Dec 27

Today’s News 27th December 2022

  • Escobar: Can China Help Brazil Restart Its Global Soft Power?
    Escobar: Can China Help Brazil Restart Its Global Soft Power?

    Authored by Pepe Escobar,

    Bolsonaro reduced Brazil to resources-exporter status; now Lula should follow Argentina’s lead into Belt and Road…

    Ten days of full immersion in Brazil are not for the faint-hearted. Even restricted to the top two megalopolises, Sao Paulo and Rio, watching live the impact of interlocking economic, political, social and environmental crises exacerbated by the Jair Bolsonaro project leaves one stunned.

    The return of Luiz Inácio Lula da Silva for what will be his third presidential term, starting January 1, 2023, is an extraordinary story trespassed by Sisyphean tasks. All at the same time he will have to

    • fight poverty;

    • reconnect with economic development while redistributing wealth;

    • re-industrialize the nation; and

    • tame environmental pillage.

    That will force his new government to summon unforeseen creative powers of political and financial persuasion.

    Even a mediocre, conservative politician such as Geraldo Alckmin, former governor of the wealthiest state of the union, Sao Paulo, and coordinator of the presidential transition, was simply astonished at how four years of the Bolsonaro project let loose a cornucopia of vanished documents, a black hole concerning all sorts of data and inexplicable financial losses.

    It’s impossible to ascertain the extent of corruption across the spectrum because simply nothing is in the books: Governmental systems have not been fed since 2020.

    Alckmin summed it all up: “The Bolsonaro government happened in the Stone Age, where there were no words and numbers.”

    Now every single public policy will have to be created, or re-created from scratch, and serious mistakes will be inevitable because of lack of data.

    And we’re not talking about a banana republic – even though the country concerned features plenty of (delicious) bananas.

    By purchasing power parity (PPP), according to the International Monetary Fund (IMF), Brazil remains the eighth-ranked economic power in the world even after the Bolsonaro devastation years – behind China, the US, India, Japan, Germany, Russia and Indonesia, and ahead of the UK and France.

    A concerted imperial campaign since 2010, duly denounced by WikiLeaks, and implemented by local comprador elites, targeted the Dilma Rousseff presidency – the Brazilian national entrepreneurial champions – and led to Rousseff’s (illegal) impeachment and the jailing of Lula for 580 days on spurious charges (all subsequently dropped), paved the way for Bolsonaro to win the presidency in 2018.

    Were it not for this accumulation of disasters, Brazil – a natural leader of the Global South – by now might possibly be placed as the fifth-largest geo-economic power in the world.

    What the investment gang wants

    Paulo Nogueira Batista Jr, a former vice-president of the New Development Bank (NDB), or BRICS bank, goes straight to the point: Brazil’s dependence on Lula is immensely problematic.

    Batista sees Lula facing at least three hostile blocs.

    • The extreme right supported by a significant, powerful faction of the armed forces – and this includes not only Bolsonarists, who are still in front of a few army barracks contesting the presidential election result;

    • The physiological right that dominates Congress – known in Brazil as “The Big Center”;

    • International financial capital – which, predictably, controls the bulk of mainstream media.

    The third bloc, to a great extent, gleefully embraced Lula’s notion of a United Front capable of defeating the Bolsonaro project (which project, by the way, never ceased to be immensely profitable for the third bloc).

    Now they want their cut. Mainstream media instantly turned to corralling Lula, operating a sort of “financial inquisition,” as described by crack economist Luiz Gonzaga Belluzzo.

    By appointing longtime Workers’ Party loyalist Fernando Haddad as finance minister, Lula signaled that he, in fact, will be in charge of the economy. Haddad is a political-science professor and was a decent minister of education, but he’s no sharp economic guru. Acolytes of the Goddess of the Market, of course, dismiss him.

    Once again, this is the trademark Lula swing in action: He chose to place more importance on what will be complex, protracted negotiations with a hostile Congress to advance his social agenda, confident that all the lineaments of economic policy are in his head.

    A lunch party with some members of Sao Paulo’s financial elite, even before Haddad’s name was announced, offered a few fascinating clues. These people are known as the “Faria Limers” – after the high-toned Faria Lima Avenue, which houses quite a few post-mod investment banks’ offices as well as Google and Facebook HQs.

    Faria Lima Avenue in San Paulo. Photo: Wikimedia Commons

    Lunch attendees included a smattering of rabid anti-Workers’ Party investors, the proverbial unreconstructed neoliberals, yet most were enthusiastic about opportunities ahead to make a killing, including an investor looking for deals involving Chinese companies.

    The neoliberal mantra of those willing – perhaps – to place their bets on Lula (for a price) is “fiscal responsibility.” That frontally clashes with Lula’s focus on social justice.

    That’s where Haddad comes up as a helpful, polite interlocutor because he does privilege nuance, pointing out that only looking at market indicators and forgetting about the 38% of Brazilians who only earn the minimum wage (1,212 Brazilian real or US$233 per month) is not exactly good for business.

    The dark arts of non-government

    Lula is already winning his first battle: approving a constitutional amendment that allows financing of more social spending.

    That allows the government to keep the flagship Bolsa Família welfare program – of roughly $13 a month per poverty-level family – at least for the next two years.

    A stroll across downtown Sao Paulo – which in the 1960s was as chic as mid-Manhattan – offers a sorrowful crash course on impoverishment, shut-down businesses, homelessness and raging unemployment. The notorious “Crack Land” – once limited to a street – now encompasses a whole neighborhood, much like junkie, post-pandemic Los Angeles.

    Rio offers a completely different vibe if one goes for a walk in Ipanema on a sunny day, always a smashing experience. But Ipanema lives in a bubble. The real Rio of the Bolsonaro years – economically massacred, de-industrialized, occupied by militias – came up in a roundtable downtown where I interacted with, among others, a former energy minister and the man who discovered the immensely valuable pre-salt oil reserves.

    In the Q&A, a black man from a very poor community advanced the key challenge for Lula’s third term: To be stable, and able to govern, he has to have the vast poorest sectors of the population backing him up.

    This man voiced what seems not to be debated in Brazil at all: How did there come to be millions of poor Bolsonarists – street cleaners, delivery guys, the unemployed? Right-wing populism seduced them – and the established wings of the woke left had, and still have, nothing to offer them.

    Addressing this problem is as serious as the destruction of Brazilian  engineering giants by the Car Wash “corruption” racket. Brazil now has a huge number of well-qualified unemployed engineers. How come they have not amassed enough political organization to reclaim their jobs? Why should they resign themselves to becoming Uber drivers?

    José Manuel Salazar-Xirinachs, the new head of the UN Economic Commission on Latin America and the Caribbean (ECLAC), may carp about the region’s economic failure as even worse now than in the “lost decade” of the 1980s: Average annual economic growth in Latin America in the decade up to 2023 is set to be just 0.8%.

    Yet what the UN is incapable of analyzing is how a plundering neoliberal regime such as Bolsonaro’s managed to “elevate” to unforeseen toxic levels the dark arts of little or no investment, low productivity and less than zero emphasis on education.

    President Dilma in da house

    Lula was quick to summarize Brazil’s new foreign policy – which will go totally multipolar, with emphasis on increasing Latin American integration, stronger ties across the Global South and a push to reform the UN Security Council (in sync with BRICS members Russia, China and India).

    Mauro Vieira, an able diplomat, will be the new foreign minister. But the man fine-tuning Brazil on the world stage will be Celso Amorim, Lula’s former foreign minister from 2003 to 2010.

    In a conference that reunited us in Sao Paulo, Amorim elaborated on the complexity of the world Lula is now inheriting, compared with 2003. Yet along with climate change the main priorities – achieving closer integration with South America, reviving Unasur (the Union of South American Nations) and re-approaching Africa – remain the same.

    And then there’s the Holy Grail: “good relations with both the US and China.”

    The Empire, predictably, will be on extreme close watch. US national security adviser Jake Sullivan dropped in to Brasilia, during the fist days of the World Cup soccer tournament, and was absolutely charmed by Lula, who’s a master of charisma. Yet the Monroe Doctrine always prevails. Lula getting closer and closer to BRICS – and the expanded BRICS+ – is considered virtual anathema in Washington.

    Jake Sullivan and Lula in Brasilia on November 28. Photo: Ricardo Stuckert

    So Lula will play most overtly in the environment arena. Covertly, it will be a sophisticated balancing act.

    The combo behind US President Joe Biden called Lula to congratulate him soon after the election results. Sullivan was in Brasilia setting the stage for a Lula visit to Washington. Chinese President Xi Jinping for his part sent him an affectionate letter, emphasizing the “global strategic partnership” between Brazil and China. Russian President Vladimir Putin called Lula earlier this week – and emphasized their common strategic approach to BRICS.

    China has been Brazil’s top trade partner since 2009, ahead of the US. Bilateral trade in 2021 hit $135 billion. The problem is lack of diversification and focus on low added value: iron ore, soybeans, raw crude and animal protein accounted for 87.4% of exports in 2021. China exports, on the other hand, are mostly high-tech manufactured products.

    Brazil’s dependence on commodity exports has indeed contributed for years to its rising foreign reserves. But that implies high concentration of wealth, low taxes, low job creation and dependence on cyclical price oscillations.

    There’s no question China is focused on Brazilian natural resources to fuel its new development push – or “peaceful modernization,” as established by the latest Party Congress.

    But Lula will have to strive for a more equal trade balance in case he manages to restart the nation as a solid economy. In 2000, for instance, Brazil’s top export item was Embraer jets. Now, it’s iron ore and soybeans; yet another dire indicator of the ferocious de-industrialization operated by the Bolsonaro project.

    China is already investing substantially in the Brazilian electric sector – mostly due to state companies being bought by Chinese companies. That was the case in 2017 of State Grid buying CPFL in Sao Paulo, for instance, which in turn bought a state company from southern Brazil in 2021.

    From Lula’s point of view, that’s inadmissible: a classic case of privatization of strategic public assets.

    A different scenario plays in neighboring Argentina. Buenos Aires in February became an official partner of the New Silk Roads, or Belt and Road Initiative, with at least $23 billion in new projects on the pipeline. The Argentine railway system will be upgraded by – who else? – Chinese companies, to the tune of $4.6 billion.

    The Chinese will also be investing in the largest solar energy plant in Latin America, a hydroelectric plant in Patagonia, and a nuclear energy plant – complete with transfer of Chinese technology to the Argentine state.

    Lula, beaming with invaluable soft power not only personally when it comes to Xi but also appealing to Chinese public opinion, can get similar strategic partnership deals, with even more amplitude. Brasilia may follow the Iranian partnership model – offering oil and gas in exchange for building critical infrastructure.

    Inevitably, the golden path ahead will be via joint ventures, not mergers and acquisitions. No wonder many in Rio are already dreaming of high-speed rail linking it to Sao Paulo in just over an hour, instead of the current, congested highway journey of six hours (if you’re lucky).

    A key role will be played by former president Dilma Rousseff, who had a long, leisurely lunch with a few of us in Sao Paulo, taking her time to recount, in minutiae, everything from the day she was officially arrested by the military dictatorship (January 16, 1970) to her off-the-record conversations with then-German chancellor Angela Merkel, Putin, and Xi.

    President Dilma Rousseff during a bilateral meeting with the president of the People’s Republic of China, Xi Jinping, at the G20 Saint Petersburg summit in 2013. Photo: Wikimedia Commons

    It goes without saying that her political – and personal – capital with both Xi and Putin is stellar. Lula offered her any post she wanted in the new government. Although still a state secret, this will be part of a serious drive to polish Brazil’s global profile, especially across the Global South.

    To recover from the previous, disastrous six years – which included a two-year no man’s land (2016-2018) after the impeachment of president Dilma – Brazil will need an unparalleled national drive of re-industrialization at virtually every level, complete with serious investment in research and development, training of specialized work forces and technology transfer.

    There is a superpower that can play a crucial role in this process: China, Brazil’s close partner in the expanding BRICS+. Brazil is one of the natural leaders of the Global South, a role much prized by the Chinese leadership.

    The key now is for both partners to establish a high-level strategic dialogue – all over again. Lula’s first high-profile foreign visit may be to Washington. But the destination that really matters, as we watch the river of history flow, will be Beijing.

    Tyler Durden
    Mon, 12/26/2022 – 23:55

  • University Of Idaho Professor Sues TikTok Personality Who Linked Her To Student Murders
    University Of Idaho Professor Sues TikTok Personality Who Linked Her To Student Murders

    Authored by Dorothy Li via The Epoch Times,

    A professor at the University of Idaho filed a defamation lawsuit against a TikTok personality, who published dozens of videos linking the professor to the killing of four students at the campus last month, court documents show.

    The deaths of the four University of Idaho students remain unsolved after their bodies were found in a three-story house near the campus on Nov. 13. Police said each victim was stabbed multiple times and some had defensive wounds. The authorities have made no arrest, nor did they identify a suspect in the case.

    Ashley Guillard, a purported crime sleuth with over 108,000 followers on the short-video platform, published “many videos on TikTok falsely stating that Plaintiff Rebecca Scofield participated in the murders because she was romantically involved with one of the victims,” read the complaint filed on Dec. 21.

    “Guillard’s statements are false. Professor Scofield did not participate in the murders, and she had never met any of the victims, let alone entered a romantic relationship with them,” according to the lawsuit filed in Idaho’s federal district court.

    Guillard, who consults Tarot cards and other readings to obtain information about murders, made the accusation against the history professor on Nov. 22, the lawsuit alleges.

    “I don’t care what y’all say …Rebecca Scofield killed [the four students] … REBECCA WAS THE ONE TO INITIATE THE PLAN…” Guillard wrote in a video on TikTok.

    Scofield, an associate professor who served as the chair of the history department, “did not commit or in any way participate in the murders of the four students,” the complaint states.

    Scofield was with her husband in Portland, Oregon, visiting friends during the time when the four students were killed, according to the complaint.

    The lawsuit states that Scofield had never taught any of the victims.

    “Although the University of Idaho is a relatively small university, she does not recall ever meeting any one of these students.”

    The document added the professor had also never met Guillard before.

    The TikTok app is seen on a smartphone in this illustration taken on July 13, 2021. (Dado Ruvic/Illustration/Reuters)

    Cease-and-Desist Letters and Response

    According to the lawsuit, Scofield’s lawyer sent a cease-and-desist letter to Guillard on Nov. 29, stating Guillard’s claims were baseless and demanding her to take the videos down.

    Yet Guillard didn’t stop posting videos. In a video published on Dec. 1, Guillard said, “I’m not worried about Rebecca Scofield suing me because she will be using her resources to fight four murder cases.”

    “She ordered the execution,” Guillard added, according to the complaint.

    On Dec. 8, Scofield’s second cease-and-desist letter was sent to Guillard, “again demanding that Guillard take down her defamatory posts and that Guillard stop making defamatory TikTok,” according to the complaint.

    Guillard’s videos have been viewed “millions of times” and amplified her account “at the expense of Professor Scofield’s reputation,” the lawsuit said.

    Guillard’s TikToks have caused the professor “significant emotional distress,” the lawsuit said. “She fears that Guillard’s false statements may motivate someone to cause harm to her or her family members.”

    The professor’s lawsuit is seeking a trial by jury and compensatory and punitive damages.

    Guillard responded to the lawsuits with more videos on the platform. In one video, Guillard wrote, “Rebeca Scofield will regret this lawsuit.” In another, she said, “I’m ON FIRE with excitement! SEE YOU IN COURT REBECCA SCOFIELD!!”

    The Epoch Times has contacted Scofield’s lawyer and Guillard for comment.

    Tyler Durden
    Mon, 12/26/2022 – 23:20

  • What Will The FBI Not Do?
    What Will The FBI Not Do?

    Authored by Victor Davis Hanson via AmGreatness.com,

    Who watches the watchers?

    The FBI on Wednesday finally broke its silence and responded to the revelations on Twitter of close ties between the bureau and the social media giant—ties that included efforts to suppress information and censor political speech. 

    “The correspondence between the FBI and Twitter show nothing more than examples of our traditional, longstanding and ongoing federal government and private sector engagements, which involve numerous companies over multiple sectors and industries,” the bureau said in a statement.

    “As evidenced in the correspondence, the FBI provides critical information to the private sector in an effort to allow them to protect themselves and their customers. The men and women of the FBI work every day to protect the American public. It is unfortunate that conspiracy theorists and others are feeding the American public misinformation with the sole purpose of attempting to discredit the agency.” 

    Almost all of the FBI communique is untrue, except the phrase about the bureau’s “engagements which involve numerous companies over multiple sectors and industries.” 

    Future disclosures will no doubt reveal similar FBI subcontracting with other social media concerns of Silicon Valley to stifle free expression and news deemed problematic to the FBI’s agenda. 

    The FBI did not merely engage in “correspondence” with Twitter to protect the company and its “customers.” Instead, it effectively hired Twitter to suppress the free expression of some of its users, as well as news stories deemed unhelpful to the Biden campaign and administration—to the degree that the bureau’s requests sometimes even exceeded those of Twitter’s own left-wing censors.

    The FBI did not wish to help Twitter “to protect themselves [sic],” given the bureau’s Twitter liaisons were often surprised at the FBI’s bold requests to suppress the expression of those who had not violated Twitter’s own admittedly biased “terms of service” and “community standards.”

    The FBI and its helpers on the Left now reboot the same boilerplate about “conspiracy theorists” and “misinformation” smears used against anyone who rejected the FBI-fed Russian collusion hoax and the bureau’s peddling of the “Russian disinformation” lie to suppress accurate pre-election news about the authenticity of Hunter Biden’s laptop. 

    The FBI is now, tragically, in freefall. The public is at the point, first, of asking what improper or illegal behavior will the bureau not pursue, and what, if anything, must be done to reform or save a once great but now discredited agency.

    Consider the last four directors, the public faces of the FBI for the last 22 years. Ex-director Robert Mueller testified before Congress that he simply would not or could not talk about the fraudulent Steele dossier. He claimed that it was not the catalyst for his special counsel investigation of Donald Trump’s alleged ties with the Russians when, of course, it was. 

    Mueller also testified that he was “not familiar” with Fusion GPS, although Glenn Simpson’s opposition research firm subsidized the dossier through various cutouts that led back to Hillary Clinton’s 2016 presidential campaign. And the skullduggery in the FBI-subsidized dossier helped force the appointment of Mueller himself. 

    While under congressional oath, Mueller’s successor James Comey on some 245 occasions claimed that he “could not remember,” “could not recall,” or “did not know” when asked simple questions fundamental to his own involvement with the Russian collusion hoax. 

    Comey, remember, memorialized a confidential conversation with President Trump on an FBI device and then used a third party to leak it to the New York Times. In his own words, the purpose was to force a special counsel appointment. The gambit worked, and his friend and predecessor Robert Mueller got the job. Twenty months and $40 million later, Mueller’s investigation tore the country apart but could find no evidence that Trump, as Steele alleged, colluded with the Russians to throw the 2016 election. 

    Comey also seems to have reassured the president that he was not the target of an ongoing FBI investigation, when in fact, Trump was.

    Comey was never indicted for either misleading or lying to a congressional committee or leaking a document variously considered either confidential or classified. 

    While under oath, his interim successor, Andrew McCabe, on a number of occasions flat-out lied to federal investigators. Or as the office of the inspector general put it:

    As detailed in this report, the OIG found that then-Deputy Director Andrew McCabe lacked candor, including under oath, on multiple occasions in connection with describing his role in connection with a disclosure to the WSJ, and that this conduct violated FBI Offense Codes 2.5 and 2.6. The OIG also concluded that McCabe’s disclosure of the existence of an ongoing investigation in the manner described in this report violated the FBI’s and the Department’s media policy and constituted misconduct.

     McCabe purportedly believed Trump was working with the Russians as a veritable spy—a false accusation based entirely on the FBI’s paid, incoherent prevaricator Christopher Steele. And so, McCabe discussed with Deputy Attorney General Rod Rosenstein methods to have the president’s conversations wiretapped via a Rosenstein-worn stealthy recording device, presumably without a warrant.

    Note the FBI ruined the lives of General Michael Flynn and Carter Page with false allegations of criminal conduct or untruthful testimonies. Under current director Christopher Wray, the FBI has surveilled parents at school boards meetings—on the prompt of the National School Boards Association, whose president wrote Attorney General Merrick Garland alleging that bothersome parents upset over critical race indoctrination groups were supposedly violence-prone and veritable terrorists. 

    Under Wray, the FBI staged the psychodramatic Mar-a-Lago raid on an ex-president’s home. The FBI likely leaked the post facto myths that the seized documents contained “nuclear codes” or “nuclear secrets.”  

    Under Wray, the FBI perfected the performance-art, humiliating public arrests of former White House officials or Biden Administration opponents, whether it was the nocturnal rousting of Project Veritas muckraker James O’Keefe in his underwear or the arrest—with leg restraints=—of former White House advisor Peter Navarro at Reagan National Airport for misdemeanor contempt of Congress charge or the detention of Trump election lawyer John Eastman at a restaurant with his family and the confiscation of his phone. Neither O’Keefe nor Eastman has yet been charged with any serious crimes. 

    The FBI arguably interfered in two presidential elections, and a presidential transition, and possibly determinatively so. In 2016, James Comey announced that his investigation had found that Hillary Clinton had improperly if not illegally used her private email server to conduct official State Department business, some of it confidential and classified, and likely intercepted by foreign governments. All that was a clear violation of federal statutes. Comey next, quite improperly as a combined FBI investigator and a de facto federal prosecutor, deduced that such violations did not merit prosecution. 

    Around the same time, the FBI had hired as a source the foreign national and political opposition hitman Christopher Steele. It helped Steele to spread among the media his fraudulent dossier and used its unverified and false contents to win FISA warrants against U.S. citizens on the bogus charges of colluding with the Russians to throw the election to Donald Trump. By the FBI’s own admission, it would not have obtained warrants to surveil Trump campaign associates without the use of Steele’s dossier, which it also admittedly either knew was a fraud or could not corroborate.

    Again, such allegations in the dossier were false and, apparently, the FBI soon knew they were bogus since one of its own lawyers—the now-convicted felon Kevin Clinesmith—found it necessary also to alter a court-submitted document to feign incriminatory information. 

    The FBI, on the prompt of lame-duck members of the Obama Justice Department, during a presidential transition, set up an entrapment ambush of National Security Advisor Michael Flynn. It was an effort to lure Flynn into admitting to a violation of the Logan Act, a 223-year old-law that has led to only two indictments and zero convictions. 

    During the 2020 election, the FBI suppressed knowledge of its possession of Hunter Biden’s laptop. Early on, the bureau knew that the computer and its contents were authentic and yet kept its contents suppressed. 

    Moreover, the FBI sought to contract out Twitter (at roughly $3.5 million) as a veritable subsidiarity to suppress social media traffic about the laptop and speech the bureau deemed improper. 

    Again, although the FBI knew the laptop in its possession was likely genuine, it still sought to use Twitter employees to suppress pre-election mention of that reality. At the same time, bureau officials remained mum when 51 former “intelligence officials” misled the country by claiming that the laptop had all the hallmarks of “Russian disinformation.” Polls later revealed that had the public known the truth about the laptop, a significant number likely would have voted differently—perhaps enough to change the outcome of the election.

    The media, Twitter, Facebook, and former intelligence operatives were all following the FBI’s own preliminary warning bulletin that “Foreign Actors and Cybercriminals Likely to Spread Disinformation Regarding 2020 Election Results”—even as the bureau knew the laptop in its possession was most certainly not Russian disinformation. And, of course, the FBI had helped spread the Russian collusion hoax in 2016. 

    In addition, the FBI-issued phones of agent Peter Strzok and attorney Lisa Page, along with members of Robert Mueller’s special counsel “dream team”—all under subpoena—had their data mysteriously wiped clean, purportedly “by accident.” 

    Apparently, the paramours Strzok and Page, in particular, had much more to hide, given how earlier they had frequently expressed their venom toward candidate Donald Trump. Strzok boasted to Page that the FBI in general, and Andrew McCabe in particular, had an “insurance policy” means of denying Trump the presidency: 

    I want to believe the path you threw out in Andy’s office—that there’s no way he gets elected—but I’m afraid we can’t take the risk. It’s like an insurance policy in the unlikely event you die before you’re 40.

    When some of their embarrassing texts emerged, both were dismissed by the special counsel. But Mueller carefully did so by staggering Strozk and Pages’ departures and not immediately releasing the reasons for their firings or reassignments.

    To this day, the public has no idea what the FBI was doing on January 6, how many FBI informants and agents were among the rioters, and to what degree they knew in advance of the protests. The New York Times reporter most acquainted with the January 6 riot, Matthew Rosenberg, dismissed the buffoonish violence as “no big deal” and scoffed, “They were making this an organized thing that it wasn’t.” 

    “There were a ton of FBI informants among the people who attacked the Capitol,”  Rosenberg noted. We have never been told anything about that “ton”—a topic of zero interest to the January 6 select committee.

    What are the people to do about a federal law enforcement agency whose directors either repeatedly lie under oath, or mislead, or do not cooperate with congressional overseers? What should we do with a bureau that alters court documents, deceives the court with information the FBI had good reason to know was false and leaks records of confidential presidential conversations to the media to prompt the appointment of a special prosecutor? What should be done with a government agency that pays social media corporations to warp the dissemination of the news and suppress free expression and communications? Or an agency that hires a foreign national to gather dirt on a presidential candidate and plots to ensure that there is “no way” a presidential candidate “gets elected” and destroys subpoenaed evidence? 

    What, if anything, should the people do about a once-respected law enforcement agency that repeatedly smears its critics, most recently as “conspiracy theorists”?

    The current FBI leadership under Christopher Wray, in the tradition of recent FBI directors, has stonewalled congressional overseers about FBI activity during the Trump and Biden administrations. In “Après moi, le déluge” fashion, the bureau acts as if it assumes the next Republican administration in office will remove the current hierarchy. And thus, it assumes for now, not cooperating with Republican investigations while Democrats hold control of the Senate and White House for a brief while longer ensures exemption. 

    Wray, most recently, cut short his Senate testimony on the pretext of an unspecified engagement, which turned out to be flying out on the FBI Gulfstream jet to his vacation home.

    Yet the bureau’s lack of candor, contrition, and cooperation has only further alienated the public, especially traditional and conservative America, characteristically the chief source of support for the FBI. 

    There have been all sorts of remedies proposed for the bureau. 

    The three reforms most commonly suggested include:

    1) simply dissolve the FBI in the belief that its concentration of power in Washington has become uncontrollable and is increasingly put to partisan service, including but not limited to the warping of U.S. presidential elections;

    2) move the FBI headquarters out of the Washington D.C. nexus, preferably in the age of Zoom to a more convenient and central location in the United States, perhaps an urban site such as Salt Lake City, Denver, Kansas City, or Oklahoma City; or

    3) break-up and decentralize the FBI and redistribute its various divisions to different departments to ensure that the power of its $11 billion budget and 35,000 employees are no longer aggregated and put in service of particular political agendas. 

    The next two years are dangerous times for the FBI—and the country. The House will soon likely begin investigations of the agency’s improper behavior. Yet, simultaneously, the Biden Justice Department will escalate its use of the bureau as a partisan investigative service for political purposes. 

    The FBI’s former embattled, high-ranking administrators who have been fired or forced to leave the agency—Andrew McCabe, James Comey, Peter Strzok, James Baker, Lisa Page, and others—will continue to appear on the cable news stations and social media to inveigh against critics of the FBI, despite being all deeply involved in the Russia-collusion hoax. 

    Merrick Garland will continue to order the FBI to hound perceived enemies through surveillance and performance art arrests. And the people will only grow more convinced the bureau has become Stasi-like and cannot be reformed but must be broken up—even as in extremis a defiant and unapologetic FBI will, as its latest communique shows, attack its critics. 

    We are left with the dilemma of Quis custodiet ipsos custodes? Who watches the watchers?

    Tyler Durden
    Mon, 12/26/2022 – 22:45

  • Omnibus Shows Congress's Priorities: Authoritarianism & War
    Omnibus Shows Congress’s Priorities: Authoritarianism & War

    Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

    Those hoping for a Christmastime government shutdown were once again disappointed when Congress passed a 4,000-page, $1.7 trillion omnibus appropriations bill that few, if any, Representatives and Senators read before voting on. The Republican leadership celebrated this bloated monstrosity because it spends $858 billion on warfare while “only” spending $772.5 billion on welfare.

    No one should think Republican insistence on more warfare than welfare spending means Democrats oppose the warfare state. Under President Biden and a Democrat-controlled Congress, “defense” spending has increased by 4.3 percent over the last two years. Similarly, every Republican President in recent years—including two who had a Republican-controlled Congress for at least part of their term—supported huge increases in welfare state spending. Most Democrats only pretend to oppose warfare and most Republicans only pretend to oppose welfare to appease their parties’ respective bases.

    The Omnibus appropriates a $44.5 billion giveaway to Ukraine. This brings the total US spending on Ukraine’s military to over $100 billion – approximately 50 percent more than Russia’s entire military budget! This money is spent in a conflict that does not affect US security, yet one that would likely have not occurred were it not for prior US meddling in the region.

    The Omnibus bill provides $11.3 billion for the Federal Bureau of Investigation (FBI), a $569.6 million increase and $524 billion above the President’s request. According to the Democratic leadership, the funding increase is so the FBI can better fight “extremist violence and domestic terrorists.”

    The public recently learned what the FBI considers an appropriate way to fight “extremism,” with the release of emails between Twitter officials and the FBI. These memos show the Bureau was working with Twitter—and almost certainly other social media companies—to suppress certain stories, such as Hunter Biden’s laptop, and points of view, such as skepticism regarding masks, lockdowns, and vaccine mandates. The bureau even used taxpayer funds to reimburse Twitter for the costs of implementing these “requests.” Government officials working with private companies to silence American citizens is a clear violation of the First Amendment.

    This is hardly the first time the FBI has violated the constitutional rights of American citizens. In fact, since its founding the Bureau has targeted political activists and leaders such as Martin Luther King, whose agenda was considered “extreme” or “dangerous” by the Bureau’s corrupt leadership. The idea of a national police force with the power to target Americans because of their political beliefs would have horrified the drafters of the Constitution. The federal government has no constitutional authority over criminal law except for cases of piracy, counterfeiting, and treason. Libertarians, constitutional conservatives, and progressives who still care about civil liberties should join together to defund the FBI.

    The fiscal year 2022 omnibus appropriations bill expands government, reduces liberty, and increases government debt, forcing the Federal Reserve to monetize more debt leading to more price inflation. Our political elites prioritize militarism abroad and authoritarianism at home over addressing the problems facing the American people like the Federal Reserve’s destructive monetary policy. This will fuel growing discontent with the political system.

    As the economy continues to worsen and the attempt to run the world continues to result in failures, the discontent will grow until the welfare warfare system collapses and, hopefully, a new error of liberty peace and prosperity dawns.

    Tyler Durden
    Mon, 12/26/2022 – 22:10

  • "Full-Blown Meltdown": Southwest Cancels Nearly 3,000 Flights As Holiday Travel Hits Perfect Storm
    “Full-Blown Meltdown”: Southwest Cancels Nearly 3,000 Flights As Holiday Travel Hits Perfect Storm

    Southwest Airlines canceled nearly 3,000 flights on Monday, as a historic winter storm and inadequate staffing made for a perfect storm of holiday chaos the day after Christmas. 

    Passengers line up at Denver International Airport (Hyoung Chang/ Getty)

    As of 9PM on Monday, Southwest had canceled 2,882 flights – or 70% of its schedule, according to flightaware.com. Overall, 82% of Southwest flights were either canceled or delayed. By airport, Denver International saw 24% of flights canceled, while 29% were delayed.

    Tomorrow is also slated to be a total mess, with over 2,400 Tuesday flights canceled.

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    “Yikes, @SouthwestAir! This is clearly a meltdown,” tweeted former TSA official Ross Feinstein, who’s been monitoring the situation.

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    https://platform.twitter.com/widgets.jsA Southwest official, Chris Perry, told NPR that the disruptions are a result of the ongoing winter storm, and that the company “stabilize and improve its operation” as the weather improves.

    From Houston, Texas, and Tampa, Fla., to Cleveland, Ohio, and Denver, Colo., passengers are sharing photos and video of overwhelmed baggage claim areas and long lines at reservation counters. At Southwest, the customer service phone line’s hold times averaged more than two hours, sometimes reaching four hours, according to Colorado Public Radio. -NPR

    “I’m okay with these travel situations and fly on by myself when it’s just me, but when my one-year-old has to suffer through it because of ineptitude and mismanagement, that becomes personal,” said Southwest passenger Joshua Caudle, adding “I’m never going to do this with that company again.”

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    Other problems include “connecting flight crews to their schedules,” according to Perry, who who said this has made it difficult for employees to participate in crew scheduling services and get reassignments.

    A Southwest passenger who says she was attempting to fly from Missouri to Denver said she missed spending Christmas with her family after several delays and cancellations to flights out of the Kansas City International Airport. Despite her being grounded, her luggage was sent to Denver without her, she wrote on Twitter. -NPR

    “This is really as bad as it gets for an airline,” said Kyle Potter, executive editor of Thrifty Traveler, calling it a “full-blown meltdown.”

    “We’ve seen this again and again over the course of the last year or so, when airlines really just struggle especially after a storm, but there’s pretty clear skies across the country.”

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    Tyler Durden
    Mon, 12/26/2022 – 21:35

  • Struggling Peloton Discounts Bikes Even More By Selling Refurbished Ones
    Struggling Peloton Discounts Bikes Even More By Selling Refurbished Ones

    Peloton Interactive was on top of the world in the early days of the virus pandemic. Now the fitness equipment manufacturer is struggling to keep its business afloat, announced Monday it would begin to sell refurbished bikes for a discount. 

    Refurbished Peloton Bikes range between $1,145 to $1,995, which includes delivery and setup fees. That’s a $300 savings for the base Peloton Bike and $500 savings for Peloton Bike+. 

    Add refurbished bikes to Peloton’s lineup of attempting to turn the sinking ship around. The company recently announced a national rental program for both models of the bikes, allowing consumers month-to-month options rather than outright buying the bikes or financing. 

    The refurbished bikes come as the company faces several challenging quarters, even as it shifts its hardware-heavy focused business model to a subscription revenue one. It also faces a perfect storm of demand headwinds because the once insanely popular overpriced exercise bikes won’t likely ever experience 2020-21 demand again. 

    Shares of Peloton have crashed 75% this year as rational investors see no signs that demand trouble will abate anytime soon. 

    CEO Barry McCarthy, who took the helm earlier this year, recently said the company’s turnaround is a “work in progress.”

    Tyler Durden
    Mon, 12/26/2022 – 21:00

  • When The FBI Attacks Critics As "Conspiracy Theorists", It's Time To Reform The Bureau
    When The FBI Attacks Critics As “Conspiracy Theorists”, It’s Time To Reform The Bureau

    Authored by Jonathan Turley,

    Below is my column in the Hill on the need for a new “Church Committee” to investigate and reform the Federal Bureau of Investigation (FBI) after years of scandals involving alleged political bias. In response to criticism over its role in Twitter’s censorship system, the FBI lashed out against critics as “conspiracy theorists” spreading disinformation. However, it still refuses to supply new information on other companies, beyond Twitter, that it has paid to engage in censorship.

    Here is the column:

    “Conspiracy theorists … feeding the American public misinformation” is a familiar attack line for anyone raising free-speech concerns over the FBI’s role in social media censorship. What is different is that this attack came from the country’s largest law enforcement agency, the FBI — and, since the FBI has made combatting “disinformation” a major focus of its work, the labeling of its critics is particularly menacing.

    Fifty years ago, the Watergate scandal provoked a series of events that transformed not only the presidency but federal agencies like the FBI. Americans demanded answers about the involvement of the FBI and other federal agencies in domestic politics. Ultimately, Congress not only investigated the FBI but later impanelled the Church Committee to investigate a host of other abuses by intelligence agencies.

    A quick review of recent disclosures and controversies shows ample need for a new Church Committee:

    The Russian investigations

    The FBI previously was at the center of controversies over documented political bias. Without repeating the long history from the Russian influence scandal, FBI officials like Peter Strzok were fired after emails showed open bias against presidential candidate Donald Trump. The FBI ignored warnings that the so-called Steele dossier, largely funded by the Clinton campaign, was likely used by Russian intelligence to spread disinformation. It continued its investigation despite early refutations of key allegations or discrediting of sources.

    Biden family business

    The FBI has taken on the character of a Praetorian Guard when the Biden family has found itself in scandals.

    For example, there was Hunter Biden’s handgun, acquired by apparently lying on federal forms. In 2018, the gun allegedly was tossed into a trash bin in Wilmington, Del., by Hallie Biden, the widow of Hunter’s deceased brother and with whom Hunter had a relationship at the time. Secret Service agents reportedly appeared at the gun shop with no apparent reason, and Hunter later said the matter would be handled by the FBI. Nothing was done despite the apparent violation of federal law.

    Later, the diary of Hunter’s sister, Ashley, went missing. While the alleged theft normally would be handled as a relatively minor local criminal matter, the FBI launched a major investigation that continued for months to pursue those who acquired the diary, which reportedly contains embarrassing entries involving President Biden. Such a massive FBI deployment shocked many of us, but the FBI built a federal case against those who took possession of the diary.

    Targeting Republicans and conservatives

    Recently the FBI was flagged for targeting two senior House Intelligence Committee staffers in grand jury subpoenas sent to Google. It has been criticized for using the Jan. 6 Capitol riot investigations to target conservative groups and GOP members of Congress, including seizing the phone of one GOP member.

    The FBI also has been criticized for targeting pro-life violence while not showing the same vigor toward pro-choice violence.

    Hunter’s laptop

    While the FBI was eager to continue the Russian investigations with no clear evidence of collusion, it showed the opposite inclination when given Hunter Biden’s infamous laptop. The laptop would seem to be a target-rich environment for criminal investigators, with photos and emails detailing an array of potential crimes involving foreign transactions, guns, drugs and prostitutes. However, reports indicate that FBI officials moved to quash or slow any investigation.

    The computer repairman who acquired the laptop, John Paul Mac Isaac, said he struggled to get the FBI to respond and that agents made thinly veiled threats regarding any disclosures of material related to the Biden family; he said one agent told him that “in their experience, nothing ever happens to people that don’t talk about these things.”

    The ‘Twitter Files’

    The “Twitter Files” released by Twitter’s new owner, Elon Musk, show as many as 80 agents targeting social-media posters for censorship on the site. This included alleged briefings that Twitter officials said was the reason they spiked the New York Post’s Hunter Biden laptop story before the 2020 election.

    The FBI sent 150 messages on back channels to just one Twitter official to flag accounts. One Twitter executive expressed unease over the FBI’s pressure, declaring: “They are probing & pushing everywhere they can (including by whispering to congressional staff).”

    We also have learned that Twitter hired a number of retired FBI agents, including former FBI general counsel James Baker, who was a critical and controversial figure in past bureau scandals over political bias.

    Attacking critics

    It is not clear what is more chilling — the menacing role played by the FBI in Twitter’s censorship program, or its mendacious response to the disclosure of that role. The FBI has issued a series of “nothing-to-see-here” statements regarding the Twitter Files.

    In its latest statement, the FBI insists it did not command Twitter to take any specific action when flagging accounts to be censored. Of course, it didn’t have to threaten the company — because we now have an effective state media by consent rather than coercion. Moreover, an FBI warning tends to concentrate the minds of most people without the need for a specific threat.

    Finally, the files show that the FBI paid Twitter millions as part of this censorship system — a windfall favorably reported to Baker before he was fired from Twitter by Musk.

    Criticizing the FBI is now ‘disinformation’

    Responding to the disclosures and criticism, an FBI spokesperson declared: “The men and women of the FBI work every day to protect the American public. It is unfortunate that conspiracy theorists and others are feeding the American public misinformation with the sole purpose of attempting to discredit the agency.”

    Arguably, “working every day to protect the American public” need not include censoring the public to protect it from errant or misleading ideas.

    However, it is the attack on its critics that is most striking. While the FBI denounced critics of an earlier era as communists and “fellow travelers,” it now uses the same attack narrative to label its critics as “conspiracy theorists.”

    After Watergate, there was bipartisan support for reforming the FBI and intelligence agencies. Today, that cacophony of voices has been replaced by crickets, as much of the media imposes another effective blackout on coverage of the Twitter Files. This media silence suggests that the FBI found the “sweet spot” on censorship, supporting the views of the political and media establishment.

    As for the rest of us, the FBI now declares us to be part of a disinformation danger which it is committed to stamping out – “conspiracy theorists” misleading the public simply by criticizing the bureau.

    Clearly, this is the time for a new Church Committee – and time to reform the FBI.

    Tyler Durden
    Mon, 12/26/2022 – 20:30

  • Bitcoin Hash Rate Plunged, Miners Curtailed Operations As Power Grids Overwhelmed During Arctic Blast
    Bitcoin Hash Rate Plunged, Miners Curtailed Operations As Power Grids Overwhelmed During Arctic Blast

    A major winter storm and arctic blast have claimed the lives of at least 37 deaths nationwide. Amid the sub-freezing temperatures across the Lower 48, crypto miners voluntarily cut or entirely shuttered operations to alleviate stress on struggling power grids. As a result, the Bitcoin mining hash rate plunged. 

    According to Glassnode data, Bitcoin’s hast rate tumbled to 156.36 EH/s on Dec. 24 from 252.98 EH/s on Dec. 21. 

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    This was the most significant daily drop since summer. 

    The plunging hash rate for Bitcoin indicates fewer mining operations were online to mine and process transactions on the blockchain network. Some of the miners that went offline were Riot Blockchain and Core Scientific. 

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    Lee Bratcher, president of the Texas Blockchain Council, wrote in a LinkedIn post that “99% of industrial-scale bitcoin mining load was off!” on Saturday morning as cold weather poured into much of Texas, as the state’s grid operator was making sure there was adequate power capacity to meet demand. 

    Satoshi Action Fund CEO Dennis Porter said the miners’ curtailment in Texas proves they support the grid in times of stress. 

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    For a more in-depth view of global crypto mining, Cambridge Bitcoin Electricity Consumption Index shows the US accounts for 38% of the average monthly hash rate share. Within the US, New York, Kentucky, Georgia, and Texas are some of the top mining states, many of which experienced power outages. 

    As of Monday morning, power outages have declined across the eastern half of the US, and temperatures are warming slightly. Bitcoin’s hash rate has also returned to 248 EH/s.

    The hash rate is not the only metric that plunged (now recovered) for Bitcoin. Many crypto analysts on Twitter pointed out that Bitcoin market volatility is at the lowest in years. 

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    One popular technical indicator to estimate volatility is Bollinger Bands. The indicator shows Bitcoin trading range is narrowing, another indicator of a low volatility period, but that usually precedes a new trend.

    Bitcoin is trading around $16,800 this morning. 

    Tyler Durden
    Mon, 12/26/2022 – 20:00

  • Oil Jumps After China Scraps Inbound Quarantine, Will Reopen Borders Effectively Ending Zero-Covid Regime
    Oil Jumps After China Scraps Inbound Quarantine, Will Reopen Borders Effectively Ending Zero-Covid Regime

    And just like that China’s zero-Covid policy is over.

    On Monday, Beijing announced that it will remove the country’s quarantine requirements for inbound travelers from January 8, dismantling the final remnants of a zero-Covid regime that closed it off from the rest of the world for almost three years, sent its economy in an on again/off again tailspin, and which not only sparked a record surge of new covid infections which have failed to translate into a zombie apocalypse (confirming that covid was never much stronger than the flu) but also has forced China to halt all official covid data reporting after being caught lying one too many times, an unheard of event for China where every “data point” is fake.

    Starting Jan. 8, people arriving in China will no longer be quarantined, though they will be required to obtain negative Covid test results within 48 hours of departure. That compares with the current requirement of eight days isolation — five days at a designated quarantine hotel, or central facility, followed by three days at home. At one point this year the quarantine arrival rule required travelers to spend three weeks in a hotel room.

    The country also downgraded the management of Covid from the highest level to the second highest, effectively removing the legal justification for aggressive Covid Zero restrictions. Still, the National Health Commission said it will continue to monitor the virus’s spread and vowed to take appropriate measures to suppress the peak of Covid outbreaks.

    China’s National Health Commission unveiled the move as part of a wider announcement that downgraded the country’s management of Covid-19, a virus which is currently sweeping the nation, and definitively abandoned a host of other preventive measures. The NHC also said that more than 90% of cases of the omicron variant were “mild or asymptomatic”, part of a shift in tone towards coronavirus as it rages across a country where until recently very few of the 1.4bn population had contracted it, at least according to the government’s fabricated numbers.

    In its long overdue scramble for natural immunity, the government, which this month also scrapped the requirement for positive cases to quarantine at central facilities, is now battling a severe winter outbreak with estimated cases spiraling into the hundreds of millions and health services under pressure. While models have estimated the virus could lead to close to 1 million deaths – probably the same models that predicted the end of western civilization as we know it some time in late 2020 – China’s public data has ceased to reflect the situation on the ground and other zero-Covid rules such as mass-testing have largely ended.

    China pursued a strict zero-Covid policy – the pet project of dictator Xi Jinping – shortly after the pandemic first emerged, locking down many of its largest cities over multiple years of the policy and imposing quarantine requirements on foreign arrivals as part of an attempt to eliminate the virus within its borders. But late this year, the policy finally began to unravel as authorities struggled to contain outbreaks across multiple cities, including the capital Beijing, while violent protesters took to the streets in November in a rare display of defiance against the central government’s approach, which was the tipping point that led Beijing to dramatically relax the policy shortly afterwards.

    As the FT puts it, “Monday’s announcement signals the end of the zero-Covid system that transformed China’s relationship with the outside world, and which for long periods successfully limited the transmission of a virus that had swept through every other advanced economy”, which prevented the country from developing a natural immunity to the made in Wuhan virus, and ensured that covid-zero would keep the country locked down for decades to come.

    The sudden removal of restrictions has already put immense pressure on China’s healthcare system, especially in Beijing, which was one of the centers of the outbreak prior to the policy’s abandonment and was thought to be one of the best prepared cities. The result has been another hoarding panic, with local reports indicating there has been a run on the pharmacy in the past few days resulting in “absolutely nothing” left.

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    Analysts have also warned over the economic and corporate costs – at least in the short term until natural immunity is built up  – of the virus itself as it sweeps the country, with Apple among those vulnerable to further supply chain issues.

    Under zero-Covid, citizens in China were required to test every few days at booths across major cities and then scan a code on their phones to enter buildings. Such practices have largely disappeared as cases multiplied rapidly, though as recently as late November individuals in Shanghai were still being taken to central quarantine because they were close contacts of positive cases at bars.

    While the market had been pricing in the end of covid zero at some time in late Q1 or early Q2, the accelerated end of China’s most defining policy of the post-Covid era has sent oil higher as traders start pricing in the massive commodity demand that will follow a full reopening of China in the days following China’s new year.

    And indeed, early on Tuesday, China’s Securities Times reported that according to Liu Yuanchun, president of the Shanghai University of Finance and Economic, China will take “extrordinary” measures to stimulate growth, including selling special sovereign bonds next year as part of efforts to boost economic growth,

    The economy “faces extraordinary pressure in 2023 and we need to take some extraordinary policies,” the newspaper quoted Liu as saying. He also said the government may raise its budget deficit to more than 3% of gross domestic product. Liu expects M2 growth to come in at around 11.5% next year, providing rather sufficient liquidity support for the economy, according to the report

    The government may also “moderately” reduce new tax breaks next year to ensure fiscal sustainability as it continues to increase spending, said Shi Zhengwen, director of the Center for Research in Fiscal and Tax Law at China University of Political Science and Law.

    In other words, after a brief derailing, the stimmy train is back on the tracks and making its first stop in China, and soon everywhere else.

    Tyler Durden
    Mon, 12/26/2022 – 19:32

  • Facebook Parent Settles Cambridge Analytica Data Harvesting Scandal For $725 Million
    Facebook Parent Settles Cambridge Analytica Data Harvesting Scandal For $725 Million

    Facebook parent Meta has agreed to settle a class-action lawsuit over the Cambridge Analytica data harvesting scandal for $725 million, or just under 2.5 days of revenue (based on Q3 figures).

    To recap – in 2014, Aleksandr Kogan of Cambridge University in the UK built a Facebook app that paid hundreds of thousands of users to take a psychological test. The app harvested not only the data of the test-taker, but the data of their Facebook friends as well. Kogan sold the resulting database of up to 50 million Americans to Cambridge Analytica, which provided analytical assistance to the 2016 presidential campaigns of Ted Cruz and Donald Trump.

    Facebook subsequently banned Cambridge Analytica, and in October 2019 agreed to pay the UK a £500,000 fine for exposing user data to a “serious risk of harm.”

    The $725 million settlement is the largest in a US data privacy class action, according to the BBC, citing attorneys.

    Meta said the settlement was “in the best interest of our community and shareholders,” adding “We look forward to continuing to build services people love and trust with privacy at the forefront.”

    As noted above, the settlement is “not that much” to the tech giant, author James Bell tells the BBC.

    “It’s less than a tenth of what it spent on its efforts to create ‘the metaverse’ last year alone,” he said, adding “So Meta probably won’t be too unhappy with this deal, but it does stand as a warning to social media companies that mistakes can prove very costly indeed.”

    The settlement is subject to approval by a federal judge in San Francisco.

    “This historic settlement will provide meaningful relief to the class in this complex and novel privacy case,” said lead lawyers Derek Loeser and Lesley Weaver, in a statement.

    The complaint was filed on behalf of a large proposed class of Facebook users, whose personal data on the social network was released to third parties without their consent.

    The class size is “in the range of 250-280 million” people, according to the ruling document, representing all Facebook users in the US during the “class period” which runs from 24 May, 2007 to 22 December, 2022.

    It is not clear how the plaintiffs would claim their share of the settlement. -BBC

    According to privacy and ethics researcher Janis Wong of the Alan Turing institute, the settlement would only amount to ‘two or three dollars’ per person if each affected individual submits a claim.

    Tyler Durden
    Mon, 12/26/2022 – 19:00

  • THE TWITTER FILES: How Twitter Rigged The Covid Debate
    THE TWITTER FILES: How Twitter Rigged The Covid Debate

    Another day, another TWITTER FILES drop exposing the incestuous relationship between big tech and government.

    Today’s edition, dropped by journalist David Zweig, focuses on ‘how Twitter rigged the Covid debate‘ by taking direction from both the Trump and Biden administrations (while at the same time trying to censor the former president). What’s somewhat notable is how aggressive government (and ex-government) officials were in trying to stifle free speech, while Twitter’s non-government-linked employees would often push back (and then totally fold) – a theme we’ve observed in previous drops. In one such instance, former head of Twitter’s Trust & Safety team Yoel Roth tells former FBI lawyer and then-Twitter Deputy General Counsel Jim Baker to calm his tits over a Trump tweet.

    Of course, in the end the government typically got its way, as you will read below.

    Zweig, who was granted access to internal files while on assignment for The Free Press, notes that “both the Trump and Biden administrations directly pressed Twitter executives to moderate the platform’s pandemic content according to their wishes.“

    What’s more, the censorship effort extended to Google, Facebook, Microsoft and others.

    https://platform.twitter.com/widgets.jsContinued via The Free Press (emphasis ours),

    In July 2021, then-U.S. Surgeon General Vivek Murthy released a 22-page advisory concerning what the World Health Organization referred to as an “infodemic,” and called on social media platforms to do more to shut down “misformation.”

    “We are asking them to step up,” Murthy said. “We can’t wait longer for them to take aggressive action.” 

    That’s the message the White House had already taken directly to Twitter executives in private channels. One of the Biden administration’s first meeting requests was about Covid, with a focus on “anti-vaxxer accounts,” according to a meeting summary by Lauren Culbertson, Twitter’s Head of U.S. Public Policy.

    They were especially concerned about Alex Berenson, a journalist skeptical of lockdowns and mRNA vaccines, who had hundreds of thousands of followers on the platform:

    By the summer of 2021, the day after Murthy’s memo, Biden announced publicly that social media companies were “killing people” by allowing misinformation about vaccines. Just hours later, Twitter locked Berenson out of his account, and then permanently suspended him the next month. Berenson sued Twitter. He ultimately settled with the company, and is now back on the platform. As part of the lawsuit, Twitter was compelled to provide certain internal communications. They revealed that the White House had directly met with Twitter employees and pressured them to take action on Berenson. 

    The summary of meetings by Culbertson, emailed to colleagues in December 2022, adds new evidence of the White House’s pressure campaign, and illustrates how it tried to directly influence what content was allowed on Twitter. 

    Culbertson wrote that the Biden team was “very angry” that Twitter had not been more aggressive in deplatforming multiple accounts. They wanted Twitter to do more.

    Twitter executives did not fully capitulate to the Biden team’s wishes. An extensive review of internal communications at the company revealed that employees often debated moderation cases in great detail, and with more care for free speech than was shown by the government. 

    But Twitter did suppress views—and not just those of journalists like Berenson. Many medical and public health professionals who expressed perspectives or even cited findings from accredited academic journals that conflicted with official positions were also targeted. As a result, legitimate findings and questions about our Covid policies and their consequences went missing.

    There were three serious problems with Twitter’s process.

    First: Much of the content moderation on Covid, to say nothing of other contentious subjects, was conducted by bots trained on machine learning and AI. I spent hours discussing the systems with an engineer and with an executive who had been at the company for more than a year before Musk’s takeover. They explained the process in basic terms: Initially, the bots were fed information to train them on what to look for—but their searches would become more refined over time both as they scanned the platform and as they were manually updated with additional chosen inputs. At least that was the premise. Though impressive in their engineering, the bots would prove too crude for such nuanced work. When you drag a digital trawler across a social media platform, you’re not just catching cheap fish, you’re going to snag dolphins along the way.

    Second: Contractors operating in places like the Philippines were also moderating content. They were given decision trees to aid in their process, but tasking non-experts to adjudicate tweets on complex topics like myocarditis and mask efficacy data was destined for a significant error rate. The notion that remote workers, sitting in distant cube farms, were going to police medical information to this granular degree is absurd on its face.

    Embedded below is an example template—deactivated after Musk’s arrival—of the decision tree tool that contractors used. The contractor would run through a series of questions, each with a drop down menu, ultimately guiding them to a predetermined conclusion.

    Third: Most importantly, the buck stopped with higher level employees at Twitter. They chose the inputs for the bots and decision trees. They determined suspensions. And as is the case with all people and institutions, there was both individual and collective bias. 

    At Twitter, Covid-related bias bent heavily toward establishment dogmas. Inevitably, dissident yet legitimate content was labeled as misinformation, and the accounts of doctors and others were suspended both for tweeting opinions and demonstrably true information.

    Take, for example, Martin Kulldorff, an epidemiologist at Harvard Medical School. Dr. Kulldorff often tweeted views at odds with U.S. public health authorities and the American left, the political affiliation of nearly the entire staff at Twitter. 

    Here is one such tweet, from March 15, 2021, regarding vaccination.

    Internal emails show an “intent to action” by a Twitter moderator, saying Kulldorff’s tweet violated the company’s Covid-19 misinformation policy, and claimed he shared “false information.”

    But Kulldorff’s statement was an expert’s opinion—one that happened to be in line with vaccine policies in numerous other countries. 

    Yet it was deemed “false information” by Twitter moderators merely because it differed from CDC guidelines. After Twitter took action, Kulldorff’s tweet was slapped with a “misleading” label and all replies and likes were shut off, throttling the tweet’s ability to be seen and shared by others, a core function of the platform.

    In my review of internal files, I found numerous instances of tweets about vaccines and pandemic policies labeled as “misleading” or taken down entirely, sometimes triggering account suspensions, simply because they veered from CDC guidance or differed from establishment views. 

    For example, a tweet by @KelleyKga, a self-proclaimed public health fact checker with more than 18,000 followers, was flagged as “misleading,” and replies and likes disabled, for showing that Covid was not the leading cause of death in children, even though it cited the CDC’s own data.

    Read the rest here…

    Tyler Durden
    Mon, 12/26/2022 – 18:44

  • FUD And Loathing In The Crypto Casino
    FUD And Loathing In The Crypto Casino

    Authored by Scott Hill via BombThrower.com,

    There is no fire at Binance yet, but the smoke is filling the building.

    Following the collapse of FTX all eyes have turned to the other opaque offshore exchanges, waiting and wondering which could be insolvent and about to detonate next. The similarities between FTX and Binance are numerous which is a major cause for concern. In the Crypto industry often where there’s smoke, there’s fire.

    Binance’s Similarities with FTX

    Both exchanges are located offshore, outside of the reach of major nation regulators. While FTX appears to have been cozy with the regulators in the Bahamas; Binance seems to have no fixed address, instead hopping between jurisdictions looking for friendly regulators along the way. This hasn’t been limited only to suspect jurisdictions like Dubai and Singapore, Binance most recently cozied up to regulators in France, gaining registration in the region as a home base for European operations.

    We have very little information in the corporate structure of Binance. What little we do know is that there appears to be a complex web of ownership and subsidiaries scattered across various jurisdictions.

    As Bloomberg put it in June: Binance “is based in who knows where and owned by god knows whom.”

    The similarity in the exchange tokens offered by each company is obvious. FTX famously offered their FTT token to give discounts to users on the front end. Behind the scenes the token allowed FTX and their associated hedge fund, Alameda Research, to functionally print their own collateral to take loans against and use to fund buyouts throughout the industry.

    Binance’s BNB token had similar origins, but has now moved on to become the ecosystem token for the fully fledged Ethereum competitor, Binance Smart Chain. There is no direct evidence that Binance has leveraged BNB in a similar way that FTX used FTT; but it’s not difficult to imagine some of the same balance sheet tricks have been used.

    We do know that Binance operates a large ecosystem incubator called Binance Launchpad. This program allows startups to access funding in exchange for launching their projects on Binance Smart Chain. Recently details have emerged indicating that in order to list tokens on Binance, projects would be required to post a sizeable insurance deposit with the exchange. These deposits would be denominated in BNB, adding additional demand for the token.

    Binance was the first money into FTX

    Back in 2019, when FTX was getting off the ground they took on Binance as their first strategic investor. The size of the Binance investment remains undisclosed but we do know that alongside this investment, Binance received a sizable allocation of FTT tokens.

    In July 2021, FTX suddenly bought out Binance’s stake, again for an undisclosed amount. What we didn’t know at the time was that despite raising $900M from fresh investors at the same time, FTX still funded a portion of the buyout using FTT tokens rather than fiat currency.

    Binance was building up a gigantic bag of FTT tokens.

    We all know what happened next, in November this year Binance CEO CZ announced that they would be divesting of their FTT tokens, crashing the market and shortly afterwards resulting in the bankruptcy of FTX.

    While this background is important, it doesn’t necessarily follow that Binance is also insolvent. The links between FTX and Binance are simply too deep to ignore. The similarities in strategy are too many to dismiss as merely a coincidence.

    It is entirely possible that Binance runs its business using exactly the same tricks as FTX but at a much larger scale.

    Have you got my money?

    Over the past several weeks, customers have decided to test the liquidity of Binance. After the collapse of FTX, Binance was one of the few exchanges that were seen as relatively trustworthy and saw inflows as users moved funds around. This all stopped recently when Binance published their “proof-of-reserves”.

    Binance tried to promote their proof-of reserves report as an audit. It was nothing of the sort.

    The report showed that Binance did indeed have some wallets with billions of dollars worth of Bitcoin in them. The report didn’t prove anything about non-Bitcoin assets and reserves. It didn’t prove how much the exchange owed to customers.

    The report didn’t even prove that Binance had control of the wallets.

    Industry figures immediately called Binance out. Kraken CEO Jesse Powell was particularly strong in his warning that the report proved basically nothing. The audit firm that conducted the report stopped working with Crypto firms shortly afterwards and deleted all of their publicly available Crypto reports, including the Binance reports.

    Does Binance have enough reserves? Probably, but customers weren’t waiting around to find out.

    In the week after the report was published, customers withdrew around $8B worth of assets. An additional $5B in assets flowed into the exchange, however some of these flows appeared to be emergency liquidity provided by other firms, used to service withdrawals. At one stage Binance halted withdrawals of USDC, claiming that they needed to wait for regular banking hours to top up their wallets.

    Just like FTX, customers were draining the funds out of Binance.

    Binance has largely serviced the withdrawals so far. That’s to be expected, it’s a gigantic entity and has a large amount of reserves. It might not have enough reserves to service withdrawals indefinitely, but for now the funds appear to be flowing.

    What’s different this time?

    Taking a closer look at the FTX run on deposits can give us some insight into how and why Binance might ultimately fail. The biggest difference between the two exchange runs is that the run on FTX began with a sell off in the exchange token, FTT. In contrast Binance’s BNB token has taken some punishment but the sell off has been nowhere near as extreme.

    If Binance is running the same shell game as FTX, they will be solvent until BNB drops in value.

    At FTX, the exchange token and various other Solana ecosystem tokens were the lifeblood of the exchange’s balance sheet. FTX and Alameda were holding FTT as a significant chunk of reserves, their internal financials were leveraged off FTT, and FTT was the major collateral held at external lenders.

    FTX only hit problems when that collateral value fell and lenders pulled their credit lines.

    According to Nansen, Binance holds around $54B in reserves. We don’t know what the liabilities attached to these assets are, but around $5.5B of these assets are BNB tokens. We know that Binance subsidizes margin loans for users using BNB as collateral. We know that 20% of BNB tokens are held off market and do not circulate (this is not uncommon for 2017-present era cryptos). We do not know how much of Binance’s business is based on leveraging BNB collateral. We have no idea whether Binance has an embedded market maker, like Alameda Research. We do know that Binance has cold wallets and reserves, while no one could ever find cold wallets for FTX.

    There isn’t an obvious problem with Binance so far, but if something is going to break over at Binance it will likely start with a rapid devaluation of BNB tokens, rather than a bank run.

    What happens next?

    Binance has already weathered a major run. BNB has drawn down by almost 30% since problems showed up at FTX in early November. The stress is palpable, but at the end of the day Binance is a juggernaut. It is the largest exchange by a long way. It has daily volumes an order of magnitude larger than all of its competitors bar Coinbase. We know there are reserves and the exchange has been servicing a huge amount of withdrawals with relatively small hiccups.

    I still don’t trust Binance. There is no reason to store your coins on Binance unless you are trading them.

    I fully expect that a gigantic amount of Binance’s business is leveraged off BNB being used as collateral, and that if the value of BNB drops too much it causes some major problems. But I don’t know for sure. In June, while the rest of the Crypto markets were blowing up BNB was defended strongly at $200. Make of that what you will.

    via call_me_cipher – published to TradingView Dec 17, 22

    Overall these problems at Binance feel a lot like previous waves of FUD surrounding Tether. The entire thing looks and seems dodgy, but over the last 5 years basically everyone who has been too enthusiastic and piled into shorts has been chewed up and spat out.

    The casino isn’t fair, but betting that the house will break is usually a losing bet.

    Stepping back, I don’t think that Binance will end up blowing up like FTX did. They don’t seem to be taking the same sorts of risk with their business operations. If there is an issue that ends up bringing down Binance it seems much more likely that a major regulatory crackdown does the just than just a run on deposits.

    There are plenty of angles that could get attacked by regulators. Binance operates a regulated Crypto on-ramp in a multitude of jurisdictions. They are allowed to accept bank deposits through these entities. Any major attempt to shut down Binance via these local on-ramps could have significant ripple effects throughout the rest of the Binance empire by constricting fresh deposits.

    For now, Binance looks the shakiest it has since 2018. They have giant reserves and regulatory obfuscation. They’ve also been playing this game for a long time and have grown the largest among competitors.

    That’s not a good excuse to leave your funds there. This is one you want to watch from the outside (Editor’s note: We’re so adamant you should be self-custodying your Bitcoin that we’ll even pay you to do it. )

    Eventually Binance could break, and I don’t want to wait to find out. For now, there is no fire. Only lots and lots of smoke.

    *  *  *

    Today’s post is from contributing analyst Scott Hill. To receive further updates of this series and our overall investment thesis for digital assets (even in this climate), subscribe to the Bombthrower mailing list.

    Tyler Durden
    Mon, 12/26/2022 – 18:30

  • Rogan Guest Goes Viral After Exposing "Subhuman" And "Appalling" Cobalt Mining Conditions In Congo
    Rogan Guest Goes Viral After Exposing “Subhuman” And “Appalling” Cobalt Mining Conditions In Congo

    There is one part to the “green” EV revolution that we have written about – but that no one else is talking about: the incessant need for cobalt and the “appalling” way that the battery metal is mined and produced.

    After a recent Joe Rogan podcast that went out to the viral host’s 40 million plus listeners, we’re hopeful that dialogue may finally start to take place.

    Siddharth Kara, who is a Harvard visiting professor and also the author of “Cobalt Red: How The Blood of The Congo Powers Our Lives” took to the podcast last week with comments about cobalt mining that already have more than a million listens.

    He told Rogan that there’s no such thing as “clean cobalt” and that the term was “all marketing,” according to a wrap up of the podcast by the NY Post. He noted that the level of suffering of Congolese people working in cobalt mines was “astounding”, the report says.

    “I’ve never seen [a cobalt mine that did not rely on child labor or slavery] and I’ve been to almost all the major industrial cobalt mines,” he told Rogan. 

    Yet, modern demand for cobalt doesn’t look like it’s going to slow down any time soon. “Cobalt is in every single lithium, rechargeable battery manufactured in the world today,” Kara said to Rogan. 

    “Every smartphone, every tablet, every laptop and crucially, every electric vehicle” needs it, he noted. “We can’t function on a day-to-day basis without cobalt, and three-fourths of the supply is coming out of the Congo. And it’s being mined in appalling, heart-wrenching, dangerous conditions.” 

    “By and large the world doesn’t know what’s happening,” he continued. “…it just so happened that the Congo is sitting on more cobalt than the rest of the planet combined.”

    “Before anyone knew what was happening, [the] Chinese government [and] Chinese mining companies took control of almost all the big mines and the local population has been displaced,” he told Rogan. 

    “They dig in absolutely subhuman, gut-wrenching conditions for a dollar a day, feeding cobalt up the supply chain into all the phones, all the tablets, and especially electric cars.” 

    Meanwhile the report notes that the Biden administration recently “entered into an agreement with the Democratic Republic of the Congo and Zambia” to help bolster the supply of such materials, despite these issues. 

    You can listen to the full comments here:

    Tyler Durden
    Mon, 12/26/2022 – 18:00

  • Netflix Customers Could Face Criminal Charges For Sharing Their Password
    Netflix Customers Could Face Criminal Charges For Sharing Their Password

    Authored by Bryan Jung via The Epoch Times,

    Netflix customers may soon face criminal charges for sharing their password next year.

    The popular streaming service is planning to put an end to password sharing beginning in early 2023, according to The Wall Street Journal.

    Netflix has been exploring ways to crack down on it for some time, and this is the first official notice that the changes will finally happen.

    The company claimed that out of the 222 million households around the world with valid subscriptions, there were at least “100 million additional households” using their services via password sharing.

    Households using Netflix through password sharing reportedly include more than 30 million households across the United States and Canada, Newsweek reported.

    Netflix offers shared accounts with separate profiles and multiple streams in its plans, but only people living under the same roof apply.

    The online media platform has been losing revenue for years to unauthorized password sharing, but it was willing to overlook the matter due to a surge in subscriptions over the past two years.

    However, revenue has been falling since the start of this year, as it faces its first drop in subscribers in a decade.

    The company has introduced fees for people sharing accounts not living in the same household in order to fight a decline in subscribers.

    Subscription sharing has also made it more difficult for the company to expand its service and productions into new markets, according to the company.

    The Netflix logo on top of their office building in Hollywood, Calif., on Jan. 20, 2022. (Robyn Beck/AFP via Getty Images)

    Netflix’s terms of service had never allowed for multi-household sharing, which has read that it is the responsibility of “the member who created the Netflix account and whose payment method is charged” for any activity that occurs through the account.

    “To maintain control over the account and to prevent anyone from accessing the account, the account owner should maintain control over the Netflix ready devices … and not reveal the password or details of the payment method associated with the account to anyone,” according to the terms.

    “We can terminate your account or place your account on hold in order to protect you, Netflix or our partners from identity theft or other fraudulent activity.”

    At one time, it considered offering pay-per-view content to discourage those with accounts from sharing their passwords, but company executives voted against that plan.

    Netflix Executives Enforce Sharing Rules Due to Revenue Shortfall

    Meanwhile, Reed Hastings, the Netflix co-CEO,  decided it was now the time to act on the password-sharing issue, which was neglected for too long.

    His co-CEO Ted Sarandos agreed and said that the streaming service would finally crack down on it.

    Viewers generally oppose price hikes, and the company needs to find a way to handle the sharing issue so people will “see the value” in the company, Sarandos told CNBC.

    “There are folks who are enjoying Netflix, literally for free today,” said Sarandos.

    “So, they’re getting a lot of value out of it. I think they’ll be happy to have their own account.”

    Netflix will slowly phase out password sharing over time rather than ending it immediately so to avoid alienating customers and will ask those who share accounts with others outside of their household to start paying in 2023.

    Users Will Be Tracked to Enforce Restrictions on Non-Subscribing Users

    Those who continue to share an account outside the primary subscriber’s immediate household will have to pay additional fees under the new rules.

    Netflix said it may possibly charge just below its $6.99 ad-supported plan for non-household users to boost revenue and wants those who are sharing passwords illegally to sign up for their own subscription.

    The streaming service also expects to introduce other ad-supported subscription plans over time.

    For example, Netflix’s current premium plan allows for Ultra HD 4K streaming and support for watching on four supported devices like iPhones, iPads, and Macs at one time, as long as those devices are owned by people in the same household but it does not allow multiple viewers watching outside of the same household.

    The company will consider tracking particular information, such as Device IDs, IP addresses, and account activity, to help identify whether viewers are part of the same household to enforce the new rules, reported The Dallas Morning News.

    The online video service had been testing add-on payments for password sharing in some Latin American countries, with an additional $3 fee.

    The trial program reportedly makes primary account holders provide a verification code to anyone outside their household in order to access their account and repeatedly asks for the code until a monthly fee is paid to add non-household subscribers.

    A similar method may be imposed on users in North America next year.

    Tyler Durden
    Mon, 12/26/2022 – 17:30

  • China Sends Record 71 Warplanes Near Taiwan In Show Of Force Aimed At US
    China Sends Record 71 Warplanes Near Taiwan In Show Of Force Aimed At US

    China has sent 71 warplanes and seven ships near Taiwan over a 24-hour period this weekend, which was intended as a clear warning signal in response to President Biden signing the 2023 National Defense Authorization Act, given it includes $10 billion in military grant assistance to Taiwan. 

    The majority of those warplanes are said to have crossed the median line of the Taiwan Strait, with the Taiwanese military counting 47 jets breaching the de facto boundary line. The threatening flights occurred between 6 a.m. Sunday and 6 a.m. Monday.

    A statement from the People’s Liberation Army’s  Eastern Theater Command included a rare direct reference to the United States and its deepening ties to Taipei. “This is a firm response to the current US-Taiwan escalation and provocation,” the Eastern Command statement said.

    Over the weekend, and while much of the West was celebrating the Christmas holiday, China’s Foreign Ministry elaborated its response to the NDAA passage, signed into law by President Biden Friday, just before the bulk of PLA aircraft buzzed the island, saying the new funding for more weapons for Taiwan “blatantly interferes in China’s internal affairs.”

    “This sends a gravely wrong signal to ​’​Taiwan independence​’​ separatist forces and severely affects peace and stability across the Taiwan Strait. Taiwan is China’s Taiwan. No external interference in China’s internal affairs will be tolerated​,” it said further.

    “The US needs to stop seeking to use Taiwan to contain China, stop fudging, distorting and hollowing out the one-China principle, and stop moving even further down the wrong and dangerous path​,” the foreign ministry continued.

    The latest sortie from the PLA included 18 J-16 fighter jets, 11 J-1 fighters, 6 Su-30 fighters and drones, according to Taiwan’s defense ministry, which typically scrambles its own fighters in response and uses coastal anti-air defense systems to monitor inbound activity.

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

    President Tsai Ing-wen in response vowed to bolster the island’s civil defense systems. “The more preparations we make, the less likely there will be rash attempts of aggression. The more united we are, the stronger and safer Taiwan would become,” Tsai ​said.​​

    On Friday the PLA military had sent 39 aircraft and three warships toward Taiwan. But Sunday into overnight Monday’s flights marked a record number of Chinese aircraft breaching Taiwan’s air defense identification zone over a single day period.

    Tyler Durden
    Mon, 12/26/2022 – 17:00

  • Russia Willing To Resume Gas Supplies To Europe Via Yamal Pipeline
    Russia Willing To Resume Gas Supplies To Europe Via Yamal Pipeline

    By Charles Kennedy of OilPrice.com

    Russia has said it’s willing to resume natural gas supplies to Europe through the Yamal-Europe Pipeline. The Yamal-Europe Pipeline usually flows westward but has been mostly reversed after Poland turned away from buying from Russia in favor of drawing on stored gas in Germany.

    “The European market remains relevant, as the gas shortage persists, and we have every opportunity to resume supplies. For example, the Yamal-Europe Pipeline, which was stopped for political reasons, remains unused” TASS has cited Russian Deputy Prime Minister Alexander Novak as saying. 

    Previously, state-owned gas producer Gazprom revealed that it expected to pump 43 million cubic meters of gas per day to Europe via Ukraine through Sudzha. Unfortunately, the pipeline blew up during planned maintenance work near the village of Kalinino, about 150 km (90 miles) west of the Volga city of Kazan. 

    To put the size of the pipeline in context, its run rate is a tiny portion of the 155 billion cubic meters of natural gas that Europe imported from Russia in 2021. Europe has managed to stockpile huge volumes of natural gas for the winter season, so much so that prices have tumbled sharply in recent months.

    Whereas supplies of Russian pipeline gas – the bulk of Europe’s gas imports before the Ukraine war – are down to a trickle, Europe has been hungrily scooping up Russian LNG in the meantime. The Wall Street Journal has reported that the bloc’s imports of Russian liquefied natural gas jumped by 41% Y/Y. Novak has revealed that in the 11 months of 2022, Russian LNG exports to Europe increased to 19.4 bcm, with the figure expected to hit 21 bcm by year-end.

    “Russian LNG has been the dark horse of the sanctions regime,” Maria Shagina, research fellow at the London-based International Institute for Strategic Studies, told WSJ. Importers of Russian LNG to Europe have argued that the shipments are not covered by current EU sanctions and that buying LNG from Russia and other suppliers has helped keep European energy prices in check.

    Tyler Durden
    Mon, 12/26/2022 – 16:30

  • Nio CEO Warns Of "Challenging" First Half To 2023 For The EV Maker
    Nio CEO Warns Of “Challenging” First Half To 2023 For The EV Maker

    Questions are already looming about the health of the auto market – and specifically the EV space – after it was announced just days ago that Tesla would be suspending operations at its key Shanghai plant for one day longer than expected this week.

    Now, it looks as though NIO is joining the party, with its CEO warning investors of a potentially rocky start to 2023 on the horizon. 

    Bloomberg reported on Sunday that Chief Executive Officer William Li said this week that the company could “face a challenging first half as a cut in government subsidies and the broader economic slowdown erode local demand in the world’s largest new-energy vehicle market”. 

    Li said that demand could be pulled forward to the end of 2022 as customers look to try and place vehicle orders before national subsidies run out. He made the comments in Hefei, Central China this week, also noting that that the residual effects of the pandemic continue to mire the company. 

    “It will also take time for both the supply chain and consumer confidence to recover from the pandemic,” he said.

    Though Li says he expects a “full recovery” by May or June, we’re not so sure. The industry looks bleak. For example, Tesla also announced last week it would be halting production for slightly longer than expected at its Shanghai plant this month.

    Additionally, just days ago we published commentary from an auto industry insider who said that a “massive wave” of car repossessions and loans defaults would soon be on the horizon in the United States. 

    As we noted in early December, for almost a year now, we have been dutifully tracking several key datasets within the auto sector to find the critical inflection point in this perhaps most leading of economic indicators which will presage not only a crushing auto loan crisis, but also signal the arrival of a full-blown recession, one which even the NBER won’t be able to ignore, as the US consumers are once again tapped out. We believe that moment has now arrived.

    But first, for those readers who are unfamiliar with the space, we urge you to read some of our recent articles on the topic of car prices – which alongside housing, has been the biggest driver of inflation in the past 18 months – and more specifically how these are funded by the US middle class, i.e., car loans, and last but not least, the interest rate paid for said loans. Here are a few places to start:

    Tyler Durden
    Mon, 12/26/2022 – 16:05

  • The Rise And Fall Of The Great Powers – 35 Years Later
    The Rise And Fall Of The Great Powers – 35 Years Later

    Authored by Francis Sempa va RealClearDefense.com,

    Thirty-five years ago, Yale historian Paul Kennedy’s The Rise and Fall of the Great Powers was released to widespread acclaim.

    It was (and is) riveting history, explaining the interaction of economics, geopolitics, and social momentum in international relations since the 16th century. One of the main themes of Kennedy’s history was the concept of imperial overstretch – that the relative decline of great powers often resulted from an imbalance between a nation’s resources and commitments. And Kennedy opined that the United States needed to worry about its own imperial overstretch.

    Kennedy summarized his historical findings with a passage that has great relevance to 21st century global politics:

    [I]t has been a common dilemma facing previous “number one” countries that even as their economic strength is ebbing, the growing foreign challenges to their position have compelled them to allocate more and more of their resources into the military sector, which in turn squeezes our productive investment and, over time, leads to the downward spiral of slower growth, heavier taxes, deepening domestic splits overspending priorities, and a weakening capacity to bear the burdens of defense.

    The timing of Kennedy’s book was bad. It appeared in 1987, yet two years later the United States won its long Cold War victory over the Soviet Union.

    How could the U.S. be in decline when it just won an historic victory in what President John F. Kennedy called the “long twilight struggle?” But Paul Kennedy’s history was sound. Great power decline, as Kennedy showed in his survey of five centuries of international politics, usually takes a long time – often centuries. And “decline” in international politics is a relative term – a great power declines usually in relation to other powers. Decline does not mean collapse – though that sometimes happened–but it does signal a shift in the global balance of power.

    And great power statesmen rarely appreciate that decline. President George H. W. Bush declared a “new world order” after the fall of the Soviet empire. His son, President George W. Bush, after the September 11, 2001, attacks made it U.S. policy to spread democracy throughout the world. He launched the Global War on Terror and the United States fought two long wars that in the end accomplished very little. In the meantime, China was rising economically and militarily, and soon would begin to flex its geopolitical muscles in the western Pacific and across Eurasia.

    Kennedy’s book took the long view of history. Unipolar moments–a term coined by Charles Krauthammer–are just that: brief moments in history that do not erase long term trends. It is arguable that America’s decline began when President Woodrow Wilson and congress made the United States a belligerent in the First World War. Wilson and his “progressive” cohorts started the U.S. on the path to globalism, which after a brief interlude in the 1920s, was continued under Franklin Roosevelt’s administration which attracted “progressives” by the thousands to Washington, D.C., and government service. “Progressives” think they can use national power to make the world a perfect place. James Burnham brilliantly captured the progressive approach when he noted that progressives like Eleanor Roosevelt treat the world as their slum.

    Our victory in World War II disguised that decline – it was another unipolar moment where the United States’ power appeared unchallenged relative to other great powers. The Truman administration took imperial overstretch to new limits. As Walter Lippmann and later George Kennan pointed out, the Truman Doctrine was a globalist’s delight, and its global reach required the institutionalization of the national security state–what President Eisenhower later called the “military-industrial complex.” Eisenhower knew all about the military-industrial complex – he had been a part of it since the beginning of the Cold War and observed its growth and growing influence during his presidency.

    It was Richard Nixon and his top foreign policy aide Henry Kissinger who recognized the existence of long-term relative decline that Paul Kennedy later wrote about in The Rise and Fall of the Great Powers. Nixon and Kissinger understood history and the realities of international politics in Toynbeean terms. That is why they simultaneously pursued the opening to China and detente with the Soviet Union. Eurasia had to remain geopolitically pluralistic for the United States to be secure. Korea and Vietnam were symptoms of decline – wars that perhaps we should not have fought, or that we should not have had to fight, and that we refused to win, but that fed the beast of the military-industrial complex. And the roots of those wars also extended back to the Truman administration’s catastrophic “loss of China.”

    Some observers in 1949 – including Eisenhower, General Douglas MacArthur, and then-congressman Richard Nixon – recognized how disastrous the communist victory in China was to future American security. Taking the long view of history, our “tie” in Korea and loss in Vietnam pale in significance to the loss of China because China’s rise in the 21st century may end up being the proximate cause of America’s relative decline.

    Toward the end of The Rise and Fall of the Great Powers, Kennedy expressed the then-controversial belief that great power wars were not a thing of the past. “Those who assume that mankind would not be so foolish as to become involved in another ruinously expensive Great Power war perhaps need reminding that that belief was also widely held for much of the nineteenth century.” For three decades after the fall of the Soviet Union, the United States thought and acted as if great power wars were behind us. It took the Trump administration’s national security strategists – especially Elbridge Colby – to redirect our national defense strategy toward great power competition. Our sleepwalk through history ended with the simultaneous challenges of China and Russia. Paul Kennedy’s great book deserves to be remembered as a warning that the “end of history” is a dream.

    Tyler Durden
    Mon, 12/26/2022 – 15:40

  • Bah Humbug
    Bah Humbug

    By Peter Tchir of Academy Securities

    There hasn’t been much of a “Santa” rally this year unless you consider a 0.2% drop (in a volatile week) on the S&P 500 a good thing. I would not call that a rally, especially with the Nasdaq down almost 2% on the week and the 10-year Treasury finishing 25 bps higher at 3.75%.

    The 10-year move made sense because a sub 3.5% yield seemed aggressive (even for someone as pessimistic on the economy and the inflation story as me). We also had the BOJ surprise everyone by allowing their bonds to move to higher yields. That is generally a good thing as I prefer “free-er” markets rather than those controlled by central banks. It caused global yields to pop higher, though Japan (with barely any inflation) shouldn’t directly cause this to spread. The risk is that yen denominated bond buyers, who have been buying dollar (and presumably euro) bonds and hedging the FX risk, could go on a bigger “buyer strike” than they’ve already been on. Alternatively, they could start selling foreign bonds when their FX hedges roll off since they can now achieve a modicum of yield directly in JGBs further out on the curve (this would be an even worse outcome). That is a risk I’m watching out for and think that while it will pressure yields, it is unlikely to be the key driver.

    For the stock market (which seemed to oscillate back and forth) there were three main stories:

    • There were numerous stories about JHEQX (a large mutual fund) having to roll over a large options trade into year-end (which is part of their strategy). The “vol killer,” according to Bloomberg on December 20th, “pegged” the S&P 500 to the 3,835 level (it closed at 3,844). It would be nice to see a quiet week going into year-end so we can have the only quiet week of 2022! Seriously, it is difficult to remember any week that didn’t have high volatility this year.
    • The question of whether “good news” is “good” or “bad” seems to have been answered last week: “It depends.” It seemed exceptionally hard to tease a consistent narrative out of stocks last week, but we can blame it on “thin liquidity” rather than “not paying enough attention.”
    • Tesla has lost almost $600 billion in market cap since mid-September and lost about $225 billion since the start of December. I don’t follow single stocks as a rule, but this move has caused a lot of chatter (mainly on Twitter) and weighed on broader markets (the Nasdaq 100 was down 8.7% on the month versus a 4% decline for the Dow).

    So, as we head into the last week of the year, I will try to end this abbreviated T-Report with a bright spot (which goes against my cynical nature). Maybe with Ukraine still grabbing headlines and impacting energy markets and Europe, we will get a “Saint Nicholas” rally into January 7th as opposed to the traditional “Santa” rally.

    I still expect that inflation will show signs of dropping (possibly off a cliff if you annualize recent data rather than looking at annual data). For more of our thoughts on this, please see Q1 Deflation, 2 + 2 = 5, The Rise and Fall of Inflation Factors, and Why We’d Be Lucky To Get a “Squishy” Landing). I still think that this all ends with a big “risk-off” trade (lower yields and new lows for stocks), but I’m trying to be jolly and hoping for one more good rally in which to sell stocks (I like bonds here)!

    In case you missed it last week (and have some time today):

    Even if markets aren’t spreading that holiday cheer, I hope that you and your families are enjoying this time to the fullest.

    Tyler Durden
    Mon, 12/26/2022 – 15:15

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