- Why The Capitol Riot Terrified The Elites
Why The Capitol Riot Terrified The Elites
Authored by James Ketler via The Mises Institute,
These days, it sure looks like they have them right where they want them. Using the storming of the Capitol Building as a pretext, the media-government alliance has targeted Trump, his supporters, and their fellow travelers harder than ever before. Many on the right consider the January 6 storming to have been a dream come true for the leftist elite—giving them the ability to impeach Trump again, deplatform right-wingers, and weaponize the Justice Department against the establishment’s foes. Everything, though, may not be as it first seems. There’s no reason to be despondent or worry that the Left has sealed its ultimate victory—it has done no such thing. Rather, the storming, for what it’s worth, proved the power of ragtag populists and exposed the elite’s shaky foundations. There’s a reason they’re so terrified.
What Happened?
In political discourse, narratives are everything, so – quite predictably – there’s heated dispute over what actually happened on January 6. One pressing question is: How did the stormers manage to actually break into the Capitol—one of the most heavily guarded buildings in the world? Cell phones and social media allowed civilian attendants to document the day’s events, which has made some details clearer and others a bit murkier. From freelance journalist Marcus DiPaola, one particularly bizarre video emerged which appeared to show Capitol Police willingly removing barricades to allow rioters inside the building complex.
In response to that footage, many leftists contend that the storming was an attempted “coup” and “inside job” planned by Republican politicians and Capitol Hill officials to reinstall Trump for a second term. Of course, that’s nothing more than baseless media drivel. Had it been an actual coup, the storming would have been far bloodier and better orchestrated, with rogue military units and politicians leading the charge—but nothing like that happened.
On the other hand, after seeing the questionable footage, many right-wingers have alleged that the event was a “false flag” arranged by Antifa provocateurs to defame Trump and his supporters. To the credit of this theory, at least one far-left activist was arrested in connection with the storming. However, it’s not clear that Antifa had any role in drumming up the crowd’s furor; certainly, the antielitist spirit was strong enough on its own.
Strange as the video was, there’s a third potential explanation, expounded by PolitiFact: “Many officers had to abandon their posts and barricades because they were far outnumbered and overwhelmed.” Marcus DiPaola, who shot the footage, floated the same explanation, as did former Capitol Police chief Terrance Gainer. The police’s limited manpower was no match for the immensity of the Trumpian mob, leaving the officers in fear for their own safety and their posts strategically indefensible. A panoply of additional on-the-ground footage reveals the brutish tactics many of the rioters used to gain access to the building. They openly ripped away barricades, scaled walls, broke windows and doors—and once inside, used their collective force to push back the officers who tried to “hold the line.” If nothing else, this shows, in physical terms, how frustrated the populist right has become with the federal establishment.
As is true of most mass spontaneous action, the stormers seem to have had different reasons for doing what they did. Some may have hoped to interrupt the Senate’s session and pressure lawmakers into blocking some of Biden’s electoral votes. Others likely stormed the building as an act of antiestablishment desecration, whipped up by the rage of other rioters. Apparently, there was also a small group of extremists who called for Mike Pence’s execution, according to reports. Indeed, the stormers were a far-from-perfect lot, but—aside from a couple crazies here and there—they were driven by an opposition to the federal establishment shared by millions of Americans.
The People Hold the Power
After five years of shameless anti-Trump witch hunts, culminating in an election fraught with vote irregularities, the events of January 6 should be little surprise. When legal, political methods of seeking redress from the state become unresponsive, there is no longer any choice but to seek extralegal, nonpolitical methods. Trump himself understands this. In one of his final tweets before being suspended, he wrote: “These are the things and events that happen when a sacred landslide election victory is so unceremoniously & viciously stripped away from great patriots who have been badly & unfairly treated for so long.” These tensions, in fact, existed long before the Trump era. Disheartened by decades of increasing federal abuse, these people stood up in an anti-Swamp rebellion aiming to “take back the people’s house.”
This reflects an immutable principle of government outlined by the sixteenth-century French libertarian Étienne de La Boétie: “[T]he inhabitants themselves … permit, or, rather, bring about, their own subjection, since by ceasing to submit they would put an end to their servitude.” It may appear that the state holds power over the people, but in reality the converse is true; it is the people en bloc who—by choosing to obey or not obey—hold ultimate power over the state. The only way a state can enforce its laws at all is if the people overall acquiesce to it. If sufficiently widespread, political resistance would disrupt the status quo to such a degree as to render its function completely ineffectual. In the final analysis, it is the people who hold the power.
A Catalyst for More Resistance
After stirring up a great deal of chaos, the Capitol stormers were flushed out of the building over the course of a few hours and the riots outside were broken up. Early the next morning, Congress certified the electoral vote count for Joe Biden, and the following weeks were flooded by the prosecution of more than two hundred stormers. Does that mean that their resistance failed? In the short term, yes; in the long term, maybe not. As Murray Rothbard said about the French “May 68” protests: “Whether it fizzles … or triumphs, … it gives the lie, once and for all, to the widespread myth that revolutions, whether or not desirable, are simply impossible in the modern, complex, highly technological world.” By storming the Capitol, the rioters proved that successful resistance against the American Leviathan is indeed still possible.
Clearly, the right-populists have both the numbers and willpower necessary to significantly disrupt the federal order, and their zeal is unlikely to dissipate any time soon. Therefore, the question of another revolt is not one of if, but of where and when. This reality was clear right after the storming occurred. In anticipation of riots during President Biden’s inauguration, twenty-six thousand army and Air National Guard troops were deployed to Washington, DC, and razor-wire fencing was set up around the Capitol Building. The day passed by without any incident, yet thousands of national guardsmen are still set to remain in DC through mid-March (or longer) and the acting chief of the Capitol Police has called for the fencing to stay up permanently.
As Rothbard observed in volume I of Conceived in Liberty, political resistance is not effect neutral, but actually has an augmentative effect on the actions of other partisans: “If cherished in later tradition, a revolution will decrease the awe in which the constituted authority is held by the populace, and in that way will increase the chance of a later revolt against tyranny.” That is to say that even a foiled resistance plot can help attract more people to the fold of dissent if the rebels have some cultural sway. Plans to pack the Supreme Court, unleash restrictive gun control, and prosecute right-wingers—rather than signifying the elite’s final triumph—may serve to further rally the populist dissenters.
Hitting the State Where It Hurts
When the rioters began their push to breach the Capitol Building, lawmakers were forced to shelter in place, before then evacuating to a secure location. For some of them, the day’s events were evidently traumatic. That can be seen in the hyperbolic language that’s been used to describe the storming, like Chuck Schumer likening it to Pearl Harbor.
The stormers crossed the threshold of the establishment’s cushy elitism and exposed lawmakers to the real-world ire their actions create. As described in a passage from Cato’s Letters, “The only secret … in forming a free government is to make the interests of the governors and of the governed the same.” Angry populists, who’ve watched federal decrees wreak havoc on their lives, turned around and gave lawmakers a taste of their own medicine.
In the wake of this, the media-government alliance has clamped down against the populist right harder than ever before.
Yet, in this vicious pushback, one can sense a prescient hint of panic within establishment ranks that the threads of their dominance may finally be unraveling. Far from playing a domineering role, the establishment politicos find themselves on the defensive in a politically unstable position.
Someday—whether it be in one week or thirty years—the US could face a serious period of mass antiestablishment demonstrations; if that day comes, it’ll signal the Washington elite’s ultimate failure.
With no cards left to play, they may be forced to tread lightly on the right-wing populists and avoid violent confrontation as much as possible, for fear of repercussions like those of January 6. This may force their hand into granting the Right some concessions—perhaps some very big ones, like a return to more states’ rights or, better yet, the right of unilateral secession. This would short-circuit the federal order and help restore to America’s overtaxed and overburdened some of their long-withheld freedoms. With everything in view, it looks like the journey down this path may have already begun.
Tyler Durden
Sat, 02/27/2021 – 23:30 - How Global Health And Wealth Has Changed Over Two Centuries
How Global Health And Wealth Has Changed Over Two Centuries
At the dawn of the 19th century, global life expectancy was only 28.5 years.
Outbreaks, war, and famine would still kill millions of people at regular intervals. These issues are still stubbornly present in 21st century society, but, as Visual Capitalist’s Nick Routley notes, broadly speaking, the situation around the world has vastly improved. Today, most of humanity lives in countries where the life expectancy is above the typical retirement age of 65.
At the same time, while inequality remains a hot button topic within countries, income disparity between countries is slowing beginning to narrow.
This animated visualization, created by James Eagle, tracks the evolution of health and wealth factors in countries around the world. For further exploration, Gapminder also has a fantastic interactive chart that showcases the same dataset.
The Journey to the Upper-Right Quadrant
In general terms, history has seen health practices improve and countries become increasingly wealthy–trends that are reflected in this visualization. In fact, most countries drift towards the upper-right quadrant over the 221 years covered in the dataset.
However, that path to the top-right, which indicates high levels of both life expectancy and GDP per capita, is rarely a linear journey. Here are some of the noteworthy events and milestones to watch out for while viewing the animation.
1880s: Breaking the 50-Year Barrier
In the late 19th century, Nordic countries such as Sweden and Norway already found themselves past the 50-year life expectancy mark. This was a significant milestone considering the global life expectancy was a full 20 years shorter at the time. It wasn’t until the year 1960 that the global life expectancy would catch up.1918: The Spanish Flu and WWI
At times, a confluence of factors can impact health and wealth in countries and regions. In this case, World War I coincided with one of the deadliest pandemics in history, leading to global implications. In the animation, this is abundantly clear as the entire cluster of circles takes a nose dive for a short period of time.1933, 1960: Communist Famines
At various points in history, human decisions can have catastrophic consequences. This was the case in the Soviet Union (1933) and the People’s Republic of China (1960), where life expectancy plummeted during famines that killed millions of people. These extreme events are easy to spot in the animation due to the large populations of the countries in question.1960s: Oil Economies Kick into High Gear
During this time, Iran, Iraq, and Saudi Arabia all experience massive booms in wealth, and in the following decade, smaller countries such as the United Arab Emirates and Kuwait rocket to the right edge of the visualization.In following decades, both Iran and Iraq can be seen experiencing wild fluctuations in both health and wealth as regime changes and conflict begin to destabilize the region.
1990s: AIDS in Africa
In the animation, a number of countries plummet in unison at the end of the 20th century. These are sub-Saharan African countries that were hit hard by the AIDS pandemic. At its peak in the early ’00s, the disease accounted for more than half of deaths in some countries.1995: Breaking the 65-Year Barrier
Global life expectancy reaches retirement age. At this point in time, there is a clear divide in both health and wealth between African and South Asian countries and the rest of the world. Thankfully, that gap is would continue to narrow in coming years.1990-2000s: China’s Economic Rise
With a population well over a billion people, it’s impossible to ignore China in any global overview. Starting from the early ’90s, China begins its march from the left to right side of the chart, highlighting the unprecedented economic growth it experienced during that time.What the Future Holds
If current trends continue, global life expectancy is expected to surpass the 80-year mark by 2100. And, sub-Saharan Africa, which has the lowest life expectancy today, is expected to mostly close the gap, reaching 75 years of age.
Wealth is also expected to increase nearly across the board, with the biggest gains coming from places like Vietnam, Nigeria, and the Philippines. Some experts are projecting the world economy as a whole to double in size by 2050.
There are always bumps along the way, but it appears that the journey to the upper-right quadrant is still very much underway.
Tyler Durden
Sat, 02/27/2021 – 23:00 - Escobar: Putin, Crusaders, & Barbarians
Escobar: Putin, Crusaders, & Barbarians
Authored by Pepe Escobar via The Asia Times,
Moscow is painfully aware that the US/NATO “strategy” of containment of Russia is already reaching fever pitch. Again.
This past Wednesday, at a very important meeting with the Federal Security Service board, President Putin laid it all out in stark terms:
We are up against the so-called policy of containing Russia. This is not about competition, which is a natural thing for international relations. This is about a consistent and quite aggressive policy aimed at disrupting our development, slowing it down, creating problems along the outer perimeter, triggering domestic instability, undermining the values that unite Russian society, and ultimately to weaken Russia and put it under external control, just the way we are witnessing it transpire in some countries in the post-Soviet space.
Russian President Vladimir Putin during a meeting of the Federal Security Service Board in Moscow on February 24. Photo: AFP / Alexei Druzhinin / Sputnik
Not without a touch of wickedness, Putin added this was no exaggeration: “In fact, you don’t need to be convinced of this as you yourselves know it perfectly well, perhaps even better than anybody else.”
The Kremlin is very much aware “containment” of Russia focuses on its perimeter: Ukraine, Georgia and Central Asia. And the ultimate target remains regime change.
Putin’s remarks may also be interpreted as an indirect answer to a section of President Biden’s speech at the Munich Security Conference.
According to Biden’s scriptwriters,
Putin seeks to weaken the European project and the NATO alliance because it is much easier for the Kremlin to intimidate individual countries than to negotiate with the united transatlantic community … The Russian authorities want others to think that our system is just as corrupt or even more corrupt.
US President Joe Biden speaks virtually from the East Room of the White House in Washington, DC, to the Munich Security Conference in Germany on February 19. Photo: AFP / Mandel Ngan
A clumsy, direct personal attack against the head of state of a major nuclear power does not exactly qualify as sophisticated diplomacy. At least it glaringly shows how trust between Washington and Moscow is now reduced to less than zero. As much as Biden’s Deep State handlers refuse to see Putin as a worthy negotiating partner, the Kremlin and the Ministry of Foreign Affairs have already dismissed Washington as “non-agreement capable.”
Once again, this is all about sovereignty. The “unfriendly attitude towards Russia,” as Putin defined it, extends to “other independent, sovereign centers of global development.” Read it as mainly China and Iran. All these three sovereign states happen to be categorized as top “threats” by the US National Security Strategy.
Yet Russia is the real nightmare for the Exceptionalists: Orthodox Christian, thus appealing to swaths of the West; consolidated as major Eurasian power; a military, hypersonic superpower; and boasting unrivaled diplomatic skills, appreciated all across the Global South.
In contrast, there’s not much left for the deep state except endlessly demonizing both Russia and China to justify a Western military build-up, the “logic” inbuilt in a new strategic concept named NATO 2030: United for a New Era.
The experts behind the concept hailed it as an “implicit” response to French President Emmanuel Macron’s declaring NATO “brain dead.”
Well, at least the concept proves Macron was right.
Those barbarians from the East
Crucial questions about sovereignty and Russian identity have been a recurrent theme in Moscow these past few weeks. And that brings us to February 17, when Putin met with Duma political leaders, from the Communist Party’s Vladimir Zhirinovsky – enjoying a new popularity surge – to United Russia’s Sergei Mironov, as well as State Duma speaker Vyacheslav Volodin.
Putin stressed the “multi-ethnic and multi-religious” character of Russia, now in “a different environment that is free of ideology”:
It is important for all ethnic groups, even the smallest ones, to know that this is their Motherland with no other for them, that they are protected here and are prepared to lay down their lives in order to protect this country. This is in the interests of us all, regardless of ethnicity, including the Russian people.
Yet Putin’s most extraordinary remark had to do with ancient Russian history:
Barbarians came from the East and destroyed the Christian Orthodox empire. But before the barbarians from the East, as you well know, the crusaders came from the West and weakened this Orthodox Christian empire, and only then were the last blows dealt, and it was conquered. This is what happened … We must remember these historical events and never forget them.
Well, this could be enough material to generate a 1,000-page treatise. Instead, let’s try, at least, to – concisely – unpack it.
The Great Eurasian Steppe – one of the largest geographical formations on the planet – stretches from the lower Danube all the way to the Yellow River. The running joke across Eurasia is that “Keep Walking” can be performed back to back. For most of recorded history this has been Nomad Central: tribe upon tribe raiding at the margins, or sometimes at the hubs of the heartland: China, Iran, the Mediterranean.
The Scythians (see, for instance, the magisterial The Scythians: Nomad Warriors of the Steppe, by Barry Cunliffe) arrived at the Pontic steppe from beyond the Volga. After the Scythians, it was the turn of the Sarmatians to show up in South Russia.
From the 4th century onward, nomad Eurasia was a vortex of marauding tribes, featuring, among others, the Huns in the 4th and 5th centuries, the Khazars in the 7th century, the Kumans in the 11th century, all the way to the Mongol avalanche in the 13th century.
The plot line always pitted nomads against peasants. Nomads ruled – and exacted tribute. G Vernadsky, in his invaluable Ancient Russia, shows how “the Scythian Empire may be described sociologically as a domination of the nomadic horde over neighboring tribes of agriculturists.”
As part of my multi-pronged research on nomad empires for a future volume, I call them Badass Barbarians on Horseback. The stars of the show include, in Europe, in chronological order, Cimmerians, Scythians, Sarmatians, Huns, Khazars, Hungarians, Peshenegs, Seljuks, Mongols and their Tatar descendants; and, in Asia, Hu, Xiongnu, Hephtalites, Turks, Uighurs, Tibetans, Kirghiz, Khitan, Mongols, Turks (again), Uzbeks and Manchu.
Arguably, since the hegemonic Scythian era (the first protagonists of the Silk Road), most of the peasants in southern and central Russia were Slav. But there were major differences. The Slavs west of Kiev were under the influence of Germania and Rome. East of Kiev, they were influenced by Persian civilization.
It’s always important to remember that the Vikings were still nomads when they became rulers in Slav lands. Their civilization in fact prevailed over sedentary peasants – even as they absorbed many of their customs.
Interestingly enough, the gap between steppe nomads and agriculture in proto-Russia was not as steep as between intensive agriculture in China and the interlocked steppe economy in Mongolia.
(For an engaging Marxist interpretation of nomadism, see A N Khazanov’s Nomads and the Outside World).
The sheltering sky
What about power? For Turk and Mongol nomads, who came centuries after the Scythians, power emanated from the sky. The Khan ruled by authority of the “Eternal Sky” – as we all see when we delve into the adventures of Genghis and Kublai. By implication, as there is only one sky, the Khan would have to exert universal power. Welcome to the idea of universal empire.
Kublai Khan as the first Yuan emperor, Shizu. Yuan dynasty (1271–1368). Album leaf, ink and color on silk. National Palace Museum, Taipei. Photo: Wikimedia Commons/National Palace Museum, Taipei
In Persia, things were slightly more complex. The Persian Empire was all about Sun worship: that became the conceptual basis for the divine right of the King of Kings. The implications were immense, as the King now became sacred. This model influenced Byzantium – which, after all, was always interacting with Persia.
Christianity made the Kingdom of Heaven more important than ruling over the temporal domain. Still, the idea of Universal Empire persisted, incarnated in the concept of Pantocrator: it was the Christ who ultimately ruled, and his deputy on earth was the Emperor. But Byzantium remained a very special case: the Emperor could never be an equal to God. After all, he was human.
Putin is certainly very much aware that the Russian case is extremely complex. Russia essentially is on the margins of three civilizations. It’s part of Europe – reasons including everything from the ethnic origin of Slavs to achievements in history, music and literature.
Russia is also part of Byzantium from a religious and artistic angle (but not part of the subsequent Ottoman empire, with which it was in military competition). And Russia was influenced by Islam coming from Persia.
Then there’s the crucial influence of nomads. A serious case can be made that they have been neglected by scholars. The Mongol rule for a century and a half, of course, is part of the official historiography – but perhaps not given its due importance. And the nomads in southern and central Russia two millennia ago were never properly acknowledged.
So Putin may have hit a nerve. What he said points to the idealization of a later period of Russian history from the late 9th to early 13th century: Kievan Rus. In Russia, 19th century Romanticism and 20th century nationalism actively built an idealized national identity.
The interpretation of Kievan Rus poses tremendous problems – that’s something I eagerly discussed in St. Petersburg a few years ago. There are rare literary sources – and they concentrate mostly on the 12th century afterwards. The earlier sources are foreigners, mostly Persians and Arabs.
Russian conversion to Christianity and its concomitant superb architecture have been interpreted as evidence of a high cultural standard. In a nutshell, scholars ended up using Western Europe as the model for the reconstruction of Kievan Rus civilization.
It was never so simple. A good example is the discrepancy between Novgorod and Kiev. Novgorod was closer to the Baltic than the Black Sea, and had closer interaction with Scandinavia and the Hanseatic towns. Compare it with Kiev, which was closer to steppe nomads and Byzantium – not to mention Islam.
Kievan Rus was a fascinating crossover. Nomadic tribal traditions – on administration, taxes, the justice system – were prevalent. But on religion, they imitated Byzantium. It’s also relevant that until the end of the 12th century, assorted steppe nomads were a constant “threat” to southeast Kievan Rus.
So as much as Byzantium – and, later on, even the Ottoman Empire – supplied models for Russian institutions, the fact is the nomads, starting with the Scythians, influenced the economy, the social system and most of all, the military approach.
Watch the Khan
Sima Qian, the master Chinese historian, has shown how the Khan had two “kings,” who each had two generals, and thus in succession, all the way to commanders of a hundred, a thousand and ten thousand men. This is essentially the same system used for a millennia and a half by nomads, from the Scythians to the Mongols, all the way to Tamerlane’s army at the end of the 14th century.
The Mongol invasions – 1221 and then 1239-1243 – were indeed the major game-changer. As master analyst Sergei Karaganov told me in his office in late 2018, they influenced Russian society for centuries afterwards.
For over 200 years Russian princes had to visit the Mongol headquarters in the Volga to pay tribute. One scholarly strand has qualified it as “barbarization”; that seems to be Putin’s view. According to that strand, the incorporation of Mongol values may have “reversed” Russian society to what it was before the first drive to adopt Christianity.
The inescapable conclusion is that when Muscovy emerged in the late 15th century as the dominant power in Russia, it was essentially the successor of the Mongols.
And because of that the peasantry – the sedentary population – were not touched by “civilization” (time to re-read Tolstoy?). Nomad Power and values, as strong as they were, survived Mongol rule for centuries.
Well, if a moral can be derived from our short parable, it’s not exactly a good idea for “civilized” NATO to pick a fight with the – lateral – heirs of the Great Khan.
Tyler Durden
Sat, 02/27/2021 – 22:30 - A Whopping 91% Of US Restaurants Will Invest In Kitchen Automation, Says Survey
A Whopping 91% Of US Restaurants Will Invest In Kitchen Automation, Says Survey
The virus pandemic did not change the trajectory of where the restaurant industry was headed, but it did force years of change in a short period. Restaurants are embracing artificial intelligence and automation to revolutionize their business models.
A new report via payments company Square titled “Future of Restaurants” discusses an overview of how technology is sweeping through the industry. Square partnered with Wakefield Research to survey 500 restaurant owners and managers across the country.
They found an overwhelming number of owners and managers are pivoting towards automation in the kitchen and embracing the hub-and-spoke model.
About 91% of respondents said they have made or planning to make investments in kitchen automation technology.
So what’s the rush to digitize the backend of a restaurant?
Well, as explained by Bruce Bell, Head of Square for Restaurants, he said:
“We’re seeing more of a hub-and-spoke model with the kitchen at the center of it all. Restaurants embrace new channels for customers to interact with their business, effectively meeting them wherever they are. Each of these channels represents a revenue stream for the restaurant, and they connect to the same kitchen and are all managed by the same centralized POS system.”
Bell is essentially saying restaurants, via investments in kitchen automation technology, will be able or have already been able to pivot to various revenue streams at a moment’s notice, such as making meal kits, dining room, groceries, delivery, among others.
“One channel might be the dining room, one channel might be first-party delivery, one channel might be meal kits, and so on,” added Bell. “Having the kitchen run as efficiently as possible extends that efficiency into all of those channels.”
Square said one respondent, Mediterranean fast-casual chain The Kebab Shop, already invested in kitchen automation technology when the pandemic struck, and quickly allowed it to pivot to curbside pickup and delivery.
“We’re really lucky that we keep everything in the same ecosystem,” owner Wally Sadat explained. “We were already digital-forward, so when it came to implementing something on the fly, like during COVID, we were in a good position.”
Other notable stats from the survey shows how restaurants are rapidly evolving in a post-COVID world:
- 3 in 4 restaurants plan on offering contactless ordering and payment options across all channels.
- 59% of consumers are willing to buy items that are not part of the restaurant’s core offerings.
- 42% of restaurants plan to invest in customer loyalty programs
- Restaurants that are using online ordering for delivery and takeout expect 62% of revenue to come through those channels.
- 67% of consumers prefer to use a restaurant’s own website or app for food delivery.
- 92% of restaurant owners and managers are open to experimenting with their menu.
- 88% of restaurants would consider completely switching from physical to digital menus.
… and as readers may know when artificial intelligence and automation are embedded into company businesses models – they become job killers – suggesting technological unemployment will soar through this decade.
How will the economy replace the millions of jobs lost if technology displaces them?
Tyler Durden
Sat, 02/27/2021 – 22:00 - Watch: Exeter WW2 Bomb Detonated As Thousands Evacuated
Watch: Exeter WW2 Bomb Detonated As Thousands Evacuated
Update ( 2153 ET): On Saturday evening, a controlled detonation of the unexploded World War Two bomb found in Exeter, England, was conducted by the Royal Navy bomb disposal team.
* * *
At a construction site in Exeter, a city on the River Exe in southwest England, an unexploded World War Two bomb was found.
On Saturday morning, Devon & Cornwall Police released a statement that read 2,600 households have been “evacuated in preparation for the examination of a possible unexploded World War Two device, which was located at a site on Glenthorne Road, Exeter, yesterday, Friday 26 February.”
The 2.5m (8ft) by 70cm (27in) bomb was found by construction workers on a private worksite west of the University of Exeter campus.
Devon & Cornwall Police said, “the Royal Navy bomb disposal team who worked through the night to establish a walled mitigation structure.”
Examination and detonation of the bomb are expected to be conducted by the Army.
Devon & Cornwall Police tweeted a map of where the bomb was found and the evacuation area.
In a series of tweets, the University of Exeter said students were evacuated from the area on Friday.
EMERGENCY MESSAGE: Building evacuation on Streatham Campus
Earlier today builders on private land next to the University uncovered an unexploded bomb.
Police are coordinating and there is no indication that this causes imminent danger, but we need to take immediate action.— University of Exeter (@UniofExeter) February 26, 2021
https://platform.twitter.com/widgets.js
The discovery comes as no surprise considering the Germans in World War Two bombarded the city.
With the area around the bomb site locked down and the military working to defuse the device – additional updates on the situation should follow.
Tyler Durden
Sat, 02/27/2021 – 21:53 - The Danger Of The Administrative State
The Danger Of The Administrative State
Authored by Ethan Yang via The American Institute for Economic Research,
Lockdowns should have shown every American just how tyrannical and unreasonable our leaders can be. There are elected leaders like Governor Cuomo who have acted as outright tyrants, alienating everyone, even those in his own party. Then there are the unelected bureaucrats who wave away our liberties with the stroke of a pen from the secrecy of their massive offices with technocratic efficiency. This is all of course a sudden and dramatic curtailing of our freedoms. I would not be surprised that with this much public attention, some sort of effort will be made to roll back much of what has been done. Although lockdowns are certainly an existential threat to our long-term freedoms and system of liberal democracy, there has been another specter out there that many experts have been sounding the alarm on for decades. The growth of the administrative state.
The chilling narrative about the growth of the administrative state, which is essentially the regulatory apparatus of the executive branch, is usually confined to specialist professions. The ever-present danger of a slowly expanding and unaccountable apparatus of bureaucrats that threatens to sap the life out of American society and drown it in a sea of paperwork is typically a concern that only keeps policy wonks and lawyers up at night. Although many lawyers probably celebrate this dystopian vision because they benefit from the compliance fees. The regulatory state not only threatens to make society that much slower and dreary with its excessive onslaught of regulation but it also makes us poorer. Robert Samuelson writes for the Washington Post that
“No one really knows by how much, but “there is ample evidence that regulation has expanded and that this expansion has limited economic growth,” as Ted Gayer and Philip Wallach of the Brookings Institution recently wrote. One study estimates that regulation has shaved 0.8 percent off the U.S. annual growth rate, which — if confirmed by other studies — would be huge.”
The regulatory state refers to organizations such as the Environmental Protection Agency, the Centers for Disease Control, the Federal Trade Commission, the Department of Education, the Department of Justice, the Internal Revenue Service, and all the other three-letter agencies in Washington, DC. If you would like to see how long the list of agencies is, take a look at the Federal Register, to which there are 455. That number is absolutely mind-boggling and you don’t need a fancy degree in political science like I have to say that society can function without their oversight. A paper by Peter Strauss at Columbia Law School notes that there are currently over 2 million civilians employed in the federal government alone. He notes that for context,
“The first Congress to meet once the Constitution was ratified created a Post Office and Departments of War, Navy, Foreign Affairs, and Treasury, each in unique ways suited to its responsibilities; this new government employed few civil servants to manage all its affairs. The first serious count of federal civilian employees, in 1816, reported that they numbered 4,837.”
The drastic expansion of the administrative state has come at a cost to not only our liberty, which is slowly being eroded by a sea of paperwork and regulations, but it also undermines our democracy. According to Article 1 of the Constitution, the legislative branch or Congress is supposed to be the primary law-making body of our government. That is because if there are bad laws or laws society doesn’t like, we can hold people accountable. However, more and more power has been shifted to the executive branch because of the growth of the administrative state. Even the judicial system is losing power to the administrative state after the establishment of a legal doctrine known as Chevron Deference, which binds the court system to defer to the administrative agency’s interpretation of a rule, not the Constitutional interpretation of a sitting judge. It shouldn’t be too hard to assume that the interpretation will probably favor the ambitions of the agency, not the integrity of the Constitution. These issues and more form the basis of legal scholar Richard Epstein’s assertion that the administrative state is not congruent with rule of law in this country.
The worst part about all of this is that society continues to tell itself that those in the administrative state are simply humble public servants. Although I’m sure many of them are, the hard reality is that at the end of the day it’s a source of income and advancement for bureaucrats just like jobs in the private sector are for everyone else. This is the basic insight of Public Choice Theory, which is the common-sense realization that government agents are not angels, they are humans and follow human nature. That means that although many government agents may think they are serving the country, they are also limited by their own capabilities as humans as well as their desires. This is demonstrated by a phenomenon known as the Washington Monument Syndrome, which refers to how when a government agency is threatened with a budget cut or hiring freeze, they shun fiscal restraint in order to protect their own self-interests. The Washington Monument Syndrome gets its name because when the National Park Service was faced with budget cuts, instead of streamlining its finances like a normal private company they protested by shutting down the Washington Monument rather than taking sensible steps to cut costs. In the private sector there is a natural check on how much workers can demand, such as the threat of going out of business. In the public sector there are no such restraints. This is part of the reason why the bureaucracy simply grows and grows and grows, taking our freedom as well as our treasure as it does.
Finally, there is the dark fact that there are ambitious people in the administrative state who want to make a name for themselves at the expense of their fellow countryman. If there aren’t any problems to solve, hotshot regulators are trying to move up the food chain by creating problems to solve by either targeting innocent private actors or trying to pump up their resumes with unnecessary sanctions. This problem is well known when it comes to the criminal justice system, as prosecutors leverage plea bargains to increase their incarceration statistics regardless of the guilt of the defendant and without ever having to take a case to trial, which is a constitutional right. However, this system of perverse incentives to simply rack up wins at the expense of society is present in the regulatory state as well as agencies bringing the government’s boot down on businesses just trying to provide a good service.
I had a personal experience with this dynamic when I interned at a law firm providing pro bono services to private entities that were being pursued by trigger-happy regulators. The case I worked on was FTC vs D-Link Systems, which was settled finding no liability for any violations. The FTC in this case levied a claim that D-Link Systems was engaging in deceptive practices. However, upon investigation there were no rules that they violated, nor were there any widespread complaints from consumers to be found. The FTC was essentially going out of its way and leveraging vague rules to pursue a responsible corporation likely in the name of career advancement. That is because there are no rewards for doing nothing, even though that’s what the government should be doing when its citizens are being responsible. Sadly, not every private business has the resources to fight back against overzealous government regulators. Even worse, there is little being done to check the powers of the administrative state. In fact, many elected politicians simply see it as a way to shift blame away from themselves.
Key Takeaway
If lockdowns were a sudden and brutal assault on our liberties, the rise of the administrative state would be the silent killer. It keeps itself away from the public spotlight, only raising alarms for the communities it directly affects and policy wonks who enjoy ranting about taxes and federal codes all day. To the average person, the administrative state is not a problem until it is. Every year it grows and grows with little incentive to care for the trouble it has caused for the rest of American society. It is the true embodiment of the leviathan illustrated by Hobbes. Although there is certainly a time and place for regulatory agencies, today they have so greatly outgrown their bounds to the point they are becoming an unelected judge, jury, and executioner. What was a handful of executive agencies at the beginning of the republic has now become an expansive list of alphabet soup abbreviations, some with their own SWAT teams and court systems. The administrative state not only saps our treasure and stifles our creativity but it drains our spirit. If left unchecked it will surely turn this country of ambitious innovators and entrepreneurs into one of paper pushers and clerks.
Tyler Durden
Sat, 02/27/2021 – 21:30 - Ikea Is Now Selling Tiny Homes For Broke Millennials
Ikea Is Now Selling Tiny Homes For Broke Millennials
The virus pandemic’s economic hit has been particularly severe for millennials, considering many of them decided to get useless English degrees and rack up insurmountable student debt while choosing after college to become bartenders. As the story goes, in a post-pandemic world, the downturn has crushed the restaurant industry. Many youngsters are either collecting government checks or finding other jobs or attempting to retrain for a new career. As home prices soar (no thanks to Fed. Chair Powell), housing affordability has become out of reach for many. That’s why Ikea, yes, the affordable furniture store that sells Swedish meatballs, is now marketing tiny homes for broke millennials.
The tiny home crazy has been gaining momentum in the last decade as wealth inequality, driven mainly by the Federal Reserve, leaving most of the wealth concentrated in just a few hands, has resulted in the middle class’s decimation. People are downsizing left and right and opting for tiny homes.
Ikea launched the Tiny Home Project to capitalize on this trend. The 187-square-foot structure, or what could be viewed as a trailer, but commonly known as a “tiny home” to hipsters, is equipped with renewable, reusable, and recycled materials for inside furnishings, solar panels on the roof, running water, kitchen, and a ductless heat pump and air conditioner unit.
Under the guise of eco-conscious minimalists, millennials who gravitate towards tiny homes don’t realize that their living standard has collapsed. Say goodbye to the McMansion of the late 90s and early 2000s, and hello, to the double-wide trailer.
Unlike assemble-it-yourself furniture that the Swedish company is known for, these tiny homes are preassembled in a factory in partnership with media firm Vox Creative and Wisconsin-based tiny home ESCAPE.
During the pandemic, internet searches for “tiny homes” hit a five-year high.
With Amazon already selling tiny homes, how long until Walmart joins the party?
Tyler Durden
Sat, 02/27/2021 – 21:00 - Lacalle: MMT Is Fake Economics
Lacalle: MMT Is Fake Economics
In this era of monetary fiction, one tends to read all types of undocumented and misguided views on monetary policy. However, if there is one that really is infuriating is the MMT science fiction.
One of its main principles is based on a fallacy.
“A country with monetary sovereignty can issue all the debt it needs without default risk”
First, it is untrue. A report by David Beers at the Bank Of Canada has identified 27 sovereigns involved in local currency defaults between 1960 and 2016 (database here).
(source: Bank of Canada, David Beers)
David Beers explains: “A long-held view by some investors is that governments rarely default on local or domestic currency sovereign debt. After all, they say, governments can service these obligations by printing money, which in turn can reduce the real burden of debt through inflation and dramatically so in cases like Germany in the 1923 and Yugoslavia in 1993-94. Of course, it’s true that high inflation can be a form of de facto default on local currency debt. Still, contractual defaults and restructurings occur and are more common than is often supposed”.
(source: Bank of Canada, David Beers)
No, a country with monetary sovereignty cannot issue all the debt it needs without default risk. It needs to issue in foreign currency precisely because few trust their monetary policies. Most local citizens are the first ones to avoid domestic currency exposure and buy US dollars, gold or cryptocurrencies (now), fearing the inevitable:
Most governments will try to cover their fiscal and trade imbalances by devaluing and making all savers poorer.
“A country with monetary sovereignty can issue all the currency it needs” is also a fallacy.
Monetary sovereignty is not something the government decides. Confidence and use of fiat currency are not dictated by the government nor does it give said government the power to do what it wants with monetary policies. Citizens all over the world have stopped accepting the government-issued and denominated currency when confidence in its purchasing power has been destroyed after increasing the money supply well above its real demand.
That is why the Sucre in Ecuador or the Colon in El Salvador collapsed or why the Argentine peso and the Venezuela bolivar or the Iran Rial are widely rejected by local and international citizens. There are numerous fiat currencies that have failed or disappeared. As Michael Sanibel writes, “a nation’s currency is not exempt from the laws of supply and demand, so the more that is printed, the less it is worth“. Currency collapses and failures are frequent, but, more importantly, even if some survive, its domestic and international demand is irreparably damaged.
Given that the world of currencies is a relative one, the average citizen of the world will prefer gold, cryptocurrencies, US dollars or Euros and Yen despite their own imbalances rather than their own currencies.
Why is this? When governments and central banks worldwide try to implement the same mistaken monetary policy of the US and Europe or Japan but without their investment security, institutions and capital freedom, then they fall into their own trap. They weaken their own citizens’ trust in the purchasing power of the currency.
The MMT answer would be that all that is needed then is stable and trustworthy institutions. Well, it does not work either. The first crack in that trust is precisely currency manipulation to finance bloated government spending. The average citizen may not understand monetary debasement but certainly understands that their currency is not a valid reserve of value or payment system. Because the value of the currency is not dictated by the government, but by the latest purchase agreements made with such means of payment.
Governments always see economic cycles as a problem of lack of demand that they need to “stimulate”. They see debt and asset bubbles as small “collateral damages” worth assuming in the quest for inflation. And crises become more frequent while debt soars & recoveries weaker.
(source World Bank, Deutsche Bank)
The imbalances of the US, Eurozone or Japan are also evident in the weak productivity growth, high debt and diminishing effectiveness of policies (read “Monetary Stimulus Does Not Work, The Evidence Is In“).
(source IIF, BIS)
Countries don’t borrow in foreign currency because they are dumb or ignore MMT science fiction, but because savers don’t want government currency debasement risk, no matter what yield. The first ones that avoid domestic currency debt tend to be domestic savers and investors, precisely because they understand the history of purchasing power destruction of their governments’ monetary policies.
Some 48% of the world’s $30T in cross-border loans are priced in US dollars, up from 40% a decade ago, according to the Bank of International Settlement. Again, not because countries are stupid and don’t want to issue in local currency. Because there is little real demand.
(source IIF)
As such, governments cannot unilaterally decide to issue “all the debt they need in local currency” precisely because of the widespread lack of confidence in the central bank or the governments’ perverse incentive to devalue at will.
As reserves dry up, and citizens see that their government is destroying purchasing power of the currency, the local savers read minsters talk about “economic war” and “foreign interference”, but they know what really happens. Monetary imbalances are soaring. And they run away.
(source: Capital Economics)
Inflation is not solved with (more) taxation.
Many MMT proponents solve this equation of inflation caused by monetary excess denying that inflation is always a monetary phenomenon, and saying that inflation would be solved by taxation. Is it not fantastic?
The government benefits the first from new money creation, massively increases its imbalances and blames inflation on the last recipients of the new money created, savers and the private sector, so it “solves” the inflation created by the government by taxing citizens again. Inflation is taxation without legislation, as Milton Friedman said.
First, the government policy makes a transfer of wealth from savers to the political sector, and then it increases taxes to the “solve” inflation it created. Double taxation.
How did that work in Argentina? That is exactly what governments implemented, only to destroy the currency, create more inflation and send the economy to stagflation (read).
These two factors, inflation, and high taxation, negatively impact competitiveness and ease to attract capital, invest and create jobs, relegating a nation of enormous potential, such as Argentina, to the final positions of the World Economic Forum index, when it should be at the top.
Excessive inflation and high taxes are two almost identical factors that hide an excessive public expenditure that has acted as a brake on economic activity since it is not considered as a service to facilitate economic activity, but as an end in itself. The consolidated public expenditure reached 47.9% of GDP in 2016, a figure that is clearly disproportionate. Even if we consider primary public expenditure, that is, excluding the cost of debt, it doubled between 2002 and 2017.
The idea that a country’s debt is not a liability but simply an asset that will be absorbed by savers no matter what is incorrect as it does not consider three factors.
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No debt is an asset because the government says so, but because there is a real demand for it. The government does not decide the demand for that bond or credit instrument, the savers do. And savings are not unlimited, hence deficit spending is not endless either.
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No debt instrument is an attractive asset if it is imposed onto savers through repression. Even if the government imposes the confiscation of savings to cover its imbalances, the capital flight intensifies. it is literally like making a human body stop breathing in order to conserve oxygen.
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That debt is simply impossible to assume when the investor and saver know that the government will destroy purchasing power at any cost to benefit from “inflating its way out of debt”. The reaction is immediate.
The Socialist idea that governments artificially creating money will not cause inflation, because the supply of money will rise in tandem with supply and demand for goods and services, is simply science fiction.
The government does not have a better or more accurate understanding of the needs and demand for goods and services or the productive capacity of the economy. In fact, it has all the incentives to overspend and transfer its inefficiencies to everyone else.
As such, like any perverse incentive under the so-called “stimulate internal demand” fallacy, the government simply creates larger monetary imbalances to disguise the fiscal deficit created by spending and lending without real economic return. Creating massive inflation, economic stagnation as productivity collapses and impoverishing everyone.
The reality is that currency strength and real long-term demand for bonds are the ultimate signs of the health of a monetary system. When everyone tries to play the Fed without the US economic freedom and institutions, they only play the fool. Monetary illusion may delay the inevitable, a crisis, but it happens faster and harder if imbalances are ignored.
However, when it fails, the MMT crowd will tell you that it was not done properly. And that it is YOU, not them, who do not understand what money is.
Tyler Durden
Sat, 02/27/2021 – 20:30 -
- Israel Says Iran Behind Blast On Israeli-Owned Ship In 'Initial Assessment'
Israel Says Iran Behind Blast On Israeli-Owned Ship In ‘Initial Assessment’
Israel is blaming Iran for the Thursday incident in the Gulf of Oman wherein a cargo vessel owned by an Israeli businessman was hit by a ‘mystery’ explosion, forcing it to divert to the nearest port after sustaining severe damage.
Defense Minister Benny Gantz has announced as part of an “initial assessment” that Tel Aviv believes Iran was behind a bomb attack on the car-carrier vessel, identified as the Helios Ray. Suspicion of Iran’s involvement has been rampant in Israeli media since the blast. However, there’s yet to be definitive proof or evidence that either a state actor or terrorist elements were involved, much less any specific details released to the public.
“Iran is looking to hit Israeli infrastructure and Israeli citizens. The location of the ship in relative close proximity to Iran raises the notion, the assessment, that it is the Iranians,” Defense Minister Benny Gantz said on Saturday, according to Reuters.
Photos circulating of damage to Helios Ray after explosion on board. There are some similarities to photos from previous limpet mine attacks in Gulf of Oman. #Israel #OOTT #Iran pic.twitter.com/gPnvSElQpX
— Jason Brodsky (@JasonMBrodsky) February 26, 2021
https://platform.twitter.com/widgets.js
Gantz appears to be speculating to a large degree, likely with an intelligence investigation still pending. He added: “Right now, at an initial assessment level, given the proximity and the context – that is my assessment.”
No crew were reported harmed in the blast which struck the hull of the Bahamian flag vessel as it traveled through the Gulf of Oman from Saudi Arabia to Singapore. It’s now reported to be docked in Dubai as the damaged is assessed, some photos of which circulated online in the past two days.
Pentagon sources confirmed the damage yet without specifying blame. “A U.S. defense official in Washington said the blast left holes above the waterline in both sides of the hull. The cause was not immediately clear and no casualties were reported,” Reuters noted.
During the summer 2019 ‘tanker war’ involving Iran and the West, the Islamic Republic was blamed for limpet mine attacks on commercial vessels in the region; however, Tehran vehemently denied these attacks, which many speculated was ‘retaliation’ for the UK seizing and temporarily detaining the Iranian oil tanker ‘Grace 1’ off Gibraltar, citing compliance with US-led sanctions.
Tyler Durden
Sat, 02/27/2021 – 20:00 - Minimum Wage, Maximum Discrimination
Minimum Wage, Maximum Discrimination
Authored by Caleb Fuller via The Mises Institute,
Since the days of Adam Smith, economists have sought a set of social institutions which permit “neither dominion, nor discrimination,” to use Nobel Prize–winning economist James Buchanan’s phrase. In this, economists are joined by all people of goodwill—including those in the Biden administration, which has enshrined equity and inclusion as cornerstones of how they’ll govern.
What separates the economist from other social do-gooders, however, is an unflinching focus on the means used to achieve noble goals. It’s therefore with alarm that I consider the Biden administration’s dual focus on “diversity and equity” and its doubling down on the “fight for $15.” I’m alarmed because the minimum wage impedes our ability to foster a society genuinely built on “diversity and equity.”
Here’s the straight talk on the minimum wage that you probably didn’t learn in school: the minimum wage has been a powerful weapon in the arsenal of racists and bigots. Economists have illuminated the devastating effects of the minimum wage on minorities with empirical evidence and entire books on the subject, but to see one reason why the policy targets minorities, first consider a little basic economics.
Consider the demand side of the labor market.
Firms will hire fewer workers if the government criminalizes voluntary agreements to work for less than $15 per hour. This is an uncontroversial point to make about virtually any other market. If the price of apples doubles, people buy fewer apples. They buy more oranges instead. Employers do the same thing. Under the minimum wage, they start buying more machinery, like the kiosks you see in Panera. The upshot: fewer jobs.
Now let’s consider the supply side of the labor market, where the higher minimum wage attracts new workers to the labor market—those, like college students, who might have sat on the sidelines otherwise. The upshot: more job seekers.
Fewer jobs plus more job seekers means that more people will be searching for jobs than there are jobs available—a labor surplus. In other words, the minimum wage creates a “buyer’s market” in labor, because it causes job seekers to line up in front of employers who have limited jobs to offer.
Suppose an employer receives a hundred applicants for a job opening. How does he choose whom to hire?
Without the minimum wage, whoever wants the job most will outcompete other jobseekers by offering to work for less.
With a minimum wage, the employer can’t say: “Who will work for $14.95?” If he does, he’s a criminal; he literally violates the law.
Since he can’t just pick the most eager job seekers, he needs some alternative way to select from his hundred applicants. When you have a surplus of labor in a market with a minimum wage, prices aren’t allowed to adjust, so the employer picks from that surplus based on personal preferences. These may include race, sex, gender, religion, or other personal characteristics that have little to do with productivity. In fact, in the past, it has included just that. Faced with more job seekers than there are jobs available, a bigoted employer bears little cost when he refuses to hire a member of a group he dislikes. He knows someone else in the applicant pool will be from his preferred group.
In a market without a minimum wage, when an employer turns down an applicant to satisfy his bigoted tastes, he doesn’t have ninety-nine other job seekers to choose from. There’s no labor surplus. If he chooses to indulge his bigoted tastes, the job remains unfilled for longer, which means less money for our racist employer. Consider that in the United States the African American teenage male unemployment rate was lower than the white teenage male unemployment rate through the late 1940s. The 1950s saw the single largest increase (in percentage terms) of the minimum wage. The reasoning I just gave explains why the African American teen joblessness rate then soared above that of whites. That gap remains to the present day. Like Adam Smith, James Buchanan, and the Biden administration, I too desire a society where the power of bad people to exercise “dominion or discrimination” is constrained, even eliminated. Presumably, my fellow Pennsylvanians do too. The fact that nearly two-thirds of them (and 89 percent of liberals) support a $15/hour minimum wage is therefore troubling. My fellow citizens should consider whether this policy facilitates or impedes the ability of bad men to do harm. Economics says it facilitates.
So does history. As Princeton’s Thomas Leonard has demonstrated in his book Illiberal Reformers: Race, Eugenics, and American Economics in the Progressive Era, the early minimum wage advocates saw it as a prime tool to exercise “dominion and discrimination” over those they deemed ill-suited to reproduction. The minimum wage was well suited to perform the Progressives’ dirty work of discriminating against (what they considered) the least productive by making them unemployable.
It has been over a hundred years since the Progressive Era. But the laws of economics haven’t changed. The only question is: Have we?
Tyler Durden
Sat, 02/27/2021 – 19:30 - FDA Clears JNJ Covid-19 Shot For Use In The US, Giving Americans 3rd Vaccine Choice
FDA Clears JNJ Covid-19 Shot For Use In The US, Giving Americans 3rd Vaccine Choice
Late on Friday afternoon, when an FDA panel unanimously endorsed the J&J Covid vaccine finding that its benefits outweigh any risks, we wrote that the “FDA could now give the green light to the single-dose vaccine as early as Saturday, and it probably will.” And just after 6pm on Saturday, that’s precisely what happened when the Food and Drug Administration on Saturday authorized Johnson & Johnson’s single-shot, non-mRNA Covid-19 vaccine for emergency use for people 18 and older beginning the rollout of millions of doses of a third effective vaccine that could reach Americans by early next week.
The announcement come following weeks of steep declines in coronavirus cases (which however may have stabilizied in recent days) and millions of Americans are on waiting lists for shots.
The FDA’s decision comes after a Wednesday report according to which the J&J shot is highly effective at preventing severe Covid-19, with no serious side effects.
On Sunday, a committee of vaccine experts who advise the Centers for Disease Control and Prevention will meet to discuss whether certain population groups should be prioritized for the vaccine, guidance that state health officials have been eagerly awaiting in anticipation of the F.D.A.’s authorization.
Joe Biden hailed the vaccine’s authorization, calling it “exciting news” in a statement on Saturday.
“Thanks to the brilliance of our scientists, the resilience of our people, and the eagerness of Americans in every community to protect themselves and their loved ones by getting vaccinated, we are moving in the right direction,”
That said, we are confident that Trump – under whose watch operation WarpSpeed was launched – could say the exactly same thing and have more credit.
Johnson & Johnson has pledged to provide the United States with 100 million doses by the end of June. When combined with the 600 million doses from the two-shot vaccines made by Pfizer-BioNTech and Moderna scheduled to arrive by the end of July, there will be more than enough shots to cover any American adult who wants one.
But federal and state health officials are concerned that even with strong data to support it, some people may perceive Johnson & Johnson’s shot as an inferior option. That’s because the new vaccine’s 72% efficacy rate in the U.S. clinical trial site falls short of the roughly 95% rate found in studies testing the Moderna and Pfizer-BioNTech vaccines. Across all trial sites, the Johnson & Johnson vaccine also showed 85 percent efficacy against severe forms of Covid-19 and 100 percent efficacy against hospitalization and death from the virus.
“Don’t get caught up, necessarily, on the number game, because it’s a really good vaccine, and what we need is as many good vaccines as possible,” Anthony Fauci said in an interview with the NYT on Saturday. “Rather than parsing the difference between 94 and 72, accept the fact that now you have three highly effective vaccines. Period.” And when it comes to pitching “ballpark” figures who better than the person who admitted to lying about herd immunity to trick Americans into getting the vaccine.
If Johnson & Johnson’s vaccine would have been the first to be authorized in the United States instead of the third, “everybody would be doing handstands and back flips and high-fives,” said Dr. James T. McDeavitt, dean of clinical affairs at the Baylor College of Medicine.
As a reminder, unlike Pfizer and Moderna, J&J’s vaccine is made from a common cold virus that doesn’t replicate in the body but triggers an immune response to fight off infection. In the U.S. portion of a more than 43,000-person global trial, it was found to be 72% effective at preventing moderate to severe Covid.
To create this vaccine, the Johnson & Johnson team took a harmless adenovirus – the viral vector – and replaced a small piece of its genetic instructions with coronavirus genes for the SARS-CoV-2 spike protein.
After this modified adenovirus is injected into someone’s arm, it enters the person’s cells. The cells then read the genetic instructions needed to make the spike protein and the vaccinated cells make and present the spike protein on their own surface. The person’s immune system then notices these foreign proteins and makes antibodies against them that will protect the person if they are ever exposed to SARS-CoV-2 in the future.
The adenovirus vector vaccine is safe because the adenovirus can’t replicate in human cells or cause disease, and the SARS-CoV-2 spike protein can’t cause COVID–19 without the rest of the coronavirus.
Policy makers claim they have been eager to get more people immunized before virus mutations can take firmer hold in the U.S. J&J’s vaccine provided less protection against the new variants, trial data suggested. In Brazil, the shot was 68% effective against moderate-to-severe disease 28 days after vaccination, while in South Africa it was 64% effective. But across the globe, including in countries with emerging variants, the shot successfully prevented all hospitalizations and deaths.
Speaking to Bloomberg, Mathai Mammen, the head of global research and development for J&J’s pharmaceutical division, said in an interview last month that it’s impossible to compare overall efficacy levels between the vaccines, given that the trials were carried out in different locations at different times in the course of the pandemic.
“What people fear is getting sick, so sick they have to go to an emergency room, or hospital, and even die,” he said “This vaccine, in a single shot, protects completely from that kind of fear.”
J&J is still testing a two-shot regimen in a large, global trial that is expected to produce results before year-end. Like Pfizer and Moderna, the company is working on boosters tailored to the variants. And it plans studies soon in children, pregnant women and the immunocompromised. J&J executives have said the company will charge no more than $10 a dose for the vaccine during the pandemic — a price at which it won’t profit. The Pfizer-BioNTech vaccine costs the U.S. $39 for the full regimen, and the Moderna vaccine costs $33 for both doses.
* * *
In any case, Johnson & Johnson has said it will ship nearly four million doses as soon as the F.D.A. authorizes distribution and another 16 million or so doses by the end of March. That is far fewer than the 37 million doses called for in its $1 billion federal contract, but the contract says that deliveries that are 30 days late will still be considered timely. The federal government is paying the firm $10 a dose for a total of 100 million doses to be ready by the end of June, substantially less per dose than it agreed to pay Moderna and Pfizer.
More importantly, Johnson & Johnson’s one-dose vaccine might allow states to rapidly increase the number of people who have been fully inoculated. Unlike the other two vaccines, it can be stored at standard refrigeration temperatures for at least three months.
Dr. Danny Avula, the vaccine coordinator for Virginia, said the Johnson & Johnson shipments would increase the state’s allotment of vaccine next week by nearly one-fifth. “I’m super-pumped about this,” he said. “A 100 percent efficacy against deaths and hospitalizations? That’s all I need to hear.”
He said the state was planning mass vaccination events specifically for the Johnson & Johnson vaccine, partly to quell any suspicion that it is a lesser product targeted to specific groups.
“It will be super clear that this is Johnson & Johnson — here’s what you need to know about it,” he said. “If you want to do this, you’re coming in with eyes wide open. If not, you will keep your place on the list.”
Tyler Durden
Sat, 02/27/2021 – 19:26 - 'The Governor Wanted To Sleep With Me': Cuomo Accused Of Sexually Harassing Second Former Aide
‘The Governor Wanted To Sleep With Me’: Cuomo Accused Of Sexually Harassing Second Former Aide
New York Governor Andrew Cuomo has been accused of sexual harassment by a second former aide, according to the New York Times.
Charlotte Bennett, a former executive assistant and health policy adviser to the Cuomo administration up until November of last year, told the Times that Cuomo had asked her sever questions about her sex life – including whether she ever had sex with older men, and whether she was monogamous in her relationships.
NY Gov. Andrew Cuomo, Charlotte Bennett He also allegedly told her during a June, 2020 encounter that the 63-year-old governor complained about being ‘lonely during the pandemic,’ and that he “can’t even hug anyone.”
Ms. Bennett, 25, said the most unsettling episode occurred on June 5, when she was alone with Mr. Cuomo in his State Capitol office. In a series of interviews this week, she said the governor had asked her numerous questions about her personal life, including whether she thought age made a difference in romantic relationships, and had said that he was open to relationships with women in their 20s — comments she interpreted as clear overtures to a sexual relationship. –New York Times
Cuomo told The Times on Saturday that he thought he was acting as a mentor, and “never made advances toward Ms. Bennett, nor did I ever intend to act in any way that was inappropriate, before asking for an independent review of the matter – and imploring New Yorkers to await the results “before making any judgements.”
Bennett related an exchange in which she felt Cuomo made clear he wanted to sleep with her.
Ms. Bennett said that during the June encounter, the governor, 63, also complained to her about being lonely during the pandemic, mentioning that he “can’t even hug anyone,” before turning the focus to Ms. Bennett. She said that Mr. Cuomo asked her, “Who did I last hug?”
Ms. Bennett said she had tried to dodge the question by responding that she missed hugging her parents. “And he was, like, ‘No, I mean like really hugged somebody?’” she said.
Mr. Cuomo never tried to touch her, Ms. Bennett said, but the message of the entire episode was unmistakable to her. –New York Times
“I understood that the governor wanted to sleep with me, and felt horribly uncomfortable and scared,” Bennett said. “And was wondering how I was going to get out of it and assumed it was the end of my job.”
Bennett says she reported the interaction to Cuomo’s chief-of-staff, Jill DesRosiers, less than a week later – and was subsequently transferred to another job as a health policy adviser, where her office was located on the other side of the Capitol. Bennett also says she reported the incident to a special counsel to the governor, Judith Mogul, towards the end of last June – after which she chose not to insist on an investigation because she “wanted to move on” with her new job.
Cuomo, in his statement, called Bennett a “hard-working and valued member” of his staff who had “every right to speak out,” revealing that she had opened up to him about being a survivor of sexual assault.
“The last thing I would ever have wanted was to make her feel any of the things that are being reported,” said Cuomo, who did not deny asking Bennett personal questions.
Bennett’s accusation comes less than a week after a woman accused Cuomo of sexually harassing her several times between 2016 and 2018, at one point allegedly giving her an unsolicited kiss on the lips at his Manhattan office.
Lindsey Boylan has accused Mr. Cuomo of harassing her on several occasions while she was employed by the state government.Credit…Rob Latour/Shutterstock Cuomo says Boylan is lying.
Today I am telling my story. I never planned to share the details of my experience working in the Cuomo administration, but I am doing so now in hopes that it may make it easier for others to speak their own truth. https://t.co/n1Lcc6Ac66
— Lindsey Boylan (@LindseyBoylan) February 24, 2021
In response to the allegations against Cuomo – and in light of recent revelations that he withheld nursing home death data in order to avoid prosecution by the Trump DOJ, a top New York state lawmaker, Tim Kennedy (D), said that there’s a ‘need to get more information,” adding “And I believe we’re going to be looking for that in the coming days.”
Tyler Durden
Sat, 02/27/2021 – 18:53 - War Mongering For Artificial Intelligence
War Mongering For Artificial Intelligence
Authored by Dr. Binoy Kampmark via Southfront.org,
The ghost of Edward Teller must have been doing the rounds between members of the National Commission on Artificial Intelligence. The father of the hydrogen bomb was never one too bothered by the ethical niggles that came with inventing murderous technology. It was not, for instance, “the scientist’s job to determine whether a hydrogen bomb should be constructed, whether it should be used, or how it should be used.” Responsibility, however exercised, rested with the American people and their elected officials.
The application of AI in military systems has plagued the ethicist but excited certain leaders and inventors. Russian President Vladimir Putin has grandiloquently asserted that “it would be impossible to secure the future of our civilization” without a mastery of artificial intelligence, genetics, unmanned weapons systems and hypersonic weapons.
Campaigners against the use of autonomous weapons systems in war have been growing in number. The UN Secretary-General António Guterres is one of them.
“Autonomous machines with the power and discretion to select targets and take lives without human involvement,” he wrote on Twitter in March 2019, “are politically unacceptable, morally repugnant and should be prohibited by international law.”
The International Committee for Robot Arms Control, the Campaign to Stop Killer Robots and Human Rights Watch are also dedicated to banning lethal autonomous weapons systems. Weapons analysts such as Zachary Kallenborn see that absolute position as untenable, preferring a more modest ban on “the highest-risk weapons: drone swarms and autonomous chemical, biological, radiological, and nuclear weapons”.
The critics of such weapons systems were far away in the Commission’s draft report for Congress. The document has more than a touch of the mad scientist in the bloody service of a master. This stood to reason, given its chairman was Eric Schmidt, technical advisor to Alphabet Inc., parent company of Google, which he was formerly CEO of. With Schmidt holding the reins, we would be guaranteed a show shorn of moral restraint. “The AI promise – that a machine can perceive, decide, and act more quickly, in a more complex environment, with more accuracy than a human – represents a competitive advantage in any field. It will be employed for military ends, by governments and non-state groups.”
In his testimony before the Senate Armed Services Committee on February 23, Schmidt was all about “fundamentals” in keeping the US ascendant. This involved preserving national competitiveness and shaping the military with those fundamentals in mind. But to do so required keeping the eyes of the security establishment wide open for any dangerous competitor. (Schmidt understands Congress well enough to know that spikes in funding and outlays tend to be attached to the promotion of threats.) He sees “the threat of Chinese leadership in key technology areas” as “a national crisis”. In terms of AI, “only the United States and China” had the necessary “resources, commercial might, talent pool, and innovation ecosystem to lead the world”. Within the next decade, Beijing could even “surpass the United States as the world’s AI superpower.”
The testimony is generously spiked with the China threat thesis. “Never before in my lifetime,” he claimed, “have I been more worried that we will soon be displaced by a rival or more aware of what second place means for our economy, our security, and the future of our nation.” He feared that such worries were not being shared by officials, with the DoD treating “software as a low priority”. Here, he could give advice on lessons learned in the spawning enterprises of Silicon Valley, where the principled live short lives. Those dedicated to defence could “form smart teams, drive hard deliverables, and move quickly.” Missiles, he argued, should be built “the way we now build cars: use a design studio to develop and simulate in software.”
This all meant necessarily praising a less repressible form of AI to the heavens, notably in its military applications. Two days of public discussion saw the panel’s vice chairman Robert Work extol the virtues of AI in battle. “It is a moral imperative to at least pursue this hypothesis” claiming that “autonomous weapons will not be indiscriminate unless we design them that way.” The devil is in the human, as it has always been.
In a manner reminiscent of the debates about sharing atomic technology in the aftermath of the Second World War, the Committee urges that the US “pursue a comprehensive strategy in close coordination with our allies and partners for artificial intelligence (AI) innovation and adoption that promotes values critical to free and open societies.” A proposed Emerging Technology Coalition of likeminded powers and partners would focus on the role of “emerging technologies according to democratic norms and values” and “coordinate policies to counter the malign use of these technologies by authoritarian regimes”. Fast forgotten is the fact that distinctions such as authoritarianism and democracy have little meaning at the end of a weapon.
Internal changes are also suggested to ruffle a few feathers. The US State Department comes in for special mention as needing reforms. “There is currently no clear lead for emerging technology policy or diplomacy within the State Department, which hinders the Department’s ability to make strategic technology decisions.” Allies and partners were confused when approaching the State Department as to “which senior official would be their primary point of contact” for a range of topics, be they AI, quantum computing, 5G, biotechnology or new emerging technologies.
Overall, the US government comes in for a battering, reproached for operating “at human speed not machine speed.” It was lagging relative to commercial development of AI. It suffered from “technical deficits that range from digital workforce shortages to inadequate acquisition policies, insufficient network architecture, and weak data practices.”
The official Pentagon policy, as it stands, is that autonomous and semi-autonomous weapons systems should be “designed to allow commanders and operators to exercise appropriate levels of human judgment over the use of force.” In October 2019, the Department of Defence adopted various ethical principles regarding the military use of AI, making the DoD Artificial Intelligence Centre the focal point. These include the provision that, “DoD personnel will exercise appropriate levels of judgment and care, while remaining responsible for the development, deployment, and use of AI capabilities.” The “traceable” principle is also shot through with the principle of human control, with personnel needing to “possess an appropriate understanding of the technology, development processes, and operational methods applicable to AI capabilities”.
The National Commission pays lip service to such protocols, acknowledging that operators, organisations and “the American people” would not support AI machines not “designed with predictability” and “clear principles” in mind. But the note of warning in not being too morally shackled becomes a screech. Risk was “inescapable” and not using AI “to solve real national security challenges risks putting the United States at a disadvantage”. Especially when it comes to China.
Tyler Durden
Sat, 02/27/2021 – 18:30 - Propaganda Crash: World Economic Forum Tweets "Lockdowns Improving Cities", Then Deletes Admitting It Was Wrong
Propaganda Crash: World Economic Forum Tweets “Lockdowns Improving Cities”, Then Deletes Admitting It Was Wrong
If there was any doubt that economic lockdowns supposedly inspired by the Covid pandemic are the peak in globalist propaganda, it disappeared not so “quietly” once and for all at 5:48am ET on Saturday, when the globalist organization which recently unleashed such lunatics as Klaus Schwab, best known for revealing the endgame with his book COVID-19: The Great Reset, deleted a that “Lockdowns are quietly improving cities around the world.”
Remarkably, the WEF’s propaganda tweet – which was was accompanied by a video showing deserted streets and silent factories, that noted a record drop in carbon emissions and linked to an article claiming that silent cities contributed to better detection of minor earthquakes (because millions of workers losing their jobs is clearly less important than being able to measure the next M2 quake to the 8th significant digit) – survived just a few hours following a barrage of mockery and outraged comments.
Just before 6am ET on Saturday, the WEF finally deleted the tweet, admitting in a subsequent highly ratioed tweet that “lockdowns aren’t “quietly improving cities” around the world” despite still insisting that the restrictions have been “an important part of the public health response to Covid-19.”
We’re deleting this tweet. Lockdowns aren’t “quietly improving cities” around the world. But they are an important part of the public health response to COVID-19. pic.twitter.com/D2Pyb9x4yy
— World Economic Forum (@wef) February 27, 2021
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By this point, however, social media was in a full blown frenzy over the WEF’s admission that covid lockdowns are just peak propaganda – one which has the complicit participation of all Silicon Valley tech giants – and sparked en even louder response from an outraged non-Davos audience.
Too late. You already said locking us in our homes has improved the world, not the most casual of statements is it? Bit hard to forget you said that.
— Kirstin (@KirstinMarianna) February 27, 2021
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A group quickly swarmed on the corrected tweet, claiming correctly that the actual effect of lockdowns on halting the spread of the coronavirus remains a highly debated issue.
Now that’s 2 tweets you should delete. Lockdowns are inhuman and cause massive collateral damage to lives and livelihoods far beyond any “good” they do. They are straight from the CCP playbook.
— cynicalcactus (@cynicalcactus1) February 27, 2021
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The concession message looked like the WEF was actually “doubling down on [its] idiocy” instead of trying to do some damage control, former British MEP Martin Daubney wrote
“We’re deleting this tweet, but doubling down on our idiocy in the process”
WTF @wef?! https://t.co/QyjureXiBo
— Martin Daubney (@MartinDaubney) February 27, 2021
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At the same time, the peasants demonstrated remarkable insight accusing the WEF of being “the hidden enemy of the people, worldwide. The unelected force that look to dominate our lives by influencing Governments all over the globe. It needs shutting down.”
The WEF, the hidden enemy of the people, worldwide. The unelected force that look to dominate our lives by influencing Governments all over the globe. It needs shutting down.
— Dragonslayer🏴❤️🏖 (@Dragons68317191) February 27, 2021
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Some were furious that the propaganda arm of globalists had a “RIGHT TO RULE and DECIDE WHAT IS FAIR, EQUITABLE and REASONABLE” and warned that the crowd was coming for the WEF:
you guys are so clueless that you post something like this & then try to cancel it BUT YOU HAVE THE HIDE TO THINK YOU ARE BETTER THAN EVERYONE ELSE AND HAVE A RIGHT TO RULE and DECIDE WHAT IS FAIR, EQUITABLE and REASONABLE – a lot of you will be being prosecuted in the future imo
— mcm-ct.com (@mcm_ct) February 27, 2021
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Others quickly saw through the propaganda flip-flopping, and straight to the heart of the WEF’s agenda, one of spreading “global socialism” which will make lives for billions of people a nightmare which making a handful of virtue signaling uber-globalists (who arrive in Davos on their private jets even as they parade with how green they are) richer than ever:
The World Vegetable Centre?
Must have contracted their social media input to them.
Bernardi seems to know his onions tho’ pic.twitter.com/31SED3Z7XG
— Jatroa 🏴 (@jatroa) February 27, 2021
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Yet others had even more direct suggestions for the WEF:
Delete your account. And cancel your conference. The earth is not our prison and you are not our wardens.
— Nick Szabo (@NickSzabo4) February 27, 2021
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At the end, the catastrophic gaffe left a huge dent on what little was left of the the globalist group’s reputation, and many users argued that it should just shut up:
Yes, @wef, but the damage is done now. Very many of us have seen, very clearly, just how twisted, controlling and downright evil your intentions are, and will resist them any way we can. We may be unable to stop you, but we can be a massive bloody nuisance every step of the way.
— Erictheowl (@Erictheowl1) February 27, 2021
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But most importantly, the tweet confirmed once again that what until now was a “conspiracy theory” pursued with rabid fervor by such tech giants as Google, Amazon and Twitter, was fact:
You’ve proven the conspiracy theorists correct in how mad you are
— Big Dave (@mallondavid1) February 27, 2021
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It’s gone beyond conspiracy theory. It’s a fact.
— Andy M. Lloyd (@AJML38) February 27, 2021
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One of the great mysteries is how the world fawned over the WEF and Davos every year.
You can’t find group so tone deaf and so out of touch.
We need a Great Reset to permanently delete the WEF. https://t.co/xcGv9sZBLL
— Jonathan Tepper (@jtepper2) February 27, 2021
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Hours later, as the WEF’s catastrophic fiasco spread virally across the world, the WEF decided to triple down on its peak idiocy, and instead of just forgetting all about the matter decided that it’s best to engage with random twitter economists, and blame it all on “a working human being who made a mistake.”
It was written by a working human being who made a mistake. It was deleted.
— World Economic Forum (@wef) February 27, 2021
Tyler Durden
Sat, 02/27/2021 – 18:16 - These Are The 4 Things That Can Stop The Panic In The Bond Market
These Are The 4 Things That Can Stop The Panic In The Bond Market
It was just last Tuesday when he presented our readers with the latest observations from JPM quant Nicholas Panaigrtzoglou, who warned that the rapid rise in bond-equity correlations…
… was bringing memories of previous violent bond tantrum episodes, including Bernanke’s famous Taper Tantrum from May-June 2013, the Bill Gross-inspired Bund tantrum of May-June 2015, the period into the US election Oct-Nov 2016, Feb 2018 and Q4 2018. All of those ended with pain for both bond and equity longs, and certainly risk parity and 60/40 balanced funds who were crushed on both long legs.
Well, just two days later this warning was realized as we saw a surge in bond volatility as global bond prices plunged and yields soared as the latest inflation scare finally came to the fore (catalyzed by the catastrophic 7Y auction which sparked massive liquidation volumes across the curve).
And, as Panigrtzoglou writes today, the surge in the bond-equity correlation together with the increase in volatility is putting even more pressure on multi-asset investors, such as risk parity funds and balanced mutual funds to de-risk (something we also discussed last Thursday in “Vol, Correlation Massacre Means Capitulation Is Just Starting“).
And though we now know what catalyzed last week’s furious liquidation in rates, the question everyone is asking is whether the puke is over. And while some, such as the Nomura quant who correctly called both the early CTA liquidation and shorting that sparked last week’s rout now believe that the worst is over and CTAs are are now covering their shorts, Friday’s action which saw stocks closely sharply at their lows suggests that few are convinced.
Which brings us to the key question posed by JPM’s Panigirtzoglou, namely “what conditions are needed for the current episode to subside and for equity and risk markets to resume their uptrend?”
He then proceeds to answer his own question, the lesson from the previous positive bond-equity correlation episodes of May-June 2013, the Bund tantrum of May-June 2015, the period into the US election Oct-Nov 2016, Feb 2018 and Q4 2018, is that there are two main conditions:
- Rate vol needs to decline from its current very high level
- Bond yields need to subside and unwind a decent portion of most recent increases, in particular at the 5yr UST tenor.
Neither of these should come as a surprise to our readers. After all just last Sunday we laid out the week’s events clearly, when we proposed the opposite question, i.e., “Are Yields About To Blast-Off: Here Are The 3 Things To Watch“, concluding that “the aptly named MOVE index is the best real-time measure of potential runaway yields.” And sure enough, just days later the MOVE exploded to the highest level since last March’s bond crash.
So now that what the two critical conditions that must be present for a return to normalcy, the next question is “how could these conditions be achieved.” Here JPM envisages four scenarios.
A) The Fed intervenes by raising its bond buying pace in a similar fashion to March 2020. At the time, the Fed justified its intervention by seeking to restore functioning in rate markets. Thus far at least, this argument does not yet appear justified at the current level of market stress according to JPM, although as we noted earlier, BofA is already convinced that the Fed may address nervous markets as soon as this week.
Here JPM notes that while its market depth metrics for 10y UST futures and cash bonds have deteriorated, they still appear well above levels during March 2020 and this is true for both the 5y and 10yr tenor. And, as JPM claims, without further deterioration in UST liquidity it would be difficult to envisage a Fed intervention a la March 2020, especially if one views the recent bond selloff as a function of investors embracing the reflation trade. At the same time, Fed Chair Powell and Governor Brainard are scheduled to speak next week, and it will be important to watch for signs of how it views the bond market correction.
B) CTAs and other momentum traders hit oversold levels as mean reversion signals kick in. This, JPM writes, would provide at least some temporary relief (and it sure would especially if Nomura is right that the CTA shorting has now reversed). But back to JPM’s own calculations, the bank asks how far are we from oversold conditions on our momentum traders framework? The sell-off in 10y USTs to close just above 1.5% on Feb 25th has seen the bank’s shorter-term momentum signal for 10y USTs reach extreme bearish territory at -1.7 standard deviations, below even its early 2018 low of -1.5 standard deviations. The average of the shorter and longer-term signals reached a level of -0.8, still some way from its early 2018 low of – 1.2 standard deviations, but it would only take a further extension of the sell-off for 10y yields to 1.6% for this to reach its early 2018 low, while for the average of the shorter-term and longer-term signals to reach its 2018 low would take a further sell-off of just 5bp to around -0.2%.
Long story short, JPM agrees with Nomura that at 10y maturities, it appears the shorter-term signals for USTs have reached levels where mean reversion or profit taking signals by CTAs should start kicking in, while the average of shorter-term and longer-term signals are approaching those levels. That said, while there are signs that the shorter-term signal for 10y USTs and Bunds reaching extreme levels has triggered some CTAs to reduce short duration exposure, for the signals to more decisively reach oversold conditions for CTAs could take 10y UST yields reaching 1.6% and for 5y to reach 1.0%. This means that more yield momentum chasing higher could be in store in the coming days.
C) Japanese and Euro area investors step in to buy USTs to take advantage of the large yield pickup on a currency hedge basis relative to their domestic bonds. As the chart below shows, the recent TSY sell-off has seen the attractiveness of US Treasury yields rise on a currency-hedged basis, particularly for Japanese investors, and yet the probability of this flow materializing at current levels of UST vol is low as these investors and in particular banks tend to be averse to high levels of rate volatility.
Indeed, the latest weekly data on Japanese residents’ net purchases of foreign bonds for the week ending Feb 19th already saw net sales of around $18bn amid last week’s sell-off.
Before these investors step in, JPM suggests that first other flows or central bank actions are need to materialize first to induce a decline in volatility.
D) Finally, rebalancing flows by balanced mutual funds and/or pension funds would help bond markets to stabilize and bond yields to subside. Unlike foreign flows, the chance of these flows materializing is high during the current quarter according to JPM, though the timing is harder to predict and could happen. In the event it materializes more towards the end rather the beginning of March, it could create a flow vacuum for rate markets over the next two weeks. One potential risk: if and when these rebalancing flows emerge, they are unlikely to be supportive of equities, as they combine bond buying with equity selling.
* * *
Putting it all together, when thinking about the above four scenarios JPM finds that the conditions needed for this week’s market stress – which is reminiscent of the previous positive bond-equity correlation episode of Q4 2018 – to subside “may not yet be fully in place” which is a surprisingly bearish assessment, especially if as Nomura (correctly) observes, the CTA unwind of shorts has already begun and the next stop is likely to be 1.20%. Of the four scenarios, Panigirtzoglou concludes that there are some signs at least of the second starting to take shape as shorter-term momentum signals for 10y reached oversold conditions. In any event, if urgent stabilization is required and does not emerge, dragging equities lower, BofA will be right and the Fed will have to address the ongoing liquidation wave… although what the Fed will say is unclear.
After all, as we said earlier, the Fed is in a very big bind – the reason we have the current tantrum is precisely due to the massive liquidity injections from central banks who have been desperate for more inflation. Well, they have their inflation and to reverse it they plan to do what – inject even more liquidity? At some point even our broken markets will have to concede that what is going on is complete and terminal idiocy.
Tyler Durden
Sat, 02/27/2021 – 18:00 - 'Brace For Rampant Inflation': Hedge Fund Billionaire Stunned At "Market Craziness", Sees "Trouble Ahead"
‘Brace For Rampant Inflation’: Hedge Fund Billionaire Stunned At “Market Craziness”, Sees “Trouble Ahead”
In 2012 Elliott Management’s Paul Singer correctly warned that financial system leverage and technology would “serve as an accelerant in the next crisis”:
“The major message that I want to give you (and I’ve invited challenge on both parts of my thesis here and I’ve never had anybody challenge it): The major financial institutions in the US and around the globe are utterly opaque; and The next financial crisis will happen faster, more suddenly.“
Risk did indeed happen fast, numerous times since.
In 2014, Singer went more aggressively after the central banks and their arrogant largesse:
“There is no reason to suppose that they [central bankers] understand the modern financial system and economy to any greater extent than they did in 2007 (that is to say, not at all). Nevertheless, they plow ahead, expressing total confidence that what they are saying and doing is wise and not dangerous drivel.”
…
“It is unlikely that these unprecedented and experimental government policies of such gargantuan scope will actually create the desired result and allow themselves to be able to be unwound without great shock and disruption to the global financial system.”
His solution at the time:
“Although the levitation of financial assets has yet to levitate gold, we will grit our collective teeth on that score and await either ‘asset price justice’ or the ‘end times,’ whichever comes first.”
Justice was to come a couple of times since.
Interestingly, 2014 was when Singer began to warn about inflation and the potential for social unrest:
“…inflation is spreading in both scope and intensity. If and when it breaks out in an inescapably broad way, there will be a crowd of seriously confused policymakers making excuses and claiming that inflation does not in fact exist; it is not their fault; it was completely unpredictable; and/or it will actually be good for people.
“We believe that if and when inflation goes from being something that affects only a particular list of assets (a growing list, presently a combination of things owned by the well-off plus a number of things that are basic necessities) to a widespread “in-your-face” phenomenon affecting the cost of living of almost the entire population, then the normal yardsticks of risk, return and profit may be thrown into the garbage can. These measures may be replaced by a scramble by citizens and investors to preserve value on a foundation of shifting sand, together with societal unrest that may make the current politically-useful “inequality” riffs, blaming the “1%” and attacking those “millionaires and billionaires” who refuse to “pay their fair share,” look like mere warm-ups for real class warfare.”
He hasn’t always been right, obviously, as he claimed in 2016 that Donald Trump (if elected) would “cause a widespread global depression.” Quite the opposite happened, and the depression, it turns out did not happen until China (allegedly) unleashed COVID on the world.
Which brings us to Singer’s prophetic 2019 warning that a 40% crash was coming for the stock market.
“global debt is at an all-time high. Derivatives are at an all-time high and it took all of this monetary easing to get to where we are today and I don’t think central bankers, or policymakers or academics are in any better shape to predict the next downturn and I think we are the high end of the risk spectrum.”
He then ominously added that “I’m expecting the possibility of a significant market downturn.”
“December [2018] supported the notion that they’re trapped,” he said.
“What they should have done, and what they should do now, is try to restore the soundness of money. They should not be cutting rates right now. They should be calling on the congresses and parliaments around the developed world to take steps to deal with the economic slowdown in growth.”
He was right again in 2020 as all hell broke loose everywhere and prompted more of the policies he has been warning of since at least 2012.
And now – after 10 years – Singer is readying himself for the final victory lap, as he tells investors in his latest letter that he can’t wait to say “I told you so” having long-warned of an ugly end to the Fed’s extreme (and getting extreme-er) easy-money policies.
“We believe that hindsight will show the champion of head-smacking craziness in the American stock market to be the period playing out right now,” the 76-year-old exclaimed, adding that a “flamboyant line-up” of excesses will come back to haunt investors.
The (very visible) invisible hand behind all this excess is, in Singer’s (correct) opinion, The Fed (and the rest of the world’s central banking copycats) as he echoes Michael ‘Big Short’ Burry’s recent warnings of out of control “rampant inflation” that will shock policy makers, stock pickers and bond investors, alike.
“‘Trouble ahead’ is signaled by a rare combination of low-quality securities, staggering valuation metrics, overleveraged capital structures, a scarcity of honest profits, a desperate dearth of understanding evinced by the most active traders, and economic macro prospects that are not as thrilling as the mobs braying ‘Buy! Buy!’ seem to think,” he wrote.
Having registered annualized gains of about 13%, Elliott’s performance over 44 years suggest Singer is worth listening to as Bloomberg reports he clearly exuded frustration at what he sees as the hysteria driving everything from Bitcoin to government debt – a “return-free risk,” as his letter put it.
Specifically, Singer is not a big fan (to understate it extremely) of Bitcoin:
“Pulling out your hair is an option, though only if you have hair to spare,” the mostly bald Singer wrote.
“Hiding under the bed to avoid people who gloat about being long Bitcoin can get…tiring. Deep breathing exercises can work, but only for short periods. We continue to press on for the day when we can say, ‘We told you so.’”
In conclusion we go back to Singer’s 2012 warning.
“Nobody in America has actually seen, or most people probably can’t even contemplate, what an actual loss of confidence may look like.
If you think about some of these elements and how they might interact, you might come up with other paths of transmission or risk and pain. But I wouldn’t go about your business thinking it’s business as usual in a typical post-crisis, post bear market recovery.”
Given the chaos in Treasury markets this week, it seemed apropos.
Tyler Durden
Sat, 02/27/2021 – 17:45 - Is Anyone Else Fed Up With Dr. Fauci's Forever Moving Goalposts?
Is Anyone Else Fed Up With Dr. Fauci’s Forever Moving Goalposts?
Authored by Mike Shedlock via MishTalk,
Despite vaccines and a falling number of cases Dr. Fauci keeps moving the goalposts.
Not Yet, When?
Dr. Facuci says Vaccinated People Shouldn’t Dine Indoors or Go to the Theater Quite Yet.
“There are things, even if you’re vaccinated, that you’re not going to be able to do in society,” Fauci said on Monday during a White House COVID-19 press briefing.
“For example, indoor dining, theaters, places where people congregate. That’s because of the safety of society.“
Though vaccines can help prevent people from contracting severe cases of COVID-19, the jabs may not stop them from getting sick altogether. It’s also still unclear whether vaccinated people can be disease carriers, meaning they might spread illness to unvaccinated people in a community where vaccination is far from universal, prolonging the pandemic.
“We hope that when the data comes in, it’s going to show that the virus level is quite low and you’re not transmitting it,” Fauci said, cautioning:
“We don’t know that now. And for that reason, we want to make sure that people continue to wear masks despite the fact that they’re vaccinated.”
Early signs are looking promising that vaccinated people may not spread the virus well, but it’s still too soon to say for sure.
I understand wearing masks. I understand avoiding groups and parties. But enough already.
Double masking and telling people not to eat out even after they have been vaccinated is too much to take.
The teachers’ unions will pick up on this and play it for all it’s worth.
Addendum
I was asked about my brief teachers’ union comment above. I will explain in detail in just a bit in another post.
Meanwhile, please note Fauci falls silent following New York nursing home scandal after repeatedly praising Cuomo response.
Tyler Durden
Sat, 02/27/2021 – 17:30 - Judge "Disturbed" To Learn Google Tracks 'Incognito' Users, Demands Answers
Judge “Disturbed” To Learn Google Tracks ‘Incognito’ Users, Demands Answers
A US District Judge in San Jose, California says she was “disturbed” over Google’s data collection practices, after learning that the company still collects and uses data from users in its Chrome browser’s so-called ‘incognito’ mode – and has demanded an explanation “about what exactly Google does,” according to Bloomberg.
In a class-action lawsuit that describes the company’s private browsing claims as a “ruse” – and “seeks $5,000 in damages for each of the millions of people whose privacy has been compromised since June of 2016,” US District Judge Lucy Koh said she finds it “unusual” that the company would make the “extra effort” to gather user data if it doesn’t actually use the information for targeted advertising or to build user profiles.
Koh has a long history with the Alphabet Inc. subsidiary, previously forcing the Mountain View, California-based company to disclose its scanning of emails for the purposes of targeted advertising and profile building.
In this case, Google is accused of relying on pieces of its code within websites that use its analytics and advertising services to scrape users’ supposedly private browsing history and send copies of it to Google’s servers. Google makes it seem like private browsing mode gives users more control of their data, Amanda Bonn, a lawyer representing users, told Koh. In reality, “Google is saying there’s basically very little you can do to prevent us from collecting your data, and that’s what you should assume we’re doing,” Bonn said.
Andrew Schapiro, a lawyer for Google, argued the company’s privacy policy “expressly discloses” its practices. “The data collection at issue is disclosed,” he said.Another lawyer for Google, Stephen Broome, said website owners who contract with the company to use its analytics or other services are well aware of the data collection described in the suit. –Bloomberg
Koh isn’t buying it – arguing that the company is effectively tricking users under the impression that their information is not being transmitted to the company.
“I want a declaration from Google on what information they’re collecting on users to the court’s website, and what that’s used for,” Koh demanded.
The case is Brown v. Google, 20-cv-03664, U.S. District Court, Northern District of California (San Jose), via Bloomberg.
Tyler Durden
Sat, 02/27/2021 – 17:00 - Democrat Voters' Number One "Concern" Is Trump Supporters, New Poll Finds
Democrat Voters’ Number One “Concern” Is Trump Supporters, New Poll Finds
Authored by Steve Watson via Summit News,
A poll conducted by Echelon has found that while Republican voters are concerned with issues such as illegal immigration, lack of police resources, and high taxes, Democrat voters’ top concerns are supporters of President Trump, racism, and discrimination against LGBTQ people.
While 81% of Republican voters cited immigration as the top issue, 82% of Democrats said that ‘Trump’s supporters’ is their top issue at the moment.
Of the issues we presented to ALL respondents, the economic damage from COVID-19 is the top concern in large part because it is the most bipartisan – three-quarters of GOP and Dems are very/extremely concerned. pic.twitter.com/nhL8loHaw2
— Kristen Soltis Anderson (@KSoltisAnderson) February 24, 2021
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A further 79% and 77%, respectively cited ‘white nationalism’ and ‘systemic racism’ as the issues they are most concerned about.
This is actually pretty incredible
It also shows how effectively the Democrats/media have marginalized the Bernie Bros and other substantive leftist concerns by instead spending their time dehumanizing Trump supporters https://t.co/wHggxBDuW3
— Will Chamberlain (@willchamberlain) February 25, 2021
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Commentators immediately noted that the results highlight how the Democratic Party and the leftist media has brainwashed liberals into purely caring about identity politics over substantive issues.
It should be noted that Echelon says it created a list of “likely primary issues” for supporters of each party.
To the full sample, we did test some items that have big party gaps. But when doing a survey, you want to be mindful of “respondent fatigue” – asking people to rank 30+ issues would be A LOT. So we created a list of issues that are “likely primary issues” for each party….
— Kristen Soltis Anderson (@KSoltisAnderson) February 24, 2021
https://platform.twitter.com/widgets.js
But still, when collating the full range of issues, ‘Trump’s supporters’ was a top concern for Democrats:
Looking at the full range of issues asked of each side, Republicans still say illegal immigration and lack of police support are top concerns, while for Democrats concern about spread of COVID is top of the list, with Donald Trump’s supporters” in second. pic.twitter.com/TQgKZgQ6Jy
— Kristen Soltis Anderson (@KSoltisAnderson) February 24, 2021
https://platform.twitter.com/widgets.js
Also of note was the finding that those who identify as Trump supporters, rather then ‘party-first’ Republicans are more concerned about every issue:
When we look at the likely GOP primary issue concern broken out by whether people see themselves as “Trump supporters” or “Republican party supporters”, we see Trump supporters more concerned about pretty much everything, but especially election fraud. pic.twitter.com/WW1GQQBha3
— Kristen Soltis Anderson (@KSoltisAnderson) February 24, 2021
Tyler Durden
Sat, 02/27/2021 – 16:30
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