Jul 28

Today’s News 28th July 2024

  • Will India Supplant China As The Leader Of The Incipient Non-Western Peace Process On Ukraine?
    Will India Supplant China As The Leader Of The Incipient Non-Western Peace Process On Ukraine?

    Authored by Andrew Korybko via substack,

    India’s WION cited unnamed diplomatic sources to report on Friday that Prime Minister Modi is planning to visit Kiev at the end of August. This was surprising considering that India summoned the Ukrainian Ambassador in mid-July to complain about Zelensky publicly insulting Modi after the latter visited Russia. It was analyzed here that Ukraine risked losing the support of the Global South after attacking the leader of its most populous country, but then something major happened to change Delhi’s calculations.

    Ukrainian Foreign Minister Kuleba visited Beijing, which this preview here foresaw as a signal that his country is semi-serious about resuming peace talks with Russia. That insight was proven correct after he said that his country is ready for this but added that it won’t be forced into anything either. Russian Foreign Ministry spokeswoman Zakharova was skeptical, but Kremlin spokesman Peskov was less so, instead pointing to the political and legal obstacles that would have to be resolved before this happens.  

    In any case, the world interpreted Kuleba’s words as a newfound willingness to entertain the resumption of peace talks with Russia, which was hitherto taboo for his side and its foreign supporters to talk about. From India’s perspective, the possibility of China organizing a Brazilian-fronted non-Western peace process before and/or during the G20- in Rio would be a nightmare come true since it would result in Russia becoming diplomatically indebted in China, which could eventually lead to trouble for India.

    Russia’s recently recalibrated Asian balancing act, which readers can learn more about here and here, was crowned by Modi’s visit to Moscow but now India has reason to worry that all this progress might be reversed if China calls in its diplomatic debt and gets Russia to distance itself somewhat from India. It’s no secret that China and India are embroiled in a fierce border dispute, so it’s not unforeseeable that Beijing might lean on Moscow to decelerate and ultimately cut off the supply of military spares to Delhi.

    India is disproportionately dependent on Russian equipment so that scenario could instantly cripple its deterrence capabilities vis-à-vis China and thus force it into accepted a lopsided deal for resolving their dispute under the pain of war if it refuses. To be absolutely clear, there aren’t any credible indications that Russia would bend to China’s speculative demand to jointly blackmail India via complementary military means, but it can’t confidently be ruled out by responsible Indian policymakers either.

    That being the case, it naturally follows that the most effective way to preemptively thwart this worst-case scenario is for India to make a play for replacing China as the leader of the incipient non-Western peace process on Ukraine, ergo the reason why Modi might soon visit Kiev. From Russia’s perspective, it would be more ideal for India to mediate a resolution to this conflict than for China to do so since its established balancing/pragmatic policymaking faction wants to avoid diplomatic indebtedness to Beijing.

    Likewise, the US would also prefer for India to play this role instead of China since the latter is its systemic rival in the New Cold War, hence why Washington is unlikely to let Kiev participate in any Chinese-organized but Brazilian-fronted non-Western peace process anyhow. Nevertheless, Kiev might also “go rogue” to an extent by still taking part in such events, which its leadership might envisage leveraging to get more aid from the US and have it rescind all existing restrictions on the use of its arms.

    Even if that happens, Ukraine would be unable to agree to anything meaningful without the US’ approval though seeing as how it militarily depends on American-led NATO, so there are limits to what could come from its participation in such Chinese-organized but Brazilian-fronted events. By contrast, the US would have no objections to Ukraine taking part in Indian-led ones, especially since this could serve to help the US and India “reset” their troubled ties by cooperating to end this globally significant conflict.

    In the same vein, Ukraine and India could also “reset” their ties too, which unexpectedly worsened after Zelensky insulted Modi. If his country is truly serious about resuming peace talks with Russia and has American approval for this, then India could promptly mediate between them given its special and privileged strategic partnership with Russia. It would be a win-win for India, the US, Ukraine, and Russia if Modi assumes this role, but a lost diplomatic opportunity for China, which won’t give up its plans easy.

    Tyler Durden
    Sat, 07/27/2024 – 23:20

  • DOJ Urges Court To Reject TikTok Lawsuit Challenging Divest-Or-Ban Law
    DOJ Urges Court To Reject TikTok Lawsuit Challenging Divest-Or-Ban Law

    Authored by Aldgra Fredly via The Epoch Times,

    The U.S. Department of Justice (DOJ) has asked an appeals court to dismiss a lawsuit filed by TikTok seeking to block a new U.S. law that could lead to a nationwide ban on the video-sharing app.

    President Joe Biden signed the new law in April, requiring either the sale of the app by its Chinese parent company, ByteDance, by next year or face its removal from app stores and web-hosting services.

    TikTok filed a lawsuit in May challenging the constitutionality of the new law on the grounds that the U.S. government infringed the First Amendment rights of the company and its users in the United States.

    In a brief filed to the federal appeals court on July 26, the DOJ raised concerns over the national security threat posed by TikTok, noting that the app collects “vast swaths” of sensitive data from its 170 million U.S. users.

    “That collection includes data on users’ precise locations, viewing habits, and private messages—and it even includes data on users’ phone contacts who do not themselves use TikTok,” it stated.

    The DOJ argued that the ruling Chinese Communist Party (CCP) in China could potentially use its robust authority to gain access to U.S. consumer data and the algorithm owned by ByteDance.

    “Given TikTok’s broad reach within the United States, the capacity for China to use TikTok’s features to achieve its overarching objectives to undermine American interests creates a national-security threat of immense depth and scale,” it stated.

    The DOJ said the Chinese regime could “covertly control” TikTok’s algorithm to influence the content that U.S. users receive “for its own malign purposes,” such as promoting disinformation and exacerbating social divisions.

    “Among other things, it would allow a foreign government to illicitly interfere with our political system and political discourse, including our elections,” the DOJ stated.

    The DOJ claimed that employees of TikTok and ByteDance often engage in a practice called “heating,” in which certain videos are manually promoted to achieve a certain number of views.

    The department warned that this functionality could be “a powerful tool” for manipulating public discourse and public perceptions of events.

    The DOJ also accused TikTok of misapplying the First Amendment. It argued that the new law was aimed at “national-security concerns unique to TikTok’s connection to a hostile foreign power, not at any suppression of protected speech.”

    “They largely dismiss the divestment option—under which ByteDance’s American affiliate could continue engaging in these activities on the platform—as infeasible, in significant part because TikTok’s U.S. operations are currently interwoven with operations in China and because China will not permit the export of the proprietary recommendation algorithm,” it stated.

    A TikTok spokesperson said the DOJ’s brief does not alter “the fact that the Constitution is on our side,” reiterating that the new law would violate the First Amendment by silencing its users’ voices.

    “As we’ve said before, the government has never put forth proof of its claims, including when Congress passed this unconstitutional law,” the spokesperson said in an emailed statement to The Epoch Times.

    “Today, once again, the government is taking this unprecedented step while hiding behind secret information. We remain confident we will prevail in court,” the spokesperson said.

    The new law sets the initial deadline for a TikTok sale by January 2025, and President Biden can decide to extend the deadline by another three months to allow the deal to be completed.

    TikTok has maintained that it has not and will not share U.S. user data with the CCP. But according to China’s counterespionage law, ByteDance must hand over data on U.S. users if requested.

    Tyler Durden
    Sat, 07/27/2024 – 22:45

  • Canada Revokes Jewish National Fund's Charity Status For Funding Israeli Army
    Canada Revokes Jewish National Fund’s Charity Status For Funding Israeli Army

    Via The Cradle

    The Canadian Revenue Agency (CRA) notified the Jewish National Fund (JNF) on July 25th that it plans to revoke the group’s charitable status over its use of donations to build military infrastructure in Israel.

    “Canadian charities are not allowed to fund foreign militaries,” Mark Blumberg, an attorney specializing in Canadian charity law, told the National Post. “Clearly, there were previously some compliance issues,” he added.

    The Canadian parliament building in Ottawa, iStock

    “Our position is that it is unjust for CRA to revoke a charity because a charitable object that it accepted almost 60 years ago is now no longer considered to be a valid charitable object,” the JNF said in a statement, adding that it will challenge the decision in the courts.

    The Zionist organization also accused the CRA of “antisemitism.”

    “As a Zionist-inspired organization, JNF Canada has many vociferous antisemitic detractors who we believe have influenced the decision-making process in this matter,” JNF Canada national president Nathan Disenhouse and CEO Lance Davis told media.

    Founded in 1901, by 2007 the Jerusalem-based JNF owned 13 percent of the occupied Palestinian territories and has been considered the single-largest landowner in Israel. Furthermore, its charter explicitly prohibits the sale or lease of land to non-Jews.

    “Under the guise of ‘environmentalism,’ the JNF has forested over the ruins of Palestinian villages in an attempt to ‘greenwash’ non-Jewish dispossession.”

    “This includes ‘Canada Park’ which was built over top 3 destroyed Palestinian villages who more than 9,000 residents were expelled from their homes,” Canada’s Green Party says in a petition to revoke the charitable status of the JNF.

    “Because of its charitable status, JNF provides tax credits for donations, meaning that up to 25 percent of their budget comes from our taxes,” the statement adds.

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

    The CRA decision comes several months after Ottawa announced plans to ban new arms exports to Israel. Nevertheless, officials clarified that export permits approved before January 8 would remain in effect.

    Tyler Durden
    Sat, 07/27/2024 – 22:10

  • Governments Must Act Now On Proper Forest Management Or Wildfires Will Get Worse
    Governments Must Act Now On Proper Forest Management Or Wildfires Will Get Worse

    Authored by Cory Morgan via The Epoch Times,

    Millions of Albertans, and indeed Canadians, are mourning the destruction of a site where they have memories of recent and childhood trips. We can be thankful that no lives have been lost, but the loss for residents of Jasper is unimaginable. I grew up in the town of Banff and can’t imagine watching my hometown go up in flames.

    Banff may very well suffer the same fate as Jasper soon, though, as it is nestled within the same kind of beautiful, but highly flammable Rocky Mountain forests as Jasper. When the Jasper fires have been extinguished and the rebuilding process begins, we must have a serious appraisal of our forest management practices and act as soon as possible. Otherwise, it won’t be a matter of if another community is lost to a wildfire, it will be a matter of when.

    The fingers are pointing and the partisan sniping has already begun as politicians and activists try to lay blame of the Jasper tragedy upon others. But we must set aside partisanship, and even ideology, and work towards solutions before we see more losses.

    To begin with, it must be accepted that fires in boreal forests are natural and inevitable. It has only been in the last couple of centuries that humans have entered the scene and meddled with the natural cycle of burning and rejuvenation of forests. What we are seeing today is the consequences of deferring the fires that would have naturally burned. The forests have become overgrown, unhealthy, and cluttered with layers of extremely flammable deadfall. Forests in that condition burn hot and fast, leading to fires that can’t be extinguished. Many communities in Canada are surrounded by forests like this and are but one spark away from a disaster.

    It’s not reasonable to just let fires burn naturally in populated areas. That means we must manage these forests and our communities to reduce the chances of wildfires and mitigate the damage they cause. This has been done to a degree in areas, but not adequately.

    Forest management to reduce wildfire risk is not new. Logging, tree spacing, and prescribed fires are all methods used to reduce fire hazards in populated regions. Unfortunately, when politics get involved, the wisdom of foresters can be lost as elected officials face backlash for supporting the cutting or burning of brush.

    Jasper is a prime example. A mountain pine beetle infestation had previously killed thousands of acres of pine trees around the townsite. Standing dead pine trees are extremely flammable, and experts were warning of the risk they presented to Jasper in 2018. A plan was formulated between the Alberta Forest Service and Jasper National Park officials to manage the forests, but it was rejected by the federal government. It’s not that the federal government wanted to see the area burn. They didn’t want to deal with the optics of bulldozers and loggers taking down tracts of forest in a scenic national park along with the haze and smoke prescribed burns would bring. The consequences of that deferral are being seen today.

    Municipal governments are loath to create buffers between forests and their townsites because residents enjoy the cozy feel of living next to the wilderness. Developers pitch communities that share space with nature and property owners will complain if bush is cut back.

    Cutting buffers in forests, doing prescribed burns, and clearcut logging may not look pretty, but it is all preferable to the devastation a fire will bring. Politicians must make the tough choices and impose fire mitigation measures upon communities, even if it upsets some residents.

    Just as we build dams and dykes to prevent flooding in populated areas, we must look at managing forests to reduce the fire risks. I worked as a surveyor for over 20 years in Alberta, and what I saw building up on the eastern slopes of the Rocky Mountains was concerning, to say the least. In some areas, it is almost impossible to walk due to the volume of deadfall. If we don’t clear those zones out soon, a fire will and it will be a big one.

    Government jurisdiction and long-term changes in the climate are subjects worthy of discussion, and we doubtless will be having those discussions for years.

    In the meantime, we must act and safeguard our communities. We don’t have years to wait, and we will see more heartbreaking losses as we have with Jasper if we keep putting off the forest management that must happen.

    Tyler Durden
    Sat, 07/27/2024 – 21:35

  • Trump: Biden Was Ousted In A "Fascist Coup"
    Trump: Biden Was Ousted In A “Fascist Coup”

    Authored by Steve Watson via Modernity.news,

    During an address to the Turning Point Summit on Friday, President Trump asserted that Joe Biden was forced to quit the presidential race by “fascists” who carried out a “coup.”

    Trump told the Florida crowd “As you know, five days ago, we officially defeated the worst president in the history of the United States, Crooked Joe Biden. You know, I thought a lot about it. We defeated him.”

    Trump continued, “He was badly beaten. And, you know, everybody who was going to him said, ‘You can’t beat him. You’re not going to beat this guy. You can’t beat him. Get out. Get out. We want you out…We want you out of the race. You’re going to lose. We want to put somebody else in.’”

    Trump compared the situation to “a prizefighter,” explaining “He’s losing badly, ready to be knocked out. And they say, well, wait, let’s stop the fight. Let’s put somebody else in.”

    “It doesn’t work that way. And it’s not supposed to work that way. And this really was a coup by the Democrats. This was a coup. Nothing else,” Trump emphasised.

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

    “He got 14 million votes,” Trump noted, referring to the Democratic primary, adding “I hate to stick up for Biden, but, you know, he didn’t want to do what he did. He said, ‘I’ll never go out. I’ll never, ever go out.’ About two days later, ‘I’m proud to go out.’”

    Trump further declared “the fascists went after him. They threatened him with the 25th Amendment.”

    “They said, we can do it the nice way or we can do it the hard way, Joe. That’s what happened. I know,” Trump added, referring to reports of what Nancy Pelosi said to Biden.

    Trump continued, “I know as many people on that side as I know on our side, so to speak. But that’s what happened. They said, we can do it the hard way. We can do it the easy way. 25th Amendment, if you don’t go. And he said, ‘Oh, I’ll go.’”

    “And now they’re trying to make him into a brave hero. He’s so brave,” Trump concluded.

    Elsewhere during the speech, Trump highlighted how some leftists are saying it is ‘hateful’ to pronounce Kamala Harris’ name incorrectly.

    Trump proclaimed “there are numerous ways of saying her name. They were explaining to me, you can say Kamala, you can say Kamala. I said, don’t worry about it.”

    “It doesn’t matter what I say. I couldn’t care less if I mispronounce it or not. I couldn’t care less,” he urged.

    “Some people think I mispronounce it on purpose, but actually I’ve heard it said about seven different ways. There are a lot of ways. There are a lot of ways,” Trump told the audience.

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

    *  *  *

    Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

    Tyler Durden
    Sat, 07/27/2024 – 21:00

  • How US Sports Leagues Make Money
    How US Sports Leagues Make Money

    Between 2022 and 2023, the five major U.S. sports leagues collectively earned $49.3 billion.

    The NFL generated the highest revenue, at $18.7 billion, significantly outpacing both the NBA and MLB, which each brought in $10.9 billion. Although the main sources of league revenues have largely remained unchanged over the last four decades, there are distinct variations in the revenue breakdown of each sport.

    This graphic, via Visual Capitalist’s Niccolo Conte, breaks down U.S. sports leagues by revenue stream, based on data from Sportico.

    Breaking Down U.S. Sports League Revenues

    Below, we show how each major league generates revenue based on their primary sources of revenue. Revenue for the NFL and MLB is as of 2022, revenue for the NBA and NHL is for the 2022-2023 season, and revenue for the MLS is as of 2023.

    Central revenue includes league media, merchandise, other sponsorships, and shared ticket revenue.

    As we can see, central revenue, which largely consists of media and broadcast deals, is the most important revenue source for the NFL and NBA.

    Since 2018, the NFL has grown from 61 of the top 100 most watched TV broadcasts to 93 in 2023. Adding to this, streaming platforms are increasingly signing contracts with the NFL, including Netflix paying $150 million to stream two 2024 Christmas games and Amazon paying $1 billion to stream Thursday night games exclusively on digital.

    Additionally, the NBA recently signed an 11-year $76 billion deal with ESPN, Amazon, and NBC that is worth more than double its previous contract. Moreover, this trend of significantly increasing media deal values is seen across every major league amid high consumer demand for professional sports.

    For the MLB, local media is a vital source of revenue, with nearly a quarter of revenues coming from this source—more than any other sport by far. In fact, each day an average 2.3 million viewers watch MLB games on regional sports networks.

    Meanwhile, the NHL makes the highest share of revenue from seating and suite sales compared to major sports leagues, at 44%, due to it attracting less lucrative TV contracts.

    Tyler Durden
    Sat, 07/27/2024 – 20:25

  • The Downside Of Complacency
    The Downside Of Complacency

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    Confidence / complacency doesn’t map the real world, in which liquidity dries up and markets go bidless.

    When Alan Greenspan issued his mea culpa in late 2013 about missing the subprime mortgage implosion and the resulting Global Financial Meltdown (Why I Didn’t See the Crisis Coming Foreign Affairs), he started by noting the complete and utter failure of everyone’s sophisticated models to predict the collapse of confidence.

    The core failure, he suggested, lay in the models’ reliance on the notion that humans make decisions rationally as Homo economicus, when the reality is we are extremely prone to irrational exuberance (a.k.a. running with the greed-enchanted herd) and panic (running off the cliff with the herd). He invoked Keynes famous “animal spirits” as the missing variable in economic models.

    Irrational “animal spirits” generate “tail risk,” events that supposedly happen only rarely but when they do happen, they trigger outsized consequences, and the Fed’s models failed to accurately account for “tail risk” because they happen more often than statistical models predict.

    All this boils down to liquidity and illiquidity: When “animal spirits” are confident in future increases in asset valuations, participants place a constant bid under the market because prices will keep going up so I’ll make more money in the future. This constant bid is called liquidity: cash is flowing into the asset class, be it stocks or housing or cryptocurrencies or commodities.

    When “animal spirits” turn to panic, sellers rush to sell as buyers vanish as they fear that prices will keep going down so I’ll lose more money in the future. Buying into a downtrend is known as “catching the falling knife”: the initial “buy the dip” players have their head handed to them on a platter, and those on the sidelines decide not to try to catch the falling knife.

    This is an illiquid market: when sellers dump assets on the market and buyers vanish, the bid keeps dropping until buyers are willing to gamble that “this is the bottom.” But should asset prices continue sliding after an initial euphoric pop higher–“the bottom is in, buy!”–then those who held back find their caution reinforced: that wasn’t the bottom after all, and everyone who jumped in lost money.

    As every surge of “buy the dip” players has their head handed to them on a platter, the market goes bidless–everyone who wanted to play “catch the falling knife” has been burned, and those who have lost the “animal spirits” to gamble stay out. The market goes bidless, and asset prices crash to levels no one in the greed-euphoria stage could imagine were even remotely possible.

    Those who follow liquidity assume that the more cash sloshing around the system, the more money will flow into assets. But this assumes participants–and therefore markets–are rational. When caution–and then panic–take hold of the herd, no matter how much cash is sloshing around, none of it will be gambled on a losing bet.

    Take a look at this chart of the Nasdaq dot-com bubble, and note the bubble symmetry: what shot up soon plummeted back to pre-bubble levels. Stocks that had reached $60 per share were recommended as “buys” at $45–a rational play perhaps, but wildly off the mark, as the stock eventually bottomed at $4.

    When sellers desperate to sell swamp buyers, prices decline. If buying dries up, prices crash.

    It’s worth pondering the psychological reality that losses make a much bigger impression on us than gains. This is the foundation of risk aversion: once burned, twice shy. Everyone’s surprised when “animal spirits” reverse polarity, but the confidence that any asset has reached “a permanently high plateau” is misplaced. Every manic greed-inflated bubble pops and cascades back to Earth. Here is a preview of the Everything Bubble popping:

    Greenspan’s models–and everyone else’s–projected a rational market in which buyers continued to buy assets even as they lost money on previous attempts to “catch the falling knife.” In other words, the markets will always be liquid.

    The Pavlovian “buy the dip” reflex that was so profitable on the way up now becomes the road to ruin as every pop higher gets sold. Those playing “buy the dip” are eventually wiped out, leaving only those burned and wary. Eventually people tire of losing and they give up. After losing 40%, a 4% return on a Treasury bond–brushed off in the glorious ascent as foolishly cautious–now looks pretty good.

    Confidence / complacency doesn’t map the real world, in which liquidity dries up and markets go bidless. In the real world, humans panic and eventually decide to never again buy stocks or real estate, as the sting of their losses lingers far longer than their memories of glorious gains earned by riding the bubble higher.

    *  *  *

    Become a $3/month patron of my work via patreon.com.

    Subscribe to my Substack for free

    Tyler Durden
    Sat, 07/27/2024 – 19:50

  • Israeli Navy's 'C-Dome' Intercepts Hezbollah Kamikaze Drone Heading Towards Offshore NatGas Rig
    Israeli Navy’s ‘C-Dome’ Intercepts Hezbollah Kamikaze Drone Heading Towards Offshore NatGas Rig

    The Israel Defense Forces reported on Saturday that a Hezbollah suicide drone, launched from Lebanon with a heading towards an Israeli natural gas field in the Eastern Mediterranean, was intercepted by a warship equipped with the “C-Dome” defense system.

    According to The Times of Israel, citing an IDF official, the kamikaze drone was intercepted by C-Dome, the naval version of the Iron Dome, from one of the Navy’s Sa’ar 6-class corvettes. 

    The drone was heading towards the Karish gas field and was shot down at a “significant distance” from any oil/gas offshore infrastructure. 

    The C-Dome was first unveiled in 2014 and declared operational in late 2022. It has its own dedicated radar and is integrated into the ship’s radar system to detect and eliminate incoming threats.

    Tensions have risen across the Middle East in recent weeks. See this:

    It’s important to note that Hamas’ allies include Iran-backed groups such as the Houthis, Lebanese Hezbollah, and Iraqi paramilitaries.

    As regional spillover risks remain elevated, we cited the hawkish think tank Jewish Institute for National Security of America in recent weeks, which shows Hezbollah has thousands of suicide drones in stockpiles.

    What’s crucial to understand are the various types of drones Hezbollah can deploy, along with threat ranges. This shows conflict could easily spill over into the Mediterranean area.

    On Friday, Israeli Prime Minister Benjamin Netanyahu and former President Donald Trump met at Mar-a-Lago in South Florida. 

    Trump claimed in the context of the meeting that a major war in the Middle East – and even possibly a “third world war” – will break out if he doesn’t win the election. He’s long been running as the candidate who will deescalate various powder kegs around the world that seemingly seemed to be nearing an explosion.

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

    “If we win, it will be very simple, it’s all going to work out, and very quickly,” Trump said, adding, “If we don’t, you’re going to end up with major wars in the Middle East and maybe a Third World War. You are closer to a Third World War right now than at any time since the Second World War, you’ve never been so close because we have incompetent people running our country.”

    Tyler Durden
    Sat, 07/27/2024 – 19:15

  • Inequality Is Caused By Inflation
    Inequality Is Caused By Inflation

    Authored by Lennart Wagemans via The Mises Institute,

    Many claim the problem with fractional reserve banking is that it loans money into existence. It does, but under normal circumstances the money created by commercial banks disappears when loans are repaid or defaulted on, which therefore doesn’t create a permanent inflation of the money supply.

    Government intervention, however, converts temporary money into permanent money through bailouts like the Troubled Asset Relief Program. They purchase loans that would have been defaulted on, preventing the evaporation of credit. When banks hold loans that are at risk of default, they face having to write them off, which would remove this part of the money supply. Bailouts turn such disappearing credit into permanent money, in effect giving banks free money.

    Without government bailouts, banks would be unwilling to make loans that are unlikely to be repaid, thus limiting their willingness to loan large amounts of money into existence. This would keep the money supply more stable. At any time, some part of the money in existence would still be destined for removal through repayment. This proportion would somewhat fluctuate with economic conditions, and the temporary money would be indistinguishable from other money until a loan is repaid, but new money would not continually get loaned into existence.

    When high-risk loans inevitably fail, the state steps in to purchase them to prevent banks from having to write off so many loans that they have net negative assets on their books. However, seeing the creation of toxic loans as just excessive risk-taking in reaction to having a safety net misses the larger dynamic. Praxeologically, the production of toxic loans is the rational supply of a good in high demand. These financial assets can be sold for a higher value than it costs to make them, thus their production is economically rational.

    Banks, praxeologically speaking, perform the function of government contractors, producing the product “toxic financial asset.” Similar to how defense contractors produce fighter jets or fish farms produce caviar for state banquets, banks create failing loans knowing the government will purchase them. This demand ensures that banks continue to produce high-risk financial instruments. The financial sector profits from creating these products despite knowing they may become worthless. Ironically, it is their worthlessness that causes them to be valuable since that rationalizes the bailout.

    Companies receiving bailout funds have not incurred typical costs, like having to maintain machinery or invest in future production, meaning they operate on much higher margins. Thus, they have much more money to offload before it loses value. They are looking for quick gains, not stable dividends, which can typically be found in assets like tech stocks and real estate, causing an unnatural inflow of funds into these sectors. This explains why tech giants grow disproportionately large; they happen to attract the interest of people with fresh money. Productivity and value creation become relatively less valuable as the economy becomes optimized toward capturing inflation investments. This process distorts market signals, misallocates resources, and perpetuates an economic environment where success ties more to financial maneuvering than genuine productive output.

    Many businesses today, especially in the tech sector, function more as inflation-capturing devices than traditional profit-generating enterprises. They prioritize attracting investment from the recipients of fresh money. A second layer of these inflation-capturing suppliers grew to capture the trickle of funds from the first layer. This means the economy has geared itself to supply the businesses that get new money, instead of allocating resources to what actual people want to buy.

    The closer to the inflation fan a business is, the more profitable it can be. In an economy that rewards inflationary rent-seeking, creating value has become unwise, as it only earns low-profit-margin money from stingy spenders who had to work to earn it. You will be able to confirm that practically anybody you know either receives money from an inflation source or supplies those who do. The economy has grown toward the money source, like a fungus toward a nutrient, rather than meeting real people’s needs. This means economic decisions are effectively made by what elites in palaces decide to finance, rather than the market. This is like a fascist economy where businesses were nominally private, but state planners in the capital made the production decisions.

    Many superwealthy today were simply lucky initial owners of popular assets that got bid up by this unnatural inflow of new money. Attracting the money flow toward assets you own has become a more important means of wealth generation than profitable operation. And that is what all the top companies do these days, trying to dazzle investors. It is like starting a cryptocurrency and getting people to buy it so your initial coins grow in value. This explains the propensity for hype cycles. They are not trying to make a profit; they are trying to excite investors to bid up their stocks.

    It is not just those who directly receive fresh money who benefit from an increase in the money supply. As everyone else’s purchasing power erodes from inflation, owners of substantial assets, like factories, are lifted relatively. They continually receive a transfer of purchasing power at the expense of everyone else. An 8% annual inflation rate — a realistic estimate considering that economic growth masks the true increase in the money supply — enhances the value of hereditary capital by 2,200 times when compounded over a century, or 220,000%. Conversely, a family without assets had their purchasing power reduced to 0.045% of its original value. This means inflation continually creates inequality. This is the real reason the rich get richer, why the world is so unequal, and why so many bad decisions are made in the internal power struggle for inflation capture.

    By continually handing free money to the rich, government facilitates a transfer of purchasing power from the population to the moneyed class. This skews wealth distribution and continually impoverishes the working class. Earned money now makes up a smaller portion of the overall purchasing power available. In a free market, wealth accumulation would rely more on productive enterprise than rent-seeking, resulting in a more equitable distribution of wealth based on productivity. Work would be more highly rewarded, and even modest employment would provide substantial purchasing power, reducing the need for a welfare state. Thus, the current system perpetuates inequality that favors the rich at the expense of the broader population.

    Marxists have misdiagnosed the cause of economic inequality. It’s not the extraction of surplus value from workers, as suggested by the labor theory of value, that gives capitalists unfair wealth. Instead, it’s the continuous influx of free money through increases in the money supply. Their analysis inverts the reality of how inequality arises. Karl Marx identified the natural market as the problem and called for state intervention to fix it. Thus, his cure was the disease. Interventionist policy ironically perpetuates the very inequality they decry. A culture steeped in his economic interpretation maintains an interventionist environment that benefits financial elites through inflationary policies and bailouts, perpetuating economic disparity. (Although praxeologically, this may have been his intention.)

    The problem is not insufficient regulation of the financial sector. If one type of risky bet is banned, banks will find other ways to speculate or create derivatives of existing bets. You can’t ban all risky bets. Mortgage-backed securities were bets on other’s mortgages, and Enron bet on future energy prices. In a normal market, these risks would be self-correcting. Faced with losses when bets go sour, they would be unwilling to make unsafe bets. The real problem is having a system of involuntary force that transforms temporary credit into real purchasing power.

    In a broader perspective, we can see distinct types of financial structures. During the industrial capitalism of the 19th century, power resided with industrial capitalists who created tangible products, driving progress and improving living standards. Today, the financial elite manipulate the allocation mechanism itself, without producing real value, having reduced industrial producers to the role of servants. This structure resembles feudal power systems, where medieval palace elites controlled society, disguised as modern financial theory.

    Tyler Durden
    Sat, 07/27/2024 – 18:40

  • The Huge Costs Behind The Olympic Games
    The Huge Costs Behind The Olympic Games

    The 2024 Summer Olympics are finally set to get underway in Paris today amid some substantial safety concerns like ISIS threats and this morning, large-scale vandalism of France’s train network. These high-level issues are momentarily distracting observers from another train wreck affecting most Olympic Games: cost overrun.

    Spending more than you have budgeted for has become the norm for host cities, but as Statista’s Katharina Buchholz reports, Paris is actually not the worst of the bunch (as of current estimates) despite an overrun of more than 100 percent landing it at a cost of $8.7 billion for hosting the Games (excluding investments in urban and transportation infrastructure).

    Infographic: The Huge Costs Behind the Olympic Games | Statista

    You will find more infographics at Statista

    This is easily topped by Barcelona, which ran 266 percent over cost in 1992 and Rio de Janeiro in 2016, which was a whopping 352 percent over budget. Winter Games can also be more costly than expected, for example in the Russian town of Sochi in 2014, where the event was 289 percent more expensive than expected at a record-breaking 28.9 billion, or in Norway’s Lillehammer in 1994, there a 277 percent overrun occurred (but the total cost was still nowhere near as high).

    While hosting an event like the Olympics is sometimes touted as an opportunity to improve city infrastructure, the enduring legacy of the Games sometimes ends up being a slew of abandoned and overgrown venues that no one uses due to poor long-term planning. That remains the case to this day in past host cities such as Sarajevo, Athens, Beijing and Rio, to name just a few, where crumbling stadia and forgotten Olympic villages serve not as proud monuments to athletic achievement, but rather as somber symbols of catastrophic financial mismanagement.

    Some have taken these past mistakes to heart and Hamburg, Germany, is a notable example for taking back its 2015 bid on cost grounds after a public referendum. Other cities have learned that the financial consequences can be dire only after hosting the Games.

    Tyler Durden
    Sat, 07/27/2024 – 18:05

  • Update: The Greatest Political Experiment
    Update: The Greatest Political Experiment

    Authored by Joel Bowman via substack,

    “State intervention is always bad, because it’s based on coercion, on force, and nothing based on coercion can be good.”

    ~ Javier Milei, speaking at The Hoover Institution in May, 2024

    Today we take a break from our road-tripping adventure to offer a quick update from the other End of the World…

    Long time readers will recall our fascination over what we’ve been calling, with immodest grandiloquence, The Greatest Political Experiment of Our Age. 

    The story so far is that, down at the southern end of the Americas, in our chosen country of self-exile, Argentina, the locals have sensibly chosen to “throw the bums out.” 

    That is, in November of last year, the gauchos voted for a man who promised to finally cut their overfed Peronist government down to size. (He even campaigned with a chainsaw, to avoid confusion among the nuance-averse.)

    Javier Milei was elected in a landslide and has since taken his motosierra to the thorny brambles of the State with admirable gusto (though, rather to this observer’s disappointment, the nation’s Banco Central, which Milei promised to burn to the ground, remains standing. Still, one lives in hope…)

    Doomsday Mongers

    The Argentine experiment is particularly interesting in that it represents the first time in modern history that a sizable population (Argentina is home to ~45 million mostly-carnivorous human beings) voluntarily, peacefully, voted to “cancel” their own state. Nor did El Presidente renege on his promise to do just that. 

    On day one in office, Sr. Milei abolished or consolidated half the federal ministries, laying off tens of thousands of government parasites in the process and promising more of the same in the days ahead. And just last month, in a major legislative victory, his so-called “Ley de Bases” and fiscal reform package was signed into law, paving the way for sweeping privatization across multiple key industries along with much needed labor market deregulation.

    Needless to say, bed-wetting nanny statists around the planet, from Buenos Aires to the DC Beltway to Brussels and beyond, promptly set about prophesying a doomsday scenario, whereby the proud republic of Argentina would shortly descend into a Dantean hellscape the likes of which the civilized world has never known. 

    It is to their great and enduring dismay that such a scene has not materialized, though that hasn’t stopped them painting the picture in their newspaper columns just the same. Here’s the latest from our lease-mongering colleagues over in the popular presses…

    The worst economic crisis in decades puts Argentine ingenuity to the test under President Milei ~ The Associated Press

    Milei’s market honeymoon ends as investors question economic plan ~ The Financial Times

    Milei’s Austerity Plan Pushes Argentina Into Recession in First Quarter ~ Bloomberg

    And yet, despite having been bequeathed a raging currency conflagration, in which the hot potato peso was inflating at the fastest rate in the world, Milei has been able to avert that all-too-familiar path to catastrophe. Both general and core inflation have collapsed since Milei took office in December, with the latter plummeting from over 30% month-over-month to just 2.3% on a four week rolling basis (through July).

    Trend Reversal

    Not only that, but workers in the private sector are faring far better under Milei than when Sergio Massa (his main opponent in the presidential election) was serving as finance minister under the previous administration. 

    In the first five months of last year, inflation handily surpassed private-sector wage growth (42.2% to 39.4%). Even as inflation rocketed in the back half of last year, wage growth now outpaces inflation (81.7% versus 71.9%). Here’s the chart:

    (Tip ‘o the Hat to @OppenheimerAR)

    Here is another look at the trajectory of real salaries – that is, adjusted for inflation – on the rise across the economy. (Milei assumed office on Dec. 9, 2023):

    (Source: Argentina’s National Institute of Statistics)

    Drill, Baby, Drill!

    Meanwhile, despite Argentina having the worst projected economic growth of any major economy this year (at least according to the IMF), it nonetheless continues to defy expert forecasts. 

    Economic activity rose 1.3% for the month of July, the first month of positive GDP data since Milei assumed office and well above the 0.1% median growth estimates from analysts surveyed by Bloomberg. Year over year economic activity likewise surprised to the upside, shooting 2.3% higher and far exceeding the negative –2.5% expected by those same analysts. 

    And here’s unconventional (shale) oil and gas production in the Vaca Muerta oil fields, reaching an all time record… 

    (Source: Secretaría de Energía, Argentina)

    [Translation: Unconventional oil and gas production in Vaca Muerta registered a historical record in June. In that month, 372 thousand barrels of oil and 78 million m3 of gas were obtained per day.]

    Of course, you’re unlikely to hear about any of this in the mainstream news. And that’s hardly surprising…

    That Argentina’s success proceeds to the chagrin of rabid interventionists and meddling do-gooders around the world serves only to underscore just how important this experiment in free markets and free people truly is. Long may it continue. 

    ¡Viva la libertad, carajo!

    Tyler Durden
    Sat, 07/27/2024 – 17:30

  • Pulling A Biden: South Korea Introduced As North Korea During Paris Olympics
    Pulling A Biden: South Korea Introduced As North Korea During Paris Olympics

    Only a couple of days in and the 2024 Paris Olympics have already been subject of plenty of scandal and controversy – from the bizarre drag queen performance at the opening ceremony to lack of adequate food with enough protein being served to athletes at the Olympic village.

    But there has been one flub that perfectly parallels President Biden earlier this month calling Ukraine’s Zelensky ‘President Putin’ while introducing him on a NATO stage. The International Olympic Committee (IOC) has issued a formal apology after its announcer mistakenly introduced the South Korean team as North Korean during the opening ceremony of the Paris Olympics. Watch the mistaken announcement below:

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

    In both English and French, the team was introduced as the “Democratic People’s Republic of Korea” – which is the official name for North Korea. It came as the team was in a boat sailing down the River Seine along with other delegations being introduced.

    The announcer had elsewhere actually gotten the North Korean team’s name correct, using the exact same introduction for them.

    “We deeply apologize for the mistake that occurred when introducing the South Korean team during the broadcast of the opening ceremony,” the IOC said in the aftermath.

    South Korea was so outraged that IOC President Thomas Bach quickly spoke with South Korean President Yoon Suk-yeol on Saturday to convey an apology and express regret in person.

    President Yoon noted that the people of South Korea, which had previously hosted Olympic games, were “surprised and baffled” and that the mistake must not be repeated.

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

    South Korea’s vice minister for sports and culture has reportedly also requested a meeting with IOC President Thomas Bach to address the matter.

    The whole embarrassing incident might be looked back upon as the Paris Olympics’ “Biden moment”…

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

    Tyler Durden
    Sat, 07/27/2024 – 16:55

  • Ten Points About Post-Lockdown Economics
    Ten Points About Post-Lockdown Economics

    Authored by Jeffrey Tucker via The Brownstone Institute,

    The sudden economic lockdown of March 2020, the world over, was one of the more shocking moments in history. The very core of the economic problem from the beginning of recorded time was getting more of what people needed to them in a way that was sustainable given the inherent scarcities of the state of nature. 

    Regardless of the system, creating wealth was the stated goal, and humanity gradually discovered that trade, investment, marketing, and access to more via travel and creativity was the way forward. 

    All in an instant, all those considerations were put on the back burner to combat what was supposed to be a deadly disease. What’s more, the belief was that ending economic activity, at least that deemed to be nonessential, was the path toward solving the health crisis. 

    For how long? It was initially advertised to be two weeks. But as time went on and the lockdown period was extended longer and longer, it became clear that the whole point was to wait for a vaccine. This was based on the evidence-free supposition that the whole population was under threat and that the shot would fix the problem. 

    The world economy crashed – entirely by intention and by force – as never before seen in modern times. As Trump said at the time, even as he greenlighted the lockdowns, no one had ever heard of anything like this. That’s because it is crazy and deeply dangerous. There is no such thing as turning a global economy off and then on again as if it had a breaker switch to pull and push again when the time came. 

    Of the attempt, here are ten general observations about the results. 

    1. The labor markets have never recovered. Both labor participation and employment/population ratios remain below what they were in 2019. Maybe this is the result of retirement. Maybe it is disability. Maybe it is just demoralization. Regardless, we never got back to normal. All the talk of the great job machine since 2021 is nothing but people finding work again after having been displaced during lockdowns or new people coming into the market. 

    The job market has not been “hot” by any standard. Monthly data reports institutional surveys, which double count, but rarely household surveys which show continuing weakness. The divergence between the two has never been higher. We are nowhere near a pre-lockdown trend. 

    2. Stimulus was wiped out by inflation. When the checks started arriving directly in bank accounts, people were doing absolutely nothing at home, and business was getting revenue from government even when their doors were closed, it seemed like some Nirvana had dawned. Riches were flowing from heaven. That lasted about 18 months. Once inflation came along, the purchasing power of those dollars was zapped away. Money creation had been on a level never before seen in modern times; some $6 trillion was created out of thin air to buy stunning amounts of debt. It was all taxed away in the most ancient scheme of tricking the public. 

    3. Retail sales and wholesale factory orders are not up. Among all the usual data releases, only the GDP numbers are routinely adjusted for inflation. For most reports, you have to do that independently. Retail sales and factory orders are reported in nominal terms, which works fine in normal times but in inflationary times, this habit produces absurdities. It ends up clocking more spending on the same goods and services simply because everything is more expensive. 

    EJ Antoni has been all over this point. Even adjusting usually severely underreported inflation shows that neither retail nor wholesale has genuinely risen. Again, these adjustments are based on conventional CPI data so the actual reality is much worse. 

    4. Output has not increased. In the conventional telling, the lockdowns created an instant recession but it only lasted a couple of months. Once the stimulus was released and the economy opened up a bit, the boom reversed all the damage. We’ve been growing moderately ever since. 

    In other words, the conventional data tells the story of the most implausible scenario, a beautiful lockdown that did no net damage but merely paused economic life until everything went back to normal. But what if this is completely wrong? How could it be? There are two major factors: the inclusion of government spending as constituting economic growth and an inflation adjustment that is lower even than the CPI, one crafted especially for use in national income statistics. 

    Everyone knows today that the statistical prosperity of wartime in World War II was not real due to the inclusion of government as the main contributor to supposed economic output. Government debt as a percentage of GDP has reached and surpassed wartime levels in the last four years. This should tell us something important about the credibility of this seeming recovery. 

    5. The inflation data is fake. According to the official data, the dollar of January 2020 has sustained 82 percent of its value, which is to say it has lost only 18 percent of value over four years. Think about this in your own life, based on your bills, your shopping, and what you can see with your own eyes. Think back to the good old days of 2019. In what world is it even vaguely plausible that the prices you pay (or consider paying but then decline to pay) have gone up only 18 percent? 

    How is the CPI able to render price increases this low? Because the data excludes interest rates, homeowners insurance, taxes, shrinkflation, and added fees. Data on health insurance prices are adjusted downwards for medical consumption. The data on home prices is fed through a wildly complicated formula called homeowners equivalent rent. It has become a fantasy. In the chart below, the red line is excluded from CPI in favor of the blue line. 

    Even on specifics, the Bureau of Labor Statistics can’t seem to reflect actual industry prices. The BLS has food prices up 26 percent since 2019. But industry data has grocery up 35 per. The least price increases are in retail liquor (11 percent), which is precisely why cocktails, wine, and beer are up so much at restaurants: it’s a good place to extract profit margins. 

    Then you have the black box of hedonic adjustments, which allow bureaucrats to re-render the price of any product with changed quality with some perception that, after all, you don’t mind paying more for higher quality, so therefore it is not really increasing in price. 

    Finally, you have the effective exclusion of most main forms of shrinkflation and added fees. How much does all this add to the CPI? We don’t really know. It’s not wildly impossible that real inflation over four years has been 30 percent or 50 percent or higher. Adjust all the other data for that and you gain a completely different picture of what is happening. 

    6. Trade blocs have formed and will not save us. When all supply chains in the world froze in March 2020, and then gradually reopened based on national politics, we saw the fraying of 70 years of global integration. The chip manufacturers moved from supply for cars and other industrial goods in the US to laptops and gaming machines in the Asian sphere of influence. Soon after the opening, the US de-dollarized Russian assets, giving BRICS new incentive and energy to become more robust. For years later, the new shape of the world is becoming apparent: it’s all about spheres of political influence, thus shattering a driving force of global economic growth for many decades. 

    7. Property rights are not secure. Never before in US history have so many small businesses been shut down coast to coast with such brutality. When they opened again, it was often only at throttled capacity, giving a huge boost to big over small restaurants and hotels. This was all a foundational attack on property rights, the very core of a functioning economic life. This surely shook the psychology of business formation nationwide. Though we have no empirical data on this, it is still the case that a state that attacks property this way cannot expect a thriving world of business startups. If your business can be shut down for such strange reasons, why start one at all? This is the sort of institutional problem that causes economic decay in imperceptible ways. 

    8. The debt is out of control; personal, corporate, and government. Plenty of people have written about the problem of the government debt, the interest on which three-quarters of taxes are now directed to pay. 

    The ship of corporate debt sailed long ago with the wild experiment in zero interest rates by the Federal Reserve after 2008. Rates were reversed to deal with inflation. The resulting high rates are deeply painful for any non-public business that depends on leverage for its operations: 

    The consumer debt problem is more striking still: in times of high interest, savings should be going up, not down, and debt should be going down not up. The opposite is happening simply because real income is falling dramatically and has been for three years. Even using conventional CPI data, we have not yet recovered from the lockdowns. 

    9. CBDCs are essential to the plan. A major ambition of the Covid response was the creation of a universal vaccine passport. It was deployed first in New York. The entire city was closed in all its public facilities to the unvaccinated. No one refusing the shot was permitted in restaurants, bars, libraries, or theaters. Boston then replicated the plan, and so did New Orleans and Chicago. It faltered because business complained and also the software failed, despite the tens of millions spent. All these efforts were reversed but the plan itself revealed the larger agenda: control through data collection and enforcement. The ambition is not gone and will likely come back but a better and more comprehensive path is the Central Bank Digital Currency, now being deployed in many parts of the world. It allows universal surveillance, timed currency expirations, and directed spending rationing to reflect political priorities. There is no question that the elites want this. 

    10. Financial markets will thrive until they do not. So far, in the course of the last crazy four years, we have been spared a serious financial crisis either in stocks or banks. This is not entirely unusual in the midst of a wild expansion of money and credit. After hitting prices and wages, the new money flows into financials, the rise of which is seen as fantastic news rather than simple price inflation. That said, the stock market is not the economy. It bodes well for people invested and stockpiling retirement accounts but does nothing for Main Street wage and salary earners. 

    The lockdowns amounted to the world’s largest and most elaborate economic head-fake in human history. It left the entire world less free and less prosperous, and with drained hopes that restoring normalcy can happen anytime soon. To add injury to the insult, most official institutions are manufacturing fake data to cover it all up. 

    Tyler Durden
    Sat, 07/27/2024 – 16:20

  • Israel Says "All-Out War" Imminent After Hezbollah Rocket Slams Into Soccer Field, 30 Casualties 
    Israel Says “All-Out War” Imminent After Hezbollah Rocket Slams Into Soccer Field, 30 Casualties 

    Israeli Prime Minister Benjamin Netanyahu and Foreign Minister Israel Katz are holding emergency consultations with the country’s senior defense leadership following a devastating Hezbollah rocket attack on the town of Majdal Shams in Israel’s north which resulted in 30 casualties, including at least ten killed.

    Nine victims among the several dozen injured are said to be in critical condition, many of them children, some as young as ten. Foreign Minister Katz told a state broadcaster, “There is no doubt that Hezbollah crossed all red lines.”

    Aftermath of deadly attack on soccer field, via Haaretz

    He warned that “We are facing an all-out war” and added, “I have no doubt that we’ll pay a cost” – but also said an even greater toll will surely be exacted on Hezbollah.

    The top diplomat further claimed in the comments that Israel will have “full backing” from the US and Europe in waging a bigger anti-Hezbollah campaign in Lebanon. Katz explained to Axios:

    The Hezbollah attack today crossed all red lines, and the response will be accordingly. We are approaching the moment of an all-out war against Hezbollah and Lebanon.

    We will pay prices, but at the end of the war Nasrallah and Hezbollah will be destroyed and the state of Lebanon will be severely damaged and we will restore peace and security to the residents of the north.

    Rockets reportedly scored direct impact on a soccer field in the Israeli Druze town in the northern Golan region. The IDF military is probing why Israel’s anti-air defenses didn’t work upon the missile being inbound.

    While for months hundreds of Hezbollah missiles and drones have rained down on northern Israel, it is much rarer for a missile to strike in the heart of a town or city.

    Widely circulating video which was verified by the Times of Israel shows a large fireball upon impact:

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

    Amid the rising death toll, Hezbollah has later in the day issued a surprising statement insisting it was not behind the attack:

    Hezbollah in a statement denies it launched rockets at Majdal Shams, in an attack that killed and wounded civilians, including children.

    The terror group says it “has no connection to the incident at all, and categorically denies all false allegations.”

    Hezbollah said earlier it launched dozens of rockets at an army base in the Golan Heights, near Majdal Shams.

    Israel is charging that not only Hezbollah was definitely behind it, but that this attack has just greatly escalated the conflict. Meanwhile, recent days have seen new reports of fires breaking out in southern Lebanon due to Israeli strikes there.

    In Gaza, Al Jazeera has the following latest developments:

    • Gaza’s Health Ministry says at least 30 people have been killed after an Israeli bombing of Khadija School in Deir el-Balah. Israel claimed it targeted a “Hamas command and control centre”.
    • The civil defence in Gaza says at least 170 people have been killed in Israel’s military incursion in Khan Younis since it began more than a week ago.
    • The armed wing of Hamas says fierce battles are continuing in Gaza City and that its fighters struck an Israeli troop carrier surrounded by soldiers with an al-Yassin 105 rocket in the Tal al-Hawa neighbourhood.
    • A rare Israeli air raid has taken place in the occupied West Bank, targeting the Balata refugee camp, east of Nablus. It killed a Palestinian man the army said was wanted.

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

    Israel’s northern border has thus far since Oct.7 not slipped into all-out Israel-Hezbollah war, but this could mark the beginning of a broader conflict. The White House has long urged Israel to keep the fighting ‘limited’ and contained. The fear is that all of Lebanon could be engulfed if the IDF invades.

    Tyler Durden
    Sat, 07/27/2024 – 15:45

  • Olympics Opening Ceremony Features Dancing Drag Queens And Bizarre Symbology
    Olympics Opening Ceremony Features Dancing Drag Queens And Bizarre Symbology

    Update (1000ET):

    Several X accounts that posted videos and/or screenshots about the absurdities of the Olympics’ opening ceremonies have been hit with Digital Millennium Copyright Act (DMCA) complaints enforced by Elon Musk’s social media platform. 

    Your account has been locked because X received a compliant Digital Millennium Copyright Act (“DMCA”) Notice for content posted to your X account. Under the DMCA, copyright owners can notify X claiming that a user has infringed their copyrighted works. Upon receipt of a valid DMCA notice, X will remove the identified material.

    X maintains a repeat copyright infringer policy under which repeat infringer accounts will be suspended. Accruing multiple DMCA strikes may lead to suspension of your account.

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

    “They’re now targeting anyone who dared to complain about the blasphemous woke agenda during the @Olympics opening ceremony,” X user Dr. Simon Goddek wrote. 

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

    Other X users report being hit by DMCA complaints…

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

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

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

    Another X user said, “Lots of DMCA takedowns of Olympic opening ceremony footage. Weird, it’s almost like they don’t want you to see it now.”

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

    As we penned earlier, the opening ceremonies were just absolutely bizarre – and, in some cases, inappropriate for children to watch. 

    Here’s what happened…

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

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

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

    No comment. 

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

    To sum up, the Olympics can’t tolerate mockery and criticism of the “Woke Games,” so they resort to censorship.

    *   *   * 

    Sports spectacles like the Olympics, the Super Bowl, the Commonwealth Games and a host of other events have become increasingly political in their messaging and their pageantry in recent years.  Furthermore, the symbology on display during these performances has become more and more bizarre.

    As we noted in May, the signs were not good for the Summer Games when it was revealed that drag queens and trans activists would be carrying the Olympic Torch in preparation for opening ceremonies.  Olympic torch bearers are supposed to be chosen from a list of people with significant contributions to their communities.  It’s hard to say what contributions trans activists have made to any community, but the announced “theme” of the Summer Games held in Paris helps to explain their presence.

    The stated tenets for Olympics 2024 are: Community, Diversity and The Collective.  In other words, the theme of this year’s Olympic Games is woke.

    The event was planned by “queer artistic director” Thomas Jolly (pictured below), who said he “wants everyone to feel represented.”  Yet another example of gay activists unable to control their impulse to project their sexual preferences on everything, even sporting events.

    Opening Ceremonies have launched in France with much fanfare, though the rest of the world is not very interested.  In the US, the Summer Games in Paris are expected to hit record low ratings; even lower than the Winter Games in Beijing in 2022.  When you see what has become of the Olympics today, it’s easy to understand why.

    The ceremony in Paris features strange performances from a horde of drag queens, including sexualized dancing and an LGBT recreation of The Last Supper.

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

    Yikes.  That’s not the kind of thing most people want to sit down to watch on a nice summer evening with their kids. Another example of odd symbology was the display of a metal horse with a rider in white galloping across the River Seine.

    The horse and rider, more disturbing than beautiful, were followed by 85 boats carrying almost 7,000 athletes from 205 countries down the River Seine.  The display came just hours after a sabotage attack on the high-speed rail networks caused travel chaos across France.  The opening ceremony was the first in Olympics history to be featured outside of the main stadium.

    The metallic horse is oddly reminiscent of a performance at the 2022 Commonwealth Games in the UK, which featured “dreamers” worshiping and appeasing a giant metallic bull while commentators discussed the enslavement of women.

    Make of this what you will, but it’s clear that major national and international games have changed dramatically in the past decade.  The spectacle is no longer meant to entertain, but to propagandize.  And, just as we have seen with woke theatrical entertainment and the collapse of the movie box office in recent years, audiences are dwindling for sporting events with political messaging. 

    Tyler Durden
    Sat, 07/27/2024 – 15:11

  • What 'Project 25' Says About The Fed
    What ‘Project 25’ Says About The Fed

    Authored by Jonathan Newman via The Mises Institute,

    Mandate for Leadership 2025 is an unofficial blueprint for a potential conservative administration, published by the Heritage Foundation’s Project 2025. Donald Trump has distanced himself from the project, even though many people associated with his first term as president contributed to the document.

    It’s billed as “The comprehensive policy guide for a new conservative president, offering specific reforms and proposals for Cabinet departments and federal agencies, pulled from the expertise of the entire conservative movement.” Paul Dans, the Project 2025 Director, says that the project aims “to deconstruct the Administrative State.”

    Chapter 24 of the 922-page document is on the Federal Reserve. It was authored by Paul Winfree, Distinguished Fellow in Economic Policy and Public Leadership at The Heritage Foundation.

    The chapter is decidedly anti-Fed – it calls for abolishing the Fed altogether and returning to a commodity-backed money – but it also suggests some more politically palatable reforms that would merely limit the Fed, in case the more radical measures prove to be infeasible. Winfree lists the proposals “in decreasing order of effectiveness against inflation and boom-and-bust recessionary cycles.” Free banking (which entails abolishing the Fed), and a return to commodity money are listed first.

    Overall, the chapter presents a great, albeit brief, critique of government intervention in money and banking. It blames the Fed for exacerbating the cycle of booms and busts, inflating away the value of the dollar, enabling exorbitant deficit spending by the federal government, picking winners and losers in financial markets, and expanding its own power with each crisis.

    From a Misesian-Rothbardian perspective, it has a few Friedmanite flaws. But assuming Donald Trump isn’t going to read and adopt Rothbard’s views in What Has Government Done to Our Money?, this is much better than the tepid, Fed-embracing advice from “right-wing Keynesians” during the 80s and 90s. (See “Clintonomics: The Prospects” in Making Economic Sense for more on them.)

    The influence of Friedman’s monetarism is not just in the third-, fourth-, and fifth-best policy compromises. The chapter begins in error: “Money is the essential unit of measure for the voluntary exchanges that constitute the market economy.” The idea that money is a unit of measure leads to a host of errors in monetary theory, leading to the conclusion that the purchasing power of money should be stabilized.

    In fact, it was this idea that led to the creation of the Fed in the first place. Winfree acknowledges this: “The Federal Reserve was originally created to ‘furnish an elastic currency’ and rediscount commercial paper so that the supply of credit could increase along with the demand for money and bank credit.” Winfree says that the Fed’s ability to stabilize the purchasing power of the dollar is hindered by the full employment side of the Fed’s dual mandate and by discretionary, as opposed to rules-based, monetary policy. Instead of attacking the Fed on more fundamental grounds, namely that the original justification for the Fed was fallacious, Winfree accepts this justification and says that Fed doesn’t do a good job at this task.

    The chapter also mentions Friedman’s diagnosis of what prolonged the Great Depression, but without citing him. According to Friedman, the Federal Reserve failed to prevent a collapse in the money supply from 1929 to 1933, and this is what caused what would have been a “garden-variety recession” to turn into the Great Depression. Winfree alludes to this diagnosis in more general terms: “the Great Depression of the 1930s was needlessly prolonged in part because of the Federal Reserve’s inept management of the money supply.” Of course, those who have read Rothbard’s America’s Great Depression know that it was the Fed-enabled monetary expansion in the 1920s that led to the inevitable bust, and that the depression of the 1930s was prolonged due to the host of interventions by Hoover and FDR. Bank failures and the concomitant collapse of money and credit actually help the adjustment process through the liquidation of mismanaged banks and by realigning the supply of credit with real savings.

    The influence of Friedman and the Chicagoites is most apparent in the policy proposals offered as alternatives to ending the Fed. Friedman’s “K-Percent Rule” is listed after the proposal to return to a commodity standard. The “K” refers to a fixed rate of growth in the money supply—Winfree offers 3 percent per year as an example. The idea is to take central bank discretion completely off the table, much like the other proposed rules: the inflation-targeting rule (which Winfree acknowledges is already somewhat in effect at the Fed), the Taylor Rule, and the Nominal GDP Targeting Rule.

    An important problem with all of these rules (aside from the fact that discretion can be good) is that they are arbitrary. Why a 3 percent fixed rate in money supply growth? Why should we have a 2 percent price inflation target? What weights should be applied in the Taylor Rule? Why should nominal spending be stabilized? To see why any explicit or implied target is arbitrary, consider what we would see in a progressing unhampered market economy.

    In such a progressing economy, we would probably have steady (but not fixed) price deflation primarily due to the increased production of goods and services. This expectation accords with historical experience, especially the 19th century: “throughout the nineteenth century and up until World War I, a mild deflationary trend prevailed in the industrialized nations as rapid growth in the supplies of goods outpaced the gradual growth in the money supply that occurred under the classical gold standard.”

    But even this is not grounds for a monetary policy rule that targets some fixed rate of price deflation, for the same reason we shouldn’t fix the price of anything based on what we assume is a natural trend. The economy is in constant flux as values change, the stock of known natural resources changes, technology is invented, and savings preferences change, among countless other factors. This is why Mises referred to stabilization policy as “an empty and contradictory notion” (Human Action, p. 220). To Winfree’s credit, he acknowledges that without a central bank, “the norm is for the dollar’s purchasing power to rise gently over time, reflecting gains in economic productivity.” It seems that this point is lost, however, once the monetary policy rules are discussed.

    I’m not against taking incremental steps to chip away at State power, but the proposed rules seem more like side-steps or steps backward. For example, if the Fed were explicitly committed to the Taylor Rule, this would probably bolster the perception that the Fed is an impartial, scientific agency using sophisticated models and tools to manage the macroeconomy.

    These issues, and a few other minor points (like the claim that fiscal policy is ok if it is “timely, targeted, and temporary”) keep me from giving this chapter an A+. But I wholeheartedly agree with the anti-Fed spirit and statements like the following:

    A core problem with government control of monetary policy is its exposure to two unavoidable political pressures: pressure to print money to subsidize government deficits and pressure to print money to boost the economy artificially until the next election. Because both will always exist with self-interested politicians, the only permanent remedy is to take the monetary steering wheel out of the Federal Reserve’s hands and return it to the people.

    It seems to me that all the alternative reform ideas involving “rules-based monetary policy” are moot because of these political pressures. Rules are easily bent and abandoned when political winds change. We should just remove the cancer and replace it with nothing.

    Tyler Durden
    Sat, 07/27/2024 – 15:10

  • Trump Promises To Make USA The "Bitcoin Super-Power Of The World"; Democrats Panic U-Turn On Anti-Crypto Crusade
    Trump Promises To Make USA The “Bitcoin Super-Power Of The World”; Democrats Panic U-Turn On Anti-Crypto Crusade

    In a spirited keynote address, Former President Trump promised to make USA the “bitcoin super-power of the world,” ensuring that cryptocurrency is “mined, minted, and made in the USA.”

    “We have to talk about Bitcoin. Our country is blessed with the extraordinary talent and genius in this room.

    This spirit built America and will help us make it great again.

    I admire what the Bitcoin community has achieved. In just 15 years, Bitcoin has gone from an idea to the 9th most valuable asset in the world.

    It’s already bigger than ExxonMobil and soon it will surpass the market cap of silver.

    That’s a big deal.”

    He went on with some big promises:

    “I pledge the day I take office the weaponization against Bitcoin ends.”

    “On day one, I will fire Gary Gensler and appoint a new SEC Chairman.”

    “I will immediately shutdown Operation Chokepoint 2.0“

    Trump also confirmed that he will appoint a crypto advisory council with “regulations written by industry-loving people within 100 days.”

    Trump also confirmed that “there will never be a CBDC” while he is president.

    “Those who say that bitcoin is a threat to the dollar have it exactly backwards, the danger to our financial future comes from Washington DC not crypto.”

    Additionally, the former president pointing out that

    “Bitcoiners understand inflation better than anyone. You all understood it first.”

    Promising to ‘drill, baby, drill’, Trump notes that with low energy costs the USA will become the undisputed bitcoin mining center of the world.

    Finally, Trump dropped the big guns:

    “The policy of the Trump administration will be to keep 100% of all that it currently holds as the core of the strategic national bitcoin stockpile,” and confirmed his promise to commute the sentence of Ross Ulbricht to time-served.

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

    Watch the full keynote address at Bitcoin 2024 here:

    Bitcoin price has risen significantly in the last 24 hours in anticipation of Trump’s speech…

    Notably, the Democrats appear to be worried that crypto could be a vote-change for many people (and are pushing back against the Warren/Gensler attacks). A number of Democratic congressmembers have penned a letter to the DNC pushing for change…

    Over 52 million Americans have embraced digital assets, seeing them as a means to democratize finance, spur innovation, and create new economic opportunities.

    According to recent polls. 19% of voters have bought crypto, 19% self-identified as Democrats, 18% as Republicans, and 24% of crypto-owning voters are independents.

    Data shows that digital assets are being adopted at higher rates among Gen Z, Black and Latino Americans, and immigrant communities key constituencies of the Democratic party compared to traditional financial products. These technologies are revolutionizing opportunities for these communities, reflecting their transformative potential.

    From an electoral standpoint, crypto and blockchain technologies have an outsized impact in ensuring victories up and down the ballot. Crypto is at the top of voters’ minds in swing states, and a balanced approach to crypto that spurs innovation while protecting consumers is a net positive for policymakers and candidates.

    Over 20% of voters in key battleground states identified crypto as a major issue in the 2024 election, and it is critical that our party presents a persuasive case to crypto voters while ensuring that consumers benefit from thoughtful and appropriate regulation.

    The current financial system has left Americans behind.

    According to recent surveys, 4 in 5 voters agree with the statement, “The current financial system favors elites over regular people.” Digital assets and blockchain technology are not merely financial instruments but represent a revolutionary shift that can enhance transparency, reduce fraud, and create a more inclusive financial system.

    We believe this technology is non-partisan, and the Democratic Party should also champion these innovations to help reaffirm the U.S.’s position as the leader in the global digital economy.

    They then make four suggestions that the DNC should back off the attacks on crypto:

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

    *  *  *

    Who could have seen this coming?

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

    In the sixteen months since, we have seen a seismic shift in attitudes towards crypto from both Independents and Republicans; while Democrats continue to demonize the sovereign currency.

    Independent presidential candidate Robert F. Kennedy Jr. praised the role Bitcoin could play in improving the US economy and the American way of life as he spoke to an audience at the Bitcoin 2024 conference on July 26. He promised to sign a number of executive orders on his first day in office to begin the process.

    Kennedy would sign an order requiring the US Justice Department and US Marshalls to transfer the 204,000 Bitcoin held by the US to the Federal Reserve to be held as a “strategic asset,” he said.

    Furthermore, Kennedy said he would also order the Treasury Department to purchase 500 Bitcoin daily until the reserve reaches at least four million BTC.

    The United States would attain “a position of dominance no other country will be able to usurp” and its Bitcoin reserve would eventually reach a value of “hundreds of trillions of dollars,” he promised.

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

    In addition, CoinTelegraph’s Derek Andersen reports that Kennedy would order the Internal Revenue Service (IRS) to treat all transactions between Bitcoin and the US dollar as nonreportable and nontaxable. He would also order the IRS to treat Bitcoin as eligible for exchange into real property under the 1031 Exchange program, which provides incentives for real estate investment.

    “Transactional freedom [is] as important as freedom of expression in the 1st Amendment,” Kennedy said, and Bitcoin can provide that freedom and help restore the United States economy to its condition before President Richard Nixon took the US dollar off the gold standard to fund the Vietnam war. Kennedy added:

    “Fiat currency was invented to fund war. […] If the world was on a BTC standard, there would be no more war because you can’t print Bitcoin.”

    “I understand that tomorrow President Trump may announce his plan to build a Bitcoin Fort Knox and authorize the US government to buy a million Bitcoin as a strategic reserve asset,” Kennedy told the Bitcoin 2024 conference in Nashville on Friday, a day before Trump was scheduled to speak at the same event.

    “And I applaud that announcement.”

    However, most notable is the shift seen by former President Trump from his initial comments in 2019..

    “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated cryptoassets can facilitate unlawful behaviour, including drug trade and other illegal activity.”

    Thankfully, as Mark Shut and Lee Bratcher detail below, via BitcoinMagazine.com, the official position of the Republican Party has changed dramatically since President Donald J Trump condemned the emerging crypto industry in those uncompromising terms back in 2019.

    Earlier this month, the Republican National Committee adopted an ambitious platform to promote innovation in the US’ digital assets industry and protect the rights of bitcoin holders.

    For one, the official platform pledges that the Republicans will “defend the right to mine bitcoin.”

    This represents a much-needed departure from the policies of the incumbent administration.

    In February this year, the US Department of Energy’s Energy Information Administration (EIA) issued an “emergency” survey to bitcoin mining companies, demanding highly sensitive information such as the specifications of the machines being used, the specific locations of their mining operations, and contractual information relating to their commercial energy partners. The EIA not only demanded all of this information but pledged to publish even the most commercially sensitive bits of it.

    This initiative represented an unprecedented intrusion into the activities of Bitcoin miners and a massive assault on the crypto industry. It prompted organizations such as the Texas Blockchain Council to launch legal proceedings to try and protect the rights of the crypto industry against federal outreach. The Republicans’ pledge to “defend the right to mine bitcoin” is therefore very welcome.

    There are other encouraging pledges that the Republicans have made.

    The GOP has said they will “ensure every American has the right to self-custody their digital assets and transact free from government surveillance and control.”

    They have also come out strongly against the idea of a CBDC.

    “Republicans will end Democrats’ unlawful and un-American crypto crackdown and oppose the creation of a Central Bank Digital Currency,” the party has said.

    Of course, all of this is highly encouraging for digital asset industry advocates. But it still begs the question.

    What caused President Trump to change his mind and start embracing the massive potential of digital assets and decentralized finance?

    How has this pro-digital asset agenda vaulted into the limelight of Presidential politics?

    If there is one man who has contributed more than anybody else to changing Republicans’ mind on crypto, it is Vivek Ramaswamy.

    The former Republican presidential candidate and entrepreneur is clearly having increasing amounts of influence on the GOP inner circle. At the Republican Convention this month, Donald Trump Jr joked that he would like Ramaswamy to be his running mate in 2036. Indeed, ever since his presidential bid last year, it is clear that he has been one of the leading voices at the upper echelons of the Republicans guiding the party in a more pro-crypto direction.

    Ramaswamy made waves in GOP circles when, at the North American Blockchain Summit in Texas last year, he released a detailed and comprehensive plan for the US crypto space.

    What did he pledge to do? Perhaps the most eye-catching measure was his promise to fire most of the employees at the bloated Securities and Exchange Commission (SEC) and order the rest to stop trying to bully the crypto industry. Importantly, Ramaswamy defines many cryptocurrencies like bitcoin as commodities that are therefore not under the jurisdiction of the SEC.

    “I think it’s nothing short of embarrassing that Gary Gensler, the current leader of the SEC, in front of Congress could not even say whether Ethereum counted as a regulated security or not,” Ramaswamy said during one of the Republican debates last year. “This is just another example of the administrative state gone too far.”

    Ramaswamy has been a vocal advocate for innovation in the crypto space and the use of decentralized digital currencies as a tool for financial freedom. He has argued that the right to code should be a right protected by the First Amendment, protecting developers from the overreaches of federal agencies.

    He has also said that consumers should have a right to possess self-hosted digital wallets beyond the grasp of the government. This has now been explicitly adopted by the Republicans for their 2024 election campaign, showing the practical influence Ramaswamy is having on Republican policy.

    It is not just Ramaswamy who has been positively influencing Republican policy. Back in May last year, Ron DeSantis, the governor of Florida, brought into force a law banning any potential CBDC being used in the state. The regulation “prohibits the use of a federally adopted CBDC by excluding it from the definition of money within Florida’s Uniform Commercial Code.”

    Efforts like this have been essential in making the Republican leadership aware of the dangers associated with CBDCs and prompting them to pledge action.

    But arguably the most important impactful of Ramaswamy’s crypto activism is to persuade the broader Republican Party that supporting crypto innovation is in line with their political philosophy and natural instincts.

    He has powerfully argued that the current federal assault on the crypto industry is “an embodiment of our national decline” in the way it represents an attack on innovation and entrepreneurship, two values the Republicans have always claimed to hold dear.

    Ramaswamy has similarly noted that Bitcoin mining is “a frontier in American innovation” in the same tradition as American heroes such as Thomas Jefferson – who Ramaswamy thinks “would have been a Bitcoin miner.” This rhetoric seems to have worked in convincing President Trump and Republican leaders that they should indeed be the pro-bitcoin party.

    Another key emerging figure in the Republican party who is of a similar mind on digital assets as Vivek is Trump’s recent VP pick, J.D. Vance. Senator Vance is vocal about his support for bitcoin and digital assets and has a background in tech venture capital. He is young and he understands the importance of courting younger votes.

    So, what will “four more years” of President Trump mean for the US digital asset industry?

    Let’s end as we started, with another quote from the President – one that shows, thanks to the efforts of Vivek Ramaswamy, Senator Vance and others, just how much the Republican stance on crypto has changed over the last few years.

    “I will end Joe Biden’s war on crypto. We will ensure that the future of crypto and the future of Bitcoin will be made in America.”

    “If Trump is elected, the U.S. will have to add Bitcoin as a reserve, because it is digital gold,” said Arseniy Grusha, chief executive officer of data-center firm Dataprana, who attended the conference. “The earlier they do that, the better it will be for the United States.”

    Tyler Durden
    Sat, 07/27/2024 – 14:50

  • Quake Detected Near North Korea's Nuke Test Site
    Quake Detected Near North Korea’s Nuke Test Site

    Some X users are speculating that an earthquake detected near the Punggye-ri Nuclear Test Site in North Korea might have been an underground nuclear test. However, there are no confirmations from North Korea, neighboring countries, the US, or allies of Washington to confirm or deny this report. 

    The Korea Meteorological Administration, South Korea’s meteorological service, posted on X early Saturday morning that an earthquake was detected in North Korea (translated by Google):

    “[Earthquake Information] 07-27 12:50 Area 42km north-northwest of Gilju, Hamgyeongbuk-do, North Korea Magnitude 2.9 Instrument seismic intensity: Maximum seismic intensity Ⅰ.”

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

    After the KMA Earthquake’s post, X user OSINTdefender said, “A 2.9 Magnitude Earthquake was registered in North Korea a few minutes ago, almost right next to the Punggye-ri Nuclear Test Site.”

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

    OSINTdefender wrote in several posts:  

    “North Korea always seems to do their Nuclear Tests during Major International Events, so it would make sense if this is a Test that they decided to do it during the Olympics.”

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

    “Though if this was a Nuclear Test it wasn’t a big one, for comparison their last Nuclear Test in 2017 caused a 6.1 Magnitude Earthquake, with it believed to have been upwards of a 250 Kiloton Bomb.”

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

    “This Area of North Korea is also prone to Natural Earthquakes as well, with a 2.4 Magnitude Earthquake near the Punggye-ri Site in January believed to have been Natural.”

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

    Seoul-based freelance journalist Raphael Rashid said, “2.9 earthquake detected moments ago in North Korea 41.30 N 129.13 E which corresponds almost exactly to the Punggye-ri nuclear test site.” 

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

    Given the coordinates (41.30 N 129.13 E) from Rashid, the location of the quake compared with the nuclear test facility is about a 31-minute car drive. Also, this nuclear test site is North Korea’s only one and was the location of the 2006, 2009, 2013, January 2016, September 2016, and September 2017 nuclear tests. 

    Here’s what some X users are saying about the report:

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

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

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

    *Developing… 

    Tyler Durden
    Sat, 07/27/2024 – 14:35

  • FedEx To Cut Daytime Domestic Flight Activity By 60%
    FedEx To Cut Daytime Domestic Flight Activity By 60%

    By Eric Kulisch of FreightWaves

    FedEx plans to significantly slash daily flights and the number of U.S. cities served by air during the daytime when its air cargo contract with the U.S. Postal Service expires on Sept. 29, resulting in significant pay cuts for pilots, senior managers informed crews this week.

    FedEx operates nearly 400 freighter aircraft but will soon downsize U.S. flight operations after losing a large contract with the U.S. Postal Service. Pilots are expected to see a substantial reduction in pay with fewer flights scheduled. (Photo: Shutterstock/John Gress Media)

    Shedding daytime flying capacity in response to the lost postal business is part of a broader FedEx (NYSE: FDX) initiative to boost corporate profits that includes restructuring airline operations to align with lower parcel demand and improve efficiency.

    The parcel logistics giant will reduce daytime domestic flying time by 60% and the number of city destinations by 55%, which will add about 500 pilots to the existing surplus, said Justin Brownlee, senior vice president for flight operations and network planning, in a letter to airline workers obtained by FreightWaves. No pilots will be hired for the foreseeable future, he added.

    The company now has 5,500 pilots, down from 5,800 at the start of the year. With the workforce redundancy, remaining flight hours will be divided up among the entire cohort, resulting in a “significant” reduction in the minimum number of flight hours guaranteed to pilots starting in October, Brownlee told the flight team.

    The Postal Service in early April selected UPS (NYSE: UPS), instead of incumbent FedEx, as its air cargo carrier for the next 5 1/2 years. The last day FedEx will provide service to the Postal Service is Sept. 29, but the company has already been scaling back flights as the agency transitions volumes to UPS. FedEx recently said losing the Postal Service business will drag down operating income by $500 million in the current fiscal year.

    Lower postal volumes left FedEx with surplus equipment for its daytime air network and higher operating costs per unit. Management previously said the Postal Service contract wasn’t making money. Postal revenue in the fiscal year ending Sept. 30, 2022, fell $236 million to $1.9 billion and was expected to continue decreasing. The contract previously generated annual revenue of at least $2 billion.

    Equity research analysts argued that FedEx’s airline was much bigger than necessary, partly because of commitments to fly postal shipments during the daytime in addition to its overnight express operation.

    FedEx officers earlier this year said expiration of the Postal Service contract gives them more flexibility to reorganize the daytime air network because aircraft won’t be dedicated to a single customer.

    Pat DiMento, vice president flight operations and training, provided pilots more details about the network changes in a follow-up memo, also shared with FreightWaves. The route map in October will go from 75 to 28 cities served – a 63% reduction versus the 55% mentioned by Brownlee, with daily flight trips in an average week falling nearly two-thirds. Cities losing daytime service include Atlanta; Austin, Texas; and Baltimore. Weekly flight hours will tumble from 2,045 to 1,203 (down 60%). Airbus A300 freighters, for example, will experience an 81% reduction in weekly daytime flight legs while Boeing 767 trips will be cut 70%, going from nearly 700 to 209 per week.  

    Executives stressed that the tentative October schedule was released now to give flight operations personnel pertinent information as early as possible, but that adjustments could still be made. 

    “The above plan will likely change as we settle into the new system form and other business opportunities develop. Our company is rapidly moving towards the network efficiencies that will ensure we remain the leader in the incredibly competitive cargo and logistics industry. We appreciate the significant impact these changes will have on your schedules and value your commitment to FedEx as we navigate these changes together,” DiMento wrote.

    Despite the reduced daytime flying, FedEx expects to maintain fleet size at current levels because the number of aircraft is primarily dictated by the priority overnight network and the company is working to attract other cargo business, Brownlee said.

    “In preparation for the conclusion of our air freight contract with the United States Postal Service, we have begun implementing adjustments to network operations that support postal volume. These adjustments include a reduction in daytime flight hours,” said Caitlin Adams Maier, FedEx’s director of public affairs, in a statement to FreightWaves. “As we transform our network and operations for the future, we remain committed to delivering world-class service to our customers around the world while providing outstanding service to the USPS through the contract’s completion in September.”

    Pilots have made substantially less money the past year because they share a smaller pool of flying assignments. No progress has been made on a new labor contract since June 2023, when members of the pilots’ union rejected a tentative contract. Negotiations remain in federal mediation. Company officials have privately suggested that a new ratified contract would incentivize pilots to retire, which would help address overstaffing.

    The Air Line Pilots Association, which represents the FedEx pilots in collective bargaining, urged management to resolve the contract talks so that the business transformation can fully achieve the desired financial outcome.

    Brownlee’s comments that aircraft count will stay the same while overstaffing levels increase “are contrary to one another and conveniently ignore the negative impact of the Drive and Tricolor [restructuring] on our pilots. We are certainly wondering how exactly management intends to implement Network 2.0 and Tricolor with a misaligned crew force,” said Jose Nieves, chair of ALPA’s FedEx Master Executive Council in a message to members and the company.

    Fleet plan

    The airline’s mainline fleet has shrunk from 417 aircraft in fiscal year 2022 to 389 as more aircraft are put out of service than are being added to modernize the fleet. FedEx last quarter permanently retired 22 Boeing 757-200 freighter aircraft as part of the downsizing effort. The older 757s were expendable because they are less fuel-efficient than other planes operated by FedEx, which still has 92 of the narrowbody freighters in the fleet. The company also retired nine MD-11s in the fiscal year ending May 31 and plans to phase out the tri-engine aircraft by mid-2028, subject to changes in customer demand. 

    FedEx last year received 14 freighter aircraft from Boeing (four 777s and 10 767-300s medium widebodies). The company is scheduled to take delivery of two factory-built 777 freighters in the next 12 months and 14 B767s over the next two years, according to its latest statistics.

    Meanwhile, as part of the new effort to consolidate the Express and Ground networks into one integrated system, FedEx in late January began repainting mainline cargo jets to present a unified brand, said Brownlee. That means aircraft will no longer show Express markings. The new paint scheme, which features a larger logo and different positioning to reflect a more modern look, has been applied to 18 freighters so far.

    Tricolor drive

    FedEx is now implementing its Tricolor strategy for streamlining its global air network with the goal of segregating the fleet according to various product categories and demand. Brownlee said new flights are being added to the Orange network to accommodate nonparcel cargo growth.

    The so-called Purple network is geared toward international customers willing to pay the most for the fastest speeds using dedicated aircraft that are well timed to go overnight into FedEx hubs for next-day delivery. Fewer large freight shipments will be mixed in to maximize density on aircraft and sorting efficiency, executives explained in the spring.

    Orange-designated flights will operate during the daytime and focus on priority international freight. Management describes this deferred air network as an extension of its European and U.S. less-than-truckload networks, designed to attract high-yield freight, such as pharmaceuticals, perishables, electronics and automotive components, that is more profitable per pound than heavier, general consignments. FedEx says it will mix in deferred parcels to fill out the aircraft.

    FedEx is reorganizing air operations to ensure planes are as full of packages and other cargo as possible. (Photo: Jim Allen/FreightWaves)

    The White network will handle e-commerce and other low-priority shipments, much of it processed through the company’s freight forwarding arm, FedEx Trade Networks. Those loads will utilize the belly space of commercial passenger aircraft operating between major international gateways that can be integrated into the FedEx Ground network in the U.S.

    Starting in September and October, FedEx will add a Boeing 777 route between Liege, Belgium, and its regional hub in Oakland, California; a route connecting Miami, Guatemala City and San Pedro Sula, Honduras, operated with a Boeing 757 freighter; and a Miami-Buenos Aires-Santiago, Chile-Quito, Ecuador-Miami route with a Boeing 767, according to Brownlee’s letter.

    In addition to those routes, the logistics integrator is expanding the Orange network in the Asia, Middle East and Africa operating out of a hub in Guangzhou, China. FedEx in early June also launched an MD-11 route from Guangzhou to Newark Liberty International Airport in New Jersey, with stops in Tokyo and Anchorage, Alaska, and bypassing the global hub in Memphis, Tennessee.

    “This route provides parcel and freight growth opportunities by directly connecting the East Coast and Asian markets while improving service levels by removing unnecessary touch points in our U.S. domestic network, which prevents more congestion” in Memphis, said Brownlee.

    He also disclosed that FedEx launched an intra-China flight between Guangzhou and Beijing utilizing a Boeing 737 freighter operated five times per week by Tianjin Air Cargo. As a foreign airline, FedEx does not have regulatory authority to operate the flight itself. Brownlee said the flight strengthens FedEx’s position in the China market and “provides freight growth opportunities by feeding additional volume into the global international air network” without displacing any company aircraft.

    Tricolor is part of a comprehensive restructuring program launched two years ago to strengthen profits after the pandemic surge wore off, specifically aimed at reducing redundant infrastructure and associated costs.

    The Drive initiative to take out $4 billion in structural costs by mid-2025, coupled with pickup and delivery efficiencies from a new consolidation of separate operating companies into one organization, has helped achieve four consecutive quarters of operating income and margin expansion despite revenue declines.

    FedEx’s adjusted operating profit increased 5.6% year over year to $1.9 billion last quarter on a 1% gain in revenue, underscoring the company’s progress in containing costs amid soft market conditions. It was the first time FedEx had year-over-year revenue growth after six quarters of declines.

    The company achieved $1.8 billion in structural savings last year and is targeting an additional $2.2 billion in savings from its transformation program in fiscal year 2025. 

    Tyler Durden
    Sat, 07/27/2024 – 14:00

Digest powered by RSS Digest