden reporting,” according to Grassley, even though “all of the reporting was either verified or verifiable via criminal search warrants.” The senator said Thibault “ordered the matter closed without providing a valid reason as required” and that FBI officials “subsequently attempted to improperly mark the matter in FBI systems so that it could not be opened in the future,” according to the disclosures.

  The whistleblowers say investigators from FBI headquarters were “in communication with FBI agents responsible for the Hunter Biden information targeted by Mr. Auten’s assessment,” and that their findings on whether the claims were in fact disinformation were placed “in a restricted access sub-file” in September 2020, according to Grassley, who added that the disclosures “appear to indicate that there was a scheme in place among certain FBI officials to undermine derogatory information connected to Hunter Biden by falsely suggesting it was disinformation.“

  

  Grassley summarized the new allegations in a Monday letter to Attorney General Merrick Garland and FBI Director Christopher Wray.

  The Examiner notes that FBI agent Auten was involved in the Trump-Russia investigation, including interviewing Christopher Steele’s primary source, Igor Danchenko.

  According to Grassley, the “volume and consistency” of the allegations regarding the handling of the Hunter Biden probe “substantiate their credibility.”

  The assessment by Auten in August 2020 was opened the same month Grassley and Sen. Ron Johnson (R-WI) received a briefing from the FBI “that purportedly related to our Biden investigation and a briefing for which the contents were later leaked in order to paint the investigation in a false light,” Grassley said. The senator said Senate Democrats asked for a briefing in July 2020 “from the very same FBI HQ team that discredited the derogatory Hunter Biden information.”

  The FBI inquiry into Hunter Biden reportedly began as a tax investigation, then expanded into a scrutiny of potential money-laundering and foreign lobbying; the DOJ has declined to hand over investigative details. -Washington Examiner

  Thibault, the FBI agent who allegedly quashed the Hunter probe, may have violated the Hatch act in 2020 after making posts on social media which were critical of then-president Donald Trump and former AG William Barr.

  Also notable – Hunter had the numbers of several FBI agents in his iCloud contacts.

  One of Hunters FBI contacts just got a promotion and happens to have authority and responsibility for all FBI intelligence functions… pic.twitter.com/AUlXe5b28K

  — Rosie Memos (@almostjingo) July 11, 2022

  Joe Biden, top Democrats, and virtually the entire mainstream media dismissed the Hunter Biden laptop story as Russian disinformation when bombshell allegations from the New York Post emerged weeks before the 2020 election. In March 2021, the Office of the Director of National Intelligence released a report claiming that figures tied to Russian intelligence promoted “misleading or unsubstantiated allegations” about Joe Biden.

  Grassley to Garland and Wra… by Washington Examiner

  Tyler Durden
  Mon, 07/25/2022 – 21:45

• Cryptos Slide After Reports Coinbase Faces SEC Probe
  Cryptos Slide After Reports Coinbase Faces SEC Probe

  Bloomberg is reporting that, according to three people familiar with the matter, Coinbase is facing a US probe into whether it improperly let Americans trade digital assets that should have been registered as securities.

  

  This is the latest in a series of escalating rhetoric between the US’ largest crypto exchange and various regulators.

  Tl; dr…

  Coinbase to Regulators: Tell us what is a security.

  SEC to Coinbase: We’ll probe you for selling them.

  The latest escalation – that has not been confirmed by the SEC or Coinbase – follows the SEC charging three men, including one of the company’s former employees, of insider-trading (leaking information about which tokens to buy just before they were listed on the platform). Specifically, the SEC did not charge Coinbase with any wrongdoing.

  However, it appears that was not enough as various regulators vie for control of the crypto markets, and the SEC said it had determined that nine of the dozens of digital tokens the men traded were securities – including seven the exchange says it lists.

  In what seems like a pre-emptive strike by Coinbase’s Counsel, the company issued a blog post entitled “Coinbase does not list securities. End of story.” (emphasis ours)

  We cooperated with the SEC’s investigation into the wrongdoing charged by the DOJ today.

  But instead of having a dialogue with us about the seven assets on our platform, the SEC jumped directly to litigation. The SEC’s charges put a spotlight on an important problem: the US doesn’t have a clear or workable regulatory framework for digital asset securities.

  And instead of crafting tailored rules in an inclusive and transparent way, the SEC is relying on these types of one-off enforcement actions to try to bring all digital assets into its jurisdiction, even those assets that are not securities.

  Just this morning (and with no prior knowledge of the timing of the charges discussed), Coinbase filed a petition for rule making with the SEC calling for actual rule making so the crypto securities market has a chance to develop. We worry that today’s charges suggest the SEC has little interest in this most fundamental role of regulators.

  But in the absence of a concrete digital asset securities regulatory framework from the SEC, we remain confident that Coinbase’s rigorous review process keeps securities off Coinbase’s platform. We remain eager to share our perspective with the SEC, especially through a formal rule-making process desperately needed.

  As Bloomberg notes, Gensler has long argued that many cryptocurrencies fall under the regulator’s jurisdiction and that firms offering them should register with his agency.

  However, the SEC mostly hasn’t said specifically which coins are securities, and exchanges decide whether to list an asset.

  When the headlines hit Bloomberg – “Coinbase Faces SEC Investigation Over Cryptocurrency Listings” – tyhat was all the early Asia traders needed (especially given US equity fitures were lower driven by WMT’s ugly earnings cut) and cryptos tumbled with Bitcoin dropping back below $21k…

  

  On a side note – while on the topic of regulators doing their jobs – The Wall Street Journal reported earlier that a bipartisan bill to regulate stablecoins will now be delayed and will not be completed until after the Midterms. Outstanding issues include standards around so-called custodial wallets, one of the people said. Treasury officials pushed for wallet provisions that Republicans were uncomfortable with, the person said.

  No matter what – the war between Coinbase and its ‘regulators’ is only just beginning.

  Tyler Durden
  Mon, 07/25/2022 – 21:18

• 42 Injured In Japan As Menacing Monkeys Chimp Out
  42 Injured In Japan As Menacing Monkeys Chimp Out

  Authorities in Japan’s Yamaguchi city are stepping up measures to confront marauding monkeys that have injured at least 42 people in recent weeks, AFP reports.

  

  To combat the monkey menace (specifically Japanese Macaques), local authorities are turning to tranquilizer guns, after traps they set failed to snare any of the pesky primates. Both adults and children report suffering wounds including scratches and bites.

  “All of Yamaguchi city is surrounded by mountains and it’s not rare to see monkeys,” said one city official from the agricultural department, adding “But it’s rare to see this many attacks in a short period of time.”

  

  “Initially only children and women were attacked. Recently elderly people and adult men have been targeted too,” the official added.

  The city isn’t even sure if the attacks are the work of multiple monkeys or a single aggressive individual. The intruders have in some cases entered by sliding open screen doors, or entering through windows.

  City officials and police have been patrolling the area since the first attacks around July 8, but have yet to snare any monkeys.

  The story has made headlines in Japan in recent weeks, with local residents reporting regular invasions.

  “I heard crying coming from the ground floor, so I hurried down,” one local told the Mainichi Shimbun Daily. “Then I saw a monkey hunching over my child.“

  They better get a handle on this, and fast… as we all know what happens when simians tilt the balance of power.

  Tyler Durden
  Mon, 07/25/2022 – 21:05

• Trump Blasts Biden Over Soaring Prices, Says True Inflation Rate Is "Much, Much Higher" Than 9.1%
  Trump Blasts Biden Over Soaring Prices, Says True Inflation Rate Is “Much, Much Higher” Than 9.1%

  Authored by Tom Ozimek via The Epoch Times (emphasis ours),

  Former President Donald Trump seared President Joe Biden over his handling of the inflationary wave hammering American households, telling rally-goers in Arizona, that the true rate of inflation is far higher than the official rate of 9.1 percent.

  

  Trump made the remarks at a Friday rally in Prescott Valley, where the former president was stumping on behalf of former TV anchor Kari Lake in her bid to become Arizona’s next governor in the upcoming GOP primary election.

  During his speech, Trump touted his own record on the economy, including high job creation and low inflation.

  

  ‘The Worst Inflation’

  Trump told rally-goers that under his tenure, “we had the greatest economy in the history of the world with no inflation,” while adding that “Biden created the worst inflation in 47 years.”

  February 2017, the first full month of Trump in office, saw the headline Consumer Price Index (CPI) inflation gauge at 2.8 percent in annual terms. While the CPI measure fluctuated during his tenure, the highest it ever reached was 2.9 percent in July 2018, while in his final month in office, January 2021, inflation clocked in at 1.4 percent.

  Inflation has climbed steadily under Biden, soaring 9.1 percent year-over-year in June 2022, a figure not seen in over 40 years.

  Commerce Secretary Gina Raimondo told CBS News’ “Face the Nation,” on July 24, that inflation in the United States has “probably” peaked, while acknowledging that factors “out of our control” like another war or pandemic could once again cause price growth to accelerate.

  

  ‘War on American Energy’

  While Trump did not go into detail as to the Biden policies that he thinks have sent inflation soaring, he did single out what he called “Biden’s war on American energy.”

  Soaring energy prices have been one of the key contributing factors to inflation, accounting for around half of the headline inflation figure, according to the Bureau of Labor Statistics.

  Since taking office, Biden has signed a number of executive orders targeting the oil industry, such as revoking the Keystone XL pipeline permit, freezing new oil and gas drilling leases on federal lands and waters, and ending fossil fuel subsidies by certain agencies.

  The price of gasoline is around double what it was when Biden took office, with the president variously blaming a lack of refining capacity, global supply shortfalls set against a sharp post-pandemic rebound in demand, the war in Ukraine, and corporate greed.

  In a bid to lower gasoline prices, Biden has ordered the release of crude reserves from the national strategic reserve, called on U.S. refiners to boost output, and pushed OPEC to pump more oil.

  Read more here…

  Tyler Durden
  Mon, 07/25/2022 – 20:45

• The Japanese Passport Is Still The 'Most Powerful' In The World
  The Japanese Passport Is Still The ‘Most Powerful’ In The World

  Japan has the most powerful passport in the world, according to the Henley Passport Index, with its citizens able to visit 193 countries without a prior visa. South Korea and Singapore come in joint second place, with their citizens able to visit 192 countries.

  As Statista’s Anna Fleck points out, even though the United States is a little further down the list, coming in at 7th place, it still yields considerable power, enabling citizens to enter 186 countries without major restrictions.

  It’s a level of freedom also enjoyed by passport holders in Belgium, New Zealand, Norway, and Switzerland.

  At the other end of the scale, the situation is very different.

  

  You will find more infographics at Statista

  For passport holders in Afghanistan, Iraq and Syria for example, travel is more restrictive to most countries.

  The Afghan passport wields the least power of the ranking, with just 27 destinations permissible visa-free.

  The situation in Iraq and Syria isn’t much better, at 29 and 30 destinations, respectively.

  The Henley Passport Index draws from data from the International Air Transport Authority (IATA), including 199 different passports and 227 different travel destinations.

  Tyler Durden
  Mon, 07/25/2022 – 20:25

• Trudeau Plans To Slash Canadian Fertilizer Use In Similar Move To Netherlands
  Trudeau Plans To Slash Canadian Fertilizer Use In Similar Move To Netherlands

  Authored by Jarryd Jaeger via The Post Millennial,

  Over the past few weeks, farmers across the Netherlands have vehemently turned up in droves to protest the government’s plan to reduce nitrous oxide emissions, arguing it would have disastrous consequences for their business, and eventually, consumers.

  

  The source of their anger is a policy that is not unlike one which Prime Minister Justin Trudeau is seeking to implement in Canada.

  In 2020, the Trudeau Liberals announced that their goal was to reduce emissions from fertilizer, a major producer of nitrous oxide, by 50 percent over the next eight years.

  Fertilizer Canada slammed the government’s “short-sighted approach,” arguing that reducing nitrogen fertilizer use “will have considerable impact on Canadian farmers’ incomes and reduce overall Canadian exports and GDP.”

  In a report compiled by Meyers Norris Penny (MNP), they suggest that regulated fertilizer reduction could cost Canadian farmers $48 billion by 2030 and reduce crop sizes

  By this time, “yield gaps for three major crops are estimated at 23.6 bushels per acre per year for canola, 67.9 bushels per acre per year for corn, and 36.1 bushels per acre per year for spring wheat.”

  As the Toronto Sun reports, fertilizer is typically the most expensive cost for farmers, and they tend to use only as much as is needed.

  Under the plan, farmers will likely be forced to move to using costlier “greener” fertilizer, which in turn translates to higher prices for consumers.

  Read more here…

  Tyler Durden
  Mon, 07/25/2022 – 20:05

• Internet Abuzz After Mysterious Red Lights Spotted In Atlantic Ocean
  Internet Abuzz After Mysterious Red Lights Spotted In Atlantic Ocean

  Photos posted on Reddit claiming to be a swath of red lights seen over the Atlantic has sparked a debate over just what, exactly, is going on.

  “Mysterious red glow seen over the Atlantic, pilot says he’s never seen anything like it,” wrote redditor /mohiemen in the “Damnthatsinteresting” forum.

  

  And of course, what good would pictures of mysterious red ocean lights be without apocalyptic replies?

  

  “If I’m not wrong, the first DOOM game was set in 2022, so this is it. There comes the demons. There is the end…” -/u/ChinuCODM

  The jokes continued for a while…

  

  

  As Interesting Engineering notes, A similar phenomenon was spotted in 2014 by pilot JPC Van Heijst. 

  

  “In the night of 24-25 August 2014, I flew a 747-8 from Hong Kong to Anchorage. While flying over the vast Pacific Ocean, somewhere southeast of the Russian Kamchatka Peninsula, I had one of the strangest experiences of my life. Around five hours into our flight with Japan a long time behind us, we were cruising at a comfortable 34.000 ft with about four and half hours to go towards Alaska. Over the radio, we heard Air Traffic Control talking to other planes that were heading for the US West Coast about diversions due to major earthquakes in San Francisco,” wrote the pilot, who then described what he saw in the sky.

  “I noticed a deep red/orange glow appearing ahead of us, and this was confirmed when I looked at preview of the photos on the back of my camera. There was supposed to be nothing but endless ocean below for hundreds of miles around us. They initially appeared as a distant city or group of typical Asian squid fishing boats, but this did not make sense in this area. The lights we saw were much larger in size than your average city or group of boats, but they also glowed red and orange, instead of the normal yellow and white that cities or ships would produce.”

  “The closer we got, the more intense the glow became, illuminating the clouds and sky below us in a scary orange glow that you would expect with a massive fire on the ground. In a part of the world where there was supposed to be nothing but water.”

  That said, the least-fun answer goes to…

  Redditor Musicide, who points out that the red lights could be “boats equipped with large arrays of red LED panels for Saury fishing.”

  

  Which begs the question – why hasn’t this phenomenon been seen more frequently?

  Tyler Durden
  Mon, 07/25/2022 – 19:45

• Pet Cloning Is Booming In China
  Pet Cloning Is Booming In China

  Authored by Jennifer Bateman via The Epoch Times,

  In recent years, cloning of deceased pets has become a booming business in China, a market that is rapidly growing despite its high price tag, immature technology, and controversial ethics.

  In July 2019, SinoGene, China’s pet cloning bellwether, produced China’s first cloned cat for 250,000 yuan ($37,000). Since then, commercial pet cloning in China is enjoying growing popularity.

  The company just opened a new branch in eastern China’s Jiangsu Province, with the plant occupying an area of 27,000 square meters (6.67 acres) and a total building area of 17,000 square meters (4.2 acres).

  

  The initial high price of cloning was unaffordable for most Chinese. But, cloning costs have gone down. The present price tag for cloning a cat is 118,000 yuan (about $17,500), less than half what it was three years ago, according to a SinoGene salesperson.

  The price of cloning a pet dog, which varies based on the size of the animal, is currently between 168,000 and 198,000 yuan (about $25,000 to $29,000), which is 50 percent less than the 380,000 yuan (about $56,000) it was in April 2019.

  But even the current cloning prices are equivalent to what it would take an average Chinese person 2 to 3 years to earn.

  In the past few years, SinoGene has successfully delivered more than 300 cloned pets, including approximately 100 cats and 200 dogs. In addition, more than 1,000 customers have preserved pet cells with SinoGene for future cloning needs.

  The pet cloning market in China is becoming highly competitive. In addition to Hino Valley, another pet cloning company is PanGene, which is well-known for cloning Purebred Tibetan Mastiff dogs. Some commercial catteries and kennels have also preserved cell lines from cats and dogs and provide cloning services in order to preserve the best breeds.

  According to the 2021 white paper on China’s pet industry, the total number of pet dogs and cats in China exceeded 112 million last year, and in urban areas across the country, the pet cat and dog consumption market increased from 206.5 billion yuan (about $30.56 billion) in 2020 to 249 billion yuan (about $36.85 billion) in 2021, an increase of 20.6 percent.

  The pet market in China has grown further during the COVID-19 pandemic, as pets provide important emotional support to people during difficult times.

  Taobao, China’s largest e-commerce platform, said in a report last year that in February, the number of live broadcasts of pets on Taobao increased by 375 percent year-on-year, with about 1 million people watching them every day.

  Mixed Feelings When Owners See Their Cloned Pets

  Stories from cloning companies and the media reveal that most people chose to clone their pets because they hoped to retrieve lost memories and companionship. However, cloned animals, no matter how sophisticated the technology, are not guaranteed to be 100 percent identical in appearance. Moreover, the cloned pet does not possess any past memory of its “parent.” It is essentially a different individual.

  In July 2019, China’s first cloned cat, whose name was Garlic, was born. But its owner, Huang Yu, admitted that he was a little disappointed when he saw a video of the the animal. This cloned cat and the original “Garlic” looked different in many ways, and the black garlic clove-shaped markings were missing from the cat’s jaw, even though a third-party agency confirmed that the DNAs of the two cats were identical.

  More importantly, the new Garlic did not respond to him like an old friend as he had expected it would when they first met.

  Zhang Yueyan, the owner of a cloned dog named Nini, is much more tolerant, even though little Nini’s fur is much darker than that of the original Nini. Zhang still hopes that little Nini can be like the original Nini, and accompany her in her life for another 19 years.

  Unavoidable Ethical Issues

  Currently, there are no laws in place to regulate pet cloning or pet surrogacy; still, there are moral and ethical pressures.

  Dr. Yang Guiyuan, a Japan-based researcher in the veterinary clinical and pathology field for many years, told The Epoch Times that the physical body of a human or animal has a higher and more microscopic aspect. Westerners call it “soul” and Chinese call it “Yuanshen” or primordial spirit. From this point of view, the cloned animal, no matter how similar its appearance, is an independent life.

  “In addition, scientific and technological means may introduce genetic defects.  If the cloned animal keep reproducing for a few generations, will it end up producing a genetic monster in the end? It’s hard to say,” Yang said.

  As of today, there are still many problems in cloning technology that need to be resolved. The low success rate also increases the number of animals needed in the cloning process, and some of these animals may be subjected to inhumane treatment.

  

  For example, when China’s first cloned cat was finally produced, at least 40 eggs from 5 cats were used and implanted into 4 surrogate cats. Retrieving eggs from the mother cats and implanting embryos into the surrogate cats all involved surgical procedures.

  Presently, internationally accepted applications of animal cloning are mainly in the fields of basic research and biomedicine, or to save endangered species.

  Pioneers in Animal Cloning Exit the Practice

  Unlike to China’s booming pet cloning business, Roslin Institute in the UK, which produced the world’s first cloned sheep, Dolly, no longer does animal cloning. In the United States, BioArts, a company in Northern California, offered dog cloning services in 2008, but closed the business one year later.

  “We do not clone animals any more. The technique has a very low success rate. Dolly was the result of many months of research involving a highly skilled team,” Roslin Institute explained on its website.“What are the risks associated with cloning? Cloned embryos are more likely to be lost during pregnancy than normal embryos, which accounts for the low success rate of cloning. Large Offspring Syndrome (LOS) can also affect some cloned animals. Animals with LOS have growth defects and are considerably larger at birth than animals resulting from natural matings.”

  In an exclusive interview with UK media Mirror in April 2014, Lou Hawthorne, founder and CEO of Bioarts, revealed that the reason he quit the cloning business was that he was sickened over the suffering it causes thousands of dogs each year.

  “I couldn’t care less if the cloning business world collapses, but I care about suffering.” Lou told the Mirror’s reporter.

  Dr. Yang believes that the commercialization of pet cloning in China is a practice that violates the laws of nature and ethics for financial benefits. These people think they can manipulate life casually, and have no respect for life, he said.

  Tyler Durden
  Mon, 07/25/2022 – 19:25

• 'Great Resignation'? Here's Why People Are Quitting Their Jobs
  ‘Great Resignation’? Here’s Why People Are Quitting Their Jobs

  With employees in the United States quitting their jobs voluntarily at a rate 25 percent higher from December 2019-May 2022 compared to pre-pandemic levels, employers and some entire industries are scrambling to fill the substantial gaps being left behind.

  

  Research in Australia, Canada, India, Singapore, the United Kingdom and the United States by McKinsey & Company reveals that of employees that chose to quit their jobs from April 2020 to April 2022, 65 percent did not so far return to the same industry.

  As Statista’s Martin Armstring details in the infographic below, the survey also revealed the most common reasons cited by those handing in their notice.

  

  You will find more infographics at Statista

  At the top of the list are the classics: “Lack of career development/advancement” and “inadequate compensation”.

  The importance of a good boss is also highlighted, however, with the third most common response being uncaring or uninspiring leaders.

  A quarter of respondents said that a lack of workplace flexibility was also a factor – an issue acknowledged with varying degrees of enthusiasm and success since swathes of the global workforce realized that working from home was also possible during lockdown.

  Tyler Durden
  Mon, 07/25/2022 – 19:05

• Adam Schiff: J6 Committee Could Subpoena Ginni Thomas About Justice Thomas
  Adam Schiff: J6 Committee Could Subpoena Ginni Thomas About Justice Thomas

  Authored by Jonathan Turley,

  There was a telling exchange today on CBS’ Face the Nation when host Margaret Brennan asked J6 Committee member Rep. Adam Schiff (D-CA) about issuing a subpoena of Ginni Thomas, the wife of Supreme Court Justice Clarence Thomas.  I have previously written how the calls for Justice Thomas to resign or be impeached are wildly out of line with ethical and constitutional standards.

  What was interesting, however, was how Schiff justified such an unprecedented subpoena: to question her about one of Thomas’ opinions dealing with the authority of Congress to investigate what occurred on that day.

  

  The House was given the messages by Ginni Thomas previously, including 29 messages from November 2020 to mid-January 2021. They were part of over 2300 text messages sent to the Committee by White House chief of staff Mark Meadows. That turning over of the messages were the subject of press coverage in December 2021 before the January 19, 2022 opinion with the sole dissent of Thomas.

  Here is the exchange:

  MARGARET BRENNAN: Your colleague Liz Cheney was on two other networks this morning, and she said that you all are discussing a potential subpoena for Ginni Thomas, who is married to Supreme Court Justice Clarence Thomas. Are there lines that shouldn’t be crossed here when it comes to the Supreme Court? Because one of the objections to the premise of a subpoena here is that it- it sets a dangerous precedent by putting the spouse of a justice in this political forum.

  REP. SCHIFF: There are lines that shouldn’t be crossed, but those lines involve sitting Supreme Court justices, not presiding or appearing or taking action in cases in which their spouse may be implicated. And in this case, for Clarence Thomas to issue a decision, in a case, a dissent in a case where Congress is trying to get documents, and those documents might involve his own wife, that’s the line that’s been crossed. And I think, for Congress to be looking into these issues, looking into conflict of interest issues. But here, looking into issues, whether it involves the wife of a Supreme Court justice or anyone else, if they have information or role in an effort to overturn an election. Yes, they’re not excluded from examination.

  MARGARET BRENNAN: It sounds like you’re saying you favor that subpoena?

  REP. SCHIFF: Well, if she has relevant information or investigation, we hope she comes in voluntarily. But if she doesn’t, then we should give that a serious consideration. And, yes, I think those that we decided have important enough information should be subpoenaed.

  Schiff clearly states that the interest of the Committee is to use Thomas’ spouse to explore a prior opinion in an election-related case. Rep. Liz Cheney (R., Wy) has also stated that the Committee might subpoena Ginni Thomas.

  Various politicians and pundits have suggested that Thomas could be impeached for violating the Judicial Code of Ethics because he voted on a challenge to the Commission obtaining White House messages and emails. (For the record, I publicly stated that the Commission should prevail on those demands). In January, the House won an 8-1 victory before the Supreme Court, which rejected Trump’s privilege objections to the release of White House materials. There was only one dissenting vote: Thomas.

  However, the justices have long insisted that they are not compelled to follow the Code of Judicial Conduct.  I have long disagreed with that view and have called for Congress to mandate the application of the code to the Court. Yet, the Court has maintained that such conflict rules are not mandatory and many have refused to recuse themselves in circumstances that were flagged as possible violations.

  Yet, Schiff stripped away the pretense of subpoenaing Ginni Thomas about her messages to the White House. This is about her husband, not her support for the election challenges or what occurred on January 6th.

  A well-known Republican activist and Trump supporter, Thomas encouraged then-White House chief of staff Mark Meadows to pursue legal and legislative challenges to what she viewed as a stolen election.

  The reason that Ginni Thomas’ messages were seized is not because she was a key figure in the investigation but that the Commission has demanded any messages that deal with such challenges or the rally — a scope that has been criticized as overbroad. Congress then leaked the messages and the media did the rest.

  There is no evidence that Ginni Thomas ever encouraged violence or was even present at the Capitol during the riot. Thomas said that she attended the Ellipse rally on Jan. 6 but left early, before Trump spoke, and never went to the Capitol.

  On a committee that was tasked with uncovering what occurred on January 6th, Schiff is now saying that the committee’s jurisdiction would extend to what the Supreme Court did a year later. That is more than a case of “mission creep.” It is radical departure from past practices and long-standing interbranch comity. It could create dangerous precedent as members use such committees to investigate jurists on the motivations or communications leading to their opinions.

  Once again, members like Schiff appear to be tossing caution to the wind to appeal to core constituencies. How exactly will Schiff and the Committee investigate Justice Thomas’ motivations and actions? It would have to demand disclosures of his spousal communications. It would also threaten perjury or contempt charges if Ginni Thomas is not accurate in her details.

  The use of the J6 Committee in this way would reaffirm the criticism of the committee as a partisan exercise. The fact that Cheney has joined in such calls only highlights the absence of even a modicum of balance on the committee. It would also constitute one of the most intrusive acts ever taken against the Court outside of a formal impeachment proceeding.

  It is a threat that should be universally condemned and immediately withdrawn.

  Tyler Durden
  Mon, 07/25/2022 – 18:45

• Uber-Bear Mike Wilson Is Almost Ready To Turn Bullish… Except For One Thing
  Uber-Bear Mike Wilson Is Almost Ready To Turn Bullish… Except For One Thing

  One week ago, before he hinted at turning bullish as a result of record bearish sentiment when he said that while he anticipates poor fundamentals for H2 2022, “sentiment says stocks/credit rally in coming weeks”, Bank of America’s Chief Investment Strategist Michael Hartnett – who until now had proven himself as Wall Street’s most bearish and most accurate analyst – predicted that the Fed will pivot in November, effectively unleashing the next bull market in early 2023 (soaring commodity prices notwithstanding), and naturally the big trade on Wall Street remains frontrunning said pivot because by the time Powell capitulates much of the reversal will already be in the books.

  More importantly, with Hartnett – who recently said “At SPX 3600 Nibble, At 3300 Bite, At 3000 Gorge” – becoming tactically bullish, that meant that Morgan Stanley’s in-house Michael (that would be chief US equity strategist Wilson) had seemingly assumed the title of biggest Wall Street bear. Or did he? After all, the last time we heard from him he was warning stocks would plunge to 3,000 as the “slowdown was even worse than he expected.”

  Well, in his latest Weekly Warm-up Note (available in its entirety to professional subscribers) which was written somewhat cryptically for the clearly spoken Wilson, he echoes the latest observations from Goldman’s flow trading desk, namely that “with equity markets seemingly shrugging off bad news on the economy and earnings, we explore the idea that it may be trying to get ahead of the eventual pause by the Fed that is always a bullish signal.” So yes, seemingly even Wilson has decided that it is more prudent to chase momentum upward during this particular rally, while keeping his bearishness on the backburner. However, unlike some of his bearish colleagues, Wilson hedges that “the problem this time is that the pause is likely to come too late.”

  Let’s deconstruct Wilson’s argument which begins with a question: “Is the Market Trying to Price a Fed Pause?” (incidentally a question which we answered one month ago in “Fed Rate-Hikes To End This Year, Followed By 3% Of Rate-Cuts & QE“.)

  According to Wilson, since the June lows, the US equity market has been range trading between those lows and 3950. However, this past week the S&P 500 peeked its head above the 50 day moving average, touching 4000 for a few hours. And while Wilson naturally is unconvinced this is anything but a bear market rally, “it does beg the question is something going on here we are missing that could make this a more sustainable low and even the end to the bear market?” Of course, we posed that exact same question one month ago, when quoting a Goldman trading who observed the “First Real Buying In 3 Weeks” and we asked if this is “The Start Of The Next Big Move Higher” (so far we are certainly higher compared to the depths of June if nowhere near the January all time highs).

  Going back to Wilson, he writes that from a fundamental standpoint, he is “more convicted in our view that bottoms up NTM S&P 500 earnings estimates are too high and have meaningful (i.e. 10%+) downside from the recent peak of $240. So far, that forecast has only dropped by 0.5% making it difficult for us to agree with the view the market has already priced it.” Of course, Wilson concedes, he could also be wrong about the earnings risk and perhaps the current $238 is an accurate reflection of reality. However, given the extraordinary deterioration in earnings revision breadth, he still thinks the evidence is building for his view (the recessionary one even though Morgan Stanley still cowardly refuses to make a recession its base case) to play out over the next several months.

  

  As earnings get worse, financial conditions are only getting tighter with the ECB finally joining the hiking party last week with it’s own 50bps move, the largest in 22 years. Here Wilson, just like us, couldn’t help but be reminded of the infamous 25bps hike by the ECB in July 2008, when Europe was already in a recession and just 2 months before the Lehman bankruptcy and onset of the Great Financial Crisis, not to mention that other hike just months before the peak of the European sovereign debt crisis, which only culminated after Draghi vowed to do whatever it takes.

  

  Last week’s move was eerily similar in many ways. Obviously, the rationale for raising rates now is to join the fight against inflation while also defending the Euro against the US Dollar. However, as Wilson correctly notes, the battle on inflation should have begun a year ago, not now when demand destruction is already well developed and likely to take care of inflation on its own. If that wasn’t enough, the ECB’s rate hikes in 2011 also look unnecessary in hindsight with recession likely already baked before those two 25bps increases. Could this time be different? It seems unlikely with Eurozone GDP growth fast approaching zero and likely to move into negative territory soon.

  And so, with most of Morgan Stanley’s leading indicators on growth rolling over hard, Wilson thinks this is the more important variable to watch for stocks at this point rather than inflation or the Fed’s reaction to it.

  

  Having said that, he does agree with the narrative that inflation has likely peaked from a rate of change standpoint with commodities as the best real time evidence of that claim:

  We think the equity market is smart enough to understand this too and more importantly that growth is quickly becoming a problem. Therefore, part of the recent rally may be the Equity market looking forward to the Fed’s eventual attempt to save the cycle from recession and with time running short on that front, that opportunity is now or never.

  Of course, there are a few shades of gray between “now” and “never”, and when looking at past cycles, Wilson admits that there is always a period between the Fed’s last hike and the eventual recession–i.e. the Fed is typically long done raising rates before the recession arrives. This is in sharp contrast to the European Central Bank which was still tightening when the last two recessions began. More importantly, this period between the last Fed hike and the eventual recession has been a good time to be long the S&P 500 and many stocks/sectors.

  

  In short – and as we have been saying since last December – the Equity market always rallies when the Fed pauses it’s tightening campaign prior to the oncoming recession. In some cases, the rally is so powerful, the S&P 500 usually makes a new all time high before everything comes crashing down. The point that Wilson wants to make here is that “IF the market is starting to think the Fed is about to pause rate hikes after next week’s move, this would provide the best fundamental rationale for why equity markets have rallied so sharply over the past few weeks and why it might signal a more durable low.”

  Or, a simple way of saying all of the above is that someone read our article from last month “Fed Rate-Hikes To End This Year, Followed By 3% Of Rate-Cuts & QE” and traded on it…

  So why would markets be thinking the Fed is about to pause or slow rate hikes, as Eurodollar futures clearly are, pricing in almost one full hike in Q1 2023…

  

  … or even end QT prematurely, as former NY Fed guru Marc Cabana said will happen?

  Part of the reason is the fact that the Fed is already having their desired effect on demand and so it seems quite plausible inflation could look considerably lower in 6 months time. Second, the bond market is sending similar signals with rate cuts now getting priced as early as the Fed’s early February 2023 meeting (see above) and the terminal rate and 2 year yields starting to fall as today’s auction showed. This is also in line with Wilson’s own thinking and why he has been bullish on long duration Treasuries over the past several months.

  

  Of course, lower back end rates (both nominal and real) can also be interpreted as good for longer duration growth stocks, particularly relative to value/cyclicals. This, Wilson notes, “helps explain not only the rally in the S&P 500 but also the relative outperformance of the Nasdaq and other growth indices relative to value stocks.”

  Putting it all together, Wilson agrees with the overarching case for a Fed-pivot driven rally… but there is one problem. As he explains, “the problem with this thinking beyond a near term rally is that it’s unlikely the Fed is going to pause early enough to kick save the cycle.” He explains why:

  While we appreciate that the market (and investors) may be trying to leap ahead here to get in front of what could be a bullish signal for equity valuations, we remain skeptical that the Fed can reverse the negative trends for demand that are now well established, some of which have nothing to do with monetary policy–i.e. payback in demand and out of sync cost structures with too little pricing power to offset at this point.

  Furthermore, the demand destructive nature of high inflation that is presenting itself today will not easily disappear even if inflation declines sharply because prices are already out of reach in areas of the economy that are critical for the cycle to extend–i.e. housing, autos, food, gasoline and other necessities.

  Here Wilson reminds us of a key thing which the high school intern in charge of White House economic policy may want to note, namely that “lower inflation does not mean negative price changes for many of these items and to the extent deflation does return via discounting to drive demand, rest assured that will not be good for profit margins and/or earnings revisions.”

  Adding insult to injury, the survey shows consumer intentions to spend over the next 6 months continues to deteriorate rapidly, even for things like travel and leisure, the area of spend that was supposed to offset the obvious payback on goods spending that is now well established.

  Moreover, in speaking with his industry analysts, Wilson has encountered increasing concern about deteriorating volume demand in many categories of discretionary spend and discounting returning.

  Finally, and most ominously, consumer delinquencies are picking up too in several categories of spend with AT&T mentioning this specifically for cell phone bills which tends to be one of the last things people stop paying. Car payments are the other one that is last to stop and here too Morgan Stanley is hearing hearing about rising delinquencies from recent buyers who borrowed more than they should have been allowed based on inflated incomes from the stimulus checks.

  

  And then there is the market: In addition to 2 year UST yields and the terminal rate falling, the 2s-10s curve remains inverted by approximately 20bps, the most in nearly two decades. And while the bond market has been preoccupied with the generationally high inflation readings and the Fed’s reaction to it, Wilson thinks it is now starting to contemplate the impact of both on growth.

  In that regard, the bond market is catching up to the equity market. Ironically, the equity market is taking the lower yields signal as a positive for stocks, particularly growth stocks as it starts to give credibility again to the soft landing scenario after having moved away from that view so aggressively in June.

  Morgan Stanley’s take is that this view could persist into August if the Fed throws the markets a bone next week and insinuates it has done enough for now. While that’s not the bank’s house call or view for next week’s meeting, anything can happen in what has been an extremely unpredictable Fed that virtually no one has gotten right this year as they deviated so much from their “guidance” due to inflation surprising so much on the upside.

  Even Wilson’s more hawkish view than consensus at the beginning of the year, which was the primary feature of Wilson’s Fire and Ice narrative, was far surpassed as the Fed was forced to play catch up in a way that was totally mispriced by markets just 6 months ago. We can’t say that today with the curve inverted and the terminal rate still 175 basis points above the current Fed Funds rate.

  As a final comment for equity investors to consider, Wilson asks if the Fed was so off on its guidance this year due to the surprising economic and inflation outcome, perhaps this is a precursor to how bad company guidance for the year will turn out to be.

  The bottom line for the Uber-bearish strategist is that “the Fed is looking more like the ECB this cycle in that they are likely to still be tightening when recession arrives this time making the window to trade the pause much shorter than usual with less upside as well.” Unless, of course, one successfully frontruns the crowd and buys when everyone else is selling just as the Fed capitulates and pivots, sending risk assets into orbit if only for a few seconds…

  Much more in the full note from Wilson available to pro subscribers in the usual place.

  Tyler Durden
  Mon, 07/25/2022 – 18:44

• Canadian Pastor Arrested For Holding Church Services During COVID Wins Legal Victory
  Canadian Pastor Arrested For Holding Church Services During COVID Wins Legal Victory

  Most of the narratives surrounding the covid pandemic and the lockdowns were illogical and faulty, based in propaganda rather than science and fear instead of reason.  One key issue that was never addressed by lockdown proponents was the question of “risk.”  Doesn’t every individual have a natural right to take whatever risks they see as acceptable when it comes to their own health?  If a group of people want to go to a church service and take the risk that they might get covid, don’t they have the right to do that?

  Of course, lockdown supporters will claim that those refusing to comply with mandates don’t have a right to put “other people at risk,” but how much risk from covid is there really?

  According to dozens of independent and peer reviewed studies from around the world, the actual “risk” of death from covid is limited.  Studies indicate that the median Infection Fatality Rate (or Ratio) of covid is between 0.23% and 0.27% of the population.  This is the contrary mainstream science that the media rarely talks about.

  So, 99.7% of all people (according to the science) on average face no mortal risk from the worst variants of covid.  IFR is in most cases the most accurate statistic on the death rate of a virus because it accounts for asymptomatic cases.  Case Fatality Rate (CFR), the stat often used more by the mainstream media, does not.  Even the World Health Organization notes on its website that:  “The true severity of a disease can be described by the Infection Fatality Ratio…”

  When comparing covid to a virus like the Spanish Flu, which killed over 50 million people worldwide according to the CDC, one would think that there would be a measure of apprehension when it comes to violating the freedoms of the public.  Nope.  The relatively low level of risk associated with covid made no difference to governments or global institutions.  They charged forward like bulls in a china shop breaking everything in their path and treating unilateral “mandates” as if they were laws. 

  Luckily, the tide has been slowly turning back and resistance to lockdowns and vaccine passports has been more pervasive than many officials seem to have expected.  In most conservative states within the US, the lockdowns ended quickly, within a few months in many cases, once it was realized that covid was not the population killer that the media, the CDC and the WHO had made it out to be.  Leftist blue states and countries like Canada were not so lucky.  

  Canadian Pastor Artur Pawlowski experienced the full brunt of medical authoritarianism first hand when, on May 9, 2021, he sought to hold a church service for his congregants only to be arrested along with his brother Dawid Pawlowski for “inciting an in-person gathering.”  

  

  In October of 2021, a Judge ruled that the Pastor was in violation of a covid health order.  The punishment was bizarre and Orwellian; he was heavily fined, and whenever he spoke publicly about covid he would be required to recite a government-approved statement saying that “most medical experts support social distancing, face masks, and vaccines.”  When the court says “most experts,” they are of course referring to government paid “experts.”  There are many medical experts that disagree with the efficacy of the lockdowns and other mandates.  

  Researchers, with over 18,000 studies and after four levels of screening, found 24 papers that would provide a stringent comparison of lockdown effects. They found that lockdowns reduced covid mortality in the United States and Europe by only 0.2 percent on average. They also looked at forced shelter-in-place, which reduced mortality by only 2.9 percent on average.

  The researchers had this final conclusion:

  “While this meta-analysis concludes that lockdowns have had little to no public health effects, they have imposed enormous economic and social costs where they have been adopted. In consequence, lockdown policies are ill-founded and should be rejected as a pandemic policy instrument.”

  This week an appeals court ruled that the Alberta Health Agency’s order prohibiting “illegal public gatherings” was “not sufficiently clear and unambiguous” in connection to the Pawlowskis.

  “The Pawlowskis’ appeals are allowed. The finding of contempt and the sanction order are set aside. The fines that have been paid by them are to be reimbursed,” the three-member panel proclaimed in a 16-page ruling. 

  Pawlowski grew up under communist rule in Poland and this is likely the root of his refusal to comply.  He’s seen all of this before, including the typical religious persecution inherent in communist societies. 

  The legal victory is a clear reminder that the fear surrounding potential crisis events is often exploited and abused by governments to erase personal freedoms and legal protections.  It is these moments in history when individual rights are MORE important, not less, because whenever there is a crisis the worst types of tyrants tend to come out of the woodwork. 

  Tyler Durden
  Mon, 07/25/2022 – 18:25

• Why Job Turnover Is So High For Gen Z And Millennials
  Why Job Turnover Is So High For Gen Z And Millennials

  Authored by Kimberlee Josephson via The American Institute for Economic Research,

  Jonathan Haidt’s latest essay, “Why the Past 10 Years of American Life have Been Uniquely Stupid,” calls attention to concerns related to how Gen Z has been raised.

  According to Haidt (and previously fleshed out in his insightful text The Coddling of the American Mind), Gen Z has received the most structure and attention throughout their upbringing, in comparison to previous generations, and the pre-organized playdates, ongoing extracurriculars, and soft-handed critiques have inhibited their ability to develop grit and gumption.

  

  Haidt is not alone in raising these concerns. Autonomous play and independent study are largely foreign concepts to Gen Z, which is why skillsets related to critical thinking and social interaction warrant attention.

  CGS notes that, in reference to a survey conducted by the Society for Human Resource Management (SHRM), competencies lacking for Gen Z include: problem solving and creativity, the capacity to deal with complexity and ambiguity, and communication efficacy. And, according to another survey by SHRM, Gen Z is aware that they are ill-prepared.

  While Haidt’s essay places the blame on older generations for not equipping Gen Z and calls attention to the implications that this has for the future of democracy (an important point since Gen Z is proving to be a prominent voting bloc), it is also worth noting the economic impact it may have as Gen Z enters into the workforce and Baby Boomers retire out.

  The size of the Gen Z cohort will soon surpass that of Millennials who currently make up a bulk of the US working populace, and so businesses must be mindful of the expectations and accommodations necessary for their new recruits.

  Millennials and Gen Z were reared in a child-centered society and have been programmed for times of transition and miniature milestones, with hand-holding along the way. To put things in perspective, only five years ago, it was documented that parents were joining in on their child’s job interviews and companies even created “Bring your Parent to Work days.”

  Gen Z’s childhood has most certainly influenced their professional pursuits and workplace preferences, but now cognitive dissonance is setting in as forms of recognition and connection are lacking in post-pandemic work environments. Consequently, job satisfaction matters now more than ever and firms must be people-oriented since, no matter how important or inspiring the task or organizational purpose, it won’t matter if employees don’t feel vested in it or prepared for it.

  It must also be noted that young workers have not only been hampered by parents and pandemics regarding their workplace readiness, but also show signs of greater anxiety and stress due social media use—and this is also spilling over into the workplace.

  As digital natives, Gen Zers have not only been exposed to a greater degree of the world’s problems but also the achievements, accomplishments, and accolades of others, thereby creating new pressures to keep up. Nowhere is this more apparent than on LinkedIn, which is Gen Z’s preferred professional platform.

  LinkedIn has booming membership rates among younger cohorts of workers, and activity online has been surging with early entrant employees anxious to signal their success or share their job market news. And there is a lot of sharing going on given that 40 percent of LinkedIn users reportedly change their employment status every four years.

  Notifications highlighting employment shifts normalize this trend, but tales of turnover are troublesome for organizations due not only to costs of recruitment or difficulties dealing with vacancies, but also since employee upheaval can have a negative impact on company culture and inspire others to follow suit.

  As new research featured in Fast Company shows, “Millennials and Gen Z are currently proving to be the driving force behind the Great Resignation.” These generations are not shy about chasing new opportunities, and this is particularly true of Gen Z, notes US News.

  The study by software and data analytics company Adobe found that more than half of Gen Z respondents reported planning to seek a new job within the next year. The generation also reported being least satisfied with their jobs, 59%, and with their work-life balance, at 56%. Nearly two-thirds of them, 62%, said they felt the most pressure to work during “office hours,” even though they said they do their best work outside of normal office hours.

  While Haidt’s essay noted above depicts the dangers of too much online activity and calls for raising the internet access age requirement, it is too late for Gen Z who have been encouraged to create LinkedIn profiles as part of the job hunt and are expected to have a virtual presence with the brands and organizations they are affiliated with.

  So, with this in mind (and in being wary about inviting further government interference in the digital realm), companies must be on the lookout for those workers who are not only in need of skill development but also require a greater connection to the real world rather than virtual world.

  Managers must be forthright and inquire about employee needs as well as future ambitions to rein in temptations for exploring external prospects, and organizations must dedicate more time to nurturing the company culture and cultivating human connections to ensure both engagement and empowerment.

  As stated by Thomas Sowell, in Wealth, Poverty, and Politics, “Transferring the fruits of human capital is not as fundamental as spreading the human capital itself.”

  *  *  *

  Reprinted from the Foundation for Economic Education

  Tyler Durden
  Mon, 07/25/2022 – 18:05

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