Jun 28

Today’s News 28th June 2021

  • Thousands Of Asteroids Whizz Past Earth
    Thousands Of Asteroids Whizz Past Earth

    NASA’s Center for Near Earth Object Studies keeps an eye on the sky, surveying more than 26,000 asteroids and a much smaller number of comets that pass near Earth. Near Earth Asteroids, or NEAs, also include more than 2,000 potentially dangerous specimen, of which 158 have a diameter of more than one kilometer, making them 2.5 times as tall as the Empire State Building.

    As Statista’s Katharina Buchholz points out, anyone who has dabbled in paleontology – even in the science fiction realm of Jurassic Park or The Land Before Time – knows that a giant asteroid hitting Earth is not good news for life on the planet. In fact, there is evidence that this may have been one of the main causes of the Cretaceous-Paleogene extinction.

    But it does not take a massive asteroid to cause widespread damage. An asteroid that was only ten meters in diameter exploded 25 km above the Bering Sea in December 2019 with the force equivalent to ten Hiroshima atomic bombs. No international or national space organization had detected the small celestial object before it disintegrated above the unsuspecting Earth.

    Infographic: Thousands of Asteroids Whizz Past Earth | Statista

    You will find more infographics at Statista

    As technology has advanced throughout the decades, people have become better at seeing what is floating around us in the sky.

    According to Nasa’s CNEOS Center, only a handful of celestial objects had been detected by 1900.

    The scale of that number did not change much until the end of the century. As of 1990, only 134 Near Earth Asteroids and 42 potentially dangerous objects were detected up above.

    By comparison, 26,115 NEAs and 2,185 potentially dangerous asteroids had been identified as June 2021.

    Tyler Durden
    Mon, 06/28/2021 – 02:45

  • Georgia & Ukraine Agree To "Commitment" Seeking NATO Membership
    Georgia & Ukraine Agree To “Commitment” Seeking NATO Membership

    Authored by Rick Rozoff via AntiWar.com,

    Georgian President Salome Zurabishvili paid a two-day visit to Ukraine earlier last week (her first) and met with her opposite number President Volodymyr Zelensky.

    Zurabishvili first came to world notice when she emerged as part of the triumvirate that took over in Georgia following the so-called Rose Revolution in late 2003 that saw incumbent head of state Eduard Shevardnadze manhandled and divested of his powers. Her colleagues were Mikheil Saakashvili, who became president, and Zurab Zhvania, whose family claims he was assassinated in 2005. That event is the prototype of what have come to be called color revolutions; after Georgia the Orange Revolution in Ukraine in 2004, the Tulip Revolution in Kyrgyzstan and the Cedar Revolution in Lebanon in 2005, and a veritable host of others, successful and otherwise, in Belarus, Moldova, Armenia, the Maldives, Venezuela, Myanmar, Iran and elsewhere.

    Deposed president Shevardnadze accused George Soros and his “philanthropies” of funding the coup in his nation. Shortly after Saakashvili and his allies came to power Soros’ Open Society Institute partnered with the United Nations Development Program to create a Capacity Building Fund for Georgia. The initiative was announced at a joint news conference with Saakashvili, the then-United Nations Development Program administrator and Soros at the World Economic Forum that year. Over 5,000 Georgian officials were paid out of the fund.

    Later that same year the Orange Revolution occurred in Ukraine and a similar triumvirate, two men and a woman (it would be the same in Kyrgyzstan in 2005), took power.

    The West, especially NATO, has always treated the two Black Sea nations as a pair. The military bloc created a NATO-Georgia Commission and a NATO-Ukraine Commission in 2008; each has been granted an Annual National Programme in those formats.

    Last year they were among the first nations to become NATO Enhanced Opportunities Partners.

    This week Ukraine’s Zelensky praised the strategic relations between the nations, affirming they shared a joint commitment to joining NATO and the European Union. He added they “agree regarding the future development of the Eastern Partnership,” whose association agreement demand on now deposed President Viktor Yanukovych led to the coup in 2014 and the resultant war in the Donbass. The Eastern Partnership, originally devised by Poland and Sweden, has as it mission the absorption of all remaining European and Caucasian former Soviet states into the European Union (and NATO) – except Russia.

    Meanwhile, characteristically hawkish Western think tanks are clamoring for more confrontation…

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    The Ukrainian head of state also spoke of strengthening military integration in the Black Sea – against Russia, of course – particularly in regard to the Ukrainian and Georgian navies.

    President Zurabishvili stated it was disappointing that the two nations “lost some time that should have been used to deepen relations,” in reference to a two-year freeze in relations after Zelensky appointed former Georgian President Saakashvili (on the run from his homeland) the chairperson of Ukraine’s Executive Reform Committee. As often occurs in such cases, Zurabishvili and Saakashvili, once coup co-plotters, soon became bitter enemies. (If she could have his head on a platter she would gleefully live up to her name.)

    She, like her Ukrainian counterpart, hailed a common commitment to NATO, the EU and de-occupation, by which she evidently meant “liberating,” respectively, Abkhazia and South Ossetia and Crimea and the Donbass from Russia. The Georgian president also denounced “daily provocations” from Russia “along the occupation line.”

    Zelensky expressed confidence that Georgia would assist his government’s de-occupation of Crimea by appointing a representative for this year’s Crimean Platform founding summit, whose purpose is to wrest Crimea from Russia.

    It’s no wonder that some NATO members are less than enthusiastic about bringing Georgia and Ukraine into their fold and providing them with Article 5 protection. Doing so in the context of “de-occupying” territory in the Donbass, the Caucasus and especially in Crimea would almost certainly provoke a military confrontation with Russia that wouldn’t remain a conventional one for long.

    Tyler Durden
    Mon, 06/28/2021 – 02:00

  • Politics, Profit, & Poppies: How The CIA Turned Afghanistan Into A Failed Narco-State
    Politics, Profit, & Poppies: How The CIA Turned Afghanistan Into A Failed Narco-State

    Authored by Alan Macleod via MintPresNews.com,

    The COVID-19 pandemic has been a death knell to so many industries in Afghanistan. Charities and aid agencies have even warned that the economic dislocation could spark widespread famine. But one sector is still booming: the illicit opium trade. Last year saw Afghan opium poppy cultivation grow by over a third while counter-narcotics operations dropped off a cliff. The country is said to be the source of over 90% of all the world’s illicit opium, from which heroin and other opioids are made. More land is under cultivation for opium in Afghanistan than is used for coca production across all of Latin America, with the creation of the drug said to directly employ around half a million people.

    This is a far cry from the 1970s, when poppy production was minimal, and largely for domestic consumption. But this changed in 1979 when the CIA launched Operation Cyclone, the widespread funding of Afghan Mujahideen militias in an attempt to bleed dry the then-recent Soviet invasion. Over the next decade, the CIA worked closely with its Pakistani counterpart, the ISI, to funnel $2 billion worth of arms and assistance to these groups, including the now infamous Osama Bin Laden and other warlords known for such atrocities as throwing acid in the faces of unveiled women.

    “From statements by U.S. Ambassador [to Iran] Richard Helms, there was little heroin production in Central Asia by the mid 1970s,” Professor Alfred McCoy, author of “The Politics of Heroin: CIA Complicity in the Global Drug Trade,” told MintPress. But with the start of the CIA secret war, opium production along the Afghanistan-Pakistan border surged and refineries soon dotted the landscape. Trucks loaded with U.S. taxpayer-funded weapons would travel from Pakistan into its neighbor to the west, returning filled to the brim with opium for the new refineries, their deadly product ending up on streets worldwide. With the influx of Afghan opium in the 1980s — Jeffrey St. Clair, co-author of “Whiteout: The CIA, Drugs and the Press,” alleges — heroin addiction more than doubled in the United States.

    “In order to finance the resistance for a protracted period, the Mujahideen had to come up with a livelihood beyond the weapons that the CIA was providing,” McCoy said, noting that the weapons issued could not feed the fighters’ families, nor reimburse them for lost labor:

    So what the resistance fighters did was they turned to opium. Afghanistan had about 100 tons of opium produced every year in the 1970s. By 1989-1990, at the end of that 10-year CIA operation, that minimal amount of opium — 100 tons per annum — had turned into a major amount, 2,000 tons a year, and was already about 75% of the world’s illicit opium trade.”

    The CIA achieved its goal of giving the U.S.S.R. its Vietnam, the Soviets failing to quash the Mujahideen rebellion by the time they finally pulled out in 1989. But American money and weapons also turned Afghanistan into a dangerously unstable place full of warring factions that used opium to fund their battles for internal supremacy. By 1999, annual production had risen to 4,600 tons. The Taliban eventually emerged as the dominant force in the country and attempted to gain international legitimacy by stamping out the trade.

    In this, they were remarkably successful. A 2000 ban on opium cultivation by the Taliban-led government led to an almost overnight drop to just 185 tons harvested the following year, as frightened farmers chose not to risk attracting their wrath.

    The Taliban had hoped that the eradication program would win favor in Washington and entice the United States to provide humanitarian aid. But unfortunately, history had other ideas. On September 11, 2001, the U.S. experienced a massive case of blowback, as Bin Laden’s forces launched attacks on New York and Washington. The U.S. ignored the Taliban’s offer to hand him over to a third party, instead opting to invade the country. Less than a month after the planes hit the World Trade Center, U.S. troops were patrolling the fields of Afghanistan.

    The world’s first true narco-state

    The effect of the occupation was to expand drug production to unprecedented new proportions, Afghanistan becoming, in Professor McCoy’s estimation, the world’s first true narco-state. McCoy notes that by 2008, opium was responsible for well over half of the country’s gross domestic product. By comparison, even in Colombia’s darkest days, cocaine accounted for only 3% of its GDP.

    Today, the United Nations estimates that around 6,300 tons of opium (and rising) is produced yearly, with 224,000 hectares — an area almost the size of Rhode Island — planted with poppy fields.

    Source | Dyfed Loesche | Statista

    But even while it was financing a widespread and deadly aerial spraying campaign in Colombia, the United States refused to countenance the same policy in Afghanistan. “We cannot be in a situation where we remove the only source of income of people who live in the second poorest country in the world without being able to provide them with an alternative,” said NATO spokesman James Appathurai.

    Not everyone agreed, however, that a passionate commitment to defending the quality of life of the poorest was the actual reason for rejecting the policy. Matthew Hoh, a former captain in the U.S. Marine Corps is one skeptic. Hoh told MintPress that airborne fumigation was not carried out because it would be outside the control of Afghan government officials, who were deeply implicated in the drug trade, owning poppy fields and production plants themselves. “They were afraid that, if they went to aerial eradication, the U.S. pilots would just eradicate willy nilly and a lot of their own poppy fields would be hit.” In 2009, Hoh resigned in protest from his position at the State Department in Zabul Province over the government’s continued occupation of Afghanistan. He told MintPress:

    NATO forces were more or less guarding poppy fields and poppy production, under the guise of counterinsurgency. The logic was ‘we don’t want to take away the livelihoods of the people.’ But really, what we were doing at that point was protecting the wealth of our friends in power in Afghanistan. “

    According to Hoh, there was widespread disillusionment within the military among service members who had to risk their lives on a day to day basis. “What are we doing here? This is bullshit,” was a common sentiment among the rank and file.

    A US Marine stands in a poppy field during a foot patrol at Sangin, Afghanistan. Photo | DVIDS

    The heroin trade implicated virtually everyone in power, including Afghan President Hamid Karzai’s brother Ahmed Wali, among the biggest and most notorious drug kingpins in the south of the country, a man widely understood to be in the pay of the CIA.

    U.S. attempts to stymie the opium trade, such as the policy of paying domestic militias to destroy poppy fields, often backfired. Locals came up with ways of profiting, such as refraining from planting in one area, collecting large sums of money from occupying forces, and using that cash to plant elsewhere — effectively getting paid both to plant and not to plant. Even worse, local warlords and drug bosses would destroy their rivals’ crops and collect money from the U.S. for doing so, leaving themselves both enriched and in a stronger position than before, having gained NATO forces’ favor.

    One notable example of this is local strongman Gul Agha Sherzai, who eradicated his competitors’ crops in Nangarhar Province (while quietly leaving his own in Kandahar Province untouched). But all the U.S. saw was a local politician seemingly committed to stamping out an illegal drug trade. They therefore showered him with money and other privileges. “We literally gave the guy $10 million in cash for rubbing out his competition,” Hoh said. “If you were going to write a movie about this, they’d say ‘This is too far fetched. No one is going to believe this. Nothing is this insane or stupid.’ But that is the way it is.”

    McCoy noted that the Taliban was one of the prime beneficiaries of the drug trade, and used it to increase their power and vanquish the U.S.:

    That booming opium production, and the U.S. failure to curb it, provided the bulk of the financing for Taliban, who captured a significant but unknown share of the local profits from the drug traffic, which they used to fund guerrilla operations over the past 20 years, becoming a determinative factor in the U.S. defeat in Afghanistan.”

    ‘The needle and the damage done’

    It is not particularly difficult to grow opium. Opium poppies flourish in warm and dry conditions, away from the damp and the wind. Consequently, they have found a fertile home across much of central and western Asia. The plant has flourished in Afghanistan, particularly in southern provinces like Helmand, close to the tripoint where Afghanistan meets Pakistan and Iran. Much of the irrigation system in Helmand was underwritten by USAID, an organization that acts as the CIA’s public-facing front. In full bloom, the poppy fields look spectacular, with beautiful flowers of vibrant pink, red or white. Underneath the flowers, one can find a large seed pod. Farmers harvest these, draining them of a sap which dries into a resin. This is often transported out of the country through the so-called “Southern Route” via Pakistan or Iran. But, as with any pipeline, much of the product is spilled along the way, causing an epidemic of addiction across the region.

    The effect on the Afghan population has been nothing short of a disaster. Between 2005 and 2015, the number of adult drug users jumped from 900,000 to 2.4 million, according to the United Nations, which estimates that almost one in three households are directly affected by addiction. While Afghanistan also produces copious amounts of marijuana and methamphetamine, opioids are the drug of choice for most, with around 9% of the adult population (and a growing number of children) addicted to them. Added to this has been a spike in HIV cases, as users share needles, Professor Julien Mercille, author of “Cruel Harvest: U.S. Intervention in the Afghan Drug Trade,” told MintPress.

    Only contributing further to the despair has been 20 years of war and U.S. occupation. The number of Afghans living in poverty rose from 9.1 million in 2007 to 19.3 million in 2016. A recent poll conducted by Gallup found that Afghans are the saddest people on Earth, with nearly nine in ten respondents “suffering” and zero percent of the population “thriving,” in their own words. When asked to rate their lives out of a score of ten, Afghans gave an average answer of 2.7, a record low for any country studied. Worse still, when asked to predict the quality of their life in five years, the mean answer was even lower: 2.3.

    The effects of the CIA operation to bleed the Soviets dry in Afghanistan have also produced a humanitarian crisis in neighboring Pakistan. As McCoy noted, in the late 1970s, Pakistan had barely any heroin addicts. But by 1985, Pakistani government statistics reported over 1.2 million, turning the two nations into “the global epicenter of the drugs trade” almost overnight.

    The problem has only grown since. A 2013 U.N. report estimated that almost 7 million Pakistanis use drugs, with 4.25 million requiring urgent treatment for dependency issues. Nearly 2.5 million of these people were abusing heroin or other opioids. Around 700 people die every day from overdoses. The highest rate of dependency is, unsurprisingly, in provinces on the Afghan border where heroin is manufactured. The same U.N. study notes that 11% of people in the northwestern province of Khyber Pakhtunkhwa use illicit substances — primarily heroin.

    The drug crisis, of course, is also a medical crisis, with overstretched public hospitals filled with drugs-related maladies. The social stigma of addiction has ripped families apart while the money and power illicit drugs have brought has turned many towns into hotspots of violence.

    Iran has a similar number of opioid users, generally estimated at between two and three million. In towns close to the Afghan/Pakistani border, a gram of opium can be bought with loose change — between a quarter and fifty cents. Thus, despite the extremely harsh penalties for drug possession and distribution on the official books, the country has the highest addiction rate in the world

    On a micro level, addiction tears apart families and ruins lives. On an international scale, however, the opium boom has placed an entire region under significant strain. Therefore, one consequence of U.S. policy in the Middle East — from supporting jihadists to occupying nations — has been to unleash a worldwide opium addiction that has made a few people fantastically wealthy and destroyed the lives of tens of millions.

    Domestic despair

    The boom in production has also led to a worldwide disaster. In the past decade, opioid-related deaths increased by 71% globally, according to the United Nations. Much of the product grown by Afghan warlords ends up on Western streets. “I don’t see how it can be a coincidence that you have that explosive growth in poppy production in Afghanistan and then you have the worldwide opioid epidemic,” Hoh stated, a connection that raises the question of whether users in Berlin, Boston, or Brazil should be seen as victims of the war in Afghanistan as much as fallen soldiers are. If so, the numbers would be staggering. Nearly 841,000 Americans have died of a drug overdose since the war in Afghanistan began, including more than 70,000 in 2019 alone. The majority of these have involved opioids.

    Officially, the DEA claims that essentially all illicit opioids entering the U.S. are grown in Latin America. Hoh, however, finds this unconvincing. “When you look at their own information and their reports on the illicit opioid production hectarage in Mexico and South America, it is clear that there is not enough production in the Western hemisphere to meet the demand for illicit opiates in the U.S.,” he told MintPress.

    A dirty history

    The U.S. government has a long history of directly involving itself with the worldwide narcotics trade. In Colombia, it worked with President Alvaro Uribe on a nationwide drug war, even as internal U.S. documents identified Uribe as one of the nation’s most important drug traffickers, an employee of the infamous Medellin Cartel and a “close personal friend” of drugs kingpin Pablo Escobar. Profits from drug-running funded Uribe’s election runs in 2002 and 2006.

    General Manuel Noriega was also a key ally of the U.S. For many years, the Panamanian was on the CIA payroll — despite Washington knowing he was involved in drug trafficking since at least 1972. When he became de facto dictator of Panama in 1984, little changed. But the director of the Drug Enforcement Agency initially praised him for his “vigorous anti-drug trafficking policy.” Eventually, however, the U.S. decided to invade the country and capture Noriega, sentencing him to 40 years in federal prison for drug crimes largely committed while he was still in the CIA’s pay.

    At the same time as this was going on, investigative journalist Gary Webb exposed how the CIA helped fund its dirty war against Nicaragua’s leftist government through sales of crack cocaine to black neighborhoods across the United States, linking far-right paramilitary armies with U.S. drug kingpins like Rick Ross.

    An Afghan farmer collects raw opium from poppy plants in his field in Chaparhar, Afghanistan. Nisar Ahmad | AP

    To this day, the U.S. government continues to support Honduran strongman Juan Orlando Hernandez, despite the president’s well-established connections to the cocaine trade. Earlier this year, a U.S. court sentenced Hernandez’s brother Tony to life in prison for international drug smuggling, while Juan himself was an unindicted co-conspirator in the case. Nevertheless, President Hernandez has proven himself effective at suppressing the anti-imperialist Left inside his country and cementing the U.S.-backed 2009 military coup, one reason he is unlikely to face charges in the near future.

    Using the illegal drug trade and the profits from it to fund imperial objectives has been a constant of great empires going back centuries. For instance, in the 1940s and 1950s, the French Empire utilized opium crops in the so-called “Golden Triangle” region of Indochina in order to help beat back a growing Vietnamese independence movement. Going further back, the British used its opium machine to subdue and economically conquer much of China. Britain’s insatiable thirst for Chinese tea was beginning to bankrupt the country, as the Chinese would accept only gold or silver as payment. It therefore used the power of its navy to force China to cede Hong Kong, from which Britain began flooding China with opium it grew in its possessions in South Asia.

    The humanitarian impact of the Opium War was staggering. By 1880, the British were inundating China with over 6,500 tons of opium every year — equivalent to many billions of doses, causing massive social and economic dislocation as China struggled to cope with a crippling, empire-wide addiction. Today, many Chinese still refer to the era as “the century of humiliation.” In India and Pakistan, too, the effect was no less dramatic, as colonists forced farmers into planting inedible poppy fields (and, later, tea) rather than subsistence crops, causing waves of huge famines, the frequency of which had never been seen before.

    Millions of losers

    The story is much more nuanced than some “CIA controls the world’s drugs” conspiracy theories make out. There are no U.S. soldiers loading up Afghan carts with opium. However, many commanders are knowingly enabling warlords who do. “The U.S. military and CIA bear a large responsibility for the opium production boom in Afghanistan,” Professor Mercille said, explaining:

    Post-9/11, they basically allied themselves with a lot of Afghan strongmen and warlords who happened to be involved in some way in drug production and trafficking. Those individuals were acting as local allies for the U.S. and NATO, and therefore were largely protected from retribution or arrest for drug trafficking because they were U.S. allies.”

    From the ground, the war in Afghanistan has looked a lot like the war on drugs in Latin America and previous colonial campaigns in Asia, with a rapid militarization of the area and the empowerment of pliant local elites, which immediately begin to embezzle the massive profits that quietly disappear into black holes. All the while, millions of people pay the price, suffering inside a militarized death zone and turning to drugs as a coping mechanism. In the story of the opium boom, there are few winners, but there are millions of losers.

    Tyler Durden
    Sun, 06/27/2021 – 23:45

  • Top Chinese Nuclear Expert Jumps To His Death After Power Plant Mishap
    Top Chinese Nuclear Expert Jumps To His Death After Power Plant Mishap

    On June 14, China’s Taishan Nuclear Power Plant near Hong Kong experienced damaged fuel rods that triggered a build-up of radioactive gases. French company Framatome, a part-owner of the plant, requested the US Department of Energy for assistance as an “imminent radiological threat” seemed inevitable.

    Radioactive gasses were released, and US officials at the time said the situation at the nuclear plant did not “pose a severe safety threat to workers at the plant or Chinese public.” 

    But three days later, Zhang Zhijian, one of China’s top nuclear scientists and the Vice-President of Harbin Engineering University, allegedly committed suicide after jumping off a build. 

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

    Here’s the video in GIF format in case it’s deleted. 

    South China Morning Post (SCMP) said police in the capital of Heilongjiang ruled out homicide as the cause of death. 

    “Harbin Engineering University announces with deep grief that Professor Zhang Zhijian regrettably fell off a building and died at 9.34 am on June 17, 2021,” the university’s official account on Weibo wrote in a statement. “The university expresses deep sorrow over the passing of comrade Zhang Zhijian and deep condolences to his family.”

    Zhang was a professor at the College of Nuclear Science and Technology at the Harbin Engineering University and was also the Vice President of the Chinese Nuclear Society. 

    In China’s northern Heilongjiang province, Harbin Technical University is one of two Chinese universities that have close relations with the People’s Liberation Army. Last June, the university was banned from using a US-developed computer software amid souring relations with the West. 

    What’s notable is that western media or most media outlets did not attempt to piece together the puzzle that days after a nuclear power plant mishap occurred, a top scientist in the country allegedly committed suicide. Seems odd right? 

    Except for the blog “Jennifer’s World,” which explains the possible connection between Zhijian’s death and his relationships to the plant. 

    Now, the question is, why did Zhang Zhijian kill himself?

    Let’s show picture 6. This is a screenshot of the Harbin Engineering University’s announcement about his death. It only says that he “unfortunately dropped from the building and passed away at about 9:34 am on June 17.” And the police had ruled out the possibility of murder, and we feel very sorry about his death, etc.

    So, there was no explanation about the cause of his death.

    An interesting thing is, as early as 2005, Taishan Nuclear Power Plant’s Chinese owner, China Guangdong Nuclear Power Group, signed a cooperation agreement with Harbin Engineering University. According to the agreement, Harbin Engineering University would on the one hand train more talents in nuclear power for  China Guangdong Nuclear Power Group, and on the other hand, do more research. 

    It was said that the cooperation would promote the transformation of scientific research results into productivity through the combination of industry, academia and research.

    Several months after the agreement was signed, in December 2005, Harbin Engineering University established its College of Nuclear Science and Technology, and Zhang Zhijian was the head of this college. 

    Then, two years later, in 2007, China and France signed an agreement to co-build Tashan Nuclear Power Plant. 

    The construction of Unit 1 and Unit 2 of Tashan Nuclear Power Plant started in 2009, and Unit 1 entered commercial operation on December 13, 2018. 

    Then, if you check Zhang Zhijian’s bio, you would find that he had been the head of the College of Nuclear Science and Technology for ten years, from 2005 to 2015. 

    This overlapped with Tashan Nuclear Power Plant’s design and construction period. 

    During this period of time, it is very likely that Zhang Zhijian had formed a huge network with China Guangdong Nuclear Power Group and maybe other companies, institutions and officials involved in nuclear energy.

    So, Chinese commentator Zhou Xiaohui said in his article that he highly suspected that Zhang Zhijian’s suicide had something to do with the leak of Taishan Nuclear Power Plant, given he killed himself right after the CCP publicly responded to the leak, and given his close ties with China Guangdong Nuclear Power Group, as well as the entire nuclear power industry in China.

    Zhou Xiaohui said, maybe Zhang Zhijian had already been questioned by the authorities, or maybe he was given some sort of pressure, or maybe he was too frightened by the incident, or maybe he was afraid that he would be held responsible, or maybe there was something he needed to cover up with his death, etc. 

    While there’s nothing conclusive, the death of the top scientist coming days after the nuclear power plant mishap is certainly suspicious. A lot of questions remained unanswered. 

    Tyler Durden
    Sun, 06/27/2021 – 23:20

  • "America Is Not America Any Longer" – Giuliani Rages After Law License Suspension
    “America Is Not America Any Longer” – Giuliani Rages After Law License Suspension

    Authored by Ivan Pentchoukov via The Epoch Times,

    Rudy Giuliani, who served as the personal attorney for former President Donald Trump, on June 24 harshly criticized the decision by the New York State Bar to revoke his law license.

    “America is not America any longer. We do not live in a free state,” Giuliani said on Newsmax TV.

    “We live in a state that’s controlled by the Democrat Party, by [Gov. Andrew] Cuomo, by [New York City Mayor Bill] de Blasio, and the Democrats.”

    “We have a double standard,” he continued.

    “There’s no doubt, if I was representing Hillary Clinton, I’d be their hero.”

    The Appellate Division of the New York State Supreme Court concluded on June 24 (pdf) that Giuliani knowingly made false claims about the 2020 election and suspended his law license.

    “We conclude that there is uncontroverted evidence that respondent communicated demonstrably false and misleading statements to courts, lawmakers and the public at large in his capacity as lawyer for former President Donald J. Trump and the Trump campaign in connection with Trump’s failed effort at reelection in 2020,” the court said.

    Giuliani told Newsmax that he loves practicing law and wasn’t happy about the decision. The former New York City mayor said he has been part of “some of the most bitter litigation imaginable” without the kinds of complaints that led to the suspension of his license.

    Giuliani had served as Trump’s lawyer and spearheaded a legal effort after the conclusion of the Nov. 3 election alleging that Trump was fraudulently denied victory in several battleground states, including Nevada, Wisconsin, Michigan, Pennsylvania, and Georgia.

    As part of that effort, Giuliani spoke to lawmakers in several states, urging them to assert their constitutional power and intervene in the certification of presidential electors. None of those states ended up taking action. The U.S. Congress certified Joe Biden as the victor of the 2020 presidential election.

    In a statement after the court’s decision, Giuliani’s lawyers told The Epoch Times:

    “We are disappointed with the Appellate Division, First Department’s decision suspending Mayor Giuliani prior to being afforded a hearing on the issues that are alleged.

    “This is unprecedented as we believe that our client does not pose a present danger to the public interest. We believe that once the issues are fully explored at a hearing Mr. Giuliani will be reinstated as a valued member of the legal profession that he has served so well in his many capacities for so many years.”

    Trump panned the court’s decision.

    “Can you believe that New York wants to strip Rudy Giuliani, a great American Patriot, of his law license because he has been fighting what has already been proven to be a Fraudulent Election?” Trump said in a statement, describing the case as a “witch hunt.”

    Tyler Durden
    Sun, 06/27/2021 – 22:55

  • Facebook Could Be Held Liable For Sex Trafficking On Its Site, Texas Court Finds
    Facebook Could Be Held Liable For Sex Trafficking On Its Site, Texas Court Finds

    In what is hopefully the first step in a long road of accountability for the big tech giants, the Texas Supreme Court ruled on Friday that Facebook can be held liable if sex traffickers use the platform to target children.

    The court said that Facebook is “not a lawless no-man’s-land” and that it could be held accountable after 3 lawsuits that involved teenage sex trafficking victims, Fox News reported.

    The victims in the lawsuits were reportedly preyed on through the social media platform, which caused prosecutors to allege that the site was negligent in not blocking sex trafficking. 

    Facebook, as it does, tried to hide behind Section 230, which says that online platforms aren’t responsible for third party content. 

    But the court disagreed, stating: “Holding internet platforms accountable for words or actions of their users is one thing, and the federal precedent uniformly dictates that section 230 does not allow it. Holding internet platforms accountable for their own misdeeds is quite another thing. This is particularly the case for human trafficking.”

    Facebook told Fox News: “We’re reviewing the decision and considering potential next steps. Sex trafficking is abhorrent and not allowed on Facebook. We will continue our fight against the spread of this content and the predators who engage in it.” 

    Tyler Durden
    Sun, 06/27/2021 – 22:30

  • "Nike Is A Brand That Is Of China And For China" Says Company's CEO
    “Nike Is A Brand That Is Of China And For China” Says Company’s CEO

    Authored by Samuel Allgeri via The Epoch Times,

    The CEO of Nike said that the corporation is a “brand of China” earlier this week, amid recent allegations of the company being implicated with human rights violations conducted by the Chinese Communist Party (CCP).

    John Donahoe, the new Nike CEO, while speaking to Wall Street analysts, said that “Nike is a brand that is of China and for China” when responding to a question about competition from Chinese companies during a fourth-quarter earnings meeting, BBC reported.

    “We’ve always taken a long term view. We’ve been in China for over 40 years,” Donahoe said, expressing his optimism that the brand will continue to grow quickly in the world’s most populous nation.

    Referring to the apparel brand’s co-founder and ex-CEO, he said: “Phil [Knight] invested significant time and energy in China in the early days and today we’re the largest sport brand there.”

    Nike was recently criticized by a U.S. senator for turning a blind eye to allegations of forced labor in China, arguing they are making American consumers complicit in Beijing’s repressive policies.

    Speaking at a Senate Foreign Relations Committee hearing on China’s repression of Uyghurs and other Muslim minorities in its western Xinjiang region, Republican Senator Marco Rubio said many U.S. companies had not woken up to the fact that they were “profiting” from the Chinese government’s abuses.

    Sen. Marco Rubio (R-Fla.) on Capitol Hill in Washington on Feb. 23, 2021. (Drew Angerer/Pool/AFP via Getty Images)

    “For far too long companies like Nike and Apple and Amazon and Coca-Cola were using forced labor. They were benefiting from forced labor or sourcing from suppliers that were suspected of using forced labor,” Rubio said on June 10.

    “These companies, sadly, were making all of us complicit in these crimes.”

    Rights groups, researchers, former residents, and some Western lawmakers say Xinjiang authorities have facilitated forced labor by arbitrarily detaining around one million Uyghurs and other primarily Muslim minorities in a network of camps since 2016.

    Sophie Richardson, China director for Human Rights Watch, told the Senate panel that Beijing’s “extreme repression and surveillance” made human rights due diligence for companies impossible.

    Nike didn’t respond immediately to The Epoch Times’ request for comment.

    Tyler Durden
    Sun, 06/27/2021 – 22:05

  • How Has Trader Positioning Changed Since The FOMC Meeting
    How Has Trader Positioning Changed Since The FOMC Meeting

    As discussed previously (see “Fed Blinks: Projects 2 Rate Hikes By End Of 2023“, “What The Market’s Shocking Response Means For The Fed’s Endgame“) June’s FOMC meeting was hawkish in several dimensions and yet, after a brief initial shock, the market reaction appears to have been somewhat muted. This has raised the question of how positioning has adjusted ahead and in the aftermath of the FOMC meeting. To answer this question, JPMorgan’s Nick Panigirtzolgou updates some of his regular positioning indicators.

    Turning first to bonds, JPM’s quant makes the following observations:

    The short base in TIP ETF, proxied by the quantity on loan as a % of outstanding shares, declined sharply around the turn of the month, while short interest in the TLT ETF tracking longer dated nominal bonds declined relatively less and saw a sharp increase in the aftermath of the FOMC meeting.

    According to JPM, the effective short interest picture “is one of investors positioning for wider breakevens and this positioning if anything increased further after the FOMC meeting.”

    At the same time, US active bond mutual funds, which entered June with elevated betas, “appear to have reduced their duration exposure sharply in the aftermath of the FOMC meeting to levels closer to their longer-term averages. “

    The bond betas of risk parity funds, which were very elevated in early June, had already moderated somewhat heading into the FOMC meeting and declined further after the FOMC meeting following the burst of bond and equity volatility which spooked potential buyers. According to JPM, “the bond beta currently stands around its long-term average, suggesting risk parity funds are largely neutral on duration currently.”

    The bank also calculates that based on its estimates, of the previous cumulative addition of duration positions in 10y USTs from early 2019 to October 2020, just over half have since been unwound.

    However, at 5y maturities only just over a fifth of the previous cumulative addition of duration exposure from late 2018 to early 2021 has been unwound (as Goldman said in a note last last week “every sell-off in 5s ends up being the opportunity of the year”).

    And since there appears to have been relatively little change in the aftermath of the FOMC meeting, JPM notes that “there is still plenty of room for investors to add shorts before positions approach their late 2018 levels.”

    Next, looking at momentum-based signals that JPM uses to proxy for positons by momentum-based investors such as CTAs suggest that they were modestly long 10y UST duration and turned largely neutral after the FOMC…

    … while also adding to modest shorts in 5y. However, positions in both are relatively modest, suggesting CTAs could amplify volatility in either
    direction from here.

    What about other asset classes? Here JPM makes the following observations:

    In credit, the short interest on the LQD and HYG ETFs, the largest US HG and HY ETFs, respectively, again proxied by the quantity-on-loan as a % of outstanding shares, were already sitting at elevated levels heading into the FOMC meeting.

    Since the meeting, their short interest rose further suggesting elevated concerns among credit investors.

    Next, JPM looks at equities, where the short interest in the SPY ETF has increased markedly, suggesting investors have been adding equity downside protection.  And while momentum signals for US and non-US equities remain long, they have declined from their elevated levels earlier in the year.

    The momentum signals for US equities in particular were still at extreme levels, i.e. with a z-score above 1.5, in early April, and now stand at around 1.1. In other words, equity positions by momentum traders look less stretched.

    Elsewhere, short interest in both the EEM and EMB ETFs has if anything continued to decline (Figure 10), showing little appetite by investors to hedge EM exposures. This could suggest global investors’ EM exposures are relatively modest.

    Next, looking at commodity positions, JPM finds bullish sentiment has declined sharply: Figure 11 shows the net speculative long positions in commodity futures excluding gold from CFTC data, and shows a marked unwind in net longs. The red diamond shows a proxy for the position adjustment to the most recent days (based on the absolute change in open interest multiplied by the price change) suggesting net longs were further unwound after the FOMC meeting. This means elevated net longs that JPM had previously ssaid were a near term positioning headwind for commodities appears to have dissipated to a large extent.

    At the same time, JPM’s momentum signal for gold suggests CTAs have turned quite bearish…

    … and the magnitude of the z-score is approaching extremes seen in March 2020 and 2021, which to JPM suggest “there is a high risk that mean reversion or profit taking signals could kick in.” And since JPM prop has a habit of taking the other side of its public positions, what will most likely happen is another short squeeze sending gold sharply higher in the coming days.

    Finally, looking at FX and the all-important dollar, net spec positions have also adjusted significantly, and after starting the year with net shorts at a level last seen in 2013, these aggregate USD net shorts have largely unwound and turned close to neutral. JPM’s positioning proxy has turned modestly long USD after the FOMC meeting. Similarly, the bank’s momentum signals suggest net dollar shorts by CTAs were effectively closed after last week’s FOMC meeting.

    However, as JPM concludes, “neither the net spec positions nor our momentum signals suggest bullish dollar positions are starting to form a headwind for further dollar gains at this point, however.”

    Tyler Durden
    Sun, 06/27/2021 – 21:40

  • Labor Shortages And Inflation Plague California Businesses
    Labor Shortages And Inflation Plague California Businesses

    Authored by Jamie Joseph via The Epoch Times,

    There’s an irony to the new dining area at Chef Andrew Gruel’s Huntington Beach, Calif. restaurant. Although he’s now permitted to fill it to capacity under California’s lifted guidelines, he can’t find the staff to work it.

    Andrew Gruel, cofounder and executive chef at Slapfish restaurant, is pictured in Huntington Beach, Calif., on June 7, 2021. (John Fredricks/The Epoch Times)

    Statewide labor shortages and inflation are among the challenges restaurateurs are now facing as they crawl back to life following the pandemic-induced restrictions that hammered California’s hospitality industry.

    “First and foremost, a lot of people are making enough on unemployment right now that they’re waiting this out,” Gruel, owner and head chef of Slapfish in Huntington Beach told The Epoch Times.

    The demand for labor is a sharp contrast to last December, when the state banned indoor and outdoor dining for the second time.

    Hospitality workers “hit rock bottom,” prompting Gruel to launch a GoFundMe page to support the embattled employees. He dispersed funds directly to restaurant workers and owners shortly after the ban went into effect, with donations exceeding $350,000.

    Now, that new empty dining area sits quietly in Gruel’s establishment, serving only as a reminder of the challenges he faces.

    “This was going to be kind of our newer… full-service oyster bar side,” he said.

    “They require so much labor that we’re only open five days a week now and only from [3 p.m.] to close, because we can’t get the servers, we can’t get the bartenders and the oyster shuckers.

    “And I’m not implying that’s laziness, a lot of people are saying, ‘Look, we were hired, fired, hired, fired, so many times since this pandemic started,’” he said, adding that many people don’t have confidence in keeping a job while California’s state of emergency (SOE) persists.

    To incentivize workers to apply, the restaurant is offering a $500 hiring bonus coupled with wages of up to $25 an hour, Gruel said.

    Restaurant Rebound

    Other efforts to help support the industry’s revival emerged earlier this in June.

    The California Restaurant Foundation, a nonprofit that invests in the state’s restaurant workforce, partnered June 14 with celebrity Chef Guy Fieri to surprise five small business owners with a $25,000 grant.

    Jennifer Lê, co-owner of Lêberry Bakery and Donut in Pasadena, was among the recipients.

    “We are so, so fortunate … the food industry has been hit hard, so badly, last year,” Lê told The Epoch Times.

    The restaurant industry in California is estimated to generate about $97 million annually with more than 76,000 eating and drinking establishments that employ 1.8 million people, according to the California Restaurant Association. In an economic Yelp report published last year, 61 percent of restaurants permanently closed, equating to 19,590 across the country.

    Lê said her bakery normally employs upward of a dozen people, but because of the labor shortage, is struggling to fill positions.

    Her partner, Raynard Ledford, is “like a chameleon,” she said, as he’s taken on several roles around the bakery to keep the business running.

    “Unfortunately … the minimum wage in Pasadena is $13.25, which is higher than much other surrounding areas. But, when you’re given government checks that are a little bit higher, we lost a few because of that; they’ve been home for a year.”

    Lê said she’s been searching two months for a skilled cake decorator, which is a central responsibility in her bakery offering custom cake designs.

    “I know of other places; they have a 50 percent shortage of staff,” she said. “They’re just doing the best they can and it’s unfortunate.”

    Beyond Eateries

    Restaurants are not the only ones struggling with a manpower deficit.

    Brad Goehring, a wine grape grower in Lodi, told The Epoch Times the labor shortage—coupled with the state’s agricultural regulations—place a burden on small farmers and ranchers.

    “We’re just heavily overregulated, the cost of labor is minimum wage keeps going up, and our costs and administrative responsibilities keep going up. It’s really become a burden to be an employer in California,” Goehring said.

    The “unemployment all by itself” isn’t the entire reason workers aren’t returning, he said, adding: “there’s too many incentives not to come back to work,” referencing the pandemic assistance as well.

    It all resulted in Goehring’s vineyard being 50 percent short of its labor needs. Before the pandemic, there were at least 500 people picking grapes. There are now about 150.

    Time is another challenge, as the vines require consistent attention.

    Cantaloupe growers and packers are also actively hiring employees.

    “Business is highly dependent on labor, trucking, paper products, and wood pallets. All of them are suffering from labor shortages,” Erik Wilson, who owns a spraying business and grows cantaloupes told The Epoch Times. “Then, enter the drought and it’s like getting hit in the face and stomach.”

    A shortage of paper products and pallets have created a new set of challenges as harvesters are unable to transport product to stores without them, resulting in demand-driven inflation.

    “Just simple wood pallets have doubled in prices there’s almost a shortage of them,” Wilson said.

    Inflation Impacts

    Some forecasts predict the inflation rate will increase to 2.9 percent, up from a previous 2.3 percent estimate.

    It’s a concern for business owners such as Gruel.

    “We’re seeing an increase in prices across the board,” he said, adding that Slapfish will soon have to reform its menu to adjust for labor and inflation cost.

    “Food distributors can’t find people to pack the trucks, they can’t find people to load the trucks, they can’t find people to drive the trucks, food processors can’t find people to process anything.”

    Slapfish cofounder and executive chef Andrew Gruel washes floors at the Huntington Beach, Calif., location on June 7, 2021. (John Fredricks/The Epoch Times)

    Seafood restaurants such as Slapfish are facing an increase in the cost of lobster and other seafood items. Gruel said lobster went from $18 a pound up to $40 “virtually overnight,” because “a lot of the boats couldn’t go out, or because the cost of fuel made it inefficient for the boats to go out, people weren’t dropping traps in the water.

    “Our biggest item that we sell is lobster, we are very fortunate, because we’re integrated through the supply chain. So, we’ve been able to buy some future on lobster before these issues. But because the processing facilities couldn’t find anybody to pick the lobster, then it was a perfect storm,” he said.

    “I think that we’re going to see hiccups through the supply chain for a year, two years, I don’t think we’re going to see normalcy, I fear,” Gruel said.

    “In an industry like the restaurant industry, where margins are either nonexistent or incredibly thin, you rely on projections and analysis.

    Gruel said when businesses “cannot project and analyze purchases and labor based on variable conditions that you can’t control” it makes it difficult to run a business.

    Added Wilson: “I don’t know how we’re going to get that inflation under control because people don’t think about the smallest things like wooden pallets or cardboard boxes and things that are all part of the process of getting the food from the field to a fork.”

    Tyler Durden
    Sun, 06/27/2021 – 21:15

  • "What If We Are Wrong": Goldman Reruns Market Forecasts Assuming Its Key Assumptions Are All Wrong
    “What If We Are Wrong”: Goldman Reruns Market Forecasts Assuming Its Key Assumptions Are All Wrong

    Halfway through 2021, the S&P 500 closed at an all time high and stands just 1% below Goldman’s year-end price target of 4300.

    So far so good, but as the bank’s chief equity strategist David Kostin concedes, his forecasts are conditional on macro assumptions: “Inflation will diminish, interest rates will rise, and a portion of President Biden’s fiscal plan will pass into law.” And, as Kostin writes in his Weekly Kickstart note, “this future is not guaranteed” and as a result, Kostin’s recent client discussions have focused around the risks to the bank’s baseline macro forecast.

    To ease client nerves, Kostin, considers three “what if” scenarios that each focus on a key macro assumption and explore the implications of alternative outcomes for US equity returns, earnings, and valuations:

    1. “What if inflation is not transitory,”
    2. “What if interest rates fall or rise more than we expect,” and
    3. “What if tax reform does not materialize?”

    So starting at the top, here are Kostin’s thoughts first on…

    1. “What if inflation does not prove transitory?”

    Goldman economists’ – just like the Fed – forecast assumes that the recent surge in inflation will prove transitory and core CPI will decline to 2.3% next year from the most recent print of 3.8% (Bank of America here is a major outlier expecting far higher inflation for the next 2-4 years). To justify its view, Goldman’s chief equity strategist says that economists’ “trimmed core PCE” shows that outliers had an outsized effect on the recent spike in inflation, and they attribute most of the above-consensus inflation readings to temporary re-opening factors that should subside within the next 3-6 months (which is bizarre in a world where container shipping rates continue to rise at an exponential pace confirming supply chains remain hopelessly broken). In addition, they believe labor supply will rebound significantly by year-end as coronavirus concerns continue to diminish and temporary supplemental unemployment benefits expire. This should ease wage pressures and reduce investor concerns about persistently high inflation in coming years.

    Ok, but what if none of this leads to lower prices?

    As Kostin admits, “higher inflation than we expect would boost sales but weigh on corporate profit margins.Inflation has been positively correlated with sales but negatively correlated with margins.” Rising input costs, including wages, could weigh on margins if companies fail to raise prices sufficiently to offset inflation. As discussed previously, many firms had begun taking price action but also expect inflation to be transitory. Based on Goldman’s top-down model, each percentage point of core CPI inflation above our forecast would lift S&P 500 sales growth by about 1 percentage point, reduce net profit margins by about 10 bp, and, for moderate changes in inflation, on net leave S&P 500 EPS unchanged relative to our baseline.

    Persistently high inflation would also “represent a substantial headwind to valuation multiples”, Kostin admits, adding that “elevated inflation would likely lead to more Fed tightening than we now expect, raising rates and reducing equity valuations.” Currently Goldman economists believe the Fed will announce in December that tapering will begin in early 2022 and Fed funds hikes will start in 2H 2023. As a result, Kostin expects the S&P 500 P/E will be roughly flat during the next year, resulting in equity prices appreciating roughly in line with EPS growth.

    That said, it is certainly true that historically US equities have performed best in low inflation environments. Since 1960, the median annualized real S&P 500 return during periods of low inflation has been 15% vs. 9% in periods of high inflation. In periods of high inflation, stocks have performed better alongside falling inflation (15%) than alongside rising inflation (2%) (we discussed this in “Goldman’s Clients Are Asking How Various Inflation Regimes Affect Stocks: Here Is The Answer“)

    Elevated inflation would boost the relative performance of stocks with high pricing power. The performance of high (GSXUSHGM) vs. low (GSXULVGM) pricing power stocks has been volatile in recent weeks alongside shifting investor views on inflation risk. At the sector level, high inflation has historically corresponded with the outperformance of the Health Care, Energy, Real Estate, and Consumer Staples sectors.

    2.“What if interest rates fall or rise more than we anticipate?”

    Goldman’s baseline 2021 S&P 500 price target of 4300 assumes that the 10-year Treasury yield will rise to 1.9% by end-2021 and that the P/E multiple remains stable around 22x. The bank’s rates strategists expect the increase in nominal Treasury yields will be led primarily by real rates and driven in part by higher global bond yields. Kostin expects the equity risk premium (ERP) will decline in the second half of this year, offsetting some of the impact of higher rates on equity valuations and leading to a roughly flat P/E multiple through year-end.

    In other words, if – all else equal – interest rates remain roughly flat through the end of this year, Goldman’s S&P 500 dividend discount model (DDM) would suggest a fair value of 4700, or 9% above the bank’s current baseline price target of 4300. If rates fail to rise because of weakening growth, then lower earnings or a higher ERP would suggest a lower S&P 500 price despite lower interest rates. However, holding baseline ERP constant, a 10-year US Treasury yield of 1.6% (the 3-month average) would lift Goldman’s DDM-implied fair value estimate to around 4700. Using the bank’s 2022 EPS estimate of $202, this would imply an NTM P/E of 23x.

    Under a different scenario, if interest rates were to overshoot Goldman’s forecast and end the year at 2.5%, but nothing else were to change, the bank’s S&P 500 DDM would imply a fair value of just 3550, or 17% below today’s price. Goldman economists expect the Fed will begin tapering its current monthly debt purchases in early 2022. This decrease in demand will likely coincide with more deficit spending and potentially greater bond issuance following the passage of President Biden’s infrastructure bill. Holding baseline ERP and EPS growth forecasts constant, Kostin says that the bank’s DDM would imply a P/E multiple contraction to 18x.

    3.“What if tax reform does not pass?”

    Kostin’s baseline earnings forecast assume that a portion of Biden’s full tax proposal will become law by year-end and take effect in 2022, reducing S&P 500 EPS by 5% relative to the forecast under current tax law. Goldman’s political economist expects that the federal statutory corporate tax rate will be raised to 25% from 21%, rather than the 28% rate proposed by Biden. He also believes that roughly half of the proposed foreign income tax hike will become law and that the capital gains tax rate for upper income individuals will be raised to 28%. Based on these assumptions, Kostin expects the S&P 500 will generate EPS of $202 in 2022 (+5% growth vs. 2021) and half the 10% EPS growth anticipated under current tax policy which sees EPS of $212 in 2022.

    Using Goldman’s baseline year-end 2021 P/E forecast of 21.3x, a “no tax reform” scenario would lift the bank’s 2022 S&P 500 EPS estimate and our year-end 2021 S&P 500 fair value estimate by 5%, supporting a price target of 4500.

    As Kostin notes, a failure to lift corporate and capital gains tax rates would generally favor Growth stocks, an assumption few find questionable. Digging deeper, although the ultimate implications of corporate tax reform are hard to predict without knowing which parts of the proposal will be enacted and in what size, it is likely that foreign-facing sectors with low effective tax rates including Communication Services, Info Tech, and Health Care appear most vulnerable. With regards to capital gains taxes, Growth stocks such as those in the Tech sector have generated the strongest returns in recent years, suggesting the largest potential risk from tax-related investor selling ahead of a potential tax hike later this year.

    Tyler Durden
    Sun, 06/27/2021 – 20:50

  • FDA Adds Warning About Heart Inflammation To COVID-19 mRNA Vaccines
    FDA Adds Warning About Heart Inflammation To COVID-19 mRNA Vaccines

    By Jack Phillips of The Epoch Times

    A young woman receives a COVID-19 vaccine

    The U.S. Food and Drug Administration (FDA) added a warning about the risk of developing heart inflammation to information about the Moderna and Pfizer COVID-19 vaccines.

    The FDA announced earlier this month that it would add the warning after the Centers for Disease Control and Prevention (CDC) had reported that more cases of heart inflammation—either myocarditis or pericarditis—were found in young adults and children after they received the vaccines, which use mRNA technology.

    On June 25, the agency said that it would add revisions to its patient and provider fact sheets about the “increased risks of myocarditis (inflammation of the heart muscle) and pericarditis (inflammation of the tissue surrounding the heart) following vaccination” using the Pfizer or Moderna COVID-19 shots. The Pfizer or Moderna vaccines use mRNA technology and require two doses, whereas the vaccine made by Johnson & Johnson uses an adenovirus and requires a single dose.

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    Still, health officials have said that the risks of developing heart inflammation are outweighed by the vaccine’s benefits.

    “The risk of myocarditis and pericarditis appears to be very low given the number of vaccine doses that have been administered,” Janet Woodcock, the acting FDA commissioner, said in a statement last week. “The benefits of COVID-19 vaccination continue to outweigh the risks, given the risk of COVID-19 diseases and related, potentially severe, complications.”

    The warning issued by the FDA says that there may be increased risks “particularly following the second dose and with [the] onset of symptoms within a few days after vaccination.”

    “Additionally, the Fact Sheets for Recipients and Caregivers for these vaccines note that vaccine recipients should seek medical attention right away if they have chest pain, shortness of breath, or feelings of having a fast-beating, fluttering, or pounding heart after vaccination,” the agency said. “The FDA and CDC are monitoring the reports, collecting more information, and will follow-up to assess longer-term outcomes over several months.”

    COVID-19 is the disease caused by the CCP (Chinese Communist Party) virus.

    There have been more than 1,200 cases of pericarditis or myocarditis in individuals who are aged 30 or younger who have received the vaccine doses, according to the latest CDC findings last week.

    The case rate, based on submissions to the FDA- and CDC-operated Vaccine Adverse Event Reporting System, is higher than expected in young males.

    For males between the ages of 12 and 17, the expected number of cases of heart inflammation following dose one using a 21-day window were two to 21. The observed number of cases was 32 through June 11. For males between the age of 18 and 24, the expected number of cases using the same parameters were three to 34. The observed number of cases was 47.

    Representatives for Pfizer and Moderna didn’t respond to requests for comment by press time.

    Tyler Durden
    Sun, 06/27/2021 – 20:25

  • Biden Orders Series Of Airstrikes Along Syria-Iraq Border
    Biden Orders Series Of Airstrikes Along Syria-Iraq Border

    The Biden administration has confirmed the president ordered Sunday night airstrikes on multiple militant encampments along the Iraq-Syria border in order to “protect US personnel” – as an official Department of Defense statement in the aftermath indicated.

    “At President Biden’s direction, U.S. military forces earlier this evening conducted defensive precision airstrikes against facilities used by Iran-backed militia groups in the Iraq-Syria border region,” the late Sunday statement reads. It was reportedly a “response” to ongoing drone attacks conducted by Iran-allied forces in both countries.

    Such airstrikes began growing common place during the last year of the Trump administration amid growing tit-for-tat attacks between Iranian-backed Iraqi militias, but has been rare for the Biden White House, only happening one prior time in February that was publicly disclosed.

    The DoD press statement added of this latest attack: “The targets were selected because these facilities are utilized by Iran-backed militias that are engaged in unmanned aerial vehicle (UAV) attacks against U.S. personnel and facilities in Iraq.”

    “Specifically, the U.S. strikes targeted operational and weapons storage facilities at two locations in Syria and one location in Iraq, both of which lie close to the border between those countries. Several Iran-backed militia groups, including Kata’ib Hezbollah (KH) and Kata’ib Sayyid al-Shuhada (KSS), used these facilities.”

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    The US military additionally called it “necessary” – saying that “President Biden has been clear that he will act to protect US personnel.”

    So far there’s no immediate reports of casualties, which will likely be coming in throughout the night. Some local sources are suggesting multiple dead and injured…

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    Crucially, nuclear talks with Iran have already entered a very uncertain end phase in Vienna – this action will likely further complicate negotiations, particularly if Tehran perceives that Biden is bent on ramping up anti-Iranian military actions once again in both Iraq and Syria, which nearly sucked Iran and the US into direct war, especially following the January 2020 assassination of Gen. Qassem Soleimani. 

    Tyler Durden
    Sun, 06/27/2021 – 19:56

  • Iran Refuses To Grant IAEA Access To Nuclear Facilities: "Agreement Has Expired"
    Iran Refuses To Grant IAEA Access To Nuclear Facilities: “Agreement Has Expired”

    At a moment the clock is said to be winding down toward a nuclear deal in Vienna, with both sides expressing increased frustration that things are dragging on too long, Tehran is playing hardball with the International Atomic Energy Agency (IAEA). 

    Once again it’s over access to the country’s nuclear sites according to prior arrangements: “The speaker of Iran’s parliament said on Sunday Tehran will never hand over images from inside of some Iranian nuclear sites to the U.N. nuclear watchdog as a monitoring agreement with the agency had expired, Iranian state media reported,” Reuters writes Sunday.

    Via Associated Press

    In February Iran had struck a deal for a three month extension which allowed IAEA inspectors access to remote cameras and images from sensitive facilities. This came after months of Tehran officials threatening to boot IAEA monitoring from the country altogether.

    “The agreement has expired… any of the information recorded will never be given to the International Atomic Energy Agency and the data and images will remain in the possession of Iran,” said Iranian Parliament Speaker Mohammad Baqer Qalibaf.

    Over the weekend, just as the extension is set to expire, the IAEA demanded an “immediate response” over the “possible continued collection, recording and retention of data.”

    But Iran’s position is that it’s fulfilled its obligations and therefore is not required to comply with such a request. Iranian ambassador to the IAEA, Kazem Gharibabadi, made clear to the UN watchdog that the Islamic Republic is under no such obligation.

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    This is yet the latest – but perhaps most significant – obstacle which could derail talks in Vienna. Currently there’s pressure on both sides to finalize a deal before Iran’s newly elected president, Ebrahim Raisi – a hardline protégé of the Supreme Leader – takes office in early August.

    Tyler Durden
    Sun, 06/27/2021 – 19:30

  • Rapinoe No Victim: US Women's Soccer Team Earned More Than Men's Team
    Rapinoe No Victim: US Women’s Soccer Team Earned More Than Men’s Team

    Authored by Jennifer Braceras via InsideSources.com,

    Players on the U.S. women’s national soccer team are paid more than their counterparts on the men’s team. But Megan Rapinoe isn’t letting facts stand in the way of her p.r. campaign to pressure the United States Soccer Federation (USSF) into increasing her salary.

    In March, the gold medalist and two-time World Cup Champion complained to Congress and to President Joe Biden that she is a victim of pay discrimination. Later this month, she’ll take her case to the court of public opinion in a new documentary, LFG, that will begin streaming on HBOMax.

    Unfortunately for Rapinoe, the only court of law to rule on the matter found her claims wanting.

    In 2019, Rapinoe and her teammates sued USSF in California federal court, seeking more than $66 million in damages for alleged wage discrimination and discriminatory working conditions. The court found sufficient evidence to allow the players to proceed with their claims of unequal travel and hotel accommodations, medical support, training, and other support services. But it dismissed the players’ claims of pay discrimination, finding that the women’s team earned more than the men’s team on both a cumulative and per-game basis.

    It turns out, the Women’s National Team earned approximately $24 million overall; the Men’s National Team earned only $18 million. The average take per game was $220,747 for the women’s team, compared to $212,639 for the men’s team. And while the individual female plaintiffs made an average of $11,356 to $17,416 per game, the four highest-paid male players made an average of $10,360 to $13,964 per game.

    Facts are stubborn things. And so, Rapinoe and her teammates argued that, even though they received more money than their male counterparts, they were, nevertheless, victims of discrimination. Why?  Because they would have earned even more had they been paid under the men’s pay structure, which offers higher bonuses.

    The collective bargaining agreement for the men’s team is an incentive-based, pay-to-play contract, under which only players who are selected for training camps or particular competitions have a chance to earn bonuses. The court found that the women’s team, in fact, rejected an offer to be paid under the same structure as the men, opting instead for higher base pay and greater stability in the form of yearly salaries, paid irrespective of training camps attended or games played.

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    Late last year, plaintiffs and USSF settled the unequal working conditions portion of the case, with the federation agreeing to provide the female players with travel arrangements, hotel accommodations, staffing, and venues on par with the male athletes. Good for the women’s team. They deserve it. And that should be the end of the matter.

    In America today, however, victim status is the coin of the realm. And so Rapinoe and her merry band of warriors fight on, addicted to fame, praised by celebrities such as Jamie Lee Curtis and politicians like Vice President Kamala Harris, and feted by elites in Hollywood and Washington alike.

    In April, the players appealed the trial court’s pay discrimination ruling to the U.S. Court of Appeals for the 9th Circuit, pressuring USSF to mediate the baseless claims ahead of the summer Olympics in Japan. And earlier this month, 13 Democratic senators sponsored a bill to withhold federal funds from the 2026 FIFA World Cup unless USSF increases pay for the women’s team. If enacted, the Give Our Athletes Level Salaries (GOALS) Act would prohibit funding for USSF, FIFA, and for host cities and state or local organizations assisting with the event, which is set to be hosted jointly by the U.S., Canada, and Mexico.

    Will USSF capitulate to Rapinoe’s demands in order to avoid a sideshow in Tokyo next month and to prevent the loss of its World Cup funding? Quite possibly. But don’t let Megan Rapinoe fool you: A victim of sex discrimination, she is not.

    Tyler Durden
    Sun, 06/27/2021 – 19:00

  • White House Responds To Report Saying Biden To Reverse Trump's Golan Heights Policy
    White House Responds To Report Saying Biden To Reverse Trump’s Golan Heights Policy

    On Thursday the Washington Free Beacon published a story with the headline: “Biden Admin Walks Back US Recognition of Golan Heights as Israeli Territory.” This set off a wave of rumors and follow-up reports, culminating in an official Biden administration response on Friday. 

    The initial report had stated: “The Biden administration is walking back the United States’ historic recognition of Israeli sovereignty over the contested Golan Heights region along Israel’s northern border, a significant blow to the Jewish state and one of the Trump administration’s signature foreign policy decisions.” But the State Department’s Near Eastern Affairs Department tweeted in response as the claim began to spread: “US policy regarding the Golan has not changed, and reports to the contrary are false.”

    And separately a State Department official told Middle East Eye that “Our policy on Golan has not changed.”

    Perhaps most interesting in all this is that the original report forced a statement from the Biden administration affirming that it intends to keep yet another controversial Trump policy that the former president was initially fiercely criticized for, particularly from Democratic circles. It’s increasingly apparent that when it comes to Trump’s most previously contested foreign policies, Biden is now actively upholding and defending them.

    Recall that in March 2019 Trump changed the longstanding US policy, signing a proclamation of formal US recognition over the Golan Heights. 

    Netanyahu had said at the time “Israel has never had a better friend than you.” This was also amid the big move to recognize Jerusalem and the Israeli capital, which involved moving the US Embassy from Tel Aviv.

    Months ago, soon after Biden took office, among the first things that his team did was to assure the world that it would not reverse a this key Trump policy vis-a-vis Israel, as Roll Call reported at the time:

    …President Joe Biden intends to keep the U.S. Embassy to Israel in Jerusalem, where it was relocated during the Trump administration. The issue of where to locate the embassy has been a fixture of negotiations over Israeli and Palestinian territory and authority for decades.

    A White House spokesperson confirmed to CQ Roll Call the administration’s intentions, following up on a query from last Friday’s White House press briefing.

    “The U.S. position is that our embassy will remain in Jerusalem, which we recognize as Israel’s capital,” the spokesperson said. “The ultimate status of Jerusalem is a final status issue which will need to be resolved by the parties in the context of direct negotiations.”

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    The Golan issue in particular stems from a cross-administration policy which has sought to deny Syria’s Assad full control over a sovereign state. 

    The progressive wing of the Democratic party had urged Biden to reverse course on Trump’s major Israel policies; however, the White House appears to have now given its definitive answer that nothing will fundamentally change from the prior administration. 

    Tyler Durden
    Sun, 06/27/2021 – 18:30

  • Decentralized Finance (DeFi) 101
    Decentralized Finance (DeFi) 101

    Authored by Chris McCann via Race Capital,

    Decentralized Finance (DeFi) is redefining the future of finance. There is a major shift going on in the underlying infrastructure powering financial applications, and it’s changing the way we think about permission and control, transparency and risks.

    DeFi is a developing market sector within the intersection of blockchain technologies, digital assets, and financial services. According to DeFi Pulse, the value of digital assets locked into DeFi applications grew 10X from less than $1 billion in 2019, to over $10 billion in 2020, and over $80 billion at its peak thus far in 2021. Yet the DeFi applications and underlying infrastructure are still in its nascent stage of development.

    The goal of this report is to provide an introduction of the new emerging area of DeFi infrastructure powering DeFi apps today. While it’s easy to get caught up in the hype and speculation within the space, I’ll focus on the key components of DeFi applications, their key differentiation compared to traditional finance, potential risks, and longer term implications these DeFi apps are causing.

    Major Structural Commonalities Across DeFi Apps

    DeFi apps are financial applications with no central counterparties. In practice this means there is no institution (e.g. banks) you are interfacing with to access these financial applications; instead users interface directly with the programs (e.g. smart contracts) on top of the protocol itself. For more of a DeFi 101 primer I highly recommend this report.

    The major categories of DeFi apps include decentralized exchanges, lending platforms, stablecoins, synthetic assets, insurance, among others. While diverse in scope, all of these DeFi apps share a major set of commonalities including:

    1. Using underlying blockchains as the core ledger

    2. Open source and transparent by default

    3. Interoperable and programmable (composability)

    4. Open and accessible to all (permissionless)

    Using Underlying Blockchains as the Core Ledger

    Compared to traditional financial applications which use core banking systems (Fiserv, Jack Henry, FIS, etc.) as the underlying ledgers of record, DeFi apps use blockchains as their underlying core ledger.

    A few of the most prominent blockchains used to build DeFi apps include Ethereum, Solana, and Binance Chain, etc. These underlying blockchains store the ledger state of what is deposited into the DeFi apps, what is stored within the smart contracts, all of the transactions, and withdrawals.

    All of the core accounting functions to ensure matching inputs and outputs are handled by the blockchain itself, the DeFi apps don’t need to create external systems to reconcile balances, because all of the transactions are queryable across the various block explorers.

    In addition, compared to the traditional system there is no separate process of settling & clearing transactions. The transaction processing, clearing, and settling all happen at the same time when the transaction is broadcasted. Although it is advisable to wait around ~21 blocks or more to ensure finality on the blockchain itself.

    Open Source and Transparent by Default

    Compared to traditional financial applications which are all closed-source and built on top of proprietary systems, DeFi applications are typically entirely open sourced and built on top of open underlying blockchains.

    Banking “APIs”

    This causes three interesting properties:

    1. Composability — The DeFi app itself can be forked, remixed, and reused in many other applications (more on this below).

    2. Transparency — Since the DeFi app is open source, it is completely auditable to know exactly what the smart contract is doing in terms of functions, user permissions, and user data.

    3. Auditability — Since the underlying blockchain itself is open sourced, the entire flow of funds is completely auditable including collateral in the system, trading volume, defaults, etc.

    Unlike the traditional financial system (which is opaque), runs on a fractional reserve system, and is prone to market shocks — the DeFi system is completely transparent and over-collateralized — which allows DeFi companies to weather downturns much more efficiently.

    Interoperable and Programmable

    In order for developers to gain the trust of users, the majority of the DeFi apps are completely open source — including the front end and the smart contracts themselves. In addition, since DeFi apps all run on top of a common platform (the underlying blockchain) these DeFi apps are completely interoperable with each other and can be programmed to work with any other DeFi app in the ecosystem.

    This is commonly referred to as the “money legos” or “composability” aspects of DeFi. All of these DeFi apps are like individual lego pieces which can be remixed to work with other lego pieces to build something new.

    Contrast this to the traditional financial system where;

    • Infrastructure Fragmentation — Traditional financial apps are not built on top of common infrastructure.

    • Siloed Applications — Traditional financial apps are typically proprietary to one banking institution. For example, all of Wells Fargo’s “fintech apps” work together but not across different banking institutions.

    • Developer Unfriendly — Traditional financial apps are not made for other developers to build services on top of.

    The traditional financial system does have common standards; however, it’s extremely hard to reach consensus across market participants because financial institutions view their software as their competitive moat instead of using products as a differentiating factor.

    One of the biggest reasons why we have seen so much innovation within the DeFi space is because the systems are interoperable, it allows the developer ecosystem to have more creative expression on the products and services they create. On top of this, developers don’t need to waste time reinventing the wheel, but rather can build upon common frameworks and focus on the things that make their products special.

    Open and accessible to all

    With traditional financial applications, new users typically need to go through a lengthy onboarding process, income verifications, credit checks, or even in person meetings — just to be able to use a given financial product.

    Because of these arbitrary rules set by financial institutions, these onboarding processes are prone to bias including lending descrimination, denial of basic banking services, opening credit lines without consent, charging illegal fees, etc.

    With DeFi applications, all you need is a wallet address to interact with these systems. DeFi apps don’t ask for income verification, they don’t need credit checks, and in most cases they don’t even need to know who you are outside of the wallet address you are using.

    This is commonly referred to as DeFi apps being permissionless. If you have the funds inside your wallet for the transaction you want to do, you can do it. There are no institutions or intermediaries to stop or deny service to you. It doesn’t matter what your background is or what country you come from, DeFi apps do not discriminate.

    This is one of the most under-appreciated aspects of DeFi products.

    Traditional Fintech Architectures vs. DeFi Architecture

    Here is a more architectural diagram on the main technical differences between a traditional fintech app and DeFi app (simplified for brevity’s sake):

    Here is a more direct comparison chart on some of the key differences between centralized and decentralized financial applications:

    DeFi Infrastructure — Market Map

    Below is a market map of two different DeFi ecosystems, one built on the Solana ecosystem and the other built on the Ethereum ecosystem.

    The reason why I am picking these two ecosystems to focus on is to show the breadth of DeFi apps being built across two different underlying protocols. I also believe Solana is the most interesting new layer one protocol because of its high transaction throughput (50K+ transactions per second), sub second latency & transaction confirmation times, and fast growing ecosystem of developers building DeFi apps on top of the Solana protocol.

    While similar in structure, each underlying protocol has its own ecosystem built on top which is largely independent of the other. Below are some of the further explanations of each layer and the tradeoffs between them.

    Base Layer (Layer One)

    The base layer is the blockchain in which the core ledger itself sits. Ethereum is the most dominant layer one today, and Solana is the most promising new entrant with faster transaction speeds, more throughput, and cheaper transactions.

    Node Infrastructure

    A never ending amount of data needs to be queried about the underlying ledger (retrieving blocks, finding transactions, syncing data, writing transactions, etc). In the Ethereum ecosystem, a whole industry sprung up to solve this need (Infura, Alchemy, etc.).

    Contrast this with Solana where the underlying ledger is fast enough and in sync enough that teams can just query Solana’s RPC nodes directly (this might not last forever though).

    Layer Two

    On Ethereum, there are various layer two solutions primarily used for scaling since Etheruem itself cannot handle all of the transactions on itself. Two of the promising scaling solutions include Matic, Optimism, among others.

    On Solana, since there is only one layer to build upon (no layer 2 scaling solution needed) there are no specialized integrations needed and no mismatches with the underlying ledger which is processing settlement.

    Order Book Aggregation

    Unique to Solana, there is an additional layer occupied by a DeFi project named Serum which provides a CLOB (Central limit order book) that is used by all of the DeFi projects built on top.

    When new DeFi projects are built on top of Solana (DEX, AMM, Options, etc.), they can pull orders from Serum and push orders back into Serum, greatly reducing the cold start challenge most new financial applications face.

    The best way to think about it is to think of it as “networked liquidity” and an “order management” system which is used by the majority of projects within the Solana ecosystem.

    One of the more innovative examples of combining a CLOB (Serum) and an AMM is Raydium (very similar to Uniswap v3). The combining of these systems allows for passive LPs with active market making using Serum.

    DeFi Toolset

    There are a set of common tools needed to operate most of these DeFi apps, either from the perspective of developers or end users. These services don’t have direct traditional finance analogies but they include:

    • Wallets — The main interface people use to store assets & interface with DeFi apps.

    • Oracles — On-chain data feeds DeFi apps use to reference prices and execute transactions against (example: liquidations).

    • Block Explorers & Analytics — Tools like Block Explorers were created to allow people to query the blockchain ledger itself directly. These are used most often when verifying transactions.

    • Stablecoins — The two main assets used in DeFi ecosystems include the underlying native protocol token (ETH or SOL) and ideally on-chain stablecoins (USDC, Dai, or Pai).

    • Front-Ends — A new emerging layer which creates easy to use front-end applications to interact with multiple DeFi projects at once, or to simplify transactions. This includes both Zapper.fi within the Ethereum Ecosystem or Step Finance within the Solana ecosystem.

    DeFi Apps

    The DeFi apps themselves are composed of all of the core financial applications which can be used directly, or embedded into other various apps within the crypto ecosystem.

    Potential Missing Pieces of DeFi Infrastructure

    When comparing and contrasting DeFi infrastructure with traditional financial infrastructure, there were a few pieces that don’t exist yet in the decentralized world that could be interesting to explore.

    A few to highlight below:

    • Consumer Applications — In the traditional financial world, consumers typically act with consumer apps (ex. Robinhood, Chime, Transferwise) not the underlying protocols themselves. The front-ends of the DeFi space could be greatly improved and intermediate much more of the total consumer experience. In general, the UI/UX of most DeFi apps are still very difficult to use from a consumer perspective.

    • CRM — The DeFi space doesn’t really have a concept of customer relationship management nor typically collects any amount of consumer data. While great from a privacy perspective, there is great value in understanding the customer better.

    • Notifications — Notifications or alerts don’t really exist at all in the DeFi space at all. On a more broader level there aren’t any great methods to communicate with users either.

    • Product Analytics — There are tools to measure blockchain activity, but not to measure engagement within DeFi applications.

    • Security — DeFi products do typically conduct security audits; however, none of the security audits guarantee the most common protections consumers are accustomed to in the traditional financial world. On top of this, the demand for security auditors outstrips the supply, so it’s a big bottleneck.

    • Transaction Rollbacks — In traditional finance, if you make a mistake, a financial institution can initiate a rollback of the transaction. This does not yet exist in DeFi.

    • Custody — Right now, most DeFi projects need to be interacted with from an individual wallet perspective. None of the custodians allow you to interact with DeFi apps.

    • Developer Platforms — Most of the developers in the crypto space are building right on top of the layer one protocol itself. There are no concepts of developer platforms or middleware just yet.

    • Embeddable Wallets — Wallets are seen as these external services, there aren’t any offerings of white-label wallets to embed these directly into the DeFi apps themselves. There are several initiatives such as Torus, but these are still in its infancy.

    • Identity — One of the biggest complaints from the traditional finance world about DeFi is the pseudonymity of users. Ideally there needs to be a way to keep out the bad actors while persevering consumer privacy.

    Future of Financial Applications

    After meeting hundreds of founders and seeing progress teams are making, one thing is very clear — the pace of innovation in DeFi is 10x faster vs. that of traditional fintech apps.

    In traditional finance:

    • The underlying ledgers are not open source nor developer friendly.

    • There are a whole host of “banking as a service” applications just to wrap underlying partner banks in developer friendly platforms.

    • Fintech apps are very challenging regulatory wise and typically take years of development before releasing a single product.

    Contrast that to DeFi where:

    • Everything is open source including the ledger itself.

    • All of the transactions are public.

    • Everything is built from the perspective of developers building applications on top of protocols.

    • New DeFi apps are built and released in weeks, not years.

    We at Race Capital believe that DeFi developers will forever change how the finance world works. We are incredibly bullish about the DeFi infrastructure stack and community.

    *  *  *

    If you are building the horizontal infrastructure layers of the new open source financial stack including: trading, lending, borrowing, and/or any horizontal tools all new DeFi projects will rely upon in the future, we want to chat with you. Send me a message > chris@race.capital

    Tyler Durden
    Sun, 06/27/2021 – 18:00

  • FAA Denies Boeing Permission To Move Forward In Certifying 777X Due To Serious Flight Test Incident
    FAA Denies Boeing Permission To Move Forward In Certifying 777X Due To Serious Flight Test Incident

    If it’s not one Boeing jet malfunctioning, it’s another.

    With Boeing facing an uphill climb in restoring the public’s confidence in its crash-prone 737MAX, the aerospace giant is facing fresh troubles, this time involving the updated version of the long-haul 777X jet which is facing additional testing because of what U.S. regulators called a serious test-flight incident and multiple other issues with software and inadequate data.

    In a sternly worded letter dated May 13, which was reviewed by The Seattle Times, the FAA warned Boeing it may have to increase the number of test flights planned and that certification realistically is now more than two years out, probably in late 2023.

    Two 777X flight-test planes are parked at Boeing Field on June 18.

    According to the report, the FAA cited a long list of concerns, including a serious flight control incident during a test flight on Dec. 8, 2020, when the plane experienced an “uncommanded pitch event” meaning the nose of the aircraft pitched abruptly up or down without input from the pilots. During the incident, flight-control software triggered the plane to move without pilots’ input, similar to the malfunction responsible for the two 737MAX crashes.

    Boeing has yet to satisfy the FAA that it has fully understood and corrected what went wrong that day.

    An FAA official said the drag on 777X certification is now “the subject of a lot of attention” at high levels both within the agency and at Boeing.

    “The FAA anticipates a significant impact to the level of regression testing, change impact analysis, and the potential to increase the number of certification flight tests that will need to take place,” the letter said according to Bloomberg. It was written by Ian Won, the acting head of FAA’s division overseeing Boeing.

    The FAA said in the letter it now expected the certification wouldn’t occur until mid to late 2023 and the work would take “additional resources” that could hamper other projects with the company. While the FAA doesn’t set the timing of certification work, relying on companies for that, the letter suggests the program could face delays.

    The latest delay will push the jet’s entry into commercial service into early 2024, four years later than originally planned.

    Separately, the FAA also issued a statement Sunday saying it “will not approve any aircraft unless it meets our safety and certification standards.”

    “Boeing remains fully focused on safety as our highest priority throughout 777X development,” a spokesperson at the U.S. planemaker said in a statement in response to the letter. “We are working through a rigorous development process to ensure we meet all applicable requirements.”

    The harshly-worded letter by the FAA is the latest in what has been a deteriorating relationship between the giant planemaker and its U.S. regulator prompted by issues that arose during the grounding of Boeing’s 737 Max after two fatal accidents. The FAA had previously begun using its own inspectors to approve newly built single-aisle planes and has taken multiple steps to increase oversight of the company.

    The FAA highlighted several concerns on the 777X, including a flight-control incident during a test flight on Dec. 8, 2020, when the plane experienced an “uncommanded pitch event.” That meant the nose of the aircraft rose or fell as a result of the control system.

    A similar issue triggered by a malfunction on the 737 Max pushed down that jet’s nose repeatedly during the two crashes that killed 346 people, prompting a sweeping review of how pilots interact with increasingly computerized flight-control systems. The Max was grounded for 18 months while it was redesigned.

    Bloomberg adds that the agency also told Boeing that a critical avionics system proposed for the airplane doesn’t meet requirements and expressed concern about proposed modifications involving late changes to both software and hardware in the electronics of the jet’s flight controls.

    Worse, in a hint of broader troubles for the 777X, the FAA said that European regulators are uneasy over parts of the plane’s design. “The European Union Aviation Safety Agency has not yet agreed on a way forward on the Model 777-9,” the FAA said in the letter. ​Which, of course, is understandable for a European regulator that would be delighted with pushing out its own competitor Airbus planes.

    ​Boeing announcement in January that it was postponing the 777X’s planned market entry to late 2023 was the latest in a string of delays for a jet originally slated to begin commercial service last year. Executives also disclosed that they were redesigning the jet’s actuator-control electronics at the behest of European regulators.

    “That’s still the plan”, Boeing’s Chief Executive Officer Dave Calhoun indicated in a June 3 presentation, weeks after the FAA letter.

    “That airplane, we are still confident will be certified in the fourth quarter of 2023,” Calhoun told a virtual Bernstein conference. The planemaker reset its timeline based on the 20-month review of the 737 Max and “architectural preferences” of both the FAA and EASA, he said.

    “So those are the important things with respect to how we do this,” Calhoun said. “We’ve given ourselves time to learn as we go through this.”

    Emirates President Tim Clark has repeatedly slammed Boeing for delaying the 777X program and has raised concerns over the model’s performance in desert conditions. Bloomberg reported in February that Clark’s airline could swap as many as a third of its 115 commitments for the 777-9 to the smaller Boeing 787 Dreamliner.

    Tyler Durden
    Sun, 06/27/2021 – 17:30

  • Hedge Fund CIO: "Our Growing Acceptance Of Ever Wilder Conspiracy Theories Has Numbed Us To Everything"
    Hedge Fund CIO: “Our Growing Acceptance Of Ever Wilder Conspiracy Theories Has Numbed Us To Everything”

    By Eric Peters, CIO of One River Asset Managemetn

    “In 18 incidents, described in 21 reports, observers reported unusual Unidentified Aerial Phenomena (UAP) movement patterns or flight characteristics. Some UAP appeared to remain stationary in winds aloft, move against the wind, maneuver abruptly, or move at considerable speed, without discernible means of propulsion. In a small number of cases, military aircraft systems processed radio frequency energy associated with UAP sightings.”

             – ODNI, Preliminary Assessment: Unidentified Aerial Phenomena
     
    “Sociocultural stigmas and sensor limitations remain obstacles to collecting data on Unidentified Aerial Phenomena (UAP),”  wrote the Office of the Director of National Intelligence. “Narratives from aviators in the operational community and analysts from the military and Intelligence Community describe disparagement associated with observing UAP, reporting it, or attempting to discuss it with colleagues.” Nothing new there.

    Throughout human history, those comfortable in the consensus have shown utter contempt for the lonely voices who threaten to upend the prevailing worldview. And yet, without those courageous enough to speak their truth, we would live in a perpetual Dark Ages. Such is the depth of our fear of change that we persecute the brave few, even as they drag us into a better future, kicking, screaming.

    It is too early to know whether these UAP represent anomalies of earthly origin, or an extraterrestrial intelligence. But for some mysterious reason, we appear finally prepared to consider the latter.

    How we react to news is often more interesting than the events themselves. Contact with an extraterrestrial intelligence would simultaneously represent the greatest risk and opportunity in human history – far surpassing the arrival of Columbus in the Americas.

    So why are we seemingly unperturbed by today’s possibility? Perhaps collapsing faith in institutions leaves us distrustful of anything we are now told. Maybe, our growing acceptance of ever wilder conspiracy theories has numbed us to anything, everything. Or possibly, we are already processing such profound change in politics and policy – which produced successive years of 15% US federal deficits, fully funded by the central bank, even as inflation soars and we expand infrastructure spending – that we have no remaining mental space for another alien.

    But no matter, back here in our earthly existence, it is a reminder to us traders and investors that no matter how momentous the change, it only matters for markets when for some mysterious reason it starts to matter.

    Back and Forth

    In a week when the US military released its report on Unidentified Aerial Phenomena, it is awfully hard to find the energy to write (or read) any more about today’s fiscal/monetary singularity. So I’ll keep the boring crap short: Two weeks ago, the Fed surprised markets by pulling forward its plans to escape today’s inflationary policy vortex by a quarter or two. Over-leveraged traders puked. This past week, markets more or less realized there is no escaping such a strong gravitational policy pull. This back and forth will be with us for years.

    First Encounter

    “The universe is a dark forest. Every civilization is an armed hunter stalking through the trees like a ghost, gently pushing aside branches that block the path and trying to tread without sound,” wrote Liu Cixin in his brilliant sci-fi novel, The Three Body Problem, exploring the complex risks and rewards of first contact with alien intelligence. “Even breathing is done with care. The hunter must be careful, because everywhere in the forest are stealthy hunters like him. If he finds another life – another hunter, angel, or a demon, a delicate infant to tottering old man, a fairy or demigod – there’s only one thing he can do: open fire and eliminate them.”
     
    “The inhabitants are all unprovided with any sort of iron, and they are destitute of arms, which are entirely unknown to them, and for which they are not adapted; not on account of any bodily deformity, for they are well made, but because they are timid and full of terror,” wrote Christopher Columbus in 1492. “But when they see they are safe, and all fear is banished, they are very guileless and honest, and very liberal of all they have. No one refuses the asker anything that he possesses; on the contrary they themselves invite us to ask for it. They manifest the greatest affection towards all of us, exchanging valuable things for trifles, content with the very least thing or nothing at all.”
     
    “Thus it pleased God to vanquish their enemies and give them deliverance,” wrote William Bradford in 1630, his first-hand account of an early battle, having arrived on the Mayflower. “And by His special providence so to dispose that not any one of them was either hurt or hit, though their arrows came close by them and on every side of them; and sundry of their coats, which hung up in the barricade, were shot through and through. Afterwards they gave God solemn thanks and praise for their deliverance and gathered up a bundle of their arrows and sent them into England afterward by the master of the ship and called that place the First Encounter.”

    Tyler Durden
    Sun, 06/27/2021 – 17:00

  • US Case Against Assange Struck Major Blow As Key Witness Admits He Lied
    US Case Against Assange Struck Major Blow As Key Witness Admits He Lied

    The US government’s case against Julian Assange may be on shaky legal ground after one of their main witnesses, Icelander Sigurdur Ingi Thordarson, admitted to fabricating key accusations contained in the DOJ’s indictment, according to stunning admissions to Stundin magazine.

    Sigurdur Ingi Thordarson Mynd: Sigtryggur Ari

    Thordarson, a documented sociopath and convicted pedophile who also engaged in a “wide-ranging financial fraud,” was recruited by US authorities as a key witness against Assange after he misled them into believing he was a close associate of the WikiLeaks founder. He also lied about his position within the whistleblower organization – admitting that he established “avenues of communication with journalists and had media pay for lavish trips abroad where he mispresented himself as an official representative of WikiLeaks.”

    He also admitted to stealing documents from WikiLeaks staff by copying their hard drives, including that of WikiLeaks lawyer Renata Avila, who worked for both the organization and Assange.

    “In fact he had volunteered on a limited basis to raise money for Wikileaks in 2010 but was found to have used that opportunity to embezzle more than $50,000 from the organization.”

    Sigurdur Ingi Thordarson and Julian Assange, whose name Thordarson forged while embezzling from WikiLeaks

    What’s more, Thordarson confessed to Stundin that he “continued his crime spree whilst working with the Department of Justice and FBI and receiving a promise of immunity from prosecution.”

    The United States is currently seeking Assange’s extradition from the United Kingdom in order to try him for espionage relating to the release of leaked classified documents. If convicted, he could face up to 175 years in prison. The indictment has sparked fears for press freedoms in the United States and beyond and prompted strong statements in support of Assange from Amnesty International, Reporters without borders, the editorial staff of the Washington Post and many others. 

    US officials presented an updated version of an indictment against him to a Magistrate court in London last summer. The veracity of the information contained therein is now directly contradicted by the main witness, whose testimony it is based on. -Stundin

    The addition to Assange’s original indictment was meant to bolster the DOJ’s case by alleging illegal activity in Iceland – including attempts to hack into the computers of members of parliament and record their conversations.

    Thordarson now admits that Assange never asked him to hack or access phone recordings of MPs, and now says that he received files from a third party who claimed to have recorded the officials – offering to share them with Assange despite claiming to have no idea what they actually contained. Thordarson claims he never looked at the files and has no idea if they contained audio recordings as his third party source suggests. What’s more, Assange never instructed or asked him to access computers to try and find any such recordings, he now says.

    Meanwhile, UK Magistrate Court Judge Vanessa Baraister sided with the DOJ’s legal team – including citing the specific examples from Thordarson, despite ultimately ruling against extradition purely on humanitarian grounds related to Assange’s health, suicide risk, and the potential for mistreatment in US prisons.

    Other misleading elements can be found in the indictment, and later reflected in the Magistrate’s judgement, based on Thordarson’s now admitted lies. One is a reference to Icelandic bank documents. The Magistrate court judgement reads: “It is alleged that Mr. Assange and Teenager failed a joint attempt to decrypt a file stolen from a “NATO country 1” bank”.

    Thordarson admits to Stundin that this actually refers to a well publicised event in which an encrypted file was leaked from an Icelandic bank and assumed to contain information about defaulted loans provided by the Icelandic Landsbanki. The bank went under in the fall of 2008, along with almost all other financial institutions in Iceland, and plunged the country into a severe economic crisis. The file was at this time, in summer of 2010, shared by many online who attempted to decrypt it for the public interest purpose of revealing what precipitated the financial crisis. Nothing supports the claim that this file was even “stolen” per se, as it was assumed to have been distributed by whistleblowers from inside the failed bank.

    More deceptive language emerges in the aforementioned judgment where it states: “…he [Assange] used the unauthorized access given to him by a source, to access a government website of NATO country-1 used to track police vehicles.”

    This depiction leaves out an important element, one that Thordarson clarifies in his interview with Stundin. The login information was in fact his own and not obtained through any nefarious means. In fact, he now admits he had been given this access as a matter of routine due to his work as a first responder while volunteering for a search and rescue team. He also says Assange never asked for any such access. -Stundin

    Thordarson’s admissions to Stundin are part of a thorough report he’s compiling into his activities, which are said to include never-before-seen chat logs and new documents. The chat logs provide a comprehensive view into his communications while volunteering for Wiki”eaks in 2010 and 2011, including chats with WikiLeaks staff – as well as unauthorized communications with members of international hacking groups which he met through his role as a moderator on an open IRC WikiLeaks forum. There is no indication that the organization knew of Thordarson’s contacts with said groups, and the logs show “his clear deception,” by which he can be seen routinely inflating his position within WikiLeaks – describing himself as the #2 in command, chief of staff, and head of communications. He can be seen asking the hackers for material from Icelandic entities or to attack Icelandic websites with DDoS attacks on a regular basis.

    Sabu and the FBI

    Hector Xavier MonsegurA hacker and a member of the rather infamous  LulzSec hacker group. Mynd: afp

    Thordarson continued to step up his illicit activities in the summer of 2011 when he established communication with “Sabu”, the online moniker of Hector Xavier Monsegur, a hacker and a member of the rather infamous LulzSec hacker group. In that effort all indications are that Thordarson was acting alone without any authorization, let alone urging, from anyone inside WikiLeaks.

    What Thordarson did not know at the time was that the FBI had arrested Sabu in the beginning of June  2011 and threatened him into becoming an informant and a collaborator for the FBI. Thus, when Thordarson continued his previous pattern of requesting attacks on Icelandic interests, the FBI knew and saw an opportunity to implicate Julian Assange.

    Later that month a DDoS attack was performed against the websites of several government institutions.

    That deed was done under the watchful eyes of the FBI who must have authorized the attack or even initiated it, as Sabu was at that point their man. What followed was an episode where it seems obvious that Icelandic authorities were fooled into cooperation under false pretenses. -Stundin

    “They were trying to use things here [in Iceland] and use people in our country to spin a web, a cobweb that would catch Julian Assange,” said former Icelandic interior minister Ögmundur Jónasson, who recalled when the FBI first contacted Icelandic authorities on June 20, 2011 to warn them of an imminent and grave threat to government networks. Days later the FBI flew to Iceland and offered to formally assist in thwarting the attack – which they accepted.

    Ögmundur Jónasson, Former Iceland Minister of the Interior. Mynd: Davíð Þór

    “What I have been pondering ever since is if the spinning of the web had already started then with the acceptance of the letter rogatory establishing cooperation that they could use as a pretext for later visits,” says Jónasson.

    Iceland gets played by the FBI

    By late august 2011, Thordarson was already being pursued by WikiLeaks staff over missing proceeds from the online sales of merchandise – which he had transferred to his private bank account by forging Assange’s signature. With the staff hot on his trail, he reached out to the US Embassy in Iceland on August 23, offering to turn state’s witness. Within 48 hours, eight FBI agents took a private jet to Reykjavik, where they quickly set up meetings with their new witness as well as Icelandic state prosecutors and the State Police Commissioner.

    They were there to lay a trap…

    Mid day, Mr. Jónasson, then Minister of Interior got wind of this new visit and requested confirmation that this related to the same case as earlier in the summer. “I asked on what rogatory letter this visit was based and if this was exactly the same case”, Jónasson says in an interview with Stundin. “I then found out that this was of a totally different nature than previously discussed”. He says he put two and two together and said it was obvious that the intention was to lay a trap in Iceland for Assange and other staff members of WikiLeaks. 

    Such actions were according to Jónasson way outside the scope of the agreement and thus he ordered that all cooperation with the agents be stopped and that they would be informed they were acting in Iceland without any authority. Only days later he learned that the agents and prosecutors had not yet left the country so the Ministry of Foreign Affairs contacted the US embassy with the demand they halt police work in Iceland and leave the country. -Stundin

    Yet, the FBI eventually lost interest. “At about the same time charges were piling up against Thordarson with the Icelandic authorities for massive fraud, forgeries and theft on the one hand and for sexual violations against underage boys he had tricked or forced into sexual acts on the other.”

    Read the rest of the report here.

    Tyler Durden
    Sun, 06/27/2021 – 16:30

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