Jan 28

Today’s News 28th January 2021

  • Whitehead: Enemies Of The Deep State – The Government's War On Domestic Terrorism Is A Trap
    Whitehead: Enemies Of The Deep State – The Government’s War On Domestic Terrorism Is A Trap

    Authored by John Whitehead and Nisha Whitehead via The Rutherford Institute,

    “This is an issue that all Democrats, Republicans, independents, Libertarians should be extremely concerned about, especially because we don’t have to guess about where this goes or how this ends. What characteristics are we looking for as we are building this profile of a potential extremist, what are we talking about? Religious extremists, are we talking about Christians, evangelical Christians, what is a religious extremist? Is it somebody who is pro-life? [The proposed legislation could create] a very dangerous undermining of our civil liberties, our freedoms in our Constitution, and a targeting of almost half of the country.”

    – Tulsi Gabbard, former Congresswoman

    This is how it begins.

    We are moving fast down that slippery slope to an authoritarian society in which the only opinions, ideas and speech expressed are the ones permitted by the government and its corporate cohorts.

    In the wake of the Jan. 6 riots at the Capitol, “domestic terrorism” has become the new poster child for expanding the government’s powers at the expense of civil liberties.

    Of course, “domestic terrorist” is just the latest bull’s eye phrase, to be used interchangeably with “anti-government,” “extremist” and “terrorist,” to describe anyone who might fall somewhere on a very broad spectrum of viewpoints that could be considered “dangerous.”

    Watch and see: we are all about to become enemies of the state.

    In a déjà vu mirroring of the legislative fall-out from 9/11, and the ensuing build-up of the security state, there is a growing demand in certain sectors for the government to be given expanded powers to root out “domestic” terrorism, the Constitution be damned.

    If this is a test of Joe Biden’s worthiness to head up the American police state, he seems ready.

    As part of his inaugural address, President Biden pledged to confront and defeat “a rise of political extremism, white supremacy, domestic terrorism.” Biden has also asked the Director of National Intelligence to work with the FBI and the Department of Homeland Security in carrying out a “comprehensive threat assessment” of domestic terrorism. And then to keep the parallels going, there is the proposed Domestic Terrorism Prevention Act of 2021, introduced after the Jan. 6 riots, which aims to equip the government with “the tools to identify, monitor and thwart” those who could become radicalized to violence.

    Don’t blink or you’ll miss the sleight of hand.

    This is the tricky part of the Deep State’s con game that keeps you focused on the shell game in front of you while your wallet is being picked clean by ruffians in your midst.

    It follows the same pattern as every other convenient “crisis” used by the government as an excuse to expand its powers at the citizenry’s expense and at the expense of our freedoms.

    As investigative journalist Glenn Greenwald warns:

    “The last two weeks have ushered in a wave of new domestic police powers and rhetoric in the name of fighting ‘terrorism’ that are carbon copies of many of the worst excesses of the first War on Terror that began nearly twenty years ago. This New War on Terror—one that is domestic in name from the start and carries the explicit purpose of fighting ‘extremists’ and ‘domestic terrorists’ among American citizens on U.S. soil—presents the whole slew of historically familiar dangers when governments, exploiting media-generated fear and dangers, arm themselves with the power to control information, debate, opinion, activism and protests.”

    Greenwald is referring to the USA Patriot Act, passed almost 20 years ago, which paved the way for the eradication of every vital safeguard against government overreach, corruption and abuse.

    Free speech, the right to protest, the right to challenge government wrongdoing, due process, a presumption of innocence, the right to self-defense, accountability and transparency in government, privacy, press, sovereignty, assembly, bodily integrity, representative government: all of these and more have become casualties in the government’s war on the American people, a war that has grown more pronounced since Sept. 11, 2001.

    Some members of Congress get it.

    In a letter opposing expansion of national security powers, a handful congressional representatives urged their colleagues not to repeat the mistakes of the past:

    “While many may find comfort in increased national security powers in the wake of this attack, we must emphasize that we have been here before and we have seen where that road leads. Our history is littered with examples of initiatives sold as being necessary to fight extremism that quickly devolve into tools used for the mass violation of the human and civil rights of the American people… To expand the government’s national security powers once again at the expense of the human and civil rights of the American people would only serve to further undermine our democracy, not protect it.”

    Cue the Emergency State, the government’s Machiavellian version of crisis management that justifies all manner of government tyranny in the so-called name of national security.

    This is the power grab hiding in plain sight, obscured by the political machinations of the self-righteous elite. This is how the government continues to exploit crises and use them as opportunities for power grabs under the guise of national security. Indeed, this is exactly how the government added red flag gun laws, precrime surveillance, fusion centers, threat assessments, mental health assessments, involuntary confinement to its arsenal of weaponized powers.

    The objective is not to make America safe again. That has never been the government’s aim.

    Greenwald explains:

    “Why would such new terrorism laws be needed in a country that already imprisons more of its citizens than any other country in the world as the result of a very aggressive set of criminal laws? What acts should be criminalized by new ‘domestic terrorism’ laws that are not already deemed criminal? They never say, almost certainly because—just as was true of the first set of new War on Terror laws—their real aim is to criminalize that which should not be criminalized: speech, association, protests, opposition to the new ruling coalition.”

    So you see, the issue is not whether Donald Trump or Roger Stone or MyPillow CEO Mike Lindell deserve to be banned from Twitter, even if they’re believed to be spouting misinformation, hateful ideas, or fomenting discontent.

    Rather, we should be asking whether any corporation or government agency or entity representing a fusion of the two should have the power to muzzle, silence, censor, regulate, control and altogether eradicate so-called “dangerous” or “extremist” ideas.

    This unilateral power to muzzle free speech represents a far greater danger than any so-called right- or left-wing extremist might pose.

    The ramifications are so far-reaching as to render almost every American an extremist in word, deed, thought or by association.

    Yet where many go wrong is in assuming that you have to be doing something illegal or challenging the government’s authority in order to be flagged as a suspicious character, labeled an enemy of the state and locked up like a dangerous criminal.

    Eventually, all you will really need to do is use certain trigger words, surf the internet, communicate using a cell phone, drive a car, stay at a hotel, purchase materials at a hardware store, take flying or boating lessons, appear suspicious, question government authority, or generally live in the United States.

    The groundwork has already been laid.

    The trap is set.

    All that is needed is the right bait.

    With the help of automated eyes and ears, a growing arsenal of high-tech software, hardware and techniques, government propaganda urging Americans to turn into spies and snitches, as well as social media and behavior sensing software, government agents have been busily spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports aimed at snaring potential enemies of the state.

    It’s the American police state’s take on the dystopian terrors foreshadowed by George Orwell, Aldous Huxley and Phillip K. Dick all rolled up into one oppressive pre-crime and pre-thought crime package.

    What’s more, the technocrats who run the surveillance state don’t even have to break a sweat while monitoring what you say, what you read, what you write, where you go, how much you spend, whom you support, and with whom you communicate. Computers by way of AI (artificial intelligence) now do the tedious work of trolling social media, the internet, text messages and phone calls for potentially anti-government remarks, all of which is carefully recorded, documented, and stored to be used against you someday at a time and place of the government’s choosing.

    For instance, police in major American cities have been using predictive policing technology that allows them to identify individuals—or groups of individuals—most likely to commit a crime in a given community. Those individuals are then put on notice that their movements and activities will be closely monitored and any criminal activity (by them or their associates) will result in harsh penalties. 

    In other words, the burden of proof is reversed: you are guilty before you are given any chance to prove you are innocent.

    Dig beneath the surface of this kind of surveillance/police state, however, and you will find that the real purpose of pre-crime is not safety but control.

    Red flag gun laws merely push us that much closer towards a suspect society where everyone is potentially guilty of some crime or another and must be preemptively rendered harmless.

    This is the same government that has a growing list—shared with fusion centers and law enforcement agencies—of ideologies, behaviors, affiliations and other characteristics that could flag someone as suspicious and result in their being labeled potential enemies of the state.

    For instance, if you believe in and exercise your rights under the Constitution (namely, your right to speak freely, worship freely, associate with like-minded individuals who share your political views, criticize the government, own a weapon, demand a warrant before being questioned or searched, or any other activity viewed as potentially anti-government, racist, bigoted, anarchic or sovereign), you could be at the top of the government’s terrorism watch list.

    Moreover, as a New York Times editorial warns, you may be an anti-government extremist (a.k.a. domestic terrorist) in the eyes of the police if you are afraid that the government is plotting to confiscate your firearms, if you believe the economy is about to collapse and the government will soon declare martial law, or if you display an unusual number of political and/or ideological bumper stickers on your car.

    According to one FBI latest report, you might also be classified as a domestic terrorism threat if you espouse conspiracy theories, especially if you “attempt to explain events or circumstances as the result of a group of actors working in secret to benefit themselves at the expense of others” and are “usually at odds with official or prevailing explanations of events.”

    Additionally, according to Michael C. McGarrity, the FBI’s assistant director of the counterterrorism division, the bureau now “classifies domestic terrorism threats into four main categories: racially motivated violent extremism, anti-government/anti-authority extremism, animal rights/environmental extremism, and abortion extremism.”

    In other words, if you dare to subscribe to any views that are contrary to the government’s, you may well be suspected of being a domestic terrorist and treated accordingly.

    Again, where many Americans go wrong is in naively assuming that you have to be doing something illegal or harmful in order to be flagged and targeted for some form of intervention or detention.

    In fact, U.S. police agencies have been working to identify and manage potential extremist “threats,” violent or otherwise, before they can become actual threats for some time now.

    In much the same way that the USA Patriot Act was used as a front to advance the surveillance state, allowing the government to establish a far-reaching domestic spying program that turned every American citizen into a criminal suspect, the government’s anti-extremism program renders otherwise lawful, nonviolent activities as potentially extremist.

    In fact, all you need to do these days to end up on a government watch list or be subjected to heightened scrutiny is use certain trigger words (like cloud, pork and pirates), surf the internet, communicate using a cell phone, limp or stutter, drive a car, stay at a hotel, attend a political rally, express yourself on social media, appear mentally ill, serve in the military, disagree with a law enforcement official, call in sick to work, purchase materials at a hardware store, take flying or boating lessons, appear suspicious, appear confused or nervous, fidget or whistle or smell bad, be seen in public waving a toy gun or anything remotely resembling a gun (such as a water nozzle or a remote control or a walking cane), stare at a police officer, question government authority, or appear to be pro-gun or pro-freedom.

    Be warned: once you get on such a government watch list—whether it’s a terrorist watch list, a mental health watch list, a dissident watch list, or a red flag gun watch list—there’s no clear-cut way to get off, whether or not you should actually be on there.

    You will be tracked wherever you go.

    You will be flagged as a potential threat and dealt with accordingly.

    This is pre-crime on an ideological scale and it’s been a long time coming.

    The government has been building its pre-crime, surveillance network in concert with fusion centers (of which there are 78 nationwide, with partners in the corporate sector and globally), data collection agencies, behavioral scientists, corporations, social media, and community organizers and by relying on cutting-edge technology for surveillance, facial recognition, predictive policing, biometrics, and behavioral epigenetics (in which life experiences alter one’s genetic makeup).

    If you’re not scared yet, you should be.

    Connect the dots.

    Start with the powers amassed by the government under the USA Patriot Act, note the government’s ever-broadening definition of what it considers to be an “extremist,” then add in the government’s detention powers under NDAA, the National Security Agency’s far-reaching surveillance networks, and fusion centers that collect and share surveillance data between local, state and federal police agencies.

    To that, add tens of thousands of armed, surveillance drones and balloons that are beginning to blanket American skies, facial recognition technology that will identify and track you wherever you go and whatever you do. And then to complete the picture, toss in the real-time crime centers being deployed in cities across the country, which will be attempting to “predict” crimes and identify so-called criminals before they happen based on widespread surveillance, complex mathematical algorithms and prognostication programs.

    Hopefully you’re starting to understand how easy we’ve made it for the government to identify, label, target, defuse and detain anyone it views as a potential threat for a variety of reasons that run the gamut from mental illness to having a military background to challenging its authority to just being on the government’s list of persona non grata.

    There’s always a price to pay for standing up to the powers-that-be.

    Yet as I make clear in my book Battlefield America: The War on the American People, you don’t even have to be a dissident to get flagged by the government for surveillance, censorship and detention.

    All you really need to be is a citizen of the American police state.

    Tyler Durden
    Thu, 01/28/2021 – 00:00

  • We Have Some Bad News For Gamestop Shorts
    We Have Some Bad News For Gamestop Shorts

    We have some bad news for GME shorts.

    Despite the posturing that this or that hedge fund has covered its Gamestop exposure, new shorts have simply taken their place, and as Ihor Dusaniwsky, head of S3 Partners which provides daily short interest tracking in real-time notes, the short interest – after all the recent fireworks – is still a whopping 139.7%…

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    … which is actually the highest print in the past few days!

    Source: S3 Partners

    What is perhaps even more stunning is that after the borrow fee on GME shorts was around 30.6% earlier this week…

    … it has since soared to 100% and in some cases as much as 250% for new shorts (existing shorts still pay “only” 30-50% borrow) according to Dusaniwsky. This means that it is now effectively suicidal to short GME (even if one can find the loaned shorts), as the cost of carrying the short is staggering, and it is equal to the nominal short every 5 months.

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    And while the exploding cost to borrow is catastrophic, the real punchline, as we noted earlier this week, is that the primary catalyst behind the initial WallStreetBets raid in the first place – the company’s massive short overhang – has not shrunk one bit (and has actually increased). In other words, as Dusaniwsky puts it, “This has been a long-buying rally and not a short squeeze rally!Panda face.”

    Translation: the real short covering hasn’t even started yet!

    It also means that the real parabolic move higher in GME has yet to come.

    Tyler Durden
    Wed, 01/27/2021 – 23:58

  • Biden Sends B-52 Bomber Over Persian Gulf After Missile Fired On Riyadh
    Biden Sends B-52 Bomber Over Persian Gulf After Missile Fired On Riyadh

    On Wednesday The Wall Street Journal revealed that the Biden administration for the first time sent a B-52 bomber in a long range flight from the US to the Persian Gulf on Tuesday.

    It’s the first such “warning” message to Iran under the Biden White House, in continuation of similar recent moves by Trump, and the sixth such B-52 operation over the Persian Gulf in only a few months. WSJ reports:

    The B-52H Stratofortress, a long range heavy bomber, flew from Barksdale Air Force Base in Louisiana on Tuesday and was expected to make a continuous flight across Jordan, Saudi Arabia, and down the eastern Saudi coastline near the United Arab Emirates and Qatar before returning to the U.S., a senior military official said.

    Via CENTCOM

    The official said further that “Our intent is to maintain that enduring defensive posture, to deter any aggression in the region, promote regional security and assure our allies.”

    Multiple Royal Saudi Arabian Air Force F-15 jets were seen escorting the bomber in photos posted by US CENTCOM.

    The provocative flyover appears to be in response to the two latest attacks on the Saudi capital of Riyadh. On Tuesday a ‘mystery’ inbound projectile, likely a missile, exploded over Riyadh’s city center when it was reportedly intercepted by Saudi anti-air defense systems.

    It followed a prior Saturday projectile fired at the city from outside the country, widely reported to have been a drone, which also seems to have been shot down before doing any damage.

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    Yemen’s Houthis have denied being behind either attack while at the same time speculation grows over the possibility that Iran-backed militias in Iraq are to blame, as WSJ describes further:

    The coalition blamed the attack on the Houthis, who denied responsibility, and the U.S. also implied they were to blame. A previously unknown group called “True Promise Brigades” that purports to be based in Iraq distributed a statement on Telegram claiming it had targeted Yamama Palace and other sites in Riyadh in retaliation to alleged Saudi support for Islamic State.

    The inbound projectile caused all flights at Riyadh’s international airport to be grounded for hours late into the day Tuesday.

    Yemen’s Houthis have in past years launched missile attacks on both the capital and Saudi Aramco facilities, most famously in the September 2019 Abqaiq–Khurais attack. In the last weeks of the Trump administration the Houthis were designated as an official terror organization, something the Biden administration is now reviewing.

    Tyler Durden
    Wed, 01/27/2021 – 23:40

  • Most Shorted Names Soar After WallStreetBets Reopens
    Most Shorted Names Soar After WallStreetBets Reopens

    Update 745pm ET: And just like that, 1 hour after reddit locked down its notorious r/WallStreetBets forum, it has returned, and not only that but the chaos over recent events just assured that tomorrow it will have a record day in new members.

    The forum’s return came shortly after another notorious daytrader, Dave Portnoy vowed revenge for the downing of the portal, and in addition to revealing that he owns $1MM of AMC and NOK and may buy more, said that tomorrow would be the biggest day yet.

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    More importantly, however, after tumbling earlier following the news of WSB’s lockdown, the most shorted stocks have again exploded higher with GME surging from a low of $220 back to $300…

    … and AMC last trading at almost $15 after dropping as low as $11 earlier.

     

    * * *

    Update 645pm ET: The infamous r/WallStreetBets subreddit which destroyed at least one hedge funds. and even cost legendary trader Steve Cohen 10-15% in losses in January…

    • COHEN’S POINT72 LOSES 10-15% AMID HEDGE FUND LOSSES THIS MONTH

    … has “gone private”, which means that only people who are invited can join.

    The move comes just moments after we showed that today was an absolute record day for WSB, which had a whopping 800,000 people join it in one day, the equivalent of $1.1 billion in stimmy checks..

    And since it will be that much more difficult to bring new entrants to the forum, it is hardly a surprise that the most shorted stocks which exploded in recent days, are suddenly tumbling with GME down almost $100 after hours on the news…

    … and AMC is tumbling too.

    So it is over? We doubt it: while the original subreddit may well have enough critical mass to continue its bull raids for the time being, it’s only a matter of time before the members regroup and find a venue that welcomes them.

    Maybe Parler?

    To be sure, the “autists” are not happy, and have a simple message: “FUCK WALL STREET, FUCK THE SHORTS.”

    * *  *

    Update 625pm ET: Until now, the only sure way to be shut down by a silicon valley tech titan was to be a conservative website or twitter account. Not anymore: as of this evening, the wrath of the tech giants has converged with that of the largest US hedge funds, and according to The Verge, Discord has banned the server of the r/WallStreetBets subreddit.

    Discord told the Verge it did not ban the server for financial fraud (because there was none)  but rather because it continued to allow “hateful and discriminatory content after repeated warnings” which of course is not only laughable, but has become the generic excuse of Wall Street titans to shut down anyone they don’t want “polluting” the internet airwaves which it now appears a handful of billionaires decide who can and who can’t be on.

    One wonders which hedge fund – Citadel or Point72 – made a quick call to the Discord board to make sure the massive short ramps cease.

    Here is Discord’s full statement:

    The server has been on our Trust & Safety team’s radar for some time due to occasional content that violates our Community Guidelines, including hate speech, glorifying violence, and spreading misinformation. Over the past few months, we have issued multiple warnings to the server admin.

    Today, we decided to remove the server and its owner from Discord for continuing to allow hateful and discriminatory content after repeated warnings.

    To be clear, we did not ban this server due to financial fraud related to GameStop or other stocks. Discord welcomes a broad variety of personal finance discussions, from investment clubs and day traders to college students and professional financial advisors. We are monitoring this situation and in the event there are allegations of illegal activities, we will cooperate with authorities as appropriate.

    The question now is whether reddit will do the same to r/Wallstreetbets as it did to r/Donaldtrump and bans it and, if so, does it mean that any young enterprising trader is just as bad as the MAGArs in the eyes of the tech establishment.

    * * *

    Update 5:55pm ET: In a day when regulators, brokerages, and even the administration launched a full-court press to halt the marketwide short squeezes launched by Robinhood daytraders armed with stimmy checks and inspired by Reddit’s forums – because a few hedge funds complained or were put out of business – Reddit’s infamous WallStreetBets, the alleged origin of many of these bull raids, has published a response to the SEC. We present it without commentary.

    “To the SEC retards in this sub: go fuck yourself. Why don’t you start investigating why companies can shut down trading so their hedge fund buddies don’t lose money. But when people lose money it’s completely okay. Eat a dick,” r/WallStreetBets said, which has already garnered 122k upvotes. 

    Reddit users of r/WallStreetBets were apparently trashed all day by CNBC hosts and guests, with some calling average retail investors “unsophisticated.” Well, if they were so “unsophisticated,” then the question begs, how did a bunch of millennials on the Reddit forum unleash one of the biggest “mother of all short squeezes,” and during the process, blow up multiple hedge funds who were overleveraged in Gamestop short positions. 

    One Reddit user said, “SEC I have proof of malfeasance. A group of hedge funds shorted the ever-living fuck out of GME putting themselves in this position. What repercussions should they face? Or is it because they’re somehow better than retail investors they shouldn’t face any penalties? We. Like. The. Stock.” 

    “Hedge funds simply got cocky and made the incredibly idiotic move of reaching 140% shorts in a stock. If we hadn’t seen that, someone else would and the result would be the same. Because that’s obviously going to bite you in the ass. There’s nothing coordinated or sophisticated about it. It’s legit dumber than anything I’ve ever seen in this sub and I’ve been here a while,” another Reddit user said. 

    But, “what it?” Well, the following post by the so-called WSB chairman (with 190K followed), and which was liked by Elon Musk, reveals the thinking of what happens next…

    * * *

    Earlier:

    Just hours after Jen Psaki informed the world that Joe Biden is closely tracking the turmoil in the most shorted stocks…

    … The SEC released a statement Wednesday after-hours echoing Uncle Jone, that it too was closely following the insanity in the market.

    “We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets, we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants,” Acting Chair Allison Herren Lee Pete Driscoll, Director, Division of Examinations Christian Sabella, Acting Director, Division of Trading and Markets wrote in a statement. 

    While the SEC’s did not mention individual company names, it was clear that the the was referring to the monster moves in the various most shorted names, including the extensively discussed explosions in Gamestop, AMC, BlackBerry Limited and countless other shorts which r/Wallstreetbets went after in hopes of forcing short squeezes.

    GameStop’s parabolic rise – which has become a poster child of all that is wrong with this bubble market – is a clear reminder of the Dot Com bubble insanity. Even fund manager Michael Burry who was long Gamestop, called the move “unnatural, insane, and dangerous.”

    Sure enough, in a hint of what may be coming, overnight William Galvin, Massachusetts’ top securities regulator, said today that Gamestop trading could suggest something is “systemically wrong” with the market. Around midday, TD Ameritrade told clients that it would impose restrictions on certain trades involding GME, AMC and other stocks…

    … ahead of what may be a marketwide halt in trading in these names as hedge funds come crying to mommy.

    Already some industry watchers are speculating that it is only a matter of time before Reddit will be subpoenaed to explain how a bunch of teenagers destroyed a hedge fund.

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    Also earlier, the CEO of Nasdaq, Adena Friedman, suggest a halt to trading to allow big investors to “recalibrate their positions’ to combat reddit users

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    Then again, the ramp may continue for a while because after being asked explicitly on at least two occasions, uberprinter Jerome Powell refused to answer questions related to Gamestop’s parabolic rise, suggesting that the bubble is only going to get bigger.

    Tyler Durden
    Wed, 01/27/2021 – 23:30

  • Coexistence Or Cold War with China?
    Coexistence Or Cold War with China?

    Authored by Pat Buchanan via Buchanan.org,

    “The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States… does not challenge that position.”

    Thus did President Nixon, in the Shanghai Communique of 1972, accept China’s territorial claim to the island of Taiwan.

    In 1979, Jimmy Carter severed relations with Taiwan, recognized Beijing as the legitimate government and dissolved the U.S. mutual security treaty with the Republic of China on Taiwan. We ceased to be obligated to go to war to defend Taiwan.

    Fast-forward four decades to the first weekend of President Joe Biden’s administration. Saturday, China sent eight nuclear-capable bombers and four fighter planes into the air defense identification zone of Taiwan.

    Sunday, Beijing sent 16 military aircraft into the same region.

    Observing U.S. arms sales to Taiwan and visits by U.S. officials, China is issuing us a reminder:

    “You Americans are encouraging those on the island who seek independence. Not going to happen. Rather than let Taiwan go, we will fight. Taiwan is a part of China and is a red line for us.”

    Beijing is said to be seeking a face-to-face meeting with Biden.

    Why? Perhaps because incoming Secretary of State Antony Blinken in his confirmation hearings said that President Donald Trump “was right” to take a “tougher approach to China.”

    Blinken also agreed with outgoing Secretary Mike Pompeo, who had called China’s treatment of its Uighur minority “genocide,” and added that our commitment to Taiwan is “something that we hold to very strongly.”

    Under Xi Jinping, said Blinken, China seeks to “become the leading country in the world — the country that sets the norms, that sets the standards.” In short, China’s geostrategic goal is to replace the U.S.-created world order with a new world order of its own.

    Before we proceed further down this road to collision, questions need to be answered.

    To whom does Taiwan belong? If the answer is what it has been since 1972 — “Taiwan is a part of China” — then is not encouraging the 25 million Taiwanese to seek independence an “incitement to insurrection” from Beijing’s standpoint? And if China uses force to compel Taiwan to repudiate any right to independence, are we prepared to fight a war with a nuclear-armed China over the island’s political status and orientation?

    When Chinese Communists in 1950 conquered Tibet and began its ethnic and cultural cleansing of the region, what did we do?

    Basically, nothing.

    When China occupied and fortified rocks and reefs across the South China Sea what did we do?

    Basically, nothing.

    When China crushed the Hong Kong democracy protests we encouraged, and imposed a new national security law on the island’s 7 million people, what did we do?

    Basically, nothing.

    Now, Xi Jinping has bluntly told America that how China treats Tibetans, Uighurs, Christians and Falun Gong, all citizens of China, is no more the business of the United States than was our treatment of the indigenous peoples of North America the business of Imperial China.

    China’s model of political and economic development has enjoyed success in this century as an alternative to the Western model of liberal democracy.

    Beijing does not believe in untrammeled freedom of religion, or of speech, or of the press. She does not believe in choosing leaders by the ballot box.

    China is not an egalitarian society. She does not believe in the equality of all races, religions and ethnic groups. She does not celebrate diversity but fears it, seeing what ethnic diversity did to the Soviet Union, tearing it apart into 15 nations.

    She does not believe in racial quotas for advancement, but in a meritocracy that rewards loyalty and performance. And Chinese student test scores are among the highest in the world.

    While China steals intellectual property from U.S. factories in China, who moved the factories there to take advantage of cheap labor where a worker could be hired for $2 an hour?

    Beijing says any attempt to impose our “universal values” on China would amount to interference in her internal affairs. And any attempt to sever from Beijing her jurisdiction over Taiwan or the Spratly or Paracel Islands in the South China Sea will be resisted by force.

    Moreover, as none of the disputed rocks and reefs in the South and East China Seas involves any territory claimed by the U.S., and we have conceded for 50 years that Taiwan is “part of China,” why are we sending carrier battle groups into these seas and through the Taiwan Strait?

    What are we threatening?

    On Sunday, a U.S. aircraft carrier battle group, led by the USS Theodore Roosevelt sailed into the South China Sea on a “freedom of navigation” exercise, the first such operation under President Biden.

    This was the same day that those Chinese bombers and fighters flew into Taiwan’s air identification zone. We need to talk.

    Tyler Durden
    Wed, 01/27/2021 – 23:20

  • Meanwhile In China, Giant Liquidity Shortage Pushes Overnight Rates To 5 Year High
    Meanwhile In China, Giant Liquidity Shortage Pushes Overnight Rates To 5 Year High

    One day after we reported that China’s overnight money market rate jumped to the highest in 15 months amid i) continued drainage of liquidity by the PBOC and ii) a warning by a PBOC advisor that asset bubbles have formed in the stock and property markets, China’s overnight repo spiked even higher, surging to its highest since March 2015, as investor jitters over liquidity mounted due to the central bank’s accelerating withdrawals.

    The overnight repurchase rate rose 23 bps to 3% on Wednesday and a further 4bps to 3.04% on Thursday, taking the increase this week to 59 basis points.

    Such increases in January – just ahead of the liquidity-heavy Lunar New Year – are anomalous. As Bloomberg notes, “China’s money-market rates are rising fast in January, defying a seasonal pattern of decreases, amid concerns over monetary tightening.

    The seven-day repo fixing rate has risen 50bps this month, the first January to see an increase since 2011 when the rate jumped only to fall back in February. The mainland’s money rates typically tend to rise into the Lunar New Year break which begins in mid-February this year.

    The sudden spike in funding costs took place after the People’s Bank of China drained a net 100 billion yuan from the financial system on Wednesday via open-market operations, the most in two weeks, a day after removing 78 billion yuan. It then followed this up with an even bigger drain on Thursday, when it withdrew another 150bn yuan, the largest such amount since October..

    The accelerating liquidity drains – which have hammered Chinese stocks – prompted concerns among the investing community that Beijing just may be serious about its deleveraging push in 2021, a year after China injected record amount of debt into the economy to stabilize it in the aftermath of the covid pandemic.

    Investors are also waiting to see how the PBOC handles the banking system’s need for funding before the week-long Lunar New Year holiday starts Feb. 11 because individuals and companies across the country will prepare cash for gifts and travel. The central bank might offer liquidity via its one-year medium-term lending facility and match the 200 billion yuan of MLF coming due on Feb. 18 even before the holiday, said Dariusz Kowalczyk, strategist at Credit Agricole CIB.

    “Investors are preparing for a prolonged period of higher funding costs,” he said. “The PBOC has drained a lot of cash this week despite the high funding costs.” MLF operations are usually handled on the 15th of every month.

    In an attempt to ease concerns, on Tuesday PBOC Governor Yi Gang said at a panel hosted by the World Economic Forum that China won’t “prematurely” exit from its supportive monetary policies while also keeping debt risks under control. Still, financial markets were roiled after the central bank drained liquidity on Tuesday, Wednesday and Thursday and central bank adviser Ma Jun warned about asset bubbles.

    “Clearly, the market was very disappointed by the liquidity withdrawal over the past two sessions,” said Zhou Hao, an economist at Commerzbank AG. Ma’s comments also intensified concern over a faster pace of monetary policy normalization, he added.

    Meanwhile, as Chinese bankers desperately await a liquidity injection, halfway around the world, reddit “autists” are taking on some of the most respected hedge funds – and winning – because there are trillions in excess liquidity sloshing around…

    Tyler Durden
    Wed, 01/27/2021 – 23:06

  • Walmart To Build More Robo-Warehouses As Amazon Fight Intensifies  
    Walmart To Build More Robo-Warehouses As Amazon Fight Intensifies  

    It’s no secret that Walmart is gearing up for a lengthy fight against rival Amazon. 

    Walmart’s competitive advantages are their stores – and to complete last-mile deliveries, they must create local fulfillment centers  (LFC) with extensive automation to keep up with a surge in online orders. 

    Walmart’s Tom Ward, SVP of Customer Product, published a blog post on the company’s website outlining how LFCs, a modular warehouse added to an existing store, will be automated and stocked with additional items that are popular with customers. 

    Ward explains how LFCs work: 

    “Instead of an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the fulfillment center. The items are then brought to a picking workstation, where the order can be assembled with speed.

    We’ve always said personal shoppers are the secret to our pickup and delivery success, and that remains true. So, while the system retrieves the order for assembly, a personal shopper handpicks fresh items like produce, meat and seafood, and large general merchandise from the sales floor.

    Once the order is collected, the system stores it until it’s ready for pickup. This whole process can take just a few minutes from the time the order is placed to the time it’s ready for a customer or delivery driver to collect,” he wrote. 

    LFCs can store thousands of popular items, from consumables to electronics to fresh and frozen items.

    In Salem, New Hampshire, a Walmart store began an LFC pilot test in late 2019. Ward explained the “technology is impressive.” 

    He lists several reasons why LFCs are game-changing technology and will give Amazon a run for its money: 

    • More availability: We are able to pick more orders and do it quicker, creating more availability for customers.
    • Faster fulfillment: The system’s speed can allow orders to be picked up or delivered within the hour.
    • Greater efficiency: One local fulfillment center can fulfill orders for many stores, which means its benefits can be felt by customers in stores nearby.

    Ward adds some stores will be outfitted with automated drive-throughs. He said, “think of it as the ultimate convenience that allows customers and delivery drivers to drive up, scan a code, grab their order and go!” 

    In another redesign, this time within stores, Walmart reformated the inside layout to appear more like airports to make the shopping experiencing easier. 

    This decade will decide who comes out on top if that is Amazon or Walmart. 

    Tyler Durden
    Wed, 01/27/2021 – 23:00

  • US Weighing Action Against Russia For Navalny Detention: Secretary Of State Blinken
    US Weighing Action Against Russia For Navalny Detention: Secretary Of State Blinken

    A day after the Senate confirmed President Biden’s nominee, veteran diplomat Antony Blinken, as the secretary of state, Blinken gave his first press conference Wednesday afternoon.

    Revealing where Biden’s foreign policy emphasis will be over the coming months, he came out swinging against Putin (who else?) and Russia (in addition to mention of Iran and China in the course of the briefing), voicing that the US is “deeply concerned” about jailed opposition activist and politician Alexei Navalny.

    Blinken said the US administration is now mulling “actions in response to his detention in Russia,” according to Reuters. He highlighted continued concerns for Navalny’s “security and safety”.

    Via AP

    To review, Navalny is serving a 30-day jail sentence for skipping probation related to a 2014 criminal conviction. He recently returned to Moscow from Berlin where he had been recovering from an alleged nerve agent poisoning in August. He and German investigators have claimed it was part of a Russian intelligence assassination attempt on orders from Putin, with the Russian president brushing off the accusations given Navalny is “not important enough” to be a target of state security and intelligence services. Navalny is now urging his supporters to the streets in defiance of the government.

    “We have a deep concern for Mr. Navalny’s safety and security and the larger point is that his voice is the voice of many, many, many Russians and it should be heard, not muzzled,” Blinken said in his statements, also noting the US is not ruling out any punitive action on the table.

    He further said he finds it striking that the Putin government is so “frightened of one man, Mr. Navalny” – in an echo of earlier comments he made. Blinken said in the press briefing:

    “It remains striking to me how concerned and maybe even scared the Russian government seems to be of one man, Mr. Navalny.”

    He said the Biden White House is closely watching the human rights situation inside Russia, following Saturday protests where hundreds were reportedly detained in demonstrations and clashes with police which were deemed ‘unauthorized’.

    Meanwhile the Russia hawks are already talking “options”:

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    Blinken also raised other Russia-related issues being closely watched, as Reuters summarizes: “Blinken said at his first press briefing after being sworn in that the Biden administration was reviewing how to respond to actions by Russia, including the alleged use of chemical weapons in an attack on Navalny, the Solar Winds cyber attack, reports of bounties on American forces and interference in U.S. elections.”

    The day prior, President Biden had raised these issues in a phone call with Putin; however, details in terms of the Russian leader’s response were not forthcoming.

    * * *

    Here’s the full Wednesday press briefing:

    Tyler Durden
    Wed, 01/27/2021 – 22:40

  • Biden Freezes Arms Sales To Saudis & UAE, Including Large F-35 Jet Transfer
    Biden Freezes Arms Sales To Saudis & UAE, Including Large F-35 Jet Transfer

    On Wednesday the Biden administration issued a freeze of all US arms sales to Saudi Arabia and the United Arab Emirates at a moment Congressional scrutiny of America’s support to the Saudi-led coalition waging war in Yemen grows. US involvement in the war goes all the way back to the Obama administration, with Trump also in the last months of his presidency approving billions in new arms sales to the kingdom.

    In particular Lockheed Martin produced F-35 stealth fighters that were set to be transferred to the UAE the have been “temporarily” blocked along with munitions to the Saudis, among other sales. Prior reports suggested the prior Trump deal was to send as many as 50 advanced F-35 fighters to the UAE.

    The Lockheed Martin produced F35 fighter jet, via FT/dpa

    The AP cited officials who identified “that among the deals being paused is a massive $23 billion transfer of stealth F-35 fighters to the United Arab Emirates.”

    “That sale and several other massive purchases of U.S. weaponry by Gulf Arab countries had been harshly criticized by Democrats in Congress,” the report added.

    The State Department said of the “temporary pause” that it is “temporarily pausing the implementation of some pending U.S. defense transfers and sales under Foreign Military Sales and Direct Commercial Sales to allow incoming leadership an opportunity to review.”

    And Axios further details that “The sales of F-35 jets and attack drones to the UAE and a large supply of munitions to Saudi Arabia will be paused pending a review.” It added that it “signals a major policy shift from the Trump era, and may herald sharp tensions with both Gulf countries.”

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    In response the UAE appealed to the need for “interoperability” with US forces in the Gulf while underscoring the close military cooperation as a reliable partner force:

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    So far the Saudis have had no comment after the somewhat expected move, which also follows Biden previously on the campaign trail vowing to get tougher on the “pariah” state, as he called the kingdom during a debate.

    Months ago an attempt in the Senate led by New Jersey Democrat Bob Menendez to block Trump arms sales to the Saudis was narrowly defeated.

    Tyler Durden
    Wed, 01/27/2021 – 22:20

  • 20% Of The World Could Have Digital Cash In Three Years: BIS
    20% Of The World Could Have Digital Cash In Three Years: BIS

    While most traders and finance pros are distracted by the ongoing war between Wall Street and Wall Street Bets which sparked market moves and short squeezes which until last week were viewed as unthinkable, we should remember that for all its entertainment value the crusade of a few millions GenZers is a sideshow which can be shut down with the flick of a switch.

    Indeed, tonight’s main event, which saw the most heavily shorted stocks tumble the moment the r/WallStreetBets subreddit went dark (or rather “private”) only to rebound once the forum reemerged, demonstrated just how easy it is for both Silicon Valley and Wall Street to silence these upstart voices and return to market to “normal.” And all they have to do is to claim that there is “hate speech” on the forum – a truly shocking discovery within the testosterone-heavy world of male traders – as Discord did when it shut down the WSB server earlier today.

    In any case, while we all keep an eye on what Gamestop does next, we should always remember that the people in charge are those that print the money, namely the world’s central banks. And today, in all the chaos surrounding the latest most shorted meltups, there was some critical news which most missed yet which will have far greater consequences on the future of the world then where GME closes tomorrow.

    According to a survey conducted by the central banks’ central bank, the Basel-based Bank for International Settlements (profiled in “Meet The Secretive Group That Runs The World“), central banks representing one-fifth of the world’s population are likely to issue their own digital currencies in the next three years.

    The push for digital currencies – which as we – and DoubleLine – explained last year is the final move in the radical overhaul to the established monetary system and which will unleash far higher inflation – comes as authorities look to fend off the threat to their money-printing powers from bitcoin and efforts linked to Big Tech such as the Facebook-backed Diem, formerly Libra. In fact, just today, Agustin Carstens, the general manager of the BIS – condemned bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster” and said it was “piggybacking” on mainstream institutions and becoming a “threat to financial stability”, an attempt to demonize Bitcoin as if it is somehow worse than central banking itself.

    At the same time, central banks who have taken interest rates negative are looking at whether digital cash could be used to help implement the radical policy. Because in a world with trillions in paper money, the easiest way to circumvent punitive interest rates is simply to hold cash in one’s safe. Digital currencies would promptly do away with that.

    As Reuters reports, Wednesday’s BIS survey of 65 central banks showed 86% were exploring the benefits and drawbacks of digital currencies, with some testing possible designs. Translation: we are just years away from global implementation.

    And while the survey showed that emerging and developing economy central banks are more likely than those in major economies to issue central bank digital currencies (CBDCs), the reality is that it is precisely the developed nations whose central banks are desperate for “blockchained” control over currency in circulation, and its digitalization, especially when another massive stimulus has to be unleashed. As we explained previously, such a digital deposit of dollars – which would circumvent the Treasury (and Congress) – by the Fed, is precisely what central banks hope to enact after the next financial crisis in order to spark a reflationary wave.

    Indeed, as the survey also showed a number of bigger countries have also been testing the waters, with China the most advanced.

    A fifth of central banks from major economies that responded to the survey said issuing digital currencies was “possible” in the short or medium term, up from only one last year. Expect this number to rise to 100% in the coming months.

    Meanwhile, as we reported last year, the People’s Bank of China expanded a trial of a digital renminbi to its three largest urban regions, which together contain 400 million people, in August. ECB President Christine Lagarde said last week her bank was pushing on with its work on a digital euro, Sweden’s E-Krona is progressing and even Jerome Powell has said the Fed is carrying out experiments for a digital dollar.

    To be sure, there are still hurdles to overcome, first and foremost the widespread resistance that would emerge once central banks declare paper currency void.

    The BIS survey also showed that over a quarter of central banks do not currently have the authority to issue a CBDC and about 48% remain unsure, although both those numbers can easily move higher if the need was there. Separately, around 60% of banks see themselves as unlikely to issue any type of digital currency in the short or medium-term.

    As a whole, though, “central banks are moving into more advanced stages of CBDC engagement, progressing from conceptual research to practical experimentation,” the survey said.

    And while we wait for the catalyst that moves the global economy into a digital payment format, last October the Bahamas became the first country to launch a general purpose CBDC, known as the Sand Dollar. Many others will follow suit.

    Tyler Durden
    Wed, 01/27/2021 – 21:57

  • FDA Issues "Import Alert" On Potentially Deadly Mexican Hand Sanitizer 
    FDA Issues “Import Alert” On Potentially Deadly Mexican Hand Sanitizer 

    The US Food and Drug Administration (FDA) issued a rare “import alert” Tuesday on alcohol-based hand sanitizers originating from Mexico that could potentially be hazardous to the health and safety of US consumers. 

    Last summer, the FDA began to issue warnings for consumers about counterfeit hand sanitizers from Mexico. Since the notice, an analysis completed by the agency found 84% of the hand sanitizers imported from the country were not in compliance with US standards. 

    Even though many of the products “were labeled to contain ethanol (also known as ethyl alcohol) but tested positive for methanol contamination, methanol, or wood alcohol, is a substance that can be toxic when absorbed through the skin and life-threatening when ingested,” the FDA statement read. 

    The import alert has allowed the FDA to heavily scrutinize and detain hand sanitizer shipments from Mexico if need be. 

    “Consumer use of hand sanitizers has increased significantly during the coronavirus pandemic, especially when soap and water are not accessible, and the availability of poor-quality products with dangerous and unacceptable ingredients will not be tolerated,” said Judy McMeekin, Pharm.D., FDA Associate Commissioner for Regulatory Affairs. 

    McMeekin continued: “Today’s actions are necessary to protect the safe supply of alcohol-based hand sanitizers. We will continue to work with our stakeholders to ensure the availability of safe products and to communicate vital information with the health and safety of US consumers in mind.” 

    The FDA warned the potentially deadly Mexican hand sanitizer could cause “nausea, vomiting, headache, blurred vision, permanent blindness, seizures, coma, permanent damage to the nervous system or death.”

    What needs to be asked is if nefarious actions by entities in Mexico purposely manufactured deadly hand sanitizer to poison Americans?

    Tyler Durden
    Wed, 01/27/2021 – 21:40

  • Biden Signs Executive Order To Ban The Term 'China Virus'
    Biden Signs Executive Order To Ban The Term ‘China Virus’

    Authored by Steve Watson via Summit News,

    The latest of Joe Biden’s THIRTY SEVEN executive orders signed in the first week of his presidency states that the term ‘Chinese virus’ or ‘China virus’ is now banned.

    Yes, this is real.

    The White House website confirms that Biden signed this EO.

    CBS News reported ‘Biden to address racism toward Asian Americans during pandemic with executive action’.

    The report notes that “The Biden executive order is also expected to direct federal agencies like the Department of Health and Human Services (HHS) to examine whether there are xenophobic references like “China virus” in any existing policies, directives or government websites published by the Trump administration.”

    NBC News lists all the executive actions Biden has instigated thus far, with the last being the ban on the term ‘China Virus’. The report notes that “additionally, the order directed the attorney general to work to prevent discrimination and hate crimes.”

    Given that literally anything is now being touted as a ‘hate crime’, that could mean banning or canceling absolutely everyone and everything.

    As we noted earlier, Biden admitted back in October that anyone who legislates by executive order should be considered ‘a dictator’.

    Biden appears not to know what he is actually signing, and can barely hold the pen:

    After managing to stuff the pen in his pants, Biden then babbled on about the wearing of face masks, for which he has already issued multiple executive mandates.

    Biden said that a Congressman told him to “kiss my ear, I’m not wearing a mask”.

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    Tyler Durden
    Wed, 01/27/2021 – 21:20

  • US COVID Cases Tumble Across The West & South
    US COVID Cases Tumble Across The West & South

    In the last few days – really since the BIden inauguration – we have seen declarations of victory over covid across the board, from the likes of Dr. Fauci who yesterday said that coronavirus infections may be about to hit a “plateau“, to Wall Street, where Bank of America yesterday declared “The Beginning Of The End Of The COVID Crisis.” Then, last week, we asked if it was “almost over” when the US saw a record one-day drop in covid hospitalizations.

    Today, we got further confirmation that the inauguration of Biden was magically just the event that was needed to put covid in the rear-view mirror: as Bloomberg reports, almost every state in the West reported cases falling or flat Tuesday, and every region in the US has seen its seven-day average drop at least 20% since Jan. 12.

    When was the peak day? Why just around the day Joe Biden walked into the White House.

    Some states, like California and Oregon, saw their numbers drop by more than one-third in the course of the past week. Such improvements inspired California Gov. Newsom to ease social-distancing measures earlier this week. The relaxed policies, combined with more-contagious strains gaining traction in the state, could lay the groundwork for numbers to spike again.

    Among US regions, the South, where the seven-day average ticked down 24% over the last two weeks, improved the least. The significant decrease, which has lasted longer than any since the summer, came off a high peak. The South continues to see the highest caseload, and new infections there accounted for half the national total Tuesday. Numbers this month may also be overstated, reflecting catch.

    Tyler Durden
    Wed, 01/27/2021 – 20:53

  • Biden Chief Of Staff Offers Support For Teachers' Unions Refusing To Reopen Schools
    Biden Chief Of Staff Offers Support For Teachers’ Unions Refusing To Reopen Schools

    Authored by Zachary Stieber via The Epoch Times,

    President Joe Biden’s chief of staff on Tuesday backed teachers’ unions that are refusing to return to schools for in-person learning, contradicting studies that show little virus transmission is taking place inside schools.

    Centers for Disease Control and Prevention (CDC) officials have repeatedly said it’s safe to reopen schools. Former Director Robert Redfield said last year schools never should have shut down. Officials said Tuesday in a journal article that “there has been little evidence that schools have contributed meaningfully to increased community transmission” of the virus, which causes COVID-19.

    But teachers’ unions across the United States are refusing to resume in-person learning, claiming teachers would be in danger.

    In the most high-profile case, the Chicago Teachers Union is battling with the city of Chicago, which attempted to resume in-person classes on Monday. The union claims conditions aren’t right and in a blog post on Tuesday, urged its members to work from home on Wednesday. If the city retaliates, it said, a strike will be held.

    Biden campaigned on dealing with the CCP virus pandemic. He vowed to spearhead the reopening of schools.

    Asked why so many public schools remain closed, his chief of staff Ron Klain said it was a funding issue.

    Teachers Adrienne Thomas (L) and Irene Barrera set up their computers and materials for their virtual classes outside of Suder Montessori Magnet Elementary School in solidarity with pre-K educators forced back into the building in Chicago, Ill., on Jan. 11, 2021. (Anthony Vazquez/Chicago Sun-Times via AP

    “That’s why the president of the United States sent a plan to Congress even before he took office to make the investments you need to make the schools safe,” Klain said during an appearance on CNN’s “Erin Burnett OutFront,” referring to Biden’s $1.9 trillion proposal that includes a number of measures such as a minimum wage hike.

    Biden, in remarks at the White House on Tuesday, called for Congress to pass the proposal “to help schools and businesses reopen.”

    A study published Tuesday showed few CCP virus outbreaks related to classroom settings being seen in rural schools in Wisconsin that reopened. But those schools received “sizable grants” that enabled them to set small classroom sizes and implement other safety measures, Klain argued.

    “In other states, we haven’t seen those kinds of investments. President Biden has sent a plan to Congress that will make sure that the majority of our schools can be reopened in 100 days. We need Congress to pass that plan so that we can do the kind of things you need to do so that the schools can be safe, so the students can be safe, so the teachers can be safe. Sadly, it costs money,” Klain said.

    When the host pushed back and pointed to Chicago, asking why the union seemed to be going against what studies show, he added:

    “I don’t think that teachers’ unions are overruling studies. I think that what you’re seeing [is] that schools haven’t made the investments to keep the students safe. I mean, again, the Wisconsin study were classrooms of 12 on average. So that requires a lot more classrooms, a lot more teachers, or, you know, other kinds of arrangements to get them small, podding students very carefully.”

    “So we need to do the things to open safely. Most of the teachers I talk to, they want to be back in the classroom. They just want to know that it’s safe and we as a country should make the investments to make it safe,” Klain added.

    Tyler Durden
    Wed, 01/27/2021 – 20:40

  • Did America's Anti-Cop Movement Lead To Largest Homicide Increase In US History?
    Did America’s Anti-Cop Movement Lead To Largest Homicide Increase In US History?

    Did America’s ‘defund the police’ movement result in the largest percentage increase in homicides in US history? Heather Mac Donald, a fellow at the Manhattan Institute and author of “The War On Cops” makes a strong argument that it likely did.

    In a Sunday Wall Street Journal op-ed, Mac Donald notes that 2020 ‘likely saw the largest percentage increase in homicides in American history,’ noting that murder was up almost 37% across a sample of 57 large and medium-size cities. According to preliminary figures, “at least 2,000 more Americans, most of them black, were killed in 2020 than 2019.”

    And while the establishment media is largely blaming the pandemic for the spike, Mac Donald says the chronology doesn’t support that assertion – and President Biden’s criminal-justice policies stand to exacerbate the ongoing crime wave while ignoring its causes.

    The local murder increases in 2020 were startling: 95% in Milwaukee, 78% in Louisville, Ky., 74% in Seattle, 72% in Minneapolis, 62% in New Orleans, and 58% in Atlanta, according to data compiled by crime analyst Jeff Asher. Dozens of children, overwhelmingly black, were killed in drive-by shootings. They were slain in their beds, living rooms and strollers. They were struck down at barbecues, in their yards, in malls, in their parents’ cars, and at birthday parties. Fifty-five children were killed in Chicago in 2020, 17 in St. Louis, and 11 in Philadelphia. In South Los Angeles alone, 40 children were shot, some non-lethally, through September. –WSJ

    The MSM, such as the St. Louis Post-Dispatch, suggested that the increase is due to the “economic, civic and interpersonal stress” caused by the COVID-19 pandemic. Chicago Mayor Lori Lightfoot similarly blamed pandemic-related “frustration, anger … trauma and mental health challenges.” 

    However, this doesn’t square with the fact that crime actually fell during the first few months of the pandemic lockdowns – both domestically and abroad, only to reverse itself in May in the United States, “thanks to a surge in drive-by shootings.”

    On May 31 alone, 18 people were murdered in Chicago – the city’s most violent day in 60 years according to Paul Cassell, a law professor at the University of Utah. Elsewhere, American cities saw ‘similar spikes in mayhem, all tied to the street violence unleashed by the death of George Floyd,” a black man who died while in custody of the Minneapolis PD on May 25 after an officer knelt on his neck for over eight minutes, while having fentanyl and methamphetamine in his system – and being COVID-positive – at the time of his death.

    As Mac Donald writes, “The political and media response to Floyd’s death amplified the existing narrative that policing was lethally racist,” adding “The ensuing riots received little condemnation from Democratic leaders and a weak response from the criminal-justice system.“

    Since Floyd’s death, police have faced a ‘poisonous environment,’ having been shot in the head, firebombed, and assaulted with lethal projectiles. Those who attempt to provide aid in the field risk being pelted with rocks and bottles.

    Los Angeles police officers shot in ambush-style attack

    One Oakland, California officer who has arrested ‘dozens of known murderers and gang members’ told Mac Donald that he’s scared for the first time, “not because the criminals are necessarily more violent, even though they are,” but because if he has to use force on a suspect, he stands to lose his job, his liberty or his life. A “simple cost-benefit analysis” would suggest the safest course of action for officers is to simply recall to calls for service and collect a paycheck.

    “All cops now understand this,” the officer said.

    One veteran Chicago detective said “Every day you have to decide whether to get out of your patrol car and do something or do nothing,” adding that if anyone attempts actual police work, they may end up in jail or without a job if things go sideways.

    “Proactive police work is dead,” said Police Lt. Bob Kroll of Minneapolis, where police stops fell by more than 50% over the summer. Elsewhere, such as Philadelphia, New York, Los Angeles, Oakland, Chicago and elsewhere, the number of police-civilian contacts have plummeted.

    Meanwhile, anti-gang units and other specialty units across the country which got guns off the street were disbanded due to having a ‘disparate impact on African-Americans,’ while police chiefs and prosecutors alike have refused to enforce low-level ‘quality-of-life’ laws for the same reason.

    As a result, “More gang members are carrying guns, since their chances of being stopped are slim. They are enthusiastically killing each other and innocent bystanders out of opportunism, not economic deprivation or existential angst.“

    Meanwhile, 2020’s violence has only accelerated into the new year – with shootings in South Los Angeles jumping 742% in the first two weeks of the year, while Oakland homicides were up 500% and shootings up 126% through Jan 17. Murders in New York have jumped 42% and shooting victims 15% during the same period, while carjackings in Chicago are up 135% in Chicago.

    On Jan. 16, a woman was pulled from her car in Aurora, Ill., and shot in the back by carjackers who had already stolen two vehicles earlier that day. Four other Chicago suburbs were hit that weekend. In Chicago proper, there have been 144 carjackings through Jan. 21, with 166 guns recovered. –WSJ

    President Biden, of course, is fanning the anti-cop flames – arguing during the campaign without justification that African-Americans ‘rightly feared that their loved ones could be killed by a cop every time they stepped outside.’ Now, his administration’s criminal-justice blueprint aims to get rid of racial disparities in law enforcement – which would eliminate much of law enforcement itself.

    Read the rest of the op-ed here.

    Tyler Durden
    Wed, 01/27/2021 – 20:20

  • Florida Man Arrested Over 2016 Election Memes Designed To "Trick" Hillary Voters
    Florida Man Arrested Over 2016 Election Memes Designed To “Trick” Hillary Voters

    A 31-year-old Florida man was arrested in West Palm Beach on Wednesday on federal charges that he conspired with several other people to use memes and social media platforms to trick Hillary Clinton voters into voting via text message, and that voting for Hillary would mean people’s daughters would be drafted to fight establishment resource wars under a Clinton presidency.

    Mackey’s “Ricky Vaughan” avatar

    Douglass Mackey, a.k.a. “Ricky Vaughn,” faces up to 10 years in prison for ‘spreading election disinformation’ using several Twitter accounts, one of which had approximately 58,000 followers before Twitter suspended him on November 2, 2016.

    According to the Biden Department of Justice:

    “Starting in at least 2015, MACKEY participated in numerous Group DMs. These groups, which at times included dozens of individuals, and at times had overlapping membership, served as forums for the participants to share, among other things, their views concerning how best to influence the Election. Among other things, MACKEY and the members of these groups used the Group DMs to create, refine and share memes and hashtags that members of the groups would subsequently post and distribute.“

    One of the memes featured a picture of a black woman accompanied by the text “Avoid the line. Vote from home. Text ‘Hillary’ to 59925. Vote for Hillary and be part of history.”

    BuzzFeed News reported sending a text to the number, to which Hillary Clinton’s campaign responded “The ad you saw was not approved by iVisionMobile OR Hillary for America in any way. To opt-in to the real HFL list, text HFA to 47246.”

    According to the indictment, at least 4,900 people texted Hillary’s first name to the number.

    We can’t help but wonder if this Twitter user will also be arrested for her nearly identical November 6, 2020 election video aimed at tricking Trump voters?

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    Mackey also promoted another meme campaign before the election which was organized across several image board and social media platforms which conveyed the message that a vote for Clinton was a vote to send people’s daughters to war.

    Mackey is accused of conspiring with at least four other people – one of whom was identified as “Baked Alaska,” real name Tim Gionet, who was arrested earlier this month by the FBI for his involvement in the Jan. 6 Capitol riot.

    Needless to say, conservatives need to watch what they say – or the opposition DOJ may come after you too for obvious political satire.

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    Tyler Durden
    Wed, 01/27/2021 – 20:00

  • Most Shorted Stocks Update: Here Come The Microcaps
    Most Shorted Stocks Update: Here Come The Microcaps

    Late on Friday, in what could be the most profitable post in our 12 year history, we hinted (since we are not “advisors”) to all those who had missed what we thought at the time was the “unprecedented” move in GME stock (which in retrospect was merely an appetizer to the main course which has since sent the stock 6x higher to $385 today) to look at all the other most shorted small cap companies in the Russell 3000 – specifically those with a short interest at 50% or more of float listed below….

    … and buy an equal-weighted basket of these, to wit:

    For those who wish to gamble their next stimmy check and frontrun the next reddit-raid, the best move would be to buy equal amounts of the 10 companies (ex GME) and just wait for the short squeeze panic to unroll. Yes, there is a risk that the entire stimmy will be lost, but that would require logic and fundamentals to matter again… and we just don’t see that happening any time soon.

    Just three trading days later, this basket has more than tripled in value. To all those who put it on, congratulations. 

    Of course, since then this trade has blown up, and in addition to just the most shorted stocks listed above we now know that at least one more hedge fund – Maplelane Capital – in addition to Melvin Capital (which blew up and only a bailout from Citadel and Point72 prevented a disaster), has been dragged into the fray, after we published its publicly disclosed puts last night, which has given retail traders an even broader universe of companies to squeeze.

    Which has brought up an interesting point: when looking at the most shorted names – based on some screening metric, like Short Interest as a % of Float for example – it depends which data source once uses. For example, in the table above we used CapitalIQ, a very useful service for doing quick screens.

    So to extend the possible list of short squeezes we decided to rerun the same screen of most shorted companies (this time without a market cap limit) but using Bloomberg instead of CapIQ.

    The results were interesting: while most companies from the two screens overlapped – including GME, BBY, ANC, FIZZ, DDS, GOGO, SRG and so on, there were also some even smaller companies that we never noticed initially…

    …. such as Saddle Ranch Media (SRMX) – whose stock costs one-hundredth of a nickel (probably for good reasons) and which “is a diversified media and entertainment company operating three divisions: Saddle Ranch Digital, Saddle Ranch Film, and Saddle Ranch TV”, and KYN Capital Group (KYNC) – a “capital-finance leasing company”  and both of which are pink sheet, microcap companies – the first has a market cap of just $9MM and, according to Bloomberg, a short-to-float ratio of 129%, or just below that of Gamespot…

    … while KYNC is a $15MM microcap, which according to BBG has an even more ridiculous 399% SI/Float ratio.

    As a note: these are certainly “worthless” stocks and are trading where they are trading for a reason… but as the events in the past few days have shown, none of that actually matters in a bubble where the only thing that does matter is flow of capital.

    Which begs the question: as the dash for (shorted) trash continues, and with r/wallstreetbets ravaging the usual “most shorted” suspects within the small cap Russell 3000 universe, is it about to move to the micro-cap pink sheets, where liquidity is even more non-existant and one squeeze raid can send a stock orders of magnitude higher than ever GME, and make anyone an overnight millionaire?

    We hope to find out shortly.

    Tyler Durden
    Wed, 01/27/2021 – 19:44

  • The Next Melvin? Maplelane Loses 33% On Shorts This Month, Steve Cohen Down 15%
    The Next Melvin? Maplelane Loses 33% On Shorts This Month, Steve Cohen Down 15%

    Yesterday, in the aftermath of the spectacular collapse of Melvin Capital which only exists because Citadel’s Ken Griffin and Point72’s SAC’s Steve Cohen gave it $2.75BN to pay for a margin call, we speculated that the option heavy, short-focused Maplelane Capital (established in 2010 by a former PM at the disgraced tech-focused hedge fund Galleon) and was full to the gills with puts on names that had exploded in recent days, could be the next major hedge fund to blow up.

    Today, Bloomberg read our article and reported that – as we expected – “Maplelane Capital, a $3.5 billion stock hedge fund, lost about 33% this month through Tuesday in part because of a short position on GameStop Corp., according to investors.”

    While we didn’t know the exact number, it’s clear that it would be bad.

    What follows is speculation that despite the massive loss, “the firm significantly altered its portfolio in recent weeks, adjusting risk, one of the people said, asking not to be identified because the information isn’t public. Those changes helped protect against further losses, and the firm has no liquidity or margin issues.”

    Right… a 33% drop and no liquidity or margin issues, is their Prime Broker the Federal Reserve, or god?.

    And even if that is right, we can’t wait to see the inbound redemption request faxes from delighted LPs who just lost a third of their capital which should assure that this particular hedge fund does not reincarnate a third time.

    Meanwhile, reporting something we did not know but certainly speculated, Bloomberg also said that Steve Cohen’s $19 billion Point72 Asset Management “lost 10% to 15% so far this month as a growing number of hedge funds tally losses from retail investors’ attacks on popular positions.” And this after Cohen plowed $750MM in Melvin Capital to make sure that his previous investment in his former employee, Gabe Plotkin, wasn’t wiped.

    Cohen’s loss underscores the potential for pain to spread after investors using chat rooms and social media set out to target some hedge fund bets. Point72 already had about $1 billion at Melvin, which as of Tuesday had lost more than 30% so far this year.

    Yes: one of the most legendary hedge funds on Wall Street, the firm that was the inspiration for “Billions”, lost almost a sixth of its value because of a unprecedented raid by a ragtag band of teenage “autists” who showed the world just how much power and how much damage countless DDOS-type attacks on a handful of hedge funds by millions of individual investors all armed with stimmy checks – who are irrelevant alone but so powerful combined – can do.

    So much damage, in fact, that the powers that be found it necessary to first shut down the discord server, and then give them a permanent time out because one more hedge funds – perhaps Steve Cohen himself – complained.

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

    And then there’s this:

    • *SUNDHEIM’S $20 BILLION D1 CAPITAL LOSES ABOUT 20% THIS MONTH: BBG

    We can almost see how the 3 million WallStreetBets “autists” surpassed conservatives to become society’s #1 enermy…

    Tyler Durden
    Wed, 01/27/2021 – 19:33

  • Audit Finds 4 Million Californians May Have To Repay COVID Jobless Benefits
    Audit Finds 4 Million Californians May Have To Repay COVID Jobless Benefits

    A new audit of California’s Employment Development Department (EDD) finds the agency was unprepared and had ineffective management to handle the surge in jobless claims during the virus pandemic. 

    In September, the Joint Legislative Audit Committee ordered State Auditor Elaine Howle to conduct an in-depth audit into EDD following a tidal wave of abuse reports. 

    One of the most notable abuses was rapper Fontrell Antonio Baines, 31, who fraudulently collected $1.2 million in EDD claims. He even detailed the EDD scam in a rap video. 

    State lawmakers had criticized the agency for massive backlogs that delayed claims, along with its failure to prevent widespread fraud. 

    “Although it would be unreasonable to have expected a flawless response to such a historical event, EDD’s inefficient processes and lack of advanced planning led to significant delays in its payment of [unemployment insurance] claims,” Howle’s letter said, which was addressed to the governor and lawmakers. 

    Howle found at least half of the claims submitted online to EDD could not automatically process between March and September and were processed manually. 

    “As a result, hundreds of thousands of claimants waited longer than 21 days — EDD’s measure of how quickly it should process a claim — to receive their first benefit payments,” Howle said. “EDD has begun to modify its practices and processes to increase the rate at which it automatically processes online claims, but the automation it has gained during the pandemic is not fully sustainable.”

    As the backlog soared during the pandemic and internal chaos at EDD erupted, the agency relaxed eligibility rules to speed up claims distribution. This may have resulted in millions of people who shouldn’t have received claims or were overpaid. Now EDD is deciding how these folks will repay the jobless benefits they got during the pandemic.

    Around 2.4 million people who received jobless benefits might have been ineligible, and 1.7 might have been overpaid, totaling more than 4 million people might have to repay the state government. 

    “That could have significant consequences for claimants,” the audit said.

    In December, EDD flagged 12.7 million eligibility issues affecting 2.4 million people. To review the millions of issues, it would take the agency 3 million hours of work to resolve just half of the claims. 

    California Labor Secretary Julie Su said this week that the state paid out $11.4 billion in fraudulent claims last year, representing about 10% of the $114 billion in benefits paid since March.

    Tyler Durden
    Wed, 01/27/2021 – 19:00

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