Mar 26

Today’s News 26th March 2023

  • Johnstone: US Officials Really, Really Want You To Know The US Is The World's "Leader"
    Johnstone: US Officials Really, Really Want You To Know The US Is The World’s “Leader”

    Authored by Caitlin Johnstone via Medium.com,

    In response to questions he received during a press conference on Monday about Xi Jinping and Vladimir Putin cementing a “new era” in strategic partnership between China and Russia, the White House National Security Council’s John Kirby made no fewer than seven assertions that the US is the “leader” of the world.

    Here are excerpts from his comments:

    • “The two countries have grown closer. But they are both countries that chafe and bristle at U.S. leadership around the world.”

    • “And in China’s case in particular, they certainly would like to challenge U.S. leadership around the world.”

    • “But these are not two countries that have, you know, decades-long experience working together and full trust and confidence. It’s a burgeoning of late based on America’s increasing leadership around the world and trying to check that.”

    • “Peter, these are two countries that have long chafed, as I said to Jeff — long chafed at U.S. leadership around the world and the network of alliances and partnerships that we have.”

    • “And we work on those relationships one at a time, because every country on the continent is different, has different needs and different expectations of American leadership.”

    • “That’s the power of American convening leadership. And you don’t see that power out of either Russia or China.”

    • “But one of the reasons why you’re seeing that tightening relationship is because they recognize that they don’t have that strong foundation of international support for what they’re trying to do, which is basically challenge American leadership around the world.”

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

    The illusory truth effect is a cognitive bias which causes people to mistake something they have heard many times for an established fact, because the way the human brain receives and interprets information tends to draw little or no distinction between repetition and truth. Propagandists and empire managers often take advantage of this glitch in our wetware, which is what’s happening when you see them repeating key phrases over and over again that they want people to believe.

    We saw another repetition of this line recently at an online conference hosted by the US Chamber of Commerce, in which the US ambassador to China asserted that Beijing must accept the US as the “leader” of the region China happens to occupy.

    US empire managers are of course getting very assertive about the narrative that they are the world’s “leader” because that self-appointed “leadership” is being challenged by China, and the nations which support it with increasing openness like Russia. Most of the major international news stories of our day are either directly or indirectly related to this dynamic, wherein the US is struggling to secure unipolar planetary domination by thwarting China’s rise and undermining its partners.

    The message they’re putting out is, “This is our world. We’re in charge. Anyone who claims otherwise is freakish and abnormal, and must be opposed.”

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

    Why do they say the US is the “leader” of the world instead of its “ruler”, anyway? I’m unclear on the difference as practically applied. Is it meant to give us the impression that the US rules the world by democratic vote? That this is something the rest of the world consented to? Because I sure as hell don’t remember voting for it, and we’ve all seen what happens to governments which don’t comply with US “leadership”.

    I’m not one of those who believe a multipolar world will be a wonderful thing, I just recognize that it beats the hell out of the alternative, that being increasingly reckless nuclear brinkmanship to maintain global control. The US has been in charge long enough to make it clear that the world order it dominates can only be maintained by nonstop violence and aggression, with more and more of that violence and aggression being directed toward major nuclear-armed powers. The facts are in and the case is closed: US unipolar hegemony is unsustainable.

    The problem is that the US empire itself does not know this. This horrifying trajectory we’re on toward an Atomic Age world war is the result of the empire’s doctrine that it must maintain unipolar control at all costs crashing into the rise of a multipolar world order.

    It doesn’t need to be this way. There’s no valid reason why the US needs to remain in charge of the world and can’t just let different people in different regions sort out their own affairs like they always did before. There’s no valid reason why governments need to be brandishing armageddon weapons at each other instead of collaborating peacefully in the interest of all humankind. We’re being pushed toward disaster to preserve “American leadership around the world,” and I for one do not consent to this.

    * * *

    My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, throwing some money into my tip jar on Patreon, Paypal, or Substack, buying an issue of my monthly zine, and following me on Facebook, Twitter, Soundcloud or YouTube. If you want to read more you can buy my books. The best way to make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. All works co-authored with my husband Tim Foley.

    Bitcoin donations:1Ac7PCQXoQoLA9Sh8fhAgiU3PHA2EX5Zm2

    Tyler Durden
    Sat, 03/25/2023 – 23:30

  • Asian Voters Abandoning Woke Democrats As Crime Rises In Cities
    Asian Voters Abandoning Woke Democrats As Crime Rises In Cities

    You might have heard the recent story of a CNN news crew that had their car broken into while they were filming a segment on crime in San Francisco, CA.  While the irony of this is amusing to many of us, one group of people that is not laughing is Asian-Americans in the Bay Area who are growing weary of the overall damage done by leftist social justice policies.  That CNN crew was, in fact, shooting a story on the very issue of Asian voters who say they are moving away from progressive Democratic leadership and seeking out more moderate candidates, as well as Republican candidates.

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

    The reasons for this shift are many. 

    • First, it has long been the assumption among leftist elitists that they own American minorities as a voting block and that “only whites” are conservative.  The arrogance of this thinking aside, Democrats often find themselves confounded by the percentage of minorities that are in fact moderate or conservative in their voting habits.  While many minorities might feel compelled by social pressure and propaganda to vote Democrat, the damage that is hitting their pocket books and making their streets unsafe cannot be hidden forever. 

    • Second, while leftists often claim that anti-Asian hate crimes are caused by “racist white conservatives”, a cursory glance at video footage and the prosecution records of the majority of the perpetrators of these attacks shows this is not the case.  In New York City in 2020 during the onset of the media hype on anti-Asian hate, only 2 out of 20 people arrested in connection with Asian attacks were white.   

    • Third, it has been social justice politics in places like San Francisco that have encouraged police defunding efforts while enabling criminals.  When the worst elements of society see leftist organizations like BLM and Antifa rioting in the streets and setting neighborhoods ablaze while being applauded by city politicians, they tend to feel empowered to act on their darkest impulses. 

    In every single metropolis where woke politicians take control, the city starts to collapse.  From LA to New York, from San Francisco to Austin, from Portland to Seattle, the results are always the same, and now it’s not just conservatives pointing out the root problem.

    Tyler Durden
    Sat, 03/25/2023 – 23:00

  • No, We Don't Need More Nuclear Weapons
    No, We Don’t Need More Nuclear Weapons

    Authored by Ryan McMaken via The Mises Institute,

    Republicans and Democrats may quibble over how federal tax dollars might be spent on various social welfare programs like Medicaid and food stamps. But alongside Social Security, there is one area of federal spending that everyone can apparently agree on: military spending. Last year, the Biden administration requested one of the largest peacetime budgets ever, at $813 billion. Congress wanted even more spending and ended up approving a budget of $858 billion. In inflation-adjusted terms, that was well in excess of the military spending we saw during the Cold War under Ronald Reagan. This year, Joe Biden is asking for even more money, with a new budget request that starts at $886 billion. Included in that gargantuan amount—which doesn’t even include veterans spending—is billions for new missile systems for deploying nuclear arms, plus other programs for “modernizing” the United States’ nuclear arsenal.

    Indeed, over the past year, the memo has gone out among the usual advocates of endless military spending that the US needs to spend much more on nuclear arms. This is a perennial position at the Heritage Foundation, of course, which has never met a military pork program it didn’t like. Moreover, in recent months, the Wall Street Journal has run several articles demanding more nuclear arms. The New York Post was pushing the same line late last year. Much of the rhetoric centers on the idea that Beijing is increasing its own spending on nuclear arms and thus the United States must “keep up.” For instance, last month, Patty-Jane Geller insisted that the US is in an “arms race” with China. Meanwhile, writers at the foreign-policy site 1945 claimed Congress must “save” the American nuclear arsenal.

    Congress will surely be happy to cooperate. Such spending is an enormous cash cow for weapons manufacturers, although it has little to do with actual military defense. The US nuclear arsenal is huge, and China’s efforts to expand its own arsenal will have no effect on the already substantial deterrent effects of the US’s existing nuclear arsenal. Although the 1945 article insists that China soon “will field a peer or superior arsenal to the United States,” it’s difficult to see by what metric this is actually true.

    Contrary to claims that the US nuclear arsenal needs to be “saved” or it will soon be eclipsed by the Chinese arsenal, the US remains well in the lead of every single nuclear power except Russia. Even if Beijing increases its arsenal to one thousand warheads, as the New York Post breathlessly predicts, the Chinese arsenal will remain well behind that of the US.

    This is true even if we remove all the retired US warheads from the equation. In that case, Moscow retains the global lead with more than forty-four hundred weapons, and the US comes in second with more than thirty-seven hundred. Presently, Beijing has approximately 350 of these weapons, France has 290, and the rest of the world is well behind that.

    Source: Data from Our World in Data, “Inventories of Nuclear Weapons.“

    Like Moscow, Washington has a full-blown and well-developed nuclear triad, complete with a fleet of nuclear subs that can launch up to twenty missiles—each containing multiple independently targeted warheads—land-based missile silos, and bombers. Each option provides ways to deliver hundreds of warheads. The submarine fleet, of course, is constantly mobile, ensuring first-strike survivability.

    The Nonexistent Missile Gap

    This won’t stop advocates of more spending from calling for more. They’ll always have reasons why there is some sort of missile gap. Lately, the obsession is with hypersonic missiles and having various forms of delivery, as well as the claim that the current gap between the US arsenal and rival arsenal is not sufficiently large.

    There’s a reason US advocates of an aggressive nuclear posture invented the “missile gap” myth during the Cold War. It sows doubt about US security and ensures a certain level of paranoia about US nuclear capability. Nowadays, it’s acknowledged that the missile gap was always a myth, but this was much less known in the days when debates over US rocket technology were a frequent cause for alarm and debate. Nonetheless, the nonfactual basis of the “gap” was known at least as early as the 1960s, and then defense secretary Robert McNamara noted to John F. Kennedy:

    There was created a myth in the country that did great harm to the nation. It was created by, I would say, emotionally guided but nonetheless patriotic individuals in the Pentagon. There are still people of that kind in the Pentagon. I wouldn’t give them any foundation for creating another myth.

    How Much Do Numbers Matter?

    The myth persists, however, and Geller claims: “Given the hundreds of new Chinese missile launchers and other new weapons, the U.S. will need more nuclear weapons to hold these targets at risk. In nuclear deterrence, numbers matter.”

    How much do numbers really matter? Yes, in matters of deterrence, ten is certainly better than zero. But is three thousand better than one thousand, or even one hundred? That logic often works with conventional arms, but it makes little sense with nuclear arms, a single unit of which can destroy an entire city. As John Isaacs noted last year in the National Interest:

    In the nuclear age, a country that deployed 1,000 nuclear weapons rather than an adversary’s 500 is not twice as powerful since a handful of weapons could devastate both countries. But the Pentagon and political leaders did not learn this critical lesson. This is a numbers game that may have been relevant for tanks and battleships before [the invention of nuclear weapons] but is not today.

    What is key in nuclear deterrence is not simply numbers. Nuclear strategist Albert Wohlstetter identified this problem in the early 1960s and concluded that “the criterion for matching the Russians plane for plane, or exceeding them is, in the strict sense, irrelevant to the problem of deterrence.” Rather the key, Wohlstetter went on, is creating a force that is “survivable” to ensure the possibility of a retaliatory “second strike.” This is what establishes deterrence.

    Wohlstetter certainly wasn’t the only one to come to this conclusion. In a 1990 essay titled “Nuclear Myths and Political Realities,” Kenneth Waltz—perhaps the most influential scholar of international relations of the past fifty years—concludes that the total number of missiles in these enormous arsenals is of little importance for nations that are already well above the threshold for achieving nuclear deterrence.

    What really matters is the perception that the other side has second-strike capability, and this certainly exists in both US-Russia and US-China relations. Once each regime knows that the other regime has second-strike capability, the competition is over. Deterrence is established. Waltz notes:

    So long as two or more countries have second-strike forces, to compare them is pointless. If no state can launch a disarming attack with high confidence, force comparisons become irrelevant. . . . Within very wide ranges, a nuclear balance is insensitive to variation in numbers and size of warheads.

    The focus on second-strike capability is key because pro-arms-race policy makers are quick to note that if a regime’s first strike is able to destroy an enemy’s ability to retaliate in kind, then a nuclear war can be “won.”

    Second-Strike Capability Evens the Score

    But, as shown by Michael Gerson in “No First Use: The Next Step for U.S. Nuclear Policy” (2010) establishing second-strike capability—or, more importantly, the perception of it—is not as difficult as many suppose. Gerson writes:

    A successful first strike would require near-perfect intelligence, surveillance, and reconnaissance (ISR) to detect, identify, and track all of the adversary’s nuclear forces; recent events surrounding U.S. assessments of Iraq’s suspected WMD [weapons of mass destruction] capabilities forcefully demonstrate the challenges of reliable, accurate, and unbiased information. Intelligence regarding where an adversary’s nuclear weapons are located and if the state is actually planning to attack could be wrong or incomplete, and an attempted first strike based on inaccurate or incomplete information could have far-reaching negative consequences.

    The threat of a successful first strike can be countered through a variety of methods, including secrecy and the ability to shift weapons delivery channels. This is why the US, Russian, and Chinese regimes have long been so enthusiastic about the so-called nuclear triad. It is assumed that if nuclear weapons can be delivered by submarine, aircraft, and land, then it is impossible for an opposing regime to destroy all three at once and achieve first-strike victory.

    But even in the absence of a triad, an opposing regime that seeks a total first-strike victory has few grounds for much confidence. As Waltz shows, “nuclear weapons are small and light; they are easy to move, easy to hide, and easy to deliver in a variety of ways.” That is, if a regime manages to hide even a small number of planes, subs, or trucks, this could spell disaster for the regime attempting a successful first strike. Gerson explains:

    A nuclear first strike is fraught with risk and uncertainty. Could a U.S. president, the only person with the power to authorize nuclear use and a political official concerned with re-election, his or her political party, and their historical legacy, ever be entirely confident that the mission would be a complete success? What if the strike failed to destroy all of the weapons, or what if weapons were hidden in unknown areas, and the remaining weapons were used in retaliation?

    Nor must it be assumed that a large number of warheads is necessary to achieve deterrence. Waltz recalls that Desmond Ball—who advised the US on escalation strategies—convincingly asserted that nuclear deterrence could be achieved with as few as fifty warheads.

    Proceeding on the assumption that an enemy has no warheads left following a first strike requires an extremely high level of confidence because the cost of miscalculation is so high. If a regime strikes and misses only a few of the enemy’s missiles, this could lead to devastating retaliation both in terms of human life and in terms of the first-strike regime’s political prospects.

    This is why a rudimentary nuclear force can achieve deterrence even with a small but plausible chance of second-strike capability. A small nuclear strike is nonetheless disastrous for the target, and thus “second-strike forces have to be seen in absolute terms.” Waltz correctly insists that calculating an arsenal’s relative dominance is a waste of time: “the question of dominance is pointless because one second-strike force cannot dominate another.”

    The US Is Already Far beyond the Deterrence Threshold

    One could certainly debate how much the US nuclear stockpile could be cut without sacrificing deterrence. Given the enormous size of the stockpile, however, the answer is that “most of it” could be cut. Indeed, the US arsenal could be cut by 90 percent and still have hundreds of warheads available for silos, submarines, and bombers.

    Moreover, reductions in the arsenal are prudent for reasons of avoiding unintended nuclear war. As Wohlstetter noted, a prudent policy also requires “strategic nuclear forces to be not only capable of riding out and operating coherently after an actual preemptive attack against them; but also completely controllable in times of peace, crisis, and war—and especially in the face of ambiguous warning—so as to avoid unauthorized operations, accidents, and war by mistake.” Having large numbers of nuclear warheads actually is imprudent because it creates more potential for accidents, mistakes, and unauthorized use. Maintenance remains expensive and risky.

    In spite of all this, it remains popular among some to keep arguing for more nuclear expansion year after year. Surely, some of these advocates are true believers, but there is also a lot of money at stake for government contractors. Thus, in one form or another, the myth of the missile gap – and its modern variants – endures.

    Tyler Durden
    Sat, 03/25/2023 – 22:30

  • Ford's "Blue Oval City" Aims To Open In 2025, Produce 500,000 Next Gen Electric Trucks A Year
    Ford’s “Blue Oval City” Aims To Open In 2025, Produce 500,000 Next Gen Electric Trucks A Year

    Ford is getting close to unveiling its next generation electric pickup plan at its BlueOval city mega-campus in West Tennessee.

    An update from the company this week said that the new plant – which is designed to be radically efficient and carbon neutral – is “taking shape and preparing to build Ford’s next-gen electric truck, code named Project T3, in 2025”. 

    The Project T3 is being called by the company “a once-in-a-lifetime opportunity to revolutionize America’s truck” as Ford, along with other legacy auto manufacturers continue to shift their business models from an ICE base to an EV base. 

    Slated to start production in 2025, the plant will be capable of producing 500,000 EV trucks a year at full production – and most notably the next generation of Ford’s electric truck. Here’s a sneak preview of what the second gen pickup will look like:

    Bill Ford, Ford’s executive chair said: “BlueOval City is the blueprint for Ford’s electric future around the world. We will build revolutionary electric vehicles at an advanced manufacturing site that works in harmony with the planet, aligning business growth and innovation with environmental progress.”

    “Project T3 is a once-in-a-lifetime opportunity to revolutionize America’s truck. We are melding 100 years of Ford truck know-how with world-class electric vehicle, software and aerodynamics talent. It will be a platform for endless innovation and capability,” said Jim Farley, Ford president and CEO.

    Ford’s PR reads:

    Project T3 is short for “Trust The Truck” – a code name that stuck after the development team made it their rallying cry. The team’s single guiding principle has been to create a truck people can trust in the digital age – one that’s fully updatable, constantly improving, and supports towing, hauling, exportable power and endless new innovations owners will want.

    The assembly plant will use carbon-free electricity from the day it opens. For the first time in 120 years, Ford also is using recovered energy from the site’s utility infrastructure and geothermal system to provide carbon-free heat for the assembly plant – saving about 300 million cubic feet of natural gas typically needed each year to heat similarly sized vehicle assembly plants.

    Here’s the video stream of Ford’s update on the campus:

    Tyler Durden
    Sat, 03/25/2023 – 22:00

  • Military Officials: Diversity Training Makes Soldiers Feel "Included"
    Military Officials: Diversity Training Makes Soldiers Feel “Included”

    Authored by Eric Lundrum via AmGreatness.com,

    Top military officials in the Biden Administration recently attempted to defend far-left “diversity” training in the military, claiming that such sessions make all soldiers feel more “included.”

    As the Washington Free Beacon reports, Air Force Chief of Staff General C.Q. Brown gave an interview for Defense One defending the practice of diversity training, claiming that “when people join our military, they want to look around and see somebody who looks like them.”

    “They want to be part of a team, and feel like they’re included,” Brown added.

    Brown praised the practice for its alleged efforts to build “cohesive” teams for all service members, “no matter their background.”

    Similarly, General David Berger, Commandant of the Marine Corps, claimed that he has seen “zero evidence” of any negative impact from such left-wing policies when it comes to the end result of making stronger Marines.

    House Republicans are currently attempting to cut funding for such far-left practices in the military; other examples include a program in the Army for training soldiers on how to use “gender pronouns,” and a similar training video for the Navy discussing pronouns and “safe spaces.”

    Senator Roger Wicker (R-Miss.) declared that the Biden Administration’s efforts to force politics into the military are “shaping the Department of Defense into an institution that is spearheading toxic social policies instead of restoring military strength.”

    “On the House Armed Services Committee, we are laser-focused on the threats we face and the capabilities we need to defeat them,” said Congressman Mike Rogers (R-Ala.), chairman of the Armed Services Committee.

    The fight over the politicization of the military comes as most branches struggle with reaching the appropriate levels of recruitment numbers in recent years. Last year, the U.S. Army missed its minimum recruitment goal by 15,000.

    Tyler Durden
    Sat, 03/25/2023 – 21:30

  • North Korea Touts 'Radioactive Tsunami' Weapon Test At Sea
    North Korea Touts ‘Radioactive Tsunami’ Weapon Test At Sea

    North Korea claimed Friday to have tested a nuclear-capable underwater drone designed to generate a gigantic “radioactive tsunami” that would destroy naval strike groups and entire ports. Analysts were skeptical that the device presents a major new threat, but the test underlines the North’s commitment to raising nuclear threats.

    But according to The Associated Press, analysts in the West are deeply skeptical of the claims or that the weapon presents a major new threat, at a moment the Pentagon has expanded its activity on the Korean peninsula.

    Via 7 News Boston

    State-run Korean Central News Agency (KCNA) described that the drone is designed to “stealthily infiltrate into operational waters and make a super-scale radioactive tsunami through an underwater explosion” – and that it can either be deployed directly from the coast or towed by ships.

    KCNA said that North Korea is responding to this month’s joint US-South Korea drills, which it considers a huge provocation. The state media report described an ongoing “nuclear crisis” due to Washington’s “intentional, persistent and provocative war drills.”

    Kim Jong Un has also promised to make his rivals “plunge into despair” if North Korea continues to be threatened. This week the North Korean government launched a major new recruiting drive, hosting events across the country while conducting near daily test launches of projectiles – including a test last Sunday which included a ‘mock nuclear warhead’ as a warning to Seoul and Washington.

    State media described that “youth college students from universities in various places as well as high-end middle school students from all over the country” expressed their determination “to join forces in the fight…”

    The KCNA report additionally cited citizens’ willingness “mercilessly wipe out the war maniacs” – in what’s also clearly a propaganda blitz and bit of signaling aimed at the south and at the west. At the same time, Pyongyang is apparently seeking to impress its enemies and the world by rolling out new high-tech weapons.

    Tyler Durden
    Sat, 03/25/2023 – 21:00

  • Taibbi: People Can Win
    Taibbi: People Can Win

    Authored by Matt Taibbi via Racket News (emphasis ours),

    Earlier today Susan Schmidt and I published an article about a series of changes at the Cybersecurity and Infrastructure Security Agency (CISA), a creepy sub-division of the Department of Homleand Security. It turns out that CISA, which just a week or so ago was busted for scrubbing embarrasing text from its website by the Foundation for Freedom Online, quietly eliminated its so-called “MDM” or “Misinformation, Disinformation, and Malinformation” subcommittee.

    Just a year ago, the Department of Homeland Security was going all-in on the fight against “MDM.” The notion that America is fatally infected with “Misinformation, Disinformation, and Malinformation” was in fact the animating idea begind the asinine plan the Biden administration announced last April to institute a “Disinformation Governance Board,” which was to be headed by Nina Jankowicz, a self-styled Mary Poppins of digital rectitude:

    America took one look at Jankowicz and at most a few fleeting moments considering the “Disinformation Governance Board” plan before concluding, correctly, that it was a beyond-loathsome expression of aristocratic arrogance that needed shutting down before the first Jankowicz presser. Characteristically, the press lied about the public reaction, claiming that the only displeasure was heard from the “GOP.” In fact, all sane people across the spectrum were instantly nauseated, their distress loud enough that the DHS hit “pause” on Jankowicz and the batty MinTruth plan after just three weeks.

    Even that might not have been fast enough, as was discovered by my co-author Sue Schmidt, who’s formerly of the Washington Post but joined Racket this month for a special report a team of us are preparing on what fellow #TwitterFiles reporter Michael Shellenberger calls the “Censorship-Industrial Complex.” (More on that later). Looking through the minutes of CISA’s subcommittee meetings last year, Sue found that the DHS’s little team of self-appointed information guardians was deeply worried about the “rollout” of their war against MDM, worrying repeatedly about how to “socialize” or “pre-socialize” various parties to the idea of a federal truth squad, realizing that just presenting the actual plan to a sentient person without lots of sweeteners wouldn’t go well.

    One subcommittee member, whose name in the spirit of our times is of course redacted, seemed to realize the concept was too hot to discuss in public. She “suggested removing mention of MDM” — this, from a member of the “MDM subcommittee”! — and “framing” the subcommitee’s efforts more in terms of “directing people to clear information about elections procedures.” Another member recommended CISA “point more to state officials and state laws to make the authoritative source of information less controversial. In other words: “Let’s make it sound like someone other than the hated us is running this thing!”

    Even two years ago, nobody was paying attention to this world and the public, if it cared at all, was probably inclined to welcome more “election procedures” (as CISA would later call them), not fewer. So the DHS, sensibly one must conclude, dissolved its incorrectly named “Countering Foreign Influence Task Force” — the group spent most of 2020 zapping domestic election posts — renamed it the MDM subcommittee, and began meeting and posting about the need to build “national resistance” to “domestic threat actors.” As Sue just reported, these folks saw “MDM” everywhere here at home, insisting “CISA should consider MD across the information ecosystem,” which included talk radio, cable news, mainstream media, and “hyper-partisan media.”

    The architects of this plan not only genuinely believed themselves above such temptations, but saw nothing wrong with asking for massive sums of money — Joe Biden’s first economic proposal sought $690 million for CISA — to captain an open-ended war on American badthink, as defined by [names redacted]. Here again, take note of Jankowicz’s lyrics:

    It’s like when Rudy Giuliani shared bad intel from Ukraine

    Or when TikTok influencers said COVID can’t cause pain

    They’re laundering disinfo and we really should take note

    And not support their lies, with our wallet, voice or vote!

    This was a group of self-described experts in an utterly fictitious “anti-disinformation” discipline who were so sure it was okay for them to tell you whom not to vote for, one of them sang about it. This, despite the fact that of the ones whose names we know, like Jankowicz, many were open swallowers of the dumbest Russiagate hokum, like the Alfa-Server story.

    I spent a long time covering the 2008 Wall Street crash, which meant devoting large amounts of energy to some of the world’s most unredeeming people. These were swindlers who sold snake-oil mortgage products that put millions out of their homes and wiped out retirement funds of people who spent decades working as toll operators, firefighters, teachers. Such predators were awful, amoral people, but all the same, I occasionally found myself writing with something like admiration. These crooks were creators of truly ingenious schemes who did what they did out of lust, greed, jealousy, and other (at least identifiably human) forms of depravity.

    These [name redacted] would-be censors are different. They have no sense of humor, no imagination, and exactly one distinguishing characteristic: they know what’s best for you. Anti-disinfo work suits them because they all have a Poppins streak that quietly gets off on binning your digital dirty bits (after the voyeuristic thrill of logging on to watch them in secret, with special credentials, which they rub with pleasure in evenings). They’re the vilest kind of snobs, and when they finally were forced to show their real selves to the public — and here I feel safe in thanking Elon Musk for making that possible, via the #TwitterFiles — the public rightfully recoiled from these arrogant power-worshipping mediocrities.

    The Governance Board was already dead, and now the whole MDM mission is being wound down, which feels like a win. Perhaps they’re just publicly retreating from the concept for now, but at this point, I’ll take that. Moreover there are signs everywhere that people are losing their fear of departing from the orthodoxy such types would like to impose, and pushing for a return to normalcy, which for the first time in ages feels within reach.

    There was a ridiculous scene at Stanford law school recently, in which a conservative judge was muffled by a gaggle of future lawyers who’d been led by an assistant Dean in a characteristically moronic shouting-down exercise. The current strain of Junior Anti-Sex League-type protesters who fill campuses from coast to coast now sure do love their “heckler’s veto…”

    The Stanford Law School Dean Jenny Martinez was brilliant in response. Instead of doing what the heads of organizations have been doing for years in such situations, instead of doing, frankly, what I did during my own cancelation episode — frantically over-apologizing to people who have no use for or interest in apologies — Martinez sternly called the students out as clowns, reminding them in a long, serious, punishing letter that if they ever become officers of the court, they will be held to a higher standard than “lay people,” swearing to conduct themselves “at all times with dignity, courtesy and integrity.”

    Martinez went further, saying that on her watch, the school would not be doing the usual and committing itself to starter slates of political positions out of fear of reproach. “Our commitment to diversity, equity, and inclusion is not going to take the form of having the school administration announce institutional positions on a wide range of current social and political issues,” she wrote. The age of just giving in to mobs instead of insisting on our right to have different opinions and beliefs seems to be receding. It is beginning to dawn on sane, tolerant people everywhere that there are more of us than there are of them, and this still matters in a democracy.

    There’s a reason why these people are so focused on technocratic solutions, from magic AI schemes to control information to deploying packs of Boston Dynamics robot-dogs, who’ll patrol suburban neighborhoods and peer in windows for visual confirmation of Alexa-overheard transgressions. General Mark Milley just said on a podcast that armies may be fully robotic in 15 years, arousing general neoliberal giddiness (Milley quoted Dylan). These people need tech, because you know what they don’t have? Friends. Organic support. Or, ways to win them, like art, music, literature, or comedy.

    I have a theory about what happened to America in this regard. After 9/11, people were scared, and they fell for a succession of propaganda campaigns convincing them that the hole in Fortress America, the chink in our national armor, was our system of democratic rights.

    The “MDM subcommittee” members think the same way: there’s a section in one of last year’s meetings in which a former Secretary of Washington State notes that the bad countries, “such as Russia, use the First Amendment effectively.” Moreover, in general, “our adversaries… use our Constitution effectively.” They’ve been telling us this stuff ever since the Towers came down. We were told our enemies will use even our open system of justice against us, so forget the admirable streak of America never having had an in-camera criminal trial. Let’s clear the court even for deportation hearings of suspected terrorists, they said. Let’s not even tell the public the names of the deported!

    “The era that dawned on September 11th, and the war against terrorism that has pervaded the sinews of our national life since that day, are reflected in thousands of ways” the Third Circuit Court wrote in 2002, adding: “Since the primary national policy must be self-preservation,it seems elementary that, to the extent open deportation hearings might impair national security, that security is implicated.”

    It was the same with torture, rendition, watch lists, drones, whatever. To respond to terrorism, we were told, we needed to be more “nimble” than old-school democracy allowed. We couldn’t wait for congress to declare wars, or build probable cause, or afford the right to face one’s accusers. The stakes were too high for such luxuries. Even giving “enemy combatants” Geneva convention rights would confer legitimacy to the opposition it didn’t deserve, and we couldn’t afford to give that legitimacy. Our grip on safety was that tenunous.

    No: the new era of a West infected with a borderless evil returned from the 8th century needed a bureaucracy of super-empowered minders, who’d do torturing if it needed doing, and quietly make lists of who gets to fly or open a bank account. Most of all, these minders would make those terrible decisions about who gets to live and die in a drone-patrolled world. The Imitation Game from 2014, starring Benedict Cumberbatch and telling the awful tale of Alan Turing’s quest to crack the Enigma code, was a great movie, but perhaps also the ultimate portrait of the Obama-era political class, whose members all saw themselves as misunderstood geniuses quietly saving civilization through endless mathematical murder, committed from afar, by remote control, without fanfare or appreciation.

    America balked some at George W. Bush as “The Decider,” but was more than happy to let the Community Organizer head up those secret decisions. With the genial and patient-sounding Obama in office, the deciders assumed a new brand of business-casual cruelty. I vividly remember going to a ballgame with a longtime Justice source in those years, someone I liked, who casually told me in between bites of a hot dog that of course we should just drone Julian Assange, because he was a “terrorist,” and the “reality is, you just have to kill them.”

    Each year, more and more of government became classified, and we had less and less access to information about where tax dollars were being spent, or what was going on at places like the Federal Reserve. We let it happen, abandoning the democratic responsibility to govern ourselves, in the process willing the world’s smuggest aristocracy into existence. It wasn’t the worst time — a lot of good TV was made in those years — but while we were napping, these people were turning America into a secret administrative state committed to endless war, mass surveillance, social credit scoring, censorship, and other horrors, a system that’s only just now beginning to show itself.

    The managerial state was held in place for over a decade by a kind of magic spell, which works thanks to the public’s faith in the competence of our minders. That spell held by default for an extra four years while Trump was in office, but it’s been broken now, in part thanks to refuseniks like Musk (who caused all kinds of havoc by opting out of an airtight information-control cartel), but mainly because we’ve now had enough opportunities to examine up close the loathsome nanny-staters to whom we surrendered all those years ago. Whatever hold these people had on us, and it was real — I spent years worrying about regaining the favor of people who were denouncing me as a Russian asset even as they demanded my vote — it’s gone now, and we can start thinking about moving on to something better.

    This is what I choose to think, this weekend evening. We don’t have to concede to a future of always being at war somewhere abroad, and with each other at home. We don’t have to put up with a government that doesn’t tell us anything. Most of all, we can go back to enjoying life, on our own terms, without stressing over an endless succession of panics invented by politically insecure losers. We can do so much better, and we will, because this place is ours to run, a fact the singing censors should never have let us remember.

    Subscribe to Racket News

    Tyler Durden
    Sat, 03/25/2023 – 20:30

  • Denver Suburb Caps Number Of Gas Stations To 'Promote Electric Vehicles'
    Denver Suburb Caps Number Of Gas Stations To ‘Promote Electric Vehicles’

    A suburb of Denver, Colorado has voted to ban the construction of new gas stations in order to address ‘environmental concerns with the continued use of gasoline powered vehicles and equipment.’

    The Louisville City Council voted unanimously on Tuesday in support of a 2022 ordinance limiting the number of gas stations to six – with an exception carved out for one more (for a total of seven) if big box stores such as Costco or Sam’s Club build a store that’s 80,000 feet or larger and includes a gas station.

    The limitation includes existing gas stations.

    A 79-page report of the ordinance issued by the City Council on the day of the vote in part states such caps on gas stations “is a growing trend for local municipalities due to health and environmental concerns with the continued use of gasoline powered vehicles and equipment.”

    The reports also states gas station “bans may also be seen as promoting the use of electric vehicles.” –Just the News

    The report acknowledges that gasoline is still required for non-electric vehicles.

    “The proposal for a cap but not a full ban on new gasoline and automobile service stations is in recognition that there will continue to be some demand for gasoline and automobile service stations as more EVs enter the market and gasoline vehicles are transitioned out of the market over time,” it reads.

    The proposal included letters from the community in support of the ordinance.

    “I strongly support and encourage you to not allow the further construction of fossil fuel refueling stations (gas) in our community. All of us, not just the citizens of our community, need to move quickly away from fossil fuel consumption,” reads one letter from resident Channah Horst.

    “If you are a climate denier then my plea falls on deaf ears. If you acknowledge the peril our planet is in then it is your responsibility to do what you can to help us make changes in the way we live. In other words–do not make it easier for me and my fellow residents to keep using gasoline.“

    Eric Lund, Executive Director of the Louisville Chamber of Commerce opposed the move, writing “If you limit the number of gas stations then competition could become an issue as our local residents will likely have to pay higher prices if open market competition is blocked by an ordinance of this type,” adding “I am not sure that there is a benefit by limiting the number of gas stations which typically also include retail stores and would be interested to understand the thought behind how this ordinance helps to support local businesses and our residents in the area.

    Tyler Durden
    Sat, 03/25/2023 – 20:00

  • US State Department Lifts 'Assignment Restrictions' Used To Discourage Foreign Recruiting
    US State Department Lifts ‘Assignment Restrictions’ Used To Discourage Foreign Recruiting

    The US State Department has lifted so-called ‘assignment restrictions’ which prevented employees – some of whom would hold top-secret clearances – from serving in countries they had immigrated from, or have family or financial relationship with, after Democratic lawmakers said it was discriminatory – particularly against Chinese and Pacific Islander employees.

    The move follows a 2021 bill introduced by Reps. Ted Lieu (D-CA), Joaquin Castro (D-TX), Andy Kim (D-NJ) and Chrissy Houlahan (D-PA), who have discarded national security concerns to end a practice that “disproportionately impacts federal employees who can’t trace their heritage to the Mayflower and directly undermines the department’s goal of promoting diversity and inclusion,” Politico reports.

    State Department data reveals that around 1,800 employees are subject to assignment restrictions – with the top four countries being China (196), Russia (184), Taiwan (84) and Israel (70).

    According to Secretary of State Antony Blinken, the change came after he lifted more than half of the restrictions during his first year in office, which opened “new possible assignments” for hundreds of US diplomats.

    “Today, I’m pleased to share that after a rigorous review, I have decided that, moving forward, the Department will end its practice of issuing new assignment restrictions as a condition placed on a security clearance.”

    Those currently subject to assignment restrictions will be allowed to go through a new review and appeal process. That said, some restrictions will remain in place, such as those related to a situation “in which a foreign country may consider an employee to be one of their own nationals,” or when there are “assignments to posts rated critical for human intelligence threats.”

    Perhaps all those millions of dollars which flowed from CCP-linked individuals to the Biden family are once again paying off?

    Tyler Durden
    Sat, 03/25/2023 – 19:00

  • As We Sell Off Our Strategic Oil Reserves, Ponder This
    As We Sell Off Our Strategic Oil Reserves, Ponder This

    Authored by Bruce Wilds via Advancing Time blog,

    One of Biden’s answers to combating higher gas prices has been to tap into America’s oil reserves. While I was never a fan of the U.S. Strategic Petroleum Reserve (SPR) program, it does have a place in our toolbox of weapons. We can use the reserve to keep the country running if outside oil supplies are cut off. Still, considering how out of touch with reality Washington has become, we can only imagine the insane types of services it would deem essential next time an oil shortage occurs.

    Sadly, some of these reserves found their way into the export market and ended up in China. We now have proof that the President’s son Hunter had a Chinese Communist Party member as his assistant while dealing with the Chinese. Apparently, he played a role in the shipping of American natural gas to China in 2017. It seems the Biden family was promising business associates that they would be rewarded once Biden became president. Biden’s actions could be viewed as those of a traitor or at least disqualify him from being President.

    The following information was contained in a letter from House Oversight Committee ranking member James Comer, R-Ky. to Treasury Secretary Janet Yellen dated Sept. 20. 

    “The President has not only misled the American public about his past foreign business transactions, but he also failed to disclose that he played a critical role in arranging a business deal to sell American natural resources to the Chinese while planning to run for President.”

    Joe Biden, Comer said, was a business partner in the arrangement and had office space to work on the deal, and a firm he managed received millions from his Chinese partners ahead of the anticipated venture. While part of what Comer stated had previously been reported in the news, the letter, cited whistleblower testimonies, as well as emails, a corporate PowerPoint presentation, and a screenshot of encrypted messages. These as well as  bank documents that committee Republicans obtained suggest Biden’s knowledge and involvement in the plan dated back to at least 2017.

    The big point here is;

    • The Strategic Petroleum Reserve, which was established in 1975 due to the 1973 oil embargo, is now at its lowest level since December 1983.

    In December 1975, with memories of gas lines fresh on the minds of Americans following the 1973 OPEC oil embargo, Congress established the Strategic Petroleum Reserve (SPR). It was designed “to reduce the impact of severe energy supply interruptions.” What are the implications of depleting the SPR and is it still important?

    The U.S. government began to fill the reserve and it hit its high point in 2010 at around 726.6 million barrels. Since December 1984, this is the first time the level has been lower than 450 million barrels. Draining the SPR has been a powerful tool for the administration in its effort to tame the price of gasoline. It also signaled a “new era” of intervention on the part of the White House. 

    This brings front-and-center questions concerning the motivation of those behind this action. One of the implications of Biden’s war on high oil prices is that it has short-circuited the fossil investment/supply development process.  Capital expenditures among the five largest oil and gas companies have fallen as the price of oil has come under fire. The current under-investment in this sector is one of the reasons oil prices are likely to take a big jump in a few years. Production from existing wells is expected to rapidly fall.

    The Supply Of Oil Is Far More Constant And Inelastic Than Demand

    It is important to remember when it comes to oil, the supply is far more constant and inelastic than the demand. This means that it takes time and investment to bring new wells online while demand can rapidly change. This happened during the pandemic when countries locked down and told their populations and told them to stay at home. This resulted in the price of oil temporarily going negative because there was nowhere to store it.

    Draining oil from the strategic reserve is a short-sighted and dangerous choice that will impact America’s energy security at times of global uncertainty. In an effort to halt inflationary forces, Biden released a huge amount of crude oil from the SPR to artificially suppress fuel prices ahead of the midterm elections. 

    To date, Biden has dumped more SPR on the market than all previous presidents combined reducing the reserves to levels not seen since the early 1980s. In spite of how I feel about the inefficiencies of this program, it does serve a vital role. It is difficult to underestimate the importance of a country’s ability to rapidly increase its domestic flow of oil. This defensive action protects its economy and adds to its resilience. 

    Biden’s actions have put the whole country at risk. Critics of his policy pointed out the Strategic Petroleum Reserve was designed for use in an emergency not as a tool to manipulate elections. Another one of Biden’s goals may be to bring about higher oil prices to reduce its use and accelerate the use of high-cost green energy.

    Either way, Biden’s war on oil has not made America’s energy policies more efficient or the country stronger.

    Tyler Durden
    Sat, 03/25/2023 – 18:30

  • US Weighs Expanding Fed's Emergency Liquidity Program To Stabilize First Republic, Other Regional Banks
    US Weighs Expanding Fed’s Emergency Liquidity Program To Stabilize First Republic, Other Regional Banks

    One day after a lengthy meeting on the growing bank crisis by the Financial Stability Oversight Council (chaired by Janet Yellen who five years ago vowed there would be “no financial crises in her lifetime“) on the last day of a week which started with the collapse of Credit Suisse and culminated with US regional banks nursing historic losses amid speculation that First Republic Bank could keel over any moment and drag down countless other names with it, even though the FSOC assured Americans that “while some institutions have come under stress, the U.S. banking system remains sound and resilient”, Bloomberg reports that in their attempt to rescue the most trouble of regionals, authorities are considering expanding the recently introduced emergency lending facility for banks – the BTFP – in order to give First Republic Bank more time to shore up its balance sheet.

    Or they may not: after all this has been a crisis has been marked by at times puzzling second-guessing, miscommunication and lack of conviction on the part of regulators, whose actions not only precipitated the contagion from the collapse of Silicon Valley Bank when they blocked potential buyers from acquiring the bank and avoiding a complete wipeout of shareholders, but where Janet Yellen has actively sought to destabilize the regional banks by explicitly refuting what Fed chair Powell was stating, the most vivid example being last Wednesday’s market crunch when stocks stabilized after the dovish FOMC only to puke after Yellen inexplicably said that US regulators were not even contemplating uniform deposit insurance.

    And sure enough, the BBG report adds that “officials have yet to decide on what support they could provide First Republic, if any, and an expansion of the Federal Reserve’s offering is one of several options being weighed at this early stage.” Meanwhile, regulators continue to grapple with two other failed lenders — Silicon Valley Bank and Signature Bank — that require more immediate attention… attention they wouldn’t need if regulators had intervened more competently in the beginning and not waited until almost a trillion in deposits had been pulled from small banks as confidence cratered.

    Bizarrely, even without of a step, watchdogs see First Republic as stable enough to operate without any immediate intervention as the company and its advisers try to work out a deal to shore up its balance sheet, the people said, asking not to be named discussing confidential talks.

    Officials have yet to decide on what support they could provide First Republic, if any, and an expansion of the Federal Reserve’s offering is one of several options being weighed at this early stage. Regulators continue to grapple with two other failed lenders — Silicon Valley Bank and Signature Bank — that require more immediate attention.

    Even short of expanding the BTFP, regulators reportedly “see First Republic as stable enough to operate without any immediate intervention as the company and its advisers try to work out a deal to shore up its balance sheet”; maybe those regulators should also see the stock price of FRC which has lost more than 90% of its value, and which is far less confident about the bank’s ability to evade the same forces that recently caused a trio of US banks to collapse. But while those banks toppled when rapid customer withdrawals forced them to lock in losses on depreciated assets, First Republic has remained open and independent.

    And while the BBG reporting suggests that regulators are once again indecisive at best, and may either help the bank… or not, the only actionable news here is that US officials “have concluded the bank’s deposits are stabilizing and that it isn’t susceptible to the kind of sudden, severe run that prompted regulators to seize Silicon Valley Bank within just a few days, the people said.” This confirms what we first reported on Friday in “Finally Some Good News On The Bank Crisis.”

    One way First Republic is different from other banks is that it managed to obtain enough cash to meet client needs while it explores solutions, courtesy of $30 billion in cash deposited by the nation’s largest banks this month… which of course is merely cash that was recycled after it was pulled from banks such as First Republic in the first place.

    Bloomberg also notes that a potential adjustment to the Fed’s emergency lending program is among options authorities have weighed in recent days. Of course, such an expansion of the Fed’s liquidity offerings would merely be another incremental step to institutionalizing moral hazard as it would apply to all eligible users, in keeping with banking law that says remedies must be broadly based, rather than aimed at helping a particular bank. But the change could be made in a way to ensure that First Republic benefits.

    Tyler Durden
    Sat, 03/25/2023 – 18:00

  • The Disinformation-Industrial Complex Vs Domestic Terror
    The Disinformation-Industrial Complex Vs Domestic Terror

    Authored by Ben Weingarten via RealClearInvestigations.com,

    Combating disinformation has been elevated to a national security imperative under the Biden administration, as codified in its first-of-its-kind National Strategy for Countering Domestic Terrorism, published in June 2021.  

    That document calls for confronting long-term contributors to domestic terrorism.

    In connection therewith, it cites as a key priority “addressing the extreme polarization, fueled by a crisis of disinformation and misinformation often channeled through social media platforms, which can tear Americans apart and lead some to violence.” 

    Media literacy specifically is seen as integral to this effort. The strategy adds that: “the Department of Homeland Security and others are either currently funding and implementing or planning evidence–based digital programming, including enhancing media literacy and critical thinking skills, as a mechanism for strengthening user resilience to disinformation and misinformation online for domestic audiences.” 

    Previously, the Senate Intelligence Committee suggested, in its report on “Russian Active Measures Campaigns and Interference in the 2016 Election” that a “public initiative—propelled by Federal funding but led in large part by state and local education institutions—focused on building media literacy from an early age would help build long-term resilience to foreign manipulation of our democracy.” 

    In June 2022, Democrat Senator Amy Klobuchar introduced the Digital Citizenship and Media Literacy Act, which – citing the Senate Intelligence Committee’s report – would fund a media literacy grant program for state and local education agencies, among other entities. 

    NAMLE and Media Literacy Now, both recipients of State Department largesse, endorsed the bill. 

    Acknowledging explicitly the link between this federal counter-disinformation push, and the media literacy education push, Media Literacy Now wrote in its latest annual report that … 

    … the federal government is paying greater attention to the national security consequences of media illiteracy.

    The Department of Homeland Security is offering grants to organizations to improve media literacy education in communities across the country. Meanwhile, the Department of Defense is incorporating media literacy into standard troop training, and the State Department is funding media literacy efforts abroad.

    These trends are important for advocates to be aware of as potential sources of funding as well as for supporting arguments around integrating media literacy into K-12 classrooms. 

    When presented with notable examples of narratives corporate media promoted around Trump-Russia collusion, and COVID-19, to justify this counter-disinformation campaign, Media Literacy Now president Erin McNeill said: “These examples are disappointing.”

    The antidote, in her view is, “media literacy education because it helps people not only recognize the bias in their news sources and seek out other sources, but also to demand and support better-quality journalism.” (Emphasis McNeill’s)

    Tyler Durden
    Sat, 03/25/2023 – 17:30

  • "I'm A Woman": Left Wing Host Ana Kasparian Triggers Woke Mob Over "Trans-Exclusionary" Language
    “I’m A Woman”: Left Wing Host Ana Kasparian Triggers Woke Mob Over “Trans-Exclusionary” Language

    Ana Kasparian, of the left wing hosts of The Young Turks, was put on blast this week on Twitter for “using trans-exclusionary language” when she Tweeted out the obvious: that she was a woman.

    “I’m a woman. Please don’t ever refer to me as a person with a uterus, birthing person, or person who menstruates. How do people not realize how degrading this is?” she wrote on Twitter on Tuesday of last week.

    “You can support the transgender community without doing this shit,” Kasparian added. “I’m sure a lot of women don’t want to be minimized to a bodily function or body part,” she said in a later Tweet.

    As was predicted by many in the responses, Kasparian was roasted by many “trans-allies”.

    “Those words are meant for AFAB [assigned female at birth] people as a category, not individual people. Get a grip,” transgender journalist Katelyn Burns responded to Kasparian. 

    “Who called you that? I’ve only ever heard that used when referring to a population, not an individual person,” another user wrote. “Obviously, those terms are meant to be precise to include all people who meet one of those characteristics, when needing to discuss a relevant topic.”

    “I respect you a lot, but this notion that the mere existence of trans-inclusive terms (rarely used in casual convos) somehow degrades women comes right out of the right’s anti-trans ‘war on women’ playbook,” added Mike Figueredo of The Humanist Report. 

    “I have zero problem with inclusion. None. But there’s gotta be a better way than boiling it down to a body part, no? Especially in the context of having reproductive rights taken away from people who just see woman as a baby-making vessel. That’s all I’m saying,” Kasparian said in response.

    “Your comment section has turned into a lunatic asylum. Some people just can’t accept your remarks,” Ian Miles Cheong concluded. 

    Tyler Durden
    Sat, 03/25/2023 – 17:00

  • 'Surgical Removal' Of Crypto Will Only Weaken USD Dominance
    ‘Surgical Removal’ Of Crypto Will Only Weaken USD Dominance

    Authored by Jesse Coghlan via CoinTelegraph.com,

    A day after Coinbase received a Wells notice from the Securities and Exchange Commission, industry commentators weighed in on what recent regulatory actions mean for America’s crypto future…

    The United States’ crackdown on cryptocurrencies and crypto firms will only serve to stifle crypto-related innovation and “weaken” the country, industry pundits say in the wake of Coinbase’s recent Wells notice from the Securities and Exchange Commission.

    On March 22, the crypto exchange became the latest crypto firm to receive a “legal threat” — a Wells notice — just a month after stablecoin-issuer Paxos received its own in February. Some suggest there could be more to come.

    Mati Greenspan, the chief of crypto research firm Quantum Economics, said he believes U.S. regulators have been unfriendly to crypto “since the beginning.”

    The recent collapses of crypto and startup-friendly banks, including Silvergate, Silicon Valley Bank and Signature Bank, have been viewed by some as being part of a scheme by regulators to un-bank the crypto sector, dubbed “Operation Choke Point 2.0.”

    Meanwhile, a March 20 economic report from the White House turned into a scathing review of the merits of crypto assets, with the paper spending almost an entire chapter debunking crypto’s “touted” benefits.

    Greenspan told Cointelegraph that the rumored action could be underway as crypto is seen as a “threat” to the U.S. dollar’s dominance in global trade — a significant and long-standing benefit to the U.S.

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

    However, as more are beginning to use crypto for cross-border remittances globally, he warned a crackdown on crypto in the U.S. could actually have the opposite effect on the dollar:

    “The surgical removal of cryptocurrencies from the U.S. banking system will only isolate the United States further and weaken the dollar’s position as the global reserve currency.”

    Adrian Przelozny, CEO of Australian crypto exchange Independent Reserve, told Cointelegraph that the recent banking sector woes were not due to “any failure in crypto” but caused by banks managing their risks in an “irresponsible way.”

    “The White House would be better served to review the practices in the banking industry,” he added.

    Speaking about the most recent action against Coinbase, Przelozny said the “adversarial environment for the crypto industry” in the U.S. would push the related “jobs, investment and future innovation” offshore.

    “Singapore, Hong Kong and potentially Australia” — who are eyeing the benefits of the crypto industry — may prove a better home for it, and those countries “will reap the economic benefits,” Przelozny said.

    The exact reasons the regulator is targeting Coinbase are still unclear. The SEC has declined to comment on the matter.

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

    Michael Bacina, a lawyer and partner at Piper Alderman, agreed that a “regulation by enforcement model” would “drive crypto-asset innovation offshore,” adding:

    “This is a strange position to adopt given the losses many faced in the last 12 months arose from collapses involving unregulated offshore structures.”

    Bacina said for years, the industry has asked for clarity on how to comply. He pointed to the recent “telling” comments made by the judge in Voyager Digital’s bankruptcy case that “observed that there is no clear guidance from regulators.”

    He added that offshore jurisdictions would continue harboring crypto firms until governments lay out the path to regulatory compliance, “which will cost jobs and raise the risk for consumers and investors.”

    Tyler Durden
    Sat, 03/25/2023 – 16:30

  • Another California Storm Is Coming
    Another California Storm Is Coming

    California has been relentlessly battered by an endless series of atmospheric river storms in the past three months. After being struck by yet another storm last week, the state now braces for the possibility of another one arriving in just a few days.

    For more on the forecast timing and impacts of the upcoming storm, meteorologist Armando Salvadore shared this report with clients: 

    In the last 30 days, the entire state of California with the exception of far southern Ca (Riverside and Imperial county) are above average to well above in terms of precipitation and even those aforementioned are just about near average. We’ve seen a substantial amount of condensed water over this winter, and there’s no signs of this letting up as we roll into yet another active week next week!

    Below, a potent upper-level low will look to drop southward and “bowl” itself into northern/central California. Such a mid-level disturbance will allow for a surface cyclone to manifest, and crash somewhere north of Sacramento come Tuesday midday.

    However, impacts will be felt later Monday because of a potent low level jet out ahead of the disturbance with strong moisture advection and forcing for ascent that transpires ahead of the impending mid/upper level low. A 40+ knot low level jet will propagate ahead of the disturbance, causing both warm air and moisture advection off the Pacific ocean allowing for rain to make landfall across northern California before the main axis shifts southward toward the Bay Area. By later Tuesday into Wednesday, the slug of rain will push further south toward Los Angeles. Along with low elevation heavy rain, heavy snow will also occur for Sierra Nevada Mountains, which by the way is already in the running for the most snowiest winter ever (currently sitting 2nd place with more than 56 feet that has fallen this winter!).

    In terms of moisture in the form of water vapor readily available to be condensed, we’re looking at signals of at least 0.5 – 1 standard deviation above climatology within the warm sector of the cyclone, and unsurprisingly coincides with a potent low level jet.

    Here we can see how the surface is represented with a mature cyclone making way toward northern/central California and heavy rain overspreading from north to south along with heavy snow impacting the higher terrain.

    While there still may be some discrepancy in where the heaviest rain totals occur, there’s a growing consensus for a widespread swath of at least over an inch. The only positive aspect of this system is that this falls over the course of a day, so flash flooding won’t necessarily be an issue; however, it’s areas already prone to flooding from previous events that could allow for excess runoff to nearby lower elevations or surrounding locations.

    While many Californians might have storm fatigue, the good news is that Gov. Gavin Newsom ended some of the state’s water restrictions last week as drought conditions dissipated. 

    Tyler Durden
    Sat, 03/25/2023 – 16:00

  • Stanford Law School Suspends Diversity Dean After She Doubles-Down On Duncan Debacle
    Stanford Law School Suspends Diversity Dean After She Doubles-Down On Duncan Debacle

    Tirien Steinbach, the diversity administrator at Stanford Law School who stoked a disruptive protest of Fifth Circuit appellate judge Kyle Duncan, is “currently on leave,” according to a memo on the protest reviewed by the Washington Free Beacon.

    Jenny Martinez, the law school’s dean, said in a Wednesday morning memo to all law students that administrators “should not insert themselves into debate with their own criticism of the speaker’s views.” At future talks, the role of administrators will be to “ensure that university rules on disruption of events will be followed,” Martinez said.

    Martinez gave no additional details on the terms of Steinbach’s leave, stating that the “university does not comment publicly on pending personnel matters.” She also ruled out disciplining any of the students who shouted down Duncan – in part, she said, because administrators sent “conflicting signals about whether what was happening was acceptable or not.”

    Instead, the law school will require all students to attend a training on “freedom of speech and the norms of the legal profession,” which will discuss, among other things, how “vulgar personal insults” can harm students’ “professional reputations.”

    That warning appears to be in reference to protesters who hurled sexual invective at Duncan, with one allegedly telling him, “We hope your daughters get raped.”

    It comes amid calls from Sen. Ted Cruz (R., Texas) and others for state bar associations to investigate the hecklers, which could potentially hold up their legal licenses.

    As Jonathan Turley details below, this “leave” comes after Steinbach publicly responded and appears to be doubling down on her actions in a Wall Street Journal opinion column.

     

    First a short recap of how we got here.

     

    The Stanford Federalist Society invited Judge Duncan of the United States Court of Appeals for the Fifth Circuit to speak on campus. However, liberal students, including members from the National Lawyer’s Guild, decided that allowing a conservative judge to speak on campus is intolerable and set about to “deplatform” him by shouting him down.

    In this event, Duncan was planning to speak on the topic:  “The Fifth Circuit in Conversation with the Supreme Court: Covid, Guns, and Twitter.” A video shows that the students prevented Duncan from speaking from the very beginning. Many called him a racist while others hurled insults like one yelling “We hope your daughters get raped.”

    Duncan was unable to continue and asked for an administrator to assist him.

    Dean Steinbach then took the stage and criticized the judge for seeking to be heard despite such objections.

    Steinbach explained “I had to write something down because I am so uncomfortable up here. And I don’t say that for sympathy, I just say that I am deeply, deeply uncomfortable.” While reaffirming her belief in free speech and insisting that the judge should not be cancelled, she proceeded to attack the judge for the content of his views.

    Steinbach declared “It’s uncomfortable to say that for many people here, you’re work has caused harm.” After a perfunctory nod to free speech, Steinbach proceeded to eviscerate it. She continued “again I still ask, is the juice worth the squeeze?” Is it worth the pain that this causes, the division that this causes? Do you have something so incredibly important to say about Twitter and guns and Covid that that is worth this impact on the division of these people.”

    Dean Martinez later apologized and then released a letter with Stanford President Marc Tessier-Lavigne that reaffirmed the commitment to free speech, but did not commit to holding the students accountable for their disruption. (The students with the National Lawyer’s Guild later complained about their names being mentioned in an article despite a campaign to name and shame conservative students).

    Dean Martinez then issued another letter with a strong defense of free speech and declared that all students (including the victims of the disruption) would be required to attend a free speech appreciation session. However, she declined any action against the students responsible for the disruption. That is a familiar pattern at universities.

    That brings us to Steinbach’s column.

    The Wall Street Journal was correct in running her account and it contains an important perspective to consider, even for some of us who were highly critical of Steinbach’s remarks.

    First, Dean Steinbach rightfully points out that she tried to get the students to allow the event to proceed. At one point, she suggested that students walk out in protest over Judge Duncan’s views. She also insists that she opposed efforts to cancel the event before it was held and continues to oppose such attempts to limit speech. She reaffirms the classical liberal view that the solution to bad speech is good speech, not less speech. That is all to her credit.

    However, the column has elements that are, frankly, less compelling or commendable.

    Steinbach appears to be responding to this admonishment by Martinez:

    In this instance, however, the failure by administrators in the room to timely administer clear and specific warnings and instead to send conflicting signals about whether what was happening was acceptable or not (and indeed at one point to seemingly endorse the disruptions that had occurred up to that point by saying “I look out and say I’m glad this is going on here”) is part of what created the problem in the room and renders disciplinary sanction in these particular circumstances problematic.

    Steinbach insists that she was simply using her training at “deescalation” and that she was asked to attend the event by the Federalist Society for that reason:

    I stepped up to the podium to deploy the de-escalation techniques in which I have been trained, which include getting the parties to look past conflict and see each other as people. My intention wasn’t to confront Judge Duncan or the protesters but to give voice to the students so that they could stop shouting and engage in respectful dialogue. I wanted Judge Duncan to understand why some students were protesting his presence on campus and for the students to understand why it was important that the judge be not only allowed but welcomed to speak.

    The problem with the column, in my view, is two-fold.

    First, in her remarks, Steinbach goes out of the way to show her agreement with the mob and indicates that she knew that they were going to stop the event. She soft pedals the attacks on Duncan and seems to blame both sides. She does not mention how the students prevented him from speaking, yelled about his being a racist, or called for the rape of his daughters. Instead, she describes how  “a verbal sparring match began to take place between the judge and the protesters. By the time Judge Duncan asked for an administrator to intervene, tempers in the room were heated on both sides.” That sounds a lot like blaming the victim. If the mob had not prevented the judge from speaking, there would have been “sparring” before the event was opened up for questions.

    She is not alone in such spins. Some like Slate’s Mark Stern suggested that Judge Duncan manufactured the controversy. Democratic members like Rep. Elissa Slotkin (D-MI) mocked Duncan as a “fragile flower.” Others at sites like Above the Law insisted, again, that silencing people like Judge Duncan is free speech.  Senior Editor Joe Patrice rejected the effort to “recast ‘free speech’ as the right of a powerful person to speak at the silent and unprivileged.” (In this case, “the silent and unprivileged” are Stanford students at an elite law school, who were invited to ask questions but asked not to prevent others from hearing from Judge Duncan).

    Second, Steinbach still chastises Duncan for his divisive viewpoints and clearly blames him in part for the controversy by refusing to yield to the sensibilities of the students — presumably by remaining silent.

    At one point during the event, I asked Judge Duncan, “Is the juice worth the squeeze?” I was referring to the responsibility that comes with freedom of speech: to consider not only the benefit of our words but also the consequences. It isn’t a rhetorical question. I believe that we would be better served by leaders who ask themselves, “Is the juice (what we are doing) worth the squeeze (the intended and unintended consequences and costs)?”

    Steinbach appears utterly clueless about why this question is so offensive to free speech values. She continues to intentionally obscure her obvious desire for speakers like Duncan to curtail their speech by stating that we would “be better served” by speakers asking if their speech is worth “the intended and unintended consequences and costs.”

    Avoiding “the squeeze” means being silent on points that have such consequences. Thus, to avoid angering these radical students, Duncan is expected to be silent on certain points or, in this case, any points that he might want to share. It is an invitation for self-censorship that would apply to any conservative jurist or speaker. While supporting free speech, Steinbach is condemning the exercise of speech when it could cause “pain” and “division.” Of course, such pain and division would not arise with a liberal jurist espousing the opposite viewpoints. Accordingly, liberal jurists would be free to speak without the sense of culpability while conservatives are expected to remain silent.

    In the end, Steinbach did not “defuse” the situation but fueled the rage with her comments. To this day, she cannot understand why Duncan would persist in speaking when some take such great offense at his views. She asks “Is there a way that we can stop blaming and start to talk and listen to each other?” Yet, her answer appears to be for speakers like Duncan to recognize that their views are simply too hurtful for some and should not be voiced to avoid “the squeeze” of free speech.

    The result is the type of doublespeak that is common on our campuses. Steinbach claims fealty to free speech while denouncing its exercise. She laments “how polarized our society has become,” but added to that polarization by expressing her own concerns over the “harm” that Duncan’s speech has brought for many at the school. She asked “how do we listen and talk to each other as people” while maintaining that, by stating his jurisprudential views, Duncan might not be worth the harm (or “squeeze”) to others.

    Anti-free speech advocates often try to portray the exercise of free speech as a complex challenge. It is not. The Duncan controversy shows how the issue is stark and simple. Judge Duncan had a right to speak and others had a right to hear him. Those who disagree with him had a right to protest outside of the event and to ask tough questions inside the event. The only thing that they could not do is disrupt the event itself; to prevent others from hearing from Judge Duncan.

    [ZH: We note that Judge Duncan, a Trump appointee, delivered a speech at the University of Notre Dame last night (March 24), telling listeners that there’s a “vital tradition of free speech in this country” and that students have the right to protest him.

    “It’s a great country, where you can harshly criticize federal judges and nothing bad will happen to you. You might even get praised or promoted,” he said.

    “But make no mistake. What went on in that classroom on March the ninth had nothing to do with our proud American tradition of free speech. It was rather a parody of it.”]

    The solution is also stark and simple, though it has, once again, been ignored by an administration.

    Students who cancel events or classes on campus are taking a position that is not just antithetical to principles of free speech but of higher education. They should be suspended or, in extreme or repeated cases, expelled.

    Otherwise, the law school is not achieving any greater clarity than this column. It is professing an absolute commitment to free speech while declining to enforce that commitment.

    Tyler Durden
    Sat, 03/25/2023 – 15:30

  • 2-Mile Line Of Cars Forms Outside Trump Kick-Off Rally As City Of Waco Predicts 15,000+
    2-Mile Line Of Cars Forms Outside Trump Kick-Off Rally As City Of Waco Predicts 15,000+

    The city of Waco is estimating at least 15,000 attendees for Donald Trump’s 2024 presidential campaign kickoff rally at Waco regional airport on Saturday. While the venue is relatively small as far as airports go, the location was chosen because it’s the most geographically central point in Texas relative to large population centers.

    But this didn’t stop mainstream media from making incredibly superficial comparisons to the Branch Davidians while claiming “Waco is hugely symbolic on the far right.” The Trump campaign supposedly has a “secret agenda” – USA Today tries to claim in an absurd hit-piece based purely on speculation and zero sourcing. Meanwhile, a large pre-dawn line was already evident Saturday morning to get into the rally…

    via Jason Miller, Twitter

    Saturday in Waco marks first full-fledged rally of Trump’s 2024 campaign and it’s attracting national attention especially given the arrest warrant hanging over him, unprecedented for any ex-President.

    Trump grabbed headlines Friday by writing the following on his social media site: “What kind of person can charge another person, in this case a former President of the United States … and leading candidate (by far!) for the Republican Party nomination, with a Crime, when it is known by all that NO Crime has been committed, & also known that potential death & destruction in such a false charge could be catastrophic for our Country?”

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

    Glimpse of the early morning lines…

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

    There are local reports that the line of cars to get into the airport venue stretched to two-miles long ahead of the event fully opening.

    Texas native Ted Nugent announced, “I will unleash a fire-breathing Star-Spangled Banner” at the Waco rally today.

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

    And other big GOP names are expected to be at the rally…

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

    LIVE FEED outside the venue:

    Tyler Durden
    Sat, 03/25/2023 – 15:00

  • Stockman: Raiding The Taxpayer Piggy-Bank
    Stockman: Raiding The Taxpayer Piggy-Bank

    Authored by David Stockman via LewRockwell.com,

    Janet Yellen is one continuous anti-prosperity horror show and the reason is obvious enough. She got her indoctrination at Yale from the granddaddy of Professor Keynes’ US disciples, James Tobin, in the late 1960s and has spent most of her years since then pontificating in academia or dictating from the Fed.

    So now with the arrival of screaming evidence that the banking system desperately needs the disciplining effect of depositor flight, she comes out four-square for euthanizing the $9 trillion of still uninsured deposits in the US banking system.

    But let’s cut to the chase. Banks not disciplined by their depositors and not at risk for deposit flight are dangerous institutions. They leave bank executives free to swing for the fences on the asset-side of their balance sheets without fear that attentive depositors will move their money to safer pastures.

    For crying out loud. It was bad enough during the last several years when deposits were dirt cheap and knuckleheads like those who ran SVB decided to load up their balance sheets with 10-30 year duration assets against overnight demand deposits, most of which were uninsured.

    For the moment that allowed them to book outsized profits and reap the consequent benefit of soaring stock options, but these “profits” were phony as a two-dollar bill. That’s because they were being generated off long-term fixed income assets, the prices of which had nowhere to go except down.

    For want of doubt, here is the inflation-adjusted yield on the 10-year UST through the beginning of the Fed’s belated anti-inflation campaign in March 2022. No one in their right mind should have believed these deeply underwater yields were sustainable; and no banker capable of running even a credit union in Podunk Iowa would have matched up overnight deposits with these long-duration securities—investments which were absolutely heading for a nose-dive in value.

    Indeed, at the March 2022 bottom, the real 10-year UST yield stood at -6.4%, the lowest level in the 60-years shown in the chart, and undoubtedly the lowest rate ever—since prior to that time the nation’s central bank actually believed in sound money, zero inflation and market-based interest rates.

    In a word, anybody who bought long-term treasuries or agency securities at the bottom of the purple line in the chart below should have had their head examined. And most certainly they shouldn’t have been running a multi-billion bank.

    Inflation-Adjusted Yield On 10-Year UST, 1962 to March 2022

    Nonetheless, Janet Yellen and her fellow Washington clowns got themselves warmed-up last week by bailing-out $155 billion of uninsured deposits at SVB—deposits that had been wantonly put in harm’s way by reckless management on a stock-pumping joy ride.

    To wit, between 2020 and 2021 SVB’s assets nearly doubled from $115 billion to $211 billion, while the HTM (securities held to maturity) portion of that balance sheet literally exploded from $17 billion to $98 billion. And more than 95% of this massive HTM book had maturities of 10-years or more!

    Here’s the thing. These fools massively mismatched their book even without the safeguard of deposit insurance. What in the world is going to happen when deposits are 100% insured?

    More importantly, there is no substitute for career-destroying penalties when they result from the towering incompetence embodied in the blow-up of banks like SVB. Yet in that very regard it turns out that one of the senior financial officers at SVB had apparently gotten his financial training at, well, Lehman and Enron!

    So if nothing else, we need deposit flight and bank failures to purge the bad actors, incompetents and reckless cowboys from the banking industry. Yet the de facto policy is now that no depositor can loose money, no bank can fail and no one’s resume should be besmirched.

    Whatever that is, it’s not market-based capitalism. And its going to lead to massive waste and malinvestment, not bank-fueled prosperity.

    In any event, the chart below shows that the banking system is already extremely dangerous, and that compounding the risk via 100% deposit insurance would amount to lighting the match.

    In a word, over the last decade especially the Fed has flooded the financial markets with so much liquidity that the banking system has been literally drowned in excess deposits and reserves. As shown below, banking system deposits have historically been about 40% of GDP, but since the turn of the century that ratio has gone vertical, rising to more than 70% of GDP during the most intense periods of money-printing during 2020-2021.

    The flooding of the zone with deposits has been especially acute since the pre-crisis peak in November 2007. During the 15 years since then, total bank deposits have soared from $6.6 trillion to $17.6 trillion or by 6.2% per annum. And in the period since March 2020, that growth rate has accelerated to nearly 10% per annum.

    By contrast, since Q4 2007 nominal GDP has expanded by just 3.8% per annum. Yet all thing equal, savings and the resulting bank deposits would have grown at the same rate as GDP. They actually grew at almost double the GDP rate, of course, because the Fed was running the printing presses so red hot that much of the new money never left the financial system, backing up into the banking system, instead.

    Bank Deposits As A Percent Of GDP, 1962 to 2022

    Needless to say, all of these deposits had to be put to work, and aggressive managements quickly figured out the new banking ball-game. To wit, under the post Dodd-Frank regulatory regime the banking system was switched from one which was constrained by cash reserves (to meet a surge in depositor withdrawals) to one which was purportedly capital-driven based on the standards fashioned by the Bank for International Settlements.

    Had the regulators been content to go with plain vanilla capital ratios, the new regime might not have been a total disaster. But naturally the bank lobbies got their hands on the rule-writing process and determined that a spade was not a spade.

    That is, not all assets were treated as equal when it came to computing capital ratios. In fact, government debt was determined to be risk-free, requiring no capital backing whatsoever. So banks did what regulators implied they should do—they loaded up with government and agency debt because it required dramatically less capital backing.

    In turn, this “capital-light” regime was great for stock prices and executive stock options. Instead of plowing a goodly portion of earnings into capital for growth they allocated it to dividends and stock buybacks, instead. The gamblers in the stock markets were thrilled.

    For instance, from JPMorgan’s $258 billion of net income posted over 2015-2022 about $189 billion or 73% was paid out to shareholders in the form of stock buybacks ($102 billion) and dividends ($87 billion). During the same period, however, JPM’s total assets grew from $2.352 trillion in 2015 to $3.666 trillion in 2022.

    Since the Fed was fueling asset inflation and repressing money market interest rates during that same period, this 56% growth of total assets was the equivalent of a printing press. The bank’s net interest margin soared, causing its net income to flourish and its market cap to surge from $225 billion in 2015 to a peak of $500 billion in late 2021.

    But all that shareholder magic was not just because Jamie Dimon is some-kind of latter day financial Einstein. JPM’s half trillion dollar market cap was partially thanks to the capital-light regulatory regime.

    Thus, in 2015 JPM’s ratio of book equity to total assets had stood at 10.50%, which would be minimally safe in a world without “too -big-to-fail”. But as it happened, by 2022 its equity ratio had actually fallen to just 7.97% as the bank loaded up on capital-free government securities.

    The implication of that is straight forward. To maintain its 2015 equity ratio JPM would have needed $385 billion of book equity by 2022, not the $292 billion it actually reported. So to actually accomplish the robust asset growth that fueled its fulsome earnings gains it would have needed to retain $93 billion more of its net income over the period.

    That is to say, its payouts to Wall Street in the form of stock-buybacks and dividend would have been cut in half! The gamblers would not have been so pleased.

    Needless to say, based on this illustration it is easy to see why banks went whole hog buying long-duration governments. It drastically conserved capital, permitting fulsome payouts of dividends and stock buybacks.

    On the other hand, the Fed’s ostensible reason for flooding the financial system with cheap credit was to goose bank lending levels, and thereby allegedly fuel stronger economic growth. But again in the case of JPM it is evident that didn’t happen.

    In 2015 its loan book stood at $824 billion, which accounted for 64.4% of its $1.28 trillion of deposits. By 2022, however, its loan book at grown only modestly to $1.11 trillion, but that amounted to just 47.7% of deposits, which had soared to $2.34 trillion.

    In short, even if it was a good idea to artificially stimulate more loans, which it is not, that didn’t happen despite all of the Fed’s reckless money-printing. Instead, the new money flooded into banks, which bought government bonds and thereby aided the Congressional borrow-and-spend contingent, while at the same time enabling reckless bank managements to take on massive amounts of long-term Treasury and Agency securities at the rock-bottom of an interest rate cycle that will not be seen again for decades to come, if ever.

    Yet notwithstanding these realities Yellen last Sunday afternoon launched a campaign to drastically further weaken the banking system by essentially abolishing the last vestiges of depositor scrutiny and discipline. We are referring to the abominable bailout of all depositors at SVB and Signature Bank, but especially the so-called Bank Term Facility Program (BTFP). The latter was bad enough, since it allowed banks to borrow 100 cents on the dollar against 30-year bonds which lost 40% of the market value last year.

    But now Yellen’s gone full retard, suggesting outright guarantees of all deposits, regardless of size:

    “The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader U.S. banking system,” Yellen said. 

    “And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

    As the Wall Street Journal noted this AM “the sound and fury of demands for universal deposit insurance are growing”. For instance, the chronic Wall Street whiner and entitled brat, Bill Ackman, is demanding his bacon be saved via 100% deposit insurance. But so is the usually sensible (on public policy, that is) Elon Musk.

    As the financial press breathlessly reported this AM, the Treasury Department staff is reviewing whether federal regulators have enough emergency authority to temporarily insure deposits greater than the current $250,000 cap on most accounts without formal consent from a deeply divided Congress, according to people with knowledge of the talks.

    The bolded phrase tells you all you need to know. How in the world after at least 40-years of Congress’ refusal to insure bank deposits at 100% regardless of size, can you have a legitimate decision to take on a $9 trillion liability in behalf of the taxpayers by executive decree?

    Indeed, if that isn’t a decision for the representatives of the people to make, we don’t know what is—if you want to even pretend we have a democracy.

    After all, 100% deposit insurance would mean that the $125 billion FDIC fund would be guaranteeing $18 trillion of deposits. They can say that the necessary funds—which might rise into the hundreds of billions or even trillions under certain loss scenarios—would come out of FDIC insurance premiums, but c’mon. That would be a giant tax by any other name because all 108 million US households with bank accounts would ultimately pay the premium in the form of lower rates on their deposits.

    Not surprisingly, of course, the Washington lobbies have already gotten involved big time in attempting to force thru this profoundly anti-democratic action. To wit, the Mid-Size Bank Coalition of America, which includes banks with assets of as much as $100 billion, urged regulators to lift the current cap on deposit insurance, according to a March 17 letter reviewed by Bloomberg. The organization expressed concern that, if another regional lender fails, more depositors will move their money to the nation’s largest banks, regardless of the underlying health of their smaller competitors.

    So what!

    Perhaps these virtuous small bankers should have been thinking about the risk of deposit flight when they loaded up their balance sheets with higher yielding assets bearing both interest rate and/or credit risks. Absent these factors, in fact, there is no reason why a conservative bank would be at risk of deposit flight or be unable to weather a temporary flight by borrowing at the Fed’s discount window.

    That’s exactly what happened in the last week. The weekly change in discount window borrowings soared to $138 billion, nearly on par with the $180 billion gain during the traumatic first week of October 2008.

    Weekly Change In Fed Discount Window Borrowings, 1980 to 2023

    Of course, the crybabies in the small and mid -sized bankers brigade don’t like the discount window because there is allegedly a stigma attached to it, and because the current discount rate is 4.75%—well above their average deposit costs. In short, they want some cheap money from Uncle Sam so they can run a asset/liability mismatch, book fulsome earnings and laugh all the way to the bank account for their stock options.

    At the end of the day, we are truly getting to the end of the road with this form of crony capitalism and socialization of losses for the big guys wearing the long-pants.

    While the usual bipartisan suspects are now busy fixing to pass legislation raising the deposit insurance limit to way above $250,000, at least the House Freedom Caucus has figured out what is at stake and has come out solidly against a 100% guarantee.

    Since they won an option to call for Speaker McCarthy’s removal at the time of his election to the job, let’s hope they are ready, willing and able to use it when any semblance of the 100% deposit insurance legislation is brought to the House floor. That’s how much is really at stake.

    “Any universal guarantee on all bank deposits, whether implicit or explicit, enshrines a dangerous precedent that simply encourages future irresponsible behavior to be paid for by those not involved who followed the rules,” the House Freedom Caucus said in a statement.

    *  *  *

    Reprinted with permission from David Stockman’s Contra Corner.

    Tyler Durden
    Sat, 03/25/2023 – 14:30

  • Russia To Station Tactical Nukes In Belarus By July, Putin Says On State TV
    Russia To Station Tactical Nukes In Belarus By July, Putin Says On State TV

    Russia has reportedly struck a deal with neighboring Belarus to station tactical nuclear weapons on its territory, Tass news agency quoted Russian President Vladimir Putin as saying on Saturday.

    Belarusian President Alexander Lukashenko has long raised the issue of stationing tactical nuclear weapons in Belarus, which borders Poland, Putin said in comments broadcast on state TV Saturday..

    “We agreed with Lukashenko that we would place tactical nuclear weapons in Belarus without violating the nonproliferation regime,” Tass quoted Putin as saying.

    Russia’s tactical nuclear weapons might arrive to Belarus as early as this summer, Putin said.

    Moscow is finishing the construction of a specialized storage for such arms amid repeated calls by Minsk to deploy tactical nuclear weapons on the Belarusian territory, he added.

    The storage in Belarus will be ready on July 1, Putin told Russia 24 TV.

    Putin also said that Moscow does not plan to hand over control over any tactical nuclear weapons to Minsk but would only deploy its own arms to the Belarusian territory.

    He did not specify when exactly the weapons would be transported to the new storage.

    Bloomberg reports that Russia has already stationed 10 aircraft in Belarus capable of carrying tactical nuclear weapons, with Putin noting that Iskander short-range missiles – capable of carrying nuclear warheads – had also been sent to Belarus, and training for crews would begin there on April 3.

    There has been no response from Washington yet to Putin’s statement, but we note that Putin claimed such a move would not violate nuclear nonproliferation agreements, pointing out that the US has “long deployed their tactical nuclear weapons on the territory of their allied countries,”

    Tyler Durden
    Sat, 03/25/2023 – 13:59

Digest powered by RSS Digest