- Unipolar Vs Multipolar: The Death Of McKinley & The Loss Of America's Soul
Unipolar Vs Multipolar: The Death Of McKinley & The Loss Of America’s Soul
Authored by Matthew Ehret via The Saker blog,
On December 17, 2020, a new US Maritime strategy was unveiled putting into practice the regressive concepts first outlined in the early National Defense Strategy 2020 doctrine which target China and Russia as the primary enemies of the USA and demanding that the USA be capable to “defeat our adversaries while we accelerate development of a modernized integrated all-domain naval force of the future”.
The Pentagon’s Advantages at Sea: Prevailing with Integrated All-Domain Naval Power continued by saying “China’s and Russia’s revisionist approaches in the maritime environment threaten US interests, undermine alliances and partnerships and degrade the free and open international order… moreover, China’s and Russia’s aggressive naval growth and modernization are eroding US institutional advantages.”
The document continued to describe that “we must operate more assertively to prevail in day-to-day competition as we uphold the rules-based order and deter our competitors from pursuing armed aggression… ready, forward-deployed naval forces will adopt a more assertive posture in day to day operations”
For anyone who has been paying attention to the vast growth of the Pentagon’s Full Spectrum containment policy around China’s perimeter begun with Obama’s Asia Pivot, it may appear as though these words are not new, but just a continuation of American unipolar agenda, Pacific war games, and psychological projection onto perceived enemies, that have been underway for years. While this is certainly true, it must be noted that they are occurring at a time that NATO 2030 has enshrined an anti-China military posture into the Trans Atlantic security doctrine which had formerly channeled most of its hate purely onto Russia.
The fact is those unipolar zombies programmed to think in no other terms but global post-nation state dominance are deathly afraid of the Russia-China bond of survival which has created a uniquely viable foundation for an alternative economic/security architecture for the world. This model is based on a system of finance that defines money not in speculative but rather long-term development of the real economic foundations of life. It also features a strong emphasis on win-win cooperation as opposed to Hobbesian zero-sum logic dominant among western powers, and it also finds itself driven by OPEN system economic practices shaped by unbounded scientific and technological progress that once upon a time guided America’s better traditions.
With the obvious threat of nuclear war breaking out between a collapsing unipolar order in the west and an emergent Multipolar alliance, it is important to review what possible latent policy traditions may yet be revived within America’s history which certain forces have worked very hard to scrub out of the historical record and memory. This study will take us to the incredible fights that arose over America’s identity at the turn of the 20th century during the period of President William McKinley and the treasonous anglophile President of vice, Theodore Roosevelt.
Munroe Doctrine or Empire?
As Martin Sieff eloquently laid out in his recent article, President McKinley himself was an peacemaker, anti-imperialist of a higher order than most people realize. McKinley was also a strong supporter of two complementary policies: 1) Internally, he was a defender of Lincoln’s “American system” of protectionism, internal improvements and black suffrage and 2) Externally, he was a defender of the Munroe Doctrine that defined America’s anti-imperial foreign policy since 1823.
The Munroe Doctrine’s architect John Quincy Adams laid out this principle eloquently on July 4, 1821:
“After fifty years the United States has, without a single exception, respected the independence of other nations, while asserting and maintaining her own.
That the United States does not go abroad in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.
That by involving itself in the internal affairs of other nations, the United States would destroy its own reason of existence; the fundamental maxims of her policy would become, then, no different than the empire America’s revolution defeated. It would be, then, no longer the ruler of itself, but the dictator of the world.”
America’s march is the march of mind, not of conquest.
Colonial establishments are engines of wrong, and that in the progress of social improvement it will be the duty of the human family to abolish them”.
It was an aging John Quincy Adams whom a young Abraham Lincoln collaborated with in ending the imperial Mexican-American war under Wall Street stooge James Polk in 1846. When Adams died in 1848, Lincoln picked up the torch he left behind as the London-directed “proto deep state” of the 19th century worked to dissolve the republic from within. The foreign policy conception laid out by Adams ensured that America’s only concern was “staying out of foreign imperial entanglements” as Washington had earlier warned and keeping foreign imperial interests out of the Americas. The idea of projecting power onto the weak or subduing other cultures was anathema to this genuinely American principle.
A major battle which has been intentionally obscured from history books took place in the wake of Lincoln’s murder and the re-ascension of the City of London-backed slave power during the decades after the Union victory of 1865. On the one hand America’s role in the emerging global family of nations was being shaped by followers of Lincoln who wished to usher in an age of win-win cooperation. Such an anti-Darwinian system which Adams called “a community of principle” asserted that each nation had the right to sovereign banking controls over private finance, productive credit emissions tied to internal improvements with a focus on continental (rail/road) development, industrial progress and full spectrum economies. Adherents of this program included Russia’s Sergei Witte and Alexander II, Germany’s Otto von Bismarck, France’s Sadi Carnot, and leading figures within Japan’s Meiji Restoration.
On the other hand, “eastern establishment families” of the USA more loyal to the gods of money, hereditary institutions and the vast international empire of Britain saw America’s destiny tied to an imperial global partnership with the Mother country. These two opposing paradigms within America have defined two opposing views of “progress”, “value”, “self-interest” and “law” which have continued to shape the world over 150 years later.
William Gilpin vs Alfred Mahan: Two Paradigms Clash
A champion of the former traditionally American outlook who rose to the international scene was William Gilpin (1813-1894). Gilpin hailed from a patriotic family of nation builders whose patriarch Thomas Gilpin was a close ally of Benjamin Franklin and leading member of Franklin’s Philosophical Society. William Gilpin was famous for his advocacy of America’s trans continental railway whose construction he proselytized as early as 1845 (it was finally begun by Lincoln during the Civil War and completed in 1869 as I outlined in my previous paper How to Save a Dying Republic).
In his thousands of speeches and writings, Gilpin made it known that he understood America’s destiny to be inextricably tied to the ancient civilization of China- not to impose opium as the British and their American lackies were want to do, but to learn from and even emulate!
In 1852, Gilpin stated:
“Salvation must come to America from China, and this consists in the introduction of the “Chinese constitution” viz. the “patriarchal democracy of the Celestial Empire”. The political life of the United States is through European influences, in a state of complete demoralization, and the Chinese Constitution alone contains elements of regeneration. For this reason, a railroad to the Pacific is of such vast importance, since by its means the Chinese trade will be conducted straight across the North American continent. This trade must bring in its train Chinese civilization. All that is usually alleged against China is mere calumny spread purposefully, just like those calumnies which are circulated in Europe about the United States”.
With Lincoln’s 1861 presidential victory, Gilpin became Lincoln’s bodyguard and ensured the president survived his first assassination attempt en route to Washington from Illinois. During the Civil War, Gilpin was made Colorado’s first Governor where he successfully stopped the southern power from opening up a western front during the war of secession (applying Lincoln’s greenback system to finance his army on a state level) and winning the “Battle of Glorieta Pass”, thus saving the union.
After the war Gilpin became a leading advocate of the internationalization of the “American system of political economy” which Lincoln applied vigorously during his short-lived presidency. Citing the success of Lincoln’s system, Gilpin said:
“No amount of argument will make America adopt old world theories… To rely upon herself, to develop her own resources, to manufacture everything that can possibly be manufactured within her territory- this is and has been the policy of the USA from the time of Alexander Hamilton to that of Henry Clay and thence to our own days”.
Throughout his speeches Gilpin emphasizes the role of a U.S.-Russia alliance:
“It is a simple and plain proposition that Russia and the United States, each having broad, uninhabited areas and limitless undeveloped resources, would by the expenditure of 2 or 3 hundred millions apiece for a highway of the nations threw their now waste places, add a hundredfold to their wealth and power and influence”
And seeing in China’s potential the means to re-enliven the world- including the decadent and corrupt culture of Europe:
“In Asia a civilization resting on a basis of remote antiquity has had, indeed, a long pause, but a certain civilization- although hitherto hermetically sealed up has continued to exist. The ancient Asiatic colossus, in a certain sense, needed only to be awakened to new life and European culture finds a basis there on which it can build future reforms.”
In opposition to the outdated British controls of “chock points” on the seas which kept the world under the clutches of the might of London, Gilpin advocated loudly for a system of internal improvements, rail development, and growth of the innate goodness of all cultures and people through scientific and technological progress. Once a global system of mutual development of rail were established, Gilpin stated “in the shipment of many kinds of raw and manufactured goods, it will largely supersede the ocean traffic of Great Britain, in whose hands is now carrying the trade of the world.”
Gilpin’s vision was most clearly laid out in his 1890 magnum opus “The Cosmopolitan Railway” which featured designs for development corridors across all continents united by a “community of principle”.
Echoing the win-win philosophy of Xi Jinping’s New Silk Road today, Gilpin stated:
“The cosmopolitan railway will make the whole world one community. It will reduce the separate nations to families of our great nation… From extended intercommunication will arise a wider intercourse of human ideas and as the result, logical and philosophical reciprocities, which will become the germs for innumerable new developments; for in the track of intercommunication, enterprise and invention invariably follow and whatever facilitates one stimulates every other agency of progress.”
Mahan Derails America’s Anti-Imperial Identity
Alfred Thayer Mahan (1840-1914) represented an opposing paradigm which true American statesmen like Lincoln, Secretary of State James Blaine, William Seward, President Grant, William Garfield, and McKinley detested. Sadly, with McKinley’s murder (run by an anarchist ring with ties to British Intelligence) and the rise of Teddy Roosevelt in 1901, it was not Gilpin’s but rather Mahan’s worldview which became the dominant foreign policy doctrine for the next 120 years (despite a few brief respites under FDR and JFK).
Mahan is commonly credited for being a co-founder of modern geopolitics and an inspiration for Halford Mackinder. Having graduated from West Point’s naval academy in 1859, Mahan soon became renowned as a total failure in actual combat having crashed warships repeatedly into moving and stationary objects during the Civil War. Since reality was not his forte, Mahan focused his post-war career on Ivory tower theorizing gushing over maps of the world and fawning over Britain’s power as a force of world history.
His “Influence of Sea Power Upon History 1660-1783 published in the same year that Gilpin published his Cosmopolitan Railway (1890) was a total break from the spirit of win-win cooperation that defined America’s foreign policy. According to the Diplomat, this book soon “became the bible for many navies around the world” with the Kaiser of Germany (now released from the influence of the great rail-loving statesman Otto von Bismarck whom he fired in 1890) demanding all of his offers read. Later Teddy Roosevelt ordered copies for every member of Congress. In Mahan’s book, the geopolitician continuously asserts his belief that it is America’s destiny to succeed the British Empire.
Taking the British imperial definition of “commerce” which uses free trade as a cover for the military dominance of weak nations (open borders and turning off protectionism simply makes a people easier to rob), Mahan attempts to argue that America need not continue to adhere to “outdated” habits like the Munroe doctrine since the new order of world empires demands America stay relevant in a world of sea power and empire. Mahan writes: “The advance of Russia in Asia, in the division of Africa, in the colonial ambitions of France and in the British idea of Imperial Federation, now fast assuming concrete shape in practical combined action in South Africa” demands that the USA act accordingly.
Attempting to refute the “outdated habits” of rail development which consume so many foolish statesmen around the globe, Mahan states: “a railway competes in vain with a river… because more facile and copious, water traffic is for equal distances much cheaper and because cheaper, more useful”. Like those attacking today’s Belt and Road Initiative, the power of railways is that their returns are not measurable by simple monetary terms, but are rather QUALITATIVE. The long-term construction of rail systems not only unite divided people, increase manufacturing and industrial corridors but also induce closer powers of association and interchange between agriculture and urban producers. These processes uplift national productive powers building full spectrum economies and also a culture’s capacity for creative thought.
The attempt made to justify sea traffic merely because “larger amounts of goods can be shipped” is purely quantitative and monetaristic sophistry devoid of any science of real value.
While Gilpin celebrates the successful awakening of China and other great nations of the world, in the Problem of Asia (1901) Mahan says:
“It is scarcely desirable that so vast a proportion of mankind as the Chinese constitute should be animated by but one spirit”. Should China “burst her barriers eastward, it would be impossible to exaggerate the momentous issues dependant upon a firm hold of the Hawaiian islands by a great civilized maritime power.”
Mahan’s adherence to social Darwinism is present throughout his works as he defines the political differences of the 3 primary branches of humanity (Teutonic, Slavic and Asiatic) as purely rooted in the intrinsic inferiority or superiority of their race saying: “There are well recognized racial divergencies which find concrete expression in differences equally marked of political institution, of social progress and of individual development. These differences are… deep seated in the racial constitution and partly the result of the environment”. Mahan goes onto restate his belief that unlike the superior Teutonics “the Oriental, whether national or individual does not change” and “the East does not progress”.
Calling China a carcass to be devoured by an American eagle, Mahan writes: “If life departs, a carcass can be utilized only by dissection or for food; the gathering to it of the eagles is a natural law, of which it is bootless to complain… the onward movement of the world has to be accepted as a fact.”
Championing an Anglo American alliance needed to subdue and “civilize” China as part of the post-Boxer Rebellion, Mahan says “of all the nations we shall meet in the East, Great Britain is the one with which we have by far the most in common in the nature of our interests there and in our standards of law and justice”.
In case there was any doubt in the minds of Mahan’s readers as to the MEANS which America should assert its dominance onto China, Mahan makes clear his belief that progress is caused by 1) force and 2) war:
“That such a process should be underlain by force… on the part of outside influences, force of opposition among the latter themselves [speaking of the colonial European monarchies racing to carve up China in 1901 -ed] may be regrettable, but it is only a repetition of all history… Every step forward in the march that has opened in China to trade has been gained by pressure; the most important have been the result of actual war.”
A Last Anti-Imperial Push
The chaos induced by the anti-foreigner Boxer Rebellion of 1899 which spread quickly across China resulted a heated battle between imperial and anti-imperial forces in both Russia and the USA. Where Transport Minister Sergei Witte who spearheaded the development of the Trans Siberian rail line (1890-1905) tried to avoid military entanglement, McKinley was busy doing the same.
The boxers soon attacked the Manchurian rail connecting Russia to China by land and Witte succumbed to pressure to finally send in troops. The reformers of China who attempted to modernize with American and Russian assistance under Emperor Kuang Hsu and Li Hung Chang fell from power as total anarchy reigned. The outcome of the Boxer chaos involved the imperial powers of France, Germany and England demanding immense financial reparations, ownership of Chinese territory and mass executions of the Boxers.
While McKinley is often blamed for America’s imperial turn, the reality is just the opposite.
The Spanish-American war begun in 1898 was actually launched unilaterally by Anglophilic racist Theodore Roosevelt who used the 4 hour window he had while Undersecretary of the Navy (while the actual Secretary was out of Washington) to send orders to Captain Dewey of the Pacific fleet to engage in a fight with the Spanish over their Philippine territories. McKinley had resisted the war hawks until that point but found himself finally bending to the momentum. In China, McKinley, like Witte worked desperately to reject taking territory resulting in great fears from the British oligarchy that a U.S.-Russia alliance led by McKinley and Witte was immanent.
The assassination of McKinley on September 18, 1901 catapulted Mahan-loving Vice President Teddy Roosevelt into high office, who enmeshed America into a new epoch of Anglo-American imperialism abroad, a growth of eugenics and segregation at home and the creation of an independent police state agency called the FBI.
“Roosevelt devoted his next eight years in the presidency and the rest of his life to integrating the United States and the British Empire into a seamless web of racial imperialist oppression that dominated Latin America, sub-Saharan Africa and Asia and that destroyed the cultural history and heritage of the Native North American nations.”
In Russia, the 1902 Anglo-Japan Treaty led to the disastrous Japan-Russo war of 1905 which devastated the Russian navy, ended the political career of Sergei Witte and threw Russia into chaos leading to the fall of the Romanovs (Czar Nicholas II was the last statesman occupying high office that this author is aware of to have actively promoted the Bering Strait Tunnel rail connection in 1906. It wasn’t until FDR’s Vice President Henry Wallace met with Foreign Minister Molotov in 1942 that the idea resurfaced once more).
In his Two Peoples One Friendship, Wallace described his discussions with Foreign Minister Molotov in 1942 saying:
“Of all nations, Russia has the most powerful combination of a rapidly increasing population, great natural resources and immediate expansion in technological skills. Siberia and China will furnish the greatest frontier of tomorrow… When Molotov [Russia’s Foreign Minister] was in Washington in the spring of 1942 I spoke to him about the combined highway and airway which I hope someday will link Chicago and Moscow via Canada, Alaska and Siberia. Molotov, after observing that no one nation could do this job by itself, said that he and I would live to see the day of its accomplishment. It would mean much to the peace of the future if there could be some tangible link of this sort between the pioneer spirit of our own West and the frontier spirit of the Russian East.”
While the “open door” rape of the China was attempted by the Anglo-Americans, a fortunate rear guard maneuver orchestrated by another follower of Abraham Lincoln named Sun Yat-sen resulted in a surprise overthrow of the Manchu dynasty in 1911 and the institution of the Republic of China with Sun Yat-sen as the acting President. While Sun Yat-sen sided with Gilpin and Lincoln in opposition to the Mahanists on the issue of rail and industrial development (illustrated in his extraordinary 1920 International Development of China program which called for 160 000 km of rail, water diversion projects, ports and 1.5 million km of paved roads- illustrated below), the intrigues that sank the world into World War I made any hopes of this early development of China impossible in Sun Yat-sen’s lifetime.
Expressing his own deep understanding of these top down tactics of world history (and the recognition that the same British imperial forces that orchestrated the US Civil War were planning to do the same to China), Sun Yat-sen wrote in 1912:
“We understand too well that there are certain men of power—not to include for the present, certain nations—who would view with a greater or lesser satisfaction an internal rupture in the new Republic [of China]. They would welcome, as a move toward the accomplishment of their own ends and designs, a civil war between the provinces of the North and the South; just as, 50 years ago, there was applause in secret (in certain quarters) over the terrible civil strife in the United States.
Americans of today who were alive in those dark days of the great republic will remember the feelings in the hearts of the people—the bitter and painful thoughts that arose from the knowledge that foreigners were hoping and praying for the destruction of the American Union.
Had the war been successful from the South’s standpoint, and had two separate republics been established, is it not likely that perhaps half a dozen or more weak nations would have eventually been established? I believe that such would have been the result; and I further believe that with the one great nation divided politically and commercially, outsiders would have stepped in sooner or later and made of America their own. I do not believe that I am stating this too forcibly. If so, I have not read history nor studied men and nations intelligently.
And I feel that we have such enemies abroad as the American republic had; and that at certain capitals the most welcome announcement that would be made would be that of a rebellion in China against the constituted authorities.
This is a hard statement to make; but I believe in speaking the truth so that all the world may know and recognize it.”
Today’s Belt and Road Initiative, and strategic friendship established between Russia and China has re-awoken the forgotten vision of William Gilpin for a world of cooperating sovereign nation states. Does the USA have the moral ability to avoid disintegration by accepting a Russia-U.S.-China alliance needed to revive McKinley’s American System or will we slip into a new Great Reset and World War?
Tyler Durden
Sat, 12/26/2020 – 23:30 - How The Chinese Use Illegal Online Gambling And Tether To Launder Over $1 Trillion Yuan
How The Chinese Use Illegal Online Gambling And Tether To Launder Over $1 Trillion Yuan
It has long been known that over the past decade Chinese oligarchs who wanted to bypass Beijing’s capital controls and anti-money laundering firewall, would smuggle billions of dollars outside of China by using the Macau casino money-laundering infrastructure, prompting Beijing to crack down aggressively on this popular firewall loophole, with mixed success.
What is less known is that as the capital controls game of cat and mouse escalated in recent years, so have Chinese money laundering tactics and now according to Caixin, Chinese citizens launder as much as $153 billion per year with the help of online gambling and such cryptocurrency as tether, which has long been rumored to be a key driver of upside into bitcoin (the same bitcoin we said in 2015 when it was $250 would soar thanks to Chinese attempts to circumvent the capital firewall… we were right).
Here is the story of how Beijing made this starting discovery, courtesy of Caixin:
A migrant worker from the northern Chinese city Baoding “loaned” three credit cards under his name to friends to offset 2,500 yuan ($380) of debt he owed. He never imagined he would later be arrested for illegal sale of credit cards that were used by criminal groups to launder money for online gambling.
This arrest was part of Chinese authorities’ nationwide “Card Breaking Campaign,” an operation to crack down on illicit bank card transactions and bank card sales to combat telecommunications fraud and cross-border online gambling. The campaign aims to cut off links between mobile phone sim cards and bank cards, and users who are not the registered card holders. Also included are online payment accounts such as Tencent’s WeChat Pay and Alibaba’s Alipay.
This new type of crime has created an illegitimate industry employing 5 million to 6 million people involving information technology (IT), payment settlements and operations, according to an IT department official at the Ministry of Public Security. The complex payments and money laundering system ropes in small individual players in some of China’s remotest places like the migrant worker in Baoding who loan or lease financial credentials to offshore criminal groups, which then help illegal gamblers hide money from authorities, often using Tether.’s USDT cryptocurrency.
In the first nine months of 2020, police cracked down on 1,700 online gambling platforms and 1,400 underground banks involving more than 1 trillion yuan ($153 billion) of illegal transactions, data from the Ministry of Public Security showed. That compared with 7,200 online gambling cases in 2019 totaling 18 billion yuan.
In the cross-border online gambling chain, mobile payments play an increasingly important role. As the front-runner in mobile payments, China has been aggressively promoting payments via mobile phone scans of QR codes, a type of barcode. In China, even a street food vendor owns a unique QR code for receiving mobile payments. The convenience associated with mobile payments has also attracted criminal gambling groups.
Running points platforms
As all forms of gambling are illegal under Chinese law, if a Chinese citizen wants to bet using offshore online gambling sites, the first obstacle is depositing money at gambling platforms. These operations often use leading e-commerce platforms and delivery companies to facilitate massive fund transactions disguised as legitimate online shopping deals.
For example, a Caixin reporter tried to deposit 100 yuan via online banking to a gambling site called “DreamGaming.” The transaction showed the money went to an Alipay account linked to a grocery store. That gambling site can no longer be accessed as a notice says “it contains illegal content.”
Online gambling sites usually use so-called “running points platforms” to launder gamblers’ funds to look like legitimate payments. To deposit funds, a gambler follows a payment link on a site that connects to a running points platform. This platform is like a car hailing system. A registered member of the platform will “grab orders” and upload the funds using someone else’s purchased or borrowed bank account. Then the money’s transferred to the offshore gambling site. The platforms make a commission of 2.5% to 4% on the transactions, and the members get a cut of 1% to 2%, according to police.
Chinese social media such as WeChat and Weibo often carry advertisements recruiting part-time workers. Many of these advertisements are posted by running points platforms, which would pay 500–1,000 yuan to each recruited member for their ID numbers, bank cards, mobile phone numbers and bank USB-shield, which is a security tool that looks similar to a flash disk and acts as a shield to protect user’s money in internet banking. If more information can be provided, such as a business license, business seal, business bank account and USB-shield, the price can go up to 1,500–2,000 yuan for the whole set.
To some young jobless people from smaller cities and rural areas, the chance to generate 1,000 yuan from leasing their bank accounts or QR codes is a big temptation, said an insider at a payment process company. And the more transactions go through their accounts, the more they can make in commissions. Of course, they run the risk of arrest for participating in illegal activities. In June, police in southwestern Guangxi province destroyed a cross-border online gambling operation involving 30 billion yuan of fund transfers through running points platforms.
Another channel for depositing money into online gambling sites is through mobile phone credit refills. These transactions are disguised as normal credit additions for mobile phone accounts but actually funnel money into gambling sites.
Bank cards confiscated by Guangdong police in authorities’ “Card Breaking Campaign.” Cryptocurrency money laundering
After the running points platforms collect money from gamblers, how does the money get to the gambling operators? The traditional path is through underground banks, which facilitate illegal foreign exchange and cross-border trading. These illegal underground banks have long existed in China to help citizens transfer money out of the country to buy property abroad.
A new practice involves Tether (SDT), a cryptocurrency linked to the value of the U.S. dollar. The original goal of the cryptocurrency was to solve the problem of excessive value volatility. In 2019, USDT surpassed Bitcoin as the most-traded cryptocurrency on the market by volume.
USDT is widely used in money laundering, gambling and other illegal activities, an executive at a blockchain platform told Caixin. In October, a local branch of the People’s Bank of China in the southern Chinese city Huizhou conducted mass arrests related to cross-border online gambling, the first crackdown on activities involving USDT. In a blog post, the central bank said 77 suspects were arrested for using USDT in cross-border transactions to launder gambling proceeds worth nearly 120 million yuan.
Most USDT transactions in the Huizhou case were made on Huobi, a Seychelles-based cryptocurrency exchange founded by Tsinghua University graduate and former Oracle engineer Leon Li. Online gambling sites use gamblers’ funds to buy USDT on Huobi and then sell the cryptocurrency, thus “washing” the funds into legitimate cash flow, Huizhou police told Caixin.
China’s public security authorities ordered Huobi and other USDT exchange platforms to strengthen their anti-money laundering efforts by adding video identification verification during transactions to make sure bank cards linked to a trader’s account actually belong to the trader. But the exchanges haven’t done so. An executive at Huobi told Caixin the company completed its biggest upgrade in anti-money laundering risk control in August, without specifying the measures taken.
Huobi’s Li and Bitcoin exchange OKEx founder Xu Mingxing were reportedly cooperating with police on investigations of money laundering for online gambling.
The running points platforms and cryptocurrency exchanges place their servers offshore, increasing the investigative challenge facing police, Huizhou police said.
Difficulty to identify
For online payment platforms such as WeChat Pay and Alipay, the great challenge is to identify which users’ accounts are actually running points platforms. Looking at data of accounts that might be used by running points platforms, the amount of transactions is usually small, and many of them seem to be normal payments for consumption, said Guo Qianting, general manager of Ant Group’s anti-money laundering center. Finding running points platforms among regular users is like looking for a needle in a haystack, she said.
Another money laundering channel is gig job platforms, which provide contractors and payroll services to employers in the food delivery, ride-hailing and e-commerce sectors. More than 10,000 such platforms have emerged in China since 2018. Some of them are service providers for legitimate companies including Meituan Dianping and Didi Chuxing. But many others are used to launder money for online gambling.
In May, a local branch of Agricultural Bank of China in Xiangtan, Hunan province, detected suspicious transactions at a gig job human resources provider. The company had more than 200 million yuan of cash transactions in just a dozen days, and most of the transactions took place during abnormal business hours. Police found that the company laundered money for telecommunications fraud groups.
Last month, another gig job platform backed by Ant Group, China’s dominant online payment service provider, was investigated for suspected money laundering activities. Beijing Bujiao Technology Co. Ltd. was suspected of having falsely issued more than 1.3 billion yuan of value-added tax invoices. Some of the company’s money laundering activities involved cross-border gambling, Caixin learned.
Tyler Durden
Sat, 12/26/2020 – 23:00 - The Gray Curtain Descends, Part 1
The Gray Curtain Descends, Part 1
Authored by Robert Gore via Straight Line Logic,
Let’s dispense with the obscenity that expressed intentions excuse all crimes and consequences.
It’s a close contest between which officially approved story is more implausible: Coronavirus as the Scourge of Humanity or America’s Free and Fair Election. The former enabled the latter, and they were propagated by the same people pursuant to an all-in power grab. Both are riddled with glaring inconsistencies and fraud, none of which are mentioned in polite society.
It was strange, she thought, to obtain news by means of nothing but denials, as if existence had ceased, facts had vanished and only the frantic negatives uttered by officials and columnists gave any clue to the reality they were denying.
Atlas Shrugged, Ayn Rand, 1957
The stories’ propagators don’t address the inconsistencies and fraud because they can’t; they simply deny their existence. They suppress questions, inquiry, and exploration of actual evidence and facts, and promote mindless slogans. The legacy media censorship has been overt, but not as effective as hoped, thanks in large part to the alternative media. The censorship itself is a red flag. If the approved stories are Shining Truth, why can’t they bear challenge?
The propagandists are suppressing free inquiry and debate, and they’re about to eliminate it entirely. With next month’s ascension of Biden and Harris and the predatory and parasitic ruling cabal to which they answer, the prize is in site. They see no need to continue feigning fealty to anything other than subjugation and control.
For the most part they’ve even dropped their shopworn rhetoric of concern for their subjects. In the good old days there was “for the people” codswallop with the goodies, which you got as long as you did what you were told. The new diktat will be to do as you’re told or else, but there will be no goodies; governments are bankrupt and the ruling cabal has no ability to produce. They will not be bothered by destitution and deaths among the ruled, that’s a feature, not a bug. Indeed, any detectable concern would be grounds for immediate expulsion from the cabal.
Let’s dispense with the obscenity that expressed intentions excuse all crimes and consequences. Totalitarianism has never produced anything but destruction, destitution, and death and never will, regardless of the totalitarians’ lofty rhetoric. Totalitarians are vultures, not eagles, and the current kettle of vultures intend to dine on the corpse of history’s most advanced civilization.
Draft animals work harder for a morsel or kind words than for the whip or switch, but somehow humans are different. Whips, switches, prisons, and subjugation pave the road to utopia. When they instead lead to a charnel house, that’s not the fault of the whippers, switchers, wardens, or subjugators. Except it is. Orwell said it best: “The object of power is power.” Power’s trite slogans and rationalizations don’t excuse its murderous depredations, they only increase its inescapable guilt.
Compromise between good and evil spells death for the good. If I ask you to drink a cup of cyanide and you refuse, but we compromise on half a cup, who wins?
It’s these sort of compromises, exacted bit by bit over decades, that have destroyed a once great nation. It’s understandable how it happened. There’s a problem and more power for the rulers is always the solution: a Civil War, central bank fiat debt, an income tax, make the world safe for democracy, a New Deal, Frontier, or Covenant, Hope and Change, leader of the Free World, wars on poverty, drugs, terror, and now, germs, and so on.
The compromises serve as precedents that launch the next compromises and consequent government accretions of power. (The Civil War was precedent for both the income tax and fiat currency 48 years later.) Solutions are always presented in a blinding blaze of propaganda. There are always the unblinded few who question and dissent. They are always ostracized or worse.
The rest learn the lesson. Herd behavior is hard-wired. Like a pack of wildebeests after one spots a lion, there are times when reflexive flight is the right response. However, nothing government does is quick enough to be considered reflexive; there’s been time enough to question, analyze, and protest virtually everything the US government has done since its inception. Unfortunately, at the individual level, sticking with the pack often makes perfect sense. To be the one who refuses to obey, or to even question the dictates of a powerful government that is both stoking and benefiting from herd frenzy, is to risk ruin, imprisonment, and sometimes, death.
The crowd does what the crowd does. Regardless of the arguments, and perhaps the insults and deprecations from the few outside the crowd, it rationalizes its own behavior. Who are we to question? It’s still a great nation, it could be worse. Why risk our comfortable lifestyle for intangible principles? Better safe than sorry. And there’s the secret thought: yes, there may be unfortunate consequences, but I’ll be dead by then.
Except the unfortunate consequences have arrived. We’re confronted by a dystopian totalitarianism the design of which the totalitarians are no longer trying to hide. Virtually everything has already been compromised and the meager remnant of freedom is on the table. As the crowd is prodded into the cattle cars (not social distancing, their well-being no longer even a faux concern) uneasy whispers circulate: is the final destination the abattoir?
However flimsy the excuses offered by the ruled have been, they’ve at least had the usual rationalizations of cowardice. There’s no excuses or rationalizations for our rulers. They want to impoverish, subjugate, or kill us. Don’t give them too much credit believing the latter isn’t the preferred option. Such deeds never spring from motives other than all-encompassing, unremitting malice and hate. The honest and honorable are left to wonder what, if anything, has replaced those forfeited souls. We may never know the answer.
What do they get from their brave new world? Adding to their already substantial fortunes? Still more power over an impoverished, cowed population, more transhuman robots than people, dutifully following orders but unable to produce anything beyond what is programmed into their quantum microchips, bereft of the sparks of inquiry, innovation and joy that propels humanity and make life worth living? Do they not know that a gray curtain will descend over the dazzling world of wealth and privilege they now inhabit? That turning people into appliances plugged into an all-seeing internet will leave everyone in a electric panopticon that’s as sterile and joyless for the watchers as the watched?
The gray curtain descends. What further demonstration is necessary of impoverish, subjugate, and kill than Coronavirus totalitarianism, which has done all three? It’s the preview of coming attractions. The last flimsy excuse for the ruled is the one that would presumably be offered by roadkill if it wasn’t dead: it was too stunned by the headlights to think or act. The moment is nigh: you’ll be totalitarian roadkill if you’re too stunned by the brazen evil unfolding to think and act, now.
Joe Biden and Kamala Harris are no more the rightful president and vice president than I would be the rightful owner of your house if I forced my way in, held a gun to your head, and made you sign over the deed. Unlike the solipsistic plaints after President Trump won a semi-legitimate election in 2016 (“Not my president!”), Joe Biden will not be my or anyone else’s rightful president in 2021. (The 2016 election probably was rigged—for Hillary—the riggers just didn’t do an adequate job, unlike 2020.) Biden and his partner in crime are usurpers and SLL will not refer to either one by their stolen titles. Until the inauguration SLL will refer to Biden as Not Our President-Elect, or NOPE. They’re small gestures, but revolutions start with small gestures.
NOPE and Vice-NOPE will be nominal capos of the largest organized crime syndicate in history. Unchallenged crime and evil are not static; they get worse. Investing any hope in “things will get better” has been a loser for more than a century. Governments generally do nothing but get worse—more taxes, more laws and regulations, more debt, more fiat fraud, more wars, more corruption, and more power—as the freedom of individuals who must live under them vanishes.
Hope without action is not a strategy, but there is cause for hope if it’s coupled with action.
Part Two will be posted next week.
Tyler Durden
Sat, 12/26/2020 – 22:30 - Wheels Come Off For Bus Companies, Closing Down Travel Options For Poor Americans
Wheels Come Off For Bus Companies, Closing Down Travel Options For Poor Americans
The wheels on the nation’s buses aren’t going round and round very much these days according to MPRnews, which notes that demand for bus travel has fallen by more than 80 percent during the pandemic, as public health authorities urge people to avoid travel where possible. That is raising concerns about the potential long-term damage to an essential transport method for millions of lower-income Americans even as air travel has shown signs of picking up since the Thanksgiving holiday period.
And those who have to take the bus, for whatever reason, are finding fewer options, and often higher prices as a result.
Feeling the pinch most are people like Andrew Sarkis. He paid $97 for a one-way bus ticket from Hampton, Va., to New York City, a 12-hour journey that required two transfers.
“It’s expensive, man,” said Sarkis, while stretching his legs after his bus took a brief stop at Union Station in Washington, D.C. “I used to go on another bus for $45 a trip, that goes straight to New York,” he added.
A Greyhound bus driver wears a protective mask and gloves as he prepares to depart a station in San Antonio, Texas. Sarkis was on his way to visit family for Christmas, but was forced into taking a half-day travel on a Greyhound bus after finding his usual options in competing services pared down: “The service is not bad,” he said. “It’s just long hours of traveling.”
Greyhound said it’s operating less than half its normal bus routes during the pandemic, while revenues have fallen nearly 60%.
“Greyhound has been immensely impacted by the effects of COVID-19,” the company said in a statement. “From temporary and permanent closures of routes to sudden workforce reductions, our ability to provide critical service to communities—especially those that are underserved and/or rural—has been reduced.”
Industrywide, the service cuts are even deeper: “We see the industry operating at about 10 percent capacity,” said Peter Pantuso, president of the American Bus Association.
And it’s hard to estimate how soon demand can pick up. Not many people are interested in riding the bus these days, spending hours with strangers in an enclosed space. Unlike airlines, which saw an uptick in travel over Thanksgiving, demand for bus tickets remains severely depressed, according to Wanderu, a travel website.
That raises concerns about the long-term health of a sector that generally operates on thinner margins and has less financial cushion.
Pantuso estimates that 85% of the 100,000 people who work in the bus industry have been laid off or furloughed — in most cases since March.
It’s not just long-haul services like Greyhound that are limping. Traffic on commuter lines that ordinarily ferry workers to and from the suburbs has also dried up, since many people are working from home. Charter buses and specialty services are struggling as well.
The Nitetrain Coach in Nashville offers tricked-out buses with bars and bunk beds for touring musicians. Since March, the company’s 120-bus fleet has gone silent. “It’s been a hard time with concerts not happening,” said Nitetrain’s Angela Eicher. “No job. No income.”
The company has idled more than 200 drivers as well as mechanics and office staff: “We’re at the mercy of the venues,” Eicher said. “When the venues allow the concerts to start happening, that’s when our buses will start rolling again.”
Nitetrain did send a few of its buses to the Gulf Coast this fall, to house utility crews cleaning up after hurricanes. Elsewhere, buses have been used to evacuate people from the path of wildfires.
With less competition among bus companies, the few people who are buying tickets are often paying more. The Labor Department reported an 18 percent jump in intercity bus fares last month, even as overall inflation was tame.
And while bus travel is still cheaper than other options, the extra cost can be a hardship for many riders.
“This is a mode of travel that caters to people often who can’t afford cars — that need to go at the least possible cost from point A to point B,” said Joe Schwieterman, a transportation expert who directs the Chaddick Institute for Metropolitan Development at DePaul University. “If prices jump, it might be out of reach.”
But while Congress has offered billions of dollars in financial aid to airlines and Amtrak, bus companies have been overlooked. Pantuso, the bus trade group president, said the lack of attention from Congress was a concern, calling his sector a critical piece of the nation’s transportation network.
“If more members of Congress took the bus on a more regular basis,” he said, “We’d probably be at the top of the list for funding.”
Of course, the whole point of being in Congress is to never take a bus again…
Tyler Durden
Sat, 12/26/2020 – 22:00 - Give Yourself A Gift Next Year: Agency
Give Yourself A Gift Next Year: Agency
Authored by Charles Hugh Smith via OfTwoMinds blog,
We think we’re powerless because we don’t have wealth and power over others, but nothing could be further from the truth.
To have agency is to have power over your own life and control of your assets, options and resources. There are a great many things that influence our lives that we do not control, but there are also many things we could influence in our lives but do not.
The conventional view puts great weight on the agency created by money, as an abundance of money enables people to do a number of things that people with little money cannot do: live comfortably in costly locales, buy a larger home, buy a second home, buy a boat, pay for college with cash, pay for expensive medications not covered by insurance, take extended vacations and start enterprises without ceding power to outside investors, to name a few.
Our culture only has eyes for the agency of money, as this narrow band of agency is ceaselessly glorified. Yet what’s striking is how little of importance money can buy. Not only can it not buy love, it cannot buy true friendship, trust, affection, community, emotional intelligence, wisdom, skills, purpose, meaning, health, confidence, creativity, conviction, self-discipline, resilience, self-expression, integrity, authenticity, faith or inner security.
What gift would you want for yourself in 2021? Whatever you identify as the gift you’d want to give yourself, the odds of obtaining it improve if you give yourself the gift of agency first. While money is a resource that can leverage certain kinds of agency, it isn’t the foundation of agency; the foundations of taking control of one’s life are internal.
I wrote an entire book about this process of taking control of one’s life: Resistance, Revolution, Liberation: A Model for Positive Change.
My basic credo of liberation:
“I no longer care if the power centers of our society–the distant, fortified castles of our financial feudal system–are changed by my actions, for I am liberated by the act of resistance. I am no longer complicit in perpetuating fraudulent feudalism and the pathology of concentrated power. I no longer covet signifiers of membership in the Upper Caste that serves the plutocracy. I am liberated from self-destructive consumerist-State financialization and the delusion that debt servitude and obedience to sociopathological Elites serve my self-interests.”
We think we’re powerless because we don’t have wealth and power over others, but nothing could be further from the truth. What we all seek are autonomy, mastery and purpose, and the source of all these are within us.
Money can’t buy personal integrity or authenticity, and in that sense it cannot buy what matters most. To borrow Kierkegaard’s phrase, we cannot use money to acquire ourself. That process cannot be bought at any price, for it is internal, intangible and hidden to all but ourselves.
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If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
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My recent books:
A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF).
Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).
The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).
Tyler Durden
Sat, 12/26/2020 – 21:30 - Passive Funds To Surpass Active By 2022
Passive Funds To Surpass Active By 2022
With December’s numbers are still pending, November was a blow out month for passive fund inflows in stocks, and as Bloomberg recently reported, after a blistering start to the year for fixed income funds (thanks to the March crash which spooked retail from stocks and into bonds, if only briefly) equity ETFs overtook their fixed-income peers for inflows this year thanks to November’s epic stock rally.
After lagging bond funds for most of 2020, ETFs tracking equities saw a record $81 billion in inflows last month – nearly half of 2020’s total in just month – and bringing their total haul for the year to $196 billion, according to Bloomberg data. That catapulted them ahead of fixed-income funds, which attracted $17 billion and have a tally of $192 billion.
The recent surge in ETF inflows is thanks to another unprecedented burst of retail investor euphoria, which is best captured by the mindblowing inflows into Cathie Wood’s ARKK momentum/growth/”story”-chasing ETF, the ARKK Innovation ETF (profiled here), which just passed JP Morgan “for the largest actively managed exchange-traded fund” with $18 billion in assets and which owns more than 10% of 15 different stocks.
Taking a look at the big picture, BofA writes that exchange-traded funds (ETFs) are on pace to add $466BN, the biggest year of inflows ever (chart below, left), and at the current pace of inflows, a historic inversion is set to take place by 2022, when for the first time ever there will be more assets in passive equity funds than active, meaning humans will officially be a minority when it comes to managing money (thanks Federal Reserve).
And as the world waves goodbye to fundamental-based investing, and cheers on the arrival of flow and thematic capital allocation (which only an idiot would call “investing”), BofA Research reminds us that it has has the first and only ETF research offering (yes, BofA now rates ETFs not the actual stocks that make them up), with 241 funds rated – some of its top-rated funds are shown in the table below, and notes that it has also recently initiated coverage of the following categories, all of which piggyback either on the unprecedented growth in, well, growth names and the current virtue-signaling crazy for anything ESG/”clean energy”:
- Clean energy: BofA initiated coverage of the clean energy theme, with ratings on four ETFs in “In (Clean) Fuel for growth“
- Communication services: BofA now covers all GICS Level 1 sectors (link);
- Growth factor: In Growth for contrarians the bank made the case for rethinking growth benchmarks and rated 6 top ETFs;
- ESG: ESG investing is having its best year ever with parabolic inflows of $66bn; BofA expected as much in its report “Buying like you mean it” where it rated the ESG space with a favorable outlook.
Tyler Durden
Sat, 12/26/2020 – 21:00 - Welcome To RussiaGate 2.0, Right On Schedule
Welcome To RussiaGate 2.0, Right On Schedule
Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,
Now that a majority of the country believes the election was fraudulent and the Supreme Court has completely abdicated its authority the next obstacle in front of President Trump is here.
And, as always, it comes from his complicit Secretary of State who undermines Trump with his every move to turn the State, Defense and Intelligence apparatuses of the U.S. against Russia.
Pompeo goes on Mark Levin’s show, whose ratings are through the roof right now, to tell all the slavering normie-conservatives that it was definitely the Russians who hacked our government.
Without offering any evidence or specifics, Pompeo said Russia was “pretty clearly” behind the cyberattack during an appearance on the conservative talk radio Mark Levin Show.
“I can’t say much more, as we’re still unpacking precisely what it is, and I’m sure some of it will remain classified. But suffice it to say there was a significant effort to use a piece of third-party software to essentially embed code inside of US government systems and it now appears systems of private companies and companies and governments across the world as well,” Pompeo explained.
Notice how there is no evidence given, just the typical intelligence agency, “believe me” line, which is your first clue that whoever it was behind this attack the one group who was definitely NOT behind it was the Russians.
This week’s cyber attack on the U.S. government was perfectly timed with the Electoral College submitting its votes to the Congress and Joe Biden claiming he’s president-elect.
The reason why the release of this ‘attack’ on our government was perfectly timed is because it is a distraction from the growing unrest over the Democrats’ having stolen the election and cowering the courts into irrelevance.
This is classic CIA-level misdirection from what was more likely a Chinese or, dare I say it, homegrown operation for the very purpose of blaming the Russians to tamp down the anger and confuse the MAGA crowd.
And it resurrects the ghost of RussiaGate for the libs by putting Trump in a Catch-22.
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If he doesn’t respond to this it keeps alive the smoldering embers of the TDS crowd watching Rachel Maddow that Trump really does have deep, covert ties to Russia.
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If he does react, what possible reaction could he take to escalate the tensions with Russia that are already one step below open warfare?
Oh, and he has to respond to this while also fighting an uphill battle against the courts and his own bureaucracy to invoke his executive order involving outside interference into the election. And in classic Trump fashion he did:
The Cyber Hack is far greater in the Fake News Media than in actuality. I have been fully briefed and everything is well under control. Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of….
— Donald J. Trump (@realDonaldTrump) December 19, 2020
https://platform.twitter.com/widgets.js
Provoking the exact reaction you’d expect from the BlueChecked Sneetches among the Twitterati. RussiaGate was an embarrassment that should have died years ago but it persists precisely because Trump refuses to formally concede and continues to give his people the opportunity to fight the Swamp.
The only way Putin and the Russians were behind this attack on the U.S. government was as a 5-d chess move where Trump invited them to do it on his behalf to ‘prove’ external interference in the election and allow Trump to cross the Rubicon, invoke the Insurrection Act and his 2018 EO on election interference.
Yeah, by the way, John Le Carre died this week, life ain’t a movie and Trump isn’t that savvy a player. Ye gods, I wish he was. That we are in this mess proves he isn’t.
This pronouncement by Pompeo was just good ol’ fashioned swamp double talk who continues his job of maintaining continuity of U.S. foreign policy on behalf of the Neoconservatives whose raison d’etre is the destruction of Russia to the exclusion of nearly every other consideration of any other human on the planet.
Don’t be confused by this nonsense. Whoever was behind this attack wasn’t the Russians. The motive for this operation lies squarely with China, The Davos Crowd, the Democrats and our own intelligence agencies trying to move the Overton Window away from the real problem, a stolen election.
Outing Solarwinds and tying it directly to Dominion Voting Systems is your smoking gun.
But the courts, as I said at the open, have left the building. Martin Armstrong pointed out the Supreme Court denied the ‘shouting behind closed doors’ because they met via Zoom call.
But they didn’t deny the substance of the charge against them, that they bowed to political pressure thanks to the Democrats’ open blackmail campaign of terror this past summer.
So, at this point there really is little hope of overturning the election. From what I’ve heard on the ground in Georgia the same Dominion Voting machines are in place there for the Senate runoffs. Those who voted didn’t even get a receipt this time.
So the fix is in there too, folks.
There will be no victories in this fight. Every possible avenue of hope must be crushed if the Great Reset of The Davos Crowd is to occur. Pompeo plays his part just like everyone else in this pantomime, one day giving Trump supporters hope by saying he’s preparing for a 2nd term, the next using that cache to undermine him with a far bigger betrayal.
This is how the Deep State works to protect itself and we have to be smart enough to see it for what it is: preparing the ground for the next phase of the greatest intelligence show on earth.
Same spook time, same spook channel.
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Join my Patreon if you think Russia isn’t the world’s ultimate evil
Tyler Durden
Sat, 12/26/2020 – 20:30 -
- L.A. County Is Running "Dangerously" Low On Oxygen To Treat COVID-19
L.A. County Is Running “Dangerously” Low On Oxygen To Treat COVID-19
Hospitals in L.A. Country are starting to run “dangerously low on oxygen” and other supplies used for treating those with Covid, despite a seven day trend of new cases looking like it may have finally peaked.
In addition to running out of supplies, patients are waiting as long as 8 hours in ambulances before being placed into ERs due to limited capacity, the LA Times writes. The situation has gotten so dire that “one L.A. County health official has asked providers to reach out to patients who have serious illnesses or are medically frail to review their advanced-care directives and ensure forms are on file detailing their end-of-life care.”
There are also fears that gatherings during the holidays will exacerbate conditions in the area, as Thanksgiving gatherings are already receiving some of the blame for hospitals’ current capacity.
But while the L.A. Times notes that the county saw its highest Covid-19 deaths per day last week, on Thursday with 140, the county’s seven day rolling total (shown below) potentially indicates some reprieve.
People familiar with the hospital system in the county have revealed it is “dangerously low” on oxygen, which is used to treat people with virus-inflamed lungs. Oxygen is now being used in favor of ventilators, which were used at the beginning of the pandemic.
Instead, patients now get “a high-flow oxygen treatment, where oxygen is sent through plastic tubes placed in the nose”. Covid-19 patients often need more than 10 times more oxygen than regular patients, requiring up to 60 to 80 liters of oxygen per minute. This means hospitals need about 10 times more oxygen than they did before.
Hospitals are also running low on the tubes used to transport oxygen, the report says.
The county asked healthcare providers this week to take additional measures to try and offset the flood of patients that require hospital-level treatment. There’s about 6,700 coronavirus patients hospitalized throughout the county as of Wednesday last week – with 1,329 of them in an ICU. Those numbers are up 85% and 62% over the past 2 weeks.
The county wrote in a memo: “Hospitals have implemented their surge plans and are adjusting staffing and space to try to meet the needs of their community. It is critical that as a healthcare community we look at all available opportunities to help decrease the surge on hospitals and our 911 system, where possible.”
Dr. Sharon Balter, the county’s chief of communicable disease control and prevention told healthcare providers to inform patients only to call 911 or go to the ER “when it is a true emergency”. She also pushed for quicker discharges.
“There are very limited hospital and ICU beds available and emergency departments are strained to capacity,” she said.
Santa Monica neurosurgeon Dr. Brian Gantwerker says he “dreads” what the next several weeks will hold. He says that the number of Covid patients increasing can delay neurosurgery patients in need of immediate care.
He said: “Then it becomes a question of: ‘Where is the breaking point? When do we have to start sending patients out to other places?’ And the nightmare scenario is: ‘What happens if there are no beds available in the county? Everything we’ve worried about and talked about and warned people about since February is coming to fruition — we’re at that point now.”
Finally, Dr. Christina Ghaly, L.A. County’s health services director, says that nearly 7,000 more people could die from Covid by the end of January if current trends continue.
L.A. Mayor Eric Garcetti concluded: “We know that this emergency is our darkest day, maybe the darkest day in our city’s history. But we must find the fortitude, we must summon the strength to make sure that we save lives.”
Tyler Durden
Sat, 12/26/2020 – 20:00 - US Is Helping India Spy On China's Military Near Disputed Border
US Is Helping India Spy On China’s Military Near Disputed Border
Authored by Dave DeCamp via AntiWar.com,
With an increase in tensions between India and China along the disputed border in the Himalayas, the US is helping India keep an eye on China’s military. In October, the US and India signed a new defense pact that allows the US to share more satellite data with New Delhi.
At an event in November, the head of US Pacific Air Forces spoke of the increased military cooperation. “From the real-world standpoint, we’ve gotten closer this year with India, especially on the intelligence sharing, particularly related to the situation that’s occurring on their northeast border with China,” Gen. Kenneth Wilsbach said, according to Business Insider.
Via AFP/Getty “We’ve been doing quite a bit of intelligence sharing, as much as we can, with them to help out our great friend, India,” he added. Over the summer, a clash broke out between Chinese and Indian troops along the border, the first deadly incident between the two militaries in decades.
The deal signed in October, known as the Basic Exchange and Cooperation Agreement (BECA), allows gives India access to topographical, nautical, and aeronautical data. The intelligence could also be used for Indian missile strikes.
When BECA was first inked, India’s Economic Times said the deal will give Indian missiles a “killer edge.”
With the Trump administration’s focus on China, building stronger security partnerships in the region has become a priority. The incoming Biden administration is expected to continue building alliances to counter Beijing, and even NATO is looking to get in on the action. NATO recently released a report that recommended the alliance form a partnership with India to counter Beijing.
India, the US, Japan, and Australia form the informal alliance known as the Quad. In November, the four countries participated in military drills together for the first time in over a decade. The Indian-led Malabar exercises were held off India’s coast.
In previous years, India has been hesitant to allow Australia to participate in the exercises for fear of sending the wrong message to Beijing. But with tensions high over the disputed border and more military support from the US, India decided to allow all of the Quad countries to participate in a show of force aimed at China.
Tyler Durden
Sat, 12/26/2020 – 19:30 - Shark Tank's Kevin O'Leary Warns: 100 Million Americans Have No Retirement
Shark Tank’s Kevin O’Leary Warns: 100 Million Americans Have No Retirement
Even before the virus-induced downturn wiped out the savings of tens of millions of Americans, more than one hundred million folks throughout the country had nothing saved for retirement.
Called the “retirement crisis,” the assumption today is that Americans are in deeper financial turmoil than ever.
It was 2018 when we informed readers that more than 100 million Americans of working age did not have any retirement account assets in an employer-sponsored 401(k) type plan, individual account, or pension.
This means that the American dream of a modest retirement after decades of work is now a middle-class nightmare. In a world where the virus-pandemic is resulting in a “great reset,” small and medium-sized enterprises are being wiped out in droves as permanent job loss soars into the millions.
Making sense of this all and how we got here is Kevin O’Leary, star of Shark Tank and chairman of O’Shares ETFs. He spoke with Kitco News’ David Lin about the retirement crisis where the average working person has no wealth due to “the lack the financial literacy.”
“I think you’ve hit on a huge issue in America today there are a hundred million people that have nothing set aside for retirement – they have no investment account that is a failure of financial literacy that started as far back as the 1970s. We never taught kids in high school – we teach them reading, math, jobs, and sex education – nothing about investing – nothing about debt – nothing about credit cards – a huge mistake,” O’Leary said.
O’Leary continued by saying education reform is a must if you want societal change.
“We really need to change the curriculum in high school, at the ages of 13 and 14, to start to explain how a credit card works, how the market works, that needs to be mandatory, not supplemental,” he said. “The state of Florida has brought it into their curriculum, it’s mandatory. We need to see that in New York, Texas, and California, they’re the majority of where the schools are and then the rest of the states will follow.”
Without further adieu, O’Leary speaks about the retirement crisis.
Expanding more on why educational systems nationwide at the high school level need to include financial classes, we noted a couple of months ago that “financial education decreases the likelihood of holding credit card balances.”
Maybe financial elites keeping the population in a perpetual financial daze while they rack up credit card bills is just part of the American way.
Tyler Durden
Sat, 12/26/2020 – 19:00 - The End Game
The End Game
Authored by Kevin Smith and Tavi Costa via Crescat Capital,
Dear Investors:
Markets are cyclical. Today, stocks trade at record high valuations while commodities are historically undervalued in relation. The setup is in place for a macro pivot in the relative performance of these two asset classes. Comparable conditions were present with the 1972 Nifty Fifty and 2000 Dotcom bubbles as we show in the chart below.
As capital seeks to redeploy towards the highest growth and lowest valuation opportunities, we expect analytically minded investors will soon be rotating, if not stampeding, out of expensive deflation-era growth equities and fixed income securities and into cheap hard assets, creating a reversal in the 30-year declining trend of money velocity.
Today’s Modern Monetary Theory world with its double barreled fiscal and monetary stimulus is crashing head on with an accumulation of years of declining investment in the basic industries such as materials, energy, and agriculture. In our analysis, the “end game” for the Fed’s twin asset bubbles in stocks and bonds is inflation. We can already see it developing on the commodity front.
The scarcity of jobs and abundance of debt were factors preventing the economy from reaching its full growth potential even before Covid-19. Such have been the concepts underlying the output gap, the theoretical paradox that is thought to have held inflation in check over the course of the last business cycle. But based on comparable historic periods, the macro setup for inflation is more likely to be kicked off by an input gap, i.e., shortages in the primary resources needed for both a strong reserve currency and economic growth at the same time as policy makers pull out their biggest bazookas yet to boost aggregate demand. We expect a new wave of rising commodity prices, set up by past underinvestment in basic resources, to soon ripple through the global supply chain creating a headwind for real living standards. Welcome to the Great Reset.
The global economy is at risk of commodity supply shock inflation, something we have not experienced since the 1970s. Both the Bloomberg Commodities Index and the US 30-year inflation expectations are now re-testing a 12-year resistance line. A significant breakout from here would be a big shift in the macro investing landscape. Yes, the aging demographics problem and significant technological advancements are deflationary tailwinds. But in our view, the key reason why consumer prices have not gone higher is due to a long-standing period of depressed commodity prices, a trend which we think is about to change.
The Constrained Supply for Gold
When it comes to scarce commodities, at Crescat, we have an affinity first and foremost for gold and silver, the monetary metals that are among the most supply constrained resources on the planet. Coincidentally, they are facing a new surge of investor demand.
On the supply side, in the disinflationary environment since the precious metals mining industry’s prior peak in 2011, gold and silver miners have been criticized by investors as being capital destroyers. As a result, the industry’s spending discipline in the last decade has swung completely the other way. The majors have underinvested in replacing their reserves creating a supply cliff for the industry while also substantially boosting free cash flow.
Contributing to the supply shortage, the number of major new gold discoveries by year, i.e., greater than 2 million Troy ounces, has been in a declining secular trend for 30 years including the cyclical boost between 2000 and 2007. At Crescat, we have been building an activist portfolio of gold and silver mining exploration companies that we believe will kick off a new cyclical surge in discoveries over the next several years from today’s depressed levels.
Gold mining exploration expense industrywide, down sharply since 2012, has been one of the issues adding to the supply problems today. Crescat is providing capital to the industry to help reverse this trend.
Since 2012, there has also been a declining trend of capital expenditures toward developing new mines. From a macro standpoint, gold prices are likely to be supported by this lack of past investment until these trends are dramatically reversed over the next several years. Credit availability for gold and silver mining companies completely dried up over the last decade. Companies were forced to buckle up and apply strict capital controls to financially survive during that period. Investors demanded significant reductions in debt and equity issuances while miners had to effectively tighten up operational costs, cut back investment, and prioritize the quality of their balance sheet assets.
It is important to consider that the last times this industry had been acting in a similarly conservative fashion, metal prices were at historically low-price levels. This time, however, we are seeing corporate discipline with gold prices remaining near all-time highs. As a result, the major producers today have surprisingly swung into being cash flow machines. They are enjoying more free cash flow than they had in the past 25 years, an incredibly bullish setup for the entire industry, especially the smaller exploration focused players that Crescat is overweight in today. The majors are in a great position to harvest cash for the next few years. But they are also facing a supply cliff because they have not replaced their reserves. Over the next several years, they will need to make acquisitions in the exploration segment to rebuild them.
The Demand Side for Gold
On the demand side, the first key macro driver for the price of gold is central bank debt monetization, which drives increasing inflation expectations and investor demand for inflation protection for accumulated savings. Today, money printing through central bank balance sheet expansion is widely accepted and embraced. It is the only viable policy as a way out of the otherwise deflationary global debt burden, at a historic high of 365% of worldwide GDP. With deficits at World War II levels in the US, we expect money printing to be the path of least resistance among policy makers towards easing debt burdens and reconciling many of today’s economic imbalances, though it will likely come at a cost to savers who are invested in overvalued traditional financial assets.
As we show in the chart below, gold underperformed the pace of global money printing from 2011 to 2018. But since the Repo Crisis in 2019 and the coronavirus led recession that followed, global QE has been accelerating to the upside once again. Gold is being pulled up with it. Our near-term target price for gold is north of $3,000 per Troy oz. based on our macro model shown below that plots the price of gold vs. the aggregation of the top eight central bank balance sheets. This target will almost certainly be rising in the near-term with $5.8 trillion just in US Treasuries alone maturing in 2021 and much of that needing to be rolled over and funded by the lender of last resort.
The Fed, the printer of the world reserve currency, has given itself, and by extension its central bank counterparts around the world, the green light to err on the side of inflation. The US central bank has declared that it can exceed its 2% inflation target temporarily abandoning one side of its dual mandate to favor the other side of it which is full employment. So, err on the side of inflation, the Fed almost certainly will.
Inflation is a toothpaste that sovereign Treasuries and their central banks throughout history have struggled putting back in the tube once they have let it out. In practice, inflation is driven as much by the expectations and actions of consumers and investors, which occur with lags and at unknown multiplier effects in relation to interest rate and quantity of base money policies. When consumer and investor psychology shift toward recognizing and acting upon rising inflation, however, inflation becomes highly reflexive, i.e., circular and self-reinforcing.
The second key macro driver for upward trending gold prices on the demand side today is declining real interest rates, which are a combined reflection of central bank interest rate suppression tactics and investors’ rising inflation expectations. The recent plunge lower in real yields (shown inverted in the chart below) has diverged from the price of gold signaling a strong impending move upward again in the metal.
The outlook for gold all ties back to the bigger macro imbalances we see in the US economy today. The Federal Reserve is crippled in its ability to prevent inflation and instead has become the funding mechanism through its massive purchases of US Treasuries that enables the US government to run a large fiscal deficit. The Fed essentially has no independence in the matter. It must fund the government’s fiscal stimulus programs as the lender of last resort. And as the repo crisis showed, the liquidity is also necessary in the short run to prevent the equity and corporate bond markets from collapsing, but this is very shortsighted because rising commodity prices and real-world inflation, that is the byproduct of the newly printed money, is the killer of record overvalued financial assets.
Three Comparable Macro Setups in History
We expect inflation expectations to continue to rise at a faster rate than nominal interest rates. This is ultimately a self-reinforcing catalyst to drive investors out of overvalued stocks and credit and into scarce commodities including precious metals and oil, which is exactly what happened in three similar macro setups to today:
1. During the dotcom bust at the turn of the century, the NASDAQ Composite declined 78% over two and a half years, a period during which gold stocks diverged to the upside to begin a five-fold march upward over the next seven years, while energy and industrial commodities also caught fire.
2. In the 1974-74 bear market, the S&P 500 declined 50% in two years while gold mining stocks increased five-fold at the same time as oil prices skyrocketed during the 1973 Arab Oil Embargo and a decade of stagflation was born.
We showed the supply cliff setup for gold earlier, but it important to note that there is a supply shortage in oil setting up as well today that could give the Middle East the upper hand not unlike the 1970s.
3. The third comparable period, also highly apt for today, was coming out of the Spanish flu pandemic of 1918 and 1919. At that time, the health crisis had severely limited the industrial capacity of the economy, leading to major supply shortages of raw materials and causing commodity inflation at the same time as the world began to heal from the flu pandemic. The rise in wholesale prices became a global phenomenon. Grocery stores began hoarding inventories to sell at higher prices, forcing governments to intervene and criminalize these actions to avoid an even larger hit to the consumer. The cost of living surged and prompted major labor union protests on the streets demanding higher wages and salaries only exacerbating the problem. Inflation surged above 20% in 1920 and the Dow Jones Industrial Average began a decline of 47% from peak to trough from 1920 to 1921 while the world emerged from the pandemic. We will not go there in depth now, but this was the same time that a whole different kind of inflation was arising in Germany from newly printed money to pay off accumulated war debts.
The Opportunity for Activist Gold Exploration
As we showed above, the underinvestment in most of the last decade in the gold mining industry will soon send the majors scrambling to invest their near term soaring free cash flow in the most prospective new gold and silver deposits being explored today. These properties are in the hands of the extremely undervalued and ultra-depressed small cap segment of the mining industry, the junior explorers, a group that has been through a brutal, capital starved bear market that effectively lasted ten years. The whole industry completed a double-bottom retest by successfully holding above its 2015 lows and rebounding sharply to lead all industries in stock price performance coming off the March 2020 correction. We think there is much more performance ahead for this industry as it is still in the early stages of a new secular bull market.
We are confident that within the precious metals mining industry, the most value for shareholders will be created from the small cap exploration segment of the industry over the next several years. We think Crescat’s Precious Metals Fund and SMA strategy have already started to demonstrate that potential in 2020.
By working with world-renowned exploration geologist, Quinton Hennigh as Crescat’s geologic and technical advisor, Crescat has already created an activist portfolio of over 50 companies where we are among the largest shareholders of a targeted 200 million ounces new high-grade gold equivalent discoveries. We plan to continue to grow these targeted ounces while getting the needed investment capital to our companies to prove out these economic ounces through drilling and discovery.
Crescat’s activist fund is a large and significant capital deployment opportunity. We are currently seeking a select group of right-minded institutional partners who can understand and appreciate the focus, scale, and timeliness of what we have set out to accomplish in this fund.
Our activist portfolio is positioned ahead of a likely major new wave of M&A by the large and mid-tier producers which is still to come as they necessarily must replace their reserves through acquisition. We also have a handful of holdings that we call keepers, the cream of the crop companies that control the unquestionably new world class, high grade gold and silver deposits that will catapult them into the next great mid and large cap gold producers in the industry over the course of the new secular bull market.
To be frank, buying gold or silver is not a contrarian investment position today. There are enough people in agreement with the idea that all government backed fiat currencies are doomed to some level of devaluation through inflation due to the level of fiscal and monetary imprudence and unsustainable debt imbalances in the financial system. Naturally, with a constructive view on precious metals, the next step for most investors is to start dipping their toes into well-known and established mining companies. Despite their past reputation of being capital destroyers, investors today are warming up to the idea of buying the “Newmonts and Barricks” of the world or even ETFs such as GDX and GDXJ. What we see as contrarian, however, is a much bigger opportunity to unlock value through a well targeted activist strategy in the exploration segment of the industry. No doubt, many are skeptical of the gold exploration business, given its poor performance during the last downturn in the industry at large, but the biggest gains today in the industry are likely to come from what are the smaller cap names. Between Crescat and its 21 years of money management experience and Quinton Hennigh with his 30+ years of gold mining exploration experience to serve as Crescat’s geologic and technical advisor, we believe we have the expertise and preparedness to navigate this incredible opportunity before us. We hope you will join us as we seek to exploit the mispriced opportunities on the exploration and discovery side of the Lassonde Curve that is still in the early stages of what is likely to be a new rip-roaring secular bull market for precious metals.
Tyler Durden
Sat, 12/26/2020 – 18:30 - New Single-Family Homes Sold Not As Large As They Used To Be
New Single-Family Homes Sold Not As Large As They Used To Be
The average square footage of new homes sold in the United States increased from 2,457 in 2010 to 2,724 in 2015 but then dropped again in 2019 to 2,518, according to the U.S. Census Bureau’s Characteristics of New Housing. The report is based on data collected in the Survey of Construction (SOC) and provides national and regional details on new privately owned single-family and multifamily residential structures. Characteristics include square footage, number of bedrooms and bathrooms, types of wall material, parking, sales prices and more.
No Downsizing
Despite the decline in average square footage, the share of homes with four bedrooms or more that were sold increased from 41% in 2010 to 49% in 2019.
In 2010, 27% of the 323,000 new single-family homes sold in the United States had three or more bathrooms. In 2019, 36% of the 683,000 U.S. homes sold had three or more bathrooms.
Rising Prices
The average sales price of new single-family homes sold in 2019 was $383,900, up from $272,900 in 2010. Prices are not adjusted for inflation.
In 2019, 69% of new single-family houses sold were purchased using conventional financing (and other types of financing excluding Federal Housing Administration (FHA), Veteran’s Administration (VA) or cash purchases), up from 58% in 2010.
Conventional financing, the primary way new home buyers paid for their purchases, is a mortgage loan not guaranteed by any government agency, such as the VA or FHA.
Features of New Homes
Of all the 903,000 new single-family homes completed in 2019:
- 849,000 (or 94%) had air-conditioning.
- 102,000 (11%) had two or fewer bedrooms and 386,000 (43%) had four or more bedrooms.
- 32,000 (3%) had one and one-half or fewer bathrooms and 296,000 (33%) had three or more bathrooms.
- 366,000 (41%) had a heat pump. Of these, 352,000 were air-source and 14,000 were ground-source.
- 814,000 (90%) were framed in wood and 86,000 (10%) were framed using concrete.
- 296,000 (33%) had a patio and a porch, while 71,000 (8%) had no outdoor features.
- 549,000 (61%) had no fireplace.
In 2019, 683,000 new single-family homes were sold, up 111% from 2010.
A Virtual Tour of America’s New Homes
One way to get more details on new single-family homes is through this infographic. Simply hover for a quick fact on completed or sold homes and click on the legend to go to the tables with the information.
Multifamily Housing
Multifamily housing is defined as residential buildings containing units built one on top of another and those built side-by-side without a ground-to-roof wall and/or common facilities, such as attic, basement, heating system and plumbing. There were 352,000 new multifamily units completed in the United States in 2019, compared to 155,000 in 2010. The numbers include units for sale as condominiums or cooperatives.
What new multifamily units look like:
- 149,000 (42%) had one bedroom and 40,000 (11%) had three or more bedrooms.
- 349,000 (99%) were conventional apartments and 3,000 (1%) were townhouses.
- 203,000 (58%) were in buildings with four or more floors.
- 304,000 (86%) had individual laundry facilities and 29,000 (8%) had shared laundry facilities.
- 251,000 (71%) were in buildings framed in wood and 33,000 (9%) were in steel-framed buildings.
There were 321,000 multifamily units built for rent, a 157% jump from 2010.
Tyler Durden
Sat, 12/26/2020 – 18:00 - What To Do When The Planets Diverge
What To Do When The Planets Diverge
Authored by MN Gordon via EconomicPrism.com,
Planets Jupiter and Saturn came into closer alignment than any time since 1226 this week. Yet the planets in Washington did not align. The federal government was unable to ‘Christmas tree’ its stimulus bill.
At the 11th hour, President Trump called bull pucky on the contents of Congresses hideous creation. Too much pork. Not enough relief.
Congress will return next week and attempt to salvage a deal. Likewise, we’ll save fiscal stimulus and its consequential economic distortions for reckoning with another day.
It’s Christmas, after all. We’d prefer to delve into the esoteric. Thus, today, for fun and for free, we seek meaning through numerology and astrology. Where to begin…
Not long ago, if you recall, a Dow Jones Industrial Average (DJIA) above 30,000 was impossible. Nothing could touch it. But here it is, in the flesh, a DJIA that’s a peppermint stick above this “sacred” number.
A DJIA above 30,000 is, indeed, quite impressive. But equally impressive is a distinct, yet somehow related milestone that’s rapidly approaching. The U.S. National Debt is over $27.5 trillion. At the current spending rate, the national debt will surpass a round and rotund $30 trillion within nine months.
The reality, however, is that the national debt exceeded $30 trillion a long time ago. In fact, it’s really 568 percent higher. Remember, current unfunded liabilities, including Social Security and Medicare, now total over $156.2 trillion.
Added together, the national debt and current unfunded liabilities total $183.7 trillion. Truly, this number is so large it’s near impossible to comprehend. Thus, for simplicity and for the sake of numerological harmony, today’s ruminations are limited in breadth and scope to DJIA 30,000 and U.S. National Debt $30 trillion.
Arbitrary Data Points
Quite frankly, we don’t really know what the DJIA and the national debt have to do with each other. We can’t quite put a finger on it. But we have a hunch both milestones are in some way emblematic of a great transformation that has taken place.
Is DOW 30,000 and U.S. National Debt $30 trillion merely a coincidence? Or is there a correlation? And if there is a correlation, does it imply causation?
There are a variety of ways, no doubt, to explore these questions. Here we opt for the path of least resistance. Hence, what follows is not a detailed desktop evaluation of the numbers; but, rather, one very simply deduced conclusion based on inference, guess work, and conjecture.
To begin, we peer back to the past in search of arbitrary data points that look as if they’re interrelated. For example, in the autumn of 1982 the DOW surpassed 1,000. This wasn’t the first time this happened. But 1982 is the last time the DOW rose above 1,000 without then dipping back below. Similarly, 1982 is when the U.S. National Debt first topped the $1 trillion mark.
From $1 trillion to $30 trillion, the U.S. National Debt generally followed an exponential growth curve. There was a slight pause in the late 1990s. But otherwise it has progressively concaved upward approaching a parabolic trajectory; particularly since 2009.
The DOW’s march from 1,000 toward 30,000, on the other hand, has been less direct. There have even been several brief, yet significant, selloffs along the way. What to make of it?
A statistician may run the numbers for the DOW and the U.S. National Debt and conclude that there’s a weak correlation, and certainly no causation. They may even graph a scatter plot to make their case.
A numerologist, however, may look at the divinely round numbers and infer something much different. Maybe even that there’s a connection that can be projected into the future. Who’s right? Who’s wrong?
What To Do When The Planets Diverge
Along the road from DOW 1,000 to DOW 30,000 and from U.S. National Debt $1 trillion to U.S. National Debt $30 trillion one thing is quite clear. There have been episodes of alignment and episodes of significant divergence.
For instance, in March of 2009 the DOW touched down at about 6,700 while the U.S. National Debt was over $10 trillion. Perhaps we’re approaching another such divergence.
Namely, using a subjective combination of supposition, numerology, astrology, and crude statistics, it seems likely that we are entering a time where the U.S. National Debt continues its exponential trajectory while the DOW dives 15,000 points – or more – to below 15,000.
You can take this shrewd little nugget of insight for what it’s worth and set it aside for another day. Remember, today’s Christmas. Now’s the time for joy, good cheer, and merriment. Not gloom, boom, and doom.
Thus, like the stock market over the last decade, now’s the time to seize the day and make something of it. For the planets may not be so amicably aligned come this time next year.
So wreck the halls, if you’re so inclined. Have another eggnog or peppermint bark. Give the bell ringing Salvation Army lady a wink and a crisp Andrew Jackson or Benjamin Franklin…before the Fed outlaws cash.
Of course, whatever you do, always do it in a ‘safe and sane’ manner. In short, sell the DOW – and sell bonds too.
On that cheery note, we’ll conclude our ruminations.
Merry Christmas!
Tyler Durden
Sat, 12/26/2020 – 17:30 - Bitcoin Surges Towards $27k As Short Squeeze Accelerates
Bitcoin Surges Towards $27k As Short Squeeze Accelerates
Update (1715ET): It seems like only yesterday, Bitcoin was trading at $24,000… And now, as short liquidations accelerate, the leading cryptocurrency is rapidly approaching $27,000…
As CoinTelegraph notes, according to data from Bybt.com, more than $131 million worth of Bitcoin futures contracts were liquidated in the last 24 hours…
As long as the derivatives market continues to see an increase in sellers, the probability of more short squeezes in the near future remains high.
Additionally, popular trader Philip Swift, for example, noted that the number of big sellers has actually subsided during the current rally.
“Large players, >1000btc wallets, have calmed down for 1st time in this huge run-up,” explained Swift.
“We can see the number of >1000btc wallets decrease rapidly over the past week or so. Whereas we can see the 1-10 BTC wallets (mass retail) have continued to steadily climb in recent weeks.”
He added: So quick topline analysis suggests a lot of retail buyers are now coming in over the Christmas break. Potentially due to:
a) hearing about BTC from fam/friends during the holidays now it is making new ATH’s.
b) plus some potential switching out of XRP/other alts.
2020 will go down as a landmark year for Bitcoin. While many institutions have been clamoring for years that the ‘institutions are coming,’ this year finally delivered on those revelations.
* * *
Bitcoin continues to surge higher…
Source: Bloomberg
…topping $25,000 for the first time this morning, as the holidays do nothing to dampen demand for the leading cryptocurrency…
Source: Bloomberg
However, the love is not being shared across the rest of the crypto space with Ethereum now at its lowest relative to Bitcoin June…
Source: Bloomberg
And as Bitcoin’s price rises, so does its total capitalization, which, as CoinTelegraph’s Joseph Young points out, now exceeds the market cap of Visa at $460 billion…
image courtesy of CoinTelegraph
Visa, the financial services giant, is valued at $460.06 billion according to Yahoo Finance. As of Dec. 26, Bitcoin is comfortably hovering above $462 billion.
But is Visa and Bitcoin an apt comparison?
Bitcoin is essentially a peer-to-peer software protocol while Visa is a for-profit corporation. Some may argue that a direct comparison between the two is not apt as they are fundamentally different.
But Bitcoin surpassing the valuation of Visa is symbolic above all else and the current market cap of Bitcoin would theoretically make it the thirteenth-largest company in the world.
Meanwhile, throughout 2020, the institutional interest in Bitcoin has been surging. At a point where the institutional demand for Bitcoin continues to increase exponentially, the surpassing of Visa’s market cap could further boost the confidence around Bitcoin among institutions.
More institutions and accredited investors have been gaining exposure to Bitcoin through Grayscale and the CME Bitcoin futures market. The assets under management of Grayscale is nearing $17 billion, as the open interest of the CME Bitcoin futures market consistently remains above $1 billion.
Visa has also shown more enthusiasm toward crypto in recent months, following Square and PayPal’s support for Bitcoin.
For instance, Wirex, the crypto Visa debit card issuer, became a principal member of Visa in Europe. Cuy Sheffield, the senior director and head of cryptocurrency at Visa, said:
“Digital currencies have the potential to extend the value of digital payments to a greater number of people and places. We’re excited to work with innovative Fintechs like Wirex and enable their customers to use digital currencies at more than 61 million merchants on the Visa network.”
On-chain data hints at where BTC is heading next
In the near term, traders and on-chain analysts say that Bitcoin’s trajectory remains optimistic.
Analysts at Intotheblock identified $23,069 and $23,377 as the key support levels for BTC in the near future. They wrote:
“Bitcoin has been able to sustain above $23,000. The IOMAP indicator supports that premise as is showing a strong level of support at the range between $23,069 and $23,377.1, where almost 900 thousand addresses previously acquired 796 thousand $BTC.”
Bitcoin support levels based on on-chain data. Source: IntoTheBlock
As long as Bitcoin stays above the critical support areas, traders anticipate the cryptocurrency market to see a broader rally.
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, expects the total cryptocurrency market capitalization to soon break its all-time high of around $780 billion. He said:
“The total #crypto market capitalization is looking extremely bullish as it has been testing the all-time high region. Levels to watch are $550 and $450 billion. Any of these regions are buy dip opportunities. If these holds, next run will bring the market above ATH.”
Finally, we note that while Bitcoin’s surge is surprising to many, it is in fact merely catching up to the stock-to-flow model’s estimate of fair-value…
As Galaxy Digital CEO Mike Novogratz said on Thursday, the Bitcoin bull market has proven resilient to the recent wave of anti-crypto rhetoric coming from Capitol Hill: “It tells you about how powerful this bull market is […] They are throwing lots at the system, and it’s not actually impacting it.”
Tyler Durden
Sat, 12/26/2020 – 17:22 - "It Doesn't Look Pretty": COVID's Harsh Financial Reality Continues Across The U.S.
“It Doesn’t Look Pretty”: COVID’s Harsh Financial Reality Continues Across The U.S.
While government officials think people should be sitting around worshipping them for throwing the peons $600 in stimulus (which hasn’t even arrived yet), the reality on the ground in the United States is that the government’s decision making, as it relates to Covid, has simply crippled many people’s finances.
Never was this more evident than in a recent WSJ piece that profiled several people the paper had checked in with during the year to see if their finances had recovered.
A couple named Robert Rodriguez and Migdalia Wharton, who were previously out of work and couldn’t pay their bills, “finally started getting unemployment benefits” over the summer before they “both found new jobs”. At both new jobs, they are making less than their pre-Covid jobs. “We don’t want to fall behind. The way things are, it doesn’t look pretty,” they told the WSJ.
Tow-truck driver and Repo Man Eddie Whiteman said during the spring “banks stopped calling him to repossess cars after their owners fell behind on payments” because lenders were “fearful of the optics”. He says his business is running 15% slower than it was last year. “Nobody wants to look like the bad guy, and I get that. But it makes it hard for folks like me,” he said.
Jemison/ WSJ Single mother Malaysia Jemison was forced to leave her job this summer to care for her daughter. It was as late as September when her unemployment benefits finally kicked in, with back pay. She says that in November, her food stamps stopped coming and that she would like to return to her job – but cannot do so until reliable child care is open again. “It makes me feel like I jump over one hurdle to be met with another hurdle,” she said.
Andy Posner, who runs a non-profit lender, says he has been busy doling out loans between $300 and $1000 since the pandemic hit. Now, he says, those loans are his “main growth driver”. Total loans have quadrupled since the spring, he says, and he has added several dozen employees. He has also expanded into Texas, from Florida, where most of its loan book is located. “A lot of our clients are nervous as hell, but they are at work at least,” he said. “People are scraping by but they are terrified and stressed and at their wit’s end.”
Cassandra Brooks, who runs Little Believer’s Academy Day Car in Raleigh, NC, says that enrollment and revenue have “plunged” and that she has been operating at a loss for most of the year. She says the families of her children have “been in and out of homeless shelters”. She is getting by because a private donor helped some families pay their tuition fees for the year. “I know that was a sign for God telling me to keep taking care of these children,” she said. “It’s hard, but I’m thankful I’ve survived this long.”
Novak / WSJ Steve Novak, owner of Beaver’s Cafe in Minto, N.D., said that business boomed this summer thanks to a PPP loan that helped it stay open. But when customers were ordered to stay home later in the year, he had to “discontinue breakfast service and lay off the full-time employees”. He said he has enough savings to give his staff Christmas gifts and can stay open until the end of January. He concluded: “The little guy is getting crushed right now; the big corporations aren’t. It’s the middle-class people that are having their asses handed to them.”
Community banker Mike Estes says this year was the “most intense” in his 45 years in the industry. He was supposed to retire this year but instead has stayed on at regional Fisher National Bank in Fisher, Il. to help serve the community. He says that businesses are surviving in the area, thanks to the PPP, and the bank remains liquid. “We’re almost embarrassed to say we’re having a record year,” he concluded.
Tyler Durden
Sat, 12/26/2020 – 17:00 - Credit Applications Are Down and Rejection Rates Are Up
Credit Applications Are Down and Rejection Rates Are Up
Authored by Mike Shedlock via MishTalk,
Need Credit? You may be out of luck, especially on credit card requests.
Credit Access Largely Down during the Pandemic
The New York Fed Credit Survey shows credit applications are mostly lower with rejections higher.
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The October 2020 survey shows most credit application and acceptance rates falling sharply with the onset of the coronavirus pandemic.
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Application and acceptance rates for credit cards and credit limit increases showed the largest declines since February 2020, followed by auto loans.
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However, the application rate for mortgage refinancing continued to climb through 2020, driven by demand from borrowers with high credit scores (above 760).
Credit Card Application and Rejection Rates
Credit Card Limit Increase Requests and Rejection Rates
Auto Loan Requests and Rejection Rates
Home Loan Requests and Rejection Rates
Mortgage Refi Requests and Rejection Rates
Standout Records
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The credit card application rejection rate is a record 21%.
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The credit card limit increase rejection rate is 37%. The record high level is 38% hit in June and also in 2014.
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The mortgage refinance rejection rates is a record low 6%.
If you want to pad your credit card to pay the bills, there is a very good chance you cannot do so.
But if you own a house and are current on your mortgage, hooray.
Tyler Durden
Sat, 12/26/2020 – 16:30 -
- Stunning Video Appears To Capture Mysterious LA 'Jetpack Man'
Stunning Video Appears To Capture Mysterious LA ‘Jetpack Man’
After multiple sightings from commercial airline pilots, the mystery of the flying jetpack man soaring through the skies near Los Angeles International Airport may have finally been caught on camera.
New footage, uploaded onto Instagram this week by an instructional flight school called Sling Pilot Academy, wrote in the video’s description that a flight instructor and student filmed what “appears” to be a jetpack soaring through the skies at an altitude of 3,000 feet near Palos Verdes south of Los Angeles.
“The video appears to show a jet pack, but it could also be a drone or some other object. If it is a ‘guy in a jet pack’ then it remains to be seen whether it is a legal test flight (jet packs are real – there is a manufacturer near Los Angeles) or related to the jet pack sightings near LAX recently that caused disruptions to air traffic,” the video’s description said.
An investigation into the jetpack man first started in early September after commercial airline pilots in August spotted someone flying a jetpack near LAX. Since then, the FBI and FAA have been investigating the incident.
With the investigation ongoing, the FBI and FAA were notified about another sighting, this time in October, when commercial airline pilots spotted a man flying a jetpack at 6,000 feet altitude, near LAX.
The latest incident was recorded on Monday, and the encounter was reported to the FAA. Still, the jetpack man remains a mystery.
Tyler Durden
Sat, 12/26/2020 – 16:00 - 2021's Deficit Spending Is Already Out Of Control. Here's Why That's A Problem
2021’s Deficit Spending Is Already Out Of Control. Here’s Why That’s A Problem
Authored by Ryan McMaken via The Mises Institute,
This morning, President Trump apparently threatened to veto the so-called stimulus legislation recently approved by Congress. The legislation features approximately $908 billion worth of spending including $600 stimulus checks for many millions of Americans who qualify. The stimulus spending is part of a much larger spending package which totals $2.3 trillion and is a general supplemental appropriations bill.
But these numbers by no means reflect what will surely be a much, much larger amount of spending that will take place before this fiscal year ends on September 30.
Indeed, even as we were entering just the third month of the fiscal year in early December, it was already clear that spending in 2021 was likely to be another year of both runaway spending and runaway deficits.
The sheer size and scope of the new spending package, which includes every type of pork imaginable—from propping up foreign dictators to subsidizing huge American corporations—is simply a reflection of the fact that all bets are off nowadays when it comes to federal spending.
Within months of his swearing in, it was already abundantly clear that Trump had no interest at all in cutting spending or scaling back the mountains of debt the US was quickly amassing. And now the Covid Panic has accelerated the process all the more.
Just How Much Has Spending Accelerated?
During the 2020 fiscal year, the total budget deficit reached more than $3.1 trillion. Even if we adjust for inflation, 2020’s total deficit was essentially off-the-charts as far as deficits go:
In 2009, in the wake of the 2009 financial crisis, the deficit reached 1.6 trillion in 2019 dollars. But the deficit nearly doubled that previous high in 2020.
And now, 2021, isn’t looking to be much more frugal than 2020. Even before any new stimulus bill have been signed, 2021’s year-to-date deficit already tops 2010’s previous high for the period. Combining October and November (the first two months of this fiscal year) the deficit is at $429 billion. At the very least, 2021 is likely to top $2 trillion.
But, those who take a sanguine view of deficits and the national debt are likely to ask: so what?
Do Deficits Matter?
Well, there several problems that come with these deficits, that are occurring right now. The danger of enormous deficits doesn’t just come in the form of an economic collapse, possibly in the far distant future.
First of all, it is important to point out that it is very unlikely this level of deficit spending could be maintained without a lot of monetization from the central bank. As the federal government engages in deficit spending and floods the market with new debt, it needs the central bank to mop a lot of it up so that interest rates don’t rise.
After all, the US government is already on its way to spending half a trillion dollars per year on interest alone. And that’s all while paying interest rates of well under two percent. Were these interest rates to rise to more historically normal levels, the federal government would have to slash federal programs to cover the rise in debt payments. Clearly, political considerations mean politicians want to avoid this outcome as much as a possible.
Fortunately for politicians, the Fed can defer this interest-payment problem buying up more debt. But where does the Fed get those trillions of dollars to buy up US debt? The Fed prints it.
This could lead to rapidly rising consumer prices, but experience over the past 20 years has instead pointed to the bigger problem being asset price inflation (especially in real estate and stocks).
Asset price inflation is a problem in part because it favors the already-wealthy at the expense of newcomers. Asset price inflation in housing, for example, favors those who already own these assets while putting first-time homebuyers (typically younger and less-wealthy people) at a disadvantage.
This results in part in growing wealth inequality, and a transfer of wealth from the middle class to the wealthy. As Fed-watcher and veteran financial analyst Karen Petrou recently noted, a mounting pile of quantitative evidence shows:
continuing emphasis on price stability [i.e., anti-deflation measures], ultra-low rates, and huge central-bank portfolios does not promote sustained growth, does not meaningfully increase low-income wages, and accelerates market price hikes that both increase wealth inequality and stoke financial crises exactly like the one in March, 2020.
Where does this lead beyond the short term? One likely outcome is the “Japanization” of the US economy, “a long-lasting economic stagnation accompanied by expansionary monetary and fiscal policies.” Contrary to what central bankers repeatedly insist, it is not the case that loose monetary policy can drive up wages or increase general prosperity. The case of Japan shows the opposite, even after decades of highly accommodative monetary policy.
This occurs because expansive monetary policy creates bubbles that pull wealth away from the most productive economic activities, and instead redirects wealth to those industries that fare best in an environment of artificial wealth creation. Thanks to Cantillon effects, this often means that wealth flows into the financial sectors at the expense of the “productive” sectors that employ more people and provide important non-financial goods and services.
While hyperinflation is always a possible result of printing up trillions of new dollars, it’s not necessarily what results. Instead, as Brendan Brown has noted, the effects might instead be a long slow process of impoverishment, similar to what we have seen in Japan, and marked by the growing trend of wealth inequality now being driven by current Fed policy.
The origins of this process of impoverishment process go back largely to deficit spending. So long as the federal government continues to add hundreds of billions—or even trillions—of dollars per year to the national debt, central banks will continue to be called upon to turn debt into dollars. Long-term economic destruction follows.
Tyler Durden
Sat, 12/26/2020 – 15:30 - Two Pandemic Assistance Programs Expire Today, Leaving 12 Million Without Benefits
Two Pandemic Assistance Programs Expire Today, Leaving 12 Million Without Benefits
With Congressional leaders feigning productivity for two months on a renewed stimulus – only for President Trump to veto their 11th hour porkfest and demand they increase direct stimulus checks from $600 to $2,000 per person – a series of assistance programs are set to lapse into the new year.
Senate Majority Leader Mitch McConnell with President Trump in July Two of them, the Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation (PEUC) program, will expire Saturday night, leaving around 12 million Americans without the assistance. As we noted in November, this would roughly translate into an income shortfall of $39BN in 1Q if these workers are unable to find work or alternative income support. BofA calculates that based on its work on fiscal multipliers, income loss of $39BN would translate into a 1.2% hit to growth on an annualized basis in 1Q 2021.
One of the two programs expiring Saturday, the PUA, provided unemployment benefits to around 7.3 million gig workers and others not eligible for traditional unemployment, according to the Century Foundation.
The expiring programs come after lawmakers cobbled a $900 billion pandemic stimulus package to a $1.4 trillion omnibus spending bill, which President Trump vetoed over the sheer amount of pork and $600 direct checks, which he deemed to small.
— Donald J. Trump (@realDonaldTrump) December 23, 2020
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House Democrats will vote on a standalone bill Monday for $2,000 checks, while Congressional Republicans are expected to flatly reject it. Meanwhile, several additional programs are set to expire on December 31. Additionally, the concurrent expiration of eviction moratorium, mortgage forbearance programs, and suspension of student loan payments could all be headwinds early next year, creating further obstacles.
Unless Trump reverses course and signs the package on Tuesday, the government will shut down – sans another short-term bill to keep it limp things along into 2021.
Tyler Durden
Sat, 12/26/2020 – 15:00
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