Today’s News 28th October 2021

• Wait Until All These New Homebuyers See Their Property Taxes Go Up Next Year
  Wait Until All These New Homebuyers See Their Property Taxes Go Up Next Year

  To add another chapter to the “our economy is a ponzi scheme bubble that is bound to eventually burst” argument, those who went out and overpaid for property this year may wind up with a hangover in the form up skyrocketing property taxes.

  We all know that higher real estate prices (hereinafter referred to as “a real estate bubble”) are often praised by government and Fed officials as signs of progress for the economy. They’re great news for those who already own property and terrible news for those looking to enter the market for the first time.

  But buyers in 2021 may face even more buyers remorse, on top of overpaying for property: they may soon find out that property taxes are going to increase, an article from The Motley Fool astutely noted this summer. 

  This once again makes an already-expensive house an additional burden by levying more costs in the form of taxes.

  

  Property taxes are determined by the assessed value of a home and multiplying it by your local municipality’s tax rate. 

  Assessments can obviously rise in price as homes do, driving taxes higher. 

  Homeowners in 2021 are already starting to see these effects, the Fool article writes. An average property tax bill for a single family home went up from $3,561 to $3,719 in 2020, the report noted. Property taxes rose $323 billion, or 5.4%, in 2020, the report notes. It’s not unreasonable to assume these taxes will continue to rise at this alarming clip for 2021, as the real estate market continued its “recovery” this year.

  While homeowners can appeal property tax assessments, the process “isn’t easy”. 

  “It’s for this reason that homeowners are advised not to max out their budgets when purchasing property,” the Fool article hilariously ends by saying. Perhaps someone can inform them that tapping out all lines of credit and maxing out one’s budget is the American way…  

  Tyler Durden
  Wed, 10/27/2021 – 19:10

• The Spirituality Behind Bitcoin
  The Spirituality Behind Bitcoin

  Authored by Mark Jeftovic via Bombthrower.com,

  

  “they worshiped the dragon because he gave his authority to the beast; and they worshiped the beast, saying ‘Who is like the Beast, and able to wage war against it?'”

  If ‘The Beast’ is CCP-style social credit, the answer is Bitcoin

  Something I’ve been thinking about more often lately is the almost otherworldly timing of the appearance of Bitcoin on the world stage.

  Right at the crescendo of the Global Financial Crisis, as world leaders and central banks were showing that they would never willingly allow consequences to unfold, even worse, they would reward moral hazard and bail out the banks, a mysterious white paper dropped on a cypherpunks mailing list:

  Subject: Bitcoin P2P e-cash paper

  Satoshi Nakamoto satoshi at vistomail.com Fri Oct 31 14:10:00 EDT 2008

  I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.

  The paper is available at: http://www.bitcoin.org/bitcoin.pdf

  The main properties:

  • Double-spending is prevented with a peer-to-peer network.

  • No mint or other trusted parties.

  • Participants can be anonymous.

  • New coins are made from Hashcash style proof-of-work.

  • The proof-of-work for new coin generation also powers the network to prevent double-spending.

  Bitcoin: A Peer-to-Peer Electronic Cash System

  Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without the burdens of going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as honest nodes control the most CPU power on the network, they can generate the longest chain and outpace any attackers. The network itself requires minimal structure. Messages are broadcasted on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone.

  Full paper at: http://www.bitcoin.org/bitcoin.pdf

  Satoshi Nakamoto

  …and the world changed.

  When an idea whose time has come arrives, nothing can stop it. It may take generations to play out and the transition may be tumultuous, but no human agency can resist it. Fire, self-awareness, language, human rights, increasingly higher levels of mental abstraction, energy density and systems of organization. Something is impelling this relentless progression, and since everything born of human activity had to start as an idea, that something has to be thought.

  Yet, we live in a world of radical material reductionism. Conventional canon holds that thought is simply a by-product of brain activity. At its most reductive level, thought, and consciousness itself are just accidents of innumerable material processes randomly iterating over billions of years until one day, some apes suddenly became aware of themselves. “The rest is history”, goes the logic.

  Contrary to this, we have multiple streams of philosophy, mythology, certain currents of depth psychology and over the last hundred years even science, namely quantum mechanics, that takes a completely different position. The material world is a consequence of non-material reality, not the precursor to it, and that non-material reality is self-aware and conscious:

  “I regard consciousness as fundamental. I regard matter as as derivative from consciousness. We cannot get behind consciousness. Everything that we talk about, everything that we talk about as existing, postulates consciousness.”

  – Max Planck, emphasis added.    

  Which is preeminent, consciousness or matter, is the modern day analog of the battle between the Ptolemaic and the heliocentric cosmologies.

  

  I think in the fullness of time, after enough people have been burned at the stake for saying it, we’ll accept that everything occurring in the material world  has its origin in a non-material realm. One whose dynamics shape the events of this one. It has a directionality to it that is taking events in a certain direction. Also, to one degree or another, there may be some oppositional forces aligned against it.

  On my latest appearance on Steve Bannon’s Warroom I made the point that “Bitcoin is resistance to financial repression”. Bannon had declared previously that “the government is forcing you into crypto and gold”, and before my segment, Congressman Gaetz, speaking on the new IRS regulations to surveil the populace, said that the government was “weaponizing” its bureaucratic apparatus against its own citizenry.

  Where I might politely differ from Bannon and Congressman Gaetz is in the idea that this war against the middle class, against the people, isn’t peculiar to the Biden administration. This has been going on for generations, across both parties. It’s the architecture of the modern welfare state. However contrary to what many think, the welfare state isn’t all powerful, it’s fighting for its own survival.

  One of the core battlegrounds in this struggle, perhaps the most important one, is around the nature and mechanics of money. The reason why is because the advent of honest money enabled the exchange of value. It meant people could come together and peacefully trade in a way that resulted in mutual benefit. It was a kind of alchemy. Without honest money we are left with force and coercion. Either subtly or overtly.

  The book that probably went the furthest in initially “red-pilling” me about the nature of money, how sound money fostered peace and prosperity, while fiat money (“false” money) enabled division, corruption and war, was Ferdinand Lips’ “Gold Wars”. Lips posited that “The Gold War is nothing else than a Third World War. The demise of the classic gold standard would pit the central bankers and political class against the people, ushering in a “monetary dark age”.

  What may be unique to the Biden administration, and incumbent politicians across liberal democracies is the quickening. How in the wake of this (likely lab originated) pandemic it all seems to be headed for a blow off top in tyranny, the world over.

  Gold has had near mystical connotations for millennia.

  Lips, citing the legendary Harry Shultz unpacks the societal detriment that is caused by unsound money:

  Money sets a standard that spreads into every area of human activity. No paper money backing, no morality….Layer by layer we are corrupted when money loses certainty… Big Brother was made possible through the absence of automatic controls and loss of individual freedom via non-convertible currency. So, pass the word. Fight for gold. Not for profits, though they are helpful and help us fight for individual freedom, but for a future that returns to sanity in various standards. If we have a gold standard we get golden human standard! The two are intertwined. They are the ultimate cause and effect. Gold blesses.

  One wonders what the late Ferdinand Lips would have thought of the situation today. Shultz wrote the last edition of his newsletter in 2011, warning us then that:

  “Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We’ve gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest.”

  But despite the recorded experience over the entire course of monetary history, how fiat currencies always go to zero, every time, no exceptions, the established elites will not return to a sound money standard of their own free will. Doing so would relinquish their own hold on power, and politics today attracts (almost exclusively)  disordered, sociopathic personalties.

  Enter, digital currencies

  In the early 00’s, there was an abortive attempt to fuse sound money with emerging digital payments in systems like e-gold, Pecunix, and Goldmoney (which is still going today). They were centralized and corporate entities, which meant they had definable attack surfaces that prevented them from posing any serious threat to the status quo.

  Recently Peter Thiel mused that the mysterious Satoshi Nakamoto, be it a person or a group, probably cut their teeth in that first attempt at a new era sound money in these digital gold currencies.

  Today, people just look at “digital money”, whether it’s crypto-currencies like Bitcoin, digital stablecoins like Facebook’s Diem, or the impending Fedcoin and they put it all into the same bucket. This is mistake.

  Digital money is just a medium. Just as the internet is a medium. And where the internet can be used to promote repressive, anti-human ideologies like collectivism, woke-ism and transhumanism, and can be the facilitator for surveillance capitalism, it is also an enabler and empowering mechanism for the underdogs.

  For alternative press, independent journalism and open discourse, the internet is the great equalizer. It provides the tools for small, medium  and home businesses to compete against the 800lb gorillas in their space (the topic of yet another one of my still-in-progress books that got pushed to the back burner). The advent of the internet was a Promethean event. Cooked up in the bowels of the military-industrial complex it was loosed into the world, perhaps with the intent of further enslaving the masses, but it was designed almost too well.

  The internet opened the door to emancipation of information.

  So to are digital currencies the new medium for value exchange in an emerging networked world. I never tire of citing the late Stephen Zarlenga and his exhaustive study of history showing how control over the monetary system amounts to control over society.

  In a networked world, the battle for monetary morality will be played out in cyberspace. Gold will always be an immutable, ageless anchor for value, but on this battlefield, sound money needed ally. This is guerrilla warfare and something truly asymmetric was required.

  What the world needed, was Bitcoin. Digital gold.

  Where Central Bank Digital Currencies (CBDCs) are the emerging digital cash platforms of indebtedness and servitude, Bitcoin and (real) cryptos are the liberators. They are not the same, they are antipodes, playing out a timeless struggle in a new terrain.  (How can you tell the difference between an oppressive and a liberating digital currency? If you hold your own private keys, it’s an emancipatory crypto, if you can’t self-custody, opt-out, or fork-off, it’s EvilCoin).

  This battle is ultimately, a spiritual one

  Over the years, as much as I tried to ignore it, I finally had to acknowledge my belief that the ultimate impetus to create emancipatory monetary technologies originate from another plane. By that I don’t mean ethnocentrically modelled deities plotting earthly intrigue from Mount Olympus. I mean more along the lines of impulses and dynamics that we can barely understand from our limited vantage point, ultimately originate from a non-material realm from where they project a kind of morphogenic field into the material world, where these tensions play out.

  There are various models for this, David Bohm’s Implicate / Explicate Orders, Karl Pribam’s Holoflux Theory – these models are synthesized coherently in the work of Dr. Shelli Renee Joye..

  

  Why believe any of this New Age woo-woo when the material reductionists would tell me that my belief is simply a side effect of an electro-chemical storm in my brain? Mere “qualia”?

  After my Bannon appearance I ended up speaking with Joe Allen, who covers transhumanism for the Warroom. He also writes the Singularity Weekly Substack. We talked for over an hour and we discussed atheism vs radical material reductionism. We discussed the difference between the scientific method and Scientism. We talked about Rudolf Steiner, who posited a coming Age of Ahriman, a period in which humanity would become enamoured with materialism and forget its own soul, an era wherein Ahriman himself would incarnate physically in the West. Steiner, who died in 1925, put it as occurring sometime in the late 20th century, someplace in the US or Canada (if I had to bet, my money would be on Mark Zuckerberg).

  

  Left: Rudolf Steiner’s sculpture of Ahriman, circa 1914. Right: Mark Zuckerberg, b. 1984

  For anybody who’s ever attempted to read Steiner, it’s mostly impenetrable. My personal theory is that Steiner spent abnormally large swaths of his life in a hypnogogic state. Perhaps without fully realizing it himself. Nonetheless, he pretty much invented bio-organic farming and Waldorf Schools, among other things.

  I ended up telling Joe a true story, one that happened to me nearly 30 years ago, but I remember it like it was yesterday. When the material reductionists tell you that everything you think, feel and decide are simply the outcomes of a billiard ball universe: atoms and molecules colliding while neurons and synapses are firing in your brain, they have to admit when pressed; they can’t actually tell you what consciousness really is. Nor how life emerged from inert matter, or how a brain somehow secretes sentience.

  And they cannot explain how something like this happens:

  The time: 1992-ish, I’m a bohemian, long haired dude going to college in London, Ontario, playing in a metal band, studying computer programming at Fanshawe College, living in a rooming house / hovel: a mattress on a pair of skids on the floor of a small room in a basement (because the basement flooded every time it rained).

  

  Me, with hair. Circa 1992, covering then Ontario Premier Bob Rae’s song “Same Boat Now”

  I had just finished an essay for school, about smart card technology and I closed the assignment with some speculation that eventually smart cards could morph into bar codes and implants.  I went on to describe how some religious types (I wasn’t one) thought this would play out along biblical lines, as per the Book of Revelations. On a lark, I close out the essay with Revelations 13:17:

  “And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name on his hand or his forehead”

  At this point, one of my roommates in the hovel, he was a drug dealer who scared the hell out of me, and some of his even scarier friends show up and they were cooking something up that I didn’t want to be a witness to. So I got the hell out of there.

  Very agitated and restless at this point I’m trying to figure out where to go, I decide on the University of Western Ontario’s D. B. Weldon Library, a short bus ride up road. “Nobody will know me there, and I can just disappear in there with a book” I think to myself.

  On my way I hit the ATM to get my last $5 out of my bank account. I remember thinking about my essay and giving my bank card some  extra scrutiny as I pondered those last paragraphs. Number of the Beast, implants, all that stuff.

  I’m still nervous and pumped full of anxiety (my living situation wasn’t the greatest in those days). But I remember what happened distinctly:

  Once the bus let out on campus, I felt almost trance-like. “In the zone”. I walked into the library cognizant that I had not brought anything with me to read, but the plan was to simply walk in there and pick a ‘random’ book off the shelves, then flop into a chair and read it for the next few hours.

  I jump into the elevator. Get off on the 3rd or 4th floor (D. B. Weldon is 5 stories high), and then, again, trancelike – turn walk, turn, walk, turn walk – stop. Reach out to one side and pluck a book off the shelf then flip it open….

  “And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name on his hand or his forehead.”

  The book was Swedenborg’s “Revelations Explained”.

  Suffice it to say, if it were in a movie this would be the scene where the violins are doing those short, sharp Psycho-style stabbing notes in the background.  I’d experienced synchronicities before, but this one was off the charts.

  Until now, I haven’t  told too many people about that event. My wife thinks that it wasn’t a synchronicity as much as a demonstration of the power of mind, that on a subconscious level I had memorized the titles and order of everything in the library on previous visits and that somehow I had managed to retrieve that needle from the haystack because of the mental priming of the morning’s events (I guess my wife is somewhat of a “Scully” to my “Mulder”). But that doesn’t explain picking out a book I had never read by an author I had never heard of and flipping it open to the exact page that happened to also quote Revelations 13:17.

  When the Internet hit and there were these head fakes toward micropayments and digital cash I would think about this event. Then crypto-currencies came along I started thinking about it more often. My intuition was telling me that Bitcoin wasn’t a “Mark of the Beast” style technology as foretold in prophecy. If anything, Bitcoin, being a liberating and empowering technology would be the opposite of that. An antidote.

  Once the pandemic hit, and vax passports went from conspiracy theory to reality in about 18 months I became quite alarmed about the means, motive and opportunity to fuse the impending CBDCs with health passports and China-style social credit systems. Suddenly implants and chips didn’t seem so far-fetched anymore.

  When I told Joe Allen this story, he said it reminded him of the wildly memetic Microsoft 2020-06/06/06 patent. It purportedly described a system for human implants that would turn people into crypto-currency miners and reward them with tokens for completing assigned tasks. Best Matrix flick ever.

  When I first heard about this one, it was on Facebook and I nearly ripped into the original poster because it was so obviously an unhinged conspiracy theory that could easily be debunked by simply looking up the damn patent number in the bloody  database.  I mean people …get a grip.

  The only problem is that the 2020/060606 patent turns out to be real, it is listed in the WIPO database (not USPTO), and it describes (get this), “A Crypto-Currency System Using Body Activity Data”.

  Human body activity associated with a task provided to a user may be used in a mining process of a cryptocurrency system. A server may provide a task to a device of a user which is communicatively coupled to the server. A sensor communicatively coupled to or comprised in the device of the user may sense body activity of the user. Body activity data may be generated based on the sensed body activity of the user. The cryptocurrency system communicatively coupled to the device of the user may verify if the body activity data satisfies one or more conditions set by the cryptocurrency system, and award cryptocurrency to the user whose body activity data is verified.

  

  Jesus Christ. Make it stop.

  The WIPO assigned patent filing numbers, as far as I can tell, are simply assigned serially by year. 2019/060606 is Hydrated Caruon Material Powder and Use of it for Preparation of an Electrode for an Electrical Storage Device. 2021/060606 is Nuclear Fuel Uranium Dioxide Pellets Having Improved Fission Gas Capturing Capability.

  What were the odds that Microsoft, a global quasi-monopoly, co-founded by Epstein bro and elite-level globalist Bill Gates, would file a patent on a human implantable task/reward system and wind up with this number in it?

  Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred and sixty-six.”

  I’m not saying that we are dealing with actual, literal Biblical prophecy playing out in our time. Because frankly, there are people who think that at every point throughout history.

  The timing of the arrival of Bitcoin, the Promethean dynamic behind both it and the Internet, the “signs and wonders” of the quickening, and the rhyming of ultra-long historical cycles, not to mention the unsustainability of the current status quo; this is all building toward some kind of self-organizing criticality. A global Minsky Moment. What I do think is that whatever is driving it all is not originating from a linear, material universe that just so happened to belch out consciousness along the way.

  It could be as explainable as our own collective subconsciousness willing or fearing certain dynamics into material reality. It could be larger, extra-dimensional forces that super-sensibly atuned people like Steiner or Swedenborg glimpsed over a century ago and could barely unpack what they experienced into linear terms.

  Whatever is happening, it has been unfolding for a long, long time…

  It was not precisely a memory. You have already had proof that time is more complex than your science ever imagined. For that memory was not of the past, but of the future -of those years when your race knew that everything was finished. We did what we could, but it was not an easy end. And because we were there, we became identified with your race’s death.

  Yes, even while it was still ten thousand years in the future!

  It was as if a distorted echo had reverberated round the closed circle of time, from the future to the past. Call it not a memory, but a premonition.

  The idea was hard to grasp, and for a moment Jan wrestled with it in silence.

  Yet he should have been prepared; he had already received proof enough that cause and event could reverse their normal sequence.  There must be such a thing as racial memory, and that memory was somehow independent of time.

  To it, the future and the past were one. That was why, thousands of years ago, men had already glimpsed a distorted image of the Overlords, through a mist of fear and terror.

  “Now I understand,” said the last man.

  –  Arthur C Clarke, Childhood’s End

  When I confront the spectre of  widespread social credit systems, technocratic collectivism or transhumanist ideations of digital immortality, I get a palpable anti-human vibe from them. When I meditate on empowering technologies like cryptography, on structures of decentralization and on the ideals of self-sovereignty it feels just so much more life affirming.

  Alas, the zeitgeist today is dominated with the mindset of the former, but fortunately, Prometheus has already made his rounds.  If you value freedom, autonomy, universal human rights and believe we are all ‘the offspring of a deathless soul’, then Bitcoin isn’t your enemy, it’s your ally.

  “For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.”

  *  *  *

  I cover macro tensions between the globalists and sovereign-individual extensively in The Crypto Capitalist Letter, along with a tactical focus on publicly traded crypto stocks. Get the overall investment / macro thesis free when you subscribe to the Bombthrower mailing list, or try the premium service for a month with our fully refundable trial offer.

  Tyler Durden
  Wed, 10/27/2021 – 18:50

• US Coal Stockpiles Slump To Two Decade Low As Power Plant Demand Surges 
  US Coal Stockpiles Slump To Two Decade Low As Power Plant Demand Surges 

  One of the biggest ironies this year is the transition from fossil fuel generation to green energy has created a global energy crisis that is forcing the U.S., among many other countries, to restart coal-fired power plants ahead of the Northern Hemisphere winter. Coal is roaring back this fall but supplies are not catching up with demand. 

  According to Bloomberg, US coal supplies dropped to 84.3 million tons in August, the lowest level since 1997. 

  

  As of August, about a quarter of all US power generation was derived from coal. As winter approaches, coal-fired power plants will become a more significant percentage of all U.S. power generation. 

  

  Power plants are expected to burn 19% more coal this year because soaring natural gas prices have made it uneconomical to produce power. In return, this is forcing generators to burn through coal reserves much quicker and has caught coal producers off guard who cannot bring new coal to the market. 

  

  “The ability for the producers to respond is not what the utilities thought it was,” Paul Lang, CEO at Arch Resources Inc., said during a conference call Tuesday. “It just doesn’t exist anymore.”

  Weeks ago, Ernie Thrasher, CEO of Xcoal Energy & Resources, the largest U.S. exporter of fuel, said demand for coal will remain robust well into 2022. He warned about domestic supply constraints and power companies already “discussing possible grid blackouts this winter.” 

  He said, “They don’t see where the fuel is coming from to meet demand,” adding that 23% of utilities are switching away from gas to burn more coal. There are not enough coal miners to rapidly increase mining output. 

  

  Joe Craft, CEO for Oklahoma-based miner Alliance Resource Partners L.P., warned Monday, “coal stocks for customers are at critically low levels.” 

  Inventory declines came on very quickly as the global energy crisis emerged this year. Stockpile trends were well in line for the first half of the year, but stockpiles began to drop as soon as July rolled around. 

  S&P Global Market Intelligence data shows Central Appalachia coal prices have surged 39% since the start of the year to $75.50 a ton due to supply constraints. 

  Matt Preston, director of North American coal markets research for Wood Mackenzie Ltd., said total U.S. inventories could slump by 50 million tons by the end of the year:

  “Stockpiles are coming down very rapidly,” Preston said. “If we have a cold winter, and there has been lots of talk that there could be a cold winter, we could see some issues.”

  With natgas, coal, and oil prices all soaring is a clear signal the green energy transition will take decades, not years. Walking back fossil fuels for unreliable clean energy has been a disaster in Asia and Europe. It could soon cause trouble in the U.S. These power-hungry continents are scrambling to source fossil fuel supplies as stockpiles are well below seasonal trends ahead of cooler weather. 

  Suppose La Niña conditions produce cooler weather trends in certain parts of the world. In that case, especially, Asia, Europe, and the U.S., coal demand could continue to increase, which would benefit Peabody Energy Corporation’s share price. 

  

  So far, Peabody’s earnings have tripled as coal roars back under a Biden administration. 

  Tyler Durden
  Wed, 10/27/2021 – 18:30

• NASA Facing Massive $2.7 Billion Cost Overruns At Its Facilities
  NASA Facing Massive $2.7 Billion Cost Overruns At Its Facilities

  Authored by Adam Andrzejewski via RealClearPolicy.com,

  The space race between private companies continues with actor William Shatner flying to the edge of space on Blue Origin’s New Shepard 4 vehicle and  SpaceX recently sending a civilian crew to space. While the competition between Blue Origin and SpaceX heats up, NASA is taking a back seat as it faces billions of dollars in project overruns.

  While the National Aeronautics and Space Administration manages $40 billion in facility assets, more than 75 percent of it is beyond its design life and NASA faces a deferred maintenance backlog of $2.7 billion as of 2020, according to a recent report on cost overruns from NASA Office of Inspector General.

  

  The IG reviewed 20 construction projects and found that six had “significant cost overruns” and 16 took or will take longer to complete than initially planned.

  It looked at six projects at Glenn Research Center, Kennedy Space Center and Langley Research Center “that were significantly over budget as of June 2021.”

  Cost increases ranged from $2.2 million for upgrades at Glenn to $36.6 million for repairs and modifications at Kennedy, the report found.

  The increased costs for two of the projects were attributed to changing requirements, while contract prices for four others were either higher than originally estimated or resulted from disagreements between NASA and the contractor, the IG report found.

  NASA didn’t provide effective oversight to determine whether the projects met cost, schedule and performance goals, the report found.

  A second NASA IG report estimated that delays from the Covid-19 pandemic cost nearly $3 billion.

  Pandemic delays aside, NASA’s cost overruns can’t be accepted as the norm when private industry is passing up our taxpayer-funded space program almost daily.

  *  *  *

  The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.

  Tyler Durden
  Wed, 10/27/2021 – 18:10

• China Urges US To Immediately Lift Sanctions On Taliban As "Economic Chaos" Looms
  China Urges US To Immediately Lift Sanctions On Taliban As “Economic Chaos” Looms

  China is now urging the United States to immediately lift sanctions against the Taliban and unfreeze all of Afghanistan’s assets abroad. As part of its appeal, Beijing is offering assurances to Washington that the hardline Islamist group will “effectively” protect the rights of women and minorities. 

  Beijing is further warning the West of looming “economic chaos” in the war-torn central Asian country if more is not urgently done to relieve the economic pressure and allow for greater stability. “China urges the Western countries, led by the United States as a whole, to lift sanctions, and calls on all parties to engage with the Afghan Taliban in a rational and pragmatic manner,” Chinese Foreign Minister Wang Yi said this week following two days of talks with the Taliban which concluded Tuesday in Doha. 

  

  “China hopes that the Taliban can further demonstrate openness and inclusiveness, unite all ethnic groups and factions in Afghanistan to work together for peaceful reconstruction,” Wang added. “[The Taliban] should effectively protect the rights and interests of women and children … and build a modern country that conforms to the wishes of the people and the trend of the times,” the top Chinese diplomat added.

  He further explained that Afghanistan could be put on the path of “sound” development but only if there’s international support for “the humanitarian crisis, economic chaos, terrorist threats and governance difficulties.” Since early September, China has already pledged multiple tens of millions of dollars in humanitarian aid to Taliban-controlled Afghanistan, while hailing the “end of anarchy” in the country.

  It must be recalled that this past summer as the US military was initiating its withdrawal after two decades of war and occupation, the very first foreign country to host Taliban leadership for “recognition” talks was China. It’s also since been made clear that China is eyeing major investment and infrastructure projects in Afghanistan as part of Xi’s long-running Belt and Road Initiative (BRI) across Asia. 

  China is especially said to be eyeing Afghanistan’s untapped rare earth mineral deposits…

  Republicans held a forum to discuss how President Biden’s exit from #Afghanistan left massive, untapped reserves of #RareEarths and other vital minerals in the #Taliban’s hands, potentially opening them up to exploitation by #China. https://t.co/ckslFhRJCn

  — The Epoch Times – China Insider (@EpochTimesChina) October 26, 2021

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

  There have even been rumors and rampant speculation of Chinese troops moving in to the abandoned Bagram Airbase, or other former US military facilities; however, these reports have not been confirmed, and are denied by Beijing officials. 

  Meanwhile, Chinese state media from the start of the US evacuation fiasco in Kabul – which tragically resulted in dozens of deaths, including US troops and Afghan civilians – has routinely mocked the major blow to American military might and capabilities, calling it a humiliating retreat.

  Tyler Durden
  Wed, 10/27/2021 – 17:50

• Taiwan Is A 'Number One Issue' For The CIA’s New China Center
  Taiwan Is A ‘Number One Issue’ For The CIA’s New China Center

  Authored by Dave DeCamp via AntiWar.com, 

  Now that the CIA has established a new mission that will exclusively focus on China, CIA Deputy Director David Cohen said that Taiwan will be one of the “number-one issues” for the new spy center.

  “There’s a series of number-one issues with China,” Cohen said at an intelligence conference on Sunday. “Taiwan is definitely one of the number one issues with China we are focused on.”

  

  Cohen’s comments came after President Biden said the US has a “commitment” to defend Taiwan in the event of a Chinese invasion. Although US officials were quick to clarify that Biden’s statement was not a change in policy, hawks in Congress are ready to give the president war powers to fight China over Taiwan.

  Biden’s comments came against the backdrop of media hysteria over Chinese flights in Taiwan’s air defense identification zone (ADIZ). The ADIZ concept is not covered by any international laws or treaties, and the Chinese warplanes usually enter the southwest corner of the ADIZ, nowhere near the island of Taiwan. But some Western media outlets falsely portrayed these flights as violations of Taiwan’s airspace.

  The hype over the ADIZ flights has filled Western media with articles predicting an imminent Chinese invasion of Taiwan.

  Cohen said that the CIA’s job is to find out how Chinese President Xi Jinping is “thinking about Taiwan” and to provide policy makers in Washington with “indicators” of a potential invasion.

  When announcing the new spy center, CIA Director William Burns called China the “most important geopolitical threat” facing the US. In response to the announcement, China’s ambassador to the US said Washington should drop its “James Bond” theatrics and work towards better relations with Beijing.

  Tyler Durden
  Wed, 10/27/2021 – 17:30

• Gender "X": US Issues First Passport For People Who Don't Identify As Male Or Female
  Gender “X”: US Issues First Passport For People Who Don’t Identify As Male Or Female

  Americans who don’t identify as male or female can finally rejoice, after the United States has issued its first passport with an “X” gender designation.

  

  According to a Wednesday statement by the State Department, the “X” designation will likely be offered on a broad basis next year, according to AP.

  The U.S. special diplomatic envoy for LGBTQ rights, Jessica Stern, called the moves historic and celebratory, saying they bring the government documents in line with the “lived reality” that there is a wider spectrum of human sex characteristics than is reflected in the previous two designations. -AP

  “When a person obtains identity documents that reflect their true identity, they live with greater dignity and respect,” said Stern, who added that her office planned to encourage other nations to embrace the same changes.

  “We see this as a way of affirming and uplifting the human rights of trans and intersex and gender-nonconforming and nonbinary people everywhere,” she said.

  While the state department has declined to reveal who received the “X” passport, some suspect it may be Dana Zzyym, an ‘intersex Colorado resident’ who took the State Department  to court in 2015.

  Zzymm (pronounced Zimm), was denied a passport after refusing to check male or female on an application – instead writing “intersex” above the boxes marked “M” and “F” – and requested an “X” gender designation in a separate letter.

  Zzyym was born with ambiguous physical sexual characteristics but was raised as a boy and underwent several surgeries that failed to make Zzyym appear fully male, according to court filings. Zzyym served in the Navy as a male but later came to identify as intersex while working and studying at Colorado State University. The department’s denial of Zzyym’s passport prevented Zzyym from being able to travel to a meeting of Organization Intersex International in Mexico. -AP

  In June, the State Department announced that it would add a third gender designation for nonbinary, intersex and gender-nonconforming people, however it said that due to extensive updates required to their computer systems, it might take a while to fully implement. One department official told AP that the passport application and “X” update to the system would still need to be approved by the Office of Management and Budget, which approves all government forms.

  Meanwhile, the department no longer requires applicants to provide medical certification if their gender doesn’t match what’s listed on other identification documents.

  Tyler Durden
  Wed, 10/27/2021 – 17:10

• A Global Oil Shortage Is Inevitable
  A Global Oil Shortage Is Inevitable

  Authored by Tsvetana Paraskova via OilPrice.com,

  • While oil and gas companies come under pressure to reduce production, the world’s thirst for new supply is only growing 

  • Without a significant uptick in investment, demand for oil and gas will surpass supply in the not-so-distant future

  • This disconnect between the political desire for less fossil fuels and the global hunger for fossil fuels could drive the price of oil up to $100

  

  Chronic underinvestment in new oil supply since the 2015 crisis and the pressure on oil and gas companies to curb emissions and even “keep it in the ground” will likely lead to peak global oil production earlier than previously expected, analysts say. 

  This would be a welcome development for green energy advocates, net-zero agendas, and the planet if it weren’t for one simple fact: oil demand is rebounding from the pandemic-driven slump and will set a new average annual record as soon as next year.  

  The energy transition and the various government plans for net-zero emissions have prompted analysts to forecast that peak oil demand would occur earlier than expected just a few years ago. However, as current investment trends in oil and gas stand, global oil supply could peak sooner than global oil demand, opening a supply gap that would lead to increased volatility on the oil market, with spikes in prices, and, potentially, structurally higher oil prices by the middle of this decade and beyond. 

  Supply Could Peak Before Demand

  “On current trends, global oil supply is likely to peak even earlier than demand,” Morgan Stanley’s research department wrote in a note this week carried by Reuters.  

  “The planet puts boundaries on the amount of carbon that can safely be emitted. Therefore, oil consumption needs to peak,” analysts at Morgan Stanley said.

  The problem with the world is that oil consumption – wishful thinking, investor pressure, and all – is not peaking. Nor will it peak until the end of this decade at the earliest, according to most estimates. 

  OPEC expects global oil demand to continue to grow into the mid-2030s to 108 million barrels per day (bpd), after which it is set to plateau until 2045, as per the cartel’s latest annual outlook. 

  Some other analysts expect peak demand at some point in the late 2020s. 

  Investment in new supply, however, is severely lagging global oil demand growth.

  Demand is growing again after the 2020 COVID crisis and, contrary to some expectations from early 2020 that the world’s oil consumption would never return to pre-pandemic levels, demand is currently just a few months away from hitting and exceeding those levels. 

  Supply Gap Is Looming In Just A Few Years

  Supply, on the other hand, looks constrained beyond the OPEC+ deal horizon. 

  New investment last year slumped to a decade-and-a-half low. Last year, global upstream investment sank to a 15-year low of $350 billion, according to estimates by Wood Mackenzie from earlier this year. 

  Investment is not expected to materially pick up this year, either, despite $80 oil. That’s because supermajors stick to capital discipline and pledge net-zero emission targets, part of which some of them plan to reach by curbing investment and developments in non-core little-profitable new oil projects. 

  U.S. shale, for its part, is not rushing this time to “drill themselves into oblivion,” as Harold Hamm said in 2017, as American producers look to finally reward shareholders after years of plowing cash flows into drilling and chasing production growth. 

  Considering that oil demand will still grow, at least for a few more years, underinvestment in new supply would be a major problem in the medium and long term. 

  Despite the energy transition, demand will not just vanish, and new supply will be needed for years to come to replace declining production and reserves. 

  The oil industry will need massive investments over the next 25 years in order to meet demand, according to OPEC. The industry will need cumulative long-term upstream, midstream, and downstream oil-related investments of $11.8 trillion by 2045, OPEC says.

  Patrick Pouyanné, chief executive at France’s TotalEnergies, said at the Energy Intelligence Forum this month that oil prices would “rocket to the roof” by 2030 if the industry were to stop investments in new supply, as some scenarios for net-zero by 2050 suggest. “If we stop investing in 2020, we leave all these resources in the ground … and then the price will rocket to the roof. And even in developed countries, it will be a big issue,” Pouyanné said. 

  $100 Oil Is No Longer An Outrageous Prediction 

  A triple-digit oil price is no longer an outrageous prediction as it would have been in early 2020.  

  Francisco Blanch, global head of commodities and derivatives research at Bank of America, expects oil to hit $100 by September 2022, or even earlier if this winter is much colder than expected. 

  Demand is coming back, while we have seen severe underinvestment in supply the last 18 months, Blanch told Bloomberg at the end of September.  

   “The underinvestment problem cannot be solved easily, and at the same time we have surging demand,” he said. 

  “We are moving into a straightjacket for energy, we don’t want to use coal, we want to use less and less gas, we want to move away from oil,” Blanch told Bloomberg. 

  While oil is unlikely to sit at triple digits for a sustained period of time, underinvestment has become “a multi-year problem” for the industry, Blanch noted. 

  Even if oil doesn’t stay at $100 a barrel, a supply crunch down the road would nevertheless move the floor under oil prices higher and lead to unsustainable price spikes. As much as climate activists want a stop to investment in new supply, the industry and the world cannot afford it because oil demand continues to grow.  

  Tyler Durden
  Wed, 10/27/2021 – 16:50

• Flood Of SHIBA INU Buyers Crashes Coinbase
  Flood Of SHIBA INU Buyers Crashes Coinbase

  Tens of millions of Coinbase users were locked out of their accounts around 3:30 pm ET when Shiba Inu (SHIB), the Ethereum-based Dogecoin copycat altcoin which has a total circulating supply of 1 quadrillion (meant to be an intentional contrast to Bitcoin’s 21MM token scarcity) and which was already about up 60% for the day (and up a few million % in the past year), saw a relentless flood of buy orders…

  

  …. resulting in a crash in Coinbase – which now has a market cap of $65BN and still yet can’t operate during a traffic spike – and this “welcome” message:

  

  The outage even broke the Coinbase debit card.

  

  At that moment, the token which is basically a spoof of Dogecoin (and just as valuable), had reached a market cap of over $30 billion, making it bigger than Doge.

  So powerful was the scramble to participate in the relentless upward SHIB momentum, it was the reason for today’s drop in Bitcoin and Ethereum, both of which tumbled overnight when the latest buying spree commenced…

  

  … and which soared higher the moment Coinbase went down as accounts couldn’t sell the two largest cryptos to buy what is by definition a joke altcoin.

  

  That said SHIB, like DOGE, may be a “joke” crypto but that hardly matters to anyone who bought it and held at any time in the past few weeks/months and held: their profits at this moment are greater than any other asset class in the world right now.

  

  pic.twitter.com/Dw3t0mo1Lb

  — Miral (@Miral_Gandhi) October 27, 2021

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  Tyler Durden
  Wed, 10/27/2021 – 16:30

• Bond Market Screams Fed Policy Error, Sparks Huge Value-To-Growth Rotation In Stocks
  Bond Market Screams Fed Policy Error, Sparks Huge Value-To-Growth Rotation In Stocks

  Stocks were very mixed today with Nasdaq (growth-dominant) soaring as Small Caps (value-dominant) slumped. As the day wore on and various headlines came out of Washington, all somewhat reducing the scale of the fiscal stimulus, stocks all began to fade. The Dow and S&P tumbled into the red and even Nasdaq gave back most of its gains in the last few minutes…

  

  The Russell 2000 / Nasdaq 100 pair is now back at 6 week lows (and critical level over the last 3 months)…

  

  …appears to have found its way back to the old correlation regime with real yields plunging…

  

  Source: Bloomberg

  Biggest growth outperformance of value since June today, with Value at its weakest relative to growth in a month…

  

  Source: Bloomberg

  Rent The Runway routed…

  

  Twitter twatted…

  

  Trump’s Social Media SPAC surged…

  

  And HOOD was hammered back below its IPO price near record lows…

  

  The bond market was where the big action was today as yields collapsed at the long-end and surge at the short-end (30Y -10bps, 2Y +5bps)….

  

  Source: Bloomberg

  Rate-hike expectations are soaring with 1.5 hikes priced in by Sept 2022 and 2.3 hikes priced in by Dec 2022…

  

  Source: Bloomberg

  30Y yields were monkeyhammered back below 2.00%…

  

  Source: Bloomberg

  This is happening as specs are the most short bonds this year…

  

  Source: Bloomberg

  The big bond bear short-squeeze begins…

  The yield curve (5s30s) flattened dramatically again today, back below 80bps, screaming that a Fed policy error is on its way…

  

  Source: Bloomberg

  And if you thought 2Y TSY yields were blowing out (topping 50bps today), here’s Canada (after they shifted significantly hawkish today)…

  

  Source: Bloomberg

  The plunge in real yields also suggests Gold has room to run from here to around $2000…

  

  Source: Bloomberg

  The dollar ended unchanged after a choppy session, but remains the recent narrow range…

  

  Source: Bloomberg

  Cryptos crashed today with Bitcoin clubbed like a baby seal back below $60,000…

  

  Source: Bloomberg

  Ethereum fell back to, and found support at, $4000…

  

  Source: Bloomberg

  After the usual puke at 0830ET (London Fix), gold rallied all the way back to $1800…

  

  Oil suffered its biggest drop in over a month on Iran nuke talk headlines and a big crude inventory build…

  

  Finally, as stocks push to ever higher record highs, US economic growth expectations are plunging with The Atlanta Fed’s forecast getting close to contraction…

  

  Source: Bloomberg

  Tyler Durden
  Wed, 10/27/2021 – 16:00

• Billionaires To Fund "Anti-Disinformation" Media Companies To "Restore Social Trust"
  Billionaires To Fund “Anti-Disinformation” Media Companies To “Restore Social Trust”

  Authored by Katabella Roberts via The Epoch Times,

  Billionaires Reid Hoffman and George Soros are backing a public benefit corporation that will provide funding to new media companies aimed at tackling disinformation online and restoring social trust.

  

  Good Information Inc. launched on Tuesday and is being led by former Democratic strategist Tara McGowan who previously ran a progressive non-profit called ACRONYM, which was backed by LinkedIn founder Hoffman. Others contributing to the multi-million seed effort include investors Ken and Jen Duda, and Incite Ventures.

  In a press release on Oct. 26, Good Information Inc said its aim is to “restore social trust” and “strengthen democracy” by “investing in solutions that counter disinformation and increase the flow of good information online.”

  “America is currently in the throes of a disinformation epidemic that is threatening public health, social trust, and democracy around the world. Good Information Inc. believes there is un-met audience demand for fact-based information, especially in local markets that have lost many of their legacy local news sources in recent years, and among audiences that are being left behind by evolving media business models,” the corporation said in a statement.

  Good Information Inc. will be investing in media outlets that provide customers with trusted and fact-based information, as well as local community news, particularly in markets where there are little to no local news outlets reaching online communities.

  The company said that an “increasingly decentralized media environment, anti-democracy forces, and networks of bad actors” have resulted in “dangerous consequences,” noting that 96 million Americans believe the election was stolen from former President Donald Trump, while 89 million Americans believe voter fraud is a major problem.

  Trump has maintained that there was “massive voter fraud” in the 2020 elections.

  “Good information that upholds the truth, common sense, and shared values of a society is the lifeblood of democracy, and orchestrated disinformation—fueled and amplified by bias-driven algorithms—is its greatest threat. The disinformation crisis we are facing in America today is increasing polarization and eroding our trust in each other, which is having a corrosive effect on our democracy, jeopardizing public health, and destabilizing our economy,” founder and CEO McGowan said in a statement.

  “This is no longer a political dispute about the truth, but the direct result of unregulated business models that are putting whole communities around the world at risk, and putting democracy around the world in peril.”

  McGowan’s former progressive non-profit, ACRONYM, ran one of the biggest digital campaigns—costing $100 million—aimed at convincing millions of Americans to vote against Donald Trump in the 2020 elections, Fast Company reports.

  One of the companies ACRONYM invested in, called Shadow, produced the vote tabulation app used in the Iowa caucuses and contributed to the delayed reporting of the results following a string of technical issues.

  McGowan later apologized for the incident, telling Axios that the Shadow team, “made an enormous mistake that has dire consequences in this election and so we want to own that.”

  As its first major investment, Good Information Inc. has officially acquired Courier Newsroom, a civic media company composed of eight state-based news outlets.

  Pat Kreitlow, who co-founded Courier’s Wisconsin news outlet UpNorthNews, said in a statement that the company is “extremely happy to be the first investment of Good Information’s portfolio.”

  “We are seeing unparalleled threats to our country’s democracy and a free press today—threats so grave that the long-running fight against misinformation seems almost quaint as we confront outright disinformation from people preying upon Americans fears and anxieties to push their own agenda or profit margins,” Kreitlow said.

  Tyler Durden
  Wed, 10/27/2021 – 15:46

• How Long Until Supply Chains Finally Normalize: Three Things To Watch
  How Long Until Supply Chains Finally Normalize: Three Things To Watch

  Earlier today, Morgan Stanley showed that more than inflation, more than concerns about the historic labor crisis, definitely more than covid, one thing has preoccupied the minds of most management teams this quarter: “supply chain issues“, a topic which has seen an explosion of mentions on Q3 earnings calls.

  

  But while by now everyone is aware that the global supply-chain shock is truly historic and getting worse by the day, with used car prices rising sharply again and over 30 million tons of cargo waiting outside US ports ahead of the holiday season, few have considered what realistically could normalize these frayed supply chains.

  To address this topic, in a research report published overnight, Goldman’s economists assessed the three key drivers of supply chain normalization and their most likely timing:

  1. improved chip supply driven by post-Delta factory restarts (4Q21) and eventually by expanded production capacity (2H22 and 2023);
  2. improved US labor supply (4Q21 and 1H22); and
  3. the wind-down of US port congestion (2H22).

  And speaking of used car prices, in the first 15 days of October, the Manheim used vehicle index surged 8.3% due to yet another global supply shock: this time due to Delta-variant factory shutdowns in Southeast Asia and elsewhere.

  

  Here, in a rare mea culpa, the Goldman economists admit that while previously they had expected improved microchip availability by 1H22 on the back of normalizing Japanese automotive shipments (post-factory fire) and a US supply response, with these catalysts now behind us — the Naka factory in Japan resumed normal shipments activity in July and US semiconductor plant hours jumped to 73 hours per week in the first half of the year vs. 46 in 2019 — Goldman now expects a “more extended timeline.”

  So with that demonstration of how thoroughly unpredictable the non-linear cascading consequences of such s diffuse, global phenomenon as international production pathways and supply chains are, Goldman proceeds to assess the three key drivers of supply chain normalization listed above, their likely timing, and the key indicators to track progress.

  We start by reviewing one unique aspect of the global semiconductor industry that sets it apart from most other manufacturing and services industries of today’s economy: outside of Southeast Asian plant shutdowns, both output and capacity utilization have already returned to quite elevated levels.

  

  So while the supply of dress shirts and haircuts is likely to rise sharply if demand returns, higher utilization of existing semiconductor capacity is not a viable path toward resolving the chip shortage.

  Additionally, much needed moderation in US and global goods demand has alleviated (and will continue to alleviate) goods-sector imbalances. As shown in the left panel of the next chart, real retail spending has already normalized in major foreign economies. And while it picked back up domestically in August and September, US goods consumption has nonetheless declined by 5% since March.

  

  That said, from the perspective of the key bottlenecks contributing to inflation, demand for consumer electronics, business tech, and other semiconductor-intensive products has remained elevated—both globally and in the US (right chart above). Furthermore, one should hardly expect the increased digitization of society and consumer preferences to reverse post-pandemic: Goldman’s equity analysts forecast demand for semiconductor-intensive consumer goods to remain strong in 2022 (smartphones +4% after +12% in 2021, autos +5% after +6%, PCs -12% after +28% cumulatively in 2020 and 2021).

  So returning to supply constraints, here is a summary of the three key resolution channels in turn (global chip production, US labor supply, reduced port congestion).

  Channel 1, Step 1: Improved Chip Supply from East Asia Reboot

  Goldman’s expected timeline: 4Q21

  Key indicators to watch:

  • Effective Lockdown Indices (ELI) particularly in Malaysia, Vietnam, Mainland China, and Taiwan
  • East Asian industrial production and exports of semiconductors, electrical components, and consumer electronics
  • Automaker commentary on near-term chip availability
  • China industrial policy, with respect to power cuts and the Delta variant
  • Early- and mid-month trade reports (Japan, Taiwan, and Korea)

  As shown in the next chart, three supply shocks weighed heavily on auto production this year, starting in February with severe winter storms and power outages in the southern United States and followed by a March fire at the Renesas automotive chip factory in Naka, Japan. While the plant was fully rebuilt in Q2 and auto production was set to return to near-normal levels in Q3, the arrival of the Delta variant and “zero covid” policies in some East Asian economies combined to produce another sharp drop in US semiconductor supply. The red line in the same exhibit shows the mid-year stepdown in automotive semiconductor units imported from key East Asian suppliers (data derived from granular Census trade records that include unit counts).

  

  Looking ahead, there are several key drivers for optimism, starting with the vaccination-led drop in infection rates (chart below, left and center). As a result, lockdown severity is also now approaching pre-Delta levels in both Malaysia and Vietnam (right panel).

  

  Going forward, it’s important to track the semiconductor output and trade statistics of these key suppliers, as well as closely watch Chinese output and export data to monitor possible disruptions to chip or consumer goods supplies, for example related to power cuts or covid restrictions. For example, imports of integrated circuits from Vietnam and semiconductor devices and diodes from Malaysia declined 34% year-on-year in August, but Chinese production has so far remained firm.

  

  These developments coupled with better near-term production commentary from General Motors and Toyota, would argue for some microchip relief in Q4, and Goldman estimates the removal of this supply bottleneck could return US auto production to or near the 10-11mn SAAR range achieved in late 2020 (vs. 7.8mn in September and 8.6mn in Q3).

  Increases beyond that pace would likely require additional supply improvements, in part because today’s smart cars utilize more and more automotive systems with microchips and in part because of the continued mix shift towards SUVs and electric vehicles (EVs), both of which are relatively chip-intensive. The next chart plots the ratio of global automotive semiconductor shipments to global vehicle production (both on a unit basis.) The secular increase in chip intensity continued in 2021 and suggests demand for automotive semiconductors will continue to rise even with flattish unit vehicle demand.

  

  Channel 1, Step 2: Improved Chip Supply from New Capacity

  Goldman’s expected timeline: 2H22, with a more normal environment in 2023

  Key indicators to watch:

  • Global semiconductor shipments, particularly automotive: Microcontroller Units
  • (MCUs), power semiconductor, analog devices
  • GS equity research forecasts for semiconductor capacity growth
  • 2022 auto production forecasts (GS equity research, IHS)
  • US industrial production of computers, communication equipment, and semiconductors
  • Foreign production and US imports of auto and consumer electronics

  A key step towards easing supply constraints and lowering core goods prices is the build out of global microchip production capacity. But despite the dramatic impact of the chip shortages on US economic output and consumer prices, automotive semiconductor capex only rose back above the 2019 pace in Q3

  

  And with 2-3 quarter lags between equipment capex and chip production—and several-year lead times for new foundries—the rise in capex to above-normal levels in Q4 may not meaningfully boost chip supply until the second half of next year.

  Reasons for the slow and restrained capex response include the long lead times and high fixed costs of new foundries and the likelihood that downstream industries will shift production away from the semis currently in short supply—many of which are older generation products to begin with. High industry concentration is another factor contributing to restrained capital deployment in the face of very strong near-term demand.

  

  With Goldman analysts tracking capacity growth of just 5-10% per year in 2021-22 among the semiconductor industries that supply the auto and consumer electronics sectors, and with consumer demand for these products also likely growing at that horizon and given the rising semiconductor content of motor vehicles, Goldman expects chip supply to remain constrained through at least mid-2022. This reduces the scope for automakers to sustain above-normal production, and restock heavily depleted vehicle inventories. Accordingly, Goldman also expects auto dealer inventories to remain very low through mid-2022.

  Channel 2: Improved US Labor Supply

  Goldman’s expected timeline: Q421 and 1H22

  Key indicators to watch:

  • Payrolls, particularly manufacturing and transportation
  • JOLTS, particularly manufacturing and transportation
  • Industrial production of consumer goods, excluding autos and high tech
  • Supplier deliveries components of ISMs and regional Fed surveys
  • Labor force participation rate

  Labor shortages are another important bottleneck, but labor supply constraints are expected to ease substantially in coming months for several reasons. First, the September expiration of unemployment insurance benefits will boost Q4 job growth by around 1.0 million according to Goldman economists. Second, workers who have left their jobs because of child care concerns to return to work now that schools have reopened. Third, virus concerns will continue to fade as vaccinations increase further and infection rates fall—this would encourage some of the 2-3 million individuals staying away from the workplace because of health concerns to return to the job market.

  

  Taken together, Goldman expects total employment to increase by about 4mn workers by end-2022, a 2.7% boost to non-farm payroll employment. As shown in Exhibit 11, labor demand in these industries is 5.1% and 0.9% above pre-pandemic levels in transportation and manufacturing, respectively. With job openings and wages at new highs for factory and transportation jobs, these labor shortages should ease gradually as the sectors draw workers from lower-paid services industries

  

  Channel 3: Unwind of Port Congestion

  Expected timeline: 1H22

  Key indicators to watch:

  • Transportation payrolls, particularly in the marine cargo handling, support activities for transportation, couriers and messengers, and warehousing and storage sectors
  • Ships at anchor and inbound container traffic at US ports
  • Shipments component of the Cass Freight Index
  • US ex-auto manufacturing production
  • US imports of cars and consumer goods
  • Real retail inventories, excluding autos

  Shipping delays and port congestion are also important bottlenecks for seaborne consumer products like furniture and sporting goods—semiconductors and high-value electronics generally arrive via airfreight.

  Stranded cargo at the Port of Los Angeles has surged to record highs (left panel of Exhibit 12) due to elevated trade volume—container inflows into US ports are 25% above pre-pandemic levels (see right panel)—and ongoing shortages of transportation-sector labor.

  

  We don’t expect significant near-term capacity growth in the goods shipping sector because bottlenecks currently constrain multiple modes of transportation. For example, if ports increased their capacity but the truck-driver shortage is not resolved, total shipping times could remain little changed. Moreover, to the extent transportation companies view shipping demand as temporarily elevated, they are unlikely to boost capacity meaningfully in the near-term.

  We instead see two other drivers behind an expected easing in shipping and transportation constraints in the first half of 2022. First, demand is seasonally weaker in the fall and winter, bottoming out in February after the Chinese New Year when it is typically about 15-20% below August levels. If port throughput maintains the August not-seasonally-adjusted pace, the seasonal moderation in demand would help clear the backlog. Second, and as discussed in more detail here and in Exhibit 3, we expect US import volumes to normalize somewhat due to waning fiscal stimulus and a consumer rotation back toward services consumption.

  Inflation and Fed Implications

  As an aside, since any delays in supply chain normalization means higher prices, Goldman has once again boosted its sequential inflation assumptions for Q4 and early 2022 to reflect these continued upward price pressures, having done so already every month since April. The bank now forecasts year-on-year core PCE inflation of 4.3% at year-end, 3.0% in June 2022, and 2.15% in December 2022 (vs. 4.25%, 2.7% and 2.0% previously).

  This slower resolution of supply constraints means that year-on-year inflation will be higher in the immediate aftermath of tapering than we had previously expected. While we expect inflation to be on a sharp downward trajectory at that point and to continue falling through the end of the year, this higher-for-longer path increases the risk of an earlier hike in 2022.

  Tyler Durden
  Wed, 10/27/2021 – 15:27

• California Shuts Down Another In-N-Out Burger For Refusing To Be "Vaccine Police"
  California Shuts Down Another In-N-Out Burger For Refusing To Be “Vaccine Police”

  Authored by Steve Watson via Summit News,

  A second chain of In-N-Out Burger has been closed down by county authorities in California after it refused to go along with enforcing proof of vaccination orders.

  

  The Washington Times reports that the restaurant in Pleasant Hill has been indefinitely closed by Contra Costa County health officials after ignoring orders to verify vaccine status or proof of a negative COVID-19 test among diners.

  The report notes that the restaurant did display mandated signage detailing the requirements, but has refused to enforce the mandate.

  Other chains of the restaurant in the area have also received warnings and fines, according to the Times.

  California county shuts down In-N-Out over vaccine verification https://t.co/HvdH53sjWX #InNOut

  — The Washington Times (@WashTimes) October 27, 2021

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  As we previously reported, In-N-Out Burger is rebelling against what it calls the “clear overreach” of COVID-19 mandates by insisting “we refuse to be the vaccination police.”

  A San Francisco branch of the burger chain was shut down on October 14 before being reopened but only for takeout and outdoor service.

  In-N-Out Burger’s chief legal and business officer Arnie Wensinger said in a statement that “As a Company, In-N-Out Burger strongly believes in the highest form of customer service and to us that means serving all Customers who visit us and making all Customers feel welcome.”

  Further describing the proof of vaccine mandate as a “clear governmental overreach,” as well as “intrusive, improper, and offensive,” Wensinger urged that “We refuse to become the vaccination police for any government,” and “It is unreasonable, invasive, and unsafe to force our restaurant associates to segregate customers into those who may be served and those who may not, whether based on the documentation they carry, or any other reason.”

  These asinine mandates have been the best marketing tools around for businesses who refuse to succumb to government overreach.

  — Bill Thomas (@BillThomas1082) October 27, 2021

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  Do not comply

  — OnTheDL (@OnTheDLNow) October 27, 2021

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

  Commies

  — John Bilbow (@RealJohnBilbow) October 27, 2021

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  *  *  *

  Brand new merch now available! Get it at https://www.pjwshop.com/

  In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Support our sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Also, we urgently need your financial support here.

  Tyler Durden
  Wed, 10/27/2021 – 15:05

• Putin Tells Gazprom To "Gradually" Raise Gas Volumes To Europe Starting Nov 8
  Putin Tells Gazprom To “Gradually” Raise Gas Volumes To Europe Starting Nov 8

  The Kremlin’s daily cat and mouse game with European energy prices resumed today, when several weeks after saying essentially the same thing – with no tangible results – on Wednesday Russian President Vladimir Putin told Gazprom PJSC to turn to refilling its European gas storage facilities from Nov. 8, once the gas producer completes its domestic gas reinjection campaign.

  “I would ask you, once you have finished your work to refill Russian underground storages on or by November 8, to start gradual and planned work to raise gas volumes in your inventories in Europe: in Austria and Germany,” Putin told Gazprom Chief Executive Officer Alexey Miller Wednesday.

  The move “will allow you to meet your contract obligations stably and rhythmically, to supply your European partners with gas in the autumn-winter period and, among other things, create a more favorable situation in the European energy market,” Putin said at a meeting broadcast on state television.

  While the news will certainly be welcome to Europe, where a historic energy crisis has sent electricity prices to record levels and fears that a cold winter will lead to even more pain, we would not hold our breath: after all, Putin promised to push out European deliveries several weeks ago only to see even lower nat gas transit via the Yamal pipeline.

  

  To be sure, Putin has been very clear in laying out Russia’s ask to save Europe: activate the Nord Stream 2 pipeline. As long as Europe’s bureaucrats refuse to comply, any hope that electricity costs will slide in the coming weeks will be at best – pardon the pun – a pipe dream.

   

  Tyler Durden
  Wed, 10/27/2021 – 14:45

• What's Really Driving The Crazy Rally In Commodity Prices?
  What’s Really Driving The Crazy Rally In Commodity Prices?

  Submitted by Stuart Burns of Oilprice.com

  Bulls are pointing to the surging metals prices as evidence a supercycle is alive and well. However, no one but a snake oil salesman would suggest that what we are seeing is anything healthy.

  The 10-year commodities boom seen earlier this century, for example, was driven by rapid industrialization in China, a long-term expansion that lifted hundreds of millions out of poverty.

  

  Energy costs drive supply constraints

  But the current surge in prices is a result of energy markets driving supply-side constraints. Apart from the chaos that is the current global energy market, it’s China’s energy crisis that is principally driving metals prices higher.

  However, China is far from alone in facing an energy crisis. Multiple other clouds are gathering. Some are short-term, such as coal and natural gas supplies. Others are longer-term, such as explored in a Financial Times post this week.

  Property market challenges in China

  The precarious state of China’s property market and the longer-term push by Beijing to pivot the economy away from construction toward consumption.

  The impact of China’s property market on the last supercycle and the current metals market cannot be overestimated. Even today, China’s property sector accounts for an estimated 30% of the country’s near $15 trillion economy, the Financial Times reports, Construction alone accounts for about half of China’s steel consumption.

  Some metals, like copper, cobalt, nickel, and lithium, hold promise in the longer term due to rising demand from electrification. There is evidence to suggest this will simply supplant demand from a dwindling construction sector.

  William Jackson, chief emerging markets economist at Capital Economics, is quoted as saying “China’s property sector is right at the end of a boom period,” which would have profound consequences for suppliers of products like iron ore, coking coal, and metals used in construction, like copper and aluminum.

  The impact is not going to be uniform across the commodities sector, some metals will find alternative applications, like electrification. Commodities like agricultural products will continue to see increasing demand from a rising global population and rising living standards.

  But global GDP growth will feel the effect of a smaller Chinese property sector in the years to come.

  According to the IMF, China delivered 28% of all global output growth between 2013 and 2018, the Financial Times states. If China’s property sector accounted for one-third of that, the sector was responsible for more than 9% of worldwide growth worldwide over that period.

  The road ahead

  The current logistics and supply-side constraints, while immensely painful, will prove relatively short-lived.

  We are already seeing steel prices softening. While non-ferrous metals have put in a burst of bullish gains this month, these will likely ease next year, too.

  Of more profound and far-reaching impact will be a sharp retraction in China’s construction sector. That would have ramifications and undermine many sectors, such as iron ore, for the rest of the decade. It would also impact economies like Brazil, South Africa, and Australia, which are so reliant on the Chinese construction market.

  Tyler Durden
  Wed, 10/27/2021 – 14:27

• Dan Loeb Urges Breakup Of Energy Giant Shell 'To Cut Carbon Output & Increase Shareholder Returns'
  Dan Loeb Urges Breakup Of Energy Giant Shell ‘To Cut Carbon Output & Increase Shareholder Returns’

  After saving investors by pulling off double-digit returns in Q3, while the overall market experienced weakness and volatility, Dan Loeb’s hedge fund Third Point is now in the business of saving the planet too it seems.

  

  Having taken a large stake in Royal Dutch Shell PLC, Loeb is urging the oil giant to separate into multiple companies to retain and attract investors as many flee stocks seen as environmentally unfriendly.

  Shell is one of the cheapest large cap stocks in the world, trading at under 4x next year’s EBITDA and ~8x earnings at “strip” prices.

  It also trades at a ~35% discount on most metrics to peers ExxonMobil and Chevron despite Shell’s higher quality and more sustainable business mix.

  Compared to its peers, Shell generates a much larger percentage of its cash flow and earnings from stable businesses that have a major role to play in the energy transition.

  According to the latest letter to investors, Third Point believes Shell should consider creating at least two stand-alone companies: one with legacy businesses such as refining that would provide steady cash flow and another that houses renewables and other units requiring substantial investment.

  “For example, a standalone legacy energy business (upstream, refining and chemicals) could slow capex beyond what it has already promised, sell assets, and prioritize return of cash to shareholders (which can be reallocated by the market into low-carbon areas of the economy),” the letter reads.

  And a standalone LNG/Renewables/Marketing business could combine “modest cash returns with aggressive investment in renewables and other carbon reduction technologies,” with the business benefiting from a “much lower cost of capital.”

  Crucially, Loeb wants people to know this is not just about the money, claiming in the letter that if Shell pursues this type of strategy it would probably lead to an “acceleration of carbon dioxide reduction as well as significantly increased returns for shareholders,” adding that he sees opportunity for “improvement across the board.”

  The billionaire hedge fund manager praises Shell’s reduction in refineries, from owning 54 in 2004 to only 5 by year-end 2021, as a “remarkable accomplishment,” and says Shell is positioned to return capital “earlier and more aggressively than peers,” due to its “massive” dividend cut and asset sales.

  Many ESG investors employ a strategy of buying companies that already have a clean bill of health.

  A lesson from our prior engagements is that it is often most impactful to invest in companies where the opportunity for positive change is the greatest.

  While daunting, there is perhaps no bigger ESG opportunity than in “Big Oil”, and specifically, at Royal Dutch Shell.

  We are early in our engagement with the company but are confident that Shell’s board and management can formulate a plan to accelerate decarbonization while simultaneously improving returns for its long-suffering shareholders.

  Royal Dutch Shell ADRs, traded on the NYSE, spiked on the report…

  

  Finally, amid all the current soaring/record energy costs around the globe, Bloomberg’s Javier Blas sums up the farcical virtue-signaling (and hypocrisy) being seen by activist investors when it comes to fossil fuels…

  We better get oil demand peaking, and soon, and then falling even faster, because oil capex is effectively over. Activist investors are taking over Big Oil, and they want their cash, and quickly (and save the planet, that too…) #OOTT

  — Javier Blas (@JavierBlas) October 27, 2021

  As Blackstone Inc. co-founder Stephen Schwarzman warned this week at a conference in Saudi Arabia: “We’re going to end up with a real shortage of energy,” he said.

  “And when you have a shortage it’s just going to cost more and it’s probably going to cost a lot more. And when that happens you’re going to get very unhappy people around the world, in the emerging markets in particular.”

  *  *  *

  Full Third Point letter below:

  Third Point Q3 2021 Investo… by Zerohedge

  Tyler Durden
  Wed, 10/27/2021 – 14:07

• Democrats Nix Paid Leave In Latest Cut To Social Spending Package
  Democrats Nix Paid Leave In Latest Cut To Social Spending Package

  Update (1726ET): It seems Congressional Democrats can’t stop losing today.

  After eliminating the billionaire tax as a source of revenue for their massive spending proposals, Democrats have now nixed plans to include a paid-leave program in their social spending and climate-change bill, according to the Wall Street Journal. The proposed program initially offered 4 weeks of paid leave, which was whittled down to four weeks – and has now been eliminated altogether, according  to people familiar with the matter.

  Meanwhile, the White House is scrambling to bring Democrats together around the bill – which now has a $1.75 trillion price tag – down from the $3.5 trillion that House progressives insisted they wouldn’t accept – holding a parallel bipartisan infrastructure bill hostage until they get their way.

  So much for that.

  

  If Democrats can reach consensus before the end of the week, it will open the door for the possible passage the infrastructure package.

  On Wednesday, White House officials met with moderate Democrats Joe Manchin (WV) and Kyrsten Sinema (AZ), while President Biden met with Sen. Bernie Sanders (I-VT) in the afternoon.

  *  *  *

  Update (1454ET): It’s official – the billionaire tax is officially dead, according to House Ways and Means Chairman, Richard Neal.

  “Some of the provisions that separated the two chambers — it looks to me as though one of the more controversial ones is currently out,” he said.

  According to Bloomberg‘s Laura Litvan, Neal is discussing a ‘millionaires surtax’ for those earning over $10 million.

  He says the House is discussing with Senate a millionaires surtax for those earning more than $10 million.

  — Laura Litvan (@LauraLitvan) October 27, 2021

  The House is discussing with the Senate the inclusion of a 3% surtax, on top of the top income rate, for those earning more than $10 million, Neal, chairman of the tax-writing House Ways and Means Committee, said Wednesday. -Bloomberg

  *  *  *

  Update (1402ET): According to Punchbowl News’ Jake Sherman, the billionaire tax is ‘all but dead’ thanks to opposition from moderate Democrat Joe Manchin.

  Because of @Sen_JoeManchin opposition, the Dem leadership and White House sources tell us that the billionaire tax is all but dead.

  — Jake Sherman (@JakeSherman) October 27, 2021

  *  *  *

  Senate Finance Committee Chairman Ron Wyden (D-OR) has released the much anticipated details of the tax on unrealized capital gains for billionaires, as Democrats are working on how they will raise enough taxes to offset massive spending packages which Democrats are attempting to thread the needle within their own party to pass. According to House Speaker Nancy Pelosi (D-CA), Democrats hope the plan will raise as much as $250 billion.

  

  Notably, this is the second major tax proposal Wyden has released in recent days, following a proposal for a minimum tax on corporate profits (something that has become a global priority for Democrats). It follows weeks of negotiations among Democrats, and comes after Arizona Sen. Kyrsten Sinema told her colleagues that she couldn’t support raising tax rates on top earners and corporations.

  From a high-level view, the proposal which would take effect for the 2022 tax year, would affect taxpayers with assets of more than $1 billion, or income of more than $100MM for three years in a row. This would affect about 700 of America’s most important taxpayers. It would impose the 23.8% tax rate for long-term capital gains on tradable assets such as stocks that increase in value over the year, whether or not they have been sold.

  The plan would upend longstanding tax-code principles that allow taxpayers to defer paying capital gains levies on their assets until they sell, an approach that has been gaining popularity among Democrats looking to address worsening wealth inequality. The 50-50 partisan split in the Senate means Democrats must stay unified to pass the Biden tax-and-spending plan using a budget vehicle called reconciliation, with Vice President Kamala Harris as tiebreaker.

  Democrats have been looking at other revenue options in recent weeks, including a 15% corporate minimum tax unveiled Tuesday to raise as much as $400 billion over 10 years. Sinema quickly announced her support for that plan; her position on the billionaires’ tax remained unclear as of late Tuesday. –Bloomberg

  That said, it would also allow taxpayers to take deductions for losses on assets.

  For highly liquid investments, such as stocks, applicable taxpayers would pay taxes on gains, or claim deductions (if they ended up with a portfolio-wide loss) annually. Billionaires would be able to carry forward losses, or carry back losses for three years in some circumstances.

  For non-liquid assets like real-estate, billionaires would not pay taxes annually on the gains but would pay a charge, on top of regular capital gains taxes, when they sell the assets. The tax would also impose levies on billionaire ownership stakes in businesses incorporated as pass-through entities and in trusts  including real estate investment trusts, according to a statement.

  The so-called billionaires tax, announced by Senate Finance Committee Chairman Ron Wyden, is part of a two-pronged legislative strategy that also includes a proposed 15% corporate minimum tax on the most profitable U.S. corporations, which was unveiled on Tuesday.

  Wyden and other lawmakers, including Democratic Senator Elizabeth Warren, say the legislation is intended to curtail tax avoidance by corporations and the wealthy and could generate hundreds of billions of dollars to pay for Biden’s “Build Back Better” legislation, which is expected to cost between $1.5 trillion and $2 trillion.

  Wyden claims that billionaires are “hiding” assets by simply not selling them and passing them down to their heirs, and implied that this act of generational wealth transfer is inherently “unfair”.

  “We have a historic opportunity with the Billionaires Income Tax to restore fairness to our tax code, and fund critical investments in American families,” he said in a statement.

  Billionaires disagree

  “It’s a stupid idea,” said hedge fund manager and billionaire, Leon Cooperman, who warned of “unnatural” economic reactions.

  

  “The progressives are out to lunch,” he added. “We should not be attacking wealthy people.”

  “Are we a capitalist nation or are we a socialist nation?”

  Sen. Elizabeth Warren, meanwhile, said that Cooperman is in her sights – saying on Tuesday “Leon Cooperman, I’m looking at you, baby.”

  In a briefing on Democrats’ tax increases, Sen. Warren elicited a laugh saying she’d made billionaires cry over her tax increases.

  Pressed for names, Warren told reporters “Leon Cooperman, I’m looking at you, baby” pic.twitter.com/kXPaqTqKcj

  — Nathaniel Reed (@ReedReports) October 26, 2021

  Elon Musk, the world’s richest person, also chimed in, saying in a Monday tweet that “Eventually, they run out of other people’s money and then they come for you.”

  Earlier this week, Treasury Secretary Janet Yellen (and a handful of her fellow Democrats in the Senate) announced their intentions to help fund President Biden’s ‘Build Back Better’ agenda with a new tax on unrealized capital gains for the wealthiest Americans. The event led to this widely viewed clip of Yellen explaining that the tax on “extremely liquid assets” would only apply to the wealthiest Americans during an interview with CNN’s state of the Union.

  NEW – U.S. Treasury Secretary Yellen proposes a tax on unrealized capital gains to finance Biden’s “Build Back Better” plans.pic.twitter.com/pefi3PhoDe

  — Disclose.tv (@disclosetv) October 24, 2021

  We later learned that Democrats were setting their sights on $5 trillion of billionaire wealth extraction, something that would move the US closer to AOC’s stated goal of eliminating billionaires.

  The White House backs the corporate minimum tax, which would dovetail with a global corporate minimum tax recently agreed by 136 countries and aimed at corporations that pay little or no tax by gaming the international tax system.

  But the billionaires tax faces potential opposition from Democrats in the House of Representatives, who favor straightforward hikes in tax rates for companies and the wealthy as a way to fund the Biden agenda.

  Challenges ahead

  Even if the legislation passes, the proposal would likely face an immediate legal challenge by wealthy taxpayers, according to legal experts cited by Reuters.

  “I could potentially see people trying to get out of easier-to-value assets,” said attorney Tim Laffey, head of tax policy and research at Rockefeller Capital Management. “Obviously, everything that’s publicly traded has an established value, so maybe we see a push into alternative investments.”

  Wealthy individuals will also likely contest whether appreciated assets that have not been sold can be considered as taxable income.

  “They are talking about rewiring the entire economy after a couple of days’ discussions on the back of an envelope,” said Senate Minority Leader Mitch McConnell, who said the “harebrained scheme” had not received “any meaningful study or scrutiny.”

  Manchin? Sinema?

  Of course, now that you’ve read this far – moderate Democratic Sen. Joe Manchin is a “no” on the billionaire tax – and has long had concerns about “mark-to-market” proposals. On Tuesday he told reporters: “I haven’t seen the text on it,” according to Axios. He did, however, float a “patriotic tax” of 15% for wealthy Americans who are able to avoid paying taxes.

  🚨🚨 Manchin a no on billionaire tax!

  After Sinema was a no on raising marginal and corporate rates. https://t.co/jg339MyclB

  — Jake Sherman (@JakeSherman) October 27, 2021

  Manchin says he “doesn’t like the connotation that we’re targeting different people” re: the billionaires tax proposal, but also floated a 15% “patriotic tax” o the wealthy…

  — Jacqui Heinrich (@JacquiHeinrich) October 27, 2021

  No word on where Sinema stands regarding the billionaire tax.

  Readers can find the entire 100+ page proposal below:

  If you have the time, feel free to read it – because it’s not like too many Congressional Dems will even bother.

  Tyler Durden
  Wed, 10/27/2021 – 14:02

• Congested Port Of LA Receiving Empty Containers From Gulf, Southeast
  Congested Port Of LA Receiving Empty Containers From Gulf, Southeast

  By Lori Ann LaRocco of FreightWaves,

  American Shipper is reporting another wrinkle facing the Port of Los Angeles as it tries to clear the massive congestion. Thousands of additional empty containers are en route to the Port of Los Angeles from East Coast and Gulf Coast ports.  

  

  Over the last couple of weeks, up to 2,000 empty containers originating from the ports of Charleston, South Carolina; Savannah, Georgia; New Orleans and Houston were headed to the Port of Los Angeles to be loaded onto vessels. These containers were requested by the carriers and will create more burden for the port terminals to receive local trucks trying to unload their own empty containers.

  “The biggest hurdle we see in the market is the inability to return empty containers,” said Weston LaBar, head of strategy at Cargomatic.

  “This congests our carrier and customer yards and adds to the chassis shortage. Ultimately this can delay the ability to pick up imports due to the shortage in chassis availability and yard space. 

  “We have customers whose warehouses can receive goods; however, the lack of chassis and space in their yards due to the stranded empties impacts the ability to keep a delivery cadence.”

  The phenomenon of containers traveling from other ports to Los Angeles is not a new one. Local truckers tell American Shipper the port is known to be the “empty container dumping ground in the country.”

  “Even containers from Port Rupert [in British Columbia, Canada] have made their way down to Los Angeles via rail,” said one trucker who requested anonymity. “This is making a bad situation worse. There is a finite number of slots to return empties. How can we pick up empties if we can’t unload our chassis?”

  The reason for the carriers moving containers from the East Coast either by truck or rail to the West Coast is time. The LA trade route to China is faster than the maritime routes from the East Coast and Gulf Coast ports.

  Despite the claims of 24/7 ports by the Biden administration, the Port of Los Angeles is still in talks with the various port stakeholders to seek participation. In an effort to expand service, the port is opening gates at 7 a.m. PT and on weekends so truck drivers can return empty containers and pick up loaded boxes. 

  But because of the lack of warehouses open during the flex time and on weekends, coupled with the container restrictions that are imposed by the terminals at the order of the ocean carriers, appointments are being left unused.

  According to the Port of Los Angeles, 50% of weekend appointments have been left open and 30% of weekday appointments remain unused.

  The Harbor Trucking Association says the surge of extra containers will only add to the already stressed system.

  “We are trying to free up chassis, but we can’t because we are competing with these additional empties contracted by the ocean carriers,” said Matt Schrap, Harbor Trucking Association CEO. “This is not helpful for the supply chain.”

  The acceptance of empty containers at the Port of Los Angeles is on a first-come, first-served basis. That means if the terminal hits its empty container allotment at noon and a trucker arrives at 12:05 p.m., he or she will be turned away with a full chassis and cannot pick up a loaded container.

  This photo given to American Shipper by port sources illustrates the unused truck appointments. The photo was taken from the APM Terminal at 7:38 a.m. PT at the Port of Los Angeles last Wednesday. It was a flex gate and opened at 7 a.m. The first appointment was a Walmart tuck at 9:45 a.m.     

  “We’ve been more successful than the market at threading this needle for our customers,” said LaBar. “But an increase in empties coming from the East Coast, Gulf Coast and even Canadian ports should be a cause for concern for everyone servicing and using the Southern California ports.” 

  Tyler Durden
  Wed, 10/27/2021 – 13:52

• Oil Drops As Iran Says Nuclear Talks With West To Resume Next Month
  Oil Drops As Iran Says Nuclear Talks With West To Resume Next Month

  After months of stalling and threats of walking away from nuclear negotiations which were last held in Vienna in June, there’s been a reported major diplomatic breakthrough between Iran and EU mediators in Brussels on Wednesday. Though not all parties have yet to confirm, the JCPOA nuclear talks are set to finally resume by the end of November. 

  “We agree to start negotiations before the end of November. Exact date would be announced in the course of the next week,” Ali Bagheri, Tehran’s chief negotiator, announced on Twitter. He cited “a very serious & constructive dialog” with EU foreign policy Deputy Secretary General Enrique Mora, and said an “exact date would be announced in the course of the next week.”

  

  Iran has in recent weeks signaled multiple times it’s willing to return to the Vienna process, which is aimed at reviving the 2015 nuclear deal which the Trump administration had pulled out of in 2018. Iranian leaders have consistently maintained that the US must immediately ease sanctions in order to show ‘good faith’ – given it’s Washington that unilaterally pulled out of the deal in the first place. 

  As AFP reviews, “Joe Biden has said he is ready to re-enter the agreement, so long as Iran meets key preconditions including full compliance with the deal whose terms it has repeatedly violated by ramping up nuclear activities since the US left the pact.”

  Iran has seemed to use enrichment activity as leverage for negotiations with the West, with the International Atomic Agency (IAEA) this week observing greatly expanded activity at the Natanz Uranium Enrichment Facility: 

  Iran has taken another step to increase its enrichment activities in purifying uranium beyond 20 percent, Reuters reported Monday, citing a report by the International Atomic Agency.

  The move at Iran’s Natanz plant is likely aimed at building knowledge of the refinement process, the report said, as the product from changes to centrifuges is not being kept.

  The IAEA wrote in a report that “On 25 October 2021, the Agency verified that Iran began feeding (uranium hexafluoride gas) enriched up to 20% U-235 into a single IR-6 centrifuge in R&D line 2 at PFEP,” the IAEA said in its report.”

  At the same time Tehran is further demanding the unfreezing of Iranian assets abroad: “(US President Joe) Biden has to put his goodwill into practice by for instance releasing $10 billion of Iran’s blocked assets,” Iranian Foreign Minister Hossein Amirabdollahian said recently on state TV.

  This month Washington too has been making veiled threats which could serve to permanently derail Vienna talks. The Biden administration has recently agreed with Israel that “other options” will be pursued against Iran should Vienna talks fail – a clearly veiled reference to military action or else covert espionage. 

  Amid the global energy crunch and as oil futures continue climbing – on Tuesday hitting seven-year highs – the benchmark price edged lower Wednesday on news that Iran will return to the negotiating table, with futures in New York falling as much as 2.2% on Wednesday.

  Tyler Durden
  Wed, 10/27/2021 – 13:30

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